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Tuesday, October 4th, 2011
9:00am (EST)
We mentioned yesterday we were excited about the market going lower because A) it proved our homework back in August was about to pay off and B) our subscribers have made a wheelbarrow full of money over the past few weeks following our option recommendations. Of course, 2011 has been a hard market to trade considering all the major events that have taken place and the recent 8-week trading range has been just as much of a headache. However, one thing our students know is that the longer a market, or stock, stays in at trading range the bigger the breakout or breakdown becomes.
We knew going into last week the bulls had a lot of work to do and once they failed to clear short-term resistance, we knew the trading range was about to crack – to the downside. We also got a hard date on when Greece’s fate would be determined which also lead us to believe there would be more anxiety as push comes to shove. Yesterday’s technical damage was exactly what we wanted to see, as the decline pushed the major averages to new 52-week closing lows.
Even good news here at home continues to take a back seat to Europe’s woes, as Greece admitted that it does not expect to hit its deficit target. Also weighing on the market was the data from overseas which pointed to a slowdown in manufacturing.
Bankruptcy rumors spooked Wall Street and Airlines stocks as AMR (AMR, $1.98, down $0.98) fell 33% on water-cooler talk they might need to higher some Chapter 11 lawyers. In the company’s defense, they did state they were not seeking a prepackaged bankruptcy but often times where there’s smoke, there’s fire. United Continental Holdings (UAL, $17.11, down $2.27) gave back 12% while JetBlue Airways (JBLU, $3.49, down $0.60) tumbled 15%. We saw some cracks in the sector back in August but we failed to give our UAL put option trade enough time to take advantage of yesterday’s debacle.
Elsewhere, Financial stocks took a beating as they suffered the worst loss of any major sector by falling 4.5%. Bank of America (BAC, $5.53, down $0.59), Morgan Stanley (MS, $12.47, down $1.04), Goldman Sachs (GS, $90.08, down $4.47) and JPMorgan Chase (JPM, $28.65, down $1.47) all hit new bottoms and could go even lower.
We have been warning our readers of Goldman’s troubles and we have said BAC was going to $5 but neither looks like a buy quite yet. In fact, we now have a triple-digit profit (+145%) in our Goldman Sachs put option from last week and all we have to do now is protect our gains. In pre-market action, Golden Slacks is trading in the $80’s.
As far as the market, let’s go over the numbers and more downside targets because it’s going to get worse…
The Dow dropped 258 points, or 2.4%, and ended at 10,655. There was strong support at 10,800 (which is now resistance) but this level acted like a wet paper towel trying to stop a cannonball…
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If you are not a subscriber but would like to read more and check our chart work for the indexes and our current trades, please click here. Futures are pointing towards another nasty open which is good news for us. Dow futures are lower by 96 points to 10,443 while the S&P futures are off by 11 points to 1,075. Nasdaq 100 futures are down 16 points to 2,050. We have quite a few trades that are up triple-digits so we have set HARD STOPS to protect our profits. However, with the futures tanking, it looks like we could see continued gains for our trades.
Tags: About options trading, Airline stocks, BAC puts, Goldman Sachs, JPMorgan Chase, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in Financial Stocks | Comments Off
Wednesday, October 14th, 2009
9:05am (EST)
Futures are pointing towards a HUGE open this morning after strong earnings results from Intel (INTC, $20.49) and JPMorgan Chase (JPM, $45.66).
JPMorgan Chase easily beat Wall Street’s expectations, after reporting a profit of $3.6 billion for the quarter. Although the company said loan losses are still high and are likely to remain elevated for some time, the results were jaw-dropping.
JPMorgan said it earned 82 cents a share, up from 9 cents a share in the same quarter a year ago, but they beat estimates by 30 cents, folks! Wall Street was expecting the company to earn 52 cents a share. Wow! Shares are up $2 to $47.66 in early trading.
Of course, Intel also beat Wall Street’s estimates and we have been on this story like grass on dirt. We sent out a News Flash last night alerting our subscribers of the after-hours jump and it looks as though those gains are going to hold. In pre-market trading, shares are up 93 cents, to $21.42.
Ahead of the bell, Dow futures are up 109, or 1.1%, to 9,918. The S&P 500 futures are higher by 15, or 1.5%, to 1,084, while the Nasdaq 100 futures are surging by 25, or 1.4%, to 1,751. All aboard!
Gold continues to set record highs. This morning, the yellow metal hit a high of $1,072 an ounce. Oil is above $75 a barrel for the first time in a year.
Current subscribers can check the Members Area for more detailed instructions on how to play Intel from here on out. Many of you should have made well over 100% on the trades and some of you might reach returns of up to 200%! As always, your comments are always welcomed so send us a line if you cashed out on this huge monster!
