Comment by phil

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phil
February 3rd, 2016 at 5:44 am
Good morning!  

Well, the Futures WERE up nicely but then Europe decided to go for a dive.  

Asia was just reacting to Europe and us and check out the stick save on Shanghai – 2,700 being defended well.  
Nothing in particular in Europe – they simply don't want to be in equities anymore.  9,500 needs to be taken back on the DAX.




Still, let's keep the BIG PICTURE in mind – on the whole, this is nothing but a healthy wave of consolidation that you SHOULD have after gaining 100% or more in less than 5 years (20%/yr on the average).  Surely we're allowed just one year of pulling back 20% (of the run) before the next rally?  






I know: "What is this "MONTHLY" chart you speak of?  It is a term I have never heard before."  
Amazingly, it also puts the recent "rally" in metals into perspective:




And, when you look at other commodities, you realize how the Fed can say there's no inflation:




How great is that for SBUX?  

It's even cheap to build new stores (and real estate cheap too).  That's a big fundamental people tend to forget – TIMING!  SBUX just so happened to be expanding at a time that the real estate market collapsed and the price of all the stuff they sell AND the price of labor was cheap.  That means that you can't invest in the next big coffee or other food franchise with the same expectations based on what you know about SBUX, right?  
That goes for many things you invest in – sometimes companies came along at the right time.  Like GOOG.  When they started, most search engines sucked and theirs was better so they dominated but we had no habits and no loyalties and their competitors didn't have war chests to fight them off.  Now, even if a search engine was clearly better than GOOG – so what?  It would be a massive, expensive war just to capture a portion of their market share.  
Past results are NOT indicators of future expectations – you always have to evaluate the big picture before making long-term investing decisions (I know – "What are those?").






The thing about meat is that, when people can afford it – it gets expensive because there isn't enough meat for everyone to eat so prices have to rise until demand drops off.  We had a barbeque a couple of weeks ago and spent $200 on steaks for 12 people (they were good ones from FWM).  Steaks are a real supply/demand thing because, if they push the price too high and turn off consumers, the stores are suddenly stuck with something they have to dump quickly.  
Goaaaalll on the 10-year, by the way – hit 130.17 and TLT is just behind at $129 so time to get more aggressive on those. 

Meanwhile, I think we're done falling and /ES just crossing back over 1,900, so let's call that a long along with 16,100 on /YM.  /TF needs to be over  1,010 and /NQ needs to clear 4,200 to be safe and, until then – VERY TIGHT STOPS! 
/CL is testing $30.50 and we'll see how that goes (we're long at $30) and /NGK6 is $2.17 from our $2.14 entry and may not do well today if oil pops (money flows to the hot commodity in energy).  /RB is 97.64 and I think we can call 97.50 a stop and see how that goes since it's the 2.5% line but I wouldn't risk inventories (10:30) – let's just play for a 0.5% (0.005) or 1% (0.01) bounce.
Wednesday's economic calendar
• 7:00 MBA Mortgage Applications
• 8:15 ADP Jobs Report
• 8:30 Gallup U.S. Job Creation Index
• 8:30 Treasury Refunding Quarterly Announcement
• 9:45 PMI Services Index
• 10:00 ISM Non-Manufacturing Index
• 10:30 EIA Petroleum Inventories