Don't ask what prompted me to revisit this. (Again.) I didn't see a lot that intrigued me to be honest. A bull put spread on YUM at 62.50-60 seems like a relatively safe play using the 200DMA (62.54) as support and taking advantage of the IV.(Edit: Either Yahoo was wrong (probable) or YUM post-poned until 7/18, so scratch that idea. Plus, YUM busted through the 200DMA already!) Buuuut... I've been absent for a while so take that with a grain of salt. WFC/JPM on Friday. My hunch is that JPM will pull a rabbit out of the hat and wow everyone in light of the ongoing London whale loss story.
OK... so not entirely without comment. Just without anything substantive. I was tinkering around with my spreadsheet to get it working again and figured I'd post the upcoming week's earnings calendar just like in the old days.
In case you hadn't noticed lately, the most substantive posts on things like SPX EPS, oil, unemployment and the like have been conspicuously absent. Real life obligations and requirements have a knack of hoovering up time.
So, I'll try to resume the regular NYMEX updates and such next week maybe. And the earnings post should (hopefully) resume next Sunday. Apologies to anyone who missed it, though inferring from the lack of notes in my inbox that couldn't have been too many of you!
Another week with tons of earnings. Too many for commentary, plus I'm under-the-weather today so the spreadsheet will stand on its own again. One note: I boosted the threshold minimum on prior month option activity to 5000 to filter out some of the low-liquidity earnings reports. These types often aren't worth playing anyway since it's hard to trade out of them.
Notice: Google docs is not allowing me to upload the spreadsheet for some reason. Apparently, they caught the Yahoo bug. I'll try again in an hour or so to upload it. Keep your fingers crossed!
Update: Google docs is functioning again. Not sure what exactly the problem was. However, it's now late and I don't have time for a full-on analysis. I'll try to do one tomorrow. Suffice to say that there are a TON of companies big and small this week. One note on the filtering... there were so many on the 23rd that they were overflowing the number of lines that I had created the IV approximation and other queries for. So, I limited the parameters further to a prior month option volume of 5000 and a minimum share price of 7.50. The results are on the tab 0423-B. The other tabs use the standard 2500 volume and > $5 share price. My apologies for the lack of commentary.
Monday Update: Welcome Evil Speculator visitors. Someone over there linked to this entry and all of a sudden site traffic is up. Anyhow, to read a bit of background about the spreadsheet and what it is and isn't as well as a bit of history, go here: Earnings Spreadsheet Explanation. This is a weekly thing, posted some time on Sunday (And lately, the only thing that gets posted regularly.) You can click on the dated tabs in the window above to see the different days. Here's the rest of the original post:
Quick look at last week: AA gapped up, faded and then gapped up again the next session. I'd call this a negative because unless you had considerable confidence to fade that initial spike, you'd have taken a loss. However, the vertical spreads on BBBY were a great play as it gapped up about 18% and continued upward. Keep an eye out for these "survival of the fittest" plays like BBY/CC and BBBY/LNT. FDO also did quite well and JOSB did get above that resistance and then bolted. So all in all, not a bad week in retrospect.
Unfortunately, I am tardy getting this update out as I had those dreaded "real life" committments to attend to this easter weekend. This is also going to curtail my standard commentary. Fortunately, there were no releases that made it through the filter for Monday so that's kind of helpful. I'd say that I'd like to post a mid-week update but my posting frequency as of late has been dismal so I'll not make an unlikely promise. Instead here's a brief overview of what's to come...
1st - This is an op-ex week.
2nd - The "Golden Boys" of finance - JPM and GS announce earnings. (Disclosure: long JPM shares, covered calls). I've often noted the ridiculousness of financial earnings likening them to kabuki theatre. WFC's out-of-the-park announcement last week should help people realize that when you get to borrow money from someone at nearly zero rates, then lend them the same money at 4.5% and charge them a fee to make the loan, that to recover, all you need is time. Consider also that GS is considering an equity offering to pay off TARP. Having long ago passed into bizarre-o world, the potential dilution from Warren B's warants and another offering in the works means that GS will likely go to the Moon.
3rd - Faux-financial GE is Friday. GE recently lost its AAA rating from Moody's (BRK lost it a few days later, leaving on 4 companies left with AAA).
Check over the spreadsheet, there are a number of big names on there. Tuesday has INTC, JNJ and GS. Wednesday has ABT, and a key semiconductor equipment supplier ASML. (Yes, finally a mention of a player in that sector.) Thursday has several biotech names (AMLN, BIIB, VRTX) along with GOOG, JPM, NOK. I'll throw ISRG a mention as well since it has often been volatile. Friday rounds out the week with GE and MAT.
That's it for this week. Surprisingly, short interest is higher than I would have expected though that could just be an artifact of Yahoo delays in data reporting. Who knows - at least their sites worked this week.
First, a functional note. Or rather, a disfunctional one. Yahoo is having trouble with another aspect of their finance data. This time the screener won't return data so the the ownership information is stale. Keep this in mind and check your broker for the actual short percentages.
Last week I did a little summary of the week prior and since my other thought on filling this space is of the "misty philosophical rambling essay" variety, I think I'll just stick to a wrap-up. The web is full of blogs with those kinds of entries. So... how did I do last week? First, the OK:
APOL - I thought it would be volatile, but not volatile enough. It ended up dropping like a stone but didn't breach the break-even price in my table. It has since found support on the DMA(200).
MON - My gut feeling was for a return to 80. It closed the week at 81.41 and saw 80 on Thursday and Friday. This still has a nice chart with support from the DMA(30&50) around 79.40 and it might be good to watch with MOS coming out this week.
KMX/MDRX - neither would have been profitable strangles.
The not so good: RIMM - oy... it was profitable and my underestimation of its strength was obvious.
So on to this week's earnings releases:
Monday - BLUD. Biotechs tend to move more on news than earnings. And I don't really know anything about their products.
Tuesday - Earnings season is upon us with AA's release. Also on this day are BBBY and MOS. AA has been beaten badly though it is still well off its March lows - 60% up in fact. I'd guess that a short-weighted strategy would be the highest odds. BBBY has lost one of its major competitors as Linens & Things went BK. I believe this will have a similar impact as BBY and CC. BBBY's chart is looking good and it shot over the 200 DMA on strong volume over Thursday and Friday. Historically, BBBY has not moved much at earnings so a strangle might not be wise here. But I'd be tempted to go with a vertical call spread. Finally, MOS: as noted MON was last week and reaction was lukewarm. MOS has a somewhat more bullish chart and it has certainly made large moves in the past. But 53 on the upside seems out of reach to me so I think I'll avoid this one.
Wednesday - FDO is the only one that really interests me. I've had some success with the Dollar Store and this one before. And as before, if FDO can't make money in this economy it never will. In this case, watching to see the action before the release will be important since it's riding an upward sloping support. If that fails - it wouldn't surprise me to see FDO fill the gap back to early March over the next month.
Thursday - DJI component CVX releases. It is about 7% of the DJI now that some of the more embarrassing components have regained some respect. This one won't move a lot but it is a huge company and worth listening to what they have to say. JOSB is very close to a break-out point around 32. If it gets past this, it could bolt. Otherwise, I'd put downside support at 26, which is well above the lower break-even price.
I'm always interested in topic ideas or a new line of thought on something I've written about. My background is in engineering so I tend to approach the market and its data as a problem to be solved/optimized.
Email: lordhuggington AT gmail dot com.