Posts Tagged ‘BA’

Tuesday – Topping Out or Just Pinning the Fed?

Tough call today

The Dollar bounced off 79.75 this morning, nothing to crow about for Dollar bulls as the Euro remains just over the critical $1.30 mark and the Pound is solidly over $1.55 for the moment.  

You could say it's a bearish sign that the Dow and the NYSE stopped dead at our breakout levels but that's to be expected on a first attempt at breaking out – even if they have already attempted the same move back in late October, when the Dow was 5% lower in it's test and the NYSE was testing the same line (7,866).  

Our broadest market index is the one that's holding everyone back as what little volume there has been in this rally has been fairly narrowly focused on certain leaders.  Now a pessimist might say that this is a reflection of the blatant manipulation of the indexes in which certain Banksters place buys on stocks that have disproportionate positive effects on the junior indexes in order to fool retail traders into believing there is a rally while the Banksters drive the VIX down to multi-year lows, dump all their stocks on the bagholders and prepare to cash in by crashing the markets on a major event like tomorrow's FOMC Rate Decision which is, in fact, very unlikely to have any language specific to the QE3 that has been promised by the MSM since Thanksgiving.  

SPY DAILY An optimist would say – well, you can read almost any MSM site for that.  It's lonely at the top of the range when you are bearish, one by one the other bears capitulate and soon you are there all by yourself with your shorts – your lovely, lovely, cheap shorts!  The Dow shot up yesterday to just over the 12,749 breakout line we have as the tippy top of the range on our Big Chart so of course I called for DIA puts in Member Chat.  The DIA Feb $123 puts, which came in around .75 and finished the day not much higher at .78 after topping out at .95.  Ranges usually hold – if you're not going to have conviction at the very top of a range to short – when will you?  For one thing – you have a very good stop line to watch!

As noted by Dave Fry in his SPY chart, the bulls have engineered their golden cross…
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Thanksgiving Thoughts

SPY DAILY What an ugly finish November is having!  

We’ve been trying to get bullish with little success and, if we are not reversing tomorrow, I will be regretting the wasted time poking at bullish plays when we could have been going "wheeeee" on the slide.  

I thought that blue line on Dave Fry’s chart was going to hold, it’s about 2.5% down from our Must Hold level for the S&P on the Big Chart (1,235) and that would have been a reasonable (and slight) overshoot of the 10% drop we were expecting so we played for the bounce but now we’ve blown our -5% line at 1,173 and our next support level is -10% at 1,112 – a very sad level to revisit if we do.  

Technically, of course, we’re breaking down.  Fundamentally, I’m not so sure.  The fear is palpable as Europe looks terrible and clearly all these austerity measures are taking a toll on the Global economy but it’s simply NOT showing up in the data yet.  PMI’s are dropping across the Globe but the Purchasing Manager’s index is a SENTIMENT indicator that reflects the OPINION of the buyers about business prospects.

As I have been pointing out (yes, there was a point) in my recent series of articles about market and media manipulation – there is a protracted campaign underway to push sentiment down – to chase retail buyers out of the markets.  

Who is doing this?  Perhaps it is the IBanks, who want to bottom out the market ahead of QE3, when we’ll be off to the races again.  Perhaps it is the Fed and Treasury, who want to chase people into the $140Bn worth of bonds they have to sell each month.  Perhaps it is the Republicans, who want to campaign against the worst possible economy next year to prove that Obama has blown his handling of the economy almost as bad as Bush did – so we may as well try one of their idiots again since it seems to make no difference.  Don’t laugh – I have a button for Romney that says that

Whatever and whoever is behind the negativity (and let’s not forget Germany, who are angling to take control of the EU and will be able to do so if things deteriorate further) – our job as investors is not to particularly care – but…
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Boeing Bears Bulk Up On Put Options Ahead Of Earnings

Today’s tickers: BA, AEO, BP & TOT

BA - The Boeing Co. – Weekly put options covering the commercial airline manufacturer are active ahead of Boeing’s third-quarter earnings report ahead of the opening bell on Wednesday. Shares in Boeing rallied earlier this morning, but have since turned negative to stand 0.20% lower on the session at $64.46 as of 11:25 am EDT. Put players may be picking up downside protection ahead of the earnings release should the report fail disappoint at mid-week. Traders purchased nearly 500 in-the-money puts at the Oct.’28 $65 strike for an average premium of $1.63 each, and picked up some 2,000 puts at the Oct.’28 $62.5 strike at an average premium of $0.78 apiece. Put volume at each strike is far exceeds open interest levels. Investors long the contracts may profit at expiration day if BA’s shares trade below the average breakeven prices of $63.37 and $61.72, respectively. Meanwhile, traders doubting the stock will tank on the earnings report, sold 2,196 puts at the Oct.’28 $57.5 strike to pocket premium of $0.11 per contract. Put sellers keep the premium received on the transaction as long as shares in The Boeing Company top $57.50 at expiration day this week. Traders short the puts could wind up having shares of the underlying put to them at expiration should the stock drop 10.8% from the current price of $64.46 to trade below the $57.50 strike price.

