HI Financial Services Mid-Week 07-08-2014
“It is not whether you are right or wrong that is important, but how much money you make when you are right, and how much you lose when you are wrong.” – George Soros
Look for updates this week or probably closer to the end of the week for SNDK, BBY and others. Reference the Signal for expectation that was given out on Monday Afternoon.
MY BBY Exploding collar Trade
Looking at the trade:
July 14 25 long puts (Right to sell @ 25) are going to expire worthless in July – 2 weeks
I’ve been shorting put against the long and I also expect to see those expire worthless as well
I have Aug14 25 long calls that I paid $1.70 for and currently worth $6.75 = Profit of $5.05
BUT I have Jan 15-16 28 Short calls that I took a credit of 3.25 current worth $6.50 for a $3.25 loss
Which means my real profit is in the stock which is 25.08 currently worth 31.15 for a $6.07 profit per share
What has been happening so far this week?
We broke above 17,000 on the DJIA and now we are testing it or building a base at 17K. I figure we may test it three or four more times as it becomes a psychological and technical level of support. Today action showed me a profit taking as we hit a round numb on the DJIA
Where will our market end this week?
I am expecting a flat week to very slightly down week in general. AA has been the earnings season “starting gun” but Earnings really don’t go into full swing until next week. We also have the Fed minutes that people are going to be scrutinizing for any indicator when we will see any increase in the interest rates. I don’t see any real catalysts this week in regards to economic reports or bell weather earnings. WE are going to have volatility as we build a base around 17K on the DJIA and 2000 on SPX
DJIA– Still bullish with a little pullback which usually indicates another leg up. Off the RSI overbought line, Held the 16,900 round number
SPX – Off the overbought RSI line. Held 1950 round number, Higher lows, low volume on the MACD
COMP – Off the overbought on RSI, Did not quite hold the round number 4400, and low volume for MACD
Where Will the SPX end July 2014?
I think we are going to test the 2000 on the SPX and test 17,000 on the DJIA. We might be slightly higher but I would say a 1% up month.
My guess is 2000 on SPX, 17,100 on the DJIA and 4500 on the COMP
What is on tap for the rest of the week?=
Tues: JOLTS – Job Openings, Consumer Credit
Wed: MBA, FOMC Minutes
Thur: Initial Claims, Continuing Claims, Wholesale Inventories,
Fri: Treasury Budget
Tues – CN: CPI, PPI
Wed – JP: CGPI (PPI), Machine Orders,
Thurs – GB: BOE Announcement
How I am looking to trade?
I have let stocks run and now I am in the process of protecting stocks for this earnings season.
I am only looking out two weeks to start to collar or protect those stocks before their earnings.
That means you need to build you earnings list
AAPL 7/22 AMC
BIDU 7/24 est
BBY 8/19 est
CLDX 8/6 est
D 8/6 est
DIS 8/5 AMC
F 7/24 BMO
FB 7/23 AMC
LNCO 8/7 est
MEI 8/28 est
MS 7/17 BMO
NVDA 8/7 est
SBUX 7/24 AMC
SNDK 7/16 AMC
SLB 7/17 AMC
TSLA 8/6 est
V 7/24 AMC
VZ 7/22 BMO
ZION 7/21 AMC
AAPL placed in the morning and the afternoon
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