***Official*** 2015 Stock Market Thread

[Charmonium]

The first quarter loss is generally seen as being due to the weather - since in the northeast we had huge snow falls. That effect should have been temporary though. Both employment and, not sure but think the participation rate has also been improving.

Yellen believes that a lot of people left the work force during the recession are therefore aren't considered in the unemployment rate. So her goal is probably going to be to try to overshoot NAIRU levels and try to entice more people back into the work force. Even so, they need to show that they are prepared to raise rates as required so we will almost definitely see a small rate hike this year. Yellen has pretty much stated as much.

 

[FelixDeCat]

Negative GDP is good for the market, it means the fed might not raise rates.

We are in a stock and real estate asset bubble that higher rates will "cure" eventually. Even if we go back to the 40 year average of a 5% Fed rate that is still ABSURDLY low.

Finally, it is worth noting two consecutive quarters of declines in GDP is a technical recession. Unlikely, however.

 

[IHateMyJob2004]

I think you need to read more?

What are you not understanding? What am I failing to understand?



https://turbotax.intuit.com/tax-too...-Taxes/Capital-Gains-and-Losses/INF12052.html

I guess if you are dealing with a $5000 account, you have nothing to really understand

 

[FelixDeCat]

I guess if you are dealing with a $5000 account, you have nothing to really understand

Dont scoff at $5,000, you can do LOTS of damage with it.

I like to think in terms of percentages, the total dollar amount is not necessarily important. Take PTBI for example, its an off the wall Dallas based biotech that hasnt made money in the last 15 years. A few weeks ago it was up nearly 100% pre-market from $2 to nearly $4 on news of an investment from Soros. I was seriously tempted to buy 1000 shares for $4000 when I saw it before leaving for work (I watch CNBC every morning and buy or short hot stocks for a quick flip sometimes).

Being up 100%, I decided to pass because surely a pullback was in order. In 48 hours that junk went from $4 to $11 which would have made my $4,000 'investment' worth $11,000 in two days! PTBI is non marginable so you would have to put up all the cash to trade it.

I have so many examples like that.

ps. PTBI fell from $11 back to $7 soon afterwords, and that time I bought in. I rode it from $7 to $8 .... damn thing went back to $10. Its a nice trading stock, if you are into that.

 

[dr150]

Dont scoff at $5,000, you can do LOTS of damage with it.

I like to think in terms of percentages, the total dollar amount is not necessarily important. Take PTBI for example, its an off the wall Dallas based biotech that hasnt made money in the last 15 years. A few weeks ago it was up nearly 100% pre-market from $2 to nearly $4 on news of an investment from Soros. I was seriously tempted to buy 1000 shares for $4000 when I saw it before leaving for work (I watch CNBC every morning and buy or short hot stocks for a quick flip sometimes).

Being up 100%, I decided to pass because surely a pullback was in order. In 48 hours that junk went from $4 to $11 which would have made my $4,000 'investment' worth $11,000 in two days! PTBI is non marginable so you would have to put up all the cash to trade it.

I have so many examples like that.

ps. PTBI fell from $11 back to $7 soon afterwords, and that time I bought in. I rode it from $7 to $8 .... damn thing went back to $10. Its a nice trading stock, if you are into that.

I hope you're using Options when playing with these binary event Biotech stocks.

 

[FelixDeCat]

I hope you're using Options when playing with these binary event Biotech stocks.

There were *no* options available on PTBI prior to the June strike (created just last week) since it was a such a thinly traded and relatively unnoticed company. Now its very liquid and volatile...great for trading.

I've noticed that when options are added to stocks it loses some of its trading swings and becomes much more tame. First come the monthly options and if still keeps swinging too much, they price weeklies which usually takes all the fun out of the stock itself. Take a look at PLUG and especially GRPN as prime examples of what weekly options do to a stock.

 

[sm625]

I'm seeing a nice potential breakout pattern on AMD. Long AMD Jul 2015 2.500 call @ 8 cents.

 

[Imp]

Still waiting. Lalalalalalala... Damn you potential rate hike shock.

 

[Charmonium]

Still waiting. Lalalalalalala... Damn you potential rate hike shock.

Are you short treasuries or something similar? From what I've heard, the real issue will be when people try to exit that market. I don't understand the specifics, but it seems that the bond market isn't very liquid and when people try to pile out of that trade, you're going to have funds being forced into redemptions which means they'll have to sell at whatever price they can get.

 

[Imp]

Are you short treasuries or something similar? From what I've heard, the real issue will be when people try to exit that market. I don't understand the specifics, but it seems that the bond market isn't very liquid and when people try to pile out of that trade, you're going to have funds being forced into redemptions which means they'll have to sell at whatever price they can get.

Nope, just concerned about people freaking out just because the interest rate goes up for the first time in years. I'm not expecting a huge drop, maybe it's all priced in already, but I don't want to play until it happens.

Also, I'm already set for the year thanks to forex between CAD-US, so may as well wait.

 

[sm625]

A rate hike is definitely not fully priced in. The market rate hike timing expectations are still only around the 50% mark.

http://www.cmegroup.com/trading/interest-rates/fed-funds.html

The expectation of a rate hike does not reach 75% until september. If they were to hike this month it would devastate equities. Bonds would most likely increase in value though.

 

[dr150]

A rate hike is definitely not fully priced in. The market rate hike timing expectations are still only around the 50% mark.

http://www.cmegroup.com/trading/interest-rates/fed-funds.html

The expectation of a rate hike does not reach 75% until september. If they were to hike this month it would devastate equities. Bonds would most likely increase in value though.

The Fed will telegraph the glide path hike well in advance if it were to definitely be September. It will be data dependent on really solid economic growth numbers.

And really, we're talking such a meager piss-ant hike. The market decline to buy stocks on sale won't be to the same level as the previous taper tantrum rumor.

The market will properly price in Sept. vs Dec., which it already has done to a large degree, which is why you see huge amounts of money leaving the US and being poured into Europe, Japan and certain other emerging markets.

Actually the market wants the teet to be taken away so that the next phase of growth can carry forward, starting with huge spate of M&A activity and bank growth, which is a large component to the health of our economy.

 

[Imp]

Interdasting... About 15% of U.S. home owners may still be underwater?

http://www.bloomberg.com/news/artic...using-chart-shows-nasty-scar-years-after-bust

Fed hike should be interesting, especially for Canada's never ending housing bubble -- our stuff is more expensive despite 1/10 the population?

 

[JEDI]

bonds, reits, and utils are in the negative this year.

I understand bonds because of the upcoming rate hike , but why reits + utils?

 

[jpiniero]

bonds, reits, and utils are in the negative this year.

I understand bonds because of the upcoming rate hike , but why reits + utils?

REIT = housing prices should slow/decline once rates go up
utils = acting like bonds with their very high dividends

 

[JEDI]

REIT = housing prices should slow/decline once rates go up
utils = acting like bonds with their very high dividends

so what sector goes up when the fed hikes the rate?

 

[Imp]

so what sector goes up when the fed hikes the rate?

I am also curious... Bonds might go down in price as yields go up -- same with other fixed income. Stocks might go down cause of people borrowing to buy with low interest. That leaves guaranteed investment certificates?

 

[Hugo Drax]

I am also curious... Bonds might go down in price as yields go up -- same with other fixed income. Stocks might go down cause of people borrowing to buy with low interest. That leaves guaranteed investment certificates?

you need to learn options trading. :biggrin:

For me it does not really matter which way the markets go.

 

[brianmanahan]

so what sector goes up when the fed hikes the rate?

likely nothing

 

[FelixDeCat]

so what sector goes up when the fed hikes the rate?

When rates rise you buy banks and short reits (pair trade); buy calls on the XLF or short bonds.

 

[FelixDeCat]

Right now I've been going long / short on solars, especially CSIQ since it is so volatile. It has an absurdly low P/E of 6 but solar is not glamorous right now and questions surround Chinese solars, along with Greek drama dragging, so you have a situation of violent up and down movements which is good for trading.

 

[Charmonium]

so what sector goes up when the fed hikes the rate?

It depends why rates are going up. It can be because of strength in the economy, a tight money supply or inflation. In our case, it's economic strength.

Financials tend to benefit in a strong economy since there is more demand for money. But that's based on the spread between long and short rates. Banks borrow short and lend long. So the steeper the yield curve, the better it is for financials.

Most likely though the spread will start to shrink as the recovery hits its full stride. But the decrease in spread should be made up for by volume. Then as you start to approach a recession, the yield curve will invert so you have short or intermediate rates that are higher than long term rates.

Other things that tend to do well are consumer discretionary stocks. From investopedia.

Financials aren’t the only star performers in a rising rate environment; consumer discretionary stocks also can see a bump. Improving employment, coupled with a healthier housing market, makes consumers morel likely to splurge on purchases outside of the realm of consumer staples (food, beverages and hygiene goods). Manufacturers and sellers of kitchen appliances, cars, clothes, hotels, restaurants, movies and more benefit from the economic health dividend. Companies to keep an eye on include appliance maker Whirlpool Corp. (WHR), retailers Kohl's Corp. (KSS), Costco Wholesale Corp. (COST) and Home Depot, Inc. (HD), and travel facilitators like The Priceline Group Inc. (PCLN).


Finally, the industrials sector also benefits from the economic health dividend indicted by rising rates. Companies like Ingersoll-Rand PLC (IR) and manufacturers of heating, ventilation, and air conditioning (HVAC) systems, tend to outperform, as well as companies like PACCAR Inc. (PCAR), – a maker of heavy-duty trucks and truck parts. Such companies are among the first to benefit from any increase in housing starts.

 

[FelixDeCat]

I so WISH I could short or buy puts on AXON. That biotech stock looks like a fiasco.

 

[Kwatt]

From the press release.

"In the acquisition former Lorillard shareholders will receive $50.50 in cash and 0.2909 of a share of RAI common stock for each share of Lorillard common stock they owned."

I had Lorillard purchased for LESS than the $50.50 cash payment and now have RAI shares also.

Has anyone dealt with this before?
How does this affect my taxes next year?


.

 

[FelixDeCat]

ADXS new 52 week high, even after huge dilution announcement back on May 1, $25 a share now.

AERI investor conference next week....$11 currently, might retake $18 by year end.

CSIQ fell from $40 to $33, might fall further on possible problems in China

Update....

ADXS touched $30 and pulled back to $22, now $25

CSIQ touched $30ish and went back to $33

AERI announces after hours FDA has approved changing stage 3 endpoint. Stock rockets up 40% from 13 to 18+!