The Prepared Mind 4.22.2013

Cambridge Common

It was an amazing week – in the markets and personally.  I had a ringside seat for the two biggest stories of the week – the markets and the pursuit of the Boston terrorists.  I was able to watch and participate in the markets through my trading platform; the other was from the vantage point of Cambridge, Massachusetts.  I was in Cambridge on Wednesday, Thursday and Friday to teach two seminars for the Options Industry Council.  Over 100 students attended the classes despite heightened security, lengthy mass transit delays, and significant traffic jams.  All the activity on Thursday and Friday took place less than a mile from my hotel.  I have attached a picture of Cambridge Common taken at noon on Friday about two blocks from Harvard Square.  Generally there are scores of pedestrians and bike riders along with a steady stream of traffic.

Both gold and the market retreated strongly.  After being down by as much as 13% on Monday, gold futures finished the week down $105 – a 7% loss to $1,396 per ounce.  The largest sell-off in 30 years was attributed to a litany of reasons – a Goldman Sachs recommendation that clients take a short position in gold, deflationary pressures on the world economy, weak Chinese economy, slower Chinese growth, liquidation cue to trading margin calls, and a liquidation of Cyprus’ gold holdings.  The swoon was probably the result of all these and then some.  Gold is now 30% off its high while silver is down more than 50%.  The selloff in precious metals was immediately felt in the equities and equity indexes.  The broad based indexes showed losses of 2% to 3.5% for the week.  These losses are relatively modest in comparison to the gains shown by the indexes so far this year. 

After posting record intraday highs on last Friday, the S&P 500 and the DJIA were down by 1.5% on Monday when the explosions took place at the Boston Marathon.  The equity indexes showed a near immediate response by doubling their losses for the day.  After flirting with 1,600, the  S&P 500 (SPX) closed at 1,555.27 – down 33 points or a loss of 2.11%9%.  The NDX closed at 2,2,780.46 –  a loss of 76.02 or -2.66%. The S&P 100 (OEX) lost 14.56 point points to close at 700.82 – a loss of 2.04 %..  The losses for the SPX, NDX, and OEX were less than their gains for the previous week.   The Dow Jones Industrial Average (DJIA) is at 14,547.51 down over 300 points to gain 2.14%  The VIX and the other volatility indexes were up very for the week.     The volatility levels reflected concern about weakness in equity indexes.    The VIX closed last week at 14.97, gain of 2.91  or a weekly gain of 24.13%.  The other volatility measurements showed equal or greater gains.  Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index
Dow Jones Industrials (DJIA)

14,547.51

-317.55

-2.14%

11.01%

13.59% (VXD)
S&P 500 (SPX)

1,555.25

-33.60

-2.11%

9.05%

14.97% (VIX)
NASDAQ 100 (NDX)

2,780.46

-76.02

-2.66%

4.49%

17.71% (VXN)
Russell 2000 (RUT)

908.48

-32.91

-3.50%

6.70%

20.90% (RVX)
S&P 100 (OEX)

700.82

-14.56

-2.04%

8.38%

14.27% (VXO)
CBOE Volatility Index (VIX)

14.97

2.91

24.13%

NA

The focus will be on earnings and first quarter GDP.   The general consensus is that Friday’s announcement of GDP will show 2,8% real economic growth.   Anything less will reverberate throughout the market.   The earnings season will peak this week.  The announcements include Caterpillar, Halliburton, Apple, AT&T, DuPont, Amgen, Praxair, Boeing, Eli Lilly, Procter&Gamble, Ford, QUALCOMM, UPS, Colgate-Palmolive, Occidental Petroleum, 3M, DOW, Biogen Idec, Amazon,com, Exxon Mobil, Starbucks, Bristol-Myers Squibb, Chevron, and the Simon Property Group.  These earnings should trump all other news.  The announcements can increase the prices and implied volatility of individual options. You should be aware of the earnings date for any equities you trade.   I have scanned stocks with upcoming earnings using the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  You should be aware of daily volume and open interest in any products you trade.   I am including a consensus earnings estimate for each stock.  Stick with your plan.    Remain disciplined.  Remain on top of market news and movers.  Do not chase profits and disregard risk. 

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

This week’s economic news (All times are Eastern Daylight Time.) Events, dates and times are subject to change:

Monday April 22:

Economic:  Chicago Fed National Activity Index – 8:30, Existing Homes Sales – 10:00.

