It seems like only a week ago the Dow closed at record highs.

Wait, it was just a week ago on January 26th when the Dow closed at 26,616 and a new record. Today the index closed at 23,345 and 8.5% lower. We have almost had a 10% correction in just one week. Actually, a 10% correction would be a dip to 23,954 and the intraday low today was 23,923. Had we closed there it would have been official.

We may get another chance on Tuesday. The S&P futures are down -50 as I type this. The Hong Kong Hang Senq is down -4.3%, Shanghai Composite is down -2.1% and the Nikkei is down -5.2%. The Dow futures are down -550 points.

The odds are good we will get a good retest of the Monday lows. In theory, this could produce a bounce but theory never seems to work in practice.

There was on directly attributable cause for the Monday crash. It was simply a continuation of the Friday decline and a bunch of technical levels were broken. The 50-day average on the Dow and S&P was broken like a twig along with multiple support levels to trigger millions of stop losses.

Margin calls started the decline at the open and then increased the velocity a 2:PM. I am sure there will be another flurry of forced margin selling at the open on Tuesday.

Historically, whenever there has been a major market meltdown, the indexes are higher a week later. In our case today, investors have been waiting for a dip to buy for the last six months and now that they have one, there are no bids. Everyone is afraid to try and catch a falling knife.

Volume was very heavy today at 11.5 billion shares. Decliners were 7:1 over advancers and volume was nearly 7:1 declining over advancing.

The volatility indexes exploded higher. The VIX spiked 20 points to close at 37.32. That is the highest close since 2011.


The XIV ETN, which is the inverse of the VIX, crashed back to $99 in regular trading. This ETF rises when volatility goes down. It falls when volatility rises. After the close, the ETN collapsed to $15. I was going to recommend we buy this ETN at the open on Tuesday. However, there are rumors that this ETN and other volatility ETNs may have blowup and the banks behind them are liquidating. Credit Suisse is rumored to have lost $500 million on the XIV alone on Monday. If it still exists at the open on Tuesday, it may be worth putting a few dollars on it as a lottery play. Credit Suisse said in a note that there was nothing wrong with it only the extreme volatility had crashed the price.


The VIX Futures ETV (VXX) spiked from the close at $43 to $65 in afterhours. The ETF has 34.1 million shares outstanding and ShortSqueeze.com says there are 32.5 million sold short. The volume on Monday was 221 million. That means more than 5 times the outstanding shares were traded. This is a favorite of the algo computers so they were hitting it hard today. If you have a big account I would strongly recommend shorting this ETF at the open on Tuesday. This ETF is flawed. It is a futures ETF so every month it declines as the futures roll over. It has done four 1:4 reverse splits in the last four years as it declines to $10 then reverse splits and starts all over. The last 1:4 was in August.


The S&P blew through support at the 50-day and again at 2,675. Those are levels we would not even have considered possible a week ago. The 100-day at 2,633 should be tested at the open on Tuesday. That should be decent support but a tsunami of selling could blow through that level as well.


The Dow component table is missing any green with every component contributing to the decline. Intel and Pfizer were positive for part of the day but eventually lost the battle.


At the intraday lows the Dow was down -10% from the highs. That number is 23,954 and the low today was 23,924. The Dow bounced from that level and from the support of the 100-day average at 24,005. Whether those levels will matter on Tuesday is a coin toss. With the Dow futures down over -565 points Monday night, it could be another big loss.


The Nasdaq blew through the prior support of the 30-day average and through uptrend support that held all prior declines. The -273 loss for the day was amazing. Next support is 6,900 and the 100-day at 6,839. The big cap techs are being flushed by funds as they try to capture any remaining profit from their six months of gains.



The Russell 2000 has fallen farther than the big caps. The 100-day average has already been broken as well as support at 1,508. The next material support could be 1,465 followed by 1,450.


The calendar for the rest of the week is uneventful with the exception of the government funding deadline on Thursday. Lawmakers are going to try and kick the can farther down the road to March 22nd but it looks questionable as of Monday.


The earnings reporters for Tuesday probably wish they could reschedule. Disney is a Dow component but it will not make any difference to the index. These reporters will be ignored and buried under another flood of negative market stories instead.


