The Prepared Mind: August 4, 2014

“Chance favors the prepared mind.” – Louis Pasteur

Technical indicators turned bearish last.  The broke SPX broke 1950 – a very significant support level.  This move left the SPX chart decidedly bearish.  Equity put/call ratios have been bearish for weeks and will most likely to reflect this sentiment.  Market breadth indicators are also bearish.  WARNING:  An oversold indicator is not a buy signal.    The move in volatility confirms the bearish sentiment.  The VIX closed above 16% for the first time in over 60 trading days.  These types of moves are a clarion call for traders to be nimble.  Have a plan for any market moves – down or up.

Here is a summary of last week:

Index

July 25 Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

16,493.37

-467.20

-2.75%

-0.50%

16.11% (VXD)

S&P 500 (SPX)

1,925.15

-53.19

-2.69%

4.15%

17.03% (VIX)

NASDAQ 100 (NDX)

3,875.47

-82.33

-2.08%

7.89%

17.26% (VXN)

Russell 2000 (RUT)

1,114.03

-28.52

-2.50%

-4.26%

22.39% (RVX)

S&P 100 (OEX)

855.45

-24.43

-2.78%

3.84%

16.06% (VXO)

CBOE Volatility Index (VIX)

17.03

4.43

35.16%

NA

 

 

VIX futures set two new records on Friday.  The total VIX futures volume was 527,803.  This was an increase of over 16% of the old record of 449,955 contracts.  The extended session of the VIX set a new record of 68,033 contracts.  Conventional trading analysis suggested the large volume in VIX futures and options was a response from portfolio managers looking for downside market protection.  The VVIX (volatility on the VIX) was above 100 doe the first time since March 14, 2014.  The last time the VIX closed above 16 was on April 14.   A review of charts for the past year show that upward moves in the VIX futures, the VVIX and the cash VIX have been characterized by market reversals in the short term.  Be wary in the coming week.  Do not go “all in” on trying to pick a bottom on the market or a top on the VIX.  Market master John Templeton once commented that his billions were the result of never picking a bottom or a top.

 

Here is an overview of last week for the VIX and related products:

Index

Ticker

8/1 Close

Change

% Change

7/25 Close

CBOE Volatility Index VIX

17.03

4.34

34.20%

12.69

VIX August Future VXQ4

16.05

3.07

23.65%

12.98

VIX September Future VXU4

16.10

2.43

17.78%

13.67

VIX October Future VXV4

16.24

1.86

12.93%

14.38

CBOE Short-term Volatility Index VXST

19.01

7.17

60.56%

11.84

CBOE 3 Month Volatility Index VXV

16.78

2.78

19.86%

14.00

CBOE Mid-term Volatility Index VXMT

17.50

2.12

13.78%

15.38

VIX of VIX VVIX

101.11

20.03

24.70%

81.08

Long Vix ETP’s

 

   

 S&P 500  VIX Short Term Futures ETN VXX

33.01

4.18

14.50%

28.83

 S&P 500  VIX Mid-Tem Futures ETN VXZ

13.08

0.76

6.17%

12.32

Short Vix ETP’s

 

   

Daily Inverse VIX Short Term ETN XIV

37.75

(6.09)

-13.89%

43.84

Short VIX Short Term Futures ETF SVXY

74.01

(11.91)

-13.86%

85.92

 

The most succinct description of the market’s move was “taper tantrum.”  Most of the news was upbeat-economic reports, jobs, corporate earnings, inflation. and consumer confidence.  None of these were able to quell the sell=off.  The coming week has a surfeit of economic reports.  The lack of economic news will force traders to focus on corporate earnings and any global risks which may appear.

 

Earnings announcements will taper after this week.  Major announcements include:  Loews. Marathon Oil, Disney, HCP, ADM, Coach, CVS Caremark, Emerson Electric, Ralph Lauren, Viacom, Devon Energy, Time Warner, Chesapeake Energy, Fox, Transocean, CF Industries, CBS, and Monster Beverage.   .  I have scanned for stocks announcing earnings the coming week using the following criteria:  Price > 20, 30 Day Implied Volatility > 22, and Average Daily Option Volume > 400 contracts.  It is your responsibility to confirm these earnings dates. Earnings dates can and do change.

