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Tuesday, December 29th, 2009
8:50am (EST)
Futures are pointing towards another strong open this morning as the bulls try to make it seven in-a-row. Dow futures are currently up 26 points, Nasdaq 100 futures are higher by 4.5 while the S&P 500 futures are up 3.3.
In pre-market trading, shares of A123 Systems (AONE, $20.87, down $0.20) are at $21.50 and could be active today.
Microsoft (MSFT, $31.17, up $0.17) got an upgrade this morning and is also getting some action. We knew once shares broke $30 and held that a move to $35 could be in the works.
Fannie Mae (FNM, $1.27, up $0.22) and Freddie Mac (FRE, $1.60, up $0.24) got a lift yesterday after remarks that the Treasury could lift limits on financial aid to the companies. It’s hard to get excited in stocks that are at a buck and there is a reason why these two stocks are so cheap…stay away!
We have updated all of our trades this morning and have provided fresh updates. We would love to hang out but the action is in the Members Area, folks. Current subscribers, check for the updates…
Tags: A123 Systems, alternative investments, asset management, blog Wall Street, buying call options, buying put options, Fannie Mae, financial, financial investment, Freddie Mac, 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, Microsoft, 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, options, options expiration, options trade, options trading, options trading strategies, private equity, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strategies options, the Wall Street, trading, trading option, trading options, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management
Posted in Hot Stocks | Comments Off
Tuesday, August 25th, 2009
1:00pm (EST)
The market has hit 10-month highs as the Dow is currently up 80 points to 9,589. The Nasdaq is showing a gain of 15 points and stands at 2,033 while the S&P 500 has jumped 8 and is 1,034.
I mentioned in the Weekly Wrap that economic news would take on more meaning this week as earnings wound down and today’s rally can be attributed to the consumer confidence data and the housing figures. Home prices rose for the 2nd consecutive month and when you throw in the Bernanke bonus it’s easy to see why the bulls have taken this market higher.
Homebuilding stocks (add to you Watch List) are getting a pop as Pulte Homes (PHM, $13.12, up $0.51), Lennar (LEN, $15.27, up $0.70) and KB Home (KBH, $18.15, up $0.65) are up 4%-5%. Lennar was a huge winner on the short side a few years ago. Here were my thoughts two years ago:
Lennar on 07/10/07:
“With the housing market showing no signs of recovery any time soon it may be time to take a look at some of the stocks in the sector that could be headed lower. While we may have arrived to the party late, I certainly don’t think the party’s over as the whole group could see continued new lows. Although it’s hard to predict where the bottom is for some of these stocks, I believe they could still see another 15% to 20% drop. As such, if my forecast is right, Lennar ($34.86, down $1.45) could be headed below $30.”
A note on Watch Lists. This is how you find trades and this is how you keep track of sectors. We have had a lot of new subscribers this week and I often talk about keeping Watch Lists as a way to keep track of sectors and possible trades. Look, when one sector gets hot, another gets cold. Money moves in, money moves out. It’s an endless game we play and we can go long or short. That is the beauty of it all, folks. It makes what we do the coolest job in the world.
Speaking of which, have you seen the action in Fannie Mae (FNM, $1.88, up $0.18) and Freddie Mac (FRE, $2.14, up $0.09)? Up 20%-30% yesterday on huge volume. These two stocks were also a favorite punching bag of mine on the way down. In fact, if you research this blog from July 2007 you will see where I profiled trades that returned 140%, 150% and even 216%.
I wanted to point some of these things out because the trading manual I have been working on is nearly complete. We are also entering a “trader’s market” and I am almost 100% certain the volatility is going to pick-up even more so. You have seen us take quick gains and it is okay to take a 100% return on half your profits and close the rest when they hit their stops.
You have to remember…there is always a trade and we are all about making money. However, a lot of beginning investors will lose their profits because they don’t have a feel for the market or they think a losing position will come back. On the flip side of that, some investors get a 100% return only to have visions of making 200% or 500% in a week. In the meantime, they start to lose that 100% profit and end up taking a loss on the trade. I’ve seen it time and time again. So watch your stops and take profits a little early if you see something you don’t like.
