Written by |

Morning Rage 8.23.2012

The Hang Seng reversed yesterday’s finish, as a top Asian performer today, gaining 1.2%, from being the
worst performer yesterday. The Chinese Banks did its largest weekly funds injection into the financial
system in 7 months, as a substitute for cutting the reserve ratio. China Telecom jumped 6.7% due to
earnings being in line with expectations; JPMorgan also upgraded the stock to overweight from neutral.
China Unicom, a slightly larger rival of Telecom, was up 4% today. Li Ning lost 3.8% after posting weak
first half earnings. PetroChina rose 0.8% today, ahead of its earnings announcement.

Early gains in Europe boosted by the US Fed soured in the early afternoon due to fresh weak data.
Around Europe the DAX and the CAC are both up 0.2% and the Madrid general is 0.4% in the opposite
direction.

Sony announced it is planning on cutting 15% of its workforce and move its headquarters to Tokyo from
Lund, Sweden.

Chinese purchases of US companies and assets hit a record high of 7.8B USD in the first 8 months of the
year. The biggest deal of the year was that of Dalian Wanda’s 2.6B purchase of AMC entertainment.

Metals are set to soar today with Gold up 1.7% and silver up 2.36% In energy crude is also up while
natural gas bucks the trend down a half of a percent.

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

Written by |

Weekly VIX Outlook 8.22.2012

As far as a VIX play goes, I would bet a bullish spread as I believe the front months with explode to the upside once we get out of the Doldrums. As you can see from the charts below, the VIX is due for some rebuttal after the term structure collapse.


Term Structure for 8.22.2012

chart 4

Term Structure for 8.15.2012

VIXTerm8.15.2012

VIX8.22.2012

David Cornes holds a degree in economics from the University of Montana.

linkedintwitter

Written by |

BIG Trade of the Day 8.22.2012

Chart Analog overlay Stocks

Trade:  Selling the September 40-42.5 Call Spread for $.70 credit

Risk: $180 per 1 lot

Reward: $70 per 1 lot

UPDATE 9.11.2012  This Spread is pretty much worthless, but I am letting it expire that way instead of wasting commissions.

Average Magnitude of Post Earnings Return 4.4%

NearTerm Straddle Indication:
Term  Strike       NBBO          Size      %Spot(Mid)
09/22  $37.5   $3.25 – $3.55   171 x 394     8.8%
09/22  $40     $3.10 – $3.35    60 x 99      8.3%

Written by |

Morning Rage 8.22.2012

The Hang Seng underperformed today labeling itself as the worst performer in Asia as shares dropped
to their lowest in 3 weeks, losing 1.1%. Belle international, a Chinese footwear retailer was among those
dragging down the index, losing 4.6%, its worst in 7 months as the CEO said he expects pressure from
discounts of rival firms as they reduce inventory. Li Ning shed 4.3% ahead of earnings today, down 28%
this year. Oil giant CNOOC is down again today showing a 1.7% loss.

The FTSEurofirst is currently down .7% led by cyclical stocks and weak data from Japan exports. Miners
are down 1.7% hurt by poor results from global player BHP, who projects a 35% fall in second half
profits. Other cyclical stocks; autos and construction, fell 1% and 1.2% respectively. Banks are also down
0.6% today. Around Europe the Dax is -.72%, the CAC -.61% and the Madrid General -.83%.

MBA applications show worse this week down 7.4%.

Amazon launched the India Kindle store on its website, with over 1M titles offered in rupees.

In commodities crude is beginning down today while gold, silver and natural gas are looking to have big
gains.

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