Posts Tagged ‘AGNC’

Limited Brands Calls Look For Near-Term Rally

 

Today’s tickers: LTD, AGNC & LYB

LTD - Limited Brands, Inc. – Options on the operator of retail brands Victoria’s Secret, Bath & Body Works and others, are more active than usual today, with volume topping 8,500 contracts as of 1:40 p.m. ET, versus the stock’s average daily options volume of 1,058 contracts. The bulk of the action is in the October expiry options, where it appears one strategist purchased roughly 6,000 calls at the Oct. $49 strike for an average premium of $0.35 apiece. Upside call buying may pay off for the trader at expiration later this week if shares in LTD rally 1.7% over the current price of $48.54 to top the average breakeven price of $49.35. Limited Brands holds its 2012 Investor Day starting at 8:30 a.m. on Wednesday morning. The stock traded up to an all-time high of $52.20 in September.

AGNC - American Capital Agency Corp. – Shares in mortgage REIT, American Capital Agency Corp., fell as much as 9% this morning to an intraday low of $29.63, extending recent declines following the Fed’s decision last month to expand its mortgage bond-buying program. The stock, currently off its lows and down 2.4% on the day at $31.91 as of 1:05 p.m. ET, has dropped 13% in the past four weeks. A sizable bullish options trade initiated on AGNC this morning suggests one strategist is prepared to benefit from a rebound in the price of the underlying. The options player appears to have purchased 2,120 calls at the Nov. $31 strike for a premium of $1.27 apiece, and sold 4,240 calls at the Nov. $34 strike at a premium of $0.20 each. Net premium paid to establish the spread amounts to $1.07 per contract, with profits available on the upside in the event that AGNC shares reverse course and top the breakeven price of $32.07 by November expiration. Maximum potential profits of $1.93 per contract are available on the position should…
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Income Virtual Portfolio – Cashing it in for an Early Retirement!

What a crazy couple of weeks.

Ka-ching is the word though as we did NOTHING – as planned back on the 18th, in our last update - as we expected the market to go down then up.  On Friday, we took our short puts off the table as we expect there is a better than average possibility that we go back down again between now and expirations (15th), so we took our short-term winners off the table.  The only move we did execute in the past two weeks, other than taking our virtual money and running, was the sale of 10 FCX July $47 puts for $1.21 ($1,120) on the 24th and those cashed out yesterday at .13, up $1,080 two weeks early so of course we take it off the table!  

Our other short July puts that were cashed out were:  

  • 20 short GLW Aug $20 calls at $1.30, out at .20 – up $2,200
  • 20 XLF July $15 puts sold for .50, out at .06 – up $880
  • 10 INTC July $22 puts sold for $1.05, out at .15 – up $900
  • 5 BA July $75 puts sold for $2.50, out at $1.40 – up $450
  • 5 DE July $77.50 puts sold for net .67, out at


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Income Virtual Portfolio – June Update – Wayyyyy Ahead! (Members Only)

Well, this is embarrassing…  

When we set up this virtual portfolio on April 9th, the idea was to create a virtual portfolio for people like my Mom, who just became a widow, and so many of her friends, who need a relatively safe place to invest their money but would rather not live off the 6% returns generated by the typical retirement fund.  Our primary goals in the virtual portfolio is A) Don't Lose Money, which is Warren Buffett's Rule #1 of investing and B) To generate a relatively steady monthly income of $4,000 against our $500,000 virtual portfolio (about 10% a year).  

Despite the fact that we have allocated less than 40% of our cash, we have accidentally made WAY too much money already and this is NOT the lesson we are trying to teach!  What happened is, this past couple of weeks, we had a really nice dip in the markets and our disaster hedges kicked in – as they are supposed to – but our other positions were already well-hedged and well positioned enough that they haven't really lost anything so we ended up far, far ahead of the curve.  While that's a good thing, obviously, the danger here is getting the wrong idea.  We got lucky – and one day we may get unlucky – so let's keep ourselves grounded and people who are just catching up need to keep in mind that this is not meant to be a get-rich quick virtual portfolio.  

If we made too much money on a dip – it's because we were OVER-hedged and that's something we will attempt NOT to do in the future.  To some extent, it's a discipline problem for me because I essentially BET that the market would go down and then I BET the market would go back up with our DIA adjustments (as well as overriding our original plan to stop out our new short puts with 30% losses).  There was a logic to it because we were only about 25% invested so we had plenty of cash to layer in bullish plays if the market did go up and they we would have rolled our protective shorts (which would have been losing) up to cover.  Instead, the shorts paid off and we didn't have enough…
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Buy List – Time for a Fresh Batch? (Members Only)

I am one reluctant bull!

