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Friday, July 20th, 2012
9:00am (EST)
The bulls won their third-straight session on Thursday and made another run at upper resistance levels but ran out of gas midday way through the session. The surge during the first half of trading was enough to allow them to coast to victory as the bears never got it in second gear.
The Dow added 35 points, or 0.3%, to finish at 12,943. The blue-chips tested a high of 12,977 at lunchtime after dipping to a low of 12,889 shortly after the open. The bulls made a push at 13,000 and if cleared it could be smooth sailing up to 13,200. We mentioned yesterday if the bulls fail to clear this level by the weekend there could be a test back down to 12,600 over the near-term.
The S&P 500 popped 4 points, or 0.3%, to settle at 1,376. We said a close above 1,375 would get 1,400 into play and yesterday’s high was 1,380. The low was 1,371. The 52-week high is 1,422 which was hit on the first trading day of April.
The Nasdaq led the way higher after jumping 23 points, or 0.8%, to close at 2,965. Tech touched a top of 2,976 and is a little over 1% away from taking out the 3,000 level. Unlike the Dow and S&P, the Nasdaq held green all day and above 2,950 which was bullish.
The Russell 2000 fell 3 points to finish at 802. The small-caps traded to 808 and we said a close above 810 would be bullish but the negative close could be another clue the market is topping. The S&P Volatility Index ($VIX, 15.45, down 0.71) fell another 4% and has reached our mid-teen target. There is still a chance the VIX could push the low teens and that would mean the S&P 500 is at 52-week highs.
After the close, Google (GOOG, $593.06, up $12.30) and Microsoft (MSFT, $30.67, up $0.22) came in with mixed results but shares of both companies got nice little pops in extended trading.
Google beat estimates and had a huge beat on revenue by $70 million. Microsoft posted its first ever quarterly loss after taking charges for its online division and an expensive, money losing acquisition. However, Mr. Softie posted strong sales as revenue rose 4% and topped $18 billion for the quarter. Google was trading above $600 when after-hours trading closed while Microsoft was above $31. Both levels are holding before the bell.
You would think futures would have gotten a nice pop but they were weak all night. Shortly after 1am (EST), Dow futures were down 33 while the Nasdaq futures were flat as a pancake. They have gotten worse this morning as we head towards the opening bell and look like this: Dow (-66), S&P 500 (-9), Nasdaq (-8).
We have an important chart to show you this morning on a stock we have traded options on 4 times over the past few months. All of the recommendations have been put options and have made our subscribers 172%, 144%, 29% and 6%. Shares are right near resistance again so let’s go see what the chart looks like inside the Members Area.
Tags: economic news, GOOG, option trading newsletter, YHOO Posted in Google, Market Analysis, Market Commentary, Yahoo / Microsoft | Comments Off
Thursday, July 19th, 2012
12:35pm (EST)
The market got a slight bid at the open as the bulls added some fluff to yesterday’s gains but the action has been choppy as we head into the second half of trading. Economic news favored the bears this morning which slowed the 2-day momentum and tomorrow’s July option expiration day could be tricky.
Initial Claims rose 34,000 to 386,000 following last week’s drop of 24,000 to 352,000 but this was expected as the auto plant retooling winds down. Continuing Claims rose by 1,000 to 3.314 million. Existing Home Sales were a disaster, dropping 5.4% in June and well below expectations. The Philly Fed came in at -12.9, up from June’s negative reading of -16.6. And finally, Leading Indicators fell 0.3% to 95.6 in June following a May reading of 95.9.
We have talked about the recent 2+ month trading range which has seen both the bulls and bears push support and resistance with some fluff. We have given you the price targets to watch for on all of the indexes to confirm a breakout or breakdown and while we thought there might be a slim chance the blue-chips tested 13,000 today, they haven’t.
International Business Machines (IBM, $195.75, up $7.75) is up 4% and has accounted for 53 positive Dow points but American Express (AXP, $56.43, down $1.86) (-17 Dow points), Wal-Mart Stores (WMT, $71.62, down $1.23) and Verizon (VZ, $44.88, down $1.01) have snuffed out half those gains and the other 26 Dow stocks are mixed.
eBay (EBAY, $44.17, up $3.71), which should be a Dow component, is zooming 9% after reporting another sweet quarter on the heels of its PayPal unit. We talked about earnings this week in the video we did for our trading course members on Sunday night. The only possible trade we really liked was eBay as we said shares could surge past $40 based on the strength PayPal continues to show.
