CBOE introduced the weekly options starting July 1st. I made a video at my trading club explaining how they work. Watch this and see how you can profit from it.

To learn more and get a full list of weekly options from CBOE. Click here.

Trade well!

Andy

Using options to trade into earning is one of my favorite strategy. With limited risk exposure, you can capture some amazing move using the power of options.

Here is a video I did for my trading club member explaining exactly what I look for to trade into LVS earning this week. I am re-posting here so you can also see some of things that I do and learn from it.

In the last two weeks, we have gone from a bearish head and shoulders breakdown to a new relative high. The market has rallied almost 10% in that time and the momentum is very strong.

Rising interest rates put the brakes on June’s rally and investors were concerned that the continuous supply of new bonds would put upward pressure on yields. The Treasury has to finance a $2 trillion deficit and huge bond auctions will be held every other week. In its statement, the FOMC said that they will not be buying Treasuries after the September deadline. This was a sign that the Fed is less accommodative and stocks drifted lower. To the surprise of many, the bond auctions over the last few weeks have gone much better than expected and interest rates started to decline. This paved the way for a big rebound.

Technicians could easily see the head and shoulders formation and the neck line at SPY 89. That level also represented the 200-day moving average. When it was breached, bears piled in. The large short interest also provided a catalyst for the rally when shorts had to cover.

Goldman Sachs blew earnings estimates away and financial stocks surged higher last week. That rally got the ball rolling. The next day, Intel beat estimates by a huge margin and they provided strong guidance. This rally sparked a huge round of short covering and Asset Managers that were under allocated scrambled to place money. Since that initial run, the XLF (financial sector ETF) and the SOX (semiconductor index) have been relatively flat indicating that good news is priced into these sectors.

This has been a very busy week and a flood of earnings have hit the market. One general observation is that cyclical stocks are rallying even though the top line growth and the guidance have been weak. Companies have done a great job controlling costs and the bottom line is beating estimates. However, the rally in economically sensitive stocks is all based on the promise of a recovery. I’m also seeing short covering in many of the laggards and they are rebounding after posting weak results. My conclusion is that the market is getting ahead of itself.

The market has been able to hang on to its recent gains and that is a positive sign. Tuesday and Wednesday profit takers were did not spark a round of selling and both days the market recovered quickly. The bid is strong and today the SPY broke to a new relative high not seen since last November. This latest action should spark another round of short covering–however once that impetus runs its course, the market should fall back below SPY 96.

Call us skeptical, but the recent breakdown below SPY 89 did not hold and I don’t believe this breakout above SPY 96 will hold either. The market is searching for direction and these light volume moves will fool as many traders as possible. Good results are already priced into the market and valuations are getting stretched.

Analysts keep talking about a rebound, but that is not being reflected in energy or transportation. If global economies were truly rebounding, we would see oil prices move higher. Production and exploration has been cut and any uptick in demand would deplete inventories. Crude supplies are still running high. Railroads and truckers are posting weak numbers and they are providing dismal guidance. This morning, UPS missed its number by a large margin and it is often considered an economic barometer. Until we see these conditions change, it might not be wise to get too invested in the current recovery theory.

Earnings releases will be heavy next week along with a slew of economic reports including new home sales, consumer confidence, durable goods, the beige book, GDP and Chicago PMI. While this news should generally be positive, a stiff head wind will return. Next week, approximately $110 billion in longer-term Treasuries will be auctioned and there is every reason to believe interest rates will start moving higher.

In summary, the market is likely to break out and then fall back into its trading range the rest of the summer with some surprising breakdowns. The greatest risk right now is to the upside. The best approach now is to use the Live Update page to play the best performing stocks on the upside using tight stops–while keeping a list of bearish plays automatically keyed up for any breakdown.

To your success!

Andy Huang

Last week, the market dropped below major support when the Unemployment Report was much worse than expected. Job losses were 100,000 more than analysts had expected and bulls finally threw in the towel. Since March, they have denounced the Unemployment Report claiming that it is a lagging piece of information.

