|
|
|
|
|
 |
|
|
 |
Friday, April 20th, 2012
9:00am (EST)
The bears took another step closer to getting back to even for the week following Thursday’s big win.
We mentioned the sun was shining over the bulls at the crack of dawn but things quickly reversed course after worse-than-expected economic news hit the Street. We know the talking heads get paid to pump up the market but they seemed stunned when they heard yesterday’s jobless claims numbers. There were a number of colorful commentators saying the numbers “just aren’t strong enough”. Duh.
The Dow fell 68 points, or 0.5%, to settle at 12,964. The blue-chips fell through the 13,000 level shortly after the open and were down 136 points at one point to 12,896. The index rebounded into the close to avoid a triple-digit loss but will need to close above 13,000 to keep the momentum going into next week.
The S&P dipped 8 points, or 0.6%, to end at 1,376. The index traded up to 1,390 in the AM but dipped below 1,375 during our midday update. The low came in at 1,370 and a close below the two aforementioned levels ahead of the weekend would be bearish.
The Nasdaq got punished for 24 points, or 0.8%, to finish at 3,007. Tech traded to a high of 3,058 but gave way to the 3,000 level shortly after our briefing. The next wave of support comes in at 2,975 but a break below this level gets 2,850 back in play. Tech will continue to lead the market higher or lower but it doesn’t seem to have the strength to take us to new highs with Tech heavyweights coming in with mixed results.
Over the past 15 years, the blue-chips have finished in positive territory 12 times on April Expiration Day. This means there is an 80% chance of the market finishing higher today but it is only one piece of the puzzle.
The Dow could rebound following Microsoft’s (MSFT, $31.03, down $0.13) earnings which came in above estimates after the close last night. The company reported a profit of 2 pennies ahead of estimates (60 cents a share versus expectations for 58 cents) and revenue also beat ($17.4 billion vs. $17.2 billion).
There are no major economic reports scheduled for today and futures are showing a strong positive open as we head into the last trading day of the week. Dow futures are up 69 points to 12,971 while the S&P futures are higher by 6 points to 1,378. Nasdaq 100 futures are gaining 10 points to 2,363.
Subscribers, check the Members Area for the updates.
Tags: Dow, MSFT, S&P 500 MSFT earnings
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Thursday, March 1st, 2012
12:55pm (EST)
The bulls are working on recovering Wednesday’s losses and got off to a great start this morning. Once again, better-than-expected economic news played a role in the pop at the open but a couple reports came in worse-than-anticipated which cut the gains in half.
The good news is the jobs market continues to “improve” as Initial Claims fell to 351,000 versus expectations for 355,000. Continuing Claims came in at 3.4 million which was just below a forecast for 3.41million. Personal Income for January was up 0.3% versus expectations for an increase of 0.5%. Personal Spending was up 0.2% which was slightly below the expected increase of 0.4%.
Elsewhere, Construction Spending fell 0.1% in January which was a surprise as the suit-and-ties were looking for an increase of 1.0%. The one that hurt the bulls was the ISM Manufacturing Index which came in at 52.4, which was below Wall Street’s forecast for a print of 54.5. Still, anything over 50 is a positive so things weren’t all that bad.
Bernanke is speaking today but he hasn’t spooked the market like he did yesterday.
The push higher is a good sign and some of it can be attributed to fund managers putting money to work. Yesterday’s pullback scared a lot of pros out of the market as many of them took their 15 minutes of fame and said the market pulls back.
We have seen dozens and dozens of these knuckleheads come on the tube across the various business channels since January and all of them have been wrong. Sure, at some point we will get a pullback but nobody can time it perfect. We are on the other side of the fence and have our fingers crossed for one last blow-off the roof type rally as the market’s gains for the year have come slow-and-steady.
One sweet 2% pop higher would be beautiful before St. Patty’s day but we are taking profits as they come as we position for the market’s next move.
We have more good news for another one of our current call option trades which is up over 90% in just 2 weeks. We are going to take some profits in this trade as well today and we have a NEW TRADE we are releasing right now so let’s go see if we can get filled!
As we head to press, the Dow is up 49 points to 13,001 while the S&P 500 is advancing 9 points to 1,375. The Nasdaq is higher by 24 points to 2,991. Subscribers, check the Members Area for the updates.
Tags: Covered Calls, Dow, ISM, S&P 500 quotes
Posted in Economic News, Market Commentary, Strategies, Trade Update | Comments Off
Wednesday, February 22nd, 2012
9:00am (EST)
The bulls held court for much of Tuesday’s session but an early morning dip and late day pullback kept the advance in check as the bears try to hold down resistance. After 4 years of waiting though, the party was subdued as investors seemed hesitant on just how good (or bad) the Greece bailout really is.
The Dow finally triggered 13,000 but it took nearly two hours into the session before the blue-chips finally hit our fluff target we said would happen once 12,800 was cleared back in January. The index advanced 16 points, or 0.1%, to finish at 12,965 after kissing a high of 13,004. It was the first time since May 2008 the Dow had traded 13K. The low came in at 12,926.
