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Archive for February, 2010

MomentumOptionsTrading.com Trade Alert for 2/25/10

Thursday, February 25th, 2010

11:05am (EST)

We have just profiled a NEW option trade to take advantage of the market’s drop.  This S&P is currently trading at 1,091, down 14 points, and is right at key support levels.  Wall Street is watching 1,088 and is taking bets on which way we are headed.

Current subscribers, check the Members Area for the update or your email inbox.

Market Drops On Jobless Data

Thursday, February 25th, 2010

10:00am (EST)

We wanted to do a quick update after the market opened because we didn’t talk about too any specific stocks in our morning update.  We did mention a few in the Members Area and we armed our subscribers with an array of weapons to play all three of the major indexes by profiling some options on the Dow, S&P 500 and the Nasdaq.

As far as some of the other stories we are following…

It looks like the Grim Reaper is knocking on Palm’s (PALM, $6.66, down $1.43) door after the company cut revenue estimates and said phones sales are weak.  How scary is that stock quote?  We have mentioned the intense competition in the smart-phone arena and Palm had its 15 minutes of fame…

PALM - Hourly Chart

PALM - Hourly Chart

Garmin (GRMN, $31.81, down $0.64) is down another 2% and sure looks like it is headed below $30.  We took quick profits on a put option trade yesterday but like we told our subscribers, this stock could be in the teens in 6 months. 

GRMN Hourly Chart

GRMN - Hourly Chart

The Greece news from last night was already a factor in today’s drop for the market but things got worse when we got the jobless claims number.  The number for U.S. workers filing initial claims for unemployment benefits rose to 496,000.  The higher-than-expected number was not good and caught Wall Street by surprise.

As a result, the Dow is currently down 170 points, or 1.6%, to 10,204 while the S&P 500 is getting hit for 18 points and is at 1,086, down 1.7%.  The Nasdaq is at 2,200 after getting whacked for 35 points. 

We also wanted to let you know that we have a new toy for the website.  Take notice of your own personalized ticker tape folks!  Yes, that’s right.  You can EDIT the ticker tape on our site to follow all of your favorite stocks while keeping an eye out for our updates.  You can also get a CHART by clicking on the stock symbol.  How cool is that? 

The bulls are down and we should see some signs throughout the next few hours if they stay down.  We are waiting on the sidelines but have our helmet ready in case we go into the game.  If we call a play, we will be sure to let you know…

Greece Is the Word

Thursday, February 25th, 2010

9:00am (EST)

Greece was the word that the bulls heard in their sleep last night as the futures market was already pricing in today’s big drop at the open.  We checked on the futures at 2am (EST) this morning and we were surprised but not stunned to see the Dow futures were off by a whopping 59 points.  The S&P 500 and Nasdaq futures were off by 8 and 12, respectively. 

Volatility has become the common theme over the last few weeks and triple-digit swings on the Dow are becoming the norm.  On Wednesday, the Dow finished with a gain of 92 points and settled at 10,374 following Tuesday’s 100-point drop. 

The S&P 500 tacked on 10 points to settle at 1,105 and climbed back above the 1,100 level while the Nasdaq chugged a double-deuce (up 22 points) to close at 2,235.

Greece now plans to issue a 10-year bond next week after their government announced a package of between $2.7 billion and $3.4 billion that it hopes to raise for the troubled country.  S&P warned it could downgrade Greece by one or two notches within the next month, which could put the country’s long-term rating on the brink of junk territory. 

As a result, futures have gotten worse as Wall Street worries.  The Dow futures are off by 87 points to 10,269 while the S&P 500 futures are lower by 11 to 1,093.  Meanwhile, the Nasdaq 100 futures are down 16 points to 1,798. 

We continue to feel the current volatility is pointing towards a big move for the market and Greece’s debt is not NEW news.  It’s hard to imagine the bulls giving up here and today’s open will be nasty.  However, we think there is one more move higher before the Dow fades, and it will be interesting to see how well the bulls battle back this morning.

Garmin Tanks On Lower Margins

Wednesday, February 24th, 2010

12:35pm (EST)

The market is trying to rebound from a two-day slide and has held up well after hearing Federal Reserve Chairman Ben Bernanke tell Congress that low interest rates are still needed to support the economy.  He also added that interest rates will probably remain low for an extended period to allow more time for an economic recovery.

