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Friday, January 21st, 2011
9:00am (EST)
The Dow spent much of Thursday in negative territory and traded to a low of 11,744 before rebounding late in the afternoon to recoup most of its losses. The index finished with a loss of 3 points and closed at 11,822 after trading up to 11,845.
The S&P 500 slipped 2 points and settled at 1,280 after trading down to 1,271. Like the Dow, the index made it into positive territory late in the day and traded up to 1,296.
Meanwhile, the Nasdaq was never close to sniffing green as the index stayed in the red all day long. Tech hit a low of 2,686 before closing down 21 points at 2,704. The index is right at its 20-day moving average so watch the 2,700 level today.
Futures are pointing toward a higher open this morning thanks in part to Google (GOOG, $626.77, down $4.98) which reported a blowout quarter. The company announced profits of $2.5 billion, or $7.81 a share, versus $2 billion, or $6.13 a share, in the year earlier quarter.
Excluding stock-compensation charges, Google numbers really came in at $8.75 (a share) which was ahead of analyst’s estimates for $8.06. Revenue surged over 25% to $8.44 billion, up from $6.67 billion, and ahead of expectations.
In a surprising move, the company also switched up its top brass as co-founder, Larry Page, will be the new CEO and takes over for Eric Schmidt who will become Executive Chairman.
As we head to press, here is a look at the futures: Dow (+42); S&P 500 (+7), Nasdaq 100 (+15). We will probably release a trade shortly after the open so stay close to you email inbox.
Tags: call options, GOOG, Google's earnings, momentum options, Momentum stocks, NASDAQ: GOOG, option signals
Posted in Earnings, Google | Comments Off
Friday, October 15th, 2010
1:20pm (EST)
Although the futures were pointing towards a higher open , you could almost feel the nervousness in the bulls as Ben Bernanke spoke this morning before the market opened. A lot has been riding on the real “Big Ben” as he tries to quarterback the economy into the endzone and if he could make interest rates below 0% to where the government pays us to borrow money, he would.
 Daily chart of support and resistance for AAPL. We will save our long-term comments on how he is driving down the American dollar but at some point, the printing presses can’t run forever.
In any event, Bernanke reiterated the central bank is ready to do more to stimulate the sluggish economy and his comments were the latest confirmation the central bank is about to ramp up its purchase of Treasury bonds to spark growth. We wouldn’t be surprised if it were Monday. No wonder our assessment of government economic policies have fallen to the lowest level since Obama took office.
Bernanke’s comments helped the futures strengthen and better-than-expected economic news led to a decent open. Retail sales continue to surprise as they rose 0.6% month-over-month in September. Wall Street was expecting a 0.5% increase. The Empire State Manufacturing Index rose to 15.73 in September, compared to estimates of 8.0. The consumer price index (CPI) rose 0.1% month-over-month in September but fell short for estimate of 0.2%. Excluding food and energy, the CPI was unchanged last month.
Business inventories increased 0.6% in August which was better than expectations for a 0.4% gain. And finally, the Reuters/University of Michigan consumer sentiment index for October came in at 67.9, versus the consensus estimate of 69.0.
However, the Financial stocks are getting whacked again and we continue to say they will need to rebound and get healthy before the bulls can push through the April highs and start a real run at higher levels. It was just 3 years ago this month the Dow was at 14,000…
The Dow managed to open higher and made its way to a high of 11,141 but sold-off after some of the economic news hit. The index then traded to a low of 11,010 and as you can see in the 130 point swing, volatility is picking up. The index continues to test our 11,150 target and a close above this level will have the bulls feeling good over the weekend. Currently, the Dow is down 40 points to 11,054.
The S&P 500 is staying within our 1,170-1,175 range and is flat at 1,174. A close above 1,175 today should lead to a test of 1,200 next week so we are watching this level like a hawk.
