Chart Time!

NTRI, Nutri-Systems took yet another tumble after the bell and already 50% of the 32 odd million shares outstanding are sold SHORT. Someone is making some bucks $$!

Look out for BIDU Earnings after the bell on the close of Thursday October, 25, 2007.

The financials have taken a serious beating, I mean you could have shorted any one of the brokerage houses and made a nice profit, Bear Stearns seems to be holding well down near the $109 level where all the big Billionaires are buying shares as a Value play. BSC, spiked up to the $130's on the rumor that Buffet was looking to invest and yet tumbled right back into a range bound trading area.

Here are some interesting charts I was reviewing:







Thanks,
More To Come,
Cal

Nice Plays and New Ideas!

From my last post I shorted TIE & OGE at their 50SMA's. I covered for a couple hundred dollar profits on both stocks, no substantial movements downward, but a pullback nonetheless.

Since, BIDU has broken out on strong volume and taken off for the skies! As of right now the stock is looking ripe for a pullback, and that's exactly where I'll be buying Call Options when this occurs. The previous resistance of $220 will certainly hold as support if the stock will even dare trade that low. Here is the chart I last posted, compared to where it is now, and my recommendation was to watch for a high volume breakout or a bounce against resistance downward, although the former was achieved.




Also my favorite pick that I've been stalking for a SHORT is NutriSystems (NTRI). The stock just couldn't muster up enough buying power to push past it's 50SMA and try to fill an earnings GAP Down from a few months before, perfect to short with relatively low risk, with a great reward profile. Take a Look!


I was a buyer of the OCT $55 Put Options as well as the $45 strike for a more aggressive play. Today the stock was down huge, to the tune of 12%, with the options spiking up 150% and 95% respectively. My Virtual Trade transactions consisted of:

September 13, 2007:
Buy 50 NTRI OCTOBER $55 Puts for $2.65 per contract (.NSIVK)
Buy 50 NTRI OCTOBER $45 Puts for $0.85 per contract (.NSIVI)

Sell 25 NTRI OCT $55 Puts for $4.70 - Profit $5,125
Sell 10 NTRI OCT $55 Puts for $5.80 - Profit $3,150
Total Realized Profit: $8,275.00
P.S. Holding remainder 15 contracts currently priced at $6.15 (unrealized - $5,175.00)

Sell 25 NTRI OCT $45 Puts for $1.50 - Profit $1,625
Sell 10 NTRI OCT $45 Puts for $1.70 - Profit $850
Sell 10 NTRI OCT $45 Puts for $1.50 - Profit $650
Total Realized Profit: $3,125.00
P.S. Holding remainder 5 contracts currently priced at $1.55 (unrealized - $350.00)



I've been trading virtually a lot lately to test strategies and gain confidence in the ideas that I'm solidifying with my research. I use Virtual Stock Exchange, Virtual Stock Exchange to buy and short stocks in individual portfolios and also CBOE Virtual Trading Tool.The CBOE has a brand new trading tool which is ABSOLUTELY AMAZING! It's powered by ThinkorSwim and also Prophet.net, Tim Knight's former website in which he developed and then sold.

Shorts, and Possible Breakouts

I'm shorting Titanium Metals (TIE) on the basis of it tagging it's 50SMA (simple moving average). The stock itself has been weak, relatively dampened volume, and it crept up right to it's 50SMA to the penny. My observations are that it will decline from here on weakness. I'm buying the September $30 Put Options for $0.35 cents per contract.


Baidu.com (BIDU), one of the tech power-house stocks that is up there with Google, Apple, and Research in Motion (RIMM). This stock has been on a roll lately ramping up nice percentage gains and today it popped right up and tested it's resistance level of $219.25. It briefly touched $219.90 before coming back down to earth, but the volume was above normal which is a good sign of buyers in the market and it could quite possibly break-out to new levels. This is one I would definitely be watching for a false breakout, and/or test of resistance, or a full fledged breakout to new highs since the tech sector has been on fire.



I'm also shorting OGE Energy Corp.(OGE) as it tagged it's 50SMA and has been very weak as of late. The volume was sub-par which tells me this run won't last, the buyers aren't there, and it's going to fall, TIMBER!! I'm shorting the stock outright vs. buying PUT Options. The Open Interest for the September $30 Put Option is "11 contracts", wow talk about lack of liquidity.

