by Phil Davis - August 11th, 2014 8:22 am
"Thruppence and sixpence every day
Just to drive to my baby
I don't care how much I pay (Too much, Magic Bus)
I wanna drive my bus to my baby each day (Too much, Magic Bus)
I don't want to cause no fuss (Too much, Magic Bus)
But can I buy your Magic Bus? (Too much, Magic Bus) " – The Who
This is certainly one Magic Bus of a market, flipping on a dime or, more accurately, bouncing off the Dow's 200 day moving average at 16,350 back towards our predicted strong bounce line at 16,650. The Transports are also bouncing right off the 100 dma at 142, down from 152 and. per our 5% Rule™, we expect 146 to be tested this morning. This is not "surprising", this is what we said would happen on Friday morning.
As we discussed all of last week, BALANCE is the key in a choppy market and our Long-Term Portfolio finished Friday at $590K, up exactly 18% for the year, while our Short-Term Portfolio jumped to $136,000, up 36% for the year and together they are $726,000, up over 20% for the year on our two primary virtual portfolios.
Having well-balanced portfolios allowed us to ride out the dip and, in fact, buy more longs while the market was pulling back, rather than panicking out of positions that, for the most part, only went down with the market – rather than because there was any actual weakness in the stock.
Our general strategy of Being the House – Not the Gambler is also a great help in consistently making progress in our portfolios, even when the market has such a choppy week.
For most traders, it's "thruppence and sixpence every day" just to hold on to their positions as they gyrate up and down. As sellers of premium, we own the Magic Bus and we collect those daily pennies instead of selling them and that acts as a tremendous buffer to our long-term investing, where simply hanging on to a position allows…
by Phil Davis - June 17th, 2014 8:23 am
Fake it 'till you make it.
While it was Aristotle who said that "acting virtuous will make one virtuous" (and clearly Aristotle hasn't been to the same charity events/wealth orgies that I have, or he never would have said it), it is our modern Central Banking system that decrees that "acting like the economy is better will make the economy better."
Now, perhaps if they had spent $29,000,000,000,000 by giving 7Bn people $4,142.85 each – we WOULD have a better economy now – but that's not what happened at all, is it? Instead, 70,000 people and corporations (the top 0.0001%) got an average of $414M each while the other 99.9999% of us, especially the bottom 90% actually are now worse off than when the Central Banksters decided to meddle in our affairs in the first place.
The rich are indeed getting stunningly richer with the Forbes 400 (richest Americans) AVERAGING $800M gains in 2013 as the stock market (where most of their money is) rose over 30%. Again – AVERAGE gains of $800M per Billionaire! Once you get past #50 on the list (Google's Eric Schmidt with $8.3Bn), that's AT LEAST 10% of their total net worth added in a single year!
As I said in our recent trade review "Thank You Sir, MAY I Have Another", if they are just going to keep giving away money like this – we're going to just have to keep taking it (through our many bullish trade ideas) but, at some point, the music will stop and you'd BETTER be able to find a chair fast!
There's a very good reason the Corporate Media is constantly telling you how bad "class warfare" would be - BECAUSE THEY ARE ALREADY WINNING THE WAR AND YOU ARE NOT EVEN FIGHTING!!!
Like any good game of musical chairs, we have no idea when the music is going to stop, so we all have to keep dancing around like nothing is wrong until it does. As I pointed out yesterday, it's very easy to pay $150Bn for Amazon (at $327 per share) with money you just printed because…
by Phil Davis - May 17th, 2014 8:33 am
Would you like a 20x return on your investments?
In our Weekly Webcast on Tuesday (replay available here), we discussed various ways you can make a nice retirement nest-egg for yourself as well as various stock and option strategies (and 9 new trade ideas to go with them) that can put you on the road to becomming a millionaire.
Unfortunately, none of these are "instant" – these are not lottery tickets but long-term, time-tested strategies that can give you everything you ever dreamed of – IF you are willing to work for it.
These same strategies can also be applied to generate an income off your retirement savings without digging back into your principal each year.
We don't sell magic beans at Philstockworld, we teach our Members HOW to invest and put them on the road to wealth but it requires hard work and dedication on your part. If you are willing to make the effort, though, we are happy to show you how to make the climb.
In the Webinar, we discussed turning $100,000 into $1M, $2M and $5M over various periods of time but we neglected to talk about strategies for people starting our with smaller amounts, say $25,000 to start. We do run a virtual $25,000 Portfolio for our Members – to identify simple trades that require no margin and no day-trading (you really can't day-trade with $25,000 and, most likely, you have a job to do during the day anyway!) yet are still able to generate nice returns.
