Cody Kiss & Tell: Market turn, indicators to buy, lots of stocks

Live Q&A Chat at 2pm ET on the newly updated Trading With Cody iPhone App, the Trading With Cody Android App or at http://twc.scutify.com. If you have any questions about how to log in, just email us at support@tradingwithcody.com

Q. Which strike prices did YOU buy with your call options today and at what prices did YOU pay?

A.  I bought June and July expiration call options and here the exact month and strike prices for each: Under Armour UA July call options with strike prices around $65 to $70. Facebook FB June call options with strike prices around $95 to $100 Sony SNE July call options with strike prices around $22 to $23.  I paid about $1.50 for some July $SNE Call options with the $22 strike price. I paid about $6.50 for the $FB June call option with the $97.5 strike price. I paid about $5.25 for the $UA July call option with the $70 strike price. That’s all I got filled so far.

Q. I sold a house in December 2015. I am sitting on these funds waiting to put them to work in the stock market. What “indicators” should I look for to determine when to buy? I don’t want to invest while the knife is falling.

A. I’d start very slowly but I’d look at starting to scale into some of the best Revolutionary names. You don’t have to put all that money to work at once and I wouldn’t think that’s a good idea. Rather, you can start off with buying maybe 1/5th or 1/3rd size tranche positions, buying only a fraction of the shares you eventually will want to own in each of the names you choose to buy. Depending on your age, your income relative to the funds from that house, your age, your upward mobility, your inheritance potential and so on… you can decide how patient and conservative you should be with that money. Depending on where you fall in answering those criteria, it might make sense to just keep most of it in cash.

Q. I’m wondering when you think we’ll see a market turn? The TV folks have been right for weeks, saying we’re going lower. They’re now saying we’re going down another significant amount. Your thoughts? Thanks.

A. Like I said in this morning’s Trade Alert where I nibbled on some longer-dated call options: “We have quite an interesting set up here. On the one hand, we see the markets just this morning finally getting panicky which makes me want to put some money to work. On the other hand, we’ve got energy crashing yet again with oil down -7% on the day below $27 a barrel and serious Black Swan currency and debt threats developing as a result of that ongoing oil crash. Then again, some of those aforementioned long positions are at levels at which I’ve been waiting patiently to see so I can add to them. But then again, we still haven’t had that down -800 day on the DJIA that I’ve been looking for before I’d put much money to work…” “Look, we don’t have to commit fully either way. We don’t have to be aggressively long or aggressively short. We don’t have to try to catch every move in the markets or make sudden rash decisions to sell all our stocks and mutual funds when markets have tanked. We don’t have to try to catch the exact bottom in the markets and wait 100% in cash and shorts until then. This is why I repeatedly preached that we wanted to Sell When We Can, Not When We Have To back throughout 2014 and 2015 before stocks tanked.”

Q. Dr. Freud would say you have some inner hesitancy issues about buying those SNE calls. (Thanks.)

A. That’s funny, that’s the second time in five minutes I’ve been accused of a Freudian slip. Just had this exchange with Cathy: CODY: Oops, I made a typo – We’ve been somewhat insulted by the fact that we owned some of the few stocks that have actually done well in the last year while so many others were crashing, including Facebook, Amazon, Google and Netflix. SHOULD HAVE BEEN: We’ve been somewhat INSULATED by the fact that we owned some of the few stocks that have actually done well in the last year while so many others were crashing, including Facebook, Amazon, Google and Netflix. CATHY: oh..that looks like a sigmund f. kind of typo..

Q. How is Amaris doing? What gave TWTR a kick?

A. Amaris is doing great. She and her older sister sometimes sit on my wife’s or my lap together. Here they are last night. $TWTR popped intraday from -7% to up a little bit on vague rumors that they could be in talks for being acquired.

• $TWTR update: Twitter Inc. TWTR, +4.07% shares soared 12.5% Wednesday in afternoon trade Wednesday, after falling as much as 7.2% to a record low earlier in the session. The shares rose amid speculation that News Corp. NWS, -2.91% the parent of MarketWatch, had bought a stake in Twitter, said James Cakmak, an analyst at Monness Crespi Hardt. “No idea if true or not but that’s the chatter right now,” Cakmak wrote in an email. News Corp. did not immediately respond to a request to comment. Volume as of 2 p.m. ET was 46 million shares, more than double the full-day average of 19.8 million shares, according to FactSet

• Follow up comment:  Great to see the love and attention she is getting, this will give her the strength she needs.

Q. Any tranching into QCOM? Is TWTR done? Thoughts on AMBA? Happy to hear good progress with your daughter Amaris!

A. I’m sitting tight on my 2/3rds full position in $QCOM for now. I would look to add another tranche if it gets closer to $40. $TWTR‘s not “done” per se, as they still have the potential to turn the ship and Periscope is still a hidden jewel. In its upcoming earnings report, $AMBA has got to prove they have successfully diversified away from $GPRO as their main customer. Until then, it’s tough to game but quite oversold.

Q. If you wanted to add some AAPL call options today, which ones would you be looking at?

A. I’d look out at the June or July expiration dates with strike prices around $100.

Q. FFIV has a zero bounce today whereas many of the other tech stocks are trading much higher off their lows. Not a good sign into earnings tonight. Care to comment?

A.  I think $FFIV‘s earnings will actually be okay, but I’m in the minority on that opinion on Wall Street right now. Which also means a slight earnings miss might already be priced in too, by the way. Saw this come across in an email from JP Morgan’s analysts today: “FFIV – FQ1’16 Preview: Cautious as enterprise signals remain weak. ”

Q. The markets should pop nicely if this 1830 S and P level holds. The end of the bull market can’t be so evident and obvious. Maybe the lessons learned from past bubbles popping have this market being much more prepared and aware. Im still curious if we ever see those 1999/2000 like valuations in my lifetime?

A. $DDD, $SSYS, $GPRO, $KMI, $CHK, $YELP….so many names say we just saw those 1999/2000-like valuations and have now popped and more like 2001 or early 2002 maybe.

• Follow up comment: Very true. There was much better irrational exuberance then. And it seems the bubbles popped in phases this time where then you could buy throwing a dart on a new highs list and rake in money.
• The 1999/2000 tech/telecom bubble and its subsequent pop reflects this ongoing energy/commodity bubble and ongoing pop.

Q. Why is AMBA going up?

A. No real news or rumor item to point to for $AMBA bouncing from its lows earlier today. It’s just one heckuva volatile stock.

Q. Let me join in with the happy comments about Amaris and the rest of the family. Which leads me to ask again about when we’ll be seeing the Weekly Trading Report with that and other info. You had said, “after the holidays.”

A. I’m training Cathy on how to do the Weekly Trades Recap and will start sending it out each Friday starting this week.

Subscriber comment: I like the Trade Alert in the teeth of this nasty market.

Thanks, I think. I hope. Gulp. 🙂

Also, to all of you, thanks all for the kind words about Amaris and my family.

Okay folks, I’m one hungry hungry hippo. I’m gonna get some lunch. Have a great day.