12:20pm (EST)
The market has traded in a tight range today as Wall Street winds down the books and looks ahead to a long 3-day weekend. The bulls are still holding on to Monday’s huge pop but the action has been choppy since as it seems traders are unwilling to make bets, long or short, until next week/
The Dow is 30 points to 12,499 while the S&P is up a point to 1,321. The Nasdaq is flat and is at 2,839.
We have learned that Facebook (FB, $31.93, down $1.10) will trade options starting next week and we will be looking at them for a possible trade. There will all kinds of exciting possibilities to play the call and puts but with Facebook at $30 there is a chance for a $10 move over the next month or two, depending on who you believe.
Some analysts were quick to pull the trigger BEFORE Facebook’s IPO came out and gave shares a “Buy” rating and a price target north of $40. Other analysts have reaffirmed $40+ targets this week while some have slapped “Sell” ratings on the stock. This morning, there was talk that shares are worth $13- and change while another brokerage firm issued a $9 price target.
Of course, like the IPO, Facebook’s options will trade at a premium and they will be overinflated so we may have to get really creative but there should be a trade based on the unknowns.
Before we roll today, we wanted to cover one more thing.
Last weekend, we ran a promotion that was a sweet deal. We offered our option trading course, How to Trade Options on Momentum Stocks, at no cost (an $895 value) for those of you that upgraded your current membership to a 1-year deal. The course also includes ongoing videos that show you chart work, how to find trades, how to play the market with the right index options when it is trending, and how to do the math on figuring out where a stock needs to be in order for the option to make you money.
Many of you have written all week to ask for the deal which ended last Sunday night.
We understand that many of you wanted to think about it but here is our pitch. Trading is for the long haul and over the past 5 years we have hit on 75% of our trades. We have a 5-year track record that shows all of our trades and each of them can be referenced from our Members Area.
The reason we keep dates and times for all of our trades is so you can go back to study them. You can read our comments and see our chart work on why we went long or short a stock by using call and put options. Although we have been hot for over 6 months, we can and will have a choppy month, or losing streaks. If you a subscriber and are just joining us for that month then obviously your opinion of us might be different from someone who has been with us for years – IF we have a lousy month which is rare.
Our goal is to always find you winning trades but some of the best emails we get are from subscribers who “found” their own trades and made 100% return or more. Our trading course and videos will show you how to do this.
So here is the deal once again and it will be available thru the holiday weekend. After May 28, 2012 we will not run this deal until the end of the year like we normally do. The reason we are doing it mid-year is because we have been saying this is one of the BEST years we have ever seen to trade options. Even if you don’t know how to trade options we will teach you.
Also, if you have purchased a 1-year membership this year, in 2012, and you haven’t received the trading course, email us and we will send one out at no charge (an $895 value).
For those of you on Monthly or Quarterly memberships, if you upgrade to a 1-year membership by this Monday night by midnight, we will include the course at no charge as well. Shipping is also on the house. By upgrading, you will also save money because a monthly membership on a 1-year deal averages out to just $77/ month.
We will also add any extra time from your current membership to the one-year deal. The videos, all current and past are available as soon as you sign-up and we like to do one every month or two depending on market conditions.
If you do the math, this is well over a 50% discount if purchased separately and we are currently sporting a 94-20 win/loss record for the year. We closed out 6 more winning trades this week including +90% on POT, +144% on KLAC, +113% on CSTR, and +119% on the QQQ’s.
You will not need a coupon to get the manual along with the one-year subscription, just upgrade or signup, and we will ship the course to your doorstep over the weekend. You will also have access to the videos, instantly.
Subscription Link
To read more on our trading course, How to Trade Options on Momentum Stocks, go here.
On that note, we have more to talk about in our members Area so let’s get to it to see if we have any last minute changes to make to our current trades.
We will be back Monday night with our Weekly Wrap and Tuesday morning with our Daily as the market is closed on Monday for the holiday. Until then, have a great weekend everyone and make sure you sign-up or upgrade to our 1-year deal by then. Also, tell your friends about us and sign up for our Twitter alerts!
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Zynga (ZNGA) Gets Zapped, Draghi Cries Wolf
Thursday, July 26th, 2012
1:10pm (EST)
The market got a huge bounce this morning after ECB (European Central Bank) President, Mario Draghi, vowed to do “whatever it takes” to preserve the euro which immediately sent expectations sky-high. We mentioned this morning the bulls are expecting Ben Bernanke to pull the trigger on some type of Quantitative Easing (QE) program here at home next week but some of the bloom has come off the rose as the market is off its highs.
Economic news has came in better-than-expected as jobless claims fell and Durable Goods Orders rose. Initial Claims fell 35,000 to 353,000 and represented the biggest one-week drop of the year. Expectations were for a decline of 10,000 to 378,000. Meanwhile, DG orders rose 1.6% in June versus estimates for a rise of 0.6%.
Zynga (ZNGA, $3.10, down $1.98) was down nearly 40% in extended trading last night and shares were just north of $3 after reporting earnings. Those losses have held up as shares have pushed a low of $2.97.
The company reported earnings of $0.01 a share on revenue of $332.5 million versus expectations for $0.06 a share on sales of $344 million. Zynga also lowered their outlook for the rest of the year, saying they expect earnings of $0.04-$0.09 a share compared to estimates for $0.27 a share.
This was a terrible miss for Zynga which saw its top games lose 20% of its users while delays in new launches were also a factor for the miss and lowered guidance. They also said the FaceBook (FB, $27.36, down $1.98) platform is becoming more “challenging” which is a real concern as users login less frequently. Shares of FaceBook were down over 7% to $27 in extended trading last night and those losses have also held.
The video game industry, in general, is suffering so the miss wasn’t really a surprise to us. FaceBook will be announcing their results after the close so it will be interesting to see what they have to say.
There is a chance Wall Street gives them a kitchen-pass since this will be their first report as a publicly traded company, but the bears might not. If FaceBook bombs on earnings and Zuckerburg remains quite or is a no show, we would expect a big pullback.
If by chance, FaceBook surprises everyone, shares could rebound but remember their post IPO lock-period is coming up which will release even more shares on the market. In other words, no matter how well the company may or may not do, earnings face more dilution once the millions of extra shares hit the market.
We expected some of this morning’s fluff to wear off just like Monday’s big push to support. The nearly 3-month trading range is coming to a head with bigger price swings and more volatility which is usually a good indicator of a new trend beginning.
As we head into the second half of trading, the Dow is up 168 points to 12,844 while the S&P 500 is higher by 17 points to 1,355. The Nasdaq is advancing 29 points to 2,882.
We have updated our current trades along with the Watch List as we see some low hanging fruit. We also have a special notice for those of you who can’t stand the volatility. Subscribers, check the Members Area for our latest comments and for the aggressive traders, take a look at some of the earnings plays for tomorrow on the Watch List.
Tags: ECB (European Central Bank) President, FB call options, FB options, FB put options, Mario Draghi, ZNGA earnings
Posted in Earnings, Economic News, Market Analysis, Market Commentary | Comments Off