Tech Talk for Wednesday May 2nd 2012

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Pre-opening Comments for Wednesday May 2nd

U.S. equity index futures are lower this morning. S&P 500 futures are down 7 points in pre-opening trade.

Index futures moved lower following release of the April ADP Private Jobs report. Consensus was a decline to 175,000 from 201,000 in March. Actual was 119,000. The ADP report is thought to be a precursor to the April Employment report to be released on Friday.

First quarter earnings reports continue to pour in. Companies that reported overnight included CVS Caremark, Comcast, Barrick Gold, Time Warner, Chesapeake Energy, Devon Energy, Master Card, Marathon Oil and RR Donnelley.

Pepsico added $0.01 to $66.50 after increasing its dividend by 4.0%.

Gap slipped $0.48 despite an upgrade by CLSA from Outperform to Buy. Target was raised from $31 to $36.

Avon Products slipped $0.16 to $19.71 after Caris downgraded the stock from Above Average to Average. Target price was lowered from $28 to $20.

CRT Capital initiated coverage on the U.S. defense sector with sell recommendations on Lockheed Martin, Northrop Grumman and General Dynamics.

Coverage on ConocoPhillips was resumed by JP Morgan with an Overweight rating. Merrill Lynch downgraded the stock to Under Perform. The stock fell $1.10 to $55.41 in pre-opening trade.


Technical Watch

Barrick Gold Corp. (NYSE:ABX;TSE:ABX) – US$40.20 fell 0.6% despite an increase in its dividend by 33%. The company also reported slightly lower than consensus first quarter earnings and offered negative second quarter guidance. The stock has a negative technical profile. Intermediate trend is down. The stock trades below its 20, 50 and 200 day moving averages. Short term momentum indicators are oversold, but recovering. Strength relative to the S&P 500 Index and TSX Composite Index has been negative since December. Seasonal influences turn negative at the beginning of May. Preferred strategy is to use short term strength to liquidate positions.


Barrick Gold Corp. (TSE:ABX) Seasonal Chart


Gap, Inc. (NYSE:GPS) – $28.05 slipped 1.7% despite an upgrade by CLSA from Outperform to Buy. Target was raised from $31 to $36. The stock has a positive technical profile. Intermediate trend is up. The stock trades above its 20, 50 and 200 day moving averages. Short term momentum indicators are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index has been positive since mid-January. Seasonal influences are positive until the end of May. Preferred strategy is to accumulate at current or lower prices.


The Gap Inc. (NYSE:GPS) Seasonal Chart


General Dynamics Corp. (NYSE:GD) – $ 67.98 is expected to open lower after CRT Capital initiated coverage on the stock with a sell recommendation. The stock has a negative technical profile. Intermediate trend is down. Resistance is at $73.99. The stock trades below its 20 and 50 day moving averages. Short term momentum indicators are oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index has been negative since mid-January. Better opportunities exist elsewhere.



Interesting Charts

Responses to U.S. first quarter reports continue to follow a pattern: Unless first quarter earnings reports were a “blow out”, traders are selling on news. Stocks that saw their share prices move sharply higher following release of results yesterday included Thomson Reuters, Archer Daniel Midland and Sears Holdings. Stocks that saw their share prices move lower included Pfizer, ADP, Avon Products and Becton Dickenson.






‘Tis the season for the Nikkei Average to move lower!


Crude oil broke short term resistance at $105.07 to reach a five week high. It also moved above its 50 day moving average at $105.29. ‘Tis the season for crude oil to move higher!


Crude Oil Futures (CL) Seasonal Chart


Energy stocks on both sides of the border continue to respond to higher crude oil and natural gas prices.


The Dow Jones Industrial Average briefly touched a four year high yesterday, but was unable to follow through.



Tech Talk’s Weekly ETF Column

(Published yesterday at

Headline reads, “The past provides clues on what investors should do now”. Following is a link to the report:

Following is full text:

The period of seasonal strength for North American equity markets has generated unusual returns this year. According to Thackray’s 2012 Investor’s Guide, the optimal period to own the S&P 500 Index, the TSX Composite Index and their related sectors and equities is from October 28th to May 5th. Data showing performance for the past 61 periods for the S&P 500 Index shows that the average return per period was 7.7 per cent per period plus dividends. The trade was profitable 85 per cent of the time. Data showing performance for the TSX Composite Index for the past 34 periods shows an average return per period of 8.0 per cent plus dividends. The trade was profitable 79 per cent of the time. Usually both indices have moved higher in unison during their period of seasonal strength.

The current period is different. Return by the S&P 500 Index to date from the close on October 27th 2011 is 9.2% plus dividends while the return to date for the TSX Composite Index is a loss of 1.8%. During the current period, most of the gains by the S&P 500 Index have come from one stock, Apple. Performance by the TSX Composite Index has been dampened by weakness in the energy, base metals and precious metals sectors.

Seasonality works when a series of annual recurring events have an impact on equity prices. For example, the annual recurring events that tend to impact equity markets during this time of year include news from annual meetings, the release of first quarter results and guidance for the remainder of the year. Earnings from first quarter reports released to date by most large cap U.S. and Canadian companies have exceeded consensus, but guidance frequently has been lowered. Many U.S. and Canadian stocks have come under selling pressures following release of first quarter results unless blow out results were announced.

What happens to equity markets from May 6th to October 27th? Performance by North American equity indices tends to be random. The period lacks the annual recurring events that have a significant influence on equity prices.

North American equity markets tend to move higher in the first week in May as the annual meeting and first quarter earnings report season reaches a climax. However, negative guidance included in the current season could dampen prospects this week.

Thackray’s 2012 Investor’s Guide notes, “Overall, investors at the beginning of the month of May should consider using the three R’s: Reduce equities, Reduce beta and Reallocate into seasonally strong sectors”.

Following is the average performance of broadly based equity indices during the past 10 May’s with symbols for their related actively traded Exchange Traded Funds:


Other 10 year average performance data with symbols for their actively traded Exchange Traded Fund was as follows:



Don Vialoux is the author of free daily reports on equity markets, sectors,

commodities and Exchange Traded Funds. . Daily reports are

available at He is also a research analyst for

Horizons Investment Management Inc. All of the views expressed herein are his

personal views although they may be reflected in positions or transactions

in the various client portfolios managed by Horizons Investment Management.


Editor’s Note: Brooke Thackray is scheduled to appear on Market Call Tonight on BNN Television at 6:00 PM EDT tomorrow (May 3rd).

FP Trading Desk Headline

FP Trading Desk headline reads, “Summer good for equities in election years”. Following is a link to the report:


Special Free Services available through is offering free access to a data base showing seasonal studies on individual stocks and sectors. The data base holds seasonality studies on over 1000 big and moderate cap securities and indices.

To login, simply go to

Also, please take advantage of Google ads and other ads available in the data base

Following is an example of’s seasonality charts:


10 Year U.S. Treasury Notes Futures (TY) Seasonal Chart



Disclaimer: Comments and opinions offered in this report at are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

Don and Jon Vialoux are research analysts for Horizons Investment Management Inc. All of the views expressed herein are the personal views of the authors and are not necessarily the views of Horizons Investment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by Horizons Investment Management Inc

Horizons Seasonal Rotation ETF HAC May 1st 2012


Sponsored By...

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180 Responses to “Tech Talk for Wednesday May 2nd 2012”

  1. Frank Says:

    Hey, Wayne:
    You may like this chart. Let me know when you decide to swing trade it.$WTIC&p=D&yr=1&mn=0&dy=0&id=p69231015590&a=258854972&listNum=12

    By the way, I like the company you keep. I’ve read Trader Vic books, whereas you have lunch with the guy. I remember that he was concerned about the explosion in the money supply way back in the 1990’s. You should ask him what he thinks now.

    Have fun.

  2. Frank Says:


    Often when a commodity bottoms, it can take years to create a true bottom pattern. However, the stocks will move way ahead of time to lead the way. The stocks should create real bottoms and then have a sustained move up before the commodity does. Monitor Gassy stocks and aspecially an all Gas type like Encana ECA. Here’s the Nat Gas continupus contract chart dating way back.$NATGAS&p=M&yr=20&mn=0&dy=0&id=p74647320520&a=265748300&listNum=19


  3. Eve Says:

    Hi Muntazir,

    I wrote an answer for you last night on the analysis of the TSX, SPX, and bear ETF’s you had asked about – so, please look there for the response :)


  4. Wayne Says:

    Nice charts!!
    I’ve been swinging Oil throughout April – playing the range between 101 and 105. I’m still long UCO from April 23, after making some nice coin on a trade from April 11 to the 17th.
    Ron, Ray and I are watching this move – first resistance level at 111.25 – then 114.00.

    Nasty – my futures bud was looking for a trading level around 1.50. He’s still short and tight. But, at this level, I’m staying out. Too choppy!! I agree 150% with you here. I have seen a market “bottom” for several years before moving up. Years ago in the pits, they had to bribe the traders to trade wheat. There was no market.

