Love the coffee … Hate the stock
Love the coffee … Hate the stock
I have to admit, I love this company’s product, but I hate the market action of their stock.
The company we are discussing today is Starbucks. I am sure that if you drink coffee you’ve had one of their tasty coffee brews.
How can I love their Coffee Frappuccino Grande and hate their stock?
Well it all started in January of this year when one of our major Triangle indicators flashed a major trend change. This indicator is one we watch very carefully as it usually indicates significant moves.
On January 26th of this year our Triangle indicators issued a sell on Starbucks at 33.65. Since then the stock has evaporated down to the 27 level.
Is the downward move over? According to our triangle indicators I have to say no. I have just finished a new video that details exactly where we think this stock is headed.
Here’s the 5 minute Starbucks video
Adam Hewison
Inflation or Recession that is the question?
Whether it is nobler in the minds of … O.K. lets give Shakespeare a rest and get down to reality.
Inflation or recession, what if I told you it doesn’t matter?
In the next twelve to eighteen months there are going to be some amazing opportunities in the markets thanks to the upcoming economic climate. The opportunities I want to talk about today will only be available for those who are prepared to take advantage of a very special time in history.
DOES HISTORY RING A BELL AT THE TOP OF A MARKET?
No way! So how do you figure out when the tide has turned for the economy and we are headed towards a recession or huge inflationary pressures.
Unfortunately, you don’t receive a personal email from Fed Chairman Bernanke giving you a private warning that the market is going to hit the fan.
So how do you know, how do you prepare yourself?
Here’s how the two camps analyize the markets.
There are two camps that most traders fall into when the question of market analysis comes up. Either they are fundamentalists or they are technicians.
At this point I have to admit I am a market technician and I am proud of it.
The fundamentals are usually well known to most investors. What isn’t known is how much of the known fundaments are priced into the market. Now that’s the major dilemma facing most fundamentalists. When is it time to get out … exit the market, head for the hills?
A technician on the other hand relies on price action to determine his views. The price action of any market is the biggest single most important indicator in any market technicians toolbox.
Market action is the sum total of all the greatest money managers in the world. What could be better than that … having thousands of these great traders and investors around the world contributing to and working for you and your bottom line. Using technical analysis gives you this and a whole lot more. Is it perfect? NO, it isn’t perfect but using the right tools, filters and a disciplined approach it will consistently out perform most other market approaches.
If nothing else technical analysis can prepare you for the future with confidence. To see what I mean take a look at this video on technical analysis and our “Trade Triangle” approach.
Cheers,
Adam
P.S. Be sure to vote in our latest poll “Inflation or Recession that is the Question”
Learn how triangles can work for you
Dear Trader,
Learning how the market works can take an enormous amount of time. Trading and filtering MarketClub’s triangles is the fastest easiest way to improve your trading and bottom line.
Trade the triangle and get the most out of the market.
Cheers,
Adam
$900 Million Option Follow Up
The $900 million option on the SPY (referred to in a previous post) expires today. At first it seemed as if an anonymous trader/institution was informed or was part of a potential market shakeup. However, contributing editor, Keith Fitz-Gerald of MoneyMorning.com has shed light on the trade that had trading chat rooms buzzing.
Of course many of you know that I am not options savvy and since many of you have talked to me on the phone you know that I have never claimed to be. Although the explanation for the “Bin Laden” trades has gone over my head, I do understand that there was logical justification.
Here is an except from Fitz-Gerald’s article “The ‘$900 Million Conspiracy’ Trade That Wasn’t?”…
“But as a professional trader, I could see that it was very possible these were set up as a so-called “box-spread trade.” This is a highly specialized transaction that professional traders or sophisticated institutional investors use on occasion to “box” in the market and guarantee profits, risk or, as may be the case with this trade, financing.
Without boring you with the details, here’s what you need to know about how this type of trade works. Basically, the counterparties, in this case a buyer and a seller, agree to a trade at a price that essentially splits the difference between current interest rates or prices. The price the trade takes place at is really is a moot point.
What’s important to understand is that the seller benefits because they essentially get to borrow the money from the buyer at a slight discount to prevailing market rates, while the buyer is able to keep his money moving in what is essentially a cut-rate loan at a time when he probably can’t lend it to others at all and risks it standing still – the kiss of death for a financial firm that depends on its liquidity for daily operations.
As it turns out, that is just what it apparently has turned out to be…a box-spread trade of some type.”
