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Are We There Yet?

Wednesday, October 14th, 2009

12:40pm (EST)

Is it me or does it feel like we are watching paint dry?  In what should have been an easy grand-slam today, the Dow is having trouble punching through that 10,000 point brick wall.  We got a strong pop and then lost some of the fizz shortly after the market opened but the bulls seem to be gathering more strength as we head into the afternoon.  Currently, the Dow is up 113 points to 9,984 and has traded as high as 9,991 but we have yet to “break on through to the other side”…

One thing that worries me is that everyone expects all of this “new money” to come into the market, which it very well could, but I want to talk about the emotions of investors and the market in general.  First off, where were all these people when the March lows were around and why didn’t they buy back then?  When the Dow bottomed at 6,440 six months ago, I suggested buying longer-term call options to play the bounce as I knew we were in for a turnaround.

Our trading rules are simple.  You buy call options during bull markets and you buy put options in bear markets.  There are times when we are looking for direction which can cause some losing trades but overall, you want to stay AHEAD of the trend.

People were calling for a pullback in September and we said to stay focused on Dow 10,000.  And we are almost there.  Look, we don’t care about market direction.  We want big moves.  If the Dow does break 10K and we zoom higher, we will keep playing the upside with call options.  If the market stalls from here and we have a sell-off, we will start buying put options.

The reason I say this is because we are still in a trader’s market and the market tends to hurt the most people at the most inopportune time.  I’m not saying we are setting up for a correction but the Dow needs to break 10,000 today and hold.

There are a number of heavy hitters set to report earnings the rest of the week.  International Business Machines (IBM, $127.21, up $0.19), Google (GOOG, $533.68, up $7.47), Goldman Sachs (GS, $193.01, up $5.78) and  Bank of Amercia (BAC, $18.37, up $0.56) are on deck over the next few days.

Intel (INTC, $21.05, up $0.56) has treated us well today and our current subscribers easily cashed out for triple-digit returns.  We have updated the trade in the Members Area so make sure you login in get our current comments.

Nike Beats Estimates, Stock Up

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

Weekly Wrap for 9/27/09

Sunday, September 27th, 2009

11:40 pm (EST)

Market Commentary

The bears finally made some noise last week as they sent the market down 2%, on average.  The bulls were making a run at Dow 10,000 and by Wednesday the index rallied to a high of 9,937 shortly after the Fed news. That is exactly when the bears stepped-in and made some noise.  It remains to be seen if this is their entry point or just another whimper before the bulls power higher.

For the week the Dow dipped 155 points, or 1.6%, to finish at 9,665.  The Nasdaq fell 42 points, or 2%, and ended at 2,090 while S&P 500 skidded 24, or 2.2%, and settled at 1,044.  We had some crummy economic news that weighed on the market; a disappointing Durable Goods Report and a lousy Home Sales report.

September was supposed to be a down month if you were listening to the talking heads but I had mentioned that you have to trade the tape.  Yeap, the rally has fooled a lot of investors since March and the bears may finally be gathering some confidence as we head into earnings season. 

We will have to wait for the next leg to develop which should be this week.  The market has traded much like we had planned and on August 23rd, I had this to say:

“The market has had an incredible run and the key levels we are watching are as follows.                                                                     

For the Dow (currently 9,505), watch for 9,625 which was the November high.  A run above this level clears the way for…dare I say it….Dow 10,000.  There is support at 9,000 but a break below 8,900 would send up a warning signal.

As for the Nasdaq (2020), it looks like 2,100 is smooth sailing as long as the bulls continue to run this week.  Above that, we get choppy but we could get a run to 2,275.  Support is at 1,930 and further down at 1,800 or so.  A break below that could lead to 1,600.

The S&P 500 (1,026) could easily make a stab at 1,100 now that it has surged past 1,000 but 979 will be key support near-term.  There is really nothing stopping the index from hitting 1,150-1,175 which is where headwinds will pick up.” (END)

Last week, the Dow tagged 9,937, the Nasdaq traded to a high at 2,067 while the S&P hit 1,080.  That was the road map we drew up in August and now we have to wait for the “shakeout”.  

