|
|
|
 |
|
|
 |
Thursday, December 16th, 2010
9:00am (EST)
The bulls took a few more baby steps at breaking through another layer of resistance on Wednesday but ran out of gas into the close as the market finished lower after spending much of the day in positive territory. There was a little progress made in the tax-break package that’s currently making its way through Congress as the proposed legislation cleared the Senate by a whopping approval of 81-19. The bill still has to make it through one more channel check as the Democrats try to get some sweeteners in the deal.
The Dow fell 19 points, or 0.2%, to finish at 11,457. The index managed to trade to a new 52-week high of 11,519 and we are targeting 11,600-11,700 as confirmation on a run to 12,000. Support is strong at 11,200-11,000.
The S&P 500 dropped 6 points, or 0.5%, and ended at 1,235. The index traded to a high of 1,244 but had its six-session winning streak snapped as we look for a break above 1,250. The bears are targeting 1,220 to get back in the game.
The Nasdaq gave back a little over 10 points, or 0.4%, and settled at 2,617. Tech appears to be trading sideways at the moment but did touch 2,643 and closed within our 2,600-2,700 range for the sixth straight session. We are looking for a break above 2,660, specifically, as a sign that the bulls might push 3,000 while support comes in at 2,500-2,450.
In stock news, BP (BP, $43.86, down $0.58) fell over 2% before recovering a little into the close after the U.S. government said it would sue the company (and others) for damages from the Gulf oil spill. The early estimates are as high as $20 billion in liabilities just from the Clean Water Act alone. Don’t forget about the $20 billion the government has already made BP put in a “fund” that is currently being used for claims.
The news came out shortly after lunch and the options pits exploded as shares traded to a low of $43.29. The BP December 43 puts (BP1011218P00043000, $0.21, up $0.12) opened at 6 cents and jumped over 133% for the day as nearly 10,000 contracts traded. The puts hit a high of 35 cents so some day traders did well by reacting to the news.
Of course, this is really old news because you knew the government was going to push a case to collect damages. In any event, if BP breaks below $40, we will be on an option trade faster than a pit bull on a pork chop as a test to $35 is most likely, according to the chart.
As we head to press, futures are showing a little strength this morning on better-than-expected economic news. We will cover the details in our afternoon update but it appears the bulls are going to push higher. Dow futures are up 7 points to 11,422 while the S&P 500 futures are higher by 2 points to 1,234. The Nasdaq 100 futures are showing an advance of 5 points to 2,206. Subscribers, check the Members Area for the latest trade updates.
Tags: bear market, binary options, BP, BP options, bull market, call option, how to trade options, Momentum stocks, option investments, option picks, option trading, options mentoring, options trading service, put option, stock market, stock market options
Posted in Company Commentary, Market Analysis | Comments Off
Friday, June 25th, 2010
1:10pm (EST)
We wanted to bring Apollo Group (APOL, $44.29, down $1.68) to your attention again today as shares have hit another 52-week low. We have been bearish on this stock for a couple years, and we had good success in the past playing options on it.
Apollo Group and other Educational stocks are taking a beating today after a “gainful employment probe” continues to hit the industry. The last time out, we took a small loss on an option trade because of the volatility, but it was a sign of things to come.
From May 27th:
“We took a 16% hit on Apollo after the parameters of the trade were broken, but we have been warning our subscribers to stay away from this dog for years. Justice might not have been served on our recommended option trade, but the 52-week low of $52.20 looks like it will fall today.
We didn’t like the volatility when shares shot up to $60 last Thursday on some bogus rumor so we got our subscribers out. However, we should have listened to our gut as the stock looks poised to fall below $50 today.” (END)
From January 8th:
“Apollo actually made a slight gain yesterday and reported their earnings after the bell last night. Although they painted a pretty picture for Wall Street, the stock was down $3.20, to $60.74, in after-hours trading last night.
The company reported earnings that beat estimates by a penny but once again, the way they run their accounting department has raised some concerns. We made 4 trade recommendations on Apollo last year, all put options, and the returns were 100%, -15%, 50%, and -17%.” (END)
The point we are trying to make is that when you follow a terrible company for years you can get a feel for how it trades and we plan on teaching you this. (Our Momentum Options Trading Manual is coming in July, we promise). The same is true for companies that have solid businesses. You buy call options on stocks that you feel are going to go up and put options on stocks that you think are going to sink. It’s that simple. The risks are greater playing options but the returns can be incredible.
We profiled Apollo Group again on our Watch List last week because we knew the fall was coming but sometimes our portfolio is full so we miss out on a few trades. We don’t like to carry over 10 open positions at once and sometimes WE will miss trades because we don’t like to break our own rules. However, our Watch List has been hot and a lot of traders are writing to thank us for adding it.
