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IB Traders' Insight

Global market commentary from IBG traders and market participants.

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2015-03-05 13:40:05

Posted by
Waverly Advisors, LLC
Technical/Quantitative Market Research
Contributor

Technical Analysis

Waverly Advisors Summary Stats

%Chg: percent change from the previous day’s close

SigmaSpike: the day’s change expressed as a standard deviation of the last 20 trading days. Values inside +/- 1.0σ are generally insignificant, +/- 2.5σ are large (for the volatility of the particularly instrument), and +/-4.0σ are very large.

C/DayRng: the current price as the pipe “|” within the day’s range. Can easily see at a glance if trading near high or low of the day. The day’s open is “:”. You can read more about this indicator in my book.

For sectors: analysis is done using the State Street Sector SPDRs (XLE, XLF, etc.) %Chg is the day’s change for the SPDR, and Excess is the Excess Return for the day (the SPDR’s return – the S&P 500 return).

 

For more information about Waverly Advisors please click here.

2015-03-05 13:38:10

Posted by
Waverly Advisors, LLC
Technical/Quantitative Market Research
Contributor

Technical Analysis

Waverly Advisors Update: Largest Advances / Declines

The individual stock tables are simply ticker lists showing the largest values for the following criteria:

SigmaSpike: Largest volatility-adjusted moves. (Note that this measure, though we might call it a “standard deviation spike”, does not assume that anything is normally distributed. You’ll see a handful of +/-4.0σ moves on many days, and +/- 10σ do happen.)

GapOpen: The stock’s opening gap, expressed as a SigmaSpike.

FromOpen: Stocks often reveal stronger trending character by their relationship to their opening print, rather than to the previous day’s close. This screen evaluates the move off the open as a SigmaSpike.
 

For more information about Waverly Advisors please click here.

2015-03-05 13:36:13

Posted by
Waverly Advisors, LLC
Technical/Quantitative Market Research
Contributor

Technical Analysis

Waverly Advisors Afternoon Update

Largest Rel Volume: Stocks with the largest multiple of their 20 day average volume. Note that the “average” value for this number will change as the trading day progresses, but the relative position of a stock within this list should show some persistence. These are likely stocks in the news, or stocks experiencing a sharp flow of new information.

Largest Rel Ranges: First, we express each stock’s daily range as a % of the 20 day average range, and then choose the 10 with the largest values of that measure. These are the stocks with the largest daily ranges, relative to their own typical daily ranges.

Gap Analysis shows stocks with open gaps (today’s high < yesterday’s low or today’s low > yesterday’s high) remaining.

Stocks with Open Gaps (for the Day): ACAD, AER, ALSN, ANF, AZN, BMRN, BUD, CCL, CENX, CL, CMS, CNQ, COG, COMM, COST, CSIQ, ECA, ENDP, FE, FLS, GLNG, HDB, INCY, JKS, JOY, KITE, KR, LINE, MAC, MBLY, MDVN, MEOH, MNK, MYL, NCLH, PEIX, RCL, SGEN, SNE, SWKS, UL, UN, UNH, WETF, WFM, WM, XEL, ZIOP

 

For more information about Waverly Advisors please click here.

2015-03-05 11:55:52

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor

Options

Stability in oil ahead?

It seems that many onlookers feel comfortable that the accentuated weakness in the price of crude oil may have ended. But one option trader appears to be positioning for prices not to budge much over the next couple of years. One investor sold the January 2017 straddle 2600 times using the United States Oil Fund (Ticker: USO), which closely tracks the price of oil futures. The trade expiring in almost two years’ time is possibly aimed at taking advantage of the decay of time value embedded in options prices, while banking on a strictly limited jaywalk in the value of the fund. With the USO trading at $19.00, the investor took in a premium of $6.70 per contract on the trade, which sets breakeven parameters on the straddle strategy of $25.70 to the upside and $12.30 to the downside. The fund touched its recent low of $16.30 on January 29 when crude oil futures closed at $45.23. Its price last traded above the current breakeven for the strategy on December 3, when crude futures settled at $69.47. The trade commands such a premium in part on account of high implied volatility, which has actually slipped on the day by 7.6% to stand at 42.9%. Volatility peaked on the USO in the days after the price of oil reached its current floor. By comparison, the same straddle combination using the January 2016 expiration is priced at around $5.00 per contract implying breakeven parameters of $14.00 and $23.00 for the oil fund.

