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Tuesday, November 3rd, 2009
9:05am (EST)
When Warren Buffet Speaks, people listen…
It’s no secret, despite a struggling economy, that M&A (Merger and Acquisition) has been hot. Berkshire Hathaway (BRK.A, $98,750, down $250.00) said it will acquire the 77% of Burlington Northern Santa Fe (BNI, $76.07, up $0.75) it doesn’t already own in a cash and stock deal. The deal is worth $34 billion and marks Warren Buffet’s largest acquisition. In pre-market trading, Burlington is printing $98, a $22 pop from yesterday’s closing price.
Buffett was so happy about the deal that he also proposed a stock-split for the company’s “Class B” (BRK.B, $3,265, down $18.00) shares. Granted, there’s a HUGE price difference between the Class A and B shares as you can see but the Baby Berks’ will get a lot cheaper. Shareholders will vote on a 50-for-1 stock split and if approved the B’s could trade for around $60…
Buffett has never split his company’s stock and although we don’t “buy-and-hold” stock, here’s one exception we may have to take a look at. If you ever wanted to OWN a piece of Buffet’s empire, you may get your chance once the split is approved. Now all we need is for Apple (AAPL, $189.31, up $0.81) to do a 2-for-1 split…
None of this is helping the futures, however, which are pointing towards a terrible open this morning. The Asian and European markets fell overnight which is putting a little pressure on the U.S. markets.
As far as economic news today, we get factory orders and sales reports from major automakers today. Also, the Federal Reserve begins a two-day policy meeting on interest rates although the central bank isn’t expected to take any action no time soon.
Ahead of the opening bell, Dow futures are lower by 47, to 9,688, after being down 90 earlier this morning. The S&P 500 futures are down 6, to 1,033, while the Nasdaq 100 futures are off 5 points, to 1,664.
We have been anticipating the market’s weakness and we have been taking advantage of the volatility while others have been rushing for the exits. Yesterday, we told our subscribers to close half positions in a Research In Motion (RIMM, $55.74) trade for a 180% return while letting the rest ride. We are also short a couple of other names which could continue to do well if the market heads lower.
Current subscribers can check the Members Area for today’s updates. We may also send out a trade today and if we do it will be available in the 1pm update…
Tags: Berkshire Hathaway, momentum options, options mentoring, options track record, options trading, Research in Motion
Posted in Apple, Company Commentary, Economic News, Mergers and Acquisitions, Option Trades | Comments Off
Friday, October 30th, 2009
12:45pm (EST)
The market is get spooked the day before Halloween as the Dow is off triple-digits, or 150 points, to 9,812. So much for yesterday’s 200 point rally…
A couple of key economic reports have put the bears in control today. Consumer spending plunged in September by the largest amount in nine months as a result to the end of the government’s Cash for Clunkers promotion. The Labor Department said personal spending fell 0.5% in September after a 1.3% jump in August.
Also, U.S. consumer sentiment fell. The Reuters/University of Michigan consumer sentiment index fell to 70.6 in October from 73.5 in September. The reading was revised slightly higher from earlier estimates of 69.4.
As you can imagine, most stocks are seeing red but we have been preparing for a market pullback since early last week. We switched gears and closed two bearish positions this week for 100% wins and we just closed another trade today that has returned our subscribers 100%.
It looks like the smartphone trade is getting long in the tooth for the bulls who have been riding that gravy train. Apple (APPL, $190.54, down $5.81), Palm (PALM, $12.29, down $1.12) and Research in Motion (RIMM, $58.69, down $2.67) are getting hammered today and we are paying particular close attention to RIMM. It looks like a double nickel stock price is on the horizon.
In fact, we profile are profiling a smartphone trade in the Members Area RIGHT NOW and current subscribers can check for the trade update and the results for First Solar (FSLR, $124.28, down $2.19).
