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Tuesday, January 31st, 2012
12:45pm (EST)
The bulls were making a push towards resistance on renewed optimism that a deal with Greek bondholders and euro zone officials could be reached but got stymied by worse-than-expected economic news. The headlines were “negative” due to the misses but the numbers were still pretty good for the most part despite what the talking heads are saying.
The Case/Shiller 20-City Home Price Index fell 3.7% in November while the Chicago Purchasing Managers report showed a reading of 60.2 versus expectations for a reading of 63. Meanwhile, Consumer Confidence came in at 61.1 versus a forecast for print of 68. These are solid numbers but the market isn’t seeing that way, yet.
As a result, the bears saw a little daylight to push support one last time. While there remains a ton of headline risk this week, we still need to be cautious of a pullback although we are hoping the bulls make one last push towards the 52-week highs.
We can afford to be a little aggressive due to our incredible month but we are taking smaller positions in case the bears crack a couple layers of support.
The Financial stocks have turned positive which is a good sign as the Financial Select Spiders (XLF, $14.15, up $0.05) are trying to hold support and make another push at resistance which is up ahead at $14.50.
As we head to press, the Dow is down 56 points to 12,597 while the S&P is off by 3 points to 1,309. The Nasdaq is lower by 7 points to 2,805.
We are adding 1 more NEW TRADE today so we have to roll.
Subscribers, please check the Members Area for the updates. Also, today is the last day to take advantage of our special offer to get the Daily and Weekly publications for one low price. We are also including our options trading manual, How to Trade Options on Momentum Stocks, at no charge. This package comes with bi-monthly videos that show you how to read charts and find trades.
We have set up a special tab on our subscription page where you will see both the Daily and the Weekly in a package deal that reads Annual Subscription to Daily and Weekly Wrap. You will not need a coupon for this deal and the savings are over 65%. The tab will be removed on Wednesday.
https://secure.momentumoptionstrading.com/amember/signup.php
Do the paperwork and we will send out our option trading course to you as soon as we get your order and provide you access to our videos right away.
We will be back in the morning with our next update.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Economic News, Financial Stocks, Market Analysis | Comments Off
Monday, November 28th, 2011
9:00 (EST)
The market continued its recent slide as the bears had their best bull feast in nearly 80 years as Wall Street fell 5% last week. The recent selling pressure became much more serious as all of the indexes fell below their 50-day moving averages (MA) with the bears stretching their winning streak to seven-straight sessions.
The headline news read like a Vegas betting parlor as a number of European countries face further risks of defaulting. Germany was the latest country which showed a chink in the armor after trying to raise $6 billion euro but was only able to raise a little over half of it. Spain also went to the well and was successful in its bond auction but the yields came at a hefty price. Italy faces a huge crisis in 2012 if they can’t raise more dough, and they are trying, but it’s costing them an arm-and-leg.
The news here at home continues to come in better-than-expected and this week will be big with a number of month-end reports due out. As far as the charts, they have been stretched which often happens when headline news trumps the technical picture. The bears have clearly had the advantage and at some point there will be a rebound but until Europe can figure out its mess, the market will be held hostage.
The Dow slipped 26 points, or 0.2%, to finish at 11,232 on Friday’s shortened session. We went into the week looking for 11,600 to hold but that level was taken out on Monday. Our next downside targets were 11,400 and then 11,200, which held, but there is risk down to 10,800 this week if current levels don’t hold. If the bulls can get past 11,400 (black line, purple circles) then they could make a run back towards 11,600 and then 12,000 but the news has got to be awfully good. For the week, the Dow dropped 564 points, or 4.8%, and is now down 346 points, or 3% YTD…
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If you are not a subscriber but would like to read more about where the market is headed and to take a closer look at our chart work along with our current trades, please click here. Since early August we have made 48 recommendation, both calls and puts, and have hit on 40 out of 48 trades for a winning percentage of over 80%! Some of our recent winners include:
+169% on Joy Global (JOYG) call options in 2 days
+137% in Research In Motion (RIMM) put options in 3 weeks
+130% in Spreadtrum Communications (SPRD) call options in 4 weeks
+164% in FedEx (FDX) put options in 6 days
+184% in Goldman Sachs (GS) put options in 5 days
+191% in O’Reilly Automotive (ORLY) call options in 17 days
+100% in VMWare (VMW) call options in 4 days
We are one of the fastest growing stock options trading advisors on the internet. We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter. Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis. Sign-up now and receive access instantly!
Futures are pointing towards a strong start for today’s session and look like this: Dow (+255), S&P 500 (+34), Nasdaq 100 (+53). We recommended 4 new trades on Friday and after two weeks of being patient and building new positions, hopefully we get the surge we have been expecting. Subscribers, check the Members Area for the updates.
