Irrationally mad decision making to obtain the American Dream.

put options

My advice – take the intraday 30 minute smart money trade – Apple (AAPL) Put Option

Okay, today was a roller-coaster ride trading Apple (AAPL). At around 11am I saw it down -5 and everything in me said trade it. By the time I got in at 11:30 it was already down -8.5 going in the direction I wanted. I purchased Feb 475 Puts in-the-money at $7.60. In less than 10 minutes I was up +$700 at $9.40. So this is the point where if I was highly intelligent and disciplined I would have took the $700 smart money off the table IMMEDIATELY. I don’t even earn this in a week, actually I don’t even earn this period because I’m currently unemployed. I was watching the charts and within 5 minutes the trade was already going against me and I was in a negative position. All the big charts scream SELL on Apple and were forming bearish looking technicals. I almost sold around 12:30pm for almost -$1000 loss! Yes, you heard that right up $700 then down $1000 probably in no less than an hour. So, I felt it would be my job today to sit and stare at my computer screen all day and only get out if it went above the major downtrend. Well it never did. It was just light afternoon trading going up. As soon as the real traders got back from their lunches AAPL immediately started to trade down again. I’m glad I at least had the patience to wait it out but I’ve waited trades out before and lost thousands of dollars so I prefer not to.

Guess what? Although Apple traded -12 points down for the close I decided to be patience and stay in the trade. From the research I looked at from the big trend and every time there is a big red candle at the top of the 3-5-20 day close a second down day should*** follow. Now what I didn’t take into effect was the Presidents State of the Union Address tonight. SHIT. But it seems historically the market pulls-back after it for Obama so that would be in my best interest. I’ll be watching AAPL closely likely to jump and then fall and sell out once it seems to hit some residence. It hit a new low today and under $468 which is why I stayed in it. I’m up +$760. If it continues to fall tomorrow and the entire market doesn’t rise up a lot then I should be up +$2000 or sell immediately if I’ve got the guts to.

apple AAPL

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Up +$7000 or 350% since August 16th. Trading stock options on AAPL & PCLN

I took $2000 of some money I got back from my school and felt the timing was ripe to trade some stock options. During this time I was deep into renovation a rental home and in full force finishing my MLitt in Film Studies dissertation project and essay. This was hardly the time to be trading volatile stock options on large cap stocks that move violently day to day. My main goal was to just earn enough to pay back, well everything, my total debt is around $130,000. I’m not afraid to say it. Most people hide it, but I hide nothing. I’m not proud of it but sometimes you make bad mistake after bad mistake or in my case I just consider myself likely somewhat handicapped in the entrepreneurial department. I would go as far as thinking I am mentally and business retarded at times making irrational decisions to achieve my American Dream – which now I know is definitely not greed for money but greed for personal freedom/desires (Which still cost money).

So here I am with $2000 to basically lose even though I need it for repair costs, credit card bills, yada yada. I see a great trade on Priceline Inc (PCLN) when I see it got crushed after a report on possible lower revenues. This stock has a solid cash balance sheet and great EPS/PE. I bought it around $559. I have been trading CALLS on it ever since and have done pretty well. Every time I get in it my main goal is to be out of it within 24 hours or less. For the most part I have achieved this. The other trade is with Apple Inc. (AAPL). I’ve traded some PUTS and CALLS on it. They have been mostly quicker trades the PCLN. For the most part if I wanted to I could be in and out of AAPL within 2-4 hours earning on average $500-1000. My last trade earned me around $3000. I’ve only done I believe 5 trades in the past 30 days. This is inline with Gary Williams trading rules to only trade 5-10 times per month maximum. I’m taking a break now so I can let my run cool and re-focus on my next trades. I am not as eager to trade as when I was 23-29 years old and I think that is because I am wiser at trading more now at 31 then when I began at a young 18.

I almost took my $7000 profit to buy a sweet badass 1965 mustang, but instead I settled for an ever cooler 1990 Bronco with a failing engine for $900 which I didn’t have to pull any money out of my trading account. Hahaha. Come on, just laugh! The back top comes off and it turns into a muscle jeep. My mom owns my loved diesel Jetta and I hope to get it back or just buy myself one once I have a more stable income. Currently I’m finishing my MBA, working on starting a mini aquaponics fish farm, trading options again, and among all this trying to now edit my first non-fiction book with a friend to publish and sell on all digital readers. So, I don’t know what my future of trading holds for me, but I do know I’m on a good run and I don’t want to give it up so easily.

