Archive for 2007

Weekly Wrap-Up

How did I end up so bullish?

One great thing about writing a daily column like this is it forces me to be introspective and I highly recommend all of you take time to review your thinking once in a while as learning to be critical of your own Thought process can stop you from making all sorts of mistakes while learning to trust yourself can help you to make all sorts of money!

On 2/20, when the market was at it's dead top and our pals at the WSJ headlined: "The markets are moving into a sweet spot" and that "the mood is downright bullish."  This caused me to say: "While I’d love to go gung-ho bullish here, we are at an inflection point and we need to break out right here, right now to make a real rally of it.  We’ll be looking to pick up our weekend plays but this is no time to be rushing into anything until we get some better signals.  Be very careful out there!"Just 14 days later, on March 6th, the Dow had dropped 700 points and I was in a very contrarian mood saying:  "I’m not a contrarian by nature but I am usually ahead of the curve, when the curve catches up to us it’s often time to change trains (that sentence is sponsored by Metaphor Mixers, Inc.).  So today I’m feeling much better about my bullish sentiment as only 29% of the bloggers polled agree with me.  That’s my comfort zone!"

Then those pesky Iranians took British hostages and derailed our nice recovery, but not for long and when you see the market recovering from blow after blow after blow, it's a little silly not to be bullish isn't it?  Now to be clear, I'm bullish and mainly in cash as we relentlessly took positions off the table during March but that allowed us to take advantage of some opportunities last week and gave us plenty of dry powder to initiate a new round of oil puts.  While I have been happy to go with the flow in the markets, perhaps I am getting to be too much of a perma-bear on oil…  On 3/25 I said:   "Ahead of Wednesday’s oil inventories I said "I still have my COP covers if it’s bullish and I guess I would go
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Thursday Virtual Portfolio Moves

Posted April 5, 2007 at 10:33 am | Permalink (Edit)
  • DD $50s for .35 are a nice mo play here
Posted April 5, 2007 at 10:36 am | Permalink (Edit)
  • BTU $45 puts for $1.80 as mo play
    • out at $1.60 with a .30 Tstop.
Posted April 5, 2007 at 11:30 am | Permalink (Edit)

LLY – up 171%, can’t hold into the weekend, I’m going to ask $1 on half and leave the rest with a .75 (.25 trail) stop.

ICE is going to be for some wild trading. If they do the deal, they will drop back down, if they don’t do it, they may go back to $140. Now is a good time for a spread – I like the $125 puts for $2.20 at the moment, we’ll pick up calls on the dip. XXX These are small entries with the aim of averageing a spread of the $125 puts and $135 calls at about $1.50 each and then hoping for a big move.

Posted April 5, 2007 at 12:34 pm | Permalink (Edit)

ICE – That being said, they look strong here at $129 so I’m taking the $135s for $1.85 to cover my calls. My goal is to work down to $ 1.25 so I’ll be looking to DD on whichever one hits $1 (unless the mo is crazy)

RIMM – DD on my $130 puts at .75, brings basis to $1.40 with 30% in.

Posted April 5, 2007 at 12:46 pm | Permalink (Edit)

DNDN at $16.50 – why wait for the margin call? I wish I was going to be here because I would play it but most likely to buy a quick put after whatever this is subsides. Safer to stay away.

$10KP (or any virtual portfolio) Buy 100 shares of DNDN for $16.40 and sell the May $15s for $4.50 (net 11.90) for a nice 26%, 6-week gain (as long as you’re a believer).

ICE – my goal is to have a $1.25 split so the play at this exact moment (if you are starting from scratch) is to pick up the call and hope you don’t have to buy the put yet but certainly don’t let it cross $2.50 without owning it. I took that trade a while ago and it went flat, strong sign, and should follow the markets higher – watch APPL, GOOG, MOT fir indicators.





