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Tuesday, October 20th, 2009
1:00pm (EST)
The bears took advantage of a weak housing report today and have crashed the earnings party the bulls were ready to have. The Commerce Department said applications for home building permits, a measure of future construction, fell in September by the largest amount in five months. Not a good sign for the housing industry which has been struggling to recover this year.
We mentioned Apple’s (AAPL, $199.00, up $9.14) earnings this morning and we knew $200 would be the new battle ground for the stock. Shares are now trading at a ”premium” according to some analysts and could fall over the near-term now that all of the hoopla is out. And that could be the case but we tend to shy away from buying Apple put options because it is such a strong company. It looks ripe for a short at these levels but I don’t think I’d sleep easy betting against Apple no matter how high shares have run.
I was sure hoping the company would announce a stock-split but that didn’t happen. A 3-for-1 split would put shares at $67 and make it affordable for the retail investor to purchase the stock again. The smartphone market will get even more intense over the next several quarters but Apple is head and shoulders above the competition. And Mac sales are set to EXPLODE.
Caterpillar (CAT, $59.00, up $1.15) also came in with a great report as the company posted earnings of $0.64 a share, blowing-out Wall Street’s estimate of just $0.06 a share. Shares have traded to a high of $61 and the outperformance was attributed to the foreign exchange, lower tax rates and accounting. Revenues came in at $7.3 billion, versus estimates of $7.5 billion but Caterpillar believes the worst is behind us. Quote…the company’s CEO now sees “encouraging signs that indicate a recovery may be underway.”
Yahoo (YHOO, $16.95, down $0.26) reports after the bell and Wall Street is looking for earnings of $0.07 a share on revenue of $1.1 billion. For the second quarter, Yahoo did 16 cents a share and easily doubled 8 cents the Street was looking for. The November 17 calls (YHQKR, $0.85, down $0.10) have traded over 7,000 contracts compared with 3,500 contracts of the November 17 puts (YHQWR, $0.90, up $0.20). That is a 2-to-1 ratio for the bulls and the action is suggesting an 8%-10% move up or down on Wednesday. We’d love to play this one but we are going to sit on the sidelines.
As we head to press, the Dow is down 87 points to 10,005, the S&P 500 is off by 10 to 1,087 while the Nasdaq is lower by 21 points and is trading at 2,155. We have profiled a new trade today and it is in the retail sector. If you are a current subscriber, please check the Members Area NOW for the 1pm Update.
Tags: Apple, Caterpillar, Momentum stocks, option trade picks, options mentoring, options trade picks, Yahoo Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Option Trades | Comments Off
Monday, October 19th, 2009
9:00am (EST)
MARKET COMMENTARY
Futures are pointing towards a higher open this morning after reversing course overnight. There are a number of companies reporting earnings this morning as the bulk of 3Q reports get underway this week.
Hasbro (HAS, $29.52) said it earned $150 million, or $0.99 a share, versus $138 million, or $0.89 a share, a year ago. Wall Street had estimates pegged at $0.93 a share.
Gannett (GCI, $13.00) saw its third-quarter profits fall 53% but results still beat Wall Street’s expectations. The company earned $74 million, or $0.31 a share, compared with a profit of $158 million, or $0.69 a share, in the year-ago period.
As we head to press, Dow futures are higher by 45, to 9,969. S&P 500 futures are up 5, to 1,088, while the Nasdaq 100 futures are showing a 10 point pop to 1,742.
About 25% of the S&P 500 will report earnings this week so we are expecting some volatility. Subscribers, check the Members Area for the trade updates…
EARNINGS
Monday: Apple (AAPL, $188.05, down $2.51), BB&T (BBT, $28.25,down $0.36), Boston Scientific (BSX, $10.02, down $0.08), Eaton (ETN, $60.42, up $0.23), Gannett (GCI, $13.00, down $0.19), Hasbro (HAS, $29.52, up $0.83), Jefferies (JEF, $29.91, down $0.45), Lincare Holdings (LNCR, $31.75, up $0.27) and Texas Instruments (TXN, $22.75, down $0.50).
