tag:blogger.com,1999:blog-67479309777106271512008-09-19T01:43:46.656-05:00Distressed VolatilityThis blog discusses investment opportunities and analysis consisting of equities, bonds, options, commodities, futures, indexes, and other investment vehicles traded on public exchanges. It focuses mostly on data trends combining economic, industry, fundamental, valuation, technical and sentiment analysis.Distressed Volatilitynoreply@blogger.comBlogger23125tag:blogger.com,1999:blog-6747930977710627151.post-57368516426344697202008-09-18T17:40:00.011-05:002008-09-18T19:42:06.633-05:002008-09-18T19:42:06.633-05:00Interesting UltraShort Dow 30 ETF (DXD) SEP 67 Put Option Activity.. What Happened here?I wrote about the DXD put option open interest configuration last night when I saw there was a HUGE chunk of puts open at the 67 out of the money strike. Also overnight Dow futures were up 119 so I thought this could actually work out if it was speculative in nature. However this morning the open interest did not make sense given yesterday's volume. It looked like it could've been a buy to Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-66448837404221656032008-09-17T17:07:00.010-05:002008-09-18T03:02:44.186-05:002008-09-18T03:02:44.186-05:00Morgan Stanley Implied Volatility spikes to 277%, CDS Spreads Widen, Potential Merger w/WachoviaWow all of the banks are scrambling to merge to save themselves from this disaster!. This is even happening in the UK (Lloyds to buy HBOS in $50 billion deal). During the past few days I saw that HBOS Plc. lost about half its value at a point.
Traders bid up volatility on Morgan Stanley's options on Wednesday; sourced by the ISE Exchange, implied volatility in Morgan Stanley spiked up to 277.23%Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-77083086626892094752008-09-17T11:28:00.010-05:002008-09-17T15:43:10.789-05:002008-09-17T15:43:10.789-05:00Are We Seeing Capitulation in the Dow, S&P Indices? Where's the next possible bail out?It's not great to hear the words "nationalization of AIG". Both the Dow Jones Industrials and S&P are now below the July '08 lows, at 10,690 (DJIX), and 1,172 (SPX). From the looks of the charts below, the Dow needs to hold the 10,683 support level made in summer 2006, and the S&P needs to hold the 1,150 major support level made in 2004. These 350-500 point moves to the downside are definitely Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-48763204225070380582008-09-16T11:16:00.013-05:002008-09-16T13:35:58.197-05:002008-09-16T13:35:58.197-05:00Credit Default Swap Index, ABX, CMBX Technical AnalysisThe Lehman news is definitely widening spreads in the Credit Default Swap Market. I looked at the Liquid 50 Investment Grade Credit Default Swap Index Futures chart at cbot.com. They are priced in yield spread. I never really charted these securities before but they are driving the problems of this financial disaster because all of the big banks originated swaps to protect themselves from Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-79622736181752346882008-09-14T20:35:00.011-05:002008-09-16T11:16:23.723-05:002008-09-16T11:16:23.723-05:00Lehman Disaster Is Sending Index Futures Lower, BAC Buys MERWell the overnight futures opened and at 8:00, according to insidefutures.com, The S&P Overnight Futures are at -36.6, and the Dow Jones Industrials Overnight Futures are at -286. Here are the 90 minute charts going back 3 weeks for the overnight futures. You can see the big gap down tonight. It's crazy how all of the big investment banks are all intertwined with counter party Credit Default SwapDistressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-4391074600943749822008-09-13T23:00:00.022-05:002008-09-14T13:29:30.281-05:002008-09-14T13:29:30.281-05:00Long Term Dow & S&P Technicals, Near Term SPY, DIA OptionsI can't stop posting about the indices because the market is at an inflection point of either a surprise rally or a HUGE move to the downside. I'm going to look at the long term trend and near term sentiment indicators, including the 25 year chart of the Dow and S&P 500 from barchart.com with technical analysis. Both charts show the 25 year long term trend line hitting today at lower levels. Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-79205925215633355582008-09-11T16:57:00.004-05:002008-09-11T17:35:44.891-05:002008-09-11T17:35:44.891-05:00Dow Jones Industrial Index Analysis (2000 vs. 2005)This is a historical analysis of the Dow Jones Industrial Index during years 2000 and 2005. These were taken from a pdf I made that compared news stories from both years when the Dow Jones Industrial Index were in the 11,000 range. It's interesting to compare this to now where the Dow is close to the 11,000 level and that the index hasn't really increased in value for 10 years! Click on image Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-5184927465816780232008-09-11T09:54:00.008-05:002008-09-11T12:40:10.753-05:002008-09-11T12:40:10.753-05:00US Treasury Notes & Bonds (2s, 10s, 30s), 10 Yr TIPS Spread Update
