Archive for 2006

Closing the “Forgotten Trades” Folder

I was going to get fancy and try to put all these trades in the context of what was going on at the time but, frankly, there is just no enough time in my week for that!

I'm sure you're more interested in getting on with the next year that an elaborate review of the past one and I want to close all these trades out so we can concentrate on our current long-term positions, which already have 23 entries, 8 of which we took this past month.  Those positions are already up 92% but, judging from this year's run, they could still have a long way to go!

As I said in November: "Sometimes it’s nice to just buy something and walk away for a while."  Other than selling calls against, there was little movement from that post until last week, when I began to cash out at what I thought was a market top.  I'll try to give a quick appraisal on each and hopefully we can all learn a little from my successes and mistakes of last year.

Also, let's bear (oops, don't say bear!) in mind that this was a fabulous year – we thought it was a big deal to break 11,000 in January, the extra 1,500 points was just a bonus we took full advantage of!

 

 

=============================================================

 AAPL Jan $55s seemed expensive at $9.40 on 6/20 but we held through the dip by selling the July $60s and collecting $2.50, lowering our base to $6.90.  They went up to $38.40 on 11/24 and I chickened out there and sold the Jan $95s for $6.50, dropping the basis down to $3 and I was able to take that caller out this week for $1, bringing the basis back to $4 - not bad but the $55s had dropped down to $25 and I was lucky to get $29.50 (up 638%) off the table at the close.

We have new Apple plays but I will be a lot more cautious until we get through earnings.  The reason these Apple calls worked so well was we picked them up when they dropped from $86 in January to $55 in June (they went all the way to $50), this is nothing like that now!

I got…
continue reading





Apologies!

Sorry about the mix-up!

Google is not buying AOL, that was last year (they did invest some money but no actual purchase).

I’m doing a very tedious process of transferring entries from the old blog to this one and every once in a while it doesn’t take the old date and posts as new, so don’t trust anything that isn’t titled Yearly Wrap-up or Closing Forgotten Trades, which will be my next new posts.

Sorry about the confusion.

- Phil

 





Monthly Mop-Up

I'm not going to spend too long on this as I'd rather get to the 2006 Year In Review but I hate to short-shrift December, as it was a spectacular month!

 

After cutting back all short-term positions last week to "placeholders" I ended up with no real reason to close out 63 of them despite my reservations about going into a 4-day weekend with a lot of open positions.

We did decide to cover this morning with the DIA Jan $125 puts for $1 and those are, for good or ill, up a quarter already and if I were to apply that quarter to the basis of my existing contracts, we would be in amazing shape, but it's still open so we'll see what the weekend brings – hopefully by Wednesday I'll be adding a dime to the basis each of my existing calls!

So even though the calls are technically +.25 and we're reporting without, we are left with a very optimistic 63 open positions that average 16 days open (up substantially as we have taken few new positions and closed few existing ones) with an average gain of a ridiculous 81% due to a 2,150% gain on the AAPL Feb $80s (basis .10, profit $2.15) and a 1,450% gain on NKE (basis .10, profit $1.45) that are unusual due to very profitable sales against the positions that reduced the basis.

If I drop these down to a mere double the remaining positions are up just 27%, not counting the cover quarter, of course!

Our 22 long-term positions are another story entirely!  Up a stunning 573% due to a ridiculous 11,000% gain on the PD $120 puts we took on 11/22 and have just a nickel basis in with a $5.50 profit.  Throwing that one out we have "just" a 99% gain on 38 average days held.  This is to be expected as the people who make real money in a choppy market are the people selling options, not the people buying them - and it is my job to teach you how to play the house!

In fact, 13 of our open short-term trades have contracts sold against them, the main reason we were able to let so many trades ride!  You'll see when I write up the close…
continue reading





Final Friday of 2006!

Congrats to all on making it through another year!

This has certainly been a fun one for us investors and I’ve sure had a great time writing about it.  I’m not going to get all retrospective as that’s my job for the weekend but I want to wish a very Happy New Year to those of you who are sensible enough to have something better to do on the weekend than hear what I have to say…

Asia was flat today but Australia closed at a record high.  China’s final 2006 growth tally looks like 10.5% and CHL got a little more hope on the long-awaited licenses.

Europe is off a touch this morning but everyone is going home early at this point with not much happening.

I have an easy morning because nothing happened yesterday and we are watching the same downsidelevels as yesterday:

There is likely to be a lot of wild selling today, especially in the few stocks that give people a tax loss for the year to offset a lot of huge gains but they have to be stocks you are willing to live without for 30 days, tricky for losers like Intel or SNDK who could pop at any time.