Tags: Intel, JPMorgan Chase, options blog, options mentoring, options track record, options trade picks
Posted in Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary, Option Trades, Rick's Account | Comments Off
Tuesday, October 13th, 2009
1:00pm (EST)
The bulls are trying to get the market higher today after starting off the session behind the 8-ball. They are doing a pretty good job as they did get the market into positive territory but we have since slipped once again. The Dow opened lower and traded to a low of 9,815 (down 70) but has rebounded off the session lows. Currently, the Dow is down 13 points to 9,872.
We have a mixed bag with the Financial stocks. The credit card companies are doing well…American Express (AXP, $35.39, up $0.31), Mastercard (MA, $216.78, up $0.78) and Visa (V, $74.47, up $0.77) are up while Bank of America (BAC, $17.80, down $0.23), JPMorgan Chase (JPM, $45.23, down $0.83) and Goldman Sachs (GS, $186.32, down $3.80) are slightly lower.
Of course, the big news today is Intel’s (INTC, $20.61, up $0.21) earnings after the bell. The stock has held up rather well today and there is heavy volume in the option pits. By the look of things, the action is pricing in a 5%-10% move in the stock and there is a bullish tone being set. However, Intel will need to beat on earnings AND revenue, in my opinion, for us to move higher.
Current Subscribers are up 60% on one of our Intel trades and can check the Members Area for the updates…oh, Imax (IMAX, $10.16, up $0.11) has set a 52-week high of $10.25 today and continues to reward our patience.
Tags: American Express, Bank of America, Goldman Sachs, Imax, Intel, JPMorgan Chase, MasterCard, option picks, options trading blog
Posted in Hot Stocks | Comments Off
Thursday, April 16th, 2009
9:20 am (EST)
This has been “cheap out-of-the-money option and earning expiration trade week” and it only happens four times a year. I like to consider these four times a year events like going to Las Vegas or Atlantic City. These options trades have been no different than playing $50 hands of three-card poker or a slot machine and they either hit or they don’t. However, since we know the stocks, and we have charts and past history we can look at, the odds are a lot beter then the “house” odds. I mentioned a slew of hot plays that were a gambler’s delight in the Weekly Wrap and all of them have had pretty good success.
Yesterday’s update right before 2PM was to stay away from JPMorgan Chase (JPM, $32.56, up $1.86) and maybe roll the dice on Google (GOOG, $379.50, up $10.59) if you are “Ed” the gambler and not “Joe” the plumber.
The JPMorgan Chase April 35 calls (JPMDB, $0.54, up $0.26) were at 43 cents and actually gained another 25% after the update. It’s funny because the last thing I said before yesterday’s opening bell was that the rally in financials was fading and it would be up to Goldman Sachs (GS, $121.19, up $6.08) to get everybody back on track.
Well guess what. Low and behold, Goldman jumps 5% yesterday! It was the one “clue” I said to watch for with the financials. This was incredible because the stock closed at $130 on Monday, dropped $15 on Tuesday to $115, and is now trading near its $125 stock offering that the company did to raise $5 billion. That is “sickishly” bullish. And I just came up with a new word for “SportsCenter”…it could also mean Goldman’s uptrend is intact.
The JPMorgan April 35′s should jump this morning and pay close attention to the Goldman Sachs April 125 calls (GSDE, $0.95, up $0.33). They hit a low of 32 cents yesterday and $125 could be the battle ground for where the stock settles. In fact, Goldman could make a run to $130 if the financial stocks rally today and Friday.
With Google, there are whispers that the company could miss earnings and there are others who feel the company could report over $5 a share and totally smash Wall Street’s expectations. Since we are gambling, I’m in the camp that Google will break $400.
I said the April 420 calls (GOPDD, $2.95, up $1.00) “could do well” at $1.45 and they freakin’ doubled after the 2pm update! Now you can clearly see what kind of returns expiration week on options can provide. Of course, it’s a doubled edged sword that cuts both ways, baby. If Google hadn’t of rebounded in the afternoon yesterday, these calls would be going the south.
The April 400 calls (GOPDT, $6.95, up $2.35) were trading at $4.40 and gained over 50%.
Google doesn’t announce until after the bell today so if the stock can continue higher, sell the calls before the closing bell. This is where a lot of inexperienced traders hold positions hoping to make even more money. I can see letting the position ride if your gains are less than 20% because these are gamble trades anyway, but remember, we are the house and why would we let a 100% return go?
Again, as I have preached all week, it is so much easier to sleep when you have made a 100% return and gotten out of a trade before a major news event. Yes, there are additional profits that might be left on the table but by taking what the market is practically giving us, we leave the table with our pockets full, not empty.
I’ll be back later this afternoon with an update and a possible trade or two for Friday.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Google, JPMorgan Chase
Posted in Financial Stocks, Hot Stocks, Market Analysis, Option Trades | No Comments »
Wednesday, April 15th, 2009
1:50pm (EST)
I mentioned a slew of names and trades in the Monday Morning Playbook in the Weekly Wrap Sunday night. Most of the trades have done rather well and here is a look at what has happened so far. Remember, in the Weekly Wrap I said all of these trades were with April options and the purpose was to show you how to trade option expiration week with cheap out-of-the-money calls. But I stressed the importance of being in-and-out of these trades the day before of the day after.
