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Monday, January 11th, 2010
1:00pm (EST)
The market started off on a strong note but has given back some of its gains as Wall Street awaits Alcoa’s (AA, $17.25, up $0.23) earnings report. The Dow is currently up 10 points to 10,628 while the S&P 500 is off by 3 points to 1,142. The Nasdaq is showing a decline of 13 points and is trading at 2,304 as we head to press.
The VIX is down 0.56 to 18.36, Oil is up fractionally at $82.75 and Gold is up $16 to $1,155 an ounce.
Alcoa will report earnings after the bell and Wall Street is looking for a profit of 6 cents a share on revenue of $4.8 billion. In the year ago quarter the company reported a loss of 28 cents a share on revenue of $5.7 billion.
The options pits are exploding with traders placing bets but we are staying on the sidelines with this one. The January 17.50 calls (AAAT, $0.53, up $0.25) are up 90% and have traded nearly 30,000 contracts while the January 17.50 puts (AAMT, $0.77, down $0.22) have dropped over 20%. This means the market is pricing in a 7%-8% move in the stock and a straddle trade would cost you $1.30 at current prices. No thanks, we’ll pass.
We have been busy updating our portfolio positions this morning and we were able to get into two NEW trades at the open. We are also CLOSING one trade for a slight profit to make room as we like the prospects a little better on our newer trades.
Current subscribers, please check the Members Area for the important updates.
Tags: Alcoa 4Q earnings report, Alcoa Earnings, alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Earnings, Gold, Market Analysis, Oil, VIX | Comments Off
Sunday, January 10th, 2010
11:00pm (EST)
The bulls won the first week of 2010 as they took the market higher despite a weak unemployment report on Friday. The Labor Department said employers slashed 85,000 jobs in December while Wall Street had forecast a slight decline of 8,000 job losses.
The one silver lining was the government revised November’s unemployment figures to a gain of 4,000 jobs, marking the first monthly increase in almost two years. Although the unemployment rate remained at 10% last month, the bulls managed to blow off the report and finish the week on a high note.
All three indexes posted gains for the day and for the week which could mean good news if you believe in market history. Usually if the Dow is up in the first week of January it leads to a good month and year so goes the theory.
The Dow added 11 points on Friday and 190 for the week to close at 10,618. Our near-term target remains 10,800 and this could be the week we take it down.
The S&P 500 gained 3 points to close at 1,145 and for the week the index added 30. In August, we set our target at 1,175 so we are within spitting distance…
As far as the Nasdaq, we clearly saw the strength in Tech back in the summer and set a year-end 2009 target of 2,275 for the index. That level was taken out before Christmas. On Friday, the Nasdaq displayed its muscle once again and had the biggest percentage gain as it added 17 points to close at 2,317.
We remain bullish and our portfolio has consisted of mainly call options since March 2009. We have added put options as “insurance” along the way but we still feel like the market moves higher from here. Of course, once our targets are hit that could all change but the beauty of getting a pulse on the market is that it allows you to change accordingly.
If and when we reach those aforementioned targets, we either, continue higher, stay flat, or retreat to lower levels. The cards to figuring out the next six months on where the market could be headed are being dealt right now. A lot of investors and traders will be ready to pay the ”big blind” this week as 4Q corporate earnings start to come in. We will go over this more on Monday morning.
There is one stock we wanted to cover again tonight before we sign-off…
We have mentioned OSI Systems (OSIS, $31.64, up $2.75) a lot lately and we should have already been in this trade to be honest. Sometimes there are trades that just stare you in the face and they have to slap you to get your attention.
Well, OSI is punching us in the gut and we are gasping for air.
The alleged failed boxer bomber has heated up the talk of faster deployment of full-body-imaging machines at airports around the world. Talk about blowing up the family jewels…Our thoughts from December 31st (quotes are from that day):
“OSI Systems (OSIS, $27.46, up $2.40) is up 10% as investors rushed into the stock starting on Monday. The company makes these “body scanners” that could be used in airports that would allow tighter, faster security and the machines are selling for $150,000 a pop. Needless to say, the market is enormous and some people think they should be in every airport in every city RIGHT NOW.