New Post of Charts

The 190 Level is holding as support for Goldman Sachs. Anything under $200 for this company is a great buy, so why not buy $3 up off major support as a long term play? If I were going to buy, I would stalk the OCT '07 $210 Call Options (.GPYJB) currently selling for $8.20 a contract ($820)and try to get them for even cheaper, if the bounce ensues
.

Get out of the energy sector! These stocks are still in sell off mode from their highs. I mean one day they're hitting year highs and a couple days later names like VLO, CHK, BTU, and XOM are being sold off.



A nice short canidate for a GAP Fill Play would be Citrix Systems (CTXS). In a weak market you can trade either of these 2 ways. Find the weakest stocks blowing past support and short them, or find the high fliers that have Gapped up on possible earnings news, and are trading right above the GAP, once it's broken there is almost a certainty it will be filled.



FoxHollow Technologies (FOXH)

Late Day APPLE Breakout..

I've been finding out that when I do my daily activities and come home around 2:00 during the afternoon, I haven't been glued to my screen all day searching for trading opportunities and I don't really have a bias to to whether the market is going up or down. This past week I've made some very profitable trades coming in late and reading my charts and volume trends. I always notice there is a sell off before lunch usually because traders don't want open positions while they are stuffing their face with caviar and champagne. After the noon swoon, as Dr. J, from OptionMonster.com calls it buyers usually kick in and buy into the mid or late day session (usually, not counting every day).

There are great trading opportunities when you see a stock testing it's day high on good volume, and keeping up near the top. All you have to do is watch the major indexes and if they follow suit and break higher then your stock should immediately take off, no hesitations, because that means buyers aren't prevalent and sellers could take over considering it's at the day high, and all your longs are now green.

Todays trade:


I grossed $363 on the trade scaling in on 800 shares and scaling out for a quick trade. Remember watch that volume, it is key!!!

Quick Scalps

The market sold off in the last Hours of Trading, so I decided to short the most volatile stocks as they would not hold up under market pressure.
In my observation the DOW Jones Industrials were leading the way today, as they sold off so did the other indicies.
The NASDAQ seemed to be down the most on a percentage basis, so I shorted Apple, and RIMM in the last half hour for quick scalps, in and out.


Today's Total: $500.00 even in 30 minutes, I'll take it.

Apple Short:



RIMM Short:

RIMM Hits New Highs

courtesy of www.zacks.com

Original article can be found here.
5/22/07 2:44:25 PM
Research in Motion (RIMM) High on iPhone? -
Checking in on today's list of newly-tagged annual highs for Nasdaq-traded stocks, Research in Motion Limited stands out as the biggest point gainer. The Blackberry maker saw its shares peak at $159.57, though there aren't many headlines to explain today's jump. Over at BloggingStocks.com, Brent Archer suggests today's rise can be chalked up to a competitor's product offering - Apple's yet-to-be-released iPhone.

Archer suggests that RIMM's Blackberry is a cheaper version of the iPhone, and consumers seeking to upgrade their mobiles may favor the tried-and-true Blackberry name, and wallet-friendlier Blackberry price tag, over the pricey-and-unproven iPhone.

It's an interesting theory, especially in light of the fact that Apple also appears on the list of stocks hitting new annual highs today. (That terrible noise you hear is the sound of Mark Fightmaster's teeth grinding.) However, it's true that RIMM has strong technicals to back up today's surge. The shares received a boost upwards from a bullish cross of its 10-month and 20-month moving averages last August, and has maintained its position above those ascending trendlines since. Support at the 120 level has also held firm since late last year.

With 13 "hold" rankings from various brokerage firms, RIMM also has a lot to gain from potential upgrades. Look for RIMM to rise again if Apple's latest "i-" offering fails to captivate consumers.

WIRE Buy Point

WIRE, sitting on 200 Moving Day Average, Resistance turned Support, Nice entry point.

Trading Apple Options

Today I hit a double on the AAPLE MAY $105 CALLS, buying in at $1.42 and selling out at $2.85. what a ride it was! I knew the consolidation mid-day was just masking the ultimate breakout we received after the FOMC announcement. There was a pullback towards mid-day support and it didn't break that level, so I knew the buyers weren't panic selling.



