Many Opportunities to Profit

I typically narow in on one or two stocks daily to profit from options. I feel it is best to know a stock so good that you recognize patterns that occur with it on a daily basis. I like using JP Morgan, I quit using Alphabet, Verizon is a fun one to make money on daily, Boeing is another one that moves and looks predictable,... I could go on and on. You can make money with options based on news for the day too.

Apple

Apple got a justified downgrade today based on limited device sales moving forward. That only makes sense if their service revenue is based on products that you get free other places and I could go on from there, but the point is Apple was set to open lower and probably fall further today. It failed to move up at open, so it was profitable to buy put options with a strike price of 200. You would have made a nice profit if you sold them when it reached 198. You could have made some money with 200 calls if bought at the bottom and sold when it peaked around 200.34. I did not investigate the options on it, but should have. See my chart to the right.

Boeing

Boeing has continues to have negatice news as a result of the grounding of the 737 Max. If somethinng makes the market negatice, Boeing likes going down with it.

Boeing had some nice movement up from the opening price, but failed to go hgher on the retest which would have been a great opportunity to buy put options. Call options could hav been purchased at the bottom, but it most likely was not going to reach the morning highs like JP Morgan.

I strongly believe and found that holding an options day trade for more than 90 minutes creates a losing position. 

JP Morgan

JP Morgan opened lower from Friday's close. It found a bottom at 112.50 and shot up from there. It came within penny's of break even for the day. If you bought 114 call options when it wsas at 112.50 at .35 and when it made it close to break even, you could have sold for .55 at a nice profit. At that peak, you could have looked for a place to buy 113 put options and wait for it to come close to the morning bottom.

Timing Summary

• Apple
• downside 25 minutes
• upside 1 hour and 20 minutes
• Boeing
• downside 1.3
• JP Morgan
• upside 20 minute
• downsie: from 11:20 to 3:05

Summary

It doesn't take all day to day trade. The key is to recognize when price is going to be spring loaded in one direction or the other, Do not expect it to continue throughout the day. Take profits quickly and do something else for the rest of the day.

Hopefully my blogs show you that there is money to be made with the market, but hopefully you understand there is a level of risk and if you don't time your entry and/or exit points correctly, you may be luck to break even or escape with a small loss.

Be paitent

Take quick action

Prepare to exit quickly if you are wrong

Prepare to exit quickly if you are right

And most important, sign up for a free papertrading account with Think or Swim, ETrade or Schwab. Learn the strategies and don't waste money.

When holding a Day is Bettter

I try to keep my trading more simple in hopes of reducing errors and maximizing profits. I made a bunch of money trading Alphabet (GOOGL) in the past, but have lost much more. I appreciate sticking with stocks that move both directions in a day most of the time. This is true most days with JP Morgan. JP Morgan runs up, comes back to where it started the day, runs up again and comes down again... and might finish up.... or down. If you are disciplined, you can make money trading the options of JP Morgan.

Daily Pattern Trading

The really cool thing when trading options is that you can get a similar price after it has made part of the move in the direction you are expecting. For example, JP Morgan traded around $114.50 Monday morning. At that peak, you could have bought a 113 strike put with the expectation of downward movement for .50. It went down and then it retested that peak when it was at $114.20. During that second peak, you could have bought the same put options for .50 again. JP Morgan then went down near where it started the day around $113.30 and you could have sold those put options for over 1.00.

Today was similar as JP Morgan shot up to $114.20, came down and back up to

$113.92. At both times you could have bought the 113 strike put options for .50. Near open they were worth .79, so you must use that as a reference point where you wold need to consider getting out. Please see my  illustration of JP Morgan for 7/2/19. If you would have bought 10 of those put options for .48 ($448 cost) and sold them for .80 ($800), you see you would have profited $350. That is not a bad day job!

The problem we get is getting greedy. When there are no catalyst involved that could push the stock lower, we don't need to expect it to go lower. Take your profit and move to trade another day. I wrote that because that is not  what I did. I should have sold at .85 and would have been happy, but I was already unhappy with myself for buying at .61 instead of being disciplined and placing my buy order for .48. It would have been executed.

When To Be Greedy

If you follow certain stocks, you know they trade in a range. Certain stable companies get a little over sold and then get a huge push the next day. It happens with more stocks than you think if you pay close enough attention. AMD comes to mind and even IQ has made it to $18 before moving sharply up to $21 in a day. Verizon is more solid that those and their options are cheap.

