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Michael Clark
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Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. His fine arts portfolio can be found at the following address: http://www.hoalantrangallery.com/MJC2.htm His writing portfolio can be found at:... More
My company:
Clark's Gate Timing System ©
My book:
TURN OUT THE LIGHTS
  • CGTS OPTIONS CORNER FOR TUESDAY 4 JANUARY 2011. BUY CALLS ON UNH, AHGP, UBX, MRK, CAB, POL, BEAV, SBUX, ICON, VTAL, ALGT, PPD, AXP, SAH, AIG, TBT, STJ, FISV; BUY PUTS ON FNMA.OB 0 comments
    Jan 4, 2011 3:21 AM | about stocks: UNH, AHGP, OUBS, MRK, CAB, POL, BEAV, SBUX, ICON, VTAL, ALGT, PPD, AXP, SAH, AIG, TBT, STJ, FNMA, FISV
    OPTIONS CORNER
    Short-Term Trading in Options.

    Tuesday Jan 4 2011

    We're up 25% since 20 December 2010, with a heavy weighting in precious metals and biotech options.  14 new trades below.

    Options Trading Scorecard (since 12/20/10):

    CGTS OPTIONS  PORTFOLIO (Since 12/20/10)   Active
    % Gain 1/3/11   Profit Trades
    16.22% Options   $98,959 61

    SALES TODAY: None

    PURCHASES TODAY:

    MONDAY CGTS NEW TRADES    
    3-Jan      
    ISSUE TRADING CLOSE SIGNAL
      SYSTEM    
    UNH M5 3 ASP LT 2a 37.13 ENTER LONG
    UNH MAR 38 calls   1.45 ENTER LONG
    AHGP M5 3 ASP LT 2a 49.45 ENTER LONG
    AHGP FEB 50 calls   0.7 ENTER LONG
    UBS M2F 14% Trade 16.71 ENTER LONG
    UBS FEB 15 calls   1.41 ENTER LONG
    MRK M2F 14% Trade 36.04 ENTER LONG
    MRK FEB 35 calls   1.79 ENTER LONG
    CAB M4 Accum 00 22.38 ENTER LONG
    CAB MAR 20 calls   3.6 ENTER LONG
    POL M5 3 Chart Trade 13.89 ENTER LONG
    POL FEB 12.5 calls   1.6 ENTER LONG
    BEAV M5 3 Chart Trade 37.95 ENTER LONG
    BEAV FEB 35 calls   3.8 ENTER LONG
    SBUX M5 3 Chart Trade 33.25 ENTER LONG
    SBUX FEB 33 calls   1.48 ENTER LONG
    ICON M5 3 Chart Trade 20.02 ENTER LONG
    ICON FEB 20 calls   1 ENTER LONG
    VTAL M5 3 Chart Trade 14.35 ENTER LONG
    VTAL Feb 12.5 calls   1.9 ENTER LONG
    ALGT M5 3 Avg ASP Diff Sum 50.84 ENTER LONG
    ALGT JAN 50 calls   1.5 ENTER LONG
    PPD M5 3 Avg ASP Diff Sum 62.45 ENTER LONG
    PPD FEB 60 calls   5.8 ENTER LONG
    AXP M5 3 Avg ASP Diff Sum 43.4 ENTER LONG
    AXP FEB 40 calls   4 ENTER LONG
    SAH M5 3 Test Combo 13.68 ENTER LONG
    SAH FEB 12.5 calls   1.35 ENTER LONG
    AIG M5 3 Test Combo 58.05 ENTER LONG
    AIG FEB 57.5 calls   4.15 ENTER LONG
    TBT M5 3 Test Combo 37.51 ENTER LONG
    TBT Feb 35 calls   3 ENTER LONG
    STJ M4 Rev 3 Trade 42.28 ENTER LONG
    STJ FEB 40 calls   2.94 ENTER LONG
    FNMA.OB M4 Rev 3 Trade 0.33 ENTER LONG
    FNMA JAN 1 puts   0.78 ENTER LONG
    FISV T5 Turn (M4 Accum) 59.5 ENTER LONG
    FISV MAR 55 CALLS   5.4 ENTER LONG


    SELECTED CHARTS OF TODAY'S TRADES:



    We love this chart; and think UNH has a chance to go to 45.



    Everything looks positive for ALGT to make a run at 55.



    Another nice-looking chart pattern.  AXP is going to try to make a new high.  This trading system (M5 3 AVG ASP Diff Sum) is up 24% in two weeks.



    SBUX should go higher in the short-term.  It balked at a down-turn yesterday and made a new short-term high.  Jan calls would be good here also.

    ___________________________________________________

    A Disclaimer of sorts:

    I will update these positions regularly, so we can all see how we are doing with our short-term speculating.

    I am bullish on gold long-term (until Bernanke is fired, and more generally until about 2019, the end of the deflation cycle) -- and I'm relatively bullish on stocks until QE is abandoned.  QE does many things, one of which is to try to make sure that stocks and bonds don't decline.  The Fed, quite likely, has guaranteed to bankers the advance of stock prices.  As long as the Fed is willing and is allowed to backstop stock prices, short positions are very dangerous, except in isolated cases.  Bond vigilantes are showing Mr. Benanke that his designs may not be able to proceed without resistance however.  Rising rates are a slap in the face of American power; the slap is welcomed by those of us who think debt is the problem that needs to be addressed, destroyed, rather than expanded and extended.

    Trading options is highly speculative and can be dangerous.  Pricing of options is never very clear; buying options is almost always less prefereable than selling options, in terms of likely profits.  But buying options gives an investor a HUGE BANG FOR THE BUCK.  Getting accurate price data on options (especially those thinly-traded) is also often a problem, with which we'll have to work.  Typically we work with the last close, if it falls between bid and offer.  If it does not, then we average the bid/offer.

    If one knows what direction a stock is moving, short-term options can be profitable.  The problem with options, of course, is that they, like ourselves, decay with time.

    The cheaper options expire more quickly (one can always buy long-term options is one wishes to speculate on long-term stock or market moves).  I like short-term expirations, cheap options, and getting in and out (with profits).

    I have many short-term trading systems.  I will use several in this Options Corner.  The first I start with I call "M5 3 Chart Trade" which really relies on the M5 3 Momentum Indicator to trigger the trade, always in the same direction of the major trends.

    Successful trading!  We know the game is fixed; but let's ride on the back of the dragon for as long as we can.

    More information on the CGTS systems can be found at:
    home.mindspring.com/~mclark7/CGTS09.htm

    MICHAEL J CLARK
    Clark's Gate Timing System
    Hanoi, Vietnam
    84 4 221 92210







    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Stocks: UNH, AHGP, OUBS, MRK, CAB, POL, BEAV, SBUX, ICON, VTAL, ALGT, PPD, AXP, SAH, AIG, TBT, STJ, FNMA, FISV
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