Tags: momentum options, MomentumOptionsTrading.com, options help, options mentoring, options track record, options trading, Research in Motion, trading options
Posted in Company Commentary, Economic News, Hot Stocks, Market Analysis | Comments Off
Friday, October 2nd, 2009
10:40am (EST)
Fire away, hey-hey…
The bulls invited the bears into the ring and immediately took the bears best shot. The unemployment report came in as expected, 9.8%, but the job loss of 263,000 was way more than the 180,000 Wall Street had expected.
I told you this morning I was hearing whispers for a loss of a 250,000 and we were expecting some downside. When the report was released at 8:30am (EST) the futures sank even further. Dow futures were down about 30 and zoomed to 100 once word hit the Street.
However, the bulls took the bears’ best left hooks on the chin and are still standing. The Dow opened with a 70 point loss but has nearly clawed (no pun intended) its way back to positive territory. The Dow is only down 2 points and is currently trading at 9,506. The Nasdaq has just turned positive as is up 5 points to 2,062. The S&P is flat at 1,029.
The action isn’t what we had planned this morning and part of that could because of a weaker dollar. If the dollar would have rallied then we were looking for the commodity stocks to take a hit. They did, but the weaker dollar kept the plunge to a minimum.
I had profiled a Freeport McMoRan (FCX, $64.98, down $0.42) trade this morning in the Members Area and the put options we were looking at opened higher than our limit price. We also didn’t get the sell-off we had planned for so we did not take the trade. The stock hit a low of $63 but it wouldn’t surprise me to see this one rebound along with the market.
I also talked about opening a Research In Motion (RIMM, $66.06, down $1.10) position if the market opened HIGHER but that was never in the cards once we got the Jobs Report. However, I did say the stock is right at support which is $66-$67 so those call options may get interesting next week. We don’t need to rush out and buy them today but we will keep them on the Watch List and may look at them again next week.
Other than that, our Abercrombie & Fitch (ANF, $31.21, down $0.49) trade continues to gain momentum and appears safe to hold over the weekend. At current levels, it has returned 30%.
We planned for either a continued sell-off or a huge rally today and it looks as though this battle is just getting started. The thing to watch for is how we go into the closing bell today. It’s hard to say where the market ends the session because the bulls could end up stealing today’s round.
If they do, it would be bullish heading into next week’s earnings.
I wanted to get this out before the 1pm update and this is the 1pm update. With so much going on this morning I wanted to make sure everybody was following the game plan. No need to open new positions heading into the weekend and we will sit on what we got.
I will be looking at possible trades for next week the rest of the day to see if there is something there and the last hour of trading will be interesting to watch.
I’ll be back Sunday night, more likely, Monday morning with the weekly update and the playbook as we head into earnings season. Alcoa (AA, $12.80, down $0.11) kicks things off on Wednesday.
Rick@MomentumOptionsTrading.com
Tags: AA, Abercrombie & Fitch, Alcoa, anf, FCX, Freeport-McMoRan, options picks, Research in Motion, RIMM
Posted in Hot Stocks | Comments Off
Thursday, October 1st, 2009
We thought we’d share what some of our subscribers are saying about recent trade picks over the past week or so…
Noel
I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It’s right at 100% return. I hope earnings season coming up is going to look like this trade.
Todd F.
Nice call on Nike. I think I’ll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75’s could be a steal today.
Paul H.
Hi Rick, what a sweet way to get introduced to Momentum. My first trade (Nike) based on your picks and it a 2x. Thank you!
Noel
Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can’t go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick’s advice since March. It’s usually a fun ride, but I give him heck when it’s wrong to.
Christian
Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.
Tags: Dendreon, dndn, Nike, NKE, Research in Motion, RIMM
Posted in Hot Stocks | Comments Off
Wednesday, September 30th, 2009
1:15pm (EST)
The market was off to a good start until the Chicago PMI number hit Wall Street. Economists were expecting a reading of 52 for September and we got 46, down from 50 in August.
The Dow had been up over 20 points to 9,764 but quickly fell to a low of 9,608, or a 130+ point loss. Currently the index is at 9,724, down 18. As you can imagine, the action has been choppy to say the least.
