Posted by: jhamon | August 5, 2010

Another Big ARES Winner: ATML

Atmel Corporation (Nasdaq: ATML) also took off today, rising 16% after posting revenue that surpassed analyst expectations.  We’ve gained 21.3% in ATML since we bought it just a couple weeks ago.


ATML takes off

Color commentary courtesy of www.stockmister.com:

Atmel Corporation (NASDAQ:ATML) surged 15.99% to $6.02, a day after the chip maker reported better-than-expected earnings. Atmel posted a wider loss, but its adjusted earnings of 11 cents a share beat Wall Street estimates. The company’s revenue also jumped 38% year-over-year to $393.4 million.

Atmel Corporation designs, develops, manufacture and sells a range of semiconductor integrated circuit (IC) products and touch solutions. Its products consist primarily of microcontrollers, advanced logic, mixed-signal, nonvolatile memory, radio frequency (RF) and system-level integration semiconductor solutions.

We might offer a stock advisory service to provide picks like this to private subscribers.  Drop us a line, info@fractalbox.com, if interested.

Posted by: jhamon | August 5, 2010

ARES Winner: SOLR

FractalBox ARES stock GTI Solar (Nasdaq: SOLR) popped 12.54% today to close at a 52 Week High.  SOLR is up 26% since we purchased it less than a month ago.

SOLR breaks out

Per www.stockmister.com:

GT Solar International, Inc. (NASDAQ:SOLR) jumped 12.10% to $7.78. After the closing bell on Wednesday, the company said its first-quarter net income rose to $16.5 million, or 11 cents a share, from $7.8 million, or 5 cents a share, in the year-ago period. Revenue increased to $135.1 million, from $71.8 million. The company beat the Wall Street targets of 4 cents a share in net income and $73 million in revenue, according to a survey by FactSet Research.

We are talking about providing a stock advisory service to provide selections like this to private subscribers.  If you’re interested, drop us a line: info@fractalbox.com.

Posted by: jhamon | April 29, 2010

Meanwhile, over on my Facebook page…

If you’re serious about markets, it’s a must read.

Posted by: jhamon | April 16, 2010

Max Keiser Tells The Truth About Goldman Sachs

From Yahoo Finance:

The lack of interest among investors comes amid the primary question of whether stocks can continue their upward trend into earnings season, especially if results prove upbeat and profit takers decide to step in.

So if results prove downbeat, will profit takers not step in?  What if results are upbeat AND profit takers do not step in?  Or results are downbeat AND profit takers do step in?

Expiring minds want to know: what in the world is that analysis supposed to mean?  Something?  Anything?

This analysis fits in the category of “On the one hand; on the other hand; and if I had another hand…”

Posted by: jhamon | March 27, 2010

How To Know If A Market Has Legs

10 to 1 Up Volume Days In The Current Bull Market

From Tom McClellan – Editor, The McClellan Report:

In his 1986 book, Winning On Wall Street, Martin Zweig talked about 9-1 Up Volume days.  The idea is the same, since every day that qualifies as a 10-1 Up Volume Day is by definition also a 9-1 Up Volume Day.  Other technicians have also done a lot of work with these types of volume signals, and 10-1 Down Volume Days are also considered to be important events.

The basic idea about why these days are important is that to get the buying and selling skewed so far in one direction requires a lot of buying or selling pressure.  Generally speaking, a 10-1 Up Volume Day that arrives in an uptrend is a sign that there is still more buying to come.  It is a sign of great strength.

Posted by: jhamon | March 26, 2010

ARES Winner: SMOD +24% Since Entry (2/12/10)

ARES Winner: SMOD +24% Since Entry (2/12/10)

Posted by: jhamon | March 24, 2010

MysteryHedgie:Swap Spreads 101

Swap Spreads 101….the focus today is on the 10 year US swap spread turning negative yesterday afternoon (see story below). 

The “risk bullish” argument is that corporate debt issuance is so heavy, as customers search for yield pickup, that hedging rate risk into the government market has caused the inversion.

The “sovereign risk” argument is that the swap spread condition is occurring because the US government will have difficulty “paying for” the approved healthcare bill, as well as the recognition that the Fed will cease its QE program on 3/31, pressuring government yields higher.

