Morning Call Express: Debating Times
In today’s Morning Call Express, T3 Live Chief Strategic Scott Redler breaks down the market action following the first US Presidential debate between Donald Trump and Hillary Clinton.
Continue Reading -->T3’s Take 3: Stocks Drop Ahead of Epic Trump vs. Clinton Showdown
A Unique Way to Trade Options… My buddy Doug Robertson is hosting a FREE options trading webinar this Thursday. Doug’s going to be teaching his unique method for creating income with options, so I suggest you check it out. ********* 1) Disney for Twitter? Seriously? Twitter (TWTR) shares got a huge lift on record options volume Friday on rumors that the company could be acquired by Google (GOOGL) or Salesforce.com (CRM). Today, a host of analysts and commentators threw water on the rumors, and the stock was even downgraded by Oppenheimer, driving some profit-taking. But this afternoon, Bloomberg reported that Disney (DIS) is working with an adviser on a potential Twitter bid, sending the stock up all over again. Presumably, Twitter’s real-time news and data feeds could be integrated into Disney media properties like ABC and ESPN. However, a T3 Twitter poll indicates that trader still think Google (GOOGL) is the most likely buyer, assuming it happens at all: 2) Bank Scare Drives Downside German Chancellor Angela Merkel ruled out state assistance for Deutsche Bank (DB) before next year’s national election, which hit the stock hard. Deutsche has been fined $14 billion by the US Department of Justice for its mortgage-backed securities practices, which could cause liquidity problems for the bank. That sent European equities down this morning, setting the tone for the US. The S&P 500 fell -0.9% to 2146.10, with the Nasdaq Composite and Russell 2000 making similar moves. US bank stocks led the decliners’ column, following their European counterparts. Gold mining stocks fell after precious metals slipped in the afternoon. On the plus side, crude oil and energy stocks pushed higher on continued chatter about a possible OPEC output freeze. 3) Trump vs. Clinton The first Presidential debate between Donald Trump and Hillary Clinton will be held tonight. Aside from the general market fallout, traders will especially be interested in how health care and drug stocks perform tomorrow. One major reason biotech (IBB) has rallied in recent weeks was Hillary Clinton’s pneumonia diagnosis. Since she has been an outspoken critic of rising drug prices — specifically targeting Mylan’s (MYL) Epipen — she is seen as an enemy of biotech and big pharma. Her illness boosted Trump in the polls, which in turn gave biotech a reprieve. So if Clinton scores a clear victory, drug and biotech stocks are likely to fall. And obviously, the reverse is likely to be true if Trump wins. Tuesday’s Trading Calendar US Economics (Time Zone: EDT) 09:00 S&P CoreLogic CS US HPI MoM SA (Jul): prior 0.21% 09:00 S&P CoreLogic CS 20-City NSA Index (Jul): prior 189.87 09:00 S&P CoreLogic CS 20-City MoM SA (Jul): exp. 0.00%, prior -0.07% 09:00 S&P CoreLogic CS 20-City YoY NSA (Jul): exp. 5.10%, prior 5.13% 09:00 S&P CoreLogic CS US HPI NSA Index (Jul): prior 182.42 09:00 S&P CoreLogic CS US HPI YoY NSA (Jul): prior 5.07% 09:45 Markit US Services PMI (Sep P): exp. 51.2, prior 51 09:45 Markit US Composite PMI (Sep P): prior 51.5 10:00 Consumer Confidence Index (Sep): exp. 99, prior 101.1 10:00 Richmond Fed Manufact. Index (Sep): exp. -2, prior -11 11:15 Fed Vice Chair Fischer Discusses Why Study Economics? Global Economics 04:00 EUR M3 Money Supply 20:20 AUD RBA Assist Gov Edey Speaks Earnings Before Open: None of significance After Close: Cintas (CTAS) Nike (NKE)
Continue Reading -->A Trump vs. Clinton Options Strategy
Tonight we’ll see the first US Presidential debate debate between Donald Trump and Hillary Clinton. I’m going to leave my personal opinions about both candidates out of this, and keep it focused on the markets. A major reason biotech (IBB) has rallied in recent weeks was Hillary Clinton’s pneumonia diagnosis. Since she has been an outspoken critic of rising drug prices — specifically targeting Mylan’s (MYL) Epipen — she is seen as an enemy of biotech and big pharma. Her illness boosted Trump in the polls, which in turn gave biotech a reprieve. That’s perhaps a bit ironic, because Trump himself has been critical of drug company pricing practices. So heading into the debate, there appears to be a binary outcome — not between the candidates, but whether or now there is a decisive outcome. If it’s a close call, that will just add to the confusion and the impact on stocks is a wash. But if one side scores a big victory, odds are these stocks move, at least in the early going. So I’d look at the following trades depending upon one’s stance about the outcome: Benefits from a big Clinton or Trump victory: -Buy IBB $295 straddle expiring October 15 for $7 (give or take 10 cents) Benefits from a stalemate: -Sell IBB weekly $285/$290/$300/$305 iron condor expiring Friday for $1.88 (give or take 5 cents) I’d keep any positions small, and would look to close out either one tomorrow on the open.
