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Wednesday, February 1st, 2012
9:00am (EST)
After an initial pop at the open, the market matched Monday’s action by testing support and spending the rest of Tuesday’s session trying to get back to even. Following a 3-week rally to start the year, a short-term trading range has developed over the past week-and-a-half which could be decided by Friday. Economic news, and earnings, could help or hinder both the bears and bulls as we continue to wait patiently for a breakout or breakdown.
The Dow declined 21 points, or 0.2%, to close at 12,632. The blue-chips reached a high of 12,720 at the open but also fell to a low 12,567 on the weaker-than-expected economic news.
The S&P 500 slipped a point, or 0.1%, to settle at 1,312. The index traded up to 1,321 within the first 30 minutes of action but had dropped to 1,306 by lunchtime.
The Nasdaq edged higher by 2 points, or 0.1%, to end at 2,814. Tech reached a peak of 2,826 at the start of trading but slipped to a low of 2,798 intraday.
Amazon.com (AMZN, $194.44, up $2.29) announced their numbers after the close last night, but unlike Apple (AAPL, $456.26, up $3.25), they failed to crush Wall Street’s estimates and actually came up a little short.
The company posted a profit of $177 million, or 38 cents a share, on revenue of $17.4 billion. The suit-and-ties were looking for 17 cents a share on sales of $18.25 billion.
Looking ahead, Amazon also came in a little light on their forecast for the current quarter after predicting revenues in a range of $12-$13.4 billion versus expectations for $13.4 billion.
Shares were whacked in after-hours trading last night after dropping $17 to $177, or down 9%. This morning, in pre-market action, shares are at $175, down $19.
As we head to press, Dow futures are up 81 points to 12,658 while the S&P 500 futures are higher by 8 points to 1,316. The Nasdaq futures are off by 11 points to 2,475.
We have a lot to cover this morning, including some chart work for one of our current trades so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: AAPL, AMZN, AMZN earnings
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off
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.
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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
Tuesday, January 31st, 2012
9:00am (EST)
The bears were throwing a lot of chips into the pot on Monday as they tried to up the ante on a possible Greece, and soon to be Portugal, debt default. The bulls took all day to call but by the end of the session they matched the bet as the market finished flat.
Given the plunge of 1% at the open, it was a victory for the bulls as they held support and nearly pulled off a great comeback by the closing bell. We had a sly grin on our face when we read where one Wall Streeter, who was head honcho for the firm’s “equity division”, said the U.S. appears to be “slowly, slowly in the early stages of decoupling from the eurozone.”
Duh…We told our subscribers this back in early December, Gus. Of course, we would never name names but where has this guy been? We were hoping to see a lift once the European markets closed, which happens at 11:30am (EST) our time, and the late rally back to even got legs once buyers stepped in after lunch.
The Dow fell a half-dozen points, or 0.1%, to finish at 12,653. The blue-chips traded to a low of 12,529 at the open but came within a point of cracking positive territory. We mentioned support yesterday and 12,550 was the test for much of the morning which we said to watch for. Upside resistance remains at 12,800.
The S&P slipped 3 points, or 0.3%, to end at 1,313. The index traded to a low of 1,300.49 but held support and came within spitting distance (0.17 points) of hitting green. Watch the same levels as yesterday for today.
The Nasdaq declined 4 points, or 0.2%, to settle at 2,811. We talked about some of Tech’s strength yesterday and the index actually managed a trip into positive territory (0.30 points) before the closing bell.
Today is the end of the month and January has been good to us as the indexes are showing some fat gains for the year. The Dow is up nearly 4%, the S&P is up nearly 5%, and the Nasdaq and Russell 2000 are showing 8% pops to start 2012.
The talking heads were being Negative Nancy’s yesterday and were shocked to see the turnaround but don’t be surprised to see them mention the “January Barometer” today. The indicator has a history of being fairly accurate and goes by the theory that when the month of January is higher, the market will end higher for the year. If negative, the indexes usually post a decline.
Unless the wheels fall off the bull wagon today, the bulls will likely appreciate the following facts since the 50’s. If the Dow ends January higher, the blue-chips have over an 80% chance of finishing higher for the year with additional gains of nearly 10%, on average. Wow, let’s hope so, right?
Of course, there is a ton of time between now and Christmas and we don’t expect this smooth of a ride all year long.
Subscribers, please hit the Members Area to get the trade updates and stay on your toes on a possible way to play Facebook, which could announce its IPO on Wednesday. We have 2 trades on our Watch List that could do well and we are in the office huddle deciding on if we should make one or both official recommendations or not. We want to see how shares open but the options pits were exploding on these names yesterday. Stay locked-and-loaded and look for a possible New Trade Alert shortly after the open if we take action.
As we head to press, futures look like this: Dow (+54), S&P (+6), Nasdaq (+10).
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
Posted in Market Analysis, Market Commentary | Comments Off
Monday, January 30th, 2012
1:40pm (EST)
Futures were weak throughout the night and worsened as the market headed towards the opening bell this morning. Much of the weakness can be blamed on Greece’s failure to come to an agreement on how to address their budget deficits which is dragging into the week after rumors persisted a deal was close over the weekend.
