SO-CAL OPTIONS TRADER

New Site Is Up!

2008-07-06T18:16:00.001-05:00

http://chaudhryandcole.com/

Check it out and let me know what you think.

Andy

Important Update

2008-04-04T16:52:00.002-05:00

It's been awhile since my last post, but things have been unbelievably hectic around here as of late. That being said, however, I am in the process of putting up an entirely new website devoted to the analysis of anything and everything related to the markets. Blogger has been excellent for what I have been using it for this past year, but its features are a bit too limited for I want to be doing in the future. Also, I have been in touch with a couple close friends of mine who would also be interested in contributing to the site. I am hoping to get this new website up as quickly as possible so keep checking for updates. I will post the URL to the new site as soon as I get it up and running. Once again, sorry for the lack of updates, but hopefully this new site will allow for for expansion into new frontiers with the intention of better educating individual investors such as yourself.

Andy

Officially A Seeking Alpha Contributor

2008-03-14T03:31:00.006-05:00

http://seekingalpha.com/author/andy-cole

Well what can I say? I guess I am now a regular contributor to the financial website, Seeking Alpha. Check it out the articles if you get a chance and as always, comments, criticisms, and other opinions are welcome.

Market Analysis

2008-03-02T22:43:00.011-06:00

After two weeks of choppy, low-volume trading, this market looks to have picked its course to the downside. Friday's poor economic data (no growth in consumer spending) lead the market down over 300 points on very strong volume. All of a sudden, we are now beginning to see the reasoning behind the Fed's frantic interest rate cuts. Bernanke & Co. know that this economy is in trouble and I think the markets are slowly starting to accept these facts. From a technical standpoint, the picture is about as clear as clear can be. Let's take a look at the charts:

Three Month DJIA Chart

Two Year DJIA Chart

The DJIA has been trading within the 12750 (resistance as said in previous posts) and 12200 range for the the past few weeks. The volume has always been languishing thus giving us credible evidence to doubt this recent rally from the 11,650 area. However, last Friday, market volume increased around 20% to lead us to our current level at 12,250. Take note of that 50-day moving average (resistance) as well as that short-term double top formation at the 12,750 area. We really needed to break above both of those resistance levels to have any shot of calling a long term bottom. Also of note, the stochastics is showing that the market is overbought. This, coupled with the fact that the MACD and RSI are both rolling over to the downside, only make the picture more bearish. And finally, the 200-day moving average is now firmly in a downtrend, giving the bears a very worthwhile case.

So where do we go from here? Look for the DJIA to retest the lows set in January around the 11,650 area. I wouldn't bet against the other indexes (NASDAQ and S&P500) doing the same. I realize that I am beating a dead horse when I am saying this, but at this point, cash is king. If you are more of a trader and are experienced with getting short stocks, trading puts, etc., then I would say go for it. If you have been reading this blog for the past month and did sell into this short-term rally, I think you've done yourself a great favor because personally, after analyzing the charts/circumstances of past bear markets, I believe these markets will see much more downside throughout the course of the year. Once again, I like the SDS, DOG, QID, and the DXD as ways to get short the indexes. If you do plan on getting long anything right now, look at companies that have not violated their 200 or 50-day moving averages. I'd also look at companies dealing with commodities and precious metals (i.e. FCX, NEM, BHP etc.) The agriculture stocks are also en fuego right now (POT, MOS, MON).

And that does it from here. As a sort of parting piece, I leave you all with a somewhat simple, yet very appropriate Wall Street adage: "The trend is your friend," and in this case, the trend is down. I have a feeling that may be a good thought to keep in mind for these next few months.

Updates to follow soon.

Why Not?

2008-02-08T15:55:00.000-06:00

Market Analysis

2008-02-04T15:48:00.000-06:00

Well after that +1000 point rally bottom to top, I think we may be seeing more long-term downside within the next few weeks. I stated in my last post that resistance on the DJIA would be at around 12790 and we ended up coming closest to that level last Friday at 12760. I hope you all used this rally to close out long positions and cut any losses. Also of note last Friday, we saw intraday double tops form across all three major indexes at the following levels:

DJIA: 12750

NASDAQ: 2400

S&P500: 1394

It looks as though we have hit a short-term top across the board. Look for more immediate downside in the coming weeks. If you are looking to get short any of the indexes, take a look at SDS, DOG, QID, or the DXD. All four are great ways to trade around them. Look again for support on the DJIA again at 11650, on the NASDAQ at 2200, and the S&P500 at 1275 and should those levels fail, watch out below, because any longs will be punished. And I've stated it before and I'll state it again: we are in a recession/period of slower economic growth/slowdown/whatever you want to call it and the market will always tend to reflect that.

