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  1. #1
    Administrator Martin Kay's Avatar

    Tip From the Geek: S&P 500, Intel, XOM. One Month Expiry. 22.10-22.11 !!!

    Hi guys, the geek is looking for stocks this week, what do you think?

    Originally posted by Michael Hodges. For the full weekly trading tips click here.

    S&P 500

    Call/Put = Call
    Entry = below 1430
    Expiration = end of the month


    October is traditionally a month of volatility because of portfolio re-positioning. Many large institutional accounts end their fiscal quarter in October and they usually do some selling and buying to capture gains and reposition for the fourth quarter. This past Friday’s sell-off was overly sharp and could have been exacerbated by the coincidental anniversary of the Black Monday sell-off of the 80′s. This correction, like that one will likely end with the markets even higher than they were before as investors and traders pick up bargains.


    Intel
    Call/Put = Put
    Entry = above $21.75
    Expiration = end of the month

    Intel is only one of several tech companies who have reported earnings below the consensus. The industry, though still expanding, is not expanding the way it once was. A declining rate of growth, not poor results are what is hurting Intel. Intel has been trending down for many months and the candle signals that formed around the earnings release and subsequent days do not inspire confidence in me.



    XOM

    Call/Put = Call
    Entry = below $92
    Expiration = end of the month

    Exxon has been advancing in leaps and bounds over the last three years. Since hitting its lows the stock has increased over 60% and is now trading near five year highs. Friday’s sell-off brought the stock down to the short term moving average and an attractive entry point for short term trading. High oil prices in the third quarter will help this stock post good earnings and drive it to retest its five year highs. Exxon is scheduled to release its statement November 1st, the stock should drift up until then.





  2. #2
    Senior Member Grae's Avatar
    Good day!
    One thing is for sure, both S&P and XOM are correlated and will head in similar fashion... Wait and see for me.

    By the way, very strong CALL on USDJPY. Only afraid I may have missed the ride. But keep and eye. If it's just warming up, we have a long way to go on the upside!!!
    Kind regards,
    Graham

  3. #3
    Specialist Member RCox's Avatar
    Quote Originally Posted by Martin Kay View Post
    Hi guys, the geek is looking for stocks this week, what do you think?
    S&P 500: These declines we are seeing now really should be coming as no surprise, as there is very little to hold up stock values as a whole for the broader indexes. I couldn't disagree more about the correlation with the Black Friday anniversary, that was much more of a cute story for the markets more than anything else. These declines should continue with the only "rallies" coming with sideways trading activity. Any positive ticks are ripe for more selling and the trading time frames can be scaled down to look for more scalping type opportunities in the S&P 500.

    Intel: Intel looks like it is trading in the middle of its short term ranges, which is much more of a reason so stand aside. The stock has seen some significant downside drops since August and while I am not positive on this one as a whole, entering into PUTS on this one goes against my normal contrarian trading style.

    XOM: XOM is positioned to fare better than most stocks on the whole as oil should continue to be a supportive factor for the company. Clearly this looks like a momentum play and a drop below $92 isn't bad for shorter term CALLS. If we are dealing with end of month expiry's, however, I would like to see somewhere below $90 before committing to XOM.

  4. #4
    Senior Member Grae's Avatar
    Question to the Geek.

    What's your outlook on the DOW?

  5. #5
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Grae View Post
    Question to the Geek.

    What's your outlook on the DOW?
    It's actually changing as we speak. I have been awaiting the beginning of a correction/bear market but I was sure we would retest the all-time highs before it began. The last three days of selling have brought the index down to a critical level, one that could easily become the pivot point for a down leg. However, until a break below and confirmation of the downtrend I have to remain neutral on the index. I believe that the current earnings season continue to provide volatility to the markets but that economic data will provide direction. Tomorrow the FOMC will release the new statement which should give insight into whether the economy is actually stabilizing. If, and it's a big if, the economy is in an uptick corporate earnings will improve in the fourth quarter and that could drive the index higher.

