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Wednesday, September 1st, 2010
12:30pm (EST)
The bulls used some overseas news to stage a big rally this morning while economic reports continue to come in mixed here in the US. Futures were pointing towards a strong open after China and Australia reported growth in their economies while a better-than-expected ISM number here at home added some extra gravy.
China’s said its manufacturing sector rose in August for the first time in four months while Australia’s economy grew by the fastest pace in three years during the second quarter. Meanwhile, America’s Institute for Supply Management’s manufacturing index grew to 56.3 in August from 55.5 in July. Wall Street had been expecting a decline to 53.0.
The rally has been a head scratcher for the bears given that the ADP report said private employers cut 10,000 jobs in the U.S. last month compared to a gain of 37,000 jobs in July. This doesn’t bode well for Friday’s “official” report on unemployment but the bulls don’t care. They are partying today.
The Dow is currently up 234 points, or 2.3%, and is at 10,248 while the S&P 500 is higher by 29 points, or 2.7%, to 1,077. The Nasdaq is showing a gain of 56 points, or 2.7%, and is at 2,170.
Resistance levels are Dow 10,200; S&P 500 1,070; and Nasdaq 2,150. These levels have obviously been “stretched” and we will have to see how the gains hold up into the close.
In corporate news, Apple (AAPL, $250.45, up $7.35) will be giving Wall Street an update on its product line and investors will be able to watch the event in real-time streaming video over the internet. We are expecting the company to announce an upgrade for the iPod touch which could include a camera with the same touch screen and operating system as the new iPhone4.
There is also chatter the company could roll-out a newer version of its iTV at a price of $99 which could jump start sales. It’s no secret Apple is negotiating with the big cable and TV studios for the right to rent their shows on iTunes which continues to grow at an incredible pace.
We will be back in the morning with a full update but are expecting Friday to be insane. The ADP report is usually a good indicator on what the numbers for unemployment are going to look like and the bulls could get sideswiped if they aren’t careful. On the other hand, today’s rally has been enough for the bulls to break key resistance levels and if they hold, the market could continue to rally no matter what Friday’s numbers are.
The key thing missing in today’s rally is the lack of volume…
Tags: AAPL, Apple, option picks, stock options trading
Posted in Apple, Market Analysis, Market Commentary | Comments Off
Monday, August 2nd, 2010
1:05pm (EST)
There was little doubt the market was going to test resistance levels again today as futures were showing a strong start to the session. Most of the good news came from across the pond as a number of European banks reported better-than-expected earnings and strong PMI data had Wall Street giddy.
The bulls also got a lift after the ISM number came in above expectations. The Institute for Supply Management reported its manufacturing index fell to 55.5% in July from 56.2% in June. Analysts were looking for a reading of 55.0% and anything over 50% indicates growth. Another sprinkle of good news came when construction spending for June showed an increase of 0.1% versus the 0.8% decline that had been forecast.
As a result, the Dow is enjoying a 176 point pop, or 1.7% and is at 10,642. The S&P 500 is up by 21 points, or 1.9%, and is trading at 1,122. The Nasdaq is higher by 34 points, or 1.5%, and was last seen at 2,288.
The Dow has pushed past the 10,600 level and is eyeing 10,800 but we are more concerned with the S&P 500 and Nasdaq as they give a better snapshot of a wider range of industries.
We said in our Weekly Wrap that the upside would be 2,300-2,350 for the Nasdaq and 1,125-1,150 for the S&P and as you can see we are once again right at the first wave of resistance. Perhaps the game-changer will be Friday’s unemployment figures but until the bulls break through it’s hard to jump on their back. It’s also frustrating to side with the bears as they have wasted some good opportunities to get back to middle ground.
One stock going through the same pressures as the market is Research In Motion (RIMM, $56.63, down $0.90). Shares were rallying ahead of Tuesday’s launch of their new, touch smartphone, but are down today after the Mideast said it might suspend use of the device over security concerns.
To make a long story short, the company has until mid-October to come up with a fix for securing encrypted messages but the countries only account for 3% of its total subscriber base. However, if the new BlackBerry 9800 Slider fails to impress users and the threat of other countries following suit with a ban, then RIMM could be in trouble.
There is room for two or three dominate smartphone makers/ providers in the space and RIMM will likely settle for third place once the dust settles. Apple (AAPL, $262.25, up $5.00) and Google’s (GOOG, $491.33, up $6.48) toys are head-and-shoulders above RIMM’s devices and the company is simply playing catch-up.
We have a lot to cover in our Members Area so let’s get on it. We will be back in the morning with another full update so stay tuned.
