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1:00pm (EST)
We have had a busy day and the bulls are pushing Dow 10,000 as we head towards Friday’s all important Jobs Report. We touched base on what this means for the market and there are only three things that can happen. We either go up, down, or the tug-of-war continues between the bulls and bears. If there is little movement after we get the Jobs Report then longer-term it bodes well for the bulls.
In any event, we are preparing for the news by scaling back and closing positions before the report is out. We just don’t see the need to take on the extra risk when we already have profitable positions. Here are the profitable trades were are telling our subscribers to take profits in: Imax (IMAX, $10.82, up $0.26) call options for 31%, Barrick Gold (ABX, $40.20, down $0.08) call options for 38%, and an Apollo Group (APOL, $56.57, down $0.22) put option trade for 50%. Given the current market environment, I’d say we have performed pretty well.
Yes, we could push the envelope and leave these trades open for possible further gains but we are following our trading plan. We have a number of trades we are looking at as soon as the opening bell rings on Friday. It all depends on what the Jobs Report says and how traders are acting.
A couple of stocks we are watching…
We are licking our chops at another possible put option play for Abercrombie & Fitch (ANF, $34.77, up $0.97) after the stock is moving higher despite the fact that its same-store sales numbers were lousy. We would love to see a move back ABOVE $35 and a push towards resistance which is strong at $37. If so, we have the perfect put option in mind…
There is one trade we profile in the Members Area today but it is a ‘roll-over” trade from one of the aforementioned picks. A quick update we would also like to share for those of you who’s membership is expiring or for some of you who have been following us from the Blog. Here is where we are going:
“Also, please keep in my mind we have no plans to auto trade our picks. Many of you have been asking and this is one of the reasons why we don’t want to go this route. Sometimes the markets are just too volatile. Reason number two is that I don’t want to be famous, or on TV and we don’t want a million subscribers. We are limiting the number of subscribers we take to 1,000 and once the Trading Manual is done that is it. There will be a waiting list to get a subscription after that.
Our goal is to teach traders the option market and to stay under Wall Street’s radar. I don’t want our trades “crowded” and I don’t want to get to the point to where we can’t satisfy your needs. That is it. Thank all of you for the love/ hate mail yesterday…I deserve it.”
As we head to press…the Dow is up 171 to 9,973. It will be interesting to see how close to 10,000 we settle at as we head into tomorrow’s Jobs Report.
Wednesday’s Wakeup Call
Wednesday, March 3rd, 2010
9:05am (EST)
The Dow managed to squeak out a small gain of 2 points yesterday and closed at 10,405 after dipping into negative territory in the final hour. Despite Tuesday’s choppy action, the Dow managed to stay above 10,400 for the second consecutive day, something that hasn’t happened since mid-January.
Meanwhile, the S&P 500 also added a couple of points and finished at 1,118 while the Nasdaq closed at 2,280, up 7 points.
Walt Disney (DIS, $31.88, up $0.34) led the Dow higher and looks like it wants to challenge its 52-week high of $32.75. We have followed Disney for years and we usually have pretty good success playing call options on the stock. In September 2009, we grabbed our subscribers 72% on a call option trade and we recently closed out another trade for a small 12% win. In other words, there could be a trade here if Disney continues higher.
Another stock perched at a 52-week high is Imax (IMAX, $14.25, up $0.76). For those who have followed us for a couple of years know we frequently talk about the company as well and have been pounding the table on this stock since it was under $3.
The 52-week low for Imax is $3.90 and if you just do the math just from this level you get a return of 265%. So even if you don’t trade options, it just goes to show that if you aren’t a premium subscriber there are stories out there worth following which is why you should still read us every day.
Imax reports earnings NEXT Thursday, March 11, and we think they are going to knock the cover off the ball.
We have a lot to cover in the Members Area this morning and we have another new trade. As we head to press, Dow futures are up 2 points to 10,401 while the S&P 500 futures are higher by a point to 1,118. Nasdaq 100 futures are up 2 points to 1,854.
Tags: DIS, Imax, option picks, option signals, options alerts, stock options trading, Walt Disney
Posted in Company Commentary, Entertainment Stocks, Market Analysis, Market Commentary | Comments Off