Continue Reading -->The Morning Hammer: Tension Is On the Tape
European equities are down again this morning on bank weakness. German Chancellor Angela Merkel ruled out state assistance for Deutsche Bank (DB) before next year’s national election, which is hitting the stock hard, and in turn, other European banks. DB faces a $14 billion bill from the Department of Justive related to MBS activities during the bubble. They are appealing, but shareholders are very concerned that the bank will have to raise cash. The Euro Stoxx 600 is down -1.4% with financials down -2.0%. The drama is driving demand for safety assets, and the yen, (BTW, you should read Kurt Capra’s great work on USDJPY) German bunds, and US Treasuries are ticking higher. Crude oil is near $45 after Algerian Energy Minister Noureddine Boutarfa said Sunday that Saudi Arabia offered to cut production to January levels. But keep in mind that oil headlines are running wild ahead of the OPEC meeting this week, which is an “anything goes” event. German business sentiment hit a 2-year+ high. However, UK mortgage approvals dropped sharply in August. The Bank of Japan reported that corporate cash and household deposits hit an all-time high as business and consumers remain reluctant to spend. On the deal front, CBOE (CBOE) is buying BATS Global (BATS) for $3.2 billion. Funny, last week there was a rumor that CBOE itself could be in play — but I guess someone got their wires crossed. Tonight, we’ll have the first Presidential debate between Hillary Clinton and Donald Trump. If either candidate gets a decisive victory, we could see a real move in biotech tomorrow. (down if Clinton wins, up if Trump wins) SPX futures are down in the early going, and I guess we’re going to see if bears are ready to make a real stand. Friday was a modestly ugly day, but the bears have been flopping bretty bad since June. It’s hard to tell when that will stop, but tension is starting to build on the tape again.
Continue Reading -->Morning Call Express: Debating the Action
In today’s Morning Call Express, T3 Live Chief Strategic Officer Scott Redler breaks down the action in SPX, as well as individual names like AAPL, FB, and DB.
