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  • Chesapeake Energy: Too Cheap To Ignore  [View article]
    Just because you are a legendary investor, Carl Icahn, doesn't mean you can't get your head handed to you just like anyone else. Highly levered energy companies are in trouble and I see no way this company survives as a going concern without wiping out the shareholders. The stock is trading at $1.96, which tells me that bankruptcy is a lot closer than the company can admit.
    Feb 9, 2016. 12:44 PM | 7 Likes Like |Link to Comment
  • It's Time To Get Short Volatility  [View article]
    Normally I would agree with going short vol, but in this environment, I think that's suicide. Looking at seasonality's, a market that's looking like it's putting in a short term topping pattern, market internals, etc., your best bet is owning vol in the near term.
    Sep 29, 2014. 08:32 AM | 1 Like Like |Link to Comment
  • Having digested more bad news and 4 days away from an FQ2 report expected to show an 18% Y/Y EPS drop, "investors are suspicious about the ‘E’" in Apple's (AAPL) P/E, notes fund manager Lawrence Creatura. But for now, Apple (AAPL) trades at just 5.6x FY13 EPS after backing out cash. Or as BI puts it, Apple needs only 6 years to produce enough cash to match its enterprise value, if it was simply produced at FY12's rate. The FQ2 report could include light guidance for an FQ3 that's about to see Samsung's Galaxy S IV go on sale, and could see iPhone/iPad buyers delay purchases ahead of refreshes. Is that enough to justify a valuation lower than Dell's?  [View news story]
    That exactly the point. People seem to think that this company can grow forever at a rate similar to what it's doing now. I highly doubt it. Technology is littered with companies, that at their peak, could do no wrong when the opposite is true. I think AAPL goes a lot lower, as in $300 - $320 before the end of the year.

    Whether it goes up or down, I can care less, as long as I am on the right side of the trade. I've never seen a stock that commands such emotional arguments. As a trader, you've got to be flexible, and not rigid. I made more money trading AAPL from the long side last year than any other ticker symbol. Since the iPhone 5 launch, I don't think I've been more negative on any other stock in the market.
    Apr 20, 2013. 10:01 PM | 2 Likes Like |Link to Comment
  • It's not enough nearly every prominent bear has decamped to the bullish ranks, but so-called "black swan" funds - set up to profit from market panics - have fallen out of favor. "If the world's central banks have decided they are going to do whatever to support the economy, then you are not going to have crazy volatility," says Nicolas Rousselet in the kind of quote the speaker will likely regret saying at some point.  [View news story]
    Here's the thing. In this market, you have to play the odds. When all of the most bearish guys, after years of being wrong, turn around and join the bullish camp strictly because of central bank money printing, I assure you that there will be exponentially more money to be made on the short side than the long side of the market. I'll never forget hearing someone back in 2007 say that because home prices have historically never gone down year over year, they will never go down. It's exactly the same thing today. Mark my words, the second the perception about central banks being able to save the world changes, you will not be able to exit the market fast enough when the crash occurs.
    Apr 5, 2013. 09:23 AM | 7 Likes Like |Link to Comment
  • Google's Q3 Earning Report - What You Need To Know  [View article]
    By looking at the weekly options on GOOG, this stock is not reporting earnings next week. If it were, the 800 calls would be closer to $10, not $1, with an implied volatility much higher than 20.
    Oct 4, 2012. 07:31 PM | Likes Like |Link to Comment
  • Boston Fed chief Rosengren pops onto CNBC to repeat his call for a new large-scale, open-ended QE program (he earlier told the WSJ the same). Again, Rosengren isn't a FOMC voter and his dovish views are to be expected, but he sits in camp with powerful members like Yellen and Dudley.  [View news story]
    These Fed guys are dangerous people. They use models that have no basis in the real world, give forecasts that never turn out to be right, yet they base their decisions on these same models and forecasts. Someone needs to explain to me why doing additional QE would have any impact on the economy when the problems facing the country are structural in nature and can't be fixing by pushing record low interest rates even lower or by trying to manipulate the stock market higher. They may succeed at pushing the market a little higher, but I have a feeling that this isn't going to end well.
