Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14
Sheffield Roma Crisis School Place Application's Fraud Perfect Storm - 17th Oct 14
Stock Markets, Commodities and Indicators - 17th Oct 14
“Save Our Swiss Gold ” - Game Changer For Gold? - 17th Oct 14
How to Trade the Ebola Stock Market Sell-Off - 17th Oct 14
When... Not if... Crude Oil Price Drops Below $70 - 17th Oct 14
Either You're The Butcher or You're The Cattle - 17th Oct 14
Gold Benefits from Market Uncertainty - 17th Oct 14
Stock Market Pullback Underway, Euro downside, Commodities - 17th Oct 14
Stock Market Seven Year Cycle and A Correction Ahead? - 17th Oct 14
Three Ways to Play Uranium: Top Stock Picks - 17th Oct 14
America Flirts With Deflation - 17th Oct 14
Why the Fed Should Consider Delaying the End of QE - 16th Oct 14
Gold Prices Since 9-11 - 16th Oct 14
The Inflation Imputation, Dear Saver, May You RIP - 16th Oct 14
Flight To Safety - Gold Rises As Stocks, European Bonds Sink - 16th Oct 14
The March Of History And The End Of Nations - 16th Oct 14
Stocks Bear Markets Move Fast and Are Intensely Emotional - 16th Oct 14
Stocks Got Their Piece – Now It’s Our Turn - 16th Oct 14
Why This Stock Market Selloff Is the Next "Buy the Dip" Opportunity in Stocks - 15th Oct 14
Possible Stock Market Runing Correction - 15th Oct 14
Get Your Tactics Ready for the Ebola Stock Market Event - 15th Oct 14
Secret Scheme To Manipulate Silver Price - Lawsuits Against Banks Proceed - 15th Oct 14
Stocks Bull Market Over? Trend Forecast to End Jan 2015 - Video - 15th Oct 14
Stock Market Dow The Contrarian Play - 15th Oct 14
The Ukraine, As We Know It, Is Gone Forever - 15th Oct 14
We Can Police the Dark Web / Bitcoin - 15th Oct 14
The Safest Stocks in the World - 14th Oct 14
Building an Ark: How to Protect Public Revenues From the Next Financial Meltdown - 14th Oct 14
9 Ways to Retire Rich - 14th Oct 14
Silver, Warfare and Welfare - 14th Oct 14
Swiss Gold Referendum “Propaganda War” Begins - 14th Oct 14
What Happened To The Fourth Estate? - 14th Oct 14
How To Blow Up OPEC In 3 Easy Steps - 14th Oct 14
Investment Myth - Wars are bullish/bearish for Stocks - 14th Oct 14
Powerful Reversal and Shakeout in the Junior Gold Mining Stocks at May Lows Around $33 - 13th Oct 14
When The Economy Went Ponzi - 13th Oct 14
Stock Markets Get Ugly – and May Be Getting Uglier - 13th Oct 14
Cycle Failures Point to a Stock Market Correction - 13th Oct 14
Bill Ackman: I'm not a Crybaby Shareholder - 13th Oct 14
U.S. and World Stock Markets Chartology - 13th Oct 14
Stock Market Intermediate Downtrend Confirmed - 13th Oct 14
Gold and Silver Price To Rally Or Not To Rally - 13th Oct 14
Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - 12th Oct 14
Has Obama Changed His Mind About Syria? - 12th Oct 14
New Zero Bound Only Game In Town - 12th Oct 14
The 5–Year U.S. Treasury Bond is Emblematic of Careless Risk Taking in Bond Markets - 12th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Friday Fake Stock Market Rally – Wnat Are People So Happy About?

Stock-Markets / Stock Markets 2014 Mar 28, 2014 - 03:30 PM GMT

By: PhilStockWorld

Stock-Markets

As I walk on through this wicked world,
Searching for light in the darkness of insanity,
I ask myself, Is all hope lost?
Is there only pain, and hatred, and misery? – Elvis and Lowe

Once again the Futures are up in the morning and once again we have to wonder why?


Now, don't get me wrong, we love a fake rally as much as the next guy, especially when it gives us great shorting opportunities. Yesterday, even as I noted in the morning post that our Wednesday morning Futures shorts made $6,050 in 24 hours for Members who followed those trade ideas, our new suggested shorting lines of Dow (/YM) 16,200, S&P (/ES) 1,845 and Russell (/TF) 1,150 all came in and, before lunch, we hit 16,150 on the Dow for a $250 winner, 1,835 on the S&P for a $500 gain and 1,141 on the Russel for a $900 win.

So PLEASE Mr. Market – feel free to run us up again! Actually, this morning I sent out an Alert to our Members identifying the Nikkei (/NKD) as the best shorting opportunity of the day, week and probably the month of April as well. Testing 14,795 this morning, we're short below 14,800, which is the level I predicted we'd run to at 9:50 am on Wednesday in our Member Chat Room, saying:

Submitted on 2014/03/26 at 9:50 am

Nikkei/Eric – They are happy the Dollar is back up (80.27) and that means not a good short at the moment. Over 14,500 has very little resistance up to 14,800 so not a good spot to short and maybe a good long, actually, but my heart isn't in longs at the moment.

