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Wednesday, December 21st, 2011
9:15am (EST)
You could almost feel the market’s frustration with Europe and we told you a big move was coming either way once the situation came to a head. Following Monday’s pullback past support, the bulls were faced with a dilemma and looked as though they were either going to throw in the towel or come out fighting as the bottom of the current trading range appeared ready to fall.
We mentioned in our Weekly Wrap the bulls would need a catalyst or some good news to get their mojo back and here were some of our thoughts:
“There are 5 trading sessions left before Christmas is here and the market is closed next Monday. This means there are only 9 days left before the end of 2011. For you historian buffs, the market hasn’t had a losing pre-election year since 1939 so the bulls will be motivated to keep this streak alive. The other indexes have a little work to do but we saw some encouraging signs last week that still have us “bullish”.
We are also keeping a close eye on the Russell 2000 which may have bottomed after testing the 700 level once again. If this index can get back above 750 then it would be bullish. A drop below 700 would only confirm our bearish feeling.” (END)
The Dow soared 337 points, or 2.9%, to finish at 12,103. The blue-chips traded to a high of 12,117 and easily reclaimed the 11,800 and 12,000 resistance levels before running out of gas. These two areas will serve as short-term support again as the bulls’ eye another run back above 12,200. If cleared, there is a chance for a push up to 12,350-12,400 this week.
The S&P 500 jumped 36 points, or 3%, to settle at 1,241. The index went out near its high after getting past 1,225 but fell short of testing 1,250. This area has been a headache but if the market can clear this level then we can expect a test up to 1,275-1,300 over the next few weeks. The 1,200 level will still need to be watched if there is a pullback and 1,225 falls.
The Nasdaq zoomed 81 points, or 3.2%, to end at 2,603. Tech also went out near its high and the best news was the close above 2,600. This should clear the way for a run up to 2,650-2,675 if this level sticks with 2,550 providing short-term support. If the bulls can push 2,700 there could be a rush of cash coming off the sidelines.
The Russell 2000 added 30 points, or 4.2%, to close at 738.22. The index went out exactly on its high for the day and if you look at Sunday’s chart you will see why we are rooting for a close above 750.
The S&P 500 Volatility Index (VIX, 23.22, down 1.70) dropped 7% and traded to a low 22.54. Bingo. We have been harping on the 22.50 area since October.
Of course, yesterday’s rally won’t mean a hill of beans if the bulls are unable to hold these gains and advance past the next wave of resistance.
Futures are up as we head to press and look like this: Dow (+1); S&P 500 (-1); Nasdaq (+1). Subscribers, check the Members Area for the updates.
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, Market Commentary, VIX | Comments Off
Tuesday, December 13th, 2011
9:00am (EST)
The market continued its recent zig-zag action on Monday with the bears starting the week off with a win. We knew yesterday’s momentum wasn’t going to be reversed so we focused on support which, once again, held despite some crummy headlines. We would love to have a day where we didn’t have to type in “Europe debt crisis” but until the picture becomes clearer, we are stuck.
The good news is that all of the uncertainty is coming to a head and we should get another major market wave higher or lower here soon. The bears have everything they need to spark a selloff, yet, the bulls continue to hold support while pounding away at resistance.
The Dow dropped 162 points, or 1.3%, to finish at 12,021. The blue-chips traded to a low of 11,940 after Wall Street’s lunch break but recaptured the 12,000 level by the closing bell. There is further risk down to 11,800 and then 11,600 while resistance remains at 12,200.
The S&P 500 gave back 19 points, or 1.5%, to settle at 1,236. The index reached a low of 1,227 but held 1,225-1,220 which is what we wanted to see. Further help is down at 1,200 while overhead resistance at 1,250 will be today’s focus.
The Nasdaq fell 35 points, or 1.3%, to close at 2,612. Tech fell below 2,600 and bottomed at 2,591 before rebounding to finish back above this level. There is further weakness down to 2,550-2,550 but we are expecting a push back towards 2,650.
The other index that kept us bullish was the S&P Volatility Index (VIX, 25.67, down 0.71) which actually declined nearly 3% despite the market pullback. The VIX traded to a high of 27.73 and never came close to cracking 30 despite a nasty day. We have been saying since October the VIX could hit the low 20’s which would get the S&P 500 to 1,275-1,300.
For those of you who are new subscribers and may not understand the VIX, it works like this. A “normal” VIX reading under 20 (bullish) indicates confidence and calm in the market while a reading above 30 (bearish) indicates nervousness and panic. Right now we are in the middle as the market tries to get back to “normal”.
Futures are showing a slightly higher open this morning: Dow (+61), S&P 500 (+8), Nasdaq (+18). Subscribers, check the Members Area for the updates.
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
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Tuesday, November 29th, 2011
9:00am (EST)
The bulls were facing a make-or-break session on Monday (and last Friday) after the bears broke through several layers of support last week. The losses were historic for a Thanksgiving week and there was panic in the air following last Wednesday’s selloff. We did some late night homework to ready ourselves for Friday’s action, which got off to a good start, and to get a closer look at new support areas and possible new trades. Although the market ended lower that day, we saw some strength and wanted to get positioned for another possible rally and some good news.
