Archive for 2006

Long Weekend Wrap-Up

Wow, who’d have thought we’d end this week positive? Great finish – I got my 10 pts on the Nasdaq and the Dow and the S&P finished nicely as well with the S&P just getting over 1,280 right at the bell! http://finance.yahoo.com/q/bc?t=5d&l=on&z=m&q=l&p=&a=&c=&s=%5Egspc Best news is that the commodities did not lead this rally which is very important as we will need new leadership to withstand a pullback that is very likely on Tuesday if we have a relatively calm geopolitical weekend. Oil finished flat at $71.35 which fits in with our theory that yesterday’s action was the holiday weekend buying coming a day early. AAA anticipates a flat year for the number of trips but also highlighted the possibility that trips may be shorter in length. If this combination leads to a demand surprise to the downside it will call into question the whole Summer driving season, even with Hurricane season looming just around the corner. While we are hearing a lot of talk about how an 800 mile round trip (seems to be the average for “big” driving vacations) “only” costs $40 more than it did last year, the analysts are not taking into account the grinding toll of an extra $10 per week per car for a family that has been sucking up vacation funds all year. Gold was down today until they closed the capital because someone thought they heard gunshots in the parking lot which in the end turned out to be an air hammer but it gave oil and gold traders a chance to push their commodities up into the long weekend – talk about jumpy! I held some positions into the weekend, which is very scary but I liked the finish so we just have to hope the World doesn’t collapse while we are on vacation! ====================================== We had a very good trading week because we stayed in cash and caught the turn at just the right time but, since we only had two actual trading days there is not much to review. ADBE went nowhere but that is expected into earnings and the $30s dropped a nickle to .70. AET was flat after several false starts and the $40s are still .60. DRI is not lighting the world on fire but it is moving nicely and the Oct $40s are $1.35 (up 10%). GE is being a little pokey but the Jul $35s…
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Friday Morning

Personal income was up .5 (a little low/good) and spending was .6, just what was expected but the PCE deflator hit 2.1 which indicates some potential inflation which our markets may worry over but on the whole these are very good numbers. Asia is up triple digits and Europe is looking strong again today so anything less than a .5% move up today will be a big disappointment, even on a short trading day. The Dow and the S&P erased a week of losses yesterday but the Nasdaq still has to make about 10 more points to move past “weak bounce” status. Without the Nasdaq getting it in gear, this “rally” will not last! Oil and gold are still heading up slighlty and should stay up ahead of a long weekend which gives us a whole extra day for something terrible to happen. As long as we see this consistent pattern of trading we know the markets remain jittery about international tensions. Volume should be light today and anything can happen but junior traders (the ones that don’t get to stretch the 3 day weekend into 4 days) can usually be expected to keep the status quo which one would hope will be flat to up today. If the world is kind we can expect a real rally on Tuesday but today is a day I will maintain cautious optimism. The note auction went poorly yesterday so watch for creep on the 10 year, over 5% might turn the markets back down. The Enron verdict sends a message that the markets are being regulated and corporate shenanigans will not be tolerated (when they are caught in such an obvious way at least). Overall this should be good for the markets but in the short-term it is worrying tech and health investors, especially in light of the recent options investigations. ===================================== I’m watching ADBE (6/15) as it looks way oversold but the last quarter wasn’t so great so it’s a tough call. Estimates have drifted down to .30 from .32 in the past 3 months so they don’t need much to pull a beat. Unit sales were good at HPQ and Dell and ORCL and SAP are turning around. The $30s are .75 and expire 4 days after earnings so this is a potential wipeout on bad earnings but could be a great play if they surprise. This is one ugly…
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Thursday Wrap-Up