We should have taken it a step further and profiled the August 40 calls (EBAY120818C00040000, $4.20, up $2.10) which are up 100% today. The July 40 calls (EBAY120721C00040000, $3.90, up $2.30) would have been super risky as they expire tomorrow but they are up 145% and have traded to a high of $4.45
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Tags: AXP, eBay, IBM, stock options trading advisors, VZ, WMT Posted in Earnings, Google, Market Analysis | Comments Off
Tuesday, May 29th, 2012
12:25pm (EST)
Futures were trading higher Monday night as we prepared for Tuesday’s open and got progressively stronger before the bell. The rest of the week, including today will be extremely busy with lots of juicy tidbits to digest.
China got the ball rolling after word spread they could start their own Cash for Clunkers program to help spur automobile sales. This gave the overseas markets a lift which put Wall Street in a good mood.
Helping Tech today is word Apple (AAPL, $568.12, up $5.83) is in the early stages of producing a new television that would work with the internet and cloud computing. We were just talking about how Apple [and Google (GOOG, $592.37, up $0.84)] needed to get off the mat as its stock has been languishing and this was good news. We showed a chart for both stocks this morning as possible option plays down the road.
Facebook (FB, $29.76, down $2.15) has fallen below $30 and doesn’t seem like it wants to get up. The options listed today and we will have more on this story in the coming days. The WEEKLY options for Facebook will list Thursday so there will be a ton of ways to play this one.
The premiums are a little jacked liked we said they would be with implied volatility coming in above 50. The Facebook June 30 puts (FB120616P00030000, $1.75, up $1.75) opened at $1.20 and have traded down to $1. The quote looks a little funny because the options just listed but get ready for a possible new trade this week on Facebook after we see how shares trade over the next few days.
Economic news is light today and May’s Consumer Confidence Index was a letdown after falling to 64.9 versus a print of 68.7 for April. The bulls shook-off the bad news and maintained their momentum at first but as we head into the second half of trading, some of the bloom has come off the rose.
The Dow is up 72 points to 12,526 while the S&P 500 is higher by 7 points to 1,325. The Nasdaq is higher by 11 points to 2,848.
We have action to take on one of our current call option trades that is showing a solid double-digit gain in a little over a week. We want to protect profits in case today’s gains fade so let’s go check the tape.
Subscribers, please hit the Members Area for the latest updates.
Tags: AAPL, Facebook options, FB options, FB stock options, GOOG Posted in Apple, Google, Hot Stocks, Market Analysis, Market Commentary | Comments Off
Monday, April 16th, 2012
1:30pm (EST)
The market is mixed as we head into the second half of trading as the blue-chips are up while both the S&P 500 and Tech are trending lower. Futures were pointing towards a nice pop at the open but the Nasdaq has been weak for much of the session after a positive open. Apple (AAPL, $587.49, down $17.74) and Google (GOOG, $606.29, down $18.31) were leading the Tech sector lower, as both try to hold down the $600 level.
As far as economic news, Retail Sales rose 0.8% in the month of March. Excluding autos and gasoline, the core reading was up 0.7%, versus forecasts for an increase of 0.5%. The Empire Manufacturing Index came in at 6.56, which was well below expectations for a print of 18 while the Housing Market Index for April came in at 25, versus expectations for a reading of 29. And finally, Business inventories were up 0.6% in February, matching expectations.
Citigroup (C, $34.07, up $0.66) is up 2% after reporting better-than-expected earnings but missing on sales. The company reported a profit of $1.11 a share on revenue of $19.4 billion. Wall Street was expecting $1 a share on revenue of $19.8 billion.
As we head to press, the Dow is up 90 points to 12,939 while the S&P is up less than a point to 1,370. The Nasdaq is down 21 points to 2,990.
One of our current trades was stopped out today. Lululemon Athletica (LULU, $73.02, down $0.49) traded higher at the open and our Hard Stop was triggered. We made a nice 25% return in under 2 weeks and we may be back to play this name again, soon. Subscribers, check the Members Area for the updates.
Tags: AAPL, C earnings, GOOG Posted in Apple, Economic News, Google | Comments Off
Friday, April 13th, 2012
1:50pm (EST)
We remember watching an interview a few years ago with Google founders Larry Page and Sergey Brin who went on record and said they would never split the company’s stock. They mentioned how Warren Buffett has never split Berkshire Hathaway’s (BRK.A, $119,276, down $897) stock and most Wall Street analysts will tell you stock-splits don’t really do anything but create more outstanding shares.
We guess the two heavyweights had a change of mind.
Although it’s not an “official” stock-split, Google did announce a stock “dividend” which it is calling a 2-for-1 stock-split after topping Wall Street’s estimates. The company reported a profit of $10.08 a share versus estimates for $9.65 a share. Revenue did miss by a smidge though, as the company came in at $8.14 billion versus calls for $8.15 billion.
