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Frank Fahey: Market News for the Prepared Mind: 3.6-3.13.2017

March 6, 2017

“Chance favors the Prepared Mind.” – Louis Pasteur

“Sometimes paranoia’s just having all the facts.” – William S. Burroughs

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

“The market can remain irrational longer than you can remain solvent.” John Keynes

The Dow Jones Industrials and the S&P 500 are up over 6% since New Year’s Day. The tech-laden NASDAQ 100 is up nearly 10.5% for the same period. The 2009-2017 bull market is the second longest in in history, surpassed on by the bull market running from 1987-2000. In absolute terms this bull market is the third strongest in history. The market rose 582% from 1987-2000 and 267% from 1949 to 1956. This long-term movement leaves the investor in the quandary of “What to do.”

After any major market move, it is a good idea to reassess your financial goals based on age, need, and risk tolerance.
Do not be afraid to adjust and re-balance.

Here is an overview of the US market behavior last week and for 2017:

Data Source: OptionVue8

Concerns about Trump’s speech before Congress led to a Tuesday close of 12.92. The VIX ended the week closing down at 4.45% or 0.51. This was the lowest closing low since February 14. The VXST – CBOE Short-term Volatility Index – show the largest decrease, 9.03%, among the various S&P 500 volatility indexes. Fears of March 15 parliamentary elections in the Netherlands and the April 21 beginning of the French Presidential election process were not reflected in pricing of VIX futures or related products. This could change at any moment. The ephemeral nature of fear and VIX pricing guarantee this.

Here is an overview of last week for the VIX and related products:

Data Source: OptionVue8

There are just a few economic reports that will be released next week, but they do include one of the biggest – the U.S. Employment Situation report on Friday. Monday starts with Factory Orders followed by the Tuesday release of trade numbers. The focus changes to employment on Wednesday with the release of the ADP Employment Report. Employment remains the focus through Friday when February’s Employment Situation Report is released. The ECB will also release a statement after its regularly scheduled meeting on Thursday. January merchandise trade and industrial output will be released this coming week by a number of countries.

The wild card remains the US political climate. Google Trump and read the tweets from Donald Trump (@realDonaldTrump). His tweets have the capability of setting the tenor for an entire trading day.

The earnings season has entered the quiet time. This was the second straight ho-hum earnings season. It has been my experience that the post earnings behavior of individual stocks and the associated options usually show a remarkable consistency between individual earnings announcements in movement of the underlying and change in the implied volatility of the options. This consistency within individual stocks has not been apparent the past two earnings cycles. It is as if a “new normal” is being defined.

Earnings announcements are predictable volatility events providing trading opportunity. It is important to reduce the number of surprises which may occur in any trading campaign. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website.

I have added a scan of stocks with earnings announcements to the calendar for each day in the coming week. The scan criteria are: Closing price> $20, Implied Volatility > 25, Average daily option volume > 800 contracts. Liquidity, as determined by width of option markets and individual option contract volume, is a crucial component in successfully trading any option strategy. One of the most frustrating experiences is an inability to adjust or exit a strategy due to lack of liquidity in the market. The market uncertainty associated with the election has impacted liquidity. I found it difficult to enter earning trades last week. The bid/ask spreads seemed much larger than usual. Do not force trades in illiquid markets. Data Source for earnings: OptionVue8

Earnings Scan:   March 6 through March 17

Advice to stimulate your imagination:

“I took a speed-reading course and read War and Peace in twenty minutes. It involves Russia.” – Woody Allen

“Nobody should have any illusion about the possibility of gaining military superiority over Russia. We will never allow this to happen.” – Vladimir Putin

“If you do not actively attack the risks, they will actively attack you.” – Tom Gib

Monday March 6:

Economic: Gallup US Spending Measure – 8:30, Factory Orders – 10:00, TD-Ameritrade IMX – 12:30, Durable Goods Orders – 8:30, Dallas Fed Manufacturing Survey – 10:30.

International Economic: No major announcements.

Orders: Minneapolis Federal Reserve Bank President Neel Kashkari speaks at NABE conference in panel titled “A View from the FRB Minneapolis,” in Washington, D.C – 3:00PM.

 

Tuesday March 7:

Economic: International Trade in Goods – 8:30, Gallup US ECI – 8:30. Redbook – 8:55, EIA Petroleum Status Report – 10:30.

International Economic: Germany Manufacturers’ Orders – 2:00AM, Eurozone GDP – 5:00AM.
Other:

 

Wednesday March 8:

Economic: MBA Mortgage Applications – 7:00 ADP Employment Report – 8:15, Productivity and Costs
8:30, Wholesale Trade – 10:00, EIA Natural Gas Report – 10:30.

International Economic: Germany Industrial Production – 2:00AM, France Merchandise Trade – 2:45. China CPI & PPI – 8:30PM,

 

Thursday March 9:

Economic: Challenger Job-Cut Report – 7:30, Jobless Claims – 8:30, Gallup Good Jobs Rate – 8:30, Import and Export Prices – 8:30, Bloomberg Consumer Comfort Index – 9:45, Quarterly Services Survey – 10:00.

International Economic: No major announcements.

Other: European Central Bank (ECB) Announcement – 7:45 AM

 

Friday March 10:

Economic: February Employment Situation – 8:30, Baker-Hughes Rig Count – 1:00PM.

International Economic: Germany Merchandise Trade – 2:00AM, France Industrial Production – 3:45AM, Italy Unemployment Rate – 4:00AM, Great Britain Industrial Production – 5:30AM, Great Britain Merchandise Trade – 5:30AM.

 

Monday March 13:

Economic: Labor Market Situation – 10:00.

International Economic: Japan Tertiary Index – 1:30AM, China Industrial Production and Retail Sales – 10:00PM

 

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Frank Fahey: Market News for the Prepared Mind: 2.27-3.6.2017

February 27, 2017

“Imagination decides everything.” – Blaise Pascal

“Chance favors the Prepared Mind.” – Louis Pasteur

“This awful catastrophe is not the end but the beginning. History does not end so. It is the way its chapters open.” – St. Augustine

“The market can remain irrational longer than you can remain solvent.” John Keynes

The Dow Jones Industrials were up for the 11th straight day. The string of gains is the product of a string of small daily gains. Treasury yields move to their lowest levels in over 5 weeks. The VIX remains at levels showing little investor concern. Most of the indicators are decidedly bullish, yet I am wary. Over 30 years as a professional options trader has left me permanently wary.

