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Thursday, February 9th, 2012
1:05pm (EST)
The bulls and bears have traded blows for much of the session as the market has had a bevy of headlines to deal with today. The indexes have traded in a tight range once again and got off to good start after Initial Claims came in at 358,000 versus expectations for a print of 370,000. Continuing Claims came in at 3.5 million which pretty much matched expectations.
Shortly after the open, there was news out that Greece and the European Union have agreed to a level of budget cuts that will give the country another bailout. This will help Greece with their debt payments next month but we doubt the drama is over as the country is expecting riots this weekend.
The lack of details though has caused the market to pull back from its highs but the bulls are holding court as we head into the second half of trading.
Elsewhere, Obama just announced the government has reached a $26 billion settlement over shady foreclosure practices with the five largest mortgage service providers. Ally Financial, Bank of America (BAC, $8.23, up $0.10), Citigroup (C, $34.08, down $0.15), JPMorgan Chase (JPM, $38.00, down $0.30) and Wells Fargo (WFC, $30.43, down $0.23) are all trading slightly lower with the exception being BAC.
As we head to press, the Dow is up 27 points to 12,910 while the S&P 500 is higher by 3 points to 1,353. The Nasdaq is showing a gain of 10 points and is at 2,926.
We currently have a Bank of America call option trade that we entered on Monday which is nearing a 50% return so let’s go lock-in some more profits! Subscribers, check the Members Area for the details and we will be back in the morning with our next update.
Tags: bac, Bank of America call options, c, JPM, wfc
Posted in Financial Stocks, Market Analysis, Market Commentary | Comments Off
Monday, January 23rd, 2012
9:00am (EST)
Well, Europe didn’t flare up and 4Q earnings came in halfway decent for some, not so good for others. These were the 2 catalysts that we said would move the market higher or lower last week and the results favored the bulls who were able to push another layer of resistance.
It was a shortened week for the market but the indexes moved higher on Tuesday following good news out of China but gave back half the gains after the Financial sector ended mixed. Citigroup (C, $29.64, up $0.31) and Wells Fargo (WFC, $30.54, up $0.39) missed and beat Wall Street’s estimates after announcing earnings to start the week.
There was follow through on Wednesday as the major averages ended the session with 1% pops, on average. eBay (EBAY, $31.93, up $0.42) posted better-than-expected results on the strength of their PayPal business which is going gang-busters globally.
We were expecting a flat to down Thursday as we weren’t sure what kind of numbers the jobs market would post before the bell and a number of Tech’s heavy-hitters were reporting earnings after the close. Thankfully, Initial Claims fell to their lowest level (351,000) in 4 years which put the bulls in a good mood and took some of the pressure off of Tech – which ended up leading the way higher. Bank of America (BAC, $7.07, up $0.11) gave the Financial stocks a lift after beating expectations.
Friday’s action was all about “old” Tech versus “new” Tech as Google (GOOG, $585.99, down $53.58), Intel (INTC, $26.38, up $0.75), International Business Machines (IBM, $188.52, up $0.08) and Microsoft (MSFT, $29.71, up $1.59) weighed-in with their numbers, which were good for the most part. The ugly duckling was Google which dropped 8% after missing Wall Street’s estimates. Intel, IBM and Microsoft accounted for 78 blue-chip points.
As a result, the Dow gained 96 points, or 0.8%, to end at 12,720. The blue-chips dipped to a low of 12,620 at the open but held new short-term support at 12,600 which was prior resistance. We could not have called this much better as we said a break above 12,600 would lead to a test up to 12,750-12,800…(read more)
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Tags: c, eBay, GOOG, IBM, INTC, MSFT, wfc
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Tuesday, January 17th, 2012
12:50pm (EST)
The market continues its push higher as the major indexes are enjoying a 1% pop across the board. “Good news” out of China has offset some of Europe’s drama which was hit with more downgrades this morning. The Financial stocks are mixed after Citigroup (C, $28.72, down $2.02) and Wells Fargo (WFC, $30.17, up $0.56) missed and beat Wall Street’s estimates.
Elsewhere, Carnival Corp (CCL, $29.50, down $4.78) is down 14% after the weekend wreckage that left many people dead and missing. The tragedy happened off the coast of Italy and there are reports the Captain veered off the ship’s navigation system and could face homicide charges. This is not good news and it’s an unfortunate event that could impact a normally brisk season for the cruise ships.
This is a heavy week for 4Q earnings which kick into second gear. We covered a list of stocks to watch this week in our video last night but we probably won’t be playing an earnings trade. We did recommend a New Trade this morning but the company doesn’t announce results until March and we feel shares are at a tradable bottom.
Our portfolio is showing strong gains for 2012 in the first two weeks of January and we don’t see the need to take on the added risk. We do, however, think earnings will move the market this week, especially on Thursday when a bevy of big-name companies will be stepping up to the podium.
We have 3 current trades that are up triple-digits and quite a few others that are up over 50% so let’s go see where we are at.
As we head to press, the Dow is up 103 points to 12,525 while the S&P is higher by 9 points to 1,298 after kissing 1,303. The Nasdaq is showing a 26 point pop and is at 2,736. Subscribers, check the Members Area for the updates.
