What's Frank Thinking? rss
SPUs 2040 - no biggie!

 

Thursday, 3/26/15, Rhinelander, Wisconsin, USA
 
- Remember to sign up for the Detroit Market Drive on 4/18 at www.tdameritradeconferences.com/marketdrive. Hope to see ya there! 
- Today's birthdays: Robert Frost (1874); Duncan Hines (1880); Tennessee Williams (1911); Sandra Day O'Connor (1930); Leonard Nimoy (1931); John Stockton (1962). Deaths: Walt Whitman (1892); Sarah Bernhardt 
(1923); David Packard (1996). It was on 3/26/1885 that Eastman Film made the 1st commercial motion picture film; and in 1910 the US forbid immigration to "criminals, anarchists, paupers and the sick" - what ever happened to that law? In 1973 UCLA beat Memphis to win the 35th NCAA Men's Basketball Championship - their 7th consecutive title - this will NEVER be matched! 
- Last week, after the Fed removed the word "patient" in regard to hiking interest rates, the SPUs (/ESM5*) rallied about 50 handles, but after ending last week near 2100 they are down again this morning - trading about 2040. Please remember that two weeks ago they were trading at 2030, so the big rally and sell-off has only taken us back to about where we were on 3/13! The weeklong drop included Wednesday with the indices all lower - S&P 500 -1.46%, Dow -1.62%, NASDAQ -2.37%. Oil (/CLK5*) also made a big move higher last week - moving from 42 to 45 in minutes, and black gold moved dramatically again overnight on news of Saudi Arabia bombing targets in Yemen - moving from 48.73 to almost 52.50 - now trading closer to 51. Gold (/GCJ5*) and silver (/SIK5) are higher again as the dollar (/DXM5) continues to weaken. Gold is back over 1200 and silver is up over 17 again. US Treasuries fell Wednesday after a relatively weak 5-year note auction. The 30s (/ZBM5*) yield rose to 2.50%, and the 10-year and 5-year yields climbed to 1.92% and 1.41% respectively. Natural Gas futures (/NGJ5) might be active with this morning's (9:30am CT) EIA inventory numbers, and the current "Active" April (J) contract will be "flipped" to May (K) tomorrow. Make sure if you carry positions that you understand the ramifications - if any questions call the trade desk at 866-839-1100.
- Today's possible movers: AAPL*, ACN, FB*, DAL*, EMES*, F*, RHT, GM*, INTC, MSFT*, LULU*, NEM*, PBR*, SLB.
- Today will be a big day for economic events:
Fed's Bullard: U.S. Economy and Monetary Policy
Initial Jobless Claims
Fed's Lockhart: U.S. Economy and Monetary Policy
PMI Services Index Flash
Bloomberg Consumer Comfort Index
EIA Natural Gas Inventory
Kansas City Fed Mfg Survey
Results of $29B, 7-Year Note Auction
Money Supply
Fed Balance Sheet
- Notable earnings before the open: ACN, CAG, CMC, CMGE, CVGW, DANG, FRED, LULU*, MEA, NEOG, SCHL, SIG, SPCB, WGO; and after today's close: CARA, GME, REED, RH.
 
"A mathematician is a device for turning coffee into theorems.” -- Paul Erdos 
 
Have a great weekend. The markets will be closed next Friday (4/03/15) in observance of Good Friday. 
 
- If you are looking for a fabulous full-day of stock/options/futures education, please visit www.tdameritradeconferences.com/marketdrive - sign up for one of the upcoming Saturday events. The next shows are in Detroit (4/18),Philadelphia, Chicago, and New York.
Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. 
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? | 3/26/2015 8:16:17 AM | 0 Comments
Hands free driving - around the corner?

 

Wednesday, March 25th, 2015, Rhinelander, Wisconsin, USA 
 
Driving the 700 miles to and from Chicago for a wedding last weekend provided a lot of time and fuel for thought. The time ended up being about 10 hours of drive time and the fuel, at 2.59 a gallon, although expensive, still ended up being cheaper than a round-trip flight. 10 hours of driving over a weekend is NOT much fun, and it got us thinking about what could be the next major move in both the auto and tech industries. Maybe some new-fangled combination of the two? And no, we aren't talking about Tesla (TSLA), unless they are the first to officially launch a drive-free vehicle. Gosh, we kept thinking, as we paid the Interstate 90 tolls, if we didn't have to actually pay attention, the amount of work that could have been done in those 10 hours might have really added up. Even if we just read a book, it would have been a big uptick over passing all the Big Rigs and watching the trees go by! 
 
