Posts Tagged ‘MMR’

Testy Tuesday – How Many Times Will You Fall for the Same Thing?

Isn't this exciting!

The pre-markets are up 1% after a long weekend.  That hasn't happened since – two weeks ago!  Of course last Tuesday, we were jammed up as well and the Tuesday after Christmas, we were jammed up as well but THIS TIME – we're REALLY feeling it, right?  

The funniest thing is the way they have dozens of idiots saying all sorts of ridiculous things on CNBC and not one of them mentions even the vaguest hint of deja vu in what has been the most consistent pattern of late 2011, early 2012.

On this Dollar chart from Scott Pluschau, you can see the dives that are occasionally taken to goose the markets and we have another one this morning with the Dollar down 1%, making the 1% pop in the futures slightly less impressive when taken in context.  

This time may be different because, according to Friday's Legacy Commitments of Traders Report released by the CTFC, Commercial Traders are now net short on the Dollar to the tune of 59,023 to just 6,061 longs – about a 10:1 ratio that is EXTREME to say the least.  Non-Reportable, Non-Commercial Traders (ie. Speculators), on the other hand, are almost 10:1 the other way with 9,765 long contracts and just 1,390 shorts.  Reportable Non-Commercial Traders (Hedge Funds) fill out the rest of the longs with 52,644 long contracts against just 8,057 shorts.  

To some extent, hedge funds are also speculators and usually you would assume their bets are covered but that's kind of hard to see with a 7:1 long/short ratio.  Keep in mind that Commercial Traders are institutions with business reasons to hedge – they are not going to be flip-flopping their positions so they will NOT be buying Dollars just because they get cheaper.  So, if it all hits the fan and the Funds shift to short – we could get quite a tidal-wave of Dollar selling.

That's an odd sort of positions for the speculating class to be taking (super-long on the Dollar) considering the possibility of a highly dilutive quantitative event (QE3) in the very near future.   This is why we can't be gung-ho bearish – tempting though it may be and this is why every little rumor of Europe being "fixed" sends the Dollar flying down – there are no buyers – only nervous long Dollar holders.  

As you…
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Apollo Calls Remain Active on Mixed Views

Today’s tickers: APOL, ERTS, MMR, BAC & RIG

APOL – Apollo Group – A second day of gains for the online education company has shares touching $50 this morning. The start of July saw the company reach its 52-week low at $42.41. Option trading has centered on call options at the August $50 and $55 strikes but the picture is mixed. At the higher of the two strikes where only about 1,000 open positions exist, a chunk of 5,700 call options traded to the bid of 55 cents leading us to believe that this investor is raising his hand over the likelihood of exponential gains for the stock. This investor has either recently bought the stock in which case is writing a covered call, or is simply skeptical of a further 10% gain in Apollo’s share price from here. Buyers also showed up at the $50 strike expiring next month where buying rights to buy shares jumped from 13 cents to 56 cents. Call volume at the strike of almost 2,000 lots easily tops the prevailing open interest of 1,400 contracts.

ERTS – Electronic Arts – Despite a reduction in one the earnings projection from on analyst today, shares in the video gamer are higher at $14.91 possibly on account a groundswell of bullish call option activity. Investors awaiting an August 4 earnings report have spent premiums of around 40 cents to lock into bullish expectations in the event the company pulls off a decent report or perhaps a new title release in a dull climate for consumer demand. Option traders flocked to the August $16 strike, which currently shows odds of successfully landing in-the-money by expiration of one-in-three. Shares opened lower before today’s rally as call activity hit the screens. Options implied volatility has been on the rise of late and is again higher today by around 10% at 47%. That would indicate rising uncertainty surrounding prospects for the share price and is typical ahead of earnings.

