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Monday, November 23rd, 2009
9:00am (EST)
The futures are pointing towards a higher open this morning as the dollar continues to weaken. The bulls will try to snap a three-day losing streak today and we have talked about the how the market has moved in the opposite direction of the dollar in recent weeks.
Ahead of the opening bell, Dow futures are up 90, to 10,393. The S&P 500 futures are higher by 10, to 1,100, while Nasdaq 100 futures are up 17, to 1,780.
As the dollar weakens, it pushes the value of commodities higher because they become cheaper for foreign investors. A lower dollar has also helped gold reach record highs. Gold has traded higher on 14 out of the last 15 trading sessions and has reached a high of $1,168 an ounce this morning.
As far as economic news, home sales for October are projected to rise to the highest level in more than two years as first-time buyers, anticipating that a tax credit would soon expire, rushed to get in. At 10am (EST) this morning, the National Association of Realtors is expected to report sales rose to a seasonally adjusted annual rate of 5.65 million, up from 5.57 million in September. It would be the highest sales rate in more than two years…
We had a good feeling last night that the market would start the week off strong. Current subscribers can check the Members Area for the trade updates…
Tags: momentum stock option trading, Netflix, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Economic News, Market Commentary, Option Trades | Comments Off
Sunday, November 22nd, 2009
8:30pm (EST)
The bears made a little noise last week as they took down two of the major three averages. The Dow managed to escape with a gain of 47 points for the week and finished at 10,318. The S&P was the big battle ground as the bulls were trying to hold 1,100. They couldn’t as the index lost 2 points to close at 1,091.
The Nasdaq fell 1% as Tech cooled. Blame it on Dell (DELL, $14.29, down $1.58) as Tech couldn’t get any momentum after the company’s lousy earnings report. For the week, the Nasdaq fell 22 points and settled at 2,146.
We have been providing key resistance targets for the market and we broke through the top of those ranges this past week. Last Sunday night in the Weekly Wrap, we said to watch 10,365 for the Dow and that was broken on Monday as the Dow gained 136 points to close at 10,406. By Wednesday we had reached a high of 10,471. The bears may have slowed the bulls’ momentum but we still think the Dow can run to 10,850.
The S&P 500 continues to flirt with 1,100 and spent much of the week above it. The high was 1,113 but we closed above this level on Tuesday and Wednesday. We are looking for a run to 1,200 but are watching 1,070. A break below 1,070 could lower our expectations for a short-term rally.
We were looking for a close above 2,175 for the Nasdaq which we said could take us to 2,275. The index reached a high of 2,205 and traded above 2,200 until Thursday.
As you can see, we are right below prior resistance levels and it will be interesting to see if this was a “top” for the market. We still believe the market has one big push higher before we close 2009 and we will need to see 4Q earnings growth when companies report earnings in January.
We expected more fireworks on Friday since it was option expiration day but the bulls did well to hold their ground. We do want to take a look at a couple of options though just to show you how fast they move.
Let’s start with Dell. We had mentioned the company reported lousy earnings after the bell on Thursday but was there a trade there? You bet. The stock opened at $14.59 and the December 15 puts (DLYXC, $0.95, up $0.56) gained nearly 150% from Thursday’s close. Of course, you would have needed to buy the put options before Thursday’s close. However, these same puts opened at 83 cents and traded as high as $1.00 on Friday. You could have made about 15% if you had day traded these options on Friday but they will double if Dell trades down to $13 by Christmas.
Dell is losing market share and we aren’t sure if the stock trades $13 which is why we haven’t made it an “official trade”. Shares could find support here at these levels but we wouldn’t rush out to buy call options either.
The other stock we want to talk about is Priceline.com (PCLN, $208.75, up $1.11). As you may know, we profiled the November 200 calls (PNEKA, $8.75) which expired on Friday on November 6th at $1.10 and we were out a week later for an average price of $6.25 by November 11th for over a 450+% profit. Two days later, the stock had fallen below $200 and these options were WAY below our exit price.
