Snatch This Bargain Energy Stock Even Cheaper Than Vice President of Operations Cambron Did
May 14, 2012
There’s an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on May 9, Contango Oil & Gas Co
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There’s an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on May 9, Contango Oil & Gas Co. ‘s Vice President of Operations, Charles A. Cambron, invested $97,956.00 into 1,800 shares of MCF, for a cost per share of $54.42. Bargain hunters tend to pay particular attention to insider buys like this one, because presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money.
Click here to find out which 9 other energy stock bargains you can buy cheaper than insiders, at EnergyStockChannel.com »
In trading on Monday, bargain hunters could buy shares of Contango Oil & Gas Co. (AMEX: MCF) and achieve a cost basis even cheaper than Cambron, with shares changing hands as low as $53.98 per share. Contango Oil & Gas Co. shares are currently trading trading flat on the day. The chart below shows the one year performance of MCF shares, versus its 200 day moving average:
Looking at the chart above, MCF’s low point in its 52 week range is $51.54 per share, with $69.75 as the 52 week high point — that compares with a last trade of $54.48. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:
| Purchased | Insider | Title | Shares | Price/Share | Value |
|---|---|---|---|---|---|
| 05/09/2012 | Charles A. Cambron | Vice President of Operations | 1,800 | $54.42 | $97,956.00 |
According to the ETF Finder at ETF Channel, MCF makes up 3.65% of the S&P SmallCap Energy Portfolio ETF (NASD: PSCE)which is trading relatively unchanged on the day Monday.
See what other ETFs contain MCF »
See what other stocks are held by PSCE »
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Massive derivatives loss at JPMorgan fuels calls to tighten Wall Street regulation
May 13, 2012
The only Wall Street titan to emerge from the financial crisis without a black eye headed into the weekend with a concussion.
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The only Wall Street titan to emerge from the financial crisis without a black eye headed into the weekend with a concussion.
JPMorgan Chase, fresh off the surprise news that it lost more than $2 billion in recent weeks to a complex trade in credit derivatives, saw its stock value plummet Friday more than 9 percent. The massive loss also reportedly led regulators to open up inquiries about the trading strategy and caused a downgrade of its credit by the rating agency Fitch, which in turn sent its stock lower in after-hours trading.
To top it off, the reported loss renewed calls on Washington regulators to finish a key tenet of the Dodd-Frank financial reform law that JPMorgan has fought tooth-and-nail against: the so-called Volcker Rule.
The timing couldn’t have been worse. In recent weeks, Jamie Dimon, chief executive of JPMorgan, led a cadre of Wall Street chiefs to the Federal Reserve Bank of New York to press for changes to the provision that would ban government-backed firms such as his from running hedge funds and engaging in proprietary trading.
They reportedly were met with utter silence.
Proprietary trading, or betting on the markets with the bank’s own capital, has been the source of huge profits for Wall Street, but it also was a major driver of the damaging risk-taking that contributed to the financial crisis.
Five federal agencies charged by Dodd-Frank with implementing the Volcker Rule have proposed a nearly 300-page rulebook to stop the activities. But the effort has been vigorously opposed by financial industry lobbyists and Republican members of Congress, who view the rule as too strict, complicated and expensive to implement. Among other things, they say the proposed rule would quash legitimate trading activity, such as market making, which is done on behalf of clients.
Even Paul Volcker, the former Federal Reserve chairman, has said the rule that’s been proposed in his name is complex, although he’s blamed lobbyists for contributing to that.
Regardless of the criticism, the loss at JPMorgan likely will accelerate the push to implement the Volcker Rule, industry watchers say. “Something will be adopted that will be called the Volcker Rule,” said John Coffee, professor at Columbia Law School. “How strong it will be remains to be seen.”
It’s up for debate whether the Volcker Rule would have stopped JPMorgan from building up the position that had the loss. The bank claims the troublesome trade was performed as a hedge, or a way of protecting itself from market risk, something that’s allowed under the rule as it has been proposed. But that only led to a senator who sponsored the Volcker Rule, Jeff Merkley of Oregon, to call on regulators Friday to tighten their proposed rules even further and bar activities “disguised as ‘market making’ or ‘risk mitigation.’”
