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Dr. P. Silocybin
Would you like fries with that?



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Re: Stock Update for January 25, 2017 [Re: LunarEclipse]
#24044351 - 01/27/17 03:58 PM (7 years, 2 days ago) |
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I'm hoping that the time decay on VXX will be less that the time decay of VIX call options, but it does seem like a very steady long term decline. Definitely a bit of a gamble.
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LunarEclipse
Enlil's Official Story


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Quote:
Dr. P. Silocybin said: I'm hoping that the time decay on VXX will be less that the time decay of VIX call options, but it does seem like a very steady long term decline. Definitely a bit of a gamble.
VXX has done three reverse splits. While I agree with your thinking this market will take a dump, I've been wrong for so long now it's silly. You've got the Fed and the other central banksters with apparently unlimited funds to buy stocks and loan money to companies to buy back their stocks. Earnings are crap and not even reported with GAAP but that isn't what matters because this is no longer a "free" market, it's rigged as hell. On a historical valuation basis, it's so overvalued it's laughable.
-------------------- Anxiety is what you make it.
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Ahab McBathsalts
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Re: Stock Update for January 25, 2017 [Re: LunarEclipse]
#24079371 - 02/10/17 11:02 AM (6 years, 11 months ago) |
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ATVI murdered their quarter, guidance and proposed stock buy back.
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Ahab McBathsalts
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General Motors is in talks to sell off its terrible European arm. I've been holding GM for years now and it has mostly moved sideways with a reasonable dividend. I'm hoping it finally is able to gain some traction.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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LunarEclipse
Enlil's Official Story


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Toshiba is a goner. I'd short it but my luck they get bailed out. Otherwise, they are goners. Westinghouse/Chicago Bridge killed them. The nuclear industry killed them. Massive massive write offs, chairman resigns, selling everything, no shareholder equity left.
6502:T.
-------------------- Anxiety is what you make it.
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geokills
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Stock Update for February 17, 2017 [Re: geokills]
#24097833 - 02/17/17 12:50 PM (6 years, 11 months ago) |
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Market is persistently strong, almost scarily so. I have been scaling out of positions over the past week, sold the last of my TSLA options at a 265% gain on Tuesday and looking to re-enter after earnings next week. Also ditched a losing position in LOGM, even though it may stabilize here at its 200 day. The market is just too hot and LOGM didn't participate in the recent action so I didn't want to continue to hold it.
I am however still holding CHK, which has also been stinking up the joint and sits at its 200 day moving average. Earnings are out soon, but since I have options that don't expire until 2019, I'm just gonna hold this one and see what happens, as I think the environment for speculative oil and gas plays has improved, even though it may very well be a rocky road.
Added two new positions this morning, one in CLVS, a cancer based biotech company. It has been on an absolute tear and I can't say that I caught any of the recent move, but it has been making a high base here just above $60 and volatility is squeezing. Today's action shows some fairly significant buying that is bringing the stock up to the top of the range. If the market cooperates next week, I would expect this one to break out. Options have wide spreads, so you need to be careful with this one or just buy common stock and keep a stop below $60.
The other position I added today is MEOH, a Canadian chemical company and one I caught a really nice move on when it broke out from a base around $30, but I sold it waaay too early and never got back in. They reported earnings last month and spiked up and has just meandered around since. Today's action thus far is indicating a "bullish engulfing pattern" where the open was lower than yesterday's low, and the high is higher than yesterday's high, thereby engulfing yesterday's price action in a bullish way. This is generally a positive indicator, and if the stock moves above $51.60, I would expect it to have another nice move higher as all resistance will have been cleared. Options are very thinly traded with wide spreads, so be careful.
Keep in mind the Federal Reserve will probably be raising interest rates again very soon. This could be a big problem for the market, as ultimately an hawkish fed has pretty much always stalled out market rallies. But rates are still historically low and the market will do what it wants, so let the price action guide your decisions. Just know that there is a potential negative catalyst on the near horizon.
Lastly, it is worth noting that I have protective stops in place on all of my positions, and am also holding some call options on the VIX, just in case something crazy happens... because this market has been really hot, and ultimately all good things do come to an end. Overconfidence and/or complacency tends to be the biggest money sucker for most investors (lord knows I've learned this lesson the hard way).