 

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.” – George Soros

Monday August 4:

Economic:  Gallup US Consumer Spending Measure – 8:30, TD Ameritrade IMX – 12:30PM..

International Economic:  Japan PMI Composite – 7:15 PM, China PMI Composite – 9:45 PM.

Optionable Earnings:

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

ALR

Alere Inc

$40.00

48.7

B

$0.58

BSFT

BroadSoft Inc

$24.40

70.6

B

($0.09)

CAH

Cardinal Health Inc

$71.65

27.0

B

$0.81

ISIS

ISIS Pharmaceuticals, Inc.

$30.99

65.4

B

($0.12)

KORS

Michael Kors Holdings Ltd

$81.48

54.7

B

$0.81

LGND

Ligand Pharmaceuticals Inc.

$49.17

65.6

B

$0.08

RLGY

Realogy Holdings Corp

$36.76

44.6

B

$0.55

AREX

Approach Resources Inc.

$21.04

51.1

A

$0.23

CAR

Avis Budget Group Inc.

$56.19

43.2

A

$0.06

CNQR

Concur Technologies, Inc.

$92.96

52.6

A

($0.07)

CRK

Comstock Resources Inc

$23.66

48.1

A

$0.10

ECOM

ChannelAdvisor Corp

$22.93

90.8

A

($0.37)

ININ

Interactive Intelligence Group Inc

$45.37

57.4

A

($0.39)

MRO

Marathon Oil Corporation

$38.75

25.8

A

$0.74

PHH

PHH Corporation

$23.35

35.4

A

$0.18

PXD

Pioneer Natural Resources

$221.46

36.6

A

$1.26

ROSE

Rosetta Resources Inc.

$51.07

41.7

A

$0.83

SALE

RetailMeNot Inc

$24.46

75.8

A

$0.11

THC

Tenet Healthcare Corp

$52.77

46.5

A

$0.00

TREX

Trex Company, Inc.

$28.15

45.7

A

$0.44

TSRA

Tessera Technologies, Inc.

$25.41

36.1

A

$0.00

 

Tuesday August 5::30,

Economic:   ICSC – Goldman Sachs Store Sales – 7:45, Gallup US ECI – 8:30, Redbook – 8:55, PMI Services Index – 9:45, Factory Orders – 10:00, ISM Non-Manufacturing Index.

International Economic:  EMU PMI Composite – 4:00 AM, EMU Retail Sales – 5:00AM.

Optionable Earnings:

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

ACT

Actavis PLC

$214.26

39.5

B

$3.35

AKRX

Akorn, Inc.

$33.93

47.7

B

$0.17

COH

Coach Inc

$34.56

40.7

B

$0.54

CRZO

Carrizo Oil & Gas, Inc.

$61.41

42.6

B

$0.51

DWRE

Demandware Inc

$60.24

63.7

B

($0.33)

ENBL

Enable Midstream Partners LP

$23.82

33.6

B

$0.29

EXH

Exterran Holdings, Inc.

$42.25

36.3

B

$0.16

EXPD

Expeditors International

$43.18

29.7

B

$0.47

HCLP

Hi-Crush Partners LP

$61.17

49.1

B

$0.75

MEG

Media General, Inc.

$20.16

43.7

B

$0.17

MGM

MGM Resorts International

$26.84

39.3

B

$0.12

NTI

Northern Tier Energy LP

$24.96

30.5

B

$0.68

PEGI

Pattern Energy Group Inc

$30.99

37.5

B

$0.27

REGN

Regeneron Pharmaceuticals Inc

$316.22

37.0

B

$2.33

TIME

Time  Inc.

$24.10

31.1

B

$0.07

VMC

Vulcan Materials Company

$63.13

34.8

B

$0.37

WLK

Westlake Chemical Corporation

$87.39

31.7

B

$1.43

WNR

Western Refining, Inc.

