Free Webinar 7:30 PM EST Tonight Open To All – Lambda Lambda Lambda? Explaining The Option Greeks
Just a reminder that this educational webinar hosted tonight by D starts at 7:30 PM EST. In this webinar, D will be explaining how to use each of the option Greeks. After we go over explaining how what each Greek means, then we will delve into using them deeper, and cover some advanced topics. This webinar is open to all members and non-members, so feel free to invite your friends! Click on the link below to register. See you there!
August 16th Watchlist
Stocks got clobbered yesterday as the buyers who brought the indexes up to new all time highs recently have all but vanished. I don't think we are there yet, as far as the bubble bursting and the recent declines are nothing but a break before we see new all time highs later this year. Bonds continue to look very vulnerable with $TLT falling along with stocks yesterday. On the flip side was gold, silver, and the gold miners. The rocketed higher yesterday with silver having its best week in over 25 years.
The question is where do we head today? More losses or do we see a relief rally? I think, at least short term we are in for a recovery of some of yesterdays losses. Some individual stocks namely $GOOG, have really taken it on the chin this week and could be the first to recover. Bonds still look like a great trade heading into months end and into the "Fall". There will be bounces along the way but I think those will be short lived.
Analyst upgrades/downgrades/notes:
$NFLX Netflix to be hurt by new competition, says Bernstein
After media outlets reported that Sony (SNE) reached a preliminary deal to offer Viacom (VIA) content on an Internet TV service, Bernstein thinks the move by Sony could increase Netflix's competition. The firm thinks that Sony's content may eventually become as good or better than Netflix's offerings. . Bernstein keeps an Underperform rating on Netflix
$AA Alcoa downgraded at BofA/Merrill
As previously reported, BofA/Merrill downgraded Alcoa to Underperform from Neutral. The firm downgraded shares due to lower aluminum price forecasts and cut its 2014 EPS estimate to 20c, below consensus of 51c. Price target is $8
$TRIP TripAdvisor pullback a long-term buying opportunity, says Wunderlich
Wunderlich views the pullback in shares of TripAdvisor following the company's CEO comments regarding a weaker Q3 as a buying opportunity for long-term investors. The firm believes the comments reflect the continued challenges of the metasearch transition, but feels the transition is right strategy. Wunderlich keeps a Buy rating on the stock with an $80 price target
$BBRY BlackBerry unlikely to be sold for more than $10 per share, says Pacific Crest
Pacific Crest believes that many investors may not have realized that BlackBerry has $5.3B in off-balance sheet purchase obligations, as the company disclosed in a June regulatory filing. The firm thinks the company's balance sheet likely overstates the value of its tangible assets, while its IP value has been diminished. The firm keeps an Underperform rating on the stock.
$WMT Wal-Mart price target lowered to $83 from $88 at RW Baird
Baird lowered its price target on Wal-Mart following Q2 results and lowered outlook. The firm cited management guidance, but believes easier comps and sharper price investments increase the odds of sequential comp improvements across the second half of 2013. Shares remain Outperform rated
$BA Boeing weakness may create buying opportunity, says Oppenheimer
Oppenheimer believes that the chances that Boeing will have to take charges on its 747, F-15 and C-17 planes in 2013 are increasing. The firm's bias is to use any related weakness in the stock as a buying opportunity, as it still expects Boeing to generate about $10B of free cash flow in coming years. Oppenheimer keeps an Outperform rating on the stock
$RIG Transocean downgraded to Underweight from Overweight at Johnson Rice
$P Pandora upgraded to Buy from Neutral at Goldman
Goldman upgraded Pandora with a $27 price target citing accelerating mobile ads and subscription revenue growth
Options I am looking to buy today:
$AMZN $290 calls $.38
$GOOG $865 calls $1.00
$BA $103 calls $.35
Strength In Homebuilders – The Only Bright Spot During Thursday’s Selloff
A very powerful investing tactic is to, when the market is correcting, find what areas of the market are showing the highest relative strength. In the last correction, which started in late May, regional banks largely ignored the selloffs. After the correction concluded, these stocks jumped. From the end of the correction to its eventual top in late July, it rose 15%, outperforming the S & P 500 for that time twofold.
Homebuilders showed strength today after a strong National Association Of Homebuilders Housing Index report. In addition, homebuilder sentiment was strong. Here are some of the daily performances of some of the top stocks within this segment.
- Lennar (LEN) +5.12%
- Toll Brothers (TOL) +3.42%
- D.R. Horton (DHI) +5.69%
- PulteGroup (PHM) +5.29%
Is this sudden burst higher the start of something big? I don't think so. Why? This area of the market, once a clear outperformer, is now a clear underperformer. Here's the relative strength chart below of the homebuilder ETF (ITB) versus the S & P 500. Remember, a rising line means that ITB, or homebuilding stocks, are outperforming. A declining line means they are underperforming.
Now compare that relative strength chart to that of the regional banking ETF, (KRE)
What we discover is that, even though KRE's most significant gains were made starting in late June, it started outperforming the market as early as February. Prior to that, KRE performed just as well as the S & P 500. With the homebuilding stocks, we have not seen evidence of any new trend of outperforming yet. On the contrary, this area of the market has been an underperformer since February of this year. So, today's strength will likely have little follow through. You may even want to take the opportunity to buy some puts on some of these homebuilders before momentum decays. Of course, should we have several more strong days like today, accompanied by high volume, then the outlook would likely be changed. But until then, this bounce looks spurious.
Trading For A Bounce Today?
Stocks are sharply lower today. Will we get that bounce, the bounce we've seen seemingly every decline since the lows in 2008? Or is todays weakness the start of something more sinister for the bears.
For today I am looking for the dip to be bought.
I like this stock for a bounce to close the morning gap lower. I think longer term this stock has a good chance at 50-75% gains. For now I am trading the short term gap fill that I think will happen before tomorrow's close. The stock??
$BAC. This mornings gap down was quick and violent, but it took us to support and the stock held. I think the next move is higher.
$BAC $14.5 calls are .03 x .04 last trade $.04 and I like these for upside into weeks end.