The S&P 500 ETF ($SPY) closed at $166.94 on Friday, a new high. We haven't seen a correction in a while, so I was wondering if a portion of those 135,000 SPY May $165 puts that traded on Friday with 43,921 of open interest were positioning for potential downside next week. The contract closed at $0.49, down 53%, and expires on Friday, May 24. I also saw that 75,000 SPY $166 puts traded with 17k open, and 75,000 SPY $167 calls traded with 24k open (via optionmonster), so it could have been part of a spread. SPY's May 165 put had the largest amount of open interest when looking at the near-the-money strikes.
Sunday, May 19, 2013
$SPY May 165 Puts Active, Put/Call Ratio and SVI Moving Higher With $SPY (Hyperinflation Volatility Ahead?)
Chicago Lakefront, Skyline & Street Art (Trying Out The Vine App)
I will definitely have some fun with this. Follow me on Vine here (vine://user/910259282254106624). Vine accounts aren't on the web yet. Check out the Chicago lakefront and skyline from the north side and some street art.
Friday, May 17, 2013
U.S. Dollar ETF $UUP is Near the July 2012 High, Above 200W Moving Average
Whether traders are positioning for Fed tapering/tightening, higher rates, or a pending deflationary depression, the U.S. dollar is trending higher at the moment and near the July 2012 high. I think gold is getting killed on the belief that tightening/tapering/higher real rates are coming, at least in the near-term. Some gold bulls believe the long-term trend for gold is still intact, so we'll see what happens. The U.S. dollar ETF ($UUP) is currently trading at $22.91 and near $23.14 resistance. Keep watching the US Dollar Index versus the market and commodities here. $UUP also broke above the 200 week moving average recently (second chart). Watch to see if the 50 week crosses above the 200 week, which would confirm some bullishness imo. If it breaks above ceiling resistance it could test that multi-year downtrend line which was created during the financial crisis. Did the U.S. Dollar Index (DXY) break out of its rhomboid vertex?
Thursday, May 16, 2013
Excess Money From QE is Causing Hyperinflation in the Stock Market (S&P vs. Monetary Base Since 2009)
Look how the S&P 500 and monetary base have been moving up in tandem since 2009. Amazing isn't it? The second chart is a better view of the hyperinflation going on in the S&P. Hedge fund manager David Tepper told CNBC on Tuesday that if the Fed doesn't "taper off" QE in June, the stock market could super-spike like it did in the back half of 1999 (video below). Boo-yah...
Wednesday, May 15, 2013
Tuesday, May 14, 2013
David Tepper Predicting the Second "Tepper Rally" on CNBC (12/17/2012)
David Tepper, founder and CIO of the $17.9 billion hedge fund Appaloosa Management, has made amazing calls on CNBC since 2010 (Tepper Rally #1 on QE2). He was interviewed again today and is STILL bullish on stocks after this crazy Fed fueled rally (embedding those next). Tepper is up 15.3% on his December 17, 2012 #timestamp.
Dollar Stores and Discount Retailers Are Still Trading Below Their 2012 Highs ($DLTR, $FDO, $DG, $ROST, $BIG)
While the S&P 500 hyperinflates to new highs on the Fed's billi's, dollar stores and discount retailers like Dollar General (DG), Dollar Tree (DLTR), Family Dollar (FDO), Ross Stores (ROST) and Big Lots (BIG) are still trading below their 2012 highs. DG and ROST are close to testing their highs though. And I'll note that TJX, the parent company of T.J. Maxx, keeps making new highs.
So is this proof that the economy and consumer are finally getting better? Or are these companies just correcting after their monster runs. It will be interesting to see how these stocks do in the next bear market. I charted them all out versus the S&P since early 2009 (charts courtesy of StockCharts.com). You can see that they all started to diverge with the S&P in 2012 (except for ROST).
So is this proof that the economy and consumer are finally getting better? Or are these companies just correcting after their monster runs. It will be interesting to see how these stocks do in the next bear market. I charted them all out versus the S&P since early 2009 (charts courtesy of StockCharts.com). You can see that they all started to diverge with the S&P in 2012 (except for ROST).
Monday, May 13, 2013
Guest Post: Three Reasons to Buy Gold Equities Today
Guest post submitted by U.S. Global Investors (the first two paragraphs are important).
Three Reasons to Buy Gold Equities Today
By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors
A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern.
That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons:
Three Reasons to Buy Gold Equities Today
By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors
A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern.
That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons:
5Y CDS Spreads Tighten on Japanese Electronics Cos as Yen Hits 4-Year Low, Fujitsu To Raise Prices (Chart)
As the yen keeps making new lows (now at four-year lows), Japanese electronics companies have seen their 5-year credit default swap spreads tighten during the last three months, according to CMA. They also said that Fujitsu plans to "raise prices in reaction to the increase in the cost of imports" and that "profit boosts are expected for several of the key Japanese Electronics Companies." I found more information on the planned price hikes at Businessweek:
Animated Trigonometry GIF Shows How the Stock Market and Economic Cycles Work
On Business Insider's post "7 Animated GIFs That Will Make You Instantly Understand Trigonometry", #5 is the key to understanding the stock market and economic cycles, IMHO.
Sunday, May 12, 2013
The Most Important Macro Links For May 2013 (Canada, Australia, Ira Sohn, Federal Reserve)
Articles/blog posts on the Ira Sohn Conference, Canada's housing market, Australian dollar, commodities, Federal Reserve, Treasuries, U.S. economy, stocks and more.
Saturday, May 11, 2013
Housing Goes For $3.2 Million In China's English-Style Ghost Town In Songjiang ("Thames Town")
VICE TV took a tour through "Thames Town" in Songjiang, China. It was built in 2002 to look like an English market town. The tour guide said the town is only used to take wedding pictures, but housing goes for $3.2 million. Wow.
