Is the European banking system about to implode? I'm seeing lots of talk about this being Brexit related, but looking at the Italian banking fiasco and seeing the movement of all the European banks there has to be something else big going on.
Stock Markets
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Last: 5 hrs ago by Eliminatus
Deutsche Bank is down 50% on the year as I remember. The European banks are getting hammered. I suspect Brexit will prove worse for the EU than Britain.
Jake, you are right that negative rates are horrible for banks! Hell, a flat yield curve is bad for banks but negative? A real disaster is brewing!
Wow! Great call!
Oldarmy is effing awesome.
The status of bonds is certainly an indicator of the health of the economy, however, with interest rates low or negative, and yields abroad negative, the search for safety and yield leads many to US bond market. Still, I expect A bad Q2 for earnings and with the dollar strength, low to no economic growth domestically, a slow China, and a dismal Europe, Q3 is setting up to be worse. Add uncertainty and potential crisis all over the globe, longing tops seems dangerous.
I am starting to question that bond markets know what is going on. They are probably correctly predicting low inflation and low growth, but how do you figure it is predicting a major correction?
I do realize a major correction can happen, but how many times has the bond market really gotten it right using the same data we are now?
We had negative yields in early 2009, and that was the bottom of the market. The last low on the 10yr treasury was in 2012, and the stock market it up over 50% since then.
Here is what I have seen lately that makes me concerned about bonds. We are at record lows here and abroad. Which means that you have made a lot of money in bonds versus the yield. 10 years ago, you could get about 2 - 2.5% on a 10yr treasury, but a Gvt bond fund/ETF did close to 5%. If the market did twice the performance over the average, we would scream major correction. Heck, the YTD return is way over the yield.
If we agree that bonds are overpriced, then how can they be used as a predictor as to a market correction.
Maybe people mean that it is a caution flag and to look at other charts/figures to get a direction.
I do realize a major correction can happen, but how many times has the bond market really gotten it right using the same data we are now?
We had negative yields in early 2009, and that was the bottom of the market. The last low on the 10yr treasury was in 2012, and the stock market it up over 50% since then.
Here is what I have seen lately that makes me concerned about bonds. We are at record lows here and abroad. Which means that you have made a lot of money in bonds versus the yield. 10 years ago, you could get about 2 - 2.5% on a 10yr treasury, but a Gvt bond fund/ETF did close to 5%. If the market did twice the performance over the average, we would scream major correction. Heck, the YTD return is way over the yield.
If we agree that bonds are overpriced, then how can they be used as a predictor as to a market correction.
Maybe people mean that it is a caution flag and to look at other charts/figures to get a direction.
I have entered a long position in KMI. Kinder Morgan, based in Houston IPO that rose above $40 before getting in the cross hairs of horrific timing. I see this stock being a big winner as oil stabilizes above $45.
TWTR has recovered their entire post-earning loss by filling the gap. I have been long TWTR with larger buys on the basing action under $14. The base formed is quite strong signaling a larger move higher coming over the next quarter for TWTR. The way I invest is to take larger positions on stocks I want to hold longer term and trade/move shares to offset my holding shares. I will do this until I own my long term holding at a "net zero" cost basis or greater. Therefore with the gap being filled, and the natural potential for a pullback after filling, I just sold the July 15 covered calls at a strike price of $17.50 at a premium of $0.58 or $58/100 shares, $580/1000 shares. 5k shares gives me a $2900 premium paid for my covered calls. If called out the effective sale price would be $18.08. If the shares are at or below $17.50 by expiration next Friday then I have reduced my average share price by $0.58.
This is my top strategy for investing long.
TWTR has recovered their entire post-earning loss by filling the gap. I have been long TWTR with larger buys on the basing action under $14. The base formed is quite strong signaling a larger move higher coming over the next quarter for TWTR. The way I invest is to take larger positions on stocks I want to hold longer term and trade/move shares to offset my holding shares. I will do this until I own my long term holding at a "net zero" cost basis or greater. Therefore with the gap being filled, and the natural potential for a pullback after filling, I just sold the July 15 covered calls at a strike price of $17.50 at a premium of $0.58 or $58/100 shares, $580/1000 shares. 5k shares gives me a $2900 premium paid for my covered calls. If called out the effective sale price would be $18.08. If the shares are at or below $17.50 by expiration next Friday then I have reduced my average share price by $0.58.
This is my top strategy for investing long.
