Trade of the Day (GDXJ) 3.6.2012

Unprofitable: This trade is unprofitable if GDXJ closes under $24.60 by April 20, 2012.  The most this spread can be worth is $1 minus the $.40 I sold it for, so my maximum loss is $.60.  I am risking $60 per 1 lot to make $40 on this spread.

Reason I Like This Trade: When GDXJ was trading $25.58, I saw someone sells 4250 GDXJ April 26 Puts for $1.50.  A also saw someone sell 2500 GDXJ March 28 Puts for $2.50 and then buy 2000 GDXJ March 27.63 Calls for $1.  This is very bullish activity, so I wanted to get LONG the GDXJ. 

UPDATE 3.9.2012 This is very similar to my DNDN trade, I am not taking profits, even though this trade is working out very well so far.  I continue to play to the upside in many stocks, but always defining my risk vs reward.

UPDATE 3.12.2012 With GDXJ with overlapping bars, I think that GDXJ has limited downside, so I will leave this Put Spread on for more potential profit.

UPDATE 3.15.2012 With time on my side, this trade has decreased in value even though GDXJ is the exact same level than where I sold the Put Spread, so I will leave this trade on for more upside potential.

UPDATE 3.22.2012 With Gold, Silver, and Oil all gettuing crushed, the Put Spread is now worth $.55, but I will leave this trade on as I think there will be Gold buyers coming into the market very soon.

UPDATE 4.9.2012 Another stock I am glad that I sold Put Spreads instead of Puts.  This spread will mostly expire worth $1, and the train moves on.  Will be sitting on the sidelines on the commodity based Longs for awhile.  

UPDATE 4.23.2012  I saved myself some money I worked out of the Spread when it was worth $.85, moving on to the next trade.

Halftime Report for 3.6.2012

The DJIA is trading at two week lows around 12,750 (DJIA 12,678 is both uptrend support from OCT lows and the 50DMA.) Kraft foods is the only DOW stock trading in the green today. ES futures are down 21 pts or 1.5% at 1343.5. Also, EUR/USD is trading at session lows around the 1.31 level. The Long End of the yield curve is flattening out which means risk ahead? Are we still pricing in QE3? Crude Oil is trading at session lows around $105 as the Iran threat is disappearing. Defense Secretary Panetta states, “the US will take military action to prevent Iran from using Nuclear Weapons.” S&P VIX SOARS and is up $2.84 or $20.84 level.

“iPad 3” media event to be held in San Francisco on Mar 7th. iPad hype consists of 4G LTE that will boost video watching capability, high resolution retina display screen, and a rumor that iPad3 will have SIRI support. Total iPad shipments are expected to grow by roughly 20 million units in 2012. Apple is trading way off of its $516 daily lows at the $529 level.


A customer sold 37,624 XOP April 50 Puts for .81; this could be against a long stock position.
By Greg Zimny

AAPL IPad 3 Rumors, What to Expect???

The third-generation iPad is expected to have a screen resolution of 2,048-by-1,536 pixels, which would be a pixel density double that of the current iPad 2. It’s also a resolution greater than a 1080p high-definition television set.

  • Though the current iPad 2 Smart Cover protects only the glass touchscreen of the device, Apple is rumored to be working on a new case that will also feature a rear shell.
  • Total iPad shipments are expected to grow by nearly 20 million units in 2012, with Apple’s third-generation iPad expected to lead the way with 40 million total units


  • (CAMERA) – I’ve heard some rumors saying that it will feature the same 8MP camera sensor as the iPhone 4S. This would make for an amazing camera on the tablet.
  • (A5X Processor-the iPad 3). The A5X would likely be a dual-core chip that is an upgrade from the A5, but not quite the boost many of us expected in the form of an A6 processor.
    • (Ipad3 SIRI SUPPORT)- This is possible, but I’m not as willing to bet on it as I am LTE and a Retina display. It makes sense given that Apple will likely want Siri on all their devices in the future as they continue to create a uniform environment across their operating systems
    • (iPad mini in future)??     We’ve heard time and time again that Apple wants to release a 7-inch tablet

