Posts Tagged ‘Intel’

Dow Penetrates Millennium Marker

April 11, 2010

A late session push by the Bulls nudged the Dow Jones Industrial Average just above the 11,000 level before settling in for a 10,997 close. This was the highest apex for the blue chip index since September 29, 2008. The S&P 500 and NASDAQ Composite followed suit achieving new annual highs to close the week at 1194 and 2454, respectively. Fed comments about an improving economy, bringing into question the possibility of interest rates, threatened to continue the previous week’s pattern of failed attempts to hold above 10,900, but upbeat news on Thursday and Friday brought renewed enthusiasm, leading to an upside penetration of resistence.

A record-setting 9.1% surge in retail sales and a possible merger between United Air and US Airways began the rally on Thursday. Friday’s wholesale sales report and a positive outlook from Chevron continued the pace that led to the Dow’s penetration of the millennium marker. (Note – The Dow first penetrated 11,000 in July 1999) Momentum is clearly on the side of the Bulls driven by institutional buying who can protect long positions with by purchasing put options. Individual investors remain on the sidelines, fearful of the resumption of the Bear market, sustaining a bullish contrarian viewpoint.

The Russell 2000 Index of small cap stocks has been on a tear, more than doubling since its March 2009 low. It closed the week above 700, a level that acted as support in 2007 and 2008. The next level of resistence is 750, a level last reached in 2008. Support for the S&P 500 remains at 1150 with resistence at 1200. If the Dow is able to sustain itself above 10,900, an advance to 11,500 would be expected.

The week ahead brings the official kickoff of first quarter earnings season. It is unclear whether expectations are dangerously high, which could potentially lead to disappointment, or warranted, given the steady stream of positive economic news. Alcoa (AA), traditionally a proxy for the quarter’s results, will report on Monday. CSX Corp. (CSX) and Intel (INTC) are scheduled to report on Tuesday, with JP Morgan (JPM), Bank of America (BAC), General Electric (GE), and Google (GOOG) scheduled for later in the week.

Don’t forget, Tax Day is Thursday, April 15. Data suggests no unusual deviation from current market trends can be attributed to tax day. The good news is, if you owe taxes, you must have had a job in 2009. That’s something to be thankful for in the current economic environment. So Happy Tax Day! (Still seems like an oxymoron?) Hopefully, the rising trend in employment will endure.

There’s more good news for our managed portfolios which continue to produce phenominal returns.The hedged account closed the week of April 9 at $1,725,284, with the un-hedged account ending the week at $2,0260148. 

 

Learn more about the strategy used to produce outstanding results by visiting our website at http://optionsprofitzone.com.

Michael

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Dow Hits 15 Month High

January 13, 2010

Stocks recovered nicely from Tuesday’s negative response to lower than expected earnings from Alcoa and Chevron’s warning of expected shortfalls with a 53 point climb to a new 15 month high. After a mid-morning sell-off the blue chip index turned sharply after investors considered the testimony of several top banking executives on Capital Hill which included the CEO’s of Goldman Sachs and JP Morgan. The Dowe topped the 10,700 market since September 2008. Merk led the pack after an upgrade by Credit Suisse who moved its target price from $35 to $47 per share. The S&P followed with a gain of 9.5 points to close at 1145 within reach of its 1157 resistence while the NASDAQ broke above its 10-day moving average closing at  2307. All eyes are on Intel’s earnings report on Thursday for clues as to the strength of the economic recovery.  A positive Intel number may be just what the Bulls need to move this market through near term resistence.

Crude oil dropped for the third consecutive day reversing a month-long uptrend after stockpiles of crude and gasoline grew by more than analysts predicted suggesting that consumer demand remains weak. Gold moved higher in response to a weaker dollar to close at $1136.80 per ounce, a gain of $7.40.

As promised, I am posting Friday’s closing values for our managed portfolios which came in at $1,452,645 and $1,602,701 for our hedged and unhedged portfolios.  This represented a gain of $12,448 and 24,659, respectively.

For more info go to http://optionsprofitzone.com.

