Intraday Trading Vs Delivery Trading - Which Is For You

Margin Isn't Dangerous & Why I'd Still Use It If I Had Less Than $25,000

Margin Isn't Dangerous & Why I'd Still Use It If I Had Less Than $25,000

Cash vs. Margin


TL;DR- Use Margin if you're trading securities and either above or below 25k. If you know how to size positions, it won't matter if you move $4,000 into a trade or $4,000,000. As long as you sized the position correctly. If you're limited to 3 trades, then take 3 PERFECT trades: https://imgur.com/a/SpPOERQ

I see lots of people discussing contrasting ideas although they attempt to justify using both. Here are some things I see said and written frequently from people that doesn't add up for me:

  • "Use a cash account to avoid PDT" - (Totally fine, in some cases such as certain options traders. Not if you're trading securities.)
  • "Risk 1% of your account" - (So if your account is at $25,500, I risk ~$255 and if I lose 2R I'm below PDT. Doesn't sound too great to me if I were to lose the first 2 straight trades.)
  • "Margin is a double-edged sword" - (It's only dangerous if you don't set hard stops or size your positions correctly.)
  • "Never take on a trade that is worth more than your account" - (I can agree if you were swing trading but in terms of IntraDay trading, this is hindering your ability to grow your account. If you're risking $100 on a trade that costs less than your account value.. then $25 on a trade because of your account value.. then you're adding unneeded variables. Remember: "Consistency.")


The Predictive Model I built lays out all valid trades within the report range as well as \"Perfect Trades\" that I consider \"Textbook\". The report range is between a 30 day range. Between 4-17-20 to 5-17-20. Total \"Perfect Trade\" count is 9 trades. Even if I were limited to 3 trades per week. I'd be able to trade them with less than 25k on margin. The stats reflect $100 risk I've set on a different tab. (The \"W\" is just a graphic I made for \"Winning\")

It doesn’t matter if you move $4,000, $40,000, or $4,000,000 into a position. As long as you’re risking the same. Your Trading Account's performance is based off of risk. Such as:
•Sharpe ratio
•RRR
•Number of R’s in 1 week/month/quarter. (Example: I made 7R this week. If my R is $100. I made $700)

If I were to go back to when I was below $25,000 some years ago. I'd still use a margin account while being limited to 3 trades per week. Here's why:

Formulas you have to know:
Position size formula = Risk ÷ Stop Size
Stop Size Formula = Entry - StopLoss

Example 1a:

Stock ABC,
Entry = $10.00
StopLoss = $9.90
StopSize = 10¢
Risk = $100
In Live Trading: $100 ÷ $0.10 = 1000 Shares
1,000 shares at $10.00 = $10,000 position

Example 1b:

Stock XYZ,
Entry = $385
StopLoss = $383.00
StopSize = $2.00
Risk = $100
In Live Trading: $100 ÷ $2.00 = 50 Shares
50 shares at $385 = $19,250 position.

*$10,000 CASH account: CANNOT trade Stock XYZ and must wait 3 days for his entire account to settle after trading Stock ABC. If it was a margin account, they'd still be able to take 2 more trades this week.
*$10,000 MARGIN account: CAN trade Stock XYZ and can trade both scenarios while still able to trade 1 more time in a 5 day rolling period.

Then the next point made is, "Just won't trade anything above $20".


Ok. great rebuttal, but why?

Let's remember this: StopSizes aren't always directly correlated to the price of a stock. YES you're more likely to have a wider StopSize on a higher priced stock and a tighter StopSize on a lower priced stock. But remember this: of slippage on 1,000 shares is 10% of his risk ($10)... It will be even more slippage if his stop loss market order is hit. Even a Sell-StopLimit order will have slippage within the amount you allow for when you enter a position.
Stock XYZ would have to be slipped 20¢ just to equate the amount of slippage on Stock ABC.Highly liquid and available stocks such as AAPL, AMD, NVDA etc don't have 20¢ spreads. Not even 10¢. Rarely 5¢. Most of the time. Just a couple cents. Of course there could be more right out of the open but the spread in my years of experience is tightened within 2 minutes of the open.
Yes, these small amounts in pennies do hold lots of merit if you're looking at having any longevity in this business, it WILL add up over the years.

Both trades have the same risk [in perfect world theory].

If both stop market orders were hit (StopLoss). Both traders would exit with a $100 loss on each. Although 1 trade required $10,000 in capital and the other trade required $19,250 in capital.
Use margin. If I had to go back to when I had less than $25,000 in my account, I'd still do it the same way I did it with margin. I highly suggest using margin even if you’re limited to 3 trades per week. I get asked all the time when I began trading. If you watched my last video, I showed my first ever deposit with Scottrade (Old brokerage that was bought out by TDA a few years ago) in 2015 although I don't consider that's when I started trading because I didn't treat it the way I do today.
I really consider myself starting as a trader in 2017 when I:
•Wrote a business plan
•Understood statistics
•How to research.
All this being said, slowly over time I noticed that I am taking less and less trades and increasing my risk size. Why?
EV: Expected Value.


- Margin has zero negative effect if you're sizing your positions the same every time. Margin allows you to take on more expensive positions that are showing your edge.

Bonus: Being limited to 3 trades a week isn't fun, I remember that feeling from years ago. Just remember to take 3 perfect trades a week. Sometimes "Perfect Trades" don't work out in your favor while some subpar situations hit target. Some weeks you might take your 3 "Perfect Trades" by Tuesday. Some weeks you might take only 1 "perfect trade". If you follow my watchlists on Twitter (Same handle as my Reddit), I keep my Day Trading Buying Power transparent. Not always is it growing perfectly linear. And not always am I posting every single day because sometimes, my edge isn't there. Just because the market is open doesn't mean you HAVE to trade.
My watchlists aren't littered with 15+ tickers. Rarely do they have more than 7. That may work for other traders, but for me, I demand quality. It's either there or it isn't. No reason to force a trade. I'd rather focus heavily on a few tickers rather than spread myself thin across multiple.
Trading isn't supposed to be exhilarating or an adrenaline rush. It can be boring. I said that in the post I wrote back in April.
Also if you make money, even if its just $20 in a month. Take that money out and buy something. Shrine it. Cherish it. You ripped that money out of WallStreet. Be proud of it. It takes a lot of courage to do this business. Realize that the P/L is real money. Sometimes even just buying a tank of gas or a book will help you realize that. Spend it from time to time. Get something out of your trading account. You may or not be trading for long, get something that is tangible to always remember the experience in case you don't last. Make it your trophy.

That's all I've got for right now. Maybe I'll make another post or 2 before the year ends. I hit my 1 year full-time mark in September.
Best wishes!
-CJT2013
submitted by CJT2013 to Daytrading [link] [comments]

I bought six PRPL mattresses today. You should buy PRPL too (it's undervalued).

I bought six PRPL mattresses today. You should buy PRPL too (it's undervalued).
tl;dr: Buy PRPL stock, warrants (PRPLW) or calls based upon your preference. They are closing out a killer quarter and are undervalued. PRPL 22.5c 8/21 if you really need a strike.

I decided to appeal to both WSB audiences today with two different types of DD:
  1. A completely irrelevant story with some pictures and a position
  2. Numbers and Other Stuff

I bought six Purple Mattresses today.

Yep. I moved to Utah a few weeks ago (absolutely true) in order to do better DD for you in Purple's hometown (not true at all), so I decided to trek down to the Purple Factory Outlet to scope out the scene.
Purple Factory Outlet in a crappy part of Salt Lake - Sign on the door says \"NO CASH INSIDE\"
Family informed me they were coming to visit in three days (who does that to someone when they just moved!?!). My wife said we needed sleeping arrangements, so I said Purple mattresses.
After speaking with my Mattress Firm friend, he told me that Mattress Firm is entirely out of stock of twin mattresses in the Salt Lake City market (Purple's hometown). Worse, the mattresses aren't coming back as the original (the only mattress to come in twin) is being discontinued.

https://preview.redd.it/qd4u5bo3oy751.png?width=1242&format=png&auto=webp&s=3417ffb0eca481dbd797b67be2cb9c06c7a58a65
This is a screenshot of an internal Mattress Firm memo on the discontinuance of the Original Purple Mattress (the cheapest one by far) What can I say? He isn't a photographer.
  • The original is going away
  • Floor models are NOT to be sold as they are traffic drivers
https://preview.redd.it/tsevapzpoy751.jpg?width=3024&format=pjpg&auto=webp&s=04399eff4e38e98ad17fa55d6db0e511f799bc67
I figured the Purple branded store would have stock, if it existed. And because they are being discontinued, I didn't want to be left short-handed in the future. So, I walked out of the store with six Purple mattresses. And some pillows. And sheets. And mattress protectors. Aaaaaand because I took delivery, it counts towards Q2 revenue (the best part).
For all of those who will inevitably accuse me of pumping the stock, I admit that purchasing six mattresses will pump revenue and therefore pump the stock after earnings. Now, where are all of those people who asked me for a free mattress?

This was a sign.
Most importantly, when I pulled out of the parking lot, a purple Dodge Challenger zoomed right by me. I was barely able to get this zoomed in picture of it. This means PRPL stock is going to zoom up.
PRPL 22.5c 8/21. I bought ten of those contracts today too. It was cheaper than the mattresses.

Numbers and Other Stuff

I put forward that because Purple is a high revenue growth company, the best valuation metrics are revenue multiples (as opposed to EBITDA multiples or P/E ratios). You're welcome to debate this, but frankly, the forward looking EBITDA and Earnings look beautiful as well.
Additionally, I put forward that Enterprise Value / Revenue is superior to Market Cap / Revenue, but I'll let you do that research yourself.
From Yahoo Finance:
Enterprice Value / Revenue
Ticker As of 6/28/20 2020 Q1 2019 Q4 2019 Q3 2019 Q2 2019 Q1
PRPL 2.01 2.52 3.94 3.61 3.73 3.09
TPX 1.71 4.84 7.39 7.34 8.07 6.88
SNBR 0.98 2.36 4.40 3.79 4.97 3.78
CSPR 0.53 0.91
Yes, COVID has happened, but unlike TPX, SNBR or Serta Simmons Bedding (which just completed a pseudo-bankruptcy), Purple has actually benefited from COVID and its prospects have never looked better with a shift to higher revenue- and margin-per-unit DTC as well as insatiable demand from its wholesale partners.
PRPL is currently trading well below its own previous EV / Rev multiple range, despite accelerating revenue growth into Q2 with a healthy long-term outlook of holding an increase.
Additionally, PRPL is trading well below the pre-COVID norm for industry EV / Rev mutliples.
What about CSPR? CSPR is a total dumpster fire that is now drowning in IPO lawsuits. Its revenue growth has materially slowed, was awful in April forward looking (15% YoY growth vs 170% for PRPL), on declining margins. The cash burn rate for CSPR was high before COVID. They likely only have a few quarters left to live. I think they are overpriced as a result. CSPR is a bad comp even though there are similarities to the businesses at the 30,000 ft level.

Revenue Growth & Estimates (Q2 Estimates via Yahoo Finance)
Ticker My Estimate Q2 Low-Mid-High Estimates 2020 Q1 2019 Q4 2019 Q3 2019 Q2 2019 Q1
PRPL 201.7-233.3 170-180.1-186.9 Actuals 122.4 124.3 117.4 103.0 83.6
YoY % 46.3% 58.3% 65.8% 36.0% 37.7%
TPX 613-616.4-626.4 Actuals 822.4 871.3 821.0 722.8 690.9
YoY % 19.0% 32.9% 12.5% 7.9% 6.6%
SNBR 176.8-216.4-281.4 Actuals 472.6 441.2 474.8 356.0 426.4
YoY % 10.8% 7.1% 14.5% 12.6% 9.7%
CSPR 95.8-104.8-113.6 Actuals 113.0 126.9 89.4
YoY % 26.4% 24.3%* 24.3%* 24.3%*
A few items of note here:
  • CSPR disclosed the Last Twelve Months YoY growth as of 3/31 was 24.3% (which sucks for a revenue growth company that is burning cash)
  • PRPL accelerated its growth over the past year. It is massively accelerating again in Q2.
  • PRPL disclosed in an 8k that is has already booked about $145M in revenue for Q2, so the analysts' consensus estimates are WAY under. I gave my math and estimate for Q2 sales here. I still stand by the estimate that PRPL will beat $200M in revenue this quarter, especially since I just bought six mattresses.
  • Now compare the barely double digit growth numbers of TPX & SNBR over the past year to PRPL. Now compare the EV / R multiples. Something is off.
  • PRPL may very well beat SNBR in revenue for Q2 (due to SNBR's high reliance on wholesale sales).

Summary: PRPL's EV / R multiple is under where is should be, even in this market, whether you compare it to its own previous multiples or its competitors before they were affected by COVID. If you look at COVID EV / R multiples, it is in-line with companies who are materially struggling with cash flow and growth... this couldn't be further from the truth. PRPL is undervalued.

Analyst Price Targets

I don't usually give these guys much weight, but for those of you who do:

https://preview.redd.it/h13nnc7zxy751.png?width=531&format=png&auto=webp&s=f36406c5e43cd7e07757ba6459dbff5665b7e525
Marketbeat (and a few others) are inaccurately showing a lower consensus price target because they are using some very old price targets.

https://preview.redd.it/qxgstjh4yy751.png?width=1359&format=png&auto=webp&s=af9d185d18ad3db9c3bc8f44c6acecc729cc6d1a
As you look at the 7 price targets MarketBeat is using to build a consensus price target, two of them are from last year, which is ridiculously old (it's about time you update this Bank of America--you got your underwriting--now do your job). Wedbush was after earnings, but before the recent 8-K on Q2 revenue.
I put forward that the only targets that matter are those that adjusted to the 8-K revenue announcement. The consensus there is $19.75. This only matters if you follow these types of things.

