|
|
|
|
|
 |
|
|
 |
Sunday, October 4th, 2009
3:45pm (EST)
Special Note: We are sending today’s Weekly Wrap early. I am away on travel and hope to be back in the office by Monday morning. In case I’m not, this is Monday Morning’s Update. There is a NEW TRADE for Monday morning, Pepsico (PEP, $60.90, up $2.44), that is profiled in the Members Area. Our latest trade, Abercrombie & Fitch (ANF, $30.62, down $1.08) is up 50% in less than a week and we are hoping for the same returns, if not more, for the Pepsico trade. To read the latest update on all of our trades you must be a premium member which gives you full access to our Members Area. Our last closing trade in Nike (NKE, $62.02, down $0.48) netted our subscribers profits of up to 200%….
Market Commentary
It was no bull and all bear last week as the market fell 2% on average. Friday was setting up to be an explosive day as the Dow futures were down over 100 BEFORE the opening bell rang. However, the drop was marginal and although the bulls lost the week, Friday’s battle was a huge victory. The fact that the Dow lost only 20 points is clear indication the bulls aren’t going anywhere.
For the week, the Dow lost 177 points, or 1.8%, and closed at 9,487. The Nasdaq finished the week at 2,048, down 43 points, or 2%. The S&P 500 dropped 19 points, or 1.8%, and settled at 1,025.
The market was hit with a bunch of disappointing economic news and Friday’s unemployment report was suppose to be a canon ball going through paper for the bears. The fact that the bulls held their ground gives further indication there are buyers on the sidelines. It doesn’t matter if the market is overvalued or undervalued, it never does.
The market doesn’t care about our personal wins and losses and although we may be overbought at these levels you can’t deny the action and aggressiveness of the bulls since the March lows. The thing Wall Street forgets to realize is that the market came down from a much higher level as the Dow was standing at 14,000 in 2007…
A 50% drop in the Dow which is where we were in March when the Dow was at 6,500 would mean over a 100% return to get back to the 14,000 level. We certainly know that isn’t going to happen this year but I think it is important for us to remember where we came from. So I don’t buy into that “we have come too far, too fast” spit that we have been hearing. Those same pundits were calling for a “bounce” BEFORE we bottomed at 6,500 because they couldn’t believe the sell-off. Now it’s the opposite.
Third-quarter earnings should give us a better sense of whether companies managed to grow their revenues to produce earnings growth or if we see continued cost-cutting. This helped with 2Q earnings but the same theme might not work this time around.
The bears got a “little taste” of the bulls last week so you know they aren’t going anywhere either. We are still in a volatile, nervous market which means we could get some really big moves in October.
As we head to press, the Dow futures are down 36, S&P 500 futures are off by 6 while the Nasdaq 100 futures are lower by 8. Of course, the overseas markets will affect those numbers and things could change by Monday morning but it appears we could start the week slightly lower.
Subscribers don’t forget to check the Members Area for the latest trade and updates. The update is posted under the Monday, October 5th link.
Earnings
Monday: Mosaic (MOS, $46.18, down $0.25), Robbins & Myers (RBN, $22.60, down $0.41), RPM International (RPM, $18.08, up $0.20) and Team (T, $16.77, down $0.03).
Tuesday: AngioDynamics (ANGO, $13.80, up $0.05), Chattem (CHTT, $64.59, down $0.31), Pepsi Bottling Group (PBG, $37.25, up $0.76) and Yum! Brands (YUM, $33.15, up $0.02).
Wednesday: Acuity Brands (AYI, $30.98, down $0.18), Alcoa (AA, $12.82, down $0.10), Costco Wholesale (COST, $56.47, up $0.78), Family Dollar (FDO, $26.63, down $0.21), Helen of Troy (HELE, $18.83, up $0.13), Monsanto (MON, $74.93, down $0.18), Ruby Tuesday (RT, $7.89, up $0.13) and Wolverine World Wide (WWW, $24.14, down $0.07).
Thursday: International Speedway (ISCA, $27.09, down $0.16), Marriott International (MAR, $25.61, down $0.75) and Pepsico (PEP, $60.90, up $2.44).
Friday: Cantel Medical (CMN, $15.29, up $0.15) and Infosys Technologies (INFY, $47.85, up $0.60).
Rick@MomentumOptionsTrading.com
Tags: anf, momentum options trades, momentum stock picks, Nike, NKE, option blog, option trading picks, options mentoring, options trading, PEP, PepsiCo
Posted in Company Commentary, Economic News, Entertainment Stocks, Financial Stocks, Market Analysis, Market Commentary, Option Trades, Sectors, Stock Earnings, Strategies, Watch Lists | 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
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
Thursday, August 20th, 2009
12:30pm (EST)
Abercrombie & Fitch (ANF, $31.68, up $0.32)
September 32 puts (ANFUJ, $2.05, down $0.20)
Entry Price: $1.25 (8/14/09)
Exit Target: $2.75 (closed half at $2.75 on 8/19)
Return: 120%
Stop: $2.00
Action: Abercrombie has bounced back a little today and I suggested closing out the play yesterday after the calls hit a high of $2.90. Monday night, here were my thoughts:
“Abercrombie was a train wreck all day and we did well by buying the puts during Friday’s run-up in the shares. Our exit target is $2.50 but we may get more juice out of this lemon if ANF dips below $30. Notice our stop was raised to protect profits” (END)
Well, there was one more squeeze left in that lemon but that is it. If you left half of the position open, the stop of $2.00 was hit earlier this morning so this trade is now officially CLOSED.