Tuesday: Biogen Idec (BIIB, $49.20, down $0.59), BlackRock (BLK, $225.55, down $0.61), Brinker International (EAT, $16.50, up $0.36), Coach (COH, $34.11, down $0.60), Coca-Cola (KO, $55.01, up $0.09), Cree (CREE, $40.33, up $0.06), DuPont (DD, $34.10, down $0.47), Forest Laboratories (FRX, $29.66, down $0.52), Gilead Sciences (GILD, $46.17, down $0.46), Intuitive Surgical (ISRG, $255.43, down $3.90), Lexmark International (LXK, $22.15, down $0.44), optionsXpress Holdings (OXPS, $18.17, down $0.09), Peabody Energy (BTU, $41.90, down $0.35), Pfizer (PFE, $17.77, up $0.11), SanDisk (SNDK, $20.98, down $1.02), Sherwin-Williams (SHW, $62.65, down $0.45), Sonic (SONC, $11.04, up $0.30), State Street (STT, $52.92, down $1.83), United Technologies (UTX, $64.89, up $0.49), Western Union (WU, $19.78, down $0.08) and Yahoo (YHOO, $16.81, up $0.29).
Wednesday: Altria Group (MO, $18.27, up $0.02), AmeriCredit (ACF, $16.59, down $0.69), Amgen (AMGN, $61.32, down $0.51), eBay (EBAY, $24.49, down $0.42), Eli Lilly (LLY, $34.44, down $0.06), F5 Networks (FFIV, $42.63, down $0.95), Freeport-McMoRan Copper & Gold (FCX, $75.73, down $0.20), P.F. Chang’s China Bistro (PFCB, $34.88, down $0.12), Piper Jaffray (PJC, $55.77, down $1.63), Stanley Works (SWK, $45.75, down $0.09), Tractor Supply (TSCO, $52.37, down $0.08), U.S. Bancorp (USB, $23.41, down $0.60), VMware (VMW, $44.76, down $0.81) and Wells Fargo (WFC, $30.02, down $1.36).
Thursday: 3M Company (MMM, $76.02, down $0.75), Amazon.com (AMZN, $95.32, down $0.69), American Express (AXP, $34.95, down $0.59), AT&T (T, $25.70, down $0.21), Black & Decker (BDK, $50.20, down $1.00), Bristol-Myers Squibb (BMY, $22.88, down $0.33), Broadcom (BRCM, $29.98, down $0.40), Capital One Financial (COF, $36.35, down $1.77), Chipotle Mexican Grill (CMG, $90.53, down $0.50), Greenhill (GHL, $95.12, down $0.37), Interactive Brokers Group (IBKR, $20.33, down $0.60), JetBlue Airways (JBLU, $5.76, up $0.01), Juniper Networks (JNPR, $26.50, down $0.78), Legg Mason (LM, $32,69, down $1.01), McDonald’s (MCD, $58.78, up $0.58), Merck (MRK, $33.21, down $0.09), Netflix (NFLX, $48.99, down $1.36), Philip Morris International (PM, $50.95, up $0.57), PNC Financial Services Group (PNC, $44.71, down $1.09), Potash (POT, $97.40, up $3.21), Schering-Plough (SGP, $29.29, down $0.20), Travelers Companies (TRV, $48.67, up $0.12) and United Parcel Service (UPS, $57.12, down $0.59).
Friday: Dr. Reddy’s Laboratories (RDY, $20.46, down $0.37), Fortune Brands (FO, $43.18, down $0.43), Honeywell (HON, $37.79, up $0.03), Microsoft (MSFT, $26.50, down $0.21), Schlumberger (SLB, $69.08, up $0.29) and Whirlpool (WHR, $72.73, down $0.67).
