Posts Tagged ‘IBM’

Tempting Tuesday – Low Volume Rally Challenges Our Bounce Lines

RUT WEEKLYIt LOOKS impressive, doesn't it?  

As I said to our Members this morning in our Live Chat Room, all is going according to plan, as we expected to see strong bounces in our indexes by Wednesday – no matter what news or earnings turned out to be.  If the powers that be want the market to bounce – it bounces.  

Our general rule of thumb is that dip buyers only learn their lesson after they have been burned 3 times and, so far, only the August dip buyers are being relly burned but a failure to retake that line and a move lower – that might get them to think twice about mounting another rescue effort next time we test 1,050 on the Russell.  

On this next chart, you can see how the various Fed speakers were used at key inflection points to guide the markets exactly where they wanted them to go.  

As you can see from this S&P chart with Fed notes attached, the manipulation we told you about on 10/6 (see: "Market Mayhem – 12 Fed Speeches in 5 Days Causes Chaos") is merely playing out according to plan and this is why we were able to take full advantage of both the dip (see: "Money-Making Monday: How to Profit from a Market Correction") and the bounce (see: "Wednesday Market Weakness – Oil Collapses to $80, Good or Bad?").

In fact, the TNA Oct $58/60.50 bull call spread that we pointed out last Wednesday at $1.12 closed on Friday morning at $2.40 – up a very nice 114% in 48 hours for those of you who get our morning newsletter (which you can subscribe to here).  Our suggested roll to the Nov $56/63 bull call spread at $3 still has to play out but, so far, we're at $4, so up 33% in 4 trading days is "on track" towards our planned 133% gain in 30 more days.  

This is how rich people get richer folks – if you are in the top 1%, the Fed is out there working for us –
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Which Way Wednesday – IBM/AAPL Deal Boost Markets

Did you make your $1,000 yesterday? 

You would have if you read yesterday's morning post (subscribe here), where we picked the Russell Futures (/TF) short at 1,160 saying: "If the Russell FAILS 1,160, we'll be happy to flip short for another ride down to 1,150."  As you can see, we had plenty of time to get our planned entry at 1,160 and, as we expected, Yellen's speech disappointed and the markets sold off a bit – easy money!  

RUT WEEKLYWe even flipped back to bullish in the afternoon and, at the beginning of our Live Webinar (1pm), we were able to demionstrate a very quick $250 profit taking the Russell Futures long off that same 1,150 line.  In fact, you can see the big volume spike that came with our live call right on the chart! 

This morning, news of a deal between AAPL and IBM has both companies showing 2% gains pre-market.  For IBM, that's $5 and that's adding 40 points to the Dow Futures (/YM) pre-market and for AAPL, that's $2 and AAPL is 20% of the Nasdaq so 20% of 2% is 0.4% added to the Nasdaq from AAPL alone pre-market plus a nice effect on the S&P from both of those heavyweight stocks.

Under the agreement, IBM's employees will provide on-site support and service of Apple products inside companies, similar to the AppleCare service that Apple sells to consumers.  IBM said it planned to make more than 100,000 employees available to the Apple initiative. It is a rare partnership for Apple, which historically has avoided such alliances.  

"This is just the beginning," said Ms. Rometty, citing a statistic that most smartphones inside companies are used only for email and calendar. She said the companies hope to create new, serious business applications.

The companies said Apple and IBM engineers are together developing more than 100 new apps for various industries. The first batch of apps is expected to be available in the fall when Apple releases the next version of its mobile software, iOS 8.  "Apple is not an enterprise company, but that's
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America About to Turn 238 – Rally Turns 2.5

Happy Birthday America! 

The markets are closed tomorrow and today is a half day but the trend is certainly our friend on the S&P as we haven't been below the 200 day moving average since December of 2011 (except a couple of very brief dips).  Though the average volume is about 30% lower than it was back then – it's still an impressive feat.  

