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Wednesday, May 23rd, 2012
9:00am (EST)
Yesterday’s market action reminded us of Saturday’s Preakness horse race as the bears “had another” to claim the photo-finish win. The bulls led the entire session as the Dow and S&P were looking to make it back-to-back wins for the first time since late April but the bears won the race as the closing bell sounded.
The Dow slipped 2 points, or 0.01%, to finish at 12,502. The blue-chips tested 12,600 like we said they would but had trouble clearing this level as they attempt to make a run at 12,800. Yesterday’s low was 12,447 but the close above 12,500 was positive.
The S&P was up less than a point and settled at 1,316 after reaching a peak of 1,328. The move above 1,325 could be a clue that 1,350 is still in play but we are waiting for 1,334 to print as confirmation.
The Nasdaq fell 8 points, or 0.3%, to close at 2,839. Tech kissed a high of 2,867 before fading down to 2,823. The close above 2,825 was encouraging but resistance at 2,850 needs to be cleared as confirmation for a possible run back to 2,900.
Side Chart Notes: The Russell 2000 fell 5 points to end at 759 while the S&P Volatility Index closed just under the 22.50 level at 22.48, up 0.47.
Facebook (FB, $31, down $3.03) continued its freefall while its CEO enjoys the honeymoon, literally. Word has it that Mark and his longtime gal tied the knot, which is cool, and well deserved, but the timing seemed a little weird to us.
Most CEO’s don’t plan on getting married the day after their company goes public but a $20 billion bankroll sure makes the places and things you can do seem unimaginable. Good for Mr. and Mrs. Zuck but shares are starting to suck and were down another 9% yesterday.
The only reason we brought you this story, because we are tired of typing the name, is because the options should be listing in a week or so for Facebook. The premiums on the call and put options will be expensive and we might have to get creative but we plan on dabbling in them once they list.
Futures are showing a nasty open this morning after being weak for much of the night. Dow futures are down 95 points to 12,381 while the S&P 500 futures are lower by 11 points to 1,303. The Nasdaq futures are declining 21 points to 2,514.
Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Futures, Market Analysis, Market Commentary, VIX | Comments Off
Tuesday, January 31st, 2012
12:45pm (EST)
The bulls were making a push towards resistance on renewed optimism that a deal with Greek bondholders and euro zone officials could be reached but got stymied by worse-than-expected economic news. The headlines were “negative” due to the misses but the numbers were still pretty good for the most part despite what the talking heads are saying.
The Case/Shiller 20-City Home Price Index fell 3.7% in November while the Chicago Purchasing Managers report showed a reading of 60.2 versus expectations for a reading of 63. Meanwhile, Consumer Confidence came in at 61.1 versus a forecast for print of 68. These are solid numbers but the market isn’t seeing that way, yet.
As a result, the bears saw a little daylight to push support one last time. While there remains a ton of headline risk this week, we still need to be cautious of a pullback although we are hoping the bulls make one last push towards the 52-week highs.
We can afford to be a little aggressive due to our incredible month but we are taking smaller positions in case the bears crack a couple layers of support.
The Financial stocks have turned positive which is a good sign as the Financial Select Spiders (XLF, $14.15, up $0.05) are trying to hold support and make another push at resistance which is up ahead at $14.50.
As we head to press, the Dow is down 56 points to 12,597 while the S&P is off by 3 points to 1,309. The Nasdaq is lower by 7 points to 2,805.
We are adding 1 more NEW TRADE today so we have to roll.
Subscribers, please check the Members Area for the updates. Also, today is the last day to take advantage of our special offer to get the Daily and Weekly publications for one low price. We are also including our options trading manual, How to Trade Options on Momentum Stocks, at no charge. This package comes with bi-monthly videos that show you how to read charts and find trades.
We have set up a special tab on our subscription page where you will see both the Daily and the Weekly in a package deal that reads Annual Subscription to Daily and Weekly Wrap. You will not need a coupon for this deal and the savings are over 65%. The tab will be removed on Wednesday.
https://secure.momentumoptionstrading.com/amember/signup.php
Do the paperwork and we will send out our option trading course to you as soon as we get your order and provide you access to our videos right away.
