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Market Looks Strong

Friday, March 5th, 2010

1:00pm (EST)

The bulls are putting an explanation point on this week’s rally as the market continues to move higher.  We got all the news we needed this morning when the U.S. jobs declined less than expected.  The report is still subject to debate and there are probably a few skeletons in the closet but the “here and now” is that the market is rocking. 

The Dow is currently up 83 points to 10,527 while the S&P 500 is higher by 11 points to 1,135.  The Nasdaq continues to shine and is showing a pop of 27 points as it stands at 2,319.

We said in our Weekly Wrap that the market could continue to climb a “wall of worry” and this seems to be the case.  We have covered a bunch of stocks this week and we have closed several nice trades in our Members Area.  Our subscribers closed a F5 Networks (FFIV, $61.13, up $0.43) trade on Wednesday for a 150% gain and a Cree (CREE, $69.13, up $0.06) call option trade for nearly 30% gains.

ffiv_030510

There were two stocks we followed outside the Members Area this week that are also on a roll. 

Walt Disney (DIS, $33.00, up $0.43) got an upgrade a day after these quotes from us on Wednesday:

“Walt Disney led the Dow higher and looks like it wants to challenge its 52-week high of $32.75.  We have followed Disney for years and we usually have pretty good success playing call options on the stock.  In September 2009, we grabbed our subscribers 72% on a call option trade and we recently closed out another trade for a small 12% win.  In other words, there could be a trade here if Disney continues higher.” (END) 

dis030510

We wanted to add some call options on Disney to our portfolio but we held off when the stock popped yesterday.

The other company we want to talk about is TiVo (TIVO, $17.38, up $0.85).  We did a big write-up yesterday because there has been a story developing at TiVo since June 2009 that we have been covering like grass on dirt.  We profiled 3 options yesterday in our 1pm update that could have easily paid the bills this month:

The March 10 calls (TUK100320C00010000, $7.40, up $0.80) were at $5.70 in our 1pm update yesterday and you could close them now for a 30% gain.  Remember, these options opened at $1.05 on Thursday.  The total gain from yesterday’s open would be a staggering 600%. 

The March 11 calls (TUK100320C00011000, $6.60, up $2.00) were at $4.50 and are up another 48% today.

tivo030510b

For our Kenny Rogers fans, the “Gambler” trade we profiled, the March 17.50 calls (TUK100320C00017500, $0.75, up $0.20), are up nearly 40%.  Over 53,000 contracts traded hands on Thursday.  Wow.

We mention this because these types of trades are what makes option trading so lucrative and why we spend so much time on research.  We also wanted to PROVE to people that YOU can make this much money on a single option trade. 

We often hear people laugh when we tell them they can make this much money when using options in the stock market because they don’t believe us.  People think we are full of sheet.  The talking heads say the same thing but we keep it real and here is the devil in the details on where they are wrong.

In 2009, our subscribers made 550% on a Google (GOOG, $563.41, up $8.82) call option trade and a 1,150% on a Research In Motion (RIMM, $68.89, down $0.09) call play.

The point is, we want you in on the action and we want you to trade with us for the long-term.  Often times we have subscribers sign up and then cancel after a month because we may have profiled a losing trade.  Folks, we are going to have them but we have a track record for a reason.  We try to teach patience and when the market is in a rhythm the profits can be super great.  The losers suck but the winners make up for that.

We see more juicy trades on the horizon weather the market continues higher or has a sudden reversal.  However, we think next week could be another bull run.  We will be back Sunday night with the Weekly Wrap with some fresh ideas and a look at next week’s action.  We will also be updating all of the CLOSED trades for our 2010 Portfolio so that you can view our results.  Current subscribers, check the Members Area for the HOT updates.

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TiVo Surges On Good News

Thursday, March 4th, 2010

12:45pm (EST)

The market has traded higher for much of today’s session as we are still in a tight range ahead of Friday’s unemployment numbers. 

The Dow is currently up 20 points to 10,416 while the S&P 500 is showing a 1 point gain and is at 1,119.  The Nasdaq is also up slightly, 2 points, and is riding 2,282.

There is a ton of economic news that has hit the Street today but we won’t bore you with those details. 