The S&P futures are down -75 right now at 11:30 ET. While that could change by morning, I would not hold my breath. I did recommend a new position on ABBV in hopes we can buy it even lower on another negative open. I would like to buy the dip but in these kinds of declines, further damage could be done before a rebound appears. There is always another day to trade if you have money in your account.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email



NEW DIRECTIONAL CALL PLAY

ABBV - AbbVie - Company Profile

Comments:

I am recommending a new position on ABBV thanks to the market volatility erasing the post earnings spike. I recommend waitin at least 5 minutes after the open to place your order. Futures are down hard so we should open lower.

Original Trade Description: February 6th.

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company offers HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; IMBRUVICA, an oral therapy for the treatment of patients with chronic lymphocytic leukemia; and VIEKIRA PAK, an interferon-free therapy, with or without ribavirin, for the treatment of adults with genotype 1 chronic hepatitis C. It also provides Kaletra, an anti- human immunodeficiency virus(HIV)-1 medicine used with other anti-HIV-1 medications as a treatment that maintains viral suppression in HIV-1 patients; Norvir, a protease inhibitor indicated in combination with other antiretroviral agents to treat HIV-1; and Synagis to prevent RSV infection at-risk infants. In addition, the company offers AndroGel, a testosterone replacement therapy for males diagnosed with symptomatic low testosterone; Creon, a pancreatic enzyme therapy for exocrine pancreatic insufficiency; Synthroid to treat hypothyroidism; and Lupron, a product for the palliative treatment of prostate cancer, endometriosis, and central precocious puberty, as well as for the treatment of patients with anemia. Further, it provides Duopa and Duodopa, a levodopa-carbidopa intestinal gel to treat Parkinson's disease; Sevoflurane, an anesthesia product for human use; and ZINBRYTA, a subcutaneous treatment for relapsing forms of multiple sclerosis. The company sells its products to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies, and independent retailers from its distribution centers and public warehouses. AbbVie Inc. has collaboration agreements with C2N Diagnostics; Calico Life Sciences LLC; Infinity Pharmaceuticals, Inc.; M2Gen; and Principia Biopharma Inc. Company description from FinViz.com.

Next expected earnings April 27th.

A lot of companies have 1-2 real drugs in the pipeline that may be approved. Several companies have one drug that could be a blockbuster and reach $1 billion in sales annually. AbbVie has multiple blockbusters in the pipeline and dozens of other drugs already in the market.

Analysts claim AbbVie's pipeline is the strongest in the industry. The post earnings market drop is a buying opportunity. The company's other drugs are going to be cash cows. Imbruvica generated $1.8 billion in sales in 2016 and could reach $7 billion annually over the next couple of years. Venclexta was approved in 2016 for leukemia and sales could peak at $3.5 billion a year. An experimental cancer drug called Rova-T could hit $5 billion a year when approved. A psoriasis drug called risankizumab could produce $4 billion a year and arthritis drug upadacitinib could peak at $3.5 billion.

AbbVie was a spinoff from Abbott Laboratories in 2012 and they are doing great.

ABBV reported Q4 earnings of $1.48 that beat estimates for $1.45. Revenue of $7.74 billion beat estimates for $7.51 billion. The company guided for 2018 adjusted earnings of $7.33-$7.43, up from $6.37-$6.57 and analysts were expecting $6.66.

The blowout guidance spiked the shares to $125 from $108. We had closed our prior ABBV position the day before the earnings. With the market crash, shares have now declined to $109 and giving us a chance to reenter the position.

Buy May $115 call, currently $5.95, no stop loss because of volatility.




Current Portfolio


Open Positions

Check the graphic below for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline. Any items shaded in blue were previously closed.




Current Position Changes


PRGS - Progress Software
The long call position was entered on Tuesday, stopped on Monday.

ADSK - Autodesk
The long call position was stopped at $110.65 on Monday.

BOTZ - Robotics ETF
The long call position was stopped at $26.45 on Tuesday.

DLTR - Dollar Tree
The long call position was stopped at $112.50 on Thursday.

HD - Home Depot
The long call position was stopped at $203.25 on Tuesday.

