Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Twisty Tuesday – The Jokes on You if You are Buying This “Rally”

SPY  5  MINUTEWhat a joke this market is becoming!

As you can see from Dave Fry's SPY chart, the S&P finished up 0.5% for the day after an amazing 10-point rally that began the second the European markets closed (11:30).  It was incredible – as in NOT in the least bit credible but, as we knew, it would be enough to make Europe regret yesterday's 2% sell-off and then Europe would bounce this morning (up over 2%) and that would then boost our Futures (now up 0.66%).  This BS was so obvious that we closed our day in the Live Chat Room with this trade idea for our Members:

This will be interesting as Europe finished down 2%(ish) and now we're back flat.  Presumably, they'll try to catch up tomorrow (and NKD has reset to 18,800) so I think I like TF long here (1,107) as a fun play on the assumption that Asia and Europe will pop the futures. 

Down from 1,200 to 1,100 you'd expect a 10-point bounce anyway so I think it's worth a small gamble.

As you cans see we popped to 1,115 for an $800 per contract gain but now we're flipping short because, as noted, yesterday's rally was complete BS – which is obvious if you look at the internals:

This is why charts don't give you the real story!  2,339 declines vs 834 advance with 632 new 52-week lows and we finish up 0.5%?  That's incredible – NOT credible.  Still, there was the good old support line at 2,000 so of course bouncy.  2,100 to 2,000 means 2,020 is weak and 2,040 is strong but when you get an air bounce off 2,000 (never quite hit it outside of a brief spike), then minimum expectation is a strong bounce:


At the moment, the S&P Futures (/ES) are at 2,023 and the weak bounce line is holding, as expected.  It's the strong bounce line (2,040) that we care about today – anything less than that is a shorting opportunity, not a rally signal.  Another fun play from yesterday morning's post (that you can read for FREE) was our suggestion to short the Nikkei Futures (/NKD) at 18,800 "looking for at least a 100-point gain ($500 per contract)."

Yes, you are welcome – Merry Christmas.  Of course, this is actually Hanukkah and today is the last of our 8 FREE gifts from Philstockworld.  I hope you've enjoyed all the free trades from our December posts – we've certainly made enough money on these Free Trade Ideas to boost the economy into the holidays!  

Even better than our /NKD trade idea yesterday was our call to go long on oil (/CL) at $35, that one was good for $2,000 per contract with oil popping all the way to $37 this morning but it was offset slightly buy our too early long call on /NG (Natural Gas) at $1.89, now $1.85 and down $400 per contract there.  Oh wait – we also called Gasoline Futures long (/RB) at $1.20 and that's now $1.25 and those pay $420 per penny per contract, so $2,100 there makes for a grand total of +$4,700 PER CONTRACT – just from following yesterday's Futures Trade Ideas.  

Over at Seeking Alpha, where you can subscribe to our Options Opportunities Portfolio, we posted a review of our Top Trade Alerts back on October 12th.  At the time I noted:

While 30 of our first 45 (66%) Top Trade ideas were winners, 4 of our 15 losers were Lumber Liquidators (NYSE:LL) trade ideas – all of which are now coming back as LL pops back to $20! Hopefully it can break over $20 and we can put all that silliness behind us.

That turned out to be a false alarm and LL quickly faded back into the mid teens but we hung on and actually pressed some of those losing positions as we KNEW, Fundamentally, that the sell-off in LL had been overdone.  Well, yesterday our nemesis, Whitney Tillson, the guy who started the witch hunt on LL, finally capitulated and the stock is popping over 20% pre-market, so congratulations to the faithful who held on for this wild ride!  

Sometimes, trade ideas take longer to play out than we think they will and PATIENCE, more than hedging or portfolio management, is what I find to be the hardest thing to teach our Members over at Philstockworld.  In today's HFT-driven market, people are constantly watching the 5-minute charts or 1-minute charts, which gives a huge advantage to those of us who still pay attention to weekly, monthly or annual trends – but you have to know how to wait!  

Our next big wait is for Natural Gas (UNG) to turn around and I wrote about that and had an LNG play for you as well last Tuesday and today both UNG and Cheniere Energy (LNG) are cheaper because both went the wrong way so far.  Nonetheless, they are 2017 trade ideas we firmly believe in and we hope /NG is bottoming at $1.85.  The warm weather is killing December demand for Nat Gas but, as we outlined last week – the Fundamentals are going to drastically change in 2016 as the US begins exporting natural gas for the first time ever.  

If it wasn't so risky – I'd make it our 2016 Trade of the Year (IBM is) – that's how much I believe in the export premise. 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Good Morning, Everyone!

    The link for today's webinar (1pm Eastern) is:

  2. Phil, of course I read your posts, that is how I knew you wrote about LNG. I just want a refresher course now that we are getting closer to the event.

    /ES- When do you decide that we are not going to make the strong bounce at 2040? We are at 2026.50 and rising now, so it seems too soon to jump in short. So I guess you just get a feel for it and when it seems time you make the play and use those tight stops to get out if we keep rising. Does that seem about right or is there something in particular you look for, like failing to get to 2040 a certain number of times or something like that? Right now pulling back off 2029, would you give it a shot here at 2027? Or keep waiting and see if it pops again? Still trying to master the art of shorting the indices, with not a lot of success.

  3. I sure do hope we hit our bottom in NG at 1.833 this morning, but with a forecast of 68 degrees on Christmas day and 67 the day after, it could have a little further to go. Looks like we finally start getting colder after that, but still above normal into Jan. Crazy!

  4. VRX~~Valeant just picked up a key new partner and the stock is surgingBusiness Insider.

    Stock up 10% + in pre-market.

  5. please don't say that craigs!!!!

  6. PHIL: What is the trade for UNG.


  7. phil did we get the flush this morning?

    i will never doubt you again if you say yes ;-)

  8. Good Morning!

  9. good morning all! happy holidays!!

  10. Good morning angel and happy holidays to you and the family!

  11. Phil/LL

    Any new trade at this point when the stock is already up $4. I know you do not like but this will go up more.


  12. Phil if /ES stalls out, does going as high as 2037 constitute a strong bounce in this case? If so, how does that affect your strategy? do we now stay away from shorting it because it made a strong bounce or do we just expect less pull back now and have tighter stops? I know you go over this all the time, but for some reason I start drawing blanks when we get here.

  13. you too sainty!

  14. Good morning! 

    That's true, the media totally froze him out this month. 

    /ES/Craigs – Europe is now up 3% so no shorting anything until it calms down but let's watch the 2,040 line and see if it holds – that's where I'd like to short.  I decided we wouldn't pop 2,040 looking at yesterday's awful internals – it's a totally fake move and fake moves tend to fail at the strong bounce lines.  

    If you want to really master it – you do NOTHING until we see a real good reason to short (all look toppy, Europe turns down, dollar rises and bad news hits the wire).  

    1,122 on /TF – should have just stuck with the long.  

    VRX/Albo – All fixed?

    UNG/IHS – At the moment, I'd sell the 2018 $9 puts for $3 and buy the $5 calls for $3.20 and sell the $10 calls for $1.30 for net a $1.10 credit and a $7.90 net entry (higher than it is now).  At about $9 I'd sell a few calls to offset, but that won't come for a while.  Keep in mind you are buying UNG at $7.90 so let's say the downside is $5 and you lose $2.90 vs possibly making $6.10 if it goes the right way – keep that in mind when allocating your risk.

