Posts Tagged ‘MTB’

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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Which Way Wednesday: Through the Roof or Smashed into a Thousand Pieces?

 

GRANDPA JOE: But this roof is made of glass. It’ll shatter into a thousand pieces. We’ll be cut to ribbons!

WILLY WONKA: Probably

Is today going to be the day?  After pressing against our breakout levels for a week, today do we should finally have the gas to get over the top or will our Must Hold levels keep acting like a solid barrier?  Oddly enough, I was asking the same question on August 30th, when I asked if we were "Breaking Higher or Dressing Windows?"   My comment from that morning works for today as well:  

No way to slow down.  That line from Tull’s "Locamotive Breath" keeps playing in my head as I look at these rumor-driven markets and contemplate that we MUST keep going higher – or we will fall.  On the whole, that’s not generally a winning long-term investing premise BUT – it does so happen to be the entire principal on which space travel is based so let’s not discount it entirely.   

Willy Wonka understood stock market physics, there had to be enough power to get through that overhead resistance or it was going to be a very painful test of the top (like the one we had in August).  Since our July dip, we’ve come back for another try at our Must Hold lines 4 times but the volume has been substantially lower than it was in July, leading us to believe it is only TradeBots, and not Oompa Loompas, who are buying this market. 

Can TradeBots alone give
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Defending Your Virtual Portfolio With Dividends – Q4 (Members Only)

In uncertain markets, dividends can give you a critical investing edge.

As you can see from the chart on the left, just mindlessly investing in dividend-paying stocks can give you more than a 2:1 annual advantage in your investments

Of course, here at PSW, we teach the art of selling options premiums – something that turns virtually any stock into a "dividend" payer.  For example, MSFT is only a small, 2% dividend-payer but a fairly solid cash-machine of a stock that we don't feel is likely to go bankrupt overnight so it makes for a nice safe staple in a long-term virtual portfolio.  But MSFT is also a very poorly-run company that hasn't grown in 20 years but we can make it a much more interesting stock by simply selling covered calls.

For example, in our August edition of Dividend Payers,  we looked at MSFT for $24.23 and we sell the Sept $24 calls for .77.  This lowered our effective basis to $23.46 and selling the call putus in no special danger – we simply agreed to sell MSFT for $24 on expiration day in September (the 17th).

The stock was called away from us, and we made a .54 profit or 2.3% of our net $23.46 cash investment in less than 30 days.  That works out to a 26% annualized ROI and we had an opportunity (as we had expected) to buy the stock again and again at $24 on Oct 4th and 5th and sell the November $24 calls for .90 for a net $23.10 re-entry and ANOTHER 3.8% GAIN if we are called away at $24 or greater on Nov 19th.  Doesn't that beat waiting a whole quarter for your 1% dividend checks?  

Of course, you can optimize all this with timing and we favor stocks that are on sale – this is just a very simple example of how our most basic options strategy can drastically boost your annual returns on any stock in your virtual portfolio.

Let's say you don't want to mess around with MSFT every month.  You could have simply sold the 2012 $22.50s for $4.40 (also suggested in the August post), that dropped your net entry from $24.23 to $19.83…
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Bullish and Bearish Traders Descend on Citrix Systems, Inc. options

 Today’s tickers: CTXS, MTB, HERO & TSYS

CTXS - Citrix Systems, Inc. – Shares of the software company fell as much as 11.2% this morning to touch an intraday low of $62.16 following cautious words from the firm’s CEO regarding its new product launch. Citrix Systems’ shares are currently down 9.10% at $63.62 just before 12:00 pm ET. Initially, options investors reacted by initiating bearish transactions, but it looks like contrarian players swooped in to purchase bull call spreads in order to position for shares to reverse course ahead of December expiration. Bullishness on the stock may have followed Pacific Crest’s comment that Citrix’s third-quarter is likely to be ok. The company reports its results for the third-quarter after the market closes on October 21, 2010. Bears were quick to purchase put options and sell out-of-the-money calls in the October contract. Investors picked up 1,000 puts at the October $60 strike for a premium of $0.90 each. Put buyers at this strike make money if CTXS shares fall 7.1% from the current price of $63.63 to breach the effective breakeven point to the downside at $59.10 by expiration day. Traders also purchased 1,500 puts at the October $62.5 strike at an average premium of $1.39 a-pop, which yields an average breakeven price of $61.11. Pessimists sold some 1,100 calls at the October $67.5 strike for a premium of $0.76 each, and shed 4,700 calls at the higher October $70 strike to receive an average premium of $0.49 apiece. Call sellers keep the premium received on the sale as long as shares of the underlying stock fail to rally above the strike prices described through October expiration. Investors expecting Citrix Systems’ shares to recover by December expiration purchased call spreads, buying 5,000 calls at the December $65 strike for an average premium of $4.70 each, and selling the same number of calls at the December $70 strike at an average premium of $2.59 apiece. Average net premium paid to initiate the spread amounts to $2.11 per contract. Thus, the medium-term bullish players are poised to profit should shares surge 5.5% over the current price to surpass the effective breakeven point at $67.11 by December expiration day. Maximum potential profits…
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Options Strategist Portends Big Rebound at Anadarko by Jan. 2011 Expiration

