Archive for 2006

Weekly Wrap-Up

I am so glad we stayed out of that one!

At least the markets continued to hold on, with the Nasdaq and S&P coming back strong in the afternoon. The best thing about today is that the markets seem to be at that fear saturation level we talked about where even all this horrible news didn’t keep them down.

Of course most of the market gains came from the oil sector and the commodities exploded in general (hmm, who said that would happen Thursday morning?) so it’s nothing to get too excited about but we’ll take it.

We had to call off the oil trades and I’m very glad we did as they were beyond tricky to make money on – never buy into a strong open!

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Since we are supposed to be almost entirely in cash at the moment, except for longs that are working well (like my Toyotas, CBHs, Apples, CYs, YRCWs and Pfizers) or spreads we are waiting on, I’m not going to do a big review this week.

I grabbed the BTUs I missed yesterday for the price I wanted yesterday ($1.50) because the oil action did not look very sincere. If all they could get out of today’s events was less than $63, then I think we have a huge sell-off if the weekend turns out calm.

I am holding the Golds, of course, as follows:
GG (+3.25%) $22.50s at $3.40
ABX (+2.4%) $30s at .30
BVN (+4.1%) $30s at .55 (up 30% today)
NAK (+2.7%) $6.08
MRB (+10%) $3.12

PD and the miners also had a heck of a day but they’ve been too erratic for my tastes.

RIMM and PALM both had wild days but, as I thought, no resolution. I did successfully short RIMM at $78 mid-day as the run-up was just way too overdone for what little good news they got.
http://finance.yahoo.com/q/bc?s=RIMM&t=1d

Speaking of overdone, Apple’s last 2 days are exactly the reason I like to sell against my long positions! http://finance.yahoo.com/q/bc?s=AAPL&t=5d&l=on&z=m&q=l&c=

BF looks good for next week, it’s held up well the last 2 days.

CME continues to look very good while Google continues to show weakness. GOOG has analyst day next week and they will be facing a hostile crowd who wrote “GOOG” on their fingers with permanent markers…

With oil up $3 the SU $75 puts are only down…
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Friday Update

Holy Crap, something did blow up!!!

Don’t buy oils at the open! Too risky as it was an attempt.

Wait until oil breaks $62, if it does, otherwise just stay away.

Trade very, very carefully if at all as this is starting to look like a James Bond plot to spike the price of global oil.

Can HAL really be worth $72 if they have to start paying hazard rates all over the Middle East? Would it really help XOM if 10% of their capacity is actually blown off-line?

Everything I hoped to gain for the day on oil has already been hit in pre-market, I don’t like this one bit…





Friday Morning

Asia is flat again and Europe is up but not too much so money should find its way over here today. We will have to see if this rally is oil sector driven (therefore a negative) or if it has real legs but I urge caution trading today as the markets look very weak at this height.

The oil manipulations that we discussed at length in yesterday’s comments have borne fruit and driven prices up $1 to $61.73 at Europe’s open. We will have a good test of the trader’s resolve today but their timing is good as people tend to go long on oil over the weekend as it is much more likely that something will blow up vs. someone perfecting cold fusion. In fact, if just one thing does blow up we can get right back to $65 so be prepared!

Also helping oil and driving gold up as well is news that Iraq is now under a daytime curfew (yes, we had to shut down the whole country!). This come after 100 people died just yesterday in Shiite and Sunni clashes. This situation is very, very, very bad (did I mention how very bad it was?). We flat out cannot control a civil war if it breaks out.

Iraq and Nigeria (where they are also rioting) produce 5M barrels of oil a day (and don’t forget Chavez with 2M barrels) and this is just a little too much uncertainty to absorb. I will not go into the fascinating timing that coincides with a mild inventory report (1st in a month) but let’s just say I will be more than a little suspicious if oil stocks sell off into this news.