Friday, May 10, 2013
UBS's Investment Bank and Wealth Management Arms Drive Q1 Profit, Watch $20 Resistance (Activist Wants To Spin-Off Investment Bank)
I saw that UBS, "the second-largest private bank in the world after Bank of America," uploaded a Youtube video summarizing its Q1 2013 financial results, so I embedded it below for all the UBS fans, investors and employees out there. I also took a closer look at the stock.
UBS reported a net profit of CHF 988 million in Q1 2013 compared with a loss of CHF 1.9 billion in Q4 2012 and a profit of CHF 1.04 billion in Q1 2012. Pretty big swings there. According to Bloomberg News, CHF 988 million "surpassed the 412.3 million- franc mean estimate of nine analysts surveyed by Bloomberg." It also beat a Reuters analyst poll which expected UBS to earn CHF 601 million. On October 30, 2012, UBS announced it was cutting 10,000 jobs and winding down its fixed income business.
UBS reported a net profit of CHF 988 million in Q1 2013 compared with a loss of CHF 1.9 billion in Q4 2012 and a profit of CHF 1.04 billion in Q1 2012. Pretty big swings there. According to Bloomberg News, CHF 988 million "surpassed the 412.3 million- franc mean estimate of nine analysts surveyed by Bloomberg." It also beat a Reuters analyst poll which expected UBS to earn CHF 601 million. On October 30, 2012, UBS announced it was cutting 10,000 jobs and winding down its fixed income business.
Thursday, May 9, 2013
$FXY's Crash Continues as $USDJPY Breaks Through 100, Energy Costs Rise In Japan
$FXY, the Japanese Yen ETF, hasn't stopped bleeding after the Bank of Japan on April 4, 2013 announced its plan to double the monetary base to 270 trillion yen by 2015 to achieve its 2% inflation target (¥270 trillion = $2.68 trillion with USD/JPY at 100.58). So where will FXY find some real near-term support, $90 or $80? Aren't oil and gas imports starting to get expensive in Japan? The yen's slide is definitely shaking up economic activity in Asia. And currency wars are just getting started (1, 2). The European Central Bank (ECB) just lowered rates, the Fed is still printing money with the federal funds rate at 0-0.25%, the Reserve Bank of Australia just lowered its key rate to a record low, the Reserve Bank of New Zealand "intervened in foreign exchange markets last month", the Bank of Korea lowered its key interest rate by 25 basis points, and "China's central bank signaled on Wednesday it was prepared to change its monetary strategy to fend off inflows of speculative capital, as Beijing struggles to control a tide of cash washing in from overseas markets" (Reuters). But the Bank of England held off on more QE today.
Tuesday, May 7, 2013
Statista: Text Messaging in the U.S. Declines for the First Time In 2012 (Chart)
Text messaging is on the decline! Don't Facebook, Tweet, G+ and drive people. Here's an interesting stat via Statista.com.
"In times of Whatsapp, Facebook and other IP-based messaging services, the good old text message appears to have its best days behind it. In 2012, the number of SMS sent by Americans declined for the first time since its meteoric rise in the early 2000s.
Find more statistics at Statista
According to the CTIA, a wireless industry trade association, the total number of sent messages fell 5 percent to 2.19 trillion in the past year. That equals about one message per person per day less than a year ago, when Americans on average sent 20 messages per day. Telecommunications research firm Informa had just recently published a research note stating that the number of IP-based messages had overtaken traditional text messages worldwide for the first time last year. Text messages had long been a major cash cow for wireless carriers who often used to charge 10 cents or more for messages that cost them a fraction of a cent to send.
Interestingly the use of voice calls in the United States has been virtually unchanged in the past five years. On average, Americans spend 20 minutes a day talking on their mobile phones."
Monday, May 6, 2013
Google Invests In Lending Club; Google Investment Bank Coming Soon? ($GOOG)
Google is making an interesting move investing in Lending Club, an online peer-to-peer lending network like Prosper. I think we are witnessing a slow revolution in the credit market after the 'too-big-to-fail' banks destroyed the financial system and got bailed out. Google should compete or partner with the TBTF banks to make the credit market more efficient and transparent (and of course unlock shareholder value). Bloomberg TV interviewed Lending Club's founder and CEO Renaud Laplanche recently. Watch it below via Yahoo Screen.
NYSE Margin Debt Approaching 2007 High, Look How the S&P Reacted at Previous Extremes (Analysis)
NYSE margin debt outstanding is approaching the 2007 high. It hit $379.5 billion in March and a high of $381.3 billion in July 2007. And based on historical data via nyxdata and Yahoo Finance, every time margin debt went parabolic on the chart, the S&P 500 either peaked out 3-5 months later or corrected 17-20% in the weeks ahead (see 1987 and 2011). It is interesting that the 1987 stock market crash freaked leverage out pretty bad – see the divergence between the S&P 500 and margin debt between 1987 and 1990 (chart #3). So, with margin debt approaching the 2007 high, it makes sense to me that money managers are loving the market here. But of course, this time around the monetary base is moving in tandem (going vertical) with margin debt and the S&P 500, courtesy of the Federal Reserve's never ending quantitative easing program (QE). So, in my view, the printed money and margin debt are cruising together on a beta spaceship (S&P 500) with no resistance in sight, and desperately hoping (or maybe not) that they won't hit gravity or crash into an asteroid after 4.3 years.
Here is the info on money manager sentiment via the Barron's article "Dow 16,000" (April 22, 2013):
Here is the info on money manager sentiment via the Barron's article "Dow 16,000" (April 22, 2013):
