Weekly Charts Updated

We are going to continue making Thursday our chart section in only Superstock Investor. That said, we are changing the format. Each Thursday in Wall Street Rebel we have moved to doing a Chart of The Week.

If you want to follow the S&P 500, then you will need to sign up for www.superstockinvestor.com at the website when subscriptions become available. Each week in Superstock we track the S&P 500, NASDAQ Composite, Russell 2000, Emerging Markets (EEM), 20 Year Treasury (TLT), U.S. Dollar (UUP), High Yield Bonds (HYG) and Corporate Bonds (LQD). 

 Last week we looked at the TLT which is mired in a nasty downtrend. There appears to be more trouble ahead as it has fallen week over week. 

1

 This week we look at gold via GLD which is struggling but could turn up sooner than later. We will continue to watch this closely. 

2

 

Chubb (CB)

What was Chubb (CB) worth? Wednesday saw Ace Limited (ACE) bid for the company. Did they overpay? The deal is complicated as a combination of cash and ACE share. The bottomline is CB shareholders will get about $122 a share. The stock jumped from $95 to $119. Our upper bound is $127. Which means that ACE is paying full price for this deal.

cb

Portfolio Update

The S&P 500 is lower than a week ago thanks to Greece and now is below 2100. The Nasdaq Composite has moved below 5000 and the Dow has broke below 18000 and is now lower again for the year. The portfolio remains 50% invested long, 0% short and 50% in cash, net long 50% with profits taken eBay (EBAY)of 11.92% in April. We are now at a value of 994.16% from 1010.20% through Tuesday’s close. We finished the year at a value of 951.10 up 29.86% for the year. Our current value is 994.16% which puts us up 4.33% for the year without dividends.

Below are the year by year results on a cumulative and absolute basis: 

ssi ytd

It appears for now that 2050 on the S&P 500 has become support from 2100 and now is resistance. We are now at 2063.11 which is lower than a week ago. A big test for the week is to see if the S&P 500 can stay above 2050. So far so good.

Remember these returns are total returns with the average change for all winners and losers is 8.94% per idea. Our batting average of closed winners and losers is 71%. The portfolio is up to a value of 994.16% and from inception when it began at 0% in April of 2008. The performance on the Uncommon Wisdom Daily Portfolio Tracker was a bit higher due to dividends which they added in. We have never added in dividends so our weekly results are understated since 2008.

The Russell 2000 is beating the S&P 500 on a daily basis.

Alcoa (AA)

Alcoa (AA) will kick off earnings season next Wednesday. Estimates are $0.23 versus $0.18. Decent growth with revenues of $5.821 billion. The stock has been cut from $17.50 last Novemnber to its current price of $11.15 and it is still overvalued. Avoid for now.

aa

SSI Options Activity

We highlight unusual options activity where volume is heavy as well. The third column from the left will highlight such outliers. Banco Popular (BPOP)saw excess call action as call owners tried to salvage losses as the stock plummets.  Assured Guaranty (AGO) saw excess put action as gets hit on a potential default in Puerto Rico.

                                                     [Image 1]

                                                     [Image 2]

                     The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volume

Schnitzer Steel (SCHN)

Schnitzer Steel (SCHN) will report earnings before the open on Tuesday morning. Estimates are for a loss of $-0.08 versus $0.16. The stock bottomed in April as buyers emerged bidding the stock higher by $4. Despite this move. there is considerable upside.

schn

SSI Options Activity

We highlight unusual options activity where volume is heavy as well. The third column from the left will highlight such outliers. QIHU (QIHU) saw excess call action as it tries to hold $65. Is management still going to pay $77 for the company. JC Penney (JCP) saw excess put action as moves back towards the May highs.

                                                     [Image 1]

                                                     [Image 2]

                     The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volume

The Week Ahead

1.Geopolitical and Fiscal Events. Monday sees the leaders of the European Union and China meet in Brussels. Also, on Monday the United Nations Security Council meets on Syria. Tuesday sees Greece bailout package expiring and Iran faces a deadline over its nuclear program. Tuesday also sees Brazilian President Dilma Rousseff meet with President Obama in Washington. Last on Tuesday Federal Reserve St. Louis President Bullard speaks at night.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and Chicago PMI, consumer confidence, construction spending, ISM manufacturing, nonfarm payrolls, unemployment rate and factory orders.

3.Earnings Releases. Notable releases include ANFI APOL CAG SCHN AYI GIS STZ ISCA

The Madison Letter: Weekly Update

Since inception, our overall timing return is 80.75% versus 47.96% on the S&P 500 for excess return of 32.78%.

Madison scores on the major indexes are in a wide range from -5 to +9. Stocks and indexes had moved higher in the past week but gave up the ghost the past two days.

The range between the buy and sell points is now below average. As an example, the S&P 500 range was 54 points at the low and is now at 56 which is falling. As volatility rises, this expands. Witness at the October low the range was 169 points. Currently, volatility has collapsed despite what you might read in the press.

Also, in tracking the range between the 2 year and 10 year moves from 170 basis points to 172. Short term rates are on the rise while long term have fallen in the last week. This needs to be watched. There are implications.

We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginning of April of 2007. There are now 24 open and closed winning trades to 8 closed losing trades with our market timing results. This column replaces the Morning Matters on Fridays.

Zoetis (ZTS)

Rumors surfaced today that Zoetis (ZTS) might be bid for by Valeant (VRX). So the scorecard becomes useful. We have an uncanny ability to get close to the offer price with our upper bound. Unfortunately, this company is fully priced and I doubt that Valeant pays much more than $55.

zts