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Technical Tuesday – Short the Dow at 18,000! S&P 500 at 2,100!

There, is that clear enough of a call? 

FU people who don't pay, this is a private post for our Members and I've already put out an Alert to our Members (tweeted it too at 6:14) in which we analyzed Germany's ZEW, the Australian Central Bank Meeting, China's Bond Market and the continuing effect of the Doha Failure (see yesterday's post) that had us shorting /CLM6 contracts at $41.50 (now $41.58) in anticipation of a sharp correction into tomorrow's NYMEX rollover (2:35 pm, EST).  As to the indexes, my comment this morning was (and is):

It is tempting, however, to play a Futures short here – in case we are rejected at 2,100 on /ES (now 2,097.50) and that's lined up with Dow (/YM) 18,000 (now 17,995), 4,585 on /NQ and 1,145 on /TF and 17,200 on /NKD.  You know the rules – short the last 2 of the 3 to cross below, but they are all below now, so we short the closest to the top (/YM or /ES) and we stop out if ANY of them go over! 

This is not rocket science folks.  I made the call after IBM had a miss that cost them $6 (48 Dow points) and before GS missed too and they are down $2 (8 Dow points).  Netflix (NFLX) is down 10% on their disappointing earnings as well and the only think holding up the oil market is the Kuwait strike, which is taking 2Mb/d off the market but could end at any moment.  Oh, and the weak Dollar that's been supporting everything this week. 

We don't need to talk about news and the Fed is done speaking for the week and no interesting data until Japanese Trade Wednesday and then Thursday gets busy again but between now and then is earnings and earnings kind of suck, on the whole, with -8.3% earnings vs. last year BUT, because expectations were SO LOW, that's an 8.2% "upside surprise".  I know I sound like your older brother telling you that Uncle Market isn't really pulling coins out of your ear and it's just a trick – you kind of know it's true, but you don't really want to believe it…

Still, skepticism doesn't stop us from making money.  The July /NGN6 contracts we played in yesterday's post gave us a great entry under $2.13 and popped over $2.20 this morning for a $700 per contract gain (which we're happy to take off the table (1/2 off under $2.20 with stops below $2.19 on the rest), of course).

Getting back to the indexes, though, we don't want to be fighting the Fed(s) on this one so we're not going to have a lot of conviction shorting BUT we can play for a nice, technical rejection off 2,100 and 18,000 – especially when we know that, Fundamentally, these are ridiculous levels anyway.  Taking a look at the S&P, we're right back where we finished off last year and we know that was a complete load of nonsense because it collapsed in a puff of smoke over the next 3 weeks.

SPX WEEKLYThat market sell-off was presaged by the cross of the 200 and 50-day moving averages which, at the time, we thought was being manipulated to show fake strenght comming off the September lows.  This is the chart from December 7th, when I warned that:

Money is flowing into equities because, like Richard Gere, it simply has nowhere else to go.  With negative interest rates, if you put your money in the bank, it's GUARANTEED to get smaller.  The Housing and Commercial Real Estate markets are still fairly dead and usually perform poorly in rising rate environments, Precious Metals aren't precious anymore, Energy Investing is suicide and the last time the Fed had a tightening cycle in the 90s, the value of 10-year notes slipped 75% – no one wants to be caught in that trap again.   

Still, I don't believe in a rally that has no Fundamental basis.  Just because money is being forced into the market – that doesn't mean I should follow it when I'm not being forced.  That's just lemming-like behavior and we, as humans, strive to be better than that, don't we?  I know it's hard when ALL of your friends are jumping over a cliff not to do so yourself – especially when you can hear them shouting "wheeeee!" on the way down so you're sure they are having fun and things can only get better at the bottom, right?  

OPEC failed to curtail production at Friday's meeting and oil is diving below the $40 mark and the biggest economic issue we are ignoring in the US is the impact these prices will have on the US energy sector, whose costs are significantly higher than OPEC's overall.  Probably about half the oil in the US is not profitable under $40 and, when recalculating the value of reserves and asset to loan ratios next year – using the 2015 average vs the 2014 average is going to probably put a lot of companies into a technical default by Q116.