I am still trying to be bullish, I am trying to get enthusiastic about this rally and it's been 3 weeks since I went to mainly cash rather than leave the majority of our Buy List on the table.  The Dow was at 10,850 that day and I didn't think we'd see the top of 11,000 for more than a day but now we've been up here for 2 weeks and yesterday we had strong(ish) volume on a strong up day and I'm still having trouble believing it BUT – believe it we must as long as our upside levels hold.  

Those levels are now: Dow 11,000, S&P 1,200, Nas 2,500, NYSE 7,700 and Russell 720.

We had a nice, relaxing holiday but now we have hard work ahead as I think the investing environment is littered with land mines – ready to blow up in our face if we take any mis-steps.  This bull has horns and we were gored by daring to go bearish in our $100K Virtual Portfolio but our Buy List is all bull and, hopefully, no crap as we try to make safe plays out of the finest companies.  

Ideally, our Buy List plays are about finding bargains.  We may love AAPL, but they are not on sale.  Earning season will hopefully be a great time to do some bargain hunting so this list will be a work in progress but for today we're just going to review our remaining open plays from the last list and also I would like Members to please use the comment section on this post to suggest companies we should be looking at.  Who do you think is trading way too cheaply?  We especially love dividend payers, of course and I'll be looking for companies that service the top 10%, not the bottom 90% – who still look pretty screwed to me and, from yesterday's news, it seems like the top 10% is down to the top 8% but it doesn't seem to bother the markets so we won't dwell on the implications until we're below 5% and, of course, our goal is to be in the top 5% when it all hits the fan…

After having really good timing on our Feb 8th entries, March 18th seemed like a good time to take the money and run and we shut down 2/3 of our Buy List postions.  Let's do a
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Weekend Trend Spotting and Virtual Portfolio Management

What a wild last 30 day's we've had! 

I'm going to do a little bit of charting today so we don't miss out on the next potential Meatball Market (where bad news "just doesn't matter") as we get past earnings season without any serious dings.  Of course, like Icarus, they higher we go, the further we have to fall, especially when we're getting there on wax wings but part of our fundamental outlook is looking at market sentiment along with the motives, means and opportunity of the manipulators

The Fed threw a little monkey-wrench into the works Thursday with a surprise rate move but the market was amazingly unphased and, as you'll notice on the chart below, we are neatly repeating the same move we saw in early November, when we waited 400 points for the correction that never came – until January 20th of course!  This week, we took a few pokes at short plays and got burned and we went into the weekend a little bearish but mostly neutral.  Our Buy List is off to the races, of course and only 2 of our 42 trade ideas there (AGNC and DF) are off course – I had meant to do an update this week but there's no point! 

We don't pay much attention to the Buy List in our daily posts or even in chat because those trades do their job with very little fuss.  Ideally, the bulk of your virtual portfolio should be made up of boring, low-touch trades that make nice, consistent returns and THAT allows us to have fun with our more aggressive short-term plays that do demand our regular attention.  Someone asked me about allocation the other day and I said that, generally, I feel 75% should be in long-term, well-hedged positions like the ones on our Buy List while the other 25% should be used for more opportunistic trading and, generally, we rarely stray from keeping 1/2 of that in cash to remain flexible. 

Of our aggressive virtual portfolio, we try to keep our allocations to no more than 10% of our cash on new positions (which means the more trades you make, the less you put into the next trade) and limit our losses to 20% of a full position or 2%
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The Buy List – Q1 2010 (Members Only)

 

Well we finally hit our levels!

Fundamentally, I still don't buy this rally but, technically, we could go up and up from here.  We discussed in chat yesterday how we may be in a pattern similar to 2003-7 where we came out of the dot com crash and 9/11, which took the market lower than it should have and then government stimulus took us higher than we should have been.  Sure it all ended badly but there was a really good ride up in between.  HOWERVER, 2004, which is about where we would be now, was a choppy and downtrending year.  That is not a problem for our buy/write strategy as long as we keep our heads and scale into our positions.

Obviously we can't rely on patterns to simply keep repeating themselves.  We could have another terrorist attack, we could have more stimulus or maybe both in our future but, until we see the patten broken, we can play for a similar move.  Our buy/write strategy is ideal for this as it's a conservative play that gives us 15-20% downside protection.  Combine this with our usual strategy to scale into positons along with some sensible disaster hedges and we can build a nice, bullish virtual portfolio for 2010.  Keep in mind we don't fear the upside with buy/writes as our "worst case" there is we get called away with a nice profit.  

