JLN Options: BIRINYI: Bears Will Capitulate, And Stocks Will Surge To A Record High In 2013

Dec 31, 2012

JLN Options wishes a happy and prosperous New Year to all our readers!

Lead Stories

BIRINYI: Bears Will Capitulate, And Stocks Will Surge To A Record High In 2013
Whitney Kisling, Bloomberg (via Business Insider)
The Standard & Poor’s 500 Index will probably surpass its record high in 2013 as bears capitulate and the lure of a four-year bull market pulls “everyone in the pool,” according to Laszlo Birinyi.
http://jlne.ws/WVYX1o
** Some New Year optimism. –JB

Asia’s Stock Rally Could Hit a ‘Cliff’ in Early 2013  
Jean Chua, CNBC
Asian stock markets have made hefty gains this year despite global economic uncertainty, but in the weeks ahead, analysts warn against volatility and a possible pull-back in equities if the U.S. is unable to avert the “fiscal cliff” – a series of tax hikes and spending cuts that could tip the world’s largest economy into recession.
http://jlne.ws/WVZ7G0
** Some New Year pessimism. –JB

Exchange Traded Funds of the Year: Inverse VIX ETFs
Tom Lydon, ETF Trends
For much of 2012, the CBOE Volatility Index, or VIX, has reflected greater complacency in the markets, fueling the rapid growth in inverse VIX related exchange traded funds. But the government’s impasse over the so-called fiscal cliff is stirring up the pot and the funds took a hit last week as the VIX spiked.
http://jlne.ws/12TgT0E
**There’s nothing like the thought of falling off a cliff to jolt you out of your complacency. — SR

Exchange Regulation Needs Review, Credit Suisse Says
Nina Mehta, Bloomberg
The botched initial offering of Facebook Inc. (FB) is the catalyst that should lead to U.S. exchanges being stripped of self-regulatory powers and their related benefits, a Credit Suisse Group AG (CS) executive said.
http://jlne.ws/VrEPoZ

ICE agreed to pay $750 million termination fee to NYSE if deal fails 
FinCAD
Exchange operator IntercontinentalExchange Inc. (ICE) has agreed to pay NYSE Euronext a termination fee of $750 million in the event that the proposed acquisition involving the two companies is denied by regulators for antitrust reasons.
http://jlne.ws/WVXiZG

Eight Novel ETFs Looking to Break Into 2013
Brad Zigler, Wealth Management.com
With the early lockup of benchmark index licenses by ETF pioneers, innovation has typically been the only pathway to market share for new entrants to the field. To snag assets, products tracking new indexes and novel strategies have to be introduced. And marketed.
http://jlne.ws/12TlgZL
**Includes the ALPS U.S. Equity High Volatility Put Write Index Fund, which is designed to track a portfolio of exchange traded put options sold against a cash position, and two other volatility ETFs. — SR

Changing the Speed of High-Frequency Trades
Mary Schroeder, Trader Magazine
Britain’s Foresight Program found that high-frequency trading has generally benefited investors-but a European Commission task force recommends that all orders live for at least half a second. In the United States, exchanges began putting clamps on excessive messages from trading firms that canceled far more orders than they turned into transactions.
http://jlne.ws/WVZX5u
**“Half a second”? Are you kidding me? The orders will die of boredom if they have to wait that long. — SR

Regulation

Fund Industry Challenges CFTC Registration Rule
Jamilia Trindle, The Wall Street Journal
The mutual-fund industry is renewing a challenge to a rule that requires fund firms that trade in gold, oil or other commodities to register with an additional federal regulator.
http://jlne.ws/Ucody2

Strategy

How to Play the Volatility of 2013
Stephen J. Solaka, Barron’s
Clarity remains Wall Street’s rarest commodity. Even though the major banks have just released 2013 stock-market forecasts that (surprise, surprise) predict the market will advance, no one really has any idea what stocks will do tomorrow, much less at the end of four quarters.
http://jlne.ws/WVTvvm

Advantages of Options Writing
Rick Lehman, Cabot Investment Newsletters
The Fed’s efforts to keep interest rates at all-time lows for an indefinite time period have resulted in a universal search for yield among US investment managers, who have bid up the prices for almost every type of fixed income vehicle and dividend-paying stock.
http://jlne.ws/WVTSGg

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