MidWeek Commentary

HI Financial Services Mid-Week 06-24-2014

HI Financial Services
Mid-Week 06-24-2014

The Fed should make a clear commitment to stable money to reduce the
swings in interest rates and inflation. Instead, it champions and flaunts
unstable money. This encourages momentum trading and the growth of derivatives.
Meanwhile, layers of financial regulation make Washington bigger and more
powerful but don’t fix the underlying problems.
David Malpass

What has the Fed Reserve
done for us?

Printed money up the

Goosed the market
especially for those who could afford to be in it!!!!

Devalued the dollar

Keeping interest rates
artificially low – This helps those with equity in the home or those who have a
debt value below the appraisal value because they could refinance for a lower



What has been happening
so far this week?

          Pretty flat for right now with mixed data on the housing
market.   Better than expected Existing home sales and
New Home sales is good news.  Worse than
expected Case-Shiller and FHFA Housing Price Index was a negative.  Consumer Confidence came in better than
expected and our market is overall flat.
This is typical for a “melt up” or a slow grind.  Slow moving up days and usually big pullbacks
for a day or two. 

may have caused our pull back today?
Maybe we hit resistance – Over-bought on the RSI for the SPX and the

Profit taking for the
quarter done by institutions for Q2 2014.
Profit taking for 6 straight up days on the DOW,


Where will our market
end this week?

          I feel the trend was set last week by the FOMC committee.  Let’s see our markets continue to head higher
with the understanding we are going to have little to no rising interest rate
risk at this time.  That means that on
days like today I have to consider them “buying” opportunities.  As an options trader you have the ability to
protect the equity at the time of purchase.

I’ve noticed the low volume in the markets for the past 4
years.  Today on CNBC Pete Najaran had an
explanation.    He
noticed that pre 2008 option traders were trading about 8 million daily
contracts.  Last year it hit an average
of 18.2 million and this year we are averaging 17.1 million.  When you multiply those number by the 100 share
per contract right or obligation you can come close to the missing volume.   Why
are more people trading derivatives? = More leverage, they have tons of money,
less capital risk and outlay.  Where did
the money go- Hurley’s belief? It evaporated !!!!  And what’s left people hide in annuities or
under their mattress.


DJIA– Technically we are
still bullish and coming to test the median line on the RSI.  We need more time to verify a bearish
movement and one day does not equal a trend.


SPX – The SPX pushed
above the 1950 mark and is approaching 2000.
We just came off of an overbought RSI indicator. 


COMP – Slow move higher
is occurring right now.  We also got a
move off of the overbought RSI indicator.
We hit a round number 4400 on the Nasdaq


Where Will the SPX end June


Still going to stay with
1950 thinking we may have a sell off the end of the quarter for the S&P.



I have not changed my
expectation from the first week.  1950 on
the SPX and let’s see us test 17,000 on the Dow. 


I would expect to
continue to melt up in the indexes.  I
think we lack a stimulus so I would not go much higher than 1950 or roughly a
1% gain for June


What is on tap for the
rest of the week?


Tues:          CCL, WAG

Wed:          MON

Thur:         CAG,
LEN, MEI, NKE                                                                                   

Fri              KBM 


Econ Reports

Tues:  Case-Shiller,
FHFA Housing Price Index, New Home Sales, Consumer Confidence,

Wed:  MBA, Durable
Goods, Durable ex-auto, GDP, GDP Deflator

Thur: Initial Claims, Continuing
Claims, Personal Income, Personal Spending, PCE Price

Michigan Sentiment



Tues –   

Wed –   FR:
Business Climate

Thurs – JP: CPI,
Unemployment Rate, GB: GDP  

Friday –DE: CPI, EMU: EC
Economic Sentiment, FR: PPI, Consumer Mfg Good

Sunday –  JP: PMI Manufacturing, Industrial Production


How I am looking to

Today – added shares of
AAPL, Added Short Puts to BIDU and will add short puts to Micron (June 33
against July Long Puts at 32)Addded more Bull Puts on SNDK 97.50/100 looking to
see SNDK hold “round” number $100 support.
I WILL be adding long puts on V and NVDA tomorrow


Right now I feel like I
am letting a lot of stocks Run – AAPL, CLDX, DIS, D, TSLA, F, NVDA, VZ, V,


Collar: BIDU, MS, SBUX,
BBY(exploding collar)


Covered Calls: ½ AAPL
positions, TSLA, SNDK Jul 87.50 with a 6.36 credit (?) and Bull Puts


Stock only
positions:  AAPL, DIS, D, F, VZ, V, LNCO,


Protective Puts: MEI,
NVDA (18 July from earnings), MU





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