The shares have rallied following last weekend’s failed terrorism attack and last Thursday they closed at $22. On Monday morning they opened at $23.04 and hit a high of $24.97. Usually these types of trades fade but we underestimated this story and it cost us a sweet call option trade.
Yesterday, the OSIS January 25 calls (UOJAE, $2.95) easily doubled and were under $1 on Monday. OSIS and others have been put on our short-term Watch List. (END)
Folks, the January 25 calls are now at $6.60! The January 30 calls (UOJAF, $2.10, up $1.55) soared a whopping 280% on Friday after opening at 95 cents.
Despite reservations from Congress, privacy advocates and airlines we think this movement has legs and we will take a look at a possible option trade in this one on Monday morning before the bell. We will also have an update on all of our current trades which will be on the move this week.
As we head to press, Dow futures are showing strong gains as they are up 36 to 10,602. S&P 500 futures are up 5 to 1,146 while the Nasdaq futures are higher by 8. The first trading day of “January Expiration Week” is usually bullish, which is one reason we left most of our option trades open.
Also, we have been seeing higher closes on Friday’s followed by solid Monday’s which leads us to believe the bulls are fully committed to taking the market higher.
One important factor on if the market is at a top or continues higher will come on Friday. January options will expire and over the past decade this has been a terrible day for the market. If the bulls can lift this curse then we could be off to the races again.
Portfolio Update: Our 2010 portfolio track record is posted in our Members Area and had been updated as of Friday’s close. There are 3 closed trades with two of them showing triple-digit gains; A123 Systems (AONE, $21.51, down $0.65) is profiled showing our subscribers banked a 119% gain; a 90% profit in Imax (IMAX, $14.13, down $0.29); and a 150% return in Green Mountain Coffee Roasters (GMCR, $81.85, up $0.27).
We still have 6 open trades but some will be closed for double-digits gains while we roll new trades in. That is what we love most about the market…there is always a trade.
The 2010 portfolio is viewable in the Members Area at the bottom of the page. We will start releasing the closed trade results to the public at the end of the month and they will be updated as we close them out but we wanted to give you a sneak peak before then.
We will be busy all week and will be back in the morning with the playbook. If you are not yet a subscriber you can still catch all of the action before the opening bell if you signup now!
See you in the AM…
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Market Commentary, Option Trades, Stock Earnings, Strategies, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off
Friday, January 8th, 2010
1:15pm (EST)
All the talk today is about the “weak” unemployment numbers we got but our main focus is how the market is doing. Despite all the gloom-and-doom over the jobs report the Dow is only down 25 points to 10,582.
We thought there would be more “fireworks” but from our point of view, it still looks like the bulls are willing to push this market higher. The talking heads have been calling for a pullback for months but we have maintained our bullish stance since last March.
In August, 2009, we set targets of 10,800 for the Dow; 2,275 on the Nasdaq and 1,175 for the S&P 500. We are still short for our Dow and S&P 500 targets which leads us to believe the markets still has some bull left in it.
With earnings season kicking in gear next week, we either get there or fall back. Then again, we could stay flat but as they say, pressure bursts pipes, so we could get a monster rally if companies blow out Wall Street’s 4Q earnings forecast.
We will be spending all weekend looking for clues on where the market is headed but we are also excited about the possible trades that might be added to our portfolio. Folks, if you haven’t signed up for a subscription or UPGRADED then you have to make sure you are with us over the next few weeks.
Why are we so excited?
Next week is what is known as “Expiration Week” to option traders and it’s your opportunity to take some serious swings at a few homerun trades.
We release these type of expiration week trades every now and again and they can be very rewarding. In November, our subscribers banked over a 400% return on Priceline.com (PCLN, $218.10, up $1.97) as the stock zoomed from $173 to $204 after blasting Wall Street’s pencil pushers. That is the power of playing options during expiration week.
