Veeco Instruments Inc. (Veeco) (VECO) designs, manufactures, markets and services enabling solutions for customers in the high brightness light emitting diode (HB LED), solar, data storage, scientific research, semiconductor and industrial markets. In its LED and Solar segment, Veeco designs and manufactures metal organic chemical vapor deposition systems that are used to make HB LEDs or solar cells made of III-V compound semiconductors. In its Data Storage segment, Veeco designs and manufactures equipment used in the production of thin film magnetic heads that read and write data on hard disk drives. In its Metrology segment, the Company designs and manufactures atomic force microscopes, scanning probe microscopes, stylus profilers and fast three-dimensional (3D) optical microscopes… (Sabrient’s Ratings Report)
Sabrient rates VECO a Strong Buy for its superior value and growth profiles, which indicates a stock that should outperform the market.
Housing-keeping note: Thanks to WordPress’s destruction of Phil’s Favorites site (and replacement with an invite to sign up for its service!), I’ve been relocating my blog to TypePad. Benefits: it looks better, is very user friendly and offers an easy way to search archives for any topic. One unique feature is that while exploring the internet, I can simply click on a button to post an excerpt of an interesting article with a link to the full article. That ability allows me to post links to articles that are worth reading when I do not have reprinting permission, such as articles from major news sources.
The new Favorites site is here. I’ve also created a website for Dark Horse Hedge, here. - Ilene
Is this the real life?
Is this just fantasy?
Caught in a landslide
No escape from reality
Open your eyes
Look up to the skies and see
I’m just a poor boy (Poor boy)
I need no sympathy
Because I’m easy come, easy go
Little high, little low
Any way the wind blows
Doesn’t really matter to me, to me
Ilene and I started the Dark Horse Hedge on July 1, 2010 with the goal of helping self-directed investors weather any storm, no matter which way the wind was blowing. Today completes the second month of publishing the Dark Horse Hedge and we thought it would be a good time to review.
Not exactly the kind of headline that anyone wants to wake up to, but if you simply change a few words, it is as if we have slipped into the movie Groundhog Day. Each day’s gloomy headline is much like the day before’s, with a few words changed. Fortunately, DHH began with the premise that how news is going to be headlined and short-term market moves have proven over time to be nearly impossible to predict with any consistency.
So we seek to have long positions that are the best of the best, leveraged against short positions that are the worst of the worst. We combine the ability to reduce beta, or market correlation, with two alpha (return) improving measures. Our first measure is to tilt the balance of the Long/Short portfolio based on market trend, and the second is to use options for yield enhancement.
We are currently in the middle of a 5th consecutive down day for the S&P 500 and we believe in taking profits off the table when the risk/reward premise changes. DHH recommended a short position in SunTrust Banks, Inc. on July 13, 2010 at $25.54 and following the companies $750 Million tender offer of debt on Monday, we believe it is time to cover our STI short position at these prices. We have earned a 11.9% profit in just over a month, and so it is time to let the sun go down alone if its trend continues, but not to let our profits go down.
BUY TO COVER SunTrust Bank, Inc. (STI) at the market, Wednesday, August 25, 2010
So what kind of positions do we want to add in this market? One that I like and am recommending is VEECO Instruments Inc. (VECO) using Phil Davis’s buy/write strategy. VECO has a strong buy rating from Sabrient, with excellent scores for growth and value.
Veeco Instruments Inc., together with its subsidiaries, designs, manufactures, and markets solutions for customers in the high brightness light emitting diode (HB LED), solar, data storage, scientific research, semiconductor, and industrial
DISH – DISH Network Corp. – The implementation of a ratio put spread on the U.S. provider of direct broadcast satellite subscription television service this afternoon was perhaps put on by an investor looking to lock in recent share price gains. DISH shares, which are currently up 2.4% on the day to arrive at $20.77 by 3:40 pm ET, have rebounded nearly 17.5% since touching down to $17.75 on July 1, 2010. It looks like one trader purchased 3,000 puts at the December $20 strike for an average premium of $1.58 each, and sold 6,000 puts at the lower December $18 strike for an average premium of $0.83 a-pop. The investor responsible for the transaction receives a net credit of $0.08 per contract, and keeps the full amount at long as DISH’s shares exceed $20.00 through December expiration. The trader is perhaps utilizing the spread to protect the value of a position in the underlying shares. If this is the case, downside protection kicks in should shares reverse course to trade below $20.00 by expiration day. The decision to employ a ratio spread rather than a 1-by-1 spread or a plain-vanilla long put stance suggests this investor does not expect DISH shares to collapse ahead of expiration at the end of 2010. The firm is scheduled to report second-quarter earnings ahead of the opening bell on August 9, 2010.
