Archive for 2007

Weekly Wrap-Up

Wheee, what a ride!

I said in last week's wrap-up that "We continue to strangle the Dow, now with the October puts and calls, looking for a 300-point move in either direction.  As we’ve had 8 since July 1st, we don’t think it’s too much of a stretch despite the declining VIX" and it was the VIX that stretched for us this week, jumping back from Tuesday's low of 22 all the way back to 26.23 on Friday's close.

Option Sage gave us his "volatility is good" speech last weekend and the market did indeed do what it could to "shake out the weak holders" which Sage says "is an important and necessary process before the market makes a move to higher ground."  I menitioned earlier in the week we will revisit my dissertations on Stock Market Physics so let's think of this shaking process as the market pros jettisoning excess mass (the retail shareholders) prior to committing to burning more fuel (capital) as we attempt to move the market back into a higher orbit (14,000 to 15,000).

Unfortunately, this is the kind of rocket that looks like she's about to fly apart at the seams and we may not be as lucky as the people on the Boeing plane in China a couple of weeks ago!  That's why we continue to fly light, leaving most of our assets safely grounded in cash while we sent up our test balloons.  If the market is going down, we'd like to enjoy the view from afar but, if it does manage to head higher, we'd at least like to have a hold of a string so we can ride along.  As I declared back on the 22nd, US equities are still the least sucky place to put your money in the second half of '07 and, despite the attitude, that's something to be taken seriously.

Last weekend Happy Trading was dead on predicting early upward momentum followed by profit taking and, call it what you will, that's pretty much where the chart went.  When chart patterns align with fundamentals and breaking news to all point the market in a certain direction, it's easy to make money but this week will be trickier…
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Friday Virtual Portfolio Moves

Posted September 7, 2007 at 9:28 am | Permalink (Edit)

USDJPY – yeah, that was a good call yesterday!

Selling calls, if you haven’t sold them yet its going to be tricky. We need to see if we hold recent lows but OUCH in general! Best bet is to sell the calls that are just in the money or barely out of the money as downside mo plays but you have to be ready to cut and run if we turn. Don’t forget that a single word from Bernanke can reverse this market 250 points – as stupid as that would be… And they would make J’s gold $1,000 dreams come true!

DIA – if we start breaking lower after the open, we dump the calls, layer the puts (buying the next level down in the sept DIA puts that costs about $2) and keep doing that, setting very tight stops on each position that goes up .25 with a .25 possible loss on the last posiiton you take.

Posted September 7, 2007 at 10:06 am | Permalink (Edit)

Be very careful here, I don’t think anyone knows what the hell is going on. The optimists are bargain hunting but we’re coming into the 9/11 anniversary weekend and I am NOT buying today (other than covers) but I’m not dumping either – just going to add protects to the downside if we keep going that way.

IBM – I’m holding mine. Happy stopped out of AAPL and BIDU (I’m short on it anyway) but IBM was a 5 contract entry for me so I’m willing to watch it through $3.50 for a possible DD.

20% bounce off 13,200 (-130, 13,233) is meaningless psychological bounce so don’t read into that until we are clear of 13,250, which is doubtful with the Nasdaq leading us down. Getting another shot at GOOG calls thank goodness because I was reallly mad they got away from me (not yet though).

Posted September 7, 2007 at 10:17 am | Permalink (Edit)

Wow, dollar below 80!

USO – we spoke about this one this morning, notice it’s not down..

Oops, here we go! Broke 13,200. Now it’s up to us to retake it.

Posted September 7, 2007


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Stop the Markets – We Want to Get Off!

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly [the bank panic of] 1907."  – Greenspan, yesterday!

"Those who cannot remember the past are condemned to repeat it." – George Satayana

"Look for housing sector to fall now including brokers, so our plan is still 80% cash, we should have some good buying opportunities when this bottoms but anything you don’t love should be sold." - Me, Wednesday 2:05 pm

 

Earlier Wednesday, I explained my rationale for being trigger happy on poorly performing positions in this market, saying: "I can always buy it back or roll down or do 100 other things with cash but the only thing I can do with a poor position if it bounces back is wait and pray – not my favorite strategy!"  Well, it may not be MY favorite strategy but it sure does seem to be the #1 strategy among traders, judging from what I hear when I visit other popular chat rooms.  Buy and hold is NOT a valid strategy for short-term options!  You cannot "bluff" if you have a weak hand – if you can't "buy and fold" then, much like a poor poker player, YOU WILL LOSE YOUR CHIPS!

