would like to thank the Academy
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Hmmmm, I really think Chicago PMI is going to MISS, and be under 50. Will go with SPY puts when market opens. My guess is we will move up a bit right at the open, and I will look to snag some weekly 149 puts.
Roger Stuff. Hope all is well. See ya soon.
Always nice to be ahead, even if just a little bit!
How is everything in the mouth? Teeth and gums all good now? Did you try my scotch idea for the pain?
The short position is HUGE, over 30%. SHOULD some nice catalyst hit and people decide to jump in and buy, the shorts could get nastily squeezed. Something like MSFT rumoring to BUY them would cause a huge upward move.
Or, of course, it could just die a slow horrible death.
Yep, got a big chunk of TZA $12 Calls for Feb at .17 Really think the small caps are gonna bite the bullet harder than the big caps. The thinking is that people are selling small caps to put money into the big caps.
Good morning Larry. You in? Picked up a NICE chunk of calls yesterday morning. Would love to see us get to about $12 by Friday.
Also eyeing FAZ, as the banking sector looks like it is ready for a rest.
Hoping TZA does well today, would like my CALLS to pop.
Thinking about fading the SPY when we open. May even throw a few clams at FAZ.
CBOE Morning Update
bymkearney on ?01-31-201307:36 AM
Facebook com (FB) is down $1.64 to $29.55 in the premarket after reporting Q4 profits declined 79%. February call option implied volatility is at 60, March is at 52; compared to its 26-week average of 55.
Qualcomm (QCOM) is up $4.00 to $67.53 in the premarket after the chip maker reported Q1 profit increased 36%. February weekly call option implied volatility is at 59, February is at 30, March is at 26, April is at 24; compared to its 26-week average of 27.
Whirlpool (WHR) is up $1.58 to $110.30 in the premarket on the company seeing FY13 adjusted EPS $9.25-$9.75, compared to consensus $9.17. Overall option implied volatility of 38 is near its 26-week average of 36.
CBOE Volatility Index-VIX closed at 14.32, above its 10-day moving average of 13.11, and its 50-day moving average of 15.42.
SPDR S&P 500 ETF Trust (SPY) is recently down 20c to 149.87 in the premarket into the largest January rally since 1989.
Calls with increasing volume at CBOE;
SPY 3/28/2013 155 25K contracts
JPM 6/22/2013 45 16K
FB 2/1/2013 34 8K
DELL 3/16/2013 14 7K
IWM 3/16/2013 90 6K
FB 2/16/2013 33 6K
QQQ 2/1/2013 68 5K
December Income up 2.6%, Spending up 0.2%. Initial Jobless Claims rise 30k to 368k.
Looks like Puts the way to go with RIMM. Will probably be sub $10 by next week.
YHOO back under $20, hope it heads LOWER.
LOL, yep, you are right, so I will behave starting NOW! Don't want to get slapped by Stuffie's wooden spoon while she is making that famous Potato Soup.
Good morning EZ. Hope the weather is a bit better your way today.
Yes, my wife DOES deserve me, so she had better take good care of me when I get home, lol.
It is going to be fun calling you Buns.
I guess the reason the market is not dropping like a rock on that crappy ass jobless claims number is because it means higher unemployment, which in turn means MORE of that stimulus the market loves so much. Chicago CPI coming out right after market open, will maybe go light with some SPY puts.
Looks like every damn ANALyst out there downgraded RIMM. Even my mother called me and said 'RIMM blows' Why those Calls were LOTTOS. Still holding on, just in case Alicia Keys pulls a miracle.
Buns, probably my first item on the agenda beofre coffee and donuts will be BEER! (And my wife, of course. I told here I miss STEAK, BEER, and HER. Didn't tell her what the order was )
Ah, nothing like the Middle East to make things interesting.
*sigh* Usual night meeting, a run, and then dinner. See ya later!
Damn it! I hurt their bottom line being out here! SORRY DUNKIN! Your revs will increase when I get home.
$WHR beat EPS, mis rev, big FY13 raise 9.25 - 9.75eps expectations 9.17
European stocks down, Asian stocks down, even India is down lately. COULD (Note the word COULD) be the start of a small downtrend. It is getting ugly out there.
German retail sales were down earlier today. I wonder if they are going to blame Hurricane Sandy for that as well. Still can't believe they are using that as an excuse for the GDP miss. At least they stopped blaming George Bush.
