S&P Emini Pivot Points for 6.28.2012
Author: Andrew Keene
Doherty at the Close 6.27.2012
Energy stocks drove the gains with Cabot Oil (Gas), QEP Resources (QEP), and WPX Energy (WPX) leading the S&P. However, the energy sector continues to be the only sector negative for the year, at -6.8% from the start of 2012.
Financials, industrials and health-care stocks were also firm on a day of broad-based gains. However, Facebook (FB) fell 2.6% as many analysts at banks that underwrote its initial public offering last month began coverage of the Menlo Park, Calif., social-networking operator. The research was largely expected to be bullish, but “hold” ratings outnumbered the “buy” ratings.
The broad market gains came after a report on pending home sales in May topped expectations to match the highest level of the year, the latest in a string of signs of the housing market’s recovery. Also helping were strong earnings from homebuilder Lennar, LEN +4.75% which projected a slow and steady recovery in the housing market. Lennar rose 4.8% amid a broad rally in homebuilder stocks that included KB Home(KBH) and D.R. Horton (DHI).
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European measures moved higher. The Stoxx Europe 600 finished 1.4% higher and France’s CAC-40 index rose 1.7% to snap four-day losing streaks. Asian stocks finished Wednesday’s session mostly higher, led by a 1% rally by Hong Kong’s Hang Seng Index.
In other assets, crude oil futures gained 1.1% to $80.21 a barrel, while gold futures edged up 0.2% to settle at $1,577.50 an ounce. The U.S. dollar rose against the Japanese yen but fell against the euro. Demand for Treasurys edged up, sending the yield on the benchmark 10-year note slightly lower, to 1.619%.
Trade of the Day (PAYX) 6.27.2012
Unprofitable: I lose money on this trade if PAYX closes above $32.50 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 $.50 for a total of $.50.
Risk: $50 per 1 lot
Reward: $50 per 1 lot
Chart: Bearish overall has seen selling pressure above this level, the $32.50 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 1.5% on earnings. It is currently implying a 4.4% move tonight.
UPDATE 7.2.2012 I took half of my position off on Thursday at $.10 and I was looking to take the other half off at $.05 but never got filled. I will leave the other half of my position on until expiration.
UPDATE 7.5.2012 This Spread is still worth $.10, but I am leaving it on until expiration.
UPDATE 7.9.2012 This Spread is worth $.05 and I am looking to take it off and move to the next trade.
UPDATE 7.21.2012 Quite the rally in PAYX on expiration week, making the Spread that I sold worth $.45. Good thing I took half off my Spread off at $.10, taking small profits and moving on.
Halftime Report 6.27.2012
Homebuilding stocks were bullish after the increase in pending homes sales data. Homebuilder Lennar (LEN) was up almost 5%, KB Home (KBH) was up 4.19% and D.R. Horton (DHI) was up 3.02%.
O’Reilly Automotive (ORLY) fell over 16% after announcing that 2nd quarter earnings expectations will come in lower than expected as well as lower guidance.
Boeing (BA) rose .89% as it changed their commerical unit CEO.
H&R Block Inc. (HRB) gained 3.38% to $15.60 as higher tax filing volume made up for losses in earnings.
Sealy Corp. (ZZ) rose 8.82% as they posted higher margins based on higher pricing of luxury mattresses.
First Business Interview 6.27.2012
Fast Forward to 7:42
Movers and Shakers (JRCC) 6.27.2012
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.
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
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.
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