Sen. Tim Johnson, the South Dakota Democrat who leads the Senate Banking Committee, said in a statement that the loss underlines why “opponents of Wall Street reform must not be allowed to gut important protections for the financial system and taxpayers.” Sen. Bob Corker, a Tennessee Republican who serves on the committee, called Friday for hearings on the loss.
Sen. Robert Menendez, the New Jersey Democrat who sits on the banking committee, said, “This gambling by big Wall Street banks is risky for all of us, and taxpayers shouldn’t be left to clean up the mess if they fail.”
Sean Oblack, Johnson’s spokesman, said in a statement that the Banking Committee is “waiting to learn more of the facts before making a decision on a hearing.”
The other fallout from JPMorgan’s trading loss could be the way in which banks set aside capital to protect themselves from loss, said Will Rhode, principal and director of fixed-income research at the Tabb Group. At present, banks use a “Value at Risk” model that lets them measure their own risk profile to determine their capital buffer.
But if JPMorgan, long held to be one of Wall Street’s best risk managers, gets that calculus wrong, global banking regulators could see that as a sign banks are incapable of managing their own risk. In turn, they could foist upon banks inflexible, blanket capital requirements. That in turn would force investment banks to scale back and shrink their operations, Rhode said.
Ed Beeson: (973) 392-4262, ebeeson@starledger.com
Stock Trading Remains in a Slide After ’08 Crisis
May 6, 2012
Mario Tama/Getty Images The New York Stock Exchange. Investors have pulled away from stocks and instead are favoring bonds, despite low interest rates.
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Mario Tama/Getty Images
The New York Stock Exchange. Investors have pulled away from stocks and instead are favoring bonds, despite low interest rates.
Even though American stocks have doubled in price in the last three years, investors and traders large and small keep giving the market the cold shoulder.
Trading in the United States stock market has not only failed to recover since the 2008 financial crisis, it has continued to fall. In April, the average daily trades in American stocks on all exchanges stood at nearly half of its peak in 2008: 6.5 billion compared with 12.1 billion, according to Credit Suisse Trading Strategy.
The decline stands in marked contrast to past economic recoveries, when Americans regained their taste for stock trading within two years of economic shocks in 1987 and 2001.
This time around, the stock market has many more players, including high-speed trading firms, which have recently come to account for over half of all stock market activity. But even they, like all other major groups, have recently been doing less overall trading.
“When you keep in mind recent history, this is kind of uncharted territory,” said Justin Schack, an analyst at Rosenblatt Securities.
Many market experts say the biggest reason for the shrinking volume is that traders and investors remain leery that the economy will suddenly turn on them in the wake of the financial crisis, the wild swings in stock prices and the European debt troubles.
Investors and financial industry professionals are struggling to understand what the decline could mean, particularly if it continues. Less rapid trading by short-term speculators could be a good thing for buy-and-hold investors tired of being burned by the market. But the decline could also signal a broader turn away from the domestic stock market by investors who want to hold less of their nest eggs in stocks and by companies that opt for raising capital in bond markets instead of issuing shares.
“My expectation was that we would see people go back to the stock market,” said Charles Rotblut, a vice president of the American Association of Individual Investors. “It remains to be seen whether there will be a core group of people that is just turned off of the stock markets altogether.”
The New York-based system of stock trading has been showing the strain of the slowdown. The New York Stock Exchange said last week that trading in the first quarter fell 23 percent from a year earlier. A few days earlier, Nasdaq announced that its first-quarter revenues from stock trading in the United States were down 7 percent from a year ago. Both exchange companies have aggressively moved to capture other businesses that do not rely on stock trading, but they have also embarked on cost-cutting programs.
“We can’t be certain as to when or whether the volume is going to recover,” said Lee Shavel, chief financial officer at the Nasdaq OMX Group.
The recent slowdown has occurred not only on the nation’s 13 official exchanges and trading platforms. Dozens of off-exchange operations have captured a larger proportion of all stock trades in recent years, but even their overall trading numbers have been trending down.
The decline in trading has not sent the prices of stocks down. Though there is less buying and selling, the people who have remained in the market are willing to pay higher prices, driving the value of the benchmark Standard & Poor’s 500-stock index up 102 percent since the market hit a bottom in the spring of 2009.
But the recent falloff in trading is striking because data from the New York Stock Exchange shows that volumes have not declined for three consecutive years in records going back to 1960. For an explanation of the lower trading volumes, many market-watchers have looked to the high-speed traders, who use computers algorithms to take advantage of small price discrepancies and who have accounted for an increasing share of all trading in recent years.
These firms have been curtailed slightly by recent regulations aimed at making the markets less volatile. But more fundamentally, industry participants say high-speed traders rely on transacting with slower, traditional traders like retail investors and mutual funds. When those groups pull back, the high-speed firms have little choice but to scale back as well.
“On a typical trade, two high-frequency trading firms will not trade against each other,” said Manoj Narang. His New Jersey high-speed trading firm, Tradeworx, is still growing, he said, but for most established firms, if ordinary investors “don’t want to trade, there’s really simply nothing for us to do.”
Among retail investors, the most reliable source of trading volume has been the day traders who were given access to cheaper trading by discount brokers like E*Trade and TD Ameritrade.
Wall St Week Ahead: All eyes on European elections
May 4, 2012
By Rodrigo Campos | Reuters – NEW YORK (Reuters) – After Wall Street ended its worst week of the year on Friday, U.S. stock investors will look across the Atlantic next week to take their cue from Europe as France and Greece go to the polls. That could offer some respite from a string of weak U.S
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By Rodrigo Campos | Reuters –
NEW YORK (Reuters) – After Wall Street ended its worst week of the year on Friday, U.S. stock investors will look across the Atlantic next week to take their cue from Europe as France and Greece go to the polls.
That could offer some respite from a string of weak U.S. economic data and the earnings season winding down.
Markets worldwide have closely watched developments in Europe for the past several months, with calls for austerity seen as positive for stocks as they seek to prevent a credit crisis in the region that could take down or deeply hurt the global economic recovery.
But an economic slowdown throughout the region has amplified calls for a change of direction.
In France, the prospect of a victory by Francois Hollande over conservative incumbent Nicolas Sarkozy, which would instate the country’s first Socialist president since 1995, initially alarmed some investors. Hollande’s win could be a hurdle to the German-led drive for austerity in Europe.
Adding to the markets’ jitters: Anti-bailout parties are expected to perform well in Greece’s vote on Sunday, raising the risk of more opposition to already unpopular reforms.
“There’s potential for uncertainty and instability in Europe,” said John Praveen, managing director of Prudential International Investment Advisors in Newark, New Jersey. “The market is pricing in extremely negative scenarios.”
Praveen said there is still room for a market rebound if Hollande, should he win the presidency, comes out with a more conciliatory tone that would ease investors’ fears about France‘s commitment to fiscal stability.
Investors are waiting to see if Hollande, who holds an advantage in polls over Sarkozy, will be able to square France’s need for fiscal reforms with his plans to promote growth.
“I’m not quite sure, regardless of who wins, does it say ‘sell the S&P’? … It just continues the uncertainty, no matter who wins,” said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
TECHNICALS RULE IN A LIGHT WEEK
Technical levels could regain importance next week as the U.S. economic data calendar thins and fewer than 30 of the S&P 500 components are expected to report earnings.
“On no news, we all start looking at charts,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.
“We found support recently on the S&P near 1,360. If we violate that, it would be a bad sign,” he said.
The S&P 500 slipped below that level twice last month and bounced back, but has since found strong resistance at 1,400. The recent soft economic data, capped with Friday’s payrolls report showing the third straight month in which hiring had slowed, has dampened hopes for a convincing break upward.
The data dragged the market lower. The S&P 500 and the Nasdaq Composite posted their worst weeks this year. For the week, the Dow Jones industrial average dropped 1.4 percent, the Standard & Poor’s 500 Index slid 2.4 percent and the Nasdaq lost 3.7 percent.
The high points of next week’s economic calendar will come on Friday, with the U.S. Producer Price Index for April and the preliminary reading for May on consumer sentiment from the Thomson Reuters/University of Michigan surveys.
