X Analysis

United States Steel Corp. (X)

Update 11/1/2017: A announced a 24.0% earnings surprise. The Street estimate was $0.74 per share; the announced earnings were $0.92 per share. Shares gapped up $2.53 at the opening bell, rose another $2 and then declined. I exited early at 71.4% of maximum potential profit, nearly triple my target.

Zacksearnings surprise predictor algorithm anticipated the earnings surprise, producing a 5.97 score in the context of neutral expectations. X also has a high beta of 2.89, nearly triple the movement rate of the S&P 500.

X closed up  $1.98 during the first trading session after earnings were published, well below the maximum move of $8.33 during the past year and the average move of $3.09, but greater than the central tendency of $1.57.

Shares rose by +10.0% during my one-day holding period, or a +3,638% annual rate. The options position produced a 250.0% return for a +91,250% annual rate.


X publishes earnings on Tuesday after the closing bell.

I shall use options that trade for the last time 17 days hence, on Nov.. 17.

Implied volatility stands at 61%, which is 5.9 times the VIX, a measure of the volatility of the S&P 500 index.

X’s IV stands in the 58th percentile of its annual range and at the peak of its most recent broad movement.

Read More »

GRMN Analysis

Garmin Ltd. (GRMN)

Update 11/1/2017: GRMN announced earnings of $0.75 per share, 2.1% over the $0.70 consensus estimate. The share price gapped up by $1.01 at the opening bell and continued to rise. I exited at 24.9% of maximum potential profit; essentially, at my target.

Zacks didn’t predict an earnings surprise and had a neutral view of GRMN’s prospects.

Shares closed up $2.19 the first trading session after earnings were published, les than the estimated move of $2.72 and the maximum post-earns move of $3.70 during the past year, but greater than the average move of $1.68 and central tendency of $1.40.

Shares rose by 2.1% over my one-day holding period, or a +756% annual rate. The options position produced a 33.0% return for a +12,047% annual rate.


GRMN publishes earnings on Wednesday before the opening bell.

I shall use options that trade for the last time 10 days hence, on Nov. 10.

Implied volatility stands at 31%, which is 3.1 times the VIX, a measure of the volatility of the S&P 500 index.

GRMN’s IV stands in the 94th percentile of its annual range and the 70th percentile of its most recent broad movement.

Read More »

BP Analysis

BP p.l.c. (BP)

BP publishes earnings on Tuesday after the closing bell.

I shall use options that trade for the last time 11 days hence, on Nov.. 10.

Implied volatility stands at 20%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.

BP’s IV stands in the 52nd percentile of its annual range and at the peak of its most recent broad movement.

The price used for analysis was $39.67.

At this point I can go straight to a decision.

 

Decision for My Account

BP’s implied volatility stands at below my minimum require of double the VIX, at 1.906 to be precise. If I were having trouble finding trades I might bend the rule, but there’s no need this week, at the peak of earnings season. I can afford to insist on perfection. No trade.

By Tim Bovee, Portland, Oregon, October 30, 2017

Read More »

ETN Analysis

Eaton Corp. plc (ETN)

ETN publishes earnings on Tuesday after the closing bell.

I shall use options that trade for the last time 11 days hence, on Nov.. 10.

Implied volatility stands at 24%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

ETN’s IV stands in the 53rd percentile of its annual range and at the peak of its most recent broad movement.

Read More »

The Week Ahead: The FOMC, jobs, and a new Fed chair?

The Federal Open Market Committee wraps up a two-day meeting, announcing any decisions on interest rates at 2 p.m. New York time.

The Labor Department’s employment situation report will be published on Friday at 8:30 a.m.

Fed Gov. Jerome Powell, considered to me President Trump’s most likely pick during the week to be the next chair of the Federal Reserve, gives introductory remarks to the Alternative Reference Rates Committee Roundtable at the Federal Reserve Bank of New York. His remarks will be delivered by pre-recorded video. Bloomberg News reported on Powell’s prospects.

If no black swans come swooping down, those three events will define the markets’ week.

Other major releases: Personal income and outlays on Monday at 8:30 a.m., the Institute of Supply Management manufacturing survey on Wednesday at 10 a.m. and international trade on Friday at 8:30 a.m.

A private sector report, the ADP employment report, will provide a sneak preview of the employment situation numbers on Wednesday at 8:15 a.m.
Read More »

MSFT Analysis

Microsoft Corp. (MSFT)

MSFT publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days hence, on Nov. 3.

Implied volatility stands at 23%, which is double the VIX, a measure of the volatility of the S&P 500 index.

MSFT’s IV stands in the 76th percentile of its annual range and the 88th percentile of its most recent broad movement.

Read More »

INTC Analysis

Intel Corp. (INTC)

Update 10/30/2017: INTC announced earnings of $1.01 per share, coming in well above the consensus estimate of $0.82. The stock price gapped up nearly $2 at the opening bell. I exited for a loss.

Although Zacks was bullish on INTC, it gave only a 0.06 score in favor of an upside earnings surprise. The post-announcement $3.69 move by the end of first trading day had exceeded the $2.24 maximum of the past year by $1.45, in line with a trend from last summer of the market giving outsized reactions that have cut into my profits.

Shares rose by 8.2% over my four-day holding period, or a 750% annual rate. The options position produced a -49.4% loss for a -4,142% annual rate


INTC publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days hence, on Nov. 3.

Implied volatility stands at 26%, which is 2.4 times the VIX, a measure of the volatility of the S&P 500 index.

INTC’s IV stands in the 94th percentile of its annual range and at the peak of its most recent broad movement.

Read More »