Today's Price Action

I admit that this post would have been more relevant early this morning when I started writing it (the numbers part).
The price spiked late afternoon because of the attention drawn to it by a CNBC interview by CEO Joe Megibow.
https://www.cnbc.com/video/2020/06/29/purple-ceo-on-the-popularity-of-mattresses-as-americans-stay-at-home.html
In the interview, he doesn't share anything really new (for those of us who closely follow), but he does emphasize that PRPL doesn't have a return rate problem, unlike others (*cough* CSPR *cough*).

Q2 EPS / EBITDA Estimates

PRPL has generated $70M in cash during April and May, which is insane for a stock that has generated Adjusted EBITDA in the 6.2-15.3M range over the last four quarters. The quarter isn't even done yet.
I'm not putting an EPS estimate on this because the amazing cash generation is going to be partially offset by a fairly large warrant liability expense adjustment. It will likely be one of the final expense adjustments we see as the secondary offering triggered a strike price drop to zero, which is one of key things the liability expense was modelling. Regardless, warrant liability expense doesn't deserve to be an expense as the warrants themselves are already built into fully diluted EPS, which is what everyone reports. The FASB done messed up on this one.

Technical Astrology & PRPL Patterns

IMO, most technical analysis is confirmation bias at best. Here's some confirmation bias.
https://preview.redd.it/5kviazrs0z751.png?width=1166&format=png&auto=webp&s=56c8daaa52c4af31c66c9821e57e40b9362b1bcd
If you are into this type of thing, PRPL has been a series of Bull Flags since the bottom of COVID. We are now ending our fourth bull flag (which likely ended today). At least this is what stocktwits and a few other areas are raving about.
Intraday Patterns
The intraday patterns are more interesting to me. I've been watching this security fairly closely over the last 3 months since the COVID bottom, and on most days, you'll see a spike in the morning that fades away into the afternoon. It is almost like clockwork and seems to be irrespective of volume.
While I don't trade this pattern because I don't want to exit my long-term capital gains positions yet, some of PRPL gang makes money by buying in the morning (or afternoon before), selling/shorting at the peak, and then closing/buying late afternoon. Good on them!
Also, PRPLW warrants tend to lag the stock on the way up if you want to play that too.

What is your next play after PRPL?

I've already mentioned several times that I will fully exit my warrants (and rotate into some PRPL stock / long dated options) when the stock price reaches about $24. My inbox has been bombarded with questions about what my next play is.

https://preview.redd.it/t56ziwe42z751.png?width=1161&format=png&auto=webp&s=4ccef0051c2f1740d1c8059f1cb2a16188f7435c
The above chart is a comparison between CSPR and PRPL. CSPR, even though it is a total dog, has been riding up with PRPL on sympathy plays. CSPR spikes on PRPL news, conference presentations, and any other movement.
PRPL has reasons to be up. CSPR shouldn't be any higher than where it was after its last earnings release. The only new things that have occurred are dozens of IPO lawsuits.
I'll be shorting CSPR for somewhere between $100k-$500k if I end up exiting my PRPL positions before CSPR earnings and if this stupid pattern holds. It's free money.

Positions

I've got tons of warrants (closing in on $2M worth) and now 10x PRPL 22.5c 8/21.

Do your own due diligence. This is not investment advice of any kind.
submitted by lurkingsince2006 to wallstreetbets [link] [comments]

DDDD - Cycles and Human History

DDDD - Cycles and Human History
In this week's edition of DDDD (Data-Driven DD), now that my short term thesis of a 274-292 channel has now been invalidated because of some vaccine company fraudulently telling everyone they've cured COVID-19 to pump their stock before a secondary offering, I'll be digging deeper into my longer term thesis that I've been talked about for weeks now. I've previously wrote about this thesis from a perspective of economic history and the perspective of liquidity and finance. This time, lets look at it from a perspective of human and American history, and cycles that can be in them.
EDIT - This DD is meant to be read as a last part of a trilogy from these two previous posts with the actual data and quantitative content. Without that context, this post will basically seem like trying to use obscure theories to magically predict the future because of some prophecy. This is meant to be a theoretical / qualitative explanation of the of what was talked about in those previous posts, as well as connecting them to actions and thesises of well-known investors like Ray Dalio and Warren Buffett, who are saying very similar things. Don't bother reading this if you haven't read the first two parts of this trilogy.
Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
History doesn’t repeat itself, but it often rhymes. This time, let’s take a broader look at cycles and patterns that often present itself throughout human history, and connect that to the economy and the stock market. Much of the content for this piece is taken from the Strauss–Howe generational theory, Ray Dalio’s thesis about our place in the long-term debt cycle, and Warren Buffet’s take on the same topic when he spent a few hours talking about it in the most recent Berkshire Hathaway annual shareholders meeting.
The Fourth Turning
The general idea of Strauss–Howe generational theory, or the “fourth turning” is that American history tends to repeat certain trends within every “saeculum”, or human lifespan - approximately 80 years. This is how long it typically takes for the certain historical events to start disappearing from human memory, allowing similar events to happen again. I’m not entirely sure why this theory focuses on American history specifically, and can be applied to human histories across civilizations, although until recently those cycles may not have been synchronized with each other. The theory states that history tend to occur in cycles of four “turnings”:
High - A “golden age” of a civilization. This is when there is strong unity within members of the society, with strong confidence in institutions like the government and big corporations, and weak individualism. As a collective mind, the civilization is able to work together to achieve big goals.
Awakening - People get tired of conformity, trust in institutions weaken, and there’s a strong desire for self awareness, spirituality, or authenticity. This is a time of experimentation, activism, and rebellion.
Unraveling - Confidence in institutions such as governments and large corporations are at its weakest, and individualism is at its strongest. Society fragments to polarizing groups, and public action by governments is barely able to achieve the smallest goals.
Crisis - This is when the fabric of society and existing institutions are destroyed in response to a perceived existential threat to the civilization itself. Economic distress is rampant as the economy sees defaulting sovereign debt, high unemployment, deflation or hyperinflation, or civil unrest. The crisis eventually becomes a unifying force for the previously fractured society, and the civilization comes together to solve the crisis. Civil authority and governments become trusted again, and self-sacrifices inspire people to work together as a society over self interest.
Let’s look at how this cycle played out over the past few centuries in the US.

1701-1723 High The establishment of the first British Empire. The thirteen British colonies in the Americas were all by now well established and beginning to prosper. The Glorious Revolution in Great Britain has just ended, and the result is the supremacy of the people, through Parliament, over the Crown, and a new set of rights that apply to all Englishmen.
1724-1741 Awakening The First Great Awakening, or the Evangelical Revival. People become much more devoted to their religion and a desire to convert others, including native Americans and slaves.
1742-1766 Unravelling Seven Years War (French and Indian War in the US). It was considered to be the world’s first major conflict, with initial rivalry between the European great powers spilling over to other continents. From an American perspective, this would seem as an unnecessary war caused by a rivalry between two powers far far away, causing unnecessary hardship to the settlers in America. After the war, Britain wanted to recoup some of their losses from all the money spent fighting in North America, and created new taxes, leading to the Boston Tea Party. As a result, Britain then imposed the “Intolerable Acts” to punish the colony of Massachusetts. Throughout this time, trust in the Crown within the colonies started to disappear.
1767-1791 Crisis The American Revolution - All trust and allegiance to the Crown is destroyed and replaced with new ideals.
1792-1821 High After Victory in the American Revolution, there’s a new sense of unity and pride in the newly founded nation. New institutions were created for the new country, and there was a sense of optimism, even during the War of 1812. The period after that war, and leading up to the 1824 election, was called the Era of Good Feelings, to reflect the sense of national unity and purpose within the US
1822-1842 Awakening The Second Great Awakening, similar to the first one.
1844-1860 Unraveling Sectionalism within the US - this period saw the rise in the North vs. South divide over slave states and non-slave states, and tensions revolving around it
1860-1865 Crisis American Civil War
1865-1886 High Gilded Age - Rapid economic growth in the United States through industrialization. Creation of new institutions in the form of industrial titans like Standard Oil.
1886-1908 Awakening The Third Great Awakening, similar to the first two. Also, the progressive era, which saw an activist movement to address some of problems that come with monopolies like Standard Oil, urbanization, and corruption.
1908-1929 Unravelling This period saw WWI, Prohibition, and the Roaring Twenties. During this time, there was an increasing social conflict between liberal urban and conservative rural areas, specifically about morals and what should and shouldn’t be legal (eg. Scopes trial), the rise of the KKK, and is a hallmark of consumerism, individualism, and greed.
1929-1946 Crisis The Great Depression and WWII. The New Deal destroyed many existing institutions, and replaced them with new ones. The aftermath of WWII created new global institutions, in the form of the UN, and started the American world order.
1946-1964 High The Golden Age of Capitalism / post-war economic boom
1964-1984 Awakening During this time, we saw two different types of awakening. The counterculture movement of the 1960s saw activism against the Vietnam war and the Civil Rights movement, as well as an increase in spirituality and self-awareness, which is typically associated with the youth during this period (i.e. “hippies”). During the same time, there was another religious revival - The Fourth Great Awakening.
1984-2008 Unravelling This period saw an increase of the polarization on cultural issues in America, specifically with abortion, gun control, drugs, and gay rights, between conservatives and liberals, starting with the election of Ronald Reagan. The polarization was also very heavily influenced by geography, with liberals tending to live on the coasts and big cities, and conservatives everywhere else. The polarization made it increasingly difficult for congress to enact any big changes.
2008 to somewhere between 2020 and 2030 Crisis This period started with the financial crisis, as well as the aftermath of 9/11 and the War on Terror. Add on the pandemic, and the fallout from it, and we’d likely see another mass destruction of old institutions and creation of new ones.
2020-2030 to 2040-2050 High ???
2040-2050 to 2070-2080 Awakening A Fifth Great Awakening?