Verizon has sold off from the $58.20 mark a few times in the past 9 months. Most of those times it finds a level of resistance on a Friday. It moves lower on Monday, but not by much. Then on Tuesday it spikes up over $1 to over $58/share. There is a safe way to play it and an aggressive profit spiking way to play.

On that Monday afternoon, you could buy $58 strike call options 2 or 3 weeks out. This would be safer because you do have time on your side to wait for the gains. I bought July 26 $58 strike calls yesterday at .28. I placed my sell order today as it was going up to get .50 and they sold while finishing the day at .68 which is more than 2 times your money.

I am aggressive too, so I bought $57 strike calls when it was trading for $56.80 on Monday at .32. If I were more patient and noticing the pattern more clearly now, I would have waited or placed my buy order with a limit price of .22. At that price, I could have bought 15 and it spiked this morning above $58 and could have sold those calls for over 1.00. That's 5 times your money in one day!!!

The subtitle is when to be greedy. I write that because I profited on this trade twice this year and both times I sold at 2 times my initial investment instead of 4 times minimum. I hope to do better next time.

There is a possibility that it runs up higher over the next couple of days, but there is also a possibility that Trump says China lied and more tariffs are coming just to tank everything quickly.

I am quite sure that 10 years from now, there will be a huge investigation on how President Donald Trump manipulated the stock market by telling certain personal stock traders the news in advance to buy puts on the market and calls when he had favorable news. The scandle will discuss how much money his family profited by this manipulation. Then right after he goes to trial and is found guilty, he will pass from heart attack or something. It just looks like a pattern of evens similar to watching certain stocks move in the market.

Turmoil to Profit in the Market... and Tesla

Everything opened lower this morning with the exception to Verizon and McDonald's who reported their third quarter earnings and were awesome. The huge drop was a carry over from the down Asian and European Markets. From open, everything went up for the first 20 minutes before retesting the downside. Most stocks dipped slightly lower than where they opened, but once they hit that retest point, everything went up.

You certainly could have profited by buying anything except Catepiller and profited today, but you would have been best to wait for that retest of the bottom. Buying Call Options on Apple and Netflix were very good to profit especially if you held them until the end of the day. Alphabet (GOOGL) and Amazon had great movement, but because they report earnings on Thursday, their options are too expensive to mess with.

Tesla options got very expensive from open because the company has elected to move up their earnings report to Wednesday which is a week earlier than scheduled and 2 weeks before normal. Obviously they must have good news to move up the earnings report like this as we expect them to produce the company's first profitable quarter in a long time. There was news today that notable short sellers have gone long on Tesla stating their new Model 3 is going to put them over the top.

I am very disappointed because I had 2 weekly Call Options with a 260 strike price that I closed out yesterday afternoon. Those 2 options would have been worth 3700 each by the end of Tuesday. If Tesla produces a huge profit, I would expect the company to trade up to 420 by the end of the week.

Something interesting happened today when Verizon reported earnings. Most stocks that move up before earnings announcement typically sell off the next day even when they beat their earnings report. Verizon has been steadily going up for the past month. After the earnings announcement, not only did the stock move up, but it continued going higher after the market opened. That has not happened since July of 2017. Since the 2nd quarter earnings announcement of 2017, every report has beat expectations but the stock reversed it's premarket gains to actually trade lower.

Apple was the first company to have this kind of positive stock movement after beating their numbers on the second quarter of 2018. McDonald's today had similar movement. This is completely different from Netflix which traded down every day since their earnings announcement until today. This trend appears to be reversing with bell weather companies like Apple, Verizon and McDonld's. On Wednesday before the market opens we will get Boeing and AT&T earnings. Boeing will be is expected to be awesome and AT&T won't. I would expect the market to be mixed on Wednesday with some late day upward movement.

Upward movement is expected when Amazon and Alphabet report earnings this week. Both companies are around 200 points off their all time high that was established 3 months ago. What will be interesting is if they move up after earnings, open the following day higher and if they can keep those gains and move higher to get closer to their all time highs. FANG companies tend to sell off after reaching a huge increase. They were making new highs the past couple of quarters post earnings, so this feels different. 

Friday Tariff Flustered Market

The August jobs report came in a little softer than what the market was looking for as everything went down after it was released before the market opened. Most everything moved up during the day until around 1pm when Trump announced more tariffs on China. Everything immediately sank to the lows of the day and most rebounded from there with the exception of Apple. In the last half hour of trading it was announced that the tariffs will affect Apple more than expected which knocked 3 points off Apple. I expected Apple to move down before moving higher. I don't think it is done moving down as it should get below 218 before taking off to new highs next month.

