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Dear Friend,
I have submitted an article to Seeking Alpha that I would like to share with you.
Terry
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| Option Tip of the Week |
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How to Play Google Options Post-Earnings
Here’s the link – Google Post-Earnings Option Strategy
This strategy will gain 20% in 60 days as long as Google (GOOG) doesn’t fall by more than $50 during that time. The 20% should come if GOOG falls by $50, remains flat, or moves higher by any amount. Once earnings are announced, the stock usually quiets down a bit, making this strategy an attractive one, at least if you are bullish on Google.
A properly-devised options strategy can protect you against a $50 drop in the price while leaving you plenty of room to prosper if the stock continues to rise over time.
Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.
You can see every trade made in 8 actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
I look forward to having you on board, and to prospering with you.
Terry
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| Andy's Market Report |
It looks as though Helicopter Ben called the top, at least for now.
Since the announcement of “QE3 ‘til infinity” the market has managed to move lower. Yes, we did see a bounce immediately following the announcement from the Fed, but as of the close Friday all of the gains have vanished.
The question is, “will the decline continue?”
The bulls certainly hope not, but if you have been paying attention to the recent price action you can’t help but think this market is headed lower over the intermediate-term. As for the short-term, well, that’s a different story. Every major market index has pushed into a short-term “very oversold” state which typically precedes a market rally. I would expect to see the same type of short-term bounce early next week. Once the bounce occurs we will have to reevaluate, but again based on the recent price action where every bullish attempt is met with sellers I would not be surprised to see a deeper, possibly to correction 1390- 1400. If that breaks, then look out below because the gap from 7/26 comes into play at the 1340 level.
Remember, we have only seen a 3.1% correction since the high back on September 14th. After a strong rally, a deeper correction should not surprise anyone.
"If we keep getting negative reports, selling will pick up,” said Ken Polcari, managing director at ICAP Equities in New York. "Guidance is cautious so people are taking money off the table."
Expectations are low for S&P 500 companies' results. Quarterly earnings are forecast to fall 3% from a year ago, compared with a 2.1% drop estimated at the start of the month, according to Thomson Reuters data.
Next week should be very telling as to where the market is headed over the next month or so. Earnings season enters full force as more than 230 companies are scheduled to report their third quarter results.
Again, watch to see if we get the expected oversold bounce. If so, watch to see if the market can break through recent highs, because if it struggles and breaks down immediately that is a sign that we could be in for quite the correction.
But we must remember, as options traders, fear is often our friend. Fear increases implied volatility which in turn increases options premium (prices).
Higher prices mean that we can sell options for better prices thereby making greater gains or creating a larger margin for error. And this is why strategies like the ones Terry employs are well-suited if the market happens to take a turn for the worse. |
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| Overbought/Sold Condition Report |
Overbought/Oversold as of October 13, 2012
• S&P 500 (SPY) – 22.6 (oversold)
• Dow Jones (DIA) – 24.3 (oversold)
• Russell 2000 (IWM) – 24.9 (oversold)
• NASDAQ 100 (QQQQ) – 16.8 (very oversold)
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| Testimonial of the Week |
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"I am a new subscriber as of August of this year and have been very pleased with the service provided by Terry's Tips. I started an auto traded account with thinkorswim and have been impressed on how well the actual fills mirror the recommendations. My portfolio is up over 14% within the first 60 days -- way above my expectations --- Jeff
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Thank you again for being a part of the Terry's Tips newsletter. If you are interested in signing up as an Insider, visit Terry's Tips today for details.
Sincerely,
Dr. Terry Allen
Terry's Tips
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