The Nasdaq traded above our target of 2,450 yesterday but didn’t close there but has broken through this level on the heels of Google’s (GOOG, $$599.93, up $59.00) blowout quarter. The index is trading at 2,458 (up 23 points) and a close above our target should lead to a push towards 2,500. However, we said the other day the Nasdaq could see 2,600 and the index has a good chance of doing that on Monday if Apple (AAPL, $310.00, up $7.69) can once again impress Wall Street.
The company reports earnings on Monday and it could shape the direction of Tech over the next few weeks. Apple should report great earnings but expectations are high. The only problem that worries us is the shortage of supply on some of the components used to make the iPhone and iPad. However, if Google can do it, we are sure Apple can follow suit.
One analyst came out today with a $500 price target for shares of Apple.
As far as Google, some traders took a chance on the October 600 calls (GOOG101016C00600000, $1.00, up $0.60) before the close yesterday as they were only selling for 40 cents. In our training video for our options manual “How to Trade Options on Momentum Stocks”, our editor-in-chief went over how to look at playing Google’s earnings.
Although there was no recommendation, this type of trading out-of-the-money calls (or puts) are like going to a casino. Sometimes they hit, sometimes they don’t but you have to act fast and you have to know what you are doing. The October 600 calls are currently at $1 but they traded to a high of $5.90 at the opening bell!
Had you bought 10 contracts of the Google 600’s, it would have cost you $400. Imagine this morning waking up to a gain of $5,500! Or, if we expand it for the high rollers, a $4,000 investment would have been worth $55,000. The ROI (return on investment) would have been 1,275%.
Now this is important, since October options expire today, the battle ground will be if Google stays above or below $600 a share. If the shares stay below $600, these options will expire worthless and as we go into the close today, these options could trade wildly. The key was to get in yesterday before the close and out at the open today.
We show you how to find these trades and we have played them in the past with the likes of Priceline.com (PCLN, $355.20, up $6.14), Nike (NKE, $82.27, up $0.50) and others but we didn’t feel like going to Vegas this week. However, we are going over this weekend as we have a trade for Monday.
If you are serious about taking your trading to another level and want to learn how to find trades like this, then you should seriously consider a purchasing to our trading manual. We will be doing another video this weekend to go over other types of trades and we look forward to you joining us!
For October, we are also offering a free 1-month subscription to our exclusive Members Area if you purchase the option trading manual. You can get a peak at what’s inside by clicking on the hot, shiny yellow button to your left on the website.
We have some last minute updates before the weekend which is why we are running a little late today. We are swinging the bat on an earnings trade for Monday and wanted to do a little more research. Subscribers, check the Members Area for the NEW TRADE!
We will be back Sunday night with the Weekly Wrap and until then, have a good weekend!
Tags: Apple (AAPL), Google (GOOG), options trading course
Posted in Apple, Google | Comments Off
Friday, October 15th, 2010
9:00am (EST)
The bulls were looking to extend their winning streak to six straight sessions as the bears battled hard to put a plug in the current rally. The cards were in their favor as a slight jump in jobless claims and an ongoing housing foreclosure crisis that continues to haunt the Financial sector looked like Aces.
The Bank stocks took another hit as Wall Street frets an investigation of the institutions’ handling of foreclosure procedures and this is a bad story only getter worse. It was a curveball for the sector (which was on the verge of breaking out of a funk) that could force them to agree to loan modifications or “principal forgiveness agreements” after all 50 states formally launched investigations. Looks like the government is getting their finger in another pie…
Bank of America (BAC, $12.60, down $0.69) and Citigroup (C, $4.06, down $0.19) dropped 5% while the Financial Spiders (XLF, $14.60, down $0.26) fell 2%. We were watching the XLF for signs of a move past $15 for confirmation but that didn’t happen. Shares touched $15 on Wednesday but could not close above this level. Side Note, Bank of America traded 500 million shares yesterday…incredible.
