DAL Analysis

Delta Air Lines Inc. (DAL)

Update 10/19/2017: DAL hit the consensus earnings forecast almost on the mark, coming in at $1.57 per share. The price closed the session immediately after earnings were announced up $0.37, within the central tendency and the average of the the past year’s post-earns moves.

I opted for a directional, bearish trade, which means the position lasted longer than with my direction-neutral plays. The price the next day out moved contrary to my position, rising about a dollar, and then began a four-day decline that brought the position near my profit goal. I exited a 49.1% of maximum potential profit.

Zacks had scored DAL as very bearish, with no earnings surprise expected. The surprise part turned out to be correct. And in Elliott wave terms the post-earns trend has been bearish, since the downward turn occurred below the prior peak of $55.75.

Shares declined by 3.3% over nine days, or a -135% annual rate. The options position produced a +97% return for a +3,916% annual rate.


DAL publishes earnings on Wednesday before the opening bell.

I  shall use options that trade for the last time 39 days hence, on Nov. 17. I’m going further out than is my usual practice on earnings plays because I have concluded that a bearish directional position best suits DAL’s prospects.

Implied volatility stands at 29%, which is 2.8 times the VIX, a measure of the volatility of the S&P 500 index.

DAL’s IV stands in the 32nd percentile of its annual range and the 71st percentile of its most recent broad movement.

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DAL Analysis

Delta Air Lines Inc. (DAL)

Update July 13, 2017: DAL moved little after earnings were published. The profit largely came from a decline in implied volatility. I exited at 24.9% of maximum potential profit.

Shares rose by 0.7% over one day, or a +256% annual rate. The options position produced a 33.1% yield on debit for a +12,081% annual rate.


DAL publishes earnings on Thursday before the opening bell.

I shall use options that trade for the last time nine days hence, on July 21.

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

DAL’s IV stands in the 31st percentile of its annual range and the peek of its most recent broad movement.

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DAL Analysis

Delta Air Lines Inc. (DAL)

Update 4/27/2017DAL did a fair imitation of a yo-yo after earnings were published, rising sharply from where it began the today and then falling to near its starting point, falling further the next day and then rising to slightly beyond the post-earnings peak, and then declined again to near where the fluctuations began.

All in all, a lot of Sturm und Drang, signifying nothing. I exited at 33% of maximum potential profit.

Shares staged a net decline of 0.8% over 16 days, or a +18% annual rate. The options position produced a 49.1% yield on debit for a +1,121% annual rate.


DAL publishes earnings on Wednesday before the opening bell.

I shall use the MAY series of options, which trades for the last time 38 days hence, on May 19.

Implied volatility stands at 32%, which is 2.1 times the VIX, a measure of the volatility of the S&P 500 index.

DAL’s IV stands in the 27th percentile of its annual range and the 96th percentile of its most recent broad movement, which is in a fairly narrow range typical of DAL for the past two months.

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The Week Ahead: Retail, industry, housing and the Beige Book

 

The economic reporting week shines a statistical spotlight on three broad functions of the economy.

On Monday, consumption, with the retail sales report, published at 8:30 a.m. New York time.

On Tuesday, the light moves upstream, to manufacturing, in the  industrial production report, out at 9:15 a.m.

And also on Tuesday, a report highlights the real-estate sector, with the  housing starts report, out at 8:30 a.m.

It will also be an active week for the Federal Reserve and its glitterati. The Beige Book, a narrative summary of conditions in each of the Fed’s regions, will be published on Wednesday at 2 p.m.

That event will be bracketed by appearances by Fed Vice Chairman Randal K. Quarles before Congress, on Tuesday at 10 a.m. before the House Financial Services Committee and Thursday at 9:30 a.m. before the Senate Banking Committee. He will be reporting on the supervision and regulation of financial companies by the Fed.

Fed Gov. Lael Brainard will speak on regulatory reform to the Global Finance Forum in Washington, D.C. on Thursday at 8 a.m.

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The Week Ahead: GDP, trade, income and a holiday

 

U.S. markets will be closed on Friday for a Christian religious holiday, and will close on Thursday at 2 p.m. New York time. Markets will also be closed Friday in London and Sydney, but will be open in Tokyo.

A third and final estimate of the 4th quarter gross domestic product and GDP for all of 2017 will be published on Wednesday at 8:30 a.m.

Two other major reports will be released during the week: International trade  in goods, also on Wednesday at 8:30 a.m., and personal income and outlays, on Thursday at 8:30 a.m.

Fed Vice Chairman Randal Quarles will address the Operation HOPE Global Forums in Atlanta on Monday at 7:10 p.m. His subject: “The Roles of Consumer Protection and Small Business Access to Credit in Financial Inclusion”.

