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Friday, July 2nd, 2010
1:20 pm (EST)
The bears are trying to end the week with an explanation point as the market continues to drift lower after today’s big unemployment report. The government said private employers added 83,000 jobs last month, which was fewer than the 112,000 Wall Street had expected. Overall, 125,000 workers lost their jobs last month, worse than the 110,000 forecast and 225,000 census jobs were cut in June.
In other economic news, Factory Orders for May were down 1.4% which was steeper than the 0.6% drop that had been forecast.
As a result, the bears are going for their 7th win in-a-row on the Dow and the index is currently down by 90 points to 9,643. The S&P 500 is off by 9 to 1,018 while the Nasdaq is down 18 points to 2,083. Remember, we have Dow 9,500; S&P 975; and Nasdaq 2,050 as our next downside targets…
Apple (AAPL, $245.19, down $3.29) is trading lower today after saying it was “stunned” to find that its iPhone 4 was having issues. Apparently, the company has been using a “totally wrong” formula for years and the snafu centers around how many bars of signal strength users are getting by how they hold the smartphone.
We would love to trade options on Apple but the premiums are a bit rich until they do a stock-split. We shy away from playing options on stocks over $100 but we wouldn’t be surprised if the company does do a 3-for-2 or 2-for-1 split down the road or on their next earnings announcement. They need to.
Dendreon (DNDN, $28.85, down $1.28) took a hit yesterday and is down again today 4%. The U.S. Medicare program said late Wednesday that it was reviewing the company’s prostate cancer drug, Provenge, to decide whether they are going to cover it.
The stock was down big-time in after-hours Wednesday night to $25 but managed to hold the $28 level yesterday when trading officially began. Shares closed above $30 and might be looking to test yesterday lows.
Dendreon won approval for Provenge in late April and watched its shares surge from $40 to a high of $57 following the news. We were able to get our subscribers into a Dendreon call option trade before this major announcement and they walked away with an 80% return in less than a week.
Of course, many of you know we have followed this company for a few years and we brought it to your attention when shares were under $5. From the Peter Lynch days, that was a 10-bagger from the low to the highs. Shares stayed in the $40′s for much of May but hovered in the upper $30′s until this week.
So, is Dendreon a “Buy” at these levels or will the stock head back to the lower $20′s making it a “Sell” recommendation?
The reason this is such a big issue is because Medicare coverage could help make the product successful, while a denial could sharply hit sales.
Provenge has a hefty price tag and costs over $90,000 for the full treatment of three infusions. Medicare & Medicaid will have to pony up 80% of that if Provenge is covered. Now you can see where this is going (or isn’t?). Dendreon can thank the government.
It is too early to make an informed investment decision because a proposed ruling isn’t due until March, 2011. Then, a final decision would be decided by June 2011. However, as much as we love the stock, this could create significant uncertainty for Dendreon and it could be a possible put option trade. It’s too early to tell but shares could retreat to the low $20’s.
The market will be closed on Monday but we will do our Weekly Wrap sometime during the day. We have a lot of good news going on in the portfolio so we wanted to give you one last update before the weekend. We will also be able to give you a few more details on Auto-Trading and our new “How to Trade Options on Momentum Stocks” option trading manual.
Have a great weekend, everybody!
Tags: AAPL, Apple glitch, call options, Dendreon, dndn, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
Posted in Apple, BioTech, Economic News | Comments Off
Monday, June 7th, 2010
1:10pm (EST)
The bulls tried to rally the market at the open but after a brief stay in positive territory the major indexes are mixed. The euro fell to a low of $1.188 before bouncing back to $1.192 which helped stabilize the overseas market but the trend is still bearish and isn’t going to change anytime soon.
We are watching the $1.180 level for the euro which is where the currency ended its first day of trading back in January 1999. The 10-year average for the euro against the dollar is $1.20 and we wouldn’t be surprised if $1.15 is taken out.
Biotech is making a lot of noise today with mixed results but we are watching shares of Dendreon (DNDN, $38.26, down $2.58) which are down 6% today. Investors seemed disappointed when the company’s CEO said they had no plans to partner with someone to produce Provenge faster. He said they have a few more plants coming on board to manufacture the drug and that they are the experts on Provenge with plenty of support to move the company forward.
Dendreon has spent nearly $1 billion over the past 15 years to bring Provenge to the market so they have a game plan in place. In fact, we can’t blame them for doing it their way and their pipeline could yield other cancer cures. If shares fall back to $32 then we would seriously think about actually buying the stock but there may also be a chance to buy some longer-term call options.
Apple (AAPL, $256.27, up $0.30) was trading lower but has turned around. The company is unveiling its 4G iPhone during its annual software developer’s conference in San Francisco today. There is a lot of chatter on what new features have been added and we are hearing a higher-resolution screen, improved battery life, a cooler camera and the ability to multitask.
