Rising $$$ - Yes, direct relationship of dollar moves to gold, oil, copper etc but also, to a lesser extent, to homes and stocks, which are also commodities.
If $600 of your dollars can buy 1 ounce of gold or 10 shares of VLO, what happens when an ounce of gold goes to $660? You get the same ounce of gold so you should get the same 10 shares of VLO, effectively adding 10% to the price of the stock. As your dollars become more valuable, the things you buy with them get cheaper and you need to convert less dollars in trade to get them.
The dollar index is down 10% since Nov '05 and gold is up 50% and housing is up 10% and copper is up 25% and the market is up 15%...
Of course a stronger Yen, Yuan and Euro make our stocks look even cheaper to foreign buyers who may not be so anxious to buy 10 shares of VLO for 20% more money just because our dollar retraces 33%.
TXU - that is a play we often make, especailly when a deal is subject to regulation and can drag on forever. If you remind me on the weekend I'll do a work-up on it.
I have no idea what's going on with PPD and neither do they according to this: biz.yahoo.com/prnews/0...
They were way underpriced though (making $50M on what was a $500M valuation), could be someone gearing up to take them out in a less than subtle way.
======================...
As I said before LEND was my ONE STOCK for the CNBC challenge game. I loved them at $5, not so wild about them at $9 but it's the same as NEWC and the others, there could be a very valuable portfolio in there so assuming the companies aren't worth 1/10 of what they were 6 months ago is very dangerous (even though I do think the whole thing is going to lead to a catastrophe).
MRO just a Goldman upgrade. Wait until a couple of these favored stocks blow up on people and call GS's ratings into question!
Tomorrow's action will be very telling on oil as $57.50 into the weekend could be the beginning of the end.
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Arnie - XOM I'm willing to double and roll but they do have a clear shot to $73 if things turn around. Maybe some VLO $60s to hedge a bit as VLO has been flatlining since the 8th. If something is going to take off, VLO could go up a buck or two very quickly.
Of course, when in doubt - sell half. If you're here tomorrow we should get a much better idea of where things stand but gosh what a mess the oil patch looks this week. Oil is down $3 since last Thursday and the May contract already fell below $60. All this is happening on a very weak dollar - what happens if the dollar bounces back the point it lost since last Thursday?
Maybe but it was a very suspicious sudden spike followed by a stready sell-off, 4th one today: 10:30, 12:30, 2:00 and 3:15, all followed by selling down to a lower level.
You would almost think someone who is dumping shares was pumping them up just before he dumped them but that would be dishonest so it must be just a coincidence....
There is no volume because no one is selling, not that people are buying, that's why it all dried up. If enough people just refuse to sell shares, you can support the market and even drive them up but it often leads to a gap down in the near future unless a real buying catalyst comes in.
As I've noted before, there is targeted Dow component buying on the big money components (which are heavy weighted) to prop up the index. AIG, AXP, BA, C, DD, JPM, MMM, MO, PG are 9 of the top 14 components by price (and top dog IBM is down just .19). Of the bottom 16 by price only 6 are postive and none by very much (GE is best).
GOOG is playing with fire - they can put up $10 in 5 minutes so I don't like the potential risk just to make .75.
I prefer a play like Selling the CME $540s for $3.80 against the Apr $550s for $15.30, it's good downside protection and if it goes in the money your Aprils are in good shape (CME has to gain $8 tomorrow for you to owe him .20).
GOOG doesn't offer anything near that kind of premium (because they didn't drop $28 today!).
March 15, 2007 Most economic forecasters believe recent turmoil in the subprime mortgage market is likely to spread to the broader mortgage market, according to a new WSJ.com survey, and forecasters also see home prices falling. But they still think the U.S. will avoid a recession.
Arnie - sell close April calls against them, buy out Mar and swap if you have to. If it goes up, cest la vie and you roll them, if it goes down you are well protected.
Even if you have an electronic broker, make sure you know how to call them in an emergency, send me a list and I'll check it for you by Email if you are going to be unable to look.
GOOG/APPL/QQQQs could have been competing prog trading, one buying, one selling hitting at once.
Today it looks like all the buyers were European...
There's something very wrong with the way people keep thinking that banks that hold regular mortgages are "safe." Every year a certain percentage of people "have" to move for one reason or another.
When a perfectly normal, well qualified family has to sell their house for $50K less than they bought it, they default just as much as the sub-primes. Not only that but when you lose $50K on the house you sell, you often end up going from homeowner to renter, which knocks down the demand for homes even further, forcing prices lower etc.... This is another thing the media will not tell you but anyone who owned a home in the early 70s could tell you all about.
Options Trader: Thursday Morning Ideas [View article]
If $600 of your dollars can buy 1 ounce of gold or 10 shares of VLO, what happens when an ounce of gold goes to $660? You get the same ounce of gold so you should get the same 10 shares of VLO, effectively adding 10% to the price of the stock. As your dollars become more valuable, the things you buy with them get cheaper and you need to convert less dollars in trade to get them.