So here we are, 4.5 months later and yes, indeed $50Bn of Corporate Bonds have already defaulted, led by BTU going BK.  According to the Financial Times, lists maintained by both S&P and Moody’s of the companies at greatest risk of default have lengthened.  S&P counted 242 so-called weakest links at the end of March, the highest level since 2009, including satellite operator Intelsat and luxury goods chain Neiman Marcus.  

Investors and analysts are now keenly awaiting the US earnings season and a round of lending redeterminations, in which banks are expected to cut credit facilities available to oil and gas companies. The one hope is that earnings bounce back and company cash flows improve,” UBS's Steve Caprio added, “if that doesn’t happen, companies will have debt to pay off and it is unclear how they’ll pay it.”

To that end we're adding a speculative long on SJB for our Options Opportunity Portfolio (OOP), thanks to a very good observation by Hanjongin, who's a brand new Member – so now the pressure is on him as we'll be expecting trade ideas every day! 8) 

As to the S&P itself, like all of our indexes it's primarily Bot-traded – as evidenced by how perfectly the Fibonacci Lines (numbers in the middle) line up with our 5% Rule™ Lines and you can see how well-behaved the index has been within the range.  While we can certainly hang out at these overbought levels for a month or two – it only takes one more straw to break the market's back – and you never quite know which straw it will be.  

We can't force the markets to go lower – even if it's right for them to do so.  All we can do is take advantage of the opportunity to lighten up on our longs as they get back to their highs and press our hedges and, if we're wrong and there ends up being a well-confirmed breakout towards new highs – then the hedges give us plenty of room to put capital back to work as we pick up the stragglers who haven't punched back up to record levels yet.

The nice thing is – there's tons of those stragglers because it's been a very narrow, low-volume rally – leaving thousands of stocks closer to their 52-week lows than their highs.  So yes, you may have missed a chance to get JNJ for under $100 or MCD under $125 but CAT is still under $80 and we just picked PFE in yesterday's chat and AAPL still has a lot of room to run at $107.50 – like I said, THOUSANDS of stocks are still cheap – let's not rush things and make SURE we get the good ones!  

 


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  1. Up close to 15% in 2 months without a significant pullback… Insane!


  2. But I thought that government was the problem:

    https://politics.slashdot.org/story/16/04/18/184221/bill-gates-calls-on-the-us-government-to-invest-more-in-research-and-development

    "Government funding for our world-class research institutions produces the new technologies that American entrepreneurs take to market," he wrote. But while other nations like South Korea and China have drastically upped their R and D spending, the United States' has "essentially flatlined." He said that the rest of the world's commitment to research and development is great, "but if the United States is going to maintain its leading role, it needs to up its game." His call for more government-sponsored R&D also comes as corporations pull back on their commitment to discovery and innovation. With more government investment, he said, U.S. scientists could completely eradicate polio and further decrease the number of deaths from malaria. More funding could also "develop the technologies that will power the world — while also fighting climate change, promoting energy independence, and providing affordable energy for the 1.3 billion poor people who don't have it today."

    And for some reason, people who have no business experience at all (and often no common sense either) but are member of Congress will decide that they know more than Bill Gates about R&D and the funding needed.


  3. EWJ – heck of a pop up this morning, when no move on /NKD dip day before. Bias to the upside.


  4. Another moonshot by Google:

    http://gizmodo.com/googles-parent-company-confirms-plans-to-build-the-city-1771679729

    After dropping hints at a recent event that the Google parent company Alphabet might be building its own urban-scale laboratory, Sidewalk Labs reportedly has about 100 urban experts who are working on the plan, which is named “Project Sidewalk.”

    Building an entire city of the future? Gotta love these guys, making the Jetson's dream come true.


  5. I just spit some coffee out – FU people who don't pay – awesome Phil!


  6. Good Morning!


  7. FU  FREELOADERS!…. :)


  8. ONTY – are there some followers of Oncothyreon here? 


  9. Phil/SJB

    Yes agree -timing is everything.  That's why I am waiting a bit – was considering a bull put spread on it but cost would be higher than your long call – but I HATE buying long options.  IF I did that, I would be legging in since I fully epect the Fed to announce QE4 with CORPORATE bond purchases – following the ECB.  Oh, and I hate spell check so most of my comments are written like a US college grad wth spelling errors.