    Mr Vic – LOL – yeah, the money supply – he used to rave about M1 and the velocity of money – it was his central indicator. Now with all the manipulation – he must be going mad. I’m sure that he has a blog out there somewhere. I used to get weekly updates from him, but stopped receiving them a few years ago. He and I and another couple of traders went to the black jack tables when we met in Vegas. He wanted to teach us about odds. He lost! I warned him the the house ALWAYS wins.


  5. Ray-Kitchener Says:

    Wayne: I took some money off the table yesterday when Oil hit 106.43. I sold some UCO at 44.70 and HOU at 6.89. I expect we will see a bit of a pullback before we go further. Crappy jobs report and higher US$ will push it down. Plus if we get a higher inventory build we could have a large bounce down. I bought some SCO and HOD at the close for a swing this a.m. According to Energy Advantage (Dr. Kent Moores), he expects Oil to move significantly higher this summer due to Oil constriction in the US. Means $5 per gallon. And on yes – how friend Mahmoud is the wild card.

  6. Ray-Kitchener Says:

    Should read “oh yes – our friend”

  7. Wayne Says:

    I was playing the range for a while in April – still experimenting. Oil needs to hold at the 105.00 level here if it looks to head higher. But, yes – I was watching the #’s this morning – so far down only .40. BIG DEAL!!
    The inventory #’s should start to firm up – and I will look to add more units to my longs after the report. This market just refuses to go down!
    I think that things have quieted down over in the ME – but the premium is still there. Who knows – the Isreali’s might be working on a “mission” to bomb Iran back into the stone age. But, they won’t dare do anything without first consulting with the Yanks – and the yanks do NOT want to be drawn into another war so soon. It’s election year!!

  8. gmsa Says:

    re.#131 last night
    Screwed up brain & tired mind @ late night creates havoc.
    There you go Kam, what other proof would you need?
    Thanks for the correction, Eve. :)

  9. kay Says:

    Hi Eve:

    Nice seeing you back on the board.…Sto and RSI turning turning down, top of Kelt 39.93; price now @ $38.46, would you say this trade is over expecially with seasonality of gold out of favour. Your comments are appreciated and thanks.

  10. Paula/NS Says:

    I sold my ARX ($21.25) and ERF ($18.79) to lock in profit before the close last night. I guess now the trick is at what level do you re-enter?

  11. Nirmal Says:

    Hi All
    According to Don V. article above we are entering SLOW period season.
    Any one selling and going 100% cash?
    Just curious.
    What to do if I am holding Dividend paying stocks?
    If I sell then I mis out on Dividends income.
    Are there any stocks such as REITs that I can ride during this BAD SEASON?

  12. Slava Says:

    Good morning Frank, I shorted CMG yesterday – so far so good. Only 100 shares.

    For anyone who might have missed it yesterday, here is Frank’s CMG chart with notes.

  13. tony Says:



    once again I am and really am totally wrong on this one.

    I said on monday chk was lagging gave you indication for a trading range as it was lagging the Nasty gas sector.

    Yesterday I told you I was wrong, as price took flight
    but four facts I didn’t encouter.

    Carl Icanh, earnings report and the aubrey won’t have double duties as chariman and CEO, and finally ceo investment will be reviewed.

  14. Slava Says:

    I also shorted COG yesterday as it reached the top of keltner channel with setting 3 .. now I’m trying to determine at what point I should cover – always a difficult decision.

  15. Ken/AB Says:

    Tawny; I am not on the board often. Answer to your question. Yes I do find his material helpful. He did send out a bulletin yesterday recommending selling everything and called this pullback that we are seeing today.

  16. KC Says:


    Thanks for your comments on CHK. I did not trade CHK since I have been busy. So maybe it was a good thing I did’nt act on it?


  17. KC Says:


    Did you read my last email? :) If not I can resend.


  18. tony Says:


    I have been out of this market for the past 2 weeks.

    missed the upswing on the O&G even tho I called it.

    but hearing yesterday HFs are getting out of this market is getting me nervous,

  19. KC Says:


    I’d appreciate your thoughts on SPX into next week please. I have been holding SPX bears for a few days and as you can see they have gone against me. I have been holding since SPX was at 1370 as I was expecting SPX to break below that support, but it bounced up. Just wondering if I should cut my losses and take the small loss now or wait it out to break even.


  20. KC Says:

    Can someone please shed their TA on PXJ? Is this seasonally good time and does it seem like this upleg will hold ground?

    Thank you,

  21. Paula/NS Says:


    Thanks for your comment #87 yesterday re: ARX.

  22. tony Says:


    the only sector I am interested for the time being is this summer olympic games.

    Addyy has been putting up a few commercial on the tube,
    so don’t know if NKE will have an impact (70% use NKE but ADDYY sponsors the games).

    and then is to look for who will post commercials during the olympics.

    back at the 2010 I had invested in YGE took a 10% loss the world cup came along and YGE was more depressed then where I sold my stake it had more then 30% upside during the world cup.

    so this is my stance on this market.

    back in 08 everything was flying and came to a screaming halt, during the games. and plummeted faster then you could blink.

  23. tony Says:



    you are welcome.

  24. tony Says:

    KC and Paula

    #23 Sorry for the mistake.

    you are both welcome.

    chk for KC

    arx for Paula.

  25. Wayne Says:

    Added 5 more units of UCO @ 44.00.

  26. Ray-Kitchener Says:

    Wayne: What’s considered a unit? 500 shares?

  27. Wayne Says:

    I’m so used to reporting on my futures blog – 1 unit = 100. Yes.. 500.

  28. Slava Says:

    What’s happening with lulu? All time high today, on a down market day.

  29. kay Says:

    Hi Slava:

    Are you still holding FCX, I am. Wondering whether to sell but would not go short because Ben may announce his QE3 now that economies are showing signs of slowing and crushed my shorts.

  30. Ray-Kitchener Says:

    Wayne: Are you day trading or swing trading? If swing, what are your exit points?

  31. Wayne Says:

    Swinging. No more daisy trading for this ape!

    Stop at 104.88.

    That size was 500 shares – a bit confusing.

  32. Ana Says:

    Ray-Kitchener and Wayne and all oilers:

    In HOD.TO. Thinking HOU.TO at 104.39?

    Drawing lower trend line on 5H chart.

  33. Frank Says:

    Yes, $WTIC absolutely. Within pennies on the resistance…. going back to May 2011 high. If it hits my bottom trendline, I’ll be in.

    NATGAS: Absolutely. Gold traded between $250 and $330 for 5 years!!!!! The 20 year downtrend was finally over. Look at it now. The stocks bottomed a year prior by the way, as usual.

    Ask Vic about bonds. And what do you think. 30 year uptrend can’t continue forever. But what happens if the market tanks and the stupid money causes bonds to go parabolic for a blow off top? Stay away. I always wait for confirmation of the big move.

    And say hi to Ron. Hope he’s having fun.

  34. Frank Says:

    Slava: CMG. Remember you need to know where the exit door is located. Make the rules, your own rules and stick by them no matter what. What’s your target? Where do you cover? Where do you add if it is going your way? If it breaks your limits, no questions asked, just take action.

  35. Ray-Kitchener Says:

    Ana: I am presently in HOD and SCO. Went in at the close yesterday when I sold all my HOU and some UCO as I am still long in UCO going forward. I may jump back into HOU this week. What’s your 104.39 based upon? Low of yesterday?

  36. Ana Says:


    What I meant to ask, can you check this, to see if this is vaguely in the range?

    Frank, did you just advise that $105.00 is support?

    Thank you in advance.

  37. Slava Says:

    Hi Frank, I slept in a bit and missed covering my cmg short when the stock went down to $416 at the opening, it quickly bounced to $423.74 now..ouch. I bought aapl and lnkd this morning so making some money on those two..

  38. Wayne Says:

    You read my mind. I was in and out of TBT last month for a quick pop – but you are fighting the Fed by shorting bonds. I don’t expect anything to happen until the third quarter.
    Right again – when the market dumps – money runs to bonds – so you have a double whammy to deal with. Stay away for now.
    Interest rates WILL return to more historical levels – but there is so much gov’t debt out there – don’t hold yer breath. When rates do rise – the gov’t will have to start selling national parks – national grave sites – Obama’s summer cottage – they will hit the wall to finance the debt. Interested in buying a used SR-7 (stealth bomber)? How about a used aircraft carrier? Canada waits long enough, we can buy the F35 at half price!

  39. Eve Says:

    Hi Kay,

    Thanks Kay :)

    re AEM.TO:

    The chart is really difficult to read due to the huge spike up AEM did in this past week. So, it is really hard to say where it is going in price as the price could stay elevated in the $37+ range due to their good earnings report AND due to the skew it put on the chart. To the downside (if gold sell off – which I don’t expect it to go down below $1600 by any significance anytime soon), then AEM.TO could potentially go down to around $34/ $35 area to 1) close the gap that’s there and 2) to get to the mid keltner area at $35.31 currently – also, there’s A LOT of support in the $34’s – so, downside potential could take AEM.TO down to just that $34 area (anywhere in the $34’s but specifically, there’s support at $34.71, .44, and .20).

