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I used to run a limited partnership, boutique hedge fund in the 90s. Retired in 2000 and moved from New York City to Toronto, Canada, got married, raised a family and basically settled down. After a few years in Toronto, my wife got tired of the city’s 8 months of cold weather and insisted that... More
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  • From San Diego To Santorini... 19 comments
    Jun 28, 2013 9:29 AM | about stocks: AAPL, CSCO, FSLR, GTAT, JDSU, JNPR, LDK, QCOM, S, SPWR, SUNE, TSL

    Exactly six months ago, I started my very public journey in cyberspace via my blog, Options2Wealth...the blog was initiated in San Diego, California, with the expressed purpose of showing how anyone can quickly build a relatively substantial nest egg with as little as $10,000...

    Today, 26 weeks later, it is only fitting that I am sitting here in the beautiful village of Imerovigli, on the island of Santorini, Greece, penning my last post as I wait for the sun to set here but waiting for the US markets to open in New York, so that I may close out my remaining position(s) in my Options2Wealth portfolio...

    The original $10,000 that I used as seed money for my Options2Wealth public portfolio has now ballooned 10,000%+ and today is more than $1,000,000. And during the past 26 weeks, those few brave souls out of the 50 odd readers of my blog who decided to take the plunge, and by replicating my moves with the most powerful wealth building tool that our financial systems allow, ended up making substantial amounts of money for themselves.

    More than anything, I am most proud of the fact that over the past 26 weeks, my blog has shattered the conventional wisdom (myth) that equity derivatives (Options) are risky financial instruments that should be avoided by investors...

    When I started my blog, I did not realize how much time it would take, for me to maintain it...and considering that my real job is running a technology startup, I am surprised that I was able to find the time to write as much as I did...

    I am gratified that a number of you have enjoyed my rambling so much that you have asked me to continue writing...I want you all to know that even though I don't make any promises or commitments, I will consider your request(s) to continue this blog in some capacity..., I must however close my Options2Wealth public portfolio today because this portfolio was specifically started as a 6 month experiment, and today, being that it is its 6 month anniversary, it is time to bring down the curtain on it...

    The markets open in less than 5 minutes and I will sell out my remaining positions and update this post a little later with the final portfolio value...

    kp

    DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you. On the other hand, if the move(s) result in a profit for you, I am open to discussing a split. ;-)

    Disclosure: I am long LDK, SPWR, SUNE, TSL.

    Themes: Options, Solar Sector Stocks: AAPL, CSCO, FSLR, GTAT, JDSU, JNPR, LDK, QCOM, S, SPWR, SUNE, TSL
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Comments (19)
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  • Spak007
    , contributor
    Comments (19) | Send Message
     
    KP, after hours today there was over 4 million shares traded on SUNE with little to no price movement. Any opinion on why the large afterhours volume? Could it just be large funds buying/selling shares with each other?

     

    Hope your trip has been enjoyable and relaxing. Just want to say again how remarkable the performance of your public portfolio was. You have opened my mind to the world of options trading, and with your generosity of this public portfolio (and my willingness to walk on the wild side), I was able to profit handsomely from your calls. Thank you!

     

    I am currently trying to educate myself more with charts and how to go about picking the right options (however I don't mind letting you pick them for me!). I will repeat what has been said by many and hope you continue with your blog. Personally I would like to know more about how you go about picking the options to buy. So although I am more than happy and appreciative to hear your specific stock picks, I am equally eager to know more about how you derive those picks.

     

    But, as you stated you underestimated the amount of time it took to keep the blog going, I'm sure it would take even more time to drop some knowledge on us. Either way, I thank you, and my family thanks you!
    28 Jun 2013, 10:26 PM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » Yes, I saw that also...has to be an institutional purchase or sale...these kinds of trades are pre-arranged that are then printed after the market closes...I am not worried...

     

    As to your question on how I pick my options...I have been doing this for 20+ years and honestly, it is intuitive...I realize that that is not the answer you were expecting from me...LOL!

     

    However, my decision to buy a particular option has just about everything to do with the following three factors:

     

    1) The price that the stock is trading at, at the time of my purchase.
    2) My forward price target for that stock.
    3) And my timeframe expectation for the stock to achieve my price
    objective.

     

    As you can see from the above, #s 2 and 3 are very subjective objectives...(Hmmm...I like that phrase: subjective objectives ;) )...

     

    Anyways, #2 above is based on a read of the stock's chart...so that is quite easy, especially when reading its PnF chart...

