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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: today mylove]
#25696361 - 12/22/18 04:03 PM (5 years, 1 month ago) |
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UVXY utilizes futures contracts to return 1.5x the daily movement on the VIX. The VIX is an index that tracks volatility via the premium paid for put options on the S&P500 (people are willing to pay more for put options when volatility is high, because they are increasingly concerned of the market falling lower and put options gain in value when the underlying issue falls, thereby allowing you to protect yourself from losses when things go south). Because of the daily rebalancing and time decay inherent to the futures contracts that UVXY uses, it itself loses value over time, all else equal. It’s a somewhat complex product subject to massive moves in a short period of time. But I like it because volatility does tend to really spike in moments of panic and, ultimately, always normalizes. The only question is how long will that normalization take.
Because UVXY can move so much, it is not safe to short outright. Using put options limits your risk, as even though they are typically very expensive, you can only lose what you paid for them, whereas shorting UVXY outright, you can lose more than 100% in the event of a true market crash that would see UVXY move greater than 100% before you could cover/close the position. Your broker won’t let you hold the naked short position open indefinitely, so at any point that they think you won’t be able to pay them back, they’ll close the position on you and you’ll be stuck with the huge loss, potentially owing more than you had in your account to begin with.
The move down on Friday was fast and hard to the downside and on very high volume. I would have preferred to see it bounce into the close to have greater confidence that volatility will soon begin normalizing, but other indicators are now so negative that a near term bounce becomes a higher probability. Of course, there could be a cascade of redemption and margin call related selling, as well as tax loss harvesting that could continue to push the market down for the rest of the year. I did use the action Friday to build a rather sizable position in January expiration $80 UVXY puts, which cost me $10 each. The market needs to at least stabilize or begin to move a little bit higher for this trade to work. The nice thing about trading volatility, is that the market doesn’t necessarily have to rocket higher to make a huge return. If we get a few days of upside moves that can bring back +5% to the major indexes and then hang around trading sideways for a few more days, UVXY will probably lose 25% or so of its value as the price of put insurance declines, which would in turn make my $80 puts return greater than 100%.
The trade is not without risk however, as we might not see a break in selling before we get closer to that January expiration. In that case, UVXY will continue higher and there won’t be enough time for it to normalize before the put contracts I bought expire, and the time value will be bleeding out fairly quickly as we have only a few weeks left on the contracts. Therefore, this sort of trade needs to be managed closely, and should be closed or “rolled out” to a later expiration date at least a week before expiration.
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automan
blasted chipmunk


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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25702563 - 12/25/18 06:42 PM (5 years, 1 month ago) |
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Since the first week of October, I've made 8% while the Dow has gone down 20%. I doubt I'll make another trade until a few months before the next presidential election (about 20 months until my next trade... until then it will be all warchest building.)
-------------------- No, no, you're not thinking, you're just being logical. ~ Niels Bohr
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SirShroomsAlott
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: automan]
#25703802 - 12/26/18 12:47 PM (5 years, 1 month ago) |
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Bought into stocks for the first time with a single share of SPY.......if I'm saying that correctly, not expecting to make money off it or at the very least nothing significant but wanted to dip my toes in the water and see how it all works when it comes to this market. The OP in this thread is extremely informative though I still have much to learn, I figure the stock market is lower then it has been in some time so putting very small amounts to learn now might be a good time.
Mainly just want to learn how to do all this because while I could easily be wrong due to my current lack of understanding and experience with the stock market, I would imagine buying in heavy when the market goes real low and everyone is panicking would be the best way to get the highest returns over the long term and would love to be able to take advantage of that.
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AroundtheSon
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: SirShroomsAlott]
#25704263 - 12/26/18 04:37 PM (5 years, 1 month ago) |
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Welcome!
