12:00pm (EST)
Futures were showing a lower open for Wall Street this morning following Friday’s push to resistance by the bulls. The bears have been motivated on Monday’s and are trying to extend their dominance to start the week but the indexes are off their lows.
The charts from this morning show a solid uptrend is still in place but we are keeping our guard up for a possible pullback over the next week or two.
Shares of Apple (AAPL, $640.01, down $12.58) are down nearly 2% and have traded to a low of $636.66 today. We said to watch for a break below $650 this morning for a possible put option trade but shares started sinking before for the open and started the session at $647. We were hoping shares would open flat or slightly higher so that we could get a discount on the WEEKLY Apple October 600 puts (AAPL121012P00600000, $1.45, up $0.55) but we held off on the trade.
The puts opened at $1.00 and have traded up to $1.71 and we have said shares could test $620 over the near-term. Obviously, these puts are way out-of-the-money and they expire this Friday so this type of WEEKLY option trading is very risky but we wanted to show you how to make a quick 50%-75% on a 2% move in Apple.
Now, if the iPad “mini” is announced this week and shares cross back over $650 then it will be time to buy call options again.
As we head towards the turn, the Dow is down 37 points to 13,572 while the S&P 500 is lower by 7 points to 1,454. The Nasdaq is lower by 25 points to 3,111.
We have a lot to talk about today with our current trades as two of them were closed earlier this morning for some nice double-digit profits. First Solar (FSLR, $20.51, up $0.44) fell 11% on Friday and we got some of that action but shares are rebounding today after holding $20. We were able to make 26% on a put option trade but are a little disappointed we couldn’t squeeze more out it.
We also had a call option trade that made us 33% as we continue to say this is a stock picker’s market. On that note, we also have a NEW TRADE we are trying to get into so let’s go check the tape.
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