    That’s all I can tell you Kay with this one :)


  40. Eve Says:

    Hi KC,

    No, no email came thru from you – not in my spam either. So, yes, should resend :)


  41. Frank Says:

    I am not very good with short term stuff, such as the SPX for next week. When I look at short term stuff, there is so much whipsaw action, today you’re bullish, tommorow you’re a Bear. Meanwhile those 2X or whatever ETF’s kill you with time decay if we even trade in a range, let alone if they go against you. I would prefer to wait for a break below. Why? Because then indicators will be weaker, support levels will give way and you may get an acceleration on the downside which is quite profitable. That’s better than taking a position when guessing tops. Yes, we could be creating a double top on SPX if you look at it, but there is no confirmation yet.

    I wish I could be of more help.

  42. Ana Says:


    Go to 5H chart. Draw approximate trend line from bottom of candlestick, 04/25 then to 04/30.

    It is also Fib S2.

    Just wondering about this.

  43. Slava Says:

    Morning Eve, I picked up 400 lnkd just above $104..

  44. Slava Says:

    Anyone trading COG today?

  45. Ana Says:


    Thank you for your comments on the board last night.

  46. Eve Says:

    Morning Slva,

    good job hun :) sell it though at over $105 and then buy it back again at that $104 area – if you want to i mean :)


  47. Eve Says:


    My pleasure :)


  48. Eve Says:


    I wrote an analysis on the SPX for muntazir last night – several comments – check there if interested.


  49. gmsa Says:

    Wayne & Frank,
    Don’t you think that US is walking the same trail that Japan has used for a growth to nowhere?
    Aging demographics, permanently running currency printing press, artifically kept low interest rate & high bond prices for decades?

    BTW Wayne, I’m eyeing Boeing 747-200B series aircraft (AirForce One for US pres.) when it’s up for sale pl. let me know. I need NG to go down to under $1 to facilitate that purchase ;)

  50. Slava Says:


    I took 10 days off work.. want to do some reading, trading, relaxing. I’ll see how it goes. If things go well I’ll take a leave for the summer time. Go travelling, live a little. Life is not all about work and making money. So that’s my plan.

  51. Frank Says:

    Ana: That was not me. You oil people know your short term parameters much better than I. Yesterday’s low, support levels? What I shared was the 5 month uptrend. I like the way you people think. If i enjoyed daytrading, I would probably concentrate on 1 or 2 stocks and that’s it.

    Have fun.

  52. Irwin Says:

    FGI (for general information)

    MHY.UN is in a steep down-trend on daily chart.

    Trading at about 10.30 (3.6% premium)
    – net asset value per unit is 9.9450 (April 30)
    – monthly dividend $0.067 yields 7.8%

    Marret also offers MIG.UN investment grade bond yielding about 5%

    pumping disclosure: I own some MHY.UN

  53. Slava Says:

    kay, still holding 1/2 of original fcx position. I should have sold the rest yesterday.

  54. gmsa Says:


    Here are 16 places you should go to (during this time off), if things work out:

  55. Wayne Says:

    The difference for Japan is that they are a nation of savers. Most of the BOJ bonds are held by nationals – not foreign held. So, they are not suseptible to the same risks as the yanks. They certainly have their problems – aging pop being the most serious one.

    LOL – ok. I’ll let my neighbour know. He used to fly into airports where AF1 was scheduled to land. He checked out runway conditions – amenities and was the advance guy for AF1 around the world. Had some interesting stories to tell.

  56. Slava Says:

    Eve, thanks.. you know your LNKD so well!

    What are your current thoughts on COG?

  57. kay Says:

    Hi Eve: thanks for your comments on AEM, I know if gold goes up AEM will most likely trend up compared to a lot of others, the high of AEM was $72.51 (you know I am always hoping to hit the jackpot :) with a stock. Happy trading.

  58. Wayne Says:

    Forgot to mention that I noticed that you use a 16 period RSI on your chart. Did you arrive at this figure after backtesting?
    I don’t use the same RSI factor on everything I chart – each stock/comm has it’s own characteristics – just curious. Currencies trend – comms trade S/R levels.

  59. mick/nv Says:



    Good for you!!

  60. gmsa Says:

    I must appreciate your tenacity and persistence on playing the spx & oil thorugh various etfs on a regular basis.
    Your bankers must be happy seeing their a/c holders getting rich :)
    Keep up the good work.

  61. Wayne Says:

    Someone just bot 200,000 HOU in a block at 6.74.

  62. Frank Says:

    That’s funny! Here’s some wild cards. So eventually the US Dollar tanks as they try to keep markets up much later in time. Oh wait, I should have said the “Federal Reverve Note”, backed by the full faith of the government. Do I have faith in the bankrupt government? Not bloody likely. So they will do as you say, takeover farmland, and anything else they want. Then they will spring the “Amero” on us. That new North American currency that will screw we Canadians if they want to sell us out. I’m not a weapons guy, but I know a few people that may want to buy a few things just in case any civil action occurs in the future.


  63. Eve Says:


    on the 5 min chart, LNKD keeps pushing up the bollinger band – so as of now, the top bollinger is at $106.12 – so, it could very easily get to that level – or higher – depending on how much higher the bollinger band gets pushed up to. It likes to go from the top of the bollinger to the bottom of it – on the 5 min chart. Plus uses the 4. 9. and 18 on the 5 min chart as support and resistance going up and coming down.


  64. Eve Says:

    PS Slava,

    In other words, it is best to use the bollinger band and the 4/9/18 moving avgs on the 5 min chart to trade LNKD well. Also use Williams %R on that chart to guage overbought and oversold.


  65. Lin Says:

    Morning, Slava
    Looks you are doing great! :)

  66. Frank Says:

    Do you realize that the retirees used to be able to live off of bonds and dividends, maybe a nice little 5%. Now they need to be in the stock market to keep up. Then they need to pray that it stays up. And the powers that be know this. They are even trying to change some rules such that a certain % of your 401K must be invested in bonds and such. This, supposedly , in the name of your safety!!! And the market keeps floating higher and higher, until…… it doesn’t anymore. Of course, that’s for later. One day, the US will be forced to increase interest rates. By whom? I do not know.

  67. gmsa Says:

    I suspect Ray or Ana behind the move ;)

  68. gmsa Says:

    Thx for the reply.
    All the retirees have this need.
    Question is what Japanese retirees have been doing for past 15-20years?
    I don’t know, hence asking.
    Japanese markets have yet to go even 1/2 of what it was in mid 90s. Bonds are flat to slightly up at very low interest rates. No wonder they all run to the Treasuries offered by Australia, Singapore & NZ.
    Would it be their govt. supporting their life styles?

  69. Wayne Says:

    Ron just bought himself a new toy. It’s a 9 mm CZ 75 SP-01 pistol. I’ve seen the specs and video about it. Nice piece. Made in the Czech republic.
    So, in addition to his other toys – he’s ready for anything.
    Down here – I was having coffee with a couple of the locals – nice guys. Both were carrying .38’s. I didn’t know it at the time.
    Down here, you can carry loaded weapons. Just as long as you have a permit. A couple of states don’t require permits. The wife of one of the “coffee guys” carries a pearl handled .38 in her purse! They also have a .45 in the glove compartment of their car.
    Just don’t piss anybody off!!!!

  70. Ray-Kitchener Says:

    Wayne: I think that was Slava. She likes those big purchases. LOL!

  71. Ray-Kitchener Says:

    gmsa: Thanks. Just trying to make a living. Are you still in all those bears? Macro events say yes, however the primary dealers which own the Fed are controlling this game for now. Just when you think markets should tank, bam they start buying. Here’s a tidbit for you:


    You may think that the trend of these 500 stocks is what Standard & Poor’s is measuring, and it is, but this index can be deceptive due to its capitalization weighting or its computation that favors a few large-capitalization companies significantly over others. This can give the illusion of strength.
    It may interest you to know that nearly 40% of the S&P 500 price is determined by just 11 companies, due to the way Standard & Poor’s weights its index. Did you know that 26.3% of the S&P 500 earnings come from just 6 financial stocks?

    The fact that Bank of America represents 14.1% of the entire S&P 500 is simply stunning, especially when you realize its recent price history.
    This troubled primary dealer was priced at $4.92 on December 19, but after the primary dealers directed a massive amount of capital into BAC in the first quarter, BAC’s stock was pushed to a high of $10.10 on March 20.
    So just with this one stock that doubled in the first quarter, you moved the S&P 500 by 14%, easily pushing the index above its 200-day moving averages. Yet look what happened to Bank of America’s earnings in the first quarter!
    Bank of America reported earnings of $653 million, or 3 cents a share, in the first quarter. The stock earns 3 cents a share and yet it doubles and because it represents 14.1% of the S&P 500, you get a 14.1% move in the S&P 500 from just this one stock!
    Curiously, 28 cents per share of its earnings came as a result of an accounting charge because the value of Bank of America’s debt rose. In other words, the stock rose because of an accounting trick! Remember, under the current rules, the “too big to fail” banks can count loan loss reserve increases as bank earnings!
    BAC was forced to buy back over $1 billion worth of soured home loans, so subtract 28 cents out of their earnings and ask how much they really earned. So essentially, the Fed gives money to these banks (QE) that are losing money, and in the case of BAC the primary dealers double the stock, which forces the S&P 500 back into bull territory.
    The S&P 500 is a measure for many leading indicators on the health of the economy, so by manipulation of a few companies, and some accounting tricks, the S&P 500 can be driven into bull market territory and the Fed can claim we have moderate growth and the administration can say they are delivering a recovery!
    No wonder there is a huge conflict of interest in driving home prices lower if it adds to primary dealers’ quarterly earnings!

