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Back In the Black

Posted on 13 December, 2015 at 21:14 Comments comments (19)
Weekly Market Assessment
By:
 
Just like that, we're back in the black! What a difference a week makes. Putting risk on paid off, even in the face of the terrorist attacks in Pairs, that should have put the markets in defense mode. However, markets rallied across the globe in what many call a patriotic rally. Going from the worst week in over three months to having one of the best weeks in a year can make understanding the market even more difficult as at times it seems very irrational. Is the market irrational or is it what many theorists call Efficient Market Hypothesis? This happens to be an investment theory that states it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. This is why they have created Index Funds, so that you are aligned with the market and have limited exposure to one individual stock that could "blowup" your account when the CEO resigns to "spend more time with family." Sounds nice, however it usually is a sign of trouble. So, you can deal with mirco events or macro events which at times have a greater affect on the overall market compared to an individual stock. Which naturally brings us to the long standing argument of active and passive investing. So, was it possible for the markets to digest the events from last Friday and that explains why it was down last week and now up this week?  Well, that is of course the million dollar question.        

I am trying my best to keep interest rate talk out of this assessment as I feel it has been non-stop. I ended the last assessment with a small insight into what has been going on in the commodity sector and if you are a holder of any commodity related stock, this year has been extremely stuff to say the least. We have reached thirteen year lows in most commodities and the pain looks like it will never end. Is the market oversupplied that bad or is the demand side the reason? It's again a question of who you are asking and how they perceive the environment that makes up the foundation of any market, supply and demand. Have we finally reached a bottom where demand will pick up as prices are at record lows, or are we entering a consolidation phase where companies are able to merge/buyout other companies related in their sector to try and create synergies and growth through acquisitions. For now it has been wait and see however with low rates that are going to be raised in the near future, you would think companies would want to get in before the cost to finance an acquisition becomes more expensive. Like so many times in the past, a commodity looks like it will never recover when its at its lows and will never fall when its making new all time highs, however something always changes and the buying opportunity is passed up and we are left saying, "why didn't i buy it when it was so cheap!"     

 Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.

Square (SQ)- $12.85- This went public on Thursday and is run by the same person who founded Twitter. It's a payment processing company, that also provides capital to small business that aren't able to receive traditional funding. I have purchased shares in SQ and may look to add to it.           

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital1. This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

BlackPacific Capital has created two funds. The first is the Total Return Fund and the other is the Growth Fund. Both of these funds will be compared against the S&P 500. Both will hold a total of no more than five companies each. The Total Return Fund is a low turnover fund where every holding must have a dividend and be undervalued to its peers. The growth fund is made up of momentum high growth stocks where the turnover rate is much higher. Below are their Weekly and Year to Date returns. For more information and to see the holdings in each fund click here
 
New holdings and liquidated positions: None this week. I am looking for a right entry level still in JP Morgan, Exxon Mobil and Phillip Morris for the Total Return Fund. For the Growth Fund I'm looking for an entry into Tesla and may swap that out for Square.    

S&P 500 Return 
Week: 3.35%
Year to Date: 1.69%

Year to Date: 2.5% 

Week: 6.16%
Year to Date: 6.16%

What Goes Up Must Come Down

Posted on 13 December, 2015 at 21:11 Comments comments (9)
Weekly Market Assessment
By:
 
What goes up must come down! What was an unbelievable rally in the market in October seems to have reached a point of exhaustion. After hitting the lows in August and rallying all the way back to even for the year, we seem to have reached a short term peak in the market. The culprit for making this week one of the worst in just under three months...the good ole Federal Reserve! Of course the on again, off again remarks along with market data that suggest that they may be a December rate hike has the market worrying that it "may" happen this time. Will the market take another dive before the meeting or will we remain in a trading range, frustrating traders that are looking for market direction and trying to position themselves before the meeting. What are we going to be talking about when the Federal Reserve finally removes its hand over the market? Bill Clinton I guess said it best, "It's the economy, stupid." Is it possible to look past the long awaited rate hike and realize that "if" they do hike it will only be 25 basis points or is the market truly not ready for such a thing. Has this whole rate hike talk only been an excuse to sell the market, giving those that look past it another great opportunity to buy assets at discounted prices. There are going to be tons of questions when it finally happens and I have a feeling that when it happens it wont be as bad as we have been making it out to be! 

