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Tuesday, May 3rd, 2011
9:00am (EST)
The bulls stampeded out of Wall Street’s gate at the start of Monday’s trading session on news that America’s most wanted terrorist, Osama Bin Laden, had been killed by U.S. military. However, the euphoria only lasted until lunchtime before the bears made their presence known. The market was able to extend its three-year highs at the open but the lack of momentum ultimately led to the bulls’ first loss in a week.
The Dow reached a high of 12,876 but finished lower by 3 points at 12,807. There is short-term support at 12,600 while the bulls will continue their pursuit of Dow 13,000.
The S&P 500 traded to a top of 1,370 and we were looking for a break past 1,375 for a possible run to 1,400. However, the index fell 2 points to end at 1,361 after touching a low of 1,358. The bears will be pushing for a close below 1,350.
The Nasdaq fell nearly 10 points and settled at 2,864 but not before kissing another decade high of 2,887. The bulls are planning for a run to 3,000 while the bears look to get Tech back under 2,850.
The Energy sector saw some strong gains intraday but gave them back as well after oil rebounded. ”Black Gold” was down to $111 a barrel at the open but finished near $113.50. Oil’s bounce came after the U.S. dollar fell apart (again). Although the greenback finished relatively unchanged, the dollar set a new two-year low against other currencies before rebounding.
TiVo (TIVO, $9.86, up $0.29) had a good day after gaining 3% on news that it settled a patent lawsuit against EchoStar (SATS, $34.99, down $2.09) and Dish Network (DISH, $29.79, up $4.75) for $500 million. The legalities involved TiVo’s video recording technology and the agreement was a huge win for the company. Although legal battles can be costly and will continue, the agreement only scratches one name off TiVo’s list as they go after other companies who may have infringed on their technology.
We have been watching these developments for years and you will see from our Track Records that we like to trade TiVo. Our latest TiVo recommendation was a covered call trade for our Weekly Wrap which is on pace to return 40% in less than 2 months if shares are at $10+ by mid-May.
The Biotech sector showed some decent gains yesterday and there are a few names we have been watching for possible breakouts. Seattle Genetics (SGEN, $16.84, up $0.23) has been on our Watch List for a few weeks but is a stock we have been following for quite some time while Vivus (VVUS, $7.80, up $0.03) has been an open trade of ours since January.
We have compelling reasons to believe both of these stocks are set for much bigger gains down the road but there could be pullbacks along the way. Of course, we first introduced Vivus to our subscribers in January 2009 when shares were trading at $5.37 and said to watch this entire drug obesity push. It has been a couple of years but the first company to get it right stands to make billions in sales so the rush to get a drug to market is on. Arena Pharmaceuticals (ARNA, $1.33, down $0.07) and Orexigen Therapeutics (OREX, $3.13, flat) are the other two players but we like Vivus for its pipeline.
Futures are pointing towards a slightly lower open this morning. Dow futures are down 32 points while the S&P and Nasdaq futures are off by 4 points each. Subscribers, check the Members Area for the trade updates.
Tags: call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options trading course, SATS, SGEN, stock market options, strangle option trades, TiVo, weekly options
Posted in Market Analysis, Market Commentary | Comments Off
Wednesday, April 20th, 2011
2:00pm (EST)
It’s 420 and the bulls are smoking…
The market has been on a blaze this morning after opening higher and holding its gains. Tech has been the clear winner today and is up nearly 2% while the Dow and S&P are showing 1% pops. All three indexes are trading at near-term resistance levels so it remains to be seen if the bulls have the energy to plow through them.
Better-than-expected earnings from a number of companies have fueled the rally but economic news has also helped. Housing numbers have been good this week and today’s existing home sales data for March came in at 5.10 million units, which was slightly higher than the 5 million units that had been expected.
One sector that is not participating in today’s rally are the Financial stocks. The sector has been in a hazy mood after trading higher at the open but has settled down and is fading. JPMorgan (JPM, $44.01, down $0.64), Goldman Sachs (GS, $151.84, down $0.02), and Bank of America (BAC, $12.27, down $0.07) are all in the red after showing some green at the open.
