What's Frank Thinking? rss
Gold (/GC) - will 1200 hold?

 

Tuesday, September the Last, 2014, Rhinelander, Wisconsin, USA 
 
- Today is the 273rd day of 2014 and the 9nd day of the autumn. This was the day, in 1935, that the Boulder Dam - later renamed the Hoover Dam, was dedicated. Birthdays: Truman Capote (1924 - 1984); Elie Wiesel (1928); Angie Dickenson(1931). 9/30/1935 was when Gershwin's "Porgy & Bess premiered in Boston, and in 1968, the 1st Boeing (BA) 747 was rolled-out. 
- The 30-year bonds (/ZBZ4) are now trading right on 138, a full handle higher than last Tuesday, and two points better than two-weeks ago. How much longer can the 30s trade in this 136 - 140 range? Don't ask us, perhaps Janet Yellen has a clue - then again... Oil (/CLV4*) is trading almost $4 higher than last week, after almost touching 95 overnight (94.90), is currently trading near 94.65. We asked last week if 90.00 could hold, well, we guess we got our answer. Unleaded is selling down to almost $3.00 in some parts of the country, but is closer to $4 in Chicago and still about $3.50 here in Rhinelander, Wisconsin. Gold(/GCZ4*) is once again getting treacherously close to the 1200 level, almost $35 lower than last week! That 1,300 price of summertime now seems a long way off, and now, as the leaves fall, we wonder if $1,200 can hold. Corn (/ZCZ4*) is trading about unchanged this morning, in fact it hasn't moved much over the last week - 325 - 350 has actually been the range for a couple of weeks. Wheat (/ZWZ4) is unchanged, and beans (ZSX4) are lower, so corn could be pulled lower. The emini S&P contract or SPU (/ESZ4*), is currently trading at 1976, up 5 - 6 handles and has had a nine-point overnight range (1968 - 1977.50). The US Dollar (/DXZ4) broke thru 85 again and is now, in fact, up almost another .50 to 86.195 - absolutely how crazy strong the greenback has been. Does the rest of the world really love us that much; or is it the fact that Japan's household spending fell for the 5th straight month, or that you can't get through to a bank because of all the pro-democracy demonstrators in Hong Kong? 
- Possible stock movers and shakers: Apple (AAPL*) faltered under $100 on Monday, but is now trading about 100.50, after China gave approval for the iPhone 6 to be sold. Will $15.00 hold in Ford (F*) after new boss, Mark Fields, but the company's full-year profit outlook? We probably wouldn't sell any 15 puts just yet, but is there any premium in the 13s or 14s? We will wait and see. Walgreens (WAG) announces and looks higher, as Bank of America (BAC*) clings to the $17 level. Emerge Energy (EMES*) continues to be a mover-and-shaker. Facebook (FB*), FedEx (FDX), Nike (NKE*), Altria (MO*) all added their names to the very long 52-week high list, whereas many miners and the like are now on the 52-week low list.
- Today's economic events:
ICSC Retail Store Sales
Redbook Chain Store Sales
S&P Case-Shiller Home Price Index
Chicago PMI
Consumer Confidence
State Street Investor Confidence Index
 
Notable earnings before Tuesday's opening: WAG; 
and after today's close: SANW.
 
Early Morning Markets Summary:
E-mini S&P Futures  1,976.25  (+0.34%)  
E-mini NASDAQ Futures  4,060.75  (+0.63%)  
US Dollar Index  86.180  (+0.69%)  
Crude Oil  94.46  (-0.12%)  
 
"It's a poor workman who blames his tools." -- Anonymous
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
Look for us at the upcoming Market Drive in Los Angeles on November 1st and the Money Show in Las Vegas 11/19 - 11/21 - see ya there. 
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 9/30/2014 8:00:57 AM | 0 Comments
Politician - endearing?