The market for a hands-free automobile has to be monstrous! And the benefits even bigger! The amount of workers that commute on a daily basis via the automobile, despite the big metropolitan moves into public transportation, are absolutely staggering. Some 85% of Americans still drive to-and-from work everyday, only 10% share a ride in some form (car-pool), and a mere 5% use mass transit. There are about 120 million drivers on their way to work every morning; and no third-party outfit like Uber or Lyft, or public train or bus are ever going to change that! DO THE MATH! Driving to the CBOE everyday in the Chicago Loop on the Edens/Kennedy for years, we got to sit in traffic as the CTA trains flew by down the middle of the expressway -many times almost empty! Had our car been in control, we could have done all of our post-trade-day work on the way home, and our pre-floor work on the way into town. Just last weekend while stuck in a chaotic Chicago traffic mess, and wondering about a driver-less vehicle, we couldn't help but think of a quote by Mary Shelley: "Invention, it must be humbly admitted, does not consist in creating out of void, but out of chaos." 
 
Whatever combination of companies finally manage to merge their automobile manufacturing prowess with some technological savvy outfit, it just might be the biggest thing since sliced bread. Imagine a Google/Ford(GOOG)/Ford (F*) car that could deliver you too and from your job while you worked along the way. How about an Apple (AAPL*)/General Motors (GM*) driver-less SUV with all of the AAPL gadgetry built right in. How about a cute little Fiat/Chrysler (FCAU)/Microsoft (MSFT*) machine? We can almost envision the Jennifer Lopez TV commercials! The average automobile commuter spends about 25 minutes in each direction - once again, do the math! What is 120 million times 50 minutes? Imagine the amount of added work hours that would pile-up in hands-free vehicles. Even if 50% chose to just watch/play videos or just listen to music! Apple, Microsoft and Google have the stock/money to buy one of the major car makers, and if they ever stop drooling about the possibilities, and get together with some investment banking firm to make it happen, the societal advantages in every way-shape-and-form might be limitless. We are almost beginning to look at this next auto/tech combination as a necessity. The only questions are who and when? Hopefully sooner rather than later, and by one or two of the companies with which we have a vested interest would also be nice.
 
"Necessity - the mother of invention." Plato 
 
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 shows are in Detroit (4/18), Philadelphia, Chicago, and New York. Go to https://wwws.tdameritradeconferences.com/marketdrive/ to enroll. 
Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And also look for us in the daily Swim Lesson chat room 10:30 - noon CDT. Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
fhwoption@hotmail.com
(* = FHW position)
What's Frank Thinking? | 3/25/2015 6:48:57 AM | 0 Comments
Janet a rate raising "wimp"?

 

Tuesday, 3/24/15, Rhinelander, Wisconsin, USA 
 
- Births: Rufus King (1755); Andrew Mellon (1855); Harry Houdini (Erik Weisz) (1874); Arthur Murray (1895); Thomas Dewey (1902); Clyde Barrow (1909); Steve McQueen (1930). Deaths: Queen Elizabeth (1603); Henry Wadsworth Longfellow (1882); Jules Verne (1905); Queen Mary (1953); Sam Jaffe (1984). 
- US stocks ended slightly negative on Monday on a very boring and light day of trading. (S&P 500 -0.17%, Dow -0.06%, NASDAQ -0.31%). Telecos and consumer staples outperformed on Monday (3/23), while financials and industrials trailed the broader market indices. Small-caps were mostly lower - Russell 2000 (RUT -0.13%). The VIX rose 3.00% to 13.41. Crude oil futures (/CLK5*) rose 1.9% to $47.45 a barrel - they are currently trading at 47.50 - almost $5.00 higher than last week at this time. Existing home sales rose 1.2% to an annual rate of 4.88 million in February. The 30-year bond yield rose to 2.51%, and the 10-year and 5-year yields dropped to 1.92% and 1.40% respectively. Today the US Treasury will auction $26 billion in two-year notes: another $35 billion in 5-year notes tomorrow (3/25), and $29 billion in 7-year notes on Thursday (3/26) - so pay attention if scalping any bonds or notes. Gold (/GCJ5) and silver (/SIJ5) are slightly higher as the US dollar (/DXM5) continues to slide - now trading under 97. The softs commodities - corn, wheat and beans have all been very active over the last few days - moving mostly higher (/ZCK5, /ZWK5 and /ZSK5).
- Will the Fed really raise rates by 1/8 basis point? That is the mysterious rumor spreading around the street. In our old floor trading days that would be called a "Pea-shooter move"! Why not a "teenie" (1/16)? C'mon Janet don't be such a wimp! In an oil argument with a youngster on Monday, we remembered .25 cents per gallon gas in Tempe, Arizona in 1970, when oil was about $1.30 per barrel. Yes, those were also the days that all of the "experts" said we would soon be completely out of oil sometime in the 1980s. Now we are flooded with the stuff and it has nothing to do with Jed Clampett striking black gold in about the same time frame - "y'all come back now, y'hear".
- Today's possible movers: AAPL*, ABMD, FB*, CAT*, CHK, CMI, HIG, NEM*, WLL,.
- Today's economic events:
Consumer Price Index (8:30am EST)
Redbook Chain Store Sales
FHFA House Price Index
PMI Manufacturing Index Flash
New Home Sales (10:00am EST)
Richmond Fed Mfg.
Results of $26B, 2-Year Note Auction
- Notable earnings before the opening: GIII, HDS, IHS, MKC; and after today's close: CBK, SCS, SONC, TRQ.
 