Tags: AAPL, Apple, call options, GOOG, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, Research In Motion email outage, stock options trading, volatile options
Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off
Tuesday, July 27th, 2010
12:50pm (EST)
The market is mixed after getting off to a good start but less than stellar economic news has cooled the enthusiasm. Earnings continue to dominate the headlines but the bulls are having trouble breaking through the upper resistance levels we outlined in the morning update.
The consumer confidence report came in at 50.4 for July which was only slightly below expectations of 51 but down from last month’s reading of 54.3. However, to put things in perspective, the decline follows last month’s nearly 10-point drop, from 62.7 in May. This report takes a pulse of the American consumer on how they feel about the economy, jobs and their outlook and it clearly shows they are still holding back on spending.
Elsewhere, the Standard & Poor’s/Case-Shiller 20-city home price index posted a 1.3% increase in May from April as 19 of 20 cities showed price gains month over month. Of course, this was helped by the federal tax incentives which attracted some buyers into the market but we expect prices to remain flat or down for housing over the next six months.
Turning to earnings, Dupont (DD, $40.52, up $1.53) is up 4% after reporting better-than-expected results. The company said profits came in at $1.2 billion, or $1.26 a share, versus $417 million, or $0.41 a share, in the year-ago period.
Revenue jumped 25% to $8.6 billion while analysts were expecting $8.3 billion/ $0.94 a share. DuPont also raised its 2010 earnings forecast to $2.90-$3.05 a share, up from $2.50-$2.70 and above Wall Street’s expectations of $2.64 a share.
U.S. Steel (X, $45.93, down $2.96) is getting pounded and is down 6% today after reporting a negative numbers for its most recent quarter. Before the open, the company reported a loss of $25 million, or $0.17 a share, versus a loss of $392 million, or $2.92 a share, in the year-ago period. Revenue rose to $4.7 billion from $2.1 billion. Excluding items, U.S. Steel would have earned $0.45 a share but blamed the weakening of the euro against the dollar during the quarter for the miss.
And this just in, Apple (AAPL, $262.69, up $3.41) plans to sell an unlocked iPhone 4 in Canada starting on Friday. The company is moving in Research In Motion’s (RIMM, $53.82, down $1.71) own backyard and plans to allow customers to shop around for a service plan.
As we head to press, the Dow is currently holding a slight gain of 27 points and is at 10,552 while the S&P 500 is up a point to 1,116. The Nasdaq is lower by 4 points and is at 2,292. Upside targets are Dow 10,600; S&P 1,125; and Nasdaq 2,300. To the downside look for Dow 10,400, S&P 1,100; and Nasdaq 2,250.
We will be back in the morning with another full update at 9am. We have updated our current trades as we have one company reporting earnings before the bell on Wednesday. Subscribers, check the Members Area for our latest comments.
Tags: AAPL, Apple, call options, Canada iPhone, DD, Dupont, how to trade options, iPhone 4, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, Research in Motion, RIMM, stock options trading, U.S. Steel, volatile options, x
Posted in Apple, Company Commentary, Earnings | Comments Off
Tuesday, July 20th, 2010
1:00pm (EST)
Futures were already pointing towards a sharply lower open this morning after a number of “disappointing” earnings announcements, but the Dow is holding three fingers up as it struggles to stay afloat above the 10,000 level.
It’s been all about the revenue numbers, and we mentioned this as the one key element that could hold any rallies down or keep us in this tight trading range that seems to have lasted longer than unwanted company.
The Dow is currently down 86 points, or 0.9%, to 10,068 while the S&P 500 is down by 6 points, or 0.6%, to 1,065. The Nasdaq is getting hit the hardest but has bounced off its lows. The Tech-heavy index is down 22 points, or 1%, and was last seen at 2,176.
The key levels we were watching are 1,050 for the S&P and 10,000 for the Dow. And wouldn’t you know it. The Dow touched a low of 10,007 while the S&P 500 kissed 1,056. For the Nasdaq, we have been looking for 2,150 to hold and it has traded to a low of 2,159.
It’s sometimes scary to be so accurate, but this market has been in a trading range that feels like a bad tattoo for all to see. The bottom line is it has been predictable and a trading hell.
However, if these levels are taken out then we could see 9,800; 1,020, then 2,050, respectively, for the indexes.
The bulls have done a good job of bouncing off the lows but the test will come going into the close. The main event after the bell will be Apple’s (AAPL, $247.13, up $1.55) earnings, and it will likely be a market moving event in the morning. For the bulls’ sake, they better hope Apple can beat on revenues AND say something special in their conference call (a stock split?).
