50 Cent bets on VIX again

Do you remember the mysterious trader "50 Cent"? The guy who, for nearly a year, has consistently bet on put options on the VIX volatility index and, though for a long time shadowed, ultimately made a profit of tens of millions of dollars?
This might be a good example of how patience and persistence of trading, coupled with a good commercial strategy, reward the player.
Well, it looks like the mysterious trader is back to its favorite instrument again.
After profiting about $183 million and long absent, or rather awaiting, from the volatility index market, the trader made its bet again.
It was placed on Tuesday with the purchase of 50,000 call options with $28 bet on the volatility index at a level of 0.50 and 0-51 cents. On Wednesday morning, a similar deal was made again, but this time for 0.49 cents.
Of course, there are some doubts about whether the bet is made by the original "50 cent" and not by an immitator. So it's good to have one mind on S&P 500.

US indices started correction down

Trading on US stock exchanges began with a decline in major indices on Tuesday, which recently lost 0.6-0.8%. Investors fixed their profit after several days of growth, as well as against the background of the excess of the yield of 10-year treasury bonds by 3%. Statistics at the same time showed a slowdown in growth in retail sales in April from 0.8% to 0.3%, as expected. The increase in the indicator for March was revised from 0.6%. Production reserves in March did not change (it was expected + 0.1%).
The S & P500 index rebounded down from the resistance of 2750 points, which was raised the day before. If the indicator does not manage to return to 2720 points at the end of the day, the probability of accelerating the fall in the Bollinger average area of ​​the daily chart (2680 points) will increase.
European index EuroStoxx 50 by the end of the day fell by less than 0.1%.

One simple reason explains the narrow range of US indices

US stocks have been "stuck" in a narrow range in recent weeks, and the key reason behind this is very simple - there is no leader to follow.
This happens relatively rarely in the stock - lacking unambiguous leaders to keep the whole market up. Compared to the past year when these were technological shares, this year's situation is completely different.
Markets experience relatively similar periods of lack of leadership, said Michael Wilson, market strategist at Morgan Stanley.
Since the beginning of the year, the S&P 500 has declined by 0.21%, while the blue chip Dow Jones Industrial Average lost 1.6%. At the same time, the Nasdaq technology is up 2.5%.
The sectors are mainly traded downward, with only three of the 11 major sectors on the positive territory for the year.
The best-performing sector is the consumer cycle, adding 5.5% to its value this year. This, however, is predetermined by the strong performance of several names. For example, Amazon.com, which accounts for around 20% of the sector, has increased its market capitalization by nearly 34% this year.
Shares of Netflix Inc. - the fifth largest component in the sector, rose by more than 63% since the beginning of the year. Other names, like Home Depot HD and Walt Disney, have been in negative territory since the beginning of the year.
For the market as a whole, the lack of a sector to lead growth is also a "worrying signal" by itself.
Analysts comment that such periods occur in times of transition from a growing market to a market that has found its peak or is about to find it. The situation is further compounded by interest rates on 10-year US bonds, which rose by more than 3%, and by expectations of main interest rates hike.
There are some signs that the energy sector may become a market leader. It has grown by 9.5% since the beginning of the month, which is the best performance among the 11 major sectors of the broad US index.

RBC lowered its forecast for the S&P 500

The RBC Capital Markets financial institution downgraded its forecast for the broad US index S&P 500, highlighting high political uncertainty.
Now the institution expects levels of the broad index of 2,890 points, compared with the previous expectations of 3000 points. And although a decline, the forecast still points to an index growth of nearly 8% of current levels.
Some of the obstacles to the US index include the fears of a trade war with China and Trump's behavior.
There is also an expectation that the US president may go to impeachment as a result of his not very thought-out comments.
Serious negatives are also infront the technological shares that have lost 7% last month after the Facebook scandal.
The concerns of investors and analysts are that the US government will increasingly look into regulating Facebook's social network and its main competitor - Google.
The technology sector was the best performing sector in the past year, with a growth of nearly 30%. RBC downgraded the market valuation of the sector from "market weight" to "underweight", highlighting the company's high financial estimates in the light of expectations for their quarterly results.
In the last month, the blue chip index S&P 500 fell by more than 5%.

