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Thursday, December 29th, 2011
12:35pm (EST)
The bulls have gotten off to a good start today following yesterday’s 1% drubbing on semi-inspiring U.S. economic news. Jobless Claims came in under 400,000 at 386,000 but up from last week’s print of 366,000. Wall Street was expecting 379,000. Despite the slight miss, this is the fourth-straight week claims have held under 400K which is considered the break-even level for jobs creation.
Elsewhere, Pending Home Sales were up over 7% as the Index came in at 100.1 for November, its highest level in nearly 20 months. This number can fluctuate because not all sales lead to closings but nonetheless it was a good sign that home buyers are starting to poke around for good deals.
The Dow is up 103 points to 12,254 while the S&P 500 is higher by 10 points to 1,259. The Nasdaq is showing a 19 point pop and is at 2,609.
We would love to see these levels hold and then Dow 12,350; S&P 1,275; and Nasdaq 2,650 on Friday but we also have downside targets we are watching.
There seems to be a split on where the market is headed for January with half the “pros” saying we are in for a bear market while the other half is betting on a bullish breakout. We are more on the bullish side but our portfolio is getting light as we wind down the year and WAIT for the market’s next move. We said this morning to stay light because the trading range could continue if the bulls hold support.
If there isn’t a breakout over the next month or two, and support fails, we aren’t nervous about a market pullback or selloff. We can make just as much profit from buying put options, but the possible trading range we continue to ride doesn’t have to be played unless you are selling options which is a new strategy we may introduce in 2012.
We have been talking about this 2-month range for weeks as we said it could be ongoing. The charts we went over in our video on Monday and in our Weekly Wrap showed the current range we are in and we outlined these “boxes” to give you a clearer picture.
The charts are still bullish and maybe the bulls will need another Bernanke rescue to break through resistance. However, we are keeping our eye to the downside on specific breaking points but until they are triggered, we will sit tight.
Before we go we wanted to remind you of the special we have. Remember, there is also only 2 days left to hit us up on our special offer to get our trading manual and ongoing videos at no cost (an $899 value!). The options course and videos are ongoing and all you have to do is sign-up for a 1-year membership to our Daily newsletter.
We are also including a 1-year Weekly Wrap subscription with your purchase. (Current subscribers, if you recently renewed a 1-year Daily subscription and would like to get this added, please contact us). This newsletter went 16-0 for 2011 and we have a number of trades which could get “called-away” in January. This newsletter recommends solid stocks with high options premiums which act like dividends to produce MONTHLY double-digit gains.
A 1-year membership to the Daily is priced at $924 and the Weekly Wrap 1-year is priced at $599. The trading course, How to Trade Options on Momentum Stocks, is priced at $899. If you go to our subscription page you will see “Annual subscription to Daily and Weekly” for $995, a savings of over 55%! Click on that and we will do the rest.
There aren’t too any option newsletters who can say they have had a good 2011. We can and we have the results to prove it. Our winning percentage will be near 70% for ALL of our trades for 2011 and most fund managers would be happy to be at 52% which means they made money. An exceptional hedge fund manager might average 60% wins on their trades. Obviously, we deserve the right to rub it in but it has been a hard market to trade and a lot of “smart” people were made to look “stupid” and that is not our style.
We try not to gloat because the market can always humble you and the first 7 months were just as hard on us as we were flat coming into August. However, we had an incredible run where we hit on 44 out of 52 trades winning trades which allowed us to coast into year end.
To take advantage, please go to the subscription page. Your discount and trading manual will be applied and shipped with your order and we look forward to another profitable year in 2012!
Subscribers, check the Members Area for the updates and we will be back in the morning with our next outlook.
Tags: options trading course
Posted in Commodities, Company Commentary, Covered Calls, Earnings, Entertainment Stocks, Hot Stocks, IPOs | Comments Off
Friday, December 16th, 2011
1:50pm (EST)
Zynga (ZNGA, $9.87, down $0.13) opened for trading this morning on the Nasdaq stock exchange after pricing shares at the top end of their expected range. The company offered Wall Street 100 million shares at $10 which raised $1 billion with over-allotments of 15 million shares that could bring the deal to $1.15 billion.