"If you're not in New York, you're camping out." -- Thomas Dewey 
 
- 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 Detroit on April 18th - hope to see you there. To sign up for one of the upcoming Market Drives go to
If you are not a TD Ameritrade / thinkorswim (AMTD*) customer you can open a PaperMoney account at www.thinkorswim.com 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 3/24/2015 8:13:38 AM | 0 Comments
Detroit rally?

 

Monday, March 23, 2015, Rhinelander, Wisconsin USA 
 
We are back in Rhinelander, after the weekend wedding trip to Chicago. We were proud to join our dear friend, and the real boss at tastytrade, Beth Snyder, in the celebration of her marriage, and we wish her the best in her new married life. Brandon, you are the luckiest guy in Chicago! 
 
Our next trip is to Detroit (4/17 - 4/19) for another Market Drive (www.tdameritrade.com/registerformarketdrive), and we hope to see many of our midwest friends in attendance. We fondly remember Detroit when we played there in the US Open Racquetball National Tournament in the late 1970s. Of all the cities in the world, we are sure that Detroit has suffered through as many trials and tribulations as any. Any locale that is completely tied to one industry, team, market, or anything for that matter, is more prone to be damaged more-so than most in any downturn in their singular market, and the devastating losses in the auto industry darn-near layed Detroit out flat! 
 
We have had long-term positions in both Ford (F*) and General Motors (GM*) both from the long and short side for decades, and will continue to trade stock and sell premium on both sides in these very liquid underlyings and options - weeklies and monthlies. We are looking forward to revisiting The Motor City, and spending some time with a great college friend (Annie K), who is closely related to the Ford family. We actually can't wait for the dinner at Coach Insignia, on top of the downtown Renaissance Center and maybe even a short trip to Windsor. The Renaissance Center is on the International Riverfront, owned by GM and home to their world headquarters. The Marriott Hotel (MAR) in the Center is the third tallest all-hotel skyscraper in the Western Hemisphere. However, we are sure our Ford friend will make sure we understand that the original Renaissance Center was conceived by Henry Ford ll and financed by Ford Motors in 1971 as the world's largest private development with a 1971 cost of $500 million. The RenCenter was a huge success in the mid-1970s and thought to be the driving factor (sorry about the pun) for the entire city of Detroit and surrounding area, but economic times changed those plans dramatically. 
 
Detroit's population has plunged 63% since 1950, and is down 20% since 2000 alone. The city's unemployment rate hit a high of 27.8% in 2009, and is still in the mid-teens. As of 2013, 40% of the city's street lights didn't work, which didn't help the violent crime rate which was the highest of any large U.S. city. Some 78,000 structures and 66,000 lots are abandoned, and arson accounts for about 1,000 of the 12,000 fires per year. So we don't know if sipping a good wine from the top of the RenCen's fancy Fisher Family owned Coach Insignia restaurant will make us as happy as it should, when we consider what we are looking down upon. But those sad stats have changed over the last couple years, as the auto industry has boomed, and many real estate "bottom buyers" and entrepreneurs have moved back into the city in droves. In fact, just about all economic numbers have had an incredible turn; from real estate values, household incomes, motel stays, start-up companies, etc., Detroit is on a major metropolitan uptick. So maybe the view will actually be inspiring!
 
