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Friday, July 30th, 2010
1:00pm (EST)
We have a lot to talk about today so we are going to throw the kitchen sink at you…
The market is once again choppy as a both the bulls and bears try to gain leverage ahead of the weekend and before Monday’s opening bell. The bears started off strong and had pushed the major indexes down over 1% but the bulls made it back to even and into positive at one point. Trading has been back and forth since.
Economic news is abundant today.
The bears used the latest GDP figure to take the market sharply lower at the open as data showed the economy grew 2.4% in the second quarter versus a forecast of 2.6%.
The bulls used a collection of good news to stage a comeback. The Chicago PMI for July was 62.3 versus expectations of 56.0 while the Consumer Sentiment Survey for July was 67.8 versus the anticipated 67.5 print Wall Street had penciled in.
As a result, the market is mixed as the Dow is down 15 points to 10,452 while the S&P 500 is down 1 point to 1,100. The Nasdaq is up 3 points to 2,254.
Next week is setting up to be an even bigger battle as we have seen the volatility pick up and we have watched the bears stand ground. It’s not to say the bulls won’t break through these hard resistance levels but if Vegas had a line on Monday’s action we would put a $20 on a lower Monday.
Earnings will be another key element in next week’s direction as well as economic news but we could see some explosive moves before today’s closing bell as mutual funds dress up the month and traders square up the books for July.
Our Watch List is PACKED with potential bearish and bullish trades and we have even profiled some LEAP options out until 2012 that we eyeballing. This weekend we will also be taking a closer look at Best Buy (BBY, $34.57, up $0.02) and Chesapeake Energy (CHK, $20.94, down $0.16), two beaten down stocks that look “interesting” at these levels. We also take a look at Gold and what is happening with it. We are expanding our Weekly Wrap to provide you more coverage of the market and a few stocks here and there.
We are also pleased to announce we have HARD copies of our trading manuals How to Trade Options on Momentum Stocks and Watch List Overview. This option course has been two years in the making and we are excited to show you how you too can find triple-digit return trades and set up Watch Lists to follow hundreds of stocks at once.
We are going to show you how we look at trades, how to figure out the returns on where a stock needs to be and how to read a few charts. And much more golden nuggets.
We will update all of this on Sunday in our Weekly Wrap so look for details over the weekend. Next week will be nail-biting and we will set you up on what to watch for. We have also updated our current trades including the one from this morning in our Members Area so make sure you check the latest up-to-the-minute updates.
Until then, have a good weekend!
Tags: BBY, Best Buy, call options, CHK, Gold, Gold stocks, 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 Company Commentary, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off
Wednesday, January 21st, 2009
In mid-December we rode gold for a three-day trade that netted quite a few double-digit returns. The “Big Three” is what I like to call my Watch List for gold although there are five or six on the list that I follow. Here is an excerpt from the December 15 blog (quotes are from that day as well):
“Barrick Gold (ABX, $35.49, up $0.58) traded as high as $37.84 and our December calls were closed for a 100% return while the January calls were closed for about a 30% gain.
Goldcorp (GG, $30.62, down $1.03) fell 10% from its high of $33.20. The December 30 calls (GGLF, $1.25, down $0.90) traded as high as $3.30 and were profiled at $1.65 Monday morning. Good thing we set that $2.90 stop, huh? The January calls returned 25%.
It was all downhill for Newmont Mining (NEM, $39.17, down $0.84) after the stock hit a high of $41.79. The December calls were closed for a double while the January calls returned about 35%.
All-in-all these were great returns for three days worth of work. Gold finished at $868 an ounce, up $26, and could continue higher. I’m not quite sure if gold will break $1000, let alone $900, but it worked well for us this week. There will be another opportunity to trade gold again (we have traded gold numerous times this year) and we made a few triples this time around.
The last time gold broke $900 was September 23 when gold prices surged more than $44 an ounce to settle at $909 for the day. That was the same day oil jumped $25 to over $130 a barrel. Those were huge moves but now gold is at $870 while oil is at $40. See what I’m saying…” —
I’m not sure where gold is headed but the key thing I wanted to alert you to was the “There will be another opportunity to trade gold again (we have traded gold numerous times this year)” quote.
Gold closed yesterday at $855 an ounce, up $15 and is slightly below where we got out last time. ABX is a $1 lower, GG is at $26 and NEM is trading about the same.
Over the last couple of years, gold has had a pretty good run from late January until the end of February. In November 2008, gold had dipped to around $750 an ounce and we jumped on the train for the way back up. We set stops and were out in less than a week.
Look, I’m not sure if gold is ready to challenge $900 but the move in gold is hard to ignore with many of the banks and the currency markets still unsettled. I don’t trust Newmont but Goldcorp and Barrick Gold are a possibility.