-Keith Fitz-Gerald of MoneyMorning.com
The anxious butterflies in my stomach disappeared after reading this follow up article. Those of you who thought, “there has got to be a logical explanation,” well here it is. Those of you who thought, “there is something strange going on and who’s involved,” sorry (but the conspiracy theory sure is interesting to think about).
The real “Holy Grail” of trading
Dear Trader,
Here are 10 trading rules that can make you an extremely successful trader. This is the real “Holy Grail” of trading, I don’t know of any successful traders who does not use some or all of these rules in their trading.
Enjoy,
Adam Hewison
How High Will Crude Go?
How high can Crude Oil go? This month barrel prices hit an all time high… and the movement is still continuing. As investors are pondering this question and racking their brains on how long to hold their position, MarketClub members are sitting back and watching the Trade Triangles.
Adam did a video analyzing Crude (relying only on the Trade Triangle signals). This video was produced and released on September 13th. Adam shows how the Trade Triangles on the weekly and daily charts are still suggesting an positive trend… seven days later this trend is still making traders money!
Feel free to contact me with any questions. I am more than happy to help anytime!
The Big Bet! $900 Million in Options Trade?
This story is definitely something to keep an eye on this week….
or well at least until 4:00 PM (EST) Friday, September 21st.
What are you keeping an eye on? How about a $900 million bet in call options on SPY. For those unfamiliar with this particular EFT, SPY mimics the movements of the S&P 500.
This is a significant trade because it controls 120,000 shares of the Standard & Poor’s Dep. Rec. exchange traded fund (also called “Spider”).
The most surprising fact may be the “deep-in-the-money” strike ranges of 65-90. The SPY is currently (9-18-07 @ 3:10 EST) trading at 151.29. For the SPY to hit this range, we would have to have an approximate drop of 40-50%. This would suggest that the S&P 500 would take a beating and fall to an uncomfortable range before Friday the 21st.
This unusual wager that “some observers have dubbed ‘Bin Laden Trades,’” says TheStreet.com, expires Friday, September 21st at the closing bell. Leaving an uneasy feeling this week for many traders. A drop like this for the S&P would be cataclysmic and unexpected.
Of course analysts are throwing theories into the wind. Personally I find this story creepy, and I am having a hard time trying to resist the idea of conspiracy, terrorism influence, or risky insider trading… but it sure is hard not to speculate “what the heck is going on, and who knows what?” It is difficult to understand what is going on considering that this story has not been greatly publicized. However, if you look at the September 2007 expiring options chains for SPY… you can barely ignore the volume spike in the strike price range of 65-90. SPOOKY.
SPY STANDARD & POORS DEP REC 148.8700 152.5000 148.1341 152.2300 +4.1300 +2.79%
What to do? In an article “This $900 Million Bet Has Global Traders Talking,” by Keith Fitz-Gerald of Money Morning insists that traders look at the facts, be aware of this news, yet avoid the hype. “I urge you to focus on the facts that we know, which is that somebody traded some very large blocks of options at some very unusual price points a mere three weeks prior to expiration. This means that at least one-half of the traders involved expect something big to happen, and pronto, while the other half hopes that nothing will happen – and feels confident enough to believe that they’re correct,” says Fitz-Gerald.
I know that I am in the “hopes nothing will happen category.” I sure HOPE that I’m correct!
New MarketClub Video Tutorial
For Members, this video is a way to learn little tips on tool usage and navigation. I’m sure this video will provide as a great refresher course on all MarketClub has to offer and how to make our tools work for you.
For Non-Members, consider this a sneak peak and enjoy.
Remember… if you ever have any questions regarding MarketClub, INO.com, INO TV, give me a call. I am more than happy to help in anyway I can. 1-800-538-7424 ext. 112
The results are in on Jim Cramer
Our blog visitors spoke and the results are in…
24% YES
18% NO
9% What credibility?
5% Claim to not know who Jim Cramer is
Four free trading FLIX for you this weekend
Dear Trader,
What a week in the market. Dare I mention the word volatility?
Here’s something that you can enjoy at home and get some real honest to goodness value out of.
So here’s the treat.
This weekend we have four free trading videos to watch and enjoy in the comfort of your own home.
Now you can watch Larry Williams, Linda Raschke, Mark Cook and Chuck Le Beau share with you their trading ideas, their trading approach and much more.
There is about 6 hours of valuable trading information that can help your bottom line, so check it out.
Watch here.
Enjoy,
