Option Trading Newsletter: November 21, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

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Click here for a sneak preview of our CYBER MONDAY HITS!

CYBER MONDAY COUNTDOWN CLOCK

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Great Morning !

Closing Prices From Yesterday

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No Numbers Today

Yesterday and Today

Important Reminder for POT:

The office is going back over the POT trades and updating the files, so when you go into the POT portion of our website you can click on any trade (trade #160 for example) and get the detailed history from beginning to end. How cool is that? You asked us to do this, so we are.

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Yesterday

The day started out with some excitement opening down by -$10, only top slowly wane out and drudge uphill all day to close up slightly. Oil and metals had their first up day in a while. Currencies all headed lower as the US dollar floats at lofty levels.

TODAY

No news scheduled to come out today. Typically prior to a primary expiration (3rd week) we get a big move on the Wednesday or Thursday before. This week we didn’t get it, so I am expecting a mark higher followed by a slow retreat. After we settle in we will probably stagnate all day.

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Option Trading Newsletter: November 20, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

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Click here for a sneak preview of our CYBER MONDAY HITS!

CYBER MONDAY COUNTDOWN CLOCK

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Great Morning !

Be careful of Ferguson grand jury out anytime. Doubt it will affect the stock market much other than one quick initial reaction.

Closing Prices From Yesterday

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Today’s Number(s)

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Yesterday and Today

Important Reminder for POT:

The office is going back over the POT trades and updating the files, so when you go into the POT portion of our website you can click on any trade (trade #160 for example) and get the detailed history from beginning to end. How cool is that? You asked us to do this, so we are.

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Yesterday

Another quiet day but the ranges are getting slightly larger.

Big Movers:

TSLA – News that a major US automaker announced today that they are “making a Tesla for the masses” help send this stock down almost $10.

NFLX was down $18. The only reason I could find for this was that they canceled the Bill Cosby show.

The Fed announced its rate decision that really didn’t say anything, and left analysts counting how many times they said “significant” or “near”. It initially sent bonds higher (after being down), but when sifting through the words bonds went right back down. This caused the markets modest gains to turn into modest losses.

TODAY

Ferguson:

I would bet a fair amount that the grand jury is going to announce today. They most likely want the news out before the weekend when the protestors have more free time.

Obama:

President Obama is going to announce tonight that he has not interest in consulting with the Senate or Congress on immigration reform and is going to pass an executive action. This will not be likely a big event for the markets (as the people are already here), but it could have some negative impact on the markets UNTIL it is has been done. Anything for more democratic voters after this last election, huh? Lol.

Markets

Ferguson and Obama are both about to happen – not have already happened. With good news about to be announced the approach is “buy the rumor and sell the fact”. When it is bad news the reverse is true. So I suspect there will be pressure to the downside tomorrow provided the economic numbers are neutral.

But let’s face it…this is a tough call right now. It is a lot easier to predict an up market if the markets are shaking off really bad news and not going anywhere. It is easy to predict a down market is the markets are stagnant against great news. No news and no movement….that is tougher.

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Option Trading Newsletter: November 18, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

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Great Morning !

Be careful of Ferguson grand jury out anytime. Doubt it will affect the stock market much other than one quick initial reaction.

Closing Prices From Yesterday

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Today’s Number(s)

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Yesterday and Today

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Yesterday

The markets opened on their lows, and they were not even that low. After that we had a slight bounce to unchanged where we remained all day. This has been a fortngiht and 1 week of boredom, ignoring bad news, etc.

TODAY

More of the same – most likely. I have always stated (right or wrong) that markets obey Newtonian laws of physics. They remain constant (bull, bear, neutral) unless acted on by an outside force.

Things that can chance this?

  • Probably not Ebola. We just had someone die from it in the States yesterday and the media didn’t even care anymore.

  • Perhaps Russia in the Ukraine.

  • Perhaps more European and Asian weakness.

  • Holiday sales starting off early and very strong.

Whatever it is, it is probably going to be a surprise – that is just how these things work.

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Option Trading Newsletter: November 17, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

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Some VERY cool surprises coming in a couple of weeks.

Great Morning !

Closing Prices From Yesterday

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Today’s Number(s)

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Yesterday and Today

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Yesterday

The second full week of boredom for the overall markets despite some more favorable and popular stocks doing some crazy wild moves. AMZN was up 3 ½% on Friday. TSLA was up almost 3%. NFLX was up almost 2%. Yet the Dow was down 18 points and the SPX was up 0.02% (or up 0.49).

People in POT are certainly aware of the individual stock’s we are mentioning as they are in the via CIS with Platinum hedges. See you update below and separately.

TODAY

We are going to likely see about 100 point drop on the open. Russia appears to be doing more mobilization into the Ukraine while Obama and Putin where at the Asian summit. He is a sneaky little one, that Putin.