$40.96

36.1

B

$1.32

ZBRA

Zebra Technologies Corp.

$80.07

34.1

B

$0.81

ACAD

ACADIA Pharmaceuticals Inc.

$20.27

59.6

A

($0.17)

ATVI

Activision Blizzard, Inc.

$22.38

38.0

A

($0.01)

AXLL

Axiall Corp

$42.83

37.9

A

$0.51

CLR

Continental Resources, Inc.

$146.78

35.1

A

$1.73

EOG

EOG Resources Inc

$109.44

32.8

A

$1.35

FANG

Diamondback Energy Inc

$82.23

42.0

A

$0.72

FEYE

FireEye Inc

$35.50

85.2

A

($0.78)

FSLR

First Solar, Inc.

$63.11

59.9

A

$0.33

FUEL

Rocket Fuel Inc

$26.46

99.9

A

($0.35)

LBTYA

Liberty Global PLC

$41.60

29.0

A

$0.13

OAS

Oasis Petroleum Inc.

$53.45

39.8

A

$0.74

PRAA

Portfolio Recovery Associates, Inc.

$58.96

33.4

A

$0.90

SGY

Stone Energy Corporation

$38.05

48.5

A

$0.36

SMCI

Super Micro Computer, Inc.

$26.17

58.2

A

$0.36

TRMB

Trimble Navigation Limited

$30.90

45.7

A

$0.37

TTWO

Take-Two Interactive Software, Inc.

$22.38

47.2

A

($43.00)

WBMD

WebMD Health Corp.

$49.83

54.2

A

$0.19

XEC

Cimarex Energy Co

$139.02

35.5

A

$1.72

Z

Zillow Inc

$143.53

61.6

A

($0.23)

 

Wednesday August 6:

Economic:  MBA Purchase Application – 7:00, Gallup US Job Creation Index – 8:30, International Trade – 8:30, EIA Petroleum Status Report – 10:30.

International:   Germany Manufacturing Orders – 2:00 AM, Great Britain Industrial Production – 4:30, Italy GDP – 5:00m AM.

Optionable Earnings:

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

AOL

AOL, Inc.

$38.55

49.3

B

$0.30

APO

Apollo Global Management LLC

$26.26

37.2

B

$0.67

AVT

Avnet, Inc.

$42.33

29.7

B

$1.10

CHK

Chesapeake Energy Corporation

$26.37

34.1

B

$0.44

CLMT

Calumet Specialty Products Partners,

$31.04

29.5

B

$0.11

CMLP

Crestwood Midstream Partners LP

$21.76

31.6

B

$0.11

CSTE

Caesarstone Sdot-Yam Ltd

$43.36

47.5

B

$0.55

DBD

Diebold Inc

$37.68

28.6

B

$0.39

DNOW

NOW  Inc.

$32.19

36.4

B

$0.35

DVN

Devon Energy Corp

$75.50

27.8

B

$1.40

GWPH

GW Pharmaceuticals PLC- ADR

$84.60

68.6

B

$0.62

HFC

HollyFrontier Corp

$47.01

28.5

B

$1.01

HNT

Health Net, Inc.

$41.19

43.8

B

$0.56

NUS

Nu Skin Enterprises, Inc.

$58.69

52.6

B

$1.28

PH

Parker-Hannifin Corporation

$114.95

26.9

B

$2.07

RDC

Rowan Companies PLC

$30.52

25.4

B

$0.28

RL

Ralph Lauren Corp

$155.86

33.4

B

$1.75

SBGI

Sinclair Broadcast Group Inc

$32.31

40.5

B

$0.37

TAP

Molson Coors Brewing Company

$67.53

27.6

B

$1.44

TWX

Time Warner Inc

$83.02

29.7

B

$0.84

VIAB

Viacom, Inc.

$82.67

25.5

B

$1.44

WPX

WPX Energy Inc

$20.57

38.1

B

($0.01)

AR

Antero Resources Corp

$57.76

34.5

A

$0.39

CF

CF Industries Holdings, Inc.