The buy the dip mentality continues to remain as the most simple but hardest thing to do in this market! The old saying goes, the bigger the risk the bigger the reward. However the tolerance for risk is something not many understand because when it arrives, most hit the exit button. Over the last five years there have been numerous times where the market sells off and the reminder of 2008/09 comes right back into the spotlight. This is what the market does to us, it reminds us, if we lived through them, of that time and the mere thought paralyzes us to not step in and take that risk of buying on corrections. It seems physically impossible to do when the event is actually taking place. Fear and panic sets in and overwhelms the mind with just one thought, get out! The market has an evil trait where it wants to inflict the most pain on the most amount of people before it lets up and changes its mind. This last paragraph may come off as if we are in a major selloff, we aren't, however if you look towards the commodity markets and especially crude oil this paragraph is very relevant to those who are investing in it. So here is to the buy the dip investors and the investors willing to take on risk looking for the big reward!         

Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.        

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

BlackPacific Capital has created three funds. The first is the Total Return Fund and the other is the Growth Fund. Both of these funds will be compared against the S&P 500. Both will hold a total of no more than five companies each. The Total Return Fund is a low turnover fund where every holding must have a dividend and be undervalued to its peers. The growth fund is made up of momentum high growth stocks where the turnover rate is much higher. Below are their Weekly and Year to Date returns. For more information and to see the holdings in each fund click here
 
New holdings and liquidated positions: -11/17- GPRO was added to the Growth Fund at $21-11/12- AIG was added to the Total Return Fund at 59.50, while locking in a dividend yield at 1.88% 

S&P 500 Return 
Week: -1.53%
Year to Date: -3.5% 

Year to Date: -1.23% 

Week: -9.2%
Year to Date: -6.5%

Let the Jawboning Begin!

Posted on 13 December, 2015 at 21:05 Comments comments (87)
Weekly Market Assessment
By:
 
Let the jawboning begin! Just one week after making the decision to keep rates low, Janet Yellen said in a lecture at UMASS that "it would likely be appropriate to raise rates from near zero, sometime later this year, though the decision would continue to rely on economic data." Well how can we go from being solely data dependent to now just saying rates could raise in a short few months. I believe "they" the Federal Reserve have again resulted to verbally telling the market what may happen and looking to see how the market will react. Her comments also lets the market know that they wanted to raise rates however economic conditions did not fall within their realm of being an appropriate time. So we are again waiting to see what they will do. However waiting till December to raise rates, which I believe wont happen, will put many countries, sovereign wealth funds, investment firms and any other financial instrument that relies on the U.S. Federal Funds Rate in a tough spot with little time to adjust before the turning of the year. So, I now wait like everyone else to see if my understandings as to how certain markets work and how the Federal Reserve reads these markets as it relates to their policy decision, will now come under the microscope.      

We left the third quarter as the worst financial quarter in four years! However October has been know as the Bear killer, meaning those that are short the market have no choice but to cover at a loss and watch as the market moves higher! True to its past October was the best month in four years! The S&P 500 and Dow returned ~9% while the NASDAQ returned 10%. Crazy... yes, however in a secular bull market, corrections are needed for the market to reset itself and rest before a move higher. Amazing how quick things can turn in the market when everyone is determined to see it fall only to watch it regain strength and return to its record levels. We enter the fourth quarter with one last major Monetary Policy meeting and of course all the pundits and media talking heads will be saying that this is the most important Federal Reserve meeting ever! Will this past short term correction fuel the market to push itself into new all time record highs, or will the market remain flat waiting to see if the almighty Federal Reserve will deliver what the market wants. Have they been too dovish for too long or has their policy on being data dependent proved right that rates have remained at these levels to help the economy along and out of the Great Recession?      

Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.       

 See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.    

BlackPacific Capital has created three funds. The first is the Total Return Fund and the other is the Growth Fund. Both of these funds will be compared against the S&P 500. Both will hold a total of no more than five companies each. The Total Return Fund is a low turnover fund where every holding must have a dividend and be undervalued to its peers. The growth fund is made up of momentum high growth stocks where the turnover rate is much higher. Below are their Weekly and Year to Date returns. For more information click here
 
New holdings and liquidated positions: -10/26 Valeant Pharmaceuticals (VRX) has been added to the Growth Fund at $95.35 

Year to Date: 1.27% 

Week: 2.49%
Year to Date: 2.49% 

S&P 500 Return
Week: .20%
Year to Date: 1.21%

Well well well...

Posted on 22 September, 2015 at 22:14 Comments comments (10)
Weekly Market Assessment
By:
 
Well well well, to no surprise the Federal Reserve decided not to raise rates on Thursday. Their reason, none other then what I have been saying so many times before, they are struggling to create inflation.  They have now extended their date to reach their inflation target to 2018! Now, that doesn't mean that they will not raise rates until then but once we have some signs that inflation is improving, could give them the confidence to make the move and raise rates. So how did the market react to this decision to postpone the hike, a 300+ point sell off as investors took this news as a sign that the economy was weakening. This can be argued however with continued low rates and a negative reaction in the market will only further provide longer accommodative monetary policies. The markets crave lower interest rates as a way for companies to pursue acquisitions, cheap financing for future projects and a way to fund the purchases for share buybacks among many other things. So for now we wait till the next meeting to see what reason they come up with for not making the decision to hike rates.   

 So why was September more important than all the other Fed meetings.  I don't think it was, I think the market and the media build up every single meeting as the "biggest and most important meeting of the year!" They seem to always forget that the Federal Reserve has a dual mandate, that is maximum employment and price stability.  The price stability or inflation rate is the one leg of the mandate that is not coming close to their 2% target, which is stated in all prepared remarks as, "inflation continues to run below our longer run objective." Now, could inflation spike without the market knowing it. No, one just has to look at a group of commodities and realize that prices still remain in a somewhat free-fall. Along with inflation concerns, there are also other variables the Federal Reserve must also take into consideration when thinking about raising rates and that is the current market environments that surround us like China and Europe. Stated in President Yellen's prepared remarks was that the Federal Reserve is "monitoring developments abroad." This was the one thing that stood out from everything else. As Former Dallas Fed President Richard Fisher put it, "We cant be responsible as the Central Bank of the U.S. for solving the worlds problems."  If things in China or Europe turn around, will the Federal Reserve take another look at their monetary policy decision and if things get worse but inflation rises due to other Central Banks easing policies, where will we stand then? With one Fed meeting left in the year, it looks like we have to watch this movie one more time, only to be disappointed again that the ending hasn't changed! 

The Rant: Going Off on a Tangent with My 2 Cents:Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.        

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades.    

 GoPro (GPRO) - After breaking down on Monday after an article in Barrons that with increased competition GPRO could sink to $25 a share. GPRO sold off over 4%. The following day, CEO Nick Woodman came on CNBC to discuss how competition is actually bringing more awareness to GPRO and with that it has actually increased its market share and that GPRO has many more products in the works that go beyond the camera. I have purchased common shares at $33.55. I have also sold a short term Iron Condor at $37/38 and 32.50/31.50.   

FireEye (FEYE)- I bought a SEPT4 38 "CALL" last week and sold it today for a 36% gain. I have now gone out to OCT1 $38.50 and 39.50 "CALLS  

Mobileye (MBLY)- I bought a SEPT 47 "PUT" and sold it the same day for a quick gain.  

Tell If You Have Heard This One Before...