Continue Reading -->T3’s Take 3: Twitter Skyrockets on M&A Chatter, Facebook Not so Much
Trade Options Like a Pro… My buddy Doug Robertson is hosting a FREE options trading webinar next week. Doug’s going to be teaching his unique method for creating income with options, so I suggest you check it out. 1) Twitter Blasts Into Orbit This morning, CNBC reported that Twitter (TWTR) may be in talks to be taken over by Google (GOOGL) or Salesforce.com (CRM). While Twitter has been the source of regular takeover rumors for over a year, traders certainly seemed to believe the new chatter. Twitter shares rose an incredible 21.4% to $22.62 today, its best performance in over 2 years, while call options volume exploded. In fact, Twitter call options set a volume record today, surpassing their last record set on December 26, 2013 – when Twitter’s stock price hit an all-time high of $74.73. 2) Markets Take a Break US stocks took a breather today after 4 straight days of gains and a record high in the Nasdaq Composite yesterday. The S&P 500 fell -0.6% to 2164.69 as traders locked in gains. Large cap tech was weak, with Apple (AAPL) falling -1.7% to $112.71 after market research firm GFK said iPhone 7 sales could disappoint. Crude oil dropped -3.2% to $44.85 after Saudi Arabia dismissed reports of an output freeze or cut at next week’s OPEC meeting in Algiers. As a result, oil and energy services stocks led the decliners’ column. Biotechnology, industrials, and financials were also weak. 3) Facebook Suffers a PR Blow Shares of momentum favorite Facebook (FB) took a little dive today after apologizing for an error in its video measurement tools. Facebook mistakenly overstated the average time its users spent watching videos for the past 2 years. This news raises questions about the success of Facebook’s high-profile push into video, and is causing some frustration on the part of advertisers that make decisions based upon Facebook video metrics. However, Facebook said that its miscalculations did not impact customer billings or the number of video views, which should soften the blow to some extent. P.S. Don’t forget to check out Doug Robertson’s options event. Monday’s Trading Calendar US Economics (Time Zone: EDT) 10:00 New Home Sales (Aug): exp. 600k, prior 654k 10:00 New Home Sales MoM (Aug): exp. -8.30%, prior 12.40% 10:30 Dallas Fed Manf. Activity (Sep): exp. -3, prior -6.2 11:45 Fed’s Tarullo Speaks on Next Steps in Bank Stress Testing 13:30 Fed’s Kaplan Speaks in San Antonio Moderated Q&A Global Economics 04:00 EUR German Ifo Business Climate 05:30 CHF SNB Chairman Jordan Speaks 10:00 EUR ECB Pres. Draghi Speaks 19:10 CAD BOC Gov. Poloz Speaks Earnings Before Open: Cal-Maine Foods (CALM) Carnival Corp (CCL) After Close: None of Significance
Continue Reading -->Twitter Options Go Crazy on Takeover Rumors
We’ve seen many, many Twitter (TWTR) takeover rumors I Googled twitter takeover rumor and got 7.94 million results. Benzinga has a great list of 2016 Twitter takeover rumors here. Obviously, they’ve never come true. And anyone who’s been watching the markets for any period of time knows that 99% of takeover rumors are false. But traders are really, really buying into CNBC’s fresh report that Google (GOOGL) or Salesforce.com could buy Twitter. The stock is up 19% to $22.16. This is Twitter’s best day since July 30, 2014. And call options volume is exploding. As of 11:50 a.m. ET, 458,468 calls have traded vs. a 10-day average of 70,403. This is the second biggest day for Twitter call options volume ever. The record is 618,767 contracts, set on December 26, 2013 when Twitter hit its all time high at $74.73. And frankly, the Twitter takeover rumors remind me of the endless takeover rumors that surrounded BlackBerry (BBRY) a.k.a. the artist formerly known as Research In Motion (RIMM). Interestingly enough, T3 Live did a Twitter poll (ironic, huh?) asking if Twitter will receive a takeover offer. 60% say yes: But I’ll only believe this when I see it.
Continue Reading -->The Morning Hammer: Time for a Break?
Global equities are down for the first time in 5 days as profit-taking sets in. We’ve had a nice central bank-driven surge over the past 2 days and markets are taking a break. Crude oil is red but off morning lows after Bloomberg reported that Saudi Arabia may have offered to cut production if Iran agreed to freeze output. This seemingly increases the probability of some type of coordinated output freeze/cut at next week’s OPEC meeting in Algiers. However, keep in mind that the OPEC news flow has been all over the place. I wouldn’t be surprised to see headlines this afternoon saying there’s no chance of a deal. I’m long oil, so this chatter is good for my portfolio, but the back and forth is getting exhausting. Today’s economic calendar is pretty light, with thee Markit US Manufacturing PMI at 9:45 a.m. and the Baker Hughes Rig Count at 1:00 p.m. We’ll also have Fed heads speaking today. Harker, Mester, and Lockhart will appear together on a panel at the Philly Fed conference at 12:00 p.m., while Kaplan will speak in Houston at 12:30 p.m. Overnight, the euro-area IHS Markit PMI fell in September due to weakness in Germany. Facebook (FB) is taking a hit this morning after it announced it over-inflated video views. Facebook insists that the issue did not impact billing to advertisers, but it certainly raises questions about platform engagement. Yahoo (YHOO) is also off on continued fallout from its security breach. Sentiment is still pretty mixed, so it’s hard to get a gauge of just how overheated (or is it underheated?) the market is. Thus far, the bears have been failing at every turn, so let’s see if they can change that today. I’d still key on biotech (IBB). It’s hard to break the market when biotech’s strong, so that’s a primary area of interest right now. IBB broke above $300 yesterday for the first time since January on a solid string of good news including mergers (both real and imagined) and positive drug data. Good luck out there.
