Posts Tagged ‘BHP’

Toppy Tuesday or Time to Buy the Dip?

Just when I thought I could get bullish, they pull back again!  

While still EXTREMELY skeptical of this rally, I AM trying to get in the spirit.  As I noted yesterday, we have aggressive new levels that we determined in our weekend review of our 5% Rule and still need to see some more progress before we can throw caution to the wind and BUYBUYBUY like it's 1999.  Despite our best efforts, the silly move in the Russell yesterday had me putting up a TZA hedge in our morning Member Chat:  

RUT made a crazy move from 823 to 830 this morning for no good reason.  TZA April $17 puts can be sold for $1 and the the $17/18 bull call spread can be bought for .42 for a net .58 credit for a $16.42 net entry with TZA currently at $17.73 so it's a hedge with a bet against RUT 850 in 30 days.  

At 1:23, I followed up by saying: "Look at the RUT now, stuck at the 1.25% line. Obviously, 840 is the 5% move up from the new 800 base so we take that and expect an 8-point pullback but the indexes have been routinely overshooting by 20% (848) and even 40% (856) before pulling back so now that we're past 840 without a pullback, we'll just have to wait and see but, no matter what, we should expect to see 832 re-tested eventually, which is why I liked the TZA play as they crossed that line this morning."

SPY WEEKLYAs it worked out, that was the dead top of the RUT and we quickly got our break back below 840 and our ride down to 832 at the close.  At 2:50, the Russell Futures failed to get back over 840 and my comment to Members was: "840 on RUT, this is the spot to press those shorts if ever."  As you can see from the above chart – we went very nicely off a cliff right after that.  JRW, our Russell expert had called the bull run and was ahead of me at 2:29, calling "Back to cash!" and my comment, also at 2:50 was:

Cash/JRW – I agree.  As I said last week, better to miss 5% of the next round of foolishness than play


continue reading


Tags: , , , , , ,




Friday Finale – This is the End – But for Who?

SPY DAILYA day late and a point short on the S&P.  

Our senior index finished the day at 1,358.04, just 0.96 under our 10% line at 1,359.  Oddly enough, it never actually crossed the line that we had predicted would be the top of this run in April of 2009.  It's a simple 2% overshoot of the 100% run from the S&P bottom at 666.  

If the S&P can get over the line and hold it – we will be THRILLED to finally redraw our Big Chart but, if not, then this is just the blow-off top of the range, reeling in the suckers ahead of the big reversal that no one could have possibly seen coming (except this guy but he's like 100 and just got divorced, so he's bound to be in a bad mood).  

Is there anyone who was born SINCE radio who is willing to still be bearish?  As you can see from David Fry's chart, since December 19th, other than a few red days out of over 40 – it's been tough to be a bear.  This is what it was like in 1999, when the experienced market players would be well-hedged and missing the rally while some kid who works for him quits because he bet his student loan money on Yahoo and now drives a Porsche.   

Sure 9 months later the Porsche was repossessed and the kid was flipping burgers but WE WANT TO BE THAT KID – IT'S FUN TO BE THAT KID – until it isn't again.  The funny thing is, we only gave those dot com companies Millions when they IPO'd – now we give out Billions because, of course, this time is different, it's a new paradigm, this changes everything, you have to understand the new metrics, sock puppets rule….  

McDonald's was founded in 1940 by two brothers actually named McDonald.  Ray Krok bought the chain from them and created the World's greatest franchise which now has over 26,000 franchise operations and over 6,000 company stores employing about 1.7M people worldwide selling $24Bn worth of food a year with a $5Bn net profit.  Facebook has 3,200 people but they generate $1.2M in revenues per employee ($3.8Bn) and drops $1Bn to the bottom line.  Facebook's assets are mainly IP and those are about as valuable as MySpace's assets now
continue reading


