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

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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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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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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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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