UPDATE 9.21.2012 This Spread gave me a little bit of a sweat, but it went out worthless, moving to the next trade.
Author: Andrew Keene
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Chris Cruises the Globe 8.30.2012
China’s Hang Seng lost 1.2% to close at its lowest in a month. China is hovering around 3 year lows, weighed down by disappointing bank earnings and property stocks. Turnover was also weak as investors hold off yet another day for Bernanke’s speak tomorrow. Agricultural Bank of China, the third largest lender, slid2.7% due to a bigger than expected margin decline. The Industrial and Commercial Bank of China and the Bank of Communications both posted weak first-half results today, slipped 1.9 and 3.5% respectively. In property, Sino Land dove 5% to its lowest in a month, and was the property sectors biggest loser today.
In Europe the FTSE 300 is currently down 0.4% with volumes at 10% of their 90 day moving average ahead of Jackson Hole. Carrefour was the big name in Europe today gaining 7.9% on better than expected results. The world’s largest advertising group, WPP, sank 2.8% today due to cautious customer demands. Their peer, PublicisGroupe, was also dragged down losing 2.1%. Around Europe the DAX is down 0.8% and the CAC 0.5%. The Madrid general was just over 1%.
Heineken is set to release two new beers in select N. American markets; Amstel Wheat and TecateMichelada.
Volvo plans to cut production 10% and slash jobs as a result of lower sales.
Commodities begin bleak with crude, natural gas, gold and silver all down.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
Morning Rage 8.30.2012
Google (GOOG | 688.01 [+10.76]) moves higher at opening yesterday and continued to move higher throughout the day. It has reached its highest level since the final quarter of 2007. After the Apple lawsuit results broke Monday, analysts expected GOOG to be hurt by restrictions on Samsung phones. GOOG had a steep decline of about 15 points at the bell on Monday. Those who sold on Monday learned a valuable lesson, as the stock jumped almost ten points from last week and twenty points from Monday.
S&P Futures (1402.00 [-0.50]) trading below fair value as the market continues to be inactive. The S&P (SPY | 1410.49 [+0.08%]) hasn’t closed with a one percent move in either direction since August 3rd.
Traders are waiting for Federal Reserve Chairman Ben Bernanke’s speech Friday in Jackson Hole, WY. Also to be announced this week, U.S. jobless claims estimated to stay within the range of 365k to 375k. Claims have been down since mid-April, by almost 100k. Jobless claims measures the number of individuals who have filed for unemployment insurance for the first time, making it a poorer measure of economic health in an economy with high unemployment since 2009. The report is released at 8:30am EST.
Alex Kalish has a masters in economics from Suffolk University.
S&P Emini & Unusual Options Activity Daily Vid Recap 8.29.2012
S&P Emini Pivot Points for 8.30.2012
Euro (6E) and Oil (CL) Pivot Points for 8.30.2012
Trade of the Day (GDXJ) 8.29.2012
UPDATE 9.21.2012 I wish I held these Calls until Expiration, because they went out $3.50, good for 10 times my money. Moving on to the next trade
How Will Jackson Hole Affect Gold? 8.29.2012
During this period, gold went up from an average of $841.75 to its all time high of $1917.90 on August 2011, which is an increase of 227% over a 3 year period. This shows an explicit relationship between QE announcements and gold. The key question remains: will there be an announcement of QE3 on Friday? Recent increases in commodity prices of gold, silver, and platinum suggest there is something on its way. In my opinion, no actual implementation of a QE3 will take place, but there might be an extensive discussion of the possible actions that are available to the FED. If you take a closer look at the market you can see that consumer confidence is stable, the market is testing its 2012 highs, housing is improving and inflation is right around 2%. Why intervene? Will an announcement of inaction affect the gold market?
It is likely in the short-term, but in the long-term definitely not. The recent bull run in gold and the way it is consolidating right now, suggests there is more room for the upside. Also, current gold accumulation by Central Banks shows a growing interest in the metal over 2012, as the graphs below will show. The Central Bank appetite for gold hit a record in Q2 2012. Gold buying in Q2 2012 rose to 157.5 tons. On an annualized basis this means an astonishing 628 tons. There appears to be a solid floor under the gold price.
Morning Rage 8.29.2012
The Hang Seng slipped 0.1% being drug down by a 4.2% slide from Want Want China, a foodmaker. Although Want Want posted a better than expected first half profit of 38%, its revenue was still below expectations. The big trade to day comes from Permira, a European private equity firm, who sold a 750M dollar stake in Macau Casino. Evergrande, a Chinese developer, lost 3.1% due to falling margins as they cut prices to sell homes. China Life insurance was 2% after its chairman told reporters there were not promising prospects for increasing investment yields this year, it seems they appreciate the honesty.
The FTSE 300 is down 0.4% at the moment on weak results from French luxury goods companies L’Oreal and Bouygues. Bouygues slid 8% and was downgraded by Citigroup to sell. L’Oreal lost 4.2% and suffered a UBS bank downgrade to neutral from buy. Italian Bank Banca Monte deiPaschi di Siena lost 6% in an already troubled area. Around Europe France’s CAC is down 0.7%, the DAX 0.6% and the Madrid General 0.5%.
In commodities today energies are all currently starting down. Gold is also down, while silver is up 1.65%.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu