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Monday, May 13th, 2013
12:35pm (EST)
Futures were pointing towards a lower start throughout the night and into the opening bell this morning following Friday’s push to new all-time highs. Economic news was light last week but will be heavy this week with a few of them being potential market movers.
Today’s Retail Sales have helped the bulls keep the losses in check as they came in better-than-expected. April’s numbers came in at 0.1% versus estimates for a decline of -0.3%. Wednesday’s Empire Manufacturing Survey and Thursday’s Philly Fed reports will be the main focus along with the weekly jobless claims numbers. There are a few notable earnings announcements that we will cover later in the week but with 90% of the S&P 500 companies already confessing, we are starting to look ahead to 2Q earnings that will start in July. Of course, we will still keep our eyes open for possible option trades on the few 1Q earnings that remain for the rest of May and the first few weeks of June.
We encourage those of you who haven’t taken a look at the weekend charts to make sure you do by logging into the Members Area. We spend hours upon hours doing the homework to give us a good roadmap each week on where the market has been and where it could be going.
We made a lot of bullish cases for the market and a continued rally but there is still headline risk. We doubt the indexes will hit our frothy yearend targets we set in February without a 5%-10% pullback but they could due to the momentum. If so, there is a chance even we underestimated the incredible bullish run we knew was coming.
We won’t put the horse in front of the cart and this will be an important week as far as market direction. If the economic news continues to show a “recovery” and the Philly Fed shows an increase in activity, the indexes could continue setting new highs. Any disappointment could lead to a back test for the market but we talked about those clues as well and what to look for.
We are still in a sweet spot for the market and we are excited about our current batch of trades. In fact, we have some nice pin action today on a few of them. One of our current trades is up over 160% and continues to look strong as new rope.
As we head to press, the bulls have turned the table as the a few of the indexes are pushing higher. The Dow is down 17 points to 15,102 while the S&P 500 is higher by 2 points to 1,635. The Nasdaq is higher by 8 points to 3,444.
Subscribers, check the Members Area for our current thoughts and once again, stay on your toes for the remainder of the session in case we have Profit Alets and/ or New Trades.
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, May 8th, 2013
12:05pm (EST)
The bulls are taking a slight breather today as we head into the second half of trading but the action is favorable following a brief dip at the open. Economic news has been light here at home but tomorrow’s weekly unemployment report could cause some volatility. Of course, Continuing Claims need to come in lower than consensus to avoid any “shock” following last week’s “good” Nonfarm Payrolls numbers.
We mentioned earnings would take center stage this week and there have been some good and bad reports.
Whole Foods (WFM, $103.25, up $10.45) shares are getting a pop after the company beat Wall Street’s estimates on the top and bottom line. The company reported a profit of $0.73 a share on revenue of $3 billion. They also announced a 2-for-1 stock split that will get shares back in the double-digits after breaking triple-digits today.
The Whole Foods May 100 calls (WFM130518C00100000, $3.60, up $3.00) are up 500% after closing on Tuesday at 60 cents. They opened this morning at $2 and have traded to a high of $3.80.
Even better, the May 100 WEEKLY calls (WFM130510C00100000, $3.63, up $3.46) are up a sizzling 2,035% after closing at 17 cents yesterday. As you can see from the snapshot below, these options have been pretty liquid today after opening at $1.64.
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Posted in Earnings, Hot Stocks | Comments Off
Tuesday, May 7th, 2013
1:50pm (EST)
The bulls are going for their 17th-straight Tuesday win and got off to a decent start this morning as economic news from overseas came in better-than-expected. Here at home, Consumer Credit will be released an hour before the closing bell and is usually ignored by the market. The numbers can be volatile and like most economic reports can be subject to revisions. This may or may not have an impact on the indexes but if they are near round numbers into the close, it could.
We aren’t big fans of the rates cable companies charge consumers as the price to watch 800 channels can cost you north of $200 a month. Of course, the basic packages just to watch TV have gotten ridiculous as well so its no wonder the providers of content are at record highs.
DirectTV (DTV, $61.87, up $3.91) beat Wall Street’s estimates by 33 cents after reporting in-line revenue and a growth in subscribers. The company’s Latin American market is sizzling as revenue from this region was up over 16% and is comprised of nearly 11 million subscribers.
We looked at some call options yesterday but we already have a few open trades that will be in play this week and we took another trade on a stock we follow more closely. In any event, we missed a great opportunity for a massive return as the DirectTV May 60 calls (DTV130518C00060000, $2.20, up $1.75) have zoomed 420% today after closing at 42 cents on Monday.
There could be further upside to these call options as shares are in blue-sky territory but we would be cashing out now to take advantage of the stock’s 7% pop. We continue to remind our subscribers that a 5% stock move can mean a 100% return with the right options and what makes option trading so lucrative and fun.
We are hoping for a few fireworks of our own this week as we have a couple of trades that could be dramatically affected by earnings. This is also becoming a stock picker’s market and is another reason why we are so giddy on the trading environment for the rest of the month (and year).
As far as the market, currently, the Dow is up 75 points to 15,044 while the S&P 500 is higher by 8 points to 1,625. The Nasdaq is up 2 points to 3,395 and the Russell 2000 is advancing 4 points to 964.
We have a NEW TRADE we are getting into on a stock that is at 52-week highs and is set to soar past $70. If so, the call options we are recommending should easily double. Subscribers, check the Members Area for the updates.