We will be back in the morning with our next update.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Economic News, Financial Stocks, Market Analysis | Comments Off
Friday, January 27th, 2012
9:00am (EST)
The bulls made a run at the April/ May 2011 highs on Thursday and now the Wall Street pros and talking heads are calling for a pullback. Funny thing is, they have been calling for a correction all month. Economic news was decent and earnings once again came in above expectations but Wall Street was right, the market “pulled back” yesterday.
A bigger-than-expected jump in durable-goods orders, which came in at 3% versus expectations for a rise to 2%, was the good news. The semi-bad, unemployment edged-up as Initial Claims jumped 21,000 to 377,000. This is still below 400K and we said to watch this rise in January. If claims can stay below 400,000 in February, and maybe improve, then the bulls might still have some gas in the tank.
After 4 steps forward, housing took one step back as sales of new single-family homes fell for the first time in four months in December. This was expected in our books as homebuyers usually focus on the holidays in December if they didn’t rush to get into the new house by Christmas or knew the paperwork wouldn’t be finished in time.
If we can get some rebound numbers in February, which starts next Wednesday, then the rally might have further to run. It’s been a warm winter here on the Left Coast this year.
As far as the official numbers -
The Dow dropped a double-deuce (22 points), or 0.2%, to close at 12,734. The blue-chips reached a peak of 12,842, which triggered our 12,800 target we gave back in November, while the low was 12,695.
The S&P 500 slipped 8 points, or 0.6%, to settle at 1,318. The index kissed 1,333 but traded outside our 1,325-1,350 zone after touching a low of 1,313 with an hour to go in yesterday’s session.
The Nasdaq fell 13 points, or 0.5%, to finish at 2,805. Tech traded up to 2,834 and held our 2,800 target after kissing 2,794. We have said to watch 2,887 which is the 52-week high for the index and have mentioned a run to 3,000 could come on fluff.
The S&P Volatility Index (VIX, 18.57, up 0.26) traded down to 16.80 at the open and we have been saying for months the VIX was would move from the mid-30’s, down to 22.50, and then down to 15 on a continued run by the bulls. The “fluff’ should get the VIX down to 15 but we also realize the VIX could trade down to 12. For news subscribers, a declining VIX is bullish.
A few weeks ago we said to be prepared for a pullback in February which doesn’t start until next Wednesday and the first full week of February isn’t until next Monday. With ALL of the suit-and-ties, talking heads, and everyone else going on record this week and saying this week is the top, maybe the market ignores them until February officially starts.
This leaves a lot of room for a run past resistance and the “fluff” could give Wall Street fund managers fits because they are already underperforming the market. This could also get some money off the sidelines from individual investors. The market could also get some positive Greece news today or next week which could also extend a possible 4-week rally into next but the bulls have to hold their lead today which we will cover in the afternoon update.
Then again, the market could pull back but it will take a lot to change the TREND and we have support pegged.
We have closed 3 more winning call option trades this week for profits of 114%, 58% and 107%. We may close one or two more trades today and our 2012 CLOSED Track Record is now 16-1 for the Daily and 7-0 for the Weekly Wrap. Let’s keep the momentum going.
Futures are lower as we head to press and look like this: Dow (-55), S&P 500 (-6), Nasdaq (-7). Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, VIX, weekly options, what are options
Posted in Market Analysis, Market Commentary, Trade Update | Comments Off
Wednesday, January 25th, 2012
1:15pm (EST)
Futures were strong across the board late last night following Apple’s (AAPL, $445.58, up $25.17) unbelievable quarter but when we saw futures mixed this morning, we knew the bulls would have trouble breaking through resistance. The bears have had the leverage this week as Greece continues to give Europe fits although the Fed’s cautious statements have helped matters.
The Federal Open Market Committee (FOMC) kept the range for the federal funds rate at 0%-0.25%, and repeated interest rates are likely to remain “exceptionally low” but moved the time frame even further out to late 2014. This a big change from the committee’s previous statements, which said in December that rates were likely to remain near dirt levels through at least mid-2013.