The initial public offering (IPO) values Zynga at $7 billion based on the company selling company a little over 10% of its diluted shares.
Early research reports have Zynga’s current user base at over 50 million active customers, which is incredible, but we are a little worried over the average lifespan for Zynga gamers which is only 10 days. We haven’t played “Farmville” because it looks boring but “Mafia Wars” seems to be decent and the company is promising a slew of new games.
The games are free but the company makes bank from users who buy upgrades for them. We find it hard to believe that some Farmers (gamers) spend up to a grand a month to buy pink cows for Farmville. A few Farmville addicts are spending $10,000 a month to play this game. Really?
One interesting tidbit is that the Zynga’s revenue has doubled over the past 9 months but only 5% of sales are coming from advertising. The potential is there to grow this business into something special but we are already hearing some funky accounting practices which have us leery. Competition will only heat up and it will depend on how the company adapts.
One area we can see BOOMING is the online poker industry which Zynga could benefit from if the knuckleheads in Congress ever make it legal here in the states. Zynga Poker could become very, very lucrative which would be the only reason we buy this stock. File this away and if Congress does approve a legal online poker bill in 2012, Zynga will soar on the news. In the meantime, watch it trade and wait for the options to come out. There could be a LEAP trade based on the prediction alone.
As far as the market, the so called “pros” are packing it in for the year as they usually do. Many of the Wall Street traders focus on the holidays and the so called gurus think they deserve the last few weeks off so they tell you the market is heading lower or in this case the Dow will have trouble cracking 12,000 again.
This may be true but we remember the same thing happening last year and we did very well by ignoring the crowd and doing our homework. We had a number of trades that we opened at in December 2010 that did very well into January of this year so here is our point.
Never short a dull market and never give up on the last few weeks of December. Hopefully, we will be able to establish some new positions next week which could be either bullish or bearish because we do feel the Dow is going to make a huge move by mid-January and could be at 12,800-13,000 or 11,000 before Wall Street catches on.
As we head to press, the bulls are trying to hold onto their gains but the bears will probably win the week. The Dow is down 8 points to 11,860 while the S&P 500 is higher by 4 points to 1,220. The Nasdaq is up 14 points to 2,555.
We will be back Sunday night with our Weekly Wrap and please take advantage of our special introductory offer by using this morning’s coupon code. The newsletter should end 2011 with a perfect 16-0 track record. For conservative traders, this newsletter is for you and can be used to produce monthly dividends. Until then, have a great weekend everyone!
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading, ZNGA, Zynga IPO
Posted in IPOs, Market Analysis | Comments Off
Tuesday, December 13th, 2011
1:40pm (EST)
The bulls are trying to power ahead following Monday’s pullback and got off to a good start despite more shaky comments from across the pond. Today’s rhetoric comes from German Chancellor, Angela Merkel, who said he was opposed to increasing the size of Europe’s bailout fund. The current ESM (European Stability Mechanism) has $500 billion euros which isn’t enough to cover Spain and Italy if they were to default. We have mentioned before if the EU can get this to $1 trillion it would do wonders for the market.
Here at home, Retail Sales were no help as they were up only 0.2% versus estimates for growth of 0.5% for November. Retail Sales less autos were also up 0.2% compared with forecasts for a 0.4% rise for the month.
Best Buy (BBY, $24.85, down $3.23) is down 12% after disappointing Wall Street with its quarterly numbers. The company reported a profit of $154 million, or $0.42 a share, versus $217 million, or $0.54 a share, for the year ago period. Revenue came in at $12 billion, up from $11.9 billion, for the same period. The suit-and-ties were looking for $0.52 a share on $12.1 billion.
We thought this could be a turnaround quarter for the company but they haven’t done anything exciting and continue to disappoint. Our chart work from the weekend showed Best Buy nearing resistance and an earnings beat could have gotten shares past $30. However, with the 10-cent miss, shares appear headed to the low $20’s where it still might not be a “Buy”. In other words, the company’s Best days could be over until it reinvents itself.
In IPO news (initial public offerings), Jive Software (JIVE, $15.00, up $0.03) priced 13.4 million shares at $12 and is showing a nice pop in its first day of trading. This is one of the “better” IPO’s coming public this week and, believe it or not, there is already takeover chatter surrounding the company.