 AAPL 15-minute chart The bad news from all of this is that AT&T (T, $24.58, up $0.41) has eliminated its unlimited monthly data plans for new users of the iPhone and iPad. If you haven’t been with AT&T then you will have to choose between two data plans with monthly usage limits and pay more for extra use. There has been talk that Apple will partner with other carriers so AT&T could be taking a big risk trying to squeeze out more revenue.
As we head to press, The Dow is trading higher by 20 points and is at 9,952 while the S&P 500 is up 2 to 1,067. The Nasdaq is showing a 7 point loss and was last seen at 2,211.
We have a lot to cover with our current trades and there are a few others on our Watch List that are making some nice moves today. Current subscribers, check the Members Area for the updates as we expect any rally to fade.
Tags: AAPL, Apple, AT&T, Dendreon, dndn, momentum options trading, option picks, options alerts, stock options trading, T
Posted in Apple, BioTech, Company Commentary | Comments Off
Friday, April 30th, 2010
12:55pm (EST)
The market looks tired today as all three indexes are trading at their lows for the day. The bulls have done well to battle back from Tuesday’s sell-off but the bears have made it known they want to play.
Earnings are a little light today and we had a big week with a quarter of the S&P 500 companies announcing this week alone. Next week will be heavy as well and we are hoping the bulls can gives us one last push into May.
We mentioned the economy is picking up steam but a slight drop in consumer sentiment is contributing to today’s selling pressure. The gross domestic product (GDP) rose at a 3.2% annual pace in the January-March period which was below the 3.4% rate Wall Street had forecast.
While the GDP was up for the third straight quarter, it was down from the fourth quarter’s 5.6% growth rate. This was inflated by government stimulus spending and companies restocking their depleted inventories so the drop wasn’t all that bad.
Goldman Sachs (GS, $144.70, down $15.54) is also dragging the Financials down which isn’t helping matters, after reports that federal prosecutors had opened an investigation into trading at Goldman, raising the possibility of criminal charges against them.
Shares are down more than 10% and we have been telling our subscribers a break below $150 would be nasty. On Tuesday, shares hit a low of $150.15 which was a clear sign that when $150 broke, all hell was going to break loose.
This is getting ugly for Goldman and the stock will continue to be volatile.
As we head to press, the Dow is off by 65 points to 11,101 while the S&P 500 is down 10 to 1,196. The Nasdaq is lower by 27 to 2,485.
We will be back over the weekend with Sunday’s Weekly Wrap and we continue to watch the gains Dendreon (DNDN, $57.39, up $7.21) is making our subscribers. Those who listened to us on Monday are now up 167%. Winner, winner, chicken dinner…
Subscribers, check the Members Area for the updates. We also have a NEW TRADE!
Tags: Dendreon, dndn, Goldman Sachs, option picks, option signals, options alerts, stock options trading
Posted in Earnings, Financial Stocks | Comments Off
Friday, April 30th, 2010
9:00am (EST)
We feel like Smokey and the Bandit this morning. We’ve got a long way to go and a short time to get there…
We have so much to cover and talk about today but we only have 30 minutes before the opening bell rings and we are excited!
We got a ton of great news yesterday, not only in the market, but in specific stocks that made explosive moves. Thursday’s rally had to be frustrating for the bears after throwing the kitchen sink at the bulls on Tuesday.
M&A (merger and acquisition) continues to be hot, earnings are scorching, and the economy is recovering faster than anyone could have imagined. The market is always looking forward and we have been telling you that the talking heads and analysts have been wrong in calling for a correction. However, we are getting close to our own targets (see Sunday’s Weekly Wrap) we have for the indexes but until we get there or this market breaks below support then we remain bullish.
Yes, we got a major pullback on Tuesday, but it was on news that the market might already be factoring in. The world knows Greece is in trouble but is getting rescued. Portugal, Spain and Ireland will survive as well.
The bulls used a little of all the above yesterday and pushed the Dow higher by 123 points, or 1.1%, as the index closed at 11,167. The Dow moved back above its 10-day moving average and is only about 40 points off from Monday’s 52-week closing high of 11,205.
The S&P 500 surged 15 points, or 1.3%, closing at 1,206 and 11 points away from its 2010 high of 1,217. Meanwhile, the Nasdaq zoomed 40 points, or 1.6%, to finish at 2,511.
Of course, the biggest news from yesterday was the Dendreon (DNDN, $50.18, up $10.56) story. Folks, the world has a cancer drug and this was HUGE news. The company’s drug, Provenge, was finally approved by the FDA and we have waited three years to hear the word “yes”.
Shares surged 25% yesterday but we think the stock has more room to run.
As we head to press, Dow futures are up 7 points to 11,142 while the S&P 500 futures are showing a half point pop and stand at 1,206. Nasdaq 100 futures are higher by 2 to 2,043.
