Learning Markets

Another TVIX long trade

Terrence Chan — Thu, 23 Feb 2012 04:48:56 +0000

A recent decision by Credit Suisse, the issuer of the TVIX etn, to temporarily halt issuance of additional shares of TVIX has capped new supply of the shares, and could potentially result in TVIX trading at a premium to NAV.

read the following links to learn more:

http://ftalphaville.ft.com/blog/2012/02/22/892951/double-trouble-in-tvix/

http://seekingalpha.com/article/382971-credit-suisse-suspends-creation-units-in-tvix-what-it-means?source=yahoo

Can gold overcome resistance (Put GLD 170)?

Nicolai — Tue, 21 Feb 2012 17:06:56 +0000

[PAPER TRADE] – just airing an idea

Europe wailing not done? Could USD re-strengthen?
Why buy GLD if equities are doing so well? I think buyers might be waiting for a pull-back to 1550-1600ounce.
Does it make sense or is it crazy (nice volume on the gap-up so could be a ‘yes’ on the insanity part)?
What do you think?

Long Atlas Pipeline ahead of earnings

Terrence Chan — Tue, 21 Feb 2012 15:39:08 +0000

Atlas Pipeline partners reports earnings after the bell today, so I am expecting that to cause some movement in the stock. Looking at the 3 month chart, I see some positive developments. The impulse signal turned from blue to green in the last session marking the start of a bull move. Previous to that, the stock had been in a decline and one brief session of indecision was succeeded by the Green impulse signal on Friday. Note the circled areas on my chart showing a similar pattern of red bars that turned blue for one session, and then green the next back on Dec 28. It led to about a $1.50 point move in the stock up to the upper BB line at $35.50 back then. Currently, upper BB resistance is at 37.80 so I will use that as my share PT for now. Note the ADX strength is below 25 so for now I have to treat this as a trend-less stock, and take profits when stochastics mark an overbought signal. If it heads above 25 during the week I will hold for longer. Looking at option IV today in the Mar $38 calls it is 26%, which is about the same as it was on Friday, so the upward movement today, and the earnings release later today don’t seem to be priced into the implied vol yet. Options open interest in general for APL is not huge, which could explain why the market maker is not charging a high IV premium. IV could ramp up later in the day though. Getting in at .40 cents for a small wager may pay off.

Sell puts on GILD

Terrence Chan — Fri, 17 Feb 2012 15:20:49 +0000

Selling puts today on GILD on the gap down. IV is high, and the stock is bouncing up from the gap. Perfect setup to sell some “vol” and pick up a credit. GILD is a great biotech stock and is in a strong uptrend making this a high win probability trade.

[WEBINAR] Making Profits From the Euro’s Future Decline

John Jagerson — Fri, 17 Feb 2012 00:11:30 +0000

NOTE:

This is the last live Ask the Expert webinar we will be hosting at Learningmarkets.com, however, before you lump us in with the likes of Reed Hastings or Thorsten Heins allow us to give you a little more info. If you would like to have daily live (and recorded) events from Learning Markets (and really who wouldn’t?) you can get them by joining us at Scottrade.com. Yes, you will have to set up an account ($7 trades and $0 ETFs? Not too shabby.) and it’s all free.

We are also hosting twice-weekly strategy sessions that dive deeper into specific investing, and option topics on Tuesday and Thursday evenings, weekly podcasts, weekly blog posts and monthly articles in the Scottrade community. If you have questions about this change (and I mean ANY questions) please feel free to contact us through the comments thread at the bottom of today’s post or by sending us an email at

OK, now back to business…

The stock market is riding the razor’s edge of new gains or a retracement. The deciding factor is likely the short term future of European debt and the value of the euro. In today’s Ask the Expert we will be tackling this issue with trading ideas that can be explored by stock, option, or FX traders.

[WEBINAR RECORDING] Bernanke Sends Mixed Signals
Hint: You can increase the size of this video by clicking the “full screen” button in the lower right.

Deadcat bounce Downside in Google (GOOG)

Terrence Chan — Thu, 16 Feb 2012 18:36:42 +0000

Since yesterday’s big drop in AAPL, I’ve been going with the thesis that the crowds plowing into momentum tech stocks are at a temporary end. I’m expecting a 3-4% pullback on the indices, and am shorting any rallies up into the 1355 SPY and 2950 Nasdaq Comp levels. With tech having led this rally, I am looking to ride it on the way down. Picking a stock to ride, I like to ride the underperformers, and GOOG has underperformed relative to the index since January. Goog’s chart shows a deadcat bounce at play. The stock gapped down on Jan 20 from an earnings miss, and bounced almost all the way up to fill that gap, and now faces the weight of overhead supply at $617 and above. Currently, the stock is trading back underneath its 50 period EMA ($606.80), and MACD indicator shows a bearish divergence since Feb 6th, and is below zero. Today, GOOG gapped lower, then rallied up as the market bounced, and is sitting just under the 50 EMA right now. I now see an intraday bearish divergence in the Nasdaq COMP index, showing me that the day’s bounce is about to reverse. On this trade I’m looking for a drop down to the 61.8% retracement level (see chart). The VIX is down to 19.81, so IV is back down to near yesterday’s VIX low – some bullishness has returned to the market, making it a great opportunity to go long puts.

RHT — Buying Red Hat as it Returns to Recent Highs

Wade Hansen — Thu, 09 Feb 2012 01:07:57 +0000

One of the important themes we have been seeing throughout this recent recovery in the stock market is how corporations have been investing to bring their technology up to speed to improve productivity and profits. Red Hat has been right in the middle of that discussion, and I think the stock is going to bounce up and off of its most recent pullback (small as it’s been) and continue climbing until it reaches the high of $52.50 it saw three different times (October, November and December) during 2011.

I wouldn’t be surprised to see a little resistance show up at $50, but it shouldn’t take too much to push up and through that.

Hedge your longs – Buy IWM puts

Terrence Chan — Wed, 08 Feb 2012 16:48:58 +0000

Today the market rallied higher at the open but was met with some heavy selling near the highs. The backing and filling that the media has been saying is due to happen looks to be underway. IWM has a gap to be filled between 82 and 81.50. If the market sells off, these put options will rise in value quickly as IV ramps up. For the record, IV at the time of this trade on the Feb 80 Puts is 24%. Chart attached shows a bearish broadening top or megaphone pattern developing in the past 5 sessions.

[WEBINAR] Bernanke Sends Traders Mixed Signals

John Jagerson — Fri, 03 Feb 2012 01:15:56 +0000

Capital flows are trending several directions today leaving most indexes relatively flat. Traders are still trying to digest what the Fed Chairman really thinks about bonds and the conclusion they come to will likely make or break the current stock trend.

In the mean time, tech is looking good after the initial filings for Facebook’s IPO were released. In today’s webinar we will discuss what kind of an impact an IPO of this size could have on the market. We will also be answering your questions that have been submitted over the last week.

[WEBINAR RECORDING] Bernanke Sends Mixed Signals
Hint: You can increase the size of this video by clicking the “full screen” button in the lower right.

Conoco Phillips – Long on the bounce off support

Terrence Chan — Wed, 01 Feb 2012 16:38:33 +0000

COP dropped after their earnings release last week, leading to a decline from 72 to 68. $68 is pretty firm support having been successfully tested in mid December. Yesterday opened up a bullish divergence, and today the momentum has broken out, in combination with a break above the downtrend line. As oil continues to climb higher (weaker dollar trade), COP and XOM will eventually start to rise in sympathy. I like the setup here technically and fundamentally.