Continue Reading -->T3’s Take 3: NASDAQ Smashes to Record High on Post-Fed Optimism
Prop Trading Information Session Starts Soon! Click here to get in the room now! 1) All-Time Nasdaq Highs The Nasdaq Composite slammed to a new all-time 5341.88 all-time high today on continued momentum in large-cap technology and biotechnology shares. Traders remain pleased with yesterday’s Fed statement, which indicated a slow and steady rise in interest rates over the long run. The S&P 500 gained 0.6% to finish at 2177, while the Russell 2000 rose 1.5% to 1263. All S&P sectors finished in the green today, and we saw relative strength in some of yesterday’s winners like real estate, oil service, airlines, and industrials. Gold miners saw profit taking despite an increase in gold prices, which smells like profit-taking after a massive run up yesterday. 2) Sentiment Check Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. So I regularly check various sentiment measures to get a realistic reflection of the market’s mood. Right now, traders seem somewhat bearish, even though the S&P 500 is less than 1% from its 2193.42 all-time high. The ISE Sentiment Index, AAII Sentiment Survey, and S&P 500 options prices all indicate that traders are very concerned about a drop in the market, which implies that this rally is not widely trusted. You can read more about this here. 3) Buy Buy Airnb? This afternoon, Fortune reported that home/lodging sharing company Airnb secured $555 – $800 million in new financing at a $30 billion valuation. Unfortunately, this means that Airbnb will not join what has been a fairly hot IPO market. Recent new issues like Twilio (TWLO) and Acacia (ACIA) have become darlings among momentum traders. But with this significant cash infusion, it appears that Airbnb won’t be tapping the public markets for financing any time soon. Friday’s Trading Calendar US Economics (Time Zone: EDT) 09:45 Markit US Manufacturing PMI (Sep P): exp. 52, prior 52 12:00 Fed’s Harker, Mester, Lockhart on Panel at Philly Fed Conf 12:30 Fed’s Kaplan Speaks in Houston in Moderated Q&A 13:00 Baker Hughes U.S. Rig Count (9/23): prior 506 13:00 Baker Hughes U.S. Rotary Gas Rigs (9/23): prior 89 13:00 Baker Hughes U.S. Rotary Oil Rigs (9/23): prior 416 Global Economics 03:00 EUR French Flash Services PMI 03:30 EUR German Flash Services PMI 04:00 EUR Flash Services PMI 08:30 CAD Core Retail Sales 08:30 CAD Core CPI Earnings Before Open: Finish Line (FINL) After Close: None of Significance
Continue Reading -->The Point of Gold Recognition?
A few days ago we offered that GDXJ/GLD were at inflection points and that the next leg up to 1425/1450 in gold may be here. Yesterday may have been the first step. The behavior on the first pullback will be key to observe with subsequent follow through. If GDXJ offsets $49-50, which from a bearish perspective is a right shoulder of an H&S top, that should confirm the idea of a new leg up because fast moves come from failed patterns. A failed Head & Shoulders top implies new highs in GDXJ. Moreover, new swing highs in gold will be a point of recognition for those bearish of gold who believe this years rally was a bear market rally. New highs could create a vacuum as the perception that a bull market in gold is underway takes hold. Click here to learn more about Jeff Cooper’s Daily Market Report.
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