We wanted to share a story with you as we prepare to launch our trading manual.  We are so excited to bring you this option trading manual because it really is going to show you some good trades that will last you a LIFETIME.  We often talk about Watch Lists and we show you how to organize, create, and find trades in more detail with our course but here is an example of what you will learn. 

First, a little history.  We are going to share some quotes from last summer with you and you will see where we are going with this (quotes are from that day):

From June 3rd, 2009:

TiVo (TIVO, $10.70, up $3.32) shares hit a 52-week high on Wednesday after a judge ruled that Dish Network (DISH, $15.56, down $1.68) and EchoStar (SATS, $16.12, down $0.25) will have to pony up nearly $200 million for “video-recorder” patent infringements. This was a windfall for TiVo as the company has lost money for two straight quarters.

After reporting a loss of $4 million, $0.04 a share, versus a profit of $3.5 million a year-ago, TiVo could be on track for more royalties. There is another $100 million in the kitty that could come TiVo’s way from “accumulated interest” for judgments three years ago. Keep an eye on these developments.” (END)

These stories take months to play out and we waited until October 2009 to try and capture our first play on this news.  Here were our thoughts: 

“The action in TiVo was crazy on Friday.  The company is no stranger to the blog and we told you back in June to watch this one carefully.  When I was doing the 1pm update on Friday, TiVo popped up again on my alert screen in my brokerage account.  I had set an “alert” on my Watch List to inform me of when the stock broke its 52-week high of $11.62 which was set on June 12th.  We were watching for clues from this June 3rd update…”  (END)

This trade netted our subscribers 18% in 4 days but we exited early because the volume wasn’t continuing like it should when pending news is due out. 

We tried again at the end of November when the stock was just under $10.  From the Members Area on 11/30/09:

“TiVo got hammered last Wednesday after reporting a loss that matched Wall Street’s estimates, but revenue came in slightly below expectations.  The company also set a revenue forecast for the current quarter below Wall Street’s targets.

TiVo also said subscription additions for the third quarter totaled 34,000, compared with 44,000 a year ago. 

As some of you may know, TiVo has been locked in a long-running patent dispute with Dish Network (DISH, $20.65, down $0.47) and EchoStar (SATS, $19.56, down $0.48) that is closely being watched by Wall Street.

TiVo also has patent lawsuits against AT&T (T, $26.99, down $0.09) and Verizon Communications (VZ, $31.63, down $0.40) which began court hearings just recently.  The company also expects favorable results from these cases as well.

We also like the fact that TiVo’s has partnered with Google (GOOG, $579.76, down $5.98) and Virgin Media (VMEDW, $0.06) to help streamline revenues.  These events lead us to believe that TiVo could easily trade back to $12+ with any favorable court ruling over the near-term.  This position will NOT have a stop at first due to the current market conditions.” (END)

For this trade, we used the February 12.50 calls and were able to squeeze out a 13% profit and told subscribers to close the trade when the stock was near $11.  This was the smart choice as the February options expired worthless as TiVo was back below $10.  Until today. 

The company announces earnings this Monday and it was a trade we were going to profile tomorrow in our Members Area.  We weren’t worried about TiVo’s numbers we just wanted an update on the court rulings.  We were thinking “outside of the box” and we knew if the company mentioned something positive on these developments then the stock could pop.

Well, we told you we were going somewhere with this.  

Folks, TiVo (TIVO, $15.90, up $5.69) is zooming today as shares are up 60% after getting a positive court ruling.  The news hit the market right around 11am (EST).

tivo030410

This was the perfect storm and it hit us 24 hours early.  We were looking at the March options and many of you could have been in Hawaii next week sipping on a cold one and enjoying these gains…

The March 10 calls (TUK100320C00010000, $5.70, up $4.55) are up nearly 400% and opened this morning at $1.05.  

The March 11 calls (TUK100320C00011000, $4.50, up $3.75) are up 500%.

For you gamblers, the March 17.50 calls (TUK100320C00017500, $0.30, up $0.25) are also up 500%.  Over 16,000 contracts have traded hands.

We are always thankful for the trades the market presents us but it goes to show that it is always one step ahead of us.  Well, at least TiVo was today. 