$250.34

31.0

A

$6.46

COUP

Coupons.Com Inc

$20.53

83.5

A

($0.07)

CTL

CenturyLink, Inc.

$39.24

29.1

A

$0.64

CXO

Concho Resources Inc

$140.80

34.0

A

$0.97

DXCM

DexCom, Inc.

$37.68

62.6

A

($0.09)

DYN

Dynegy Inc

$26.55

37.6

A

$0.17

EMES

Emerge Energy Services LP

$106.66

48.1

A

$0.82

ETE

Energy Transfer Equity LP

$54.39

29.2

A

$0.33

EVHC

Envision Healthcare Holdings Inc

$35.75

40.9

A

$0.25

FNV

Franco-Nevada Corporation

$56.55

30.7

A

$0.23

FTK

Flotek Industries Inc

$28.85

42.3

A

$0.23

GMCR

Keurig Green Mountain Inc

$119.28

57.3

A

$0.87

GPOR

Gulfport Energy Corporation

$53.41

49.8

A

$0.17

MTDR

Matador Resources Co

$27.04

48.0

A

$0.27

MWE

Markwest Energy Partners LP

$69.80

25.1

A

$0.19

NPSP

NPS Pharmaceuticals, Inc.

$27.94

64.5

A

($0.01)

PAGP

Plains GP Holdings LP

$29.71

29.9

A

$0.10

PPO

Polypore International, Inc.

$43.10

52.0

A

$0.32

PRU

Prudential Financial Inc

$86.97

27.4

A

$2.35

PRXL

PAREXEL International Corporation

$53.56

43.3

A

$0.61

QEP

QEP Resources Inc

$33.05

28.6

A

$0.32

RGP

Regency Energy Partners LP

$30.17

25.7

A

$0.15

RIG

Transocean LTD

$40.34

29.1

A

$1.10

SN

Sanchez Energy Corp

$31.72

50.1

A

$0.19

SYMC

Symantec Corporation

$23.66

33.8

A

$0.37

THRX

Theravance Inc

$21.70

61.0

A

$0.57

TROX

Tronox Ltd

$26.54

47.2

A

($0.29)

TXTR

Textura Corp

$24.97

81.3

A

($0.19)

ZU

Zulily Inc

$34.62

87.2

A

$0.01

 

Thursday August 7:

Economic:  Chain Store Sales, Weekly Jobless Claims – 8:30, Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Status Report – 10.30.

International Economic:  Bank of Japan Announcement, Germany Industrial Production 2:00 AM, Bank of England Announcement – 7:00.

Optionable Earnings: 

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

AFSI

Amtrust Financial Services, Inc.

$42.64

51.4

B

$1.01

ATHM

Autohome Inc (ADR)

$37.05

65.4

B

$0.26

AUXL

Auxilium Pharmaceuticals, Inc.

$20.02

51.5

B

($0.44)

CBSO

CBS Outdoor Americas Inc

$33.29

29.7

B

$0.22

CNQ

Canadian Natural Resource Ltd (USA)

$43.60

25.8

B

$0.91

CTB

Cooper Tire & Rubber Co

$28.89

38.0

B

$0.80

GOLD

Randgold Resources Ltd. (ADR)

$86.14

30.1

B

$0.80

HAR

Harman International Industries

$108.55

43.6

B

$1.22

ICE

Intercontinental Exchange Inc

$192.22

26.3

B

$2.07

IDCC

InterDigital, Inc.

$44.09

44.2

B

$2.13

LNCO

LinnCo LLC

$29.09

26.4

B

$0.51

LPI

Laredo Petroleum Inc

$27.14

44.5

B

$0.17

MNK

Mallinckrodt PLC

$69.62

40.3

B

$0.86

MPEL

Melco Crown Entertainment Ltd (

$33.20

48.4

B

$0.37

MYL

Mylan Inc

$49.37

31.4

B

$0.70

NRG

NRG Energy Inc

$30.96

28.2

B

$0.21

NXST

Nexstar Broadcasting Group, Inc.