The Changing Hands of World Powers
There’s also another interesting theory in the field of international relations that’s interesting and probably applicable here - the Long Cycle Theory. It basically states that international world orders and the title of the most powerful nation, is challenged every 70 to 100 years - the approximate maximum lifespan of an average human life, leading to some sort of global conflict and potentially a change in the world order as a result.
Cycles in World Leadership
The United States has survived as the World Leader for the 20th century from the threat of the Soviet Union challenging the world order. This time, it’s becoming increasingly clear that China has become a new challenger to the American world order.
Long Term Economic Cycles
Ray Dalio is famous for this being a central part of his economic thesis - about long term debt cycles, and the fact that we’re near the end of one. The summary of this idea is that the economy goes through short term and long term debt cycles. Short term debt cycles are the regular occurring business cycles you usually see once every decade, usually caused by overspending. The long term debt cycle, however, is when an entire economy becomes overleveraged, and it becomes harder and harder for a central bank to stimulate the economy. A hallmark of this happening is when interest rates hit near 0%, and they are forced to perform quantitative easing to stimulate the economy; the last time the economy’s seen anything similar to this was the Great Depression - this is called a liquidity trap. The period following this liquidity trap was an economic deleveraging, typically associated with civil unrest, revolutions, wars, and asset prices plummeting. The US economy has been seeing this since 2008 and has never been able to successfully fully deleverage the economy yet.
Another long term economic cycle theory that’s somewhat popular is the Kondratiev wave, although this field of economics is not generally accepted by most economists. The idea is that the economy goes through long-term economic cycles, lasting between 45 to 60 years, of periods of rapid economic and stock market growth fueled by technological innovations, followed by a period of stagnation.
Kondratiev Waves
Currently, we’re late in the wave created by the introduction of Information Technology, which started in the late 1970s. I’ve previously talked about this, but basically we’re near the end of this cycle as well.
So, it sounds like we’re near the end of many cycles; the generational cycle of the Strauss–Howe generational theory, the long term debt cycle, the Kondratiev Wave cycle, and possibly the beginning of the end of the Long Cycle in international relations as China begins to contend with the United States for global influence. In all of these cycles, the conclusion is clear - chaos, economic hardship, geopolitical tensions and crises. Let’s take a closer look at the stock market last time all of these cycles ended - the 1930s.
Retail Investors in the 1920s
There’s not that much solid quantitative data about retail investors and their impact on the stock market; only qualitative and anecdotal data. However, one thing is clear - retail investors pumped the market in 1929 beyond what fundamentals warranted, despite evidence of a weakening economy due to stagnating consumer spending and distress by farmers due to overproduction of wheat, and soon, the Dust Bowl. Why were they pumping stocks so much? Because they falsely believed that stocks only go up. I’ll put some excerpts from this Forbes and this Investopedia article I found talking about this to better illustrate the extent and nature of this pump.
Still there was one big anomaly in the decade preceding, the 1920s, and it remains instructive today. The American people bought stocks in unprecedented fashion. Stocks on the installment plan, stocks via investment clubs, stocks bought with capital rather than income, stocks on margin. It was a big new fad. Nothing like the participation in the market that the nation experienced in the 1920s can be found in previous eras of history.
The permanent denuding of the dollar, the reality of which first became clear in the 1920s, forced savers to find some instrument that would pay them back in the old way, in money that held its value. The choice was made to capture, via stocks, the forthcoming profits of businesses. Here would be money commensurate to what was needed to buy things in the future.
Until the peak in 1929, stock prices went up by nearly 10 times. In the 1920s, investing in the stock market became somewhat of a national pastime for those who could afford it and even those who could not—the latter borrowed from stockbrokers to finance their investments.
People were not buying stocks on fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money. In mid-1929, the economy stumbled due to excess production in many industries, creating an oversupply. Essentially, companies were able to acquire money cheaply due to high share prices and invest in their own production with the requisite optimism.
This all sounds pretty familiar to what's going on in the stock market today; as I previously mentioned, retail investors are pouring money in at unprecedented levels. Why is this happening now, about 90 years since the last time every retail investor started pouring money in? It's the same as the reasoning behind most of the other cycles I've mentioned above - the vast majority of people who previously experienced this and would have been alive to remember the 1920s have passed away by now. With an absence of people alive to have this mistake in living memory, humanity is bound to repeat the same mistakes, ignoring the warnings from our ancestors who are no longer with us, and repeat the cycle.
There's one pair of billionaires who are old enough to remember the aftermath of the the stock market pump that led towards the 1929 crash - Warren Buffett and Charlie Munger. Warren would have been born right after the crash and Charlie would have been 5. Both of them entered the finance industry while the stock market was still recovering from it, and still below the 1929 highs. For anyone who watched him talk at the annual shareholder meeting, he spent a few hours talking about a similar story - one of the highs and lows of American history, with a bullish perspective. He wouldn't have spent hours talking about the 1929 crash and the fact that it took multiple decades to recover if this wasn't relevant. This is supported by the fact that he bought virtually nothing since the crash, and has been gradually selling a large portion of this publicly traded equities - first his airlines and now banks. Although he believes that we'll eventually recover (i.e. "Never bet against American", in the long run), it's clear from his actions that he sees parallels of this from the stock market he grew up in the shadow of in his childhood and doesn't want to bet for America in the short term.
EDIT - Someone pointed out this article by Ray Dalio: https://www.linkedin.com/pulse/big-cycles-over-last-500-years-ray-dalio/ which basically talks about something very similar. I actually didn't even know about the existence of this article and actually wrote this before this got published, but looks like we both came to the same conclusion, and this is a shorter version of Ray Dalio's article. Recommend everyone check this out if they want a more in-depth version of this DD with more data and this this post as a tldr of it.
Weekly SPY Watch Updates
This section has absolutely nothing to do with anything I talked about above, but people apparently care about trades I'm making and what my magic markers say will happen in the stock market this week, so I'll have this section of this post dedicated to that and my updates.
I've since sold, with the exception of some VIX calls, all my short positions on SPY, and currently doing some individual plays - currently holding GSX puts and short (sold) HTZ calls, among some other smaller plays. With respect to SPY, it looks like we'll be in a new channel - this time 293-300; not sure how long we'll be staying in this channel for, but I'll be playing it by either selling short-dated iron condors or buying calls / puts when it reaches one end of the channel. While magic markers are telling me we're going to be bullish medium term, and go through 300 to new ATHs, meaning I should buy calls, I don't want to go against my own fundamentals in principle by the fact that the stock market is clearly already overvalued.
5/25 3PM - /ES at 299, might open near the top of the channel. Will need to see how we open to decide if I'm going to enter a position on SPY again.
5/25 10PM - Looks we're going to be trading on the upper half the of channel on Tuesday, with a trading range of 300-297. Might look to pick up some short-dated puts to play the channel if technicals look right on open.
5/26 Noon - Got a small amount of 5/29 ATM puts to play the channel. We opened right above the 200MA so I'm relying on this being a fake out, and not very confident about this specific play.
5/26 3:50PM - Looks like 300-302 range is acting like a resistance, heading back down in the 293-300 channel. Bearish intraday (5M, 15M) MACD => EOD dump and open lower in the channel tomorrow. Looking closely at what's going on with China.
- Wednesday (tomorrow): House votes on sanctions related to Chinese concentration camps of Uyghurs
- Thursday: China votes, and very likely passes, amendment to Basic Law in HK for "national security"
- End of Week: Trump promised that he will have a policy response, likely sanctions, for the change in HK's basic law, in addition to possibly revoking HK's special status
5/27 Market Open - Opened at the top of the resistance again, but quickly reversing. Might play out similar to yesterday
5/27 11AM - Going to wait till SPY hits 297 again and then roll my 5/29 puts I got yesterday to continue playing the channel down to 293
5/27 3:50PM - Turns out it was a EOD pump instead of dump. Oversold on 5M and 15M, so probably need to consolidate again tomorrow with a trading range of 297-302 again. Not so sure about this one because there's a solid chance this just breaks through that resistance and goes towards new ATHs. Entered into more 5/29 puts and going to hold overnight, sell if we still have positive momentum going in to open tomorrow. If we don't break 300 again tomorrow, I'm going to assume we're going to new ATHs and buy some IWM calls, hedged with QQQ puts.
5/27 6:30PM - My plan for tomorrow - see if we're actually in a 293-302 channel. There's going to be alot of uncertainty coming from China this week. If we're still above 302 by 10AM I'll probably transition towards bull positions. Most tech / strong companies are priced near their ATHs, and all the momentum coming into SPY is now coming from all the stocks that were really hit the past few months. Looking at CCL, JPM, and BA, all of whom are going towards a 1W MACD crossover
5/27 11PM - Still above this channel. Again, if we open above 302 and don't quickly reverse then clearly 300 wasn't that much of a resistance and we're headed to ATHs - next stop is 313, followed by 340. To my bears out there - the 1W MACD has already crossed over, meaning we're not going to see a rug pull any time soon, with the exception of some dramatic event happening in China. I'm not taking any medium-term bearish positions and currently just trying to play this channel, although the bullish momentum is stronger than I expected and not consolidating that much on 300 (yet). Watch out for August - that's when most medical experts agree a second lockdown is going to become evident and this bubble will pop; I still stand by my long term thesis. However, in the short term, don't trade against the trend and profit off the bubble.
5/28 9:40AM - I was wrong again. Going to sell those puts when SPY hits 302 at a small loss. We're headed to ATH
5/28 11:40AM - Overbought on 15M and 1H RSI, should see more consolidation today, and hopefully hit my 302 target to sell later today.
5/28 1PM - Stopped out of my small SPY puts, rolled that out into bullish positions on JPM, BA, and CCL. Will probably be doing SPY plays for a while, since all the technicals are pointing to a bullish rally, but only way for that to continue is for beaten down stocks like the ones mentioned, and found in IWM, to skyrocket the next few weeks. Also probably going to stop updating this thread as much.
5/28 5PM - 1H MACD is about to cross, and SPY got near 302 today, We've clearly broken the previous resistance area of 300-302, alot earlier than I was expecting; today was just a day for consolidation because RSI was overbought, now it has room to grow. MACD also acts as a resistance and typically will bounce back instead of cross if there's still bullish sentiment. I believe this is the case now, and we will also see SPY bounce up from the previous 300-302 region of resistance with it becoming support; the next level of resistance will be 313 on SPY, which is where we'll be headed soon. Haven't been holding any medium-term short positions, and am currently net long on financials and transports, which will very likely rally disproportionally if SPY continues to go up. Very well aware that this is a bubble, but I called the top wrong and trading against the trend will just lose you money.
5/28 7PM - Tomorrow will be an interesting day, Trump announced a news conference, with an unspecified time, where he will talk about actions he will do to China, potentially sanctions. There was a very small dip in the market on this news but nothing much else has happened yet. Depending on what the actions are, could be a red day tomorrow and break 302. I'll play this out intraday if we don't open low tomorrow
5/29 11AM - SPY is re-testing the 300-302 area, this time as support. Everything really depends on whatever Trump announces today regarding retaliation about China. Hard to say what can happen. If it's something extreme, like sanctions or tariffs, this could lead to another crash. Anything else would mean this SPY immediately bounces back from this support area.
5/29 1PM - Trump conference scheduled at 2PM. Will watch stock market reaction and trade with sentiment from it. If retaliation is bad enough to drop below 300, could be the rug pull all the bears have been waiting for.
5/29 2PM - Picked up some 302-300 debit spreads coming into the news conference, planning on holding this for an hour and selling by EOD
5/29 3PM - Sold puts during the speech and flipped to 304-310 calls. Looks like this wasn't enough to break through support. Going to hold these overnight, momentum looks to be turning bullish now that there's no longer any uncertainty about China, and actions are unlikely to provoke a Chinese retaliation.
5/29 4PM - Sold my short-dated calls. Coming into the weekend, it looks like next week will continue to be bullish, with 1D MACD convergence continuing, as well as the lack of any resistance until 313.
Week of Jun 1 - Jun 5 - Looking at SPY hitting 213 by end of week
submitted by ASoftEngStudent to wallstreetbets [link] [comments]

Helpful Beginner ToS Interface Tips for Setting Up Charts and Indicators

Was chiming in to help with this post and I received a pile of DM's and questions, thought I'd address this to the overall subreddit as I'm sure this can help others.
This isn't a fully perfect build yet in my opinion, but I'd like to give a shout out to the many members of the Silicon Valley Options Group that helped put this together.
Alrighty then. Here's my 4 face chart set up.

https://imgur.com/gallery/HU0gNNh
~ ~ ~ ~
Meta: I've set up 4 time frames to gauge price action, going from a 5 year to a 1 year, 3 month and a 15 minute chart. Here's the underlying I'm most familiar with (SLV). We go back... 12 years. I just know how silver moves like the back of my hand since my broke college days where I first started with a 100oz bar at $13/oz.

5 year
5 year chart here. Imp. Vol to determine if I should take debit vs credit positions. In general, 20-30 vol is just perfect juiciness without insanity. However, I think higher vol is right around the corner. MACD of course. Lots of moving averages on the chart itself, 500 MA, 200 and shorter durations, there's a custom trailing indicator in the dashed gray which I use for my stops. I've evolved to really favor selling for premium because you don't have to be right to make money. Like many of us when we start, I went HAM with single-legged debit positions and of course, we size it incorrectly relative to our portfolio and risk too much for way too little return—and get nuked. I'm not wrong, the market is wrong! Yea, I got sick of losing money. Selling premium instead is way more forgiving. Like many of us, we start selling credit via put-writes/covered calls or cash secured puts (lord have mercy on you if you sell naked), then you can evolve to do wheel of fortune combo of put-writes and cash secured puts. Later, you get more capital efficient via credit spreads and such. Generally, my short position usually has an 80% probability of expiring OTM or better. I've finally humbled myself to be less reckless and pick up wins of singles and doubles instead of swinging for the fences all the time. Like Tom Sosnoff teaches us, trade small, trade often. That's helped me lower my losses tremendously, rack up way more experience in the process and move with the markets much better. Plus, I'm doing really short DTE these days, weeklies and maybe 2 weeks if I'm more comfortable. In this market, I think it's insane to hold or sell too far out.

1 year
1 year here. I'm not too thrilled with PercentR, might phase out. I'm playing with other indicators in my sandbox account to figure out a better indicator for this duration. Volume + MACD to get a better gauge of action.

3 month
I'm mainly in this duration the most. For silver, the red dashed line is the support and resistance of the current channel that's been verified many times in the past. OnBalanceVolume is life changing, after MACD, it's probably my favorite indicator. It replaced RSI which just gave me too much vague information. I use to pair this with volume profile/market profile (MonkeyBars in ToS) but it just made everything too busy, I do like to see where people made their moves though. The dotted lines of green, magenta and red (god, I would hate to trade if I'm colorblind), are Person's Pivots. He's spoken at the SVOG group on Seasonality and I've been hooked ever since. ATR is really helpful. It helps me verify if the market maker's 1 sigma move is correct or not. Generally, if ATR is less than 1 sigma, I'm pretty safe when selling premium. This is a key metric for building a margin of safety as an options seller.

15 min
15 minute chart, I don't look at this too much unless I'm opening or closing a poition. It generally helps me figure out intraday entries/exits. This use to have less vol and be more stable, but I think with Covid and the huge explosion of retail trading (thanks to RobinHood amateurs), it's gotten a lot choppier as people are playing on rumors and all kinds of weird stuff or probably looking up /wallstreetbets or some shit. I need to figure out what else to add besides MACD that my other durations don't provide, still figuring it out. Person's pivots really helps here. (Green is normal, magenta is an upper bound value and magenta is sort of an abnormally high level. It's based on Fibonacci retracements (I think default is 5 lines? or 7? Forgot. John Person's has a proprietary formula to make it 3 which helps.) I don't really day trade cause I still work full-time but I'm sure this set up could be expanded to do well with that. MonkeyBars (volume/market profile) would be helpful here. After April, I like the idea of no overnight risk.

~ ~ ~ ~
Hope that helps. If you like this and want to take this interface for a spin, feel free to message me and I'm happy to share the link. Please save your current settings/studies/etc. in case you prefer your prior calibration.
Kick ass out there and sell volatility like a mofo.
Remember, skylines are built by firms that sell insurance. The best time to sell volatility is after a storm. Go do your thing folks.
submitted by slamdunktiger86 to options [link] [comments]

GBPUSD SUSTAINS ABOVE 1.32 LEVEL, INVESTOR EYES ON BAILEY'S SPEECH

GBPUSD SUSTAINS ABOVE 1.32 LEVEL, INVESTOR EYES ON BAILEY'S SPEECH


After reversing from eight months high of 1.3284 in the previous trading session, GBPUSD is flashing green on Friday, moving in tandem with equity market. Besides, investors are also vigilant ahead of speech by BOE governor, Andrew Bailey's at Jackson Hole Economic Symposium where he is expected to provide cues about future monetary policy for the UK. As of now, the cable is trading 0.43% higher at 1.3242
Talking about the previous trading session, the pair gained positive traction and climbed to the highest level since December 2019 following the decline in the demand for the dollar after the Federal Reserve Chairman Powell’s speech. Fed announced another aggressive strategy to keep the interest rates at lower levels for supporting the American economy amidst coronavirus pandemic. Further, the investors’ sentiment tampered after the American Unemployment Claims increased to 1006K, missing the market expectation of 1 million.
However, the pair failed to hold on to the intraday gains and came under intensive selling pressure due to the broad-based strength in the greenback after the US monthly Pending Home sales statistics came at 5.9% vs market anticipation of 2.5%. Subsequently, the pair ended the trading session at 1.3199, with a marginal depreciation of 0.09%.
Going forward, investors will wait for US monthly Core PCE Price Index, Personal Spending, and Revised UoM Consumer Sentiment data for intraday trading opportunities.
Risk Disclaimer: The vast majority of retail client accounts lose money when trading in CFDs.
submitted by FXView to FXview [link] [comments]

