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Monday, October 8th, 2012
9:00am (EST)
“Although the bulls slipped again last week, September was a month to remember as the market rallied 4%, on average. The indexes failed to make a run at our fluff targets but came close. If there is a pullback or correction, these fluff targets could become yearend targets depending on how much damage the bears do.
For the month, the Dow was up 347 points or 2.6% while the S&P 500 gained 34 points, or 2.4%. The Nasdaq popped 50 points higher, or 1.6%. For the third quarter, the Dow was up 4.3%, the S&P 500 was higher by 5.8%. The Nasdaq popped 6.2% for 3Q.
We warned on Tuesday that the market had its first Friday/ Monday negative close in 6 weeks and Friday’s drop is cause for concern. The trading range over the summer provided up and down Friday and Monday’s which is typical but if we get a lower Monday a trend change could be coming.
We have one more week before earnings season starts and the laundry list of companies that have already pre-warned include: Caterpillar (CAT, $86.04, down $0.88), Dow Chemical (DOW, $28.96, down $0.20), FedEx (FDX, $84.62, down $1.15), Ford (F, $9.86, down $0.16), Procter & Gamble (PG, $69.36, up $0.06), Norfolk Southern (NSC, $63.63, down $0.55) and U.S. Steel (X, $19.07, down $0.24).
Perhaps the bar has been lowered enough, again, that the companies that do beat estimates could prop the market up in October. Our feeling is there could be a slew of companies that miss by a penny or two which is why they didn’t warn Wall Street. If it’s more than that, the market could take a serious hit. Alcoa (AA, $8.86, down $0.13) will be the first Dow component to announce and they will confess on October 9. If shares are up this week, they could have a good quarter in store. If shares trade lower, it could be a warning sign.
October has a history of famous stock market “crashes” so we did some research over the weekend. Believe it or not, September is technically the worst month for stocks but October is more remembered because of scary Halloween’s and the “Black” days.
There are a few investors who may remember the first stock market crash back in 1929 and we were just a teenager when the market tanked in the 80′s which gave us an early lesson in life. The message was not to ever take the market for granted because in one day things can go south in a hurry. It is why we have always respected the bears and why we learned how to short stocks and how to use put options before we ever invested.
In 1929, the Dow dropped 11% intraday on October 24 falling from 305 the previous day before recovering to end the session down only 2%. The day was labeled “Black Thursday”. Four days later, “Black Tuesday” marked the start of the Great Depression as the Dow dropped 11% from a previous close of 260 to 230.
These two days were significant as the Dow tanked 25% in four days following Black Tuesday and 90% in 3 years after Black Thursday occurred.
In 1987, we remember October 19 which would become known as “Black Monday”. The Dow was at 2,246 and plummeted nearly 23%, or 508 points, to end the session at 1,738. Many investors took a tremendous hit to their 401K and retirement plans.
We were a teenager in the 1980’s and just getting our feet wet in the market. Although we personally didn’t take a hit because we weren’t in the market in 1987, it taught us a very valuable lesson and that was to respect the bears. It is also why we learned how to short the market and buy put options which served us well before the crash of 2000.
We aren’t ready to go on record to say there will be a “correction” or a crash this month but we have experienced several October storm clouds over the past 25 years and we typically LOVE them. If there is panic, and the market does start to drop like a rock, buying puts will be very lucrative.
We aren’t sure what the Vegas odds would be on a correction but with so many fundamentals looking bearish, it is something to think about. We have defined clear support and resistance targets so if there is a breakdown or breakout, we should get a few warnings signs.” (from 9/30/2012 Weekly Wrap/ Monday Morning Outlook)…
The bulls were held hostage by Spain’s pending bailout for much of the week but managed to push resistance during the morning hours. The bears were in control of the afternoon sessions which lead to choppy trading but the bulls did a good job of holding their gains going into Friday’s Nonfarm Payroll report.