  10. Phil – "I just spit some coffee out – FU people who don't pay – awesome Phil!… FU  FREELOADERS!…. "

    Don't laugh…????  undercover video of unnamed individuals catching up with a degenerate market gambler who hacked the PSW site and was freeloading on Phil's dime…  next time he will think twice. ???? 


  11. Over 18k. Stop?


  12. Just cannot find the PFE trade in chat from yesterday!!!??


  13. Phil/DIA Puts,

    Appreciate your explanation yesterday regarding the calendar option setup and the premium. Read it multiple times to get it in. comparing with the game of chess – I am able to just think basic couple of moves ahead but you can see way ahead with all possible move combinations. I know it will improve with the number of hours but your inputs make it easy to understand.

    I have seen Pharm making calendar spreads on GLD and maybe get him to explain the rationale behind his setup. Last was buying the june GLD 125C and selling 1/2 at the money weekly calls.

    Regards


  14. Maya1:

    4.5%/Latch – I don't like WDC's business much (see STX earnings) and why mess around?  There's nothing at all conservative about WDC but PFE, for example, at $32.61, pays a $1.20 dividend so he can just buy 500 shares for $16,305 and sell 5 2018 $30 calls for $4.20 ($2,100) and sell 5 2018 $28 puts for $2.20 ($1,100) and that's net $26.21/27.105 (worst case if assigned 500 more, which is 17% off) = $13,105 and, if called away at $30 (10% lower than it is now), he'll collect $15,000, which is + $2,895 (22%) PLUS $1.80 in dividends ($900) for another 7% so 29% that way.  Since you are only shooting for 9% - he can do that with 1/3 of what he wants to make the money on and keep the rest on the side – in case the market collapses and other opportunities come up.  


  15. Good morning!  

    Big Chart – 18,004 is a big WOW! but we'll see if it lasts a day (not likely) and, if not, then it's just a BS spike that means nothing.  

    R&D/StJ – Government R&D is freely shared and so it's the enemy of monopolists, who don't want to see new and innovative products that might disrupt their profit streams or force them to actually innovate and keep up by improving their own products.  That's why this country has ground to a halt – the Top 1% gained critical mass, took control of government and now we have, essentially, an entitled class that controls everything, contributes nothing and sucks the rest of the citizens dry to fatten up their accounts.  They wrap all that up in a flag and get half the country to defend it as "our" way of life – MADNESS!  

    And the worst thing is that there are other countries that are willing to invest (Japan Robots, for example) and they are going to kick our asses down the road because we failed to lay a foundation for the future.

    EWJ/Scott – Sentiment-driven.  We're back to expecting BOJ action – that's why it was a dead short yesterday.  

    Thanks Hanj and good trade idea.  

    ONTY/Scott – Last I remember, they had so-so data in their Jan report and, of course, that caused all the rumor players to bail.  To me, all these biotechs are coin flips and what I really care about is the CASH ($28M), the Debt ($13M) and their burn rate, which was positive because they keep making money off investments they've made (licensing, I think) so, to me, a company like this will give you many coin flips (quarterly reports) before failing or diluting so, at $1.23, I think it's fun for a craps roll and you can play it straight or sell the Nov $2 puts for $1 to get a little discount but, for the extra 0.23, I'd rather own the stock and not cap the upside as a good rumor can send them back to $3 for a $1.67 gain (150%ish).  

    Pharm played this perfectly, going long early last year around $1.50 and getting out on the Phase 1 news at $4+ – because there are 2 more phases after that where a company can still fail…

    Spell checks/Hanj – What's that?  

    Thinking twice/Naybob – Oh please, that's a kiss in NJ.  kiss  We prefer to address our scoflaws with a bit of ultra-V (music is a must).

    Stop/Burr – Of course stop and we can go again on the next dip.  When you are playing without conviction and using tight stops, the move back over 17,950 and 2,092.50 should have stopped you out already.

    PFE/Maya – Wasn't in a portfolio but an example of a nice, safe way to make 15%+/yr.  