The long play was good for $1,500 per contract but, as I said, I wasn't into it. The short play, from 14,800, I'm very excited about for reasons I have outlined in previous posts and that we went over extensively in this morning's Alert to our Members, so I won't get back into it here. Once the market opens, we'll look for a nice short on EWJ ($11.21) as well.

Do you want to know something really funny? I was also detailing in yesterday's morning post how we were focusing on TZA as a great market hedge and I laid out all 5 of our bearish positions and, with the Russell making the usual fake move up in the morning, any one of them were very easy to enter in the morning. The aggressive TZA spread from our Short-Term Portfolio was up net $4,510 at the time and those same positions finished the day up net $6,100 – another 35% gained in a single day on just a 0.35% drop in the Russell.

It's right there in the morning post folks – those are just the free samples!

This is the main lesson we are teaching our Members this year, with our balanced Short and Long-Term Portfolios. The highly leveraged gains in the $100,000 Short-Term Portfolio protect our $500,000 Long-Term Portfolio and allows us to maintain our Long-Term positions so we can BE THE HOUSE and just keep playing while the premium of the puts and calls we sell erodes for the people we sold them to.

Even though it was a small pullback, on the whole, it was good enough for us to take profits on 4 position in our Short-Term Portfolio (see our afternoon Alert to Members). As the quarter doesn't end until Monday, we don't expect a big sell-off until Tuesday the earliest. Until then, there are tens of Billions at stake in keeping the markets looking pretty so that all those investment brochures with Q1 performance charts will have convincing reasons for Banksters to tell you why you should put more money into the market (through them, of course).

After all, why is NFLX trading at $360 this morning when AMZN just announced they will provide a similar service FOR FREE – not just to their prime customers, but to anyone (ad supported). If you think people won't want to watch TV shows with ads instead of subscribing to NFLX, I'll remind you that 80% of the US population still doesn't subscribe to NFLX. Earnings are after April options expiration so the May $300 puts at $7.50 should hold their value fairly well, even if NFLX doesn't fall on this news. If they go back over $365, the premise is blown and we can take a small loss – that's how you make a news trade!

TSLA had news too, with Aswath Damodaran agreeing with my proper valuation of $115 for essentially the same reasons I have. Also yesterday, we got word the Panasonic is not actually all that interested in partnering on the Giga Factory, which makes you wonder about TSLA's liability as it was one of the reasons they used to raise $2Bn from suckers just one month ago. Here's the spin as TSLA was our raising cash with crooks like MS, who gave them a $320 price target while they underwrote the bonds for fat fees (as well as owning $1Bn worth of the stock themselves):

Tesla said it will commit $2 billion of its own money to build the Gigafactory and will raise $1.6 billion from investors and the rest from partners. It didn't name its partners in the project, but Panasonic is widely believed to be one of them.

"Panasonic has built a collaborative relationship with Tesla Motors, and are looking at options for strengthening that relationship," a Panasonic spokesman said Wednesday by email. "At this stage, nothing is decided."

Tesla and Panasonic, based in Osaka, Japan, have a strong partnership. Panasonic invested $30 million in Tesla in 2010, and the two companies in 2011 finalized an agreement for Panasonic to provide Tesla with roughly 640 million automotive grade lithium-ion battery cells, or enough to build more than 80,000 vehicles, over the next four years. In October, the scale of that agreement was nearly tripled to 1.8 billion cells.

So they don't ACTUALLY lie, it's just VERY MISLEADING to investors. Unlike SOME analysts, I will disclose that, on 2/25, when MS came out with their idiotic call and TSLA ran up to $248, my lunchtime trade idea for our Members was:

SLA/MrM – And they seem to have messed with the margins (for good reason, at 20% in a day!), so a massive squeeze in progress. April $265/230 bear put spreads are $16.20 and almost all in the money with a potential $18.80 in upside at $230 and you can set a stop on those at $10.20 rather than continue to ride out the madness and that way you limit your margin and your downside and you still make as much as you'd make on a pullback to $235.

As of yesterday's close, the spread is $23 in the money at $207 and netting $31.35 so we're done with it (why risk a 100% just to make $3.65 more?). I devoted much of the next day's post to why we were short on TSLA and the other MoMos at the prices they hit that week, so you can review our logic there but what you really might want to review (if you are too cheap to become a Member and see our new trade ideas live in our daily Chat Room) is 2/21's "5 New Trade Ideas that Can Make 500% if the Market Falls." One of those Trade Ideas was:

We can sell 1 AAPL 2016 $450 put for $42.50 ($4,250) and buy SQQQ 15 June $50/59 bull call spreads at $3 ($4,500) and that's a net of $250 in cash out of pocket for $13,500 (5,300% on cash) worth of protection and our worst case is owning 100 shares of AAPL for net $452.50 ($45,250).

The AAPL $450 puts have dropped to $37.40 ($3,740) while the SQQQ spread is now $3.50 ($5,250) for net $1,510, up at our primary 504% target already but still with ANOTHER $11,990 left to gain if you want to use that old trade. If you want a new Trade Idea with better leverage – I'll see you in Member Chat!

Have a great weekend,

- Phil

Click here for a free trial to Stock World Weekly.

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2014 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PhilStockWorld Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014