On a good note, the German unemployment situation got a LITTLE better.
Soon, we see how the unemployment is here.
Stocks to Watch: Facebook, Qualcomm, MasterCard http://t.co/AZehAx3w
Have Stock Market Bears Gone Extinct Because Of QE?
Posted By James Bianco On January 31, 2013 @ 5:30 am In Federal Reserve,Psychology/Sentiment | No Comments
Hussman Funds – John P. Hussman, Ph.D.: Capitulation Everywhere [1]
The bears are gone, extinct, vanished. Among the ones remaining, many are people whom even I would consider to be either permabears or nut-cases. And yet, the historical evidence for major defensiveness has rarely been stronger. The newest iteration of the bullish case is the idea of a “great rotation” from bonds and cash to stocks, as if the outstanding quantity of each is not held by someone at every point in time. The head of a “too big to fail” investment firm argued last week that stocks are “underowned” – as if every share of stock presently in existence is not actually owned by someone. To assert that stocks can be “underowned” seems to reflect either a misunderstanding of how markets work, or a desire to distribute overvalued institutional holdings onto the unwashed muppets. Likewise, the idea of a “rotation” out of bonds and into stocks begs the question of who will buy the bonds and sell the stocks, as someone must be on the other side of that trade. Similarly, to “move cash into the market” requires a seller of stock who becomes the new holder of said cash.
Comment
Yesterday [2] we noted that The New York Times, USA Today and The Wall Street Journal all had lead stories about the stock market, every one of which was very bullish.
Regarding Hussman’s claim that bears are gone, see the first chart below. It shows the tightest range of bearish newsletter writers in the last 50 years! We have argued this shows a core of newsletter writers (about 20% to 25%) who will never change their opinion from the dark side.
So, when the market rallies or declines, the other 75% of writers (second chart below) vacillate between bullishness and looking for a correction. Prior to a year ago it was the correction camp (blue line, second chart) that never moved and the bulls and bears moved as mirror images of each other. Now the bears are in an unusually narrow range while the vast majority of newsletter writers are bullish or bullish but looking for a correction first.
We believe this is the result of the belief that the Federal Reserve will not allow bear markets [3]. Print enough money and Wall Street gets it. Prices are not allowed to go down.
So it appears the only bears for the time being are the permabears that will never change their opinion. This has been the case for almost a year. You can thank the Federal Reserve for this situation.
CNBC – Dow 20,000 May Be ’4 Years Away:’ JPMorgan [6]
The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) could peak as high as 20,000 four years from now, JPMorgan Chief U.S. Equity Strategist Thomas Lee told CNBC on Monday. He predicted “2,400 [or] 2,500? as the top for the S&P 500 Index in a similar time frame. Making his bullish case, Lee pointed out in a “Squawk Box” interview that the market has been able to reach multi-year highs, despite investor reluctance to be over-weight equities. On Friday, the S&P closed above 1,500 for the first time since Dec. 10, 2007. The Dow finished at its highest level since Oct. 31, 2007.
Source: Bianco Research [7]
--------------------------------------------------------------------------------
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2013/01/have-stock-market-bears-gone-extinct-because-of-qe/
URLs in this post:
[1] John P. Hussman, Ph.D.: Capitulation Everywhere: http://www.hussman.net/wmc/wmc130128.htm
[2] Yesterday: http://www.arborresearch.com/bianco/?p=72427
[3] Federal Reserve will not allow bear markets: http://www.arborresearch.com/bianco/?p=72147
[4] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/01/bianco-111111.jpg
[5] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/01/bianco-222.jpg
[6] Dow 20,000 May Be ’4 Years Away:’ JPMorgan: http://finance.yahoo.com/news/dow-20-000-may-4-181204813.html;_ylt=AueBkKWutAobRsX6LLgEWmaiuYdG;_ylu=X3oDMTQ4cGg5dmtkBG1pdANDTkJDIFRvcCBTdG9yaWVzBHBrZwNlYWUwOTUyNS1hM2ZlLTMwNjAtYjA2MC01NjlmNjYzNGU3NWQEcG9zAzMEc2VjA01lZGlhQkxpc3RNaXhlZExQQ0FUZW1wBHZlcgNjMj
[7] Bianco Research: http://www.arborresearch.com/bianco/?p=72485
Futures slightly green, but no major swings overnight. Think we get an OK jobs report, that should have a downward effect on the market. 1 day is not enough to call a trend yet, but yesterdays action was NOT the recent norm. European market also down, the fundamentals MAY be catching up with the hopium.
