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Tuesday, March 13th, 2012
9:00am (EST)
The market finished mixed on Monday with the bulls and bears each splitting the indexes if we include the small-caps. Yesterday’s action was timid to say the least as the major indexes traded in a tight range ahead of today’s FOMC Rate decision.
Although volatility has picked up in recent weeks, we mentioned in our Weekly Wrap that the Monday’s before triple-witching in March are typically bullish with the Blue-Chips posting gains nearly 70% of the time over the past 25 years.
True to form, the Dow added 38 points, or 0.3%, to finish at 12,959. The blue-chips traded within a 76-point range with the high coming in at 12,976.
The S&P added less than a point (0.22), or 0.02%, to end at 1,371. The index traded in the red for much of the morning following an initial pop at the open but recovered in the afternoon and traded to a high of 1,373. The low checked-in at 1,366.69.
The Nasdaq dropped 5 points, or 0.2%, to settle at 2,983. Tech peaked at 2,994 shortly after the open but spent the rest of the day below the breakeven line. The index kissed a low of 2,973 but stayed above 2,950 which had been prior resistance. We would still like to see a close above 3,000 this week.
The Russell 2000 slipped 3 points, or 0.3%, to close 814. The index pretty much traded in-step with the Nasdaq, seeing early gains up to 819, before fading 30 minutes after the open. The small-caps reached a low of 811 but easily held the 800 level.
Speaking of volatility, the S&P Volatility Index (VIX, 15.64, down 1.47) dropped nearly 9% to the mid-teens despite the flat action yesterday. For those of you that have been with us since November, you know we have been calling for the VIX to reach these levels when the index was above 30. At the time, the S&P 500 was testing the 1,150 area and we said the index would push 1,250-1,300 by the end of January and that the VIX would be cut in half. Roll out the red carpet.
We have used the VIX, along with many other technical (and emotional) indicators, as a guide to when a pullback could begin. We often hear the Wall Street pros say the VIX is an unreliable tool but it has worked magic for us. We have covered the March blueprints and what to look for over the few weeks, starting with the Fed’s decision on rates today.
We have outlined clear support and resistance levels so make sure you look at yesterday’s charts which are crystal clear. Once our clues fall into place, we will either get a continued rally or one whale of a pullback and we plan to be positioned perfectly as our portfolio will be light and tight going into next week. If the circumstances are right, we could have room for up to 10 NEW trades over the next few weeks. Of course, we also don’t want to push the action so we will need to be patient if there aren’t any good setups.
We said we might get lucky and time a possible market pullback just right so let’s see how the rest of the week plays out along with our current trades.
Futures are showing a strong open. Dow futures are up 56 points 12,953. S&P futures are higher 7 points to by 1,374 while Nasdaq futures are up a dozen points to 2,659. Subscribers, check the Members Area for the updates.
Tags: FOMC meeting, Russell 2000 support and resistance, VIX
Posted in Market Analysis, Trade Update, Trading Psychology, VIX | Comments Off
Thursday, February 23rd, 2012
12:50pm (EST)
We wanted to talk a little more about covered calls because we really want you to broaden your horizons when it comes to investing. It’s no secret how much money buying the right call or put option can make you if you pick the right option on a stock but everyone should have an investment strategy where they have “safe” money and “speculative” money. The safe money earns you double-digit gains, the speculative money tries to hit the triple-digit gains.
Option traders love fast triple-digit “homerun” gains in a day or two or even a week but many of them overlook the “singles”. Vivus (VVUS, $20.00, up $10.00) has been a name that not many traders follow but we can bet they are trying to trade the options and stock today. It is all over the news on how the company won pre-approval of its obesity drug, Qnexa, but we have been doing our homework on this company for years and although we just missed a huge trade for our Daily, here is how we played the stock in our Weekly Wrap all last year and into 2012.
In May 2011, we recommended Vivus at $7.93 and sold 2 call options for a total of 80 cents which lowered our cost basis to $7.13. We were called away in August at $9 for an 18% gain.
In September, we recommended shares again at $8.45 and we sold October and November 9 call options for a total of 75 cents to lower the cost to $7.70. In mid-November, shares were called away at $9 as the stock was at $9.84. Our return was 17%.