GBPUSD: INVESTORS ON BACKFOOT AHEAD OF UK &US FLASH MANUFACTURING PMI

GBPUSD: INVESTORS ON BACKFOOT AHEAD OF UK &US FLASH MANUFACTURING PMI


GBPUSD is trading flat with a slight negative bias at around 1.2740 level as investors sentiment tampered after the release of downbeat UK statistics in the early Asian hours. The Gfk Consumer Confidence data came out at -27 vs -25 forecasted. Further, investors’ refrain from placing aggressive bets ahead of the Flash Manufacturing PMI from the American and British economy. As of now, the cable is trading at 1.2733, with a marginal loss of 0.05%.
Besides, investors are concerned due to ongoing tensions between London and Brussels about their future trade relationships. EU’s Chief negotiator Barnier stated that they are still far away in negotiations after the fifth round of talks with the UK. He added that significant divergences remain between both the sides on the key issues related to fisheries, justice and level playing field.
Talking about the previous trading session, the pair initially fell to an intraday low of 1.2673 due to an increase in the safe-haven bids for the greenback amidst an escalation in Sino-US tensions. America asked China to close the consulate in Houston, while in retaliation, the latter was also considering the closure of the US consulate in Wuhan.
However, the pair managed to erase all the intraday losses following the weakness in the US Dollar. This was after the US Unemployment Claims surged to 1416K, more than anticipated 1300K and Consumer Confidence came at -15 missing the market expectation of -12. Subsequently, the pair ended the trading session at 1.2738, up by 0.20%.
Going forward, investors will wait for US Flash Services PMI and New Home Sales statistics for intraday trading opportunities.
Risk Disclaimer: The vast majority of retail client accounts lose money when trading in CFDs.
submitted by FXView to FXview [link] [comments]

GBPUSD TRADES FLAT AMIDST US-SINO TENSIONS, EYES ON US MACRO DATA

GBPUSD TRADES FLAT AMIDST US-SINO TENSIONS, EYES ON US MACRO DATA


After witnessing a volatile Wednesday, GBPUSD is trading flat with mild positive bias as investors refrain from placing any aggressive bets amidst escalation in Sino-US tensions. America has asked China to close the consulate in Houston, while in retaliation, the latter is also considering the closure of the US consulate in Wuhan. As of now, the cable is trading at 1.2733, up by 0.02%.
Talking about the previous trading session, initially, the pound dived to an intraday low of 1.2643 due to the discouraging headlines related to the fifth round of the trade talks between London and Brussels. PM Boris Johnson commented that significant divergences remain between both the parties on future trade relationships, thereby raising the chances that there will be no deal by the end of the year.
However, the pair managed to erase all intraday losses owing to the weakness in the US dollar after the release of downbeat macro-economic statistics from the American economy. The US Existing Home Sales came at 4.72M, missing the market expectations of 4.77M, and monthly HPI came at -0.3% vs 0.3%. Subsequently, the pair ended the trading session at 1.2731, with marginal gains of 0.02%.
Going forward, investors will wait for UK MPC Member Haskel speech, US Unemployment Claims, and monthly CB Leading Index for intraday trading opportunities.
Risk Disclaimer: The vast majority of retail client accounts lose money when trading in CFDs.
submitted by FXView to FXview [link] [comments]

GBPUSD TICKS HIGHER FOLLOWING UPBEAT UK MACRO STATS

GBPUSD TICKS HIGHER FOLLOWING UPBEAT UK MACRO STATS


After witnessing a massive plunge of nearly 115 pips in the previous trading session, GBPUSD ticks higher on Tuesday. This is in wake of the release of better than expected UK yearly BRC retail Sales Monitor in the early Asian hours. The data came at 10.9% vs 2.5% expected. As of now, the cable is trading marginally higher by 0.04% at 1.2555 level.
On Monday, initially, the pair surged to an intraday high of 1.2665 on hopes of coronavirus vaccine, courtesy to the successful completion of the clinical trials by the Russia’s Gamalei Institute of Epidemiology and Microbiology.
However, the pound erased all the intraday gains as greenback attracted the safe harbor bids amidst a resurgence in the US-China tensions. US Secretary of State Michael Pompeo denied Beijing’s territorial claim in the South China Sea.
Besides, investors’ sentiment dampened after the BOE Governor Andrew Bailey reiterated that they have a long way to go to stabilize the UK economy amidst coronavirus pandemic. He also showed concerned about the jobs in Britain. Subsequently, the pair concluded the trading session at 1.2551 with a 0.54% depreciation.
Going forward, investors will wait for UK monthly GDP and US core CPI data for intraday trading opportunities.
Risk Disclaimer: The vast majority of retail client accounts lose money when trading in CFDs.
submitted by FXView to FXview [link] [comments]

Wall Street Week Ahead for the trading week beginning August 26th, 2019

Good Saturday morning to all of you here on stocks. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.
Here is everything you need to know to get you ready for the trading week beginning August 26th, 2019.

Week ahead: Stocks could be rocky on trade, economy fears, as August breaks low volatility streak - (Source)

The final week of August — the bittersweet end of summer for many— could be highly volatile, as markets fret over the economy and the latest developments in trade wars.
President Donald Trump joins the G-7 leaders in France over the weekend, and markets will be watching to see if the meeting exposes new fault lines in the shaky relations among a once fairly congenial leadership group that fought the Great Recession together. Trump is expected to discuss the U.S. economy and highlight the U.S. pro-jobs, pro-growth agenda, under his leadership.
The U.S. trade war with China escalated sharply in the past week, with a new round of tariffs from China on U.S. goods announced Friday and new threats from Trump, who “ordered” American companies to find alternatives to China. That immediately triggered speculation that the trade war will be extended and more contentious, and the U.S. economy risks falling into recession.
After the close Friday, Trump retaliated against China’s tariffs by raising existing tariffs on $250 billion in Chinese goods to 30% from 25%, as of Oct. 1. In a tweet, he also said he was raising new tariffs on $300 billion in Chinese goods that have not yet gone into effect to 15% from 10%.
Friday’s trading was volatile, and stocks fell by about 2.5%, erasing what would have been a second positive week for the market. Treasury yields, which move opposite price, continued to go lower amid worries about the economy and fears the Fed will not act aggressively enough to head off a recession.
Stocks have been volatile, and the S&P 500 is down about 4.5% in the month of August.
Michael Arone, State Street Advisors chief investment strategist said the first seven months of the year were more certain for investors in terms of their expectations for Fed rate cuts and a possible trade deal. But the trade tensions have worsened, and the trade war could escalate even further.
Fed Chairman Jerome Powell spoke at Jackson Hole Friday morning, but while he left the door open for rate cuts, he did not explicitly promise rate cuts.
“The Fed has become a lot less certain. Until we get more clarity, you’re likely to see this volatility, and stocks will trade sideways,” Arone said. Even though corporate earnings weakened, “investors took a big leap of faith in the first seven months of the year, expecting both a trade deal and monetary policy easing.”
The escalation of the trade war makes a deal unlikely anytime soon. This, however, did drive market expectations for rate cuts higher Friday afternoon, and the market was expecting three more cuts this year.
Trump tied his feuds with China and the Fed together Friday, when he tweeted that the Fed is not helping with easier rate policy, along with a question about “who is the bigger enemy” — China President Xi Jinping or Fed Chairman Jerome Powell.
“I think the Fed is in uncharted territory, and I continue to have empathy for Chairman Powell. I think markets want faster and more aggressive policy. He’s dealing with challenges the Fed has never had,” said Arone.
”[Powell] is literally walking a tight rope. He has the president who is daily bashing him,” he said. “Bond markets are demanding a much greater number of rate cuts, and he’s got geopolitical challenges, whether it’s Brexit or trade. He’s also got dissension among Fed voting members. That’s a lot to balance.”
There is some important data in the coming week, including durable goods Monday and personal spending and consumption data Friday, which also includes the PCE deflator, the Fed’s preferred inflation indicator.
“The data will give us some indications on business spending. Durable goods has capital expenditure orders. It looks look consumer confidence will come out [Tuesday] as well,” Arone said. Business spending has been taking a hit from the trade wars, and economists are concerned it will continue to weaken, ultimately leading to weakness in the consumer economy.
The week ahead could see some swings ahead of the long Labor Day Holiday weekend. “Given high absentees and low volumes, my guess is it’s going to add to volatility,” said Arone.
Frank Cappelleri, Nomura executive director, said he also expects volatility, and the S&P could test the outer limits of its recent range.
Of the 17 trading days this month, nine of them saw absolute 1% moves in the S&P 500. The last time that occurred was in December, when there were 10 days with 1% moves, according to Cappelleri. The most in one month was February, 2018 when there were 12. Contrast that to the entire year of 2017, when there were just eight.
Friday’s action was volatile, and the S&P 500 was down as much as 3%.
“This is the third-biggest decline we’ve had this month. Each of them started within 10 points of each other, near the top of the range,” said Cappelleri. The top of the range is 2,943, its Aug. 13 high, and the bottom is 2,820, near the Aug. 5 low.
“We’re obviously still in a trading range that has been characterized by sharp moves and acute turns, so I think when we had that initial drop on Aug. 5, the question is where is it going to stop,” he said, adding traders are watching that Aug. 5 level to see if it will act as a floor.

This past week saw the following moves in the S&P:

(CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)

Major Indices for this past week:

(CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!)

Major Futures Markets as of Friday's close:

(CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!)

Economic Calendar for the Week Ahead:

(CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!)

Sector Performance WTD, MTD, YTD:

(CLICK HERE FOR FRIDAY'S PERFORMANCE!)
(CLICK HERE FOR THE WEEK-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE MONTH-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 3-MONTH PERFORMANCE!)
(CLICK HERE FOR THE YEAR-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 52-WEEK PERFORMANCE!)

Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:

(CLICK HERE FOR THE CHART!)

S&P Sectors for the Past Week:

(CLICK HERE FOR THE CHART!)

Major Indices Pullback/Correction Levels as of Friday's close:

(CLICK HERE FOR THE CHART!

Major Indices Rally Levels as of Friday's close:

(CLICK HERE FOR THE CHART!)

Most Anticipated Earnings Releases for this week:

(CLICK HERE FOR THE CHART!)

Here are the upcoming IPO's for this week:

([CLICK HERE FOR THE CHART!]())
(NONE SCHEDULED FOR THIS WEEK.)

Friday's Stock Analyst Upgrades & Downgrades:

(CLICK HERE FOR THE CHART LINK #1!)
(CLICK HERE FOR THE CHART LINK #2!)

Second Half August Trading: Historically Weak Too

Following three straight days of gains, the market has recovered a sizable portion of its losses from earlier in the month. Losses earlier in the month and gains over the past three days (prior to today) have tracked August’s typical trading pattern for over the last 21-years quite closely. The magnitude of the moves this year has been larger than average, but the pattern has been tracked.
Due to the magnitude of this year’s moves, August’s performance over the past 21-years has been plotted on the left vertical axis in the chart above and 2019 is plotted on the right. From right around mid-month or now through the end of August, the historical trend has been weaker. DJIA, S&P 500, NASDAQ, Russell 1000 and 2000 have all averaged a loss in August from 1998 to 2018 and they are on track to repeat this year.
(CLICK HERE FOR THE CHART!)

Is a Small-Cap Labor Day Rally Coming Soon

In the below chart, forty years of daily data for the Russell 2000 index of smaller companies are divided by the Russell 1000 index of largest companies, and then compressed into a single year to show an idealized yearly pattern. When the graph is descending, large-cap companies are outperforming small-cap companies; when the graph is rising, smaller companies are moving up faster than their larger brethren. The most prominent period of outperformance generally begins in mid-December and lasts until late-February or early March with a surge in January. This period of outperformance by small-caps is known as the “January Effect” in the annual Stock Trader’s Almanac.
(CLICK HERE FOR THE CHART!)
In recent years, another sizable move is quite evident just before Labor Day. One possible explanation for this move is individual investors begin to return to work after summertime vacations and are searching for “bargain” stocks. In a typical year, small-caps would have been lagging and could represent an opportunity relative to other large-cap possibilities. As of Friday’s close (August 16, 2019), Russell 2000 is up 10.8% compared to the Russell 1000 being up 15.5% year-to-date. Lagging small-caps and resilient U.S. consumers could be the ideal setup for a repeat of this pattern this year. However, the small-cap advantage does historically wane around mid-September.

September Almanac: No Respite in Pre-Election Years

The start of business year, end of summer vacations, and back to school made September a leading barometer month in first 60 years of 20th century, now portfolio managers back after Labor Day tend to clean house Since 1950, September is the worst performing month of the year for DJIA, S&P 500, NASDAQ (since 1971) and Russell 1000 (since 1979). Sizable gains in September 2012, 2013 and 2017 have lifted Russell 2000 to second worst (since 1979). September was creamed four years straight from 1999-2002 after four solid years from 1995-1998 during the dot.com bubble madness. September gets no respite from positive pre-election year forces.
(CLICK HERE FOR THE CHART!)
Although the month used to open strong, S&P 500 has declined eight times in the last eleven years on the first trading day. As tans begin to fade and the new school year begins, fund managers tend to sell underperforming positions as the end of the third quarter approaches, causing some nasty selloffs near month-end over the years. Recent substantial declines occurred following the terrorist attacks in 2001 (DJIA: –11.1%), 2002 (DJIA –12.4%), the collapse of Lehman Brothers in 2008 (DJIA: –6.0%) and U.S. debt ceiling debacle in 2011 (DJIA –6.0%). However, September is improving with S&P 500 advancing in ten of the last 15 Septembers and DJIA climbing in nine.