Apple will get a relief rally and we’ll have to decide what to do with our callers this morning so tune into comments for that discussion.  Let’s not forget that Apple says Apple’s probe clears executives.  While it is highly unlikely they are, at this…
continue reading





Don’t Sit Under the Apple Tree

We often discuss gravity in relation to the stock market in general but, in honor of Sir Isaac Newton, I think it is apropos to discuss gravity as it relates to one particular stock – Apple.

 

As Sir Isaac discovered, when an apple gets to a certain mass, the weight of the Apple becomes greater than the strength of the stem and gravity causes it to break off the tree and fall to the ground (I know, Duh!, but modern physics is based on this guy figuring it out). 

When you want an apple you can either wait for nature to take it's course or you can try shaking the tree to knock a few Apples loose, even though they weren't quite ready to fall just yet.

A stock is much like that, Apple computer's stock in particular looked ripe and juicy (overbought) and there were a lot of people standing around under the tree thinking it would fall to a more reasonable price any moment but the tree (the overall market) just kept growing and the Apple stock just got further and further away from what they wanted to pay (myself included).

Since the Apple stock wasn't really falling on it's own, some people got impatient and tried to shake the tree, using rumor and innuendo in a quiet market week when they thought no one would be watching.  They did manage to shake out a few shares but, in the new age of rapid electronic media (REM),  rumor mongering will only get you so far…

I'm very proud of the discussions that were held on my web-site as well as much good, factual reporting I have read around the web that kept this little incident from depriving our readers of their shares with what looks to be "much ado about nothing." 

While I have been a huge advocate of "wait an see" while the Apple tree was shaking and we have done very well grabbing calls during the panic, I am still glad we did cover those bets by selling other calls against them.  The real issue, the SEC investigation, is still not over so we will have to wait a bit today, perhaps pick up a few higher calls with our profits from our earlier trades…
continue reading





Thursday Wrap-Up

Much better than last Thursday!

I got worried at 11:12 as canaries were dying all over the place but, after going through the virtual portfolio, by 12:59 I still couldn’t find any positions I wanted to close out.  It turned out the markets weren’t as weak as the headlines made them look and the volume just isn’t there to cause us to worry just yet.

We did a pretty good job of holding my morning levels:

So we have 3 sick canaries – the Transports, the SOX and the Russell but none are actively breaking down just yet.  As with any sick bird, this bears (oops – don’t say bear!) careful attention as the slightest breeze can knock them off their perches.

Oil held its perch at $60.53 but failed to get back over my DOWNSIDE target for the week at $60.80 so how can we not be happy with that?  During the day it bounced off the $60 mark before being rescued at 1:30 by the pump team.

Still 299,000 open contracts with just 14 trading days before 299Mb of crude head on the way to Cushing, OK where they need to be offloaded and stored until someone is willing to buy them for $60.53 or more (but anything less than $61 would certainly be a loss).  Don’t hold them too long as all contracts from July ’08 onward went negative again today!

I guess T. Boone read my article because someone bought a whopping 803 Dec 2012 contracts at $64.76 – good luck with those!

The dollar did nothing today but gold jumped a full percent to $634, a wise move into the long weekend but NEM was not impressed for some reason and lagged behind the other miners.  Let’s keep an eye on them tomorrow!  The March $47.50s for $1.75
continue reading





Thursday Morning

Last Thursday was a disaster!

Keep that in mind today as last week was a canary catastrophe when BRK.A dropped below $110K, down 5% for that week and we lost levels on the Nasdaq, S&P, SOX and transports.

In the wrap-up that day I said I wasn't worried and that has worked out nicely for us as we played this rebound correctly but I'm now concerned we are going to ping-pong off these highs and fall into a toppy looking range.  It's very difficult as the markets just don't want to consoilidate any more, it's either up or down with no rest in between.

 

With almost 200 Dow points added on in 2 days we can only conclude that the traders who left (volume is down 40%) felt confident enough not to place a lot of sell orders.  Just holding half of yesterday's gains would be great today and any positive move would be spectacular:

As I said on Tuesday: "The "January effect" when it happens, is a small-cap mover so the NYSE and the Russel should lead the way."

Last Thursday I also said that $60.80 was my downside oil target and here we are so let's not get our hopes too high ahead of inventories today.  As usual, we will keep right on…
continue reading





World Record Wednesday

What a way to end the year!

Dow 12,510!  If only this weren't a low volume week I'd be really psyched right now but we'll certainly take what we can get and we got a lot today…

 

The market reacted very well to the housing news today as the earlier drop in mortgage applications (less chance of Fed hike) balanced perfectly with a rise in new home sales, meaning we may have actually cooled the housing market without crashing it!  While it still remains to be seen – mega kudos to the builders for putting the brakes on (most of them) without getting into too much trouble.

