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Friday, June 11th, 2010
1:05pm (EST)
As impressive as yesterday’s rally was, the bulls are getting no follow through after a lousy Retail Sales report dampened their spirits this morning. The market has been choppy but the bears are holding down any remaining bulls trying to go long over the weekend.
Retail sales fell 1.2% in May as the pencil pushers were looking for a rise of 0.4%. The troubling part was the fact that it was the first drop in sales in eight months. Not only that, the numbers came in well short of forecasts as the consumer cuts back.
As a result, the Dow is currently down by 35 points and is at 10,137 while the S&P 500 is lower by 3 points and was last seen at 1,083. The Nasdaq is showing a 6 point pop and is at 2,224.
Some stories we are watching…
We are keeping an eye on Dell (DELL, $13.11, down $0.05) going forward. There is news out today that the SEC is adding its CEO, Michael Dell, to its “usual suspects” list on the company’s business deals with Intel (INTC, $20.59, up $0.04). This will cause the company to delay its 10K filings.
Look, Dell once was a powerhouse but struggles to lead in any market category nowadays. The company has been buying up mom-and-pop businesses to get diversified and grow revenues but it just isn’t working. The 52-week low is $11.84 and that could be in danger.
BP (BP, $33.88, up $1.10) is trading up after saying it would make payments more urgently to people and businesses that have been impacted by the oil spill. However, our friends across the pond are getting a little tired of our strong language towards the company. The lasted talk on the dividend is that the company could place the checks to its shareholders in a separate account that would not be released until a later date. Yeah, like that is going to go over well for both sides.
Next week is options expiration for the June options and we still believe things are setting up for even more volatility. Today’s close will be big for the bulls if they plan to have any chance at taking the market higher next week. Friday’s have not been kind for the bulls and Monday’s have been a double whammy lately. This trend is telling you something so do yourself a favor and read this morning’s 9am write-up just below this article.
We will be back on Sunday night with a look back at the week and what to prepare for next week. Subscribers, check the Members Area for the latest updates on the current trades.
Tags: BP, Dell, momentum options trading, option picks, options alerts, stock options trading
Posted in Market Analysis, Market Commentary | Comments Off
Thursday, June 10th, 2010
9:00am (EST)
The bulls turned the ball over to Fed Chairman Ben Bernanke to help pull them out of their rut on Tuesday, and on Wednesday he was still firing fastballs. The market moved higher on about every word he spoke as the Dow busted through the 10,000 level and reached a high of 10,065.
As far as the economy, Big Ben said it “appears to be on track to continue to expand through this year and next”. However, the bears kept battling and ended up going yard to win yesterday’s ballgame. The euro gave back its gains as well and ended the day below the $1.20 level.
As a result, the Dow finished with a 40 points decline, or 0.4% to close at 9,899. The S&P 500 fell 6 points, or 0.6%, to finish at 1,055 while the Nasdaq slipped 11 points, or 0.5%, to settle at 2,158.
BP (BP, $29.20, down $5.48) took another hit. The stock didn’t have a chance yesterday as the suit-n-ties from DC sent BP’s CEO a letter asking him to do away with the dividend payment which is due at the end of the month and to stop advertising until the spill is cleaned up.
How crazy were the options pits? The June 30 puts (BP100619P00030000, $0.52, up $0.47) opened at 7 cents on Wednesday and hit a high of 73 cents. Wow. We are talking gains up to 1,000%!
The July 7.50 puts (BP100717P0007500, $0.19, up $0.17) gained 850% after opening at 3 cents. Yes, the 7.50 puts were even active.
The problem with getting too aggressive with BP is there could be a “snap-back” rally and playing with put options can be dangerous as BP tries to spin us good news.
We aren’t sure where BP will finish at today, next week, or next month but things sure are looking like bleak.
Futures are pointing towards a higher open this morning and it will be interesting to see how the day unfolds. In a bear market, you normally see sharp rallies at the open only to see them fade by the close.
Tags: Ben Bernanke, BP, momentum options trading, option picks, options alerts, stock options trading
Posted in Company Commentary, Oil, Trading Tips | Comments Off
Wednesday, June 9th, 2010
9:00am (EST)
The bulls turned to their closer in the final hour of trading to get back in the win column on Tuesday. Fed Chairman Ben Bernanke gave the the market some good news to go on, but the rally didn’t materialize until late as other headwinds kept things in check. However, after two days of intense bear action the bulls were able to reverse the tables as they rallied instead of fading into the close.
