Archive for 2006

Weekly Burial

We don’t wrap up this week, we bury it. Actually we shoot it, stab it, poison it, burn it and bludgeon it and then we cut up the body and bury the pieces on opposite ends of the Earth so it can never come back again! But next week may be more of the same, there’s no way to tell from today’s action. Oil sold off to rest right on $68.50 making it a 10% decline in 5 days but the oil stocks barely budged by the end of the day. Gold sold off to $657 making it a 10% decline in 5 days but the gold stocks barely budged by the end of the day. Hmm, something is up but I need to think about what it is over the weekend…. The indices made a brave attempt not to fall off the edge of the earth but with an option expiration day I don’t trust anything that happened today and none of the moves were of note but there was huge volume so perhaps we are setting up for a turn. As I’m in cash I would rather see the market crash another 5% as I would feel safer coming back in. At this level it will be a minefield next week! ====================================== Please please please read the trading rules as I can’t repeat them every day because in this environment it is very unsafe to just make the trades I look at in the morning. I’m thrilled if I can jump in on one out of 4. CMX couldn’t get out of it’s own way today, dropping 6% and the Jun $50 puts opened at $3.30 and finished at $4.80 (up 40%). I’m done with this but we can look at the $45 puts or maybe the $50s again depending on how the investigation looks next week. AMT opened way too low to trade and the Jun $30 puts are already $1.20 but they made a very impressive recovery so we will see if it sticks next week. By the way, important note. Generally, if I’m thinking I would be willing to pay more for an option, I designate it as ($ over premium), like CMX was this morning, as opposed to just picking a number like AMT was this morning. If I pick a straight number then I have no intention of chasing it very far (again…
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Thankfully Friday

One way or another, at least this week is going to finally end!

Asia is up slightly and Europe is down slightle so it is up to us to set a direction today.

Options expiration day so be prepared for anything and everything today. With the indices down 3% for the week on a huge volume drop at yesterday’s close a bounce doesn’t seem likely so I’m going to be expecting it.
http://finance.yahoo.com/q/bc?t=5d&s=%5EDJI&l=on&z=m&q=l&c=&c=%5EGSPC&c=%5EIXIC

In the very least there should be a suckers rally in the morning but even a full point rally will not even qualify as more than a dead market bounce so please don’t get too excited. I will be especially wary about an energy led rally as it is the rise of energy prices finally showing up as inflation that caused the collapse in the first place.

The Nasdaq has not had 9 consecutive days of decline since May of 1984 (which was a pre rally blow off) so we can expect at least some window dressing buyers trying to save it by the day’s end rather than have that be the weekend headline.

I will remain in day trade mode but in fantasy land we are looking for the Dow to hold 11,300 (up 94), the Nasdaq to get over 2,230 (up 25) and the S&P to not go lower than 1,257 (down 3 pts). Anything less than this is no rally at all as we are just trying to retake the low end of the previous bands. Other than the Dow, which has a strong rising 200 dma (the leadership change we are hoping for), we are just hoping to get back to where we were on Jan 1st!

So let’s use the January theory to look at plays for today. The January theory (which we are making up for the day and only applies to today’s situation) says that if your stock is not Dow-like (large cap, global corp) then if it is still higher than Jan 1st it is likely to go down if the market twitches and if it is lower than Jan 1st it should be a rally participant.

Oil is still higher than it was on Jan 1st but not if you apply the the still 7% decline in the dollar which puts the adjusted price at $65.10, just $1 over and also one dollar over the 200…
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Thankless Thursday Wrap-Up

Holy cow is it over yet?

Call the ref – stop the fight before the maket gets brain damage or something!

The Nasdaq broke through the 200 dma yesterday like it was a paper wall and looks like it’s all set to give up another 10% unless there is some actual bad news so it can give up 20…

There is no way the other indices can avoid the sinkhole being formed by the Nasdaq, it’s like a black hole that sucks in everything that gets close and warps space for light years in every direction. There seems to be no hope of escape!

Ah well, there’s nothing to do but watch and wait.

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

MSFT dipped at the day’s end but the $22.50s went all the way to .85 (up 90%) before pulling back to .40 at the end of day.

This is a good time to mention yet again that without tight stops on any profits over 20% you have very little chance of making money in this market.

QCOM went down all day (like everything else) so I didn’t buy my MOT Jul $22.50s, now .45 but it’s looking like we will need to switch to the $20s if this thing doesn’t turn in the next 2 days.

CSCO keeps sneaking up, now at $20.29 but I dumped those calls along with everything else!

