This week was extra busy as it was May Options expiration. This meant some extra time spent planning for adjustments/exits on existing positions that had May options set to expire. There were no newly added stock or option positions this week that made it to the weekend. As of Friday at noon, the short May 50 Call in $DDD was the only position that had options set to expire (and it did). All other positions have options for next week or further out.
Here is the Summary (I have added a G/L column which reflects price chance only from entry to current or booked gains – does not include Option piece gains/losses):
I like to look at a lot of different time-frames when doing chart review and today the 60 minute chart in $TSLA caught my eye:
A big up move post-earnings and now a much needed rest as volume goes into cruise control mode.
No matter what your bias or position may be, consider these few points:
- If you are long, protect these gains with a Stop or buy June 75 Puts
- If you are short, I would imagine you appreciate the rest here. You can buy June 80 Calls to protect against any more up movement
- If you have no position, what is the higher probability move here over the next few weeks?
- How much of the short interest has covered?
The $EEM ETF is widely followed and has formed a very interesting pattern in 2013: the Broadening Wedge or Megaphone. Here is the Daily chart to illustrate this:
Several things to note here:
- The lows in April almost saw RSI tough the key 30 level but since it has drifted up and is approaching the 70 level
- As price moved up in May, volume has declined
- The 50 Simple Moving Average looked headed to hook up with the 200 but is now curling back up
For some more perspective, let’s take a look at the PnF chart:
A print at 45 will set up for a Double Top Breakout. A bull PO of 61 remains.
For more information on the Broadening patterns, take a look here at what Bulkowski says.
An active week trading stocks but no newly added positions survive into the weekend for regular personal accounts. For Earnings trades, a long stock position in $INTU survived. For the Fab 5, $HYG held up well and remains in the basket.
The $JCP long stock position reacted well to 2 big pieces of news causing me to have to move up the Put strike for May. This also gave me the chance I was waiting for to sell some premium against the long position on 4/26.
The long May 125 Put in $DVA has offset the pullback in the stock nicely as it filled the Gap below on the Daily chart.
Here is a Summary:
I post a great deal of my trade entries & exits on StockTwits and Twitter but I like to summarize each weekend after I review the week’s efforts. I had an unusual number of stops hit this week so that is something that has me a little cautious moving forward in adding any new positions.
Newly added positions for this week that survived into the weekend are:
- $BAC I am long stock and own the April 26 weekly 11 Put
- $SNDK I am long a 1/4 position (post-earnings)
- $AN I am long a 1/3 position (post-earnings)
I did a recent post on the April Options work that needed to be done here so there were a lot of exits/adjustments made to positions.
Here is a Summary:
$PVH I own a May 115/120 Call Spread (April piece expired)
$CAT I am Long the April 26 weekly 80/85 Strangle & Short the May 77.5/85 Strangle
Options expiration for April is upon us & as usual I have several positions with premium involved that I need to tend to on Friday. Here is a Summary:
- $CRUS I own the April 24 Put
- $SPRD I am short the April 20 Call against long stock
- $BIDU I own the April 90 Collar
- $T I am short the April 38 Call against long stock
- $DVA I own an April Collar
- $FTNT I own n April 25/18 Put Spread
- $DSK Call Spread goes poof
- $COST Call Spread goes poof
- $PVH Short April 115 Call goes poof, own May Call Spread as remaining pieces
- $YHOO I own an April 25/22.5 Collar, likely to go poof
- $KSU Short 95 Put should go poof
- $AMGN I own an April 115/110 Collar
- $ONXX Short April 97.5 Call goes poof
- $CAT I own an April 87.5 Put
- $DGI I am Short the April 40 Call against Long stock
- $SYMC I am Short the April 24 Put (will get Put some stock, ok with that)
- $TSN I am Short the April 24 Call against stock
- $SPY I am short a 1/2 position of the April 153.5 Put against Long May 155 Put (a Hedge)
I decided to take a blank chart of the $QQQ and create several different perspectives. A few of them provide a clear look while others just muddy things up even more. Let’s start with the blank chart first, no trend lines or support/resistance lines:
What we have here is the 50 & 200 Simple Moving Averages, Volume, RSI, and the MACD. The price decline with rising volume is worth noting. Now let’s do some crayon work:
I like this chart above the best as it shows a clean B/O (breakout) back-test, albeit back under the 50 SMA. You may not notice this but there are not many hollow Red candles on this chart.
So is the test at the 200 SMA below in the cards? What is your take? Comments welcome.
One of the important elements in trading that every trader must conquer is the issue of organization. Each person is different so this will present itself in many shapes and forms – but is critical that this be an important goal.
Whatever your trading process may be, there are some key areas you need to focus on in getting organized:
- The Watch-lists. Having a well curated list of stocks that you want to focus on for the coming week helps to take the pressure off of having to watch 100s of stocks.
- Current positions near a key area like Resistance. Do you have Long positions that are close to an area where Bears may show up? Do you have a plan?
- If you trade Options, do you have a list of positions that are due for expiration in the coming week? Do you have a plan for each?
- Your Desk. Is it organized for the way you work/think?
- Your Computer(s) & Internet Infrastructure. Are these invaluable/necessary tools in good working order? Are you putting off a needed upgrade for some reason?
The above are just a few areas that I am highlighting here – there are surely more to consider. What I would like to do now is drill down on the subject of the Watch-list. For those that follow me on twitter, you know that I keep several watch-lists. I try to be very descriptive with my watch-lists so that it is easy for me to determine what needs to go in them – and what I want from each list.
A new watch-list that I have started this year is called the Submarine Basket. I keep 10 stocks in this list:
- Beat Up stocks. I want quality names in this list, but are in a pullback for some reason or maybe a late Stage 4.
- Here is what is currently in this watch-list: Submarine
- In my trading reviews over the past several years I had found that I traded a lot of stocks in this mode – so it only made sense to create a watch-list that contains quality stocks that helps me focus on finding/trading this type of setup.
Just one way to help me stay organized and keep me focused. Finally, we are heading into March Option expiration so expect some good surprises as usual.
Enjoy the rest of your weekend.
Most of the activity in my personal accounts this week was dealing with Option pieces and/or preparing for March expiration next week. I did add an $AAPL Long position to my long-term account along with an Option Collar (current long position is 2nd entry this week, building a cushion). I also re-entered long $EWW in the long-term account.
The $CRUS position looks to be finding a soft floor for price and I will need to deal with the long March 29 Put by Friday expiration. Here is a Summary of March Option pieces that I need to deal with in the coming week:
- $CRUS long stock, long the March 29 Put, short the March 22 Call
- $FTNT long stock, short the March 25 Call
- $NTRI long stock, short the March 9 Call
- $SPRD long stock, short the March 18 Call
- $AAPL long stock, short the March 450 Call
- $AIG long stock, short the March 40 Call
- $DVA long stock, own the March 120/115/105 Collar
- $KR earnings trade, long stock, short March 30 Call (other pieces further out)
- $DKS earnings trade, short the March 53 Call (other pieces further out)
- $VXX short weekend trade, long the March 22/24 Call Spread
Here is a Summary on my personal account positions:
I executed an average amount of day trading/post-earnings trades this week (from a # of trades perspective) but I end the week with only one new position – and removed no existing positions from the prior week. I made a few adjustments to Option pieces on existing trades.
Here is the Summary:
The March 29 Put in $CRUS continues to protect on this downside move. The $DVA position is capped by a few pennies as we head toward March Options expiration.