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Thursday, July 15th, 2010
1:00pm (EST)
The bulls are having a tough day and you don’t need us to tell you the market may have reached a temporary “top” again. There is a bevy of news that is happening today AND tomorrow so we will do some quick hits today.
The Dow is currently down 88 points, or 0.8%, to 10,279 while the S&P is down 9 points, or 0.9%, to 1,085. The Nasdaq is off by 18 points, or 0.7%, and is at 2,231. It was a rough open for the bulls and upside resistance remains 10,400 for the Dow; 1,100 for the S&P 500; and 2,250 for the Nasdaq.
To the downside, support for the Dow will come in at 10,200 and 10,000; the S&P could test the 1,075 then the 1,050 area again while the Nasdaq level to watch is 2,150.
JPMorgan (JPM, $39.47, down $0.88) reported earnings this morning and they were spectacular. However, we are seeing a classic “sell the news event” as the stock opened 1% higher and is now down 2%. The company earned $4.8 billion, or $1.09 a share, versus $2.7 billion, or $0.28 a share, in the year earlier period. Wall Street was looking for $0.67 a share.
JP’s trading results were down given the tough market environment which hurt profits but their loan book continues to shrink which means they are being very “selective” with whom they loan money too. Bingo. We have said credit is still tight and small businesses continue to complain they can’t get a loan. They want to expand and hire but they can’t borrow. Consumers can’t get loans from banks, so JP is following the trend.
Bank of America (BAC, $15.12, down $0.55) and Citigroup (C, $4.09, down $0.12) report earnings before the bell on Friday…
Financial regulation reform is still trying to push its way through Congress and that has also clouded the outlook for the Financials. The Democrats have the 60 votes needed so things could come to fruition by the end of the day or tomorrow. Even if the bill is signed, financial reform will still have to work its way through the system as other agencies (Treasury Department, SEC, etc.) will have to incorporate their own rules and also implement them into the financial system.
Let’s not forget we will be getting word on Europe’s bank stress tests by next Friday.
The bulls are also having trouble digesting some disappointing economic news which offered mixed signals on the health of the U.S. economy.
Initial jobless claims fell by 29,000 to 429,000 last week; the producer price index (PPI) fell 0.5%; and the Empire State Index tanked to 5.08 in June from a reading of 19.57 a month – economists were looking for a number of 18.5 and this report is the one weighing heaviest on the bulls.
All eyes will be on Google (GOOG, $488.63, down $2.71) after the bell as the company gives Wall Street its quarterly results. Shares have dropped over $100 since April and we think the stock will make at least a $30 move one way or the other in after-hours trading.
And one more story we are following closely, Vivus (VVUS, $12.11, flat), which is halted pending news on its obesity drug, Qnexa. We don’t know if shares will open up for trading today but the news will be out sometime in the next few hours. We expect Qnexa will get a good recommendation from the panel for the FDA to consider the drug but it probably won’t be unanimous.
We will be back in the morning with a full update on things.
Tags: call options, how to trade options, JPMorgan, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, Vivus, volatile options, VVUS
Posted in BioTech, Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, July 14th, 2010
1:00pm (EST)
When we shut our eyes this morning around 2am, the Dow futures were up 70 points and it appeared as though the bulls were going to have a huge day. However, when we woke up this morning and were doing the finishing touches to our 9am update, futures were slipping which lead to a muted open for the market.
The Nasdaq showed strength on the heels of Intel’s (INTC, $21.69, up $0.68) blowout quarter but the mood quickly soured after Wall Street got the latest Retail Sales numbers. The Commerce Department said June sales fell 0.5% which was worse than the expected 0.2% decline most economists had expected.
As a result, the market is hanging near the breakeven level but is showing positive results. The Dow is up 16 points to 10,381 while the Nasdaq is higher by 14 points to 2,256. The S&P 500 is up by 2 points to 1,097.
Although we listed higher targets for the Dow this morning, the index is still running into resistance at 10,400. We have also been a repeating parrot on the 1,100 level for the S&P and the 2,240-2,250 level for the Nasdaq but the momentum does not appear to be there from the bulls to take these levels out today. We aren’t saying they can’t, we are just pointing out the market is near the top of the ranges again and any stalled rally will likely lead to a retreat and more hair pulling.
The jobless claims number could be another catalyst for Thursday’s trading and we also get a look at the health of the Financial sector as JPMorgan (JPM, $40.21, down $0.27) will announce earnings before the bell.
