Posts Tagged ‘BRK.B’

What Me Worry Thursday?

What a freakin’ recovery!

As I said on Monday: "It’s a paper tiger of a straw man we’re building for $1Tn but you HAVE to respect $1,000,000,000,000 – you just have to…  Our 5% Rule series for the S&P over the 1,155 breakdown line is the very critical 1,170, followed by 1,185, 1,200 (critical), 1,215 and 1,230 and THEN we are on the way to recovery."  Wow, that guy is AMAZING!  Anyway, so here we are at 1,170, after two days of testing the 1,155 line as a bottom so now it’s onwards and upwards to 1,185 hopefully.  I also said on Monday: "Below that, we’re not too impressed but it also won’t be very surprising if all $1Tn buys us these days is some moderate lift that isn’t strong enough to break our major technicals."

We have been casting a wide and bullish net since the crash, finally pulling some of our sideline cash for long plays on ABX, APPY, BAC, BIDU, BRK/B, BSX, C, CAT, DIA (3), DF, ERX, GOOG, LIZ, LVS, MEE, MON (3), RIG, T (2), TBT (2), TZA (shorting it), UNG and WFR.  We’re hedging heavily, of course, but it feels good to have longs again after being in cash for a while.   Our short-term bearish plays (mostly DIA and TZA) have been crushing us so far, which is good in a rally but yesterday was a bit much for us and we got a little more bearish but it looks like the G7 has adopted the "Better Red Than Dead" mantra as the World racks up astounding deficits to put off admitting that this little debt problem is not isolated to the PIIGS nations. 

Nonetheless, the global markets are rallying in unison – even while the Pound ($1.47) and the Euro ($1.26) collapse and even the Yen jumped back up last night, falling off the very BS 93.63 to the dollar it hit at 3am to psych up the Nikkei exporters back down to 92.75 this morning.  I noted weeks ago how the Yen knocked down for Japan’s open and then drifts lower into the US open virtually every night – it’s what currency traders call the "Goldman Trade" because you can bet it every single day and have a perfect quarter.  Sure it’s blatant manipulation designed to fool an entire nation of investors but, what else is new – Fuggedaboutit

So, a TRILLION Dollars down the rabbit hole in Europe – Fuggedaboutit!  I pointed out to Members in yesterday’s
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Natural Gas Options Trader Enacts Bullish Risk Reversal

Today’s tickers: UNG, IP, EEM, CAH, TRA, UAUA, USO, WFMI, BRK.B & ANF

UNG – United States Natural Gas ETF – Shares of the natural gas exchange-traded fund, which mirrors the price and performance of natural gas, are down 1.85% to $9.67 with just under one hour remaining in the trading session. Options traders initiated bullish plays in the March contract despite the dip lower in the price of the underlying shares. It looks like one investor initiated a bullish risk reversal to position for a rebound in the price per UNG share by March expiration. The trader sold 8,250 in-the-money puts at the March $10 strike for a premium of $0.64 each in order to offset the cost of buying 8,250 calls at the same strike for $0.40 apiece. The trader pockets a net credit of $0.24 per contract on the reversal, which he keeps if shares of the fund trade above $10.00 by expiration day. Additional profits are available to the upside if and when the price per share exceeds $10.00 apiece.

IP – International Paper Co. – Global paper and packaging firm, International Paper Company, enticed bullish options traders to initiate optimistic positions in the March contract as shares of the underlying stock jumped 6% in late afternoon trading to $23.92. Plain-vanilla call buying took place at the March $25 strike where upwards of 10,000 contracts were purchased for an average premium of $0.45 apiece. Call buyers stand ready to accrue profits should IP’s shares rally another 6.40% over the current value of the stock to surpass the effective breakeven point on the calls at $25.45 by March expiration.

