What's Frank Thinking? rss
Gone fishin'?

 

Hump Day - Wednesday, May 27th, 2015, Rhinelander, Wisconsin, USA 
 
It is very early in this summertime 5-week monthly expiration cycle ... need we say more. Maybe, if we catch enough fish, we will invite you over for a Walsh's Lakeside fish fry. The only way we can do that is to go out on the lake. Despite the big Tuesday (5/26) sell-off ( S&P 500 -1.03%, Dow Jones -1.04%, Nasdaq -1.20%), the markets will be here tomorrow and most of our positions aren't in this June cycle anyway. No, we aren't merely celebrating the Commodore, Cornelius Vanderbilt's, 1794 birthday, although the incredible shipping and railroad magnate is one of our financial heroes. Oddly enough it is also the birthday of the Commodore's famous railroad foe, Jay Gould. Of course that makes us think about our Norfolk Southern (NSC*) short strangle, but that was sold weeks ago via a leg (80 puts/110 calls +2.47), and thanks to our Summer Avoidance Plan (SAP), is all-the-way-out in the September monthly cycle, so we won't even take a peek. 
 
Right now, as we prepare to head-out on the lake in the rain, it's the walleyes, northerns, and large mouths that are our only concern. Watch out for big moves in KORS to the downside and TIF to the upside. Are the grains going to at least try to rally? AAPL* and FB* look higher, as do DAL*, LVS*, GM*, MSFT* and Ford*. We do have alerts set on the SPUs (/ESM5*) at 2120 on upside and 2070 to the downside. There are also alerts set on over 30 of our underying equities, along with oil (/CLN5*) and the bonds (/ZBU5*). Note the asterisk following the symbols - yes, we do have positions in them all, but the fish are screaming our name! Have a great end of the week. 
 
"If I had learned education, I would not have had time to learn anything else." -- Cornelius Vanderbilt 
 
- Please join us in the daily Swim Lesson chat room - 10:30 -noon CT. And if you are looking for a fabulous full-day of stock/options/futures education, - sign up for one of the upcoming Saturday Market Drive events - the next one is in Chicago on June 20th. Go to https://wwws.tdameritradeconferences.com/marketdrive. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
(* = FHW position)
fhwoption@hotmail.com
What's Frank Thinking? | 5/27/2015 9:13:22 AM | 0 Comments
A Fiat/Chrysler/GM? "Atlas shrugged"

 

Tuesday, 5/26/15, Rhinelander, Wisconsin, USA 
- We hope everyone had a nice long Memorial Day weekend; thanked a Vet and somehow paid tribute to our military, especially those that have made the untimate sacrifice for this great nation. 
- Births: Al Jolson (1886); John Wayne (1907); Jay Silverheels (1919); Miles Davis (1926); Stevie Nicks (1948); Hank Williams Jr (1949). Deaths: Charles Mayo (1939); Edsel Ford (1943). The 1st Bank of North America was incorporated on this day in 1781, and the Dow Jones began an index of 12 industrial stocks in 1896 (closed that day at 40.94). On 5/26/1924 President Calvin Coolidge signed the Immigration Law (restricting immigration), and on May 26th, 1927, Ford Motors (F*) manufactured it's 15 millionth Model T automobile. San Francisco Bay's Golden Gate Bridge opened on this day in 1937, and in 1997 Sammy Sosa of the Cubs and the Pirates' Tony Womack both hit in the park homers. 
- June SPUs (ESM5 -0.13%) are currently trading down -3.50 points (-0.16%), hovering around the 2121 area. Friday's (5/22) closing prices: S&P 500 -0.22%, Dow Jones -0.29%, Nasdaq -0.05%. We now understand that Fiat/Chrysler (FCAU) approached General Motors (GM*) about a merger last March - to quote Ayn Rand, "Atlas shrugged". The European markets might be in turmoil, but their largest discount airline is flying high. All of Ryanair's (RYAAY) numbers saw big upticks, with the airline saying it expects to carry over 100 million passengers this year. The US dollar (/DXM5) is up this morning, trading at a 4-week high. As the US greenback has rallied most commodities have weakened, with gold (/GCM5*) back under 1200, off this morning another 13.60 to 1188.8. Crude oil for July delivery (/CLN5*) is also lower, after trading at 60.25 overnight, oil is now near 59.00. Corn (/ZCN5), wheat (/ZWN5) and beans (/ZSN5) are all lower. 
- Today's possible movers: RYAAY, DAL*, TWC, PBR*, CHTR, GM*, FSLR, SUNE*, AAPL*, PBR*, MRVL*, CZR*.
- Today's economic events: 
Durable Goods
FHFA House Price Index
S&P Case-Shiller Home Price Index
PMI Services Index Flash
New Home Sales
Richmond Fed Mfg.
Consumer Confidence
State Street Investor Confidence Index
Dallas Fed Manufacturing Outlook
Results of $26B, 2-Year Note Auction
- Notable earnings before the opening: AZO, CAE, CYRN; and after today's close: FWM, NMBL, TDW, TIVO, VNET, WDAY. 
 
