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Monday, March 7th, 2011
1:05pm (EST)
The market opened slightly higher and was showing a little momentum as oil came off its highs of the session. There was news that Libyan President Gadhafi was looking to negotiate a deal with rebel forces for his safe departure from the country but those rumors haven’t been confirmed. This gave the bulls some hope the crisis could be resolved but the bears are attacking as the market is now trading well off its highs and is negative territory as we head into the second half of trading.
In Merger & Acquisition (M&A) news, Western Digital (WDC, $33.56, up $3.55) is up over 12% after the company announced it was acquiring Hitachi’s hard-disk drive business for nearly $4.3 billion in cash and stock. Normally, when a company buys out another, the acquiring company’s stock price will head lower but this deal is a little different. Western Digital will pay $3.5 billion in cash but is giving Hitachi 25 million of its shares, or 10%.
We did a big write-up in our Weekly Wrap on Western Digital in mid-January
“As for Western Digital, its HDDs (hard disk drive) are used in desktop computers, notebook computers, enterprise storage products, servers, workstations, video surveillance equipment, networking products, digital video recorders, satellite and cable set-top boxes, and external storage appliances. It also offers hard drives as stand-alone storage products for personal data backup. The iMac uses its HDD. And Mac sales are projected to double. The company also makes SSDs (solid state drives).
Although HDDs may eventually get replaced by SSDs, that won’t happen for at least several years. SSDs are primarily used in small devices such as the iPhone, iPod, and iPad. The Macbook Air is currently one of the few laptops using SSDs. Other laptops and desktops still use HDDs. Price for HDDs is still cheaper than SSDs of the equivalent memory and storage. And that will stay that way for some time with prices for both dropping. Storage demand is expected to stay strong with the increasing need for servers to store all the content being shared or steamed over the internet. PC demand is also expected to grow, too.
The technical picture also shows that a strong move upward may be developing.” (END)
The deal will give Western Digital’s a market share of 50% for HDD’s and pad its lead as top dog. Seagate Technologies (STX, $13.85, up $1.41) is second and has 30% covered, so, in essence, these two companies will own over three-quarters of the market pie. Don’t be surprised if some anti-trust issues pop-up.
As we head to press, the Dow is lower by 78 points to 12,091 while the S&P 500 is off by 12 points to 1,309. The Nasdaq is showing the most weakness and is down 49 points to 2,735.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, WDC, winning option trades
Posted in Hot Stocks, Mergers and Acquisitions | Comments Off
Monday, March 7th, 2011
9:05am (EST)
The market made some wild swings last week as volatility picked up along with geopolitical concerns. The bulls started the week off with a victory but the bears floored them on Tuesday as the indexes fell 1.5% on average. The bulls made most of those losses back on Wednesday and Thursday which all led to Friday’s unemployment numbers which were fantastic.
Although there was a slight disappointment for a higher print for additional jobs, the market held up well and was basically flat until oil became a concern. Oil popped to a high of $105, up $3, which worried the heck out or a lot of investors who ran for cover before the weekend. Wall Street seemed nervous on how much higher oil prices would affect the economic recovery but we were more interested in watching support which held like a champ.
In fact, we said the final hour of trading was going to be interesting and the bulls made a nice comeback to score a weekly win, believe it or not.
The Dow was down 178 points at one point but staged a furious comeback as time ran down to the closing bell. We liked the effort going into the weekend. The index hit a low of 12,079 before rebounding and finishing at 12,170, down 88 points. For the week, the blue-chips gained 39 points, 0.3%, and we loved the close above 12,100 which we were hoping for on Friday. Resistance is at 12,200 and 12,350 this week.
The S&P 500 fell 10 points and settled at 1,321 after trading to a low of 1,312. We were looking for 1,325 to hold and then 1,300 but the bulls got half of the losses back before the close. For the week, the index added a point, or 0.1%, and needs to clear 1,325 before it can make an assault on 1,350.
The Nasdaq finished Friday at 2,784 (down 14 points) but had the smallest losses of the Big 3 indexes. Tech traded to a low of 2,768 and had trouble with the 2,800 level last week but 2,750 held. There is additional support at 2,700 but we have targeted Nasdaq 3,000 on a break above 2,850. For the week, the Nasdaq advanced 3 points, or 0.1%.