Tags: , , , , , , , ,




Demand for Blue Coat Systems Call Options Pops

Today’s tickers: BCSI, BHP, KFT & MOBI

BCSI - Blue Coat Systems, Inc. – Speculation and unconfirmed rumors that Cisco may be interested in acquiring rival Blue Coat Systems sent shares in Sunnyvale, CA-based Blue Coat up as much as 8.0% this afternoon to an intraday high of $28.85. Investors flocked to the May contract to buy out-of-the-money call options on the stock in case the there’s any element of truth driving the takeover chatter, or simply to benefit from rising call premiums that result from the higher implied volatility and share price that’s likely to accompany continued speculation. Options traders exchanged more than 4,500 calls at the May $29 strike on open previously existing open interest of just 150 contracts. It looks like bulls purchased the majority of the calls for an average premium of $0.71 apiece. Call buyers stand prepared to profit in the event that Blue Coat’s shares rally another 3.0% to surpass the average breakeven price on the upside at $29.71 by May expiration. Investors purchased another 1,000 call options up at the May $30 strike, paying an average premium of $0.57 a-pop. Higher-strike call buyers make money if shares in Blue Coat Systems increase 6.0% over today’s high of $28.85 to exceed the average breakeven share price of $30.57 in the time remaining to expiration. Options implied volatility on the stock jumped 21.8% to 50.04% on Friday afternoon, and continues to climb in the final hours of the trading week.

BHP - BHP Billiton Limited – Put players initiated diverse bearish options strategies on the natural resources company today, with shares in BHP Billiton slipping 0.65% to $99.79 on speculation China may do more to combat the faster-than-expected rise in inflation. The bulk of volume generated in BHP’s options appears to be the work of one…
continue reading


Tags: , , ,




Turn Up Tuesday – POT Gets Really High

BHP offered to pay $38.4Bn for POT this morning.

Is BHP high or is this market seriously undervalued?  Well, for one thing, POT turned them down saying the offer ($130/share – CASH) "substantially undervalues PotashCorp and fails to reflect both the value of our premier position in a strategically vital industry and our unparalleled future growth prospects."  CEO Dallas Howe continues: "We believe it is critical for our shareholders to be aware of this aggressive attempt to acquire their company for significantly less than its intrinsic value. The fertilizer industry is emerging from the recent global economic downturn, and we feel strongly that PotashCorp shareholders should benefit from the current and potential value of the Company. We believe the BHP Billiton proposal is an opportunistic effort to transfer that value to its own shareholders."

Considering POT closed at $112 yesterday, so a 16% pop in the offer but POT was at $85 at the beginning of July and hasn’t been over $130 since the 2008 crash, although they did top out at $239.35 so I suppose a very patient investor could imagine that within 5 years, $200 is not an unreasonable goal.  Still, is that enough reason to turn down $130 of cash now, with the proverbial 1.3 birds in the hand being worth 2 in the bush? 

Back on July 12th (when POT was trading at $92.81 and the Dow was at 10,200) my premise for looking for S&P 1,100 and Dow 10,700 was that Corporate America’s Non-Financial companies were sitting on a $2Tn pile of cash and, as an old M&A consultant, it seemed pretty obvious to me what was going to happen to that money. 

We’ve had plenty of M&A activity recently.  In fact, M&A activity in the first half of 2010 saw 5,345 deals (up 49% from last year), the highest level since 2007, indicating that companies are INCREASING their confidence in the economy despite the BS spin you are getting from politicos who NEED you to believe things are worse than they seem and the MSM, who push fear like heroin to create a NEED for their product.

POT’s board of directors is very confident that they don’t NEED BHP’s money and BHP may NEED POT badly enough to want to sweeten the deal – frankly I’m surprised at the timing because I would have waited for another dip and the fact that BHP (one of the World’s largest resource companies with $50Bn in annual sales)…
continue reading


Tags: , , , , ,




Mega Earnings Monday – 1,000 Reports This Week!

What a crazy week this is going to be!

Pre-Market we're hearing from BLK, CAT (are we building stuff?), EXP, HTZ, HUM, LO, TUES and TZOO and later we will hear from BSX, CHH, OLN, RSH, RCII, TXN (major) and my "friendbuddypal" Cramer's TSCM (if they are not delayed).  Revenues at The Street have crept back up this year in a recovery that pretty much mirrors the market.  The company does pay a nice 2.6% dividend, which works out to a nice $200,000 bonus on Jimmy's 2.1M shares (6.7% of the company) so you know that bonus will be a priority for the company.  Cramer was BUYBUYBUYing his own stock at $2.41 in January but sadly they have no options to hedge…  They might make a nice pick-up after earnings if they disappoint and head back to $3 or less.