There weren’t many investors willing to take on the risk of going long but we knew with the eurozone leaders meeting today, there would be an urgency to set guidelines to leverage the region’s bailout fund.
Rumors were flying over the weekend after word spread the International Monetary Fund (IMF) was preparing to give aid to Italy, but that story was eventually denied. However, France and Germany seem ready to move forward with the proposed expansion of the European Financial Stability Facility (EFSF) which would insure up to 30% of debt offerings to struggling countries. (Side note: Moody’s (MCO, $32.65, up $0.32) tried to step in front of the bulls train by warning that the ongoing situation is “threatening the credit standing of all European sovereigns”).
We were also betting on Black Friday being a Green Payday for retailers. It was the best BF ever according to estimates by the National Retail Federation as a record number of shoppers hunted for sales from Thursday to Sunday. We went to our local Best Buy (BBY, $26.49, up $0.86) to check the lines and it was insane. Judging from the looks of things, Microsoft (MSFT, $24.87, up $0.57) could be a big winner this holiday shopping season. We also expected Cyber Monday to be just as big and early reports are sales were up 15% compared to last year.
As a result, the market recorded its best post-Thanksgiving Monday ever with the major indexes gaining 3%, on average.
The Dow dashed 291 points higher, or 2.6%, to finish at 11,523. We didn’t get the close above 11,600 we were looking for but there wasn’t a dramatic pullback from the high of 11,562. If the bulls can advance today, great, but the index will need to hold 11,400-11,350 on a pullback.
The S&P 500 added 34 points, or 2.9%, to settle at 1,192. We were pleased with the close above 1,175 which is now “short-term” support and the bulls will need to clear the 1,200 level and the 50-day moving average to keep the bears at bay.
The Nasdaq soared 86 points, or 3.5%, to close at 2,527. The bulls easily cleared the 2,500 level and held 2,525 which were impressive feats. A move back above 2,550 and then 2,600 will be keys to a sustained rally.
The S&P 500 Volatility Index (VIX, 32.13, down 2.34) fell 7% and we have mentioned the possibility of the VIX testing the low 20’s by yearend. However, the bulls will need to get under 30 first, while at the same time holding down 36.
Yesterday’s move was a start and futures are pointing towards another positive open this morning. Dow futures are up 30 points to 11,528 while the S&P futures are higher by 5 points to 1,196. The Nasdaq 100 futures are advancing 4 points and are at 2,225. Subscribers, check the Members Area for the current trades updates and stay on your toes for a possible Trade Alert this morning.
Tags: chicken option trade, chicken trade, momentum, momentum options, option mentoring, stock options trading advisors, straddle option trade
Posted in Market Analysis, Market Commentary, VIX | Comments Off
Monday, November 28th, 2011
9:00 (EST)
The market continued its recent slide as the bears had their best bull feast in nearly 80 years as Wall Street fell 5% last week. The recent selling pressure became much more serious as all of the indexes fell below their 50-day moving averages (MA) with the bears stretching their winning streak to seven-straight sessions.
The headline news read like a Vegas betting parlor as a number of European countries face further risks of defaulting. Germany was the latest country which showed a chink in the armor after trying to raise $6 billion euro but was only able to raise a little over half of it. Spain also went to the well and was successful in its bond auction but the yields came at a hefty price. Italy faces a huge crisis in 2012 if they can’t raise more dough, and they are trying, but it’s costing them an arm-and-leg.
The news here at home continues to come in better-than-expected and this week will be big with a number of month-end reports due out. As far as the charts, they have been stretched which often happens when headline news trumps the technical picture. The bears have clearly had the advantage and at some point there will be a rebound but until Europe can figure out its mess, the market will be held hostage.
The Dow slipped 26 points, or 0.2%, to finish at 11,232 on Friday’s shortened session. We went into the week looking for 11,600 to hold but that level was taken out on Monday. Our next downside targets were 11,400 and then 11,200, which held, but there is risk down to 10,800 this week if current levels don’t hold. If the bulls can get past 11,400 (black line, purple circles) then they could make a run back towards 11,600 and then 12,000 but the news has got to be awfully good. For the week, the Dow dropped 564 points, or 4.8%, and is now down 346 points, or 3% YTD…
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Futures are pointing towards a strong start for today’s session and look like this: Dow (+255), S&P 500 (+34), Nasdaq 100 (+53). We recommended 4 new trades on Friday and after two weeks of being patient and building new positions, hopefully we get the surge we have been expecting. Subscribers, check the Members Area for the updates.
