Wonderland

Posted on by The INO.com Team

By: Gary Tanashian of Biiwii.com

“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?” –Alice in Wonderland

Silver out performs gold as both rise with Treasury bonds, which are in turn rising with stocks, as Junk bonds hit new recovery highs while USD remains firm as inflation expectations are out of the picture. This is highly atypical, maybe even unprecedented.

Some, deeply dug into their particular disciplines and biases, might say it is dysfunctional, as this backdrop simply does not make sense using conventional methods of analysis. Why again did I name this service Notes From the Rabbit Hole?

When the S&P 500 was robo rising month after month, year after year as it did from 2011 to 2015, you did not need the market report with the funny name because all was linear and as it should be. The same actually, could be said for gold. It was linear and as it should be in its relentless downtrend. Casino patrons simply ride the trends!

But today things are making sense simply because we don’t have a need to make them make sense as linear thinkers would do; we go with the indicators and charts. Continue reading "Wonderland" →

The Gang That Couldn't Shoot Straight

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


Is a July rate increase back on now because of the strong June jobs report? If not July, then September?

June’s unexpectedly strong 287,000 gain in nonfarm payrolls – more than 100,000 above Street forecasts – has some people believing that the Federal Reserve will now once again change its mind and increase interest rates sometime this summer, either later this month or at its September conclave.

But the bond market isn’t buying it, and neither am I. The yield on the benchmark 10-year Treasury note ended last Friday at a new record low of 1.36%, down eight basis points for the week. That doesn’t sound like bond investors believe that a rate increase is imminent. And it’s hard to believe that the Fed, which won’t make a move unless the sun, moon and stars are in perfect alignment, will suddenly take the big rebound in nonfarm payrolls as the green light to raise rates. It will take a lot more than that. Continue reading "The Gang That Couldn't Shoot Straight" →

Have You Caught 'Em All?

Posted on by The INO.com Team

If you haven't noticed it around you in public or the news, Pokémon Go is the craze that is sweeping the nation. Now you may be saying to yourself, why is he talking about Pokémon? Well, I have two reasons that I'll lay out below.

The first reason is social interaction and getting outside. My wife and I were out in downtown Annapolis last night enjoying a beautiful evening by the water when my wife said, "what are all these people doing walking around looking at their phones? It's like the zombie apocalypse." This statement cracked me up as I looked around. She was right, there were a bunch of people walking around. I then explained to her the new Pokémon Go craze and how the game had just been released. We decided to sit back and watch as this was going on and a few things stood out to me.

1. At least 90% of the people at city dock were playing this game. And a lot of them were clearly down there to specifically play the game. This has a couple of effects on people and the economy of the area. People are outside getting exercise whereas they may normally be inside watching tv or so on and the local businesses are undoubtedly making more money than normal with the larger than average crowds. Continue reading "Have You Caught 'Em All?" →

Cuda, Woulda, Shoulda

Posted on by The INO.com Team

Hello MarketClub members everywhere. Okay, so what's with Cuda, Woulda, Shoulda?

Well, the first one, Cuda is the symbol for Barracuda Networks Inc. (NYSE:CUDA) which is looking very positive in my eyes. With all Trade Triangles green and trending higher it looks as though this market has every opportunity to move higher.

MarketClub's Mid-day Market Report

A little over a year ago Barracuda Networks was trading over $45 a share and currently is trading just below $20. The potential for this stock to move at least into the $30 area is quite high in my opinion as that represents a 50% Fibonacci retracement. Now I'm not advocating jumping and buying the stock today as I would like to see some consolidation. It will be a buy if it pulls back to the $18.60 level which is the monthly Trade Triangle entry signal. Continue reading "Cuda, Woulda, Shoulda" →

Supercharging Portfolio Returns - Empirical Options Data

Posted on by The INO.com Team

I’ve written many articles highlighting the advantages options trading and how this technique, when deployed in opportunistic or conservative scenarios may augment overall portfolio returns while mitigating risk in a meaningful manner. Options trading in layman’s terms can be described as a parallel to owning a rental property. One owns an asset that he is willing to leverage in the form of a tenant occupying his home for monthly rent. In the case of options trading, one owns shares and he is willing “leverage” these shares for “rent” or in the case of options, a premium. In this scenario, the owner of the home gives the tenant the option to buy the property or rent to own if he/she desires prior to a specified date. For the owner of the stock, he is providing the option to buy the underlying security at a specified price on or before a specified date. From the renter’s perspective, if the home value is increasing and the housing market is strong and on an uptrend, the renter would exercise this option and elect to buy the home. In the case of options trading, the renter of the stock would exercise the option to buy the shares if the shares rise significantly and lock in the lower, agreed-upon price. In the housing scenario, the renter elected to have the option to buy however didn’t have the obligation to purchase the home. The tenant witnessed home values increasing and decided to exercise the option to buy and capitalize on the rent he was already paying into the property. For the renter of the stock, the renter had the option to buy the underlying shares however he didn’t have the obligation to purchase these shares. The renter of the shares witnessed the stock take off and decided to exercise the option to buy and capitalize on the “rent” he had already paid into the option contract. As the owner of the property/stock, the ideal scenario is to own the property/stock and continuously collect rent/premiums on a monthly basis without relinquishing the property/stock. I will provide an overview of my empirical case study based on my options activity during Q2 2016 (Table 1). Here, I’ll provide details focusing on optimizing stock leverage via covered calls. Emphasizing the ability to sell these types of options in an opportunistic, aggressive and disciplined manner to generate liquidity while accentuating returns and mitigating risk via empirical data. Continue reading "Supercharging Portfolio Returns - Empirical Options Data" →