    Hey Angel, where've you been?  

    Almost 2,050 on /ES

    Big Chart – All bouncing off support, the question is how high?

    LL/Pat – Well, you can be more confident that the 2018 $15 puts won't hurt you at $5 and, with that, you can go long on the 2017 $15 ($5.80)/25($2.50) bull call spread at $2.30 and you'd still have a $2.70 credit for a worst-case $12.30 entry (30% off) and best case $12.70 profit.  

  15. PHIL! did a stint as an interim ceo for a friend who runs a large psyche outfit…stint over had fun never as much as you do when its your own tho!

  16. Oh sorry, it wasn't /ES hitting 2,050, it was the S&P Index, /ES is still trying to break 2,040.  

    No way the Dax pops 10,500 so that means we should be topping out here all around so I'd call the shorting lines 17,500, 2,040, 4,625 and 1,125 and that means short the highest one and out if any of them cross the line!  


    Image result for lucy football

    $38.50 is a good line to watch on Brent.  Dollar not helping so far.  

  17. FU nat gas!!!!!

  18. LA evacuating all schools – won't even let kids walk home – something is up.

  19. Markets don't seem to care – amazing!  

  20. Seems to be a bomb threat.  

  21. Core CPI rises in-line with forecasts

    • Nov. Consumer Price Indexflat, in-line with consensus, +0.2% prior.
    • Core CPI +0.2% in-line with consensus, +0.2% prior.
    • Redbook Chain Store Sales: +1.5% Y/Y vs. +1.9% last week.
    • -0.8% M/M vs. -0.6% last week.
    • "Mid-December is usually a soft period for shopping which will pick up sharply closer to Christmas.

    Will the High-Yield Credit Rout Spark a Recession

    • Analysts are all weighing in on the rocky high-yield bond market, with some saying it "marks the start of a new trend" or could lead to a "contagion effect" of defaults, while others maintain its "overdone" and "illiquidity" could clear up soon.
    • How did it all start? The junk bond bear has been growling since mid-2014, but the real panic started last week when investment firm Third Avenue Management froze investor withdrawals from its nearly $1B high-yield bond fund and subsequently fired its CEO. The high-yield sector is also heavily tied to crude prices, which plunged below $35/bbl yesterday.
    • Uncertainty ahead of the FOMC's policy decision on Wednesday is further weighing on sentiment.
    • Previously: Asset managers punished in high-yield selloff (Dec. 14 2015)
    • Previously: Selling continues in high-yield (Dec. 14 2015)
    • Previously: Junk bonds get junkier (Dec. 14 2015)


    Junk-Bond Selloff Intensifies

    Creditors Bawl: How Investors Ignored Risk of Junk-Bond RoutYou had to see this one coming. Warnings of a high-yield bloodbath were plentiful: The shale driller that missed its first payment. The clothing manufacturer and the software maker among the many companies that issued debt, payable in more debt, earmarked to reward managers who’d already loaded them up with debt.

    Chesapeake Bonds Plummet To 27 Cents Of Par After Company Hires Restructuring Advisor

    BAML: 'It's death by a thousand paper cuts'. The high-yield market is in the midst of a meltdown

    Emerging-Market Turmoil Enters New Phase as Fed Takes Back Seat

    Abe Deflation Fight Has Foes on Nearly Every Street Corner

    • The European Union has delayed a decision on whether to renew sanctions against Russia, after Italy insisted that more discussion was needed.
    • The failure to continue the sanctions for another six months from January indicates cracks in the bloc’s stance against Russian aggression in Ukraine.
    • It could also push the issue to the agenda of a summit meeting of Europe's leaders later this week.

    Saudi Arabia forms coalition against terror

    • Saudi Arabia has announced the formation of a 34-state Islamic military coalition to combat terrorism, according to a joint statement published on state news agency SPA.
    • A long list of countries including Egypt, Qatar, and the United Arab Emirates were mentioned, although Iran was absent from the participants.
    • Separately, a cease-fire between another Saudi-led coalition and Houthi rebels in Yemen will go into effect today, looking to halt nine months of war as U.N.-backed peace talks begin in Switzerland.

    Rio CEO Says Iron Ore Rivals `Hanging on by Their Fingernails'

    • According to the Association of European Carmakers, European car sales rose 13.7% in November, with U.S. brands recording strong gains, but Volkswagen (OTCPK:VLKAY) continued to pay the price of its diesel emissions test-rigging scandal.
    • VW saw its core brand market share tumble to 12.2% from 13.5%, as sales edged just 3.1% higher, underperforming the market. The German group as a whole posted a 3.9% gain.
    • Airline fares rose 1.2% M/M in November to follow a 1.5% increase in October, according to the Bureau of Labor Statistics.
    • The average fare in November was 3.8% lower than the level from a year ago on an unadjusted basis after promotional activity in the first half of the year factored in.
    • The read on airline fares could calm some anxiety over PRASM forecasts from key carriers. It's also worth noting again that fuel costs are down 40% to 50% for carriers on the year-over-year comparison.
    • Related ETF: JETS.
    • BLS CPI data
    • Previously: Calling all value investors: Airline stocks head into 2016 with upside (Dec. 12 2015)

    Qualcomm decides against breakup, expects strong FQ1

    • "The current structure is the best way to execute on our strategy to build on our position in the ecosystem and deliver enhanced performance and returns," says CEO Steve Mollenkopf.
    • With FQ1 nearly complete, the company expects results to be at or modestly above the high end of previous guidance.
    • conference call is set for 8:30 ET.
    • Source: Press Release
    • QCOM +2% premarket

    Howard Stern re-signs with Sirius XM for another five years

    • Howard Stern just announced on his radio show that he will re-sign with Sirius XM (NASDAQ:SIRI) for another five years.
    • Stern's current contract at $80M per year is due to expire at the end of the year.
    • Stern's announcement via Soundcloud
    • Sirius XM Holdings (NASDAQ:SIRI) formally announces it signed Howard Stern to a new five-year contract. Stern tipped off his morning listeners earlier today.
    • The company will have access to Stern's audio and video library for a period of 12 years.
    • The new deal will also include some video programming initiatives.
    • Financial terms weren't disclosed.
    • Previously: Howard Stern re-signs with Sirius XM for another five years (Dec. 15 2015)
    • SIRI +3.25% premarket to $4.13.
    • Lions Gate Entertainment (NYSE:LGF) is up 2.5% as Bernstein launches coverage at Outperform, calling it a "rare opportunity" to invest in a studio without having to invest in TV networks.
    • The firm's Todd Juenger has set a price target of $48; shares closed yesterday at $33.47 and are trading at $34.29, implying 40% upside in the target from here.
    • Both networks' demand for original content and studio orders are at all-time highs, he notes, with studios facing "very few limits to production capacity."
    • “Lions Gate is specifically well-positioned to participate in the growth," Juenger writes, "with virtues including: a) a unique de-risked film model, and b) a fast-growing independent TV production business which can serve customers including TV networks and SVODs without conflict.”
    • The looming presence of cable mogul John Malone is a catalyst as well, he notes; while the stock faces some short-term volatility (providing two-way opportunities for traders as well as optimism for long-term investors with tolerance for volatility), LGF and Malone will be a factor in some kind of consolidation going forward.
    • The Force Awakens, the first film from Disney (NYSE:DIS) in the Star Wars series, will debut in more than 4,100 theaters this weekend, a record number for a December opening.
    • is forecasting $223M in U.S. and Canadian ticket sales in the first weekend, topping Jurassic World from Universal Pictures, which brought in $208.8M in its debut weekend in June.