That's why both Happy Trading and I spend as much time talking about getting out of positions as we do about getting into them – you don't make any money until you cash in your chips!  While my stops tend to be strategically driven, money-management oriented moves (due to the wide variety of positions we take on the member site), Happy sends out very specific buy and sell alerts on every trade he makes, and the results are stunning

As I previously announced, Happy and I will be combining our styles and teaming up to make a new Happy 100 (for $100K) folder, which we are going ahead and launching for the members, even though the market stinks, as we figure now is the time people need it…
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Thursday, 1984 + 23

On Tuesday, Aug 28th I had you view this video:

I said: "The video on the right is a fantastic illustration of the current investing climate.  I especially like the way that Homer is repeatedly smacked in the head on the way up (rescued by Helicopter Ben?) and the end is just perfect!"

This morning I pointed out that, where there are Federal Firemen turning their money hoses on full and aiming it at our markets, then there is probably a very serious market crisis or they wouldn't have scrambled all the engines.  Upon further reflection this afternoon I pointed out to members (as the dollar continued to fall): "This is the problem with the CBs stepping in – they are putting out fires with gasoline! It’s cheap money that got us into this mess, more cheap money, through either low rates, liquidity or inflation does NOTHING to fix the problem." 

This was shortly after they released Cramer's pal, Bill Poole, from whatever ReEducation Center they had placed him in and the markets were rallying because the Fed's resident rate bull (now neutered) was trotted out on the English stage to say: ""I think the probability of recession is higher than it used to be.  I don't think we know how long this market upset might last and don't know to what extent it has impacted areas outside housing," he said. "The extent to which it's affecting the broader economy … I don't think we know yet. We shouldn't take for granted the assumption that the economy is about to take a nose-dive."  

Oh he's so close, we can almost bring him home and put him on CNBC!  ""A rate cut has to be in the context of the overall stance of monetary policy – what is needed for the longer run for price stability and maximum economic growth," he said.  That's it Bill, you've got it – nice and vague!  Welcome back citizen Poole, Big Brother loves you

"And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. 'Who controls the past' ran the Party slogan, 'controls the future: who controls the present controls the past." - 1984

While we can't expect Mr. Poole to be fully
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Thursday Virtual Portfolio Moves

Posted September 6, 2007 at 9:42 am | Permalink (Edit)

I agree Kustomz – not much of a rally over sensational retail numbers – couldn’t be better so great news is so-so news.

COP is ripe for a juicy fall if inventories disappoint. I’m going to start picking up the Oct $80s at $1.75 looking for $1.50 (yesterday’s low) as a play I intend to hold over the weekend. XXX

Posted September 6, 2007 at 9:48 am | Permalink (Edit)

AAPL levels to watch from last night ($136.70 is upside “breakout” line):

Apple is right around the $134.20 line now, holding there indicates buying but once we fail that, we are unlikey to find many buyers before $131.76 so be careful if you are long.

CME and FXI are painful but I’m holding for now. If oil does take the energy sector down, it’s time to dump our index calls and enjoy the ride down!

Posted September 6, 2007 at 9:55 am | Permalink (Edit)

COP – OOPS! Yes puts.

TSO must be slapped down here, let’s call that a mo play if we get a build. Perhaps the $50 puts…

Posted September 6, 2007 at 10:10 am | Permalink (Edit)

Oil heading up to $77! SU not buying it.

Posted September 6, 2007 at 11:11 am | Permalink (Edit)

My Radio verdict was not to play. Big draw in crude (3.something) with gas and distilates cancelling each other out. I simply don’t belive the numbers and SU buyers don’t believe the numbers and TSO and VLO don’t believe the numbers and the NYMEX traders don’t believe the numbers so no change in my stance re. XOM and COP, which are Octobers but I will be getting out of the CVX and XLE September puts as it’s still unclear what’s going on.

Posted September 6, 2007 at 11:31 am | Permalink (Edit)

SIRI – when in doubt sell half. As far as I know, the DOJ is GOING to make a ruling. This seems to be some sort of rumor thing but…
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Thursday Morning

Sorry, no Wednesday wrap-up as an emergency came up

Yesterday went pretty much as expected, unfortunately it went as expected by us on Tuesday but we were able to recover quite nicely as we did maintain a healthy degree of skepticism during Tuesday's "rally."