Fear an Loathing in Energy Reporting

If I'd written all the truth I knew for the past ten years, about 600 people – including me – would be rotting in prison cells from Rio to Seattle today. Absolute truth is a very rare and dangerous commodity in the context of professional journalism - Hunter S. Thompson

I apologize in advance to David Luhnow, who is only a staff writer at the Journal and just so happened to write the wrong article at the wrong time to really tick me off.  He is just an example and I bear no particular ill will towards him…

It's bad enough that this country is forced to endure Criminal Narrators Boosting Crude and their 24-hour sponsored pump-fest.   Bad enough that they choose to give a forum to oil extortionists and peak-oil fanatics while delighting in this plague of high prices that has cost the American people $240Bn a year in windfall profits

"The TV business is uglier than most things. It is normally perceived as some kind of cruel and shallow money trench through the heart of the journalism industry, a long plastic hallway where thieves and pimps run free and good men die like dogs, for no good reason." – Hunter S. Thompson

Bad enough that Criminal Narrators Boosting Crude have driven this market into a speculative frenzy where 10 times more barrels of oil are bought and sold every month than can ever be delivered, but we thought we could at least look to the WSJ to provide "fair and balanced" information rather than more "fear and loathing."  My issue with the Journal today is yesterday's A1 article by the aforementioned Mr. Luhnow entitled "DYING GIANT Mexico Tries to Save A Big, Fading Oil Field."

Wow!  Breaking front-page news just when things were calming down in Iran and oil prices looked like they were about to ease off…

But is it news? 

[Fading Gusher]The Cantarell oil field is producing 1.6Mbd and is predicted to go down to 1.4Mbd in 2008, down from a peak of 2.1Mbd, according to Mexico's Pemex, the company that has the drilling rights.  Is this is due to declining production or just doing their share of the overall OPEC cutback?  We don't know for sure but we do know that this decline was announced by Luis Corzo, the head of PEMEX…
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TGI Thursday

Personally I’m thrilled to have a short week.

I’ve been very busy and have a lot of catching up to do so expect a lot of output this weekend despite the holidays!

Despite the holiday we will still get our Payroll and Unemployment data tomorrow along with the ECRI Inflation Gauge, Wholesale Trade and Consumer Credit.  Today we have jobless claims (probably up) the Business Barometer (probably down) and the Chicago Fed (better be better).

A combination of a "Goldilocks" job number (105-120K) and nothing blowing up over the weekend could give us a good day on Monday.  Yesterday morning I said: "The simple fact of people seeing Mahmoud as less than totally insane will decimate the “terror premium” very quickly. If Nigeria reaches an “accord” with the rebels, then you know that OPEC is simply freaking out about the growing seeds of demand destruction and looking to drive prices back below $60, possibly back to $55."

Don’t forget I predicted last week that the hostages would be home by Easter and now RDS.A has "reached an agreement with local communities allowing it to return safely to the Niger Delta and that it expects to resume full production within five to six months."  I say this so I can tell you how frustrating it is for me to be right about the bigger picture but wrong so far on the energy sector’s reaction to it.  I’m going to hold the puts through the weekend, reluctantly take a cover (we’ll see who later in the day) and hope we are hit with a dose of sanity early next week or I will have to take my medicine and roll over to May, which is very scary as we near summer driving season.

The big picture in Asia is the Hang Seng’s 1,400-point gain in 14 sessions - how’s that for an average daily gain?  The Hang Seng was closed today and the Nikkei went with the pause that refreshes and pulled back 50 points into the long weekend as India continued its recovery.  The Bank of China is raising reserve requirements for the 3rd time this year, trying to put the breaks on their runaway markets as China’s CPI so far for the year is 2.4% vs. 1.5% last year.  Although this is expected we need to cover our FXI leaps for the weekend by selling the $105s for
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What Happened Wednesday?

What was that? 

Not much on the whole.  We got our SOX move but the rest of the market just sort of laid there, which was a bit depressing with the Iran thing seeming to wind down.  As usual, we can blame oil which refuses to drop so now we know that the "Iran crisis" had nothing to do with the price of crude but provided the manipulators a good excuse to yank our chains and draw another $100M per day out of American pockets.

