Wrap up and updates 1/15

Another day and another 3% shaved off of AAPL.  SPY fell to the 10 day today and found buyers, as is becoming a theme open low chop around and then dip buyers show up and send the market to unch close.  All healthy action and the banks will kick things off tomorrow morning and seem to be the group the market is waiting for to make their next move.  IWM led the afternoon rally, which is a good sign.

Continuing my AAPL trade with an update as there was opportunities today with another sell off.  So on Monday I only got a partial fill on another leg of the trade so with today's action I decided to sell the last 19 in a 495-490 put spread for $2.35.  Although my plan on action like this was to buy a call spread in the 495-500 range I decided to not catch the knife and sit that one out, but the reasoning behind selling a closer put spread was to get some capital for that call spread if in fact AAPL were to open down tomorrow.  As it stands now my outlay for the initial trade was $1.24 per lot and as the trade stands now I have sold against my position taking in $1.36 per lot, which equates to a guaranteed gain of .12 with the possibility of a total gain of $5.12 per lot, that could be a lot of cookies!  So far so good and I will update any further additions.

For the banks and earnings MS is the one standing out the most with a clear bullish flow in the options market with positioning in the 20 & 20.50 calls attracting the most attenting 12K & 20K respectively also worth noting open interest in the 19's is at a staggering 85K and 20's is at 50k.  Options are pricing in about a $1 move or 5%.  so one way to potentially position for this would be buying a 20.50 call and selling 2 times as many 21.50 calls for about .15.  You could also go short the 19.50 put and the overall trade would then be free.

CBS yesterday I highlighted 37K Feb 40 calls being bought and today an additional 11K were bought to open.  So at this point the flow is extremely positive in the name and I will look for an entry tomorrow I will look to sell the jan 39's and buy the feb 40's for .50-.65 if it sets up.

CAT took a quick dip to the 10 day and bounced to close near the highs.  Tomorrow should be buyable off the 10 day on any dip or through todays highs.  Options flows is bullish but nothing out of the ordinary to speak of.

WYNN looks great and should be bought through today's highs.  I continue to like many casino names and MGM was the first one to offer a dip to the 10 day and then rip and can be bought through today's highs.  Another of my favorites is MPEL & LVS.

TRN options are fairly thin but one that is setting up for the next leg higher a break of 37.32 looks good.

SE no real long set up here technically, but similar to SODA which I highlighted yesterday the 50 calls, which at points in the day offered a double.  SE saw 20K Jan 28 calls bought today.  So it could be a name to watch tomorrow.

EXPE showed weakness in the morning almost touching the 20 day before buyers stepped in and closed it right above the 10 day, this is a name to be bought through todays highs.  Traders were active today in the FEB 65 calls for 4500.

PCLN also looks good and I got involved after it bounced off of the 10-day.  This looks good through that 668 area.  I entered a 660-670 call spread at around 3.20 expecting a move to 670-680 on a break out.  Tomorrow I will look to add another leg into this to lower my cost basis.

EBAY reports tomorrow after the close and is a playable name.  Options market is pricing in a $3 move or 5.7%.  EBAY has support at 52 and then a gap to fill to the 51 area and below that has support at 49.  The $49 support coincides with the 5.7% priced in move so I want to position for something similar, but do not want to be a complete bear on EBAY as it has been an incredibly strong stock.  So two ways to play this are:

Long 1 jan 50 put
Short 2 Jan 49 puts

this gives a net credit of about .16 and your protected to 47.84 and profitable between 47.85-100+

So here you have short exposure, which aligns with support and anticipated moves, but you also profit from no reaction or a positive reaction in the stock.

Safer play is

Long 1 jan 49 put
short 2 jan 48 puts

credit of about .05-.07 your protected to 46.95 and profitable between 46.96-100+

So both strategies offer short exposure but allow you to profit with a positive reaction.

Few other names that look good VICL, GE & RPRX... EMC could be worth a look if you like to pick bottoms earnings on 1/29 though.


From yesterday a lot of the shorts I highlighted worked well such as SBUX & IBM.  VMW continues to look great and is buyable through today's highs.  CRM through 175 looks great still.  VOD did not trade well today and there was no additional notable call buying but still one worth watching.  MPEL worked out well and still looks ready for higher prices through today's highs.  RVBD put in an awful day and never triggered through the 10 day and now looks even worse so not one I will even watch any more.  VFC broke out and failed but still held above 50 day and should be buyable through today's highs.