8/29 – 2:05 p.m. New York time
As I noted in yesterday’s “Live” post, I had neither entrances into new positions nor exits from existing ones on my desk today. Therefore, no outcomes.
By Tim Bovee, Aug. 29, 2017, Portland, Oregon
Author: Tim Bovee
Live: Monday, Aug. 28, 2018
8/28 – 12 p.m. New York time
I entered no new positions and exited MOMO and MRVL.
As is not unusual in the periods between earnings season, my cupboard of options positions is bare. The next trading opportunities for earnings plays will come on Wednesday, although on Tuesday I may explore opportunities unrelated to earnings announcements
Meanwhile, my trading for today is over.
The Week Ahead: GDP, jobs, manufacturing, global trade
A giant one-two punch marks the week.
The second gross domestic product estimate for the 2nd quarter will be released on Wednesday, and employment situation stats will be published Friday, each at 8:30 a.m. New York time.
Both are heavy hitters in discourse on our financial future, but it should be noted, both are trailing indicators, telling us what has happened rather than pointing toward what will. Traders who believe that past is prologue will give weight to the two macroeconomic pronouncements. Myself, I am no fan of the PIP theory, having broken my crystal ball in a tragic slip on the ice some years ago.
A leading indicator in the week’s econ mix is from the Institute of Supply Management manufacturing survey, out Friday at 10 a.m.
The employment numbers will get a sneak preview on Wednesday by means of a report produced by a private company, the ADP employment report. Look for it on Wednesday at 8:15 a.m.
Another major report out during the week: International trade in goods on Monday at 8:30 a.m.
Live: Friday, Aug. 25, 2017
825 – 3:20 p.m. New York time
No new positions; no exits. We’re in the between-the-earnings-season doldrums.
8/24 – 7:25 p.m. New York time
I have no prospective trades on my desk for action on Friday.
By Tim Bovee, Portland, Oregon, Aug. 24-25, 2017
MRVL Analysis
Marvell Technology Group Ltd. (MRVL)
Update 8/28/2017: MRVL beat earnings expectations, coming in at $0.31 against the $0.28 consensus forecast. Shares rose more than $1 after publication and then fell less than a quarter of the rise before beginning another upward move.
The Earnings Surprise Predictor from Zacks Investment Research gave no indication that a surprise was looming.
Shares rose by 7.0% over over four days, or a +636% annual rate. The options position produced a 46.9% loss for a -1,766% annual rate.
MRVL publishes earnings on Thursday after the closing bell.
I shall use options that trade for the last time eight days hence, on Sept. 1.
Implied volatility stands at 42%, which is 3.4 times the VIX, a measure of the volatility of the S&P 500 index.
MRVL’s IV stands in the 85th percentile of its annual range and the 88th percentile of its most recent broad movement.
AVGO Analysis
Broadcom Ltd. (AVGO)
AVGO publishes earnings on Thursday after the closing bell.
I shall use options that trade for the last time eight days hence, on Sept. 1.
Implied volatility stands at 40%, which is 3.3 times the VIX, a measure of the volatility of the S&P 500 index.
AVGO’s IV stands in the 78th percentile of its annual range and at the peak of its most recent broad movement.
Live: Thursday, Aug. 24, 2017
8/24 – 3:25 p.m. New York time
I entered a position on MRVL and exited positions on LOW, MDT and COTY.
I analyzed AVGO but declined to take the trade.
8/24 – 10:55 a.m. New York time
I have updated the exits with results. Also, I am removing GME from my prospects list. It has a high Earnings Surprise Predictor score from Zacks Investment Research, in theory increasing the chance that the price will move beyond the zone of profit.
8/24 – 9:40 a.m. New York time
Live: Wednesday, Aug. 23, 2017
8/23 – 1:30 p.m. New York time
I am shutting down early day, with these outcomes: I entered no new positions, and exited one position, in CRM.
CRM Analysis
Salesforce.com Inc. (CRM)
Update 8/23/2017: CRM met Street expectations with earnings of 33 cents per share. The stock price fell by about a dollar and a half immediately after the earnings announcement, and then after the opening bell returned to where it had closed the night before the announcement. I exited at 42.8% of maximum potential profit.
Shares showed a net decline during my one-day holding period of 0.4%, or a -142% annual rate. The options position produced a 74.8% return for a +27,297% annual rate.
CRM publishes earnings on Tuesday after the closing bell.
I shall use options that trade for the last time 10 days hence, on Sept. 1.
Implied volatility stands at 31%, which is 2.6 times the VIX, a measure of the volatility of the S&P 500 index.
CRM’s IV stands in the 52nd percentile of its annual range and at the peak of its most recent broad movement.
LOW Analysis
Lowe’s Cos. Inc. (LOW)
Update 8/24/2017: LOW’s earnings failed to attain the Street estimate, coming in at $1.57, rather than the expected $1.62. Shares fell nearly $5 after publication, and then recovered more than half of the loss in a zig-zag movement. I exited at 23.1% of max profit, about $2 below my target.
Zacks Investment Research had predicted a positive earnings surprise, with an Earnings Surprise Predictor score of 0.62.
Shares showed a net decline of 2.8% over two days, or a -501% annual rate. The options positions produced a 30.0% return for a +5,481% annual rate.
LOW publishes earnings on Wednesday before the opening bell.
I shall use options that trade for the last time 10 days hence, on Sept. 1.
Implied volatility stands at 30%, which is 2.5 times the VIX, a measure of the volatility of the S&P 500 index.
LOW’s IV stands in the 84th percentile of its annual range and at the peak of its most recent broad movement.
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