Tag Archives for " twlo "
Morning Call Express: AAPL Picking
In today’s Morning Call Express, Scott Redler talks about how to navigate the current range and what levels to be looking at to trade around or, if nothing else, be aware of them. He also talks about AAPL, his recent trade in it, and where to look for it move heading forward. Scott also looks at some individual names.
Continue Reading -->The Morning Hammer: We Won’t Get Fooled Again?
Get a Quant Edge in Today’s Markets Today after the close, Rob Smith is hosting a FREE webinar on his unique Quant Edge Trading Strategy. Read all about it ********************************************************************* The bears had a great day yesterday. SPX only fell -0.5%, but with Hillary Clinton’s help, they sent biotech from first to worst in a matter of hours, and some key momo stocks like Twilio (TWLO) and Acacia (ACIA) took beatings. Oil also fell on a very bearish inventory report and the VIX got a little pop. Overnight, German business sentiment missed expectations, while Spain reported above-consensus GDP. And Bloomberg is reporting that Chinese authorities may act to cool off Shanghai’s surging property market, including restrictions on mortgages and development loans. This morning, we’re seeing some minor downside follow-through with SPX futures down 5 handles and crude oil off 30 cents. We’ve got a big chunk of economic data coming today with jobless claims, durable goods, Markit PMI, and the Kansas City Fed on tap. However, the big story is still FOMC Chair Janet Yellen’s speech in Jackson Hole tomorrow. Traders have been ratcheting up rate hike expectations, and Fed Funds futures now imply a 54% chance of a December rate hike, up from 47% a couple weeks ago. That’s been putting pressure on gold and US Treasuries. I won’t hazard a guess as to what she’ll say because trying to game the Fed has been extremely hard this year. Everyone was geared up for a big hawk move in June and Yellen came out dovish. In fact, now that I think about it, there are two major parallels with June. We’re heading into a Fed event where everyone is expecting a big hawkish twist. Funny, just as I wrote this, Kansas City Fed President Esther George (FOMC voting member) came out swinging the hawk hammer, saying the “time is right” for a rate hike and that gains in inflation give the Fed room to remove some accomodation. And we’re heading into an OPEC event where a lot of traders expect a production freeze or cut. In June, the Fed and OPEC disappointed the masses. Are we about to get fooled again? I’m not going to make any predictions since I’m not rolling the dice on Yellen’s speech. Just keep in mind that Mr. Market’s primary mission is to fool as many traders as possible at all times.
Continue Reading -->3 Reasons I Would Not Short Twilio (TWLO)
Internet infrastructure play Twilio (TWLO) is one of the hottest stocks in the market, having nearly tripled off the June lows. This morning, it hit fresh a high of $64.16 before pulling back to $60.71. A lot of folks are now talking about betting against Twilio, but I would not consider shorting it for 3 simple reasons: 1) Put Skew There is a significant put skew in TWO options, meaning traders are paying up a lot more money for puts than they are for calls. For example, October $60 put is going for $11.20 while the call is just $7.50. This is a sign that options traders are desperate to bet against the stock, a sign of massive embedded negativity. 2) Ramping Put Volume Put options volume has exploded. Today, 6,300 TWLO puts have traded. Yesterday, 27, 308 traded. The day before, 5,578 traded. In the 29 days prior, it traded an average of just 1,306 puts a day. This is another sign that traders are desperate to bet against the stock. 3) High Short Interest Short interest is 24% of the float as of 7/29, and judging by the options action, it’s probably even higher today. Conclusion The current setup in Twilio is eerily reminiscent of GoPro (GPRO) and Ambarella (AMBA) in late 2014. In both cases, we were looking at fad stocks with huge momentum that were also very crowded shorts. The bears arguing that “what goes up must come down” got steamrolled. If the market falls, odds are Twilio (TWLO) drops too. But make no mistake — if you short this stock, you are playing with fire, because it is indeed a very crowded short. P.S. Have you signed up for Dave Green’s FREE trading webinar yet?
Continue Reading -->The VIX Has Bottomed… and 4 Other Thoughts on Today’s market
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! 1) Return of Volatility? Volatility may finally be returning. As you can see in this chart, the VIX hit a bottom last week at 11.02. It’s now above 12 and I think it moves much, much higher from here. (full disclosure: I am long VIX calls) We just went through 26 straight days without a 1% move in the SPX. Volatility is mean-reverting. You never know exactly when the pendulum swings back, but I believe we are eyeing the seeds of it. For example… 2) Russell Down? The Russell 2000 is underperforming today, which is a reversal of the recent trend. This could be a sign that traders are growing a little wary and taking some profits off the table. Right now, the Russell is at the lows of the day. If it makes even lower lows, the bulls will get more nervous. 3) Biotech! The bios are underperforming a little bit today, but like the Russell, traders will get nervous if we see a real breakdown here. For the past couple of years, biotech has been ground zero for speculative money, and when it breaks higher, the bulls tend to feel pretty good. And of course, the flipside is equally true. Bulls get nervous when the bios give up. IBB needs to hold $290ish. 4) Apple & Berkshire Apple’s (AAPL) mega rally off $91.50 was ignited by Berkshire Hathaway’s buy of the stock. Today, it’s getting a little pop on news that Berkshire increased its stake. It would be funny if Warren Buffett marked the bottom and the top. 5) Tomorrow Is a BIG Day Tomorrow we’ve got crude oil inventories and the FOMC Minute, both of which could set off some fireworks. Traders are once again completely confused over the Fed’s direction, and maybe we get some clues as to whether a September rate hike is on the table as some folks have intimated. And with the marketing teetering back and forth, maybe traders get worried if oil breaks down. 6) Twilio! (BONUS ROUND!) Twilio (TWLO) is the current poster child for momentum trader wackiness. It’s still going strong even though some others like ACIA and FN are falling off. If TWLO follows suit, it could be another sign of profit-takers cashing in. By the way, a lot of traders are talking about TWLO as if it’s a sure-thing short, but I would not touch it on the short side. P.S. Have you signed up for Dave Green’s FREE trading webinar yet?
Continue Reading -->