    Aug 7, 2012. 02:36 PM | 4 Likes Like |Link to Comment
  • QE3: Will The Fed Buy Stocks?  [View article]
    I tell you, this is really getting ridiculous. The Fed needs to step back and let the chips fall where they may. All of this talk about Fed intervention is exactly why the average retail investor is pulling money out of the market. It's a market operating in an alternate universe called bizarro world. When the only hope of long only investors is the Fed, we have a serious problem. Think about it, people need the Fed to keep the Ponzi going. Mark my words, within the next few weeks, people will realize that the strike price for that central bank "put" that they've all been relying on, is a lot lower than where the market is currently trading. Sadly, by the time we get to that point, it'll be to late.
    Jun 5, 2012. 01:03 PM | 4 Likes Like |Link to Comment
  • Advanced VXX Iron Condor Trade Alert  [View article]
    Shorting vol via VXX or VIX in this market is a strategy that I liken to picking up nickels in front of a steam roller. With macro signals flashing red, you don't want to be short VXX at this point. Anyone who has traded VXX knows that it is prone to massive spikes which will cause a trade like this to be a risk of a loss 4 times your max potential profit. Everyone has their own style but anyone who is not a serious option or volatility trader should stay away from this trade.
    May 27, 2012. 12:28 AM | 1 Like Like |Link to Comment
  • Massive Option Trade On SPY An Eye Opener  [View article]
    This type of trade looks like a trade that one puts on if they expect the market to trade down to where credit indicates fair value for the SPY to be. Based on IG and HY credit, the SPY should be around 95. The market just needs a catalyst to take it down to those levels. Big banks stuffed to the gills with synthetics where they're the only player and can't unwind the trade and Europe about to implode could do the trick. We'll see...
    May 17, 2012. 08:19 PM | Likes Like |Link to Comment
  • Don't Buy GSV Capital Into Facebook Hype  [View article]
    Great points. The easy thing to do is to have emotional feelings as to why this fund will go higher and the hard thing to do is your homework and understand why that may not be the case. Well done. I only played this through a very small - if it expires out of the money no big deal - option position and as of right now, it's not looking too good. Time to short some financials...
    May 11, 2012. 09:12 AM | Likes Like |Link to Comment
  • When Earnings Trades Using Options Make Little Sense  [View article]
    Talk about leaving a ton of money on the table with that spread. I thought it would be down 10, not 24...
    May 4, 2012. 08:29 AM | Likes Like |Link to Comment
  • When Earnings Trades Using Options Make Little Sense  [View article]
    Meant to say implied move of 17% on GMCR going into earnings. Although I think the stock is going to get crushed, I played both sides of this one. 55/60 call spread as a hedge and a 39/44 put spread, different sizes so not a true iron condor...
    May 2, 2012. 03:56 PM | Likes Like |Link to Comment
  • When Earnings Trades Using Options Make Little Sense  [View article]
    This stock is going to get crushed. Look at PEET. Implied move of 17% up or down. Use a put spread.
    May 2, 2012. 03:19 PM | Likes Like |Link to Comment
  • How I Played Apple's 'Pullback'  [View article]
    AAPL closed above $600 and it added a couple of bucks after hours. The key is the price/volume action tomorrow. The stock looks like it's ready to trade to $625 then $650. If it closes below $600, it has a lot of air under it, so be careful. I'm using options to trade this stock so either way, I'm looking to capitalize on the next $50 dollar move. My guess is higher. We'll see soon enough...
    Mar 19, 2012. 05:45 PM | Likes Like |Link to Comment
  • How I Played Apple's 'Pullback'  [View article]
    I agree. Now we have the news of a dividend, which opens up the stock to an even bigger investing universe. At times, we become so indoctrinated with the negatives that we completely miss opportunities staring us right in the face. I'm speaking from experience. The stock has to close above $600. I believe if it does, we could see $650 before weeks end. If Facebook could have a $100 billion dollar valuation, then AAPL could trade north of $800 billion...
    Mar 19, 2012. 08:32 AM | 1 Like Like |Link to Comment