Seeking Alpha

Philip Davis'  Instablog

Philip Davis
  • on Market Outlook
55,907 Followers
34 Following
Send Message
Philstockworld.com is the fastest growing stock and option newsletter on the Web. "High Finance for Real People - Fun and Profits" is our motto and our Basic and Premium Chat Sessions offer readers a chance to speak to Phil live during the trading day as well as authors like Optrader,... More
My company:
Phil's Stock World
My blog:
Phil's Stock World
  • Phil's Morning Alert to Members - Mapping Out the Day in Advance! 5 comments
    Aug 6, 2010 6:43 PM | about stocks: IWM, QQQ, XLF, SDS, QID, UUP
    In our last Instablog we put up Phil's Wednesday Alert to Members, in which his suggested play was:
    I still like our SDS play, of course but let’s add a QID trade - just in case the Nasdaq is rejected at 2,300.  The Aug $16/17 bull call spread is .40 and you can sell the Sept $15 puts for .35 so that’s net .05 on the $1 spread for a nice 1,900% upside in just over 2 weeks if the Nas falls.  QID is a 2x ETF so it would take a 5% gain in the Nas, to 2,415  to put the $15 puts in the money so as long as you will make money from long Nasdaq plays to offset - no worries.
    The Aug $16/17 bull call spread is now .43 and the Sept $15 puts are .25, which is net .18 up from net .05.  The 10 contracts Phil mentioned would have a $130 profit on the $50 investment in 2 days - not bad. 


    This morning Phil's Alert to Members was on the money again, following up from his morning post:

    Phil  - August 6th, 2010 at 9:35 am |
     

    Good morning!

    Well we’re not going to be breaking any levels today so let’s just watch percentages.  We expect a 2.5% drop on the poor payroll report but the market should get some support from the metals sector and maybe even our exporters as a falling dollar boosts commodity prices.  Obviously, that’s no basis for a real rally and, assuming the dollar holds up here, it’s going to be a great chance to bet it up over the weekend as the demand for US wheat will strengthen the Dollar anyway. 

    That makes UUP an interesting play.  I regretted not going there when I called a dollar bottom on Tuesday but today should be even lower, maybe $23.25 so selling the Aug $24 puts for close to $1 would be the way to go or buying the $23 calls for .40 or less could give us a double on a small dollar bounce.

    Ags are going to be going up fast as the combination of low dollar and strong wheat should send them flying so we’ll be watching them for a possible short into the excitement and congrats to the VIX bulls - that was a smart trade yesterday.

    I have no interest in going long at -1.25% but -2.5% would be a good place to take some chances so patience is the key to the morning.  If 1.25% holds and we bounce back - then the whole thing is manipulated BS that will leave me more bearish into the weekend. 

    Either way, it’s best to take money and run on the morning dip on the short side:  ALWAYS sell into the initial excitement.


    The QID play above had a much better exit for Members this morning as QID touched $17 this morning.   There were many other short plays from this week including QQQQ puts from last night and UUP is looking good. 

    Like the Free Weekly Wrap-Ups Phil posted on Seeking Alpha, these posts are an experiment and, so far, the experiment is also a failure, as negative commentary far outweighs positive commentary so we assume no one benefits.  Let us know if these posts are worth continuing for you or they will go away. 

    We do these posts to answer the number #1 question we get from SA Readers, which is "What do you do in your Member Chat?"   We do a lot.  And it is far easier to show with examples than to try to explain it. 

    As Phil mentioned in the morning post, this is the last weekend to join PSW at the current rates and, without positive feedback, it's not likely we will continue posting inside comments from the chat room but the new Weekly Newsletter will have exerpts in a less-timely fashion. 

    Phil made only 2 other calls in Member Chat, both bullish:

     Phil -  August 6th, 2010 at 11:18 am |

    Let’s watch that $14.50 line on XLF - if that fails then we have some major problems.

    WFR up 2.5% today - go figure. 

    IWM is on drugs with .47 on the TODAY weeklies (.20 in premium) but if you can take the $63 calls for $1.30 (almost no premium) and either stop out at $1.20 or sell the $64s if they get back to .80 that’s a .50 spread into the close.

    The IWM $63s finished the day at $2.14, up 64%.  Executing the spread as Phil indicated turned it into a 100% gain.

     

    Phil - August 6th, 2010 at 1:50 pm |

    Speaking of sticks - good conditions for one this afternoon.  Only 83M Dow shares traded at 1:45.  QQQQ NEXT WEEK $47s are .19 and make for a fun upside gamble.

    The $47s finished the day at .37, just off a double!

    Have a great weekend,

    Greg



    Disclosure: Positions are as indicated but subject to change, most listed in this post are all or partially closed. PSW's stance was generally neutral into the weekend.
    Stocks: IWM, QQQ, XLF, SDS, QID, UUP
Back To Philip Davis' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

This post has 5 comments:

Track new comments on this article
  •  
    I never leave comments, but decided to do this one, as I really felt I should.
    HI Phil your posts are great! I am in finance myself, and the posts provide a fresh, analytical and timely view on day to day market action, so please do continue.
    Your opinion is well premised and highly regarded.
    As for the negative commentaries, i guess some people express their point of view in a less intelligent manner than what you and I used to. Go to any financial website that allows leaving comments and you will see the same thing, a mix of positive, analytical and negative, sometimes even insulting to the writer or other readers comments. I guess it is one of those things, that became a part of online community, so I would just ignore it as it is not worth a minute of your, my or next guy's time who appreciate a well explained point of view.
    6 Aug 2010, 07:51 PM Reply Like
  •  
    Phil, Your posts are awesome. There are so many smug idiots on the internet that just can't process your awesomeness. Don't let it get to you. Some of us are listening.
    8 Aug 2010, 03:03 PM Reply Like
  •  
    Please keep up the posts. As you know, the negative people are a very loud minority. Believe me the large silent majority love your posts.
    9 Aug 2010, 10:19 AM Reply Like
  •  
    I enjoy reading your posts each day, but I rarely post comments. When I am able to sell some real estate, I plan to join Philstockworld. Till then I am just a passive observer.

    I am very curious to see how Member Chat is handled. Is it a typical internet text chat room? Is it a audio/video conference call? Can members see Phil's desktop, and thereby see the charts that Phil is looking at?
    9 Aug 2010, 05:21 PM Reply Like
  •  
    As part of the silent majority, I love your posts. New to trading since the 08 investable market ended eary 2010 I had pretty much no direction. Reading your articles, blogs, comments, and the few emails we exchanged has dialated my pupils to the previosly too dark world of trading. Now if only I could put everything together... maybe if I signed up for PSW.
    10 Aug 2010, 06:06 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
Posts by Themes
$25, Berrnanke, Buffett, CHINA, consumer demand, GLD, Regeneron, www.philstockworld.com, $25, $25KP, 000 Portfolio, 5 Rule, 99 , : Greenspan, accounting, accounting errors, Aggressive Investing, agriculture sector, alpha, alternative energy, Amedisys, antibody, area gaps, Arena, ARIA, ARRY and CRIS, Auction Rate Securities , auto sales, Backspreads, Bailouts, banana, Banksters, Beige Book, Ben Bernanke, Bernanke, Bernanke , beta, Big Chart, Bin Laden, biotech, Biotech, biotechnology, biotechs, Boehner, Bonds, breakaway gaps, breakdowns, breakouts, cancer, cancer medications,
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.