Archive for 2007

Tuesday Tear-Down

Wheee – that was fun!

The Dow sold off early, went down 100 points to 13,320 by 11, then back to 13,450 at 2 when (surprise, surprise) the Budget Report came out and told us that we are a silly, immature country run by ineffective leaders who never met a spending bill they didn’t like.

May deficit spending came in at $67.7Bn (and this does not count the $102Bn Iraq "emergency spending"), up 58% from last year and that news came on top of a 10-year note auction that drew scant interest from foreign buyers.  Perhaps it is because, of the $232Bn the government spent last month, over $50Bn of it was on debt interest payments.  Another problem was that receipts were down 15% from the prior year as the vast wealth being amassed by corporations and high net-worth individuals continues NOT to trickle down on other parts of the economy (but SKS had a 37.5% increase in same store sales so perhaps they got something nice for the maid!).

Hopefully they got her a big bag because 90% more people are being forced to live out of one than last year as home foreclosures rise to one out of every 656 households in the month of May.  If this trend continues, in one year we will have one out of 54 homes in foreclosure for the year.  This trend may in fact ACCELERATE as interest rates shot up to 5-year highs today.

Once an area starts down the road to mass foreclosures, it’s likely to spread as momentum picks up. "Foreclosures are contagious to the rest of the community, It’s very hard for a market to scrub volatility out and become stable again," said Steve Schroeder, CoreLogic’s chief executive.  Foreclosure’s impact falls on every member of a community, not just the owners who lose their homes. When properties sit vacant and unsold, entire neighborhoods suffer as property values decline.

We did our  best to halt the decline of our virtual portfolio values today as it was a great day for swing trading, with the Dow up or down over 50 points every hour except lunch!

  • 9:48 – "10-year 5.2%, 30-year 5.31% They have got to be kidding trying to rally back on this!"
  • 9:54 – Took MU $12s for .10, sold later for .25 (up 150%).  Suggested shorting MS (dropped $2.30 EOD).
  • 10:18 – PBR $110 puts


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Tuesday Virtual Portfolio Moves

Posted June 12, 2007 at 9:35 am | Permalink (Edit)

Watch out for: NYSE 9,800. Nasdaq 2,550, S&P 1,500, Dow 13,350

Tight stops on Junes, including calls we sold as these are very nice gains that should be protected, we can always sell July if it turns again…

GOOG got a nice snap back already SLB tells me to dump my OIH puts. XXX

Posted June 12, 2007 at 9:48 am | Permalink (Edit)

10-year 5.2%, 30-year 5.31% They have got to be kidding trying to rally back on this!

DNDN dropped below $8

GM getting close to that magic $32.50 mark where they start to make a great short.

Posted June 12, 2007 at 9:54 am | Permalink (Edit)

MU crashing on that news??? I suppose I would keep the $12 lined up as a mo play at .10 just for fun if it comes back. XXX

JOSB – too much time to worry about it (this was a .80 credit spread and he’s got $2 in premium).

MS at an ATH, might be shortable. Poor HOV at 52 week low again. VNO going throught the floor along with BXP indicating the rest of the market is insane so be really, really careful!

Posted June 12, 2007 at 10:11 am | Permalink (Edit)

Holy Cow – Jackpot on X puts!

IGW – they opened way higher, can’t catch them all… The SOX puts were gettable at $5.50 at the open, now $6.25 – a nice, quick 15%, which is all you should be looking for on these plays.

Posted June 12, 2007 at 10:18 am | Permalink (Edit)

LEAPs – as long as volatility remains high we are in good shape but it’s all about position with leaps – as long as you can sell, you have no trouble.

Sold my OIH too soon! I have my eye on PBR $110 puts at .55 (craps roll) XXX

CNBC basically saying Builders conference is downright depressing.

NMX went crazy too – $125 puts for .48 (craps roll) XXX

Posted June 12, 2007 at 10:30 am |


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Telling Tuesday Morning

We get the Budget report at 2pm today and we know this country is incapable of restraining its spending so let’s not pretend to get all shocked when it comes out.

I’ll be watching to see how the markets react to this non-event but the real data days start tomorrow with Import Prices that will be higher, Retail Sales that are a wildcard, Business inventories likely to be lower, Crude inventories that could go either way and the Beige Book, that will rock the markets at 2pm.

