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Posts Tagged ‘UNG’

Magical Monday – All “Fixed”!

SPY 5 MINUTEOh what BS!

Still, it’s BS we expected, isn’t it?  What did I tell you in Friday Morning’s post?  I said: "Our plan for the day (as we’ve been short all week) is to get back to cash for the weekend but I’m sure we’ll find some speculative upside plays (like USO at $37) to play (we already went long on Silver in the Morning Alert to Members)."  I followed that up with my 9:40 Morning Alert to Members, where my specific trade ideas for the morning, while the market was plunging, were:  

  • USO Next week $36 calls are $1.45 so 10 of those in the $25KP with a stop at $1.20.
  • TNA Aug $69/73 bull call spread is $2 and you can sell the $51 puts for $1.20 and that’s my favorite index play at the moment. Of course any bullish offset would work but this one is focused on the RUT and betting it won’t drop another 8% by Aug expiration (725).

How’s that for a bottom call?  That was right into the panic lows and,  at 9:48 I reiterated my call right at the dead bottom, saying to Members: "Volume is not very high – this is a retail panic so far. If you have short positions, strongly consider put tight stops on them (this includes the $25KP and Income Virtual Portfolio) as they put plenty of cash in your pocket and we can always find another layer of shorts if the RUT can’t hold 775."

UUP WEEKLYAt 9:50 my trade idea was selling PCLN weekly $545 calls at $3 which expired worthless that day for a 100% gain.  At 9:52 we picked up the weekly (that day) QQQ $57 calls at .72 and we had a 100% gain on those by 11.  At 9:56 we went short on the VIX with the Aug $19 puts at $1, at 10:16 we even made 5 bullish adjustments to our fairly conservative Income Virtual Portfolio, including  selling 50 DIA Aug $116 puts for $110 ($5,500) and we’ll be pulling those right off the table this morning – but I’m getting ahead of myself

At 11:25 we went for a Jan bull call spread on UNG and at 1:20 I put up my last long trade idea of the day, selling YRCW Jan $1 puts for .70 for a .30 net entry on the trucker.  …
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Wild Weekly Wrap-Up (Part 1) – Our Billion Dollar Oil Shorts!

Billions!  

That’s how much money our oil futures trade ideas generated over the past two weeks and I certainly hope everyone got a piece of theirs but, out of curiosity, how did our other trade ideas do in this terrible market?  We track our virtual portfolios but we have many trade ideas during members chat on both sides of the fence so let’s take some time to review what worked and what didn’t work as the Dow dropped 500 points since the holiday.  

Keep in mind this is just virtual performance and I’ll do my best to not miss anything and I’m going to include the Friday before the holiday weekend so we can review what our mind-set was as we set ourselves up for the long weekend as well as how we handled the moves since in both our daily posts and our Member Chat.  I’m not going to narrate each day, that’s what Stock World Weekly is for –  I’ll just make quick comments on the trades when appropriate.  Keep in mind, with all options trading, once you make a quick 20%, you should be looking for the exits (see our Strategy Section) by setting stops (and we also stop out with a 20% loss of course) – we are just lucky when we happen to do better.  

TGIF – Dollar Done Diving or Destined to Drop?  

In the main post (main post trade ideas can be read daily by Report Members or higher – the rest are in our Private Member Chat), I discussed shorting oil futures off our $101.90 (at the time) target.  We didn’t like waiting for $102 because sometimes it failed.  Oil finished at $99 this week but was as low as $97.24 as we put pressure on the NYMEX pump crew by accepting their bogus offers to buy oil over $101 per barrel.  This post was the first one where I decided to go public with what we were doing, hoping to break the back of the market manipulators at the NYMEX by letting as many people as possible in on the trade.  This is also where I laid out our bearish fundamental case for oil so good for review.  My comment in the morning post was:  

As I mentioned yesterday, this week’s action is 


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Weekend Reading – Reviewing the Reviews

 I am still trying to get more bullish

I was thinking about writing something cute like I resolve to get more bullish but that would be wrong.  I try, in my own humble way, to "get" the market right.  That means I am not bullish or bearish but Truthish (to further botch Stephen Colbert’s use of the word) and, as Buddah says: "There are only two mistakes one can make along the road to truth; not going all the way, and not starting."  Confucious reminds us that there are three methods by which we may learn wisdom:  "First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest."

In that spirit, we will spend the day in reflection so that we are better able to start on that long road to the truth so that we will be better able to imitate the things that will work in the year to come while trying to avoid making mistakes that will give us bitter experiences.  

