Posts Tagged ‘FAST’

Fickle Friday – Google Goes Down as Costs Inflate

Well who’d have thunk it? 

The cost of doing business is rising and GOOG happens to be one of those businesses that lacks pricing power as their rates are generally set through an auction process and their users have to VOLUNTEER to pay more money to advertise.  Most advertisers on Google are on fixed budgets, like MSM advertisers and Google has done a great job of replicating that model.  Why then, should it be surprising if a maturing Google begins to look more like a traditional media outlet than a dot com company with exploding growth?  

Don’t get me wrong, we love Google long-term but we did short them as well as BIDU into Google earnings as we felt Google would disappoint enough to spook BIDU investors as well.  We’re taking the short money and running and looking for some bullish plays now – the drop from $630 last month to $545 today is plenty of froth blown off the top for us to get long-term interested again.  As you can see from the tag cloud of the Conference Call, growth is still there, especially in mobile display ads (Android a bit disappointing) and no major negatives.  I’m not going to write a whole thing about GOOG though, there are thousands of people doing that and our Members know well enough where I stand.  I’m more interested in examining the bigger picture.  

We expected Q1 earnings to be rough and we’ve already seen FDX, NKE, ORCL, RIMM, FAST, FCS and AA struggle so hopefully you don’t have to be hit on the head with another whole week of earnings before you get a little more cautious.  Next week we hear from C, HAL, LLY, TXN, BK, GS, INTC, IBM, SYK, USB, VMW and YHOO on Monday and Tuesday and then we’re off to the races with hundreds of companies reporting each week for the rest of the month.  Our job in the first few weeks of earnings season is to get a feel for the quarter and, so far, that feeling is rough.  

It’s all about inflation, of course and don’t say we didn’t warn you about that one!  We went more  bearish up at those 100% lines we’ve been watching and now the question really is – how bad was it?  Inflation is, after all, our long-term BULLISH premise.  We don’t think corporations
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Bearish Player Targets Verigy Ltd. Put Options

Today’s tickers: VRGY, AEO, FAST & XLK

VRGY - Verigy Ltd. – A sizable put spread on the maker of chip-testing equipment suggests one option strategist is prepared for shares in Verigy Ltd. to drop ahead of April expiration. Shares in Singapore-based Verigy are currently up 0.85% to stand at $13.03 perhaps after analysts at JPMorgan upgraded the semiconductor sector to ‘constructive’ from ‘cautious.’ Verigy looked to acquire LTX-Credence Corp. back in November in an all-stock deal that valued its takeover target at $500 million including net debt, but those plans may fall through as Japanese chip-testing equipment giant, Advantest Corp., extended its own offer to acquire Verigy at a substantial premium of $15.00 a share, up from an original bid of $12.50 a share, at the end of last year. The merger of Verigy and Advantest would form the largest manufacturer of semiconductor testing equipment in the world. Perhaps the put player populating Verigy today is prepared to see shares in the name drop if the deal with Advantest ultimately falls through in the next six weeks to April expiration. The investor purchased 5,200 puts at the April $13 strike for a premium of $1.00 each, and sold the same number of puts at the lower April $11 strike at a premium of $0.25 apiece. Net premium paid to initiate the spread amounts to $0.75 per contract. Thus, the trader starts making money should Verigy’s shares decline 6.00% to breach the effective breakeven price of $12.25 ahead of April expiration day. Maximum potential profits of $1.25 per contract pad the investor’s wallet in the event that shares in VRGY plummet 15.6% from the current price of $13.03 to trade below $11.00 by expiration next month.

AEO - American Eagle Outfitters, Inc. – Call options on the casual clothing retailer are…
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Options Tactician Targets Southwestern Energy Co.