Turning to IPO’s, there are a number of initial public offerings that will be coming to the market over the next few days as activity seems to be picking up.
The biggest of the bunch will be private equity firm Kohlberg Kravis Roberts (KKR) will make its debut on Thursday on the New York Stock Exchange. The offering is worth about $2 billion but KKR is a partnership not a corporation so this one is a little funky in the way it is being done. In any event, stay clear of this one as it has a checkered past.
RealD (RLD) is expected offer nearly 11 million shares in a range of $13-$15 apiece. The company is trying to capture a little of the magic in the 3D wave that has hit us over the last 6 months. RealD supplies projectors for 3-D cinema screens and glasses for viewers but is a sketchy offering because the company’s bottom line bleeds red.
SMART Technologies (SMT) is a Canadian company that makes interactive white boards that could replace the days of chalkboards (finally!) that many of us grew up with. It seems these new “smart boards” are catching on as they have the power of a computer and the ease of a whiteboard.
Users can share applications, access the internet and write in digital ink. The company also acquired NextWindow in April which makes touch screens for electronic displays. We haven’t seen a board, yet, but they sound pretty cool. The company plans to raise $600 million with 35 million shares being offered in the $16-$18 range.
Finally, Qlik Technologies (QLIK) is a provider of business intelligence software. Their software analyzes costs and organizes and finds information. Qlik supports an impressive client base and expects to bring in about $100 million with its offering.
We like SMART a lot and RealD could get a pop because of its brand name but finding the diamond in the rough is a little easier when you do a little research.
Although we are big fans of the 3-D rave that has been hot over the last six months, those stocks are starting to cool and we question how long people are going to pay an extra $3-$5 to watch a 3-D movie. [Update: Imax (IMAX, $13.50, down $0.20) is down from its 52-week high of $21.30.]
That leaves SMART as the one to watch going forward.
We have a lot to cover in our Members Area as we have added a couple of names to our Watch List. We are slowly setting up for the market’s next move and we think there are a number of great setups coming our way. Subscribers, check for the updates.
We will be back in the morning with another full update and hopefully some breaking news on Vivus (VVUS, $12.74, up $0.30) which could get some good news concerning its drug Qnexa. We also have Vivus on our Watch List so some of you could be setting up for a nice payday…
Tags: dndn, IPOs, JPMorgan, Vivus, VVUS
Posted in IPOs, Market Analysis, Market Commentary | Comments Off
Tuesday, December 15th, 2009
9:00am (EST)
The bulls got some good news yesterday in the form of the Dubai $10 billion “bailout” package and the Dow’s advance could have been more if Exxon Mobil (XOM, $69.69, down $3.14) didn’t drop 4%. The company said it would acquire XTO Energy (XTO, $47.86, up $6.37) for $30 billion or so and Exxon’s Dow impact accounted for 23 negative points.
Still, the Dow rose 29 points to close at 10,501, its highest close since October 1st, 2008. The S&P 500 added 7 points and closed at 1,114, while the Nasdaq gained 21 to finish at 2,212.
We would love to see Exxon drop to $66-$67 this week or next.
The Financial sector got a small lift after Citigroup (C, $3.70, down $0.25) said it would repay the $20 billion of the $45 billion it received last year from the government’s bailout package. Citigroup tanked of course, but JPMorgan (JPM, $41.77, up $0.81), Goldman Sachs (GS, $166.10, up $0.10) and Morgan Stanley (MS, $30.17, up $0.39) got small pops. Note: The government also will sell its 35% stake in Citigroup.
Wells Fargo (WFC, $25.49, up $0.08) must have felt left out because after the bell yesterday they announced they were repaying $25 billion. Both Citigroup and Wells have followed Bank of America’s (BAC, $15.63, flat) lead as they recently announced they were repaying the $45 billion in bailout money it owed taxpayers.
Well, well, well…Apollo Group (APOL, $62.06, up $5.48) has agreed to settle a lawsuit over how it paid recruiters for its University of Phoenix subsidiary. The company said it expects to pay $80 million in the settlement. Wow! Somebody didn’t want somebody talking. We covered the firm’s shady practices and mentioned this “boiler room” atmosphere in our October 28th write-up “Apollo Group Has A Skeleton Or Two“.