 

Monday, September 29th, 2014, Rhinelander, Wisconsin, USA
 
The annual Boys of Rhinelander weekend came to an end on Sunday; at the Friday night fish fry we were all at a tavern in town when we bumped into a local politician - who happens to also be a neighbor, friend and the owner of the now famous local Supper Club, Al-Gens (recent article in New York Times). The Chicago guys could not believe his endearing ways and straight forward attitude - of course that could be because they are from Chicago; where "endearing" politicians many times find their way to prison, and "straight forward" ones either get shot or not re-elected. Anyway with three-weeks to go, still partially feeling the effects of the long-lost-weekend, and in this not-so-exciting (for this sometimes whacky period) October cycle, we looked back to 2012 to find some of our favorite political quotes. 
"The problem with political jokes is they get elected." -- Henry Cate, VII
"We hang the petty thieves and appoint the great ones to public office."  -- Aesop
"If God wanted us to vote, he would have given us candidates." -- Jay Leno
"Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel." -- John Quinton
"I offer my opponents a bargain: if they will stop telling lies about us, I will stop telling the truth about them."-- Adlai Stevenson
"I have come to the conclusion that politics is too serious a matter to be left to the politicians." -- Charles de Gaulle
"You can't get the creek to clear up until you get the pigs out of the water." -- Hillbilly Proverb
 
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. We will also be at the Market Drive in Los Angeles on 11/1 and at the Trader's Expo in Vegas 11/19-11/21.
FHW 
(* = FHW position)
fhwoption@hotmail.com
 
What's Frank Thinking? | 9/29/2014 6:36:44 AM | 0 Comments
"It's da almighty dollar"

 

Thursday, September 25, 2014, Rhinelander, Wisconsin, USA
 
- Today is the 268th day of 2014 and the fourth day of autumn. On 9/25/1513, Spanish explorer Vasco Nunez de Balboa became the 1st European to see the Pacific Ocean, and in 1981, Arizona's Sandra Day O'Connor was sworn in as the 1st female Supreme Court Justice. Birthdays: William Faulkner (1897 - 1962); Barbara Walters (1929); Shel Silverstein (1930 - 1999); Michael Douglas (1944); Catherine Zeta-Jones (1969). 
- The SPUs (/ESZ4*), as of this writing, are trading slightly lower, having traded in a very tight 4 handle range overnight (1987 - 1991), about 10 points lower than last week. It seemed on  Tuesday, when they got down to 1968, that all of the bears began boasting and 1950 was almost a certainty. But the buyers bellied back up to the bar, and ran it back up. The Russell (/TFZ4) is also trading lower and was in an even tighter overnight range, and the bonds (/ZBZ4) are back over 137. "It's da almighty dollar" was a phrase used often by an old CBOT gold trader, and he would now be "spot-on" as the greenback (DXZ4) hit multi-year highs taking gold (/GCZ4) to lows not seen since Christmas. Natural Gas (/NGV4) traded back over $4.00 last week, but is now at 3.88. Watch out for some movement in NatGas and oil (/CLZ4) with today's 9:30 AM CDT EIA inventory number. Corn (/ZCZ4*) is on 330 - wake us when (if?) it gets back over 350!
- Today's possible movers: Apple (AAPL*), as the Internet rumor mill is working overtime; from the new operating system causing iPhone 6 problems, to the phone actually bending in your pocket. We don't know about anyone else, but lots of folks (our entire family for instance) either has or is waiting for their new "6". Facebook (FB*) looks higher, as do Comerica (CMA) and Northrup (NOC), while Yahoo (YHOO) and KB Home (KBH) could be weak. Emerge Energy (EMES*) and SunEdison (SUNE*) were big movers on Wednesday.
 - Today's economic events:
Durable Goods
Initial Jobless Claims
PMI Services Index Flash
EIA Natural Gas Inventory
Kansas City Fed Mfg Survey
Results of $29B, 7-Year Note Auction
Fed's Lockhart: U.S. Economic Outlook and Monetary Policy
Money Supply
Fed Balance Sheet
 
- Notable earnings before the open: SCHL;
and after today's close: ARCW, DMND, THO.
 
Current summary: 
E-mini S&P Futures  1,990.00  (-0.05%)  
US Dollar Index  85.432  (+0.46%)  
Crude Oil  93.04  (+0.26%)  
 
"Always dream and shoot higher than you know you can do. Do not bother to just be better than your contemporaries or predecessors. Try to be better than yourself."- William Faulkner
 
Have a great weekend!
 
Follow us on Twitter (TWTR): whatsfrankthink- like us on Facebook (FB*) - Frank Walsh Prescott, AZ  -- Look for us on Linkedin (LNKD)
The next Market Drive event will be in Los Angeles on November 1st and Houston on November 8th. - go www.tdameritrade.com/registerformarketdrive. 
The next Trader's Expo is in Las Vegas - November 19 - 21. Hope to see you at one of the events.
 