Posted on 18 September, 2015 at 18:38 Comments comments (8)
Weekly Market Assessment
By:
 
Tell me if you have heard this one before... "Increase in inflation rates seen materializing slower than expected." Last Thursday we heard from the ECB (European Central Bank) President Mario Draghi. He reiterated his concerns of inflation and how they are not meeting the Governing Council's mandate of price stability, or in layman's terms, a low inflation rate. We have heard this same tone from our Central Banks President Janet Yellen. We (The U.S. and Europe) can not get inflation near the 2% mark, even though we have been pumping the system with low rates and currency devaluations. Are we really fighting deflation in an environment where historical accommodative monetary policies are being implemented to try and stimulate economies back to health. How can this be and how long will it last. Some say QE4 (Quantitative Easing) and some say QE Forever! Recent market events, have changed some analyst thoughts and predictions from the September rate hike to now occurring in December. Lets see where we are in 3 months and if they have changed their minds again.         

We got the jobs report last Friday, forecasters where expecting an increase 223,000 jobs, however the number fell short to 173,000 new jobs. On a positive note the unemployment rate fell to its lowest level not seen since 2007, to 5.1%. The miss on the employment report should further give the Federal Reserve reason to not increase interest rates this year. Accompany this with the above mentioned comments from the ECB President about willing to further increase their bond buying program and it becomes even more difficult for the U.S. to be the one to raise interest rates. So how did the market react to this report, by selling off more that 250+ points. Not expected, however I think that in the short term investors will realize that the Fed has been backed into a corner with no choice but to continue to put off the idea of raising rates this September. This important Fed meeting is set for this Thursday and should make for an exciting time in the market as many believe they should raise however like the Fed states that they remain data dependent and so far this data has not proved to justify a hike in rates.   

The Rant: Going Off on a Tangent with My 2 Cents:

Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.

GoPro (GPRO) $32.42- GPRO has lost more than 50% of its value in one month. It is approaching it's IPO price and this may start to bring in buyers that missed out on its initial run to $90 since it went public. I believe this a great momentum stock that could attract potential acquirers and with a recent upgrade from an investment firm with a price target of $80, I believe this is a great risk/reward play.    
 
   
See What I'm Trading:
You can now view all my real-time trades by following this link, BlackPacific Capital1 and BPC2 This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.    
 
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades.    
 SeaDrill (SDRL)- I bought a SEPT $7 "CALL" on this most recent bounce in crude oil.  

 GoPro (GPRO)- I bought a SEPT $42 "CALL" , I am still holding this and also purchased a SEPT4 $36 "CALLS"    

Mobileye (MBLY)- I bought a SEPT 47 "PUT"

Only Market Where Customers Run When Things Are On Sale

Posted on 18 September, 2015 at 18:36 Comments comments (10)
Weekly Market Assessment
By:
 
The stock market is the only market where things go on sale and all the customers run out of the store. Thanks Ro!  Last Monday, the selloff from Friday continued however in a more severe dropoff to say the least.  I woke up to the DOW futures being down over 1,000 points. Absolutely insane! I was a buyer in the early morning as Apple, Netflix, and JP Morgan were all down over 15%. I was looking to buy the best of breed companies that everyone wants but haven't had a chance to get them at the right price.  Many believed the liquidity had dried up and that a flash crash may have occurred as well. Within the next 15 minutes, Apple rallied from $92 to $105, Netflix from $82 to $98 and JP Morgan from $50 to $60. Over the next few hours the market went from being down 1,000 points to coming within 100 points of being in positive territory. So a 900 point reversal in one trading day. This is a traders dream. Companies were trading at an extreme discount and at levels that may not be seen again this year. The volatility index (VIX) jumped to over 45 not seen since the 2008 recession, it gained over 100% in one day. I have never witnessed these types of moves in the market, and hope it's not a early hint to a black swan event.  