Here is an overview of the US market behavior last week and for 2017:

Index	24-Feb	Change	% Weekly	2016 YTD	Volatility of Index
Dow Jones Industrials (DJIA)	20,821.76	197.71	0.96%	5.36%	11.34% (VXD)
S&P 500 (SPX)	2,367.34	16.18	0.69%	5.77%	11.47% (VIX)
NASDAQ 100 (NDX)	5,343.31	18.59	0.35%	9.86%	12.75% (VXN)
Russell 2000 (RUT)	1,394.52	(5.34)	-0.38%	2.76%	16.90% (RVX)
S&P 100 (OEX)	1047.81	8.58	0.83%	5.69%	10.65% (VXO)
Crude Oil (CLJ7)	54.02	0.29	0.54%	0.24%	25.72%(OVX)
CBOE Volatility Index (VIX)	11.47	(0.02)	-0.17%	NA

Data Source: OptionVue8

THE VIX was down for the week. The March VIX future was down, while the April and May futures showed increases of over 6%. Russell Rhoads, CBOE VIX guru, pointed to the upcoming first round of the French presidential election as impetus for the strength of the April and May VIX futures. This strength was reflected in the VIX 3 month and 6 month Volatility Indexes. The VXV (CBOE 3 Month Volatility Index) was up 7.58%,

Here is an overview of last week for the VIX and related products:

Indexes	Ticker	24-Feb	17-Feb	Change	% Change
CBOE Volatility Index	VIX	11.47	11.49	(0.02)	-0.17%
VIX March Future (3/22/2017)	VXH7	13.325	13.125	0.20	1.52%
VIX April Future (4/19/2017)	VXJ7	15.250	14.350	0.90	6.27%
VIX May Future (5/17/2017)	VXK7	16.075	15.150	0.92	6.11%
CBOE Short-term Volatility Index	VXST	9.41	9.03	0.38	4.21%
CBOE 3 Month Volatility Index	VXV	14.76	13.72	1.04	7.58%
CBOE Mid-term Volatility Index (6 month)	VXMT	16.68	15.79	0.89	5.64%
VIX of VIX	VVIX	83.31	81.25	2.06	2.54%
CBOE SKEW Index	SKEW	138.66	141.15	(2.49)	-1.76%
Long VIX ETP’s
ProShares Ultra VIX Short Term Futures ETF	UVXY	21.44	20.25	1.19	5.88%
iPath S&P 500 VIX Short Term Futures ETN	VXX	18.09	17.54	0.55	3.14%
ProShares VIX Short Term Futures ETF	VIXY	15.08	14.65	0.43	2.94%
iPath S&P 500 VIX Mid-Term Futures ETN	VXZ	29.84	28.49	1.35	4.74%
Inverse VIX ETP’s
ProShares Short VIX Short Term Future ETF	SVXY	125.25	129.05	(3.80)	-2.94%
Daily Inverse VIX Short Term ETN	XIV	64.52	66.54	(2.02)	-3.04%

Data Source: OptionVue8

The first trading week of March does not end with the the employment situation report. Instead of the usual first Friday of the month, the Bureau of Labor Statistics won’t release employment figures for February until the following Friday, March 10.. The coming week includes reports on durable goods and the CoreLogic Case-Shiller Home Price Index. The absence of the monthly employment numbers will allow extra attention to other economic releases” Durable goods orders on Monday, the second estimate for fourth-quarter GDP will follow on Tuesday as will January trade data on goods, and Wednesday will see personal income & outlays. The week closes with the ISM non-manufacturing report.
The international focus is on Dutch Parliamentary elections on March 15 and the first round of the French presidential election on April 23. European investors are jittery.

The earnings season is starting to wind down. This is the second straight ho-hum earnings season. It has been my experience that the post earnings behavior of individual stocks and the associated options have shown a remarkable consistency in movement of the underlying and change in the implied volatility of the options. This consistency within individual stocks has not been apparent the past two earnings cycles. It is as if a “new normal” is being defined.

Earnings announcements are predictable volatility events providing trading opportunity. It is important to reduce the number of surprises which may occur in any trading campaign. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website.

I have added a scan of stocks with earnings announcements to the calendar for each day in the coming week. The scan criteria are: Closing price> $20, Implied Volatility > 25, Average daily option volume > 800 contracts. Liquidity, as determined by width of option markets and individual option contract volume, is a crucial component in successfully trading any option strategy. One of the most frustrating experiences is an inability to adjust or exit a strategy due to lack of liquidity in the market. The market uncertainty associated with the election has impacted liquidity. I found it difficult to enter earning trades last week. The bid/ask spreads seemed much larger than usual. Do not force trades in illiquid markets. Data Sources for earnings: Livevol Core and OptionVue8

Advice to stimulate your imagination:

“The fact that people are full of greed, fear, or folly is predictable. The sequence is not predictable.” Warren Buffett

“If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes” – Peter Lynch

“If you do not actively attack the risks, they will actively attack you.” – Tom Gib

Monday February 27:

Economic: Durable Goods Orders – 8:30, Pending Home Sales – 10:00, Dallas Fed Manufacturing Survey – 10:30

International Economic: Japan Industrial Production and Retail Trade – 6:50PM.

Other: Dallas Federal Reserve Bank President Robert Kaplan participates in a moderated discussion at the University of Oklahoma Price College of Business in Norman, Okla., with audience and media Q&A – 11:00AM.

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
PRGO	Perrigo Company PLC	$84.07	40.82	BMO	2235
WUBA	58.com Inc (ADR)	$32.68	53.75	BMO	3570
ALB	Albemarle Corporation	$92.41	34.07	AMC	1198
EOG	EOG Resources Inc	$97.57	28.39	AMC	7699
HAIN	Hain Celestial Group Inc	$34.84	35.57	AMC	3360
OKE	ONEOK, Inc.	$54.64	27.91	AMC	1057
PCLN	Priceline Group Inc	$1,637.26	25.03	AMC	15745
WDAY	Workday Inc	$88.19	43.69	AMC	3671
PBYI	Puma Biotechnology Inc	$34.70	174.27		1290

 

Tuesday February 28:

Economic: GDP – 8:30AM, International Trade in Goods – 8:30, Redbook – 8:55, S&P Corelogic Case-Shiller HPI 0 9:00, Chicago PMI – 9:45, Consumer Confidence – 10:00, Richmond Fed Manufacturing Index – 10:00, State Street Investor Confidence – 10:00, Farm Price – 3:00.

International Economic: Germany Retail Sales – 2:00AM, France GDP, CPI, PPI – 2:45AM.

Other: Kansas City Federal Reserve Bank President Esther George gives keynote speech about the U.S. Economy and Monetary Policy at Banking and the Economy: A Forum for Women in Banking in Midwest City, Okla., with audience Q&A – 12:45PM, San Francisco Federal Reserve Bank President John Williams gives outlook speech at the Santa Cruz Chamber of Commerce in Santa Cruz, Calif., with audience and media Q&A – 3:30PM, St. Louis Federal Reserve Bank President Bullard speaks about U.S. economy and monetary policy at Spring 2017 GWU Alumni Lecture in Economics at George Washington University in D.C., with audience and media Q&A – 6:30PM.

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
ALR	Alere Inc	$40.37	64.40	BMO	2697
DPZ	Domino’s Pizza, Inc.	$186.30	34.62	BMO	1322
GLNG	Golar LNG Limited (USA)	$27.20	54.67	BMO	3694
IONS	Ionis Pharmaceuticals Inc	$44.35	67.63	BMO	1839
LNG	Cheniere Energy, Inc.	$47.35	34.07	BMO	9020
MDCO	The Medicines Company	$51.84	76.94	BMO	1453
NXST	Nexstar Media Group Inc	$69.50	35.00	BMO	889
PTLA	Portola Pharmaceuticals Inc	$32.16	70.13	BMO	916
ROST	Ross Stores, Inc.	$67.64	27.91	BMO	966
TASR	TASER International, Inc.	$25.47	47.03	BMO	1949
TGT	Target Corporation	$64.98	25.53	BMO	18152
TSRO	TESARO Inc	$185.94	62.60	BMO	2512
ACAD	ACADIA Pharmaceuticals Inc.	$39.56	65.98	AMC	5335
AMBA	Ambarella Inc	$57.03	45.56	AMC	5362
CBI	Chicago Bridge & Iron Company	$33.89	41.32	AMC	3728
CRM	salesforce.com, inc.	$82.07	31.72	AMC	25239
DXCM	DexCom, Inc.	$77.96	45.62	AMC	1172
PANW	Palo Alto Networks Inc	$152.74	41.60	AMC	7766
SRPT	Sarepta Therapeutics Inc	$30.15	81.60	AMC	6283
VEEV	Veeva Systems Inc	$43.58	40.11	AMC	1351
KITE	Kite Pharma Inc	$52.97	72.81		1497

 

Wednesday March 1:

Economic: Motor Vehicle Sales, MBA Mortgage Applications – 7:00, Personal Income and Outlays – 8:30, Gallup US Job Creation Index – 6:30, PMI Manufacturing Index – 9:45, ISM Manufacturing Index – 10:00, Construction – 10:00, EIA Petroleum Status Report – 10:30. Beige Book – 2:00.