Ahead of the opening bell, Dow futures are lower by 45 points to 10,392, while the S&P 500 futures are off 6 to 1,102. The Nasdaq futures are down 9 to 1,799. Stock futures got worse after the release of the producer price index report. The index increased 1.8% versus the expected increase of 0.8%.
Before we go, we continue to notice the gains in Imax (IMAX, $12.93, up $0.35) which hit another 52-week high yesterday. We have been pounding the table on this stock and we have been recommending different options trades on this one all year long. In case you haven’t heard, Avatar is opening up this Friday.
Tags: Apollo Group, call option trading, chicken option trades, Citigroup, Covered Calls, Exxon Mobil, Imax, JPMorgan, momentum stock option trading, option trade picks, option trading online, options blog, options mentoring, options newsletters, options track record, put option trading, Rick Rouse, stock option trade pick service, straddle option trades, strangle option trades, support and resistance levels, triple-digit option trades, XTO Energy
Posted in Economic News, Financial Stocks, Hot Stocks, Option Trades, Watch Lists | Comments Off
Thursday, September 10th, 2009
8:25am (EST)
Somebody forgot to tell the bulls that September is historically a bad month for the market. There wasn’t much action heading into Friday’s unemployment report but now that it is out of the way, the bulls seemed determined to take us higher.
The Financials put in a good day after a few upgrades in the sector. Citigroup (C, $4.66, down $0.02) upgraded shares of MasterCard (MA, $210.31, up $2.86) while JPMorgan (JPM, $42.86, up $0.32) super-sized Morgan Stanley (MS 28.55, +0.75).
This is normally the time of year that companies pre-announce earnings but I don’t think we have to worry about the Financials saying anything negative…I wouldn’t think. Quietly, they have reported back-to-back solid quarters and if 3Q earnings come out better-than-expected, watch out.
One stock that I wanted to mention this morning real quick is JDS Uniphase (JDSU, $7.37, up $0.14). A subscriber pointed out that he now had a profitable position but I dropped the trade because I thought it would expire worthless (just like he thought). I profiled the September 7 calls (UQDIJ, $0.45, up $0.10) on June 9th and we left them for dead two weeks later. There was no stop on the trade and I had this to say:
From June 22nd (quotes are from that day):
“JDS Uniphase (JDSU, $5.48, down $0.39) is a “lottery” play and we entered the September 7 calls (UQDIJ, $0.10, down $0.10) at 35-40 cents. One contract would have cost you $40 or 5 contracts would have cost $200. When I say a trade is a “lottery” trade that means there is no stop for these positions because they are just that..lottery picks. As you can see, we will have to wait this one out.” (END)
The reason I am pointing this out is because we currently have a few “lottery trades” in the portfolio. These types of trades are OKAY to try but only if you do limited positions AND you are doing well on your larger trades. Lottery trades are options that trade for under 50 cents. We normally do 10 and 20 lot trades on options that cost $1.50-$2.50. These trades are more detailed and aren’t on lower priced stocks.
Back in the day, they didn’t even list options for stocks that trade for under $5.
The key to taking on these risky trades is to only buy the same amount of contracts that you do with the other trades. If you buy 10 contracts of a $2.00 option and it goes to $4.00 you have made $2,000. If you then take those profits and roll the dice on a “speculative” trade that you think could do well and you buy 10 contracts for 30 cents, you are risking $300. You still have a profit of over $1,700 which would allow you to play in this area.
That is all I have for today. There was no afternoon post yesterday because of Jury Duty. And I have it again today so no afternoon post. Sorry folks, this is about the only thing that makes me miss an update.
Subscribers: Please don’t forget to check the MEMBERS AREA for all NEW trades. The trade updates are posted by 9:00am (EST) EVERY morning and I don’t profile mid-day trades. So, if you are a subscriber, check the Members Area daily to see what we have going on. I have profiled two for Thursday morning.
Rick@MomentumOptionsTrading.com
Tags: Citigroup, JDS Uniphase, JPMorgan, Morgan Stanley
Posted in Option Trades | Comments Off
Tuesday, June 9th, 2009
If you are watching the pre-market trades this morning you will notice that Green Mountain Coffee Roasters (GMCR, $63.36, down $30.18) is printing $63.36. If you bought that stock last week or yesterday, you might be freaking out right now if you are unaware of the share split.
