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Dr. Duru  

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  • Large Insider Purchases Contrast Extreme Bearishness In Herbalife [View article]
    Thanks for that clarification. I completely forgot about how Einhorn has pressured the stock. Similar to what he has done on several other names.
    Dec 3, 2012. 08:11 PM | Likes Like |Link to Comment
  • Black Friday Trade Gets More Bullish Even As Fiscal Cliff Looms [View article]
    The magnitude and speed of the tax increases and spending cuts is what matters. If they are done gradually and "smartly", the economy should improve in due time.

    I think this is a decent time to buy utilities given recent sell-off. I can only assume they sold off because of people who are scared of paying any higher taxes on dividends. Best to buy XLU in your retirement account.

    I love natural gas pipeline plays. Not familiar with CQP, but I think you will be good there too. Again, if you can, buy in the retirement account.
    Dec 3, 2012. 09:30 AM | Likes Like |Link to Comment
  • The Surprising Truth Behind Herbalife Put Volume [View article]
    Interesting. I was just looking at a snapshot of he latest skew (implied volatility between near-the-money calls and puts).
    Dec 2, 2012. 01:15 PM | Likes Like |Link to Comment
  • ECRI Says Recession Began In July, Rising SPY Could Point To A Recovery Ahead [View article]
    I now use ECRI's constant calls for recession as a source of entertainment. For over a year now, ECRI has insisted that a recession was either around the corner or already here and that the government and Fed could do nothing about it. They have done this without a shred of the humility that you would expect from economists trying to make forecasts in such an uncertain world. Last year, ECRI even derided economists who have made lots of false positive calls for recession. Now, it seems much more accurate to me to say that the U.S. will NOT fall into recession unless the government fails to act on the Fiscal Cliff. We do not need a bunch of indicators or even sophisticated prediction models to tell us that the economy will tumble into recession if the government slashes spending and hikes taxes at the same time and at extreme levels in the middle of a weak economic recovery.

    Going forward, I am much more interested to hear how ECRI twists its past predictions if/when the economy fails to fall into recession in the wake of some kind of Fed compromise.
    Dec 1, 2012. 08:06 PM | 2 Likes Like |Link to Comment
  • The Surprising Truth Behind Herbalife Put Volume [View article]
    News broke on Nov 29th that the COO bought shares to the tune of a cool $2M. I suspect this explains the large recovery in the shares that day on such high volume. This SHOULD effectively put a bottom in this stock. The true test of any on-going theories on who is buying puts/shorting this stock comes now. Will bears continue to press their luck as insiders are loading up on the cheap? If so, they must know something the COO doesn't know...

    I noticed that over the last 2-3 days, the open interest on the Dec 42.5 and 45 puts actually increased. I think this increase supports the thesis here that puts are getting sold to open. Put buyers should have taken advantage of the big plunge in the stock on Thursday to lock in profits or to finally minimize losses. Instead, even more positions were opened. I am also noticing very little skew in the Dec near-the-money puts vs calls, implying that there is not giddy anticipation of some big downside event. This lack of skew is in big contrast to the surge in the put/call ratio and in short interest. (You can get these data from Schaeffer's Investment Research). Lastly, amazingly enough, of the nine analysts on this stock, they are all still at strong buys?!?

    This is one fascinating setup, and I suddenly find myself extremely interested in watching and learning from the unfolding drama.
    Dec 1, 2012. 07:43 PM | Likes Like |Link to Comment
  • The Fed Falls Back Again [View article]
    Thanks for pointing this out. It perhaps explains why the dollar has yet to weaken, gold and silver have not taken off, and the stock market remains stuck churning up and down....ever since QE3.
    Dec 1, 2012. 12:14 PM | Likes Like |Link to Comment
  • Boehner Saves The Post Black Friday Trade [View article]
    Well, the S&P 500 is finally at what should be stiff resistance at the 50DMA. "Stochastics" are overbought. A notable pullback should come imminently. But I think I want to buy that pullback.

    Definitely too hard to "predict" the Fiscal Cliff outcomes, but it definitely helps to stay away from trigger-finger reactions to any headlines.
    Nov 30, 2012. 02:06 AM | 1 Like Like |Link to Comment
  • Monster Spike On Mild FDA Letter Setup By Previous Fear-Based Trading [View article]
    Thanks! Glad you enjoyed it. I personally found the FDA letter extremely fascinating and encourage interest readers to review it for yourselves...
    Nov 28, 2012. 04:38 PM | Likes Like |Link to Comment
  • This Time Should Be Different - Fade The Japanese Yen [View article]
    SA wouldn't publish my quick update because it had too much "technical analysis" in it. So, if you are interested, you can see it on my blog site here:

    I basically used the slight uptick in strength in the yen, despite JGBs dropping to 9-year lows in yield!, to finally nibble on some yen shorts. In this latest piece, I proposed some targets for more aggressive and larger positions.
    Nov 28, 2012. 04:37 PM | Likes Like |Link to Comment
  • Understanding Apple's Recent Share Price Weakness [View article]
    Brilliant. Great stuff.
    Nov 28, 2012. 04:53 AM | Likes Like |Link to Comment
  • Quantifying The Significance Of Black Friday Trading [View article]
    Sorry, Captain, I forgot one more scenario. If you are a bear, another decent risk/reward strategy is to sell the close on Black Friday's with gains. This makes sense since the majority of the time, gains get faded within the week. But if the gains do not get faded in short order, look out....
    Nov 26, 2012. 10:20 AM | Likes Like |Link to Comment
  • Quantifying The Significance Of Black Friday Trading [View article]
    Nice. I wanted to look at other days around Black Friday for these kinds of signals, but I didn't have the time (and I wasn't sure whether I was over-extending the analysis!). Thanks for the additional numbers.

    I also forgot to note that since November to April is a seasonally strong part of the year for stocks, we should expect some upward bias from seasonally important days during this period.
    Nov 26, 2012. 10:00 AM | 1 Like Like |Link to Comment
  • Quantifying The Significance Of Black Friday Trading [View article]
    If you come ashore, just note the trading action this week. Step #1 of the Black Friday play is already over. That is, play for a positive gain on Black Friday.

    Simplified summary => If the S&P 500 manages to close higher today (doesn't look like it will), then you will likely want to buy the index before the week is over. If the S&P 500 manages to avoid fading all its Friday gains in the next few days, same thing, buy the S&P 500. Note well that this analysis did not include any rules for exit or stops. You will have to set those according to your own risk tolerance. The data suggest that once a buy is triggered, the risk/reward for holding is very good.

    Good luck and bon voyage. :)
    Nov 26, 2012. 09:57 AM | Likes Like |Link to Comment
  • Quantifying The Significance Of Black Friday Trading [View article]
    Thanks, DutchJay.
    Nov 26, 2012. 09:54 AM | Likes Like |Link to Comment
  • Molycorp: CEO Confidence In Light Of SEC Action? [View article]
    Agreed. It seems some calculation is going on that includes a hope that the buying itself is a bottoming signal to the market. But it has yet to work for all prior insider purchases by each and every insider. The negativity and selling pressure toward MCP never ceases to amaze me.
    Nov 22, 2012. 02:44 AM | Likes Like |Link to Comment