International Economic: Germany Unemployment Rate – 3:55AM, Eurozone Manufacturing Index – 4:00AM, Germany CPI – 8:00Am.

Other: Dallas Federal Reserve Bank President Robert Kaplan discuss local and national issues with Paul Quinn College President Michael Sorrell in Dallas, Texas – 12:00PM.

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
BBY	Best Buy Co Inc	$44.31	48.03	BMO	12114
DLTR	Dollar Tree, Inc.	$77.57	44.73	BMO	7573
MYL	Mylan NV	$42.33	33.26	BMO	11743
PCRX	Pacira Pharmaceuticals Inc	$43.90	108.69	BMO	1091
AVGO	Broadcom Ltd	$210.58	29.52	AMC	9588
MNST	Monster Beverage Corp	$43.91	34.50	AMC	2474
SHAK	Shake Shack Inc	$36.61	41.64	AMC	1501

 

Thursday March 2:

Economic: Chain Store Sales, Weekly Jobless Claims – 8:30, Bloomberg Consumer Comfort Index – 9:45, PMI Services Flash – 9:45, EIA Natural Gas Report – 10:30, Money Supply – 4:30PM.

International Economic: Eurozone Unemployment Rate – 5:00AM, Eurozone PPI – 5:00AM, Global Composite PMI – 11:00AM.

Other: Federal Reserve Bank of Cleveland President Loretta Mester participates in a Power Talk event at Barnard College in New York, N.Y., with audience Q&A – 7:00PM

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
BURL	Burlington Stores Inc	$85.39	38.82	BMO	1202
CNQ	Canadian Natural Resource Ltd	$29.40	31.48	BMO	3559
JD	JD.Com Inc(ADR)	$30.61	35.65	BMO	22659
KR	Kroger Co	$32.99	27.51	BMO	6572
ADSK	Autodesk, Inc.	$87.10	42.30	AMC	5291
NTNX	Nutanix Inc	$30.15	77.50	AMC	1812

 

Friday March 3:

Economic: PMI Service Index – 9:45, ISM Non-Manufacturing Index – 10:00, Baker-Hughes Rig Count – 1:00PM.

International Economic: Eurozone Retail Sales – 5:00AM, Global Composite PMI – 11:00AM.

Other: Vice Chairman Stanley Fischer of the Board of Governors of the Federal Reserve System gives keynote speech on this year’s report on inflation expectations and dynamics at Chicago Booth’s 2017 US Monetary Policy Forum in New York City, Chicago Federal Reserve Bank President Charles Evans and Richmond Federal Reserve Bank President Jeffrey Lacker discuss this year’s report on inflation expectations and dynamics at Chicago Booth’s 2017 US Monetary Policy Forum in New York City, with audience Q&A – 10:15AM, Federal Reserve Chair Janet Yellen speaks at the Executives’ Club of Chicago – 1:00PM.

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
BIG	Big Lots, Inc.	$51.35	45.82	BMO	959

 

Monday March 6:

Economic: Gallup US spending Measure – 8:30, Factory Orders – 10:00, TD-Ameritrade IMX – 12:30PM, Durable Goods Orders – 8:30, Dallas Fed Manufacturing Survey – 10:30.

International Economic: No major announcements.

Orders: Minneapolis Federal Reserve Bank President Neel Kashkari speaks at NABE conference in panel titled “A View from the FRB Minneapolis,” in Washington, D.C – 3:00PM.

Earnings:

Symbol	Company Name	Feb 24 Close	IV30	B/A	AVGOPTVOL
CASY	Casey’s General Stores Inc	$116.60	30.08	AMC	958
THO	Thor Industries, Inc.	$110.16	36.21	AMC	848

 

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Frank Fahey: Market News for the Prepared Mind: 2.20-2.27.2017

February 21, 2017

“Imagination decides everything.” – Blaise Pascal

“Chance favors the Prepared Mind.” – Louis Pasteur

“By definition, risk-takers often fail. So do morons. In practice it’s difficult to sort them out.” – Scott Adams

 

The trend continues.  It was another new week of closing highs.  Decent earnings, no major PR explosions from the White House, and optimism about potential tax reform are fueling the rise.  I have been fighting a bronchial malaise, so I will keep it short this week.

Here is an overview of the US market behavior last week and for 2017:

Index	17-Feb	Change	% Weekly	2016 YTD	Volatility of  Index
Dow Jones Industrials (DJIA)	20,624.05	354.78	1.75%	4.36%	11.33% (VXD)
S&P 500 (SPX)	2,351.16	37.91	1.64%	5.04%	11.49% (VIX)
NASDAQ 100 (NDX)	5,324.72	98.03	1.88%	9.48%	NA (VXN)
Russell 2000 (RUT)	1,399.86	11.02	0.79%	3.15%	16.17% (RVX)
S&P 100 (OEX)	1039.23	18.54	1.82%	4.82%	11.27% (VXO)
Crude Oil (CLH7)	53.40	(0.45)	-0.84%	-0.91%	27.49%(OVX)
CBOE Volatility Index (VIX)	11.49	0.64	5.90%	NA

Data Source: OptionVue8

The VIX up this week while the various month VIX futures moved down.   There is an intraday push and pull between SPX at all-time highs and the VIX futures and other short-term volatility indicators.  The difference between the VIX and the RVX (RUT volatility index) collapsed last week.  The previous week the difference was as high as 7.50.  The difference closed last week at 3.68.

Starting February 13, the CBOE is not computing the VXN – the volatility index on the NDX or NASDAQ 100.  The CBOE said it would start calculating the values at a future, as of yet, unannounced, date.  No reasons were given.

Here is an overview of last week for the VIX and related products:

Indexes	Ticker	17-Feb	10-Feb	Change	% Change
CBOE Volatility Index	VIX	11.49	10.85	0.64	5.90%
VIX March Future (3/22/2017)	VXH7	13.125	13.375	(0.25)	-1.87%
VIX April Future (4/19/2017)	VXJ7	14.350	15.125	(0.78)	-5.12%
VIX May Future (5/17/2017)	VXK7	15.150	16.025	(0.87)	-5.46%
CBOE Short-term Volatility Index	VXST	9.03	9.02	0.01	0.11%
CBOE 3 Month Volatility Index	VXV	13.72	13.91	(0.19)	-1.37%
CBOE Mid-term Volatility Index (6 month)	VXMT	15.79	16.17	(0.38)	-2.35%
VIX of VIX	VVIX	81.25	85.77	(4.52)	-5.27%
CBOE SKEW Index	SKEW	141.13	130.47	10.66	8.17%
Long VIX ETP’s
ProShares Ultra VIX Short Term Futures ETF	UVXY	20.25	21.91	(1.66)	-7.58%
iPath S&P 500  VIX Short Term Futures ETN	VXX	17.54	18.21	(0.67)	-3.68%
ProShares VIX Short Term Futures ETF	VIXY	14.65	15.16	(0.51)	-3.36%
iPath S&P 500  VIX Mid-Tem Futures ETN	VXZ	28.49	30.06	(1.57)	-5.22%
Inverse VIX ETP’s
ProShares Short VIX Short Term Future ETF	SVXY	129.05	125.40	3.65	2.91%
Daily Inverse VIX Short Term ETN	XIV	66.54	64.64	1.90	2.94%

Data Source: OptionVue8

The week of February 20 will be a shortened trading week due to President’s Day. Reports will be relased on existing and new home sales, along with the minutes of the Fed’s January meeting.  The week winds up with the final consumer sentiment score for February, one that dipped back noticeably in early February.

