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Friday, March 18th, 2011
9:00am (EST)
You knew the market would bounce back at some point following this week’s steep losses and yesterday was the bulls’ day to flex their muscles. Futures were pointing towards a strong open as the major indexes bounced back solidly for much of the day and those gains held as the market closed near its highs.
We went over key technical levels yesterday so let’s see where we are at.
The Dow was up 161 points, or 1.4%, and traded to a high of 11,800 before closing at 11,774. This was the EXACT number we said to watch for and we were looking for a close above this level. The low of 11,614 was at the open and higher than Thursday’s close for the Dow. Although the 11,800 level didn’t stick, it was encouraging to see much of yesterday’s gains hold.
The S&P 500 added 17 points, or 1.3%, to finish at 1,273. The index kissed 1,279 and we were looking for a close above 1,275. The low on Thursday was 1,261 so the bulls managed to hold 1,250 which is a pivotal level going into today’s trading. We would like to see a push towards 1,300 so watch all three of these numbers today if we do get extra volatility.
The Nasdaq gained nearly 20 points, or 0.7%, and closed at 2,636. Tech traded up to 2,660 but once again didn’t have the mustard to make a run past 2,700. We were looking for at least 2,650-2,675 on the close but Tech has lagged the market on up days and led the way lower on down days. This worries us a little but futures are pointing towards another leg higher to start today’s session.
There won’t be much in the way of economic news today and we mentioned that March options expire today. Earnings will also be a non-factor as the bears will try to hold down resistance. The bulls are getting good news on the Libya front as the United Nations (UN) declared a no fly zone last night for the country with possible military action. We have now learned as we head to press that Libyan’s FM has halted military operations in line with the UN no-fly decision and futures got another big push and took another leg higher.
As we head to press, Dow futures are up 124 points to 11,835 while the S&P futures are higher by 15 to 1,284. The Nasdaq futures are showing an 18 point pop and are at 2,244. We will be back in the afternoon with an update on Nike (NKE, $85.41, up $0.59) which missed earnings expectations after the bell last night and a look at where the markets stands heading into the weekend. (Shares of Nike are down $6 to under $80 in pre-market trading so lock in profits into weakness!).
We may also release a NEW TRADE if we can get good entry prices on a few names on our Watch List so stay close to your computer and check for updates at 10am or 11am.
Subscribers, check the Members Area for the current updates and for our fresh ideas. We have 12 candidates, yes 12, possible trades we are watching.
Back at 1…
Tags: Bear market strategies, bearish option trades, Nike earnings miss, NKE, straddle and strangle option trades
Posted in Earnings, Market Analysis | Comments Off
Wednesday, March 16th, 2011
2:00pm (EST)
The market is near its worst levels of the day and continues to trade off headline news which has been negative for much of the session. Economic news here at home has been uninspiring for the bulls as they continue to give up ground to the bears.
Before the bell, the Commerce Department reported Home construction plunged over 22% in February to 479,000 homes. It was the lowest level in nearly two years and the second-lowest on record in more than 50 years.
Elsewhere, the Labor Department said the Producer Price Index rose to 1.6% in February, which was double the rise from the previous month and the biggest increase since June 2009. Higher energy costs weighed on food prices as they soared nearly 4% which represented the biggest jump in over 35 years. Harsh winter freezes hurt harvesting in which sent fresh vegetable prices soaring and represented 70% of the increase.
And to no one’s surprise, gas prices also spiked in February as the national average price came in at $3.55/ gallon, up $0.40 from a month earlier.
As a result, the Dow is down 190 points to 11,664, while the S&P is off 20 points to 1,261. The Nasdaq is lower by 40 points to 2,627.
As far as “impact” earnings trades for today, we were looking at FedEx (FDX, $88.63, down $2.08) and Nike (NKE, $86.21, down $0.96) which report earnings on Thursday. We took a look at both stocks in our Members Area this morning but as far as playing the options – we will probably sit this round out.
There are other trades on our Watch List that we are warming up to without the risk of earnings but these two stocks will likely be on the move tomorrow. Subscribers, check for the updates.
Tags: Bear market strategies, bearish option trades, Nike earnings, NKE, NYSE: FDX, straddle and strangle option trades
Posted in Economic News, Market Analysis | Comments Off
Wednesday, December 22nd, 2010
9:05am (EST)
Keep on rocking us, baby.
