Live from the Trading Room: HIMCRRBTT Trading Plan (DE) 8.14.2012
Category: Blog
Weekly Crude Update 8.15.2012
The Israel and Iran geopolitical tension remains a tell tail of where this spread is headed in the short-mid term. Sources say that diplomatic solutions to the tensions are still on the table, and as long as they do the spread will remain in control. I would long the spread in anticipation of a nonviolent solution to the problem. As you can see from the chart below, the spread is much wider than the historical average.
Today’s U.S. crude reserves number should cause a short-term price spike in WTI crude. Right now analysts are expecting high reserves due to lack of demand and increases in supply and crude imports.
David Cornes holds a degree in economics from the University of Montana.
Morning Rage 8.15.2012
The Hang Seng dropped 1.2% today drug down by China Life Insurance who lost 3.4% today. The
mainland’s biggest insurer was hit by a larger than expected decline in July premium income. Turnover
was down 25% compared to yesterday’s trading. Tencent Holdings slipped .2% ahead of its first half
earnings, which are due out later this week. China Shenhua energy lost 1.6% as spot coal prices declined.
The FTSE 300 is down .6% today after hitting a 4 month closing high yesterday. The Kazakh Group
lost 3.2% after cutting back spending plans. British American Tobacco and Imperial Tobacco are also
suffering today losing 2.5 and 2.2% respectively as Australia’s high court dismissed a case relating to
packaging. Around Europe the DAX, CAC 40 and Madrid index are down 0.5, 0.4 and 0.38% respectively.
The MBA mortgage applications are down 4.5% and the 30 year fixed remains flat at 3.76%.
Nokia is up 5.6% premarket after an announcement of a window’s 8 smartphone in the near future.
Commodities all look similar with crude, natural gas, gold and silver all set to begin the day negative.
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 8.14.2012
Euro (6E) and Oil (CL) Pivot Points for 8.15.2012
S&P Emini Pivot Points for 8.15.2012
Doherty at the Close 8.14.2012
Michael Kors (KORS) also rose 16.43% after they announced that first quarter earnings nearly tripled.
Trade of the Day (ANF) 8.14.2012
Trade: Selling the ANF Aug 29-28 Put Spread and 35-36 Call Spread for $.37 total
Risk: $63 per 1 lot
Reward: $37 per 1 lot
Notes: good risk vs reward that ANF does NOT move the measured move target
UPDATE 9.11.2012 This Spread blew up a little and went to fair value of $1. Not every Condor will Work.
Weekly Grains Update 8.14.2012
On Friday morning, the USDA released their monthly report stating that U.S. corn production will be reduced by 13% to 10.779 billion bushels. A price drop after a number like this simply does not make sense. Analysts expected a corn yield of 127.3 bushels per acre while the surveyed number was 123.4, a significant drop from July’s number of 146 bushels. A drop in expectations like this should cause a rise in corn prices. Apparently traders are taking this time to cover their positions before markets continue to rise. Markets have shown that supply is low. I think that markets will continue to slowly rise as this year’s crop is harvested. Soybeans were reported to have a yield of 2.692 million bushels, the lowest in 9 years.
Wheat estimates came in stronger than expected at 74.67 million bales, causing a pullback in wheat prices. As of Monday, wheat prices have lost 4% since the USDA data release.
In my opinion this year’s grain markets will remain strong. Although wheat is having a pullback, yields are still low for the year across the grains markets and in many analysts’ opinions, it is too late to fix damaged crops.
David Cornes holds a degree in economics from the University of Montana.
Live from the Trading Room: Trade of the Day (HD) 8.13.2012
