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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25593349 - 11/05/18 08:25 AM (5 years, 2 months ago) |
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Just wanted to quickly follow up on OLLI; opened down at its 50 day moving average and has been selling off on very high volume ever since. Closed my small position. If it firms up around $85, that could be the beginnings of a constructive sideways range from where it may build a high base to breakout to new highs... but that’s not happening today. I can always buy it back later and with the S&P hanging out below it’s 200 day moving average, AAPL breaking below $200 on weak demand for its iPhone XR after recently noting they would stop reporting unit sales for the phone going forward, I see no reason to press to the long side today. Market is generally directionless short term, to slightly weak this morning, it’s a day to trade small or not at all.
Apple is down to its 200 day moving average, after a weak report on iPhone XR sales. The company is known for actively buying back shares on weakness. It's had an awful fall over the past few days, and I don't expect it to give up its 200 day moving average without a fight. Not that I expect it to blast off to new highs either. As such, I'm selling a weekly $197.50/$195 bull put spread for a $0.75 credit (small size), and will add if I can get a $1 credit.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25609615 - 11/12/18 02:03 PM (5 years, 2 months ago) |
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My AAPL bull put spread expired worthless for maximum profit last Friday. I had also put on a weekly SPY $283/$284 bear call spread on Wednesday for a $0.20 premium which also expired worthless for max profit on Friday. In the grand scheme, these positions were rather small and didn't move the needle all that much, but it's still nice to have a tiny profit in an otherwise difficult market where most people are losing money quickly. Went into the weekend with zero trading positions and only half-loaded broad market retirement accounts, so it's been a rather stress free event to spectate upon all the carnage today.
Had I been at my desk this morning I would've liked to have taken a short position on TWTR or AMZN (or at least putting on another weekly bear call spread on the SPY), but I had family in town and only got to my desk a half hour before the close and although the market is looking set to close extremely weak (which indicates to me that the market will remain pressured into the end of the year at least), I would expect some short term stabilization by Wednesday and absolutely don't want to force any trades.
If we continue to freefall, you can bet I will be attempting to repeat my UVXY put trade that bagged me some great gains a week or two ago. I will also be looking to continue to sell spreads since option premiums are high, although I am not swinging for the fences by any means. Trade small or not at all, this is a battleground that can suck money out of your account really quickly if you aren't careful. If you do take a trade, make sure you keep it on a tight leash.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25612704 - 11/13/18 06:28 PM (5 years, 2 months ago) |
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Taking a swing trade on ROKU by going long common stock. This showed some stabilization today after having fallen 48% in less than two months (with the hardest hit coming on the heels of its earnings report last week). This is definitely a broken stock, and despite disappointing on total revenue (about 3% less than expected) and decelerating revenue per user, the company retains some pretty good growth prospects. For these reasons, I think we will see buyers begin to step in and I am aiming to capture some of that swing. This is only a trade. A move below $41 will stop me out. I may also sell some bull put spreads tomorrow if the opportunity presents.
Watching AAPL as it falls below its 200 day moving average. I think if it gets to ~$185 we could see a decent snap back to at least test the 200 day from the underside. AAPL is nice and liquid for quick option trades, which is why I like to watch it.
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BayerPhi
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25632404 - 11/22/18 12:16 PM (5 years, 2 months ago) |
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You don't think AAPL may keep falling? When would you buy a call on AAPL?
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: BayerPhi]
#25642985 - 11/27/18 03:29 PM (5 years, 2 months ago) |
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Apple's growth, in aggregate, is likely to be decelerating. This doesn't mean that they won't continue growing, just that they won't be growing as fast in the near term, as the smartphone market has matured and the new phones only feature incremental upgrades at this point. That said, they are still not an "expensive" company on a price to earnings metric, and their services revenue is likely to accelerate. Having fallen some 25% in the last month or two, and more importantly, not falling today on news that Trump may intensify the trade war with China that will result in 10-25% tariffs on iPhones built in China, indicates that selling pressure has abated. When a well run company that is still growing, gets beaten down in a big way and then stops going down even in the face of fresh bad news, that indicates that you can probably dip a toe in the water for a quick counter-trend trade.