Looking at the following and would appreciate input oldarmy.
PSX
DAL
AMD
PSX
DAL
AMD
For those learning about covered calls, you can use this real time posted example to further education. TWTR was at $17.60 when I posted the covered calls sells at $0.58. That is $58/option which represents 100 shares. TWTR along with macro market has come back down and now those same July 15th options are priced at $0.42 or $42/option. So the traders who bought my calls for $58 each are now holding options valued at $42. And dats the way it works!
BTW - If I cared to I could buy those calls back and take the $16/option profit. Just an example as to how it works but not something I would do.
BTW - If I cared to I could buy those calls back and take the $16/option profit. Just an example as to how it works but not something I would do.
quote:I've tried this strategy, and I think it is a good one. But I can't tell you how many times my underlying stock has lost 20-30% or more.
I have entered a long position in KMI. Kinder Morgan, based in Houston IPO that rose above $40 before getting in the cross hairs of horrific timing. I see this stock being a big winner as oil stabilizes above $45.
TWTR has recovered their entire post-earning loss by filling the gap. I have been long TWTR with larger buys on the basing action under $14. The base formed is quite strong signaling a larger move higher coming over the next quarter for TWTR. The way I invest is to take larger positions on stocks I want to hold longer term and trade/move shares to offset my holding shares. I will do this until I own my long term holding at a "net zero" cost basis or greater. Therefore with the gap being filled, and the natural potential for a pullback after filling, I just sold the July 15 covered calls at a strike price of $17.50 at a premium of $0.58 or $58/100 shares, $580/1000 shares. 5k shares gives me a $2900 premium paid for my covered calls. If called out the effective sale price would be $18.08. If the shares are at or below $17.50 by expiration next Friday then I have reduced my average share price by $0.58.
This is my top strategy for investing long.
Some people have it, some don't. I apparently don't.
quote:
I have entered a long position in KMI. Kinder Morgan, based in Houston IPO that rose above $40 before getting in the cross hairs of horrific timing. I see this stock being a big winner as oil stabilizes above $45.
TWTR has recovered their entire post-earning loss by filling the gap. I have been long TWTR with larger buys on the basing action under $14. The base formed is quite strong signaling a larger move higher coming over the next quarter for TWTR. The way I invest is to take larger positions on stocks I want to hold longer term and trade/move shares to offset my holding shares. I will do this until I own my long term holding at a "net zero" cost basis or greater. Therefore with the gap being filled, and the natural potential for a pullback after filling, I just sold the July 15 covered calls at a strike price of $17.50 at a premium of $0.58 or $58/100 shares, $580/1000 shares. 5k shares gives me a $2900 premium paid for my covered calls. If called out the effective sale price would be $18.08. If the shares are at or below $17.50 by expiration next Friday then I have reduced my average share price by $0.58.
This is my top strategy for investing long.
I'm in KMI long and agree I think it's well positioned in a recovery. I've been considering buying more shares to lower my cost basis... I'm a bit confused about your covered call strategy as I'm a bit new to them but I'm trying to understand the 2 scenarios.
So you sell a call at 17.5 with a strike date of 7/15 and purchase stocks at 18.08.
If the stock is above 17.5 it is likely called and you lose the stock and keep the premium (potentially missing out on gains of the stock but oh well...)
If the stock is below 17.5 you keep the premium and the stock reducing your cost basis.
With your desire to go long, is this mostly just a play that the stock won't make major gains prior to the strike date?
EDIT: Nevermind I see you're 17.5 price was based upon a TWTR call
Remember, in the case of stock being above strike as you near expiry, that you have theta (time decay effect on options pricing) on your side as the call seller. Buying back the call is always an option that should be evaluated and many times can be done for less than what you sold the contracts for originally. That way you preserve some of your income as well as maintain your low(er) cost basis position.
Right. I only sell a covered call on those shares I want to part with anyways. If they get called out it's fine because I got what i wanted from $14 buy in, in this example. A net $18.08 sell price.
But I am just as happy to have the stock sideways channel bound. Then I capture the premium, still own those shares and can turn around and do it again.
Entry price is important. Looking at KMI I entered because it formed a solid base support but is still nearer lows.
But I am just as happy to have the stock sideways channel bound. Then I capture the premium, still own those shares and can turn around and do it again.
Entry price is important. Looking at KMI I entered because it formed a solid base support but is still nearer lows.
