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Thursday, March 3rd, 2011
9:05am (EST)
It was a choppy session on Wednesday as the market darted in-and-out of positive territory for much of the session before finishing slightly higher. The bulls holding support was a bigger deal than yesterday’s slight gains but oil continued to work its way higher and it’s something we are watching very carefully.
The Dow was up 9 points and closed at 12,066 after touching a high of 12,115. We were looking for a close above 12,100 but were pleased to see 12,000 hold after 12,200 gave way earlier in the week.
The S&P 500 finished at 1,308, up 2 points, after touching a high of 1,314. The index traded to a low of 1,302 but 1,300 held again on a closing basis so the bulls will take it.
The Nasdaq showed the most strength as the index advanced nearly 11 points to 2,748 after trading to a high of 2,763. We were hoping for a close above 2,750 as the index continues to work its way back towards 2,800.
The market has been in a “tight range” for 2 weeks so we either stay in it or breakout to one side or the other, probably depending on the price of oil and the seriousness of geopolitical violence going forward. If oil can trend back to $90 and tensions ease, then we will soon get a blow-off the roof type rally for the market which we really haven’t seen yet. We think things can play out this way over the next few weeks as we start to look forward to April which is when 1Q earnings come out.
Yes, we are still in 4Q season but this could be another catalyst that the bulls are looking forward to and we said back in November this rally could last until April.
On that note, it looks as though Apple’s (AAPL, $352.12, up $2.81) iPad 2 is going to be a monster. The company already owns a 90% market share for tablet devices and it’s hard to imagine them growing that number, but, what is not hard to imagine is that they won’t lose that much of their current market share anytime soon. From April thru December 2010, Apple sold 15 million iPad’s which generated $9.5 billion in revenues. Nobody else is even close.
The new iPad 2 is slimmer, sleeker, and full of new upgrades. We are already seeing the adoption of Apple’s iPad in the corporate world and the company’s FaceTime video conferencing feature will surely be a hit as it is with the iPhones. Speaking of which, Apple said yesterday they have sold 100 million iPhones since launching, and, iBooks has passed 100 million downloads in less than a year. Incredible numbers.
One company that wasn’t celebrating the Apple news? Zagg (ZAGG, $7.07, down $2.23), which dropped nearly 25% after Apple said that its new iPad will feature a “smart” cover. This was a major blow for a company that makes protective shields for Apple’s iPad and iPhone.
Shares of Zagg opened at $9.27 yesterday and had been flat up until Apple’s big announcement. As far as the options, quick traders were all over the March 9 puts (ZAGG110319P00009000, $2.00, up $1.45) which surged over 250% after Steve Jobs dropped the bomb. The put options closed at 55 cents on Tuesday and opened Wednesday’s session at 60 cents. Pretty good day for those who got in and out on the news…
Obviously, the easy money has been made in Zagg but Apple still looks like a “good buy” at current levels for the long-term investor. The only thing we wish for besides an iPad2 is for Apple to do a 10-for-1 stock split so option prices get cheaper. Folks, if you haven’t gotten an iPad, go try one. We love them and use them a lot. We can’t wait until March 11 which is when the iPad 2 becomes available.
Futures are pointing towards a big open this morning: Dow (+85) to 12,131, S&P 500 (+12) to 1,318, Nasdaq 100 (+20) to 2,343. Subscribers, check the Members Area for the updates.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Apple, Market Analysis | Comments Off
Wednesday, March 2nd, 2011
9:00am (EST)
Whatever method you use to pick stocks (or options)…your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn’t the head but the stomach that determines the fate of the stock (or option) picker – Peter Lynch
We have mentioning a move lower or a possible trading range for the market and yesterday’s action was not what the bulls were hoping for. However, we used today’s quote to help put things in perspective as the bulls struggle to get back to last week’s highs while at the same time they are trying to hold down support. Of course, the “or options” parts were added to Lynch’s thoughts by us because we are option traders but the same principles apply today.
The market started off in positive territory on Tuesday but higher oil prices and continued unrest overseas were a drag as the bears’ evened things up for the week and then some. Oil went out at $100.17, up $3.20, into yesterday’s close and we mentioned last week and again in our Weekly Wrap Sunday night that the market will follow oil in reverse. Oil closed at its highest levels since 2008.
The Dow was hit for a triple-digit loss as it fell 168 points, or 1.4%, to settle at 12,058. The blue-chips traded to a high of 12,261 and the low was 12,055. We were looking for 12,100 to hold in our 1pm update yesterday but the selling pressure was just too much. However, key support at 12,000 held but there could now be pressure down to 11,800 for the index.
The S&P 500 lost 21 points, or 1.6%, and closed at 1,306. The index managed to touch a high of 1,332 but we knew once the 1,325 level was taken out intraday the index was headed lower. Support held at 1,300 as the S&P traded to a low of 1,306 but the bears are targeting 1,275.