As such, I picked up a handful of January expiration $170 calls on AAPL between $10-$11 today. If AAPL falls below yesterday's low of $170.26, I will be stopped out of the position (the fact that it held that low today further corroborates that most of the sellers who had been looking to liquidate, have at this point). I also considered putting on some bull put spreads, but opted for the directional call because I can easily define my risk and I want the extra room, as I think we can move up to and above $180 pretty easily now that the stock is so far extended. While this may be an OK place to put on a longer term position, I don't like the market dynamics and so, for now, this is only a trade. I am expecting that if we see a bounce, it will stall out at around $190.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25645623 - 11/28/18 07:20 PM (5 years, 1 month ago) |
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AAPL calls are killing it. The underlying is already up to my initial swing target of $180, bringing the Jan $170 calls to +45% above my basis. I will tighten up stops tomorrow on half of my position (because a 45% gain overnight is a gift), my stop will be based on the opening rotation low (first 15 minute candle) and I will likely let the remaining half ride with a looser stop since the calls still have 50 days til expiry. I think AAPL should ultimately test $200 given how quickly the positive momentum moved it today, although I still think it may take a pause at $190.
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BayerPhi
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25646888 - 11/29/18 03:47 PM (5 years, 1 month ago) |
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Did you manage to sell those AAPL calls? I'm thinking SPY puts for the next 3 weeks now.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: BayerPhi]
#25648102 - 11/30/18 09:02 AM (5 years, 1 month ago) |
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As per the plan noted in my prior post, a stop was used and I am still holding a small position in AAPL Jan $170 calls (stop on remaining position at $177.63). Remaining position remains at +25% above average basis.
I see no reason to be buying puts on the SPY today. Discipline dictates that I won't put on a leveraged directional trade like that until I find the issue at or near a resistance level (or about to break support) and showing signs of rolling over. In the case of the SPY, the top of the current range is $280. While we could rollover here at $275 since this is where the 200 day moving average is being tested, the action today is showing stability and the potential for a test of the top of the range, another $5-$6 higher. If price takes out today's intraday low, that could be a reasonable setup for buying some SPY puts (with a stop above the intraday high), but honestly that's not a trade I would take into a weekend with G20 headline risk and potential positive trade sentiment from the Trump/Xi meeting that could result in a big gap Monday morning. In a market as volatile as this one is now, I generally don't like to go into the weekend with much exposure at all.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25661004 - 12/06/18 06:16 AM (5 years, 1 month ago) |
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My alerts fired off when SPY hit $280, but unfortunately I was on the road and didn't get a chance to put on any bearish trades. I probably would've opted for a bear call spread over outright puts, as options premiums are expensive given the high volatility, and I would not have anticipated such a quick two day drawdown to the bottom of the range.
Anywho, here we are, nearing the bottom of the range... again. This will be the third test and generally speaking, the more times a level is tested, the more likely it is to breakdown. Not gospel by any means, but a tendency nevertheless. I really don't have much else to say as I'm hopping on a plane this morning and will be away from my desk for the bulk of the December. I pulled even more of my retirement account to cash on Monday's strength, now over 80% cash in retirement, 100% cash in my trading account, and 50% cash in my kid's college account (he has such a long time horizon at less than 2 years old and the 529 plan restricts portfolio modifications to twice a year, so I can't be as active there).
Other than a mostly hands off approach at this point, I do have some bids out there for UVXY puts. This leveraged instrument is not for the faint of heart, and must be traded cautiously (especially when utilizing leverage on top of the leverage!). My bid is for January $80 puts @ $10. Given that they closed yesterday at $26, this trade will require a breakdown to new lows in the major averages in order to execute. Out of respect for the unknown, I am leaving plenty of room to add to the position at higher strikes and potentially longer expirations should the market move into a major capitulation phase. The nice thing about UVXY puts, you don't need a big position to make big gains, as long as you are patient and wait for large spikes in price and volume.
Gun to my head, if I were trading today's open (I won't be), I'd probably look for long side trades on the big gap down, as futures are presently pointing to a -1.5% open on the S&P on top of yesterday's rout (this could of course change rather significantly as we are still over an hour away from the opening bell). In aggregate though, this market is very dangerous and unless you are an experienced active trader, it's probably better to step aside and wait out the volatility.
