Additionally, this winter’s warm temperatures did not help spark demand for coal. China’s coal demand has been on a negative slope too. On Monday S&P downgraded their credit rating from B- to CCC+. JRCC has a market cap of $105.07 million. Analysts have suggested that JRCC may have operating challenges given that their return on assets of -2.9%, relative to their competitors with an average of -.7%. JRCC also trades at a lower price/book ratio than the average of competitors.
Author: Andrew Keene
Morning Rage 6.27.2012
MBA purchase applications came in today with more loss showing the composite index down 7% from last week and the purchase index down 1%.
Natural gas and silver are continuing in the green this morning, while gold and crude are currently trading 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
S&P Emini Pivot Points for 6.27.2012
![Chart Blue Derivatives Options](images/Chart_Blue_Derivatives_Options.png)
Keene at the Close 6.26.2012
There is only one thing that came out of today, the stock market is stuck in a range. I do not think that the market will be able to break out through the 1280 level to the downside or above the 1350 level to the upside. We saw positive news on NWSA as they are considering spinning their printing and media into two companies and the stock raged higher to $21.50 before coming off at the end of the day. Also, we see the EUR hovering around this 1.25 level looking for a breakout and I continue to be short the EUR. Earnings that I will be looking at for tonight and tomorrow before the bell are GIS, HRB, LEN, and MON. I think the more we have slow days like today, the more the market will be stuck in a range and I am playing it accordingly
Trade of the Day (LEN) 6.26.2012
Unprofitable: I lose money on this trade if LEN closes above $28.39 July 20 on, 2012. The most I can lose on this trade is the amount the Spread can be worth $1 minus the price I sold it for $.39 for a total of $.61.
Risk: $61 per 1 lot
Reward: $39 per 1 lot
Chart: Bearish overall has seen selling pressure above this level
Notes: I am playing to the downside and I will make money on this trade if the stock goes down, flat, or up less than 8% on earnings. It is currently implying a 11% move tonight.
UPDATE 6.27.2012 The stock is rallying, but the volatility is collapsing and the Spread is now worth $.52. I will leave it on and hope LEN moves under the $28 level.
UPDATE 7.2.2012 This spread went rogue and is now worth $.85. Since it can only go to $1, I am not taking it off, but I am also not looking to add to it. Just sit and maybe LEN will sell-off until the end of July.
UPDATE 7.5.2012 This Spread is still worth $.85, but I will leave this trade on as I think the stock market could sell-off. I will be looking to take this trade off.
UPDATE 7.9.2012 This Spread is worth $.80 and if we continue to sell-off I will be looking to take this trade off for a small loser.
UPDATE 7.21.2012 The reason I like to sell Spreads is because I can always define my risk vs reward. In this trade I was willing to risk $.61 and that is what I ended up losing as the Stock spiked higher.
Read more about options by www.keeneonthemarket.com
Halftime Report 6.26.2012
In commodities, corn futures continued to rise on weather across the U.S. December corn rose 20.5 cents to $6.145 per bushel. WTI crude futures fell 53 cents to $78.68 and gold futures fell $16.60 to $1571.80.
The for profit education institution Apollo Group, Inc. (APOL) rose 9% after better than expected earnings.
News Corp (NWS) gained 6% as talks emerged that they would split into two separate companies, one for film, and one for print and online news.
Zynga (ZNGA) peaked up almost 3% in morning trading in anticipation of its release of new products.
Movers and Shakers (APOL) 6.26.2012
Apollo Group runs for-profit colleges, most notably the University of Phoenix. They posted a net revenue of $134.0 million or $1.13 per share. Although the recent net revenue was lower than last year’s $212.4 million and $1.51 per share, the earnings beat analysts’ expectations. Student advisory services increased 2.6% since the previous quarter to $470.1 million. Marketing costs decreased from 1.3% to $158.9 million due to lower advertising costs. Their profit for the year will be as high as $740 million, above the previous consensus of $725 million and revenue will be in the range of $4.2-4.3 billion.
Apollo Group Co-CEO said, “We are focused on delivering the best possible experience and service to support working adults, to address workforce needs, and to strengthen the connection to careers for our students.”
Morning Rage 6.26.2012
European shares are up and down, fighting worries surrounding the Eurozone, with most indexes
currently within .25% of where they began. The FTSEurofirst 300 is currently down .05% after being
up as much as 3.98%, being drug down by auto stocks. In the UK May budget deficits Jumped to 17.9B
Pounds from 15.2B a year ago.
Amazon will be launching its second generation of the Kindle fire July 31, this new version will have a
camera among other new features.
Morgan Stanley’s shares are hit in pre-trade, down 2%, after being downgraded to neutral from buy by
Goldman Sachs, while upgrading JPMorgan to that buy spot increasing their shares 1.6%.
Anheuser-Busch is a company to keep an eye on as they try to acquire Corona maker Grupo Modelo.
Corona is the 5th largest selling beer in the world and would increase Anheuser-Busch’s share of the US
beer market to 52%.
Commodities are looking up today, for once they agree gold, silver, natural gas, and crude are all in the
green.
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
S&P Emini & Unusual Options Activity Daily Vid Recap 6.25.2012
![Bloomberg Market Research Options.png](images/Bloomberg_Market_Research_Options.png.png)
Trade of the Day (APOL) 6.25.2012
Unprofitable: I lose money on this trade if APOL closes above $35.30 June 29 on, 2012. The most I can lose on this trade is the amount the Spread can be worth $1 minus the price I sold it for $.30 for a total of $.70.
Risk: $70 per 1 lot
Reward: $30 per 1 lot
Chart: Bearish overall has seen selling pressure above this
Notes: I am playing to the downside and I will make money on this trade if the stock goes down, flat, or up less than 8% on earnings. It is currently implying a 11% move tonight.
UPDATE 6.26.2012 This Spread is now worth $.48, but it is all over the place. I think APOL can sell off under the $35 level.
UPDATE 6.27.2012 This Spread and stock sold off this morning and I could have covered it for $.39, but for some reason I left it on. I will look to take off half if the stock moves lower.
UPDATE 7.2.2012 I am glad that I did not add to this position, because this Spread went to the whole value, $1. Moving to the next trade for earnings.
Read more about options by www.keeneonthemarket.com