We talked about some of the issues that need to be addressed and that the main holdup seems to be Germany which wants to control the tax and spending decisions for the country. This has created a difficult environment and the market doesn’t like uncertainty.
Economic news here at home has come in ahead of expectations which have helped the bulls hold support. Personal Income rose 0.5% in December versus forecasts for an increase of 0.4%. Personal Spending was unchanged while expectations were for an increase of 0.1%. And finally, the Dallas Fed Manufacturing Index posted a reading of 15.3 which was higher than forecasts.
Although the bears are dominating today’s action, there’s some strength in certain stocks which is a good sign.
The Dow is down 66 points to 12,594 after falling through the 12,600 level. We said the first wave of support would come at 12,600-12,550 and the low today has been 12,529.
The S&P is lower by 7 points to 1,309 and has tested the 1,300 level while the Nasdaq is off by 8 points to 2,808.
Some stocks showing strength include Apple (AAPL, $452.11, up $4.83), Microsoft (MSFT, $29.43, up $0.20) and International Business Machines (IBM, $191.26, up $0.80) which is letting us know the bulls have backup.
The bears will likely do some damage today but the last few days in January and the first couple in February are normally pretty bullish so let’s see what happens. Most of our trades are holding up well despite today’s weakness so let’s go see where we are at. 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 Economic News, Market Analysis | Comments Off
Monday, January 30th, 2012
9:00am (EST)
Picking a market top or market bottom is never easy because charts can only help so much. As an option trader, we must deal with time expiration so we have to be right within a certain time frame. We also have to factor in the global markets, cross-current tensions, interest rates, defaults, saber rattling, and other headline risks. However, when all of those factors work in your favor, you can have an incredible ride.
We were probably the only newsletter which called for the Dow to challenge 13,000 back in November. Now that we are here, picking the next trend is a little more difficult because there are a new set of circumstances. The market knows where it will be in 6 months. We don’t and neither do the pros but we have called this one right once the indexes broke out of their trading range 4 months ago.
Trading ranges can last weeks or months and we must now figure out what February and March will bring but the trend is still up and we have outlined support levels to watch on the way down. We have said we expect a pullback in February (which starts Wednesday) but last week’s Fed announcement could have been a wildcard for the bulls.
Sure, at some point, the market will get a pullback. The suit-and-ties and talking heads have been calling for one all month, but the trend is still up and there are a lot of support layers the bears will have to crack to change that. The market didn’t set new 52-week highs, yet, but the bulls came close. We also like to call the overshoot to the upside the “fluff” and it’s quite possible if the bulls continue with their momentum, the market will hit our upper-end targets before the pullback. Either way, we are enjoying the ride and we have our seatbelts fastened.
The Dow fell 74 points, or 0.6%, to settle at 12,660 on Friday. The blue-chips tested a low of 12,630 midday but held short-term support at 12,600 which had been prior resistance…
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Tags: blue-chip stocks, chicken option trade, chicken trade, momentum, momentum options, option mentoring, stock options trading, straddle option trade
Posted in Market Analysis, Market Commentary | Comments Off
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Amazon.com (AMZN) Reports Mixed Results, Lowers Guidance
Wednesday, February 1st, 2012
9:00am (EST)
After an initial pop at the open, the market matched Monday’s action by testing support and spending the rest of Tuesday’s session trying to get back to even. Following a 3-week rally to start the year, a short-term trading range has developed over the past week-and-a-half which could be decided by Friday. Economic news, and earnings, could help or hinder both the bears and bulls as we continue to wait patiently for a breakout or breakdown.
The Dow declined 21 points, or 0.2%, to close at 12,632. The blue-chips reached a high of 12,720 at the open but also fell to a low 12,567 on the weaker-than-expected economic news.
The S&P 500 slipped a point, or 0.1%, to settle at 1,312. The index traded up to 1,321 within the first 30 minutes of action but had dropped to 1,306 by lunchtime.
The Nasdaq edged higher by 2 points, or 0.1%, to end at 2,814. Tech reached a peak of 2,826 at the start of trading but slipped to a low of 2,798 intraday.
Amazon.com (AMZN, $194.44, up $2.29) announced their numbers after the close last night, but unlike Apple (AAPL, $456.26, up $3.25), they failed to crush Wall Street’s estimates and actually came up a little short.
The company posted a profit of $177 million, or 38 cents a share, on revenue of $17.4 billion. The suit-and-ties were looking for 17 cents a share on sales of $18.25 billion.
Looking ahead, Amazon also came in a little light on their forecast for the current quarter after predicting revenues in a range of $12-$13.4 billion versus expectations for $13.4 billion.
Shares were whacked in after-hours trading last night after dropping $17 to $177, or down 9%. This morning, in pre-market action, shares are at $175, down $19.
As we head to press, Dow futures are up 81 points to 12,658 while the S&P 500 futures are higher by 8 points to 1,316. The Nasdaq futures are off by 11 points to 2,475.
We have a lot to cover this morning, including some chart work for one of our current trades so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: AAPL, AMZN, AMZN earnings
Posted in Apple, Earnings, Market Analysis, Market Commentary | Comments Off