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Tuesday, February 9th, 2010
1:10pm (EST)
Forget the bulls and bears it’s all about the PIGS today.
The market got a huge lift this morning after Wall Street became hopeful that Robin Hood would be helping the Greek debt situation. There is a report that the “euro zone” countries have decided in principle to help debt-stricken Greece and there is news that Portugal hired Barclays and Goldman Sachs (GS, $152.85, up $1.76) to help it sell bonds.
Greece’s finance minister said he cannot call for outside aid, as doing so would send a negative signal to bond buyers, and this will not be a bailout. Still, this has been a dark cloud over the market and it may have been the bulls wild card.
Shares of National Bank of Greece (NBG, $4.10, up $0.68) have rallied 20% on the news but it would be a hard stock to trust.
At a result, the Dow is up 211 points, or 2.2%, to 10,120 while the S&P 500 is higher by 21, or 2.0%, and is at 1,077. The Nasdaq is lagging but is still enjoying a 37 point pop and stands at 2,162.
In economic news, the Commerce Department reported that wholesale inventories were lower by 0.8% in December compared to an expectation that inventories would rise by 0.5% during the month.
Caterpillar (CAT, $53.93, up $3.15) is one of the Dow components that is fueling this huge rally. The stock is up over 6% after an analyst upgrade. Coca-Cola (KO, $54.86, up $2.21) was up 4% after reporting better than expected earnings as revenues benefited from emerging market growth.
Tags: CAT, Goldman Sachs, KO, National Bank of Greece, NBG, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Hot Stocks, Option Trades, Sectors, Stock Earnings | Comments Off
Sunday, January 24th, 2010
10:00pm (EST)
The market continued its sell-off on Friday as the Dow dropped another 216 points to close at 10,172. The bears woke up on Wednesday from a long rest and have caused panic and fear for some investors. The Dow’s 550 point drop in 3 days marked its worst week since March 2008.
Perhaps the biggest bomb was dropped by the President who seems to have a personal vendetta against the financial companies. We kept quiet on the subject but we really think Washington is picking the wrong battles. Instead, they should concentrate on “shovel-ready” projects that will bring unemployment back below 10%.
The market’s decline has been broad-based and Friday’s drop can be attributed to Ben Bernanke not possibly getting a second term as Fed chairman. His gig expires at the end of the month and now there is serious doubt he gets the 60 votes he needs.
The S&P 500 fell 25 points and closed at 1,091 while the Nasdaq tanked 60 points, or 2.7%, to finish at 2,205.
A week ago right here in this space we said there was chance we get a 5%-10% and we got the 5%. We still think there is some weakness in the market but we are expecting one last rally by the bulls.
As we head to press the futures have turned around as the overseas markets get ready to trade in a few hours. Dow futures are up 42 points, the S&P 500 and Nasdaq futures are up 6. The heart of earnings season will hit this week and if you look at the list below there will be some action (quotes are from Friday’s close):
Monday: (Before the bell) AK Steel Holding (AKS, $20.19, down $1.03), Eaton (ETN, $65.88, down $0.86), Halliburton (HAL, $31.15, down $1.38)
(After the bell) Amgen (AMGN, $56.60, down $0.03), Apple (AAPL, $197.75, down $10.32), Jacobs Engineering (JEC, $39.66, down $0.24), VMware (VMW, $41.58, down $2.36)
Tuesday: (Before the bell) Baker Hughes (BHI, $44.27, down $2.36), Corning (GLW, $18.56, down $1.05), DuPont (DD, $32.50, down $0.65), Johnson & Johnson (JNJ, $63.20, down $0.77), Peabody Energy (BTU, $45.10, down $0.60), Sherwin-Williams (SHW, $58.00, down $0.61), Travelers Companies (TRV, $48.31, down $0.64), Wynn Resorts (WYNN, $63.95, down $1.42)