“Big Ben” said he continues to see the U.S. economy improving, although it won’t be as strong as many are hoping for. He also went on to say that a slow economic recovery will keep unemployment rates high and that the Fed wouldn’t wait for them to come down before raising interest rates.
The euro also rebounded yesterday, somewhat, after the overseas markets closed. The currency rose to $1.197 after hitting a four-year low on Monday.
As a result, the Dow enjoyed a triple-digit gain or 123 points, or 1.3%, to finish at 9,939. Microsoft (MSFT, $25.11, down $0.18) and Intel (INTC, $20.18, down $0.13) were 2 of only 4 blue chips that failed to finish in the green.
The S&P 500 was under the 1,050 level for much of the day, but ended with an 11 point pop, or 1.1%, and closed at 1,062. The index found support at the 1,040 level and held but we still see triple-digits on the horizon.
The Nasdaq, however, failed to keep up with its teammates as it fell 3 points, or 0.2%, to settle at 2,170. Tech got hurt after some negative comments that a weaker euro would drag down U.S. corporate profits but the index pared its losses significantly after trading to a low of 2,139.
(Note to self, the Russell 2000 fell 1 point, or 0.1%, to end at 617).
Yesterday’s run was impressive but it wasn’t a “snap-back” rally by any means. We have slowly been building bearish positions over the past couple of weeks and they are off to a great start. If there is a continued rally (which we doubt) then we have stop targets in place to protect profits and limit losses.
The talking heads will tell you that the recent selloff has come too hard, too fast, but they haven’t seen anything yet. We are still looking to add another trade or two, and today we are adding one at the open if we can get a good entry price. We also take a look at BP (BP, $34.68, down $2.08) as your editor-in chief recalls the days of Enron.
Tags: BP, Enron, momentum options trading, option picks, options alerts, stock options trading
Posted in Company Commentary, Oil, Trading Psychology, Trading Tips | Comments Off
Friday, June 4th, 2010
9:00am (EST)
The bulls managed to extend their winning streak to two on Thursday as all three indexes finished in positive territory. Yesterday’s action was choppy to say the least as the market dealt with a barrage of economic news that was both decent and disappointing before finishing slightly positive.
The Dow posted a gain of 6 points to close at 10,255 while the S&P 500 added 5 to finish at 1,102. The Nasdaq polished of a double-deuce (22 points) and went out feeling good at 2,303.
Of course, all eyes were on this morning’s unemployment report which came out 30 minutes ago and it was a letdown. Futures were already pointing towards a slightly lower open and picked up steam once the news came out.
The bulls were looking for at number of at least 500,000 and some were hoping for 700,000. Jaws had to drop when the print came in at 432,000.
As a result, Dow futures are down a staggering 175 points while the S&P 500 futures are off by 21. The Nasdaq futures are lower by 40.
We are going to have a nasty open (which is good news for us) and we will have to see what impact this has on the market and if the sell-off holds.
Observation for the day…
Analysts are talking about buying BP (BP, $39.27, up $1.61) based on the current dividend yield of 8%. So let’s pose this question.
If BP doesn’t cut their dividend despite all the money they are losing and decides to PAY shareholders the current dividend before taking care of every fisherman and every state and individual affected by this disaster…well…something just wouldn’t seem right.
We would like to bet one of our Momentum Options Trading t-shirts the dividend gets cut.
Oh, and the curveball for next week will be how the market reacts to circuit breakers that could be in place faster than think.
We have been planning for a lower market all week so let’s get to the Members Area for the trades updates.
Tags: BP, momentum options trading, option picks, options alerts, stock options trading, unemployment report
Posted in Company Commentary, Economic News, Market Analysis, Market Commentary | Comments Off
Wednesday, June 2nd, 2010
9:05am (EST)
It has become a familiar pattern for the bears these days to let the bulls think they are doing something before knocking them out with a left hook before the closing bell.
Tuesday’s session started off in negative territory as futures were already pointing towards a lower open. The Dow started off with nearly a triple-digit loss before rebounding shortly after the open on encouraging economic news.