Needless to say we will continue to remain cautious today!

The Shanghai finally got its act together today, with both A and B shares notching gains of about 2% but we decided yesterday that we don’t care about them anymore (what can I say, I’m fickle) and we are a lot more concerned about how we’re going to attract some money flow from Europe.

Dr. Brett Steenbarger over at TraderFeed points out that we had a pretty sharp drop off in money flow this month and it may be very hard to get to new levels if we can’t get some new capital into the market.  I noted last week that we should be very concerned at any sign of the slowdown in M&A activity and here, in week 2 of few deals, we are already seeing the effects.

Even the energy sector was not spared from the drop-off in monetary inflows, yet you would think it was from the way it mysteriously failed to have a natural pullback as the funds dried up but that gives us yet another opportunity to lay down some puts as T Boone and company make the rounds pretending they are still gung-ho on oil while they are pulling their money off the table.

Speaking of cons, China is learning the western ways faster than we thought as their headline inflation rate touched a 2-year high (up 3.4%) but they have decided not to worry about it since "the big price gains remain maining in food and haven’t spread to a broad range of consumer goods."  Food prices, in fact, jumped 8.3% from a year ago.  3.4% average inflation (and don’t forget there are 1Bn people in China who make less than $2,000 a year so food is pretty much all they buy) is about .35% more than they get for putting money in the
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Monday Mop-Up

On the whole it was a disappointing day.

 

As promised, we made very few moves as we were comfortably in neutral and willing to take a pass on the day but by 9:52 oil broke up and at 10:09, despite the early run in the Dow, I said:  "As expected transports are dragging, RUT also not responding, NYSE not going green and we don’t get a real rally without them."

By 10:21 HOV made a 52-week low and that was enough to get me to call for a double down on our DIA July $132 puts.  The Dow went up another 50 points from there, up 90 from the 10:30 low but we mainly spent the day chatting and watching until 2:30 when we took advantage of the spike in the Dow to roll our DIA July $132 puts into DIA July $134 puts for just .60 more (leap-frogging our July $133 puts), a move that was rewarded less than 2 hours later as the Dow gave up a quick 50 points into the close.

That was it, other than a quick early trade on SWIR and short play on X and OIH (caught the top at $170) we waited patiently, now slightly more bearish than we were in the morning.  During the afternoon we discussed trading strategies, which all members should read until I have time to add the conversation to our strategy section.

So, on the whole, a pretty dull day in the markets but, obviously, the internals bothered me:

 

 

Day’s

Must

Comfort

Break

Next

Index

Current

Move

Hold


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Monday Virtual Portfolio Moves

Posted June 11, 2007 at 9:52 am | Permalink (Edit)

Oil – if it holds $65 for the day they will be able to rally around it into inventories.

Don’t forget to sell 1/2 DIS July $37.50s for .35 XXX

Posted June 11, 2007 at 10:09 am | Permalink (Edit)

DIS – I’m just saying as I have to go to a meeting so I’m setting a sell order…

As expected transports are dragging, RUT also not responding, NYSE not going green and we don’t get a real rally without them.

GOAX turning down too (Google, AAPL, BKX)

Posted June 11, 2007 at 10:11 am | Permalink (Edit)

SWIR busting out – July $25s for $1,90 are a good way to go and you can sell the June $25s against when/if it calms down. XXX

Posted June 11, 2007 at 10:21 am | Permalink (Edit)

WTR rising, Dec $22.50s are still $1.50 (our entry was 5/18).

JOSB – Just what we wanted, right in line, should keep them in this range and destroy the July callers premium, nothing to do but to wait for expiration. $10KP was set up for safety and patience this month, maybe next week we can play but there’s nothing about this market right now that makes me want to stop playing it safe!

Posted June 11, 2007 at 10:23 am | Permalink (Edit)

DD on DIA Aug $132 puts XXX Bac, bad housing sector!

Posted June 11, 2007 at 10:31 am | Permalink (Edit)

DIA – of course I still have my Aug calls for balance so I am weighting back to negative here.

SWIR – goal is to pay less than $1 on the July/June $25 spread, was .90 when I called it.

