Archive for 2006

Final Friday Report

Sorry my posts have been lagging this week but it’s been a hectic week leading up to my vacation. This will be my last post until next Friday as I will be far away and hopefully having way too much fun to worry about the markets. Although the Dow appeared to have a good day yesterday but a lot of that was the result of MO gaining 6% and XOM gaining 1.5%, adding $10Bn worth of value to the index. The S&P was also boosted by across the board gains in the tobacco sector as they scored a dismissal of a $145Bn lawsuit in Florida. Despite fairly good energy and commoditiy performance and a big move by tobacco, the S&P could hold an early gain over 1,275 and is resting just under it’s 50 dma at 1,274: http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1d AMD cut Q2 sales forecast so forget the Nasdaq today! If I were around I would consider a short on the QQQQs but it’s a very risky momentum trade. http://stockcharts.com/gallery/?comp We can watch the Dow for a signal today as it is 40 points over the 50 dma of 11,180 but I was very, very concerned by the NYSE’s low open and inability to hold 8,200. With all the indices so close to their 50s, today will be highly relevant in setting direction for the quarter. The jobs report was much weaker than expected although wages are creeping up. This news is very stock postiive so anything other than a big rally will be a big disappointment. The dollar has stopped falling for the moment as it is still somehow considered a safety currency for Asian investors as they worry about another dozen test missles dropping in their back yards. Oil is hovering around $75 despite an unexpected build in gasoline stockpiles. You people just keep on buying gas, even at over $3 a gallon so the demand numbers are actually going up. We have record supply and record demand, if either one turns there will be a huge move in this sector. Natural gas has plummeted to $5.60 as the weather predicts a cooler summer, meaning less air conditioning and less hurricanes so it remains to be seen whether oil will follow suit. Gold broke $635 and the question of today is will they hold it? If not, coming into a weekend where Kim Jong Il remains at large, then it…
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Thursday Morning

Asian markets were generally down with Hong Kong being a notable exception on rising commodity stocks. Europe seems optimistic this morning and we will have to see how our own averages handle their technical marks. We are looking for the bottoms we didn’t hold yesterday to firm up a bit today if we should cross over: Dow 11,185, S&P 1,275, NYSE 8,200. Failure at these levels will send us crashing back down again. Will oil hold $75? Will gold break its 50 dma at $635? Both look very bullish and yesterday’s idiotic commoditiy sell-off may give us a chance to pick up some bargains today but my strategy is to hope they run up some more and then start shorting as I really don’t think $75 is sustainable (but I’m not willing to bet on it on a Thursday). This is a real do or die day for the market but I won’t be at all happy if we have another commodity led rally (not like we’ve had any other kind). My real concern though is that we will have no rally at all and set a very negative forward tone. As usual we don’t really care what the Dow does but let’s keep an eye on the S&P and the NYSE to see if we should play at all. I will not be playing as I have meetings but ===================================== In addition to the beaten down issues from Monday’s list, we should be looking at a couple of underperforming oil and gold plays but only if oil breaks and holds $75 and gold is up, even if only a little. Don’t forget oil inventories today so watch out for the 10:30 report and watch that Valero Rule! AU dropped 4% yesterday for no reason and I misprinted $55s when I meant $50s yesterday. The $50s are now 1/2 price at .80. SUN has been underporforming for good reason, they totally blew last quarter, but I think the refining issues should be behind them and this quarter should go much better. The $70s are $1.45 but watch the 50 dma at $70. SLB is resting on it’s 50 at $64 so I like the $65s for $2, stopping out if it dips below that line. PTEN is way oversold and the Aug $27.50s are $2.15. Business is good at the strip clubs: RICK is up 21% in June with a…
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Wednesday Wrap-Up

All the indices we tracked this morning fell below the 50 dma and stayed there yet everyone is spinning this as some kind of good thing. Maybe I’m missing something or maybe it’s another one of those times when I’m right and everyone else is wrong.

Had oil not made a spectacular mid-day comeback today would have been way over 100 points down as just about everything was sold off today.

