Posts Tagged ‘UGL’

Wild Weekly Wrap-Up – The Madness of the Markets (Part 1)

Where do I even begin to go over this week?

I think, to set the proper tone, let's look at my Thursday morning Alert to Members where I said: "Get out, Get Out, GET OUT of the short-term short-side plays if we get back over the 200 dmas.  Take the money and RUN.  CASH OUT THE SHORT SIDE.  Is that clear?  We may not hold these lines but that’s why we have October Disaster Hedges, the shorter-term downside plays are huge winners and should be cashed here – we’ll find something else to short if we fall off this support level.   200 dmas need to be held and those are: Dow 10,250 (8,650 is next major support), S&P 1,100 (900), Nasdaq 2,225 (not there yet!  1,800), NYSE 7,100 (5,500) and Russell 630 (still above!  500)." 

We never did hold those levels but, as I mentioned in Friday morning's post, I thought the end of day sell-off on Thursday was a bit forced, and, in my first Alert of Friday morning I said: "TAKE THOSE SHORT PROFITS OFF THE TABLE!"  Now, I am not prone to making statements in all caps in Member Chat - almost never is about how often so this was a pretty important statement.  Before that Alert, right at 9:42, I had already called for the SPY $105 calls at $2.45 as our first trade of the day.  Those calls finished at $4.11, up 67% for the day so a good start to our expiration day!

A good start and our other day trades did very nicely as well:

  • FXI June $39 calls at .98, now $1.28 - up 30%
  • DIA May $102 calls at .13, out at .45 – up 246%
  • DIA May $101 calls at .95, out at .80 - down 16%
  • DIA May $101 calls at .10, out at .80 – up 700%

Of course we followed our strategies and took 1/2 the DIA's off the table at a double so the other half was a free ride (we like to gamble but we're not crazy!) but the FXI was the only "keeper" for the day, we'll see if that was a good idea on Monday.  We also took (as I said we would in the morning post) a number of well-hedged, bullish plays on BA (from the post),
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Weekend Reading – Now What?

We had a totally exciting week last week!

I was busy this weekend so no Wrap-Up but I did write about 5 pages of commentary under Sage's $1,000,000 Virtual Portfolio article regarding virtual portfolio allocations and scaling strategies - all Members should read that!   We were discussing our Disaster Hedges as well which are all well in the money but hardly a double in the bunch so far, which is actually fantastic news if you haven't entered them yet as you can enter these plays now and still do great if EITHER the market continues lower OR the VIX calms down since it's the high VIX that is keeping us from making big money.  These are October hedges so no one expects them to pay off this early but the fact that you can still get in them even after this dip is a nice break if you intend to start getting bullish and want hedges

We took shorter-term hedges for more aggressive traders during the last week of April and those, of course, are up very nicely like: 

  • EDZ June $38/44 bull call spread at $2.80, now $3.50 - up 25%
  • EDZ June $35 puts sold for at $1.25, now .70 - up 44% (pair trade)
  • FAZ July $12/16 bull call spread at $1.10, now $1.35 - up 18%
  • FAZ July $10 puts sold for .70, now .50 – up  28%
  • IYR May $52 puts at $1.30 (fell to .79), now $2 - up 54%
  • OIH May $131 calls sold for $3.45, now .05 – up 98%
  • OIH May $131 calls sold for $3.90, now 05 – up 99%
  • QID May $16 calls at .32 (fell to .27), now $1.27 – up 296%
  • QID May $15 puts sold for .32 (rose to .37), now .02 - up 94% (pair trade)
  • QID June $14/16 bull call spread at $1.15, now $1.50 – up 30%
  • TBT Sept $43 puts sold for $1.50, now $3.90 – down 160%
  • TBT Sept $43/48 bull call spread at $2.60, now $1.55 – down 36%
  • TZA June $6 puts sold for .70 (rose to .94), now .74 - down 5%
  • UGL Oct $49/54 bull call spread at $2, now $2.50 – up 25%
  • GLD March $90 puts sold for $1.20, now $1.40 - down 17%


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6-Point Weekly Wrap-Up

Wheeee – the S&P is up 6 points this week! 

I know, I can hardly contain my own excitement either.  It almost makes my cash-out decision of the 19th (where we did open at 1,166) seem silly what with us missing a 6-point (0.5%) rally this week and all..  Of course, you have to look at the bigger picture like the year-to-date, which has us up a whopping 34 points since January 4th although, to be fair, 18 of those 34 points were gained by Jan 19th, then we had that sell-off thing and THEN we had a nice rally, all the way back to 16 points over the Jan 19th high.  See, I'm not early with my top call – I'm 2 months late!  We could have taken a vacation from Jan 19th to today and missed very little upside action

We don't cash out just because we're at a top.  Hell, we love playing tops, bottoms, middles – whatever…  We cash out when it's no fun to play and, as many, many members commented this week – it's much less fun to play when the market turns toppy and churny like it is now.  My cash out call was for a Market Mental Health Break ahead of earnings season and we did have a very nice, relaxing week just hanging out in Member Chat and, yes, making the occasional play but it's more like when you go to the track and toss a couple of bucks on a race to keep it interesting – and that makes it fun!

