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Monday, June 8th, 2009
10:00pm (EST)
The bulls are back in town. Well, they never left really.
The bears came up swinging Monday after being bullied around last week and were off to a good start. However, today’s round actually went to the bulls as the Dow finished with a slight gain (1 point) and closed at 8,764. It looks like we got the rally after word leaked that some of the Banks could be paying back bailout money this week. The Three Musketeers I follow are JPMorgan (JPM, $35.39, up $0.84), Morgan Stanley (MS, $31.39, up $0.42) and Goldman Sachs (GS, $148.35, down $0.66). Keep an eye on them this week…
Cisco Systems (CSCO, $19.87, unch.) debut on the Dow ended in a non-event as the stock was unchanged. Shares were weak in the morning session but Cisco managed to trade above $20 again. This was right before the closing bell and once again we were denied. I still like the action and will be shocked if Cisco doesn’t CLOSE above $20 on Tuesday.
That didn’t stop Travelers (TRV, $43.92, up $0.47) from adding to its gains. It too was added to the blue chip index. The stock has traded higher 7 out of the last 8 trading sessions. The two companies replaced General Motors (GMGMQ.PK, $1.21, up $0.34) and Citigroup (C, $3.42, down $0.04) in the Dow. DeVry (DV, $46.31, up $0.47) was added to the S&P 500 and it also had a good day.
Apple (AAPL, $143.85, down $0.82) was in the red all day because Wall Street was bracing for the $99 iPhone news which they got. However, Apple also trimmed its Mac prices and the stock almost managed to turn positive. Another hour in the session and it probably would have…
I went into more depth about Apple in our new trading service, WinningWithOptions.com, as well as Palm (PALM, $12.16, down $0.84). I don’t care what Wall Street was expecting and although we have closed the Apple trade, this stock could still run higher. The new price cut by Apple will only increase demand (my guess is by as much as 50%) and lead to more iTune sales and eventually Mac sales. Apple is King.
With that, I should get back to a more normal writing schedule in the next few days. Real quick, for those of you who signed up for our WinningWithOptions.com trading service, the only email I have sent was a trade update from the FREE trades that were posted in the blog and the one I sent out by email on June 2nd. The way this works is like so.
Every Monday I will send an email before the market opens detailing our trade picks and profiling trades that we are considering. Today was the first issue. I will only be doing updates as needed and when there is one, you will get emailed. This information will also be posted in the Members Area, as will all posts made by me.
Most people are confused how this is going to work but I wanted to lay some ground work for you to follow. I know we are late getting the user names and passwords out to some of you and you will get them soon. I just wanted to ensure everybody that they haven’t “missed” anything and I feel stupid that this hasn’t happened. I’m not an IT guy but they tell me they are working on it.
So, if you missed this morning’s trade update, please send me an email and I will personally get that out to you tonight. Those IT guys are going to owe me dinner…
Also, I encourage you to keep reading the blog. Nothing will change, really, as I will still cover a lot of stocks and every now and then an option trade. If I am sending out a new trade I will mention it in the blog.
As far as the user name and password, once you get it, you will have access to the training videos which I will talk about once we get through this big push.
Thank you, everybody, who signed up to support the new trading service. The current trades we have going managed to hold their own today!
Rick Rouse
Rick@OptionsMentoring.com
Tags: Cisco Systems, Citigroup, DeVry, General Motors, Goldman Sachs, JPMorgan, Morgan Stanley, Travelers
Posted in Apple, Company Commentary, Financial Stocks, Market Analysis, Option Trades | No Comments »
Friday, March 13th, 2009
JPMorgan (JPM, $23.75, up $0.55) had another decent day and traded above $24 before finishing Friday’s session 2% higher. The rally in the financials lasted for about the first hour or two of trading but many of the financial stocks ended off their session highs. I’ve been talking about the financials all week and despite the rally, I didn’t want to keep any open positions going into the weekend.
I was thinking of keeping the other 5 option contracts open im my JPMorgan trade but the deciding factor in me closing the trade was Bernanke speaking Sunday night. The Federal Reserve chairman will be on “60 Minutes” this Sunday night and it will be the first interview with a chairman in 20 years. You can almost bet his words will move the market come Monday morning.
He is expected to talk about what went wrong with America’s financial system, how it caused the current economic crisis, and what he plans to do to help fix the economy. In the past, Bernanke has been a disaster for the market but lately he has had a few bright spots.
