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Tuesday, January 31st, 2012
9:00am (EST)
The bears were throwing a lot of chips into the pot on Monday as they tried to up the ante on a possible Greece, and soon to be Portugal, debt default. The bulls took all day to call but by the end of the session they matched the bet as the market finished flat.
Given the plunge of 1% at the open, it was a victory for the bulls as they held support and nearly pulled off a great comeback by the closing bell. We had a sly grin on our face when we read where one Wall Streeter, who was head honcho for the firm’s “equity division”, said the U.S. appears to be “slowly, slowly in the early stages of decoupling from the eurozone.”
Duh…We told our subscribers this back in early December, Gus. Of course, we would never name names but where has this guy been? We were hoping to see a lift once the European markets closed, which happens at 11:30am (EST) our time, and the late rally back to even got legs once buyers stepped in after lunch.
The Dow fell a half-dozen points, or 0.1%, to finish at 12,653. The blue-chips traded to a low of 12,529 at the open but came within a point of cracking positive territory. We mentioned support yesterday and 12,550 was the test for much of the morning which we said to watch for. Upside resistance remains at 12,800.
The S&P slipped 3 points, or 0.3%, to end at 1,313. The index traded to a low of 1,300.49 but held support and came within spitting distance (0.17 points) of hitting green. Watch the same levels as yesterday for today.
The Nasdaq declined 4 points, or 0.2%, to settle at 2,811. We talked about some of Tech’s strength yesterday and the index actually managed a trip into positive territory (0.30 points) before the closing bell.
Today is the end of the month and January has been good to us as the indexes are showing some fat gains for the year. The Dow is up nearly 4%, the S&P is up nearly 5%, and the Nasdaq and Russell 2000 are showing 8% pops to start 2012.
The talking heads were being Negative Nancy’s yesterday and were shocked to see the turnaround but don’t be surprised to see them mention the “January Barometer” today. The indicator has a history of being fairly accurate and goes by the theory that when the month of January is higher, the market will end higher for the year. If negative, the indexes usually post a decline.
Unless the wheels fall off the bull wagon today, the bulls will likely appreciate the following facts since the 50’s. If the Dow ends January higher, the blue-chips have over an 80% chance of finishing higher for the year with additional gains of nearly 10%, on average. Wow, let’s hope so, right?
Of course, there is a ton of time between now and Christmas and we don’t expect this smooth of a ride all year long.
Subscribers, please hit the Members Area to get the trade updates and stay on your toes on a possible way to play Facebook, which could announce its IPO on Wednesday. We have 2 trades on our Watch List that could do well and we are in the office huddle deciding on if we should make one or both official recommendations or not. We want to see how shares open but the options pits were exploding on these names yesterday. Stay locked-and-loaded and look for a possible New Trade Alert shortly after the open if we take action.
As we head to press, futures look like this: Dow (+54), S&P (+6), Nasdaq (+10).
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
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Thursday, January 5th, 2012
1:25pm (EST)
The market is following yesterday’s pattern of opening lower despite good news and is trying to bounce back as we head into the second half of trading. Surprisingly, Tech is leading the way and is in positive territory while the Dow and S&P 500 are playing catch-up and are still slightly negative.
As far as economic news, it has been super although the talking heads are questioning some of the figures.
The Challenger Jobs Cuts came in at 42,000 while the ADP Employment Change report showed the private sector added 325,000 jobs in December, which was way higher than the expected increase for 178,000 jobs. Initial Claims fell 15,000 to 372,000 while Continuing Claims dropped 22,000 to 3.6 million. Both numbers beat expectations.
The ISM non-manufacturing report had a reading of 52.6 which was slightly below estimates of 53 but still showed expansion.
A couple of stocks we wanted to cover could be racing to $100 and we aren’t sure which one gets there first, if at all, but we wanted to show you how option premiums work.
We were spot on in calling Netflix’s (NFLX, $77.62, down $2.83) fall from grace and here was the chart we profiled back in September 2011 and our target of $75 (blue line).
We aren’t sure if a bottom is in but shares could be on the verge of breaking out of a trading range (blue box) in the chart below. Yesterday’s close above $80 was bullish for a run into the $90’s (black line) which is where the next patch of resistance lies. If shares can clear this level there is a chance for a run back to triple-digits ($100-$120) believe it or not.
The options for Netflix have also carried higher premiums because of the volatility and the large price movement shares can make but we took a peak at some call options in case there is a mini-breakout coming.
This is not an official trade by any means put we wanted to show you how expensive the premiums are. The June 100 calls (NFLX120616C00100000, $7.50, down $1.10) do not expire for 6 months but are trading for the price of what a good six-pack would cost.
By comparison, let’s take a look at Philip Morris (PM, $78.34, down $0.11) which is currently trading near $80 and all-time highs. The strong uptrend (green line, purple circles) has been in place for a few years and the breakout above $70 was super bullish. The Philip Morris June 100 calls (PM120616C00100000, $0.05) are trading at 5 cents. The June 95’s are a dime.