Current Positions:- CHK Jan 18 2019 $7 calls
- CLVS Jan 2019 $50 calls
- MEOH Apr 2017 $50 calls
- VIX Jun 2017 $10 calls
- Stalking TSLA for re-entry (almost pulled the trigger today but didn't want to buy it right in front of earnings and the long weekend)
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geokills
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Re: Stock Update for February 17, 2017 [Re: geokills]
#24108505 - 02/21/17 02:48 PM (6 years, 11 months ago) |
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Quote:
geokills said:
MEOH ... [Friday's] action thus far is indicating a "bullish engulfing pattern" where the open was lower than yesterday's low, and the high is higher than yesterday's high, thereby engulfing yesterday's price action in a bullish way. This is generally a positive indicator, and if the stock moves above $51.60, I would expect it to have another nice move higher as all resistance will have been cleared.
Nice follow through on Friday's bullish engulfing move, the stock closed above its earnings high and is set to continue to the upside as there is effectively no resistance overhead.
CLVS pulled back today but didn't break yesterday's low. I added a small amount of January 2018 calls to hold over earnings, which come out after the bell tomorrow.
I also started accumulating some calls in FB today. The company reported good earnings a few weeks ago and the stock has been trading sideways, developing a volatility squeeze. I liked how the stock bounced midday right around its 20 day moving average and continued to be bought into the close, so I picked up some March $133 calls. These calls will automatically be sold if today's low is violated.
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qman
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Re: Stock Update for February 17, 2017 [Re: geokills]
#24108619 - 02/21/17 03:26 PM (6 years, 11 months ago) |
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It feels like a final melt up and blow off top coming in the next 6-12 months, I wouldn't be surprised to see Dow 25-28,000 before it's all said and done.
God help us after that final speculative top is made.
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geokills
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A Lesson on Trade Design - Understanding Risk, Volatility Squeezes and Expansions - FB [Re: qman]
#24110440 - 02/22/17 09:29 AM (6 years, 11 months ago) |
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There have been booms and busts for time immortal, and all empires do seem to find the same fate. The timing of such twists in the path of the future is always unknown, and thus it is in knowing how to manage one's risk in order to capitalize on the cyclicality of all things, that will further the divide between those with resources and those without. Awareness and humility are key factors in protecting that which one may gain, as overconfidence can both blind oneself to opportunity just as well as it may blind oneself to risk.
When viewed through the lens of the stock market, one must always remember that risk is inherent wherever a gain may be sought, and that such risk must be clearly defined before a decision may be made. Whether you define your risk of loss by using a protective stop on your positions or a smaller position size, it is the most important thing a trader can incorporate into his or her methodology.
To that end, let's take a quick review of yesterday's trade on FB. The company reported good earnings a few weeks ago, but the stock had already moved considerably since the beginning of the year from traders who were anticipating good earnings. Thus, the earnings surprise, wasn't truly a surprise, and the stock essentially traded sideways. While not necessarily intuitive, this is a positive development, as it shows that buyers were not overly exuberant in bidding up the stock prior to earnings, instead, they were right on target. Once the earnings numbers were released, neither sellers nor buyers were more aggressive than the other, and the stock found equilibrium. As it continued to hang out in this area of equilibrium for weeks, the average cost basis of the owners of stock begin to contract toward to the current price as well, since hundreds of millions of shares of FB were still being bought and sold over this time period, but all at around the same price.

This is the process of creating a high base. The stock is near all time highs, but churns around enough to create an area of potential support or resistance, depending on which way the dam finally breaks. Since FB's earnings were actually quite good and the stock has generally been trending higher for years, the logical expectation is for a continuation of the prevailing trend to the upside. Thus, in watching the base forming, I happened to catch a high volume spike of buying yesterday that caused FB to bounce near its 20 day moving average, which the stock hadn't come down to meet in almost two months. This signaled a low risk buying opportunity, as I could buy a sizable position with the expectation that this period of low volatility (the high base) would cyclically lead to a period of increased volatility when price broke out of the range that centered around $133. Since the stock had good fundamentals and has been trading higher, the expectation was for a break to the upside and so I bought March $133 call options, giving me the right but not the obligation to purchase shares of FB at $133 until March expiration. To define my risk, a protective sell stop was placed below yesterday's low, just under FB's 20 day moving average, as a move below that level would likely indicate that volatility would instead expand to the downside, and thus my calls would begin losing money rapidly.