  72. Martine Says:


    Thanks for the charts. Very telling! They currently have a guest at BNN disccussing nat. gas. Interesting outlook. Anyone interested in nat. gas, whether the commodity or o & g companies, should watch the rerun. I found this morning discussions surrounding WTIC very timely too as I pulled out some charts last night on this. It looks somebody was reading my mind. Thanks to all as it reenforces my belief that there is potentially a good trade to consider short term. Regarding the comments made by Wayne about bonds and Fed intervention, I am exactly of the same view. Don’t forget that the last time we had a great run in long bonds back in 2008/09, they sold off afterwards like everything else excect the $US dollar. Something to keep in mind.

  73. Eve Says:


    In 2009 and 2010, AEM went to over $80 (high was $88 in 2010) – it won’t get there anytime soon though due to its problems with its mines – BUT maybe those are currently being worked out (as was suggested in their earnings reports). But yes, AEM usually has the biggest moves in price when ABX, G, and AEM are moving up or down in price on any given day – so, it can be a good one – that’s for sure :)


  74. Frank Says:

    Wayne: I was gone for a while.

    I agree about S/R levels somewhat. However, commodities and currencies can run in a straight line at times. Especially on breakouts. Something breaks out, the amateur shorts using 2X inverse ETF simply because it was overbought. The items procedes to go up for another 8 or 10 straight days, thus handing the amateur his head. It’s happened before and will happen again. You know those smart old guys always say they learn something new all the time and nothing surprises them. You just have to prtect yourself.

    Also, you are correct that different indicators with different settings work well for different stocks and commodities, but I don’t care for the tinkering. I use RSI 16 because it works fine, as I don’t usually miss the big move, but also avoid the whipsaw of the short term. Nothing’s perfect. Intermediate and long term is what I am after.


  75. Frank Says:

    And Wayne:

    Did he buy RGR stock as well? Maybe SWHC? Nice uptrend. Now let’s see if the trend is truly over. I think just a dip to the buy point coming soon.


  76. Wayne Says:

    I wouldn’t be surprised if he did. LOL

    Here’s how the pro swingers approach the charts. They use the 10/30 EMA TAZ (Traders Action Zone) to set their buy targets.

  77. Wayne Says:

    Try this again.

  78. Trendy Says:

    Anyone buy LSI today?

  79. Frank Says:


    Very telling indeed. Sometimes I see indexes that seem to be rolling over and yet markets refuse to go down hard. Why? That’s when I remember that the powers-that-be can hold up the top ten stocks and thus, the market floats higher. Is it a sign of a potential top? Absolutely, but there is no confirmation yet. And you thought Wall Street was invented to make you money. I just like to remind myself that the game continues until such time as the game is over. Protect yourself.


  80. Frank Says:


    Thanks! I will keep that in mind with trending charts. I still like my chart better. If the bottom line gets broken on big volume, the trend is over. If it holds, you can buy with a tight stop. The reward to risk is still good. Even Slava made money on this one.

    Have fun.

  81. Ray-Kitchener Says:

    Frank: I am mainly in cash and right now just trade Oil. Day and swing. I think our cash is safe in RBC at least for now. When the $US bubble and US debt bubble burst (2013-2014), then I will be putting my cash in our mattress and buying one of those Smith & Weston’s product. Even going further, forget the paper currency, just buy gold.

  82. Frank Says:


    I forgot the bloody chart. Got to get my head out of there!


  83. Ray-Kitchener Says:

    Wayne: At what level will you be adding more UCO to your swing if we head higher?

  84. Eve Says:


    As I wrote yesterday re HND and nat gas:

    Nat gas was at resistance (but had room to run higher – if it could get thru that resistance that is) – and HND had support at $34.26 – it went to $34.26 yesterday (went to $34.07 and then bounced up from there). I wrote it was oversold on stochastics and that the last time it was oversold like that, it was in Feb at $22 and then bounced up from there (to go to that $34.26 high before pulling back a bit to $29 and then moving higher again). I wrote it should go up within 2 days (and I thought the inventories tomorrow would be the catalyst).

    Well, that $34 area turned out to be the support point for HND (just as that $2.40 level was resistance for nat gas) – and within 2 days, it has now gone up (I wrote you could get a day trade out of this and maybe more) – so, the catalyst turned out to be the resistance levels of nat gas plus support price for HND (rather than the inventories numbers) – it will be interesting to see tomorrow if the inventory numbers will be a further catalyst that pushes HND higher from these levels today :)


  85. Eve Says:


    Re LNKD:

    Looks like $105 was the low on the pullback from $106.30 area.


  86. Wayne Says:

    As they are so fond of saying on the futures blog “very elegant”! Very nice chart and I totally agree with your comment. A sure sign of pattern failure.

    Ray, – I’ll wait for the 110.00- 110.50 test before deciding. I still have my 104.88 stop that will move with WTIC. I have a full load of UCO on now – so, I’ll wait. I added to my april 23 position ( 41.50 ).

  87. gmsa Says:

    Thanks for that detailed comment on spx & (over) weight of some of its components.
    Worth looking at, to see the ‘real’ game.

    So far today I’ve bought 1.5k more of the HND…still holding on to the eca/cog shorts.
    As told to Wayne, need to collect some coins for the AF1 with the money ;)
    Thx for the note.

    re. last night’s conversation on NG…watching the forward strip, everything is down. About 130pm -nymex close- saw huge downside volume on UNG.
    Watching the support levels for NG 9ema & 20ema. Currently holding 50ema level.
    Any tips besides holding on to my ‘actual’ shorts? ;)

  88. Slava Says:

    RGR looks great but nothing goes up forever, right? It seems like everyone wants to be in RGR now (other blogs, message boards, Mark Leibovit letter, etc.). Also, like I said yesterday, I believe they can only sell to US consumers, right? How many guns are needed out there anyways? I see their business slowing down in 2013.

  89. Slava Says:

    Hi Frank, perhaps if you have a few spare minutes sometime this week you could give me a suggestion as to what investment books and websites could be useful for me in order to improve my trading skills. I know that you, tony, Eve, Wayne, Lin and others have done it before but this info is scattered all over the place and hard to find now that I have some free time to actually take note of it. Many thanks.

  90. Slava Says:

    Lulu up +14% in a week.. retail sector is still on fire with lulu, nike and nordstrom hitting 52-week highs.

  91. Eve Says:

    Does anyone know why ALL the retailers today are up BIG TIME!! Even DECK that missed earnings BIG TIME is up over $3 today! From the high end of FOSL, LULU, ULTA, UA, NKE, etc to the low end of DLTR are ALL up today – yet ADP numbers were bad (indicating slower job growth) – so why is everyone hot today then for the retailers?? Anyone have any answers as I can’t find any info about this.

    Thanks :)


  92. Slava Says:

    Tempting to short lulu here but it’s at a 52-week high so not a prudent trade.

  93. mick/nv Says:


    From what I can see, all these are in long term uptrends, no point in trying to figure out what the markets are doing or why, just go along for the ride.

  94. Slava Says:

    Eve, I hope you made some money in LNKD.. this stock should be your ATM

    After I bought above $104 and sold around $106 it went down to $105 again (I didn’t buy since Michael was distracting me) and now I see it’s back to $106.81!

  95. gmsa Says:

    Hi All RIMM addicts (if any still left alive!)
    @ 2:56pm today 2.4million block trade took place in US.
    Lifted the price by over $0.25 that minute.

  96. Frank Says:

    “Very Elegant”? I’m flattered.

    Slava: RGR, out as we do not gamble on earnings. We take the easy money and run. Watch to see if it comes down to the lower line on lighter volume for another potential purchase. Don’t sell it either in case it goes parabolic. Just stand back. You do not want to take a new position here until it identifies clearly it’s next big move.

    I will check my library and let you know. Money management first and foremost, for you.

    Don’t touch CMG short or I’ll get my 7-year-old to kick you in the shins. Before today, do you think there was any sell orders up in the $77+ area? Think! Leave it alone.

    Gotta run. Have fun.