Tags: Dendreon, dndn, Provenge
Posted in Company Commentary, Earnings | Comments Off
Tuesday, April 6th, 2010
1:00pm (EST)
The Dow has almost managed to make its way to breakeven and the bulls are just shy of pushing the index into positive territory. They have managed to bring the S&P 500 and the Nasdaq into the green but Wall Street seems slightly nervous ahead of this afternoon’s Fed minutes.
In about an hour, the Fed will release details from its March 16 meeting and analysts will be listening to what the big wigs said about their pledge to keep interest rates at low levels. We don’t expect a curveball and once we clear this hurdle then we could see some type of “relief” pop into the close.
As a result, the Dow is currently down by 10 points to 10,963 after touching a low of 10,927. The S&P is flat but showing a pulse at 1,187 while the Nasdaq is up a point to 2,430.
Oil continues its recent surge and is at 18-month highs. The black gold has jumped nearly 25% since February and is at $87/ barrel. Crude had traded in a tight range of $69-$84 for quite some time before breaking out last week.
Massey Energy (MEE, $49.30, down $5.49) is down 10% after one of its West Virginia coal mines exploded. Although America has some of the safest mining practices in the world, Massey is known for its safety violations and this is sad to see as the blast killed at least 25 miners. Rescue efforts are still ongoing.
CA (CA, $23.08, down $0.77), formerly known as Computer Associates, is taking a little hit today after announcing it will cut 1,000 jobs as part of a cost-cutting effort to trim the fat. The company also said it expects to incur a pre-tax restructuring charge of about $50 million and lowered its full-year guidance range.
There are pockets of good news out there…
Netflix (NFLX, $82.00, up $2.01) continues to rip-it-up on the iPad momentum and has hit another 52-week high today.
Dendreon (DNDN, $40.03, up $1.84) made us look good today by breaking $40. We have traded call options on this stock in the past and we recently listed a few plays on our Watch List. The premiums were a little high at the time for us to pull the trigger but looking back we should have.
We are still scanning the option pits and there may be an opportunity to trade this one although it will depend on where we think the stock is headed. We know shares are going to take out $50 but Dendreon will likely get a lot of takeover chatter once the FDA releases the hounds for the company’s drug, Provenge.
Tags: CA, Computer Associates, Dendreon, dndn, Massey Energy, MEE, NFLX, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Hot Stocks | Comments Off
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Market Action Choppy, Dendreon (DNDN) Slips
Monday, June 7th, 2010
1:10pm (EST)
The bulls tried to rally the market at the open but after a brief stay in positive territory the major indexes are mixed. The euro fell to a low of $1.188 before bouncing back to $1.192 which helped stabilize the overseas market but the trend is still bearish and isn’t going to change anytime soon.
We are watching the $1.180 level for the euro which is where the currency ended its first day of trading back in January 1999. The 10-year average for the euro against the dollar is $1.20 and we wouldn’t be surprised if $1.15 is taken out.
Biotech is making a lot of noise today with mixed results but we are watching shares of Dendreon (DNDN, $38.26, down $2.58) which are down 6% today. Investors seemed disappointed when the company’s CEO said they had no plans to partner with someone to produce Provenge faster. He said they have a few more plants coming on board to manufacture the drug and that they are the experts on Provenge with plenty of support to move the company forward.
Dendreon has spent nearly $1 billion over the past 15 years to bring Provenge to the market so they have a game plan in place. In fact, we can’t blame them for doing it their way and their pipeline could yield other cancer cures. If shares fall back to $32 then we would seriously think about actually buying the stock but there may also be a chance to buy some longer-term call options.
Apple (AAPL, $256.27, up $0.30) was trading lower but has turned around. The company is unveiling its 4G iPhone during its annual software developer’s conference in San Francisco today. There is a lot of chatter on what new features have been added and we are hearing a higher-resolution screen, improved battery life, a cooler camera and the ability to multitask.
AAPL 15-minute chart
The bad news from all of this is that AT&T (T, $24.58, up $0.41) has eliminated its unlimited monthly data plans for new users of the iPhone and iPad. If you haven’t been with AT&T then you will have to choose between two data plans with monthly usage limits and pay more for extra use. There has been talk that Apple will partner with other carriers so AT&T could be taking a big risk trying to squeeze out more revenue.
As we head to press, The Dow is trading higher by 20 points and is at 9,952 while the S&P 500 is up 2 to 1,067. The Nasdaq is showing a 7 point loss and was last seen at 2,211.
We have a lot to cover with our current trades and there are a few others on our Watch List that are making some nice moves today. Current subscribers, check the Members Area for the updates as we expect any rally to fade.
Tags: AAPL, Apple, AT&T, Dendreon, dndn, momentum options trading, option picks, options alerts, stock options trading, T
Posted in Apple, BioTech, Company Commentary | Comments Off