Elevator, Going Down

qqq chart

Chart by Steven Sarnoff, h/t stockcharts.com

In today’s session, an early rebound was swamped by selling.  As you can see on my daily chart above, the Qs settled sharply lower.  Today’s strongly negative candle shows the elevator (see our previous post) is going down.

Our recommended protective puts were far “out-of-the-money,” trading just a week ago at a scant $.61.  Today, not so much, they traded at $6.70.

Patience tends to pay.

Subscribe to Options Hotline today to stay a step ahead of the crowd as you vie for fun and profit.

Best regards,

Steve

Law of Gravity

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

Early today, shares of Virgin Galactic (SPCE) continued their rocket rise.

The SPCE April $20 call option I recommended to subscribers (see yesterday’s blog post and the 02-09-20 Options Hotline) for $2.50 reached a value of $18.72 today, +649% in a little over a week.

But markets don’t move in one direction.  Even though shares were up from Friday, the character of today’s price movement is actually negative.  See my chart above for today’s black candle line with an upper shadow.  That shows price falling from the high of the day and implies the likelihood of a coming move lower to levels of underlying support (demand).

It’s important to remember the law of gravity applies to markets.

If buyers are exhausted from a hyperbolic rise, SPCE will get burned on re-entry.

A wild ride, indeed.

Best regards,

Steve

 

 

Outta Space

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

I hope you’re all enjoying the Presidents’ Day holiday.

FYI: This past week, call options on Virgin Galactic quadrupled.

The header for my most-recent recommendation to our subscribers (see 02-09-20 Options Hotline) was, “Outta Space.”  It was a subtle tribute to Billy Preston’s funky 1971 instrumental track, which your then 13-year old editor saw him perform with the Rolling Stones during one of their 1975 shows at Madison Square Garden.

billy preston

Billy Preston, circa 1975

My idea was that shares of Virgin Galactic (SPCE) were set to launch another leg higher.  Here was my chart from that bulletin.

spce chart

Chart by Steven Sarnoff, h/t stockcharts.com

With SPCE at $18.93, the option I was eyeing closed $2.45 bid at $2.55. I recommended the SPCE April $20 call for $2.50 or less.  The option expiration date was April 17th.

As you can see on the chart at the top of this post, shares rocketed higher from my reco point A.  SPCE closed Friday at $28.68.

The low trade for my recommended option was $2.56, on Monday the 10th, so my recommended trade was not officially triggered.

I prefer using limit orders for entry, because you always know your risk.

The option closed Friday the 14th at $10.00, quite a Valentine’s gift for those who bought anyway.

By week’s end the Superleverage power, available only to option buyers, was on display.

Congrats to those who profited.  If you didn’t get it, don’t worry.

There’s always opportunity in options.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

oil painting sea of fog

Casper David Friedrich’s 1818 oil painting, Wanderer Above the Sea of Fog

“As a practitioner of uncertainty I have seen more than my share of snake-oil salesmen dressed in the garb of scientists, particularly those operating in economics.”
— Nassim Nicholas Taleb, Fooled by Randomness

Trading options is to practice uncertainty.  The painting above represents my view of work each day.

The characteristics of a successful trader are: knowledge, discipline, courage, and hard work.

Then it’s up to luck.

Options Hotline is in its 31st year of publication, helping sensible speculators vie for fun and profit by providing specific, actionable information and recommendations.

Subscribe today to join our readers, navigating uncertain markets and staying a step ahead of the crowd.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

Outsiders

h/t AP Photo / Warner Bros.

Look for options that are set to move from “out-of-the-money” to “in-the-money.”  That is where your greatest returns are made.

You should only trade options with risk capital (money you can afford to lose) and only if you understand options.

Out-of-the-money options have no intrinsic (real) value.  Their premium (price) is for time and volatility only.

In-the-money options have intrinsic value plus time value.

Now in our 31st year of publication, Options Hotline readers apply our Superleverage strategy to make great options gains from small stock moves, with an always known and completely limited risk.

Subscribe to Options Hotline today to stay a step ahead of the crowd.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

“Intelligence consists in ignoring things that are irrelevant.”
— Nassim Nicholas Taleb

Now in our 31st year of publication, we do our best to filter out the noise.  At Options Hotline, we combine the best of western technical analysis with my expertise in applying ancient Japanese charting techniques to today’s markets.

I base my analysis and outlook on the character of the behavior of market price movement.

That is important.

To profit from my knowledge based on experience, subscribe to Options Hotline today.

Good luck in your trading!

Best regards,

Steve

 

+208% in Less Than a Month, Luckin Runs Out!

Luckin Coffee chart

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline reco update, FYI:

On Friday morning, our subscribers received an email Alert and had the opportunity to close out our recommended trade on Luckin Coffee (LK), more than tripling their money in less than a month!

Though it may go on to greater gains, our objective was achieved and we like to stay a step ahead of the crowd.

The Luckin March $31call triggered 12-16-19 at $5.00,

traded 01-10-20 at $15.40,

+208% in less than a month, with an always known and strictly limited risk!

I can’t guarantee that all my recos will have the good fortune to multiply like our Luckin play, but I do promise to continue to do my best to find options winners for my great subscribers.

My next bulletin is scheduled to broadcast this afternoon.  If this is the type of options action you’re looking for, subscribe to Options Hotline today.

Good luck in your trading!

Best regards,

Steve

+206% in Less Than a Month, A Good Luckin Move!

Luckin Coffee chart

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline Update, FYI:

Shorts are getting squeezed, as Luckin Coffee (LK) traces out a bullish price pattern.  Consecutive strong red candles (see my daily chart above) helped our recommended March $31 call triple in less than a month.

The LK March $31 call triggered 12-16-19 at $5.00,

traded 01-09-20 at $15.30,

+206% in less than a month, with an always known and strictly limited risk!

Now in our 31st year of publication, the Superleverage power of our method continues to light the way for sensible speculators.

I can’t guarantee that all my recos will multiply like LK, but I do promise to do my best to find options winners for my great subscribers.

Subscribe to Options Hotline today to stay a step ahead of the crowd.

Best regards,

Steve

+142% in 2 Weeks, Here’s Luckin At You, 2020!

Price chart of Luckin Coffee

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline Update, FYI:

Our Luckin Coffee (LK) March $31 call recommendation (see 12-15-19 Options Hotline), triggered 12-16-19 at $5.00, traded 12-31-19 at $12.10,

+142% in just over 2 weeks,

with an always known and strictly limited risk!

See my chart above for Superleverage on display.

As we enter our 31st year of publication, I can’t guarantee that all my recos will become multipliers.  But I do promise to do my best to find option winners for our great subscribers.

If this is the kind of options action you’re looking for, subscribe to Options Hotline today.

Best regards,

Steve

Hey, Good Luckin, +94% In Less Than 2 Weeks!

chart of Luckin Coffee

Chart by Steven Sarnoff h/t stockcharts.com

Options Hotline Update, FYI:

Our Luckin Coffee (LK) March $31 call recommendation (see 12-15-19 Options Hotline), triggered 12-16-19 at $5.00, traded 12-27-19 at $9.70,

+94% in less than 2 weeks,

with an always known and strictly limited risk!

I can’t guarantee all my recos will do this well; but, as we approach our 31st year of publication, I do promise to do my best to find options winners for my great subscribers.

If this is the kind of options action you’re looking for, subscribe to Options Hotline today!

We wish you and yours a Happy and Healthy New Year!

Steve