Also keep an eye on crude. So far the fall from $80 to $76 has not affected the markets much, it could spark some concern WHEN the media mentions how the fall in crude may be the US pushing Russia into the corner economically. We have sanctions against Russia, froze some assets of Putin (his friends assets being held for Putin), and their largest source of income (oil and natural gas) is dwindling in price,

BIGGEST WATCH WORD

We are now in fear of that big “N” word again – nuclear. There is going to be a big sensationalism by the media to overdo Russia’s move. The media is going to start focusing on Russia moving in “nuclear ready forces” whatever that is. If you thought Ebola could shakes markets up, try nuclear fears.

TODAY

We are going to open down – period. Anyone who watched the bounce higher from SPX 1820 to 2030 in a month occur, and was then lulled into a coma by stabilization for two weeks, my come out of their hole today and see their shadow.

I suspect some profit taking right on the open. People will be getting out to be cautious. Depending on how bad the selling is on the open it might be a great buying or selling opportunity. The further we fall, the better the buying. Not enough selling and we could have a lot of people on a with itchy trigger fingers ready to sell later.

ALSO…

Keep in the back of your mind that the Ferguson police officer who shot the unarmed thug has a grand jury that is going to convene any day now. If it is decided that the officer is not going to face criminal charges the town could go nuts like the LA riots with Rodney King. That could cause a downturn in the markets for a bit.

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Option Trading Newsletter: November 14, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

Some VERY cool surprises coming in a couple of weeks.

Great Morning !

Closing Prices From Yesterday

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Today’s Number(s)

Yesterday and Today

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Yesterday

A new high in the markets today is all the media is reporting. Yet the new highs were marginal. The S&P was only up $1. The Dow did get above 17,700, but then was snuffed out by a decline in oil. Crude fell over $2 to close below $75. If this happened last month it would have dragged the Dow down 300 points (just a guesstimate). The Yen is still getting pounded down after announcing their QE. And the US dollar was lower but rebounded and is at 1.24 to the Euro.

The strong US dollar was being blamed (as well as Ebola, ISIS, and weak crude) for the October selling. Yet ISIS is still around. Crude is $5 lower than in October. The only thing gone is Ebola. So was it all Ebola causing the 10% drop?

OF COURSE NOT. As I have been saying for years, the market does what it is going to do. The media then takes whatever is going on in the world and blames/credits the market’s performance on that.

TODAY

We are 350 points away from 18,000. I find it hard to fathom that we will not test that area by the end of the year. KEEP IN MIND though that many late November-Early December markets are choppy.

There is a balance I mentioned yesterday. For many US companies most of their sales and profits come in the last month because of holiday spending. Remember that about 25% of people’s annual discretionary spending occurs in this month.

We will get the doomsayers predicting a lower spending season because jobs (though plentiful) are inadequate in pay. They will also cite the recent survey showing that person borrowing is at an all time high, so they will say the consumer is “tapped out”.

Others will say that personal spending should increase 6% because of the savings from cheap gas. I was at the mall tonight from 5:00pm to 8:00pm and it was a ghost town. Are they all waiting for post Thanksgiving?

Anyhow…I am a still bullish. Yet I am starting to feel that these bull moves higher are running out of steam. It almost feels as if the bounce off of October’s lows was a race to buy. The chart certainly shows that the rapid rise from under 16,000 to 17,700 was crazy fast. It has the smell of an emotional stampede rather than value investing. I am starting to get a little concerned that this thing is running out of kinetic energy and could fall. I don’t expect any great fall until after the Holiday season as that would be unprecedented. January 2 of the new year will see me overly hedged in POT.

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Option Trading Newsletter: November 13, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

Some VERY cool surprises coming in a couple of weeks.

Great Morning !

Closing Prices From Yesterday

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Today’s Number(s)

Yesterday and Today

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Yesterday

ZZZZZZzzzzzzzzzzzzzzzzzzzzzzzzzz

Yet another day of nothing for the indexes, but a decent day for a few stocks we play.

A few months ago I was keeping track of the number days in a row where the Dow didn’t move 100 points in a day. Over the last two weeks we have not moved 100 points (from top to bottom) in the Dow.

TODAY

Two points of concern. The first is initial claims which are rigged. The second is crude inventories. Crude was down again yesterday. If crude has a lot more inventory than expected prices of West Texas could fall hard. Remember that it was partially oil’s fall that contributed to the selling last month, and with oil so close to to 75 we have to keep an eye on it.

Other than that, though, I suspect the market climbs.

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Option Trading Newsletter: November 12, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

Some VERY cool surprises coming in a couple of weeks.

Great Morning !

Closing Prices From Yesterday

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Today’s Number(s)

Yesterday and Today

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Yesterday

Yet another day of BOREDOM for the overall market, but some large movement in individual names. BABA did over $9 billion in sales in a 24 hour period yesterday, but the stock was down 4.61 nonetheless. I guess the market was expecting the stock to do more yesterday than all of AAPL’s sales in a year. TSLA was up 9.15. AMZN was up 6.90. And crude was down again with the dollar up big – AGAIN.

