|
|
|
|
|
 |
|
|
 |
Friday, December 16th, 2011
1:50pm (EST)
Zynga (ZNGA, $9.87, down $0.13) opened for trading this morning on the Nasdaq stock exchange after pricing shares at the top end of their expected range. The company offered Wall Street 100 million shares at $10 which raised $1 billion with over-allotments of 15 million shares that could bring the deal to $1.15 billion.
The initial public offering (IPO) values Zynga at $7 billion based on the company selling company a little over 10% of its diluted shares.
Early research reports have Zynga’s current user base at over 50 million active customers, which is incredible, but we are a little worried over the average lifespan for Zynga gamers which is only 10 days. We haven’t played “Farmville” because it looks boring but “Mafia Wars” seems to be decent and the company is promising a slew of new games.
The games are free but the company makes bank from users who buy upgrades for them. We find it hard to believe that some Farmers (gamers) spend up to a grand a month to buy pink cows for Farmville. A few Farmville addicts are spending $10,000 a month to play this game. Really?
One interesting tidbit is that the Zynga’s revenue has doubled over the past 9 months but only 5% of sales are coming from advertising. The potential is there to grow this business into something special but we are already hearing some funky accounting practices which have us leery. Competition will only heat up and it will depend on how the company adapts.
One area we can see BOOMING is the online poker industry which Zynga could benefit from if the knuckleheads in Congress ever make it legal here in the states. Zynga Poker could become very, very lucrative which would be the only reason we buy this stock. File this away and if Congress does approve a legal online poker bill in 2012, Zynga will soar on the news. In the meantime, watch it trade and wait for the options to come out. There could be a LEAP trade based on the prediction alone.
As far as the market, the so called “pros” are packing it in for the year as they usually do. Many of the Wall Street traders focus on the holidays and the so called gurus think they deserve the last few weeks off so they tell you the market is heading lower or in this case the Dow will have trouble cracking 12,000 again.
This may be true but we remember the same thing happening last year and we did very well by ignoring the crowd and doing our homework. We had a number of trades that we opened at in December 2010 that did very well into January of this year so here is our point.
Never short a dull market and never give up on the last few weeks of December. Hopefully, we will be able to establish some new positions next week which could be either bullish or bearish because we do feel the Dow is going to make a huge move by mid-January and could be at 12,800-13,000 or 11,000 before Wall Street catches on.
As we head to press, the bulls are trying to hold onto their gains but the bears will probably win the week. The Dow is down 8 points to 11,860 while the S&P 500 is higher by 4 points to 1,220. The Nasdaq is up 14 points to 2,555.
We will be back Sunday night with our Weekly Wrap and please take advantage of our special introductory offer by using this morning’s coupon code. The newsletter should end 2011 with a perfect 16-0 track record. For conservative traders, this newsletter is for you and can be used to produce monthly dividends. Until then, have a great weekend everyone!
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading, ZNGA, Zynga IPO
Posted in IPOs, Market Analysis | Comments Off
Wednesday, December 14th, 2011
1:20pm (EST)
It has been an “all bears” week so far as the market continues to slide on a falling euro and rising Italian bond yields. The global markets are still unimpressed with Europe’s efforts to stem their debt crisis which forced Italy to pay a euro record high yield of nearly 6.5% to sell five-year notes.
The bulls continue to give up ground and today has been a full fledge breakdown as commodities like copper and gold are also tanking.
Gold is often considered a safe haven and has rallied on market pullbacks throughout 2011 but that trade is no longer working. We don’t trade as much as we use to in the sector and we were right earlier this year when we said gold would run to $2,000 an ounce before pulling back.
The yellow metal reached a peak of $1,923 an ounce in September but is at $1,582 an ounce today, down $80. Gold’s 200-day moving average (MA) is currently at $1,614 and we wouldn’t be surprised to see a test down to $1,450 before a rebound. However, if this level holds, gold could be a buy at current prices.
We came into the week expecting a pullback but we also held out hope on the Fed which we thought could sprinkle a wrinkle on new stimulus measures to offset the effects of the European crisis – but that didn’t happen.
