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Posts Tagged ‘SOX’

Monday – “Markets in Turmoil” According to CNBC – Must be Time to Buy!

What a fantastic contrary indicator!

CNBC hit the panic button this weekend with their "Markets in Turmoil" special report where they trot out their crisis team of Jim Cramer and Maria Bartiromo in an attempt to stampede all the remaining sheeple out of the markets on Monday Morning (see our Friday morning post for our view on why we thought Friday's drop was going to be a bear trap).

"An awful May is replaced by the start of a frightening June" is CNBC's opening voice over and it gets dumber and dumber from there as "America's Financial News Network" bangs the fear drum right at Asia's open (9pm) and then uses the panic in Asia to prove their point to EU and US traders that there's something to worry about.  

I could go on and on about how ridiculously evil this network is and how horrible it is that we allow these Financial propaganda networks to manipulate the markets to the benefit of the highest bidder but, in the long run – who cares?  If you watch CNBC and take it seriously – just like people who watch Fox to find out what's going on in the World – you reap what crap you have sown.  

SPY DAILYWe are not, in any way, gung-ho bullish but we're also not going to play bearish.  On the whole, as we reviewed in this week's Stock World Weekly (available free this week!) - we are "wishy washy" in our positions, cashy and cautious and doing just a bit of bottom-fishing as we HOPE (not a valid investing strategy) that this is the bottom as we HOPE the G8 takes some rational action.

We made a bullish play on the Futures at 9:13 last night, while CNBC was clearing out all the suckers at Dow (/YM) 12,000 but we took that money and ran as we popped over 12,075 (up $375 per contract) early this morning and flipped to a bullish play on oil (/CL) off the $82 line and those contracts are already $82.40 – up $400 per contract at 8am.  

We were also very excited to see AAPL back at our buy point of $555 early this morning as AAPL is pure rocket fuel for the Nasdaq when it bounces and AAPL can move quickly back to $580 on any hint of good news and that's…
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Goldilocks and the 300,000,000 Bears

Talk about feeling outnumbered!

As the guy in Airplane kind of said – "Looks like I pricked the wrong week to get bullish!"  Of course, as I often tell people I am neither bullish nor bearish – I’m rangeish – and our range is the 5% band between around Dow 10,200 and S&P 1,070, which takes us as low as Dow 9,690 and S&P 1,016 and as high as Dow 10,710 and S&P 1,123 before I really "flip flop" my positions.  Despite the fact that this is the range we predicted last October and is the range we’ve been in (other than a brief trip to 11,200, which we shorted the hell out of) all year – people still seem to find it necessary to call me either bullish or bearish as we navigate the channel.

I suppose I have been HOPEFUL for the month (now heading into day 14) that we will finally make a little progress and establish a higher floor at our usual mid-points while, at the same time, the MSM have decided that we are all going to die.  That does make me kind of bullish by comparison doesn’t it?  We are mainly in cash and we are well hedged to the downside so, unless we are REALLY heading much, much lower, there is little profit in speculating to the downside, other than our quick trades.  As PT Barnum once said:

"A man who is all caution, will never dare to take hold and be successful; and a man who is all boldness, is merely reckless, and must eventually fail. A man may go on "’change" and make fifty, or one hundred thousand dollars in speculating in stocks, at a single operation. But if he has simple boldness without caution, it is mere chance, and what he gains to-day he will lose to-morrow. You must have both the caution and the boldness, to insure success." 

Balance is the key to long-term success and we’ve had many conversations about that in Member Chat.  Our goal is to be neither bullish or bearish but rather to sell premium to both the bulls and the bears when conditions permit us.  As Ravalos said Friday in Member Chat:

"Ever since I became member (actually before I became member I was already following your newsletter for quite some time) I find it hard for me to BUY PREMIUM. Over time, I’ve realized that buying the


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Global Chart Reveiw Shows Key Inflection Point

Chart Review by Michael Clark

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

    -- John Maynard Keynes

SO, IS THIS FINALLY THE ‘REAL’ CORRECTION?

What a week it was.  The Bears gave the Bulls some payback.  Obama got a wake-up call.  And the banks got a well-deserved scare (and we hope they will get a well-deserved hair cut).

The markets reacted, as one might expect, with selling.  Actually, the selling began before the Massachusetts election and before Obama sent a shot across the Goldman Sach’s bow.  Last week Intel announced surprisingly strong earnings; and the stock started up and then sank.  For the past half-year investor behavior had been the reverse: a buying spree for any stock that did not lose as much as it might have — beating ‘Street expectations’ that had been dumbed down over and over again during a quarter so that the company could report ‘surprising’ strength.  Suddenly, now, even good earnings are being greeted with selling.  Then came Massachusetts — wasn’t that a Bee Gees’ song?
 