Bank of America (BAC, $17.17, up $0.42)
January 20 calls (BYOAT, $1.30, up $0.10)
Entry Price: $1.18 (8/12/09)
Exit Target: $2.20
Return: 10%
Stop: $1.10-$1.15
Action: BofA is back over $17 again after hearing our footsteps. We raised the stop Monday night to $1.15 and the stock has rebounded nicely since. The gains aren’t as great as some of the closer month options. For instance, the August 17 calls (BYOHQ, $0.27, up $0.12) are up 75% today but they EXPIRE on Friday. At current levels they are only worth 17 cents so you can see how much premium is built into these options with only one day left. I went further out to protect us from a market decline and if we don’t get one we can still enjoy the gains.
Citigroup (C, $4.34, up $0.21)
January 7.50 calls (CAQ, $0.17, up $0.03)
Entry Price: $0.14 (8/12/09)
Exit Target: 50 cents
Return: 21%
Stop: None
January (2011) 10 calls (VRNAB, $0.44, up $0.02)
Entry Price: $0.40 (8/12/09)
Exit Target: 80 cents
Return: 10%
Stop: None
Action: Citigroup is getting a lot of Wall Street love this morning as it is showing a 5% pop. I wish I would have gotten you in the August 4 calls (CHW, $0.34, up $0.19) this morning but I just sat here and watched them because we already have two open positions. They are up 125% but again, these are one of them cheap-in-the-money call plays that you could have played during expiration week and they opened this morning at 15 cents. I don’t think you gamble with them at current levels but these are the types of trades that I was talking about…read on.
Home Depot (HD, $26.63, down $0.12)
August 26 puts (JGLTM, $0.06, down $0.01)
Entry Price: $0.54 (8/17/09)
Exit Target: $1.00
Return: -89%
Stop: None
August 25 puts (HDTE, $0.01, flat)
Entry Price: $0.26 (8/17/09)
Exit Target: 50 cents
Return: -96%
Stop: None
Action: These options expire tomorrow and it’s highly unlikely they make it back to positive territory. However, you still have to watch them in case they do end up in-the-money. The premiums weren’t that much so when you see a loss of 99% it isn’t as bad as it looks. I showed the Citigroup August 4’s call options in the aforementioned trade so that you would understand that I believe it is okay to play cheap out-of-the-money options. I usually only do a few trades during these weeks and Home Depot was the only one for August. We had a great July when we cashed in our several of these types of trades but the market was just too choppy for Home Depot.
Imax (IMAX, $9.18, up $0.05)
September 7.50 calls (IMQIU, $1.70, flat)
Entry Price: $1.90 (8/4/09)
Exit Target: $3.00
Return: -11%
Stop: $1.00
March 2010 12.50 calls (IMQCV, $0.45, flat)
Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: 0%
Stop: None
Action: Continue to hold.
Potash (POT, $96.64, up $1.46)
September 110 calls (PYPIB, $1.40, up $0.20)
Entry Price: $1.35 (8/20/09)
Exit Target: $2.10+
Return: 4%
Stop: 65 cents
Action: This was a trade recommended this morning before the bell and the options opened at $1.35. They have traded to a low of $1.30 so most of you should be in for under $1.40. I’d like to see Potash run to $100 so we could maybe get out before the weekend so let’s see where we are at on Friday.
Wells Fargo (WFC, $27.62, up $1.01)
September 26 puts (FHUUZ, $0.75, down $0.35)
Entry Price: $1.30 (8/11/09)
Exit Target: $2.60
Return: -30%
Stop: $1
Action: The $1 stop was hit this morning so this trade is also closed. I thought Wells Fargo would be offering more stock this week or last week and although this position was profitable for a minute, it ended up succumbing to the bulls.
Note: American International Group (AIG, $33.49, up $6.85) is up 25% today and it’s hard to believe the stock has rebounded from a low of $13 since the beginning of August. Incredible. The September 35 calls (IKJII, $4.10, up $3.05) have soared nearly 300% after opening at $1.22. There is a combination of a lot of things going on with AIG right now and although I don’t trust this dog to go long, there may be a chance for a STRANGLE option trade. The September 25 puts (AIGUY, $1.65, down $1.05) have dropped 40%.
The stock is up on some CEO fluff who believes he can “maintain shareholder value”. Good grief. Give me break. He failed to mention that his company did a 20-to1 reverse stock split and right now the shorts are getting hammered. I’m going to do some more research on this one but a strangle trade is when you play both sides of the ball hoping for a big move. AIG is so volatile that it fits the bill. You can do 2-to-1 with puts to calls but it is expensive. I almost want to suggest the put options straight-up but short squeezes can be tough to predict. I do know that AIG is not worth $33 right this second but it’s a tough call. Don’t take any action just yet because I’m thinking out loud. I’ll be back with an update tonight.