Monday’s trade was the Goldman Sachs (GS, $119.54, up $4.43) April 140 calls (GSDH, $0.04, unchanged) which opened at 69 cents that morning and were at $2.32 when I did an update to sell them later in the day. I had mentioned to get into them for under $1.00 if you could and the trade was good for a 200% return. Now look at how much the calls are worth. Goldman sold-off just like we thought it would after announcing plans to raise $5 billion.
I already covered the Citigroup (C, $3.77, down $0.24) and Bank of America (BAC, $9.79, down $0.30) trades this morning.
The Intel (INTC, $15.41, down $0.60) April 17 calls (NQDS, $0.02, down $0.27) were at 16 cents on Monday morning and doubled yesterday before they announced earnings. I have mentioned numerous times in the past if you are up 50%-100% before a company announces that you can always get out and take the entire risk out of the trade. We knew Intel was going to beat earnings and its was a given that they would be as quite as a church mouse when giving guidance for the second quarter. That crushed the stock but it is holding up well today. We will be looking at Intel again…there is too much to like about the company right now.
Another financial name I tossed out there was Piper Jaffray (PJC, $31.17, up $4.09) which reported earnings today. The April 30 calls (PJCDF, $1.40, up $0.95) were at 85 cents on Monday and closed at 45 cents yesterday. If you got in Monday you have made 75%, if you got in yesterday before the closing bell you made 200%. Sell them NOW.
The only trades left to be profiled are JPMorgan Chase (JPM, $31.78, up $1.08) and Google (GOOG, 369.89, up $0.98).
The JPMorgan Chase April 35 calls (JPMDB, $0.43, up $0.15) were at 77 cents Sunday night and have lost half their value. A 10% move gets the stock over $35 from current levels and I expect JP to move at least that. I also don’t think they sell-off as bad as Goldman even if they say they are doing a stock offering to raise cash. However, the momentum has faded with the financials like I said this morning so I would stay away.
As far as Googs, well, the April 420 calls (GOPDD, $1.45, up $0.57) could do well. The April 400 calls (GOPDT, $4.40, down $0.20) are trading right where they closed at last Thursday. The May 450 calls (GOPEJ, $2.40, down $0.05) are actually trading 30 cents higher from where they were profiled at. If Google can pull a rabbit out of its hat, the stock could easily soar to $425 which would be a huge return for the April calls as they would move from $4 to $25. The May 450′s would at least double.
However, if Google fails to meet Wall Street’s expectations or even if they do and the stock sells off, the April calls will expire worthless. The May calls will still be alive but it would be hard to predict what happens to them if Google shares get slammed.
I like the upside on the April calls but it’s a bet only a gambler would make. I don’t gamble (too often) and this is only a show-and-tell session. Or better yet, a mentoring session. Basically you are risking $450 to make $2,500. Will Google be the one stock that gets the bulls back in the market this week?
Rick Rouse
Rick@OptionsMentoring.com
Tags: Bank of America, Citigroup, Goldman Sachs, Google, Intel, JPMorgan Chase, Piper Jaffray
Posted in Company Commentary, Earnings, Financial Stocks, Option Trades, Uncategorized | No Comments »
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Dow Eyes 10,000
Wednesday, October 14th, 2009
9:05am (EST)
Futures are pointing towards a HUGE open this morning after strong earnings results from Intel (INTC, $20.49) and JPMorgan Chase (JPM, $45.66).
JPMorgan Chase easily beat Wall Street’s expectations, after reporting a profit of $3.6 billion for the quarter. Although the company said loan losses are still high and are likely to remain elevated for some time, the results were jaw-dropping.
JPMorgan said it earned 82 cents a share, up from 9 cents a share in the same quarter a year ago, but they beat estimates by 30 cents, folks! Wall Street was expecting the company to earn 52 cents a share. Wow! Shares are up $2 to $47.66 in early trading.
Of course, Intel also beat Wall Street’s estimates and we have been on this story like grass on dirt. We sent out a News Flash last night alerting our subscribers of the after-hours jump and it looks as though those gains are going to hold. In pre-market trading, shares are up 93 cents, to $21.42.
Ahead of the bell, Dow futures are up 109, or 1.1%, to 9,918. The S&P 500 futures are higher by 15, or 1.5%, to 1,084, while the Nasdaq 100 futures are surging by 25, or 1.4%, to 1,751. All aboard!
Gold continues to set record highs. This morning, the yellow metal hit a high of $1,072 an ounce. Oil is above $75 a barrel for the first time in a year.
Current subscribers can check the Members Area for more detailed instructions on how to play Intel from here on out. Many of you should have made well over 100% on the trades and some of you might reach returns of up to 200%! As always, your comments are always welcomed so send us a line if you cashed out on this huge monster!
Tags: Intel, JPMorgan Chase, options blog, options mentoring, options track record, options trade picks
Posted in Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary, Option Trades, Rick's Account | Comments Off