 Optionable Earnings:

Symbol

Company Name

April 12 close

IV30

B/A

XEPS

BEAV

BE Aerospace Inc.

$57.65

25.3

B

$0.80

CAT

Caterpillar Inc.

$80.46

22.9

B

$1.38

CHKP

Check Point Software Technologies

$45.41

31.5

B

$0.73

HAL

Halliburton Company

$37.71

29.4

B

$0.58

HAS

Hasbro Inc.

$44.34

23.0

B

$0.03

AMP

Ameriprise Financial Inc.

$72.18

24.2

A

$1.58

ILMN

Illumina Inc.

$56.33

33.2

A

$0.38

NFLX

Netflix Inc.

$163.82

77.0

A

$0.18

NXPI

NXP Semiconductors N.V.

$25.42

48.8

A

$0.49

TXN

Texas Instruments Inc.

$33.92

24.4

A

$0.31

VECO

Veeco Instruments Inc.

$33.28

48.1

A

$0.06

ZION

Zions Bancorp.

$23.44

29.6

A

$0.39

 

Tuesday April 23:

Economic:   ICSC-Goldman Sachs Retail Sales – 8:30,  Redbook – 8:55 , PMI Manufacturing Index Flash, FHFA House Price Index – 9:00, New Home Sales – 10:00, Richmond Fed Manufacturing Index – 10:00.  

Other: 

Optionable Earnings:  

Symbol

Company Name

April 19 close

IV30

B/A

XEPS

ARMH

ARM Holdings plc

$39.60

43.9

B

$0.17

AXE

Anixter International Inc.

$65.86

25.5

B

$1.36

CIT

CIT Group Inc.

$41.31

26.9

B

$0.89

COH

Coach Inc.

$51.38

40.4

B

$0.81

DD

EI DuPont de Nemours & Co.

$48.59

22.3

B

$1.54

EAT

Brinker International Inc.

$38.01

34.7

B

$0.69

FRX

Forest Laboratories Inc.

$35.44

25.9

B

$0.19

GCI

Gannett Co. Inc.

$20.10

45.4

B

$0.34

GNTX

Gentex Corp.

$20.40

34.7

B

$0.30

IR

Ingersoll-Rand Co. Ltd.

$53.54

28.4

B

$0.41

ITW

Illinois Tool Works Inc.

$60.50

20.3

B

$0.96

JCI

Johnson Controls Inc.

$32.17

26.9

B

$0.42

LXK

Lexmark International Inc.

$25.52

59.5

B

$0.86

MOLX

Molex Inc.

$26.97

33.3

B

$0.35

PCAR

Paccar Inc.

$47.38

30.8

B

$0.68

PII

Polaris Industries Inc.

$84.61

37.8

B

$1.01

R

Ryder System Inc.

$56.08

40.5

B

$0.78

TCK

Teck Cominco Ltd.

$24.52

49.3

B

$0.41

AAPL

Apple Inc.

$392.05

43.4

A

$10.23

AMGN

Amgen Inc.

$107.46

29.7

A

$1.75

AWAY

HomeAway Inc.

$31.74

53.1

A

$0.07

BRCM

Broadcom Corp.

$32.03

34.5

A

$0.35

CREE

Cree Inc.

$53.12

57.9

A

$0.25

DV

DeVry Inc.

$32.43

46.6

A

$0.83

EW

Edwards Lifesciences Corp.

$82.75

34.2

A

$0.76

NFX

Newfield Exploration Co.

$20.79

48.1

A

$0.48

NSC

Norfolk Southern Corp.

$73.86

27.2

A

$1.17

OI

Owens-Illinois Inc.

$24.26

41.0

A

$0.57

OII

Oceaneering International Inc.

$59.50

30.5

A

$0.60

PNRA

Panera Bread Co.

$179.49

34.6

A

$1.65

RKT

Rock-Tenn Co.

$86.47

37.0

A

$1.02

USNA

USANA Health Sciences Inc.

$48.41

64.1

A

$1.12

VMW

VMware Inc.

$74.39

52.2

A

$0.46

YUM

Yum! Brands Inc.

$65.00

30.1

A

$0.62

 

Wednesday April 24:

Economic:  MBA Purchase Applications – 7:00, EIA Petroleum Status Report – 10:30.

Other:

Optionable Earnings:

Symbol

Company Name

April 19 close

IV30

B/A

XEPS

MEOH

Methanex Corp.

