It is nice to hear someone who understands the current state of affairs of the government involvement the economy. This video was a great nugget of the truth that CNBC reported, which is rare.
Friday, May 29, 2009
Wednesday, May 27, 2009
Pequot Capital - Another Hedge Fund bites the Dust
Pequot Capital Management, a large well known hedge fund, will liquidate over the next few months. Sign of the times.
Read the letter to the clients: (Dealbreaker)
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Read the letter to the clients: (Dealbreaker)
Tuesday, May 26, 2009
Sunday, May 24, 2009
$SPX SPY - Stock Market Commentary
The $SPX is now consolidating and heading to test key support levels. The $SPX closed below a steep rising trend line. Steep trend lines typically break hard and fast. This could set up to test the 860 support area, with 840'ish' thereafter.
If I see a close below 880, I will buy some AUG at the money SPY puts.
CLICK CHART TO ENLARGE
If I see a close below 880, I will buy some AUG at the money SPY puts.
CLICK CHART TO ENLARGE
Barack Obama - "We are out of money."
The president, interviewed by C-SPAN, tells us that we are out of money. Fast forward to 13:20 and hear what he says about the state of our government finances.
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Friday, May 22, 2009
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Thursday, May 21, 2009
BankUnited Is Closed by Regulators in Largest U.S. Bank Failure This Year (Bloomberg)
May 21 (Bloomberg) -- BankUnited Financial Corp., the ailing Florida lender, was shut by regulators and its assets were sold to private-equity firms including WL Ross & Co. and Carlyle Group in the largest U.S. bank failure this year.
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The group’s purchase was the “least costly” resolution, the Federal Deposit Insurance Corp. said in a statement today.
BankUnited, based in Coral Gables joined 33 banks and at least five credit unions that have gone under since January. Former North Fork Bancorp Chief Executive Officer John Kanas led buyers that also included Blackstone Group LP and Centerbridge Capital Partners LLC.
BankUnited had $8.7 billion of deposits, regulators said. The failure will cost the FDIC $4.9 billion, the regulator said.
BankUnited’s fiscal second-quarter loss probably rose to $443.1 million, or $12.55 a share, from a loss of $65.8 million, or $1.88, a year earlier, the company said in a May 12 regulatory filing. Loans no longer collecting interest rose to 18 percent of total loans from 14 percent in December.
FDIC PRESS RELEASESector Watch - Financials, Energy, Real Estate
The financial ($DJUSFN) and real estate ($DJUSRE) sectors are 'strong' relative to the broad market. The energy sector is holding this market down.
S&P 500 level of 884 is very important. A close below will take us down to 840's. I will stay in my SPY puts for now. I do think we will go lower.
Position yourself for a move lower. By some puts in retail (XRT or RTH), REIT's which we have naked puts on (SRS), or like I said the SPY.
As far as our SRS trade; be patient and wait. If you have a 50% return on any trade, then take the money.
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S&P 500 level of 884 is very important. A close below will take us down to 840's. I will stay in my SPY puts for now. I do think we will go lower.
Position yourself for a move lower. By some puts in retail (XRT or RTH), REIT's which we have naked puts on (SRS), or like I said the SPY.
As far as our SRS trade; be patient and wait. If you have a 50% return on any trade, then take the money.
What is wrong with Jeff Macke of CNBC's Fast Money?
Can anyone figure out what is going on here? Has Jeff Macke gone nuts or is he messing around with Dennis Kneale? Interesting exchange of words.
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Tuesday, May 19, 2009
Government Manipulation of the Stock Market?
I found this very interesting. Maybe you will too. If this is true, Bernie Madoff will look like a prince. Timmy, Benny and Henry, where are you?
CLICK HERE for video
Transcript below courtesy of myprops.org:
With 2 minutes 30 seconds remaining in the video, Dan Shaffer, President of Shaffer Asset Management, gives shocking evidence of direct government intervention in the stock market:
“Something strange happened during the last 7 or 8 weeks. Doreen you probably can concur on this -- there was a power underneath the market that kept holding it up and trading the futures. I watch the futures every day and every tick, and a tremendous amount of volume came in a several points during the last few weeks, when the market was just about ready to break, and it shot right up again. Usually toward the end of the day – it happened a week ago Friday, at 7 minutes to 4 o’clock, almost 100,000 S&P futures contracts were traded, and then in the last 5 minutes, up to 4 o’clock, another 100,000 contracts were traded, and lifted the Dow from being down 18 to up over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars to be able to move the market in such a way. Who has that kind of money to move this market?