The company has routinely made stock-splits in the past but has been reluctant to do so during this barrage of new product introductions over the past 18 months. A 5-for-1 split would get shares back to $50 and more affordable for the small investor. It won’t change the company’s market cap so somebody tell Jobs to get on with it so we can trade options on the stock. We normally don’t trade options on triple-digit stocks because of the premiums. However, if Apple misses Wall Street’s estimates, then shares could easily sink 10%-15%.
We have some good updates for our subscribers in the Members Area so let’s get to it. We will be back at 9am in the morning with the news, and we can’t wait!
Tags: AAPL, Apple, Apple stock split, Apple's earnings, call options, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
Posted in Apple, Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, June 23rd, 2010
1:05pm (EST)
The bulls got some more bad news this morning and after a positive start the market quickly reversed course after a terrible housing number derailed any momentum the bulls were trying to gather.
Sales of new homes fell off a cliff, tanking 33% to 300,000 last month as potential buyers put on the brakes after the government tax incentives expired. It was the worst number ever posted. Wall Street was expecting a number of 410,000.
As a result, the Dow quickly dropped to a low of 10,227, or 65 points, but has recovered somewhat as the index is currently down 19 points, or 0.2%, to 10,274.
The S&P is still having trouble with the 1,100 level and has traded to a high of 1,096 but is currently down 7 points to 1,088. The Nasdaq is off by 14 points and is at 2,247.
Adobe Systems (ADBE, $30.70, down $2.06) is down 7% despite reporting better-than-expected earnings. The company reported a profit of $149 million, or $0.28 a share, versus $126 million, or $0.24 a share, in the year earlier period. Revenue came in at $943 million versus Wall Street’s expectations of $906 million.
Adobe’s Flash technology has been banned by Apple (AAPL, $270.54, down $3.31) and is not used in the iPad or any other Apple devices. Flash is used for Web videos and other content but this did not seem to soften demand for Adobe’s latest products. However, don’t be surprised if Adobe continues to fall towards its 52-week low of $26.
It feels like the bulls are walking on eggshells. In about an hour or so we will get the Federal Reserve’s latest assessment of the economy. It is expected the central bank will keep interest rates at current levels following the conclusion of its two-day meeting.
The Fed wants to keep rates low to help with a recovery, but the numbers we are seeing from housing and jobs suggest there will be no change in the policy anytime soon.
Tags: AAPL, ADBE, Adobe Systems, Apple, momentum options trading, option picks, options alerts, stock options trading
Posted in Apple, Company Commentary, Market Analysis, Market Commentary | Comments Off
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Wednesday, September 1st, 2010
12:30pm (EST)
The bulls used some overseas news to stage a big rally this morning while economic reports continue to come in mixed here in the US. Futures were pointing towards a strong open after China and Australia reported growth in their economies while a better-than-expected ISM number here at home added some extra gravy.
China’s said its manufacturing sector rose in August for the first time in four months while Australia’s economy grew by the fastest pace in three years during the second quarter. Meanwhile, America’s Institute for Supply Management’s manufacturing index grew to 56.3 in August from 55.5 in July. Wall Street had been expecting a decline to 53.0.
The rally has been a head scratcher for the bears given that the ADP report said private employers cut 10,000 jobs in the U.S. last month compared to a gain of 37,000 jobs in July. This doesn’t bode well for Friday’s “official” report on unemployment but the bulls don’t care. They are partying today.
The Dow is currently up 234 points, or 2.3%, and is at 10,248 while the S&P 500 is higher by 29 points, or 2.7%, to 1,077. The Nasdaq is showing a gain of 56 points, or 2.7%, and is at 2,170.
Resistance levels are Dow 10,200; S&P 500 1,070; and Nasdaq 2,150. These levels have obviously been “stretched” and we will have to see how the gains hold up into the close.
In corporate news, Apple (AAPL, $250.45, up $7.35) will be giving Wall Street an update on its product line and investors will be able to watch the event in real-time streaming video over the internet. We are expecting the company to announce an upgrade for the iPod touch which could include a camera with the same touch screen and operating system as the new iPhone4.
There is also chatter the company could roll-out a newer version of its iTV at a price of $99 which could jump start sales. It’s no secret Apple is negotiating with the big cable and TV studios for the right to rent their shows on iTunes which continues to grow at an incredible pace.
We will be back in the morning with a full update but are expecting Friday to be insane. The ADP report is usually a good indicator on what the numbers for unemployment are going to look like and the bulls could get sideswiped if they aren’t careful. On the other hand, today’s rally has been enough for the bulls to break key resistance levels and if they hold, the market could continue to rally no matter what Friday’s numbers are.
The key thing missing in today’s rally is the lack of volume…
Tags: AAPL, Apple, option picks, stock options trading
Posted in Apple, Market Analysis, Market Commentary | Comments Off