The dollar index is down 10% since Nov '05 and gold is up 50% and housing is up 10% and copper is up 25% and the market is up 15%...
Of course a stronger Yen, Yuan and Euro make our stocks look even cheaper to foreign buyers who may not be so anxious to buy 10 shares of VLO for 20% more money just because our dollar retraces 33%.
Options Trader: Thursday Morning Ideas [View article]
I have no idea what's going on with PPD and neither do they according to this:
biz.yahoo.com/prnews/0...
They were way underpriced though (making $50M on what was a $500M valuation), could be someone gearing up to take them out in a less than subtle way.
======================...
As I said before LEND was my ONE STOCK for the CNBC challenge game. I loved them at $5, not so wild about them at $9 but it's the same as NEWC and the others, there could be a very valuable portfolio in there so assuming the companies aren't worth 1/10 of what they were 6 months ago is very dangerous (even though I do think the whole thing is going to lead to a catastrophe).
Options Trader: Thursday Morning Ideas [View article]
Tomorrow's action will be very telling on oil as $57.50 into the weekend could be the beginning of the end.
======================...
Arnie - XOM I'm willing to double and roll but they do have a clear shot to $73 if things turn around. Maybe some VLO $60s to hedge a bit as VLO has been flatlining since the 8th. If something is going to take off, VLO could go up a buck or two very quickly.
Of course, when in doubt - sell half. If you're here tomorrow we should get a much better idea of where things stand but gosh what a mess the oil patch looks this week. Oil is down $3 since last Thursday and the May contract already fell below $60. All this is happening on a very weak dollar - what happens if the dollar bounces back the point it lost since last Thursday?
Options Trader: Thursday Morning Ideas [View article]
You would almost think someone who is dumping shares was pumping them up just before he dumped them but that would be dishonest so it must be just a coincidence....
Options Trader: Thursday Morning Ideas [View article]
Options Trader: Thursday Morning Ideas [View article]
As I've noted before, there is targeted Dow component buying on the big money components (which are heavy weighted) to prop up the index. AIG, AXP, BA, C, DD, JPM, MMM, MO, PG are 9 of the top 14 components by price (and top dog IBM is down just .19). Of the bottom 16 by price only 6 are postive and none by very much (GE is best).
Options Trader: Thursday Morning Ideas [View article]
I prefer a play like Selling the CME $540s for $3.80 against the Apr $550s for $15.30, it's good downside protection and if it goes in the money your Aprils are in good shape (CME has to gain $8 tomorrow for you to owe him .20).
GOOG doesn't offer anything near that kind of premium (because they didn't drop $28 today!).
Options Trader: Thursday Morning Ideas [View article]
Dominos I'm watching:
BKX - +1.10
GE - +.25
XOM - -.26
TXN - 0
CME - -28.25 (5% rule)
BA - +.80
EBAY +.66
SHLD +.30
Uh oh, here's Cramer! Talking up the brokers and how great sub-prime is (they all reported the Q BEFORE the problems started).
He likes RIO, AA, BHP... what commodity bubble?
Options Trader: Thursday Morning Ideas [View article]
There is a MASSIVE effort underway to hold up the market despite everything. I'm very concerned about what will happen on Monday.
Options Trader: Thursday Morning Ideas [View article]
NEWS ALERT
from The Wall Street Journal
March 15, 2007
Most economic forecasters believe recent turmoil in the subprime mortgage market is likely to spread to the broader mortgage market, according to a new WSJ.com survey, and forecasters also see home prices falling. But they still think the U.S. will avoid a recession.
For more information, see:
online.wsj.com/article...
To see the full results of the survey, go to: wsj.com/Economists
Options Trader: Thursday Morning Ideas [View article]
Options Trader: Thursday Morning Ideas [View article]
Options Trader: Thursday Morning Ideas [View article]
Options Trader: Thursday Morning Ideas [View article]
Even if you have an electronic broker, make sure you know how to call them in an emergency, send me a list and I'll check it for you by Email if you are going to be unable to look.
GOOG/APPL/QQQQs could have been competing prog trading, one buying, one selling hitting at once.
Options Trader: Thursday Morning Ideas [View article]
There's something very wrong with the way people keep thinking that banks that hold regular mortgages are "safe." Every year a certain percentage of people "have" to move for one reason or another.
When a perfectly normal, well qualified family has to sell their house for $50K less than they bought it, they default just as much as the sub-primes. Not only that but when you lose $50K on the house you sell, you often end up going from homeowner to renter, which knocks down the demand for homes even further, forcing prices lower etc.... This is another thing the media will not tell you but anyone who owned a home in the early 70s could tell you all about.