$37.52

35.5

D

$0.68

ABB

ABB Ltd.

$21.47

36.5

B

$0.33

AFL

AFLAC Inc.

$48.90

27.9

B

$1.63

ASH

Ashland Inc.

$84.25

32.1

B

$1.56

ATI

Allegheny Technologies Inc.

$27.35

46.1

B

$0.16

AVY

Avery Dennison Corporation

$40.13

30.5

B

$0.57

BA

Boeing Co.

$86.12

24.6

B

$1.47

CP

Canadian Pacific Railway Limited

$119.51

31.6

B

$1.22

DPS

Dr Pepper Snapple Group Inc

$47.11

25.8

B

$0.47

EMC

EMC Corporation

$22.34

35.2

B

$0.31

GD

General Dynamics Corp.

$65.99

25.0

B

$1.51

GRA

WR Grace & Co.

$73.76

28.9

B

$0.80

HES

Hess Corporation

$67.02

35.4

B

$1.58

LL

Lumber Liquidators Inc

$65.86

46.8

B

$0.44

LLY

Eli Lilly & Co.

$56.29

20.4

B

$1.04

LO

Lorillard Inc

$40.87

26.6

B

$0.63

MDCO

Medicines Co.

$33.32

35.2

B

($0.14)

MSI

Motorola Solutions, Inc.

$61.15

25.7

B

$0.56

NDAQ

NASDAQ Stock Market Inc.

$27.94

29.1

B

$0.62

NS

NuStar Energy L.P.

$53.88

30.3

B

$0.45

NSH

NuStar GP Holdings LLC

$32.82

30.9

B

$0.38

OC

Owens Corning Sales Inc.

$38.50

35.1

B

$0.23

OSIS

OSI Systems Inc.

$55.00

53.7

B

$0.73

PX

Praxair Inc.

$109.78

21.5

B

$1.38

TEL

TE Connectivity Ltd.

$39.11

24.7

B

$0.71

TKR

Timken Co.

$51.49

36.7

B

$0.80

TMO

Thermo Fisher Scientific Inc.

$80.08

25.5

B

$1.29

TROW

T. Rowe Price Group Inc.

$73.49

22.5

B

$0.89

TUP

Tupperware Brands Corporation

$81.18

31.7

B

$1.13

USG

USG Corp.

$23.87

55.4

B

$0.11

WHR

Whirlpool Corp.

$112.34

39.6

B

$1.91

WLP

WellPoint Inc.

$67.18

25.0

B

$2.37

AKAM

Akamai Technologies Inc.

$33.74

61.3

A

$0.34

ALGT

Allegiant Travel Company

$88.83

28.7

A

$1.49

ANGI

Angies List

$20.35

69.5

A

($0.17)

BYI

Bally Technologies Inc

$47.33

38.8

A

$0.85

CAKE

Cheesecake Factory Inc.

$37.59

30.5

A

$0.42

CCI

Crown Castle International Corp.

$74.35

22.1

A

$0.05

COG

Cabot Oil & Gas Corp.

$65.72

44.2

A

$0.26

CTXS

Citrix Systems Inc.

$67.33

45.7

A

$0.45

EQIX

Equinix Inc.

$209.16

33.3

A

$0.75

FFIV

F5 Networks Inc.

$72.54

42.0

A

$1.07

FLS

Flowserve Corp.

$152.25

29.4

A

$1.94

JAH

Jarden Corp.

$42.15

32.0

A

$0.23

KEX

Kirby Corp.

$73.04

34.0

A

$0.90

LRCX

LAM Research Corp.

$41.28

33.6

A

$0.38

MLNX

Mellanox Technologies Ltd.

$57.87

85.8

A

($0.20)

NOW

ServiceNow, Inc.

$36.07

60.5

A

($0.10)

ORLY

O’Reilly Automotive Inc.

$98.84

30.4

A

$1.34

QCOM

QUALCOMM Inc.

$63.64

27.3

A

$1.05

RYL

Ryland Group Inc.

$35.86

46.2

A

$0.30

SKX

Skechers USA Inc.

$21.60

51.3

A

$0.19

TAL

TAL International Group Inc.

$40.99

33.3

A

$1.05

TEX

Terex Corp.

$27.22

59.9

A

$0.29

TSCO

Tractor Supply Company

$106.21

35.7

A

$0.62

WDC

Western Digital Corp.

