Posts Tagged ‘PGH’

Wonderful Weekly Wrap-Up

I love it when a plan comes together! 

Last week, I felt like I was going to have to call Animal Control to help me fight off the bears.  As I mentioned in last week's Wrap-Up, all 14 misses (out of 55 trade ideas for the week) we had were bullish plays that we were grabbing on the way down.  On Friday we went bullish on USO, SSO, DIA, TBT (well, we're always bullish on TBT), AET, ABX, Copper Futures and even poor BP.  Those followed up on bullish plays we had taken on Thursday on TSRA, USO, MEE, FCX, EEM, ERX and XOM.  We went into the weekend still bearish but we were excited about flipping back to bullish.  My closing comment in the Wrap-Up was: " I’m hoping for a blow-off spike down on Monday with heavy volume, hopefully followed by a recovery over the next few days" and, gosh darn it, wouldn't you know that's EXACTLY what we got.

I don't MAKE the markets do these things, I simply tell you what is going to happen and how you can make money on it…  Needless to say, we had a LOT of fun this week at PSW!   Last weekend, however, was such a bearish frenzy in the MSM that it was making our Members nervous and THAT I do not tolerate so I wrote : "The Worst-Case Scenario:  Getting Real With Global GDP!" to illustrate why I felt our bottoms would hold and I began a Top 20 Buy List on Sunday and boy did we get some fabulous entries this week! 

Monday Market Movement – Will We Survive?

As I said on Monday Morning: "I already stuck my neck out calling a bottom so now we're just waiting patiently."  We were disappointed to have not gotten a stronger statement from the G20 over the weekend but it was just the Finance Ministers, so we weren't expecting too much until the big boys meet at the end of the month.  While we were in a buying mood, I cautioned against getting too bullish until we took back our anticipated "weak bounce" levels, which were the orange lines on Monday's Multi-Chart:

I pointed out (on another Multi-Chart) that Europe was already gathering strength so we were pretty confident things would go our way but, as I said in the …
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Buy List – Time for a Fresh Batch? (Members Only)

I am one reluctant bull!

I am still trying to be bullish, I am trying to get enthusiastic about this rally and it's been 3 weeks since I went to mainly cash rather than leave the majority of our Buy List on the table.  The Dow was at 10,850 that day and I didn't think we'd see the top of 11,000 for more than a day but now we've been up here for 2 weeks and yesterday we had strong(ish) volume on a strong up day and I'm still having trouble believing it BUT – believe it we must as long as our upside levels hold.  

Those levels are now: Dow 11,000, S&P 1,200, Nas 2,500, NYSE 7,700 and Russell 720.

We had a nice, relaxing holiday but now we have hard work ahead as I think the investing environment is littered with land mines – ready to blow up in our face if we take any mis-steps.  This bull has horns and we were gored by daring to go bearish in our $100K Virtual Portfolio but our Buy List is all bull and, hopefully, no crap as we try to make safe plays out of the finest companies.  

Ideally, our Buy List plays are about finding bargains.  We may love AAPL, but they are not on sale.  Earning season will hopefully be a great time to do some bargain hunting so this list will be a work in progress but for today we're just going to review our remaining open plays from the last list and also I would like Members to please use the comment section on this post to suggest companies we should be looking at.  Who do you think is trading way too cheaply?  We especially love dividend payers, of course and I'll be looking for companies that service the top 10%, not the bottom 90% – who still look pretty screwed to me and, from yesterday's news, it seems like the top 10% is down to the top 8% but it doesn't seem to bother the markets so we won't dwell on the implications until we're below 5% and, of course, our goal is to be in the top 5% when it all hits the fan…

After having really good timing on our Feb 8th entries, March 18th seemed like a good time to take the money and run and we shut down 2/3 of our Buy List postions.  Let's do a
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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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$112,291 Virtual Portfolio Update, Week 16

Next week will be the last week for our very profitable virtual portfolio, that started with $100,000 on April 10th.

This virtual portfolio has already made 19% in 16 weeks and many members wanted to start a new one from scratch.  So, by popular demand, we will be restarting a brand new virtual portfolio the week after options expiration, also with $100,000 and also a hedged virtual portfolio but this time with the goal of drawing a monthly income.  I got this idea when I went down to Florida last week and spoke to many people who asked me about their investing accounts.  Many of these "safe" accounts had been cut in half or worse and the returns they were producing were coming in at 5% year – if that and people were counting on this money for their monthly expenses.  I spoke to many people with $1M in the bank who were living off $50,000 a year in interest and dividends!