The earnings season is starting to wind down. Earnings announcements are predictable volatility events providing trading opportunity.  It is important to reduce the number of surprises which may occur in any trading campaign.    Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy.  The most accurate source of this information is the company’s investor relations website.   The earnings highlights this week, for widely held and actively traded stocks, are Tesla, Fitbit, Jack in the Box, HP, Cheesecake Factory, Trans Ocean, Public Storage, Popeyes, Toll Brothers. Ctrip, Hormel Foods, Baidu, Monster Beverage, Nordstrom, Foot Locker, and Priceline.

I have added a scan of stocks with earnings announcements to the calendar for each day in the coming week.  The scan criteria are:  Closing price> $20, Implied Volatility > 25, Average daily option volume > 800 contracts.    Liquidity, as determined by width of option markets and individual option contract volume, is a crucial component in successfully trading any option strategy.  One of the most frustrating experiences is an inability to adjust or exit a strategy due to lack of liquidity in the market.  The market uncertainty associated with the election has impacted liquidity.  I found it difficult to enter earning trades last week.   The bid/ask spreads seemed much larger than usual.    Do not force trades in illiquid markets.  Data Sources for earnings: Livevol Core and OptionVue8 

 

Advice to stimulate your imagination:

“By definition, risk-takers often fail. So do morons. In practice it’s difficult to sort them out.” – Scott Adams

“In theory there is no difference between theory and practice. In practice there is.” – Yogi Berra

“To make a mistake is only human; to persist in a mistake is idiotic.” -Roman Cicero

“To learn patience is not to rebel against every hardship.” -Henri Nouwen

 

 

Monday February 20: 

US Markets Closed: Holiday – Presidents Day

International Economic:   Germany PPI – 2:00AM, Great Britain Industrial Trends Survery- 600AM, Japan Consumer Confidence Flash – 7:30PM.

 

Tuesday February 21: 

Economic:   PMI Manufacturing Index Flash – 9:45.

International Economic:  China Merchandise Trade – 2:00AM, France CPI – 2:45AM, Germany PMI Composite Flash – 4:00AM, Eurozone PMI Composite Flash.

Other:  Minneapolis Federal Reserve Bank President Neel Kashkari participates in a fireside chat on the economy and the role of the Federal Reserve hosted by the Financial Planning Association of Minnesota in Golden Valley, Minn., with audience Q&A – 8:50AM, Philadelphia Federal Reserve Bank President Patrick Harker speaks on the economic outlook at the University of Pennsylvania in Philadelphia, with audience and media Q&A – 12:00PM, San Francisco Federal Reserve Bank President John Williams speaks to students of Boise State University on “Getting to Know the Fed,” in Boise, Id. with audience Q&A – 3:30PM.

Earnings:

Symbol	Company Name	Feb 17 Close	IV30	B/A	AVGOPTVOL
BHP	BHP Billiton Limited (ADR)	$40.99	30.30	BMO	4211
HAIN	Hain Celestial Group Inc	$34.46	35.75	AMC	4064

 

Wednesday February 22:

Economic:  MBA Mortgage Applications – 7:00, Redbook – 8:55, Existing Home Sales – 10:00., Industrial Production – 9:15, Atlanta Fed Business Inflation Expectations = 10:00, Housing Market Index – 10:00, EIA Petroleum Status Report – 10:30.

International Economic:  Great Britain GDP – 4:30AM, Eurozone HICP – 5:00AM.

Other:  FOMC minutes – 2:00.

Earnings:

Symbol	Company Name	Feb 17 Close	IV30	B/A	AVGOPTVOL
BHP	BHP Billiton Limited (ADR)	$40.99	30.30	BMO	4211
HAIN	Hain Celestial Group Inc	$34.46	35.75	AMC	4064

 

Thursday February 23:

Economic:  Weekly Jobless Claims – 8:30, Chicago Fed National Activity Index – 8:30, FHFA House Price Index – 9:00, Bloomberg Consumer Comfort Index – 9:45, PMI Services Flash – 9:45, EIA Natural Gas Report – 10:30, Kansas City Fed Manufacturing Index – 11:00, EIA Petroleum Status Report – 11:00, Money Supply – 4:30PM.

International Economic:  Germany GDP 2:00AM, Great Britain CBI Distributive Trades – 6:00AM.

Other:  Atlanta Federal Reserve Bank President Dennis Lockhart speaks on the past 10 years at the Atlanta Federal Reserve in Atlanta, GA – 8:35AM.

Earnings:

Symbol	Company Name	Feb 17 Close	IV30	B/A	AVGOPTVOL
CLR	Continental Resources, Inc.	$46.01	37.67	BMO	4162
CLVS	Clovis Oncology Inc	$61.37	71.23	BMO	2927
DISH	DISH Network Corp	$62.72	36.49	BMO	4082
ETP	Energy Transfer Partners LP	$38.38	31.48	BMO	5623
GRMN	Garmin Ltd.	$50.95	32.25	BMO	1234
HFC	HollyFrontier Corp	$30.00	36.21	BMO	2206
MBLY	Mobileye NV	$44.97	43.63	BMO	11285
MDCO	The Medicines Company	$52.80	76.55	BMO	1504
SBGI	Sinclair Broadcast Group Inc	$36.30	34.05	BMO	1005
SLCA	U.S. Silica Holdings Inc	$57.36	48.47	BMO	1758
SXL	Sunoco Logistics Partners L.P.	$25.81	30.48	BMO	1864
TOL	Toll Brothers Inc	$31.43	28.49	BMO	3168
WB	Weibo Corp (ADR)	$55.26	51.04	BMO	2422
BLUE	bluebird bio Inc	$76.55	63.39	AMC	1120
CTRP	Ctrip.Com International Ltd	$45.51	34.94	AMC	6431
JACK	Jack in the Box Inc.	$109.30	35.94	AMC	834
LB	L Brands Inc	$57.48	29.80	AMC	3446
MTDR	Matador Resources Co	$26.86	45.28	AMC	1749
RH	RH	$27.18	60.99	AMC	7408
RRC	Range Resources Corp.	$31.24	42.61	AMC	5549
SINA	SINA Corp	$76.38	46.03	AMC	1099
SM	SM Energy Co	$27.11	57.20	AMC	1669
SUN	Sunoco LP	$28.51	41.24	AMC	3082
TSLA	Tesla Inc	$268.95	42.38	AMC	91894

 

Friday February 24:

Economic:  New Home Sales – 10:00, Consumer Sentiment – 10:00, Baker-Hughes Rig count – 1:00PM.

