Option Trade Ideas for this week

DB (Deutsche Bank) 35.18 +8.78% This bank stock saw a big jump today on a bounce on oversold stocks, we believe this is temporary and Put Options here could bode well for Dec-Jan , with European crisis as well as German Bond auction going bust we believe that DB could drop here


BCS (Barclays) 10.47 +8.84% this stock has saw strong gains in the past 2 trading days , we believe that Barclays could see a drop with ties to European Sovereign debt , watch here for Put Option Opportunity


JEF (Jeffries) 11.05 +3.76% this stock has seen much trouble and has released news to investors to calm them over rumors of MF ties and also european debt investments we could see a drop in the financial sector and Jeffries could be another victim to a European debt crisis

SLV (Ishares Silver) 31.24 +3.44% SLV ETF has had trouble and much resistance at $34 level we could see SLV trading at $26 range if it loses support , please read our Silver report

Silver and Gold do for a correction?

Gold and Silver will be in a correction phase as much as we believe that Gold and Silver are the best form of long term investment and the real global currency, we believe that Gold and Silver will be in a correction phase and drop to lower prices in the months ahead. Gold reached a high $1920 range this year and has been trading between $1600 and $1700 , with recent issues in Europe and also CME raising margin calls we have witnessed more selling in the precious metal markets.

Copper is a metal that many believe that show what the overall market and the economy does, this metal is a industrial metal, much like what many feel that Silver is. Copper has since had a big drop because a fear of a looming recession. In my Opinion Silver is much more rare than all metals but unfortunately we have been witnessing much manipulation in Silver markets by big banks like JP Morgan Chase and HSBC.

Copper prices have traded in a volatile fashion lately. Copper dropped from $4.50 per pound in August to under $3 per pound in early October.

Fears of global recession and the continuing debt crisis in the U.S. and Europe were to blame for the drop. Adding fuel to the fire was a slowdown in China which is the world’s largest importer of copper.

Copper prices rebounded in October and it traded up to $3.70 per pound. But the bell weather commodity has been going down hard for the past few weeks and is currently trading at the $3.48 level. Because Copper and Silver are considered more of a "Industrial Metal" ,this does not bode well for silver.

We are witnessing the  move that Copper has done and the big drop shows that Silver could have a similar move. We believe that this will be a great opportunity to add SLV Put Options as a hedge on this downward move and quite possibly look to enter physical metal when the price drops, sometimes very hard to catch the bottom but long term we for see Silver at $100 an oz but for now we may profit off this drop that we see in the chart and previous trading:

Silver prices tanked from over $49 in April to just over $32 an ounce in May. This drop of 35% in a one month period hurt the silver market and scared away investors from silver.

A quick sharp drop in the price of a commodity tends to do a lot of damage to the technical picture for that commodity. Currently silver prices are starting to look weak again at $34-$35 an ounce. With lower copper prices, I believe that silver prices will follow and another leg down is coming soon.

The daily silver chart on Nov 10 2011,  provides a number of clues to the future price action. Silver has been unable to rise above $36, the short-term resistance level. Silver’s daily historical volatility has been falling. That means there has been less speculative action or less investment demand in the market. On thursday we saw it try to break $32 but could not and now is trading $30 range if we see a close below $30 we could see $26-$28 if Silver does not hold possibly $24

The stochastics, which show silver’s price momentum, appear to be turning bearish at the 71 level. Also, the relative strength index is in overbought territory.

Finally, volume has been decreasing and open interest (the total number of long and short positions in the market) is stable again indicating a lack of investment demand in the near term.

When technicals and fundamentals line up like this, it’s a powerful indicator that a certain commodity will fall. In this case, silver is preparing to go lower - the silver market is about to drop and we look to benefit.

The silver market has been trying to rally for weeks now and it can’t get above $36 an ounce. If it can’t climb higher, then silver buyers will get frustrated and liquidate positions. When that happens, we could see silver fall to $27 or lower again, maybe even into the low $20s.

So as a trade, silver looks like a great short position right now. But once it corrects, I’ll be looking to buy again on the dips.

Bottom line: the coming correction in silver prices will give you the opportunity to make money on a short position and load up on the white metal at much lower prices. 