Buy gold as a hedge. You can buy GLD, which is an index on the actual metal or one of the stocks we like which are 10%+ off their highs of late January. No shorting oil in this environment and no owning stocks either!!! You really, really need to be mainly in cash and taking profits quickly on trades until this particular situation calms down.

Get in, make money, get out. Wash, rinse, repeat… I would rather miss half the rally by not holding overnight than risk the volatility I see ahead. I think the indexes are rangebound at this point anyway, probably until good news from the Fed or March 20th when the Euro oil trading…
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Thursday Wrap-Up

Not a good day today at all!

The markets are holding on to key levels but it’s more of an Indiana Jones holding on to a cliff with snakes waiting for him at the bottom kind of holding, which is not the ideal kind if you are Indiana but it sure is fun to watch.

Great call to stay on the sidelines today (pat pat pat) as well as taking it off the table yesterday. I don’t know if you listen to me when I say these things but at least I listen to myself. I didn’t listen to myself on TOL because I held the silly March calls through the afternoon and lost half of my 30% gain. Now I’m only up 15% in one day and I’m pissed because I was a greedy idiot instead of just being proud of the profit. Of course, the Apr $35s held and increased their gains, although they were up more as well but nothing to kick yourself over. This goes back to a major premise of this column which is: Do as I say, not as I do – I tend to take risks more often than most people should!

Read this morning’s comment section to see how oil has been forced up today. This is just about the last move left in the trader’s bag of tricks as barrels are now laying right on the 200 dma of $61. A downward move from here could be severe.

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Not many of our trade watches would have been worth it today.

VIA gave us the Aug $45s for $1.10 but the recovery was so anemic I’m not sure I want them!

GOOG went up so much I had to take the $370 puts for $10 right at the close. After a $30 (8%) move in 5 days, I’m hoping for a slight pullback tomorrow.

ABX went the complete opposite way due to a guidance warning that expenses are increasing. This hit the whole industry but ABX has a unique situation in Chile working on glaciers with environmentalists staring over their shoulders that may not be repeated among their peers.

I took a small amount of the GG Apr $22.50s for $3.30 but I’m waiting before committing.

OWENQ got away from me with a 26% gain today – oh well…

WMT also took off but not before yielding the Jan ’08 $42.50s
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Thursday Thoughts

Asia is up to its old tricks again with the Nikkei moving up another 314 pts and the Hang Seng rising 176 pts. placing the whole continent on a confirmed uptrend. Hong Kong’s GDP grew 7.3% last year and the province had a budget surplus, perhaps we should elect the Chinese to run our government…

Europe is not sure what to make of this and its markets are all a little off but they are pausing at all-time highs. The only country not in danger of hitting an all-time high (by a long shot) is US!

Oil prices should trade flat into inventories at 10:30 where a 2M barrel build is expected and anything under will rally the sector.

Commodities should hold up in general on robust China numbers and increasing confidence in our own GDP for 2006. If the builders continue to run up, commodities are sure to follow!

Jobless claims were a little light today, indicating a tight labor market and the dollar is dropping a bit so we may be looking directionless unless oil heads back below $60 or one of the Fed Governors drops a hint. Tomorrow is a big day with durable goods orders in the morning.

No trades today. I like keeping it off the table but here are ones I’m watching if we turn up.

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VIA leads today’s earnings reporters with another one of my beloved “Sounds bad but is actually good” reports. The company is reporting a 70% drop in earnings when there is actually a 25% gain because the drop includes (at least) $154M in break-up expenses. Unfortunately, this stock is too widely held by people who won’t be fooled by this so I don’t think the headline will scare too many people off. The only underperforming division was movies and no one takes that too seriously. This is a very powerful company that came away clean from a huge break-up so I like the Aug $45s for $1.25 as a cheap way to get a look at the company in its new configuration.