It’s possible that he will say something very positive on how regulations might change in the future and that could help the financials continue their rally next week. Could Bernanke be the one who really ignites this rally? Yeah, exactly. It’s kind of like playing Texas hold-em with 2-7 off suit. But you can win big pots.
The April 25 calls (JSADE, $1.95, up $0.90) were profiled at 81 cents and I sold half of my position on Thursday at $1.89. The net amount for that was $945. I sold the other 5 calls today at $2.13 and the net amount was $1,065. My average selling price was $2.10 for all 10 contracts. The trade cost $810 to put on. I cleared $1,290. The total return on my $810 was 159%. Not bad for a couple of days work. I didn’t pay commissions because it was a new options account I opened up for the blog. More on that in this weekend’s Weekly Wrap. (Sign up on the right of this page if you would like the newsletter to come straight to email inbox on Sunday nights).
Anyway, I always preach about taking your profits and not to get emotional with your trades. Believe me, I had Gordon Gekko on one shoulder and Bud Fox on the other (characters from the movie Wall Street for you young-in’s…) going into the final hour of trading but didn’t want to risk my profits on a Bernanke national spotlight.
Who knows where the market will open on Monday but keep everything in focus. If the financials keep going up, maybe we play them again. The key thing to remember is that it hasn’t even been a week and there will still be volatility in these stocks. We are almost at a point where it may be worthwhile to start looking at strangle trades on some of these plays. These kind of option trades can be sweet especially given that the fact of how far financial stocks popped this week.
If you got questions, or comments, send them to me over the weekend.
Rick Rouse
Rick@OptionsMentoring.com
Tags: JPMorgan
Posted in Option Trades, Rick's Account, Sectors | No Comments »
Thursday, March 12th, 2009
Financial stocks remain one of the strongest performing sectors in the market today and have helped the Dow get back above the 7,000 level.
Tuesday night I mentioned the JPMorgan (JPM, $21.78, up $1.38) April 25 calls (JSADE, $1.31, up $0.30) and how I had put them on my watch list when they were trading for 80 cents. The calls came back to these levels on Wednesday and I pulled the trigger on 10 contracts at 81 cents.
The financials have made a good run this week and I’ll try and put everything in perspective tonight. If the Dow can hold 7,000, and the S&P 500 can clear 740, we could be headed higher into next week. Some of the sharpest rallies come in bear markets so keep that in mind. Many of the trades have done well but it’s time we put one foot out the exit door.
Rick Rouse
Rick@OptionsMentoring.com
Tags: JPMorgan
Posted in Option Trades, Rick's Account | No Comments »
Tuesday, March 10th, 2009
It was a good day for for the market and it was a great day for us. The Dow surged 380 points, or 5.8%, and closed at 6,926. If there were another hour of trading today the Dow probably would have hit 7,000. The Nasdaq soared 90 points, or 7%, and finished at 1,358 while the S&P 500 traded higher by 43 points, or 6.3%, and settled at 719.
Financial stocks were blistering today after reports that the SEC will reinstate the uptick rule as early as next month. That and the fact that Citigroup (C, $1.45, up $0.40) said it was having a good quarter.
Well, I would hope so.
If you are borrowing money from the government at 0% and making loans, I would hope Citigroup would be doing well this quarter. Anyway, the financal rally was huge today and I was looking at them yesterday thinking…you know…these stocks are getting ridiciously cheap. Specifically, I was looking at the JPMorgan (JPM, $19.50, up $3.60) March 20 calls (JSACD, $1.25, up $0.85) when they were at 75 cents and the April 25 calls (JSADE, $1.00, up $0.60) when they were at 80 cents.
I wanted to pull the trigger put we have too many open positions and I didn’t want to overload you. However, the rally was on once Bernanke spoke before the bell about the banks and the trades we are following did really well.
Here is a quick rundown:
Exxon Mobil (XOM, $67.39, up $2.82)
April 70 calls (XOMDN, $2.25, up $0.58)
Entry Price: $1.25 (3/5/09)
Exit Target: $2.00
Return: 80%
Our exit target was “technically” hit but I don’t blame you if the position is still open. I mentioned the rally Exxon made after a similiar trading pattern back in October. A $2.00 stop gets us a 60% return if Exxon fails from here.
IBM (IBM, $87.25, up $3.77)
April 95 calls (IBMDS, $1.40, up $0.45)
Entry Price: $1.20 (3/6/09)
Exit Target: $2.40
Return: 17%
Big Blue came through after lagging the market at the open but ended the day in a strong uptrend.