    • Early movers based in part of the global Star Wars premiere include AMC Entertainment (NYSE:AMC) +2.6%, Regal Entertainment (NYSE:RGC) +2.1%, Cinemark Holdings (NYSE:CNK) +1.5%, Carmike Cinemas (NASDAQ:CKEC) +2.1%, Marcus Corp. (NYSE:MCS) +1.2%, IMAX (NYSE:IMAX) +3.8%, Dolby (NYSE:DLB) +1.5%, Hasbro (NASDAQ:HAS) +1.3%.
    • The gains are larger than the move in the broad market.
    • Some analysts think theater traffic this month could be a beneficiary of sub-$2 gas prices.
    • Previously: 'The Force Awakens' to open in 4,100+ theaters (Dec. 15 2015)
    • The next step for Walt Disney's (NYSE:DIS) over-the-top ambitions is a big one, with a launch in China and the help of Alibaba (NYSE:BABA).
    • Disney is up 2.1% premarket; Alibaba is up 0.4%.
    • The two will launch DisneyLife through Alibaba's Tmall shopping site, with shipments beginning Dec. 28 and presales available now. A $125 device in the iconic Mickey Mouse shape will give consumers access to content as well as allow users to plan visits to the company's parks in Hong Kong and Shanghai.
    • As with other foreign companies, Disney can't operate its own TV channels in China. The deal expands a partnership where Alibaba had arranged to distribute products related to Marvel's Avengers: Age of Ultron, and Disney works with more than 300 stores selling on Tmall.
    • The $125 initial payment gets Chinese consumers a one-year subscription to Disney's service; the company didn't say what it would cost for additional years.
    • In October, Disney launched DisneyLife as a direct service in the UK, and in Disney's earnings call in early November, CEO Bob Iger said the company was "very interested" in the opportunity to take content direct in other markets.
    • Previously: Disney call: Excited for 'Star Wars,' no panic over ESPN (Nov. 05 2015)
    • Previously: Disney up 1% as it rolls out DisneyLife subscription service to UK (Oct. 21 2015)

  22. Bush / Obama comparison / Phil – A better comparison would be what each of them inherited and where they stood at the end! Bush inherited a surplus and mild recession and ended with a huge deficit and a big recession… Been the opposite for Obama so far! 

    But these numbers don't matter because they will be misrepresented anyway!

  23. ~~AMZN – Amazon initiated with a Buy at MKM Partners; tgt $800. 

  24. Jeff Saut of Raymond James calling for a "rip your face off rally."

  25. Foxy crowd already attacking Obama for not calling LA a terrorist attack – even though there's no actual attack and no evidence at all that the message came from terrorists. This is why we're doomed – this partisan BS makes this country grind to a halt on every issue.

    Los Angeles Unified School District, the second-largest in the US, canceled school at the last minute today because a school board member received a bomb threat.

    The Los Angeles district seems to find this one credible, although it's still being analyzed. Schools are being closed out of what the school board president described as "an abundance of caution."

    The district has more than 900 schools, and the decision keeps nearly 700,000 students, teachers, and staff home for the day. The district is asking employers to be flexible, describing the cancelation as an "almost unprecedented situation."

    What we know

    • The threat was made electronically during the night against multiple schools and mentioned backpacks and other objects.
    • "The threat is a serious threat," school board president Steve Zimmer said in an interview with TV station KTLA-5, saying the board felt it was the "appropriate action" because the district does not feel it can assure students' safety.
    • All schools will be searched today, and anything "out of order" reported to police.
    • If kids have already left for school, parents are supposed to pick them up.
    • Another update will be provided at 9 a.m. Pacific time (noon Eastern).

    What we don't know

    • Whether the threat is credible. The vast majority of bomb threats in the US are hoaxes, and bomb threats against schools are not uncommon.
    • Who made the threat, and for what reason.

    Still, there's no reaction like an over-reaction!  

    Saut/Albo – Oh CNBC and a lot of other media have their pom-poms out this week.  They want to force a positive year for the indexes one way or another.  

  26. Phil/UNG

    I have a 20 April 8 C and 10 Apr 11 P.  I wasnt sure what we rolled to in the last review of OOP.  Can you suggest what I should roll to?

    Also, I have 3 Jan 17 Short 14 P  as well. Any suggestions?

    Thanks in advance

  27. You guys always play UGAZ but check out DGAZ:

    That would have been a great pair trade when they both crossed $5! 

    UNG/Rookie – Yeah, doesn't look like April will happen at the moment.  In the OOP, we rolled our April calls out to 20 of the 2017 $8 calls ($1.93 at the time, now $1.10) and left the short puts and calls.  I don't see the rush to change the short puts and calls.  

    Dollar flying up past 98 putting pressure on things.  

    I don't know how they are going to search all the schools in one day in LA.   LA has 10,000 cops for the whole city and there's 1,000 schools to check.  

  28. Threat, reason and reaction –  "swatted" you think?

  29. “Panic”Investors are panic-buying stocks, panic-selling bonds, and panic-pumping-dumping-and-pumping crude this morning… The machines are in charge… What …StocksThis is the big problem with ‘The Big Short’The financial crisis is back. No, this doesn’t mean you should stock up on canned…

  30. “Panic”Investors are panic-buying stocks, panic-selling bonds, and panic-pumping-dumping-and-pumping crude this morning… The machines are in charge… What …StocksThis is the big problem with ‘The Big Short’The financial crisis is back. No, this doesn’t mean you should stock up on canned…

  31. I can't believe that NG and oil are disconnected. So frustrating! I never thought I would be so annoyed with warm weather!!!

  32. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  33. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  34. Business on Flipboard

    Oil plunges to a 6-year low. Is $30 a barrel next?Extremely cheap oil is back, and it may get even cheaper.Crude plunged 4% to as low as $42.85 a barrel on Monday. That’s the lowest price since 2009.This should bring…

  35. “Urban Wildlife” Story and PicturesStory ?Urban WildlifePublished Dec 11, 2015 | View the Assignment | Features Photos From 26 Contributors27 photos selected byNational Geographic Young ExplorerView SlideshowWell, this was exciting and really tough. Curating the Urban Wildlife assignment was as…

  36. News on Flipboard

    Somalia hotel siege ends with 20 deadA siege that started with gunmen detonating a bomb and spraying bullets in a hotel in Somalia ended Saturday with at least 20 people dead, authorities said.The attack, which lasted hours, began when gunmen…

  37. AAPL a laggard here.  Doesn't bode well if they have stopped buying it to boost the markets.  However, on a recent trip to Target I noticed the Apple displays were picked over and customers flocking while Android counter (all looked pretty similar to me) was empty.

  38. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  39. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  40. Jabo – remember that NG is used for heat and to produce electrical power. Oil is used mostly for transportation fuel and then secondly for materials. There's some crossover, but that's where the bulk of it goes for each. You read a lot of idiots that say something like "oil is down, so that's bad for solar!" and it just makes me just smack my forehead.