NTGR - Netgear
The long call position was stopped at $68.75 on Thursday.


Original Play Recommendations (Alpha by Symbol)


ADSK - Autodesk - Company Profile

Comments:

No specific news. ADSK was hit by the market volatility to stop us out on Monday.

Original Trade Description: January 15th

Autodesk, Inc. operates as a design software and services company worldwide. It operates through Architecture, Engineering, and Construction; Manufacturing; Platform Solutions and Emerging Business; and Media and Entertainment segments. The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; and AutoCAD LT, a professional drafting and detailing software; Maya and 3ds Max software products that offer 3D modeling, animation, effects, rendering, and compositing solutions; and Revit software for building information modeling. It also provides Inventor tool for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; and computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing. In addition, the company offers Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; BIM 360, a construction management software; and Shotgun, a cloud-based software for review and production tracking in the media and entertainment industry. It licenses or sells its products to customers in the architecture, engineering, and construction; manufacturing; and digital media, consumer, and entertainment industries directly, as well as through resellers and distributors. Autodesk, Inc. was founded in 1982 and is headquartered in San Rafael, California. Company description from FinViz.com.

Expected earnings Feb 27th.

Autodesk was flying high in November at $130 but fell off a cliff after earnings. Shares plunged to $105 on weaker than expected subscriber additions. Autodesk is converting from the software sales model to the software as a service model with various subscription plans. This will produce steady earnings in the future but it normally rocky in the first two years of conversion as we have seen with a dozen other companies.

The company reported a loss of $119.8 million on revenue of $515.3 million. Analysts were expecting $116.4 million and $513.6 million. There was nothing in those numbers that would have caused a $25 share drop.

They reported 146,000 new subscribers and analysts were expecting 147,000. The company slightly lowered the full year subscriber forecast because of the minor miss. The company said the reason for the miss was a large number of new enterprise customers. These customers buy companywide licenses for extended periods compared to the 2-3 license subscriptions in smaller companies. The bigger deals sharply raised the unbilled deferred revenue from $63 million to $148 million.

William Blair said this was the first quarter of YoY revenue growth since April 2015. Morgan Stanley also said not to worry about the subscriber numbers because the enterprise customers were "higher value" subscribers.

The company also announced a cutback of 1,000 jobs in a previously unannounced restructuring. Morgan Stanley things that will yield about $6 per share in free cash flow in 2020.

I believe the restructuring is going to be positive. Basically, they said they were going to shutdown all the noncore operations and simply focus on making the core business better. I believe they grew too fast and prior management was spreading the effort into other areas that would not be highly profitable. The new management said, focus on the profitable areas and trim the costs and other efforts. ADSK shares have moved sideways for the two weeks after the initial drop. We entered a position in ADSK on Dec 5th but were stopped on Dec 20th when shares briefly broke below support. Shares are rising again and I want to reenter a positin.

The options are expensive so I am going to recommend a spread. I believe the stock will ramp into earnings and then it is a coin toss for direction. We will exit before the Feb 27th earnings.

Position 1/16/18:
Long March $120 call @ $4.19, exit $2.50, -1.69 loss.
Closed 2/5: Short March $130 call @ $1.45, exit .90, +.44 gain.
Net loss -1.25.



BOTZ - Robotics & AI ETF - ETF Profile

Comments:

No specific news. The ETF was stopped out on Tuesday before the big declines began. We still posted a 107% gain.

Original Trade Description: October 24th

The Global X Robotics & Artificial Intelligence ETF seeks to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles. The ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

The ETF has 28 stocks including NVDA, ISRG, TRMB, BRKS, IRBT, MZOR, Toshiba and Cyberdyne.

The ETF is somewhat slow moving since it just began trading in September. Volume has increased significantly to 2.59 million shares on Monday.

The key to this ETF and this position is that the stock rarely goes down and the options are cheap. There have only been 3 periods of decline in 2017 and each drop was only about 60 cents. The ETF is rising steadily since April but has recently been accelerating. If this continues, even allowing for some declines, that would equate to a nice gain by June and the option costs $1.45 at the money. This is not going to set the world on fire like a Facebook or Netflix but it should be dependable, stable gains. Obviously, past performance is no guarantee of future results.