"They'll know you've arrived when you pull up in a '58 Edsel....” -- Edsel Ford
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
- Remember to sign into the daily live Swim Lesson - found up on the Support/Chat tab, running between 10:30 - noon CT. The list of upcoming Market Drive events is now on the TDAmeritrade web-site - with the next show in Chicago on 6/20. To sign up for one of the upcoming Market Drives go to www.tdameritrade.com/registerformarketdrive, or for the July San Francisco Money Shows go to www.moneyshow.com 
If you are not a TD Ameritrade / thinkorswim (AMTD*) customer you can open a PaperMoney account at www.thinkorswim.com 
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 5/26/2015 8:49:16 AM | 0 Comments
Taylor Swift concert for 2 Gs? C'mon man!

 

Thursday, May 21, 2015, Rhinelander, Wisconsin, USA
 
- ATTENTION, ATTENTION, PLEASE - Good tickets for the Chicago Taylor Swift concert in July are over $2,000! Face value for tickets in the orchestra pit are in fact $2,275 "+" - the plus sign stands for - they go higher, but we were afraid to look. One of our niece's daughters wants to go to the show on Saturday night, July 18. But, we can't go, seeing how it is monthly expiration Friday - and regretfully (read: thankfully) we will be at the San Francisco Money Show. Taylor is a very talented young artist, but 2,000 bucks? The other performers are Vance Joy and Shawn Mendez, and no, we have never heard of either of her supporting "stars". Whew, glad we are out of town - the family pressure is off! Two grand? C'mon man! 
- Today's birthdays: Plato (428 BC); Armand Hammer (1898); Guy de Rothschild (1909); Raymond Burr (1917); Mr T. (1952). Deaths: Hernando de Soto (1542); Vaughn Monroe (1973). In 1804, on May 21st, the Lewis & Clark expedition began, and in 1861, Richmond, VA was designated the Capital of the Confederacy. The Greyhound Bus Company was formed in Minnesota in 1914, and in 1918, on May 21, the US Congress passed the amendment allowing women to vote. In 1929 the NYSE installed the 1st automatic electric quotation boards on the trading floor. Amelia Earhart completed the 1st solo transatlantic flight by a woman in 1932, and in 1969, Robert Kennedy's killer, Sirhan Sirhan, was sentenced to death. On 5/21/1990 the Dow Jones Average hig a record 2,844.68, the Dow is now closer to 18,285. Two-years ago (5/21/13) the SPUs (/ES) were trading 1665; One year ago (5/21/14) they were trading in the 1860 range; they traded 2120 overnight, were near 2094 last week and are currently trading at 2120 (6:30 AM AZ time). 
- US equities ended relaively flat on Wednesday (5/20/15). You know its a slow day when DuPont (DD - 0.83%) is the big mover! (S&P 500 -0.09%, Dow -0.15%, NASDAQ +0.03%). Crude-oil futures (/CLN4*) rose 1.71% to $58.98 a barrel, they are trading higher again this morning - now near 59.80. The VIX rose 0.23% to 12.88.  The small-cap stocks were also relatively flat, with the Russell 2000 (RUT+0.17%). The 30-year bond (/ZBM5*) yield edged up to 3.05%; the 10-year and 5-year yields fell to 2.25% and 1.55% respectively. It seems as if traders are sitting on the edge of their seats waiting for Janet Yellen’s speech on Friday, even though many feel a June rate hike is already off the table. Please note that the current "Active" June bonds ("M") will be flipped on Wednesday, May 27th, with the Septembers ("U") becoming the default contract automatically appearing on your Watchlists. Make sure if you have any positions that you are trading the correct contracts. If you aren't sure - call the AMTD* trade desk at 866-839-1100.
- Today's possible movers: YOKU*, MSFT*, TGT, CRM, OCR, AAPL*, FB*, SUNE*,  
- Today's economic events:
Initial Jobless Claims
Chicago Fed National Activity Index
PMI Manufacturing Index Flash
Bloomberg Consumer Comfort Index
Philly Fed Business Outlook
Existing Home Sales
Leading Indicators
EIA Natural Gas Inventory
Kansas City Fed Mfg Survey
Money Supply
Fed Balance Sheet
- Notable earnings before today's opening: AAP, BAH, BBY, BKE, BONT, BRC, DCI, DLTR, KIRK, MNRO, NM, PDCO, QSII, SMRT, TSL, TT; and after the close: ACXM, ARO, BRCD, GMAN, GPS, HPQ, INTU, JMEI, LGF, MRVL*, NWY, OESX, ROST, TFM.
 
