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Wednesday, February 1st, 2012
9:00am (EST)
After an initial pop at the open, the market matched Monday’s action by testing support and spending the rest of Tuesday’s session trying to get back to even. Following a 3-week rally to start the year, a short-term trading range has developed over the past week-and-a-half which could be decided by Friday. Economic news, and earnings, could help or hinder both the bears and bulls as we continue to wait patiently for a breakout or breakdown.
The Dow declined 21 points, or 0.2%, to close at 12,632. The blue-chips reached a high of 12,720 at the open but also fell to a low 12,567 on the weaker-than-expected economic news.
The S&P 500 slipped a point, or 0.1%, to settle at 1,312. The index traded up to 1,321 within the first 30 minutes of action but had dropped to 1,306 by lunchtime.
The Nasdaq edged higher by 2 points, or 0.1%, to end at 2,814. Tech reached a peak of 2,826 at the start of trading but slipped to a low of 2,798 intraday.
Amazon.com (AMZN, $194.44, up $2.29) announced their numbers after the close last night, but unlike Apple (AAPL, $456.26, up $3.25), they failed to crush Wall Street’s estimates and actually came up a little short.
The company posted a profit of $177 million, or 38 cents a share, on revenue of $17.4 billion. The suit-and-ties were looking for 17 cents a share on sales of $18.25 billion.
Looking ahead, Amazon also came in a little light on their forecast for the current quarter after predicting revenues in a range of $12-$13.4 billion versus expectations for $13.4 billion.
Shares were whacked in after-hours trading last night after dropping $17 to $177, or down 9%. This morning, in pre-market action, shares are at $175, down $19.
As we head to press, Dow futures are up 81 points to 12,658 while the S&P 500 futures are higher by 8 points to 1,316. The Nasdaq futures are off by 11 points to 2,475.
We have a lot to cover this morning, including some chart work for one of our current trades so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: AAPL, AMZN, AMZN earnings
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off
Thursday, January 26th, 2012
9:00am (EST)
Although we do a lot of homework, it’s amazing how easy it has been to bet against the Wall Street pros and Debbie Downers this year and since last August. We reminded you yesterday in early November when the Dow was at 11,800 and on the verge of breaking down like a rented mule the blue-chips would still rally 1,000 points.
We have also been saying a close above 1,300 on the S&P 500 would get the index to 1,325-1,350 on fluff. We reminded readers Sunday night in our Weekly Wrap it was only a 2% move from Friday’s closing price to our top-end short-term target.
We also said yesterday, it would be interesting if Tech could muster a close above 2,800. We have been telling you to circle 2,887 which is the 52-week high for the Nasdaq and to pencil-in a possible trip to 3K for the index.
We said in October when the VIX was above 30 it was headed to 22.50. From there we said a run to 15 could come.
The market is making us look like geniuses right now (although it can humble us in a New York minute) and as an option trader, it’s important to strike the iron while it is hot. No one knows where the market is headed today, tomorrow, or next week but chart work does help. Following the VIX does help. Listening to the talking heads get it all wrong does help.
We are saying this because we have the best job in the world and more and more of you are learning our trading style through our option trading manual and videos which is awesome to see. Like we say, what else are you going to do when you retire? If you learn to trade with us now, the education we will give you will last a lifetime. Our special offer will expire at the end of the month and we give you the details below…
The market surged higher on Wednesday but not the way Wall Street expected. Instead of Apple (AAPL, $446.66, up $26.25) leading the way, it was Big Ben who said the Fed was ready to turn on the money presses if needed. In fact, here was his money quote that put the bulls in a frizzy:
“I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point. If the situation continues with inflation below target and unemployment declining at a rate which is very, very slow, then the logic of our framework says we should be looking for ways to do more”.
Bingo. The rest of the trading session was bear history.
The Dow jumped 81 points, or 0.6%, to settle at 12,757. The blue-chips traded down to 12,580 which stretched short-term support at 12,600. The high for the day was 12,778, or a double-deuce (22 points) from our 12,800 target. There is room for a run to 13,000 but we are getting nervous.
