Sunday, July 15, 2018

Stocks Turn Pensive Ahead of Big Earnings Week (Weekend Newsletter)

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Weekend Newsletter for
July 15, 2018


Table Of Contents

1) MARKET SUMMARY from THE DAILY

2) STOCK SPLIT REPORT

3) IH ALERTS

4) SUCCESS TRADING GROUP

5) COVERED CALL SERVICE

      

Jon Johnson
1) MARKET SUMMARY
         > >From "The Daily" by Jon Johnson at InvestmentHouse.com


Stocks turn a bit pensive ahead of a big earnings week.

- NFLX downgrade bandwagon getting pretty full, helping spook overall bids.
- President says US/UK strike an 'ambitious' trade deal.
- President calls EU a foe economically, along with Russia, China.
- NASDAQ, RUTX, SP400 testing back from the highs. How they react off this test is obviously key.
- Don't forget SP500, DJ30: they are getting some money and will it be at the detriment of other indices?


Market Summary (continued)
After good breakouts Thursday with NASDAQ and NASDAQ moving to new highs and SP500 clearing important resistance, stocks were pensive Friday. NFLX was downgraded on valuation more than once just ahead of its Monday earnings because . . . it could actually miss expectations. Wow, a stock could actually miss earnings expectations? Duh. Yet, they act as if it is an impossibility.

Of course it is not. Just ask the banks announcing on Friday. C missed the top line, WFC missed the top and bottom line. Looks as if they are going to have to get over getting free money from the Fed and then buying bonds for a guaranteed return. WFC might actually have to start making loans again and not just come on CNBC and falsely claim the banks are open for business to lend to small businesses. That was the biggest farce ever. You would go to WFC and you would be directed to a SBA loan; no way WFC was touching that -- it had risk attached to it. Now, with the Fed not so generous with the free money, banks have to make money the old fashioned way, e.g. loans, jacking up fees, etc.

Anyway, NFLX was hit hard, falling from the new closing high hit early week. NFLX' action helped stymie NASDAQ's upside move, but didn't kill it.

Instead, a week of heavy earnings for NASDAQ is ahead, and it very much looked as if the downgrades and bank earnings misses had bids pulling back Friday after some good moves higher earlier week.

Not across the board of course. AMZN continued its new move while FB and GOOG added more upside. Overall, however, Friday saw the action cool as the indices turned in mixed sessions.

Read "The Daily" Entire Weekend Summary
Watch Market Overview Video
Watch Technical Summary Video
Watch Next Session Video


Here's a trade from "The Daily" and insights into our trading strategy:


Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.

The moves to new highs by NASDAQ and the general upside shown managed to push several plays to targets and we banked some nice gain.

AMZN (Amazon.com, Inc.)
Company Profile
AMZN surged Friday and one of our positions hit the initial target. We sold half our options purchased 6/13 at $82.20 for $132.15, banking over 60%.

V (Visa, Inc.)
Company Profile
V broke higher as well after a bit of dormancy, hitting our target. We sold half the options purchased 6/4 for $6.65 for $10.30, banking 55%.

ISRG (Intuitive Surgical, Inc.)
Company Profile
ISRG finally caught some fire and surged on the week. It too hit the initial target and we banked half our 49% option gain on options purchased for $25.00 and sold for $37.20.

CRM (salesforce.com, inc.)
Company Profile
CRM started this last run in late June on a 20 day EMA test. We already had the position that we entered 6/5, buying some stock at $133.87 and some August $135.00 strike calls for $5.75. We sold the calls for $9.40, banking 138%.

SFIX (Stitch Fix, Inc.)
Company Profile
SFIX was a relatively quick play, entered 6/26. We bought stock for $28.49 and some September $27.00 strike calls for $4.7. On 7/10 SFIX hit the initial target and we sold some stock for $33.25, banking 16+%, and some of the calls for $7.80, banking 65%.

UIS (Unisys Corporation)
Company Profile
A software stock that finally broke higher for us. We entered 5/30 and spent a long time waiting for UIS to move. It finally came to life and surged this past week. We sold some stock for a 15+% gain, sold some of the October $12.00 calls for $3.3 (bought for $1.8), banking 83%.