"Opinion is the medium between knowledge and ignorance.” -- Plato
 
- If you are looking for a fabulous full-day of stock/options/futures education, please sign up for one of the upcoming Saturday events. The next shows are in Chicago (6/20), and New York (9/26) - hope to see you there.
www.tdameritrade.com/registerformarketdrive. And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169, or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com  
 
FHW
(* = FHW position) 
fhwoption@hotmail.com 
What's Frank Thinking? | 5/21/2015 7:39:57 AM | 0 Comments
Taylor Swift concert for 2 Gs? C'mon man!

 

Thursday, May 21, 2015, Rhinelander, Wisconsin, USA
 
- ATTENTION, ATTENTION, PLEASE - Good tickets for the Chicago Taylor Swift concert in July are over $2,000! Face value for tickets in the orchestra pit are in fact $2,275 "+" - the plus sign stands for - they go higher, but we were afraid to look. One of our niece's daughters wants to go to the show on Saturday night, July 18. But, we can't go, seeing how it is monthly expiration Friday - and regretfully (read: thankfully) we will be at the San Francisco Money Show. Taylor is a very talented young artist, but 2,000 bucks? The other performers are Vance Joy and Shawn Mendez, and no, we have never heard of either of her supporting "stars". Whew, glad we are out of town - the family pressure is off! Two grand? C'mon man! 
- Today's birthdays: Plato (428 BC); Armand Hammer (1898); Guy de Rothschild (1909); Raymond Burr (1917); Mr T. (1952). Deaths: Hernando de Soto (1542); Vaughn Monroe (1973). In 1804, on May 21st, the Lewis & Clark expedition began, and in 1861, Richmond, VA was designated the Capital of the Confederacy. The Greyhound Bus Company was formed in Minnesota in 1914, and in 1918, on May 21, the US Congress passed the amendment allowing women to vote. In 1929 the NYSE installed the 1st automatic electric quotation boards on the trading floor. Amelia Earhart completed the 1st solo transatlantic flight by a woman in 1932, and in 1969, Robert Kennedy's killer, Sirhan Sirhan, was sentenced to death. On 5/21/1990 the Dow Jones Average hig a record 2,844.68, the Dow is now closer to 18,285. Two-years ago (5/21/13) the SPUs (/ES) were trading 1665; One year ago (5/21/14) they were trading in the 1860 range; they traded 2120 overnight, were near 2094 last week and are currently trading at 2120 (6:30 AM AZ time). 
- US equities ended relaively flat on Wednesday (5/20/15). You know its a slow day when DuPont (DD - 0.83%) is the big mover! (S&P 500 -0.09%, Dow -0.15%, NASDAQ +0.03%). Crude-oil futures (/CLN4*) rose 1.71% to $58.98 a barrel, they are trading higher again this morning - now near 59.80. The VIX rose 0.23% to 12.88.  The small-cap stocks were also relatively flat, with the Russell 2000 (RUT+0.17%). The 30-year bond (/ZBM5*) yield edged up to 3.05%; the 10-year and 5-year yields fell to 2.25% and 1.55% respectively. It seems as if traders are sitting on the edge of their seats waiting for Janet Yellen’s speech on Friday, even though many feel a June rate hike is already off the table. Please note that the current "Active" June bonds ("M") will be flipped on Wednesday, May 27th, with the Septembers ("U") becoming the default contract automatically appearing on your Watchlists. Make sure if you have any positions that you are trading the correct contracts. If you aren't sure - call the AMTD* trade desk at 866-839-1100.
- Today's possible movers: YOKU*, MSFT*, TGT, CRM, OCR, AAPL*, FB*, SUNE*,  
- Today's economic events:
Initial Jobless Claims
Chicago Fed National Activity Index
PMI Manufacturing Index Flash
Bloomberg Consumer Comfort Index
Philly Fed Business Outlook
Existing Home Sales
Leading Indicators
EIA Natural Gas Inventory
Kansas City Fed Mfg Survey
Money Supply
Fed Balance Sheet
- Notable earnings before today's opening: AAP, BAH, BBY, BKE, BONT, BRC, DCI, DLTR, KIRK, MNRO, NM, PDCO, QSII, SMRT, TSL, TT; and after the close: ACXM, ARO, BRCD, GMAN, GPS, HPQ, INTU, JMEI, LGF, MRVL*, NWY, OESX, ROST, TFM.
 
"Opinion is the medium between knowledge and ignorance.” -- Plato
 
- If you are looking for a fabulous full-day of stock/options/futures education, please sign up for one of the upcoming Saturday events. The next shows are in Chicago (6/20), and New York (9/26) - hope to see you there.
www.tdameritrade.com/registerformarketdrive. And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169, or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com  
 
FHW
(* = FHW position) 
fhwoption@hotmail.com 
What's Frank Thinking? | 5/21/2015 7:38:59 AM | 0 Comments
It's Cheeseland for a reason!