Some were calling Thursday’s pop the Romney Rally, which we coined back in early September, as the bulls were up 1% ahead of the news. Presidential candidate, Mitt Romney did a great job in the Mile High city to get back in the race and he certainly wasn’t the only one questioning Friday’s unemployment rate which came in at 7.8%. (continued…)
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If you are not a subscriber but would like to read more, please click here.
We are one of the fastest growing stock options trading advisors on the internet and we are doing tremendously well for 2012. Since mid-August, we have closed 19-out-of-21 winning recommendations. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 24-0. Together, we are 133-45 (75% win rate) for both newsletters and we doubt you will find a hotter options trading service.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Earnings, Market Analysis, Market Commentary, Strategies | Comments Off
Thursday, October 4th, 2012
9:00am (EST)
The bulls managed to hold onto their gains during the final hour of trading on Wednesday as they once gain pushed resistance but came up short. Since mid-September, the market has drifted lower but is still holding the first wave of support. The lower trading range is still bullish until the second and third waves crack.
The Wall Street pros who have been looking for a pullback of 3%-5% continue to call this the most hated rally they have ever seen but many of these knuckleheads are severely underperforming the major averages. At some point the market will turn bearish but support has been super strong. On the flip side, we believe if there is a pullback, it could be much worse than anticipated, which will make them think twice about buying a dip. We could spend the rest of the week testing resistance but a breakout or breakdown is upon us.
The Dow was up a dozen points, or 0.1%, to finish at 13,494. The blue-chips fell to a low of 13,439 but rebounded nearly triple-digits to reach 13,536. However, it was another lower high and nearly a lower low for the week which is bearish. Monday’s peak of 13,598 has been the closest to 13,600 the bulls have reached. Support is at 13,350, followed by 13,200.
The S&P 500 advanced 5 points, or 0.4%, to settle at 1,450 which was bullish. The index traded down to 1,441 at the open but bounced back to a peak of 1,454 midday. More importantly, the S&P held 1,450 which is serving as both near-term support and resistance. They is a 25 point swing, or 2%, the bulls or bears are fighting over. Any real estate above 1,475 favors the bulls for a continued run higher. A move below 1,425 could cause a rush for the exits. Monday’s high of 1,457 needs to be cleared by Friday while Tuesday’s low of 1,439 needs to be pushed by the bears. These will be the clues we watch for today.
The Nasdaq popped 15 points higher, or 0.5%, to end at 3,135. Tech held steady at the start of trading after dipping to a low of 3,115 and managed to power its way up to 3,142 on Wall Street’s lunch break. The index still fell short of kissing or clearing 3,150 which is bearish. A close below 3,100 could cause a ruckus. The Nasdaq closed at 3,093 on September 27 after touching 3,080. These levels are only 1% away from triggering and with volatility picking up we need to watch for early clues of a breakdown. Of course, if 3,150 is cleared, the bulls could make another run at our September fluff target of 3,200-3,250.
The Russell 2000 fell 2 points, or 0.2%, to close at 838. The index made a run to 843 but the negative close was bearish. The S&P Volatility Index ($VIX, 15.43, down 0.28) traded between 15-16 all session which was neutral.
As you can see, we are still getting mixed signals on market direction which has lead to a choppy week.
We wanted to take a quick minute to talk about the massive move in shares of Sarepta Therapeutics (SRPT, $44.93, up 29.94) yesterday. Biotech companies are one of our favorite sectors to research for option trades and we love discovering new companies with promising pipelines. Shares of Sarepta soared 200% after the company announced positive results on its muscular dystrophy drug.
The stock opened at 31.81 and reached a peak of $45 into the close. Some of the near-term option zoomed 700% or more on the news.
We checked out the October 15 calls (SRPT121020C00015000, $29.40, up $26.00) shortly after the open to see what the previous day’s premium was and how much they were up. The options closed at $3.40 on Tuesday when shares were at $14.99 which shows these options were already super inflated.
