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Thursday, September 15th, 2011
9:10am (EST)
The bulls kept their momentum for the week to win their third straight session as the bears retreated to higher ground on Wednesday. After a choppy start, a flood of buy orders stormed Wall Street which helped push the major averages well into positive territory and past key support levels.
Some of the bloom came off the rose in the final hour of trading, but the bulls still scored solid gains on heavy short covering. We mentioned yesterday that global news would dominate the headlines for a few weeks but money seems to be moving back into stocks after improved sentiment on the financial stability of Greece.
It’s been amazing to watch the day-to-day sentiment concerning the debate on whether Greece will default or not. Yesterday, it was France and Germany that lead the call to ensure Greece will carry out all proposals to meet their budget plans. We aren’t sure what the final outcome will be on Greece but it is apparent the eurozone doesn’t want a collapse which would certainly cause a domino effect.
Elsewhere, two of France’s banks had their ratings downgraded by guess who? Yeap, our old pal Moody’s (MCO, $31.65, up $1.18) is back after feeling left out and tried to ruin the bulls’ party. Rumors had already been floating for weeks that this was coming so it hardly came as a surprise although it did weigh on futures Tuesday night.
Didn’t matter. The bulls still had a field day.
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If you are not a subscriber but would like to read more click here. We will be releasing Trade Alerts for our Weekly Wrap shortly and there is another trade we are looking to add to our Daily publication as well. Sign-up now and receive access instantly!
Tags: bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, MCO, momentum, momentum options, Moody’s stock, Nasdaq, option mentoring, option trading course, S&P 500, VIX
Posted in Market Analysis, Market Commentary, VIX | Comments Off
Thursday, March 10th, 2011
1:20pm (EST)
The bears have used a bevy of negative news to push the market down to support levels once again. Oil, China, Spain, and unemployment claims are the major negative headlines that led to a big gap down at the open which is where we have spent much of today’s session.
Oil is down $2 to $102 but the geopolitical concerns in Libya have gotten more serious. Moody’s (MCO, $31.93, down $0.46) downgraded Spain’s debt and issued a negative outlook. China’s posted its largest trade deficit in 7 years at $7 billion. And finally, here in the U.S., initial weekly jobless claims were greater-than-expected at 397,000 while the trade deficit for January increased to $46.3 billion from $40.3 billion in the prior month.
As result, all three indexes are right at support and at crucial levels of a trend change.
The Dow is off 154 points to 12,058 and has touched a low of 11,988. We have been mentioning support at 12,000 and that got stretched but the bulls have to hold this level going into the close.
The S&P is down 17 points and is at 1,303 after kissing a low of 1,295. The bulls are trying to hold 1,300 but a close below here could lead to 1,275 and then 1,250.
The Nasdaq is getting whacked for 36 points and is at 2,715. The index has traded to a low of 2,695. The bulls will be trying to hold 2,700 into the close.
Although today’s sell-off looks nasty, there is a good chance the bulls hold these levels.
Sometimes it’s easy to imagine the future, profiting from it is a different story.
We do have some good news for you though and some of our subscribers are having a good day on the Green Mountain Coffee Roasters (GMCR, $58.00, up $60.81, up $17.17) news. The company has teamed up with Starbucks (SBUX, $37.77, up $3.23) and will offer a K-cup to coffee lovers.
From February 15, 2011 (Quotes from that day):
“We want to talk about Green Mountain Coffee Roasters (GMCR, $46.35, up $2.89) this morning because the stock has been a favorite of ours and a regular candidate on our Watch List. We have recommended options on them in the past. The weird thing is that Sunday night we saw the Starbucks (SBUX, $33.58, up $0.23) commercial promoting their instant (single-serve) coffee and “instantly” thought that a deal could be brewing between the two companies, quickly. In fact, we even wrote up a call option trade on Green Mountain at 10:30am yesterday that failed to make it to press because we wanted to close out a few trades before recommending new ones.
The call options we were following were at 28 cents and volume was at 60 contracts. Before the closing bell, volume had swelled to nearly 3,000 contracts. We aren’t sure if there is still a trade here but we investigate “the situation”. All signs are pointing towards Green Mountain making a run to double nickels ($55).” (END)
Inside our Members Area on that same day, we profiled the March 50 calls (GMCR110319C00050000, $11.00, up $10.60) which were at $1.40 after jumping $1 the day before. As you can see, these same options fell back down to 40 cents but are up over 3,500%.
We will be watching the close today for clues on where this market is headed but we are expecting support to hold with a slight bounce higher into the close.
Tags: MCO, Moody's, Naddaq: GMCR, SBUX, support levels
Posted in Hot Stocks, Market Analysis | Comments Off
Wednesday, December 15th, 2010
9:00am (EST)
All eyes were on the Fed Tuesday afternoon as the bulls were trying to extend their rally while the bears were hoping for a miracle. Like a broken record, the Federal Open Market Committee (FOMC) once again said it would maintain interest rates at their current record lows of 0%-0.25% after saying the “economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment.”
The market held its gains for a little while after the news but started to give them back in the final hour as the bulls and bears debated other meeting minutes. The central bankers have to be careful in their wording, obviously, because they know the world is watching QE2 closely.
The Dow added 48 points, or 0.4%, to finish at 11,476. The index managed to trade to a high of 11,514 and our near-term target is 11,600-11,700 by yearend. We believe a run to 12,000 is in the cards but it probably won’t happen until 2011. Support is at 11,200 and 11,000.
The S&P 500 traded to a peak of 1,246 but settled with a slim 1 point gain to 1,241. We are looking for a close above 1,250 which is current resistance before a run up to 1,275-1,300. Support remains 1,220 and 1,200.
The Nasdaq chipped in with a 2 point win and closed at 2,627 after touching 2,636. Both the Nasdaq and S&P 500 fell briefly into the red in the afternoon yesterday, before rebounding, and we are looking for a close above 2,660 for Tech. If the index can reach this level, then we have a shot at 3,000. Support is at 2,550-2,500.
Futures are pointing towards a lower open this morning and we knew last night when we saw the dollar rising and the euro tanking, the market would struggle at the open today. Moody’s (MCO, $27.33, up $0.08) decided to “warn” the market that it might lower Spain’s credit rating. Really? Long-time readers know how much we hate Moody’s because the rating agency is always late to the party and this is something the market already knew.
As we head to press, Dow futures are lower by 25 points to 11,396; S&P 500 futures are down 3 points to 1,233; the Nasdaq 100 futures are off by 6 points to 2,208. We closed two trades yesterday for gains of 140% and 170%, respectively, and we are looking for more. Subscribers, check the Members Area for the latest trade updates.
Tags: bear market, binary options, bull market, call option, how to trade options, MCO, Momentum stocks, Moody's, NYSE: MCO, option investments, option picks, option trading, options mentoring, options trading service, put option, stock market, stock market options
Posted in Market Analysis, Market Commentary | Comments Off
Wednesday, June 2nd, 2010
12:50pm (EST)
Momentum.
We often hear the word in sports, sometimes in gambling, and maybe in war.
When it comes to the stock market, we talk about it all the time on our website because it is important to know which side has it. If you are a bull then you want to the market to rise and you tend to favor call options on stocks. If you are a bear then you are hoping the market will trend lower and you favor buying put options. (We are both bullish and bearish at times).
It is not a big secret but knowing which way the market is headed and knowing which side has momentum is crucial in determining if you should buy call or put options. It is hard to make money when the market is setting new highs and you have a rack of put options in your account. Same thing if the market is headed down and you own call options.
Since options are time sensitive you have to look forward in your trading and try to figure out where the market will be by the time the options you are looking at are set to expire. You also have to give yourself enough time for the trade to work in your favor… (END)
We thought we would take a little time this afternoon to talk about the release of our upcoming trading manual, How to Trade Options on Momentum Stocks.
Folks, we are excited as ever to be finally talking about the upcoming release and we thought we would provide a little preview in what’s inside.
A heads-up for you newbie’s. With June options expiring in 16 days we wanted to warn new option traders these are not the best options to buy right now. Yes, the returns will be fatter than the July options if you are right about your picks but going out to the July options will buy you time and insurance.
As far as the market, it looks like the bulls are making their rally cry that we talked about in the Weekly Wrap on Monday. We have been expecting one last push and we are hoping this is it. Timing the market is never an easy thing to do but without risk there is no reward.
The Dow is currently up 117 points, or 1.2%, to 10,140 while the S&P 500 is higher by 15 points, or 1.4%, to 1,085. The Nasdaq is enjoying a 32 point pop, or 1.4%, and was last seen at 2,253.
Mr. Buffett and Moody’s (MCO, $19.83, up $0.53) bigwigs are on the hill testifying in front of the Financial Crisis Inquiry Commission (FCIC) as we go to press. The suit-and-ties are trying to get to the bottom of what role or non-role the rating agencies played in the meltdown from the housing bubble.
Hello. We have been bashing Moody’s for years. The stock might be up 3% today but we think this one is heading to new 52-week lows which will happen once $18.50 falls.
We see today’s bounce as a great opportunity to add 2 more NEW TRADES. We are posting a little early because we like the current prices the options are trading at. Subscribers, check the Members Area for the updates.
Tags: FCIC, Financial Crisis Inquiry Commission, MCO, Momentum stocks, stock option picks
Posted in Company Commentary, Market Analysis, Market Commentary, Trading Psychology | Comments Off
Thursday, May 27th, 2010
9:00am (EST)
The bulls put on a good show for much of yesterday’s session, but the lack of follow-through has been apparent for a few weeks now. Despite some robust economic news, the bears were able to erase all of the gains their counterparts had made and scored a huge win after the euro fell in late trading.
We mentioned yesterday in our 1pm update we didn’t think the rally would hold, and when word spread that China was reviewing its holdings of European bonds, well, things turned south. Folks, if China starts losing faith in the euro and starts selling some of its Euro bond holdings then we could see new lows for the currency which is already at a 4-year bottom.
As a result, the Dow gave back a triple-digit gain of 135 points to finish Wednesday at 9,974, a loss of 69 points, or 0.7%. The index had only closed below 10,000 once this year which was back on February 8th when it closed at 9,908. Since then, it has traded below that psychological level a number of times but has managed to close above it. Not yesterday.
The S&P 500 fell a half-dozen points, or 0.6%, to settle at 1,067 while the Nasdaq gave back 15 points, or 0.7%, to finish at 2,195. It was also the first time since mid-February that Tech has closed beneath the 2,200 level. This is the exact target we told you to watch for and yesterday’s close confirmed our beliefs that the Nasdaq will take out the 2,000 level.
On a positive note, we thought we would roll out the red carpet for Apple (AAPL, $244.11, down $1.11) this morning after the company passed Microsoft (MSFT, $25.01, down $1.06) as the #1 “Tech” company as far as market cap.
This is a rather important event, but even more glaring is the hidden message Microsoft’s stock price is telling us. Shares have folded like a cheap lawn chair since last week after basing in the $28-$31 area since mid-February. The next level of support for the stock is at $23 and if that is broken then Microsoft could be headed to $20.
Apollo Group (APOL, $53.40, down $1.66) and Moody’s (MCO, $20.88, down $0.36) are on the move this morning and were two recent trades that we recommended.
We took a 16% hit on Apollo after the parameters of the trade were broken but we have been warning our subscribers to stay away from this dog for years. Justice might not have been served on our recommended option trade, but the 52-week low of $52.20 looks like it will fall today.
We didn’t like the volatility when shares shot up to $60 last Thursday on some bogus rumor so we got our subscribers out. However, we should have listened to our gut as the stock looks poised to fall below $50 today.
Moody’s is another joke of a company that we have been all over like grass on dirt. Our subscribers took advantage of the commentary inside the Members Area and were able to turn a put option trade into an 80% winner. We were telling readers to take “half’ position profits in this choppy market, and we ran out of halves as we closed this trade last Tuesday. Shares are poised to sink below $20 this morning and we have said this stock was headed to the teens.
We have been talking about the “faded rallies,” and as we head to press this morning futures are showing a huge open. It’s a busy Thursday, but the Dow futures are up a whopping 154 points to 10,075 this morning which means we are going to have a HUGE open. The Dow futures were up over 200 points but gave a little back after jobless claims came in higher than expected.
We have loaded up our Watch List to take advantage of another faded rally this morning.
Tags: AAPL, APOL, Apollo Group, Apple, MCO, Microsoft, Moody's, MSFT, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off
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The Tide is High, Bulls Holding On
Thursday, September 15th, 2011
9:10am (EST)
The bulls kept their momentum for the week to win their third straight session as the bears retreated to higher ground on Wednesday. After a choppy start, a flood of buy orders stormed Wall Street which helped push the major averages well into positive territory and past key support levels.
Some of the bloom came off the rose in the final hour of trading, but the bulls still scored solid gains on heavy short covering. We mentioned yesterday that global news would dominate the headlines for a few weeks but money seems to be moving back into stocks after improved sentiment on the financial stability of Greece.
It’s been amazing to watch the day-to-day sentiment concerning the debate on whether Greece will default or not. Yesterday, it was France and Germany that lead the call to ensure Greece will carry out all proposals to meet their budget plans. We aren’t sure what the final outcome will be on Greece but it is apparent the eurozone doesn’t want a collapse which would certainly cause a domino effect.
Elsewhere, two of France’s banks had their ratings downgraded by guess who? Yeap, our old pal Moody’s (MCO, $31.65, up $1.18) is back after feeling left out and tried to ruin the bulls’ party. Rumors had already been floating for weeks that this was coming so it hardly came as a surprise although it did weigh on futures Tuesday night.
Didn’t matter. The bulls still had a field day.
************************************
If you are not a subscriber but would like to read more click here. We will be releasing Trade Alerts for our Weekly Wrap shortly and there is another trade we are looking to add to our Daily publication as well. Sign-up now and receive access instantly!
Tags: bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, MCO, momentum, momentum options, Moody’s stock, Nasdaq, option mentoring, option trading course, S&P 500, VIX
Posted in Market Analysis, Market Commentary, VIX | Comments Off