MMR – McMoRan Exploration Co. – Investors didn’t stick around to ask many questions following the seventh consecutive quarterly loss at this oil and gas explorer. McMoRan specializes in ultra-deepwater exploration in search of oil and gas, which of course is not the most popular of investments targets following the Gulf of Mexico spill in April. McMoRan emphasized that it doesn’t operate in this segment but does operate in a high-risk operation…
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Goldman Sachs Bull Initiates Big Put Credit Spread

Today’s tickers: GS, NLC, TEX & MMR

GS – Goldman Sachs Group, Inc. – A large-volume credit put spread enacted on Goldman Sachs Group, Inc. in the first half of the trading session indicates one big options player expects the investment banking firm’s shares to rebound sharply ahead of May expiration. Goldman’s shares are up 3.25% to $149.92 as of 12:35 pm (ET). The investor responsible for the credit spread sold 18,250 deeply in-the-money puts at the May $170 strike for a premium of $21.95 apiece, and purchased the same number of puts at the May $120 strike for $0.63 each. The bullish options player keeps the hefty net credit of $21.32 per contract if shares of the underlying stock surge 13.33% from the current price to exceed $170.00 by expiration day. The short stance taken in May $170 strike put options implies the investor is willing to bear the risk that GS shares settle below $170.00 at expiration, and is therefore prepared to have shares of the underlying stock put to him at an effective price of $148.68 each in the event the put contracts land in-the-money at expiration. The overall reading of options implied volatility on the stock is down 13% to 44.45% as of 12:45 pm (ET).

NLC – Nalco Holding Co. – Shares of the global provider of integrated water treatment and process improvement services, chemicals and equipment programs jumped 18.27% earlier in the trading day to a new 52-week – and intraday – high of $29.25 on news the firm is ramping up production of a chemical to manage the spreading oil slick in the Gulf of Mexico. Bullish options investors rejoiced in Nalco’s share price rally by purchasing call options on the stock. Near-term optimists picked up 1,300 calls at the May $30 strike for an average premium of $1.00 apiece. Bullish sentiment spread to the June $30 strike where 1,400 call options were purchased for an average premium of $1.29 each. June contract call-buyers stand prepared to amass profits should shares of the underlying stock rally 14.75% over the current price ($27.27 as of 12:55 pm (ET)) to surpass the average breakeven point at $31.29 by June expiration day. The surge in investor demand for options on the stock combined with the massive rally in the price of the underlying shares lifted Nalco’s overall reading of options implied volatility 116.1% to 61.73% just…
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Testy Tuesday – Have the Markets Become Comfortably Numb?

"There is no pain you are receding
A distant ship's smoke on the horizon.
You are only coming through in waves.
Your lips move but I can't hear what you're saying.
When I was a child
I caught a fleeting glimpse
Out of the corner of my eye.
I turned to look but it was gone
I cannot put my finger on it now
The child is grown,
The dream is gone.
but I have become comfortably numb
." – Pink Floyd
 

I have a theory that the markets (and the American people in general) aren't irrational, they are simply shell-shocked after suffering a very traumatic group financial experience… 

To be shell-shocked is to be "mentally confused, upset, or exhausted as a result of excessive stress" and the most common symptoms are: Fatigue, slower reaction times, indecision, disconnection from one's surroundings, and inability to prioritize – That certainly sounds like our Congress doesn't it?  Combat stress disorder was first diagnosed in WWI, when 10% of the troops were killed and 56% wounded – far worse than had been experienced in previous wars.  Our current financial crisis has similarly affected more people than any previous crisis with almost everyone knowing someone who is bankrupt or lost their jobs or homes and almost no one escaped the carnage of the downturn without some financial damage. 

Combat fatigue may go a long way to explaining the severe drop-off in volume that has plagued the markets since March, with participation now down to 25% of where we were last January and that leaves us open to the blatant sort of market manipulation that Karl Denninger caught last week as well as the usual nonsense we get daily from HFT programs that drive the market with such precision that we are able to tell how the day is going to go by simply checking our hourly volume targets.  Here's a clip from CNBC where a floor trader discusses market manipulation as a fact of trading (2 mins in).  