The S&P 500 added a point to close at 1,362 after trading up to 1,368. The index is still just inches away from our 1,375 fluff target which needs to be cleared for a continued rally into March. The low for the day was 1,358 and the bulls will need to hold 1,350 on any bear attack this week.
The Nasdaq got off to a decent start and hit fresh 52-week highs by Wall Street’s lunch break but struggled into the close. Tech peaked at 2,965 and is less than 1% away from hitting our 3,000 target we gave back in November but gave back 3 points to settle at 2,948. The low was 2,934 as the bears are trying to get the action back below 2,900.
There has been a lot of talk of rising oil prices which also weighed on the market yesterday as the suit-and-ties have gone on record and predicted $5 a gallon gas this summer. We will be shocked if this happens because it really would dampen any economic recovery but if it does we only have our government to blame.
The media can spin higher oil prices any way it wants but it all comes down to dependence. America has so many incredible ideas to switch to natural gas and there is enough supply to last us 100 years but for some reason these projects take years to get going thanks to the red tape. We have covered some of these companies in our Weekly Wrap and we still love Clean Energy Fuels (CLNE, $17.23, up $0.18) which is at 52-week highs.
We recommended the stock at $11.23 back in November and suggested selling a January 14 call option for 45 cents which lowered our cost basis to $11.02. Shares were at $14.03 on January 20, 2012 which means they were “called away’ at $14. The traded netted our subscribers 27% but we were rooting for a close below $14 that day so that we could have held onto the stock. At current prices we would have stretched that gain to over 50% by now.
We were hoping for a pullback to reestablish a position but shares have continued to move higher after touching a low of $13.77 that following Monday after we were called out at $14 on the previous Friday. That is how close we where.
Given the momentum, it is possible shares could reach $25 by summertime. We cover more on the options for Clean Energy Fuels as we show you a way to make a 670% return if we are right. That’s right, a nearly 700% return on a 40% move in a stock. This is the power of options, folks.
As we head to press, futures are pointing towards a slightly lower open. Dow futures are down 8 points to 12,937 while the S&P 500 futures are lower by 2 points to 1,359. Nasdaq 100 futures are off 2 points to 2,588. Subscribers, check the Members Area for the updates.
Tags: CLNE, Dow, futures, oil stocks, S&P 500 quote
Posted in Hot Stocks, Market Analysis, Market Commentary | Comments Off
Friday, February 17th, 2012
9:00am (EST)
The bears tested near-term support on Wednesday but the bulls came right back on Thursday to push near-term resistance and then some following a 1+% pop across the board for the major indexes.
We mentioned yesterday’s slew of good economic reports and Greece was an afterthought for a session. Moody’s (MCO, $38.45, up $0.21) tried to ruin the bulls party before it even started after saying they might downgrade their ratings on the Big Banks by 2 or 3 notches, including JP Morgan Chase (JPM, $38.00, up $0.60), Morgan Stanley (MS, $19.19, up $0.23) and Bank of America (BAC, $8.09, up $0.31).
Once again, Moody’s was right on cue, huh?
The Dow advanced 123 points, or 1%, to finish at 12,904. The blue-chips fell just short of their 52-week high of 12,924 set last week after trading to 12,914 intraday. The index is now less than triple-digits from our Dow 13,000 fluff target. Double-top or breakout?
From our November 13th, 2011 Weekly Wrap:
“The blue-chips traded to a high of 12,179 before reclaiming the 12,000 level and its 200-day moving average. We mentioned all week the 11,800 (blue line, black circles) level would be crucial in holding with 11,600 providing backup. After testing and holding this area on Wednesday, we told you to stay long and strong. We didn’t think the Dow would clear 12,200 (orange line, green circles) on Friday given the resistance but if it is taken out on the close this week, look for a test up to 12,600-12,800 (black line, purple circles) over the next month or so.” (END)
The S&P added 15 points, or 1.1%, to settle at 1,358. We have been talking about the importance of a close above 1,350 which has been our near-term target since November and said 1,375 would come into play if the index could close above this level for a few days. We got that on Friday and Monday and convincingly yesterday.
From our November 13th, 2011 Weekly Wrap:
“We said coming into the week there could be a test down to 1,225 and on Wednesday the low was 1,226. The trend would change on a break below the 1,200 (green line, black circles) level but we expect a run past 1,275 (blue line, orange circles) and a hold of the 200-day MA this week. If cleared and the bulls can hold, then the momentum could carry the S&P up to 1,300-1,350 (purple line, black circles).” (END)
The Nasdaq soared 44 points, or 1.5%, to end at 2,959. Tech traded up to 2,961 and is a little over 1% from reaching our fluff target of 3,000. The bulls have done a tremendous job over the last 3 weeks holding 2,800-2,850 once we cleared this level and the 15-year chart we showed you back in January has been money.