In terms of earnings, the top names next week include Dow components Walt Disney Co
Wednesday will also bring Macy’s
(Reporting by Rodrigo Campos, Additional reporting by Edward Krudy; Editing by Jan Paschal)
Stock futures creep up, but weakness could remain
April 24, 2012
Stock index futures crept higher on Tuesday after sharp losses in the previous session but continued concerns about Europe’s debt crisis could mean gains are short lived. The Dutch state successfully completed a bond auction a day after the government collapsed in a crisis over budget cuts, but investors demanded a slightly higher risk premium as euro zone yields have edged higher.
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Stock index futures crept higher on Tuesday after sharp losses in the previous session but continued concerns about Europe’s debt crisis could mean gains are short lived.
The Dutch state successfully completed a bond auction a day after the government collapsed in a crisis over budget cuts, but investors demanded a slightly higher risk premium as euro zone yields have edged higher.
“People are defensive, obviously they are worried about what’s going on in Europe,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. “We are seeing a lack of buyers coming in to scoop up these oversold levels, which means the caution flag is really up.”
Results from Apple Inc after the close may be a stabilizing factor for the Nasdaq during the session. The results will be dissected after a share swoon raised concerns a gravity-defying rally was over. Apple is down 10 percent from its closing peak this year.
AT&T Inc’s profit rose, driven by a rise in wireless margins as it had shelled out less in subsidies to Apple because it sold fewer iPhones. The stock was up 1 percent to $30.90.
S&P 500 futures rose 1.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 29 points, and Nasdaq 100 futures dipped 2 points.
The S&P 500 should hold near-term support at 1,340 during the current pullback before extending its rally again, according to Brown Brothers Harriman analysts. The index, which held at 1,340 during a pullback in early March, closed Monday at 1,366.94. The level also coincides with 23.6 percent retracement of the rally from October.
“There is this persistent worry over the euro zone now,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “It appears that the markets are trying to force once again the EU to take a more aggressive approach in terms of growth.”
So far, earnings have been solid, with more than 80 percent of S&P 500 companies topping consensus profit estimates as of Monday.
3M Co’s profit rose 4 percent, helped by a strong performance in its transportation business and growth in the Americas. The stock was up 3 percent to $89.71.
Diversified manufacturer United Technologies Corp’s earnings topped expectations, helped by better-than-expected demand for residential heating and cooling systems in North America. The shares rose 1 percent to $80.51.
One-time market darling Netflix Inc projected slower subscriber growth this quarter for its key U.S. video-streaming service. The stock slid 15.4 percent to $86.16 in premarket trade.
A key European index edged up 0.2 percent early Tuesday following the last session’s losses, but gains could be fragile as fears over the euro zone debt situation persisted, with Spanish and Dutch debt auctions under the spotlight.
European banks, a key barometer of risk appetite, slipped to near session lows. The STXE 600 Bank index fell 0.3 percent.
Texas Instruments Inc forecast second-quarter revenue growth above estimates, signaling the end of a prolonged inventory-related decline in demand. Shares were up 3.5 percent to $33.26 early Tuesday.
Facebook Inc reported its first quarter-to-quarter revenue slide in at least two years, a sign the social network’s sizzling growth may be cooling as it prepares to go public.
On the macro front, investors awaited the S&P/Case-Shiller Home Price Index for February, due at 9 a.m. EDT (1300 GMT), and April consumer confidence and new home sales for March, both due at 10 a.m. (1400 GMT). The Conference Board’s Consumer Confidence measure should soften to 69.7 from 70.2, according to forecast.
(Reporting by Ed Krudy; editing by Jeffrey Benkoe)
Stock futures creep up, but weakness could remain
April 24, 2012
Stock index futures crept higher on Tuesday after sharp losses in the previous session but continued concerns about Europe’s debt crisis could mean gains are short lived.
Continued here:
Stock index futures crept higher on Tuesday after sharp losses in the previous session but continued concerns about Europe’s debt crisis could mean gains are short lived.
The Dutch state successfully completed a bond auction a day after the government collapsed in a crisis over budget cuts, but investors demanded a slightly higher risk premium as euro zone yields have edged higher.
“People are defensive, obviously they are worried about what’s going on in Europe,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. “We are seeing a lack of buyers coming in to scoop up these oversold levels, which means the caution flag is really up.”