It's a fun hobby. Don't get too excited by short-term gains; it's kind of like gambling in that things can change rather quickly. Do your research, and continue to buy.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: automan]
#25720504 - 01/03/19 08:03 AM (5 years, 26 days ago) |
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Quote:
automan said: Since the first week of October, I've made 8% while the Dow has gone down 20%. I doubt I'll make another trade until a few months before the next presidential election (about 20 months until my next trade... until then it will be all warchest building.)
Well done auto. Wish I'd followed your advice! 
Ended up bailing on my UVXY put trade for a pretty nasty loss. Might reload if we get a big spike down to test (and bounce) at the recent lows, but for now I am having a hard time envisioning the market moving higher from here in the short term, and with AAPL's warning today (a company often looked to as a bellwether for the market and one that rarely misses its target), I'm just not comfortable with the exposure on increasingly short dated options with such high premiums. I had been doing really well avoiding the carnage throughout December, but I got too aggressive with that UVXY trade and had to paid the price.
While my position size on the UVXY trade lacked discipline, closing it out does not. It can be a hard thing to do when you know you're booking a big loss, especially as you envision the trade working out in the end (and it very well might). But this market environment is just too fraught with risk and I would have done well to remind myself that capital preservation is the name of the game, as well as reminding myself what I've been repeating here for a while now... to trade small or not at all.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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automan
blasted chipmunk


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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25720658 - 01/03/19 09:31 AM (5 years, 26 days ago) |
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Made another half percent so far today. If you think this is going to be a long process like I do, drop some cash into IAU and hold for a while.If it gains anything over the next 18 months, at least you'll not suffer inflation losses.
-------------------- 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: automan]
#25721174 - 01/03/19 02:51 PM (5 years, 25 days ago) |
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I am already exposed to gold through physical holdings, so it's unlikely I'm going to be putting money on it through my brokerage. I'd rather work with something like AT&T (T), which is currently sporting a 7% annual dividend yield and is trading at levels not seen since 2011, which can lead to potential capital appreciation while waiting around and collecting the high dividend. Or TLSX, a specialty lender that has remained relatively stable and sports an 8.5%+ yield. All cash today though as the market is looking like it wants to retest the lows.
Here's a nice collection of all the major bank's base cases for 2019 (suggest sorting by "Key Themes" in efforts to make the information more digestible):
These guys are often proven wrong, but it's still a good idea to know where "the street" stands in general, when informing one's own trading decisions amidst the context of the broader market environment.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25729053 - 01/07/19 01:14 PM (5 years, 21 days ago) |
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Just wanted to make a quick note on that UVXY trade I bailed on. The market turned the next day on the heels of a Fed announcement that there is a possibility they may not continue raising rates as they will be "data dependent" going forward. This, in addition to a resumption of trade talks with China put the wind at the back of an already deeply oversold market. It was, in effect, the retracement I was looking for, but it caught me by surprise and I exited the UVXY puts right before they would have become wildly profitable.
I took some pretty steep losses on a trade that, had I held it through, would have been up over 100%. But discipline trumps conviction, and given the impending expiration dates on the options I held, in conjunction with a market closing on its lows for the day and looking like it wanted to rollover again, including the fact that I could never have known that the Fed would come out with such a dovish comment the very next day; I don't, even upon review, feel that I could have responsibly handled the trade any other way (except to say that I should have kept it smaller to begin with). This is the difficulty in volatile markets, they can chop you up very quickly because the moves are so huge and so fast. Thus, it's almost always better to be patient and wait for things to settle before jumping in, or failing that, ensuring that your position sizes are much smaller than usual.
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Baby_Hitler
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills] 1
#25750608 - 01/18/19 02:29 AM (5 years, 11 days ago) |
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I still haven't switched my 401k back to green light, even though the market seems to have its legs back under it. I still feel that, long term, 2019 has a lot of booby traps waiting to go off.
I wonder how it would affect the markets if things started to look bad for Trump, as in him being removed, or even just the percieved likelihood of him being removed.
Also, we have a good chance of a hard brexit in the next couple of months. Global debt is at record highs. Much of it is in less than "investment grade" bonds, and many "investment grade" bonds are overrated. Global liquidity is at record lows.
