Posts Tagged ‘BNP’

Testy Tuesday – 1,072 or Bounce!

SPY DAILYHas it been a week already? 

That’s right – last Tuesday our title, after 3 bullish days, was "S&P 1,200 or Bust (again)" and bust we did!  At the time I said "It’s not that I’m flip-flopping – we’re simply playing the range and if the trip from the bottom to the top of the range is just 2 days – then flip-flop we must!"  Our bearish hedge in that morning’s Alert to Members was 30 DXD Oct $18/20 bull call spread at .70 ($2,100) offset by the sale of 10 GE Jan $15 puts at $1.05 ($1,050).  DXD is already at $21.34 and the bull call spread is $1.30 (30 = $3,900) while the 10 GE short puts are $1.75 ($1,750) for a net $2,150, up 105% in the first week – even if the short puts were not stopped out with a smaller loss.  

We also ran our Long Put List that morning (see Weekend Reading for recap of that strategy and list of short trade ideas) and those, of course, are up huge across the board as things got so bad yesterday we even had to short IBM – our list’s last brave holdout.  Another fun short we played that day was a ratio backspread on CMG.  

Taking advantage of selling into the pre-earnings excitement, we were able to add the following trade to our virtual $25,000 Portfolio:  

Earnings are on the 20th, the day before expirations so I like the volatility crush of selling 5 $340 calls for $9 ($4,500) and buying 3 Dec $350s for $15 ($4,500) for a free spread.  No matter what CMG does, $4,500 of premium will be gone from the callers on Oct 21st, then the Nov whatevers can be sold, hopefully for another $4,500 in premium or perhaps we can just pull the trade so let’s do one set in the $25KP and see how it goes. 

EEM WEEKLYCMG took a nice dip since then (now $292) and the 5 Oct $340 calls fell to $2.20 ($1,100) but the 3 Dec $350s have held $8.60 ($2,580) for a net profit of $1,480 off a trade that cost no cash just 7 days ago.  These are the kinds of trades we love around earnings season.  We didn’t need to hold it for a month and now we can free up the margin (about…
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Monday Meltdown – Global Edition

108%!

That’s how much Greece is paying today to borrow money for a year!  In theory, if you lend Greece $10,000 today, next year they will pay you back $20,800.  In THEORY that is because, at 108% – IF they actually borrowed at that rate, you could be very sure that they would not be around to pay you.  That’s the joke of this whole thing – we have these insanely unrealistic prices being set on bonds, which only hurts the people who have outstanding ones and need to redeem them as Greece doesn’t actually borrow money for even double-digit interest rates.  It’s all a silly, artificial construct that is only useful in spreading panic among investors.  

Unfortunately, investor panic is all you need to really destroy the Global economy – as we proved in 2008.  As you can see from the chart on the right, we are currently mirroring the same path we took 3 years ago as we head into October and, in fact, our financial sector is performing WORSE than it did when we had ACTUAL major bank and minor country failures – not just rumors of them.  

On Friday, Greece’s finance minister, Evangelos Venizelos, blamed “organized rumors” for renewed speculation that Greece would default, and said the country intended to comply with all terms needed for the bailout that European countries agreed to in July. But the fact that the details of the deal have yet to be locked down has unnerved some investors.

In a speech this week, Josef Ackermann, the chief executive of Deutsche Bank, said it was not justifiable for politicians to demand that European banks raise more capital, as Christine Lagarde (DSK’s evil replacement), the head of the International Monetary Fund, had done. “It’s obvious,” he said, “that many European banks would not be able to handle writing down the sovereign bonds they hold on their banking books to market levels.”

Patrick Chappatte - The International Herald Tribune - Stock market panic - English - Economy,USA,Finance,Subprime,Crisis,Stock Market,Wall Street,Crash,Bank,Speculation,Housing,FearBut, he said, it would “risk undermining the credibility” of European bailout packages “if politicians were to now send out the signal that they do not believe in the success of those measures.” And, he argued, forcing banks to raise capital now would anger investors by forcing the dilution of current shareholders

 "Risk undermining the credibility of European bailout packages?!?"  Is this guy freakin’ kidding?  Greece is being "bailed out" and the market rate on their debt…
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Options and My Patience Expire Today

Well now we're officially cashed out!

As I always do before options expiration I reviewed our Buy List, which, this quarter, is a list of 37 stocks we've been playing since late December and, sadly, after reviewing 37 of our favorite investments very carefully this week – I could only conclude that cashing them out was the only decision I could be comfortable with this week.  Of 66 trades we had on our 37 stocks, 64 are winners with an average return since 2/8 of 28% – since most of the trades were designed to make 40% for the year – it just seems silly not to take the money and run now, on March 19th.

You are not supposed to have 64 out of 66 winners in 6 weeks, you are not supposed to make 3/4 of what you anticipate for the year in 6 weeks – that is NOT how the markets are supposed to work!  When the markets go against you in some ridiculous "black swan" fashion, it is easy to throw up your hands and walks away but when the markets go in your favor in some ridiculous, "white swan" fashion – maybe it's also a good idea to use those same hands to stuff your pockets with cash and walk away.

There's nothing wrong with cash – the Fed tells us there will be no inflation in the foreseeable future and, in fact, they are fighting deflation so our sideline dollars will gain more and more buying power while we wait.  Actually, despite my best efforts, there are still 15 positions that weren't worth getting rid of (too much reward, not enough risk), even in a worrying market.  Generally they are positions we expect to get at least another 20% from by January – still a pretty good return in this low-VIX market. 

