Anybody who watches CNBC or Bloomberg TV probably knows about VIX, the CBOE S&P 500 Volatility Index. Commonly referred to as the “fear index,” VIX measures the market’s expectation of S&P 500 variability over a 30-day horizon. Generally, VIX moves opposite to the S&P – rising as the benchmark falls and declining when the stock index rises. VIX, derived from real-time prices of S&P 500 options, reflects the implied volatility assumption built into option premia. VIX typically ranges between 10 percent and 30 percent, though there have been spikes into the 50-to-70 percent area at times. Generally, fear is reflected whe...
We believe that GBP/USD will crack 1.26 this week for a variety of reasons. First, sterling should benefit from euro safe haven flows. The French elections are front and center and the polls are very tight. Markets in Europe are closed today but we think investors will grow increasingly nervous as the week progresses and they will express their caution by selling euros. Also the U.S. dollar should also extend its slide after liquidity returns to normal on Tues. Last week’s retail sales and consumer price reports along with today’s Empire State manufacturing index were exceedingly weak, eliminating the chance of a June hike. President Trum...
Disbelief is not an investment plan. I have yet to come across a successful investor or trader whose main investment philosophy is solely, “this won’t end well.” We can have all the strong opinions we want, but I’ll let you in on a little secret. Markets don’t care what we think. Markets are going to do what markets are going to do. We cannot bend them to our will. The faster we check our opinions (and pride) at the door and humble ourselves to the all-knowing market forces of supply and demand, the sooner we can begin to profit from objective facts and avoid losses generated by subjective opinions. Over the past few months, a very ...
In our quest to find the intrinsic value of stocks that we are interested in investing in, we have looked at several different types of formulas to help us determine that value. We haven’t considered the role that dividends play in these valuations, and as dividend investors, this is an important fact to factor in. Today we will discuss the dividend discount model to find the intrinsic value of dividend paying stocks. Dividends are such an important variable to building our wealth, it is in our best interests to continue to add to our toolbox the different methods of calculating intrinsic value. The dividend discount model is simplicity its...
On April 11/2017 bears pushed EUR/AUD lower and it seems lower prices are yet to come in the following trading sessions. At the current moment, bias remains bearish and traders should look for any possible selling opportunities. 1 Hour Chart Bearish Pattern: A bearish pattern is visible on short term analysis but traders need to be patient and wait for the price to retrace higher towards the BC 0.50% Fib. retracement level and wait for the point D (blue pattern) to enter the possible reversal zone (blue box) to trigger sells. We do not recommend buying the pair to the proposed selling zone but rather advise to wait for price to enter the pos...
A positive response to Friday’s selling helped erase those losses, but for many indices it wasn’t enough to recover support or reverse technical ‘sell’ triggers. The S&P is on the verge of a ‘death cross’ between 20-day and 50-day MAs as the rally finished just below the 50-day MA. The consolidation channel remains in play and this should see higher prices in the latter part of the year, but for now, it’s drifting down in a relatively controlled manner. A second ‘bear trap’ could be in play for the Nasdaq as the index did enough to recover its 50-day MA. Aggressive players could loo...
Last quarter investors forgot the negative cash-flow, forgot the soaring cost of content, forgot the rampant competition, and forgot fact that Netflix (NFLX) slashed its domestic subscriber growth expectations, and just bought-the-f##king-record-high because international subscriber growth soared. This quarter, however, they may be less gullible because that surge in international subscribers not only did not happen, but missed by a whopping 370K subs, missing both the street forecast of 3.9 million and the company’s own guidance of 3.7 million. Adding to the pain, domestic subscribers of 1.42 million also missed consensus of 1.59 milli...
Excess reserves of depository institutions peaked at $2.7 trillion in August of 2014. By December of 2016, excess reserves fell to $1.9 trillion but have since climbed back to $2.2 trillion. On October 3, 2008, Section 128 of the Emergency Economic Stabilization Act of 2008 allowed the Federal Reserve banks to begin paying interest on excess reserve balances (“IOER”) as well as required reserves. The Federal Reserve banks began doing so three days later. As interest rates have risen, so has the free money to banks. Excess Reserves Interest Paid on Excess Reserves At 1% interest, banks receive $22 billion in free money every year, ne...
Gold and silver were rallying on Sunday evening on the increasing geopolitical risks. However, volumes overall were light today, as several overseas exchanges remained closed and traders off work after the long holiday weekend. And so the metals were sold, and stocks rallied on more puffery and nonsense. ...
Written by StockNews.com Snyder’s-Lance Inc. (NASDAQ:LNCE) early Monday slashed its earnings guidance amid higher marketing spending, and announced the sudden retirement of its CEO. The Charlotte, NC-based snack foods giant: expects Q1 earnings per share (EPS) to come in at $0.13 to $0.14, which is far below the $0.27 that Wall Street currently expects. Q1 revenues are seen between $530 and $532 million, also well off the $551.13 million that analysts are looking for. full-year earnings guidance…forecast 2017 EPS of $1.05 to $1.20, while Wall Street expects $1.38 per share for the year. That’s down from LNCE’s prior outlook of $1...