Posted in Earnings, Hot Stocks | Comments Off
Monday, May 6th, 2013
1:00pm (EST
The bears made a little noise at the open as the major indexes took a little dip to start today’s session but as we head into the second half of trading, the bulls are bouncing back. Friday’s big move past resistance caught a ton, and we mean a boatload, of investors and Wall Street pros off guard and we expect to see a little chasing over the next few weeks as long as support holds that served as prior resistance.
Although earnings are slowing down, there are a numbers of high-profile companies that are due to report, starting with First Solar (FSLR, $$47, up $1) after the bell today. The company is expected to earn 75 cents a share on revenue of $725 million. In the year ago quarter, the company lost 8 cents a share but they have beaten estimates the last 3 quarters by a wide margin. Today’s numbers will tell if this is truly a turnaround for the company.
We profiled some call options on the Watch List this morning but the premiums are a little juicy for us to play First Solar today. However, if the company beats on both the top and bottom line, shares could zoom past $50 and push $60 on short covering. If they disappoint, shares could test $40 or worse.
While we will likely sit on the sidelines with First Solar, there are a few trades we are looking at and one we are about to take but let’s cover the indexes real quick.
The Dow has now turned positive and is higher by a 6-pack to 14,980 while the S&P 500 is up 4 points to 1,618. The Nasdaq is advancing 14 points to 3,392.
We do have one trade we like and we have a number of other trades in play that we want to talk about so let’s get busy. One of our current trades closed today for a 79% profit after the Hard Stop on the other half was triggered.
Subscribers, check the Members Area for the New Trade and current updates!
Posted in Earnings | Comments Off
Tuesday, April 30th, 2013
12:30pm (EST)
We mentioned coming into the week Apple (AAPL, $438.69, up $8.57) and a few other Tech names needed to show some strength and after a brief dip below $400, shares have surged 10% since last Wednesday.
It is always hard to call a bottom (or top) in a stock or the market in general but the chart work we did for Apple over the weekend was showing a good risk/ reward opportunity coming into the week. However, we all know Apple is an expensive stock and 100 shares would have cost about $42,000 on Monday’s open.
The options are also expensive making it hard to play directional moves in Apple as the near-term in-the-money options are also expensive to trade. However, we have talked about the “mini” options that are now available to trade on Apple and we have been following them since Monday’s open.
We will do a feature article on the setup in the Weekly Wrap for a covered call trade using mini options and we will also talk about using these types of options to play the up and down moves in the stock. The Apple mini call options we will profile DOUBLED yesterday and are zooming again today. The covered call trade is on track to make 5% in 3 weeks if Apple is over $440 by mid-May. Again, this wasn’t an official trade because we have never traded mini options so we wanted to make sure the liquidity was there and that they made sense trading.
There are only 5 stocks you can trade mini options on but there is a good chance another 5 or 10 stocks get added over the next few months as these options gain in popularity. Instead of the options being based on 100 shares of stock, the mini options are based on 10 shares of stock and trade on stocks in the triple-digits.
As far as the market, the bears made some noise at the open but the Dow got a lift after IBM (IBM, $200.51) announced a dividend hike. Shares have cleared the $200 level following the company’s earnings miss and drop under $190 a few weeks ago . A close above the $200 mark would be bullish for the blue-chips.
Currently, the Dow is down 5 points to 14,813 while the S&P 500 is flat at 1.593. The Nasdaq is showing some green and is up 9 points to 3,316.
We have a lot more to cover with our current trades so let’s get on it. Subscribers, hit the Members Area for the updates and we will be back in the morning with a full report.
Posted in Apple, Earnings | Comments Off
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Bears Getting Restless
Monday, May 13th, 2013
12:35pm (EST)
Futures were pointing towards a lower start throughout the night and into the opening bell this morning following Friday’s push to new all-time highs. Economic news was light last week but will be heavy this week with a few of them being potential market movers.
Today’s Retail Sales have helped the bulls keep the losses in check as they came in better-than-expected. April’s numbers came in at 0.1% versus estimates for a decline of -0.3%. Wednesday’s Empire Manufacturing Survey and Thursday’s Philly Fed reports will be the main focus along with the weekly jobless claims numbers. There are a few notable earnings announcements that we will cover later in the week but with 90% of the S&P 500 companies already confessing, we are starting to look ahead to 2Q earnings that will start in July. Of course, we will still keep our eyes open for possible option trades on the few 1Q earnings that remain for the rest of May and the first few weeks of June.
We encourage those of you who haven’t taken a look at the weekend charts to make sure you do by logging into the Members Area. We spend hours upon hours doing the homework to give us a good roadmap each week on where the market has been and where it could be going.
We made a lot of bullish cases for the market and a continued rally but there is still headline risk. We doubt the indexes will hit our frothy yearend targets we set in February without a 5%-10% pullback but they could due to the momentum. If so, there is a chance even we underestimated the incredible bullish run we knew was coming.
We won’t put the horse in front of the cart and this will be an important week as far as market direction. If the economic news continues to show a “recovery” and the Philly Fed shows an increase in activity, the indexes could continue setting new highs. Any disappointment could lead to a back test for the market but we talked about those clues as well and what to look for.
We are still in a sweet spot for the market and we are excited about our current batch of trades. In fact, we have some nice pin action today on a few of them. One of our current trades is up over 160% and continues to look strong as new rope.
As we head to press, the bulls have turned the table as the a few of the indexes are pushing higher. The Dow is down 17 points to 15,102 while the S&P 500 is higher by 2 points to 1,635. The Nasdaq is higher by 8 points to 3,444.
Subscribers, check the Members Area for our current thoughts and once again, stay on your toes for the remainder of the session in case we have Profit Alets and/ or New Trades.
Posted in Earnings, Market Analysis, Market Commentary | Comments Off