Well, we aren’t superstitious, and we don’t get suspicious, and yes, the bulls are a friend of ours…
The Dow gained 55 points, or 0.5%, and settled at 11,533. The index hit a fresh two-year high of 11,549 and closed above the 11,500 level, finally, after 7 straight sessions of trading above it intra-day. We are expecting a run up to 11,700.
The S&P 500 added nearly 8 points, or 0.6%, and finished at 1,254. We said yesterday a break and close above 1,250 would be bullish. The index touched a high of 1,255 and we are looking for a run up to 1,275 by the end of next week.
The Nasdaq also came through for us as it broke 2,660 and closed at 2,667, up 18 points, or 0.7%. The index tapped 2,669 and is at its highest levels in 3 years and the bulls will now focus on a break above 2,700 which should be a breeze.
In earnings news, Nike (NKE, $92.30, up $2.03) beat the Street which we all knew would happen but they warned of lower profit margins in the quarters ahead and shares got whacked. We felt the company could say something disappointing as far as their outlook and we mentioned this in our training video that we released Sunday night that a bullish trade looked like “a setup”.
Nike posted earnings of $457 million, or $0.94 a share, versus $375 million, or $0.76 a share, in the year ago period. Revenue came in at $4.8 billion, up from $4.4 billion. Wall Street was looking for $0.88 a share, on sales of $4.8 billion.
The company’s CEO said “as supply and demand find a new normal in the recovering economy, our industry is going to experience margin pressure due to rising input costs”. That was enough to bring the bears out and they pushed shares down to $87, or 6% lower in after-hours trading last night.
As we head to press, futures are showing a flat open but are slightly positive.
Tags: Nike earnings, NKE
Posted in Earnings | Comments Off
Thursday, March 18th, 2010
12:30pm (EST)
Folks, we hit one out of the park today and we are smiling (no pun intended as you will see). We have been busy all morning updating the action in our Members Area and we have another trade on the tip of our tongue as we speak.
We have been talking about Nike (NKE, $75.10, up $4.22) in our Members Area all week and we thought we would give those of you who haven’t joined us a sneak peak. Here were our thoughts when we recommended a Nike call option trade in our 9am update yesterday morning:
“Action: Tiger is back and the company reports earnings after the bell today. It’s almost too good to be true and it just feels funny how all of this is coming together. In fact, it almost feels like the perfect “buy the rumor, sell the news” event.
We are going to be honest with you. This feels like a setup and we could get a baseball bat to the face on this trade if we are wrong. But we like it and the options are only 50 cents. A 10 contract trade is $500.
We recommended a Nike call option the last time out the company reported earnings which was back in November. That trade returned 173% for our subscribers and we are hoping this one doubles.
We doubt the stock moves 10%, or $7, on Thursday’s open but we do think a 5% move is a given. That should be plenty to make the April 75’s double.
If Nike misses, we still have 5 weeks before the options expire. Roll the dice. Use limit orders of up to 65-75 cents but try to get them cheaper at the open. If the calls open HIGHER than 75 cents, VOID the trade.” (END)
The calls we mention opened at 50 cents yesterday so we got even better prices than we anticipated. They closed for a 50% paper profit by Wednesday’s close but have exploded today and are currently trading at $1.85. We alerted our subscribers to close half of their position into strength but we can still ride the wave if Nike runs to $80.
We also have another trade we are profiling that we think has the chance to at least double so we released today’s update a little early. We are also close to shutting down another trade for a 50% profit so timing is crucial for current subscribers.
As we head to press, the Dow is up 7 points to 10,740 and is going for 8-in-a-row. The Nasdaq is down 2 to 2,386 while the S&P 500 is off 3 points to 1,162.
Tags: Nike call options, Nike earnings, NKE, NKE call options, option picks, option signals, options alerts, stock option picks, stock options trading
Posted in Hot Stocks, Market Commentary, Money Management | Comments Off
Thursday, March 18th, 2010
9:05am (EST)
The market continued its winning ways on Wednesday as the bulls celebrated St. Patrick’s Day with a bang. We mentioned yesterday the Dow was poised to test our near-term target of 10,800 and we almost hit it.
We got some good economic news that helped fuel yesterday’s rally. The Labor Department said the Producer Price Index (PPI) fell by a steeper-than-anticipated 0.6% in February as declining energy prices sparked the index’s sharpest drop-off in seven months.