Potash (POT, $75.01, up $5.70)
April 100 calls (PYPDT, $1.60, up $0.50)
Entry Price: $1.70 (3/4/09)
Exit Price: $3.40
Return: -6%
It looks like we were a couple of days early with this one but the calls recovered nicely today and volume was huge. Potash was the first pick of the three stocks we were targeting for this rally and although we are slightly down from our entry price, these call options should be okay if Potash can continue its huge run.
***Full Disclosure*** I still have an open position in the ConocoPhillips (COP, $38.00, up $1.47) March 40 calls (COPCH, $0.75, up $0.21). I bought 10 contracts yesterday at 58 cents and they traded as high as 87 cents today. Had I sold at the high, I was looking at a $290 profit. But I held on. My target is 75 cents to $1.00 and I didn’t sell because of the strong rally. We will see how it goes…
Other positions:
Genentech (DNA, $91.50, down $1.13)
March 95 calls (DWNCS, $0.55, up $0.10)
Entry Price: $1.50 (1/12/09)
Exit Target: $0.55 (3/10/09)
Return: -73%
I mentioned in the Weekly Wrap that I would close this one out on Monday and after a frustrating two months…it is finally gone.
Apollo Group (APOL, $68.96, up $2.58)
April 55 puts (OAQPK, $2.35, down $0.55)
Entry Price: $2.95 (3/6/09)
Exit Price: $2.50
Return: -15%
We were stopped out of the April puts with a small loss but we made 100% on the March puts. Apollo went along for the ride on the market’s dollar today and we were stopped out at $2.50.
I also profiled Take-Two Interactive Software (TTWO, $6.85, up $0.84) Sunday night in the newsletter and the June 10 calls (TUOFB, $0.50, up $0.20) as a possible trade. The calls could have been bought on Monday for 25 cents. The stock traded higher throughout the day in anticipation of its earnings announcement and you could have been out before the closing bell with a 100% return. The company beat expectations but in after-hours trading the stock was down 45 cents.
We are now long on calls so let’s hope the rally continues. Otherwise, set your stops to protect these profits.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Apollo Group, Citigroup, ConocoPhillips, Exxon Mobil, Genentech, IBM, JPMorgan, Potash, Take-Two Interactive Software
Posted in Company Commentary, Earnings, Option Trades | No Comments »
Wednesday, February 11th, 2009
The market hates uncertainty and Tuesday all Wall Street could do was watch with despair as stocks were sent plunging. The market sat on the fence on Monday and traded flat and that was pretty much the deal until Treasury Secretary Timothy Geithner spoke. The more he spoke however, the more the market tumbled as he offered no real clues on what the new rescue details from the government were going to be. As a result, the Dow sank 382 points to finish at 7,888. Can’t say I’m surprised.
The market took one step forward last week and two steps back yesterday. Perhaps Wall Street was expecting too much which is usually the case and not only did the rescue plan lack firm details, not one word was uttered about housing. In fact, the biggest number I walked away with is that this mess could cost us $3 trillion.
With so much going on with the banks, everybody seems to be forgetting about Ford Motor (F, $1.82, down $0.08) and General Motors (GM, $2.70, down $0.13) and the fact that a slew of retailers are crumbling right before our eyes.
The government thinks this is all going to be fixed but it is not. The companies that are too big to fail, need to fail and the ones that survive, survive. That is why we have bankruptcy laws. My point being, why would anyone want to rush out and buy stocks?
You have heard me say this a thousand times and it’s something you should feel the same way about. Who cares where the market is going? We are not long-term investors and we realize we are in a trading market. But this is a market that can be tricky and one that can hand you your head on a platter if you aren’t careful.
The 5% rally we got at the end of last week was short-lived and the 10% pop we got in the financials were lost in a New York minute. Bank of America (BAC, $5.56, down $1.33) fell 20%, Goldman Sachs (GS, $90.40, down $7.49) and JPMorgan (JPM, $24.62, down $2.66) dropped 8%-10%. The good news is that there will be an opportunity to trade these stocks again. The market was giving so many clues yesterday that we were headed lower as excerpts from Geithner’s speech started to leak. I was going to list some put options on these same stocks but I didn’t want to confuse anyone.
The JPMorgan February 25 puts (JSANE, $1.95, up $0.95) opened at $1.05 and traded as low as 90 cents. That was a quick double if you got in-and-out yesterday. The financial stocks will continue to make 10%-20% moves in short time frames and all we are doing is playing them that way. Once we start to get some details and Wall Street believes the relief is going to help or work out, then we should see the financial stocks head back up. But you have to know which options to play.
The February options expire next Friday and they are getting a little too close to expiration to be playing with. The March options will still bring enormous profits and it is important that you pick your entry points.
For example, the Bank of America March 6 calls (BYOCF, $1.10, down $1.11) and the March 7 calls (BYOCG, $0.75, down $0.90) both lost 50% of their value.
If BofA is weaker to start Wednesday’s session, buy both of these call options 30 minutes after the open. If the calls open slightly higher, see where they are at. Set entry prices right at Tuesday’s closing prices ($1.10 and $0.75) and wait for the stock to come back to you. If the stock opens slightly higher, check the premiums for these two calls. If it is not much more than current prices, pull the trigger.
Once again, these are strictly lottery plays but there is enough movement in BofA right now that I think we will be okay.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Bank of America, Ford, GM, Goldman Sachs, JPMorgan
Posted in Market Analysis, Uncategorized | No Comments »
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Market Rebounds After Starting Lower
Monday, June 8th, 2009
10:00pm (EST)
The bulls are back in town. Well, they never left really.
The bears came up swinging Monday after being bullied around last week and were off to a good start. However, today’s round actually went to the bulls as the Dow finished with a slight gain (1 point) and closed at 8,764. It looks like we got the rally after word leaked that some of the Banks could be paying back bailout money this week. The Three Musketeers I follow are JPMorgan (JPM, $35.39, up $0.84), Morgan Stanley (MS, $31.39, up $0.42) and Goldman Sachs (GS, $148.35, down $0.66). Keep an eye on them this week…
Cisco Systems (CSCO, $19.87, unch.) debut on the Dow ended in a non-event as the stock was unchanged. Shares were weak in the morning session but Cisco managed to trade above $20 again. This was right before the closing bell and once again we were denied. I still like the action and will be shocked if Cisco doesn’t CLOSE above $20 on Tuesday.
That didn’t stop Travelers (TRV, $43.92, up $0.47) from adding to its gains. It too was added to the blue chip index. The stock has traded higher 7 out of the last 8 trading sessions. The two companies replaced General Motors (GMGMQ.PK, $1.21, up $0.34) and Citigroup (C, $3.42, down $0.04) in the Dow. DeVry (DV, $46.31, up $0.47) was added to the S&P 500 and it also had a good day.
Apple (AAPL, $143.85, down $0.82) was in the red all day because Wall Street was bracing for the $99 iPhone news which they got. However, Apple also trimmed its Mac prices and the stock almost managed to turn positive. Another hour in the session and it probably would have…
I went into more depth about Apple in our new trading service, WinningWithOptions.com, as well as Palm (PALM, $12.16, down $0.84). I don’t care what Wall Street was expecting and although we have closed the Apple trade, this stock could still run higher. The new price cut by Apple will only increase demand (my guess is by as much as 50%) and lead to more iTune sales and eventually Mac sales. Apple is King.
With that, I should get back to a more normal writing schedule in the next few days. Real quick, for those of you who signed up for our WinningWithOptions.com trading service, the only email I have sent was a trade update from the FREE trades that were posted in the blog and the one I sent out by email on June 2nd. The way this works is like so.
Every Monday I will send an email before the market opens detailing our trade picks and profiling trades that we are considering. Today was the first issue. I will only be doing updates as needed and when there is one, you will get emailed. This information will also be posted in the Members Area, as will all posts made by me.
Most people are confused how this is going to work but I wanted to lay some ground work for you to follow. I know we are late getting the user names and passwords out to some of you and you will get them soon. I just wanted to ensure everybody that they haven’t “missed” anything and I feel stupid that this hasn’t happened. I’m not an IT guy but they tell me they are working on it.
So, if you missed this morning’s trade update, please send me an email and I will personally get that out to you tonight. Those IT guys are going to owe me dinner…
Also, I encourage you to keep reading the blog. Nothing will change, really, as I will still cover a lot of stocks and every now and then an option trade. If I am sending out a new trade I will mention it in the blog.
As far as the user name and password, once you get it, you will have access to the training videos which I will talk about once we get through this big push.
Thank you, everybody, who signed up to support the new trading service. The current trades we have going managed to hold their own today!
Rick Rouse
Rick@OptionsMentoring.com
Tags: Cisco Systems, Citigroup, DeVry, General Motors, Goldman Sachs, JPMorgan, Morgan Stanley, Travelers
Posted in Apple, Company Commentary, Financial Stocks, Market Analysis, Option Trades | No Comments »