I mentioned on Friday that Alcoa (AA, $13.08, down $0.43) would kick off earnings season on October 7th.  The key for 3Q earnings will be the revenue numbers.  Most companies beat 2Q earnings by aggressive cost cutting but revenues were coming in a little lighter than expected.

I don’t think that will pass this go around.

There are a slew of economic reports due out this week which will influence the market and we have a few earnings reports that should provide some insight ahead of 3Q earnings.  

We will also get an update on home prices, manufacturing, consumer confidence, construction spending, and factory orders.  The big one though will be Friday’s unemployment report. 

Both bulls and bears will be jockeying for position ahead of next week’s launch of 3Q earnings.  The bulls are loaded with cash and there is even more on the sidelines while the bears will target unemployment and the lack of revenue growth. 

Earnings (quotes are from Friday’s close):

Monday:  Cal-Maine Foods (CALM, $27.78, up $0.10), Craftmade International (CRFT, $3.28, down $0.17) and TRC Companies (TRR, $3.80, up $0.01). 

Tuesday:  Allscripts-Misys Healthcare Solutions (MDRX, $18.35, down $0.22), Darden Restaurants (DRI, $35.60, up $0.16), Jabil Circuit (JBL, $11.87, down $0.66), Micron Technology (MU, $8.10, down $0.01), Nike (NKE, $58.64, up $0.47) and Walgreen (WAG, $33.68, up $0.03).

Wednesday:  Actuant (ATU, $15.60, up $0.08), Diamond Foods (DMND, $29.40, flat) and Lawson Software (LWSN, $6.35, down $0.05),

Thursday:  Accenture (ACN, $36.12, up $0.16), Constellation Brands (STZ, $15.30, down $0.17), CRA International (CRAI, $27.62, up $0.41), Global Payments (GPN, $44.76, down $0.70), Immucor (BLUD, $17.26, down $0.16) and Resources Global Professionals (RECN, $17.31, up $0.52).

Friday:  None worth mentioning.

Subscribers, please check the Current Trades in the Members Area for the updates.  They are listed under Monday, September 28, 2009.

 

Rick@MomentumOptionsTrading.com

The Bulls Are Back In Town

Thursday, July 30th, 2009

1:45pm (EST)
 
Sometimes the writing is on the wall.  Make that…sometimes the writing is on the Blog.
 
For those of you who have signed on this week, I do a Weekly Wrap on Sunday nights and in the 7/19 issue, I had this to say:
 
“With the Dow at 8,734 and the S&P 500 at 940, I’d say the bulls are going to do something special or we will fall back into a trading range once again. That wouldn’t be so bad but it would set-up a bigger stage for a more explosive move either up or down. However, given the momentum, it appears the bulls are in firm control and willing to push us to new highs. Dow 9,000? S&P 1000? Nasdaq 2,000? Those are the targets on the scope and we have enough meaningful earnings this week to make a run at those levels.” (END) 
 
As we have seen all week, the bulls have held Dow 9,000 and today they are making another push back to last October’s highs.  The Dow is currently up 166 points to 9236, a 1.8% jump.  The bigger stories are the Nasdaq which is up 28 to 1996 while the S &P 500 is up 18 to 993.
 
It has been tough to continue to be a bull when we have been on the right side of the market since early March.  The point I want to make is that sometimes you have to block out what the talking heads are saying and trade what the market is giving you or what you are seeing.  Although I’m not a bull or a bear, I do go with the trend…
 
Everybody has been calling for a pullback and when that happens the market usually does the opposite.  Which is why you have to keep notes on what you are seeing and trade the trend. 
 
What we are seeing with earnings is that companies are beating expectations but missing on revenue.  That is what happened to a couple of our positions last night.  However, we picked two of the strongest stocks within in those sectors and with the market rebounding they are rocking.  We have a ton of winning trades going on right now and I just want to enjoy the moment.  I’ll have a complete wrap tonight by 11pm. 
 
Sorry about the late posts today…
 
2012 Closed Trades:
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Track Record
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73% winners
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Request our detailed Track Records which are updated in our Members Area. As soon as you sign-up for a subsciption, you will have access to all open and closed trades for 2011 and past years.

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Trader Comments:

    I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year
    of membership rather than the one quarter. Thanks again, and LOVE YOU ALL. REGINA L.

    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help. STEVE T.

