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Wednesday, September 23rd, 2009
9:20am (EST)
Futures are slightly higher this morning as Wall Street awaits the Federal Reserve’s decision on interest rates. Dow futures are up 11 to 9,782. S&P 500 futures are higher by 2 to 1,069 while the Nasdaq 100 futures are up 7 to 1,740.
The U.S. central bank is expected to keep interest rates at a record low of near zero, but the Street will be looking for an indication of when the Fed may raise rates in the future. Look for fireworks at 2:15pm.
There are a few movers and shakers before the bell…AutoZone (AZO, $152.92) is down $4.50 in pre-market trading after it missed Wall Street’s estimates. For the quarter, the company said it earned $236 million, or $4.33 per share, down from $244 million, or $3.88 per share, a year ago. Analysts were expecting a profit of $4.45 per share for the latest quarter.
Dendreon (DNDN, $28.87) is back near $30 and Citigroup (C, $4.65) is also up before the bell. I’ll be back at 1pm with the mid-day update. Subscribers, check the Members Area for the trade updates.
Rick@MomentumOptionsTrading.com
Tags: AutoZone, AZO, c, Citigroup, Dendreon, dndn, options picks, options trading strategies Posted in Hot Stocks | Comments Off
Tuesday, September 22nd, 2009
8:45am (EST)
Futures are steam-rolling higher this morning, pointing towards a nice open as the market tries to rebound from yesterday’s losses. It looks like the bulls are ready to run once we open but will it be enough to get the Dow to 10,000?
Ahead of the bell, Dow futures are up 47, to 9,765. S&P 500 futures are higher by 6, to 1,066, while the Nasdaq 100 futures have climbed 11, to 1,739.
The first hurdle to clear this morning will be the housing price numbers which are due out at 10am. The Federal Reserve also kicks off its two-day interest rate meeting today, and although they don’t comment on the first day, interest rates are expected to remain unchanged when they announce Wednesday. Also, the U.S. Treasury is selling $45 billion in two-year notes so we will have to see what impact this could have on the market.
It looks like the cruise industry is enjoying better times…Carnival (CCL, $32.00) is trading higher by $1.65, to $33.65, after reporting better-than-expected earnings this morning. Ditto for ConAgra Foods (CAG, $22.33) as it reported 1Q results that topped Wall Street’s expectations.
As far as stocks we are watching, Citigroup (C, $4.43) is up 14 cents, Research In Motion (RIMM, $84.16) is trading near $85, and Dendreon (DNDN, $29.46) is up 44 cents to $29.90. Subscribers, check the Members Area for the trade updates…
Rick@MomentumOptionsTrading.com
Tags: ChangeYou.com, Citigroup, Dendreon, Dendreon Blog, IBM, Imax, momentum options trading, Momentum stocks, options blog, options trade picks, Research in Motion Posted in Apple, Earnings, Financial Stocks, Market Commentary, Option Trades | Comments Off
Tuesday, September 15th, 2009
9:00am (EST)
Futures were slightly higher before the Retail and PPI numbers came out at 8:30am. Before the reports the Dow futures had been up 4 while the S&P 500 futures were higher by 1 but jumped after the reports were released. August Retail Sales were up 2.7% compared to expectations for an increase of 1.9%. August PPI was 1.7% compared to a forecast of 0.8%.
Best Buy (BBY, $40.10, down $0.31) is trading lower after missing its quarterly number. The company reported earnings of $0.37 a share which was $0.05 lower than what Wall Street was predicting. However, the company did beat its revenue number which came in at $11 billion versus expectations of $10.79 billion.
From the Are You Serious department…Yesterday I mentioned Zoom Technologies (ZOOM, $13.20, up $0.51) at lunchtime when the stock was at $7.44, up 84% for the day. The stock closed at $12.69 and is up another 4% in pre-market trading.
Other stocks we are watching this morning: Freeport McMoRan (FCX, $71.01, up $0.39) is up while Dendreon (DNDN, $26.55, down $0.55) has actually slipped. Dendreon had been positive for much of the early trading after tacking on another 50 cents in last night’s after-hours. We still haven’t “officially” opened but subscribers should check the Members Area for the latest updates on both of these trades.
Looks like we are headed higher at the open. As a reminder, I have been fielding a lot of emails asking where the market is headed. Well, to be honest, no one really knows but here were my thoughts on August 23rd, which, after three weeks has been spot on:
“The market has had an incredible run and the key levels we are watching are as follows.
For the Dow (currently 9,505), watch for 9,625 which was the November high. A run above this level clears the way for…dare I say it….Dow 10,000. There is support at 9,000 but a break below 8,900 would send up a warning signal.
As for the Nasdaq (2020), it looks like 2,100 is smooth sailing as long as the bulls continue to run this week. Above that, we get choppy but we could get a run to 2,275. Support is at 1,930 and further down at 1,800 or so. A break below that could lead to 1,600.
