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Caterpillar - Catching A Reversal On A Tuesday

Tuesdays are not the best of days to look for reversals however Caterpillar jumped a modest amount which impacted the value of this series of Puts. This is a 1:36 p.m. readout. Here is it's five day chart. Now its one day chart. It would seem like kind of a random thing to do and why fight a strong stock? One reason is that the markets are only mildly up and could give back some of it's gains before the end of the day. Caterpillar could be gaining strenght based on last weeks articles talking about how Caterpillar could potential gain from this new AI movement. Notice that the five day chart is in an uptrend and notice the small open interest numbers in the Puts. No one wants to hold Puts on Caterpillar when it is in this uptrend. Could it has a soft selloff in the next two hours? Here it is now 50 minutes later. The "bid and ask" are almost unchanged. There is also not much change in the DJIA index.Now this. The DJIA is sellig off and Caterpillar is hanging ...
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A Week Unlike Last Week For Walmart. A Shift In The Air

Walmart last week was up $3.66. Boeing in contrast was up $16.05 and it's Calls were smoking hot. I blogged about Walmarts Calls being a great trading vehicle last week. This week not so much so. At the start of any trading week unlike towards the end of a trading week Call options have to much time value built into their pricings. One week options in theory lose about 20% of their value each day as they move closer to their expiring deadline on Friday afternoon. Let me show you how Walmart traded today.
Now let me show you how the stock traded over the last five trading sessions.
Here now is how the DJIA closed out the day.
Now look at how these two series of Call options traded on the day.
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In my previous blog I talked about Walmart Call options with two days to go. These Call options have four days to go. Now Tuesday morning.
The DJIA was down and so was Walmart.
In fact, the 100 Calls were down by 50%. But wait, there are three more trading sessions left to go before these Calls expire and that's the beauty of four day options and not "one-and-two" day until expiring options. Walmart options are often a barometer of how the DJIA index is trading. The pain of a recession is not yet taking a bite out of this stock. Yet there is cause to worry. Traders bullish on Calls now for over a year on this stock might suddenly need to do a market reset. Walmart and Costco can't keep on going up forever. Food prices are going up and their are fears that things will get worse. If both of these companies start to sell off in price there isn't going to be a quick fix to turn things around again. Let's look at the one year charts on both of these stocks.
Walmart Call options reacte to one dollar price swings. That makes them interesting to play. Tuesday had an afternoon scare.
Last week when the DJIA jumped over 500 points in one day the ride was so much smoother for most Call option players. Thursday also turned out to a disaster. That's what sometimes happens when analysis go south on a stock.
Now Fridays action and some more longer term charts.
The shine is now off playing short term Call options on this stock. It's charts now look ugly. How did Costco fair on the week? In the past I have talked about playing thirty day options on this stock because it often has dramatic one hundred dollar price swings. Catching it right will buy you a vacation in Hawaii. First it's one month chart.
Now it's five day chart.
If you have guts you could buy these Puts. If you catch them right they do move fast.
Can you see the one day volatilly is a six day out Call option on this stock? They are always powerfull options to play. The markets never stop.

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