Replies to post #21161 on Marketgems Earnings Trader- Trading Strong or Weak (MKTGEMS)

[jenna]

FWHT..2 day gainer, called the straddle with emphasis on the put play tonight. We'll probably have to supplement any morning gap with a stock play.

Later in the session locked in.

FWHT.. straddle (emphasis on puts after a run) Looked for an imbalance of more pust than calls after the run up last 2 sessions (FWHT called on FEB 6 as well) already



What I like about FWHT is that I don't think this one will stagnate either and move big in one direction. Have my eye on the 17.50 February puts which have a pretty big spread now $0.40 to $0.65 although I did manage to pick up some at $0.65 earlier. The February 20 calls are about $0.80 and I wouldn't think we need to pick up both positions this early. Picked up the puts mostly because they were cheap. FWHT will be on the newsletter on Monday.

[jenna]

Any tech related stock to hold through earnings (even much of a calls option position is dangerous) We like to get all the upside we can in the "anticipatory upswing' I did not hold a position (long or short in LTXX, ESPD into the close) Nor do I plan to hold much of PCLN just try to pick up some more upside perhaps in an earnings run. The call options in PCLN have already doubled, we are careful to call our "official call" days in advance of the report to capture if not many days of upside, at least the crucial upside in front of the report (PRAA, ESPD, PCLN, LTXX, NTE and FWHT) were all "anticipatory upswing" plays. The only PURE play was the NTE call options which was a lot of luck since the puts were hard to procure at our price entry target. We did like PRAA since we missed upside in both CAMD and TASR (weeks ago) because of the lack of options, PRAA was cheap enough to live a little dangerously. CAMD still continues up with or without options.


WE WILL POST OUR CHARTS whenever possible and WHENEVER RELEVANT and not just in isolation, but we do infuse our trades with some fundamental realities, charts alone are not enough especially so close to the pullback we posted during earnings season especially for the sox.



Other sectors are not as bad, we did not mind holding straddles in (nor will we in the future) in sectors other than technology. (In fact we are looking at downside in some low p/e stocks for a change) We are more and more careful now with even the CALL option side through earnings (why risk even a buck or less loss on a gross straddle position when you can lock into fine profits in the "bird in hand" theory) We then suggest you play any gap play (usually by 9:50 to 10:00) to reinforce gains you might have made the night before. The market is not showing resilience, today was a crucial session in which a one day 'relief rally' might have turned into an actual new trend, BUT IT DIDN'T. Its almost like the SNDK chart, but not quite as bad. In conclusion, ONE DAY RALLY DOES NOT A TREND MAKE! and we are back to trading the "long term daytrades" and reversal period trading especially in technology and looking more to short rallies and hold an unbalanced position of put/calls if we do decide to hold techs (and even some other sectors) through earnings. Looks like the catalyst might be gone.


(Two other examples we have and will post more on tomorrow closer to their earnings as they are still 'in play' so we can't post them now, but these 2 also confirm the better strategy of "grabbing what you can in "anticipatory upswing", locking in a profit and going very cautiously into the report (ESPECIALLY IN TECHNOLOGY, and I'm not so convinced even the S&P and INDU are not going to be put under the same restraints, especially after the debacles of both MDT and CI) We have new sectors to watch for tomorrow morning and after the close (Tuesday and Wednesday) and we'll be reinforcing our opinions directly in relation to the results of those upcoming reports.

[jenna]

PCLN -->PUZBD..locked in a double bagger. what happens to PCLN here? Our players are covered already with a profit (like ESPD, FWHT, even CELL prior to the report) Looking for bite downs in our 'nets after the report but always holding some hedge just in case. No 'we lika dis' or "we lika dat' we are clear with our strategy before, during and after the report and heading for part II of the cycle that first was the "anticipatory upswing" and might culminate with either a multiday short or long, determinant on the way the market reacts to the reports TOMORROW by 9:50 and not tonight in after hours although we get some strong indication of what that might be, anything can end up with a gap fill or a gap 'n crap.