Posts Tagged ‘MCD’

Wednesday Worries – Putin Puts Pressure on Ukraine

 photo putin_zps43535164.gifNow what?  

Well, same old, same old really.  As the US and Europe ratchet up the sanctions, Putin has ordered "retaliatory measures" of an unspecified nature and has massed more troops along the Ukraine boarder:

"Political tools of economic pressure are unacceptable, they contradict all norms and rules," he said. "In that connection, the government of Russia has already proposed a series of retaliatory measures against the so-called sanctions of certain countries. I think that in current conditions, with the goal of protecting the interests of domestic producers, we could certainly think about that." he added.

SPY 5 MINUTEIn recent days, Russian regulators have banned shipments of some European fruits and vegetables and raised questions about the safety of products from MCD in Russia, threatening to ban their sale. Officials deny any political motivation for those moves.  wink  

Russia's Vedomosti newspaper reported Tuesday that the government was considering a partial or total ban on overflights of Siberia by European airlines, which use the route to shorten trips from Europe to Asia.  

European markets are already suffering with Italy dropping 2.9% this morning on news that it has officially slipped back into a Recession with GDP falling 0.2% in Q2 – a far cry from the +0.2% predicted by leading economorons.  The IMF has cut their optimistic growth estimate for Italy to 0.3% in 2014 and dropped Spain to 1.3%.  Spanish markets are down 2% today as well.  

We decided this was a good time to buy this morning and, at 6:58 this morning, I put up this chart for Members in our Live Chat Room, saying:

Check this out – all hitting the S1 lines so far:

It's certainly worth playing for a small bounce at


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McD’s Weekly Calls On The Breakfast Menu For Some Traders As Stock Pops

Shares in McDonald’s are up the most in the Dow Jones Industrial Average today, rising nearly 4.0% to $98.92 and the highest level since November 26th during the first hour of the session. The rally in shares of the world’s largest restaurant chain today is more than making up for yesterday’s dip in the price of the underlying on the heels of a larger than expected dip in February same store sales. Options traders hungry for continued gains in the stock in the very near term appear to be snapping up weekly options across several striking prices today.

The most traded weekly options by volume are the 14 Mar ’14 $97 strike contracts, with around 3,000 in-the-money calls in play against open interest of 744 positions. Time and sales data suggests most of the volume was purchased for an average premium of $0.42 each. Call buyers stand ready to profit at expiration this week in the event that MCD shares exceed an average breakeven price of $97.42. Shares are currently well above that level and the $97 strike calls are now trading at $1.72 each as of 11:40 a.m. EDT, which is roughly four times the average asking premium paid earlier in the session.


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TGIF – Happy Crashiversary – Are You Prepared for the Next One?

25 years ago today, the market fell 22%.

You never know what's going to panic the markets – since then we've had many other sudden corrections like Black Friday just 2 years later and Black Wednesday in September 1992, we've had the dot.com collapse and 9/11 and whatever you call 2008 and recently we had Dubai and Greece leading to sudden crashes and the ubiquitous flash crash and whatever happened last August (Europe again).  

So stock markets are dangerous places to keep your money, on the whole.  That's why TZA (ultra-short Russell) is our primary hedge in the Income Portfolio  and, as I mentioned in last Wednesday's post, should the S&P fail to hold 1,440, then the Dow has little support all the way down to 13,295 as well.  Just this Tuesday, I reiterated a TZA spread Members could use for general portfolio coverage:

Ultra hedges/Bdon – You just can't beat TZA at $15.  The Jan $12/15 bull call spread is $1.50 so 100% upside if TZA simply doesn't go any lower.  If they do go lower, you can sell the April $11 puts, now .50 for $1 (the Apr $12 puts are .92) before your $1.50 is even out of the money and then you'd be in the Jan $12s at net .50 and worst case is you get assigned at net $11.50 in April but, of course, you can roll or simply accept the assignment and cover and then you have more long-term protection.

