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Wednesday, October 7th, 2009
1:00pm (EST)
The bulls are taking a breather following the 2-day rally that has seen the Dow run-up 250 points. The index hit a high of 9,793 on Tuesday but is currently down 41 points to 9,689. Still, the momentum the bulls are showing points towards Dow 10,000 in the coming weeks.
I’ve mentioned most of the big earnings from this morning and the main one after the bell will be Alcoa (AA, $13.97, up $0.08). The stock has had a pretty good run this week heading into earnings and the option activity is pointing towards more upside.
The October 14 calls (AAJN, $0.63, up $0.02) have traded 14,000 contracts today while the October 14 puts (AAVN, $0.65, down $0.06) have traded only 4,000 contracts.
Wall Street is expecting the company to post a third-quarter loss of 11 cents per share on revenue of $4.5 billion. Last quarter, the company reported its third consecutive quarterly loss, but said some markets may be stabilizing.
In the year-earlier period, Alcoa earned 33 cents per share on revenue of $7.23 billion.
We will leave this trade alone but there is a NEW TRADE today in the Members Area. We were closed out of our Abercrombie & Fitch (ANF, $32.57, up $1.01) trade yesterday for a 27% gain so we have room to add one.
Subscribers, check the Members Area for the NEW TRADE.
Tags: AA, Abercrombie & Fitch, Alcoa, anf, options picks, options trading strategies
Posted in Hot Stocks | Comments Off
Friday, October 2nd, 2009
10:40am (EST)
Fire away, hey-hey…
The bulls invited the bears into the ring and immediately took the bears best shot. The unemployment report came in as expected, 9.8%, but the job loss of 263,000 was way more than the 180,000 Wall Street had expected.
I told you this morning I was hearing whispers for a loss of a 250,000 and we were expecting some downside. When the report was released at 8:30am (EST) the futures sank even further. Dow futures were down about 30 and zoomed to 100 once word hit the Street.
However, the bulls took the bears’ best left hooks on the chin and are still standing. The Dow opened with a 70 point loss but has nearly clawed (no pun intended) its way back to positive territory. The Dow is only down 2 points and is currently trading at 9,506. The Nasdaq has just turned positive as is up 5 points to 2,062. The S&P is flat at 1,029.
The action isn’t what we had planned this morning and part of that could because of a weaker dollar. If the dollar would have rallied then we were looking for the commodity stocks to take a hit. They did, but the weaker dollar kept the plunge to a minimum.
I had profiled a Freeport McMoRan (FCX, $64.98, down $0.42) trade this morning in the Members Area and the put options we were looking at opened higher than our limit price. We also didn’t get the sell-off we had planned for so we did not take the trade. The stock hit a low of $63 but it wouldn’t surprise me to see this one rebound along with the market.
I also talked about opening a Research In Motion (RIMM, $66.06, down $1.10) position if the market opened HIGHER but that was never in the cards once we got the Jobs Report. However, I did say the stock is right at support which is $66-$67 so those call options may get interesting next week. We don’t need to rush out and buy them today but we will keep them on the Watch List and may look at them again next week.
Other than that, our Abercrombie & Fitch (ANF, $31.21, down $0.49) trade continues to gain momentum and appears safe to hold over the weekend. At current levels, it has returned 30%.
We planned for either a continued sell-off or a huge rally today and it looks as though this battle is just getting started. The thing to watch for is how we go into the closing bell today. It’s hard to say where the market ends the session because the bulls could end up stealing today’s round.
If they do, it would be bullish heading into next week’s earnings.
I wanted to get this out before the 1pm update and this is the 1pm update. With so much going on this morning I wanted to make sure everybody was following the game plan. No need to open new positions heading into the weekend and we will sit on what we got.
I will be looking at possible trades for next week the rest of the day to see if there is something there and the last hour of trading will be interesting to watch.
I’ll be back Sunday night, more likely, Monday morning with the weekly update and the playbook as we head into earnings season. Alcoa (AA, $12.80, down $0.11) kicks things off on Wednesday.
