Tag Archives: Watchlist

FEAR!!!!!!!!!! Must READ or YOU WILL LOSE MONEY!!!!!!

Did the title to this blog post get your attention? I hope it did. Fear is a powerful emotion that can cause irrational decisions by typically normal folks.

Fear is a distressing negative sensation induced by a perceived threat. It is a basic survival mechanism occurring in response to a specific stimulus, such as pain or the threat of danger.

The market in May was definitely "distressing" to say the least. Its lacked the violent swings of 2011, but sure inspired retail investors to sit on the sidelines. It also encouraged money managers to put funds in low risk asset classes. We are only a few years removed from one of the great financial collapses in recent history, so it didn't take much to instill fear back into the market.

It tends to be moments like these that traders can find a bottom. Just when it looks like the rug is being pulled out and when folks are giving up and succumbing to the suppressing negativity.

Thats when we posted about our "LINE IN THE SAND" on the SPY. Since then, the market is up 8%. Now you will start hearing we moved up on "OVERSOLD" conditions and we are now OVERBOUGHT...

How can a retail trader succeed in such a volatile environment when opinions change like a 3 months olds diaper? Thats easy... follow OptionMillionaires.com (cheesy plug).

We have been a short term bull for some time and pointed out the run in growths stocks from Monday. The market was red, but we thought stocks like LinkedIn (LNKD), Priceline.com (PCLN), and Intuitive Surigical (ISRG) were market leaders and indicated a move higher short  term.

Well looks like our thesis proved correct... for now at least. We truly expect some type of move from the FED on wednesday to extend the twist three more months till September. Odd since thats when we think we can start playing puts!

The market has been pricing in a Black Swan event for weeks now. We are pricing in a $GREEN EVENTWhat is that? Well thats when all the folks start scrambling into equities for the FEAR of missing out on a rally past the 4 year highs hit in April.

Fear is a powerful emotion, and it will be the catalyst for a ramp higher in the next few weeks. FEAR of not making money, can be stronger then the FEAR of losing money.

We are betting on that and the FED to bring us our $GREEN EVENT. I guess time will tell, but it seems to be working out great so far. More to come tomorrow!!!



“The Bizzaro Jerry”

Hopefully as the 'sheep' retail traders/investors were changing the channel from CNBC during the last two weeks market ramp, they came upon a classic Seinfeld episode entitled "the Bizzaro Jerry", where everything was the polar opposite... Up was down, right was left, and wrong was right. We wrote many times over the past week about the impending short-term bull market. How folks would be forced into equities, and big money would be bidding stocks up on the impending intervention from Central Banks. Watching T.V. and reading newspaper headlines was a sure way to get your trades going the wrong way. There were firms that actually recommended their clients to be out of the market into the weekend! That was not the case here at Optionmillionaires.com.

Call us what you want, but we are short term bullish. "The Bizzaro Jerry". We have bucked the trend since December when everyone was calling for a downturn. We held strong in May, when folks spoke of headwinds for the U.S. Economy, a Eurozone in disaster mode, and a China economy slowing down.

Even today when the market was all about Spanish 10 year yield breaking and holding above 7%, and how that will be devastating for Spain, we were still bullish with the red open. Todays move in market leading growth stocks like Intuitive Surgical, Inc (ISRG), LinkedIN (LNKD), and Priceline.com (PCLN) give credence to a possible market rally. We spoke of 127.75-127.90 as a 'line in the sand' on the SPY and continue to think we move higher here through the summer. Before you blink your eyes the market will be over the 4 years highs we touched in May. This market can be irrational, and trying to fight it, will only get your frustrated.

Stay tuned tomorrow for our watchlist, and make sure your in chat for some more calls like LinkedIn (LNKD) $110 calls from .30 to $1.


NetFlix (NFLX) – History Repeats itself?

Who can forget the start of 2012 when Netflix (NFLX) went on a 6 day rampage. It was an option traders wet dream as the stock ran from $69 to $99.65 in 6 trading sessions. The Catalyst? Well thats a mystery. Was it the news that folks watched over 2 billion hours of Netflix videos over a 3 month span in the fourth quarter of 2011? Or maybe it was the rumor of a buy out from Yahoo? Either way, the stock exploded and call buyers were rewarded with 1000%+ returns on their positions.

Here it is nearly 6 months later, and we find Netflix (NFLX) in an eerily similar scenario. The stock has been trending down for a few weeks after earnings. Folks are starting to bet on a serious breakdown from support levels as Netflix (NFLX) is losing it's luster. You can see the vultures circling around waiting for an imminent death.

This is the exact scenario we like to buy calls in. Rumors circulated on friday on some type of offer from Verizon (VZ) , which makes no sense, but does bring attention to the stock. We also had a nice insider buy reported after hours.  Not saying these are the ingredients for a massive rally, but they may provide some fuel.

Folks forget that Netflix (NFLX) has over 23 million streaming subscribers, and looking to add over 7 million more in 2012. We will have more on NetFlix (NFLX)monday. For now, check out the chart. If history does repeat itself, we maybe in for a nice return on some calls.

CME Group (CME)

CME Group (CME) is a stock that has been very kind to us over the years. At the start of 2012, we were able to position ourselves with some calls  into earnings and banked some serious coin. Take a look at the charts below for the call. And this was what we were saying before the stock took off: "CME GOING TO GET LEGS" ; CME GROUP




The $270 calls we purchased at .75 hit $21 at the high. So $75 into $2100. History has a tendency to repeat itself, and we are looking at CME group (CME) for another possible move over the next few days. Why? Isn't the stock up nearly 8% over the last 4 trading sessions and above the 200 & 50 day moving averages? It is, and someone taking a glance at the chart may consider CME Group (CME) to be overbought. But the real question is: Who is buying CME Group (CME)? CME Group (CME) is a favorite among institutional investors. Retail traders are not buying and selling the stock.  With a forward split coming to attract attention, and another massive divy coming, we think its the beginning of a bull run on CME Group (CME) shares.

Time will tell, but we think CME Group (CME) will trade above $300 in short order. Take a look at our chart below.





We are positioned with a large quantity of $280 and $290 June calls.

Panera Bread Co. (PNRA)

Starbux (SBUX) announced yesterday they were buying Bay Bread, a small bakery chain from San Francisco.   Panera Bread Co. (PNRA) opened lower this morning on the news, as folks worried that the deal may effect Panera Bread Co.'s(PNRA) growth.

The only thing I think it will do short term, is bring attention to a stock that should be trading closer to $200 then $100.

We positioned ourselves with June $145 calls at .95, and June $150s at .40. The stock is currently trading at $138.76, and think she flies when she breaks the 200 dma at 139.31