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Tuesday, September 14th, 2010
12:40pm (EST)
After a rough start, the bulls have powered their way higher as the market continues to push towards the top end of its ranges. There are few economic reports worth mentioning and earnings are coming into play on a few stocks which have helped provide support as the bulls push forward.
The Commerce Department reported retail sales increased 0.4% in August which was slightly ahead of expectations. Excluding a decline in autos, retail sales increased 0.6% and posted the second straight monthly increase and the biggest gain since March.
Elsewhere, business inventories jumped in July by their largest amount in two years and business sales rebounded after two months of declines. U.S. businesses rose 1% in July from June to a seasonally adjusted $1.38 trillion versus expectations for an increase of 0.6%.
Turning to earnings, Best Buy (BBY, $37.07, up $2.42) is up 7% after smashing Wall Street’s expectations. The company reported a profit of $254 million, or $0.60 a share, versus $158 million, or $0.37 a share, in the year-earlier quarter. Revenue came in at $11.3 billion but the company’s gross margins offset the miss. Analysts are looking for a profit of $0.46 a share with revenue of $11.65 billion.
There were a ton of traders betting against Best Buy thinking they might cut guidance which is why we are seeing a big run-up in the stock today and the call options have exploded. We got some of that action. The company lifted guidance going forward by 10 cents and said it now sees earnings of $3.55 to $3.70 for the year.
And this just in, Cisco Systems (CSCO, $21.95, up $0.65) is going to start paying a dividend. This has provided another little boost for Tech as the indexes are near their highs for the session.
As we head to press, the Dow is up 34 points to 10,578 and is nearing our 10,600 target. The S&P 500 is higher by 4 points and is dancing around our 1,125 target while the Nasdaq is jumping 15 points and is right on our 2,300 target. Man, is this getting interesting!
As usual, we have a lot to cover in our Members Area so let’s get on it. We will be back Wednesday morning a full update.
Tags: BBY, CSCO, explain the concept of options, momentum options trading, NYSE: CSCO, option picks, option trading blog
Posted in Earnings, Market Analysis | Comments Off
Friday, July 30th, 2010
1:00pm (EST)
We have a lot to talk about today so we are going to throw the kitchen sink at you…
The market is once again choppy as a both the bulls and bears try to gain leverage ahead of the weekend and before Monday’s opening bell. The bears started off strong and had pushed the major indexes down over 1% but the bulls made it back to even and into positive at one point. Trading has been back and forth since.
Economic news is abundant today.
The bears used the latest GDP figure to take the market sharply lower at the open as data showed the economy grew 2.4% in the second quarter versus a forecast of 2.6%.
The bulls used a collection of good news to stage a comeback. The Chicago PMI for July was 62.3 versus expectations of 56.0 while the Consumer Sentiment Survey for July was 67.8 versus the anticipated 67.5 print Wall Street had penciled in.
As a result, the market is mixed as the Dow is down 15 points to 10,452 while the S&P 500 is down 1 point to 1,100. The Nasdaq is up 3 points to 2,254.
Next week is setting up to be an even bigger battle as we have seen the volatility pick up and we have watched the bears stand ground. It’s not to say the bulls won’t break through these hard resistance levels but if Vegas had a line on Monday’s action we would put a $20 on a lower Monday.
Earnings will be another key element in next week’s direction as well as economic news but we could see some explosive moves before today’s closing bell as mutual funds dress up the month and traders square up the books for July.
Our Watch List is PACKED with potential bearish and bullish trades and we have even profiled some LEAP options out until 2012 that we eyeballing. This weekend we will also be taking a closer look at Best Buy (BBY, $34.57, up $0.02) and Chesapeake Energy (CHK, $20.94, down $0.16), two beaten down stocks that look “interesting” at these levels. We also take a look at Gold and what is happening with it. We are expanding our Weekly Wrap to provide you more coverage of the market and a few stocks here and there.
We are also pleased to announce we have HARD copies of our trading manuals How to Trade Options on Momentum Stocks and Watch List Overview. This option course has been two years in the making and we are excited to show you how you too can find triple-digit return trades and set up Watch Lists to follow hundreds of stocks at once.
We are going to show you how we look at trades, how to figure out the returns on where a stock needs to be and how to read a few charts. And much more golden nuggets.
We will update all of this on Sunday in our Weekly Wrap so look for details over the weekend. Next week will be nail-biting and we will set you up on what to watch for. We have also updated our current trades including the one from this morning in our Members Area so make sure you check the latest up-to-the-minute updates.
Until then, have a good weekend!