(After the bell) Callaway Golf (ELY, $8.25, down $0.10), DeVry (DV, $56.88, up $0.42), Gilead Sciences (GILD, $46.08, up $0.30), QLogic (QLGC, $19.19, down $0.50), Yahoo (YHOO, $15.88, down $0.32)
Wednesday: (Before the bell) Abbott Laboratories (ABT, $54.51, down $1.05), BlackRock (BLK, $225.00, down $5.24), ConocoPhillips (COP, $50.60, down $1.64), Piper Jaffray (PJC, $46.20, down $1.80), Valero Energy (VLO, $18.18, down $0.72)
(After the bell) Green Mountain Coffee Roasters (GMCR, $81.16, up $1.24), Harris (HRS, $45.78, down $1.46), Qualcomm (QCOM, $46.78, down $1.31), WellPoint (WLP, $65.10, down $0.40)
Thursday: (Before the bell) 3M Company (MMM, $81.48, down $1.22), Altria Group (MO, $19.71, down $0.18), AT&T (T, $25.39, down $0.28), Colgate-Palmolive (CL, $80.71, up $1.64), Eli Lilly (LLY, $35.52, down $0.59), Ford Motor (F, $10.52, down $0.66), Lockheed Martin (LMT, $75.58, down $1.40), Nokia (NOK, $12.72, down $0.18), Potash (POT, $109.05, down $3.59), Time Warner Cable (TWC, $43.84, down $1.04), Under Armour (UA, $26.63, down $0.71)
(After the bell) Amazon.com (AMZN, $121.43, down $5.19), Genworth Financial (GNW, $12.41, down $0.49), Juniper Networks (JNPR, $24.95, down $1.17), Microsoft (MSFT, $28.96, down $1.05), Rambus (RMBS, $24.74, up $0.72), SanDisk (SNDK, $28.39, down $0.97), Stanley (SXE, $27.74, up $0.14)
Friday: (Before the bell) Arch Coal (ACI, $24.80, down $0.51), Honeywell (HON, $39.88, down $0.85), Mattel (MAT, $19.95, down $0.63)
(After the bell) Horizon Lines (HRZ, $6.17, down $0.03)
This will be an important week for the bulls and we don’t expect them to go away quietly. We said back in December there could be an “epic battle” between the two sides and so far we have been dead-on with our market analysis. We have used caution to establish some long-termer term option plays and we have some insurance in our portfolio for protection.
If the market does continue lower there will be some incredible opportunities to buy put options on stocks that are overbought. Some of the high-flying stocks have already been clipped and there is plenty of downside to go if they are going to correct.
We will be back in the AM with the trade updates and the morning outlook.
Tags: option picks, option signals, options alerts, stock options trading
Posted in Earnings, Sectors, Stock Earnings, Strategies, Trading Psychology, Weekly Wrap | Comments Off
Friday, January 15th, 2010
9:00am (EST)
Intel (INTC, $21.48, up $0.52) blew past Wall Street’s forecast after the bell yesterday and reported some impressive numbers.
The company said it earned a profit of $2.3 billion, or $0.40/ share versus $234 million, or $0.04, in the year earlier period. Revenue climbed nearly 30% to $10.6 billion as Intel posted its highest gross profit margins ever, at 65%. Amazing.
The market finished higher on Thursday as the Dow closed with a 30 point gain at 10,710. The S&P 500 added 3 points and settled at 1,148 while the Nasdaq edged up 9 to 2,310.
For those of you who have been following us since the summer, we set targets for the market back in August that are about to be hit. Last Sunday we had this to say:
“The Dow added 11 points on Friday and 190 for the week to close at 10,618. Our near-term target remains 10,800 and this could be the week we take it down.
The S&P 500 gained 3 points to close at 1,145 and for the week the index added 30. In August, we set our target at 1,175 so we are within spitting distance…
As far as the Nasdaq, we clearly saw the strength in Tech back in the summer and set a year-end 2009 target of 2,275 for the index. That level was taken out before Christmas. On Friday, the Nasdaq displayed its muscle once again and had the biggest percentage gain as it added 17 points to close at 2,317.
