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Ways To Play The 6% Pullback In GE

Ways To Play The 6% Pullback In GE

Back on April 10th, General Electric said they were planning on selling most of GE Capital over the next two years (shedding most of GE Capital Real Estate for $26.5B) and announced a $50B share repurchase program to top it off (plan to bring the share count down to 8B from 8.5B by 2018). Shares of GE trade at a P/E ratio of 17.24x (2016 estimates), price to sales ratio of 1.80x, and a price...

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CMG – Buy Weekly Call Flys

CMG – Buy Weekly Call Flys

Chipotle Mexican Grill (NYSE: CMG, $693.14) is scheduled to report earnings after today’s market close.  The stock has been relatively flat in 2015 (up just under 1% YTD), but has been a very strong performer - CMG is up nearly 92% over the past 2 years.  Former parent company McDonald’s Corp. (NYSE: MCD, $94.84) has had nearly as lackluster a performance in 2015, with shares having risen an...

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Is Crude Really Making A Comeback?

Is Crude Really Making A Comeback?

Over the past few weeks, we have seen crude oil rise sharply and, just Wednesday, it reached levels not seen in months. The commodity is up sharply, having rallied more than 10% in a week.  Of course, we’ve seen short-lived rallies before, so is this just another one that will fade or is this going to stick?  That’s a great question and clearly will tell us the chances of making profitable...

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Sell The May E-mini S&P 500 2110-2130 Call Spread

Sell The May E-mini S&P 500 2110-2130 Call Spread

The S&P 500 has seen quite a few ups and downs since trading at 2175 at the end of February. The market traded all the way down to 2030 by mid-March. By the end of the month, the index had traded above 2100 again in two separate sessions, only to follow up with another visit to the 2030 area. Volatility anyone? The Federal Reserve still casts a large shadow (or cloud depending on your...

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Positive Signs Coming From The Gold Miners

Positive Signs Coming From The Gold Miners

It is no surprise to anyone following the financial markets in the past few years that the gold miners have been one of the worst places to invest (aside from coal companies). The Market Vectors Gold Miners ETF has fallen 69% from the September 2011 highs above $65 and 28% from the 2014 highs. A stronger U.S. dollar and an end to quantitative easing have put downward pressure on commodities...

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The e-minis – Lots Of Movement, Not Much Progress

The e-minis – Lots Of Movement, Not Much Progress

Yesterday In Monday's note, we mentioned 2100 as an important  psychological resistance level for the ESM5, the S&P 500 mini futures, and warned that a failure to break through that level might send the price back down to Friday's low. Bingo. In yesterday's trading (Apr. 13), the futures banged up on the open in what looked like panic buying, then stopped one point above the resistance...

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Make A Play on ​The VIX/VXV Relationship

Make A Play on ​The VIX/VXV Relationship

The US equity market has some external forces (QE forever from the Fed, for example) that can distort the true climate of the market.  One thing that I have adapted from this skewed climate is to look at the time structure of the VIX.  Specifically, I look at the relationship between the one-month S&P volatility index (VIX) and three-month S&P volatility index (VXV).  When the VXV...

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Options Trading Strategies – Trading in the Fat Tails

Options Trading Strategies – Trading in the Fat Tails

Options Trading Strategies   Trading in the Fat Tails Famed investor George Soros once said, "The biggest profits to be made are in the fat tails." What on Earth did he mean? Here's everything you need to know about one of my favorite options, income strategies. As defined in the book "Inside the House of Money" by Steven Drobny, fat tails are anomalies in normal distributions; they are...

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Should You Buy J.B. Hunt Ahead Of Earnings?

Should You Buy J.B. Hunt Ahead Of Earnings?

Unusual Options Activity Over 4,000 JBHT Apr $90 calls were purchased for $0.45-$0.65 late in day on April 7th. Call activity was 39 times the average daily volume as implied volatility spiked 8% to 26.88. The one major catalyst that will occur before April options expiration is J.B. Hunt’s first quarter earnings report on April 14th (shares have moved higher on four consecutive reports)....

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Bull Call Spread – Rite Aid

Bull Call Spread – Rite Aid

Rite Aid Corporation (NYSE: RAD, $8.74) is scheduled to report earnings Wednesday before the market open, kicking of the new earnings cycle.  The stock has long been a favorite of options traders, as unusual orders have been seen ahead of several major moves in the stock. Analysts are estimating EPS of $0.07 on revenue of $6.8 billion, compare to $0.06 EPS on revenue of $6.6 billion.  This...

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You Just Have To Pick Your Spot

You Just Have To Pick Your Spot

Gold can be a tricky market to trade.  It gaps all over the place for seemingly no reason.  Applying normal technical analysis can be tricky too.  This is one of those underlying market themes – you just have to “pick your spot.”  We have been playing the range in crude oil as of late, but, here, I am not playing the top or the bottom of the channel or anything like that.  I am essentially...

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A Strangle Play Ahead of Friday's Numbers

A Strangle Play Ahead of Friday's Numbers

We are in a short holiday week, with most markets closed on Friday.  Tomorrow will be a bit unusual, the Bureau of Labor and Statistics has decided to release the jobs data despite most government offices and most exchanges being closed. As a result, the CME will be open for a brief trading session in the Interest Rate and Foreign Currency markets. Thursday’s Jobless Claims came in a bit...

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Arrowhead Options Are Pricing In 20%+ Move This Month

Arrowhead Options Are Pricing In 20%+ Move This Month

Unusual Options Activity On April 1st, 7,100+ Apr $8 calls traded with the majority purchased for $0.25-$0.60. Prior to this action, the $8 calls already had the largest open interest in the April options expiration. Call activity was 6x the average daily volume, as implied volatility soared 52.4% to 137.44. The jump in IV is significant since it brings the expected move through April...

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Oil – A Quick Move To The December Lows

Oil – A Quick Move To The December Lows

We continue to play the range bound crude-oil markets.  Now, with potential deal with Iran very close to some resolution, we want to try and get back in. I think the initial reaction will be to the downside, with the market thinking the Iran is promising up to 1- million barrels of production per day.  If there is deal done or not is not really at issue.  The US administration has far too...

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Straddle Monsanto, A Bearish Call

Straddle Monsanto, A Bearish Call

Monsanto Company (NYSE: MON, $112.96) is scheduled to report earnings before the opening bell of Wednesday’s session.  The company is expected to report negative growth, with analysts projecting EPS of $2.93 on $5.58 billion in revenue.  For the same quarter one year ago, Monsanto reported EPS of $3.07 on $5.83 billion in revenue.  MON shares haven’t made investors jolly in 2015 – the stock...

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