Expected Move ~$4.00
It is starting to feel like the melt higher is beginning. Some of the growth stocks and sector leaders saw some nice moves on an otherwise flat day, meaning big money is starting to chase the performance that is coming. Could be wrong, but getting ahead of the move may be a nice way to play things.
Earnings season starts monday, so maybe a somewhat quiet week. Today we have factory orders at 10am and a market close at 1pm. A possible uneventful day.
Will position myself with some more calls for Thursday Green Gap day. PCLN provided a nice move yesterday, LNKD surged and held its ground, and BWLD was flat.
Will be looking for more positions in those today. I will have a write up on BWLD this week, as I feel this is the next stock to really get some legs. With CMG losing its luster, BWLD should be the one to reap the rewards into earnings late July. $100 calls should be a nice play.
Also watching AAPL for the possible break of $600, where i think $610 would come very quick.
Stocks to watch today:
ISRG PCLN LNKD BWLD SHLD BBY AAPL
I wont be around too much today, so if i dont see you have a great 4th of July(if your from the US)
On April 4th, the market hit a 4 year high as the $SPY touched $142.21. If you had told someone last October that the market would be up nearly 40% 6 months later, they would call you crazy. But that is exactly what happened from the 107.43 low on October 4th. Amongst all the negative sentiment, the market mysteriously found a bottom and rallied furiously, squeezing all the bears... the ones who watched the riots in Greece with glee, the ones who were hoping for someone else's pain to give them glory. We have seen this story over and over. The Eurozone debt situation is not a new problem. The market has been dealing with it for 3 years. We have seen this before, and it will not be the cause for a larger sell off in equities. May's decline has been somewhat orderly. The trading days have lacked the 1-2% swings we became accustomed to in August and October. This is no panic sell-off, its profit taking. Yes, the USD has been on a major tear, trading up for 14 straight days at one point... the most since 1985!
Looking at that data point alone, I woud assume the markets had a massive sell-off. Yet we are not even in 'correction' territory. It's buy the dip time for me. With the election coming, there is no way the market is allowed to fall any further. Well we shouldn't call it a market, since the Obama administration will pull out all the stops to ensure the "economy" is not the cause for Romney winning. And to make that happen, we will need to have a nice summer rally.
Best way to make money trading, is to be ahead of the curve. Here is what I am doing to ensure I am:
Expect some "buy the pullback" upgrade to come out on your favorite momentum stock. Stocks like Priceline.com(PCLN), LinkedIn(LNKD), Buffalo Wild Wings (BWLD), Panera Bread(PNRA), Chipotle Mexican Grill(CMG), Intuitive Surgical(ISRG), and Starbucks(SBUX).
Buy out of the money calls on those plays to maximize the impending short squeeze. The dumb sheep are the ones who are shorting it based on the chart, and will be covering when they start getting squeezed.
Second, expect some sort of China stimulus. They are missing the talks of their growing economy and want to be back in the spotlight. China can be the key for a nice recovery alone, and China sure knows how to manufacture fake growth to inspire folks to load up on China stocks like Sina.com(SINA) and Baidu(BIDU) as well as the oversold commodity stocks.
We will have more on our watchlist tomorrow, but we are banking on a nice rally coming in the next few weeks. By the time you blink, we will be back over the April highs. Most folks will be scratching their eyes wondering what happened. Here at OptionMillionaires we will be counting our profits.
Take a look at the chart below. Lets have a great week!!!