Even their professional sports franchises have been winning - many times much to the chagrin of Chicago fans. Our Windy City youthful days were oftentimes upset by a Detroit player, from Al Kaline, Gordie Howe, Joe Dumars, Isiah Thomas, Mickey Lolich, and Barry Sanders, to today's Miguel Cabrera and Matthew Stafford - the Detroit teams have many times been the bane of our beloved Cubs, Sox, Bears, Hawks and Bulls. One of our finest Detroit sports memories was going to the 1984's World Series Game #5 and watching Kurt Gibson's homer win the game for the Tigers. Thanks again for that Annie, see ya in your revitalized city in three weeks.
 
"All hockey players are bilingual. They know English and profanity." 
 
- If you are looking for a fabulous full-day of stock/options/futures education, please visit www.tdameritradeconferences.com/marketdrive - sign up for one of the upcoming Saturday events. The next shows are in Detroit, Philadelphia, Chicago, and New York. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. 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? | 3/23/2015 6:54:57 AM | 0 Comments
TBT - Take a Breath Thursday?

 

Thursday, 3/19/15, Rhinelander, Wisconsin, USA
 
- Just booked the flights to the Detroit Market Drive on 4/18 - sign up at www.tdameritradeconferences.com/marketdrive. 
- Today's birthdays: Aleksei Romanov (1629); Wyatt Earp (1848); Earl Warren (1891); Jay Berwanger (1914). This was the day, in 1918, that Congress approved time zones and daylight saving time. Nevada legalized gambling on 3/19/1931, and in 1942, FDR ordered men between 45 - 64 to register for non-military duty. In 1966 in the 28th NCAA basketball tournament; Texas Western beat Kentucky 72 - 65. Will Kentucky go undefeated this season and win the title? The "Chicago 8" were indicted on this day in 1969 - following the Democratic Convention, and in 1995, Michael Jordan rejoined the Chicago Bulls after a 17 month hiatus.
- Gosh, simply remove the word "patient" from a Fed policy statement and an almost 50 handle rally in the SPUs (/ESM5*) ensues; gold (/GCJ5), had a huge move, as did the 30-year bonds (/ZBM5*) - my goodness! We immediately thought of Alan Greenspan"s two words that also had a dramatic market effect - "irrational exuberance". (S&P 500 +1.21%, Dow +1.27%, NASDAQ +0.92%). All asset classes, other than the banks and brokers, staged an almost record breaking rally. Oil (/CLM5*) was also on fire, going from 42 to over 45 in what seemed like a heartbeat, taking anything energy related with it; from XOM* and CVX, to EMES*and PBR*, and everything in-between. We also can't remember both Ford (F*) and GM's (GM*) options being as active as they were on Wednesday, as the F May 20 straddle traded over 50,000 contracts, and the GM June 40 straddle also traded over 50,000 times (we bet you wish you were still the floor broker in the GM pit JVP!). And yes, our unsettling heartbeat could have been because of our positions in many of the above that had our blood pressure boiling. The SPUs are currently lower, along with oil, whereas gold and the bonds are higher, with the 30s getting over 164 overnight! Last week, with the SPUs in the 2030 range, we questioned whether they would get back to 2100, with the VIX under 15, or down under 2000 taking the VIX up to 20? Well, the SPUs traded up to 2099 overnight and the VIX is now under 14. There is your answer - at least for now! As we all finally fill out our March Madness brackets, will today's markets also drive us mad. Just hold onto your hats and keep your hands in the boat! The EIA will release Nat Gas (/NGJ5) inventory numbers at 9:30 CT this morning, so be careful if scalping. Tomorrow is monthly expiration - PLEASE check your accounts for anything In-The-Money - ITM, and if you don't understand the stock or cash ramifiations - CALL THE TRADE DESK @ 866-839-1100.
- Today's possible movers: AAPL*, CAT*FB*, SBUX, RIG, CREE*, TGT, DAL*, LEN, LVS*, WYNN.
- Today will be a big day for economic events:
Initial Jobless Claims
Current Account
Bloomberg Consumer Comfort Index
Philly Fed Business Outlook
Leading Indicators
EIA Natural Gas Inventory
Money Supply
Fed Balance Sheet
- Notable earnings before the open: CRCM, LEN, TECD, TNP; and after today's close: CTRP, GMAN, MFRM, NKE*, NWY, RALY, YOKU*.
 
