Posts Tagged ‘HON’

Bullish Options Trade On American Eagle Looks For Shares To Extend Run

 

Today’s tickers: AEO, HON & GDP

AEO - American Eagle Outfitters, Inc. – A large long-term bullish options play on teen retailer, American Eagle Outfitters, Inc., near the open looks for shares in the name to potentially reach levels not seen since 2007 by January 2014. Shares in American Eagle soared in 2012, rising approximately 90% since the first week of the year to touch a four-year high of $23.94 back on September 19th. Though off their highest level of the year, shares in AEO increased 2.6% this morning to $21.56 after the stock was rated new ‘Market Outperform’ with a 12-month target share price of $27.00 at Avondale Partners LLC. A three-legged options combination spread initiated on AEO at the start of the session prepares one options player to profit should the price of the underlying continue to push higher during the next calendar year. The strategist responsible for the single-largest transaction in American Eagle options today appears to have sold 5,000 puts at the Jan. 2014 $18.5 strike in order to substantially reduce the cost of buying a 5,000-lot Jan. 2014 $22/$30 call spread. Net premium paid to establish the position amounts to $0.20 per contract and prepares the trader to make money above an effective breakeven price of $22.20. Maximum potential profits of $7.80 per contract are available on the spread should American Eagle’s shares gain 40% to top $30.00 by expiration in January 2014. The trader could wind up having 500,000 shares of the underlying stock put to him or her at expiration in the event of a sharp pullback in shares of the high-flyer to the $18.50-level and below.

HON - Honeywell International, Inc.– Shares in diversified industrials company, Honeywell International, Inc., are up 0.15% as of 11:50 a.m. in New York to stand at $61.53, adding to gains realized earlier in the week after the company agreed to take a 70% stake in Tulsa, Oklahoma-based Thomas Russell Co. for…
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Monday Market Movement – Trying to Get Bullish

We are still trying to get more bullish.

Over the weekend we set a new, higher set of levels for our Big Chart on the assumption that our breakout levels hold up and our new Must Hold lines become Dow 13,600 (not there yet), S&P 1,360, Nasdaq 3,000, NYSE 8,000 and Russell 800, which means it's now up to the Dow and Nasdaq to continue to show leadership if we're going to be having a rally good enough to get us to add our next 10 bullish plays.

I already added 2 aggressive upside trade ideas on XLF and SPY in the weekend post and last week we already looked at WFR, X, BAC, GLW, BBY, CHK, AAPL, AA, and BA but we also added a new Long Put List (Members Only), which had 19 stocks that we thought were good downside horses to ride if, per chance, we fail to hold 3 of our 5 breakout levels.  

It shouldn't be too much to ask – IF this is a real bull market.  We've been extremely skeptical up to this point and, Fundamentally, I still have my doubts but Technically, we can't keep fighting the tape so were drawing a line in the sand for Mr. Market to cross and, if it does so, we're happy to play along.  If it fails to do so, however, well – we've already made those bets!  

Our aggressive take on the Dow is the result of analyzing the 5 components that were replaced since the crash with MO and HON thrown out for BAC and CVX in Feb of 2008, AIG replaced by KFT in Sept 2008 and C and GM replaced by CSCO and TRV in June 2009, causing a massive distortion in the index, meaning 16,000 is the old 15,000, possibly even lower:  

The Nasdaq is similarly distorted by AAPL, who are up 500% since 2009 and when a stock that is 11.5% of an index is up 500%, that stock alone causes the index to go up 57.5%, which is why we now call it the AAPLdaq.  The AAPLdaq itself is "only" up 100%, which means the ENTIRE rest of the index is lagging with a 42.5% contribution – those who tell you that tech is somehow loved again are fooling themselves
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Will We Hold It Wednesday – Nasdaq 2,603 Edition

Watch the Nasdaq.

