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Friday, June 25th, 2010
9:00am (EST)
The bears continued their assault on the bulls Thursday following a pattern of late-day sell-offs that has carried the market generally lower all week.
Yesterday’s weakness came after the Labor Department reported initial jobless claims declined 19,000 week-over-week to 457,000 which was roughly in-line with the 460,000 that had been expected.
The market also got a worse-than-expected durable goods number, and the ongoing debate over the pending financial reform bill had an impact on the Financial stocks. More on this in a minute…
As a result, the Dow dropped 146 points, or 1.4%, and closed at 10,152. The index finished right near its low and took out the 20-day moving average (MA) in the process. If we get a repeat today and slip below 10,000 then next week could be a doozy.
The S&P 500 fell 18 points, or 1.7%, to settle at 1,073. The level Wall Street will be watching today is the 1,040 mark and if that is taken out then we could see a triple-digit index real soon.
The Nasdaq gave back 36 points, or 1.6%, to finish at 2,217. More importantly, the index failed support at 2,240 and looks like it could be headed to 2K.
Research In Motion (RIMM, $58.58, down $1.06) is down $3 in pre-market trading after reporting earnings after the close on Thursday.
The company posted a profit of $769 million, or $1.38 a share, versus $643 million, or $1.12, in the year earlier period. Revenue rose 24% to $4.2 billion. Wall Street was looking for $1.34 a share, on revenues of $4.4 billion.
RIMM said it shipped 11 million units and added 4.5 million new subscribers. These figures were at the at the low end of the company’s forecast range, but fell short of the 11.5 million and the 5 million new subscribers that analysts had penciled in.
Overall, this was a solid report from RIMM, but we showed you the writing on the wall yesterday. The company plans to unveil a new line of handsets, perhaps by the end of the summer, but RIMM is playing catch-up to other rivals now. It used to be the other way around.
The “other” big news this morning is the financial regulation reform bill appears closer to being signed as Congress pulled an all-nighter to get the final details hammered out. The bill is expected to be signed next week by the president and brings sweeping changes to Wall Street and some of their business practices.
Futures are pointing towards a slightly lower open this morning as the bears try to close the week with a sweep. They have been making noise all week and have shaved about 4% off the major indexes since Monday.
As we head to press, Dow futures are down 14 points to 10,085 while the S&P 500 futures are off by 2 points to 1,068. The Nasdaq 100 futures are lower by 3 points to 1,846.
Tags: momentum options trading, option picks, options alerts, Research in Motion, RIMM earnings, stock options trading
Posted in Earnings, Financial Stocks, Trading Psychology | Comments Off
Thursday, June 24th, 2010
1:00pm (EST)
Second quarter earnings season is right around the corner, but we get an early present with Research In Motion (RIMM, $58.82, down $0.82) reporting after the close today. The announcement is so important and will offer a sneak peek into how much the smart-phone playing field is leveling.
Here’s a hint.
Apple’s (AAPL, $270.00, down $0.97) iPhone had a 15% share of the global smart-phone market by the end of the first quarter. A year before that, Apple had a little over 10%.
Google’s (GOOG, $477.76, down $4.29) Droid/ Android gadgets currently have a 10% market share. What’s scary for RIMM, and why we think they could disappoint Wall Street, is that Goog’s only had about 2% of the market a year ago.
Both Apple and Google have just launched new phones. We hate to say it, but RIMM has been asleep at the wheel for years! They use to OWN the smart-phone market, and if they don’t wow Wall Street after the bell then we could easily see a 10% or more drop in their shares.
RIMM has missed the droves of new people getting a smart-phone, and you can almost bet the top two choices are going to be the iPhone or a Droid. This could get interesting.
As far as the market goes, the bears are looking for blood, and they have the bulls backed into a corner. We have been calling for a correction and last week delayed our thesis but the charts aren’t lying, folks. We could be setting up for a NASTY correction by tomorrow, and next week could be brutal if you are a bull.
The Dow is currently down 88 points to 10,210 while the S&P 500 is off by 12 to 1,079. The Nasdaq is getting punished for 25 points and was last seen at 2,228. Subscribers, check the Members Area for the updates.
Tags: momentum options trading, option picks, options alerts, Research in Motion, RIMM, RIMM earnings, stock options trading
Posted in Apple, Company Commentary | Comments Off
Thursday, April 8th, 2010
9:00am (EST)
Things could get interesting…
Wednesday was whacky and the battle between the bulls and bears is starting to heat up a bit. The market was facing a lot of headwinds yesterday and we figured trading would be tepid heading into the 10-year note auction. That was well-received but after battling back to near even, the bulls got a curveball from one of the Fed members who said interest rates needed to go to 1% sooner rather than later.