Of course, if 10% of the market was manipulated before and the manipulators haven't left (they certainly haven't) – even if the level of manipulation remained the same, 30% of the 90% that wasn't manipulated (retail investors) did leave (possibly BECAUSE of the manipulation) and that means now manipulators control 10% of the remaining 70%, a 42% increase in manipulation!  Of course we know it's much worse than that because now the Central Banksters perform their own brand of market manipulation.  As noted by Salient Partners in a great article about PBOC Manipulation:

The explicit purpose of recent monetary policy is: to paper over anemic real economic growth with financial asset inflation. It’s a brilliant political solution to the political problem of low growth in the West, because our political stability does not depend on robust real economic growth. So long as we avoid outright negative growth (and even that’s okay so long as it can be explained away by “the weather” or some such rationale) and prop up the financial asset values that in turn support a levered system, we can very slowly grow or inflate our way out of debt. Or not. The debt can hang out there … forever, essentially … so long as there’s no exogenous shock. A low-growth zombie financial system where credit is treated as a government utility is a perfectly stable outcome in the West. 

So China has indeed learned the most valuable lesson of Capitalism – that money is a meaningless contstruct that can be freely manipulated to fit whatever narrative the Government wishes to spin and that debt is not to be feared, but embraced, especially by our Corporate Masters – because our National Debt becomes their Private Profits!  


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The Buy List – 20 Great Trade Ideas for the Rest of 2014 (Members Only)

INDU WEEKLYWhat a rally!  

While stocks certainly aren't "cheap" by any measure, we've been able to identify 20 that are still good values.  We've been compiling this list and going over trade ideas for playing them in our Tuesday Webinars since May 13th and, of course, we've been posting them in our Live Member Chat rooms, so this is just a review to consolidate our trade ideas.  

We cashed in our Long-Term Portfolio last week at what we thought was a top but so far – so wrong on that call!  Since it's up 19% in just 6 months, we're not going to cry about missing the last 400-point move on the Dow (2.5%) – we'll just have to look ahead to deploying our cash again, following the same strategy that was so successful in the first half of the year, which was, essetially, our "7 Steps to Consistently Making 20-40% Annual Returns" system:

As we did in building our Long-Term Portfolio, we're not going to rush in and buy everything.  We will do exactly what we did in January where, following our Fall Buy List, we simply added stocks from our list whenever they became cheap.  While our Members are able to pick up our trade ideas as they are released, we don't always add them to our virtual portfolios right away.  As with the first half's Long-Term Portfolio, we will track every entry and exit in both our Live Weekly Webcasts, as well as in our Live Member Chat Room and alerts will be sent to our subscribers (you can join here, Basic and Premium Members get full access).  

Our picks were originally grouped by industry sectors but, for reference purposes, I'm going to list them alphabetically below – these are the original trade ideas (the Webinar dates where we discussed our picks are next to the symbol), most are still playable but some have already taken off :

ABX (5/28) we featured in our June 3rd post - obviously one I like.  If you don't want to buy the stock for $15.90 (and we NEVER pay retail at PSW!), then you can sell the 2016 $15 puts for $2.05,
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Thrill is Gone Thursday – Rally Tired or Just Resting?

EU leaders are meeting in Brussels today and tomorrow

For anyone who's been paying attention for the last two years – that's usually not a good thing and, as we noted yesterday, it was a strong Euro and a weak Dollar that was driving our little rally.  The Dollar bottomed out at 79 and the Euro topped out at $1.314 and the Euro's strength sent the Yen back up to 79.30 to the Dollar (weaker) and that led to a 2% Nikkei rally last night.  As you can see from the chart on the right, the S&P for the week is 1% behind UK and Germany and 2.5% behind France and Italy (+4%) and Spain (+7%) – so we have a lot of catching up to do if this rally is real and sustainable

Still, I sent out an Alert to Members early this morning noting that the Global Markets were holding up well as of 6am and that was encouraging.  Yesterday we discussed taking advantage of the run-up in the Russell to make a TZA hedge to lock in some of our gains (see main post) but we still haven't covered XLF (target $16.50 – see Dave Fry's chart) and we're still bullish on AAPL as well.  We cashed that ISRG play, as planned for $9 on the spreads (200x = $1,800), spending .30 x 200 ($60) to buy back the callers so that, with the $200 we were paid to take the position is just short of our $2,000 goal at net $1,960 – not bad for a day's "work".  

