Posts Tagged ‘MMR’

Testy Tuesday – How Many Times Will You Fall for the Same Thing?

Isn't this exciting!

The pre-markets are up 1% after a long weekend.  That hasn't happened since – two weeks ago!  Of course last Tuesday, we were jammed up as well and the Tuesday after Christmas, we were jammed up as well but THIS TIME – we're REALLY feeling it, right?  

The funniest thing is the way they have dozens of idiots saying all sorts of ridiculous things on CNBC and not one of them mentions even the vaguest hint of deja vu in what has been the most consistent pattern of late 2011, early 2012.

On this Dollar chart from Scott Pluschau, you can see the dives that are occasionally taken to goose the markets and we have another one this morning with the Dollar down 1%, making the 1% pop in the futures slightly less impressive when taken in context.  

This time may be different because, according to Friday's Legacy Commitments of Traders Report released by the CTFC, Commercial Traders are now net short on the Dollar to the tune of 59,023 to just 6,061 longs – about a 10:1 ratio that is EXTREME to say the least.  Non-Reportable, Non-Commercial Traders (ie. Speculators), on the other hand, are almost 10:1 the other way with 9,765 long contracts and just 1,390 shorts.  Reportable Non-Commercial Traders (Hedge Funds) fill out the rest of the longs with 52,644 long contracts against just 8,057 shorts.  

To some extent, hedge funds are also speculators and usually you would assume their bets are covered but that's kind of hard to see with a 7:1 long/short ratio.  Keep in mind that Commercial Traders are institutions with business reasons to hedge – they are not going to be flip-flopping their positions so they will NOT be buying Dollars just because they get cheaper.  So, if it all hits the fan and the Funds shift to short – we could get quite a tidal-wave of Dollar selling.

That's an odd sort of positions for the speculating class to be taking (super-long on the Dollar) considering the possibility of a highly dilutive quantitative event (QE3) in the very near future.   This is why we can't be gung-ho bearish – tempting though it may be and this is why every little rumor of Europe being "fixed" sends the Dollar flying down – there are no buyers – only nervous long Dollar holders.  

As you…
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Apollo Calls Remain Active on Mixed Views

Today’s tickers: APOL, ERTS, MMR, BAC & RIG

APOL – Apollo Group – A second day of gains for the online education company has shares touching $50 this morning. The start of July saw the company reach its 52-week low at $42.41. Option trading has centered on call options at the August $50 and $55 strikes but the picture is mixed. At the higher of the two strikes where only about 1,000 open positions exist, a chunk of 5,700 call options traded to the bid of 55 cents leading us to believe that this investor is raising his hand over the likelihood of exponential gains for the stock. This investor has either recently bought the stock in which case is writing a covered call, or is simply skeptical of a further 10% gain in Apollo’s share price from here. Buyers also showed up at the $50 strike expiring next month where buying rights to buy shares jumped from 13 cents to 56 cents. Call volume at the strike of almost 2,000 lots easily tops the prevailing open interest of 1,400 contracts.

ERTS – Electronic Arts – Despite a reduction in one the earnings projection from on analyst today, shares in the video gamer are higher at $14.91 possibly on account a groundswell of bullish call option activity. Investors awaiting an August 4 earnings report have spent premiums of around 40 cents to lock into bullish expectations in the event the company pulls off a decent report or perhaps a new title release in a dull climate for consumer demand. Option traders flocked to the August $16 strike, which currently shows odds of successfully landing in-the-money by expiration of one-in-three. Shares opened lower before today’s rally as call activity hit the screens. Options implied volatility has been on the rise of late and is again higher today by around 10% at 47%. That would indicate rising uncertainty surrounding prospects for the share price and is typical ahead of earnings.

MMR – McMoRan Exploration Co. – Investors didn’t stick around to ask many questions following the seventh consecutive quarterly loss at this oil and gas explorer. McMoRan specializes in ultra-deepwater exploration in search of oil and gas, which of course is not the most popular of investments targets following the Gulf of Mexico spill in April. McMoRan emphasized that it doesn’t operate in this segment but does operate in a high-risk operation…
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Goldman Sachs Bull Initiates Big Put Credit Spread

Today’s tickers: GS, NLC, TEX & MMR

GS – Goldman Sachs Group, Inc. – A large-volume credit put spread enacted on Goldman Sachs Group, Inc. in the first half of the trading session indicates one big options player expects the investment banking firm’s shares to rebound sharply ahead of May expiration. Goldman’s shares are up 3.25% to $149.92 as of 12:35 pm (ET). The investor responsible for the credit spread sold 18,250 deeply in-the-money puts at the May $170 strike for a premium of $21.95 apiece, and purchased the same number of puts at the May $120 strike for $0.63 each. The bullish options player keeps the hefty net credit of $21.32 per contract if shares of the underlying stock surge 13.33% from the current price to exceed $170.00 by expiration day. The short stance taken in May $170 strike put options implies the investor is willing to bear the risk that GS shares settle below $170.00 at expiration, and is therefore prepared to have shares of the underlying stock put to him at an effective price of $148.68 each in the event the put contracts land in-the-money at expiration. The overall reading of options implied volatility on the stock is down 13% to 44.45% as of 12:45 pm (ET).

