Weekly Lotto Trade Commentary -  AAPL

These are the results from trades suggested on our "Current Plays" list.

Note: they are suggested entry and exit points! disclaimer   Profits Up!!

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LAST UPDATE: 8/31/12

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8/31/12 - AAPL had a bit of a struggle all day, but managed a positive close at 665.22 +1.37. I would have liked to see it closed above $666 and definitely above its open of $667.27—especially in the face of a market wide rally. Next month will be the much anticipated release of the all new iPhone 5. Rumors have it on 9/21/12 which happens to be options expiration. Hmmm, if that is the case, we could be in for an explosive Lotto trade that day...stay tuned! Ok, as I predicted, AAPL did sell of today and then put on a very strong rebound off the Bernanke comments and market wide rally. Once the news settled out, the stock reverted back to a negative tone slipping below yesterday's close but managed a slight positive close. I was in and out of this stock all day and just about wiped out my losses from Monday's trades.     Still a good long on the weekly chart, but any bad news or disappointing iPhone 5 sales will plummet this stock, so you better have some protective puts in place ahead of the release date. Here were my day trades for today:   Here are my weeks results: I came very close to wiping out my weeks losses. Next week I will get this account back into the green zone!   As you can see, I have very wide price swings which requires a lot of capital and skill to "work" my trades. This is why I cannot post them while I do them. Just about all of my subscribers would NOT be able to follow along at the pace I trade during the day. Just keep watch for my Lotto Plays and you will build an account large enough to trade like I do, and in the future, when I open my live trading chat room, you can follow along with me.   Here is the chart on the calls I traded. As you can see, the puts above had quite a bit more volatility.   Profits Up! The donFranko   ==================================================================================== 8/30/12 - Today was an interesting trading day. When AAPL gapped down this morning, I bought some puts and then jumped over to calls when it held $666 just like it did last week. I managed to get a perfect exit before the selling resumed and pushed the stock down to a close at the low of the day filling the gap up from yesterday. You can see from the 30 minute chart below how the stock stayed under VWAP pretty much the entire day. This is showing there is a good amount of weakness in the stock heading into tomorrow. I anticipate there could be some continued selling, so I will be looking for another day trade to scalp. I suspect that if AAPL does sell off again tomorrow, there should be a bounce at the $650 area. Watch the 660-670 calls for a trading opportunity. IF AAPL does a gap down and holds $650, then get on board the $660 or $650 calls and hope for a short covering rally into the close. This play will most likely end in a ZERO so buy only what you can afford to lose.   Here were my trades today: I still have quite a bit of ground to still make up, but I just need a couple of nice Lotto Plays to take care of that. My Sep 690 calls are getting whacked right now, but I am in those for the long haul and today I day traded enough to cover my losses.             Profits Up! The donFranko   ==================================================================================== 8/29/12 - I ended up closing out my weekly positions and will look for the next opportunity to make more profits on this stock. I have a lot of ground to recover but that wont take but a couple of Lotto Plays to get back. There was no action in AAPL today, but as long as it keeps holding above $670 each day brings us closer to another leg up. I will be ready to jump back in when the stocks makes a move up or down. For now, just keep watching my Lotto Plays section for the next round coming in October.         Profits Up! The donFranko   =======================================================================================  8/28/12 - No real follow through yet on AAPL but no big selloff either...good news so far. Unfortunately, I have weekly options so the time decay is killing me on this trade. I dumped half of the 680's taking a pretty good hit. I did a day trade on CRM making up some of my loss I took on my AAPL calls, so I am heading into tomorrow with a reduced loss for the time being. If things fail tomorrow, I will jump on some puts and/or calls depending on what the market brings me. FYI, following me on trades like these are not for the beginner or under capitalized trader. You need to just wait until I post the next round of Lotto Plays because  I tend to have large account swings with my style of trading. There will not be any real trading opportunities until next earnings season starting in October, so any trades over the next 4 weeks will be few and low odds small winners. Here are my trades so far for  this week: Looking over the AAPL charts and at this point, anything can happen, but with just a couple of weeks until the release of the iPhone 5. I suspect there will be one more push to higher ground. Of course this will be heavily influenced by the overall markets no doubt.     ================================================================================== 8/27/12 -  AAPL had a day and held the open; however, it failed to close above it. This is yet another new All time high for the stock and the rest of the week will be more of a proving ground. I picked up some 675 weekly calls to balance out my position but if this stock does not make a move higher in the morning I will be forced to close out the trade and will wait for another opportunity to jump back in.     8/27/12 6:50 am I am now long:   I grabbed a quick trade to test the waters:       8/27/12 6:25 am - AAPL won a patent lawsuit against Samsung! This turn of events explains the mega contract load on the Sept 700 calls! This could be the spark that ignites the fuel to send AAPL to the stratosphere! I will be watching the morning gap up and if everything holds in the first 15 minutes I am long this stock.   ================================================================================= 8/24/12 - AAPL started heading down this morning only to find more buyers once more and making a very nice reversal rally back to the $666 resistance. I was hopeful for a bust out rally to a new closing all time high; however, the stock just fizzed out after lunch and failed to achieve that new closing high. I suspected these plays were not going to be a winner, so I hope you heeded my advice and only took a small position. Of course, we know that 90% of these Lotto type trades will result in a total loss; it's the 10% that win and WIN BIG, so stay tuned and keep fishing with me...the White Whale will be coming soon! Here is a good lesson for you to learn from today's action. Just like last weeks trade, the puts opened to a good profit, and if you took it, then congratulations! If not, you can see all of the profits were quickly erased and ultimately these trades both expired worthless. This is why I say that taking profits on expiration day with OTM options is a much better bet than "hoping" you get a surprise rally by the end of the day. This is the typical result when the options are still OTM after the open on Friday's.     