On top of that, the market has rallied up during the stress test uncertainty and moved the bank stocks up, and the bank stocks issued secondaries – they issues stock – they raised capital into this rally. It was perfect text book setup of controlling the markets – now that the stock has been issued…” [interrupted by Richard Suttmeier].
CLICK HERE for video
Transcript below courtesy of myprops.org:
With 2 minutes 30 seconds remaining in the video, Dan Shaffer, President of Shaffer Asset Management, gives shocking evidence of direct government intervention in the stock market:
“Something strange happened during the last 7 or 8 weeks. Doreen you probably can concur on this -- there was a power underneath the market that kept holding it up and trading the futures. I watch the futures every day and every tick, and a tremendous amount of volume came in a several points during the last few weeks, when the market was just about ready to break, and it shot right up again. Usually toward the end of the day – it happened a week ago Friday, at 7 minutes to 4 o’clock, almost 100,000 S&P futures contracts were traded, and then in the last 5 minutes, up to 4 o’clock, another 100,000 contracts were traded, and lifted the Dow from being down 18 to up over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars to be able to move the market in such a way. Who has that kind of money to move this market?
On top of that, the market has rallied up during the stress test uncertainty and moved the bank stocks up, and the bank stocks issued secondaries – they issues stock – they raised capital into this rally. It was perfect text book setup of controlling the markets – now that the stock has been issued…” [interrupted by Richard Suttmeier].
Monday, May 18, 2009
Housing Supply Surplus
Some report came out today stating that the home builders were building more houses. How can the market cheer the builders to an over supplied market is beyond any logic to me? The chart below, straight from Freddie Mac, shows the inventory of unsold homes in the US. There is also the moratorium on foreclosures that is ending and add more to the supply.
As continuing un-employment claims continue to rise, more foreclosures will add to supply. Can anyone say it's time to start building houses after looking at this chart? Just because Lowe's beats earnings on selling more paint and gardening items, it's time to say the housing crisis is over?
Come on...this market is in fantasy land. Better go out and buy some caterpillar stock because bulldozers will be in high demand. not a recommendation
As continuing un-employment claims continue to rise, more foreclosures will add to supply. Can anyone say it's time to start building houses after looking at this chart? Just because Lowe's beats earnings on selling more paint and gardening items, it's time to say the housing crisis is over?
Come on...this market is in fantasy land. Better go out and buy some caterpillar stock because bulldozers will be in high demand. not a recommendation
Stock Market Commentary
Well, it looks like I blew it today.
Today's action took me by surprise. We'll see what happens the rest of the week.
Today's action took me by surprise. We'll see what happens the rest of the week.
CLF
Closed the rest of my naked JUN17 PUTS CLFRZ for a 40% GAIN in 4 days. I still hold a naked JUN19 PUT position.
Even though I stated that the CLF puts were safe earlier, I went ahead and took profits. I think the markets will reverse and give me better opportunities later.
Even though I stated that the CLF puts were safe earlier, I went ahead and took profits. I think the markets will reverse and give me better opportunities later.
$SPX SPY Stock Market Commentary
I think the S&P will come to a complete stop at 900 today and will start to go down.
Sunday, May 17, 2009
$SPX SPY Stock Market Commentary
I hope everyone had a great weekend. All of the trades for the May options expiration cycle were winners!!!
Speaking of Green Shoots; I was right on with the post concerning the end to this run up, albeit 2 days early (see original post CLICK HERE).
I purchased some SPY PUTS for protection last week because I think we could see 875 by this Tuesday and 830-840 by the following week on the S&P500. Once the S&P reaches each of these levels, I will re-evaluate and update you.
I will bail out of my NDAQ naked puts if it breaks down below $17.50 which I think it will. For the time being, I am safe with the CLF naked puts.
As always, I will update as I enter and exit positions.
Trade well!!!
Speaking of Green Shoots; I was right on with the post concerning the end to this run up, albeit 2 days early (see original post CLICK HERE).