The Nasdaq got crushed for a 45 point loss, or 1.6%, and finished at 2,737. We were hoping 2,750 would hold but we also felt our lower-end target would come into play once broken. For Tech it is 2,700 and although this level held yesterday, the bears are gunning for 2,650-2,600.
Trading ranges and corrections are hard to predict in bull markets but you can prepare for them by reading charts and using “targets”. Although the bears have momentum right now, we doubt the bulls will go away quietly. However, if the bears can crack a few more layers of support, the bulls may start to panic and the battle could get ugly.
Futures have been whacky all morning, trading mostly lower throughout the night before turning positive ahead of the ADP jobs number which was incredibly good. The ADP Employment Change report said 217,000 jobs were added to private payrolls for February which was well ahead of the 163,000 that had been forecast. This bodes well for Friday’s nonfarm payroll report and the unemployment rate.
Dow futures are down 7 points to 12,015 while the S&P 500 futures are lower by a point to 1,300. The Nasdaq 100 futures are off by 2 points to 2,309. Oil is up $1+ to $101-and change. Subscribers, check the Members Area for the latest trade updates.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
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Tuesday, March 1st, 2011
9:00am (EST)
The market ended Monday with the Dow, S&P 500 and Nasdaq all posting gains while oil ended lower by a buck. The bulls were able to take all 3 indexes into the green after the opening bell but Tech acted funny on a downgrade of Amazon.com (AMZN, $173.29, down $3.95) and weighed on the Nasdaq all day. However, the bulls had a final hour push which lifted the index into positive territory by the closing bell.
The Dow ended the day with a gain of 96 points and closed at 12,226. The S&P added 7 points and settled at 1,327 while Tech added a point to finish at 2,782. For the month of February here is how the indexes fared: Dow (+2.8%), S&P 500 (+3.2%); Nasdaq (+3%). We like to mention the Russell 2000 from time-to-time and the index had a strong February, up 5%, and closed at 822 on Monday.
We were looking for a close above 12,200 for the Dow; 1,325 for the S&P and 2,800 for the Nasdaq yesterday. Two-out-of-3 isn’t bad. The good news is that February ended positive for the bulls, along with January, and is usually a good indication for the rest of 2011. When these two months close back-to-back in positive territory, the market usually ends the year higher 95% of the time.
We were encouraged by the action in Tech by the close but we are more excited about Wednesday. Apple (AAPL, $353.21, up $5.05) is expected to debut its iPad 2 tomorrow and now has 70,000 iPad applications that are up and running. Others tablet makers are clearly playing catch-up to Apple. There was a report yesterday by All Things Digital which said tablets will grow into a $35 billion market in 2012. This would represent year-over-year growth of over 170%. Incredible.
The Financial stocks weren’t much help either as they remain a key piece of the puzzle for a continued run higher. The sector has shown some signs of wanting to go higher but seems stuck in a trading range with the bias to the downside over the past few weeks. However, economic news continues to show a slightly better economy and lending is on the rebound from where it was 6 months ago. Keep your fingers crossed.
Futures are up this morning while oil is also slightly higher. As we head to press, Dow futures are advancing 27 points to 12, 243 while the S&P 500 futures are up 4 points to 1,330. The Nasdaq 100 futures are showing a 9 point gain to 2,360.
Tags: AAPL, Apple iPad investing, best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, Nasdaq: AAPL, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
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Monday, February 28th, 2011
1:00pm (EST)
The market continues its rebound from last week’s selloff. A lot of traders took out protection for the weekend and are covering today as oil has stabilized. Economic news has come in better-than-expected and the bulls have used these two catalysts to move the indexes higher.
Oil was down after reports surfaced that oil shipments in Libya have begun again but is off its lows and is slightly positive. News that a tanker bound for China was loading oil in the Libyan port of Tobruk was welcomed relief for the bulls. Additionally, the market learned Saudi Arabia was boosting exports and has reiterated their ability to meet any supply shortfall.
In economic news, Personal Income for January increased by 1%, which was much higher than the 0.3% pop that had been penciled in. Personal Spending during January was up 0.2% versus expectations for a 0.4% increase. Elsewhere, the Chicago PMI reading for February came in at 71.2, up from January’s print of 68.8, and higher than expectations of 67.5.
The Dow is up 80 points to 12,210 and has traded to a high of 12,233. We would love to see a close above 12,200 while support is strong at 12,000.
The S&P 500 is showing a 6 point gain and is 1,326. A close above 1,325 would be money; 1,330 even better.
The Nasdaq is lower by 2 points and is at 2,778. We are looking for a close above 2,800 and the index has traded as high as 2,798 today.