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automan
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25661933 - 12/06/18 03:22 PM (5 years, 1 month ago) |
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A few weeks after my last post 6 or 7 weeks ago where I said I pulled my retirement money out to cash, I dropped it in iShares Gold Trust (IAU). It doesn't really make much, but it doesn't really lose anything when the market tanks. So in that time, I've made about 2.7% on my money, which is a solid return with how things are going. I'm not a sophisticated investor and really don't have an idea about what you're talking about most of the time, Geo. My plan is to ride gold into the next recession (that has probably already started) then pony back into my boring ass index funds.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: automan]
#25668565 - 12/09/18 06:29 PM (5 years, 1 month ago) |
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It’s a decent strategy auto, although with the fed set to continue raising rates into 2019, that’s not really a great dynamic for gold. On the other hand, any true crisis is likely to be positive for gold so it could work toward your benefit. I however, prefer to stick with cash during times like these.
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automan
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25668637 - 12/09/18 06:57 PM (5 years, 1 month ago) |
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Yeah, I feel you on the Fed. It seems like they are raising the rate passed where they should. I was thinking about this and it seems like they are raising rates only because they need a lever to push down when the next recession hits. If rates are low (like they are now) and a recession hits, we'd be kinda fucked.
-------------------- No, no, you're not thinking, you're just being logical. ~ Niels Bohr
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Corporal Kielbasa


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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: automan]
#25669289 - 12/10/18 04:38 AM (5 years, 1 month ago) |
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CRON is up to something maybe things are looking positive for it
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BayerPhi
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Is the market going up tomorrow (12-13-18)? Yes or no, and why or why not?
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vertygo
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: automan]
#25681696 - 12/15/18 07:13 PM (5 years, 1 month ago) |
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Quote:
automan said: Yeah, I feel you on the Fed. It seems like they are raising the rate passed where they should. I was thinking about this and it seems like they are raising rates only because they need a lever to push down when the next recession hits. If rates are low (like they are now) and a recession hits, we'd be kinda fucked.
What's a good investment in recession ? Other than real estate maybe. I mean securities or ?
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automan
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: vertygo]
#25681735 - 12/15/18 07:53 PM (5 years, 1 month ago) |
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Quote:
vertygo said:
Quote:
automan said: Yeah, I feel you on the Fed. It seems like they are raising the rate passed where they should. I was thinking about this and it seems like they are raising rates only because they need a lever to push down when the next recession hits. If rates are low (like they are now) and a recession hits, we'd be kinda fucked.
What's a good investment in recession ? Other than real estate maybe. I mean securities or ?
I think that depends on the inflation rate. As someone who was born in the 70s and has seen many recessions, I typically drop into gold (something like IAU) when I see the recession coming, then drop back into Index funds after a year or so.
Disclaimer: I'm a boring, unsophisticated investor. I rarely (maybe two or three times a decade) dip in and out of single stocks. I just want to average a 11%-12% return over the next 25 years and let compound interest do its thing.
-------------------- No, no, you're not thinking, you're just being logical. ~ Niels Bohr
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: vertygo]
#25685504 - 12/17/18 02:28 PM (5 years, 1 month ago) |
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Quote:
vertygo said: What's a good investment in recession ? Other than real estate maybe. I mean securities or ?
Typically during periods of economic contraction, a lot of the big money guys will buy into what is sometimes referred to as a "bond proxy", a term referring to dividend yielding equities that have a low beta (i.e. stocks that pay you to hold them, and are less volatile than the total stock market). These sorts of equities are typically comprised of utilities, telecoms and real estate. Alternatively, 2 year Certificate of Deposit accounts (which lock up your money for two years) are available at most banks and credit unions averaging north of 2% annually now. Not a great return, but safe all the same. If you do like to actively invest, I would just keep your money in cash such that you will be ready to deploy as opportunities present.
