Sell to open May 15 strike puts. Bouncing off 23.6% retracement. Support at 16 and again at 14.
global supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors
ARM Daily Chart
We are getting a bounce off the 100 day moving average today. Moving averages can be areas of support/resistance, but I’m not advising you trade solely off of this. The short term trend is still down. This is what I’m looking for:
Trade Indicator
We hit 11,696 for a low today. I mentioned earlier that 11,800 was the first area of support we could expect. If this area doesn’t hold we will be looking at the area of 11,300 which is the 38.2% retracement level.
DJI Weekly Chart
I closed out my short put position on JASO Friday before close at a small profit. I was short the March 6.00 strike puts. They were still out of the money and we are only a week before expiration but these solar stocks can move fast and I’m not taking any chances. This could easily get to 5 next week – especially with the market in short-term correction mode. No reason to be long or even have a neutral bias at this point.
The solar stocks have been hit hard these last couple weeks. ENER is down over 25% this week.
JASO Daily Chart
This is a weekly chart of the the Dow. I use the Dow because my indicators are less chatty than they are on the S&P or NASDAQ Comp.
I drew a fibonacci retracement off the lows of last June. If this short-term correction continues we can anticipate some support at ~11800 (23.6%). That will likely coincide with a rising 100-day moving average as well. It could take a couple weeks to get there though. And keep in mind that 11,800 is just an AREA of support. Round numbers are also logical areas of support (12,000 e.g.). We have some longer wicks on these last few bars. The market is testing these lower values.
I only look at the Dow to get market direction and then I make decisions on individual stocks from there. We are a week out from March expiration. I have no plans for any adjustments yet as none of my positions are in the money.
It always comes down much, much faster than it goes up.
DJI Weekly Chart
We finally rolled over on the Dow Jones weekly chart. Short term trend is down, but the long term trend is still most definitely up. Using history as a guide (the following chart) we can anticipate a possible correction with a duration of a couple weeks. I pointed out a few of the corrections in the past 2 years on the chart. Yellow line is 100 day moving average. As long as that line is ascending I have a bullish bias.
My L1 watch list keeps growing daily. It is still too soon to pull the trigger though. I’m still hoping to fill April inventory, but my last few trades have been June expiration. A 1-3 week correction will help my chances of getting some decent April premiums.
DJI Weekly Bars
Sell to open PCX June 16 strike puts. I made this trade before close yesterday. Support at 21 and again at 16. The April 21 strike puts would be a riskier alternative if you are so inclined. ANR is another option in the ‘Industrial Metals & Minerals’ industry.
This chart is from yesterday. It is up ~2% today.
PCX Daily/Weekly
No trades today. I’m anticipating next week to move on a few of these. Here are some ideas to monitor from my current watch list.
Watch List
http://finviz.com/screener.ashx?v=211&t=AIG,ANR,AONE,BRCM,BSX,JRCC,MSFT,SWN,TIN,WFR
Payday once again. I’m a little late getting this posted.
I had the following options expire in February. This was a fairly light month – they seem to alternate like that. January was pretty big, February light, and now I have a lot if inventory expiring in March – and April is light. Not sure why that is exactly. I need to focus on getting my April inventory filled in the next couple weeks.
AMR Corporation (AMR) – Feb 7 strike puts expired OTM. I’ve done well with AMR over the years – and airlines in general for that matter. The airline charts look horrible right now though. Probably the cost of fuel. I sold these back on 11/24. This is a 3 month return of 4.28% *. This will get moved back to my L3 list.
AMR Chart
Steel Dynamics Inc. (STLD) – Feb 13.00 puts expired OTM. I sold these back on 11/04. This is a 3.5 month return of 2.69% *. This will go back to my main watch list.
STLD
McMoRan Exploration Co. (MMR) – Feb 13.00 puts expired OTM. I sold these back on 12/21. This is a 2 month return of 2.46% *.
MMR
MGIC Investment Corp. (MTG) – Feb 9.00 puts expired OTM. I sold these on 1/3. BIG sell-off the week of Jan 17th as you can see from the chart. I believe it was an announcement regarding earnings but I honestly don’t know. This is exactly why I sell puts – you have control over your purchase price. I maintained composure and didn’t close these out. I’m short the March 7 strike puts in a different account. This is a 6 week return of 3.11% *.
MTG
* The return is calculated using the premium I received from the sale of the options (less commissions) and the capital required to pay for their possible assignment.
Here are a few ideas from my watch list. AIG, ANR, F, JRCC, SSRI, XRX. They aren’t quite there yet though. Be careful with some of these names – they can move fast.
Watchlist
Sell to open CMC June 13 puts. I had mentioned CMC at the end of January as a potential opportunity.
CMC Daily/Weekly