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Tuesday, January 12th, 2010
1:05pm (EST)
The market is testing the lows we got this morning after trying to battle back from a nasty open. The Dow started with a 72 point loss and fell to a low of 10,591, then recovered most of the losses but is currently down 65 to 11,598.
The S&P 500 is off by 12 points to 1,134 while the Nasdaq is taking one for the team. The index is down 33, or -1.4%, and is trading at 2,279 as we head to press.
There are pockets of strength and one sector that continues higher is the Casino stocks. MGM Mirage (MGM, $11.76, up $0.86) is up 8% after getting an upgrade this morning. Goldman Sachs (GS, $167.43, down $4.13) came out and upped the shares to ”Buy” from “Neutral” and slapped a $16 price target on the stock. Sorry, Goldman, you are a little late to the party.
Our Atlantic City trip was a win-win as we went behind the scenes to see what was up during the holidays. We didn’t come away with the feeling that the industry has turned around overnight but we took notice in the action the casinos were getting.
It was good to get away and when we got back, we profiled a trade in Las Vegas Sands (LVS, $18.50, up $0.13) that has paid off in spades. Last Tuesday, our subscribers placed their bets on some call options and they have nearly doubled their money a week later.
Las Vegas Sands was under $17 when we told our subscribers ”LVS has been a solid past performer in our portfolio and has a shot at $20 if the casino stocks can rally over the next month or so.”
Folks, here is the power of options if you pick the right ones. As you can see, the stock has made a $2 move in a week which is 12% from $17 to $19. If you would have bought 100 shares of the stock it would have cost you $1,700. Today you would have a $200 profit. Not bad.
Now, take a look at what options can do for you. That $1,700 would have bought you 17 call option contracts that were trading for around a $1 last Tuesday. Today, those same call options are standing at $1.85.
If you do the math, 17 x 1.85 gets us 31.45 which means your $1,700 is now worth $3,145 or 95%. Hmmm. An 8% return with the stock or a 95% return by playing options.
We have updated this position in the Members Area…
Another stock we had recent success with is Amazon.com (AMZN, $128.03, down $2.28). We recently profiled a trade that returned our subscribers over 50% but shares are getting hit again today after touching a high of $142 before the end of 2009. We caught some of that action on the way up and recommending closing the trade after looking at the charts. Since then the stock has been torched but has come back down to serious support levels. We are doing the legwork now to see if there is another trade in Amazon…
Also getting our attention is A123 Systems (AONE, $20.75, up $0.05) which has made a huge bounce of its support areas. The stock recently made a run from $14 to $23 in a little over a month and we got some of that action as well. Our subscribers made nearly a 120% return as we had a target of $23-$24 and got out at the top.
See, it does pay to do your homework folks but that is why you have us. We are still on the fence with A123 but we wouldn’t be surprised to see a quick run back to $23.
That is all we got for today and for those of you who care…Kid Rock at the Borgata in Atlantic City on Valentine’s Day and Jay-Z in March. Be there or be square! The Members Area is updated…
Tags: A123 Systems, 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, Goldman Sachs, 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, MGM Grand upgrade, 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, Market Analysis, Market Commentary, Trading Psychology, Trading Tips | Comments Off
Tuesday, January 12th, 2010
9:10am (EST)
Futures are pointing towards a nasty open this morning after Alcoa (AA, $16.15, down $1.30) disappointed Wall Street with its earnings report. After the bell on Monday, the company reported a $277 million loss for its most recent quarter, or $0.28 a share, compared with a profit of 6 cents a share that Wall Street had been looking for.
If you exclude one-time items and special charges, Alcoa actually reported a penny a share profit but they still missed estimates by a mile. We said yesterday the market was pricing in a 7%-8% move in the shares and at pre-market levels Alcoa is down 7.5%.
As we head to press, Dow Jones futures are down by 66 points to 10,538. The S&P 500 index futures are off by 9, to 1,133, while the Nasdaq 100 index futures are lower by 17 to 1,866.
We have much more to talk about this morning in the Members Area and we are short on time out here. Current subscribers, please check for the trade updates as we have raised our exit targets on some positions to lock in profits.
Tags: Alcoa's 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
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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
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Market Retesting Lows
Tuesday, January 12th, 2010
1:05pm (EST)
The market is testing the lows we got this morning after trying to battle back from a nasty open. The Dow started with a 72 point loss and fell to a low of 10,591, then recovered most of the losses but is currently down 65 to 11,598.
The S&P 500 is off by 12 points to 1,134 while the Nasdaq is taking one for the team. The index is down 33, or -1.4%, and is trading at 2,279 as we head to press.
There are pockets of strength and one sector that continues higher is the Casino stocks. MGM Mirage (MGM, $11.76, up $0.86) is up 8% after getting an upgrade this morning. Goldman Sachs (GS, $167.43, down $4.13) came out and upped the shares to ”Buy” from “Neutral” and slapped a $16 price target on the stock. Sorry, Goldman, you are a little late to the party.
Our Atlantic City trip was a win-win as we went behind the scenes to see what was up during the holidays. We didn’t come away with the feeling that the industry has turned around overnight but we took notice in the action the casinos were getting.
It was good to get away and when we got back, we profiled a trade in Las Vegas Sands (LVS, $18.50, up $0.13) that has paid off in spades. Last Tuesday, our subscribers placed their bets on some call options and they have nearly doubled their money a week later.
Las Vegas Sands was under $17 when we told our subscribers ”LVS has been a solid past performer in our portfolio and has a shot at $20 if the casino stocks can rally over the next month or so.”
Folks, here is the power of options if you pick the right ones. As you can see, the stock has made a $2 move in a week which is 12% from $17 to $19. If you would have bought 100 shares of the stock it would have cost you $1,700. Today you would have a $200 profit. Not bad.
Now, take a look at what options can do for you. That $1,700 would have bought you 17 call option contracts that were trading for around a $1 last Tuesday. Today, those same call options are standing at $1.85.
If you do the math, 17 x 1.85 gets us 31.45 which means your $1,700 is now worth $3,145 or 95%. Hmmm. An 8% return with the stock or a 95% return by playing options.
We have updated this position in the Members Area…
Another stock we had recent success with is Amazon.com (AMZN, $128.03, down $2.28). We recently profiled a trade that returned our subscribers over 50% but shares are getting hit again today after touching a high of $142 before the end of 2009. We caught some of that action on the way up and recommending closing the trade after looking at the charts. Since then the stock has been torched but has come back down to serious support levels. We are doing the legwork now to see if there is another trade in Amazon…
Also getting our attention is A123 Systems (AONE, $20.75, up $0.05) which has made a huge bounce of its support areas. The stock recently made a run from $14 to $23 in a little over a month and we got some of that action as well. Our subscribers made nearly a 120% return as we had a target of $23-$24 and got out at the top.
See, it does pay to do your homework folks but that is why you have us. We are still on the fence with A123 but we wouldn’t be surprised to see a quick run back to $23.
That is all we got for today and for those of you who care…Kid Rock at the Borgata in Atlantic City on Valentine’s Day and Jay-Z in March. Be there or be square! The Members Area is updated…
Tags: A123 Systems, 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, Goldman Sachs, 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, MGM Grand upgrade, 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, Market Analysis, Market Commentary, Trading Psychology, Trading Tips | Comments Off