FHW
(* = FHW position) 
fhwoption@hotmail.com
What's Frank Thinking? | 9/25/2014 8:04:07 AM | 0 Comments
Premium selling since the '70s!

 

Wednesday, September 24th, 2014, Rhinelander, Wisconsin, USA 
 
A reprint from an article we wrote in September of 2003 - some things never change, while others change dramatically! 
 
"Selling 'juice'" 
"It may have come from a prior life, a lemonade stand in our youth, or our 20 years of trading floor experience on both the market maker and floor brokerage side, but for some reaons we have always been predisposed to selling "juice" (options premium). Granted, it is a much tougher task when the volatility levels remain stuck in a relatively low range, but there are still opportunities - especially when looking further out in time, and against already existing positions. In fact, we remember in the late 1970s while acting as an Independent Market Maker on the CBOE; and with the volatlity even lower than it is now, selling premium in several equities - even if only when the stock prices were affected by some dramatic news story. Perfect examples were the Johnson & Johnson (JNJ) Tylenol scare and the shooting of the Pope! 
As we noticed at the most recent Las Vegas Rat Trading Session (we were with a Scottsdale based educational firm at the time), the short-term premiums may have been low, and they "hang-in-there" for what seems to be an eternity - much to our short premium chagrin. In looking at our short iron condor positions, for instance, with several of the underlyings within cents of our short middle strikes, the value of the shorts have remained almost constant over the last week, and should only begin to lose premium (if the underlying stays flat) as we get much closer to the near term expiry.
Similar to a simple butterfly spread, the values of these positions will usually remain elevated until close to the short term expiration, as the time decay of any of the near-the-money options doesn't add up until at least the last 10-days of the cycle, and the Gamma picks up. It is actually easier and possible in earlier time frames to close out these multi-sided trades when the volatility levels are elevated. This is one of the main reasons that we usually don't even think of closing out these positions unless we are in (at the earliest) the last two-weeks of the positions expiration cycle. 
Yes, there are other factors in the close/adjust equation, and one of the most relevant elements is, of course, the existing price of the overall position. By this we mean that if the net debit to close an entire position is at some pre-determined percentage gain, it will be acted on. But, once again, the price level on a multi-sided position will almost assuredly not widen to such a point until close to expiration. A "leg" might be taken on an adjustent or close, but that leg as an adjustment or close would be similar to taking a leg on entry in that it would leave the other side as a completely directional position, with more margin and risk than it might be worth taking. 
Also noted in the last September 2003 Rat Trading Session, was that almost every person in the room of over 400, was bearish! In taking a vote, in fact, only two hands were raised for the bullish cause, and all of the TSFN and tos personel in the room were also bearish." 
Gosh, in spite of this story being written about 11 years ago, about the same could probably be said today in all regards! The volatilities are low again, and the already low short middle premiums are continuing to "hang-in-there" - still to our chagrin. We continue to sell "juice" and have throughout the higher volatility days of the past and the low volatility days of back then and today's VIX under 15 days. One of the best things to happen since 2003 is the weeklies that allow even more single strikes to be sold and subsequently rolled. The old days of simple short verticals and long butterflies in monthly cycles that didn't have to be watched until the last two weeks of the cycle have been replaced with very adjustable single strike weeklies. The biggest problem in these is they are both labor and commission intensive. We can no longer fall asleep for the first two weeks of a monthly cycle, in fact when in weeklies we can't even not pay attention on the Monday of that particular week. No more rest for the wicked weekly option trader! 
 
"Sleep? Sleep when your dead." -- Anonymous 
 
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 from 10:30 central time, and at the Market Drive in Los Angeles (11/1) and Trader's Expo Las Vegas (11/19 - 11/21).
 
FHW 
fhwoption@hotmail.com
(* = FHW position) 
What's Frank Thinking? | 9/24/2014 7:07:09 AM | 0 Comments
30-year bonds - don't hold your breath.