EEM – iShares MSCI Emerging Markets Index ETF – Shares of the emerging markets exchange-traded fund, which generally corresponds to the price of the MSCI Emerging Markets index that was created by MSCI as a benchmark for international stock performance, rallied 2.30% to $39.32 this afternoon. June contract options activity on the EEM suggests shares may stagnate near the current price through expiration in four months. It looks like options traders sold straddles in order to pocket premium on the sale of both calls and puts. Investors sold approximately 9,100 calls at the June $39 strike for an average premium of $2.95 apiece and sold 9,100 puts at the same strike for a premium of $2.65 each. Gross premium enjoyed by straddle-sellers amounts to $5.60 per contract. Investors…
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Wintery Wednesday – Are We Now Corrected?

Was that it?

A 10% correction (David Fry chart on right) and we’re done?  If so, this is still a fairly bullish market, and it should be, as our sell-off last year was, beyond a doubt, way overdone.  Often people forget the fundamentals of investing and the biggest fundamental of them all is: "Where else are you going to put your money?"  There many fine companies out there with P/E ratios that are below 15.  That means if you give them a dollar, they will return 6.6% in earnings.  IBM has a PE of 12, which is an 8.3% return on my money and, according to projections, that will improve to 11 next year, generating 9 cents for each dollar I give them

Call me an optimist but I think IBM is a fairly safe place to keep my money.  Perhaps as safe as 4% TBills, or 7% Greek bonds or 3% Yen Notes or, Heaven forbid, a bank!  In fact, not many banks are paying 1.8% on your deposits but IBM does through dividends.  IBM was my example trade in the Weeekend Wrap-Up so I won’t get into strategies here but that is what our whole Buy List is about – picking up great long-term values and hedging them to even more effective entries.  

Not every stock is as rock solid as IBM but (going back to the Wrap-Up) who did we buy when the chips were down last week?  C, CCJ, TBT, GOOG, XLF, AAPL, AMED, CSCO, TM, LOW, AKAM, LLY, NLY, GE, TNA, USO, ABX, DELL, FXI, UYG, BRK/B.  Not exactly a radical collection of picks is it?  Yesterday, with the market up 2.5% from our shopping spree – we bought NOTHING.  Part of the "buy low – sell high" philosophy is waiting for the market to be either high or low.  Two weeks ago, on Jan 29th, I charted 10,058 on the Dow as a critical support line and, from our Buy List Update this weekend, I put up the following chart for Members:

And where did we finish yesterday on the Dow?  10,058.  See, this charting thing is easy – that’s why I don’t usually bother, it’s dullsville!  Let’s now turn our attention to our other major levels of 10,165 and 10,300 which, keep in mind, is nothing more than our predicted "weak bounce" off the drop from 10,700.  As I said in the above chart, we can expect
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Long-term Put Play on Intel Provides Protection through 2011

Today’s tickers: INTC, FXI, UFS, TM, BRK.B, X, QCOM, MCO, APC, COST, HNZ & DLTR

INTC – Intel Corp. – Shares of chip-making giant, Intel Corp., dipped lower in early trading, but rebounded this afternoon to stand 0.75% higher on the day at $20.15. Long-term protective positioning in the January 2011 contract on the stock suggests cautious optimism by Intel-option traders. One investor purchased a put spread by picking up 5,000 in-the-money puts at the January 2011 $22.5 strike for a premium of $4.05 each, marked against the sale of 5,000 puts at the lower January 2011 $12.5 strike for $0.35 apiece. The net cost of the transaction amounts to $3.70 per contract. The trader responsible for the spread is likely long shares of the underlying stock. The spread, in this scenario, serves as an insurance policy on the value of the underlying position should Intel’s shares slip beneath the effective breakeven price of $18.80 in the next year to expiration. The investor is protected even if shares of the semiconductor chip producer collapse down to $12.50 by January of 2011.

