Posts Tagged ‘Futures Trading’

WTF Friday – Japan’s 80 TRILLION Yen Stimulus Dresses the Windows

She knows how hard her heart grows under the nuclear shadows

She can't just escape the feeling repeating in her head

When after all the urges some kind of truth emerges

We felt the deadly surges discovering Japan – Graham Parker 

Happy Halloween!

The shorts are certainly getting a scare this morning as the BOJ hands out another $124Bn (yes, we did the relative math in this morning's Alert to our Members) and that was more than enough to pop the Nikkei 5% in 90 minutes, with the /NKD Futures now testing 16,850 – almost catching up to the Dow for the 3rd time in 2 years.  

Unfortunately, each time the Nikkei has matched up with the Dow's gains, it's marked and overbought top and led to a sell-off so we were forced to officially reverse our long call on Russell Futures (/TF) from yesterday morning's post and flip short at 1,169 (with tight stops over 1,170).  That's OK though because a move from 1,132.50 to 1,169 on /TF is a profit of $3,650 per contract – not bad for a day's work, right?  

See, I told you we could pay for your trip to our Las Vegas Live Seminar next week with a Futures trade!  

Not that we advocate holding Futures positions overnight – it could just have easily gone the other way.  That's what Wednesday's TNA spread was for – the longer-term long position on the Russell, which will pop TNA well over our $80 goal this morning – that trade has a 316% profit potential in less than a month! 

Notice how we're popping out of the channel.  It would be one thing if we were doing it based on US earnings but doing on Japanese…
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Testy Tuesday – 1,975 or BUST!

SPY 5 MINUTEI told you it was going to be a wild week!

Not that you can draw any conclusions from yesterday's low-volume action.  The Fed doves have their say for the next two days and then we go into a hawkish nosedive on Thursday and Friday, so this little drama is just getting started.  All went according to plan yesterday – per our set-up in the morning post:

As a hedge, for our Member Portfolios, we're favoring SQQQ (now $36.55) and DXD (now $24.52) to protect us from another slide but the real tilt to hawkish doesn't start until Thursday, after the Fed minutes, so we can assume they will be spun bearish from there into the weekend and we'll look to take nice, short positions against any run-up that comes from doveish Fed statements early in the week.  

As you can see from yesterday's action, that was the perfect way to play it and our short positions on the Futures gave us several quick victories as it was all downhill from the open until 1pm.  Even our oil short gave us a nice $600 win – the one that was right there in the morning post at $89.60 and oil was below $89 by 10:45, less than 3 hours for that trade idea to play out!  

That's good because we REALLY needed the money because GTAT, one of our good-sized positions in two of our portfolios, declared a surprise bankruptcy yesterday.  Bankruptcies are not supposed to be surprising but this one was and GTAT dropped 90%, essentially wiping out a $25,000 position and costing us 1/4 of our year's profits in the Long-Term Portfolio.  

There's an excellent article in Bloomberg and another one from Seeking Alpha outlining what happened and where it stands so I'll spare you the gory details other than to say that this is why we stress diversification and portion control in investing.  Even so, GTAT happened to be a stock that got weak and, because management promised a turn-around, we added to our losing position on the initial dip and maxed our allocation and then got burned so quickly that we had…
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Market Mayhem – 12 Fed Speeches in 5 Days Causes Chaos

Get ready for a wild week. 

FOMC minutes are released on Wednesday at 2pm and there are a record 12 Fed speeches in the days that surround them.  Expect the market to gyrate wildly with each tweetable quote and it all kicks off this afternoon with Treasury Secretary Jack Lew, followed by KC's Hawkish Esther George at 8:30.  

Tuesday we have Kocherlakota (hawk) and Dudley (dove), Wednesday is Evans (dove) and the minutes.  Thursday we have Bullard (hawk), Tarullo (dove), Lacker (uber hawk) and Williams (dove) ahead of the realease of the Fed's shocking balance sheet and a look at the ever-expanding US Money Supply.