Due to the market chaos there seems to be a flight to quality in the treasuries. Now traders are even talking about a possible rate cut with commodities coming down, dropping the commodity inflation scare from the FEDs mind. I think there needs be a big flush to the downside to wash out all of the negative sentiment in order to restore the equity market. I wish there was some sort of debt Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-61953491033195162782008-09-07T12:57:00.045-05:002008-09-16T14:53:49.303-05:002008-09-16T14:53:49.303-05:00U.S Economic Update (Economic Data, US Indices, VIX Trend)It looks like the Government is finally going subsidize the GSE's (Fannie Mae and Freddie Mac) and possibly lend $50B to GM. Local banking institutions keep going under and oil prices have been falling due to falling imports/demand, however the housing market could be stabilizing as housing inventories get worked off on a month to month basis. Still the August housing starts and permit data stillDistressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-75283526022112231342008-09-02T21:47:00.015-05:002008-09-16T14:54:52.476-05:002008-09-16T14:54:52.476-05:00Friday's Energy Price Action Predicted Hurricane Gustav's SeverityIt's interesting that the capital markets on Friday predicted the severity of Hurricane Gustav better than most of the weather stations who were predicting the next Katrina. Oil and natural gas prices, along with energy stock price actions, were predicting that Gustav wouldn't effect the energy infrastructure 3 days before it even hit. The anticipation of Gustav's force matching Katrina's did putDistressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-57402016780534901462008-08-25T20:32:00.017-05:002008-09-03T00:47:40.586-05:002008-09-03T00:47:40.586-05:00Chesapeake Energy, Lots of Call Volume.. Tropical Depression? Energy Price Reversal?
I'm looking at Chesapeake Energy again for a quick trade to the $50 area. From their website, they are the 3rd largest producer of natural gas in the US, and 2nd among independents. They own interests in approximately 39,000 producing natural gas and oil wells and are producing 2.3 billion cubic feet equivalent per day and 92% is natty gas.
Charts From Bigcharts.com
It looks like CHK was Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-68093536170256259542008-08-24T16:24:00.011-05:002008-08-24T19:38:06.582-05:002008-08-24T19:38:06.582-05:00Lehman Brothers In Play, South Korean Bank Buy Out?
Lehman is seeing some strength and interesting options activity after last week when the South Korean Development Bank said buying Lehman was a possibility but the price offered was too high. This is after Dick Bove upgraded Lehman Brothers to Buy, saying Neuberger Berman could go for $7-$10 Billion in capital which would price Lehman at nothing on the market, most likely due to the valuation ofDistressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-90174324580891478542008-08-23T11:30:00.019-05:002008-08-24T11:12:27.337-05:002008-08-24T11:12:27.337-05:00Yahoo: Future TV Convergence, Technicals, OptionsI'm looking at Yahoo again, it popped higher along with the overall market on Friday. Here's a look at the chart on Tuesday's set up and Friday's chart.
Tuesday (8/19/08)
Friday (8/22/08)
We're finally starting to hear news about Internet/TV convergence, with news from Intel and Yahoo this week (Intel and Yahoo! to Bring the Internet to Television). It's about time, I think it's a huge Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-108381040684061982008-08-15T14:44:00.011-05:002008-08-15T16:17:40.629-05:002008-08-15T16:17:40.629-05:00Falling Oil, Call Option Volume GM (8/11)GM 1 Year Chart (BigCharts.com)
I saw a lot of bullish call buying in the GM options On Monday morning (8/11/08, with oil hitting fresh new lows and right before Rick Wagoner, chairman and CEO came out and said "the worst may be over for the beleaguered carmaker, in terms of US job cuts, retiree healthcare costs and pension problems", the August $10.00 calls were seeing thousands of contracts Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-66781982606874804762008-08-09T17:50:00.056-05:002008-08-26T01:16:40.336-05:002008-08-26T01:16:40.336-05:00WCI Communities, The Conspiracy Was Everything!! (R.I.P)
