3:45pm (EST)

1.  Market Summary

2.  Momentum Stocks Still Worth Watching Part 2     

3.  Las Vegas Sands Continues Surge

4.  Earnings

5.  Week Ahead/ Updates (Green Mountain Coffee Roasters, Video)    

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1. Market Summary

We knew last week there was a good chance of the bulls breaking through resistance and they did it in style.  Despite some rough waters, which included earnings, the Fed, and the midterm elections, the market finally soared past resistance last Thursday and ended the week on a high note.

The Dow finished Friday on a 6-session win streak by adding 9 points to settle at 11,444.  The index closed above our 11,200 target on Wednesday and added over 200 points on Thursday as the blue-chips powered their way past their previous 52-week high of 11,258.  This resistance level had also been tested intra-day before the breakout several times and we said to watch for Dow 11,500-11,600 on a break above these levels.  The high was 11,451 on Friday and if we can get into the next zone, Dow 12,000 could be a reality.  Support is now at the previous highs with 11,000 serving as strong support.  For the week, the Dow was up 325 points, or 2.9%.

The S&P 500 gained 5 points to finish the week at 1,225 and easily took out our two targets of 1,200 and 1,220 on the way up.  The index closed just under 1,198 on Wednesday which gave us a clue the breakout was imminent.  We outlined 1,250 as possible short-term resistance if we cleared these hurdles but we still see 1,300 coming into play.  The S&P tacked on 42 points, or 3.6%, for the week with support now being 1,200 and then 1,170-1,175. 

Believe it or not, the Nasdaq actually lagged its counterparts and finished flat on Friday (up 2 points) at 2,578.  However, Tech was the first index to close above our “bullish” targets for the market by clearing the 2,500 level in late October.  We factored in fluff and said the Nasdaq could run to 2,600-2,700 on a close above resistance and it hit 2,587 intraday on Friday.  The index advanced 72 points, or 2.9%, for the week and support is at 2,500 and then 2,450.  We also believe Nasdaq 3K is going to come into play down the road.

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2.  Momentum Stocks Still Worth Watching Part 2     

Since August, we have been highlighting certain companies with more in-depth coverage on what they do, but more importantly, we look at the stock and its prospects going forward as we continue to expand coverage our Weekly Wrap.  These stocks are also on Watch List and our goal is to find a good option trade regardless if the stock is going up or down by using call and put options.

Even though we may not recommend a specific trade at the time when we profile a stock, our coverage of these individual companies are a great place to start your research as you begin to build your own trading strategies.  We love to recommend our own trades but we also want you to be a better options trader. 

We have had great success with our new options trading manual, How to Trade Options on Momentum Stocks and our Momentums Stocks Watch List which details dozens of sectors and over 600 companies.  For those that have purchased the trading manual, think of the coverage we are giving these stocks as running addendums to the Watch List.

Last week, we gave you updates on Baidu (BIDU, $108.80, down $1.26), Best Buy (BBY, $44.75, up $1.07), SPDR Gold Shares (GLD, $136.38, up $0.35) and Freeport McMoRan (FCX, $104.85, up $0.95) which jumped $10 and has broke triple-digits since.  We also brought you new coverage of the iShares Silver Trust (SLV, $24.17, up $0.17) and Pan American Silver (PAAS, $31.92, up $0.58) as a way to play silver and both made nice moves.  SLV started Monday at $24 while PAAS was just under $32.

Today, we wanted to do a few more quick reviews on the other companies we have highlighted over the past 3 months and where they are.

In late August, we profiled Mosaic (MOS, $70.78, down $0.26) when the stock was hovering near $58 and said “…we believe shares of Mosaic have more room to run
over the next few months and could easily break above $70 on fundamentals

Although shares have reached our near-term price target, we believe this stock is not done going higher.  We have talked endlessly about how agricultural commodity prices have gone through the roof and with the Fed printing money to devalue the dollar, we feel this trend is even stronger than it was two months ago.  Any pullback is a reason to get long this stock as we now anticipate a run to par ($100) over the next 6-12 months.

In early September, we talked about the prospects for the Chicago Board Options Exchange (CBOE, $24.65, up $0.64) when the stock was at $22.  We were looking for more volume in the options markets in September and October and while that didn’t happen then, it is starting to happen now.  We have seen volume pick up on Wall Street in late October and early November and shares have started to move.  CBOE became a publicly-traded company in June and the stock appears headed to $26 where it faces resistance.  However, a break above this level clears the way for a run at $30.

And finally, in early October we highlighted Juniper Networks (JNPR, $34.39, up $0.55) which was trading near $30.  At the time, the 52-week high was $32-ish and we were looking for a breakout.  The company reported earnings a couple of weeks ago and said sales were 23% higher year-over-year with revenue just north of $1 billion.  We continue to like this company and shares are up 7%-8% since we profiled them but we currently have an option trade on Juniper that is up nearly 50%.

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3.  Las Vegas Sands Continues Surge   

Las Vegas Sands (LVS, $51.98, down $0.03) is a casino company that owns and operates casinos in Las Vegas (the Venetian, the Palazzo, and the Sands Expo Center), Macao (Sands Macao, Venetian Macao, and the Four Seasons Macao), Singapore (Marina Bay Sands), and Bethlehem, Pennsylvania (Sands Bethlehem).

While the company may have Vegas in its name, their story is all about gaming in Macao, where they derive 80% of their profits.  A gaming table in Macao does almost ten times the business the same table does in Vegas and all of their recent growth has been towards increasing gaming revenues in the Far East.  The company recently opened their Singapore resort which has been doing great and it showed in their earnings.

Last week, LVS reported third-quarter earnings of $0.34 a share while analysts were looking for $0.23 a share.  Revenue came in up 67% to $1.9 billion versus expectations for $1.8 billion.  The stock jumped over 8% the next day from $41.06 to $44.37, and as you can see, the momentum has been strong since.

