Posts Tagged ‘Earnings season’

Thrilling Thursday – Our Apple Trade of the Year Pays Off Early!

Go Apple!!! 

AAPL was our 2014 trade of the year, so we are thrilled with their Q1 earnings and expecting to see $600 on this run (I sent an Alert to our Members early this morning and you can see it on Twitter as well) detailing our strategy as well as discussing PSW's Rule #1 and it's practical implications.  In our first Webcast of the year, we picked AAPL as our top trade idea and again, on TV on March 6th, I was almost embarrassed to say AAPL was once again our trade of the year for BNN (it was last year's trade too).  

NDX WEEKLYThe fact was, there simply wasn't a more obvious way to make money tnan buying AAPL at just over $500.  When AAPL dipped to $480 in February, we PRESSED our long bets from January, rather than abandon them.  As I was saying, our 2013 trade of the year was also AAPL and I hate to seem like I don't have any other ideas but that options spread netted 550%, turning $2,800 into $15,400 in 2013 (the spread matured this year at 614% but we killed it early).  

Rolling that $15,400 into this year's trade has another 525% of upside potential (at AAPL $650), which would return $80,850 if AAPL is at $650 or better in Jan 2016.  So, starting with $2,400 in Jan 2013, we can parlay our bet to $78,450 in profits (3,268%) in just 36 months – not bad!

This stuff isn't hard folks, that was starting with just two contracts in 2013 and following our trade of the year.  In 2012, our trade of the year was BAC – which turned out to be the best-performing stock in the S&P that year.  In fact, on Jan 5th of 2012, I laid out my case for putting 100% of your portfolio into BAC and simply leaving it there for the year.  I was even crazy enough to go on TV on the 17th and say the same thing!   Lucky it worked out, really…

Of course, we don't only make picks once a year.  Just yesterday morning, in Member chat, Wobat said: "Did i miss the debrief on AAPL?
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Bespoke’s Earnings Season Map

Courtesy of Joshua M Brown, The Reformed Broker 

This map from the Notorious B.I.G. should give you a pretty good idea of the shape of earnings season, we’re about two weeks away from the heart of it…

Source:

Earnings Reports By Day this Season (Bespoke Investment Group) 


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20 Examples Of Corporate Doublespeak You Need To Know During Earnings Season

20 Examples Of Corporate Doublespeak You Need To Know During Earnings Season

citizen caneCourtesy of Vincent Fernando, CFA and Gus Lubin at Business Insider

We’re all pretty used to business-speak these days, whereby real meanings are coded into vague euphemisms in order to sound better.

It’s all part of business spin.

Forecasts aren’t reduced, they’re adjusted.

Workers aren’t laid off, they’re right-sized.

Here’s a list of twenty business euphemisms and what they really mean, as found in financial statements, conference calls, and in the board room.

According to the firm that compiled them, Audit Integrity, the more you hear, the more likely a company is a governance risk. As we run through earnings season, you’ll likely see each of them at least once.

See what CEOs really mean >

 


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Earnings Season Kicks Off with a Public Execution

Earnings Season Kicks Off with a Public Execution

Courtesy of Joshua M Brown, The Reformed Broker 

For the seventh straight quarter, stocks raced higher into earnings season, which for 3rd quarter, officially kicks off tomorrow with the Alcoa ($AA) report.  Today’s action in the cloud computing names does not bode well for companies with shortfalls to announce.

Equinix ($EQIX), a cloud hosting data center company, missed revenue by 2.2% and is currently getting schmeissed to the tune of 30% on the day!

Had the company beaten by 2.2%, I doubt we’d be looking at a 30% rally.  The term for this type of action is Asymmetrical Risk.  Even a stop loss can’t protect you when a stock gaps down 28 points before the market even opens.  You’re getting executed wherever, Pancho.

EQIX was one of the momentum leaders in the cloud group, along with Citrix ($CTXS), Rackspace ($RAX) and VMWare ($VMW).  Going into their earnings report last night, the stock was trading at 90 times trailing earnings and 41 times next year’s.  The tightrope act you’re faced with at that kind of multiple is such that the company cannot even afford to hiccup.

