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Wednesday, December 5th, 2012
12:20pm (EST)
Pandora (P, $7.83, down $1.62) is tumbling despite beating Wall Street’s estimates after the bell yesterday. The company reported a profit of 5 cents a share on revenue of $120 million that topped forecasts for a penny a share on sales of $117 million. The problem was with their current quarter as they are blaming Super Storm Sandy and other factors for lowering estimates.
The company expects a loss of 6 to 9 cents a share on revenue of $120-$123 million while the suit-and-ties were looking for a profit of 2 a share on $130 million in sales. We have traded Pandora a few times this year with good success but we missed a chance to play the downside.
We highlighted the stock in our Weekly Wrap Sunday night as a possible earnings trade and although we stood on the sidelines, the put options are zooming on the stock’s 17% plunge. The Pandora December 9 puts (P121222P00009000, $1.25, up $0.60) are up a whopping 90% while the January 10 puts (P130119P00009000, $1.50, up $0.55) are soaring nearly 60%.
Pandora continues to face stiff competition but their app is popular. The problem is they have to pay more for each song played than traditional outlets and that is weighing on margins.
Shares closed yesterday’s session just below their 100-day moving average (MA) after clearing the 50-day MA. This tight technical picture is clearly visible on the chart and we missed a golden opportunity to make a sweet triple-day gain in less than 24 hours.
We don’t like to chase breakouts or breakdowns but the current price action is pointing towards a possible dip to $5. The 52-week low is at $7.08. We will wait for shares to settle down and when the smoke clears we may look at other ways to play a further downside move, or a bounce back to resistance.
Elsewhere, Apple (AAPL, $554.84, down $21.01) is folding like a cheap lawn chair as shares are down another 4%. We talked about paper-thin support at $575 and that if it didn’t hold, shares could test $540. Today’s low has been $545.56 so they could be reaching a bottom.
It has been awhile since we have traded Apple options due to the rich premiums (and why they should do a 10-to-1 stock-split) but the December 600 calls (AAPL121222C00600000, $2.85, down $3.30) look tempting. They are down over 50% and have traded to a low of $2.42. If Apple announces a special dividend, and we believe they will, shares could easily rebound to push $600 and these options will do well.
One other side note, shares of Bank of America (BAC, $10.24, up $0.34) have hit double-digits and we have talked about the importance of this. The stock is a current recommendation for our Weekly Wrap and we have made solid gains all year long by trading the range. It’s too early to call today’s pop a breakout but we like the move.
As we head to press, the Dow is up 115 points to 13,066 while the S&P is higher by 6 points to 1,412 and back over 1,410. The Nasdaq is lower by 9 points to 2,985 and we talked about the 2,975-2,950 area this morning. Today’s low has been 2,958. A close above 2,975 (3,000 would be better) is crucial or the bulls face further risk down to 2,900.
We have some exciting news coming to you over the next 2 days that will cover our once a year special that includes a sweet discount on our Daily and Weekly Wrap newsletters as well as our option trading course, How to Trade Options on Momentum Stocks. We will also be offering you a chance to win a NEW iPad if you can guess where the Dow will be on the final day of trading on the December 31, 2012 close. More details to come so stay tuned in.
Subscribers, check the Members Area for the updates and we will be back in the morning with a full report.
Posted in Apple, Company Commentary, Earnings, Market Analysis | Comments Off
Tuesday, December 4th, 2012
9:00am (EST)
It was another day of flat action and Fiscal Cliff talk as the bulls and bears traded light blows for much of the session. The bulls made a slight run to greener pastures at the open but the initial pop faded like the sun as the bears fought back to get their second-straight Monday win.
The Dow dropped 60 points, or 0.5%, to close at 12,965. The blue-chips kissed a high of 13,087 before falling triple-digits from its peak to a low of 12,959. The index is still 1% away from giving us a bullish or bearish clue as we wait for 13,200 or 12,800 to trip.
