Monday Update: Two Earnings Trades to Watch


Two Earnings Trades To Watch


AAPL reports earnings tomorrow (Tues.) after the close. The portfolio is holding the March $150 put which has only been as high a +19% and is currently at about -33%. As is always the case, earnings are a wild card. To complicate matters further, a price drop below $151.50 triggers a repeat Sell. 

Action: We will leave the current AAPL short trade as is with the caveat that anyone who does not want to roll the dice with earnings can exit the puts now with a modest loss with an opportunity to get back in after earnings and in sync with a repeat Sell. 


AMD  is in a similar position as AAPL as it reports earnings after the close on Tuesday and a stock decline below $19.60 (currently trading at $20.25) will trigger a new Sell Signal.

Action: After earnings on Wednesday morning if AMD is below $19.60 we will be buying the March 15th $20 Put. 

Weekly SPY Sell Signal Pending

The same pattern that triggers the Intermediate and Short-Term Signals can also be applied to weekly price bars. On the SPY chart below we see the longer term trend regression channel that has been containing prices since the 4th Quarter 2018 market highs. A down week this week will likely send prices toward the lower channel line, toward SPY $230, before March monthly options expiration.  



This is a follow-up on this past weekend's discussion on the 35/75 trade management idea. The portfolio table is showing 12 March expiration trades. Of those 12 trades, 8 have exceeded +35%. I have received a lot of positive feedback from subscribers who prefer to have a predetermined exit strategy in lieu of the more open ended strategy. It makes this system much easier to implement without taking much, if anything at all, from overall profitability. Thanks to all who have written in.