100% Gain in 2 trading days
CalTrader

Chart Reading...

Fed meeting is coming up and equity investors seem like they're in the duldrums. We sell off in the morning and catching a market hiccup only to head higher and close almost unchanged 3 points.

Let's look at some charts and see what they have to say...
What's been on my mind lately is Research in Motion (RIMM), this stock has been on a tear these last few days. I have a few theories from news events and market conditions. Initially I expected RIMM to tank and touch down on some serious support, but then the NASDAQ had been up 8 points here, 16 points there, so of course RIMM will follow suit and advance higher. First off the Canadian market has been up, and RIMM being a Canadian stock will be lead by the sentiment. Also, Motorola (MOT) failed to accept Mr. Billionaire Investor Carl Ichan as a board member who would try to turn things around for the best. This indirectly affects RIMM because it means less competition, and therefore more sales.



It is approaching 52 week high levels at this point, in which it has always turned down. I would wait to see if it breaks out above this $147.50 - $148.00 level. If it fails to breakout, it would make as a prime SHORT canidate, especially if the market gets a nice pullback. Add it to the watchlist.

OIL! Very weak, as of late, but of course the conspiracy behind Nigeria and the terrorist attacks driving the prices higher, hm now I wonder if they get long oil futures in a highly funded brokerage account before they hi-jack rigs, and set off bombs on oil fields? I guess we'll never know! But the world sure does know about the couple in Hong Kong that profited $8 million USD from the Dow Jones (DJ) Deal!! The SEC has frozen their accounts, big whoop, it's RED CHINA! Give up!

Here are some of the oil, and energy stocks I'm watching, look at which are hanging near their moving averages and which have pulled substantially higher!



Peabody Energy (BTU) has a short term chart which in my opinion you could short the pullback before you buy on weakness and put on a longer term position. One would be looking for BTU to take out that almighty $50 level in order to advance higher. Check it..

Back With A Bang!

Today was a great full day of trading multiple contracts on different entities. First, I noticed the lack luster strength in the DOW this morning, and watched oil closely. One thing I notice with oil is that there are tremendous swings. It will go up and up and push higher than you ever thought oil would go, and then rapidly descend during the afternoon. I have heard of many fortunes being created through the trading of oil and it's counterparts.

Research in Motion (RIMM) was also being stalked by me today as the Upgrade this morning can cause a significant GAP UP, and any weakness will make it fall like a knife, as it did when it hit resistance twice today..

I originally decided to roll with the RIMM - $125 MAY Put option, but it wasn't responding enough to the price fluctuation, because it was so far out of the money and the delta was only a -18.0 vs -35.4 with the $130 MAY Put option. I bought the $130 Put option after realizing this and thus, created a Vertical Spread which I exited 1 leg at the end of the day for a 20%+ gain. Amatuer, I know, but I caught it, and was very profitable.

I love buying RIMM Puts, I've seen them double in 1 day in my portfolio. Who else in the world can show you how to double your money in 1 day? I don't know of very many sources. Hm, Las Vegas? Go for broke!



I also cashed in on my Chesapeak Energy Calls in which I bought nearly 4 months ago, mentioned here Long Term Oil Calls. I bought the JULY $30 CALLS @ $1.85 and today I sold them for $4.6, a 140+% gain in 109 Trading Days.







More to Come!
-CalTrader

Easter Time

Happy Easter to everyone. I haven't been posting a lot because I'm only holding a few positions for the long term. I have a Vertical Debit Spread on CHK with the 27.5 and 30 Call Options which have been behaving very nicely with this run up in oil & natural gas.
I've been working mostly on real estate to expand my general portfolio and outlook on life. More to come on this topic...Again thanks for visiting.....
-CalTrader

Hedge Time

Make sure you hedge your portfolio if you're a trader of stocks. A trader would be defined as one who buys and sells stocks using a holding period of less than 6 months. Long term investors just see this as a healthy pullback and a suitable time to add to winning positions as fundies have not changed just fear in the market.