  41. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  42. AP Explore: Seafood from slaves | Associated PressAP Investigation: Slaves may have caught the fish you boughtMarch 24, 2015 Includes videoThe Burmese slaves sat on the floor and stared through the rusty bars of their locked cage, hidden on a…

  43. in NYC, it won't even be dropping below 50 at night much the next 15 days. That's nuts.

  44. “Panic”Investors are panic-buying stocks, panic-selling bonds, and panic-pumping-dumping-and-pumping crude this morning… The machines are in charge… What …StocksThis is the big problem with ‘The Big Short’The financial crisis is back. No, this doesn’t mean you should stock up on canned…

  45. Business on Flipboard

    Oil plunges to a 6-year low. Is $30 a barrel next?Extremely cheap oil is back, and it may get even cheaper.Crude plunged 4% to as low as $42.85 a barrel on Monday. That’s the lowest price since 2009.This should bring…

  46. LA schools – this is something else; a martial arts friend of mine opened his studio for kids and all to come stay as the schools are closed:

  47. Technology on Flipboard

    Cyber attack hits 4 million current, former U.S. federal workersWASHINGTON (Reuters) – Hackers breached the computers of the U.S. government agency that collects personnel information for federal workers in a massive cyber attack that compromised the data of about 4…

  48. CLF taking it on the chin, down 12% after spiking down 25% earlier this morning.  No real news, except the RIO headline from this morning saying their competition was hanging on by their fingernails….

  49. Swat/Scott – It's like a bad Gibson novel.  Sad this is what's happening to our kids.

    Warm/Jabob – Wait another 20 years - you ain't seen nothin' yet!  

    The least he could do is use a gas grill!  

    AAPL/Sibe – So many negative articles, they can't get any traction. 

    That's nice Snow but isn't that also kidnapping? blush

    CLF/Palotay – Pretty much a penny stock now.  They only lost $15M last Q but March was bad and they'll lose 0.75 for the year, which is a lot when you are paying $1.67 for a share.  Next year, in theory, they'll cut the loss in half – but not if prices keep heading south. 

  50. Don't forget, we ran the /NG lines in yesterday's chat and determined $1.80 was the long-term support, so this is a good (and necessary) test.

    On NG, since $3 was 60% of $5, I'm looking at $1.80 at 60% of $3 and thinking that may be the new low range for NG.  The drop from $5 to $3 was $2 and a weak bounce was 0.40  and a strong was $3.60 and we never got there.  Now a weak bounce from $3 would be 0.24 to $2.04 so call it $2.05 and $2.30 as weak and strong for NG (front-month) and we'll keep a close eye on those lines.  

    Meanwhile, in one year, NG has dropped 40% twice without recovering!  

  51. SUNE – Up big.

  52. Oil peaked in June/July 2008, then cratered.  The market followed soon there after and both bottomed in Mar/Apr '09.    We have 'cheaper' oil now than then.  

  53. Because oil is up? 

  54. another guy slamming nat gas on CNBC..

  55. BHI headlines out

  56. U.S. antitrust officials aren’t satisfied with Halliburton Co.’s proposals for clearing its purchase of oil services rival Baker Hughes Inc. and don’t expect to make a decision until next year, according to a person familiar with the situation.

  57. Oh crap, BHI was just halted on the way down as news came that US not happy with deal:

    Baker Hughes Incorporated (BHI)

  58. HAL is up – that means sentiment is turning against the deal (and why not with 80% of the rigs idle?).  

  59. All it really is is a rejection of HAL's request for a quick decision.  Remember yesterday they said "either approve it or tell us what needs to change" – it's not like it was going to get done this Q anyway…  

    Still like them!  

  60. LNG   looks like sales of January 2016 $35 puts, about 26000 contracts.  My guess its Icahn willing to add as he gets the media to scare everybody out of nat gas

  61. Lovers of the BHI/HAL deal should start reading the fine print on the reverse termination fee. On the other hand, they could draw comfort from the failure of the GE/Electrolux failed merger. But the reverse termination payment in the BHI/HAL case is another dimension. Methinks the lawyers are already trying to figure out how to get out of the commitment and saving face forf both parties.

  62. Shrimp sold by global supermarkets is peeled by slave labourers in Thailand


    US customs records show that the shrimp entered the supply chains of major US food stores and retailers such as Walmart, Kroger, Whole Foods, Dollar General and Petco, along with those of restaurants such as Red Lobster and Olive Garden.


  63. Have you noticed how cheap shrimp has become? I Looked and it said "farmed" from Vietnam, or Thailand so definitely never buy that stuff. Now this explains why and the give away prices. God-what people won't do for a buck!

  64. Psychology of pricing. CLF $1.70; HOV $1.66. Why is it that the death rattle for CLF is palpable, but HOV still seems to offer hope (possibly forlorn) that it might just pull itself back from the yawning chasm it is looking into?  That is of course, the same chasm that BTU, GTAT, ANR and DRYS have already fallen into. Aaaah, the fickle nature of the market. 

    It has not been a great year for value investors. Did someone shout FANG!

  65. Kidnapping/Phil – Did you notice he's Iranian? It's a plot!

  66. ABX as well Winston.  But, most are debt saddled and see dwindling prices of their "commodity."

  67. how about  FU  for TWTR

  68. Pirateinvestor

    It’s just proofs how poor the QA systems are at those company

  69. Pharm: I was going to place ABX in that category – but I can just about stomach looking at the stock price of ABX and telling myself it is doing exactly what I want my $ hedges to do. I know I should be happy, but paying the piper has never been one of my favorite playbooks. I remember the days when MEE was a wonderful value play (I believe uncovered by your goodself). Just shows that given the right management that excels at value destruction, it doesn't take long to go from good to bad.

  70. Qcmike Slave labor.  Slave labor is if you forced to work. But these people are working to feed their Families I assume. If one would sell the shrimps for double the price I think they would not sell them any more. We have the same here with milk farms. They hardly can make ends meet but the truth is the market supply of milk is similar to the market supply of oil. Are they all slaves who work in the oil industry now?

  71. CLF, FCX, BTU… wow are these cheap.

  72. Scott … add RIG, SDRL, XCO .. need a strong stomach and plenty of margin for those commodity sector plays … :(

  73. Surly can not open this web site same as last week 

    This webpage is not available



  74. DMulligan - for some of these, feels like the wrong side of history.

  75. A short list of new yearly highs today (and mostly new all time highs):


  76. Scottmi; you've been holding back on us, why didn't you tell us about those in Jan '15?

  77. Why would ADBE be so hot?  Not like it's a big under the tree or stocking stuffer kind of present. Re-upped another spyware deal with the NSA?

  78. yodi – welcome to windows: $300B company and they can't guarantee an internet connection.


  79. Hi All,

    Phil's computer just crashed. He's rebooting and will be back in the webinar shortly.

  80. Winston – if only! ;-) statistics say new all time highs make more winners than new all time lows, but I sure can't bring myself to buy any of these today, in this market, at this time of year… and with Yellen on deck!.

  81. Yodi

     Most of these people are not from Thailand they are forced to work, they are being trafficked not the same as a milk farmer in Germany.

  82. greg do we just stay in there or do we need to rejoin?

  83. Just stay… he'll pop back into the meeting

  84. A weaker set of stocks from another screen, with stocks that were at highs, but now have some down-turning crossovers on moving averages (2-week falling under 30-week) are:

    I make no assertion about what these might be doing or where going.