The stock ended up running back over $200 and hit a high of $210 last week which means these calls traded as high as $10 again. The point we want to make is that although we will leave a little on the table with some of our positions and cut our losses at 50% is because we take the emotion out of the trade.
Would you have really wanted to hold these options up until expiration? Could you have slept at night with the way the market was acting towards the end of the week?
We are still in a trader’s market but we see some good opportunities both on the long side and on the short side. Thanksgiving week is normally pretty bullish but the bears have the momentum. However, the bulls have broken through resistance and have been pushing this market higher since March. One thing is certain. It ought to be another interesting week.
We will be back in the morning with the trade updates and a fresh outlook. As we head to press tonight, Dow futures are up 30 and the S&P 500 futures are up 4. Nasdaq futures are up 6…
Tags: momentum stock option trading, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Hot Stocks | Comments Off
Friday, November 20th, 2009
11:40am (EST)
“I got 99 problems but the market ain’t one”…
Man, what a week.
We wanted to do today’s update a little early because of the current market environment and also because we wanted to take the rest of the day off. The market is showing a little resilience today but we are right in the zones we had outlined in the Weekly Wrap.
The Dow is currently trading at 10,290, down 41, and right near the 10,300-10,400 short-term target we were expecting. We would like to see a close above 10,300. The S&P 500 is the bigger battle where 1,100 remains the line in the sand. The index is currently at 1,088, down 6, and we are hoping for a close ABOVE 1,100. This would help us “relax” this weekend but if we can’t do 1,100…watch 1,070.
The tug-of-war between the bulls and bears could pick up before the closing bell and we have a couple of trades open that we wanted to update.
We had a good week as far as taking profits and limiting losses and that is all you can ask for. Especially with it being option expiration week…Remember, November options expire TODAY so make sure you close any options you may have open.
We still think the underlying tone is bullish but the bears are trying to make some noise. Watch the aforementioned support levels we mentioned earlier. We have an important update on Microsoft (MSFT, $29.60, down $0.17). The stock has held up well but we are adjusting the trade. Current subscribers, please check the Members Area for the update!
Special Notice: We are encouraging all of our “charter members” to upgrade their subscription memberships to at least a 3-month or 6-month membership. As you know, we are limiting the number of subscribers we are allowing because we do not want our trades crowded and we want to stay under Wall Street’s radar. Word is getting out about our results and we should be full sometime by early 2010. We wanted to ensure that you have your memberships locked in before we are capped. Once we are full, there will be a waiting list. Maybe it was the massive 450%+ Priceline.com (PCLN, $209.47, up $1.83) trade we recently closed for our portfolio that has our phones ringing off the hook…
Tags: momentum stock option trading, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Hot Stocks, Market Analysis, Market Commentary, Option Trades, Strategies, Trading Psychology | Comments Off
Friday, November 20th, 2009
9:15am (EST)
The bears finally put up a fight on Thursday just as the major averages were busting through “resistance” but we said we were not out of the woods yet. The S&P 500 was pummeled as the index suffered its worst single-session percentage loss for the month of November.
A disappointing earnings report from Dell (DELL, $14.81, down $1.06) is weighing on the futures this morning. The company reported earnings after the market closed Thursday and it wasn’t pretty…Dell said its 3Q earnings plunged 54% from a year earlier on lower-than-expected sales. The company continues to lose market share and needs to do more to diversify its business.
As you would expect, the futures are indicating a lower open this morning and the bulls will have their work cut out for them if they are to avoid a three-day losing streak. The November options expire today so there may be even more volatility today as traders square away their current positions and roll them out to the next month.
Ahead of the opening bell, Dow Jones futures are off by 58 while the S&P 500 futures are down 7. The Nasdaq 100 futures are also lower by 7. Looks like we are going to have a busy day…Current subscribers, check the Members Area for the trade updates this morning.
Tags: momentum stock option trading X option picks X option trading online X options mentoring X options newsletters X options track record X support and resistance levels X triple-digit option trades, option trading picks
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Thursday, November 19th, 2009
1:30pm (EST)
We date options, we don’t marry them…
The market is getting punished today after getting some unpleasant economic news this morning. The jobless claims report wasn’t too bad…505,000 versus Wall Street’s forecast of 504,000, and slightly higher than the previous week’s 502,000, but the market didn’t like it.