The S&P 500 (1,026) could easily make a stab at 1,100 now that it has surged past 1,000 but 979 will be key support near-term. There is really nothing stopping the index from hitting 1,150-1,175 which is where headwinds will pick up.” (END)
The Dow is at 9,626, the Nasdaq at 2,091 while the S&P starts the day at 1,049. That was the road map we drew up in August. Let’s see if it holds up…
Subscribers, don’t forget to check the Membes Area.
Tags: Citigroup, Dendreon, Freeport-McMoRan, Imax, Zoom Technologies Posted in Earnings, Economic News, Market Analysis, Market Commentary, Mergers and Acquisitions, Option Trades | Comments Off
Thursday, September 10th, 2009
8:25am (EST)
Somebody forgot to tell the bulls that September is historically a bad month for the market. There wasn’t much action heading into Friday’s unemployment report but now that it is out of the way, the bulls seemed determined to take us higher.
The Financials put in a good day after a few upgrades in the sector. Citigroup (C, $4.66, down $0.02) upgraded shares of MasterCard (MA, $210.31, up $2.86) while JPMorgan (JPM, $42.86, up $0.32) super-sized Morgan Stanley (MS 28.55, +0.75).
This is normally the time of year that companies pre-announce earnings but I don’t think we have to worry about the Financials saying anything negative…I wouldn’t think. Quietly, they have reported back-to-back solid quarters and if 3Q earnings come out better-than-expected, watch out.
One stock that I wanted to mention this morning real quick is JDS Uniphase (JDSU, $7.37, up $0.14). A subscriber pointed out that he now had a profitable position but I dropped the trade because I thought it would expire worthless (just like he thought). I profiled the September 7 calls (UQDIJ, $0.45, up $0.10) on June 9th and we left them for dead two weeks later. There was no stop on the trade and I had this to say:
From June 22nd (quotes are from that day):
“JDS Uniphase (JDSU, $5.48, down $0.39) is a “lottery” play and we entered the September 7 calls (UQDIJ, $0.10, down $0.10) at 35-40 cents. One contract would have cost you $40 or 5 contracts would have cost $200. When I say a trade is a “lottery” trade that means there is no stop for these positions because they are just that..lottery picks. As you can see, we will have to wait this one out.” (END)
The reason I am pointing this out is because we currently have a few “lottery trades” in the portfolio. These types of trades are OKAY to try but only if you do limited positions AND you are doing well on your larger trades. Lottery trades are options that trade for under 50 cents. We normally do 10 and 20 lot trades on options that cost $1.50-$2.50. These trades are more detailed and aren’t on lower priced stocks.
Back in the day, they didn’t even list options for stocks that trade for under $5.
The key to taking on these risky trades is to only buy the same amount of contracts that you do with the other trades. If you buy 10 contracts of a $2.00 option and it goes to $4.00 you have made $2,000. If you then take those profits and roll the dice on a “speculative” trade that you think could do well and you buy 10 contracts for 30 cents, you are risking $300. You still have a profit of over $1,700 which would allow you to play in this area.
That is all I have for today. There was no afternoon post yesterday because of Jury Duty. And I have it again today so no afternoon post. Sorry folks, this is about the only thing that makes me miss an update.
Subscribers: Please don’t forget to check the MEMBERS AREA for all NEW trades. The trade updates are posted by 9:00am (EST) EVERY morning and I don’t profile mid-day trades. So, if you are a subscriber, check the Members Area daily to see what we have going on. I have profiled two for Thursday morning.
Rick@MomentumOptionsTrading.com
Tags: Citigroup, JDS Uniphase, JPMorgan, Morgan Stanley Posted in Option Trades | Comments Off
Monday, September 7th, 2009
11:00pm (EST)
1. Commentary
2. Imax Could Be A Wildcard
3. Earnings
4. Current Trades
5. Closing Thoughts
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1. Commentary
The market was on pins and needles all week as all eyes were on “the number” before the bell on Friday. It was a choppy week that started off with a thud as the Financial stocks took a beating after rumors of a big bank failure was making the rounds.
Wells Fargo (WFC, $26.91) squelched murmurs of a dilutive secondary offering which has been going around for weeks as the company said it intendeds to repay the TARP funds it borrowed without raising equity.
Of course, a weaker-than-expected unemployment rate of 9.7% made the print on Friday as Wall Street had expected 9.5%. Despite the not so shocking news, the market trended higher on Friday but finished lower for the week.
Overall, the Dow lost 103 points to finish the week at 9,441. The Nasdaq fell 10 and stands at 2,018 while the S&P 500 gave back 12 points and closed at 1,016.
I’ve got a lot I want to talk about so let’s move on after enjoying this Holiday weekend…
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2. Imax Could Be A Wildcard
Folks, I am really starting to like Imax (IMAX, $9.30, up $0.12). This piece is from the December 8th, 2008 Blog:
“I’m not all that excited about the “movie” stocks but there may be an opportunity to make some trades within the sector as we head into a festive time of the year. Thanksgiving through Christmas is movie heaven and there’s a chance some of these beaten down stocks could recover.