  97. Slava Says:

    gmsa, what’s been happening with RIM lately? I see the price is back to 52-week low. Time to buy or short? :)

  98. Eve Says:

    Hi mick/nv,

    Thanks mick! I realize they’re all in an uptrend – well, not ALL as DECK has lost a SIGNIFICANT amount in this past year – yet, even IT is up over $3 today! So, that’s why I am puzzled as to what is going on with the retail sector when even the DOG of DECK is up big time today with the sector. I wanted to know if there was news on the sector today that I missed – because the entire sector being up (both high end AND low end stores plus the DOG), then it makes me wonder if something was announced to make this occur?? Have you heard any news mick on the sector??

    thanks mick :)


  99. Slava Says: re your 7 year-old.. such a cute age! When you say “don’t touch cmg short” – do you mean I should just leave my short as is and not cover for now and not add more?

  100. Eve Says:


    No I missed the 11 am move this morning as I was focused elsewhere – I didn’t see it until it was already above $104 – and by that point, i didn’t want to buy it – but now I know, i could have! Then, I was waiting for it to get back into the $104’s – yet, it only went to $105 and then bounced up – so, I missed that too!! darn it!! oh well – another day ;)


  101. Slava Says:

    from the Wolverton guy for those interested:

    “Transalta Power is Canada’s largest traded power company with approximately $3 billion in revenue with plants in Canada, US and Australia.

    If you examine the 5 year chart I have enclosed the stock has performed terribly dropping from $38 to a range of $20 – $23, and in the last 2 months has now hit new lows of $16.5.

    The profitability/management of this company has been less than stellar so I am not that impressed with the potential for large returns however in the current environment the attraction is more from a dividend standpoint. At present prices the dividend yield is 7%. With bonds paying less than 2% this yield is quite attractive as the likelihood of payment is favorable.

    My belief is that the present decline is near bottom is based on the long term trend of support at this level as can be seen from the 10 year chart I have enclosed. The potential for a recovery back to $20 – $22 is further possible and the overall rational for the investment at present levels. This combined with the 7% dividend allows for the combined potential return of ~20%+. I know this return is not that glamorous but the possibility of the shorter-term nature of it and the outlook for returns from the overall market gives this company the potential for market beating performance.

    Transalta has issues facing it but overall power demand is growing and governments need cheap power for business and residents so they will ensure it is profitable.

    I have enclosed the investor presentation that summarizes the company.

    Transalta is a large cap utility that offers a high dividend yield and the potential for slow but stable growth.”

  102. Slava Says:

    Eve, do you think that COG is likely to fall more? I don’t want to close my short too soon. Thank you.

  103. gmsa Says:

    Stephan Whiteside calls this sector a weightloss sector & has developed his index around it and often comments on it.
    UA, LULU, NKE, WTW are the ones that come to my mind.
    As for the reason behind the jump – no idea as I’m too far out from the reality.
    Will let you know if any sane reasons found.

    GMCR reports after hours today.
    As for Waterloo RIM/RIMM – I just took couple of long positions. Stopped shorting it many months ago. No idea as to why that sudden big block move just b4 3pm.
    Not sure if I would like to sell upside calls against it.
    RIMM actually is trading in a 20% range for past many days.

  104. Slava Says:

    gmsa, if I were to buy rim (On tsx) where do you suggest I put a stop loss? Thanks.

  105. Tawny Says:

    gmsa, tony, wayne

    anyone think that the u.s. can actually decouple from europe

  106. gmsa Says:

    I bought it the RIMM – US side so that I can write options on it easily. Plus didn’t want to get whipped by CAD $. Mine is a initial position in couple of a/cs.
    I’m not putting a stop on this. This is so much story driven stock that it will do any moves.
    risk/reward wise – more up than down…but I was proven wrong when I said this @ 18/19 level.
    Put the stop $0.21 (or so) under the 52 wk low if you want.

  107. Eve Says:


    Thanks for that info! Just thought there was news on the sector for today – but found nothing on my own :(

    thanks gmsa :)


  108. Martine Says:


    Re. 70

    This is quite interesting in terms of analysis. However, the financial sector represents 14% of the index based on market value. Even if I agree that the financial sector as a whole as well as the technology sector (Apple and the likes) had a significant impact on the S & P 500 appreciation over the past few months, I do not thnk BA alone had such an impact. I would be inclined to investigate further. Could you indicate the source of that article for reference purposes? I am curious to find out more.

  109. gmsa Says:

    re.#104 messed up 1st sentence…sorry ‘bought it on the US side – the RIMM’

    US fundies think that they are immune to the world problems, just like in late 90’s they laughed at how terrorism could strike in their own time big time.
    Time will tell…also, if the scare if widespread DXY will go up and may be, just may be that money will take partial shelter in the US stock markets…making them look better relatively spkng.

  110. Eve Says:


    COG just pulled back today to its 4 day MA – it will fall as nat gas falls – tomorrow is inventory numbers for nat gas – usually it’s bearish for nat gas – if that’s the case tomorrow, then COG should fall further. No guarantees though. If it does fall further, then it will most likely find support at the 9 day MA at $32.56 – this is also the mid keltner area too!


  111. Slava Says:

    I’m so tempted to buy GMCR back before the close.. but too scared.

  112. Tawny Says:


    Thanks for your reply…. perhaps today is early month money flowing in from pensions, etc. it is nice that they uy for cliets at or ear the top.
    Keyoard has lots of sticky keys — I pick it up a d bang it a round sometimes it helps. Any suggestion on this keyboard other than replacing it

  113. Slava Says:

    Thanks Eve.. I’ll stick to my COG short position at least until tomorrow morning. I think risk/reward is worth it.

  114. gmsa Says:

    Apologies fellow bloggers:
    My last post for this PM – too many mistakes while juggling things b4 the close

    should read
    109.gmsa Says:

    May 2nd, 2012 at 3:41 pm
    re.#106/106/106/106 & not #104

    US fundies think that they are immune to the world problems, just like in late 90′s they laughed at THE WARNINGS ON how terrorism could strike in their own HOME big time.
    Time will tell…also, if the scare IS…

  115. Tawny Says:

    i hate guns in citizen hands – but i can see looking at these figures that all hell could break loose sometime soon with the youth – unemployed, idle and mad! protection may be an asset in some countries/areas.

  116. Slava Says:

    I bet you in 20 minutes I’ll be saying ‘had I kept my gmcr shares I would have made $6k in 20 minutes).. and soon we’ll find out. Oh how I need that crystal ball!

  117. Frank Says:

    Slava: Sorry, I was in a hurry and running out the door. I meant LULU. Don’t short it. Before today there were no sell orders above $77. That’s why it can explode so quickly once it hits a new high.


  118. gmsa Says:

    Lol…actually it’s not my keyboard, it’s me :(
    Thanks for asking re. keyboard help.

    For the keyboard do the following:
    Soak it overnight in soapwater filled bathtub, then
    next AM boil it for 15mins. in 50+50 solution made out of acetic+sulphuric acid, then
    drop it repeatedly from 2nd floor onto the concrete pavement until it’s shaken dry
    and then gently take it to the nearest environmentally friendly recycling depot.

    I’m gone for now, ‘trust me’!

  119. Martine Says:


    Same store sales report is due tomorrow which might today’s rally as far as the retailers are concerned.

  120. Martine Says:

    Ray – Kitchener

    Re. 108

    I was referring to BAC, not BA (Bank of America). The 14 % of the index for the financial sector is as of December 31, 2011. So, probably higher by the end of March. By how much, I would need to find out.


    Re. Keyboard

    Very funny! I will consider next time I had it wih my computer. I however might simplify the process. Out the window!

  121. Eve Says:


    re GMCR – look:

    What did i tell you yesterday?? ;) It’s currently trading in after hours at $33 ;)

    ok, I said $40 or lower ;)


  122. Eve Says:

    Thanks Martine! Maybe that’s what it is – thanks :)


  123. Slava Says:

    OMG ..gmcr is at -33% in the after hours. So post #116 should read “I’m glad I sold my shares otherwise I would have lost $17k”..

  124. Eve Says:

    PS Slava,

    re GMCR and my email to you yesterday:

    I guess I’m actually getting pretty good after all at reading the options ;)


  125. Eve Says:


    I’m glad I told you yesterday to NOT be in GMCR for its earnings as I thought it would miss and fall to $40 or less ;)

    Good job hey hun?? ;)


  126. Martine Says:

    Re. GMCR

    Scary stuff! That’s exactly why I stay away from momo stocks.

  127. Ana Says:


    I would really like to see, “what you saw in options” to get to this opinion.

    If you have the time available, I would very much appreciate this information.