Although the markets got a lift on the news, we have been preparing for a pullback and we have used several indicators to help us call this 5-week rally. We have been questioning what will be the next catalyst to take the market higher once earnings season is over and we also said in early November when the Dow was at 11,800 that the index would rally 1,000 points to 12,800. We backed that up by going long a number of call options in which we are still ringing the resister on.
We also worked over the Christmas holidays when the Wall Street pros like to take a break and we said they would miss the rally when they got back. Sure enough, coming into the week, the Dow and S&P were up 4% for the year while the Nasdaq was showing a gain of 7%.
While we would love to see a continued rally, it feels like the market is topping and we want to make sure our portfolio is lean once there is a correction. The good news is that we have continued to play the upside by rolling into new trades while closing half positions in others along the way.
If the market can clear resistance, don’t worry, we won’t miss anything as there will be a wave of buying from Wall Street fund managers and individual investors. However, the headlines aren’t there, yet, for the bulls to run to new highs.
It remains to be seen if there will be a significant pullback and where support might hold but the choppy action is telling us something.
As we head to press, the Dow is down 4 points to 12,671 while the S&P is up a point to 1,315. The Nasdaq is showing a gain of 14 points and is at 2,801. The high for Tech has been 2,804 and it will be interesting to see if the bulls close above or below 2,800 by the close.
We have action to take on a few of our profitable positions so let’s go see where we are at. Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Hot Stocks | Comments Off
Friday, January 6th, 2012
9:00am (EST)
The market started yesterday’s session with a 1% drop at the open but the bears are having a hard time keeping the bulls pinned down. Yesterday’s strength came from an unlikely source but one that packs a lot of punch. Tech has shown some mojo this week as some of the oldies-but-goodies have led the charge higher.
We said in our Weekly Wrap on Monday that some of the larger caps would have to pick up the slack – and the Financial stocks would need to rebound with 4Q earnings starting next week in order for the market to make its next push higher. So far, so, so good.
Microsoft (MSFT, $27.68, up $0.28) has quietly made a move from under $26 before Christmas to nearly $28 which may not seem like much but oh is it ever. The 7% move in the stock has allowed our subscribers to enjoy a 108% gain in the call options we recommended. The charts are pointing to a test to the mid-$30’s sometime in 2012 so we may have to roll this trade into some later dated options as well.
Think about that for a second. In order to make a 100% return on shares of Microsoft, you would need the stock to go from $26 to $52. Considering the stock has been in a trading range of $22-$30 for a few years, this isn’t happening, especially in 6 weeks which is how long it took to play the options.
Also, to buy a 100 shares of Microsoft, it would have cost you $2,600. To buy 10 call option contracts (which controls 1,000 shares) it would have cost you $950, or $95 per option contract. The call options we recommended are now going for $2.70, or $270 per contract. In other words, $950 to $2,700 in 40 days. Not bad.
Cisco (CSCO, $18.92, down $0.07) is within spitting distance of breaking the $20’s after kissing $19 exactly over the past 2 trading sessions. Shares could be of legal drinking age by February or it will be the fastest “double-top” in history if shares retreat. We were recently “called-away” from our Cisco shares for our Weekly Wrap portfolio which was 1-of-the-16 winning trades from 2011 for our Covered Call portfolio.
Bank of America (BAC, $6.31, up $0.50), which is a CURRENT trade or ours as well, surged over 8% yesterday after opening at $5.75. There was a TON of action in the option pits as the BAC January 6 calls (BAC120121C00006000, $0.47, up $0.29) surged 161% after opening at 16 cents.
Even more impressive were the juicy gains the WEEKLY options made. These options expire TODAY but the BAC January 6 WEEKLY calls (BAC12010600006000, $0.33, up $0.30) soared a sizzling 1,000% after opening for two cents. Yes, 2 pennies!
Even though this week hasn’t felt like a breakout, it has been. Support has held like a rock all week and the market has made higher highs and higher lows. The bulls still face headwinds and we have already been exiting trades by closing half positions but we got the top rolled back and we are looking for more action.
