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Archive for February, 2010

MomentumOptionsTrading.com Weekly Wrap for 2/28/10

Sunday, February 28th, 2010

7:30pm (EST)

The market stayed in a tight trading range on Friday as volume was light following another snow storm that hit the upper east coast.  The blizzard that hit New York City kept a lot of traders away from Wall Street and light volume days can be choppy and violent, meaning huge swings, but the market stayed near even for much of the day. 

We mentioned the good economic data we got on Friday which seemed to help the bulls case.  The Commerce Department reported a 5.9% increase in 4Q gross domestic product (GDP), versus Wall Street’s estimate of 5.7%.  Meanwhile, the February Consumer Sentiment Survey from University of Michigan was little changed at 73.6 and in-line with expectations.

The Dow managed to pull out a 4 point gain to close at 10,325 but lost 77, or -0.7%, for the week.  However, the index added 2.6%, or 258 points, for the month of February.

The S&P 500 added a little over a point to settle at 1,104 but lost 5 points, 0.4% for the week.  The good news is that the index gained 2.9% for the month, or 31 points.

Finally, the Nasdaq added 4 ticks on Friday to finish at 2,238.   The index shed just 5 points, or 0.3%, for the week and ended February with a solid gain of 4.2%, or 90 points higher. 

Once again, the targets we set back in August will now come into play and they are: 1,175 for the S&P 500; 2,275 for the Nasdaq; 10,800 for the Dow.  Although we are still getting mixed signals as far as market direction, we think there is a chance of a decent rally and a retest of the January highs over the next few weeks could come into play.

As far as economic news this week, there are quite a few reports we will need to watch but the big one will be Friday’s unemployment update.

Bad weather could be blamed for a small rise in the February unemployment rate as the number of people filing first-time unemployment claims may have jumped, in part because of the weather.  The jobless rate fell to 9.7% in January from 10% in December but is expected to come in at 9.8%. 

On Monday, we get a look at January personal income and spending as well as January construction spending.  The market will also digest the Institute for Supply Management’s (ISM) figures on the February manufacturing index.

On Wednesday, the Federal Reserve will release its Beige Book and on Thursday the government’s revised figures on fourth-quarter productivity are due along with reports on January factory orders and January pending-home sales.

As far as earnings (quotes from Friday’s close):

Monday:  AnnTaylor Stores (ANN, $17.21, up $0.90), AutoZone (AZO, $165.93, down $0.15), Churchill Downs (CHDN, $35.58, up $0.54), Dish Network (DISH, $19.97, up $0.10), Dress Barn (DBRN, $24.86, up $0.03), Foot Locker (FL, $12.97, up $0.20), H&R Block (HRB, $17.28, down $0.06), Kenneth Cole (KCP, $11.72, down $0.46), National Healthcare (NHC, $36.79, down $0.38), Public Storage (PSA, $82.19, up $0.28), Perfect World (PWRD, $39.39, up $2.04), PetSmart (PETM, $27.22, down $0.27) and TiVo (TIVO, $9.48, down $0.13).

Tuesday:  Bank Of Montreal (BMO, $53.17, down $0.65), Cooper Tire & Rubber (CTB, $17.54, up $0.35), Diamond Foods (DMND, $34.85, down $3.86), Domino’s Pizza (DPZ, $12.49, up $0.06) and Staples (SPLS, $25.76, down $0.17).

Wednesday:  Big Lots (BIG, $33.50, up $0.60), BJ’s Wholesale Club (BJ, $36.17, up $0.18), Canadian Solar (CSIQ, $19.12, down $0.17), Cinemark Holdings (CNK, $16.11, up $0.08), Famous Dave’s of America (DAVE, $6.68, up $0.09), Joy Global (JOYG, $50.79, up $0.56), Royal Bank Of Canada (RY, $54.05, up $0.10) and Sun Healthcare Group (SUNH, $8.89, up $0.09).

Thursday:  Anheuser-Busch InBev (ABI.BR, $36.76, up $0.51), Ciena (CIEN, $14.34, down $0.347), Costco Wholesale (COST, $60.97, down $0.43), Del Monte Foods (DLM, $11.72, down $0.16), Overstock.com (OSTK, $12.31, down $0.15), Nash Finch (NAFC, $35.27, down $0.10) and Wendy’s / Arby’s Group (WEN, $4.88, up $0.10). 

Friday:  Urban Outfitters (URBN, $32.30, up $0.32) and Vivus (VVUS, $8.40, down $0.01).

Speaking of earnings, Berkshire Hathaway (BRK/A, $119,000, up $1,000), (BRK/B, $80.13, up $0.73) reported over the weekend and said net income rose to $3 billion, or $1,969 per Class A share, from $117 million, or $76, a year earlier, on revenue of $30 billion for the quarter.

For 2009, net income jumped 61% and came in at $8.1 billion, or $5,193 per class A share, versus $5 billion, or $3,224 per class A share, in 2008.  Berkshire’s net worth rose nearly 20% in 2009 which is the way Mr. Buffett prefers to measure the company’s performance.