In Member Chat this morning, we discussed GOOG's outlook for earnings this evening and decided they were more likely topping than popping so we have that risk to the Nasdaq for tomorrow.  IBM was an 80-point drag on the Dow yesterday but it did manage to finish flat and advancers led decliners on the NYSE by 2:1 so the conditions are still there for a rally and hopefully what we have here a a pause that refreshes and not a triple top from the mid-September highs.  

The Nasdaq and the Russell are, in fact, in downtrending channels and, for the Nasdaq, their fate rests on GOOG tonight and AAPL next Thursday – but it's still a long way back to the highs at 3,200.  

As you can see from the
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Will We Hold It Wednesday – Dollar Dives to 79, Futures Flat

Let's not make this more complicated than it needs to be

A weak Dollar lifts the markets and, this morning, the Dollar fell from 79.50 at yesterday's close to 79 at 6:45 and that's why, despite earnings disappointments from both INTC and IBM, the Futures are up slightly 3 hours before the open.  As you can see from the chart on the right, to say there's a strong inverse correlation between the Dollar and the S&P is quite the understatement.  Over the longer run – the effect tends to wash out but, over the short run, it's an almost perfect match.  

Of course, this also has a very direct effect on commodity pricing and part of the reason for the Dollar's big sell-off last night was the much-better-than-last-time performance of Barack Obama in the second Presidential Debate as the future of the Fed and all that free money hangs in the balance.  

After the first debate, two weeks ago, Romney clearly won and has made it known that he will kick both Big Bird and Big Ben to the curb as soon as he gets in office – that sent the Dollar up from 79.10 to 80.21 (up 1.4%) last week and dropped the S&P from 1,460 to 1,430 (2%).  After last night, Romney looks to be back off the table and that leaves the Dollar to resume it's downward slope – giving another lift to the markets.  

At the same time, Moody's left Spain's credit rating above junk this morning and that's lifting the Euro to $1.31 and the Pound is moving in lock-step at $1.61 BUT the Yen dropped 0.5% to 78.63 and it's not likely the BOJ will let the Dollar slip below 79 as that makes Toyotas and Sonys more expensive just ahead of the holidays.  Also, the Nikkei finally got back to 8,850 last night and you know they hate to lose that line.  

So get set for some heavy-duty Global Market Manipulation by our Central Banksters as everyone but Europe tries to race for the bottom.  Europe, interestingly enough, doesn't mind a strong currency as they are fuel and goods importers and most of the goods they export are "luxury" class and less susceptible to currency fluctuations.  With strong intra-zone trading the backbone of the EU economy, it doesn't matter where the Euro is trading from that perspective either and, of
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Wednesday Worries – AAPL Makes $76,103 While You Read This

$76,103 – That's not sales, that's profit!  

Every minute of every day, AAPL is making $76,103 (at $40Bn a year) on the sale of $316,120 worth of products.  No company on Earth comes close to that kind of metric and, overall, the stock's performance clearly indicates that but, if you listen to the MSM, you would think AAPL is finished.

We had a nice, in-depth discussion about AAPL in Member Chat this morning and we not only concluded it's still a buy but we came up with a lovely spread that has the potential to turn $3,000 into $45,000 between now and Jan 2015 if AAPL simply holds $600 – needless to say we're very proud of that as it's always nice to have a trade or two in your portfolio that returns 1,500% and we rarely get a chance to do them with a blue-chip stock like AAPL.  

Note in the above chart, that AAPL is still a relative outperformer this year – shown priced against HPQ, DELL, INTC, IBM, CAT and ISRG – all good companies that have simply failed to keep up.  We also like HPQ at this level, now $14.30 as their REDUCED guidance has them earning $3.62 per share next year after earning $4.05 this year and that's still 25% back on your money, which sure beats TBills and we're not even counting the $18Bn in cash they have on hand, which is quite a lot when you consider that their entire market cap is now just $28Bn.  Small wonder HPQ spent $9Bn buying back their own stock last year, when it was priced 100% higher. 