     

    And #3 is an intuition that I have honed over the years and of course, even with all of my experience, once in a while, I still run out of time...the best way to navigate around this challenge is to make sure that my options have enough time, just in case my bet does not pan out in the allotted time...so basically I buy a few extra weeks of buffer over my expected time frame...that is why you may have noticed that I usually buy options with both medium and longer term time frames...The one mistake that folks new to the option game make is that they get greedy and don't leave themselves enough time to ensure that their stock's price objective is met...It is more important to bag a smaller percentage gain by buying additional time, than to play it cheap and watch your options expire just days, or weeks, before the stock reaches your price target...very frustrating and just not worth it...try and take the greed out...as you have seen, my options have yielded incredible returns in spite of me buying myself extra time, so there is absolutely no reason to try and squeeze additional profit(s)...always remember: In the stock market, bears make money, bulls make money and the pigs get slaughtered...and this proverb is especially true in the options market...

     

    :-)

     

    Hope the above helps...

     

    kp
    1 Jul 2013, 08:22 AM Reply Like
  • Spak007
    , contributor
    Comments (19) | Send Message
     
    Yes it helps, another piece to the puzzle! Thanks

     

    What are some other tools or indicators you use to try and gauge overall market direction? You mentioned distribution in a past post, how can you tell if it's panic selling or a full shift in market sentiment? Is it based on volume and direction of the major indexes in relation to the previous days trading and whether it is sustained in that direction for a certain time period? Thanks in advance!
    2 Jul 2013, 02:51 AM Reply Like
  • goferit
    , contributor
    Comments (19) | Send Message
     
    KP,
    you deserve a great vacation. Keep up the good work. I enjoy reading your posts.
    1 Jul 2013, 12:33 PM Reply Like
  • goferit
    , contributor
    Comments (19) | Send Message
     
    kp,

     

    The solar sector seems to be breaking out again. I'm thinking $SPWR goes up another 50%+ within a month or two. What are your thoughts?
    1 Jul 2013, 12:52 PM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » Yes, I agree...SPWR is poised to break out and according to its PnF, the next stop is $33 and barring any bad news in their next earnings report in the first week of August, I expect the stock to hit its target within the next 5 weeks...we shall see...kp
    3 Jul 2013, 10:03 PM Reply Like
  • goferit
    , contributor
    Comments (19) | Send Message
     
    Thanks kp,

     

    SPWR, SCTY, & SUNE.....in your opinion, which has the lowest "risk to reward"....for the next 1 to 2 months?
    4 Jul 2013, 01:28 PM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » Goferit,

     

    Before I answer your question, I want to make it very clear that I do not have a broker / dealer license and therefore cannot advise you on your personal financial management matters...

     

    I currently happen to own CALL options in all three stocks + Tesla (TSLA)...However, my portfolio's largest $$$ concentration is in SunPower...I believe that SunPower has basically completed its consolidation phase and should breakout from this new "Cup and Handle" formation either next week, or, definitely by the following week, and in the process, will make new 52 week highs for the next 5-6 weeks...and of course a print of $24 will signal a new Double Top breakout...if you may recall, almost 2 months ago, during SPWR's last push upward, I had maintained that the stock will not print $24...Well...this time around, my stance is very different and feel 100% certain that the stock will print $24 within the next 2 weeks...or, possibly, even sooner...LOL!

     

    ***Please be aware that just because I sold out of my SunPower position (for the most part) 6+ weeks ago, does not mean that I am less bullish about the company's prospects going forward...in fact, to the contrary...Today. I am even more bullish than when I wrote the post, SPWR: The Safest, Short-Term Monster Stock On The Nasdaq , way back on January 17th, 2013...

     

    http://bit.ly/11bhI1E

     

    Since then the company has shared additional information with respect to market demand for solar products in general and demand for SunPower(ed) solutions in particular, and based on that, I believe that SunPower stock price should surpass that of First Solar by the end of the year. Those who have followed my blog for some time, know that the reason I sell out my position(s) in companies that are my favorites is because I read their individual price patterns and based on that read, I either jump on board, or jump ship, and in the process, try and score the maximum percentage gain for my portfolio.***
    5 Jul 2013, 02:40 AM Reply Like
  • invest.beginner
    , contributor
    Comments (88) | Send Message
     
    Hello KP,
    What about SUNE? Looks like there is strong resistance at $9 & before earnings, it won't be able to break that level. And if earnings disappoint then may be back to $4-5 level? What are your thoughts?
    5 Jul 2013, 01:12 PM Reply Like
  • goferit
    , contributor
    Comments (19) | Send Message
     
    Thanks KP,

     

    You make a lot of sense. Thanks for your thoughts. I currently have August call options on $SPWR....and just today bought Oct $40 calls on $SCTY. $TAN solar etf seems to be confirming sector "break-out". Have fun on your vacation.
    5 Jul 2013, 01:21 PM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » SUNE is going through a normal consolidation phase...nothing to worry about...I will be shocked if it dives down below $5...really shocked...don't believe it is going to happen...kp
    8 Jul 2013, 12:09 AM Reply Like
  • Invest2Win786
    , contributor
    Comments (12) | Send Message
     
