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Friday, October 28th, 2011
12:25pm (EST)
It has been an incredible week (and month) to say the least, and one of historic proportions which is why we love playing this game so much. Trust us, sometimes we know it can be hard to stay the course but being a professional option trader is the best job on the planet. Hands down.
The high and lows can be nerve-racking sometimes but as long as you stick to your trading strategies then it helps keep your emotions in check. For those of you who stuck out the 8-week trading range and stayed in the market with us then you are reaping the rewards of being patient.
Of course, sometimes we get trapped and we are on the wrong side of the trade or the market but over the last few months we have been all spades while other fund managers and specifically, other option newsletters have struggled to give you winning trades in this tough market. We know, we read your comments and we are happy to have you on board.
We made big bets building up bullish call positions all month long while the suit-and-ties and talking heads kept calling for a pullback. However, we got so many clues that this market was heading higher and we kept feeding them to you. The current 4-week rally was setting up beautifully on the charts each week and when we got the bounce off the October 4 lows, there was no looking back. In fact, we mentioned that day it felt like capitulation, and we made some great trades buying put options ahead of the drop as the indexes fell through the bottom of their trading ranges but held support by the close.
If you look at our closed trades for 2011 (if you are not a subscriber, request it), you will see where we opened 8 put trades near the end of September and we closed all of them except 1 when the market bottomed on October 4. You will also see where we started buying call options the VERY next day when we saw support holding.
We weren’t sure if there would be a breakout, but what we did know is that a test back to the top of the trading range was a given. Yes, we did get a bonus package with yesterday’s surge which has allowed us to close 22-straight winning option trades and 26-out-of-28 since late September. However, our Weekly Wrap and Monday morning outlook have nailed support and resistance all YEAR long.
Having said that, we are also trying to keep our portfolio “light” because we do expect the volatility to continue and there are a few headwinds coming up in November that worry us. The main one will be the “Super Committee” and the possibility of a curve ball over the European debt crisis. There are already whispers concerning Italy again.
The charts this weekend will offer better clues in what lies ahead for the major indexes, but for now, let’s give the bulls their due. The Dow will be heading into Monday’s session up nearly 11% for the month while the Nasdaq and S&P are up a staggering 13%. 20% if you count the bounce off the intraday lows.
Unless the bottom falls out on Halloween, the market is poised for a double-digit gain for October.
As we head to press, the Dow is down 8 points to 12,200 while the S&P is off by 3 points to 1,281. The Nasdaq is lower by 10 points to 2,728.
We have incredible news again today as one of the trades we opened this morning is up nearly 80% in 3 hours! Our subscribers will be locking in half profits as soon as we send this update out! We are also closing another trade that is up 69% in 2 days. Subscribers, check the Members Area for the updates!
We will be back Sunday night with the Weekly Wrap and some chart work for you to study. Until then, have a great weekend!
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in Market Commentary, Trade Update, Trading Tips | Comments Off
Thursday, October 20th, 2011
12:55pm (EST)
Trading ranges can be tough, tricky, and frustrating and the events that cause them can take weeks or months to play out. At times, when you are at the top or bottom of a range then trading can be easy as you buy the rips and sell the dips which is what we have been doing since August by playing the current range.
When trading ranges get stretched at the top, making money becomes even more difficult as part of you as a trader wants to bet on a breakout. However, what we have learned this year is that it is best to wait instead of pushing the action although you still want to be involved in a little bit of the action. The key is to play what is working.
The Japan earthquake in March, the Greece debt in June (and now), the government debt-limit crisis in July which led to the S&P downgrade of the U.S. credit rating in August have all caused the bulls a headache and the current trading range feels like a migraine. But be patient, we will get some clues here shortly on if we are going to get a breakout or another breakdown.
Economic news here at home has been pretty good but Germany is once again swinging a big stick as it said it would consider a postponement of the European Union (EU) Summit as an option. The bulls have been banking on a positive outcome from the EU Summit which is scheduled for this coming weekend but it could be delayed. Imagine that.
