9:10am (EST)
The market continued its see-saw ways as the bulls won yesterday’s battle. We talked about the sharp reversal in our afternoon update and those gains pretty much held as the Dow finished with a 106 point win and settled at 10,144.19.
Caterpillar (CAT, $56.15, up $3.00) and Alcoa (AA, $13.58, up $0.42) led the Dow’s surge as they gained 6% and 3%, respectively. CAT has been volatile of late and seems to trading in a 10% range. By that we mean it is becoming a great trading stock and the options are providing some humongous returns if you get the play right.
The CAT February 55 calls (CAT100220C00055000, $1.85, up $1.35) gained a whopping 270% yesterday and opened at 50 cents. Obviously, we weren’t zoomed in on that trade but these are the type of explosive moves we are trying to capture during the last two weeks before the February options expire.
The S&P 500 added 10 points and closed at 1,078 while the Nasdaq actually lead the bulls charge with a 30 point move to finish at 2,177. This was a big deal as the Nasdaq had been lacking the recent market advances. Another important note is that the index closed above its 10-day moving average for the first time in nearly a month.
We continue to talk about volatility and this week is proof in the pudding that theme is here to say. In fact, the volatility feels like it did back in 2008 when we were getting huge market swings. Fundamental plays aren’t working too well in this market as China, Greece and Washington continue to dominate the headlines. They aren’t lions, tigers or bears (oh my!) but the political and economic news will continue to skew fundamentals.
One stock that will likely feel the heat this morning is Buffalo Wild Wings (BWLD, $48.40, up $0.79). Although the company reported a 20% jump in revenue ($145 million), profits came light at $8.3 million or $0.46 a share, versus year-ago results of $7.7 million or $0.43 a share. Wall Street was expecting $0.51 a share on revenue of $149 million.
Before we go, we have some GREAT news to tell you this morning. The Momentum Options Trading manual is finally ready! We are putting the finishing touches on the design and we are shooting for a beginning of March have-ready date.
We are so excited to bring you this valuable information as it will show you exactly how to find trade setups. If you are new to options trading the course alone will save you thousands of hours on learning the in-and-outs of the options market. We make it so easy for you to learn how to keep track of hundreds of stocks and the endless way to use options to your advantage.
We will have more details in the afternoon update but we wanted to get the word out.
As we head to press, Dow futures are down 57 points while the S&P futures are lower by 7. Nasdaq futures are lower by 12. Current subscribers, check the members Area for the updates.
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