Ways to hedge your portfolio....
If trading an individual stock, you could always buy cheap put options which are out of the money dated out 3-5 months just to hedge the short term losses that will occur if the fear on Wall Street Continues to rise and stocks get temporarily knocked down.

One could buy Index options such as the S & P 500 Index, and use SPY Puts.

There is always the small cap route which seems to take more of a punishing while the market corrects, and this would constitute buying IWM, or Russell 2000 Put Options.

Correct my opinion if you disagree but when trading stocks outright, you're limited to the ways you can protect yourself from fall outs. For example, you buy stock XYZ and it's trotting along nicely in an upward trend, and yet you have no downside protection, so you decide to short sell the same stock.....you're counteracting the gains with losses, because when one goes up the other goes down on a 1:1 basis, with no leverage involved.

The whole point of using stock options is to provide cheap risk management, while simultaneously using leverage in a productive manner. It serves it's purpose well.

Of course there are inverse stock relations of certain sectors that you could use to hedge, such as buying gold if the dollar is weak, if the stock market is down you could always buy (LVLT) which is levered to the bond market which almost 90% of the time trades inversely to the market conditions.

Some people recommend playing the Futures market to hedge a portfolio. I would stray from this idea, I've learned from personal experience that the Futures market can be very volatile and cut-throat. It's trading a Ferrari paced financial vehicle where only the quick survive in the short term and only the patient survive in the longer term. I must say that you have to have a large threshold hold while trading Futures and what I mean by that is, with Global Futures there is a parameter you can set to where if you lose more than a certain amount in 1 day all of your positions will be liquidated, same goes for gains, but hey who would want to cash out if they were already up to their neck in green? One's portfolio with even 5-10 contracts could easily fluctuate $1,000's of dollars each day. Just something to ponder...

I've decided to take the plunge and buy the dip. I'm buying longer dated S&P SPY Calls. A proper hedge would be to sell short term out of the money call options, or even buy cheap March 2007 Put options to cover your butt in case of another massive sell off, who knows what this market will do....you can only be prepared....just like the hedge funds who had $VIX Call options and made $100,000's (hundreds of thousands of dollars) in 1 day while everyone else is bleeding like a fish...
More To Come,
CalTrader

Did someone flush the toilet?

Did I do that!?

Well I'd hate to be a bullish cherry on a day like today's tree, so I'm surely glad I stuck to my shorts and bought puts, easily doubling them up to 100%+ on a day trade.
We've all heard this and that and, "oh the market needed a breather" but honestly could we just go straight up for 6 months? It's almost like every investor in the world has made money over the past 6 months nibbling here and there on positions to realize gains, but what about the trillions of dollars being poured into our market, hey someone had to take a flushing in order for someone else to take profits.


I feel sorry for all those poor saps who ran up RIMM yesterday to the tune of 5% just to get clobbered another 5.5%
And what about all those metals guys, sheesh TIE took a spanking outback by grandma to the tap of 8.5%



On the bright side of things, Cramer recommends buying Google around current levels. $440 to $448 based on growth and valuation, and boy did those call option holders get crushed today. I honestly don't know how a day-trader could lose money on a day like today where as soon as I turned on my tv this morning at 9am the Futures were showing a 98 point decline, while china had sold off over 8%. Hope you were on the right side of the trade.




Even if you were a long term investor you could have easily hedged your investment with stocks that trade inversely to the QQQQ (Nasdaq 100 ETF), it's called the QID (UltraShort QQQ ProShares)

My trade of the week was with the March $135 Put option on RIMM, which I purchased yesterday for $1.5 and sold today for $3 even. The put went all the way up to $4.40 and would have tripled if sold at that level, hey we can't get em' all and we certainly can't be greedy in this market, you'll chop off you're own hand, trust everyone with experience, take your money and run.

Market Bitch Slap..tbc..

Rimm Hits New Highs

It seems as though RIMM finally made it's move, and busted to new highs today when it was upgraded by RBC Capital Firm, stating:
"Industry contacts suggest a spate of pent-up demand for the handheld device Research in Motion partnered with Qualcomm Inc. to make in the second quarter..."

The stock sure took off today tacking on 4.8% and only slightly dipping during the NASDAQ's slight sell off mid-day.

