Posts Tagged ‘ITMN’

Bears Bombard Homebuilders ETF

Today’s tickers: XHB, MTH, AIG, THC, RL, GPS, ITMN, EEM & EWZ

XHB – SPDR S&P Homebuilders ETF – Shares of the XHB, an exchange-traded fund designed to track the performance of the S&P Homebuilders Select Industry Index, are trading 3% lower this afternoon to stand at $18.29 as of 2:50 pm (ET). Pessimistic positioning by one options strategist suggests shares of the underlying fund could continue to decline ahead of June expiration. The investor initiated a three-legged options combination play, essentially selling call options to finance the purchase of a debit put spread on the fund. The pessimistic player established the trade by purchasing 12,000 puts at the June $18 strike for a premium of $0.79 apiece, spread against the purchase of the same number of puts at the lower June $17 strike for $0.44 each. The third leg of the transaction involved the sale of 12,000 calls at the June $20 strike for a premium of $0.36 a-pop. The investor responsible for the bearish play pockets a net credit of one penny per contract, and keeps it as long as shares trade below $20.00 through expiration day. Maximum potential profits available to the trader – including the net credit received – amount to $1.01 per contract and pad the investor’s wallet if shares of the underlying fund decline another 7.05% from the current price of $18.29 to breach the $17.00-level by June expiration.

MTH – Meritage Home Corp. – The homebuilding company, like the homebuilders ETF, enticed bearish options investors late in the trading session. Meritage Home’s shares are down sharply by 5.35% to $22.11 as of 3:00 pm (ET). But, Meritage is not the only one suffering today as shares of rival firms Pulte Group Inc., Lennar Corp and D.R. Horton, Inc., also declined significantly along with the price per share of the SPDR S&P Homebuilders ETF. Pessimistic options players expecting MTH’s shares to continue lower in the next several months purchased at least 4,300 puts outright at the September $20 strike for a premium of $1.60 per contract. The confirmed purchase of the these contracts represents just a portion of the more than 10,000 puts exchanged at that strike today where previously open interest stood at just 377 lots. Put-buyers make money if Meritage’s shares plummet 16.75% below the current price of $22.11 to breach the effective breakeven point to the downside at $18.40 by September…
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Which Way Wednesday – World of Worries Weighs on Wall Street

7 W’s in the title - that has to be some kind of alliterative record! 

What could we possibly be worried about with the market making new highs?  Well, I’m a little concerned that Shanghai housing prices fell 10% in a week.  That’s the kind of behavior that may make you think they may have a bit of a bubble that’s popping.  Of course they held up well compared to Shenzhen, where prices dropped 14% in the first week of March.  That was matched by a 14% decline in iron ore shipments from Australia as China’s demand fell from 11M tons in January to 8.7M tons in February.  So, if you were wondering how much China’s $600Bn stimulus spending was affecting their economy – 14% is the effect of them simply slowing it down a little

Japanese Machinery Orders fell 3.7% in January and Producer Prices fell a deflationary 1.5% in the World’s second-largest economy (for now).  “The gap between supply and demand in the domestic economy has yet to shrink,” said Morita at Barclays Capital. “It’ll be very difficult for companies to pass on those costs. That’s not good for their profits.”  The Baltic Dry Index is topping out just over our 3,200 target, signaling a possible end to the great commodity run of 2010.  Devan Kaloo, head of Aberdeen’s Global Emerging Markets is predicting that emerging markets (we are long EDZ, now $47) may fall as much as 15% this year.  “The markets will see a correction this year,” Kaloo, whose Aberdeen Emerging Markets Institutional Fund has beaten 93 percent of competitors in 2010, said in an interview in New York. “People get over-optimistic and expect too much out of earnings and global growth.”      

Sure, I know I’ve been saying this for a while but it sounds so much more official when a guy in charge of $22Bn says it!  China’s 4 trillion yuan ($586 billion) stimulus package, coupled with record bank lending in 2009, helped the benchmark Shanghai Composite Index rally 80 percent last year. The gauge has dropped 6.4 percent in 2010.  “From a stock-picking perspective, we can find better opportunities” than China, Kaloo said. “The government pumped money into the financial system, but soon they’ll run out of money,” which will hurt the earnings of Chinese companies.

