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Monday, March 5th, 2012
1:25pm (EST)
The market has gotten off to a slow start as futures were weak throughout the night. We spent a lot of time looking at the charts over the weekend and the 5-week trading range we have been in has been frustrating to a degree. While we continue to take profits when we can, it’s been harder to establish a clear trend as the indexes continue to churn sideways. We mentioned this morning and in last night’s Weekly Wrap that the Russell 2000 (800.10, down 2.32 points) was breaking down like a rented mule and needed to hold 800 but there are some other sectors showing weakness which has lead to today’s decline.
Economic news has come in better-than-expected but China lowered its GDP (Gross Domestic Product) figures which offset the good news here at home. The February ISM non-manufacturing index came in at 57.3, versus expectations for a print of 56, while Factory Orders showed a decrease of 1.0% in January, versus expectations for a 1.5% decline.
Meanwhile, China lowered its GDP target to 7.5% from 8% which has been a goal for them since 2005. This was one of the key reasons the overseas markets were weak when they opened. China said that it needs to shift to a more sustainable and efficient economic model which could cut its reliance on exports and capital spending in favor of increased consumption. The news wasn’t all that bad as many analysts expected them to lower their GDP to 7% or less.
The two big events this week is the expected announcement of Apple’s (AAPL, $535.76, down $9.42) iPad 3 and Friday’s unemployment numbers. The headlines that come from the news will surely sway the markets and it may or may not be enough to break us out of this trading range but we are betting it will.
Given the lack of positive catalysts today, the bulls have struggled to gain momentum as the bears have held any advance in check. The Dow is down 46 points to 12,931 while the S&P is lower by 8 points to 1,361. The Nasdaq is off 28 points to 2,948.
Some good news for our portfolio – Our magicJack VocalTec (CALL, $23.26, up $1.28) call options continue to shine. The trade is now up 179% and we are looking for shares to make a move north of $25 this week. If not, our hard Stop will protect profits. Subscribers, check the Members Area for the updates and we will see the rest of yawl in the morning.
Tags: AAPL, Apple put options, CALL, call options, iPad3, magicJack
Posted in Apple, Economic News, Market Analysis, Market Commentary | Comments Off
Monday, March 5th, 2012
10:50am (EST)
Our Hard Stop for Carrizo Oil & Gas (CRZO, $28.82, down $1.10) is coming into play on the other half of our current call option trade so let’s take profits. We were able to close half of the trade last week for a 42% win and we are closing the other half for a 25% gain which gives us an overall profit of 33%. We were hoping to squeeze a little more juice out of Carrizo but following last week’s surge past $30, shares appear to consolidating. Subscribers, check the Members Area for the update and we will be back shortly with the afternoon news.
Tags: call options, CRZO
Posted in Market Analysis, Market Commentary | Comments Off
Wednesday, February 22nd, 2012
1:00pm (EST)
The bulls are struggling with resistance once again as they have been unable to mount an attack following yesterday’s lackluster performance. Economic news will be light for the holiday shortened week and today’s housing numbers failed to provide a lift even though they came in better-than-expected.
Existing Home Sales for the month of January showed an increase of 4.3%, versus an expected pop of 1%. However, December’s growth rate was revised lower which helped the numbers.
Looking at earnings, Dell (DELL, $17.02, down $1.19) is down nearly 7% after missing Wall Street’s estimates by a penny. Hewlett-Packard (HPQ, $28.95, down $0.40) will report after the close along with Polypore International (PPO, $43.14, down $0.05).
One stock we are watching closely today is Vivus (VVUS, $10.55) which has been HALTED for pending news. The company is hoping to get the green light for its obesity drug, Qnexa, and is meeting with the suit-and-ties in Silver Spring, Maryland.
A FDA advisory panel will make a recommendation to the board on if the drug should be approved or not. This is not a final verdict, but today’s decision will carry a ton of weight (pun intended) on if the drug makes it to market.
Another possible event that could get the Nasdaq going is Apple’s (AAPL, $512.75, down $2.10) shareholder meeting on Thursday. If the company were to announce a “special dividend” or even better, they say they are buying Twitter, shares would likely continue their recent assault on 52-week highs. We will likely get the iPad3 update and maybe an iPhone5 tease but we would like to see them do something with the $100 billion they have in cash.
As far as the market, the Dow is down 39 points to 12,926 while the S&P 500 is off 5 points to 1,357. The Nasdaq is showing a loss of 15 points and was last seen at 2,933. As usual, we have a lot to cover in our Members Area so let’s get on it. Subscribers, check for the updates and we will see the rest of you Thursday AM.
Tags: call options, Dell, Momentum stocks, PPO
Posted in Earnings, Economic News, Market Analysis | Comments Off
Thursday, February 9th, 2012
9:00am (EST)
The bulls finally caught a break and had some momentum before the bell on Wednesday but struggled to hold their gains as a Greece deadline looms. We held off a day talking about the cash-strapped country because much of the rhetoric is the same and because Greece is still talking to the troika on austerity measures.
The troika is the 3-headed monster made up by the International Monetary Fund (IMF), European Union (EU), and European Central Bank (ECB) and we have mentioned how all three are trying to help Greece pay the mortgage.
We won’t go over all of the proposed details but we can imagine the sheets hitting the fan when the Greek government workers, who are promised jobs for life, get a pink slip. The general public probably won’t be too happy with a 20% cut in minimum wage.
Despite the nervousness, the bulls won their second-straight session and now hold a slim lead for the week.
The Dow added 6 points to end at 12,883. The blue-chips traded within a tight 76 point range with the high at 12,893 while the low was 12,817. The 12,800 support level has held up well this week but it feels like we are skating on ice.