"I always turn to the sports pages first, which records people's accomplishments. The front page has nothing but man's failures." - Earl Warren 
 
- If you are looking for a fabulous full-day of stock/options/futures education, please visit www.tdameritradeconferences.com/marketdrive - sign up for one of the upcoming Saturday events. The next shows are in Detroit, Philadelphia, Chicago, and New York. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And also look for us in the daily Swim Lesson chat room 10:30 - noon CT. 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? | 3/19/2015 7:51:14 AM | 0 Comments
TSA's secondary scissors market?

 

Wednesday, March 18th, 2015, Rhinelander, Wisconsin, USA 
 
Over the course of the last week we have been in several airports; Delta (DAL*) flights from Rhinelander (RHI) and Minneapolis/St.Paul (MSP), to Phoenix (PHX) and Portland (PDX) -and then again in reverse, it has indeed been a long week of travel. Just think how many times we have been questioned, scanned, waved, put in a tube, or downright frisked at airports over the last 25 years, let alone just last week - thanks mostly to our full hip implant surgery of 1990. We now actually pray for that random TSA Pre-Check, which makes the whole ordeal much more palatable. The tiny Rhinelander Oneida County Airport doesn't have the newest technology, so I am always "patted-down" and it is sometimes embarrasing when the fellow doing the "patting" was sitting across from us at some Northwoods tavern just the night before! "How's the family? Oh, I will use the back of my hands for the tender spots..." 
 
Our suitcase always ends up being "frisked" as well, with the little TSA card always found inside upon our arrival. At least they no longer put that darned little plastic locking mechanism on the outside of the bag. That would have been okay as there is always a clipper or scizzors in the bag, but you couldn't get in-the-bag to get them, thanks to the TSA lock! Our carry-on is usally just our laptop and business essentials, so we have yet to lose a four-ounce container of expensive cologne or other mandatory travel equipment, but we have seen thousands who have lost some of their personal stuff to the TSA. We often wonder if there is some secondary market for all of the federally confiscated goods and how many thousands of dangerous nail clippers and finger nail files they have stashed away. Or whether some TSA workers now suddenly smell better and are more meticulously manicured. 
 
Anyway, we just noticed some interesting TSA statistics in this young 2015. So far this year, the TSA has discovered 365 loaded firearms in U.S. carry-ons, about 6 per day. This didn't include another 4 unloaded guns, 13 stun guns, and 2 large-hooked machetes - measuring 10 inches each! The vast majority of found firearms are loaded (83% of the total 2,212 found in 2014), with many having a round in the firing chamber! In the last 7-years the number of discovered weaponry has upticked 170%! We don't know if that is because of more guns or better technology and TSA agents. The fact that the highest number of guns are found at airports in states where conceal carry laws are more prevalent might mean that gun ownership is on the uptick, and those numbers are proven out in just about every national statisic. So, if there are more guns, it would just figure that there would be more discovered at airports. 
 
Yes, we are gun owners, but do not have conceal carry licenses in either of our home states. And, no, we have never been found to have a weapon of any sort in one of our carry-ons or checked bags. Scizzors and clippers on the other hand... 
 
"Oy - I wish I could just shoot that guy." "Just shoot him a kiss, that should keep him away from you." -- GUR and HUH (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 events. The next shows are in Detroit (4/18), Philadelphia, 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). And also look for us in the daily Swim Lesson chat room 10:30 - noon CDT. Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
fhwoption@hotmail.com
(* = FHW position)
What's Frank Thinking? | 3/18/2015 7:03:46 AM | 0 Comments
Happy St. Patrick's Day

 