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The Week Ahead: Jobs and trade

Arguably, economic life is a brightly blazing unemployment rate, surrounded by a collection of economic planetoids of little significance in comparison.

Which is odd, because the employment situation report, out Friday at 8:30 a.m. New York time, is like all such reports a trailing indicator, whose aggregate numbers say much about the past but little about the future, and stand far beyond the ability of presidents or CEOs to influence. And yet, it is the jobs report that grabs the headlines and by which the successes and failures of politicians and nations are measured.

As always, the job report gets a sneak preview from the private sector, the ADP employment report on Wednesday at 8:15 a.m.

Also out on Wednesday, international trade at 8:30 a.m., providing fresh figures against which President Trump’s recent tariffs announcement can be measured.

In Fedworld:

The Federal Reserve Beige Bookwhich provides a narrative of economic conditions in each of the Fed’s regions, will be published on Wednesday at 2 p.m.

Fed Vice Chairman Randal Quarles speaks about foreign bank regulation at the Institute of International Bankers Washington Conference on Monday at 1:15 p.m.

Fed Gov. Lael Brainard will present an economic and monetary policy outlook at the Money Marketeers Forum in New York on Tuesday at 7 p.m.

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The Week Ahead: Fed Chair testimony, GDP, durables and global trade

The new Federal Reserve chairman, Jerome Powell, testifies before Congress for the first time as head of the agency, before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday. Each hearing begins at 10 a.m. New York time.

Powell is the first non-economist to head the Fed since William Miller, who served in the post in 1978 and 1979. Miller was CEO of an aerospace/defense company, Textron Inc. (TXT), and Powell was an investment banker at several companies, culminating as a vice president at the no-longer existing Dillon, Read & Co.

And that’s what will keep me glued to the screen throughout the testimony: How will his approach and assessments, given his background, differ from those of the long string of economists that have controlled our money, our prosperity and our ability to earn a living and therefore survive in the world. High stakes, and as traders we need to understand the odds of him having an impact on our results.

Meanwhile, back in the more mundane realm of economic reporting, traders will get a second estimate of gross domestic product for the 4th quarter, on Wednesday at 8:30 a.m. It will be one of a collection of reports that give deep insight into our economic realities: Durable goods orders and international trade in goods, each on Tuesday at 8:30 a.m., and personal income and outlays on Thursday, also at 8:30 a.m.

In addition, new home sales statistics will be published on Monday at 10 a.m.

Back to the Fed, Vice Chairman for Supervision Randal Quarles will give give an assessment of the U.S. economy in an address to the 34th Annual National Association for Business Economics Economic Policy Conference, on Monday at 3:15 p.m. in Washington.

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The Week Ahead: Minutes, home sales, Fed speech and a holiday

U.S. markets will be closed on Monday for the President’s Day holiday. Markets in London, Tokyo and Sydney will be open as usual.

The holiday will kick off a week when economics reports are so sparse as to almost be non-existent.

The Federal Open Market Committee minutes of the Jan. 31 meeting will be published on Wednesday at 2 p.m. New York time. At that meeting FOMC members by unanimous vote kept the interest rate under their control unchanged.

A report on existing home sales, covering the greater part of the housing market, will be released on Wednesday at 10 a.m. The counterpart new home sales report will be published the week after.

And Fed Vice Chairman Randal Quarles will give a speech in Tokyo on a topic that, amid newly volatile markets, might provide insight into monetary regulators’ thinking: “10 years after the Global Financial Crisis: How has the world economy changed and where will it go?” The speech will be delivered to the International Financial Symposium organized by the Institute for International Financial Affairs, on Thursday at 12:15 a.m. New York time.

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The Week Ahead: New Fed chair hearing, old Fed chair testimony, GDP, trade and more

The Senate begins its nomination hearing for President Trump’s nominee to replace Janet Yellen as Federal Reserve chair, Fed Gov. Jerome Powell, The hearing will be held by the Committee on Banking, Housing and Urban Affairs, chaired by Sen. Michael Crapo, D-Idaho, on Tuesday at 9:45 a.m. New York time.

The outgoing Fed Chair Yellen delivers economic outlook testimony to the Joint Economic Committee of Congress on Wednesday at 10 a.m.

Five major reports will be published during the week: The second release of 3rd quarter gross domestic produce on Wednesday, international trade in goods on Tuesday and personal income and outlays on Thursdayeach at 8:30 a.m., and new home sales on Monday and the Institute of Supply Management manufacturing index on Friday, each at 10 a.m.

One other potentially important Fed appearance during the week: The new Fed Vice Chairman for bank supervision addresses the Financial Stability and Fintech Conference on Thursday at 12:30 p.m. in Washington, D.C. His speech will be streamed live here.
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