  128. Eve Says:

    Hi Ana,

    Sure – I have the time to explain it. First, I’ll show you the info I sent yesterday to Slava (in an email) on both LNKD and GMCR for earnings releases this week (LNKD reports tomorrow after the close):

    just wanted to give you some info re lnkd and gmcr:

    ok, if lnkd goes down big time tomorrow and on thursday, then chances are really good that it will pop up to $120 area or $125 AFTER it reports earnings on thursday (yahoo finance has the date back at thursday again for earnings). options as i wrote to you, are suggesting this to occur – that lnkd will pop after earnings to go to $120 or higher – and the confirmation of this happening will be a big pullback for lnkd – either to $102/ $103 area – or less.

    similar to lnkd, gmcr options are showing that gmcr will miss earnings and will fall to around $40 by week’s end – or lower. now as i’m not 100% yet on options, i may be reading this incorrectly – so, please bear that in mind :) but the stock running up higher into earnings may just be confirming that kind of price action for earnings release tomorrow after markets close – also being currently overbought on stochastics could be confirming that too :)

    so, please don’t hold gmcr going into earnings (in case you still have it) as the options may just play out as i’m reading them – that’s IF i’m reading them correctly – and yes, as i don’t have A LOT of experience yet in options, then i might not be ;) BUT, just thought i’d give you a heads up on this anyway :)

    it will be exciting to see this week though how these 2 play out with how i’m “reading” the options ;) if i’m correct, i’ll be really excited as it just means i then have more tools to rely on for trading ;) so, hopefully i’m correct lol – i have more confidence in being correct with lnkd though – i’m not as sure with gmcr – so, i can’t wait to find out :)


    So, that was my email to Slava :) (anyone who writes to me knows I type only in lower case letters when I type emails – so, that’s why the email was just in lower case).

    And how did I get that $40?? Well, I looked here in the past week:

    And I noticed (since last week) that the most volume for GMCR was being traded around that $40 strike price (for both calls and puts) – and as of this week, calls and puts were being traded at lower prices too – so, that told me that for this week’s options expiration on GMCR, it looked like it would be going to $40 (or less) due to that very high volume being traded around that $40 price and much lower volume in the other strike prices at that $48 to $50 level – hence, I suspected that it would miss earnings and that that would then put the stock at $40 OR less by this Friday’s options expiration ;)

    Pretty cool hey Ana?? ;)

    Now, we’ll see how things work out for LNKD tomorrow – I suspect though it will bounce up to $125 or higher (IF the options play out as they are suggesting ;) ).


  129. Eve Says:


    I did the same thing with AAPL – I told a family friend over the weekend (just before AAPL reported on the Tuesday) that the options looked like AAPL would be going to $600 or $620 by that Friday (in their reporting week) – I don’t know if he believed me or not ;) this is what I wrote to him on the day that AAPL reported (wrote this to him AFTER AAPL reported that day):

    just wanted to give you an update on aapl:

    aapl went down today to $555 as the low – closed today at $560. reported stellar earnings at 430 pm and is now trading at $599 in after hours

    see?? what did I tell you on sunday ;) aapl will beat earnings (on tuesday) AND will be back up at $600 right after that ;)

    it could get to $620 by Friday OR be stuck at around $600 (call options for the weekly options expiration are showing either $600 or $620 for a closing price for this friday).

    Cool hey Ana ;)

    Thanks go out to tony for opening my eyes on reading options – and to Rol Lew for helping me so much with learning about using them (in the strategies he and I were discussing a few weeks ago :) ).


  130. Slava Says:

    Eve, yes, amazing email predictions.. Ther was a part of me that wanted to keep a few gmcr shares – I’m sure glad I didn’t! At one point it fell to $29 (from today’s $49+). Scary stuff.

    We’ll be watching linked in tomorrow.

  131. Anna/TO Says:


    Hi Eve, trying to figure out this option thing as well – very much appreciate your comments. Could you pls. have a look (if time allows) at May AAPL options and tell me what you see? I’m getting 580-585$ target. Thx.

  132. Anna/TO Says:

    #129 Never mind Eve – LOL

  133. Slava Says:

    Eve, I think this could be one of your other “money making ventures”.. trading around earnings times based on the options markets AND on what the stock is doing within a day or two prior to announcing results.

  134. Eve Says:

    PS Ana,

    Sorry, I meant to say that the highest volume around the PUTS strike price of $40 was being traded at that price point “in this past week” (not calls and puts as I had written to you above). It was TODAY that the volume was the highest at that $40 strike price for BOTH calls and puts.


  135. Ana Says:

    Yes, Eve, very cool!

    I have been able to grasp the information regarding the chart having an area to “go to” for earnings.

    Thank you very much for this information!

  136. Ana Says:


    I remember you describing where you thought AAPL would go after their earnings report.

    Those with enough $$$ to trade AAPL really profited from your great knowledge and advice.

    Good job, Eve.

  137. Eve Says:


    re post 133:

    That is my goal!! I was thinking of doing that myself just after I got AAPL correct – so, my next ones I looked at were GMCR and LNKD (as you know ;) ). So, yes, I completely agree with you on that Slava!! It will only work though with stocks that have weekly options expiration (as trying to think of where a stock will go to in price in a month out or 2 weeks out, is not advisable due to things changing DAILY with stocks – BUT, for one week out, the options are easier to read for that :) ).

    It is very exciting for me!!! Woohoo!! Now mad at myself for not “trusting” and “believing” what i was seeing in the options as I didn’t buy any puts as I had thought to do at the $42 strike price (I wanted to buy below $1 each – so, it was at that $42 strike price they were trading for under $1 at .93 today – at .87 yesterday). We’ll see what happens I guess tomorrow for LNKD :)

    So so glad too that you didn’t keep ANY of your GMCR shares!!! Glad I wrote to you about this yesterday :)

    Just one more GREAT tool for the tool box :)

    Thanks Slava :)


  138. Eve Says:


    Thanks Ana :)

    Feels great to be able to read the options like this!!! (thanks to tony for that ;) ). Ana, “I” have the money to have traded AAPL – BUT, I wasn’t sure enough yet of myself in “believing” and “trusting” it would play out in price as I was expecting it would (from reading the weekly options) – so, I decided I’d wait and test this with more upcoming stocks. So, now GMCR down (played out as expected), LNKD to go ;)

    Thanks Ana :)


  139. Eve Says:

    Hi Anna/TO,

    Oh no no, don’t go by what i wrote in my post at 129 for AAPL as that is a copy of an email I wrote to a friend of mine on the DAY AAPL reported earnings – and where the options for the WEEKLY expiration were showing AAPL should go to in price that week – so, that was from 2 weeks ago – not for May.

    I can look though at May for you – BUT, I find it best to check the WEEKLY options expirations for a stock that trades weekly options (rather than looking at 2 to 3 weeks out in trying to guess where a stock may go to at that further out time period). So, for the WEEKLIES, it looks like AAPL should go to between $580 and $590 (puts are saying $580 and calls are saying $585 – BUT, things can change EVERY day!! so must look again at them tomorrow).

    As for the MONTHLY options expir for AAPL:

    Looks like $590 (as of right now – BUT closer to the date, that could change). Puts are looking at $580 OR $590. So, for now, I’d expect it to go to $590 for the monthly options expiration (but as I wrote, things can change every day with these things, so must check them every week, if not every day ;) ).


  140. Anna/TO Says:


    Thank you Eve, I LOL-ed as soon as I’ve seen your post – you mast have written it as I was typing ;) Later I’ve realized it was regarding past options. Anyways, thank you for clarifying – very helpful.

  141. Rol Lew Says:

    It is not just the weeklies on GMCR
    Look at the May monthlies – 40 puts
    look at the volume just today


    That really stinks – I just think somebody knew!!!!
    The footprints are just too big.

    Even the june 40’s are higher than the neighbouring strikes
    june 40p……1052……1410

    Yep – I missed it… was “busy” shorting gdx, for peanuts,
    compared to those 40 puts that will go from $1 to 25$? at 9:30 am

    There was just a chap on cnbc saying that there is more of this
    downside to come, since the co is lying about it’s guidance.

  142. WLM Says:

    Veresen (C$14.37, -C$0.89, -5.8%) said first-quarter earnings fell to 5 Canadian cents a share from 7 Canadian cents. It also lowered its guidance for distributable cash to a range of C$1.05-C$1.35 a share from its previous guidance of C$1.10-C$1.45 a share.
    See also;

  143. Anna/TO Says:

    Stupid question regarding options – how do you know (at first glance) if you’re looking at weekly or monthly options? Or you just check the dates? thx

  144. mc Says:

    Hi Eve and Rol Lew,
    You both discussed Sina last week or so. Would you please shed some light on it. Where do you see the stock is going in the near term by looking at options.Thanks a lot.

  145. mick/nv Says:


    When you are looking at these puts, how do you know if the totals are buying puts at that strike price or selling puts? isn’t one bearish and the other bullish?

  146. Eve Says:

    Hi Rol lew,

    Oh I never check the monthly (as things can change every week, if not every day ;) ). So, I got all I needed to know from just looking at the weeklies. I’m so sorry you missed this one Rol – I too missed it – I was “planning” on buying the puts at $42 for under $1 (was thinking 30 contracts) – yet, I didn’t :( just in case I was wrong :( BUT, I did the same analysis for AAPL before it reported – and I got it bang on correct for that one too!!! So, I need to learn to trust myself in reading these things :)

    You have another chance though Rol with buying calls tomorrow on LNKD as they report tomorrow after the close – and it looks like it will bounce up to $120 or $125 or more after they report. I’ll be watching the options tomorrow FOR SURE and MAY just BUY some this time ;) I’ll see ;) I’d be happier with buying them IF LNKD went lower than just the $106 area :( I’ll see though how tomorrow goes BUT I’m excited :) :)

    Thanks for providing that info on what price the $40 puts should be trading at tomorrow – I was very curious about knowing that myself :) Was this just a guess on your part Rol?? as i was thinking the $42 strike puts would be trading at around $12 IF the stock opens tomorrow at $30 – is this not the case then??