  85. I like DIS for 2016

  86. Phil – Thanks for putting Casey Jones in my head this AM.  Trouble with you is
    The trouble with me…

    Scottmi – This was Casey Jones in 80 at the Warfield, this time you can see me up front, epic

    QcMike, Pirati, Yodi – Slave Labor Shrimp – And Now For Something Really Special

    Let me tell you something, I'm from Bayou La Batre,  Alabama, and my momma cooked shrimp. And her momma before her cooked shrimp.  And her momma before her momma cooked shrimp, too. My family knows everything there is to know about the shrimpin' business.

    They tell me these Vietnams is good shrimp. You know, after we win this war, and we take over everything we can get American shrimpers to come on here and shrimp these waters. We'll just shrimp all the time, man. So much shrimp, why, you wouldn't believe it.

    Anyway, like I was sayin', shrimp is the fruit of the sea. You can barbecue  it, boil it, broil it, bake it, saute it. There, uh, shrimp kabobs, shrimp creole, shrimp gumbo, panfried, deep fried, stir fried. There's pineapple shrimp, lemon shrimp, coconut shrimp, pepper shrimp, shrimp soup, shrimp stew, shrimp salad, shrimp and potatoes, shrimp burger, shrimp sandwich… that's, that's about it.

    I gotta buy me one of them shrimpin' boats as soon as I have some money. Out.

  87. Is there any hope that NG could bounce before the end of the day or do you think we close at the lows again? So annoying to see it drop every day without pause.

  88. Pharmboy – Cheap Oil

    "Oil peaked in June/July 2008, then cratered.  The market followed soon there after and both bottomed in Mar/Apr '09.    We have 'cheaper' oil now than then."

    Excellent historical observation.  And junk debt also cratered prior to the equities market in 2008.  That's two big fat historical red flags waving. Deja Vu all over again?  Nah, we've progressed, its different this time, right? 

    Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it. – Santayana

  89. Phil/UUP,

    How does UUP move with Dollar? I could big OI in 26 Call and 24 Put for 3 day expiry. So maybe it will go down more than up? ……no rate hike maybe…


  90. Naybob – good sound! Was that you with both arms up? ;-)  
    Recently watched "The Other One" on Netflix. Thought it was well done:

  91. will be very interested to see the Markets Diary advance/decline stats for today..

  92. pat_swap – received books yesterday--thank you for the expedited service. Very nice binding and covers, and I like the layout and colors throughout. No chance to get into it any more just yet, but very much looking forward to reading through it and trying some of the recipes. Covers an under-represented area in our culinary repertoire..!

  93. scottmi/Book,

    You are welcome. Thank you for your compliments and hope that you love the book when you read it more and also the simple recipes :-) . Your feedback would be very much appreciated.


  94. My main take away from the last couple years fighting with ABX, CLF, RIG, SLW, CCJ, TWTR, XCO, LL, etc etc, is that too much of my portfolio was in these types of names, betting on a turn-around, when I should have had the bulk of my portfolio in simple Buy/Writes on blue chip dividend payers like WMT, ED, VZ, T, AFL, BAC, WBA, GIS, PFE, GM, etc). While this may not be as exciting, it can generate some fantastic returns, and reduce portfolio volatility dramatically.  If you setup a buy/write on true blue chips, and sell calls/puts at a strike about 10% below current prices, you make between 12-20% annualized on your initial basis (more if you sell with an elevated VIX), and your break even is about 15% below current price levels.  

    If I kept the more speculative investing to a much smaller portion of my portfolio, I would have had much better results overall, because I would have had the majority of my portfolio cranking out at least 10% returns annually.  Psychologically this would make it much easier to be patient on the turn-around positions.  Just my 0.02.

  95. Naybob – Channeling your best Bubba lines !  Very good.

  96. /NG Finally looking at weather charts I see some cold weather! We may even go below freezing on January 4th or 5th if the current models hold. Looks like we will remain in the 30's for most of January, but weirdly many days are forecast to have lows only 1 or 2 degrees below the highs. Strangest weather forecasts I have seen in a long time. However, finally good news for Nat gas bulls is on the horizon. Don't forget though we still have very warm temps coming on Christmas Eve and Christmas day which will definitely affect the psyche of traders, so I am just trying to be pragmatic and not panic anyone. I do think Phil is right about 1.80 being the floor though if these guys are factoring in January weather patterns which they must be.

  97. Shrimp farmed outside of the US is full of antibiotics and other nasty chemicals and 94% of the shrimp sold here comes from abroad. Eat at your own risk!

  98. I am with you Palotay… No bottom fishing for me anymore. Might be more exciting, but exciting is overrated when it comes to my money! 

  99. ~~Halliburton (HAL) and Baker Hughes (BHI) halted with news pending.  

  100. Just so you know, we are below freezing and have the white stuff making everything look like Xmas and it is going to be in the single digits by the end of the week here in the Northern tier, so keep the faith. Apparently, eventually the cold will get to you too! And lots of snow in the Rockies for the skiers. Deer Valley in Utah has 6 inches of the white stuff. Nattering-if so much shrimp is wild caught, WHY can you not find it??

  101. Bottom fishing is great WHEN you truly find the bottom!

  102. I have read that 30% of the natural gas we produce is flamed off at the well because of lack of capacity in our pipeline infrastructure. Seems like we have a ready source of additional supply there if we start using more and that might keep a lid on prices.

  103. STMP-What a rip off that is! They give you 6 stamps and you enroll in their program for a monthly fee, I believe 15.95 a month and they even send you a scale. USPS offers all of this already for no monthly fee. Who are the suckers that are going along with that rip off? And all the analysts ratings are a buy with a PE of 363?

  104. 1.80 now?

  105. Indexes curling over again but too tough to bet.  

    /NKD was rejected at 19,000 as expected. 

    ADBE/Scott – Their subscription service is a huge hit.  As predicted by my daughter!  

    DIS/BDC – I think a lot of the positives are already priced in.  

    Shrimp/Naybob – It's amazing how cheap it's gotten but slave labor certainly helps.  

    /NG/Jabob – Deader than dead now.  $1.80 will be tested and then we'll see if there's any kind of bounce in the front-month but clearly people are stampeding out of /NG at the moment. 

    That's 0.45 down in the month, which is exactly 20%.  If the -20% line is not at least a little bouncy – it becomes kind of foolish to hope for a recovery.  

  106. BHI/HAL extend deal deadline to April 30.   Market seems happy based on resumed BHI trading.

  107. UUP/Pat – It kind of moves with the Dollar but, like any ETF, it's a flawed instrument.  As you can see, it HAS moved that much in 3 days – but usually doesn't.  Kind of a roulette play, I think. 

    Diary/Scott – You don't have to wait.  New lows still crushing new highs but A/D has flipped:

    Oh no, $1.799 on /NG

    Slow and steady/Palotay – That is what I keep preaching!  

    Weather/Craigs – That might be why they are forcing the bottom now but this is so crazy.  


    BHI/Albo – Again?  Oh, they just extended the closing deadline to April, that's all.

    Supply/Traderd – Yes but the pipes have to be built.  That's the logic to exporting 1/3 of our /NG over the next few years – the idea is that new supply will come on-line to match what we export.  

    STMP/Pirate – Nice future short.  

    Actually, it's a convenience thing and it's so little money that most people don't check the price.  If the post office properly marketed their services – I'm sure a lot of people would want to use them (including overnight delivery).  

