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Monday, July 23rd, 2012
9:00am (EST)
“July option expiration is Friday and over the past decade, the third Friday in July has been bearish 70% of the time. In 2002, the Dow lost nearly 5%, falling from 8,409 to 8,109. In 2010, the blue-chips lost 2.5% after dropping from 10,359 to 10,097.
The Dow closed at 12,777 on Friday. If we factor in a 3% drop from current levels it would equate to a decline of 400 points. The Dow made a 200+ point swing intraday last week so a 3% move overall this week is entirely possible. This would put the blue-chips right at the 12,350 level and at the point of a possible trend change on a move lower. A 3% move higher would get the Dow to the 13,200 level and at a possible breakout point.
The other wild-card for the week will be Bernanke who will be speaking to the zombies on Tuesday (and again on Wednesday) about the recent FOMC Minutes. If you recall, Wall Street was a little disappointed following last Wednesday’s Fed statement and if Big Ben mumbles those same thoughts, the market will tank. If by chance, he hints at some type of QE3 or stimulus plan, the bulls could be running again.
The charts are showing a major move is coming and the earnings cycle will be picking up steam this week. Add in Friday’s July option expiration and the makings are there for some explosive moves this week. The 2-month long trading range we have been in could be on the verge of expanding so it will be interesting to see how the week unfolds.” (from 7/15/2012 Weekly Wrap/ Monday Morning Outlook)…
Wall Street came into the week with all eyes on earnings and Ben Bernanke. The bears got off to a good start on Monday and into Tuesday as Big Ben started talking about the economy, QE3, and the recent LIBOR scandal. The Fed Chairman seemed nervous but subdued as he dodged questions and gave vague answers on his first day of testimony but the bulls were able to rebound and pushed resistance into the close. The intraday 200-point swing in the Dow was a clue the bulls were going to make another push to the top of the trading range.
Wednesday’s action was all about Intel (INTC, $25.52, down $0.54) and their numbers which beat Wall Street’s estimates. Mr. Bernanke was back in action and continued to say the Fed stood ready to “do something” if the economy falters but would not provide specific clues. This teased the bulls but the fact that he was hinting of possible QE3 relief was enough to keep the momentum going. After the close, International Business Machines (IBM, $192.45, down $2.89) reported a fantastic quarter and raised estimates which carried over into Thursday’s action.
As expected, the bulls were able to push the top of the current trading ranges as the market went out near its highs for the day. They got a bonus package after the bell when Microsoft (MSFT, $30.12, down $0.55) and Google (GOOG, $610.82, up $17.76) announced better-than-expected quarterly results but futures actually traded lower Thursday evening which was another good clue the market could be peaking.
By Friday’s open, futures had gotten progressively worse on some fresh Spain worries which lead to a lower open. As the day progressed, there was no buying the dips as the bears pushed support which was prior resistance for the bulls. It seems traders were a little nervous being long over the weekend and the move pushed the market right back into its trading range following Thursday’s fluff.
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Tags: IBM, INTC earnings, stock options trading advisors
Posted in Earnings, Market Analysis | Comments Off
Friday, January 20th, 2012
9:00am (EST)
The bulls rolled out the red carpet after the bell on Thursday as a number of companies were set to report earnings. Despite the high profile events, the market moved higher as Tech once again led the way.
The Dow gained 46 points, or 0.4%, to finish at 12,625. The blue-chips closed on their highs for the day which opens the door for a test up to 12,800 as the index ended above our near-term 12,600 target.
The S&P added a 6-pack, or 0.5%, to settle at 1,315. The index managed to stay in the green all day after testing the breakeven level shortly after the open. We said there could be fluff up to 1,325-1,350 on the close above 1,300 which would be nice for the bulls to hold going into the weekend.
The Nasdaq jumped 18 points, or 0.7%, and ended at 2,788. Tech made a run at our 2,800 target but fell short after kissing a high of 2,793.
