by Ian Harvey
August 18, 2017
It appears that the stock market had a touch of the flu’ yesterday; or more succinctly classed as the “stock market fickleness” with the Dow Jones Industrial Average (DJIA) ending its four-day winning streak, moving sharply lower in response to disappointing earnings from Wal-Mart (WMT), Cisco Systems (CSCO) and L Brands, Inc. (LB).
However, looking at the other-side of the crystal ball, Chinese e-commerce giant Alibaba Group Holding Limited (NYSE:BABA) reported yet another stunning quarter, sending its shares higher by 2.8%. Revenue increased 56% in local currency to $7.4 billion and non-GAAP earnings per share were $1.17 compared with $0.74 in the year-ago quarter. Wall Street was expecting per-share earnings of $0.93 on revenue of $7.13 billion.
In the article “Earnings Predictions for the Week Beginning August 14, 2017”, the advice was for a call option to be purchased on Alibaba stock, and if that had been accomplished then a potential profit of 155% would have been realized.
Armchair Members of Stock Options Made Easy, were also advised the same. Now, for the following weeks “Earnings Predictions”, even more profits can be achieved.
As well, NetApp Inc. (NASDAQ:NTAP) was another targeted by “Cut-to-the-Chase” members for a put option. The stock plunged 6% in big volume, breaking below the 50-day moving average. The stock also fell more than 8% from the 43.24 buy point of its July 14 breakout. The storage-technology company reported quarterly profit and revenue growth above expectations, but its current-quarter guidance was light.
Weibo Corp (ADR) (NASDAQ:WB) Calls were targeted last week by the Armchair Trader Members, and had a successful conclusion for a 100% profit – but looking at yesterday’s WB trading; Weibo made new highs in heavy trading and extended its’ buy zone.
One area that seems to be bothering investors and traders is the concerns surrounding President Trump's recent controversies with people’s abilities to work with him; which will make it less likely for Congress to work amicably to pass business-friendly legislation. And, once again, a lot of this is just hot-air, sensational news-reporting, and/or hopeful bearish activity.
Historically, the S&P 500 has traded with a price-to-earnings multiple of about 14.5, but at the present time is sitting at about 24X earnings, making it, at the moment, probably the most expensive non-recessionary market in U.S. history – but does it really matter?
Despite the problems associated with getting tax reform, health-care issues solved, and other pro-business agenda by the president under-way on a successful basis; there is plenty of liquidity available, with the European Central Bank printing plenty of money to fund their monetary policy, and much of this finding its way into the U.S. stock market. This is a definite support mechanism for the continued market rally despite the political issues that exist.
Therefore, we at Stock Options Made Easy are prepared for eventualities that exist or may occur in the future.
What To Do Now…….
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