10/18/12 - I have seen a lot of crazy stuff in my years of trading, but what happened today with GOOG is one for the "seen it all" record books. WOW, I sure am glad I put on my trades this morning, but really bummed out if my subscribers were waiting until the close of trading. As you know, anything can and will happen in the trading world, but this was a sad disaster. Had the earnings came out after the bell, then the trades I had posted would have made a lot more money. I took profits off the table today and 100% of all my calls are paid for!

At one point I was actually up over $70k when the options spiked , but there would have been no way I could have gotten filled; and shortly after that they halted all trading on the stock.

All the talking guru's on CNBC are saying it's a bargain now...buy...buy...buy! Maybe it is, and after the CEO spoke today the stock has moved up in after hours. I have seen this before with GOOG where they missed and the stock rose back up the next day. No way to know for sure, but this company is heavily controlled by institutions and they will keep investing in GOOG for the long term.

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10/17/12 - Two days of buying gives us some insight that fund managers are bullish heading into earnings. It takes a lot of money to move a stock this big, and that kind of money does not get put into a stock this highly priced the day before an earnings release unless there is a very strong reason to. I am very optimistic they will blow out this quarter and send the stock ballistic, but I also know from the past that if they miss, the drop will be far more than the pop...unless they also announced a split.

Notice the close today? Well, it was at a Fibonacci number $755.49. I always view any close or intra day pivot with a Fib number as significant. Call it superstition, but it has always served me well! With the the last two days being strong up days, and if tomorrow is a continuation, then the bias has to be long. I will have a put under just in case, but I will be over weighted with calls.

If the stock opens up tomorrow and holds it by 7:00 am

then I will buy the calls and wait until the end of the day to buy the puts.

Options volume picked up quite a bit today on both calls and puts. The DOTM puts had some strong volume today too.

Profits UP!

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10/16/12 - Here comes the final push into earnings on Thursday! Tomorrow I will look over the options for my next Lotto trade picks. I will open my positions on Thursday in the last hour of trading.

Profits UP!

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10/15/12 - The week has started and GOOG is stuck in the horses stall with a hangover. The markets were up today and GOOG gapped down; however, it did find some footing and managed to move over VWAP and closed with a strong move in the last hour; however, the stock still closed down on the day. The daily and weekly chart shows a long tail Doji, so it's anybody's guess where GOOG will settle in by Thursdays earnings release.

Here are how the options open interest is going:

Profits UP!

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10/14/12 - As the weeks starts out, I will be watching GOOG for my entry for what could be the biggest Lotto Play I have picked this year! The best thing we could hope to see is for GOOG to hold the line at the daily 21MA and quickly race up to the all time high at $774. If GOOG does open up tomorrow and holds the open by 7am, then I will buy 1 Nov 800C as I see there are 17K 810's which indicates major resistance so I want to be assured I will be in-the-money should GOOG make its move to the upside. I will have my puts in place for the weekly on Wed or Thursday so be sure to check back regularly.

NOTE: I do a lot of my study late at night, so you will need to check for updates regularly late in the evening or before the market opens to make sure you get my most updated posts. Be sure to always refresh your page (F5 key) when you are checking for updates!

Profits UP!

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10/11/12 - Test, bounce, fail? GOOG did not make the drop to the 8MA on the weekly chart; which is what I would like to have seen yesterday, instead, it made the daily 21MA the battle ground; however, today the 8MA on the daily chart was the stopping point.

The weekly chart still shows

Weekly options have been flat with the Open Interest on the puts lightening up.

Looking at the Nov options there are definitely a lot more investors Bullish on the future after earnings. If they miss and disappoint then the drop cold be a BIG one.

Profits UP!

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10/9/12 - So far this weeks trading for GOOG has been a carbon copy of AAPL's fall from investor grace. If you look over the Daily chart then you can see another (weaker) Evening Star Doji pattern that is proving to be most reliable for bearish reversals.

With earnings coming next week,  GOOG could be taking a breather before making one more push higher. As I pointed out below, this is the 13th week from this massive run up so its almost a given that GOOG would pull back. With today's solid drop (meaning no real topping tails) I am expecting GOOG to make a move down to $720 tomorrow to test the 8MA.

After hours indicating more selling coming:

Here are how the options are trading this week:

The Oct 800's I am tracking had some strong volume today:

Here is an interesting tidbit for you to look at. As you know I love to trade around the Fibonacci numbers and I look for them at pivot points. Well, here is confirmation for you! Once GOOG broke above the 200 MA on the it has reversed course exactly 55 days later.

Here is the 15min chart. Notice how VWAP was resistance all day and actually for the past three trading days. Once GOOG gets back over VWAP I will look for long positions.

Profits UP!

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10/7/12 -  The big day for GOOG is fast approaching (10/18/12) and we will stand ready to make, what I hope, is a massive profit yet again on one of my Lotto Trades!

GOOG is looking like it could become the stock of the year as it beats out AAPL for top spot by 12/31/2012. Looking over the massive momentum in this stock the last few weeks, there should be a measured move on a beat and a major drop on a miss. Of course, we must be on both sides of this trade, so the key here is picking the correct strike prices.