We continue to find it “unsettling” that the Financial sector has lagged all phases of the current market rally but a few things we have learned is that you don’t fight the tape and you tug on Superman’s cape. Despite the Debbie Downers, the bulls came thisclose to extending their winning streak to seven as the market finished near the flat line for the day.
The Dow slipped 2 points to finish at 11,094 after trading down to a low of 11,023. The 11K level held and our near-term target remains 11,150-11,200.
The S&P 500 fell below the 1,170 level to a low of 1,166 but rebounded to finish at 1,173, down 4 points. We are still expecting a move past 1,200 over the short-term while 1,150 provides support.
The Nasdaq declined by 6 points and finished at 2,435. The index traded to a low of 2,422 and did manage a high of 2,445. Tech has yet to close above our 2,450 target but that shouldn’t be an issue today.
Yesterday, we talked about the possibility of Google (GOOG, $540.93, down $2.37) surprising Wall Street and how the stock was building momentum. Well, Google did not disappoint our research as shares were up a Grant ($50) in after-hours trading last night to $590. Here were our quotes from yesterday:
“While search queries were up 4% overall in September from August, Google could surprise some analysts with a huge quarter as they doubled the industry’s gain as a whole. The stock has been in a solid uptrend since its end of August lows of $447-$448 and has gained nearly a $100 in 6 weeks. Google’s shares have been white-hot due to the release of “Google Instant” which shows results as the user types in a search query.”
We will go over their numbers in today’s 1pm update but for now, we want to get our subscribers in the Members Area as we have a number of trades that should see some solid gains. We also have some loose ends to tie up on a strangle option trades which have done well since we started adding them into our mix. The October options expire TODAY so we want to make sure you know what to do on these profitable trades.
As we head to press, the Dow futures are up 36 points to 11,088 while the S&P 500 futures are higher by 4 to 1,177. The Nasdaq 100 futures are showing a 13 point pop and are at 2,075.
Tags: Bank of America (BAC), Google (GOOG), option trading courses
Posted in Earnings, Google | Comments Off
Monday, August 16th, 2010
12:55pm (EST)
The market has been on both sides of the breakeven line today as the bulls and bears try to position themselves for the week ahead. Economic news has been mixed and the bulls have the early edge as they try to recover from last week’s losses.
The National Association of Home Builders said its August housing market index fell to 13 versus a July reading of 14. It was the lowest reading since March 2009 and here’s how bad that number really is. A reading over 50 on this index means the market is positive on the sector while a reading below 50 indicates negative sentiment. The last time the index had a reading above 50 was over 3 years ago, in April 2006.
We get another peak at housing on Tuesday when the Commerce Department releases its report on home construction in July. Look for more bad news.
Elsewhere, the Federal Reserve Bank of New York said its manufacturing index rose to 7.1 in August from 5.1 in July. Wall Street was looking for the index to rise to 8. Although there was improvement, the number was still below expectations.
We did a big write-up on Research In Motion (RIMM, $50.94, down $2.46) last night in our Weekly Wrap and said we should be getting some numbers on sales of its new BlackBerry Torch soon. Well, we don’t have any hard numbers but we do know there weren’t any lines over the weekend in the major cities like there had been for Apple’s (AAPL, $249.59, up $0.49) iPhone and the device hasn’t been selling out. When RIMM launched the BlackBerry Storm there was huge consumer interest as lines formed and the product sold out in many places on day 1.
We highlighted RIMM’s inability to bring a slick, smartphone device to the market sooner and we are already hearing reports of a new Droid Pro that is due out in November. Motorola’s (MOT, $7.83, up $0.19) Droid is based on Google’s (GOOG, $489.70, up $3.35) Android 2.2 operating system and there is also the possibility of Motorola launching a tablet device as well.
Add it all up and it shows RIMM is clearly playing catch-up.
As we head to press, the Dow is up 22 points to 10,325 while the S&P is higher by 3 points to 1,082. The Nasdaq is showing a gain of 20 points to 2,193.