LBTYA – Liberty Global, Inc. – It looks like one options strategist expects shares of the international producer of video, voice and broadband internet services to remain range-bound through October expiration. Liberty Global’s shares are currently down 0.20% to stand at $29.65 as of 3:05 pm ET. LBTYA reported an adjusted net loss of $2.42 a share for the second quarter of 2010 after the market closed on Tuesday. But, shares moved very little following earnings. Perhaps the lack of fluctuation in the price of the underlying shares during earnings season bolstered the strangle seller’s premonition that LBTYA’s shares are likely to trade within a specified range for the next couple of months. The investor appears to have sold roughly 10,000 puts at the October $27.5 strike for a premium of $0.70 each in combination with the sale of about the same number of calls at the October $32.5 strike for an average premium of $0.35 apiece. The trader pockets…
Wow, this market goes from zero to sixty in record time, doesn’t it?
Our 1,113 mark (see yesterday’s post for charts) was tested and broken on the S&P yesterday (see David Fry’s chart) on a silly stick save into the close but, seeing that, it was very obvious that "they" are looking to paint some impressive moves on the charts this week so strap yourselves in – it’s going to be a wild one.
1,120 is our next big test on the S&P along with the satanic 666 on the Russell and 10,700 is the next big test for the Dow (as 10,500 seems well in hand). Advancers led decliners 20:1 on the Nasdaq, which shows you what a total farce the market is because we had the same ratios going down so stocks are either ALL good or ALL bad on a random daily basis. Human beings do not trade this way my friends, this market has been totally taken over by machines and the affect of your individual trading is about the same as shotting a water gun into a wave to slow it down.
As long as you accept this fact and "go with the flow" you can be a very happy channel surfer but fight the tide at your own peril! We stuck to hedged plays in yesterday’s Member Chat with our bearish play on FSLR in the Morning Alert and then earnings spreads on MEE and VECO along with long-term bullish plays on LYG, GS, CHK and our beloved TBT, who are finally showing signs of life. We also keep selling GENZ calls to overly enthusiastic buyers who think someone is going to pay more than $70 for the company – even though it was at $50 before the rumors started. Aside from the lack of logic that a buyer with a p/e of under 10 will pay a p/e of over 20 for GENZ, it just isn’t really the right credit environment for buyers to be bidding +40% for a company. We aren’t buying puts but we’ll certainly sell Jan $70 calls for $4 as that’s just silly!
The markets are back in "Soar and Ignore" mode this morning as bad news is now like water off a duck’s back to the market, much the same way good news was ignored just 2 weeks ago. The moon is full this week so I’m going to start charting that against the market as we’re still trying to find some sort of early predictor of…
Russ Certo of Brean Capital has penned a superb research note (PDF here). Readers may note that this is a technical essay and it is thought provoking for the professional in the money management and/or for those skilled in the monetary policy arena. We thank Russ and his colleague, Peter Tchir, for allowing us to share their effort with our clients, friends and readers worldwide. Ple...
Question: Do price waves answer the Continuation or Reversal question?More from RTT TvAnswer: Yes when you understand Wyckoff logic, more so if you understand Richard Wyckoff law off 'Effort vs Results' and how it supports the Richard Wyckoff law of 'Supply and Demand'.AMZN price chart with waves colored (the daily price waves are the same formula as PnF wave/bar calculation below, allows sync of price action).
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Auto PnF chart from our Swing Pop out charts.
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In Shenzhen's famous Huaqiangbei electronics shopping district, you won't need to stand in any lines or make an appointment for these smartwatches.
At 299 yuan—that's less than $50—you can pick up a smartwatch that looks quite similar to Apple's own creation, complete with replica Digital Crown and touch screen. Like the Cupertino original that went on sale today for seven times the price, the generic offering spotted in this bustling Chinese city features an activity tracker, chat apps, Web browser, and Bluetooth connectivity. A brief demo unveiled shortcomings in the browser with only the text loading on screen.
King Dollar has been on a role since last summer, up over 20% in less than a year. When looking back on the US$, the rally has been rare and nearly historic. Majority of the rally took place inside the steep rising channel above. Over the past month the US$ might have put in a double top. Over the past few days, the US$ has slipped a little below rising support at red arrow above.
Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.
More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved.
Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...
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.
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As we get into the heart of earnings season and anticipate the GDP report for Q1, the investor spotlight has been taken off the Federal Reserve and timing of its first interest rate hike, at least temporarily. Even though Q1 economic growth will undoubtedly look weak, the future remains bright for the U.S economy – even though many multinationals will struggle with top-line growth due to the strong dollar – and any near-term selloff resulting from weak economic or earnings news should be bought yet again in expectation of better results for the balance of the year. High sector correlations remain a concern, reflectin...
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
In my last post (Part 1 of this article), I looked at alternative ETFs that could be used as hedges against the corrections that we have seen during that long 2 year bull run. Looking at the results, it seems that for short (less than a month) corrections, a VIX ETF like VXX could actually be a viable candidate to hedge or speculate on the way down. Another alternative ETF was TMF, a long Treasuries ETF which banks on the fact that when markets go down, money tends to pack into treasuries viewed as safe instruments. In some cases, TMF even outperformed the usual hedging instruments like leveraged ETFs. There could of course be other factors at play since some of 2014 corrections were related to geopolitical events which are certain...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
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...
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.
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW)
nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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