$46.59

49.9

B

$0.32

NYLD

NRG Yield Inc

$52.25

33.9

B

$0.35

QIWI

Qiwi PLC

$36.05

66.8

B

$0.42

RGLD

Royal Gold, Inc USA)

$75.57

33.3

B

$0.29

SNI

Scripps Networks Interactive, Inc.

$82.41

28.4

B

$1.15

SRPT

Sarepta Therapeutics Inc

$21.34

78.1

B

($0.76)

SSYS

Stratasys Ltd

$100.58

53.0

B

$0.32

TDC

Teradata Corporation

$42.16

40.2

B

$0.61

TK

Teekay Corporation

$55.66

27.6

B

($0.12)

WWAV

WhiteWave Foods Co

$29.79

46.0

B

$0.22

AGO

Assured Guaranty Ltd.

$22.32

37.7

A

$0.50

AIRM

Air Methods Corp

$50.25

52.0

A

$0.61

AL

Air Lease Corp

$34.45

41.8

A

$0.53

ALNY

Alnylam Pharmaceuticals, Inc.

$54.12

59.8

A

($0.54)

ATLS

Atlas Energy LP

$45.35

37.8

A

$0.27

BCEI

Bonanza Creek Energy Inc

$56.06

50.3

A

$0.75

BOFI

BofI Holding, Inc.

$74.59

47.4

A

$1.01

CBS

CBS Corporation

$56.83

30.4

A

$0.73

CFN

CareFusion Corporation

$43.79

29.9

A

$0.73

CLVS

Clovis Oncology Inc

$36.45

74.4

A

($0.93)

CSC

Computer Sciences Corporation

$62.39

38.9

A

$0.94

JOE

The St. Joe Company

$22.84

40.3

A

$0.01

LGF

Lions Gate Entertainment Corp.

$30.80

39.2

A

$0.14

MDVN

Medivation Inc

$74.23

54.4

A

$0.25

MED

Medifast Inc

$28.71

53.0

A

$0.40

MELI

Mercadolibre Inc

$92.50

52.5

A

$0.56

MNST

Monster Beverage Corp

$63.96

38.2

A

$0.76

OLED

Universal Display Corporation

$30.66

72.4

A

$0.40

SCTY

SolarCity Corp

$71.53

70.6

A

($1.00)

SFM

Sprouts Farmers Market Inc

$30.51

44.1

A

$0.18

SLXP

Salix Pharmaceuticals, Ltd.

$131.91

50.5

A

$1.28

TUMI

Tumi Holdings Inc

$21.08

49.0

A

$0.19

UBNT

Ubiquiti Networks Inc

$38.20

84.8

A

$0.50

 

Friday August 8:

Economic:  Productivity and Costs-8:30.

International Economic:  China Merchandise Trade Balance, Germany Merchandise Trade – 2:00 AM, Great Britain Merchandise Trade- 4:30, China CPI and PPI – 9:30PM.

Optionable Earnings: 

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

ERF

Enerplus Corp (USA)

$22.92

27.9

B

$0.36

MGA

Magna International Inc. (USA)

$107.40

25.6

B

$2.22

PDCE

PDC Energy Inc

$54.24

48.1

B

$0.36

 

Monday August 11:

Economic:  No major announcements.

International Economic:  Japan  PPI – 7:50 PM.

Optionable Earnings:

Symbol

Company Name

Aug 1 Close

IV30

B/A

XEPS

BITA

Bitauto Hldg Ltd (ADR)

$54.36

70.7

B

$0.35

EVEP

EV Energy Partners, L.P.

$36.66

28.4

B

$0.32

PCLN

Priceline Group Inc

$1,242.45

37.0

B

$11.33

RGEN

Repligen Corporation

$20.97

50.9

B

$0.06

WAC

Walter Investment Management Corp

$27.58

57.8

B

$1.31

MR

Mindray Medical International Ltd

$30.05

57.2

A

$0.59

MTZ

MasTec, Inc.

$27.19

48.2

A

$0.37

RAX

Rackspace Hosting, Inc.

$30.29

64.5

A

$0.17

 

 

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