Using options and good hedging strategies, we have been able to produce a return in our virtual portfolio of 19% in just 16 weeks (12% cash, 7% unrealized).  I'm not advocating someone take a whole $1M and shift it to stocks and options but, if you can make 20% on $200,000 while your other $800,000 makes a "safe" 5%, your annual income goes from $50,000 to $80,000 – that's a lot of early-bird specials!  I will, of course, be happy to answer any adjustment questions on this virtual portfolio anytime during chat but we will no longer be tracking it weekly or making new plays.  The goals of the new virtual portfolio will be similar and the new trade ideas can be applied whether you are looking to draw an income or just start building long-term set of holdings for reinvestment.

In the last $112,007 Virtual Portfolio Update, from July 28th, we remained bullish and it really paid off with another $2,117 in unrealized gains ($6,690 not included in above total) as we made a very well-timed bottom call the week before and ran with it.  We have haven't had to call an "audible" in two weeks, sticking to our plan as the market held up nicely.     

The first few weeks after you sell options are usually the worst and the rising VIX had boosted the premiums of the puts and calls we sold but none of that matters because we played a…
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Weekend Wrap-Up, Ripping Through the Top or Topping and About to Tip?

What a week this has been!

In last week's 600-Point Weekly Wrap-UP, I said it would take some spectacular earnings results next week to keep the rally going and it seems like we got them this week as roughly 85% of the companies reporting this week beat expectations with 42 of this week's reporting companies guiding up and only 18 guiding down.  While people like Richard Bernstein may make very good arguments for why we shouldn't focus too much on quarterly earnings surprises, I have to say I am somewhat swayed by the preponderance of evidence we've gotten this week that, by and large, the vast majority of our companies are weathering the storm far better than analysts have expected.  

"It's pretty amazing what passes for good news these days," remarks Barry Ritholtz on his blog, The Big Picture (www.ritholtz.com.) "Beating dramatically lowered earnings forecasts on cost-cutting and layoffs — rather than top-line growth — seems to be the order of the day.  The irony is that the Wall Street analyst community overestimated earnings at the top of the cycle — pure extrapolation of trend to infinity. They seem to be doing the same thing now, only extrapolating falling earnings to zero. What that produces is not true upside surprises, but merely jumping over a dramatically lowered bar," he says. 

It's interesting Barry says this now because it sounded familiar and I went back to my May 2nd Weekly Wrap-Up, where the sentiment was very similar and I said at the time: "With 2/3 of the S&P 500 weighing in, earnings have been 70% positive.  I had warned earlier in the week that we are only beating a very low bar but we are beating nonetheless.  As you can see from the above chart, even if we do keep moving up, we are heading into some very serious overhead resistance that may not prove futile this time.  With the added pressure of the old "sell in May, go away" adage – there will be a lot of obstacles to overcome this week and next so we will remain on guard but we have also trained ourselves not to think and simply go with the flow, letting our levels guide us and, so far, our levels keep saying yes – despite our common sense
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Wild Weekly Wrap-Up

What a wild week that was!

We got such a good sell-off last Friday that we went 1/2 covered into the weekend on our DIA puts (a little bearish) but we had already cleaned up on quick short plays on the Dow and USO and we were very much in cash but still making bullish plays at the time.  I did a 3-part series on dividend-paying stocks over the weekend, elaborating on the 21 dividend payers we picked that Tuesday along with our $104,340 Virtual Portfolio (used to be $100,000) so we had no shortage of bullish ideas but it didn't take us long this week to turn pretty bearish.

Last Friday morning (22nd), ahead of the holiday weekend, with the Dow at 8,323, I sent out an early alert to members saying: "I’d go long on the Dow here but frankly I’m just not in the mood today.  Still full covered on long DIA puts  and still in the DDMs but just hanging out and watching today since you can’t take the action seriously anyway."  Our plays that day ran the gamut:  We sold BAC July $10 puts for $1 (now .66), took a TBT spread that has been a wild ride but right back where we started and an ICE bull call spread ($90/$100, selling $90 puts $2.33, now .57) that is right on track.  All that came before 11:33 on Friday, where I rightly called a top at 8,342.  We made nice profits on DIA puts and took an EXM and T hedges that are doing well.  One of our best plays on Friday was the USO $32 puts at .80 we took into the weekend, those cashed out Monday morning at $1.05 (up 44%) – those USO trades were followed through in detail in our Members Only post: "Stupid Options Tricks - The Salvage Play."