Boeing was doing well this week until Friday when it went down after the jobs report. It bottomed for the day after the tariff announcement as it moved up from there. Verizon got a downgrade earlier this week that appears to be wrong as it dropped a point and made it up in a day. Verizon is a stock to hold and unfortunately not one to use with options unless it had sharp movement in one direction and expects to bounce.

EA was down and looked to have bottomed at 111 where it bounced. Today it moved sharply higher to 116 before giving back a point. Based on where it fell from based on a delay of a new game and the new games that have been released between Madden, NBA Live and this weekend's Overwatch turnament, EA should move up further by Monday and possibly for the rest of the week. I would expect it to hit somewhere between 118 and 122 by Tuesday if not Monday. I bought 115 Calls for September 14 when it was at 114 on Friday.

Facebook appears to have bounced off 160 and I would expect to see it move higher next week but may come back to retest that base if they have any negative news. I would expect positive news regarding Instagram advertising coming very soon and push Facebook above 180 in the next month. Twitter on the other hand may be close to a bottom and should bounce from this current level of $30/share, but unlike Facebook, Twitter doesn't have an additional platform to use as a wildcard like Facebook.

On to my day trade... Alphabet appeared to have bottomed yesterday as it didn't go past the bottom. It was a learning lesson as you don't expect it to reverse until you see a bottom has formed. You should never attempt to time the bottom as it will be obvious if it is to bounce. I mention this because Thursday I was early to buy a Call Option as I expected it to bounce higher, but should have waited and could have bought at a better price. I sold at a loss because it was going down further and did not have proof that it was reversing. If I did not sell that Call Option earlier, I could have sold it for a profit by the end of the day because it moved up above 1180 as that was the strike price that I bought when it was around 1173.

Now I will reference my 1 and 5 minute chart numbers with the following descriptions:

1. It might have been better that I did not make that kind of profit on that one Call
   
   Option on Alphabet on Thursday because I might have held it to be higher on Friday. Higher is where Alphabet moved after if opened below 1170. 
2. Based on how it appeared to be done moving down on Thursday, I waited for a sign that it was going up and bought 2 1175 Call Options when it was close to 1175. 
3. It appeared to stop moving up when it got to 1189 and I got out of my Calls as it moved down from there.
4. Based on the upward movement 2 weeks ago, it appeared that Alphabet dropped to 1183 where it closed on Thursday and would move much higher than the prior day high of 1189. I mentioned 2 weeks ago that this is dangerous to expect that to happen as it doesn't happen like that too often especially on Fridays. I lost a little of my gains on attempting to relive 2 weeks ago miss. As a learning lesson, there is not enough movement downward to expect upward movement unless the stochastic indicated that it bottomed with little price movement downward. I sold that call for a loss when I saw it move further downward below 1181. 
5. From the tariff news, Alphabet moved down 10 points very quickly and
   
   appeared to want to bounce off that which it did. Based on my belief that it is going to move up for the next week since the bottom was formed on Thursday, I thought this might be a great opportunity for a bounce. Unfortunately option prices are priced higher on movement upward than when it settles even if higher on the last day of the option contract. 
6. It did move back to 1181 which is 10 points off that tariff low. Once again, I bought a little late or early and sold early as I did not trust it to move up higher. 

Next week I would expect to see Alphabet to move higher and probably back to 1260, but don't know that I would care to hold any options over night next week as more tariff news or regulation movement from Washington could push tech to open lower before moving higher. 

Trading Google and Verizon Post Earnings

Alphabet, Google's parent company, had a blow out 2nd quarter earnings report. The stock shot up post market to 1272 and opened near there on Tuesday morning. It wasn't necessarily a buy there. Based on the sharp movement downwards, it indicated that it would go down. The best bet would be to buy a Put option when it comes back near where it opened which happened around 9:40am. If you bought that, you could hold it for 20 minutes and sell it for a huge profit at 10am.

At 10am you could have bought Call options on GOOGL and held those for 20 minutes and sold those for a huge profit when it returned to 1271 and then be done for the day. Below show the same chart broken down by 1 minute intervals. The up and down movement was too crazy for the rest of the day even though it trended all the way down to 1249 before turning back up.

Verizon reported great earnings before the market opened Tuesday morning. It opened higher, but fell hard below Monday's close. This was a buying opportunity because it was due to go back up near where it opened. You could have bought Call Options with August 10 expiration for around 20 cents and turn around and sold them for 50 cents by the end of the day. If you did that with 100, you would be quite happy.

I hope this helps as this is the first blog where I broke down how to trade it.

Tariff Pain Hits the Markets!

