HI Financial Services Mid-Week 04-29-2014
What has been happening
so far this week?
Two great moves up
to continue the trend from last week. I
will admit that we have been on a roller coaster this year in the market. Professionals call it trading in a range
while individuals call it volatility.
Today we are really close to the top end of the range on the DJIA of
16,600 and approaching the 1900 highs on the SPX from last year. Ukraine came up over the weekend and
sanctions on Russia was also a worry over the weekend. We are in a range but bounced higher in the
middle of the range this week. With a
lot of economic reports and with the FOMC fed chair Yellen directing her second meeting, we could
have a trend change. I will not try to
outguess the market but I am glad I have stocks collared for earnings. Did you notice the markets are not selling
off before the FOMC meeting like they did last time.
Where will our market
end this week?
We are at the top of the range on the DJIA and close to the
top on the S&P 500. The big question
is are we going to break out of our range?
Earnings has NOT been able to push us higher. Economic news has not been able to move the
markets out of the range. World markets
have not been able to push us higher.
How about FOMC meeting tomorrow?
I think tomorrow is “the day”!
There are two reasons that make me think we can break out of the trading
range our market has been in for the year.
Yellen is in for her second meeting, BUT she is NOT in front of the camera. She now knows, through the school of hard
knocks, how the market will react to her comments. The market wants tapering but at the same
time we want to know interest rates will “remain low for an extended period of
time”. She has to define “extended” and
she has to do so in a simple to understand, defined time frame. That is what will be scrutinized in the transcript tomorrow. GDP is tomorrow and the bar is set low due to
the weather. Any kind of beat or big beat sends the market
running higher. I honestly believe we
have the bar set low enough that we can allow the market to run higher. I am looking to see a flat to slightly
bearish move tomorrow until after Yellen speaks and then the market is off to
DJIA– Here we go to the
16,600 level for another test to see if there is a catalyst to break it. Technically speaking we are bouncing off the
median line on the RSI giving the index room to run. We also had a bounce off the 50 day SMA. I see strength in today’s market.
SPX – Moving back to
test 1900 and yes we are also technically bullish again on the S&P. Now we are not quite up to the 1900 but we
are close. We also have run to room with the RSI signal line bounce off the
COMP – We are creating
higher lows and we need to see higher highs.
I would call the Nasdaq in no man’s land right now stuck between the 50
day and 200 day SMA.
Where Will the SPX end April
04-29-2014 I have one
day to get my 1900 prediction correct.
It all comes down tomorrow and I would be happy with the market being at
04-22-2014 Let’s plan on
1900 to end on. It seems like it is
heading that way and no real news to push us any other direction. Pay close attention to the FOMC meeting next
Wednesday when Yellen speaks again.
04-15-2014 I would feel
lucky if we hit 1900 by the end of the month but I believe it all depends on
We hit 1900 the first
week of April. We hit my expectation but
we sure didn’t hold it worth beans. I am
still going to follow the trend and call 1900 to be at by the end of the month
of higher. Now if earnings don’t come in
like we expect or worse than expected economic news occurs we could be looking
at a much lower SPX number. Right now it
hasn’t occurred so I won’t speculate and screw up my trading.
We are starting a new
quarter which normally means buying for funds and re-establishing
positions. The market received very dovish comments
by Yellen and earnings season starts with low expectations. Let’s shoot for 1900 again.
What is on tap for the rest
of the week?=
EBAY, TWTR, DDD, BSX, BMY,
COH, DNB, FISV, S, VLO
ABX, H, TSO, TWX, YELP
XOM, COP, LNKD, BZH, DPZ, FLR, K,
Housing Index, Consumer Confidence
Wed: MBA, ADP
Employment, GDP-Adv., China Deflator, Employment Cost Index, Chicago PMI, FOMC
Thur: Initial Claims, Challenger
Job Cuts, Personal Income, Personal Spending, PCE Prices, ISM Index, Consumer
Spending, Auto, Trucks
Ave Workweek, Non-Farm Payroll, Private Payroll,
Unemployment Rate, Hourly Earnings, Factory Orders
Tues – JP: BOJ Announcement, GB: GDP, EMU: EC Economic Sentiment, JP: PMI Manufacturing, Industrial Production
Wed – DE: Retail Sales, FR: Consumer Mfgd Goods Consumption, EMU: HICP
Flash, CN: CFLP Manu PMI
Thurs – GB: CIPS/PMI Manufacturing, JP: Unemployment Rate
Friday – FRE:EMU:GB:
Sunday – CN: PMI
How I am looking to
GO collar trade GO!!!
BIDU – It doesn’t make sense
but it’s earnings say it is going higher.
Let’s protect the position thru the summer when volatility should get
higher or people sell in May then go away.
Stock ownership @ $
127.55 cost basis
What is the risk in the
trade? EVERY PENNY = $127.55
To protect the stock I
bought a July 155 Long put for $10.296
New cost basis? 127.55 +
Risk in trade? = Right
to sell @ $155 and cost basis of $137.85 = -$17.15 RISK FREE
To lower the cost of my
protection I sold a September 185 short call for a credit of $5.87849
Overall risk = Max
Profit = 17.15 + Credit of $5.88 = $23,03
I also do this for other
positions as well in the portfolio
DIS average stock price $70.40
with the right to sell @ $80 per share
V average stock price
$193.03 with the right to sell @ $220 per share
ZION protected to
protect almost a 50% gain on the stock with the right to sell @ $31
AAPL 4/23 AMC EPS-$10.14
BA 4/23 BMO EPS-$1.56
BIDU 4/24 AMC
CAT 4/24 EPS-$1.25
CLDX 5/01 BMO Estimated
D 4/30 BMO EPS -$0.97
FB 4/23 AMC EPS-$0.24
LNCO 5/01 BMO EPS-$0.52
MS 4/17 BMO EPS-$0.61
SNDK 4/16 AMC EPS-$1.25
TSLA 5/07 estimated
ZION 4/21 AMC EPS-$0.42
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