Chart – USO and crude oil prices

2015-03-05 11:32:11

Posted by
John Carter
President
Simpler Stocks
Contributor

Stocks

Simpler Stocks: Wednesday Movers

Stocks continued to back off recent highs on Wednesday. Two days of declines does not a trend make, and employment data signaled what may be a blip: the ADP report just missed forecasts. Arguably more important data will come at the end of the week with the release of the February payroll report, which may give hints as to the eventual interest rate hike so many investors are expecting.

Stocks to Watch:

Honeywell International Inc. (Ticker: HON)

Honeywell announced Wednesday that it is seeking to grow dividends faster than earnings, and that acquisitions are at the top of its near-term strategy. The company also guided current quarter and full year expectations in line with the Street. The shares are trading at a decent 15x forward estimates, with a yield of 2% that could get a boost.

Cognizant Technology Solutions Corporation (Ticker: CTSH)

With a focus on information technology, consulting and health care/logistics and financial services, Cognizant stands to benefit from continued strength in the labor market. The shares continue to trade above both the 50- and 200-day moving averages, despite some recent volatility. Operating margins continue to be strong, with 18% logged most recently. In addition, any uptick in the 19% sales growth expected for this year should be a boon to the bottom line.

Chart – Six-month chart of CTSH

Dealertrack Technologies, Inc. (Ticker: TRAK)

Despite some volatility in the name in recent sessions, Dealertrak reported strong results late last month that showed 26% gains in revenues ex acquisitions, and this extends a long string of better than 20% top line growth. Recent acquisitions are proving a drag on near term results, as full year guidance came in under expectations. But that is due in part to financial reporting standards, and management still targets better than 20% growth near term. 

AMC Entertainment Holdings, Inc. (Ticker: AMC)

Lower prices at the pump translate into higher discretionary spending for the consumer, which in turn, some would argue, translates into a richer entertainment budget. The Street certainly looks for upside this year for AMC, as earnings estimates have the company growing the bottom line by as much as 75% on revenue upside of 9%. That in turn should temper in 2016 to 23% and 4% growth, respectively. But continued job growth, relatively low energy prices and strong demand for the movies bodes well for the stock, which also yields 2.3%. 

Maximus Inc. (Ticker: MMS)

Consensus has Maximus growing earnings by 20% in the next fiscal year (ended Sept 2016), while revenue growth should be fairly steady at 14%. That speaks to strong leverage in the government business processing segment (MMS’s bread and butter). The PEG ratio is roughly 1x, while the adjusted PE ratio is just about in line with expected growth. Free cash flow yield of 4% may hint at dividend increases.

TiVo Inc. (Ticker: TIVO)

Shares in TiVo jumped as much as 6% on Wednesday after earnings were reported, yet retreated to roughly 2% gains by session’s end. As the company transitions from core DVR services to embrace subscription services, the company posted profit of $0.07 a share, better than the four pennies the consensus had expected. Current quarter management guidance matched expectations, and cable TV should continue to be strong. TIVO shares trade for forward EPS multiples of 18x, yet the Street has fiscal year growth of 43% by comparison.

 

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.

