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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
Friday, April 16th, 2010
9:05am (EST)
The bulls extended the major indexes winning streak to six following Thursday’s gains. However, judging by this morning’s futures, the bulls will have to dig out of a hole to make it seven in-a-row.
The Dow managed to squeeze a 22 point win and closed at 11,144 after touching a low of 11,096 on Thursday. The index peaked at 11,154 and touched another new 52-week high in the process.
The S&P 500 added a point to finish at 1,211 while the Nasdaq added 11 and settled at 2,515.
The big news after the close last night was Google’s (GOOG, $595.30, up $6.30) numbers. Although impressive, shares got hammered, losing 29 points, and were last seen at $566 in pre-market trading.
The company earned nearly $2 billion, or $6.06 per share, in the quarter, versus $1.4 billion, or $4.49 per share, in the year-ago period. Goog’s would have earned $6.76 a share but took a hit for expenses covering employee stock compensation. Wall Street was expecting $6.60 a share on average.
Revenue surged over 20% to $6.8 billion which marked Google’s greatest revenue growth since 3Q08. After subtracting commissions paid to advertising partners, Google’s revenue really came in at a little over $5 billion but was still about $90 million above estimates.
We said yesterday that Google was the wild card and we also said we could get a “curveball”. Well, we did. The real deal with Google’s big drop was the fact the company’s CEO, Eric Schmidt, was NOT on the conference call. To compare it to the sports world, it would be like a NFL owner not going to the Super Bowl when the team he owns is in it.
To put things in perspective, the 30 point drop in the stock is only a 5% fall and the rumors on why their CEO did not do the yapping on the earnings call are running rampant. Look, the rumors are overblown. Yes, Google didn’t do a very good job of giving Wall Street a heads-up but this morning’s sell-off will be met with buying.
Bank of America (BAC, $19.48, up $0.08) and General Electric (GE, $19.50, up $0.15) reported this morning before the opening bell and that has helped futures come up off of their lows after they beat estimates.
Both stocks are flat as we head towards the open with BAC up a few pennies while GE is down a penny.
As we head to press, Dow futures are lower by 23, Nasdaq 100 futures are off by 6 while the S&P 500 futures are down 4.
Tags: bac, Bank of America earnings, GE, GOOG, Google's earnings, option picks, option signals, options alerts, stock options trading
Posted in Earnings, Google, Market Commentary | Comments Off
Thursday, April 15th, 2010
1:10pm (EST)
Trading has been choppy today as the market awaits Google’s (GOOG, $594.85, up $5.85) earnings announcement after the bell. The Dow has seen both sides of the ledger having traded to a high of 11,136 and a low of 11,096. The index is currently down 2 points to 11,120. The S&P 500 is down a point at 1,209 while the Nasdaq is up 6 points to 2,511.
The market will also get some key numbers from Bank of America (BAC, $19.55, up $0.15) and General Electric (GE, $19.60, up $0.25) before the bell on Friday so there is a little case of chicken by both sides to make big bets before this three-headed monster talks to Wall Street.
We believe the the latter two companies will get an “A” on their report cards but Google is the wild card.
Economic news has also weighed on stocks today. For the second straight week, we got a weak employment number as the government said first-time claims for jobless benefits rose by 24,000 to 484,000 last week. Pencil pushers were looking for a drop to 440,000.
The Federal Reserve chimed in this morning and said industrial production rose 0.1% in March versus expectations for a 0.7% pop. Meanwhile, the Philadelphia Federal Reserve said its index of manufacturing conditions rose to 20.2 from 18.9 in March. One-out-of-three normally doesn’t cut it but we have been telling you this market is shaking off bad news and rolling with the punches.
And wouldn’t you know it…One of the talking heads said today, “with M&A action picking up”…referring to Apache (APA, $105.35, down $2.71) buying Mariner Energy (ME, $25.39, up $7.30) today. Didn’t we just talk about this in our morning update?
The warning signs are coming that some unexpected curveball could be coming but we are going to go out on a limb and say the market has a blowout day tomorrow. As many of you know, April options expire on Friday so the action is likely to be intense as bulls and bears battle over key strike prices. If GE, Bank of America and Google can all pull Aces then we could easily see the major indexes add 1%-2% tomorrow.
We are positioned for a move higher with many of our current trades and timing will be crucial on when we take our profits on our positions. We don’t want to be overexposed if there is a pullback but we also don’t want to be underexposed if we get a “blow the roof off the house” type of rally before any pullback or correction.
Subscribers, check the Members Area for the updates.
Tags: APA, bac, GE earnings, GOOG, ME, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Google | 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