  108. under 1.80 and still no bounce--ouch

  109. Phil Stmp-You can use USPS online and get discounts on all your delivery's. Print out the labels etc.  Where is our 2:40 bounce? Fxi another good short??

  110. I guess we get a reat increase tomorrow.  What time would that be ?

  111. Phil you mentioned in the seminar TLT as another good short. Looking over the calls/puts there are move calls than puts sold/bought whatever. Could you expand on this please?

  112. that was a rate increase

  113. I just bought UNG weekly 7.50 calls for 4 cents. This is sick, how long can you go without a big white candle?? If the answer is another few days, I lose $255

  114. FXI/Pirate – No, we took the money and ran on those and left a little on the table last week but still the danger of more Chinese stimulus after the Fed (this weekend), so I don't see the short now.  

    Back at $40 I was a bit worried and it took a while to come down for us – now it's the bottom of the range so a much harder win from here.  

    Rates/Stock – Fed announcement at 2pm

    TLT/Pirate – We always like them short at $130 which is under 2% on the 10-year.  It's down $2 from yesterday already and probably will bottom at $120ish if the Fed moves as expected (for now).  I have no idea why there are more calls – maybe people selling to cover? 

    UNG/BDC – Good gamble but I would have gone out longer.  

  115. UNG/Phil – I'm actually playing this one "longer" as I'll do the same play the next 4 straight expiries. I'm gambling for a big white candle in the next month one way or the other.

  116. Scotrt – OMG LOL pretty soon there going to send MegaMaid over here…

    I know of a manufacturing outfit in Wyoming if anyone wants to go in on a "Wyoming Air" concept….  I'm almost not kidding….

  117. Palotay I think you may be on to something as well. When you do a buy write are the options the next expiration from when you buy ot a couple/few moths out? How far out are the ones you do?

  118. ScottMi/BioDiesel – Air for China – "if anyone wants to go in on a "Wyoming Air" concept…I'm almost not kidding….."

    OMG!!!! LMAO… I know your not kidding, this is almost as good as going to trendy oxygen bars and sucking up O2 rather than on a hooka or better yet, getting the air changed in your tires at regular intervals because stale oxygen breaks down rubber faster.  That was the Hubbert's Peak Nitro/Oxy Stations concept I came up with in the mid 80's and rehashed recently.  And yes, some people actually wanted in.  If anyone wants to invest in a franchise, please do let me know. Still ROFL…

  119. API report shows another build of 2.5 million barrels. And down we go again!

  120. palotay – agree with that analysis too

  121. Pirati –  "if so much shrimp is wild caught, WHY can you not find it??"  You get one of these for that one.

    TraderD - "Shrimp farmed outside of the US is full of antibiotics and other nasty chemicals and 94% of the shrimp sold here comes from abroad. Eat at your own risk!"

    As Albo said, I am channeling my best - and that goes along with you can't fix it or Ron White's Theory - and the most efficient rejoinder to the efficient-markets theory. ‘THERE ARE IDIOTS. Look around,’   - Larry Summers.  Although I do enjoy me some o them oxy moron or Jumbo Shrimp cocktails, and that there amaebi sushi or raw sweet shrimp with the head deep fried, hmmm good. Out.

  122. Money Flows – for the day, DJIA closed up .9% but money flow overall was NEGATIVE $1.055 Billion.  Winner for the day was Financials, loser was Oil/Gas

  123. and for the week is down $5.8 Billion, and the month so far is down $7.7 Billion…

    To explain how this works..  take any given stock and say lots of selling at $10, but just a little buying at end at $11 can register a higher close so daily gain.  But the MONEY has moved out.. 

    How hollowed out is our entire market? That leads to the fantastically fast drops…. coming again to a market you are in!


  124. Air/Scott – ROFL!  There's a business to get into.  Holy cow, who falls for this?

    How its Made

    Wonder how we get fresh air from the mountains and into your hands? It’s quite the process, and it involves state of the art compression and delivery systems to ensure only the highest quality air gets to your lungs


    We travel to the Rocky Mountains to find the freshest air. At this remote place, we fill massive cans through clean compression, locking in the pure air without any contamination.


    Back at our facility, we begin filling our convenient delivery cans to the brim with excellent air. 

    Twin Pack Lake Louise Air 7.7

    Filled With 7.7 Liters of Lake Louise Air, Provides up to150 Breaths Of Fresh Banff Air

    Can't we just run a hose into China and meter it?  

    Wyoming Air/BDC – Sign me up!  Seems to me all we need is a web site and some logos to slap on bottles and we can just see if we get 1,000 orders before taking it seriously.  For $30,000 – then I'd be motivated to get the cans made and "fill them up" with air.  

    We could borrow a tanker from LNG and send a massive amount of air to Hong Kong and negotiate a price to provide air for private parties and special events. You could be the air king of China! 

    Anyone know what happens when you compress air?  

    Money Flow/Scott – Interesting on oil as that sector was one of the leaders.  Hollow is right – this is why I am loath to go long right now. 

  125. Lake Louise air? Banff air? Which one? Those places are 40 miles apart.

  126. I prefer Banff, much crisper.  yes

  127. When you compress air it heats up / decompress = cooling

  128. Hey, we could work on some lingo and become the first Air Snobs!  Someone lock down right away!  

    Air/BDC – It doesn't turn to liquid then?  Can't if hot, I suppose.  

  129. I'm in northern Alberta so I can supply lots of fresh air. :-)


  130. One of my cousins works for Air Liquid up in Canada… Maybe she could hook us up with an industrial compressed air delivery system!

    I was thinking the same thing Phil – take these big oxygen bottles that AL sells to hospitals and hook them up to the A/C unit in an apartment for example and deliver it with the cooled air that comes from the vent! Even in small percentage, people would swear that they can tell the difference… 

  131. I thought that we wanted to keep our oil for energy independence:

    Apparently, just talk… Big business does not care about our energy independence, they just care about the money and nothing is cheaper to buy than Congress to do your bidding!

    Republicans are pushing hard to end the ban that was established four decades ago to ensure the U.S. had all the fuel it needed in the event of a Middle East oil embargo. Oil companies have said the ban on exporting crude oil is no longer necessary considering the production boom happening in the United States. With gas prices the lowest they have been since 2008, Republican have prioritized lifting the ban as part of the $1.1 trillion omnibus package that will fund the government through next fall.

  132. Air – I thought my local "Pacific Northwest Air" could be a winner, and if you need something warmer, there's a guy nearby who is always happy to contribute limitless hot air. ;-)

  133. Craigs-Buy/Write – Typically you write leaps, the further out the better (so you get the most cushion).  Take for example Phillip Morris (PM).  Right now you can buy the stock for $87.84, and sell the 2018 $82.50 calls for $9.00, and the 2018 $80 Puts for $8.50, giving you an initial basis of $70.34, which makes the $4.08 in annual dividends 5.8% of your basis each year.  In January 2018, if PM is above $82.50, you will earn $20.32 (Called away at 82.50 minus your $70.34 basis, plus 2 years of $4.08 dividends).  Which is almost a 29% return in 2 years, or 14.5% annually.  Your break even is all the way down at $70.34 (20% below current levels) after you account for dividends, and the additional shares being put to you in a big correction.

