Stock And Option -Intraday Comments For Oct 12 2012 – YUM, IWM, BNS, FTS, INTC, MSFT

No bounce and no rally yet, but the stock market indexes are holding their own. Meanwhile The Russell 2000, symbol IWM is down almost a full percent. When the Russell 2000 pulls back normally investors are getting more concerned as they bail on many of the junior stocks that make up the Russell 2000 ETF.

Meanwhile though the market direction is encouraging as the heavier selling of earlier in the week has slowed and the sellers have stepped back a bit.

I notice though that while both the fast and slow stochastic indicators show extremely oversold and are confirmed by the Ultimate Oscillator, MACD right now remains solidly bearish which indicates more downside remains before the correction ends. I am selling only small groups of puts and keeping my cash at the ready in case some great bargains end up out of this correction. The S&P this morning is playing with breaking the 50 period moving average. If that happens there should be a bounce and then probably more selling down to the 100 period moving average.That could provide bargains here and there. But right now the market looks like it wants to try to hold here. That will depend on the bears.

Stock and Option YUM Stock

Meanwhile YUM Stock which saw terrific earnings and way too big a rally has started to come back to earth. You have to wonder about investor mentality that just never changes. Why would anyone buy into a 7.4% jump into YUM Stock. If you are that bullish for goodness sake consider Put Selling the $67.50 naked puts. Investors never learn when it comes to investing.

YUM Stock Jump

Stock and Option IWM ETF

I did two trades today in the IWM ETF using the Trading For Pennies Strategy. Members can review them both here:  Trade 1 and Trade 2. I am almost done writing up the strategy paper and should have it available later tonight. Today’s trades followed the exact strategy and both were excellent. One investor wrote me and told me he is using $6000 and has made $2500 today. He is ecstatic but remember don’t overtrade. I found results were far worse when over trading.

Stock and Option BNS Stock

Scotiabank Stock which trades under the symbol BNS on both the TSX and New York has been weak again today. I am continuing to wait for the chance to sell puts at the $52 and $50 put strikes.

Stock and Option FTS Stock

Fortis Energy which trades on the TSX has had three days of above average volume and is still holding above $33 but today it fell to $33.01 in the morning. With so much volume do you think someone is trying to get out? I am wondering about Put Selling the $32.00 if the $33 breaks. It is a wonderful utility stock but something is up I think.

Stock and Option INTC Stock

Intel is back again setting new lows. Earnings come out on Oct 16 so maybe there will be a bit of a pop if they are good. However a lot of technical damage has been done to this stock and now below $22.00, trading at $21.48 this morning, the stock will probably fall to below $21.00 before trying to bottom again. I have rolled my puts and reduced the number of contracts and I am waiting for a bottoming signal so I can use the freed up capital to sell more naked puts out of the money on Intel Stock.

Stock and Option MSFT Stock

I did some puts today on Microsoft stock as I am bringing back the put ladder for this stock. It remains reasonably strong and I am holding all my naked puts still, but I wanted to add a handful here and there. It isn’t that I believe the stock is going to climb back to $30.00 although any upswing in the market will do that, but I think there is a lot of support at the $28 to $29 level which could make put premiums quite good on each deep down. I have done so well with Microsoft Stock and indeed Put Selling Microsoft Stock has been better than owning gold for the past 9 years now so I want to keep this stock on my radar.

Stock and Option Intraday Comments Summary

That’s the stock and option Intraday summary for now. I will post my Microsoft trades shortly. I am working on the IWM Trading For Pennies Strategy article so I have not a lot of time.