MNST - Monster Beverage Corp. – Monster Beverage Corp. shareholders have had a rough week; the stock fell 10% yesterday following the company’s second-quarter earnings report and fell nearly 10% today to as low as $55.30 after Monster disclosed a subpoena from a state attorney general. According to the firm’s 10-Q the subpoena was received in July 2012 “in connection with an investigation concerning the Company’s advertising, marketing, promotion, ingredients, usage and sale of its Monster Energy® brand of energy drinks.” August expiry options activity suggests traders anticipate the stock may continue to selloff next week. The Aug. $55 strike put is the most heavily traded of the front month contracts so far today, with around 3,700 lots in play as of 12:10 p.m. ET. It looks like most of the $55 puts were purchased for an average premium of $1.01 apiece, thus positioning buyers to make money beneath the average breakeven price of $53.99. Traders betting on a more substantial pullback in Monster’s shares in the near term picked up around 1,000 put options at each of the Aug. $50 and $47.5 strikes, paying average premiums of $0.25 and $0.14 per contract, respectively. Traders betting against the likelihood of a rebound in MNST shares next week wrote call options at the Aug. $57.5 and $60 strikes, pocketing average premiums of $1.26 and $0.37 on the contracts. Call sellers keep the premium as long as the contracts are out-of-the-money at expiration. Overall options volume on the stock is well above the 90-day average daily volume, and roughly two puts are trading for each single call option in play.
MHP - McGraw-Hill Companies, Inc. – Trading traffic in far out-of-the-money call options on McGraw-Hill may be the work of an investor positioning for shares in the publishing giant and owner of Standard & Poor’s to rally to the highest since 2007. Shares in MHP are up 0.85% today at $49.12…
I recently took a look at changes in the number of shares outstanding of the SPY ETF as a sentiment measure. When traders are bullish, shares are created in the ETF; when they are bearish, shares are redeemed. This is a useful sentiment gauge, because it...
Earlier today I posted an update on the January Advance Report on December Durable Goods New Orders. This Census Bureau series dates from 1992 and is not adjusted for either population growth or inflation.
Let's now review Durable Goods data with two adjustments. In the charts below the red line shows the goods orders divided by the Census Bureau's monthly population data, giving us durable goods orders per capita. The blue line goes a step further and adjusts for inflation based on the Producer Price Index for All Commodities, chained in today's dollar value. This gives us the "real" durable goods orders per capita and thus a more accurate historical context in which to evaluate the conventional reports on the nominal monthly data.
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Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.
In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart...
An interview with John Ehlers of Stock Spotter and Mesa Software
Ilene: John, in our last discussion about trading systems in general and yours in particular (Can trading be reduced to cycles, stresses and vibrations?) you mentioned Monte Carlo simulations and their use in measuring performance. Can you explain more about how you measure the performance of a trading system?
John: Let's start with comparing trading with gambling. The two have several things in common. In both ...
So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.
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PSW Members - well, what a year for biotechs! The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down! The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months. What could go wrong?
Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.
Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies. A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...
Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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