$49.25

48.9

A

$1.78

WLL

Whiting Petroleum Corp.

$44.57

37.2

A

$0.90

XLNX

Xilinx Inc.

$35.60

29.8

A

$0.45

 

Thursday April 25:

Economic:  Jobless Claims – 8:30, Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Report – 10:30, Kansas City Fed Manufacturing Index – 11:00.

Other: 

Optionable Earnings:

Symbol

Company Name

April 19 close

IV30

B/A

XEPS

SCCO

Southern Copper Corp.

$31.49

38.0

D

$0.63

ABC

AmerisourceBergen Corp.

$55.44

25.3

B

$0.88

ALK

Alaska Air Group Inc.

$58.71

34.1

B

$0.54

ALXN

Alexion Pharmaceuticals Inc.

$92.02

40.4

B

$0.52

AVT

Avnet Inc.

$31.93

36.1

B

$0.87

BIIB

Biogen Idec Inc.

$198.66

29.1

B

$1.57

BWA

BorgWarner Inc.

$70.84

30.5

B

$1.21

BC

Brunswick Corp.

$30.42

43.9

B

$0.62

BG

Bunge Ltd.

$67.25

28.0

B

$1.02

CAB

Cabela’s Inc.

$54.17

43.9

B

$0.59

CAM

Cameron International Corporation

$58.68

36.0

B

$0.74

CRR

Carbo Ceramics Inc.

$83.43

49.9

B

$0.91

CELG

Celgene Corporation

$119.08

27.9

B

$1.24

GTLS

Chart Industries Inc.

$73.86

44.4

B

$0.68

CL

Colgate-Palmolive Co.

$118.57

21.9

B

$1.32

COP

ConocoPhillips

$57.32

21.7

B

$1.39

CNX

CONSOL Energy Inc.

$33.18

40.5

B

$0.19

DO

Diamond Offshore Drilling Inc.

$65.91

27.6

B

$1.15

DOW

Dow Chemical Co.

$30.18

29.3

B

$0.60

DNKN

Dunkin Brands Group, Inc.

$37.25

29.7

B

$0.29

FNP

Fifth & Pacific Companies Inc.

$20.09

53.0

B

$1.46

HOG

Harley-Davidson Inc.

$51.05

34.0

B

$0.97

HP

Helmerich & Payne Inc.

$57.34

37.1

B

$1.29

KMT

Kennametal Inc.

$36.04

41.0

B

$0.71

LLL

L-3 Communications Holdings Inc.

$80.19

20.2

B

$1.93

LVLT

Level 3 Communications Inc.

$20.15

43.6

B

($0.11)

LINE

Linn Energy LLC

$37.93

29.3

B

$0.26

MJN

Mead Johnson Nutrition Company

$80.66

33.5

B

$0.86

NLSN

Nielsen Holdings N.V.

$34.72

28.7

B

$0.33

NBL

Noble Energy Inc.

$107.61

28.9

B

$1.21

OXY

Occidental Petroleum Corp.

$79.91

27.2

B

$1.65

PH

Parker-Hannifin Corp.

$85.93

33.5

B

$1.69

PTEN

Patterson-UTI Energy Inc.

$22.40

42.4

B

$0.36

POT

Potash Corp. of Saskatchewan Inc.

$38.25

23.0

B

$0.62

PRLB

Proto Labs, Inc.

$44.80

71.6

B

$0.32

PVR

PVR Partners, L.P.

$24.85

27.8

B

$0.06

RCL

Royal Caribbean Cruises Ltd.

$33.18

36.2

B

$0.19

SWY

Safeway Inc.

$26.62

36.2

B

$0.36

SWK

Stanley Black & Decker, Inc.

$75.91

26.0

B

$0.98

TWC

Time Warner Cable Inc.

$90.64

28.7

B

$1.38

UAL

UAL Corporation

$30.23

42.7

B

($0.94)

UTHR

United Therapeutics Corp.

$59.67

31.7

B

$1.46

WRLD

World Acceptance Corp.

$86.33

37.6

B

$3.07

YNDX

Yandex N.V.

$20.59

51.4

B

$0.18

ZMH

Zimmer Holdings Inc.

$72.97

22.9

B

$1.40

AEM

Agnico-Eagle Mines Ltd.

$32.31

52.0

A

$0.40

ALTR

Altera Corp.