If it wasn’t for SHLD tacking on $2.4Bn in market cap what would the indexes have looked like?
http://finance.yahoo.com/q/bc?s=SHLD&t=5d&l=on&z=m&q=l&c=

As I said on GM, just another opportunity to take more shorts! http://finance.yahoo.com/q/bc?s=GM&t=1d

HD also had a nice entry (just .90) on the $37.50s and they hit $1.55 in the afternoon before dropping back to .95 right at the end.

GME thankfully opened too high to buy as it dipped all day from there. As Don said in comments, it was a good day to go fishing.

Apple looks like it’s having a reverse auction as it keeps stopping at different prices to see if anyone will buy it (so far the answer is always no). We’ve seen this before but today they hit the same 200 dma they leaped off of in late March only back then it was down at $57.50 so we will get a chance to see if they really are worth $5 more after that great quarter.
http://finance.yahoo.com/q/bc?s=AAPL&t=5d

Apple has not gone below its
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Thursday Morning

OK, say this with me: It is not my job to save the market. It is not my job to save the market. It is not my job to save the market. Really, it’s not! While they really appreciate your contributions, they really aren’t going to matter much in the grand scheme of things so let the big boys fight it out and we can side with the winner. It may not be brave but it’s smart! Asia got hit hard last night with the Nikkei giving up 220 pts and the Hang Seng dropping 349 points (how sick would you be?) bringing both indexes back to 16,000 ish. If I lived in Japan I would spend much of my time writing about how ridiculous it is to slavishly follow the lead of the Amercian markets but what can you do… The European markets took a very sharp turn after a bad open with the FTSE 100 (the EU Dow) dropping 2%, then gaining 1% and is currently looking flat: http://uk.finance.yahoo.com/q/bc?s=%5EFTSE&t=1d So BEWARE!!! This could happen to us. Just sit back and watch today, catch up on your reading, have a nice lunch out, enjoy the Spring… Cash, cash, cash!!! Oil is making a modest recovery but let’s keep an eye on that $68.50 number, where it will probably open. I will be very surprised if we don’t get a bounce in that sector, however artificial as we are down 7% from last option expiration and about 2.5% below “max pain,” the point at which the majority of options expire worthless. We are also sitting on many critical moving averages and, tempting though it may be to play, I would rather watch and see what happens as I really have no idea at the moment. The same can be said for gold although I feel that gold is being manipulated down the same way I was sure that oil was being manipulated up last week. As with oil, there will be hell to pay on the other side. As with oil, we need to subtract 7% for dollar weakness (see weekend blog) and we find ourselves below the magic $650 level in real money so we are looking for support from the adjusted 50 dma of $665 (from $620). A move below that could trigger a $100 drop. Of course, if we apply a 7% adjustment to gold, then gold…
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Where is the Bottom Wednesday?

Ouch, oooh, bif, pow…

That was so not pretty! I want to thank the Nasdaq for opening so low it triggered me to dump everything at the bell and kept me from buying all day with a woeful performance although even that was enough to outperform the Dow and the S&P today:
http://finance.yahoo.com/q/bc?t=1d&s=%5EIXIC&l=on&z=m&q=l&c=&c=%5EGSPC&c=%5EDJI

It was so sad today that I even got out of my oil puts as I just can’t stand it anymore – I just wanted to take my cash and go! I started mulling over articles like this and I knew it was time to get away for a little while:
http://www.gusmorino.com/pag3/greatdepression/

Yes the similarities are scary aren’t they? I see the reaction to the CPI as an excuse but not the reason the market went down as we have an out of control budget (so more tax cuts are the solution), rising rates, a mess of a war, runaway commodities, falling dollar, rising rates, falling home prices, lower housing starts… take your pick, so inflation was just the last straw today.

I spoke to several suicidal traders today, big city guys who lost millions this week and if we don’t get a turn up soon I think things could get very ugly… The Dow is right on the bottom of a rising line that formed in October and has arrested 4 drops so far but below this place (11,200) we will be looking at something more like last March – April when we lost 900 points in 6 weeks.

It would be remarkable if we stage a turnaround tomorrow. Asia is opening straight down already so we will see in the morning but the charts don’t look pretty:
http://finance.yahoo.com/q/bc?s=%5EIXIC&t=3m&l=on&z=m&q=l&c=%5EGSPC,%5EDJI

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

There’s nothing to review – this is the first time since last October we have had no positions worth holding. I think decliners outpaced advances by more than 5:1 today, truly hopeless! At least volume was huge and leaders sold off so it qualifies as a distribution day – that’s the kind of day where they distribute your money into oblivion!