Friday ends with a bang as we hear from Plosser (uber hawk), George again, Fisher (uber hawk) and then Lacker again – so the hawks very much have the last word into the weekend.  It's not much of a data week (next week is a doozy, though) and, to summarize it's hawk, hawk, dove, dove, hawk, dove, HAWK, dove, HAWK, hawkHAWK, HAWK - do you think, perhaps, the Fed is trying to tell us something?

 

The next Fed meeting is October 28th and we'll hear their decision on the 29th.  If they don't begin to tighten at this meeting, there is no way they'll do it right before Christmas at their last meeting on the 16th.  It seems to me, they are going to be setting expectations for some hawkish action this week and the reaction will give them time to contemplate it going into the next meeting. 

Embedded image permalinkWhat's keeping us from getting too hawkish (bearish) is this chart from Macrobond, which points out that, the last 3 times 10-year rates have been this low, the Fed has begun major rounds of EASING, not tightening policies.  QE increases the money supply and that forces note rates up to compensate and Jack Lew is the guy who has to borrow the money at those rates – so you can see how this week will all tie together once the dust settles

As a hedge, for our Member Portfolios, we're favoring SQQQ (now $36.55) and DXD (now $24.52) to protect us from another…
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Non-Farm Friday – Will Jobs Report Restore Market Confidence?

Ouch, that really stings!  

They say you can't keep a good market down but it remains to be seen whether or not we have a good market with almost all of August and September's BS gains (see any of my posts for warnings and hedge ideaserased just 3 days into October.  

As you can see from our Big Chart, the Russell, in particular, completed it's 10% drop yesterday and, as I said to our Members in yesterday's live Chat Room as we neared the bottom:

/TF/Jasu – Just a bit oversold and, as noted yesterday (and above) it's completing a 10% drop from 1,200 at 1,080, so that's a very firm line for a bounce and that's 20% of a 120-point drop, so we're looking for 25-point bounces to 1,105 (weak) and 1,130 (strong) now.  Anything less than 1,105 today is a failure and, if not tomorrow, then expect more downside next week.  

SPY DAILY/TF is the Futures on the Russell 2000 index and already this morning we're back to 1,097, which is up $1,700 per contract (see how easy this is?) from our 1,080 entry and just a little shy of our expected weak bounce.  

We do expect resistance at 1,100 so this is a good time to take profits off the table and we can go long again over that line or flip to the S&P Futures (/ES) over 1,950 or Nasdaq (/NQ) over 4,000 or the Dow (/YM) over 16,800.  As long as they are all performing, we can be confident on the long side. 

As we discussed with our Members earlier this morning, there's no particular reason to get bullish – this is just a technical bounce we expect off our 5% lines per our 5% Rule™ and, if they trun out to be weak bounces, then we can expect another 2.5-5% of downside next week.  That means we can use those same index lines to go short if they fail as we would to go long if they succeed this morning – that will be all up
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Weakening Wednesday – Market Picture Begins to Look Grim

This is not pretty.

As you can see on our Big Chart, we've failed the 50 dma on the S&P, Nasdaq, NYSE and Russell and the Russell failed its 200 dma long ago.  We're still waiting for the Dow to cross below 16,940 and confirm the carnage but we made those bets long ago with our DXD Oct $24 calls, which are now 0.70 (up 55%) from our 0.45 entry back on 9/18.

In fact, we already took 1/2 of those calls off the table at 0.85 last week so, essentially, the remainder is a free put option on the Dow for the next three weeks – with DXD at $24.45, so we gain every penny from here on up as the Dow falls.  