    Hello KP,

     

    I hope you've enjoyed your vacation to villages in Greece. As your student and fellow blog follower, I had just noticed a trend and would like to see what actions you'll take regards to this new development. This is regarding SPWR of course. I was looking at stock charts and the P&F technicals showed a double top breakout to $30.50. You'd mentioned on your blog good things about a double top breakout http://bit.ly/1aJOAaq So, I went back to evaluate your criteria on stock picking and you'd also previously mentioned a 6 to 8 week consolidation period for SPWR on May 18th of this year before predicting $30 on SPWR, and lol, of course 6 weeks have gone by. I've been consistently going to stockcharts.com for the solar stocks past 4 weeks and finally saw a double top pattern at work yesterday, and was going to ask you if i should dive in both hands and feet, as in 40% of my $12,000 I've borrowed? Now I'd also like to analyze your criteria to see how you interpret this fundamental information, in comparison to how i do it so i can learn more.

     

    KP's criteria:

     

    1. P&F Analysis = Double Top Breakout on July 2nd w/price objective of $30.50.
    2. Should the company's stock pass my initial test (above) I then check the stock's relative strength versus its 50 day and its 200 day SMA? 50 Day & 200 Day SMA = $18.42 & $10.22 respectively, and at $22.16 seems very bullish in comparison to the averages. However, the relative strength can be somewhat questioned, as the RSI is at 65.24, close to overbought territory and MFI is 74.92.
    3. Market definitely favors sector. Just found this article from a Sun Edison supporter about solar being a trillion dollar business, adding to your endorsements of solar growth.

     

    http://seekingalpha.co...

     

    4. Cash position, debt, sales growth, profitability, insider buying (none), mgmt. quality, etc = Other than insider buying not taking place within last 6 months, I believe your blog perfectly analyzed the great opportunities, I was thinking of 6 month time frame in buying January calls. Only concern I had from a fundamental viewpoint was the 28% short interest rate at this time. Do you pay much heed to that, even though solar stocks in general do have higher than normal shorting rate?
    5. Health of economy = Okay after 7% correction took place.

     

    I know long term you're super bullish on this stock, but the main reason I wrote all this is to confirm whether my analysis is correct, specifically your views on it, especially since you sold your 100 SPWR options a week prior to closing out your public portfolio or if I should pray for a couple down days before making the bold move? (Btw, I've bought and read 55 pages of 3rd edition of Tom Joyner's Point and Figure charting, someone you'd mentioned in your blog who you'd read for P&F info)

     

    Thanks,
    5 Jul 2013, 11:19 AM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » I2W, You are indeed a good student...Thorough analysis of a few of my blog's earliest posts...shows that you have a knack for reading boring gibberish...

     

    :-)

     

    I will try and answer your questions:

     

    1) Yes, a double top breakout is a pretty good signal...In SPWR's current move, it broke not 1, but 2 double tops, which makes the signal twice as good...LOL! When the stock printed $22, it broke a double top...and then when it printed $24, it broke a 2nd double top...

     

    2) Yes, both the daily and weekly RSI's are above 70, and definitely in overbought territory...however, the 2 RSIs are slightly below the stock's most recent extreme readings...some caution needed...

     

    3) Yes, the sector is hot and I believe that of all the solar companies, SunPower is the hottest...In their last earnings call, the CEO, in reply to a question, said, "we are sold out!"

     

    4) High short interest is good for the stock...in SPWR, shorts should get fried...LOL!

     

    5) Yes, the economy is doing well...and will only get better...Before I started this blog, I used to post under another name, SafeList.com...and a little over 3 years ago, on June 6th, 2010, on another thread, I posted, and I quote: "this market is going up and the ride is going to be a doozy!" And indeed, the last 3+ years, this market has made a lot of money for those who saw this "doozy" ride in the making...Now, 3 years later, I want to again go on record and say that this market still has a lot of legs and will continue to go higher...the recent correction that we experienced in the last 3-4 weeks, is just normal, garden variety correction that a market needs to go through in order to help digest its gains...we are not talking market crash, just plain old, digestive correction...LOL!

     

    You may read my comments from 3 years ago here: http://bit.ly/16Z0TuY

     

    I want to point out that currently I am heavily loaded up in SPWR CALL options...The 100 contracts that I sold were January 2014, $12 CALLS and the reason that I sold them was because they had gotten way too fat with profits and I needed to sell those so that I could put that money in other options that would appreciate 200+%, which the Jan 2014 $12 options would not have appreciated another 200%...My selling those deep in the money options was not because I had turned sour on SPWR's prospects, but rather to obtain a bigger profit by moving those funds into another strike price...

