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$AAPL: How to Make 460% on AAPL in one day!

Every options trader worth his salt knows AAPL is one of the best equities, because of it's cheaply priced weekly options and its ability to MOOOOOVE!  Because I trade AAPL almost every week, I keep an eye on it's action. The longer time frame charts have been setting up distribution patterns for a while now.  The daily and 240 were forming a triple top, while momentum has been fading.  The chart is telling us something very important prior to earnings.  I hear people talk about how it's impossible to predict a stock's movement after earnings.  I say nonsense!  By looking at the charts below, it was pretty obvious that AAPL was going to sell off back to the 500 level to begin to test the leg start.

For the Faboys, who always seem to come out of the woodwork praising how great AAPL is, and how they should be priced at 600 or whatever number we can conjure up, it never fails to amaze me how clueless most of them are about chart reading.  Fanboys, this one's for you.


I've tried to highlight pretty clearly, were our levels of consolidation are located, which are really leg starts. So why was the smart money getting short?  Can we say distribution? 

On Monday, before earnings, I took Jan weekly puts at strike 510.  I was expecting that my puts would be in the money, and would really pick up steam if we approached the 500 an or 490 levels.  Luckily, IV was only crushed about 50% since the market did not correctly price volatility before earnings.

Below is a look at how my trade performed to include order flow.



$16,840profitAAPLLong Option
Posted by InfiniteMargin

20 JAN 2014 WATCHLIST and Ideas


Scanned for a few ideas this week, mostly bearish setups that should offer some great options plays and short setups over the coming week or two.  I have not included stops.  I am not interested in telling anyone which trades they should take, or when and where to exit a position. These ideas are my own analysis, which very well could be completely wrong. Trade at your own risk.

UPDATE: Most of the trades here worked very well if you're an options trader.  Most of the targets were hit, or are in the process of being hit. Damn it feel's good to be a gangsta.
 

For the Bears:

Possible Outcomes for $UNH by infinite_margin on TradingView.com

$JPM: MOMO shifting to bearish by infinite_margin on TradingView.com

HAL: Double Top+Bear Flag by infinite_margin on TradingView.com

$CHK: Head and Shoulders+Bearish Engulfing by infinite_margin on TradingView.com

$EBAY Reversal by infinite_margin on TradingView.com

AMRC: Double Top Distributing by infinite_margin on TradingView.com

$NOV: Head & Shoulders Setup to Leg Start by infinite_margin on TradingView.com

$AFL: Support Failing Back to Leg Start by infinite_margin on TradingView.com

SWIR: Retest Leg Start by infinite_margin on TradingView.com


For the Bulls:

TCS: ABCD Completion, Long Accumulation Setup by infinite_margin on TradingView.com

WFM: Buy Zone Almost Ready by infinite_margin on TradingView.com

10 JAN 2014: $IWM Trader's Dream


I've been catching a lot of really nice scalps on IWM as of late. The action lately is setting up a wide distribution pattern to probably form a double top soon.  Notice how compressed the daily chart (on right) has gotten.

Below, from right to left, I've provided multiple time-frame views so that we can really understand what is happening. Looking at the hourly chart (second from the right) we caught a leg up, and are now distributing heavily.  Very shortly, this distribution will bring us back to the leg start with a large move down.
 

I'm including the two scalps that I took today.  The first scalp was not executed as well, as I cut the majority of the trade a little early to lock in profits.  I allowed 10 runners to continue working, as I suspected we would probably retest lower support.


$540profitIWMLong Option
Posted by InfiniteMargin
Below, the second scalp of the day setup nicely, and was actually more profitable, with a smaller position. Today was fairly to exploit these price ranges.


$510profitIWMLong Option
Posted by InfiniteMargin





8 JAN 2014: $SPY, $LNKD, $EBAY Day Trades



I've decided to use the blog as a trading journal as well. Being in Afghanistan, I realized that I really have to plan my trades much more in advance, because I'm currently limited to screen time.  Luckily, I'm still able to trade the open and close in front of the screen.  Today, I took a couple of scalps on LNKD, SPY, and EBAY as I've been trading them regularly as of late.

The LNKD trade today was simply just a matter of testing prior resistance and expecting a fade, which we got.  Longer term, I'm interested in retesting the leg start back around the 190s.  Was a nice scalp and am pleased with it.