Leading Indicators Signal Growth Ahead

U.S. leading indicators rebounded in July, a good sign for the durability of the expansion.
The Conference Board’s Leading Economic Index (LEI) rose 0.5% month over month, the biggest gain since September 2018, and above consensus expectations for a 0.3% increase. As shown in the LPL Chart of the Day, Leading Indicators Slowing But Growing, the LEI climbed 1.6% year over year.
(CLICK HERE FOR THE CHART!)
The LEI, which we include as one of the “Five Forecasters” of our Recession Watch Dashboard, has yet to turn negative this cycle. The index has fallen negative year over year before all nine recessions since 1955.
“Some investors have pointed out slowing LEI growth as a reason for caution,” said LPL Financial Chief Investment Strategist John Lynch. “However, the LEI is signaling moderate U.S. economic growth ahead, with no signs of an imminent recession.”
The LEI is calculated from 10 individual leading data sets, including weekly jobless claims, building permits, and stock prices. This year, the majority of LEI components have boosted month-over-month growth in the index, but more internationally exposed data sets have turned into net drags.
In July, 6 of 10 components rose month over month, but four components—average hours worked, manufacturers’ new orders, new orders for nondefense capital spending, and interest rate spreads—fell month over month. Historically, breadth in LEI components has deteriorated further before a recession began. In contrast, at the end of each of the past six economic cycles, more than half of the LEI components were in decline.
While evidence of slowing growth in leading indicators is disappointing, we are encouraged by what we see outside of manufacturing. Global manufacturing has been the sector hardest hit by prolonged trade tensions and weakened demand, and we don’t expect to see much improvement until a U.S.-China trade resolution is reached. Even then, a recovery in manufacturing may take some time.

Crude Oil's Descending Triangle

Earlier this week, crude oil was trading well over 2% higher than last Friday's close. Over the past few sessions, though, oil has given up all of those gains. The catalyst for today's declines are the Chinese retaliatory tariffs on US crude which are expected to dampen demand. This week's negative reversal comes as the commodity ran into multiple points of resistance. For starters, the rally began to stall out mid-week when it met the converging 200 and 50-day moving averages. This also coincided with a downtrend that traces itself all the way back to the highs from late last year. In fact, crude is down around 30% from these previous highs.
Overall, the technical picture for crude oil is not in a great place as the chart is forming a descending triangle pattern. Despite the big gains at the beginning of 2019, over the past few months, crude has been making consistent lower highs and lower lows. Given this most recent failure to retake the moving averages and break out of the downtrend, the next major support level to watch is around $50 which is a level that has held up at multiple times in the past few months. This support also draws back to late last year prior to the collapse in December.
(CLICK HERE FOR THE CHART!)

Yield Curves: Another Record Streak Bites the Dust

After the 3-month vs 10-year US Treasury yield curve first inverted earlier this year, the market has shifted its focus to the 2-year vs 10-year part of the curve which had yet to reach inverted levels. That was, until yesterday. While the 10s2s curve flirted with inverted territory for the last few days on an intraday basis, Thursday was the first time in more than a decade that the closing yield on the two-year US Treasury was above the yield on the 10-year. And with another closely watched part of the curve moving into inverted levels, recession fears increased.
(CLICK HERE FOR THE CHART!)
As the chart above illustrates, it has been a while since the 10s2s curve was inverted. In fact, the streak that just ended was the longest on record going back to 1977, and it wasn't even close. Going back to 1977, there have only been three prior streaks where the 10s2s curve was inverted for more than 1,000 days, and never before had the curve been positively sloped for more than 2,000 days. The current streak, though? 3,054 days. It was fun while it lasted!
(CLICK HERE FOR THE CHART!)

Adapt or Die

A common characteristic of most investors and traders is to always be on the lookout for patterns and connections between various asset classes. Whenever one correlated asset confirms the move in another it adds a layer of confidence to an investor's thesis. One long-held example is the Dow Transports as a leading or coincident indicator for the broader market. For decades now, many investors have followed the transports for confirmation of the broader market moves. If the transports — which move all of the physical goods in the economy — rally, it suggests that the broader market will be strong, while periods when the transports start to roll over are read as a signal that there's an underlying weakness in the economy.
As the US economy has become more service and digital-oriented in nature, there has been a valid argument made that the transports have lost some of their importance as an indicator of the broader economy. Along these lines, we have suggested that rather than transports, semiconductors may represent this century's 'transports' as they are a part of just about everything in this digital age. Whether you agree with this or not isn't important, but the important takeaway is that just because two asset classes have been highly correlated in the past doesn't mean that they will remain that way in the future. It's one thing to recognize a correlation between two asset classes, but it's much more important to understand why they are correlated and be on the lookout for factors that may change the status quo in the future.
One example of a radical change in a relationship between two asset classes is the interaction between the relative strength of growth and value stocks versus the slope of the yield curve. From 2002 through 2011, the two were closely correlated. As the curve flattened in the early part of this century, growth stocks underperformed value by a wide margin (falling blue line). Then in mid-2007, as the curve steepened and came out from inverted territory, growth stocks started to rip higher relative to value. Beginning in 2009, though, the curve stopped steepening and the relative strength of growth relative to value stalled out. The two series were so closely joined at the hip during this ten-year stretch that the correlation coefficient between the two was +0.82, which is indicative of two series moving in lockstep with each other.
(CLICK HERE FOR THE CHART!)
If the paths of the yield curve and the relative strength of growth versus value couldn't be separated from 2002 through 2011, the relationship soured in 2012 when the two came down with a case of the ten-year itch. At that point, they couldn't separate fast enough. The chart below shows the same two series from the start of 2012 through the present. Now, when one goes up the other goes down and vice versa, as the paths are nearly exact opposites. In fact, in the nearly eight years since 2012, the correlation between the two is -0.90.
(CLICK HERE FOR THE CHART!)
In the chart below we have shown the two series over the entire time period spanning 2002 through 2019. The non-shaded area represents the period covered in the first chart, while the shaded area covers the second period. Right around the time where the shaded period starts is when the positive correlation turned on a dime, and beginning in 2013 when the curve started to flatten, investors who were still hanging on to the idea that a flatter yield curve was a green light for value stocks, saw what turned out to be an extended period of misery relative to the performance of growth stocks. In the words of Intel Founder Andy Grove, "Adapt or Die."
(CLICK HERE FOR THE CHART!)

Nasdaq 100 to S&P 500 Ratio

Below is a chart of the Nasdaq 100 going back to 1990. While it took 15+ years for the index to make a new all-time closing high following its March 2000 peak, the index is currently 65% above those March 2000 highs.
(CLICK HERE FOR THE CHART!)
Below is a ratio chart of the Nasdaq 100's price versus the S&P 500's price since 1990. The ratio started well below 1 in early 1990 but quickly overtook the S&P in price by the mid-90s. As you can see, the ratio spiked dramatically above 3 during the peak of the Dot Com bubble in late 1999. The Nasdaq 100 then gave up much of that outperformance versus the S&P 500 over a 2-3 year period where the ratio got all the way back down to 1, but since then it has been steadily trending higher to its current level of 2.65. While it went through a bubble and a burst over a 5-year period, the Nasdaq has been outperforming the S&P 500 for a long time now.
(CLICK HERE FOR THE CHART!)

STOCK MARKET VIDEO: Stock Market Analysis Video for Week Ending August 23rd, 2019

([CLICK HERE FOR THE YOUTUBE VIDEO!]())
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STOCK MARKET VIDEO: ShadowTrader Video Weekly 08.25.19

([CLICK HERE FOR THE YOUTUBE VIDEO!]())
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Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-
  • $BBY
  • $MOMO
  • $OKTA
  • $DG
  • $VEEV
  • $ULTA
  • $OSIS
  • $BILI
  • $DLTR
  • $TIF
  • $NTNX
  • $ICLK
  • $ADSK
  • $SJM
  • $PLAN
  • $WDAY
  • $ANF
  • $DELL
  • $BURL
  • $FIVE
  • $BWAY
  • $JT
  • $MRVL
  • $BNS
  • $BMO
  • $HPE
  • $COTY
  • $TD
  • $ITRN
  • $HEI
  • $EXPR
  • $JILL
  • $WMWD
  • $MOGU
  • $CAL
  • $GES
  • $CPB
  • $BOX
  • $PVH
  • $BIG
  • $CHS
(CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!)
(CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!)
(CLICK HERE FOR MOST ANTICIPATED EARNINGS RELEASES FOR THE NEXT 5 WEEKS!)
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:

Monday 8.26.19 Before Market Open:

(CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Monday 8.26.19 After Market Close:

(CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 8.27.19 Before Market Open:

(CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 8.27.19 After Market Close:

(CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 8.28.19 Before Market Open:

(CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 8.28.19 After Market Close:

(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Thursday 8.29.19 Before Market Open:

(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Thursday 8.29.19 After Market Close:

(CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Friday 8.30.19 Before Market Open:

(CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Friday 8.30.19 After Market Close:

([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.

Best Buy Co., Inc. $66.21

Best Buy Co., Inc. (BBY) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $0.99 per share on revenue of $9.57 billion and the Earnings Whisper ® number is $1.06 per share. Investor sentiment going into the company's earnings release has 72% expecting an earnings beat The company's guidance was for earnings of $0.95 to $1.00 per share. Consensus estimates are for year-over-year earnings growth of 8.79% with revenue increasing by 2.04%. Short interest has decreased by 10.2% since the company's last earnings release while the stock has drifted lower by 4.1% from its open following the earnings release to be 0.6% above its 200 day moving average of $65.83. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, August 13, 2019 there was some notable buying of 2,003 contracts of the $65.00 put expiring on Friday, December 20, 2019. Option traders are pricing in a 9.6% move on earnings and the stock has averaged a 6.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Momo Inc. $31.83

Momo Inc. (MOMO) is confirmed to report earnings at approximately 4:10 AM ET on Tuesday, August 27, 2019. The consensus earnings estimate is $0.72 per share on revenue of $581.18 million and the Earnings Whisper ® number is $0.76 per share. Investor sentiment going into the company's earnings release has 73% expecting an earnings beat The company's guidance was for revenue of $579.00 million to $593.00 million. Consensus estimates are for year-over-year earnings growth of 22.03% with revenue increasing by 17.58%. Short interest has increased by 2.4% since the company's last earnings release while the stock has drifted higher by 13.4% from its open following the earnings release to be 2.2% below its 200 day moving average of $32.55. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, August 8, 2019 there was some notable buying of 5,000 contracts of the $24.40 put expiring on Friday, October 18, 2019. Option traders are pricing in a 13.7% move on earnings and the stock has averaged a 10.7% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Okta, Inc. $132.46

Okta, Inc. (OKTA) is confirmed to report earnings at approximately 4:05 PM ET on Wednesday, August 28, 2019. The consensus estimate is for a loss of $0.10 per share on revenue of $131.09 million and the Earnings Whisper ® number is ($0.07) per share. Investor sentiment going into the company's earnings release has 84% expecting an earnings beat The company's guidance was for a loss of $0.11 to $0.10 per share on revenue of $130.00 million to $131.00 million. Consensus estimates are for year-over-year earnings growth of 33.33% with revenue increasing by 38.59%. Short interest has increased by 13.6% since the company's last earnings release while the stock has drifted higher by 15.7% from its open following the earnings release to be 39.4% above its 200 day moving average of $95.03. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, August 12, 2019 there was some notable buying of 1,949 contracts of the $135.00 call expiring on Friday, August 30, 2019. Option traders are pricing in a 10.4% move on earnings and the stock has averaged a 9.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Dollar General Corporation $136.99

Dollar General Corporation (DG) is confirmed to report earnings at approximately 6:55 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $1.58 per share on revenue of $6.89 billion and the Earnings Whisper ® number is $1.61 per share. Investor sentiment going into the company's earnings release has 76% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 3.95% with revenue increasing by 6.93%. Short interest has decreased by 28.9% since the company's last earnings release while the stock has drifted higher by 9.8% from its open following the earnings release to be 12.4% above its 200 day moving average of $121.87. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, August 20, 2019 there was some notable buying of 757 contracts of the $149.00 call expiring on Friday, September 6, 2019. Option traders are pricing in a 6.7% move on earnings and the stock has averaged a 6.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Veeva Systems Inc. $158.13

Veeva Systems Inc. (VEEV) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, August 27, 2019. The consensus earnings estimate is $0.49 per share on revenue of $259.26 million and the Earnings Whisper ® number is $0.51 per share. Investor sentiment going into the company's earnings release has 83% expecting an earnings beat The company's guidance was for earnings of $0.48 to $0.49 per share on revenue of $259.00 million to $260.00 million. Consensus estimates are for year-over-year earnings growth of 40.00% with revenue increasing by 23.69%. Short interest has decreased by 34.5% since the company's last earnings release while the stock has drifted higher by 7.1% from its open following the earnings release to be 22.9% above its 200 day moving average of $128.66. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, August 9, 2019 there was some notable buying of 1,273 contracts of the $155.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.3% move on earnings and the stock has averaged a 7.2% move in recent quarters.

(CLICK HERE FOR THE CHART!)

ULTA Beauty $322.10

ULTA Beauty (ULTA) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, August 29, 2019. The consensus earnings estimate is $2.79 per share on revenue of $1.68 billion and the Earnings Whisper ® number is $2.80 per share. Investor sentiment going into the company's earnings release has 83% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 13.41% with revenue increasing by 12.89%. Short interest has increased by 28.5% since the company's last earnings release while the stock has drifted higher by 2.1% from its open following the earnings release to be 1.3% above its 200 day moving average of $318.11. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, August 15, 2019 there was some notable buying of 1,211 contracts of the $330.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 8.2% move on earnings and the stock has averaged a 6.3% move in recent quarters.

(CLICK HERE FOR THE CHART!)