Stock that I am personally watching are all the energy and oils, and I am still holding calls dating out to July 2007.

Jim Cramer keeps raving over the fact that Iran and Iraq are running out of oil to dish out to America in the short term and so drilling and contracts will surge. He keeps recommending Halliburton, &Transocean Inc., stating: "Transocean (RIG) is a fabulous company that keeps beating numbers. Transocean can't get out of its own way."

Hey

I haven't been trading much that's why there are a lack of post. I've got some good stuff coming up so stay tuned, this is only a short sabatical. I'm actually working on my own domain name and newly contructed website and blog.

Thanks
CalTrader

Read Away!

I've been spending most of my time reading market books and studying different strategies that have been written on how to trade the markets. One I just finished is, Options Made Easy by Guy Cohen. He basically goes over a lot of option strategies, and tells you the ones in which the risk/reward ratio is unfavorable. He specifically state which strategies he wouldn't implement and I now see why. I personally am warming up to the collar strategy & spreads, I like the reducded risk profile without sacrificing potential reward.

One thing that is most vague when it comes to published articles is, arbitrage. You see the definition is, "a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price."

The one thing you'll never find out is who is doing it and where because the secret and the profits lay in the exploit itself. Of course I published a post last week regarding 1Option's neat article about buying options and then shorting stock creating a risk free trade in which market making firms execute to make money.

But there is more to it....I realized that I had indeed participated in a type of arbitrage a few years ago while in college to make money. Arbitrage doesn't only apply to the stock market, it applies to any field in which you can exploit an inefficiency for profit with no risk. The entity in which I was the arbitrageur was, AOL Instant Messenger Screen Names....I small business trip that lasted for a while and offered about a $3,000 profit for 1 month's work.

While reading, Trade Your Way To Financial Freedom by Van K. Tharp, the book vaguely, and I mean by a hair of a kitten, barely mentions the topic & a brief interview with an "arb guy" named Ray Kelly. He spends his whole life researching and studying markets to try and find arbitrage, and he says time is of the essence and if you can't get both parties to agree to conform to your business objective the profits quickly dwindle away by the second, because that gap will close, and you'll be on to your next venture.

Check out Wikipedia's numerous examples of arbitrage, I especially like the one where you buy a PS3 for $600 and sell it for $30,000 on EBAY, shwing!

I made out nicely today in the futures market profiting from that nasty fall of which I was stalking all day...on the Dow Jones (YM)


A chart & stock I like is NYX:


Yesterday I purchased the RIMM FEB '07 $135 Puts for $1.20 a contract and sold half for a loss yesterday for $0.70 a contract and the other half for $3.50 today, a 191% gain on the latter.

Welcome Back I Say!

Thank you for patiently awaiting the wonderful post I'm about to unveil for my day trading, option scavenging, investment guru audience! (ok so maybe some of you just started putting a couple bucks in the market like I did 2 years back...)

I've been doing some serious soul searching lately and I'm going to make this the personal part of this post. I've been trying to be the best trader I can be, a scavenger of information as soon as it hits the wire, an alert....all out hacker of the market, no limit hold em....die till I win with the money in my account and not yours mindset. I've been searching, testing, studying, reading, and taking on the most challenging battle I've ever fought. I believe this to be the best and most informing venture I've ever ridden. When I got into this mindset, I knew I wanted to form an all out blitzkrieg on the market...a self fulfilling adventure to turn my mind into a stone wall of psychological strength.

Now on to market stuff....
My Caterpillar Inc. (Public, NYSE:CAT) call on January 12th, 2007 is now up 231% on the FEB $60 Call Option. Remember Me? I called for long term support, and it bounced nicely. Seems as though cyclicals are definately back in the groove..

My long term Energy & Oil positions are boding well. In this post Here I said it would be a great idea to start buying up energy stocks as we all know oil wouldn't go any lower than $50 a barrel, come on Saudi Arabia loses billions each day oil goes down $1 buck..


Some random quips that have been on my mind lately:
The Metals sector is hot! (one of my first daytrade fetishes, Titanium Metals.

Corn which is eventually made into Ethanol has been on a tear, scalp! (ADM, ANDE, PEIX)

Stay away from Apple Inc., at this point in time you will get burned like a hot day in Miami while wearing baby oil..