Oil broke $75 per barrel which you would think is a bad thing but oil at that level was a spark for the early may rally we just had (remember when stocks used to go up?):
http://finance.yahoo.com/q/bc?t=3m&s=%5EDJI&l=on&z=m&q=l&c=uso

Gold sold off in the morning but recovered at the day’s end to hold the day’s high but someone was relentlessly selling miners this morning and buyers were shy about coming back in. It looked like a Euro fund based on the timing so maybe they know something that we don’t but I am now very excited (but wary) about some of the gold trades.

Next Monday is earnings and all this news will fade into the background but even the death of Kenneth Lay couldn’t change todays nuclear topic and nobody seemed very interested in buying on the dips.

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

TRMP stayed down all day and the Jan $20 puts finished at $2.50 (up 25%). I would expect 1-2% drops every day that Jersey keeps them shut down but a nice rebound when it ends – if we go into the weekned on strike it could be a disaster for them.

WMT took another 1% dip today and the $47.50 puts are now in the money at .95 (up 170%) while the August $47.50 puts have run up to $1.45 (up 95%).

Good call taking the money early on GM as it rebounded a bit in the afternoon. This could go either way in the short term but I’d be shorting Nissan if they actually take on this mess.

MRVL said “what 5% rule” and crashed right down to an 8% loss:
http://finance.yahoo.com/q/bc?s=MRVL&t=1d

Oddly, on a day like today, CME finally crashed through $500 again but still shy of it’s high. For shame on Google for being beaten to the punch…

My rail stocks are holding up as the economy is simply on fire but I want to see how tomorrow shakes out with all the strange…
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War on Wednesday

War! Nuclear war! Wow, talk about a fear factor, this is all they are talking about on the news…

Did you ever imagine we would be worried about North Korea attacking us? This will be a major test of market resolve, not today, but tomorrow if we get a bounce. It will also be worth watching today’s levels as we have many crosses to bear.

How low will the Nasdaq go? Will is hold 2125, where it began Thursday? The Dow is resting just above the 50 dma of 11,185 and the S&P is just above its 50 of 1,275. We should open below both of those marks and the real question is can we get back over it? The NYSE is also just above its 50 at 8,200.

We have indications from ADP that jobs numbers will be a blowout this month indicating the Fed is far from done but everything needs to be on hold while this Iran/Korea thing plays out.

Mark has to be happy as we will now see how high gold can really go but I would be taking this week’s profits off the table as this initial reaction is usually an overreaction. AU and MRB are still the lagging gold stocks and AU $55s make a momentum play at $1.95.

Oil, surprisingly is not going up on this new threat, yet another indication that we need actual supply interruptions to push past $75.

It goes without saying that we will have a weak open today. If we hold our technicals it might be a great time to pick up all those stocks we missed last week on the gaps. All of last week’s picks are still in play on a pullback as long as we don’t break further down on the 50s.

I’m still sitting on my GM puts and DIA puts from Monday afternoon but I’ll be getting out of both if there’s even a hint of the market holding up. My problem with this “rally” is the same as it has been, we never hit a good bottom and, as we discussed in chart school earlier in the month, we are just barely at the Fibonacci retracement point, not quite enough to confirm the bulls.

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

Cash, cash, cash and gold are the only things to hold in a panic but the reality is that the long-range missle test failed so Korea…
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Monday Morning

I was away so no weekly wrap-up other than to say Friday was very disappointing and I am very concerned about this week. We were worried about a Fed party hangover on Friday morning and that’s exactly what we got – the market woke up and quickly went back to bed on anemic trading.

The Asian markets posted small gains last night and Europe is trading flat to up so it will likely fall to US traders to set market direction. We can’t place any confidence in today’s action as most of the traders are off today and anything other than light volume will be surprising.

The Dow came to rest a bit under the 50 dma of 11,187 but was soundly rejected from that mark in intraday trading. The S&P bounced off its rapidly declining 50 at 1,262 in a set-up that does not look at all encouraging while the Nasdaq is 30 points away from being rejected by its 50 at 2,208. The NYSE posted the strongest gains but was also pushed down from its 50 dma of 8,200. With all these indices so close to critical tests, this short, holiday week is likely to set the tone for the entire Summer.

