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Friday, March 30th, 2012
9:00am (EST)
The bulls made a nice comeback on Thursday after the bears pushed a 1% decline but it wasn’t enough as the most of the major indexes finished lower. Much of the action can be blamed on weaker-than-expected economic news which had been coming in above expectations over the past few weeks.
Initial Claims fell 5,000 to 359,000 versus expectations for a drop to 350,000. The previous week’s numbers were “revised” which accounted for the slight miss but still came in a 4-year lows. Elsewhere, fourth-quarter GDP increased 3.0%, which matched forecasts while Personal Consumption increased 2.1%, also in-line. The data was actually pretty good but Wall Street panicked when it heard the talking heads say we missed numbers. Futures worsened which lead to the opening losses.
The indexes reached their lows an hour into the session but gradually started to climb after lunch with buying really picking up in the last hour of trading.
The Dow gained 20 points, or 0.2%, to settle at 13,145. The blue-chips fell to a low of 13,032 before rebounding triple-digits, but more importantly, they were able to hold the 13,000 level. If the bulls can clear 13,200 today, the rally is still on.
The S&P 500 slipped 2 points, or 0.2%, to close at 1,403. The index touched a low of 1,391 but was able to reclaim the 1,400 level by the closing bell. The break below 1,397 was bearish though as it also represented last week’s low before yesterday. We are expecting to see a 25-point swing, either way, soon which means 1,425 or 1,375 sometime next week.
The Nasdaq dropped 10 points, or 0.3%, to finish at 3,095. Tech traded own to 3,069 but was able to hold 3,050. Last Friday, the index kissed 3,044 before bouncing. These levels will be important to watch if they start to fall today and will favor the bears going into next week while a close above 3,100-3,125 could extend the current rally into April.
Futures are showing a nice open as we head to press and look like this: Dow (+57), S&P 500 (+7), Nasdaq 100 (+11). Subscribers, check the Members Area for the updates.
Tags: Dow index support, Jobless Claims, Nasdaq, S&P resistance
Posted in Economic News, Market Analysis | Comments Off
Tuesday, March 27th, 2012
1:05pm (EST)
The market has remained in a tight range following Monday’s surge as mixed economic news has helped both the bulls and bears today. Headlines from across the pond have been relatively quiet but we are expecting news from Spain could be a pain later in the week.
As far as the numbers here at home, the Case/Shiller Home Price Index fell 0.8% while the Consumer Confidence report came in at 70.2, versus expectations for a reading of 70. The Richmond Fed Manufacturing Index came in with a print of 7, versus expectations for a reading of 18.
As far as stocks, Apollo Group (APOL, $39.78, down $3.42), a stock we love to hate on, is down 8% despite beating Wall Street’s estimates. The company reported a profit of $0.58 a share on revenue of $970 million versus expectations for a profit of $0.38 a share on revenue of $933 million. Overall degreed enrollment at the company’s University of Phoenix “campus” fell 12% while new enrollments were up 1%. However, Apollo Group said new enrollments could fall double-digits percentage wise for the current quarter.
Shares rallied to $58 earlier this year and at the end of February they fell from $51 to $43. We have talked about the company’s shady enrollment practices in the past but shares seem to trade to the beat of a different drum. Perhaps Wall Street is finally seeing the light as a couple of analysts have downgraded the stock today.
Although we were on the sidelines, we wished we would have placed the April 40 puts (APOL120421P00042000, $2.55, up $0.70) on our Watch List. The options are up 70% and could move further on a continued slide in Apollo Group’s stock.
No worries. We still have some nice pin going for our current trades.
As we head to press, the Dow is up 2 points to 13,240 while the S&P 500 is higher by a point to 1,417. The Nasdaq is showing a gain of 6 points to 3,129. We have profits to take on one of our current trades as we are closing HALF positions. The options are up 30% in just one day and the trade could be getting crowded. Subscribers, check the Members Area for the updates.
Tags: APOL, Apollo Group, put option trading
Posted in Earnings, Economic News, Hot Stocks | Comments Off
Monday, March 26th, 2012
1:10pm (EST)
Futures were slightly up when the European markets opened and got progressively better following good news out of Germany as its Sentiment Index unexpectedly rose. Meanwhile, positive comments from Fed Chairman Ben Bernanke gave futures another lift higher which led to a strong open.
Bernanke hinted at another round of quantitative easing saying that “accommodative” monetary policy will be needed to make further progress in bringing down the unemployment rate. While he did say the improvements were a nice surprise, in the same breathe he also said they may not be sustainable without more action. This could be Bernanke’s last year as Fed Chairman, something that has been known, and this could be his “all-in” call.