Stocks: Focus on jobs after growth shock
By CNNMoney Staff @CNNMoneyInvest
Investors will be looking for positive economic data on Thursday to rebound from disheartening news on growth.
U.S. stock futures were narrowly weaker.
The U.S. government will release its weekly data on initial jobless claims before the opening bell, as well as data on personal income and spending for December.
In corporate news, firms including UPS (UPS, Fortune 500) and Dow Chemical (DOW, Fortune 500) will report their quarterly results in the morning.
Fear & Greed Index
U.S. stocks finished lower Wednesday after the Federal Reserve said economic growth had paused. The Fed announcement came after a government report released earlier in the day showed the U.S. economy contracted during the fourth quarter of 2012.
Analysts expressed surprise at the fourth-quarter GDP data, but said it was likely an exaggeration of the economy's weakness.
Facebook (FB) shares slipped 4% in after-hours trading Wednesday after the firm said its fourth-quarter mobile user growth had slowed slightly versus the third quarter. Facebook's fourth-quarter earnings and sales beat Wall Street estimates.
European markets were lower in morning trading as weak corporate earnings weighed on sentiment. Results from oil major Shell and drinks group Diageo (DEO) missed expectations, while Deutsche Bank (DB) posted a $3.5 billion quarterly loss on legal and restructuring charges. Telecoms equipment maker Ericsson bucked the trend, posting strong gains after beating expectations.
Asian markets ended mixed, with the Hang Seng slipping 0.4%.
Mmmmmm...I have not had a donut in a LONG time. I miss a delicious, fresh, Dunkin Donut with a Turbo Coffee.
What's behind the bull market
By Ben Rooney @CNNMoneyInvestJanuary 31, 2013: 5:04 AM ET
NEW YORK (CNNMoney)
U.S. stocks are flirting with all-time highs, climbing to levels not seen since before the financial crisis.
The Dow Jones industrial average is hovering just below 14,000. The S&P 500 recently broke above 1,500 and is inching closer to a new record. Both indexes have risen to their highest levels since October 2007.
But stock prices cannot go up forever, and some analysts warn that the bull market is nearing an end, just as many individual investors are returning to the market.
"The market environment is likely to get tougher in February and March as investors wrestle with the impact of fiscal tightening on the economy," said Russ Koesterich, BlackRock's global chief investment strategist.
What's behind the rally
There are a number of factors at play, including signs of improvement in Europe and sustained growth in China. But analysts say the Federal Reserve's stimulus moves have been the main driver.
The current bull market dates back to March 2009, but the rally really gained momentum after the Fed launched its second round of quantitative easing, or QE2, in 2010.
The bond-buying strategy, now in its third iteration, has coincided with a broad improvement in economic data and record profits for U.S. corporations.
But the rally is as much about what did not happen as what did.
The U.S. economy did not fall off the fiscal cliff, and lawmakers have delayed a showdown over the debt ceiling until mid-May.
The eurozone did not collapse under the weight of its crushing debt, thanks largely to aggressive moves by the European Central Bank.
And the Chinese economy appears headed for a soft landing, easing worries about demand in the world's second largest economy.
"Together, these things basically assured a risk-on rally," said Quincy Krosby, market strategist with Prudential Financial.
Related: Buy, sell or hold? What do with some of the hottest and coldest stocks
Investors were also drawn back into the market by attractive valuations, which is a fancy way of saying stocks are cheap.
Since the market bottomed in 2009, many large investors have been scooping up shares of companies that were beaten down in 2008. Many bank stocks, for example, were trading well below book value, which is the theoretical price their assets are worth minus their liabilities.
Bank of America (BAC, Fortune 500) more than doubled in price last year as investors flocked to shares of companies in the financial services sector. JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) also bounced back.
Is now the time for investors to jump in?
The good news is that stocks still seem relatively attractive. The stocks in the S&P 500 are trading at roughly 14 times expected earnings for this year, which is reasonable.
But the trends that have supported stocks up until now are changing, and investors should be prepared to play defense, said Doug Cote, chief market strategist at ING Investment Management.