 

Wednesday, May 20th, 2015, Rhinelander, Wisconsin, USA 
 
Yes, we love our Wisconsin home and all that goes with it. No, we aren't talking boat rides, hunting, fishing, golf or simply lazing around on the lakeside deck, either. Those are definitely some of the benefits of our summertime Northwood's manse, but there are an innumerable amount of other harder to define upticks. There is a reason Wisconsin is known by some as the Dairy State, and all of the dairy products found here in the Badger State are about as good as they get. I may have a slight bias, but my tastebuds don't lie. Milk and cheese just taste better here than they do in our other home state - Arizona. Some say the reasons are the higher Wisconsin humidity making the dairy products seem creamier and tastier, or the relative proximity of the dairy product providers. But we have been at a cheese tasting at a humid Vermont dairy farm, literally yards from the rennet folding, and Wisconsin, at least for us, still has it beat! 
 
A couple months ago we were worried about some Wisconsin dairy farmer friends as the price of their products was falling dramatically. Milk was $24 per hundredweight (about the size of a 10-gallon tank) last year; down to about $18 to start this year, and was expected to bottom out in April close to $14. The falling price of fuel has definitely helped some of the larger groups, but the small guys that stay closer to home were expecting another difficult year. In 2009 the price of a hundredweight was as low as $12.81, rising over $20 in 2011 to last year's record breaking $24.00. But April brought almost across the board hikes in cheese and milk products, with, for example on the CME, a 40-pound block of cheddar going from $1.5549 per pound in March to almost $1.61, and butter averaged $1.52 in March, but is now closer to $1.80. Domestic demand has increased by more than the 1.7% quarterly uptick in milk production, and this is a good thing as exports have weakend due to lowered world prices and the strong U.S. dollar. 
 
Anyway, there are a lot of major players in the dairy field, and we have had positions in some of them. If you eat a lot of pizza, the largest mozzarella maker is privately held Denver-based Leprino Foods. But there are always midwest based Kraft (KRFT) and Mondelez (MDLZ), both pay dividends and have enough open interest with tight bid/ask spreads to make stock / options plays possible. Dean Foods (DF) and Neste's (NSRGY) are others, but Dean's has low options liquidity, and Nestle's is an ADR with no options. Safeway's (SWY) dairy division puts it in 27th place among those in the sector, and we use to trade that grocery chain, before they were taken over by Cereberus. Many of our Wisconsin favorite dairy products, in fact, come from relatively small outlets that are part of much larger privately held conglomerates or dairy cooperatives - like Land 'Lakes and Agropure. It is almost snack time, and that Agropur cheddar, from Weyauwega, in our refrigerator is screaming out to us. Or is it that great aged cheddar from Carr Valley in LaValle? Of course when we mentioned our refrigerator we also thought of Maytag, in Iowa, where the best American Bleu Cheese is made. But that Maytag/Whirlpool (WHR) story is a long one to be told another day. 
 
"Did you know the average American eats about 23 pounds of cheese a year?" "What does that have to do with my 50 lot of puts?" "Absolutely nothing, just an interesting statistic." HUH and FHW (OEX pit circa 1986)
 
- Please join us in the daily Swim Lesson chat room - 10:30 -noon CT. And if you are looking for a fabulous full-day of stock/options/futures education, - sign up for one of the upcoming Saturday Market Drive events - the next one is in Chicago on 6/20. Go to https://wwws.tdameritradeconferences.com/marketdrive/
Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). 
Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
(* = FHW position)
fhwoption@hotmail.com
What's Frank Thinking? | 5/20/2015 6:32:19 AM | 0 Comments
May 19, 2015 - snow in Rhinelander!

 

Tuesday, 5/19/15, Rhinelander, Wisconsin, USA 
- Births: Ho Chi Minh (1890); Peter Townsend (1945); Bill Laimbeer (1957); Nicole Brown Simpson (1959); Kevin Garnett (1976). Deaths: Anne Boleyn (beheaded - 1536): Lord Rochford (brother of Anne Boleyn, 1536 - also beheaded); Ogden Nash (1971); Jacqueline Kennedy Onassis (1994). It was on this day in 715 that St.Gregory ll began his reign as Pope, and in 1848, Mexico finally ceded Texas to the US, ending the war. The Homestead Act became law on 5/19/1862, opening up the West with inexpensive land, and in 1864 the Ringling Brothers circus premiered. In 1910, pitching for the Cleveland Indians, Cy Young got his 500th win, and in 1921 the US Congress curbed immigration and set a national quota system. Is it time to do it again? Secretariat won the 99th Preakness in 1973, with Ron Turcotte aboard. In 1989 the Dow Jones Average closed over 2,500 for the 1st time (2,501.1), then, in 1993, the Dow closed over 3,500 for 1st time (3,500.03).
- US stocks were mostly higher on Monday (5/18/15), with Intel (INTC* +1.27%) and Apple (AAPL* +1.10%) leading the major indices. (S&P 500 +0.30%, Dow +0.14%, NASDAQ +0.60%). In Monday's options trade, out of the top-10 in daily volume, AAPL had 6 and MSFT had two! Crude-oil futures (/CLN5*) fell sligthly, along with the metals and soft commodities also being mostly lower. Both the Dow Jones Industrial Average and S&P 500 closed at record highs of 18,298.88 and 2,129.20 respectively. Small-cap stocks gained with the soon to be readjusted Russell 2000 (RUT +1.09%). Despite the rally, the VIX rose 2.83% to 12.73. Banks and brokers, XLF nearing 25, liked the falling bond markets that lead to higher interest rates (30-year rose to 3.02%, the 10-year to 2.23%), although the 30s are moving higher this morning - currently trading at 154'05. The June dollar index (/DXM5) continued its slide - having been over 100 in March, it dropped into the 93 handle on Monday. A top European Central Bank official says the bank will hike May and June bond purchases intended to stimulate the eurozone's economic recovery, saying the bank would buy up to 60 billion euros per month in an effort to bump up inflation.
- Today's possible movers: HD, A, AAPL*, TTWO, PBR*, MSFT*, IOC*, LINE, SLV*, URBN.
- Today's economic events: 
Housing Starts
Redbook Chain Store Sales
- Notable earnings before the opening: AINV, CMCM, DKS, EJ, HD, LEJU, RRGB, SSI, TJX, WBAI, WMT*; and after today's close: ADI, ADSK, CSC, DY, ETSY, HEI, NDSN, QIHU, TEDU, VSAT. 
 
