Posts Tagged ‘WOR’

Thursday Foolishness – More of the Same with One Trade

Our day is done, how’s yours?  

That’s right, we already did our 3am trade where we caught the dead top of oil (and the dead bottom of the Dollar), where my 2:59 am comment to Members in Chat was:  

 

Dollar at session low of 80.40 at 3am and oil back at yesterday’s high at $103.70 so oil (/CL) makes a nice short below $103.75 here but DANGEROUS pre-market trading as Iran could spout off at any moment and the trading is VERY THIN.  

So that brings us back to the good old Dow (/YM) futures at 12,350 and they are just over that line at 12,351 but that’s the short of the moment as long as the Dollar is over 80.40 .

For the next hour, I did a blow by blow on the oil trade in Member Chat on the way down to $102.70 – a nice $1,000 per contract worm gotten by the early birds, where we took the money and ran ahead of likely morning manipulation back up to $103.50, where we can short it again on inventories (11am).  The Dow slipped to 12,300 and paid a solid $250 per contract as well, paying for over 100 Egg Mcmuffins this morning by itself.  If you want to see how we make decisions along the way down – it’s well worth going over this morning’s comments – there was also some good discussion of other topics this morning, including my pick for the best wide-screen TV.  

We’re still just messing around with hit and run plays, waiting to see how the week pans out and next week we’ll be waiting to see how earnings pan out as well as what we expect will be a pretty major market pullback leading into the 10-year auctions next Wednesday at 1pm.  Clearly the Fed freaked out and jumped in yesterday when TLT hit $118 so we are fairly comfortable with…
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M&A Monday – Goldman’s Golden Goose

Hope springs eternal at Goldman Sachs.

This morning our favorite Banksters goosed the EU markets by upping targets on international mining operators Kazakhmys, Lonmin and BHP and that got the European markets off to a flying start out of the gate, despite the fact that UBS had just DOWNgraded the same sector on Friday.  UBS said on Friday that the sector is facing difficult times concerning potential growth with government rulings on mineral leases and the proposed supertax on mining profits in Australia set to hinder metal-based stocks.

We also have a lot of M&A activity, also courtesy of GS, who are leading the resurgence this year with 225 deals to date worth $401.6Bn, accounting for about 20% of all activity going through Goldman's sticky fingers.  In a sign of the times, however, GS only generated $961M in revenues as an M&A advisor as they cut a lot of discounts in order to land the top spot in dealmaking.  Although outdealt by GS, MS, Rothchild, JPM and DB all made more in fees than the Uncle Lloyd show.

In a sign of the end of times, GS's London Headquarters has been taken over by lenders after the owner fell into receivership.  GS's landlord, Antedon, is an offshore real estate firm that bought the building for $500M at the top of the market in 2007 and GS has locked up the building through 2026 at what seems to be not enough money to keep Antedon liquid – it would be very interesting to trace the web of deals that led to this massive default.  

Meanwhile, the consortium of Irish investors that own GS's other London building are also bailing out, this action is coinciding with what Ireland's Independent says is a campaign by Wall Street Hedge Funds to short sell Irish Government Bonds.  US hedge funds Groveland Capital and Corrientes Advisors are thought to have taken major positions against Irish debt. Giant €60bn asset-manager Pictet also revealed that it had earlier bet against Irish government bonds. JP Morgan is also thought to have taken a bearish position on Irish debt.  The International Monetary Fund estimated that up to €3bn of Ireland's debt was being targeted by speculators through the uses of derivatives.

So,…
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Testy Tuesday Morning

Wow – what a lot of work to get back to last Tuesday's high! 

As usual, the vast majority of gains came in pre-market trading and the rest came in light-volume, early morning trading while the rest of the day was dominated by every buyer finding a willing seller for 75% of the day's volume.  We saw what happened on Thursday when someone big wants to sell and there are no buyers so we'll see how long the bull's luck (manufactured or otherwise) will hold out as we begin to get economic data along with some early earnings reports.