International Economic:  No major announcements

Earnings:

Symbol	Company Name	Feb 17 Close	IV30	B/A	AVGOPTVOL
APA	Apache Corporation	$55.25	27.74	BMO	9813
CRZO	Carrizo Oil & Gas Inc	$33.37	40.34	BMO	892
HRL	Hormel Foods Corp	$37.24	27.43	BMO	997
KSS	Kohl’s Corporation	$41.53	46.96	BMO	4982
PTLA	Portola Pharmaceuticals Inc	$30.27	63.84	BMO	815
WUBA	58.com Inc (ADR)	$33.70	52.41	BMO	3973
ACIA	Acacia Communications, Inc.	$64.19	72.17	AMC	3165
BIDU	Baidu Inc (ADR)	$184.94	30.50	AMC	14476
BMRN	BioMarin Pharmaceutical Inc.	$90.53	35.40	AMC	916
CBI	Chicago Bridge & Iron Company N.	$35.77	39.97	AMC	3511
HLF	Herbalife Ltd.	$61.06	44.82	AMC	10874
ICPT	Intercept Pharmaceuticals Inc	$129.85	57.64	AMC	1059
IDCC	InterDigital, Inc.	$99.95	39.83	AMC	965
JWN	Nordstrom, Inc.	$44.18	52.00	AMC	7240
MNST	Monster Beverage Corp	$43.45	33.22	AMC	2598
OLED	Universal Display Corporation	$71.30	58.10	AMC	1027
PE	Parsley Energy Inc	$31.86	38.03	AMC	886
SEMG	SemGroup Corp	$39.90	37.75	AMC	1410
SPLK	Splunk Inc	$62.86	43.26	AMC	3003
W	Wayfair Inc	$40.17	64.16	AMC	1266
SAGE	SAGE Therapeutics Inc	$62.75	94.51		915

 

Monday February 27:

Economic:  Durable Goods Orders – 8:30, Dallas Fed Manufacturing Survey – 10:30

International Economic:  Japan Industrial Production and Retail Trade – 6:50PM.

Earnings:

Symbol	Company Name	Feb 17 Close	IV30	B/A	AVGOPTVOL
FL	Foot Locker, Inc.	$70.50	31.99	AMC	2143

 

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Frank Fahey: Market News for the Prepared Mind: 2.13-2.21.2017

February 13, 2017

“I love to talk about nothing. It’s the only thing I know anything about.”
― Oscar Wilde

“Imagination decides everything.” – Blaise Pascal

“The two most powerful warriors are patience and time.” – Leo Tolstoy

“Chance favors the Prepared Mind.” – Louis Pasteur

As of Fridays close, the S&P 500 had gone for 39 consecutive trading sessions without an intra-day move greater than 1%. This is the longest streak in history. The past few trading weeks summed up by the world’s oldest rock star, Tuli Kupferberg. in the Fug’s classic “Nothing.”

Monday, nothing
Tuesday, nothing
Wednesday and Thursday, nothing
Friday, for a change, a little more nothing
Saturday, once more, nothing
Sunday, nothing
Monday, nothing
Tuesday and Wednesday, nothing
Thursday, for a change, a little more nothing
Friday, once more, nothing.

The march of time may inexorable, but the market will not remain range bound. Patience is required by a trader waiting for something to occur in the markets. My first responsibility goal, as a trader, is to make sure I am not financially hurt by the next move in the market. Short term risk is the foundation for my position risk exposure. Success is not imperative on one’s ability to buy a bottom or sell a top.

Here is an overview of the US market behavior last week and for 2017:

Index	10-Feb	Change	% Weekly	2016 YTD	Volatility of Index
Dow Jones Industrials (DJIA)	20,269.27	197.81	0.99%	2.56%	10.98% (VXD)
S&P 500 (SPX)	2,313.25	15.83	0.69%	3.35%	10.85% (VIX)
NASDAQ 100 (NDX)	5,226.69	65.09	1.26%	7.47%	12.31% (VXN)
Russell 2000 (RUT)	1,388.84	11.00	0.80%	2.34%	17.91% (RVX)
S&P 100 (OEX)	1020.69	7.00	0.69%	2.95%	10.41% (VXO)
Crude Oil (CLH7)	53.85	0.00	0.00%	-0.07%	26.43%(OVX)
CBOE Volatility Index (VIX)	10.85	(0.12)	-1.09%	NA

Data Source: OptionVue8

The VIX is, also, part of the nothing movement in the markets. The price of the VIX reflects a market which has been extraordinarily quiet. The VIX and associated products have shown minimally lower volatility levels as the SPX moved up this week. The VIX has closed under 12 for 16 days. The VIX is at a significant support level. The major topic of conversation among traders is the question Chubby Checker asked in Limbo Rock; “How low can you go?” I have seen at-the- money index implied volatility with an “8” handle and as high as the 170’s. It should be noted that I saw both of these levels in the same year – 1987.

Trading activity in the VIX options pit has been divided between trades providing portfolio insurance and speculative risk reversals. The risk reversals have seen the purchase of call verticals which are financed through the sale of out-of-the money puts. CBOE TV airs several daily reports from the VIX pit. These reports are valuable in getting a flavor of the daily VIX trade – options and futures.

Here is an overview of last week for the VIX and related products:

Indexes	Ticker	10-Feb	3-Feb	Change	% Change
CBOE Volatility Index	VIX	10.85	10.97	(0.12)	-1.09%
VIX February Future (2/15/2017)	VXG7	11.725	12.475	(0.75)	-6.01%
VIX March Future (3/22/2017)	VXH7	13.375	13.925	(0.55)	-3.95%
VIX April Future (4/19/2017)	VXJ7	15.125	15.225	(0.10)	-0.66%
VIX May Future (5/17/2017)	VXK7	16.025	16.025	0.00	0.00%
CBOE Short-term Volatility Index	VXST	9.02	9.19	(0.17)	-1.85%
CBOE 3 Month Volatility Index	VXV	13.91	14.05	(0.14)	-1.00%
CBOE Mid-term Volatility Index (6 month)	VXMT	16.17	16.27	(0.10)	-0.61%
VIX of VIX	VVIX	85.77	88.97	(3.20)	-3.60%
CBOE SKEW Index	SKEW	130.47	133.25	(2.78)	-2.09%
Long VIX ETP’s
ProShares Ultra VIX Short Term Futures ETF	UVXY	21.91	23.53	(1.62)	-6.88%
iPath S&P 500 VIX Short Term Futures ETN	VXX	18.21	18.82	(0.61)	-3.24%
ProShares VIX Short Term Futures ETF	VIXY	15.16	15.69	(0.53)	-3.38%
iPath S&P 500 VIX Mid-Tem Futures ETN	VXZ	30.06	30.06	0.00	0.00%
Inverse VIX ETP’s
ProShares Short VIX Short Term Future ETF	SVXY	125.40	121.36	4.04	3.33%
Daily Inverse VIX Short Term ETN	XIV	64.64	62.69	1.95	3.11%

Data Source: OptionVue8

It will be a very heavy week for economic news. The week starts with Janet Yellen’s semi-annual testimony before the Senate Banking Committee followed on Wednesday by her testimony before the House Financial Services Committee. Yellen’s testimony has the potential to break the streak of no daily 1% moves in the SPX. Reports on retail sales, consumer prices and industrial production will be released on Wednesday. Thursday’s highlight will be release of Housing Starts and the Philadelphia Fed Business Outlook Survey. The number in this regional manufacturing survey will be correlated and compared against Wednesday’s Industrial Production report.

