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Overall volume in the index market was light Monday, but the CBOE Volatility Index (.VIX) saw a bit more volume than usual. The volatility index edged up .40 to 22.14 in cautious trading ahead of an interest rate announcement from the Federal Reserve tomorrow afternoon.
In VIX options, the top trades of the day included a combination where an investor apparently bought 13,230 October 30 calls at $3.30 and sold 13,230 October 30 puts at $4.10.
This combo creates a bearish position similar to holding a short position in VIX futures. About 184,000 VIX calls and 111,000 VIX puts traded total, or nearly double the recent average daily volume.

Tags: Federal Reserve announcement, rate change, VIX Index Trading

08Aug

The IBD 100 Top Ten for the week of August 9

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NFLX, BIDU, MELI, PCLN, IDSA, PPO, FFIV, VMW, DECK, HMIN, LULU, VIT — The IBD 100 Top Ten for the week of August 9

Tags: bidu, DECK, FFIV, HMIN, IDSA, LULU, MELI, NFLX, PCLN, PPO, The IBD 100 Top Ten for the week of August 9, VIT, VMW

30Jul

Recovery Loses Speed As Consumers Turn Cautious

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Recovery Loses Speed As Consumers Turn Cautious
The economic recovery lost momentum in the second quarter as growth slowed to a
2.4 percent pace, its most sluggish showing in nearly a year.

Tags: Recovery Loses Speed As Consumers Turn Cautious

29Jul

Economists see tepid recovery deep into 2011

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Economists see tepid recovery deep into 2011
The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists.

The latest quarterly AP Economy Survey shows economists have turned gloomier in the past three months. They foresee weaker growth and higher unemployment than they did before. As a result, the economists think the Federal Reserve will keep interest rates near zero until at least next spring.

Yet despite their expectation of slower growth, a majority of the 42 economists surveyed believe the recovery remains on track, raising hopes that the economy can avoid falling back into a “double-dip” recession.

The AP survey compiles forecasts of leading private, corporate and academic economists on a range of indicators, including employment, consumer spending and inflation. Among their forecasts:

•Economic growth the rest of this year and early next year will weaken, to less than 3 percent. From January through May, the economy grew at roughly a 3.5 percent pace.
•The unemployment rate will be no lower at the end of the year than it is now — 9.5 percent. A majority think it will be 2015 or later before the rate falls to a historically normal 5 percent.
•State budget shortfalls pose a “significant” or “severe” risk to the national economy. The loss of tax revenue has forced state and local governments to cut services and lay off workers.
The weak economy leaves Democrats and Republicans on Capitol Hill vulnerable as they head into the November midterm elections. Democrats, who now control both chambers, have the most to lose. The gloomier outlook is also a liability for President Barack Obama.

The economists have turned more pessimistic since the recovery hit turbulence in May. Europe’s debt crisis sent tremors through Wall Street, causing stocks to tumble and raising doubts about the durability of the rebound.
Since then, businesses have been slow to step up hiring. Americans’ confidence in the economy has declined, leading shoppers to reduce spending. And the housing market has weakened further with the end of a homebuyer tax credit that had buoyed sales earlier this year.

Consumers aren’t leading this rebound, as they usually do, despite ultra-low borrowing costs. Their spending growth will weaken in the second half of this year and strengthen only slightly next year, a majority of economists said. They think shoppers’ reluctance to spend more money poses a “significant” or “severe” risk to the recovery.

“It seems like we hit an air pocket in consumer spending,” said survey participant Richard DeKaser, president of Woodley Park Research.

Kasey Doshier, a graphic designer in Chicago, said the recession taught her to rein in her spending. The key moment came early last year, when her employer cut her pay 15 percent to avoid layoffs.

“I just lived paycheck to paycheck and had a good time,” said Doshier, 32. “It’s kind of scary to think that I am a paycheck away from being homeless.”