Tags: BBY, Best Buy, call options, CHK, Gold, Gold stocks, 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 Company Commentary, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off
Wednesday, July 28th, 2010
9:05am (EST)
The market did nothing on Tuesday as the bulls tried to penetrate resistance while the bears were looking to hold ground. The bulls led the way at the open but sour economic news gave the bears some leverage. However, both sides seem tentative at these levels which is helping prove our theory right about a pending breakout or breakdown.
The Dow managed to squeeze out a 12 point gain and closed at 10,537. The index traded as high as 10,578 and briefly touched a low of 10,494 before ending higher for the 4th straight session. Our near-term target is 10,600 to the upside and support comes in at 10,400 and 10,200.
The S&P 500 slipped a point to settle at 1,113 and is still dancing with its 200-day moving average. The index reached 1,121 intra-day and we mentioned 1,125 would be the first wave of resistance it would have to clear. Support is still 1,100 then 1,070.
Finally, the Nasdaq stuck its head above the 2,300 level but finished with a loss of 8 points to 2,288. This was also the first wave of resistance we mentioned in our Weekly Wrap and a run to 2,350 could still be in the mix but so is 2,250 and 2,150 to the downside.
We haven’t talked about Best Buy (BBY, $35.45, down $1.45) in a while but it doesn’t mean we haven’t forgotten about the company. We normally like to trade call options on the stock and in March of this year we made our subscribers a sweet 177% return in one week. Of course, the stock was in an uptrend when we recommended the trade and eventually it hit a 52-week high of $48.83 in late April.
Shares broke below $40 just before they announced earnings in mid-June and haven’t recovered since. However, Best Buy is starting to look attractive despite yesterday’s 4% drop. The company won’t report earnings until mid-September and we have found some attractive LEAP options to take advantage of a possible move higher down the road. The 52-week low is $32.81 and there is major support in the $30 area on a longer-term chart so we could test these areas. If so, these options will get a little cheaper
As we head to press, Dow futures are down 23 points to 10,471 while the S&P 500 futures are off by 2 points to 1,109. Nasdaq 100 futures are lower by 4 to 1,883. Subscribers, check the Members Area for the updates.
Tags: BBY, Best Buy, 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 Company Commentary, Market Analysis, Market Commentary | Comments Off
Tuesday, June 15th, 2010
1:05pm (EST)
The bulls are back up to their old tricks as they have started the day in positive territory, but where we end up remains to be seen. The market is testing key resistance levels despite a lower-than-expected number on housing sentiment.
The National Association of Home Builders reported its housing market index fell to 17 in June, down 5 points, after two straight months of increases. Not only that, the number was the lowest reading since March. The tax credits of up to $8,000 expired on April 30 so we knew this number might come in low but not this low.
On Wednesday, we get more housing data with Housing Starts and Building Permits and those numbers could come in worse-than-expected.
BP (BP, $31.62, up $0.95) is front and center as things heat up on the Hill. The company’s U.S. CEO is in Washington today and has said they are speeding up the claims process. BP said it has approved initial payments towards 90% of the commercial large loss claims that have been filed as a result of the oil spill that has been going on for 2 months now. Obama time is 8pm (EST) as he gives the nation an update.
Best Buy (BBY, $38.36, down $2.69) is down about 7% after disappointing Wall Street with its numbers. The company announced earnings of 36 cents a share versus expectations of 50 cents a share. The company also missed on their revenue number.
As we head to press, the Dow is up 133 points to 10,324 while the S&P is up 15 to 1,105. The Nasdaq is higher by 40 points and is at 2,284.
Our key resistance levels remain Dow 10,300; S&P 1,100 and Nasdaq 2,300. The more times we test resistance and fail, the worse the correction might be. Support has held up well at 1,050 for the S&P, but if the index can’t break resistance then we don’t think support is going to hold next time around.
A lot of investors turn bullish at market tops and bearish at market bottoms. Of course, there is still a slight chance the bulls break through key resistance levels, but new bull markets need new leadership, AND the Financial stocks to participate. We are not seeing that. Is housing going to lead a new bull market? Not. Financial stocks will remain under pressure until financial reform gets resolved. Tech…maybe, Retail, no.
Given this backdrop, we are still cautious of any market rallies. We are still in a extremely tough market environment and perhaps a “stock picker’s market”. Either way, the TREND is still lower. If we are wrong then there will be PLENTY of opportunities to go long if we break above the 200-day moving averages.
Subscribers, check for the updates in the Members Area, including an update on Green Mountain Coffee Roasters (GMCR, $26.67, up $1.57).
Tags: BBY, Best Buy, BP, momentum options trading, option picks, options alerts, stock options trading
Posted in Company Commentary, Earnings, Market Commentary, Trading Psychology | Comments Off
Tuesday, June 15th, 2010
9:00am (EST)
The bulls were ready to roll at the start of Monday’s trading session after learning that the euro-zone industrial output in April was better than expected, but Moody’s (MCO, $19.91, up $0.23) saved the bears day after slashing its credit rating on Greece to “junk” status.
