8/21 – 3:15 p.m. New York time
I entered three positions today– COTY, MDT and MOMO — and exited three —DE, CSCO and NTAP.
Author: Tim Bovee
The Week Ahead: Durables, homes, Jackson Hole
Three major reports punctuate the trading week: Durable goods orders on Friday at 8:30 a.m. New York time, and earlier in the week, two real-estate reports: Existing home sales on Thursday and new home sales on Wednesday, each at 10 a.m.
But the spotlights and trumpets and drum rolls and other markers of drama will be focused on Jackson Hole, Wyoming, where the annual Economic Policy Symposium hosted by the Kansas City Federal Reserve Bank open on Thursday at 8 p.m. (all times for the symposium are listed as New York time; the local time in Jackson Hole is two hours earlier).
Fed Chair Janet Yellen addresses the forum on Friday at 10 a.m. European Central Bank Chairman Mario Draghi will also speak to the symposium, also on Friday, at 3 p.m.
The conference will continue through Saturday.
Live: Friday, Aug. 18, 2017
DE Analysis
Deere & Co. (DE)
Update 8/21/2017: DE hit its earnings mark almost perfectly, at $1.97 per share, but fell $12 in trading after the announcement, recovering about a third of the decline as trading progressed in the first post-earns session. I exited for a loss less than a week before the options expire.
Shares showed a net decline of 7.2% over my four-day holding period, or a -661% annual rate. The options position produced a -39.4% loss for a -3,598% annual rate.
DE publishes earnings on Friday before the opening bell.
I shall use options that trade for the last time eight days hence, on Aug. 25.
Implied volatility stands at 27%, which is double the VIX, a measure of the volatility of the S&P 500 index.
DE’s IV stands in the 74th percentile of its annual range and the 68th percentile of its most recent broad movement.
AMAT Analysis
Applied Materials Inc. (AMAT)
Update 8/18/2017: AMAT’s earnings beat analysts expectations by 2 cents, at $0.86 per share. The stock price rose b6 $2 pre-market trading. I exited at $1.75, or 17.5% of maximum potential profit, with the stock at $44.72.
Shares rose by a a net 2.2% during my one-day holding period, or a +792% annual rate. The options position produced a 21.1% return for a +7,717% annual rate
AMAT publishes earnings on Thursday after the closing bell.
I shall use options that trade for the last time eight days hence, on Aug. 25.
Implied volatility stands at 37%, which is 2.8 times the VIX, a measure of the volatility of the S&P 500 index.
AMAT’s IV stands in the 86th percentile of its annual range and the 93rd percentile of its most recent broad movement.
GPS Analysis
The Gap Inc. (GPS)
GPS publishes earnings on Thursday after the closing bell.
I shall use options that trade for the last time eight days hence, on Aug. 25.
Implied volatility stands at 41%, which is 3.1 times the VIX, a measure of the volatility of the S&P 500 index.
GPS’ IV stands in the 53rd percentile of its annual range and the 75th percentile of its most recent broad movement.
Live: Thursday, Aug. 17, 2017
WMT Analysis
Wal-Mart Stores Inc. (WMT)
Update 8/17/2017: WMT’s earnings came in spot on the analyst expectations, at $1.08 per share. Zacks Investment Research had given a 0.94% earnings surprise predictor score.
The stock fell in pre-market trading and then began to rise after the opening bell. I exited the contracts at a $2.21 debit, or 24.8% of maximum potential profit, with shares at $79.11.
Shares declined by 2.2% over one day, or a -819% annual rate. The options position produced a 33.0% return for a +12,057% annual rate.
WMT publishes earnings on Thursday before the opening bell.
I shall use options that trade for the last time nine days hence, on Aug. 25.
Implied volatility stands at 22%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.
WMT’s IV stands in the 72nd percentile of its annual range and the 88th percentile of its most recent broad movement.
CSCO Analysis
Cisco Systems Inc, (CSCO)
Update 8/21/2017: CSCO fell a dollar after earnings were published after coming in at $0.62, a penny plus change above analysts’ consensus expectation. It declined the first trading session after earnings were published, and continued its descent for two subsequent days. It rose again on the third day, and I exited for a loss less than a week before the options expired.
Shares declined by 5.6^ over five days, or a -409% annual rate. The options position produced a -39.9% loss for a -2,912% annual rate
CSCO publishes earnings on Wednesday after the closing bell.
I shall use options that trade for the last time nine days hence, on Aug. 25.
Implied volatility stands at 22%, which is 1.9 times the VIX, a measure of the volatility of the S&P 500 index.
CSCO’s IV stands in the 68th percentile of its annual range and the 84th percentile of its most recent broad movement.
NTAP Analysis
NetApp Inc. (NTAP)
Update 8/21/2017: NTAP’S earnings beat the Street estimate somewhat, coming in at $0.62 as compared to $0.58. In keeping with the perverseness of the markets, the price fell $2 on the second trading day after the announcement, and continued to fall for three subsequent days. I exited for a loss with options expiration less than a week away.
Shares showed a net decline of 7.7% over my five-day holding period, or a -562% annual rate. The options position produced a -33.7% loss for a -2,461% annual rate.
NTAP publishes earnings on Wednesday after the closing bell.
I shall use options that trade for the last time nine days hence, on Aug. 25.
Implied volatility stands at 35%, which is 3.1 times the VIX, a measure of the volatility of the S&P 500 index.
NTAP’s IV stands in the 55th percentile of its annual range and the 75th percentile of its most recent broad movement.
Tim Bovee, Private Trader 
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