Naturally, the risk of playing these types of trades is great but if you do your homework these types of returns are there. Now, you can also lose 100% of your investment if you are wrong but if you make 400% you can have 3 losing trades of 100% and still double your money. Pretty powerful, huh?
It works like this. If you invested a $1,000 and it returns 400% then you account is at $5,000. If you do three more trades at $1,000 and they all lose 100% you would be left with $2,000. Folks, that is still a 100% return although your track record was 1 for 4 in picking trades. For 2009, our winning percentage was 75% on all of our trades…
On Monday, Alcoa (AA, $16.90, up $0.29) kicks off the parade followed by KB Home (KBH, $15.80, flat) on Tuesday, Intel (INTC, $20.62, up $0.02) and Charles Schwab (SCHW, $19.02, down $0.27) on Thursday and JPMorgan (JPM, $44.44, down $0.35) on Friday.
We know you love the action of options trading or else you wouldn’t be reading this but you’re missing out on the real money making part of options if you are not a Member. This is a great time to be joining us as we feel it is a perfect trading environment now AND in the months ahead.
We expect to be using a mixture of calls and puts and we will be sending you quite a few new trades over the next few weeks along with follow-up updates to lock in your winners.
Before we go, we wanted to note that OSI Systems (OSIS, $32.00, up $3.10) continues to go higher and has set another 52-week high today. The stock opened at $30.15 and has been in a strong uptrend all day.
U.S. Steel (X, $64.68, up $3.77) is jumping again today and we profiled a “free” option outside the Members Area for those of you thinking outside-the-box. The January 55 calls (XAK, $10.00, up $3.85) are up 60% today and we mentioned how Goldman Sachs (GS, $175.52, down $2.15) knocked us out the trade when they were at $2. Wow…
We are excited about the market for 2010 and we hope you take the weekend to consider a subscription with us. We have a lot of exciting things happening and we are rapidly approaching our membership limit. Our trading manual is due out next month and we are bursting at the seams with the opportunity to teach you how to find these exciting trades as well.
We will be back Sunday night with the Weekly Wrap and a fresh outlook for next week. There’s a chance of a strong market reversal next week but if there isn’t, we will be locked and loaded either way. Current subscribers, check the Members Area for the trade updates.
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option price, option selling, option trade, option trade picks, option trading online, options, options blog, options expiration, options mentoring, options newsletters, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Earnings, Economic News, Financial Stocks, Market Analysis, Market Commentary, Strategies, Trading Psychology, Trading Tips | Comments Off
Friday, January 8th, 2010
9:10am (EST)
We often talk about Abercrombie & Fitch (ANF, $32.67, down $3.54) and Apollo Group (APOL, $63.94, up $0.24) in a negative light when we report the news on these two companies and there is a reason why. We don’t trust them.
As an option trader, you will learn there are quite a few stocks that you will love and hate and often times when you trade them it’s either call or put options. If you follow a company for a couple of years you will learn its price movements and trading ranges which allows you to make better trades.
Abercrombie dropped 10% yesterday when most Retail stocks rose after reporting upbeat sales for December. No, not Abercrombie.
We have talked about how stubborn the company is in slashing prices which has cost them business in a tough economic environment. The teen retail space is always a struggle but Abercrombie also has questionable business practices and lawsuits out the wazoo.
These two factors alone were the main reasons why we didn’t go long or buy call options in Abercrombie last year. The company reported that December sales dropped a whopping 19% versus Wall Street’s expectations for a dip of 12%.
Instead, in 2009 we profiled put options when the stock reached certain resistance levels and our subscribers banked profits of 25% and 120%, respectively.
Apollo actually made a slight gain yesterday and reported their earnings after the bell last night. Although they painted a pretty picture for Wall Street, the stock was down $3.20, to $60.74, in after-hours trading last night.
The company reported earnings that beat estimates by a penny but once again, the way they run their accounting department has raised some concerns. We made 4 trade recommendations on Apollo last year, all put options, and the returns were 100%, -15%, 50%, and -17%. Apollo is a volatile stock and we cut our losses once we saw a pattern reversal. Overall, our record was 2-for-4 for Apollo but very, very profitable.