In trades like these, where volatility is squeezed and you can set your stops very close to the current trading range (i.e. your entry point), you are able to take a more aggressive position size because you won't have to wait for a big move to know whether you were right or wrong, and thus your potential loss can be kept very small. There are definitely times when the stock may wiggle, your stop will be hit and you'll get shaken out of your trade for the small loss, only to be faked out and watch it immediately bounce higher. But that again harkens back to the importance of awareness and discipline. If you are paying attention, you know you can always put the trade back on, even if you took a small loss on it already. Likewise, the more familiar you get with how a stock moves, the better you will be able to identify areas of support and resistance, and thus place your stops accordingly.
Lastly, I want to emphasize the power of leverage through options. So often people ask me about trading penny stocks, because they think they can buy a million shares and it only has to move a few cents to make a fortune. In theory that may be true, but the lack of liquidity, wide spreads between the bid and the offer, and the generally extreme volatility of penny stocks make trading them a fool's errand. The far better way to juice your potential return is to leverage through options on highly liquid stocks. You put up a relatively small amount of capital to control a large amount of stock, and if you trade a popular stock like FB, there is plenty of liquidity to get you both into and out of your trade without wild fluctuations between the bid and the offer price.
Case in point. At the time of this writing, FB is up 2.16% on the day. However, the March $133 calls I bought yesterday are up a whopping 70%. Had the stock gone against me and my protective stock been hit, I may have looked to lose about 5-10% on the capital I put into it, depending on a multitude of factors that I won't get into here. Point being, know how to set your expectations, define your risk, thus planning your trade. Ultimately, and most importantly, trade your plan.
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qman
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Re: A Lesson on Trade Design - Understanding Risk, Volatility Squeezes and Expansions - FB [Re: geokills]
#24110580 - 02/22/17 10:23 AM (6 years, 11 months ago) |
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Congrats on your FB calls, I just have a very difficult time with a stock that has a $395 billion market cap that trades with a PE of 39.
Yes, the market can stay irrational longer than investors can stay solvent, FB is definitely a momentum play at this point, I find that dangerous to investors that aren't as nibble as someone like yourself.
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geokills
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Re: A Lesson on Trade Design - Understanding Risk, Volatility Squeezes and Expansions - FB [Re: qman]
#24110740 - 02/22/17 11:23 AM (6 years, 11 months ago) |
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Quote:
I just have a very difficult time with a stock that has a $395 billion market cap that trades with a PE of 39.
It is important to remember that investors pay up for growth. Noting that the PE of Facebook is 39 is only half of the story. When analyzing growth stocks (as opposed to value stocks), I prefer to utilize the PEG (Price to Earnings Growth Rate) when determining whether or not I consider a stock to be "expensive".
- PEG < 1 = Cheap
- PEG > 1 = Fairly Valued
- PEG > 2 = Expensive
Facebook's revenue growth over the past 12 months has been over 50%, making their PEG 1.31. While this isn't cheap, it is neither overvalued. With that said, it does make for a slightly riskier proposition, as such a high growth rate for such a large company ultimately becomes unsustainable at some point in time. In that respect this is a momentum play, but it is also worth noting that for an active investor, momentum plays often provide the greatest rewards. Frankly, if this were earlier in the growth cycle (i.e. Facebook were still a smaller company), the PEG probably would be closer to 2. But as investors recognize that it becomes harder to sustain high revenue growth as a company gets larger, the PEG at 1.31 appears to reflect that caution.

Wanted to mention that Alibaba (BABA) has a chart that is strikingly similar to FB, expanding out of a volatility squeeze. The primary difference is that there is resistance from a top last September around $110, and to a lesser extent the all time high around $120 (although that was so long ago that it is not nearly as relevant as the $110 level). I think BABA is buyable here.
