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Wednesday, November 11th, 2009
1:00pm (EST)
Toll Brothers (TOL, 21.13, up $2.74) is up 15% today after surprising Wall Street with some rather upbeat comments ahead of its earnings. The company said its new contracts are up over 40%, and that it expects 4Q revenue will top the Street’s expectations.
Revenue for the company is expected to come in at $487 million, well ahead of the market estimate of $386 million. Comments from the CEO:
“We have definitely progressed from one year ago. The shock to the financial system in mid-September 2008 that shut down the capital markets appears to be mostly behind us.
We have been cautious on the sector because we didn’t want to go long or short because of the uncertainty but this is the second straight quarter that Toll Brothers has said something “hot”. Something to keep an eye on…
Toll Brothers is expected to release earnings on November 23rd.
Other stocks in the sector also got a bump; KB Home (KBH, $15.49, up $0.81), Lennar (LEN, $15.09, up $0.79) and Pulte Homes (PHM, $9.95, up $0.49) are all up over 5%.
We also wanted to update our trades one last time before we go today. We got some breaking news on our retail trade that we just sent out. Also, our Priceline.com (PCLN, $197.10, down $7.12) was closed as the $7.50 stop was taken out. The official results for our 2009 portfolio shows a gain of 468%!
Current subscribers, please check the Members Area for the updates.
Tags: KB Home, Lennar, momentum options, option trading picks, options help, options mentoring, options track record, options trading, Priceline.com, Pulte Homes, Toll Brothers, trading options
Posted in Company Commentary, Earnings, Option Trades, Sectors, Stock Earnings, Trading Tips | Comments Off
Sunday, November 8th, 2009
11:30pm (EST)
The bulls battled back last week and let it be known they are not about to give up the gains from March without a fight. This is normally a “bullish” time of the year with elections and the “Santa Claus” rally on the horizon but the bears have made it known they are going to hang around.
We have mentioned that Dow 10,000 will be a battle ground and the index held up well on Friday despite a 10.2% unemployment number. The Dow finished with a 17 point gain and closed at 10,023. For the week the blue-chip index added 310 points, or 3.2%.
The Nasdaq added 7 points on Friday and 67 for the week to finish at 2,112 while the S&P 500 added 3 and 33 points and ended at 1,069. The current momentum points to the rally continuing but it doesn’t mean you have to turn a blind eye to finding some short positions.
We thought the market would have done more than it did Friday but it confirms our belief that we could be stuck in a near-term trading range. If so, we will have to continue to be nimble and look for trades outside-of-the-box.
We have profiled quite a few winners over the last three weeks and we have played both offense and defense. Our current subscribers recently locked up a 31% gain in Imax (IMAX, $10.82, up $0.26) call options, a 38% return in a bullish Barrick Gold (ABX, $40.20, down $0.08) play, and a 50% return on an Apollo Group (APOL, $56.57, down $0.22) put option play.
Our near-term targets for the Dow remain 10,300-10,400 to the upside and 9,650 is short-term support.
For the S&P 500…it has been struggling with 1,100 but a break above that level could lead to a run to 1,200. Support is strong at 1,000 and even down to 970 but a break below these levels will spell trouble.
If the Nasdaq were to breakout, a run to 2,275 could be in the cards. Support is at 2,000-2,025 and a break below that could mean a trip to 1,800 quickly.
There are still numerous hurdles the bulls face; rising unemployment, the uncertainty of healthcare, and possible inflation the way the Fed is printing money but they seem determined to run. As long as unemployment is in the double-digits, the Fed won’t raise interest rates and the bulls are expecting the liquidity to continue.
Of course, the bears are banking on the exact opposite and seem poised to wait for the right moment to strike. We continue to hear how high the market has advanced in such a short period of time but remember this. If a stock drops 50% from $10 to $5, it will need to make a 100% return to get back to even.
If we look at the Nasdaq (because we think Tech is still the key) we have to remember we were at 2,500 in June of 2008 and hit a low of 1,300 by November. The Nasdaq rallied from that low into 2009 only to be tested again in March. Since then, the bulls have been on a runaway freight train and it only seems natural that it will eventually run out of gas. However, even if the bulls have run out of gas, it seems they are still gliding on momentum. Something to think about as the market tries to get back to “even”.
Third-quarter earnings are winding down as the heavy-hitters have already announced but there are still a number of companies that will confess to Wall Street. Here are a few reporting on Monday:
Capitol Federal Financial (CFFN, $29.67, down $0.04), Carrizo Oil & Gas (CRZO, $24.62), Electronic Arts (ERTS, $19.00, up $0.84), Fluor (FLR, $45.40, up $0.15), Healthcare Realty Trust (HR, $19.98, down $0.19), Priceline.com (PCLN, $172.00, up $3.99) and Ticketmaster Entertainment (TKTM, $10.07, down $0.12).
