8:00am (EST)

Two words for today.  IBM (IBM, $107.22) and Google (GOOG, $438.17).  But before we get to that I’m going to take you through the woods.
Being an option trader is THE best job in the world folks and I got interested in the stock market when I was 16.  Three decades ago.  So remember, learning the market is a long, hard road and becoming a successful option trader is even tougher.  However, if you study sectors and pick up tips, you WILL get there.  I wanted to get that off my chest because “if you do the time your money will shine”.
If you follow this blog for a year, then I can almost bet you will see some of the same things I do.  The first thing I want to talk about this morning is something I said and wrote on May 29th, 2008.  For those of you who have been following me for a year I’m humbled that you have put up with me for this long…seriously, that day I did a blog and posted a note on my computer to remind myself of the troubles the Financial sector was going through.  Click here to go back in time but here is the paragraph that had the most importance that day.  Quotes are from that day as well:
“I still don’t trust Financial sector and there will be a time when these stocks will appear to be dirt cheap. Maybe they are right now but I would wait for two consecutive quarters of good earnings before even thinking about buying a bank stock right now. I will be keeping an eye on the Financial Select Sector (XLF, $24.64, down $0.14) for any signs of a turnaround. This exchange traded fund is a safer way to play the Financial’s instead of finding a true bottom for a particular stock.”
That day Wachovia was at $23 and hit $5 by November before being swallowed.  The XLF is currently at $12.16 which is half of where it was over a year ago.
Now, the key from that paragraph was “wait for two consecutive quarters of good earnings before even thinking about buying a bank stock right now”.  Well folks, Goldman Sachs (GS, $155.26) proved this theory right on Tuesday and now you can see my reasons for taking the Bank of America (BAC, $13.42) in early June.  Many of you got frustrated but by going out to the November 15 calls (BYOKO, $1.40), I protected us from the sideways pattern we were experiencing. 
As we headed into earnings season I said “hold tight”.  Oh, before I forget, those Goldman Sachs July 160 calls (GPYGL) are now at 33 cents after closing at 11 cents on Tuesday.  We were out at $1.00 BEFORE earnings hit but I told you when they were at a dime and Goldman hits $160 by Friday they would be worth a buck again…or 900%.  We made our money but this is part of that cheap out-of-the-money explosions these types of trades can provide. 
This week has been overly bullish and there’s a chance we break new highs.  Then again, we were on the verge of breaking down after that famous “head-and-shoulders” pattern that the talking heads were preaching.  Which is why I tell everyone who asks me where I think the market is headed…I say, “I don’t care”. 
From that May 2008 article, the signs were all over the place that the Financials were going to take a dive and I put you guys in a ton of great trades.  I only bring this up because I want you to learn how to “trade outside the box”, not think, but trade.
I got beat up for taking the BofA trade early but now you see the method to my madness.  Folks, nothing comes easy and you have to dedicate some time to studying and setting up Watch Lists.  These are key.
Now that I got that off my chest…
Google will be interesting and it has been a stock I have watched since they became a public company.  I don’t do too many Google trades anymore because it’s a $400 stock but it is still a god stock to daytrade options with if you wanted because of the moves it can make. 
IBM, of course, holds the keys.  Watch Fairchild Semiconductor (FCS, $8.69) this morning and the August 10 calls (FCSHB, $0.35).  I would list the July 10’s but no way.  The August calls are much safer if this stock makes a run at $10.  Jobless Claims in 30 minutes.  Futures are slightly lower but have been positive.