The S&P gained 11 points, or 0.9%, to finish at 1,326. The low for the session was 1,307 which was slightly above support at 1,300. The high was 1,328 and the index closed within our 1,325-1,350 zone. There is a chance 1,375 comes into play put the market genie may not grant us that wish before a pullback comes.
The Nasdaq added 32 points, or 1.1%, to end at 2,818. Tech traded up to 2,822 and is 70 points away from making new 52-week highs. The bulls will need to add another 2% without Apple’s help which could be asking for a lot unless shares are headed to $500 by month’s end.
Special Note: Our one-year deal will expire in 6 days and here are the details. If you sign-up for a 1-year membership to our Daily newsletter, we will include a 1-year subscription to the Weekly Wrap which is priced the same as our Daily. We will also include our option trading manual “How to Trade Options on Momentum Stocks” at no charge (an $899 value!) and shipping is on the house. The course also includes our “Momentum Stocks Watch List” which details over 1,000 stocks and dozens of sectors. Your subscription will also include our monthly/ bi-monthly videos which cover chart work, current trades, and possible new ones we don’t mention in the newsletter or Watch List.
We have set up a special tab on our subscription page where you will see both the Daily and the Weekly in a package deal that reads Annual Subscription to Daily and Weekly Wrap.
https://secure.momentumoptionstrading.com/amember/signup.php
Do the paperwork and we will send out our option trading courses to you within 24 hours and provide you access to our videos right away.
The Weekly Wrap went 16-0 in 2011 and is 7-0 to start 2012. The winning trades for January were: SGMS +6%, VVUS +17%, F +8%, AA +7%, CLNE +27%, DNDN +18%, MGM +19%.
In 2011, we traded Vivus 3 times for the Weekly Wrap for gains of 18%, 14%, and 17% as the stock stated the year at $9.73 and ended at $9.75. Now it’s at $12 and we are still riding the wave. By writing call options on 4 different options trades ( 1 for 2012), we were able to book profits of $122, $130, $125 and $161. Folks, that is $538 in profits on a stock that stayed flat or a return of 55% using call options.
The savings on this package is 67% and we will not offer this deal again in 2012. For those of you on monthly memberships, time to super-size. Tell your friends.
We have 2 NEW TRADES we are releasing this morning and we are going to try to get them at the open using limit prices. Subscribers, check the Members Area for details and keep your boots to the ground. We have 10 other current trades we are trying to lock down profits in.
Tags: APPL, Bernanke, VIX
Posted in Apple, Market Analysis, Market Commentary | Comments Off
Wednesday, January 25th, 2012
9:00am (EST)
Oh, baby do you know what that’s worth? ($100 billion)
Oh, Heaven is a place on Earth.
They say in Heaven, love comes first
We’ll make Heaven a place on Earth.
Steve Jobs is certainly smiling from up above and it feels as though he never left us. We thought today’s blast from the past was the perfect song to start our morning as we look ahead to the opening bell…
The market made a nice rebound off yesterday’s lows and remained in a tight range for the rest of the day as Wall Street awaited Apple’s (AAPL, $420.41, down $7.00) quarterly results. Despite the nervousness of an Apple letdown, Tech had a strong day compared to other sectors which helped the major averages hold support as the market ended mixed.
The Dow fell 33 points, or 0.3%, to close at 12,675 while the S&P slipped a point to finish at 1,315. The Nasdaq added 2 points to settle at 2,786 but failed to crack 2,800 but this shouldn’t be an issue today.
As far as Apple’s numbers, needless to say, the suit-and-ties were divided heading into the report as half the analysts seemed to be giddy while the other half said there was a chance for an earnings miss – but none of them seemed sure or wanted to bet the ranch. Shares were halted until 4:50pm (EST) in extended trading last night which was a little unusual and goes to show how the much Wall Street weight the company had on its shoulders.
