Posts Tagged ‘XTO’

Wild Weekly Wrap-Up

Wheee – that was fun!

Last week, I asked the question were we "Too Bearish or Just Too Early?"  I said in that wrap-up: "This Friday the market topped out about 150 points higher than last Friday, closer to the top of our range so we went much more bearish on Friday, perhaps too bearish considering this was the best Friday finish since Nov 6th and we haven’t had a down Monday since October 26th."  We did get the move up we feared on Monday but we stuck to our guns and had a fabulous week.

Even as the market was going against us Monday morning, my first Alert of the week to members at 9:44 said: "I’m still more inclined to look downward at: Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,200 and Russell 600…  I’m still bearish because oil is weak, gold is weak, the financials (XLF at 14.30) are weak and most of the good news we are hearing is nothing but fluff."  That was a pretty good call as we hit our target levels yesterday and held them, so we flipped more bullish right at 11:30 on Friday, in what was some very good timing for our intra-day play. 

We are still on a stock market roller coaster that's going to have plenty of ups and down in the thin, holiday trading that will likely characterize the end of the year.  The market will be closed 2 Fridays in a row and good luck finding people around this Thursday or the next one so 6 proper trading days left to 2009 at best.  We got out – that drop was very satisfying and we've moved mainly to cash (our $100K Virtual Portfolio has $88,000 in cash at $107,249 at the end of it's first month).  Last week we were able to cash out the bull side, this week we got satisfaction from our bear plays and that leaves us footloose and fancy free to have fun the next two weeks.  If our day trading goes as well as it did on Friday, we can end this year with quite a bang.

Manic Monday – Dubai, CitiGroup and GS Move Markets

This picture says it all.  When you want to blow smoke
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Thrill Ride Thursday

Wheee – this is fun!

Everything went according to plan yesterday as the very fake pre-market pump I warned you about in the morning post very quickly turned into a day of carnage for the markets.  Sure we only ended up down 10 points, but it was down 100 from the open

Fortunately, we have learned how to ride this bull and we grabbed the DIA $105 puts at a .55 average per my 9:47 Alert to Members and we cashed those out at .90 (up 63%) in the afternoon.  We also had a quick 20% winner on Dec QID calls and we kept the Jan QIDs as our continuing bearish bet as we didn't want to risk a possible overnight pump job taking the markets back up with open Dec calls.  Still, we weren't worried enough to cover our longer DIA puts so we were very bearish but, as I said yesterday: "We have neglected to do is play the futures pump for the past week as we keep expecting something very bad to happen and boy would we feel silly if we were just 55% bearish when this house of cards comes tumbling down."

It has been volume, volume, volume that kep me questioning the rallies this year - the fact that all the up moves come on very thin volume (ie. manipulated) while all day long the insiders sell to the suckers who are draw in by the futures action and stick saves (it's a team effort).  This chart from Ron Greiss illustrates what's wrong with our rally on a more macro level:

While we are certainly not ready to do a bearish victory dance on this tiny little correction, we certainly feel a heck of a lot better about our decision to stay bearish.  In addition to adding bearish DIA and QID plays yesterday, we (of course) added more SRS at our target bottom, took the money and ran on EWJ, shorted XTO (rumors XOM may walk), got more UUP and shorted V.  Our long covers were TOL and the VIX but it was a very bearish day of picks, especially considering our already bearish stance (see Weekend Wrap-Up – Too Bearish or Just too Early?). 


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Manic Monday – Dubai, CitiGroup and GS Move Markets

What a morning it's been already! 

Last night, at about 11:30 EST, Abu Dhabi gave a $10Bn bailout to Dubai (until the end of April, anyway) with the following statement from Sheik Ahmed bin Saaed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee: "We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices."  That was enough to send the Hang Seng from down 300 points to up 300 points in less than 30 minutes of trading (on both sides of their lunch break) while the Shanghai went from -2.2% to +1.7% and the Nikkei also reversed a 100-point drop, but only managed to get back to even at the close

US futures trading also went wild, up over 100 points at the time but we've given up about half of those gains as of 7:30.  Does it make sense that the Dubai crisis, which dropped us from 10,450 back to 10,250 when it came up, should be the catalyst to get us over 10,500 just because they were bailed out?  Of course it doesn't – that's why we went to cash.  This is one of the most ridiculously irrational markets I've ever seen.  The other "good" news this morning is also the same old songs:  Citigroup will repay their $20Bn TARP loan by diluting their stock by about 20% and GS says oil will go to $85 early next year.   