With 88% of stocks trading above their 50 day moving average, I would say it’s highly likely that we’ll be witnessing other public executions this fall.

Read Also:

The Ghosts of Earnings Past (TRB)


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YOU GOTTA KNOW WHEN TO FOLD ‘EM….

YOU GOTTA KNOW WHEN TO FOLD ‘EM….

WSOP No-Limit Texas Hold 'em World Championship

Courtesy of The Pragmatic Capitalist

I still maintain that the rest of earnings season will be broadly positive, however, two negative trends have developed over the course of the last few days that have changed my market outlook from bullish to neutral.

The first change in trend has been the recent spat of “selling the news”.  After the 6% run-up since the beginning of earnings season we are now seeing investors sell into strength.  This is a clear sign that the buying power is waning.  In essence, the owners of equities now have more incentive to sell than new buyers have to buy mainly because earnings were largely priced in over the course of the last few weeks. A new positive catalyst will need to develop from here for stocks to make a substantial move higher.

The second negative trend is the move in the dollar.  Today’s nearly 1% decline in the dollar index is staggering.  The negative trajectory of this move is simply unsustainable.  I also believe the $1.50 mark in the Euro is one that will not be tolerated for long.   Compounded by the move in the dollar is the surge in oil prices.  It’s only a matter of time before analysts become increasingly concerned about the impact of high oil prices on consumers. Any move higher in the dollar (for whatever reason – short covering, politics, etc) will weigh on the market.

For these reasons I think it is prudent to take a step back from the poker table and take a break.  Although I am not shifting to a short position I do view this market as one that is characterized by abnormally high risks.  The strength could very well continue through the next 3 weeks of earnings season, but after the 6% surge over the last 4 weeks I think it is prudent to take profits here.

Sometimes when you’re sitting on a strong hand you need to realize that the risks outweigh the rewards and that perhaps your hand isn’t quite as strong as you think….

****

Kenny Rogers – The Gambler

 


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EARNINGS UPDATE – WHAT TO EXPECT FOR Q2 AND BEYOND

EARNINGS UPDATE – WHAT TO EXPECT FOR Q2 AND BEYOND

momentum, earningsCourtesy of The Pragmatic Capitalist

Earnings season is about the pick-up momentum and will certainly dominate the market direction over the coming 6 weeks.  Preliminary results have been much better than expected.  Analysts have backloaded their 2009 earnings estimates due to their expectations for a second half recovery.  This puts us at an odd juncture in the market.  The current quarter’s estimates appear to be relatively low, but the second half estimates appear a bit optimistic.  Analysts currently expect a 14% decline in EPS versus Q2 of 2008.   Third quarter is expected to decline 22% and full year results are expected to be down 14%.   Full year expectations are for $59 in EPS while 2010 estimates are calling for $75.  Both appear a bit optimistic.  Thus far, there have been 6 positive surprises for every negative in Q2 earnings.  Although there haven’t been many reports this quarter this likely bodes well for more of what we saw last quarter when the overwhelming majority of companies beat expectations.

My proprietary expectation ratio continues to show near-term deterioration.  The data of late has been relatively light, but the change in trend is a certain sign that analysts are getting more aggressive with their earnings expectations.  It’s important to note that the ER is an intuitive forward looking indicator.

er

So, what do I expect to see in Q2?  Expect a huge amount of bottom line beats and in-line or worse than expected revenue figures.  The economy is still incredibly weak so the top line growth has been about in-line with analyst’s expectations, however, companies are cutting costs much more efficiently than expected.  This has created a huge divergence between the analysts revenue estimates and their top-line estimates. Our recent analysis of ths situation highlighted this phenomenon:

Cost cuts are no recipe for organic growth.  That can only be achieved through top line growth.  The implications here are that we are likely to see another quarter of “better than expected” bottom line earnings as analysts have adjusted their EPS estimates very little over the prior quarter.  This could further juice the stock market.  The more important factor to keep in mind, however, is that this is no recipe for long-term growth.  We will need to see a sharp expansion in the economy before revenue


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Phil's Favorites

Saudi Arabia is allying with Russia to shore up oil prices as OPEC's power wanes

 

Saudi Arabia is allying with Russia to shore up oil prices as OPEC's power wanes

Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih. AP Photo/Ronald Zak

Courtesy of Gregory Brew, Southern Methodist University

The Organization of the Petroleum Exporting Countries likes to look united.