On the flip side, the National Association of Realtors reported Pending Home Sales fell 0.5% in February after rising 2% in January. Specifically, sales declined in three of the four regions, with the Midwest seeing the only increase. This follows last week’s disappointing housing numbers for February and brings into questions just how strong the “recovery” is.
Despite the mixed headlines, the bulls have been able to push resistance but will it be enough to hold into the close?
The Dow is up 115 points to 13,196 while the S&P 500 is higher by 12 points to 1,409. The Nasdaq is showing a 36 point pop and is at 3,104. We have opened positions in a new trade today and we have raised some stops on our current call option trades that continue to perform well. Subscribers, check the Members Area for the updates.
Tags: Bernanke comments, support and resistance levels
Posted in Economic News, Market Analysis | Comments Off
Monday, March 26th, 2012
9:00am (EST)
The bulls got off to a good start last week following Monday’s advance which was led by Tech, the Financial stocks and, believe it or not, the small-caps. After a quick test to support, the bulls recovered early and ended the day with a win as the Russell 2000 led the way higher.
Perhaps the early test to support was an omen because the bears were out in force on Tuesday. Fresh worries over China’s pending “slowdown” pushed the market lower by 1% before the indexes reclaimed over half their losses. Although there was some dip buying, the first layers of support were scratched as the bears seemed to be waking up from a nap.
Wednesday’s action was like watching paint dry as the indexes traded in a tight range before ending the session mixed. The Nasdaq was the only index that finished higher as Wall Street seemed hesitant to place bets ahead of Thursday’s economic news.
Futures were weak Wednesday night and when we woke up for Thursday’s action we knew it was going to be an uphill battle for the bulls. China was back in the news, along with France and Germany, which reported weak manufacturing data ahead of the bell. Economic news here at home came in better-than-expected as jobless claims continue to move south and are at 4-year lows. The good news wasn’t enough to offset the bad as the indexes ended the session down 0.5%, on average.
The bears had a nice lead going into Friday and were working on the second layer of support an hour into the trading session before the bulls started buying at the lows. The buying lasted into the afternoon but it wasn’t enough as the bears won the week.
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If you are not a subscriber but would like to read more please click here. Our Track Record for 2012 is 55-11 (85% win rate). We do not count quarter and half or third winning trades like the few options services who say they have a real track record do which fluffs their results. We closed our 3 more triple digits winners last week (+292%, +195%, and +110%) and we have a number of current trades that continue to perform well. We have autotrading partners with real brokers who verify our results. If you are missing the action, then you are on the outside. Where you need to be is on the inside. Inside our Members Area!
Tags: China worries, economic news, Tech stocks
Posted in Economic News, Market Analysis, Market Commentary | Comments Off
Tuesday, March 13th, 2012
1:00pm (EST)
The market is showing strong gains today ahead of the 2pm FOMC Rate Decision as Retail Sales rose 1.1% last month. It was the biggest jump in nearly 5 years which shows the consumer is still spending despite rising gas prices which are part of total retail sales. Consumers also bought more clothes, appliances, and cars as big-box stores had the biggest gains in more than a year.
The Dow is up 108 points to 13,068 while the S&P 500 is higher by 12 points to 1,383. The Nasdaq is showing a 29 point pop and is at 3,013. We told you this week would be bullish so let’s go check our trades.
Subscribers, hit the Members Area for the updates and we will be back in the morning with a full report on the Fed’s action.
Tags: Retail Sales
Posted in Economic News | Comments Off
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Bernanke Surprises Wall Street
Monday, March 26th, 2012
1:10pm (EST)
Futures were slightly up when the European markets opened and got progressively better following good news out of Germany as its Sentiment Index unexpectedly rose. Meanwhile, positive comments from Fed Chairman Ben Bernanke gave futures another lift higher which led to a strong open.
Bernanke hinted at another round of quantitative easing saying that “accommodative” monetary policy will be needed to make further progress in bringing down the unemployment rate. While he did say the improvements were a nice surprise, in the same breathe he also said they may not be sustainable without more action. This could be Bernanke’s last year as Fed Chairman, something that has been known, and this could be his “all-in” call.
On the flip side, the National Association of Realtors reported Pending Home Sales fell 0.5% in February after rising 2% in January. Specifically, sales declined in three of the four regions, with the Midwest seeing the only increase. This follows last week’s disappointing housing numbers for February and brings into questions just how strong the “recovery” is.
Despite the mixed headlines, the bulls have been able to push resistance but will it be enough to hold into the close?
The Dow is up 115 points to 13,196 while the S&P 500 is higher by 12 points to 1,409. The Nasdaq is showing a 36 point pop and is at 3,104. We have opened positions in a new trade today and we have raised some stops on our current call option trades that continue to perform well. Subscribers, check the Members Area for the updates.
Tags: Bernanke comments, support and resistance levels
Posted in Economic News, Market Analysis | Comments Off