The company recently approved a 3-for-2 stock split which is pretty rare these days considering we have some powerhouse names trading in the single-digits. Coffee and solid sales growth is all you need to know about Green Mountain for now. For those of you that may not follow it or have never heard of the company, put it on your Watch List…
Cisco Systems (CSCO, $20.08, up $0.21) is up over $20 in pre-market. I went out on a limb and predicted the stock would close above $20, well, I said I’d be shocked if we didn’t close above $20 today. It looks like the stock might stop teasing us and start pleasing us once the opening bell rings. Cisco is one of the first trades I have profiled in our new trading service, WinningWithOptions.com.
Bank stocks are getting a pop this morning as Wall Street watches the development of which banks can start paying back the government bailout loans. American Express (AMX, $26.10, up $0.45), Goldman Sachs (GS, $149.16, up $0.81), JPMorgan (JPM, $35.72, up $0.33) are among the banks expected to get the green light.
Dow futures are up 8, Nasdaq futures are up 7.5 while the S&P 500′s are up 2. Looks like we are opening in the green this morning…
Rick Rouse
Rick@OptionsMentoring.com
Tags: bAmerican Express, Cisco Systems, Goldman Sachs, Green Mountain Coffee Roasters, JPMorgan
Posted in Commodities, Financial Stocks | No Comments »
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Bears See An Opening
Thursday, July 15th, 2010
1:00pm (EST)
The bulls are having a tough day and you don’t need us to tell you the market may have reached a temporary “top” again. There is a bevy of news that is happening today AND tomorrow so we will do some quick hits today.
The Dow is currently down 88 points, or 0.8%, to 10,279 while the S&P is down 9 points, or 0.9%, to 1,085. The Nasdaq is off by 18 points, or 0.7%, and is at 2,231. It was a rough open for the bulls and upside resistance remains 10,400 for the Dow; 1,100 for the S&P 500; and 2,250 for the Nasdaq.
To the downside, support for the Dow will come in at 10,200 and 10,000; the S&P could test the 1,075 then the 1,050 area again while the Nasdaq level to watch is 2,150.
JPMorgan (JPM, $39.47, down $0.88) reported earnings this morning and they were spectacular. However, we are seeing a classic “sell the news event” as the stock opened 1% higher and is now down 2%. The company earned $4.8 billion, or $1.09 a share, versus $2.7 billion, or $0.28 a share, in the year earlier period. Wall Street was looking for $0.67 a share.
JP’s trading results were down given the tough market environment which hurt profits but their loan book continues to shrink which means they are being very “selective” with whom they loan money too. Bingo. We have said credit is still tight and small businesses continue to complain they can’t get a loan. They want to expand and hire but they can’t borrow. Consumers can’t get loans from banks, so JP is following the trend.
Bank of America (BAC, $15.12, down $0.55) and Citigroup (C, $4.09, down $0.12) report earnings before the bell on Friday…
Financial regulation reform is still trying to push its way through Congress and that has also clouded the outlook for the Financials. The Democrats have the 60 votes needed so things could come to fruition by the end of the day or tomorrow. Even if the bill is signed, financial reform will still have to work its way through the system as other agencies (Treasury Department, SEC, etc.) will have to incorporate their own rules and also implement them into the financial system.
Let’s not forget we will be getting word on Europe’s bank stress tests by next Friday.
The bulls are also having trouble digesting some disappointing economic news which offered mixed signals on the health of the U.S. economy.
Initial jobless claims fell by 29,000 to 429,000 last week; the producer price index (PPI) fell 0.5%; and the Empire State Index tanked to 5.08 in June from a reading of 19.57 a month – economists were looking for a number of 18.5 and this report is the one weighing heaviest on the bulls.
All eyes will be on Google (GOOG, $488.63, down $2.71) after the bell as the company gives Wall Street its quarterly results. Shares have dropped over $100 since April and we think the stock will make at least a $30 move one way or the other in after-hours trading.
And one more story we are following closely, Vivus (VVUS, $12.11, flat), which is halted pending news on its obesity drug, Qnexa. We don’t know if shares will open up for trading today but the news will be out sometime in the next few hours. We expect Qnexa will get a good recommendation from the panel for the FDA to consider the drug but it probably won’t be unanimous.
We will be back in the morning with a full update on things.
Tags: call options, how to trade options, JPMorgan, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, Vivus, volatile options, VVUS
Posted in BioTech, Earnings, Market Analysis, Market Commentary | Comments Off