 

Tuesday, 9/23/14, Rhinelander, Wisconsin, USA 
 
- Today is the 266th day of 2014 and the 2nd day of the autumn. On this day in 1988, Jose Conseco became the 1st member of the "40 - 40 Club" - hitting 40 homers and stealing 40 bases in one season. Fusajiro Yamauchi founded Nintendo on this day in 1889 - the company originally produced handmade playing cards. Birthdays: Bruce Springsteen (1949); Mickey Rooney (1920 - 2014); John Coltrane (1926 - 1967); Ray Charles (1930 - 2004).
- The 30-year bonds (/ZBZ4) are now trading right on 137, a full handle higher than last Tuesday, as they bucked the selling trend on Monday in which just about every asset class sold off. As we have continuously mentioned, the bonds have been stuck for almost the entire summer in the 136 - 140 range, but now that we have entered autumn, will they break out one-way-or-the-other? If interest rates are to rise, that would have to make for some bond downticks, but with the current Fed domination, we wouldn't hold our breath. Oil (/CLV4*) is trading in the 91 - 92 range, about a dollar lower than where it was last week. Light Crude did get into the low 90 range yesterday and if it dips down there again, it will be interesting to see if the whole 90.00 price point holds. Gold(/GCZ4*) is up about 16 bucks this morning (1234), but after dropping to almost 1200, that level of 1300, where it traded much of the summer, is still a long way off. Corn (/ZCZ4*) is lower again, after getting up to about 350 last week, it is now just under 330. Wheat (/ZWZ4) is unchanged, and beans (ZSZ4) are higher, so maybe there is some hope for a corn rally. The emini S&P contract or SPU (/ESU4*), that was trading over 2002 a couple of weeks ago, is trading right at 1980, just about where it was last week at this time. We asked last week if we were headed back to 2000 or down to 1950, and it looks like we might have to wait for the bombs to stop dropping in Syria or some other world event to break this relatively tight range. The US Dollar (/DXZ4) hit a six year high and is trading just over 84.50, just about where it has been for the last couple of weeks.
- Possible stock movers and shakers: CarMax (KMX) reported better and looks lower; Clorox (CLX), Bed Bath and Beyond (BBBY), Fluor (FLR), and Dick's (DKS) all look lower on downgrades. Cree (CREE*) was upgraded but looks about unched. Salix (SLXP) could be today's version of Monday's Sigma Aldrich (SIAL), as it is in take-over talks. Apple (AAPL*) is trading slightly lower, despite our heir-to-the-mortgage buying the new iPhone 6s. We understand the new iPhones are selling in China for 10 times what they are in the U.S. - can we get the kid to take a trip to Beijing? After paying dearly for Dr. Dre's Beats streaming music service, will AAPL really stop the Beats music and merge it into their gigantic iTunes service? Emerge Energy (EMES*) continues to be a mover-and-shaker; Sina (SINA*), Youku (YOKU*) and SunEdisson (SUNE*) were all beaten down on Monday, just as they were last week - will they once again have a Tuesday rally? 
 
- Today's economic events:
ICSC Retail Store Sales
Redbook Chain Store Sales
FHFA House Price Index
PMI Manufacturing Index Flash
Richmond Fed Mfg.
Results of $29B, 2-Year Note Auction
 
Notable earnings before Tuesday's opening: KMX, CCL; 
and after today's close: AIR, BBBY, CPRT, SCS.
 
Early Morning Markets Summary:
- E-mini DOW Futures  17,054  (-0.26%)
- E-mini S&P Futures  1,979.75  (-0.33%)  
- E-mini NASDAQ Futures  4,038.50  (-0.35%)  
- US Dollar Index  84.436  (-0.37%)  
- Crude Oil  91.58  (+0.78%) 
 
"The great challenge of adulthood is holding onto your idealism after you lose your innocence." - Bruce Springsteen 
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
Look for us at the upcoming Market Drive in Los Angeles on November 1st and the Money Show in Las Vegas 11/19 - 11/21 - see ya there. 
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 9/23/2014 8:09:58 AM | 0 Comments
NOW is the time to be retail!

 

Monday, September 22, 2014, Rhinelander, Wisconsin, USA  
 
Who are all these guys? We remember thinking that back in the late 1970's early '80s CBOE equity crowd days, when there would be some news event that quickly brought all the market making "floaters" into the crowd - or as they were commonly known "the boat people." Many would come in buying volatility thinking the news would jack-up option prices on both sides, wherein the traders that resided in that particular pit on a day-to-day basis would be more than happy to either hedge their existing positions or take on new short stuff versus other options or the stock itself if no option trade presented itself as a better "other side". Retail option traders oftentimes reacted in a similar trading fashion to the floor "boat" traders, in that they tried to buy the volatility. But the difference for the off-floor "boat people" was that they had to deal with monthlys only, ridiculously wide bid/ask spreads, 5 to 10 dollar wide strikes, no instantaneous electronic order entry, options that traded in fractions (smallest being a "teenie" - 1/16th or $6.25), sometimes terrible fills, AND outrageously high commissions!  
 