The good news is we are right near the support levels we have outlined at the beginning of the week which is create a buying opportunity for either calls or put options. We have averaged nearly 3 trades a week for 2011 but we have only opened 3 trades since the beginning of the month.
We also have some older positions from the massive profitable run that we had from August through the end of October. We closed 44-out-of-52 winning trades but we will have a few positions expiring this week that will likely make this 44-out-of-60 winning trades.
Come next Monday, we will only have a handful of trades open, and some of which we have already closed half profits in. This means we will have room up to 10-15 trades and the market should be exactly where we want it to be.
We have been building our Watch List with both calls and puts and we are looking at January, February, April and June options. There is still a massive move coming and we will see the Dow at 11,000 or 13,000 come the end of January. We are still favoring calls because we are still bullish and the put options have gotten EXPENSIVE which is another reason we have sat on the sidelines.
We said in early November when the market reached resistance we could have a pullback and since then we have been in a 4-week trading range. This is exactly how the market acted in July and August before the huge rally back to the top.
This time, we could either follow the same pattern and surge higher over the next 30 days – or – the market could test its August lows.
The Dow is currently at 11,859, down 95 points, while the S&P is off 10 points to 1,215. The Nasdaq is showing a decline of 38 points and is at 2,540.
Subscribers, pay close attention to this morning’s Watch List and we will be adding a few more candidates tonight as possible breakout or breakdown plays. Stay locked and loaded and get the wheelbarrow out because we plan to make you some bank.
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading
Posted in Market Analysis, Market Commentary, Trading Psychology | Comments Off
Friday, December 9th, 2011
9:00am (EST)
This is one of our favorite titles to use in our daily updates from time-to-time and it was 25 years ago when Sweden’s rock band Europe rocked the globe with their hit song “The Final Countdown” which hit #1 in 25 countries and #8 here at home. In fact, the song rocked to the top in France, Germany, Ireland, Italy and the U.K. and hopefully it was introduced before last night’s European summit to remind the leaders what kind of crisis they are facing.
Of course, Wall Street has played this theme song all week as nothing else has mattered as the market awaits word on what the real “plan” is to fix Europe’s debt crisis.
The grapevine has been juicy with rumors all week on if Europe will pull out a bazooka or a water pistol and yesterday’s action signaled the latter.
The “pullback” was a little more than we expected, but not by much. Although our first wave of support broke down into the close, it is important to realize that things get stretched. It is also why we list backup targets in case a trend is about to change but we aren’t there, yet. Thursday’s action was scary but we’re not ready to throw the baby out with the bathwater.
The Dow dropped nearly 200 points, or 1.6%, to close at 11,997. The blue-chips were in the red from the start and traded to a low of 11,966. The 12,000 level fell late in the day after being tested for much of the session and 11,800 will serve as backup. If this level falls then look for 11,600 to hold. If not, things will get ugly in a hurry. Upside resistance is at 12,200 and then 12,350-12,400.
The S&P got punished for 27 points, or 2.1%, to end at 1,234. The 1,250 level was breeched about an hour into the open but 1,225 held all day as the low came in at 1,231. If this area is busted, look for 1,200 to hold and then 1,175. After that, the fat lady will be warming up her vocal cords. The bulls will try to go into the weekend at current levels but good news could motivate them to push 1,250-1,275.
The Nasdaq fizzled 53 points, or 2%, to settle at 2,596. Tech went out on its lows and failed to hold 2,600 which could bring 2,550 into play. The bears could also push 2,500 on continued weakness and a break below this level would get us nervous. Of course, the bulls will try to reclaim 2,600 and then some as they work their way back to 2,650-2,700 on hopes of a resolution from across the pond.
Last night, 23 of the 27 EU leaders reached an agreement with Britain, Hungary, Sweden, and the Czech Republic wanting no part of a “treaty”. The good news is that some type of agreement was reached but we aren’t sure if the market will buy this as a credible backstop for the debt crisis. Wall Street may need a little more convincing.
Moody’s got into the mix after midnight (imagine that) and downgraded 3 French banks but futures are holding up as we head to press. Dow futures are up 30 points to 11,974 while the S&P futures are higher by 5 points to 1,235. Nasdaq 100 futures are advancing 5 points to 2,286.
