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5-20-2013 Watch List

 

Another strong week for the market surprising even me. The SPY blasted above 167 on friday then settled at 166.94... 166.94! Thats right, it’s not a typo. A few months back we were worried about $140 on the SPY, now we are worried about $170! Things can really get interesting as the weeks progress here as the only real negative catalyst folks have been hyping is Fed cutting back it’s purchase program. The Debt ceiling debate has taken a back burner as Fannie and Freddie helped the government stuff it’s coffers, and has given time to the politicians to work something out.

The Fed minutes are released on Wednesday, and folks will be scouring for any hint of scaling back QE. Big Ben also will be giving a Testimony on the economy, which may or may not have hints of QE as well. I think Big Ben is a lame duck now, and will not be issuing any market moving news, but we shall see.

 

We still have some nice earnings plays this week. We reviewed some of them in the week ahead Webinar for those who missed it: https://www.optionmillionaires.com/forum/showthread.php/421-The-Week-Ahead-with-UPB-and-JB-5-19-2013?p=684#post684

 

UPB also has some trade ideas to start the week: https://www.optionmillionaires.com/2013/trade-ideas-for-this-week-aapl-ntap-low-tlt-and-possible-earnings-trades/

 

QIHU reported strong earnings this morning, and the stock is up nicely pre-market. Silver and Gold tanked as futures opened last night, and have since rallied back some. Still think they both have a ways to go down, and will be interesting to see if Gold can make it 8 down days in a row!

 

Here are some of the analyst changes for today:

 

 

TSO Tesoro price target raised to $69 from $58 at Imperial Capital
Imperial Capital raised its price target for Tesoro after the FTC cleared the company's acquisition of BP Carson. The firm keeps an Outperform rating on the stock.

 

 

CF Industries downgraded to Hold from Buy at Miller Tabak
Miller Tabak downgraded CF Industries due to valuation. Price target remains $220.

 

 

DDD 3D Systems price target raised to $54 from $44 at Maxim
Maxim raised its price target for 3D Systems saying additive fabrication is in early stages of technology adoption. The firm keeps a Buy rating on the stock

 

 

JCP Follow-up: J.C. Penney upgraded to Buy from Hold at Maxim
Maxim upgraded J.C. Penney on expectations the company's strategy changes under new CEO Mike Ullman will drive traffic. The firm said its recent channel checks indicate that store traffic has increased and it raised its price target for shares to $27 from $16.50

 

 

SNDK SanDisk downgraded to Neutral from Buy at Nomura
Nomura downgraded SanDisk due to valuation. Price target is $60

 

 

QIHU Qihoo 360 price target raised to $49 from $41 at Stifel
Stifel increased its price target on Qihoo after the company reported Q1 results that the firm views as strong, and provided Q2 guidance which indicates that its revenue growth will accelerate. The firm keeps a Buy rating on the shares.

 

 

BA Boeing price target raised to $115 from $100 at Stifel
Stifel increased its price target on Boeing, citing several factors including resumption of 787 deliveries and production work on 787-9, improved margins, and better than expected results from its defense business. The firm keeps a Buy rating on the stock

 

 

PCLN priceline.com upgraded to Buy from Hold at Deutsche Bank
Deutsche Bank upgraded priceline.com (PCLN) on expectations the company's margins will stabilize in the second half of 2013. The firm calls priceline.com one of the best growth stories in Internet and raised its price target for shares to $900 from $715. Deutsche also raised its price target for Expedia (EXPE) shares to $86 from $80 and for TripAdvisor shares to $68 from $60. The firm keeps Buy ratings on both of those names.

 

 

Here are some of the strikes I am looking at:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
PCLN CALL $870.00 Weekly 0.65 0.45
ZSL CALL $105.00 June 2.40 2.10
SAM CALL $170.00 June 0.75 0.45
SLV PUT $19.50 Weekly 0.09 0.10

 

 

ZSL is an Ultra-Short silver ETF. I like SAM to squeeze after regaining it’s footing last week, thanks Mikey for pointing this out in the 140s. Will try for PCLN calls if things get irrational but will wait for about an hour before I start looking.