Well that was much better! It was touch and go for a while as the Nasdaq had a terrible time getting over 2,180 but around 3pm the markets finally decided up was the right way to go. I am very pleased with today’s action and hopefully the Dow can test 11,275 (the 50 dma) tomorrow, just 64 points away. Even better than the majors were the NYSE, with a 1.5% gain and the Russell, which had a 2% gain on the day indicating a nice broad rally. The SOX are still failing to participate but many of those companies are held up in the current options scandal and it is that, rather than technical or fundamental reasons, that is holding back that sector. MRVL is the poster child for a good stock that is being weighed down by the stocks it is associated with. Oil went crazy today and mineral stocks staged a comeback so 1/3 of the rally came from the sectors we would rather see stay down for now. Crude rushed up to $71.32 on long weekend short covering (never short oil into a weekend) with the NYMEX closing early tomorrow. Gold ran up $11 to $648.50 which was all it took for the oversold gold miners to post impressive gains. The Enron trial is finally over and the convictions are good for the market as it improves investor confidence if there are teeth to corporate investigations. It looks like John Snow is finally leaving the White House, another level of uncertainty that needed to be removed. It was a very good day but only a bounce until we get past a 50% retracement of losses so it will take another day of similar gains to get us back on track – that’s a tall order for the day before a holiday weekend! ===================================== I thought we missed the boat on EBay and Yahoo but they just kept going up and up with Ebay logging 12% and Yahoo putting up another 3.5% for the day. Google never quite came down to where we wanted it but I flipped to the $420s in comments and they seem to be working so far at $3.10. The $410s never got below $3.40 and ended the day at $5. XMSR missed my bottom target by .21 and made a nice recovery to $14.25 but SIRI was the star we expected it to…
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Thursday Morning

Asia had another big sell-off today with the Nikkei down 213 and the Hang Seng off 125 while Europe is well up today on holidy trading so it will be gut check time here in the states to see if we are benefiting from global rotation or part of a global collapse.

The dollar is enjoying a bit of a bounce and the pre-markets look promising so we’ll keep our fingers crossed! If this is not a good day on the markets then just SELL SELL SELL and walk away for a while.

As is usual when oil prices start falling, Boone Pickens is a special guest on CNBC telling everyone why they should all be investing in oil and how it will hit $100 based on fundamentals (he actually just said “what terror premium?” in answer to a question). Natural Gas invnetories are out at 10:30 and should set the direction for the day.

In addition to the Valero Rule, keep your eye on CHK for how that data is being taken by a pure play. Expect in the very least a sucker’s rally in oil stocks going into the report with probable shorting opportunities coming from XOM, CVX, OII and VLO assuming they open up, stay up and turn down after the report.

Gold bounced slightly but does not look very good and copper was way off as well so without a big recovery in housing starts we can’t expect a recovery very soon. As I said on the weekend, there is a huge boom in building construction but CNBC doesn’t know how to measure it so it gets ignored but I will be looking to get in once these metals bottom out.

We need a greater than 1% move to confirm an uptrend vs a bounce so unless the Dow goes up 150 points I’m just not going to get too excited. Still in day trading mode, taking profits off the table asap – it worked great yesterday so no reason to change.

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

None of these trades should be taken seriously unless we finish above 1,260 on the SPX (not much to ask for) and over 2,180 on the Nasdaq (I could care less what the Dow does). Anything less than this is a very sad bounce so unless the markets look strong all day, I will be taking very few postions.

MRVL was doing great…
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Wednesday Wrap-Up

As soon as I figure out what those funny green arrows are next to the indexes, I’ll let you know – I vaguely remember seeing something like that once…

Well, while this is nothing to have a party over, it certainly beats the alternative so let’s enjoy it while we can. Now we have to see if we can break barriers on the way up but we’ll worry about that in the morning.

Today I was encouraged by GE finally moving up, HPQ continuing up and YHOO just making a regular event of 3% gains.
http://finance.yahoo.com/q/bc?s=YHOO&t=5d

Speaking of Yahoo, my super patent pending market meter is going green again as Yahoo Financial is getting slow again, indicating interest is picking back up.

It’s still a minefield out there and if you don’t follow the trading rules and take profits quickly you still risk terrible reversals but, on the bright side, most of our picks are working which means we are getting a handle on this mess!

This was another big volume day where we didn’t turn down so a real bottom may be forming but Europe sure didn’t think so today and the Vonage IPO was a disaster (down 12%) but that may just indicate that people aren’t idiots rather than being a comment on market conditions.

EBAY suffered from the poor IPO showing as it makes their Skype acquisition seem not quite so smart but I think Vonage did poorly in large part because no amount of money is going to help them beat EBay, who can afford to give Skype away to their 300M users.

As I said this morning, we certainly didn’t miss much staying mainly in cash as most postions are still down for the day and, now that there are definate signs of life, we can pick the correct sectors to place our bets on tomorrow.

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

The XOM spread payed both ways today with the $62.50s opening at .50 and jumping to .80 where they stayed most of the afternoon. The $57.50 puts opened at .75 and ran all the way to $1.35 before pulling back on the afternoon run up.

COP $60 puts were a thing of beauty peaking out with a head fake on the oil report and dropping all aftenoon but the .95 price was too rich for me and I missed the run to $1.60.