We like to buy our protection when the market is going up – it's cheaper that way!  TZA was at $14.75 at yesterday's close and the Jan spread was still about the same $1.50 but it's $2.75 in the money – all we need is for TZA to not go down (Russsell not to go up) and we make a tidy profit.  That's a good way to hedge because the only way that hedge loses money is if the market breaks higher.  

We're not turning bearish yet but, as we're seeing some pretty serious misses (GOOG and CMG yesterday, for example) and some pretty strong reactions to those misses – it is a good time to make sure people do remember the value of hedging.  If nothing else, it's a piece of mind that lets us ride out these dips without worry.  Also, of course, it's good to…
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McDonald’s Reports Aug. Same-Store Sales, Call Buyers Lovin’ It

 

Today’s tickers: MCD, INTC & JPM

MCD - McDonald's Corp. – Traders hungry for bullish options on McDonald’s Corp. purchased upside calls on the stock this morning, with shares in the world’s largest restaurant chain rising as much as 0.90% to $92.10 at the start of the session on better-than-expected August same-store sales growth in its Asia Pacific, Africa and Middle East region. Options players positioning for shares in MCD to extend gains during the next five weeks snapped up Oct. $92.5 and $95 calls. The Oct. $95 strike call is the most heavily traded at present, with around 3,700 contracts in play as of 12:15 p.m. in New York. It looks like most of the $95 calls were purchased for an average premium of $0.51 apiece, thus preparing buyers to profit at expiration next month should the price of the underlying rally another 3.7% to exceed the average breakeven price of $95.51. Bullish activity spread to longer-dated contracts expiring in December, where around 2,600 of the Dec. $95 strike calls were purchased for an average premium of $1.21 each. These contracts may be profitable at expiration if the Big Mac maker’s shares rally 4.5% to top $96.21, the highest since May. McDonald's is scheduled to report third-quarter earnings ahead of the opening bell on October 19th, the last session available to trade the October options before they expire.

INTC - Intel Corp. – Shares in the chip maker are on the mend today, up 1.3% at $23.57 as of 12:25 p.m. ET, reversing some of the declines suffered during the prior two trading sessions. A large bullish risk reversal initiated on INTC this morning suggests one big options market participant is positioning for further gains in the price of the underlying this year. It looks like the strategist sold around 25,000 puts at the Dec. $21 strike at a premium of $0.45 each in order to partially offset the…
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TGI Fed(s) – Promises, Promises

 

You made me promises promises

You knew you'd never keep

Promises promises

Why do I believe

All of your promises

You knew you'd never keep – Naked Eyes

Wow – what a party!  

The former Vice-Chairman of Goldman Sachs (Draghi) says everything is fixed and the global markets go flying – what's not to trust?  Would anyone form GS ever lie to us?  Would GS be involved in manipulating the Global Markets – of course not!  

Now that I've fulfilled my obligation to get my mother back unharmed – let's get real.  Draghi said the violent spike in bond yields in recent days was hampering "the functioning of the monetary policy transmission channels" – the EXACT expression used to justify each of the ECB's previous market interventions.  

Yields on Spanish two-year debt plunged 72 basis points to 5.47% in barely an hour, with comparable moves on Italian debt – easing the pressure before a string of debt auctions in Rome over coming days. The MIB index of stocks in Milan surged by 5.6%. Madrid's IBEX rose 6%, the biggest jump in two years, led by an explosive rise in bank shares.  Mr Draghi's comments came as Spain claimed backing from France and Germany for activation of the eurozone's rescue fund (EFSF) to buy Spanish bonds, though this would require calling the Bundestag's finance committee back from holiday for a vote. Action by the EFSF would provide "political cover" for the ECB to join the fray in a two-pronged attack.  "We're firing on all cylinders: that is what has ignited the markets," said Hans Redeker, currency chief at Morgan Stanley.

Joint statements from Madrid, Paris and Berlin said market turbulence "does not reflect the fundamentals of the Spanish economy, or the sustainability of its
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Will We Hold It Wednesday – NOW It’s May

SPY 5 MINUTEYesterday did not count.