Of course, one stock that is having an outstanding day is Nike (NKE, $64.82, up $4.73). We went long on call options in Nike yesterday in the 1pm Update in the Members Area and I had talked about the stock in both of Tuesday’s updates.
The company’s slogan is “Just Do It” and subscribers who “Did It” have banked nearly a 200% profit on the call options that were profiled. I said yesterday that the option market was pricing an 8%-10% move for the stock and sure enough it was right on.
I will update the trade in the morning because we don’t have the final closing numbers but make sure you set stops at $4.50. Our entry price was $1.60 and we had initially set stops at $2.75 this morning. The call options I profiled are currently at $4.90 which is officially a 197% gain from $1.60. Just think, a 10 contract trade would have cost around $1,675 yesterday and would be worth $5,ooo right now. Nasty. Nasty good that is…
The call options easily zoomed past that so we are safe and we can easily lock in profits from here on out. Also, you can sell half now or let the $4.50 stop take you out of the trade entirely.
Research In Motion (RIMM, $68.52, up $0.88) is bouncing back today following last week’s sell-off. I’m not ready to make a call on where the stock goes from here but it is getting interesting. Also, I’m looking at a couple of trades today and doing some more research before releasing them. They should be ready in the morning.
Rick@MomentumOptionsTrading.com
Tags: Nike, Nike call options, NKE, options picks, Research in Motion, RIMM
Posted in Apple, Earnings, Hot Stocks, Market Analysis, Market Commentary, Option Trades | Comments Off
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Buffet Buys Burlington, Splits Baby B’s
Tuesday, November 3rd, 2009
9:05am (EST)
When Warren Buffet Speaks, people listen…
It’s no secret, despite a struggling economy, that M&A (Merger and Acquisition) has been hot. Berkshire Hathaway (BRK.A, $98,750, down $250.00) said it will acquire the 77% of Burlington Northern Santa Fe (BNI, $76.07, up $0.75) it doesn’t already own in a cash and stock deal. The deal is worth $34 billion and marks Warren Buffet’s largest acquisition. In pre-market trading, Burlington is printing $98, a $22 pop from yesterday’s closing price.
Buffett was so happy about the deal that he also proposed a stock-split for the company’s “Class B” (BRK.B, $3,265, down $18.00) shares. Granted, there’s a HUGE price difference between the Class A and B shares as you can see but the Baby Berks’ will get a lot cheaper. Shareholders will vote on a 50-for-1 stock split and if approved the B’s could trade for around $60…
Buffett has never split his company’s stock and although we don’t “buy-and-hold” stock, here’s one exception we may have to take a look at. If you ever wanted to OWN a piece of Buffet’s empire, you may get your chance once the split is approved. Now all we need is for Apple (AAPL, $189.31, up $0.81) to do a 2-for-1 split…
None of this is helping the futures, however, which are pointing towards a terrible open this morning. The Asian and European markets fell overnight which is putting a little pressure on the U.S. markets.
As far as economic news today, we get factory orders and sales reports from major automakers today. Also, the Federal Reserve begins a two-day policy meeting on interest rates although the central bank isn’t expected to take any action no time soon.
Ahead of the opening bell, Dow futures are lower by 47, to 9,688, after being down 90 earlier this morning. The S&P 500 futures are down 6, to 1,033, while the Nasdaq 100 futures are off 5 points, to 1,664.
We have been anticipating the market’s weakness and we have been taking advantage of the volatility while others have been rushing for the exits. Yesterday, we told our subscribers to close half positions in a Research In Motion (RIMM, $55.74) trade for a 180% return while letting the rest ride. We are also short a couple of other names which could continue to do well if the market heads lower.
Current subscribers can check the Members Area for today’s updates. We may also send out a trade today and if we do it will be available in the 1pm update…
Tags: Berkshire Hathaway, momentum options, options mentoring, options track record, options trading, Research in Motion
Posted in Apple, Company Commentary, Economic News, Mergers and Acquisitions, Option Trades | Comments Off