Jim Rogers, "Gold is Overdue for a Correction"

http://www.youtube.com/watch?v=ocotD9wrOEk

With that said we will watch the markets closely as we believe that Euro crisis will adversely affect metals markets. We are watching JPM (JP Morgan Chase) for a bounce here as this stock is near 52 week low and is a usual indicator of what the markets do. We do not like bank stocks our recent Put Option recommendations on BAC (Bank of America) JEF (Jeffries)

We believe that the next bank stock to drop big are those that are fully invested in European Sovereign debt those that we feel are big holders are (DB) Deutsche Bank and (BCS) Barclays there are many rumors of a bank in a possible Lehman Bros type collapse we will keep eyes on banks like (MS) Morgan Stanley and (JEF) Jeffries

Our penny stock OTC mentions we believe still far upside and we believe Gold and Silver Long term will be a great way to hedge money and only type of investment that will prove a great opportunity for patience. Here are some videos I would like members to watch on why I feel at some point Gold and Silver will trade 100-1000% at some point between 2013 and 2015 and why I do not want to be fully in the U.S dollar:

Marc Faber about Gold is not a bubble:

http://www.youtube.com/watch?v=Cs0-mUpiang

James Turk on $8000-$11000 oz target 2013-2015  Nov. 23, 2011.

http://www.youtube.com/watch?v=uINTLEk5IOE

JPM 52 week bottom ? Financial Sector is terrible, but we expect a bounce here

JPM (J P Morgan Chase) 28.60 down -2.45 Financial stocks have taken a beating our Put ideas on financial stocks like DB,JEF,MS , and especially BAC are doing quite well but JPM seems to be at buying levels today JEF was up as much as 4% with rumors we expect JPM to do a quick pop here DEC-JAN 30-32 strike could play well here

http://stockcharts.com/h-sc/ui?s=jpm

Some stocks we are eying for Put Options

SPY 126.56 close saw a high of 126.99 and low of 125.79 the stock moved well with moderate volume on friday a lack of news on friday along with Bond markets closed allowed sideways trading with lower volatility , the stock opened at 126-127 range holding gains , what we notice is:

The SPY  at the 200 Day Moving Avg at resistance. Could see a breakout or pull back here keep eye on this one

CSCO 19.01 high of 19.15 this stock has saw close to 4 days of green closing since its announcement of above average earnings, we should see a pull back here as we believe the stock is due for a pull back since earnings

http://stockcharts.com/h-sc/ui?s=CSCO

DIS 36.75 announcement of earnings the stock gapped up pretty big friday we could see a pull back to fill in the big gap at $18 pps :

http://stockcharts.com/h-sc/ui?s=dis

With such volatility we still like Trading Options as a great tool to profit in a highly volatile market. We are seeing TRENDS on stocks where we can trade both Calls and Puts and profit both ways , but we urge members to stay disciplined and trade smartly as Options are still risky and can lead to loss of entire investment

Watchlist for Thursday

MDVN (Medivation) 41.44 A stock that has been up 150% up and holding the market sell off makes me believe that PUT Options for this stock especially after todays market news will bode well :

Drug developer Medivation takes bigger 3Q loss

Medivation reports bigger 3rd-quarter loss as development of prostate cancer drug continues 

On Wednesday November 9, 2011, 7:38 pm EST

SAN FRANCISCO (AP) -- Medivation Inc. on Wednesday reported a bigger third-quarter loss than it did a year earlier as it continued to develop treatments for prostate cancer and Alzheimer's disease.
On Nov. 3, after the quarter ended, Medivation said it was stopping a clinical trial of its prostate cancer pill MDV3100 because it was clear the drug was working. An analysis showed men treated with MDV3100 lived 4.8 months longer than men who were treated with a placebo. The company's stock more than doubled in value.
Medivation said it lost $10 million, or 29 cents per share, compared with $5.4 million, or 16 cents per share, a year earlier. Its revenue from collaborations rose to $14.9 million from $14.4 million.
Analysts expected a bigger loss of 32 cents per share but also higher revenue -- $15.8 million, according to FactSet.
Medivation does not have any products on the market. It is developing MDV3100 in a partnership with Astellas Pharma of Japan, and is working Pfizer Inc. on Dimebon, a potential treatment for Alzheimer's disease and Huntington disease. The company said Wednesday that it is exercising an option to co-promote MDV3100 with Astellas. Medivation will provide half the U.S. sales and medical affairs support.
The company said that on Tuesday, the Food and Drug Administration agreed to conduct a faster review of MDV3100 for use after chemotherapy. Fast track reviews are intended to lead to faster decisions about drugs for serious illnesses or unmet medical needs.
Medivation and Astellas are running a second late-stage trial of MDV3100. The companies plan to meet with the FDA in early 2012 to discuss the regulatory pathway for the drug.
With the markets slumping, shares of Medivation lost $1.82, or 4.3 percent, to $40.44 Wednesday.
After the company released its results, after the markets closed, its stock rose $1, or 2.5 percent, to $41.44