Tags: Dow, Momentum stocks, stock options trading advisors
Posted in Apple, BioTech, China, Commodities, Company Commentary, Covered Calls, Earnings, Economic News, Entertainment Stocks, European Union (EU), Financial Stocks, Futures, Gold, Google, Hot Stocks, IPOs, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Oil, Option Trades, Rick's Account, Sectors, Stock Earnings, strangle option trades, Trade Update, Trading Psychology, Trading Tips, Uncategorized, VIX, Watch Lists, Yahoo / Microsoft | Comments Off
Tuesday, October 4th, 2011
9:00am (EST)
We mentioned yesterday we were excited about the market going lower because A) it proved our homework back in August was about to pay off and B) our subscribers have made a wheelbarrow full of money over the past few weeks following our option recommendations. Of course, 2011 has been a hard market to trade considering all the major events that have taken place and the recent 8-week trading range has been just as much of a headache. However, one thing our students know is that the longer a market, or stock, stays in at trading range the bigger the breakout or breakdown becomes.
We knew going into last week the bulls had a lot of work to do and once they failed to clear short-term resistance, we knew the trading range was about to crack – to the downside. We also got a hard date on when Greece’s fate would be determined which also lead us to believe there would be more anxiety as push comes to shove. Yesterday’s technical damage was exactly what we wanted to see, as the decline pushed the major averages to new 52-week closing lows.
Even good news here at home continues to take a back seat to Europe’s woes, as Greece admitted that it does not expect to hit its deficit target. Also weighing on the market was the data from overseas which pointed to a slowdown in manufacturing.
Bankruptcy rumors spooked Wall Street and Airlines stocks as AMR (AMR, $1.98, down $0.98) fell 33% on water-cooler talk they might need to higher some Chapter 11 lawyers. In the company’s defense, they did state they were not seeking a prepackaged bankruptcy but often times where there’s smoke, there’s fire. United Continental Holdings (UAL, $17.11, down $2.27) gave back 12% while JetBlue Airways (JBLU, $3.49, down $0.60) tumbled 15%. We saw some cracks in the sector back in August but we failed to give our UAL put option trade enough time to take advantage of yesterday’s debacle.
Elsewhere, Financial stocks took a beating as they suffered the worst loss of any major sector by falling 4.5%. Bank of America (BAC, $5.53, down $0.59), Morgan Stanley (MS, $12.47, down $1.04), Goldman Sachs (GS, $90.08, down $4.47) and JPMorgan Chase (JPM, $28.65, down $1.47) all hit new bottoms and could go even lower.
We have been warning our readers of Goldman’s troubles and we have said BAC was going to $5 but neither looks like a buy quite yet. In fact, we now have a triple-digit profit (+145%) in our Goldman Sachs put option from last week and all we have to do now is protect our gains. In pre-market action, Golden Slacks is trading in the $80’s.
As far as the market, let’s go over the numbers and more downside targets because it’s going to get worse…
The Dow dropped 258 points, or 2.4%, and ended at 10,655. There was strong support at 10,800 (which is now resistance) but this level acted like a wet paper towel trying to stop a cannonball…
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If you are not a subscriber but would like to read more and check our chart work for the indexes and our current trades, please click here. Futures are pointing towards another nasty open which is good news for us. Dow futures are lower by 96 points to 10,443 while the S&P futures are off by 11 points to 1,075. Nasdaq 100 futures are down 16 points to 2,050. We have quite a few trades that are up triple-digits so we have set HARD STOPS to protect our profits. However, with the futures tanking, it looks like we could see continued gains for our trades.
Tags: About options trading, Airline stocks, BAC puts, Goldman Sachs, JPMorgan Chase, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in Financial Stocks | Comments Off
Thursday, September 22nd, 2011
1:15pm (EST)
We have been warning of volatility for weeks and we mentioned in our Weekly Wrap on Sunday night that the market could see a big move this week. As we started preparing this morning’s update (last night) futures were already pointing at a weak open here at home but when the overseas markets fell apart, we knew the bears would bite hard.
The bulls were in a quandary (love that word) as they pushed the upper end of the current trading range, and had their chips on the Fed to break through resistance. Problem is, the Fed is light on ammo so their Twist, or bluff should we say, was called by the bears.
All sectors are in the red and it’s no surprise the Financial stocks are having another rough outing. The sector tanked nearly 5% yesterday on the market’s pullback but more of it had to do with the knuckleheads at Moody’s (MCO, $30.55, down $1.21) downgrading the debt of Bank of America (BAC, $6.22, down $0.16), Citigroup (C, $24.65, down $0.87), and Wells Fargo (WFC, $23.33, down $0.38). Bank of America nearly traded to a 5-handle, which is our target to add the stock to our Weekly Wrap, after kissing a low of $6.03 today.