AEO - American Eagle Outfitters, Inc. – Call options on American Eagle Outfitters are on-trend with investors positioning for shares in the teen retailer to rally during the next four weeks to November expiration. American Eagle is scheduled to report third-quarter earnings ahead of the open on November 17. Shares in AEO are currently up 3.1% at $13.40 as of 11:10 am in New York. Call buying and put selling in the front month ensued within minutes of the morning bell. Investors expecting shares in the apparel and accessories retailer to increase snapped up roughly 1,800 calls at the Nov. $14 strike for an average premium of $0.46 each. Trading traffic in near-term calls was heaviest at the Nov. $15 strike, where more than 8,900 contracts changed hands against open interest of 4,829 positions. It looks like most of the Nov. $15 strike calls were purchased for an average premium of $0.22 apiece. Call buyers profit at expiration in the event that AEO’s shares surge 13.6% to…
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Just Another Manic Monday – Value Investing

Up, up and away!  

As I mentioned in Friday’s morning’s post, we did a lot of bottom-fishing on Thursday as we began to develop Disaster fatigue with long plays on XLF at $11.50, shorting TLT at $123, shorting VXX at $49.50, TNA at $34.50, BRK.B at $65, AA at $10.20, VLO at $19, IMAX at $15.75, BA at $58.32, AGQ at $170, CHK at $27.50, DIS at $30.14 and ABX at $47.50.   They were hedged, of course and, for the most part, you still had a nice chance to make those entries on Friday – but not so much this morning as the futures are up about 1.5% already (7:30).  

Friday morning, in my Alert to Members, I reminded them that BCS looked like an excellent VALUE to me, no matter what the PRICE was ($8.75 after hitting $8.40 the day before) and this morning, that PRICE is up well over 10% in EU trading.  Did the VALUE of BCS change materially over the weekend?  Of course not, certainly not by the $4Bn their market cap gained – like the song, the VALUE remains the same – only the highly variable price of a share of BCS is undergoing ch-ch-changes…  

I pointed out similar hedged, long-term plays could be made on GS ($94), MS ($13), BAC ($6) and C ($24).  Of course we hedged them per our discussion in the morning post (TZA was our morning choice but we’re out over 650 on the RUT) but then we went long on EWG (Germany) again with the very aggressive Oct $16,18 bull call spread at $1.30, offset by the sale of the $17 puts for .90 for net .40 on the $2 spread.  10 of those in our virtual $25,000 Portfolio cost $400 and can return $2,000 in less than 30 days if EWG is over $18 and, guess what – they’re over $18 this morning!

Another bullish bet we placed was USO Nov $28/30 bull call spread at $1.30, selling the $27 puts for $1.10 for net .20 on the $2 spread with a 900% upside if USO simply doesn’t drop from where it is now.  That’s what’s nice about options – you don’t need the market to go up to make money good money.  On this trade idea, your worst-case scenario is owning USO at net $27.20, about 10% lower than it…
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TGIF – Stop the Week, We Want to get Off!

What a disaster!  

Of course, that's why we have Disaster Hedges, right?  August 11th was the last time we did a "Hedging for Disaster" post which included a LONG trade idea on gold that's done now (we're short) after gaining over 300%.  We're a little mixed in our results on the other hedges but that means we can SWITCH HORSES – from the trades that have already worked to the ones that haven't yet.  That's how we cash out our winners on a regular basis – it's the pony express of investing.   Our other Disaster Hedges from that post were:  

  • DXD Oct $23 calls at $2, selling Oct $27 calls for $1.15 and the Oct $19 puts for .70 for net .10.  That spread is currently -.05 so down 150% so far and a nice horse to switch to, offering a .05 credit on the $4 spread.  
  • FAZ Oct $65 calls at $22, selling Oct $72 calls for $20 and selling JPM 2013 $20 puts for $2.05 was a net .05 credit as a backstop to our long financial plays.  FAZ is now at $71.34 and the October FAZ spread is now $3.70 but the JPM puts are now $3 so net .70 is only up 1,500% so far.  Should the financials stay low, we get the full $7 from the spread and we're obligated to buy JPM for $20 (now $29.27) in 2013.  
  • SDS Sept $26 calls at $3.20, selling Sept $32 calls for $1.65 and selling VLO Jan $15 puts for $1.20 for net .35.  SDS is only at $25.73 so far (not a disaster yet) and the spread is now net $1.25 and the short VLO puts are .17 so net $1.08 on this one is up 208% and we're not even at goal – that's pretty good!  Note the spread is LOWER than when we started so this can also be used as a fresh horse with a different offset, like X Jan $15 puts for $1.20 for a net .05 trade.  
  • TBT was stopped out with a small loss at $24 (fortunately).  My comment at the time, with TBT at $24.88  was:  "Keep in mind though, that the Fed has said rates will stay low through 2013 so it would be wise to uses stops on the