We remain bullish and our portfolio has consisted of mainly call options since March 2009. We have added put options as “insurance” along the way but we still feel like the market moves higher from here. Of course, once our targets are hit that could all change but the beauty of getting a pulse on the market is that it allows you to change accordingly.
If and when we reach those aforementioned targets, we either, continue higher, stay flat, or retreat to lower levels. The cards to figuring out the next six months on where the market could be headed are being dealt right now. A lot of investors and traders will be ready to pay the ”big blind” this week as 4Q corporate earnings start to come in. We will go over this more on Monday morning.” (END)
Folks, it is important to know where the market is headed because once it gets in a groove, trading becomes easier. If and when we reach Dow 10,800 and 1,175 for the S&P we honestly don’t know what happens next. However, our gut is telling us the market continues higher but we have to wait for the clues to confirm our thesis.
Nobody knows what the market will do from day-to-day but overall the information is out there. There are times when trading options can get choppy but they key is not to “over trade” your accounts.
We talk about this in our Welcome Guide which is at the top of the Members Area page. Obviously, everyone wants to score the big trade but this gig is like all others…you have to grind it out. And you can’t blow up a $2,000 account by buying 10 or 20 contracts with your first trade. Try limiting your portfolio to 3%-5% per trade. In other words, if you buy 10 contracts for each of our trades then you should have a $20,000 account. If you have $10,000 then trade 5 contracts.
Our trades target $500-$2,000 if you are doing 10 contracts as we profile options anywhere from 50 cents to $2.00. Obviously, if you are new to trading or you are starting small then go slow and paper trade with us for a while. And remember, any money you trade options with should be considered “aggressive” and this type of trading is not for everyone.
Options are the most lucrative way to grow a trading account and remember everyone’s results will be different based on your own expectations and risk levels. Also, you will have winning and losing streaks but the goal is to make a 100% return on each trade. This allows you the luxury of having 2 losing trades at 50% if all things are equal. They key is to hit the 400%, 800% and 2,000% trades which we have.
Our documented track records show we have over a 70% winning percentage for the past couple of years so keep this in mind if you join us for a month and start off with a negative trade. For 2010 our track record shows we have closed trades for gains of 13%, 90%, 119%, and 150%. We still have open trades and once we get a few more closed we will start posting the 2010 track record at the end of the month.
This week has been pretty volatile due to options expiration and today is not historically a good one for the Dow. The index has traded lower on 9 of the last 11 January option cycles with some major hits of 1%-2% lower.
As we head to press, Dow futures are down 25; S&P 500 futures are lower by 4; Nasdaq futures down 4.5.
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial investment, funds, future option trading, futures trading, gold investing, hedge fund, hedge funds, how to invest, index funds, index options, invest, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Money Management, Stock Earnings, Strategies, Trading Psychology, Trading Tips | Comments Off
Sunday, January 10th, 2010
11:00pm (EST)
The bulls won the first week of 2010 as they took the market higher despite a weak unemployment report on Friday. The Labor Department said employers slashed 85,000 jobs in December while Wall Street had forecast a slight decline of 8,000 job losses.
The one silver lining was the government revised November’s unemployment figures to a gain of 4,000 jobs, marking the first monthly increase in almost two years. Although the unemployment rate remained at 10% last month, the bulls managed to blow off the report and finish the week on a high note.
All three indexes posted gains for the day and for the week which could mean good news if you believe in market history. Usually if the Dow is up in the first week of January it leads to a good month and year so goes the theory.
The Dow added 11 points on Friday and 190 for the week to close at 10,618. Our near-term target remains 10,800 and this could be the week we take it down.
The S&P 500 gained 3 points to close at 1,145 and for the week the index added 30. In August, we set our target at 1,175 so we are within spitting distance…
As far as the Nasdaq, we clearly saw the strength in Tech back in the summer and set a year-end 2009 target of 2,275 for the index. That level was taken out before Christmas. On Friday, the Nasdaq displayed its muscle once again and had the biggest percentage gain as it added 17 points to close at 2,317.
