Paper sold 3700 VALE Dec 18-19 Call Spread for $.33 (2.1 times usual volume) when stock was trading $18.13
Paper bought 2200 SCHW Dec 13 Calls for $.50 (2.1 times usual volume) when stock was trading $13.37
Paper bought 3070 $GPS December weekly 30.5 Puts for $.63 (2.1 times usual volume) when stock was trading $30.49
Paper sold 9861 USB Jan-Dec 32 Put Spread for $.45 when stock was trading $32.10 Paper sold 33,607 MRO Dec 29 Puts for $.31 (5.4 times usual volume) when stock was trading $29.91
All food jokes aside, CMG may present a real trading opportunity here and now. As mentioned before, CMG is currently experiencing a pennant formation, as seen in the chart below. This is essentially a price arrangement that displays a decreasing range as price gravitates toward the center of the narrowing triangle or towards the apex. The apex is where price is expected to break out, and judging by the action on Friday we be headed lower. Friday, 12/7/12, was, according to candlestick analysis, a reversal day. Price started to rally higher, above the high of the past three candles, however it was promptly rejected when it was met with sellers at the 50-day moving average and closed a mere $0.40 above where it opened. The 50-day moving average has not been a great indicator however. The last two times CMG came into contact with this line resulted in false support and resistance levels, but it was respected on Friday. If Friday’s action is any indicator, which many folks will argue that it indeed is, the larger intermediate term trend may result lower…or more specifically…the pennant breaking lower. Other restaurant stocks have seen some tough times too, but of the 26 analysts that cover CMG, most have holds or overweight ratings…so expectations have room to go lower. They expect $2.09 for Q4 2012, which is about 30 trading days away.
e-mail any comments, feedback, suggestions, or general inquiries to:
Author salernoma@mx.lakeforest.edu
In a recent interview with Rock Center’s, Brian Williams, Cook gave Apple fans everywhere something to argue and debate over for months to come. “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years,” Cook told Williams. “It’s an area of intense interest. I can’t say more than that.” Whether this statement has any real weight is what is to be debated. It wasn’t long ago that Apple publically deemed development of TV “a hobby”, but now it seems that it has been upgraded to a state of “intense interest”.
It has been debated whether this new device will be a full-fledged television, or just an upgraded version of their current Apple TV product. According to Maynard Um of Wells Fargo Securities in a statement provided to AppleInsider, he believes that an actual television would be much more likely for Apple to produce than a set-top box. He said he believes Apple would “relish” the opportunity to place the company’s logo as “the centerpiece of the living room.” Um is not the only analyst to predict the production of an Apple branded television set, Peter Misek from Jeffries & Co. believed back in March that components for this television set were “starting to move in small quantities”. According to his new research, he now believes “…the iTV is in full production.” This is supported by fellow Jeffries & Co. analyst James Kinser who went on to say, “Our discussions with industry contacts suggest that at least one major North American MSO [multiple systems operator, which includes companies such as Time Warner that own many cable systems] is working to estimate how much additional capacity may be needed for a new Apple device on their broadband data network.” This would certainly conclude that Apple has either started production of a TV, or has slated to start production in the very near future.
The overall smart TV market was worth $86 billion in 2010 and is expected to reach $265 billion by the end of 2016 at a CAGR of 17%, it seems to be a perfect opportunity for Apple to take over a large share of yet another segment of the modern household. According to www.marketsandmarkets.com, a leading market research website, smart TV’s (in terms of unit shipments) were valued at 43.6 million units in 2010 and reached around 64 million by the end of 2011 at an annual growth of 47%. By 2016, smart TV unit shipment is expected to reach 153.2 million units at a CAGR of 19%. In such a rapidly growing market, it isn’t farfetched that we could see some form of an Apple TV hitting the shelves in 2013.
Gene Munster of Piper Jaffray has come to a similar, more specific conclusion. He believes Apple will launch a television set that will release coinciding with the 2013 holiday shopping season. He believes the product will be between 42 and 55 inches in size, and come with a price tag between $1,500 for the former and $2,000 for the latter. “”We expect the beauty of the design to be a feature, but the most important feature will be the ability to use the TV as the main interface for the living room across multiple devices,” Munster wrote. “We believe the TV will include Siri and FaceTime. The biggest item unlikely to come with the TV will be unbundled channels.” The introduction of a TV from Apple could be one of the largest releases Apple has had to date. By adding a television into their already encompassing product line could prove to be the knockout punch to many smaller technology companies that have been struggling in this down-turned economy.
Whether we see Apple release a full television set, or just a set-top box that is compatible with your current TV is certainly up for debate. But there is strong evidence; supported by Tim Cook himself, that Apple will be entering the television market in the next year or so.
By Troy Hoffman
Have no bias when first watching, and see how fast that changes as they make every segment seem that we are in a terrible state of affairs. If this were the case, price action would be the leading indicator and tell us if we were headed in such a direction. Like I previously stated, the NYSE Index is up 30% off the October 2011 lows. Nowhere near a dark place! What I am getting at here is to shut the media off from your trading/investing research and see what a difference it makes. Let the fiscal cliff talk disappear all together and let the price action lead the way. So, the next time you want to read one of those articles and think to yourself that we are in a dark place, do yourself a favor and look at a yearly chart of the NYSE, S&P, DOW and ask yourself, is that bearish? Lets check out that ‘bearish’ chart which is off of the 2009 lows. We have 3 waves up, with the 4th wave just completing on the latest decline in the markets. I have the larger picture labeled in the lime green numbers. As you can see, the chart shows I am expecting us to go up from here in a 5th wave. I have the sub waves of the 5th wave labeled in the white count. Wave 1 completed on August 14th and wave 2 on November 16th. This leaves us currently in a (iii) of 5, a complete melt up in the markets.
When analyzing the market, you need to check out what the VIX Index is telling us, and where it may want to go. It’s also called the ‘fear gauge’ of the market. Currently, the VIX is reading a low of 15.90, nothing too low that scares me, but a number that has me put a caution flag to it. As you can see from the weekly chart, the VIX failed to get up past 20, and this is very bizarre since we just had a 7.5% pullback. This makes me think that we are setting up for a bigger VIX move in the future. I do not believe that this will come by years end, but it may be significant when our 5th wave completes.
‘As IBM goes, so goes the market’, was a relevant saying years ago, and still holds true today, but for another company. I’m sure you can guess, yep, you are absolutely correct if you said Apple. Apple is our market mover, and as Apple goes, so does our market. With a market cap of $500 billion, it has quite a bit of say as to where we are headed. This is why analyzing Apple on a constant basis is critical to staying on top of current market moves. So where is the ‘big fruit’ headed in the future? This might be a sensitive subject for a lot of investors/traders as they were in shock this past week seeing Apple fall 6% in just one day, and 10.5% for the week. 6% was the largest single day drop in Apple since 2008! A bigger decline like this must mean that we are setting up for a bigger rally…. right? Yes, I believe so, and in the chart below you can see that I have the all time top in Apple, as my wave 3 and have this current decline as my wave 4, with a 5th to come. Let me warn you that 4th waves have no wave structure that they need to adhere to, so trading them is an extreme challenge, and is one of the hardest things you can do as a trader. I do expect the wave (v) of 4 to complete near the 490 regions. So with that said, I expect the pullback to continue in Apple with the coming week. When the price does hit those levels, this is where you can begin to look for long positions. If this 5th wave plays out in a typical 5 wave fashion, we will be targeting at a minimum 700 with the upper targets being 900. Until then, let Apple come down a little bit further before you begin to look long.
Author: Peter Nitso
Email: pnitso@yahoo.com