Merger Monday

It’s Monday and that must mean it is Merger Monday. Dollar Tree (DLTR) is buying rival Family Dollar (FDO) for $74.50 which is a 23% premium to Friday’s close.

Merger Monday

 

The Week Ahead

The Dow Jones Industrial Average was lower for the past week while the S&P 100 and the NASDAQ 100 were higher.

1.Geopolitical and Fiscal Events Wednesday sees the FOMC conclude its latest meeting. 2.Economic Releases. Releases of note this week other than the weekly chain store sales, oil/gas numbers, mortgage applications and jobless claims include consumer confidence, Q1 GDP, ADP Payroll, Chicago PMI, Challenger, Gray & Christmas, employment data, construction spending and ISM Manufacturing Survey.

3.Earnings Releases. Notable releases include (in order of day’s reporting with Monday first and Friday last) CMI GGP PFE MRK SU MET XOM BUD CVX BUD among others companies as we continue Q1 earnings. See the earnings section.

 

Index ETF Options Volume

Index ETF Options Volume

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. SPY had unusual volume and excess put action. Volume was very light for such a volatile day.

[Image 1]

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 Volumed

The Madison Letter Current Update

Since inception, our overall timing return is 70.92% versus 39.92% on the S&P 500 for excess return of 31.00%.

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 22 open and closed winning trades to 8 closed losing trades with our market timing results. We closed longs on OIH FXI EEM and IYR for gains two weeks ago. We will be left with one long position TRF. We expected to see new ideas this past week but our model anticipated recent weakness and we remain on the sidelines.

madison market timing

Must See TV

Yesterday afternoon at 5:00 p.m. EDT CNBC aired a pre-recorded interview between President Obama and CNBC Reporter Steve Leisman. It is worth watching. The potential for tax reform is there. Tax inversions are the reason. Make sure to watch and become an informed citizen.

Obama Interview

 

Index ETF Options Volume

Index ETF Options Volume

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. No stocks had unusual volume and excess put or call action. Volume is very light for such a volatile day.

[Image 1]

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 Volumed

Europe Gains On Strong Economic Data

Euro Zone Purchasing Managers’ Indexes (PMI)were stronger than expected as the third quarter begins.

Euro Zone PMIs

 

Weekly Charts Updated

Each week we highlight charts below of the SP500, Russell 2000, NASDAQ Composite, UUP, EEM, TLT, HYG and CFT. The charts use the 50 day moving average slope indicator. When it is green we like the instrument we are tracking and when it is red we avoid the name/sector/asset class.

U.S. Equity indexes are all positive now. The U.S. Dollar has turned positive and bond funds are positive. EEM which is emerging markets is above 0. However, bond funds just clicked into the red for HYG. We are replacing CFT with LQD. Remember what matters is the slope of the 50 day moving average not the 50 day moving average itself.

All charts are created from www.erlangerchartroom.com and if interested in using this indicator in Chart Room please feel free to send us an email by using the Contact Us section from the home page.

[Image 1]

 

Index ETF Options Volume

Index ETF Options Volume

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. No stocks had unusual volume and excess put or call action. Volume is very light for such a volatile day.

 

[Image 1]

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 Volumed

Markets Are Not In Panic Mode

Business Insider does a nice job of updating us on the state of the financial markets. Despite multiple conflicts around the world stocks are doing quite well.

Markets