Oil is back over $110, up nearly $3 a barrel, but hasn’t slowed the bulls’ momentum. Gold is up $3 to 1,498 an ounce while Silver is at $44.63, up 71 cents.
As far as the market, the Dow is surging 167 points to 12,433 while the S&P 500 is higher by 16 points to 1,328. The Nasdaq is advancing 49 points to 2,793.
We will cover support and resistance in our morning update but as you can see, Tech is still having trouble at the 2,800 level, while 1,334 remains a trouble area for the S&P.
We have a lot more information to cover in our Members Area but keep an eye on TiVo (TIVO, $11.35, up $2.98). The stock is an official recommendation of our Weekly Wrap and we have been saying litigation news is due out anytime. Shares are up nearly 40% but they could continue to explode if the courts start siding with TiVo and its patent claims. We will be back in the morning with a full update.
Tags: call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options trading course, stock market options, strangle option trades, TiVo, weekly options
Posted in Hot Stocks, Market Commentary | Comments Off
Thursday, October 7th, 2010
9:00am (EST)
The bulls got a warning sign from the bears yesterday although the market held up rather well after hearing the private sector employment index unexpectedly dropped by nearly 40,000 in September. The report was released before the opening bell and knocked the futures lower as soon as the news was released. This type of action doesn’t bode well ahead of tomorrow’s major jobless report.
It was a mixed day as the Dow gained 23 points to close at 10,967 after touching a high of 10,974. The Dow showed a little strength and 11,000 is still within reach but there were a number of Tech stocks that broke down like a rented mule.
The S&P 500 fell less than a point and closed at 1,159 and just below the 1,160 level. The index will have to close above this level if it is going to make a run at 1,175 and then 1,200. The index traded to a high of 1,162 which was Tuesday’s high so this bears watching if the market stalls.
The Nasdaq ended the day with the most bruises as the index fell nearly 20 points to finish at 2,380. The index traded to a high of 2,399, which was Tuesday’s close and we have mentioned 2,400 as major resistance.
Equinix (EQIX, $70.34, down $34.75) got punished after warning revenues will come in short of Wall Street’s expectations. The company said it expects revenue of $328-$330 million versus expectations of $335-$338 million. Analysts were looking for $337 million.
Shares fell 33% but the October 75 puts (EQIX101016P00075000, $15.20, up $15.00) soared 7,500% after opening at $10. The options closed at 20 cents on Tuesday. Yes, it would have been nice to have been in that trade but if you still have any October put options open, they could pay off if other bombs keep dropping.
This hit a number of companies in the data center sector, as well. Akamai Technologies (AKAM, $44.25, down $3.66) lost 8%, Rackspace Hosting (RAX, $23.29, down $2.92) fell 11%, Savvis (SVVS, $19.39, down $2.24), which raised revenue, got whacked for 10% while VMWare (VMW, $77.56, down $7.66) slipped 9%.
There was one stock that we wanted to mention this morning.
We have been following TiVo (TIVO, $10.08, up $0.89) for a few years now and many of you know about the wild roller-coaster ride shares have been on all year.
TiVo was at 52-week highs in April but fell to $10 by May after a negative legal ruling on its patent sent shares down nearly 50% in one day. Since then, shares have lanquished but the got a shot in the arm on Wednesday after the company said the U.S. Patent and Trademark Office backed the validity of its patent that allows viewers to rewind, pause or fast-forward live TV.
TiVo has been involved in lengthy legal battles over its technology and has been fighting with both Dish Network (DISH, $19.10, down $0.53) and EchoStar (SATS, $19.30, down $0.20) for royalty payments.
This victory was so important because the patent office reaffirmed the validity of the “time warp” patent after EchoStar asked for a reexamination. Well, be careful what you wish for. TiVo said the decision is final and not appealable by EchoStar which can only mean bad news for Dish Network.
Dish is on the hook for $100 million, or so, and could lose a majority of its customers if it can’t work out a deal with TiVo. The satellite and cable companies have been ripping TiVo off (in their minds) and it appears they could be right in that these companies did steal their technology.