Position 10/24/17:

Closed 1/30: Long June $24 call @ $1.45. exit $3.00, +$1.55 gain.



DLTR - Dollar Tree - Company Profile

Comments:

No specific news. Strictly a market volatility crash to stop us out on Thursday.

Original Trade Description: January 22nd

Dollar Tree, Inc. operates variety retail stores in the United States and Canada. It operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $1.00. It provides consumable merchandise, including candy and food, and health and beauty care products, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food; various merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, and other items; and seasonal goods, which include Valentine's Day, Easter, Halloween, and Christmas merchandise. This segment operates under the under the Dollar Tree and Dollar Tree Canada brands, as well as 11 distribution centers in the United States and 2 in Canada, and a store support center in Chesapeake, Virginia. The Family Dollar segment operates general merchandise discount retail stores that offer consumable merchandise, which comprise food, tobacco, health and beauty aids, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home decor, and giftware, as well as domestics, such as blankets, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise, which include Valentine's Day, Easter, Halloween, and Christmas merchandise, as well as personal electronics that comprise pre-paid cellular phones and services, stationery and school supplies, and toys. This segment operates under the Family Dollar brand, 11 distribution centers, and a store support center in Matthews, North Carolina. As of January 28, 2017, the company operated 14,334 stores in 48 states and the District of Columbia, and 5 Canadian provinces. Company description from FinViz.com

In late November, DLTR reported earnings of $1.01 that beat estimates for $90 cents and was well above the 70 cents reported in the year ago quarter. Revenue of $5.32 billion beat estimates for $5.28 billion. For the current quarter, they guided for revenue in the range of $6.32-$6.43 billion and analysts were expecting $6.26 billion. Full year earnings guidance was $4.64-$4.73 and $22.2-$22.31 billion. That is up from $4.44-$4.60 in prior guidance. Analysts were expecting $4.69.

Same store sales (SSS) for the system rose 3.3% and beat estimates for $2.4%. Dollar Tree SSS rose 5.0% and Family Dollar sales rose 1.5%. Next earnings Feb 20th.

After earnings, Moffett Nathanson initiated coverage with a buy. A week ago Guggenheim initiated coverage with a buy rating and $125 price target.

Dollar Tree is Amazon proof. With everything in the store $1 or less even Amazon cannot sell and ship items that cheap. Since their acquisition of Family Dollar they now operated 14,334 stores. This is a retail powerhouse and even if the economy weakens, their business will thrive because of the low price point.

We had a great run on DLTR in Q4 for a $1,700 gain. We close the position on Jan-2nd when momentum slowed and shares declined several days in a row. The Guggenheim buy rating saw the shares spike from $110 to $115 and then traded sideways to down for a week as traders took the unexpected profits.

Retailers across all sectors are surging again and I believe DLTR is going to break out to a new high.

Position 1/23/18:
Closed 2/1: Long March $120 call @ $3.05, exit $2.31, -.74 loss.



HD - Home Depot - Company Profile

Comments:

No specific news. HD, a Dow component, crashed with the market to stop us out.

Original Trade Description: December 18th

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me (DIFM), and professional customers. The company offers installation programs that include flooring, cabinets, countertops, water heaters, and sheds; and professional installation in various categories sold through its in-home sales programs, such as roofing, siding, windows, cabinet refacing, furnaces, and central air systems, as well as acts as a contractor to provide installation services to its DIFM customers through third-party installers. It primarily serves homeowners; and professional renovators/remodelers, general contractors, handymen, property managers, building service contractors, and specialty tradesmen, such as installers. The company also sells its products through online. It operates through approximately 2,278 stores, including 1,977 in the United States, including the Commonwealth of Puerto Rico, and the territories of the U.S. Virgin Islands and Guam; 182 in Canada; and 119 in Mexico.

