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Friday, March 4th, 2011
1:00pm (EST)
We were hoping for a better outcome for the bulls but the way futures were acting, we had a feeling today could be flat or down. We said yesterday we would be happy if the market held at current levels following this morning’s unemployment report but it looks like we are headed for support again.
The one thing we keep mentioning is the current “trading range” and we were hoping for a breakout today. This didn’t happen but we are pleased to see support holding to a degree.
The Dow is down by 164 points to 12,092. We were looking for 12,200 to hold but we also realize 12,000 could come into play again. We would do back flips over the weekend if the index can close over 12,100.
The S&P 500 is lower by 17 points to 1,314 and we were looking for 1,325 to hold. There is additional support at 1,300 but it would be nice to see 1,310 hold.
The Nasdaq is off by 28 points to 2,770. We are watching the 2,750 level as key support but 2,700 could come into play if the down drift gets worse into the closing bell. The index has traded to a low of 2,768.
The good news is that the uptrend is still intact but the market will especially react to oil next week as economic news will be light. The talking heads and pros are telling you to take your chips off the table but they have been wrong all year. But there is risk, weekends are always a risk.
Earnings are still winding down from 4Q and year-end results so oil takes center stage once again. Today, black gold is up another $2 to $104 and appears it is going to push $105. If $110 comes into play next week, things could get shaky.
We are living in a fast-paced world so things could get ugly this weekend or the sun will shine early and peace will prevail in Libya. If that were to happen, oil would fall back to $90 and the market will zoom. If we stay in a trading range for another week that would be okay because we are expecting a huge breakout once the tensions ease in the Middle East.
Before we go we want to take a moment to talk about the Weekly Wrap publication which is gaining momentum and getting a lot of attention and coverage. We have hired a couple of powerful writers and they have nailed a number of great stocks since August. Our Covered Call portfolio for the Weekly Wrap is off to a sweet start. One stock we talk about is Spreadtrum Communications (SPRD, $22.89, up $1.27) which we profiled on February 6. Shares are currently up 6% but have traded to a high of $24.20 today.
Here were some of our thoughts a month ago:
“The company, based in Shanghai, China, is one of the leading designer and provider of baseband semiconductors and RF processor solutions for the wireless communications market. With wireless communications surging in China, the company is expected to do well. Sales predictions for smartphones and tables in 2011 are expected to increase by 22% and 262%, respectively, according to one study. Basebands allow cell phones to send massive amounts of data at high speeds from the phone to the cell tower.” (END)
We included some charts and graphs and had this to say about the stock:
“The graphs and the year-over-year chart seem to predict that they will even meet or beat analysts’ inflated earnings expectations. The quarter-over-quarter chart draws a little concern.
With earnings 25 days away, using their slope and expected earnings meet, we would say shares still have more room to run and could hit $30 over the next six months.” (END)
The company reported earnings today which beat expectations.
We are on track to make 7% in a month if this stock is “called away” from us but we hope we can continue to write calls on it. Our Weekly Wrap finds stocks that are undervalued, or “cheap”, or ones that have momentum and is designed for investors who like a little safety when playing options. Folks, 7% might not sound like much in a month but if you earn 7%-8% a month for a year, you will do extremely well.
We also want to point out this would have been a GREAT earnings trade for those of you who have purchased our option trading course, How to Trade Options on Momentum Stocks. We have done numerous videos on how to do an “earnings option trade” and these types of plays can make you 100% or more in a day…if you a right.
In our trading manual and videos, we show you how to research these types of trades and how to find them. We also show you how to do the math and figure out how much you can make or lose on a trade.
Based on our Weekly Wrap information, you could have bought the Spreadtrum Communications March 24 calls (SPRD110319C00024000, $0.60, flat) yesterday for 60 cents and sold them at the open this morning for $1.20. These are risky strategies of course because you really have to be quick with your trading but you also could have gone out to the April options. There may still be a trade there and it is one we will examine over the weekend for our current subscribers.
We bring this all up because we have a lot of new subscribers and we really want you to have a copy of our option trading manual and access to our ongoing, monthly videos. The option course is priced at $599 but will be included with any 1-year subscription you purchase and is shipped at no charge directly to your doorstep.
We have the cheapest and easiest to understand option trading course on the internet and it is getting rave reviews. It is helping people find their own triple-digit trades and the proof is in the pudding (and our Track Records).
We do not advertize this deal but we continue to get requests for it. We have just printed a fresh batch of copies for the course which includes our Momentum Stocks Watch List. This manual covers dozens of sectors and profiles over 600 companies and what moves these stocks.
Both are great values and we hope you take us up on our offer.
We will be back Sunday night but we still feel we are going to get one more big push to the upside as long as support holds. The final hour of trading should be exciting!
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Oil, Option Trades | Comments Off
Tuesday, March 1st, 2011
1:15pm (EST)
The market has been choppy today after a positive start but is trading at session lows as oil prices move higher. There are other factors in play but oil is up $2, to $99 a barrel, and is approaching the $100 level which is making traders nervous.
