General Options Blog
$TLT $TMV Bonds Preparing For More Losses
I noted on Monday before the bell that I felt $TLT puts would be a great trade this week. In my possible trade section I listed the $TLT $107 weekly puts at a price of $.30. They currently trade for over $2.00 with a high of $2.10 on the day. I did not enter this trade. Instead I entered the $106 puts at $.19. I posted such in the chat room and private twitter. At that stage those options dropped to $.16 x $.18 offering traders the chance to get in at an even cheaper price. Today those options hit a high of $1.24.
I think we could still in the early innings of a 9 inning game. The last ballgame we had at optionmillionaires starred the Goldfingers. The Market Pros smoked the Goldfingers in a massive route that saw $GLD and $GDX drop significantly creating massive profits. This time around the James Bonds are poised to get crushed by the Vigilantes.
The decline has been rather orderly recently for $TLT, and we've seen some rallies that have perhaps swayed the opinion of many. I'm not sure there is a consensus on were Bonds are heading short term, which is why I am confident that the next move lower is right upon us.
If I did not know what $TLT represented and just looked at it from a chart perspective, the chart looks very weak. It also is right at the breaking point. The move lower will be reminiscent of the drop $GLD and $SLV saw earlier this year. I see a rather quick decline to the $100 level coming. I don't think $TLT will find a bottom until it runs into multi-year support at $80. That move will take some time and there will be many sharp rallies along the way, but one thing is clear. Bonds are not the place to be anymore. You could also utilize $TMV the 3x 20 year bond bear to take advantage of this move, but just be aware the risks associated with the leveraged ETF's.
I still like October puts but may look for September puts. The $101 strike is at $.61. I will let you know in the chat room if I get them. Good luck.
August 13th Watchlist
Stocks fell most of the day yesterday. Aside from the opening bell ramp off the lows the market was range bound. Some stocks, however, were not so range bound. $AAPL rocketed almost 3% higher and is ticking higher this morning before the bell. I think the stock sees $500 before months end and continues to rally into the end of the year. For now the dips are being bought and there shouldn't be much downside until the stock hits $500.
$TLT is looking great this morning, I highlighted $TLT in yesterdays watchlist and said to watch for a decline. "I am still looking for the next big leg down in bonds which should be very profitable when it happens. " I think that big decline in upon us. Yesterdays pull back coupled with today's gap down below support, could be the start of that next leg lower for $TLT. I was in and highlighted the $106 puts at $.19 yesterday, I also had the $107 puts on the watchlist yesterday morning. Going to be a very profitable day for $TLT put holders.
$SINA is up over 6% early on, with at least 3 analysts raising tgts to upwards of $100. Not sure how much money can be made trading the options here, and not sure how it will affect the other Chinese stocks.
$TSLA still looks like a $200+ stock to me. I may look for calls as we get closer to weeks end and prices start to come down.
Here are some analyst upgrades/downgrades/notes today:
$M Macy's Q2 results could be negative catalyst, says Buckingham
Buckingham says that short-term investors may want to sell some of their shares of Macy's, as the firm predicts that the company's Q2 results could be a negative catalyst. The firm thinks the retailer could modestly reduce its 2H13 comp outlook, but nevertheless Buckingham remains bullish on the company's long-term outlook. It keeps a Buy rating on the shares
$MSFT Microsoft downgraded at Stifel
As previously reported, Stifel downgraded Microsoft to Hold from Buy. The analyst has increased concerns regarding pricing pressure and earnings headwinds from Windows S&M expenses. The firm lowered estimates and believes Q1 and FY14 consensus estimates are too high given substantial Windows challenges
$SINA SINA price target raised to $100 from $80 at Stifel
Stifel raised its target on SINA after the company reported stronger than expected Q2 results. The firm thinks that Weibo's potential is finally being realized, and it keeps a Buy rating on the shares
$HOG Harley-Davidson checks show July retail sales up 8%-11%, says Citigroup
Citigroup said its dealer checks indicate Harley-Davidson's retail sales rose 8%-11% during July and that the momentum seemed to carry into August. However, Citi says the more important catalyst will be the late August launch of Harley-Davidson's new products. The firm keeps a Buy rating on the stock with a $64 price target
$SINA SINA price target raised to $99 from $68 at Brean Capital
Brean Capital raised SINA's price target to $99 following strong Q2 results and robust Weibo growth outlook. The firm sees meaningful operating leverage driven by Weibo acceleration and reiterates its Buy rating
Trades I am looking at today:
$GDX $27.50 puts $.40
$AMZN $305 calls $.45
TEXT ALERT – This Stock Is Heading For New All Time Highs
We've seen it throughout this massive rally from our 2009 lows. Stocks keep hitting new highs, can today's text alert do the same?