Happy St. Patrick's Day - Tuesday, 3/17/15, Rhinelander, Wisconsin, USA 
 
- Births: Gottlieb Daimler (1834); Bobby Jones (1902); Nat King Cole (1919); Gary Sinise (1955); Mia Hamm (1972). Deaths: St. Patrick (461 -according to legend); Helen Hayes (1993). The 1st official St. Patrick's Day was celebrated in 1756 at New York's Crown & Thistle Tavern, and in 1766 Great Britain repealed The Stamp Act. Texas abolished slavery on 3/17/1836, and the rubber band was patented by Stephen Perry in 1845. On this day in 1929 General Motors (GM*) acquired German auto maker Opel, and in 1983 IBM released PC - DOS version 3.3.
- Stocks rallied Monday after European markets moved higher and the U.S. dollar (/DXM5) finally weakened. (S&P 500 +1.35%, Dow +1.29%, NASDAQ +1.19%). 3M (MMM +2.13%) and Proctor & Gamble (PG +2.11%) led the Dow Jones average, which will add Apple (AAPL*) on Thursday (3/19). The SPUs (/ESM5*) are currently trading down 7.00 to 2061.50. Crude-oil futures (/CLJ5*) fell 96 cents to $43.88 a barrel, and are lower again this morning - trading just under the $43 level. Small-cap stocks also gained on Monday: Russell 2000 (RUT +0.62%). The VIX fell 2.44% to 15.61. US Treasuries were higher Monday ahead of the Federal Reserve’s two-day policy meeting. Yields fell again after worse than expected data on U.S. manufacturing and industrial output. The 30-year Treasury yield fell to 2.68%; the 10-year and 5-year yields dropped to 2.10% and 1.57% respectively. The 30s (/ZBM5) are trading higher again this morning - now over the 161 level at 161'07. Gold (/GCJ5) and silver (/SIJ5) are relatively flat, and the softs - corn, wheat and beans are all continuing their weak trend (/ZCK5, /ZWK5 and /ZSK5).
- Today's possible movers: ORCL, AAPL*, GM*, F*, BABA, LVS*, BBRY*.
- Today's economic events:
FOMC meeting begins
Housing Starts
Redbook Chain Store Sales
- Notable earnings before the opening: ARCO, BURL, DSW, FDS, IOC*, PLUG, RSPP, ZBRA; and after today's close: ADBE, FRSH, ORCL.
 
"Some people think they are concentrating, when they're merely worrying." - Bobby Jones 
 
- 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 at the Renaissance Center in Detroit on April 18th - hope to see you there. 
If you are not a TD Ameritrade / thinkorswim (AMTD*) customer you can open a PaperMoney account at www.thinkorswim.com 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 3/17/2015 7:41:07 AM | 0 Comments
Another travel Monday...

 

Monday, March 16, 2015, Phoenix, AZ., USA 
 
Whew - from Rhinelander to Orlando and back; then from Rhinelander to Chicago and back; then back to Chicago for the trip to New York, and back to Rhinelander; then from Rhinelander to Phoenix / Prescott and onto Portland, Oregon and back to Phoenix; then back to Rhinelander. All of that in a month? How do we have any time to trade, you ask? We are very fond of the thinkorswim (AMTD*) mobile platform on our iPhone and happy that most flights have GoGo Internet for our laptop. A few of the flights were on weekends, so nothing to worry about on those days, other than weather, flight connections, delays, and did we mention weather? Flights on Delta (DAL*), US Airways and American (AAL) were almost all full, if not over-booked, and the same could be said about the motels/hotels. Not surpising, but all of our on-the-road overnights were spent at a Marriott (MAR) or Hilton (HLT) in some form-or- another, and we are still waiting for a pull-back in one of those darned stocks to allow another entry point. The Marriott Rewards and Hilton Honors points are nice, but so were the dividend and options premium before the stocks were called away a couple years ago.  
 
Thankfully we were wise enough to hold onto some of our other travel and leisure equities, of which we have been collecting dividends and/or selling strangles/straddles against for years. Over those years we have had positions in dozens of related companies, from Brinker Int. (EAT), Cracker Barrel (CBRL), Disney (DIS), Dine Equity (DIN), Intercontinental (IHG), American/USAir (AAL), Southwest Airlines (LUV), Hilton (HLT) and Marriott (MAR), to our current positions in Las Vegas Sands (LVS*), Caesar's Entertainment (CZR*), Republic Airways (RJET*) and Delta (DAL*). Checking the ones that had been called at this point in time might make us very angry, as most have at least doubled in price. But what hasn't? Will we ever have a major correction in the overall market? If so, these discretionary stocks might drop worse than the rest, just as they have benefitted more-so by the burgeoning economy. Too high to buy and/or sell puts? Probably. What about shorting the stocks or selling naked out-of-the-money calls and/or call verticals? Long out of the money put butterflies? Most of the underlyings in this sector don't have enough volatility, many don't have enough open interest or liquidity, and several have way too wide bid/ask spreads, making options only positions more difficult. Not to mention that at these lofty levels their dividend yields have been cut-in-half. Nothing really to do but wait for that much-awaited pull back to re-buy the ones that we know/use/like. Although the DIN June 85 puts look pretty juicy, as do the EAT April 55 puts, May 40 AAL puts, and MAR April 70 puts. But still going to wait for the pullback that will eventually come. 
 
Whatever you decide, remember not to make any investment decision without first doing your own personal due diligence, which might just call for another trip! That's right, we are going to Chicago for the weekend this Thursday, and to Detroit for a Market Drive a couple of weeks after that. We will continue to do our travel data collection; if the pillows are good, shower-head strong, service staff on-the-ball and friendly, then we might at least make a partial entry back into one of the above. 
 