As I mentioned, we have been mainly in cash for over 2 weeks now so mainly we're just taking small opportunities and having fun while we wait for the market to break one way or the other.  One article I wrote over the holiday weekend was a timely update to "How To Vacation-Proof Your Virtual Portfolio," something anyone not in cash needs to take under strong advisement and DO NOT miss the very generous free video lesson from Sage's Market…
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Hedging Your Way To Healthy Dividends – Part 3

We're going to go out with a bang here and give you a 3-for-1 in this final post on the issue.

In Part 1, we discussed the idea of going after former dividend payers who may bounce back while creating an artifical dividend through option hedging.  In Part 2 we looked at using the buy/write strategy to give ourselves a nice discount on the stock, giving us a 30% hedge on the stock on top of the dividends.  Today we will look at a couple of ways to play the safer bets and how to simply and effectively boost your dividend yield while also protecting your investment.

In Tuesday's post we had 21 dividend payers divided into 3 categories.  We'll look at what we consider a "pretty safe" dividend payer, PGH, who pay a MONTHLY dividend of about 8 cents on a $8.11 stock (12%) as well as our long-time favorite, KMP who pay about $1 per quarter and our Blue-Chip selection will be CAT, who have a 4.9% dividend and are trading at a nice, cheap $34.31.

As we have 3 trades here I'm not going to go too heavily into the merits of each one.  Suffice to say we like them at these prices and we like the option hedges we can put to work on the postions… 

PGH is a stock we went crazy for back in March, when they were under $5 but that was when they were in the category of stocks where people felt the dividend was in jeopardy.  It didn't take much for them to fly back to $8.11 but, through the magic of hedging, we can knock that price back to an entry price of $5.29 by selling the Jan $7.50 puts and calls.  As always, our major risk is that the stock falls below $7.50 and another round of shares are put to us at that price on Jan 15th.  That would create an average entry of $6.40, which is 21% below the current price.  Should we get called away as $7.50, that would be a $2.21 gain on cash so 42% PLUS 7 months worth of dividends, perhaps another .56.

Sticking with our $5,000 per position maximum risk, we can make the play the following way:

  • Buying 400 Shares at $8.11 ($3,244)
  • Selling 4 Jan $7.50


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Zero Hedge

Apple To Shift Some AirPod Production To Vietnam From China As Exodus Continues

Courtesy of ZeroHedge. View original post here.

At this point, the trade war-inspired manufacturing exodus out of mainland China as companies like Apple (and, more importantly, suppliers like Foxconn), Nintendo, HP, Dell a...



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Phil's Favorites

Opposite of Conventional Wisdom

 

Opposite of Conventional Wisdom

Courtesy of 

There was an article in the New York Times that highlighted the reversal of previous findings in medicine.

Of more than 3,000 studies published from 2003 through 2017 in JAMA and the Lancet…more than one of 10 amounted to a “medical reversal”: ...



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Kimble Charting Solutions

U.S. & Euro Financials Lagging Big Time! Should Stock Bulls Be Concerned?

Courtesy of Chris Kimble.

Historically its been positive to see Financials doing well at the same time the broad market is pushing higher! If financial stocks are lagging bit time, should stock bulls be concerned?

This chart compares banks and in the U.S. (XLF) & Europe (EUFN) to the S&P 500 over the past 18-months.

Currently, XLF is lagging the S&P by more than 11...



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Insider Scoop

Earnings Scheduled For July 16, 2019

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Goldman Sachs Group Inc (NYSE: GS) is projected to report quarterly earnings at $5.00 per share on revenue of $9.13 billion.
  • Domino's Pizza, Inc. (NYSE: DPZ) is expected to report quarterly earnings at $2.02 per share on revenue of $836.92 million.
  • JPMorgan Chase & Co. ...


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Digital Currencies

Bitcoin Breaks Back Below $10k, Crypto-Crash Accelerates As Asia Opens

Courtesy of ZeroHedge. View original post here.

Update 2010ET: Having briefly stabilized after this morning's weakness, cryptos are tumbling once again as Asian markets open.

Bitcoin has broken below $10,000 again...

*  *  *

While all eyes are on Bitcoin as it slides back towards $10,000, the real mover in the last 12 hours has been Ethereum after...



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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

...

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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker.

Charts show us the golden brick road to high prices.

GLD Gann Angle has been working since 2016. Higher prices are expected. Who would say anything different, and why and how?

Click for popup. Clear your browser cache if image is not showing.



The GLD very wide channel shows us the way.
- Conservative: Tag the 10 year rally starting in 2001 to 2019 and it forecasts $750 GLD (or $7500 USD Gold Futures) in 10 years.
- Aggressive: Tag the 5 year rally starting in 1976 to 2019  and it forecasts $750 GLD (or $7500 USD Gold Futures) in 5 years.

Click for popup. Clear your browser cache if ima...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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