This post is not about me – We had a fantastic year and I’ve already given some outlook for 2011 back on the 19th in that weekend’s "It’s Never too Early to Predict the Future" and our current position is short-term bearish in the Jan-April time-frame, looking for a pullback to at least 1,200 on the S&P and possibly back to 1,150.  

After that, we are expecting a return to steady gains but without the irrational exuberance we’re currently experiencing.  So no, I am not bearish – I simply think we’ve gotten ahead of ourselves.  Since we don’t know where the rally train will stop, we have our "Breakout Defense – 5,000% in 5 Trades or Less" from Dec 11th, which were a set of very bullish, highly levered plays where a little bet can pay off a lot if we simply hold our long-established breakout levels.   

How much is "a lot"?  Well my GE trade idea, for example, was to sell the 2013 $12.50 puts for $1.10 (net $1.15 in ordinary margin according to TOS) and to use that money to buy the 2012 $17.50/20 bull call spread for .95, which was a net .15 credit on a $2.50 spread that was on the money at the time.  GE has gained about .75 since the 11th and
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Testy Tuesday – Topping or Popping?

 Looks like we picked the wrong week to short FCX! 

Copper hit a new all-time high in Shanghai this morning (as the guy who owns 90% of London’s closed for the holiday exchange supplies sold it to himself for more money than he did yesterday) and gold is back at $1,400 in the futures and that should give us a better entry on FCX puts than we expected for round 2 but Paul Krugman has me worried now that maybe commodity prices are just high because the World hasn’t got enough of them to go around.  Usually Paul and I agree but i think he may be discounting the effect of a 10% decline in the dollar a little too much – which is understandable as he is still arguing for more stimulus while I’m arguing that the way they are stimulating now is causing this problem and can not and should not be sustained.  

Still, we have to be pragmatic.  That’s why, this weekend, I posted our "Secret Santa Inflation Hedges for 2011" as a follow-on to the "Breakout Defense – 5,000% in 5 Trades or Less" ideas of the 11th and, in the week between the two, we had bullish bets on  HMY, XLF, CAKE, TNA, IWM, CCJ, CHK, EXC, TNA, XLF, UNG, GLD, AAPL, GLW, TOT and AXP – which I had mentioned on the 19th in the weekend post "It’s Never too Early to Predict the Future."  Just because I think there’s going to be a disaster doesn’t mean we can’t go with the flow while we wait, right?  

We don’t have to like the market to buy it above our breakout lines but we do need to keep in mind that this is a very thin rally that is very likely nothing but window dressing aimed at dragging money off the sidelines so the IBanks who have been propping up the markets can, once again, stick the retail shareholders with the bag as they load up on puts (watch the VIX to confirm) and crash the markets once again.  I’ve seen it happen in 1999, I saw it happen in 2008 and, both times, the rally lasted longer than seemed logical but the smart play was to hit and run – not to leave your money on the table but to participate in the upswings and then
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Weekend Reading – It’s Never Too Early to Predict the Future!

 Barron’s already has the 2011 Outlook on the Cover.  

outlook timelin

We were discussing the generally bullish in Member Chat and Barfinger said "So, Phil, what is your response to the bullish preview?"   That was a great question because it made me think.  Does he expect a "rebuttal"?  I can understand that as I’ve been fairly bearish but let’s not confuse caution (I called for a cash out when the Dow hit 11,200 in early November, it peaked at 11,444 on the 5th and closed Friday at 11,491) with bearishness – it’s just that my now 45 days of running around saying "the sky is falling" while it stays in place does make me seem like a perma-bear.  

The "October Overbought Eight" was my first bearish virtual portfolio since April 28th’s "Hedging for Disaster – 5 Plays that Make 500% if the Market Falls" (and it did, and they did).  THAT was a bearish outlook!  We are not that bearish here, otherwise it would have been the easiest thing in the World to re-up those plays for the new year.  We expect a correction, but hopefully not the kind we had between May 4th and July 2nd, where the Dow dropped 1,600 points in just over 2 months.  We are HOPING for a nice 20% pullback off the 15% gain from 9,800 to 11,270 back to the 11,000 line and holding that would make us very bullish going into next year.  

That would be 1,180 on the S&P (the declining 200 dma) and just 5% down from Friday’s close – THAT’s how bearish I am!  Where we are now is simply where the 5% Rule told us we’d be back on May 5th, where the chart pointed out that 1,240 is 20% off the upper, non-spike consolidation at 1,550 that marked the high for the S&P.  20% is the most powerful level in the 5% Rule and that’s why it’s been safer to wait and see how this line resolves than place long-term bets in either direction into the slow and volatile holidays.