The split is designed to preserve the control of the company by its two co-founders and its corporate structure. The newly created non-voting stock will trade on the Nasdaq but no immediate time table was given.
If this is the case, they could do two classes of Google stock as GOOG.A and GOOG.B. The “Baby Berk’s” are Berkshire Hathaway’s Class B shares (BRK.B, $79.39, down $0.67) so we would imagine Google will likely have the same deal and we will officially dub them the Baby Goog’s.
We have one share of the Baby Berk’s on our office wall as a tribute to Mr. Buffett and we may add a Google “B” share whenever they come out. Believe it or not, you can still get a stock certificate for many of the well-known companies and we like to collect one or two every year. The artwork for some of America’s companies on a stock certificate is our way of collecting “art”. (Go to OneShare.com to get a complete list.)
With the adaption of eBooks and an all digital world, there will come a day when the “stock certificate” will disappear so we thought we would collect some history before they too become extinct.
As far as the market, the bears have taken control of the session and will likely when the week.
The Dow is down 68 points to 12,918 while the S&P is off by 11 points to 1,376. The Nasdaq is lower by 34 points to 3,021.
We have a lot to cover in our Members Area as we are closing another winning trade which will make our 7th of the week and we are lowering our Hard Stop on another position that is profitable. Subscribers, please pay careful attention to the trade instructions.
We will be back Sunday night with our Weekly Wrap and the chart work for each of our open positions. Until then, have a great weekend, everyone!
Tags: Berkshire Hataway stock, BRK-A, class a stock, GOOG stock split, Google earnings, Google stock split Posted in Earnings, Google, Market Analysis, Market Commentary | Comments Off
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Google (GOOG) Beats Estimates, Shares Crack $600
Friday, July 20th, 2012
9:00am (EST)
The bulls won their third-straight session on Thursday and made another run at upper resistance levels but ran out of gas midday way through the session. The surge during the first half of trading was enough to allow them to coast to victory as the bears never got it in second gear.
The Dow added 35 points, or 0.3%, to finish at 12,943. The blue-chips tested a high of 12,977 at lunchtime after dipping to a low of 12,889 shortly after the open. The bulls made a push at 13,000 and if cleared it could be smooth sailing up to 13,200. We mentioned yesterday if the bulls fail to clear this level by the weekend there could be a test back down to 12,600 over the near-term.
The S&P 500 popped 4 points, or 0.3%, to settle at 1,376. We said a close above 1,375 would get 1,400 into play and yesterday’s high was 1,380. The low was 1,371. The 52-week high is 1,422 which was hit on the first trading day of April.
The Nasdaq led the way higher after jumping 23 points, or 0.8%, to close at 2,965. Tech touched a top of 2,976 and is a little over 1% away from taking out the 3,000 level. Unlike the Dow and S&P, the Nasdaq held green all day and above 2,950 which was bullish.
The Russell 2000 fell 3 points to finish at 802. The small-caps traded to 808 and we said a close above 810 would be bullish but the negative close could be another clue the market is topping. The S&P Volatility Index ($VIX, 15.45, down 0.71) fell another 4% and has reached our mid-teen target. There is still a chance the VIX could push the low teens and that would mean the S&P 500 is at 52-week highs.
After the close, Google (GOOG, $593.06, up $12.30) and Microsoft (MSFT, $30.67, up $0.22) came in with mixed results but shares of both companies got nice little pops in extended trading.
Google beat estimates and had a huge beat on revenue by $70 million. Microsoft posted its first ever quarterly loss after taking charges for its online division and an expensive, money losing acquisition. However, Mr. Softie posted strong sales as revenue rose 4% and topped $18 billion for the quarter. Google was trading above $600 when after-hours trading closed while Microsoft was above $31. Both levels are holding before the bell.
You would think futures would have gotten a nice pop but they were weak all night. Shortly after 1am (EST), Dow futures were down 33 while the Nasdaq futures were flat as a pancake. They have gotten worse this morning as we head towards the opening bell and look like this: Dow (-66), S&P 500 (-9), Nasdaq (-8).
We have an important chart to show you this morning on a stock we have traded options on 4 times over the past few months. All of the recommendations have been put options and have made our subscribers 172%, 144%, 29% and 6%. Shares are right near resistance again so let’s go see what the chart looks like inside the Members Area.
Tags: economic news, GOOG, option trading newsletter, YHOO
Posted in Google, Market Analysis, Market Commentary, Yahoo / Microsoft | Comments Off