Today’s tickers: APC, FSLR, SFY, V, XRT, NFLX, DV, MTB, SWY & SNE

APC – Anadarko Petroleum Corp. – Trading in longer-dated call options on Anadarko Petroleum this afternoon indicates one options strategist is expecting shares of the independent oil and gas exploration and production company to rebound significantly by expiration in January 2011. APC’s shares rallied 1.5% at the start of the trading session to reach an intraday high of $43.70. However, as the day progressed, shares lost momentum and are currently down 3.90% on the day at $41.38 with 45 minutes remaining before the closing bell. The long-term bullish player appears to have enacted a ratio call spread, buying 2,000 in-the-money calls at the January 2011 $40 strike for a hefty premium of $10.30 apiece, and selling 4,000 calls at the higher January 2011 $55 strike for a premium of $3.60 each. The net cost of the spread amounts to $3.10 per contract. Therefore, the trader is poised to profit should shares of the underlying stock rebound 4.15% to surpass the effective breakeven price of $43.10 by January expiration. The investor stands ready to accrue maximum potential profits of $11.90 per contract in the event that APC’s shares surge 32.9% from the current price of $41.38 to settle at $55.00 by expiration day.

FSLR – First Solar, Inc. – Bullish options players dominated activity on the manufacturer of photovoltaic solar power systems today with shares of the underlying stock rallying sharply by as much as 5.98% this morning to an intraday high of $125.88, the highest the stock has been in one month. The maker of solar modules was raised to ‘outperform’ from ‘neutral’ at Credit Suisse today where analysts upped their target price on the stock to $150.00 from $110.20. First Solar’s shares tapered off by late afternoon to stand 3.50% higher on the day at $122.93 just before 3:30 pm (ET). Investors positioning for continued upward movement in FSLR’s shares by June expiration purchased at least 1,300 calls at the June $125 strike for an average premium of $1.72 apiece. Call buyers at this strike price make money only if shares of the underlying stock trade above the average breakeven price of $126.72 by expiration tomorrow. Buying interest spread to the higher June $130 strike where roughly 1,100 call options were purchased for an average premium of $0.42 per contract. First Solar’s share price would need…
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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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Option Traders Remain Skeptical Over Real Estate Shares

Today’s tickers: IYR, CIEN, FXI, MTB, TGT, MTW & HURN

IYRBearish option traders honed in on puts in the January 2010 contract of the U.S. real estate ETF. Such positioning indicates that the current 1.5% rally in shares to $38.17 today will not last. Pessimists picked up 10,000 puts at the in-the-money January 40 strike price for 6.23 apiece and spread the purchase against the sale of 20,000 puts at the lower January 25 strike for an average premium of 86 cents each. The net cost of the ratio put spread amounts to 4.51 and yields maximum potential profits of 10.49 per contract if the IYR plummets 35% to $25.00 by expiration in January. Shares must decline 7% from the current price before profits begin to accumulate beneath the breakeven price of $35.49. – iShares Dow Jones U.S. Real Estate Index –

CIENBullish action on the maker of transmission and switching systems for fiber-optic communication networks pushed Ciena onto our ‘hot by options volume’ market scanner this afternoon. Demand for near-term call options has surged amid a more than 7% rally in shares to $12.58. More than 16,000 calls were coveted at the August 12.5 strike price for an average premium of 19 cents apiece. We note that investors who paid 19 cents just before 1 pm EDT were rewarded for beating the crowd. Traders currently (2 pm EDT) looking to get long the same calls must now shell out 45 cents per contract. Those individuals who paid an average of 19 cents will begin to bank profits if shares surpass the breakeven point at $12.69 by expiration on Friday. Option implied volatility on CIEN is currently slightly higher to stand at 73% from an intra-day low of 69%. – Ciena Corp. –

FXILong-term downside protection was scooped up by traders bracing for potential declines in the China exchange-traded fund by expiration in February 2010. Shares of the FXI are currently enjoying a more than 2% rally to $40.02. Approximately 15,000 puts were picked up at the February 38 strike price for an average premium of 4.20 per contract. Downside protection on a long position in the underlying, or profits on a short position, will kick in if the fund declines 15.5% from the current price to breach the breakeven point at $33.80 by expiration. – iShares FTSE/Xinhua China 25 Index Fund –

MTBShares of the bank holding company
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Monday Meltdown – Seismic Sentiment Shift?

Casey Struck OutWhat a difference a week makes!