     

    It was Tommy Dorsey and his book on PnF that kindled my interest in Point and Figure charting and I owe him a BIG one for teaching me all that I know about this incredible charting methodology...

     

    Best~
    kp
    8 Jul 2013, 12:54 AM Reply Like
  • Spak007
    , contributor
    Comments (19) | Send Message
     
    KP, after printing $25 and then dropping to $23.81, it looks like we are in danger of a 3 box reversal in SPWR if it prints below $23. Is this correct and how does this affect your view of it reaching the 30's in the next 5 weeks?
    9 Jul 2013, 12:27 AM Reply Like
  • invest.beginner
    , contributor
    Comments (88) | Send Message
     
    Hi Spak007,
    If the stock price falls below 18 again then it would be a double bottom sell signal till then we don't have to worry. It is impossible to expect all X's all the time. :-) I'd consider 3 box reversal as another buying opportunity.
    KP, please correct me if I'm wrong.
    9 Jul 2013, 01:03 AM Reply Like
  • Options2Wealth
    , contributor
    Comments (96) | Send Message
     
    Author’s reply » IB,

     

    Someone I know who only took a cursory look at my blog, came back to me and said that the blog was way "too technical"...your response to Spak007 confirms to me that even though at first blush my posts here may appear to be somewhat "technical," however, those who put in the time and read it closely and diligently, can benefit from it...You have no idea how thrilled I am to see my blog being a source from where folks like yourself and others can learn to help themselves become better investors and master their own financial destiny.

     

    You are absolutely correct! Well, mostly correct...LOL!

     

    Yes, a three box reversal after the stock has broken a double top, or in this case, broken 2 double tops, is another buying opportunity...Since the stock intraday printed $25 yesterday, therefore it only needs to go down and print $22.00 to complete a 3-box reversal...and hopefully it will do that...because once it comes out of the 3-box reversal and breaks the latest double top, the move up should be fast and furious...(fyi, checkout SCTY...yesterday, when it printed $41, it reverted back to Xs and when it prints $42, it will be yet another double top breakout at which point it should move pretty quickly to $52...I doubled my position in SCTY when it made the 3-Box reversal, which to me was another buying opportunity!).

     

    The only point that I want to clarify is the following: SPWR will only do a 3-Box reversal if it PRINTS $23.00...even $23.01 is not good enough...and similarly, it will not break it's triple bottom support at $18 if its price goes below $18...it MUST PRINT $17.50 (or lower) EXACTLY, to negate it's recent move up...

     

    Thanks to Spak007 for initiating this discussion...this was a very important one indeed...

     

    Going forward, my suggestion to you all: Let us collectively pray that SPWR prints $22 and makes a 3-Box reversal, because this will be one heck of a buying opportunity...LOL!

     

    kp
    9 Jul 2013, 09:56 AM Reply Like
  • Andy Zelenak
    , contributor
    Comments (296) | Send Message
     
    Kp you're the man! I don't trust myself to trade options yet, but I always like reading your predictions (and they are usually correct). My personal goal is to make enough on solar stocks to install panels on my own house.

     

    How is it that you made 10,000%, while buying & holding would have made ~400%, at most? Did you really predict the price fluctuations so well?
    7 Jul 2013, 03:34 PM Reply Like
  • invest.beginner
    , contributor
    Comments (88) | Send Message
     
    Hello KP,

     

    In case of options, unlike stocks which you can sell it immediately in the open market, can you sell all your options if those are IN THE MONEY, no matter what quantity is? What happens say today is the expiration day & I set the "sell to close" order at market price on all my 100 options. Will the order go through before the close of the trading day? What happens if the order doesn't go through or gets partially filled? These are few concerns that makes me uncomfortable with options trading.

     

    Appreciate your feedback. And thank you so much for replying. With your busy schedule you still take some time to reply to each & every question that we all (your students, even if you don't think so, you are my teacher :-) ) post here. This is very helpful. Thank you!
    8 Jul 2013, 02:46 AM Reply Like
  • mkarakum
    , contributor
    Comments (49) | Send Message
     
    Hi Karim--

     

    I hope you are doing well and rested during your vacation, I know I definitely need one for sure.

     

    How do you determine the price target? I know you have mentioned 30$ range and 33$ but now the PnF Chart shows bullish price objective of 42.5$.

     

    Just curious which call options do you have. Would you mind sharing? I m considering Sep 21st 33$ call and Sep 21 36$ call options.
    Im very interested in understanding your analysis.

     

    Have a great weekend.

     

    Best Regards,

     

    --Murat
    18 Jul 2013, 10:43 AM Reply Like
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