Rick@MomentumOptionsTrading.com
Tags: Fannie Mae, FNM, FRE, Freddie Mac, KB Home, KBH, LEN, Lennar, options trading strategies, PHM, Pulte Homes
Posted in Company Commentary, Economic News, Sectors, Strategies, Trading Tips, Watch Lists | No Comments »
Wednesday, September 10th, 2008
The Dow pretty much gave back all of its 290 point gain on Monday with yesterday’s 280 point drubbing. The market was nervous after it was reported that Lehman Brothers (LEH, $7.79, down $6.36) had failed to attract a buyer for some or all of its assets and it only got worse with the sell-off in Energy stocks. The Dow made it into positive territory shortly after the open but was back in the red within the first hour of trading. The decline picked-up pace in the final hour and when it was all said and done, all three major indexes lost well over 2%.
The Dow finished Tuesday’s session at 11,230. The Nasdaq fell 60 points, or 2.6%, and ended at 2,209. The S&P 500 took a 3.4% pounding, dropping 43 points to close at 1,224. I said Monday morning before the market opened and the futures were up big-time that although we were headed for a huge rally, it appears traders are selling into them. That was confirmed once again yesterday.
Another point is that we all know triple-digit gains are pretty much the norm these days but have you noticed that we are now getting 200 and 300-point up and down days on the Dow. It’s almost gone unnoticed by the general public because everyone seems to be scared of the market or is not interested.
The fact that the market rallied on the Fannie Mae (FNM, $0.99, up $0.26) and Freddie Mac (FRE, $0.88, unchanged) bailout was our rally but it doesn’t set a good example. Without getting long in the tooth, who’s next? Will it be Lehman? Or will it be Ford Motor (F, $4.40, down $0.15) or General Motors (GM, $10.76, down $0.07)? I could care less about Lehman but why not grab the bull by the horns and give Ford and GM the incentive or cash to bring hybrid cars to the market quicker? The point is “the market can remain irrational longer than you can remain rational.”
Keep this in mind and don’t get too comfortable with any trades. The market could be setting up for an explosion to the upside or an implosion to the downside. Don’t forget we are historically in a lousy couple of months for the market (September and October) and something has to give. The VIX (VIX, 25.47, up 2.83) is heading towards 30 which could be when the bulls make their stand (or their last stand). I’ll talk more about the VIX over the next few days.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Fannie Mae, Ford Motor, Freddie Mac, General Motors, Lehman Brothers, VIX
Posted in Market Analysis | No Comments »
Tuesday, September 9th, 2008
Fannie Mae (FNM, $0.73, down $6.31) and Freddie Mac (FRE, $0.88, down $4.22) did their best Enron imitation on Monday as both stocks plunged to under a dollar. Sure, the government bailout was huge for the market but check out the true winners from yesterday. The Fannie Mae September 2.50 puts (NJWUB, $1.80, up $1.75) were going for a nickle on Friday and they were up a mind-boggling 3,500%. The Freddie Mac September 3 puts (FREUF, $2.20, up $2.05) were up 1,367%. Crazy.
Now that I have you back on Earth, in other news…Citigroup (C, $20.32, up $1.25) and Wachovia (WB, $18.99, up $2.24) both had a pretty decent day. The Citigroup January 20 calls (CAD, $2.57, up $0.47) hit a high of $3.00 which gave many of you a double on the other half of the open trade. These calls were profiled at $1.37 and we got a 50% return on the first half of our position and now a 100% return. The baby should have been put to bed yesterday as this option trade is now closed.
The Wachovia January 15 calls (WBAC, $6.00) also doubled from our entry price of $3.00. We closed half at $3.80 on 8/29 and the other half should have also been closed yesterday. The calls traded as high as $6.50 and I hated to close this one out. For the 2,347th time, Wachovia is my dark horse to get bought out. Let’s watch the January 20 calls (WBAD, $3.00, up $1.00) and see if they can come back to $2.
Research in Motion (RIMM, $102.67, down $4.28) had a little bounce after yesterday’s afternoon blog, gaining about $2 but still finishing lower for the day. We did the 2-for-1 special, buying two October 120 calls (RULJD, $3.65, down $0.95) for every one October 80 put (RFYVP, $2.07, up $0.87). The calls were at $3.22 so we gained 40 cents. The puts also traded higher from our entry price of $1.82 as the premiums got some extra juice due to volatility.
We are targeting $5.50-$6.00 for the calls and the puts we will have to play it by ear. We don’t want to sell them too early in case RIMM breaks down from here. Keep checking back throughout the day for more updates.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Citigroup, Fannie Mae, Freddie Mac, strangle option trade
Posted in Company Commentary | No Comments »
Friday, August 29th, 2008
The market has just opened and the financial stocks look like they will be trading lower. I’ve been mentioning four trades that we have going and how they should be closed today. If you still believe these stocks may go higher then you could sell half of your positions and hold onto the rest.