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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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Wild Weekly Wrap-Up (Part 1) – Our Billion Dollar Oil Shorts!

Billions!  

That’s how much money our oil futures trade ideas generated over the past two weeks and I certainly hope everyone got a piece of theirs but, out of curiosity, how did our other trade ideas do in this terrible market?  We track our virtual portfolios but we have many trade ideas during members chat on both sides of the fence so let’s take some time to review what worked and what didn’t work as the Dow dropped 500 points since the holiday.  

Keep in mind this is just virtual performance and I’ll do my best to not miss anything and I’m going to include the Friday before the holiday weekend so we can review what our mind-set was as we set ourselves up for the long weekend as well as how we handled the moves since in both our daily posts and our Member Chat.  I’m not going to narrate each day, that’s what Stock World Weekly is for –  I’ll just make quick comments on the trades when appropriate.  Keep in mind, with all options trading, once you make a quick 20%, you should be looking for the exits (see our Strategy Section) by setting stops (and we also stop out with a 20% loss of course) – we are just lucky when we happen to do better.  

TGIF – Dollar Done Diving or Destined to Drop?  

In the main post (main post trade ideas can be read daily by Report Members or higher – the rest are in our Private Member Chat), I discussed shorting oil futures off our $101.90 (at the time) target.  We didn’t like waiting for $102 because sometimes it failed.  Oil finished at $99 this week but was as low as $97.24 as we put pressure on the NYMEX pump crew by accepting their bogus offers to buy oil over $101 per barrel.  This post was the first one where I decided to go public with what we were doing, hoping to break the back of the market manipulators at the NYMEX by letting as many people as possible in on the trade.  This is also where I laid out our bearish fundamental case for oil so good for review.  My comment in the morning post was:  

As I mentioned yesterday, this week’s action is 


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Wednesday: Wiping Out All of 2011′s Gains!

S&P 1,260.  That's the line we need to hold.

That's where we started the Year on January 3rd and we finished that day at 1,271, beginning a fine tradition of making almost all of our gains on the first day of the month, continuing a very disturbing (and very fake) year-long trend that I am calling "sell the next day (of the month) and go away." (chart by Bespoke).

Notice that this trend became very disturbing at the same time Uncle Ben announced his fabulous QE2 plan that showered money on his fellow Banksters according to a nice, predictable schedule that allowed them to lever up their investments to inflate stocks and commodities, trapping index fund investors (especially the working poor who make monthly contributions to IRA and 401K accounts in a nice, predictable and controllable fashion).  It's a simple plan, index fund managers get your pension money at the end of the month, they are required to buy baskets of stocks to balance their funds and that action can be manipulated by clever bankers who jack up the prices and then sell into the fake demand they created – effectively stealing tens of Billions each month out of the paychecks of working Americans.  Just another one of those great crimes they commit where they steal a little bit of money from everyone, every day.  

Speaking of robbing from the rich to give to the poor (see "The Dooh Nibor Economy"), it's time we said happy 10th anniversary to the Bush/Obama tax cuts that have, as Barry Ritholtz put it: "driven the balanced budget he inherited from President Clinton deep into the red."  So deep in the red, in fact, that even now Congress is still debating about extending the $14.5Tn deficit that the Congressional Budget Office says will double over the next 10 years if these cuts remain in place.  

That's right, those same tax cuts that are "off the table" in negotiations in Congress are, other than war spending, the sole cause of our nation's deficit.  This country does not have a spending problem, it has a collecting problem!  As Mike Konczal, a research fellow at the Roosevelt Institute, noted: "It's not like this has unleashed a wave of productivity, or better incentives, or increased work output. It's mostly just rich
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Strangle-Strategist Targets Boeing