TODAY

We have the first economic numbers of the week, though they are weak ones. Yet any numbers may be enough to get this market moving a little. Keep in mind that this dull market at all time highs is not new. The chart below shows a recent history of times when the markets would run to new highs and sit for an extended period of time – then fall. Yet most of the run up over the last couple years we would run up and sit, only to run higher again a few months later.

Today?

Going off the recent graphs and what has been happening a sane person would say we are bouncing off a ceiling and can’t go higher, thus we are going to have to fall – just like at the end of July and September. I actually look at things a little different.

I look at money as competitive and it has to go somewhere. This is not 1930 where people use mattress to save money. Taking money out of the bank in cash is a nightmare and makes you a quasi-crook suspect of drug sales or other illegal activity. You certainly open yourself up to IRS scrutiny. And beyond that people want some kind of return. We are a greedy people. So where are you going to put it?

Foreign Currency?

The US dollar is on fire, and this would be a loss.

Commodities?

Oil, Gold, Silver, etc. are all falling and scaring people from wanting to catch a falling knife.

Bonds?
With rates at 2.36% for a 10 year bond, and having been below 2% not more than a month ago, putting money into fixed income assets is a recipe for small loss.

Overseas markets

There may be opportunity here. European markets have not done as well as the US. Their currency is down considerably over the last couple of months, which means an investor can get a double profit if currencies bounce (against the US dollar). BUT people are not going to be ballsy (though I might do one in POT). Most investors don’t come up with a new idea until the media gives it to them.

So I am going to break from the obvious trend and say the next move will be up.

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Option Trading Newsletter: November 11, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

CYBER MONDAY COUNTDOWN CLOCK

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Some VERY cool surprises coming in a couple of weeks.

Great Morning !

Closing Prices From Yesterday

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Today’s Number(s)

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Yesterday and Today

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 Yesterday

Tortured day for index traders, but a few equities did some serious moving. The Dow did make a new 52 week high, again, and so did the SPX. BABA was up 4%.

Bonds

Most interesting to me was that in the absence of news the TLT was down about 1%. The ETF is below 119 after spiking up to 127.68 on what I believe was mass/forced liquidation of shorts. We are below the major moving averages, and if we fall below 188.30 I would not be surprised if a big crack forms.

POT people…
We have been short this instrument for a long time. We are short call spreads and long put spreads, put condors, etc. in many different expiration. If we look like we are going below 18.30 I am getting even shorter. This will be used as an example on getting shorter and shorter all the day down (or longer and longer all the way up).

TODAY

There are not any economic numbers out to propel this market higher, and this bull is needing information at this stage of the game. I suspect things will be quiet until Wed when we get the first round of economic numbers.

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Option Trading Newsletter: November 7, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

Great Morning !

Closing Prices From Yesterday

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Earnings Today

75% of all stocks have reported

RW TodayToday’s Number(s)

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 Yesterday

Another boring day for the overall market, but there was a good deal of drama in individual equities. Oil resumed its fall, and now analysts are predicting it to fall into the 50’s. Bonds are falling (rates going higher) as well, and the US dollar is strong.

Three weeks ago these awesome declines in commodity and bond prices would have shaken the markets lower, but apparently (a bit if cynicism in here) they are now good for the markets.

NEW all-time highs in the S&P and Dow.

TODAY

More of the same is my best guess. For the longest time I have been saying we are going higher. During government shutdowns, Russia v. Ukraine, Russia shooting down Malaysian planes, Cyprus banks closing, Europe in recension, Ebola, ISIS, Japan now going into the toilet, etc. I have been saying that this market can NOT go down unless the economy sinks or interest rates increase. Now the economy is sinking, or at least not getting better. But that doesn’t matter if no one thinks it stinks. As long as the government churns out bogus and manipulated numbers, and as long as people believe what they want, this thing is going to keep going higher.

So we are going higher for a little longer before the sky falls hard, big, deep, fast and for a prolonged period of time.

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Option Trading Newsletter: November 6, 2014

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Prepared by the good people at Random Walk, LLC. (and Scott)

Election Euphoria

Great Morning !

Closing Prices From Yesterday

Earnings Today

75% of all stocks have reported

TSLA Reported and it is up $16 in after hours. That is +7%.

WFM Reported and it is up $3 in after hours. That is up 7.5%

RW TodayToday’s Number(s)

 

Yesterday

It was another boring day – the third in a row – but we did manage to set NEW highs with the Dow closing close to 17,500. President Obama found it necessary to get on TV and explain away how a shellacking is a good thing.

The real action started (at least for POT people) after hours with TSLA and WFM both being a home-run example.

TODAY

Where are you going to put your money?

Bonds?

Not at these rates

Commodities

Not with oil, gold, silver, etc. falling like rocks.

Currencies?

Not with every economy in the toilet.

What does that leave? US equities and indexes. For now at least. Yes the runs up are getting a little weaker this week (and a small pullback may be due [ say 1-2%], but we have holidays starting, elections over, Ebola forgotten, ISIS off the media grid, Russia quiet.

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