2015-03-05 10:26:54

Posted by
Jamie Lissette
Trading Analyst
Hammerstone Group
Contributor

Stocks

The Hammerstone Report: Sector News Breakdown

Consumer

  • Costco (COST) 2Q EPS $1.35 vs. est. $1.18 (may not include tax benefits/charges); Q2 revs $27.5b vs. est. $27.6b; said Feb. total comp sales up 1% (mostly in-line), while Feb. U.S. ex-fuel comp sales up 7%
  • Roundy’s (RNDY) Q4 EPS 7c/$1.075B vs. est. 3c/$1.06B; sees FY15 EPS (18c)-(7c) on revs $4B-$4.08B vs. est. loss (9c)/$4.03B; sees FY15 SSS growth (2.75%)-(0.75%) and FY15 adjusted EBITDA $115M-$125M
  • Conn's (CONN) February sales up 4.9% YoY to $95.4M and reports February comp sales down 5.8% vs. February 2014
  • Zumiez (ZUMZ) Feb. Comp sales rose 6.9% vs. est. up 4.0%
  • Allegiant Travel (ALGT) February passenger traffic up 8.6% to 657,399 and February RPM up 5.1% to 639M; February load factor down 1.2 points to 87.2%

Energy

  • Canadian Solar (CSIQ) Q4 EPS $1.28/$956.2M vs. est. $1.34/$953.94M; said total solar module shipments were 1,125 MW; sees Q1 revenue $725M-$775M vs. est. $733.9M
  • Exxon Mobil (XOM) downgraded to Hold from Buy at Evercore ISI
  • Golar LNG (GLNG) and Rosneft Oil Company have entered into a Memorandum of Understanding that foresees cooperation between the companies in the area of floating liquefaction and transportation of natural gas
  • EnCana (ECA) announces C$1.25B bought deal offering
  • Vivint Solar (VSLR) sees Q1 revenue $8.0M-$8.5M vs. est. $8.73M; sees Q1 total operating expenses $47M-$50M
  • Pacific Ethanol (PEIX) Q4 EPS 41c/$256.2m vs. est. 16c/$246.7m
  • Jones Energy (JONE) Q4 EPS 20c/$75.6M vs. est. 15c/$91.09M
  • The U.S. Senate failed to override President Barack Obama's veto of legislation approving the Keystone XL oil pipeline, leaving the controversial project to await an administration decision on whether to permit or deny it. The Senate mustered just 62 votes in favor of overriding the veto, short of the two-thirds needed.

Financials

  • Simon Property Group Inc. (SPG) has made takeover approaches for rival Macerich Co. (MAC), seeking to combine two of the largest shopping-mall owners in the U.S. The latest approach came within the past few weeks, and followed an earlier one late last year http://goo.gl/ZJhW61
  • H&R Block (HRB) Q3 eps loss (13c)/$509M vs. est. 17c/$518M; said revs rose $309m primarily as a result of earlier opening of IRS e-file system this tax season; said total U.S. tax returns prepared by and through H&R Block declined 4.2% y/y as of Feb. 28
  • IBERIABANK (IBKC) files automatic mixed securities shelf
  • Apollo Commercial (ARI) files to sell 10M shares of common stock
  • Eagle Bancorp (EGBN) 2.449M share Secondary priced at $35.50

Healthcare

  • AbbVie Inc. (ABBV) is to buy Pharmacyclics Inc. (PCYC) for about $21B, paying $261.25 per share in cash and stock, about a 13% premium to PCYC closing price; (note the Financial Times late yesterday reported PCYC would be acquired by JNJ) http://goo.gl/2pA2cs
  • Achillion (ACHN) Q4 eps loss (21c) vs. est. (18c); sees 2015 loss (95c) vs. est. loss (72c); sees 2015 net cash used in operating activities $100m-$110m
  • Summit Therapeutics (SMMT) 3.45M share IPO priced at $9.90
  • Cross Country (CCRN) Q4 revs 3c/$188.1M vs. est. 4c/$191M; sees Q1 revs $185-$190m vs. est $186m
  • Horizon Pharma (HZNP) plans offering of $300M of exchangeable Senior Notes

Industrials & Materials

  • Joy Global (JOY) Q1 EPS 25c/$704M vs. est. 36c/$753.75M; lowers FY15 EPS view to $2.50-$3.00 from $3.10-$3.50 (est. $3.20) and lowers FY15 revenue view to $3.3B-$3.6B from $3.6B-$3.8B (est. $3.65B)
  • Tyco (TYC) raises quarterly dividend to 20.5c from 18c
  • General Dynamics (GD) boosts quarterly dividend to 69c from 62c
  • Embraer (ERJ) Q4 EPS 50c/$2.04B vs. est. 91c/$2.14B; Expected deliveries of 95-100 jets in the Commercial Aviation segment and 35-40 large jets and 80-90 light jets in the Executive Jets segment