The best email that came across our desk yesterday from an obvious bull…
“Hoenig is an a%$hole.”
There were renewed concerns about Greece’s debt and the market got a nasty slider when consumer borrowing came in lower than expected.
Greece’s borrowing costs hit a new high which spooked overseas markets on concerns the country could default on its debt. Meanwhile, consumer borrowing declined by $11.5 billion in February as Wall Street had expected a modest gain of $500 million.
It was just too much for the bulls to overcome as all three major indexes ended the day in the red. The Dow lost 73 points, or 0.7%, to settle at 10,897 after trading to a low of 10,845. The index broke below its 10-day moving average for the first time in two months so we will have to watch this carefully.
The S&P 500 fell 7 points and closed at 1,182 and traded to a low of 1,177. We needed the index to hold 1,175 which was a good sign. The Nasdaq slipped 6 points, or 0.2%, to finish at 2,423 and easily held the 2,400 level.
Palm (PALM, $4.62, up $0.77) rebounded in a big way yesterday, gaining 20%, on renewed speculation that it will be rescued by someone. The latest marriage is to the Chinese company, Lenovo. “Sunday, Bloody Sunday” could be an appropriate theme song for this hookup.
 PALM Hourly Chart There is a trade for Palm but we aren’t so sure the company deserves a premium. Yes, Palm has a nice OS platform but any company buying them will only be playing catch-up to Apple (APPL, $240.60, up $1.06) and to a lesser degree, Research In Motion (RIMM, $69.83, down $0.26).
To us, it just doesn’t make sense for someone to buy Palm when it’s clear they could be headed for bankruptcy court, maybe, but more than likely a deal will get done sometime this year.
As far our agenda for today, we will be watching the retail reports on same-store sales for March. February sales were strong for some companies and there are a couple of names that are reporting earnings as we go to press. We will go over them in our afternoon update.
There won’t be much market-moving economic data besides what we getting this morning and the bulls will have another uphill battle today. Dow futures are currently down 42 points to 10,807 while the S&P 500 futures are lower by 5 to 1,173. The Nasdaq 100 futures are off by 7 points to 1,967.
Tags: AAPL, option picks, option signals, options alerts, Palm, Research in Motion, RIMM, stock options trading
Posted in Apple, Earnings, Market Commentary | Comments Off
Thursday, April 1st, 2010
9:00am (EST)
We knew going into yesterday’s open the market was going to have a rough session after the bulls after some disappointing economic news. The market started off in the red but the losses were contained as the bulls came in and started buying at the lows shortly after the bell. The rest of the day was a struggle and the bears eventually won out with the market finishing near the bottom end of Wednesday’s range.
The Dow dropped 50 points, or 0.5%, and settled at 10,856. The index managed a quick trip into positive territory at one point and touched a high of 10,907 after dropping to 10,832 shortly after the open.
The S&P 500 slipped 4 points, or 0.3%, to settle at 1,169 after touching a low of 1,165. As long as the index holds 1,150, that’s how long we stay bullish. Meanwhile, the Nasdaq gave up a 12-pack, or 0.5%, and closed just below our 2,400 level at 2,397.
Yesterday was the end of the quarter and we will go over the March and quarterly gains in the Weekly Wrap. We will also give you a scorecard on how well we did as we will be updating the portfolio to reflect our recently closed trades.
The big news after the bell last night was Research In Motion’s (RIMM, $73.97, down $0.95) quarterly report. On Monday, we thought there was a chance the company might wow Wall Street but as the week wore on, and with the Apple (AAPL, $235.00, down $0.85) news yesterday, we kind of felt RIMM was a sitting duck.
RIMM missed estimates and in after-hours last night shares quickly fell to $68 but later recovered to close above $70. The company earned $710 million, or $1.27 a share versus a profit of $518 million, or $0.90 a share, in the year ago period. Wall Street was expecting $1.28.
Revenue came in at $4.08 billion, but fell short of the company’s forecast of $4.2-$4.4 billion and Wall Street’s forecast of $4.3 billion in revenue.
The 5% drop in after-hours has carried over into this morning as shares are trading at $70.25 in early action.
RIMM still grew its subscriber base by 4.9 million, better than the company’s forecast of between 4.4 million and 4.7 million, but we feel they could lose a lot of customers once Apple launches a CDMA phone. Analysts will argue RIMM is still growing globally but even if it is Apple will be too.