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If you are not a subscriber but would like to read more please click here. We are one of the fastest growing stock options trading advisors on the internet and we are doing well for 2012. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 26-0. Together, we are 148-54 (73% win rate) for both newsletters and we doubt you will find a better options trading service.
Our list of 2012 winners include: +500% on TASR call options, +160 on GMCR call options, +475% on AXP,+462% on ARNA,+292% on COF, +171% on FSLR, +131% and +114% on 2 MGM trades, +200% on SGMS, +107% on AFL, +100% on STX, +82% on TSM and +125% on MSFT just to name a few.
Posted in Company Commentary, Economic News, Market Analysis, Politics | Comments Off
Sunday, December 2nd, 2012
11:30pm (EST)
1. Market Summary
2. Monster Beverage (MNST) is Still a Scary Investment
3. Allergan (AGN) in a Strong Uptrend
4. Earnings
5. Weekly Wrap Portfolio Update
6. Week Ahead
(To view the charts, please log into the Members Area and go to the Weekly Wrap Premium section.)
= = = = = = = = = = = = = = =
If you are not a subscriber but would like to read more please click here. We are one of the fastest growing stock options trading advisors on the internet and we are doing well for 2012. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 24-0. Together, we are 148-54 (73% win rate) for both newsletters and we doubt you will find a hotter options trading service.
Our list of winners for 2012 include:, +500% on TASR, +475% on AXP,+462% on ARNA,+292% on COF, +171% on FSLR, +131% and +114% on 2 MGM trades, +200% on SGMS, +107% on AFL, +100% on STX, +82% on TSM and +125% on MSFT just to name a few.
Our Weekly Wrap Covered Call Portfolio is now 26-0 for 2012. We were 16-0 in 2011. Some of our sweet returns include +55% on SZYM, +27% on CLNE, +38% on VVUS, +19% on MGM, 18% on DNDN, and 20% on DAR. Remember, if you can make 20% on just 5 trades, you will double your money.
Posted in Company Commentary, Weekly Wrap | Comments Off
Monday, November 19th, 2012
9:00am(EST)
“We said last week there was a good chance the mini trading range the market had been in was about to crack and all signs were favoring the bears. The move lower from the previous 5-week trading range served as serious resistance and the breakdown from the current trading range could lead to a possible correction if the zombies aren’t careful.
Of course, the big worry as soon as the Presidential Election ended was the Fiscal Cliff and the rhetoric that would come on Friday. The Republicans have made it clear they are against raising taxes on individuals and businesses making more than $250,000 because of the impact it will have on future economic growth. They argue 7 million jobs will be lost.
The Democrats want to raise taxes, implement ObamaCare which is already forcing companies to cut back on employee hours so they won’ t have to offer healthcare benefits, and increase taxes on capital gains and dividends.
Needless to say, this is going to get nasty and it won’t be solved anytime soon. If the zombies can’t come to agreement on nearly $600 billion in spending cuts and tax increases by yearend, the talk is the U.S. economy will go into another recession. Unemployment could surge above 9% by the end of next year, or 20% if you count the people who have given up working that the government doesn’t count.
We aren’t Vegas, but the odds of the zombies pushing the U.S. off the cliff are running at 5-to-1, or 20%, but could increase if Congress drags its feet. There are talks scheduled for this Friday at the White House (Monday or Tuesday was just way too soon we suppose) and Thanksgiving is next week. Given the lines in the sand that were drawn this past Friday, this leaves the earliest we see something getting done is December.
This leaves the bulls in a volatile situation which is only likely to pick up from here on out until these issues are resolved.
As the rest of the world watches our soap opera play out, headlines from across the pond could also come back into play. There were more riots in Greece last week after the country approved additional austerity measures to ensure an upcoming aid payment. The country continues to blow through cash and will try to raise 3 billion euros on Tuesday in an attempt to sell debt through bonds. Why any investor would buy these bonds or why Greece continues to get more money baffles us because they can’t ever pay it back.