In today's electronic world of options trading, the "boat people" sitting at their computers, still float to where the action is, but it is now to the weeklies on equities with big movement, or some massively traded, incredibly tight bid/ask, dollar-wide strikes, index product and/or ETF. This is no different than in the old days, as many of the new retail online boat folks still tend to be buyers of any "jacked-up" premium, as the floor traders and old-style online traders are more commonly the sellers. The biggest difference is that it is now so much better for the retail side "boat people" in literally all regards. Just turn around all of the above mentioned difficulties for the retail side mentioned above! The commissions have never been lower, the "fills" never better, options trading in pennies (dollars - NOT "teenies"), instantaneous on-line fills, dollar wide strikes, crazy-tight bid/ask spreads, and quite possibly even insanely actively traded weekly options. 
 
No matter what anyone in the media says about the new products, High Frequency Traders (HFTs), or all of the new options exchanges and ease of electronic trading; they have all made today's options trading world THE time to be an electronic retail stock/options/futures trading customer. Yes, even we have been drawn into the online "boat traders" game; but only in names that we already know, love and possibly already have a position in, and not necessarily from the sell-side. We can't explain how happy we are to have left the trading floor when we did and what an incredible difference the relatively new online firms have made and the benefits added to the retail side of the stock/option/futures industry. thinkorswim (AMTD*) was clearly THE first electronic options "boutique" trading platform, and we are also happy to have been a very small part of the upstart of the firm. Many of the industry-wide changes have been because of the online trading firms, and most of them have been upticks for the rapidly growing retail side. 
 
Having been a trading floor market maker and an independent floor broker on the CBOE; seeing how difficult (read: almost impossible) it was for the retail customer, we never thought we would EVER be on that side of the trading coin. But if there ever was a time to be "retail" - NOW is the time. 
 
"Is that a customer order?" "What if it is?" "I just wanted to know who I am screwing." -- MCG and FHW (OEX pit circa 1986)
 
Follow us on Twitter (TWTR): whatsfrankthink, like us on Facebook (FB*) - Frank Walsh Prescott, AZ or on Linkedin (LNKD)
FHW 
(* = FHW position)
fhwoption@hotmail.com
 
What's Frank Thinking? | 9/22/2014 7:29:49 AM | 0 Comments
The 2001 Space Odyssey continues

 