That’s evident when OPEC leaders meet in Vienna at the end of each year to decide how much oil its members will aim t...



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Zero Hedge

Markets Are "On The Cusp" Again

Courtesy of ZeroHedge. View original post here.

Authored by Sven Henrich via NorthmanTrader.com,

For the third month in a row markets are on the cusp of breaking their bull market trends. And once again they need a magic rescue into month end to avoid such a break.

What if you have a license to rally and stocks sell anyways? Not a g...



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Kimble Charting Solutions

Small caps could fall 20% from here, says Joe Friday

Courtesy of Chris Kimble.

This chart looks at the Russell 2000 over the past 30-years, where it has spent the majority of that time, inside of rising channel (A).

This chart reflects that the long-term trend in small caps remains higher. Weakness this year has it testing rising support tied to the 2009 lows at (1).

Joe Friday Just The Facts Ma’am- If the Russell breaks below support at (1), it could work its way over time to channel support at (2), which is currently around 20% below current prices.

Very important support test in play ...



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Digital Currencies

Cryptogeddon Continues - Bitcoin Plunges To 2018 Lows Amid 'Cash' Chaos

Courtesy of ZeroHedge. View original post here.

Crypto markets have accelerated their losses again overnight with Bitcoin crashing to new 2018 lows, Ethereum back into double-digits, and Bitcoin Cash utterly devastated as lawsuits fly.

Once again a sea of red across the crypto space...

Source

Bitcoin Cash is down 40% this week alone...

...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga.

  • Data on nonfarm payrolls and unemployment rate for November will be released at 8:30 a.m. ET.
  • The University of Michigan's consumer sentiment index for December is schedule for release at 10:00 a.m. ET.
  • Data on wholesale inventories for October will be released at 10:00 a.m. ET.
  • The Energy Information Administration’s weekly report on natural gas stocks in underground storage is schedule for release at 10:30 a.m. ET.
  • Federal Reserve Member of the Board of Governors Lael Brainard is set to speak in Washington D.C. at 12:15 p.m. ET.
  • The Baker Hughes North American rig count report for the recent week will be released at 1:00 p.m. ET.
  • Data on consumer credit for October will be released at 3:00 p.m. ET.
  • ...


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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Chart School

Golds Xmas Gift

Courtesy of Read the Ticker.

Three things have tweaked the fundamentals for gold.

1) Bitcoin is not attracting the hot cash, unlike 2016.

2) Fed's Powell dovish switch, now less expectations for interest rate hikes in 2019.

3) China to import more goods from the USA, hence more US Dollars required.

The question now is will this move gold back to resistance before year end? 

Gann angles look good, cycle looks attractive, now we wait for volume and a price to break into new ground. Profits could be golden for Xmas.

Gann Angles



 

Cycle picture
...



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Biotech

World's first gene-edited babies? Premature, dangerous and irresponsible

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

World's first gene-edited babies? Premature, dangerous and irresponsible

Vchal/Shutterstock

By Joyce Harper, UCL

A scientist in China claims to have produced the world’s first genome-edited babies by altering their DNA to increase their resistance to HIV. Aside from the lack of verifiable evidence for this non peer-revie...



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Members' Corner

Cheri Jacobus on Politics with PSW

 

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shared her thoughts about the current political environment with us in our August interview, and now we’re following up. 

Ilene: Is there a take-home message from election results of 2018?

Cheri: Yes. No political party can survive when it appeals to only one demographic. The GOP has ignored all of the lessons of recent elections that showed they needed to appeal to African-Americans, Latinos, and women. 

Ilene: Do you feel the Democrats ...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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