We have avoided the Financial stocks for awhile and we still think there will be more, new 52-week lows before all is said and done. The three aforementioned stocks are within spitting distance of setting new bottoms while our favorite name, JPMorgan Chase (JPM, $29.36, down $0.98) has reached a new 52-week low of $28.80 today.
When the right time to start nibbling is hard to say because these stocks do look so cheap but we mentioned over the summer we would need to see back-to-back quarters of solid growth before we stick our toes in the water. The next earnings cycle is in October so we are only a few weeks away before we can get a better idea on their outlook, and more importantly, their results. If the Financial stocks can beat Wall Street’s already lowered forecasts next month and again in January, then maybe we would start to get excited but right now we still don’t trust them.
As we head to press, the Dow is down 372 points to 10,752 while the S&P 500 is lower by 34 points to 1,133. The Nasdaq is off by 68 points to 2,470. All three indexes are dancing around below the bottom layers of support we mentioned this morning so the bulls will need to rebound in the second half to try and hold these levels.
Our portfolio is light and we are trying to be patient as we wait for a break out of the current trading range. Although we only have a few put options we are following, our Research in Motion (RIMM, $21.35, down $0.19) trade continues to do well as shares struggle to hold $20. We are up over 150% so far and looking for more.
Freeport-McMoRan (FCX, $35.59, down $2.96), a strangle trade that we profiled on our Watch List on Tuesday when shares were at $40, has hit a 52-week low of $30.97 today.
Quotes from our Members Area:
“Freeport could test $35, possibly $30, and we wanted no part of the calls once $40 fell. With copper at 9 month lows, it may take Freeport a while before it recovers. However, at $30, we may start nibbling on shares for our Weekly Wrap.” (END)
The October 35 puts (FCX111022P00035000, $4.15, up $2.05) were at 72 cents on Tuesday morning and had closed near a buck by the close. This morning the puts have hit a high of $4.90. Folks, that is a return of nearly 600%!
The beauty of the strangle trade is that we listed the January 50 calls (FCX120121C00050000, $0.40, down $0.10) which were at $1.05 to offset the risk if Freeport held $40 and rebounded. With shares at $40, we knew Freeport could move $5 either way, depending on what the market did after the Fed announcement. Although the calls are down 60%, they do not expire until January 2012, or 120 days from now.
The total cost of this trade would have been $1.75 on Tuesday morning had it been official and it was our “Twist” on the Fed’s “Operation Twist”. If the put options were closed today, the trade would have made well over 100% either way in just 3 days.
We aren’t ready to throw the towel in, yet, on the bulls, but we may need to add some more put option ideas to our Watch List if the bears can crack the bottom of this 2-month range or some more strangle trades like the ones we just profiled.
The line in the sand is S&P 500 1,125. If the index closes below this level, then there could be real trouble in the bulls’ camp. However, just like we saw the bulls fail at the top 24 hours ago, they could run into the same trouble as the bulls try to hold the trading range.
Our point is, this may be one of the BEST times ever to trade strangles and we will be introducing a few more of these types of trades in the coming weeks. We will probably do a video this weekend for those of you who signed up for our Trading Course and we are excited on some of the topics we are going to be covering.
If you really want to learn how the market works, and if you really want to learn charts and how to find trades that work in this kind of market then you will not want to miss this weekend’s video. We will have more details in tomorrow’s daily updates so stay tuned.
Subscribers, check the Members Area for the updates. The close should be interesting today…
Tags: bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, momentum, momentum options, Nasdaq, option mentoring, option trading course, RIMM put options, RIMM’s earnings miss, S&P 500, VIX
Posted in Company Commentary, Financial Stocks, Market Commentary, strangle option trades | Comments Off
Wednesday, June 8th, 2011
8:45am (EST)
The bulls were looking good for much of Tuesday’s session as they started strong out of the gate and held their gains for much of the session. Although there was some slippage as the day wore on, the possibility of ending a 4-session losing streak was right there at the finish line. However, we warned of Ben Bernanke’s speech just before the close and in the final hour of trading the bears started to make a move.
Bernanke has done all he can do with the printing presses but said the U.S. economy has not grown as quickly as the Fed has been expecting. He went on to say that he expects the economy to pick up steam in the back half of the year (naturally) and there are no plans for another round of quantitative easing (poker face?).
Of course, Big Ben also blamed temporary setbacks such as the earthquake in Japan and higher gas prices for the weakening U.S. economy but overall his comments were a drag and did nothing to help the bulls’ case.
The Dow was up nearly 90 points after the open and reached a peak of 12,178 before falling 19 points by the close to end at 12,070. We had expected a run up to 12,200 but we kind of felt early on the rally would fade. The market went out on its lows and is with spitting distance of breaking down below 12,000. These two areas will be crucial today as far as momentum. The blue-chips have now fallen for five-straight outings, their longest losing streak since August.