The good news is that there is ALWAYS a trade and the market has been treating us good lately.  However, we feel like that commercial where the one little girl gets a toy pony while the other one gets a REAL pony. Maybe we should have asked TiVo to wait one more day…

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Going For Four

Wednesday, March 3rd, 2010

1:00pm (EST)

The bulls are trying to extend their recent winning streak to four sessions as they continue to push the market higher.  As we go to press, the Dow is currently at 10,461, up 55 points, while the S&P 500 is higher by 7 points to 1,125.  The Nasdaq is showing an 11 point pop and stands at 2,292.

We mentioned in our Weekly Wrap that our targets were 1,175 for the S&P 500; 2,275 for the Nasdaq; 10,800 for the Dow over the next few weeks.  As you can see, the Nasdaq has already powered through our initial target but we also said the index should show the most strength as the market moved higher.  The next level of resistance could come in at 2,325.

There is plenty to talk about today but the one company we want to mention in our afternoon update is Joy Global (JOYG, $55.55, up $4.06).  The company reported earnings today and they crushed Wall Street’s estimates. 

Joy Global Inc. - Hourly Chart

Joy Global Inc. - Hourly Chart

For the first quarter, the company earned $76 million, or $0.73 a share, versus $85 million, or $0.83 a share, in the year-ago period.  Although these numbers were slightly below last year’s results, Joy Global raised 2010 estimates as they are seeing many areas of their business pick up.  Wall Street had expected earnings of $0.64 a share.

We were recently stopped out of call option trade on Joy Global against our wishes although we had a feeling we had a Tiger by the tail.  We profiled the March 55 calls (JQY100320C00055000, $2.38, up $1.40) on February 18, at $1.10, and they would have been a sweet double for us but we were just a little early on the trade.

We don’t like going back to a trade after getting stopped out but we should have kept our eye on Joy.

In any event, we still LOVE the current trades we have on the books as one of them is approaching a 150% return in just over a week.  Some of our other trades are also showing a nice pop today and we cover them in the Members Area.

We have been super busy over the last few days but we are still updating our 2010 trades in our Members Area as they come.  Once we close some of the current ones out, we will make the closed trade(s) information available to non-members. 

We still believe 2010 offers a lot of opportunities for some fat profits but what we are seeing is that we have to be a little quicker with our trigger finger.  In 2008, the market was conducive for buying put options while in 2009 call options worked well.  The difference with 2010 is that we are in a range bound market (for now) where as 2008 was straight down and 2009 was straight up.

This means we have to take quicker profits and cut our losses sooner but we are adjusting well.  We will be back in the morning with another update but don’t forget Friday will be a huge day for the market as we get the unemployment numbers before the bell.  As such, we are trying to close positions and take “half profits” on some of our trades ahead of the event.  Subscribers, check the Members Area for the important updates.    

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Garmin Tanks On Lower Margins

Wednesday, February 24th, 2010

12:35pm (EST)

The market is trying to rebound from a two-day slide and has held up well after hearing Federal Reserve Chairman Ben Bernanke tell Congress that low interest rates are still needed to support the economy.  He also added that interest rates will probably remain low for an extended period to allow more time for an economic recovery.

The Commerce Department said sales of new homes fell to a record low in January as Wall Street had been expecting an increase.  New home sales fell a whopping 11.2% last month to a seasonally adjusted annual sales rate of 309,000 units versus a forecast of 360,000.  This was the lowest level on a record in nearly 50 years.

The Department of Energy released its inventory report which showed a larger than expected build up of crude oil, but a larger than expected draw down of gasoline.

As a result, the Dow is currently up 85 points to 10,367.  The Nasdaq is higher by 22 points and is at 2,236 while the S&P is up 9 points to 1,103..

In earnings news, Garmin (GRMN, $31.99, down $2.46) is getting a haircut despite beating Wall Street’s estimates.

GRMN - 60 Minute Chart

GRMN - 60 Minute Chart

The company earned $278 million, or $1.38 a share versus $158 million, or $0.78 a share, during the year ago period.  More importantly, Garmin also said it sees its NuviFone operating margins to be slightly negative in 2010.

We have mentioned Garmin often in this space over the last few months and yesterday we profiled an earnings trade to take advantage on a possible move lower.  We knew the company would beat estimates but like we told our readers yesterday, Garmin is the next Blockbuster (BBI/B, $0.26, down $0.03).

