Stock and Option – Intraday Comments Sept 28 2012 – SPX, INTC, MSFT, YUM, WAG, MCD, KO, IWM

The stock markets (SPX – Symbol S&P 500) opened with a bang this morning. Consumer sentiment numbers were good but Spain weighed heavily on the markets and then the Chicago PMI reading slammed the markets with a contraction that indicates recession levels since it fell below 50. Who would have thought such a big down after yesterday’s big up!

I received a lot of emails yesterday from investors wondering how to invest in a whip saw market? Yesterday the market climbed on the government finding 355,000 more jobs than they through they had. How do you find missing jobs anyway? I know a lot of people who would just love to find a decent paying job. I had a lot of investors yesterday telling me they were going long. About half took off all their hedges. Personally I think the better strategy is to tip toe in on dips and sell puts on the big cap stocks that if the market really pulled back you would own through a couple of years. But I don’t think I would be 100% invested. I still like the idea of keeping capital back for opportunities ahead and hold some bit of protection. I like my SPY PUT hedge but even today I couldn’t use it this morning.

Stock and Option Trades – IWM Russell 2000 – Trading For Pennies Strategy

Okay I have to admit, I did two trades with this strategy yesterday and another two today. The returns are good. I still don’t believe this is the strategy for everyone by any stretch, but for those who can sit in front of their computers all day, there does seem to be some merit to it. I will be posting my trades in the members section and this strategy will be discussed regularly through those trades. For those readers who have become members, make sure you follow along and ask questions. I am learning it just as many others are as well.

Still Waiting For More Pull Back – Coca Cola Stock – Symbol KO

Coca Cola Stock is still up but at noon with it trading back below $38 I still think there is enough pressure that it should get low enough to sell the $37.50 put for a great premium. I am still holding 5 $37.50 naked puts which I sold earlier this week. I want to add more.

Stock and Option Trades – McDonalds Stock – Symbol MCD

I already posted this one. McDonalds Stock got tossed about this morning and I took advantage to sell the $87.50 put into December. It may easily get that low but look at the chart. $87.50 would give me plenty of room to roll puts even if the stock got down to $85.00 and the $85.00 is the low for the past 12 months. I like both of these strikes but as I wrote about last week, I think the rally up in the stock is over for now. For put sellers who hate even the thought of owning stock, wait for it to break below $90 or hit the lower Bollinger band before considering Put Selling.

MCDonalds Stock one year chart

Looking for the best put strikes in the one year McDonalds Stock chart

Earnings Were Poor For Walgreens Stock But Investors Seemed To Like It

Walgreens stock is holding well considering a sharp drop in 4th quarter earnings although the adjusted earnings beat Wall Street estimations easily. Perhaps that’s what got investors excited. Personally I am staying with Put Selling. I have no interest in owning this stock.

The Deerfield, IL-based company reported fiscal fourth quarter net income of $353 million, or 39 cents per share, compared with $792 million, or 87 cents per share, in the year-ago period. Excluding special items, adjusted profit was 63 cents per share. Wall street expected 55 cents per share.

Revenue fell 5% from last year to $17.07 billion.

Stock and Option Trades – YUM Stock – Symbol YUM

Already posted this one during the morning. I sold puts on YUM Stock for the $57.50 strike into January 2013. I like the stock but not at $65. I won’t be selling puts higher than $60 at most.

Stock and Option Trades – Microsoft Stock – Symbol MSFT

Also posted this during the morning. I sold puts on Microsoft Stock into December at the $28 strike. If you look at my Microsoft Stock trades for the last while you can see the pattern of selling the $28 strike. It’s because I do not want to get higher into this stock. I think it could easily pull back to $28 – $29 even with Windows 8 on the horizon.

Comment On Intel Stock – Symbol INTC

As readers know, I bought stock yesterday for a one day flip and sold puts. I have a large Put Selling position in Intel Stock with about 60% of those puts in the money. The fall this morning was interesting after yesterday’s big push up. Note how it got all the way down to $22.59, right back to the core of support. Last time I looked it was up at $22.77 but still down from yesterday.

If the markets can improve Intel Stock will rise up over $23.00. If though October proves poor for stocks, Intel I believe will break the $22.00 support level. I will try to write-up an article shortly on knowing when to roll put options forward on Intel Stock. It will be long and have to go into the members section.

Comment On BMO Stock Covered Call Trade

I have to finish this article but just a word that I still like this covered call trade and I have entered into it. For those who missed this trade, use this link and scroll down to BMO Stock Leaps comment.

Stock And Option Intraday Comments Summary

That’s it for the comments for now. I hope my posting of the trade alerts helped some readers know what I am up to. Twitter is good as well and I encourage anyone with a twitter account to join me. Don’t forget, you trade at your own risk. All my comments are my ideas only and not advice or financial recommendations. Remember investors can and do lose money. Don’t invest with what you cannot afford to lose.