Until the end of day, the volume was low and, as you can see from Dave Fry's SPY chart, the morning pump was mostly erased by the end of the day.  In fact, on the Russell and Nasdaq – it was entirely erased.  What a friggin' joke, yet no one will investigate it and few will even question it.  

As we often say at PSW – We don't care IF the game is rigged, as long as we know HOW the game is rigged and get to place our bets accordingly.  In my Morning Alert to Members at 10:05, my comment on the move up was: 

Not too many markets are open so super low-volume means we can pretty much ignore whatever's happening.  Some wild gyrations at the open already with AAPL popping $10 to goose the Nas and they are spiking us up and down at will on this low volume.   

At 12:02 we made our planned adjustments to our 4 active virtual portfolios, taking advantage of the big, bad spike to move to cheap June bear positions and cash out our long plays and just get generally more aggressively bearish at what we thought was going to be the top for the day.  The most aggressive move was made in our most aggressive, $25,000 Portfolio (pictured here from its 10am status BEFORE many changes were made), where we flipped our protective TNA hedge  from bullish to very bearish – shifting the balance of the portfolio much more bearish with a single move:  

TNA – $60s are now $4 so let's take that and run on 5 (1/2), as that's more than we paid for the spread and we'll ride the $63s half-covered with a stop on 5 at $3 (now $2.25).  Also, a stop on the 5 remaining $60s at $3, at which point we would reset the stop on the $63s, of course. 

Needless to say, that trade worked out huge already as the $60s all stopped out at a $3.50 average ($3,500), which is $500 more than our max potential gain on the spread and the $63 calls already finished the day at $1.10 ($1,100) for a net of $2,400 (so far) off our $1,450 entry on 4/26 – so up 65% in less than a week on the trade we used to…
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Whipsaw Wednesday – Dip Buying or Just Dips Buying?

SPY DAILYWas that it?

On February 24th I wrote "TGIF – Sell in March and Go Away?" and I laid out my case for why I thought we were going to fall off the table in March and we have, indeed, fallen right off the table right on schedule since then.  I said that Friday, that the post was intended as a bookend to my September 30th bottom call as I felt that we had captured all of the upside we were likely to see off the "good news" that Greece was "fixed" and the economy was "improving."  

I'm not going to say anything bad about the economy here, I'll let Michael Snyder do that with his "15 Potentially MASSIVE Threats to the US Economy over the next 12 Months" – I think he pretty much covers it!  8 trading days ago (2/24), we had two short trade ideas in our Morning Alert to Members, they were:

  • SQQQ April $13/17 bull call spread at .70, still .70 (even) 
  • DXD April $13/15 bull call spread at net .55, now .70 – up 27%

SPY WEEKLY In Member Chat that day, Exec asked if I was getting bearish and my response was:  

Bearish/Exec – Are you kidding, this is me painting a sunny picture! Give me a few drinks and I'll tell you how off the rails the Global Economy is right now… Do you know how much Kool Aid I have to consume not to scream short on every single stock I see. CAT $116, CMG $386, DIA $130, GMCR we already did at $70, IBM $200, KO $70, MA $415, MCD $100, MMM $88, MO $30, MON $80, MOS $59, OIH $45, PCLN $593 (did them too), QQQ $64, SPY $137, TM $85, USO $41.50 (got 'em), UTX $84, V $117, WYNN $119, XOM $87, XRT $59 (got 'em) – and that's just off my watch list of stock I like to buy when they're cheap! We are not just priced for perfection, we are priced for perfection plus a return to full employment a forgiveness of all debts without write-downs and inflation without rising interest – we are priced for Nirvana!

It's a big list but, of course, they are pretty much all winners now, with PCLN the notable exception (so far).  Later that day, during Member Chat, we
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Friday Finale – This is the End – But for Who?

SPY DAILYA day late and a point short on the S&P.  

Our senior index finished the day at 1,358.04, just 0.96 under our 10% line at 1,359.  Oddly enough, it never actually crossed the line that we had predicted would be the top of this run in April of 2009.  It's a simple 2% overshoot of the 100% run from the S&P bottom at 666.  

