Technical Tuesday – Rejected, Rejected, Rejected!
by phil - September 23rd, 2014 8:07 am
So much for 2,000 holding.
Fortunately, our Big Chart kept us cautiously bearish into the weekend and the hedges in our Short-Term Portfolio functioned perfectly, gaining $13,000 on the day and completely offsetting the drop of $8,000 in our Long-Term Portfolio.
That's without our big hedge, DXD, kicking in yet, as the Dow is still over 17,000 but, should it fail, we'll see those STP gains multiply quickly.
For those of you who are not Members, and don't have access to our various Member Portfolios (and you can by subscribing here), we have done our best to prepare you for this drop as well. Last Thursday, right in the morning post, I shared our short stance with the general public, saying
It's going to be crazy into the weekend but, in our Live Chat Room this morning, I said to our Members:
Futures pumped back up to yesterday's highs at 17,125, 2,001.50, 4,080 and 1,156.5 so I like shorting below 17,100, 2,000, 4,075 and 1,155 – short the laggard, out of any of them cross back over – very simple!
That's our plan into the weekend. As I've mentioned before, we're also using DXD ($24 at the time), TZA ($14.68) and SQQQ ($35.26) to hedge our long portfolios – just in case things unravel over the weekend. We also discussed FXI ($40.30) puts earlier in the week as a play on China melting down so PLENTY of ways to profit from the downside.
This morning, the Futures are 17,050 on /YM (up $375 per contract), 1,979 on /ES (up $1,125 per contract), 4,035 on /NQ (up $900 per contract) and 1,116.50 on /TF (up $4,000 per contract) – so that strategy went pretty well.
In last Wednesday's post, we also shorted Oil Futures at $95 and oil fell to…
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Which Way Wednesday – How Low Can We Go?
by phil - September 10th, 2014 8:32 am
What a fun market to play!
Yesterday, in our Live Member Chat Room (you can subscribe here), at 11:13, in anticipation of a wierd day, I put up a bullish and a bearish trade idea for our Members. The cool thing is, both sides won! Our two trade ideas (which we went over in our Live Webcast at 1pm) were:
If you want to play for an AAPL pop this afternoon, the QQQ weekly $100 calls are just .40 and QQQ topped out at $100.33 yesterday. Figure AAPL pops 2.5% and that pops the Nas and QQQ 0.5% so $100.50 + premium could be good for 50% if AAPL gets a good reaction – if not, it's probably going to lose less than a direct play on AAPL would.
TZA/Sn0 – Well TZA is only at $14.50 so the spread is half in the money at net $1.25 so it still has good upside if you add to it but I'd rather get the Jan $15/20 bull call spread at $1 as that gives you more time and more upside – if your TZA hedge goes in the money. That way, you can take $2 off the table on the Oct spread and know you still have plenty of upside if TZA keeps going up on you and also less downside exposure if it flips the other way.
When our 1pm Webinar started (at the same time Apple's conference started), the QQQ calls were just 0.42 and still playable and, as you can see on the chart, we even had a dip down to 0.30 briefly but that line held and we then jumped 100% back to 0.60 and then on to 0.72 before dropping back to 0.60, where we took our expected 50% gains and ran.
If you missed our Webcast yesterday, you should check out the replay because we discussed WHY we made that particular pick and HOW we selected it – very educational! That's because, at Philstockworld, our goal is to TEACH you to be a great trader – not just give you great trades.
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Testy Tuesday – Apple Will Give the S&P a Pass or Fail
by phil - September 9th, 2014 7:46 am
Today is the day.
There’s a lot riding on Apple’s massive iPhone 6 and iWatch event. Since the first iPad in 2010, the big question on everyone’s mind has been “what comes next?” Apple updates its lineup on a fairly predictable schedule, but products that push the company into entirely new categories have been few and far between.
That hasn’t hurt Apple financially by any stretch; in fact, it continues to make more on each device it sells than just about anyone. Still, a constant stream of promises from Apple’s top execs have drawn out the idea that something big is just around the corner. That something big is very likely making its debut at Apple’s event next Tuesday, which kicks off at 1pm EST / 10am PST and we'll be covering it live today during our Live Trading Webinar (1pm EST).
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On top of the rumor pile are expectations for:
- Bigger IPhones (to go after Samsung market share) + 10%
- NFC and Mobile Payments (transaction revenues) + 20%
- iOS8 (pushing iCloud) + 5%
- iWatch (new product) + 20%
- Apple TV (home integration) + 10%
So those are the most likely announcements and they have the POTENTIAL (if all goes well) to add 65% to AAPL's already massive market cap. Just enough, in fact, to make AAPL the world's first $1Tn company in 2016. We're already playing AAPL bullish in two of our PSW Portfolios but we have been since they were $450 ($64 post-split) and we're already up 50% (AAPL was our Stock of the Year selection), so we hedged a bit at $105.
The question for us is – do we remove those hedges in anticipation of AAPL's 2 consecutive 30% annual runs that we are predicting but, with AAPL already up 25% this year at $100 and having already been rejected at 30% ($105), we're keeping our partial cover – at least until we see the public's reaction to the new product line.
While it could be argued that a lot of good news is priced in, I think NFC/Mobile Payments is being completely missed along…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site