The market broke through key levels yesterday and actually picked up a lot of steam at the end of the day. It seems to look as if the head and shoulders formation that everyone was chirping about may not have a follow through. It just goes to show you that the charts don't always come true, but they are high probability setups. I think that the market can continue strong if the S&P and stay above 930 with an initial upside target of 950. I would also like to see the Dow stay above 8600.
The market was lower this morning but with 20 minutes until the open it looks like it wants to try to open positive on the back of earnings from GE, BAC, and C. And additionally housing starts which were up 3.6% and building permits 8.4%. As I write this blog the S&P futures are only down 7/10's of 1 point.
GE met expectations with earnings but missed big time on Revenues. The street is a bit concerned with its industrial side of the business as GE capital met its targets. This is makes me feel even more confident that taking yesterday as an opportunity to book profits in the stock was a great move. I still have a little exposure via 3 call contracts only a $150 exposure. But I will look to close that out this morning as it was an earnings play and I did state that if it was not in my favor with in the first 30 minutes of trading that I would close it out.
I still have the 4 Call contract on JPM that I will look to take profits on today. I am looking for it to stay above the $36 level with a price target of $37. I bought the contracts for $2 and have a stop loss of $1.75.
Have to thank Jason for the insight on playing with smaller size when focused on other things. I really allows me to stay involved in the market and not really worry too much because I am not risking much. So thanks Jason for the comments on my previous post.
Until next time. Good luck Trading.
Took profits in JPM. I was a little pre-mature but its because I put in a trailing stop. I bought for $2 and sold for $2.35 for a nice 17.5%. After its pull back from $36.96 it did reach $37.20. The Calls traded as high as $2.56. Left a little on the table but I stuck to the plan and made a chop.
ReplyDeleteSo the actual dollar profit is small at about $140 minus commish, but it's a scaleable trade. The percentage of 17% after commissions is what I'm looking at. There will come a day when you've got bigger capital and the conviction to go 100 contracts. 17% returns in a few days on large dollar amounts is the longer term goal for me. Once I have an income to rely on I plan on putting the majority of my cash to use like this.
ReplyDeleteYes that is correct. I took my normal minimum size of 10 contracts down, as I am trying to focus on the SMB training program but I still want to be in on moves. I need to slowly integrate the two trading strategies.
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