Will La-Z-Boy Move?

La-Z-Boy (LZB) is anything but its name around earnings. This has been a typical 10% mover, seeing large moves three of the last four earnings reports. Options are pricing in another big move with today's earnings, but only around 8.5%. Still that isn't enough to get me excited this close to expiration. Instead, I am long the July $22.50 calls looking for the bigger upside move rather than the volatility move post-earnings. There is a 4.5% short interest, but that is about 10x the average daily volume, so a squeeze is possible. This is also a play on housing, and I'm looking at recent results from Restoration Hardware (RH) as a plus for LZB, although RH is certainly higher end. Still, it means folks are willing to spend.

La-Z-Boy (LZB) Source: StockCharts.com View Chart » View in New Window »

Could the iShares Silver Trust (SLV) be making a short-term bottom today? One would think the metals and miners would find buying at some point, but now risk-on seems to be buying equities and U.S. Treasuries while selling precious metals. Precious metals are off today due to lower demand in India and China as well as fear of tapering, or so the reasoning goes. However, if tapering is the reason, then shouldn't Treasuries or equities be off, not heading to highs on equities? This leads me to believe that either we get no tapering language, which equities have priced in, so metals rally, or we get tapering language where equities sell off and metals remain relatively flat since they've priced in the possibility. Of course, it is just a thesis. Based on this thesis, I have bought some June $20.50-$21.50 call spreads on SLV for $0.50. I should know by late Wednesday or early Thursday whether the thesis holds. It should be right or wrong with little wiggle room for me, so this is the thesis, right or wrong, without any in-between....13 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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