It is important that we talk about the downside though a little further. The turmoil and unrest in the Middle East got a little more serious as those loyal to Libyan leader Moammar Qadhafi battled rebels throughout the weekend. Some of the battles are taking place in the oil-rich eastern region of the country and the rebels have vowed victory or death. It’s that simple, and it comes down to Qaddafi and how far he is willing to push the envelope against his own people and how long those loyal to him remain that way. It also comes down to money, which is being choked, but Qaddafi still has enough to pay renegades and order air strikes on the rebels.
We also have to worry about the upcoming demonstrations and chaos which could rock Saudi Arabia this week. A “day of rage” is scheduled to take place there on Friday. These geopolitical events could weigh on the market and if oil continues to push higher we may have seen the market highs for the first half of the year as this could play out for a few months. If it weren’t for higher oil and a possible civil war in Libya, we would be 100% confident the bulls could rally the Dow to 13,000 by the end of April. But that is not the case.
The economic news had been pouring in at an incredibly good pace and there is a chance that higher oil prices can be absorbed by consumers who have paid off debt and saved for the last two years. However, right now there is an inverse relationship going on between the market and oil and it doesn’t appear like this is going to change anytime soon unless Qaddafi steps down.
The bottom line is watch Dow 12,000 and S&P 1,300. If these levels crack and the indexes close below these levels, then the bull market could be turning into a bear market. The good news is we love playing the downside and you will too. Remember, you can make just as much money on put options (bearish) as you can call options (bullish) so be prepared because it will be an easy read.
Despite the chaos, futures are slightly higher this morning despite oil adding another $2. Dow futures are higher by 14 points to 12,168 while the S&P 500 futures are up a half-point to 1,320. The Nasdaq 100 futures are showing a 7 point pop and are at 2,367.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary | Comments Off
Friday, March 4th, 2011
1:00pm (EST)
We were hoping for a better outcome for the bulls but the way futures were acting, we had a feeling today could be flat or down. We said yesterday we would be happy if the market held at current levels following this morning’s unemployment report but it looks like we are headed for support again.
The one thing we keep mentioning is the current “trading range” and we were hoping for a breakout today. This didn’t happen but we are pleased to see support holding to a degree.
The Dow is down by 164 points to 12,092. We were looking for 12,200 to hold but we also realize 12,000 could come into play again. We would do back flips over the weekend if the index can close over 12,100.
The S&P 500 is lower by 17 points to 1,314 and we were looking for 1,325 to hold. There is additional support at 1,300 but it would be nice to see 1,310 hold.
The Nasdaq is off by 28 points to 2,770. We are watching the 2,750 level as key support but 2,700 could come into play if the down drift gets worse into the closing bell. The index has traded to a low of 2,768.
The good news is that the uptrend is still intact but the market will especially react to oil next week as economic news will be light. The talking heads and pros are telling you to take your chips off the table but they have been wrong all year. But there is risk, weekends are always a risk.
Earnings are still winding down from 4Q and year-end results so oil takes center stage once again. Today, black gold is up another $2 to $104 and appears it is going to push $105. If $110 comes into play next week, things could get shaky.
We are living in a fast-paced world so things could get ugly this weekend or the sun will shine early and peace will prevail in Libya. If that were to happen, oil would fall back to $90 and the market will zoom. If we stay in a trading range for another week that would be okay because we are expecting a huge breakout once the tensions ease in the Middle East.
Before we go we want to take a moment to talk about the Weekly Wrap publication which is gaining momentum and getting a lot of attention and coverage. We have hired a couple of powerful writers and they have nailed a number of great stocks since August. Our Covered Call portfolio for the Weekly Wrap is off to a sweet start. One stock we talk about is Spreadtrum Communications (SPRD, $22.89, up $1.27) which we profiled on February 6. Shares are currently up 6% but have traded to a high of $24.20 today.
Here were some of our thoughts a month ago:
“The company, based in Shanghai, China, is one of the leading designer and provider of baseband semiconductors and RF processor solutions for the wireless communications market. With wireless communications surging in China, the company is expected to do well. Sales predictions for smartphones and tables in 2011 are expected to increase by 22% and 262%, respectively, according to one study. Basebands allow cell phones to send massive amounts of data at high speeds from the phone to the cell tower.” (END)
We included some charts and graphs and had this to say about the stock:
“The graphs and the year-over-year chart seem to predict that they will even meet or beat analysts’ inflated earnings expectations. The quarter-over-quarter chart draws a little concern.
With earnings 25 days away, using their slope and expected earnings meet, we would say shares still have more room to run and could hit $30 over the next six months.” (END)
The company reported earnings today which beat expectations.