Jive has a unique user platform and could be a good fit for IBM (IBM, $193.43, up $1.25), Microsoft (MSFT, $25.99, up $0.48), Oracle (ORCL, $31.32, flat) and SAP (SAP, $56.78, down $0.51), according to one analyst.
Elsewhere, one brokerage firm, Sterne Agee, couldn’t wait for Zynga (Proposed Ticker: ZNGA) to come public. The stock will make its debut on Friday, but they decided to jump the gun and initiated coverage of the stock with an “Underperform” rating. Yikes!
We will keep you updated on some of the other IPO’s coming out this week but we won’t be able to trade options on them until 2012 and they will be expensive. We aren’t sure if these two IPO’s will make our Watch List, but as you can see, analysts have already penciled in different expectations for the companies going forward.
As we continue to churn through this trading range, we are staying patient until we get the “all clear” sign from the bulls, or the bears. The upside resistance targets we have outlined or downside support levels we have gone over will come into play soon.
We will be adding some new option trade candidates to our Watch List tonight as we get ready for our next new batch of trades and we will be listing both call and put options. For those of you just joining us, stay patient as well.
As far as today’s action, the Dow is currently up 77 points to 12,098 while the S&P 500 is higher by a six-pack to 1,242. The Nasdaq is up a deuce to 2,614. Subscribers, check the Members Area for the updates.
Tags: BBY, Best Buy Earnings, IPOs, JIVE, ZNGA
Posted in Earnings, IPOs, 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
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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
Wednesday, November 23rd, 2011
9:00am (EST)
Although it is November, it sure feels like August following the market’s recent slide which stretched to 5-straight sessions following Tuesday’s losses. The bulls did have some momentum going into the second half of trading but lost their edge by the closing bell as worries over the Super Committee’s failure lingered throughout the session. The bears, however, have to be a little disappointed they couldn’t crack support.
The Dow dropped 54 points, or 0.5%, to end at 11,494. The index traded up to 11,571 but couldn’t clear 11,600. Support held at 11,400 with the low coming in at 11,434. The close below 11,500 wasn’t good though and could lead to a further test down to 11,350.
The S&P slipped 5 points, or 0.4%, to finish at 1,188. The bulls couldn’t clear 1,200 while the bears failed to crack 1,175. These two targets will be in play today. If 1,175 fails, we can expect to see 1,150, quickly.
The Nasdaq gave back 2 points, or 0.1%, to settle at 2,521. The dip below 2,500 is either a warning sign or a bottom but we have to respect the fact that 2,499 printed. The bulls will target a finish above 2,550 but there could be further pressure down to 2,450, and possibly 2,350. We currently have a put option in play on the Nasdaq which could do well on further weakness.
In earnings news, Pandora Media (P, $11.85, down $0.67) reported its first quarter as a public company and surprised Wall Street to some degree. The company posted a profit of 2 cents a share on revenue of $75 million. Analysts were looking for a loss of a penny on sales of $71.4 million.
Going forward, Pandora said its sees 4Q revenue of $80-$84 million while analysts have penciled-in $82 million. This made the suit-and-ties a little skittish as shares fell another 4% in after-hours trading last night on top of the 5% they lost during the regular session.
Pandora shares made their debut on the NYSE in mid-June and traded to a high of $26 on the first day of trading before closing at $17. The following day they closed just above $13 and by mid-September they had dipped to a low of $9. It appears to be a promising young company but shares could test single-digits again.
We talked about the market’s recent slide and compared it to what the bulls went through in early August. The recent “correction” could continue for the rest of the week but we are getting so close to a massive rebound or a continued breakdown. With a holiday shortened week, anything can happen, but out bet is the fireworks (volatility) will continue.
The day before and after Thanksgiving are usually bullish but historic patterns haven’t been kind to the bulls for November.
Futures are pointing towards another brutal open. Dow futures are down 115 points while the S&P futures are lower by 11 points. Nasdaq futures are showing a drop of 20 points.
We will be releasing 4 NEW TRADES for our Weekly Wrap this morning shortly after the open so stay alert for an update sometime before noon. Also, we may add another trade to the Daily with one on our Watch List. Call options have been beaten up pretty bad during the market’s recent skid and we see some low-hanging fruit dying to be picked. We also see some put options that could do well if the indexes continue to Tom Petty.
