Market Summary (continued)
The week started continuing the prior week selling, some sharp selling at that. Wednesday saw the FOMC rate decision where the Fed was more hawkish (and with at best two rate hikes before inversion, it is cutting it close) but not so much the market dropped, instead just holding steady. Thursday the hammer fell with Trump wanting to increase tariffs from 10% to 25% on the first $200B in tariffs on Chinese goods. Stocks flopped -- then surged back up intraday. 142 points low to close on the Dow? No! On NASDAQ. The trade issues were no match for AAPL's earnings as the company's line of cash cow products produces tons of income even if the company can no longer come up with innovations.
Friday was jobs Friday and it was a clinker of sorts, though revisions to the two prior months more than made up the difference. 157K jobs versus the 190K expected (248K June, from 213K). Disappointing, but then again, Toys-R-Us finally closed its operations in its slow, Ivan Ilyich-like death. That bled 32,000 jobs from the report. Added back in and, voila, 189K, just 1K off expectations. Tomato, tomato. Everything else status quo as well. Wages +2.7% year/year. Participation 62.9%. 57K more of those manufacturing jobs that would never come back came back. 3 month average is 224K per month.
What did stocks do? Not much. After AAPL's big day, NASDAQ was quiet though TTWO came back to life -- for most of the session. SP500 and DJ30 added some decent 0.5%ish gains. The midcaps were up modestly, RUTX lost a half percent. Kind of status quo in terms of the action of late outside of that trade dispute ramp up.
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STATUS: Cup w/handle. As part of its 6+ month base, C has formed a cup with handle from mid-May to late July, currently working on the handle and a breakout move. Friday C moved over the 200 day SMA and held the gains, a positive, but not a definitive move. Well, we are looking for a more definitive move, a breakout that snaps C clearly through the 200 day SMA and on toward the January highs. Our first target, however, is the February highs, and that more conservative move lands an 80%ish gain on the call options.
Volume: 13.537M Avg Volume: 17.162M
BUY POINT: $72.58 Volume=20M Target=$76.97 Stop=$71.15
POSITION: C OCT 19 2018 72.50C - (62 delta)
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Here's a leader play and our current analysis.
STATUS: Transports look good, and while we have a play ready to go on CSX, we really like CNI as well. In July, CNI broke out of a 13 month base/range, gapping upside late month on its earnings report. The past week it has tested back to the upper gap point and the 10 day EMA, holding the move. We will wait for CNI to complete the test, and when it breaks back upside through the buy point, we enter for a run to near 100.
Volume: 866.372K Avg Volume: 1.026M
BUY POINT: $89.26 Volume=1.2M Target=$99.77 Stop=$86.19
POSITION: CNI OCT 19 2018 90.00 C - (48 delta) &/or Stock
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CX (Cemex SA--$7.47; +0.08; optionable): Cement
STATUS: Trend reversal. CX peaked in July 2017 and sold through May 2018. At that point it bottomed and recovered into early July where it ran into the down trendline from that prior July peak. It stalled and fell to late July, but earnings were hard as cement (give me a break) and CX surged through its down trendline and the 200 day SMA into late July. It tested the earnings move the past week, forming a flag that came back to the 10 day EMA on the Thursday and Friday lows. Friday CX started back up but volume was not there so it was nothing major. The pattern, however, has set up (get it? Cement. Set up) and if CX makes the break higher and shows some volume. we are in for more of the trend reversal breakout move.
Volume: 2.681M Avg Volume: 7.335M
BUY POINT: $7.56 Volume=10M Target=$9.52 Stop=$7.06
POSITION: CX OCT 19 2018 7.00 C - (68 delta) &/or Stock
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--by the MarketFN STG Team
TRV (Travelers Companies Inc.)
Our Success Trading Group members scored another winning trade this week when we closed out a position in Travelers Companies Inc. (Ticker: TRV). We currently like Owens-Illinois, Inc. (Ticker: OI) at its current price for new positions.
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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DK - Delek US Holdings Inc. is currently trading at $50.35. The September $50.00 Calls (DK20180922C00050000) are trading at $3.00. That provides a return of about 6% if DK is above $50.00 on expiration Friday in September.
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| 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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