We don’t know the reason, but view this “tail event” as an unintended  consequence  of government involvement in markets.  The violent reaction of the US$ tells us that there are other “tails” worth trading…

+——————————————————————————+

Ten-Year Swap Spread Turns Negative on Renewed Demand for Risk

2010-03-23 19:14:52.115 GMT

By Susanne Walker

     March 23 (Bloomberg) — The 10-year U.S. swap spread turned negative for the first time on record amid rising demand for higher-yielding assets such as corporate and emerging market securities.

     The gap between the rate to exchange floating- for fixed- interest payments and comparable maturity Treasury yields for 10 years, known as the swap spread, narrowed to as low as negative

2.5 basis points, the lowest since at least 1988, when Bloomberg began collecting the data. The spread narrowed 5.38 basis points to negative 2.38 basis point at 3:12 p.m. in New York.

     A negative swap spread means the Treasury yield is higher than the swap rate, which typically is greater given the floating payments are based on interest rates that contain credit risk, such as the London interbank offered rate, or Libor. The 30-year swap spread turned negative for the first time in August 2008, after the collapse of Lehman Brothers Holdings Inc. triggered a surge of hedging in swaps. The difference narrowed to negative 20.5 basis points today.

     “It’s hedge-related activity related to new corporate issuance,” said Christian Cooper, an interest-rate strategist at Royal Bank of Canada in New York, one of 18 primary dealers that trade with the Federal Reserve. “As more and more institutions receive, then swap rates will go lower.”

                      Interest Rate Hedging

     Debt issued by financial firms is typically swapped from fixed-rate back into floating-rate payments, triggering receiving in swaps, which causes swap spreads to narrow. An increase in demand to pay fixed rates and receive floating forces swap spreads wider, provided Treasury yields are stable.

Corporations that issue bonds also use the swaps market to hedge against changes in interest rates that may result in increased debt service costs.

     The extra yield investors demand to own corporate bonds rather than government debt was unchanged yesterday at 154 basis points, or 1.54 percentage points, the narrowest since November 2007, the Bank of America Merrill Lynch Global Broad Market Corporate Index shows. High-yield debt returned a record 57.5 percent in 2009, and another 4.3 percent this year, according to the Bank of America index data.

     “There’s a lot of money on the sidelines waiting for mortgage-backeds to cheapen up,” said Cooper. “In the absence of them getting cheaper and as the end of the buyback program comes near, people are looking for high quality spread products, so a good place to park is in swap spreads.”

For Related News and Information:

Swaps and Swaption Rates: USSW <GO>

Stories on derivatives: NI DRV <GO>

For Data on Interest Rate Swap Rates: IRSB <GO> Swap rate for 30 years: USSWAP30 <Index> <GO> Swap rate for 10 years: USSWAP10 <Index> <GO>

–With assistance from Liz Capo McCormick in New York. Editors:

Dave Liedtka, James Holloway

To contact the reporter on this story:

Susanne Walker in New York at +1-212-617-1719 or swalker33@bloomberg.net

To contact the editor responsible for this story:

David Liedtka at +1-212-617-8988 or dliedtka@bloomberg.net

Posted by: jhamon | March 19, 2010

MysteryHedgie: Washington Gets Busy – Watch Out

Washington is again set to make an impact on our lives, and markets, with the vote on healthcare tentatively scheduled for Sunday.

Government involvement continues to be a favored theme for 2010, along with US$ strength, which we see resuming once again after the monthlong sideways chop. Interesting that Washington may vote on a Sunday, perhaps remembering the DJIA -777 the day of the financial bailout “No” vote in realtime, 9/29/08.

With 10 day realized volatility in the DJIA at 3.4% (see below) it feels as if Washington is about to pass a bailout package for long option holders! Portfolios should be examined to make sure that one has dry powder to be buying -10% or selling +10%; short dated options on overextended items such as IWM, XRT and UNG are valuable at present.

Posted by: jhamon | March 17, 2010

MysteryHedgie Presents: The Case of the Collapsing VIX

Derivative Capitulation… after 3 days of utter silence on the trading desk, option holders are urgently selling March and April stock and Index options to capture eroding premium or, given the “war stories” we’ve heard, to stop losses.

The VIX (below) tells the story; after January’s sharp reversal in volatility, few expected the steady grind lower in option prices of the past 5 weeks; fewer still have risk managers willing to allow short option bets below VIX 20. Option prices, (unlike stocks) mean revert over time; if you believe that government involvement in markets and macro uncertainty can offset global central bank dovishness, protect/enhance/substitute part of your stock, commodity, currency and interest rate exposure through options.

March’s history of market turning points is again worth noting.

VIX Collapses.  Triumph of the Central Bankers?

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