Posts Tagged ‘XTO’

Wild Weekly Wrap-Up

Wheee – that was fun!

Last week, I asked the question were we "Too Bearish or Just Too Early?"  I said in that wrap-up: "This Friday the market topped out about 150 points higher than last Friday, closer to the top of our range so we went much more bearish on Friday, perhaps too bearish considering this was the best Friday finish since Nov 6th and we haven’t had a down Monday since October 26th."  We did get the move up we feared on Monday but we stuck to our guns and had a fabulous week.

Even as the market was going against us Monday morning, my first Alert of the week to members at 9:44 said: "I’m still more inclined to look downward at: Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,200 and Russell 600…  I’m still bearish because oil is weak, gold is weak, the financials (XLF at 14.30) are weak and most of the good news we are hearing is nothing but fluff."  That was a pretty good call as we hit our target levels yesterday and held them, so we flipped more bullish right at 11:30 on Friday, in what was some very good timing for our intra-day play. 

We are still on a stock market roller coaster that's going to have plenty of ups and down in the thin, holiday trading that will likely characterize the end of the year.  The market will be closed 2 Fridays in a row and good luck finding people around this Thursday or the next one so 6 proper trading days left to 2009 at best.  We got out – that drop was very satisfying and we've moved mainly to cash (our $100K Virtual Portfolio has $88,000 in cash at $107,249 at the end of it's first month).  Last week we were able to cash out the bull side, this week we got satisfaction from our bear plays and that leaves us footloose and fancy free to have fun the next two weeks.  If our day trading goes as well as it did on Friday, we can end this year with quite a bang.

Manic Monday – Dubai, CitiGroup and GS Move Markets

This picture says it all.  When you want to blow smoke
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Thrill Ride Thursday

Wheee – this is fun!

Everything went according to plan yesterday as the very fake pre-market pump I warned you about in the morning post very quickly turned into a day of carnage for the markets.  Sure we only ended up down 10 points, but it was down 100 from the open

Fortunately, we have learned how to ride this bull and we grabbed the DIA $105 puts at a .55 average per my 9:47 Alert to Members and we cashed those out at .90 (up 63%) in the afternoon.  We also had a quick 20% winner on Dec QID calls and we kept the Jan QIDs as our continuing bearish bet as we didn't want to risk a possible overnight pump job taking the markets back up with open Dec calls.  Still, we weren't worried enough to cover our longer DIA puts so we were very bearish but, as I said yesterday: "We have neglected to do is play the futures pump for the past week as we keep expecting something very bad to happen and boy would we feel silly if we were just 55% bearish when this house of cards comes tumbling down."

It has been volume, volume, volume that kep me questioning the rallies this year - the fact that all the up moves come on very thin volume (ie. manipulated) while all day long the insiders sell to the suckers who are draw in by the futures action and stick saves (it's a team effort).  This chart from Ron Greiss illustrates what's wrong with our rally on a more macro level:

While we are certainly not ready to do a bearish victory dance on this tiny little correction, we certainly feel a heck of a lot better about our decision to stay bearish.  In addition to adding bearish DIA and QID plays yesterday, we (of course) added more SRS at our target bottom, took the money and ran on EWJ, shorted XTO (rumors XOM may walk), got more UUP and shorted V.  Our long covers were TOL and the VIX but it was a very bearish day of picks, especially considering our already bearish stance (see Weekend Wrap-Up – Too Bearish or Just too Early?). 


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Manic Monday – Dubai, CitiGroup and GS Move Markets

What a morning it's been already! 

Last night, at about 11:30 EST, Abu Dhabi gave a $10Bn bailout to Dubai (until the end of April, anyway) with the following statement from Sheik Ahmed bin Saaed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee: "We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices."  That was enough to send the Hang Seng from down 300 points to up 300 points in less than 30 minutes of trading (on both sides of their lunch break) while the Shanghai went from -2.2% to +1.7% and the Nikkei also reversed a 100-point drop, but only managed to get back to even at the close

US futures trading also went wild, up over 100 points at the time but we've given up about half of those gains as of 7:30.  Does it make sense that the Dubai crisis, which dropped us from 10,450 back to 10,250 when it came up, should be the catalyst to get us over 10,500 just because they were bailed out?  Of course it doesn't – that's why we went to cash.  This is one of the most ridiculously irrational markets I've ever seen.  The other "good" news this morning is also the same old songs:  Citigroup will repay their $20Bn TARP loan by diluting their stock by about 20% and GS says oil will go to $85 early next year.   

I don't know why they even bother to pretend anymore – they should just put 10 market-boosting statements on a chip that randomly plays one of them whenever the MSM needs a quote for the morning.  People don't seem to notice it's the same thing over and over and over again so why even bother with the pretense?  Speaking of pretense – I mentioned in the Weekend Wrap-Up that we expected this nonsense this morning but, had I realized that Greenspan AND Cramer were going to be on Meet the Press yesterday, I would have gone more bullish as those are the two biggest market hypers GE could have used for this week's quotes.