ARQL (ArQule, Inc.)
Company Profile
Entered ARQL 6/26 on a good move, buying stock for $5.39 and some August $5.00 calls for $0.90. ARQL edged higher then exploded upside two Fridays back. Monday it surged early, hit the initial target. We sold stock for $6.64 and a 23% gain, also selling options for $1.90, banking 111%.

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2) STOCK SPLIT REPORT

Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

Listen to Stock Split Report Editor Jon Johnson's
stock split interview on CNBC-TV [ View Here ]



Here's a leader play and our current analysis.

Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
CONN (Conns, Inc.--$37.50; +1.40; optionable): Home furnishings, appliances
Company Profile
EARNINGS: 09/06/2018
STATUS: Inverted head and shoulders. After a nice run to January 2018, CONN carved out an inverted head and shoulders over the past 6 months. The past 5 weeks CONN formed the right shoulder, something of an inverted head and shoulders in itself. MACD broke out as CONN rallied to the January high. Friday CONN tried the move, faded a bit, but is looking solid. We want to play the breakout move as our entry.
CHART VIDEO
Volume: 587.132K Avg Volume: 638.297K
BUY POINT: $37.74 Volume=900K Target=$45.00 Stop=$35.32
POSITION: CONN OCT 19 2018 37.00 C - (55 delta) &/or Stock

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
3) IH ALERTS

DO (Diamond Offshore--$20.50; +0.53; optionable): Offshore drilling
Company Profile
EARNINGS: 07/30/2018
STATUS: The past two weeks DO has formed a short pennant after a strong move higher to end June. Before that, DO built a very large inverted head and shoulders spanning August 2016 to the breakout in late June. This pattern formed after a long 4 year pullback. Over and over you have seen these patterns formed after selloffs and then yield impressive upside rallies. That is good enough for us. The play is to enter as DO makes the move out of this pennant test of the breakout. Earnings are at the end of July and perhaps DO breaks higher and gives us a nice rally ahead of that. If so, we bank at least a good part of the gain. If not, we like this enough to ride through earnings.
CHART VIDEO
Volume: 1.737M Avg Volume: 1.498M
BUY POINT: $20.93 Volume=2M Target=$25.00 Stop=$19.59
POSITION: DO SEP 21 2018 20.00 C - (56 delta) &/or Stock

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
4) SUCCESS TRADING GROUP
--by the MarketFN STG Team

WMT (Walmart Inc.)
Company Profile
Our Success Trading Group will be watching closely for entry points next week on some of our favorite stocks such as Walmart Inc. (Ticker: WMT) and RPM International Inc. (Ticker: RPM).

Our Success Trading Group closed
7 years with 0 losses on our Main Trade Table. In fact, we closed 100% winning trades for the calendar years 2016, 2015, 2013, 2012, 2011, 2010 and 2009 (we still have 1 open position from 2017 (all others were winners) and 1 trade that we opened in 2014 was closed as a losing trade). All of these trades are posted on our Main Trade Table for your review during your free membership trial period.

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Chart by StockCharts.com
Please turn on your ability to receive graphics. We are providing you with a detailed chart of this stock. If you are unable to turn on graphics, please CLICK HERE or on the *Read Our Weekend Report Online* link above.
5) COVERED CALL PLAY

VALE - Vale S.A. is currently trading at $13.14. The August $13.50 Calls (VALE20180818C00013500) are trading at $.49. That provides a return of about 4% if VALE is not called away at expiration and about 7% if VALE is above $13.50 on expiration Friday in August.
Company Profile



Learn more about our Covered Call Tables


PREMIUM SERVICES
IH Alerts: InvestmentHouse.com's Best of The Best Plays!
Stock Split Report: Forbes.com Best of the Web
Covered Calls: Allowed in your IRA - Energize your portfolio!
The Daily: "The Daily" is a must read for all investors!
Success Trading Group: 7 years without a trading loss!
The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.
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