Amazingly, much of the tech growth we’re seeing in Asia is resulting from a mad rush to produce 3-D TVs in time for the holidays – something I believe may
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Prior Weekly Wrap-Up – February Expiration Day Special!

I didn't get to do a wrap-up last week so we have a lot of trades to go over and, with expiration looming and the Fed tightening, I thought it would be good to just get the list out on Friday so we can adjust our rolls to March where neccessary (in bold under appropriate positions).

In our Feb 7th Wrap-Up, I was gung-ho bullish saying "It's Only a 55-Point Drop You Wimps!" and we had  been BUYBUYBUYing at the bottom all week, especially Wed-Fri as the market spiked through our projected support at Dow 10,000 but not enough to change our minds as we bottom-fished on AAPL (2 trades), ABX, ACOR, AKAM, AMED, BRK/B (2), C, CCJ (3), CSCO, DELL, FXI, GE,  GOOG, IBM, LLY, LOW, NLY, TBT (5 times!), TM (3), TNA, USO (yep, we wen long oil) and UYG.  To say we were weigting bullish by that Monday was an understatement as we has finished the weekend in a bullish stance and were relying on our disaster hedges to protect us

Those disaster hedges are an interesting set to look at, especially now that we've recovered 400 points:

  • DXD July $27/33 bull call spread at $2.50, now $2 – down 20%

    • We can roll the $27 calls to the $25 calls for $5 to widen the spread and drop our b/e from $29.50 to $28.50
  • EDZ July $3/8 bull call spread at $2.10, now $1.60 - down 23%
  • EDZ Apr $10 calls sold for .70, now .15 – up 78% (pair trade)
  • SDS 2011 $36/40 bull call spread at $1.30, now $1 – down 18%

    • We can roll the $36 calls to the $33 calls for $1.10
  • TBT Jan $35/45 bull call spread at $6.30, now $7.40 - up 17%
  • TBT March $50s sold for .65, now $1.22 – down 87% (pair trade)

This is what is great about disaster hedges.  The potential upside on these spreads, if the market headed south was up about 100% on the 4 trades so a commitment of 5% of your virtual portfolio to each one (20%) would give you back 40% of your virtual portfolio in cash if the markets tanked.  Already, after 2 weeks, we have the markets heading in the opposite direction and what is the cost?  Not even 20% of…
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Amazon Options in High Demand Following eBook Pricing Concession

Today’s tickers: AMZN, DELL, FXI, AET, XOM, LPX, CSCO, VCI & ITMN

AMZN – Amazon.com, Inc. – E-tailer, Amazon.com, Inc., attracted two-way trading traffic in its options today after the firm gave in to publisher, Macmillan’s, demands to increase the price of digital books. Amazon.com’s concession to Macmillan is fueling investor concerns that the largest internet retailer is relinquishing its pricing advantage. Shares of the online shopping destination slumped more than 8.65% during the trading session to an intraday low of $114.38 – the largest decline in Amazon’s shares in more than one year. Investors inundated Amazon with options trades today, exchanging more than 226,300 contracts on the stock by 2:50 pm (EDT). Option volume generated thus far in the session represents more than 45% of the total 493,697 lots of existing open interest on AMZN. Strong demand for options on the stock as well as a rise in investor uncertainty boosted option implied volatility on Amazon roughly 8.3% higher to 41.44% in afternoon trading. Option traders expecting shares to rebound quickly purchased 2,200 call options at the February $115 strike for an average premium of $5.67 apiece. The $120.67 breakeven price on the contracts suggests call buyers expecting to amass profits in the next few weeks, anticipate a more than 5% increase off the intraday low, by expiration day in February. Call buying and selling in roughly equal proportions was observed at the February $120 strike and at the February $125 strike. Two-way trading traffic of put options is also apparent in the February contract. Contrarian players sold nearly 8,000 puts at the February $115 strike to take in an average premium of $3.58 per contract. Put sellers at this strike keep the full premium received if AMZN’s shares trade above $115.00 through expiration day. The most bearish moves were made at the March $105 strike where 1,100 puts were picked up for an average premium of $2.81 each.

