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IB Traders' Insight

Global market commentary from IBG traders and market participants.

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2015-03-03 01:39:37

Posted by
Darren Deacon
Australian Trade Desk
Contributor

Macro

Reserve Bank of Australia leaves interest rates unchanged

Clearly there were high expectations of an interest rate cut built into today’s pricing despite last month’s cut to record low 2.25% rates by the RBA (Reserve Bank of Australia).  The RBA announced unchanged rates and the AUD.USD rose from 0.777 to 0.782.  The equities market fell equally sharply, March SPI 200 futures falling from 5945 to a 5883 low in just over 10 minutes.  The banks saw the largest moves in the stock market falling from early gains quickly, heavyweight Commonwealth Bank (CBA) falling from around $93 to $91.50 with similar brevity.  Forward pricing in the money markets clearly point to another cut soon and RBA commentary certainly did nothing to dispel that.

2015-03-03 00:10:50

Posted by
Elaine Chen
Sales Trader
International Business Division
Guosen Securities
Contributor

Macro

GUOSEN Closing Bell (Mar.02)

NEWS

*China (Taiyuan) Coal Trading Center announced on 2 March that Taiyuan Coal Trading Composite Price Index closed at 81.32 pts, staying flat against the previous period. Coal prices featuring place of origin stayed steady after the decline in six consecutive weeks. Analysts said that most of the coal firms are not yet opened, leading to stabilized coal price.  (AAstocks)

*At present, 739 listed companies on SME Board and ChiNext Board have unveiled annual results or preliminary results for the year of 2014. According to statistics, both boards saw a significant improvement in results performance in 2014, with an overall net profit growth rate increasing by 9.19 ppts and 11.26 ppts respectively. (AAstocks)

*The Chinese economy is expected to grow 7 percent in the first quarter of 2015, according to an estimate released by the State Information Center, a government think tank, on Monday. A steady slowdown is expected for the Chinese economy, with investment growth in the property and manufacturing sectors continuing to slow. (AAstocks)

*According to the latest statistics unveiled by China Iron and Steel Association (CISA), as at the end of mid February, key steel companies' inventory amounted to 16.4667 million tons, up by 1.5495 million tons when compared to the last 10-day period, or a growth of 10.4%. The inventory at key steel companies have gained for five months, hitting a new high in nearly 11 month, which showed the continued rise of destocking pressure of these companies. (AAstocks)

*Industrial insiders believed that 250,000 new energy cars would be promoted this year, bringing continuous support to enterprises relating to lithium battery, lithium equipment and electric motor. (AAstocks)

*E- Yaogu, Kangmei Pharmaceutical(600518.SH)'s Chinese medicine trading platform has seen a drastically increase in transactions since the beginning of 2015, with a daily turnover over RMB1 billion. According to the terminal in DZH Big Data, the company's stock price has soared over 40% since February. (AAstocks)

MARKET

Chinese stocks closed higher today, with the benchmark Shanghai Composite Index ended at 3336.28 points. The market responded mildly with interest rate cut, the deflation risk still worried the market. On the other hand, environmental and energy sectors over performed due to a popular air pollution related documentary released on internet. Computer and energy sectors led the gains; none sector fell. Combined turnover for both markets was 797.7 bn yuan, up 33.4% dod.

 

CLOSE

%CHG

VOL (bn yuan)

%YTD

SH Composite

3336.28

0.78

410.2

+3.14

SZ Component

11884.02

1.07

387.5

+7.89

CSI300

3601.27

0.80

325.1

+1.91

ChiNext

1986.99

3.06

85.1

+35.01

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Computer

000066

Energy

000720

Downward-leading

 

 

 

 

 

FUND FLOW

This article is from Guosen Securities Co., Ltd. and is being posted with Guosen Securities Co., Ltd.’s permission. The views expressed in this article are solely those of the author and/or Guosen Securities Co., Ltd. and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-03 00:10:34

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor

Technical Analysis

A50 (CN) Rejected at Downchannel Resistance on Weekly and Daily Chart

CN has hit downchannel resistance (on the weekly and daily chart), and upchannel resistance (on the 4hr chart).  Daily and 4hr RSI, Stochastics and MACD are all turning down and suggest bearish action today.  Initial upchannel support (where CN currently sits on the 4hr chart) could be expected.

