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

Ruth Bader Ginsburg helped shape the modern era of women's rights - even before she went on the Supreme Court

Supreme Court Justice RBG passed away from complications of metastatic pancreatic cancer yesterday. RIP, the Notorious RBG.

Ruth Bader Ginsburg helped shape the modern era of women's rights – even before she went on the Supreme Court

Judge Ruth Bader Ginsburg paying a courtesy call on Sen. Daniel Patrick Moynihan, D-N.Y., left, and Sen. Joseph Biden, D-Del., in June 1993, before her confirmation hearing for the Supreme Court. AP/Marcy Nighswander

Courtesy of Jonathan Entin, Case Western Reserve University

Justice Ruth Bader Ginsburg died on Friday, the Supreme Court announced.

Chief Justice John Roberts ...



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Politics

Ruth Bader Ginsburg helped shape the modern era of women's rights - even before she went on the Supreme Court

Supreme Court Justice RBG passed away from complications of metastatic pancreatic cancer yesterday. RIP, the Notorious RBG.

Ruth Bader Ginsburg helped shape the modern era of women's rights – even before she went on the Supreme Court

Judge Ruth Bader Ginsburg paying a courtesy call on Sen. Daniel Patrick Moynihan, D-N.Y., left, and Sen. Joseph Biden, D-Del., in June 1993, before her confirmation hearing for the Supreme Court. AP/Marcy Nighswander

Courtesy of Jonathan Entin, Case Western Reserve University

Justice Ruth Bader Ginsburg died on Friday, the Supreme Court announced.

Chief Justice John Roberts ...



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Chart School

Stocks are not done yet - Update

Courtesy of Read the Ticker

There are a few times in history when a third party said this US paper (stocks, funds or bonds) is worthless.

Here is two.

1) 1965 Nixon Shock - The French said to US we do not want your paper dollars please pay us in gold. This of course led to the US going off the gold standard.

2) 2007 Bear Stern Fund Collapse - Investors said their funds collateral was worth much less than stated. This of course was the beginning of the great america housing bust of 2008.


In both cases it was stated .."look the Emperor is naked!"... (The Empe...

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Zero Hedge

The Ultra Wealthy Are Selling Billions Of Dollars In Stock

Courtesy of ZeroHedge View original post here.

As the market has "rebounded" off its lows back in March, the world's super wealthy are jumping at the chance to offload billions of dollars in stock while global central banks - and most notably the Federal Reserve - keeps a bid under the market and acts as a Mr. Magoo-like counterparty.

Many investors have been prompted to sell by market volatility over the last two weeks, which appears as though it could be signaling an end to the V-shaped recovery. This has likely helped spook the ultra wealthy into take some cash off the table. 

Seo Sang-young, an analy...



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ValueWalk

Markets Crash Two Days In A Row: The American Dream Is Dead

By Eloise Williams. Originally published at ValueWalk.

The American dream is dead, she thinks to herself. After all her hard work. All the blood, sweat and tears. Long nights in the office away from her family.  Diligently saving up every penny so they could have that white picket fence. A big screen television. And even an iPhone 11 Pro.

Q2 2020 hedge fund letters, conferences and more

The American Dream Is Officially Dead

Emma slowly sips her bourbon while sitting on her porch. Deep wrinkles caused by stress are embedded into her once smooth face. A chunk of her blonde hair falls to the ground.&#x...



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Kimble Charting Solutions

Gold Breakout Triggers Buy Signal, Is $3000 Next Target?

Courtesy of Chris Kimble

90-days ago this cup & handle pattern was discussed on See It Market when Gold was trading at 1717.

Fast-forward to today and Gold is up 15 percent. So it’s time for an update!

As we pointed out 90-days ago, the initial price magnet for the rally was the 261.8 Fibonacci extension that marked the 2011 high at (1).

That high has served as price resistance for nearly 9 years! …But it may be ...



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Biotech/COVID-19

Smoke from wildfires can worsen COVID-19 risk, putting firefighters in even more danger

 

Smoke from wildfires can worsen COVID-19 risk, putting firefighters in even more danger

Firefighters have battled camp crud before, but COVID-19 brings new risks with the potential for heart and lung damage. Robyn Beck/AFP/Getty Images

By Luke Montrose, Boise State University

Two forces of nature are colliding in the western United States, and wildland firefighters are caught in the middle.

Emerging research suggests that ...



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Digital Currencies

Cryptocurrencies Rarely Used To Launder Money, Fiat Preferred

Courtesy of ZeroHedge View original post here.

Authored by Shaurya Malwa via Decrypt.io,

Traditional channels continue to dominate the estimated $2 trillion global money laundering racket instead of cryptocurrencies, a report says.

In brief
  • Money laundering via cryptocurrencies is not a preferred tool for criminals, a report said...



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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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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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