    Chess/Pat – Yes, it's very much like that and, like chess, you'll see farther down the line with practice (though people do tend to hit a limit at some point).  One of the saddest days in my life was some time after college when I beat my Dad in chess for the first time.  It was the strangest thing because we'd played thousands of games and he'd gone from spotting me 2 rooks and a queen when I was a kid to an even game but I never, ever beat him and, when I finally did – it didn't make me happy because I realized it wasn't because I had gotten any smarter but because he had lost a step somewhere and, for a guy who was completely driven by his thoughts like my Dad was – there could be nothing worse to contemplate.  We never played again but I replay games we had in my mind whenever I miss him – it's amazing how two people can have such deep conversations without words over a chess board…

    GLD/Pat – I don't apprrove of that kind of trading.  It's really for day-trading experts and fraught with peril.


  16. Phil in your answer to Burr, "go again on the next dip" , did we just go again? I assumed we did, hopefully!


  17. Go again/Craigs – I missed it because I'm being interviewed by the WSJ but yes, that was a good double rejection but SUPER-TIGHT stops!!!   I like /TF at the moment (this exact one) below 1,142.50 but I'd rather play /YM (17,994) and, sadly, /ES is at 2,097 so not close enough to the line (but 2,098.50 was the top before).  So if the Dow pops over – no play but, otherwise, I can't figure out what popped us at 9:50 anyway.  

    Speaking of PFE:

    Late-stage study of expanded use of Pfizer's Ibrance successful; global regulatory applications to follow

    • Pfizer (PFE +0.9%announces positive top-line results from a Phase 3 study, PALOMA-2, assessing cancer med IBRANCE (palbociclib), in combination with letrozole [Novartis' (NVS +0.5%FEMARA], in systemic treatment-naive post-menopausal women with estrogen receptor-positive (ER+), human epidermal growth factor receptor 2-negative (HER2-) advanced or metastatic breast cancer. First-line treatment with the combination showed a statistically significant improvement in progression-free survival (PFS), the primary endpoint, compared to treatment with letrozole and placebo. Full results will be presented at the American Society of Clinical Oncology (ASCO) 2016 Annual Meeting in Chicago, June 3-7. The data will support global regulatory applications.
    • IBRANCE was first approved by the FDA in February 2015, in combination with letrozole, for the treatment of hormone receptor-positive (HR+), HER2- postmenopausal women who had letrozole as initial endocrine therapy. It was approved for the treatment of HR+, HER2- breast cancer, in combination with AstraZeneca's (AZN +0.2%)FASLODEX (fulvestrant), following endocrine therapy in February.
    • Read now Pfizer: Master Of Diversity 

  18. SJB – that's interesting – but open interest is less than 100.  …


  19. NFLX/ St. J – did you cover your puts?



  20. Amazing – the three legged dog known as CLF still manages to avoid being put down. The remarkable thing is not that it is going up, but that it still manages to be in existence since its fall from grace.


  21. I guess the falling dollaris what is propping up the markets and everything else today. We just can't seem to drop anywhere right now.


  22. Lol Winston "he three legged dog known as CLF still manages to avoid being put down" classic line


  23. This will be interesting because the WSJ asked me to speak on this topic:

    "Reporter is working on a story that covers Pension and Hedge Funds that support school reform. The Federation of Teachers oppose school reform and are using a scare tactic with pension and hedge funds: Stop supporting school reform or we will pull our money. What is your opinion about this kind of tactic?"

    So I did a bit of research and found that their premise is total BS and the teachers, who have just 3% of their fund invested – completed a 4-month review of their allocations and found that the Hedge Funds were the worst performing of all their asset classes AND they paid them $81M in fees to lose their money!   The WSJ even published that fact last week – before this new, BS spin was put out by the Funds to make it seem political, rather than an indictment of their crappy performance:

    http://www.wsj.com/articles/nyc-public-employee-pension-fund-may-pull-hedge-fund-investments-1460584765

    • The vote comes a few months after the American Federation of Teachers concluded an analysis of 11 public pension plans, including the one in New York City, that found the funds paid an average of $81 million in annual fees.

    http://www.pionline.com/article/20160418/PRINT/304189975/nycers-pulls-the-plug-on-hedge-funds

    So that's the truth and it's the exact opposite of what the WSJ wanted to hear.  I'll be very curious to see how this article comes out.  

    Does it bother anyone that your currency can bounce up and down like a yo-yo?  

    CLF/Winston – Not dead yet! 

    Another dull market day, on the whole.  

    Oil popped to $42.90 on /CLM6 with /CLK6 at $41.60 – that's a horribly wide gap to have to roll through but only 54,000 left means they can probably make it with just one short drop.  