That's the index we need to catch up to the Dow now that the S&P is halfway to goal at 1,297 (from our Must Hold line at 1,235).  The Dow is in La La Land, led by MCD (up 31%), IBM (up 26%), PFE (up 24%), HD (up 20%) and KFT (up 20%) while this year's Dogs of the Dow are BAC (down 59%), AA (down 43%), HPQ (down 39%)  and JPM (down 22%).  

While the losers may seem to outweigh the winners, that's not how it works as the Dow is price-weighted so BAC dropping from $14 to $5.50 "only" costs the Dow about 68 points (roughly 8 points for each Dollar), IBMs rise from $145 to $185 added a whopping 320 points.

So a 26% rise in one component and a 59% drop in another nets out to a gain of 252 points!  At the beginning of the year, they had roughly the same market cap ($150Bn) but IBM has gained $70Bn and BAC has lost $100Bn which, of course, translates into a net gain of 2% on the entire Dow – BECAUSE IT IS THE STUPIDEST INDEX ON EARTH!  

Our Members, of course, know this.  I wrote "DJIA: The Most Useless, Overused Tool on the Planet" back in 2006, when GM was still part of the Dow so no need to rehash it all here other than to mention the fact that a 30-component index has made 5 substitutions in the 5 years since I wrote that article only serve to highlight how ridiculous it is to use the Dow to draw long-term conclusions.  The Dow is manipulated because it's easy to and Uncle Rupert sits with the other Masters of the Universe to decide how to use this headline tool to make things look as good as possible in the US markets.  

 

That's why CSCO and TRV replaced C and GM in June of 2009.  C was at $28.80 and is down a bit, GM went BK from $45 (which would have been a 360-point loss in the Dow) while CSCO was disappointing but essentially flat and TRV is up $20, adding another 160 points so a 520-point swing (5%) on those substitutions alone.  In September
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Fully “Fixed” Friday – Extend and Pretend Edition

SPY 5 MINUTEAll fixed!

Greece is getting another $229Bn at 3.5% with about 30 years to pay it from the EU (ie. Germany and France) and private bond-holders will share about 1/3 of the pain by "voluntarily" renegotiating their own notes.  Sounds like a really great offer, right?  BUT WAIT, THERE’S MORE!  Another $630Bn of already promised emergency aid has now been places into a very slushy fund that will now allow the EU to throw money at any nation that so much as sneezes – WHETHER OR NOT THEY ASK FOR ASSISTANCE.  This will allow them to play economic Whack-A-Mole, putting out all the little Euro-zone fires until that money runs out (about 6 months at the EU’s current burn rate).

All this fantastic news from Europe has sent the Dollar down to test the 74 line and that was down from 75.37 just ahead of yesterday’s open and that’s a 1.8% drop so we would expect our indexes to go up at least 1.8% – BUT – none of them did.  In fact, the Nasdaq only gained 0.72% and the Russell was up 1.07% and the Dow was up 1.21% and the S&P was up 1.35%.   The NYSE, which had been our perennial laggard, did the best yesterday – gaining a close, but still no cigar 1.57%.  

Will we make it up today or is this an indication that things may not be quite so good as they seem?  After the close yesterday, I did a news round-up for our Members and there is still plenty to worry about and we took a stab at some SPY Weekly (today) $135 puts at .79 for our aggressive $25K Virtual Portfolio on the off-chance they "fix" the US debt ceiling and accidentally make the Dollar strong again.  At the moment, we are still playing our short lines in the futures, where we’ve been scalping nickels and dimes since my 3:23 am Alert to Members (if you are not a Member, you can sign up here), where I said:  

I like shorting the Futures here:  S&P (/ES) at 1,346, Nas (/NQ) 2,415, Dow (/YM) 12,720 and Rut (/TF) 842.6 – as long as 74.20 hold on the Dollar, we should get a bit of a sell off so these are levels to look for as the Dollar heads


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Wednesday: Wiping Out All of 2011′s Gains!

S&P 1,260.  That's the line we need to hold.

That's where we started the Year on January 3rd and we finished that day at 1,271, beginning a fine tradition of making almost all of our gains on the first day of the month, continuing a very disturbing (and very fake) year-long trend that I am calling "sell the next day (of the month) and go away." (chart by Bespoke).