The company reported Q3 earnings of $1.84 that rose 15% and beat estimates for $1.81. Revenue rose 8.1% to $25.026 billion, up from $23.154 billion. This beat estimates for $24.523 billion. Same store sales rose 7.9%. HD said the hurricanes added about $282 million in sales but also cost them about $51 million in store damages and inventory shifting costs. The company guided for Q4 revenue growth of 6.3% and same store sales of 6.5%. Those numbers were up from 5.3% and 5.6% in prior guidance. Earnings are expected to grow 14% to $7.36 for the full year, up from prior guidance of $7.29. Full year 2017 sales are expected to be $100.6 billion. They had $8 billion unspent on a $15 billion share repurchase program.

In early December, Home Depot (HD) announced a new $15 billion buyback and raised guidance for annual sales between $114.6-$119.8 billion by the end of 2020. The new repurchase program replaced the existing $15 billion program. The company expects to buy back $8 billion in shares total in 2017 with $2.1 billion in Q4. Since 2002, Home Depot has bought back 1.3 billion shares worth $73 billion.

Home Depot had an effective tax rate of 37% in Q3. Under the new tax plan that would drop to about 23%. Analysts believe this could boost HD's 2018 earnings by as much as 25%. That means their earnings could rise as much as $1.81. They currently have a PE of 25 and that would equate to about a $45 rise in the stock price. However, I would expect that PE to decline somewhat in the conversion.

Shares are already up after their November earnings guidance but I believe they can still go higher. Options are not cheap. In order to get the benefit of the rise in expectations I would like to reach out to May but the options are too expensive but not enough to make a spread worthwhile. I am recommending a March position and hopefully analyst projections will do the work for us.

Earnings are Feb 13th and I would plan to hold over that report because they will give tax guidance at that time.

Update 1/1/18: HD is reportedly talking to XPO Logistics about an acquisition of the $9 billion company. HD uses them to deliver large items like refrigerators and other appliances. There could be a battle with Amazon since that large item shipping is a problem for Amazon.

Position 12/19/17:

Closed 1/30: Long Mar $190 call @ $4.40, exit $12.20, +$7.80 gain



NTGR - Netgear - Company Profile

Comments:

No specific news. Shares crashed with the market to stop us out.

Original Trade Description: January 8th

NETGEAR, Inc. designs, develops, and markets innovative networking solutions and smart connected products for consumers, businesses, and service providers. The company operates in three segments: Retail, Commercial, and Service Provider. The Retail segment offers home WiFi networking solutions and smart connected products. The Commercial segment provides business networking, storage, and security solutions. The Service Provider segment offers made-to-order home networking hardware and software solutions, including 4G LTE hotspots sold to service providers for sale to their subscribers. The company also offers commercial business networking products, such as Ethernet switches, wireless controllers and access points, Internet security appliances, and unified storage products; broadband access products, including broadband modems, WiFi gateways, and WiFi hotspots; and smart home/Internet-of-Things connectivity and products comprising WiFi routers and home WiFi system, WiFi range extenders, powerline adapters and bridges, remote video security systems, and WiFi network adapters. It markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers worldwide. Company description from FinViz.com

Expected earnings February 6th.

Two weeks ago Amazon bought Blink. You may not have heard about Blink but they launched in 2016 with an inexpensive wireless camera and video doorbell. This is the hot new sector for video surveillance. You have probably heard about Ring video doorbells, which is a different company.

The point to this commentary is that Netgear is making the very popular Arlo security camera and sales are booming. Netgear also has 48% of the market for home routers.

With Amazon likely to go big in this category after the acquisition of Blink, that means Netgear is suddenly a target. Global Equities said Facebook, Google or even Apple could acquire Netgear because that gives them a top position in the space. Google would be the prime candidate because they could link the Arlo system to Google Home. It would also allow Google access to trillions of terabytes of data related to the home routers and networking equipment. Monitoring those devices would be like keeping their finger on the pulse of technology. They would know how many people are watching Netflix, how much data was being consumed by what subset of users, etc. This could be very important in their planning for the future.

Apple is not likely to make a play for Netgear because they do not do big acquisitions and Netgear has too many "common" products for Apple to manage. They would be more likely to buy Tesla or Netflix if they were going to make a big splash.

Facebook could find a way to use the Arlo system and that would be a significant branch away from their social media roots. I doubt they would want the networking business.

