Disney was one of the big stories last week with earnings crushing it out of the park and the stock trading up almost 15% on Friday. Disney is giving a small portion of those gains back today. The future could not be brighter for Disney right now. They have the upper end of their 2024 expectations at 350,000,000 paying subscriptions. If you factor in that each paying subscriber could be sharing with a few family members, you're almost reaching 1 billion people (and all those people are paying!). Facebook reaches billions of users because their product is free and the only fee is the data they harvest from you. Disney is still hampered by the pain of parks and movie theaters being shut down, but when the world resumes normal life this stock is still poised to trade higher. Disney is in a unique spot to capitalize from stay at home restrictions through Disney+ while also remaining positioned to also capitalize when everything reopens through their parks and movie theater releases.

Uber has a similar dual threat, their food delivery business has flourished this year, while their ride sharing business has struggled. The appetite and demand for their business was on full display last week as DoorDash went public and currently sits at about a $50B market cap. To put things in perspective, Uber is only at $90B market cap.

MCD got an upgrade today from UBS as they raised their target for MCD from $230 to $240.

We initiated another cash secured put in CRM earlier today with a strike price of $217.50 for about $1.70. This is the 3rd consecutive week we've made this type of trade. The small profits really begin to add up on a percentage basis. We made the first trade when CRM was trading above $240 coming into their recent earnings. We are bullish this stock, and are looking to secure our 3rd straight profit in this equity, meanwhile it has done nothing but trade lower or sideways since we started making these trades. This is the power of options, even when applied to owning equities as part of a long term portfolio. I backed down the strike price to $217.50 from $220 this week because ideally we see a large consolidation as we come into 2021 allowing us to make this trade continually.

If you don't like options and are just looking for equity plays, then this is a great entry price for CRM right here. It has filled the large gap it left from prior earnings, and looks to consolidate before trading higher. I prefer to use options, especially with this market near record highs with lots of expectations to live up to.

Some of the companies we're watching for earnings this week, Lennar (LEN) on Wednesday, FedEx (FDX) and General Mills (GIS) on Thursday, and Nike (NKE) and Darden Restaurants (DRI) on Friday.

This is the last full week of trading before we have Christmas next Friday, and New Years Day the Friday after that.

Stay tuned for updates this week! Have a great Monday!

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The next extension for Disney is up to about the $200 price point.

Uber has completed its AB=CD and looks to consolidate before heading higher.

McDonald's has gotten back into its consolidation area, and wan to see it trade high to get back within its uptrend channel.

I've gotten a few emails asking about the strategy of selling cash secured puts that we've started trading with, so here is a quick example of the new trade we've made in CRM today, and just walking you through exactly how it works. If you're ever confused by a trade don't hesitate to email me at tommy@tfnn.com.

We sold a $217.50 Dec 18th CRM Put at $1.70 today. This option expires Friday.

We are giving someone else the right to sell it to us at $217.50. That’s what we’re doing by selling them a put - they now have the right to 'put' it to us.

They will only sell it to us at $217.50 if the price goes under $217.50, otherwise they would just sell it in the market at a higher price.

If it goes under our strike price ($217.50), we may be assigned the stock – the person we sold the put to may exercise their option to sell 100 shares of CRM to us at $217.50. So, we are obligated to buy 100 shares of CRM at $217.50 in that situation. And then we would keep those shares in our portfolio after being obligated to buy them at $217.50.

We would then deduct the premium we received ($1.70) to find out effective entry price, which in this case would be about $215.80.

If you sell a call, you’re selling someone the right to buy stock, so you’ve have to sell it to them at a predetermined price if exercised. In this case it’s the reverse, we are selling someone else the right to sell the stock to us at a predetermined price, therefore we’d be the ones obligated to buy 100 shares if they exercised that right.

Options Trades:
None

Short Term portfolio:
None active

Long Term portfolio:
Sold a CRM $217.50 put that expires Friday at about $1.70. This put should be cash secured - the plan is to take delivery if assigned and hold it for our long term portfolio. CRM is trading at $221.32. If CRM closes above $220 we'll pocket our profits and potentially make a similar trade again next week. This trade appears in our equity section since we will be taking delivery if assigned as a way of entering CRM for the long term.

Long half position in DIS at $118.63. Disney is trading at $171.11. Stop is $98.45.
Long half position in UBER at $31.50. Uber is trading at $52.07. Stop is $26.24.
Long half position in MCD at $216.91. MCD is trading at $212.60. Stop is $189.50.

Timer Digest Signals: S&P: Bearish Gold: Bullish Bonds: Bullish