We will be back in the morning with news on one of the aforementioned companies. But before we close we would like to give a special thanks to many of you who have been following the Blog for 18 months. All of you have followed us to our new home and we can’t thank you enough for your support.
We also feel like we have the perfect name as momentum will continue to play a big part in the market’s moves. And it doesn’t matter if it’s up or down. We have shown that we can trade the tough markets, the easy markets and ones that appear to be stuck in a trading range.
We hope many of you will extend your memberships and we look forward to bringing you even more profitable trades in the future. As we head to press, Dow futures are up 32 points…
Tags: momentum options, MomentumOptionsTrading.com, options help, options mentoring, options track record, options trading, trading options
Posted in Company Commentary, Market Analysis, Market Commentary, Stock Earnings, Strategies, Weekly Wrap | Comments Off
Thursday, November 5th, 2009
1:00pm (EST)
We have had a busy day and the bulls are pushing Dow 10,000 as we head towards Friday’s all important Jobs Report. We touched base on what this means for the market and there are only three things that can happen. We either go up, down, or the tug-of-war continues between the bulls and bears. If there is little movement after we get the Jobs Report then longer-term it bodes well for the bulls.
In any event, we are preparing for the news by scaling back and closing positions before the report is out. We just don’t see the need to take on the extra risk when we already have profitable positions. Here are the profitable trades were are telling our subscribers to take profits in: Imax (IMAX, $10.82, up $0.26) call options for 31%, Barrick Gold (ABX, $40.20, down $0.08) call options for 38%, and an Apollo Group (APOL, $56.57, down $0.22) put option trade for 50%. Given the current market environment, I’d say we have performed pretty well.
Yes, we could push the envelope and leave these trades open for possible further gains but we are following our trading plan. We have a number of trades we are looking at as soon as the opening bell rings on Friday. It all depends on what the Jobs Report says and how traders are acting.
A couple of stocks we are watching…
We are licking our chops at another possible put option play for Abercrombie & Fitch (ANF, $34.77, up $0.97) after the stock is moving higher despite the fact that its same-store sales numbers were lousy. We would love to see a move back ABOVE $35 and a push towards resistance which is strong at $37. If so, we have the perfect put option in mind…
There is one trade we profile in the Members Area today but it is a ‘roll-over” trade from one of the aforementioned picks. A quick update we would also like to share for those of you who’s membership is expiring or for some of you who have been following us from the Blog. Here is where we are going:
“Also, please keep in my mind we have no plans to auto trade our picks. Many of you have been asking and this is one of the reasons why we don’t want to go this route. Sometimes the markets are just too volatile. Reason number two is that I don’t want to be famous, or on TV and we don’t want a million subscribers. We are limiting the number of subscribers we take to 1,000 and once the Trading Manual is done that is it. There will be a waiting list to get a subscription after that.
Our goal is to teach traders the option market and to stay under Wall Street’s radar. I don’t want our trades “crowded” and I don’t want to get to the point to where we can’t satisfy your needs. That is it. Thank all of you for the love/ hate mail yesterday…I deserve it.”
As we head to press…the Dow is up 171 to 9,973. It will be interesting to see how close to 10,000 we settle at as we head into tomorrow’s Jobs Report.
Tags: Apollo Group, Barrick Gold. options mentoring, Imax, market movers, momentum options, option trading, options track record
Posted in Company Commentary, Earnings, Entertainment Stocks, Hot Stocks, Market Analysis, Market Commentary, Option Trades, Stock Earnings, Strategies, Trading Psychology, Trading Tips | Comments Off
Sunday, October 18th, 2009
11:30pm (EST)
MARKET COMMENTARY
Friday was a rough day for the bulls as the Dow fell 67 points, or 0.7%, to close the week at 9,995. However, the Dow managed to break the 10,000 level last week and closed above it on Wednesday and Thursday. We were prepared for a “down” Friday as we mentioned that 7 out of the last 10 years were negative on October expiration day. It would have been nice to see 10,000 hold but we don’t think the bulls are too worried.
Most of the talking heads (or bears) were talking down the number and were trying to do the “shrug of the shoulders, simply a number” routine. Well, just like any star receiver in the NFL would do, the NYSE (New York Stock Exchange) passed out “Dow 10,000″ hats on the floor and the party was on Wednesday and Thursday. The hangover came Friday but the bulls aren’t ready to leave. Either the bears put up a fight or this party is just getting started.
Sure, earnings were mixed as companies continue to miss top-line revenue numbers, but overall, the comments have been very encouraging. Some stocks rocked and some rolled over but when you hear a company’s CEO say… “While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.” That was Google’s (GOOG, $549.85, up $19.92) CEO, Eric Schmidt who made those remarks.