When a stock is a penny away from its strike price from being in-the-money on options that expire in a little over 2 weeks, the premium should be no more than 50 cents or else you are paying too much.
For example, shares of General Electric (GE, $22.91, up $0.12) are just under $23 and the October 23 calls (GE121020C00023000, $0.33, up $0.06) were up 20% on GE’s half-percent move yesterday. In other words, Sarepta’s near-term almost in-the-money call options are are selling for 10 times those of GE.
The easy money has already been made but remember option trading is all about getting the right price and not overpaying.
Futures are showing another higher open this week and look like this: Dow (+36); S&P 500 (+5), Nasdaq 100 (+9). We are close to closing another triple-digit winning trade this week and while we do have stops in place to protect profits, we are trying to squeeze a little more juice out of the call options before Friday’s close.
Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Hot Stocks, Market Analysis, Market Commentary | Comments Off
Wednesday, October 3rd, 2012
9:00am (EST)
The market ended mixed again on Tuesday but this time it was the small-caps and Tech that finished positive while the blue-chips took a hit. There was another push towards resistance by the bulls at the open but we mentioned the bears had momentum in our midday update as they also pushed support.
The Dow dropped 33 points, or 0.2%, to close at 13,482. The blue-chips kissed a high of 13,567 shortly after the opening bell but once again never made a serious push at 13,600. The low for the session came in at 13,424. The Dow is still less than 1% away from 13,350 but also less than 1% from clearing resistance.
The S&P 500 gained 1.26 points, or 0.1%, to settle at 1,445.75. The index cleared resistance at 1,450, briefly, after trading up to 1,451.52 within minutes of the open. However, the low came in at 1,439 which was lower than Monday’s intraday bottom.
The Nasdaq added a 6-pack, or 0.2%, and went out at 3,120. Tech reached a peak of 3,131 but faded down to 3,101 with a little over an hour to go. We have said how crucial the 3,100 level was this week for the bulls and it seems buyers came in right at support. A break below 3,100 could get 3,050-3,000 in the mix real quick.
The Russell 2000 added a fifth of a point and was flat at 840 while the S&P Volatility Index ($VIX, 15.71, down 0.61) fell 4% and went out at its lows.
Futures are showing a slightly higher open this morning and look like this: Dow (+15); S&P 500 (+2); Nasdaq 100 (+7). Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Hot Stocks, Market Commentary, Mergers and Acquisitions | Comments Off
Monday, October 1st, 2012
9:00am (EST)
“We came into the week with the market showing a 4% gain for September and we said the indexes were 2%-3% away from our “fluff” targets. With one week left, we were looking for the bulls to get to within 1% of our fluff targets for the month and with October just around the corner the task just got a little harder but still doable.
There could be a flood of “window dressing” to begin the week but the suit-and-ties will need to be careful. We mentioned that many of the pros went on their late August vacations and were hoping for a pullback when they retuned but they never got it. The fund managers who are lagging the market are going to feel pressure to push while the ones showing a negative return will likely get fired.
We have been mentioning the start of 3Q earnings season and we can now begin the countdown. Alcoa (AA, $9.13, down $0.12) will announce earnings in 16 days, or October 10. The market will be closed on October 8 for Columbus Day.
We have already seen a number of high profile earnings warnings so next week will be the week even more companies could start confessing their sins. Next week is also the last week the suit-and-ties can add positions for the quarter, or sell. We have said many of the pros are way behind the market’s returns and they will have a hard time explaining to their clients they didn’t make them any money this year with Tech up 20%.
Of course, you are considered a Wall Street whiz if you can make your clients 8%-10% a year. Although we love our brothers and sisters who play the game with us, we like to shoot for 100% returns a year for our subscribers. We believe we have done that 7x over this year.
Our point is, we do have high expectations for ourselves but making 10% a year is phenomenal in today’s world so we need to remember this if we get into a flat market of there is a pullback.