Yesterday’s news is actually today’s headlines as we have a ton of stocks in play ahead of the open. Most noticeably, Google (GOOG, $639.57, up $6.66) shares are down a whopping 10% (like we predicted) after the company missed Wall Street’s estimates. It seems the gains on Thursday ($6.66) were a sign of bad things to come.
Google was down over $60 at one-point last night in extended trading and in pre-market action, shares are down $50 to $590.
Elsewhere in pre-market trading, Intel (INTC, $25.63, up $0.24) is up 2% after they beat estimates and offered in-line guidance for the current quarter. International Business Machines (IBM, $180.52, down $0.55) is trading higher to $185 despite missing analysts’ revenue targets but did up guidance going forward.
And finally, Microsoft (MSFT, $28.12, down $0.11) is pushing $29 after reporting a profit of $6.6 billion, or $0.78 a share, on revenue of $20.9 billion for the quarter. This was slightly below last year’s showing of $0.77 a share on sales of $19.95 billion for the quarter, but slightly ahead of the 76 cents the suit-and-ties had penciled in.
Shares of Microsoft are at $28.77, up $0.65, ahead of the bell. We currently have open trades on this name so look for possible Profit Alerts if we take action. We have a $35 price target on Microsoft by summertime but we want to take advantage of today’s possible pop to lock in profits on our February call options.
Futures are pointing towards a mixed open and look like this: Dow (-16), S&P (-3), Nasdaq (flat).
We also have some other current open trades that we may take action on this morning and we have raised the HARD STOPS for a few of them in case there is a pullback. With the weekend here, we may lock-in some triple-digit profits! Subscribers, check the Members Area for the updates and stay locked-and-loaded.
Tags: GOOG, IBM, INTC earnings, momentum options, MSFT
Posted in Earnings, Google, Market Commentary, Trade Update, Yahoo / Microsoft | Comments Off
Wednesday, January 12th, 2011
12:35pm (EST)
The bulls can thank Germany and Portugal for today’s rally after the countries had successful auctions of government bonds this morning. Futures were up when we hit the rack last night and held after buyers came in to support the offerings which lifted sentiment on Wall Street this morning.
Germany offered 5-year notes while Portugal went with both 3-year and 10-year notes which were well received and reassured European markets that there is still demand for the region’s debt.
As a result, Germany’s version of the Dow, the DAX, was up nearly 1.4% for the day. This enthusiasm carried over into the U.S. markets as the major indexes are showing strong gains at halftime.
The Dow is up 109 points to 11,780 while the S&P 500 is higher by 12 points to 1,286. The Nasdaq is higher by 18 points to 2,734.
As far as the earnings picture, Chevron (CVX, $92.73, up $0.90) is at 52-week highs after the company said it would beat results when they report at the end of the month while Lululemon Athletica (LULU, $73.00, up $5.76) raised its 4Q profit outlook.
On Thursday, Intel (INTC, $21.28, up $0.23) reports after the close and JPMorgan Chase (JPM, $44.69, up $1.09) before the bell on Friday. We aren’t sure which way Intel trades after they announce but JPMorgan could push its 52-week high of $48.20 if the “shatter” expectations. A slight beat by a penny or two won’t do it but JPMorgan appears to be the strongest of the banks and could prove this on Friday.
We have more good news in our Members Area as we have 3 more current trades approaching triple-digit returns so we don’t need to push an “earnings trade” but we are eyeballing JPMorgan.
We will be back Thursday morning with our next update.
Tags: call options, CVX, INTC earnings, JPM earnings, LULU, momentum options, Momentum stocks, NYSE: INTC, NYSE: JPM, option signals
Posted in Earnings, Market Analysis | Comments Off
Wednesday, April 14th, 2010
9:00am (EST)
The bulls were determined to close Tuesday with a win and after it was all said and done they did exactly that.
The market started off in negative territory and was making a push towards breakeven before a rumor hit that Big Ben was going change the “extended period” language in the Fed’s fiscal policy next time out.
The bears had every opportunity to step in and take control but they were met by bulls that were ready to buy off the lows.