We remain bullish and our portfolio has consisted of mainly call options since March 2009. We have added put options as “insurance” along the way but we still feel like the market moves higher from here. Of course, once our targets are hit that could all change but the beauty of getting a pulse on the market is that it allows you to change accordingly.
If and when we reach those aforementioned targets, we either, continue higher, stay flat, or retreat to lower levels. The cards to figuring out the next six months on where the market could be headed are being dealt right now. A lot of investors and traders will be ready to pay the ”big blind” this week as 4Q corporate earnings start to come in. We will go over this more on Monday morning.
There is one stock we wanted to cover again tonight before we sign-off…
We have mentioned OSI Systems (OSIS, $31.64, up $2.75) a lot lately and we should have already been in this trade to be honest. Sometimes there are trades that just stare you in the face and they have to slap you to get your attention.
Well, OSI is punching us in the gut and we are gasping for air.
The alleged failed boxer bomber has heated up the talk of faster deployment of full-body-imaging machines at airports around the world. Talk about blowing up the family jewels…Our thoughts from December 31st (quotes are from that day):
“OSI Systems (OSIS, $27.46, up $2.40) is up 10% as investors rushed into the stock starting on Monday. The company makes these “body scanners” that could be used in airports that would allow tighter, faster security and the machines are selling for $150,000 a pop. Needless to say, the market is enormous and some people think they should be in every airport in every city RIGHT NOW.
The shares have rallied following last weekend’s failed terrorism attack and last Thursday they closed at $22. On Monday morning they opened at $23.04 and hit a high of $24.97. Usually these types of trades fade but we underestimated this story and it cost us a sweet call option trade.
Yesterday, the OSIS January 25 calls (UOJAE, $2.95) easily doubled and were under $1 on Monday. OSIS and others have been put on our short-term Watch List. (END)
Folks, the January 25 calls are now at $6.60! The January 30 calls (UOJAF, $2.10, up $1.55) soared a whopping 280% on Friday after opening at 95 cents.
Despite reservations from Congress, privacy advocates and airlines we think this movement has legs and we will take a look at a possible option trade in this one on Monday morning before the bell. We will also have an update on all of our current trades which will be on the move this week.
As we head to press, Dow futures are showing strong gains as they are up 36 to 10,602. S&P 500 futures are up 5 to 1,146 while the Nasdaq futures are higher by 8. The first trading day of “January Expiration Week” is usually bullish, which is one reason we left most of our option trades open.
Also, we have been seeing higher closes on Friday’s followed by solid Monday’s which leads us to believe the bulls are fully committed to taking the market higher.
One important factor on if the market is at a top or continues higher will come on Friday. January options will expire and over the past decade this has been a terrible day for the market. If the bulls can lift this curse then we could be off to the races again.
Portfolio Update: Our 2010 portfolio track record is posted in our Members Area and had been updated as of Friday’s close. There are 3 closed trades with two of them showing triple-digit gains; A123 Systems (AONE, $21.51, down $0.65) is profiled showing our subscribers banked a 119% gain; a 90% profit in Imax (IMAX, $14.13, down $0.29); and a 150% return in Green Mountain Coffee Roasters (GMCR, $81.85, up $0.27).
We still have 6 open trades but some will be closed for double-digits gains while we roll new trades in. That is what we love most about the market…there is always a trade.
The 2010 portfolio is viewable in the Members Area at the bottom of the page. We will start releasing the closed trade results to the public at the end of the month and they will be updated as we close them out but we wanted to give you a sneak peak before then.
We will be busy all week and will be back in the morning with the playbook. If you are not yet a subscriber you can still catch all of the action before the opening bell if you signup now!
See you in the AM…
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Market Commentary, Option Trades, Stock Earnings, Strategies, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off
Tuesday, December 8th, 2009
9:10am (EST)
The market struggled with direction yesterday and ended mixed as both the bulls and bears seemed content staying on the sidelines. There wasn’t a whole lot of news to get either side excited as Ben Bernanke’s speech was the highlight of the day.