    Thanks Rol lew :) you’ve helped me TREMENDOUSLY with trying to learn these options strategies – so, thank you, thank you :) (and tony for introduicing the board to “reading” options to “know” where a stock may go to in price ;) so, thank you thank you too to tony :) )


  147. Eve Says:


    Yes, you just check the dates. So, for example, for a MONTHLY expiration on LNKD, you’ll see this for May options expiration (showing 19 as being they expire on May 19th):


    see it says 12″19″

    so, for THIS week ending on May 4th, you’ll see “04” in that line – here:


    so, you see 12″04″.

    Taken from this site:

    You can see the June MONTHLY expiration in that chart (the weeklies aren’t done until closer to June). So, the June monthly expiration is on June 16th as can be seen here:


    “12” is for 2012 :)

    so, 12″16″ for June MONTHLY options expiration :)


  148. Eve Says:

    PS Anna/TO:

    Your question wasn’t AT ALL stupid – I would expect that to be a very common question for anyone who doesn’t trade options OR know A LOT “about” options :)


  149. Eve Says:


    for SINA, looking at options for THIS WEEK’S expiration, it looks ike SINA is getting pinned to EITHER $60 OR to $57.50 – calls are at $60 but puts are at $57.50 (for the highest volumes i mean). Depending on what the stock does tomorrow in price (as in, if it doesn’t go below $58 and STAY THERE), then my “guess” is that it will be going to $60 for Friday BUT just UNDER $60 – not actually going to $60. Friday’s price action will tell you if it gets pinned to just under $60 OR to $60 by how it behaves on Friday. Often, if it’s getting pinned to say $60, the stock on the Friday of the weekly options expir, will go to ABOVE $60 (to say $61 or just around there) and will then come back down on the day and you’ll see it then staying in the $59’s on the day and going to either $60 by close to 4 pm EST OR to just under it. IF it goes below $58 tomorrow and stays below $58, then you’ll have a better idea that it may just be headed to $57.50 for Friday.

    Check this against the 4 day MA though too :) as it will tend to stay around that price – so, if the 4 day MA is far from $57.50, then chances are better it’s going to be put to around that $60 level for Friday. IF markets tank on Friday due say to the jobs report, then all bets are off for what the options TODAY are “suggesting” for SINA for this Friday :)


  150. Eve Says:

    Hi mick/nv,

    re this:

    how do you know if the totals are buying puts at that strike price or selling puts? isn’t one bearish and the other bullish?

    No, as one cannot know IF puts OR calls are being bought OR sold around any strike price – all you can “know” is that based on VOLUME at a certain strike price, the calls/ puts are being “traded” – just like a stock that is down on a day – there will be sellers of that stock and then buyers too and the stock could still be in the red and falling even though some sellers have bought the stock (as it is still falling in price) – you just can’t know whether there is buying or selling of the calls or puts – but the VOLUME is what is telling you that where the HIGHEST volume is, is where the stock is being MOSTLY traded at for the strike price – and as it is often the “big boys” who move these options, then “they” are telling us (with the highest volume) that the stock should be going to THAT strike price (that has the HIGHEST volume at either the puts or the calls).



  151. Eve Says:

    PS mick/nv,

    Thats how I was able to “determine” that the probability was high for GMCR to go to $40 or less this week as that $40 strike price was where all the action was (for the PUTS and “some” calls too) but then for today, the highest volume for BOTH calls AND puts was at that $40 strike price.

    That’s how I was able to do it for AAPL too (2 weeks ago) and now for LNKD too :)

    Here’s TODAY’s option table for GMCR:

    And for the “big boys” to be “able” to make good money at that $40 strike price for Friday, then GMCR would need to fall a lot further down from that $40 strike (as I understand how options work and their value – if I’m incorrect, then hopefully Rol Lew will correct me on that :) ). Thus, going to $30 for tomorrow means they’ve made great money at that $40 strike price IF they SOLD the calls OR BOUGHT the puts at that strike or higher :)


  152. Anna/TO Says:


    Tax question – yes, I know I’m late, but not owing, so taking my time – lots of transactions. I’ve been entering all my transactions and calculating ACB (using free website service – adjustedcostbase). From there I can import data into Excel – it shows me all capital gains/losses. The problem I’m running into is the frequent trading and lots of superficial losses which in turn affect my capital gain/loss values. Right now the only solution I have is to look at all the dates and anything under 30 days rule needs to be re-calculated manually – ACB, gain/loss etc. I have a question to anyone who had to go through ACB calculations and superficial loss rules – how did you handle it? Is there an easier way? Software, spreadsheet or something???? Really, really appreciate any help/tips – thank you very much in advance.

  153. Wayne Says:

    Another one bites the dust. Look for further weakness in Nasty as positions will need to be closed out. Now the fundies are throwing in the towel.

  154. Rol Lew Says:

    Eve, That was not even a guess . I was just saying that while
    being occupied with gdx, (peanuts) i did not even look at gmcr,
    that had more potential.

    ok – lets see, the stock should open around 30, down by 20.
    So the 40 puts will be 10$ ITM. But the IV today was around 250,
    so that will fall – by how much? by a lot. So that put would
    be worth i guess – 7.00 – 9.00
    I cannot recall ever seeing an IV this high.

    look at all of the puts tomorrow at the open.
    the weekly ITM ones will do way better than the weekly OTM.

    And for the OTM, the monthies will do better % wise than the
    same weekly strike. I think you probably noticed this with SINA.
    The gamblers lost & lost when the expected pin failed, while the
    ITM weekly players lived to fight another day.

    I will look at LNKD during tomorrow.
    The ATM straddle is saying a $12 – 15 move (in either direction)

    But it looks like the calls have it pegged at 120 to 125.
    on the weeklies & monthlies.

    On feb 9th-10th it went from 77 to 88 ~ $11

  155. mc Says:

    Thanks Eve. You are super super kind and fabulous person. Thanks a lot.

  156. Eve Says:

    Thanks Rol lew for that price info AND the additional info too, on GMCR options :)

    I can’t wait to see the prices on them tomorrow :)

    Thanks Rol :)


  157. Eve Says:

    Thanks mc :) That’s very kind of you to say :)

    I hope SINA works out for you (if you’re trading it that is) :)


  158. Anna/TO Says:

    GMCR really getting punished AH – last price 29.45 16 mil+ traded

  159. Gene Says:

    Hi Eve,

    You may like to read the following information which I forwarded to Tony about a month ago:
    Hello Tony I have noticed that you and others on this blog sometimes use option open interest to determine stock movement and I thought it might be useful to point out that in my experience this information can be very misleading as there is no way to determine if the call and put positions shown as open interest are held as short or long positions. Many are simply there because they are part of hedging strategies. The following excerpt is by Lawrence McMillan a recognized option expert.
    “The option exchanges keep track of the amount of opening and closing transactions in each option series. This is called the open interest. Each opening transaction adds to the open interest and each closing transaction decreases the open interest. The open interest is expressed in number of option contracts, so that one order to buy 5 calls opening would increase the open interest by 5. Note that the open interest does not differentiate between buyers and sellers – there is no way to tell if there is a preponderance of either one. While the magnitude of the open interest is not an extremely important piece of data for the investor, it is useful in determining the liquidity of the option in question. If there is a large open interest, then there should be little problem in making fairly large trades. However, if the open interest is small – only a few hundred contracts outstanding – then there might not be a reasonable secondary market in that option series”.

    I felt this information may be worth mentioning again and may save someone from losses due to relying on option open interest for direction in stock trading. I have tried it off and on for more than a decade and do not believe it provides reliable information for determining direction There is more detail in the above referenced publication “Options as a Strategic Investment by Lawrence McMillan” which many consider the bible for option players.

    Hope this is helpful to you,


  160. Eve Says:

    Hi Gene,

    Thank you for that info :) Yes, I knew about the “open interest” – this is why I don’t look at all at openin interest but instead ONLY look at “volume” (as I’ve stated in my posts today on the options info i gave out). I also knew I had read the info on here from “someone” regarding puts and calls only showing “trading” taking place – not showing buying or selling of the calls or puts – I know I read that info on here from a couple of different people (I think one was Eric Wheatley) – and now I know one of the other people I learned that info from was YOU Gene!!! As I do recall your post from back then – I just couldn’t recall whom it was who gave out the info :) I think there was one other person on here too who pointed out the same thing in the past couple of months – I just can’t recall whom it was!! I’m not good with remembering “names” – just good at remembering the info and details provided in the posts by people. So, thank you Gene for posting that info to tony a month or so ago as it did help me as well (when I read it back then) in understanding options better (ie. in being able to read the calls and puts) :) The open interest though, I did already know about – but thank you anyway Gene for reposting that info again as I appreciate it and I’m sure others on here will benefit from it too :)

    Thanks Gene :)


  161. Eve Says:

    Hi mick/nv,

    Please have a read through of Gene’s post above too – this will reinforce what i was trying to say in my response post to you on options (buying and selling) :)


  162. Irwin Says:

    Nat Gas

    As Martine mentioned at #72, there was a discussion at BNN on natgas.