If Trump and Pence were ousted, and Pelosi became POTUS, I think we could expect a significant amount of civil unrest, which is bad for business.
Good for lulz, tho.
-------------------- Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ (•_•) <) )~ ANTIFA / \ \(•_•) ( (> SUPER / \ (•_•) <) )> SOLDIERS / \
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Baby_Hitler]
#25765117 - 01/24/19 10:07 AM (5 years, 5 days ago) |
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This is why it's so difficult to be "all in" or "all out" of the market. Some market timing is appropriate, but moving all your chips in a single go is almost always problematic (or you're just gettin' lucky, which will run out eventually). The move back to prior support/current resistance has been furious, and the longer we trade sideways at this level, the more reliable the Christmas Eve lows will be as a longer term bottom, that if tested, should hold. I can't tell you what to do with your money. I haven't increased my exposure, and I agree that there are a lot of variable land mines laying in wait throughout the coming year or two. I think seeing the market move to new highs in the near term (2019) is extremely unlikely, but crazier things have happened...
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Rowboat
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25826429 - 02/20/19 10:15 PM (4 years, 11 months ago) |
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Started investing about a year ago, and grown my portfolio 9.62% First just buying into companies that seemed interesting. then diversifying into ETFs and index funds just picking up any and all progressively really. Just discovering this part of Shroomery and curious to go through this thread alone
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25948930 - 04/22/19 11:09 AM (4 years, 9 months ago) |
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Haven't posted an update here in a while, as life with a now two year old has me focused predominantly on matters outside of trading. That being said, the pivot by the Federal Reserve to pull back on their tightening cycle earlier this year in conjunction with continued positive employment data and decent earnings reports, has done what I thought was an extremely low probability event a few months ago, namely setting the major averages within striking distance of new all time highs.
One should be mindful that this is typically the point where the armchair investor thinks to him or herself, "Oh, I suppose the coast is clear, time to load up again", only to find out that the old high is actually difficult to chew through, the market falters a bit, and he or she sells out for a loss on a retracement, only to rinse and repeat, ever more frustrated in feeling so out of sync with the market. These cycles of selling the lows and buying the highs are nearly hard wired into our brains, and it is why discipline is foremost the most important skill to master if you are going to trade your own capital.
That being said, I have started to wade back into the market a little bit over the past month. At this particular juncture, I am focused on NFLX and CGC. NFLX reported earnings and is coiling in a tight range just above $350 (which is right above its 200 day moving average). I would expect a move above $380 to result in a test of the old highs near $420 at the very least. CGC is a dominant player in the Canadian cannabis space, that just last week signed an agreement to purchase one of the largest multi-state licensed cannabis companies in the US, Acerage Holdings, if and when federal legalization comes to pass. This would give CGC an even more dominant position in an emerging market that has a lot of growth ahead of it. I think you can accumulate this one on any pullbacks that get close to $40. Below $40, you don't want to own it. Above $50 and it probably starts another run higher.
The S&P keeps grinding higher, but because it is so close to its all time highs, I am weary of buying anything too aggressively here. Keep your positions small, if you're buying at all, and make sure you use a sell stop for protection.
I'll leave you with a few words from Stock Market Mentor's Dan Fitzpatrick from the morning missive he sent out today. I find him an invaluable resource in keeping me focused on my own discipline, if you like what you read, consider signing up for a trial at his website, where you'll get access to his daily strategy sessions and weekend update videos, not to mention live trading seminars and a forum full of active traders who share their ideas daily. I gain nothing from this recommendation, and he frankly probably wouldn't want me posting his missive that is sent to paying members... but I am doing it because his service really helps me in this endeavor, and if you're reading and interested in this thread, it could probably help you too.
Quote:
Good morning. Futures are down just a bit today, as we head into a busy earnings week. Tesla is due to report its Q1 results on Wednesday, along with Facebook. Amazon reports Thursday. I'll remind you that buying a stock before an earnings report is not trading; it's gambling. Gambling is not illegal. It's just not trading.