• Almost everything was down big to open the day today. Boeing experienced the biggest drop. It bounced off 338 as JP Morgan bounced off 106.50. From those lows, they went up and down, but didn't fall as bad as this morning.
• Verizon received an upgrade today and it was one of the few stocks that was up all day. I said it was going up from the 47.30 bottom.
• The FANG stocks were down this morning hitting their bottom around 10:30am. They came up some, down some and took off to the upside from 1:30pm through 3pm. Alphabet was within 1 point from yesterday's close, but Amazon and Netflix hit new all time highs today.
• Tesla wend down and didn't come up much today.
• Money is made when the market is up or down. I hope you have time to make yours.

Market Drama, Dow Drops and Tariffs, Oh My!!!

• We woke to news that President Trump was going to impose tariffs on China again. After what appeared to be a successful meeting with North Korea's Kim, this might be a surprise that the tariff talk is heating up again. The market dropped on this news from open.
• The tech stocks had nice runs the whole week even despite the rest of the market being down on Thursday. Friday they remains pretty even. Some were down and some were up, but Apple appeared to be down a little more compared to others. Apple was going to make all new phones with the high resolution OLED screens. Due to higher priced materials increasing the price of their phones, Apple has decided to keep the course unchanged and remain with their standard LCD screens. I doubt that means they will drop the price of the new phones as they will continue to try to get $2 out of 3 quarters.
• Boeing dropped hard in the first hour of trading on Friday. It had a nice run up from 2:30 to 3pm only to give most of it back to end the day unchanged, but down for the week.
• Home Depot had it's regular Friday rally first thing in the morning. It appears to be the one stock that you can load up your Call options on it's low from Thursday  and sell by 10am on Friday. Sure it went down, but not below where it closed on Thursday and went back up higher.
• Return to retail was lead by gains in Best Buy, Macy's and L Brands. I like these for their high dividends and positive track record this year. I have found that when you have these in your portfolio, they are good to sell Call options when they hit their relative highs in about 10 days.
• The same is true for Verizon who went down with AT&T over the past couple of days. When Verizon hits $49.50 it is good to sell a Call option against your position. At the same time a speculative person would consider buying a Put options to sell when it hits $47.50. I don't know if you will be that lucky because if Verizon follows AT&T, the bulls will run up the price over the next couple of weeks since the AT&T acquisition of Time Warner is going through right away.
• I found that JP Morgan bottomed this morning when it got down to 106.27. JP Morgan has traded in a range between 106 and 110 over the past month. It ran up past 108 after that and came down a little. I expect it to go up more this coming week as interest rates will settle in. You might get another chance to get it at 106 next week, but not likely.

Exciting Start to the Week in the Market

• Apple is holding its annual developers conference starting today and this time the stock didn't drop. It actually hit a new high again. Amazon hit a new all time high as it was up the whole day. Alphabet was up for most of the day also. Facebook didn't lose too much after the new report on the sharing of user data.
• Microsoft hit a new high with news of their purchase of Github.
• Nvidia hit an all time high also today. Netflix was up, but Micron was not. 
• Almost all retail stocks were up today including Macy's hitting a 52 week high, Home Depot gained 4 points, Walmart and Best Buy were up too. 
• Boeing was up with positive news before market open which appears to be a reoccurring theme, but it struggles to hold on to its gains.
• Verizon, the bank stocks and oil stocks were down today. 
• Tuesday is setting up to be a day of retraction and I am sure Trump will have something to say for Wednesday to create a drop. The market is going up as the Nasdaq hit a new all time high today, but there appears  to be a reason every week for a drop.

Amazon to Splat!

• Amazon ran up so far yesterday that it ran too far and went down today along with all of technology stocks. Google, Apple, Intel, Netflix,... everything went down after open. There was very little upwards movement, but the downward movement was not dramatic. Everything ran up with positive earnings this week made Friday a day to breathe. Even through earnings I have noticed that Google has shown resistance on Friday of each week where it has a nice move upwards. 
• In political news, Trump appeared to be mending fences with Germany. He basically said that Iran needs to put up money to fight Isis and they are not allowed to be nuclear armed. The investigation of Russian involvement with Trump's presidential campaign ended with no proof of collusion as Trump stated before. Korea appears to be uniting. So all appears to be getting better in the world today. Surprisingly the stock market didn't appear to notice.
• Everything went down before recovering to finish the day flat including Home Depot and Verizon. Good money could have been made buying calls at the early drop and selling about 30 minutes later.
• After the market closed it was announced that the merger of Sprint and T-Mobile will be completed. Given the 2 worst reception cell phone companies are merging, their new name should be Splat. I thing that is a better name than Worst Mobil, Hopeful Mobil or Almost Good Enough Mobile. WTF (WiFi Telephone is Fine).