"Markets in turmoil" along with "chaos in the markets" where flashing on every news station and almost every headline read something similar. With almost no chance to get out of a market in free fall, panic sets in. Investors almost become paralyzed as fear overwhelms the decision making process while there seems to be nothing but bad news surrounding them. What has been the catalyst to cause this selloff, everyone is pointing there fingers at China, as fears over their growth slowing have come under the spotlight. The government has intervened to further stimulate the economy and help stop the selloff in their equity markets. Systemic risk is creeping into our markets for now and only time will tell if we are going to be truly affected by China. However like so many times before these events pass as quickly as they came. In regards to China's growth, it cant be looked at as linear, there are going to be small bumps in its trajectory. The great investor Warren Buffett once said, "Be greedy when others are fearful." So when these companies that have a fortress like balance sheet go on sale, there is only one thing to do, close your eyes and just buy them!    

 The Rant: Going Off on a Tangent with My 2 Cents:

Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.
 
Netflix NFLX) $105.55- Has no exposure to China, however NFLX has followed this market down with a more than 10% haircut since hitting $117 last week. A break below $100, if the market gives it to you, will be bought and I will be looking to pick up options on any further downside.  
 
See What I'm Trading:
You can now view all my real-time trades by following this link, BlackPacific Capital . This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.    
 
From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades.    

 SPDR S&P 500 EFT (SPY)- To protect against any short term downside I have bought a weekly $191 "PUT" option.  

NetFlix (NFLX)- I bought and sold some Vertical 'CALL" Spreads on NFLX at $99/105 and $94/101  GoPro 

(GPRO)- I bought a SEPT $42 "CALL"     

Apple (AAPL)- I picked up a SEPT $98 "CALL" last Monday and sold it on Thursday for a 38% gain. I also sold my weekly $111 "CALL" option from last week for a small gain.      

The Bid finally Comes but is Quickly Gone

Posted on 18 September, 2015 at 18:33 Comments comments (9)
Weekly Market Assessment
By:
 
Just like that, we catch a bid! Well, for two days we did... and now we are in a major selloff. Welcome to life in the market... where uncertainty, paradoxes and contradictions make trying to understand it nearly impossible.  Today, all markets are very much correlated.  When our market sells off, questions like... Is this just a coincidental correction or is it the beginning of something bigger? Are we heading into a recession or deflationary environment? The list goes on and on when the market isn't moving in the direction that everyone wants it to, which is always... up up up! Was this a breather before we selloff another couple hundred points or was the 5-10% correction all we needed to head to higher grounds. Like so many times before, we look back and say, "Why didn't I buy on the dip?" One statement that helps explain the extreme difficulty of making a decision such as this, "Trading presents us with a fundamental paradox. How do we remain disciplined, focused and confident in the face of uncertainty?" Welcome to my life and those that choose to take on the task of figuring out the markets and managing risk. Another one of the most famous and well known sayings about the market is to "Buy low and sell high" ...so why does it seem so difficult to implement this elementary trading principle? I guess its like that other old saying..."If it was so easy, everyone would be doing it!"

On Wednesday we got the most recent Meeting Minutes from the Federal Reserve. As I have stated numerous times in my previous assessments, the Fed will not raise rates this year and these following excerpt from the Fed provides some further confidence in why a low rate environment is here to stay! The Federal Reserve goes on to saying, "Conditions for a rate hike were approaching"...."most judged conditions for a rate hike are not yet achieved," and my favorite which I always talk about is the "Federal Reserve revises down its inflation outlook..." Wow! So, even though we have had record low interest rates for over 5 years we still cannot create some inflation that would satisfy the other half of the Feds dual mandate. Think about that... The Dow has now fallen 10%, which technically is considered a correction to market watchers. This week alone we have lost over 1000 points. Crazy what can happen in just a couple of days. Has the correction that everyone has been begging for, finally arrived? For now like so many times in the past, it's time to start picking up companies that are on sale, as the Fed looks to have no choice but to keep rates lower for longer! 

The Rant: Going Off on a Tangent with My 2 Cents:

Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.
 