We have an important update as we are locking in gains on our J. C. Penney (JCP, $19.87, up $0.05) put trade from last week. We are showing a return of over 80% so we want our subscribers to close the rest of their positions.
Posted in Apple, Google | Comments Off
Sunday, April 18th, 2010
11:00pm (EST)
The bears finally came to life on Friday but if it weren’t for the Goldman Sachs (GS, $160.70, down $23.57) headline they might still be sleeping.
The market got a slew of earnings news that was mostly good and was handling the Google (GOOG, $550.15, down $45.15) sell-off well as the market made into positive territory shortly after the open. However, when news hit that the SEC was charging Goldman with fraud, the market tanked and the selling pressure started.
Fraud was the one word that woke the bears up from their sleep and they immediately attacked not only Goldman but the entire market. Goldman was trading well above $183 and tanked to the $160′s before finding a bottom at $155. The 13% drop in shares caused a rush to safety as investors dumped stocks and ran to treasuries.
As a result, the major indexes all lost over 1% so let’s go over the good and bad.
The Dow lost 125 points, or 1.1%, on Friday to finish at 11,018 but still managed to close the week with a slight gain. The index also held the 11,000 level after starting the week below it and added 21 points, or 0.2%.
The Nasdaq dropped 34 points, or 1.4%, to settle at 2,481 but advanced 27 points for the week, or 1.1%. The index fell below 2,500 but finished higher for the 7th straight week and 9 out of the past 10.
The S&P 500 was the weakest link as it got whacked for nearly 20 points, or 1.6%, and ended the week with a loss. The index slipped 2 points, or 0.2%, and heads into Monday trading at 1,192.
The fact that the SEC is charging Goldman is a black eye for the company and they have already said the allegations were completely unfounded and will fight the case. While Goldman has deep coffers to wage a lengthy legal battle it’s their reputation we are most worried about.
Although we like to remain on the political sidelines, the timing of the news was a brilliant stroke by Washington wouldn’t you say? The case against Goldman is all about Obama’s financial reform bill but many are questioning what side he is really on. While we agree there needs to be more transparency and regulation, we aren’t so sure Goldman did anything wrong. Obama will use this to fuel the rally for financial reform while Goldman will tell you they lost $90 million on a rookie trader who had little supervision.
The sharp drop in Goldman was an overreaction (to some degree) but shares are likely to be volatile for a few weeks as the gloves come off.
We have been preparing for a correction and last week we allowed for a little fluff when we predicted the Dow would break 11,000. We also mentioned how we thought the index could trade to 11,300-11,400 before we saw a pause and we got to 11,189.
Those targets would likely have been hit and they remain in play but we also have to look at support levels for the Dow as we could see some continued weakness Monday morning. The first wave of support comes in 10,800 and then 10,500. Anything below that could lead to a correction.
As far as the S&P 500, we will be watching to see if the 1,150 level holds but 1,100 would come into the picture if not. We were hoping to reach 1,250-1,275 before we paused and the S&P traded up to 1,213 before Friday’s hit. However, the index will need to rebound back over 1,200 before those targets can be talked about again.
The Nasdaq was quickly approaching our near-term targets of 2,550-2,600 and reached a high of 2,518 on Thursday. Tech has nothing to do with the Financial stocks and they will be the key if the market can rebound or not.
Earnings will begin to pick up and we will go over the list of companies reporting this week in our Monday morning update. We are still working on our playbook for the week and we see a lot of good opportunities developing should the market continue to sell-off.
A lot of investors will likely get nervous if more negative headlines come out and we can almost bet the SEC isn’t through naming names. This means some investors won’t be buying stocks and will be staying out of the market because they are scared we are going lower.
If so, then we want to remind you that put options work just as well in a bear market as call options work in a bull market. We will be back early Monday morning with a fresh outlook and a slew of possible new trades in case we do go lower.