Oil was a great help to the markets with crude falling all the way down to $60.34 after failing to hold $61 early in the day.  With 15 trading days left, the February open contracts still stand at 300M barrels so tomorrow's inventories will be very telling (of course, without a 100M barrel draw, they are still in trouble!).

Most of the energy stocks kept the faith today and I just couldn't resitst the XOM Feb $75 puts when they hit $1.70 at the close.  Hopefully we can buy some more tomorrow for a little less!  Here's an interesting developmentwhile the '07 contracts generally dropped .75 today, '09-'11 contracts dropped over $1 across the board.  If you need to lock in some oil for Dec 2012, $64.80 a barrel is the going price!

Your Gas Is Never Getting Cheaper

Come on peak oil guys!  This is the opportunity of a lifetime…
continue reading





Why be a Wallflower Wednesday?

There's a global stock party going on and I hope we are invited!

The Hang Seng jumped over 400 points to 19,725.  We can no longer ignore the FXI, an ETF of 25 major Chinese stocks that I have been avoiding due to the inclusion of ICBC, a bank with a p/e of 32.  But you can't ignore this chart or what is now going on in China so we will start watching this along with our usual global indexes.

I can't bring myself to buy these stocks at the moment (we do have CHL) but ICBC jumped another 11% this morning, LFC rose 8.2% and Bank of Communications (another holding) gained 6.2%.  Despite these amazing performances, the Hang Seng was out gained by mainland China's market which rose 5.7% this morning to 10,137 - Now that's a Santa Clause Rally!

"People have to realize hedge fund managers from around the world are looking at China, Japan and India as the big plays for next year," said Chris Tang, a fund manager with Marco Polo Investments. "

China is not immune to growing pains though, the CB is concerned about inflation and the auto industry may be overproducing (as Chinese demand is NOT what people tell you).  And please, let's never forget how this economy is being built – it's not all fun and games at the Barbie factory!

The rest of Asia was up but a little more modest than China, who is clearly the life of the party (this is why my 2 girls are learning Mandarin!).  Toyota, Honda and Mazda all gained about 2%, taking the Nikkei to a 7-month high at 17,223 and all of this went on as an earthquake knocked out a lot communications throughout Asia!

Europe continues it's slow but very steady march up, not looking much different than our major exchanges with the CAC, DAX and FTSE all just off slightly from their highs – only they are not fretting over it like our traders are!

Over here, we had a very nice day yesterday and hopefully we can return to looking at our upside targets again.  I am still calling for 75% cash into the long weekend
continue reading





Tuesday Wrap-Up

Hey today went pretty well!

I missed a really good article in Barron’s that may have cheered up investors.  It’s neatly summarized by Eli Hoffmann of Seeking Alpha but the original is worth reading too.

The premise is that US stocks are, in fact, underpriced while our trade and debt woes are highly overstated.  It is similar to many articles I wrote about outsourcing earlier in the year.  I got bored talking about how outsourcing is good back in August but it’s nice to know Barron’s is catching on in December!

Since the Barron’s guys stole my premise (and took all the fun out of it by making it sound all academic),  I beg your indulgence as I reprint my original (8/30) take here:

GDP day! Is the economy in a hard landing, a soft landing or is it in my patent pending Bumpy Landing ™? A bumpy landing means that we have flown too close to the sun on inflated housing and speculative commodity prices which are now losing their lift and we need our other engines to kick in before we lose too much altitude.

The other engines are strong: We deliver the world’s goods with our transports, dominate the Internet, have 95 of the world’s top 100 brand names, supply most of the planet’s junk food (sorry), and even Arabian MTC carries a version of The Simpsons (Al Shamsoon’s, where "Omar" avoids beer and hot dogs (banned) and eats cookies instead of donuts but he still yells at "Badr" and tries to strangle him (what no stoning?)).

It is the flexibility of our culture (otherwise known as lack of artistic integrity) that allows us to export it around the world. We export $1.5T in goods and services around the world.  The much publicized trade deficit of $700Bn is currently close to 50% oil and no one should be surprised that the richest country in the world (by a factor of 4) spends an extra 4% of their GDP on imports!

When you are the richest person in a bar (say with your college friends) do you worry about the drink deficit if you buy an extra round or two? Can you reasonably expect that you should benefit from a drink surplus as poorer friends struggle to keep you in Martinis?  Of course not, the error should always…
continue reading





 
 
 

Zero Hedge

Turkey's Collapse Could Send "Millions" Of Refugees Flooding Into Europe

Courtesy of ZeroHedge. View original post here.

