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

AI slaves: the questionable desire shaping our idea of technological progress

 

AI slaves: the questionable desire shaping our idea of technological progress

Charles Taylor/Shutterstock.com

Courtesy of Beth Singler, University of Cambridge

From high impact Hollywood dystopic accounts such as the infamous Terminator films to public responses to the story of a burger flipping robot being “fired”, the stories we tell ourselves about AI are important. These narratives have an impact on our conception and development of the technology, as well as expressing elements of our unconscious understanding of AI. Recognising the shaping effect of stories – whether fic...



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Zero Hedge

JCPenney Crashes After CEO Unexpectedly Quits To Join Lowe's

Courtesy of ZeroHedge. View original post here.

In the great race between JCPenney and Sears of which retailer will be the world's slowest melting icecube, and who will file Chapter 11 (or 7) first, today the former took a decisive lead when JC Penney’s CEO Marvin Ellison unexpectedly announced he is leaving the near-insolvent department store operator to join home improvement retailer Lowe’s.

The shocking announcement came less than 3 years after Ellison took the top job at JC Penney, following an activist attempt by Bill Ackman to "fix" JCPenney ended in disaster.

The ...



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Chart School

Narrow Trading Ranges Set Up New Breakout Opportunities

Courtesy of Declan.

The past few days have seen markets shape narrow mini-trading ranges, each following breakouts from larger consolidations. Large Caps show this best

The S&P cleared a dual 4-month and 6-week consolidation before shaping the past 8-day 'flag'. Look for a break of 2,740 and a push to challenge the next swing high at 2,800 - although a test of this should be enough to go on and challenge all-time highs.


The Dow Jones Index could be considered to have broken from its mini-consolidation. Volume was...

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Biotech

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

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

 

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

Courtesy of John Bergeron, McGill University

In 2013, Kyoto University’s Shinya Yamanaka was awarded one of the first Breakthrough Prizes in Life Sciences for his discovery of “induced” stem cells that enabled researchers to convert adult cells back into stem cells.

The Breakthrough Prize is not to be sneezed at. Founded in 2013, the prize “honours transformative advances toward understanding living systems and extending human life.” It’s also the most financially attractive aw...



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Insider Scoop

8 Stocks Moving In Monday's After-Hours Session

Courtesy of Benzinga.

Related PTX Benzinga's Daily Biotech Pulse: FDA Panel Nod For Akcea, Synergy's Revenue Miss, FDA Warns E-Liquid Makers Again 18 Stocks Moving In Friday's Pre-Market Session Related 36 Biggest Movers From Friday ...

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Digital Currencies

5 Factors That Drive Bitcoin's Ups & Downs

Courtesy of ZeroHedge. View original post here.

By Kayla Matthews via Hackernoon.com

The price of Bitcoin has been wildly volatile. From November to December 2017, it increased by 223 percent. It fell by 59 percent between January and February 2018, increased by 64 percent from February to March and then dropped again during March by 40 percent.

While this isn&r...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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About Ilene:

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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