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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
Thursday, January 5th, 2012
9:00am (EST)
The market spent much of Wednesday’s session trying to get back to even after starting the day lower. Following Tuesday’s pop higher, we expected a flat day or pullback as the bulls seemed reluctant to go all-in with today’s unemployment numbers due out which we will go over in a minute.
As far as the Santa Claus rally that the talking heads have forgotten about, it came and went unnoticed which is fine by us. We mentioned over the holidays that Wall Street and some of the pros like to take the last 10 days off of the year and that the “Santa” rally officially begins the last 5 trading days of the year and the first 2 of the New Year.
Although last week was slightly negative and yesterday was a wash, the gains on Tuesday were good enough to say this phenomenon came true again this year. The Dow gained 1.6%, or 200 points, while the S&P 500 and Nasdaq advanced 1.9%, or 23 and nearly 50 points, respectively.
As far as Wednesday’s action, the Dow gained 21 points to finish the session at 12,418. The blue-chips traded to a high of 12,430 while the low was 12,337 which was prior resistance and is now short-term support. We are still expecting a run to 12,575-12,600 with a shot at 12,800 if the bulls can hold current levels and get some more good news.
The S&P added a quarter-point to settle at 1,277. The index tested a low of 1,268 and held support while the high for the day was 1,278. We are still expecting a run up to 1,300-1,325 with short-term support holding at 1,250.
The Nasdaq fell a third of a point to end at 2,648. Tech briefly traded in the green and above 2,650 to a peak of 2,653 but spent much of the session in the red after testing a low of 2,627 at the open. We were looking for 2,625 to hold with backup at 2,600. Some of the bigger Tech names could get the Nasdaq past 2,675-2,700 if earnings come in better-than-expected but this could be wishful thinking if we continue to stall at 2,650.
The jobs numbers were good/ bad and we will cover the details this afternoon. We also have a chart we want to show you on a stock we are sure many of you are pretty familiar with.
As far as futures, they are pointing towards a slightly lower open. Dow futures are down 33 points to 12,323. The S&P futures are lower by 5 points to 1,268 while the Nasdaq futures are showing a decline of 4 points to 2,324.
We have a lot to cover this morning so let’s get on it. 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 Market Analysis, Market Commentary | Comments Off
Tuesday, January 3rd, 2012
1:35pm (EST)
We mentioned last night although Christmas is over, the Santa Claus rally officially had two more trading days…
The market is getting a nice pop today following good news from overseas as strong manufacturing numbers from Australia, China, and India put Wall Street in a good mood before the opening bell. Germany also saw a lower unemployment rate this morning while here at home, the ISM Index and Construction Spending numbers came in better-than-expected.
China’s PMI (Purchasing Manager Index) numbers were released over the weekend and showed expansion in December after posting a reading of 50.3, up from 49 in November. Non-manufacturing industries for China were also up and came in at 56 versus a print of 49.7 in November. Both figures caught most economists off guard as a reading over 50 shows expansion. In India, PMI rose the most in 6 months.
Of course, the next hurdle, will be the FOMC Minutes which will be released at 2pm (EST) sharp. There is a chance for a “QE3” announcement but the Fed has been steady in its comments and will likely sit on the sideline with Europe simmering down somewhat.
The Dow is up 186 points to 12,404 while the S&P is higher by 19 to 1,276. The Nasdaq is gaining 39 points and is at 2,643. The surge higher has meant good news for our open positions so let’s go see where we are at. We also have 2 NEW TRADES we are releasing today.
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 Market Commentary, Option Trades, Trade Update | Comments Off
Tuesday, January 3rd, 2012
9:00am (EST)
The bulls were facing an uphill battle on Friday as they tried to end the week and 2011 on a positive note. The major indexes were slightly lower heading into the last trading day of the year and futures were flat heading into the opening bell. Following a strong rally and rebound on Thursday, this wasn’t a good sign for a run past resistance.
History was also against the bulls as the Nasdaq had closed lower 9 of the last 10 years. Make it 10-for-11. Before the slide, Tech was up 29 years in-a-row from 1971 thru 1999. The S&P 500 had been down 7-out-of-8 on the last trading day for the year and that streak was extended to 8-for-9.
We were hoping for a “flat” day but the drift lower persisted into the close despite light volume. As you will see, the longer-term charts are still bullish for 2012 even if there is a significant pullback near-term. While we are still hopeful this is not the case, the market will face a number of headwinds this week and next with the start of 4Q earnings season.
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If you are not a subscriber but would like to read more and check our chart work for the Dow, S&P 500 and the Nasdaq please click here. We are one of the fastest growing stock options trading advisors on the internet and we are one of the few option newsletters which posted a powerful 2011 return. We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter. Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis. Sign-up now and receive access instantly!
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 Market Analysis, Market Commentary, Money Management, Option Trades, Trade Update | Comments Off
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Knock, Knock, Knocking on Resistance
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