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Monday, September 10th, 2012
12:30pm (EST)
We did a lot of chart work over the weekend and we have been pretty busy this morning. For those of you who don’t like to look at charts, we encourage you to go to the Members Area today to take a peak. It will help you with trading and keeping your emotions in check.
We have been spot on in calling market direction and from the charts, the bulls are in control. If we start the think about headline risk, the bears are due for an attack and all we can do is prepare for it if and when it comes. The market should trade in a tight range up until Wednesday which is when we expect volatility to pick up.
In the meantime, it is a stock picker’s market which is how we like it.
There are a number of headlines we could cover but we will do that in the morning as we want to take some time to talk about our current trades today.
The market started today’s session lower and has traded into positive territory before turning south as we head to press. The Dow is up 2 points to 13,307 while the S&P 500 is lower by 2 points to 1,436. The Nasdaq is off 14 points to 3,122.
Subscribers, check the Members Area for the New Trade updates.
Tags: option trading newsletter
Posted in Market Analysis, Trade Update | Comments Off
Wednesday, July 25th, 2012
1:00pm (EST)
The market got an opening pop following better-than-expected earnings from Caterpillar (CAT, $80.98, down $0.45) but the rally in the blue-chips have quickly lost steam. The bears focused their attack on Apple (AAPL, $573.63, down $27.29) and Tech at the open and weren’t too worried about the few bulls who have tried to escape.
Caterpillar reported a profit of $2.54 a share on revenue of $$17.4 billion. Wall Street was looking for $$2.28 a share on $17.1 billion. Shares were up 5% on the news and reached a high of $85.45 before giving back their gains as well.
Here is the interesting story. There are nearly 50 analysts who cover Apple and have a rating on the stock, and not one of them forecast Apple’s big miss. There are 20 knuckleheads who follow Caterpillar and not one of them felt comfortable issuing a “Buy” rating ahead of the earnings announcement.
Now that the numbers are out, Wells Fargo (WFC, $33.13, down $0.10) maintained its “Outperform” rating on Caterpillar and said the stock should react well. Remind us to check to see where shares of CAT are at in a few weeks following Wells reiteration rating.
We do have some great news for one of our current trades as Aetna (AET, $35.28, down $1.79) has hit a triple-digit return. We have been calling for a near-term test to $36 and shares have finally reached out first target. Our longer-term test is for a drop to $32 but we want to lock-in at least half profits on the 100% return so that we can play the rest of the trade with the house’s money.
As we head to press, the Dow is up 47 points to 12,664 while the S&P 500 is off a point to 1,337. The Nasdaq is lower by 7 points to 2,855.
Subscribers, check the Members Area for the updates.
Tags: CAT earnings, option trading newsletter, options mentoring
Posted in Apple, Earnings, Market Analysis | Comments Off
Friday, July 20th, 2012
9:00am (EST)
The bulls won their third-straight session on Thursday and made another run at upper resistance levels but ran out of gas midday way through the session. The surge during the first half of trading was enough to allow them to coast to victory as the bears never got it in second gear.
The Dow added 35 points, or 0.3%, to finish at 12,943. The blue-chips tested a high of 12,977 at lunchtime after dipping to a low of 12,889 shortly after the open. The bulls made a push at 13,000 and if cleared it could be smooth sailing up to 13,200. We mentioned yesterday if the bulls fail to clear this level by the weekend there could be a test back down to 12,600 over the near-term.
The S&P 500 popped 4 points, or 0.3%, to settle at 1,376. We said a close above 1,375 would get 1,400 into play and yesterday’s high was 1,380. The low was 1,371. The 52-week high is 1,422 which was hit on the first trading day of April.
The Nasdaq led the way higher after jumping 23 points, or 0.8%, to close at 2,965. Tech touched a top of 2,976 and is a little over 1% away from taking out the 3,000 level. Unlike the Dow and S&P, the Nasdaq held green all day and above 2,950 which was bullish.
The Russell 2000 fell 3 points to finish at 802. The small-caps traded to 808 and we said a close above 810 would be bullish but the negative close could be another clue the market is topping. The S&P Volatility Index ($VIX, 15.45, down 0.71) fell another 4% and has reached our mid-teen target. There is still a chance the VIX could push the low teens and that would mean the S&P 500 is at 52-week highs.
After the close, Google (GOOG, $593.06, up $12.30) and Microsoft (MSFT, $30.67, up $0.22) came in with mixed results but shares of both companies got nice little pops in extended trading.
Google beat estimates and had a huge beat on revenue by $70 million. Microsoft posted its first ever quarterly loss after taking charges for its online division and an expensive, money losing acquisition. However, Mr. Softie posted strong sales as revenue rose 4% and topped $18 billion for the quarter. Google was trading above $600 when after-hours trading closed while Microsoft was above $31. Both levels are holding before the bell.
You would think futures would have gotten a nice pop but they were weak all night. Shortly after 1am (EST), Dow futures were down 33 while the Nasdaq futures were flat as a pancake. They have gotten worse this morning as we head towards the opening bell and look like this: Dow (-66), S&P 500 (-9), Nasdaq (-8).
We have an important chart to show you this morning on a stock we have traded options on 4 times over the past few months. All of the recommendations have been put options and have made our subscribers 172%, 144%, 29% and 6%. Shares are right near resistance again so let’s go see what the chart looks like inside the Members Area.
Tags: economic news, GOOG, option trading newsletter, YHOO
Posted in Google, Market Analysis, Market Commentary, Yahoo / Microsoft | Comments Off
Friday, July 13th, 2012
9:00am (EST)
The market followed a similar pattern that has played out all week as the major indexes tested news lows before a late afternoon bounce made the losses more respectful.