In reality, nobody has to buy Netgear for them to succeed. They are already successful and Arlo is an entirely new category for them and a category that is exploding in sales. When they report Q4 numbers they could be very high.

Shares spiked to $60 in mid December and traded sideways for the last three weeks. I believe shares are about to move higher.

Update 1/16/18: Netgear demonstrated new products at the CES show and the crowd loved them. Apparently, so did investors. They announced the Nighthawk Pro Gaming system of network gear that will cut lag time and enhance multiplayer game play for serious gamers. They also demonstrated the Orbi Wi-Fi system, which has also been very successful. With the rapid ramp of the Arlo video cameras for security, they have completed an entire cloud support system that allows storage of video, multiviewer capability for home monitoring, etc.

Position 1/9/18:
Closed 2/1: Long Mar $65 call @ $2.25, exit $6.10, +$3.85 gain.



PRGS - Progress Software - Company Profile

Progress Software Corporation provides software solutions for various industries worldwide. Its OpenEdge segment offers Progress OpenEdge, a development software, which builds multi-language applications for secure deployment across various platforms and devices, as well as cloud; and Progress Corticon, a business rules management system that enables applications with decision automation and change process, and decision-related insight capabilities. The company's Data Connectivity and Integration segment provides Progress DataDirect Connect software, which offers data connectivity using industry-standard interfaces to connect applications running on various platforms; and Progress DataDirect Cloud, a software-as-a-service (SaaS) based connection management service that simplifies SQL access to a spectrum of cloud-based data sources through a single standards-based interface. Its Application Development and Deployment segment offers Dev Tools, a design, quality assurance, debugging, and reporting suite; NativeScript, an open-source application development platform; Dev Cloud, a cloud-based application design, deployment, hosting, and testing suite; Telerik Platform, an end-to-end application lifecycle solution; Test Studio, an application lifecycle management suite for testing Web, mobile, and desktop applications; Sitefinity, a Web content management and customer analytics platform; and Progress Rollbase, a software that allows the creation of SaaS business applications. The company also provides project management, implementation, custom development, programming, and other services, as well as services to Web-enable applications; and training services. It sells its products directly to end-users, as well as indirectly to application partners, original equipment manufacturers, and system integrators. Progress Software Corporation was founded in 1981 and is headquartered in Bedford, Massachusetts. Company description from FinViz.com

Next earnings April 11th.

Progress is not only fighting competitors but fighting off activist shareholders as well. The company has three involved but only one currently agitating for change. Praesidium Investment Management is the third largest shareholder (8.8%) and it opposes the company's attempt to turn itself into an artificial intelligence tools company.

Praesidium has complained about their acquisition strategy to buy leading edge technology rather than spend years attempting to recreate it. The activist calls it venture capital type businesses. The Progress CEO defended their strategy saying "We are looking for mature businesses, companies that have been around for a while, and have grown to scale but growth may be slowing. By combining with these companies we can drive efficiencies and bring new products into the business.

A Benchmark Company analyst said the company appears to be implementing bits and pieces of Praesidium's proposals in an effort to fend-off the activist hedge fund. Praesidium wanted seats on the board so in order to dilute the impact of those seats, Progress expanded the number of board positions.

The company has been running "lean business" carefully managing costs and executing on their goals, according to the CEO.

They reported earnings on January 10th of 67 cents that beat estimates for 61 cents. Revenue of $116.1 million beat estimates for $114.3 million. For the current quarter they guided for earnings of 46-48 cents on revenue of $90-$93 million. Analysts are expecting 38 cents. For the full year, they guided for $2.29-$2.35 and $398-$404 million.

Activists mean the company has to pay a lot more attention to detail and always remain on their toes. This means they are more than likely going to continue executing with a minimum of wasted expenses. That means higher profits.

Shares spiked about $8 on their earnings and have pulled back only slightly over the last three weeks. They are holding just over the $50 level and posted a gain today when the Nasdaq was negative.

Position 1/30/18:
Closed 2/5: Long June $55 call @ $2.00, exit .75, -1.25 loss.



Prices Quoted in Newsletter

At Option Investor, we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.

The prices quoted in the newsletter are the end of day prices in most cases.

When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.

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All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted please let us know.