Just a week ago, I was apologetic for being so bearish on the markets.  People were complaining that the writers at PSW were "too negative" and that we were out of step with the MSM, who saw nothing but "green shoots" under every economic rock.  On June 28th, I wrote an article comparing the US consumer to the NY Yankees as a way of explaining how the analysts can be so wrong in their expectations for a recovery.  I pointed out that, although they are the winningest team in baseball history, I can still remember a 10-year dry spell from 1965-1975, saying: "Like the US consumer, you come to EXPECT the Yankees to be in contention and you may make your bets that way out of habit, but that storied history of performance is NOT going to stop you from hitting a 10-year losing streak is it?

Like the Yankees, the media EXPECTS the US consumer to win.  After so many consecutive years of stuffing our faces and shopping until we drop, the global media simply refuses to believe that the US consumer can do anything more than stumble slightly before getting right back on the horse and refinancing or whatever it takes to get out there and start charging once again.  As the US consumer makes up 70% of our economy, it’s no wonder all the sentiment polls think prosperity is just around the corner because everyone believes the US consumer is simply resting.  The homebuilders telll us things will rebound, the manufacturers tell us things will rebound and the companies reporting earnings, who are "beating" expectations by only doing 35% worse than last year, are all giving us sunny outlooks as well because the US consumer is coming to save us all.  

Isn't it amazing how, just 7 days later, the media has suddenly gotten on a totally different bandwagon?  Just as a crowd turns on a star ballplayer who strikes out in a clutch situation, the MSM has turned sour on the US economy and has changed their outlook on the US consumer from "resilient" to "dead" overnight.  While extremism grabs a lot of headlines, sometimes the truth can be found in the very dull places between the labels.  I have long pointed out (some may say ranted) that commodity prices were…
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Zero Hedge

Amid Soaring Cobalt Prices, Apple Will Buy Direct From Miners

Courtesy of ZeroHedge. View original post here.

One of the most underreported commodity stories of the past year has been the staggering climb in the price of cobalt - a metal that's an essential ingredient of everything from smartphones to electric cars, as BusinessWeek pointed out in a feature about the looming cobalt crisis published last month.

For example, both cobalt and lithium are key components of lithium-ion batteries used in smartphones. And as global demand for electric vehicles is expected to explode thanks to China's heavy handed inducements for urban car ...



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Phil's Favorites

Why Altered Carbon is not about the future - nor is any other science fiction

 

Why Altered Carbon is not about the future – nor is any other science fiction

Netflix

Courtesy of Gavin Miller, University of Glasgow

The hopes and dreams of the technological movement known as “transhumanism” have been brought into the media spotlight thanks to Netflix’s new science fiction series, Altered Carbon (based on Richard Morgan’s 2001 novel).

Transhumanists believe that our species will soon undergo a technological evolution into a new and superior form. While ...



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Chart School

Sellers Come In But Semiconductors Gain

Courtesy of Declan.

Markets were set up for sellers with most indices experiencing broad selling. However, the one index which looked set up best for shorts - the Semiconductor Index - actually managed to gain.  Anyone taking up Friday's short in the latter Index will have been stopped out but another shorting opportunity may have presented itself. Technicals haven't returned to becoming net bullish but only the ADX remains to shift.


The S&P eased a little lower but didn't return below what was channel support. Te...

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ValueWalk

Bill Nygren's Stock Picks

By VW Staff. Originally published at ValueWalk.

Bill Nygren, Harris Associates U.S. equities CIO and Oakmark Funds portfolio manager, shares his top stock picks and long-term investment strategy.

H/T Dataroma

]]> Get The Full Seth Klarman Series in PDF

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

Bill Nygren's Stock Picks

Pro: Three hot stocks to watch from ...



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Insider Scoop

Stifel Sees Reboot Opportunity For Chipotle, Upgrades From Sell To Hold

Courtesy of Benzinga.

Related CMG Benzinga's Top Upgrades, Downgrades For February 20, 2018 The Market In 5 Minutes: Albertsons-R...

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Digital Currencies

As Bitcoin Nears $11,000, Here's A History Of Its Biggest Ups And Downs

Courtesy of ZeroHedge. View original post here.

The cryptocurrency rebound off Feb 5th's bloodbath lows (below $6,000 for Bitcoin) has been impressive, as a 'mysterious' massive buyer 'bought the dip' and momentum took care of the rest.

With Bitcoin now nearing $11,000 (almost a double off the lows), ...



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Biotech

What is 'right to try,' and could it help?

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

 

What is 'right to try,' and could it help?

In this March 18, 2011 photo, Cassidy Hempel waved at hospital staff as she was being treated for a rare disorder. Her mother Chris, left, fought to gain permission for an experimental drug. AP Photo/Marcio Jose Sanchez

Morten Wendelbo, Texas A&M University and Timothy Callaghan, ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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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!

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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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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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About Ilene:

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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