NLC – Nalco Holding Co. – Shares of the global provider of integrated water treatment and process improvement services, chemicals and equipment programs jumped 18.27% earlier in the trading day to a new 52-week – and intraday – high of $29.25 on news the firm is ramping up production of a chemical to manage the spreading oil slick in the Gulf of Mexico. Bullish options investors rejoiced in Nalco’s share price rally by purchasing call options on the stock. Near-term optimists picked up 1,300 calls at the May $30 strike for an average premium of $1.00 apiece. Bullish sentiment spread to the June $30 strike where 1,400 call options were purchased for an average premium of $1.29 each. June contract call-buyers stand prepared to amass profits should shares of the underlying stock rally 14.75% over the current price ($27.27 as of 12:55 pm (ET)) to surpass the average breakeven point at $31.29 by June expiration day. The surge in investor demand for options on the stock combined with the massive rally in the price of the underlying shares lifted Nalco’s overall reading of options implied volatility 116.1% to 61.73% just…
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Testy Tuesday – Have the Markets Become Comfortably Numb?

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

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

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

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

As Nicholas Santiago points out on In The Money Stocks,   "January is usually a very high volume month, yet it has started off the New Year even lighter than the last two months of 2009.  Light volume markets are very difficult to
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Investor Initiates Volatility Play on Alcoa Ahead of Earnings

Today’s tickers: AA, GLD, MGM, NXY, INTC, NDAQ, ANDS, F, EEM, MMR & MELI

AA – Alcoa, Inc. – A short straddle play on the largest U.S. producer of aluminum today implies one investor anticipates Alcoa’s shares will remain range-bound through January’s expiration on Friday. Alcoa’s shares appreciated 1% to a new 52-week high of $17.20 (as of 12:40 pm EDT) during the session. According to one Bloomberg article, the firm may report fourth-quarter profits of $0.06 per share today. The sold straddle strategy also indicates the trader expects lower volatility in the price per share. Perhaps this individual is taking advantage of the typical drop in option implied volatility, which tends to accompany earnings announcements. The investor sold 10,000 calls at the January $17.50 strike for a premium of $0.59 apiece, and sold 10,000 puts at the same strike for about $0.69 each. The gross premium pocketed on the trade amounts to $1.28 per contract. The full $1.28 premium is safe in the investor’s wallet if the contracts expire worthless at a share price of $17.50 on Friday. The short call and put positions established today leave the investor vulnerable to potential losses in the event that Alcoa’s shares swing outside of the breakeven boundaries. Losses accrue if shares edge beneath the lower breakeven price of $16.22, or if shares rise above the upper breakeven point at $18.78.

GLD – SPDR Gold Trust ETF – Shares of the exchange-traded fund, which mirrors the price of gold bullion, may be up more than 1.25% to $112.82 today, but option traders populated various contracts with bearish strategies. A hefty put spread appeared in the June contract. The transaction involved the purchase of 17,000 puts at the June $105 strike for a premium of $3.50 each, marked against the sale of 17,000 puts at the lower June $95 strike for roughly $0.52 apiece. The net cost of the pessimistic play amounts to $2.98 per contract. If the investor is holding a long position in GLD shares, the spread provides downside protection in case shares slip beneath the breakeven price of $102.02, by expiration in June. Additional bearish indications appeared in the September contract. One trader initiated a risk reversal by selling 5,000 calls at the September $130 strike for $4.55 each, spread against the purchase of 5,000 puts at the lower September $100 strike for $3.60 apiece. GLD’s shares must trade beneath…
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Bulls singing Yahoo! in tune

Today’s tickers: YHOO, MMR, FXI, CI, HOG, KFT, NUAN & VMC

YHOO Yahoo!, Inc. – Shares have rallied by more than 2% to $14.32 amid news that the company is seeking buyers for its HotJobs employment website and has plans to cut some 200 to 500 jobs. Perhaps investor confidence has been bolstered by the past few months with CEO Carol Bartz at the helm as the stock has risen about 29% from its January 2009 low of around $11.03 up to today’s price. Option investors were seen taking bullish stances on the stock in the May and October contracts. At the May 15 strike price 26,600 calls were purchased for an average premium of 77 cents apiece. Shares would need to rise by another 10% in order to breach the breakeven point on the trade at $15.77 by expiration in May. Further along, the October 12 strike price witnessed the sale of 2,100 puts for a premium of 1.30 each. Some traders were showing caution in the May contract by purchasing 4,500 puts at the May 14 strike price for 99 cents should shares experience a decline in the near future. These put options would begin to provide downside protection or profits beginning at the breakeven point to the downside at $13.01. Option implied volatility on Yahoo! is up sharply today to 74% from yesterday’s reading of 67%.