You'll be happy to know we got our 10% back and more in the STP and I did learn something and hopefully have a better put/call mix on the DIAs.  As of last night, we're left with:

  • 100 OCT 133.00 DIA CALL (DAWJC)
  • 100 OCT 131.00 DIA CALL (DAWJA)
  • 200 SEP 133.00 DIA PUT (DAWUC)
  • 200 OCT 132.00 DIA PUT (DAWVB)
  • 200 SEP 133.00 DIA CALL (DAWIC)
  • 100 OCT 134.00 DIA PUT (DAWVD)

Still a Dow strangle but much more even than before, a little heavier on the more expensive, longer-term puts.  Also, I made the call to get to more cash yesterday as the combination of weak ISM numbers, PATHETIC home sales (down 12.2%) and a beige book that gives the Fed little reason to ease left us with far less open calls to cover

My general impression is that the markets will go down but we have to look out for some short-term silliness.  The ECB gave us some silliness this morning by dumping another $57Bn into the money markets, a move that makes me more worried than not as this seems to be pretty drastic coming on the heels of $300Bn that's already been flushed through the system.  Even worse, the bank said it received $124Bn in bids on Thursday, meaning that $57Bn ISN'T enough!  As I said in yesterday's comments: "Deep, deep problems somewhere, deep enough to panic the CBs of Europe and they are only feeling the ripples from 3,000 miles away – we may just think its not so bad because we are sitting in the eye of the storm but that just means we’re screwed no matter which way we go…"

There's a saying that goes: "Where there's smoke, there's fire" so I wonder what the expression should be when you see Federal firefighters scrambling from all corners of the globe an turning on the hoses.  Perhaps we should say: "Where there's emergency pumping of
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Wednesday Virtual Portfolio Moves

Posted September 5, 2007 at 10:02 am | Permalink (Edit)

CAL – I’d hold off a bit to see if oil breaks.

Uh oh! Pending home sales off 12.2% and 16.1% for the year period – DIVE DIVE DIVE. Layer those mattresses if you are not protected!

Posted September 5, 2007 at 10:29 am | Permalink (Edit)

Oil puts – as I said yesterday, if you DD, your goal is to get half out even as quickly as possible. As soon as you hit your lowered basis you need to set very tight stops and look to lighten up ASAP. The way I look at this is that I ABSOLUTELY will sell 1/2 my XOM $85 puts at $1.25 so I sell 1/4 the second the mo starts to fade and let the rest ride with a stop tight stop. I can always buy it back or roll down or do 100 other things with cash but the only thing I can do with a poor position if it bounces back is wait and pray – not my favorite strategy!

AAPL – only the announcement mojo is holding them up right now. If you are exposed on them the best thing to do is take a long put, like the Jan $140 put at $12.65, which is already beaten to death and is unlikely to lose more than 15%, even on a $5 move up, it’s cheaper insurance than buying a close put or selling a call if you’re wrong and the stock flies up. XXX for those who can afford it an otherwise, I will say for the 20th time this month, the premium on the $145s (although I did start off the month saying this about the $125s) is ridiculous – sell it to someone!

Buying as we go down. I still like leaps on BSC, COH, BMY, BA… But I don’t think I’d be calling a bottom until we get the data later.

Posted September 5, 2007 at 10:48 am | Permalink (Edit)

I have leaps already. BSC ‘10 $120s at $20 I just bought. BA ‘09 $95s for $14 are a good price since you can sell current $95s for $2 and it’s a fairly calm stock.…
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Wary Wednesday Morning

Oh great – NOW the sky is falling!

I told Henny Penny, I told Cocky Locky and I told Goosey Loosey but Foxy Woxy said we would be safe inside the Federal foxhole because he would bail out the mortgage industry by opening the discount window, making even more money available to a mortgage industry that was already consumed with greed

But Bany Wanky no longer trusts the mortgage industry and is NOT going to use those discounted Federal dollars to lend it to the brokers.  The banks have to cover their own butts because they already lent out money to pretty much anyone who could make a mark

This thing is not going to go away just because we WISH it would.  This is not some fictional monster that you THINK is hiding under your bed – this is an ACTUAL monster that has been under your bed (literally, it IS your home) for years and has grown way too big to be ignored and it WILL eat you when the lights go out!