OSI Systems Inc. $100.83

OSI Systems Inc. (OSIS) is confirmed to report earnings at approximately 9:00 AM ET on Monday, August 26, 2019. The consensus earnings estimate is $1.05 per share on revenue of $303.70 million and the Earnings Whisper ® number is $1.11 per share. Investor sentiment going into the company's earnings release has 62% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 2.94% with revenue increasing by 5.70%. Short interest has increased by 13.3% since the company's last earnings release while the stock has drifted higher by 6.1% from its open following the earnings release to be 9.9% above its 200 day moving average of $91.73. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 9.2% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Bilibili Inc. $14.70

Bilibili Inc. (BILI) is confirmed to report earnings at approximately 7:00 PM ET on Monday, August 26, 2019. The consensus estimate is for a loss of $0.12 per share on revenue of $212.73 million and the Earnings Whisper ® number is ($0.14) per share. Investor sentiment going into the company's earnings release has 65% expecting an earnings beat The company's guidance was for revenue of $211.00 million to $217.00 million. Consensus estimates are for earnings to decline year-over-year by 200.00% with revenue increasing by 37.16%. The stock has drifted lower by 11.9% from its open following the earnings release to be 10.7% below its 200 day moving average of $16.47. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, July 23, 2019 there was some notable buying of 6,011 contracts of the $12.50 put expiring on Friday, October 18, 2019. Option traders are pricing in a 20.4% move on earnings and the stock has averaged a 9.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Dollar Tree Stores, Inc. $95.16

Dollar Tree Stores, Inc. (DLTR) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $0.96 per share on revenue of $5.72 billion. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat The company's guidance was for earnings of $0.64 to $0.73 per share. Consensus estimates are for earnings to decline year-over-year by 16.52% with revenue increasing by 3.52%. Short interest has decreased by 16.6% since the company's last earnings release while the stock has drifted lower by 1.1% from its open following the earnings release to be 3.3% below its 200 day moving average of $98.41. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, August 7, 2019 there was some notable buying of 3,596 contracts of the $80.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.9% move on earnings and the stock has averaged a 9.8% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Tiffany & Co. $81.32

Tiffany & Co. (TIF) is confirmed to report earnings at approximately 6:40 AM ET on Wednesday, August 28, 2019. The consensus earnings estimate is $1.05 per share on revenue of $1.07 billion and the Earnings Whisper ® number is $1.06 per share. Investor sentiment going into the company's earnings release has 49% expecting an earnings beat The company's guidance was for earnings of up to $1.16 per share. Consensus estimates are for earnings to decline year-over-year by 10.26% with revenue decreasing by 0.55%. Short interest has increased by 28.9% since the company's last earnings release while the stock has drifted lower by 13.6% from its open following the earnings release to be 13.3% below its 200 day moving average of $93.75. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, August 14, 2019 there was some notable buying of 3,129 contracts of the $80.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.9% move on earnings and the stock has averaged a 7.8% move in recent quarters.

(CLICK HERE FOR THE CHART!)

DISCUSS!

What are you all watching for in this upcoming trading week?
I hope you all have a wonderful weekend and a great trading week ahead stocks.
submitted by bigbear0083 to stocks [link] [comments]

GBPUSD: INVESTORS ON BACKFOOT AMIDST EU-UK TRADE DEAL TENSION

GBPUSD: INVESTORS ON BACKFOOT AMIDST EU-UK TRADE DEAL TENSION


After witnessing two-way price movement on Thursday, GBPUSD is trading flat to negative on Friday owing to the increase in tensions on the trade deal between EU & UK. Both the countries concluded the week’s talk on a sour note. EU’s Chief Negotiator Michel Barnier stated that key disagreements remained unresolved and blamed the UK for showing a lack of respect and engagement. As of now, the pair is trading 0.04% lower at 1.2461.
Talking about the previous trading session, initially, the pair surged to an intraday high of 1.2530, after the increase in hopes for the coronavirus vaccine declined the safe harbour bids for the greenback. The vaccine jointly developed by German Biotec firm BioNTech and the Pfizer had shown promising results in the early stages of the human trial amidst a surge in coronavirus cases worldwide.
However, the pair erased all the intraday gains and concluded the session at 1.2465, with a marginal loss of 0.05%. The US Dollar gained positive traction after the Bureau of Labor Statistics showed that American Job Growth accelerated along with decrease in Unemployment Rate for the month of June. The Non-Farm Employment Change came at 4800K vs 3037K forecasted, which showed the maximum increase since 1939. And, Unemployment Rate came at 11.1%, surpassing the market expectation of 12.4%.
Going forward, the US economic calendar remains muted for the day on Bank holiday in America. Thus, investors will wait for UK Final Services PMI for intraday trading opportunities.
Risk Disclaimer: The vast majority of retail client accounts lose money when trading in CFDs.
submitted by FXView to FXview [link] [comments]

Strategies

Strategies
Attention all wallstreetbets traders! This is u/Networking4Eyes. It's been about a year since I found this place and made the mistake of applying for options with Fidelity and TD Ameritrade. I have done plenty of autistic stuff since then as you may recall.

Selling puts to capitalize on the high implied volatility (IV) in biotech is basically free money.
I was, and still am, determined to find success in the world of options. Maybe not so much to get rich but rather to generate consistent results. The autistic part of me is fascinated by how money can be siphoned from the lightning fast back and forth of meaningless numbers on a screen and the mathematics behind it.
In my various research and readings I have established the following trading strategies which I will put forth here. This will be autistic reeeeee for the experienced but hopefully for anyone in the same place I was it may offer some insight ... or will die in new, or even more likely, be deleted by the mods.
As a disclaimer, whenever I learn something new (even from you folks, so fuck my shit up) I make adjustments to my strategies. Not all strategies work in all markets so while these might do fine in our bull market right who knows what will happen in the future. That's just part of the learning and growth which is often painful. These are just ideas and observations. This is not investment advice.

Strategy A: Earnings Trade
Sell far out of the money (OTM) cash-secured put the day before an earnings release. The goal is to sell the option when the implied volatility (IV) is highest secondary to the upcoming earnings release. IV typically drops after an earnings release allowing profit from the decay in vega (also known as IV crush).
  • Strike: variable and at your discretion. You can look back to see the maximum percentage rise or fall in the share price after an earnings release and aim to have a strike at least that amount if not more (such as -10, 15, or 20% below the current stock price). Choosing a strike closer to the money results in a higher yield but assumes more risk that the stock price might fall below the chosen strike if earnings is poor. Note that past performance does not predict future results so even if past moves have never exceeded 7% something horrible could happen and it could drop 15 or 20% (e.g. a rogue wave).
  • Expiry: choose the closest expiry immediately following the earnings date. Alternatively, chose the expiry following the week of earnings release to yield higher premium due to higher time value (theta). This is especially helpful for earnings later in the week (e.g. Thursday or Friday).
  • Risk: the share price falls lower than your selected strike and the option is exercised at expiry. The acquired shares can be held long term until the share price recovers, sold immediately for a loss, or held to sell covered calls against.
Exit the position once 50%+ profit.
I often get asked about buying downside protection to limit the potential losses, also known as a bull-put credit spread. This is absolutely an option. Personally, I do not do this for two reasons:

https://preview.redd.it/2xhgchrn8u131.png?width=797&format=png&auto=webp&s=373c1abd6450b1ed43a9e15a1922f06e58905f8c
  1. You have to pay premium to buy the put which decreases the maximum potential profit. The profit margin and return on capital of this trade is already meager, often not exceeding 1%.
  2. If you choose a proper strike far enough below the current stock price the trade should be able to tolerate a significant fall in stock price while remaining profitable (such as if you pick a strike 20% below the current price). While of course “rogue waves” happen which do have the potential to completely wipe you out if you are too leveraged; the worse-case scenario is typically that you will be assigned shares that you can then sell covered calls against. Before entering this trade, you should be okay with owning shares of whatever stock you are trading, potentially for the long term until the price recovers.
There are of course other options similar to this such as short iron condors and the like, which I will not cover here.

Short $BYND 7 JUN 75 put at 156% IV allowing for a 27% price drop after earnings and still being fully profitable.
Strategy B: Slow Stochastic Swing Trade
Sell at the money (ATM) or near the money cash-secured put 30 to 45 days out when the slow stochastic cross up from oversold territory (<20). This setup occurs infrequently (perhaps 8 to 12 times per year) and is usually preceded by a significant selloff. Back testing yielded 100% success in profitability over the last two years between $QQQ and $SPY. The goal is to capitalize essentially on a “dead cat bounce” in addition to theta decay.

Potential long entry points identified by the yellow circles as the slow stochastic crosses up from oversold territory. Note that $SPY is setting up to do this again indicating a possible buy signal very soon!
  • Strike: within 1 to 2 strikes of ATM (although alternative strikes can be used at your discretion)
  • Expiry: 30 to 45 days
  • Risk: the share price falls lower than the selected strike at expiry and the option is exercised. The acquired shares can be held until the share price recovers, sold immediately for a loss, or held to sell covered calls against.
Exit the position once 50%+ profit or if the slow stochastic crosses up into overbought territory (>80) and then back down; whichever occurs first.
Strategy C1 & C2: 5-Moving Average (MA) Swing Trade
Buy ATM call when the 5 MA turns upward on the daily chart (or buy ATM put when the 5 MA turns downward on the daily chart) after a run up or run down. Back testing yielded 75% success in profitability over the last two years between $QQQ and $SPY. The goal is to capitalize on a reversal of a sell off.
  • Strike: within 1 to 2 strikes of ATM (although alternative strikes can be used)
  • Expiry: 30 to 45 days
  • Risk: the reversal does not hold and the previous momentum resumes resulting in total or near total loss of the option premium paid.
Exit the position once 50%+ profit or if the 5 MA resumes its previous direction; whichever occurs first.
C2: Alternatively, you can sell an ATM put 30 to 45 days out when the 5 MA on the daily chart turns upward after a sell off or sell a call 30 to 45 days out when the 5 MA turns down on the daily chart.

$SPY potential long entry points identified by yellow circles where the 5 MA goes from a downward trajectory to turning upward. The sharper the fall, usually the stronger the reversal.
Strategy D: Intraday Trading (proprietary)
Follow @deafdaytrader on Twitter. He is an older deaf gentleman whose writing skills are a bit different. His book “My Favorite Indicator” is for those who use TD Ameritrade’s thinkorswim and is $10. His strategy can be applied to 5, 15, or 30 minute, hourly, daily, weekly, or monthly charts. I find the success rate is about 50 to 75% depending on how well I actually follow it and the overall market conditions (which suck lately) less the obvious increased risks of day trading weekly options in this volatile market. I don’t employ this strategy too often because of how easy it is to lose money day trading. However, I consider his strategy a real asset. The book paid itself off after a single trade.
http://deafdaytrader.com/my-favorite-indicato
Regrettably, he has gone private so he no longer really posts intraday entries and exits but his paid service is only $25 a month although I do not subscribe to it (or any paid service for that matter).
@option_snipper is another good Twitter to follow. He has gone mostly private now and I do not subscribe to his paid service but his previous tweets before he went private were very valuable on technical analysis and day trading such as the importance of the 5-period moving average. There is a myriad of other Fintwit people of varying degrees of usefulness but these two are excellent places to start.

My thinkorswim layout after following @deafdaytrader.
Strategy E: $VIX Intermediate Term Trade
The ultra long-term average of the $VIX is near $19.23. However, since 2013 the average is about $14.00. I know it may not seem like it but we are enjoying historically lower volatility over the last several years than before. Think of what the 2008 global financial crisis conditions were compared to conditions today. The $VIX lived above $20.00 back then.
When the $VIX spikes above $20.00 it implies that there is more fear in the market than greed. Fear is the time you want to buy assets because everyone is trying to sell them at whatever price they can get which usually means bargain prices below their intrinsic value. Buying assets when the $VIX is below $20.00 is buying when the market is greedy. Prices are going up and if you buy here you are paying top dollar. This is actually the best time to sell.

$VIX daily chart showing fear vs. greed zones with white dotted line of $19.23, red line one standard deviation above $19.23 ($27.00), and green line one standard deviation below $19.23 ($11.45).
Since 2013, when the $VIX spikes above $20.00, buying an ATM call six months out yielded an 83% success rate in profitability if you close the position at 50% profit and 73% rate of success if you held to the day of expiry. You need to exercise a bit of caution. When volatility goes up so does IV which makes options more expensive. The strategy holds even if you wait a few days for volatility and IV to calm down before buying in because once the market begins to recover the drop in IV can eat away at the premium value.
  • Strike: within 1 to 2 strikes of ATM (although alternative strikes can be used at your discretion)
  • Expiry: 6 months
  • Risk: the markets continue to deteriorate and the $VIX continues to relentlessly climb over the six-month option expiry period resulting in total or near total loss of the option premium paid.
Alternatively, you could also sell ATM options six months out when the $VIX is up to capitalize both on a potential drop in IV and price recovery.
Note
Most of these trades require capital to be held on the side. For example, to sell a single $MU option requires about $3,300 to be held as collateral for every put sold. Margin trading eases the amount of cash needed and allows access to about double your cash amount but amplifies profits and more importantly losses by about two times. Additionally, you pay interest to use margin, usually around 9%. The cash in a cash-secured short put does not go anywhere. You can even leave it in a money market fund and it will continue to earn interest while your short put position is open. You just can’t use it to trade.
Edits
Lot's of shade about selling options which I totally understand. No these are cash-secured. The risks of margin were noted. You can always substitute selling a put in these strategies with buying a long call (e.g. buy FDs). I have tested this. The success rate drops though. Sometimes down to as much as 40% of the time simply because on the buy side theta and vega are now working against you, not for you. Buying the dip often means the IV is high so when prices start to recover IV drops and so does the option premium. I've watched $QQQ calls I've owned drop when $QQQ was up 1% but because the IV dropped from 23% or so down to 20% you have losses equivalent to vega x the % drop in IV which completely negates, and in most cases overcomes, the rise in intrinsic value.
Thank you for the gold and silver.
submitted by Networking4Eyes to wallstreetbets [link] [comments]

Wall Street Week Ahead for the trading week beginning August 26th, 2019

Good Saturday morning to all of you here on wallstreetbets. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.
Here is everything you need to know to get you ready for the trading week beginning August 26th, 2019.

