I know what the experts say, but with these valuations and the fact that both MSFT and AAPL are at all time highs, how dumb is it to take my 50% profit and go to the sidelines until this run up settles down? I mean, this has to end eventually, right?
If you plan to still be holding them 10 years from now, just let it ride. You don’t want to miss a 20% jump waiting on a dip. The way these tech stocks have been running, they could see 20% in a few days
I don’t have enough free $$ to actually make all these bets, but if I did, here are my guesses. - TSLA puts - SNAP calls - LVS puts - TWTR calls - MAT calls - HAS calls if 2 of those are correct I’ll be surprised. No questions please
Hanks 7/21 post Spoiler The markets were mostly higher yesterday with large cap tech stocks having the better day. The Dow finished up 9 points closing at 26,672 while the tech heavy NASDAQ rose a whopping 264 points. The rally was interesting in that the 2.5 percent rise was accomplished with only 48.5 percent of the shares participating. Think about that for a minute. It's pretty amazing. The same thing happened on the S&P where the index finished 27 points higher with only 35 percent of its stocks rising. Same thing happened with the breadth and volume on the NYSE. The Dow rose, but 55 percent of its stocks declined. Volume was only 90 percent of its 10-day average. There were 113 new highs and 10 new lows. It was a very strange day! This morning I want to talk about what’s happening with this large cap tech stock rally on the NASDAQ. In my WSR. I talked about the different patterns between the NASDAQ and the other indexes. The DOW, SPX, and Russell 2K appear to be in the final stages of completing a Wave 2 while the NASDAQ appears to be in a rising channel for a Wave 5. After seeing Netflix get clobbered last week, I thought the NASDAQ was on the cusp of a major decline. But I said IF the index didn’t fall immediately, it would likely make one more pop above the15 July high of 10,604 before falling. So yesterday, the NASDAQ did pop, but the 264 points was a lot higher than I expected (I used 10,610 as my target). The bottom line is that by closing at 10,767 which exceeded the 15 July high, it’s now likely the NASDAQ will re-test the 13 July high of 11,069 with 11,250+ possible. On the other hand, because of the significant divergences I’m seeing in both breadth and volume, these new targets DO NOT have to be reached. The overall patterns, except for the NASDAQ appear to have 5 complete waves and could start down at any time now. And if this happens, the other indexes will put pressure on the NASDAQ. As I’ve said many times on these pages, when the troops stop following the generals, it’s usually only a matter of time before the generals turn around and lead the retreat. But until this happens, the NASDAQ is likely going to push a bit higher. I’m still seeing major divergences between breadth, volume, and price at the same time I’m seeing EXTREME readings in sentiment. As I mentioned this weekend, the P/C ratio is now at its lowest level in 20 years! The Investors Intelligence Advisors' Survey is at 58.1 percent, the highest level since the January extreme reading of 59.4. There sentiment readings reflect EXTREME levels of investor optimism. I do not believe this EXTREME optimism is justified, not now or ever! BTW, this rally is happening at a time when the U.S. Growth rate contacted by 5 percent in the first quarter 2020 with unemployment hovering near 18 percent, the highest level since the Great Depression where it reached a peak of 24.9 percent. In 2008, the unemployment rate was 10.8 percent, so we're currently about 7 percentage points ...if you believe the government's numbers. In the current market, GDP growth, company earnings, and unemployment don't seem to matter. I find this amazing! The Market Timing Indicators for the Major Indexes remain Positive. The Dean’s List and Tide are Positive. The Sector Ratio rose to 23-1 Positive after yesterday’s session. Continue to watch this indicator closely in the days ahead. If it starts to weaken, pay attention. My 14-period Velocity indicator for the Composite Sectors rose yesterday, but it’s still close to the zero line. When it begins to fall below zero, it usually identifies an important market turn. But meanwhile, it’s still above zero, so with a positive Sector Ratio AND a positive Velocity indicator the rally in the sectors should continue. The top five strong sectors were Autos, Material, Cap Goods, Semiconductors, and Consumer Products. The weak sector was the Banks. There were NO CHANGES to the Model on Monday. The Model continues to hold 1,200 shares of TWM, 1,600 shares of DXD, 400 shares of DUST, and a lot of cash. It continues to look for opportunities to buy shares of inverse index ETFs. Gold and the miners rose yesterday. GLD rose 0.82 cents to 170.94. After finishing its small wave 4 triangle, the metal appears to be in a wave 5 rally that could see slightly higher prices. Once this rally completes, the next wave down should take prices significantly lower. That’s what I’m doing, h [\spoiler]
Honestly I think I’m going to pick one of the cheaper ones like Snap and do just that as a learning experience. I’ve been reading, researching and practicing with fake money on straddles, strangles, bull call spreads, condors and butterflies. I’d like to pick a cheapie to do that on to make sure my assumptions are correct and calculations are understood. My KR options spiked big this morning so I’ve got a little extra to test with
What do you use to practice these with fake money? Excel or is there a website that allows you to do this?