MORE - http://money.cnn.com/2013/01/31/investing/stocks-bull-market/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_markets+%28Markets%29
LOL, that's great!
Heading out to a meeting in a few, but will be back to post more stuff. Busy meeting day today.
By the way, you are up EARLY! Did you actually get some sleep, or are you coming on right from partying and dancing all night?
Very steady futures this morning. My guess is we wait until 0830 for the market moving Unemployment Report.
German jitters hit European shares, euro
By Marc Jones
LONDON (Reuters) - European shares fell for a second straight day and the euro slid on Thursday, as weak German retail sales and poor earnings at its biggest bank added to investors' nerves after a shock fourth quarter contraction in the U.S. economy.
Data on Wednesday showed U.S. GDP slipped back 0.1 percent, though the country's central bank, the Federal Reserve, indicated the pullback was likely to be brief as it repeated its pledge to continue providing support.
European shares, which have surged 3.7 percent this month, took their biggest daily hit of the year on Wednesday, and a plunge in German retail sales and a huge quarterly loss from Deutsche Bank dashed hopes of a quick rebound.
London's FTSE 100 (.FTSE), Paris's CAC-40 (.FCHI) and Frankfurt's DAX (.GDAXI) were all around 0.3 percent lower by 0830 GMT as trading gathered pace after shares in Asia posted modest gains. (.L)(.EU)(.N)
"Perhaps the German retail sales have contributed a little bit, but we knew that Q4 was weak, so I would it attribute it more to earnings news," said Chris Scicluna, an economist at Daiwa Capital Markets.
"The Deutsche Bank loss does look to be on the sizable side. There has clearly been some mismatch between financial markets and the real economy so that does lend itself to a bit of a pullback."
In the currency market, the German jitters also left the euro under pressure. It was well off Wednesday's 14-month high at $1.3548, though the Federal Reserves promise of continued support was expected to mitigate the fall by keeping downward pressure on the dollar. (FRX/)
The nervy market atmosphere also pushed up Spanish and Italian government bond yields as some investors switched from higher-yielding debt into German Bunds.
Spanish 10-year yields rose 10 basis points on the day to 5.31 percent, while equivalent Italian debt rose 10 bps to 4.38 percent.
German Bund futures were half a point higher, spurred on by the Fed's determination to maintain its policy of stimulus for the U.S. economy.
Spot gold hovered near its one-week high of $1,683.39 an ounce reached on Wednesday. A weak yen pushed the most active gold contract on the Tokyo Commodity Exchange to a record high of 4,944 yen a gram on Thursday. (GOL/)
(Reporting by Marc Jones; Editing by Will Waterman)
Gold Erases Gains in London as Metal Seen Subject to Selling
By Claudia Carpenter - 2013-01-31T08:27:03Z.
Gold erased gains in London on investor sales after the biggest rally in almost three weeks.
Gold jumped 0.8 percent yesterday, the most since Jan. 10, on demand for a haven because of a shrinking U.S. economy. Growth will bounce back in the current quarter, according to economists at JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley.
“Gold lacks a convincing catalyst near term to take it convincingly higher and instead remains susceptible to opportunistic selling,” said Xiao Fu, an analyst at Deutsche Bank AG, in a report dated today.
Gold for immediate delivery was down less than 0.1 percent at $1,676.04 an ounce at 8:24 a.m. in London.
Honda trims full-year profit forecast, says China sales poorer
3:38am EST
By Yoko Kubota
TOKYO (Reuters) - Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) has trimmed its annual net profit forecast by 1.3 percent to 370 billion yen ($4.1 billion) on poorer than expected car sales in China and Europe, even as it sees strong sales in the United States, its biggest market.
Japan's third-biggest automaker said its net profit for Oct-Dec was 77.4 billion yen ($849.9 million), compared with the 47.7 billion yen booked last year when it suffered from disrupted supply chains after floods hit it and its suppliers' factories in Thailand.
The third quarter result was below the average estimate of 111.4 billion yen among seven analysts polled by Thomson Reuters I/B/E/S.
"The market had expected the company to release a bright outlook on the back of a weakening yen," said Yoshihiro Okumura, an analyst at Chibagin Asset Management.
"It was negative that the company did not raise its full-year outlook. Now, investors will be watching how the carmaker will try to raise sales in the core U.S. market this year."