Tags: options blog, options track record, options trade picks Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Option Trades | Comments Off
Wednesday, October 14th, 2009
9:05am (EST)
Futures are pointing towards a HUGE open this morning after strong earnings results from Intel (INTC, $20.49) and JPMorgan Chase (JPM, $45.66).
JPMorgan Chase easily beat Wall Street’s expectations, after reporting a profit of $3.6 billion for the quarter. Although the company said loan losses are still high and are likely to remain elevated for some time, the results were jaw-dropping.
JPMorgan said it earned 82 cents a share, up from 9 cents a share in the same quarter a year ago, but they beat estimates by 30 cents, folks! Wall Street was expecting the company to earn 52 cents a share. Wow! Shares are up $2 to $47.66 in early trading.
Of course, Intel also beat Wall Street’s estimates and we have been on this story like grass on dirt. We sent out a News Flash last night alerting our subscribers of the after-hours jump and it looks as though those gains are going to hold. In pre-market trading, shares are up 93 cents, to $21.42.
Ahead of the bell, Dow futures are up 109, or 1.1%, to 9,918. The S&P 500 futures are higher by 15, or 1.5%, to 1,084, while the Nasdaq 100 futures are surging by 25, or 1.4%, to 1,751. All aboard!
Gold continues to set record highs. This morning, the yellow metal hit a high of $1,072 an ounce. Oil is above $75 a barrel for the first time in a year.
Current subscribers can check the Members Area for more detailed instructions on how to play Intel from here on out. Many of you should have made well over 100% on the trades and some of you might reach returns of up to 200%! As always, your comments are always welcomed so send us a line if you cashed out on this huge monster!
Tags: Intel, JPMorgan Chase, options blog, options mentoring, options track record, options trade picks Posted in Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary, Option Trades, Rick's Account | Comments Off
Thursday, October 1st, 2009
1:00pm (EST)
If you are a bull today you might as well head back to camp. The market is taking a beating today as the bears seem to be gaining momentum heading into Friday’s unemployment figures. The Dow is currently down 140 points to 9,570 and you can blame it on today’s ISM number (Institute for Supply Management’s index).
The report showed manufacturing activity in September slipped to 52.6 from 52.9 in August, well below Wall Street’s expectations of 54. The bears loved it although the bulls will argue that it was the second month in a row the reading came in above 50. A reading above 50 indicates growth, and after contracting for 18 months, the bulls will point to the ISM number having back-to-back readings above 50.
Also, adding fuel to today’s sell-off is the fact the Labor Department said new claims for jobless benefits rose more than expected to 551,000. Not good. The Street had been expecting claims to rise to 535,000.
It’s been a volatile week but we have done well by playing what the market is giving us. Nike (NKE, $64.00, down $0.70) has slipped today and our $4.50 stop has been hit. For those of you just joining us, we profiled a Nike call option trade on Tuesday and closed the other half today for a sweet 173% profit. Others bought insurance and banked upwards of 75%. Not bad given the current market environment.
We are also off to a good start in the Abercrombie & Fitch (ANF, $31.85, down $1.03) trade that was profiled in the Members Area this morning. At current levels, the trade has returned 20%.
Friday is shaping up to be war for the bulls and bears. We should have a clear direction on the market before the opening bell rings. If we print 10%, it could get ugly and the bears could have their claws ready. If the unemployment numbers come in better-than-expected than the bulls will lead the next charge higher.
I expect the last hour of trading is going to be crazy as both sides get ready for the Unemployment Report at 8:30am (EST) on Friday…
Rick@MomentumOptionsTrading.com
Tags: ISM numbers, options newsletter, options track record, options trade picks, Rick Rouse, stock trading picks, unemployment report Posted in Economic News, Market Analysis, Option Trades | Comments Off
Wednesday, September 30th, 2009
9:00am (EST)
Nike (NKE, $63.90, up $3.81) is up over 6% in pre-market trading after beating Wall Street’s estimates on Tuesday. For the quarter, the company earned $513 million, or $1.04 a share, versus $511 million, or $1.03 a share, in the year-ago period. Analysts were looking for Nike to earn 97 cents a share.
