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Monday, October 18th, 2010
9:05am (EST)
The bulls were back in victory lane last week as they managed to take the market higher despite the weakness in Financial stocks. The Dow ended Friday with a loss of 32 points and closed at 11,062 but finished the week 0.5% ahead. The S&P 500 added 2 points and settled at 1,176 while the Nasdaq was last seen at 2,468 after gaining 33 points, or 1.4%, on Friday. For the week, the S&P gained 0.9%, while Tech advanced a solid 2.8%.
Our short-term targets remain Dow 11,200; S&P 1,200; and Nasdaq 2,500 with a real shot at 2,600 if the bulls continue to run for the rest of the year.
We have busy week and here is what the landscape is looking like for us:
Today, we get industrial production numbers for September, while the National Association of Home Builders will issue its October Housing Market Index. As far as earnings, Apple (AAPL, $319.74, up $5.00) and VMware (VMW, $77.60, down $0.03) will report after the bell. Citigroup (C, $4.03, up $0.08), Halliburton (HAL, $35.84, up $0.76) and Hasbro (HAS, $45.10, down $0.87) are confessing this morning. (All quotes are from pre-market action and before the opening bell).
As a reminder, we will be releasing a trade at 10am this morning that hasn’t been on our Watch List. We have been following the company for a while but we are trying to get the best possible entry prices we can without tipping our hand.
We have updated all of the current trades and we are excited about our latest recommendation on a possible explosive situation. Subscribers, check the Members Area for the updates. We have also recorded a video for the trade that will be available to our course members who have purchased our option trading course, “How to Trade Options on Momentum Stocks”. Remember, if you order the course before the end of the month you will get a free 1-month membership (a $129 value) to our Members Area.
Tags: momentum options trading, option trading course, option trading courses
Posted in Market Analysis, Market Commentary | Comments Off
Friday, October 15th, 2010
9:00am (EST)
The bulls were looking to extend their winning streak to six straight sessions as the bears battled hard to put a plug in the current rally. The cards were in their favor as a slight jump in jobless claims and an ongoing housing foreclosure crisis that continues to haunt the Financial sector looked like Aces.
The Bank stocks took another hit as Wall Street frets an investigation of the institutions’ handling of foreclosure procedures and this is a bad story only getter worse. It was a curveball for the sector (which was on the verge of breaking out of a funk) that could force them to agree to loan modifications or “principal forgiveness agreements” after all 50 states formally launched investigations. Looks like the government is getting their finger in another pie…
Bank of America (BAC, $12.60, down $0.69) and Citigroup (C, $4.06, down $0.19) dropped 5% while the Financial Spiders (XLF, $14.60, down $0.26) fell 2%. We were watching the XLF for signs of a move past $15 for confirmation but that didn’t happen. Shares touched $15 on Wednesday but could not close above this level. Side Note, Bank of America traded 500 million shares yesterday…incredible.
We continue to find it “unsettling” that the Financial sector has lagged all phases of the current market rally but a few things we have learned is that you don’t fight the tape and you tug on Superman’s cape. Despite the Debbie Downers, the bulls came thisclose to extending their winning streak to seven as the market finished near the flat line for the day.
The Dow slipped 2 points to finish at 11,094 after trading down to a low of 11,023. The 11K level held and our near-term target remains 11,150-11,200.
The S&P 500 fell below the 1,170 level to a low of 1,166 but rebounded to finish at 1,173, down 4 points. We are still expecting a move past 1,200 over the short-term while 1,150 provides support.
The Nasdaq declined by 6 points and finished at 2,435. The index traded to a low of 2,422 and did manage a high of 2,445. Tech has yet to close above our 2,450 target but that shouldn’t be an issue today.