As far as the good news, Initial Claims came in at 403,000, which matched forecasts and were lower than last week’s count of 409,000 claims. Continuing Claims were 3.71 million. Elsewhere, the Philadelphia Fed Manufacturing Survey came in at a positive 8.7, versus expectations for a print of negative 9.4. Existing home sales for September were 4.91million units which also matched expectations.
We do have a Profit Alert for one of our trades as we are closing half of the position today to lock in profits and to take some risk off the table. We mentioned our portfolio is lightening up and we are waiting patiently for the next “big move” which could happen at any moment given the current volatility. However, we are also adding a new call option to one of our current trades because shares are showing tremendous strength.
As we head to press, the Dow is down 72 points to 11,432 but is still holding support. The S&P is getting “stretched” and is off by 8 points to 1,202 but has fallen below 1,200 today. The Nasdaq is getting punished for 34 points and is at 2,570.
Subscribers, check the Members Area to lock up half profits and keep your fingers crossed for a good earnings report after the bell from the company we are following. Also, look for the NEW TRADE we are adding on top of our current position.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Market Analysis, Trading Tips | Comments Off
Wednesday, October 12th, 2011
10:40am (EST)
For those of you who use our cell phone alerts and Twitter updates, we have just released a NEW TRADE for our Daily publication. Subscribers, please check the Members Area or your email inbox for the update. If you are not a subscriber and are looking for a possible triple-digit return, please click here. We will be back shortly with our afternoon update.
Posted in Trading Tips | Comments Off
Tuesday, October 4th, 2011
1:00pm (EST)
We have a mixed market and we may have hit a temporary bottom. We could see a dead-cat bounce today but we aren’t worried. We have locked in profits and set HARD STOPS on the other half of our positions.
We have been sleeping weird hours over the past few weeks as we try to get a read on the overseas markets while at the same time trying to see how our markets will react to the bevy of news that continues to embellish Wall Street. It has paid off.
We have often said trading is for the long haul and since we have started Momentum Options, we have never had a losing year. At times, trading ranges and headline breaking news have whipsawed us out of positions but overall we continue to cover the market’s moves like grass on dirt.
We often get asked why some years were better than others but here is the bottom line. Choppy markets are hard to trade and all we try to do is stay even by playing calls and puts. Trending markets is when we make our bank and we usually trade more contracts than usual because a clear trend is in place. Over time, we have winning streaks and losing streaks but when we tell you a TREND is in place, we usually stay hot.
With the market coming down to our next wave of support targets, there is still more downside risk, but we are also seeing GREAT setups for future CALL option trades.
We will cover more tomorrow but for now we have to roll.
As we head to press, the Dow is down 67 points to 10,588 while the S&P is up 3 points to 1,102. The Nasdaq is higher by 30 points to 2,365. Subscribers, check the Members Area for the updates and more Profit Alerts! We may also release a NEW TRADE today so stay tuned…
Tags: bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, momentum, momentum options, Nasdaq, option mentoring, option trading course, RIMM’s earnings miss, S&P 500, VIX
Posted in Trading Psychology, Trading Tips | Comments Off
Thursday, September 29th, 2011
12:45pm (EST)
Futures were strong throughout the night and this morning as they were pointing towards a slightly higher open even before the latest unemployment figures were released. The bulls got a bonus package when Initial Claims came in at 391,000 versus expectations for 419,000. The break below 400,000 was a big surprise although the numbers are a little misleading. Elsewhere, 2Q Gross Domestic Product (GDP) figures showed growth of 1.3%, versus expectations for an improvement to 1.2%. The GDP deflator came in at 2.5% versus calls for a 2.4% increase.
One stock we want to cover this afternoon is Netflix (NFLX, $113.94, down $13.20) which is getting spanked today. We profiled a strangle option trade on Monday which we have been updating daily and here were our comments this morning along with a chart:
“Thoughts: We said you could have SOLD the calls on Monday for $5 and if you did you are now up nearly 50%. The puts are still attractive on a break below $125 (green line, purple circles) and were at $1.70 Monday morning. The 200-day moving average is at $95 and the chart is giving us a $100 (orange line, brown circles) price target.