We are on track to make 7% in a month if this stock is “called away” from us but we hope we can continue to write calls on it. Our Weekly Wrap finds stocks that are undervalued, or “cheap”, or ones that have momentum and is designed for investors who like a little safety when playing options. Folks, 7% might not sound like much in a month but if you earn 7%-8% a month for a year, you will do extremely well.
We also want to point out this would have been a GREAT earnings trade for those of you who have purchased our option trading course, How to Trade Options on Momentum Stocks. We have done numerous videos on how to do an “earnings option trade” and these types of plays can make you 100% or more in a day…if you a right.
In our trading manual and videos, we show you how to research these types of trades and how to find them. We also show you how to do the math and figure out how much you can make or lose on a trade.
Based on our Weekly Wrap information, you could have bought the Spreadtrum Communications March 24 calls (SPRD110319C00024000, $0.60, flat) yesterday for 60 cents and sold them at the open this morning for $1.20. These are risky strategies of course because you really have to be quick with your trading but you also could have gone out to the April options. There may still be a trade there and it is one we will examine over the weekend for our current subscribers.
We bring this all up because we have a lot of new subscribers and we really want you to have a copy of our option trading manual and access to our ongoing, monthly videos. The option course is priced at $599 but will be included with any 1-year subscription you purchase and is shipped at no charge directly to your doorstep.
We have the cheapest and easiest to understand option trading course on the internet and it is getting rave reviews. It is helping people find their own triple-digit trades and the proof is in the pudding (and our Track Records).
We do not advertize this deal but we continue to get requests for it. We have just printed a fresh batch of copies for the course which includes our Momentum Stocks Watch List. This manual covers dozens of sectors and profiles over 600 companies and what moves these stocks.
Both are great values and we hope you take us up on our offer.
We will be back Sunday night but we still feel we are going to get one more big push to the upside as long as support holds. The final hour of trading should be exciting!
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Oil, Option Trades | Comments Off
Friday, March 4th, 2011
9:00am (EST)
Yesterday’s numbers real quick.
The Dow was up 191 points and finished at 12,258. The S&P finished at 1,331, up over 22 points while the Nasdaq closed higher by 50 points to 2,798 and broke thru the 2,800 level intra-day. Economic news was incredible as the bulls went 3-for-3 on the economic front but it all came down to the job numbers.
Exactly 30 minutes ago this morning the bulls got what they wanted. Nonfarm payrolls came in at 192,000 while the unemployment rate came in at 8.9%.
We have been planning for a fantastic jobs report which is why we kept our cool this week and futures got a pop after the report. The Dow futures doubled when the news was released going from 20+ to over 40+ but are currently up 10 points to 12,249. The S&P and Nasdaq 100 futures are down a point.
We were guessing the unemployment rate would come in at 9% and though some may question 8.9%, the bulls will take it. The 192,000 number was a little short of the 196,000 that had been expected but private payrolls increased by 222,000 versus expectations for 200,000.
We spent much of last night adding trades to our Watch List and we might make one (or two) official this morning if we can get good entry prices. If we do, we will send out a Trade Alert.
Subscribers, check the Members Area for the current updates and possible new trades.
Tags: best option trader, call options, momentum options, Momentum stocks, nonfarm payrolls., option signals, option trading, options broker, options mentoring, options newsletter, put options, unemployment figures, winning option trades
Posted in Economic News, Market Commentary | Comments Off
Thursday, March 3rd, 2011
12:45pm (EST)
No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation – Robert Rhea, Economist
If you are an option trader then you know what our opening statement means. After holding support for the past two weeks, the bulls are on a vengeance and have taken the bears as prisoners as the market tries to break out of its recent trading range.
The big catalysts pushing the market higher today is oil and jobs. Yesterday, our morning headline was “Will Jobs Picture Trump Oil Concerns?” and we used it because it was the only thing that might offset worries on higher oil prices. Although we have mentioned the market would trade in tandem with oil, we knew the supply concerns were getting a little overblown.
What we have been counting on was a better-than-expected jobs outlook this week and so far we have gotten it. Friday’s nonfarm payroll numbers and the unemployment rate will be the main numbers the market will scrutinize but today’s news that first-time claims for unemployment benefits fell to 368,000 was just as big. The pencil pushers were looking for a print of 400,000 but this was the third straight week claims came in below 400K and is the lowest level since May 2008.
In other economic news, the ISM Services Index for February came in at 59.7 versus expectations for 59.0. Anything over 50 means expansion.
Oil is lower by a buck and is right at $100 on talks of Moammar Gadhafi tapping out. Although we expect a long, lengthy fight, there are talks of “friendly” countries that want to help mediate a resolution to Libya’s crisis which has helped push oil lower.
