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December 11th, 2013 Watch List

Markets closed Tuesday in the red, with no real catalyst for the move. Of course, if you read the headlines folks are continuing to use the possibility of a Fed-directed "taper" in its economic stimulus program as a reason for markets to be up or down, and I find it to be pretty comedic at this point.

One reason is that a bipartisan budget deal has been reached and, hopefully, will pass. This means there should be fewer financial and economic headwinds heading into 2014 and, that's right: even more chatter of the taper coming sooner rather then later.

Some big news out of Mastercard after hours, with a 10-1 split, a raised dividend and a and stock buyback coming. The news pushed the stock over $800 yesterday and it's trading in the $790s this morning.

COST reported some nice revenue numbers this morning, but another earnings per share (EPS) miss. Traders sold off the stock but it now looks to be rebounding. I didn’t buy any calls yesterday, but I may look for some at the open. COST remains a great story and I think the revenue growth trumps the EPS miss.

Baker Street Capital Management, the firm that posted a bullish piece on SHLD, raised its stake in the company to over 10%, the result being that SHLD is up 4% pre-market. I'd have to think that investment is in the red due to last week's pullback. I'll most likely continue to stay away until the dust settles or I see a true breakout occur.

SINA found some buyers yesterday amid rumors of a Weibo IPO, which is destined to come at any point in the next few months. The chart looks phenomenal for a bounce and I did buy some calls yesterday as well as alerting via text message. Here are my thoughts on SINA: https://www.optionmillionaires.com/sina-sina-set-break-90/

I still love SCTY and I'm looking for a break of $55.60 in the next trading session or two. Also, WYNN had another upgrade this morning and I'm hoping for a move into the $185-plus area.

For those that missed Lee’s Webinar last night, it's now posted in the forum: https://www.optionmillionaires.com/forum/showthread.php/732-Selling-Premium-Against-Long-Term-Positions-With-LeeMalone?p=1335#post1335

A few analyst changes of note today:

FIO CLSA says a takeover of Fusion-io is less likely
CLSA said a takeover scenario of Fusion-io by a storage company, OEM, NAND vendor or component provider is less likey. The firm previously thought EMC would be a likely candidate but no longer believes it wants to buy a PCIe component maker now that it has good results and said NetApp never had interest. The analyst does not believe an OEM would buy Fusion-io because then no other OEM would likely sell its product and believes its size is too big for component vendors. Shares are Underperform rated with a $9 price target, down from $12
HD Home Depot view generally in-line with consensus, says Deutsche Bank
Deutsche Bank said Home Depot's outlook for FY14 and FY15 is "more or less" in-line with consensus expectations, though adds that the company is potentially being conservative, as it has been in the past. Deutsche keeps a Hold rating and $80 price target on Home Depot
BRCM Broadcom design win leaves deficiencies in LTE business, says Brean Capital
Brean Capital noted Broadcom management was excited about its design win with Samsung but the firm still sees notable deficiencies in its LTE business which need to be rectified to compete longer term. The firm raised its estimates and its price target moves to $33 from $31
AAPL Apple could generate $3 in EPS from China Mobile in 2014, says Bernstein
Bernstein believes that a deal between Apple (AAPL) and China Mobile (CHL) could boost Apple's EPs by $3 in 2014, and raise its 2014 revenue by $9B. But the firm warns that estimates for Apple's March and June quarters appear high. It keeps a $600 price target and Outperform rating on Apple
LULU lululemon investors should buy the dips, says RW Baird
Baird Believes the leadership announcements at lululemon have removed an overhang for the stock. The firm believes the executive change signals little shift in strategy, and the new CEO, Laurent Potdevin has experience in international brand building, technical apparel, and operational experience. Shares are Outperform rated with an $87 price target
WYNN Macau stocks price targets raised at Wells Fargo
Wells Fargo raised its price targets on several companies with Macau casinos as the firm believes that Macau gaming trends have been strong. The firm also thinks that these companies have several upcoming positive catalysts. Wells increased its price target on Las Vegas Sands (LVS) to $80-$90 from $80-$85, on Melco Crown (MPEL) to $40-44 from $38-$42, and on Wynn Resorts (WYNN) to $195-$205 from $185-$195. The firm has Outperform ratings on all three stocks and ranks them in the order presented in the previous sentence
NFLX Netflix price target raised to $390 from $355 at Citigroup
Citigroup raised its price target for Netflix shares to $390 citing the company's international opportunity from the secular growth in Internet video consumption. Citi, however, keeps a Neutral rating on the stock due to valuation