Same deal with Spain. The country so far has refrained from asking for an “official” bailout that would trigger bond purchases from the European Central Bank but it could be coming. We aren’t sure how the markets will react to this news that could also hit this week but the ECB wants Spain to ask for a handout so that it will reduce the yields on their bonds.
The fight over money, taxes, and power between the zombies will weigh on the market over the near-term as earnings wind down and the holiday’s comes around. However, we did mention the week before Thanksgiving is usually bullish and the indexes are due for a bounce. It is also November options expiration week and it will only add to the volatility.
Over the past 18 years, the Dow has traded higher for the week in 15 of them. However, Monday’s have been bearish 7 out of the last 12 during November option expiration week with a nasty loss of nearly 3% in 2008. The index fell from 8,497 to 8,273 which would be roughly 350 Dow points at current levels.
Friday November expiration has seen the Dow rally 7 out of the last 9 years with 2008 showing jaw dropping gains. The blue-chips surged nearly 500 points, or 6.5%, after moving from 7,552 to 8,046. We mentioned on Friday some of the wild price swings the Dow endured in 2008 and while we don’t believe the index will see a 3% or 6% single-day drop, it could happen over the next few weeks if there is continued weakness and the finger-pointing becomes middle fingers between the Republicans and Democrats.
While we have penciled in a possible rebound, we still believe our 5% targets for all of the indexes will trigger and we often remind you that once there is a breakout or breakdown out of a trading range there are fluff targets.
From our 10/28/12 Weekly Wrap:
“There are a ton of fund managers that are underperforming the market and some of them have been caught on the wrong side of the recent volatility trying to make up for lost ground. At some point, there could be a bottom and strong rally but we have to be prepared for both cases. It was good to break out of the trading range to the downside but they too can sometimes get “stretched” at the top and at the bottom so we have to realize this as well.
So how low could the indexes go if the 200-day MA’s break and there is panic selling?
The Dow touched a low of 12,035 in early June and the mid-July low was 12,492. The June 4 low for the S&P 500 was 1,266 while the July low was 1,325. The Nasdaq lows were 2,726 and 2,837 in June/ July while the Russell 2000 kissed 729 and 765, respectively”. (END) (from11/11/2012 Weekly Wrap/ Monday Morning Outlook)…
The market started the week off in a tight range and ended flat for the session. It was the calm before the storm as the bears spent the next 2 days hammering the bulls. The major indexes easily tested our mid-October downside targets of Dow 12,600; S&P 1,350; Nasdaq 2,900; Russell (2000) 780 and as you can see from our aforementioned comments from above, our “fluff” targets.
The bears kept the pressure on into Thursday but lower levels of support came into play as there was a slight bounce off the July lows heading into Friday’s Fiscal Cliff talks. The zombies gave the bulls something to nibble on as they acknowledged a deal could be in the works but can the market trust them is the question.
***********************************
If you are not a subscriber but would like to read more please click here. We are one of the fastest growing stock options trading advisors on the internet and we are doing well for 2012. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 26-0. Together, we are 146-54 (73% win rate) for both newsletters and we doubt you will find a better options trading service.
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call option, what is option trading
Posted in Company Commentary, Economic News, Market Analysis, Market Commentary | Comments Off
Sunday, November 11th, 2012
11:30pm (EST)
1. Market Summary
2. LifeLock (LOCK) Announces Sweet Earnings
3. Earnings
4. Weekly Wrap Portfolio Update
5. Week Ahead
(To view the charts, please log into the Members Area and go to the Weekly Wrap Premium section. We are sorry for tonight’s delay but we wanted to cover everything before we went to press.)
= = = = = = = = = = = = = = =
If you are not a subscriber but would like to read more please click here. We are one of the fastest growing stock options trading advisors on the internet and we are doing well for 2012. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 26-0. Together, we are 144-50 (75% win rate) for both newsletters and we doubt you will find a hotter options trading service.
Our list of winners for 2012 include+475% on AXP,+462% on ARNA,+292% on COF, +171% on FSLR, +131% and +114% on 2 MGM trades, +200% on SGMS, +107% on AFL, +100% on STX, +82% on TSM and +125% on MSFT just to name a few.