That's what hedges are supposed to do, of course.  We discussed that in yesterday's Live Trading Webinar, where we also demonstrated a live Futures trade on the Russell (/TF Futures) that made $500 on the 2:30 bounce.  That bounce was very easy to predict because THE MARKET IS MANIPULATED and all we had to do was wait for the same fake spike that we get at the end of every quarter, courtesy of the Fed and their fellow Banksters:

SPY  5  MINUTEWhat's scary about yesterday's flood of money ($230Bn in two days) wasn't just the size of the pump job, but the ineffectiveness of it.  The volume was still anemic and declining shares outpaced advancing shares by almost 2:1 in yesterday's "mixed" trading.  

In reality, it wasn't mixed at all as big traders took advantage of every penny that moved into the market as they told their brokers to sell, SELL!!!

Still, it's not the end of the World just yet – only close to it, and we can still turn this puppy around by holding the line on the Dow as well as Russell 1,100 and Nasdaq 4,500.  This market has been amazingly resiliant in 2014 so we're not going to be complacently bearish the same way we (thank goodness) did not let ourselves get complacently bullish this summer.  


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Testy Tuesday – Dressing the Windows at our Bounce Lines

First, the big news:

EBAY has finally agreed to spin off PayPal and that's going to give us a nice boost in our Income Portfolio (which we fortunately just adjusted more aggressive yesterday) and EBAY has been on our Buy List (Members Only) since 5/20, when they were testing $50 and, as I said to our Members when I predicted an earnings beat in July:

Paypal, Paypal and Paypal.  They should beat the .68 expectations (.63 last year) and all of last year they traded in the $50s, so why should they be below it now when they are making $3 a year (p/e 16.7)?  Compared to the rest of the market, this thing is a real bargain!  

They beat by a penny and, as you can see from the chart, that was enough to kick them up 10% and we recently got a nice re-entry at $50, when we took advantage of the spike down to sell more 2016 $50 puts for $5.50 which were up 15% at $4.80 at yesterday's close – not bad for a month's work and they should be up 30% by the end of today!  

Today we will see an all-out effort to keep the markets afloat so the books on Q3 can be spun positive by the Banksters, who have Trillions of Dollars riding on the outcome.  

Of course, we KNOW that no Bankster would ever attempt to manipulate the Market, or LIBOR, or Currencies, or Ratings…  Well, not if they knew for a fact they would get caught AND the punishment was more than a slap on the wrist, anyway.  Thank goodness, that never happens.

As you can see from our Big Chart, the S&P came to a rest right on the 50 dma at 1,977 so that's the do or die line for the day while it's 4,495 on the Nasdaq.  On the Dow we want to see 17,100 taken back and the NYSE needs to hold 10,750 while the poor, beleagured Russell just needs to hold that 1,110 line.  Officially, our bounce lines remain:

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$5,000 Friday – How to Profit from Market Corrections

$5,000! 

That's how much our FREE Futures suggestions made between the time I put them in yesterday's morning post (8am) and the close of trading at 4pm.  That's not bad for 6 hour's work, is it?  As I said in the morning:

So, you may wonder, why would we want to go against the wishes of two of the most powerful people and short oil ($93.40), gasoline ($2.75), the Dow (17,150) and the Nikkei (16,350)?  Well, that's because, as powerful as these people may be – they are still fighting physics in trying to make the markets do things they simply shouldn't be doing.  

I'm sure ALL the newsletters you follow are able to give you equally profitable advice so, by all means, DON'T SUBSCRIBE HERE – especially ahead of the rate increase in October (sorry, inflation). blush  But, can you really blame us for being pleased that we totally nailed the drop?  

In fact, had you simply joined us on Wednesday and replicated our virtual Short-Term Portfolio, which was only up 53.4% at the time, you would have caught a ride from there to 60% in just two days.  Last Thursday, the STP was up only 30%, so that's a 30% ($30,000) gain for the week as our bearish bets paid off and it very much offset the $15,560 decline in our bullish Long-Term Portfolio.  So much so that we took some of our shorts off the table to get us more neutral into the morning (as we expect a slight bounce unless GDP sucks).  