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading
Posted in Market Analysis, Market Commentary | Comments Off
Thursday, November 10th, 2011
12:55pm (EST)
Futures were pointing towards a nice pop at the open as some of the Tech names reported better-than-expected earnings while jobless claims came in under 400,000 again. However, despite the strong start, the momentum has failed to hold as the indexes gave back all of their gains with the S&P and Nasdaq briefly falling into negative territory.
Cisco Systems (CSCO, $18.72, up $1.11) has been in a solid uptrend since bottoming in August at $13.30 on its intraday low. The company reported a profit of 43 cents a share on revenue of $11.3 billion versus expectations for 39 cents/ $11 billion. More impressive is the fact gross margins came in at 61% in a sector that is full of competition – and they raised guidance for the quarter.
John Chambers, Cisco’s CEO, has been at the helm for nearly two decades and we figured the company would beat the lowered expectations after he promised a turnaround. Cisco has a history of beating the Street by a penny so his aggressiveness to right the ship is paying off.
Although we didn’t play a directional trade on Cisco Systems for our Daily publication, we did recommend the stock as a covered call for our Weekly Wrap. If shares hold up, we should get “called-away” at $17 next week when the November options expire. In fact, we have 3 trades which should get called away next week with gains of 23%, 17% and 10%. This will run our track record to a perfect 15-0 for 2011.
It looks as though trading could stay choppy for the rest of the week but we are expecting more bullish action, especially next week and into Thanksgiving. However, we could experience a little bit more of a pullback before the bulls break past the upper layers of resistance we have been outlining for the past few months.
The Dow is currently up 92 points to 11,873. The index is off its highs for the day and the low has been 11,779. We have been saying we expect 11,800 to hold (with backup at 11,600) but it would be a bonus if the bulls can close above 12,000 today. With the European markets now closed, hopefully we can get there.
The S&P is higher by 8 points to 1,237. The index traded down to 1,227 and we have penciled-in 1,225 as the low. If this level were penetrated, the 1,200 level would be crucial in holding or the bulls risk a trend change. Of course, the bulls are pushing for a close above 1,250.
The Nasdaq is down a point to 2,621. Tech has traded to a low of 2,601 and came within spitting distance of breaking under our 2,600 downside target. Backup is at 2,550 but we are hoping for a close above 2,650 today.
We have a lot to cover with our current trades so we will be back in the morning with the latest and greatest. Subscribers, check the Members Area for the updates.
Tags: CSCO, CSCO earnings, option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading
Posted in Market Analysis, Market Commentary | Comments Off
Wednesday, October 19th, 2011
9:00am (EST)
“We could have a short-covering rally into the close so buckle-up”.
Those were our famous last words from Tuesday’s tidbits…
We said yesterday we had high expectations for the week and we were disappointed with the start but the bulls got back on track following Monday’s spanking. The open on Tuesday didn’t look promising as the bears easily penetrated our first wave of downside targets. However, as we were watching support, the charts, and the VIX, we had a good feeling the bulls would hold down the fort so we added a couple of new positions.
Although we wouldn’t considering Tuesday’s pop a “breakout”, the price action is still higher despite those who want to short this market. We haven’t heard any “uncle’s”, yet, but the bears were close to saying it as their knuckles turned redder into the close.
The Dow surged 180 points, or 1.6%, to close at 11,577. After touching a low of 11,296, the blue-chips turned on a dime and traded to a high of 11,652 into the close. If the index can close above 11,600, it should clear the way for a quick run to 11,800 while 11,350 remains short-term support.
The S&P 500 added 25 points, or 2%, to settle at 1,225. The index briefly dipped below the 1,200 level and kissed 1,191 before rebounding to a high of 1,233. The S&P closed right on our first upside target and the move above 1,225 intraday suggests the bulls are still eyeing 1,250-1,275 over the near-term. Support remains at 1,200-1,190 with 1,175 providing backup.
The Nasdaq jumped 43 points, or 1.6%, to end at 2,657. Tech easily held the 2,600 level after touching a low of 2,586 while the high was 2,667. Resistance is at 2,675-2,700 while short-term support remains 2,600-2,575.