I purchased some SPY PUTS for protection last week because I think we could see 875 by this Tuesday and 830-840 by the following week on the S&P500. Once the S&P reaches each of these levels, I will re-evaluate and update you.
I will bail out of my NDAQ naked puts if it breaks down below $17.50 which I think it will. For the time being, I am safe with the CLF naked puts.
As always, I will update as I enter and exit positions.
Trade well!!!
Saturday, May 16, 2009
SRS
SRS - All my naked puts expired worthless for a 100% GAIN. This was a huge trade because I had quite a large position.
Friday, May 15, 2009
Financial Armageddon
Michael J. Panzner - Financial Armageddon Blog
I read his book titled 'Financial Armageddon'. Very interesting reading.
http://www.financialarmageddon.com/
I read his book titled 'Financial Armageddon'. Very interesting reading.
http://www.financialarmageddon.com/
CLF
Closed a position on CLF JUN17 PUTS for a 30% Gain in 2 days. It might pullback, an I will re-enter.
Thursday, May 14, 2009
How I calculate returns on Cash-Secured or Naked Put Trades
There are several schools of thought when it comes to calculating percentage returns on cash-secured or naked put trades. I will explain the way I do it.
For example: if I sell a put for $1.00 and buy it back for $.45 for a $.55 profit. I will calculate it as a 55% return. Profit percentage of $.55 divided by $1.00 = 55%.
Some will calculate it based on the cash or margin used as security. For example: If I sell a put for $1.00 at the $20 strike and buy it back at $.45 for a $.55 profit. Profit percentage of $.55 divided by $20 = 2.75%.
If you think about it, you really never use your cash or get charged margin interest if you buy back the put before expiration or it goes worthless. So if you make any kind of profit, you can't really calculate the profit percentage because you can't divide the profit amount by 0 (zero). You will get an error on your calculator!!!
In conclusion, the way I calculate my gain or loss may be different than what you may think is right. I just do it this way for tracking my performance.
For example: if I sell a put for $1.00 and buy it back for $.45 for a $.55 profit. I will calculate it as a 55% return. Profit percentage of $.55 divided by $1.00 = 55%.
Some will calculate it based on the cash or margin used as security. For example: If I sell a put for $1.00 at the $20 strike and buy it back at $.45 for a $.55 profit. Profit percentage of $.55 divided by $20 = 2.75%.
If you think about it, you really never use your cash or get charged margin interest if you buy back the put before expiration or it goes worthless. So if you make any kind of profit, you can't really calculate the profit percentage because you can't divide the profit amount by 0 (zero). You will get an error on your calculator!!!
In conclusion, the way I calculate my gain or loss may be different than what you may think is right. I just do it this way for tracking my performance.
$SPX SPY
I just purchased some SPY JUL87 PUTS (SZCSI) @ $3.85 for insurance/downside protection.
Update: Purchased more SPY JUL88 PUTS (SZCSJ) @ $3.73
Update: Purchased more SPY JUL88 PUTS (SZCSJ) @ $3.73
Wednesday, May 13, 2009
$SPX SPY Stock Market Commentary
Regarding the previous post concerning the $SPX SPY, keep your eye out for the trading range between the yellow lines on the chart below. Towards the end of the day, look for any level below 887 and buy some puts for protection.
I would buy some SPY JUL85 PUTS as insurance.
CLICK HERE for previous post.
CLICK CHART TO ENLARGE
I would buy some SPY JUL85 PUTS as insurance.
CLICK HERE for previous post.
CLICK CHART TO ENLARGE
CLF
CLF - I opened a cash-secured JUN19 PUT CLFRL position @ $1.05 instead of the JUN20 or JUN21 PUTS. I felt better doing that instead.
CLICK HERE for opening post.
CLICK HERE for opening post.
UNG
Closed my cash secured put position UNERO @ 55 cents for a 31% GAIN in 5 days.
CLICK HERE for opening post.
CLICK HERE for opening post.
CLF
CLF - Cliffs Natural Resources Inc $24.80 9:56am
I opened a long stock position on CLF at $24.70. They had a secondary offering and I am looking for a $1-$2 gain on the stock price.
You can also sell some cash-secured puts JUN20 (CLFRD) or JUN21 (CLFRM) PUTS for a longer term play. I will open half position today. I will update when I open the put position.