Week ahead: Stocks could be rocky on trade, economy fears, as August breaks low volatility streak - (Source)

The final week of August — the bittersweet end of summer for many— could be highly volatile, as markets fret over the economy and the latest developments in trade wars.
President Donald Trump joins the G-7 leaders in France over the weekend, and markets will be watching to see if the meeting exposes new fault lines in the shaky relations among a once fairly congenial leadership group that fought the Great Recession together. Trump is expected to discuss the U.S. economy and highlight the U.S. pro-jobs, pro-growth agenda, under his leadership.
The U.S. trade war with China escalated sharply in the past week, with a new round of tariffs from China on U.S. goods announced Friday and new threats from Trump, who “ordered” American companies to find alternatives to China. That immediately triggered speculation that the trade war will be extended and more contentious, and the U.S. economy risks falling into recession.
After the close Friday, Trump retaliated against China’s tariffs by raising existing tariffs on $250 billion in Chinese goods to 30% from 25%, as of Oct. 1. In a tweet, he also said he was raising new tariffs on $300 billion in Chinese goods that have not yet gone into effect to 15% from 10%.
Friday’s trading was volatile, and stocks fell by about 2.5%, erasing what would have been a second positive week for the market. Treasury yields, which move opposite price, continued to go lower amid worries about the economy and fears the Fed will not act aggressively enough to head off a recession.
Stocks have been volatile, and the S&P 500 is down about 4.5% in the month of August.
Michael Arone, State Street Advisors chief investment strategist said the first seven months of the year were more certain for investors in terms of their expectations for Fed rate cuts and a possible trade deal. But the trade tensions have worsened, and the trade war could escalate even further.
Fed Chairman Jerome Powell spoke at Jackson Hole Friday morning, but while he left the door open for rate cuts, he did not explicitly promise rate cuts.
“The Fed has become a lot less certain. Until we get more clarity, you’re likely to see this volatility, and stocks will trade sideways,” Arone said. Even though corporate earnings weakened, “investors took a big leap of faith in the first seven months of the year, expecting both a trade deal and monetary policy easing.”
The escalation of the trade war makes a deal unlikely anytime soon. This, however, did drive market expectations for rate cuts higher Friday afternoon, and the market was expecting three more cuts this year.
Trump tied his feuds with China and the Fed together Friday, when he tweeted that the Fed is not helping with easier rate policy, along with a question about “who is the bigger enemy” — China President Xi Jinping or Fed Chairman Jerome Powell.
“I think the Fed is in uncharted territory, and I continue to have empathy for Chairman Powell. I think markets want faster and more aggressive policy. He’s dealing with challenges the Fed has never had,” said Arone.
”[Powell] is literally walking a tight rope. He has the president who is daily bashing him,” he said. “Bond markets are demanding a much greater number of rate cuts, and he’s got geopolitical challenges, whether it’s Brexit or trade. He’s also got dissension among Fed voting members. That’s a lot to balance.”
There is some important data in the coming week, including durable goods Monday and personal spending and consumption data Friday, which also includes the PCE deflator, the Fed’s preferred inflation indicator.
“The data will give us some indications on business spending. Durable goods has capital expenditure orders. It looks look consumer confidence will come out [Tuesday] as well,” Arone said. Business spending has been taking a hit from the trade wars, and economists are concerned it will continue to weaken, ultimately leading to weakness in the consumer economy.
The week ahead could see some swings ahead of the long Labor Day Holiday weekend. “Given high absentees and low volumes, my guess is it’s going to add to volatility,” said Arone.
Frank Cappelleri, Nomura executive director, said he also expects volatility, and the S&P could test the outer limits of its recent range.
Of the 17 trading days this month, nine of them saw absolute 1% moves in the S&P 500. The last time that occurred was in December, when there were 10 days with 1% moves, according to Cappelleri. The most in one month was February, 2018 when there were 12. Contrast that to the entire year of 2017, when there were just eight.
Friday’s action was volatile, and the S&P 500 was down as much as 3%.
“This is the third-biggest decline we’ve had this month. Each of them started within 10 points of each other, near the top of the range,” said Cappelleri. The top of the range is 2,943, its Aug. 13 high, and the bottom is 2,820, near the Aug. 5 low.
“We’re obviously still in a trading range that has been characterized by sharp moves and acute turns, so I think when we had that initial drop on Aug. 5, the question is where is it going to stop,” he said, adding traders are watching that Aug. 5 level to see if it will act as a floor.

This past week saw the following moves in the S&P:

(CLICK HERE FOR THE FULL S&P TREE MAP FOR THE PAST WEEK!)

Major Indices for this past week:

(CLICK HERE FOR THE MAJOR INDICES FOR THE PAST WEEK!)

Major Futures Markets as of Friday's close:

(CLICK HERE FOR THE MAJOR FUTURES INDICES AS OF FRIDAY!)

Economic Calendar for the Week Ahead:

(CLICK HERE FOR THE FULL ECONOMIC CALENDAR FOR THE WEEK AHEAD!)

Sector Performance WTD, MTD, YTD:

(CLICK HERE FOR FRIDAY'S PERFORMANCE!)
(CLICK HERE FOR THE WEEK-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE MONTH-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 3-MONTH PERFORMANCE!)
(CLICK HERE FOR THE YEAR-TO-DATE PERFORMANCE!)
(CLICK HERE FOR THE 52-WEEK PERFORMANCE!)

Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:

(CLICK HERE FOR THE CHART!)

S&P Sectors for the Past Week:

(CLICK HERE FOR THE CHART!)

Major Indices Pullback/Correction Levels as of Friday's close:

(CLICK HERE FOR THE CHART!

Major Indices Rally Levels as of Friday's close:

(CLICK HERE FOR THE CHART!)

Most Anticipated Earnings Releases for this week:

(CLICK HERE FOR THE CHART!)

Here are the upcoming IPO's for this week:

([CLICK HERE FOR THE CHART!]())
(NONE SCHEDULED FOR THIS WEEK.)

Friday's Stock Analyst Upgrades & Downgrades:

(CLICK HERE FOR THE CHART LINK #1!)
(CLICK HERE FOR THE CHART LINK #2!)

Second Half August Trading: Historically Weak Too

Following three straight days of gains, the market has recovered a sizable portion of its losses from earlier in the month. Losses earlier in the month and gains over the past three days (prior to today) have tracked August’s typical trading pattern for over the last 21-years quite closely. The magnitude of the moves this year has been larger than average, but the pattern has been tracked.
Due to the magnitude of this year’s moves, August’s performance over the past 21-years has been plotted on the left vertical axis in the chart above and 2019 is plotted on the right. From right around mid-month or now through the end of August, the historical trend has been weaker. DJIA, S&P 500, NASDAQ, Russell 1000 and 2000 have all averaged a loss in August from 1998 to 2018 and they are on track to repeat this year.
(CLICK HERE FOR THE CHART!)

Is a Small-Cap Labor Day Rally Coming Soon

In the below chart, forty years of daily data for the Russell 2000 index of smaller companies are divided by the Russell 1000 index of largest companies, and then compressed into a single year to show an idealized yearly pattern. When the graph is descending, large-cap companies are outperforming small-cap companies; when the graph is rising, smaller companies are moving up faster than their larger brethren. The most prominent period of outperformance generally begins in mid-December and lasts until late-February or early March with a surge in January. This period of outperformance by small-caps is known as the “January Effect” in the annual Stock Trader’s Almanac.
(CLICK HERE FOR THE CHART!)
In recent years, another sizable move is quite evident just before Labor Day. One possible explanation for this move is individual investors begin to return to work after summertime vacations and are searching for “bargain” stocks. In a typical year, small-caps would have been lagging and could represent an opportunity relative to other large-cap possibilities. As of Friday’s close (August 16, 2019), Russell 2000 is up 10.8% compared to the Russell 1000 being up 15.5% year-to-date. Lagging small-caps and resilient U.S. consumers could be the ideal setup for a repeat of this pattern this year. However, the small-cap advantage does historically wane around mid-September.

September Almanac: No Respite in Pre-Election Years

The start of business year, end of summer vacations, and back to school made September a leading barometer month in first 60 years of 20th century, now portfolio managers back after Labor Day tend to clean house Since 1950, September is the worst performing month of the year for DJIA, S&P 500, NASDAQ (since 1971) and Russell 1000 (since 1979). Sizable gains in September 2012, 2013 and 2017 have lifted Russell 2000 to second worst (since 1979). September was creamed four years straight from 1999-2002 after four solid years from 1995-1998 during the dot.com bubble madness. September gets no respite from positive pre-election year forces.
(CLICK HERE FOR THE CHART!)
Although the month used to open strong, S&P 500 has declined eight times in the last eleven years on the first trading day. As tans begin to fade and the new school year begins, fund managers tend to sell underperforming positions as the end of the third quarter approaches, causing some nasty selloffs near month-end over the years. Recent substantial declines occurred following the terrorist attacks in 2001 (DJIA: –11.1%), 2002 (DJIA –12.4%), the collapse of Lehman Brothers in 2008 (DJIA: –6.0%) and U.S. debt ceiling debacle in 2011 (DJIA –6.0%). However, September is improving with S&P 500 advancing in ten of the last 15 Septembers and DJIA climbing in nine.

Leading Indicators Signal Growth Ahead

U.S. leading indicators rebounded in July, a good sign for the durability of the expansion.
The Conference Board’s Leading Economic Index (LEI) rose 0.5% month over month, the biggest gain since September 2018, and above consensus expectations for a 0.3% increase. As shown in the LPL Chart of the Day, Leading Indicators Slowing But Growing, the LEI climbed 1.6% year over year.
(CLICK HERE FOR THE CHART!)
The LEI, which we include as one of the “Five Forecasters” of our Recession Watch Dashboard, has yet to turn negative this cycle. The index has fallen negative year over year before all nine recessions since 1955.
“Some investors have pointed out slowing LEI growth as a reason for caution,” said LPL Financial Chief Investment Strategist John Lynch. “However, the LEI is signaling moderate U.S. economic growth ahead, with no signs of an imminent recession.”
The LEI is calculated from 10 individual leading data sets, including weekly jobless claims, building permits, and stock prices. This year, the majority of LEI components have boosted month-over-month growth in the index, but more internationally exposed data sets have turned into net drags.
In July, 6 of 10 components rose month over month, but four components—average hours worked, manufacturers’ new orders, new orders for nondefense capital spending, and interest rate spreads—fell month over month. Historically, breadth in LEI components has deteriorated further before a recession began. In contrast, at the end of each of the past six economic cycles, more than half of the LEI components were in decline.
While evidence of slowing growth in leading indicators is disappointing, we are encouraged by what we see outside of manufacturing. Global manufacturing has been the sector hardest hit by prolonged trade tensions and weakened demand, and we don’t expect to see much improvement until a U.S.-China trade resolution is reached. Even then, a recovery in manufacturing may take some time.

Crude Oil's Descending Triangle

Earlier this week, crude oil was trading well over 2% higher than last Friday's close. Over the past few sessions, though, oil has given up all of those gains. The catalyst for today's declines are the Chinese retaliatory tariffs on US crude which are expected to dampen demand. This week's negative reversal comes as the commodity ran into multiple points of resistance. For starters, the rally began to stall out mid-week when it met the converging 200 and 50-day moving averages. This also coincided with a downtrend that traces itself all the way back to the highs from late last year. In fact, crude is down around 30% from these previous highs.
Overall, the technical picture for crude oil is not in a great place as the chart is forming a descending triangle pattern. Despite the big gains at the beginning of 2019, over the past few months, crude has been making consistent lower highs and lower lows. Given this most recent failure to retake the moving averages and break out of the downtrend, the next major support level to watch is around $50 which is a level that has held up at multiple times in the past few months. This support also draws back to late last year prior to the collapse in December.
(CLICK HERE FOR THE CHART!)

Yield Curves: Another Record Streak Bites the Dust

After the 3-month vs 10-year US Treasury yield curve first inverted earlier this year, the market has shifted its focus to the 2-year vs 10-year part of the curve which had yet to reach inverted levels. That was, until yesterday. While the 10s2s curve flirted with inverted territory for the last few days on an intraday basis, Thursday was the first time in more than a decade that the closing yield on the two-year US Treasury was above the yield on the 10-year. And with another closely watched part of the curve moving into inverted levels, recession fears increased.
(CLICK HERE FOR THE CHART!)
As the chart above illustrates, it has been a while since the 10s2s curve was inverted. In fact, the streak that just ended was the longest on record going back to 1977, and it wasn't even close. Going back to 1977, there have only been three prior streaks where the 10s2s curve was inverted for more than 1,000 days, and never before had the curve been positively sloped for more than 2,000 days. The current streak, though? 3,054 days. It was fun while it lasted!
(CLICK HERE FOR THE CHART!)

Adapt or Die

A common characteristic of most investors and traders is to always be on the lookout for patterns and connections between various asset classes. Whenever one correlated asset confirms the move in another it adds a layer of confidence to an investor's thesis. One long-held example is the Dow Transports as a leading or coincident indicator for the broader market. For decades now, many investors have followed the transports for confirmation of the broader market moves. If the transports — which move all of the physical goods in the economy — rally, it suggests that the broader market will be strong, while periods when the transports start to roll over are read as a signal that there's an underlying weakness in the economy.
As the US economy has become more service and digital-oriented in nature, there has been a valid argument made that the transports have lost some of their importance as an indicator of the broader economy. Along these lines, we have suggested that rather than transports, semiconductors may represent this century's 'transports' as they are a part of just about everything in this digital age. Whether you agree with this or not isn't important, but the important takeaway is that just because two asset classes have been highly correlated in the past doesn't mean that they will remain that way in the future. It's one thing to recognize a correlation between two asset classes, but it's much more important to understand why they are correlated and be on the lookout for factors that may change the status quo in the future.
One example of a radical change in a relationship between two asset classes is the interaction between the relative strength of growth and value stocks versus the slope of the yield curve. From 2002 through 2011, the two were closely correlated. As the curve flattened in the early part of this century, growth stocks underperformed value by a wide margin (falling blue line). Then in mid-2007, as the curve steepened and came out from inverted territory, growth stocks started to rip higher relative to value. Beginning in 2009, though, the curve stopped steepening and the relative strength of growth relative to value stalled out. The two series were so closely joined at the hip during this ten-year stretch that the correlation coefficient between the two was +0.82, which is indicative of two series moving in lockstep with each other.
(CLICK HERE FOR THE CHART!)
If the paths of the yield curve and the relative strength of growth versus value couldn't be separated from 2002 through 2011, the relationship soured in 2012 when the two came down with a case of the ten-year itch. At that point, they couldn't separate fast enough. The chart below shows the same two series from the start of 2012 through the present. Now, when one goes up the other goes down and vice versa, as the paths are nearly exact opposites. In fact, in the nearly eight years since 2012, the correlation between the two is -0.90.
(CLICK HERE FOR THE CHART!)
In the chart below we have shown the two series over the entire time period spanning 2002 through 2019. The non-shaded area represents the period covered in the first chart, while the shaded area covers the second period. Right around the time where the shaded period starts is when the positive correlation turned on a dime, and beginning in 2013 when the curve started to flatten, investors who were still hanging on to the idea that a flatter yield curve was a green light for value stocks, saw what turned out to be an extended period of misery relative to the performance of growth stocks. In the words of Intel Founder Andy Grove, "Adapt or Die."
(CLICK HERE FOR THE CHART!)

