RiskReturnOptimizer

Earnings to Watch This Week

Earnings are beating estimates, but revenues are below. Look for market pullback starting Tuesday - Wedn ... SPY looks toppy at 960 intra-day high of June ... solar eclipse is causing many technicals to view SPY 960 as double-top, with pull back into the mid-800s.

SPY earnings for 2009 likely to come in around $55 (operating basis) ... 15x PE gets to SPY $825 as fair value ... this is consistent with midpoint of trading range of 670-960.

With plenty of money on sidelines waiting to get re-invested, expect pull back to 850-870 level to provide very strong support ... perhaps 0.318 retracement is all we need to resume next leg up.

30 Option Strategies: The New Dow Edition

Feel like a lot of trading commission for your broker. How about just covered calls on DIA or SPY, or one of the sector ETFs? I know volatility is less on aggregage level vs. individual stocks, but the the bid-spread range for the stocks and the options, and the commission round trip on both stocks and options, it feels like a lot of trading costs and potential for trading mistakes (timing).

Ten Winners For the New Consumer - Barron's

A typical individual investor can't really benefit from this type of information, unless they have the know-how (and maybe some luck) to pick 1-2 from the list of ten.

If they buy all ten stocks, then the basket will likely track the sector ETF for Consumer Discretionary (XLY) pretty closely, as one bad story can pull down the results of the other nine.

Personally, a covered call strategy with XLY (perhaps selling LEAP calls at 10%-15% out of money strike) could beat this basket in total return, as you capture significant portion of the total return from call premiums.

Fast Money Recap - The Real Stress Test (5/26/09)

Time to Increase Long Position in TBT.

10-year yield refused to go back to 3.50%. Too much money coming out of long dated treasuries into short duration ones.

Next stop for 10-year yield is 4.00%.

Not my preferred way of trading, but this time it will be hard to catch a pullback, as yields are increasing by 10 basis points per day.

Nasdaq 100 Stocks Up An Average of 20% YTD

QQQQ rally is gaining momentum. Technology will continue to lead the market up. Once the biotechs (notice that they were among the biggest underperformers) regain some strength, it's not unlikely to see another 10%-20% move up in QQQQ by the end of the year, bringing it to $40.

This may sound like a big move and irrational for the bears, but keep in mind that this thing used to trade $100 in the good old days of 2000 (so it would still be DOWN 60% from the peak, not too different from path followed by other "generational bubbles" -- Nikkei 1990, DJIA 1929, etc).