We had mentioned Big Ben was making a cameo at the Economic Club of Washington D.C. and he indicated that the FOMC is looking to keep interest rates low for an extended period of time. Bernanke comments were consistent with the Fed’s previous statements, and it helped ease concerns that the Fed would raise rates after a better-than-expected November jobs number on Friday.
As a result, the Dow managed to squeeze out a one-point gain and closed at 10,390 after hitting a high of 10,443. The S&P 500 finished with a 2 point loss and closed at 1,103 while the Nasdaq fell 5 points and settled at 2,189.
We had mentioned that our near-term targets were Dow 10,800, Nasdaq 2,275 and for the S&P 500 we have 1,150 penciled in.
Over the past few weeks, the market has been unable to extend its recent highs and seems to be “rolling over” once we bump up near these resistance levels. This morning isn’t helping as the futures are significantly lower as we head towards the opening bell.
Dow futures are down 79 to 10,312, Nasdaq futures are off 14 to 1,770 while the S&P 500 futures are lower by 9 to 1,095.
AutoZone (AZO, $153.36, up $1.28) said 1Q profit nearly 10%, as consumers spent more on repairs for their old cars rather than buying new ones.
The company earned $143 million, or $2.82 a share, versus $131 million, or $2.23 a share, in the same period last year. Wall Street was expecting $2.66 a share. Revenue came in at $1.6 billion or right in line with expectations. Shares are showing an “ask” of $154.30 in pre-market trading.
Celgene (CELG, $55.53) is taking a hit this morning after saying it would buy privately held Gloucester Pharmaceuticals for $640 million. The deal includes $340 million upfront and $300 million in future milestone payments. Gloucester has a sweet pipeline and the deal gives Celgene access to some potentially powerful cancer drugs.
As the case with most buyouts, Celgene is lower in pre-market trading after announcing the merger. The stock is down $2.53, to $53.00 ahead of the bell. From the charts, Celgene recently broke out from its October resistance of $56.50 and looked headed towards challenging its 52-week high of $58. We may use today’s weakness to establish a small position in some latter month call options…
Current subscribers can check the Members Area for the trades updates…
Tags: AutoZone, call option trading, Celegene, chicken option trades, Covered Calls, momentum stock option trading, option trade picks, option trading online, options blog, options mentoring, options newsletters, options track record, put option trading, Rick Rouse, stock option trade pick service, straddle option trades, strangle option trades, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Market Analysis, Market Commentary, Option Trades, Stock Earnings | Comments Off
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Greece Getting A Gift
Tuesday, February 9th, 2010
1:10pm (EST)
Forget the bulls and bears it’s all about the PIGS today.
The market got a huge lift this morning after Wall Street became hopeful that Robin Hood would be helping the Greek debt situation. There is a report that the “euro zone” countries have decided in principle to help debt-stricken Greece and there is news that Portugal hired Barclays and Goldman Sachs (GS, $152.85, up $1.76) to help it sell bonds.
Greece’s finance minister said he cannot call for outside aid, as doing so would send a negative signal to bond buyers, and this will not be a bailout. Still, this has been a dark cloud over the market and it may have been the bulls wild card.
Shares of National Bank of Greece (NBG, $4.10, up $0.68) have rallied 20% on the news but it would be a hard stock to trust.
At a result, the Dow is up 211 points, or 2.2%, to 10,120 while the S&P 500 is higher by 21, or 2.0%, and is at 1,077. The Nasdaq is lagging but is still enjoying a 37 point pop and stands at 2,162.
In economic news, the Commerce Department reported that wholesale inventories were lower by 0.8% in December compared to an expectation that inventories would rise by 0.5% during the month.
Caterpillar (CAT, $53.93, up $3.15) is one of the Dow components that is fueling this huge rally. The stock is up over 6% after an analyst upgrade. Coca-Cola (KO, $54.86, up $2.21) was up 4% after reporting better than expected earnings as revenues benefited from emerging market growth.
Tags: CAT, Goldman Sachs, KO, National Bank of Greece, NBG, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Hot Stocks, Option Trades, Sectors, Stock Earnings | Comments Off