As a result, the Dow managed to post a 14 point gain, or 0.1%, and settled at 11,019 while maintaining a hold on the psychologically significant 11,000 level. The index traded to a low of 10,947 before touching another fresh 52-week high of 11,038.
The S&P 500 added a point and closed at 1,197 after trading to a high of 1,199. The index looks poised to break 1,200 today; more on that in a minute. The Nasdaq managed to post the strongest gains by adding 0.3%, or 8 points, to finish at 2,465.
We haven’t really concerned ourselves with the economic news so far this week because earnings are going to set the market’s tone for the rest of April. Yesterday though, the Commerce Department said the U.S. trade deficit expanded over 7% to $40 billion in February, exceeding expectations. The gap was widened, in part, by a 3.1% increase in imports of consumer goods during the month, suggesting consumer demand and spending are on the up-and-up.
Of course, the big news this morning is Intel’s (INTC, $22.77, up $0.23) numbers. The company said after the market closed Tuesday that it earned $2.4 billion, or $0.43 a share, versus $629 million, or $0.11 a share, in the year-ago period. Wall Street was expecting profit of $0.38 a share.
Intel’s revenue came in at $10.3 billion, ahead of analysts’ forecast for $9.8 billion, with gross margins topping 60+%. It was an incredible quarter and Intel said all the right things. In pre-market trading, shares are at $123.82, up $1.05.
The Intel news, and a great JPMorgan (JPM, $45.87, down $0.27) earnings report, have futures soaring before the bell which should lead to a strong open.
Dow futures are up 41 points to 11,005 while the S&P 500 futures are showing a 6 point pop and are at 1,199. The Nasdaq 100 futures are higher by 14 points to 2,015.
Subscribers, check the Members Area for the updates.
Tags: INTC, INTC earnings, Intel, JPM, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Market Commentary | Comments Off
Tuesday, April 13th, 2010
1:00pm (EST)
The bulls are trying to make a comeback after starting the morning in the red. They were able to bring the market off its session lows and into positive territory but the bears are prowling today ahead of Intel’s (INTC, $22.63, up $0.09) earnings report after the bell.
The stock got an upgrade this morning although its’ having little impact on shares at the moment. Intel will be the first tech bellwether to report earnings so what they say will likely set the tone for Wednesday’s trading. Wall Street is expecting the company to post a profit of $0.38 a share on revenue of $9.8 billion.
As a result, trading is choppy as we head into the second half of today’s session but the Dow is holding 11,000. The index is currently down a point and is at 11,005 while the S&P 500 is off by 3 points to 1,193. The Nasdaq has also slipped 3 points and is trading at 2,455.
Intel will likely report a good quarter but we wanted to highlight Fastenal’s (FAST, $53.33, up $1.43) fantastic quarter today. The company reported a profit of $56 million, or $0.38 a share versus $49 million, or $0.33 a share, in the year-ago period. Revenue was up 6% to $521 million.
Our subscribers made some FAST profits by closing their call options for over a 135% return in just under 24 hours. How sweet is that? Shares hit a high of $54.95 and we alerted our subscribers to sell half into strength and to set a tight stop on the rest this morning before the opening bell. Although the hard stop was hit, it was an easy trade to figure out as everyone else was focused on playing Alcoa (AA, $14.23, down $0.34).
Fastenal was not on Wall Street’s radar and we expect an analyst or two will come out and upgrade the stock following today’s beat on earnings. Speaking of which…
We often wonder about some of the analysts who work on Wall Street these days. We aren’t sure if they are seasoned vets or kids fresh out of college who only studied the market through books. Don’t get us wrong; some analysts are really good with their opinions but most “upgrades” or “downgrades” are given on a whim and without much thought.
Take for instance, Best Buy (BBY, $44.61, down $0.48), a stock we have followed for years and whose price pattern we have often nailed. On March 18, we profiled a call option trade in our Members Area that returned over 175% and we had this to say when shares were at $40 (stock and option quotes from that day):
Best Buy (BBY, $40.11, up $0.53)
April 41 calls (BYY100417C00041000, $1.10, up $0.25)
Action: We have been watching this one for over a week and we have been waiting for another close above $40 to confirm support. We think shares can hold $39-$40 with a possible run towards its 52-week high of $45.55.