Two companies that can beat Apple on the way to $1 trillion (2)

Amazon.com, Inc. (AMZN)
This is the company with the best chance to beat Apple on the way to a $1 trillion.
First of all, because Amazon's capitalization of $690 billion is not far from the $1,000 billion.
Secondly, Amazon's growth is far ahead of Apple. Company revenue grew by nearly 40 percent, while Apple's revenue rose 13 percent in the past quarter. Amazon's profit rose more than two times in the past quarter on an annual basis, while Apple rose 16%.
In addition, Amazon shares are rising in value much faster than Apple's. Over the past three years, the stock of the retail chain has risen by 300%, against a 40% growth in Apple shares.
Last but not least, Amazon is still in the phase of accelerated growth of its business, at Apple's expense.
Put it another way, if someone goes ahead of Apple on the way to $1 trillion, then it's very likely to be Amazon.

Alphabet Inc (GOOG)
Outside of Amazon, the other company that has a good chance of overtaking Apple's leading position is Alphabet Inc.
Like Amazon, Google is not much farther from Apple in terms of market capitalization. The latter amounts to 720 billion dollars.
And just like Amazon, Google is growing much faster than Apple. Google's revenue growth is 24%, compared to 13% growth for Apple. Google's profit rose 28%, compared to 16% for Apple.

Two companies that can beat Apple on the way to $1 trillion (1)

After reaching a bottom of below 700 points in 2009, the blue chip index S & P 500 rose almost four times to a level of 2,600 points. This is a serious growth, leading the capitalization of many companies, such as Apple, to record values.
Historically, since 1990, five different US companies have reached and passed the psychological limit of $500 billion in market capitalization, but have not been able to last long enough to stay above that level.
Currently, five different companies have a market capitalization of over $500 billion and one of them is Apple. And while many investors and analysts are betting that Apple will be the first company to reach the covenant boundary, here are the main competitors of the iPhone manufacturer to reach that value.
Of course, it should be borne in mind that Apple's chances are still the highest, given the market capitalization of the company at $860 billion.

US indices ended in new records

US indices reached new historical records, awaiting the introduction of tax reform next week.
The S&P 500 indice, the Dow Jones Industrial Average and the Nasdaq 100 Stock Index closed at historic records after it became clear that the final tax reforms will be presented late Friday, and a vote for their approval is expected next week.
Russell 2000 Index's Index for Small Businesses saw the ninth consecutive growth for the last 10 sessions, precisely following the expected reforms.
Still, there are some uncertainties about the final version of the tax reforms and whether they will not undergo any changes.
The S&P 500 rose 0.9 percent to a level of 2,675.63 points or the highest closing level in its history. The Nasdaq 100 added 1.2% and Nasdaq Composite added 1.2% to its value.

Credit Suisse: It's time to buy technology companies

News related to US tax reform has led to a serious downsizing of technology companies. And according to Jonathan Golub, an analyst at Credit Suisse, the time for purchases may have occurred.
Information becomes more and more about tax cuts, and investors now have more clarity. This led the US indices to new records, with investors shifting from technology to industrial and financial companies.
Last week we saw growth in consumer, financial and industrial companies and a decline in technology ones.
Technological companies generally outperformed the market this year, and will probably continue to do so next year, says Goleb.
Golub also pointed out that technology companies are traded at a slightly higher ratio than other companies. The cost-benefit ratio for technology companies is 19.8, while the S&P 500's is currently 18.2.

Hedge funds use the highest leverage since 2015

US hedge funds take up more money to buy shares after the signals of increased dependence between the direction of the US economy and their chosen companies.
Leverage among managers speculating for growth or a decline in stock prices rose this month, near its highest levels of bullish market that began in 2009, according to data from Goldman Sachs Group Inc.
Increased use of borrowed money means that professional managers tend to take more risk after eight years of growth in markets. And while leverage brings greater losses if stock prices are declining, the downward movement this year was minimal.
The broad US state index S&P 500 has its longest series without a 3% correction or more in its history. Apparently hedge funds assume that this trend of good performance will continue.

Decline for US indices yesterday

US indices dropped yesterday, with technology and energy companies struggling to dominate the market. The technological index dropped by 0.37% and the energy added 0.44% to its value.
Oil prices rose 1.5% to support energy companies. This happened after the US oil reserves fell in line with market participants' expectations.
Undoubted impact on the market was Yellen's speech at the University of New York. Yelan has suggested that the number of increases in interest rates in the coming year may be lower than expected.
The broad US index S&P 500 rose by about 16% this year. Yesterday the index failed to close above the psychological limit of 2,600 points.
Investors and analysts, however, are raising their expectations for index performance next year, with expectations for a two-digit rise in the index.
Traded volumes were minimal before Thanksgiving today and early closing on Friday. The Volatility Index (VIX) declined for the fifth trading session in a row, being close to its lowest levels for 23 years.
Technological companies were driven by a fall in Hewlett Packard Enterprise's stock of 7.8%, or their biggest decline since 2015. This happened after company manager Meg Whitman announced that she would step down from her post in February next year.