Today’s tickers: BA, CSCO, TIN & TEVA

BA - Boeing Co. – Boeing’s shares may be headed for the stratosphere or ready to crash and burn over the next few months according to the buyer of a sizable long strangle on the producer of commercial jetliners today. Shares in the Chicago, IL-based company are up 0.90% at $76.27 in early-afternoon trade, recovering up from earlier losses following disappointing April durable goods data. The strangle-strategist it seems is at least looking for implied volatility on the stock to climb if not the actual price of the underlying shares. The trader purchased approximately 7,500 calls at the August $85 strike for a premium of $0.56 each, and purchased the same number of puts at the August $65 strike at a premium of $0.88 a-pop. Net premium paid to initiate the strangle amounts to $1.44 per contract, thereby preparing the trader to make money should the stock swing sharply in either direction away from the current price. Profits are available on the upside at expiration if the stock is trading above the upper breakeven point at $86.44, while profits on the downside require shares trade below the lower breakeven point at $64.56 at expiration. Boeing’s shares would need to jump 13.3% higher, or drop 15.4%, from the current price to break-out of either point in the next few months. But, as mentioned previously, the stock need not move at all for the buyer of the strangle to benefit from the position. What is required are rising expectations of turbulent days ahead for BA’s shares, in other words, higher implied volatility. The combined value of the call and put options should increase if implied volatility on Boeing climbs going forward. The investor may be able to sell the strangle ahead of expiration for more than the $1.44 per contract required to purchase the position today given favorable moves in the level of volatility on the stock. Boeing reports second-quarter earnings on July 27 ahead of the opening…
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Phil's Favorites

Trump Tweeting As Much As Ever Amid Twitter Standoff

 

Trump Tweeting As Much As Ever Amid Twitter Standoff

By , Statista

President Trump has signed an executive order which aims to remove some of the legal protection given to social media companies, though it is expected to face significant legal hurdles. In a nutshell, it sets out to clarify the Communications Decency Act, handing regulators the power to file legal proceedings against social media companies for the way they police content on their platforms. Trump's decision to take action comes two days after Twitter attached a fact check to one of his tweets lambasting mail-in voting. He then threatened to close ...



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ValueWalk

Gold supply chain in recovery mode after pandemic shutdown

By Michelle Jones. Originally published at ValueWalk.

The gold supply chain was largely shut down as the COVID-19 pandemic spread around the world. However, things are starting to open back up, and production is beginning again. The World Gold Council studied the gold supply chain, how it was impacted by the pandemic, and how the disruption of the supply chain has affected investment demand for the yellow metal.

Q1 2020 hedge fund letters, conferences and more

Disruption to the gold supply chain

The World Gold Council said the gold supply chain is entirely global because the metal is mined on evert continent except Antarctica and refined in nume...



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Biotech/COVID-19

Antigen tests for COVID-19 are fast and easy - and could solve the coronavirus testing problem despite being somewhat inaccurate

 

Antigen tests for COVID-19 are fast and easy – and could solve the coronavirus testing problem despite being somewhat inaccurate

Antibodies are incredibly good at finding the coronavirus. Antigen tests put them to work. Sergii Iaremenko/Science Photo Library via Getty Images

Courtesy of Eugene Wu, University of Richmond

In late February, I fell ill with a fever and a cough. As a biochemist who teaches a class on viruses, I’d been tracking the outbreak of...



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Zero Hedge

Ted Cruz Accuses Twitter Of Violating Sanctions Against Iran, Demands DoJ Probe

Courtesy of ZeroHedge View original post here.

We've mentioned in nearly every single one of our posts about this week's dustup between the president and Twitter that the Ayato...



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Kimble Charting Solutions

Tech Indicator Suggesting A Historic Top Could Be Forming?

Courtesy of Chris Kimble

Tech stocks have been the clear leader of the stock market recovery rally, this year and since the lows back in 2007!

But within the ranks of leadership, and an important ratio may be sending a caution message to investors.

In today’s chart, we look at the ratio of large-cap tech stocks (the Nasdaq 100 Index) to the broader tech market (the Nasdaq Composite) on a “monthly” basis.

The large-cap concentrated Nasdaq 100 (only 100 stocks) has been the clear leader for several years versus the ...



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The Technical Traders

M2 Velocity Collapses - Could A Bottom In Capital Velocity Be Setting Up?

Courtesy of Technical Traders

M2 Velocity is the measurement of capital circulating within the economy.  The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth.  When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.

The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market colla...



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Lee's Free Thinking

US Southern States COVID19 Cases - Let's Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboar...



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Chart School

Is this your local response to COVID 19

Courtesy of Read the Ticker

This is off topic, but a bit of fun!


This is the standard reaction from the control freaks.








This is the song for post lock down!







What should be made mandatory? Vaccines, hell NO! This should be mandatory: Every one taking their tops off in the sun, they do in Africa!

Guess which family gets more Vitamin D and eats less sugary carbs, TV Show



...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.