Subscribers, check the Members Area for the updates.
Tags: blue-chip stocks, chicken option trade, chicken trade, momentum, momentum options, option mentoring, stock options trading advisors, straddle option trade
Posted in Earnings, IPOs, Market Analysis, Weekly Wrap | Comments Off
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Bulls Rebound, Trading Range Continues
Thursday, December 29th, 2011
12:35pm (EST)
The bulls have gotten off to a good start today following yesterday’s 1% drubbing on semi-inspiring U.S. economic news. Jobless Claims came in under 400,000 at 386,000 but up from last week’s print of 366,000. Wall Street was expecting 379,000. Despite the slight miss, this is the fourth-straight week claims have held under 400K which is considered the break-even level for jobs creation.
Elsewhere, Pending Home Sales were up over 7% as the Index came in at 100.1 for November, its highest level in nearly 20 months. This number can fluctuate because not all sales lead to closings but nonetheless it was a good sign that home buyers are starting to poke around for good deals.
The Dow is up 103 points to 12,254 while the S&P 500 is higher by 10 points to 1,259. The Nasdaq is showing a 19 point pop and is at 2,609.
We would love to see these levels hold and then Dow 12,350; S&P 1,275; and Nasdaq 2,650 on Friday but we also have downside targets we are watching.
There seems to be a split on where the market is headed for January with half the “pros” saying we are in for a bear market while the other half is betting on a bullish breakout. We are more on the bullish side but our portfolio is getting light as we wind down the year and WAIT for the market’s next move. We said this morning to stay light because the trading range could continue if the bulls hold support.
If there isn’t a breakout over the next month or two, and support fails, we aren’t nervous about a market pullback or selloff. We can make just as much profit from buying put options, but the possible trading range we continue to ride doesn’t have to be played unless you are selling options which is a new strategy we may introduce in 2012.
We have been talking about this 2-month range for weeks as we said it could be ongoing. The charts we went over in our video on Monday and in our Weekly Wrap showed the current range we are in and we outlined these “boxes” to give you a clearer picture.
The charts are still bullish and maybe the bulls will need another Bernanke rescue to break through resistance. However, we are keeping our eye to the downside on specific breaking points but until they are triggered, we will sit tight.
Before we go we wanted to remind you of the special we have. Remember, there is also only 2 days left to hit us up on our special offer to get our trading manual and ongoing videos at no cost (an $899 value!). The options course and videos are ongoing and all you have to do is sign-up for a 1-year membership to our Daily newsletter.
We are also including a 1-year Weekly Wrap subscription with your purchase. (Current subscribers, if you recently renewed a 1-year Daily subscription and would like to get this added, please contact us). This newsletter went 16-0 for 2011 and we have a number of trades which could get “called-away” in January. This newsletter recommends solid stocks with high options premiums which act like dividends to produce MONTHLY double-digit gains.
A 1-year membership to the Daily is priced at $924 and the Weekly Wrap 1-year is priced at $599. The trading course, How to Trade Options on Momentum Stocks, is priced at $899. If you go to our subscription page you will see “Annual subscription to Daily and Weekly” for $995, a savings of over 55%! Click on that and we will do the rest.
There aren’t too any option newsletters who can say they have had a good 2011. We can and we have the results to prove it. Our winning percentage will be near 70% for ALL of our trades for 2011 and most fund managers would be happy to be at 52% which means they made money. An exceptional hedge fund manager might average 60% wins on their trades. Obviously, we deserve the right to rub it in but it has been a hard market to trade and a lot of “smart” people were made to look “stupid” and that is not our style.
We try not to gloat because the market can always humble you and the first 7 months were just as hard on us as we were flat coming into August. However, we had an incredible run where we hit on 44 out of 52 trades winning trades which allowed us to coast into year end.
To take advantage, please go to the subscription page. Your discount and trading manual will be applied and shipped with your order and we look forward to another profitable year in 2012!
Subscribers, check the Members Area for the updates and we will be back in the morning with our next outlook.
Tags: options trading course
Posted in Commodities, Company Commentary, Covered Calls, Earnings, Entertainment Stocks, Hot Stocks, IPOs | Comments Off