Media & Telecom

  • NeuStar (NSR) said the FCC recommendation “misunderstands” operating system and would disrupt service for 12m consumers. NSR will review its options and continue to question process
  • Late Wednesday, Time Warner’s (TWX) HBO is in talks with Apple Inc. (AAPL) to be its launch partner for the highly anticipated HBO Now video streaming service, according to a report in Wednesday's International Business Times
  • Alaska Communications (ALSK) sees 2015 run rate adj. Ebitda at end of 2015 $54m-$56m; said Q4 revs $53.5m

Technology

  • Apple Inc. (AAPL) will delay the start of production on a larger, 12.9-inch iPad until around September because of problems involving the display panel supply, said a report by Bloomberg News citing people familiar with the company's plans as saying
  • Etsy Inc., an online marketplace for crafts and vintage goods, has filed for an initial public offering, according to a regulatory filing. Etsy, which applied on Nasdaq under symbol “ETSY” filed for an IPO of up to $100 million
  • Semtech (SMTC) Q4 EPS 34c/$130.4M vs. est. 33c/$130.11M; sees Q1 adjusted EPS 27c-30c on revs $130M-$136M vs. est. 37c/$136.40M
  • Callidus Software (CALD) 4.6M share secondary priced at $13.00 per share
  • GSI Group (GSIG) Q4 EPS 24c/$94M vs. est. 19c/$95.02M; sees FY15 revenue $380M vs. est. $392.64M (says includes for-ex headwinds)
  • Interdigital (IDCC) plans to sell $275M worth of senior convertible notes due 2020

 

The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit www.thehammerstone.com. For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at brian@thehammerstone.com.

 

This article is from The Hammerstone Group and is being posted with The Hammerstone Group’s permission. The views expressed in this article are solely those of the author and/or The Hammerstone Group 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.

2015-03-05 09:55:36

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor

Forex

Euro weakens on bond buying details

The single European currency unit continues its slide on Thursday following further details on the ECB’s bond-buying plan. Asset purchases of €60bn ($66bn) per month will start next week offering support to the region’s economy and continue until there is a “sustained adjustment in the path of inflation”. The euro fell to buy only $1.1007 against the US unit, suffering the same punishment from investors as did the greenback during the FOMC’s delivery of QE. The dollar has strengthened since May 2014 when one euro bought $1.4000. The four months from May to September 2014 the euro weakened by 10-cents. For the final quarter of that year, further euro selling shaved another dime off its purchasing power, sending it down to $1.2000. It has taken from January through the first week of March of this year to steal back the next 10-cents as details of the plan are unveiled. Make no mistake, a weaker euro is benefitting the Eurozone as evidenced by strengthening economic data. And let’s not delude ourselves that the program is likely to be long-lasting until inflation ticks up towards 2%. So what are the chances of the euro/dollar relationship falling to parity? According to the options market the odds of the euro falling through $1.00 by June are just 5.5%, while a decline of the same magnitude playing out by September has a 10.6% likelihood. The odds seem slight considering Newton’s first law of physics.

Chart –Sliding euro

2015-03-05 09:29:41

Posted by
Jamie Lissette
Trading Analyst
Hammerstone Group
Contributor

Stocks

The Hammerstone Report

U.S. equity futures are slightly higher following the ECB meeting results and ahead of Fed bank stress tests later today. Overnight, one big M&A deal in the Healthcare space, as Abbvie (ABBV) agreed to buy Pharmacyclics (PCYC) in a $21B deal, while retailer Costco (COST) reported stronger quarterly results, and mining company Joy Global (JOY) warned for the year. U.S. stocks ended lower for a second consecutive session on Wednesday, with the S&P 500 Index dropping to its lowest level in two weeks. Profit taking took place ahead of the closely watched official jobs report Friday and the ECB meeting (Thursday morning). Data Wednesday was mixed as private-sector employment data showed continued gains in February but at a slower pace than in the prior month, while service data came in above expectations.