There were over 125 Apple articles within 3 hours after the close on Yahoo’s (YHOO, $15.69, up $0.01) Finance page yesterday talking about Apple’s mind-boggling results.
The company reported a profit of $13 billion, or $13.87 a share, on revenue of $46 billion. The pencil-pushers were looking for earnings of $10 billion on $39 billion in sales. A quick rundown on the record 3 months: 37 million iPhones sold during the quarter, over 15 million iPads, and 5 million Macs. To put things in perspective, the number of iPhones and iPads sold were over 100% increases from the prior quarter. We didn’t even mention the iPods sold for the quarter and the fact its iTunes store is approaching $2 billion sales. By the end of this year, iTunes alone could be a double-digit billion dollar business!
Apple added another $16 billion to its coffers and now has nearly $100 billion in its war chest. Yes, the company ended the quarter with $97.5 billion in cash and marketable securities on its books. Wow.
Once again, we were hoping for a stock-split of 4-for-1 which would have gotten shares down to $100 or so but Apple hasn’t split its stock since 2005 when it did a 2-for-1 deal.
The options on a $400 stock can be expensive and we looked at the Apple February 370 puts (AAPL120218P00370000, $1.80, up $0.35) and the February 470 calls (AAPL120218C00470000, $1.20, down $0.80) yesterday as a possible strangle option trade after our update which represented a $50 move in the stock. We were calculating a 10% swing either way which would get shares to $380 or $460 based on the price at the time. The 10% move wasn’t enough to get the stock past these strike prices which made us nervous because we want shares to move enough to cover the cost of the trade.
Apple shares were up $30 to $450 in after-hours trading last night once they opened and did hit a high of $470 before chilling. This morning they are at $454, up $34. The puts will take a huge hit while the calls should get a nice pop at the open.
As you can see, the option premiums are rich on triple-digit stocks and you need a massive move in the stock to hopefully make a decent return. We would rather play options on stocks on under $100 where a 5% move would double your money or make you 100+% with the right option.
Apple is one of the few triple-digit stocks we wish we could play options on but the risks outweigh the rewards, especially when selling these types of options. No worries. There are hundreds of other stocks we follow under $100 that trade options and we have no problem letting the big boys trade Apple while we focus on Microsoft (MSFT, $29.34, down $0.39), Aflac (AFL, $49.07, up $1.02) and MGM Resorts (MGM, $13.16, up $0.02).
Our subscribers have banked 125% on Microsoft calls, 127% on Aflac call options, and 131% and 114% on 2 MGM call option trades this month alone. Our Seagate Technology (STX, $19.75, up $0.07) also made 100%. That’s 5 triple-digit call option trade winners on stocks that have moved $1-$3 in the last 3 weeks.
With futures up this morning thanks to Apple, we are hoping our other call option trades get some nice pin action.
Futures are mixed as we head to press and look like this: Dow futures are down 35 points to 12,591 while the S&P futures are off by 3 points to 1,308. The Nasdaq futures are showing a 18 point pop and are at 2,445.
Subscribers, check the Members Area for the updates and stay on your toes for possible Trade Alerts. With the Fed speaking at noon, we could be in for a wild ride today as we near the July and April 2011 market highs.
Tags: AAPL, AAPL earnings, Apple stock options), call options, put options, YHOO
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off
Tuesday, January 24th, 2012
1:00pm (EST)
Futures were weak throughout the night following a collapse in the Greece debt talks and got progressively worse as the European markets opened for trading. The weak open overseas translated into a lower start here at home as the bears try to stop the bulls recent momentum.
The European Union rejected Greece’s bondholders swap for a 4% interest rate on newer bonds in exchange for the current tab which puts the country at risk for a default, again. We have seen this circus before and Greece is only part of the problem as Portugal and Italy are next in-line.
Despite the worries, the market has bounced off its lows after holding short-term support which was prior resistance.