Movers and Shakers (ONTY) Down $3.05 (36%) to $5.32

Levels to Watch: Key levels to watch $4.7; Sold 14,000 Mar 5 Puts for $.30. Also, a key level to watch is $4.35; Sold the May 5 Puts for $.65.
Chart Glance:  Chart action looks like a strong gap down into no man’s land. In the ONTY Conference Call, a female representative responding to all of the questions confirmed that the Stimuvax trial will continue. Stimuvax results are expected late 2012. Usually, when the results are “later than expected,” 99% of the time, it is not a good sign. Investors, Sell first and ask questions later. ONTY CEO is scheduled to present at the  2012 Cowen Conference. Finaly, ONTY had a huge short interest going into Earnings today. I wonder how many of those shorts covered?
Vol is now down 132 pts.
By Greg Zimny

Morning Rage 3.6.2012

After the Bell:

P -quarterly earnings and estimates (Q4E)- $.02 Quarterly Revenue Estimates (Q4E)-75M. 52 week range of $9.15-$26. Stifel Nicolaus & Co.boosted its rating to a “BUY” from a “HOLD” with a price target of $18. Many analysts believe revenue will increase 50% annually over the next five years. Pandora is not profitable at the moment so there is no PE. However, analysts believe Pandora’s earnings will finally be profitable this year.

By Greg Zimny

Cam at the Close 3.5.12

Apple closed down 2.15% to $533.55. It is still very much in an uptrend and until $527 breaks, investors shouldn’t have anything to worry about. The SPY gapped down about 30 minutes into trading and made a low at $136.28. It rallied back and closed at $136.81. Last night around 1am Pacific Time; Dow Futures were off 70 points. The Dow only closed down 15 points at the end of the cash session today. The S&P is up over 8% so far this year. The SPY looks like it has broken down from its 12/19/11 – 3/2/12 trend but more time is needed for confirmation. Google was down 1% to $615.08.

Written by Cam Patrick

Halftime Report for 3.5.2012

Apple shares are under selling pressure as investors are taking profits before the iPad 3 release this Wednesday. From a Retina display rumor to a much better camera rumor, I predict that shares will continue to decline after its iPad 3 release. Ipad3 hype will disappoint in my opinion. An Apple TV and issuing a dividend can really be a positive growth driver in the future for Apple.

VALE- we saw massive Put buying today in all months. This could be against long stock position, therefore, Andrew Keene is staying away.

Arco- or “Arcos Dorados,” Latin America’s largest restaurant chain, reported revenues that increased by 21% YOY. Shares are trading lower by $1.04 or (5.01%) at the $19.73 level. Day’s range is $19.6-$21.2, 52 wk range of $17.62-$29.43.

By Greg Zimny

Movers and Shakers (MCP) Up $0.80 (3.87%) to $25.50

Chart Glance: MCP passed a major downtrend channel and after confirming a higher-low double bottom, we believe the slowdown in rare earth metals due to the Chinese New Year has finally bottomed. It appears this could be a complex inverted head and shoulders pattern.

50 DMA- $27.67 100 DMA- $30.85 200 DMA- 41.78

Support 1: $24.5 Support 2: $23.05 Support 3: $20.8

Reasons: MCP got flushed from $29-$24 on better than expected earnings. In my opinion, the only negative was their earnings power was going to be in Q1 2013 instead of Q4 2012. As of February 15th, MCP float was 56.9 Million shares, 18.3 Million reported short shares. Any positive news flow and the shorts could be in real trouble. MCP options are extremely liquid as we saw a customer bought 1700 Mar 27 weekly Calls. Implied Vol was up 3% to $54. Also, Morgan Stanley reaffirmed its “overweight” rating on MCP. With MCP near its 52-week lows, and MCP is projecting to increase revenues at more than 50% this year and more than 75% in 2013. Finally, In my opinion, I would start building a position at these levels. I would use hedge-income strategies and start selling a portion of your long position prior to the next earnings report.

Morning Rage 3.5.2012

Keep an eye out for todays Service ISM number and factory orders.

Monday before the Bell:

ARCO- Quarterly Earnings and Estimates (Q4E)- $.23 and Quarterly Revenue Estimates (Q4E)- $984 Million. Arco is trading in a tight 52 week range between $17.62-$29.5. In my opinion, Arco is still expensive but if they report double digit growth again and provide a positive outlook then the PE will adjust accordingly. However, with the currency related implications, Arco could potentially miss in earnings.

By Greg Zimny