Tag Archives: United States Oil

SPY Warning Signs

SPY Troubles Ahead

The following are a few of the futures contracts I watch:

SPY Warning Signs

As I’m writing this the SPY is falling and Gold/Silver/Oil futures are rising. I’m reading this as a warning sign for the markets. I spoke about the VIX recently, here.

One explanation for this divergence is inflation. Central banks are printing, cash is being hoarded, the dollar is rising and corporate profits from europe are therefore vanishing. Add Greece debt to the mix and the strong possibility that they default, you add the inflation worry to the list and talking points for politicians, media, and market watchers.

Now take gas prices which are starting to come up as an election issue, even a war issue. Frankly high energy costs are a good excuse for the market to pull back, don’t forget that the media will be playing this up, mixed with war mongering, and as an election issue that’s low-hanging fruit and an easy way to scare off the recent retail investors market participation.

As a trade idea a SLV 40/50/60 butterfly at Jan expiration is one I’ve written about here and I still think this is a very prudent trade. Keep a close eye on USO as well.

Good trading.

Iranian Nuclear Oil

This very public Iranian fear mongering, being played out as a populist form of press release tennis, has been played out over and over, ad infinitum. So much so, that I start to ignore anything “Iran”. It’s a question so politically charged, so Washington lobbyist rich, that I’m skeptical of a manipulated popular press sorting out much truth – even with the best intentions. So for fun, I started to imagine “The Scenario” and wonder who really benefits from this political tennis match. I was surprised by my conclusion.

The current match plays out against an Arab Spring, and “coincidentally” comes to a crescendo with a release from the IAEA. (Here’s the full report.)

Center court started to get interesting in late September when Mahmoud Abbas puts forward a bid for Palestine to be given full membership to the UN. Abbas serving first, into the sun. (The BBC)

Then in early October we learn about a plot by Iran to kill the Saudi Ambassador in Washington. That was a strange one. Hillary Clinton lobs a few deep center court. (CNN)

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Tripoli falls to rebels

Or nearly…

Celebrations across Libya.

Americans should check out Aljazeera english for some good coverage. It’s hard to find anything even close to decent on the US sites. They have a live english stream here.

Qaddafi still hanging out, people aren’t sure what he’s up to, but there are reports of a possible exit to South Africa or Angola.

I’m watching USO as discussed a few days ago.

Spinning the Weekend

With about 2 hours before the beginning of the end of the week, here in Europe we’re down about 3%. The Euro is consolidating around 1.43 and vacationers are dribbling back into Paris. After yesterday’s list of bad news, today is likely to be calmer – though options expire today, so I’m curious how the VIX presents itself. I’m cleaning out of my expiring option positions today. USO, SPY, FSLR.

Yesterday’s rout of HPQ had to be the craziest, most complicated manipulation of an earnings announcement I’ve seen. I’m guessing they put weeks of effort into this strategy… Or someone completely screwed up… I’d like to know which!

  1. Leak to Bloomberg at noon (Bloomberg falls all over itself for about 3 hours…)
  2. Trading Stopped – confusion
  3. Autonomy confirms leaked rumors – Autonomy trades under AU (Gold…) in the UK and stock jumps 45%
  4. Trading stopped again – more confusion
  5. Earnings are released early.
  6. Stock jumps 3 points for about 10 minutes
  7. Stock starts falling and doesn’t stop… HPQ will open down 12% this morning.
I was thinking about selling straddles at the close, but didn’t get the chance.
Obviously some changes are being made and strategies revised at our favorite tech companies. GOOG is buying Motorola Mobility, CSCO is laying off and starting to re-focus on core competencies and AAPL is surfing the content/platform wave. Extrapolate a bit and we’re seeing “Software Companies” like Google, Microsoft and Facebook preparing to go after Apple, Hewlet Packard and Dell. “Hardware Companies” are desperately trying to get in on the party.
This is a fundamental shift. Eventually we’ll stop referring to them as hardware and software companies, but with words like platform, infrastructure, and service. They might one day be considered conglomerates like TYCO and GE. MSFT is well on it’s way IBM is almost there, but markets will take some time to get used to innovators turning into conglomerates. The markets are just starting to digest this shift. These conglomerates will outsource innovation and start to pay dividends.
I’m going to get lunch, more later!

Market Opening

I’ve been watching Europe disintegrate into todays open. The CAC40 is off over 4%.

Initial Claims, PPI and Core PPI came in worse than expected. We’re in for another volatile day. If the day gets worse before it gets better might the VIX hit 40? I’d like to reiterate my post yesterday. USO will be weak this morning, Oil Futures are 2% lower into the open. I’ll be looking to add to this short position at some point.

My September SPY butterfly which I disussed here, might get sold today. Some trades you really “like”, this is one of them! And my exit strategy wasn’t clear, it was a long shot when I bought into it. It has played out well, and I’m trying to figure out the best way out.