While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
If you were on John's webinar today, you probably heard me say that I felt we would get the reversal in the market.
There were a few technical reasons why I felt that way, which I will share on next week's webinar.
Suffice it say that we are getting the dead cat bounce.
The S & P bottomed at 1,872.23 and and is now up just under 11 points as I write this.
Based on the this action, I would like to make a suggestion on Apple.
Apple is reversing off the bottom band today.
I would like to suggest you buy the February 5th- $97 Calls.
They are quoted say $.42 to $.44 as I write this.
Limit the trade to only a 5 lot, which is a risk factor of .22% based on the $100,000 portfolio.
It is possible that Apple may pullback tomorrow morning and if that is the case, I will add to the position.
The upside could be a move to the $101 area, which would mean these calls could be worth about $4.
Do not overtrade this position because these are the front week options.