Nasdaq 100 to S&P 500 Ratio

Below is a chart of the Nasdaq 100 going back to 1990. While it took 15+ years for the index to make a new all-time closing high following its March 2000 peak, the index is currently 65% above those March 2000 highs.
(CLICK HERE FOR THE CHART!)
Below is a ratio chart of the Nasdaq 100's price versus the S&P 500's price since 1990. The ratio started well below 1 in early 1990 but quickly overtook the S&P in price by the mid-90s. As you can see, the ratio spiked dramatically above 3 during the peak of the Dot Com bubble in late 1999. The Nasdaq 100 then gave up much of that outperformance versus the S&P 500 over a 2-3 year period where the ratio got all the way back down to 1, but since then it has been steadily trending higher to its current level of 2.65. While it went through a bubble and a burst over a 5-year period, the Nasdaq has been outperforming the S&P 500 for a long time now.
(CLICK HERE FOR THE CHART!)

STOCK MARKET VIDEO: Stock Market Analysis Video for Week Ending August 23rd, 2019

(CLICK HERE FOR THE YOUTUBE VIDEO!)

STOCK MARKET VIDEO: ShadowTrader Video Weekly 08.25.19

(CLICK HERE FOR THE YOUTUBE VIDEO!)
Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-
  • $BBY
  • $MOMO
  • $OKTA
  • $DG
  • $VEEV
  • $ULTA
  • $OSIS
  • $BILI
  • $DLTR
  • $TIF
  • $NTNX
  • $ICLK
  • $ADSK
  • $SJM
  • $PLAN
  • $WDAY
  • $ANF
  • $DELL
  • $BURL
  • $FIVE
  • $BWAY
  • $JT
  • $MRVL
  • $BNS
  • $BMO
  • $HPE
  • $COTY
  • $TD
  • $ITRN
  • $HEI
  • $EXPR
  • $JILL
  • $WMWD
  • $MOGU
  • $CAL
  • $GES
  • $CPB
  • $BOX
  • $PVH
  • $BIG
  • $CHS
(CLICK HERE FOR NEXT WEEK'S MOST NOTABLE EARNINGS RELEASES!)
(CLICK HERE FOR NEXT WEEK'S HIGHEST VOLATILITY EARNINGS RELEASES!)
(CLICK HERE FOR MOST ANTICIPATED EARNINGS RELEASES FOR THE NEXT 5 WEEKS!)
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:

Monday 8.26.19 Before Market Open:

(CLICK HERE FOR MONDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Monday 8.26.19 After Market Close:

(CLICK HERE FOR MONDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 8.27.19 Before Market Open:

(CLICK HERE FOR TUESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Tuesday 8.27.19 After Market Close:

(CLICK HERE FOR TUESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 8.28.19 Before Market Open:

(CLICK HERE FOR WEDNESDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Wednesday 8.28.19 After Market Close:

(CLICK HERE FOR WEDNESDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Thursday 8.29.19 Before Market Open:

(CLICK HERE FOR THURSDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Thursday 8.29.19 After Market Close:

(CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!)

Friday 8.30.19 Before Market Open:

(CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!)

Friday 8.30.19 After Market Close:

([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
NONE.

Best Buy Co., Inc. $66.21

Best Buy Co., Inc. (BBY) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $0.99 per share on revenue of $9.57 billion and the Earnings Whisper ® number is $1.06 per share. Investor sentiment going into the company's earnings release has 72% expecting an earnings beat The company's guidance was for earnings of $0.95 to $1.00 per share. Consensus estimates are for year-over-year earnings growth of 8.79% with revenue increasing by 2.04%. Short interest has decreased by 10.2% since the company's last earnings release while the stock has drifted lower by 4.1% from its open following the earnings release to be 0.6% above its 200 day moving average of $65.83. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, August 13, 2019 there was some notable buying of 2,003 contracts of the $65.00 put expiring on Friday, December 20, 2019. Option traders are pricing in a 9.6% move on earnings and the stock has averaged a 6.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Momo Inc. $31.83

Momo Inc. (MOMO) is confirmed to report earnings at approximately 4:10 AM ET on Tuesday, August 27, 2019. The consensus earnings estimate is $0.72 per share on revenue of $581.18 million and the Earnings Whisper ® number is $0.76 per share. Investor sentiment going into the company's earnings release has 73% expecting an earnings beat The company's guidance was for revenue of $579.00 million to $593.00 million. Consensus estimates are for year-over-year earnings growth of 22.03% with revenue increasing by 17.58%. Short interest has increased by 2.4% since the company's last earnings release while the stock has drifted higher by 13.4% from its open following the earnings release to be 2.2% below its 200 day moving average of $32.55. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, August 8, 2019 there was some notable buying of 5,000 contracts of the $24.40 put expiring on Friday, October 18, 2019. Option traders are pricing in a 13.7% move on earnings and the stock has averaged a 10.7% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Okta, Inc. $132.46

Okta, Inc. (OKTA) is confirmed to report earnings at approximately 4:05 PM ET on Wednesday, August 28, 2019. The consensus estimate is for a loss of $0.10 per share on revenue of $131.09 million and the Earnings Whisper ® number is ($0.07) per share. Investor sentiment going into the company's earnings release has 84% expecting an earnings beat The company's guidance was for a loss of $0.11 to $0.10 per share on revenue of $130.00 million to $131.00 million. Consensus estimates are for year-over-year earnings growth of 33.33% with revenue increasing by 38.59%. Short interest has increased by 13.6% since the company's last earnings release while the stock has drifted higher by 15.7% from its open following the earnings release to be 39.4% above its 200 day moving average of $95.03. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, August 12, 2019 there was some notable buying of 1,949 contracts of the $135.00 call expiring on Friday, August 30, 2019. Option traders are pricing in a 10.4% move on earnings and the stock has averaged a 9.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Dollar General Corporation $136.99

Dollar General Corporation (DG) is confirmed to report earnings at approximately 6:55 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $1.58 per share on revenue of $6.89 billion and the Earnings Whisper ® number is $1.61 per share. Investor sentiment going into the company's earnings release has 76% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 3.95% with revenue increasing by 6.93%. Short interest has decreased by 28.9% since the company's last earnings release while the stock has drifted higher by 9.8% from its open following the earnings release to be 12.4% above its 200 day moving average of $121.87. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, August 20, 2019 there was some notable buying of 757 contracts of the $149.00 call expiring on Friday, September 6, 2019. Option traders are pricing in a 6.7% move on earnings and the stock has averaged a 6.1% move in recent quarters.

(CLICK HERE FOR THE CHART!)

Veeva Systems Inc. $158.13

Veeva Systems Inc. (VEEV) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, August 27, 2019. The consensus earnings estimate is $0.49 per share on revenue of $259.26 million and the Earnings Whisper ® number is $0.51 per share. Investor sentiment going into the company's earnings release has 83% expecting an earnings beat The company's guidance was for earnings of $0.48 to $0.49 per share on revenue of $259.00 million to $260.00 million. Consensus estimates are for year-over-year earnings growth of 40.00% with revenue increasing by 23.69%. Short interest has decreased by 34.5% since the company's last earnings release while the stock has drifted higher by 7.1% from its open following the earnings release to be 22.9% above its 200 day moving average of $128.66. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, August 9, 2019 there was some notable buying of 1,273 contracts of the $155.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.3% move on earnings and the stock has averaged a 7.2% move in recent quarters.

(CLICK HERE FOR THE CHART!)

ULTA Beauty $322.10

ULTA Beauty (ULTA) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, August 29, 2019. The consensus earnings estimate is $2.79 per share on revenue of $1.68 billion and the Earnings Whisper ® number is $2.80 per share. Investor sentiment going into the company's earnings release has 83% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 13.41% with revenue increasing by 12.89%. Short interest has increased by 28.5% since the company's last earnings release while the stock has drifted higher by 2.1% from its open following the earnings release to be 1.3% above its 200 day moving average of $318.11. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, August 15, 2019 there was some notable buying of 1,211 contracts of the $330.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 8.2% move on earnings and the stock has averaged a 6.3% move in recent quarters.

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OSI Systems Inc. $100.83

OSI Systems Inc. (OSIS) is confirmed to report earnings at approximately 9:00 AM ET on Monday, August 26, 2019. The consensus earnings estimate is $1.05 per share on revenue of $303.70 million and the Earnings Whisper ® number is $1.11 per share. Investor sentiment going into the company's earnings release has 62% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 2.94% with revenue increasing by 5.70%. Short interest has increased by 13.3% since the company's last earnings release while the stock has drifted higher by 6.1% from its open following the earnings release to be 9.9% above its 200 day moving average of $91.73. Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 9.2% move in recent quarters.

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Bilibili Inc. $14.70

Bilibili Inc. (BILI) is confirmed to report earnings at approximately 7:00 PM ET on Monday, August 26, 2019. The consensus estimate is for a loss of $0.12 per share on revenue of $212.73 million and the Earnings Whisper ® number is ($0.14) per share. Investor sentiment going into the company's earnings release has 65% expecting an earnings beat The company's guidance was for revenue of $211.00 million to $217.00 million. Consensus estimates are for earnings to decline year-over-year by 200.00% with revenue increasing by 37.16%. The stock has drifted lower by 11.9% from its open following the earnings release to be 10.7% below its 200 day moving average of $16.47. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, July 23, 2019 there was some notable buying of 6,011 contracts of the $12.50 put expiring on Friday, October 18, 2019. Option traders are pricing in a 20.4% move on earnings and the stock has averaged a 9.1% move in recent quarters.

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Dollar Tree Stores, Inc. $95.16

Dollar Tree Stores, Inc. (DLTR) is confirmed to report earnings at approximately 7:30 AM ET on Thursday, August 29, 2019. The consensus earnings estimate is $0.96 per share on revenue of $5.72 billion. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat The company's guidance was for earnings of $0.64 to $0.73 per share. Consensus estimates are for earnings to decline year-over-year by 16.52% with revenue increasing by 3.52%. Short interest has decreased by 16.6% since the company's last earnings release while the stock has drifted lower by 1.1% from its open following the earnings release to be 3.3% below its 200 day moving average of $98.41. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, August 7, 2019 there was some notable buying of 3,596 contracts of the $80.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.9% move on earnings and the stock has averaged a 9.8% move in recent quarters.

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Tiffany & Co. $81.32

Tiffany & Co. (TIF) is confirmed to report earnings at approximately 6:40 AM ET on Wednesday, August 28, 2019. The consensus earnings estimate is $1.05 per share on revenue of $1.07 billion and the Earnings Whisper ® number is $1.06 per share. Investor sentiment going into the company's earnings release has 49% expecting an earnings beat The company's guidance was for earnings of up to $1.16 per share. Consensus estimates are for earnings to decline year-over-year by 10.26% with revenue decreasing by 0.55%. Short interest has increased by 28.9% since the company's last earnings release while the stock has drifted lower by 13.6% from its open following the earnings release to be 13.3% below its 200 day moving average of $93.75. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, August 14, 2019 there was some notable buying of 3,129 contracts of the $80.00 put expiring on Friday, September 20, 2019. Option traders are pricing in a 7.9% move on earnings and the stock has averaged a 7.8% move in recent quarters.

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DISCUSS!

What are you all watching for in this upcoming trading week?
I hope you all have a wonderful weekend and a great trading week ahead wallstreetbets.
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What is Margin Trading or Intraday Trading?[HINDI] [ TOP RATED ] Alice Blue vs Zerodha Margin Requirements for Intraday FuturesSpanNiftyCommodityEquitySTT Intraday Margin Trading vs Holding Based Trading  कौन सी ट्रेडिंग प्रॉफिट देगी  हिन्दी मे DIFFRENCE BETWEEN DELIVERY, MARGIN AND INTRADAY IN ANGEL MOBILE APP Intraday - What is Margin or Leverage and how to use it ...

Intraday Margin for Futures Day Trading. At its most basic, the Intraday Margin of a product represents the minimum balance an account must maintain per contract while in a trade. Let’s start by looking at the E-mini S&P 500 (ES) and Crude Oil (CL), two common futures instruments with different margin requirements. This sort of trading does not carry the same sort of restrictions as day trading, and you can start this method of trading with a minimal amount of capital. The major difference between the two is that a day trader profits on smaller price fluctuations; the intra-day trader holds positions for several days or weeks at a time in hopes of a Hi everybody! @ThePrestige here to talk about the advantages and and disadvantages of position trading vs. intraday trading.. Let’s start with a simplified definition: POSITION TRADING: that trading method is used when the trader is going to make a decision within a given context or certain criteria while INTRADAY TRADING is strictly mechanical. Sounds nice, so let’s get more in depth In this article we are going to tell you why swing trading is better than intraday trading, before going ahead , you should have knowledge about intraday and positional trading , if you don’t know than you can read these topics in details, check our previous article Stock Market for beginners .. Swing trading pros and cons Intraday Trading (Margin Product), is for those customers who want to gain from the expected upward or downward movement in price of a stock during the day but have limited money.Margin product is the appropriate solution for such customers which gives leverage upto 5 times the allocated trading amount.

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