BOND? James BOND. Where is the BOND Market Headed?
The bond market, is the rally over for good? Are we going to see a massive sell off in this year?
BOND? James BOND. Where is the BOND Market Headed?
The bond market, is the rally over for good? Are we going to see a massive sell off in this year?
If these symbols ring a bell to you, you know the direction of this article. TBT, TMV, SAGG, IGS.
It does not take a market wizard to tell you that the greatest opportunity to buy stocks is at the very end of a bear market. Once a disconnect between fundamentals and psychology takes the market to extreme lows, smart investors know that the risk of loss is suddenly limited. On the contrary, very often, the best time to sell stocks, or anything for that matter, is near a broad market peak.
So, bonds topped from a 30 year secular bull market in July of 2013. As indicators of economic conditions now finally point to more growth, and the federal reserve talks about tapering their nearly 5 year long bond buying program by the end of this year, one can almost say this with certainty. So, as of today, people who want to bet against bonds are exactly one year late, which might lead them to hesitate shorting government and corporate debt. Is it too late? Let's take a look at another example.
The S & P 500 bottomed from the worst bear market since the Great Depression in March of 2009. If you were exactly one year late, and bought the S & P 500 Index in March of 2010, you would still be up over 65%, before adjusting for dividends, which makes the percentage gain closer to 75%. Thus, in long term trends, a year is close to insignificant. And, if bonds are about to enter a supercyclical bear market for the next 25-30 years, then shorting bonds for the long run now appears like a very low risk proposition.
Remember, the interest rate cycle repeats over time, closely matching the 52-57 year Kondratiev Cycle.
That said, one might even consider, despite the climb in interest rates over the past year, buying a longer term mortgage, or getting a longer term loan. Probabilities certainly favor new, longer term borrowing to be profitable (in terms of increasing your net buying power).
So back to the trade. (TBT), a double leverage fund that moves inversely to the 20 Year Treasury Bond, has recently exhibited signs of accumulation, and finally, made a breakout to new yearly highs. In the chart below, look at the volume bars and how volume picked up in recent months. Also notice how most of these bars are white, meaning that the volume was mostly the volume of new buying.
Then, consider the bottoming pattern taking place over the last year. Typically, long term bottoms have a familiar look. The stock, ETF, index, debt instrument makes a new low, then the security attempts to make another low, but sellers find themselves pushing into a mass of new buyers actively accumulating. The attempt to make new lows fails. Finally, a break to new highs, and generally a pullback. You then have a new uptrend. Does the chart below have all of these steps of a major bottom?
The bottom line is no, you are not too late to come into the party. This is an opportunity that comes along, depending on when you are born, once a cycle, or lifetime. So don't wait for the new cycle of expanding growth, rising interest rates, and rising stock prices will leave you behind.
ENTER ------- GUESS THE CLOSE CONTEST! ----- What price will $AMZN close at on Friday August 2nd.
$AMZN flew to new all time highs today. It was on the watchlist this morning for the $310 calls which soared from $.20 at the open to $4.00 intraday.
The earnings report was out this week. Where does it go from here?
Make the best, closest guess and you win a free month at optionmillionaires.com
RULES: Please just reply to this post in the comments section below with a price.... Nothing more nothing less. That price being what you think AMZN will close at on Friday Aug 2nd.
Example:
$314.35
That is a perfect response.
Good Luck
With yesterdays close near $169 on the SPY, I figured today would be the day we go and test $170, but looks like we will have to wait a bit longer as futures are off at the moment. I wouldn’t rule out a ramp day over $169 but will have to wait and see.
Some more big earnings reports yesterday with SBUX blowing it out, while AMZN, DECK, and EXPE disappointed. EXPE missed on all fronts and PCLN followed its lead by heading down over 4% after hours. AMZN missed EPS and once again, gave bears a reason to sell with a business model that continues to grow revenue but fails to generate much profit. Based on the afterhours/premarket activity, and my feeling that the AMZN growth story is still intact and running full-force, I think its a buy oppty for some lottos this morning.
BIDU, OPEN, and TSLA were all upgraded this morning and are getting bid up pre-market. Still holding BIDU, may add OPEN, and will congratulate call holders on TSLA as I know a few got the $130s yesterday for rock bottom prices.
Here are some of the analyst changes for today:
Baidu upgraded to Overweight from Equal Weight at Morgan Stanley |
Morgan Stanley upgraded Baidu citing valuation and improved mobile monetization. The firm upgraded shares following the Q2 report citing progress in mobile monetization, increased visibility, and leverage. Price target raised to $144.70 from $92 |
TSLA Tesla upgraded to Buy from Hold at Deutsche Bank |
Deutsche Bank upgraded Tesla shares to Buy from Hold while raising its price target for the stock to $160 from $50. Deutsche notes that several third parties have concluded Tesla's electric car is the best car they've ever tested. The firm believes Tesla shares could more than double over the next 3-4 years. The stock closed yesterday at $124.07 |
AMZN Amazon.com outlook still positive, particularly over long-term, says Cantor |
After Amazon.com reported weaker than expected results, Cantor thinks the company is seeing strong demand but is intent on spending money to innovate. The firm keeps a $315 price target and Buy rating on the shares |
EXPE Expedia risk/reward attractive, says Cantor |
After Expedia reported weaker than expected results and lowered its guidance, Cantor still expects the company to deliver double digit bookings growth. The firm lowered its price target on the stock to $65 from $75 but keeps a Buy rating on the shares |
OPEN OpenTable upgraded to Buy from Neutral at Goldman |
Goldman upgraded OpenTable citing the recent sell-off in shares. The firm sees a buying opportunity ahead of an expected strong quarter report, accelerating product innovation, improving mobile conversion, and the Q3 launch of the cloud based ERB. Price target raised to $76 from $54 |
SBUX Starbucks price target raised to $84 from $66 at Jefferies |
Jefferies raised its price target for Starbucks following the company's Q3 results and keeps a Buy rating on the stock |
DECK Deckers Outdoor outlook conservative, remains top pick, says Jefferies |
Jefferies views Deckers Outdoor's outlook as conservative and says the stock remains its top pick following the company's Q2 results. The firm believes sentiment on shares remains negative given the Q2 comp decline and revenue weakness. Jefferies reiterates a Buy rating on Deckers with a $100 price target |
Nomura maintains Baidu, Inc. (NASDAQ: BIDU) with a Buy and raises the price target from $107.00 to $132.00.
GM General Motors price target raised to $45 from $41 at RBC Capital |
RBC Capital increased its target on GM as the firm believes that the company reported solid Q2 results. The firm now has more confidence that the company's results will improve meaningfully in 2H13. It reiterates an Outperform rating |
Will try for some AMZN LOTTO calls, try and grab some OPEN 75 calls, and play the PCLN bounce. Folks sold off PCLN for the wrong reasons. If competition hurt EXPE earnings, wouldnt that mean TRIP(which beat big) and PCLN would benefit?
Stock Ticker | Call/Put | Strike | Expiration | Closing Price | Entry Price |
OPEN | CALL | $75.00 | Aug | 0.40 | 0.40 |
AMZN | CALL | $310.00 | Weekly | 6.80 | 0.25 |
PCLN | CALL | $905.00 | Weekly | 11.70 | 0.50 |
We will have the week ahead Webinar Sunday night at 10:30 , hope to see you there!
Lets have a great day!
- JB