 

Option ideas for some stocks hitting highs

PCLN (Priceline) 553.30 up 8% today trading near 52 week high on positive revenue , we still believe that this stock with all the momentum with revenue should see a pullback , watch carefull for a PUT Option quite possibly Nov 19 -Dec 17 Puts strike 500-520 should bode well this company is expensive , I do not see this trading much higher especially in this market:

http://stockcharts.com/h-sc/ui?s=PCLN

LNG (Chiniere energy) 10.91 this stock is up big from $4 range and has been trading in 10-12 range , the stock gapped up pretty big and I think a drop could happen Nov 19 -Dec 17 Puts at $10 could bode well , this is an energy stock as of late Oil has been trading over 90$ a barrel but with that said I think we could see a pullback with such a big move :

http://stockcharts.com/h-sc/ui?s=lng

MDVN (Medivation Inc) 43.01 this stock saw close to 150% gains since an announcement on FDA approval and we saw a huge gap move and is still sitting high we could very well see a pull back here PUT options for Dec could be good here:

http://stockcharts.com/h-sc/ui?s=mdvn

SPY (SPDR S&P 500 Fund) 127.84 this stock has been rallying as of late pull backs and seems to gain ground , trading range from 124-128 be patient and watch for the stock to get toppy here , I still believe that the markets will be an up and down see saw and we will see resistance at 128 range some puts here for Dec -Jan could be good here as we still think markets will stagger

As far as the OTC markets they have been picking up

IROGD .25 today it hit .27 and cleared out .27 with 47k in volume saw .51 on ask and the shares look very thin with Gold back to the safe haven and many experts calling for 2k gold end of year we are confident that IROG will do well with just 4 million o/s and 25 million in a/s we could see $1-$4 dollar range soon

FTEG .0017 opportunity to be patient and add as low as .0012 this stock rallied and with just 40 million float we expect .002-.003 soon with recent news we feel good about this stock

BANKRUPT OF AMERICA?

BANKRUPT OF AMERICA?

BAC Bank of America $6.91 this bank stock has been trading $6 -$7 range for quite some time and with news of $5 debt card fee going up in arms , many depositors and clients were left sour, they recently posted news of doing away with this fee, this leads us to believe that the bank is in trouble. This bank is trying to make money by any means possible, they are owners of Country Wide which now own billions in Toxic assets such as Foreclosures and Credit Default Swaps, are said to own trillions in toxic derivatives, recently there was news on FDIC and Federal Reserve insuring 75 trillion dollars in derivatives owned by Bank of America, today news was out on 400 million dilution by the bank and we feel that this stock is holding by a string regardless Warren Buffet investment. A recent video with Reggie Middleton I would like members to watch in regards to Bank of America going BUST


This news released after hours today: http://www.zerohedge.com/news/bank-america-common-dilution-coming-issue-400-million-new-shares

Bank Of America Common Dilution Coming: To Issue 400 Million New Shares

Bank Of America Common Dilution Coming: To Issue 400 Million New Shares


And to think it was less than two months ago that Warren Buffett took a bath to provide the bank with capital it had "absolutely no need for" but was happy to take it anyway. Well, it turns out the firm is preparing to raise just a "little" more capital. From the just released 10Q: "During the third quarter, global economic uncertainty and volatility continued as described more fully in the Executive Summary – Third Quarter 2011 Economic and Business Environment discussion on page 7. Concerns over these and other issues contributed to a widening of credit spreads for many financial institutions, including the Corporation, resulting in lowering of market values of debt and preferred stock issued by financial institutions. The uncertainty in the market evidenced by, among other things, volatility in credit spread movements, makes it economically advantageous at this time to consider retirement of issued junior subordinated debt and preferred stock. As a result of these matters, we intend to explore the issuance of common stock and senior notes in exchange for shares of preferred stock and, subject to any required amendments to the applicable governing documents, certain trust preferred capital debt securities (Trust Securities) issued by unconsolidated trust companies, in privately negotiated transactions. If we pursue the exchange of Trust Securities, we would immediately use the purchased Trust Securities to retire a corresponding amount of our junior subordinated debt that we previously issued to the unconsolidated trust companies. These transactions would increase Tier 1 common capital and, on an after-tax basis, reduce the combined level of interest expense and dividends paid on the combined junior subordinated debt and preferred stock....We will not issue more than 400 million shares of common stock or $3 billion in new senior notes in connection with these exchanges."