Thursday, September 18, 2014, Rhinelander, Wisconsin, USA
 
- Today is the 261st day of 2014 and the 90th day of this extraordinarily cool and rainy summer. On 9/18/1850, Congress assed the Fugitive Slave Act, which allowed slave owners to reclaim slaves who had escaped to "free states". On this day in 1947, the National Security Act established the CIA. In 1999, on September 18th, Sammy Sosa became the first player in major league baseball to hit more than 60 home runs in two seasons. Birthdays: Samuel Johnson (1709 - 1784); Greta Garbo (1905 - 1990); Frankie Avalon (1939); Rick Pitino (1952); James Gandofini (1961 - 2013). Voters in Scotland are taking to their neigborhood polls today in a referendum on whether the country should become independent or continue to be part of the United Kingdom. 
- Anyone else want to know exactly what is the Fed's definition of a "considerable time"? If you had the SPUs or bonds or just about anything else up on the Active Trader page when the Fed news came out yesterday, you would have been amazed at the short-term swings. Had you been a scalper it was like a dream come true! Now that we think of it, we wish the Feds would make some ridiculous statement weekly! Daily?  
- The SPUs (/ESZ4*), as of this writing, are trading higher, having traded in about a 10 handle range overnight (1993 - 2002.75), about 13 points higher than last week, and are now back over that all-important 2000 number. Once again we were awoken in the middle of the night by a thinkorswim (AMTD*) alert, when the S&P emini futures contract traded back over that 2000 number. We just wish, for our own sleep-sanity, that it would either stay over or under that darned number! We couldn't resist ourselves though, and sold one of the new December contracts (as a hedge), at 2001.25. The Russell (/TFU4) is also trading higher, as are the US Dollar (/DXZ4) and oil (/CLX4). Only the 30-year bonds (/ZBZ4), gold (GCZ4) and corn (ZCZ4*) are showing any weakness. Gold is now all the way down to 1222. Will 1200 be next, or can it fight it's way back up to 1300? Natural Gas (/NGV4) traded back over $4.00 on Wednesday, but is now just under - watch out for movement in NatGas with today's EIA inventory number. 
- Today's possible movers: Boeing (BA) announced, after winning NASA's $4.2 billion contract for the "space taxi" program, that it's new spacecraft will contain a seat for "paying tourists". Being called a "taxi" leads us to believe that some paying customer should be mandatory. Our only question is where does the tourist get dropped off? Sony (SNE) announced a dividend cut (first since 1958), mostly because of this year's loss of $2.2 billion! Back to taxis; Tesla's (TSLA) Elon Musk says they will be producing self-driving cars in five-to-six years, but regulatory hurdles might push the scedule out another few years. We can envision "self-driving" taxis, at least the "driver" wouldn't smell and might speak English! The "steels" all made big moves yesterday - wih Nucor (NUE) hitting it's highest price since 2008, and U.S.Steel (X) also gapping higher enabling the stock to now be trading twice what it was just four months ago! Apple (AAPL*) looks higher, as do 
Facebook (FB*), InterOil (IOC*), Emerge Energy (EMES*), Kohl's (KSS), DuPont (DD), Monsanto (MON), and Bank of America (BAC*).
 - Today's economic events:
Housing Starts
Initial Jobless Claims
Philly Fed Business Outlook
EIA Natural Gas Inventory
Money Supply
Fed Balance Sheet
- Notable earnings before the open: CAG, IHS, RAD;
and after today's close: ORCL, RHT, TIBX.
 
"Man's chief merit consists in resisting the impulses of his nature." -- Samuel Johnson 
 
Follow us on Twitter (TWTR): whatsfrankthink- like us on Facebook (FB*) - Frank Walsh Prescott, AZ  -- Look for us on Linkedin (LNKD)
The next Market Drive event will be in Los Angeles on November 1st and Houston on November 8th. - go www.tdameritrade.com/registerformarketdrive. 
The next Money Show is in Las Vegas - November 19 - 21. Hope to see you at one of the events.
 
FHW
(* = FHW position) 
fhwoption@hotmail.com 
What's Frank Thinking? | 9/18/2014 7:53:46 AM | 0 Comments
A look back...

 

Wednesday, September 17th, 2014, Rhinelander, Wisconsin, USA 
Today is Quad-Witching Wednesday - the 260th day of 2014 and the 89th day of summer.
Births:
1271 - Wenceslas II king of Bohemia & Poland (1278-1305) 1st Santa? 
1907 - Warren E Burger - Supreme Court chief justice (1969-86) 
1923 - Hank Williams - Country singer ("Hey Good Lookin") 
1927 - George Blanda - NFL hall of famer (Bears, Oilers, Raiders)
1935 - Ken Kesey - "One flew over the Cuckoo's nest"
1939 - David Souter - Supreme Court Justice (1990- ) 
Events: 
1630 - City of Boston formed 
1776 - Presidio of SF formed as a Spanish fort
1787 - US constitution adopted at Philadelphia convention
1920 - National Football League organized in Canton, Ohio
1953 - Ernie Banks becomes Chicago Cubs 1st black player ("Let's play two today")
1963 - "The Fugitive" premiers on ABC TV 
1964 - "Bewitched" premiers on ABC TV 
1964 - Mickey Mantle gets hits #1999, 2000 & 2001
1967 - "Mission Impossible" premieres on CBS-TV
1972 - "M*A*S*H," premiers on TV 
1978 - Begin, Sadat & Carter sign the Camp David accord
1983 - Vanessa Williams of NY became 1st black Miss America
2001 - The NYSE reopened, having been closed since the Sept. 11th terrorist attacks.  
2014 -  The SPUs and gold as of this writing are wrapped-around unchanged, oil is lower, the bonds and dollar are higher and corn is once again dropping. 
 
"He who spends time regretting the past loses the present and risks the future." -- Quevedo 
 
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 from 10:30 CDT, and at the next Market Drive Los Angeles on 11/1 or Trader's Expo Las Vegas 11/19. 
 