Alibaba (BABA) $68.18- After missing on its latest earnings report, BABA has sold off more than 10%. It now trades below its opening IPO price and now looks like a buying opportunity. A falling wedge formation in terms of the technicals looks to be forming and with it at these levels it is attractive from a valuation standpoint.

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital . This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades, however I ill be looking to buy "CALLS" Monday if we selloff any further.    

SPDR S&P 500 EFT (SPY)- After a selloff on Wednesday and a slow recovery in the market I bought an AUG $208 "CALL" I sold this "CALL" option for a 67% gain.  

United States Oil Fund (USO)- After WTI hit a new 6 year low I bought a AUG $14.50 and $14 "CALL" Still holding this and have added to the position.    

Apple (AAPL)- I picked up a weekly $111 "CALL" option on Apple as it has sold off more than 20%.   

 LifeLock (LOCK)- I have bought more SEPT $9 "CALLS", as LOCK continues to be beaten down after the report from the FTC, however LOCK rallied more than 4% on Friday compared to the market which was down over 2%.    
 
--

Can't Catch A Bid

Posted on 18 September, 2015 at 18:29 Comments comments (11)
Weekly Market Assessment
By:
 
The market can't catch a bid! Over the past six trading sessions the market has been in the red and this hasn't happened since last October. We are down over 800+ points since May and getting close to a 5% correction. However there seems to be no real sense of fear and panic. The fear index or VIX is trading below 15 which signals to me calm in the market. While the 10 year Treasury Bond trades above 2.25% and Gold continues to trade at multiple year lows, all of these are not screaming, "get out of the equity market!". Is the rug about to be pulled out beneath our feet or is this just a slow and methodical correction? For a healthy market to continue on its path from bottom left to top right we will have numerous pit stops where the market needs a break before its back onto the raceway fully fueled and fine tuned.  However the market is also a discounting mechanism and looks out months before anything truly reveals itself, catching those that have finally chosen to enter the market at the wrong time. This is investing/trading at its finest, take on risk and enter the market or stay out and preserve principal only to miss out on another leg up. Depending on the choice one person makes will either make them look like a genius while the other remains stuck in a losing position thinking he zigged when he should've zagged! 

The recent jobs report came out Friday showing 215,000 jobs were created, just under the estimated 225,000. The unemployment rate now sits at 5.3%. So it looks like one leg of the Federal Reserve's mandate of "maximum employment" has been fulfilled, now we are waiting for signs of inflation to kick in to bring on a tightening in yields. Everyone is now set on a September rate hike however when looking around the globe it still looks like the move should be put off till next year and that remains my outlook. China is still a concern, while Greece is waiting for its third bailout and crude oil along with other commodities have again fallen to their March lows, while the dollar continues to rise in the face of low rates. This is what gives me more confidence in standing by my prediction of a 2016 rate hike. We do not have inflation at or near the Feds mandate of 2%. Until that is reached I believe rates will remain unchanged. We also have to remember that across the globe, almost every major economy is still in a very accommodative low interest rate environment, where countries are trying to fight off any deflation worries.  China, Japan, Europe and the United States are continuing to keep rates low to stimulate the economy to where higher rates will in the future be met with open arms, however for now I believe "we" don't want to be the odd man out. 

The Rant: Going Off on a Tangent with My 2 Cents:
Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.
 
Apple (AAPL) $115.25- After missing on guidance for its 3rd quarter AAPL has sold off from its highs around $135. It has dropped below all of its major simple and exponential moving average. It trades a significant discount to its peer in term of it P/E ratio and when deducting its cash from this ratio its even more undervalued to its peers. For these reason it has been added to the watchlist.

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital . This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades  

SPDR S&P 500 EFT (SPY)- After a selloff on Wednesday and a slow recovery in the market I bought an AUG $208 "CALL" 

LifeLock (LOCK)- The FTC came out 2 weeks ago and said the company violated a previous settlement with the Federal Trade Commission. The stock lost more than 50% of its value and I believe this is way overdone. I have purchased common shares at $9.80 and August $7 "CALLS".  