30-year back at 5.25% – not good

Posted June 11, 2007 at 11:24 am | Permalink (Edit)

OIH, offering $1.50 for $170 puts – very risky but I think $170s a tough sell.

Speaking of index puts – I don’t have any QQQQ puts and don’t want them right now and I’m going to be rolling the July $132 puts to July $134 puts for +.60 by the end of the day (remember I am making money on the way up on my DIA Aug $138s so this is partly revenue neutral and will allow me to sell June puts against if the market keeps going up). XXX

 





Just Another Manic Monday

It’s all about the data this week.

Nothing of note today but starting tomorrow we get 4 big days of economic numbers that should give us some real action as we head into options expiration on Friday.

Date ET Release For Actual Briefing.com Consensus Prior
Jun 12 14:00 Treasury Budget May   -$71.0B -$60.0B -$42.9B
Jun 13 08:30 Export Prices ex-ag. May   NA NA 0.4%
Jun 13 08:30 Import Prices ex-oil May   NA NA 0.2%
Jun 13 08:30 Retail Sales May   0.7% 0.6% -0.2%
Jun 13 08:30 Retail Sales ex-auto May   1.0% 0.7% 0.0%
Jun 13 10:00 Business Inventories Apr   0.3% 0.2% -0.1%
Jun 13 10:30 Crude Inventories 06/08   NA NA 112K
Jun 13 14:00 Fed’s Beige Book          
Jun 14 08:30 Initial Claims 06/09   315K NA 309K
Jun 14 08:30 PPI May   0.7% 0.5% 0.7%
Jun 14 08:30 Core PPI May   0.2% 0.2% 0.0%
Jun 15 08:30 Current Account Q1   -$203.0B -$202.5B -$195.8B
Jun 15 08:30 NY Empire State Index Jun   14.0 10.0 8.0
Jun 15 08:30 CPI May   0.6% 0.6% 0.4%
Jun 15 08:30 Core CPI May   0.2% 0.2% 0.2%
Jun 15 09:00 Net Foreign Purchases Apr       $67.6B
Jun 15 09:15 Industrial Production May   0.1% 0.1% 0.7%
Jun 15 09:15 Capacity Utilization May   81.5% 81.5% 81.6%
Jun 15 10:00 Mich Sentiment-Prel. Jun   89.0 88.0 88.3

We have earnings of note from JOSB and TTWO today, LEH on Tuesday and BSC, GS and ADBE on Thursday but if LEH doesn’t come in with good guidance then it is doubtful we’ll get a boost from Goldman.  This is the second Monday in a row I’m not seeing a lot of big deals but if oil can’t settle down below $65 lack of deal flow will be the least of our problems…

Asia had a decent morning with the Hang Seng up 100 points…
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Phil's Favorites

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

 

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

Three decades of behavioural experiments show consumers given too many choices are more likely to make a bad or no choice. www.shutterstock.com

Courtesy of Robert Slonim, University of Sydney

Do you think you are paying more than you should for energy, banking, insurance, internet and phone services? You are not alone, and you are probably right.

Companies offer a growing number of deals that supposedly enable you to choose what is best for you. Every basic economics textbook tells us greater choice should deliver cheaper prices. But in reality this isn’t necessarily the case. ...



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Insider Scoop

Baird: Broadcom Lowers Full-Year Revenue Outlook On High Channel Inventory

Courtesy of Benzinga.

Broadcom Inc (NASDAQ: AVGO) lowered its full-year revenue guidance, dispelling hopes of a recovery in the back half of the year, according to Baird.

The Analyst

Tristan Gerra maintained an Outperform rating on Broadcom and reduced the price target from $300 to $280.

The Thesis

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Zero Hedge

Hong Kong Rocked By Biggest March Yet After Extradition Bill Pulled; Millions Demand Lam Resign

Courtesy of ZeroHedge. View original post here.

Despite City Executive Carrie Lam's major concession to the protest movement - that is, the (not really) 'indefinite' suspension of the extradition bill that catalyzed the protests - a planned protest march went ahead as scheduled on Sunday, marking the second consecutive Sunday of street protests in Hong Kong.

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Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

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Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

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The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

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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.

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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.

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Promotions

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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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