We wrote a really good story on Apollo Group when the stock was at $73 back in October 2009. We could have bought a LEAP put option but the premiums on going 9-12 months out can be pretty expensive. Here is that article and it provides a more detailed look at the company’s shady business practices (If you like playing poker, you will love our analogies):
http://momentumoptionstrading.com/2009/10/28/apollo-group-has-a-skeleton-or-two/
We have a lot to talk about in our MEMBERS AREA today, and for those of you who are thinking of joining us, you have picked a great time. Not only are we nearly set to launch our trading manual, we also have plans to offer AUTO-TRADING by mid-July!
We are still hammering out the details, but we think we have found a great firm to handle your trades. We know many of you are busy, and the requests for auto-trading have not gone unheard. Both will be available soon so stay tuned!
As we head to press, the Dow is down 31 points t 10,121 while the S&P 500 is down by 2 points and was last seen at 1,071. The Nasdaq is higher by 3 points to 2,220. We will be back Sunday night with the Weekly Wrap. Oh, by the way, BP (BP, $27.31, down $1.43) is at 14-year lows. Next week is setting up to be a doozy, folks…
Tags: APOL, Apollo Group, autotrade, autotrading, BP, momentum options trading, option picks, options alerts, stock options trading
Posted in Earnings, Oil, Trading Psychology | Comments Off
Tuesday, June 22nd, 2010
1:00pm (EST)
The market is mildly positive after spending much of the morning near the flat line. There have been spurts to the upside, but traders were cautious ahead the disappointing existing home sales report. Although selling pressure picked up after Wall Street got the numbers at 10am the market is still mixed.
We don’t need a drum roll for this one…Existing home sales for May decreased 2.2% month-over-month to an annualized rate of 5.7 million units, which was below the expected rate of 6.1 million units. We knew home-buying tax credits from the government would be fading, but many pencil pushers were expecting them to lift sales in May and June.
The deadline to get a mortgage loan and still qualify was April 30, and those buyers are expected to close by the end of this month. Some haven’t which is the reason for the disappointment, but there is talk of extending the deadline for closing a sale until the end of September.
It probably won’t matter either way because people need a job to buy a house. However, a lot of people’s credit scores are spotty and banks are still unwilling to make riskier loans. You also have the home sellers who still THINK their house is worth the price it was back at the real estate top and are having a hard time excepting the facts even though they are behind on their house payments.
In earnings news, Carnival (CCL, $33.91, down $0.83) reported profits of $252 million, or $0.32 a share, versus $264 million and $0.33 a share, in the year-earlier period. Wall Street was looking for $0.29 a share.
Revenue came in at $3.2 billion versus $2.9 billion a year ago, but increased fuel prices hurt earnings by 20 cents a share during the quarter. Wow.
Carnival trimmed the fat where it could to make up these costs, but somewhere down the road we expect the BP (BP, $29.63, down $0.70) news to come into play.
Speaking of which, BP has hit fresh lows as the world watches the most irresponsible and distasteful CEO’s ever. There is no need to go into the details because we aren’t the paparazzi, but we’re sure you have heard of his latest actions.
Oh, and this just in. The IRS is thinking about TAXING the victims who have and will receive checks from BP. This could and should change, and if it doesn’t, we will truly see how greedy politicians can be. Congress has the power to make them tax exempt. What is hard to believe is this is actually a story.
As we head to press, the Dow is up a point to 10,442 while the S&P is off a point to 1,111. The Nasdaq is higher by 10 points and is at 2,299 and is fighting the 2,300 level as we type. Subscribers, check the Members Area for the updates.
Tags: BP, Carnival, CCL, CCL earnings news, momentum options trading, option picks, options alerts, stock options trading
Posted in Earnings, Market Analysis, Market Commentary, Oil | 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
Sunday, June 13th, 2010
7:30pm (EST)
The bulls made the most of their opportunities and scored their first weekly win in a month as the market moved back towards key resistance levels. Ben Bernanke and China played an important role in helping the bulls get out of their funk, but will it be enough?
Friday’s action was choppy, but there was a little buying in the final hour as the Dow finished with a 40 point gain to settle at 10,211. For the week, the index added 279 points, or 2.8%.
The S&P 500 advanced 5 points to close at 1,091 but fell short of the 1,100 level which will be the battle ground going forward. For the week, the index gained 27 points, or 2.5%.
The Nasdaq jumped 25 points to settle at 2,243, and for the week the index popped 85 points, or 3.9%.
Although the market rebounded, we contribute much of the rise to a short-covering rally and nothing more. The technical picture still looks lousy, and the volume just wasn’t there to push the market past resistance.
Another index we are watching closely, the Russell 2000, added 9 points on Friday to close at 649. However, the index fell below its 200-day moving average earlier in the week, but rallied back to close above it. The 650 area is key resistance from January and moving forward it will represent a test.