Although revenue came in slightly lower ($4.8 billion versus $5.43 billion a year earlier), the company did a great job of managing its gross margins and inventory levels. I mentioned Nike in both updates yesterday and we had the opportunity to go long and strong in yesterday’s afternoon update. Good thing because we could be looking at a 150%-200% gain on the call options I mentioned.
In fact, Goldman Sachs (GS, $183.58) came out this morning and slapped a $75 price target on the stock. Looks like we beat Goldman to the punch on this one. Subscribers, check the Members Area for the update on this HUGE winner.
As we head towards the opening bell, futures are pointing to a higher open as the GDP (gross domestic product) number came in better-than-expected. That has helped push the Dow futures higher by 50 to 9,724. The S&P futures are up 6 to 1,061 while the Nasdaq 100 futures are up 8 to 1,723.
Rick@MomentumOptionsTrading.com
Tags: Goldman Sachs, Nike, options blog, options track record, options trade picks, Stock Market Blog Posted in Company Commentary, Earnings, Economic News, Market Analysis, Option Trades | Comments Off
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Housing Starts Drops Market
Tuesday, October 20th, 2009
1:00pm (EST)
The bears took advantage of a weak housing report today and have crashed the earnings party the bulls were ready to have. The Commerce Department said applications for home building permits, a measure of future construction, fell in September by the largest amount in five months. Not a good sign for the housing industry which has been struggling to recover this year.
We mentioned Apple’s (AAPL, $199.00, up $9.14) earnings this morning and we knew $200 would be the new battle ground for the stock. Shares are now trading at a ”premium” according to some analysts and could fall over the near-term now that all of the hoopla is out. And that could be the case but we tend to shy away from buying Apple put options because it is such a strong company. It looks ripe for a short at these levels but I don’t think I’d sleep easy betting against Apple no matter how high shares have run.
I was sure hoping the company would announce a stock-split but that didn’t happen. A 3-for-1 split would put shares at $67 and make it affordable for the retail investor to purchase the stock again. The smartphone market will get even more intense over the next several quarters but Apple is head and shoulders above the competition. And Mac sales are set to EXPLODE.
Caterpillar (CAT, $59.00, up $1.15) also came in with a great report as the company posted earnings of $0.64 a share, blowing-out Wall Street’s estimate of just $0.06 a share. Shares have traded to a high of $61 and the outperformance was attributed to the foreign exchange, lower tax rates and accounting. Revenues came in at $7.3 billion, versus estimates of $7.5 billion but Caterpillar believes the worst is behind us. Quote…the company’s CEO now sees “encouraging signs that indicate a recovery may be underway.”
Yahoo (YHOO, $16.95, down $0.26) reports after the bell and Wall Street is looking for earnings of $0.07 a share on revenue of $1.1 billion. For the second quarter, Yahoo did 16 cents a share and easily doubled 8 cents the Street was looking for. The November 17 calls (YHQKR, $0.85, down $0.10) have traded over 7,000 contracts compared with 3,500 contracts of the November 17 puts (YHQWR, $0.90, up $0.20). That is a 2-to-1 ratio for the bulls and the action is suggesting an 8%-10% move up or down on Wednesday. We’d love to play this one but we are going to sit on the sidelines.
As we head to press, the Dow is down 87 points to 10,005, the S&P 500 is off by 10 to 1,087 while the Nasdaq is lower by 21 points and is trading at 2,155. We have profiled a new trade today and it is in the retail sector. If you are a current subscriber, please check the Members Area NOW for the 1pm Update.
Tags: Apple, Caterpillar, Momentum stocks, option trade picks, options mentoring, options trade picks, Yahoo
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Option Trades | Comments Off