The only other curveball we see coming could be a Spain bailout but this is already being anticipated and that may or not happen this week. Last week may have been dull and many of the pros are calling for a pullback. There is an old saying that says “never short a dull market” and the bears a few layers of support to crack before they get on track.
We do need to respect the possibility of a pullback because the warning signs are there but all signs are pointing towards a push to new 52-week highs.” (from 9/23/2012 Weekly Wrap/ Monday Morning Outlook)…
The bears started the week of with another win which marked 16-out-of-17 sessions in which the market has started the week lower. The selling pressure picked up on Tuesday on Spain’s impending bailout which caused protests over further austerity measures. It was Greece all over again and it could get worse. The pullback was enough to crack the first wave of support.
The bulls tried to rebound on Wednesday on better-than-expected Housing numbers but prior support quickly became resistance as the market ended lower. We expected some window-dressing to come in on Thursday and once word spread that Spain had announced a detailed timetable for economic reform, the bulls rallied. The indexes fell just short of reclaiming support going into Friday’s action which proved to be resistance.5
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If you are not a subscriber but would like to read more and check our chart work for the indexes and our current trades, please click here. We are one of the fastest growing stock options trading advisors on the internet and we are doing tremendously well for 2012.
Since mid-August, we have closed 18-out-of-20 winning recommendations. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 24-0. Together, we are 132-45 (75% win rate) for both newsletters and we doubt you will find a hotter options trading service.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Market Analysis, Market Commentary, Sectors | Comments Off
Thursday, September 27th, 2012
12:45pm (EST)
The market got a nice pop at the open dispite mixed economic news as the bulls look to reclaim prior support levels. Jobless Claims came in better-than-expected while Housing numbers, which have been hot, cooled.
Initial Claims fell 26,000 to 359,000 which was the lowest level since July. The suit-and-ties were looking for a decline to 375,000, Continuing Claims dropped 4,000 to 3.27 million.
Pending Home Sales came in below expectations as the index slipped to 99.2, down from a 2-year high of 101.7 in July. The dip was blamed for the ongoing shortage of lower priced homes.
Elsewhere, Durable Orders tumbled 13.2% in August which was a shocker to say the least. Futures took a hit but remained positive which surprised the bears. Wall Street had penciled a drop of a little over 5% and the blame was placed on weaker airline and auto orders.
Tomorrow is end of month and quarter for the market and we haven’t seen the “window-dressing” that was expected to prop up the market this week. This means fund mangers are standing pat and locking-in profits on their winners, hoping the market retreats. That could be a dangerous game. Of course, there are some money managers buying which is why the market has been a little choppy this week.
We said this morning the bulls needed to hold their gains and the final hour could be crucial as we head into tomorrow’s action.
The Dow is up 81 points to 13,495 while the S&P 500 is higher by 13 points to 1,446. The Nasdaq is showing a gain of 37 points to 3,130.
As usual, we have a lot to talk about as some of our current trades are showing nice pops so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Economic News, Market Analysis, Market Commentary | Comments Off
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Bulls Pushing Fluff Targets
Monday, October 8th, 2012
9:00am (EST)
“Although the bulls slipped again last week, September was a month to remember as the market rallied 4%, on average. The indexes failed to make a run at our fluff targets but came close. If there is a pullback or correction, these fluff targets could become yearend targets depending on how much damage the bears do.
For the month, the Dow was up 347 points or 2.6% while the S&P 500 gained 34 points, or 2.4%. The Nasdaq popped 50 points higher, or 1.6%. For the third quarter, the Dow was up 4.3%, the S&P 500 was higher by 5.8%. The Nasdaq popped 6.2% for 3Q.
We warned on Tuesday that the market had its first Friday/ Monday negative close in 6 weeks and Friday’s drop is cause for concern. The trading range over the summer provided up and down Friday and Monday’s which is typical but if we get a lower Monday a trend change could be coming.
