|
|
|
|
|
 |
|
|
 |
Wednesday, April 18th, 2012
1:00pm (EST)
IBM (IBM, $201.63, down $5.82) and Intel (INTC, $27.91, down $0.56) are weighing on the market after reporting earnings after the close on Tuesday. IBM beat estimates but missed on revenues while Intel is trading lower after reporting lower gross margins for the quarter.
The Dow is currently down 60 points to 13,055 as IBM has accounted for 43 negative Dow points while Intel was worth a 4 point hit on the index.
The S&P 500 is lower by 5 points to 1,386 while the Nasdaq is off 12 points to 3,030.
The market rallied on Spain’s successful bond auction yesterday but the real test will come on Thursday when they try to sell 2 and 10-year bonds. Earnings will be heavy after the bell and on Thursday with Bank of America (BAC, $8.95, up $0.03), eBay (EBAY, $35.99, down $0.09) and Qualcomm (QCOM, $66.79, down $0.44) set to report over the next 24 hours.
Subscribers, check the Members Area for the trade updates and we will back in the morning with a full briefing.
Tags: BAC earnings, IBM, INTC, Intel earnings
Posted in Earnings, Market Analysis | Comments Off
Tuesday, April 17th, 2012
1:00pm (EST)
The market got a huge pop at the open as the Dow tripped 13,000 on better-than-expected earnings from a couple of blue-chippers and the rally has strengthed as we head into the second half of trading.
As far as economic news, Housing Starts were a little disappointing as they fell 5.8% versus expectations for a 1% rise but Building Permits rose 4.5% to 747,000. Wall Street had forecast a drop to 710,000, or 0.7%.
Goldman Sachs (GS, $118.34, up $1.00) is trading higher after beating expectations and pumping up the dividend. The company reported a profit of $2.1 billion, or $3.92 a share. The suit-and-ties were looking for $3.55 a share.
Golden Slacks has gotten a bloody nose from all the recent negative publicity but the firm continues to battle. A rising tide often lifts all boats and in this case the Financial stocks are following Goldman’s lead. Also enjoying sweet pops are JPMorgan (JPM, $43.85, up $0.52), Citigroup (C, $35.28, up $1.28) and Bank of America (BAC, $9.87, up $0.18).
Speaking of BAC, we are on track to close out 3 more winners for our Weekly Wrap and our current covered call on BAC is set to return us 26%. We started taking positions in Bank of America when shares were at 5 bucks back in December and our first BAC returned 20% earlier this year. If you haven’t discovered the magic of writing covered calls on solid stocks with the potential of making monthly double-digit gains than we urge you to get interested. Remember, it only takes 5 winning trades of 20% to make a 100% or double your money.
We have a lot to cover inside our Members Area as we have a freshly minted Watch List that is loaded with some potential gems for our next batch of trades. We also have action to take on one of our trades which will make our 70th winning trade for 2012. Wow.
As we head to press, the Dow is up 200 points to 13,121 while the S&P 500 is higher by 21 points to 1,390. The Nasdaq is up double-nickels to 3,043. Subscribers, you know what to do but stay lock-and-loaded on a possible NEW TRADES if we see something we like before the close as we have updated our Watch List.
Tags: covered call trading, Golden slacks slang name, GS, Weekly Wrap
Posted in Earnings, Financial Stocks, Market Analysis, Option Trades | Comments Off
Friday, April 13th, 2012
1:50pm (EST)
We remember watching an interview a few years ago with Google founders Larry Page and Sergey Brin who went on record and said they would never split the company’s stock. They mentioned how Warren Buffett has never split Berkshire Hathaway’s (BRK.A, $119,276, down $897) stock and most Wall Street analysts will tell you stock-splits don’t really do anything but create more outstanding shares.
We guess the two heavyweights had a change of mind.
Although it’s not an “official” stock-split, Google did announce a stock “dividend” which it is calling a 2-for-1 stock-split after topping Wall Street’s estimates. The company reported a profit of $10.08 a share versus estimates for $9.65 a share. Revenue did miss by a smidge though, as the company came in at $8.14 billion versus calls for $8.15 billion.
The split is designed to preserve the control of the company by its two co-founders and its corporate structure. The newly created non-voting stock will trade on the Nasdaq but no immediate time table was given.