The calls never had a chance ;-(   The Sept 700 Calls still had a lot of volume traded today too:   Here are my thoughts on the charts:     Although these charts represent a very Bullish future, there were some interesting things that happened in the past couple of days. AAPL became the "Biggest" market cap company EVER, they paid out a dividend and the stock printed a new all-time-high; however, it did NOT close at or above that high on a daily chart, but if you look at the weekly chart, AAPL did close (twice) above that all-time-high back in April. Now, did you notice how many weeks it's been since that high in April? It's been 20 weeks which means next week, in my opinion, is going to be the pivot week (Fibonacci 21) that should determine the next move for this stock.  Also, if you count up the down weeks, you have 9 weeks and then the rally began (8 is a Fibonacci number). All these signs represent a very bullish opportunity, but remember, when the stampede is on, the pile up is coming too—you cannot fight the trend, but you need to be defensive when stocks trade beyond a Fibonacci 21. There are less than two weeks before the release of the iPhone 5; and this will be the driving force behind the stock next week. With other companies in the sector reporting dismal earnings and massive losses this week (HPQ, DELL,BBY) investors are voting (betting) with their money on AAPL. After all, they are "the company" that everyone is talking about. And with all that enthusiasm, there just does not appear to be any reason to keep it from heading higher. Just remember, most if not all of the time a stock rises on future compelling news and then drops after it's out—buy the rumor...sell the news. All this action in AAPL reminds me of the good old days when QCOM was "all that" and right about this time in 1999 the stock goes parabolic when they were added to the S&P 500, Fortune 500 and split twice—May 11, 1999 2:1 and 4:1 on December 31, 1999—and then the stock pretty much died for three years. Here is the split history for QCOM If you started with 100 shares here is how your investment has grown if you held on until today:     AAPL split history:   And here is what 100 Shares of AAPL has grown to if you held on until today (wow): Oh, and you would now be collecting an additional $4,240 per quarter with the new dividend! Will AAPL be on the same trajectory as QCOM was back in 1999? Hmmm...biggest company ever, new dividend, stock setting up to go parabolic, rumors of being added to the DJ-30 which would pretty much guarantee a split of at least 2:1. All I know is when things are this hyped up, there is a lot more of a chance to see (if you are holding shares) your account value drop rather than keep increasing. In the future there WILL be a massive opportunity to make big money with puts!   Profits Up! The donFranko ============================================================================== 8/23/12 - Afternoon update: Well, its looking like 666.-- proved to be the turning point for AAPL coming out of power lunch. Once AAPL fell below VWAP it was pretty much resistance for the rest of the trading day. The stock finally closed down ($6.24) on above average volume. Looking at the 15 minute chart, I see that AAPL put in a double top then started to sell off only to put in a second double top which is bearish. Here are the charts for the positions I took:     The PUT options had some massive volume today: I am still a little puzzled by the Sept 700 calls. There volume increased quite a bit by the the end of the day. That kind of volume comes from BIG money, so there is definitely a high possibility there will be some big news coming over the next couple of weeks—I plan on picking up some 700 Calls tomorrow.     Profits Up! The donFranko   =============================================================================== 8/23/12 - Morning Update: It appears that AAPL keeps hanging around the $666.-- price. Hmm is that a signal? There is still a large buyer(s) of the Sept 700 calls out there today. Could it be those buyer(s) know something?...hmmmm. AAPL is still getting accolades as a strong buy on CN-blah-C, so you cannot expect any short opportunities to be very deep because everyone is just waiting to jump on any dip, so keep any OTM puts inside a 4-5% move to have the best chance of success—I am looking at the $650-655 Puts and $675 Calls. I will be taking my positions after after Power Lunch is over.       Profits Up! The donFranko   ================================================================================ 8/22/12 - Today I am looking for a straddle play on AAPL. I suspect there will be one more attempt to make a new high today; and then the bigger move up or down will start. I am more inclined to play puts for Friday's action; however, AAPL has sold off the past couple of days only to be bought on every dip and pushed back up today on decent volume. It's always a bigger risk to take on Lotto plays when there is really no "big news" coming out, so you need to either sit this one out or just take on a small contract load (to your risk tolerance for 100% loss) and see what the market brings us on Friday. I cannot pick a side to overweight, but you know I prefer puts; because if the stock does sell off, it will be a pretty good drop. If you look at the charts below, you will notice that AAPL only put in a new all time intra-day high yesterday and the stock actually closed BELOW the previous days "all time closing high" which is a possible tell as to the next move. Tomorrow/Today will be the final tell, and if the stock takes off right out of the gate and holds the open on a 15 minute bar, then buy your calls and wait to buy the puts just before the close. Of course, if the stock fails to hold the open, then buy the puts and wait until the end of the day to get the calls. Last week, we had a very good Lotto trade, but some of my subscribers were bummed out that they did not hold until the end of the day. Sure, it was an awesome trade if you "gambled" but remember, we were still OTM at the open and well into the first hour of trading, so I always say, "Entry is Key...EXIT is everything! That is why I took my exit at the open, because I stood a better chance to make NOTHING! by "hoping" it would rally. With that said, my suggestion is to buy enough contracts so you can sell at least half and then let the rest ride, that way, if the stock does open strong, you can lock in profits and you now have some left over for any surprise bonus by the end of trading. REMEMBER, if you are not in-the-money (ITM) you are 100% guaranteed to lose any and all profits you do not take off the table. The Lotto strategy is for making "windfall" returns of 300+ percent  and with this kind of return, your accounts will get FAT with cash soon enough—Pigs get fat...Hogs get slaughtered!       Profits Up! The donFranko