The earnings season is starting to wind down. Earnings announcements are predictable volatility events providing trading opportunity. It is important to reduce the number of surprise which may occur in any trading campaign. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website. The earnings highlights this week, for widely held and actively traded stocks, are Teva Pharmaceutical, Noble Energy, Restaurants International, Scorpio Tankers, Rent-A-Center, and Flowers Foods.

I have added a scan of stocks with earnings announcements to the calendar for each day in the coming week. The scan criteria are: Closing price> $20, Implied Volatility > 25, Average daily option volume > 800 contracts. Liquidity, as determined by width of option markets and individual option contract volume, is a crucial component in successfully trading any option strategy. One of the most frustrating experiences is an inability to adjust or exit a strategy due to lack of liquidity in the market. The market uncertainty associated with the election has impacted liquidity. I found it difficult to enter earning trades last week. The bid/ask spreads seemed much larger than usual. Do not force trades in illiquid markets. Data Sources for earnings: Livevol Core and OptionVue8

Advice to stimulate your imagination:

“A lot of my work is a matter of reacting to surprises in life.” – Alexander Wang

” Patience is necessary, and one cannot reap immediately where one has sown.” – Soren Kierkegaard

“To learn patience is not to rebel against every hardship.” – Henri Nouwen

Monday February 13:

Economic: No major Announcements.

International Economic: Japan GDP – 6:50PM Sunday, China CPI and PPI – 8:30PM.

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
NBL	Noble Energy, Inc.	$38.39	26.97	BMO	1944
TEVA	Teva Pharmaceutical	$32.25	36.73	BMO	28401
CSOD	Cornerstone OnDemand, Inc.	$41.55	50.79	AMC	1627

Tuesday February 14:

Last day of Trading for February VIX Futures and Options.

Economic: NFIB Small Business Optimism Index – 6:00, PPI-FD – 8:30, Producer Price Index – 8:30, Redbook – 8:55

International Economic: Germany CPI – 2:00AM, Germany GDP Flash – 2:00AM, Great Britain CPI & PPI – 5:00AM, Eurozone GDP Flash – 5:00AM, Eurozone Industrial Production – 5:00AM.

Other: Richmond Federal Reserve Bank President Jeffrey Lacker speaks at the University of Delaware 2017 Economic Forecast conference in Newark, Del., with media & audience Q&A – 8:50AM, Federal Reserve Chair Janet Yellen will give her semiannual monetary policy testimony before the Senate Banking Committee – 10:00AM, Atlanta Federal Reserve Bank President Dennis Lockhart speaks at Huntsville Rotary Club regarding crisis, recession, and recovery in Huntsville, Ala., with media and audience Q&A – 12:50PM, Dallas Federal Reserve Bank President Robert Kaplan participates in a panel discussion at the Greater Houston Port Bureau luncheon in Houston, Texas, with audience and media Q&A – 1:00PM,.

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
A	Agilent Technologies Inc	$50.47	25.05	BMO	1215
DISCA	Discovery Communications	$27.96	31.26	BMO	1173
DVN	Devon Energy Corp	$44.75	32.70	BMO	11012
INCY	Incyte Corporation	$122.96	43.99	BMO	1367
MLM	Martin Marietta Materials, Inc.	$225.32	30.69	BMO	1108
TMUS	T-Mobile Us Inc	$62.25	36.44	BMO	9410
ESRX	Express Scripts Holding Co	$67.48	27.04	AMC	9698

Wednesday February 15:

Economic: MBA Mortgage Applications – 7:00, Consumer Price Index (CPI) – 8:30, Retail Sales – 8:30, Empire State Manufacturing Survey – 8:30, Industrial Production – 9:15, Atlanta Fed Business Inflation Expectations = 10:00, Housing Market Index – 10:00, EIA Petroleum Status Report – 10:30.

International Economic: Great Britain Labour Report – 4:30AM, Eurozone Merchandise Trade – 5:00AM.

Other: Federal Reserve Chair Janet Yellen will give her semiannual monetary policy testimony before the House Financial Services Committee – 10:00, Boston Federal Reserve Bank President Eric Rosengren gives keynote speech at New York Association Economics Luncheon at the Harvard Club in NYC – 12:00PM, Philadelphia Federal Reserve President Patrick Harker speaks on the economic outlook at La Salle University 16th Annual Economic Outlook in Pa., with media and audience Q&A – 12:45PM.

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
BG	Bunge Ltd	$68.57	31.32	BMO	1137
CC	Chemours Co	$27.59	54.32	BMO	2459
MDCO	The Medicines Company	$48.75	68.45	BMO	1663
SHOP	Shopify Inc	$54.61	51.82	BMO	1088
TRGP	Targa Resources Corp	$59.31	31.60	BMO	1486
WMB	Williams Companies Inc	$28.67	30.04	BMO	6183
WYN	Wyndham Worldwide	$81.65	27.07	BMO	1036
ADI	Analog Devices, Inc.	$76.51	25.10	AMC	810
AEM	Agnico Eagle Mines Ltd (USA)	$50.20	39.39	AMC	4020
AMAT	Applied Materials, Inc.	$35.41	29.42	AMC	12083
CAR	Avis Budget Group Inc.	$37.41	53.08	AMC	2641
CF	CF Industries Holdings, Inc.	$34.49	42.68	AMC	11251
LBTYA	Liberty Global PLC	$35.19	30.77	AMC	1276
NTAP	NetApp Inc.	$39.31	37.47	AMC	3836
NTES	NetEase Inc (ADR)	$257.56	37.91	AMC	3552
TRIP	Tripadvisor Inc	$52.51	46.61	AMC	2967

Thursday February 16:

Economic: Housing Starts – 8:30, Weekly Jobless Claims – 8:30, Philadelphia Fed Business Outlook Survey – 8:30, Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Report – 10:30, Money Supply – 4:30PM.

International Economic: No major announcements

Other: European Central Bank Minutes (ECB) – 7:30AM.

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
ALXN	Alexion Pharmaceuticals, Inc.	$127.08	39.38	BMO	5807
CAB	Cabelas Inc	$50.24	39.61	BMO	1058
CHTR	Charter Communications Inc	$325.07	28.39	BMO	2991
MGM	MGM Resorts International	$28.62	28.32	BMO	19619
PRGO	Perrigo Company PLC	$79.44	42.08	BMO	2179
REGN	Regeneron Pharmaceuticals	$360.00	30.85	BMO	4194
SHPG	Shire PLC (ADR)	$171.82	26.95	BMO	997
ANET	Arista Networks Inc	$97.81	38.54	AMC	1095
TPX	Tempur Sealy International Inc	$45.75	55.02	AMC	3115
TRN	Trinity Industries Inc	$27.85	41.51	AMC	1430
WBMD	WebMD Health Corp.	$50.65	34.24	AMC	4529

Friday February 17:

Economic: E-Commerce Retail Sales, Leading Indicators – 10:00, Baker-Hughes Rig count – 1:00PM.

International Economic: Great Britain Retail Sales – 4:30AM

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
VFC	VF Corp	$49.47	30.89	BMO	3438
FLR	Fluor Corporation (NEW)	$55.37	27.55	AMC	1149

Monday February 20:

US Markets Closed: Holiday – Presidents Day

International Economic: Germany PPI – 2:00AM, Great Britain Industrial Trends Survery- 600AM, Japan Consumer Confidence Flash – 7:30PM.

Tuesday February 21:

Economic: PMI Manufacturing Index Flash – 9:45.