I opened a long stock position on CLF at $24.70. They had a secondary offering and I am looking for a $1-$2 gain on the stock price.
You can also sell some cash-secured puts JUN20 (CLFRD) or JUN21 (CLFRM) PUTS for a longer term play. I will open half position today. I will update when I open the put position.
Green Shoots
Green Shoots? After the retail sales report today, I think we have weeds growing. If the consumer isn't spending, the green shoots will wither and die.
Retail sales decline .4%, second monthly decline in a row. The 'analysts' consensus was a gain of .1%. Oh Ohh
Green Shoots for dummies and 'analysts':
CLICK HERE for report
Retail sales decline .4%, second monthly decline in a row. The 'analysts' consensus was a gain of .1%. Oh Ohh
Green Shoots for dummies and 'analysts':
CLICK HERE for report
RTH
I believe you will get the close below $78 today after the worse than expected retail sales report.
Tuesday, May 12, 2009
RTH
RTH - Retail Holders Trust $79.66 3:25pm
A close below $78 this week is an opportunity to short stock or buy some JUL75 or JUL80 PUTS.
A run down to $73-$74 area would be my profit target.
Any run over $80.30, I would bail out.
A close below $78 this week is an opportunity to short stock or buy some JUL75 or JUL80 PUTS.
A run down to $73-$74 area would be my profit target.
Any run over $80.30, I would bail out.
NDAQ
NDAQ - NQDRT half position filled at 90 cents.
I will post if I open the other half of my position.
I will post if I open the other half of my position.
NDAQ
NDAQ $18.90 10:25am - Approaching the $18.50 support area. If you get a chance, sell some JUN17.50 PUTS @ 90 cents.
Sell to open NQDRT @ $.90
I will try for half a position now and see if the market pulls back more for the other half.
Sell to open NQDRT @ $.90
I will try for half a position now and see if the market pulls back more for the other half.
Friday, May 8, 2009
SUN
Sold my SUN position for a healthy $2/share profit.
I am not done with it though. I will enter again.
I am not done with it though. I will enter again.
$SPX SPY Stock Market Commentary
As long as the SPX (S&P 500) stays between the yellow channel uptrend, we could see the 200 period of 955 within the next 2 weeks. Use this as your trading guide. Any breaks above or below, adjust your trading accordingly.
MS
MS - I did not reach my target price area for entry. Wow, what a miss.
MS got down to $24.73 which would have been good enough after the fact. Maybe next time.
MS got down to $24.73 which would have been good enough after the fact. Maybe next time.
Coal Sector
Coal Sector - $DJUSCL
Commentary
I think the coals are just getting started to go up. As stated in an earlier post, coal rises into summer and evidence is backing that up based on weekly charts.
ACI (Arch Coal) $17.98 and MEE $21.34 (Massey Energy) are in a good position for at least a 10% rise.
Other coal companies: ANR, BTU, CNX, FCL, JRCC, WLT
Commentary
I think the coals are just getting started to go up. As stated in an earlier post, coal rises into summer and evidence is backing that up based on weekly charts.
ACI (Arch Coal) $17.98 and MEE $21.34 (Massey Energy) are in a good position for at least a 10% rise.
Other coal companies: ANR, BTU, CNX, FCL, JRCC, WLT
UNG
UNG - US Natural Gas Fund $16.30 at 10:09am
Opened a cash secured put position on UNERO JUN15 PUTS @ 80 cents this morning.
Sell to open UNERO @ 80 cents.
Following the footsteps of Mr. Ed.
Opened a cash secured put position on UNERO JUN15 PUTS @ 80 cents this morning.
Sell to open UNERO @ 80 cents.
Following the footsteps of Mr. Ed.
MS
MS - Morgan Stanley is pricing a 146 million share secondary offering at $24. If you can buy MS at the low $24's, I think it is a buy. Sell when you are happy or sell some calls after the rise. Don't chase it though.
This post is contrary to the post I made several days ago on MS. Situations change. You as a trader should be fluid and dynamic with the market. I was looking for a short position on MS several days ago and now I am going long?!? Sometimes things change.
For the time being, the government is backing all the 19 stress test banks.
I will post if I get the chance to open a position.
This post is contrary to the post I made several days ago on MS. Situations change. You as a trader should be fluid and dynamic with the market. I was looking for a short position on MS several days ago and now I am going long?!? Sometimes things change.