All the lights went out in Massachusetts

Anyway, readers want to know where the markets stand today, after the sell-off this week.  My view of it — my ‘view’, not my gut-feeling — is that we are, so far, merely correcting from an over-extended rally.  This rally has been bizarre, to say the least.  This has been a ‘fear rally’ — usually the ‘fear’ side of the equation is when selling comes in, ‘greed’ driving the expansion.  But fear of systemic failure has driven this rally; and Ben Bernannke has been the captain sailing the ‘Boat of Fear’,   Ben’s logic — that more debt will solve the insolvency crisis — has a shadow side, the logic that a collapse in stock prices will result in systemic failure, international chaos, revolution, repression…made him believe that preservation of the status quo was requiired, at any price.  A ‘make-believe’ recovery could be jump-started, perhaps, if the Fed could just stimulate (and simulate) another asset-bubble.  After all – that is how his mentor and predecessor, Alan Greenspan, had become the darling of the coctail party crowd, leading member of Time Magazine’s ‘Committee to Save the World’; and that was how he, himself, had become Time’s ‘Peson of the Year’.

Logic was thrown…
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Dr. Strangebear

Here are a few quick posts by Tim Knight at Slope of Hope. - Ilene

Dr. Strangebear

Or……..how I learned to stopped worrying and love the bull.

I bought a very large position in SSO earlier today for a couple of reasons:

  • I don’t get my jollies out of losing money;
  • The OPEX week clearly has import;
  • I was impressed and convinced by Fujisan’s post last night, calling for – if memory serves – a push to 1086 by Friday.

I am having fewer and fewer compunctions about buying select stocks. That is evident from my watch lists.

One cause for concern for the bulls remains…………..volume! Just take a look at the volume graph; it’s simply pathetic.

0916-sso 

When Does the V Exhaust?

It is generally true that prices climb higher at a far slower rate than they drop. This rally, however, has been a remarkable exception. The push higher has been explosive, and it has pushed higher with just about the same timetable and force as the drop itself.

0916-V

The question, of course, is: when (if ever) will it end?

There are as many opinions as there are traders, but a few general camps would be, using the example of the Russell 2000 above:

  • It has another 10% to go, and it will happen quickly. That would be painful for the bears, but I would hasten to point out that, at that level, the Russell would have completely retraced to the neckline of a head and shoulders pattern spanning three years whose beauty would make bears (if there are any left by then) weep tears of joy.
  • It’s done climbing and will start falling. This has been uttered so many times by so many parties (including, I admit, a few times by me) that it’s not even worth considering anymore. The entire, "OK, now………….errr………OK, NOW!………..oh, wait…………….errr, NOW!" gets really, really old.
  • We’re in a major new bull market and it’s simply going to keep pushing its way through to progressively higher prices.

For the bears out there who would like some encouraging news, the semiconductor index – which is a helpful bellweather – is looking like it is approaching a huge area of resistance. This is why I bought SSG yesterday.

0916-sox  

Snark and Despair All the


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Testy Tuesday Morning

Our levels are holding so far

We came right back to 1,000 on the S&P yesterday but it held like a champ and that gave us the confidence to take a bullish cover on our longer DIA protective puts, right at 3:04, ahead of the usual 50-point stick save but it was a move we initiated right at the bottom at 2:30, catching almost the dead bottom on our roll.  Of course it’s total nonsense but it’s total nonsense we can count on with 8 stick saves of at least 50 points in the last 90 minutes coming in the last 10 market sessions accounting for 400 points of Dow gains or ALL of our gains since July 20th when we "broke out."

As illustrated in David Fry’s SPY chart, the only exceptions to the stick save were the last two Fridays and I said to members in yesterday’s chat, perhaps that is somehow significant that the collective we call "Mr. Stick", does not feel confident enough to make bullish plays into the weekend anymore.  Today we should head right back to re-test 1,000 on the S&P but we are much more bearish overall, having taken profits yesterday and covered our unrealized gains in our $100KP - the plan we discussed in yesterday’s morning post.

We got a re-test and a re-failure of the Russell at exactly our 574 target right at 11:15 and the the Qs never even mounted a serious threat on our 40 line so it wasn’t a tough call for us in the morning.  The other levels we are watching, Dow 9,297, S&P 1,000, Nasdq 2,017, NYSE 6,438, Russell 562 and SOX 308, are looking shaky and may not stand up to another test, especially if we get any bad news on our upcoming data with Wholesale Inventory and Productivity Reports on deck this morning.  Our bearish additions were an ERY spread (3x Energy bear) and COF Sept $40 puts, which are already up 10% from our 12:17 pick.  It wasn’t all negative, we liked a couple of buy/write plays and we took a very bullish spread on FRE, which should do very well this morning.  At 12:57 we had noticed FRE moving up and, in Member Chat, we were discussing the merits and my take was this:

FRE/Ifl – The float of FRE is just 650M shares and they are capable of earning $5Bn a year in a


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GDP Friday – How Much Will Be Enough?

Can the S&P make 1,000 today?

