Minggu, 30 Agustus 2020

Weekend Wrap Up for 08/30/2020

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Investment House Wrap Up
IH Daily
Technical Traders Alert
Success Trading Group
About Jon

In This Issue:

  1. Market Summary
  2. Targets Hit
  3. Pick of the Week
  4. Covered Call Options Play

Weekend Wrap Up for 08/30/2020

by Jon Johnson
Editor,
Investment House Daily, Technical Traders Alert, & Success Trading Group

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1. Market Summary
Jon Johnson

Excerpted from Thursday’s paid content of Investment House Daily by Jon Johnson.

A Test Is Coming

– Big tech leaders fade after the surge while recovery stocks bounce.
– Chairman Powell says what everyone knows -- the Phillips curve just doesn't work.
– Chips are not helping the market, as technical indicators are suggesting that a test is coming.
– Is this just a pause before another bounce? Will the recovery stocks continue to rise?

Over the past week, I have opened with jests about "historic" moves -- before the Wednesday blast higher, of course. Today, history was indeed made, and it was one of the most positive changes from the Fed regarding how we view economics I have seen over my lifetime.

I am, indeed, talking about the Fed and Chairman Powell’s virtual speech to the virtual Jackson Hole Economic Policy Symposium. In a nutshell, the Fed chairman jettisoned the Phillips curve's notion that rising unemployment means less inflation. In fact, he stated that there was no empirical evidence to support the notion. I have argued this point for all of my "woke" economic career, especially after I started correlating history to economic theory. 

I discussed this point for my paid subscribers on Thursday -- it is a fascinating view of the accepted theory. That is, the Phillips curve was accepted because it could be used to achieve certain goals by those who likely knew better and needed a tool to achieve their objectives. The Phillips curve was a useful tool, but only for purpose-driven ends, not for economics.

Technical Analysis:

NASDAQ: It gapped modestly higher, rallied and faded to a modest loss on the session. While it showed its own doji, it was rather loose. Thus, this doji was not as much an indicator as the one that appeared on the S&P 500's graph. We are 12 sessions up in this move off of the 10-day exponential moving average (EMA). Perhaps it can squeeze out another solid move -- the day after the pause will be crucial.

S&P 500: Six sessions to the upside was followed with a gap to a tight doji on Thursday. After a steady move up or down, a doji suggests change. It can also indicate a pause. If so, it is a continuation doji, as the move in place will continue. We will see which is true. While the other indicators suggest that a near-term top is forming, leadership is strong.

NOTE: The figures and information above are from the 8/27 report.

Watch the Investment House Video For This Week Here!

NOTE: The video is from the 8/26 report.

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2. Targets Hit

Here are several completed trades from Investment House Daily, offering insights into our trading strategy and the targets that we have hit this week:

Of course, it was a huge week for our plays. We just moved into a new position by buying Facebook call options last Tuesday. In addition, we still have our existing play as well. Of course, that play, along with Google, Netflix and others, all surged.

Facebook Inc. (NASDAQ: FB):  FB has made some big short-term moves as of late. One of these was in late July and another was in early August. So, when we saw the setup again, we were ready. We entered on Tuesday, as we saw the stock breaking higher to form a nice two-and-a-half-week consolidation of the last break higher. 

We bought November $270 call options for $25.70. Of course, FB gapped higher and surged 8.22% on Wednesday. As a result, we sold half of our position for $41 and banked a 59.5% gain -- that much in one session impels one to take some of the gains off of the table. We left half to test a bit -- what FB is doing now -- and then we will see if it can break higher once again.

Alphabet Inc. (NASDAQ: GOOG):  Similar to FB, we saw GOOG setting up for a break upside off of the 50-day moving average (MA). On Aug. 13, it started higher. As it continued the move that day, we entered. We purchased November $1,500 calls for $63.30 when the stock was at $1,522.34. 

GOOG paused during the next session and then started higher. The pattern was one big move, one pause, one big move and one pause. It also rushed higher during the Wednesday spurt, but it was so strong that we left it for another session. 

When it started a bit softer on Thursday, we sold half of the position for $151 and banked a 138% gain. We will let it test and let it run higher. If it does this successfully, we will likely pick up some new positions.