As Turkey braces for a fresh round of US sanctions amid a plummeting lira and what Turkish President Recep Tayyip Erdo?an says is "economic warfare" with Washington over the detention of US pastor Andrew Brunson, millions of refugees - primarily from Northern Africa and neighboring Syria, would likely flood into Europe as the Turkish economy collapses according to ...



more from Tyler

Phil's Favorites

U.S. Media's Use of Its Collective Voice Reveals a Tragic Truth about America

Courtesy of Pam Martens.

By Pam Martens and Russ Martens: August 17, 2018 ~

August 16, 2018 will be remembered as the day there was a collective awakening by America’s media that there was something intrinsically and morally and constitutionally wrong with not just the functioning of the President of the United States – but with America itself.

In response to an August 10 appeal from the Boston Globe to newspaper editorial boards around the country to write and publish their thoughts on Trump’s “dirty war against the free press,” more than 300 newspapers responded yesterday.

The Globe’...



more from Ilene

ValueWalk

The Top 10 Wildest Campaigns Of 2018: Starboard's Stake In Symantec

By ActivistInsight. Originally published at ValueWalk.

This week’s column is a continuation of our 10 “wildest campaigns” of 2018. Find the first part here.

Q2 hedge fund letters, conference, scoops etc

Free-Photos / PixabayTop 10 Wildest Campaigns Of 2018

5. How often does an activist win a proxy contest without support from either of the two main proxy advisory firms? (...



more from ValueWalk

Kimble Charting Solutions

Small Caps attempting 20-year breakout, says Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The Russell 2000 trend remains solidly higher, as it has created a series of higher lows and higher highs inside of rising channel (1) over the past 25-years.

Small caps have been an upside leader in 2018, as they are very near all-time highs.

We applied Fibonacci extension levels to the 2007 highs and 2009 lows at each (2).

Joe Friday Just The Facts Ma’am- Small caps are attempting a dual breakout at (3). 

This is a price point that small-cap bulls would LOVE to see strength and a breakout take place, as monthly momentum is lofty.

...

more from Kimble C.S.

Biotech

Nanomedicine could revolutionise the way we treat TB. Here's how

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

 

Nanomedicine could revolutionise the way we treat TB. Here's how

Nanomedicine could scupper the need for TB patients to take multiple daily tablets with toxic side effects. Daniel Irungu/EPA

Courtesy of Sarah D'Souza, University of the Western Cape and Admire Dube, University of the Western Cape

Tuberculosis is one of the world’s ...



more from Biotech

Insider Scoop

Argus Upgrades Lululemon On Multiple Growth Levers

Courtesy of Benzinga.

Related LULU Benzinga's Top Upgrades, Downgrades For August 16, 2018 3 Retailers Jim Cramer Says Are Winners In A Volatile Sector...

http://www.insidercow.com/ more from Insider

Chart School

Bitcoin Update - 6000 is support

Courtesy of Read the Ticker.

Demand shows it hand at support levels, well it obvious that $6000 BTCUSD is support so far.

More from RTT Tv , Ref: Brazil bitcoin currency , Brazil New Accounts
 


 

Main Chart in video



 

Sure fundamentals...



more from Chart School

Digital Currencies

What is a blockchain token?

 

What is a blockchain token?

What’s this digital token good for, anyway? knipsdesign/Shutterstock.com

Courtesy of Stephen McKeon, University of Oregon

People are just becoming acquainted with the idea of digital money in the form of cryptocurrencies like bitcoin, where transactions are recorded on a secure distributed database called a blockchain. And now along comes a new concept: the blockchain-based token, which I’ve been following as a blockchain researcher a...



more from Bitcoin

Members' Corner

There Are 3 Main Theories That Explain Trump's Approach to Putin and Russia-Which One Makes the Most Sense?

What do you think?

Thom Hartmann suggests that the "Manchurian Candidate theory" is the least likely explanation for Trump's pro-Russia behavior in "There Are 3 Main Theories That Explain Trump’s Approach to Putin and Russia—Which One Makes the Most Sense?" (below).  disagrees and suggests that Putin probably has "the goods" on Trump in "Trump’s Plot Against America". (To be fair, Hartmann acknowledges that his three theories are not mutually exclusive.) Jonathan Chait argues ...



more from Our Members

Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



more from M.T.M.

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 ...



more from OpTrader

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions

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...

more from David





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...

Learn more About Phil >>


As Seen On:




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.

Market Shadows >>