From our November 13th, 2011 Weekly Wrap:
“Tech traded down to 2,601 on Thursday but was able to hold the 2,600 level (green line, orange circles). There is further risk down to 2,550 if this level is back tested but the bulls will try to push 2,700-2,750 (purple line, black circles) again this week. The one stock that needs to participate in the Nasdaq’s rally to 2,900 (blue line, brown circle) will be Apple (AAPL, $384.62, down $0.60) but that’s another story.” (END)
We gave our fluff targets in December which we covered the other day and our longer-term view of the market for 2012 a couple of weeks ago. And yes, Apple was at $385 before Thanksgiving.
We keep reminders of what we say all the time on our office whiteboard which is filled with trading notes and cool colors to remind ourselves of our trading plan. Sometimes we can be wrong but we told you in September if the market could break out of its 2-month trading range, the run to the top could be jaw-dropping.
The bulls have the lead for the week as the Dow is up 103 points while the S&P 500 is showing a gain of 15 points. The Nasdaq is higher by 56 points.
Futures are up as we head to press. Subscribers, check the Members Area for the hot updates.
Tags: AAPL, Apple stock quote, Dow
Posted in Market Analysis, Market Commentary | Comments Off
Thursday, February 16th, 2012
12:30pm (EST)
The bulls are back on track following yesterday’s pullback on better-than-expected economic news which has pushed the major indexes back towards near-term resistance. Jobless claims continue to tick lower as Initial Claims came in at 348,000 versus expectations for a print of 365,000. Continuing Claims were 3.42 million versus estimates for 3.49 million.
The Producer Price Index (PPI) for January didn’t live up to the hype after posting a 0.1% pop versus forecasts for an increase of 0.4%. However, the core PPI reading, which backs out food and energy, was up 0.4% versus calls for an increase of 0.2%.
Housing numbers were also impressive as Housing Starts were well above forecasts for 675,000 as they came in at 699,000. Building Permits were below par and came in at 676,000 versus expectations for an increase to 680,000. And finally, the Philly Fed index rose to 10.5 from 7.3 in January.
As a result the bulls have held their opening gains as they look to extend the rally in the second half of trading and into the close.
The Dow is currently higher by 107 points to 12,888 while the S&P is up 11 points to 1,354. The Nasdaq is showing a 26 point pop and is at 2,941. Subscribers, check the Members Area for the updates.
Tags: Dow, initial jobless claims, Nasdaq, PPI
Posted in Economic News | Comments Off
|
|
|  | | | |
Get RSS Feed
April Option Expiration Day Normally Bullish
Friday, April 20th, 2012
9:00am (EST)
The bears took another step closer to getting back to even for the week following Thursday’s big win.
We mentioned the sun was shining over the bulls at the crack of dawn but things quickly reversed course after worse-than-expected economic news hit the Street. We know the talking heads get paid to pump up the market but they seemed stunned when they heard yesterday’s jobless claims numbers. There were a number of colorful commentators saying the numbers “just aren’t strong enough”. Duh.
The Dow fell 68 points, or 0.5%, to settle at 12,964. The blue-chips fell through the 13,000 level shortly after the open and were down 136 points at one point to 12,896. The index rebounded into the close to avoid a triple-digit loss but will need to close above 13,000 to keep the momentum going into next week.
The S&P dipped 8 points, or 0.6%, to end at 1,376. The index traded up to 1,390 in the AM but dipped below 1,375 during our midday update. The low came in at 1,370 and a close below the two aforementioned levels ahead of the weekend would be bearish.
The Nasdaq got punished for 24 points, or 0.8%, to finish at 3,007. Tech traded to a high of 3,058 but gave way to the 3,000 level shortly after our briefing. The next wave of support comes in at 2,975 but a break below this level gets 2,850 back in play. Tech will continue to lead the market higher or lower but it doesn’t seem to have the strength to take us to new highs with Tech heavyweights coming in with mixed results.
Over the past 15 years, the blue-chips have finished in positive territory 12 times on April Expiration Day. This means there is an 80% chance of the market finishing higher today but it is only one piece of the puzzle.
The Dow could rebound following Microsoft’s (MSFT, $31.03, down $0.13) earnings which came in above estimates after the close last night. The company reported a profit of 2 pennies ahead of estimates (60 cents a share versus expectations for 58 cents) and revenue also beat ($17.4 billion vs. $17.2 billion).
There are no major economic reports scheduled for today and futures are showing a strong positive open as we head into the last trading day of the week. Dow futures are up 69 points to 12,971 while the S&P futures are higher by 6 points to 1,378. Nasdaq 100 futures are gaining 10 points to 2,363.
Subscribers, check the Members Area for the updates.
Tags: Dow, MSFT, S&P 500 MSFT earnings
Posted in Earnings, Market Analysis, Market Commentary | Comments Off