The one player I do like in the sector is Imax (IMAX, $2.73, down $0.08) and I have mentioned this stock before at higher levels. I do not trust the stock enough to buy any longer-term options (yet) but Imax could be a force in the movie industry down the road.
Although we were successful in riding Imax to its 52-week high, the stock has dropped nearly 70% from a peak of $8.28. The stock is cheap enough to the point where instead of making an option trade it might be better off to buy the stock. It eliminates the risk of an option expiring worthless and if Imax can get to $10, you would easily triple your money.
Imax has its fingers in a lot of pies and is developing some solid business partners and relationships with some top-tier names. The company recently inked a deal with Walt Disney (DIS, $21.94, up $0.48) and is strategically building the “Imax Experience” into a tidal wave. ” (END)
If you had just bought the stock back then you would be up nearly 250% today. So what is next for Imax?
To read the rest of this story, please go to our Members Area. Subscribers click on Tuesday’s link 9/8/09.
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3. Earnings
Monday: Market Closed
Note: Check the Members Area for a possible trade on a couple of these names.
Tuesday: Casey’s General Stores (CASY, $28.32, up %0.06), Nobel Learning Communities (NLCI, $10.32, down $0.06), Pep Boys (PBY, $9.30, up $0.60), Smithfield Foods (SFD, $13.04, up $0.31).
Wednesday: Globecomm Systems (GCOM, $7.60, up $0.43), Hi-Tech Pharmacal (HITK, $15.79, up $1.00), Investors Real Estate (IRET, $9.19, up $0.12), Men’s Wearhouse (MW, $25.91, up $0.66), Shuffle Master (SHFL, $7.50, up $0.25), Smith & Wesson Holding (SWHC, $5.28, up $0.09) and United Natural Foods (UNFI, $27.86, up $0.43).
Thursday: AEP Industries (AEPI, $38.18, up $0.40), Lululemon Athletica (LULU, $19.97, up $0.18) and Navistar International (NAV, $46.35, up $1.50).
Friday: Aceto (ACET, $6.50, down $0.06), Brady Corporation (BRC, $30.35, up $0.56) and Campbell Soup (CPB, $31.19, up $0.31).
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4. Current Trades
For our current trades please check the Members Area.
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5. Closing Thoughts
Depending on this week, it looks as though the bulls are at least going to hold Dow 9,000 as we head into 3Q earnings season. We saw a lot of companies beat in the second quarter but that was by cutting costs. We will need to see revenue growth at some point.
We were shaky on Tuesday with the Financials taking a hit and the China market tanking but the sell-off didn’t have any follow through. By Thursday, the bulls were back in buying the dip and started nibbling again on Friday.
As I go to press, Dow futures are up 45 while the Nasdaq and S&P 500 futures are up 6. That means that sentiment is leaning towards a positive open on Tuesday.
Rick Rouse
Rick@MomentumOptionsTrading.com
Tags: Campbell Soup, Citigroup, Dendreon, Imax rumors, Marvel Entertainment, MomentumOptionsTrading.com, options blog, Pep Boys, Time Warner, Walt Disney Posted in Company Commentary, Earnings, Economic News, Entertainment Stocks, Financial Stocks, Hot Stocks, Market Analysis, Mergers and Acquisitions, Option Trades, Sectors, Strategies, Weekly Wrap | Comments Off
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Futures Pointing Towards Higher Open
Tuesday, September 22nd, 2009
8:45am (EST)
Futures are steam-rolling higher this morning, pointing towards a nice open as the market tries to rebound from yesterday’s losses. It looks like the bulls are ready to run once we open but will it be enough to get the Dow to 10,000?
Ahead of the bell, Dow futures are up 47, to 9,765. S&P 500 futures are higher by 6, to 1,066, while the Nasdaq 100 futures have climbed 11, to 1,739.
The first hurdle to clear this morning will be the housing price numbers which are due out at 10am. The Federal Reserve also kicks off its two-day interest rate meeting today, and although they don’t comment on the first day, interest rates are expected to remain unchanged when they announce Wednesday. Also, the U.S. Treasury is selling $45 billion in two-year notes so we will have to see what impact this could have on the market.
It looks like the cruise industry is enjoying better times…Carnival (CCL, $32.00) is trading higher by $1.65, to $33.65, after reporting better-than-expected earnings this morning. Ditto for ConAgra Foods (CAG, $22.33) as it reported 1Q results that topped Wall Street’s expectations.
As far as stocks we are watching, Citigroup (C, $4.43) is up 14 cents, Research In Motion (RIMM, $84.16) is trading near $85, and Dendreon (DNDN, $29.46) is up 44 cents to $29.90. Subscribers, check the Members Area for the trade updates…
Rick@MomentumOptionsTrading.com
Tags: ChangeYou.com, Citigroup, Dendreon, Dendreon Blog, IBM, Imax, momentum options trading, Momentum stocks, options blog, options trade picks, Research in Motion
Posted in Apple, Earnings, Financial Stocks, Market Commentary, Option Trades | Comments Off