MMR McMoRan Exploration Co. – Shares of the oil and natural gas company have declined slightly by less than 1% today to stand at $5.22. Despite the fall in share price, one investor does not see shares falling much further as he sold more than 14,000 puts at the May 5.0 strike price for a premium of 50 cents apiece. There is currently no open interest at the May 5.0 strike, and thus this trader accepts the 50 cent premium in exchange for bearing the risk that shares fall beneath the breakeven point to the downside at $4.50. Should shares plummet through the breakeven point, the investor would face increasing losses in proportion with declines in the stock. The puts traded today represent nearly 40% of the existing open interest on the stock of 38,000 contracts. While we do not know the exact motivation for the trade, we do know that shares need only decline by 13% from the current price for this investor to face losses.

FXI iShares FTSE/Xinhua China 25
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Zero Hedge

China Growth Slows To 29 Year Low In 2019 Despite Q4 Rebound

Courtesy of ZeroHedge View original post here.

With phase-one talks completed in October (and signed this week), tonight's Q4 GDP and December smorgasbord of data is being keenly watched by the market for any signs that China's massive credit stimulus has actually done any good at all.

Ahead of tonight's key China data dump, State Grid, China's largest utility company, has warned the rate of economic growth in the country could plunge to 4% within the next four years, according to internal forecasts.

"We were upbeat about China...



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Phil's Favorites

Russian government resignation: what's just happened and what's in store for Putin beyond 2024?

 

Russian government resignation: what's just happened and what's in store for Putin beyond 2024?

Courtesy of Graeme Gill, University of Sydney

News came from Moscow overnight that the Russian government had resigned, followed by the announcement that Putin would be recommending the current prime minister Dmitry Medvedev be replaced by the head of the tax office, Mikhail Mishustin.

Why has the government resigned, and what does it mean for the future?

Prior to the government’s resignation, President Vladimir Putin announced a series of proposed changes to the constitution to be placed before the people in a future referendum. I...



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Kimble Charting Solutions

Tesla About To Run Out Of Energy Here? Short-Term Peak Possible?

Courtesy of Chris Kimble

Tesla (TSLA) has been screaming higher of late, as very impressive gains have taken place.

Is Tesla about to run out of energy/take a break/experience some selling pressure? A unique price setup is in play, that bulls might want want to be aware of.

This chart applies Fibonacci to the 2016 lows and 2017 highs at each (1). The impressive rally of late has it testing its 161% extension level, based upon those price points.

At the same time, it is hitting its 161% extension level, it finds itself at the top of a 7-year rising channel, with momentum hitting the highest ...



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Insider Scoop

7 Basic Materials Stocks Moving In Wednesday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Mechel, Inc. (NYSE: MTL) shares surged 5.5% to $3.06 during Wednesday's pre-market session.
  • DRDGold, Inc. (NYSE: DRD) stock surged 2.8% to $6.09.
  • Yamana Gold, Inc. (NYSE: AUY) shares rose 1.5% to $3.74.
Losers
  • Harmony Gold Mining Co, Inc. (NYSE: HMY) shares decreased by 1.1% to $3.52 during Wednesday's pre-market session.
  • ...


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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The new year of 2020 has gold is poised to break out higher. Why is gold going higher? Maybe the FED's economists can explain .... or not.

Maybe these could be on the list:

- FED repo hundreds of billions a day.
- ECB made up tools to keep the European banks solvent.
- A sugar high stock market with Apple Inc and Microsoft looking like Bitcoin 2017.
- The US bond market is NOT confirming a strong stock market.
- Corporate profits have flat lined for 3 years while stocks soared each year.
- Knowing an US election year needs stimulus, and a lower US dollar is a first choice.
- China deal, will have a currency element to make it easier to do business. Lower US dollar.



Gold Gann Angle ...

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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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The Technical Traders

Is The Energy Sector Setting Up Another Great Entry?

Courtesy of Technical Traders

Another wild week for oil traders with missiles flying and huge overnight price swings in crude. As we recently pointed out within our current Oil research article, Oil and the Energy sector may be setting up for another great trade.  We recently commented on how the supply/demand situation for oil has changed over the past 20+ years. 

With US oil production near highs and a sh...



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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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Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? How did it gain so much influence? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, ...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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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:

 

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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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