The call action in Goldcorp was heavy, especially with the February 32.50 calls (GGBZ, $0.70, up $0.03) as over 5,000 contracts traded hands. The Barrick Gold February 40 calls (ABXBH, $1.10, up $0.05) saw over 7,000 contracts trade hands. Both call options are a out-of-the-money and they would be risky trades. However, they may be good for another three-day marriage.
If you want to read more about gold stocks from past blogs, type in “gold” in the Search box and you will see how we have traded them in the past.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Barrick Gold, Gold stocks, Goldcorp, Newmont Mining
Posted in Gold, Uncategorized | No Comments »
Thursday, August 21st, 2008
Oil prices are up $6 a barrel this morning, its highest level in over two weeks, as escalating tensions with Russia heat up. The price of oil is at $121 and change and could go higher if a disruption of supply to Western countries is forthcoming. As you know, I was in the camp of oil going back above $120 before it got to $100 but the turn has been on a dime causing a huge jump in gold.
Russia is outraged about a possible deal between Washington and Poland to install a missile defense system in Eastern Europe and those concerns took center stage today. The defense system is seen as a threat by Moscow and other factors such as Storm Fay, and a weaker dollar has added a lot of pressure on oil today.
People are waking up to the fact that this is a huge deal and the continued presence of Russian troops in Georgia could keep the fire burning for higher oil prices. Last Friday I mentioned the gold stocks with some January call options and was hoping to scale into a position as oil headed back up. However, these positions “gapped” up so the entry prices are a lot higher than they were. With the sell-off in gold many traders started taking positions last week and it certainly is paying off today. Here is a look at the action:
Barrick Gold (ABX, $36.39, up $2.68). The January 35 calls (ABXAG, $5.00, up $1.40) were at $3.10 on Friday.
Goldcorp (GG, $34.98, up $2.55). The January 32.50 calls (GGAZ, $6.00, up $1.50) were going for $3.30.
Gold Fields (GFI, $9.05, up $0.39). The January 10 calls (GFIAB, $1.10, up $0.25) were trading for 88 cents.
Newmont Mining (NEM, $45.01, up $1.76). The January 45 calls (NEMAI, $4.90, up $0.90) were profiled at $3.35.
If you got into these trades last Friday or earlier this week, protect your profits. No one could have predicted the $6 jump in oil this morning but the Goldman Sachs (GS, $154.55, down $3.70) call of oil at $150 is looking like a real possibility if the tensions with Russia don’t ease.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Gold stocks, Oil prices, Russia tensions
Posted in Hot Stocks, Oil, Sectors | No Comments »
Tuesday, August 5th, 2008
It’s been a rough month for Gold and it continued yesterday with the price falling $9 an ounce to $908. Other metals traded lower as well. Silver tumbled $0.38 to close at $17.14 a pound, while Platinum fell $92 to close at $1,563 an ounce. Copper dropped $0.14 to $3.44 a pound and Palladium dropped $16.70 to end the day at $354.40 an ounce.
Oil is below $120 this morning which is pushing the Dow higher by 160 points to 11,445. With the price of oil dropping, the dollar will continue to rally. That’s not good news for Gold stocks as many of them are trading lower this morning. We had a little success with Gold stocks at the beginning of July and we able to make some quick profits of 10%-25%.
I’m not bullish on Gold at the moment…I’m not really bearish either. Trading options on Gold stocks can be a tricky business and we were able to make some money trading these types of options when the market was falling and oil was rising. A month later, we are in a different environment. Take a look at how much some of the Gold stocks have declined from July 1. I’ll also list some September options that we will be watching.
Barrick Gold (ABX, $38.32, down $1.70) was $46. The stock was recently upgraded from “Neutral” to “Outperform” by Credit Suisse at the $40 level but is down 4% this morning. The September 40 calls (ABXIH, $2.25, down $0.55) may be worth a look if they can get below $2.00.
Goldcorp (GG, $34.64, down $0.61) was $48 and has dropped 14 points in a month. The company reported a surprise $9.2 million loss for 2Q and lowered its production outlook for the rest of the year. The September 35 calls (GGIG, $2.65, down $0.45) have lost 15% today and may be a good buy at $2.25.
Gold Fields (GFI, $9.86, down $0.08), was $12.57. The stock is down over 20% in a month and is a better stock trade than an option trade at this time. The September 10 calls (GFIIB, $0.75, up $0.05) would double if this stock is at $11.50 by September 19.
Newmont Mining (NEM, $45.45, down $0.67) was at $53. The company reported a decent 2Q, posting a profit of $0.61 a share, compared to loss of $0.89 a share in the prior year quarter. Newmont has been making deals with other, smaller firms in an effort to expand its strategic alliances and those could pay off down the road. Watch the September 45 calls (NEMII, $3.05, down $0.55) and let’s see if they can get down to $2.50.