RIMM has an overall subscriber base of nearly 41 million users but a recent survey points towards many of them might jumping ship once Apple does come out with a new iPhone. Perhaps the best way for RIMM to attack this problem would be to scoop up Palm (PALM, $3.76, flat) on the cheap.
Palm has a nice operating system and some slick features but even a move like this might not improve RIMM’s chances of holding off Apple. In fact, Palm would likely want a higher price than $7-$8 which would represent a 100% premium and maybe fair value but they would want more considering shares were recently in the teens before the plunge.
This smartphone wars are only beginning and now, with prices coming down, it will only intensify.
Despite RIMM’s miss, futures are pointing towards a strong open for Tech as the Nasdaq 100 futures are higher by 10 points this morning. Dow futures are up 70 while the S&P 500 futures are higher by 7.
Tags: AAPL, Palm, Research in Motion, RIMM, stock option picks, stock option signals
Posted in Apple, Earnings, Market Analysis | Comments Off
Friday, December 18th, 2009
9:10am (EST)
Futures are pointing towards a higher open this morning following yesterday’s selloff. The Dow ended Thursday with a 132 point drop and settled at 10,308 while the S&P 500 fell 13 and finished at 1,096.
Today is a quadruple witching day which means contracts for stock index futures, stock index options, stock options and single stock futures all expire today. It is what is known as “Quadruple Witching” day on Wall Street and it can be extreme volatility depending on the current market environment.
We mentioned yesterday that we expected the market to power higher today but given the lack of volatility over the past couple of months, we don’t believe we that will be the case today.
We had a number of companies report earnings after the bell last night and Wall Street seems to like what they heard. Research In Motion (RIMM, $63.46, down $1.21) is over $70 in pre-market trading after reporting strong earnings that beat analysts’ expectations. The company reported earnings of $1.10 a share versus estimates of $1.04. Revenue came in at $3.92 billion which was ahead of the $3.78 billion the Street was calling for.
Oracle (ORCL, $22.88, down $0.24) also came in with better-than-expected results while Palm (PALM, $11.72, up $0.11) however, reported a wider loss than expected as their smart-phone sales declined. Palm is back below $11 in pre-market trading.
Elsewhere, Celgene (CELG, $50.62, down $1.16) is up 9% in early trading to $55 after a late-stage study show its drug, Revlimid, significantly slowed the progression of sickness in patients following a type of stem cell treatment.
We have much more to talk about this morning in the Members Area so let’s get to it. As we head to press, the Dow futures are up 22 points.
Tags: call option trading, Celgene, chicken option trades, Covered Calls, momentum stock option trading, option trade picks, option trading online, options blog, options mentoring, options newsletters, options track record, oracle, Palm, put option trading, Research in Motion, Rick Rouse, stock option trade pick service, straddle option trades, strangle option trades, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Earnings, Hot Stocks | Comments Off
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Make Or Break Quarter For RIMM?
Thursday, June 24th, 2010
1:00pm (EST)
Second quarter earnings season is right around the corner, but we get an early present with Research In Motion (RIMM, $58.82, down $0.82) reporting after the close today. The announcement is so important and will offer a sneak peek into how much the smart-phone playing field is leveling.
Here’s a hint.
Apple’s (AAPL, $270.00, down $0.97) iPhone had a 15% share of the global smart-phone market by the end of the first quarter. A year before that, Apple had a little over 10%.
Google’s (GOOG, $477.76, down $4.29) Droid/ Android gadgets currently have a 10% market share. What’s scary for RIMM, and why we think they could disappoint Wall Street, is that Goog’s only had about 2% of the market a year ago.
Both Apple and Google have just launched new phones. We hate to say it, but RIMM has been asleep at the wheel for years! They use to OWN the smart-phone market, and if they don’t wow Wall Street after the bell then we could easily see a 10% or more drop in their shares.
RIMM has missed the droves of new people getting a smart-phone, and you can almost bet the top two choices are going to be the iPhone or a Droid. This could get interesting.
As far as the market goes, the bears are looking for blood, and they have the bulls backed into a corner. We have been calling for a correction and last week delayed our thesis but the charts aren’t lying, folks. We could be setting up for a NASTY correction by tomorrow, and next week could be brutal if you are a bull.
The Dow is currently down 88 points to 10,210 while the S&P 500 is off by 12 to 1,079. The Nasdaq is getting punished for 25 points and was last seen at 2,228. Subscribers, check the Members Area for the updates.
Tags: momentum options trading, option picks, options alerts, Research in Motion, RIMM, RIMM earnings, stock options trading
Posted in Apple, Company Commentary | Comments Off