As Nicholas Santiago points out on In The Money Stocks,   "January is usually a very high volume month, yet it has started off the New Year even lighter than the last two months of 2009.  Light volume markets are very difficult to
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Investor Initiates Volatility Play on Alcoa Ahead of Earnings

Today’s tickers: AA, GLD, MGM, NXY, INTC, NDAQ, ANDS, F, EEM, MMR & MELI

AA – Alcoa, Inc. – A short straddle play on the largest U.S. producer of aluminum today implies one investor anticipates Alcoa’s shares will remain range-bound through January’s expiration on Friday. Alcoa’s shares appreciated 1% to a new 52-week high of $17.20 (as of 12:40 pm EDT) during the session. According to one Bloomberg article, the firm may report fourth-quarter profits of $0.06 per share today. The sold straddle strategy also indicates the trader expects lower volatility in the price per share. Perhaps this individual is taking advantage of the typical drop in option implied volatility, which tends to accompany earnings announcements. The investor sold 10,000 calls at the January $17.50 strike for a premium of $0.59 apiece, and sold 10,000 puts at the same strike for about $0.69 each. The gross premium pocketed on the trade amounts to $1.28 per contract. The full $1.28 premium is safe in the investor’s wallet if the contracts expire worthless at a share price of $17.50 on Friday. The short call and put positions established today leave the investor vulnerable to potential losses in the event that Alcoa’s shares swing outside of the breakeven boundaries. Losses accrue if shares edge beneath the lower breakeven price of $16.22, or if shares rise above the upper breakeven point at $18.78.

GLD – SPDR Gold Trust ETF – Shares of the exchange-traded fund, which mirrors the price of gold bullion, may be up more than 1.25% to $112.82 today, but option traders populated various contracts with bearish strategies. A hefty put spread appeared in the June contract. The transaction involved the purchase of 17,000 puts at the June $105 strike for a premium of $3.50 each, marked against the sale of 17,000 puts at the lower June $95 strike for roughly $0.52 apiece. The net cost of the pessimistic play amounts to $2.98 per contract. If the investor is holding a long position in GLD shares, the spread provides downside protection in case shares slip beneath the breakeven price of $102.02, by expiration in June. Additional bearish indications appeared in the September contract. One trader initiated a risk reversal by selling 5,000 calls at the September $130 strike for $4.55 each, spread against the purchase of 5,000 puts at the lower September $100 strike for $3.60 apiece. GLD’s shares must trade beneath…
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Bulls singing Yahoo! in tune

Today’s tickers: YHOO, MMR, FXI, CI, HOG, KFT, NUAN & VMC

YHOO Yahoo!, Inc. – Shares have rallied by more than 2% to $14.32 amid news that the company is seeking buyers for its HotJobs employment website and has plans to cut some 200 to 500 jobs. Perhaps investor confidence has been bolstered by the past few months with CEO Carol Bartz at the helm as the stock has risen about 29% from its January 2009 low of around $11.03 up to today’s price. Option investors were seen taking bullish stances on the stock in the May and October contracts. At the May 15 strike price 26,600 calls were purchased for an average premium of 77 cents apiece. Shares would need to rise by another 10% in order to breach the breakeven point on the trade at $15.77 by expiration in May. Further along, the October 12 strike price witnessed the sale of 2,100 puts for a premium of 1.30 each. Some traders were showing caution in the May contract by purchasing 4,500 puts at the May 14 strike price for 99 cents should shares experience a decline in the near future. These put options would begin to provide downside protection or profits beginning at the breakeven point to the downside at $13.01. Option implied volatility on Yahoo! is up sharply today to 74% from yesterday’s reading of 67%.

MMR McMoRan Exploration Co. – Shares of the oil and natural gas company have declined slightly by less than 1% today to stand at $5.22. Despite the fall in share price, one investor does not see shares falling much further as he sold more than 14,000 puts at the May 5.0 strike price for a premium of 50 cents apiece. There is currently no open interest at the May 5.0 strike, and thus this trader accepts the 50 cent premium in exchange for bearing the risk that shares fall beneath the breakeven point to the downside at $4.50. Should shares plummet through the breakeven point, the investor would face increasing losses in proportion with declines in the stock. The puts traded today represent nearly 40% of the existing open interest on the stock of 38,000 contracts. While we do not know the exact motivation for the trade, we do know that shares need only decline by 13% from the current price for this investor to face losses.