The bottom line with these two stocks is that we never trusted them to go long in 2009 and we still don’t trust them now. We missed some double digit returns with Abercrombie yesterday but there may be a day trade in Apollo…
As we head to press, the jobs report was not that good and it is weighing on the market. Dow futures are lower by 18, S&P 500 futures are off by 3 while the Nasdaq futures are down 7 points. Current subscribers, check the Members Area for the trade updates.
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option price, option selling, option trade, option trade picks, option trading online, options, options blog, options expiration, options mentoring, options newsletters, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Earnings, Economic News, Market Commentary | Comments Off
Thursday, January 7th, 2010
1:00pm (EST)
And your hands upon the wheel…we’re going to the roadhouse and we’re going to have a real..good time…
Folks, the market will get its first big test tomorrow when the unemployment news hits the wire. The Dow is currently up 4 points 10,577 and the S&P 500 is up a half-point to 1,137. The Nasdaq is off by 9 points and is at 2,292.
We have mentioned how tight of a range the market has been in but that should loosen up on Friday and starting next week. There is no clear signal as we way the market is headed so we have built our portfolio with calls and puts. Some of our call options are longer-term because we are lacking direction and the put trade is a guard against a downturn from here.
Next week 4Q earnings report will start to hit Wall Street and all eyes will be on Alcoa (AA, $16.48, down $0.48) which reports earnings on Monday. Next week is also option expiration week and there is a boatload of action in the January option pits.
Alcoa just set a 52-week high of $17.06 yesterday and got slapped with a downgrade this morning. Option expiration week offers the opportunity to make upwards of 300% on the right call or put options so we are keeping Alcoa and others on our Watch List.
As we roll out of some profitable trades and into news ones, we still have to be careful with market direction so some trades could get caught in the mix. Overall, we know the stories that will drive these stocks higher or lower and we can’t wait until earnings roll in.
We still think there are some safe pockets in the market and we look at another new trade today in our Members Area. We think the stock could jump 50% by summertime and possibly double by year-end. If you are not yet a subscriber, we think you owe it to yourself to check out the story.
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option price, option selling, option trade, option trade picks, option trading online, options, options blog, options expiration, options mentoring, options newsletters, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off
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In Like Flynn
Monday, January 11th, 2010
1:00pm (EST)
The market started off on a strong note but has given back some of its gains as Wall Street awaits Alcoa’s (AA, $17.25, up $0.23) earnings report. The Dow is currently up 10 points to 10,628 while the S&P 500 is off by 3 points to 1,142. The Nasdaq is showing a decline of 13 points and is trading at 2,304 as we head to press.
The VIX is down 0.56 to 18.36, Oil is up fractionally at $82.75 and Gold is up $16 to $1,155 an ounce.
Alcoa will report earnings after the bell and Wall Street is looking for a profit of 6 cents a share on revenue of $4.8 billion. In the year ago quarter the company reported a loss of 28 cents a share on revenue of $5.7 billion.
The options pits are exploding with traders placing bets but we are staying on the sidelines with this one. The January 17.50 calls (AAAT, $0.53, up $0.25) are up 90% and have traded nearly 30,000 contracts while the January 17.50 puts (AAMT, $0.77, down $0.22) have dropped over 20%. This means the market is pricing in a 7%-8% move in the stock and a straddle trade would cost you $1.30 at current prices. No thanks, we’ll pass.
We have been busy updating our portfolio positions this morning and we were able to get into two NEW trades at the open. We are also CLOSING one trade for a slight profit to make room as we like the prospects a little better on our newer trades.
Current subscribers, please check the Members Area for the important updates.
Tags: Alcoa 4Q earnings report, Alcoa Earnings, alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, chicken option trades, Covered Calls, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Company Commentary, Earnings, Gold, Market Analysis, Oil, VIX | Comments Off