For the time being, the government is backing all the 19 stress test banks.
I will post if I get the chance to open a position.
Thursday, May 7, 2009
SUN
I just want to give a little rationale why I purchased SUN...I think commodities and commodity related stocks will rise into summer. The trend is on my side and I would like to run with it. I think the market is taking a little breather today which gives me a perfect entry point for this one. I bought the puts just in case I am wrong. As you can see from previous blog posts, I have been neutral to slightly bearish on the markets. So buying puts for protection on any long position is the smart thing to do.
SUN
SUN - I opened a long position in SUN stock outright at $29.65. I also purchased the JUN26 (SUNRL) PUTS @ 90 cents for protection in case it goes down. Bought 120% of my position in puts.
I will sell JUN30 calls when the stock reaches $32 in the next few days.
I will sell JUN30 calls when the stock reaches $32 in the next few days.
NDAQ
NDAQ - Earnings were not that bad, so I am opening a cash secured put position JUN17.50 PUTS
Sell to open NQDRT @ $.85.
I think we have to be a little more careful though with the markets at these levels.
If it drops to $18, I would consider adding more to it. I will keep you posted.
Sell to open NQDRT @ $.85.
I think we have to be a little more careful though with the markets at these levels.
If it drops to $18, I would consider adding more to it. I will keep you posted.
Wednesday, May 6, 2009
Green Shoots
How many times a day is the word 'Green Shoots' used on CNBC. Maybe 100 times or so a day. It reminds me of Moral Hazard, Capitulation, etc. Those words were used in mass during the market downturn.
It makes me wonder if we have reached the top of this run now since they are using the word 'Green Shoots' so much.
What do you think?
S&P 915
It makes me wonder if we have reached the top of this run now since they are using the word 'Green Shoots' so much.
What do you think?
S&P 915
Monday, May 4, 2009
Stock Market Commentary
Boy, was I wrong about the market direction. S&P at 900. Let's see where we close today.
SRS
I added more naked MAY21 PUTS to my position @$1.00. These expire in 9 days. I hope to gain all 100% by letting them go worthless.
If I am put the stock at $21, I will be able to sell the calls at a high premium for June.
I'll keep you posted.
If I am put the stock at $21, I will be able to sell the calls at a high premium for June.
I'll keep you posted.
Stock Market Commentary
Good Morning.
I still believe we will see a pullback to the low S&P 820's. Major earnings releases are done. This could lead to some profit taking. I am looking for some confirmation before I add more bearish positions.
The SRS trade is working well. Keep in mind, this is a bearish trade. If your option reaches $.25 this week, bail out and take your GAINS!!!
I will keep you posted on trading ideas during the week.
I still believe we will see a pullback to the low S&P 820's. Major earnings releases are done. This could lead to some profit taking. I am looking for some confirmation before I add more bearish positions.
The SRS trade is working well. Keep in mind, this is a bearish trade. If your option reaches $.25 this week, bail out and take your GAINS!!!
I will keep you posted on trading ideas during the week.
Friday, May 1, 2009
MS
MS has tracked back up to the daily trend line. It broke the trend last week and I missed the trade. It might be setting up for another chance at a short. Just watch your smaller charts for signs of weakening and possibly short the stock. Stress test results next week could make MS very volatile. Keep that in mind. You can by calls for protection relatively cheap so you can sleep at night.
The $26-$27 area is resistance with 3 tests in the last 2 months or so. Stop out at $28 if the short goes against you because it could breakout from there.
SGR
SGR (Shaw Group Inc) - Opened a cash secured put position on JUN25 PUTS SGRRE @ $1.40
SELL TO OPEN SGRRE at $1.40
This is a riskier trade than normal, but I think its a great entry area. The news that drove it down this low is really not that bad. It is back down to the pre-reaction level. $25 is well below the $27 support area. I would be happy owning this company at $25 is I am put the stock. My cost basis would be $23.60.
I will update once the order is filled.
SELL TO OPEN SGRRE at $1.40
This is a riskier trade than normal, but I think its a great entry area. The news that drove it down this low is really not that bad. It is back down to the pre-reaction level. $25 is well below the $27 support area. I would be happy owning this company at $25 is I am put the stock. My cost basis would be $23.60.
I will update once the order is filled.
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