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Apple Does it Again

Tuesday, January 26th, 2010

9:05am (EST)

The bulls were looking for a bounce following last week’s sell-off and seemed enthused at the open. The market appeared poised for a triple-digit pop on Monday but the disappointing existing home sales report gave the bears ammo to push back.

The bears drew a little blood right before lunch as the major indexes dipped into the red but after it was all said and done the market eventually closed higher. However, the bears are leaving their mark.

The Dow finished with a 23 point gain to settle at 10,196 while the S&P added 5 to finish at 1,096. The Nasdaq also added 5 points to close at 2,210.

The big news last night was Apple’s (AAPL, $203.07, up $5.32) incredible quarter which was amazing as usual. The company reported its most profitable three months ever but threw a couple of curveballs that froze Wall Street at the plate.

The first pitch was the news that iPhone sales came in lighter-than-expected and behind that was an accounting change that had analysts up all night. The company changed how it accounts for revenue and profit from the iPhone, making it difficult to see at first whether or not Apple lived up to expectations.

Shares were only up $1.82, to $204.90 by the close of extended trading last night but this morning the stock is up $5, to $208.

Another stock that was active in after-hours last night was EMC (EMC, $16.94, up $0.18) which jumped 5%, or 80 cents, after VMware (VMW, $42.00, up $0.42) announced its earnings. VMware beat estimates across the board sending is shares up nearly 20% in after-hours.

EMC owns 80% of VMware and announced its own earnings this morning. The company also beat the Street’s numbers after posting a profit of $0.33 a share for the quarter on revenue of $4.1 billion. Estimates were at $0.30 cents a share on revenue of $4.02 billion.

EMC also forecast a 2010 profit of $1.12 a share on revenue of $16 billion, which would beat the average forecasts for profit of $1.11 a share on revenue of $15.5 billion.

We currently have an option trade on EMC that should see some nice gains this morning.

Despite all of our good news, as we head to press the futures are pointing towards a slightly lower open. Dow futures are down by 9 points while the S&P 500 futures are off by 3. The Nasdaq futures are up 2 points.

This is a considerable improvement from this morning as Dow futures were down 70. We have updated the Members Area with our current trades and we can’t wait to get started today.

Tags: option picks, option signals, options alerts, stock options trading
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off

Apple Set To Report Earnings

Monday, January 25th, 2010

12:30pm (EST)

The bulls are out today in an effort to take back some of the momentum from the bears after last week’s drubbing. The Dow started off strong and looked headed for a triple-digit gain but is only up 51 points, to 10,224, as we go to press.

The index reached 10,256 but has come off its high after a disappointing housing report. The National Association of Realtors said December sales fell 16.7% to a seasonally adjusted annual rate of 5.5 million, from an unchanged pace of 6.5 million in November. Wall Street had been expecting a 10% decline but the reaction has been mild as an expected sharp drop was in the cards after the tax credit for first-time homeowners was due to expire and was later extended.

The bulk of earnings will get underway this week and all eyes will be on Apple (AAPL, $201.43, up $3.68) after the close today. The stock was at a 52-week high last Wednesday when it reached $215 but dropped nearly 8% to close out last week.

We know Apple will report a blowout quarter but will it be enough to satisfy Wall Street’s “whisper numbers”? We have already seen quite a few companies crush Wall Street’s estimates and we honestly don’t know where the stock will trade this time out after reporting earnings.

Apple will probably move at least 10% and here is how we get that information.

If you take the premium of the February 200 calls (APVBT, $10.60, up $0.75) and the February 200 puts (APVNT, $9.00, down $3.00) you get about $20 ($10.60+$9.00) which is 10% of $200.

As you can see, the premiums are super rich but these two options will be on the move all week. It’s possible that this would be a good straddle option trade because shares of Apple will be volatile. The company will also unveil its new tablet on Wednesday and the rumored price tag is $1,000.

There are multiple ways to play the earnings and you could also use a strangle option trade. The February 180 puts (APVNP, $2.50, down $1.55) and the February 220 calls (AJLBX, $3.40, up $0.10) could be used to try to capture some profits on the volatility but we don’t really like betting against Apple.

Either of these two options could double on Tuesday depending on how the market reacts but we aren’t playing either trade. We are momentum traders and as much as we would love to go long on the calls we just don’t trust the current market environment.

With that said if Apple tanks on Tuesday we may be able to pick up some cheaper call options as a possible “rebound” trade. If shares move higher after earnings the stock could be at new 52-week highs.

We also think there is a small possibility of Apple announcing a stock-split which in our minds would be the perfect time to make such an announcement. Normally, Apple favors a 2-for-1 split and the last time they did one was in 2005 when the stock was at $90. In 2000 the company did a 2-for-1 when shares were approaching $100.

Steve Jobs loves the spotlight and it’s time for another split. We are also watching Verizon (V, $30.64, up $0.30) as we feel there is a good chance Apple announces a new partnership with them to carry the iPhone.

Special Announcement: We have told you about the new changes coming to the options market and it looks like it is right around the corner. Next month, new options tickers will take effect and some financial sites are already using using the updated 21-character symbols.

We will be talking about these changes in the Members Area over the next few weeks as we also begin to implement the new ticker symbols. Some of our current trades do not expire for 4 and 5 months so we need to catch everyone up to speed. The change will make it much easier to look up option symbols although some already hate it.

We have updated the current positions and we urge investors to remain patient and focused as the markets goes through its current ebb and flow. We play both sides of the market and remain excited about a market correction if there is one coming.

We still think we get a nice rally before the market fades but we are watching key support levels closely. We have seen major buying come in over the past 10 months when the market dips 5% so we will have to see how this one plays out.