The Conference Board’s index of leading indicators for October, month over month, was higher by 0.3% versus consensus 0.4%, and below the previous month’s 1.0%. Meanwhile, the Philadelphia Fed’s survey for November increased to 16.7 versus expectations of 12.0, and above the previous month’s 11.5.
As a result, the Dow is down 135 points to 10,290 while the S&P 500 is off by 17 to 1,092. The Nasdaq is lower by 41 points and is currently trading at 2,151.
Wednesday morning we said this:
“All things considering, and it may too early to tell, but these levels that we have been talking about being RESISTANCE for the Dow (10,400), S&P 500 (1,100), and the Nasdaq (2,175) have now become SUPPORT. Again, it’s too early to tell because the bulls are running fast this week.”
If you still don’t think we are in a trader’s market, think again.
This means you will have to have strict discipline and take profits when you can. For example, yesterday we were excited when Colgate-Palmolive (CL, $84.14, down $1.73) got hot right before the market closed. Most of our subscribers were looking at gains of over 200%. Some of them closed half of their positions yesterday and the other half this morning.
We had stops in place to protect a 100% return but many of you did better. This is the point we want to make. We have said we will put you in some really great trades and where you take your profits depends on you. If you followed this strategy then your return is more than the one we are going to show.
We went long on Tuesday morning because we felt the stock could make a run to $100 by January. The merger news with British household-product maker Reckitt Benckiser Group yesterday was unexpected but welcomed.
We didn’t close half yesterday because it looked as though the market was battling back at the close and we thought that momentum would carry over into today. If the futures would have been higher this morning then we doubt Colgate would have dropped as much as it did. It has and we had our stops in place.
Now, the stock could rebound but the parameters of the trade have change and although the merger has been denied it could be a drag on the stock. Then again, Colgate could go on to make a run at $100.
Who cares? We made over a 100% return and got out. We may revisit the trade and we will keep the stock and options on our Watch List. But for now, this trade is over.
Microsoft (MSFT, $29.94, down $0.17) just released some breaking news and said it Windows 7 sales have more than doubled any previous version during the same time frame. This has helped the stock rebound off its low of $29.70. We currently have an open trade on Microsoft and we like what the company is doing and saying. Heck, the CEO even said he was ready to roll up his sleeves and take on Apple (AAPL, $201.68, down $4.28). Easy big fella’, we are just hoping your stock can run to $32 by December 18th so we can double our money.
Current subscribers, please check the members Area for the trade updates. We were also stopped out of FedEx (FDX, $82.05, down $1.66) today.
Tags: momentum stock option trading, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Economic News, Hot Stocks, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Option Trades, Trading Psychology | Comments Off
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Futures Pointing Towards Strong Open
Monday, November 23rd, 2009
9:00am (EST)
The futures are pointing towards a higher open this morning as the dollar continues to weaken. The bulls will try to snap a three-day losing streak today and we have talked about the how the market has moved in the opposite direction of the dollar in recent weeks.
Ahead of the opening bell, Dow futures are up 90, to 10,393. The S&P 500 futures are higher by 10, to 1,100, while Nasdaq 100 futures are up 17, to 1,780.
As the dollar weakens, it pushes the value of commodities higher because they become cheaper for foreign investors. A lower dollar has also helped gold reach record highs. Gold has traded higher on 14 out of the last 15 trading sessions and has reached a high of $1,168 an ounce this morning.
As far as economic news, home sales for October are projected to rise to the highest level in more than two years as first-time buyers, anticipating that a tax credit would soon expire, rushed to get in. At 10am (EST) this morning, the National Association of Realtors is expected to report sales rose to a seasonally adjusted annual rate of 5.65 million, up from 5.57 million in September. It would be the highest sales rate in more than two years…
We had a good feeling last night that the market would start the week off strong. Current subscribers can check the Members Area for the trade updates…
Tags: momentum stock option trading, Netflix, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Economic News, Market Commentary, Option Trades | Comments Off