The bulls were rallying on light trading volume anyway, which was a sign the advance might not hold, and Moody’s downgrade had little effect on the market at the time. The announcement came shortly after our 1pm update, and although Moody’s is way late in making the call (as usual), the market noticed by the time the closing bell sounded.
The Dow had raced to an early lead of 10,328, a gain of nearly 119 points, but finished at 10,190, down 20 points, or 0.2%, on Monday. We were looking for the index to fall back at the 10,300 level so it was close enough for government work.
The S&P 500 also gave back its gains as it fell 2 points, or 0.2%, and settled at 1,089. We have been mentioning the 1,100 level as the key level to watch for and 1,108 is the 200-day moving average if you want an exact number. The index traded to high of 1,105.
The Nasdaq managed to finish in positive territory but by less than a point and closed at 2,243. The Russell 2000 added 3 points, or 0.5%, and ended at 652 for the day.
Financial stocks got whacked again. Europe’s debt continues to put headline risk in these names, but the financial overhaul bill that is coming could push new money away. The two sides are still hammering out details but the final version of the House and Senate bills could be tougher on banks than many are anticipating. If the banks have to run under tighter restrictions then it could eat away at profits.
Goldman Sachs (GS, $133.44, down $2.20) moved closer to its 52-week low of $131.30, and we have predictions of $120 down the road before things get better. JPMorgan Chase (JPM, $37.33, down $0.76), Bank of America (BAC, $15.41, down $0.19) and Wells Fargo (WFC, $27.40, down $0.44) all fell in sympathy.
Futures are pointing towards a higher open but slipped a little after Best Buy (BBY, $41.05, down $0.15) announced earnings. The company missed estimates by a wide margin and shares are down $2 in pre-market action. We will update this story in our 1pm update.
Current subscribers, check the Members Area for the trade updates.
Tags: BBY, Best Buy, momentum options trading, option picks, options alerts, stock options trading
Posted in Company Commentary, Earnings | Comments Off
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Friday’s Tidbits; Jailbreak Next Week?
Friday, July 30th, 2010
1:00pm (EST)
We have a lot to talk about today so we are going to throw the kitchen sink at you…
The market is once again choppy as a both the bulls and bears try to gain leverage ahead of the weekend and before Monday’s opening bell. The bears started off strong and had pushed the major indexes down over 1% but the bulls made it back to even and into positive at one point. Trading has been back and forth since.
Economic news is abundant today.
The bears used the latest GDP figure to take the market sharply lower at the open as data showed the economy grew 2.4% in the second quarter versus a forecast of 2.6%.
The bulls used a collection of good news to stage a comeback. The Chicago PMI for July was 62.3 versus expectations of 56.0 while the Consumer Sentiment Survey for July was 67.8 versus the anticipated 67.5 print Wall Street had penciled in.
As a result, the market is mixed as the Dow is down 15 points to 10,452 while the S&P 500 is down 1 point to 1,100. The Nasdaq is up 3 points to 2,254.
Next week is setting up to be an even bigger battle as we have seen the volatility pick up and we have watched the bears stand ground. It’s not to say the bulls won’t break through these hard resistance levels but if Vegas had a line on Monday’s action we would put a $20 on a lower Monday.
Earnings will be another key element in next week’s direction as well as economic news but we could see some explosive moves before today’s closing bell as mutual funds dress up the month and traders square up the books for July.
Our Watch List is PACKED with potential bearish and bullish trades and we have even profiled some LEAP options out until 2012 that we eyeballing. This weekend we will also be taking a closer look at Best Buy (BBY, $34.57, up $0.02) and Chesapeake Energy (CHK, $20.94, down $0.16), two beaten down stocks that look “interesting” at these levels. We also take a look at Gold and what is happening with it. We are expanding our Weekly Wrap to provide you more coverage of the market and a few stocks here and there.
We are also pleased to announce we have HARD copies of our trading manuals How to Trade Options on Momentum Stocks and Watch List Overview. This option course has been two years in the making and we are excited to show you how you too can find triple-digit return trades and set up Watch Lists to follow hundreds of stocks at once.
We are going to show you how we look at trades, how to figure out the returns on where a stock needs to be and how to read a few charts. And much more golden nuggets.
We will update all of this on Sunday in our Weekly Wrap so look for details over the weekend. Next week will be nail-biting and we will set you up on what to watch for. We have also updated our current trades including the one from this morning in our Members Area so make sure you check the latest up-to-the-minute updates.
Until then, have a good weekend!
Tags: BBY, Best Buy, call options, CHK, Gold, Gold stocks, 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 Company Commentary, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off