"It's the middle-of-May, what are you going to do all summer?" "Drink, just like every other season." -- BAM and HUH (OEX pit circa 1986) 
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
- Remember to sign into the daily live Swim Lesson - found up on the Support/Chat tab, running between 10:30 - noon CT. The list of upcoming Market Drive events is now on the TDAmeritrade web-site - with the next show in Chicago on 6/20. To sign up for one of the upcoming Market Drives go to www.tdameritrade.com/registerformarketdrive, or for the July San Francisco Money Shows go to www.moneyshow.com 
If you are not a TD Ameritrade / thinkorswim (AMTD*) customer you can open a PaperMoney account at www.thinkorswim.com 
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 5/19/2015 7:25:33 AM | 0 Comments
May 19, 2015 - snow in Rhinelander!

 

Tuesday, 5/19/15, Rhinelander, Wisconsin, USA 
- Births: Ho Chi Minh (1890); Peter Townsend (1945); Bill Laimbeer (1957); Nicole Brown Simpson (1959); Kevin Garnett (1976). Deaths: Anne Boleyn (beheaded - 1536): Lord Rochford (brother of Anne Boleyn, 1536 - also beheaded); Ogden Nash (1971); Jacqueline Kennedy Onassis (1994). It was on this day in 715 that St.Gregory ll began his reign as Pope, and in 1848, Mexico finally ceded Texas to the US, ending the war. The Homestead Act became law on 5/19/1862, opening up the West with inexpensive land, and in 1864 the Ringling Brothers circus premiered. In 1910, pitching for the Cleveland Indians, Cy Young got his 500th win, and in 1921 the US Congress curbed immigration and set a national quota system. Is it time to do it again? Secretariat won the 99th Preakness in 1973, with Ron Turcotte aboard. In 1989 the Dow Jones Average closed over 2,500 for the 1st time (2,501.1), then, in 1993, the Dow closed over 3,500 for 1st time (3,500.03).
- US stocks were mostly higher on Monday (5/18/15), with Intel (INTC* +1.27%) and Apple (AAPL* +1.10%) leading the major indices. (S&P 500 +0.30%, Dow +0.14%, NASDAQ +0.60%). In Monday's options trade, out of the top-10 in daily volume, AAPL had 6 and MSFT had two! Crude-oil futures (/CLN5*) fell sligthly, along with the metals and soft commodities also being mostly lower. Both the Dow Jones Industrial Average and S&P 500 closed at record highs of 18,298.88 and 2,129.20 respectively. Small-cap stocks gained with the soon to be readjusted Russell 2000 (RUT +1.09%). Despite the rally, the VIX rose 2.83% to 12.73. Banks and brokers, XLF nearing 25, liked the falling bond markets that lead to higher interest rates (30-year rose to 3.02%, the 10-year to 2.23%), although the 30s are moving higher this morning - currently trading at 154'05. The June dollar index (/DXM5) continued its slide - having been over 100 in March, it dropped into the 93 handle on Monday. A top European Central Bank official says the bank will hike May and June bond purchases intended to stimulate the eurozone's economic recovery, saying the bank would buy up to 60 billion euros per month in an effort to bump up inflation.
- Today's possible movers: HD, A, AAPL*, TTWO, PBR*, MSFT*, IOC*, LINE, SLV*, URBN.
- Today's economic events: 
Housing Starts
Redbook Chain Store Sales
- Notable earnings before the opening: AINV, CMCM, DKS, EJ, HD, LEJU, RRGB, SSI, TJX, WBAI, WMT*; and after today's close: ADI, ADSK, CSC, DY, ETSY, HEI, NDSN, QIHU, TEDU, VSAT. 
 