Ben Bernanke is doing damage control in front of the Senate Banking Committee and admitted rising oil prices could hurt the economy but said it would take a prolonged increase in oil prices before it would pose a risk to the recovery. He also predicted only a temporary increase in inflation and said he still expected the economy to grow this year.
The Dow is currently down 70 points to 12,156 while the S&P 500 is off by 10 points to 1,317. The Nasdaq is lower by 25 points to 2,757.
Goldman Sachs (GS, $163.00, down $0.78) is taking a PR hit after the SEC filed suit against one of its former Board Members, regarding allegations of insider trading. The SEC also said Las Vegas Sands (LVS, $43.31, down $3.33) has been subpoenaed and is being invested for some shenanigans as well.
The bulls seem to be holding support and we are looking for Dow 12,100; S&P 1,300 and Nasdaq 2,750 to hold today or at least get a bounce higher from current levels.
Before we roll out, we wanted to talk about a recent stock-split that has made one of favorite stocks cheaper. A lot of “pros” say stock-splits don’t mean much except that you have more shares of company as your original investment doesn’t change. While this is true, we disagree to a degree and love the recent Potash (POT, $60.86, down $0.74) 3-for-1 split.
Shares were approaching $200 which made near-term options expensive to trade (we usually like to recommend options for $1.50 and lower) but the high premiums have kept us on the sidelines. We aren’t ready to trade Potash, yet, but it has been a favorite of ours in the past.
We will be back in the morning with our next update. Current subscribers, check the Members Area for the trade updates.
Tags: best option trader, call options, momentum options, Momentum stocks, option signals, option trading, options mentoring, options newsletter, put options, winning option trades
Posted in Market Analysis, Oil, Trading Tips | Comments Off
Monday, February 28th, 2011
1:00pm (EST)
The market continues its rebound from last week’s selloff. A lot of traders took out protection for the weekend and are covering today as oil has stabilized. Economic news has come in better-than-expected and the bulls have used these two catalysts to move the indexes higher.
Oil was down after reports surfaced that oil shipments in Libya have begun again but is off its lows and is slightly positive. News that a tanker bound for China was loading oil in the Libyan port of Tobruk was welcomed relief for the bulls. Additionally, the market learned Saudi Arabia was boosting exports and has reiterated their ability to meet any supply shortfall.
In economic news, Personal Income for January increased by 1%, which was much higher than the 0.3% pop that had been penciled in. Personal Spending during January was up 0.2% versus expectations for a 0.4% increase. Elsewhere, the Chicago PMI reading for February came in at 71.2, up from January’s print of 68.8, and higher than expectations of 67.5.
The Dow is up 80 points to 12,210 and has traded to a high of 12,233. We would love to see a close above 12,200 while support is strong at 12,000.
The S&P 500 is showing a 6 point gain and is 1,326. A close above 1,325 would be money; 1,330 even better.
The Nasdaq is lower by 2 points and is at 2,778. We are looking for a close above 2,800 and the index has traded as high as 2,798 today.
We like today’s action and we would like to see continued strength into the close but the fact that Tech has slipped has us cautious. We will be back in the morning with a full update.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option mentoring, option quotes, option signals, Option Trades, option trading, options broker, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary, Oil | Comments Off
Tuesday, January 4th, 2011
12:20pm (EST)
The market started off in positive territory but has given up most of its gains as we heads towards the second half of trading. There is a lot going on that is causing a little volatility but for the most part, the market is holding up well.
Oil is down $2 to under $90 a barrel but appears to be going to $100 which would be bad for consumers.
Gold is down nearly $40 to $1,383/ ounce, while Silver is off over $1 to just under $30/ ounce.
As a result, the Dow is lower by 3 points to 11,667 while the S&P 500 is down by 5 points to 1,266. The Nasdaq is down 18 points to 2,673.
We have a lot to talk about in our Members Area so we are short on time. We have 2 NEW TRADES opening and we are closing our first profitable trade for 2011. Subscribers, check for the important updates.
We will be back Wednesday morning with a full update.
Tags: Gold prices, momentum options, Momentum stocks, Oil prices
Posted in Gold, Oil | Comments Off
Sunday, July 11th, 2010
2Q Earnings Season Starts On Monday
4:30pm (EST)
The bulls had a stellar week after taking a beating from the bears that pushed them to the brink and had the major averages on the verge of a collapse. The market spent much of Friday near the breakeven line before a late day rally pushed the indexes firmly into positive territory. The rally was impressive and came during a holiday-shortened week and on lighter-than-normal volume. We also saw rallies into the close instead of sell-off’s but can the rally be trusted?
The Dow added 59 points on Friday, or 0.6%, to settle at 10,198. It was the index’s best week so far in 2010 as the Dow popped 511 points, or 5.3%. However, to put things in perspective, the index fell 457 points, or 4.5%, the week before. Here is what we said Friday morning:
“The recent trading range has been 9,800 through 10,600 with 10,200 providing a pivot point. The low was 9,600 set last week. The 500 point rally off the lows has been violent and unpredictable to say the least.”
