Archive for 2006

Friday!!!

This is going to be a biggie but, if the jobs report comes in between 175-275K (unemployment at 4.8-4.9) , then I am now officially calling for a rally. Too high and inflation fears kick in. Too low and the Fed overdid it and wrecked the economy.

I think we will get a Goldilocks number on the jobs because the estimates are through the roof (whisper # is over 300K) but I think that is skewed by the vauneted “Monster Index” which showed great strength. While they may be right, they only measure the kind of jobs that people use on-line job systems for – tech stocks. That’s just the rally sector I’m looking for!

Why do I think all the analysts are wrong? Ford, GM, Mattel, Time Warner and others all announced layoffs recently, that means they’re not hiring! Unless they are all just really awful companies (GM is) then their competitors are not hiring either.

If the indexes go down I am wrong and we go back to cash but let’s just pick up whatever picks got most beaten up as long as they aren’t home builders or oil companys.

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

I was wrong about VOLVY get out early if you are in, they are an ADR in the states so it might not move too quickly.

I won’t be here today but here’s a quick few if the market turns up and stays up only:

PFE Mar $25s for $1.05 – low risk
AAPL Jan $65 for $16 + Sell the Mar $75 for $3.20 – med risk
(#)DIA Mar $110 calls for $1.15 + (1.5x#)Mar $106 puts for .65 – low risk
QQQQ Mar $42 for .80 + Mar $41 puts for .75
BUD Mar $40 for $1.50 (I remember why I like this, they locked up the whole superbowl)
BA March $75′s are just .30! How can you not?
DOW Mar $40s for $2.80 if nat gas continues down
MOT Mar $22.50s for .70

Plenty of time to short oil next week. I think housing will soft land so I’m not anxious to short builders with a p/e of





Oil the World’s a Stage!

Asia is down today and Europe is up slightly while US futures look improved but all that is meaningless until the 8:30 jobs report.

I have blogged the planet all night and my conclusion remains that we are experiencing a global rotation out of Asia and into US equities. This could have been predicted by those who follow the dogma that, once you read about something like the resurgence of Asia on the cover of Newsweek, youÂ?ve already missed the boat.

So our money took a slow boat to China and now it is on the way back but it looks like it may be getting wired back so we might get a pretty quick reaction. If I’m right, then the markets will hold their critical levels today and Monday.

This is a unique opportunity to watch as virtually every index but the AMEX (which is still very strong) is resting at right about the 50 dma. Every index is also forming a nice flag pattern on the 40 week moving average that can easily signal a strong upside breakout if we can make new highs.

Gold is being held down by continued dollar strength (thanks to that last rate hike, we are simply paying more interest than anyone else if you buy our money) but it will be very surprising if the dollar can crack $1.20 for the Euro so we are close to what at least should be a resistance point on currency. Don’t forget we have a March 20 flood of dollars coming back from the shift of oil contracts to Euros but this will not occur to CNBC until March 1st (it’s too complicated to be a good story anyway).

Oil now has to contend with $65. If the IAEA does not sanction Iran today (they won’t) then we could lose another $2 today on the way to a full meltdown. We have 15% more natural gas in storage than we had last year at this time and it cost 35% less at the time! So fear factor = 35%, just like oil which was at $43 last Feb 10th!

Last Feb, XOM was at $42. My old readersrememberr the old rule: “The price of Exxon = the price of a barrel of oil.” Sales at Exxon are meaningless, what you are paying for is a company that holds the contracts on 10% of the planet’s…
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Thursday Wrap-Up

What a disaster!

The worst thing is there was no actual reason for it. The sell-off started because there was a rumor floating that the terror alert level was being raised but, even after it was determined to be false, no one wanted to buy anything back.