Notice that this trend became very disturbing at the same time Uncle Ben announced his fabulous QE2 plan that showered money on his fellow Banksters according to a nice, predictable schedule that allowed them to lever up their investments to inflate stocks and commodities, trapping index fund investors (especially the working poor who make monthly contributions to IRA and 401K accounts in a nice, predictable and controllable fashion).  It's a simple plan, index fund managers get your pension money at the end of the month, they are required to buy baskets of stocks to balance their funds and that action can be manipulated by clever bankers who jack up the prices and then sell into the fake demand they created – effectively stealing tens of Billions each month out of the paychecks of working Americans.  Just another one of those great crimes they commit where they steal a little bit of money from everyone, every day.  

Speaking of robbing from the rich to give to the poor (see "The Dooh Nibor Economy"), it's time we said happy 10th anniversary to the Bush/Obama tax cuts that have, as Barry Ritholtz put it: "driven the balanced budget he inherited from President Clinton deep into the red."  So deep in the red, in fact, that even now Congress is still debating about extending the $14.5Tn deficit that the Congressional Budget Office says will double over the next 10 years if these cuts remain in place.  

That's right, those same tax cuts that are "off the table" in negotiations in Congress are, other than war spending, the sole cause of our nation's deficit.  This country does not have a spending problem, it has a collecting problem!  As Mike Konczal, a research fellow at the Roosevelt Institute, noted: "It's not like this has unleashed a wave of productivity, or better incentives, or increased work output. It's mostly just rich
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Straddle Seller Foresees Range-Bound Shares for Flextronics

Today’s tickers: FLEX, NXY, XRT & HON

FLEX - Flextronics International, Ltd. – A sizeable short straddle initiated on Singapore-based Flextronics International this morning indicates one options player expects to see limited fluctuations in the price of the underlying shares through January 2011 expiration. Shares in Flextronics, which manufactures thousands of electronic devices, are up 0.45% at $6.90 as of 12:05 pm after Singapore reported a surge in exports in the month of October. The straddler sold 10,000 calls at the January 2011 $7.5 strike for a premium of $0.26 each in combination with the sale of 10,000 puts at the same strike for a premium of $0.81 a-pop. Gross premium pocketed on the straddle amounts to $1.07 per contract. The investor keeps the full amount of premium received if FLEX shares settle at $7.50 at expiration. Short positions taken in both call and put options expose the trader to losses in the event that shares shift significantly away from the selected strike price. Losses start to amass if shares rally above the upper breakeven price of $8.57, or if shares slip beneath the lower breakeven point at $6.43 ahead of expiration. Flextronics’ overall reading of options implied volatility is up 8.3% at 41.57% as of 12:10 pm.

NXY - Nexen, Inc. – Contrarian trading in longer-dated call options on the Canadian oil and natural gas company appears to be the work of an optimistic strategist expecting Nexen’s shares to rebound ahead of June 2011 expiration. Nexen’s shares are currently down 5.4% to stand at $21.00 as of 11:35 am in New York. At an investor conference this morning the firm’s CEO said Nexen will likely focus on developing existing holdings rather than pursuing additional acquisitions. Yesterday Nexen revealed plans to spend roughly $2.4 to $2.7 billion next year to promote…
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Zero Hedge

America's Coldest Cities... And GDP

 

America's Coldest Cities... And GDP

Courtesy of Zero Hedge

As Q4 GDP data looms this week, we are reminded just how important 'weather' is in the narrative of economic growth in America.

Q1 may fare far worse as the last few weeks saw the East Coast of the United States endure a brutal winter storm which caused the deaths of 16 people. It also led to widespread power outages and the cancellation of thousands of flights.

As Statista's Niall McCarthy notes, thick snow is common in the Northeast during the long and dark wint...



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Phil's Favorites

Why Does Momentum Investing Work?

 

Why Does Momentum Investing Work?