If this is the case, they could do two classes of Google stock as GOOG.A and GOOG.B. The “Baby Berk’s” are Berkshire Hathaway’s Class B shares (BRK.B, $79.39, down $0.67) so we would imagine Google will likely have the same deal and we will officially dub them the Baby Goog’s.
We have one share of the Baby Berk’s on our office wall as a tribute to Mr. Buffett and we may add a Google “B” share whenever they come out. Believe it or not, you can still get a stock certificate for many of the well-known companies and we like to collect one or two every year. The artwork for some of America’s companies on a stock certificate is our way of collecting “art”. (Go to OneShare.com to get a complete list.)
With the adaption of eBooks and an all digital world, there will come a day when the “stock certificate” will disappear so we thought we would collect some history before they too become extinct.
As far as the market, the bears have taken control of the session and will likely when the week.
The Dow is down 68 points to 12,918 while the S&P is off by 11 points to 1,376. The Nasdaq is lower by 34 points to 3,021.
We have a lot to cover in our Members Area as we are closing another winning trade which will make our 7th of the week and we are lowering our Hard Stop on another position that is profitable. Subscribers, please pay careful attention to the trade instructions.
We will be back Sunday night with our Weekly Wrap and the chart work for each of our open positions. Until then, have a great weekend, everyone!
Tags: Berkshire Hataway stock, BRK-A, class a stock, GOOG stock split, Google earnings, Google stock split
Posted in Earnings, Google, Market Analysis, Market Commentary | Comments Off
Friday, April 13th, 2012
9:00am (EST)
The bulls made it back-to-back wins on Thursday after another strong outing pushed the major indexes back near prior support. The bears are still up for the week but not by much as they are looking to get their second straight weekly win. It’s Friday the 13th so anything could happen today.
On Thursday, the Dow gained 181 points, or 1.4%, to finish at 12,986. The blue-chips went out on their highs but failed to trigger 13,000. If they can today, the next level of resistance comes in at 13,200. The bears will try to push 12,800 again before the weekend.
The S&P 500 jumped 19 points, or 1.4%, to settle at 1,387. The index reached a peak of 1,388 but fell short of reclaiming the 1,400 level. The close above 1,375 was bullish but the bears have their eyes on 1,350 so watch this level closely today. A close below 1,375 would be bearish for next week.
The Nasdaq soared nearly 40 points, or 1.3%, to end at 3,055. Tech was able to close above 3,050 which was slightly bullish and will need to hold this level today to keep the momentum going.
The Russell 2000 added another 12-pack, or 1.5%, to close at 808. The small-caps made a push to 810 and the close above 800 was convincing. If this level holds today, the bulls will be pushing for 830 again next week while a close below this level will get 780-750 back into the picture.
Futures are pointing towards a lower open despite JPMorgan Chase (JPM, $44.84, up $0.83) and Wells Fargo (WFC, $34.02, up $0.40) posting better-than-expected numbers. Both companies beat Wall Street estimates but are trading lower in pre-market action.
Dow futures are down 58 points to 12,892 while the S&P futures are showing a decline of 6 points to 1,379. The Nasdaq futures are off 10 points and are at 2,729.
Subscribers, check the Members Area for the updates.
Tags: JPM earnings, JPMorgan Chase earnings, Wells Fargo earnings estimates., wfc
Posted in Earnings, Market Analysis, Trade Update | Comments Off
Thursday, April 12th, 2012
12:40pm (EST)
Futures were pointing towards a strong open this morning but took a hit after an unexpected spike in jobless claims and a mixed PPI (Producer Price Index) report.
Initial Claims came in at 380,000, up 13,000, versus expectations for 355,000, while Continuing Claims came in at 3.25 million versus a forecast for 3.33 million. Producer prices for the month of March were flat versus calls for an increase of 0.3%. The core reading was up 0.3% versus the expected increase of 0.2%.
In earnings news, Google (GOOG, $644.52, up $8.56) will report their quarterly numbers after the close and their results will likely have a huge impact on where Tech and the Nasdaq go from here. In January, shares fell from $639 to $585 after the company disappointed Wall Street with their results but in October 2011, shares rallied from $558 to $591, after Google announced better-than-expected earnings.