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geokills
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Re: Stock Update for February 23, 2017 [Re: geokills]
#24112913 - 02/23/17 08:36 AM (6 years, 10 months ago) |
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Market is acting poorly since opening. Not a catastrophic sell signal, but the S&P set a new high this morning at pretty much the opening print and is now beginning to test the low end of yesterday's range. This makes it look like buying enthusiasm may be waning, and I don't want to be caught holding the bag. As such, I closed the majority of my long positions and even bought some March $236 SPY puts (with a protective sell stop in place - Edit: stopped out). The market may bounce without breaking yesterday's lows and I'll look a bit foolish, but the easy money has been made.
Quick note that TSLA sold off a bit on earnings, and as this is one I want to own for the long haul, I have a buy order in for options that will trigger if the stock tags $250. Would look to buy more if it can find its way down to its 200 day moving average around $220.
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Edited by geokills (02/23/17 10:49 AM)
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All We Perceive
Sea Cucumber



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Re: Stock Update for February 23, 2017 [Re: geokills]
#24119876 - 02/25/17 10:22 PM (6 years, 10 months ago) |
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Why are you holding CHK? That is one of the most leveraged energy companies out there... been circling the drain for at least a year. With the SDRL restructuring, my guess is CHK will be next. Very warm weather certainly isn't helping the nat gas prices. Speaking of energy, what's your take on offshore? During the bulk of the oil <$30 downturn, people were loudly proclaiming that fracking would keep oil price around $40 for the long term. Oil is now $54 and climbing as OPEC cuts production. Offshore is profitable above $60. With Rex Tillerson at the helm and Trump loving energy, seems like offshore will come back. Realistically, I do not see prices heading back down to $30 as OPEC really would gain little benefit form a production hike given the history with fracking to counterweight. An Iran conflict is becoming more plausible as well with Trump buddy buddying up to the Saudis. I listened to the Transocean Q4 conference call and they are predicting over $60 a barrel by 2018. However, offshore has not moved. What's going on here?
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"plus they atually think jambands are good or sumthing, so they clearly know absolutely nothing about music, clearly lol" -Bassfreak
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geokills
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I dumped my CHK when they reported earnings last week and the miniscule move higher at the open reversed to break $6 and ultimately sliced through the 200 day moving average. I held it on one hand because of its speculative nature (high risk/high potential reward), as well as the underlying assumption that natural gas had bottomed. Despite the recent nosedive in nat gas futures, they are testing a level where they have bounced twice in the past year, and where they also found support in 2015 before breaking down in October of that same year. Nevertheless, my decision to hold CHK was a decision that lost me money, and despite the fact that I do think nat gas could bounce here, I will look to redeploy that capital elsewhere. It does seem like oil could make its way up to $60 fairly easily, but that area should provide some formidable resistance and the market probably anticipates a longer period of consolidation below $60 on account of it, hence why offshore hasn't appeared to move much.
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geokills
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Stock Update for February 27, 2017 [Re: geokills]
#24123096 - 02/27/17 09:43 AM (6 years, 10 months ago) |
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TSLA caught a downgrade. I really like the long term story here and had previously sold out of a very profitable position prior to earnings. Almost bought on the earnings selloff, but figured it could fall farther. Goldman's sell rating today helped make that happen, as the stock is bouncing off of its 50 day moving average and I am dipping my toe in the water to rebuild a longer term position. Musk noted on the conference call last week that raising additional capital would reduce risk, since the company is operating at negative cash flow (and in my view will be for at least a year into their production of the Model 3). Capital raises typically take the form of a secondary share offering on its publicly traded stock, which is dilutive to existing shareholders and thus typically causes a dip in share price. The last secondary offering they did is already up some 40% from the offering price, so another secondary would probably meet with ample demand. Nevertheless, it is a potential negative catalyst, and I would look for that as an opportunity to add to a longer term position. TSLA at $240-$245 is nice, TSLA at its 200 day moving average around $220 would be even better.
FB is hitting new highs again today. I jumped on it this morning with a couple of handfuls of option contacts at the $135 strike. I have since sold half of those, which were weekly expiration and thus high risk. I am holding the other half at April expiration which I have a sell stop set should the share price dip below $135, corresponding to today's intraday low. The profits from the quick scalp on the weekly options will mitigate potential losses on the longer term position, which will allow me to more comfortably stomach small gyrations in the stock during the interim.