The next week, we recommended shares again at $9.78 and sold the December 10 calls for $1.00 which lowered our cost basis to $8.78. In mid-December, Vivus was called away at $10 as the stock was at $10.09 on expiration day. The trade made 14%.
That same day, we recommended buying the stock again at $10.09 and selling the January 11 call option for 90 cents. This lowered the cost basis to $9.39. In mid-January, Vivus was at $12.04 so we were called-away once again. The return was 17%.
Knowing we might get called away in January, we also suggested on January 12, 2012 with the stock at $12.60 to reload the position and to sell the March 15 calls (VVUS120317C00015000, $5.10, up $4.15) which were going for $1.75. This lowered our cost basis to $10.85 but we will likely have to sell the shares at $15 if they maintain a price above our “strike price” until mid-March.
So here is our point.
If you had $8,000 and started taking these trades, the first trade would have made $1,250. The second trade $1,300. The third trade would have made you $1,220. The fourth trade would have made $1,610 and our current trade will make $4,150 if shares are called away at $15 in mid-March.
The total profits would add up to be $9,530. The return on the $8,000 investment would be 120%. So yes, we may have left a little on the table but by writing covered calls, we lowered our risk. If shares would have fallen to $5 on a negative vote, you still would have banked $5,380 from selling call options and we could have closed the trade out on the bad news and still made money.
This is another reason why the Wall Street pros who bash covered call writing have no clue what they are talking about. It was one of the reasons we started the Weekly Wrap newsletter to prove these knuckleheads wrong and to make you money.
Remember, we brought you the Dendreon (DNDN, $14.42, up $0.69) story at $4 before shares made a run past $50. We told you to get out at $40 last summer. We now like the stock again at current levels. We also gave you the Imax (IMAX, $24.69, up $0.73) story at $3 and was bullish up until the low $30’s which is when we told you to get out.
These two stocks are another reason we started the Weekly Wrap. Owning stocks require a little more trading capital and they don’t provide the leverage options do but when you use these two strategies together, man, can they be a powerful combination.
For those of you who do not subscribe to the Weekly Wrap, it is the SAFEST way to play options if you are a new trader and just learning or if you have a trading account under $2,000.
You can sell an option by owning just 100 shares of a stock so the above trades would have yielded the same returns if you would have started with just $800.
Our Weekly Wrap trades were 16-0 last year and we are 12-0 for 2012. We could have up to 10 more positions called away in March. We just added 2 new trades this week where we are expecting profits of 50% and 100% over the next 6-12 months.
If you are not a subscriber to this publication, we have ran specials in the past but we have come to the point where we are on the verge of exploding as subscribers take notice and trading firms find out about our research.
We have kept the price low for those of you who took a flyer and believed in us and we want to offer one more special to everyone who is not a subscriber. One trade will probably pay for this low introductory offer so take notice.
We are offering a special 3-month membership to the Weekly Wrap that we will probably never offer again because the publication is starting to speak for itself. This special rate is for current members and new subscribers and for those of you visiting the website today. We will not advertise this rate either and it will only last through the weekend.
As far as the 2 trades we entered this week, one stock is priced at $9 and we have a 6-12 month target of $15. The other is a stock that could go from $4 to $8 in 1-2 years.
You can sign up for a one-time 3-month membership to our Weekly Wrap newsletter for only $129 to get these 2 new trades which are still at these low levels. This is a 50% savings off our regular subscription price and averages out to just $43 a month. Use promotion code A0FB422004. Please associate with Weekly Wrap 3 month Subscription (Reg. $261).
3-month Weekly Wrap membership – $129 – use coupon code A0FB422004 and go here:
https://secure.MomentumOptionsTrading.com/amember/signup.php
As far as the market, the bulls have finally showed some strength after Monday’s big pop at the open and are pushing our fluff targets once again.
The Dow is higher by 44 points to 12,982 while the S&P 500 is up by 4 points to 1,362. The Nasdaq is higher by 20 points to 2,953.
We also have profits to take in another call option trade as shares have fallen below our Hard Stop. We were able to book profits of 36% but we will be back to trade the options again. It is a $12 stock that is going to $20 this year. Count on it.
