American Eagle- reports earnings after the bell. Options imply about a 9% move in either direction. American Eagle Q4 inventory is still high around +26%. However, a much better improvement from +42% in Q3 2011. Wall Street analysts expect the teen retailer to earn 38 cents a share on revenue of $809 million. In January 2012, ARO reiterated its fourth-quarter earnings outlook to be between 35-38 cents. Personally, I am staying away from most retailers. Their charts look topped out for the most part. Finally, Discounting the unwanted/unused winter merchandise will probably squeeze all retailers gross margins.
Bke- The average analyst estimate is earnings of $1.14 per share. Estimates range from $1.11 to $1.18. Weekly support is at $42.90, which was last week’s low. Buckle’s February same store sales up 14.8% vs 5.8% estimates. For the month of February, total revenue increased 17.4% to $86.7 million from $73.9 million in the same month last year. Buckle’s closing price yesterday was $47.88. Buckle’s 52 week range is $33.97-$47.88. In my opinion, Buckle is going to really have to to blow out earnings and raise guidance for this stock to make fresh 52 week highs today.
As the market was getting pummeled yesterday, DECK still remained above a key support level at $75. This was not the case today and investors punished DECK. DECK fell 10% after cracking $75 and traded 8M shares. It traded 5x normal volume today. I would wait until DECK sees some consolidation and I would watch for buyers to step in before trying to bottom pick this name on the long side. The SPY saw a nice gap up around 8am PCT. It shot from $135.17 to $135.60 in a hurry. Corrections in an uptrend are extremely healthy and with the action seen today, it is clear that the uptrend is still very much intact.
Written by Cameron Patrick
A Live blog from Apple’s iPad 3 media event (starts at 1PM Eastern) can be seen on various websites. Third-Generation iPad parts, suggest just minor changes to the new Apple 3 iPad. However, rumors are that the new iPad 3 has “never before seen touch technology.” Fake Retina Display pictures are all over the internet for the third gen iPad. Also, another rumor is that the iPad3 RAM will be 1GB (double the amount).
The DAX is trading lower all morning because of weaker than expected January factory orders. Crude/ Brent Oil are catching a bid this morning as there was a decrease in US gasoline inventories data and the USD has been under heavy selling pressure. It amazes me the rally the EUR/USD had in January from the (lows of $1.26). The reason I say that is because of the horrible data out of German non-Eurozone factory orders last night.
Today, markets are awaiting the all important US ADP employment revisions. Also, DOE oil inventory number will be announced at 1015 am.
By Greg Zimny
Unprofitable: This trade is unprofitable if GDXJ closes under $24.60 by April 20, 2012. The most this spread can be worth is $1 minus the $.40 I sold it for, so my maximum loss is $.60. I am risking $60 per 1 lot to make $40 on this spread.
Reason I Like This Trade: When GDXJ was trading $25.58, I saw someone sells 4250 GDXJ April 26 Puts for $1.50. A also saw someone sell 2500 GDXJ March 28 Puts for $2.50 and then buy 2000 GDXJ March 27.63 Calls for $1. This is very bullish activity, so I wanted to get LONG the GDXJ.
UPDATE 3.9.2012 This is very similar to my DNDN trade, I am not taking profits, even though this trade is working out very well so far. I continue to play to the upside in many stocks, but always defining my risk vs reward.
UPDATE 3.12.2012 With GDXJ with overlapping bars, I think that GDXJ has limited downside, so I will leave this Put Spread on for more potential profit.
UPDATE 3.15.2012 With time on my side, this trade has decreased in value even though GDXJ is the exact same level than where I sold the Put Spread, so I will leave this trade on for more upside potential.
UPDATE 3.22.2012 With Gold, Silver, and Oil all gettuing crushed, the Put Spread is now worth $.55, but I will leave this trade on as I think there will be Gold buyers coming into the market very soon.
UPDATE 4.9.2012 Another stock I am glad that I sold Put Spreads instead of Puts. This spread will mostly expire worth $1, and the train moves on. Will be sitting on the sidelines on the commodity based Longs for awhile.
UPDATE 4.23.2012 I saved myself some money I worked out of the Spread when it was worth $.85, moving on to the next trade.
The DJIA is trading at two week lows around 12,750 (DJIA 12,678 is both uptrend support from OCT lows and the 50DMA.) Kraft foods is the only DOW stock trading in the green today. ES futures are down 21 pts or 1.5% at 1343.5. Also, EUR/USD is trading at session lows around the 1.31 level. The Long End of the yield curve is flattening out which means risk ahead? Are we still pricing in QE3? Crude Oil is trading at session lows around $105 as the Iran threat is disappearing. Defense Secretary Panetta states, “the US will take military action to prevent Iran from using Nuclear Weapons.” S&P VIX SOARS and is up $2.84 or $20.84 level.
“iPad 3” media event to be held in San Francisco on Mar 7th. iPad hype consists of 4G LTE that will boost video watching capability, high resolution retina display screen, and a rumor that iPad3 will have SIRI support. Total iPad shipments are expected to grow by roughly 20 million units in 2012. Apple is trading way off of its $516 daily lows at the $529 level.
UNUSUAL OPTION ACTIVITY:
A customer sold 37,624 XOP April 50 Puts for .81; this could be against a long stock position.
By Greg Zimny
The third-generation iPad is expected to have a screen resolution of 2,048-by-1,536 pixels, which would be a pixel density double that of the current iPad 2. It’s also a resolution greater than a 1080p high-definition television set.
- Though the current iPad 2 Smart Cover protects only the glass touchscreen of the device, Apple is rumored to be working on a new case that will also feature a rear shell.
- Total iPad shipments are expected to grow by nearly 20 million units in 2012, with Apple’s third-generation iPad expected to lead the way with 40 million total units
- (CAMERA) – I’ve heard some rumors saying that it will feature the same 8MP camera sensor as the iPhone 4S. This would make for an amazing camera on the tablet.
- (A5X Processor-the iPad 3). The A5X would likely be a dual-core chip that is an upgrade from the A5, but not quite the boost many of us expected in the form of an A6 processor.
- (Ipad3 SIRI SUPPORT)- This is possible, but I’m not as willing to bet on it as I am LTE and a Retina display. It makes sense given that Apple will likely want Siri on all their devices in the future as they continue to create a uniform environment across their operating systems
- (iPad mini in future)?? We’ve heard time and time again that Apple wants to release a 7-inch tablet
Levels to Watch: Key levels to watch $4.7; Sold 14,000 Mar 5 Puts for $.30. Also, a key level to watch is $4.35; Sold the May 5 Puts for $.65.
Chart Glance: Chart action looks like a strong gap down into no man’s land. In the ONTY Conference Call, a female representative responding to all of the questions confirmed that the Stimuvax trial will continue. Stimuvax results are expected late 2012. Usually, when the results are “later than expected,” 99% of the time, it is not a good sign. Investors, Sell first and ask questions later. ONTY CEO is scheduled to present at the 2012 Cowen Conference. Finaly, ONTY had a huge short interest going into Earnings today. I wonder how many of those shorts covered?
Vol is now down 132 pts.
By Greg Zimny
After the Bell:
P -quarterly earnings and estimates (Q4E)- $.02 Quarterly Revenue Estimates (Q4E)-75M. 52 week range of $9.15-$26. Stifel Nicolaus & Co.boosted its rating to a “BUY” from a “HOLD” with a price target of $18. Many analysts believe revenue will increase 50% annually over the next five years. Pandora is not profitable at the moment so there is no PE. However, analysts believe Pandora’s earnings will finally be profitable this year.
By Greg Zimny