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Moby Waller

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  • A Developing Special Situation in SIRI [View article]
    Waren, I'm basically saying there is a high likelihood of a big move in the stock before the end of year in EITHER direction -- so playing an option straddle (buying both the call and the put) is a way to bet on a big move in the stock price with a fairly small cash outlay. The two straddles I mentioned are priced around 0.10 ($10) and 0.20 ($20) and each option controls 100 shares of stock -- on a very simplified basis if the stock moves more than that you can potentially profit. For example if the stock moves quickly to 1.50, the 1.00 Call would be worth at least 0.50 ($50) and the 1.00 Put may be worth a couple cents still.
    Sep 9 02:57 PM | 6 Likes Like |Link to Comment
  • Market Outlook - Watch The VIX For Clues [View article]
    Hi I work with Price and just wanted to reply with my 2 cents on the VIX and the market -- this analysis is mine, Price may not necessarily agree.

    I wouldn't say the VIX is a perfect single predictor of future SPX prices, but it certainly shows the level of concern among options traders. And key levels on the VIX have been good pivot points for market trends over time.

    In my view the VIX has become more of a 'smart money' indicator in recent years than it used to be. In the 1990s when we began studying the VIX, it was often a good contrarian indicator -- especially mini-VIX spikes during bull market trends (they were great long-side buy opportunities).

    If you look back at the VIX long-term big picture, it has tended to remain in certain key ranges ... lower ranges during the stronger bull markets, higher range during times of more volatility. For example from 1991 to 97 it largely was 10 to 20 almost the entire time. Them during the internet bubble era from '98 to 2002 it was in an elevated state of basically 20 to 40. Then 2003 to 2007 another quieter bull run and the VIX was again largely 10 to 20. 2007 to 2011 saw the unprecedented spikes to over 80 (!), but mostly was in the 16 to 40ish range. Since mid-2012 the VIX has gone back to the 12ish to 20 range. Within this range are key levels around round numbers such as 12/12.5, 14, 16, 18, 20.

    I consider the current VIX to be overall in a "safe zone" when below 20/18/16 (as the underlying market trend has been bullish over the past 2 years) -- with the bottom range of 12/12.5 to 14 being important. 12/12.5 has tended to mark VIX bottoms and short-term market tops in recent years -- but longer term we may be headed to a 10 VIX.

    A 10 VIX doesn't seem 'logical' given the economic slowdown and uncertainty in the world, but if you think about things like Arab Spring and how well the market has shaken off events of recent years, it certainly is within reach.

    One other rule of thumb about the VIX that I like is to consider is as the 12 month projection of potential gain/loss in the SPX ... so a VIX of 10 to 20 makes sense inherently in general to me, as the US market could go up or down 10% to 20% within reason most times, net over the next 12 months. A VIX of 40 is more like that of an emerging market with higher volatility/risk, not usually the case of a developed mature economy/market like the US.
    Sep 9 11:23 PM | 2 Likes Like |Link to Comment
  • A Developing Special Situation in SIRI [View article]
    2 things:

    You are all focusing on my speculation that SIRI shares could go to 0 in the future. The primary focus of this piece is that I anticipate an increase in volatility and a big move in the stock before the end of the year. The narrow trading range it's been in should be broken. Hence the straddle suggestion, where you can profit if it moves in EITHER direction.

    As to the bankruptcy, etc -- I'm not saying that this definitely will happen, but we've all certainly seen stocks go to 0 before. As you know, this doesn't mean the company is going out of business -- but at times stocks do go worthless when a company reorganizes. And companies with heavy debt, not very good profit margins, a lot of outstanding shares, and a stock price near 1.00 could certainly be considered a candidate for this.
    Sep 9 03:35 PM | 2 Likes Like |Link to Comment
  • Is The VIX 'Wall Of Worry' Preceding Another Big Market Rally, Even A Parabolic One? [View article]
    I didn't anticipate such a violent reaction to Fed/Bernanke, as this tapering news wasn't exactly unexpected in our view. Stocks may well shake this off by the end of this week (or next week). Market performance after a big down 'Fed day' looks mixed in our analysis. But I'm not a 'perma-bull' and the forecast in this article was a possibility I saw/see, but is certainly subject to change. I probably should have mentioned in this piece that the "logical" anticipation of performance going forward this Summer was a choppy consolidating market, given that we racked up such strong gains earlier in the year (my SPX target for 2013 in Jan was 1650 +/- 50 SPX points, which was already reached) and the recent choppy volatile pattern we've seen since mid-May. I've previously done recent Fibonacci and trendline support analysis on support levels if the market pulls back more than anticipated -- the 1600 SPX area is obviously a key area to watch.
    Jun 20 09:03 AM | 1 Like Like |Link to Comment
  • Weekly Market Outlook - Bullish Friday Amid Weak Economic Numbers [View article]
    (I work with Price): side note - Although SA prefers fundamental talk over technical analysis/charting, I would also point out that SPX 1360 & 1361 are key Fibonacci retracement levels I've been watching on both a Daily chart of the December 2011 lows to April 2012 and also on a long-term Weekly chart of the 2007 highs to 2009 panic market low. Definitely an important level to keep an eye on if the SPX approaches it again this year.
    Jun 18 09:04 AM | 1 Like Like |Link to Comment
  • A Closer Look at Selling Option Premiums Ahead of Expiration [View article]
    Folks, I tend to agree with you that risking 0.92 to make 0.08 isn't enough profit sometimes. It was just a theoretical example for this article. That's why I said in the piece:

    "That return is a bit lower than I usually prefer for my front-month credit spreads (i prefer 15% to 60% max potential gains), but since 125 is such a key technical/psychological level, let’s just use this as a theoretical example."

    On the other hand if you could make 8.7% return on risk every 1.5 weeks, you would be well ahead of the markets every year.
    Jan 14 09:22 AM | 1 Like Like |Link to Comment
  • A Forgotten Tech Name Is Breaking Out [View article]
    ive edited the first few paragraphs in the "instablog" section to take out the incorrect info ... can't edit this version here.
    Mar 12 11:57 AM | 1 Like Like |Link to Comment
  • A Forgotten Tech Name Is Breaking Out [View article]
    *Red-Faced* Looking back, I did make an error ... SY came up on one of my price performance screens, and in doing some research I got it confused a bit with STEC, which I was also looking into (and I haven't traded either at this point or given recommendations on either). But the "quiet" breakout its experienced on various charts was the point of the article, really. Price action in the stock is what we focus on, looking for 2 day to 3 month moves, not 2 year projections.
    Mar 12 11:50 AM | 1 Like Like |Link to Comment
  • A Forgotten Tech Name Is Breaking Out [View article]
    Sorry, you are correct ... I had trouble defining it in a pithy way. I certainly don't claim to be an expert in enterprise and mobile software solutions for information management, development, and integration worldwide. I do look at fundamentals and read up a bit (there were 2 articles cited, but one was SA and the link was removed), but I prefer Jesse Livermore, "the tape tells the tale". Which is why there are 3 charts on there, and no projected future revenue/earnings graphs.
    Mar 12 11:33 AM | 1 Like Like |Link to Comment
  • Crude Oil to $150, Then Major Correction? [View article]
    hmmm... how was this call ... Crude topped at $147, now $40
    Mar 16 08:24 PM | 1 Like Like |Link to Comment
  • If You Think Oil Has Peaked, Buy Airline Stocks or FedEx [View article]
    Airlines didn't make good profits when Oil was $40, think I'll pass on 'em.
    May 30 09:17 AM | 1 Like Like |Link to Comment
  • Bandwagon Effects in the Stock Market [View article]
    "What this suggests is that, once a bandwagon starts during the day, it tends to persist into the close. Fading one-sided days, particularly of late, has not been a fruitful endeavor for traders. Expecting bandwagons to persist into the next day's trade, however, has also not been profitable."

    -- good info and research for day traders of the indexes
    Apr 18 03:47 PM | 1 Like Like |Link to Comment
  • Ten Things You Can Worry About [View article]
    "1) The real worry here is that the investment banks don’t have good enough risk controls for each other. "

    Pretty much agreed

    -- although investment companies of all sorts have all kinds of risk controls on paper -- in reality when a division/department/tr... is making big profits, they can pretty much do what they want to some degree -- which leads to Rogue Trader type situations as well as giving out idiotic Interest-Only mortgages to everyone and his brother
    Apr 17 02:26 PM | 1 Like Like |Link to Comment
  • The Dow Theory Letters' Richard Russell on Stock Values [View article]
    I personally think the great 1980 -1990s bull market in U.S. stocks ended in 2001ish. We began a new bull market for many commodities and futures around that time, similar to the 1970s. If you look at the NASDAQ chart from 1980 to present vs the NIKKEI chart, we appear to be in the midst of a long-term sideways trading range for that index, and we will likely not reach the 2001 highs any time soon, just as the NIKKEI has not approached its 1989 highs.

    The great financial boom of baby boomers funding 401ks, buying 2nd homes, etc, is slowing down, demographics are not on our side. I think the U.S. is heading towards being similar to Europe ... somewhat old, stodgy, bureaucratic, but still wealthy. China clearly has demographics on its side. The main factors that may change the big picture equation in the future are the continuing immigrantization/Hispa... of America (which I view as positive for our economic growth), and if the world can somehow reduce its dependence on oil.
    Apr 15 12:57 PM | 1 Like Like |Link to Comment
  • Twitter IPO: Comparisons & Analysis From A Trading Perspective [View article]
    Edit -- looks like TWTR will open around $45 ... watch round numbers like $40, $35, $30 on the downside if it pulls back in the coming days/weeks
    Nov 7 10:22 AM | Likes Like |Link to Comment
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