Before we start, I want to get you comfortable with the math involved. Money Chimp has a very nice Compound Interest Calculator which I'm using for my calculations and on the left is the model for the base premise of this article. Follow the link and play with it so you can see how different strategies affect your Future Value.
by Option Review - September 30th, 2013 5:55 pm
by Option Review - July 1st, 2013 8:19 pm
Today’s tickers: BBY, GMCR & EBAY
by Option Review - September 10th, 2012 2:43 pm
Today’s tickers: GMCR, INTC & SHFL
GMCR - Green Mountain Coffee Roasters, Inc. – Weekly options on the specialty coffee company and provider of Keurig single-cup brewing systems are active this morning with shares in Green Mountain up nearly 10% in the first half of the session to touch $30.49, the highest the shares have traded since May. Green Mountain’s shares are moving higher for a third consecutive session, having rallied sharply last week, and some options traders appear to be positioning for the price of the underlying to extend gains this week. Bullish bets are on the rise at the Sep. 14 ’12 $29 and $30 strikes, the two highest strike prices currently available in GMCR weekly options. Traders exchanged upwards of 1,100 in-the-money calls at the $29 strike, and appear to have purchased most of the volume for an average premium of $1.28 apiece. Weekly call volume is heaviest up at the $30 strike where more than 2,200 lots changed hands against open interest of 817 contracts. It looks like most of the $30 calls were purchased this morning for an average premium of $0.91 each. Traders long the $30 calls may profit at expiration in the event Green Mountain’s shares settle above the average breakeven price of $30.91. Shares in the seller of K-cups are still down nearly 75% since this time last year. Overall options volume on GMCR is greater than usual, with 60,000 contracts in play as of midday in New York versus the stock’s average daily options volume of around 18,500 contracts.
INTC - Intel Corp. – Shares in chip giant, Intel Corp., are getting hit today on concerns the company may need further cuts to guidance following Friday’s downward revision to its third-quarter revenue forecast. The stock is down 3.3% this afternoon to stand at $23.40 as of 12:30 p.m. ET, adding to a more than 4% drop in the price of the underlying on Friday. Trading traffic…
by Option Review - July 6th, 2012 12:57 pm
Today’s tickers: EMC, MWW & GMCR
EMC - EMC Corp. – Bearish positioning in EMC Corp. options is on the rise this morning as shares in the provider of enterprise storage systems, software and services move 5.5% lower to $23.85. EMC and other software providers are getting hit hard today after Informatica Corp. reported preliminary second-quarter earnings and revenue that missed estimates amid a challenging macroeconomic environment, particularly in Europe. A disappointing jobs number is also pressuring U.S. equities on the final trading session of the week. One strategist appears to have purchased disaster insurance on EMC Corp. within the first five minutes of the opening bell this morning. The Jan. 2013 $16 strike put changed hands more than 2,000 times against open interest of just 30 contracts and it looks like nearly all of the puts were purchased for an average premium of $0.29 apiece. The put options may increase in value over the second half of the year should shares in EMC continue to pull back. The price of the underlying is still positive for the year, up 8.8% year-to-date; however, the stock has come off sharply in recent months, down 20.5% from a 52-week high of $30.00 set at the end of March. The $16 puts are profitable at expiration next year in the event EMC’s shares tumble 34% from the current level to breach the average breakeven price of $15.71. This breakeven point is well below the stock’s 52-week low of $19.84, though well above the stock’s financial crisis low of $8.25. Near-term bearish action is also evident in the Aug. $23 puts where some 3,300 puts were picked up for an average premium of $0.70 apiece in the first half of the trading session. EMC Corp. reports its second-quarter results ahead of the open on July 24th.
by Option Review - June 11th, 2012 1:38 pm
Today’s tickers: GMCR, PBI & FMCN
GMCR - Green Mountain Coffee Roasters, Inc. – Shares in Green Mountain Coffee Roasters fell as much as 8.95% this morning to a fresh all-time low of $21.06 after grocery chain operator, Kroger Co., said it plans to sell private label coffee pods for Green Mountain’s Keurig single-cup brewing machine. GMCR’s patent on the K-cups expires in September. Green Mountain’s shares have lost 80.0% of their value since September 2011, when the stock touched an all-time high of $115.98. Options traders expecting shares in GMCR to extend losses snapped up puts on the Waterbury, Vermont-based coffee company. Short-term bearish bets are building in the June $21 strike put where some 2,500 lots were purchased for an average premium of $0.53 apiece. Strategists positioning for a more severe pullback in the price of the underlying picked up roughly 2,000 puts at the July $17 strike for an average premium of $0.66 each. Traders long the $17 strike put stand prepared to profit at expiration next month should shares in Green Mountain tumble 22.4% from today’s low of $22.06 to breach the average breakeven price of $16.34. Not all of the action in GMCR options is bearish today; some strategists appear to be buying out-of-the-money calls that could pay off if shares in GMCR stage a near-term rebound.
