Posts Tagged ‘NSM’

Contrarians Position for Medifast to Trim Losses

Today’s tickers: MED, AMD, NSM & AEM

MED - Medifast, Inc. – Shares in the maker of weight management products shed 12.0% this morning to touch down at an intra-session low of $22.19 following disappointing earnings from competitor NutriSystem, Inc. NTRI’s shares dropped 31.2% today to a fresh 52-week low of $13.90 post-earnings. Medifast’s earnings are just around the corner, with the report scheduled for release ahead of the opening bell on March 3, 2011. Despite the gloomy forecast out of NutriSystem, it looks like one investor is positioning for a more positive outcome from Medifast. The contrarian player appears to have purchased a debit call spread, buying 1,000 calls at the April $23 strike for an average premium of $2.19 each, and selling the same number of calls at an average premium of $0.99 apiece. The net cost of the bullish play amounts to $1.20 per contract and positions the trader to make money should MED’s shares bounce back up by around 9.0% to surpass the average breakeven point at $23.20 ahead of April expiration. Maximum potential profits of $1.80 per contract are available to the call-spreader if shares in Medifast rally 17.2% off today’s low of $22.19 to trade above $26.00 before the calls expire in April. The rise in demand for MED options helped lift options implied volatility on the stock 12.0% to 80.16% in early afternoon trade.

AMD - Advanced Micro Devices – A sizeable stock and options combination play on Advanced Micro Devices caught our eye this morning. It looks like one strategist initiated a delta neutral position on AMD in the July contract. Shares in the name are up 3.3% to arrive at $9.40 as of 12:50pm. The investor appears to have sold 319,000 shares of the underlying at a price of $9.34 each, and…
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Jobless Thursday – America’s Infrastructure Crisis

What a disaster!

Not only are our students failing to keep up with the rest of the World but America is close to getting a failing grade in Infrastructure.  That’s right, what was once the World’s mightiest and proudest economy, this once great nation of builders has been given an overall grade of D in the American Society of Civil Engineers report on our Infrastructure.

The 2009 Grades include: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).  Awful?  Shameful?  How about DANGEROUS?  Deadly even…

For one thing, The number of high hazard dams—dams that, should they fail, pose a significant risk to human life—has increased by more than 3,000 just since 2007, when there were "just" 1,000 dams at risk and 3,000 to pro actively maintain but the administration refused to fund the project, now the costs have tripled as the situation deteriorates but that’s nothing compared to what happens if just a few of them break completely.  1,819 dams are now in the "high hazard" category and, with the current budget, for every one damn that is reparied, two more become an emergency.  

In urban areas, roadway congestion tops 40 percent.  According to the report, decades of underfunding and inattention have jeopardized the ability of our nation’s infrastructure to support our economy and facilitate our way of life.  At risk of catastrophic failure besides the dams (including levees) are things like our drinking water, sewage systems, bridges, waterways, rail lines, airports, roadways (especially elevated ones) and, of course, our entire electrical grid.  Additionally, 7 Billion gallons of clean drinking water is lost every day through leaking pipes – that’s 23 gallons per citizen per day WASTED for want of $11Bn in repairs – don’t bother worrying about it, the last Administration wouldn’t fund it in 2001 or 2006 so why bother now – 10 Trillion gallons later? 

The ASCE calculates a 5-year $2.2Tn investment is needed to address the situation, that’s $500Bn (25%) more than it was 5-years ago, when they released their last report and nothing was done by the previous administration.  So, rather than having invested in America, putting people to work and improving EVERYONE’s way of life, we spent over $1Tn fighting a war, another $600Bn a year on our regular military operations and gave over $1Tn worth of taxe breaks…
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Three-Legged Bearish Tactician Targets iShares Dow Jones U.S. Real Estate Index ETF

Today’s tickers: IYR, NSM, IGT, GFRE, LNC, BHI, ONNN & HPQ

IYR – iShares Dow Jones U.S. Real Estate Index ETF – A three-legged bearish options combination play on the IYR, an exchange-traded fund designed to provide investment results that correspond to the price and yield performance of the Dow Jones U.S. Real Estate Index – an index created to measure the performance of the real estate sector of the U.S. equity market, indicates one big player is bracing for a pullback in shares of the ETF through the end of 2010. Shares of the fund went the way of the market this afternoon and rallied 1.05% to $50.71 with less than one hour remaining in the trading week. The investor sold roughly 10,000 calls at the December $55 strike at an average premium of $1.35 each, purchased about 10,000 puts at the December $50 strike for an average premium of $3.65 apiece, and shed 10,000 puts at the lower December $43 strike at an average premium of $1.43 a-pop. The net cost of the pessimistic play is reduced to $0.87 per contract. The transaction could be a hedge to protect the value of a large position in IYR shares. But, if the spread represents an outright bearish bet on the ETF, the investor is poised to profit should shares dip below the average breakeven price of $49.13 by December expiration. Maximum available profits in this scenario amount to $6.13 per contract if the fund’s shares plummet 15.2% from the current price to trade below $43.00 by expiration day.