Michael

The Bulls Have It

January 10, 2010

Stocks celebrated the New Year by posting a 1.5% gain on its first day of trading before settling in for the rest of the week, ending Friday only 35 points higher than the Monday close. The Dow Jones Industrial Average finished the week at 10,618, well over the 10,500 resistence level which was penetrated on December 14 with the S&P settling above its resistence of around 1120 with a close of 1144. Encouraging words from the Fed and Treasury regarding keeping interest rates low offered traders reason to remain optimistic which led to Monday’s impressive move which broke through muti-month highs. Even Friday’s disappointing December unemployment number couldn’t hold back the charging bulls. Potential resistance for the S&P 500 is at 1,157.80 with major resistance at 1300. The first sign of resistence for the Dow Jones Industrials is at 11,000.

The Financial sector looks to improve in 2010 after rallying 6% for the week pushing through stiff resistance. Technology stocks continue to dominate Wall Street evidenced by the Nasdaq soaring 2.1% for the week. The Internet sector remains one of the strongest with the Internet HOLDRS Trust (HHH) gaining more than 69% during the past 52 weeks.

Fourth quarter earnings will take the stage in the coming week with Alcoa (AA) reporting on Monday. Additional earnings from KB Home (KBH), Intel (INTC), and J P Morgan will be reported throughout the week. Economic news will include December retail sales on Thursday with Friday reporting the December CPI, capacity utilization and industrial production, the Empire State manufacturing index and Michigan’s consumer sentiment index.

The data from our managed portfolios was not available when I penned this commentary. I will post it when I get it.

In the meantime, Happy trading.

Michael

Houston, We Have a Catalyst

October 11, 2009

sts-001-liftoff-desk1Monday’s ISM data wasn’t the only news for the week after all. The bulls found their catalyst with Australia’s 25 basis point interest rate hike, which helped to drive the U.S. dollar lower, in turn, lifting the Dow Jones into orbit with a new year-to-date high. The S&P 500 and the NASDAQ each posted 4.5% gains for the week. There was some concern early Friday as Fed Chairman Bernanke vowed to raise key interest rates and reduce stimulus efforts when the recovery in the U.S. economy becomes more pronounced. However, unexpected earnings  from Alcoa (AA) and the Commerce Departments report showing  narrowed trade defecit gave the market a late push adding to the weeks gains.

The week ahead brings another option expiration Friday. These weeks have had a positive bias in the past but often get started on a down beat. Be prepared for weakness on Monday but a rally during the week if we get better than expected earnings news. However, some are calling for the possibility of disappointing earnings when compared to the second quarter, which was buoyed by cost cutting efforts that may not be in place for the third quarter. Look for earnings from Johnson & Johnson, Intel and CSX on Tuesday, with J P Morgan, and Abbott Labs reporting on Wednesday. Citi, Goldman Sachs, Google and IBM will follow on Thursday with earnings from Bank of America, GE, and Halliburton due on Friday. Key economic reports including CPI and initial jobless claims will be released on Thursday followed by industrial production and capacity utilization on Friday.

Historically, good news from Alcoa, like we saw last week is followed up with more good news in the next few weeks. A break above the S&P resistence of 1080 could lead us to the 1120 range. Improving economic recovery has led to a rise in energy prices, in anticipation of rising demand. Still, I wouldn’t rest easy until after October is behind us.

Our model portfolios continue to soar with our hedged account closing at $1,311,790 and our newest portfolio coming at an astounding $1,361,408 a gain of almost $65,000.

OPZ Running Total copy

Good Luck and Happy Trading,

Michael

More on Earnings and Guidance

July 14, 2009

Bull and Bear smallGoldman Sachs blew away earnings estimates (as expected) and closed up $0.22, its highest close of the year. Though it’s higher in after-market trading, if it keeps with previous patterns, expect a modest decline in the coming sessions. INTC reported $0.18 eps today before charges, far above  estimates of $0.08. They also  gave guidance for Q3 revenues of $8.1 to $8.9 billion which agian exceeded consensus estimates of $7.81 to $7.97 billion. Shares were up in after-market trading. Correction: Google is scheduled to report earnings on Thursday.

The rally we’ve seen after the bearish pattern that developed last week could be setting the bulls up for a fall. Many are saying that the bearish signal has failed. But the market never does what the masses predict, so watch for a decline towards the end of the week. The bearish pattern is still intact and may be sneaking through the “green shoots” waiting for optimism to reach a crescendo before raising its ugly head. Don’t be caught off guard! At a minimum, raise your stops.

Michael