Last week I explored the importance of habits in our daily lives, and the impact they have on our future. Everybody seems to be looking for the pot of gold at the end of the rainbow -- as if, somehow, they just float along through life and someday they’ll get to where they want to go. Their ship will come in. They’ll find that pot of gold. They’ll win the lottery. They’ll have that epiphany where suddenly everything makes sense.
Right. That’s not just a pipe dream, it’s a living nightmare that never ends because it’s a search that never finds anything. The only gold you’ll ever find is Fool’s Gold. (In trading parlance, that’s known as a “stock pick.”)
Don’t look for the pot of gold. Instead, mine it. Stake your claim and dig it out of the ground.
I’ve got your prospecting tools right here. They’re called habits. And not just any habits. The tools you need to dig that gold out of the ground are the habits of the person you wish to be; not the person that you are. You are who you are because of your habits.
If you always think negatively, you’re an unhappy person. That’s a fact. That doesn’t mean that thinking positively will always make you happy. Sometimes life throws you challenges that make things difficult. But you’ll notice that Normal Vincent Peale did not write “The Power of Negative Thinking” as a follow up to his best seller. I don’t know what comes first. Does being unhappy lead to persistent negativity? Or does persistent negativity lead to unhappiness?
I don’t know and I don’t care, because I don’t want to be negative or unhappy. How you think is a habit. How you think about OTHERS is a habit. And, most importantly, how you think about YOURSELF is a habit.
Let’s look at trading. If you think that you’ll never be consistently profitable in trading, then you won’t be. How can you be? It’s one thing to think that you’re not profitable now. Frankly, if you’re not trading profitably, then that’s that. It’s a fact. No thought required to stay on that track. But the brain is remarkably efficient. It’s like a computer. It likes to free up disk space whenever possible so that it can deal with new information and challenges. This is why you can drive home from work without thinking. You put your shoes and socks on the same way each day, and you bathe in the same manner (hopefully every day, but...to each his own).
These activities, and countless more, require no thought. They used to; but they no longer do. Your computer has these programs running in the background.
This is my challenge to you. Get into your C-Drive and open your programs folder. Take stock of each program (i.e., habit) that’s running. Is it keeping you where you are, or is it moving you to where you want to be?
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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Ahab McBathsalts
OTD Windmill Administrator




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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25949120 - 04/22/19 01:09 PM (4 years, 9 months ago) |
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I bought a share of amazon today, but mostly have been piling up on gold since January.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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Baby_Hitler
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Ahab McBathsalts]
#25950746 - 04/23/19 11:51 AM (4 years, 9 months ago) |
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My employer, a Fortune Global 500 company, just had their annual employee stock buy up. I got a little over $4000 worth of company stock at about half price. Of course, I have to pay taxes on the free half, since it's income.
-------------------- Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ (•_•) <) )~ ANTIFA / \ \(•_•) ( (> SUPER / \ (•_•) <) )> SOLDIERS / \
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ashfiken
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Baby_Hitler]
#25951202 - 04/23/19 04:29 PM (4 years, 9 months ago) |
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Nice! Are there any fortune 500 heating and air companies? (jk) We get some lame 401k options.. I dont make enough yet to contribute and still knock out my billz..hell id prob open my ira instead if i made 10 bucks an hour more than now.. And say fuck that 401k
-------------------- hmm... "I'm naked and fearless... And my fear is naked." "life isn't worth living without the threat of death" "I got my plans in a ziploc bag, let's see how unproductive we can be" "nobody lives their lives fully except for bull fighters" My Trade List
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SirShroomsAlott
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Baby_Hitler]
#25952642 - 04/24/19 11:27 AM (4 years, 9 months ago) |
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Quote:
Baby_Hitler said: My employer, a Fortune Global 500 company, just had their annual employee stock buy up. I got a little over $4000 worth of company stock at about half price. Of course, I have to pay taxes on the free half, since it's income.