Oldarmy - do you have an options strategy for short positions?
Anybody get lucky with Celator stock (CPXX)?
was in $1 range back in march, now $30 range.
was in $1 range back in march, now $30 range.
KMI and EPD are two of my largest positions. I consider them one decision stocks and core holdings.
Oil below 45.82 is not pretty
quote:I often use put options looking to enter a short position but generally opt to sale half to 100% of short positions, depending on market conditions, versus using options. That said, the longer the sideways action continues the more I hedge because once everyone and their dog can see it happening it's likely to end.
Oldarmy - do you have an options strategy for short positions?
Today is actually an example of where I used such a call hedge against a short position. We had a crossed day. Opened down -shot up - dropped down. I have no idea if something bigger is about to occur but I do not want to exit any shorts taken as we approached 18k again today. Since the markets dropped and sent short positions into a quick positive position I bought cheap call options expiring tomorrow. It set up perfectly - certainly not planned. Now I can see where we go tomorrow with risk abated.
quote:DAL
Looking at the following and would appreciate input oldarmy.
PSX
DAL
AMD
I never trade/invest in airline shares. Take a look at those volume spikes and I'd be buying the underlying major support on any down days. You have double and triple average volume shares traded last 10 days. Now what I would rather see someone do is see that triple volume day the day after the double volume day and enter that day. Classic "V" bottom indicator and that's exactly what occurred.
PSX
This stock is trading right in line with the major sideways markets. I have trader PSX buying under $73 and selling at $83 two times on the action. It's coming back down towards that $73 mark again but notice the resistance marks coming down each successive wave. I am done trading it and will not enter this time. I actually wish I had included it in building a short position.
AMD
Very nice chart over the last quarter. Were you in this? Congrats if so. I'd take profits or use the covered call strategy if I had entered this stock anywhere in the $2-3 range. The crooked "crown" above $5 along with the sloping higher average daily volume shows a probable pullback coming. If looking to enter I would target back to the May $3.65 major support mark.
Appreciate what you're doing on this thread for everyone.
Any thoughts on jobs report tomorrow? The trend is down going from 186K in March to 123K in April to 38K in May. Unemployment rate is 4.7%
quote:No clue. It hasn't moved the markets recently. One additional comment on PSX. While I'm done with it you can see the high volume last few days which tells us the support buyers are seeking another bounce. My comment on the charts was in question to going long to hold. That is not a chart I'd be going long on even though a quick trade set up is forming.
Any thoughts on jobs report tomorrow? The trend is down going from 186K in March to 123K in April to 38K in May. Unemployment rate is 4.7%
Futures have been slow and boring tonight but at 9 once news of the Dallas shooting broke, they broke down. Not a big deal only down 4pts. I always find it interesting how the market reacts to news.
Futures +122
Exciting day ahead
Exciting day ahead
BTW- should we break the 18k mark that trumps all other analysis. The "all boats rise with the tide" kicks in. That doesn't mean stocks showing weakness match pace with leading stocks. But it does most likely mean they push higher.
On shorted positions, Call options against shorts allows painless watch today, as described last night. It's why you hedge on the cheap!
Happy trading.
On shorted positions, Call options against shorts allows painless watch today, as described last night. It's why you hedge on the cheap!
Happy trading.
S&P at 2112...what a Rush
Have a smaller position in Sprint (S) that's only up 15% from entry but it has a classic bull cup and handle and testing upper range of that $4.50 resistance. Markets hold gains or advance look for explosion upwards. A very good options trade out to next Friday on the $5 calls IMO.
3 cents max bid on those calls. Do NOT pay 6 cents for the 15th expiration when you could have the July 22nd $5 for 6-7 cents!
3 cents max bid on those calls. Do NOT pay 6 cents for the 15th expiration when you could have the July 22nd $5 for 6-7 cents!
VIX dropping pretty hard and well below $14
Do we hit all-time highs today?
quote:18288 on a flash move?
Do we hit all-time highs today?
Look at those "v" reversals and note that red one that could never be broken upwards. Same on the green bottoms that didn't break lower. We have the orange that is still not broken upwards through resistance so nothing is triggered in terms of absolutes. I posted my thoughts on if we broke 18k that we would have another bull leg higher but that is not a trade confirmation until/unless A) We close above 18k today, B) We do not fall below 18k in the first 60 minutes Monday and C) We break above the sorely obvious resistance even my grandmother can point to on the charts.
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