Obviously, I am fairly convinced that Global "leaders" are making all sorts of policy mistakes handling the economy and I do believe it will all end in disaster but that does NOT mean I am market bearish.  

Think if it this way:  If you come across a
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Jobless Thursday – America’s Infrastructure Crisis

What a disaster!

Not only are our students failing to keep up with the rest of the World but America is close to getting a failing grade in Infrastructure.  That’s right, what was once the World’s mightiest and proudest economy, this once great nation of builders has been given an overall grade of D in the American Society of Civil Engineers report on our Infrastructure.

The 2009 Grades include: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).  Awful?  Shameful?  How about DANGEROUS?  Deadly even…

For one thing, The number of high hazard dams—dams that, should they fail, pose a significant risk to human life—has increased by more than 3,000 just since 2007, when there were "just" 1,000 dams at risk and 3,000 to pro actively maintain but the administration refused to fund the project, now the costs have tripled as the situation deteriorates but that’s nothing compared to what happens if just a few of them break completely.  1,819 dams are now in the "high hazard" category and, with the current budget, for every one damn that is reparied, two more become an emergency.  

In urban areas, roadway congestion tops 40 percent.  According to the report, decades of underfunding and inattention have jeopardized the ability of our nation’s infrastructure to support our economy and facilitate our way of life.  At risk of catastrophic failure besides the dams (including levees) are things like our drinking water, sewage systems, bridges, waterways, rail lines, airports, roadways (especially elevated ones) and, of course, our entire electrical grid.  Additionally, 7 Billion gallons of clean drinking water is lost every day through leaking pipes – that’s 23 gallons per citizen per day WASTED for want of $11Bn in repairs – don’t bother worrying about it, the last Administration wouldn’t fund it in 2001 or 2006 so why bother now – 10 Trillion gallons later? 

The ASCE calculates a 5-year $2.2Tn investment is needed to address the situation, that’s $500Bn (25%) more than it was 5-years ago, when they released their last report and nothing was done by the previous administration.  So, rather than having invested in America, putting people to work and improving EVERYONE’s way of life, we spent over $1Tn fighting a war, another $600Bn a year on our regular military operations and gave over $1Tn worth of taxe breaks…
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Which Way Wednesday – Beige Book Edition

Bernanke Danger Beige BookOn June 9th we liked the Beige Book, which confirmed our bottom call

On July 28th, we did not like the Beige Book and I said to Members in my review of the report: "Housing drives the market and housing and commercial construction are dead.  How can commercial construction come back if we have less employees?  How can housing come back if fewer people qualify for loans and the population doesn’t grow?  How does anyone think that we can address these problems through capitalism (ie. without stimulus)?"

We got the GDP report that Friday (July 30th) and the low expectations there gave us the gap up we were expecting and Alan Greenspan went on Meet the Press that weekend and admitted I was right – both stealing my "Tale of Two Economies" economic outlook and blasting the Republicans, saying the party had "lost their way."   

We couldn’t do anything about the Republican’ts but I was able to call a "Toppy Tuesday" on August 3rd and we drifted along that top until the next week, where we caught the action just right as we took our bullish money and ran on Monday and began grabbing downside hedges including the QID play I put up right in that Tuesday’s (8/10) morning post, where I said:

Yesterday we knew that the move up was fake, Fake, FAKE and we acted accordingly in Member Chat.  We had a nice QID cover play right in the Morning Alert that was an easy fill as the Nas went higher and higher all day.  It was the Aug $16/17 bull call spread at .42, and the $16 puts sold for .29 for net .13 on the $1 spread with a nice 669% upside if the Nasdaq heads sharply down on us.  Our stops on the play were a combination of Nas 2,300, Dow 10,700 and Russell 666 and we got the Nasdaq and the Dow over their marks but, once again, 666 proves to be an ominous barrier for the Russell.

That hedge did, of course, return the full 669% as QID finished the expiration period at $17.80 and there was no doubt on the trade as we had a mild drop Tuesday morning, followed by a major drop the next day, where my opening comment was: "Wheeee - I told you this was going to be fun!"  It is FUN when you are prepared to ride
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Chart School

Best Stock Market Indicator Ever: Weekend Update

Courtesy of Doug Short.

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.

The OEXA is used to find the "sweet spot" time period in the market when you have the best chance of making money. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.

The chart below is current through the February 3rd close.


After a major S&P correction, the conditions for safe re-entry into the market are when:

   a) $OEXA200R rises above 65%. And two of the following three...