"Pillows. It's all about the pillows." -- Anonymous 
 
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 next AMTD Market Drive is in Detroit at the Marriott Renaissance Center on April 18th. Hope to see all of our midwest friends there. 
 
FHW 
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 3/16/2015 10:15:12 AM | 0 Comments
Saturday is "pi day" 3/14/15

 

Thursday, 3/12/15, Rhinelander, Wisconsin, USA
 
- Remember that this Saturday, while we are at the Market Drive in Portland, it will be "pi day" - 3/14/15 - which only happens once every hundred years (thanks for the note Howard H). 
- Today's birthdays: Clement Studebaker (1831); William "Buckwheat" Thomas (1931); Barbara Feldon (1939); James Taylor (1948); Darryl Strawberry (1962). Deaths: Pope Innocent l (0417); John Bull (1628); George Westinhouse (1914); Anne Frank (1945); Woody Hayes (1987). It was on this day in 1789 that the US Post Office was established - it hasn't made money ever since! FDR conducted his 1st "Fireside Chat" on 3/12/1933, and Nazi Germany invaded Austria 5-years later. The Dow Jones closed above 500 for the first time on March 12th, 1956 (500.24), and Gordie Howe retired from the NHL in 1972. This was the busiest day on the NYSE in 1986 when 210.25 million shares traded - now that happens every hour! 
- Stocks sagged on Wednesday as the U.S. dollar continued to move higher - but the SPUs (/ESH5*) are now trading higher and the dollar (/DXM5) is lower. The Fed will conduct a two-day policy meeting next week, so markets might be a little jittery until then. Wednesday's close had the Dow -0.16%, NASDAQ -0.20%, S&P 500 -0.19%. Crude-oil futures dropped 12 cents to $48.17 a barrel (they were 51.50 at this time last week) after the EIA reported commercial crude inventories climbed by 4.5 million barrels last week, but the underlying (/CLJ5*) had some nice intra-day swings and was a great scalp candidate. Banks and telecoms outperformed, while consumer staples and utilities lagged the major market indices. Small-cap stocks shares were slightly higher - Russell 2000 (RUT +0.60%). The VIX rose 1.08% to 16.87. Will the overall market rally back to 2100 and take the VIX back down into the 15 handle, or sell-off under 2000 and take the VIX closer to 20? That is the question! Treasuries on Wednesday were mostly higher, after a strong 10-year note auction. The U.S. Treasury sold $21 billion of 10-year notes at a yield of 2.139%; the bid-to-cover ratio was 2.65. The Treasury will also auction $13 billion in 30-year bonds today. The 30-year and 10-year Treasury yields fell to 2.68% and 2.11% respectively, and the 5-year yield rose to 1.61%. 
- Today's possible movers: AAPL*, C, MS, AXP, MW, STT, CAT*FB*, GM*, PBR*, PG.
- Today will be a big day for economic events and earnings:
Initial Jobless Claims
Retail Sales
Import/Export Prices
Bloomberg Consumer Comfort Index
Business Inventories
EIA Natural Gas Inventory
Results of $13B, 30-Year Note Auction
Treasury Budget
Money Supply
Fed Balance Sheet
- Notable earnings before the open: BONT, CMN, CRME, CSTM, CVGW, DG, GCO, GLP, HOV, JASO, KIRK, LEAF, MTN, PGEM, PLCE, PWE, QIWI, RICE, SMRT, SNSS, TLP;
and after today's close: ANAC, ARO, ATHX, EGY, FF, FTD, FXCM, GST, HIL, IRET, IRG, JMBA, KRO, KTOS, LOCO, MED, OMED, PPHM, RMAX, TEAR, ULTA, ZUMZ.
 
"Indomitable in victory, insufferable in defeat.”-- Coach Woody Hayes 
 
- If you are looking for a fabulous full-day of stock/options/futures education, please visit www.tdameritradeconferences.com/marketdrive - sign up for one of the upcoming Saturday events. The next shows are in Portland, OR.(this Saturday), Detroit, Philadelphia, Chicago, and New York. Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And 
also look for us in the daily Swim Lesson chat room 10:30 - noon CT. 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? | 3/12/2015 9:04:11 AM | 0 Comments
K-R-A-F-T - reprint from '09/'12

 

Wednesday, March 11, 2015, Prescott, Arizona, USA 
 
A reprint from 2012, about Kraft Foods, which was mostly a reprint from 2009. 
 
