12:45pm (EST)
We will skip the zombie rhetoric as we would rather focus on earnings and profits. The knuckleheads in DC are taking turns at the podium and are once again bickering as a deal is not likely to come until Thursday – if one at all.
We listed a ton of possible earnings trades this week but the choppiness is making it hard to get a good read on how the market and Wall Street are going to grade their results. Domino’s Pizza (DPZ, $66.43, down $2.42) reported their numbers before the bell and missed by a penny but revenue came in better-than-expected. We mentioned shares were near 52-week highs but we didn’t trust the tape enough to buy call options.
We have fielded emails on the Financial stocks but while we like them for the longer-term, we just don’t trust them right now. We like Intel (INTC, $23.25, down $0.02) as a possible bullish play and the November 24 calls (INTC131116C00024000, $0.40, flat) are a cheap way to play a 5%-7% move in the stock that would double these options but we will likely sit on the sidelines. Analysts are bearish on Intel with some predicting a miss but they could surprise.
Yahoo (YHOO, $33.75, down $0.25) also reports after the close and we listed the November 36 calls (YHOO131116C00036000, $0.85, down $0.05) as a possible bullish play but shares have triggered our high end price targets for the year since we have been trading it in the $20’s this year. We are still bullish on the stock but with shares near our year-end target, we are a little hesitant to go long given the recent volatility.
We do like a few other earnings trades for this week and next but we have been saying this is becoming a stock picker’s market and one we thrive in. We mentioned how Friday could be one of the most important trading days of the year and as we will be in PERFECT shape to play the market’s next major move as our portfolio will be light.
It is rare we tell you to get the wheelbarrows out but when we do it usually means we are on fire. We have had a number of big trades during the recent wild price swings and if are instincts are right, there will be a ton of cash to be made from now until the rest of the year. We have been saying since late August this is one of the BEST times to trade options due to the volatility so let’s continue to ride the wave.
As we head to press, the Dow is down 45 points to 15,255 while the S&P is lower by 4 points to 1,706. The Nasdaq is off 6 points to 3,809.
We have a lot to cover including another NEW TRADE!!!
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