"It's the middle-of-May, what are you going to do all summer?" "Drink, just like every other season." -- BAM and HUH (OEX pit circa 1986) 
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
- Remember to sign into the daily live Swim Lesson - found up on the Support/Chat tab, running between 10:30 - noon CT. The list of upcoming Market Drive events is now on the TDAmeritrade web-site - with the next show in Chicago on 6/20. To sign up for one of the upcoming Market Drives go to www.tdameritrade.com/registerformarketdrive, or for the July San Francisco Money Shows go to www.moneyshow.com 
If you are not a TD Ameritrade / thinkorswim (AMTD*) customer you can open a PaperMoney account at www.thinkorswim.com 
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 5/19/2015 7:25:15 AM | 0 Comments
Will airlines continue to fly?

 

Monday, May 18, 2015, Rhinelander, Wisconsin, USA 
 
It was great seeing so many friends/clients at the Las Vegas Money Show! The next trade show is in San Francisco in July - see ya there! A reprint from 2012. Yes, thankfully, we do still carry positions in both RJET* and DAL*
 
"Are you constructively bullish the airlines? Have you taken any trips lately and noticed how crowded the airports were? Tried to book any "cheap" flights in the last few months, only to find they are about double what they were last summer? Is the upcoming summer season going to be a good one for the air travel industry? Have the airlines hedged their fuel costs and cut their number of flights, so they are actually becoming profitable?  If you answered "yes" to all or even most of these questions, then it sounds like you have to be more-or-less bullish the airlines. If so, and you want to own a big flyer or two, there are a couple of "sweet" Texas Long plays that can be made. The big caveat is that you WANT (need?) to own the underlying stock, at least for 50 days or so, but we feel the risk reward is at least as safe as flying on one of their airplanes, and the annualized return - if rolled, might be tremendous!  
The way we would make it play is to pick the airline that we like best and/or fly the most, whose stock we want to own, then buy the relatively low-cost stock and sell either a straddle or a strangle against the long stock. Republic Airways (RJET*), the parent of one of our most flown airlines (Frontier), can be bought for around $5.00, and the May 5 straddle can be sold for about .90 cents. That would make you long the stock and short May 5 covered calls and naked short the May 5 puts at a net cost of about $4.10. The worst case scenario, on May expiration, would be the stock to be under $4.10, but at that time the short calls would simply expire and the naked short puts could be rolled to a further out month. If the stock flies (sorry) up over $5, then the May 5 puts would expire and the May 5 calls could be rolled, or you could just allow the stock to be called for a nice .90 cent gain (minus transaction and exercise costs). 
A similar Texas Long play could be made in another of our favorites, Delta (DAL*). The stock is about $10, and either the May 10 straddle could be sold for about $1.45 or the May 11 call and May 9 put strangle could be sold for about .70 cents. And the same adjustments would be made at May expiration, with either the call or the put expiring and the other side being rolled or allowed to go through the exercise for a nice 50 day gain. If the stock, by chance, closed right at the $10 strike, you might just keep the stock AND the $1.45 the straddle was sold for, or the .70 cents the strangle was sold. Some might even do half the straddle and half the strangle against the long stock, but that is a story for another day. 
Remember, these Texas Long plays have to be made on stocks that you want to own, some might even pay a dividend (most airlines don't, but Delta recently announced one!). But, we can only guarantee ONE THING in the options business, and that is if you are short a call and a put on any underlying, that at least one of them will expire every month, and hopefully the other side can be rolled. After a few months of rolls, you could find yourself no longer caring about the stock price, because the options premium collected has cut the net cost of the stock so dramatically that it doesn't matter. And, if you figure the annualized rate of return, which you should, they are great plays in a flat or bullish market." 
 
These are bullish plays and they have worked splendidly over the last few years. If you are NOT bullish at these lofty levels, we would think twice about making them. But if already long stocks at lower prices, that you might not mind owning more of, it could be another way of increasing your theta with the collection of double the premium (short strangle). And, we can't stress this enough, at least one side should expire every cycle, and the other can be rolled. The costs on top of the transaction costs will include margin on the short puts, so you might have to make sure you notice in the Order Confirm window the entire cost of the trade, or call the trade desk to have the short put margin explained. 
 
"Don't confuse brains with a bull market." -- LDK to FHW - CBOE floor circa 1978 
 
Follow us on Twitter (TWTR): whatsfrankthink, like us on Facebook (FB*) - Frank Walsh Prescott, AZ or on Linkedin (LNKD), and join us in the online Swim Lesson chat room - everyday at 10:30 AM Central time.
The list of upcoming Market Drive events is now on the TDAmeritrade website - the next one in Chicago on June 20th - go to www.tdameritradeconferences.com/marketdrive, login and sign up.
Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com
 
FHW 
(* = FHW position)
fhwoption@hotmail.com
 
What's Frank Thinking? | 5/18/2015 6:55:57 AM | 0 Comments
Thursday - Earnings continue...