Investors end the cash and this is terrible for the stock

More and more analysts warn that investors' cash deposits have fallen to their lowest levels in history. And this can be terribly bad news for the markets.
It can be interpreted in two directions - first, all are long in the market, or it is the perfect moment for correction. And second, there is no one to support the market with new purchases, with a potential adjustment.
Until now, the share purchase strategy for any 2 to 3% adjustment worked perfectly because investors had enough free funds. What will happen, however, with the next 3% adjustment and who will support the market then?
We can not fail to note the fact that the S&P 500 index has recorded a record long series without a 3% adjustment.
In other words, a new problem emerges in the stock markets - in connection with the lack of cash. Money market assets are at a record low of 17%, while equity investment stocks are also at a record low of 3.3%, according to INTL FCStone.

Buffet against hedge funds - 9 years later

Nine years ago, Warren Buffett agreed to make a bet called "one million dollar bet". In it, the billionaire will be betting with his opponents from the $3.5 billion Protege Partners hedge fund to beat their sophisticated investment schemes and active selection of companies with a simple investment in a S&P 500 index fund (Vanguard S&P 500).
It was a long time ago - almost nine years ago, and to the end of the bet remain about six months, given that it ends on December 31 this year.
How are things to date?
Buffett leads, with lots. It must be a real miracle to lose the bet. After nine years, the hedge fund portfolio rose by 22 percent, while the Vanguard Admiral Shares S&P 500 Index Fund added 85.4 percent to its value. That is almost four times more.
The yield on the index fund was higher than that of the hedge fund in seven of the past nine years.

Ron Paul: 25% correction of the markets and 50% growth for gold is not excluded

In an interview with CNBC, Ron Paul, a former GOP president, said the US economy is probably not as strong as everyone expects and the situation could become "ugly" by October.
According to him, if the market drops by 25% and gold is rising by 50%, it would not be a shock.
Such a scenario would take the broad US S&P 500 index to a level of $1,819 and gold to $1,867 per ounce relative to current levels.
Paul is known for his bearish expectations and open-ended critic of the Trump administration. He also often criticizes the Fed for maintaining interest rates at too low levels for too long.
This, of course, is not the first time that Paul predicts an adjustment. He did the same on June 28 2016, or just a year ago. Since then, the S&P 500 index has risen by 21% and Dow has added 24%. Technological Nasdaq is traded with an increase of 34%.
Paul, however, continues to hold on to his thesis.

Laszlo Birinyi: S & P 500 at 2,500 points to September

Laszlo Birinyi, one of the most stable bulls in the eight-year rally of US indices raised its forecast for the broad US index S&P 500. According to him the index will rise to a level of 2 500 points to September.
73-year-old president of Birinyi Associates Inc. said his company would buy call index-based options to benefit from the potential increase, according to a letter sent to customers on Monday.
Early in the year, Birinyi predicted that the broad index would rise to 2 450 points by June. The index overtakes this level this week, rising to the highest value of 2 453 points.
The expert's opinion is largely counter to the expectations of the majority of Wall Street analysts that the rise in US indices is likely to stop.
According to Birinyi, however, strong demand for shares at times of sell-offs is a bullish sign.
Birinyi is expected to buy call options on the SPDR S&P 500 ETF with payment is in September and a $250 strike at a price of $2.29, says the letter to customers.
The forecast is in fact an expectation of a 5% growth for the index, compared to its average for the past 50 days.

DB: Sell in the summer, the next 5% move is more likely to be downwards

Wondering what to trade in the summer? The largest German financial institution - Deutsche Bank has an idea. And it is - sell in the summer, because according to analysts of the bank, the next 5% movement for the US indices will be down.
The rise of the indices is so far justified, but from the bank believe it has reached its limits in the short term and the market may be tense in connection with potential dramatic decisions by Congress.
State legislators will most likely present significant changes to tax legislation that will lead to simplification of the system. Still, it is not clear when such changes will come into force. It is very likely that they will not materialize after August.
Deutsche Bank also said it was reducing its stock expectations. In line with their expectations for the direction of the S&P 500, from the bank practically reduce their tactical exposure to US stocks from 70 to 60%.