This story could get interesting as Dish and TiVo are scheduled to go to court in November. If TiVo gets another win then we could see shares trading at $15, quickly. If momentum kicks in, we could see shares rally to $20 or new 52-week highs but that might be asking a bit much. The stock traded as high as $11.20 yesterday and has broken out of a 5-month range with the $10 area being MAJOR resistance. There is virtually nothing stopping shares from making a run to $15-$16 if the news keeps coming in positive for TiVo.
As we head to press, Dow futures are higher by 55 points to 10,961 while the S&P 500 futures are up 8 to 1,162. The Nasdaq 100 futures are showing a gain of 8 points to 2,012. Gold is up $12 to 1,360/ ounce while silver is up 37 cents to $23.41/ ounce.
Subscribers, check the Members Area for the updates.
Tags: option picks, option trading blog, option trading course, straddle option trades, strangle option trades, TiVo, triple-digit options returns
Posted in Company Commentary, Hot Stocks, Market Commentary | Comments Off
Thursday, August 26th, 2010
12:35pm (EST)
The futures were pointing towards a decent open after the better than expected jobless claims report this morning but the gains were limited. Shortly after the market opened, the mortgage delinquencies report came out and it wasn’t as “impressive”.
Homeowners who missed their mortgage payment fell slightly to 4.57% in the second quarter, down from 4.63%, and showed its first drop in four years. Also, the number of homeowners who received their first notice of foreclosure also fell from 1.2% to 1.1%.
Both reports were non-threats to the bears as they have taken slight control of today’s action.
The Dow is down 14 points to 10,046 but has traded in a tight range. The index hit a high 10,104 and briefly gave up its gains after the mortgage numbers but bounced back before succumbing to selling pressure again. Resistance remains 10,200 but is moving lower and the Dow’s upside now looks limited to 10,100-10,200. Lower highs, and lower lows means we are still trending lower, folks.
The S&P is showing a fractional loss and is flat at 1,056 but is still struggling to hold the 1,050 level. The index has traded to a high of 1,060 but looks weak. The Nasdaq is down 3 points to 2,138 and will lead the way lower or higher for the rest of the session.
Turning to earnings, TiVo (TIVO, $8.19, down $0.24) is down 3% after beating Wall Street’s expectations but they still reported a loss for the quarter. The company reported a loss of $15 million, $0.13 a share, versus a loss of $3 million, or $0.03 a share in the year ago quarter. Analysts were looking for a loss of $0.15 a share.
TiVo did say some good things as sales of its new Premiere DVR recorder has been a hit with die-hard customers. It was the first quarter in three years that sales of TiVo’s equipment through retailers have increased.
The company has been locked up in litigation battles over patent disputes and TiVo fell hard after receiving an unfavorable ruling in mid-May. Shares fell from $17 to $10 that day but the fight isn’t over. We have covered TiVo for a few years and we think they have a good argument.
We also think TiVo is an attractive takeover candidate and the rumor mill has Apple (AAPL, $243.85, up $0.96) making a pitch for the company.
Apple will do a show-and-tell update at the beginning of September and many expect them to update their iPods, which could include an iPod Touch with a camera. Other chatter is that the company will update its plans for the Apple TV with could include an App Store. No more cable bill? Buy the shows you want to see for a buck? We’re down. There could be some “cloud-based” services offered by Apple as well.
TiVo has the best DVR product on the market and an updated Apple TV box would benefit from TiVo’s technology as Apple maps its next course of dominance.
The grape vine is always full of interesting stories but TiVo should survive with or without Apple. The cable companies still could end up paying TiVo but as the litigation process drags, so will TiVo’s shares until some good news comes out.
We have updated all of our current trades in our members Area and we will be back Friday morning with a fresh update.
Tags: AAPL, option picks, stock options trading, TiVo
Posted in Apple, Company Commentary, Market Analysis | Comments Off
Sunday, May 16th, 2010
10:45pm (EST)
If this is your first stock market rodeo, buckle up.