CVX $60 puts
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Watch Out Wednesday

This bird flu thing needs to go away if we are going to get anywhere today. Japan was up 300 points on a drop in the Yen but the Hang Seng went down a bit on Yuan appreciation news. Europe is generally down by over a point and our pre markets are all over the place so it’s a real “enter at your own risk” kind of day. This will be our last chance to turn it around or we may face another 5% drop in the markets so today will be very tough to call, especially with the Flu wild card. Gold is down $7 in Europe to $666 which you can interpret as a sign if you wish or possibly that people aren’t worried about bird flu or that people believe bird flu willl decimate the world economy to such an extent that not even gold will hold value. Oil is trading down too and it’s inventory day so we may get a wild correction there at 10:30 (after the usual head fake). Oil puts will probably be the only thing I play today but there are few obvious plays there as they ended yesterday with only a weak bounce on the whole. Yesterday’s buying was very artificial and could be quickly reversed. I should have taken that vacation yesterday as this is not a market worth playing until this Flu panic goes away (of course, if it turns out to be justified, then watch out!). Let’s watch the S&P again as it is now the 200 dma at 1,260 while the Dow is resting righ on the psychological level of 11,100 and a fall into the 10,900s will probably panic investors into another wave of selling. I cannot emphasize a cash position strongly enough in this market. With all indices below technical levels the chance of missing a large rally is very slim while the chance of participating in a crash is getting better every day. Even if your cash position is 75% of what it was you will be better off than if you lose another 25% of your virtual portfolio as you only have to make a 30% comeback from 75% but you have to make a 100% comeback from 50%! ===================================== I’m not going into any oil play unless it goes the wrong way prior to inventory so I can buy cheap and I…
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Terrible Tuesday Wrap Up

Wow was that ever an awful finish!

The worst part is I had to leave and I went against everything I said this morning and left open calls on the table and wiped out most of my morning’s profits.

This is a classic example of do as I say, not as I do!

It was exactly the kind of rally we didn’t want to see – too much oil and commodities until it caused renewed fears of inflation and flushed all the other participants down the drain. Another factor that flushed the market (and gives me hope for tomorrow) was a report of human to human transmission of bird flu in Jakarta which is already being discounted (but not by people piling into BCRX after hours!).
http://www.msnbc.msn.com/id/12939359/

If this turns out to be false there will be another try at an up day tomorrow as long as oil doesn’t spin out of control but it serves as a great example about how profits MUST be taken off the table as this market needs little excuse to massively sell off.

Another factor weighing on the markets is a persistent rumor that the scandal surrounding the back-dating of stock options may spread to involve hundreds of companies. As we’ve seen (and profited from) this is like your stock having a heart attack from which it may or may not recover (see UNH).

Oil shot up $1.80 to finish at $71.75 and copper was up 12% while gold tacked on about 2% but once again many of the mining stocks failed to respond. Gold traders are smarter (or at least better informed) than you and I and I will take the late dumping in gold stocks as an indication that the bird flu scare is way overdone.

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

Today’s action was really too wacky to review with most of our picks starting out great and ending in disaster – great if you had stops, tragic if you didn’t!

No one was spared in the afternoon sell-off, even PD dropped from 7% to 4% and the oil plays turned down as well, reversing some big gains.

XOM lost a full dollar in the last 90 minutes of trading giving a very clear Valero Signal to get out right around 2:30.

The signal of the day, however was one I called this morning when TXN fell off a cliff at 2pm and began…
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Testy Tuesday

The Nikkei dropped another 250 pts but the other Asian markets were fairly flat. The banking sector got hammered there as Mitsubishi came out with a warning. This may be a unique problem in Japan as they are coming off a zero interest rate environment. India had a nice bounce of 341 points (not reflected in chart yet):
http://stockcharts.com/gallery/?%24bse

Europe is reversing most of yesterday’s steep losses while the US seems to have a little bit of pre-market promise. In comments yesterday I called the bottom pretty accurately at 2:15 but it remains to be seen whether that was the ocean floor or just a reef.

Again today we need to focus on the S&P, which is just 4 points above the 200 dma and will certainly drag the markets down with it if it turns under. The Nasdaq has quite a way to climb before challenging it’s 200 dma from below at 2,230 but any positive finish will be a signal that this may be more than just a pause on the way down.