SPY 5 MINUTEYou don't have to trade the Futures to make great money on your hedges.  Our DXD Oct $24 calls jumped from 0.50 on Tuesday (when I reminded you about them in the morning post) to 0.96 at yesterday's close – up 92% in 3 days!  That's a good hedge, especially when you consider the Dow only fell 2.5%, so we got 36:1 leverage on that hedge – and THAT is how we balance our portfolios and protect them from sell-offs.  

Even a straight purchase of TZA (also noted in Tuesday's post – why…
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Technical Tuesday – Rejected, Rejected, Rejected!

So much for 2,000 holding.

Fortunately, our Big Chart kept us cautiously bearish into the weekend and the hedges in our Short-Term Portfolio functioned perfectly, gaining $13,000 on the day and completely offsetting the drop of $8,000 in our Long-Term Portfolio. 

That's without our big hedge, DXD, kicking in yet, as the Dow is still over 17,000 but, should it fail, we'll see those STP gains multiply quickly.  

For those of you who are not Members, and don't have access to our various Member Portfolios (and you can by subscribing here), we have done our best to prepare you for this drop as well.  Last Thursday, right in the morning post, I shared our short stance with the general public, saying

It's going to be crazy into the weekend but, in our Live Chat Room this morning, I said to our Members:

Futures pumped back up to yesterday's highs at 17,125, 2,001.50, 4,080 and 1,156.5 so I like shorting below 17,100, 2,000, 4,075 and 1,155 – short the laggard, out of any of them cross back over – very simple! 

That's our plan into the weekend.  As I've mentioned before, we're also using DXD ($24 at the time), TZA ($14.68) and SQQQ ($35.26) to hedge our long portfolios – just in case things unravel over the weekend.  We also discussed FXI ($40.30) puts earlier in the week as a play on China melting down so PLENTY of ways to profit from the downside.

INDU DAILYThis morning, the Futures are 17,050 on /YM (up $375 per contract), 1,979 on /ES (up $1,125 per contract), 4,035 on /NQ (up $900 per contract) and 1,116.50 on /TF (up $4,000 per contract) – so that strategy went pretty well.

In last Wednesday's post, we also shorted Oil Futures at $95 and oil fell to
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Which Way Wednesday – How Low Can We Go?

INDU DAILYWhat a fun market to play!  

Yesterday, in our Live Member Chat Room (you can subscribe here), at 11:13, in anticipation of a wierd day, I put up a bullish and a bearish trade idea for our Members.  The cool thing is, both sides won!  Our two trade ideas (which we went over in our Live Webcast at 1pm) were:

If you want to play for an AAPL pop this afternoon, the QQQ weekly $100 calls are just .40 and QQQ topped out at $100.33 yesterday.  Figure AAPL pops 2.5% and that pops the Nas and QQQ 0.5% so $100.50 + premium could be good for 50% if AAPL gets a good reaction – if not, it's probably going to lose less than a direct play on AAPL would. 

TZA/Sn0 – Well TZA is only at $14.50 so the spread is half in the money at net $1.25 so it still has good upside if you add to it but I'd rather get the Jan $15/20 bull call spread at $1 as that gives you more time and more upside – if your TZA hedge goes in the money.  That way, you can take $2 off the table on the Oct spread and know you still have plenty of upside if TZA keeps going up on you and also less downside exposure if it flips the other way.  

When our 1pm Webinar started (at the same time Apple's conference started), the QQQ calls were just 0.42 and still playable and, as you can see on the chart, we even had a dip down to 0.30 briefly but that line held and we then jumped 100% back to 0.60 and then on to 0.72 before dropping back to 0.60, where we took our expected 50% gains and ran.  

If you missed our Webcast yesterday, you should check out the replay because we discussed WHY we made that particular pick and HOW we selected it – very educational!  That's because, at Philstockworld, our goal is to TEACH you to be a great trader – not just give you great trades.  