Garmin has made a niche for itself in the navigation field but there is just too much better and cheaper competition that continues to eat away at the company’s margins.  Here is what we said yesterday in our Members Area:

“Garmin reports earnings on Wednesday and we have talked about Garmin in the past.  A recent stroll in our neighborhood showed the latest Garmin devices selling at 50% discounted prices and there were a TON of them.  It looked liked the same display that has been up at Christmas…

The company is in a dying business as simple, easier ways of navigation are now available.  Google and Nokia said they will offer free turn-by-turn navigation on mobile phones and we are sure other applications will continue to be far cheaper than Garmin’s products.”

Current subscribers who acted on those comments are up 75%-100% today on a put option trade.  Yes, earnings trades are risky but if you can read the hidden message before a company reports then you have a chance at a pretty good payday.

We have updated all of our trades, including Garmin, so please check the Members Area NOW

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Market Tight As Traders Look For Clues

Monday, February 22nd, 2010

1:10pm (EST)

The market opened slightly higher but was unable to hold its gains as the bulls and bears position themselves for this week’s battle.  We have been in a tight trading range for much of the day but the sentiment is a little bearish after President Obama proposed a new Medicare tax on unearned income and $10 billion in additional fees on drug companies.

The bulls may be in a wait-and-see mood which could lead to some lackluster trading as they wait for more earnings reports this week.

Speaking of earnings, Campbell Soup (CPB, $33.33, down $0.60) reported numbers of $259 million, or $0.74 a share, versus $233 million, or $0.64 a share, in the year-earlier quarter.  Sales rose 1% to $2.15 billion.  Wall Street had forecast Campbell to earn $0.73 a share on sales of $2.2 billion.  Although earnings rose 11% as the company’s margins improved, it continued to see weakness in U.S. soup sales and volume fell 2%.

We mentioned Dendreon (DNDN, $32.89, up $0.53) this morning after the stock was up in pre-market trading.  JPMorgan (JPM, $40.71, up $0.68) came out with an ”Overweight” rating and a $46 price target on our favorite Drug stock.  The call is based upon a belief that Provenge will be approved for advanced prostate cancer.

Many of you know we have been following this story for over two years and Dendreon was by far our biggest trade return last year as our subscribers rode the stock from $4 to the mid $20’s.

There are also higher “unofficial” price targets for Dendreon but the drug must get approval first before we say it’s headed past $50.  However, we think shares can hit over $100 in the next two years if Provenge is approved but it will depend on how well the company handles the transition from small town Billy to big town Bobby as sales are expected to reach over $1 billion.

We also mentioned Dendreon on our Watch List last Wednesday in our Members Area and told our subscribers about the “triple-top” resistance that was at $30-$31 and to watch for a breakthrough.  We also listed an option trade that is now up 50%.  We were waiting for the February options to expire before making this an “official” recommendation but the train left us.

We are still looking at other trades for Dendreon but we don’t want to chase with the options we have already talked about.  There will be another opportunity for us to buy some options and that may come this week or next month as we do feel an explosive move higher is forthcoming.

As we head to press, the Dow is down 6 points to 10,396.  We have a lot of updates to cover in our Members Area so let’s get to it… 

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« Older Entries
Try our directional option picks.
    No fancy spreads. No iron condors. No need to watch the markets all day long.

Year Profits
2008 136.01%
2009 90.04%
Results are NOT compounded.

FREE OPTION PICKS
TRACK RECORD.
Nothing fancy. Just simple calls and puts. Click on PDF links below.

2010 Option
Trading Results

2009 Option
Trading Results

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Trading Results

Trader Comments:

    LAWRENCE O.
    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

    C.J.
    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

    SHAUN
    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

    MICHAEL K.
    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
    profitable calls. Keep up the good work.

    PARAG P.
    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

    JAY P.
    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

    MIKE
    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

    TRISH D.
    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

    MIN L.
    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock!

    JOE G.
    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you!

    GREG F.
    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

    NOEL
    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

    TODD F.
    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

    PAUL H.
    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

    NOEL
    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

    CHRISTIAN
    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

    JOHN
    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

    CHARLES M.
    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

    BRYAN C.
    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

    JOHN H.
    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

    JEFFREY
    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

    ED
    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

    GREG
    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

    KEN
    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

    GARETT
    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”