I'm full of useful information on hundreds of stocks right now because I've been researching our new Buy List but I'm not pleased with what I've been seeing so far and this week's tidal wave of earnings, with 1,000 companies reporting means we're in no hurry to dip our toes in the water.  I told Members this morning I should probably be working on a Sell List, as it's much easier to find companies I want to short than ones I want to buy.  Even in the Weekly Wrap-Up, we featured a 1,900% downside hedge on the Russell to offset the 566% plays and other bullish plays we've begun to reluctantly take, just so we don't feel too silly in this runaway market. 

If you have never watched Jim Cramer discussing the sleazy, manipulative ways he used to game the markets – you really must take 10 minutes and watch this video, where Jim explains how any immoral bastard with $10M can yank the entire futures market around at will.  He prefaces one of his favorite strategies with "this is blatantly illegal but.. I think it's really important… these are things you MUST do on a day like today and if you are not doing it, maybe you shouldn't be in the game."  Are you playing the game or are you being played? 

The biggest game ever played may be unwinding as we speak.  Bloomberg reports that foreign-exchange profits from carry trades are disappearing as differences in central
continue reading


Tags: , , , , , , , , , , , , , , , , , , ,




Friday Market Follies – Up, Up and Away?

And away we go!

We have finally broken through all of our breakout levels and no one is more surprised than I am to see this coming without a pullback (perhaps David Fry – see chart on right).  We will, of course, remain cautious through the weekend but we're already preparing to throw caution to the wind (sort of) as I've posted a primer for our Buy/Write Strategy, so we can start picking up the stocks we want at roughly 15-20% discounts.  This is why we can afford to be patient as we wait for our breakout levels – WE DON'T MISS ANYTHING!  At PSW, we can STILL buy BAC for $14.41 (16% off) and C for $3.43 (27% off) and PARD for $3.79 (51% off) and now that we have made our tops, we feel a lot more comfortable working in at those prices than we would have when the market was 20% lower in early July.

Hopefully that floor holds (Dow 8,000).  We're looking good so far as our breakout levels have been Dow 9,600, S&P 1,030, Nasdaq 2,038, NYSE 6,700 and Russell 577 and now they form a floor we will be able to watch so we’ll know when to be worried that the rally is running out of steam. 

We are also well-protected with our disaster hedges from the Aug 24th post and, if you don't have any – it's still a good idea to get some (and cheaper now too!).  Only 2 33% (off the top) levels remain and that’s 1,056 on the S&P and 6,959 on the NYSE and we will be officially raising our mid-point from Dow 8,650 to 9,500 if we can take those out and hold them for a day or two, which will make 9,000 our new expected floor on the Dow and that means we should be buying here!  There’s no point in having watch levels if we don’t act on them.  

The dollar continues to fall and that's supporting oil and gold but not the Nikkei, who fell 100 points off their open and finished down .666% for the day as the dollar failed to hold 91 Yen against the world's mightiest currency.  Even a 50-point "stick save" into the Nikkei close couldn't paint a positive close for the day.  A 100-point boost into the close was enough to give the Hang Seng a 91 point gain on the day,
continue reading


Tags: , , , , , , , , , , ,




Friday Morning – Goldman’s Global Goose!

We have talked about manipulation all week but this takes the cake!

The Nikkei was plunging 250 points this morning as the dollar collapsed (in a move to boost commodities and the US markets – more on that later) below the critical 94 Yen mark and, EXACTLY AT THE MOMENT the Nikkei crossed the critical 10,200 line we've been watching all week (11 am, just as they were closing for lunch), Kathy Matsui, chief equity strategist at Goldman Sachs, jumped on the phone and literally stopped the presses by calling for a 73% increase in Japan's corporate profits next year buoyed by cost cuts, a weaker yen and rising demand.  “People are going to be surprised at how sharp the recovery will be,” Matsui said in a phone interview.  