As we can see from AlphaTrends chart, that’s going to be a tough breakout and, even if we do make it, can we hold it?  In yesterday’s post I said we were ready to switch off our brains and BUYBUYBUY the rally and our breakout levels did all hold yesterday but I decided, in Member Chat, that we needed to raise the bar slightly before we started shutting down our thought processes into the weekend.  We simply used the 2.5% lines of Dow 9,297, S&P 1,000 (interesting!), Nas 2,017, NYSE 6,438, Rut 562 and SOX 308 in my 10:16 Alert as our official buying breakouts but those same levels gave us a great indicator to get out of our longs and press our shorts as they ALL failed by 11:09.

Personal Consumption Q1 09

It is going to be very much up to the GDP report and we have a pretty low-bar expectation of -1.5% but that’s a heck of an improvement over last quarter’s -5.5% and this earnings season has been nothing if not a celebration of "getting worse more slowly."  As we all know, personal consumption makes up 70% of the GDP while government is about 18% and business investment just 12%.  Durable goods are only 8% of the GDP while consumables (which includes clothes and, obviously, food and fuel) are 20% and 40% is "services" but 1/4 of that number is Real Estate so that’s a little confusing. 

As we know, not much is actually getting better but that’s not the issue with GDP as we are measuring "growth" compared to the prior 4 quarters and our prior year was a disaster!  This is like when a raging fire causes a house to collapse and you stand there looking at the wreckage and say "at least most of the fire is out now."

The good news is the comps just keep getting easier and easier the worse things get so, at some point, you are bound to improve!  As you can see from Briefing.com’s Real GDP chart on the left, there’s a pretty wide disparity between the Real and Nominal GDP and that’s because the Real GDP meansures the production of goods and services valued at constant prices.  So we aren’t producing that much less, we’re just getting less for it… 

We’ll get the scoop at 8:30 but our global partners weren’t waiting with…
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Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.com 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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Phil's Favorites

Zillow + Trulia and the Big Coverup

Stocklemon of Citron writes about a potential merger of the internet real estate companies Zillow and Trulia and the problems they face. ~ Ilene 

Zillow + Trulia and the Big Coverup Courtesy of Citron Reports 

Zuliagate – The Big Secret

Citron Exposes What the Press Has Ignored

The stock market and the real estate industry are all abuzz about the possible merger of Zillow(NASDAQ:Z) and Trulia(NASDAQ:TRLA). The media is now filled with stories proclaiming that the combined company will instantly become an internet advertising juggernaut that ...



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All About Trends

Mid-Day Update

Reminder: David 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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Chart School

Consumer Confidence Surges; Highest Since the 2007 Market Peak

Courtesy of Doug Short.

The Latest Conference Board Consumer Confidence Index was released this morning based on data collected through July 17. The headline number of 90.9 was an improvement over the revised June final reading of 86.4, an upward revision from 85.2. Today's number dramatically beat the Investing.com forecast of 85.3. The current level is the highest since October 2007, the month the S&P 500 peaked prior to the Great Recession.

Here is an excerpt from the Conference Board press release.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007 (95.2). Strong j...

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Insider Scoop

Report: IBM Rejects Offer For Chip Operations

Courtesy of Benzinga.

Related IBM Blackberry Attempts To Rebound From IBM/Apple Deal The 10 Most-Respected Corporate Brands Can the iRally Endure? (Fox Business)

International Business Machines (NYSE: IBM) rejected an offer for part of its semiconductor manufacturing operations, according to unnamed sources cited by ...



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Option Review

Kellogg Call Options Active Ahead Of Earnings

Shares in packaged foods producer Kellogg Co. (Ticker: K) are in positive territory on Monday afternoon, trading up by roughly 0.20% at $65.48 as of 2:20 p.m. ET. Options volume on the stock is well above average levels today, with around 12,500 contracts traded on the name versus an average daily reading of around 1,700 contracts. Most of the volume is concentrated in September expiry calls, perhaps ahead of the company’s second-quarter earnings report set for release ahead of the opening bell on Thursday. Time and sales data suggests traders are snapping up calls at the Sep 67.5, 70.0 and 72.5 strikes. Volume is heaviest in the Sep 72.5 strike calls, with around 4,600 contracts traded against sizable open interest of approximately 11,800 contracts. It looks like traders paid an average premium of $0.37 per contrac...



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Sabrient

Sector Detector: Bold bulls dare meek bears to take another crack

Courtesy of Sabrient Systems and Gradient Analytics

Once again, stocks have shown some inkling of weakness. But every other time for almost three years running, the bears have failed to pile on and get a real correction in gear. Will this time be different? Bulls are almost daring them to try it, putting forth their best Dirty Harry impression: “Go ahead, make my day.” Despite weak or neutral charts and moderately bullish (at best) sector rankings, the trend is definitely on the side of the bulls, not to mention the bears’ neurotic skittishness about emerging into the sunlight.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, incl...



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OpTrader

Swing trading portfolio - week of July 28th, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW in the comments below each post. 

Our weekly newsletter Stock World Weekly is ready for your enjoyment.

Read about the week ahead, trade ideas from Phil, and more. Please click here and sign in with your PSW user name and password. Or take a free trial.

We appreciate your feedback--please let us know what you think in the comment section below.  

...

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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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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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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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