I don't know why they even bother to pretend anymore – they should just put 10 market-boosting statements on a chip that randomly plays one of them whenever the MSM needs a quote for the morning.  People don't seem to notice it's the same thing over and over and over again so why even bother with the pretense?  Speaking of pretense – I mentioned in the Weekend Wrap-Up that we expected this nonsense this morning but, had I realized that Greenspan AND Cramer were going to be on Meet the Press yesterday, I would have gone more bullish as those are the two biggest market hypers GE could have used for this week's quotes.

 

Europe seems happy enough with Asia's recovery and all the bull*** commentary (that's bullISH – what were you thinking?)…
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TARP Top Testing Tuesday – Will We Get Fooled Again?

There's nothing in the street
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Is now the parting on the right
And the beards have all grown longer overnight

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray

We don't get fooled again
 

On May  25th, at a speech in Hong Kong, Paul Krugman said: "I will not be surprised to see world trade stabilize, world industrial production stabilize and start to grow two months from now.  I would not be surprised to see flat to positive GDP growth in the United States, and MAYBE even in Europe, in the second half of the year."  Although Krugman also questioned: "In some sense we may be past the worst but there is a big difference between stabilizing and actually making up the lost ground.  We have averted utter catastrophe, but how do we get real recovery?"  The markets ignored the BUT (economists do tend to say BUT a lot) and the Dow rallied 200 points the next day

In fact, the Dow rallied 200 points on Monday May, 18th as well as Tuesday, May 26th (Monday was a holiday) and Monday June 1st, with those 3 "Monday's" accounting for 600 of the 500 points the Dow has gained since Krugman's first speech.  Oil is up over 10% on that "rosy" outlook as well, starting at $60 on the 26th and flying up (with the help of GS) since, all on hopes that the economy will be "back to normal" next quarter.  Of course that's not what Krugman said at all but so what?

Yesterday, with the Dow down 150 points from Friday afternoon's 8,800 level, Krugman made a speech in London, where he said: "I would not be surprised if the official end of the US recession is dated, in retrospect, some time this summer."  He said in retrospect because the context was that he expects the kind of recovery you won’t know you are having until 6 months or so later, when you can look back and say
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Financials continue to rally

Today’s tickers: CIT, CSCO, AMX, STI, XTO, NTES & MCHP

CIT CIT Group, Inc. – Shares of the North American bank holding company has jumped more than 10% to $3.01 amid the broad gains enjoyed by the financial sector today. CIT appeared on our ‘most active by options volume’ market scanner after one investor initiated a reversal on the stock. The trader sold 21,200 calls at the in-the-money October 2.5 strike price for 1.15 and then purchased 21,200 puts at the same strike price for 40 cents each. Perhaps the investor is looking to bank gains on today’s rally and protect the profits by getting long of puts. The trade resulted in a credit of 75 cents to the individual who is prepared to gain to the downside at any share price below $2.50 by expiration in October.

CSCO Cisco Systems, Inc. – The networking and communications products company is off slightly by about 2% to $19.26. However, we observed bullish option traders looking for a rise in shares by expiration this month. At the May 20 strike price more than 18,900 calls were picked up for an average premium of 40 cents apiece. The breakeven on the trade at $20.40 requires that shares rise by just 6% from the current price in order for call-buyers to begin to profit to the upside by expiration. One month further, the in-the-money June 19 strike price attracted a trader to bank gains by selling 8,200 calls for a premium of 1.24. Perhaps this individual decided to throw in the towel and take in profits today for fear that shares may fall further over the next month and a half and erode the call premium even more.

AMX America Movil SAB de CV ADR – The Mexican local and long-distance telephone services company has experienced a slight 1.5% rally in shares to stand at $36.88 today. We observed option traders loading up on puts in the May, June, and August contracts. The activity drove up the put-to-call ratio to more than 6-to-1 indicating that 6 puts were traded to each call option in action. At the near-term May 34 strike price some 4,500 puts were purchased for an average premium of 28 cents apiece. Further along in the June contract, bearish traders coveted 2,500 puts at the 35 strike for 1.50 each. Finally, the largest purchase was a chunk of 20,000 puts…
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DryShips upgrade attracts option investors to upper deck

Today’s tickers: DRYS, XTO, LGF, MCRI, RVBD, RF, HA, CBS, PCLN

DRYS DryShips, Inc. – The drybulk carrier’s share price rally of more than 25% to $6.94 breathes new life into DryShips’ sails today amid an upgrade to ‘outperform’ from ‘market perform’ by an analyst at Oppenheimer & Co. this morning. The company has also managed to raise $500 million via equity offering that it plans to use to decrease its massive debt. Option investors saluted the bullish news by purchasing calls in the May contract. At the May 7.5 strike price 7,300 calls were picked up for an average premium of 59 cents apiece. Shares need only rise by an additional 7% in order for the May 7.5 strike calls to land in-the-money by expiration next month. More optimistic traders selected the May 9.0 strike and bought 3,000 calls for about 28 cents per contract. Another positive sign for the cargo-carrier was the sale of 1,400 puts at the May 6.0 strike price for 74 cents each as some investors hope that shares remain above the breakeven on the trade at $5.26 by expiration. While much of the activity we observed was bullish in the May contract, we did notice that some downside protection was sought at the May 7.5 strike price as about 2,100 in-the-money puts were picked up at an average premium of 1.55 each.