Although it doesn’t appear to be the case today, Gold stocks could be bottoming out after the steep drop in July. It’s unusual that we are getting such a huge rally before the Fed announcement and it remains to be seen what happens later in the day. The Dow has moved up another 30 points since I started this blog to 11,473. We’re looking at a 200-point gain in just over an hour-an-a-half as oil continues to trade below $120 a barrel.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Barrick Gold, Gold Fields, Gold stocks, Goldcorp, Newmont Mining September call options
Posted in Commodities | No Comments »
Tuesday, July 29th, 2008
The market is on the upswing as we head to lunch following yesterday’s huge loss. Oil is down a little over $3 to $121 level and the talk is it could be on its way to $100 a barrel. Just a few weeks ago we were approaching $150 so the continued slide in oil is having a positive affect on the market.
The market also got some good economic news as the Conference Board’s July index of consumer confidence rose slightly to 51.9 from 51 in June. Consumer spending accounts for more than two-thirds of U.S. economic activity so the uptick was welcomed news.
The next stop for oil would be the $117 level which could pave the way for a slick road to $100 a barrel. Of course, the market may be getting ahead of itself but comments from OPEC’s president that oil’s current price is “abnormal” and could fall to $70 or $80 is fueling the fire. Oil is at a 10-week low and the recent slide has also coincided with a stronger U.S. dollar.
The dollar is at a 5-week high and a stronger dollar is pushing commodities prices lower. Copper, gold, and natural gas are all significantly off their highs of just two weeks ago. Barrick Gold (ABX, $42.63, down $1.57), Goldcorp (GG, $39.55, down $1.40), Gold Fields (GFI, $11.97, down $0.09) and Newmont Mining (NEM, $47.70, down $1.41) are all trading lower today.
Today’s rally can certainly be contributed to the fact that oil is lower. But any sustained rally is only likely to occur if oil continues to retreat. It’s tough to say if we get a straight drop to $100 a barrel for oil but if we do and it can stay at $100 a barrel or below, it will certainly help stabilize the market over the near term.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Conference Board's July index of consumer confidence, Gold stocks, oil lower
Posted in Commodities, Economic News, Oil, Sectors | No Comments »
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Friday’s Tidbits; Jailbreak Next Week?
Friday, July 30th, 2010
1:00pm (EST)
We have a lot to talk about today so we are going to throw the kitchen sink at you…
The market is once again choppy as a both the bulls and bears try to gain leverage ahead of the weekend and before Monday’s opening bell. The bears started off strong and had pushed the major indexes down over 1% but the bulls made it back to even and into positive at one point. Trading has been back and forth since.
Economic news is abundant today.
The bears used the latest GDP figure to take the market sharply lower at the open as data showed the economy grew 2.4% in the second quarter versus a forecast of 2.6%.
The bulls used a collection of good news to stage a comeback. The Chicago PMI for July was 62.3 versus expectations of 56.0 while the Consumer Sentiment Survey for July was 67.8 versus the anticipated 67.5 print Wall Street had penciled in.
As a result, the market is mixed as the Dow is down 15 points to 10,452 while the S&P 500 is down 1 point to 1,100. The Nasdaq is up 3 points to 2,254.
Next week is setting up to be an even bigger battle as we have seen the volatility pick up and we have watched the bears stand ground. It’s not to say the bulls won’t break through these hard resistance levels but if Vegas had a line on Monday’s action we would put a $20 on a lower Monday.
Earnings will be another key element in next week’s direction as well as economic news but we could see some explosive moves before today’s closing bell as mutual funds dress up the month and traders square up the books for July.
Our Watch List is PACKED with potential bearish and bullish trades and we have even profiled some LEAP options out until 2012 that we eyeballing. This weekend we will also be taking a closer look at Best Buy (BBY, $34.57, up $0.02) and Chesapeake Energy (CHK, $20.94, down $0.16), two beaten down stocks that look “interesting” at these levels. We also take a look at Gold and what is happening with it. We are expanding our Weekly Wrap to provide you more coverage of the market and a few stocks here and there.
We are also pleased to announce we have HARD copies of our trading manuals How to Trade Options on Momentum Stocks and Watch List Overview. This option course has been two years in the making and we are excited to show you how you too can find triple-digit return trades and set up Watch Lists to follow hundreds of stocks at once.
We are going to show you how we look at trades, how to figure out the returns on where a stock needs to be and how to read a few charts. And much more golden nuggets.
We will update all of this on Sunday in our Weekly Wrap so look for details over the weekend. Next week will be nail-biting and we will set you up on what to watch for. We have also updated our current trades including the one from this morning in our Members Area so make sure you check the latest up-to-the-minute updates.
Until then, have a good weekend!
Tags: BBY, Best Buy, call options, CHK, Gold, Gold stocks, 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 Company Commentary, Trading Psychology, Trading Tips, Watch Lists, Weekly Wrap | Comments Off