$31.42

38.5

A

$0.33

AMZN

Amazon.com Inc.

$259.42

39.9

A

$0.10

BIDU

Baidu Inc

$86.47

42.3

A

$1.03

BMRN

BioMarin Pharmaceutical Inc.

$62.79

42.4

A

($0.28)

CERN

Cerner Corp.

$91.20

35.1

A

$0.59

CSTR

Coinstar Inc.

$54.26

62.6

A

$0.85

CRAY

Cray Inc.

$20.16

46.6

A

($0.32)

DECK

Deckers Outdoor Corp.

$56.98

61.1

A

($0.10)

EMN

Eastman Chemical Co.

$66.35

33.0

A

$1.57

ECHO

Electronic Clearing House Inc.

$20.54

30.3

A

$0.15

EXPE

Expedia Inc.

$60.50

51.8

A

$0.11

INFA

Informatica Corp.

$32.34

53.8

A

$0.24

KBR

KBR Inc.

$28.01

34.9

A

$0.47

KLAC

KLA-Tencor Corp.

$52.87

34.1

A

$0.86

MXIM

Maxim Integrated Products Inc

$30.95

29.8

A

$0.42

N

NetSuite, Inc.

$78.03

41.5

A

($0.14)

QLIK

Qlik Technologies Inc.

$23.96

78.9

A

($0.16)

RRC

Range Resources Corp.

$74.55

36.4

A

$0.18

RMD

ResMed Inc.

$44.04

33.4

A

$0.57

SWKS

Skyworks Solutions Inc.

$20.15

59.1

A

$0.39

SBUX

Starbucks Corp.

$57.72

27.1

A

$0.48

SYNA

Synaptics Inc.

$35.85

57.8

A

$0.36

THRX

Theravance Inc.

$32.56

78.2

A

($0.39)

VRSN

VeriSign Inc.

$45.33

38.6

A

$0.49

LVS

Las Vegas Sands Corp.

$51.96

38.5

 

$0.68

 

 

Friday April 26:

Economic:  GDP – 8:30, University of Michigan/Reuters Consumer Sentiment – 9:55.

Other: 

Optionable Earnings:

Symbol

Company Name

April 19 close

IV30

B/A

XEPS

ABBV

AbbVie Inc.

$42.32

25.7

B

$0.65

COV

Covidien Ltd.

$66.00

21.6

B

$1.10

DHI

DR Horton Inc.

$21.48

42.3

B

$0.20

DLR

Digital Realty Trust Inc.

$71.97

21.2

B

$1.18

HMSY

HMS Holdings Corp.

$25.13

52.9

B

$0.18

LYB

LyondellBasell Industries NV

$55.81

37.6

B

$1.44

NOV

National Oilwell Varco Incorporated

$64.61

33.0

B

$1.39

TOT

Total SA

$46.19

23.6

 

$1.81

TYC

Tyco International Ltd.

$30.88

26.3

B

$0.40

VFC

VF Corp.

$167.66

25.8

B

$2.17

WY

Weyerhaeuser Co.

$29.29

27.9

B

$0.22

 

 

 

 

Monday April 29:

Economic:  Personal Income and Outlays – 8:30, Pending Homes Sales Index – 10:00,n Dallas Fed Manufacturing Survey – 10:30..

 Optionable Earnings:

Symbol

Company Name

April 19 close

IV30

B/A

XEPS

ETN

Eaton Corporation, PLC

$55.80

31.1

B

$0.79

SOHU

Sohu.com Inc.

$48.60

43.7

B

$0.44

BWLD

Buffalo Wild Wings Inc.

$91.48

39.7

A

$0.99

BVN

Compania de Minas Buenaventura SA

$20.65

43.5

A

$0.67

HIG

Hartford Financial Services Group Inc.

$26.53

33.3

A

$0.81

HTWR

HeartWare International, Inc

$82.89

33.7

A

($1.15)

HLF

Herbalife Ltd.

$35.14

70.6

A

$1.05

JEC

Jacobs Engineering Group Inc.

$49.43

32.2

A

$0.83

NEM

Newmont Mining Corp.

$32.77

39.4

A

$0.89

PCL

Plum Creek Timber Co. Inc.

$51.28

25.0

A

$0.32

RGR

Sturm Ruger & Co. Inc.

$47.36

45.2

A

$1.04

SU

Suncor Energy Inc.

$27.61

31.5

A

$0.75

 

 

 

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