Tags: option picks, option signals, options alerts, stock options trading
Posted in Apple, Earnings, Market Commentary, Strategies, Trading Psychology, Trading Tips, strangle option trades | Comments Off

Market Continues Lower

Friday, January 22nd, 2010

1:10pm (EST)

The bulls are putting up a small fight today as the market has bounced off its lows but the bears look to be in control again today. The Dow is currently down 39 points and is trading at 10,350 after touching a low of 10,297. The S&P 500 is lower by 5 ticks and is at 1,110 while the Nasdaq is off by 15 points to 2,250.

We spent a lot of time this morning talking about the current market conditions out here and in the Members Area. We figured we would see a little selling pressure at the open but we still remain optimistic that the bulls will make one last hoorah before the bears try to take us even lower.

One thing we want to point out is that we said last Friday we could get a 5%-10% correction. Well, if you take the Dow’s high of 10,763 on Tuesday and its current levels you get a 4% correction.

We also said we didn’t expect February to be a very good month for the market so our hope is that we get some kind of bounce next week. Normally when the CBOE Volatility Index (VIX 22.82, up 55) makes this kind of sharp reversal we know something is going on. The VIX was at 17-ish on Wednesday and has jumped over 30% in two days.

The VIX measures “fear” on Wall Street and is one indicator we like to follow to try and get a read on the market. High readings mean that Wall Street is nervous and bearish. A low reading indicates calm and the Street is bullish.

If the VIX is at 30 or more then it means the market is nervous. If the VIX is under 20, the market is confident. Well, at 17 the market was real confident which is why we said the market could be topping out.

We know things have not been good for the bulls over the last few days and the Financial stocks continue to get roped. Goldman Sachs (GS, $157.84, down $3.03) is down another 2% and will continue to be volatile from here on out. However, all things are pointing towards some type of relief rally next week before the bulls hand over the car keys.

A couple of earnings to watch for Monday will be Halliburton’s (HAL, $31.74, down $0.79) in the morning and Apple’s (AAPL, $203.90, down $4.17) numbers after the bell.

We will be back Sunday night with the Weekly Wrap and a fresh outlook on what companies will be making news next week.

Tags: option picks, option signals, options alerts, stock options trading
Posted in Apple, Earnings, VIX | Comments Off

Futures Point To Lower Open

Wednesday, January 6th, 2010

9:00am (EST)

The bulls managed to stage a late comeback yesterday as they pulled the market from its lows and managed to take two-out-of-three “rounds” from the bears.

The S&P 500 managed a 3.5 gain to settle at 1,136 while the Nasdaq posted a half-point to close at 2,308. The Dow opened with the slight gain but spent 99% of Tuesday’s session in the red. The index lost 12 points and finished at 10,572.

We got a mixed bag of economic news yesterday. The Commerce Department reported factory orders rose 1.1% easily beating the 0.5% forecast Wall Street was expecting.

Meanwhile, the National Association of Realtors said its index of pending home sales fell a whopping 16% which caught the market by surprise. It was the first drop after nine months of gains. Some decline had been expected as buyers rushed in to grab homes ahead of the tax credit deadline, but that was later extended so the number was a little bit disappointing.

As far as specific stocks, Apple (AAPL, $214.38, up $0.37) looks like it will hit $250 sometime soon. There are higher price targets out there on the stock but we wouldn’t be surprised if our target is hit by the end of the month. The company continues to plow over the competition and we are hearing Apple has a major product announcement set for January 27.

It is no secret Apple will announce a tablet product of some kind and whatever it is and does…it will better than anything currently out there. We would love to play some options on Apple but the premiums are rich and we can get more bang for our buck buying options on stocks under $100.

The ADP National Employment Report came out this morning and is often used as a forecast for the unemployment report. The ADP report was expected to show a loss of 73,000 jobs in December and we got a number north of 80,000. That’s far better than the 169,000 jobs lost in November and futures did improve a little.

As we head to press though, it looks like the market is going to open slightly lower this morning. However, Dow futures are only down 6 so the bulls could come in after the bell.

We have some important updates as far as our option trades this morning. We also profile another NEW trade. Current Subscribers, check the Members Area for the updates.

Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option price, option selling, option trade, option trade picks, option trading online, options, options blog, options expiration, options mentoring, options newsletters, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Apple, Economic News, Hot Stocks | Comments Off

Bulls Looking to Run

Monday, December 28th, 2009

9:00am (EST)

Futures are pointing towards a slightly higher open this morning as the bulls look to continue their recent momentum. Dow futures are up 10 as we head to press, Nasdaq futures are up 4 while the S&P 500 futures are up 2.5.

Apple (AAPL, $211.50, up $2.46) and Amazon.com (AMZN, $139.11, up $0.64) are up in pre-market trading and look like a solid pair of pocket Aces to hold.

Apple got its price target raised to $260 as the company continues to gain share while generating tremendous amounts of cash. Same with Amazon. We were hoping Amazon would come back down the day after we made a 50% profit last week but shares haven’t looked back.

We are keeping an eye on both stocks and if there is another chance to get in Amazon.com we will alert you. We have updated all of our current trades and subscribers can check the Members Area this morning for the updates.

Tags: alternative investments, Apple upgrade, asset management, blog Wall Street, buying call options, buying put options, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option price, option selling, option trade, options, options expiration, options trade, options trading, options trading strategies, private equity, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strategies options, the Wall Street, trading, trading option, trading options, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Apple, Company Commentary, Earnings, Option Trades | Comments Off

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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.

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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
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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.
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NOEL
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TODD F.
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NOEL
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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.”

Archive for the ‘Apple’ Category

Apple Does it Again

Apple Set To Report Earnings

Market Continues Lower

Futures Point To Lower Open

Bulls Looking to Run