So, when you hear us say “high beta” stocks this is what we mean when we say premiums are expensive as far as the options go. We are pretty sure people are going to watch videos, especially over the internet, and we are pretty sure people are going to continue to smoke but both trades are risky.
Netflix could have another misstep or PR blunder while Philip Morris is a cough away from a negative litigation case at some point in time.
The breakeven points would be $109 for Netflix and $100.05 for Philip Morris if you bought the call options and held until expiration which is mid-June. This is not a lot of help because both stocks need hit $100, technically, to have a chance for a profit.
If we were in Vegas we would bet on Netflix but put insurance on Philip.
As far as our current trades, we are getting off to a great start for 2012 so let’s go check on them. As we head to press, the Dow is down 16 points to 12,402 while the S&P 500 just turned positive by a couple of points to 1,279. The Nasdaq is advancing 14 points to 2,662. Bingo!
Our Microsoft (MSFT, $27.55, up $0.15) has hit a 100% return! Subscribers, check the Members Area for the updates and we will be back in the morning with some fresh ideas.
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
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Wednesday, January 4th, 2012
12:40pm (EST)
The market is taking a bit of a breather following yesterday’s pop but has moved off the lows and is trying to make a move into positive territory as we head into the second half of trading.
Wall Street seems to be on hold as it awaits the unemployment numbers which start to roll in tomorrow. Thursday could be volatile day for headlines starting with the Challenger Jobs Cuts and the ADP Employment Change report numbers which will be released at 7:30 am and 8:15am (EST), respectively. At 8:30, we get Initial Claims and Continuing Claims. After the open, the ISM Services will take center stage at 10am with an update on Crude Inventories an hour afterwards.
We have been busy this morning with our Weekly Wrap as we added 1 new trade and took action on 3 others. The current trading environment is one of the best in years to write covered calls as option premiums are a little juiced. The current trading range is actually a good thing for our recommendations and we have up to 6 trades that could get “called-away” this month with mid-teen double-digit gains. This would bring our track record to 22-0 since inception. Folks, if you do the math and average double-digit gains, monthly, you will easily double your money in a year. Make 2012 the year you double your portfolio.
As far as our Daily newsletter, we have finished the early math for our 4-year track record and we are proud to say we are at a 70% win rate for all of our recommendations. This is unmatched by most option trading services which has made us the fastest growing newsletter on the internet. We have made 665 option recommendations with 459 winners over the last 4 years which equates to 7-out-of-10 winning trades. You can email us to get our complete 2011 Daily and Weekly Track Records or you can put your email address in the box to the right on the website.
We have gotten off to a great start for 2012 and we see a ton of opportunity to do even better this year. As we head to press, the Dow is down 3 points to 12,394 while the S&P 500 is lower by 1 point to 1,275. The Nasdaq is off by 3 points to 2,646.
We have action to take on a few of our current trades and we have 1 NEW TRADE we are adding so let’s get on it. Subscribers, check the Members Area for the updates.
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
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Friday, December 30th, 2011
12:35pm (EST)
Futures were flat when we hit the rack last night and were at the same levels heading into this morning’s opening bell. Halfway through the session, not much has changed as the bulls try to hold current levels.
With light volume, anything can happen but the last hour of trading could get very interesting. The few traders who are working this week, like us, may try to get ahead of next week’s open by forcing some hands. If there is a big spike past resistance into the close, next week could have fund managers chasing right off the bat. If support breaks, there could be panic on Tuesday morning.
We doubt this happens but we will be watching. In fact, if we see something late, we might take positions so stay locked-and-loaded until 3:59pm (EST).
We will go over our 2011 stats next week but it looks as though our 2011 portfolio will end the year with over $15,000 in profits with our winning percentage near 70% for ALL of our options trades. This means if you started an account with $10,000 you could have made 150% on your money, or, if you started with $15,000, you could have doubled your money this year with our recommendations.
Our Weekly Wrap was 16-0 for 2011 and should be closing 2-3 trades in January that will run the track record to 19-0. Remember, if you go to our subscription page you can get both the Daily and the Weekly for 1-year at a huge savings by purchasing both. You will also get our trading manual, How to Trade Options on Momentum Stocks, at no charge (an $899 value) and shipping is on the house. The trading course comes with ongoing videos and we will be cutting the cord on this deal shortly. Our next video is scheduled for the first week of January and you won’t want to miss it!
We will be back Monday night with the Weekly Wrap and Tuesday morning with our next issue of the Daily. We will be going into 2012 with 8 open trades for our Daily and some of them are doing really well. If you want to take your trading to the next level, come join us.
As we head to press, the Dow is down 34 points to 12,253 while the S&P 500 is off by 2 points to 1,260. The Nasdaq just turned red and is down a half-point. Subscribers, check the Members Area for the last minute adjustments and remember to be on the alert until the closing bell sounds!
