Not to pat myself on the back again-but hey, someone has to do it-but my move on Friday is looking even better-where I got out of my $44.50 Citi May 2 puts early in the morning soon after the market opened. C ended up bouncing back from this and never got so low again the rest of the day.
http://diaryofarepublicanhater.blogspot.com/2014/04/d-day-jp-morgan-misses-estimates-market.html
Now today its numbers came out and eat beat to the upside-expectations were fairly low which is always a good thing if you're long a stock going into its earnings-low expectations mean often are too low-even if the picture is not so rosy.
In the case of Citi, a company that's had some bad news lately got some good news this morning. True, it actually saw a decline in its core trading and lending business. However, what more than made up for that is that a smaller than expected loss in its troubled assets.
"Citigroup's quarterly net profit rose 4 percent as a narrower loss on its troubled assets made up for a drop in revenue and profit from its core trading and lending businesses.
http://www.cnbc.com/id/101580292
Interestingly he has a rather novel argument: that Yellen raising rates much actually benefit banks-and the economy. Sounds like Stephen Williamson. I wonder what Sumner would say about that one. I know he says that low rates are often a sign for tight money and vice versa but does he actually agree that raising the rate would benefit the economy.
In any case, I tend to agree with Golub. I think that the sell off last week may well be over. I'm sure glad I got out of C when I did-I don't want to say that I've perfected market timing which is about as hard a thing to do as there is in the market but on this occasion my timing was there. He also makes the point that the selling was not triggered by the fundamentals in the economy but by big money managers rotating out of momentum stocks into value stocks.
True there are still plenty of bears out there and one remaining headwind is the treacherous situation between Russia and the Ukraine. The market tends to really worry about such geopolitical flareups as there's no way to really assess them and the possible damage they could cause. Still I think the bull case is now fairly compelling. That Jim Cramer does too at least doesn't make me less confident in my belief. He thinks that today tipped the balance back to the bulls.
http://www.cnbc.com/id/101582612
I ended up buying 90 BAC May 2 calls. I did notice that BAC kind of held back after getting to $16 but I still think this is a good play. If it can even get back to $16.50 in the next week or so it will pay big. The big move is Wednesday when its earnings come out. So will it go the way of JPM-down-or Citi-up-on earnings? Obviously I hope up but I think it has a good chance of going up. JPM is a special case as its seen as the strongest among the banks so the graders are less forgiving. BAC, so long as it doesn't have a major disappointment-way less than expected-should be ok-as expectations for BAC are not so high to begin with it should be ok.
http://diaryofarepublicanhater.blogspot.com/2014/04/d-day-jp-morgan-misses-estimates-market.html
Now today its numbers came out and eat beat to the upside-expectations were fairly low which is always a good thing if you're long a stock going into its earnings-low expectations mean often are too low-even if the picture is not so rosy.
In the case of Citi, a company that's had some bad news lately got some good news this morning. True, it actually saw a decline in its core trading and lending business. However, what more than made up for that is that a smaller than expected loss in its troubled assets.
"Citigroup's quarterly net profit rose 4 percent as a narrower loss on its troubled assets made up for a drop in revenue and profit from its core trading and lending businesses.
First-quarter adjusted net income rose to $4.15 billion, or $1.30 per share, from $4.00 billion, or $1.29 per share, a year earlier, the third-largest U.S. bank said on Monday. The consensus forecast had called for $1.14 per share.
"It's a pretty clean beat," said David Hilder, banking analyst at Drexel Hamilton. "The company is fully capitalized and had a pretty good quarter."
http://www.cnbc.com/id/101577339
Meanwhile there was indeed the 'chief capital strategist' I mentioned in the title who thinks the selling is over:
The sharp stock market decline last week—fueled by the bloodbath in momentum names—doesn't look like it will continue this week, Jonathan Golub, chief U.S. market strategist at RBC Capital, told CNBC. And better-than-expected earnings and revenues from Citigroup are giving stocks a boost Monday.
"When interest rates go up it's good for banks," Golub said on "Squawk Box" Monday. Let Federal Reserve Chair Janet Yellen raise rates, and let the banks get healthy. "It'll be good for the economy," he added.
http://www.cnbc.com/id/101580292
Interestingly he has a rather novel argument: that Yellen raising rates much actually benefit banks-and the economy. Sounds like Stephen Williamson. I wonder what Sumner would say about that one. I know he says that low rates are often a sign for tight money and vice versa but does he actually agree that raising the rate would benefit the economy.
In any case, I tend to agree with Golub. I think that the sell off last week may well be over. I'm sure glad I got out of C when I did-I don't want to say that I've perfected market timing which is about as hard a thing to do as there is in the market but on this occasion my timing was there. He also makes the point that the selling was not triggered by the fundamentals in the economy but by big money managers rotating out of momentum stocks into value stocks.
True there are still plenty of bears out there and one remaining headwind is the treacherous situation between Russia and the Ukraine. The market tends to really worry about such geopolitical flareups as there's no way to really assess them and the possible damage they could cause. Still I think the bull case is now fairly compelling. That Jim Cramer does too at least doesn't make me less confident in my belief. He thinks that today tipped the balance back to the bulls.
http://www.cnbc.com/id/101582612
I ended up buying 90 BAC May 2 calls. I did notice that BAC kind of held back after getting to $16 but I still think this is a good play. If it can even get back to $16.50 in the next week or so it will pay big. The big move is Wednesday when its earnings come out. So will it go the way of JPM-down-or Citi-up-on earnings? Obviously I hope up but I think it has a good chance of going up. JPM is a special case as its seen as the strongest among the banks so the graders are less forgiving. BAC, so long as it doesn't have a major disappointment-way less than expected-should be ok-as expectations for BAC are not so high to begin with it should be ok.
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