I put up our latest Watch List on Dec 22nd, following through from our bullish lists of September 6thOctober 8th and Nov 24th.  These are the bullish plays that form the bulk of our virtual portfolios and that sometimes gets lost in our weekly short-term trading.  It was a lot like shooting fish in a barrel, picking winners since September (we had our last Buy List on July 11th our first since the bottom in March, which was followed by the more conservatively mixed $100K Virtual Portfolio that we used from April through July, when we were worried the market would be choppy (it was).  As always, our active lists are found under the Virtual Portfolio Tab near the top of our pages - always check there for recent updates.

We did…
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Phil's Favorites

Peace advocates have long been found among veterans who fought in America's wars

 

Peace advocates have long been found among veterans who fought in America's wars

Veterans for Peace gather for a Veterans Day ceremony at the Minnesota State Capitol mall, Nov. 11, 2014, in St. Paul. AP/Jim Mone

Courtesy of Michael Messner, University of Southern California – Dornsife College of Letters, Arts and Sciences

If President Donald Trump had gotten his way, the nation would have celebrated the centennial of the World War I armistice last year on Nov. 11 with ...



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Zero Hedge

China's Credit Creation Unexpectedly Collapses At The Worst Possible Time

Courtesy of ZeroHedge View original post here.

Over the weekend, we observed that China's slumping wholesale inflation, or PPI, which is so critical for corporate profits and sparking benign, demand-driven inflation in the economy, and which in October tumbled to a three year low assuring that Chinese dumping and exports of deflation will only further depress global reflation efforts...

...



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Insider Scoop

These Analysts Love BellRing Brands

Courtesy of Benzinga

BellRing Brands Inc (NYSE: BRBR) is a nutrition products company known for its ready-to-drink protein shakes and was born out of the separation of Post Holdings Inc (NYSE: POST)....



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The Technical Traders

Welcome to the Zombie-land Of Investing - Part I

Courtesy of Technical Traders

This current market environment is very reminiscent of the 2006-08 market environment where price rotated into weakness on technicals and continued to establish new all-time price highs in the process – creating what we are calling a “zombie-land melt-up”.  This very dangerous price action is indicative of money chasing a falling trend.  Where technicals and fundamentals are suggesting that price is actually weakening quite substantial, yet the process of price exploration is continually biased towards the upside as investors continue to pile onto the back of the beast expecting a further melt-up.

Let’s take a look at what happened to the ES and Gold in 2006 an...



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Kimble Charting Solutions

Gold Indicator Sending Fresh Bearish Message, Says Joe Friday!

Courtesy of Chris Kimble

Could the Gold/US Dollar ratio be sending a fresh concerning message to Gold bulls this week? Joe Friday says Yes!

This chart looks at the Gold/Dollar ratio over the past 8-years.

The intersection of two long-term channel met at (1) a few months ago. The ratio was testing the bottom of one as resistance and the top of another as resistance at the same time.

As the ratio was testing both channels as resistance, a sizeable bearish reversal pattern took place at (1).

Since the reversal pattern took place, the ratio has been heading lower.

Joe Friday Just The Facts Ma’am; The ratio is breaking below...



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Digital Currencies

3 Reasons Why One Trader Didn't "Manipulate" Bitcoin Price To $20K

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin price highs in 2017 were not the result of a single trader on an exchange, the CEO of payment company Circle claims. In a series of tweets on Nov. 4, Jeremy Allaire disputed ...



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Chart School

Gold Gann and Cycle Review

Courtesy of Read the Ticker

Gold has performed well, golden skies are here again. In fact it has been a straight line move, and this is typically unusual and a pause can be expected.

It seems the markets are happy again, new highs in the SP500, US 10 year interest rates look to re bound, negative interest may soften. The US FED has reversed their QT and now doing $250BN (not QE) repo. The main point is the FED has stopped QT, and will do QE forever. The evidence now is the FED put is under market risk and the possibility of excessive losses do not exist. 

Point: If in future if there is market risk, the FED will print it's way out of it.
Subject To: In this blog view. The above is so until the amount required rocks confidence in the US dollar as a reserve currency.&n...



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Lee's Free Thinking

Today's Fed POMO TOMO FOMC Alphabet Soup Unspin

Courtesy of Lee Adler

But make no mistake, if the Fed wants money rates to stay down by another quarter, it will need to imagineer even more money.

That’s on top of the $281 billion it has already imagineered into existence since addressing its “one-off” repo market emergency on September 17. This came via  “Temporary” Repo Man Operations money, and $70.6 billion in Permanent Open Market Operations (POMO) money.

By my calculations that averages out to $7.4 billion per business day. That works out to a monthly pace of $155 billion or so.

If they keep this up, it will be more than enough to absorb every penny of new Treasury supply. That supply had caused the system to run out of money in mid September.  This flood of paper had been inundati...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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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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