All the oil puts made amazing amounts of money but again, it’s just monkeys and dartboards in this kind of market so I’m not all that proud of myself…

Even HPQ didn’t have much of a day but it was amazing just to be positive (the only Dow component…
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Wild Wednesday

Markets SHOULD be off to a great start as strong economic news from Japan has started a fire in the rest of the world but inflation is raising its ugly head and the US and European markets are so scared of the Fed that they gave up close to 1% within minutes of a CPI that came in higher than expected. Asia is up triple digits across the board on news of 2-3% GDP growth coming from the World’s second largest economy. As this is up from -.5% to 0% it is quite an improvement. Consumer confidence in Japan also had the best numbers in ten years. At more than twice the size of China’s economy, everything you heard about Chinese demand on raw materials will now apply to Japan as well! After years of malaise there is a real boom beginning in Japan as Tokyo alone has 160 hi-rise projects currently under construction (about as many as in the whole US) which will mean soaring demand for steel and copper. This is already leading to a quick reversal in commodities today. http://www.emporis.com/en/wm/ci/bu/sk/?id=100297 Looking ahead on the Japan situation we can expect a boom in Liquefied Natural Gas and Uranium (their chief sources of power). Japan has 13 nuclear power plants under construction – that’s in a country smaller than California! Unfortunately, all this fun growth will push oil back up too, even though Japan is the most oil efficient nation, it is still the World’s #3 consumer behind the US and China (the least efficient). It should go without saying that gold is back and the dollar is having another bad day to boot! Expect a big snap back in gold today and I am just salivating over the bargain basement prices on miners thanks to that ridiculous sell-off. I will still be watching how the US markets treat gold today but it is obvious the appetite is back in Asia and Europe. My main concern of the day is the 10:30 oil inventory data which could kill the early day oil rally and put additional strain on the markets from that sector so we are going to pray for some real Nasdaq leadership and keep an eye on GE as our bellwether stock. How HPQ is treated will matter a lot and AMAT will let us know if the SOX are forgiven as they had great earnings but…
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Tuesday Wrap-Up

Well that was disappointing! Still a lot of weakness in general but things are looking a little brighter but this was certainly not the turnaround we were looking for. Like I said, better to sit out and miss the beginning of a rally than try to get in the ground floor of a false one. The movement of the Dow, S&P and the Nasadaq do look like they are forming bottoms but tomorrow will have to be a nice up day to confirm this – otherwise we can get stuck at this level for quite a while or perhaps head further down. Any additional downward movement will take us into very ugly territory that I would rather not think about… My number one rally indicator is back on high today as Yahoo Finance is ground to a virtual halt from traffic. I’m guessing the bargain hunters are on a rampage but I suppose it could also be a lot of people getting ready to throw in the towel and “sell in May, go away!” Oil attempted a rally but was sold off big time in the afternoon on fear of a large inventory build tomorrow. Last week’s demand numbers seemed very suspicious to me and if there were indeed shenanigans involved, we can expect the piper to be paid tomorrow as orders that are thrown into one week come out of another eventually. Gold was in rally mode all day, although you wouldn’t know it by looking at the miner stocks other than the fact that they recovered from what was beginning to look like another day of steep losses. HPQ gave us the report we were looking for, roughly 10% over estimates with a matching boost in guidance and a 13% increase in unit shipments so we can hope the Nasdaq gets a boost that will reverse the manic sell-off started by Dell who gave the opposite report last week. ===================================== It was a crummy day but we picked a few winners. I missed most of the day but unfortunately I did play NADQ on news of a downgrade to junk and got killed as the stock jumped up on the news (go figure). Here’s a very interesting document that gives good insight into the battle for the LSE: http://www.londonstockexchange-ir.com/lse/finperformance/reports/results/2006-02-17b/2006-02-17.pdf EBAY Jun $32.50s came down to .75 and then came down some more to .60 (down 20%). IAG had…
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Turnaround Tuesday?

If we are going to turn, it’s going to have to be led by the Nasdaq and large caps as energy continues down and other commodities remain weak – even in the face of continuing dollar weakness. While the Dow may fly the Nasdaq may have a little of trouble if the smaller companies have to drag Microsoft, Intel and Cisco kicking and screaming to higher ground. These companies need to participate for us to really get moving. The Nasdaq thankfully took a little bounce off the 200 dma on big volume yesterday while the S&P took a sharp reverse at right about the same place that the April and March rallies began and held the top of the January and February rallies: http://stockcharts.com/gallery/?spx While we could still have another down day ahead of us, I am smelling a change in the weather! It will, once again, all come down to the SOX and whether they are finally oversold or if they are determined to retest 450. http://stockcharts.com/gallery/?%24sox Asia continues to descend with a 300 point Nikkei loss and another 100 points being chopped off the Hang Seng as their currencies continue to run up against the Dollar while Europe seems to be just about bottoming. After a drop like this, consolidation is the best we can usually hope for – I can’t imagine what news it would take to stage a reversal but it is an expiration week so I stand ready for anything! Oil is rebounding in European trading after testing $69 overnight in Asia USO is now officially lower than where it opened on 4/11 but still .30 above it’s low of 5/8 and is a great example of why I never put money in ETFs! Gold may be bouncing around $680 but it has been the US markets that have been taking it down so we won’t know the bottom until we have an up day on this side of the Atlantic. We have PPI numbers today and CPI numbers tomorrow and Bernanke and Greenspan both have events scheduled which plays into the scenario I was looking for this weekend in which the Fed initiates a turnaround by assuring us there will be a pause. It will likely be Greenspan’s role to prop up the dollar as he has more freedom as an “ex Fed” and also carries more weight in the international community. Today could…
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Monday Mop-Up