Tags: Dow price targets, Goldman Sachs SEC fraud charges, GOOG, Goole's earnings, GS, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Financial Stocks, Google, Weekly Wrap | Comments Off
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MomentumOptionsTrading.com Weekly Wrap for 4/18/10
Sunday, April 18th, 2010
11:00pm (EST)
The bears finally came to life on Friday but if it weren’t for the Goldman Sachs (GS, $160.70, down $23.57) headline they might still be sleeping.
The market got a slew of earnings news that was mostly good and was handling the Google (GOOG, $550.15, down $45.15) sell-off well as the market made into positive territory shortly after the open. However, when news hit that the SEC was charging Goldman with fraud, the market tanked and the selling pressure started.
Fraud was the one word that woke the bears up from their sleep and they immediately attacked not only Goldman but the entire market. Goldman was trading well above $183 and tanked to the $160′s before finding a bottom at $155. The 13% drop in shares caused a rush to safety as investors dumped stocks and ran to treasuries.
As a result, the major indexes all lost over 1% so let’s go over the good and bad.
The Dow lost 125 points, or 1.1%, on Friday to finish at 11,018 but still managed to close the week with a slight gain. The index also held the 11,000 level after starting the week below it and added 21 points, or 0.2%.
The Nasdaq dropped 34 points, or 1.4%, to settle at 2,481 but advanced 27 points for the week, or 1.1%. The index fell below 2,500 but finished higher for the 7th straight week and 9 out of the past 10.
The S&P 500 was the weakest link as it got whacked for nearly 20 points, or 1.6%, and ended the week with a loss. The index slipped 2 points, or 0.2%, and heads into Monday trading at 1,192.
The fact that the SEC is charging Goldman is a black eye for the company and they have already said the allegations were completely unfounded and will fight the case. While Goldman has deep coffers to wage a lengthy legal battle it’s their reputation we are most worried about.
Although we like to remain on the political sidelines, the timing of the news was a brilliant stroke by Washington wouldn’t you say? The case against Goldman is all about Obama’s financial reform bill but many are questioning what side he is really on. While we agree there needs to be more transparency and regulation, we aren’t so sure Goldman did anything wrong. Obama will use this to fuel the rally for financial reform while Goldman will tell you they lost $90 million on a rookie trader who had little supervision.
The sharp drop in Goldman was an overreaction (to some degree) but shares are likely to be volatile for a few weeks as the gloves come off.
We have been preparing for a correction and last week we allowed for a little fluff when we predicted the Dow would break 11,000. We also mentioned how we thought the index could trade to 11,300-11,400 before we saw a pause and we got to 11,189.
Those targets would likely have been hit and they remain in play but we also have to look at support levels for the Dow as we could see some continued weakness Monday morning. The first wave of support comes in 10,800 and then 10,500. Anything below that could lead to a correction.
As far as the S&P 500, we will be watching to see if the 1,150 level holds but 1,100 would come into the picture if not. We were hoping to reach 1,250-1,275 before we paused and the S&P traded up to 1,213 before Friday’s hit. However, the index will need to rebound back over 1,200 before those targets can be talked about again.
The Nasdaq was quickly approaching our near-term targets of 2,550-2,600 and reached a high of 2,518 on Thursday. Tech has nothing to do with the Financial stocks and they will be the key if the market can rebound or not.
Earnings will begin to pick up and we will go over the list of companies reporting this week in our Monday morning update. We are still working on our playbook for the week and we see a lot of good opportunities developing should the market continue to sell-off.
A lot of investors will likely get nervous if more negative headlines come out and we can almost bet the SEC isn’t through naming names. This means some investors won’t be buying stocks and will be staying out of the market because they are scared we are going lower.
If so, then we want to remind you that put options work just as well in a bear market as call options work in a bull market. We will be back early Monday morning with a fresh outlook and a slew of possible new trades in case we do go lower.
Tags: Dow price targets, Goldman Sachs SEC fraud charges, GOOG, Goole's earnings, GS, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Financial Stocks, Google, Weekly Wrap | Comments Off