I don’t think much of Sprint adding 2M customers last year as there seems to have been over 20M new US customers and only 5 carriers so 2M is not very impressive. Sprint has double the “churn” (loss of customer) rate of VZ and that is really going to kill them as we hit saturation but…
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Wednesday Wrap-Up

Wheee! That was a good one…

The indexes all came out of the box running and kept up all day, even the Nasdaq contributed and that was a great accomplishment with Intel doing its best to drag it down with a 2.3% loss on a downgrade. Add the fact that oil stocks were down close to 2% on the average and today’s gains are even more impressive!

Oil really cracked me up today, finishing at $61.05 right at the last minute, as if someone was trying to make a point. The point was lost in the after hours trading where the price quickly dropped down to $60.80, just a tick under a $2 loss for the day.

Gold finished up but the gold stocks weren’t really buying it. Like I said, $565 before anyone will take it seriously again. Copper stocks are also getting hammered, even though the price of copper is holding steady at $220ish. In both these groups I will be excited to buy if they pull back another 10%.

The home group didn’t seem to want to wait to jump up and fortunes were made on our trades of the day (I love it when that happens!). Expectations are now very low for oil inventories so it will take a significant build well above 2M barrels to push these stocks down further.

BTW – Anyone who thinks that this Donald and Martha thing isn’t staged for the media is just too naive to live! His show is out next week, her earnings were out this week, she was talking to Newsweek promoting something when she started it. I’ll take wagers that she shows up as a guest on his show this season and they “make up.” Meanwhile MSO is up 14% today!

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GOOG could not get going as it is losing a complicated court case in which it violated (obviously, one would think) the copyrighted images of a pornmonger. The fact that Google is fighting this case, rather than just paying a fine and agreeing not to show their images, indicates how important porn is to Google. This one will not go away so I’m going away from the idea of buying Google. BIDU also suffered a 50% pullback from the open which didn’t help.

CME had a great day, up $10.42 (2.5%). They are officially no longer tied to Google.

TASR dropped to $9.50 but…
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Wednesday Morning

Europe is flat and Asia is flat to down, the Global markets are pretty much looking to us for direction (talk about the blind leading the blind!). We should be able to recover most of yesterday’s drop so it will be a nice day for some day trading but please take those profits off the table!!!!

The big question of the day is will oil break back below $62 (yes) but I expect it to hold $61. Right now traders are looking for any excuse to keep the prices up and there is no shortage of jitters to point to. Remember, oil pricing is futures so it is always sentiment vs. reality but hopefully tomorrow’s inventory (delayed by holiday) report will serve up a heaping dose of reality for that market.

The big news of today is the CPI which will be critical to a data driven Fed. Unfortunately, in an effort to be more clear, Bernanke has caused more confusion as there is way too much data to try to use any one piece to figure out the Fed. Although the “core” CPI remains a well-behaved .2%, if you include energy you get .7%, quite a bit higher than expected. This means that stocks will have to shrug off oil prices to make real gains today.

Housing numbers should be OK this year, so we’ll take another look at the builders and suppliers.

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

GOOG may be moving back up thanks to BIDU’s great numbers. I like the look of buying the Jun $380s for $31 and hoping I’m right enough to sell the $400s for $10.

TASR got spanked on expected low earnings. Hopefully this will be the last quarter severely impacted by legal costs and they will give us another buy opportunity around $8.50.

BTU ran into the 5% rule yesterday and should pull back. I am tempted to take the $95 puts for $3.20 ahead of inventory as just last Wednesday, the stock was at $85. Gotta use the Valero Rule here. Also, keep your eye on ACI which is a trading pair.

GRMN knocked the cover off the ball with earnings. Too late for this one as it will probably open at an all-time high. COBR has been making great progress in GPS and dominates the radar space already so I like owning this non-optioned stock for $11.88 into tomorrow’s earnings.

I mentioned in comments…
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Tuesday Wrap-Up

Greenspan’s last FOMC minutes were released for dissection today and, although it didn’t say anything new, there was a hint of inflation but a good general report card on the economy but the possibility of more tightening won out and the markets gave up all hope after 2 pm.