Goldman’s estimates equate to 48.9 yen in earnings per share for the Topix in the financial year ending March 2011, placing the benchmark at 19.4 times estimated earnings. The brokerage also reversed its forecast among all industries to a 23.3 percent increase in pretax profits this year from a 15 percent decline.  “Our forecasts for both the March 2010 and March 2011 financial years exceed consensus estimates largely due to our expectations of stronger global growth, continued restructuring benefits, and a weaker yen,” Matsui wrote in a report titled “Back in Black.”

Note that Ms. Matsui is the only analyst who sees this Asian miracle occurring this year as Global emerging-market equity funds posted their biggest weekly outflows of 2009 as investors pulled money out of China on concern banks expanded credit too rapidly, EPFR Global said.  Funds that invest in emerging-market stocks worldwide lost $946 million, while China funds had their worst week since the first quarter of 2008, according to the Cambridge, Massachusetts-based research company. Investors pulled $810 million from Asia excluding-Japan funds, the most in 24 weeks, while Latin America and Europe, Middle East and Africa funds had “modest inflows,” said EPFR, which tracks funds with $10 trillion worldwide.  

This amazing 200% reversal of forecast timed at 10pm on option expiration eve East Coast time, took the S&P futures from 996 all the way back to 1,010 and took the Dow futures from 9,250 (down 100 from Thursday's close) all the way to 9,375.  The Nikkei managed a "stick save" and finished the day down "just" 1.4% at 10,250 and the
continue reading


Tags: , , , , , , , , ,




Monday Market Meltdown – Down Goes Copper!

It wasn't Ali who shocked the World knocking Joe Frazier down it was George Foreman.

In 1973 the undefeated Frazier had beat the unbeatable Muhammad Ali (everyone's favorite Muslim) to take the title and had defended it twice in 1972 before being knocked out in just 2 rounds by Foreman (everyone's favorite grill salesman).  Frazier had 29 consecutive victories up to that point and seemed unstoppable but then, suddenly… unexpectedly… he was stopped.  Giving Frazier huge credit he was knocked down 6 times before they stopped the fight but it was a beating nonetheless.

This morning copper has been knocked down and is leading commodities lower after coming off an earlier knockdown at $200 and another at $150 -  having started its run way down at $125 back in December.  Of course, after a 100% run to almost $250 we can certainly forgive them a 20% pullback to $225 per our 5% rule and we're not going to call the fight just yet but Oil is also pulling back off a 100% run while gold has only moved 17.5% over the same time period, already double-topping at $1,007 and $989 in February and May respectively.  

As recently as May 26th, we had looked to copper as a bullish sign as they broke out over $200 but oil was only $60 at the time.  Since then, both copper and oil have rocketed 25% to the point at which I warned of hyperinflation in a special post last Thursday.  Let's take this move VERY seriously as it took days after I started worrying about copper for the commodity to finally drop and my observation on May 12th was that investors had finally realized that "China buying copper to stack it up in warehouses wasn’t a buying premise."  That gave us a great week last options expirations as we took bearish stances on Agriculture, Oil and Metals right into Monday's mega-pump as the Dow then gave up 600 points between that Monday's post, where I called for a meltdown, and that expiration day Friday when I said: "We are already on vacation, having followed our plan to cash out at the bottom yesterday anticipating some short covering today that would take up the markets."

That gave us a very happy
continue reading


Tags: , , , , , , , ,




 
 
 

ValueWalk

9 Tech Trends That Might Just Change The World

By Luke Fitzpatrick. Originally published at ValueWalk.

A lot can happen in a decade. Just take a look at how different life is today compared to 2010. Smartphones and automated technologies have made our lives much easier in a lot of ways, while the new age of constant connectivity has altered the way we work, shop, and relate to one another.

Far from slowing down, the pace of progress is getting faster all the time. Some of the new technologies on the horizon are prone to change the world as we know it. Here are 9 tech trends to keep an eye on this year.