The four trades we looked at involved Citigroup (C, $18.86, down $0.22), Wachovia (WB, $15.67, down $0.32), Fannie Mae (FNM, $7.38, down $0.57) and Freddie Mac (FRE, $4.82, down $0.46)
The Citigroup January 20 calls (CAD, $1.95, down $0.10) were at $1.37 and had posted gains of 50% before this morning’s slight decline. The Wachovia January 15 calls (WBAC, $3.80, down $0.20) were recommended at $3.00 and should do well as Wachovia remains a buyout candidate.
The Fannie May January 5 calls (NJWAA, $4.00, down $0.10) were profiled at $2.40 and are have posted gains of 70%+. The Freddie Mac January 5 calls (FREAA, $1.85, down $0.15) were profiled at $1.20 and are showing a 50% gain.
Again, I’d close half of each position ahead of the holiday weekend. The market is closed on Monday so I’ll be back Tuesday with some fresh ideas.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Citigroup, Fannie Mae, Freddie Mac, Wachovia
Posted in Company Commentary, Hot Stocks | No Comments »
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Tuesday’s Tidbits
Tuesday, August 25th, 2009
1:00pm (EST)
The market has hit 10-month highs as the Dow is currently up 80 points to 9,589. The Nasdaq is showing a gain of 15 points and stands at 2,033 while the S&P 500 has jumped 8 and is 1,034.
I mentioned in the Weekly Wrap that economic news would take on more meaning this week as earnings wound down and today’s rally can be attributed to the consumer confidence data and the housing figures. Home prices rose for the 2nd consecutive month and when you throw in the Bernanke bonus it’s easy to see why the bulls have taken this market higher.
Homebuilding stocks (add to you Watch List) are getting a pop as Pulte Homes (PHM, $13.12, up $0.51), Lennar (LEN, $15.27, up $0.70) and KB Home (KBH, $18.15, up $0.65) are up 4%-5%. Lennar was a huge winner on the short side a few years ago. Here were my thoughts two years ago:
Lennar on 07/10/07:
“With the housing market showing no signs of recovery any time soon it may be time to take a look at some of the stocks in the sector that could be headed lower. While we may have arrived to the party late, I certainly don’t think the party’s over as the whole group could see continued new lows. Although it’s hard to predict where the bottom is for some of these stocks, I believe they could still see another 15% to 20% drop. As such, if my forecast is right, Lennar ($34.86, down $1.45) could be headed below $30.”
A note on Watch Lists. This is how you find trades and this is how you keep track of sectors. We have had a lot of new subscribers this week and I often talk about keeping Watch Lists as a way to keep track of sectors and possible trades. Look, when one sector gets hot, another gets cold. Money moves in, money moves out. It’s an endless game we play and we can go long or short. That is the beauty of it all, folks. It makes what we do the coolest job in the world.
Speaking of which, have you seen the action in Fannie Mae (FNM, $1.88, up $0.18) and Freddie Mac (FRE, $2.14, up $0.09)? Up 20%-30% yesterday on huge volume. These two stocks were also a favorite punching bag of mine on the way down. In fact, if you research this blog from July 2007 you will see where I profiled trades that returned 140%, 150% and even 216%.
I wanted to point some of these things out because the trading manual I have been working on is nearly complete. We are also entering a “trader’s market” and I am almost 100% certain the volatility is going to pick-up even more so. You have seen us take quick gains and it is okay to take a 100% return on half your profits and close the rest when they hit their stops.
You have to remember…there is always a trade and we are all about making money. However, a lot of beginning investors will lose their profits because they don’t have a feel for the market or they think a losing position will come back. On the flip side of that, some investors get a 100% return only to have visions of making 200% or 500% in a week. In the meantime, they start to lose that 100% profit and end up taking a loss on the trade. I’ve seen it time and time again. So watch your stops and take profits a little early if you see something you don’t like.
Rick@MomentumOptionsTrading.com
Tags: Fannie Mae, FNM, FRE, Freddie Mac, KB Home, KBH, LEN, Lennar, options trading strategies, PHM, Pulte Homes
Posted in Company Commentary, Economic News, Sectors, Strategies, Trading Tips, Watch Lists | No Comments »