    Bill Gwozd

  163. Irwin Says:

    and here’s T Boone Pickens

  164. mick/nv Says:


    Sorry, still don’t understand what you are looking at in volume. There appears to more volume on the may 60 calls than the may 40 puts, doesn’t that mean that the stock price will go to 60 not 40? Am i looking at the wrong info from your link?

  165. Gene Says:

    Hi again Eve

    I expect from your reply to my post # 158 that you understood what I was trying to convey in respect to not using option open interest to determine stock direction.

    You did however write that you ONLY consider volume when making your determination in this regard so I would like to mention that volume can be just as misleading as open interest. An example of this could be a huge number of calls sold to provide covered call income on a large stock position held by an institution where they do not want or expect the stock to go up. It could also be a huge number of put contracts in place only to hedge a long stock position which they really hope will not go down but only need insurance protection for their stock position. This should also show why in Mick’s query to you in post 163 that the volume of calls or puts has very limited value in determining which way a stock will move.

    I hope these observations are of some value to you Eve.


  166. Eve Says:

    Hi mick/nv,

    Ok, here’s what i did:

    I noticed in this past week that volume was building up around $40 – yes, there’s also volume at $50 to $60 – all pretty close in volume for each level on the calls side from $50 to $60 – BUT, on the puts side, only the $50 strike price had all the action (ie. high volume) (so perhaps a lot of selling was going on there – this is what it suggested to me – a lot of selling of the $50 put as many expected the price to decline).

    Then, I looked up and down the calls and puts to see where there was a strike price that had an unusually high volume level which was far away from the other strike prices – and $40 popped out – on the puts side – and in the past 2 days, the calls side at $40 has been building up too! So, I learned from tony that IF you have a large amount in volume at one strike BUT at the nearest strike price the volume drops down considerably but then goes up again at the next strike price, that this means the one with the low volume (the middle one) will act as a resistance level for price (on the calls side – probably too on the puts side). So, I saw TODAY the additional pile up of calls AND puts at the $40 strike price BUT nothing came close in volume on both calls and puts strike prices until that $50 level. So, that told me that the majority of the action that was furthest away from the other strike prices that had similar levels on volume on the CALLS side BUT only had one strike price on the puts side that had a high volume ($50), that the stock was most likely going to be put to that $40 strike and possibly go lower too (as I saw calls having a volume buiding up in the $30’s too). So, people were betting MORESO on the calls and puts at that $40 strike price than they were at the other high volume strike prices at that $50 to $60 level – and as the options are being run by the “big boys”, I figured that they were betting the price would fall to AT LEAST $40 rather than staying around $50 to $60 level. It’s just a probability thing – it’s always still a guess but I did the same thing too with AAPL and noticed the same type of thing going on and saw the volume was high near the price at $560 for AAPL on the day it reported BUT that it was higher at that $600 and $620 level (and $590 too) BUT with little volume at the other strike prices in between $560 and $590 – so, with the most action occurring at the strike prices of $600, $620, and $590 (even though AAPL closed that day at $560), this told me that the probability was for AAPL to be going to $600 or to $620 that week – and it went to $618 on the day after it reported.

    Does this help explain what I was looking at mick and how I got that GMCR was most likely going to $40 or lower rather than going higher??

    I look at these options things every day to see how they act daily – and it’s this kind of thing I'[ve noticed occuring in the past – so, that also helped me to come to the conclusion of that $40 level (or lower).


  167. Eve Says:

    Thanks Gene – I will keep this info in mind when I’m looking at this kind of thing in the future.

    I also know that the big guys play games in the options market (as they do in the regular market) – so, I also combined info of things I’ve written about on here in the past of what often occurs when a stock moves up in price just prior to earnings AND is overbought on the chart – or moves up in price to hit close to an all time high in the price (it tends to drop in price after it reports) – vs. when a stock moves down in price and is oversold on the charts just before going into earnings (it tends to op up in price after reporting). GMCR moved up in price just prior to reporting today AND was overbought on the chart (it dropped after earnings). AAPL moved lower in price AND was oversold on the chart (it popped after earnings). This occurs like this about 85% of the time – so, not 100% but has high reliability nonetheless (another one of the “games” played by the big guys going into earnings).

    I also know that at certain strike prices in options, there is a large number of open interest as a fake out for others (one of the games “they” play).

    I also watch options on certain stocks every day to see the game “they” may be playing each week – this gives me more of an understanding of where the price “may” be going to for the WEEKLY options expiration on stocks – i can honestly say that for the majority of the time, the options have played out as I’ve thought they would. I’ve never been way off base such that I’m off by like $5 or more (if I’m off, it’ll be by just the next strike price but not more than 1 strike). So, I’ve not yet encountered a scenario of experiencing that kind of thing you’re mentioning – it doesn’t mean I won’t experience it in the future, but for now, thus far in the last few months), I’ve not had it happen.

    So, these are additional things I look at when it comes to using the options ALONG with the other tools – they’re all just tools – no one of them trumps another – they tend to work well when combined together.

    Thanks though Gene for the heads up with that :)


  168. Eve Says:


    I was ging to write a “P.S.” to you – BUT with what Gene posted to me, the answer I gave to Gene has in it something I was going to write to you as my p.s. – so please do have a read of that response to Gene right above (167) – and that is my ps to you mick :)


  169. Eve Says:


    Sorry, in answer to your question to me earlier today on what I was looking at with GMCR and options, please have a read through of the posts between Gene and I and between mick/nv and I to get more info regarding your question to me :)

    I feel given mick’s post to me, that I was too vague in what I was looking at – so, I explained it more fully in answer to mick’s question (and to Gene’s post to me at 165).


  170. rick Says:

    Ray-kitchener , You say in post 70 quote:
    ” Bank of America represents 14,1 % of S&P 500 ”
    “Nearly 40 % of S&P 500 price is determined by just 11 companies ”

    This info are incorrect .

    Apple = 3,18 %
    Bank of America = 0,51 % not 14,1 %

    Biggest 11 companies = 16.05 % not 40 %

  171. rick Says:

    these info are incorrect

  172. Eve Says:

  173. Eve Says:

  174. mick/nv Says:


    Thanks for the detailed explanation. If you look at this every day then you have a good understanding on how it changes on a daily basis and it appears that you can use it as a tool along with you TA skills, although in the case of gmcr i think you already knew how it was going to move without looking at options.

  175. Eve Says:

    Hi mick/nv,

    re GMCR: No, I didn’t really know at all how it would move – that’s why I wrote to Slava yesterday in the email, what I did – in that I wasn’t all that certain GMCR would fall to that $40 or below level but that I had more certainty regarding LNKD. So now, all I need to see is what LNKD will do. Options on it though changed today from yesterday – so, it is harder to read today than it was in the past week :(

    Thanks mick :)


  176. gmsa Says:

    Thx for sharing that piece of info…
    Now show us the disastrously huge build on the NG inventory report tomorrow and I will owe you a nice lunch next time you’re in the GTA!

    Glad someone replied!
    If you simply throw it out of the window, you will miss out on all the fun that Tawny could be having following my process.

    Hope you will take my funny reply there in the right spirit & not find it offensive in any way…I guess I was just having too much fun.
    No harm intended to your beloved keyboard as well ;)

    Good night!

  177. gmsa Says:

    Here is a piece of info. that might relate to the mystery behind the move in the apparel sector today err yesterday already by now :)
    from briefing dot com
    “The Consumer Discretionary sector put together a 0.5% gain in the face of broad market weakness, but its lack of weight limited its ability to offer any real leadership. Teen apparel retailers were especially strong after American Eagle (AEO 20.90, +3.01) raised its earnings forecast; the ensuing surge in shares of AEO took its stock price to its best level in about four years.”

  178. gmsa Says:

    Because of my sudden busyness at work on Monday & Tuesday, really could not think/act on those bears. Regret missing out on last leg of EXK short on Tuesday.
    Still have spxu, hxd, more hnd and other individual shorts – not that all is green if you’re wondering :(
    Added RIMM long today (initial positiion) in couple of a/cs.

  179. gmsa Says:

    Good question…
    We have resident Tax expert like Ray-Kitchener & CJ – They definitely will be able to shed more light on to the subject.

    All I can tell you is that you can combine those trades (whether bought & sold at a loss and then repurchased in less than 30days & sold again may be at a further loss/gain) and then report it as a lump sum.
    What CRA doesn’t want is you claiming cap. loss (on a single pair of transaction) while you’ve done multiple sell/buys within 30 days in same or any other a/c on the same security.

    So essentially you will have to do it manually on a spread sheet or with paper N pencil, if you like!

  180. gmsa Says:

    ETF GLD again bending below 150ema. Not good for bulls.
    Friday & Monday’s events should make it go one or the other way decisively.

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