Halftime Report for 3.13.2012

Given the 0.5% daily moves the markets have been making I believe the Cash VIX will be at 11$ in the near future. EUR/USD has once again decoupled from broader market “risk-on.” The last few days, credit markets popped higher at the open and have then sold off considerably – diverging negatively from European/US stocks into the close. ES is trading at the highs of the session up 10.25 pts or at 1377. Crude Oil is near its daily highs (107.21) as algorithms await FOMC announcements.

On the other hand, Apple is up 10.35 pts or (1.9%) at $562.58 or a NEW ALL TIME HIGH!! Apple has had a 52wk low of $310.50.
iPad 3 concerns are overblown.
iPhone5 launch in Q3.
apple tv as growth catalyst.
INVESTORS AWAIT FOMC MINUTES AT NOON! LISTEN CLOSELY FOR THE WORD, INFLATION,INFLATION,INFLATION….

Halftime Report for 3.13.2012

The last few days, credit markets popped higher at the open and have then sold off considerably – diverging negatively from European/US stocks into the close. ES is trading at the highs of the session up 10.25 pts or at  1377. Crude Oil is near its daily highs (107.21) as algorithms await FOMC announcements.
On the other hand, Apple is up 10.35 pts or (1.9%) at $562.58 or a NEW ALL TIME HIGH!! Apple has had a 52wk low of $310.50. 
  • iPad 3 concerns are overblown.
  • iPhone5 launch in Q3.
  • apple tv as growth catalyst.
INVESTORS AWAIT FOMC MINUTES AT NOON! LISTEN CLOSELY FOR THE WORD, INFLATION,INFLATION,INFLATION.

Morning Rage 3.13.2012

Also, investors will keep a close eye on the steepness of the VIX Yield Curve and not so much the deceiving, low, front month prices. Monday, was NYSE lowest volume trading day of the year ( YTD, down 25% below daily average). Also, Treasuries rallied yesterday into the close as Crude and Silver lost over 1.5%. However, in the morning session today, ES is up 7 pts or (0.51%) at 1373 and Crude Oil is higher by $0.50 at $106.84. EUR/USD is at its session lows trading around $1.3087. Is RISK BACK ON?

ECON EVENTS:

FOMC Meeting: We expect no change, in line with consensus. Will Ben mention the word inflation?
BoJ Meeting: more asset purchases to come>
Mexico IP (Jan): Analysts are forecasting 2.5% number
US Retail Sales (Feb): Retail sales should show a positive increase in February, given strong auto sales, and user-friendly weather.

Cam at the Close 3.13.12

APPL closed on the highs of the day at $552.50 and was up 1.35%. Some notable movers today were Tudou Holdings (TUDO) and Yoku Inc. (YOKU). YOKU announced today that it plans to acquire TUDO to create China’s largest video sharing website. TUDO jumped over 150% to close at $39.41 after closing in the mid $15’s on last Friday. The street reacted well to the news and bid up shares of Yoku by over 30%. I learned after the fact, but there was very bullish option activity in Yoku last Friday. Did someone know about the merger? There is no doubt in my mind that SOMEONE did, but once someone makes a trade, it is public information for everyone. You just have to know where to look. This is another reason why Andrew’s unusual option activity reports can be a vital tool for trading. YOKU provided some great intraday trading opportunities on the short and long side. The shares plunged from $31 to $28 in the first 2 hours of trading. YOKU found buyers willing to support it at $27.80 and once this was established, the stock never turned back. It ended up taking out the morning highs to close at $31.85. The CBOE ^Vix closed under $16 today at $15.90. Despite the recent spike we saw in volatility last week from the selloff, it appears that volatility is in a downtrend. It is really important that investors and traders don’t get complacent in this tape because one news headline could change this market around in a flash. I really like the TVIX down here in this $14 area. I think it is a good risk/reward given that the ^Vix is under $16. I would personally start a position here, and then cost average down every .50 decrease on the ^Vix. Normally, I would never cost average down anything for a trade, but volatility can never go to zero and it has extreme ranges. I think we are getting near an extreme ^Vix range on the downside. I would be very comfortable holding a long TVIX position with the ^Vix in a $14-$16 range. The 52 week low on the TVIX is $13.80. Spot Crude, Gold, Silver and Copper were all down -0.83%, -0.75%, -1.9% and -0.34% respectively.