I'll be looking for some COST calls, possibly, as well as some SSYS calls, finally:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
COST CALL $120.00 Weekly 1.80 0.35
SSYS CALL $135.00 December 0.55 0.55

Lets have a great day!

- JB

December 10, 2013 Watch List

Here come the Doom-and-Gloom headlines, as 2013 begins to wind down while the SPY closed at a record high once again yesterday:

“The Market Could Be Hitting A Dangerous Triple Top” : http://www.marketwatch.com/story/market-could-be-hitting-a-dangerous-triple-top-2013-12-10?dist=beforebell Oh No! Run to the bomb shelters!

“Twitter’s New High, A GDP Warning Sign, And The December Stall": http://blogs.marketwatch.com/need-to-know/2013/12/10/twitters-new-high-a-gdp-warning-sign-and-the-december-stall/ Oh no! More stall concerns!

Futures were solid green overnight but have faded this morning as Europe markets sold off. Gold spiked to near $1260 while the U.S. dollar remains right above $80. After quite a few years of hanging over the banks like the Sword of Damocles, the Volcker rule looks set to be put in place today: http://online.wsj.com/news/articles/SB10001424052702303560204579248584111312074?mod=WSJ_hps_LEFTTopStories

There are also talks that an agreement over the budget may happen shortly, which would alleviate some possible headwinds to start the year.

PVH reported earnings yesterday that beat expectations but issued weak guidance, like it tends to do. The stock is flat pre-market.

AZO reported some decent earnings this morning and has now posted 29 straight quarters of double-digit EPS growth, mostly a result of its share repurchase programs.

I'll be watching COST for earnings tomorrow and I think yesterday's pullback provides an opportunity to get some calls into tomorrow. JOY also reports tomorrow, and it looks interesting.

Lee will be doing his class this afternoon at 4:30PM EST. Here's the link: https://www.optionmillionaires.com/selling-short-term-premium-long-term-positions-leemalone-december-10th-2013-430pm/

UPB did a great morning video to start the day off right. You can check it out here: https://www.optionmillionaires.com/upb-morning-market-video-8/

Here are some of the analyst changes of note for today:

GM General Motors price target raised to $55 from $50 at RBC Capital
RBC Capital raised General Motors price target to $55 from $50 following the U.S. Treasury's news it sold its last remaining shares in the company. The firm believes the news removes a technical overhang and for the focus to shift to capital allocation potential. Shares are Outperform rated and a favorite name in the group
BIDU Baidu shares should be bought, says Pacific Crest
After meeting with Baidu, Pacific Crest believes the company's Q4 trends are stable, while the company can grow at the industry rate going forward. The firm keeps an Outperform rating on the shares
AAPL Carrier checks indicate Apple risk/reward neutral, says Pacific Crest
After conducting checks with carriers in the U.S. and Western Europe, Pacific Crest believes that unit sales of Apple's iPhone will increase by single digit percentage levels in Q4 and 2014. The firm has a target of $480-$585 on Apple
LULU lululemon investors should buy dips, says RW Baird
Baird is growing more cautious on lululemon ahead of Q3 results but believes long-term patient investors will be rewarded. The firm noted decelerating trends since management's last guidance call but sees easier comps ahead and the brand's growth runway remaining intact. Shares are Outperform rated with a $87 price target
YHOO Yahoo price target raised to $44 from $38 at RBC Capital
RBC Capital increased its price target on Yahoo as the firm has greater appreciation for the value of the company's 24% stake in China's Alibaba. RBC Capital's appreciation for Alibaba increased after the firm met with investors and companies in China, and Alibaba announced that it had $5.7B in total volume during China's Singles' Day, which is the equivalent of Cyber Monday, according to the firm. RBC Capital keeps an Outperform rating on Yahoo
TWTR Click through rates for many Twitter users could beat Facebook, says Bernstein
Noting that more than 50% of Twitter users rarely if ever tweet, Bernstein believes that these users may nevertheless be more likely to click on ads than Facebook (FB) users who browse through pictures and comments. The firm, however, keeps a Market Perform rating on Twitter
LL Lumber Liquidators sales trends stronger than expected, says Wedbush
Wedbush says Lumber Liquidators' sales trends are stronger than expected after the company updated its guidance. However, Webush says Lumber's margins "are a bit light." Nonetheless, after speaking to an Asian hardwood flooring import expert yesterday, the firm believes the company's gross margin outlook in 2014 is still strong. Wedbush also thinks Lumber's illegal sourcing issues are likely isolated. The firm has an Outperform rating on the stock with a $125 price target
PVH PVH Corp. premium multiple more than worthy, says Brean Capital
Brean Capital believes PVH Corp is more than worthy of its premium multiple though the firm has reduced its longer-term estimates. Brean Capital views the company's business model as one of the strongest and most reliable in the apparel industry. Shares remain Buy rated with a $150 price target
RHT Red Hat billings growth should reaccelerate, says Wells Fargo
Wells Fargo expects Red Hat's billings growth to reaccelerate into the company's Q4 ending in February. The firm thinks the stock is undervalued and keeps an Outperform rating on the share

I'll be looking to add to my WYNN position today as well as some lotto calls for COST earnings:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
COST CALL $125.00 Weekly 0.34 0.34
WYNN CALL $190.00 December 0.50 0.50

Let's have a great day!

-JB

December 9th, 2013 Watch List

Put it in the books. The longest weekly winning streak since 2004 was laid to rest as the SPY closed down .03% for the week. It was close, and if the market had closed at 3:53pm another winning week would have been a done deal. Unfortunately, such a win wasn't meant to be. Futures are up nicely, however, as global markets rallied on the US jobs numbers, and data from China also didn’t hurt matters.

Gold is up slightly, with the U.S. dollar a little weak this morning and nearing 80. I hope it holds that area and moves higher over the week.

GILD is up over 4% on some good news surrounding its anti-lymphoma drug. Additionally, AAPL is up slightly.

Bitcoin continues to trade in a volatile manner, crossing back over $900 this morning after being under $700 at certain points over the weekend. Expect it to continue to trade in a volatile range.

If you missed it, Max from the chatroom was on Bloomberg on Friday: https://www.optionmillionaires.com/max-ganik-taking-stock-pimm-fox/

Nice job on the interviews, and he likes AAPL, BAC and EBAY if you're wondering!

There isn't too much in the way of data out this week, so folks will continue to look towards next week's FOMC meeting and speculation on a quantitative easing taper. We also still have companies reporting earnings, with PVH this afternoon and AZO before the opening bell. I'm not in either, and will probably just watch.

Here's the link for the Week Ahead video: https://www.optionmillionaires.com/forum/showthread.php/728-The-Week-Ahead-with-UPB-and-JB-12-8-2013 It could take some time for it to process, so you may have to be a little patient.

As far as the analyst front, it seems to be a slow morning. Maybe they're waiting for 2014 already? At any rate, here are the analyst changes of note for today:

CELG Celgene data paves way for longer term use of Revlimid, says Bernstein
Bernstein believes that positive data for Celgene's Revlimid in multiple myeloma should increase the amount of time for which the drug is used in the U.S. and EU markets. The firm thinks that the data should enable the company's revenue in Europe to double in 3-5 years. It keeps an Outperform rating on the stock
BRCM Broadcom potential contract win a positve for 2014, says RW Baird
Baird believes Broadcom may have won the LTE sockets contract at Samsung which would reverse its significant share loss in 3G over the past few quarters. The firm also expects the company's quadcore 3G SoC will ramp in China next year giving the company a positive development for 2014. Shares are Outperform rated with a $35 price target
KRFT Kraft Foods upgraded at Morgan Stanley
As previously reported, Morgan Stanley upgraded Kraft Foods to Overweight from Equal Weight. The firm upgraded shares due to relative valuation, and restructuring efforts, and earnings visibility. Price target is $60
EA Electronic Arts selloff seems overdone, says Credit Suisse
After Electronic Arts' stock fell on news that its DICE unit would concentrate on fixing problems with its Battlefield 4 game, Credit Suisse believes the drop was overdone but maintains a Neutral rating "for now.
VLO Valero Energy upgraded to Buy from Hold at Deutsche Bank
Deutsche Bank upgraded Valero Energy and raised its price target for shares to $55 from $42 citing its bullish outlook on refiners given the over-supply of light sweet crude and the limitation of the crude export ban
DDD 3D Systems initiated with an Outperform at Pacific Crest
Target $96
DDD, XONE, VJET, SSYS 3D printing hype overdone, says at Nomura
Nomura believes the hype surrounding 3D printing is overdone given limited practical applications, uncertain growth potential, and limited mass production ability
MLNX Mellanox upgraded to Buy from Hold at Maxim
Maxim upgraded Mellanox with a $45 price target on expectations the company's growth will accelerate in the second half of 2014 due to product cycle catalysts

LeeMalone will be doing a webinar this Tuesday afternoon at 4:30PM EST on selling premium: https://www.optionmillionaires.com/selling-short-term-premium-long-term-positions-leemalone-december-10th-2013-430pm/

I'll be looking to grab some SSYS calls if it holds $115.50, as well as adding to my weekly SCTY position:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SSYS CALL $135.00 December 0.40 0.35
SCTY CALL $58.00 Weekly 0.60 0.50

Let's have a great start to the week!!

- JB

December 5th, 2013 Watch List

What a roller coaster thrill ride yesterday. Well, "roller coaster" at least for the current financial markets, as the SPY opened solidly in the red at $179, bounced all the way back up to $180.49, fell all the way back down to $178.43, ramped to $180 in the last hour and then ended down .01%, making it four red closes in a row. The VIX also soared early to near 16 only to fade the rest of the day, nearly finishing down for the day. Hard to believe if you were watching the markets, but to me it just means this “buy the dip’ environment we have been in should continue for now.

A China Mobile and AAPL deal was finally announced. Well, sort of; with the Wall Street Journal citing "unnamed sources." A legitimate deal could add at least 15% to AAPL iPhone sales. The news also has AAPL up 1.5% pre-market.

China also issued news on Bitcoin, barring banks from doing transaction in the cryptocurrency: http://www.reuters.com/article/2013/12/05/china-bitcoin-idUSL4N0JK1KZ20131205

Bitcoin droppped over 20% on the news, but has recouped some of the loss and now sits at $1095, down from its $1230 highs. I can see a silver lining to this news, and I think Bitcoin gets back over all-time highs before the weekend.

The 3Q revised GDP came out at 3.6% from 2.8, above the 3.2% expectations and actually a surprise. Weekly jobless claims also fell unexpectedly. That's more good data that should have taper talks picking up (I hate even typing the word "taper"). The U.S. dollar spiked and gold fell. Let's see if that continues at the open.

We have the November jobs numbers out tomorrow and that should be the market mover. With gold ramping yesterday for no other reason then it was beaten up, I'll look for some more positions on GLD and DUST (I closed them yesterday). SINA is also starting to look good here, and I think it heads back to $85 in short order.

I'm also still holding CF and SCTY calls, and both look good for today.