Make sure you hit us up on our Weekly Wrap offer to start adding even more profits to your portfolio.
Subscribers, check the Members Area for the updates and we will be back in the morning with our next update.
Tags: covered call trading, Covered Calls, VVUS, VVUS call options
Posted in Covered Calls, Hot Stocks, Market Commentary, Money Management, Strategies, Trade Update, Trading Psychology, Trading Tips, Weekly Wrap | Comments Off
Tuesday, February 7th, 2012
11:45am (EST)
After a month of waiting, the shorts are finally covering and running for the hills as OCZ Technology Group (OCZ, $9.93, up $0.89) has surged past double-digits today. The options we told you to pony up and buy are now up 83% so let’s ring the register. Subscribers, check the Members Area for the updates.
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If you are not a subscriber but would like to read more please click here. We are one of the fastest growing stock options trading advisors on the internet.
We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter which is now 20-1 for 2012, including 6 triple-digit winners! Yes, 21-out-of-22 winning trades!
Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and we are 23-0 on winning trades in 13 months, including 7-0 for January 2012. We are on track to add 5 more winners when February options expire next week which would run our 2012 track record to 12-0, 28-0, overall.
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading
Posted in Hot Stocks, Trade Update, Trading Psychology, Trading Tips | Comments Off
Tuesday, February 7th, 2012
9:00am (EST)
The market spent all of Monday in the red as the bulls tried to recover from the opening losses at the start of trading. The market was unable to gain any momentum following another day of Greece this and Greece that but there was a late day push to get back to even. We said yesterday the market still felt like it wanted to go higher but we simply ran out of time as the bears held on for the win.
The Dow slipped 17 points, or 0.1%, to finish at 12,845. The blue-chips traded to a low of 12,793 which was just under prior resistance at 12,800 and is trying to serve as new support.
The S&P 500 fell less than a point, or 0.1%, to settle at 1,344. The index kissed a low of 1,337 but went out right at its high for the day as the bears failed to crack 1,325.
The Nasdaq gave back 3 points, or 0.1%, to end at 2,902. Tech dropped to 2,887 intraday and we were rooting for a close above 2,900 which we got by the closing bell.
Despite the lack of action, we were able to close out another winning trade yesterday and took half profits in another as we ran out 2012 Track Record to 19-1, or an 95% win rate. We also want to explain to you real quick what makes us the best option service in the business.
As we have mentioned, most option sites do not have track records because they don’t trade or because they don’t want you to know their results. The few websites that do offer track records, well, some of them are tricky in the way they record their results and we want to point this out to you.
There are some websites which record their “winning results” but if you look closely, they will count the same trade twice, three times, or in some cases, four times, by closing out half, third, or quarter positions. This is not right and this is not fair to you as an investor.
In other words, if we recommend a trade and tell you to take half profits, we count closing the other half as ONE trade – win, lose, or draw. If we close half of a trade at $1 and the other half at $2, our average closing price for the trade is $1.50. If we posted results this way, we could be 36-1 instead of 20-1 to start 2012. See the difference already?
The “other” option sites might also recommend a position at $2 and then when it drops to $1 they tell you to “average down” and buy more. Yet, when both “half” positions end up expiring worthless, they average the trade at $1.50 and count it as one losing trade instead of 2.
Folks, we do not do any of these smoke-and-mirror gimmicks and what really separates us from other option newsletters is that we have 3 auto-trading partners that verify our results. We also have a loyal subscriber base and our integrity is the most important value to us along with your trust.
We won’t get every trade right but we do have a 4-year track record of over 70%. Our subscribers keep tabs on what is happening out there. Our NEW subscribers tell us where they came from and provide us with the results because they are happy to have found us.
With that said, futures are up and we have a NEW TRADE we are trying to get into this morning. Dow futures are lower by 11 points to 12,765 while the S&P futures are off 3 points to 1,336. The Nasdaq 100 futures are showing a decline of 5 points and are at 2,520.
Subscribers, check the Members Area for the updates and make sure to use limit prices at the open to get the best fill.
Tags: options autotrading, options track record
Posted in Option Trades, Trade Update, Trading Psychology, Trading Tips | Comments Off
Thursday, January 26th, 2012
12:45pm (EST)
Netflix (NFLX, $116.04, up $21) surprised Wall Street and the talking heads after the bell last night when they reported a better-than-expected quarter. The bar was already lowered so let’s get that out of the way but the results were impressive.