If the S&P can get over the line and hold it – we will be THRILLED to finally redraw our Big Chart but, if not, then this is just the blow-off top of the range, reeling in the suckers ahead of the big reversal that no one could have possibly seen coming (except this guy but he's like 100 and just got divorced, so he's bound to be in a bad mood).  

Is there anyone who was born SINCE radio who is willing to still be bearish?  As you can see from David Fry's chart, since December 19th, other than a few red days out of over 40 – it's been tough to be a bear.  This is what it was like in 1999, when the experienced market players would be well-hedged and missing the rally while some kid who works for him quits because he bet his student loan money on Yahoo and now drives a Porsche.   

Sure 9 months later the Porsche was repossessed and the kid was flipping burgers but WE WANT TO BE THAT KID – IT'S FUN TO BE THAT KID – until it isn't again.  The funny thing is, we only gave those dot com companies Millions when they IPO'd – now we give out Billions because, of course, this time is different, it's a new paradigm, this changes everything, you have to understand the new metrics, sock puppets rule….  

McDonald's was founded in 1940 by two brothers actually named McDonald.  Ray Krok bought the chain from them and created the World's greatest franchise which now has over 26,000 franchise operations and over 6,000 company stores employing about 1.7M people worldwide selling $24Bn worth of food a year with a $5Bn net profit.  Facebook has 3,200 people but they generate $1.2M in revenues per employee ($3.8Bn) and drops $1Bn to the bottom line.  Facebook's assets are mainly IP and those are about as valuable as MySpace's assets now
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Tuesday – Topping Out or Just Pinning the Fed?

Tough call today

The Dollar bounced off 79.75 this morning, nothing to crow about for Dollar bulls as the Euro remains just over the critical $1.30 mark and the Pound is solidly over $1.55 for the moment.  

You could say it's a bearish sign that the Dow and the NYSE stopped dead at our breakout levels but that's to be expected on a first attempt at breaking out – even if they have already attempted the same move back in late October, when the Dow was 5% lower in it's test and the NYSE was testing the same line (7,866).  

Our broadest market index is the one that's holding everyone back as what little volume there has been in this rally has been fairly narrowly focused on certain leaders.  Now a pessimist might say that this is a reflection of the blatant manipulation of the indexes in which certain Banksters place buys on stocks that have disproportionate positive effects on the junior indexes in order to fool retail traders into believing there is a rally while the Banksters drive the VIX down to multi-year lows, dump all their stocks on the bagholders and prepare to cash in by crashing the markets on a major event like tomorrow's FOMC Rate Decision which is, in fact, very unlikely to have any language specific to the QE3 that has been promised by the MSM since Thanksgiving.  

SPY DAILY An optimist would say – well, you can read almost any MSM site for that.  It's lonely at the top of the range when you are bearish, one by one the other bears capitulate and soon you are there all by yourself with your shorts – your lovely, lovely, cheap shorts!  The Dow shot up yesterday to just over the 12,749 breakout line we have as the tippy top of the range on our Big Chart so of course I called for DIA puts in Member Chat.  The DIA Feb $123 puts, which came in around .75 and finished the day not much higher at .78 after topping out at .95.  Ranges usually hold – if you're not going to have conviction at the very top of a range to short – when will you?  For one thing – you have a very good stop line to watch!

As noted by Dave Fry in his SPY chart, the bulls have engineered their golden cross…
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Will We Hold It Wednesday – Nasdaq 2,603 Edition

Watch the Nasdaq.

That's the index we need to catch up to the Dow now that the S&P is halfway to goal at 1,297 (from our Must Hold line at 1,235).  The Dow is in La La Land, led by MCD (up 31%), IBM (up 26%), PFE (up 24%), HD (up 20%) and KFT (up 20%) while this year's Dogs of the Dow are BAC (down 59%), AA (down 43%), HPQ (down 39%)  and JPM (down 22%).  