DELL – Dell, Inc. – Bullish investors initiated call spreads on the just-in-time manufacturer of personal computers this afternoon with Dell’s share price up 2.5% to $13.22 on the day. Option traders purchased more than 10,000 calls at the August $14 strike for an average premium of $1.17 apiece, spread against the sale of roughly 10,000 calls at the higher August $18 strike for an average premium of $0.20 each. The average net cost of the bullish trade amounts to…
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Two Week Wrap-Up – Trading Our Range

Your "crystal ball" was dead-on with the insights into the report on jobs as well as the initial rise and then correction. Truly impressive.  – Champstar2

We didn't have a weekly wrap-up last week because of the holiday.

In our Nov 21st Wrap-Up, I had said next week we’ll be watching to see if we can get more bullish above our 25% lines at: Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,000 and Russell 600 and that became the bottom of our new range while I sent out a 9:41 Alert to our Members on Nov 23rd sticking with our upside targets of Dow 10,471, S&P 1,113, Nas 2,205, NYSE 7,266 and Russell 605.  That has been a very reliable range to play for the past two weeks and we've been having a good time playing both ends of it.

Rather than just wrapping up this week's moves, I thought we'd add the prior week as the pattern is very much the same (and it was the same the week before) so it certainly bears (oops, don't say bears!) studying.  Of course, when I talk about patterns, I don't just mean the chart pattern where we have all of our gains for the week on Monday and Tuesday on low volume and then larger volume selling for the rest of the week as the funds who pump the futures up dump their ill-gotten gains on retail investors.  I'm talking about the global new patterns, as reported by the MSM, that make this sort of manipulation so effective.  It's not that I'm so good at predicting things – it's really just that I'm good at spotting the BS…

Monday - Stuffing the Futures for Thanksgiving

I was pointing out that morning that 90% of the market gains since October had been coming on a single day each week and how a lot of that was happening in the very thinly-traded Futures market, where a few thousand shares traded overnight are able to lever the entire US market up by Trillions of Dollars.  It's a very sick and broken system that has been seized by manipulators to yank investors around, making sure retail investors have little ability to participate in these wild market moves as the game is already over by the time trading starts the next
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Option Trader Prescribes Bullish Risk Reversal on CVS

Today’s tickers: CVS, LIZ, ITMN, MA, V, RF, KG, HW, WSM, AEP & NTAP

CVS – CVS Caremark Corp. – Shares of the pharmacy retail chain are up 1.5% to $31.11 perhaps due, in part, to the ‘buy’ rating it received at UBS today. Optimistic options activity took place in the December contract as one investor initiated a bullish risk reversal. It appears the trader sold 4,400 puts at the December 31 strike for an average premium of 94 cents apiece in order to finance the purchase of the same number of calls at the higher December 32 strike for 63 cents each. The investor pockets a 31 cent credit on the trade, which he retains in full as long as shares remain above $31.00 through expiration. Additional profits accumulate if CVS’s shares rally above $32.00.

LIZ – Liz Claiborne, Inc. – A 15,000-lot covered call in the January 2011 contract on Liz Claiborne today suggests shares are likely to recover, albeit at a glacial pace. Shares of the apparel and accessories retailer suffered a 5% decline to $4.55 during the trading session. One investor effectively purchased shares of the underlying stock for $3.30 apiece by selling 15,000 calls at the January 2011 5.0 strike for a premium of 1.25 each. Thus, the trader stands ready to accrue gains of 51% if shares of LIZ appreciate to $5.00 by expiration. The long-term positioning of the covered call play provides several advantages to the investor. One advantage is that the call options do not expire for another 13 months, which leaves ample time for LIZ’s shares to appreciate up to the strike price of $5.00. The 15,000-lot call transaction represents nearly 50% of the total existing open interest on LIZ of 31,502 contracts. Note that shares last traded above $5.00 yesterday at approximately 10:35 am (EDT).

ITMN – InterMune, Inc. – A bull call spread on the biotechnology company today suggests shares could rally significantly by expiration in April 2010. Bullish options activity on the stock belies the more than 3% decline in ITMN’s shares during the session to $10.94. The call spread involved the purchase of 3,750 calls at the April 15 strike for an average premium of 2.25 each, marked against the sale of the same number of calls at the higher April 25 strike for 75 cents apiece. The net cost of the transaction amounts to 1.50 per…
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Testing Tuesday Morning – S&P 1,010 Edition

So far so good.