The company posted a profit of $40.7 million, or $0.73 a share, versus $47.1 million, or $0.87 a share, in the year-ago quarter. Total revenue checked in at $875.6 million, up 47% from the quarter last year.
Here was our chart work on Netflix at the beginning of the year when shares cleared the 50-day moving average (MA) and our thoughts:
“We aren’t sure if a bottom is in but shares could be on the verge of breaking out of a trading range (blue box) in the chart below. Yesterday’s close above $80 was bullish for a run into the $90’s (black line) which is where the next patch of resistance lies. If shares can clear this level there is a chance for a run back to triple-digits ($100-$120) believe it or not.” (END)
Here is what the chart now looks like with the $90 and $120 drawn out:
We mentioned the great chart work we have been doing lately but we failed to capitalize on this move as our portfolio has been pretty full and the options were expensive. We normally like to play options that cost $2 or less and we peaked at the Netflix February 115 calls (NFLX120218C00115000, $7.40, up $4.50) before yesterday’s close and they were at $2.80-$2.90. At the beginning of the month they were under 50 cents.
Netflix was at $95 before Wednesday’s closing bell and when we factored in a 10% price move it put shares at $104-$105 which was below the strike price. We were also nervous that customers wouldn’t be back so soon and their content costs so we sat on the sidelines. It would have been a big risk but the February 115 calls are up 150% today alone.
Netflix also trades WEEKLY options and the January 110 calls (NFLX120127C00110000, $6.30, up $4.15) were at $2.15-$2.25 before the close but these options expire tomorrow. Although the options are up 200%, we didn’t feel the risk/reward was favorable enough for us to pull the trigger. The option premiums were juiced and if Netflix would have missed estimates, these trades would have been all-or-nothings.
We’ve been doing fine without Netflix but we should’ve trusted our chart work.
As far as the market, following a gap higher at the open, the index are struggling to hold their gains. The Dow is up 10 points to 12,767 while the S&P is lower by a 4 points to 1,322. The Nasdaq is off by 9 points to 2,809.
We have a lot to cover in our Members Area today as we are taking action on another current call option trade that is up nearly 60%. We also want to cover the 2 new trades we released this morning so let’s get on it.
Tags: NFLX, NFLX earnings, NFLX options, weekly options
Posted in Company Commentary, Hot Stocks, Market Analysis, Trading Psychology | Comments Off
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More on Vivus (VVUS)…
Thursday, February 23rd, 2012
12:50pm (EST)
We wanted to talk a little more about covered calls because we really want you to broaden your horizons when it comes to investing. It’s no secret how much money buying the right call or put option can make you if you pick the right option on a stock but everyone should have an investment strategy where they have “safe” money and “speculative” money. The safe money earns you double-digit gains, the speculative money tries to hit the triple-digit gains.
Option traders love fast triple-digit “homerun” gains in a day or two or even a week but many of them overlook the “singles”. Vivus (VVUS, $20.00, up $10.00) has been a name that not many traders follow but we can bet they are trying to trade the options and stock today. It is all over the news on how the company won pre-approval of its obesity drug, Qnexa, but we have been doing our homework on this company for years and although we just missed a huge trade for our Daily, here is how we played the stock in our Weekly Wrap all last year and into 2012.
In May 2011, we recommended Vivus at $7.93 and sold 2 call options for a total of 80 cents which lowered our cost basis to $7.13. We were called away in August at $9 for an 18% gain.
In September, we recommended shares again at $8.45 and we sold October and November 9 call options for a total of 75 cents to lower the cost to $7.70. In mid-November, shares were called away at $9 as the stock was at $9.84. Our return was 17%.
The next week, we recommended shares again at $9.78 and sold the December 10 calls for $1.00 which lowered our cost basis to $8.78. In mid-December, Vivus was called away at $10 as the stock was at $10.09 on expiration day. The trade made 14%.
That same day, we recommended buying the stock again at $10.09 and selling the January 11 call option for 90 cents. This lowered the cost basis to $9.39. In mid-January, Vivus was at $12.04 so we were called-away once again. The return was 17%.
