McDonald's Not Lovin' It Today

1:10pm (EST)

The market is treading water today as all three major indexes are in the red. The Dow is down 90 points to 10,300 while the Nasdaq is lower by 8 to 2,181. The S&P 500 is back below 1,100 as is off by 8 to 1,095.

One of the stocks weighing on the Dow is McDonald’s (MCD, $60.72, down $1.21). The stock is down about 2% but its impact on the Dow is 9 points or 10% of the decline. The company said monthly sales fell (1.9%) for the second straight month as other establishments pushed lower prices to attract customers. Weakness overseas also pressured sales that analysts said were worse than expected throughout the world.

We wouldn’t step in here but if shares fall to $58 we will take another look…

Another stock taking it on the chin is Goldman Sachs (GS, $162.40, down $1.45). We were hoping to get into this one once it broke below $165 but we were a little late. Yesterday, the stock opened at $166 and hit a high of $167 but we took our eyes off of it.

Last Wednesday in our Members Area we had this to say. Quotes are from December 2nd:

“We are also watching Goldman Sachs (GS, $165.82, down $1.81) closely but we feel a little uneasy shorting such a strong company. However, we are watching the $165 level closely and a break below this level could lead to further weakness.

We have been looking at the December 160 puts (GPYXL, $1.92, up $0.33) and the January 150 puts (GPYMJ, $2.50, up $0.14) all morning but feel like a deer in headlights. If the stock breaks below $165 we will add the January 150 puts.” (END)

The December 160’s are currently trading at $2.30, up $0.45, while the January 150 puts are at $2.80, up $0.35. We listed this trade outside of the Members Area today because we did not get good entry points which is why we did not sent out a Newsflash.

We aren’t sure if Goldman continues lower or bounces back but we felt there were better opportunities out there. Having said that, we have two trades that have done pretty well today and we cover those in the Members Area. Current subscribers, check for the updates…

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McDonald's Not Lovin' It Today

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