Amazon, Chipotle Crazy Good!!!

• Chipotle's big earnings report was rewarded by doubling last night's gain today. They were the biggest winner until Amazon reported earnings after the market close on today. Not only did they beat their numbers, they announced that Prime Membership cost is increasing from $99 to $119 a year. Amazon's stock price jumped $100 in after hours.
• Microsoft and Intel had great earning reports after market close today also. I enjoyed trading Google options today as they started off lower from 1035 down to 1020 which is where I bought my 2 Call Options with a Strike Price of 1030 and sold them when Google hit 1040. I was done for the day, but Google wasn't done running up as it hit 1052 before closing at 1043. I expect similar movement on Friday on the heels of Amazon's huge day.
• Home Depot was up huge. HD has been in the cross hairs of professional investors for over a month looking for a break out. I didn't see anything new about them today so I hope to see they maintain the gain on Friday. 
• JP Morgan had a hard time getting out of the red today, but did end higher. Now that the tech companies are blowing away their earning reports, the banks look less exciting even with a rising interest rate environment. Apple was up and then down today. Boeing fell early, came up quickly, didn't come down to the morning low and by the late afternoon past the day's high above 345.
• Verizon was hampered by AT&T's weak earnings, but still finished the day close to even.

3% 10 Year Treasury Note + Cat Forecast

• Caterpillar (CAT) earnings report beat forecast and was up but started to fade after the market opened today. The CEO projected their first quarter earnings being the high water mark for the year. From there the market as a whole took off to the downside. From CNBC Fast Money show they said that this was expected as their business is a cyclical business. Around the same time the 10 Year Treasury Note broke through 3% for the first time in a long time. Buying Put Options on almost anything were a great buy at this point.
• Verizon (VZ) peaked within the first few minutes of the market open and dropped quickly, but did not go negative. It ran up further, but didn't break that early morning high before falling with the rest of the market. I believe this will continue higher over the next couple of days along with the rest of the market as interest rates ease. Due to the low volatility of Verizon, I would not recommend buying options on them until their next earnings report.
• FAANG pain began. Facebook, Amazon, Apple, Netflix and Google dropped hard for the whole day. There were a couple of times it appeared they were going up, but they were just retracing their downward movement as they came down so quickly. Netflix bond offering was not discussed by most analyst as it was expected due to their high cost of producing content. Alphabet (GOOGL) numbers were huge and growing tremendously, but due to their increasing cost it was sold off today along with the rest of FAANG.
• There was news about Facebook (FB) user information being stolen and this may be the next shoe to drop that pushed Facebook back to its lows for the year. They release earnings Wednesday after the market close. I would be a momentum buyer of options on Thursday if it makes sense. Apple (AAPL) reports earnings next week but more weak iPhone sales are expected and the stock price continued lower. I am a buyer if the price drops to the low for the year around $152. I feel weakness in either of these means positive for Google as advertisers may leave Facebook and Google is the only other game worth dealing with.
• JP Morgan (JPM)  and other bank stocks moved sharply up within the first half hour of the market open before tumbling down below yesterday's low. They moved up to end the day and I would expect them to continue to move the same way over the next few days.

Monday Market News

• The big news for the day as Netflix raising $1.5 billion in unsecured junk bonds to fund their projects (shows). This is a negative equity move and surprisingly it went up before dropping 15 at the low of the day. I made money on the short move up and could have made more on the way down, but I got out way too early. Being part of FANG, Netflix could have positive movement after Google earnings release after the bell, but I believe it has further to fall over the next couple of days.
• Apple started higher along with most of the Dow Industrials, but finished lower unlike Verizon which still ended up prior to their earnings report Tuesday morning. I feel the report will be good but something in it will cause a change in direction in share price. 
• JP Mortgan started up and came down sharply before moving sharply up to end down. Interest rates were up again today which I believe JP Morgan and the banks will exhibit the same trading pattern over the rest of the week and end on a high note. I received a text message today when Citigroup (C) fell below their 15 day moving average which I have seen as a buy sign for JPM.
• Interest rates being up 2 days in a row indicates to me that they won't be as big of a deal as long as they don't go higher and the market will be up for most of the rest of the week. Alphabet (GOOGL) positive earnings report will help drag the market higher and push the Bull Rally forward especially with Boeing and Amazon adding fuel to the fire for the rest of the week.