    /NGN6 topped out at $2.24 ion the end, back to $2.227 now.  


  24. Good morning UNG. Good morning USO. It's this morning's children's book I read to my daughter .


  25. SJB is a good pick when we're ready for the pullback. I put this one on the radar. Now, about that pullback…


  26. Don't get me started on school "reform". Their "reforms" are vaporware.

     All these people want to do is cut their taxes, send their kids to private schools and break the teachers unions. 


  27. Phil/currency bouncing – LOLZ! I thought that was the biggest complaint about bitcoin!


  28. biodies/SJB

    It's also an ignored ETF, which I like -bc those are the ones "retail" flock to AFTER traders like me have already positioned.  I'm a cnadlestick chart guy and use probability for entries – so I agree that it is early – just watching for now -it's a AHBL trade – All Hell Breaking Loose. ha


  29. All of 94 NG rigs remain in operation. Remember that 33% of US electricity is produced from NG, so that's 3,650,000 MWh per day. And don't forget the Global Warming Hoax that adds +5F to summer temps (increases air conditioning use). Damn you Al Gore!


  30. Take three on /ym. 


  31. Hanjongin – thanks for the info. I recently stayed up all night learning R programming. Love it. Using some statistical models for position entries (e.g., quantmod library). I hear python is taking over R in a lot of areas (better and more developed libraries) so I picked up a python data analysis book and trying my algorithms in that as well.


  32. Phil – top six banks Yoy Q1 –  FYI, F-Ugly Goldman Sachs update from this AM Q1 2016 report. Enjoy, Out.


  33. Reform/Rexx – Amen!  And I say that because they want all our kids attending bible school, where they can learn 'em proper without all that liberal science nonsense that threatens their pollution profits.  Remember the last time they let kids care about something – they forced poor Nixon to clean up the environment and then we had clean air and water for decades!  Can we afford another 40 years of blue skies and clear waters?  Can we have a nation full of kids who don't want to travel halfway around the World to kill people they don't know?  Can we afford to have a nation of kids who understand what $20Tn of debt is?  No, my friend – this must be STOPPED and the best way to stop it is to stop the ideas from ever forming!  

    Bitcoin/BDC – Relatively stable by comparison!  

    LOL BDC – it is going to be a hot, nasty summer.  


  34. Phil I did noticed your positive remarks on CAT. I normally have played Back ratios but feel the stock at 80, under present circumstances is well above the 200 day average. I was still stuck with 60 up to 75 Putters at the time Stock trading at 58 and 60 where they were well ITM but I just rolled and now they all OTM. I was actually looking for an other dip to start something.


  35. Don't know if I allowed to post links on here so Phil if I am not, I apologize in advance but this made me laugh:  http://www.zerohedge.com/news/2016-04-19/concerns-about-dennis-gartmans-life-emerge-oil-approaches-44


  36. /SI/Phil

    Would you short /SI up at this level of 17.00 Phil.?


  37. NFLX / Rexx – Didn't play at all… Not my cup of tea. I was posting for people who like to gamble on these earning plays.


  38. Phil – Thought Police – Looks like you've had a bit too much to Think – ROFLMAO!!!

    "this must be STOPPED and the best way to stop it is to stop the ideas from ever forming!"

    Yes, best not to let them ever form, as ideas are bulletproof.

    This is how your suspects might line up and this is how trying to stop ideas might end… Out.


  39. Phil / CIM – Thanks – i sold the long calls on that one, and will wait a bit on the short puts.  Understand the run-up so the call makes sense ( these are covered by stock i both earlier).  The short puts i'm holding off for now.  

     

    IBM – Thanks for your input and for confirming your price targets and the BCS ( i saw this last week but had  brain fart on it and forgot)   I am legging into this one by selling the 165 calls now, and waiting for the dust to settle to buy the 140 calls.  Looks like there may be some support around 141 ish at eh 200 MA, so maybe there i'll sell the calls.  BTW i sold some May 20 150 calls as well at 1.8 that i'll be cashing out, following your close out of the 130 call post so even though i was out of my positions, i agreed with your view that the stock had run its course in the short run.  I've been in and out of IBM this year and it's been a good trade.  Now waiting up the dust to settle and buying the low leg of the BCS.  The IBM con call lost it's feed yesterday so had to wait for transcript.  Mike was a bit to optimistic ( as usual) about everything…  However a positive note was that the cash flow seems to be coming in strong, and i think there is some upside to this closer to the 12 than 11, they he reiterated the 13.5 EPS but this may be at risk given run rate of earnings. The run rate on earnings was a bit low for the first half.   They are still struggling with closing large deals.  IBM must really start to turn the corner in the late part of this year ….. showing a stem to the EPS.  But it should have some volatility which will be good for us.