Yesterday, we talked about the possibility of Google (GOOG, $540.93, down $2.37) surprising Wall Street and how the stock was building momentum. Well, Google did not disappoint our research as shares were up a Grant ($50) in after-hours trading last night to $590. Here were our quotes from yesterday:
“While search queries were up 4% overall in September from August, Google could surprise some analysts with a huge quarter as they doubled the industry’s gain as a whole. The stock has been in a solid uptrend since its end of August lows of $447-$448 and has gained nearly a $100 in 6 weeks. Google’s shares have been white-hot due to the release of “Google Instant” which shows results as the user types in a search query.”
We will go over their numbers in today’s 1pm update but for now, we want to get our subscribers in the Members Area as we have a number of trades that should see some solid gains. We also have some loose ends to tie up on a strangle option trades which have done well since we started adding them into our mix. The October options expire TODAY so we want to make sure you know what to do on these profitable trades.
As we head to press, the Dow futures are up 36 points to 11,088 while the S&P 500 futures are higher by 4 to 1,177. The Nasdaq 100 futures are showing a 13 point pop and are at 2,075.
Tags: Bank of America (BAC), Google (GOOG), option trading courses
Posted in Earnings, Google | Comments Off
Friday, October 8th, 2010
1:35pm (EST)
Give the bulls credit. They are trying like hell to push this market though resistance.
Despite a nasty jobless claims report, 2 out of the 3 major indexes have pushed through our price targets as both the Dow and S&P 500 have cleared our fence. All we are waiting for is the Nasdaq, which seems to have a pants leg stuck in the barbwire, to confirm the jailbreak.
The Dow has broken 11,000 as the index has traded to a high of 11,016 and will need to close above this level to give the bulls a clear victory this week. The index is currently up 56 points and is a smidge over 11K at 11,009.
The S&P 500 has busted through 1,160 and is up 6 points to 1,164 and looks to be headed towards 1,175 and possibly 1,200.
However, the Nasdaq is at 2,399, up 16 points but just cleared 2,400, earlier, as we were heading to press.
Here were our thoughts yesterday:
“There is a feeling that the release of Friday’s monthly employment report will sway the market one way or the other but we think 3Q earnings will likely set the stage for where the market is headed over the short-term. We also have an uneasy feeling with the world currency debasing race that is currently going on and the parabolic moves gold, copper and silver are making is mind-blowing but we believe there could be some surprises, good and bad, that will dramatically impact the market over the next 3 weeks.”
Well, so far so good. It’s easy to be bullish in a market like this and while we would turn bullish (short-term) if the 3 major indexes CLOSED above our price targets, we are also aware that it will be vital to carry some kind of put option protection going forward.
It’s hard for investors to remember the bad times when the good times are so good right now, but, it was only 2 years ago this week that the Dow dropped 18% in a week. In other words, the index fell nearly 1,900 points in five days.
There is a saying that “history repeats itself” and often times in the market or in certain stocks, a pattern or history is repeated. We aren’t saying history will repeat itself…all we are saying is in this environment, strangles and straddles option trades will be your BEST FRIEND.
The strategies involve the purchase of both a call and put option which allows you security as long as the market is volatile. Check. We have that folks. In other words, you don’t have to know which way a stock or the market is going to have to move. You want volatility and huge price swings. Check.
This weekend there will be a number of important events taking place concerning the world’s currency and the market will be closed Monday.
Next week, Intel (INTC, $19.51, up $0.11) will report earnings on Tuesday (after the bell) along with Fastenal (FAST, $54.64, up $1.94). FAST which will report BEFORE the bell and the 52-week high is $56.65. If the bulls are still dancing and the two companies get “A’’’s on their earnings report cards, then look for Dow 11,300; Nasdaq 2,500; and S&P 1,200 over the near-term.
If some unexpected news or event happens over the weekend, or if Intel MISSES Wall Street’s estimates, then the market could retreat back into the 4-month long trading range, or worse.
Either way, we think 3Q earnings season will be intense and loaded with some GREAT opportunities to make some money on both call AND put options. We plan on using a combination of both (strangles and straddles) but we will also be playing some directional trades straight up.