Until the Nasdaq breaks up there can be no real recovery so I’m still mainly in cash and very suspicious of any profits I actually make. Seeing Lowes get killed yesterday on great earnings and decent guidance reminds me that the market is still very unforgiving and it will take some real leadership to turn it around. The SOX are still killing the Nasdaq which is killing the markets and GLW’s projection for lower flat screen demand is not going to pull them out of it.
http://stockcharts.com/gallery/?%24sox

Oil is back over $70 as contracts roll over to July delivery so today’s action between $70 and $71 will be very telling although the hurricane card is being played with full force, driving natural gas prices back up on fears of another hard season. Oil took a hard bounce off the dollar adjusted 200 dma at $68 yesterday but needs to get all the way back to $74.50 in order to break the 50 dma and resume a real uptrend. This is not how it will be perceived however as I am still the only person in America who adjusts for changes in the dollar!

Gold is holding it’s own for a change after taking a hard bounce yesterday off a dollar adjusted $600 mark. The 50 dma for gold is $620 and…
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Monday Mop-Up

Not a bad day. The S&P held 1,260 which was all we ever wanted for Xmas (we have such low expectations now!) while the Dow barely flinched and the Nasdaq managed to stay off Friday’s lows (really low expectations). I was encouraged by MOT, MSFT and HPQ turning in positive days and Yahoo was only a minor disappointment with a 3% gain. LOW got slammed 4.5% as nothing is good enough for this market but at least they flattened after the initial drop. Gold was flat but most gold stocks continued down while oil had one of those end-of-day BS rallies of almost $1 to finish up for the day although most oil companies weren’t buying it and the sector closed down about a point. It is now up to Eric Schmidt of Google to save the markets which will be interesting as he decimated them last time they let him open his mouth but hope springs eternal and we picked up our Google shares in comments today. Oops, that interview is over and he said nothing, which is an improvement over last time so we’ll see what tomorrow brings! ===================================== Also in comments we pulled a nice reversal on the oil patch and switched our shorts to longs at pretty much just the right time for a very productive day. The Valero rule gave us a very clear sell signal at 2pm for the puts while the buy was just a feeling I had at the time. The 5% rule was very much in effect today as many of the oil puts pulled a reverse off that mark. MUR lost over a dollar before reversing at 2pm and the $50 puts hit $2.20 (up 45%) before scaling back to $1.95 (up 30%). OII had an amazing day with the $65 puts hitting $2.25 (up 50%) before pulling back. XOM opened too low to play and I made a typo in the morning and said the $62.50 puts when I meant the $57.50 puts so just as well… SU flew down too fast in the morning and creeped up the rest of the day. PBR opened way too low and was a disaster all day, the Jul $80 puts were almost in the money and finished at $3.20 (up 70%). MRO was a good choice and was unloved on the recovery as well and the $75 puts are well in…
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Monday Madness

The Nikkei is down 300 pts, the Hang Seng is off 500 pts – not good! India has lost about 5% each of the past 3 days as fears of global rate hikes and inflation scare worldwide investors. European markets are off about a point in early trading and the chance of our markets making an abrupt U-turn to save the world are not too high. The Dow is down 5% in 7 days and has another 300 points before it challenges the 200 dma at 10,850. It is currently more likely that Friday represented a pause before a plunge than a significant reversal. http://stockcharts.com/gallery/?djia The Nasdaq is down 10% in 10 days, a full 40 points below the 200 dma of 2,230. While we would like to think it would turn here we need to be mindful of June-Aug ’04 where the Nasdaq fell 15% over 7 weeks (week 5 being up) while this is only week 2 of a decline: http://stockcharts.com/gallery/?%24comp The S&P has lost 5% over 10 sessions and is resting right above the 200 dma of 1,260 so we can look for the S&P to provide index leadership today. Unfortunately, it is trading down 5 points in pre-market so not much help there: http://stockcharts.com/gallery/?spx At this point, with a cash position, I would rather see a big blow off decline this week so we can feel safer making buys as anything less than a recovery above the 50 dmas will be tenuous at best. With yet another weekend of relative peace under our belts (3 in a row) oil has tumbled another dollar in early trading, blowing through its 50 dma of $68.50 (which is actually it’s 200 dma of $64 when you adjust for the devalued dollar). Taking the adjustment into account, this is a major breach of the 40 wma and continued weakness will take another tol on the oil patch which will make it impossible for the broader markets to recover this week without significant Nasdaq leadership. Iran has said they intend to keep output at the current level and most oil producers will continue to pump into this glut as long as someone is willing to pay them $65 a barrel for oil. They sense the party is coming to an end and they are looking to shove as much oil as possible down our throats while there is residual bidding. Look…
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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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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 failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 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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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.

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