NSM – National Semiconductor Corp. – Shares in semiconductor manufacturer, National Semiconductor Corp., earlier slipped 2.05% to touch a new 52-week low of $12.41, but the stock came roaring back to life in afternoon trading, rallying as much as 3.2% to an intraday high of $13.08. The significant shifts in the price of the underlying shares inspired investors to purchase both call and put options on the stock today. Options traders may also be gravitating toward NSM options ahead of the firm’s first-quarter earnings report scheduled for September 9, 2010. Investors heartened by the turn-around in shares purchased approximately 5,800 calls at the November $13 strike for an average premium of $0.85 apiece. Call buyers make money if National Semiconductor’s shares rally another 5.9% over today’s high of $13.08 to trade above the average breakeven price of $13.85 by expiration…
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Bye Bye Buy List!

Oh, I have tried!

I have tried to be bullish, I have tried to get enthusiastic about this rally but I have been reviewing these picks for a few days and looking at the market, the charts, the sentiment, reading the news and studying the fundamentals and I'm OUT!  Oh, I'll be back, we'll set up a new, aggressive $100K Virtual Portfolio next week for some fun shorter-terrm plays (still keeping the conservative one for the full year) to take full advantage of this insanity but it's going to be mainly cash through the end of the month as I do not trust this rally one bit and it will be so nice to head into the easter holiday with lots of cash on the sidelines

We hit a perfect entry on Feb 8th, in our last round, and the market is up almost 9% since that day and I'm not expecting another 9% in the next 6 weeks so it's a very good time to take a break.  We were able to roll and enjoy these trades since Christmas and we will be revisiting some, maybe even keeping a few but, on the whole, I want to do what I often counsel members to do, which is follow our simple two-step process to maximizing your profits in a market rally:

  • Step 1) Take Money
  • Step 2) Run

There – isn't that simple?  Keep in mind that we LOVE all of these stocks so we'll be back in them if they go on sale and, perhaps, even if they don't and the market looks stronger through April earnings.  Meanwhile, keep in mind that these are 6-week profits so 20% is A LOT for generally conservative plays.  Not much else to talk about – let's just see how many of these suckers are worth keeping (noted in green):

AET (12/21 – $34.04, 1/9 – $32.70, 1/31 – $29.97, 3/18 – $33.24) They could not have done better for us, staying right in range and giving us 4 excellent sales but health care is passing this weekend and that's too wild for us to stick with.  Our last batch is right on target:

  • Apr $33 calls sold for $2.40, now .40 – up 83%
  • Apr $30 puts sold for $1.50, now .02 - up 99%
  • 2012 $25/35 bull call


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Weekend Wipe Out – All the Way Back to Mid-November Lows!

Well I hate to say I told you so but

No wait, that's nonsense – what market prognosticator doesn't love to say "I told you so"?  Actually, it's kind of my job to tell you so and the reason I'm so popular is because, more often than not, when I tell you so, I tend to be right.   I'm not right all the time and my single biggest flaw is I am often right but sometimes way too early and timing is EVERYTHING in the markets.  It's not good enough to tell you what is going to happen (give things enough time and everything happens eventually, right Cramer?) - I need to get the period right as well so we can turn it into an actionable trading idea that makes money

As a fundamentalist, I didn't like the entire last 500 points of the rally.  I had predicted the market would finish the year at 10,200 way back when it was down at 8,650 when the idea was we'd have a Santa Clause rally to 20% (10,380) and then a 20% pullback of that run (346) into Jan earnings that would take us back to 10,034 so the entire run from 10,200 to 10,700 REALLY annoyed me.  It didn't annoy me just because it made me wrong – I'm wrong a lot and I'm old enough to have learned how to deal with it.  What annoyed me was the manipulation as, clearly, the fundamentals in no way, shape or form justified the additional 5% move up. 

I've gone on and on about how fake the move was and how manipulated the markets were and how artificial the support was and I think I've pulled out the Seinfeld "fake, Fake, FAKE" clip often enough now that I don't even have to do a link (but I love it, so I do) or explain how it's a metaphor for recent market activity so I'm not going to waste our valuable time here.  Let's just do a review of the recent action, which is my best way of preparing for the upcoming Members only post where I'll be charting out new levels and coming up with action plans for the week ahead. 

So don't read this if you can't stand to hear "I told you so" because this is the review post and I did tell you so!

When did
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The Buy List – Q1 2010 (Members Only)

 

Well we finally hit our levels!

Fundamentally, I still don't buy this rally but, technically, we could go up and up from here.  We discussed in chat yesterday how we may be in a pattern similar to 2003-7 where we came out of the dot com crash and 9/11, which took the market lower than it should have and then government stimulus took us higher than we should have been.  Sure it all ended badly but there was a really good ride up in between.  HOWERVER, 2004, which is about where we would be now, was a choppy and downtrending year.  That is not a problem for our buy/write strategy as long as we keep our heads and scale into our positions.