Written by Cam Patrick
@Cam_Patrick

Trade of the Day (SPPI) 3.12.2012

Unprofitable: This trade is unprofitable if SPPI closes under $12.60 by April 20, 2012.  The most this spread can be worth is $1 minus the $0.40 I sold it for, so my maximum loss is $0.60.  I am risking $60 per 1 lot to make $40 on this spread.

Reason I Like This Trade: When SPPI was trading $13.05, I saw someone sell 5047 SPPI April 9 Puts for $0.8-.  This is very bullish activity, so I wanted to get LONG the DNDN.  I wanted to make a goof risk vs reward trade, so I thought this was a great way to play SPPI to the upside.  In Our “LIVE” Trading room talked about this trade in real-time, but have to be in the room to hear to LIVE.   

UPDATE 3.15.2012 I saw a customer sell more April 13 Puts in SPPI, so I was offering more of these Put Spreads for $.40, but I have not got filled yet. 

UPDATE 3.22.2012 With the stock trading right arounf $13, this Put Spread is still worth $.35, but time is still on my side.

UPDATE 4.9.2012 I am glad I sold Put Spreads instead of just Puts.  This stock has gotten hammered and is currently $10.50.  I defined my risk vs reward and realized that the spread could go to $1, so I am moving on to the next trade.

UPDATE 4.23.2012  This Spread expired worth the whole value, $1, won’t be trading $SPPI anytime soon, moving to the next trade.


Read more about closes by www.keeneonthemarket.com

Halftime Report for 3.12.2012

However, this is a record steepness decrease and investors should be aware. On the other hand, is this the signal “long term” investors were waiting for to start putting money to work and go long stocks? NYSE short interest is the lowest it’s been in nearly four years. ES is currently down 4.50 points at the 1362.25 level. Crude Oil is down 1.22 points or 1.14% at $106.18. Silver is down $0.41 or 1.2% at the $33.80 level. The EUR/USD is at session highs trading at the $1.3147. Interesting bit of news I came across is Greece gas prices and unemployment rates are at record highs.

Banks release stress test results on Thursday March 15th, 2012. Banks capital to assets ratio looks healthy. Bigger Banks such as BAC, Citigroup, and JPM’s balance sheets in terms of profits, should be positive. Deleveraging in the US seems to be over and this bolds well for the bigger US banks. Perhaps time to buy Calls on the XLF ahead of the stress test results?

By: Greg Zimny

Movers and Shakers (MAKO) Up 1.3% to $38.54

Chart Glance – MAKOs chart glance looks like a broader, reverse head and shoulder-type pattern. MAKO is making “higher/ highs” and “lower/ lows.” Technical’s indicate that MAKO is in the early stages of up trending to higher prices and taking out recent 52 week highs ($43.00).
50 DMA ($35.03), 100 DMA ($33.27), 200 DMA ($32.91).
Support 1: $36.18 Support 2: $32.10

MAKO is a growing, innovative, med-tech name that specializes in surgical, “hip-replacements” and specialty-medical devices company. Investors should keep MAKO on their radar after Asahi Kasei buys ZOLL Medical for $2.2 Billion. Asahi Kasei pays a 24% premium to ZOLLs closing price on Friday at 93$ a share. MAKOs 4th Quarter results were quite impressive. Revenue rose 122% and the company sold around 10 hip-enabled RIO systems in Q4. MAKOs price target was raised to $50 from $37 at Piper Jaffrey, and keeps an “Overweight rating.” MAKO will present at the Barclays Capital 2012 Global Healthcare Conference in Miami Beach on Wednesday, March 14th, 2012(2PM ET). In my opinion, MAKO is a potential, “take-out” candidate and currently the MAKO March 40 Calls looks reasonably cheap trading around $0.35.

By Greg Zimny

Morning Rage 3.12.2012

It appears to be a “Risk-Off,” Monday, as Silver is selling off more than 2%. Gold is trading under the all important, psychological, $1700 level. Finally, Crude Oil is lower by 1.5% at the $106 level. In my opinion, Crude Oil Shorts need to play Crude with extremely tight stops. Tension in Syria, Iran, or Korea can escalate at given moment and send Crude LOCK LIMIT UP.

Monday Economic Events:
India IP (January)- Consensus estimates a rise to 2.1%.
Japan Machinery Orders (January)- Analysts expect a much better -7% December number.
Japan January New Orders.