Also, I have had many emails asking me why I have not been trading recently. This is due purely to the fact that school has started up again and I have been unbelievably busy as of late. I hope to resume trading sooner rather than later. That being said, however, the market analysis updates will continue to be posted on a regular basis and I hope that will help guide you all through these choppy markets.

Updates to come.

The Short Term Bottom Is In

2008-01-23T14:39:00.000-06:00

Well, the short-term bottom is in, thanks to a panic 75 point basis cut by the Fed. We saw an double bottom form at 11650 level during the past two days of trading and continued to move 600 points higher from there. The long term trend, however, is still down and this economy is still headed towards a recession. Use this rally to close any current long positions and cut any serious losses. For all you traders out there, look for resistance at the following levels:

DJIA: 12790
Nasdaq: 2460
S&P500: 1410

This is that dead cat bounce I talked about in my previous post. What we saw today was a combination of short-covering and some buying of financials and retailers. I wouldn't be surprised to see continued strength in the market to close out the week because this market is extremely oversold. Once we hit those index resistance levels, though, be prepared to take your short positions for the ride down.

Updates to come.

(Bear) Market Analysis

2008-01-21T15:38:00.000-06:00

It's official: we are now in a bear market after last weeks poor performance and with the way things are going currently, I think we all need to get used to it. So let's take a look at the charts. In order to get a better sense of the big picture here, we will be using three year timeframes.

The DJIA has managed to hold onto the lows set in March of 2007. However, there has been absolutely NO evidence nor ANY positive economic news to suggest that the selling will stop anytime soon. Look for short-term support at 11650, the highs set in May of 2006. Should that support level fail, look for longer-term support around the 10650 area.

The Nasdaq had an unbelievably woeful session last week and is currently sitting at a short-term support level of 2350. Without any immediate upside, however, we are headed towards the 2020 area. Keep in mind that there are some big name tech companies reporting this week, including Apple and Microsoft, and I think both of them will report decent numbers.

The S&P 500 is in no better shape than the rest and looks to be headed towards the 1220 area.

Simply put, there is no easier way to say it: we are in a bear market. And as I previously said last week, there is NO bottom in place and trying to catch that falling knife will only end in tears. Don't be fooled by any +200 or +300 point up days as they will be purely a result of short covering and dumb money buying. Be patient! We already saw what the market thought of President Bush's so-called "instant relief" plan and it was plainly a case of too little, too late. The Federal Reserve, however, is set to meet later this month where they will determine how much they will cut interest rates by. To be honest, we really need to see a 75 basis-point cut to see any short-term relief. I think anything less will generate a market sell-off. And that's about it from here. I'll leave you all with what I think is a very appropriate quote for the times:

"They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side" (Reminiscences of a Stock Operator).

Market Analysis / Position Closed in GRMN

2008-01-09T08:17:00.000-06:00

Well, after yesterdays late selloff, this market may have finally reached the tipping point. Lots of crucial support areas were broken yesterday, so let's take a look at where we stand:

The DJIA managed to take out the lows of November and closed around the intraday lows set in August. The 50 and 100 day moving averages are beginning to roll over and all the other indicators are pointing the DJIA into the ground. Unless we see some immediate upside, look for the DJIA to continue trending downwards towards the 12,100 area.

The Nasdaq once again is the best looking chart of the three as it has held onto the lows set in August. Given the recent awful performance of the Nasdaq, this is a bit surprising to say the least. However, without any immediate upside, the Nasdaq is heading towards the 2350 area.

The S&P 500 is in a slightly similar situation as the Nasdaq as it has held onto the intraday low trading levels set in August. Again, though, all the indicators are pointing due South and without any big money buying, look for the S&P to hit the 1370 area.

Simply put, for all you retail investors/traders out there, it may be best to sit on the sidelines for the next week or so until the big money decides whether or not this market still has upside potential. The bottom is not in place at the moment and should the floodgates actually be opened, I would hate to see anyone be caught in a wave of big money selling.

Sold 7 April $100 call options at $330/contract. This represents a 52% loss.

Updates to come.

This Market Is In Trouble

2008-01-08T15:14:00.000-06:00

Market analysis and further updates to follow later tonight.

Stocks To Keep On The Radar

2008-01-04T12:15:00.000-06:00

INTC / MA / LVS / NYX

Position Built In GRMN

2008-01-04T10:14:00.000-06:00

Take a look at GRMN. This stock is off almost 30% from its highs set a few months ago. With a P/E of 25, I think this high growth stock has some serious room to move, especially with the Consumer Electronic Show just around the corner. Also, last week the stock managed to hold onto support at its 200-day moving average and put in what I believe is a short term bottom.

Bought 7 April $100 call options at $700/contract.

Position Closed In DRYS

2007-12-28T09:16:00.000-06:00

Sold 5 March $100 call options at $650/contract. This represents a 38% profit.