Knowing we might get called away in January, we also suggested on January 12, 2012 with the stock at $12.60 to reload the position and to sell the March 15 calls (VVUS120317C00015000, $5.10, up $4.15) which were going for $1.75. This lowered our cost basis to $10.85 but we will likely have to sell the shares at $15 if they maintain a price above our “strike price” until mid-March.
So here is our point.
If you had $8,000 and started taking these trades, the first trade would have made $1,250. The second trade $1,300. The third trade would have made you $1,220. The fourth trade would have made $1,610 and our current trade will make $4,150 if shares are called away at $15 in mid-March.
The total profits would add up to be $9,530. The return on the $8,000 investment would be 120%. So yes, we may have left a little on the table but by writing covered calls, we lowered our risk. If shares would have fallen to $5 on a negative vote, you still would have banked $5,380 from selling call options and we could have closed the trade out on the bad news and still made money.
This is another reason why the Wall Street pros who bash covered call writing have no clue what they are talking about. It was one of the reasons we started the Weekly Wrap newsletter to prove these knuckleheads wrong and to make you money.
Remember, we brought you the Dendreon (DNDN, $14.42, up $0.69) story at $4 before shares made a run past $50. We told you to get out at $40 last summer. We now like the stock again at current levels. We also gave you the Imax (IMAX, $24.69, up $0.73) story at $3 and was bullish up until the low $30’s which is when we told you to get out.
These two stocks are another reason we started the Weekly Wrap. Owning stocks require a little more trading capital and they don’t provide the leverage options do but when you use these two strategies together, man, can they be a powerful combination.
For those of you who do not subscribe to the Weekly Wrap, it is the SAFEST way to play options if you are a new trader and just learning or if you have a trading account under $2,000.
You can sell an option by owning just 100 shares of a stock so the above trades would have yielded the same returns if you would have started with just $800.
Our Weekly Wrap trades were 16-0 last year and we are 12-0 for 2012. We could have up to 10 more positions called away in March. We just added 2 new trades this week where we are expecting profits of 50% and 100% over the next 6-12 months.
If you are not a subscriber to this publication, we have ran specials in the past but we have come to the point where we are on the verge of exploding as subscribers take notice and trading firms find out about our research.
We have kept the price low for those of you who took a flyer and believed in us and we want to offer one more special to everyone who is not a subscriber. One trade will probably pay for this low introductory offer so take notice.
We are offering a special 3-month membership to the Weekly Wrap that we will probably never offer again because the publication is starting to speak for itself. This special rate is for current members and new subscribers and for those of you visiting the website today. We will not advertise this rate either and it will only last through the weekend.
As far as the 2 trades we entered this week, one stock is priced at $9 and we have a 6-12 month target of $15. The other is a stock that could go from $4 to $8 in 1-2 years.
You can sign up for a one-time 3-month membership to our Weekly Wrap newsletter for only $129 to get these 2 new trades which are still at these low levels. This is a 50% savings off our regular subscription price and averages out to just $43 a month. Use promotion code A0FB422004. Please associate with Weekly Wrap 3 month Subscription (Reg. $261).
3-month Weekly Wrap membership – $129 – use coupon code A0FB422004 and go here:
https://secure.MomentumOptionsTrading.com/amember/signup.php
As far as the market, the bulls have finally showed some strength after Monday’s big pop at the open and are pushing our fluff targets once again.
The Dow is higher by 44 points to 12,982 while the S&P 500 is up by 4 points to 1,362. The Nasdaq is higher by 20 points to 2,953.
We also have profits to take in another call option trade as shares have fallen below our Hard Stop. We were able to book profits of 36% but we will be back to trade the options again. It is a $12 stock that is going to $20 this year. Count on it.
Make sure you hit us up on our Weekly Wrap offer to start adding even more profits to your portfolio.
Subscribers, check the Members Area for the updates and we will be back in the morning with our next update.
Tags: covered call trading, Covered Calls, VVUS, VVUS call options
Posted in Covered Calls, Hot Stocks, Market Commentary, Money Management, Strategies, Trade Update, Trading Psychology, Trading Tips, Weekly Wrap | Comments Off