 

Europe seems happy enough with Asia's recovery and all the bull*** commentary (that's bullISH – what were you thinking?)…
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TARP Top Testing Tuesday – Will We Get Fooled Again?

There's nothing in the street
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Is now the parting on the right
And the beards have all grown longer overnight

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray

We don't get fooled again
 

On May  25th, at a speech in Hong Kong, Paul Krugman said: "I will not be surprised to see world trade stabilize, world industrial production stabilize and start to grow two months from now.  I would not be surprised to see flat to positive GDP growth in the United States, and MAYBE even in Europe, in the second half of the year."  Although Krugman also questioned: "In some sense we may be past the worst but there is a big difference between stabilizing and actually making up the lost ground.  We have averted utter catastrophe, but how do we get real recovery?"  The markets ignored the BUT (economists do tend to say BUT a lot) and the Dow rallied 200 points the next day

In fact, the Dow rallied 200 points on Monday May, 18th as well as Tuesday, May 26th (Monday was a holiday) and Monday June 1st, with those 3 "Monday's" accounting for 600 of the 500 points the Dow has gained since Krugman's first speech.  Oil is up over 10% on that "rosy" outlook as well, starting at $60 on the 26th and flying up (with the help of GS) since, all on hopes that the economy will be "back to normal" next quarter.  Of course that's not what Krugman said at all but so what?

Yesterday, with the Dow down 150 points from Friday afternoon's 8,800 level, Krugman made a speech in London, where he said: "I would not be surprised if the official end of the US recession is dated, in retrospect, some time this summer."  He said in retrospect because the context was that he expects the kind of recovery you won’t know you are having until 6 months or so later, when you can look back and say
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Financials continue to rally

Today’s tickers: CIT, CSCO, AMX, STI, XTO, NTES & MCHP

CIT CIT Group, Inc. – Shares of the North American bank holding company has jumped more than 10% to $3.01 amid the broad gains enjoyed by the financial sector today. CIT appeared on our ‘most active by options volume’ market scanner after one investor initiated a reversal on the stock. The trader sold 21,200 calls at the in-the-money October 2.5 strike price for 1.15 and then purchased 21,200 puts at the same strike price for 40 cents each. Perhaps the investor is looking to bank gains on today’s rally and protect the profits by getting long of puts. The trade resulted in a credit of 75 cents to the individual who is prepared to gain to the downside at any share price below $2.50 by expiration in October.

CSCO Cisco Systems, Inc. – The networking and communications products company is off slightly by about 2% to $19.26. However, we observed bullish option traders looking for a rise in shares by expiration this month. At the May 20 strike price more than 18,900 calls were picked up for an average premium of 40 cents apiece. The breakeven on the trade at $20.40 requires that shares rise by just 6% from the current price in order for call-buyers to begin to profit to the upside by expiration. One month further, the in-the-money June 19 strike price attracted a trader to bank gains by selling 8,200 calls for a premium of 1.24. Perhaps this individual decided to throw in the towel and take in profits today for fear that shares may fall further over the next month and a half and erode the call premium even more.

AMX America Movil SAB de CV ADR – The Mexican local and long-distance telephone services company has experienced a slight 1.5% rally in shares to stand at $36.88 today. We observed option traders loading up on puts in the May, June, and August contracts. The activity drove up the put-to-call ratio to more than 6-to-1 indicating that 6 puts were traded to each call option in action. At the near-term May 34 strike price some 4,500 puts were purchased for an average premium of 28 cents apiece. Further along in the June contract, bearish traders coveted 2,500 puts at the 35 strike for 1.50 each. Finally, the largest purchase was a chunk of 20,000 puts…
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DryShips upgrade attracts option investors to upper deck

Today’s tickers: DRYS, XTO, LGF, MCRI, RVBD, RF, HA, CBS, PCLN

DRYS DryShips, Inc. – The drybulk carrier’s share price rally of more than 25% to $6.94 breathes new life into DryShips’ sails today amid an upgrade to ‘outperform’ from ‘market perform’ by an analyst at Oppenheimer & Co. this morning. The company has also managed to raise $500 million via equity offering that it plans to use to decrease its massive debt. Option investors saluted the bullish news by purchasing calls in the May contract. At the May 7.5 strike price 7,300 calls were picked up for an average premium of 59 cents apiece. Shares need only rise by an additional 7% in order for the May 7.5 strike calls to land in-the-money by expiration next month. More optimistic traders selected the May 9.0 strike and bought 3,000 calls for about 28 cents per contract. Another positive sign for the cargo-carrier was the sale of 1,400 puts at the May 6.0 strike price for 74 cents each as some investors hope that shares remain above the breakeven on the trade at $5.26 by expiration. While much of the activity we observed was bullish in the May contract, we did notice that some downside protection was sought at the May 7.5 strike price as about 2,100 in-the-money puts were picked up at an average premium of 1.55 each.