The S&P 500 gained 3 points and settled just under our 1,350 target at 1,349.95996 to be exact. The index did trade to a high of 1,351 on the dot and these funny numbers might be giving us a bulls or bear clue. Remember, we want to see a close above 1,350 this week or our February pullback (which we predicted in early January but told you to stay long) could be on the horizon.
The Nasdaq added a dozen points and finished at 2,915. We mentioned Tech was at a decade high, and the index reached a peak of 2,918 yesterday, but we still need another 3% move before our 3,000 near term-target is hit.
Although the bulls have the lead for the week, they have been unable to close above our near-term targets. This is making us a little nervous but we have been closing our bullish call positions and banking as much cash as we can before there is a pullback.
We do have some open March, April and June call options that are open but we have locked in half profits on some of them and have stop targets in place to protect profits. We only have two open February positions which expire next week so we are in beautiful shape.
We have turned a $10,000 portfolio into nearly $30,000 in just 6 weeks as we have hit 22-out-of-23 winning trades to start 2012. You can request our track record if you are not a subscriber to see the detailed trade-by-trade performance.
Breaking News – a statement on a Greek debt deal is imminent.
As we head to press, futures look like this: Dow (+12), S&P (+1), Nasdaq (+1). Subscribers, check the Members Area for the updates.
Tags: call options, stock option trading, troika
Posted in Market Commentary, Money Management, Option Trades | Comments Off
Monday, February 6th, 2012
12:40pm (EST)
The market is trading slightly lower to start the week after another failed weekend of talks between Greece and the European Union. The head officials want Greece to sign-off on new austerity measures and several of the politicians are against the new rules as you can imagine. They still want to kick the can down the road for another couple of years but they can’t bite the hand that feeds them.
Greece has been a drag on the indexes for months but the market continues to move higher which shows that it may not be a big deal if they do default. Sure, there will be a knee-jerk reaction if there is, and Greece is suppose to submit its final proposal today or tomorrow with a EU vote on Thursday. Stay tuned.
In merger Monday news, O’Charley’s (CHUX, $9.80, up $2.88) is up over 40% despite reporting quarterly earnings well below Wall Street estimates. The company posted a loss of 38 cents a share on revenue of $182 million. The suit-and-ties had expected a loss of 22 cents a share on sales of $181 million. The good news for shareholders is that O’Charley’s also said it would be acquired by Fidelity National Financial (FNF, $18.23, down $0.20) which has a history of doing small deals like this.
We mentioned last night in our Weekly Wrap that economic news would be light for today and tomorrow so earnings and Greece will be the catalysts that move us higher or lower.
As we head to press, the Dow is down 43 points to 12,819 while the S&P is off by 4 points to 1,341. The Nasdaq is lower by 9 points to 2,896. The market may be lower but it feels as though it wants to go higher today.
We do have some good news with our current trades as most of them are in the green and are extending last week’s powerful gains. Yes, it is a stock picker’s market which we have proven for the last few months but the talking heads are now just realizing it.
We have locked-in profits on a few current winners and our Dendreon (DNDN, $16.18, up $2.01) call option trade is surging today as the stock is up 14% on no news.
We also have a NEW TRADE and profits to take on 2 other call positions as one of them is up nearly 60% since Friday while the other is up over 50% in just one week!
Subscribers, check the Members Area for the updates and we will be back in the morning with the latest & greatest.
Tags: call options, CHUX, dndn
Posted in Earnings, Hot Stocks, Mergers and Acquisitions, Trade Update | Comments Off
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Bears Grab Early Lead
Monday, March 5th, 2012
1:25pm (EST)
The market has gotten off to a slow start as futures were weak throughout the night. We spent a lot of time looking at the charts over the weekend and the 5-week trading range we have been in has been frustrating to a degree. While we continue to take profits when we can, it’s been harder to establish a clear trend as the indexes continue to churn sideways. We mentioned this morning and in last night’s Weekly Wrap that the Russell 2000 (800.10, down 2.32 points) was breaking down like a rented mule and needed to hold 800 but there are some other sectors showing weakness which has lead to today’s decline.
Economic news has come in better-than-expected but China lowered its GDP (Gross Domestic Product) figures which offset the good news here at home. The February ISM non-manufacturing index came in at 57.3, versus expectations for a print of 56, while Factory Orders showed a decrease of 1.0% in January, versus expectations for a 1.5% decline.
Meanwhile, China lowered its GDP target to 7.5% from 8% which has been a goal for them since 2005. This was one of the key reasons the overseas markets were weak when they opened. China said that it needs to shift to a more sustainable and efficient economic model which could cut its reliance on exports and capital spending in favor of increased consumption. The news wasn’t all that bad as many analysts expected them to lower their GDP to 7% or less.
The two big events this week is the expected announcement of Apple’s (AAPL, $535.76, down $9.42) iPad 3 and Friday’s unemployment numbers. The headlines that come from the news will surely sway the markets and it may or may not be enough to break us out of this trading range but we are betting it will.
Given the lack of positive catalysts today, the bulls have struggled to gain momentum as the bears have held any advance in check. The Dow is down 46 points to 12,931 while the S&P is lower by 8 points to 1,361. The Nasdaq is off 28 points to 2,948.
Some good news for our portfolio – Our magicJack VocalTec (CALL, $23.26, up $1.28) call options continue to shine. The trade is now up 179% and we are looking for shares to make a move north of $25 this week. If not, our hard Stop will protect profits. Subscribers, check the Members Area for the updates and we will see the rest of yawl in the morning.
Tags: AAPL, Apple put options, CALL, call options, iPad3, magicJack
Posted in Apple, Economic News, Market Analysis, Market Commentary | Comments Off