Wednesday, March 31, 2010

Rimm Earnings Leaked? Maybe. (RIMM)

The late session sell off today was a little out of left field, with the Nasdaq leading the way. Interestingly enough (NASDAQ: RIMM) happened to be reporting after the bell. I wonder if some information around the number was leaded around 2 pm est. You can really see the Q's come off the days high of 2,415.42 at 2:06 est. At that point RIMM is already starting its march downward as ETFs pull on her. AT 2:38 est the Q's really fall off a cliff as the bid fails around 2,413.54, fairly heavy selling remained until the closing minutes. This seems perfectly normal right?

Options Whisper Ahead Of Research In Motion Earnings (RIMM)

Research In Motion (NASDAQ: ) options are seeing increased activity ahead of earnings after the bell. Recently Research In Motion (RIMM) has seen its shares rebound nicely off 62 in late January in hopes of increased global handset sales.

Analysts are hoping for $3.92 billion in sales, which is 10% higher than the previous quarter. The street is estimating 1.28 a share. RIMM shares are currently down 1%, a late session NASDAQ sell off has taken hold of the market. The late sell off could be hinting towards something unexpected from (NASDAQ: RIMM).


The Calm Before April. March SPY Chart Highlighted (SPY)

March has proven to be another paint drying, low volume churn of a month. All the markets have done this month are trade higher in a zombie like fashion. This alerts me inflation could be slowly catching hold and thus the market could be setting up for a fast break. Not sure if the break is going to be up or down, but the price action/volume is telling me the market is waiting on a catalyst.

Tuesday, March 30, 2010

Kazakhstan Is In Better Fiscal Shape Than CA..What Is The Answer To California's Problems? Tax Dope. (MO)

Many of you may or may not know California is on the brink of a fiscal collapse. Law makers in the state have been searching for solutions to the problem for the past five years. For those of you who would like a more in debt read on California's current fiscal situation, BeyondChron has a great article.

One interesting tidbit from the Beyond Chronical article i would like to share with you:

According to Bloomberg News, the market believes a developing country like Kazakhstan, with about 15.7 million people, is less likely to default on its debt than California, which is the eighth largest economy in the world.
One solution gaining traction is the issue of legalizing personal amounts of cannabis, it will be regulated and taxed. Bigger name news outlets have been slow to report on this story, though interestingly enough; smaller news outlets as far as Indiana are picking up on this story.

Monday, March 29, 2010

Geithner Is A Good Trader. (C)

As you can see from the chart below, Tim Geithner is a great trader. It is hard to lose when you have your cake and eat it too. I bet Bernake helped bake the cake.

My Reaction To The New York Times Article: "Day Traders 2.0"

Day trading is hard, though we chose this career knowing what we were getting into. The author of the article seems to have a personal issue with day traders he came across with a very condescending tone. Who is the author to talk down to those who grind it out everyday learning and profiting from our markets? I would never write an article highlighting how the New York Times medium of communication is dead/rotting etc, i have a bit of class.

Friday, March 26, 2010

InterOil Options Active On Legal Issues (IOC)

InterOil Corp shares are plunging today as investors position themselves ahead of a lawsuit revealed by Barry Minkow's Fraud Discovery Institute. The institute revealed investor's filed a lawsuit against the company's CEO Phil Mulacek, seeking $1.3billion in damages.

The suit claimed the current CEO wrongly placed the company into bankruptcy. Whatever the case maybe the price action and volume is telling a very bearish story, shares are currently down around 12 points, a bit off it's intra day low.

Afternoon Options Action.. (LMT)

Lockheed Martin options are active this afternoon. (NYSE: ) Traders appear to be targeting the April 90 calls, 13,000 have traded vs. an open interest of 505. It appears the majority of the options were purchased for 20 - 25c.

The underlying volume is light, though the shares are up .63, currently trading 84.16.

Currently we do not see a catalyst for the options volume other than the issue with N. Korea.

52 week Range: 65.21 - 87.18

More here.

The Selling Is Healthy....Let The VIX Be Your Guide (VIX)

The price action yesterday after we topped out around 118.05 on the SPY is very much in line with pasts sessions where year highs were put in.

Falling off this level in my opinion is healthy, traders are taking profits. I for one felt the triple digit gains around noon were a bit to rich. Apparently the street felt the same. Now we must wait and see if the market collects itself and climbs back up testing 118 SPY, 1170 ES...

Wednesday, March 24, 2010

It's Hammer Time!.... The Party Started Long Ago....(UUP)

As you can see from the daily interval chart to the left, it is indeed Hammer Time!

The green circled candle is very bullish, as we have clearly closed above medium term resistance(23.03), i would expect a bit of sideways consolidation after a move like this going into the weekend.

Though on a longer horizon i would look for UUP to trade higher following the uptrend clearly put in place starting in late Nov, early Dec 2009.