     

    BTW – sold the May 150 calls into earnings and was able to pocket the gain.  I did this because the post last week on IBM …. a 70% gain in a week… thanks


  40. ONTY – decided to take a small stock (and options-puts and calls of course) position, to ride along with the new Pres/CEO who was granted options on 2.8+ million shares with cost of 1.19. First 25% vests in a year, and I expect he'll do his damnedest to make it worth at least a million. Plus, is local and will check out their shareholder meeting in Seattle in June.

    http://ir.oncothyreon.com/releasedetail.cfm?ReleaseID=962442

    Bot shares, sold Nov 2 calls, GTC sold Nov 1 puts, net .815 cents per share. IF pops by November and shares are taken away, i'm good with 145% gain (249% annualized).   If makes new closing low below .90/share, close out stock, let calls and puts ride…


  41. Phil how low are you looking at on tf and ym to lock profits?


  42. hot, Hot, HOT in Seattle!

    http://cliffmass.blogspot.com/2016/04/the-warmest-april-day-in-seattle-history.html

    and supposed to be warmer today..


  43. Yodi – CAT – I gave them a nice fur stroking in Cat People?  Additional insight can be found there and in the comments from CAT investors. "Good piece, you have done more to explain CAT's inexplicable endurance of SP support in the face of declining performance than any "long" I have read." Out.


  44. Banks/Naybob – MADNESS!  

    Wow, TSLA coming down fast now – helter skelter!  

    When I get to the bottom I go back to the top of the slide

    Where I stop and I turn and I go for a ride

    Till I get to the bottom and I see you again



    Look out now!

    Helter skelter

    She's coming down fast, don't let me break you

    CAT/Yodi – IF the global markets are booming, THEN CAT is an obvious choice because, eventually, we'll need to build something, somewhere.  Just an example of the many, many material-adjacent stocks that aren't participating in this financial engineering rally.

    So, if you want a hot stock – pick one where their earnings are all theoretical.  Theoretical earnings allow for infinite growth while real earnings in the real world are BORING!  

    Links/Han – As long as they are relevant or at least funny but, as I've told Naybob many times – if the link is a joke – let people know before they waste their time.  That one is funny though – I don't know what Gartman possibly could have been thinking at the time…

    Submitted on 2015/03/26 at 12:02 pm

    Gartman/Albo – I'm telling you, this forecasting gig is tough…  Good ZH article on his idiocy circa 2012 here– makes no difference though, he's still a star guest because he follows the script.  He's willing to say whatever they need him to say and they, in turn, burnish his reputation to increase his impact with the sheeple and everybody wins (except, of course, the sheeple who follow this idiot).   

    Submitted on 2016/01/12 at 3:34 pm

    Gartman/StJ – He's a whore!  He'll say whatever they want him to say to get on TV.

    /SI/DM – Where were you at $14.50?  No, I wouldn't chase it but we still have a lot of SLW longs in the LTP.

    Dream Police/Naybob – That's an oldie/goodie.

    IBM/Batman – I don't think they are too optimistic.  It's like turning a battleship into the waves and the waters are rough and all the weak hands are bailing but, if you interview the captain – he just says "we're changing course and we'll get there on time".  The same goes for the deal pipeline, IBM is a measure twice, cut once kind of company – they aren't running things to make Wall Street happy.   After 117 years in business, you'd think people would cut them just a little slack…

    How low/Burr – I don't have a pre-conceived notion.  If you watch me during the Webinars, once I enter a trade I pick 3 other indexes to watch and, as long as 2 of them are going my way – I tend to stay in.  When 2 of the 3 go against me – I don't need to wait for confirmation to get out.  And, of course, 1,135 on /TF is going to be a little bouncy from 1,145 so 1,137 is weak and, if that fails, THEN it might be heading for 1,130, which hasn't really been tested from above and needs to be (200 dma).  