Month-after-month, the news continued to disappoint and the unemployment rate has jumped in a parabolic manner. Weekly jobless claims have not subsided and traders have hawked the number each week in hopes of improvement. This morning, initial jobless claims dropped by 52,000 and it came in at 565,000. That is well below expectations of 605,000. Before we get too excited about this number, keep in mind that it spanned a holiday. Often, people will postpone filing for unemployment until after they return from vacation. Continuing claims increased by 159,000 to its highest level ever (6.88 million).

This morning, retailers posted weaker than expected monthly sales. Wet weather and rising gasoline prices contributed to the decline. People are concerned about their employment situation and they have cut back spending.

Next week, earnings season will begin. We will get a big dose of earnings from financial institutions during the next two weeks. The spread between the borrowing and lending rate has never been higher and banks are hanging on to toxic assets. Profits should be good since they aren’t taking write downs. However, I’m not expecting a big rally from this sector. Banks have issued a lot of stock and it will take many quarters of stellar performance to work off that supply. Toxic assets, commercial real estate loans and high credit card default rates will keep a lid on any financial sector rally.

The market will have to find strength from other sectors. Although 70% of all companies beat Q1 expectations, the market has rallied 40% off of its low and good results are priced in. We will see if companies can “beat” by a big enough margin to spark a rally.

Traders are carefully watching interest rates. This week, the Treasury issued $75 billion in longer-term bonds and the auctions were very well received. That has kept the market treading water.

A head and shoulders pattern has formed and early this week the neckline was broken when we traded below SPY 89. That price level also represents the 200-day moving average. As that support level gave way, the selling pressure increased and it looked like we could have a major decline this week. After the 10-year bond auction results were released Wednesday afternoon, the market rebounded. That rally has continued today. The Treasury has to finance its $2 trillion budget deficit and it will keep issuing new bonds every other week. That means bulls will continuously be dodging the interest rate bullet.

The tone for next week will be set Tuesday when Goldman Sachs, Johnson & Johnson and Intel release results. By comparison, economic releases are very light and the market will take its direction from corporate earnings. Interest rates have stabilized and earnings will determine the market’s direction. If the market declines, option expiration could have a negative influence since we are trading near a one-month low.

We are teetering on a breakdown and great results are all that can keep us from falling. I believe the market will drift lower during the rest of the summer, but I am not looking for a meltdown. Leverage has been removed from the market and we will not see anything close to the panic selling we witnessed last fall. The market should be able to find support around SPY 80-83.

This is the perfect time to trade relative strength and weakness. The market may not go anywhere, but individual stocks will be making considerable moves.

I get a lot of member asking me to teach them how to trade since the last video I posted on how I did 1100% in just 38 days. I love to teach, but I can not do one on one coaching, I just dont have enough time to do so.

If you missed my video, you can see it again here.

http://flowerhornusa.com/option/trade-final.swf

Today, I am not going to teach you how to trade, it took me more than 16+ years of trading to learn how to make massive amount of money trading stock options, and it would be insane for me to unload my years of experiance to you. You simply can not absorb any or all the knowledge and experiance I have done in the last 16 years. Impossible for you to learn any of it in just 1 post. I have tried to explain it over the last 2 years here and there and none of the members here actually got it on how easy it is to make money online if you put some effort to it.

Now, I met my friend Jonathan last week while I was speaking at an event in Texas and discover a truly easy system that anyone can setup and run on autopilot. His product is only open for sale for next few days, and he will closed the beta program. I was fortunate enough to have spent 2 days with him understand the system he has build, and was able to get him to allow me to introduce them to my memebers here on FHUSA.

If anyone is seriously interested in setting up system that is going to set you free financially, you owe it to yourself to get involve with this program. For anyone who does sign up with this, I am going to make a personal comittment to ensure your trading platform is setup on auto pilot so it will run on its own for you, making insane return while you are sleeping.

You owe it to youself, I been telling you for years on many of the same strategies and systems I use to to make millions for myself and my clients. All of you had let it pass you by? Why? Is it because you dont see the opportunity to change your life? Or is it you do not believe you are capable of succeeding? Or is it you went crazy and led to believe in failure and lies by people who steal and never experiance success in life? I hope that is not you.