I did use today's end of day bleeding to put on some Jan UVXY $80 puts @ $15.75. Very small size, as I would prefer to be buying these closer to $10. However, I do think the market is getting rather oversold on a short term basis and that UVXY should fall relatively soon (especially if the Fed hints later this week that they will be less aggressive on future rate hikes than they had previously stated). On a continued move down tomorrow, I will likely be adding to counter-trend trades such as the aforementioned UVXY puts. Other options include bull put spreads or possibly even outright calls on the SPY. Note that in this environment of heightened volatility, premiums are high and spreads are wide on options contracts, so if you are going to use options, credit spreads are one of the safer methods of doing so. On individual stocks, I will be watching AMZN for a bounce back to ~$1600, and note that - although it would be a very tall order - the issue is setting up a potential inverse head and shoulders pattern so long as it stays above ~$1475 and, ultimately, breaks back above $1800. This scenario is notational and only a dream at this point, and I would not base my trades on a completed inverse H&S coming to fruition.
At the risk of parroting my prior posts, I would remind everyone that this market is very dangerous and all trades should be kept smaller than usual and must incorporate a disciplined risk management (i.e. stop loss) strategy. Cash is a position, and one that has been outperforming! All the best.
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today mylove



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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25687676 - 12/18/18 03:22 PM (5 years, 1 month ago) |
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When would I be able to sense a good time to deploy that cash? I'm fairly new to equities markets, looking to keep it simple and buy something like VOO and hold it long term (decades). With a longer time horizon is this correction good enough or are people expecting this to get way worse?
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: today mylove]
#25687854 - 12/18/18 04:48 PM (5 years, 1 month ago) |
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Ain't that the million dollar question? 
If you have money that you are squirrelling away in the market for decades, you can definitely put some of it to work right here. History has held that even when buying at what turn out to be market tops, portfolios of such a long term nature still tend to do just fine. Of course, it is nice to get the best price you can, and for this reason I would suggest spreading out your purchases over the next year or two. The low volatility of the past decade has bred complacency, but the market can fall a lot farther and faster than one might expect. The damage done over the past sixty days is the most accelerated drawdown we have seen since 2011. With headwinds pertaining to the interest rate cycle, political and geopolitical concerns not the least of which include the ongoing trade dispute with China, I don't think you need to be in a rush to buy, but I do understand wanting to have some skin in the game with such a long term time horizon.
As for what you might want to look for that would indicate market stabilization, you'll generally want to wait until the Federal Reserve is done normalizing monetary policy (i.e. once they indicate that they are done or very close to done raising rates; or in the case of a very poor economic backdrop, once they have already embarked on a rate cutting cycle). In so far as the price action, you'll want to see the S&P 500 put in a low print that bounces on very high volume, and a subsequent test of that level (which may not come all the way to tagging the bottom) that resolves to a higher high. At this juncture, we are only seeing lower highs and lower lows off the top, and in particular with this week's action, we are very close to breaking through the yearly lows from last February, which indicates that this market is likely going to need quite a while to repair itself before it can make new highs.
Short term, we are very oversold and I am expecting a meaningful bounce soon (in a matter of days or at most a few weeks), but I also don't expect that bounce to materialize to a resumption of the decade long bull market that we can see in the rear view mirror, and I would not be surprised to see us continue to rollover to new, deeper lows after that bounce has run its course. Hence, be patient, buy opportunistically, and leave yourself a cash cushion to take advantage of moments of market panic. I'll probably still be posting my thoughts sporadically in this thread, and if I feel like the longer term picture is improving, it will be noted. Right now however, unless you are an active trader who can navigate the gut wrenching volatility with disciplined risk management strategies, this is the time to preserve capital and let things continue to shake out.
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today mylove



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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25690910 - 12/20/18 07:24 AM (5 years, 1 month ago) |
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Thanks Geo, informative as always! Sounds like a solid plan.
When you were talking about UVXY: what exactly were you trying to do there? When you make plays on UVXY you're playing the volitility of the market, correct? But in an "amplified" manner? So if you're expecting the S&P 500 to bounce after a period of extended selling you do the inverse and... essentially short UVXY? I may be completely off base here, just trying to figure out what the hell it is, because the "all-time" chart of UVXY looks unique to say the least.
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