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Caterpillar Calls Rock

They keep going up. Yet this morning, a Monday morning the DJIA is down. Can you fight a strong stock or are you just throwing money into the wind? Deere, Caterpillar and Boeing are all also on an upward terror. Now a look at these Caterpillar Puts at 10:41 a.m. which expire at the end of the week. The open interest in this series of Puts going into todays trading session is zero. What about the action in the Calls. Are option traders playing them? Well yes and no. The 630 series of Calls have almost doubled on in price on the day but the volume of trading in them is not all that inspiring. Now let's go back and look again at the 642.50 we looked at back at 10:41 a.m..Here is how they closed out the day. The D.J.I.A. index never came back. Shown above is Caterpillar's one and five day chart. Is this "step-up" chart formation suddenly starting to crumble? That's the question. Tomorrow openings will likely see Caterpillar up or down $5.00. Maybe this time, ...
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Caterpillar Earning Report Plays

So tomorrow is the big day when Caterpillar releases it's second quarter earnings report. It is expected to be good. Boeing just had a great earnings report yesterday and analyst are expecting Caterpillar to also report decent numbers. Let's look at the five day trading charts on these two companies and this mornings super strong premarket indicators. (It's always good to be selling into strong premarket indicators because history tells us that they never stay strong forever). It's July 29th and Caterpillar's earning report is tomorrow.
Ford also just had their earning reports and good new also on that front.
So far so good? Good news everywhere right? It's only good news if you can capitalize on it. What am I implying? Well I don't want to digress to far off topic however option trading can be an exacerbating experience. I missed the Boeing and Ford trading opportunites despite the fact that I anticipated both of these two companies would do well. Do I beat myself up for not playing them? Not really. Playing the earning report game is never a sure thing. Sometimes the numbers can look good and the stock will drop. So where now do I want to go with this blog? I want to focus on the importance of seizing the moment and capitalizing on this morning's unique sweet spot. First, it's a Thursday morning and Caterpillars earning reports are still one day away. We are looking at the premarkets at 9:17 a.m. and we see Caterpillar's premarket price trading at $213.90 up $2.46. If you purchaed Caterpillar Call on Wednesday at a lower price why wait for the potential earnings report play on Friday to get out? Other computer generated trading platforms looking for short term profits are going to be selling out into any strenght of a Thursday morning the opening markets. Look at the $6.33 number on the Call options in the first few minutes of trading on the July 21st 210 Calls. Look then at how they dipped and rebounded back up at 11:46 a.m. Are you able to see how a second buying opportunity presented itself around 9:30 a.m.? Once again, all of this action was in anticipiation of a good news report on the following day which no one was entirely sure would happen.
** It takes work to get pumped up every morning to play this kind of game but if you follow Ford, Caterpillar and Boeing concurrently you will know that their earning reports come out all near the same time. For a few days in a row you will have to watch the markets with extra attention.

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