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

 

 

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

power plate

Power Plate, h/t pcrm.org

“When the market sells off on fears of a global pandemic it’s not considered a ‘healthy correction.'”
— StockCats, @StockCats

Speaking of healthy: Eating the whole-food, plant-based way helps boost your immune system to prevent and reverse many illnesses.  Check out one of our favorite nonprofits, The Physician’s Committee for Responsible Medicine, for more info.

To your health,

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