1. Augmented human’s

Like the smartphones in our pockets, humanity itself is going to get an upgrade. If the rapid rise of wearable technology is anything to go by, it’s...



more from ValueWalk

Phil's Favorites

Economists: Biden's $1,400 COVID-19 checks may be great politics, but it's questionable economics

 

Economists: Biden's $1,400 COVID-19 checks may be great politics, but it's questionable economics

Most people used the first coronavirus check to pad their savings or pay down debt. AP Photo/Eric Gay

Courtesy of Robert H. Scott III, Monmouth University and Kenneth Mitchell, ...



more from Ilene

Zero Hedge

Afternoon Wood: ARK Founder Says "Carnage" Coming In Energy & Finance, "Optimistic" About Tech Names

Courtesy of ZeroHedge

Cathie Wood made the first appearance in her Monday media tour when she took to CNBC at 3PM eastern to talk about the tech rout, which has crushed numerous ARK ETFs. ARKK was plumbing new lows when the conversation started with "the woman who has captured the attention of Wall Street", as CNBC's Wilfred Frost introduced her.

About The Sell Off

When asked how concerned she was about the market, Wood did not attribute the tech pullback to rates rising. "We've been struck that the market never priced in 0.5%, 1% or 1.5% interest rates," she said. "Over time markets have used a normalized 3% to 5%, and we don't think that's why the market is correcting." ...



more from Tyler

Kimble Charting Solutions

China Creates Back To Back Bearish Patterns At 6-Year Resistance!

Courtesy of Chris Kimble

Could China be sending an important message to stocks around the world? Very possible!

This chart looks at the Shangai Index on a monthly basis since the early 2000s.

The index has peaked twice in the past 6-yeas at its 50% Fibonacci retracement level. These peaks took place in 2015 and 2017 and were followed by declines of at least 25%.

The past two months it has tested this 6-year resistance line/50% Fibonacci level, where it created back-to-back monthly bearish reversal patterns.

If the index closes much below risi...



more from Kimble C.S.

Chart School

Who is King? The Bond Market or the FED

Courtesy of Read the Ticker

The King Arthur story is battle between a false KING and the true KING. Generally the movie involves surprises, love and violence, and all this coming to the risk on markets very soon. 

The financial blog space expects the FED to do some sort of Yield Curve Control (YCC) to hold interest rates down while inflation moves higher, this is allowing inflation to run hot. The FED wishes to do this over time to deflate the debt away. Very similar to the 1940's post WW2, yields were pegged to 2% and risk on assets went sky high.

However Peter Boockvar suggest the FED may soon learn it is not in control and the true king of the markets is the BOND MARKET. Peter says simply the bond market is telling the FED to bite me!

The FED is not us...

more from Chart School

Biotech/COVID-19

88% Of COVID Deaths Occurred In Countries Where Over Half Of Population Overweight

Courtesy of ZeroHedge View original post here.

A new report by the World Obesity Federation found that 88% of deaths in the first year of the pandemic occurred in countries where over half of the population is classified as overweight - which is defined as having a body mass index (BMI) above 25. Of note, BMI values above 30 - considered obese - are associated with 'particularly severe outcomes,' accor...



more from Biotech/COVID-19

Politics

Why repressive Saudi Arabia remains a US ally

 

Why repressive Saudi Arabia remains a US ally

A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman with blood on his hands protests outside the Saudi Embassy in Washington, D.C., on Oct. 8, 2018. Jim Watson/AFP via Getty Images

Courtesy of Jeffrey Fields, USC Dornsife College of Letters, Arts and Sciences

Saudi Crown Prince Mohammad bin Salman “approved an operation … to capture or kill Saudi journalist Jamal Khashoggi,” according to a...



more from Politics

Mapping The Market

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



more from M.T.M.

Digital Currencies

Crypto - It Is Different This Time

 

Crypto – It Is Different This Time

Courtesy of Howard Lindzon

?I have been astonished as you know by the growth of crypto.

I remember back in 2017 when I noticed that Stocktwits message volume on Bitcoin ($BTC.X) surpassed that of $SPY. I knew Bitcoin was here to stay and Bitcoin went on to $19,000 before heading into its bear market.

Today Bitcoin is near $50,000.

Back in November of 2020, something new started to happen on Stocktwits with respect to crypto.

After the close on Friday until the open of the futures on Sunday, all Stocktwits trending tickers turned crypto. The weekend messages on Stocktwits have increased 400 percent.

That has continued each weekend...



more from Bitcoin

The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



more from Tech. Traders

Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



more from Lee

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.
...

http://www.insidercow.com/ more from Insider

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.  

...

more from Promotions





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...

Learn more About Phil >>


As Seen On:




About Ilene:

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