Rick@MomentumOptionsTrading.com
Tags: AA, Abercrombie & Fitch, Alcoa, anf, FCX, Freeport-McMoRan, options picks, Research in Motion, RIMM
Posted in Hot Stocks | Comments Off
Friday, October 2nd, 2009
8:15am (EST)
I wanted to send today’s update early because there are a lot of things I’m looking at as we head into this morning’s Jobs Report.
If you have been following the market this week then you already know we are watching a scary movie. You know, the ones that always have the “idiot” who goes after the bad guy. If you’re watching the movie, they always show US both sides of the story but it always ends up bad for the hero.
Better yet, it feels like Wall Street is standing in front of a bear cave with a flashlight asking, “you going in?”
I often look at my notes to get a snapshot of the market which really helps me with market direction. I do it daily, weekly, monthly and sometimes, yearly. That is why I quote myself here in the blog often so that I can remind myself of events, emotions and what is hot or what’s not.
This week, I’ve been talking how the bears have been winning the battles and that I didn’t want to be long (meaning bullish) heading into Friday’s unemployment report. We knew there was going to be volatility this week and it felt like the bulls were going to run until Thursday once we kicked things off but we also knew the bears would show up. The bulls were begging them into the ring. Well, be careful what you wish for.
The Dow fell 203 points on Thursday and finished the session at 9,509. The 2% drop was a death by a thousand cuts because nothing worked yesterday unless you were short. And we were (sly grin) with Abercrombie & Fitch (ANF, $31.70, down $1.18). That trade is off to a good start…up 20%.
The point is we are still “trading” the market and all week I have used the words “historic”, “battle”, and “volatility”. Even when we took the Nike (NKE, $62.50, down $2.20) trade and subscribers made mad money of up to 200%, I was cautioning to close the trade and use the stop because I didn’t want to be “long” going into Friday. I even mentioned Nike could “fill in the gap” from $60 to $64 after jumping nearly $5 on Wednesday.
I don’t even feel nervous with the Abercrombie trade because it feels like this market is headed lower. I’ve been saying “if we print 10%” on unemployment then it could get ugly. The Dow may have fell 2% but the real carnage was going on in the Nasdaq. The drop of 65 points, to 2,057, was 3%.
It has been over 25 years since the unemployment rate has hit 10%. Wall Street is expecting the rate to come in at 9.8%, from 9.7% in August. Employers are forecast to have cut 180,000 jobs, which would be the fewest since August 2008 but there are whisper numbers that this number could come in at 250,000. Yikes!
If you can’t hear the bears growling then you are deaf.
Now here is where I LOVE the market. Let’s say we get a 10.1% number (I’m not predicting this but I do feel it is going to be bad) and the market starts to tank from the open. If we are down 100 points, then 200, then 300…everyone will be panicking and all you have to do is be calm and buy put options.
Which ones? Well, you will have to read the Members Area for today’s trades because we will have some opportunities today.
The possibility of a surprise exists and I have also planned to buy call options if we get a HUGE rally. The unemployment numbers could come in at 9.5% (again, not predicting) and the bulls could “blow the roof” off. Dow 10,000 would easily be in the rear view mirror.
If you are a seasoned optioned trader then this isn’t your first rodeo. As options traders, we live this stuff and it is like our SuperBowl. It’s exciting, scary, fun and dangerous which is why we play the game…
Subscribers, check the Members Area for the playbook. If it is your first rodeo, then come on in and join us.
As we head to press, Dow futures are down 28, Nasdaq 100 futures are down 5 while the S&P 500 futures are down 3. These will change at 8:30am (EST) once the Jobs Report is released.
Rick@MomentumOptionsTrading.com
Tags: Abercrombie & Fitch, Nike options, option strategies, options blog, options newsletter, options track record
Posted in Economic News, Financial Stocks, Hot Stocks, Market Analysis, Option Trades | Comments Off
Thursday, October 1st, 2009
9:00am (EST)
The bulls and bears are having a battle this week and the action has been intense. On Wednesday, heavy punches were thrown and by the end of the day, the bears had made it 2-to1 for the week.