International Economic: France CPI – 2:45AM, Germany PMI Composite Flash – 4:00AM, Eurozone PMI Composite Flash,

Earnings:

Symbol	Company Name	Feb 10 Close	IV30	B/A	AVGOPTVOL
AER	AerCap Holdings N.V.	$45.94	26.12	BMO	925
DDS	Dillard’s, Inc.	$57.29	44.79	BMO	941
DISH	DISH Network Corp	$61.07	36.54	BMO	4076
M	Macy’s Inc	$32.37	49.23	BMO	23821
NEM	Newmont Mining Corp	$37.20	36.02	BMO	21471
XPO	XPO Logistics Inc	$45.43	45.69	BMO	2225
AAP	Advance Auto Parts, Inc.	$164.83	31.32	AMC	2077
CXO	Concho Resources Inc	$139.86	29.44	AMC	906
NFX	Newfield Exploration Co.	$40.91	37.08	AMC	2023
TEX	Terex Corporation	$31.32	39.66	AMC	1327

 

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Frank Fahey: Market News for the Prepared Mind: 2.6-2.13.2017

February 6, 2017

‘A Scout is never taken by surprise; he knows exactly what to do when anything unexpected happens.” Robert Baden-Powell

“Imagination decides everything.” – Blaise Pascal

“Every noble acquisition is attended with its risks; he who fears to encounter the one must not expect to obtain the other.” – Pietro Metastasio

“Chance favors the Prepared Mind.” – Louis Pasteur

Major indexes hovered around unchanged at the end of Friday’s trade. The closing prices for the week did not reflect the market’s defensive posture prior to Friday. The indexes responded negatively to President Trump’s bellicose trade talk, while showing no response to Wednesday’s FOMC announcement. The percentage change for the major indexes from the Friday recovery are as follows: DJIA + 0.94%, SPX +0.58%, NDX +0.27%, RUT +1.50%, and the OEX + 0.75%.

Friday’s rally was the result of stronger than expected job growth and President Trump’s announcement he was going to investigate a roll back of Dodd-Frank regulations. The market is starting to show interday and intraday movement. The movement is generally in response to unscheduled Presidential Executive Orders, ruminations, and tweets. These responses to President Trump’s declaration are viewed by many of increased future market volatility.

Here is an overview of the US market behavior last week and for 2017:

Index	3-Feb	Change	% Weekly	2016 YTD	Volatility of Index
Dow Jones Industrials (DJIA)	20,071.46	(22.32)	-0.11%	1.56%	11.36% (VXD)
S&P 500 (SPX)	2,297.42	2.73	0.12%	2.64%	10.97% (VIX)
NASDAQ 100 (NDX)	5,161.60	(6.40)	-0.12%	6.13%	12.78% (VXN)
Russell 2000 (RUT)	1,377.84	7.14	0.52%	1.53%	17.06% (RVX)
S&P 100 (OEX)	1013.69	0.76	0.08%	2.25%	10.14% (VXO)
Crude Oil (CLH7)	53.85	0.65	1.22%	-0.07%	28.11%(OVX)
CBOE Volatility Index (VIX)	10.97	0.39	3.69%	NA

Data Source: OptionVue8

The VIX remains under pressure. The VIX and associated products showed minimally lower volatility levels for the week. The volatility levels were significantly higher before Friday’s market rally. On Friday, the VIX was down 0.96 or just over 8%, The VIX still appears to be planted in a new. lower trading range. Puts in the S&P 500 continue to trade at historically low levels.

A review of Livevol Pro time and sales uncovered a large VIX calendar spread trading at the end of day on Thursday. The spread was 135,000 contracts. The diagonal calendar spread included the purchase of one monthly March 17C against the sale of one monthly April 21C. The price of the trade for the initiator was a 0.08 debit – March purchased @ 1.14 and April sold @ 1.06.

Two different future contracts are the underlyings for these contracts. At the time of the trade, the spread between the March future (VXH7) and the April futures contract (VXJ7) was approximately 1.30 points. This trade benefits in a run up in the price of the VIX.

Here is an overview of last week for the VIX and related products:

Indexes	Ticker	3-Feb	27-Jan	Change	% Change
CBOE Volatility Index	VIX	10.97	10.58	0.39	3.69%
VIX February Future (2/15/2017)	VXG7	12.475	12.525	(0.05)	-0.40%
VIX March Future (3/22/2017)	VXH7	13.925	14.125	(0.20)	-1.42%
VIX April Future (4/19/2017)	VXJ7	15.225	15.425	(0.20)	-1.30%
CBOE Short-term Volatility Index	VXST	9.19	9.36	(0.17)	-1.82%
CBOE 3 Month Volatility Index	VXV	14.05	13.68	0.37	2.70%
CBOE Mid-term Volatility Index (6 month)	VXMT	16.27	16.21	0.06	0.37%
VIX of VIX	VVIX	88.97	83.63	5.34	6.39%
CBOE SKEW Index	SKEW	133.25	129.95	3.30	2.54%
Long VIX ETP’s
ProShares Ultra VIX Short Term Futures ETF	UVXY	23.53	23.83	(0.30)	-1.26%
iPath S&P 500 VIX Short Term Futures ETN	VXX	18.82	18.97	(0.15)	-0.79%
ProShares VIX Short Term Futures ETF	VIXY	15.69	15.83	(0.14)	-0.88%
iPath S&P 500 VIX Mid-Tem Futures ETN	VXZ	30.06	30.56	(0.50)	-1.64%
Inverse VIX ETP’s
ProShares Short VIX Short Term Future ETF	SVXY	121.36	120.74	0.62	0.51%
Daily Inverse VIX Short Term ETN	XIV	62.69	62.33	0.36	0.58%

Data Source: OptionVue8

The impact of potential executive orders will continue to overshadow a soft week for economic reports. The major reports being released is International Trade before Tuesday’s market open. The other domestic reports released this week elicit yawns for most market observers. Economic reports from Asia and Europe will focus on merchandise trade and industrial production.

The earnings season continues in full force despite earnings announcements from over 67% of S&P 500 companies. Earnings announcements are predictable volatility events providing trading opportunity. It is important to reduce the number of surprise which may occur in any trading campaign. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website.

The earnings highlights this week, for widely held and actively traded stocks, are Hasbro, Randgold Resources, Tyson Foods, Michael Kors, General Motors, Buffalo Wild Wings, Panera Bread, Zillow, Humana, Prudential Financial, Whole Foods Market, Cummins, Kellogg, Dunkin Brands, Regeneron, Expedia, NVIDIA, Verisign and Yelp.

I have added a scan of stocks with earnings announcements to the calendar for each day in the coming week. The scan criteria are: Closing price> $20, Implied Volatility > 25, Average daily option volume > 800 contracts. Liquidity, as determined by width of option markets and individual option contract volume, is a crucial component in successfully trading any option strategy. One of the most frustrating experiences is an inability to adjust or exit a strategy due to lack of liquidity in the market. The market uncertainty associated with the election has impacted liquidity. I found it difficult to enter earning trades last week. The bid/ask spreads seemed much larger than usual. Do not force trades in illiquid markets. Data Sources for earnings: Livevol Core and OptionVue8

Advice to stimulate your imagination:

“A lot of my work is a matter of reacting to surprises in life.” – Alexander Wang

“A life spent making mistakes is not only more honorable but more useful than a life spent in doing nothing.” – George Bernard Shaw “It is an endless procession of surprises. The expected rarely occurs and never in the expected manner.” – Vernon A. Walters

Monday, February 6:

Economic: Gallup US Consumer Spending Measure – 8:30, Labor Market Conditions Index – 10:00, TD Ameritrade IMX – 12:30.