 

On a side note, lets make sure we keep the chatroom a great environment for everyone and respect discussions in there. If you dont like what someone says or dont agree, and you can;t keep it respectful, just ingore. Thanks! :

https://www.optionmillionaires.com/forum/showthread.php/422-CHATROOM-Etiquette?p=685#post685

 

Lets have another Great week!!!

 

- JB

Returning To Risk – The NASDAQ Looks Like The Place To Be Again…

For the first three years and two months since the March 2009 bear market bottom, NASDAQ stocks broadly lead other stocks listed on other American exchanges.  This behavior of perhaps the most economically sensitive sector, technology, leading the rest of the market in the early stages of a bull market is typical.  However, as the bull market aged and investors started to rotate to safety (big cap consumer staples, healthcare, and utilities), technology stocks began to lose favor, with the relative strength line (definition in the link) for the PHLX Semiconductor Index peaking in February 2011 and the relative strength line for the NASDAQ peaking in April 2012.  It looked like some of the early signs of weakness often seen before a major market peak.  Then the central bankers of the world decided that was not the correct path for the world and flooded the world economy with cash, which made the market act as if it had just rebounded off of a major market bottom.

 

First it was utilities, as investors skeptically put more money to work in defensive issues, wary of the impact of the fiscal cliff (From November to April, XLU climbed 30%!)

Then,  the small cap Russell 2000 and S & P Mid Cap Index outperformed, but both lost ground before and slightly after the sequester.

Finally, as the market refused to even pull back, money began to flow to the forgotten sector , technology.

 

Here is where we are now.  The defensive investing styles of 2012 are obsolete, or at least until central bankers decide to take away the proverbial "punch bowl."

Investors appear to be running from low growth, safe sectors like utilities in recent weeks...

http://s17.postimg.org/ufhrdlidb/OEX_DJU.png

Not to mention that the yield investors have demanded for high grade corporate bonds has climbed in recent months, as the perceived value of safety declined...

FRED Graph

While signs of new life are evident in the relative strength line for semiconductors versus the S & P 500 (Semis lagged for years)...

SOX SPX

And the NASDAQ looks like it may continue to outperform the market...

COMPQ SPX

Yes, even Apple looks strong, but more investor demand for the stock is likely needed to push the stock above $460, which has historically provided some issues for the stock.

The phase so popularized in 2012, "don't fight the Fed" now carries a corollary, which is "don't fight the market."  The character of the market is changing, and as investors, we should adapt to enrich ourselves as much as possible.  So, for those investors still clinging to the 100% defensive portfolios of last year, consider diversifying a bit until conditions tell us otherwise.  (USD) and (SMH) offer exposure to semiconductors, which have been outperforming the NASDAQ in recent weeks.  (QQQ) and (QQEW) both track the NASDAQ on a weighted and equally weighted basis (Apple skeptics might like (QQEW)).  For those who are still too risk averse to the ETFs, consider a buy-write or married put, which will lower overall risk considerably.

 

 

5-17-2013 Watch List

 

Yesterdays was the 3rd red day on the SPY in the month of may. A few more like that and those “Sell In May” folks, could start to come back out of the closet. At the open yesterday, it looked like the market would continue to steam along, yet sellers came in at the end of the day, and we closed near sessions lows. GOOG started the morning at 925, only to fade down to $900 shortly after the open. PCLN broke all-time highs only to close back at 800, and NFLX finally touched $250 only to fade the rest of the day into the mid 230s.

Gold and Silver looked ready to plunge, yet regained some footing during the session.

Weak data is being blamed for the red day, as jobless claims rose much more then expected. Folks also blame the continued rumors of the Fed curtailing it’s purchase program.

The Nikkei broke its short slump and finished solidly green, and Europe looks to be headed towards a green close as well. We shall see if U.S. equities follow.

 

Here are some of the analyst changes today:

 

 

JCP J.C. Penney downgraded to Sell from Neutral at Northcoast
Northcoast downgraded J.C. Penney citing the weak Q1 report and gross margin weakness.

 

JCP J.C. Penney situation should only improve from here, says RW Baird
Baird believes there are several reasons why J.C. Penney's situation should only improve from here including better recent trends, prudent pricing and promotion, easy comps, and the re-introduction of in-demand product for fall. Baird maintains its Neutral rating and $19 price target pending further details on the company's new strategy

 

DE Deere downgraded to Sell from Neutral at Goldman
Goldman expects a decline in U.S. ag equipment capex due to rising crop inventories and notes high U.S. dealer inventories above historical levels. As a result, the firm expects Deere earnings to be below consensus and downgraded shares to Sell and lowered its price target to $85 from $98.