    Right now, I'm looking at 2,090 on /ES and if that line breaks up – then cut and run on /TF and /YM 17,950 (now 945) and /NQ 4,520 (4,518 now) and /NKD is right on 17,100 – so that's a good line to watch too (and it's the laggard for a new trade, with tight stops over that line).  


  45. Ideas / Naybob – Ideas are bulletproof except ideas on how to deal with bullets!


  46. /SI/Phil.

     

    Sorry Phil

    My question Phil was would you short /SI (Silver) up here at 17.00.


  47. In my task to achieve 24% per year we do have GILD as one of the three stocks. GILD XOM and NKE

    Today the weekly caller 93.5 odf GILD was 100% ITM meaning it could be assigned any time. I did offer to close for the Market ask price and it was filled. So today 4 day before the next roll we sold the Apr5 96.5 caller for a credit of 4.10 giving us a net premium of 1.103 even that we only need .22 cents to make our 12 month goal. we will see how this will pan out.


  48. Take 3 on ym is working….


  49. Something in the air TSLA down 9.16 APPL down .95 and GOOGL down 13.70 


  50. Kick in the 17900 buy program!


  51. I stopped at 17930 for a bit of a profit.  


  52. /SI/DM -I wouldn't short it because I'm generally bullish on gold and silver and it's not so overbought that I'd trust a technical short (maybe at $20) – especially with the Dollar below 94 and gold over $1,250 – what the signal that makes you want to short it all of a sudden?  

    Nicely ahead of schedule, Yodi.  

    Turns out /NQ had the all-star dip of the day (so far).  

    Nikkei held up on QE hopes alone:

    Big move for copper:

    Something/Yodi – Possibly some reality as to valuations led by earnings disappointments.  

    Good job Burr.  My brother just made $600 on /TF and I pointed out to him that $600 200 times a year is $120,000 – no need to push it when you can stop there and lock in profits.  Learning to win consistently, even if it's small, is so much more important than anything else you do and that all starts by taking those profits off the table consistently.  


  53. Phil –  In the USO UCO trade we have on, the short July 9.5Puts are currently up 50%.  Sold at 0.94 and now 0.48.  

    I only have 2 contracts, so would you think to roll up the puts to sell more premium?  Since we expect /CL to continue to rise in the summer to 45ish, how about rolling up the 9.5's to something higher?  


  54. Ratio analysis has its pros and cons, but when two assets that normally have a strong correlation suddenly break down, it’s obvious something is wrong.<p>That’s exactly what has happened with the gold-silver ratio and the CPI.<p>As uber fund manager Dan Tapiero shows in this video, these two assets have …


  55. anyone thinking about ILMN down here?


  56. IBM quite a down -9.66


  57. “<b>The way things are supposed to work is that we’re supposed to know virtually everything about what [government officials] do: that’s why they’re</b> …


  58. The debt slaves are starting to revolt

    If we could just get consumers to borrow more, so that they spend money they don’t have on things they don’t need, in order to boost GDP and corporate profits, all would be fine.<p>That’s the current meme among economists.<p>Since 68.5% of US GDP is related to personal consumption expenditures, boosting …


  59. Iceland’s Water Cure

    On a frigid February day in Reykjavik, I stood bare-­chested and dripping wet just inside the dressing room at the Vesturbaejar pool, facing a long, cold walk to the outdoor hot tubs. My host was stoic, strong, a Viking. I was whining.<p>“I just don’t want to go out there,” I said. “How do you make …


  60. There must be a pretty big bet out there that LL isn't going to make it. As an example, you can take a Jan17 synthetic long position in LL ATM (strike 15), for net 35 cents debit (sell the 15 puts, buy the 15 calls). Generally the theory goes the calls should come at a premium to the puts because of the unlimited upside they carry. Here, at $35 debit per contract, not much premium is built into the upside.

    You could give away $3 on the upside strike and take the 18 calls at 2.65 (still selling the 15 puts) and take a net credit 70 cents and hold a great long play with cash in your pocket.