Fukushiro Nukaga, Japan's brand new finance minister, made a statement that is scary to any Republican, as that country faces upheaval due to years of deregulation and public spending cuts that have left the average citizen feeling poorer (sound familiar?): "If there are no tax revenues, Japan can't improve its finances", he said. "So first we have to get growth on course.Japan's decade-long policy of easy money for corporations and low corporate taxes may have boosted the Nikkei 125% since 2003 but it has also run the National Debt up to 179% of the GDP, that would be like the US having a $23 Trillion National Debt!  Stay the course fellahs

Let's keep in mind that these are the guys that lend money to US!  The last thing we want Japan to do is to pursue a responsible fiscal policy – that might make us look bad(er).  Thank goodness Bush is on the case;  Unfortunately, rather than visiting Japan, which just had an election and is in turmoil, our President traveled to the other side of the World to spend time with his last remaining ally in the war on Iraq. …
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Tuesday Wrap-Up

I learned something today.

My well-balanced virtual portfolio has a limit and that limit is 13,400

Although I thought I was very bullish, it turns out I wasn't THAT bullish last week, when we were down at 13,100.  Also, Friday's sharp drop into the close caused me not to follow my plan of getting down to 60:40 bearish with my DIA puts into the weekend and we ended up 2:1 bearish – it's never good to go off a well-thought out plan just because of a sudden market move!

I always tell the members it's OK to lose money as long as you learn something but I got whacked for 10% of the STP's gain (not value) today and that's a pretty expensive lesson!

Company Sales % Change YTD Change
General Motors 385,529 6.1% (7.4%)
Toyota Motor 233,471 (2.8%) 4.4%
Ford Motor 218,332 (14%) (13%)
Chrysler 168,203 (6.1%) (2.7%)
Honda Motor 158,342 4.7% 1.6%

Also, rather than adjust quickly and go with the flow I stubbornly waited for the market to pull back before doing the bulk of my adjustments.  And I waited, and I waited, and I waited…  Needless to say the day did not go as I thought it would, the market took off right out of the gate and never really looked back, despite VERY disappointing Construction Spending (-0.4% vs. -0.1% consensus) and a fairly disappointing ISM Index at 52.9 although auto sales fell 2.8% and finally seemed to shake a little sense into the buyers. 

Since
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Tuesday Virtual Portfolio Moves

Posted September 4, 2007 at 9:48 am | Permalink (Edit)
Woo hoo on Apple! A Piper upgrade on them is a powerful thing so no more than 1/2 covered (about where I am) as they could get another 10% out of a cool rollout.
Posted September 4, 2007 at 9:58 am | Permalink (Edit)

GOOG – damn, I was predicting them for $525 on a breakout but I didn’t think they’d take off today. I wouldn’t buy a September into the excitement unless you’re going for a momentum play but I’ll be looking to sell calls when they slow down against my longer positions.

BSX – I sold the $12.50s against my Jan ’09s so I’m not too anxious to buy out my callers on a spike.

Oil puts – I’m stunned at the moment. I can’t imagine what data these guys are looking at. Seems to be the same old Bomb Iran crap we were talking about on the weekend. No new puts yet, that’s always a great way to die…. We just have to see where this takes us. No inventory until Thursday this week so we’ll see if VLO can crack $70 along with the XLE.

Posted September 4, 2007 at 10:09 am | Permalink (Edit)

Contstuction spending a huge miss! Down 0.4 vs. expected up .1. ISM at 52.9 shows pretty good growth but down almost a point and 50 represents contraction so think of it more as dropping from 3.8 to 2.9 with anything below 0 being BIG TROUBLE!

RIMM – nope, they still don’t get it. Apparently MSFT is buying YHOO AND RIMM this week! Selling the $86.62s for $3.03 is safer than buying short-term puts so XXX if you have the margin for it. You can cap it with $93.38s at $1 but I hate giving back the $1 just to play… I still like the ‘09 $86.62 for $16.60 and selling the $83.38 puts for $2.85 but its a play that will give you a lot of heartache! XXX

1,480 on the S&P is good if we hold it (I wasn’t even hoping for that today).

Posted September 4, 2007 at 10:11 am


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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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About Ilene:

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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