    For now, I'm in wait and watch mode to see what the FOMC says and what the 3rd quarter advance GDP number is (comes out on Friday)

  6. #6
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Grae View Post
    Good day!
    One thing is for sure, both S&P and XOM are correlated and will head in similar fashion... Wait and see for me.

    By the way, very strong CALL on USDJPY. Only afraid I may have missed the ride. But keep and eye. If it's just warming up, we have a long way to go on the upside!!!
    Kind regards,
    Graham
    I agree with the upside projections, the Bank of Japan is already considering more stimulus which should help the dollar gain against the yen.

  7. #7
    Specialist Member TAllen1429's Avatar
    1. S&P 500

    When attempting to assess which direction the indices will move, here are some of my ideas.

    These days, I tend to base my strategies on investor sentiment and price action. I have given up attempting to predict trends some time ago because of the sheer number of participants trading the markets. To assess how so many people will react to daily events is a staggering problem especially when they all have their own agendas and some even possess huge budgets.

    So, I attempt to define and separate events that are capable of creating trends from those that perform a more supportive role. For example, the new stimulus plans of the ECB and FED are trend creators. Similarly, a solution to the US Fiscal cliff problem would be as well. This is because these events are so big that they would act as catalysts providing investors with the confidence to trade in a particular direction.

    Well, where does that leave us? The ECB plan is still not triggered because of complex Spanish issues. Despite credit downgrades, Germany is still voicing opposition to any bailout requests. Reports are suggesting that Spain will not apply now until November. The Fed package will take time to impact the markets. There is very little chance anything will be done about the fiscal problem for months.

    If this brief analysis is correct, then there are no catalysts driving the markets presently. This means that they will drift on a daily basis reacting to daily events. Now, as about 60% of these are bearish because they generated by the deteriorating global economy, stocks are likely to slip downwards in the short-time. In fact, this percentage figure matches exactly that of US corporations posting worse-than-expected Q3 earnings reports.

    As such, I am just not supportive of the S&P500 generating enough bullish momentum to support any CALL options over the next few weeks.

    2. Intel

    I think this ‘PUT’ tip does have legs. This because Intel informed the markets last week that it was revising its fourth quarter profits and revenues lower dispelling any hopes of an imminent recovery in the Personnel Computer trading sector. Following this announcement, the world’s largest producer of silicon chips saw its shares slump by 2% during yesterday’s session.

    Officials cited that the main reasons behind these disappointing results were the growing demand for tablets, such as Apple’s iPad, and the faltering global economy.
    This trade would also be supported by the points outlined in my S&P500 response above.

    3. Exxon

    This is an interesting tip because Exxon Mobil Corp announced last week that it had successfully acquired Celtic Exploration Ltd for $2.64 billion as part of its plan to increase its facilities in Western Canada's lucrative gas and shale oil regions. Following this announcement, the shares of Exxon rose by 1.09% to record their highest value since May 2008.

    This is a very bullish development for Exxon which may be enough to counter the negativities of my $&P 500 response and support a CALL option over the coming weeks.

  8. #8
    Master Member vinayakm's Avatar
    My problem with XOM is that the trajectory of big oil stocks is so hard to determine. There are a lot of factors that influence the stock price outside of gas prices; legal disputes, clean energy sources and mechanical failures are some of them.
    The other thing is that Exxon stock has fared rather poorly when compared to the S&P 500, for instance. In 2012, the S&P 500 has been up 11.6% which has outperformed XOM that has increased 4%.
    Still, I agree with this forum and the tips that the stock has been on a long-term uptrend and a binary call option for the end of the month is a good trading idea. XOM has great fundamentals and a pile of cash.

  9. #9
    Senior Member Grae's Avatar
    Technically XOM has retraced to a support level which is also the floor for an up trend channel. Lets see if it resumes the uptrend.

  10. #10
    Senior Member Grae's Avatar
    In case you are looking for additional opportunity. More abounds with a CALL on the GBPJPY. Take a look.

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