Honda, which relies on the U.S. for 40 percent of its global sales, maintained its North American car sales forecast for the year to March. For rivals Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) and Nissan Motor Co Ltd (7201.T: Quote, Profile, Research, Stock Buzz), the U.S. accounts for about a quarter of global auto sales.
In calendar year 2012 the U.S. auto market posted its strongest sales figures since 2007 at 14.5 million vehicles, and the momentum is likely to continue into January.
Honda cut its global car sales forecast to 4.06 million vehicles from 4.12 million, and its European car sales outlook to 185,000 vehicles from 205,000.
In China, Honda sold 604,000 vehicles in 2012, lower than the initial goal of 750,000 it set before sales started falling in September. The financial year in China ended in December.
Japanese brands in China suffered from an outbreak of anti-Japan sentiment in late 2012 after the two countries became embroiled in a diplomatic dispute over islands both claim as their own. The pace of recovery in China is slower than Honda had expected, Executive Vice President Tetsuo Iwamura said.
YEN IMPACT
In the final quarter and the next business year, Japanese carmakers will be helped by the yen's recent weakening against the dollar, as they can convert overseas profits back to the yen at a more favorable rate and export cars more cheaply.
The Japanese currency is trading around 91 to the dollar, well down from 78 at the start of the October-December quarter.
MORE - http://www.reuters.com/article/2013/01/31/us-honda-results-idUSBRE90U06O20130131?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29
Deutsche Bank posts huge fourth-quarter loss to pay for clean-up
FRANKFURT (Reuters) - Deutsche Bank's (DBK.DE) posted a fourth-quarter pretax loss of 2.6 billion euros ($3.5 billion) hit by hefty litigation and restructuring charges as the bank downsizes to a leaner investment banking environment under new leadership.
Germany's largest lender said strong operating results at its business divisions were overshadowed by a 1.9 billion euro goodwill impairment to pay for a new divisional structure and to hive off assets into a non-core unit.
The bank, which is being investigated for alleged manipulation of benchmark interest rates, also announced 1 billion euros in litigation charges in the fourth quarter, reflecting "adverse court rulings and developments in regulatory investigations."
"We embarked upon the path of deliberate but sometimes uncomfortable change in order to deliver long term, sustainable success for the bank. Simultaneously, we set the bank on course for fundamental cultural change," Co-chief executives Juergen Fitschen and Anshu Jain said.
"This journey will take years, not months," they added.
The lender is combining asset and wealth management divisions and creating a non-core division to hive off 125 billion euros worth of assets.
The corporate banking and securities division - Deutsche's main investment banking arm and traditionally its strongest performer - posted a quarterly loss before taxes of 548 million euros.
Deutsche Bank's net loss for the quarter was 2.2 billion euros.
In mid-December, it said fourth-quarter earnings will take a "significant" hit from the restructuring, which is designed to achieve annual cost savings of 4.5 billion euros by 2015.
($1 = 0.7370 euros)
(Reporting By Edward Taylor; editing by Victoria Bryan)
GDP: Digging Into The Unexpected Q4, 2012 Decline http://t.co/gOENmmRx
Slept like a baby again. Was nice to see the market had a nice drop yesterday, the direction I will be leaning. TZA looking like it will pay nice, TZA making the bigger move down (Rotation from small caps to the big caps maybe)
Meetings all damn morning, got more later this afternoon. ICK!
Well, my dreams were sweet, but my RIMM Calls looking like a nightmare, lol.
Thank goodness for those TZA calls, looking rosy, and my heavy holding. YHOO Puts also looking a little ugly, but like the RIMM Calls, small position.
Looks like the BTFD clowns are NOT as strong as they used to be, couldn't go green, and now another little push down. Still a toss up, but I am not seeing the usual conviction buyers coming in. I think fear may be creeping in, and the rising VIX may be proving that.
Unemployment numbers tomorrow. If that domino falls, we may start seeing lots more red.
OFF TO BED! Late out here, see ya all tomorrow, great trading with you again!
Holding my TZA and RIMM calls, and my YHOO Puts.
LOL, talk about bringing back memories!
Well, I did go bullish on one thing, just got 8 RIMM $18 calls for .28 each, JUST in case they pop and squeeze the shorts real nasty.
It sure is crazy!
Damn YHOO is going the WRONG way for me. Hope it heads back down before the day is done.