Unusual Options Activity 3.1.2012

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The March to 1500 by Ben Hoben

However, with the unpleasantries out of the way, there seems to be nothing stopping this market and I don’t see that changing in the near future. I think we are on a march towards 1500.
I hate to call it a prediction rather it’s more of a gut feeling. The bears continue to give all the reasons why we are too high but none of that really seems to matter right now. The market just wants to go up.
It really wouldn’t surprise me to see the S&P take out its all time closing high of around 1565 that was set back in October of 2007. That’s not to say we don’t have some pullbacks along the way or maybe some consolidation periods but it’s beginning to look more and more like this is where we are heading.

If this seems like a stretch just realize that from the current 1370’s level it would only take about a 15% move to get us there. That kind of move isn’t unreasonable especially if the economic news continues to surprise.

There are a lot of things out there for us to be wary of including Iran, a still high unemployment rate, an election, and high food/energy prices. But at this moment in time you can find ways to discount all of these. Iran has been and always will be a saber rattler. Nothing is new here. Unemployment is high but it seems to be trending downwards. Oil is a concern but all we have to do is formulate a discussion on natural gas or a release from the SPR and we can see oil come down. And as far as the election goes, does it really matter which of these clowns is in charge? We will most likely have a gridlocked government and another four years of more of the same.

As long as all the economic data points continue to remain mostly positive, the general consensus will continue to be that based on these numbers the market is undervalued and at the worst fairly valued. This makes taking out 1500 a reality and taking out the all time highs well within reach.

I’ve been cautious and have held at least 30% in cash during this rally. I will continue to do so but I’m feeling more comfortable owning stocks through all of this. I definitely think there are darker days ahead for the markets and the economy, just not right now.

Cam at the Close 3.1.12

Other names such as Melco-Crown Entertainment (MPEL) and MGM Resorts (MGM) have been showing strength as well. I blew out of my position at $122.94 and booked 2.9 points. If WYNN can break through $124, it looks like it will be a straight shot to $128. One thing that is important to note is that manufacturing in the US declined. The numbers showed that manufacturing slid from 52.4 to 54.1 in January. Higher crude oil prices could have something to do with this as consumers could be cutting back from buying goods and services. The SPY sold off on this news, but quickly recovered. When markets go higher on bad news, it is very important to take note. Monster Worldwide had quite the epic run this morning. Andrew pointed this out earlier when a buyer came in and bought 2770 March 8 calls for .10. The stock exploded from a morning gap of $7 all the way to $8.58. $8.58 was a clear short term blow of top as the stock failed to break through $8.60 on the heaviest volume of the day. The move to the high $8.50’s also filled the gap made on 1/24/12 and 1/25/12. Spot Crude rose higher day due to continued speculation over turmoil in Europe. Spot crude closed up 2% to $109.23.


I had my order lined up to short MWW at $8.57 with a stop at $8.60. I just wanted to nibble because I was aware that the stock could have seen much higher prices if it took out $8.60. But I didn’t pull the trigger or chase it when it was clear that sellers were in the name. My first target to cover was $7.90 which was .10 away from the initial second intraday break out of $7.80. You win some and you lose some, but transparency is the key. The only stock I traded today was WYNN and now I want to throw my computer out the window sitting in computer programming class. Have a good afternoon everyone. Go Ducks.

The Big Boys
AAPL +2.06 (0.36%)
CMG +4.43 (1.10%)
GOOG +4.15 (0.67%)
AMZN +0.43 (0.23%)
CVX +0.55 (0.51%)
GE +0.07 (0.29%)
IBM +0.80 (0.42%)
MSFT +0.55 (1.72%)
WMT -0.26 (-0.44%)
XOM +0.31 (0.34%)

Pretty quiet day for leaders over $200 billion in market cap except for Microsoft. An analyst from Nomura Equity Research reiterated a buy recommendation with a $37 price target. Microsoft under $25 is a no brainer if the shares every trade back there.

Written by Cameron Patrick


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Movers and Shakers (MWW) – UP 11% to $7.63

Levels to Watch: 50DMA-$7.68, 100 DMA -7.93$, 200 DMA- $9.60.

Support 1- $6.75

Chart Glance: Looks like MWW formed a double bottom around $6.6-$6.7 level. MWW finally caught a bid on a large volume spike today. It is currently trading right below a primary resistance zone if it clears $8.45 level, then nothing but clear skies ahead IMO.

Jan 2014 Calls are raging today in anticipation of more momentum to the upside to come. Perhaps the bad news is behind MWW? Could this be the double bottom bounce we have been waiting for? Is MWW undervalued? Shares jump today after CEO states, “pursuing other strategic alternatives.” Facebook’s IPO will definitely impact MWW PPS and MWW’s “business model.” It is hard for long term investors to invest in MWW because of the lack of continuous revenue & earning growth. Finally, MWW is presenting in the Robert W Baird today at 9am.

By Greg Zimny

Morning Rage 3.1.2012

Will Apple continue to decouple from broader market weakness? I sure wouldn’t bet against APPLE!!!

Earnings Today

JRCC- Quarterly Earnings and Estimates (Q4E)- $.04 Quarterly Revenue Estimates (Q4E)- $327 M The outstanding short interest in JRCC has amazingly exceeded 14 million shares. Analysts believe revenue will double from a year earlier to $325 million. NOT one coal stock reported good numbers this quarter. For example, (PCX,ACI,ANR) are all near there 52 week lows after reporting earnings.

Wendy’s- Quarterly Earnings and Estimates (Q1E)- $.02 Quarterly Revenue(Q1E)- $609M Currently, Wendy’s is trading well above the 50 DMA. The May 2012 $5 Calls are seeing huge Call volume. We will have to wait and listen to the CC and find out how Wendy’s is doing with its interest expense from its short term 500M dollar debt.

By Greg Zimny

Movers and Shakers (SODA) Down $7.27, (15.5%) to $40.03

Levels to Watch: 50DMA-$38.33, 100 DMA – $35.73, 200 DMA- $44.33.

Support 1-$38.94

Support 2-$35.73

Chart Glance: Another choppy chart, looks like soda got ahead of itself before earnings. Bearish gap down on strong selling volume. Looks to be support between $35-$38 range. Chart suggests more choppy and range bound action to come.

Growth in Soda sales expected in US were higher then estimates. Soda opened 200 new stores in Brazil and is expanding heavily into the Japanese market. CEO stated, “that Q1 looks very STRONG at first glance.” In my opinion, SODA is way oversold and this might be a huge buying opportunity. Soda didn’t miss earnings, they beat, just not as high as analysts estimates. Finally, in the CC, the CEO states, “we are trying to expand into restaurant/commercial divisions.”

By Greg Zimny