There were a lot of investors betting against “Goog’s” on Friday when the company reported earnings but they came out smelling like a rose. Can I be the first to say Goog’s will be a $1,000 stock by 2011? Well, maybe…I don’t carry quite the weight that other Wall Street analysts do but they were tripping over each other to raise their price target on Friday. Because I had nothing better to do, I took a look at some options in Google just to “see” what would happen if Google hit a $1,000 by 2011.
My, my, my…did you know that a $2,500 investment in a certain Google call option would give you a return of $25,000 by buying only 1 option contract? I profile the trade in the Members Area but I’m still on the fence with it. The interesting thing is that the stock wouldn’t have to make it to $1,000. If Google just managed to break $800 in 2010, the trade would still be a double…
For the week, the Dow added 131 points, or 1.3%, and finished at 9,995. The S&P 500 got did slightly better as it gained 1.5%, or 16 points, and closed at 1,087. The Nasdaq was higher by 17 points, or 0.8%, and settled at 2,156.
Here we our thoughts from Thursday before the market opened:
“The Dow is at 10,015 (up 145 points yesterday), the Nasdaq is at 2,172 (+32) and the S&P 500 (+19) is at 1,092. So where do we go from here? If you will notice from my 8/23 notes, we could hit 2,275 on the Nasdaq and 1,175 for the S&P 500. For the Dow, we could see 10,300-10,400 if the rally continues. Now, we may not see these levels during earnings season but there’s a good shot we end 2009 at those aforementioned levels.”
We were 70% sure we would have a down day on Friday but those are still our near-term targets.
On the earnings front, Financial stocks were a mixed bag. Bank of America (BAC, $17.26, down $0.84) and Citigroup (C, $4.59, down $0.16) reported lousy 3Q numbers as both banks reported losses. BofA reported a wider-than-expected loss of $0.26, sending the shares down 5% on Friday, while Citigroup reported a $0.27 loss, dropping its shares 3% on Friday and nearly 8% for the week.
Goldman Sachs (GS, $184.37, down $4.26) beat Wall Street’s estimates as earnings per share came in at a staggering $5.25 while sales topped $12 billion. Everybody and their grandmother was expecting a pullback and we got one, but, somehow we have a feeling if the rally continues, Goldman breaks $200.
And on another sad note, Galleon Group founder and billionaire Raj Rajaratnam will be joining Bernie and the boys. Dude was arrested Friday and charged with securities fraud and insider trading. When will these knuckleheads learn?
As we look ahead towards Monday’s open, futures are showing a slightly lower open but we will have plenty of fireworks. We will be back in the morning by 9am (EST) with a BIG list of the companies reporting earnings this week AND our Current Trade updates. Imax (IMAX, $10.85) continues to push new highs and is our latest trade making a push for a triple-digit return.
If you are not a current subscriber, you can sign up anytime between now and Monday to get our updates instantly emailed to you before the opening bell.
Tags: option trade picks, options blog, options mentoring, options track record, Stock Market Weekly Wrap
Posted in Company Commentary, Market Analysis, Market Commentary, Option Trades, Stock Earnings, Trading Psychology, Weekly Wrap | Comments Off
Sunday, October 4th, 2009
3:45pm (EST)
Special Note: We are sending today’s Weekly Wrap early. I am away on travel and hope to be back in the office by Monday morning. In case I’m not, this is Monday Morning’s Update. There is a NEW TRADE for Monday morning, Pepsico (PEP, $60.90, up $2.44), that is profiled in the Members Area. Our latest trade, Abercrombie & Fitch (ANF, $30.62, down $1.08) is up 50% in less than a week and we are hoping for the same returns, if not more, for the Pepsico trade. To read the latest update on all of our trades you must be a premium member which gives you full access to our Members Area. Our last closing trade in Nike (NKE, $62.02, down $0.48) netted our subscribers profits of up to 200%….
Market Commentary
It was no bull and all bear last week as the market fell 2% on average. Friday was setting up to be an explosive day as the Dow futures were down over 100 BEFORE the opening bell rang. However, the drop was marginal and although the bulls lost the week, Friday’s battle was a huge victory. The fact that the Dow lost only 20 points is clear indication the bulls aren’t going anywhere.
For the week, the Dow lost 177 points, or 1.8%, and closed at 9,487. The Nasdaq finished the week at 2,048, down 43 points, or 2%. The S&P 500 dropped 19 points, or 1.8%, and settled at 1,025.
The market was hit with a bunch of disappointing economic news and Friday’s unemployment report was suppose to be a canon ball going through paper for the bears. The fact that the bulls held their ground gives further indication there are buyers on the sidelines. It doesn’t matter if the market is overvalued or undervalued, it never does.