Our Weekly Wrap Covered Call Portfolio is now 26-0 for 2012. We were 16-0 in 2011. Some of our sweet returns include +55% on SZYM, +27% on CLNE, +38% on VVUS, +19% on MGM, 18% on DNDN, and 20% on DAR. Remember, if you can make 20% on just 5 trades, you will double your money.
Tags: 200-day moving average, 50-day moving average, AAPL, call option activity, index options, LOCK, option buy signals, put option activity, VIX
Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off
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Pandora (P) Testing Fresh Lows
Wednesday, December 5th, 2012
12:20pm (EST)
Pandora (P, $7.83, down $1.62) is tumbling despite beating Wall Street’s estimates after the bell yesterday. The company reported a profit of 5 cents a share on revenue of $120 million that topped forecasts for a penny a share on sales of $117 million. The problem was with their current quarter as they are blaming Super Storm Sandy and other factors for lowering estimates.
The company expects a loss of 6 to 9 cents a share on revenue of $120-$123 million while the suit-and-ties were looking for a profit of 2 a share on $130 million in sales. We have traded Pandora a few times this year with good success but we missed a chance to play the downside.
We highlighted the stock in our Weekly Wrap Sunday night as a possible earnings trade and although we stood on the sidelines, the put options are zooming on the stock’s 17% plunge. The Pandora December 9 puts (P121222P00009000, $1.25, up $0.60) are up a whopping 90% while the January 10 puts (P130119P00009000, $1.50, up $0.55) are soaring nearly 60%.
Pandora continues to face stiff competition but their app is popular. The problem is they have to pay more for each song played than traditional outlets and that is weighing on margins.
Shares closed yesterday’s session just below their 100-day moving average (MA) after clearing the 50-day MA. This tight technical picture is clearly visible on the chart and we missed a golden opportunity to make a sweet triple-day gain in less than 24 hours.
We don’t like to chase breakouts or breakdowns but the current price action is pointing towards a possible dip to $5. The 52-week low is at $7.08. We will wait for shares to settle down and when the smoke clears we may look at other ways to play a further downside move, or a bounce back to resistance.
Elsewhere, Apple (AAPL, $554.84, down $21.01) is folding like a cheap lawn chair as shares are down another 4%. We talked about paper-thin support at $575 and that if it didn’t hold, shares could test $540. Today’s low has been $545.56 so they could be reaching a bottom.
It has been awhile since we have traded Apple options due to the rich premiums (and why they should do a 10-to-1 stock-split) but the December 600 calls (AAPL121222C00600000, $2.85, down $3.30) look tempting. They are down over 50% and have traded to a low of $2.42. If Apple announces a special dividend, and we believe they will, shares could easily rebound to push $600 and these options will do well.
One other side note, shares of Bank of America (BAC, $10.24, up $0.34) have hit double-digits and we have talked about the importance of this. The stock is a current recommendation for our Weekly Wrap and we have made solid gains all year long by trading the range. It’s too early to call today’s pop a breakout but we like the move.
As we head to press, the Dow is up 115 points to 13,066 while the S&P is higher by 6 points to 1,412 and back over 1,410. The Nasdaq is lower by 9 points to 2,985 and we talked about the 2,975-2,950 area this morning. Today’s low has been 2,958. A close above 2,975 (3,000 would be better) is crucial or the bulls face further risk down to 2,900.
We have some exciting news coming to you over the next 2 days that will cover our once a year special that includes a sweet discount on our Daily and Weekly Wrap newsletters as well as our option trading course, How to Trade Options on Momentum Stocks. We will also be offering you a chance to win a NEW iPad if you can guess where the Dow will be on the final day of trading on the December 31, 2012 close. More details to come so stay tuned in.
Subscribers, check the Members Area for the updates and we will be back in the morning with a full report.
Posted in Apple, Company Commentary, Earnings, Market Analysis | Comments Off