I should be happy as we are getting our tech rally but it’s not catching on and I found the Russell very disturbing as it actually lost a point on the day but the markets held up well in general on a poor ISM report:

 

Day’s

Break

38%

50

Break

Index

Current

Move

Down

Fib Level

DMA

Up

Dow 12,530 19.75 12,350 12,369 12,450 12,500
Transports 2,789 -14.11 2,736 2,830 2,812 2,983
S&P 1,439 1.6 1,410


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Wednesday Virtual Portfolio Moves

Posted April 4, 2007 at 9:47 am | Permalink (Edit)
  • I am DD’ing TSO $100s at $1-1.20
 I half expect to have to roll into the May $100 puts or the May $105 puts by the end of the week the way things are going so 35% in is my limit on this one for now.
Posted April 4, 2007 at 10:17 am | Permalink (Edit)
  • BNI $80 puts for .90
Posted April 4, 2007 at 10:26 am | Permalink (Edit)
Also taking 1/2 the number of BNI puts in UNP $105 calls at $1.70 in a very odd split.
Posted April 4, 2007 at 10:38 am | Permalink (Edit)

COP $70 puts for $2.60

Posted April 4, 2007 at 10:41 am | Permalink (Edit)

VLO DD in $10KP at .35 = $700, I’m willing to do that but half out at .50 for sure.

Posted April 4, 2007 at 11:03 am | Permalink (Edit)
RIG $80 puts for mo play at .70
Posted April 4, 2007 at 11:09 am | Permalink (Edit)

Out of MSFT $27.50s for .98 – looks short-term toppy.

Posted April 4, 2007 at 11:29 am | Permalink (Edit)
  • IGW $60s are $1.80 (from $1.35) so setting a .10 tstop there.
  • AMAT May $19s for .45
  • KNOT! Finally it is time!!! Oct $20s for $3.70, will sell May $22.50s or $25s later.

Posted April 4, 2007 at 11:41 am | Permalink (Edit)

BTW – buying KNOT ofr $21 and selling May $20s for $2.50 is a 7% return in 7 weeks – also an XXX


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Which Way Wednesday?

We are in serious need of follow-through today!

It's got to come from the SOX, which is holding down the Nasdaq and it has to come from the transports, which are still holding back the Dow.  The Russell also needs to gather some strength but there's no complaining about the move they've made the past 5 days but that index faces a critical test at 815.

Of course we need crude to behave itself to make any real progress and that means we need Iran to behave itself and we need rebels in Nigeria to behave themselves and we need T. Boone to contain himself and we need oil inventories to be kind and we need Criminal Narrators Boosting Crude to contain themselves as oil slips back down to the lower half of the $60s.  Is that too much to ask?

David Fry wrote an excellent article this morning pointing out that this is the week that mutual funds reinvest some very significant dividends and a lot of IRA money is flowing into the markets so perhaps that explains the very general nature of the buying we've been seeing.  The best example of this is that, for the week, fund flows are up $7.4Bn for the week (3/28) but ex-ETFs, up just $1.4Bn vs. a $9.3Bn outflow for the previous week (3/21).  The Fed continues to dump easy money on the prime brokers who use it to pump the oil patch – how this helps the "average" American is beyond me but the average American this government caters to drives a car that cost's more than the other average Americans' entire family income and has over $250,000 in the markets which need protecting.

David drew a Nasdaq chart which will probably tell the tale of the markets today  as the Qs are firmly wedged in a trading channel that the SOX (the far weaker IGW) must push them through:

D Fry Market Outlook 04 04 2007_010 

D Fry Market Outlook 04 04 2007_011

How closely are these two indexes really linked?  Here's the 3-month chart of the twoThe separation between the SOX and the Nasdaq is
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Tuesday Virtual Portfolio Moves

Posted April 3, 2007 at 9:38 am | Permalink (Edit)
  • ICE back in 5 $130s (ICEDV) in the $10KP for $3 (stop at $2.60 .40 trail stop)

ICE – if $125 doesn’t hold we can’t afford to take a chance – very much a shame as I don’t buy the logic of the sell-off. By the way, when I say $125 doesn’t hold, I mean on the 5 minute chart – not the 5 second chart! Those 1 min charts will flush you out of positions every time if you let them.