The bears continued with their recent win streak as the Dow and S&P fell for a sixth straight day. The Nasdaq has fallen five-straight sessions.
Thursday’s pullback was fast and furious at the open despite some good jobless claims numbers but the bulls were able to close the gap by the time the final bell sounded.
The Dow declined 31 points, or 0.25%, to finish at 12,573. The blue-chips traded to a low of 12,492 before rebounding to close just under 12,600 which was all we really wanted to see. The index did make a late afternoon charge into positive territory and reached a high of 12,630 before closing below support.
The S&P 500 gave back 7 points, or 0.5%, to settle at 1,334.76. We wanted to see a close below 1,335 after the index reached a low of 1,325 and we got it. The next level of support is at 1,300 once 1,325 is taken out on the close while resistance remains 1,350.
The Nasdaq fell 22 points, or 0.75%, to end at 2,866. Tech traded down to 2,837 and we would have liked to have seen a finish below 2,850. Once we close below this level the selling pressure will pick up and any bounce should be contained up to 2,900.
Futures are showing a slightly higher open and its Friday the 13th so anything can happen: Dow (+37); S&P 500 (+3); Nasdaq 100 (+8).
Tags: Dow Futures, option trading newsletter, S&P futures
Posted in Market Analysis, Market Commentary | Comments Off
Wednesday, June 6th, 2012
1:30pm (EST)
We have been expecting a test to resistance and we said we could have a huge snap-back rally or dead cat bounce this week. Well, here it is and it is happening before the release of the Fed’s Beige Book (at 2pm).
The bulls have been known to climb a wall of worry and today’s 2% gains have come on hopes the U.S. could initiate new monetary easing plans or initiate new steps to help with the European debt crisis. Of course, the U.S. has its own debt issues but that is for another day right?
There was a little nervousness before the bell after the ECB (European Central Bank) left its key interest rate unchanged at 1%. Many were hoping for a rate cut and though ECB President Mario Draghi admitted that a few council members did call for one, it didn’t happen. The ECB said it will continue to supply eurozone banks with liquidity but many market pundits felt they needed to do more. Perhaps they are banking on Bernanke. Pun intended.
As we head to press, the Dow is higher by 217 points to 12,345 while the S&P is higher by 23 points to 1,308. The Nasdaq is showing a gain of 56 points to 2,834.
The rally has pushed the market right up to our near-term resistance targets which means we have 2 NEW TRADES to take action on.
Tags: ECB comments, option trading newsletter, stock market commentary
Posted in European Union (EU), Market Analysis, Market Commentary | Comments Off
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Google (GOOG) Beats Estimates, Shares Crack $600
Friday, July 20th, 2012
9:00am (EST)
The bulls won their third-straight session on Thursday and made another run at upper resistance levels but ran out of gas midday way through the session. The surge during the first half of trading was enough to allow them to coast to victory as the bears never got it in second gear.
The Dow added 35 points, or 0.3%, to finish at 12,943. The blue-chips tested a high of 12,977 at lunchtime after dipping to a low of 12,889 shortly after the open. The bulls made a push at 13,000 and if cleared it could be smooth sailing up to 13,200. We mentioned yesterday if the bulls fail to clear this level by the weekend there could be a test back down to 12,600 over the near-term.
The S&P 500 popped 4 points, or 0.3%, to settle at 1,376. We said a close above 1,375 would get 1,400 into play and yesterday’s high was 1,380. The low was 1,371. The 52-week high is 1,422 which was hit on the first trading day of April.
The Nasdaq led the way higher after jumping 23 points, or 0.8%, to close at 2,965. Tech touched a top of 2,976 and is a little over 1% away from taking out the 3,000 level. Unlike the Dow and S&P, the Nasdaq held green all day and above 2,950 which was bullish.
The Russell 2000 fell 3 points to finish at 802. The small-caps traded to 808 and we said a close above 810 would be bullish but the negative close could be another clue the market is topping. The S&P Volatility Index ($VIX, 15.45, down 0.71) fell another 4% and has reached our mid-teen target. There is still a chance the VIX could push the low teens and that would mean the S&P 500 is at 52-week highs.
After the close, Google (GOOG, $593.06, up $12.30) and Microsoft (MSFT, $30.67, up $0.22) came in with mixed results but shares of both companies got nice little pops in extended trading.
Google beat estimates and had a huge beat on revenue by $70 million. Microsoft posted its first ever quarterly loss after taking charges for its online division and an expensive, money losing acquisition. However, Mr. Softie posted strong sales as revenue rose 4% and topped $18 billion for the quarter. Google was trading above $600 when after-hours trading closed while Microsoft was above $31. Both levels are holding before the bell.
You would think futures would have gotten a nice pop but they were weak all night. Shortly after 1am (EST), Dow futures were down 33 while the Nasdaq futures were flat as a pancake. They have gotten worse this morning as we head towards the opening bell and look like this: Dow (-66), S&P 500 (-9), Nasdaq (-8).
We have an important chart to show you this morning on a stock we have traded options on 4 times over the past few months. All of the recommendations have been put options and have made our subscribers 172%, 144%, 29% and 6%. Shares are right near resistance again so let’s go see what the chart looks like inside the Members Area.
Tags: economic news, GOOG, option trading newsletter, YHOO
Posted in Google, Market Analysis, Market Commentary, Yahoo / Microsoft | Comments Off