Oh, if you are wondering about the Toke n’ Toss business ventures, well, it’s completely over. Now I understand why they say choose your partners wisely – marriage or business. Let’s just say this was another $5000 business lesson, but this lesson was one on one truck/stand vending for concert goers. Learned a lot, but learned the most that people that aren’t willing to budget and chip in on expenses should be left on the side of the highway as soon as they start complaining that a twelve pack of beer IS a business expense and YOU are going to pay for it because the partner doesn’t have any money.

See below trades:


AAPL, GOOG, & PCLN continue fall from peak after subtle expected pop.

So in my two earlier posts I first analyzed and came to a long waited gut conclusion with these weekly faster and bigger moves that the top peaks of a few fat stocks looked like they were ready to sell off. Particularly Apple (AAPL), Google (GOOG), and Priceline (PCLN). I predicted a pop after the quick fall on Monday for all three stocks to having a buying opportunity especially on AAPL Tuesday. On Tuesday and Wednesday the stocks popped up. Then I planned on Thursday into Friday, if I was correct about the possible new downtrend starting to begin, to show after the initial quick trade on Tuesday. Today, all three stocks got hammered except GOOG.

However, with GOOG I find an exception because it hasn’t moved back up as quickly like AAPL and PCLN. GOOG seems like it is a turtle slowly going down a hill whereas AAPL and PCLN are like college frat kids jumping off into deep blue lagoon abysses. 

After Wednesday I initially thought GOOG out of the three would have been the best practice trade to follow in and trade on real money, but after two seeing all three continue to fall I’d say it’s safe that all three are in for a short-term stock price correction.

Now on Friday even the MSFT did well in earnings I don’t think it’s going to affect my stocks. All three stocks will likely fall another 10 points into next monday.

Currently here are the 3 practice put options I have in play:
(bought on close of the 16th – the better trade would have been the close on the 18th)

AAPL 555 MAY PUT @ $20.44 / currently at $16.55

GOOG 610 MAY PUT @ $19.40 / currently at $19.50 (still likely the weakest and best put play)

PCLN 655 MAY PUT @ $20.50 / currently at $12.17

And I’m going to add an QQQ NASDAQ index put option due to how heavily these 3 stocks can weight on the QQQ index because it is ALSO at it’s peak high which has been squatting at the price of $65-67.

Buy QQQ 66 MAY PUT @ $1.42 (close of 4/19/12). QQQ’s are slow but likely the least amount risk out of these 3 larger options as seen just by the movement of the options except for Google because it hasn’t moved much only slowly falling. However, if GOOG continues to drift downwards it could have a sudden couple of big falls.


Markets jump on HPQ share buyback, but what about all the other bad news?

I’m a bit blown away how the market pops open so high, to trade higher, then fall, and finally to look like a last buy back in. The market sure is choppy for the fall time. The majority of the PUT positions I practiced on Monday actually sold out by the end of the day profitable 10-30% up then closing negative. Apple for instance – if you check out the charts it shows many doji-spinner stars showing indecision. The stock doesn’t know to go up or down, but from the fundamentals, 50-day MA, 200-day MA, and current trend it could be moving down much further soon, or at least this is what I believe especially during December.

The last 30 minutes the market shooted up then suddenly sold off I guess the last 10 minutes of that 30 minutes of the day. My predictions would be that the market will drop lower tomorrow if it was a quick sell off because the Fed’s say, “hey the economy still is having slow growth” + Oil going to higher levels + bad home constructions and sales + did I say unemployment is predicted to raise because of the slower growth. Remember when you have slow growth or slow sales especially in the resturant industry you need to start letting people off their usual shifts early. If the store is selling it can’t keep its workers on the clock if the sales are coming in to use the labor. This is just plain economical common sense. So it does make sense that unemployment should rise if sales are down, construction is down, retail sales are down, because employers should be cutting hours short or laying off workers.

Recession? Likely, but technology is still growing getting positive results. Retail is very much sold off way below 50-day and 200-day averages with favorable PEG scores even if earnings are slow (SHLD @ $111 and M @ $28). So I don’t think recession is coming yet, but cycles are starting to change. The Fed can’t keep cutting rates forever and will likely soon raise them probably next year to manage inflation because currently with super low rates we are generating stagflation with slow growth. I maybe wrong, but at least in textbooks usually after the 4th cut on interest rates then rates will start to rise again. Some Financial stocks are really favorable right now (GS @ $212 – PEG of .69 and BSC @ $93 – PEG of 1.10 and book/sales price of $86, it is almost worth its BOOK PRICE!)

As for my options. My DEC 125 AAPL Puts are down around -60%. Not good. It will probably be my last trade for a long time. So if it doesn’t work and Apple Inc. doesn’t fall then I think I will be just practice trading for a good year or until the entire market down trends with a firm trend and the indecision is gone and the decision to SELL SELL SELL in investors eyes will be common commentary on Yahoo! Finance’s frontpage.