XTO XTO Energy, Inc. – Shares of the oil and gas exploration company have rallied by more than 3% to $35.20. XTO edged onto our ‘most active by options volume’ market scanner after one investor took profits by closing a short put position. It appears that this individual originally established a short position on March 11, 2009, by selling 19,500 puts at the August 22.5 strike price for a premium of 1.86 apiece. Today, he purchased the lot of 19,500 puts at the same strike for an average price of 75 cents apiece. The difference between the two put premiums yields this investor 1.11 today for closing the position. It looks as though he plans to once again profit from a similar trade as he sold 15,000 puts at the August 26 strike price for an average premium of 1.35 apiece.

LGF Lions Gate Entertainment Corporation – The diversified independent producer and distributor of motion pictures jumped to the top of our ‘hot by options volume’ market scanner after one investor…
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Vulcan Materials calendar put spreads predicts continued slide

Today’s tickers: VMC, ORCL, XLU, XHB, XTO, C, MS, HIG & MT

VMC Vulcan Materials Company – The distributor of construction materials must feel a bit left out given its failure to join in the market rebound festivities. Its shares are flat at $36.35 today, just a scant 5% off the 52-week low of $34.32. Vulcan edged onto our ‘hot by options volume’ market scanner after one investor established calendar spread positions in the April and May contracts. We reckon that this investor has already established a short position on the shares which have declined by more than 50% since the start of 2009. By selling April puts and buying those at the same strike in May the investor is opening the door to having stock put to him should the price settle in-the-money by expiration in the nearby April contract. By establishing the long May put positions the investor retains his short position, although only via options since the short stock position was already put back to him. The trade employed 3,000 spreads at each of the 30 and 35 strike contracts, which also lowered the full premium paid for the May put options. This provides a longer amount of time for this trader to watch the stock’s movement, yet enables him to lock down profits should exercise occur. The worst case scenario would be if shares were to rebound above $35 in April because this would devalue his short position, although the April puts would expire worthless while the May puts would decrease in value. Optimally, this trader would like to see shares decline below $30 by expiration in April as the value of the long puts in May would greatly increase and the puts in April would allow him to take delivery of the underlying shares.

ORCL – Oracle Corp. – Despite a drop of 1.5% to $14.86 in shares of the software and server manufacturer, option investors spent 75 cents scooping up calls expiring in January at the 20 strike. Some 20,000 contracts changed hands adding to an existing 70,000 of open interest at the strike. While these investor are setting lofty expectations about an ultimate increase of more than one third for Oracle’s shares within nine months, it wouldn’t take that much to shift the premium on the calls. The 0.27 delta indicates gains of around a quarter for each dollar recovery in…
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Phil's Favorites

Rogue science strikes again: The case of the first gene-edited babies

 

Rogue science strikes again: The case of the first gene-edited babies

Chinese scientists led by He Jiankui claimed they used CRISPR to modify human embryos that eventually were born as twin girls. AP Photo/Mark Schiefelbein

Courtesy of G. Owen Schaefer, National University of Singapore

The idea of scientists tinkering with the genes of babies was once the provenance of science fiction, but now it’s apparently entered the realm of reality: On Nov. 26, Chinese scientist He Jiankui reported the historic live births of ...



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Zero Hedge

Plastic Apocalypse: Dangerous Microplastics Invade Alps To Artic, Found In Fresh Snow

Courtesy of ZeroHedge

A new study has revealed that high levels of microplastics have been detected in some of the most remote regions of the world.

The discovery, published in the journal Science Advances, is the first international study on microplastics in snow, conducted by the Alfred Wegener Institute in Germany.

Melanie Bergmann, the lead scientist, and her team of researchers found microplastics from the Alps to the Arctic contained high levels of the plastic fragment, raises questions about the environmental and health implications of potential exposure to airborne plastics....



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

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Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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The Technical Traders

Global Central Banks Move To Keep The Party Rolling - Part III

Courtesy of Technical Traders

This section of our multi-part article regarding current and past central bank actions, we are going to attempt to look at key elements of the past and present to highlight what we believe may turn out to be an incredible “setup” in the global markets. 

This setup is almost like a complex chess game where two skilled players battle for control and near the end of the game, one player is left with the King, a Rook, and a Pawn while the other player has a dramatic advantage with stronger chess pieces.  Yet, as the game continues, the weaker player is able to remove one or two of the stronger players key pieces and move his pawn to his opponent’s side to r...



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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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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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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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