The Commerce Department said sales of new homes fell to a record low in January as Wall Street had been expecting an increase.  New home sales fell a whopping 11.2% last month to a seasonally adjusted annual sales rate of 309,000 units versus a forecast of 360,000.  This was the lowest level on a record in nearly 50 years.

The Department of Energy released its inventory report which showed a larger than expected build up of crude oil, but a larger than expected draw down of gasoline.

As a result, the Dow is currently up 85 points to 10,367.  The Nasdaq is higher by 22 points and is at 2,236 while the S&P is up 9 points to 1,103..

In earnings news, Garmin (GRMN, $31.99, down $2.46) is getting a haircut despite beating Wall Street’s estimates.

GRMN - 60 Minute Chart

GRMN - 60 Minute Chart

The company earned $278 million, or $1.38 a share versus $158 million, or $0.78 a share, during the year ago period.  More importantly, Garmin also said it sees its NuviFone operating margins to be slightly negative in 2010.

We have mentioned Garmin often in this space over the last few months and yesterday we profiled an earnings trade to take advantage on a possible move lower.  We knew the company would beat estimates but like we told our readers yesterday, Garmin is the next Blockbuster (BBI/B, $0.26, down $0.03).

Garmin has made a niche for itself in the navigation field but there is just too much better and cheaper competition that continues to eat away at the company’s margins.  Here is what we said yesterday in our Members Area:

“Garmin reports earnings on Wednesday and we have talked about Garmin in the past.  A recent stroll in our neighborhood showed the latest Garmin devices selling at 50% discounted prices and there were a TON of them.  It looked liked the same display that has been up at Christmas…

The company is in a dying business as simple, easier ways of navigation are now available.  Google and Nokia said they will offer free turn-by-turn navigation on mobile phones and we are sure other applications will continue to be far cheaper than Garmin’s products.”

Current subscribers who acted on those comments are up 75%-100% today on a put option trade.  Yes, earnings trades are risky but if you can read the hidden message before a company reports then you have a chance at a pretty good payday.

We have updated all of our trades, including Garmin, so please check the Members Area NOW

Bennie And The Rates

Wednesday, February 24th, 2010

9:05am (EST)

The market was trying to get back on track Tuesday and started off in positive territory shortly after the open, but quickly relinquished its gains after the Consumer Confidence report showed an unexpected drop.  This caught Wall Street off guard and the negative tone lasted throughout the day.

The Dow fell 101 points yesterday to close at 10,282, the S&P slipped 13 to 1,094, while the Nasdaq lost 29 points to finish at 2,216.

Futures are slightly higher this morning ahead of Ben Bernanke’s testimony before Congress. The Federal Reserve chief will provide an outlook for interest rates and the economy over the next few days. 

The government will be looking for clues on what the Fed can or will do to help create jobs and make the economic recovery last while Wall Street will want to know when interest rate tightening will begin.

As far as economic news, the Commerce Department is expected to show that new home sales rose in January, after declining sharply a month earlier.  Sales of new homes could show a rise of up to 5.3% in January to a seasonally adjusted annual rate of 360,000 units, according to Wall Street’s numbers.  The report will come 30 minutes after the opening bell.

As we head to press, Dow futures are up 6 to 10,304.  S&P 500 futures have barely budged and stand at 1,097, while the Nasdaq 100 futures are higher by 4 points to 1,804.

We have a lot to cover in our Members Area this morning so let’s get in there!

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Trader Comments:

    REGINA L.
    I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year
    of membership rather than the one quarter. Thanks again, and LOVE YOU ALL.

    STEVE T.
    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

    SCOTT H.
    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

    PETER G.
    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485

    LAWRENCE O.
    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

    C.J.
    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

    SHAUN
    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

    MICHAEL K.
    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
    profitable calls. Keep up the good work.

    PARAG P.
    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

    JAY P.
    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

    MIKE
    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

    TRISH D.
    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

    MIN L.
    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock!

    JOE G.
    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you!

    GREG F.
    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

    NOEL
    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

    TODD F.
    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

    PAUL H.
    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

    NOEL
    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

    CHRISTIAN
    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

    JOHN
    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

    CHARLES M.
    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

    BRYAN C.
    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

    JOHN H.
    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

    JEFFREY
    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

    ED
    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

    GREG
    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

    KEN
    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

    GARETT
    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

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