 

A50 (SGX CN Mar15) Weekly/Daily/4hr/Hourly

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-03 00:10:29

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor

Technical Analysis

AUDUSD Trying to Form Higher Low on Daily Chart

The AUDUSD is still in a downchannel (on the weekly chart) but is trying to form a higher low (on the daily chart).  On the 4hr chart, the AUDUSD appears to be on the verge of breaking a 3 day downtrend resistance line and is bouncing off of the rising support line.  Weekly, daily and 4hr RSI, Stochastics and MACD are mostly beginning to perk up again after recent consolidation.

AUDUSD Weekly/Daily/4hr/Hourly

 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-03 00:10:23

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor

Technical Analysis

WTI Crude (CL) Green Weekly Doji Forming

CL broke above downchannel resistance (on the 4hr chart) yesterday, and briefly touched 51 before selling off back to just under 49.5 and converging again towards 50.  A green weekly Doji is currently forming, with weekly and 4hr RSI, Stochastics and MACD making higher lows, and the weekly MACD on the verge of a positive crossover.  The daily RSI and Stochastics are beginning to tilt up again, with the daily MACD negative crossover remaining shallow for now.

 

WTI Crude (CME CL Apr15) Weekly/Daily/4hr/Hourly

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and equity CFD markets can be traded consistently profitably. Tradable Patterns’ daily newsletter (blog) provides technical analysis on a subset of ten to twelve CME/ICE/Eurex futures (commodities, equity indices, interest rates), spot FX and US equity markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-02 15:15:17

Posted by
IB Securities Lending Desk
Contributor

Securities Lending

Cost to borrow elevated on Biocept

Cancer diagnostics company Biocept, Inc. (Ticker: BIOC) has received a fair amount of attention in the securities lending space recently. As with similarly sized biotech companies (Biocept currently touts a market-cap of approximately $45mm), the limited amount of borrowable stock can create surges in borrow costs. Last week’s rally in the price of BIOC shares created one of those surges, as the number of interested short sellers surpassed the amount of available supply. The stock last week jumped more than 230% by midweek, opening Monday morning at $1.45 and spiking to $4.91 on Wednesday before backing off to end the week up roughly 114% at $3.10 a share. Prior to last week, the cost to borrow BIOC had remained fairly stable, but more recently the stock has been trading with more expensive borrow rates. There remains pockets of shortable supply, however the rate continues to be elevated. Shares in BIOC are up roughly 17% in the final hour of trading on Monday afternoon.

Chart – Three-month chart of Biocept

Table - The following table shows the hardest to borrow securities per sector during the week of 02/23/15 - 02/27/15.

2015-03-02 14:56:51

Posted by
John Carter
President
Simpler Stocks
Contributor

Stocks

Simpler Stocks: Friday Movers

Despite broad declines in equities on Friday, stocks capped the month with overall gains. February showed gains of 6% for the month. But for the day, US economic data led the action, as economic growth slowed more than had been estimated. 

SunEdison, Inc. (Ticker: SUNE)

Solar continues to shine. Fresh on the heels of the news that SUNE and FSLR would be developing a yieldco, SUNE said that it expects to see its installations double this year. SUNE also said it will be selling some of its developments – and the US market remains strong. The company also unveiled a renewable energy generator and said it looks to provide electricity to 20 million people (including those in remote areas) by 2020.     

3D Systems Corp. (Ticker: DDD)

Though much ink has been spilled predicting the slowdown in 3-D printing, DDD’s results earlier this week came in a bit short. Yet the company signaled its “investment phase” is lifting, which should help boost margins. Indeed that is reflected in estimates going forward, which look for 30% growth – and more – for both the top and bottom lines in 2015.   