LNKD Short

$450profitLNKDLong Option
Posted by InfiniteMargin

The EBAY scalp was again, another setup similar to LNKD, retesting support lost and expecting a fade, which we got.  Was a nice scalp.

EBAY Short

$300profitEBAYLong Option
Posted by InfiniteMargin

$IWM and $SPY: Opening Fade Scalps



This morning we had two nice opportunities to fade the open on the IWM and SPY.  I took the IWM fade first because it typically leads  the indexes directionally when highly correlated.  As expected SPY did follow, but took more time.




Profits update on Profit.ly

$320profitSPYLong Option
Posted by InfiniteMargin
$250profitIWMLong Option
Posted by InfiniteMargin
The daily chart does appear to offer a harmonic symmetry, and bearish price action would suggest a continuation lower back to previous leg starts.


IWM: Bearish Harmonic Symmetry by infinite_margin on TradingView.com

TCS: The Container Store Bearish ABCD Setup



Seriously, if organic foods, farmer's markets and Tupperware weren't enough, go buy some containers.  First Bed Bath and Beyond, IKEA, and now The Container Store...

I was first alerted to TCS literally first week of 2014, and had no idea about the company, nor did I care.  Then I looked at the chart and the harmonic AB=CD Fibonacci structure was about as beautiful as they come.  When looking at this setup, I instantly recognized the a potential short for about 5 points was in play.  As an option trader, these are the types of trades that have potential to yield big profits in a short amount of time.

Below, I created a chart, by pressing the play button, will allow you to see how the trade played out. Great trade to start off the new year, and I will be keeping this one on the watchlist for more potential entries.

UPDATE: The boys over at MotleyFool decided TCS was a long term buy, but I guess they don't tell you how to capitalize on price action?

Source: MotleyFool.com


TCS: Bearish ABCD setting up by infinite_margin on TradingView.com


EBAY: A Short Setup and Capitalizing on a Year of Distribution

Below, I've included a vantage point of multiple time frames, that give us indication as what EBAY is trying to do, in terms of price action.  Notice that the daily chart is quickly becoming much more bearish as it's absorbing price action from lower time frames. I am expecting some basing support at $54 temporarily, as we allow more selling to take control.  But ultimately, EBAY will retest the current leg start of interest between 53-53.50.  Notice the previous distribution pattern forming a double top on the hourly.


I'm expecting possibly a couple more days of consolidation before we break lower and retest the leg start.  On a longer time frame, EBAY as proved to be an excellent swing trade for the entire 2013 year in which we have been distributing, preparing to reverse lower.



EBAY: Distributing and ready to retrace the leg up by infinite_margin on TradingView.com

S&P500 Circa 1987-2013 Contrast




 No one seems to agree on what exactly caused the collapse of 1987, liquidity problems as well as Iran attacking ships were all probable contributions.  Interestingly as politicians and governments continue the warmongering the precipice of World War 3, global markets could find themselves on shaky ground.

Forget the Lions and Tigers. Bears, Oh My. $SPY, $QQQ



Teeth and all, the bears have finally came out of hibernation, hungry for blood.  We are currently watching some key support levels being tested.  All the recent Hindenburg Omen clustering that we've seen recently, and with the drums of war gaining tempo and the onset of FED tappering, I could see support levels taken out as momentum continues to capitulate longs

$QQQ Head and Shoulder setup in progress.
Pay close attention to price action as we test the $75.15 diagonal neckline support.


$QQQ: H&S Formation in Progress by infinite_margin on TradingView.com

$SPY Key Support Momentum Setup


$SPY: Support Test by infinite_margin on TradingView.com

$MON: Monsanto Topping Distribution

Utilizing the Wycoff method, we could be flirting with what looks like topping distribution, which indicates a sharp decline in the immediate future.  Also, notice I took a conservative initial target at a Phi level: the .886 harmonic. Monsanto is currently more resilient, and showing relative strength in comparison to the overall market. Do not let this fool you, as we begin to see the future potential decline. Also, remember, as momentum begins, and global tensions rise concerning the banning of GMOs, declines could continue well past our initial target




$MON: Topping Pattern Distribution by infinite_margin on TradingView.com

The plans of the diligent lead to profit as surely as haste leads to poverty.
Proverbs 21:5