Tags: About options trading, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
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Friday, December 30th, 2011
9:05am (EST)
The shortened Wall Street week has been full of surprises but the week and the year comes down to today on if the indexes will finish with a loss or gain on both fronts. Following a flat Tuesday, the bears took a 1% bite out of the major indexes on Wednesday with the bulls getting much of the losses back on yesterday’s rally.
The Dow advanced 136 points, or 1.1%, to settle at 12,287. The index ran green from start to finish and reached a peak of 12,293 which was once again just short of resistance. The blue-chips are still down 7 points for the week but should easily finish the year with a solid gain as the index is up a little over 700 points.
The S&P 500 jumped a lucky 13 points, or 1.1%, to finish at 1,263. The index went out near its high but failed to clear resistance after holding support on Wednesday and Thursday’s open. The S&P is down 2 points for the week but is now up 6 points for the year and today’s action will likely decide who gets the win between the bulls and bears.
The Nasdaq added 24 points, or 0.9%, to close at 2,613. The index was able to recapture the 2,600 level and went out a point off its high. We have been talking about the 2,650 level for the last few weeks and Tuesday’s high was 2,633. The bulls will need to clear 2,618 and 2,653 today to get Tech into positive territory for the week and year.
We have made it no secret Tech has us worried going into 4Q earnings (which start in January) and the Nasdaq can look so ugly at times. However, support seems to hold just as the index appears ready to fall off a cliff. To prove our point, look at Amazon.com (AMZN, $173.86, down $0.03) which ended the day in the red after touching a low of $167 on a downgrade, yet, the Nasdaq was up nearly 1%.
The bears may have wasted a bullet on that call because we think Wall Street is underestimating Amazon’s sales. Sure the Kindle Fire is losing money but we doubt analysts have any clue just how much revenue this company could earn for the current quarter. Earnings are late-January for Amazon.
We could have a busy day with the addition of a trade or two so look for alerts by 11am if we do decide to take action. We usually don’t open new positions ahead of a 3-day weekend but if our upside or downside targets trigger, we may take small positions.
Futures are slightly lower as we head to press and look like this: Dow (-4); S&P 500 (–1); Nasdaq (-2).
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
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Bulls Call Bears Bluff
Tuesday, January 31st, 2012
9:00am (EST)
The bears were throwing a lot of chips into the pot on Monday as they tried to up the ante on a possible Greece, and soon to be Portugal, debt default. The bulls took all day to call but by the end of the session they matched the bet as the market finished flat.
Given the plunge of 1% at the open, it was a victory for the bulls as they held support and nearly pulled off a great comeback by the closing bell. We had a sly grin on our face when we read where one Wall Streeter, who was head honcho for the firm’s “equity division”, said the U.S. appears to be “slowly, slowly in the early stages of decoupling from the eurozone.”
Duh…We told our subscribers this back in early December, Gus. Of course, we would never name names but where has this guy been? We were hoping to see a lift once the European markets closed, which happens at 11:30am (EST) our time, and the late rally back to even got legs once buyers stepped in after lunch.
The Dow fell a half-dozen points, or 0.1%, to finish at 12,653. The blue-chips traded to a low of 12,529 at the open but came within a point of cracking positive territory. We mentioned support yesterday and 12,550 was the test for much of the morning which we said to watch for. Upside resistance remains at 12,800.
The S&P slipped 3 points, or 0.3%, to end at 1,313. The index traded to a low of 1,300.49 but held support and came within spitting distance (0.17 points) of hitting green. Watch the same levels as yesterday for today.
The Nasdaq declined 4 points, or 0.2%, to settle at 2,811. We talked about some of Tech’s strength yesterday and the index actually managed a trip into positive territory (0.30 points) before the closing bell.
Today is the end of the month and January has been good to us as the indexes are showing some fat gains for the year. The Dow is up nearly 4%, the S&P is up nearly 5%, and the Nasdaq and Russell 2000 are showing 8% pops to start 2012.
The talking heads were being Negative Nancy’s yesterday and were shocked to see the turnaround but don’t be surprised to see them mention the “January Barometer” today. The indicator has a history of being fairly accurate and goes by the theory that when the month of January is higher, the market will end higher for the year. If negative, the indexes usually post a decline.
Unless the wheels fall off the bull wagon today, the bulls will likely appreciate the following facts since the 50’s. If the Dow ends January higher, the blue-chips have over an 80% chance of finishing higher for the year with additional gains of nearly 10%, on average. Wow, let’s hope so, right?
Of course, there is a ton of time between now and Christmas and we don’t expect this smooth of a ride all year long.
Subscribers, please hit the Members Area to get the trade updates and stay on your toes on a possible way to play Facebook, which could announce its IPO on Wednesday. We have 2 trades on our Watch List that could do well and we are in the office huddle deciding on if we should make one or both official recommendations or not. We want to see how shares open but the options pits were exploding on these names yesterday. Stay locked-and-loaded and look for a possible New Trade Alert shortly after the open if we take action.
As we head to press, futures look like this: Dow (+54), S&P (+6), Nasdaq (+10).
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