Today’s tickers: SWN, XLE, FAST, NFLX, WU, ODP & SEH

SWN – Southwestern Energy Co. – Shares of the independent energy company engaged in natural gas and crude oil exploration, development and production increased as much as 1.6% at the start of the trading session to touch an intraday high of $32.60. Options trading on the stock took on a bullish slant after one strategist populated the January 2011 contract with a couple of interesting transactions. It looks like the investor sold a strangle and purchased in-the-money call options during the second half of the trading session. The options player purchased 10,000 in-the-money calls at the January 2011 $32 strike at an average premium of $2.795. At the same time, the trader initiated a short strangle, selling 15,000 calls at the January 2011 $36 strike for premium of $1.13 each, and shedding 15,000 puts at the lower January 2011 $29 strike at a premium of $1.30 apiece. Gross premium pocketed on the strangle amounts to $2.43 per contract. It seems the trader is looking for substantial albeit limited upside movement in Southwestern shares. The long call stance, in isolation, prepares him to make money if SWN’s shares rally above the breakeven price of $34.43 by January expiration. Meanwhile, the trader keeps the full premium pocketed on the sale of the strangle if shares trade within the boundaries of the $29/$36 strike prices through expiration day next year. The short strangle may be a financing vehicle aimed at reducing the cost of getting long the in-the-money calls. In this scenario, the investor is bullish on Southwestern Energy, but does not see shares exploding to the upside in the next 5 months to expiration.

XLE – Energy Select Sector SPDR ETF – The implementation of a ratio put spread on the energy ETF suggests one options strategist may be bracing for erosion in the price of the underlying shares through January 2011 expiration. Shares of the XLE, an exchange-traded fund designed to yield investment results that correspond to the price and yield performance of the Energy Select Sector of the S&P 500 Index, are lower by 0.75% to stand at $54.44 with approximately 40 minutes remaining before the closing bell. The put player appears to have purchased 11,500 lots at the January 2011 $50 strike for premium of $1.66 each, and sold 23,000 puts at the lower January 2011 $47 strike at…
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GDWheee Friday – Could be a Wild Ride!

Attention ladies and gentlemen:

The stock market will soon be leaving the station, please secure all personal items, pull down the safety bar (our Disaster Hedges) and keep all body parts inside ride at all times.  Well you know you can follow all of the safety instructions and STILL get smacked in the face with a black swan (like our friend Fabio, pictured here) which is why we elected to get back to cash ahead of this report.  The markets were just too insane this week and who the heck knows if Europe will still be a Union on Monday or what the GDP number is going to be (but I do think it's a miss). 

Since our biggest weekend fear is financial panic in Europe, our cash US dollars will become more valuable in a crisis and if the market drops, all the better as we can ride back in and do some bargain hunting.  If the market takes off on good GDP and Greece is "fixed" and Spain is "fixed" and Portugal and Ireland are not really a problem (especially for MS and JPM) and the CRIMINAL charges against Goldman look beatable and and the Financial Reform Bill doesn't disrupt the market with a disorderly breakup of the big banks and the Bank of International Settlements Report continues to be ignored and the run on the Greek banks doesn't spread to other STUPID counties – well, then we can BUYBUYBUY because, if all this doesn't matter, then it's very likely that the entire planet Earth could explode but Wall Street will keep ticking higher.

Yep, I can't wait to ride this baby mindlessly higher!  After all, what can go wrong?  BIDU is ONLY $710 a share, BLK is $190, CMP is $76, GOLD is $84, BUCY is $65, FAST is $56, MMM is $90, FOSL $40, F $13.50, DECK $149, SHOO $55, TPX $35, LZB $14, CTB $22, NOG $16, CEO $176, FTI $75, CLB $150, CIB $46, BBD $19, TD $75, BCA $45, BAP $87, ITUB $22, EDU $94, WYNN $93, FFIV $72, CY $14, CREE $77, UPS $70, UNP $78… 

These were stocks I was looking at last week, when I told members I thought it was easier to construct a Sell List than our usual…
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Testy Tuesday – Have the Markets Become Comfortably Numb?

