New Play Possibilities
Watching WHR and GMCR
Dear Bottarelli Research Member,
It’s been a whirlwind morning, but we’re just getting started!
As the markets trim their early gains, we’re nicely positioned in a series of ultra-short positions. First, we have the SDS March 35 Calls (O:SDS 10C35.00), which we entered yesterday for $1.60. We also have the FAZ March 18 Calls (O:FAZ 10C18.00), which we also entered yesterday for $1.48.
As you know, I do not like the looks of the Dow, S&P, and NASDAQ charts. As you can see below, the Dow broke below the 50-day moving average yesterday, which is technically bearish. Today’s rally attempt, at least so far, looks like it won’t be able to muster the strength to push higher. Unless Bernanke (who is speaking now) can pull some magic rabbit out of his hat, it looks like we’re headed lower. Therefore, maintain both ultra-short positions.
In other news, yesterday’s consumer confidence number (which is what triggered the downside move) doesn’t paint a good picture for companies like Whirlpool (WHR – NYSE). If consumes are still worried about the economy, then big-ticket sales of refrigerators and dishwashers are not poised for a rebound. If the timing is right, we could very well jump into WHR puts. Wait for my signal.
Also noteworthy today is big news from Green Mountain Coffee Roasters (GMCR – NASDAQ), which could ignite an extended upside run.
You see, GMCR and J.M. Smucker announced a multi-year manufacturing and distribution agreement under which GMCR will manufacture certain coffee brands owned by Smucker (including Folgers, Gourmet Selections, and Millstone) in single-serve K-Cup portion packs for GMCR’s Keurig Single-Cup Brewers.
This is huge news for GMCR because Smucker is one of the U.S. leaders in the retail coffee market. Smucker also manufactures the Dunkin Donuts coffee brand through retail channels in North America. This agreement could send GMCR’s market share explosively higher. Once again, if the timing is right, I’ll issue the play. Until then, sit tight.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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