Posted April 3, 2007 at 10:07 am | Permalink (Edit)

Oil puts should be very light entry with the expectation of having to DD on a pump (maybe at yesterday’s levels).

Posted April 3, 2007 at 10:07 am | Permalink (Edit)
  • CVX $75 puts are a mo play for the $10KP – 10 for $1.20, stop at $1.10 (.30 T stop).
Posted April 3, 2007 at 10:42 am | Permalink (Edit)

WFR – nice entry poitn if SOX break over 470. I’m going to pick up the $60s for $1.60 but I’m out if the SOX fall below 468.

Posted April 3, 2007 at 10:54 am | Permalink (Edit)

Sharp VLO reveral underway! I’ll be very concerned at $64.25

Posted April 3, 2007 at 11:30 am | Permalink (Edit)
 If oil gets back over $64.50 we have to give up on these puts (VLO also has a goal of $64.50).

At this point I will DD on my COP $70s for .50, reducing the basis to .75 but I take that half back off at .40.

Posted April 3, 2007 at 11:57 am | Permalink (Edit)
  • TM $130s may make a nice mo play at $1.20
Posted April 3, 2007 at 12:03 pm | Permalink (Edit)
  • TSO $100 puts


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Tuesday Top Off

Wow – we haven’t had one of these days in a while!

After appropriately peaking out at $66.6 last week, oil fell all the way back to $64 yesterday but, since that’s just a 4% retracement, we know they’ve got at least another point in them.  This run really started at $52, back in January and we finished the day (not counting the .20 closing pump) at $64.40, so yesterday’s drop was just $2.20 of $14 or 16% and our members know that means we are much more likely to test 20% at $63.20 than go back over $65 on this run.

In the longer view, we have made a strong retracement of the drop from $75 in July and August to $60 (-20%) that held through Jan (some might say artificially, but we don’t truck with conspiracy theorists) but the downward "spike" (some would say natural move) to $52 (some would say desperately propped up before crashing through $50) represented another 15% down move from the $61 median price and, unless that is balanced by a move above $70 (+15%) that last’s for a couple of weeks, then we are still in a pretty big downtrend.

Speaking of investing, look at the monthly NYMEX volume on the last link – the majority of trading goes through the ICE, who just reported energy futures volume was up 69% this March.  11.5M contracts, representing 11.5Bn barrels of oil were exchanged on the ICE, while the NYMEX rolled about 9Bn barrels during the month.  The reason traders prefer ICE is because it is far less regulated so they can play games (like taking both sides of a trade just to churn barrels higher) more easily than on the NYMEX, which has rules.

Still 20Bn barrels of oil represents some pretty active turnover for a country that "only" consumes 20M barrels a day but I’ll leave you to draw your own conclusions as to why there would be a 69% increase in activity this year on the ICE alone when, back in 2003, when there was just the NYMEX and oil was $30 (and this was AFTER 9/11), the whole country got by just fine trading 3M contracts in a month.

Oil rose from $30 in 2004 to $75 last year trading an average of 4Bn barrels a month on the NYMEX and the rise took 30…
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Zero Hedge

Auto Shares Surge As Fiat, Renault Confirm Merger Talks

Courtesy of ZeroHedge. View original post here.

With President Trump in Japan for a state visit and most of Europe headed to the polls to vote in the quinquennial EU Parliamentary elections, there was enough news to keep market watchers occupied during what was supposed to be a quiet holiday weekend in the US. 

But on top of these political headlines, on Saturday afternoon, the news broke that Italian-American carmaker Fiat Chrysler had approached France's Renault with a merger proposal that would leave the shareholders of each carmaker with half of the combined company, in a tie-up that would create the world's third-largest au...



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Phil's Favorites

Trump and the problem with pardons

 

Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...



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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!


Alistair Williams Comedian youtube

This is a classic! ha!







Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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