Our plan is to take opportunistic trades between now and April earnings – we're still expecting a pullback and I'd be very motivated to go back into our old friends if they go back on sale but most of those picks were made for a defensive market posture that won't be necessary if we break over our levels from here and they certainly weren't worth riding back down after hitting 75% of our goal in 25% of the year! …
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Testy Tuesday Morning – $1.70 for a Pound? I Don’t Think So…

Has the dollar fallen too far?

The British Pound is now fetching $1.70, a huge break-out and well above the June highs, now valued higher to the dollar than any time since last October.  Britain has aggressively cut rates and expanded their money supply and Britain had banks falling like dominoes before being taken over by the government.   The UK's budget deficit as a percent of GDP is forecast to be 11.6% this year, the second worst on the planet, exceeded only by the US's projection of 13.5% but the UK is forecast to catch up in 2010 with 13.3% of their GDP taken up by debt.  Why then, you may wonder, is the British Pound up 25% against the dollar this year and almost 10% this past month?

The answer to that is the same as the answer to many irrational market moves – SPECULATION.  The dollar in general has been pushed back down to 1-year lows by currency speculators and the Pound is benefiting from their No-Euro policy that makes the UK a relatively safe-looking investment for currency traders who are worried that Eastern Europe will eventually prove to be a weight that drags the rest of the EU down.  With a population and economy about the size of California and the independence of a sovereign nation, any small sign of improvement (like the recent uptick in manufacturing data in the UK) can quickly pull money back to the Pound who, just 30 years ago, were the second strongest currency in the world and, for 500 years before that, was the undisputed global leader.  The UK, as it was 500 years ago, is still ruled by its powerful banking sector and again the fishbowl-like nature of the island nation tends to magnify small improvements we've seen in the UK banks, which causes Japanese housewives (who are very into FOREX trading) to push more money into British currency. 

Japan Housewife forexToday it may become apparent that the Japanese housewives have become a little irrational in their Pound exuberance as nationalized British Bank, Northern Rock, showed a 31% increase in first-half losses to $1.25Bn as bad loan provisions jumped to over $1Bn from under $300M last year.  Even worse for the bank – deposits fell 17% despite the bank's 100% government guarantee
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Phil's Favorites

The power of imagination

 

The power of imagination

Courtesy of Grant's Almost Daily

From Reuters:

Starved of the travel experience during the coronavirus lockdown? One Taiwanese airport has the solution – a fake itinerary where you check in, go through passport control and security and even board the aircraft. You just never leave.

Around 7,000 people applied to take part, the winners chosen by random. More fake flight experiences will take place in coming weeks.

For those not lucky enough to win that lotto, might we suggest a stop at the local DMV.

We have ice cream at home

Bloomberg reported yesterday that Citigroup is reversing plans to reopen its offices in 13 states on account of rising coronavirus cases across...



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ValueWalk

Pence On The Latest Jobs Report And Coronavirus Outbreaks

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC exclusive: CNBC transcript: Vice President Mike Pence Speaks with CNBC’s Wilfred Frost on “Squawk on the Street” today on the latest jobs report and coronavirus outbreaks

Q1 2020 hedge fund letters, conferences and more

WHEN: Today, Thursday, July 2, 2020

WHERE: CNBC’s “Squawk on the Street”

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Vice President Mike Pence and CNBC’s Wilfred ...



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Zero Hedge

BLS Admits "Survey Error" Continues, Resulting In Artificially Lower Unemployment Rate

Courtesy of ZeroHedge View original post here.

Last month we reported that in a report full of statistical glitches and outright errors, the BLS itself admitted that a "misclassification error" led to the May unemployment rate being as much as 3% higher than reported. Well, guess what: despite knowing it was openly misrepresenting what is the most important US economic data, the BLS continued reporting numbers that contained a "miscl...



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Kimble Charting Solutions

Nasdaq 100 Relative Strength Testing 2000 Highs

Courtesy of Chris Kimble

The tech bubble didn’t end well. BUT it did tell us that the world was shifting into the technology age…

Since the Nasdaq 100 bottomed in 2002, the broader markets have turned over leadership to the technology sector.

This can be seen in today’s chart, highlighting the ratio of Nasdaq 100 to S&P 500 performance (on a “monthly” basis).

As you can see, the bars are in a rising bullish channel and have turned sharply higher since the 2018 stock market lows. This highlights the strength of the Nasdaq 100 and large-cap tech stocks.

...

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Biotech/COVID-19

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

 

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

We are slowly figuring out which drugs and therapies are effective against the new coronavirus. Anton Petrus / Getty Images

Courtesy of William Petri, University of Virginia

I am a physician and a scientist at the University of Virginia. I care for patients and conduct research to find better ways to diagnose and treat infectious ...



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The Technical Traders

Long-Term Consumer Discretionary Winners

Courtesy of Technical Traders

I was live on TD Ameritrade TV talking about consumer discretionary, staples, and utility sectors. Explained is a unique crossover on how some discretionary stocks are also becoming a consumer staple.

Get My ETF Trade Signals, Entry, Targets, and Stop Levels – CLICK HERE ...

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Chart School

US Dollar with Ney and Gann Angles

Courtesy of Read the Ticker

Where is price going, is there strength or weakness in the chart?


Previous Post on the US Dollar : Where is the US Dollar trend headed ?


The question is always what will the future price action look like ?


This post will highlight the use of lines generated by angles. Not trend lines, as trend lines require two known points on a chart, where as angles require only one known point and a angle degree to draw a line. The question then becomes how is the angle degree determined.



There are two theories: ...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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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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