We like today’s action and we would like to see continued strength into the close but the fact that Tech has slipped has us cautious. We will be back in the morning with a full update.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option mentoring, option quotes, option signals, Option Trades, option trading, options broker, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary, Oil | Comments Off
Monday, February 28th, 2011
9:00am (EST)
The Dow gained 62 points, or 0.5%, on Friday and closed at 12,130. For the week, the index fell 260 points, or 2.1%, and saw its 3-week winning streak come to an end. We had a feeling when the blue-chips reached our 12,300-12,350 target that a pause was coming but the good news is that the bulls held support. The Dow was able to hold 12,200 on Tuesday and 12,000 on Wednesday before finishing this week right between our downside targets. There is further support at 11,800 and then 11,600-11,500.
The S&P 500 added 14 points, or 1.1%, and settled at 1,319. For the week, the index dropped 23 points, or 1.7%. It was the biggest decline since mid-November but we were encouraged by the close above 1,300 each day. This area will continue to act as short-term support with 1,275 and 1,250 providing additional layers of backup.
The Nasdaq advanced 43 points, or 1.6%, on Friday to finish at 2,781. For the week, the index declined 53 points, or 1.9%. On Tuesday, our first line of support held which was the 2,750 level. On Wednesday and Thursday 2,700 came into play but held. There is additional support at 2,650-2,600.
We were encouraged by Friday’s action but we remain a little cautious until some of the world’s tensions ease up. While we doubt the current bull market rally has officially ended, we could be setting up for a test lower or at least a trading range for a few weeks. We would like to see the bulls make a push back to resistance then hold but it will all depend on the price of oil. If oil stays under $100 then we should see some stabilization in the market. If it climbs higher then we can almost expect the next wave of support to be tested.
With that said, oil is slightly lower this morning while futures are pointing towards a higher open. Dow futures are up 56 points to 12,166; S&P 500 future are up 7 points to 1,326; Nasdaq 100 futures are higher by 12 points to 2,358.
We have a lot to cover in our Members Area so let’s get on it. Subscribers, check for the updates.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option mentoring, option quotes, option signals, Option Trades, option trading, options broker, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary | Comments Off
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Will Jobs Picture Trump Oil Concerns?
Wednesday, March 2nd, 2011
9:00am (EST)
Whatever method you use to pick stocks (or options)…your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn’t the head but the stomach that determines the fate of the stock (or option) picker – Peter Lynch
We have mentioning a move lower or a possible trading range for the market and yesterday’s action was not what the bulls were hoping for. However, we used today’s quote to help put things in perspective as the bulls struggle to get back to last week’s highs while at the same time they are trying to hold down support. Of course, the “or options” parts were added to Lynch’s thoughts by us because we are option traders but the same principles apply today.
The market started off in positive territory on Tuesday but higher oil prices and continued unrest overseas were a drag as the bears’ evened things up for the week and then some. Oil went out at $100.17, up $3.20, into yesterday’s close and we mentioned last week and again in our Weekly Wrap Sunday night that the market will follow oil in reverse. Oil closed at its highest levels since 2008.
The Dow was hit for a triple-digit loss as it fell 168 points, or 1.4%, to settle at 12,058. The blue-chips traded to a high of 12,261 and the low was 12,055. We were looking for 12,100 to hold in our 1pm update yesterday but the selling pressure was just too much. However, key support at 12,000 held but there could now be pressure down to 11,800 for the index.
The S&P 500 lost 21 points, or 1.6%, and closed at 1,306. The index managed to touch a high of 1,332 but we knew once the 1,325 level was taken out intraday the index was headed lower. Support held at 1,300 as the S&P traded to a low of 1,306 but the bears are targeting 1,275.
The Nasdaq got crushed for a 45 point loss, or 1.6%, and finished at 2,737. We were hoping 2,750 would hold but we also felt our lower-end target would come into play once broken. For Tech it is 2,700 and although this level held yesterday, the bears are gunning for 2,650-2,600.
Trading ranges and corrections are hard to predict in bull markets but you can prepare for them by reading charts and using “targets”. Although the bears have momentum right now, we doubt the bulls will go away quietly. However, if the bears can crack a few more layers of support, the bulls may start to panic and the battle could get ugly.
Futures have been whacky all morning, trading mostly lower throughout the night before turning positive ahead of the ADP jobs number which was incredibly good. The ADP Employment Change report said 217,000 jobs were added to private payrolls for February which was well ahead of the 163,000 that had been forecast. This bodes well for Friday’s nonfarm payroll report and the unemployment rate.
Dow futures are down 7 points to 12,015 while the S&P 500 futures are lower by a point to 1,300. The Nasdaq 100 futures are off by 2 points to 2,309. Oil is up $1+ to $101-and change. Subscribers, check the Members Area for the latest trade updates.
Tags: best option trader, best trading signals, call options, chicken trade, Covered Calls, financial options advice, momentum options, Momentum stocks, option quotes, option signals, Option Trades, option trading, options broker, options mentoring, options newsletter, options prices, put options, stock broker, stock price, stock quotes, strangle option trade, winning option trades
Posted in Market Analysis, Market Commentary | Comments Off