FXI – iShares FTSE/Xinhua China 25 Index Fund – Shares of the exchange-traded fund, which invests in twenty-five of the largest and most liquid Chinese companies, are down 0.75% to $38.27 with just under one hour remaining in the trading session. FXI’s share price has declined nearly 15% in the past few weeks, from a 2010 high of $44.53 on January 6, 2010, down to an intraday low today of $37.89. One option trader’s actions in the March contract today suggest he has had enough of the downturn, and is looking for a sharp rebound by expiration in two months. The investor initiated a three-legged combination play using both calls and puts on the fund. It appears the main portion of the trade is a ratio-bullish risk reversal involving the sale of 5,000 deep in-the-money put options at the March $41 strike for a premium of $3.66 each, spread against the purchase of 10,000 calls at the same strike for $0.70 apiece. The purchase of 10,000 puts at the March $35 strike for $0.85 each rounded out the third leg of the transaction. The investor pockets a net credit of $0.56 per contract on the trade, which he keeps if shares rally up to $41.00 by expiration. Additional profits accrue to the upside if shares bounce 7.15% higher to…
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Capital One Bears Out in Full Force in Options Land

Today’s tickers: COF, CAT, XRT, XLY, XLB, XLF, KRE, BRK.B, MCD & ISRG

COF – Capital One Financial Corp. – Better-than-expected fourth-quarter earnings of $0.83 per share, which blew straight past average analyst estimates of $0.45 a share, failed to shield the stock from the massive beating received during the trading session. Shares plummeted 11% to an intraday low of $38.18 after analysts at FBR Capital Markets slashed their forecast for COF’s earnings. FBR analysts cited “shrinking margins and new U.S. credit-card regulations” as reasons for the reducing earnings estimates according to one Bloomberg article released this morning. Bearish option traders are out in full force, populating both the call and put sides of the stock with pessimistic transactions. Investors purchased put options as low as the February $35 strike where 1,200 contracts were picked up for an average premium of $0.57 apiece. Traders long the puts are perhaps bracing for an additional 9.80% shift down in the price of the underlying to the breakeven point on the puts at $34.43 by expiration next month. Approximately 2,000 nearly in-the-money puts were purchased at the higher February $38 strike price at an average premium of $1.46 apiece. Call selling added to the bearish picture as some 2,100 contracts were shed at the out-of-the-money February $40 strike for a premium of $1.43 per contract. Finally, one trader initiated a pessimistic stance in the January 2012 contract. Perhaps this investor believes today’s turmoil is just the beginning of Capital One’s troubles, or, alternatively, the trader may simply be looking to keep the dollar credit on the following transaction. The trader purchased 1,500 puts at the January 2012 $30 strike for a premium of $4.36 each, spread against the sale of 3,000 puts at the lower January 2012 $25 strike for which he received $2.68 apiece. The investor pockets a net credit of $1.00 per contract on the spread, which he keeps if shares settle above $30.00 by expiration.

CAT – Caterpillar, Inc. – Surprisingly bullish trades befell machinery maker Caterpillar today. CAT’s shares commenced the trading day with higher shares, but slipped lower during the session, and currently reside 1.35% lower on the day at $56.09. Investors expecting shares to recover by expiration in March shed 5,000 in-the-money put options at the March $57.5 strike for an average premium of $3.76 apiece. Open interest at that strike of 5,169 lots suggests this transaction…
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Testy Tuesday – Dow 9,650, Berkshire $60 Edition!

Wheee, this is fun!

Just two weeks ago, on October 17th, I warned in the Weekly Wrap-Up that it was "Dow 10,000 or Bust" for the next week and we failed that one and last Wednesday we were looking to hold NYSE 6,900 and THAT failed too.  Now we enter into the second phase of our limbo game where the deep-voiced guy asks the question "how low can you go?" and we’ll be setting our next bar at our long-standing 9,650 target for the Dow,  which we are already hitting in pre-market trading.  If that fails, we’ll have to look down to S&P 1,000.  As you can see from Jesse’s Chart, we took a nice bounce off serious resistance yesterday but we’re just not feeling it yet, even though the market is now as technically oversold as it was in March

Yesterday was like a roller coaster and my first Alert to Members of the morning targeted 9,775 as the on/off line for our bullish/bearish posture on our DIA covers.  We whipped past that line right about 10 am as we got good reports from ISM, Pending Home Sales and Construction Spending but by 12:45 we had broken back down so I sent out an Alert calling to refocus back to 55% bearish by adding the DIA Jan $100 ($5) and Jan $102 puts ($6.20), already covered by the Nov $99 puts ($2.50). 