In earnings news, Coach (COH, $68.65, up $4.41) is trading higher after beating Wall Street’s estimates by 3 cents a share. It was the fifth-straight quarter Coach has beat estimates on average by 3 cents and we were looking for an earnings miss.
We talked about the company’s impressive numbers yesterday for 2011 and how they had come in ahead of the suit-and-ties for the last 4 quarters but we were convinced they would come up short, or lower guidance, and we were wrong.
The other earnings trade we wanted to take was EMC (EMC, $24.81, up $1.37) but we didn’t like yesterday’s action in the market and decided to stay on the sidelines. We have looked at the stock as a covered call trade and yesterday we peaked at the February 25 calls (EMC120218C00025000, $0.46, up $0.23), which are up 100%, but didn’t like the idea of having 2 all-or-nothing trades.
We are 13-1 for closed trades for 2012 and we have locked in half profits on a number of other trades so we haven’t taken any new trades this week. We see a number of new option trades we like, but if we learned anything in 2010 and the first half of 2011, it is choppy markets are hard to trade and its best sometimes to wait until we get a clearer picture.
We said Sunday night in our Weekly Wrap that Greece could weigh on the market all week and how the talking heads and pros were saying this was a done deal by Monday. No agreement has been reached, yet, and here it is Tuesday.
The Fed will also take center stage on Wednesday as it prepares to release the latest minutes along with the Rate Decision during Wall Street’s lunch break. There has been talk of more easing, or starting up the money printing press again, but with tax refunds starting to come out, we think the Fed stands pat. Tomorrow will also be a big day for Housing numbers.
The big news after the bell will be Apple (AAPL, $424.12, down $3.29) which will be reporting their quarterly results. The bulls have done of a great job of brushing-off Europe’s woes once again but this week is packed with earnings as 25% of the S&P companies will be confessing. This will be the most important one.
It’s still possible the bulls can push the July and April highs on an Apple beat-and-raise but we are in a win-win situation, either way, as we have continued to play the ride up while locking in profits along the way. At some point we are expecting a pullback but our Hard Stops will lock in our profits. We also have longer dated call options that should be okay, but, if the market does take a dip we will be ready to play the pullback.
As we head to press, the Dow is down 45 points to 12,663 after kissing a low of 12,613 while the S&P 500 is lower by 4 points to 1,312 after kissing 1,306. The Nasdaq is trying to rally the troops as it is showing a gain of 2 points to 2,786.
Our Aflac (AFL, $48.40, up $0.35) call option trade has just hit a 100% return so today hasn’t been too bad despite the Coach snafu. Dendreon (DNDN, $14.11, up $0.90) is on the move again and we are just watching the action. Subscribers, check the Members Area for the updates.
Tags: AAPL, Apple earnings, COH, dndn, EMC
Posted in Apple, Covered Calls, Earnings, Hot Stocks | Comments Off
Monday, November 28th, 2011
9:00 (EST)
The market continued its recent slide as the bears had their best bull feast in nearly 80 years as Wall Street fell 5% last week. The recent selling pressure became much more serious as all of the indexes fell below their 50-day moving averages (MA) with the bears stretching their winning streak to seven-straight sessions.
The headline news read like a Vegas betting parlor as a number of European countries face further risks of defaulting. Germany was the latest country which showed a chink in the armor after trying to raise $6 billion euro but was only able to raise a little over half of it. Spain also went to the well and was successful in its bond auction but the yields came at a hefty price. Italy faces a huge crisis in 2012 if they can’t raise more dough, and they are trying, but it’s costing them an arm-and-leg.
The news here at home continues to come in better-than-expected and this week will be big with a number of month-end reports due out. As far as the charts, they have been stretched which often happens when headline news trumps the technical picture. The bears have clearly had the advantage and at some point there will be a rebound but until Europe can figure out its mess, the market will be held hostage.