Position Built In DRYS

2007-12-24T08:44:00.000-06:00

Take a look at DryShips. This stock is down over 45% from its highs set about a few months ago. With a P/E of only 8 (yes 8), this thing has room to move in a hurry. From a technical standpoint, this stock looks to have set a triple bottom with the lows of September and November. The continued strength in dry bulk shipping industry leads me to believe that this stock is heavily oversold and should reverse sometime soon.

Bought 5 March $100 call options at $470/contract.

Position Closed In RIMM

2007-12-21T08:38:00.000-06:00

Sold 3 March $115 call options at $1650/contract. This represents a 72% profit.

Position Built In RIMM

2007-12-12T08:47:00.000-06:00

Dips in companies such as RIMM don't happen too often, so it's good to take advantage of them while you can. This recent sell-off can be attributed to a downgrade that occurred a few weeks ago. With seven days to go until earnings, I think we may see a run here.

Bought 3 March $115 call options at $960/contract.

Position Closed In CSCO

2007-12-11T13:27:00.000-06:00

Sold 16 April $30 call options at $183/contract. This represents a 27% profit.

Position Built In CSCO

2007-12-07T10:59:00.000-06:00

Take a look at CSCO. Fundamentally, a great company: 15-16% growth, 20% average profit margins, and the networking backbone of the United States. Recently the stock has sold off almost 15% due to a solid quarter "not up to analyst expectations." I think this one's headed higher.

Bought 16 April $30 call options at $143/contract.

Position Closed In T

2007-12-07T10:54:00.000-06:00

Sold 22 April $42.5 call options at $128/contract. This represents a 12% profit.

Is The Bottom In? Position Built In T

2007-11-29T10:34:00.000-06:00

Yes. For the short-term anyways. Take a look at the DJIA chart:

More specifically, the MACD has made that crossover to the upside as a result of those back to back 200+ and 300+ days. I mentioned last Sunday that we needed to hold those important price ranges in order to see any upside for the coming months. Well, we've done that and then some. The NASDAQ and S&P 500 look good as well. Myself? I'm a buyer. Take a look at T.

Huge cash flows being generated out of this company. Profit up 41% last quarter. Also a great value play. U-Verse will be an outstanding product, but one more for long term growth. And can you say iPhone?

Bought 22 April $42.5 call options at $114/contract.

Market Analysis and Happy-Late Thanksgiving

2007-11-25T17:35:00.000-06:00

I hope you all had an excellent Thanksgiving. Just a quick weekend update on the markets for this Sunday.

The DJIA managed a solid 180 ticks up on the half-day session of trading last Friday. Again, it is absolutely critical times for the DJIA. Here's what we need to be looking for: The DJIA must hold support at the 12850 area, the lows of last August. Any serious move to the downside below that price area could signal the beginning of a long-term bear market. That being said, however, any serious bounce above that price area could signal the infant stages of a rally.

The NASDAQ, again, is the best looking chart of the thee, as it has still managed to hold onto its 200-day moving average. Tech, in my opinion, is still the best sector to be long in given the current market. Look for support on the NASDAQ chart at 2590.

The S&P 500 has also managed to hold the lows set last August at the 1410 area. Any serious movement below this price range could also signal the start of a long-term bear market.

And that about wraps it up for now. Keep an eye on the economic data this week. The DJIA and the S&P 500 really need to hold the support levels that I mentioned for this week, otherwise this market could turn very ugly. Could we see another rally like we did last August? Possibly, but, the next few weeks will be very telling. There is absolutely no bottom in place right now and it might be wise for individual investors to remain on the sidelines until some big money comes into play.

Quick Update

2007-11-13T18:17:00.000-06:00

The DJIA, the Nasdaq, and the S&P 500 all rallied signifigantly today to close near or above their 200-day moving averages. We'll wait and see what happens tomorrow, but from a technical standpoint, today was a hugely bullish step in the right direction.

Market Analysis

2007-11-11T15:45:00.000-06:00

Just a brief analysis of the markets this Sunday afternoon. I feel as though we may have reached a critical point after the extremely weak close last Friday. Here's how things look currently:

The DJIA finished Friday's session at 13,042, down 223 points from the open. It almost looked as though the market could have finished even for the day, but big volume selling sent the DJIA plumeting through its 200-day moving average later in the day. Unless the market manages to close above its 200-day moving average (around 13200) on Monday, the DJIA may be testing support around the 12800 area. Should that support fail, we could see some really serious downside. Currently, the MACD, Stochastics, and RSI are headed straight downward.

The Nasdaq closed out at 2626 last Friday, down over 68 points. The Nasdaq chart is the best looking of the three charts here as it has actually managed to hold onto its 200-day moving average. However, the technicals are all pointing straight down. Look for near term support at the 2575 area.

The S&P 500 closed down 21 points Friday to finish at 1453. The technicals are all headed south and again, the 200-day moving average has been broken. Should we see a weak session of trading on Monday, the S&P 500 may well be on its way to retest the lows set a few months ago. Look for support around 1375.

Simply put, this market has reached a pivotal point. It seems as though there is more bad news about sub-prime mortgages, billion dollar writedowns, a weakening dollar, and $100/ barrel oil every day. Technically, this market is in bad shape. Fundamentally, there are still some decent sectors out there (tech, agriculture, etc.), but overall this market looks to be heading lower.

This next week will be crucial in determining where the market will be in the next month. Should we manage to see some upside this week, there may be a bit of near term relief if the support levels are kept. I have a feeling that the volatility is going to increase signifigantly these next few weeks as investors search for a bottom. Keep an eye on the economic data for this week, especially retail sales for the month of October (due out Wed.).

'Til then.

Position Closed In CAT

2007-11-09T11:37:00.000-06:00

Sold 30 January $80 call options at $130/contract. This represents a 31% loss.

Position Built In CAT

2007-11-06T16:53:00.000-06:00

CAT posted a slightly weaker quarter on Oct. 19th due party to slowing U.S. sales. They also lowered their outlook for the rest of the year and as a result, the stock has seen almost a 10% decline. Fundamentally, however, it is still a fantastic company: more than half of CAT's sales come from overseas in the mining and commodities sectors, an area which will only continue to expand. Let's not forget the 14 P/E. Technically, the stock looks poised to rise off of its 200-day sma.

Bought 30 January $80 call options at $190/contract.

Position Closed In GM

2007-11-06T16:49:00.000-06:00

Sold 20 January $40 call options at 150/contract. This represents a 40% loss.

Ouch.

Position Built In GM

2007-10-30T13:48:00.000-05:00

GM has been in the news recently for the positive outcomes of the labor union contracts and has seen some really strong buying as a result. The stock has come down from its monthly highs of $42 and with the recent upgrade today, I think we could see a nice run here.

Bought 20 January $40 call options at 250/contract.

Stocks To Keep In Mind These Next Few Weeks

2007-10-28T20:08:00.000-05:00

BA / GM / NILE / DE

Position Closed In UA

2007-10-26T11:07:00.000-05:00

Sold 14 November $65 call options at $200/contract. This represents a 12% loss.

Had you bought the stock since my point of entry, however, you would have seen a 4.3% gain.

Stocks To Keep In Mind These Next Few Weeks

2007-10-11T18:24:00.000-05:00

KFT / SNDK / BA / NMX / CROX

Position Built In UA

2007-10-09T10:38:00.001-05:00

I really like UA here. I'm looking for this stock to bounce off its 100-day moving average and crack that $63-64 price range. Fundamentally, just look at the numbers: 51% revenue growth and 136% earnings growth, not to mention excellent brand recognition these days.

Bought 14 November $65 call options at $225/contract.

Position Closed In VLO

2007-10-09T10:17:00.000-05:00

Sold 9 December $72.5 call options at $360/contract. This represents a 53% profit.

Position Built In VLO

2007-10-04T14:38:00.000-05:00

VLO looks pretty darn good here. I'm looking for it to bounce off that 100-day sma and hopefully crack that double top formation at around $71.92. All of the oil stocks right now are lining up for some decent trades, but I like Valero because it has that refining segment. And can you say crack spreads? VLO is a strong buy here.

Bought 9 December $72.5 call options at $235/contract.

The Most Beautiful Aston Martin Ever.

2007-09-30T21:52:00.000-05:00

Position Closed In SNDK

2007-09-28T09:33:00.000-05:00

Sold 7 January 2008 55$ call options at $570/contract. This represents a 26% profit.

Stocks To Keep In Mind These Next Few Weeks

2007-09-27T09:56:00.000-05:00

UA / SHLD

Position Built In SNDK

2007-09-18T13:19:00.000-05:00

SNDK is bouncing perfectly off of its 100 day SMA currently. The stock is oversold, the technicals all look excellent, and fundamentally, this company looks outstanding. Also of note, take a look at the triple top formation SNDK has formed over the past three months. I think we might just break through resistance this time around.

Bought 7 January 2008 55$ call options at $450/contract.

Stocks To Keep In Mind These Next Few Weeks

2007-09-13T14:13:00.000-05:00

ICE / CAT / SNDK / SHLD / UA

Position Closed In GM

2007-09-13T14:06:00.000-05:00

Sold 10 December 32.5 calls at $360/contract. This represents a 67% profit.

Position Built In GM

2007-09-04T15:51:00.000-05:00

The chart for GM looks fantastic. Also, GM's August auto sales were up 6.1% from last year, which can only help move the stock forward.

10 December 32.5 calls bought at $215/contract.

Normal Service Scheduled To Resume Starting Tuesday

2007-09-01T17:17:00.000-05:00

After a nice backpacking trip in Yosemite, CA, the blog will be up and running again come Tuesday. I hope you all have a good Labor Day Weekend and I look forward to getting on with trading next week.