Doshier’s pay has been reinstated, but she’s still watching her money. Dinner and drinks with friends are gone. Now she goes to free street festivals and the city pool. She explores Chicago neighborhoods by taking her dog on long “adventure walks.”

The tight job market, scant pay raises and drooping home values are forcing others, too, to spend less and save more. Americans saved 4.2 percent of their disposable income last year. That was the highest level since 1998. Economists expect roughly the same level of saving this year and next.

That’s why growth of less than 3 percent is forecast into 2011. And weak growth helps explain why unemployment is likely to stay high. It takes about 3 percent growth just to create enough jobs to keep pace with the population increase.

Growth would have to equal 5 percent for a full year to drive the unemployment rate down by 1 percentage point. Neither the economists in the AP survey nor the Obama administration expects that to happen.

The Fed’s outlook has turned bleaker, too. It’s why Chairman Ben Bernanke and his colleagues are weighing new steps to invigorate the economy if the recovery shows signs of backsliding. They are also expected to hold interest rates at record lows longer than economists thought three months ago.

A survey the Fed released Wednesday showed the economy facing a bumpy path back to health. The pace of economic activity remained modest in most of the country.

Most economists surveyed said the Fed would being raising short-term rates no sooner than next spring. In the last survey, most had thought it could happen as soon as late this year.
At the same time, state budget shortfalls have emerged as a major threat in the economists’ view. State and local governments cut their spending in the first three months of this year at a 3.8 percent pace. That was the biggest cutback since the second quarter of 1981, just before the economy entered a severe recession.

When states and localities tighten spending by trimming services and jobs, the cutbacks ripple through the broader economy, causing individuals to spend less, too. The drop in state and local government spending shaved about half a percentage point off the U.S. gross domestic product in the first three months of this year.

Nearly two-thirds of the economists view the states’ budget crises as a significant or severe threat to the rebound.

Despite such risks, 55 percent of the economists described the recovery as “on track” as of the middle of the year. The rest said it was “faltering.”

“There’s a risk that the loss of momentum will snowball and feed on itself, but I think in the end the recovery will stay on track,” predicted another survey participant, James O’Sullivan, global chief economist at MF Global.

Tags: Economists see tepid recovery deep into 2011

28Jul

Beige Book Makes It Official: Economy Has Slowed Down

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Beige Book Makes It Official: Economy Has Slowed Down

The latest Beige Book report from the U.S. Federal Reserve confirms what other recent economic reports have suggested: The U.S. economic recovery slowed somewhat in the second quarter, with some regions reporting stalled conditions.

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17Jul

US equities markets may continue to slide

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Markets are Looking as if they are poised for a retest of the June lows…the Dow could go down to 9,614 S&P 500 retest 1011.

GOOG - Google may be a buy after the selling reverses. Android sales are picking up momentum as iPhone sales falter.

Barrons reports GOOG is 35% UNDERVALUED at the current levels.

Tags: goog, US equities markets may continue to slide

16Jul

Stockshakers stories moving the markets now

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Stockshakers stories moving the markets now

Goldman settles with SEC for $550 mln;shares surge
Wall St reform clears Congress, goes to Obama
BP says test shuts off oil leak from Gulf well
AgBank closes mega IPO with tepid HK debut
Dollar weakens on U.S. data, Asian stocks dip
Australian PM set to call election for Aug 28 -ABC
China to trade yuan/ringgit in onshore mkt-sources
China’s Wen says policy stability is H2 priority
Japan vows to stick to JGB issuance, spending caps
Two final bids seen for Aus Healthscope-sources
Google profit misses as expenses surge
U.S. jobless claims fall, manufacturing stumbles

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The IBD 100 Top 10 for the week of August 23

Fed says economic recovery likely to be more modest in near-term

VIX Index Trading up in todays trading session

The IBD 100 Top Ten for the week of August 9

Recovery Loses Speed As Consumers Turn Cautious

Economists see tepid recovery deep into 2011

Beige Book Makes It Official: Economy Has Slowed Down

US equities markets may continue to slide

Stockshakers stories moving the markets now

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