Coronavirus The spread of the coronavirus is now extending around the globe, increasingly frightening international health officials and soon to follow, global financial markets. It could get even more alarming over the weekend as although there are "only" 1,200 confirmed cases, there are 56 million people in China in quarantine (under travel restrictions). It makes you wonder, "What do they know?" The more serious speculations involve comparing the current coronavirus outbreak to the Spanish Flu, where as many as 50 million people perished worldwide. Although not a true "Black Swan" in the traditional definition, it's close enough to keep us informed and in front of the situation as best we can. Next Week Next week should be active for us, with Tesla earnings and the potential for the coronavirus to overwhelm the news cycle in a very negative way. The extent of the latter is a big unknown and there are some stocks (DIS, AAL, MGM) and the list goes on) that are particularly vulnerable. If the opportunity presents itself, we could get other set-ups, but for now both services have positions providing some protection on the downside. Tesla Earnings Tesla reports 4th Quarter 2019 earnings on Wednesday after the close. It almost certainly will move the stock sharply, one way or the other, and maybe in both directions before it's over. Generally stocks will retrace whatever they gain or lose the day after earnings release, which suggests that a stock being held for long-term gain should be simply held over the noise of one quarter's numbers. But when it comes to options if there is enough movement to the downside stops could be hit. Currently we have only one open option position, the Jan 2021 $420C with a trailing stop at $105.89, which if hit would result in just under a triple over two months, giving new meaning to being, "stopped-out." TSLA Trading Below is the TSLA Stochastic entry chart showing a potential new entry in the days ahead. The global health watch and Tesla earnings will both affect the behavior of price and its stochastic this week. That doesn't make any signal less advantageous, but it does raise a caution flag as far as jumping the gun. [PRO members: We've lowered the next short-term Buy entry price level. Please see your email for details.] Open Trades: Premium Service Open Trades: PRO Service