Tags: Dow, Momentum stocks, stock options trading advisors
Posted in Apple, BioTech, China, Commodities, Company Commentary, Covered Calls, Earnings, Economic News, Entertainment Stocks, European Union (EU), Financial Stocks, Futures, Gold, Google, Hot Stocks, IPOs, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Oil, Option Trades, Rick's Account, Sectors, Stock Earnings, strangle option trades, Trade Update, Trading Psychology, Trading Tips, Uncategorized, VIX, Watch Lists, Yahoo / Microsoft | Comments Off
Friday, November 25th, 2011
9:00am (EST)
The bears pushed their winning streak to 6-straight sessions on Wednesday after punishing the bulls for another 2% loss. The selling pressure picked up into the close and another layer of support was cracked.
The Dow fell 236 points, or 2.1%, to finish at 11,257. The index easily fell through the 11,400 level which was tripped shortly after the start of trading which opened the door for a test down to 11,200. Given the damage at the close with the blue-chips going out on their lows, we could see 11,000-10,800 come into play in today’s shortened session. The bulls will try to capture 11,350-11,400 going into the weekend.
Side note: Dow component, Bank of America (BAC, $5.14, down $0.23) hit a fresh 52-week low after losing another 4% and looks cheap enough now to start half positions. If the stock falls to $3, buy the other half, and your average cost is now $4. In a year (or two) when it’s a $6 you will have a 50% return.
The S&P 500 dropped 26 points, or 2.2%, to end at 1,161. We mentioned earlier in the week it would be important for 1,175 to hold and we penciled in a test to 1,150 if it didn’t. It now appears the S&P could trade down to 1,125-1,100 if the bulls don’t rebound today or Monday.
The Nasdaq tanked over 60 points, or 2.4%, to settle at 2,460. We have outlined the importance of the bulls holding 2,500, after 2,600 failed last week, but there is now further risk down to 2,400-2,350.
As dire as the selloff has been, one interesting note has been the action in the S&P Volatility Index (^VIX, 33.98, up 2.01) which only gained 6% on Wednesday. The index has failed to crack 36 all week so watch this level closely over the next few sesions.
We will go over all of the charts on Monday but we are looking at getting into a trade today. Subscribers, check the Members Area for the current updates and pay close to attention to our Watch List which has a number of trades that are looking good.
Futures are showing another lower open and look like this: Dow (-10), S&P 500 (-3), Nasdaq (-2).
Tags: blue-chip stocks, chicken option trade, chicken trade, momentum, momentum options, option mentoring, stock options trading advisors, straddle option trade
Posted in Market Analysis, Market Commentary, VIX | Comments Off
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Bulls Answer Bell
Wednesday, December 21st, 2011
9:15am (EST)
You could almost feel the market’s frustration with Europe and we told you a big move was coming either way once the situation came to a head. Following Monday’s pullback past support, the bulls were faced with a dilemma and looked as though they were either going to throw in the towel or come out fighting as the bottom of the current trading range appeared ready to fall.
We mentioned in our Weekly Wrap the bulls would need a catalyst or some good news to get their mojo back and here were some of our thoughts:
“There are 5 trading sessions left before Christmas is here and the market is closed next Monday. This means there are only 9 days left before the end of 2011. For you historian buffs, the market hasn’t had a losing pre-election year since 1939 so the bulls will be motivated to keep this streak alive. The other indexes have a little work to do but we saw some encouraging signs last week that still have us “bullish”.
We are also keeping a close eye on the Russell 2000 which may have bottomed after testing the 700 level once again. If this index can get back above 750 then it would be bullish. A drop below 700 would only confirm our bearish feeling.” (END)
The Dow soared 337 points, or 2.9%, to finish at 12,103. The blue-chips traded to a high of 12,117 and easily reclaimed the 11,800 and 12,000 resistance levels before running out of gas. These two areas will serve as short-term support again as the bulls’ eye another run back above 12,200. If cleared, there is a chance for a push up to 12,350-12,400 this week.
The S&P 500 jumped 36 points, or 3%, to settle at 1,241. The index went out near its high after getting past 1,225 but fell short of testing 1,250. This area has been a headache but if the market can clear this level then we can expect a test up to 1,275-1,300 over the next few weeks. The 1,200 level will still need to be watched if there is a pullback and 1,225 falls.
The Nasdaq zoomed 81 points, or 3.2%, to end at 2,603. Tech also went out near its high and the best news was the close above 2,600. This should clear the way for a run up to 2,650-2,675 if this level sticks with 2,550 providing short-term support. If the bulls can push 2,700 there could be a rush of cash coming off the sidelines.
The Russell 2000 added 30 points, or 4.2%, to close at 738.22. The index went out exactly on its high for the day and if you look at Sunday’s chart you will see why we are rooting for a close above 750.
The S&P 500 Volatility Index (VIX, 23.22, down 1.70) dropped 7% and traded to a low 22.54. Bingo. We have been harping on the 22.50 area since October.
Of course, yesterday’s rally won’t mean a hill of beans if the bulls are unable to hold these gains and advance past the next wave of resistance.
Futures are up as we head to press and look like this: Dow (+1); S&P 500 (-1); Nasdaq (+1). Subscribers, check the Members Area for the updates.
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, Market Commentary, VIX | Comments Off