Ross Stores Inc. (Ticker: ROST)

Ross Stores saw a nice 6% pop at the end of the prior trading week as apparel proves resilient and the company topped estimates, with the retailer posting $1.20 in net income per share, nine cents above Street expectations. Revenues were up nearly 11%. More important was guidance, which at a range of $4.60 to $4.80 a share, handily topped the $4.33 consensus. Dividend hikes, such as the most recent one boosting the payout by 18%, don’t exactly hurt either.  

Cyberonics Inc. (Ticker: CYBX)

This medical device maker, focused on treating epilepsy and depression via implantable technology, hit record highs last week after stating it would merge with Italy’s Sorin – and after the company reported earnings that topped the Street by two pennies. The combined company will have more international presence, of course, and the merged company will begin operations within the next two quarters. The new entity will offer one share for every one share of CYBX owned. Even with the recent 25% pop in the stock, the beta lies below 1x, and the stock is comfortably above the 50- and 200-day moving averages.   

Seadrill Ltd. (Ticker: SDRL)

Seadrill results posted Friday morning beat estimates handily, with earnings from continuing operations of $0.78 a share besting the Street’s $0.60 expectation. Post earnings, shares crossed the 50-day moving average and that may give the stock some support. The 34% dividend yield may belie real skepticism over sustainability. But other valuation metrics, such as 4x forward estimates and 0.6x book value multiple, seem attractive.              

La Quinta Holdings Inc. (Ticker: LQ)

The motel operator released results last week that showed profit of $0.08 a share, besting the Street estimate by three cents. Revenue per available room propelled the company to a revenue beat, and was up 8% year-over-year, tied in part to pricing increases. The stock trades at a forward PE of 27x for the year ahead, but estimates have that growth rate at 40%.

 

About the author: John Carter has been a full time trader for 15 years, serving over 100,000 subscribers in over 100 countries.  For more analysis on high growth stocks visit www.SimplerStocks.com.

 

This article is from Simpler Stocks and is being posted with Simpler Stocks’ permission. The views expressed in this article are solely those of the author and/or Simpler Stocks and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-02 14:07:03

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor

Options

Option activity in Lumber Liquidators

Bulls sitting long of stock in Lumber Liquidators (Ticker: LL) must feel like they were whacked in the head Monday with a two-by-four. The double-digit-dollar decline in the value of its shares has wiped more than 20% off the value of the company in the wake of Sunday’s 60 Minutes documentary alleging the US retailer of hardwood flooring had installed Chinese-made laminate flooring containing formaldehyde at unacceptably high levels. The chemical has been known to cause cancer. Option activity on LL is concentrated in the front March contract, which has attracted about three-quarters of the overall 31,000-contract volume. With the stock sliding to below $41.00, the lowest strike attracting bearish activity is the $35.0 strike put where volume of 8,600 lots dwarfs open interest of about 1,000 lots. However, the May contract attracted more bearish plays where volume is rising above 700-lots at the 25.0 strike. Why is there a lack of action in the name beyond the March expiration? Well, perhaps investors are expecting a swift conclusion to the allegation, ahead of which implied volatility has surged to 100% (+48% on the day). The impact of elevated fear on options premiums is evident when you look at straddle prices at the 40.0 strike over time. The combined cost of call and put expiring in March of $7.40 implies the range for the share price at expiration of $32.60 to $47.40. For the April contract the implied range spans $29.40 to $50.60. And for the May contract the range is even wider, from $27.40 to $52.60. The defensive nature of option traders driving up implied volatility when crisis strikes is apparently sufficient to deter further downside speculation at this point.

Chart – Serious allegations at Lumber Liquidators caused options implied volatility to surge

2015-03-02 13:59:03

Posted by
IB Securities Lending Desk
Contributor

Securities Lending

SLB Update: Largest Short Value Per Sector

The following table shows the top five securities with the largest short value per sector held by IB customers on 02/26/15.

2015-03-02 13:56:19

Posted by
IB Securities Lending Desk
Contributor

Securities Lending

SLB Update: Largest Short Value

These 15 securities had the largest short value held by IB customers on 02/26/15.

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