No doubt, this will be a story the market follows and Mr. Buffet will be on TV talking about the results on Monday.  We will be back in the morning to give you an update on where the market is headed and a full review on all of the current open positions in the portfolio.

As we head to press, Dow futures are higher by 45 points to 10,356 while the S&P 500 futures are up 6 to 1,109.  The Nasdaq 100 futures are showing a 10 point pop and are at 1,828.  If things hold, we are going higher at the open Monday morning…

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MomentumOptionsTrading.com Trade Alert for 2/26/10

Friday, February 26th, 2010

1:50pm (EST)

We have just sent out a NEW Trade Alert.  Subscribers, check the Members Area NOW or your email inbox!

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Market Slightly Up

Friday, February 26th, 2010

12:30pm (EST)

The bulls are trying to end the week on a positive note but it might not be enough to save the indexes from losing ground overall. 

The Dow started the week at 10,402 and is currently at 10,330, up 9 points.  Unless we get a triple-digit rally, the bears will walk away feeling good about themselves.  However, as choppy as things have been, we still expect some kind of rally over the next several weeks.

The S&P 500 is higher by a point to 1,104 while the Nasdaq is up 2 to 2,236.

We got a mix of economic news but things don’t appear all that bad.  The market has been in a tight range and we still think the Dow has a shot at 10,800; if not 11,000.

We are seeing some strength in certain sectors while at the same time we are seeing stocks that looked poised to tumble.  We have listed quite a few trades that we are watching in our Members Area and we will be taking profits on one of them today while hoping to get in another at the limit prices we have set. 

Earnings season is winding down but we should start hearing clues on how first quarter earnings are shaping up.  Wall Street hasn’t start looking this far ahead, yet, but we think some of the stronger companies will continue to shine. 

There are still a number of headwinds facing the market but we all know the “wall of worry” can be underestimated at times.  Meaning; although we are in a volatile market, don’t rule out a retest of the market highs in March.

We will be back Sunday night with the Weekly Wrap and a look at the companies still reporting 4Q earnings next week.  We were able to score a nice win with our Garmin (GRMN, $32.00, up $0.08) trade this week and next week we are already eyeing a possible earnings trade for Big Lots (BIG, $33.81, up $0.91) which is at 52-week highs today.  Current subscribers, check for the updates as we are closing one of our positions for a sweet gain of 20% in less than 24 hours.

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Futures Flat Ahead of Open

Friday, February 26th, 2010

9:05am (EST)

What a ride.  As an option trader these are exciting times…

The great thing about the market is everyone has a different opinion on a stock or where the market is headed.  It’s what makes it a market.  The more people disagree on where something is headed or what something is valued at, the more heated the debate can become which can lead to wild price swings. 

We knew yesterday’s open was going to be a train wreck; we just didn’t know how bad it was going to be.  The Dow dipped to a low of 10,185, a loss of 189 points at one point yesterday, before climbing back to finish with a much smaller loss of 53 points to close at 10,321.

The S&P 500 managed to bounce off its low of 1,086 to close with a modest 2 point loss and finished at 1,102.  Tech almost got the “W” for the Nasdaq but the index also fell 2 points and closed at 2,234.

In economic news this morning, the Commerce Department reported Gross Domestic Product rose to 5.9% for the October-December quarter while Wall Street expected GDP to remain unchanged at 5.7%.

As far as earnings, Deckers Outdoor (DECK, $106.16, up $4.13) is soaring this morning and is up $9, to $116, in pre-market trading.  The company earned $68 million, or $5.22 a share, up from $41 million, or $3.07 per share, a year earlier.  Wall Street had been expecting earnings of $4.28 a share.

deck

One interesting rumor that is making the rounds is Apple (AAPL, $202.00, up $1.34) doing a 4-for-1 stock split.  Hmmm…we have been clamoring for a 2-for-1 split but we’d rather see Apple at $50 instead of $100.

aapl

As we head to press, Dow futures are up 2 points to 10,318 while the S&P 500 futures are higher by 1.5 to 1,104.  The Nasdaq 100 futures are off by a point and are at 1,812.  Subscribers, check the Members Area for the updates.

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Market Stabilizes But Still Near Lows

Thursday, February 25th, 2010

1:20pm (EST)

The major indexes are all down over 1% today following a weekly jobless claims report and concerns over Greece have dragged down the market.

At midday, the Dow is down 149 points, or 1.4%, to 10,25, the S&P is off by 14 ticks, or 1.3%, to 1,091 while Nasdaq is lower by 29 points, or 1.3%, to 2,206. 

Blockbuster (BBI, $0.30, down $0.06) is back in the news and is down over 17% after reporting disappointing Q4 earnings and announcing it will close 75 to 125 domestic stores this year.  Wow.

Block Buster Daily Chart

Block Buster Daily Chart

We just mentioned the stock in the same breath as Garmin (GRMN, $31.18, down $1.27) but you can see where we are going with this.

We have a lot to cover in our Members Area and we are already late so we will be back in the morning with our next update. 

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