 Twitter (TWTR)- I bought a AUG $28 "CALL" last Friday. On Monday they announced a partnership with the NFL and TWTR interim CEO Jack Dorsey bought more shares in the open market. This gota 5% pop on Monday and I still hold the option.  

Fireeye (FEYE)- I bought a weekly $43/44 "CALL" Spread as it looks to have found support at its 150 day moving average. It has hit and bounced off this level 4 times while being held down by its 100 day average. A break above this level, i should be able to exit the position as volatility should become depressed.   
 

Never Short a Dull Market

Posted on 18 September, 2015 at 18:26 Comments comments (10)
Weekly Market Assessment
By:
 
The saying goes, never short a dull market. The past two weeks have been full of extreme moves up but then again, extreme moves down. We contentedly see the DOW open over 200 points, only to watch a slow steady death of all those gains. The same holds true with harsh negative opens that creep up to end the day in positive territory! These huge reversals, of course, happen at the 200 day moving average. This moving average is used by almost every investor for market sentiment and overall strength.  We are approaching the average from above, so a break below signals weakness in the market and a bounce off of it expresses strength. So a back and forth battle has ensued and, so far, its beginning to take a familiar shape, when this level is tested, buyers win out! The last time we broke below this average was in October of 2014 and we rallied 10%. The time before that was in 2012, since then we have gained over 42%! Has another great buying opportunity presented itself? Just looking at these two small examples should answer that question, however this comes at a time where the China stock market has collapsed ~35% in three weeks... fears over Greece leaving the Eurozone and Puerto Rico potentially defaulting on over $65 Billion of debt. The most money is made when the most risk is taken nevertheless, doing this is much more challenging than simply saying.

As we enter earnings season the market has remained in a very tight range. Trading with +/- 1% since the start of the year. Have we reached a market peak, where smart investors are unloading their shares to the less informed or are we building another base to move further to the upside? Anyone who has been shorting the market these past years have been burned for obvious reasons and right now after hitting and dropping below a major moving average, in addition to bouncing, showed how you just can't short this market. Investors will be looking for companies that can continue to beat on the top and bottom line which should signify a further move to the upside... giving confidence that the market is fairly valued and not looking overheated in terms of valuations. As of last week, the NASDAQ has broken above previous all time highs and closed in record territory! So for now, we remain in a holding pattern waiting to see who will flinch first and decide which direction we head! 

The Rant: Going Off on a Tangent with My 2 Cents:Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.           

See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital . This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.    

From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades  

SPDR S&P 500 EFT (SPY)-Bought and sold a JUL2 212 "PUT".   

National Bank of Greece (NBG)- Still holding this position with an average price at $1.01. The Eurozone members will meet on Sunday to either accept or regret Greece's new proposals on austerity measures and debt relief of Greece. Huge spec play, however i find it a good risk/reward profile and the odds of Greece leaving the Euro remain low.  

VelocityShares 3x Long Crude Oil ETN (UWTI)- After a more than 10% less off on crude oil, the $50 support level is coming under pressure and I'm looking for it to hold here as it is a major psychological and technical level. This is also at the 61.8% retracement level from the highs of this year. I have purchased shares in this ETN and hold a cost basis at $2.0

Tesla (TSLA)- After retesting all time highs I bought JUL 277.50 "PUT" and sold it the following monday for a significant 1 day gain. This came after an analyst firm downgraded the stock and with a major sell off in the overall market on Monday.   

Apple (AAPL)- After falling to its 200 day moving average, I bought a JUL5 $125 "CALL" option as AAPL reports its earnings after the close on Tuesday!   

GoPro (GPRO)- I have bought shares in GPRO at $55.94. Its looks to have support at some major moving average and after Ambarella (which supplies the cameras) beat on its earnings gave a better insight to how GPRO was doing.  I have also purchased a weekly Vertical "CALL" Spread at $59/62 as GPRO reports its earnings after the close on Tuesday!  