FXI iShares FTSE/Xinhua China 25
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Zero Hedge

Norway Wealth Fund Assets Surge To Over $1 Trillion On Massive 70% Allocation To Equities

Courtesy of ZeroHedge. View original post here.

Last December we joked that the Norwegian sovereign wealth fund had responded to sinking returns and withdrawals required to fund budget deficits by allocating another $130 billion in assets to what appeared to be an already massively overpriced equity bubble in return for an extra 40bps of "expected average annual real returns." (see: Norway Buying $130 Billion In Global Equities As Sovereign...



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Phil's Favorites

In Wake of Slumping Car Sales, Ford Will Idle 5 North American Plants: What? No Hurricane Bounce?

Courtesy of Mish.

As initially reported by the Census Department, motor vehicle sales were 1.2% in July following a 0.9% gain in June. At the time, I commented, “This is unbelievably bizarre in the face of actual auto sales reports.”

The Census Bureau revised sales estimates much lower in September as noted in Retail Sales Unexpectedly Decline, Huge Negative Revisions in June and July: Reflections on “Bizarre” Sales Reports.

Today we learn ...



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Digital Currencies

Cryptocurrency Concentration - Just 4% Own Over 95% Of Bitcoin

Courtesy of ZeroHedge. View original post here.

Bitcoin has been making a lot of news lately. The cryptocurrency shot up in value by over 200% in 2017, making many people fear that the market is in a bubble. Last week, China...



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Chart School

Minor Changes: Yesterday's and Weekend Comments Remain Valid

Courtesy of Declan.

I don't want to overplay today's action as little changed in the broader scheme of things. Days like today are welcomed and help shape up swing trades for those trading in near term timeframes.

The tight doji in the S&P could be used for a swing trade; buy a break of the high/short loss of low - stop on flip side. High whipsaw risk but look for 3:1 risk:reward and maybe trail stops if deciding to go with partial profits.


Tech averages are still set up for a breakout. While not an ...

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ValueWalk

FBN Beats CNBC Even During Delivering Alpha Week

By VWArticles. Originally published at ValueWalk.

Fox Business Network ratings for the week of September 11th – September  15th.  FBN beat CNBC even during their big annual Delivering Alpha Conference which is one of the biggest investment conferences of the year with Lou Dobbs leading the pack – another big win for FBN – see more details below

FOX BUSINESS NETWORK SWEEPS CNBC IN BUSINESS DAY FOR EIGHTH TIME THIS YEAR

]]> Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your de...



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Insider Scoop

Considering Implications For Hasbro And Mattel From The Toys 'R' Us Bankruptcy

Courtesy of Benzinga.

Related HAS Toy Stocks Mostly Lower After Toys 'R' Us Confirms Bankruptcy Watch These 8 Huge Put Purchases In Tuesday Trade ...

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Members' Corner

"Citron Exposes Ubiquiti Networks"

What do you think?

"CITRON EXPOSES UBIQUITI NETWORKS" 

Does Ubiquiti Networks (NASDAQ:UBNT) actually have real products that sell to consumers? Of course! So did Valeant and WorldCom, but that does not stop its financials from having every indication of being completely fraudulent.

Citron will detail a series of alarming red flags and detail how Ubiquiti Networks is deceiving the investing public.

Read the full report here.

...

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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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Biotech

Can low doses of chemicals affect your health? A new report weighs the evidence

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

 

Can low doses of chemicals affect your health? A new report weighs the evidence

Courtesy of Rachel ShafferUniversity of Washington

Assessing the data. LightField Studios/shutterstock.com

Toxicology’s founding father, Paracelsus, is famous for proclaiming that “...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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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.

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Just click here at 1 pm est and join in!

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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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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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