Blog Post On: 6/23/2010

Using the Option Search Engine on this site Troy, from The Money Tree option web site, uncovered a great potential option trade yielding over 2% income per option sold in 23 days.

The trade is a Naked Put (NP) on APC - Anadarko Petroleum Corporation. APC has a market cap of 19 billion, trades at a 21 PE with EPS of 1.87 a share.

Since the Naked Put trade is over 18% out of the money, with 23 days left till expiration the risk of assignment should be low. This in turn makes the risk/reward very favorable that the option should expire worthless and the seller of the NP should retain all the premium.

Here are the details of this potential trade:

Option Type: Naked/Cash Secured Put - See a NP at the $32.50 strike for .68

Stock Price: 39.60
Strike Price: 32.50
Return on Investment: 2.03% with 23 days till expiration
Option Out of the Money: 18.46%
Downside Protection: 20.12%

To find more trades like these check out the option search engine on this web site by clicking here.

 

Blog Post On: 6/20/2010

All the major indexes are touching Resistance levels hit back in early March. The last two trading days of last week the markets basically stalled on resistance. Overall the downtrend was broken and RSI has been supportive of the move higher.

Stock Market Timing Model (MTR-TM): Market Up Signal on 6/16/2010

• MTR-I: Week over week +2.5%
• RSI:  52.57 supports the up move. 
• MACD: -14 moving up toward zero. Crossing over zero supports more upward movement in the market.
• Volume: Held up for two flat days of trading.

All major indexes touching resistance.

Volume last two trading days about as flat as the market

Blog Post On: 6/13/2010

There was a news leak on Friday out of China that reported a 50% increase in exports and this helped push the markets up. Decision economics reported that they reduced allocation to stocks from 70% to 60%. That action seems a bit late but it shows there is uncertainty in the markets.   

All the major indexes broke the downtrend but did so on light volume. The Advance/Decline Line also broken the downtrend.

Stock Market Timing Model (MTR-TM): Market Down Signal on 5/6/2010

• MTR-I:  Week over week (wow) +2.32%
• RSI:  Value 47. Crossing over 50 is bullish. 
• MACD: Value -50.  Below 0 is bearish
• Volume: Volume across the board has been light. There was limited support for the recent up trend. This could be the continue theme of Euro fears.

 

All major indexes except the NASDAQ broke the downtrend.

 

Volume light across the board.