Rick@MomentumOptionsTrading.com
Tags: AIG, anf, bac, c, hd, Imax, options trading strategies, POT, wfc
Posted in Financial Stocks, Market Analysis, Market Commentary, Option Trades, Strategies, Trading Tips | No Comments »
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 »
|
|
|  | | | |
Get RSS Feed
3Q Earnings Kick-Off Start This Week
Sunday, October 4th, 2009
3:45pm (EST)
Special Note: We are sending today’s Weekly Wrap early. I am away on travel and hope to be back in the office by Monday morning. In case I’m not, this is Monday Morning’s Update. There is a NEW TRADE for Monday morning, Pepsico (PEP, $60.90, up $2.44), that is profiled in the Members Area. Our latest trade, Abercrombie & Fitch (ANF, $30.62, down $1.08) is up 50% in less than a week and we are hoping for the same returns, if not more, for the Pepsico trade. To read the latest update on all of our trades you must be a premium member which gives you full access to our Members Area. Our last closing trade in Nike (NKE, $62.02, down $0.48) netted our subscribers profits of up to 200%….
Market Commentary
It was no bull and all bear last week as the market fell 2% on average. Friday was setting up to be an explosive day as the Dow futures were down over 100 BEFORE the opening bell rang. However, the drop was marginal and although the bulls lost the week, Friday’s battle was a huge victory. The fact that the Dow lost only 20 points is clear indication the bulls aren’t going anywhere.
For the week, the Dow lost 177 points, or 1.8%, and closed at 9,487. The Nasdaq finished the week at 2,048, down 43 points, or 2%. The S&P 500 dropped 19 points, or 1.8%, and settled at 1,025.
The market was hit with a bunch of disappointing economic news and Friday’s unemployment report was suppose to be a canon ball going through paper for the bears. The fact that the bulls held their ground gives further indication there are buyers on the sidelines. It doesn’t matter if the market is overvalued or undervalued, it never does.
The market doesn’t care about our personal wins and losses and although we may be overbought at these levels you can’t deny the action and aggressiveness of the bulls since the March lows. The thing Wall Street forgets to realize is that the market came down from a much higher level as the Dow was standing at 14,000 in 2007…
A 50% drop in the Dow which is where we were in March when the Dow was at 6,500 would mean over a 100% return to get back to the 14,000 level. We certainly know that isn’t going to happen this year but I think it is important for us to remember where we came from. So I don’t buy into that “we have come too far, too fast” spit that we have been hearing. Those same pundits were calling for a “bounce” BEFORE we bottomed at 6,500 because they couldn’t believe the sell-off. Now it’s the opposite.
Third-quarter earnings should give us a better sense of whether companies managed to grow their revenues to produce earnings growth or if we see continued cost-cutting. This helped with 2Q earnings but the same theme might not work this time around.
The bears got a “little taste” of the bulls last week so you know they aren’t going anywhere either. We are still in a volatile, nervous market which means we could get some really big moves in October.
As we head to press, the Dow futures are down 36, S&P 500 futures are off by 6 while the Nasdaq 100 futures are lower by 8. Of course, the overseas markets will affect those numbers and things could change by Monday morning but it appears we could start the week slightly lower.
Subscribers don’t forget to check the Members Area for the latest trade and updates. The update is posted under the Monday, October 5th link.
Earnings
Monday: Mosaic (MOS, $46.18, down $0.25), Robbins & Myers (RBN, $22.60, down $0.41), RPM International (RPM, $18.08, up $0.20) and Team (T, $16.77, down $0.03).
Tuesday: AngioDynamics (ANGO, $13.80, up $0.05), Chattem (CHTT, $64.59, down $0.31), Pepsi Bottling Group (PBG, $37.25, up $0.76) and Yum! Brands (YUM, $33.15, up $0.02).
Wednesday: Acuity Brands (AYI, $30.98, down $0.18), Alcoa (AA, $12.82, down $0.10), Costco Wholesale (COST, $56.47, up $0.78), Family Dollar (FDO, $26.63, down $0.21), Helen of Troy (HELE, $18.83, up $0.13), Monsanto (MON, $74.93, down $0.18), Ruby Tuesday (RT, $7.89, up $0.13) and Wolverine World Wide (WWW, $24.14, down $0.07).
Thursday: International Speedway (ISCA, $27.09, down $0.16), Marriott International (MAR, $25.61, down $0.75) and Pepsico (PEP, $60.90, up $2.44).
Friday: Cantel Medical (CMN, $15.29, up $0.15) and Infosys Technologies (INFY, $47.85, up $0.60).
Rick@MomentumOptionsTrading.com
Tags: anf, momentum options trades, momentum stock picks, Nike, NKE, option blog, option trading picks, options mentoring, options trading, PEP, PepsiCo
Posted in Company Commentary, Economic News, Entertainment Stocks, Financial Stocks, Market Analysis, Market Commentary, Option Trades, Sectors, Stock Earnings, Strategies, Watch Lists | Comments Off