But:

Gold was flat – indicating no particular international tensions
Oil was down – indicating the Iran crisis is fading
Bonds were flat – indicating money is waiting to come in to the markets

There is a fear of a big employment number that is dominating the markets. Jobs up more than 275,000 will be a big problem in the morning. I will be on the way to Vermont with my cash because I took my own advice this morning and got out although I did take small chunks of the stocks I mentioned earlier (20% of my goal) and decided not to sell them as I really think/hope tomorrow will give us a Nikkei style comeback.

I said a couple of days ago that we are just about hitting peak fear in the markets. Maybe one more day and then, when everyone wakes up Monday to find the world intact, we should shake this off and get back to our rally.

The most important thing, the thing you need to watch is this chart:

http://stockcharts.com/gallery/?$SPX

We are still moving right along an uptrending 50 dma and, although we may trade flat for a few days, we are in no real danger unless the S&P stays below 1,270 tomorrow. You can see how on last Wednesday, the index went below the line all the way to 1,259.42 BUT IT DID NOT FINISH BELOW THE LINE. That is critical. That bottom test led to a fabulous Thursday and Friday last week. Read down to Wednesday the 25th or better yet start at Friday the 20th when we lost 200 Dow points in one day (and that was below the 50 dma but the Dow is a terrible indicator).

We did not have the sort of massive sell-off we needed to really clear out all the fraidy cats so we will have to wait until tomorrow or perhaps Monday to recommit.

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

Amazon is out with what looks like disastrous earnings but actually are quite good because the quarter they are being compared to had a one-time gain that didn’t happen this quarter…
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Rock Bottom

Well, this is it.

2:40 is the close of oil trading and it looks like $64.50/bbl (-$2) for today.

Thank goodness for those oil puts and SBUX or today would have been a disaster!

Now is the time, the market either recovers or I go 100% cash in the next 30 minutes.

I still say recover but we’ll see.





Bottom Fishing

The natural gas number was bigger than expected and even the groundhog couldn’t save oil sentiment! I may have rose colored glasses but I see this as sector rotation.

Treasuries are not reacting to the productivity numbers, indicating the markets are overreacting.

These are stocks I am eyeing at the moment:

AAPL – $72.50 @ 2.85
AIG – $65 puts @ .75 (day trade on indictments)
ABX – Mar $30s @ $2
BUD – Mar $40s @ $1.50
DOW – Mar $40s @ $2.8
EK – Mar $25s @ $1
GM – $22.50 @ 1.60 (I know but it’s a day trade!)
PD – $165s @ $2.55 (cheaper than Apple)
SUN – $90 calls @ 1.70 (yes the put trade is over – look at VLO!) to be paired with XOM – $62.50 puts @ $1.90 (just in case it goes the other way)

Well, Europe just closed down 1% so either the money starts heading over here soon or we need to pack this one up and put the cash under the mattress!

Later,

- Phil





An Unproductive Morning

I’m watching today’s trades and trying to figure out what is happening.

It seems to be 2 major factors.

1 – The energy sector is collapsing, we knew this.

2 – Productivity was down .6% for the quarter.

Productivity going down plus hiring going up tomorrow is sure to freak out the markets but since the productivity number is for Q4 which includes hurricane issues plus a poorly placed holiday season, I just don’t want to give it that kind of weight.

I’ve been buying here, just a bit, looking for a floor. Those oil puts really saved me today!

XOM may be the last oil company to turn off the lights to the downside but oil under $65 will make it succumb to the gravity of the sector. The $62.50 puts seem right at $1.80 (a .80 premium).

Take the profits on SUN if you made that trade! The $90 put went from $1.30 to $5.20 so at least sell half – just in case.

The SU’s still have a way to go – I’m hoping for $75 but will get out if VLO starts coming back.

RIMM had a massive sell-off this morning which I saw as a chance to double up on my calls, it’s recovering already. Before you panic about things like this, look at the daily charts:
http://stockcharts.com/gallery/?rimm
See, now that doesn’t look bad at all does it?

“They” are so scared to let Google drop negative it’s almost funny. I think the damn is breaking and I am 100% negative at the moment.