While the losers may seem to outweigh the winners, that's not how it works as the Dow is price-weighted so BAC dropping from $14 to $5.50 "only" costs the Dow about 68 points (roughly 8 points for each Dollar), IBMs rise from $145 to $185 added a whopping 320 points.

So a 26% rise in one component and a 59% drop in another nets out to a gain of 252 points!  At the beginning of the year, they had roughly the same market cap ($150Bn) but IBM has gained $70Bn and BAC has lost $100Bn which, of course, translates into a net gain of 2% on the entire Dow – BECAUSE IT IS THE STUPIDEST INDEX ON EARTH!  

Our Members, of course, know this.  I wrote "DJIA: The Most Useless, Overused Tool on the Planet" back in 2006, when GM was still part of the Dow so no need to rehash it all here other than to mention the fact that a 30-component index has made 5 substitutions in the 5 years since I wrote that article only serve to highlight how ridiculous it is to use the Dow to draw long-term conclusions.  The Dow is manipulated because it's easy to and Uncle Rupert sits with the other Masters of the Universe to decide how to use this headline tool to make things look as good as possible in the US markets.  

 

That's why CSCO and TRV replaced C and GM in June of 2009.  C was at $28.80 and is down a bit, GM went BK from $45 (which would have been a 360-point loss in the Dow) while CSCO was disappointing but essentially flat and TRV is up $20, adding another 160 points so a 520-point swing (5%) on those substitutions alone.  In September
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Phil's Favorites

Three reasons it's not 1929

 

Three reasons it’s not 1929

Courtesy of 

I could be wrong, but let me point out three things that I think about when I hear Great Depression analogies being made to the current crisis.

The first thing I think about is that the financial markets of the 1930’s were prehistoric. Yes, the Federal Reserve was in existence, but it was nowhere near as powerful and it hadn’t had any institutional memory (or history) to draw on. Its basic structure was patterned on the still-nascent central banks of various European countries thanks to the listening tour Senator Nelson Aldrich and others had made across the Continent. Fun fact: the US Sen...



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Biotech/COVID-19

5 reasons the coronavirus hit Italy so hard

 

5 reasons the coronavirus hit Italy so hard

A nursing home resident in Rome is moved to a hospital. Mauro Scrobogna/LaPresse via AP

Sara Belligoni, University of Central Florida

Italy is one of the nations worst hit by the global coronavirus pandemic. As a scholar in the field of security and emergency management who has studied and worked in Italy, I have determined that there are at least five major reasons why the country is suffering so much.

1. Lots of old people

Italians have the ...



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Zero Hedge

"What Is Really Essential"? In The US Golf And Guns, In France Wine And Pastries

Courtesy of ZeroHedge View original post here.

Among countless other unprecedented changes and transformation, the coronavirus pandemic has unveiled an odd divergence within global cultures: the definition of what's deemed "essential" for people across the world, and what things we really can't do without, even though we might not need most of them for survival.

As AP reports, in its attempt to slow the spread of the virus, authorities in many places are determining what shops and services can remain open. They'...



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Kimble Charting Solutions

Tech Testing 9-Year Support, With Fear Levels At 2009 Highs!

Courtesy of Chris Kimble

Is an important Tech Index sending a bullish message to investors? It is making an attempt!

Does that mean a low in this important sector is in play? Humbly it is too soon to say at this time!

This chart looks at the Nasdaq Composite Index over the past 25-years on a monthly basis.

The index has spent the majority of the past 9-years inside of rising channel (1), as it has created a series of higher lows and higher highs. It created bearish reversal patterns in January & February as it was kissing the underside of the top of the channel and...



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Insider Scoop

With Everybody Stuck At Home, Investor Conferences Are Going Virtual

Courtesy of Benzinga

With the world at a COVID-19-induced standstill, many conference organizers have either gone online (Benzinga is one of them) or had to cancel upcoming events altogether. There is no clear timetable on how much longer we will be in this state.

Publicly traded companies are already limited in wh...



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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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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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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.