WCI Communities, the award winning builder of retirement and golf communities consisting of homes and condos in high rise towers mainly in Florida and the North East, wasn't really relaxing in the sun during the past year and a half. Finally though WCI is resting in peace, after repeated actions of trying to restructure its 4% convertible senior subordinated notes due 2023 that had a $125 Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-90007263460941608872008-07-26T12:12:00.013-05:002008-08-16T09:14:56.377-05:002008-08-16T09:14:56.377-05:00Case For The Long $USD/$CAD Trade, Canadian Energy Trust Massacre '06I used to be bullish on the Canadian Dollar via the $CAD/$USD trade back when it was trading around 0.82 when oil corrected to $49, and natural gas to $6 in January 2007. Canada is a huge commodity exporter and if these commodities increase in value the $CAD/$USD should get a boost (if there isn't extreme monetary inflation for some reason, localized economic/employment issues, or other risks Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-80856436058956805522008-07-21T20:32:00.048-05:002008-07-24T21:29:36.401-05:002008-07-24T21:29:36.401-05:00Yahoo!: Buyout Valuation Still Pegged @ $33
I've decided to look at Yahoo again. I was first interested in this company when it it broke the $20 level back in January of this year right before the Feb 1st $31 buyout offer by Microsoft.. In late April when Microsoft said they were willing to increase the bid to $33, Yahoo wanted $37 and Microsoft walked away. Then Carl Icahn came in, scooped up a bunch of shares, wanted Microsoft to buy Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-11649236607547503052008-07-14T09:46:00.025-05:002008-07-16T14:28:13.280-05:002008-07-16T14:28:13.280-05:00GM: Analysis & Exchange Traded NotesFirst of all, how about this market? The Government comes in and saves Fannie Mae and Freddie Mac and also seizes IndyMac Bancorp Inc after a bank run (Fed offers to lend to mortgage companies, Treasury plans possible equity investment. IndyMac seized as financial troubles spread). I don't know if I should be surprised that the VIX ISN'T at all time highs and indices at all time lows. Actually Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-86166444181157167032008-07-12T13:31:00.047-05:002008-07-19T23:43:30.261-05:002008-07-19T23:43:30.261-05:00Distressed Detroit..
As you've read in the news, Detroit's current mayor Kwame Kilpatrick is currently being investigated in a text message scandal and now I recently read this article by AP: FBI Probe Latest Setback for Beleaguered Detroit. FBI probe of sludge recycling contract is latest setback for beleaguered Detroit..
"Auto industry cutbacks, double-digit unemployment and one of the nation's highest home Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-89918694328940917512008-07-11T12:21:00.027-05:002008-07-19T23:08:30.219-05:002008-07-19T23:08:30.219-05:00Oil touches $147: USO/XLE Charts/Options AnalysisOil sets new record above $147 a barrel: Crude jumps above $147 as concerns persist about Middle East conflict; heating oil hits record.Link
I found this argument on CNBC between some smart traders that caught my eye this morning. Rick Santelli knows whats going on.. Economic Panel: Oil soars to a record near $147, with Jack Bouroudjian, Brewer Investment Group; Mad Money host Jim Cramer and Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-84822615201698783142008-07-11T11:07:00.010-05:002008-07-14T22:58:31.371-05:002008-07-14T22:58:31.371-05:00Freddie Lehman hit in the Fannie, Dow-ch!Wow, the market just KEEPS getting killed. Credit crisis is alive and well! Freddie and Fannie are hitting the new big time. Lehman was down 20% today hitting an intraday low of $13.29 (Shares Of Lehman Brothers Sink Amid Financial Sector Concerns).
Also there are Bloomberg headlines that the gov will NOT bail out Fannie and Freddie! “Our primary focus is supporting Fannie Mae and Freddie Mac inDistressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-74569631793520222182008-07-10T22:08:00.013-05:002008-09-16T14:18:49.676-05:002008-09-16T14:18:49.676-05:00Orient Express Hotels Put ActivityOrient Express Hotels is interesting, and I've been watching this for about six months now. Here we have an amazing company, seriously look at the assets at their website. Anyway, late 2007 a bunch of institutions (including DESHAW,SAC) were scooping up >5% positions in this company, and also Indian Hotels bought about 11.5% of the company in a December 2007 filing and Indian Hotels wanted to do Distressed Volatilitynoreply@blogger.comtag:blogger.com,1999:blog-6747930977710627151.post-47297064477785755232008-07-10T21:48:00.010-05:002008-07-19T19:53:02.109-05:002008-07-19T19:53:02.109-05:00Welcome To Distressed VolatilityWelcome to distressed volatility. I got the first name by thinking of certain situations that some large cap companies are in at the moment "distressed" as well as why the some stocks that define America (GM) are being pushed down to 52 year lows "volatility". So there you have it, Distressed Volatility. I look forward to discussing anything I come up with during my daily analysis routines of theDistressed Volatilitynoreply@blogger.com