Obviously we can't rely on patterns to simply keep repeating themselves.  We could have another terrorist attack, we could have more stimulus or maybe both in our future but, until we see the patten broken, we can play for a similar move.  Our buy/write strategy is ideal for this as it's a conservative play that gives us 15-20% downside protection.  Combine this with our usual strategy to scale into positons along with some sensible disaster hedges and we can build a nice, bullish virtual portfolio for 2010.  Keep in mind we don't fear the upside with buy/writes as our "worst case" there is we get called away with a nice profit.  

I put up our latest Watch List on Dec 22nd, following through from our bullish lists of September 6thOctober 8th and Nov 24th.  These are the bullish plays that form the bulk of our virtual portfolios and that sometimes gets lost in our weekly short-term trading.  It was a lot like shooting fish in a barrel, picking winners since September (we had our last Buy List on July 11th our first since the bottom in March, which was followed by the more conservatively mixed $100K Virtual Portfolio that we used from April through July, when we were worried the market would be choppy (it was).  As always, our active lists are found under the Virtual Portfolio Tab near the top of our pages - always check there for recent updates.

We did…
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Brazilian ETF recoil has option traders on defensive

Today’s tickers: EWZ, VRSN, PFE, MSFT, Q, FXI & NSM

EWZ iShares MSCI Brazil Index ETF – Shares of the Brazil ETF have dipped by less than 1% to stand at $50.93 today. The ticker occupied prime real estate on our ‘most active by options volume’ market scanner after a large volume ratio put spread was established in the September contract. An investor looking for bearish movement on the stock purchased 15,000 puts at the September 40 strike price for a premium of 2.30 apiece spread against the sale of 30,000 puts at the September 30 strike for about 60 cents each. The net cost of the trade amounts to 1.10 and yields a maximum potential profit of 8.90 to the investor if shares were to fall all the way to $30.00 by expiration. Before the position comes good, Brazilian shares would need to decline by 23%. The trader begins to amass profits beginning at the breakeven point at $38.90.

VRSN VeriSign, Inc. – The provider of internet infrastructure services has experienced a share price rise of about 1% today to $24.48. VRSN appeared on our ‘hot by options volume’ market scanner after one investor established a large-volume ratio put spread in the September contract. Likely looking for downside protection on a long stock position, this trader purchased 25,000 puts at the September 25 strike price for 2.90 apiece and sold 50,000 puts at the lower September 20 strike for a premium of 95 cents per contract. The net cost of the transaction amounts to 1.00 to the investor and yields maximum potential gains to the downside of 4.00 should shares fall to $20.00 by expiration. The ratio spread represents some 80,000 contracts in play, trumping the existing open interest on the stock of just 64,919 lots.

PFE Pfizer, Inc. – The pharmaceuticals giant has slipped by more than 1.5% to $14.15 today, but attracted one bullish investor to populate the January 2011 contract. The January 15 strike price saw 50,000 calls picked up by one individual for a premium of 2.16 apiece. The long-call position requires that shares breach the breakeven point at $17.16 by expiration in order for the investor to begin to amass profits. The contracts have more than one and a half years until expiration and require that shares rally by at least 21% during that time period.

MSFT Microsoft Corp. – We know not why…
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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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Zero Hedge

Visualizing The West's Domination Of The Global Arms Market

Courtesy of ZeroHedge. View original post here.

Overall, arms sales increased in 2017, with total global sales nearing 400 billion dollars, marking a 2.5 percent increase from last year and the third year of continued growth for the industry.

But, as Statista's Sarah Feldman points out, U.S. arms companies still produce the most weapons worldwide.

...



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Kimble Charting Solutions

Dow Theory Concerns? Transportation Stocks Make New Lows

Courtesy of Chris Kimble.

The bull market is experiencing its first real test since the 2014/2015 stock market correction. Volatility is high and key sectors are heading lower.

One such sector is the Transportation Sector(NYSEARCA: IYT) and select stocks.

The age-old Dow Theory call for the Industrials and Transports to lead the market (and confirm each others moves). Currently, both are struggling. But the Dow Transports are on the precipice of a major breakdown. Looking at the chart below, you can see that the Transportation Sector ETF (IYT) is attempting to break down below its 12-month trading range and 9-year rising support line.

If the market doesn’t reverse higher soon, this break down will send a negative message to investors about the economy… and the broader stock market.

A move lower wou...



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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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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga.

  • Data on retail sales for November will be released at 8:30 a.m. ET.
  • Data on industrial production for November will be released at 9:15 a.m. ET.
  • The flash Composite Purchasing Managers' Index for December is schedule for release at 9:45 a.m. ET.
  • Data on business inventories for October will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the recent week is schedule for release at 1:00 p.m. ET.

Posted-In: Economic DataNews Economics ...



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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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