Remember, we teach these kind of option strategies in our new trading manual “How to Trade Options on Momentum Stocks” which is available NOW with a FREE 1-month membership included (a $129 value).
We will be releasing our first video this weekend for those of you have ordered our course. Details will be emailed to you and we plan to cover the upcoming earnings season and how to find trades, as well as an overview on strangles and straddle option strategies which are covered in our option manual.
Have a great weekend everyone and get ready for some action over the next 3 weeks!
Tags: explain the concept of options, INTC, Intel, momentum options trading, option picks, option trading blog, option trading course, option trading courses, straddle option trades, strangle option trades, triple-digit options returns
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Friday, October 8th, 2010
9:05am (EST)
In was a flat day on Wall Street yesterday although the market zigzagged on both sides of the ledger before ending mixed. It seemed as if both the bulls and bears were hesitant ahead of last night’s “official” kick-off of the third quarter earnings season and knowing this morning’s nonfarm payroll numbers for September would be out. We cover both below.
The bulls were able to push the major averages near resistance (again) after hearing better-than-expected retail sales figures, as well as upbeat jobless numbers from the Labor Department. However, the bears kept things in check as they held resistance going into the close.
The Dow peaked near 11,000 shortly after the start of trading, but spent the rest of the session near the 10,950 level before finishing with a loss of nearly 20 points to close at 10,948.
The S&P 500 slipped 2 points to finish at 1,158 but below 1,160 while the Nasdaq added 3 points and settled at 2,383 and below our breakout target of 2,400.
Turning to earnings, Alcoa (AA, $12.20, down $0.17) reported a profit of 9 cents a share which was 3 cents better than the analysts’ estimates of 6 cents a share. Revenue rose nearly 15% to $5.3 billion, versus calls for $4.95 billion.
The futures are pointing towards a lower open after the latest unemployment report hit the Street. September nonfarm payrolls fell by 95,000, which was worse than the 5,000 loss that was expected. Private payrolls increased 64,000, which was less than the 74,000 increase that had been widely expected while the unemployment rate remained unchanged at 9.6%.
As we head to press, the Dow futures are lower by 25 to 10,887 while the S&P 500 are showing a loss of 3 points to 1,154. The Nasdaq 100 futures are down 7 points to 2,007.
Special Note: Adobe (ADBE, $28.69, up $2.96) surged nearly 12% yesterday after speculation Microsoft (MSFT, $24.53, up $0.10) could be targeting the company in a takeover attempt following a ”closed door” meeting between the two companies.
Shares of Adobe were briefly halted yesterday after a circuit breaker was triggered around 3pm (EST) or an hour or so before the market closed.
We recently profiled a strangle option trade for Adobe in late September to where our subscribers have already banked a 200% profit. The put options returned 525% while the call options were left for dead.
Yes, the call options were trading for a penny…a penny…before the news hit. In other words, these options gained 3,800% yesterday which adds even more gravy to the trade.
Subscribers, check the Members Area for the important update as we tell you exactly how to play our current position out. And remember, we teach these kind of option strategies in our new trading manual “How to Trade Options on Momentum Stocks” which is available NOW with a FREE 1-month membership included (a $129 value).
Tags: Adobe (ADBE), explain the concept of options, Microsoft, momentum options trading, option picks, option trading blog, option trading course, option trading courses, straddle option trades, strangle option trades, triple-digit options returns
Posted in Economic News, Hot Stocks, Market Analysis, Market Commentary | Comments Off
Thursday, October 7th, 2010
1:05pm (EST)
The bulls are trying to push past our resistance targets for the major indexes after getting a better-than-expected jobless claims report. Initial jobless claims came in at 445,000 versus the expected 455,000, while continuing claims were 4.46 million versus expectations of 4.45 million. This gave futures a lift which lead to a nice open but trading is slightly negative as all eyes are now focused tomorrow’s non-farm payrolls report. Wall Street is expecting the unemployment rate will rise to 9.7% last month from 9.6% in August.