We have one more week before earnings season starts and the laundry list of companies that have already pre-warned include: Caterpillar (CAT, $86.04, down $0.88), Dow Chemical (DOW, $28.96, down $0.20), FedEx (FDX, $84.62, down $1.15), Ford (F, $9.86, down $0.16), Procter & Gamble (PG, $69.36, up $0.06), Norfolk Southern (NSC, $63.63, down $0.55) and U.S. Steel (X, $19.07, down $0.24).
Perhaps the bar has been lowered enough, again, that the companies that do beat estimates could prop the market up in October. Our feeling is there could be a slew of companies that miss by a penny or two which is why they didn’t warn Wall Street. If it’s more than that, the market could take a serious hit. Alcoa (AA, $8.86, down $0.13) will be the first Dow component to announce and they will confess on October 9. If shares are up this week, they could have a good quarter in store. If shares trade lower, it could be a warning sign.
October has a history of famous stock market “crashes” so we did some research over the weekend. Believe it or not, September is technically the worst month for stocks but October is more remembered because of scary Halloween’s and the “Black” days.
There are a few investors who may remember the first stock market crash back in 1929 and we were just a teenager when the market tanked in the 80′s which gave us an early lesson in life. The message was not to ever take the market for granted because in one day things can go south in a hurry. It is why we have always respected the bears and why we learned how to short stocks and how to use put options before we ever invested.
In 1929, the Dow dropped 11% intraday on October 24 falling from 305 the previous day before recovering to end the session down only 2%. The day was labeled “Black Thursday”. Four days later, “Black Tuesday” marked the start of the Great Depression as the Dow dropped 11% from a previous close of 260 to 230.
These two days were significant as the Dow tanked 25% in four days following Black Tuesday and 90% in 3 years after Black Thursday occurred.
In 1987, we remember October 19 which would become known as “Black Monday”. The Dow was at 2,246 and plummeted nearly 23%, or 508 points, to end the session at 1,738. Many investors took a tremendous hit to their 401K and retirement plans.
We were a teenager in the 1980’s and just getting our feet wet in the market. Although we personally didn’t take a hit because we weren’t in the market in 1987, it taught us a very valuable lesson and that was to respect the bears. It is also why we learned how to short the market and buy put options which served us well before the crash of 2000.
We aren’t ready to go on record to say there will be a “correction” or a crash this month but we have experienced several October storm clouds over the past 25 years and we typically LOVE them. If there is panic, and the market does start to drop like a rock, buying puts will be very lucrative.
We aren’t sure what the Vegas odds would be on a correction but with so many fundamentals looking bearish, it is something to think about. We have defined clear support and resistance targets so if there is a breakdown or breakout, we should get a few warnings signs.” (from 9/30/2012 Weekly Wrap/ Monday Morning Outlook)…
The bulls were held hostage by Spain’s pending bailout for much of the week but managed to push resistance during the morning hours. The bears were in control of the afternoon sessions which lead to choppy trading but the bulls did a good job of holding their gains going into Friday’s Nonfarm Payroll report.
Some were calling Thursday’s pop the Romney Rally, which we coined back in early September, as the bulls were up 1% ahead of the news. Presidential candidate, Mitt Romney did a great job in the Mile High city to get back in the race and he certainly wasn’t the only one questioning Friday’s unemployment rate which came in at 7.8%. (continued…)
**********************************************
If you are not a subscriber but would like to read more, please click here.
We are one of the fastest growing stock options trading advisors on the internet and we are doing tremendously well for 2012. Since mid-August, we have closed 19-out-of-21 winning recommendations. We offer 2-3 powerful call or put option trades each week (depending on market conditions) aimed at triple-digit returns for our Daily newsletter and our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis and is 24-0. Together, we are 133-45 (75% win rate) for both newsletters and we doubt you will find a hotter options trading service.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Earnings, Market Analysis, Market Commentary, Strategies | Comments Off