The bulls rallied back but couldn’t hold those gains as trading turned choppy for the rest of the session. Momentum tilted back in the bears favor after a government bigwig said they were starting criminal and civil probes into the Gulf of Mexico oil spill shortly before the closing bell. Our Attorney General did not mention which companies or people might be under investigation but we can already picture the lineup.
As a result, the market took another beating with the Dow threatening to fall below the 10,000 level once again. On Tuesday, the index finished with a loss of 113 points, or 1.1%, to finish at 10,024.
The S&P 500 gave back 19 points, or 1.7%, to settle at 1,070 and below the 1,075 level. If the index trades below 1,050 again we could really start to see some selling pressure.
The Nasdaq was down by 35 points, or 1.5%, and settled at 2,222. Dueces may be wild but we think 2,000 is in the cards.
Energy stocks took the brunt of the blows. BP (BP, $36.52, down $6.43) fell to a fresh 52-week low after tanking 15% and Anadarko Petroleum (APC, $42.10, down $10.23), which had their fingers in BP’s oil pie, nearly hit a yearly low after getting a 20% haircut.
Halliburton (HAL, $21.15, down $3.68) dropped 15% in sympathy and Exxon Mobil (XOM, $59.25, down $1.21) slipped 2% and back below $60 a share.
The euro slipped to a low as $1.2112, its lowest level in over 4 years, before climbing back a little. The euro has been a thorn in the market’s side for weeks now but the currency appears to be headed below $1.20 in our opinion.
As we head to press this morning, futures are showing a slightly higher open. The Dow futures are up 29 points to 10,048 while the S&P 500 futures are higher by 4 to 1,073. The Nasdaq 100 futures are showing a 12 point pop.
We added 2 new trades yesterday that got off to a good start and we are looking to add a few more. Subscribers, check the Members Area for the updates.
Tags: APC, BP, Halliburton, option picks, option signals, options alerts, stock options trading
Posted in Commodities, Market Analysis, Market Commentary | Comments Off
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Bulls Look Nervous Ahead Of Weekend
Friday, June 11th, 2010
1:05pm (EST)
As impressive as yesterday’s rally was, the bulls are getting no follow through after a lousy Retail Sales report dampened their spirits this morning. The market has been choppy but the bears are holding down any remaining bulls trying to go long over the weekend.
Retail sales fell 1.2% in May as the pencil pushers were looking for a rise of 0.4%. The troubling part was the fact that it was the first drop in sales in eight months. Not only that, the numbers came in well short of forecasts as the consumer cuts back.
As a result, the Dow is currently down by 35 points and is at 10,137 while the S&P 500 is lower by 3 points and was last seen at 1,083. The Nasdaq is showing a 6 point pop and is at 2,224.
Some stories we are watching…
We are keeping an eye on Dell (DELL, $13.11, down $0.05) going forward. There is news out today that the SEC is adding its CEO, Michael Dell, to its “usual suspects” list on the company’s business deals with Intel (INTC, $20.59, up $0.04). This will cause the company to delay its 10K filings.
Look, Dell once was a powerhouse but struggles to lead in any market category nowadays. The company has been buying up mom-and-pop businesses to get diversified and grow revenues but it just isn’t working. The 52-week low is $11.84 and that could be in danger.
BP (BP, $33.88, up $1.10) is trading up after saying it would make payments more urgently to people and businesses that have been impacted by the oil spill. However, our friends across the pond are getting a little tired of our strong language towards the company. The lasted talk on the dividend is that the company could place the checks to its shareholders in a separate account that would not be released until a later date. Yeah, like that is going to go over well for both sides.
Next week is options expiration for the June options and we still believe things are setting up for even more volatility. Today’s close will be big for the bulls if they plan to have any chance at taking the market higher next week. Friday’s have not been kind for the bulls and Monday’s have been a double whammy lately. This trend is telling you something so do yourself a favor and read this morning’s 9am write-up just below this article.
We will be back on Sunday night with a look back at the week and what to prepare for next week. Subscribers, check the Members Area for the latest updates on the current trades.
Tags: BP, Dell, momentum options trading, option picks, options alerts, stock options trading
Posted in Market Analysis, Market Commentary | Comments Off