    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide. SCOTT H.

    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485 PETER G.

    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming. LAWRENCE O.

    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again! C.J.

    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace! SHAUN

    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good profitable calls. Keep up the good work. MICHAEL K.

    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!
    PARAG P.

    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN. JAY P.

    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You. MIKE

    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks. TRISH D.

    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock! MIN L.

    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you! JOE G.

    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming. GREG F.

    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. NOEL

    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. TODD F.

    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you! PAUL H.

    “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. :) ” NOEL

    “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.” CHRISTIAN

    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.” JOHN

    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.” CHARLES M.

    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.” BRYAN C.

    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.” JOHN H.

    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.” JEFFREY

    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.” ED

    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.” GREG

    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.” KEN

    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.” GARETT

    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.” TERENCE

    Jan. 31 2012
    Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

    3/18/11
    Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

    2/3/12
    Hi Rick,

    I will start off with a thank you for your time and dedication to all
    the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

    Hi Rick,

    I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
    at finding winning trades. I have attached a copy of the trade from
    my brokerage screen.

    Hi Rick,

    Wow!! my account it up 70% since i joined last month and market is going the opposite direction. Really appreciate your service. I just wanted to drop a note to say THANK YOU. Hope to be with you guys for a very long time. Mel

    Rick,

    Great call on Fosl I bought the may 120 puts for 3.70 yesterday morning just sold for $32.00 today
    Keep up the great work
    Thank you, Henri

    Rick –

    I bought 10 Deckers Outdoor (DECK) May 55 puts at $0.50 on 4/26/12 and sold them on 4/27/12 for $1.65. I made $1150 in one day. Thanks. I knew something good would happen sooner or later.
    HOW THE HECK did you know Green Mountain Coffee (GMCR) was going to go down 20 points???!!!! I bought 10 of the May 35 puts at $0.49 and then 5 more at .30. I sold them at 5.80. Thank you again.
    You have made a believer out of me. Alan

    Rick –
    I have only been a member for about 6 weeks but I have done well on most of the trades. My first two were QQQ and SPY a month ago and since then I've gotten into the groove and been doing well.
    I try to execute the trades that you recommend as soon as you send them out, sometimes I can't and I miss the Entry price. However, sometimes when I miss the Entry, the price goes down and I get a better price.
    That's exactly what happened with GMCR.
    You recommended it at around $.81 I think, but by the time I got to it, the price was $.27. I bought 100 Puts on Wednesday May 2, 2012 and sold half of them 24 hours later at $5.95 for a nice 2,203% gain. As per your recommendation, as GMCR went above $30 I sold the remaining 50 Puts at $5.50 for a slightly less 2,037% gain.
    On average that one trade netted me a 2,120% gain, entirely based on YOUR recommendation (and a little bit of luck). To put this in real terms, I risked $2,700 on Wednesday and pocketed $54,550 just 24 hours later.
    So uhh, let's do that again real soon!!
    Feel free to use my name. The tax guys have me on speed-dial already anyway. Dennis

    Rick:
    That was awesome on your GMCR pick, I know how risky it can been holding into earnings but you pulled it off. 
    I just started my autotrading with you today and am in on your QQQ play. I look forward this service. 
    I have a busy career and I have tried to follow and trade throughout the day and found it too hard. I hope you continue to have a great year, I plan to go along for the ride. I am starting slow but will pile more in once I have secured some profits. 
    Keep up the good work your trading has been spot on. I am sure you paid your dues to get this point in your career. Anthony

    Rick:

    Great call on GMCR!  I have been trading for about 15 years actively.  This may be the best trade I ever made.  Got in on Monday, April 30 and the stock was up from when you recommended it.  It went up further after I got in.  Here are the facts:
    Monday, April 30th: Bought 15 June 37's at $1.25= $1900 approx
    Thursday, May 3rd: Sold 15 June 37's at $9.30=$13,950
    Gain for the week: $12,050.
    I understand you will not get them all right.  It’s important to ride those winners and as you could tell from my selling price, I sold when the stock went to $28.10, so left a little on the table.  Who can complain.
    Keep the suggestions coming, looking for another jump on your FSLR, one that I have been riding very hard.
    Best regards, Bob
      

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