International Economic: Germany Manufacturers’ Orders – 2:00AM.

Other: Philadelphia Federal Reserve Bank President Patrick T. Harker discusses Fintech opportunities at Kona Kai Resort in San Diego, Calif – 4:30PM.

Earnings:

Symbol	Company Name	Feb 3 Close	IV30	B/A	AVGOPTVOL
GOLD	Randgold Resources Ltd.	$85.73	38.89	BMO	1587
HAS	Hasbro, Inc.	$82.44	30.90	BMO	1116
NOV	National-Oilwell Varco, Inc.	$37.80	35.70	BMO	3257
NWL	Newell Brands Inc	$47.81	32.26	BMO	1830
SYY	SYSCO Corporation	$52.38	25.94	BMO	1850
TSN	Tyson Foods, Inc.	$65.18	31.90	BMO	4462
FOXA	Twenty-First Century Fox Inc	$31.46	26.49	AMC	3097
HAIN	Hain Celestial Group Inc	$39.35	38.55	AMC	4279
TSO	Tesoro Corporation	$82.51	31.00	AMC	8506

Tuesday, February 7:

Economic: International Trade – 8:30, Gallup US ECI – 8:30, Redbook – 8:55, JOLTS – 10:00.

International Economic: Germany Industrial Production – 2:00AM, French Merchandise Trade – 2:00.

Other: St. Louis Federal Reserve Bank President Bullard speaks about U.S. economy and monetary policy at financial forum at Washington University in St. Louis, MO., with audience and media Q&A – 9:10AM,

Earnings:

Symbol	Company Name	Feb 3 Close	IV30	B/A	AVGOPTVOL
AGCO	AGCO Corporation	$62.40	28.71	BMO	825
ALR	Alere Inc	$38.23	45.14	BMO	3562
CAH	Cardinal Health Inc	$74.44	26.21	BMO	1114
CNC	Centene Corp	$64.01	37.48	BMO	1028
GM	General Motors Company	$35.73	27.19	BMO	57589
GWPH	GW Pharmaceuticals PLC	$115.30	40.00	BMO	1899
KORS	Michael Kors Holdings Ltd	$40.89	45.67	BMO	7437
MNK	Mallinckrodt PLC	$49.70	56.88	BMO	4159
TDG	TransDigm Group	$221.77	38.80	BMO	908
AKAM	Akamai Technologies, Inc.	$69.40	47.98	AMC	3573
BWLD	Buffalo Wild Wings	$149.25	42.71	AMC	910
GILD	Gilead Sciences, Inc.	$72.25	26.34	AMC	45533
LITE	Lumentum Holdings Inc	$37.85	53.28	AMC	994
MCHP	Microchip Technology Inc.	$68.78	28.71	AMC	802
MDLZ	Mondelez International Inc	$44.01	28.96	AMC	22849
MOS	Mosaic Co	$31.45	35.95	AMC	9676
PAA	Plains All American Pipeline	$31.98	31.62	AMC	5313
PNRA	Panera Bread Co	$211.22	30.34	AMC	1288
PXD	Pioneer Natural Resources	$183.46	28.19	AMC	3248
TTWO	Take Two Interactive Software	$54.80	40.09	AMC	926
TWLO	Twilio Inc	$30.10	65.38	AMC	12220
VMC	Vulcan Materials Company	$128.01	31.16	AMC	1314
Z	Zillow Group, Inc. Class C	$35.35	44.16	AMC	3116

Economic: MBA Mortgage Applications – 7:00, EIA Petroleum Status Report – 10:30.

International Economic: Japan Machine Orders – 6:50PM.

Earnings:

Symbol	Company Name	Feb 3 Close	IV30	B/A	AVGOPTVOL
AGN	Allergan plc	$229.52	29.89	BMO	18985
ALK	Alaska Air Group, Inc.	$94.53	30.65	BMO	1022
CTL	Centurylink Inc	$25.26	30.11	BMO	5346
GT	Goodyear Tire & Rubber Co	$32.07	32.60	BMO	2001
HUM	Humana Inc	$199.39	28.16	BMO	12121
ALNY	Alnylam Pharmaceuticals, Inc.	$41.46	60.76	AMC	1038
CXW	Corecivic Inc	$29.27	41.39	AMC	2483
GRUB	GrubHub Inc	$41.38	57.22	AMC	1265
PRU	Prudential Financial Inc	$104.43	31.78	AMC	4589
RIO	Rio Tinto plc (ADR)	$44.61	37.43	AMC	5472
WFM	Whole Foods Market, Inc.	$29.66	32.24	AMC	12019

Thursday, February 9:

Economic: Weekly Jobless Claims – 8:30, Bloomberg Consumer Comfort Index – 9:45, Wholesale Trade 10:00, EIA Natural Gas Report – 10:30, Money Supply – 4:30PM.

International Economic: China Merchandise Trade Balance, Germany Merchandise Trade – 2:00AM, Japan PPI – 6:50PM.

Other: St. Louis Federal Reserve Bank President Bullard speaks about U.S. economy and monetary policy at financial forum at Washington University in St. Louis, MO., with audience and media Q&A – 9:10AM, Chicago Federal Reserve Bank President Charles Evans speaks about current economic conditions or monetary policy at the CFA Society of Chicago Distinguished Speakers Series event in Chicago, Ill., with audience and media Q&A – 10:00PM.

Earnings:

Symbol	Company Name	Feb 3 Close	IV30	B/A	AVGOPTVOL
BWA	BorgWarner Inc.	$40.47	33.08	DMT	966
CMI	Cummins Inc.	$146.33	26.27	BMO	4013
DNKN	Dunkin Brands Group Inc	$50.81	28.70	BMO	2270
K	Kellogg Company	$72.77	25.35	BMO	2033
NLSN	Nielsen Holdings PLC	$41.65	29.45	BMO	1116
PTEN	Patterson-UTI Energy, Inc.	$27.75	39.18	BMO	1449
REGN	Regeneron Pharmaceuticals	$360.56	38.82	BMO	4082
ZAYO	Zayo Group Holdings Inc	$31.58	35.19	BMO	1340
ACIA	Acacia Communications, Inc.	$57.34	62.28	AMC	3055
ATVI	Activision Blizzard, Inc.	$40.47	33.83	AMC	16529
CERN	Cerner Corporation	$53.62	35.92	AMC	2576
EXPE	Expedia Inc	$120.59	34.09	AMC	6185
MAS	Masco Corp	$33.00	31.44	AMC	854
NBIX	Neurocrine Biosciences, Inc.	$42.15	66.04	AMC	808
NVDA	NVIDIA Corporation	$115.39	52.73	AMC	94251
UBNT	Ubiquiti Networks Inc	$62.73	51.57	AMC	808
VIAB	Viacom, Inc.	$41.58	33.43	AMC	5455
VRSN	Verisign, Inc.	$81.70	29.95	AMC	1359
YELP	Yelp Inc	$42.62	54.13	AMC	4649

International Economic: France Industrial Production 2:45AM, Great Britain Industrial Production – 4:30AM, Great Britain Merchandise Trade – 4:30AM.

Other: Vice Chairman of the Federal Reserve Stanley Fischer speaks at Warwick Economics Summit on Saturday February 11 in Coventry, United Kingdom, with audience Q&A – 7:30AM.

Earnings: None meeting scan criteria.

Monday, February 13: