Monday, CTB and PCLN are set to report earnings.

CTB: Quarterly Earnings and estimates of $.39 and Quarterly Revenue of $1B. CTB has a new management team and provide a lot of aftermarket tires. Is a USW deal close?

PCLN: Quarterly Earnings and estimates of $5.02 and Quarterly Revenue of $967M. Is it time to lock in profits? PCLN might give negative forward guidance because of high gas prices. PCLN has been in a 5 point trading range all day.

UNUSUAL OPTIONS ACTION:

We have seen a Customer buy 16,900 IVN Mar 20 Calls for $.25. This is 7.6x usual trading volume. This Could be a closing trade because open interest is only 25,000.

A Customer bought 10,000 AA Mar 11 Calls for $.12.

Also, we have seen a customer buy 10,800 Jun 3.5 Puts for $1.05.

By Greg Zimny

Reaction: Was trading as high as $148.02 this morning. It quickly sold off to $140, but bounced from there.  CRM opened at $145.54 on 2.5x average daily volume.

Next Targets to Upside and Downside: CRM has been trading in a huge range between the July 2011 Highs of $160 and traded as low as $98 in January of 2012.

Estimates and Guidance are increasing for Salesforce .  Morgan Stanley predicts continued margin expansion.  Salesforce mentioned in the conference call that it won 100(+) 7 figure deals during the quarter.  Also, Nomura reiterated its “BUY” recommendation on CRM. Nomura expects CRM to exceed revenue and increase its guidance.  CRM’s 50 day moving average is around $113.82 and 200 day moving average is $128.20.  Salesforce mentioned in the conference call that it won 100+ (7 figure) deals during the quarter.  Also, Nomura reiterated its “BUY” recommendation on CRM. Nomura expects CRM to exceed revenue and higher guidance.

Earnings:

Jcp- Quarterly earnings estimates ending(Q4E) $ .67 and $5.5 Billion quarterly revenue estimates ending (Q4E). In my opinion, JCP could miss bad on earnings and its PPS could still rise due to low expectations. Also, I can see JCP beating earnings and selling off due to low guidance that’s already baked in the stock price.
Newmont Mining Corp- Quarterly earnings estimates ending QE4 of $1.26 and quarterly revenue estimates of $2.7 billion. Since Obama has been president it has been, “DRILL, DRILL, DRILL.” With US oil production up 9% and US oil leases higher year over year, it is hard to be short oil mining stocks with WTI Crude at $109.

American International Group (AIG) saw profit in their fourth quarter rise by 77%. This was due to a big tax benefit. Shares are trading up 4.5% to $29.00. This could lift the financial sector as a whole tomorrow. Deckers Outdoor Corp. (DECK) is trading down pretty heavily. The company beat EPS and Revenue estimates but is still getting smacked. Stock is currently down 6.85% to $82.41. Good old Crocs Inc. (CROX) is getting hammered as well; this shouldn’t be a surprise to anyone. Only in America can the most hideous pair of clogs sell. Stock down 9.85% to $18.25 as CROX issued poor Quarter 1 guidance. The SPY closed at $136.70 after putting in a low at exactly $135.50. The trend of morning sell offs and afternoon buy programs stills seems to be the status quo for 2012. The SPY is up 7.5% for the year so far.

Written by Cameron Patrick

@Cam_Patrick

CRM TRADE:

Trade: I bought the CRM March 120-140 Strangle and sold the Feb weekly 120-140 Strangle for $2.69 total. 
Profitable: I make money on this trade if CRM closes between $120-$140 and the March volatility does not get crushed too bad.
Break-even: I break-even on this trade if CRM Stangle Swap is worth $2.69.
Unprofitable: This trade is unprofitable if CRM Strangle Swap is worth less than $2.69.  This is a very hard trade to explain, but I basically want to the front month Strangle to be worthless and have March volatility not get crushed, so the March strangle is worth more than $2.69.

UPDATE 2.24.2012 I like to think of the earnings trades as one day bets, takes profits or losses then move on.  I sold 25% of this Calendar spread for $3.15, 25% at $3.50 and I have half still on.  I will take this trade off before the end of the day, but it looks like I will turn $2.69 into $3.50ish, good for 30% profit in one day.

DECK TRADE:

Trade: I sold the DECK March 92.5-95 Call Spread for $1.05. 
Profitable: I make money on this trade if DECK closes below $93.55 by March 16, 2012.
Break-even: I break-even on this trade if DECK closes at $93.55 by March 16, 2012.
Unprofitable: This trade is unprofitable if DECK closes above $93.55 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $2.50 minus the amount I sold it for $1.05 for a total of $1.45

UPDATE 2.24.2012 With DECK getting slammed, this spread that I sold for $1.05 is now worth $.15.  I put a $.05 bid in the “Order Book” to take the trade off and move on to the next one, another HUGE winner.

GPS TRADE:

Trade: I sold the GPS March 24-25 Call Spread and 22-21 Put Spread for $.48 total. 
Profitable: I make money on this trade if GPS Closes between $21.52-$24.48 by March 16, 2012.
Break-even: I break-even on this trade if GPS Closes at $21.52 or $24.48 by March 16, 2012.
Unprofitable: This trade is unprofitable if GPS Closes under $21.52 or above $24.48 by March 16, 2012.  The most I can lose on this trade is the amount this spread can be worth $1 minus the amount I sold it for $.48 for a total of $.52.

UPDATE 2.24.2012 With GPS selling off and staying above $22, this spread is decreasing in value, because premium and volatility gets crushed after earnings.  I put a $.30 bid in the “Order Book” and will be looking to take profits and move to the next trade.