The Dollar party might have started months ago, but the guests of honor have arrived. The guest of honor is... YOU... The average investor in my opinion is just now starting to put actual dollars into DOLLAR longs.

Tuesday, March 23, 2010

My first and last comments on Healthcare....

If most, cough cough* US citizens, NOT the tax paying kind, realized working for a living actually has benefits over sitting on your ass collecting government cash, we would have never got to where we are socially/fiscally/politically. In my opinion of course.

WE must solve our social problems from the root. I will admit I do not have a grand thesis, though i do know increasing taxes on those households contributing to our "economy" would not be included. A good start wold be MOTIVATING and educating the up and coming generations on what life can bring you IF you just try.

Options Active in Titanium Metals (TIE)

Titanium Metals (NYSE: )is still holding it's bid after early morning takeover rumors pushed it higher. (NYSE: TIE) is currently up 8.5%.

Titanium Metals has been subject to takeover chatter the past few months, though volumes have not confirmed the price action until today. Currently (NYSE: TIE) volume is 8.4 mil shares vs average of 3.6 mil.

Option traders are currently targeting the April 16 calls, as of 1:30 est 24,800 calls have traded vs an open interest of only 295 contracts. The contracts days range is .30c - .95c. The purchase has already returned a few hundred percent since the opening trade.

For the 16 calls to finish in the money (TIE) must close above 16$ after the close of trading on April 16th.
It does not appear the contracts were spread off to offset the price and risk of the purchase.

TIE 52wk Range: 5.14 - 16.24

Monday, March 22, 2010

Head Fake, The Healthcare Vote Gives The Markets A Lift (UNH, HUM)

Traders were caught off guard this morning as the futures were indicating -8 points on the S&P500. From the opening print on the markets ripped higher on what I believe is a well orchestrated short squeeze combined with the euphoria of an up market where buying highs is rewarded.

Wellpoint (NYSE: WLP) and United Healthcare (NYSE: UNH) opened higher today pulling on the index's, though both names as of 2 pm eastern are negative. This is a tell that the vote was priced in many weeks ago.

More here

Friday, March 19, 2010

VIX Lurching Higher Off Historical Support On Greece Worries (VIX)

Please refer to my article from last night if you would like background information on why we saw a VIX pop today.

Renewed uncertainty over the Greece bailout sent equities down and the Chicago Volatility Index (VIX) skyward. The VIX was up 5% in early morning trading, though has settled up around 3% as of 3:30 est.

Historically VIX support has been at the 16.62 level which has been tested four times the past few years. Each time the VIX reached the 16.62 it bounced fairly violently, followed by a slow decay. The downtrend has been in place Oct of 2008, each test of this downtrend failed resulting in further downward price action.

52 week range: 16.17 - 47.63

More Here

Thursday, March 18, 2010

I Say A Little Prayer For You....VIX Edition (VIX)

@ once told me, "Hoping and praying is for church."I compromised this afternoon by cueing up Aretha Franklin's - I say a little prayer for the VIX, to provide a bit of mood while i annotated the VIX chart on the left. I cued up John Denver's - The Spy's leaving on a jet plane when i moved onto Spy chart annotations.

As you can see from the chart, the VIX is on a death march, below the RED support it is anybodies guess as to where we land. My guess is 12 is not out of the question in the next few months, IF we continue our inflation/free money fueled rally, which could very well continue because nothing is giving you a better return than the stock market. Main street is catching wind, the party could be just getting started. OR on the flip side the vix could catch support and bounce it has 3 times prior.(green circles)

UPDATE: VIX closed up 2.2% today, up 5%+ in the morning session. Technical bounce compounded by Greece worries? Lets see how Monday goes.

The SPY chart on the left might give you some ideas as to what is driving the VIX down. We broke key resistance at 1150 fairly easily, the volume is light BUT the is volume green. If we continue this trend of "zombie up" on anemic volume we could see a systematic smash of the VIX clear to the 10 level by the end of the year, 12 in the meantime. Tomorrows numbers are going to be key in determining if we continue the march higher or retest the 1145-1150 level. IF all goes well and the number is spun successfully, more buying will come in. I believe this market is definitely due for a pullback so that the oscillators can unwind, if this happens we will probably snap right back up similar to the jan-feb "pullback".

Wednesday, March 17, 2010

Natural Gas Names Look A Bit Short Term Toppy (Consol Energy)

There has been recent speculation the Oil/Gas rally which began in med December 2009 is coming to an end . Reason being, CNX may have over paid for Dominions Marcellus shale assets at the top of a soft(demand) market. Current nat gas demand is still relatively weak considering the cold winter and snow storms, UNG is still falling through the floor breaking 52 week lows amost every week. The current race for acerage in the Marcellus shale formation is heating up, possibly a bit premature.

Clorox Corporation Marches Higher On Takeover Speculation (CLX)

Clorox Corporation (NYSE: CLX) options are active today on chatter of a takeover. CLX shares have been subject to chatter for a few months with nothing materializing. Since the first of the year, Clorox share price has seen a steep rise off the 59 level.