(END)
Well, subscribers caught a wave after the company announced a blowout quarter a week later and they locked in a 100% profit by selling half their position on the April 41 calls into strength at $3.50. The plan was to hold the other half and ride them higher as the rally continued but we were stopped out the next day after an analyst downgraded the stock. Shares were at $43.
Fast forward to today and Best Buy traded above $45 yesterday and those April 41 calls are at $4.40. The call options are currently at $3.50 but sometimes these upgrades or downgrades can cost you profits although OUR research was better than Wall Street’s.
That downgrade hurt the momentum of the trade but our subscribers’ profits were still fat. And wouldn’t you know, an analyst “upgraded” the stock yesterday on rumors the company might buy RadioShack (RSH, $23.45, up $0.18). Of course, we already told you that story but it is making the rounds again.
If a buyout comes for the Shack we expect it to be north of $30.
We are going to be listening to Intel’s conference call for clues on how the rest of the week might shake out and we will be back in the morning with an update. Current subscribers, check the Members Area for important updates.
Tags: BBY, FAST, INTC, INTC earnings, Intel's earnings, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Hot Stocks | Comments Off
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Microsoft (MSFT) Keeps Momentum, Shares Up
Friday, January 20th, 2012
9:00am (EST)
The bulls rolled out the red carpet after the bell on Thursday as a number of companies were set to report earnings. Despite the high profile events, the market moved higher as Tech once again led the way.
The Dow gained 46 points, or 0.4%, to finish at 12,625. The blue-chips closed on their highs for the day which opens the door for a test up to 12,800 as the index ended above our near-term 12,600 target.
The S&P added a 6-pack, or 0.5%, to settle at 1,315. The index managed to stay in the green all day after testing the breakeven level shortly after the open. We said there could be fluff up to 1,325-1,350 on the close above 1,300 which would be nice for the bulls to hold going into the weekend.
The Nasdaq jumped 18 points, or 0.7%, and ended at 2,788. Tech made a run at our 2,800 target but fell short after kissing a high of 2,793.
Yesterday’s news is actually today’s headlines as we have a ton of stocks in play ahead of the open. Most noticeably, Google (GOOG, $639.57, up $6.66) shares are down a whopping 10% (like we predicted) after the company missed Wall Street’s estimates. It seems the gains on Thursday ($6.66) were a sign of bad things to come.
Google was down over $60 at one-point last night in extended trading and in pre-market action, shares are down $50 to $590.
Elsewhere in pre-market trading, Intel (INTC, $25.63, up $0.24) is up 2% after they beat estimates and offered in-line guidance for the current quarter. International Business Machines (IBM, $180.52, down $0.55) is trading higher to $185 despite missing analysts’ revenue targets but did up guidance going forward.
And finally, Microsoft (MSFT, $28.12, down $0.11) is pushing $29 after reporting a profit of $6.6 billion, or $0.78 a share, on revenue of $20.9 billion for the quarter. This was slightly below last year’s showing of $0.77 a share on sales of $19.95 billion for the quarter, but slightly ahead of the 76 cents the suit-and-ties had penciled in.
Shares of Microsoft are at $28.77, up $0.65, ahead of the bell. We currently have open trades on this name so look for possible Profit Alerts if we take action. We have a $35 price target on Microsoft by summertime but we want to take advantage of today’s possible pop to lock in profits on our February call options.
Futures are pointing towards a mixed open and look like this: Dow (-16), S&P (-3), Nasdaq (flat).
We also have some other current open trades that we may take action on this morning and we have raised the HARD STOPS for a few of them in case there is a pullback. With the weekend here, we may lock-in some triple-digit profits! Subscribers, check the Members Area for the updates and stay locked-and-loaded.
Tags: GOOG, IBM, INTC earnings, momentum options, MSFT
Posted in Earnings, Google, Market Commentary, Trade Update, Yahoo / Microsoft | Comments Off