As far as the other indexes, we could see a little follow-through on Monday and Tuesday and our top-end ranges remain Dow 10,200-10,300; S&P 500 1,075-1,100; and Nasdaq 2,200-2,300. We have pretty accurate in calling this “range” and we wouldn’t be surprised if the market stretched these levels at a little.
There might me a little “fluff” to the upside but our downside targets remain Dow 9,800 then 9,500. The S&P should test 1,050 again and a break below this level clears the way for 975. The Nasdaq has support at 2,150 then 2,050 but we still feel this index gets hit the hardest and will be at 1,900 over the next month or so.
This week could bring even more volatility as it is “triple-witching” expiration on Friday. Triple witching happens four times a year and occurs on the third Friday of March, June, September and December. It is an event dubbed as “Freaky Friday” on Wall Street.
This is usually a bullish day except for June triple-witching which has produced more negative results over past last decade.
As far as economic news, we get numbers on housing-starts and building-permits for May on Wednesday, and on Thursday the May reading of the consumer price index is due.
On Tuesday, we are eager to see how The Chicago Board Options Exchange does with its initial public offering (IPO). CBOE Holdings will make its debut when many IPOs have been struggling as a result of the current market volatility. However, demand should be strong for this one.
BP’s (BP, $33.97, up $1.19) CEO will be the latest suit-and-tie big wig to face Capitol Hill. Tony Hayward has been asked to testify on Thursday before the House Energy and Commerce committee which has been scrutinizing the company’s actions in the cleanup of the oil spill.
Yesterday, the Coast Guard gave BP 48 hours to come up with a more aggressive plan to contain the leak, and there will also be pressure for BP to setup a reserve fund to pay for everything. Still up in the air is the dividend which is scheduled for payment by the end of the month.
The current environment still favors the bears so we aren’t too concerned with last week’s rally. There are a few key earnings announcements that could impact the market this week, and we will take a look at those companies reporting in the morning.
Tags: BP, CBOE Holdings, momentum options trading, option picks, options alerts, stock options trading
Posted in Company Commentary, IPOs, Market Analysis, Oil | Comments Off
|
|
|  | | | |
Get RSS Feed
BP (BP) Back in the Spotlight
Thursday, December 16th, 2010
9:00am (EST)
The bulls took a few more baby steps at breaking through another layer of resistance on Wednesday but ran out of gas into the close as the market finished lower after spending much of the day in positive territory. There was a little progress made in the tax-break package that’s currently making its way through Congress as the proposed legislation cleared the Senate by a whopping approval of 81-19. The bill still has to make it through one more channel check as the Democrats try to get some sweeteners in the deal.
The Dow fell 19 points, or 0.2%, to finish at 11,457. The index managed to trade to a new 52-week high of 11,519 and we are targeting 11,600-11,700 as confirmation on a run to 12,000. Support is strong at 11,200-11,000.
The S&P 500 dropped 6 points, or 0.5%, and ended at 1,235. The index traded to a high of 1,244 but had its six-session winning streak snapped as we look for a break above 1,250. The bears are targeting 1,220 to get back in the game.
The Nasdaq gave back a little over 10 points, or 0.4%, and settled at 2,617. Tech appears to be trading sideways at the moment but did touch 2,643 and closed within our 2,600-2,700 range for the sixth straight session. We are looking for a break above 2,660, specifically, as a sign that the bulls might push 3,000 while support comes in at 2,500-2,450.
In stock news, BP (BP, $43.86, down $0.58) fell over 2% before recovering a little into the close after the U.S. government said it would sue the company (and others) for damages from the Gulf oil spill. The early estimates are as high as $20 billion in liabilities just from the Clean Water Act alone. Don’t forget about the $20 billion the government has already made BP put in a “fund” that is currently being used for claims.
The news came out shortly after lunch and the options pits exploded as shares traded to a low of $43.29. The BP December 43 puts (BP1011218P00043000, $0.21, up $0.12) opened at 6 cents and jumped over 133% for the day as nearly 10,000 contracts traded. The puts hit a high of 35 cents so some day traders did well by reacting to the news.
Of course, this is really old news because you knew the government was going to push a case to collect damages. In any event, if BP breaks below $40, we will be on an option trade faster than a pit bull on a pork chop as a test to $35 is most likely, according to the chart.
As we head to press, futures are showing a little strength this morning on better-than-expected economic news. We will cover the details in our afternoon update but it appears the bulls are going to push higher. Dow futures are up 7 points to 11,422 while the S&P 500 futures are higher by 2 points to 1,234. The Nasdaq 100 futures are showing an advance of 5 points to 2,206. Subscribers, check the Members Area for the latest trade updates.
Tags: bear market, binary options, BP, BP options, bull market, call option, how to trade options, Momentum stocks, option investments, option picks, option trading, options mentoring, options trading service, put option, stock market, stock market options
Posted in Company Commentary, Market Analysis | Comments Off