We also banked gains on many other plays, including in Netflix (57%), Mastercard (78%), Square (50%), Microsoft (68%), Peloton (72%) and Walmart (81%).

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Here are several completed trades from Technical Traders Alert, offering insights into our trading strategy and the targets that we have hit this week:

There were a lot of fireworks to the upside at the end of August, and we were able to bank a lot of gains on this run. The fact that solid patterns exploded higher in many cases made us a lot of money.

Salesforce.com, Inc. (NYSE: CRM): On Aug. 3, we entered CRM when it broke higher off a 50-day MA test and formed a short, three-week base. As the stock looked great, we entered by buying September $200 call options for $12.50. We did this because we wanted to play a pre-earnings run. As a result, we might possibly hold some positions over into the earnings results. 

CRM moved higher for a few sessions and then decided that it needed one more test ahead of earnings -- this is the "dip" in a good pattern that often precedes the big move. Just after mid-August, CRM started back up with some solid moves. This past week, it gapped higher on news that earnings would be released after the market closed. While we had a decent run to the top of the two-month range, we felt that earnings would be a blowout. 

Nonetheless, we opted for caution and sold half of the position ahead of earnings for $19.30. This allowed us to bank a 54% gain. Earnings were indeed a blowout. CRM then gapped higher and rallied. So, we sold another half of the position for $52.65 and banked a 320% gain. We will let the remaining quarter work to see if CRM can squeeze a bit more upside out of this news.

Adobe Inc. (NASDAQ: ADBE):  We entered ADBE on Aug. 25. At this time, it broke higher from the handle of a seven-week base that the stock had formed using the 50-day MA as support. We bought November $270 calls for $29.40 when the stock was trading at $484.34. 

Well, as you know, stocks exploded higher on Wednesday. ADBE gapped and surged almost 50 points. A bit after that initial gap and surge, we sold half of the position for $42.40 and banked a 44% gain. We are waiting to see if ADBE can deliver another burst higher after a brief test.

We banked gains on other plays as well, including in Best Buy (89%), Chipotle Mexican Grill (42%), Facebook (112%), Amazon (65%), Alphabet (56%), ServiceNow (43%) and Mastercard (60%).

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There were no trades in the Success Trading Group this week.

Still, now is a good time to become a member of the Success Trading Group. The system is geared towards bringing you consistent, short-term gains of 5-10% and you can expect four to six trades every month.

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3. Pick of the Week

GLD (Gold ETF -- $181.22; 0.00)

EARNINGS: 10/29/2020

STATUS: Double bottom. We all know that gold surged from mid-June to early August in a three-tiered move. After a strong run, it needed to test. After a tremendous gap lower on Aug. 11, gold caught itself and bounced to near $1,900. It then faded for the past one-and-a-half weeks to that same low and support at $1,800. 

The double bottom formed at the 61% Fibonacci retracement of the mid-July to early August rally. That pattern is a pattern that has a high probability of producing a bounce back near the prior high. On Wednesday, GLD bounced upside with a strong price move on rising volume. The possibility that it will make a run back to the high is very possible. We want to play that move, as it will give us a 65% gain on the options.

VOLUME: 10.022M  Avg Volume: 10.022M

ENTRY POINT: $183.63 Volume = 16M Target = $193.79 Stop = $180.21

POSITION: GLD NOV 20 2020 $185 Calls -- (50 delta)

To see the chart for GLD, click here!

To receive all of Jon’s picks in Investment House Daily, click here now to start your risk-free trial and save 50%!



4. Covered Call Options Play

Turtle Beach Corp. (NASDAQ:HEAR) -- Turtle Beach Corp. is currently trading at $19.58. The Oct. 17 $20 Calls (HEAR20201017C00020000) are trading at $1.80. That provides a return of about 14% if HEAR is above $20 by the expiration.

Learn more about our Covered Call Tables here!

About Investment House:


Investment HouseOnline Since 1999! Our investment newsletters are designed to reduce your research time and help you invest and trade profitably. Our strategies range in risk from rather conservative covered call writing, trading blue chip stocks, all the way to speculating with options to get quick triple-digit gains.

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Investment House Daily
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