We survived the holidays - from Thanksgiving to New Year's, not to mention the crazy month of February - it's trade show trips and our birthday. At this time of the year, after our digestive tracts have taken a beating, for some reason we think of mac-and-cheese... here is a reprint of an article about Kraft Foods.  And had you bought the stock in the $20 range back at the time of this article (2009), and had been collecting the dividend and selling a close to the money strangle for the last three years, your return would now be somewhere well-over 150%. But, now, after such a tremendous return (read: stock run-up), we would certainly be cutting back. Yes, we still love Mac & Cheese, but at these levels? 
 
K-R-A-F-T, all we need is the little jingle...
Anyone with a kitchen knows about Kraft Foods (KRFT), as it is the largest food and beverage company with headquarters in the United States, in fact the only larger food firm in the world is Nestle, with headquarters in Vevey, Switzerland. Kraft has been close to us our entire life, with the company's main offices near our old "stomping grounds" in Northfield, Illinois, a northwest suburb of Chicago. Proof of KRFT (not to be confused with KFC) being a major worldwide player in the food and beverage industry officially came last year (09/22/08) when the company became a component of the Dow Jones Industrial Average - replacing AIG. 
 
Surrounded by hundreds of miles of farm and dairy land, Chicago in the early 1900s was a center for the burgeoning food industry, and Canadian born founder James L. Kraft began peddling his cheese door-to-door. The J. L. Kraft and Brothers (there were 5 all-together) Company went from a tiny operation almost overnight, to a large one,with New York offices opening in 1912, which allowed the firm to be one of the first food purveyors to go international. Kraft invented and patented pasteurized processed cheese that didn't need refrigeration in 1916, and millions of pounds were sold to the U.S. military as rations during WW l. 
 
World War ll saw the now publicly traded (1924) food outfit known as Kraft Cheese Company sending four million pounds of cheese to Great Britain on a weekly basis, and as the company's lines began to diversify, the name was changed to Kraft Foods in 1945. The next four decades saw the company go through an incredible amount of mergers and acquisitions, even a few name changes; from Kraftco to Dart & Kraft; then back to Kraft Inc., in 1988, when the Philip Morris Companies (PM, but at the time MO*) purchased Kraft for $12.9 billion. Kraft was then merged with MOs General Foods division, as Kraft General Foods (KGF). 
 
The next twenty-years saw even more astounding moves in the food and beverage industry (way to many to try to describe), but in 2000, Philip Morris (now Altria) bought Nabisco Holdings and merged it with Kraft. A year later, MO sold 280 million shares of Kraft in what was at the time the third largest IPO in history, while they kept over 88% of the company stock. In January of 2007, Altria announced it would spin off the rest of their Kraft Food shares to Altria's shareholders, and in March the stake was spun off. Kraft is now, once again, and thankfully, an independent publicly traded company. Whew! Dozens of their products are industry sales leaders, the company pays a nice quarterly dividend (app. 4.3%), and there are plenty of options with enough open interest to make for some good plays.  
 
We have written hundreds of corporate type articles, dealing with everything from soup-to-nuts, but never have we run across such an amazing tale of mergers and acquisitions as we did with Kraft. From batteries (Duracell) to bagels (Lender's), with Tupperware, jellies, ice cream, candy, marshmallows, hot dogs, Kool-Aid, Shake 'n Bake, and dozens of other oddly diverse products, Kraft has somehow been involved with all of them. And to think that just about 100 years ago, J. L. Kraft and his four brothers were going door-to-door in Chicago's wholesale food district - wow, if they had only known the corporate "mess" their cheese would get into.  
 
"How can you be expected to govern a country that has 246 kinds of cheese?"--Charles de Gaulle 
 
- 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, please visit www.tdameritradeconferences.com/marketdrive - sign up for one of the upcoming Saturday events. The next shows are in Portland, OR.(this weekend), Detroit, Philadelphia, Chicago, and New York. 
 
Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow us on Twitter (TWTR) at whatsfrankthink or on Linkedin (LNKD). And also look for us in the daily Swim Lesson chat room 10:30 - noon CDT. Anyone without a TDAmeritrade (AMTD*) account can open a PaperMoney account - go to www.thinkorswim.com 
 
FHW 
fhwoption@hotmail.com
(* = FHW position)
What's Frank Thinking? | 3/11/2015 9:03:21 AM | 0 Comments