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Friday, February 8th, 2013
12:15pm (EST)
We mentioned this week could be flat and that a trading range would develop before next week’s possible push to new highs but today’s current gains have put the bulls in the lead for a weekly gain. Albeit, the gains would be small but a win is a win and it would give the bulls momentum heading into February options expiration week.
BlackBerry Group (BBRY, $16.60, down $0.36), formally known as Research In Motion, is making a run at new 52-week highs following its dip to $12 in late January/ beginning of February. We were hoping for shares to drop below this level to $10 where we were going to recommend the stock for our Weekly Wrap.
We also said we may not get that chance following the dip-and-rip from last week but we thought we would have time to establish position this week on Monday. Nope.
The stock opened at $13.71 and closed at $14.98 on Monday following last Friday’s low of $12.15 and close of $13.03. Shares cleared and held $16 on Tuesday and Wednesday and yesterday’s high was $16.98. Today’s high was $17.22 before the pullback and the 52-week high is $18.32. This is over a 40% pop from last Friday’s lows and we missed a golden opportunity to make some serious cash on the options.
We will have an opportunity to trade BlackBerry again and we will keep watching it for either a call or put option play down the road.
The Casino stocks are getting a lift after New Jersey’s Governor, Chris Christie, has had a change of heart and realizes the potential revenues online gambling could bring to his state. He is open to allow a 10-year trial period for online betting in an effort to help Atlantic City casinos stem years of declining revenues. The one stock benefitting the most today is Caesars Entertainment (CZR, $12.88, $2.81) which is up 28%.
The February 10 calls (CZR130216C00010000, $3.20, up $2.70) are up a whopping 540% today while the March 12.50 calls (CZR130316C00012500, $1.70, up $1.40) are up 467%.
We are in the sector but we didn’t pick Caesars which is a recent IPO. This sector has underperformed the market and we have been saying online poker and gambling could gain traction in 2013.
As far as the market, the Dow is up 51 points to 13,995 and has traded up to 14,022. A close above 14,009 would give the bulls the weekly win. The S&P is up 7 points to 1,517 and fresh 5-year highs while the Nasdaq has barreled through our 3,175 go target and is up 30 points to 3,194. The 52-week high for Tech is 3,196.93 so watch this number into the close.
We have some last minute updates on our current trades before we roll so let’s hit the Members Area. We will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then, have a great weekend everyone.
Posted in Hot Stocks, Market Analysis, Market Commentary, Sectors | Comments Off
Monday, October 1st, 2012
9:00am (EST)
“We came into the week with the market showing a 4% gain for September and we said the indexes were 2%-3% away from our “fluff” targets. With one week left, we were looking for the bulls to get to within 1% of our fluff targets for the month and with October just around the corner the task just got a little harder but still doable.
There could be a flood of “window dressing” to begin the week but the suit-and-ties will need to be careful. We mentioned that many of the pros went on their late August vacations and were hoping for a pullback when they retuned but they never got it. The fund managers who are lagging the market are going to feel pressure to push while the ones showing a negative return will likely get fired.
We have been mentioning the start of 3Q earnings season and we can now begin the countdown. Alcoa (AA, $9.13, down $0.12) will announce earnings in 16 days, or October 10. The market will be closed on October 8 for Columbus Day.
We have already seen a number of high profile earnings warnings so next week will be the week even more companies could start confessing their sins. Next week is also the last week the suit-and-ties can add positions for the quarter, or sell. We have said many of the pros are way behind the market’s returns and they will have a hard time explaining to their clients they didn’t make them any money this year with Tech up 20%.
Of course, you are considered a Wall Street whiz if you can make your clients 8%-10% a year. Although we love our brothers and sisters who play the game with us, we like to shoot for 100% returns a year for our subscribers. We believe we have done that 7x over this year.
Our point is, we do have high expectations for ourselves but making 10% a year is phenomenal in today’s world so we need to remember this if we get into a flat market of there is a pullback.
The only other curveball we see coming could be a Spain bailout but this is already being anticipated and that may or not happen this week. Last week may have been dull and many of the pros are calling for a pullback. There is an old saying that says “never short a dull market” and the bears a few layers of support to crack before they get on track.
We do need to respect the possibility of a pullback because the warning signs are there but all signs are pointing towards a push to new 52-week highs.” (from 9/23/2012 Weekly Wrap/ Monday Morning Outlook)…
The bears started the week of with another win which marked 16-out-of-17 sessions in which the market has started the week lower. The selling pressure picked up on Tuesday on Spain’s impending bailout which caused protests over further austerity measures. It was Greece all over again and it could get worse. The pullback was enough to crack the first wave of support.