The Ag sector popped 2% yesterday ahead of tonight's earings from MOS with MON checking in tomorrow morning so we'll see how wise those last-minute bets were in short order.  SONC also has earnings tonight and we like those guys long-term.  SONC makes a decent buy/write candidate as you can buy the stock for $10.29 and sell June $10 puts and calls for $2.25 for a net entry of $8.04 with a very nice 24% profit if called away at $10 and an average entry of $9.02 (a 12% discount) if more stock is put to you below $10 in June. 

FDO and WOR also report tomorrow morning.  FDO will be interesting but a weak dollar probably hurt them last quarter.  Tomorrow night we hear from BBBY, BLUD, OHB and Sonic competitor RT, who seem a bit pricey at $7.50.  Thursday we get our first real builder, LEN along with STZ and TXI.  After the bell on Thursday we hear from APOL, CRI and SCHN with GBX and PSMT on Friday.  AA officially kicks of earnings season next Monday with GAP, INFY, KBH, BGG, SCHW, SHFL, INTC and JPM highlighting the reporters. 

We have plenty of data this week including Factory Orders and Pending Home Sales at 10 am along with December Auto Sales throughout the day (did you get a new car for Christmas?).  Tomorrow is jobs day, with the ADP Report and Challenger Job Cuts ahead of the bell followed by ISM Services (yesterday's ISM was a nice beat) and, of course, Crude Inventories at 10:30 which are unlikely to sustain $82 oil (USO Jan $40 puts for .80 are a good way to play this)We talked about the other stuff yesterday so I won't repeat it – suffice to say
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Monday Morning – 6 Unemployed People Per Job?

The number of unemployed people per job opening has climbed to 6:

27jobs-graf01

Six is a lot, as you can see from the above chart.  6 means that if you get a job, 5 people absolutely will NOT be able to get a job because you just took the last one.  Notice Job Openings are still falling and people without jobs are still rising – this is not a good combination, despite how great you hear things are getting on TV.   In the first 6 months of this year, there are half as many manufacturing jobs available, 17% less Government Jobs, 21% less Professional Jobs and 21% less Educational Jobs.

Call me old-fashioned but I still think you need people to work in order to have a strong economy.  If we have 10% unemployment (the "official" number) and only 1 in 6 people COULD get jobs if they filled every single available opening tomorrow.  That still leaves us with 8.5% unemployment.  We are miles and miles away from creating jobs and that is very scary.

68017.strip.sunday

As I predicted in the Weekend Wrap-Up, Merkel won her election in Germany and the new "Pro-Business" coalition is making investors happy but Germany has some silly rule about balancing their budget so it will be a long time before you see the massive tax cuts that investors are salivating over.  Also, one would think people would sober up and short the Euro if their plan is to start running the German printing presses in a US-styled Spendocracy but no action in the currency markets so far.    I wrote some extensive commentary on the German situation in Member Chat so I won't get into it again here. 

This weekend, I also posed the questions "Are Fundamentals Making a Comeback," or are we just resting before the next big push to 10,000?  We’ll be keeping a very close eye on our 5% rule levels next week, especially the retrace levels from the 20% run-ups since early July:

       


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Phil's Favorites

Signs of a Bottom

 

Signs of a Bottom

Courtesy of 

The S&P 500 gained 6.4% last week, the second-best post-pandemic performance for the large-cap index.  For a moment there, we were out of bear-market territory, bouncing to an 18.5% decline from all-time highs. Now, it’s a bear market again ¯\_(?)_/¯

All silliness aside, calls for a bottom appear premature.

Michael Cembalest and his team did some work on what you want to be on the lookout for, and we’re not there qui...



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ValueWalk

Let General Mills Command A Position In Your Defensive Portfolio

By MarketBeat. Originally published at ValueWalk.

Recession Resistant General Mills Rockets Higher Outlook

We’ve been interested in General Mills (NYSE:GIS) for some time now and we couldn’t be happier with the FQ4 2022 results. The company not only beat on the top and bottom line but issued favorable guidance in the face of mounting economic headwinds. The takeaway here is that defensive consumer staple stocks like General Mills are among the best positioned for today’s times and General Mills is among the best picks. Trading at only 18.5X it’s earnings outlook the stock is undervalued relative to its peers while paying an ...



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Zero Hedge

Why Is The VIX So Low? A Surprising Answer Emerges In The Market's Microstructure

Courtesy of ZeroHedge View original post here.