As a result Dow finished higher for the seventh straight session with all three major indexes settling at new highs.
The Dow finished with a 48 point gain, or 0.5%, and closed at 10,733 after touching an 18-month high of 10,767. If we can break 10-8 then we could easily see 11,000 come into play, quickly.
Not to be outdone, the S&P 500 added 7 points, or 0.6%, to finish at 1,166. Our target of 1,175 will now come into play and then possibly a push to 1,200.
The Nasdaq also notched another 52-week high and actually kissed our 2,400 target. The index settled at 2,389, up 11 points (0.5%) after touching the 2,400 level for the first time since September 2008.
In earnings news, Nike (NKE, $70.88, up $0.50) is getting a lift this morning after the company reporting earnings of $1.01 a share for the quarter, versus $0.99 a share in the same period last year. Wall Street was expecting the company to report a profit of $0.89 a share.
Sales came in at $4.7 billion versus $4.4 billion last year. Analysts were looking for sales of $4.6 billion. Gross margins increased to 46% from 43% in the same period.
There were a lot of nervous traders on Wall Street who were worried about the quarter and future orders. Those fears were put to bed after Nike said worldwide future orders for Nike brand athletic footwear and apparel, scheduled for delivery from March through July, was $7 billion, or 9% higher than orders in the year-earlier period.
Wall Street considers the futures an indicator of future sales and this is why we are seeing the continued strength in the stock ahead of the bell.
Shares of Nike jumped in after-hours trading last night to over $73 and the gains have held as the stock is showing a pre-market bid of $74+. We were all over this trade like moths on a campfire and our subscribers are easily looking at triple-digit profits on a call option trade we profiled yesterday. In fact, it could turn out to be our biggest trade of the year so far once we close it.
As we head to press, the Dow futures are up 16 point to 10,679 while the S&P 500 futures are showing a 1 point gain and are at 1,162. The Nasdaq 100 futures are showing a 3 point pop to 1,937. Current subscribers, check the Members Area for the hot details.
Tags: Nike, NKE, option picks, option signals, options trading
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
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Nike (NKE) Call Options Hit 235% Return
Thursday, March 18th, 2010
12:30pm (EST)
Folks, we hit one out of the park today and we are smiling (no pun intended as you will see). We have been busy all morning updating the action in our Members Area and we have another trade on the tip of our tongue as we speak.
We have been talking about Nike (NKE, $75.10, up $4.22) in our Members Area all week and we thought we would give those of you who haven’t joined us a sneak peak. Here were our thoughts when we recommended a Nike call option trade in our 9am update yesterday morning:
“Action: Tiger is back and the company reports earnings after the bell today. It’s almost too good to be true and it just feels funny how all of this is coming together. In fact, it almost feels like the perfect “buy the rumor, sell the news” event.
We are going to be honest with you. This feels like a setup and we could get a baseball bat to the face on this trade if we are wrong. But we like it and the options are only 50 cents. A 10 contract trade is $500.
We recommended a Nike call option the last time out the company reported earnings which was back in November. That trade returned 173% for our subscribers and we are hoping this one doubles.
We doubt the stock moves 10%, or $7, on Thursday’s open but we do think a 5% move is a given. That should be plenty to make the April 75’s double.
If Nike misses, we still have 5 weeks before the options expire. Roll the dice. Use limit orders of up to 65-75 cents but try to get them cheaper at the open. If the calls open HIGHER than 75 cents, VOID the trade.” (END)
The calls we mention opened at 50 cents yesterday so we got even better prices than we anticipated. They closed for a 50% paper profit by Wednesday’s close but have exploded today and are currently trading at $1.85. We alerted our subscribers to close half of their position into strength but we can still ride the wave if Nike runs to $80.
We also have another trade we are profiling that we think has the chance to at least double so we released today’s update a little early. We are also close to shutting down another trade for a 50% profit so timing is crucial for current subscribers.
As we head to press, the Dow is up 7 points to 10,740 and is going for 8-in-a-row. The Nasdaq is down 2 to 2,386 while the S&P 500 is off 3 points to 1,162.
Tags: Nike call options, Nike earnings, NKE, NKE call options, option picks, option signals, options alerts, stock option picks, stock options trading
Posted in Hot Stocks, Market Commentary, Money Management | Comments Off