I looked at the chart this morning and it looks to be holding longer term support. Analysts remain bullish on it, but we know we can't trust them much. It is all about what we see, what we feel, and what we know.
The stock has been pulling back since hitting all time highs last month. I think its poised to break those highs in the next few weeks. Currently I own the $910 calls, and if we get the move I think we are going to get they should be worth 200% or more from my entry price.
August 12th Watchlist
The markets are set to open the week lower, with stock futures currently down over .3%. Precious metals are higher, as are the miner etfs. The dollar is stronger as well as bonds, lets see if this trend remains intact. I am still looking for the next big leg down in bonds which should be very profitable when it happens. $AAPL is modestly higher with a September 10th date for the next Iphone release.
Barrons came out again this weekend stating their disdain for $TSLA at its current $155 price. They said the same thing earlier this year with TSLA at lower prices. They also thought $FB was a $14 stock. But they are right more often than not, and readers follow their advice, so look for TSLA weakness early this week.
Many upgrades and downgrades today:
$FFIV F5 Networks upgraded to Overweight from Equal Weight at Barclays
Barclays upgraded F5 Networks to reflect positive data points in networking, increased confidence in the new BIG-IP modules introduction, and the significant security opportunity. Price target raised to $107 from $89
$NTAP -->> NetApp price target raised to $50 from $43 at Brean Capital
Brean Capital raised its price target for NetApp after its channel checks indicated strengthening demand for the company's products. The firm believes NetApp shares can continue to appreciate into the company's August 14 earnings call.
$LNKD --->>
LinkedIn upgraded to Buy from Hold at Needham
Needham upgraded Linkedin based on growth opportunities that include the rollout of sponsored updates, mobile positioning, and international monetization. Price target is $280
$AAPL --->>
Apple price target lowered to $595 from $710 at Needham
Needham lowered its price target for Apple shares citing a more intense competitive environment since its last valuation update in February. The firm keeps a Buy rating on the stock
$BBRY --->> BlackBerry strength a selling opportunity, says Bernstein
Bernstein believes a full takeover of BlackBerry is unlikely given the current market capitalization and continued share loss in both the consumer and corporate markets. The firm believes today's news indicates ongoing operational issues and would use strength as a selling opportunity. Shares are Underperform rated
$FL --->> Foot Locker shares should be bought into Q2 results, says Sterne Agee
Sterne Agee believes that expectations are low for Foot Locker. Recent speculation that basketball and athletic footwear have lost popularity is unfounded, according to the firm. The firm expects the company to benefit from strong industry trends and share gains, and it keeps a Buy rating on the stock
$GOOG -->> Google cloud service a misunderstood part of company, says RW Baird
Baird believes Google's cloud platform is uniquely positioned to become the next large player in the cloud services market citing its application, platform and infrastructure services. The firm believes it is one of the least understood parts of the company and could be potentially larger than YouTube. Shares are Outperform rated with a $1,000 price target.
Some trades I am looking at for this week:
$TLT $107 weekly puts .30
$GOOG $905 weekly calls $1.10