Note the euro weakened further, falling to a fresh 11-year low (1.1048) ahead of today’s ECB meeting and announcement of details of its debt-purchase program (QE) – British pound was also lower ahead of the BoE meeting. European stocks rise for a 2nd day, led by Germany (DAX up 0.5%). Asian stocks fell as China set the lowest economic growth target in more than 15 years (to 7%), though Japanese shares gained. The Nikkei Index gained 48 points to 18,751, the Shanghai Index dropped 31 points (about 1%) to 3,248, and the Hang Seng Index fell 272 points (1.11%) to settle at 24,193.

After the bell today, results of the Fed’s Dodd-Frank stress test of 31 banks will be released, showing minimum capital ratios under baseline, adverse and severely adverse scenarios.

World News

  • China lowered its economic growth forecast to about 7% this year at the opening of the country’s biggest political event of the year. Last year’s goal was “about 7.5%”; when actual growth came in at 7.4%--the slowest in more than two decades
  • German factory orders fell in January, declining (3.9%) after a revised increase of 4.4% in December
  • Bulls in American Association of Individual Investors (AAII) survey slip to 39.8% from 45.4% (was at 7-week high 47.0% in prior week: those bearish rise to 23.4% from 20.3% and those considering themselves neutral rise to 36.8% from 34.3%
  • China plans to invest a total of 1.6 trillion yuan ($255 billion) in railway and water projects this year, Premier Li Keqiang said Thursday

 

The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit www.thehammerstone.com. For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at brian@thehammerstone.com.

 

This article is from The Hammerstone Group and is being posted with The Hammerstone Group’s permission. The views expressed in this article are solely those of the author and/or The Hammerstone Group 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.

2015-03-05 04:33:17

Posted by
Stephen Alley
IB Asia Trade Desk
Contributor

Stocks

Nikkei trades higher as pharmaceutical stocks outperform

SGX Nikkei futures opened +50 at 18,705 after yesterday's 170-point Nikkei drop and with US stocks bouncing off their intra-day lows overnight. The Yen was almost unchanged overnight with USD.JPY trading at 119.7. Nikkei futures briefly dropped to a day-low of 18,650 early in the morning session, but recovered over the day to close near the day-highs. OSE Nikkei futures settled +110 at 18,760 (+0.6%). At the close, the Yen had weakened 0.2% with USD.JPY trading at 119.9.

Pharmaceutical stocks were among the Nikkei's top performers. Eisai (4523) closed +7.2% after it announced that it would collaborate with Merck to hold Phase 1 trials for combined cancer regimens using the two companies' anti-cancer drugs. Takeda (4502) also closed +2.0%, while DaiIchi Sankyo (4568) closed +2.4%.

2015-03-05 01:50:20

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor

Technical Analysis

WTI Crude (CL) Continues Rallying on Bearish Inventories

CL sold off initially yesterday on the much higher than expected inventory figures, and like last week, rebounded off of bearish figures, surging to 52.  CL is now in the middle of a sideways channel (on the daily chart) and significantly, breaking above a downchannel resistance line (on the weekly chart).  Weekly, daily and 4hr RSI, Stochastics and MACD are mostly rallying.

 

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.

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The material (including articles and commentary) provided on IB Traders' Insight is offered for informational purposes only. The posted material is NOT a recommendation by Interactive Brokers (IB) that you or your clients should contract for the services of or invest with any of the independent advisors or hedge funds or others who may post on IB Traders' Insight or invest with any advisors or hedge funds. The advisors, hedge funds and other analysts who may post on IB Traders' Insight are independent of IB and IB does not make any representations or warranties concerning the past or future performance of these advisors, hedge funds and others or the accuracy of the information they provide. Interactive Brokers does not conduct a "suitability review" to make sure the trading of any advisor or hedge fund or other party is suitable for you.

Securities or other financial instruments mentioned in the material posted are not suitable for all investors. The material posted does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before making any investment or trade, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. Past performance is no guarantee of future results.

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