The S&P slipped a little over 1 point and settled at 1,285 but never really managed a threat to take back the 1,300 level. The index traded to a high of 1,296 but a test down to 1,275 and then 1,250 appear to be on the bears’ agenda.
The Nasdaq also fell 1 point and finished at 2,701 after leading the pack for much of Tuesday’s trading. Tech reached a high of 2,723 but folded like a cheap lawn chair into the close. The index did manage to hold 2,700 but there is still risk down to 2,650-2,625 over the near-term if this level fails.
The Financial sector once again rolled over and we have been saying all year their lack of leadership could hurt the bulls. After an initial pop in the morning, many of the familiar names we often discuss continued lower. Bank of America (BAC, $10.65, down $0.18), another 52-week low. Wells Fargo (WFC, $25.77, down $0.49) looks to be headed below its 52-week low of $23.
Futures are pointing towards a lower start this morning following yesterday’s weak close. Dow futures are down 50 points to 12,022 while the S&P futures are off by 6 points to 1,279. Nasdaq futures are off by 16 points to 2,257.
We may release a trade shortly after the open that is on our Watch List. If we can get our price, look for a Trade Alert before our regularly scheduled 1pm update. Subscribers, check the Members Area for the updates.
Tags: bac, call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options, options mentoring, options trading course, stock market options, weekly options, wfc
Posted in Financial Stocks, Market Commentary | Comments Off
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Bulls Walking on Thin Ice
Monday, November 28th, 2011
9:00 (EST)
The market continued its recent slide as the bears had their best bull feast in nearly 80 years as Wall Street fell 5% last week. The recent selling pressure became much more serious as all of the indexes fell below their 50-day moving averages (MA) with the bears stretching their winning streak to seven-straight sessions.
The headline news read like a Vegas betting parlor as a number of European countries face further risks of defaulting. Germany was the latest country which showed a chink in the armor after trying to raise $6 billion euro but was only able to raise a little over half of it. Spain also went to the well and was successful in its bond auction but the yields came at a hefty price. Italy faces a huge crisis in 2012 if they can’t raise more dough, and they are trying, but it’s costing them an arm-and-leg.
The news here at home continues to come in better-than-expected and this week will be big with a number of month-end reports due out. As far as the charts, they have been stretched which often happens when headline news trumps the technical picture. The bears have clearly had the advantage and at some point there will be a rebound but until Europe can figure out its mess, the market will be held hostage.
The Dow slipped 26 points, or 0.2%, to finish at 11,232 on Friday’s shortened session. We went into the week looking for 11,600 to hold but that level was taken out on Monday. Our next downside targets were 11,400 and then 11,200, which held, but there is risk down to 10,800 this week if current levels don’t hold. If the bulls can get past 11,400 (black line, purple circles) then they could make a run back towards 11,600 and then 12,000 but the news has got to be awfully good. For the week, the Dow dropped 564 points, or 4.8%, and is now down 346 points, or 3% YTD…
************************
If you are not a subscriber but would like to read more about where the market is headed and to take a closer look at our chart work along with our current trades, please click here. Since early August we have made 48 recommendation, both calls and puts, and have hit on 40 out of 48 trades for a winning percentage of over 80%! Some of our recent winners include:
+169% on Joy Global (JOYG) call options in 2 days
+137% in Research In Motion (RIMM) put options in 3 weeks
+130% in Spreadtrum Communications (SPRD) call options in 4 weeks
+164% in FedEx (FDX) put options in 6 days
+184% in Goldman Sachs (GS) put options in 5 days
+191% in O’Reilly Automotive (ORLY) call options in 17 days
+100% in VMWare (VMW) call options in 4 days
We are one of the fastest growing stock options trading advisors on the internet. We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter. Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis. Sign-up now and receive access instantly!
Futures are pointing towards a strong start for today’s session and look like this: Dow (+255), S&P 500 (+34), Nasdaq 100 (+53). We recommended 4 new trades on Friday and after two weeks of being patient and building new positions, hopefully we get the surge we have been expecting. Subscribers, check the Members Area for the updates.
Tags: Dow, Momentum stocks, stock options trading advisors
Posted in Apple, BioTech, China, Commodities, Company Commentary, Covered Calls, Earnings, Economic News, Entertainment Stocks, European Union (EU), Financial Stocks, Futures, Gold, Google, Hot Stocks, IPOs, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Oil, Option Trades, Rick's Account, Sectors, Stock Earnings, strangle option trades, Trade Update, Trading Psychology, Trading Tips, Uncategorized, VIX, Watch Lists, Yahoo / Microsoft | Comments Off