Mark My words "Its Not Going to Happen!"

Posted on 18 September, 2015 at 18:23 Comments comments (80)
Weekly Market Assessment
By:
 
It's not going to happen! Federal Reserve raising rates is mentioned what seems like every minute. Will it happen? How will it effect the market? If they do it, it will be so incremental that it may have little to no effect on the market. Similar to the buildup to ending of QE (Quantitative Easing) everyone thought that would be the end of the bull market. However, that has come and gone and it seems like myself along with everyone else has totally forgotten about the predictions people made about how devastating it would be once the punch bowl got taken away. The reason for this constant talk is, I think, people trying to time a top in the market. This is almost impossible and the few that do, have been either calling for it for a long time or just plain luck. Do investors really think that the minute the rate hike happens that the equity market will just tank? I just don't see it that way. What further gives fuel to this rate hike fire is the fact we are at all time highs in many markets.  

Mark my words, there will not be a rate hike this year! Janet Yellen among other Federal Reserve members have openly and consistently expressed that their decision to hike rates is data dependent! Which means that inflation needs to be near their 2% mandate (it currently sits below 1%). We have been keeping the flood gates open with record level low rates for years and the trend has been moving to the downside not in the direction to the Fed's mandate of 2%. So, could we see a sudden pop in inflation during the last 6 months of the year? I highly doubt it! So for now, there is no alternative (TINA) but to invest in equities as this asset class continues to provide a return on investment. However, the fear of a rate hike has created uncertainty as to how the equity market will respond since we would be leaving a level in interest rates never before seen. It seems like a majority of investors see this rate event as a bad thing, however a raise in rates would signify a recovery from the recession and express strength in the economy has returned! Instead of looking at interest rates going up, one should look at it as a normalization of rates, which should be received as a positive not a negative catalyst! So for the rest of the year it looks like the flood gates will remain open and the flow of liquidity thru low interest rates is here to stay! The Rant: Going Off on a Tangent with My 2 Cents:Making the Watchlist: Below are the stocks that I will be looking at over the coming months.  I will provide the the current stock price and why I am watching them. I will comment on them as I continue to keep an eye on them.  You will be able to see and follow their growth and/or decline. Chart links may be attached.           See What I'm Trading:You can now view all my real-time trades by following this link, BlackPacific Capital . This new site shows my trades, in real time the minute they are bought and sold. Below you can also click on the stock symbols, trade strategy or prices which will lead you to this new site. The site offers a full risk/return profile and video detailing the strategy of the trade. Note: When looking at the option positions every contract equals 100 shares.     

From the Trading Floor to the Option Pit: A quick look at whats on the trading desk:

S&P 500 (SPX) -No Trades  

SPDR S&P 500 EFT (SPY)-Bought and sold a JUL2 212 "PUT".  

 National Bank of Greece (NBG)- This is a huge spec play in regards to Greek staying in the Eurozone or leaving it. I have bought shares in the Greek Bank thinking that they will be bailed out and more liquidity will be offered to the Greeks while also remaining the European Union.  

Oracle (ORCL)-After reporting its earnings after the close on wednesday ORCL came in below analyst estimates however listening to management discuss the quarter on the conference call they made you think different. It dropped more than 10% on the open and dipped below its 200 day average, where it has found support in previous selloffs. I purchased JUL1 $41 "CALLS". ORCL has rallied significantly off its days lows and is now back above its 200 day average!   

GoPro (GPRO)- I have bought shares in GPRO at $57.68. Its looks to have support at some major moving average and after Ambarella (which supplies the cameras) beat on its earnings gave a better insight to how GPRO was doing.  

Twitter (TWTR)- TWTR's CEO, Dick Costello, announced he was stepping down and the stock reacted positively as many have been calling for him to resign. I have again bought JUL "CALLS" at $32.  I have also purchased common shares of TWTR at 35.95

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