In July of 2011, shares of Google moved from $529 to $597 and in April of last year, shares fell from $578 to $530. Given the last 4 quarterly results, there is no reason to not believe shares won’t move another $50+ in after-hours trading tonight and on Thursday.
The near-term out-of-the-money “normal” options are expensive to trade on Google but there are WEEKLY options for those who want some action.
The April 700 calls (GOOG120413C00700000, $2.10, up $0.70) could be used to play a run to $700 while the April 600 puts (GOOG120413P00590000, $3.75, down $2.65) could be used for a possible break below $600. As you can see, these options are still pretty expensive and they expire THIS Friday.
If we used both options together as a “strangle option trade”, the total cost would be $5.85 which means we would need Google to be at $705 or better for us to be profitable if shares rise on an earnings beat. We would need the stock to test $595 or worse if there is a miss or lowered guidance. While we like the setup, we don’t like the risk/ reward because a 10 contract trade on each side would cost nearly $6,000. One contracts\ of each would cost $585.
We normally like to trade 10 or 20 contracts for all of our positions and sometimes we will trade 30 or 40 depending on price. However, we never like to leverage more than $1,000-$2,000 on any one position so this is what we mean when we say the options or premiums are expensive.
We are going to watch from the sidelines as Google takes the field after the close. While we do think a 7%-8% move is possible, anything less would crush the premiums if shares stayed in between $600-$700.
As far as the market, the Dow is up 147 points to 12,952 while the S&P 500 is higher by 15 points to 1,383. The Nasdaq is showing a 35 point pop and is at 3,051.
We opened 3 new trades today to go along with our current option plays so let’s go see where we are at. Subscribers, check the Members Area for the latest updates.
Tags: goog earnings, Google call options, Google strangle trade, Google Weekly options, strangle option trade
Posted in Earnings, Google, Market Analysis | Comments Off
|
|
|  | | | |
Get RSS Feed
Google (GOOG) Beats Estimates, Announces Stock-Split
Friday, April 13th, 2012
1:50pm (EST)
We remember watching an interview a few years ago with Google founders Larry Page and Sergey Brin who went on record and said they would never split the company’s stock. They mentioned how Warren Buffett has never split Berkshire Hathaway’s (BRK.A, $119,276, down $897) stock and most Wall Street analysts will tell you stock-splits don’t really do anything but create more outstanding shares.
We guess the two heavyweights had a change of mind.
Although it’s not an “official” stock-split, Google did announce a stock “dividend” which it is calling a 2-for-1 stock-split after topping Wall Street’s estimates. The company reported a profit of $10.08 a share versus estimates for $9.65 a share. Revenue did miss by a smidge though, as the company came in at $8.14 billion versus calls for $8.15 billion.
The split is designed to preserve the control of the company by its two co-founders and its corporate structure. The newly created non-voting stock will trade on the Nasdaq but no immediate time table was given.
If this is the case, they could do two classes of Google stock as GOOG.A and GOOG.B. The “Baby Berk’s” are Berkshire Hathaway’s Class B shares (BRK.B, $79.39, down $0.67) so we would imagine Google will likely have the same deal and we will officially dub them the Baby Goog’s.
We have one share of the Baby Berk’s on our office wall as a tribute to Mr. Buffett and we may add a Google “B” share whenever they come out. Believe it or not, you can still get a stock certificate for many of the well-known companies and we like to collect one or two every year. The artwork for some of America’s companies on a stock certificate is our way of collecting “art”. (Go to OneShare.com to get a complete list.)
With the adaption of eBooks and an all digital world, there will come a day when the “stock certificate” will disappear so we thought we would collect some history before they too become extinct.
As far as the market, the bears have taken control of the session and will likely when the week.
The Dow is down 68 points to 12,918 while the S&P is off by 11 points to 1,376. The Nasdaq is lower by 34 points to 3,021.
We have a lot to cover in our Members Area as we are closing another winning trade which will make our 7th of the week and we are lowering our Hard Stop on another position that is profitable. Subscribers, please pay careful attention to the trade instructions.
We will be back Sunday night with our Weekly Wrap and the chart work for each of our open positions. Until then, have a great weekend, everyone!
Tags: Berkshire Hataway stock, BRK-A, class a stock, GOOG stock split, Google earnings, Google stock split
Posted in Earnings, Google, Market Analysis, Market Commentary | Comments Off