As you may know from my training sections, I have always said that Entry is Key...Exit is Everything ^TM  and with that said, you have to know where to place your trades in order to get the most profit potential. The way we do this is to follow the money on the call side and buy puts above the closest major moving average (100MA or 200MA) on the daily chart. Because we speculate with weekly options that typically expire the next day or two, we must be in-the-money (ITM) to assure we can get a fill on all of our contracts and lock in massive profits. When a stock like GOOG gaps up and rises on earnings, it's typically around 8-12%, but when they get whacked, it can easily be 15-50% depending on the severity of the news event.

Ok, first we will look over the charts to determine our best choice for the option strikes.

I like to look at the Weekly and Daily charts to determine where I can find the most support. Then I look for the options that are above that support on the daily  chart that I can have the best possible odds that I will be ITM. Remember, if you are not ITM on expiration day, you are never guaranteed to get a complete fill if any at all.

In the charts below I will begin my analysis of GOOG:

In 12 weeks, GOOG has made an astonishing $205.90 move. This move has been a steady climb vs. a parabolic  one, so if they beat in a big way (maybe announce a split?), then the stock could easily head to $1,000 per share by the end of the year. Notice how the volume has been steadily increasing into this move and this week it dropped off quite a bit. This indicates big money is concerned and that could be the clue we are looking for.

In this chart I show you how the Fibonacci sequence plays a very important role in a stocks movements and changes.

Here is the monthly chart and it's looking like we are headed for another long-term rise in this stocks price.

It's a well known fact that the stock markets trade on or close to the Fibonacci sequence: 1,1,2,3,5,8,13,21,34,55...

Looking over the daily chart I find a lot of confirmation of this in my mind. All I know is if you want to use a benchmark indicator to help you determine direction of a stock, the Fibonacci sequence is the most accurate one I use. I particularly take notice when a stock pauses or pivots at the 5, 8, 13 and 21 Fib's. The next thing I look for is a Bull or Bear 180 event to confirm the next measured move.

For example look at CMG and how the Fibonacci numbers played an important role in the outcome of a massive free fall from institutional investor grace.

Will this be the case for GOOG? I do not necessarily think so. After all, by comparison, CMG is a "fast food" company and well, GOOG is the 5 star class envy of the all-you-can-eat technology buffet! There are too many things going on with this company to leave anything to chance; and with the future of internet technology being pre-set by them, well, the universe is no limit...or so is seems to anybody in the investing world.

So, with that being the criteria, it is definitely looking like GOOG may become the Berkshire Hathaway of the Tech stocks. Question is, will they split their stock or NEVER split it just to prove a point!

I plan on making a fortune with Lotto trades as stocks like GOOG march on into the history books. I hope to make some of my own history that started me off on my Lotto Trade strategy back in 2006. The trade below was one I posted to this site more as a jest of "what if". I did not do this trade, instead, I did a trade on AAPL with my then $8k trading account. I made a very nice $5k profit that week, but WOW, what could have been changed my point of view on trading short-term options forever. 

After this happened, I have been on the hunt from that day to repeat returns like that...and boy has it...several times. What's even more exciting is when Weekly Options were opened up. This has made trade opportunities like this one happen multiple times a month!

Here are this weeks options:

The $800 strike already has a substantial amount of open interest. I will be watching this strike closely as the week moves forward. I believe it will take a lot more than a mere meet or slight beat for GOOG to make a measured move of 10% or greater to the upside. This week will be the setup for the options going into earnings. As usual, GOOG will announce the day before October expiration and if they miss the drop could be a massive one!

Based on today's option pricing and chart, let's assume GOOG trades flat from here into earnings and then beats by a wide margin. If the stock were to make a 10% move higher, that would put the share price just under $844.00, and these $800 options would be worth at the minimum $43.00 by Friday 10/19/12.

Here is the potential if I am correct:

In the past (pre entry to the S&P 500) GOOG would move upwards of 20% on a blowout, but now that the stock is owned by so many intuitions, the moves are more controlled (8% - 10% typically); however, when things go bad, the stock can drop a lot more than it will typically rise.

Speaking of institutional ownership, GOOG still holds the sweet spot for Institutional Investors which means the stock can have dramatic moves when earnings news is released.

The direct competitors have:

FB    47.9%

YHOO: 73.50%

AOL: 100%

MOVE: 81.20%

SINA: 77.90%                                                      

Looking over the options for the October monthly expiration, we see there is a massive amount of open interest at the $800 strike—this will be the battle ground for the stock this week if it rises to the occasion.

Another clue I use to determine if the stock will make a large move to the upside is the short interest.

Short Squeeze shows:

Yahoo Finance shows:

NASDAQ shows:

When I see stocks with 3 or more days to cover, that is when you get a larger measured move on an earnings blow out.

Currently, there is not that many investors who think GOOG will be heading lower anytime soon. This is where you have the potential to make a fortune on the puts if they disappoint by a wide margin.

I will be watching the $675-$690 puts as we get closer. I hope GOOG heads higher this week so these puts get really cheap ($0.10 cents cheap) because if GOOG drops like CMG, did we could have a massive Lotto Trade winner!

Here is the potential if I am right?

I will be watching this stock closely all week and tracking the open interest in the options for clues to what strike price I think will give us the best opportunity to profit from.

Stay tuned!

Profits UP!