Despite Inflation Jump, Stocks Have Winning Week

Posted on by The INO.com Team

Despite inflation hitting a 39-year high, the S&P 500 closed at a record on Friday, gaining +0.95% to 4,712.02, capping off a strong rally this week. The DOW gained 216.30 points or +0.60%, to 35,970.99, and the NASDAQ climbed +0.73% to close at 15,630.60.

The DOW rose +4.02% this week, snapping a 4-week losing streak; that's also its best weekly performance since March. The S&P 500 and NASDAQ added +3.82% and +3.61%, respectively, marking their best weeks since February. Continue reading "Despite Inflation Jump, Stocks Have Winning Week" →

Gold, Silver, Gold/Silver Ratio & HUI

Posted on by Gary Tanashian

Precious metals are still locked down. With an understanding that there is always much more in play than nominal charts (the macro & sector fundamentals for example, which bounced of late but never did definitively flip positive), let’s review said nominal charts of gold, silver, and HUI along with an update of the Gold/Silver ratio for good measure.

Meanwhile, we will continue to update the full spectrum of considerations for a positive view of the precious metals complex, including gold’s standing vs. cyclical, risk-on markets/assets, the state of speculative vs. quality credit spreads, the inflationary backdrop (despite promotions to the contrary, cyclical inflation is not beneficial to the gold mining industry), the seasonal averages and the charts of the metals and miners over various time frames in NFTRH.

Gold

The daily chart shows the gold price (futures) below the moving averages but above short-term support after failing – amid much personally observed cheerleading to the contrary – to cross the bull gateway at 1920.

As a side note, the broken blue downtrend channel on this daily chart is actually the Handle to a large and bullish big picture Cup that only has one thing going against it that I can see; too much exposure by too many TAs, which of course means it may not be expressed until many of those TAs recant their stories (we have noted all along that the Handle can drop all the way to the 1500s without damaging the 2022 bullish Cup story. Indeed, if it were to happen (not predicting folks, but being prepared) it would be healthy. There is nothing healthier than a good running of the bugs before a major bull move. Continue reading "Gold, Silver, Gold/Silver Ratio & HUI" →

Emerging Markets - Risk Off?

Posted on by Aibek Burabayev

I would like to share my recent finding in the Emerging Markets ETF chart, as it could be a wake-up call for investors from the distant 2007.

Usually, emerging markets provide a higher return amid a higher risk profile. When investors cut the risk, they often start with emerging markets to quit until the liquidity is available.

The chart below represents the dynamics of iShares MSCI Emerging Markets ETF (EEM). It tracks the MSCI Emerging Markets Index covering 25 countries shown in the following graph.

LLLL

Source: msci.com

Continue reading "Emerging Markets - Risk Off?" →

Ethereum 2022 Price Target: $27,884!

Posted on by Wayne Burritt

After Thanksgiving, I was perusing the crypto space and kept seeing 2022 price targets for Ethereum (ETH) that were frankly all over the place.

I saw everything from $5K, $6K, $7K, even $14K. And with a recent price of about $4,700, I figured that these nosebleed predictions were way too bullish. And that’s coming from someone who has sung Ethereum’s praises time and time again.

I couldn’t have been more wrong. After I did a little analysis, I came up with a 2022 price target for ETH that put even these huge predictions to shame.

The Outlook For Ethereum (ETH) Is Huge

First off, I don’t like price predictions. They don’t really mean much. And in my experience, they aren’t that reliable.

But they’re fun to play around with. So, as we set out on my quest to predict the price of ETH in 2022, take my analysis with a little tongue in cheek.

Now, down to business.

Sometimes a picture is worth a thousand words... Continue reading "Ethereum 2022 Price Target: $27,884!" →

Company Spin-Offs And Adjusted (ADJ) Options

Posted on by Noah Kiedrowski

Occasionally, businesses undergo corporate restructuring for various reasons. Often this involves spinning off a separate, independent entity to potentially unlock value for shareholders over the long term. Some notable spin-offs include Dow from DowDuPont, Alcon from Novartis, Otis Elevators from United Technologies, and VMWare from Dell. When company spin-offs occur during an options expiration cycle, this can complicate the normal lifecycle of a pending options contract. When this happens, these options are denoted as "adjusted" with the corresponding ADJ within the options chain. One of the most recent notable spin-offs was Kyndryl (KD) from International Business Machines (IBM), as these two broke apart and traded as separate entities during an actively pending option contact. The share split ratio changes the deliverable of the option contract and thus requires normalizing the two entities relative to the original contract value when adjusting for the new strike price. This normalizing is necessary as shares may ostensibly be in the money; however, as a function of the share split ratio, the option contract is out-of-the-money and not assignable.

Options

Figure 1 – IBM spin-off of Kyndryl and its impact on pending options as seen via a Trade notification service - Trade Notification Service

Breaking Down An Adjusted Option

IBM completed a business spin-off of (KD) that publicly traded as a separate company. The share spin-off was a 1:5 share split translating into every 100 shares of IBM; the shareholder also receives 20 shares of KD. As such, any options that were active during the spin-off experienced a deliverable change that was equivalent to 100 shares of IBM plus 20 shares of KD. Continue reading "Company Spin-Offs And Adjusted (ADJ) Options" →