The S&P Volatility Index (VIX, 31.56. down 1.83) traded to a high of 34.71 and came into the week at 28. We mentioned in our Weekly Wrap the bulls would be trying to keep the VIX below 30 as we see the low 20’s coming into play on a continued rally. However, volatility hasn’t gone away and what normally takes weeks for something to play out is now only taking days.
Of course, all of this is yesterday news and the bulls have a fresh set of challenges ahead of themselves today. After the closing bell last night, Apple (AAPL, $422.24, up $2.25) shocked Wall Street with a rare earnings miss. However, Intel (INTC, $23.40, up $0.12) announced another outstanding quarter while Yahoo (YHOO, $15.47, down $0.23) and Juniper Networks (JNPR, $21.41, up $1.01) also beat expectations.
We will have more on these stories in our afternoon update.
Futures are mixed and pointing towards a slightly lower open as Apple is heavily weighted in some of the major indexes. Dow futures are up 2 points to 11,528 while S&P 500 futures are lower by 2 points to 1,221. Nasdaq futures are off 14 points to 2,350.
Tags: Dow Futures, option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, VIX, weekly options trading
Posted in Earnings, VIX, Yahoo / Microsoft | Comments Off
|
|
|  | | | |
Get RSS Feed
Gold Dips Below 200-Day MA
Wednesday, December 14th, 2011
1:20pm (EST)
It has been an “all bears” week so far as the market continues to slide on a falling euro and rising Italian bond yields. The global markets are still unimpressed with Europe’s efforts to stem their debt crisis which forced Italy to pay a euro record high yield of nearly 6.5% to sell five-year notes.
The bulls continue to give up ground and today has been a full fledge breakdown as commodities like copper and gold are also tanking.
Gold is often considered a safe haven and has rallied on market pullbacks throughout 2011 but that trade is no longer working. We don’t trade as much as we use to in the sector and we were right earlier this year when we said gold would run to $2,000 an ounce before pulling back.
The yellow metal reached a peak of $1,923 an ounce in September but is at $1,582 an ounce today, down $80. Gold’s 200-day moving average (MA) is currently at $1,614 and we wouldn’t be surprised to see a test down to $1,450 before a rebound. However, if this level holds, gold could be a buy at current prices.
We came into the week expecting a pullback but we also held out hope on the Fed which we thought could sprinkle a wrinkle on new stimulus measures to offset the effects of the European crisis – but that didn’t happen.
The good news is we are right near the support levels we have outlined at the beginning of the week which is create a buying opportunity for either calls or put options. We have averaged nearly 3 trades a week for 2011 but we have only opened 3 trades since the beginning of the month.
We also have some older positions from the massive profitable run that we had from August through the end of October. We closed 44-out-of-52 winning trades but we will have a few positions expiring this week that will likely make this 44-out-of-60 winning trades.
Come next Monday, we will only have a handful of trades open, and some of which we have already closed half profits in. This means we will have room up to 10-15 trades and the market should be exactly where we want it to be.
We have been building our Watch List with both calls and puts and we are looking at January, February, April and June options. There is still a massive move coming and we will see the Dow at 11,000 or 13,000 come the end of January. We are still favoring calls because we are still bullish and the put options have gotten EXPENSIVE which is another reason we have sat on the sidelines.
We said in early November when the market reached resistance we could have a pullback and since then we have been in a 4-week trading range. This is exactly how the market acted in July and August before the huge rally back to the top.
This time, we could either follow the same pattern and surge higher over the next 30 days – or – the market could test its August lows.
The Dow is currently at 11,859, down 95 points, while the S&P is off 10 points to 1,215. The Nasdaq is showing a decline of 38 points and is at 2,540.
Subscribers, pay close attention to this morning’s Watch List and we will be adding a few more candidates tonight as possible breakout or breakdown plays. Stay locked and loaded and get the wheelbarrow out because we plan to make you some bank.
Tags: option alerts, option trading, option trading services, options momentum trading, options on stock, options trading, options trading service, stock option trade, trade in options, weekly options trading
Posted in Market Analysis, Market Commentary, Trading Psychology | Comments Off