The October 95 puts (NFLX111022P00095000, $3.10, up $1.80) closed at $1.30 yesterday and traded to a low of $1.20 this morning before surging.
The October 150 calls (NFLX111022C00150000, $1.00, down $1.55) which we said to SELL at $5 on Monday are now up 80%!
If this had been an “official” trade we would probably be covering the position as we type and we have already gotten a few “thank you’s” on the heads-up for Netflix this morning from some of our subscribers who trade our Watch List.
Although we may have missed this trade for now, there are other trades we are watching. In fact, we have 4 more NEW TRADES we are releasing right now so we have to roll.
The Dow is up 173 points to 11,184 but is having trouble maintaining 11,200. The S&P is higher by 12 points to 1,163 while the Nasdaq is up only 4 points to 2,495. Subscribers, check the Members Area for the NEW TRADES!
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, Market Commentary, Trading Tips | Comments Off
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Will Monday be a Trick or Treat?
Friday, October 28th, 2011
12:25pm (EST)
It has been an incredible week (and month) to say the least, and one of historic proportions which is why we love playing this game so much. Trust us, sometimes we know it can be hard to stay the course but being a professional option trader is the best job on the planet. Hands down.
The high and lows can be nerve-racking sometimes but as long as you stick to your trading strategies then it helps keep your emotions in check. For those of you who stuck out the 8-week trading range and stayed in the market with us then you are reaping the rewards of being patient.
Of course, sometimes we get trapped and we are on the wrong side of the trade or the market but over the last few months we have been all spades while other fund managers and specifically, other option newsletters have struggled to give you winning trades in this tough market. We know, we read your comments and we are happy to have you on board.
We made big bets building up bullish call positions all month long while the suit-and-ties and talking heads kept calling for a pullback. However, we got so many clues that this market was heading higher and we kept feeding them to you. The current 4-week rally was setting up beautifully on the charts each week and when we got the bounce off the October 4 lows, there was no looking back. In fact, we mentioned that day it felt like capitulation, and we made some great trades buying put options ahead of the drop as the indexes fell through the bottom of their trading ranges but held support by the close.
If you look at our closed trades for 2011 (if you are not a subscriber, request it), you will see where we opened 8 put trades near the end of September and we closed all of them except 1 when the market bottomed on October 4. You will also see where we started buying call options the VERY next day when we saw support holding.
We weren’t sure if there would be a breakout, but what we did know is that a test back to the top of the trading range was a given. Yes, we did get a bonus package with yesterday’s surge which has allowed us to close 22-straight winning option trades and 26-out-of-28 since late September. However, our Weekly Wrap and Monday morning outlook have nailed support and resistance all YEAR long.
Having said that, we are also trying to keep our portfolio “light” because we do expect the volatility to continue and there are a few headwinds coming up in November that worry us. The main one will be the “Super Committee” and the possibility of a curve ball over the European debt crisis. There are already whispers concerning Italy again.
The charts this weekend will offer better clues in what lies ahead for the major indexes, but for now, let’s give the bulls their due. The Dow will be heading into Monday’s session up nearly 11% for the month while the Nasdaq and S&P are up a staggering 13%. 20% if you count the bounce off the intraday lows.
Unless the bottom falls out on Halloween, the market is poised for a double-digit gain for October.
As we head to press, the Dow is down 8 points to 12,200 while the S&P is off by 3 points to 1,281. The Nasdaq is lower by 10 points to 2,728.
We have incredible news again today as one of the trades we opened this morning is up nearly 80% in 3 hours! Our subscribers will be locking in half profits as soon as we send this update out! We are also closing another trade that is up 69% in 2 days. Subscribers, check the Members Area for the updates!
We will be back Sunday night with the Weekly Wrap and some chart work for you to study. Until then, have a great weekend!
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in Market Commentary, Trade Update, Trading Tips | Comments Off