Oil is hitting $74 in the overninghts and gold is way up at $617 as the dollar falls off a cliff, crashing right through 50 day resistance to lose 3 weeks worth of hard fought gains:
http://stockcharts.com/gallery/?%24usd

Possible acquistion talks will boost Dow component AA today while GM is enjoying their rumor while it lasts with a 10% leap in share prices. I occurs to me that a pump-up like this give Kerkorian the excuse to finally dump his shares if they can’t form the alliance that he instigated in the first place.

Today should be an up day as there is no particular reason for it to go down and anything negative will be a big concern. With light volume we can assume that buyers will be scarce so sellers will want to hold out until Wednesday to get a decent price.

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

Now that the second quarter is closed we are back on earnings watch.

WMT had disappointing numbers again and should sell off. The $47.50 puts are just .35 but I prefer the Aug $47.50s for .75 bearing in mind that that is exactly the 50 dma.

AAPL is still out…
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Phil's Favorites

Brexit identities: how Leave versus Remain replaced Conservative versus Labour affiliations of British voters

 

Brexit identities: how Leave versus Remain replaced Conservative versus Labour affiliations of British voters

Courtesy of Geoffrey Evans, University of Oxford and Florian Schaffner, University of Oxford

British politics was relatively stable in the post-war decades, and voters’ strong party loyalties were influenced by their place in society. More recently, there has been a marked decline in the number of people identifying with a political party, and in the strength of that attachment.

Now, our new research for a repor...



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Zero Hedge

Stocks Jump On Kudlow Denial: "There Is No Cancellation. None. Zero."

Courtesy of ZeroHedge. View original post here.

"There are no cancellations. None. Zero. Let's put that to rest."

Hours after a headline from the FT about the US cancelling a round of trade talks with two senior Chinese ministers send stocks reeling to their lows of the day, the administration has dispatched Larry Kudlow (who apparently had to wait until 20 mins before the close thanks to CNBC's wall-to-wall Davos coverage) to jawbone the markets back into the green by...



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Kimble Charting Solutions

S&P and Crude both testing key breakout levels!

Courtesy of Chris Kimble.

The correlation between Crude Oil and the S&P 500 has been rather high over the last 100-days, as each looks to have peaked at the same time around the 1st of October at (1).

After peaking together in October, Crude fell over 40% and the S&P nearly declined 20%, with both bottoming on Christmas Eve at each (2).

Both have experienced counter-trend rallies since the lows, as Crude is up 23% and the S&P 13%.

These rallies have both testing dual resist...



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Insider Scoop

Cowen Suits Up With Nike, Looks To Outperform

Courtesy of Benzinga.

Related NKE Consumer Discretionary Q4 Earnings: U.S. Consumer Appears Strong Amid Heightened Global Uncertainty Golf Equipmen...

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Chart School

Weekly Market Recap Jan 20, 2019

Courtesy of Blain.

After entering the week quite overbought, indexes took a small retreat Monday before hurling back upwards.  This is typical of the “V” shaped moves up after any significant selloff, we’ve seen most of the past decade and watching them unfurl is quite amazing actually.  Thought maybe this time would be “different” but not so much.  So two week’s ago we asked “Has the Fed solved all the market’s problem in 1 speech?” – and thus far the market has answered resoundingly yes.  The word of the year thus far in 2019 is “patience” as that simple insert into a speech change the whole complexion of everything.

China has also been busy stimulating; on Tuesday:

An announcement from the People’s Bank of China that ...



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ValueWalk

Everyone Else Is Selling Stocks, So Is It Time To Buy?

By Michelle Jones. Originally published at ValueWalk.

After a difficult few trading days in the beginning of the year, U.S. stocks are bouncing back with meaningful gains on Monday following Friday’s strong rally. The S&P 500, Dow Jones Industrial Average and Nasdaq 100 were all up by more than half a percent by midday. It looks like investors could be taking advantage of the end-of-the-year declines, but is this a wise time to be buying?

Trying to time the bottom of the market will almost always be a fool’s errand, but one firm suggests equities could have much farther to fall before they hit bottom in 2019.

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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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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

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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:

 

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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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