One of the most frequent questions tossed around Wall Street trading desks (and strip clubs), and which was duly covered by Bloomberg recently in "Fear Has Gone Missing in Wall Street’s Slow-Motion Bear Market", is why despite the crushing bear market and the coming recession, does the VIX refuse to rise sustainably above 30, or in other words, why is the VIX so low?

As Goldman's Rocky Fishman wrote in a recent note "Option Markets Ta...



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Politics

Putin's propaganda is rooted in Russian history - and that's why it works

 

Putin’s propaganda is rooted in Russian history – and that’s why it works

Courtesy of Julia Khrebtan-Hörhager, Colorado State University and Evgeniya Pyatovskaya, University of South Florida

Russia’s war against Ukraine is pressing into its fifth month – despite several rounds of failed peace talks, and Western countries’ issuing severe economic sanctions against Russia.

The war isn’t happening just on Ukrainian soil. President Vladimir Putin’s propaganda is propelling...



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Kimble Charting Solutions

Doc Copper Pattern Suggesting Another Huge Decline Is To Be Expected?

Courtesy of Chris Kimble

Looks like the historic run higher in copper prices may be taking a breather.

While we cannot say that the LONG-term rally is over. It definitely has put in an intermediate top.

Back in March, we wrote about this possibility in our article, “Is Copper Repeating Historic Double Top Price Pattern?” There have been two other historic double tops that have taken place in the past 20 years.

Well, here we are today and the double top pattern is breaking down and Doc Copper is on the ropes. Below is an updated ...



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Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold miners do well when gold is higher, and borrowing and gasoline costs are lower.

Lets start with a question: Why do governments own gold?

1) The need it to support their economy during an energy crisis. If their currency is collapsing oil producers will not take fiat for settlement, but they will accept gold.
2) While the US prints money the purchasing power of the US dollar is declining, hence gold is a hedge.

A particular market action which forces traders to move gold higher is when oil moves higher while the US dollar falls. This means the US dollar is losing purchasing power against oil, therefore gold will go higher as the demand for (1) above explodes. Some history, gold moved higher sharply in these years 2007, 2011, 2016, 2020. All ...

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Digital Currencies

Scams and cryptocurrency can go hand in hand - here's how they work and what to watch out for

 

Scams and cryptocurrency can go hand in hand – here’s how they work and what to watch out for

The anonymous nature of cryptocurrency transactions is ideal for con artists. seksan Mongkhonkhamsao/Moment via Getty Images

Courtesy of Yaniv Hanoch, University of Southampton and Stacey Wood, Scripps College

When one of our students told us they were going to drop out of college ...



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Biotech/COVID-19

At last, COVID-19 shots for little kids - 5 essential reads

 

At last, COVID-19 shots for little kids – 5 essential reads

Millions of U.S. children between the ages of 6 months and 4 years will soon be eligible for COVID-19 shots. FatCamera/E+ via Getty Images

Courtesy of Amanda Mascarelli, The Conversation

For many parents of kids under age 5, a safe and effective COVID-19 vaccine could not come soon enough. A full year and a half after shots first became available for adults, their wait is nearly over.

On June 17, 2022, the Food and Drug Administration ...



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Promotions

Phil: Be the House Not the Gambler at the Fintech Conference in Vegas

 

Phil gave an excellent, educational presentation called "Be the House Not the Gambler: Using Stock Options to Significantly Boost Your Portfolio Performance" at the FinTwit Conference hosted by Lupton Capital and Benzinga on May 14 in Las Vegas. The video is set to start playing at 5:30:45, when Phil takes the stage (but you can see previous presentations by backtracking).

AGENDA 
9:00 AM Opening Remarks with Jonah Lupton, Entrepreneur & Investor
9:05 AM Wagging the Dog: How to Profit From Derivative Driven Moves in the Market with Steven Place, Founder, Investingwithoptions.com
10:00 AM The MarketWebs & The Path of Least Resistance, Christian Fromhertz, CEO, The Tribeca Trade Group
10:55 AM Fireside Chat with Gareth Mann, Founder & CEO, AlphaStream & Spencer Israel, Executive Producer, Benzinga
11:25 AM Sponsor Pitch: Carolyn Bao, VP of Marke...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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