Monday Medical Miracle – Health Care Finally Passes

We passed the Health Care Bill on Sunday and, instead of ending the Universe as promised by Republicans and Tea Party enthusiasts alike, it actually sparked a huge dollar rally that gave us a full 2.5% run for the week, closing at a year high of 81.60.  We were thrilled as we had taken gold shorts and SCO (ultra-short oil) longs the week before, when oil was testing $83 a barrel – now back at $80 on the nose to close out this week.    

Seven banks were shut down by the FDIC last weekend (and 4 more bit the dust last night), Greece was still up in the air, TIF…
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Thrilling Thursday Morning – Greece and Dubai “Fixed”

Wow, we got a two-fer today! 

In a stunning turn-around, Chancellor Merkel laid out her terms for an aid package for debt-laden Greece, saying she supports loans from the International Monetary Fund and European governments as a last resort if default looms.  “A good European is not necessarily one who rushes to assist,” Merkel told German lawmakers in Berlin today. “A good European is one who abides by the European treaties and national law and thus sees to it that the euro zone’s stability isn’t harmed. That’s our guidance for all decisions today and tomorrow, and also for the future.”   

Isn’t that great?  It’s just like when you have to borrow money from a relative and part of the penalty is you have to listen to them lecture you on responsibility etc…  Of course, Merkel needs to make it painful because Portugal, Spain, Ireland and Turkey are watching the proceedings very closely but THIS crisis is, for now, off the table as ECB President Jean-Claude Trichet took some pressure off Greece today by extending the bank’s emergency lending rules, saying its bonds won’t be cut off from ECB refinancing operations next year.  Adding even more boost to the market, now that Goldman Sachs has stopped out their sheeple on long Euro bets, their analysts tell us today that the IMF may be giving Greece $27Bn in aid, helping to boost the Euro. 

Greek bonds rallied, sending the 10-year yield down 4 basis points to 6.32 percent, 321 basis points above comparable German debt. That extra borrowing cost has risen from 273 basis points on Feb. 11 when the EU vowed “determined and coordinated action” to stanch the crisis.  Greece still needs to borrow $13Bn in the next month but it is the rate at which they have to borrow that’s been the issue.  “The German strategy for the next couple of months is very simple: provide just enough positive rhetoric that investors continue to purchase Greek bonds,” said Peter Zeihan, an analyst at Stratfor, a geopolitical risk consultancy in Austin, Texas. “On the flip side, they want to make sure via rhetoric that there’s just enough doubt that the markets demand a much higher spread than the Greeks are hoping for. The Germans want to make very sure that the Greeks are punished.”

At the same time as Greece is being supported in Europe, Dubai promises to support Dubai World’s remaining $9.5Bn
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Which Way Wednesday?

Are we at the top of our range or about to break higher?

Our lower breakout on the Dow has been 10,250 and that has held up very well for the past few weeks so we have to respect that but, at the same time, we seem very overbought and just needing some sort of correction to help us confirm the bottom of the channel is still supporting us (see Fallond chart).  The other levels we were looking for in Monday's post were: S&P 1,100 (check), Nasdaq 2,187 (2,175), NYSE 7,200 (7,212) and Russell 600 (589). 

As I said on Monday: "If we don’t get 3 of 5 of our indexes over, then there’s not going to be anything to get bullish about."  Unfortunately, we didn't like the way we got there yesterday so we stayed bearish (60%) into the close but we sure are ready to run with the bulls by slapping on a couple of DIA covers and using 10,500 as our on/off switch to play the upside (which should coincide with the Nas and Rut breakouts). 

As I noted to Members in yesterday's 9:43 Alert, our prior market tops were Dow 10,495, S&P 1,113, Nas 2,205, NYSE 7,266 and Russell 605 so there is no excuse for any of our indexes not to make the grade if we're really heading higher.  Today's fly in the ointment may be oil inventories at 10:30, as holiday driving and flying numbers were not that great so the anticipated drawdown of about 2M barrels may turn out to be a build, especially in gasoline as many families had subdued Thanksgivings at home this year (thankful to be employed, thankful to have 70% of their IRA left, thankful their house only lost 20% of it's value, thankful gas is still under $3…), which does not bode well for Christmas either. 

