1:20pm (EST)
The zombies have announced a deal has been to end the government shutdown and to avoid a default on America’s debt that could get passed as early as today. We will believe it when we see it but it does appear cooler heads have prevailed. The devil will be in the details on how far the zombies kick the can down the road but for now, we can worry less about DC and more about the market.
Earnings will be the main focus once stability returns and we spent a ton of time over the weekend searching for possible option trades to play the big moves some stocks will be making. While there were a few we liked, we have stayed on the sidelines as there have been other, safer momentum stocks to play. We won’t rule out that we won’t swing the bat on an earnings trade or two this week but we missed our favorite one as Mattel (MAT, $42.68, up $1.13) reported their numbers today and we needed to be in yesterday.
We had a feeling Barbie sales would rebound but many analysts expected the company to miss estimates. Wrong. Mattel beat by 9 cents after earning $1.21 a share versus a forecast of $1.12. Revenue also came in higher at $2.21 billion versus expectations for $2,17 billion.
Shares closed Tuesday’s session at $41.55 and opened this morning at $43.55. They have reached a high of $43.74 and the November 43 calls (MAT131116C00043000, $1.15, up $0.40) would have been a great way to play the pop. These options are up over 50% after closing at 75 cents yesterday but they have traded to a high of $1.40.
We mentioned we will be in perfect position come next week to deploy a bevy of new trades as we have been trading light over the past few weeks due to the trading range the indexes have been in. However, the half-dozen positions we do have open have been sizzling. We have 2 current positions that are up over 200% and we have another call option trade that has reached triple-digits in less than 24 hours again.
As we head to press, the Dow is up 172 points to 15,340 while the S&P 500 is higher by 19 points to 1,717. The Nasdaq is higher by 40 points to 3,833.
Subscribers, check the Members Area for the updates and stay locked-and-loaded into the closing bell in case we do pull the trigger on a new trade or ring the register and take some profits off the table in our current ones.