As I said in yesterday's post (and the weekend wrap-up), we were well-positioned for the drop – It's just a quesiton of finding a bottom now.  It didn't take very long as we found it at 9:46 when I sent out an Alert to Members saying: "Once again it’s a good time to sell the DIA $95 puts at $2 as the volume on this sell-off is not at all exciting so far.  As long as the Dow holds 9,450 (now 9,475) it’s a good play."  We had a couple of spikes below but, on the whole, 9,450 held like a champ and those puts hit our 20% target by the day's end (some of our quicker traders even had a chance to double dip).  That level and 1,010 on the S&P will be our critical tests today as well

As you can see from David Fry's SPY chart, that 1,010 line on the S&P represents the bottom of the range we broke out of on Aug 21st after failing it several times earlier in the month so it either holds this week or last week begins to look like noting more than a blow-off top at the tip of a downturn. 

We followed through with our DIS play but we're still hoping to do better on the call sale to complete our buy/write.  We took an early stab at shorting OIH but chickened out by the end of the day and we took advantage of a nice drops in ITMN, LZB (hedged) and CIM (hedged) while adding protective plays by going long in TZA (hedged) so it was a busier day than we planned.  We also picked up some more fills for our $100K Virtual Portfolio, as per our weekend plans and that virtual portfolio jumped $500 on the day, which is nice for a down day and indicates we are doing pretty well on that balance thing…

At 1:03 I sent out an Alert to Members saying: "Should be stick time after a blow out bottom - I still like those DIA $95 puts sold naked for $2+, looking for .25 to .50."  We got a false run at 2:30 then a drop down to a blow-out spike at 3:30 and then, of course, the daily stick, that took up right back to
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Phil's Favorites

Facebook has known for a year and a half that Instagram is bad for teens despite claiming otherwise - here are the harms researchers have been documenting for years

 

Facebook has known for a year and a half that Instagram is bad for teens despite claiming otherwise – here are the harms researchers have been documenting for years

Instagram’s emphasis on filtered photos of bodies harms girls’ self-image. Thomas Barwick/DigitalVision via Getty Images

Courtesy of Christia Spears Brown, University of Kentucky

Facebook officials had internal research in March 2020 showing that Instagram – the social media platform ...



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Biotech/COVID-19

Political orientation predicts science denial - here's what that means for getting Americans vaccinated against COVID-19

 

Political orientation predicts science denial – here’s what that means for getting Americans vaccinated against COVID-19

Protesters at an anti-vaccine rally in Pennsylvania in August 2021. Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Adrian Bardon, Wake Forest University

Vaccine refusal is a major reason COVID-19 infections continue to surge in the U.S. Safe and effective vaccines have been available for months, b...



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Politics

Political orientation predicts science denial - here's what that means for getting Americans vaccinated against COVID-19

 

Political orientation predicts science denial – here’s what that means for getting Americans vaccinated against COVID-19

Protesters at an anti-vaccine rally in Pennsylvania in August 2021. Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Adrian Bardon, Wake Forest University

Vaccine refusal is a major reason COVID-19 infections continue to surge in the U.S. Safe and effective vaccines have been available for months, b...



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Zero Hedge

Chevron CEO Warns "New Dynamics" To Boost Energy Prices Amid Global Supply Crunch

Courtesy of ZeroHedge View original post here.

Soaring energy prices are stoking new concerns about a stagflationary environment of high prices and waning economic growth. Natural gas prices in Europe and the US are through the roof, and WTI futures are over $70 per barrel. 

Chevron Corp.'s CEO Mike Wirth spoke with Bloomberg on Wednesday and warned about elevated prices due to tightening supply. He said oil and ga...



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Digital Currencies

Animal Spirits: Crypto's Gateway Drug

 

Animal Spirits: Crypto’s Gateway Drug

Courtesy of Michael Batnick

Today’s Animal Spirits is brought to you by YCharts

On today’s show we discuss:

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Chart School

Gold and Silver Volume Waves Review

Courtesy of Read the Ticker

The sign says it all. The professionals want the public to focus on the words, to scare out the weak hands, but the color of the sign underlines the value in a money printing world, its gold stupid.

Point and figure (PnF) charts draw price waves with the sum of volume per wave. PnF charts high light true accumulation underneath price action. This is why Richard Wyckoff favored PnF charts.    

In the charts below we see price moving sideways to down, yet volume on up waves are greater than volume on down waves. At the moment there is no heavy selling on down waves. Or in other words price is being moved down at a low volume expense to allow accumulation at a lower price.

This action represents professionals building their...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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