    If you make a portfolio of 10-20 of these kind of plays, that have 10-20% cushion built in, you should do pretty good.  Mix in a disaster hedge (with proper timeframe!) to insulate against a catastrophic market drop, and you have a pretty robust portfolio.  The trick is not to over commit, and to be prepared for the market going down 30%+ which would trigger a lot of your short puts. You can also start with just short puts, and wait for a correction before buying the stock and selling the calls, to give you an even better initial basis.  By the way, this is a concept that Phil talks about a lot.  Not a new idea on my part.  I'm just thinking that it is less stressful to focus on blue chips, and at 15% annually, is a good enough return for me.  I can enhance that further with the butterfly and VXX plays. 

  134. Here’s what to look for when the Federal Open Market Committee releases its policy statement at 2 p.m. Wednesday following a two-day meeting in Washington.

  135. China’s economy, already in the midst of a half-decade deceleration, won’t arrest its downward trajectory until at least 2018.

  136. House and Senate lawmakers were on the brink of an agreement on plans to fund the U.S. government and make some expired tax provisions permanent as a deadline to avoid a federal shutdown drew near.

  137. With the most anticipated Federal Reserve decision of the year less than 24 hours away, investors shunned haven assets in favor of equities, while the dollar seesawed.

  138. Natural gas futures slumped to the lowest level since 1999 on Monday. Next stop: the cheapest in two decades.

  139. The U.S. cost of living held steady in November, underscoring scant inflation that is well below the Federal Reserve’s goal.

  140. Jefferies Group, the investment bank whose trading results are seen as a bellwether for Wall Street firms, said fourth-quarter revenue from that business fell 36 percent as fixed-income sank for a fourth straight quarter.

  141. David Cassidy, who correctly told investors to shun Australian mining stocks in 2015, says the worst is yet to come for the industry as China’s economy decelerates.

  142. The oil market doesn’t seem to care about Mario Draghi’s inflation target.

  143. The bond market is often dubbed the “smart money,” with fluctuations in fixed income believed to portend broader market moves.

  144. NG to 1.50 in that Bloomberg article you posted…ugh

  145. Is it possible to wake up and see NG futures up instead of down 3-4% for a change?!?!?!

  146. National security dominated in a debate that featured limited sustained candidate clashes and not a lot of risk taking. No candidate truly excelled, and no one had a dreadful evening. That means the race likely will go into the New Year without much of a change in the rank order of the candidates—the leaders coming into the debate are the winners leaving the debate. Standing out on such a crowded stage remains a real challenge.

  147. The Federal Reserve is expected to raise interest rates on Wednesday, exactly seven years after the central bank cut them to almost zero in response to the deepest recession in the post-World War II era. As this unprecedented era of easy monetary policy closes, here’s a walk through seven years at zero to highlight the obstacles that policy makers navigated to restore labor-market health and enable liftoff. 

  148. Congressional leaders agreed on a fiscal plan that would avert a U.S. government shutdown and lift the 40-year-old ban on crude oil exports, House Speaker Paul Ryan told fellow Republicans during a closed-door meeting Tuesday night.

  149. For a bull market in stocks that has been doubted and derided virtually from the day it began 6 1/2 years ago, the time has come to walk alone.

  150. In the final battle against one of humanity’s oldest and most-feared maladies, an unlikely ally has emerged: the Taliban.

  151. The opening of Mexico’s oil industry is warming up after a slow start.

  152. Chinese junk bonds are getting some help from the nation’s central bank, making them more resilient if not immune to the global swoon in the riskiest debt ahead of the Federal Reserve’s interest rate decision.

  153. Senior Chinese officials are pushing for regulations to boost the amount of steel used in new housing as a way to absorb excess supply exacerbated by a slowdown in the world’s second-biggest economy.

  154. In a new wrinkle on CNN on Tuesday, Republicans in Las Vegas were asked to debate basically one issue — terrorism. If you were hoping to see candidates well versed in foreign policy and national security, the results were … not encouraging. There was a little substance, along with a whole lot of mush.

  155. Tuesday’s presidential debate is as important for the future of the Republican Party’s identity as it is for the 2016 presidential race. Losing control of the party’s message on national security, the establishment Republicans are determined to reassert their policies and eclipse the current front-runners.

  156. Americans say they’re scared. On Tuesday night, Republican presidential candidates each tried to convince voters: I can keep you safe.

  157. U.K. solar companies are bracing for the results of a public consultation on subsidies to photovoltaic installations, with the future of the industry hinging on whether ministers go ahead with their plan for a cut of as much as 87 percent.

  158. China suspended fuel price adjustments as the world’s biggest energy consumer tries to curb demand growth and cut pollution to help . Shares of the country’s biggest energy producers surged.

  159. The yuan rebounded from early losses in Hong Kong’s offshore market, spurring speculation Chinese policy makers are propping up the currency after its discount to the onshore spot rate doubled.

  160. Axel Merk, president and founder of Merk Investments LLC, is betting the Federal Reserve’s first interest-rate increase in almost a decade will drive the yen up against the dollar in the near term, even as he says the Japanese currency will eventually become worthless.

  161. The bond-market’s math is starting to look a little scary for the riskiest corporate borrowers.

  162. Chinese stocks in Hong Kong rallied the most in two months after valuations on the benchmark gauge fell to their lowest level relative to global peers in 12 years. Oil producers led the rebound, while the yuan fell for a ninth day.

  163. With the Federal Reserve decision about 12 hours away, currency traders are buying the dollar amid speculation nothing will derail the start of the U.S.’s first monetary policy tightening cycle since 2004.

  164. Craigs Looks good in theory. But you calculating with a stock which is 2$ below the 90 $ high. 

    I have been trading PM since 2010 stock profit until today 16% (5 Years capital gain no div taken in to consideration) Option play 49%. Good idea but I would  wait for a dip on stocks not at the high.

    I call it tree planting but always for the right price!

  165. stjeanluc – I see Air Liquide trucks almost daily where I work, mostly delivering nitrogen. Compressing air is pretty much the same as compressing nitrogen, and so it has to be kept very cold. But the source gas is much easier to obtain – LOL. 

  166. Mornin Phil,

    FYI from an algo developer: "SPY Update 12/15/15 - Long Legged Doji following a Hammer in price congestion with an expanding price trend. Inflection point targeting 198.66 on or near 12/17/2015 may play a very key roll. Any downside price action tomorrow will likely complete a Three River Evening Star formation indicating a major price top and key resistance at 204.75. Should be an interesting day tomorrow"

  167. 5:30AM EST DAX FTSE CAC up avg 0.5%; Nikkei up BIG +2.6%; Hang Seng +2%; China -0.4%…

    Bonds slightly off; Dollar up DXY 98.29, Brent -2.7% @ 37.69; WTI -1% @ 36.98; and drum roll…

    NG -1.84% hitting a low of 1.782 at 4:30AM then bounced to 1.786  Out.

  168. Chris Lafakis, Moody's Analytics' senior economist: "Lower oil prices act as a tax cut," he says, adding that if oil prices fall from an average of $93 per barrel in 2014 to an average of $63 in 2015, that would be the equivalent of a $90 billion tax cut for the American consumer. "

    Who benefits? Consumer with a tax rebate check to spend. Retailers, Discretionary and Transportation (shipping companies, freight airlines, trucking companies and marine transportation companies).