Folks, when we said volatility would be picking up, we weren’t kidding. The Dow closed just 2 points away from our “pivot point”. The next level the bulls will be eyeing is 10,400 then 10,600 and support will come in at 10,000 and 9,800.
The S&P 500 ended the week with an 8 point gain, or 0.7%, to finish at 1,077. The index was able to tack on 55 points, or 5.4%, for the week after falling 54 points, or 5%, the prior week. We mentioned the 1,075 level would come into play on Friday and we were also 2 points off from nailing the close. Watch for a test of 1,100 to the upside and 1,050 again to the downside.
The Nasdaq had the best showing on Friday, adding 21 points, or 1%, to close at 2,196. Although the 2,200 level acted as slight resistance, we are watching the 2,240-2,250 area to change our bearish sentiment. For the week, the index added nearly 105 points, or 5%, after dropping 130 points, or 6%, the week before.
Turning to black and yellow gold, oil also surged higher throughout the week and ended at $76 per barrel while gold finished at $1,210 an ounce. The rally in oil marked an impressive 5.5% gain for the week - its best weekly finish in nearly six weeks. The gold bugs got excited when the commodity dipped below the $1,200 level which garnered some buying but added just 0.2% for the week, overall.
The VIX fell to 24.98, down 0.73, or 2.8%, and closed below 25 for the first time since June 21. The euro, which we are watching like a hawk, has seen a powerful rally over the past month and is at $1.264 versus the dollar. We have the CurrencyShares Euro Trust (FXE, $126.00, down $0.50) on our Watch List and said $1.27 should act as resistance.
To make a long story short, the market was due for a bounce and we only mention these key levels to put things in perspective for you. It is important to try and keep track of where support and resistance is because it often gives you a clue of future direction. We not only do this with the major indexes but we do it with all of our trades.
As long as the picture or story hasn’t change, then it makes it easier to stick to your game plan. We warned last week that we could get a “dead-cat bounce” or a “relief rally” because the sentiment had become a little too negative although well deserved.
We still feel like any rallies should be sold and the upcoming earnings season will likely set the stage for the market’s next move. We are hoping to break out of this recent range and we could care less which way the market is headed but we are preparing for another leg lower.
Here is at look at some of the big names set to report second-quarter earnings this week:
Alcoa (AA, $10.94, up $0.22) after the close on Monday and Intel (INTC, $20.24, up $0.14) on Tuesday. Thursday we get a look at Google (GOOG, $467.49, up $10.93) and JPMorgan Chase (JPM, $38.85, up $0.69) while Friday brings Bank of America (BAC, $15.11, up $0.25) and General Electric’s (GE, $14.95, up $0.12) numbers.
As far as pre-announcements, we thought we might see more as only 150 companies gave Wall Street a heads-up on the upcoming quarter. The S&P 500 had a little over a 100 of the names which means roughly 20% gave guidance updates. To put things in perspective, there were twice as many 10 years ago.
The underperformance in a few sectors have caused analysts to lower estimates going into the quarter and some companies will look golden when they report. The key will be what wording they use going forward.
We are looking for another volatile week and the bulls have a little momentum they are using to push the market higher. We think the bears will also show up as we don’t think things will be as one-sided as they have been over the past two weeks. Either way, the rest of the summer will be interesting and don’t forget the July options expire THIS Friday.
We are currently looking at new trades that span August, September and maybe even December call and put options. We are likely to pull the trigger on a few recommendations this week so stay locked and loaded as the wave of news begins to flood Wall Street.
Tags: call options, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Oil, VIX, Watch Lists | Comments Off
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Market Higher as Bulls Bounce Back
Monday, February 28th, 2011
1:00pm (EST)
The market continues its rebound from last week’s selloff. A lot of traders took out protection for the weekend and are covering today as oil has stabilized. Economic news has come in better-than-expected and the bulls have used these two catalysts to move the indexes higher.
Oil was down after reports surfaced that oil shipments in Libya have begun again but is off its lows and is slightly positive. News that a tanker bound for China was loading oil in the Libyan port of Tobruk was welcomed relief for the bulls. Additionally, the market learned Saudi Arabia was boosting exports and has reiterated their ability to meet any supply shortfall.
In economic news, Personal Income for January increased by 1%, which was much higher than the 0.3% pop that had been penciled in. Personal Spending during January was up 0.2% versus expectations for a 0.4% increase. Elsewhere, the Chicago PMI reading for February came in at 71.2, up from January’s print of 68.8, and higher than expectations of 67.5.
The Dow is up 80 points to 12,210 and has traded to a high of 12,233. We would love to see a close above 12,200 while support is strong at 12,000.
The S&P 500 is showing a 6 point gain and is 1,326. A close above 1,325 would be money; 1,330 even better.
The Nasdaq is lower by 2 points and is at 2,778. We are looking for a close above 2,800 and the index has traded as high as 2,798 today.
We like today’s action and we would like to see continued strength into the close but the fact that Tech has slipped has us cautious. We will be back in the morning with a full update.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option mentoring, option quotes, option signals, Option Trades, option trading, options broker, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary, Oil | Comments Off