Mostly just options calculators, but occasionally Excel and I’ve had an investopedia stock simulator account for years and I’ll do stuff there as well even though it’s a horrible setup.
It really is. Any decent platform will let you do all the options at once Stuff like the Condor is why I love Tastyworks so much. It's designed for people who want to do options Only problem is commissions (a Condor is 4 trades so $4 per Condor)
It's very good (even "great") if you want to primarily trade options. There are definitely better platforms for stock buying, including ones with smaller commissions
SNAP play idea: 8/7 Jade Lizard: Sell 22 put Sell 25.5 call Buy 26 call Above 26: Make $50 Between 22-25.50: Make $100 21: Break Even Below 21: Naked put
Every time I think I’m getting a handle on options... somebody bust out terms I’ve never even heard of. Jade Lizard is a new one for me. If I’m following correctly, the only thing I don’t like is this seems suited for when you are not anticipating big movement. It feels like a scary time to make that bet?
So Jade Lizard is just an Iron Condor without buying the protected put. So we're hoping the stock stays the same or go up. In the one I posted we're profiting if the stock goes up, stays the same, or drops by less than 18%. So it's not as scary as you think
I’ve been looking at boats recently and on a bit of a whim bought MCFT Friday. Up 13% since. That was a nice little discovery.
I too have been looking at boats. Apparently it is a sellers market right now. I know some folks trying to buy boats and they put offers on boats but the boat sells before they can get an acceptance. The theory is that people can't go on vacation and they have some stimulus money or PPP money or whatever and so they're trying to find an outlet.
Yep, sales have been going through the roof apparently. I’ve definitely noticed lower inventory of ski/wake boats on the sales sites. We’ve got baby #2 due in 3 months so I probably won’t buy until at least next summer anyways, maybe things will have calmed down by then?
There will be a nice used market come next year so you can look forward to then to put your money in the that pit.
Pretty nice cheat sheet for those interested in using Elliot Wave Theory for technical analysis. (Hank and most other current bears rely heavily on this). https://www.tradingkingdom.net/2020/06/20/ultimate-elliott-wave-cheat-sheet/
Went with this baby Jade Lizard for $SNAP, expiring this Friday just to test it out Above $27.50: break even after commission $21.50-27.00: $50 profit Under $21.00: I take on some cheap $SNAP shares and will sell calls on it next week
With the increasing pressure against Tik Tok, you would think SNAP could stand to benefit, but who knows what the kids will move to.
Anyone doing anything with the airlines? I am going to be watching United's earnings tonight, see how bad the loses are and how the market reacts. AAL and Save report Thursday.
I was going to bet against it, but worried it will be one of those where they miss horribly, yet some comments about future guidance send the stock up anyway.
$SNAP with a not-amazing report and it looks like I'll get my middle #blessed (wish I did it 10x) but I wasn't THAT confident
I like your chances of ending positive. I went super basic and just did a straddle at $25. I need it to be below $21.50 or above $28.50 to profit (I think)
Still in SPY puts. Losing money by the day, but today was at least a glimmer of hope after the fuckery that was yesterday. Biggest red flag for me is the FED balance sheet. After dropping for many weeks, it went up again last week after the market started to groan. Tells me they do not like what they are seeing. It's strange because there are bullish charts all over the place. Holding puts because I expect an extended pullback through all the horrible earnings reports that are about to drop.
I always sell options the day before earnings. No use getting fucked over by the big boys, and the premium is usually ratcheted up on the day before if it's a big stock.
Yep, I guess I’ve learned that lesson here yet again. Same thing happened to me with KR, I just held for a while and eventually, slowly, got the result I wanted. Gonna try the same here I guess since I have the shares
UAL with an 87% drop in rev and with 6,000 employees “voluntarily” leaving, and the stock is basically flat to slightly up AH. We’re in bizarroworld