Results from Apple Inc after the close may be a stabilizing factor for the Nasdaq during the session. The results will be dissected after a share swoon raised concerns a gravity-defying rally was over. Apple is down 10 percent from its closing peak this year.
AT&T Inc’s profit rose, driven by a rise in wireless margins as it had shelled out less in subsidies to Apple because it sold fewer iPhones. The stock was up 1 percent to $30.90.
S&P 500 futures rose 1.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 29 points, and Nasdaq 100 futures dipped 2 points.
The S&P 500 should hold near-term support at 1,340 during the current pullback before extending its rally again, according to Brown Brothers Harriman analysts. The index, which held at 1,340 during a pullback in early March, closed Monday at 1,366.94. The level also coincides with 23.6 percent retracement of the rally from October.
“There is this persistent worry over the euro zone now,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “It appears that the markets are trying to force once again the EU to take a more aggressive approach in terms of growth.”
So far, earnings have been solid, with more than 80 percent of S&P 500 companies topping consensus profit estimates as of Monday.
3M Co’s profit rose 4 percent, helped by a strong performance in its transportation business and growth in the Americas. The stock was up 3 percent to $89.71.
Diversified manufacturer United Technologies Corp’s earnings topped expectations, helped by better-than-expected demand for residential heating and cooling systems in North America. The shares rose 1 percent to $80.51.
One-time market darling Netflix Inc projected slower subscriber growth this quarter for its key U.S. video-streaming service. The stock slid 15.4 percent to $86.16 in premarket trade.
A key European index edged up 0.2 percent early Tuesday following the last session’s losses, but gains could be fragile as fears over the euro zone debt situation persisted, with Spanish and Dutch debt auctions under the spotlight.
European banks, a key barometer of risk appetite, slipped to near session lows. The STXE 600 Bank index fell 0.3 percent.
Texas Instruments Inc forecast second-quarter revenue growth above estimates, signaling the end of a prolonged inventory-related decline in demand. Shares were up 3.5 percent to $33.26 early Tuesday.
Facebook Inc reported its first quarter-to-quarter revenue slide in at least two years, a sign the social network’s sizzling growth may be cooling as it prepares to go public.
On the macro front, investors awaited the S&P/Case-Shiller Home Price Index for February, due at 9 a.m. EDT (1300 GMT), and April consumer confidence and new home sales for March, both due at 10 a.m. (1400 GMT). The Conference Board’s Consumer Confidence measure should soften to 69.7 from 70.2, according to forecast.
(Reporting by Ed Krudy; editing by Jeffrey Benkoe)
Stock funds come on strong in first quarter due to turnaround
April 22, 2012
The stock market has taken a 180-degree turn. Those bold enough to take on risk were rewarded as stock funds posted their largest first-quarter returns since 1998.
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The stock market has taken a 180-degree turn.
Those bold enough to take on risk were rewarded as stock funds posted their largest first-quarter returns since 1998. Fueled by a strengthening economy, diversified stock funds returned an average 12.3 percent, according to Lipper Inc.
That’s been a welcome shift from 2011, when U.S. stock funds lost an average 2.9 percent, and limiting risk was the best approach.
Technology companies and bank stocks were a key part of the momentum shift. The outlook for both sectors has improved, and their rapid turnaround has produced surprising first-quarter results.
A half-dozen renowned managers are again beating their peers by big margins, after trailing the vast majority last year.
Each is a past winner of Morningstar’s manager of the year award in his fund category, and four have been honored as top manager of the decade.
Here are some illustrations of the shift in the markets, and its impact on fund performance for the first quarter:
• Tech is back: Mutual funds specializing in technology were the top performing domestic stock fund category, averaging a nearly 21 percent gain, according to Morningstar.
• Dividends take a back seat: Investors in dividend-paying stocks have plenty of reason to be happy. Payouts are at a record high, and the outlook remains strong for continued dividend growth.
• Growth strategy recaptures lead: For the first time in four quarters, growth stock mutual funds posted a larger average gain than value funds. Growth funds averaged a 15.4 percent return, compared with 12.2 percent for value. Growth stocks are expected to generate above-average earnings and revenue growth.