Well that wasn’t so bad…

At least the Dow and the S&P stopped falling but good luck finding an actual stock that did well! That is not a broad-based rally but at least we are finally getting a few market leaders who aren’t commodity plays or brokers.

Other than XOM, which had a mystery recovery at the day’s end, oil was off big and metals were off bigger with our short selection, GG, dropping almost 10%.

Oil blew through resistance and dropped to $69.41 (.09 under my morning target) and is ready to challenge my dollar adjusted mark at $68.50 where it should find good support.

Gold dropped another $25 to $685 but the stocks are trading like its $485 so something has to give.

TGT had disappointing sales, dropping 4% and WMT is up to bat tomorrow which will either save or damn the retailers. I must point out the SHLD is holding up nicely during this entire market sell-off but I’m not sure it can withstand bad Wall-Mart news.

I could not be in a better mood as CNBC just announced that Berkshire Hathaway just took a big position in GE! I love it when Warren Buffett backs my plays!

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

I’m not even going to look at Friday’s picks as they all made an obscene amount of money but, if you were like me, you didn’t hold them over the weekend so they are very expensive water under the bridge (but I slept much better having cash!).

The Valero Rule made us a lot of money today as VLO ran up in the morning but turned sharply down with XOM at 10:35. The move was confirmed by a downturn in OIH and the OGX and was followed by a downturn in crude that lasted all day.

http://finance.yahoo.com/q/bc?s=VLO&t=1d

This is a good chance to review the picks as patience and discipline really made us money today!
SU, BP, MDR, OII and PDE did not give us good entry points.

XOM was a big disappointment, the .15 entry was never rewarded as the $60 put never got above .20, even as the stock dropped a full dollar and they finished the day at .10 (down 33%). It would have been much more profitable to play the $62.50 puts (which went from .70 to $1.35 and finished in the money at .85) and next time I won’t be so…
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Just Another Manic Monday

There’s a roller coaster park in England that has one coaster called Oblivion that’s really great because it drops straight down into a pitch black tunnel and you have no idea where the bottom is… http://oneclick.coasterbuzz.com/html/pic.asp?img=/photos/altontowers/oblivion_10.jpg Welcome to today’s market. Wow, what a global disaster today is! Asian markets are off with the Hang Seng dropping 400 points on possible Yuan appreciation but European markets are taking a huge beating at the open, dropping roughly 2% across the board. This chart is not updated but there will be one long red line screaming towards the 50 dma, just about 120 points above it: http://stockcharts.com/gallery/?$HSI Japanese production dropped 5% last month while inflation moved up 2% so the BOJ doesn’t know what to do with itself at the moment, causing a lot of uncertainty on that side of the Pacific. That 5% drop is killing commodities. I also tracked down the catalyst for gold’s drop last week: http://www.thestandard.com.hk/news_detail.asp?pp_cat=22&art_id=18476&sid=7899472&con_type=1 Oil is down $1.60 in early London trading as an OPEC minister says they may be producing a glut of oil (gee where have we heard that before, oh yeah – me!). We will see if we can take out $70 today as nothing blew up over the weekend but the world’s scariest leader is making a speech tonight which may put a floor on prices. The last time we had this kind of breakdown pattern in oil was October when oil went from $70 to $60. Don’t get too excited as this drop began at $75 so we don’t have too much further to fall due to the dollar adjustment which knocks about $4.50 off the apparent price. So I will be looking as $69.50 as a key resistance point but that’s an arbitrary number as the exact calculation is really tricky. $68.50 is certainly the dollar adjusted 200 dma which hasn’t been violated since December ’04. Another factor pushing oil down is Iranian President Mahmoud Ahmadinejad saying he is willing to comply with any decision the UN takes if the resolution is based on international rules. You can take it with a grain of salt but it makes it harder for the fear mongers to make their case this week. With Japan in the toilet and the threat of World Peace breaking out, metals are off huge with copper taking a 10% hit in Asia and gold all the way down…
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ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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

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

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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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