The reason we mess around with our covers is we don’t want to flip in and out of our option positions, which are generally either straight bearish or well-hedged long positions, is because options carry a relatively large bid/ask spread and cost you money every time you get in and out.  So, on the whole, we’d rather let our over-riding cover plays, like our DIA spread, adjust our stance as conditions change, making a single adjustment that keeps us balanced as we ride out the market waves. 

It’s been a couple of weeks since we had a good, old-fashioned stick save but we got a mother of one yesterday (as seen in Dave Fry’s chart) which was right on schedule as Kustomz bought it up in Member Chat at 3:09 and I agreed at 3:19 that "It does feel like a pre-stick move" and we grabbed VIX $25 puts at .85 to protect ourselves from a sudden surge in complacency.

By 3:33, my next comment to Members was: "The stick lives!" but…
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Phil's Favorites

Does 'deplatforming' work to curb hate speech and calls for violence? 3 experts in online communications weigh in

 

Does 'deplatforming' work to curb hate speech and calls for violence? 3 experts in online communications weigh in

Twitter’s suspension of Donald Trump’s account took away his preferred means of communicating with millions of his followers. AP Photo/Tali Arbel

Courtesy of Jeremy Blackburn, Binghamton University, State University of New York; ...



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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Politics

Trump supporters seeking more violence could target state capitols during inauguration - here's how cities can prepare

 

Trump supporters seeking more violence could target state capitols during inauguration – here's how cities can prepare

The FBI says armed protests are planned at all 50 state capitols ahead of President-elect Joe Biden’s inauguration. Paul Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Jennifer Earl, University of Arizona

Americans witnessed an alarming and deadly failure in planning and policing at ...



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Zero Hedge

Millions Of Workers Are Still Calling Out Sick Or Taking Leaves Of Absence Due To COVID

Courtesy of ZeroHedge

One of the biggest hits to supply chains across the country hasn't just been business shut downs, but rather the residual effect of employees calling out sick.

In addition to calling out sick when employees have Covid-19 or similar symptoms, some employees have been calling out because they are still simply too fearful of returning to work. 

This was the case at Smithfield Foods, Bloomberg notes, where 50 of the company's 2,300 employees have still not returned to work. One worker told Businessweek: “We work so close together. It’s like pulling teet...



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ValueWalk

US Consumer Confidence Increases At Start Of 2021

By Refinitiv. Originally published at ValueWalk.

WASHINGTON, DC ‐ According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, American consumer confidence for January 2021 is at 50.9, up 2.8 points from last month. The index fielded from December 25, 2020, to January 8, 2021.

Q3 2020 hedge fund letters, conferences and more

American Consumer Confidence Is Back Up In 2021

After a sharp 4‐point decline in December, American consumer confidence has returned to levels seen in September 2020 (50.6). The Current, Expectations, Investment, and Jobs sub‐indices all experienced ...



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Kimble Charting Solutions

Treasury Bond Yields At Make-Or-Break Decision Point Says Joe Friday

Courtesy of Chris Kimble

Treasury bond yields (and interest rates) have been falling for so long now that investors have taken it for granted.

But bond yields have been rising for the past several months and perhaps investors should pay attention, especially as we grapple with questions about inflation and the broader economy (and prospects for recovery).

Today we ask Joe Friday to deliver us the facts! Below is a long-term “monthly” chart of the 30 Year US Treasury Bond Yield.

Counter-Trend Rally In Yields Facing Strong Resistance!

As you can see, treasury bond yields have spent much of the past 25 years trading in a falling channel… but the coronavirus crash sent yields...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Chart School

Best Wyckoff Accumulation for 2020

Courtesy of Read the Ticker

Yes folks there has to be a winner. Price and volume in the right place. Very nice eye candy!


Introduction ...

Ethereum was posted on RTT Wyckoff Campaign blog for monitory and trade entry. To watch the RTT Wyckoff Campaign blog is part of the RTT Plus service. After all you only need one to two great accumulations in a year and returns will be fantastic.






Charts in the video ...


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PnF ...

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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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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...



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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...



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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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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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