DAMN AMZN!!! THIS JUST SHOWS THAT EPS REPORTS CAN HURT A STOCK

I was basking in the glow on Tuesday when AMZN broke out and gained 10%. I was then burned by the fire when I checked on the market to see that it was down 15% due to warnings on future earnings. In light of that, I sold out for a loss of 5% since I originally bought at $90.

See, I don't win on every trade, but I do cut my losses quickly.

I do get to brag about my warning about the Dow Jones Industrials, DIA, turning down in the October 16th blog. I mentioned that one of the indicators called the MACD was turning down and I didn't like the feel of the market. In my personal account, I placed a trade in options called a bear call spread. The "bear" means that is I expect the market to be "bearish" or to move downward. The "call" means that is the type of stock option I bought and sold. (I know it may be confusing but this is for those who have learned how to trade stocks first. Be confident with stocks first, then you can investigate how to trade options) The spread means that I bought on "call" and sold another "call." My spread was a December 142 call that I sold, and I bought the Dec 145 call for $1.27. As of today, the spread is worth $0.90 which is a 30% gain in one week. My target is a 50% gain so I am waiting for this move.

Good luck trading.
JD