ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
On Friday, CNBC reported that on that day options players placed large bets bullish on the dollar: “The options market is gearing up for a bull run in the dollar after February’s non-farm payrolls showed improvement in the U.S. jobs picture. Options traders saw sizeable downside put buying in the EUR/USD…Before Friday’s payrolls data, the … Read more
After falling as much as 15% this year, Goldcorp (GG), my favorite way to trade gold, has shot up 20%. The move through February was almost a straight line and the stock moved particularly strongly last week. *Chart created using TeleChart: While I sold the last of my trading positions in GG last week, this … Read more
Three and a half years ago, I concluded that options for Google (GOOG) should be sold, not bought, ahead of earnings. This advice seemed to generally apply ever since as GOOG tended to move just enough after earnings to devalue near-the-money calls AND puts. Friday’s 11% post-earnings pop was a rare, and impressive, exception to … Read more
Adobe Systems, Inc. (ADBE) was punished on Wednesday for an earnings report that produced guidance slightly below analyst expectations. The stock dropped as much as 26% after ADBE guided Q4 earnings to $0.48-0.54 EPS vs. $0.53 analyst consensus and Q4 revenues $950M to $1.0B vs. $1.03B analyst consensus (from briefing.com). The severity of the sell-off … Read more
With tongue reaching for the cheek last week, I declared the market both extremely undervalued and very overvalued, guessing that “as earnings season grinds on, I suspect the near-predictable pattern of post-earnings fades will finally wear thin, giving way to more bullish behavior.” I did not expect the turn to happen so clearly and dramatically … Read more