Where did the fear of the market disappear?

The United States bombed Syria last week, which led to a sharp reaction by Russia. However, the markets did not react, with leading US indices are at or close to new records.
The question that is harassing the experts is - "Where did the volatility disappear?"
The broad US state index S&P 500 still rises, with the index was at about +0.1% before the bombing in Syria.
"If someone pledges potential military conflicts in the future, it definitely counts on a serious correction for the market," according to analyst Gordon Johnson of Axiom, quoted by CNBC.
"To be honest, we have been in the secondary bullish market since 2009, so people who manage money have not seen a downward trend in the market at all. Everyone wants to believe it is possible. So they do not take the bad news into account", the expert added.
According to experts, a certain level of concern among investors is generally healthy during the bullish market. And such fears are currently almost absent, at least on the basis of the levels of the popular index measuring the volatility of the market is traded - VIX.
The latter is at levels of just under 11, or close to its lowest values, over the past few years.
The VIX Index uses the options based on the S&P500 wide index to measure the magnitude of expected volatility over the next 30 calendar days.
A value of the indicator below 13.5 points for such a long period of time means only one - the market participants are not afraid. According to many analysts, the VIX index is a "counter-indicator," which means low values ​​indicate a lack of fear and a potential downturn in the market.

Good results from Amazon and Alphabet

The US indices and the dollar remained unchanged on Thursday, in expectation of the key news about the growth of the US economy on Friday.
The S&P 500 is trading very close to its historic peak, and whether it will be overcome will depend on its medium-term movement.
Reported good results from US companies have helped the technological Nasdaq to rise to a new historic record.
After the good results, Amazon.com's shares rose to a new historic record at the OTC session, where they added nearly 5% of their value. The company posted sales growth of 23 percent to $35.7 billion, which exceeded analysts' average expectations of $35.2 billion.
The market capitalization of the company is approaching the psychological limit of $200 billion.
After the good results, a growth of nearly 4% recorded also Alphabet Inc. The company's profit has risen by 29% over the past quarter and shows no signs of slowing pace.

Record highs of purchases of call options on the S&P500

In light of expected tax changes by President Trump, investors have bought record volumes of call options based on the broad S&P500 index.
This has led to a record ratio between call and put options of the index on Thursday. Last time, when this ratio was so high, the index has seen an increase of 3% over the next two weeks, experts from Credit Suisse recall.
The increase in the ratio to a new record has become a reality on Thursday before the publication of Trump tax reforms. In practice, the ratio began to rise after the US presidential election in November last year.
It reached a record high on Feb. 14, after which the broad index rose by 3% over the next few days to reach a historic record on March 1.
Often, this ratio is also used by countertraders, especially when at peak levels. And the current ones may be a good indicator of peak market optimism, which is the first worrying signal for the markets.

Dow Jones ran over the barrier of 20 000

On Wednesday, Dow Jones Industrial Average crossed and closed above the psychological level at 20,000 for the first time, while the S&P 500 and Nasdaq Composite also went to record levels after the disclosure of upbeat corporate earnings of giants such as Boeing Co.
Dow Jones Industrial Average surged 0.8% to a price of 20,068.51 as Boeing Co. and Caterpillar Inc. contributed to solid gains.
S&P 500 recorded a growth of 0.8 percent to a record price of 2 298.37, eight of 11 major sectors finished with increases. Financial and industrial shares led the winners, while telecommunications and real estate were among the laggards.
Nasdaq Composite ended with a rise of 1% to a price of 5 656.34 points. Since the beginning of the year until now, Nasdaq surpasses other indexes, gaining 5.1 percent.

Growth in US stock markets after the minutes of the Federal Reserve

From the Fed protocol it became clear that the first increase in interest rates in a year was approved mostly because of market reaction after the presidential election and the expectations for an aggressive fiscal policy.
On Wednesday, the major indexes closed session overseas on green territory after minutes of the Fed was released. Although the name of the president-elect is not mentioned in the transcript, the impact of the vote on the markets and the economy seems to have been discussed.
Dow Jones Industrial Average rose by +0.30% closing at 19942.16. Broad S&P 500 rose by +0.57%, closing the session at 2270.75 points.
The technological Nasdaq added +0.88% and closed at 5477.07 points.