As a result, the Dow is up 173 points to 12,240 and has pushed back above resistance which was at 12,200. The S&P 500 is higher by 19 points to 1,327 but more importantly, the index is back over 1,325. The Nasdaq is advancing by 50 points and is at 2,798. We would love to see Tech close above 2,800 as it is at session highs as we head to press.
We said a blow-off the roof type rally was coming, we just hope it continues into Friday and there is not a disappointment in nonfarm payrolls. We will be back in the morning with a full update and you will know by 9am what the day holds.
On that note, we also have a NEW TRADE for today! Subscribers, check for the updates.
Tags: best option trader, call options, momentum options, Momentum stocks, option signals, option trading, options broker, options mentoring, options newsletter, put options, winning option trades
Posted in Market Analysis, Market Commentary | Comments Off
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Oil Pushes $107, Futures Slightly Higher
Monday, March 7th, 2011
9:05am (EST)
The market made some wild swings last week as volatility picked up along with geopolitical concerns. The bulls started the week off with a victory but the bears floored them on Tuesday as the indexes fell 1.5% on average. The bulls made most of those losses back on Wednesday and Thursday which all led to Friday’s unemployment numbers which were fantastic.
Although there was a slight disappointment for a higher print for additional jobs, the market held up well and was basically flat until oil became a concern. Oil popped to a high of $105, up $3, which worried the heck out or a lot of investors who ran for cover before the weekend. Wall Street seemed nervous on how much higher oil prices would affect the economic recovery but we were more interested in watching support which held like a champ.
In fact, we said the final hour of trading was going to be interesting and the bulls made a nice comeback to score a weekly win, believe it or not.
The Dow was down 178 points at one point but staged a furious comeback as time ran down to the closing bell. We liked the effort going into the weekend. The index hit a low of 12,079 before rebounding and finishing at 12,170, down 88 points. For the week, the blue-chips gained 39 points, 0.3%, and we loved the close above 12,100 which we were hoping for on Friday. Resistance is at 12,200 and 12,350 this week.
The S&P 500 fell 10 points and settled at 1,321 after trading to a low of 1,312. We were looking for 1,325 to hold and then 1,300 but the bulls got half of the losses back before the close. For the week, the index added a point, or 0.1%, and needs to clear 1,325 before it can make an assault on 1,350.
The Nasdaq finished Friday at 2,784 (down 14 points) but had the smallest losses of the Big 3 indexes. Tech traded to a low of 2,768 and had trouble with the 2,800 level last week but 2,750 held. There is additional support at 2,700 but we have targeted Nasdaq 3,000 on a break above 2,850. For the week, the Nasdaq advanced 3 points, or 0.1%.
It is important that we talk about the downside though a little further. The turmoil and unrest in the Middle East got a little more serious as those loyal to Libyan leader Moammar Qadhafi battled rebels throughout the weekend. Some of the battles are taking place in the oil-rich eastern region of the country and the rebels have vowed victory or death. It’s that simple, and it comes down to Qaddafi and how far he is willing to push the envelope against his own people and how long those loyal to him remain that way. It also comes down to money, which is being choked, but Qaddafi still has enough to pay renegades and order air strikes on the rebels.
We also have to worry about the upcoming demonstrations and chaos which could rock Saudi Arabia this week. A “day of rage” is scheduled to take place there on Friday. These geopolitical events could weigh on the market and if oil continues to push higher we may have seen the market highs for the first half of the year as this could play out for a few months. If it weren’t for higher oil and a possible civil war in Libya, we would be 100% confident the bulls could rally the Dow to 13,000 by the end of April. But that is not the case.
The economic news had been pouring in at an incredibly good pace and there is a chance that higher oil prices can be absorbed by consumers who have paid off debt and saved for the last two years. However, right now there is an inverse relationship going on between the market and oil and it doesn’t appear like this is going to change anytime soon unless Qaddafi steps down.
The bottom line is watch Dow 12,000 and S&P 1,300. If these levels crack and the indexes close below these levels, then the bull market could be turning into a bear market. The good news is we love playing the downside and you will too. Remember, you can make just as much money on put options (bearish) as you can call options (bullish) so be prepared because it will be an easy read.
Despite the chaos, futures are slightly higher this morning despite oil adding another $2. Dow futures are higher by 14 points to 12,168 while the S&P 500 futures are up a half-point to 1,320. The Nasdaq 100 futures are showing a 7 point pop and are at 2,367.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary | Comments Off