RIMM options are a daytraders dream come true..30% a day is my forte

QQQQ options move slower than your grandmother's driving..

Follow oil & gas inventories, they make for easy money on the stock trading side...(BTU, CHK, DVN, CNX)

Make the best $69 a month investment of your life and follow Phil over at, Phils Stock World, he teaches me about trading the markets, how oil really works, and even manipulation in the market is easy to catch when you know what to look for..He only trades options, and always hedges them to even out the risk/reward, plays on momentum and sells into the rallies...don't we wish we all traded like that..?
*-Some of my favorite insights are:
"If I own $100Bn worth of energy stocks in my fund, what do I care if my energy trader loses 10% buying $1Bn worth of NYMEX barrels this month if it boosts my portfolio 5%? There are hundreds of funds with the motive means and opportunity to do this - all it takes is one dishonest fund manager - thank goodness there are none of those!"

"Don’t forget when I sell a contract, I buy it back when I feel like it (in a virtual sense). So If I sold 1,000,000 shares of $500 calls (10K contracts) for $22 yesterday to pick up an extra $22M against my $500M position, all I have to do is sell off 10 or 20,000 shares here and there to drive the price down so I can buy you out for $7, a $15M gain for me. If I shave $10 off Googles price in the process, what does that really cost me? At most $10M. And if I know the sell-off is BS because I’m causing it, all I have to do is wait for the other suckers to panic and then buy back my shares and cause a buying frenzy the other way.

Not that anyone would ever actually manipulated the markets for personal gain of course…"


I would like to say that this is one of the toughest businesses in the world. You fight for every dollar. Anyone who ever says playing the stock market is easy and money just flows like wine should be smacked. Wall Street is vicious, and there are hungry hedge fund managers ready to eat you alive. A great story of success goes to Steve Cohen, ever heard of SAC Capital? Baidu.com? Yea well he owns a large percentage of the companies shares for himself. A self made billionaire. His first day as a junior options trader in the Arbitrage Dept. he made an $8,000 profit, and eventually was making around $100,000 a day for the company.


Well if you want to know what arbitrage is, it's one of the greatest things one can ever get involved with...why you ask? No RISK! No way, a no risk trade in the stock market you say, yes well you have to be set up to do it, like a firm on Wall Street. 1 Option gives a great example of what Market Making Firms do in ARBITRAGE Plays. I found it to be very very informative & interesting...because it's for the big boys.

Trades today included scalping RIMM & QQQQ options, and buying the dips in the Dow Jones Futures (YM), and boy did that pay off today, whew!! New All Time High!

I shorted TIE near the top for 2500 shares and covered for a couple of nickels as it came down....
More to Come...
CalTrader

Trades & Ivanka

Had a nice morning on the Dow Futures (YM).....took a shower and decided to draw my fib lines and test some retracements, well I gave back all the morning gains and switched over to the S&P 500 Futures (ES), needless to say, I was down in my Futures account today but up in my Options Account by a considerable amount. I could have done a lot more right today with the Indicies hitting all time highs today, but hey one can only live & learn, and then make his fortune.

I bought the morning dip on Research In Motion Limited (USA) (Public, NASDAQ:RIMM) on the FEB '07 $140 Calls and ended up 50% on the day with that trade.

Got an idea from Trader Tim over at Perma Bears R Us, for an idea on a possible Double Top on Martin Marietta Materials, Inc (Public, NYSE:MLM). His article and analysis can be found Here.

I won't be trading much tomorrow because I'll be attending a meeting in Charlotte, North Carolina, on investing in stocks, real estate and tax liens. Special Guest Speaker Ivanka Trump, whew! Knockout!


My long term Energy Plays on BTU & CHK are doing quite nicely sitting with respectable gains of 50% & 35%, dabbling In-The-Money.

I've got some GREAT LINKS to Trading Videos, You all will absolutely LOVE THESE!
Movies on the Stock Market
Option Trading Video
Software For A Visual on Stock Options
Buying PUTS, CALLS & LEAPS:
Option Trading Strategies by 888options.com
The CBOE Weekly Option Trade(Very Informative)
One of my favorite Weekly Market Recap Video Commentators