Faltering Thursday (Again)

The market can't seem to get the hang of Thursdays.  

Fortunately though, at Philstockworld, we had a pretty good handle on things yesterday as I noted my concerns in the Morning Report (and all week) and yesterday morning, in our Live Member Chat Room, I called for shorting the Dow (/YM) Futures at 26,650 as well as the S&P (/ES) Futures at 2,950 and, as you can see, we had a nice gain of $1,500 per contract on the Dow and I even called the perfect exit at 4:35 (Futures trade until 6pm), saying to our Members:

300 points is plenty on /YM – don't be greedy!  

The S&P (/ES) bottomed out at 2,915 but the S&P pays $50 per point so 35 points was good for $1,750 per contract – even beter than the Dow gains.  It's been a while since we've played the Index Futures but this is a nice way to get back into the swing as we get back to the kind of toppy inflection points we like to play.  

Speaking of toppy, my crystal ball was on fire yesterday morning as in the same morning note to our Members where we shorted the Futures, I also said:

API showed a 6Mb build in oil and down 1M in Gasoline and up 2M in Distillates so we'll see what EIA says but a build like that can send us back to $62.50 but now it won't take much to "beat" terrible expectations so I'd have to say it's too tricky to play at the moment.  

How cool is that?  Oil contracts pay $10 per penny so a $1 drop is worth $1,000 per contract – nice work if you can get it!  More importantly, when our crystal ball is working we're able to make MONEY in the Futures and that's always fun so we're going to be looking for more opportunities but probably more next week, though you can play Oil (/CL) to bounce off $62.50 and, since it's down $2 from $64.50 a weak bounce is
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Wednesday: An AAPL a Day Keeps the Bears at Bay

$11.5 Billion Dollars.

Or, what's known as a slow quarter for Apple (AAPL), who beat lowered expectations (they guided down $9Bn for the year back in January) on $58Bn in sales, which were down $3Bn from last year.  So we have $3Bn less Sales and $2.3Bn less Net Income and the stock is up 33% from last April.  

Apple is a bit different from most stocks as it was stupidly cheap last April and we have a substantial long on them in our Long-Term Portfolio and our Options Opportunity Portfolio and we even have short AAPL puts in the Short-Term Portfolio, where we sold the 2021 $170 puts for $22 back on November 20th, which was like getting $22,000 NOT to buy AAPL for $170 at this point, with Apple expected to open over $210 this morning.

We just reviewed the Options Opportunity Portfolio in the April 18th Morning Report and our AAPL trade at the time was net $38,525, up from a $12,500 entry back on Jan 3rd but we wanted to be a bit more conservative so we called for the following adjustment:

  • AAPL – There's no sense having $120 calls that are so deep in the money so we're going to cash those in for $85 ($85,000) and add 20 of the June 2021 $180 ($42)/220 ($23) bull call spreads at $19 ($38,000) and we'll roll our 10 short 2021 $185 calls at $36.50 ($36,500) to 10 short July $200 calls at $11 ($11,000) so we're taking net $21,500 off the table and we still have an $80,000 potential spread 1/2 covered by short calls. 

Now, had we left it alone, as of yesterday, the options spread looked like this:

AAPL Short Put


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Philstockworld April Portfolio Review (Members Only)

Image result for one million dollars animated gif

Your love (your love keeps lifting me)

Keep on lifting (love keeps lifting me)

Higher (lifting me)

Higher and higher (higher) – Jackie Wilson

Up and up the markets go, where they stop — well, they don't seem to be stopping, do they?

Last month we couldn't believe we were already close to $2M in our primary paired portfolios.  The Long-Term and Short-Term Portfolios stood at $1,990,381 as of about the 15th of March and, although we played cautiously and added more hedges, the LTP has marched on to $1,429,270 by itself (as of the 4/18 review) while the STP took a $36,413 hit but that still left it at $704,785 for a combined total of $2,134,055 – up $1,534,055 (255%) from our original $600,000 start on Jan 2nd, 2018 and up $143,674 for the month, which is 24% of $600,000 but "just" 7.2% higher than where we were in March.

I hate to be in this position as we're clearly benefitting from RIDICULOUS market conditions and I know from experience that, no matter how many times I say it, people won't believe how quickly we can give back a big chunk of these profits.  Just this morning, GOOGL went down 8%, INTC is down 13% in the past week…  If that can happen to big blue chip stocks – what can happen to the other crap?  

We've been purging things we think are overvalued and we keep hedging but, when you make 255% in less than 18 months you have to KNOW that there's something wrong with the markets and, eventually, things may normalize on you.  I've discussed FOMO (fear of missing out) a lot lately and sure, we'd hate to have missed another $143,674 in gains and now those gains are a buffer against future losses but $2M is A LOT of money to risk and we're getting to the point where I'd rather cash it and start again with a fresh $600,000 – locking $1.4M away in a safer place.


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