Wall Street's Thursday Lunch Options
April 19, 2012
“Risk on” appetite for sovereign debt and mostly decent corporate confessionals battle a batch of generally weak economic data. As of 11:45 ET the SP-500 (NYSEArca: SPY – News ) is barely up 0.10% as day seven of the market’s rally attempt wrestles with a bear flag following an early and truly “Best Six” run for bulls. The latest results from an anxiously-awaited debt auction out of Spain are out and investor appetite proved voracious.
Original post:
“Risk on” appetite for sovereign debt and mostly decent corporate confessionals battle a batch of generally weak economic data. As of 11:45 ET the SP-500 (NYSEArca:SPY – News) is barely up 0.10% as day seven of the market’s rally attempt wrestles with a bear flag following an early and truly “Best Six” run for bulls.
The latest results from an anxiously-awaited debt auction out of Spain are out and investor appetite proved voracious. In the latest round of public financing, Spain’s government sold roughly 2.54B EUR worth of 2 and 10-Yr maturities and narrowly topping a wide targeted range of 1.5B EUR – 2.5B EUR. Despite the bid, enthusiasm has failed to carry over into other markets as persistent debt concerns for Spain, Italy and other Debt PIIGS remain, as well as fresh rumors of France’s –AAA rating at risk of a downgrade are weighing in on investors.
Not helping matters, a batch of stateside economic reports have proven disappointing overall. Weekly claims rose to a four-month high as filings for unemployment benefits totaled 386,000 compared to forecasts of 374,000. Data from two weeks was also revised higher by 8,000 to 388,000 marking a second straight week of bean-counting bulls needing to backtrack on their findings.
Sales of existing homes dipped for a second straight month and below Street views. The NAR announced an annualized rate of 4.48M units in March compared to 4.60M in February and surprising analysts calling for an increase to 4.63M. Separately, regional manufacturing data from the Philly Fed survey fell to weaker-than-expected reading of 8.5 in April. The drop follows March’s 12.5 and compares to consensus views of 10.8.
Trying to battle the bearish triple play, the index of leading indicators for March rose by a better-than-forecast 0.3% versus estimates of 0.2%. Looking to inspire confidence (not), the Conference Board noted the result was spearheaded by the “interest rate spread” despite “relatively weak jobs data, home building and economic output the past couple months.”
In those intertwined markets of influence, the EUR / USD is mostly flat but the “risk off” trade is back on again for overseas equity markets. The iShares MSCI Germany Index (:EWG) is off 0.90%, while the iShares MSCI Spain Index (:EWP) is down 2.40% and within 4% of its 2009 March bottom.
The iShares Bull ETF (NasdaqGS:AAPL – News) is off a leading 1.50% after confirming 10SMA as resistance and dropping back below its 30SMA for a third time this week, as well as for all of 2012. Apple’s price action is challenging boutique Canaccord’s “Buy” resumption and price lift from $710 to $740.
A bullish longer-term plug for Apple from Piper on CNBC is also being dismissed. Analyst Gene Munster stated the firm sees “huge upside over the next few years with a price target of $910 despite some controversy today regarding Qualcomm’s 45nm chip; the timing of which suggests an iPhone 5 launch in October rather than June.
On the corporate confessional side, a heavy day of reporting has provided generally strong reports with a bullish lean (FFIV, VMW, TRV and BTU) regarding investor reaction. In the Percent Leaders top spot, shares of eBay (NasdaqGS:EBAY – News) are up 13% and hitting their highest levels in five years. By the numbers and imbuing EBAY bulls into action, the online auction giant beat profit views by $0.04 on stronger-than-expected sales growth of 28.7% while issuing mixed, but apparently bid-worthy guidance.
On the option side, one very large bull involving nearly 12,500 July 40 calls and detailed in Wednesday’s “Earnings Front” column might, if our analysis was correct, be asked to buy the next round down at Harry’s or the Bull & Bear. The estimated naked long purchase is showing gains of $2.00 per contract and nearly 300%.
Elsewhere and in less sacred ground for bulls, shares of Qualcomm (NasdaqGS:QCOM – News) have gapped below the50SMA. QCOM’s next key support is stationed around $60 versus its current level of $63.25 and decline of about 5.50%. The chipset outfit beat on both its top and bottom lines, but issued weak, bracketing guidance for its third quarter earnings and revenues outlook.