The bulls tried to rebound on Wednesday on better-than-expected Housing numbers but prior support quickly became resistance as the market ended lower. We expected some window-dressing to come in on Thursday and once word spread that Spain had announced a detailed timetable for economic reform, the bulls rallied. The indexes fell just short of reclaiming support going into Friday’s action which proved to be resistance.5
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Tuesday, September 18th, 2012
12:35pm (EST)
The market is mixed as we head into the second half of trading. Earnings and economic news have also been mixed with FedEx (FDX, $87.51, down $1.77) disappointing Wall Street on lowered quarterly and 2013 guidance.
FedEx matched expectations for the just ended period after reporting a profit of $1.40 a share on revenue of $10.8 billion but said Q2 earnings would come in at $1.30-$1.45 a share, down from $1.67 a share. For 2013, the company expects earnings to come in at $6.20-$6.60 a share versus estimates for $6.90-$7.40.
The news is obviously weighing on the Dow Transports which needs to hold 5,050 or this rally faces a pullback.
Here was our chart from earlier this month after the Transports tested support:
In economic news, the U.S. Current Account Balance fell 12% to $117 billion while the NAHB Housing Market Index gained 3 points to 40 which is the highest level the index has been since June 2006.
As far as the indexes, the Dow is up 4 points to 13,557 while the S&P 500 is down 2 points to 1,459. The Nasdaq is off 3 points to 3,175.
We have a ton of stuff to cover inside our Members Area including our latest trade recommendation from earlier today. We also have profits to take of 77% on one of our current recommendations. Subscribers, check the Members Area for the updates.
Tags: Dow Transportations, FDX earnings
Posted in Market Analysis, Market Commentary, Sectors | Comments Off
Friday, September 7th, 2012
9:00am (EST)
All Aboard!!! Ha, ha, ha….
We played a classic at the office headquarters this morning to get our day started and there was no introduction needed after the bulls pushed new multi-year and decade highs yesterday. Mario Draghi and the European Central Bank (ECB) said exactly what the market wanted to hear which lead to a bull jailbreak.
The Dow zoomed 245 points, or 1.9%, to close at 13,292. The index easily cleared 13,200 and challenged 13,300-13,350 which is the last line of resistance before new 52-week highs.
The S&P popped 29 points, or 2%, to settle at 1,432. The index went out at its high after clearing our 1,425 target which sets up a run to 1,450. Yesterday’s close was also a 52-week and 4-year high for the S&P.
The Nasdaq soared 67 points, or 2.2%, to finish at 3,135. We mentioned once 3,100 cleared there could be a push to 3,150 which is less than a half-percent away. Tech closed at an 11-year high.
The Russell 2000 added 17 points, or 2%, to end at 838. Here were our thoughts Wednesday morning as we could feel something in the air from Tuesday’s close:
“The big story for the day that the talking heads failed to mention was the Russell 2000 which was up 10 points, or 1.2%, and closed at 822. The move above 820 was super bullish and gets 830 back in play which was last seen on May 1. The small-caps traded to a high of 823.77 after testing 807 in the morning.”
We mentioned in our Weekly Wrap the charts were bullish for this week and that the Wall Street pros could be forced to buy stocks after coming back from vacation if there was a rally to resistance and a flood of buying. Bingo.
Of course, we gave you an early clue on Wednesday there was a strong bid in the market but with everyone all of a sudden rushing to one side of the boat we now have to be careful over the short-term. While there may be a continued rally, yesterday felt a little like a bullish capitulation day and Germany still has to approve the ECB’s plans next week.
Futures are showing a positive open despite a worse-than-expected Nonfarm Payrolls number which we will cover this afternoon. Dow futures are up 22 points to 13,297 while the S&P futures are higher by 3 ticks to 1,434. Nasdaq 100 futures are down a half-point to 2,825.
Subscribers, check the Members Area for the updates.
Tags: option trading strategies, options trading, stock options consultant, stock trading advisors
Posted in European Union (EU), Market Analysis, Market Commentary, Sectors | Comments Off
Wednesday, September 5th, 2012
1:05pm (EST)
Shares of FedEx (FDX, $86.49, down $1.05) are trading lower today after the company warned after the bell on Tuesday that if would miss current estimates for the upcoming quarter. FedEx now expects to post a profit of $1.37-$1.43 versus its earlier forecast for $$1.45-$1.60 a share. Wall Street’s expectations called for $1.56 a share, on average.