 

SINA SINA shares still undervalued on Alibaba deal, says Piper Jaffray
Piper Jaffray views SINA's Q1 results as mixed, but says shares remain undervalued as investors are not fully appreciating the Alibaba/Weibo deal. Piper expects shares to move higher as investors continue to factor in the deal and keeps an Overweight rating on the stock with a $75 price target. :

 

 

Make sure you check out UPB’s chart webinar from yesterday: https://www.optionmillionaires.com/forum/showthread.php/412-Live-with-UPB-5-16-13?p=675#post675

 

Also, here is the link to sign up for the Week Ahead Webinar on Sunday at 10:30 : https://www.optionmillionaires.com/live-event-classes-jtv/

 

Will be keeping it small with lotto options today:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SINA CALL $60.00 Weekly 1.75 0.25
NFLX CALL $245.00 Weekly 0.30 0.15
GOOG CALL $920.00 Weekly 0.65 0.30

 

 

Lets have a great end to the week!

 

- JB

5-16-2013 Watch List

 

The “Sell in May” and go away rally continued yesterday and there some more mind boggling moves. Well not really Mind boggling.. or at least not yet. GOOG broke above 900 and looks to continue its recent mojo from earnings, PCLN broke over 800, and NFLX broke over 240.

We also had an awesome move on SHLD and the 60 calls that we alerted as a trade idea at .19 hit 1.46 in a matter of hours. SLV puts also started to work as the 22.50 puts we alerted at .26/.27 hit .81 and will be higher at the open today.

 

We had some data out today, to include Jobless claims and the CPI number. Jobless claims rose more then expected, and the CPI dropped a bit more then expected. The Jobless claims are weighing on futures, but we know how this story ends.

CPI for the past 12 months is at a 3 year low and bodes well for my short thesis on SLV, GLD, Gold, and Silver.

 

I only see 2 red days so far in May so will be easy for folks to think the market needs a breather, but I thought at the start of the week we would need one, and boy was I wrong. Some nice earnings by KSS this morning has it up nice pre-market, and will be watching SINA earnings tonight.

 

Here are some of the analyst changes for today:

 

 

P Pandora fundamentals remain strong, says Canaccord
Canaccord believes Pandora's fundamentals are strong ahead of the Q1 report. The firm's checks indicate growing audio ad load, higher quality advertisers, and improving content costs and subscription revenues. Shares are Buy rated with a $18 price target.

 

ABX Barrick Gold downgraded to Underperform from Neutral at Macquarie

 

YOKU Youku Tudou upgraded to Hold from Sell at Maxim
Maxim upgraded Youku Tudou to Hold citing improving growth following the company's Q1 results.

 

F Ford upgraded to Buy from Hold at Craig-Hallum
Craig-Hallum upgraded Ford following checks that indicate European production has bottomed, which removes an overhang. The firm believes investors will focus on strong North American results and an improved balance sheet. Price target raised to $18 from $15.

 

DFS Discover network business remains undervalued, says Susquehanna
Susquehanna believes Discover's network business is still undervalued calling a hidden asset. The firm expects the company's multiple to expand as the network surfaces on the PayPal and other partnerships. Shares are Positive rated with a $49 price target.

 

JCP J.C. Penney shares more expensive than they look, says Wells Fargo
Although J.C. Penney's market cap is $4.2B, its enterprise value, including its net debt, is $7.4B, according to Wells Fargo. That is very similar to 2010 levels, when the retailer's EPS was $1.38, according to the firm. Wells notes that the stock would be trading at 15.1 times earnings even if the company generates $1.26 in EPS sometime in the future, and it keeps an Underperform rating on the shares.

 

GOOG Google price target raised to $1,025 from $830 at RW Baird
RW Baird raised its price target for Google shares to $1,025 following the company's I/O conference and keeps an Outperform rating on the name. Baird thinks Chrome continues to gain momentum and that yesterday's event highlighted Google's technology advantages. Shares of Google closed yesterday up $28.79 to $915.89, and are indicated up another $5.66 in pre-market trading.