It may not seem like much but, after falling from $68 on 2/1 to $59 in 10 sessions this month, oil was having a lot of trouble breaking back over $61 today. The volatility will probably continue until the 3/6 UN Security Council meeting (not that that will resolve anything but it will give everyone something new to talk about).

My Friday morning call for getting out was well timed and today was a good day to watch how everyone behaved so I’ve lined up a few new positions I feel comfortable with but I stress that it is still time for mostly cash until we get a confirmed change of direction.

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Although we should be out of everything, leftover picks that are working on a bad day like today include: BA, JNJ, ACI, TOTD IMAX, TASR. ACI, CCE (kill that one), HD and SHFL.

Back on 2/9 I said “I hate to turn on SNE after making so much money on it last month but, come on, 50% since Nov. on one good quarter? If the Nasdaq falls and Apple doesn’t recover the Jul $45 puts look good at $2.30.” Well, aren’t I clever! (pat pat) Now we need to think of repercussionsssions for the gaming sector including GME, ATVI, THQI , ERTS…?

AQNT is just about going down after posting a “disappointing” 50% increase in Q4 earnings and revenues. You just can’t make some people happy I guess but even if growth slows down to 25%, this stock is still underpriced. We are still way above the 200 dma of $21 and the recent low of $23.25 so I’ll wait a bit but it will be a buy on any turn in tech, especially media.

Why buy the miners when you can buy the people who make their tools? You know, the ones they break every five minutes!? JOYG has been on a tear through this whole mining bull run but it seems very comfortable at $55. I like the income play on this one by taking the Jan $45s for $16.50 and selling the Mar $55s for
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Tuesday Morning

What a difference a day makes!

We averted what would have been a disaster yesterday because our markets were closed while the rest of the world took a bath on worries over Iran, Nigeria, global slowdown, global expansion… you know, the usual.

Turns out things aren’t as bad as they thought yesterday so oil is back at $61.50 after spiking over $62 and the international markets are more than making up for yesterday’s losses led by the Nikkei with a spectacular 450 point jump, more than enough to erase yesterday’s 250 point loss (how’s that for exciting?). Tokyo is still far below its 16,777 high but a couple of more days like today and we’ll punch right through that.

Gold is sticking to the $550 mark so those stocks should rebound a bit but I’m not playing them until there is a confirmed move one way or the other.

With oil and Asia up and gold strong, everything old is new again today and we can expect investors to plow money into whatever worked last year but I think that’s a mistake. In the grand scheme of Global Rotation we have been tracking, the 2005 investment group has been steadily declining and this may be no more than a dead group bounce.

The reality that is hitting the oil patch this week is that even actual supply disruptions (I told you they would have to raise the stakes to move oil) are not going to push oil significantly higher because we just do not need any more oil right now!

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

This is not the chart of a recovery, simply a small test of the 200 dma and 40 wma spurred on by (very coincidental) news. Oil will have to break $63 on volume to really be considered to be on the rebound and any drop back below $60.50 would be a major problem for the sector.

If oil companies like SUN, SU, XTO, HAL and SLB don’t move up close to 2% today, then you can be reasonably certain that this “rally” will be short lived and give us another great shorting opportunity very soon.

Today is a good day to watch from the sidelines unless we get some technical breakthroughs like Nas 2,300, S&P 1,300 and Dow 12,000 (I doubt it) but watch out if this rally is mainly oil based, that is no foundation to…
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Zero Hedge

Bloomberg System Goes Down Ahead Of US Open

Courtesy of ZeroHedge. View original post here.

For the second time in a few months, the Bloomberg Terminal system appears to be down and is causing panic across Wall Street ahead of the US market open...

Traders are not happy...

When Bloomberg panels go down 8 minutes before the open...... pic.twitter.com/pqoQoyoBHj

— NOD (@NOD008) January 17, 2019 ...

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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 ...

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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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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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