XTO XTO Energy, Inc. – Shares of the oil and gas exploration company have rallied by more than 3% to $35.20. XTO edged onto our ‘most active by options volume’ market scanner after one investor took profits by closing a short put position. It appears that this individual originally established a short position on March 11, 2009, by selling 19,500 puts at the August 22.5 strike price for a premium of 1.86 apiece. Today, he purchased the lot of 19,500 puts at the same strike for an average price of 75 cents apiece. The difference between the two put premiums yields this investor 1.11 today for closing the position. It looks as though he plans to once again profit from a similar trade as he sold 15,000 puts at the August 26 strike price for an average premium of 1.35 apiece.

LGF Lions Gate Entertainment Corporation – The diversified independent producer and distributor of motion pictures jumped to the top of our ‘hot by options volume’ market scanner after one investor…
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Vulcan Materials calendar put spreads predicts continued slide

Today’s tickers: VMC, ORCL, XLU, XHB, XTO, C, MS, HIG & MT

VMC Vulcan Materials Company – The distributor of construction materials must feel a bit left out given its failure to join in the market rebound festivities. Its shares are flat at $36.35 today, just a scant 5% off the 52-week low of $34.32. Vulcan edged onto our ‘hot by options volume’ market scanner after one investor established calendar spread positions in the April and May contracts. We reckon that this investor has already established a short position on the shares which have declined by more than 50% since the start of 2009. By selling April puts and buying those at the same strike in May the investor is opening the door to having stock put to him should the price settle in-the-money by expiration in the nearby April contract. By establishing the long May put positions the investor retains his short position, although only via options since the short stock position was already put back to him. The trade employed 3,000 spreads at each of the 30 and 35 strike contracts, which also lowered the full premium paid for the May put options. This provides a longer amount of time for this trader to watch the stock’s movement, yet enables him to lock down profits should exercise occur. The worst case scenario would be if shares were to rebound above $35 in April because this would devalue his short position, although the April puts would expire worthless while the May puts would decrease in value. Optimally, this trader would like to see shares decline below $30 by expiration in April as the value of the long puts in May would greatly increase and the puts in April would allow him to take delivery of the underlying shares.

ORCL – Oracle Corp. – Despite a drop of 1.5% to $14.86 in shares of the software and server manufacturer, option investors spent 75 cents scooping up calls expiring in January at the 20 strike. Some 20,000 contracts changed hands adding to an existing 70,000 of open interest at the strike. While these investor are setting lofty expectations about an ultimate increase of more than one third for Oracle’s shares within nine months, it wouldn’t take that much to shift the premium on the calls. The 0.27 delta indicates gains of around a quarter for each dollar recovery in…
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Phil's Favorites

Five types of gun laws the Founding Fathers loved

 

Five types of gun laws the Founding Fathers loved

Were muskets in 1777 better regulated than assault rifles in 2017? Jana Shea/Shutterstock.com

Courtesy of Saul Cornell, Fordham University

The Second Amendment is one of the most frequently cited provisions in the American Constitution, but also one of the most poorly understood.

The 27 words that constitute the Second Amendment seem to baffle modern Americans on both the left and right.

Ironically, t...



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Zero Hedge

Amid Soaring Cobalt Prices, Apple Will Buy Direct From Miners

Courtesy of Zero Hedge

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 owners, cobalt traders have moved quickly to price this in.

According to Gl...



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Insider Scoop

25 Stocks Moving In Wednesday's Pre-Market Session

Courtesy of Benzinga.

Gainers
  • Tetraphase Pharmaceuticals Inc (NASDAQ: TTPH) rose 11.5 percent to $2.32 in pre-market trading following announcement of development agreement with Everest Medicines.
  • Cyclacel Pharmaceuticals Inc (NASDAQ: CYCC) rose 8.4 percent to $1.68 in pre-market trading. Cyclacel announced a notice of grant of new European patent covering sapacitabine pharmaceutical formulations.
  • Kirkland Lake Gold Ltd. (NYSE: KL) rose 5.7 percent to $15.00 in pre-market trading...


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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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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!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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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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