Whatever the excuse or reason is, dont let it pass on again. We are half way through 2009 and you are going to let another 6 months go by and never take any action?

Don’t miss out again, let me help you change your life in 2009. Watch the video that explain the entire program on how easy it is to automate a cash generating system for you.

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To watch the video, go here

To your success!

Andy

A week ago a crack in the dam appeared when the market was not able to rally during option expiration. Stocks were at a major resistance level and option open interest favored buy programs. Any small catalyst would have sparked short covering–but it never happened. The market seemed very tired after a huge run and it lacked a catalyst to get ‘over the top’.

One way to measure momentum is to monitor the market’s reaction to news events. In the past few months, traders have been able to discount economic data and momentum players viewed every dip as a buying opportunity. A week ago, retail sales figures missed expectations and the market declined.

Today, the market is reacting to a bigger than expected rise in initial jobless claims. In the last week, 631,000 new claims were filed and 6.7 million Americans continue to draw unemployment benefits. Bad news once again is having a negative impact on the market–an ominous sign.

During the last two months, every dip has resulted in a snap back rally and the market consistently made new relative highs. Last week, the market drifted lower but it did not rebound. That move was rather delayed and it came Monday after the Communist Party was defeated in India’s election. Democracy and capitalism are good for the market, but even this move was suspect. During the rally, volume was light and we hit a number of air pockets on the way up. Sellers lifted their offers and the surge had more to do with a lack of sellers than it did pent-up demand. This news was not the catalyst we needed.

The problem is the market has run out of “drivers”. Stimulus plans, bailouts, quantitative easing, marked-to-market rule changes, stress tests and earnings are all behind us. The market has rebounded 40% and it sits just below major resistance at SPY 94. A long-term downtrend line, horizontal resistance and the 200-day moving average converge at that price level. It will take a major event to push us through and it’s hard to identify what that could be as stocks are no longer the bargains they were at the beginning of March.

The treasury is issuing bonds to pay for the government’s $2 trillion deficit this year. As the supply of bonds hits the market, interest rates are moving higher. That will provide a stiff head wind for stocks and the economy in general. Companies have been issuing stock like mad and the supply of new shares is also weighing on the market as existing shared become diluted.

The US budget deficit this year will be 13% of GDP, more than twice as high as it’s ever been in history. Fortunately, it is nowhere near England’s level but that’s like bragging that you’re the leper with the most fingers. Their budget deficit will hit 100% of GDP this year and they face a possible downgrade from their AAA credit rating. Portugal, Spain, Greece and Ireland have already been downgraded. Governments simply can’t control spending and the economic slowdown compounds the problem by reducing tax revenues.

Earnings releases will slow down dramatically next week and they are dominated by retail stocks. This sector has run up and if anything, it is priced for disappointment.

The economic calendar is full. Consumer confidence, durable goods orders, initial claims, new home sales, GDP and the Chicago PMI will be released. Now that the market momentum has slowed, weak economic news will have a negative impact. Last month, GDP missed by a large margin and dropped 6.1%. That news is likely to weigh on the market this time around if it is not revised upward.

This week, I have a few stocks I am eyeing on to take a put position. Will have more updates in the next few days. In the mean time, trade well.

To your continual success!

Andy Huang

“Google had a good quarter given the depth of the recession — while revenues were down quarter over quarter, they grew 6% year over year thanks to continued strong query growth. These results underline both the resilience of our business model and the ongoing potential of the web as users and advertisers shift online,” said Eric Schmidt, CEO of Google. “Going forward, our priority remains investing for the long term to drive future growth in our core and emerging businesses.”

Q1 Financial Summary

Google reported revenues of $5.51 billion for the quarter ended March 31, 2009, an increase of 6% compared to the first quarter of 2008 and a decrease of 3% compared to the fourth quarter of 2008. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the first quarter of 2009, TAC totaled $1.44 billion, or 27% of advertising revenues.

Source:http://finance.yahoo.com/news/Google-Announces-First-bw-14949372.html