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  • Nice Week Trading On The Down Side: CTXS, OXY, PCLN, GOOG, CMG, AAPL, NFLX, LNKD  0 comments
    Apr 21, 2013 12:47 PM | about stocks: CTXS, OXY, PCLN, GOOG, CMG, AAPL, NFLX, LNKD

    The market finally got a pullback. Last weekend, I said, "From up here (close to SPX 1600), even if the broader market pulls back 40 to 50 SPX points, the market will still be healthily bullish!" Sure enough, the market came down 40 to 50 SPX points! We didn't make "a lot" of trades, as things were volatile. Tuesday's big bounce was almost purely technical, after Monday's big drop, then the downward momentum continued on Wednesday. We held on to our puts and added more on Wednesday. PCLN puts gave us a nice +126% profit in just a couple of hours. CTXS puts rendered a near-triple in a couple of days. CTXS was a play off of IBM earnings. It was a high reward/low risk trade. We already knew that INFY reported disappointing earnings. Both IBM and CTXS dropped after INFY's report. So, there was a high potential that IBM would miss as well!

    Here are the closed trades for the week:

    • 07:22 | HappyTrading OXY ($79.50) Sold to Close 05P80 May 80 put, at $2.70 +46%
    • 07:16 | Ecstatic Plays BIDU ($86.25) Sold to Close 05P87.5 May 88 put, at $4.85 +3%
    • 07:05 | Ecstatic Plays CTXS ($66.70) Sold to Close 04P70 Apr 70 put, at $3.30 +187%
    • 09:15 | HappyTrading OXY ($80.50) Sold to Close 05P80 May 80 calls, at $2.29 +24%
    • 08:52 | Ecstatic Plays CTXS ($67.70) Sold to Close 04P70 Apr 70 put, at $2.25 +96%
    • 08:32 | Ecstatic Plays PCLN ($690.30) Sold to Close 04P700 Apr 700 put, at $11.30 +126%
    • 07:06 | Ecstatic Plays PCLN ($695.80) Sold to Close 04P700 Apr 700 put, at $8.30 +66%
    • 07:01 | Ecstatic Plays AAPL ($413.30) Sold to Close 04C425 Apr 425 calls, at $1.08 -77%
    • 08:01 | Ecstatic Plays VLO ($39.15) Sold to Close 04P40 Apr 40 put, at $1.25 +6%
    • 07:41 | HappyTrading BIDU ($89.75) Sold to Close 05C90 Apr 90 calls, at $1.34 -31%
    • 07:14 | Ecstatic Plays BIDU ($89.60) Sold to Close 04C90 Apr 90 calls, at $1.25 -36%

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    On Friday, GOOG and CMG both got a nice jump after their earnings reports. AAPL, of course, was a big story this week, slumping below $400! I'm watching NFLX (which we already got a nice trade in the Trading Room on the puts this week) and LNKD on the downside.

    What I'm finding more and more is that the computerized high-speed trading is really changing the trading landscape, especially for intraday trades. Unless there's a big event, and/or the whole market is going in one direction in a big way, we have to expect to hold on to trades for longer-terms. Another thing is that if you are trading options, for options that expire within a month, it is essential to pay attention to the trading volume and interest on the options. It is better not to trade the ones with low volume and interest. I'm finding that it is more likely that the computerized trading will "attack" those trades because your trade becomes that much more obvious. I'm progressively modifying the way that I trade. I'm definitely trading much less. The new trading environment now actually makes things a little easier and less stressful, if you make the proper adjustments. First, you'll have to modify your expectations. That is, expect to hold on to your trades for more than a few days. If you get a nice intraday gain, great. If not, don't worry about monitoring your trades all day long. Give yourself more time to allow your trade to "turn out".

    A lot more earnings are rolling in next week. Gold's chart is technically broken, so, I don't expect a big bounce. Some buyers started to inch back in on energy stocks on Friday. Biotechs stayed strong, especially after VRTX's huge +62% jump! We'll take a closer look on these sectors on Sunday evening in my weekly Market Forecast and Sector Watch. I think there will be lots of opportunities next week on both (long and short) sides!

    Have a great weekend!

    Good night and HappyTrading! ™

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