On Vacation

2007-08-17T12:50:00.000-05:00

I will be out of town until September 1st. All positions have been liquidated. The blog will be back up to speed come that time. Just a quick note: the market did bounce dramatically off of its 200 day sma yesterday, which could mean good things in the long run. Also, I think the Fed's move today was quite clever. Good luck to anyone in the market right now.

Andy

Quick Update, A Possible Charity Fund In The Works, and A Series-7

2007-08-10T10:58:00.000-05:00

These are some of the most choppy, volatile trading sessions I have ever seen and as a result, I am finding it difficult to make money in them. Basically, when the market is down 150 points, my positions in F, MSFT, and INTC actually hold up fairly well. However, when the market tanks another 200 points, my positions go straight into the red. Concurrently, on the up days, F, MSFT, and INTC have been very good performers. The same cannot be said of AAPL though.

My point is that no one can do anything about the current market conditions. All I can say is that on those -150 days, I am hugely pleased with how my stocks have held up and I think once the market settles down a bit, we can start looking forward to more profitable trades. Many of you have suggested the use of puts in a down market such as this one and to be honest, I just have not traded puts enough to feel comfortable doing it. However, I have begun trading them on paper and I will keep you updated on that as well.

On another subject, my friend (avid investor) and I have recently been discussing the idea of a possible charity fund geared towards helping out charitable organizations both here and abroad. The fund would probably be initiated at a balance of $2000. We were thinking that we could give either quarterly or monthly donations to the organization of our choice. Obviously, the amount, if any, would be dependant on how the fund did financially for that period of time.

This fund is in its very infant stages at the moment. We are still trying to figure out the taxation issues that go along with it, but we think that this a very worthwhile cause that could potentially help out quite a few people.

And finally, I have started studying for a Series-7. Hopefully, I'll be ready to take the test by this Christmas. I just need to find a financial firm to sponsor me.

Zonda R

2007-08-09T09:54:00.000-05:00

Position Built In MSFT

2007-08-03T10:00:00.000-05:00

MSFT is another tech company that had a pretty decent quarter. However, the market has pulled MSFT down since the earnings and I think that Vista, along with the XBox 360 make this stock fundamentally attractive. From a technical standpoint, the stock looks poised to move, especially as it is in the tech sector which has shown some impressive resistance to the market downs.

Bought 9 October $30 call options for 110/contract.

Position Built In INTC

2007-08-03T08:51:00.000-05:00

INTC is looking to move higher based on the technicals. Fundamentally, INTC had a fantastic quarter, with profit rising 44% despite decreasing margins in the chip business. And from a sector view, INTC is leading the recent tech rally in this hugely volatile market.

Bought 20 October $25 call options at 110/contract.

Position Closed In T

2007-08-03T08:44:00.000-05:00

Sold 40 October $42.5 call options for $110/contract. This represents a 37.5% profit.

Position Built In AAPL

2007-08-02T10:28:00.000-05:00

Apple has been hammered by iPhone rummors as of late and to be honest, I think its all a load of bollocks. The stock itself has bounced perfectly off of its 30-day moving average, its heavily oversold, the options are very cheap, and they just released HUGE earnings. And as if that wasn't enough, Apple should be releasing new iMacs and iPods in early August. When all is said and done, I think Apple could really move here.

Bought 14 September $165 call options for $150/contract.

New iMac Keyboard? Looks Pretty Legit

2007-08-01T12:41:00.000-05:00

Position Closed In GOOG

2007-07-31T13:56:00.000-05:00

Sold 22 Sept $600 call options at $100/contract. This represents a 25% loss.

Revisions To My Trading Strategy

2007-07-31T11:26:00.000-05:00

This past week I took a position in GOOG as the stock was hitting its support at $500. Currently, GOOG is sitting at $517 and change. So it appears that I could not have called this one any better. That being said however, I am getting burned in my position (600 calls) simply because I bought options that were too far out of the money. Compare these two charts:

$600 Calls: http://www.prophet.net/quotes/quotePopup.jsp?symbol=GOO-IT&colorscheme=quotes&duration=5d&frequency=i1

$550 Calls: http://www.prophet.net/quotes/quotePopup.jsp?colorscheme=quotes&symbol=GOP-IY

Notice that the $600 calls have absolutely no upswing at all in relation to Google's stock price, whereas the $550 calls show a 30% increase.

This recent trade revealed a real flaw in my trading strategy which I am now fixing. Here's what's going to happen: I am going to use the following equation to calculate the strike price of the option I want to trade.

(Stock price) x (10%) + (Stock price)= Strike price of option

10% is a number that I came up with after a few hours of research looking at previous trades. That number, however, can vary a bit, depending upon how strong of a move I think the stock will make. The higher the move, the higher the percentage. But for the time being, 10% seems like a fair number.

