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11:50am (EST)
The bulls are looking for their third-straight win today, a feat that hasn’t been accomplished since late April on the Dow, while the bears hope anything Ben Bernanke says won’t matter.
We have tried to ignore the tapering talk, whom the next Fed Head will be, or how much money is being pumped in the market or printed around the world. All we care about is market direction and making money and we are skilled at doing it in any kind of environment. If the market sells off, who cares? We will start loading up on put options.
While we do expect volatility later this afternoon, we wouldn’t be surprised to see a continued tight trading range or an explosion to the upside and a test to new highs. We have done well playing the current trading range and our portfolio will be light by the end of the week as we continue to lock-in profits. We have said we will be in PERFECT position to play the market’s next major move, or a continued range.
Our upside targets for a test to new highs were triggered yesterday but nothing is a given and we have listed downside targets to go short as well. The rest will be up to Ben Bernanke and while he may be emotional, we won’t be because we plan on profiting either way.
We have some last minute updates on our current trades and we could be busy this afternoon with New Trades or Profit Alerts. Watch Tech and the Banking stocks along with the small-caps. Stocks in these sectors or index could lead the way higher or lower.
As we head to press, the Dow is down 15 points to 15,303 while the S&P 500 is off by 2 points to 1,650. The Nasdaq is down 3 points to 3,479. The indexes are holding our price targets for a bullish run higher so let’s see how it plays out.
Subscribers, stay locked-and-loaded and on your toes. We could be setting up for some nice pin action this afternoon once the fireworks begin.
Bears Looking for Hat Trick/ Profit Alert (CAT)!!!
Thursday, June 6th, 2013
11:55am (EST)
The bears are going for their third-straight session win and are a half away from recording their first hat trick of the year. However, the bulls haven’t had a 3-game skid all year and they are up.
Futures were showing a slightly higher open this morning when we went to press so we were looking for a test to support that served as prior resistance before another possible pullback to lower lows. We also said this morning the 50-day Moving Averages (MA’s) could hold so our best guess is that we end today’s session flat ahead of tomorrow’s Nonfarm Payroll report.
RealD (RLD, $14.61, up $0.16) will be reporting earnings after the close and we believe shares could make a huge move in after-hours. The company has missed Wall Street’s expectations in 2 of the last 4 quarters and this quarter could make or break shares going forward.
The suit-and-ties are expecting a loss of 19 cents a share on revenue of $43 million for the quarter. If the company can match expectations AND offer a sunny outlook for the summer box-office, shares could push the current 52-week high of $15.76 that was set back in May. If RealD misses estimates and lowers their full-year outlook, the stock could test $13 in a hurry.
The options trade in $2.50 strikes and why we will likely shy away from an earnings trade today.
We are watching the June 15 calls (RLD130622C00015000, $0.80, up $0.35) and the June 15 puts (RLD130622P00015000, $1.05, flat) as possible plays and the June 12.50 puts (RLD130622P00012500, $0.30, up $0.05) look tempting. The problem we have with these options are that they are thinly traded and the bid/ask is wide.
A 10% move would put the stock at $16 or $13 and with the options trading in 2.50 strikes it would be a hard trade for us to take. These options also expire in 2 weeks and if shares stay flat the premiums in these options will get crushed. Perhaps the best bet is to go long or short the stock ahead of earnings or sell the options but either way we do not like the risk/ reward with RealD although we think shares move lower from here.
These options are also thinly traded and another reason that will keep us on the sidelines.
We will update RealD’s numbers on Friday and we mentioned the next few weeks would be slim pickings for earnings trades. No worries. We are gearing up for July and we will have a new video for our trading course members in a couple of weeks to teach you how to find them.
Blackberry (BBRY, $13.75, up $0.12) is perhaps one of June’s “bigger” names” that is scheduled to report earnings and there should be better options for us to play with as they trade in 50 cent increments.
As far as the market, the bulls have a slight lead as we make the turn. The Dow is up 2 points to 14,962 while the S&P is higher by 3 points to 1,612. The Nasdaq is oadvancing 3 points as well to 3,405.
We are going to ring the register on another profitable trade as we are locking-in gains on a 83% return. Tomorrow could be a big day for the market in determining the next trend and we want to reduce our exposure as much as we can while we wind down the rest of our open trades.
The great news is our portfolio will be light and we will be able to play the next breakout or a continued breakdown with a bevy of new trades starting tomorrow or on Monday.
In the meantime, let’s take some more profits.
Subscribers, check the Members Area for the updates.
Posted in Earnings, Economic News, Market Analysis, Market Commentary | Comments Off