On Monday, the Dow rallied 124 points, Tuesday the Dow fell 47 after being down 84 points. Yesterday, the bears took the Dow down to 9,583, a loss of nearly 160 points, before the bulls brought us back to positive territory shortly after 1pm. We got some more selling pressure by 3pm and the bears pulled out the victory as the Dow closed down 30 points and settled at 9,712.
Friday is setting up to be “historic” and we should see a big break either way.
A couple of notes for this morning…
Moody’s (MCO, $20.46, down $0.35) fell to $19 and we were whip-sawed out of a recent trade but I still think it’s headed to $15.
Dust off your Queen albums as CIT Group (CIT, $1.21, down $0.99) looks like it will be the next one to “Bite the Dust”. The company appears to be headed for bankruptcy.
Bank of America’s (BAC, $16.92, down $0.24) CEO, Ken Lewis, can ditto that. He was last seen singing backup vocals as he gave up the head gig after coming back from vacation. This ought to be pretty good news for the stock today. We have had some great success trading BofA this year and although the timing is now right, the stock should be in the $20′s sometime in early 2010.
And finally, Nike (NKE, $64.70) had a banner day and thanks to all of you who emailed us to tell us your good fortunes. A lot of you made upwards of 200% and a lot of you banked up to 75% by playing it safe. This trade felt so good when I was typing it that I knew it was going to be golden. In fact, my fingers are tingling now as I have another trade ready for you this morning. Subscribers, check the Members Area for a New Trade on Abercrombie & Fitch (ANF, $32.88, down $0.39) and for the Current Trade Updates.
As we head to press, Dow futures are down 28, S&P 500 futures are down 4 while the Nasdaq 100 are down 6.
Rick@MomentumOptionsTrading.com
Tags: Abercrombie & Fitch, anf, bac, Bank of America, CIT, CIT Group, MCO, Moody's, Nike, NKE, options picks
Posted in Hot Stocks | Comments Off
Wednesday, August 19th, 2009
1:25pm (EST)
It looked like the market was going to fall off a cliff this morning but the bulls have stepped in and have now taken the market higher. Although volume is light, the Dow has rebounded off its low of 9,131 and is now up 89 points to 9,307. The Nasdaq is up 14 to 1,970 while the S&P 500 is up 9 to 998.
Abercrombie & Fitch (ANF, $31.35, down $0.12) traded to a low of $30.16 and here is what I said last night:
“The stock traded to a low of $31.25 and a break below $31 clears the way to our exit target of $30 for the stock and $2.50 for the puts…”
Bingo. The September 32 puts (ANFUJ, $2.35, up $0.20) traded to a high of $2.90 this morning so you should have at least sold half of the position at $2.75. Our EXIT target was $2.50 and these puts blew right thru that. We have a stop of $1.85 in place and we can raise this to $2.00 for the other half of the position.
I’ll be back tonight or in the morning with another update.
Rick@MomentumOptionsTrading.com
Tags: Abercrombie & Fitch, anf, options trading strategies, put options
Posted in Company Commentary, Option Trades | No Comments »
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Abercrombie Put Options Hit 100% Return
Wednesday, August 19th, 2009
1:25pm (EST)
It looked like the market was going to fall off a cliff this morning but the bulls have stepped in and have now taken the market higher. Although volume is light, the Dow has rebounded off its low of 9,131 and is now up 89 points to 9,307. The Nasdaq is up 14 to 1,970 while the S&P 500 is up 9 to 998.
Abercrombie & Fitch (ANF, $31.35, down $0.12) traded to a low of $30.16 and here is what I said last night:
“The stock traded to a low of $31.25 and a break below $31 clears the way to our exit target of $30 for the stock and $2.50 for the puts…”
Bingo. The September 32 puts (ANFUJ, $2.35, up $0.20) traded to a high of $2.90 this morning so you should have at least sold half of the position at $2.75. Our EXIT target was $2.50 and these puts blew right thru that. We have a stop of $1.85 in place and we can raise this to $2.00 for the other half of the position.
I’ll be back tonight or in the morning with another update.
Rick@MomentumOptionsTrading.com
Tags: Abercrombie & Fitch, anf, options trading strategies, put options
Posted in Company Commentary, Option Trades | No Comments »