Option traders are buying the March 65 calls. By 1pm est traders bought up around 6k March 65 calls vs an open interest of 1,200 contracts. The April 65 and 70 calls are very active as well, though this call spread was sold, which speculates the (NYSE: CLX) will stay below the 65-70 level.

I feel the play is not to bet on a takeover, but rather a fundamental play based on product demand and strong profits.

52wk Range: 49.32 - 64.90

Oil Continues The March Higher Despite Dollar Strength (USO)

Crude oil and commodities alike continue their march higher post fed decision. United States Oil (NYSE: USO) is up .27 today despite the dollar strength, currently up .05 (NYSE: UUP).

Options traders are buying out of the money calls in back months on the (USO)pricing in a move over 85$ in NYMEX futures.

As for what is driving commodities, Dennis Gartman of the Gartman Letter said today, "Commodities have gone 'mad' since the Fed's decision not to hike rates. Speculators are getting way to confident of a weak dollar and inflation."

52wk Range: 26.28 - 41.92

Tuesday, March 16, 2010

Traders Speculate On General Electric Upside (GE)

Today traders are buying at the money and slightly out of the money calls in General Electric (NYSE: GE), pricing in a move over the 18 level in the near future.

The March 17.50 calls saw nearly 50,000 contracts traded by noon. The April 18 and 19 calls saw a volume spike as well. Almost 100% of the open interest in the (NYSE: GE)April 18 calls have traded by 1:30 est.

(GE)announced today it was expecting profits to rise in 2011 along with a dividend increase.

52wk Range: 9.26 - 17.7564

Traders Expecting A Sharp Move Off the 1150 Level Are Buying Straddles (SPY)

The past few months the markets have been in a very tight trading range testing the S&P 1150 resistance level on lighter than average volume. Because of the significance of the 1150 level dating back to October of 2008, options traders are pricing in a sharp move to the upside or downside from 1150 on the S&P's (NYSE: SPY).

The method traders are using to capture the move safely is by purchasing straddles, you are both leaning long and short.

Traders are putting on the March 115 SPY straddle for around 1.50. Index option traders are also putting on the 1150 straddle. Given the current low volatility environment the pricing for these spreads is quite attractive.

Wednesday, March 10, 2010

What Do Baseballs, Gravity & Program Trading Have In Common?

This post is intended to provide you with a deeper understanding of where I think our markets are going, how we got here, and why. I concluded my previous post with the question: "How should we model our current and future markets? Should we base them on previously proven market making strategies or should we venture into the unknown/unproven (algo/program) territory?

First, lets compare our current and past markets bullishness.One argue in years past bullishness was supported by a fundamentally strong market/economy correct?... Well then our current similarly bullish trending market MUST be supported by fundamentals! No problems here! If you are saying to yourself, "This guy is nuts, our current market is nothing like the past!", you are in the right mindset to continue reading.. Though much to your dismay I am not nuts!

Tuesday, March 9, 2010

Identifying, Trading & Profiting From Up Trending Markets

First off, why is the trend our friend? The number one reason is intra day trending markets provide confidence for the day trading species. As a day trader we are always cautious of a trend reversal out of nowhere(i know i am), especially in our current choppy, unsure, seemingly erratic, bot controlled environment. These factors really screw with a day traders ability to hold a trade while taking heat. presented an early up trend reaching towards 1150 resistance before reversing. Keep this chart in front of you as you read on.

S&P Poised To Push Through 1150, So..What's Next? (SPY)

First lets recap todays trading, we saw a strong trend from the opening (red)print forward, there were not any crazy violent up moves after the open, just steady seemingly normal trading. Though this party was cut short in afternoon trading as trend riders who missed the exhaustion signals around 1:45 were stopped out perpetuating a fairly violent sell off which took us negative on the day for *literally only a few minutes.

Friday, March 5, 2010

Further Proof The White House Now Plays Paddy Cake All Day While The House Burns Around Us

Referring to the picture...Our government really has time for this bullshit? The European currency market is on the verge of collapse, our stock market is no longer a free market. China holds about 24% of US debt alone..

If they sell the entire USA is gonna be eating cup of noodles trying to figure out why the hell we spent all our money on credit cards, cars, houses, stocks and Jay Z albums when we should have spent our money (that is what is left after paying Barry our state, federal and county taxes) buying farm land, seeds, guns and gold? (Marc Faber)

*Because in the end when nothing is left... you will have food from your investment in land & seeds, a form of currency from gold & piece of mind from the guns which protect your family & farm from all the crazy people who will be after your new riches when all the cup of noodle packets are gone...

As you can see, our market is backstopped, it appears she will never fall, the mystery buyer always has more bullets.. YOU can always tell when the house is burning around you.. Your superiors tend to act as if all is fine...until the roof caves in...

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