 

Thursday, May 7, 2015, Rhinelander, Wisconsin, USA
 
- Today is the Apple (AAPL*) dividend day and we have to wonder, despite all of our warnings, how many folks were called the stock overnight on short ITM calls? Tomorrow is weekly expiration, if you have anything that is in-the-money (ITM) or close and don't know the stock ramifications - call the trade desk at 866 839 1100. 
- Today's birthdays: Johannes Brahms (1833); Peter Tchaikovsky (1840); Johnny Unitas (1933); Deaths: Alfred Vanderbilt (1915 - on Lusitania). George Eastman patented his Kodak "Box Camera" on this day in 1888, and the US Congress established Mother's Day in 1914. The Lusitania was sunk by a German submarine on 5/7/1915 - killing 1198. World War ll ended in Europe on this day in 1945, and the Mamas & Papas "Monday Monday" hit #1 on charts in 1966 (still "can't trust that day..."). May 7, 1982 saw IBM (IBM) release PC-DOS version 1.1, and in 1993 South Africa agreed to multi-racial elections with Nelson Mandela being sworn in as South Africa on May 10,1994. One year ago (5/7/14) the SPUs (/ES) were trading in the 1860 range; they traded up to 2077 overnight, were near 2094 last week and are currently trading at 2071. 
- Will Janet Yellen's "generally quite high," when talking of equity valuations, go down in history like Alan Greenspan's "irrational exhuberance?" No one knows where we will end up over time, but the markets sure reacted negatively. All the major indices ended lower - S&P 500 -0.45%, Dow -0.48%, NASDAQ -0.40%, and are pointing to a lower opening this morning. Light sweet crude (/CLM5*), also reacted negatively after being up over 62.00, ending up only 0.9% to $60.93 a barrel, despite the EIA number showing their stockpiles declined. Not surprisingly the small-cap stocks weren't quite as effected: Russell 2000 (RUT +0.32%). The VIX did pop higher (+ 5.87%) and is back over 15.00, after being in the 12 handle last week. Gold (/GCM5*) and silver (/SIM5) slipped, but both are about where they have traded over the last month. US Treasuries continued their slide on Wednesday as a few major corporations (read: Apple) offered their own corporate bonds. The 30-year (/ZBM5*) yield rose to 2.99%, with the 10-year (/ZNM5) and 5-year (/ZFM5) yields climbing to 2.24% and 1.58% respectively. The dollar (/DXM5) remained weak, but is trading slightly higher this morning. The U.S. payrolls report will be released tomorrow and could move all markets, so be careful if scalping any futures.
- What will "pin" on this week's expiry? We asked that question last week as to Ford (F*), SLV* and BAC* on 16.00? AAPL* at 130? GM* on 35 or 36? YOKU* on 18? BBRY* on 10.00, AUY* on 4.00? FB* at 80? As you can see (*) we still have a vested interest in all of the above, most are still in that range, with straddles/strangles sold on these and many others. "Pins" would be perfect, although most have already been rolled. 
 - Today's possible movers: AAPL*, FB*, SUNE*, ZNGA, BABA, HLF, TSLA. 
- Today's economic events:
Initial Jobless Claims
Gallup US Payroll to Population
Bloomberg Consumer Comfort Index
EIA Natural Gas Inventory
Consumer Credit
Money Supply
Fed Balance Sheet
- Notable earnings before today's opening: AAON, ACHN, ACRE, AEE, AGIO, AKRX, ALE, ALU, AMRC, APA, APO, ARCP*, ARIA, AXAS, BABA, BDBD, BDX, CBB, CCC, CCOI, CDW, CECE, CHD, CNK, CNQ, CNSL, CONE, COT, COTY, CRIS, CSIQ, DFT, DNOW, DWRE, ENZY, FIG, FSYS, GLP, GOGO, GOLD, GSM, HII, HILL, HL, HPT, INSY, INXN, IRC, IT, KATE, LEAF, LIOX, LPI, LQDT, LXP, MFC, MGA, MITL, MMS, MPEL, MPW, MT, MWW, MZOR, NCLH, 
NICE, NJR, NRP, NXST, OGE, ONE, OWW, PCLN, PDCE, PGEM, PMC, PPL, PRFT, RDEN, REGN, RESI, REV, RFP, RGEN, RICE, RRD, RSTI, RWLK, SATS, SEAS, SFY, SNAK, SNI, SPH, SRPT, SSTK, STE, SUNE*, TA, TAP, TDC, 
THS, TIME, TLM, TLP, TU, USAC, VC, VTG, WAC, WIN, WPG, WPP, WRES; and after the close: ABTL, ACAD, ACET, ADVS, AGO, AHS, AHT, AIRM, AL, ALIM, ALJ, ALNY, ALSK, AMBR, AMH, ASYS, AVNW, BCEI, BEBE, BIOS, BKD, CA, CBS, CDXS, CERN, CNAT, CORT, CROX, CUTR, CYBR, DATA, DIOD, DXPE, EBS, ECPG, ECYT, ED, EGY, ENOC, ENV, ERII, ESPR, EVC, EZPW, FLDM, FRT, FTD, FUEL, GALE, GDOT, GEOS, GST, GXP, HTGC, IMPV, INWK, JAZZ, JCOM, JMBA, KEYW, KTOS, LBTYA, MAIN, MCHP, MDRX, MDVN, MED, MHK, MNST, MOH, MTD, MTRX, NGVC, NHI, NOG, NUAN, NVAX, NVDA, OLED, OMED, OUTR, PCTY, PETX, PLNR, POST, PRO, PSIX, RBA, RBCN, RIGL, RJET*, RMAX, RMTI, RPTP, RRMS, SAAS, SEMG, SFM, SGMS, SLW, SPPI, SRC, SREV, SSNI, STMP, SWIR, TCX, TEAR, TGI, THOR, TLLP, TNGO, TPC, TRMR, TRUE, TWOU, UBNT, UEPS, WAIR, WIFI, XOMA, XOXO, YUME.
 