Thursday Morning

Hmmm. The Nikkei posted a new 5 year high. Other Asian markets are mixed and Europe is off a bit but also holding 5 year highs. We are looking to hold roughly the same technicals as yesterday: Dow – over 10,950 is positive, under 10,900 is negative Nasdaq – must hold 2,300 any negative move is reason to worry S&P – must hold 1,280 but 1,285+ will be very positive Yesterday the markets did very well despite oil and housing drops – that signals the start of a very positive leadership change. Those sectors may exhibit continued weakness today while the new leaders (large caps, manufacturing) pull back a bit so the morning, at least should be down. Oil is on hold pending natural gas inventories at 10:30 (and a flat dollar pending the ECB rate decision) but gold is on fire at $575! The consensus is a dead wrong expectation for a drawdown on natural gas – I can’t even imagine what these analysts are thinking – so look for a lot of action on any kind of gas build at 10:30. If oil drops below $66 after inventories, then expect the market to take off. Also, look for oil markets to partially trade on the sole basis of whether or not a rodent that is poked out of a box with a stick will or will not see his shadow (do you think he’s even looking?). I am not kidding! It’s a sunny day so the bull traders will be keeping the hope alive that it will mean 6 more weeks of winter. My take on this is that this winter has been just like Spring anyway so bring it on! Groundhog Day, by the way, is one of my favorite movies. We are really not that far up the socio/evolutionary development ladder from the people who sacrificed virgins to volcanos you know… If you take out the dollar factor yesterday, this will be gold’s second $7 move in a row. Perhaps it is the Iran factor (btw Iran, Iran, Iran, Iran has replaced Google, Google, Google, Google for today) but I think a lot of currency traders are hedging with gold until they figure out where the dollar/euro ratio will settle in March. This means that gold will be the play of the day as many of the stocks mistook yesterdays slight drop in price as a…
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Oil’s Well That Ends Well?

My thanks to dachestmeister for putting me on to this thought!

A funny thing happened on the way to $70 oil yesterday.

The dollar jumped up on Fed tightening on the exact same day that oil was gapping up towards $70/bbl. This caused oil to actually decline for 2 days, just as it was poised to make a new high.

US traders don’t think about the dollar at all and see yesterday’s action as a technical failure to break $69/bbl. This coupled with the fact that we are, in fact, swimming in oil can easily send prices below $65 this week or next. That, in turn will cause the weekly chart to look like we made a lower high for the first time all year which could lead to a total collapse to $60 or less!

http://stockcharts.com/gallery/?%24wtic

On the daily chart you can see how the above circumstances accidently formed what they call a double top, just under $69. This is a devastating sign to chart watchers! Even worse, yesterday’s price gapped down as the dollar effect hit before trading opened, and the price never moved up into the gap. This movement came in spite of what the traders felt was pretty bullish (for oil) news from Iran.

Now the world is made up of all sorts of traders – Momentum traders, fundamentalists and chartists being the main groups.

The fundamental players are split into two camps. There are the Chicken Little “peak oil” types who say we are running out of oil (we are, some day) and the ones who actually look in the tanks to see how much oil we have today vs. how much we need for the week/month/year…

The momentum players don’t care about anything except which direction the volume is taking them, this strategy is great if you have millions of dollars worth of computers to track things with.

The chartists are like momentum players but they are looking for discernible patterns that evolve over time. Human beings are hardwired to look for patterns in everything, like the people who write down what numbers previously hit in roulette in order to predict the next number.

Funds are ruled by chartists, that is the reason I pay so much attention to charts… While I think the logic is flawed, I accept to the fact that everyone else has so much faith in them that they must…
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Wednesday Wheee!