In those sometimes accurate heat-seeking option markets, premium bulls and bears have nailed today’s stock reaction in QCOM, much to their own chagrin. Discussed yesterday, some well and evenly-traded strangles and attached implied volatility which suggested an expected move of no more than 5.5% isn’t exactly at a loss. But given the matching actual move, the April 67.5 / 65 strangle is pretty much where it closed. Thus, while price by some measures may have been spot on; it’s also proving less than desirable for those same premium bulls and bears.
Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.
Wall Street's Thursday Lunch Options
April 19, 2012
“ Risk on” appetite for sovereign debt and mostly decent corporate confessionals battle a batch of generally weak economic data. As of 11:45 ET the SP-500 (NYSEArca: SPY – News ) is barely up 0.10% as day seven of the market’s rally attempt wrestles with a bear flag following an early and truly “Best Six” run for bulls
See the article here:
“Risk on” appetite for sovereign debt and mostly decent corporate confessionals battle a batch of generally weak economic data. As of 11:45 ET the SP-500 (NYSEArca:SPY – News) is barely up 0.10% as day seven of the market’s rally attempt wrestles with a bear flag following an early and truly “Best Six” run for bulls.
The latest results from an anxiously-awaited debt auction out of Spain are out and investor appetite proved voracious. In the latest round of public financing, Spain’s government sold roughly 2.54B EUR worth of 2 and 10-Yr maturities and narrowly topping a wide targeted range of 1.5B EUR – 2.5B EUR. Despite the bid, enthusiasm has failed to carry over into other markets as persistent debt concerns for Spain, Italy and other Debt PIIGS remain, as well as fresh rumors of France’s –AAA rating at risk of a downgrade are weighing in on investors.
Not helping matters, a batch of stateside economic reports have proven disappointing overall. Weekly claims rose to a four-month high as filings for unemployment benefits totaled 386,000 compared to forecasts of 374,000. Data from two weeks was also revised higher by 8,000 to 388,000 marking a second straight week of bean-counting bulls needing to backtrack on their findings.
Sales of existing homes dipped for a second straight month and below Street views. The NAR announced an annualized rate of 4.48M units in March compared to 4.60M in February and surprising analysts calling for an increase to 4.63M. Separately, regional manufacturing data from the Philly Fed survey fell to weaker-than-expected reading of 8.5 in April. The drop follows March’s 12.5 and compares to consensus views of 10.8.
Trying to battle the bearish triple play, the index of leading indicators for March rose by a better-than-forecast 0.3% versus estimates of 0.2%. Looking to inspire confidence (not), the Conference Board noted the result was spearheaded by the “interest rate spread” despite “relatively weak jobs data, home building and economic output the past couple months.”
In those intertwined markets of influence, the EUR / USD is mostly flat but the “risk off” trade is back on again for overseas equity markets. The iShares MSCI Germany Index (:EWG) is off 0.90%, while the iShares MSCI Spain Index (:EWP) is down 2.40% and within 4% of its 2009 March bottom.
The iShares Bull ETF (NasdaqGS:AAPL – News) is off a leading 1.50% after confirming 10SMA as resistance and dropping back below its 30SMA for a third time this week, as well as for all of 2012. Apple’s price action is challenging boutique Canaccord’s “Buy” resumption and price lift from $710 to $740.
A bullish longer-term plug for Apple from Piper on CNBC is also being dismissed. Analyst Gene Munster stated the firm sees “huge upside over the next few years with a price target of $910 despite some controversy today regarding Qualcomm’s 45nm chip; the timing of which suggests an iPhone 5 launch in October rather than June.
On the corporate confessional side, a heavy day of reporting has provided generally strong reports with a bullish lean (FFIV, VMW, TRV and BTU) regarding investor reaction. In the Percent Leaders top spot, shares of eBay (NasdaqGS:EBAY – News) are up 13% and hitting their highest levels in five years. By the numbers and imbuing EBAY bulls into action, the online auction giant beat profit views by $0.04 on stronger-than-expected sales growth of 28.7% while issuing mixed, but apparently bid-worthy guidance.