Wall Street went on another wild ride as the bulls made a mad dash to previous support levels but found out the bears aren’t clowning around. We knew stocks would rebound last Monday when Europe threw in the kitchen sink to help solve the troubled Euro and we were watching key resistance levels like a hawk.
The $1 trillion “proposed” bailout and support package was impressive and proved their commitment to save the currency was real, but, did you really think it would go smooth? More on that in a minute…
The bulls won the first half of the week and overall, but the bears closed it out with all the momentum. The 11th hour sell-off on Thursday carried over into Friday as all three indexes fell nearly 2%.
The Dow dropped 162 points, or 1.5%, to finish at 10,620. The index traded a little above the 10,800 resistance level and reached a high of 10,950ish before stumbling. For the week, the Dow added 240 points, or 2.3%, but all signs are pointing towards a test of 10,000.
Remember, Dow 10,800-10,900 was support when the market was moving higher so now it becomes resistance. On Wednesday, we said the Dow could “stretch” this level but that we believed the blue-chips could test 10,200-10,250, after stalling. A break below these levels could easily push the index back below 10,000.
The S&P 500 fell 22 points, or 1.9%, and settled at 1,135. The index fell below the 1,150 level after trading to a high of 1,173 but added 25 points, or 2.2% for the week. We think the S&P could test 1,075 over the short-term.
Meanwhile, the Nasdaq sank 48 points, or 2%, and closed at 2,346. The index hit a high of 2,434 and breached the 2,400 level before ending the week with a gain of 81 points, or 3.6%. However, we see 2,200 in the cards and possibly a trip below 2K.
Turning to stocks, the Financial sector took a whipping after the government said it would give the Fed authority over the fees charged to merchants on debit-card transactions. This was a huge blow to the industry and gives merchants more leverage to bargain.
Businesses could impose “minimum” purchase amounts for you to use your card which could mean you pay more with cash on smaller items. On top of that, the Fed will have the authority to regulate the fees charged per swipe. Good for us in some ways but bad for the credit card firms.
Visa (V, $77.26, down $8.47) dropped 10%, MasterCard (MA, $212.45, down $19.86) slid 9% and Capital One Financial (COF, $42.76, down $2.16) gave up 5% in Friday’s session.
Elsewhere, TiVo (TIVO, $10.16, down $7.23) fell over 40% after a court said its patent infringement victory against EchoStar (SATS, $20.45, down $0.02) and Dish Network (DISH, $22.90, up $0.94) would be reconsidered in appeals court. This was a huge blow to TiVo as the company was in line to receive hundreds of millions in damages from the infringement. We are watching these developments carefully as we think there will be a great opportunity to go long or short, depending how this shakes out, in the coming weeks.
One stock that bucked the trend was Hauppauge Digital (HAUP, $3.93, up $0.90) which surged 30% after the company said its products can now stream live TV over the internet for Apple’s (AAPL, $253.82, down $4.54) products. HAUP was at $1 on Wednesday, jumped $2 on Thursday and hit a high of $4.85 after the opening bell on Friday. Wow.
You cannot trade options on this stock but it was cheap enough that it didn’t matter. We aren’t sure if the recent gains will hold or if shares are headed to $10 because the company wasn’t making a lot of money before the news. However, we are going to download the $9.95 app and see how well it works. If it turns out to be a hit then we could see double-digits if it catches on.
We mentioned last week not to be nervous if the market heads lower because there will be plenty of opportunities on the downside. Most investors don’t know how to make money in a down market because they get scared.
The recent “supposed” Wall Street shenanigans have spooked investors and the trust seems to be lost. Want proof?
Investors have yanked nearly $3 billion out the stock market which is the most since March 2009 as people rush to “safety”. Throw in the Dow’s 1,000-point “flash crash” or “fat finger” debacle a little over a week ago and it’s easy to see why some investors’ feel Wall Street is rigged (it’s not, although it ain’t a pretty picture right now). There will be another hearing on Thursday on what caused the plunge.
