Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.


For Twitter Heads

Originally published July 14 at 10:45 a.m. EDT
 
I'm seeing large option activity in the July 18 calls for Twitter ( TWTR - Get Report) relative to the size of the open interest.

This is pushing implied volatility much higher (up 64 basis points to about 109%).

On a fundamental note, TWTR announced Thursday an agreement to become the PAC-12's premier streaming partner.

Position: Long TWTR.

 
My Short Thesis on Bonds
 
Originally published July 14 at 9:49 a.m. EDT

Stated simply -- short bonds.

Consider:

Position: Short TLT.

 
Why I'm Buying Out-of-the-Money SolarCity Puts
 
Originally published July 14 at 8:05 a.m. EDT
 
Tesla ( TSLA - Get Report) might make it through a recently announced Securities and Exchange Commission probe, but CEO Elon Musk (the P.T. Barnum of Thursday's speculative market) faces serious challenges that could undermine TSLA's growth expectations and funding opportunities.

After all, Tesla under Musk is becoming known for outrageous public forecasts, a lack of sufficient disclosures and arguably, an overpriced stock that's hard to short and nearly impossible to borrow.

Personally, I'm planning to buy far out-of-the-money puts on SolarCity (SCTY) on the expectation that its planned merger with Tesla could be terminated.

As I recently wrote:

"Regular readers of my diary know that I sometimes post something that replicates the theme of the Tell Me Something I Don't Know segment on MSNBC's Hardball with Chris Matthews.

So ... 'tell me something I don't know, Dougie.'

OK, here goes:

The proposed $2.8 billion merger of Tesla (TSLA - Get Report) and SolarCity (SCTY) is in jeopardy, as many shareholders are pushing back against the plan in both private and not-so-private discussions.

-- Doug's Daily Diary, Tell Me Something I Don't Know (June 28, 2016)

Position: None.

 
Technically Speaking
 
Originally published July 13 at 8:48 a.m. EDT

With apologies to my technically oriented Real Money Pro colleagues Tim Collins, Helene "The Divine Ms. M." Meisler and James "RevShark" DePorre, here are some random technical observations that this fundamental analyst sees this morning:

  • The S&P 500's breakout to new highs Tuesday came with unusually strong breadth. New York Stock Exchange advancers led decliners by more than 2-1.
  • That said, market volume was weak. But to most observers, good breadth is more important than weak volume.
  • Bulls will argue that most breadth breakouts occur near the middle of advances, not at the end.
  • However, the market's 10-day momentum measures appear overbought and seem to argue for a short-term pullback. For example, the CBOE put/call ratio has dropped sharply, falling into the 70s for three consecutive trading days. The 10-day put/call ratio is also down to 0.98 from its recent record high of 1.17.
Position: Long SPY puts, Short SPY