The market doesn’t care about our personal wins and losses and although we may be overbought at these levels you can’t deny the action and aggressiveness of the bulls since the March lows. The thing Wall Street forgets to realize is that the market came down from a much higher level as the Dow was standing at 14,000 in 2007…
A 50% drop in the Dow which is where we were in March when the Dow was at 6,500 would mean over a 100% return to get back to the 14,000 level. We certainly know that isn’t going to happen this year but I think it is important for us to remember where we came from. So I don’t buy into that “we have come too far, too fast” spit that we have been hearing. Those same pundits were calling for a “bounce” BEFORE we bottomed at 6,500 because they couldn’t believe the sell-off. Now it’s the opposite.
Third-quarter earnings should give us a better sense of whether companies managed to grow their revenues to produce earnings growth or if we see continued cost-cutting. This helped with 2Q earnings but the same theme might not work this time around.
The bears got a “little taste” of the bulls last week so you know they aren’t going anywhere either. We are still in a volatile, nervous market which means we could get some really big moves in October.
As we head to press, the Dow futures are down 36, S&P 500 futures are off by 6 while the Nasdaq 100 futures are lower by 8. Of course, the overseas markets will affect those numbers and things could change by Monday morning but it appears we could start the week slightly lower.
Subscribers don’t forget to check the Members Area for the latest trade and updates. The update is posted under the Monday, October 5th link.
Earnings
Monday: Mosaic (MOS, $46.18, down $0.25), Robbins & Myers (RBN, $22.60, down $0.41), RPM International (RPM, $18.08, up $0.20) and Team (T, $16.77, down $0.03).
Tuesday: AngioDynamics (ANGO, $13.80, up $0.05), Chattem (CHTT, $64.59, down $0.31), Pepsi Bottling Group (PBG, $37.25, up $0.76) and Yum! Brands (YUM, $33.15, up $0.02).
Wednesday: Acuity Brands (AYI, $30.98, down $0.18), Alcoa (AA, $12.82, down $0.10), Costco Wholesale (COST, $56.47, up $0.78), Family Dollar (FDO, $26.63, down $0.21), Helen of Troy (HELE, $18.83, up $0.13), Monsanto (MON, $74.93, down $0.18), Ruby Tuesday (RT, $7.89, up $0.13) and Wolverine World Wide (WWW, $24.14, down $0.07).
Thursday: International Speedway (ISCA, $27.09, down $0.16), Marriott International (MAR, $25.61, down $0.75) and Pepsico (PEP, $60.90, up $2.44).
Friday: Cantel Medical (CMN, $15.29, up $0.15) and Infosys Technologies (INFY, $47.85, up $0.60).
Rick@MomentumOptionsTrading.com
Tags: anf, momentum options trades, momentum stock picks, Nike, NKE, option blog, option trading picks, options mentoring, options trading, PEP, PepsiCo
Posted in Company Commentary, Economic News, Entertainment Stocks, Financial Stocks, Market Analysis, Market Commentary, Option Trades, Sectors, Stock Earnings, Strategies, Watch Lists | Comments Off
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Homebuilding Stocks Get A Pop
Wednesday, November 11th, 2009
1:00pm (EST)
Toll Brothers (TOL, 21.13, up $2.74) is up 15% today after surprising Wall Street with some rather upbeat comments ahead of its earnings. The company said its new contracts are up over 40%, and that it expects 4Q revenue will top the Street’s expectations.
Revenue for the company is expected to come in at $487 million, well ahead of the market estimate of $386 million. Comments from the CEO:
“We have definitely progressed from one year ago. The shock to the financial system in mid-September 2008 that shut down the capital markets appears to be mostly behind us.
We have been cautious on the sector because we didn’t want to go long or short because of the uncertainty but this is the second straight quarter that Toll Brothers has said something “hot”. Something to keep an eye on…
Toll Brothers is expected to release earnings on November 23rd.
Other stocks in the sector also got a bump; KB Home (KBH, $15.49, up $0.81), Lennar (LEN, $15.09, up $0.79) and Pulte Homes (PHM, $9.95, up $0.49) are all up over 5%.
We also wanted to update our trades one last time before we go today. We got some breaking news on our retail trade that we just sent out. Also, our Priceline.com (PCLN, $197.10, down $7.12) was closed as the $7.50 stop was taken out. The official results for our 2009 portfolio shows a gain of 468%!
Current subscribers, please check the Members Area for the updates.
Tags: KB Home, Lennar, momentum options, option trading picks, options help, options mentoring, options track record, options trading, Priceline.com, Pulte Homes, Toll Brothers, trading options
Posted in Company Commentary, Earnings, Option Trades, Sectors, Stock Earnings, Trading Tips | Comments Off