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Flip Flopin’ Thursday – Argentina Makes Us All Cry

I warned you about Argentina! 

We discussed them way back in December as they faked their own GDP data, that it was nothing more than window-dressing to keep them from LOOKING like they were in default – even though they were clearly heading that way.  

So it should come as no surprise that, as the deadline finally comes, there is no surprising rescue for the World's 26th largest economy ($477Bn vs $499Bn for Norway, $394Bn for Austria, $385Bn for Thailand and $248Bn for Greece).  Since it's not a surprise, we took the opportunity this morning to go long in the Futures, as the 1% dip around 4am seemed overdone.  I sent out a special Alert to all of our Members, saying:

Still, I like /TF for a bullish over the 1,130 line (testing now) and /YM at 16,700 and /ES 1,950 for bounces but VERY TIGHT STOPS if any of them fail.

NDX WEEKLYFortunately, they did not fail and already (8am) we have /TF 1,135 (up $500 per contract), /YM 16,732 (up $160 per contract) and /ES 1,955 (up $250 per contract) and our Egg McMuffins are paid for and those trades are now off the table (tight stops at least), as we expect more selling at the open!  

It's nice to play the Futures to offset bearish bets, like the SQQQ (ultra-short Nasdaq) trade we discussed in yesterday's morning post and the QQQ weekly $96 puts we added for .22 in yesterday's live Member Chat ahead of the Fed – as we expected the statement would disappoint.  Those should come out well this morning and going long on the Futures locks in those potential gains for us.  

Now, getting back to Argentina, ARGT is UP 32% this year and that is just silly so ARGT makes a nice short at $23.20 and you can, in fact, buy the Oct $23 puts for $1.45 and, if they give back that 32%, they'll be back to $19 and you'll have $4+ for a $2.55 gain (175%) – that's a fun way to play it.  


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Zero Hedge

JPMorgan: Please Buy This Dip

Courtesy of ZeroHedge View original post here.

After JPMorgan clocked in its most profitable year in history in 2019 largely on the back of the Fed's QE4 which - as we remind readers again - was triggered by JPMorgan itself, which sparked a repo market crisis after yanking money market and repo liquidity forcing the Fed to first launch repos and then T-Bill purchases, the bank is not only convinced that the good times will continue to roll after the most powerful market meltup in history in the past 4 months, but that the current melt down on the back of fears over a global viral pandemic, is overdone and will end soon, presenting its clients with another delightful opportunity to BTFD. ...



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Phil's Favorites

Animal Spirits: Short Squeeze

 

Animal Spirits: Short Squeeze

Courtesy of 

(This article was originally posted on 1-22-20.)

Today’s Animal Spirits is brought to you by YCharts. Mention Animal Spirits to receive 20% off (*New YCharts users only)

Listen here:

On today’s show we discuss:



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Insider Scoop

10 Medical Instruments & Supplies Stocks Moving In Monday's Session

Courtesy of Benzinga

Gainers

Antares Pharma, Inc. (NASDAQ:ATRS) stock surged 3.4% to $4.12 during Monday's regular session.

Losers

NeuroMetrix, Inc. (NASDAQ:NURO) stock decreased by 29.0% to $3.37 during Monday's regular session.

Akers Biosciences, Inc. (NASDAQ:AKER) stock declined 7.8% to $2.95.

Staar Surgical, Inc. (NASDAQ:STAA) shares declined 4....



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Chart School

Top Patterns for Retail Investors

Courtesy of Read the Ticker

Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..

Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.

You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.  

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Some charts from the video


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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Biotech

Snakes could be the original source of the new coronavirus outbreak in China

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

 

Snakes could be the original source of the new coronavirus outbreak in China

Chinese cobra (Naja atra) with hood spread. Briston/Wikimedia, CC BY-SA

Haitao Guo, University of Pittsburgh; Guangxiang “George” Luo, Univers...



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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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