"Earnings and valuations are all just bull_ _ _ _! It's all about buyers and sellers." LDK (JNJ crowd circa 1978)
 
- If you are looking for a fabulous full-day of stock/options/futures education, please sign up for one of the upcoming Saturday events. The next shows are in Philadelphia (5/16), Chicago, and New York  www.tdameritrade.com/registerformarketdrive . We will also be at the Las Vegas Money Show (5/12 - 5/14) - www.moneyshow.com. And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com  
 
FHW
(* = FHW position) 
fhwoption@hotmail.com 
What's Frank Thinking? | 5/7/2015 8:12:03 AM | 0 Comments
"Digesting" the free taco?

 

Wednesday, the day after Cinco de Mayo, 2015, Rhinelander, Wisconsin, USA 
 
Okay, admit it - who went to Taco Bell (YUM) yesterday (5/5) to get the free Biscuit Taco? We actually considered it, but just couldn't bring ourselves to do it after our morning bike ride at the Rhinelander Anytime Fitness. Besides, there was a long line for the drive-thru and the parking lot was full. All for a free taco? We can't wait to see the gratis taco totals! How many "Breakfast Defectors" did Yum Brands actually create on this year's Cinco de Mayo? Maybe this will inspire McDonald's (MCD) to hand out a few million McRibs for some future special occasion. Gosh, we can't wait! 
Next week is already the end of the monthly May expiration cycle, and as we have been saying for weeks, many of our shorts have been rolled out to September, October and even November cycles. This is always our summer avoidance plan (SAP), and done to avoid what could be both the doldrums and any possible warm weather volatility spikes. We have been in this game for decades and have found that wherever the SPUs (/ESM5*) are in the spring, they sometimes end up in that same relative range in the fall, when they are the real SPUs (/ESU5). So why not go for a summer-long boat ride? We might even catch a musky if we fish every day for four straight months. Or perhaps straighten-out our slice. We will actually be at a trade show in Las Vegas for most of next week, making this a great time to look back at May 6ths of the past. We will also be at Market Drives in Chicago (6/20) and New York (9/26), the San Franciso Money Show in July and the Las Vegas Trader's Expo in October. Gosh, we really don't have enough time to be short any premium this summer! Hence our SAP. Also remember tomorrow's Apple (AAPL*) dividend, along with hundreds of other underlyings paying dividends and announcing earnings the rest of the week.
Because of all of the above summer trade show travel and the fact that we may not be paying much attention to the markets, our summertime blogs might be somewhat sporatic. 
- Births: Sigmund Freud (1856); Amedos Peter Giannini (1870); Toots Shor (1905); Weeb Ewbank (1907); Orson Welles (1915); Willie Mays (1931); Bob Seger (1945); Tony Blair (1953). 
- Deaths: Henry David Thoreau (1862); William J. Casey (1987); Jilly Rizzo (1992).
- Events: 1st steel plow (1833) by John Deere (DE); 1st edition of the New York Herald (1835); Dr. John Gorrie patented a "refrigeration machine" (1851); Eiffel Tower completed (1889); Hindenburg exploded in flames at Lakehurst, NJ (1937); Joseph Stalin became the premier of Russia (1941); Roger Bannister of Britain broke the 4 minute mile (1954); President Eisenhower signed Civil Rights Act (1960); the SPUs (/ES) closed at 1864.25 (2014), and look to open somewhere near 2090 this morning.
 
"Pessimism never won any battle." -- Dwight David Eisenhower 
 
- Please join us in the daily Swim Lesson chat room - 10:30 -noon CT. And if you are looking for a fabulous full-day of stock/options/futures education, - sign up for one of the upcoming Saturday Market Drive events in Philadelphia (5/16), Chicago and New York. Go to https://wwws.tdameritradeconferences.com/marketdrive/
Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). 
Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
(* = FHW position)
fhwoption@hotmail.com
What's Frank Thinking? | 5/6/2015 7:15:27 AM | 0 Comments