This revision will keep me out of situations such as the one I am currently in, further reduce risk in each trade, and lock in profits more often.

Updates to come later.

Stocks To Keep In Mind These Next Few Weeks

2007-07-29T08:51:00.000-05:00

F / T / CAT / NYX / MA / X / ICE

Position Built In GOOG

2007-07-26T13:46:00.000-05:00

Google has hit major support here at $500 and has held $500 since the DJIA tanked 200 points earlier today. The DJIA is currently sitting at -400 and GOOG has managed to hold on.

Bought 22 September $600 call options at $135/contract.

Fantastic Quarter For Apple; Bring On Q4!!!

2007-07-25T16:43:00.000-05:00

Congrats to the longs! Take that you shorts!

So Hot Right Now

2007-07-25T13:10:00.000-05:00

Position Opened In AAPL

2007-07-25T08:33:00.000-05:00

Bought 25 January 08 $250 call options at $90/contract.

This is strictly and earnings play as the technicals for Apple just don't seem to matter to anyone these days.

T Lookin' Strong After Earnings

2007-07-24T14:08:00.001-05:00

AT&T reported some really fantastic numbers this morning. On top of that, they released excellent guidance for Q3 and they also stated that their stock buyback is ahead of schedule. Fundamentally, there are very few companies better than AT&T. And technically, the stock looks as though it's going higher.

Position Closed In HAL

2007-07-20T09:04:00.000-05:00

Sold 17 October 37.5 call options for $210/contract. This represents a 60% profit.

GOOG In Play

2007-07-19T15:39:00.000-05:00

What a fantastic long-term buying opportunity. Check out those LEAP option contracts tomorrow morning!

Position Closed In GS

2007-07-18T08:47:00.000-05:00

Sold 15 October $250 call options at 15/ contract. This represents a 73% loss.

The financial sector is a mess right now, and until it clears up, it's not worth playing. Initially, the options were up 55%, that is, until Bear Sterns came out with that hedge fund disaster. Morons.

Position Built In F

2007-07-17T08:52:00.000-05:00

I really like F right here.

Bought 20 Sept $9 call options at $60/contract.

Classic Triple Top Action For The DJIA

2007-07-12T14:45:00.000-05:00

Bullish is the only word to describe this market right now.

Keep Those Financials On The Radar

2007-07-11T11:08:00.000-05:00

This sector has been hammered as of late, but once all this subprime mess is cleared up, the reversal could be huge.

Position Built In T

2007-07-11T09:18:00.000-05:00

After reaching a 52 week high about a week ago, T has come back down to more reasonable levels and may be worth a look. Check out the chart:

The stochastics is inching towards that 20 mark and the stock is testing the lower regions of the bollinger bands. Yes, the MACD is still definitely negative, but the options were hammered yesterday and I think the momentum of selling in the options was irrational. On top of that, if you look at a 6 month chart and draw a straight line along the bottoms of the stock, you will see that this recent bottom is perfectly in line with the other three.

Bought 15 October $42.5 call options at $.80/contract.

Position Closed In PEP

2007-07-10T13:06:00.000-05:00

Sold 40 August $70 call options for $.25/contract. This represents a 25% profit.

Position Closed In NYX

2007-07-10T12:52:00.000-05:00

Sold 20 August $85 call options for $1.70/contract. This represents a 125% profit.

Position Built In HAL

2007-07-09T23:20:00.000-05:00

Bought 17 October 37.5 call options for $1.25/contract. Check out that MACD!

Position Closed In CELG

2007-07-09T23:16:00.000-05:00

Sold 25 August $65 call options for $.95/contract. This represents a 6% profit.

USA-2 Brazil-1

2007-07-07T23:45:00.000-05:00

Congrats to the u-20 men's national soccer team who beat Brazil in the u-20 World Cup. Highlights can be found here:

http://youtube.com/watch?v=EmExheyGwKs

And how 'bout Adu on that second goal? Simply brilliant.

Stocks To Keep In Mind These Next Few Days

2007-07-06T12:05:00.000-05:00

ADBE / CROX / AMZN / CAT

Position Built In NYX

2007-07-05T11:11:00.000-05:00

NYX has been absolutely hammered lately, but check out that MACD slowly reversing to the positive. I think there could be a run in there somewhere, especially with earnings on August 2nd. Plus, the options are trading at 52 week lows right now, which seems pretty low risk if you ask me.

Bought 20 August $85 call options at $.80/contract.

Position Closed In AAPL

2007-07-05T09:00:00.000-05:00

Sold 40 August $160 call options for $.90/ contract. This represents a 100% profit.