HPQ is a pretty good candidate for a buy/write, where we Buy the stock for $14.30 and Write 2014 $15 puts and calls (sell short) for $5.50 and that nets $8.80 on the trade and, if HPQ is below $15 in Jan 2014, then another round of shares will be put to you at $15 for an average entry on 2x of $11.90, which is 17% below the current price and, if HPQ is over $15 in 16 months, then you get called away at $15 for a $6.20 profit on cash (75%).  Buy/writes are our favorite tools for making long-term entries – see "How to Buy a Stock for a 15-20% Discount."

As we mentioned INTC in the above chart, let's look at a similar…
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Friday Failure – Weak Bounce Levels Turn Into Resistance

Resistance is, unfortunately, not futile for our indices.  

On Monday we discussed our expectations for a 2% weak bounce for the week, which would be a 20% retrace of the 10% drop I had predicted we'd have way back (and a bit early) in March.  That constitutes a WEAK bounce and not a rally and they almost fooled us on Monday by taking back most of that 2% on day one but, since then – it's been pathetic and we've essentially done nothing the rest of the week.  

The levels we were looking for were laid out in Monday's Member Chat and in Tuesday morning's post and were:

  • Dow – 12,750 (12,540 is 20% retrace/weak bounce), now 12,529 – off by 11
  • S&P – 1,343 (1,319), now 1,320 – off by 1
  • Nas – 2,900 (2,840) , now 2,839 – off by 1
  • NYSE – 7,720 (7,560), now 7,552 – off by 8 
  • RUT – 780, (765), now 766


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Free-Falling Thursday – Facebook Faces Fatal Friday Follow-Through

What a week to do an IPO!

Will Facebook save the markets tomorrow with a successful roll-out of the largest IPO of all time or will it be the straw that breaks the camel's back, with a disappointing open that sends the Nasdaq off a cliff along with their entire over-priced sector?  Either way – this is going to be fun.

We can argue the merits of Facebook's value (or lack thereof) all day long but, scam or not, it's very likely FB will set off a buying frenzy in the space and we finish the week off with a bang. If that doesn't happen – I will be very, very bearish but from what I'm hearing and the way they are extending the offer and raising the price – it's way oversubscribed.  Also, we have to consider that people are cashing out 1-5% of their holdings to raise cash for FB on Friday – sure it's moronic, but that's what people do so you have to put yourself in a position of someone who wants to put 5% of your portfolio in to Facebook (the way you wish you had put 5% into Google at $80 when they IPO'd) tomorrow – what would you be doing with the rest of your portfolio today?  

EZU WEEKLYMeanwhile, the rest of the World is falling apart with Europe turning sharply lower as Spain sells bonds at record high yields (5.106% for 4-year notes) this morning after announcing that their Q1 GDP was -0.4% at the same time as Moody's indicates they will be cutting the credit ratings of 21 Spanish Banks this evening AND, to top it all off – there is a run on Bankia, which Spain nationalized last week – with $1.3Bn pulled from accounts this past week!  This sent Spain's markets down 1.6% and Italy (who is next) fell 2%, sending the Euro down 1% to $1.2668 and the Pound followed it down to $1.5832 (while EUR/CHF holds steady at 1.2009 in the most blatant currency manipulation ever witnessed).

Wow – that's a lot of bad stuff!  Maybe too many bad things – as in a bit suspicious that all this bad stuff happens at once – as if maybe someone WANTS to force a panic bottom?  If so, I applaud them – we certainly needed to shake things up a little
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IBM Call Buyers Foresee New All-Time Highs Ahead

 