    Retail and Trannies were bid from June 2014 when the oil collapse started until April 2015, but have slid since with oil plumbing new depths.  What does that say about market participants risk perception vs the media narrative that its all good?  Food for thought.

  169. Phil & Co,  We are hosting an Air Tasting evening here in London.  A few select [guests][suckers] are have confirmed.  We have a a selection of Airs from the Welsh Mountains, the Scottish Highlands and some amazing Italian and French Alps Air.  For those of you who are risk takers we also have a 1945 specially bottled Berlin Air so you experience what freedom inhales like.  It really is a once in a lifetime opportunity to sample some very unique air.  Not to be missed.

    It really will be a very special evening and an absolute investment against inflation.  Only $5000 a ticket which really is a bargain in the current climate where air is diminishing at such a rapid rate due to natural climate change and the use of wind turbines.

    I do hope you can make it.

  170. Good morning!

    $1.80 holding so far on /NG but /NGJ6 bottomed out at $2.024 and still $2.038.  

    Oil holding up around $37 despite weak API report but Brent fell so WTIC and Brent are finally at the same price!  

    WTI Slumps Under $37 After API Reports Unexpected, Large Inventory Build

    So much strange stuff going on!  I imagine this is because Congress approved the export of oil so Brent Traders are simply selling longs while it's generally considered a positive for our side – no one has actually done the new math yet.  

    Russia thinks it will take 7 years for oil prices to recover

    Also, China allowed refiners to raise the price of gasoline to curtail consumption (still the pollution issue) and that's also bad for Brent demand.

    You would think I would be against the oil exporting but I am starting to believe this is the last 20 years of oil as a fuel source so sell it while we can, I suppose (though actually burning it is bad for CO2).   

    Nikkei went wild overnight – all the way to 19,250 but DAX still can't take back 10,500:

    China central bank forecasts 6.8% growth in 2016

    • China's annual economic growth is likely to slow to 6.8% in 2016 from an expected 6.9% this year, the People's Bank of China said in a working paper published today.
    • Other projections for 2016: Consumer price index +1.7%; Producer price index -1.8%; Fixed-asset investment +10.8%; Retail sales +11.1%; Exports +3.1%; Imports +2.3%.

    In China, PBoC adviser Fan Gang said economy is facing adjustments but still has potential to grow over the long term. Fan pointed to continued issues around industry overcapacity, bad loans, and Internet finance as key risks. Separately, Pres Xi spoke at World Internet Conference calling for internet security and global cooperation, while also acknowledging China economy is facing "certain downward pressure." Also of note, China energy names were higher as China temporarily stopped adjusting domestic gasoline prices in response to latest air quality issues – a move speculated as weighing on demand.

    Is the next financial crisis nighCould closure of Third Avenue Fund finally explode the post-crisis asset bubble? The closure of a number of US funds linked to the high yield corporate debt market is eerily reminiscent of the events that led up to the global financial crisis.

    Junk bond market tests nervous investorsInvestors are discovering why high-yield bonds are also called “junk”. After years of ignoring the low credit ratings and indebted balance sheets of companies within the junk bond sector, a wave of redemptions for three funds — forcing two to shutter in the past week — has triggered a frisson across the US fixed income market.

    EU data protection laws approved

    • The European Union has agreed on a sweeping overhaul of fragmented data protection laws that will force companies to report breaches and face huge fines for misusing personal information.
    • Under the new regulations, companies will face tighter restrictions on how they reuse Europeans' data, be forced to observe the "right to be forgotten," and will face fines of up to 4% of revenues if they don't, which could mean billions of dollars for big tech firms like Alphabet, Microsoft and Facebook.
    • Previously: EU to agree on new data privacy laws (Dec. 15 2015)

    French business decelerates after terror attacks

    • French business activity slowed to near-stagnation in December, with the services sector suffering from last month's terrorist attacks in Paris.
    • Putting a halt to a 10-month expansion, Markit's flash services sector PMI dropped to 50.0 from 51.0 in November.
    • The composite PMI index, which combines services and manufacturing, dipped to 50.3 from 51.0 a month earlier, even though the manufacturing figure reached a 21-month high.
    • ETFs: EWQ

    Keep in mind that last Fed day, we had a huge rally and then dropped 20 S&P points on the news:

    If you watched the GOP debate last night, you would think the country was in flames all around us but, apparently – that is how people feel now:

    Good timing on that LA bomb threat – it gave them a fantastic talking point – even though it was a hoax.  Also, one of the 45 mass shootings since the last debate was linked to radical Islam – so they talked about that a lot!  Ben Carson came off very well facing down a moderator who was trying to bully him into a corner – most Presidential thing he's done.  Trump calls the whole thing a joke.  

    As least Russia and China have a plan:  Russia and China are building highly autonomous killer robots - Good for our IRBT stock!  

    "We know that China is already investing heavily in robotics and autonomy and the Russian Chief of General Staff [Valery Vasilevich] Gerasimov recently said that the Russian military is preparing to fight on a roboticized battlefield," Work said at the forum, hosted by the Center for a New American Security in Washington, DC.

    "[Gerasimov] said, and I quote, 'In the near future, it is possible that a complete roboticized unit will be created capable of independently conducting military operations,'" Work continued.

    Additionally, Vyacheslav Khaitov — deputy director general of Russian defense contractor Uralvagonzavod — said it plans to show prototypes of its new combat robots within the next two years, according to RT.

    "We will be able to show prototypes in 1.5 to two years. We are gradually moving away from crewed machines," he said in October.

  171. Limitless hot air/Scott – We got that in the debate last night.  cheeky

    Buy-writes/Palotay – Nice job, you can do a spot at our next live seminar!  Yodi also makes a good point – just because you can give yourself a discount, doesn't mean you shouldn't still be trying to start with a stock that's on sale.

    $1.50/Jabob – Incredible negativity on /NG.  Every article you read.  I was looking at the EIA price of delivered /NG and it has not come down anywhere near enough yet.  /NG is down from a low of $3 last Dec, which is 40% off and that means we should be paying $6/1,000cf, not $10!   Check your own gas bill (if you have one) and you'll see what I mean.  $6 is what we were paying in 1999 and I think people should start complaining to their local regulators about the power companies.  

    Meanwhile, we can lock in low /NG prices for our home by simply buying the UNG 2018 $6 ($2.50)/10 ($1.20) bull call spread for $1.30, which is on the money now so, if you have a $2,000 annual bill – you can put $1,200 into the hedge and, if prices go up over two years, you get as much as $4,000 back to offset it.  That's what hedges are actually for!    If /NG goes lower – then you save the $1,200 on your bill.  

    Three River Evening Star/Naybob – Well straight on 'till morning it is, then….  I agree that low oil prices are like a tax cut but, unfortunately, we've had significantly lower oil prices all year and this is all the recovery we have.  What's going to happen next year if prices go up again?  

    LOL Malsg, that's the spirit!  

    Who's actually supporting Trump:

  172. Phil the NG hedge you just mentioned, that is UNG right? Is there any other vehicle for trading NG options? Also when you talk about it holding 1.80, I guess you mean it is holding in the vicinity, and isn't going much lower since it did hit 1.781, is that right?

  173. Wow, the news guys are really stepping up their anti Trump rhetoric. These guys are really worried now that he is going to win I guess. So am I. 

  174. Sorry Craigs, UNG of course!  


 Sector Performances (Today)

 Thermal Imaging