Beauty Personified

2007-07-03T21:35:00.000-05:00

Apple Is So En Fuego Right Now

2007-07-02T22:00:00.000-05:00

Absolutely unbelievable iPhone, Apple TV, Macbook and Macbook Pro sales will shatter all estimates this quarter. Lest we forget that Leopard is just around the corner. Get on this train while you still can. And anything below $120, you best back up the truck!

Ask, And You Shall Recieve

2007-07-02T21:42:00.000-05:00

I've recieved a ton of emails asking for the use of charts in my blog. And as of today, I will start posting charts along with my picks. I will also show you all what I am looking at in terms of indicators when entering and exiting a position. So, with that being said, let's take a look at Pepsi (PEP).

First, look at the Stochastics. Anything below 20 is considered oversold and in this case, Pepsi looks attractive.

Secondly, the stock price is near the lower bollinger band and about $1.00 below its 30 day MA. Again, the stock looks good.

Thirdly, look at the MACD. It is in the process of reversing from the negative to the positive. This is the KEY indicator I look at when entering a trade.

Finally, money stream is increasing into the stock, a sign that there are more buyers than sellers, which will push up the stock price.

Stocks To Keep In Mind These Next Few Weeks

2007-07-01T15:12:00.000-05:00

PEP / SNE / ADBE / GS / PG / VIA / AAPL

Position Closed In T, Position Opened In Apple, and I Bought Some iPhones

2007-06-29T23:46:00.000-05:00

Sold 45 August $42.5 call options for $.85/ contract. This represents an almost 100% profit in two days. Not too shabby.

Bought 40 August $160 call options for $.45 /contract. These options were relatively cheap as compared to what they were a few weeks ago. I may hold them through Apple's next earnings.

And also today, I camped out at the Apple store and got four iPhones, three of which I am planning on selling on eBay. These phones are absolutely stunning. They are just so perfect and intuitive and utterly brilliant; only Steve Jobs could have pulled it off. Initially I was going to sell all four of them, but I think this may be too good to pass up.

Til next time...

Just Speechless

2007-06-28T16:36:00.000-05:00

http://youtube.com/watch?v=oP1UQMd7VMw

What is this country coming to?

Position Built In T

2007-06-27T16:05:00.000-05:00

45 August $42.5 call options bought at $.45/ contract.

Position Built In CELG

2007-06-27T12:49:00.000-05:00

25 August $65 call options purchased at $.90/contract.

Position In QCOM Closed

2007-06-27T10:58:00.001-05:00

Broke even with this trade. The stock was held back by the current Broadcom lawsuit.

ADBE and PEP Approaching 200 Day SMA

2007-06-26T14:53:00.000-05:00

If these two stocks can show some strength here in the next few days, they both make fantastic plays. Updates to come.

Stocks To Keep In Mind These Next Few Weeks

2007-06-21T09:56:00.000-05:00

T / SNE / CELG / PG

AMD was on that list as well, but it got upgraded this morning and has already had a 5% run. Bollocks!

Steve Jobs For President? Why The Hell Not!

2007-06-18T12:35:00.001-05:00

http://www.insanelygreattees.com/shirt/president

If he could point the United States in a similar path of success that Apple has enjoyed since he has been at the helm, then he's got my vote.

Quick Update

2007-06-17T14:22:00.000-05:00

Well, I mentioned F as possible play a couple days ago and it's up 8% since. The options are up over 100%. It's too bad I didn't get in on this one.

On the radar for the next few weeks: SNE / CELG / PEP

And on a closing note, Happy Father's Day to all you Dad's out there! Hope it's a good one.

Position Built In QCOM

2007-06-13T18:19:00.000-05:00

QCOM is pointing much higher after recent buying. 37 October $50 contracts were purchased at $75/ Contract. I may build that position even more tomorrow depending on how the market looks.

Buy Apple On This Weakness

2007-06-11T17:47:00.000-05:00

As a long term trade, this presents an awesome buying opportunity. Check out some some LEAP options especially, the 2009's.

Position Closed In AKAM

2007-06-11T14:59:00.000-05:00

There was a 15% gain made on this trade. However, the holding period was way too long due to my not having a selling strategy. QCOM is still on the radar.

It's Been A Bloody Few Days

2007-06-07T18:47:00.000-05:00

Well, it was bound to happen, a market correction that is. And to be honest, I don't think we're at all done. Personally, I am holding off on any new positions until I see some signs of strength.

Anyways, onto the news. Basically, my position in NYX, after having been up over 120%, is now down 80% and being June options, I am finding few buyers around, so that position will most likely go to 0. I got a very expensive lesson from NYX, being that in all of my eight months of research and developing of this trading strategy, I had yet to come up with a point in which to sell. Now, I am almost 99% positive that I have found that selling point based on my indicators as proven with CSCO as well as research on what I should have done in AAPL, RIMM, NYX, AKAM etc. While I am obviously not happy that I have lost over $4000 in two weeks, I do think that this may be a blessing in disguise, as now I have what I hope to be the complete foundation for many succesful trades to come.