Here's the morning market video from UPB : https://www.optionmillionaires.com/morning-market-video-aapl-spy-gs-big-gdx-fcx/

Here are the analyst changes of note for this morning:

KSS Kohl's upgraded at BofA/Merrill
As previously reported, BofA/Merrill upgraded Kohl's to Buy from Neutral. The analyst believes Kohl's sales growth initiatives are poised to pay off now that inventory levels are manageable. The firm expects Q4 earnings to be the next catalyst and sees gross margin upside. Price target raised to $65 from $60
AZO AutoZone price target raised to $500 from $450 at Barclays
Barclays is confident AutoZone DIY comps improved in the quarter and continues to view shares as a deep value play given the buyback program. Shares are Overweight rated
BA Boeing likely to raise dividend 13%-15% this month, says Wells Fargo
Wells Fargo predicts that Boeing will increase its quarterly dividend by 13%-15% on December 9 or December 16, bringing the dividend to 55c-56c. The firm notes that the Bloomberg forecast for the Q4 dividend is 54c, and Wells keeps an Outperform rating on the stock
AAPL 2014 estimates for Apple should rise 5% on China Mobile deal, says Piper Jaffray
After The Wall Street Journal reported that Apple (AAPL) had signed a deal to sell the iPhone to China Mobile (CHL), Piper Jaffray predicts that the deal will cause Street analysts to raise their 2014 estimates for Apple by 5%. The firm does not believe that the China Mobile deal is baked into Apple's guidance or most Street estimates. It keeps an Overweight rating on Apple
ARO Aeropostale upgraded to Hold from Underweight at KeyBanc
KeyBanc upgraded Aeropostale to Hold due to moderating risks and valuation
OUTR Outerwall Q4 miss unlikely, says Piper Jaffray
Piper Jaffray believes that Outerwall's Q4 guidance is "relatively conservative," and that the company's Q4 results are unlikely to come in below the consensus estimate. The firm is increasingly confident in its Q4 estimates for the company, but adds that the stock's movement following the results will largely be driven by 2014 guidance. The firm keeps an Overweight rating on the shares
TIF Tiffany upgraded to Conviction Buy from Neutral at Goldman
Goldman upgraded Tiffany to Conviction Buy and named it a top idea into year-end and early 2014 based on sustained sales momentum, free cash flow expectations, and margin upside. The firm believes cost deflation from lower metal prices is underappreciated and pricing actions are benefiting comp sales and margins. Price target raised to $105 from $97
CELG Celgene upgraded to Buy from Neutral at UBS
UBS upgraded Celgene based on less perceived risk ahead of upcoming data at this weekends ASH meeting. The firm believes Revlimid will be "out of the woods" with a clean MM-020 result in terms of regulatory and clinical risk. Price target raised to $200 from $163
CF CF Industries upgraded to Neutral from Sell at Goldman
Goldman upgraded CF Industries citing the new capital allocation plan that includes buybacks and exploration. Price target raised to $232 from $184
CF CF Industries upgraded to Hold from Sell at BGC Financial
Price target raised to $245 from $185

Here are the strikes I'm also watching:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SINA CALL $83.00 weekly 0.33 0.24
GLD PUT $115.00 Next Week 0.32 0.32

Let's have a great day!

- JB

Morning Market Video: $AAPL $SPY $GS $BIG $GDX $FCX

Morning Market Video: $AAPL $SPY $GS $BIG $GDX $FCX

Citing two unnamed sources, the Wall Street Journal‘s Lorraine Luk and Daisuke Wakab wrote this evening that Apple (AAPL) has signed a deal with China Mobile (CHL), the world’s largest cellular operator, to officially carry the iPhone for the first time.

Asian stocks dropped overnight, dragging the benchmark index to a three-week low while Australian bonds declined and gold retreated. Indian equities rallied with the rupee amid state elections.

The MSCI Asia Pacific Index also dropped 0.4 percent by 3:12PM, Tokyo time. Standard & Poor’s 500 Index futures were little changed. Australia’s S&P/ASX 200 Index (AS51) tumbled 1.4 percent while 10-year yields climbed nine basis points. India’s S&P BSE Sensex advanced 1.7 percent as the rupee appreciated 0.7 percent. The yen climbed 0.2 percent. Gold fell 0.4 percent.