Any time a stock falls from $40 to a penny in a matter of hours, which is what happened to Accenture (ACN, $38.99, down $1.83) the day we got the 1,000 point drop, there is cause for concern. Whoever got into that trade for a penny a share was lucky but the trades were eventually canceled.
It just goes to show how Wall Street has gotten away from the human element of things as more and more electronic systems and market makers have come in over the years. This needs fixing.
The market is always looking ahead and you can almost feel the uncertainty in the air. Use this as an opportunity to look for some short sales or buy put options. The trend is your friend and right now we are looking lower.
We will be back in the morning with the list of companies reporting earnings and a full update on all of our current trades. Monday could be nasty as the Asain markets are down 2.5% as we go to press…
Tags: HAUP, Hauppauge Digital, MasterCard, option picks, option signals, options alerts, stock options trading, TiVo, TiVo lawsuits, Visa
Posted in Trading Psychology, Trading Tips, Weekly Wrap | Comments Off
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Tuesday’s Tidbits
Tuesday, May 3rd, 2011
9:00am (EST)
The bulls stampeded out of Wall Street’s gate at the start of Monday’s trading session on news that America’s most wanted terrorist, Osama Bin Laden, had been killed by U.S. military. However, the euphoria only lasted until lunchtime before the bears made their presence known. The market was able to extend its three-year highs at the open but the lack of momentum ultimately led to the bulls’ first loss in a week.
The Dow reached a high of 12,876 but finished lower by 3 points at 12,807. There is short-term support at 12,600 while the bulls will continue their pursuit of Dow 13,000.
The S&P 500 traded to a top of 1,370 and we were looking for a break past 1,375 for a possible run to 1,400. However, the index fell 2 points to end at 1,361 after touching a low of 1,358. The bears will be pushing for a close below 1,350.
The Nasdaq fell nearly 10 points and settled at 2,864 but not before kissing another decade high of 2,887. The bulls are planning for a run to 3,000 while the bears look to get Tech back under 2,850.
The Energy sector saw some strong gains intraday but gave them back as well after oil rebounded. ”Black Gold” was down to $111 a barrel at the open but finished near $113.50. Oil’s bounce came after the U.S. dollar fell apart (again). Although the greenback finished relatively unchanged, the dollar set a new two-year low against other currencies before rebounding.
TiVo (TIVO, $9.86, up $0.29) had a good day after gaining 3% on news that it settled a patent lawsuit against EchoStar (SATS, $34.99, down $2.09) and Dish Network (DISH, $29.79, up $4.75) for $500 million. The legalities involved TiVo’s video recording technology and the agreement was a huge win for the company. Although legal battles can be costly and will continue, the agreement only scratches one name off TiVo’s list as they go after other companies who may have infringed on their technology.
We have been watching these developments for years and you will see from our Track Records that we like to trade TiVo. Our latest TiVo recommendation was a covered call trade for our Weekly Wrap which is on pace to return 40% in less than 2 months if shares are at $10+ by mid-May.
The Biotech sector showed some decent gains yesterday and there are a few names we have been watching for possible breakouts. Seattle Genetics (SGEN, $16.84, up $0.23) has been on our Watch List for a few weeks but is a stock we have been following for quite some time while Vivus (VVUS, $7.80, up $0.03) has been an open trade of ours since January.
We have compelling reasons to believe both of these stocks are set for much bigger gains down the road but there could be pullbacks along the way. Of course, we first introduced Vivus to our subscribers in January 2009 when shares were trading at $5.37 and said to watch this entire drug obesity push. It has been a couple of years but the first company to get it right stands to make billions in sales so the rush to get a drug to market is on. Arena Pharmaceuticals (ARNA, $1.33, down $0.07) and Orexigen Therapeutics (OREX, $3.13, flat) are the other two players but we like Vivus for its pipeline.
Futures are pointing towards a slightly lower open this morning. Dow futures are down 32 points while the S&P and Nasdaq futures are off by 4 points each. Subscribers, check the Members Area for the trade updates.
Tags: call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options trading course, SATS, SGEN, stock market options, strangle option trades, TiVo, weekly options
Posted in Market Analysis, Market Commentary | Comments Off