Still keep and eye on QCOM, F, and T especially after these big down days. Most likely I will be moving into QCOM as my next trade. Stay tuned.

Check Out QCOM, Maybe F

2007-06-06T08:16:00.000-05:00

Technicals pointing stock higher. I will most likely be building my position sometime either today or tomorrow. And here's a quick lesson: Buy on the weakness, especially with options!

F is another one that may be ready to make a move. I'll keep you updated on that when the time comes.

Beckham Still Tops

2007-06-02T17:48:00.000-05:00

David Beckham is without a doubt, one of the greatest to ever play the game. He had an outstanding performance against Brasil on Friday and showed why he deserves a spot on England's right side. Here is a video of some of his great moments.

http://youtube.com/watch?v=adYgHunQEl0

Position Closed

2007-06-01T16:23:00.000-05:00

Position in CSCO has been closed. The 17 October $30 Call Contracts that were for $50/Contract were sold for $70/Contract. That's about a 40% gain in two days.

I absolutely nailed this one to perfection, literally getting in at the absolute bottom and getting out a few points from the top. I learned from my previous expieriences with NYX and AKAM and have developed what I think is a fairly decent selling strategy. Hopefully I can start to reproduce these results on a week in, week out basis.

Anyways, I've got some research to do this weekend for my trades next week. I'll see if I can get that to you by Sunday.

'Til then...

CSCO Lookin' Good

2007-05-30T11:31:00.000-05:00

Position added in Cisco:

17 October $30 Call Contracts for $50/Contract

The Stock Market Can Be So Frustrating Sometimes...

2007-05-29T16:01:00.000-05:00

My positions in AKAM and NYX, as of this moment are signifigantly in the red. I have had to re-evaluate my option trading strategy a bit and as a result, I have changed a few things:

1.) I have put together a checklist of items that I feel are important to my trading and have posted it up on my wall in front of my desk. Hopefully, this will help keep my strategy in check when the moment comes.

2.) After some heavy research this past weekend, I have decided that instead of waiting for all three of my indicators (MACD, Stochastics, Momentum) to realign for a downswing, I am now going to rely soley on my Stochastics Slow indicator as my basis for selling. As I have previously stated, most of the gains are made when the MACD switches from the negative to the positive, especially when trading the options. RIMM, NYX, AKAM, and AAPL are very good examples of what I am talking about. And once the Stochastics moves above 80, I will watch the stock very closely. Anything above or at 80 will be my selling point, depending on how the stock looks. This would have allowed me to keep my 100% gain in NYX, as well as my 25% gain in AKAM. That being said, however, I will still use the three indicatiors together as my basis for buying/building a position.

Anyways, that's the update for now. Once again, my strategy has been proven as succesful, but it all comes down to the person making the trades to put the strategy into action. I have without a doubt found the most succesful way to buy into the stock and get the returns I want. My only problem now is figuring out the right time to sell. Hopefully these changes will get me to that point.

Til next time...

Somewhat Hilarious Video (NSFW)

2007-05-28T16:49:00.000-05:00

http://youtube.com/watch?v=alc6BnEUSzg

Absolutely hilarious. There is quite a bit of profanity, so be warned.

Blahhh, Lessons Learned

2007-05-24T12:24:00.000-05:00

So this past week, I basically graduated from highschool, thus leaving me to begin my summer. For the past four days, I have pretty much been away from the computer, except for the occasional glance now and then. And here is where I learned yet another lesson: if you are not going to be at a computer, use Good Till Canceled (GTC) orders. This way, if the stock or option reaches your desired price, the trade will be automatically executed. I got killed on NYX yesterday because I was not at a computer. I didn't even realize that my option traded at $90/ contract, over a 100% gain!! And now, I am in the red because of it.

Anyways, I am in the process of picking out a few more trades for next week. Depending on how they look, I might get them to you by Friday.

Til then...

The Well Stocked Bachelor Pad

2007-05-20T22:06:00.000-05:00

http://www.forbes.com/realestate/2007/02/12/bachelor-home-essentials-forbeslife-cx_mw_0213bachelorpad.html

For all you bachelors and ballers.

Closing Out Positions

2007-05-18T09:06:00.000-05:00

Position in T has been closed out with a 4.5% gain if you traded the common. Trading the options would have been huge. I wish I had caught this one with my real portfolio.

Call Options Purchased On AKAM

2007-05-15T09:59:00.000-05:00

40 AKAM August $55 call options bought at $90/contract.

Talk About Slipping Under The Radar

2007-05-14T21:17:00.000-05:00

Akam (Akamai Technologies) is pointing higher and after being off $1.43 today and I am seriously considering an options play sometime tomorrow. I almost missed this one.

Anyways, updates to come later.