FHW 
fhwoption@hotmail.com
(* = FHW position)
What's Frank Thinking? | 9/17/2014 7:57:50 AM | 0 Comments
Quad-Witching Tuesday

 

Tuesday, 9/16/14, Rhinelander, Wisconsin, USA 
 
- It is quad-witching week - PAY ATTENTION if you have any September monthly positions that are (ITM) In-The-Money or even close to the money. There are also dividends payable this week in some of the ETFs - like the popularly traded SPY. If you have any questions call the thinkorswim (AMTD*) trade desk at 866 839 1100. 
- Today is the 259th day of 2014 and the 88th day of the summer. On this day in 1940, President FDR signed the Selective Training and Service Act, authorizing the military draft, and some 30 years later FHW received #356 in the draft lottery, thereby missing any military service. On 9/16/1981, Sugar Ray Leonard knocked out Tommy Hearns in the 14th round at Caesar's Palace Las Vegas, and in 1974 President Ford announced a conditional amnesty program for Vietnam draft evaders. Birthdays: BB King (1925); Peter Falk (1927 - 2011).
- The 30-year bonds (/ZBZ4) are now trading in the mid-136 range, currently '13 ticks higher and appoaching last week's 137 level, still inside the 136 - 140 range they have been hovering around most of the summer. Oil (/CLV4*) is trading in the 92 - 93 range, also about where it was last week. Gold(/GCZ4*) continues to show weakness, although it is up slightly this morning -1239 up (about 4.00), it is still $20 lower than last week, and now a struggle back up to and a close over 1250 must take place, before we can see it getting back to the 1275 - 1300 level where it traded much of the summer. Corn (/ZCZ4*) is finally trading higher, but after being down much of the week, it's current 350 level is just an "ear-or-two" higher than last week's 346 level. Perhaps the grains will all stabilize or go higher now that there could be some frost on the midwest pumpkins. The emini S&P contract or SPU (/ESU4*), that was trading over 2002 last week at this time, is now under 1975. Are we headed back to 2000 or down to 1950? Anyone's guess would be as good as ours. The US Dollar (/DXZ4) hit a six year high and is trading just under 84.50, just about where it was last week.
- Possible stock movers and shakers: Apple (AAPL*) is trading slightly higher; Blackberry (BBRY*) is wrapped around $11; Microsoft (MSFT*) which was soft yesterday, might rally; Adobe (ADBE) was downgraded going into their post-close earnings announcment; Emerge Energy (EMES*) was down $7 on Monday, but after moving from 95 to 145 this summer, the 4.00 to 7.00 move have become almost ordinary; Sina (SINA*), Youku (YOKU*) and SunEdisson (SUNE*) were all beaten down on Monday - will they have a Tuesday rally? The FOMC meeting starts today - wouldn't you like to be a fly on THAT wall? 
 
- Today's economic events:
ICSC Retail Store Sales
Producer Price Index
Redbook Chain Store Sales
Treasury International Capital
 
Notable earnings before Tuesday's opening: FDS;
and after today's close: ADBE, APOG.
 
"If we had no winter, the spring would not be so pleasant: if we did not sometimes taste of adversity, prosperity would not be so welcome." - Anne Bradstreet 
 
- Like us on Facebook (FB*) -- https://www.facebook.com/frank.walsh.169 or follow on Twitter(TWTR) at whatsfrankthink, or on Linkedin (LNKD).
Look for us at the upcoming Market Drive in Los Angeles in November and the Money Show in Las Vegas 11/19 - 11/21 - see ya there. 
 
Early Morning Markets
E-mini NASDAQ Futures  4,028.25  (-0.13%) 
E-mini S&P Futures  1,974.25  (-0.09%)  
E-mini DOW Futures  17,012  (-0.09%)  
US Dollar Index  84.241  (-0.03%)  
Crude Oil  92.59  (-0.36%)  
30-yr Bonds 136'18  
 
FHW
(* = FHW position)
fhwoption@hotmail.com 
What's Frank Thinking? | 9/16/2014 7:58:39 AM | 0 Comments
Witching Monday

 

 
Quad-Witch Monday, September 15, 2014, Rhinelander, Wisconsin, USA
 
Having started on the CBOE trading floor as a runner in 1976, we were a first-hand witness to some seriously boring days. Standing near the AG Becker phone banks waiting for orders to come down to the old floor (7th floor in the CBOT) via either wire-orders or over the phone was oftentimes uninterupted for hours, unless liars poker was being played or a crossword puzzle was being worked. There were a few real old-time traders on the new Chicago options exchange, and their stories of the "good old days" in the early 1950s when less than 7 million Americans actually owned common stock (about 4.2% of the population), were sure to include reasons like the 1929 Crash and the Depression of the 1930s. Yes, there were some on both the CBOT and CBOE that were THAT old. 
 