S&P500 hit a new high today, but there isn't a whole lot of follow through and the S&P futures did not (as yet) hit a new high. So I suspect the market is not at imminent risk of rocketing higher right here, right now. I'll probably sit the rest of the day out, as the market is meandering and I don't want to give back what I've made this morning. Not to mention a head cold has me feeling rather foggy!
Quick shout out on Square (SQ). I spoke about these guys a while back and made some good money on them. They blew earnings out of the water last night and the stock continues to march higher, ridding along its third standard deviation bollinger band to the upside. Very impressive, although I would not be able to buy any right here (and am kicking myself for having sold out earlier this year).
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Re: Stock Update for February 27, 2017 [Re: geokills]
#24125598 - 02/28/17 09:24 AM (6 years, 10 months ago) |
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What's your take on gold? I've established small positions in I am gold and Kirkland lake for a 5 year window. I'm going to buy on the dips. Seems like gold has really taken a beating with trumps overtures of deregulation. Ultimately, I think the pendulum will swing far left with a large correction. I really don't see how protectionism will not decrease GDP in the long term. Continuing destabilization for the euro zone will push the dollar higher which will create further headwinds for gold which will continue to push it lower in the short term. Ultimately, with interest rates ato rock bottom, the FED will have no option other than to reinstate QE to avoid a correction. Good for gold in the long term. Your view?
Seems like OPEC has their shit together for now. I bet we will see mid 60s oil by end of 2017. When trump reneges on the Iran deal, that will push oil higher too. I see a lot of room for movement here. Those same analysts said oil would be locked in at 40 for years.
Uranium is also very cheap. Whats your outlook here?
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"plus they atually think jambands are good or sumthing, so they clearly know absolutely nothing about music, clearly lol" -Bassfreak
Edited by All We Perceive (02/28/17 09:26 AM)
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geokills
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Gold technically looks fine, although probably due for some downside retracement and a considerable amount of churn with current prices at around the midpoint of the range. Pretty clear landing in Dec 2015 just above the 200 month moving average, with a successful retest in Dec 2016 creating a higher low. There is still overhead resistance from summer 2016, and I expect that the Fed will raise interest rates once or twice this year (even if they may quickly pivot back toward a more accommodative stance), so I'm not expecting the commodity to break out anytime soon. But with a 5 year time horizon, I'd wager the trade will offer a reasonable probability of success.
Haven't looked at Uranium for ages, no comment there.
PS. Added to TSLA and doubled my position in VIX June $10 calls today as portfolio insurance.
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Edited by geokills (02/28/17 12:26 PM)
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Ahab McBathsalts
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Re: Stock Update for February 27, 2017 [Re: geokills]
#24148668 - 03/09/17 11:49 AM (6 years, 10 months ago) |
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Geokills, from a technical standpoint how much room is left in this bull market? I've seen suggestions that it will peak at about s&p 2700 from elliot waves. From a purely calendar view though an 8 year bull market is getting awfully long.
I haven't yet looked at the number and value of IPOS, although that is usually my favorite metric, but with things like SNAP, I would believe that we are getting near a peak.
-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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geokills
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I'd be a liar or a fool if I tried to answer your question with any confidence. There is no way to project how much room is left in an uptrending market, when that market sits at all time highs. It's a little easier when you have defined resistance overhead, but even that can be overcome. The market has felt like it's been nearing a top for years... and yet it just keeps going. Wish I knew that a few years ago, as I'd be in the islands sipping Mai Tais on my very own private beach, coming to you via satellite connection!~ 
I don't put a lot of weight on things like fibbonachi, elliot wave, et al. I just look at the trends in the price action, do my best to define support and resistance, and use protective stops on (ideally) low risk/high probability entries. The market will tell me when its changed direction, but I won't know that (and will never presume to know that) until after the fact.
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Ahab McBathsalts
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Re: Stock Update for February 27, 2017 [Re: geokills]
#24164299 - 03/15/17 01:15 PM (6 years, 10 months ago) |
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-------------------- "Nobody exists on purpose. Nobody belongs anywhere. Everybody's going to die."
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