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Phil's Favorites

Violent Protests in Greece; 6 Cabinet Members Resign

Violent Protests in Greece; 6 Cabinet Members Resign; LAOS leader "I Would Rather Starve Than be Under German Jackboot"; Controversy Over Missing Paragraphs

Courtesy of Mish

Imagine you are asked to sign a document but three pages were missing. Further imagine the documents you were asked to sign were written in English but you only speak Greek. Would you sign?

That is exactly the predicament Greek officials were placed in by the Troika. Here is the story sent to me by Demetri Kofinas at Capital Account.

Hello Mish

George Karatzaferis leader of LOAS political party gave a speech today addressing why he refused to sign this latest agreement. In his speech, he said that he a...

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Sabrient

Sabrient Risers - 2/11/2012

Top 5 RisersStockRatingAnalysisICABUYThe projected value for Empresas ICA is still rising quickly even though past earnings have already improved significantly.XBUYThe projected value for US Steel is still rising quickly even though past earnings have already improved significantly.FEICBUYProjected value continues to rise for FEI while long term increases in earnings growth are also becoming more widely expected.ASBCBUYMany analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving....

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Zero Hedge

Ten Minutes With Italy's Mario Monti

Courtesy of ZeroHedge. View original post here.

Submitted by CrownThomas.

Italy's Prime Minister (and self appointed economy minister) shot over to CNBC after his meeting with President Obama this afternoon to discuss how well everything looks for Italy since he was elected took over.

Notable Comments:

  • Italian banks are "vulnerable" but have recapitalized themselves (rather, the ECB has given them money)
  • He had a good meeting with Obama, and Obama is supportive (he's careful to...


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Insider Scoop

Benzinga's M&A Chatter for Friday February 10, 2012

Courtesy of Benzinga.

The following are the M&A deals, rumors and chatter circulating on Wall Street for Friday February 10, 2012:

Actuant Acquires Jeyco Pty

The Deal:
Actuant (NYSE: ATU) announced Friday that it has acquired Jeyco Pty Ltd (“Jeyco”). Headquartered near Perth, Australia, Jeyco designs and provides specialized mooring, rigging and towing systems and services to the offshore oil & gas industry in Australia and other international markets. Additionally, its highly engineered products are used in a variety of applications for other markets including cyclone mooring and marine, defense and mining tow systems. Jeyco generates annual revenues of approximately $20 million.

Actuant shares closed at $27.33 Friday, a loss of 0.18% on average volume.

...

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Market Montage

And Still Not a Single 1% Down Day in 2012

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

A little flurry of buying in the closing 5 minutes tacked on 2 S&P points and took the major indexes off the lows.  Only the Russell 2000 finished with a greater than 1% loss (1.4%) as it has been relatively weak versus the senior indexes for the past few sessions.   While today was the "worst day of the year" – it was quite a low bar as the previous biggest loss on the S&P 500 was -0.57%.

The S&P 500 held well above the 10 day moving average (didn't even really touch it) and did not even attempt to fill the gap from last Friday's employment report.  The teflon market rolls on for now.  Specul...



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ETF Selector

ETFs Skid On Greece (VGK, EWG, FXE, DIA, SPY)

Courtesy of John Nyaradi.

Greece was “saved” for less than 24 hours but now major ETFs around the world skid into the weekend on Greek fears

After wangling for a week or more, Greek took their new deal to the European Ministers meeting, only to have it promptly rejected and so as we go into the weekend, major global markets and ETFs have again hit the skids on Greece.

After two years of wangling, the European zone is demanding yet more and deeper cuts for Greece to qualify for the next round of bailout loans that will keep the country from going bankrupt on March 20th.

Major European and United States ETF responded negatively to the new developments:

SPDR Dow Jones Industrial ETF (NYSEARCA:...



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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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Option Review

True Religion Falls Apart At The Seams After Earnings

 

Today’s tickers: TRLG, KR & IGT

...



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OpTrader

Swing trading portfolio - week of February 6th, 2012

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

Optrader 

...

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Stock World Weekly

Stock World Weekly: The Relentless Pursuit of Meaningless Metrics

NEW: Elliott and Ilene are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly, called "The Relentless Pursuit of Meaningless Metrics."  

...

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IRA Strategy/Income Trader

Weekend Virtual Portfolio Update 1/30/2012

Here is a quick update of past trades and our current position. AA Money No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position. Last week P&L - 310.00 We lost ground last week, but we still have 11 months to sell premium! FAS Money Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week's almost gave us problems at the end of the day though! Last week P&L - $4277.00 IWM Money A decent week in this virtual portfo...

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Pharmboy

Biotech Investing for 2012

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

Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack.  Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game.  More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline.  In addition, the stock can be manipulated by market makers so investors don't know which way is up.  I approach investing in biotechs as a long term prospect.  I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...



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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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