Also today from BANKRUPT of AMERICA: http://www.zerohedge.com/news/bank-america-posts-two-100mm-losses-past-quarter

Bank Of America Posts Two $100MM+ Losses In Past Quarter

Remember when even the worst of all trading desks on Wall Street, that of Bank of America could do no wrong and disclosed a trading quarter of pure perfection? Yeah, that's over. The bank, which just jolted shareholders with news of material common dilution, in the form of $2.5 billion in new equity capital to be raised, has released its trading days data for Q3. Per the 10-Q: "During the three months ended September 30, 2011, positive trading-related revenue was recorded for 69 percent (44 days) of the trading days of which 47 percent (30 days) were daily trading gains of over $25 million, nine percent (six days) of the trading days had losses greater than $25 million, three percent (two days) of trading days had losses greater than $100 million and the largest loss was $119 million." On the flip side, BAC had not one $100MM+ trading win. In other words, BAC posted losses on a whopping 31% of the trading days (compared to 0% two quarters ago), something that indicates a very violent return to normalcy: after all if banks, with ZIRP, legal frontrunning, profit from default risk surges, and POMO are unable to make money 100% of the time, who else, besides all the day traders on twitter and the fine men and women on Fast Money of course, will post flawless trading records in the future?

And a very convenient chart which we hope other banks will follow suit in providing is the following presentation of the bank's VaR alongside its daily P&L. Granted, BAC could actually go ahead and mark the second axis properly, but what is most interesting is that, aside from the two $100MM+ losses distinctly highlighted (one of which obviously occurred around the time of the US debt ceiling fiasco, and the other in late August) is that the higher VaR goes, the lower the P&L trends! This has huge implications for market practice as it goes contrary to most prevailing conceptions, namely that the greater the risk, the greater the payoff on average, and, naturally, the greater the risk of a disastrous blow up. If confirmed by other banks this could serve as a policy guideline to limit excess risk-taking during times of high stress due to empirically proven adverse results on average.

We are seeing huge losses in bankrupt of America that along with expected "bank run" being planned on this bank Nov 5 we could see this stock plummet , PUTS long or short could bode well with BAC next few weeks we will see the dilution kick in and dumping of the stock , possibly Jan 21 Puts could bode well to $5 Strike or weekly $6 strike could bode well , if the bank does what I think it will hit $7 range I think Puts will be a low risk high reward type play

Watchlist for Thursday

IROGD .26 today the stock saw volume 13,399 in volume and had 1.28 in plain site this gold stock although a recent reverse split has added valuation to the stock via lower share structure , buying today bodes well moving on as we believe there will be zero dilution and news pending could bring investor awareness, Gold will continue to do well during a increase inflatory economy which has been discussed by many economist, many believe with Euro Crisis and also QE 3 possible we could see Gold continue its uptrend, outstanding shares now 4 million from 89 million and a/s 25 million from 500 million huge change

  SIRG .0064 this gold stock opportunity to add low .004 closed .0064 could very well be making a move to .01 range soon as gold prices expected to surge

AAAA .0089 this stock looks to start it next move up traded at $6 a share bouncing off 52 week low .005

ENKG .0015 this stock looks good chart wise could see a strong move back to .007 range latest news promising

Watchlist for Wednesday

AAAA (AAA Public Adjustment Group) .009 today the stock saw a new 52 week low of .005 and hit a high of .01 , the Level 2 was quite thin to .04  and knowing that the stock traded at $6 a share when it was a NASDAQ stock is quite telling , there is no reason why this cant make a nice 100-300% run with such a low ss


GNPR (Genius Prods Inc) .40 this stock has a extremely low share structure and traded as high as $10 per share today the stock was as low as .03 with over 1 million volume end of day we could be seeing a huge run keep eyes on this one as 52 week low was .50 days ago

http://investorshub.advfn.com/boards/board.aspx?board_id=6229

SDRC .007 low float gold stock trading at lows , the stock has big stake in Lucky Ben mines and only has a 40 million float trades easily into .01 -.02 range

SUGO .0079 gold stock that traded at .02 range for quite some time sudden volume could see a rally here