Courtesy of Cullen Roche, Pragmatic Capitalism

When you’re choosing an equity market allocation I generally prefer to keep things simple – just buy a low fee global market cap weighted portfolio and call it a day. If you build your hedges (bonds or whatever) around that slice correctly then your asset allocation will match your risk profile and you’ll have a reasonably good probability of having constructed a plan that you’ll stick with and will work just fine for you over long periods of time.

One of the reasons why I like a market cap weighted stock allocation is because it’s a momentum strategy. Now, don’t get me wrong. I’ve ...



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ValueWalk

Hugh Hendry - The Arrogance And Conceit Of A Well-Formed Argument

By VW Staff. Originally published at ValueWalk.

This conversation with Hugh Hendry didn’t make it into the final cut of his recent Real Vision interview, so you’ll sure as hell want to see what did. Watch the Grant Williams series on Real Vision and become a great investor: http://rvtv.io/2Bncb0x

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

In the second of his new flagship series, Grant Williams travels to Saint Barthélemy in the Caribbean for a conversation with the founder of Eclectica Asset Management,...



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Chart School

Nasdaq Hits 15% Historic Price Action Highs as S&P Enters 10% Extreme Zone

Courtesy of Declan.

The Nasdaq joined the S&P at historic highs as it hit the 15% zone of historic price extremes (relative to its 200-day MA). The S&P went a step higher as it touched the 10% zone of historic highs; i.e. it trades at levels above 90% of historic price action dating back to 1950 - a sign there isn't much left to this rally. If it makes it to 2,874 it will be in the 5% zone, a zone last seen in February 2011.


The Nasdaq continued to accelerate past its most recent upside channel on higher volume accumulatio...

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Digital Currencies

Cryptos Are Crashing Again...

 

Cryptos Are Crashing Again...

Courtesy of Zero Hedge

From South Korean bank blocks to Bulgarian ponzi scheme shutdowns and a Bali bitcoin crackdown, you can take your pick as to what is driving the sudden plunge in cryptocurrencies this morning. Ethereum is back below $1000, Bitcoin is back to a $10k handle, and Ripple is down 30% from the weekend's highs.

Weakness began around 6amET but really accelerated at around 8am ET...

With Bitcoin and Ethereum breaking key support levels..

The catalyst for the move is uncertain at best with numerous headlines over the weekend:

OneCoin offices ...



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Insider Scoop

34 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Forward Industries, Inc. (NASDAQ: FORD) shares surged 137.9 percent to close at $2.95 on Friday after the company reported the acquisition of Intelligent Product Solutions.
  • NuCana PLC (ADR) (NASDAQ: NCNA) shares climbed 41.55 percent to close at $20.51 as the company announced plans to initiate a Phase 3 study of Acelarin in front-line advanced biliary tract cancer.
  • New Age Beverages Corporation (NASDAQ: NBEV) shares jumped 22.5 percent to close at $3.92 on Friday.
  • ...


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Biotech

How Alzheimer's disease spreads throughout the brain - new study

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

How Alzheimer's disease spreads throughout the brain – new study

Courtesy of Thomas E CopeUniversity of Cambridge

Harmful tau protein spreads through networks. Author provided

Alzheimer’s disease is a devastating brain illness that affects an estimated 47m people worldwide. It is the most common cause of dementia in the Western world. Despite this, there are currently no treatments that are effective in curing Alzheimer’s disease or preventing its relentless progressio...



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Mapping The Market

Trump Admin Bans CDC From Using Words Like 'Science-Based,' 'Diversity'

By Jean-Luc

These are the policies of a theocracy, not a modern democracy:

Trump Admin Bans CDC From Using Words Like ‘Science-Based,’ ‘Diversity’

The Trump administration has prohibited the Centers for Disease Control and Prevention (CDC) from using words like “science-based,” “diversity,” and “transgender” in their official documents for next year’s budget, according to the Washington Post.

Senior CDC budget leader Alison Kelly met with the agency’s policy analysts on Thursday to announce ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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