PBI - Pitney Bowes, Inc. – Heavier than usual options activity on Pitney Bowes pushed the provider of end-to-end mail stream solutions onto our ‘hot by options volume’ market scanner this morning, with the day’s volume up near 17,000 lots versus the stock’s average daily volume over the past 90 days of 6,713 contracts. Shares in PBI are currently down 1.0% to stand at $14.14 in early-afternoon trading. Almost all of the volume is in the July $13 strike put where more than 16,600 contracts changed hands against open interest of 4,205 contracts. It looks like most of the puts were sold for…
by Phil Davis - June 1st, 2012 8:26 am
Oh you people are such suckers!
You panic out of positions at rock bottom prices and you'll sit there like a deer in the headlights when we bounce back until we're already too high again and then you'll chase the top – only becoming fully invested after we've already exited. Don't blame me – I try to warn you, but no one listens to me.
This morning the markets are in full panic more and that's fine with us as not only are we still "Cashy and Cautious" but what did we tell you Wednesday morning? "TZA July $19/25 bull call spread at $1.50, selling $18 puts for $1.05 for net .45" along with EDZ at $17.23 and SQQQ at $51.80. SQQQ is at $53.79 (up 3.8%) and EDZ is $17.90 (up 3.9% and the TZA hedge is already at net .80, which is up 77% in just two days (so far) – now that's a hedge! When you have your hedges in place, THEN you can bottom fish with impunity and boy is the fishing good out there!
Today we get our Non-Farm Payroll numbers and there's a rumor out there that it's a big miss at 120,000 or lower. CNBC has been pretty much reporting it as a fact all morning and Europe is freaking out for that and many other reasons so I had occasion to look back at last month's NFP report, where we predicted it would be a miss with the the title: "The Blow Jobs Deal to the Market Could be Huge." That was 10% ago on our indexes are back to testing last week's lows, where we began to get bullish with our Twice in a Lifetime List of stocks that are back at their 2009 panic lows which we still like enough to sell puts in (giving us an additional 15-20% discount on initial entry).
That post capped off a week of bearish picks as we followed through with our plan to cash out into the April rally – it's those bearish profits we're now GAMBLING with as we bottom fish but, as noted above – we're hedging our bullish bets because there's no limit to how badly investors can freak out in the stock market – CASH remains KING!
by Phil Davis - May 3rd, 2012 7:52 am
Spain is up 2.3% this morning (7:30).
They are bouncing Europe with them despite a pretty poor round of trading in Asia (flat). Why? Because Spain's 3 & 5-year note sales "only" went for 100 more basis points than last time with the 3-years coming in at 4.04%, up 54% from last year's auction at 2.62% and the 5-year notes fetched 4.75%, up only 28% from the last 5-year note sale so YAY – Spain is fixed!!!
A whole $3.3Bn worth of bonds were sold or about 1/3 of 1% of what has been allocated through bailout programs to buy this junk but this autction is moving $80Tn worth of global equities up 1% ($800B) – talk about getting bang for your bailout buck!
I'm not going to get into how silly this is getting – we went through this all in '07 and '08 and the markets can be amazingly silly when they are in denial so we'll just go with the flow and pick up some nice upside momentum plays – as long as we can stay over 3 of 5 of our Big Chart's 2.5% lines and, if the pre-market move up holds – they should have no problem taking back 3,075 on the Nasdaq, 820 on the Russell and 8,200 on the NYSE. We're already over 1,400 on the S&P on yesterday's stick-save close and the poor Dow has 800 whole points to go before they catch up at 14,000 so it looks like the Dow will be the logical bullish bet if the other 3 indexes join the S&P over the line.
So IF the Dow is over 13,300 AND the other indexes are over our mark – how much money can we make playing for the Dow to catch up and make it to 14,000. 700 points is a lot, so there should be many ways to play this to our advantage. DIA $133 calls are $1 and have a delta of .44 so you capture 44% of a move up, which means a 100-point rise in the Dow will get you a 44% gain – it's a good trade to enter with tight stops below 13,300 as the Dow has 2 weeks and two days left to make those 800 points and that should be a cake-walk as they're already up 400 points in the last 7 sessions and, as we know from our friends at CNBC –…