Today’s tickers: IBM, BIG & MMM

IBM - International Business Machines Corp. – Bullish options are in play on the world’s largest computer services provider this morning after IBM raised its quarterly dividend to $0.85 a share and increased the size of its stock buyback plan by $7 billion. Shares in the Armonk, New York-based Company are up 1.65% at $201.90 as of 11:05 a.m. ET. Weekly calls with a few trading days remaining to expiration are active, with the April ’27 $205 strike contracts drawing the heaviest volume in the expiry. The $205 calls have changed hands more than 2,300 times in the first half of the session versus 779 open positions, and it looks like most of the volume was purchased for an average premium of $0.26 apiece. Call buyers may profit at expiration as long as shares in IBM rally another 1.7% to surpass the average breakeven price of $205.26. Meanwhile, fresh interest in the June expiry calls suggests some traders are positioning for IBM’s shares to potentially hit fresh record highs in the next couple of months. The June $215 strike calls have traded more than 600 times this morning against open interest of 133 contracts, with much of the volume initiated by buyers paying $0.37 apiece, on average. Investors long the calls stand ready to profit in the event that shares in IBM surge 6.7% to top an average breakeven share price – and new all-time high – of $215.37 by June expiration.

BIG - Big Lots, Inc. – Shares in Big Lots are down big time after the discount retailer of consumer goods lowered its first-quarter sales forecast. The Columbus, Ohio-based Company’s shares are down more than 20.0% today to stand at $36.40 on the sales guidance and a slew of analyst…
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Kimble Charting Solutions

This is where selling pressure could really ramp up!

Courtesy of Chris Kimble.

Even though stocks have been weak of late, breaks of certain price levels could actually trigger much more selling than stocks have seen so far.

This 4-pack applies Fibonacci extension levels to the S&P 500, Dow, Nasdaq 100 and Transports. Each of these indices hit key extension levels earlier this year at each (1), where strong uptrends looked to have potentially ended.

Each index is now testing the bottom of 2018 trading ranges and long-term rising support at each (2).

If these multi-year support lines are broken to the downside at each (2), look for selling pressure to increase from what we have seen of late...



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Zero Hedge

Global Stock Rally Fizzles As Europe Slammed By "Retail Apocalypse"

Courtesy of ZeroHedge. View original post here.

Another attempt to rally S&P futures overnight has fizzled, this time as a result of weakness in Europe and a mixed session in Asia, following a sharp decline in European retailers due to a record plunge in UK online retailer Asos Plc which collapsed after warning that Christmas shopping got off to a disastrous start, dragging its shares to a 2 year low and hitting the sector.

In an otherwise quiet session as traders prepare for this week's critical Fed meeting, sha...



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Chart School

Weekly Market Recap Dec 16, 2018

Courtesy of Blain.

A significant selloff Friday had bears continuing to enjoy December and calls for the bulls for the Federal Reserve to save them.  It’s been a very long time since bears have had the upper hand for such an extended period.  Volatility continues to be very high and the charts continue to say “remain in safety”.  The Russell 2000 – the laggard of 2018 – broke a yearly low set in February and the S&P 500 broke October lows to create a “lower low”.

Karyn Cavanaugh, senior market strategist with Voya Investment Management, said that disappointing economic data out of China was the biggest driver of Friday’s losses. “The Chinese data was a dirt sandwich, not because it showed deceleration in the Chinese economy, but because it’s showing...



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Phil's Favorites

Barry Ritholtz: Donald Trump Owns This Stock Market

Trump vs. Stock Market...

Many thought that Trump’s aggressive style and economic ignorance wouldn’t leave a lasting mark on either stocks or bonds.

That was wishful thinking. https://t.co/COMz54EOk6

— Bloomberg Opinion (@bopinion) December 16, 2018

...

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Insider Scoop

Economic Data Scheduled For Monday

Courtesy of Benzinga.

  • The Empire State manufacturing index for December is schedule for release at 8:30 a.m. ET.
  • The housing market index for December will be released at 10:00 a.m. ET.
  • The Treasury is set to auction 3-and 6-month bills at 11:30 a.m. ET.
  • The Treasury International Capital report for October is schedule for release at 4:00 p.m. ET.

Posted-In: Economic DataNews Economics Pre-Market Outlook ...



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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Biotech

Those designer babies everyone is freaking out about - it's not likely to happen

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

 

Those designer babies everyone is freaking out about – it's not likely to happen

Babies to order. Andrew crotty/Shutterstock.com

Courtesy A Cecile JW Janssens, Emory University

When Adam Nash was still an embryo, living in a dish in the lab, scientists tested his DNA to make sure it was free of ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

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 shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

...

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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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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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