Saturday, November 28, 2009

FAZ SKF SRS : 1 Year Ago, Wildest Options Expiration EVER!

              FAZ : Blue=High, Orange=Low, Green=Daily Range
               Blue=High, Orange=Low, Green=Daily Range
November 21,2008 FAZ 
Opened at 143.40 - Low of 143.00 -  High of 201.86 - Closed at 145.25 Down -20.23
The Range on 11/21 was 58.86 points, on 11/24 it was 66.43
The fine print says it was Options Expiration.
NOTE: FAZ doubled in the week before 11/21, and was chopped in half within 2 days afterward.
You think this was crazy, you should see the charts for SKF & SRS.
November 21,2008 SKF 
Opened at 242.92 - Low of 242.24 -  High of 303.82 - Closed at 244.12 Down -18.33
The Range on 11/21 was 61.58 points, on 11/24 it was 70.98
The fine print says it was Options Expiration.
NOTE: SKF doubled in a week, and was cut in half 2 days later.

November 21,2008 SRS 
Opened at 240.27 - Low of 210.41 -  High of 295.72 - Closed at 216.67 Down -42.69
The Range on 11/21 was 85.31 points, on 11/24 it was 87.01
The fine print says it was Options Expiration.
NOTE: SRS doubled in the week of 11/21, and was cut in HALF on the next trading day!
The Plain Facts are: 
The latter parts of 2008 were volatile in the stock market, as well as many other markets.  Large one-day moves and many more intra-days moves became commonplace.  It was under these cloudy skies that the gyrations of the thre ETFs FAZ, SKF, & SRS were able to whip around with little attention.  Since these are "Inverse" ETFs, their prices were bucking the larger trend: instead of going down like the S&P, they were going up. And being "Leveraged", the degree of their movement was much more than their underlying indexes by 2 or 3 multiples.  However, an ETF just doesn't move by itself- its underlying  portfolio of stocks' collective pricing is what makes the ETF's prices change. These "Net Asset Values" are calculated throughout the day, at least every 15 seconds.  Since each ETF's portfolio contains dozens, hundreds, up to 1,000 different stocks, it would seem that only an ocean tide of market currents would be able to move these ETFS. Not True. In each of these indexes there are a dozen or so of key holdings that account for 30% to 50% of the ETF's "weight", even though they only account for a small portion of the list.  Now it should be no surprise that the 3 ETFs mentioned have an overlapping list of top weighted holdings, and these stocks all fell victim to excessive "whack'em & jack'em" on Friday Nov. 21, 2008. Stocks had been falling for most of the 2 weeks prior to the 21st, -200 points on the S&P and by mid-afternoon on Friday, that was enough. Stocks staged a massive rally off the lows of the day and closed higher than the day prior, almost 48 points higher in the S&P, and the range from low to high was much more than that.  And so was the range of FAZ, SKF, and SRS. These "stocks" all had ranges that day of 50 points or more, similar to the S&P. But the S&P was priced at $800 a "share" whereas these ETFs were priced between $150 and $300 (much lower). Yes, it was an options expiration day, although it was not necessary to be in options to go on such a wild ride.  Matter of fact FAZ didn't even have options trading yet.  No, these individual ETFs lived up to their reputation: "Leveraged, Inverse" and WILD on their own.  Seatbelts required!

Tuesday, November 24, 2009

52 Week Highs

There are some stocks that will make new 52 week highs this week without much effort. Sounds strange, but with each passing week of data that gets added to this series, there is a "53rd Week" that gets dumped from November 2008. And last years prices were HIGHER for some stocks than the current price is, but since stocks were in a major decline this time last year, the "52nd Week" prices are LOWER than current prices. Hence, TODAY's price gets tagged with a New 52 Week High! Ladies & Gentleman, unbelievable as it sounds- it is truly effortless! Read about the Big Swinger Wilshire 5000 here-->> LINK

Saturday, November 21, 2009

Art's Cocktail Napkin: Newsletter

A NEW Service of SwingForce Ultra is "Art's Cocktail Napkin: Newsletter", it is based on Elliott Wave Analysis pioneered by Ralph N. Elliott and perfected with marinated ice cubes and olives. I guess I need to wite alot of words here so that the chart gets pushed down beyond those sponsored links to the right. The last time I posted here, right side of the chart got cut off. That's the most current and pertinent part of the whole message! Well, I'm doing my best to add words here, I hope I'm not losing your interest however, let's see how it works.

Please view the first issue: LINK To FULL CHART

"Art's Cocktail Napkin" 11/21/09
Stocks, Bonds, U.S. Dollar Index, Precious Metals and Special Opportunities
Updated Every Monday, Wednesday and Friday (except U.S. Holidays)
Notice that Wave 4 circle has come up into the previous wave 4 territory?
It even has 5 subdivisions in the C leg.

Have a Great Weekend!

PNC Fincl. owns alot of BlackRock Stock

PNC Financial is the country's 5th largest bank by assets. Link

PNC owns 46.5 million shares of BlackRock common & convertible preferred shares. Link

Here's a link to my updated spreadsheet:

FORTUNE Magazine's article on BlackRock: LINK

Back in May when PNC made its high at $53, Blackrock was $160
Less than 30% of PNC's stock price was BLK, now its close to 50%

Look at this another way: PNC's "Banking operations" (the other part of PNC's stock price) were worth $38 in May. Today it is much less (see spreadsheet for today's calculation).

Since PNC owns 31% of BlackRock, it consolidates 31% of BlackRock's earnings into its own reports. Its the "Value of Earnings" vs. "Value of Stock" that makes this situation interesting.

FAS & FAZ Why Don't They Work?

Have you noticed that the long term performance of these Triple Strength ETFs do not match the underlying index that they are based on? FAS is based on the Russell 1000 Financial Index and is geared to return 3 times the daily return of the index. FAZ is geared to return 3 times the INVERSE of the index, so it goes UP when the index goes DOWN. 3 times the percentage, a neat trick in of itself. In the chart below, FAZ is Blue and FAS is Orange. (July Reverse Splits 1:10 FAZ 1:5 FAS) This is a Sum Chart FAS + FAZ = Price on Left

SwingForce Position Within Daily Trading Range

It's not important if your stock is up, down, or sidewise from yesterday's close, what matters is, "Where are you TODAY, right now, between the High & Low for the day?"
Are you closer to the bottom? Are you nearer to the top? Have you made a new high and moving higher? SwingForce Ultra gives you a Visual Indication as to your Stock or Index or ETF's position within the Daily Range. Try out this SwingForce ULTRA Demo: LINK Enter a Stock Symbol and see where the price is relative to today's Highs & Lows so far.