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Wednesday, May 12th, 2010
1:00pm (EST)
The bulls are pushing the market higher after a rosy report from the government said exports (up 3.2%) reached a 15-month high in March. The talking heads are reminding us gold continues to hit new highs and the euro continues to stink which is helping gold reach those record highs.
At midday, the Dow is showing a triple-digit gain of 107 points, or 1%, and is at 10,855. The S&P 500 is at 1,166, up 10 points, or 0.9%. The Nasdaq is flexing its muscles as it is higher by 34 points, or 1.5%, and is currently at 2,410.
Financial shares are mixed with Morgan Stanley (MS, $27.58, down $0.80) leading the losers lower. Shares are taking a hit after reports surfaced that the investment bank is facing an investigation into its dealings in mortgage securities. Federal prosecutors could bring charges any day.
Baidu (BIDU, $76.55, up $5.13) is at lifetime highs after a 10-for-1 stock-split. We normally don’t trade options on stocks that are over $150+ because the premiums are priced pretty high and we normally like to keep our trades under $2 per contract.
Of course, there are triple-digit strike prices under $2 but often times they are so far out-of-the-money that the stock would need to make a massive move which can and does happen. We have traded some of the higher priced premiums in the past but not on a $700 stock.
We are more comfortable trading options on stocks under $100 and now that Baidu has granted our wishes with a stock-split we can add it to our Watch List as a possible trade down the road. Splits are usually bullish as shares tend to gap higher afterwards.
Our Watch list continues to grow as we expect the market to fade at the close today. While today’s action is nice if you are a bull, we still think the market heads lower from here. Next week is option expiration week which will only add to the volatility.
Subscribers, check for the updates and a NEW TRADE inside the MEMBERS AREA, now!
Tags: Baidu stock split, Morgan Stanley, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Market Commentary, Trading Psychology, Watch Lists | Comments Off
Monday, February 8th, 2010
9:10am (EST)
Futures are trading slightly higher this morning as the market looks to end a four-week losing streak. There is no economic news out today so the market will try to rally off earnings and enthusiasm. In fact, it is a relatively quiet week in terms of economic reports except the weekly unemployment report which is due out Thursday.
Hasbro (HAS, $33.30, up $2.50) is up 9% in pre-market trading after reporting a profit of $166 million, or $1.09 a share, versus of $94 million, or $0.62 a share, in the year-ago quarter. Wall Street has pegged the company to earn 81 cents a share.
The fourth quarter is big for toy makers since it contains the holiday period and can make up to half of the quarter’s sales. Hasbro said revenue climbed to $1.38 billion from $1.23 billion, topping Wall Street’s estimate of $1.34 billion.
Home Depot (HD, $27.98) got an upgrade to ”Overweight” from “Equal Weight” from Morgan Stanley (MS, $27.26) as they believe Home Depot’s realignment has positioned them well to benefit from a housing recovery. Morgan gave the stock a $35 price target.
As we head to press, Dow futures are up 18 to 9,959 while the S&P 500 futures are higher by 3 to 1,063. The Nasdaq 100 futures are off by a point and are at 1,746.
Tags: HAS, Hasbro, hd, Home Depot, Morgan Stanley, MS, option picks, option signals, options alerts, stock options trading
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, October 21st, 2009
9:15am (EST)
Futures are pointing towards a lower opening on Wall Street this morning as 3Q earnings reports once again set the market’s mood. There are quite a few companies that continue to post better-than-expected results but one thing that is worrisome is that the market is not making HUGE moves. One thing we haven’t seen is the big 300 and 400 point moves the Dow is capable of making and earnings have been super.
Our near-term targets remain 2,275 on the Nasdaq and 1,175 for the S&P 500 and 10,400 for the Dow. However, we are getting a little choppy up here and 3Q earnings have been coming in better-than expected. Perhaps the market has already priced in these super earnings but one thing for certain is that we are entering a crucial phase for the market over the next few weeks.
Yahoo (YHOO, $17.17), Morgan Stanley (MS, $32.52) and Wells Fargo (WFC, $30.46) all reported better-than-expected earnings yet futures are pointing towards a lower open? Apple (AAPL, $198.76), Google (GOOG, $551.72) and Intel (INTC, $20.18) reported monster quarters but we are not seeing the sizzle from their solid earnings reports.
As we head to press, Dow futures are lower by 38, to 9,962. S&P 500 500 futures are off by 4 to 1,083, while the Nasdaq 100 futures are off 7, to 1,751. Subscribers can check the Members Area for the current trade updates…
Tags: Google, mentoring stocks, momentum options, momentum plays, Morgan Stanley, option trade picks, options mentoring, options track record, options trading blog, Wells Fargo, Yahoo
Posted in Earnings, Financial Stocks, Market Commentary, Option Trades | 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
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 »
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Morgan Stanley (MS) Hearing Footsteps
Wednesday, May 12th, 2010
1:00pm (EST)
The bulls are pushing the market higher after a rosy report from the government said exports (up 3.2%) reached a 15-month high in March. The talking heads are reminding us gold continues to hit new highs and the euro continues to stink which is helping gold reach those record highs.
At midday, the Dow is showing a triple-digit gain of 107 points, or 1%, and is at 10,855. The S&P 500 is at 1,166, up 10 points, or 0.9%. The Nasdaq is flexing its muscles as it is higher by 34 points, or 1.5%, and is currently at 2,410.
Financial shares are mixed with Morgan Stanley (MS, $27.58, down $0.80) leading the losers lower. Shares are taking a hit after reports surfaced that the investment bank is facing an investigation into its dealings in mortgage securities. Federal prosecutors could bring charges any day.
Baidu (BIDU, $76.55, up $5.13) is at lifetime highs after a 10-for-1 stock-split. We normally don’t trade options on stocks that are over $150+ because the premiums are priced pretty high and we normally like to keep our trades under $2 per contract.
Of course, there are triple-digit strike prices under $2 but often times they are so far out-of-the-money that the stock would need to make a massive move which can and does happen. We have traded some of the higher priced premiums in the past but not on a $700 stock.
We are more comfortable trading options on stocks under $100 and now that Baidu has granted our wishes with a stock-split we can add it to our Watch List as a possible trade down the road. Splits are usually bullish as shares tend to gap higher afterwards.
Our Watch list continues to grow as we expect the market to fade at the close today. While today’s action is nice if you are a bull, we still think the market heads lower from here. Next week is option expiration week which will only add to the volatility.
Subscribers, check for the updates and a NEW TRADE inside the MEMBERS AREA, now!
Tags: Baidu stock split, Morgan Stanley, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Market Commentary, Trading Psychology, Watch Lists | Comments Off