The Dow made a run at 11,000 and traded as high as 10,998 but is currently down 52 points to 10,914. If the bulls are able to break 11,000 today then we would be a little nervous of a continued breakout because it could be a classic trap by the bears. If the index closes right below 11,000 and gets a good number tomorrow, then we would expect the index to easily run past 11,000 with a run possibly up to 11,300.
The S&P 500 is down by a 7 points and stands at 1,153 but has traded past 1,160 to a high of 1,164. We think a run to 1,175-1,200 could be in the cards but it will depend. And finally, the Nasdaq is down 9 points to 2,371 and has traded as high as 2,392. We are watching the 2,400 level like a hawk.
There is a feeling that the release of Friday’s monthly employment report will sway the market one way or the other but we think 3Q earnings will likely set the stage for where the market is headed over the short-term. We also have an uneasy feeling with the world currency deflating race that is currently going on and the parabolic moves gold, copper and silver are making is mind-blowing but we believe there could be some surprises, good and bad, that will dramatically impact the market over the next 3 weeks.
Speaking of earnings, PepsiCo (PEP, $65.58, down $2.53) reported a profit of $1.9 billion, or $1.19 a share, versus $1.7 billion, or $1.09 a share, in the year earlier period. Revenue jumped 40% to $15.5 billion versus expectations for $15.4 billion. Excluding items, the company said earnings were $1.22 a share versus expectations of $1.21 a share. The stock took a hit after the company said growth going forward would be between 11%-12%, down from 11%-13% growth.
Alcoa (AA, $12.23, down $0.14) and Micron Technology (MU, $7.09, up $0.14) will release their quarterly earnings after the bell.
We will be back in the morning with September’s nonfarm payrolls report and unemployment rate, as will the Commerce Department’s report on August wholesale inventories. Subscribers, check the Members Area for the updates on our current trades and comments for our Watch List.
Tags: AA, Alcoa (AA), explain the concept of options, momentum options trading, option picks, option trading blog, option trading course, option trading courses, PEP, PepsiCo earnings, straddle option trades, strangle option trades, triple-digit options returns
Posted in Commodities, Company Commentary, Earnings | Comments Off
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Futures Pointing Towards Slightly Lower Open
Monday, October 18th, 2010
9:05am (EST)
The bulls were back in victory lane last week as they managed to take the market higher despite the weakness in Financial stocks. The Dow ended Friday with a loss of 32 points and closed at 11,062 but finished the week 0.5% ahead. The S&P 500 added 2 points and settled at 1,176 while the Nasdaq was last seen at 2,468 after gaining 33 points, or 1.4%, on Friday. For the week, the S&P gained 0.9%, while Tech advanced a solid 2.8%.
Our short-term targets remain Dow 11,200; S&P 1,200; and Nasdaq 2,500 with a real shot at 2,600 if the bulls continue to run for the rest of the year.
We have busy week and here is what the landscape is looking like for us:
Today, we get industrial production numbers for September, while the National Association of Home Builders will issue its October Housing Market Index. As far as earnings, Apple (AAPL, $319.74, up $5.00) and VMware (VMW, $77.60, down $0.03) will report after the bell. Citigroup (C, $4.03, up $0.08), Halliburton (HAL, $35.84, up $0.76) and Hasbro (HAS, $45.10, down $0.87) are confessing this morning. (All quotes are from pre-market action and before the opening bell).
As a reminder, we will be releasing a trade at 10am this morning that hasn’t been on our Watch List. We have been following the company for a while but we are trying to get the best possible entry prices we can without tipping our hand.
We have updated all of the current trades and we are excited about our latest recommendation on a possible explosive situation. Subscribers, check the Members Area for the updates. We have also recorded a video for the trade that will be available to our course members who have purchased our option trading course, “How to Trade Options on Momentum Stocks”. Remember, if you order the course before the end of the month you will get a free 1-month membership (a $129 value) to our Members Area.
Tags: momentum options trading, option trading course, option trading courses
Posted in Market Analysis, Market Commentary | Comments Off