 

AAPL Apple initiated with a Neutral at Susquehanna
Target $480.

 

 

Again, have quite a few positions so will be a small watchlist for the open. Will try for some more GOOG lotto calls possibly as well as getting a few &^%$ calls. I am not allowed to put the ticker here, but it will be right below.

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SINA CALL $67.50 Weekly 0.25 0.25
GOOG CALL $960.00 Weekly 0.30 0.25

 

Dont forget about the 1pm Webinar with UPB today: https://www.optionmillionaires.com/2013/charts-with-upb/

Lets have another GREAT DAY!

 

- JB

5-15-2013 Watch List

 

Just when you think the market needs to consolidate or take a breather, it rallies another 1%. What a strong rally yesterday as the market closed once again at all-time highs. There were some decent movers yesterday, to include SODA which hit a multi-year high off 66.05!

WYNN and NFLX continued to move higher and like them both to extend their moves here. Also sent a text trade idea around SHLD, as the stock firmly broke above resistance and looks poised to test 58.50+ in the next session or two : https://www.optionmillionaires.com/2013/text-trade-idea-for-the-week-of-may-14th-2013/

 

Silver and Gold have been falling overnight and hopefully will continue to fade instead of finding support after the open like it has the past few days. UK lowered their inflation target for the year, and I still think deflationary worries will cause folks to sell off commods. We have the CPI number tomorrow which could continue to hint at deflation.

GOOG price target was hiked by MS to $996 and the stock looks poised to break above $900... finally.

 

Here are some of the analyst changes for today:

 

 

BBRY BlackBerry downgraded at Bernstein
As previously reported, Bernstein downgraded BlackBerry to Market Perform from Outperform. The firm downgraded shares based on valuation, lack of near-term catalysts, and risk the company does not meet high expectations. Price target lowered to $15 from $22

 

RENN Renren downgraded to Perform from Outperform at Oppenheimer
Oppenheimer downgraded Renren after the company's Q2 outlook missed expectations citing a slow ramp-up in SNS advertising and the company's rising investments.

 

TSLA Tesla price target raised to $50 from $35 at Deutsche Bank
Deutsche Bank raised its price target for shares of Tesla to $50 while keeping a Hold rating on the stock. Deutsche says it is not taking a view on the current share price as it believes short-covering could support the stock price for some time.

 

DPZ Domino's Pizza downgraded to Hold from Buy at Miller Tabak
Miller Tabak downgraded Domino's Pizza due to valuation.

 

FL Foot Locker recommended ahead of Q1 report at Canaccord
Canaccord raised Foot Locker estimates and recommends buying ahead of the Q1 report on May 24. The firm raised its Q1 EPS estimate to 91c from 90c, vs. consensus of 87c based on robust underlying demand and stronger comps. Shares are Buy rated with a $41 price target.

 

KORS Michael Kors recommended ahead of Q4 results at Piper Jaffray
Piper Jaffray expects Michael Kors to post a solid Q4 earnings beat on May 29 and said it would continue adding to positions in the name. Piper thinks current quarter retail trends have been strong and reiterates an Overweight rating on the stock with a $77 price target

 

EXPE Expedia momentum strong in international markets, says Cantor
Cantor believes that Expedia's Chinese subsidiary is continuing to gain market share, while room night growth accelerated quarter-over-quarter in the company's other international markets. The firm reiterates a $75 price target and Buy rating on the shares.

 

GOOG Google price target raised to $996 from $932 at Morgan Stanley
Morgan Stanley believes Google has been focused on video advertising dollars and that YouTube can generate operating income of $5B by 2020. Shares are Overweight rated.

 

WMT Wal-Mart price target raised to $88 from $78 at RW Baird
Baird raised its price target on Wal-Mart ahead of Q1 results. The firm expects flat Q1 earnings but sees potential for improved trends across the rest of the year. Baird noted shares are trading at a discount to consumer staples peers and at a discount to the market yet has high earnings visibility. Shares are Outperform rated

 

 

Will be keeping it small once again and stay tuned to chat and twitter for any updates. Here are the strikes I am looking at:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SFLY CALL $50.00 Weekly 0.10 0.05
SLV PUT $21.50 Weekly 0.07 0.10

 

 

Lets have a great trading day!

 

- JB