The Dow slipped 26 points, or 0.2%, to finish at 11,232 on Friday’s shortened session. We went into the week looking for 11,600 to hold but that level was taken out on Monday. Our next downside targets were 11,400 and then 11,200, which held, but there is risk down to 10,800 this week if current levels don’t hold. If the bulls can get past 11,400 (black line, purple circles) then they could make a run back towards 11,600 and then 12,000 but the news has got to be awfully good. For the week, the Dow dropped 564 points, or 4.8%, and is now down 346 points, or 3% YTD…
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If you are not a subscriber but would like to read more about where the market is headed and to take a closer look at our chart work along with our current trades, please click here. Since early August we have made 48 recommendation, both calls and puts, and have hit on 40 out of 48 trades for a winning percentage of over 80%! Some of our recent winners include:
+169% on Joy Global (JOYG) call options in 2 days
+137% in Research In Motion (RIMM) put options in 3 weeks
+130% in Spreadtrum Communications (SPRD) call options in 4 weeks
+164% in FedEx (FDX) put options in 6 days
+184% in Goldman Sachs (GS) put options in 5 days
+191% in O’Reilly Automotive (ORLY) call options in 17 days
+100% in VMWare (VMW) call options in 4 days
We are one of the fastest growing stock options trading advisors on the internet. We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter. Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis. Sign-up now and receive access instantly!
Futures are pointing towards a strong start for today’s session and look like this: Dow (+255), S&P 500 (+34), Nasdaq 100 (+53). We recommended 4 new trades on Friday and after two weeks of being patient and building new positions, hopefully we get the surge we have been expecting. Subscribers, check the Members Area for the updates.
Tags: Dow, Momentum stocks, stock options trading advisors
Posted in Apple, BioTech, China, Commodities, Company Commentary, Covered Calls, Earnings, Economic News, Entertainment Stocks, European Union (EU), Financial Stocks, Futures, Gold, Google, Hot Stocks, IPOs, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Oil, Option Trades, Rick's Account, Sectors, Stock Earnings, strangle option trades, Trade Update, Trading Psychology, Trading Tips, Uncategorized, VIX, Watch Lists, Yahoo / Microsoft | Comments Off
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Amazon.com (AMZN) Reports Mixed Results, Lowers Guidance
Wednesday, February 1st, 2012
9:00am (EST)
After an initial pop at the open, the market matched Monday’s action by testing support and spending the rest of Tuesday’s session trying to get back to even. Following a 3-week rally to start the year, a short-term trading range has developed over the past week-and-a-half which could be decided by Friday. Economic news, and earnings, could help or hinder both the bears and bulls as we continue to wait patiently for a breakout or breakdown.
The Dow declined 21 points, or 0.2%, to close at 12,632. The blue-chips reached a high of 12,720 at the open but also fell to a low 12,567 on the weaker-than-expected economic news.
The S&P 500 slipped a point, or 0.1%, to settle at 1,312. The index traded up to 1,321 within the first 30 minutes of action but had dropped to 1,306 by lunchtime.
The Nasdaq edged higher by 2 points, or 0.1%, to end at 2,814. Tech reached a peak of 2,826 at the start of trading but slipped to a low of 2,798 intraday.
Amazon.com (AMZN, $194.44, up $2.29) announced their numbers after the close last night, but unlike Apple (AAPL, $456.26, up $3.25), they failed to crush Wall Street’s estimates and actually came up a little short.
The company posted a profit of $177 million, or 38 cents a share, on revenue of $17.4 billion. The suit-and-ties were looking for 17 cents a share on sales of $18.25 billion.
Looking ahead, Amazon also came in a little light on their forecast for the current quarter after predicting revenues in a range of $12-$13.4 billion versus expectations for $13.4 billion.
Shares were whacked in after-hours trading last night after dropping $17 to $177, or down 9%. This morning, in pre-market action, shares are at $175, down $19.
As we head to press, Dow futures are up 81 points to 12,658 while the S&P 500 futures are higher by 8 points to 1,316. The Nasdaq futures are off by 11 points to 2,475.
We have a lot to cover this morning, including some chart work for one of our current trades so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: AAPL, AMZN, AMZN earnings
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off