The Glass-Steagall Act of 1933 prohibited commercial banks from doing business on Wall Street, and the independent stock brokerages could charge ridiculous commissions for their services;all done over the phone, including just stock quotations, pre-CNBC or any other quote sources other than a dial-up phone. Daily volume on the NYSE (then the only exchange) in the 1950s was less than a million shares, as mutual funds and other new investing options were still non-existent. Widespread retail stock investing didn't pick-up to any extent until the 1970s, and there were no exchange traded options until 1973. But the decade of the '70s and it's corresponding "stagflation" saw very little market movement. The Dow Jones, which was just above 800 at the start of the 1970s, had only moved to 839 to end the decade, just a 5% gain in 10 years! Not exactly a great time to be starting a new trading floor job, as markets were stuck-in-the-mud, but also not a bad time to learn how to sell options on any movement in either direction. 
 
Mutual Funds, the 1st index fund, and the Employee Retirement Income Security Act's (ERISA), opening the door for individual retirement accounts all came about in the mid-1970s and the NYSE extended their trading hours to accommodate the upticks in trading. The SEC banned fixed minimum commission rates in this time frame and the dramatic improvements in trade processing that came with some incredible advances in automation and technology all tended to uptick retail trading. In 1982 daily trading volume on the NYSE exceeded 100 million shares for the first time. And, by the beginning of the 1990s the amount of Americans investing in the US stock market numbered more than 51 million - over 20% of the population! On the CBOE trading floor we were lucky enough to partake in the incredible growth in the markets in the '80s - '90s. But we missed the real explosive volume that came in the new milenium, when 2001 saw NYSE trading daily volume exceed 2 billion shares, and a record 4 billion-plus in February of 2007. Actually, thanks to our early involvement in thinkorswim (AMTD*), we didn't miss a thing.
 
The day the OEX opened for trading on the CBOE saw FHW as the one-and-only Independent Floor Broker in the crowd of maybe 15 traders. That 1st day in 1983 we did a total of 17 contracts as the first Index Option product was a investment infant. But, by the days of pre-crash 1987 we were averaging between 3,000 - 5,000 contracts per day; as the crowd grew to about 500 traders, which included dozens of independent and firm floor brokers. Post-crash, however, the retail business in both the OEX and SPX options dried up, and by the time we closed our floor brokerage operation in 1995, our daily numbers had shrunk down to less than 1,000 per day. The incredible proliferation of new products and insane volume numbers in many stock and options products has almost completely dried up the volume in the once proud OEX pit, with the new average daily volume in the entire product now coming in at under 1,000 contracts a day! 
 
Apple (AAPL*) alone in today's electronic, low commission day-and-age will easily trade 50 million shares and on a busy option day it will seem like a zillion options. The excitement, immediate gratification and outrageous volume of the weeklies has surprised everyone in the investment industry (thanks to thinkorswim founders Tom S and Scott S), and even old timers like us have been known to trade them. Oh my goodness, we can't even imagine filling all that paper the old way, but it sure would be fun trying!
 
"How many you got at 1/2?" "I have 100 to sell at 1/2." "Buy 'em." "Okay I can sell another 500 at 9/16s." "Buy 'em." "I got another 1,000 a 5/8s." "You J _ _ O _ _! You're killing me! How many you got in total." "Just keep buying them and you will find out." - BAM and FHW (OEX pit circa 1986) 
 
Follow us on Twitter (TWTR): whatsfrankthink, like us on Facebook (FB*) - Frank Walsh Prescott, AZ or look for us on Linkedin (LNKD).
Remember the upcoming Market Drive Los Angeles on Nov 1 and the Trader's Expo Las Vegas Nov 19 - 21. 
FHW 
(* = FHW position)
fhwoption@hotmail.com
 
What's Frank Thinking? | 9/15/2014 7:28:49 AM | 0 Comments