Holy cow! Talk about a day going just right… Except Google. Never, ever, ever short Google! Well, at least until next time they are so overbought. I bought 35 current $420 calls to cover my 70 March $270 puts right at the bell because I couldn’t stand to get killed overnight – I’ve never seen anything like this… Anyway, we got everything we could have wished for today! All the indexes held support levels with strength all day, against a Fed increase and a Google crash (albeit temporary, it looks like) this is amazing performance – look out Nikkei, here we come! Oil collapsed, but not over inventory builds like they are telling you in the press. Although the builds just can’t be ignored at this level (there is nowhere left to store the stuff!), there was a much simpler reason oil went down 1.7% today – The dollar went up 1.5%! Why don’t people understand this? Here is a quick read explaining this that I should retitle Dollars for Dummies: http://philstocks.blogspot.com/2005/11/oils-dirty-little-secret.html If you were reading the comments you caught some great intraday trading opportunities – there is nothing better than a day when the market turns like this. I am down to 25% cash today – that is my limit and I hate doing it but I didn’t have anything I wanted to sell! Gold stayed under $570 almost all day and those stocks got hammered (although the dollar rise also caused $7 to be shaved off the price so we may be grabbing gold stocks on sale tomorrow). ===================================== Way back on 1/20 we played a spread on SBUX where we took the $32.50 calls for .50 and the $30 puts for .50 for a play into earnings. Earnings looked pretty good and we should be well in the money with the calls tomorrow! I was worried about my SU puts for a while but it worked out just fine (but not as well as the SUN $90 puts which went from under $1.30 to $1.90 already). TWX has a heck of a nice day with out March $17s ending up just shy of 50% up. I see no reason to sell this but I would expect a pullback to around $18 after this huge run-up so sell it if you need cash as this position is very easy to get back into. BA did save the DOW…
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Wild Wednesday

This is going to be great!

If you have been taking my advice you are loaded up with cash and ready for today. We have a lot of excellent indicators to guide us through the day, a benchmark Nasdaq component in crisis and a market moving oil report at 10:30.

Google, google, google, google. There, I said it. If you are not sick of it yet – you will be by 4pm! The higher it opens today, the more I want to short it. I will try to work into a new March spread based on momentum – look to the comment section of this article for intra-day updates.

The Nikkei dropped 169 pts today (1%, not a big move for them) but other Asian markets are flat. Europe had a bad start but improved nicely during the day (+ .5%) and I expect the same from our markets. Remember, if they aren’t buying world markets then ours must really be bad if no one wants that either! It means that global investors feel that cash is better than US stocks.

If the Dow holds 10,850 then it is superbull time but even 10,825 will be a great sign. The Nasdaq can’t help being pummelled today with heavyweight Google dropping $16Bn in value this morning and other techs having sympathy pains. This is patently ridiculous as any of those other companies would kill for Google’s numbers! If, somehow, the Nasdaq makes it back to 2,300 today, just buy anything that isn’t nailed down. 2,275 would be great but I will only be concerned if we fall below the 50 dma of 2,268.

The S&P will be the most rational indicator of the day and 1,280 will be the threshold test. If the S&P can’t shake this off (Google is not a member) then we will have to wait this out.

Gold was sold off in Asia and is recovering a bit in Europe, I think the US will take it back over $570 today but if not, get out of gold fast!

Oil is surprisingly strong coming in to what I think will be another strong inventory build and no cold snap in site.

Mortgage applications declined again, another blow to the housing market. PHM has earnings tomorrow and will give us a good indicator.

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

Today we’ll see how those TWX March $17s perform. We picked them up Monday…
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Zero Hedge

Americans' Economic Hope Has Collapsed

Courtesy of ZeroHedge. View original post here.

Which came first, the confidence or the stock market rally?

One thing is for sure, the crash in stocks in December has crushed the hope of Americans that their economic future is going to be better under President Trump.

Overall confidence dipped to 58.1 - a 4-month low, but, U.S. consumers this month were the most downbeat on the economy since November 2016, a third straight drop after expectations reached a 16-year high just three months earlier, as the partial government shutdown wears on toward a fourth week.

...



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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...



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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?

 

Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?

...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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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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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

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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