With all the ’87 Crash reminiscing I figured it was time to reach into my nostalgia bucket and come up with IBM. The early 90s were mostly about the death of IBM and rise of MSFT in tech. I remember traders selling calls upon calls in IBM as it went into the dustbin for several years as the mainframe went the way of the Dodo. Seems over the last several years IBM has had the same issue as in the past with falling revenue while still being somewhat profitable. Wall Street hates that.
Ever since this summer when AMZN kicked the tar out of COST and WMT for buying toney retail space owner WFM, I have been waiting for the next victim. Meal maker BLUE got thrashed but that was kind of a David and Goliath battle anyway. WBA is no market pansy but rather a real heavyweight globally in prescription drugs. It did not matter much as the leader premium got kicked out of WBA in a hurry.
Not very long ago NVDA was a $30 stock. Now that the world has caught on to the many uses of GPU’s NVDA is a $190 stock. Citron hated it at $100 and that was $90 ago. With earnings coming up the MOMO crowd will not be able to let NVDA go so I think there is reasonable support for the name. The question is if I can make some upside cheap enough.
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As I write this Greece defaults on debt to the IMF and sends its citizens into some uncharted waters. The SPY is up .25 from the close so it is a safe bet for now that US stocks don’t care anymore. The game is ending and is about to play out with a referendum this weekend. It would not surprise me to see stocks start a rally again and end up at new highs after the labor reports this week. Another surprise was the jump in AAPL IV on a down volatility day in the market.
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GOOG is about to declare earnings and this is the cheapest I have seen the ATM options in as long as I can remember into a cycle. The key to GOOG is how it trades through the earnings. Most of the time the move in a direction will keep going allowing the ATM the day before earnings to go deep in the money.
Another toxic brew for stocks today as equates drifted down around 1+% for the day. None of this was really attributable to the numbers. ADP was ok but the Ebola, HK, Russia, ISIS concoction of market sadness kept sentiment weak. Note how all the problems are more political than anything else. They need the will to solve them. This did drive IV up to some higher levels so those with some dry powder listen up.
Stocks are shaking off just about everything at this point such as Iraq, Iran, Ukraine, Syria and of course that paradise on the Med, the Gaza Strip. Slow growth in Europe, who cares. WMT swamped in health care costs, take it up. Volatility, well just sell the crap out of it. VIX is now deep into the 12 handle and we might sniff 11% tomorrow.