There are still some companies reporting earnings for the April-June period which started in July which and can last through mid-September. Usually, companies wait until the back-half of the last month for the current quarter (late March, June, September and December) to announce warnings or earnings misses. FedEx felt it needed to deliver this news right away which means they must not have much faith that revenues will be picking up. Perhaps they will when the holidays roll around.
This was not good news for the Transportation sector or the Dow Transports which we mentioned were coming into the week at crucial levels. Here is the chart we drew up in the sand over the weekend:
Here is what it looks like today:
We said the Dow Transports (and the Financial sector) would have to show some legs to power the next rally and today’s FedEx warning was a slight setback. The stock has bounced off its lows and the above chart shows the bottom channel of support holding for the Dow Transports so these are positive signs. Two more warning signs to add to the bears checklist for a lower market would be FedEx closing below $85 and the DT’s closing below 4,950 somewhere down the road.
As far as the market, rumors are swirling on what the European Central Bank (ECB) will say on Thursday and Friday we get the U.S. Nonfarm payroll numbers. Besides the possible Europe news, Thursday will be a big day for employment numbers as Challenger Jobs Cuts (7:30am), ADP Employment Change (8:15am) and Initial/ Continuing Claims (8:30am) are all due out before the opening bell. At 10am, ISM Services will be announced.
We would expect when we go to press Friday afternoon, the landscape could be totally different in 48 hours with either the bears pushing the next wave of support or the bulls looking at a jailbreak.
Currently, the Dow is 33 points to 13,069 while the S&P 500 is higher by a point to 1,406. The Nasdaq is advancing 4 points to 3,079.
We have much more to talk about inside our Members Area so let’s get to it. We will be back in the morning with our next update but stay ready over the next 2 days for some fireworks.
Tags: ADP Employment Change, Dow Transports, European Central Bank (ECB), FDX options
Posted in Economic News, Financial Stocks, Market Analysis, Market Commentary, Sectors | Comments Off
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S&P 500 at 5-Year Highs
Friday, February 8th, 2013
12:15pm (EST)
We mentioned this week could be flat and that a trading range would develop before next week’s possible push to new highs but today’s current gains have put the bulls in the lead for a weekly gain. Albeit, the gains would be small but a win is a win and it would give the bulls momentum heading into February options expiration week.
BlackBerry Group (BBRY, $16.60, down $0.36), formally known as Research In Motion, is making a run at new 52-week highs following its dip to $12 in late January/ beginning of February. We were hoping for shares to drop below this level to $10 where we were going to recommend the stock for our Weekly Wrap.
We also said we may not get that chance following the dip-and-rip from last week but we thought we would have time to establish position this week on Monday. Nope.
The stock opened at $13.71 and closed at $14.98 on Monday following last Friday’s low of $12.15 and close of $13.03. Shares cleared and held $16 on Tuesday and Wednesday and yesterday’s high was $16.98. Today’s high was $17.22 before the pullback and the 52-week high is $18.32. This is over a 40% pop from last Friday’s lows and we missed a golden opportunity to make some serious cash on the options.
We will have an opportunity to trade BlackBerry again and we will keep watching it for either a call or put option play down the road.
The Casino stocks are getting a lift after New Jersey’s Governor, Chris Christie, has had a change of heart and realizes the potential revenues online gambling could bring to his state. He is open to allow a 10-year trial period for online betting in an effort to help Atlantic City casinos stem years of declining revenues. The one stock benefitting the most today is Caesars Entertainment (CZR, $12.88, $2.81) which is up 28%.
The February 10 calls (CZR130216C00010000, $3.20, up $2.70) are up a whopping 540% today while the March 12.50 calls (CZR130316C00012500, $1.70, up $1.40) are up 467%.
We are in the sector but we didn’t pick Caesars which is a recent IPO. This sector has underperformed the market and we have been saying online poker and gambling could gain traction in 2013.
As far as the market, the Dow is up 51 points to 13,995 and has traded up to 14,022. A close above 14,009 would give the bulls the weekly win. The S&P is up 7 points to 1,517 and fresh 5-year highs while the Nasdaq has barreled through our 3,175 go target and is up 30 points to 3,194. The 52-week high for Tech is 3,196.93 so watch this number into the close.
We have some last minute updates on our current trades before we roll so let’s hit the Members Area. We will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. Until then, have a great weekend everyone.
Posted in Hot Stocks, Market Analysis, Market Commentary, Sectors | Comments Off