Fundamentally, we think the economy still has serious issues and that the market is delusional at these levels but we don't fight the Fed or the big technicals so IF we do make our levels, THEN we will be some very reluctant bulls but bulls we will be

I have, for quite some time, been saying this is very much like 1999 and we do expect a big sell-off in the…
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Weak Dollar Wednesday – Charging More for Less

Over $1.50 for the Euro this morning!

The Pound ran up to $1.675 and, as soon as the Nikkei closed (up 40 points), the dollar dove to just 87.5 Yen.  That sent gold flying up to $1,180, copper to $3.18 and silver to $18.80 but oil couldn’t get back over $76.50, which is strange because the last time the dollar was this low oil was $140 a barrel.  Why have the commodity speculators abandoned oil and moved on to metals?

For one thing, energy trading is now under Congressional scrutiny – as well it should be, since it is a forced tax on every man, woman and child on the planet.  Copper prices don’t affect anybody since no one is building anything anyway and pennies sure aren’t worth saving since you need 5 of them just to buy a piece of gum these days.  Silver has industrial uses but there’s not much industry with Industrial Production at less than 80% capacity so no one is complaining (are there any workers left to complain?) about that price and gold consumption is off 34% from last year so the 43% rise in price since last year isn’t tapping more overall global dollars – speculators are just getting much much less for much much more.

Oil collapsed last year because, when push came to shove, people simply couldn’t afford to buy barrels of oil for $140, or $100, or $80.  The problem with trying to manipulate the oil market is 86M barrels more come out of the ground every day, whether you want it or not and if people stop consuming then it has to be stored and that can get expensive.  As it is now, global stockpiles of crude products are at record levels and it is possible that the US is literally out of room to store natural gas despite massive production cutbacks from cartel members like CHK, XOM and EOG. 

So manipulating the price of oil and natural gas gets tough as demand falls off but only 800 tons of gold were consumed in all of Q3, down from 1,206 last year, when gold averaged $825.  In India, the world’s largest consumer of gold, demand fell about 50% from 271.2 tons to just 137.6 tons.  China picked up the slack as the government stockpiled metals (just another speculator) and demand there went from 116.9 tons to 128.6 tons so a 10%
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Weak Weekly Wrap-Up

This chart says it all (thanks Jesse).

In last week's wrap-up I said: "Since early September our upside targets for the indexes have been: Dow 10,087, S&P 1,096, Nasdaq 2,173, NYSE 7,204 and Russell 623 and nothing has happened to change our fundamental outlook for the better so the closer we get to those levels, the LESS comfortable we are taking bullish positions."  I mentioned how tempting it had been to cash out all our longs and go 100% bearish when we hit 10,300.  Our downside levels told us to wait until the 16th, when Monday's move up was finally the last straw and we are out of the bull game (our last major Buy List was July 11th and most picks are up over 100%), probably for the rest of the year

This chart shows you that the S&P is primed for a 5% correction back to 1,050.  I don't know why Jesse didn't extend out the lower support line, which would take us right about to my pullback target of S&P 1,000/Dow 9,650.  I stuck my neck out on TV two weeks ago, calling for a 10% correction to those levels but we've been playing both sides of the fence until this week, when I finally had to put my foot down on Monday, after having discussed cashing out for the holidays in Member Chat over the weekend.  Our general plan this week was to cash out the winners and leave only longer-term, hedged bullish plays while adding more speculative downside plays for the short-term correction.   

Why the change of heart?  Well, something you don't see on this chart but is pretty clear on the Yahoo monthly view, is that virtually all of the gains (ALL of them if you include the spikes) in the Dow for the ENTIRE month of November have come on single days each week.  This week it was Monday (139 points), last week Monday (206 points) and Nov 5th was Wednesday (198 points).  Take those days out of the run from our Oct 30th close at 9,712 and we're up just 63 points to 9,975 despite there being only 1 losing day in the first week (11/3, down 16 points) of the month and one losing day in the second (Nov 12th, down 92 points).  That is one super-flimsy way to build a "rally" don't you think?

Getting 90%…
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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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Phil's Favorites

Trump and the problem with pardons

 

Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...



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Zero Hedge

The Bulls Continue To Bet On The Fed

Courtesy of Lance Roberts, RealInvestmentAdvice.com

Over the last several weeks, we have been discussing the potential for a market correction simply due to divergences in the technical indicators which suggested near-term market risk outweighed the reward. As is generally the case, bonds have been warning the bullish bias of equity investors was likely misplaced. I have updated last week’s chart for reference.

The increase in risks has had us rotating exposure in our portfolios to a more defensive tilt. We previously trimmed back our overweight exposure to Technology, Then, two weeks ago, we noted...



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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!


Alistair Williams Comedian youtube

This is a classic! ha!







Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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