Macao revenues were up 28% as their new Singapore property contributed $486 million to the top line.  Vegas is starting to show some signs of life with a 27% increase in revenues.  Part of the Sin City gain was from increased group bookings, which bodes well going forward, but part was due to a string of really good luck for the casino as their win percentage was up 5%.  REVPAR (which is a metric for Revenue Per Available Room and something we cover in our Momentum Stocks Watch List) was up in both Vegas and Macao.  The city of Las Vegas appears to have bottomed at the very least, and gaming continues unabated in Macao and Singapore which is a good sign.

We like this company going forward for a lot of reasons but the main one is the massive potential for Chinese gaming.  However, after the sky-high ride from a 52-week low of just under $15, the stock appears to be fairly valued for the moment.  

The company is expected to earn $1.60 a share in 2011 which gives the stock a forward P/E of 32, a little on the high side.  More importantly, shares hit a 52-week high of $55.47 intraday on Friday, then reversed down to finish below Thursday’s close of $52.01 on almost 3x average volume.  Over 90 million shares traded hands.

Longer-term, we view any sort of pullback as maybe a good opportunity to go long but we would be leery until it comes back down to fill in some gaps. 

The company has repaired the balance sheet and has kept their great properties in Macao during tough economic times and Singapore looks like the next big growth driver for this company.  If you add a Las Vegas comeback into the story then shares might not be undervalued but we would like to see more proof.

A break back to the low $40’s might be worth a second look if we get the opportunity but remember, the stock was near $140 in 2007 so the momentum is there if Friday’s pullback was just a breather instead of a reversal.

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4.  Earnings    

Monday:  AgFeed Industries (FEED, $3.17, up $0.10), Gammon Gold (GRS, $7.11, up $0.07), Healthcare Realty Trust (HR, $24.94, up $0.19), Lions Gate Entertainment(LGF, $7.34, down $0.16), Rackspace Hosting (RAX, $26.46, up $0.33) and Wave Systems (WAVX, $2.42, down $0.02). 

Tuesday:  A123 Systems (AONE, $9.96, up $0.68), Dean Foods (DF, $10.55, down $0.08), Energy Transfer Partners (ETP, $51.45, up $0.26), Fossil (FOSL, $62.22, up $0.97), HHGregg (HGG, $23.48, up $0.75), JA Solar Holdings (JASO, $9.43, up $0.20), NetEase.com (NTES, $41.09, up $1.09), Playboy Enterprises (PLA, $4.91, down $0.04), Starwood Property Trust (STWD, $20.78, up $0.02) and Tyco International (TYC, $38.89, down $0.48). 

Wednesday:  Cisco Systems (CSCO, $24.26, up $0.05), Kelly Services (KELYA, $15.87, down $0.01), Polo Ralph Lauren (RL, $99.62, up $0.29), Rosetta Stone (RST, $23.94, down $0.52), Sara Lee (SLE, $14.71, down $0.09) and Vivus (VVUS, $7.12, up $0.03),    

Thursday:  Caribou Coffee (CBOU, $11.44, up $0.33), eLong (LONG, $20.15, up $1.29), Flowers Foods (FLO, $25.63, down $0.07), Kohls (KSS, $53.30, up $1.38), Siemens AG (SI, $118.03, down $0.60), SunPower (SPWRA, $14.32, up $0.21) and Walt Disney (DIS, $37.20, up $0.17).

Friday:  D.R. Horton (DHI, $11.98, up $0.21), Dick’s Sporting Goods (DKS, $29.75, up $0.05) and JCPenney (JCP, $32.59, up $0.27).

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5.  Week Ahead/ Updates (Green Mountain Coffee Roasters, Video)  

The economic calendar is a little light this week following the heavy dose compared to last.  The government will report on September wholesale inventories on Tuesday while the trade deficit for September will be released on Wednesday.  Friday brings the Reuters/University of Michigan consumer sentiment index which will issue its preliminary reading for November.

As far as other news, last Friday we did a short write-up on SodaStream International (SODA, $31.88, up $1.88), a recent initial public offering (IPO), that we compared to Green Mountain Coffee Roasters (GMCR, $34.63, up $0.75).  We said one advantage the company might have is the fact they sell they own machines but we were reminded by the great people at Green Mountain that they do sell the machines for their K-cups.

Green Mountain owns Keurig and was their first roaster partner making K-Cups for the Keurig system.  Then, in 2006, the company purchased Keurig.

We apologize for the oversight and wanted to remind you that the company is currently offering a chance to win K-cups for life at:


You also have a chance to win a Keurig Brewer every month and Green Mountain gives a box of K-cups away every day.  No, we are not getting paid to say all of this but we wouldn’t mind a box of K-cups!  Since our research was flawed, we owed them some love…

We will also be doing a video tonight for those of you who have purchased our option trading course which should be ready by Monday morning.  We are going to be looking at some possible earnings trades and we will review Boston Beer Company’s (SAM, $81.96, up $8.29) fantastic quarter.  We have been bringing you coverage of this story since shares were under $40.

We will also be showing you a possible trade that we will be releasing Monday morning and why we think there is a chance for a quick double, or a 100% return, from current levels.  Remember, as option traders, we only need a stock to move 5% to get a 100% on the right option.

Special Note:  For those who are interested in our option trading manual, How to Trade Options on Momentum Stocks, but may have more questions, call or email us.  We will also be happy to work out a payment plan if that is what you prefer but the course is already one of the lowest priced in the industry and widely becoming a big hit on the internet.  To view the videos, you must purchase the option trading manual.

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We will be back Monday morning at 9am (EST) with all of the current trade updates and a fresh outlook.