Yesterday Investors411 readers made almost 200% in one trade.
Find out more in the STOCK section below
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JOBS
Small Business
The engine of American Growth
The Good Guys
Posting – A $1,000 reward if YOU find someone to fill this job position in a small (50+ people) company in the Boston area.
Overdrive Interactive is offering this reward for a World Class Web Designer. In fact, this growing business has taken on some new clients is looking for talent to fill a dozen new positions
Perhaps a major reason Massachusetts has a 7.3% unemployment rate vs. 9.0% for the rest of the USA is because we value education [Boston is a college town] – entrepreneurs and small businesses abound.
- Know a Outstanding Web designer?
- Want $1000 bucks.
Send me an email – You’ll find my email address on the bottom of the HELP/EDITOR Section listed on the top bar. I do have an inside connection at this company – An intern their created this blog and my son is the CEO and principle partner.
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Wall St./Major Corporations
How Wall St. rewards Job Loss
The Bad Guys
Cisco is your typical big tech company. CSCO two days ago announced earnings. Nothing special happened to the stock after the initial announcement. But after the reorganization plan was detailed the stock started to climb and ended up +5.58% higher.
A major corporation announces reorganization – JOB CUTS - and wall street rewards them with a solid move higher. But,
if you’re an American job seeker you just got shafted.
This pattern repeats itself ad nauseum for major US corporations.
CSCO is just doing what everyone else does. Often those jobs quiety get replaced overseas.
- This is one reason the Occupy Wall Street protestors get so mad and frustrated at Wall Street.
- This is one reason why many of you get so frustrated at Republicans – Example, they block Obama’s small business tax breaks jobs bills paid for by the elite wealthy class.
You certainly don’t begrudge small time investors for making a few bucks off CSCO.
But, we must find a way for the Millionaires, Billionaires, Hedge Funds, Shadow Banks, HFT’s who profit from the CSCO trade and other like it to contribute.
They are raking in huge gains by rewarding major corporations for cutting jobs. Some of their profits must be put back into small business, Without this, the American economy will disintergate.
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Social Media
Think Social Media is important in an election? Every year companies devote a significant growing amount of their budgets to social media adds. Here’s a link from my favorite small business on Social Media and the Presidential Candidates.
Also check out the top social media hits for 18 other categories.
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STOCKS
YOU made almost 200% gains
Our Feature Today – GMCR
But First Equities. US Stocks clawed back a small part of the meltdown two days ago and European stocks are up [DAX +2% as of 8:31 AM EST this morning.
Problem yesterday was the mother of all companies APPL was down 2.55%
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Reading The Tea Leaves
Our #1 technical forecasting tool, the McCellan Oscillator rose to +6.88. 50DMA at +21.23. = NEUTRAL
No real technical advantage for bears or bulls.
Europe dictates the open = up, but a second down day for AAPL would be a warning sign.
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Analysis of the GMCR
Put/Call Hedge Trade
Part Luck/Part Homework
This was an event driven (earnings report) Put/Call Hedge trade. Investor411 readers (see comments section of blog and blog post from two days ago) bought bot Puts and Calls on GMCR before the earnings report.
They spent/risked a limited and finite amount of $ on purchasing the put & call, and achieved almost a 200% gain per contract when the stock fell -38.99% (yesterday's close) after its earnings report.
Reasoning behind trade.
- Hedging close to the earnings report greatly diminished the impact of outside events on the stock/trade
- Past earnings reports had a major impact on GMCR - created big price swings
- A major hedge fund had challenged GMCR's business model creating huge volume and volatility in GMCR
The homework part of this trade is recognizing the three circumstances listed above. It didn't matter which side won. We were covered both ways.
FYI - I monitored three similar trades this quarter GOOG, AMZN & BIDU. Two of the three made decent $ (BUDU) lost. None of these trade had the added bonus of major controversy surrounding the stock.
Working together - we should be able to find some similar situations.
Kudos to Critc for taking the lead. Paul & HGSI are capable of quicky identifying high growth stocks that have moved significantly in past earnings reports. We can all discuss "special circumstances" that might cause a bigger than expected swing over an earning report.
End results - more winning trades, but don't expect another 200% on the next one.
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Positions
Hopefully Longer term positions.
SPY - Closed yesterday - Gains +2%
GLD - DGP is the more risky double long gold ETF. 1/2 position added at 173.85. Will add more on 2/3+% dip.
FXI - [China] Added at 38.12. Sold 1/2 at open (see yesterday’s blog) for 37.33 Loss -2% Stop/sell order at 36.25
USO (2x oil prices ETF UCO riskier) This would be a replacement for SPY. Bought 1/2 position yesterday on dip near open at 37.35. Will add more on dip of 2/3%
Right now these longer term positions involve more risk than I would like. GLD is the exception.
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Longer Term Outlook
3+ months
Cautiously Bullish will remain in effect as long as benchmark S&P 500 stays above 1225
CAUTIOUSLY BULLISH
Investors411 has 5 different valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.
Everything written in BROWN is a repeat from a previous day(s)
AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING
ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE
CHECK ALL DATA, I MAKE MORE THAN GRAMER ERRORS.