On the option side, one very large bull involving nearly 12,500 July 40 calls and detailed in Wednesday’s “Earnings Front” column might, if our analysis was correct, be asked to buy the next round down at Harry’s or the Bull & Bear. The estimated naked long purchase is showing gains of $2.00 per contract and nearly 300%.
Elsewhere and in less sacred ground for bulls, shares of Qualcomm (NasdaqGS:QCOM – News) have gapped below the50SMA. QCOM’s next key support is stationed around $60 versus its current level of $63.25 and decline of about 5.50%. The chipset outfit beat on both its top and bottom lines, but issued weak, bracketing guidance for its third quarter earnings and revenues outlook.
In those sometimes accurate heat-seeking option markets, premium bulls and bears have nailed today’s stock reaction in QCOM, much to their own chagrin. Discussed yesterday, some well and evenly-traded strangles and attached implied volatility which suggested an expected move of no more than 5.5% isn’t exactly at a loss. But given the matching actual move, the April 67.5 / 65 strangle is pretty much where it closed. Thus, while price by some measures may have been spot on; it’s also proving less than desirable for those same premium bulls and bears.
Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.
Stock Futures Slip After Rally
April 18, 2012
FOX Business: The Power to Prosper Stock-index futures signaled Wall Street may pull back as traders take a breather following Tuesday’s surge and mulled unexpectedly hawkish commentary from global central banks. Today’s Markets As 8:00 a.m.
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FOX Business: The Power to Prosper
Stock-index futures signaled Wall Street may pull back as traders take a breather following Tuesday’s surge and mulled unexpectedly hawkish commentary from global central banks.
Today’s Markets
As 8:00 a.m. ET, Dow Jones Industrial Average futures fell 29 points to 12995, S&P 500 futures dipped 2.8 points to 1381 and Nasdaq 100 futures dropped 6 points to 2707.
The S&P 500 soared 1.6% in a broad-based rally on Tuesday as traders cheered generally upbeat first-quarter earnings from several big companies and brushed aside worries about the eurozone debt crisis. The mood across American and European trading desks was decidedly dimmer on Wednesday.
Minutes from the Bank of England showed that only one individual on the central bank’s policy-setting board pushed for additional quantitative easing to help sooth financial markets and boost the Great Britain’s economy. Traders were expecting more support for additional easing, according to analysts at Nomura.
The Riksbank, which is Sweden’s central bank, also held interest rates steady. Some analysts there were anticipating a rate cut, but it was “a very close call,” Barclays Capital said in a research note. Barclays also noted that the Riksbank’s commentary was also generally more upbeat than was expected.
Overall, market participants are beginning to question whether global central banks are going to reduce stimulus plans as the economy starts to recover and inflationary headwinds tick higher. They also remained cautious about the debt situation in Spain, with a long-term debt sale just looming just a day away. Indeed, Germany paid a record low interest rate on its two-year notes at an auction on Wednesday as traders shifted into the safe-haven asset, according to data from the Wall Street Journal.
European blue chips slid 1.7%, while the greenback climbed 0.43% as tracked by the dollar index.
In earnings news, Halliburton (HAL), the world’s second-biggest oilfield servicing company, said its profits and revenue climbed on a year-to-year basis in the first quarter, coming in ahead of analysts’ expectations. Yahoo (YHOO) posted earnings that beat expectations after the closing bell on Tuesday, boosting its shares. However, Dow component Intel (INTC) fell after offering relatively week gross margin forecast for the second quarter. IBM (IBM), another blue chip, also dipped after missing revenue expectations in its first quarter.
American Express (AXP) and EBay (EBAY) are both set to post results after the close of trading on Wednesday.
Commodities were mostly in the red. Crude oil traded in New York fell 10 cents, or 0.1%, to $104.11 a barrel. Wholesale New York Harbor gasoline slid 4 cents, or 1.4%, to $3.19 a gallon.
In metals, gold slumped $9.80, or 0.59%, to $1,641 a troy ounce. The yield on the 10-year U.S. Treasury fell 0.01-percentage point to 1.992%.
Foreign Markets
European blue chips slid 1.7%, the English FTSE 100 dropped 0.48% to 5739 and the German DAX dipped 0.91% to 6739.
In Asia, the Japanese Nikkei 225 rallied 2.1% to 9667 and the Chinese Hang Seng rose 1.1% to 20781.