I might be mistaken but wouldnt you only owe tax once you cash it out since the prices of the stock can vary until whenever you do?
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Baby_Hitler
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: SirShroomsAlott]
#25956005 - 04/26/19 03:47 AM (4 years, 8 months ago) |
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Quote:
SirShroomsAlott said:
Quote:
Baby_Hitler said: My employer, a Fortune Global 500 company, just had their annual employee stock buy up. I got a little over $4000 worth of company stock at about half price. Of course, I have to pay taxes on the free half, since it's income.
I might be mistaken but wouldnt you only owe tax once you cash it out since the prices of the stock can vary until whenever you do?
That, too, but the part that they match and the discount are like a bonus.
-------------------- Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ Ƹ̵̡Ӝ̵̨̄Ʒ (•_•) <) )~ ANTIFA / \ \(•_•) ( (> SUPER / \ (•_•) <) )> SOLDIERS / \
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25956310 - 04/26/19 08:33 AM (4 years, 8 months ago) |
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Circling back to the CGC and NFLX as my focus from my last post.
CGC is expanding to the upside. Caught this one in the $42's with a core position of January $40 calls. We are now sitting on $50 and I have been trading around the position with shorter dated June $45 calls, which I have been in and out of, and added to at the open again today. Very constructive pattern, and fundamentally attractive as a dominant cannabis operator in an emerging industry.
NFLX teased a breakout earlier this week. Earnings are in the rearview so that wildcard has been taken off the table for the time being. It fell back into the top of its range and is showing signs of bouncing this morning. Long some May $365 calls with a stop at $365, meaning that this morning's bounce right above the stock's 20 day moving average should hold if this is going to have near term legs higher. I prefer to play this one on shorter dated contracts because I am expecting another attempt to breakout soon, and if that doesn't happen, I'm not interested in waiting around in this one because there is a lot of competition in the streaming space and NFLX's cash burn is going to be very high this year as they continue to build content.
Overall, S&P continues to hang around its all time highs. I think the expectation should be for sideways movement, which sets up the scene for more specific trade selection. GDP numbers came out hugely positive this morning, which is a good thing, but, oddly, can also be construed as a bad thing depending on how market sentiment relates to the strong numbers influencing odds of a federal rate hike. If there is a perception that the Fed may move higher (and the funds rate has already been moving independently toward the top of its target range this week), that could be cause for a pullback in the market.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills] 1
#25966218 - 05/01/19 12:21 PM (4 years, 8 months ago) |
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I took some of my CGC trading position off the table today and would look to reload on a retracement to ~$48 (or a breakout above $53), and haven't touched my core position held via January $40 call options, which are now up better than 80%.
NFLX is beginning to work nicely and looks to be reattempting a breakout move to the upside that it couldn't quite hold last week. Kind of hard to buy up here, but it is performing well and I suspect it won't be long before this thing is over $400.
I added a couple of new names this week. Some PANW near today's lows. This is a high growth company in the cyber security sector that has been consolidating since blowing out earnings in late February. Still a month to go before their next earnings report, and I suspect the stock will begin to move higher in anticipation of continued impressive growth before then. Bought May $245 calls, which are fairly short dated since I intend to be out of this before earnings, and they're already up a cool 30% on the day.
Also added LMT yesterday, and added to the position today. This one reported blowout earnings last week and looks set to break out of this "bull flag" pattern on a move above $340. Long via June $330 calls.
Market just stubbornly grinding higher. Kinda tough to buy, and I am keeping my positions sizes small and stops tight, because when things seem so "safe" in their steady march higher, that's usually when you're about to get your ass handed to you. 
Discipline trumps conviction.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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sh4d0ws
LSx


Registered: 02/26/08
Posts: 12,086
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#25967210 - 05/01/19 11:13 PM (4 years, 8 months ago) |
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NFLX 
I bought some of that during the dip back in Nov/Dec
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