"There is no pain you are receding
A distant ship's smoke on the horizon.
You are only coming through in waves.
Your lips move but I can't hear what you're saying.
When I was a child
I caught a fleeting glimpse
Out of the corner of my eye.
I turned to look but it was gone
I cannot put my finger on it now
The child is grown,
The dream is gone.
but I have become comfortably numb
." – Pink Floyd
 

I have a theory that the markets (and the American people in general) aren't irrational, they are simply shell-shocked after suffering a very traumatic group financial experience… 

To be shell-shocked is to be "mentally confused, upset, or exhausted as a result of excessive stress" and the most common symptoms are: Fatigue, slower reaction times, indecision, disconnection from one's surroundings, and inability to prioritize – That certainly sounds like our Congress doesn't it?  Combat stress disorder was first diagnosed in WWI, when 10% of the troops were killed and 56% wounded – far worse than had been experienced in previous wars.  Our current financial crisis has similarly affected more people than any previous crisis with almost everyone knowing someone who is bankrupt or lost their jobs or homes and almost no one escaped the carnage of the downturn without some financial damage. 

Combat fatigue may go a long way to explaining the severe drop-off in volume that has plagued the markets since March, with participation now down to 25% of where we were last January and that leaves us open to the blatant sort of market manipulation that Karl Denninger caught last week as well as the usual nonsense we get daily from HFT programs that drive the market with such precision that we are able to tell how the day is going to go by simply checking our hourly volume targets.  Here's a clip from CNBC where a floor trader discusses market manipulation as a fact of trading (2 mins in).  

As Nicholas Santiago points out on In The Money Stocks,   "January is usually a very high volume month, yet it has started off the New Year even lighter than the last two months of 2009.  Light volume markets are very difficult to
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Phil's Favorites

Partisan divide creates different Americas, separate lives

 

Partisan divide creates different Americas, separate lives

Even in the physical world, it’s hard to cross partisan lines. igorstevanovic/Shutterstock.com

Courtesy of Robert B. Talisse, Vanderbilt University

When people try to explain why the United States is so politically polarized now, they frequently refer to the concept of &ldq...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Zero Hedge

Blain: "It's A Bad Week For The Credibility Of Mohammed bin Salman"

Courtesy of ZeroHedge View original post here.

Blain's Morning Porrdige, submitted by Bill Blain of Shard Capital

Saudi….

Its turning into a bad week for the credibility of Mohammed bin Salman, the defacto ruler of Saudi.  After the Globe’s third largest defence spending state was crippled by supposedly unsophisticated Houthi rebels (with some likely assistance from Iran) when they struck his oil infrastructure, this morning the headlines are all about how MBS is now arm-twisting rich Saudi’s to buy into the discredited Aramco IPO. 

In...



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The Technical Traders

Precious Metals Setting Up Another Momentum Base/Bottom

Courtesy of Technical Traders

Just as we predicted, precious metals are setting up another extended momentum base/bottom that appears to be aligning
with our prediction of an early October 2019 new upside price leg.

Recent news of the US Fed decreasing the Fed Funds Rate by 25bp as well as strength in the US stock market and US Dollar as eased fears and concerns across the global markets.  These concerns and fears are still very real as the overnight credit market has continue to illustrate.  Yet, the precious metals have retraced from recent highs and begun to form a momentum base which will likely become the
floor for the next move higher.

The one aspect that many traders ...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Credit Suisse raised IHS Markit Ltd (NYSE: INFO) price target from $68 to $76. IHS Markit shares closed at $67.75 on Thursday.
  • Wedbush boosted Restoration Hardware Holdings, Inc (NYSE: RH) price target from $170 to $185. RH shares closed at $169.49 on Thursday.
  • Mizuho lifted Seagate Technology PLC (NASDAQ: STX) price target from $46 to $50. Seagate shares closed at $52.94 on Thursday.
  • UBS raised the price target for Weight Watchers Intern...


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Lee's Free Thinking

Federal Reserve Bank of New York Statement On Repurchase Operation - Roll Over Beethoven!

Courtesy of Lee Adler

This is a syndicated repost courtesy of NY | Press Releases. Original: Statement Regarding Repurchase Operation. Reposted with permission. 

September 19, 2019

In accordance with the FOMC Directive issued September 18, 2019, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York will conduct an overnight repurchase agreement (repo) operation from 8:15 AM ET to 8:30 AM ET tomorrow, Friday, September 20, 2019, in order to help maintain the federal funds rate within the target range of 1-3/4 to 2 percent.

This repo operation will be conducted w...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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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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