The Dow started Thursday’s session with a triple-digit loss but managed to close the gap to end with a loss of only 3 points. The index touched a low of 12,362 and we have mentioned prior resistance at 12,350 should hold as short-term support. Check. There is further support at 12,200 and then 12,000 but we are still expecting a push towards 12,600 and possibly 12,800-13,000 – if 4Q earnings come in strong next week.
The S&P 500 added 4 points to finish at 1,281 after testing a low of 1,265. The 1,250 level has stuck all week and there is backup at 1,225-1,200. However, now that 1,275 is cleared, look for the bulls to push 1,300-1,325.
The Nasdaq jumped 22 points to settle at 2,669. Tech traded to 2,673 and we said if the 2,650 level was cleared on the close we could see a little run to 2,675-2,700 which is where the next big battle takes place. With Cisco and Microsoft pushing 52-week highs, and Apple (AAPL, $418.03, up $4.59) which is just $8-and-change away from it 52-week high, dare we say Nasdaq 3,000?
Futures are up but stay guarded. While we do think a test do the next layer of resistance is coming and 4Q earnings could surprise, we worry about February and what will be the next catalyst to take the market higher (or lower?). Europe, war and oil, White House bickering, and unemployment can offer nasty headlines and are the bears’ wild cards.
As we head to press, futures look like this: Dow (+44), S&P 500 (+5); Nasdaq 100 (+7).
Special Alert: We could be very busy this morning as we close out a few profitable trades and add up to 2 NEW TRADES. We have some beautiful charts to show you today so make sure you check them out inside the Members Area. We will send out a Trade Alert if we take action but we normally like to see how some of the stocks we are following open.
Subscribers, check the Members Area for the updates and stay locked-and-loaded.
Tags: BAC calls options, binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, MSFT, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Company Commentary, Covered Calls, Hot Stocks, Market Analysis, Market Commentary | Comments Off
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Bears Have Another, Facebook (FB) Getting Zuckerberged
Wednesday, May 23rd, 2012
9:00am (EST)
Yesterday’s market action reminded us of Saturday’s Preakness horse race as the bears “had another” to claim the photo-finish win. The bulls led the entire session as the Dow and S&P were looking to make it back-to-back wins for the first time since late April but the bears won the race as the closing bell sounded.
The Dow slipped 2 points, or 0.01%, to finish at 12,502. The blue-chips tested 12,600 like we said they would but had trouble clearing this level as they attempt to make a run at 12,800. Yesterday’s low was 12,447 but the close above 12,500 was positive.
The S&P was up less than a point and settled at 1,316 after reaching a peak of 1,328. The move above 1,325 could be a clue that 1,350 is still in play but we are waiting for 1,334 to print as confirmation.
The Nasdaq fell 8 points, or 0.3%, to close at 2,839. Tech kissed a high of 2,867 before fading down to 2,823. The close above 2,825 was encouraging but resistance at 2,850 needs to be cleared as confirmation for a possible run back to 2,900.
Side Chart Notes: The Russell 2000 fell 5 points to end at 759 while the S&P Volatility Index closed just under the 22.50 level at 22.48, up 0.47.
Facebook (FB, $31, down $3.03) continued its freefall while its CEO enjoys the honeymoon, literally. Word has it that Mark and his longtime gal tied the knot, which is cool, and well deserved, but the timing seemed a little weird to us.
Most CEO’s don’t plan on getting married the day after their company goes public but a $20 billion bankroll sure makes the places and things you can do seem unimaginable. Good for Mr. and Mrs. Zuck but shares are starting to suck and were down another 9% yesterday.
The only reason we brought you this story, because we are tired of typing the name, is because the options should be listing in a week or so for Facebook. The premiums on the call and put options will be expensive and we might have to get creative but we plan on dabbling in them once they list.
Futures are showing a nasty open this morning after being weak for much of the night. Dow futures are down 95 points to 12,381 while the S&P 500 futures are lower by 11 points to 1,303. The Nasdaq futures are declining 21 points to 2,514.
Subscribers, check the Members Area for the updates.
Tags: binary options, call options, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Futures, Market Analysis, Market Commentary, VIX | Comments Off