Tags: 4Q earnings, c, CCL
Posted in Earnings, Hot Stocks, Market Commentary | Comments Off
Monday, May 9th, 2011
12:20pm (EST)
The market has gotten off to a slow start as both the bulls and bears feel each other out before mapping their next move. Futures were pointing towards a higher open but were weakening as we headed towards the opening bell. There is some rhetoric out of Europe concerning Greece as S&P downgraded their debt (again) amid concerns the country will need more bailout funds which has kept traders in check.
The Dow had traded in a tight range, hitting a high of 12,669 at the open while the low has been 12,620. However, things are picking up as we head to press as the index is currently up 61 points to 12,700. The S&P is up 7 points to 1,346. The Nasdaq is showing a gain of 18 points to 2,845.
Citigroup (C, $44.02, down $1.18) completed it 1-for-10 reverse stock split this morning which is why you shares in the $40’s and not at $4+. We aren’t big fans of reverse splits which are usually done by companies that are about to lose their listing on an exchange or to get investors’ confidence up. When a company does a reverse stock split they are trying to maintain compliance but Citigroup is a little different because they really didn’t have to do the split.
Citigroup’s new share price will make it easier to short and for mutual fund managers to buy. Most funds restrict managers from buying stocks under $5 so this won’t be a problem at today’s prices. Speaking of reverse stock splits…
American International Group (AIG, $29.57, down $1.13) is at new 52-week lows today. Imagine that. We covered the company’s reverse stock split a few years ago which helped them keep their listing on the NYSE. AIG’s shareholders approved a one-for-20 reverse stock split in 2009 and we did well shorting this name all the way down to $1 before the split. In fact, some of our BEST option trades have been shorting AIG if you look at our Track Record over the years.
We have a lot to cover inside our Members Area including a trade adjustment. On two of the three trades we able to get filled at our recommended prices but we are going to have to raise our entry price for our other recommendation. Subscribers, check for the updates.
Tags: AIG, c, call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options trading course, reverse stock splits, stock market options, strangle option trades, weekly options
Posted in Market Analysis, Trade Update, Trading Tips | Comments Off
Tuesday, March 22nd, 2011
3:45pm (EST)
The market has traded in a tight range today with neither the bulls nor bears making any major moves. Volume is light and there hasn’t been any major headline news. Financial stocks have held steady but have traded on the south side for much of the day.
On that note, it was interesting to see Citigroup (C, $4.42, down $0.01) doing a 1-for-10 reverse stock split. The company also plans to reinstate a quarterly dividend of a whopping penny on its common shares in the second quarter one the split is complete.
When a company does a reverse split, they normally don’t turn out to well, meaning, the fundamentals haven’t changed. If the fundamentals or outlook hasn’t changed, then what makes the stock attractive?
Citigroup’s case is a little different than most companies that do reverses. Usually companies face “delisting” from an exchange if their stock falls below $1 (see AIG which did a 1-for-20 a few years ago) and their last course of action is usually a reverse. Citigroup is now profitable again and most companies facing delisting aren’t.
The reverse stock split will be effective after the close of trading on Friday, May 6, and will trade on a split adjusted basis on Monday, May 9. Shares have been in a range of $3.50-$5 for over a year so we like the move by Citigroup.
One stock we are watching after the bell is Adobe Systems (ADBE, $33.00, up $0.66) which could be ready to break out of a range. The company reports after the bell and there is a chance they could miss estimates although most analysts are counting on Adobe to at least meet or beat estimates.
We will be back in the morning with the Adobe earnings story.
Tags: c, NYSE: C, reverse stock slpits
Posted in Market Commentary | Comments Off
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Bulls Holding Gains but Resistance Still Looms
Thursday, February 9th, 2012
1:05pm (EST)
The bulls and bears have traded blows for much of the session as the market has had a bevy of headlines to deal with today. The indexes have traded in a tight range once again and got off to good start after Initial Claims came in at 358,000 versus expectations for a print of 370,000. Continuing Claims came in at 3.5 million which pretty much matched expectations.
Shortly after the open, there was news out that Greece and the European Union have agreed to a level of budget cuts that will give the country another bailout. This will help Greece with their debt payments next month but we doubt the drama is over as the country is expecting riots this weekend.
The lack of details though has caused the market to pull back from its highs but the bulls are holding court as we head into the second half of trading.
Elsewhere, Obama just announced the government has reached a $26 billion settlement over shady foreclosure practices with the five largest mortgage service providers. Ally Financial, Bank of America (BAC, $8.23, up $0.10), Citigroup (C, $34.08, down $0.15), JPMorgan Chase (JPM, $38.00, down $0.30) and Wells Fargo (WFC, $30.43, down $0.23) are all trading slightly lower with the exception being BAC.
As we head to press, the Dow is up 27 points to 12,910 while the S&P 500 is higher by 3 points to 1,353. The Nasdaq is showing a gain of 10 points and is at 2,926.
We currently have a Bank of America call option trade that we entered on Monday which is nearing a 50% return so let’s go lock-in some more profits! Subscribers, check the Members Area for the details and we will be back in the morning with our next update.
Tags: bac, Bank of America call options, c, JPM, wfc
Posted in Financial Stocks, Market Analysis, Market Commentary | Comments Off