  61. Overnight a historic event took place when China, the world’s top gold consumer, launched a yuan-denominated gold benchmark on Tuesday as had been …


  62. It’s shaping up to be an uneasy year in Silicon Valley. Funding has slowed, downrounds are kicking in. Once high-flying startups are cutting perks and laying off staff. They’re also afraid to pursue exits via public markets, leaving the tech IPO market a wasteland.<p>Now, investor skepticism is …


  63. The 2016 OECD Integrity Forum starts today in Paris, France. Next week, China holds its own B20 anti-corruption forum. But in a world in which there has recently been “an unprecedented level of cross-border cooperation in enforcement” to counter fraud and corruption, there is also stark evidence …


  64. Following a dramatic deterioration in official diplomatic channels between the US and Saudi Arabia when over the weekend the Saudis threatened the …


  65. Phil – If /ES below 2090, /YM below 17950, /TF below 1135, and /DX not over 94, would you short the laggard?


  66. 2016 has been something of a mixed year when its comes to the performance of major assets.<p>Gold and oil have witnessed huge rallies since the chaos of the year’s first few weeks, while equities in Asia have taken a beating as growth in China starts to slow down.<p>To illustrate the huge discrepancies …


  67. What happened to Goldman Sachs Group ’s Investing & Lending business?<p>The bank said net revenue in its Investing & Lending unit fell a jaw-dropping 95%. Last year, the unit brought in revenue of around $1.7 billion in the first quarter. This time around revenue was just $87 million.<p>That’s a tiny …


  68. U.S. stocks are up 14.5% from their Feb 11 low, with the S&P 500 hovering a hair’s breadth away from the all-time high set nearly a year ago, all thanks to a pair of acronyms: FOMO and TINA.<p>FOMO is the “fear of missing out.” TINA stands for the notion that “there is no alternative” to equities …


  69. Yahoo may be deeper in trouble than ever, but its CEO Marissa Mayer will cash in no matter what happens.<p>Yahoo may still be painfully losing the war …


  70. <b>(CNN) —</b> Katanga province in the Democratic Republic of Congo is blessed with enormous natural wealth, including vast deposits of precious minerals such as diamonds, gold, and tantalum.<p>Katanga saw a spectacular mining boom around the turn of the century, when President Laurent-Desire Kabila and then …


  71. WASHINGTON — The Supreme Court on Monday refused to revive a challenge to Google’s digital library of millions of books, turning down an appeal from authors who said the project amounted to copyright infringement on a mass scale.<p>The Supreme Court’s brief order left in place an appeals court …


  72. <i>Some critical observations on investor positioning from BofA’s Michael Hartnett</i><p>On April 28th the current bull market in the S&P500 will become the …


  73. The world economy is nearing what international policymakers fear could be a dangerous turning point, as populist uprisings in the United States and Europe threaten to unravel decades-old alliances that have fostered free trade and deepened economic ties.<p>The tension has reached boiling point in …


  74. David Bianco and the equity strategy team at Deutsche Bank think there could be another big rally in stocks.<p>And then comes a big sell-off.<p>In their latest long-term update on the S&P 500, Bianco’s team argues that another 25% rally could be coming to the stock market that will last into 2018.<p>This …


  75. Sen. Bernie Sanders’s overnight trip to the Vatican last week was parsed mostly as a campaign tactic — whether this was a wise use of time with the New York primary approaching. Sanders’s supporters relished the contrast with Hillary Clinton. While the Vermont senator went to the Vatican and met …


  76. oil and gas inventories aside, with ILMN down 23%, NFLX down 12%, the usual tech darlings are too risky to plow cash into looking for alpha. There's nowhere else to put cash right now except energy. It's the only place where you have a real chance of seeing 20% returns from here.


  77. “The traffic to our polling hotlines has been pretty significant,” Clarke told ThinkProgress.The post Closed Stations, Broken Scanners, And Other …


  78. <i>Lindsey Piegza is the chief economist for investment bank and brokerage Stifel.</i><p><b>Harlan Levy:</b> What do you think about the shrinking GDP?<p><b>Lindsey Piegza:</b> …


  79. When the departure of just <i>one</i> resident sends your state’s legislative budget office into a panic – it might be time to take a closer look at your tax policies. Such is the current predicament in New Jersey, where the relocation of hedge-fund manager David Tepper to Florida is causing serious …


  80. “The risks are very evident,” analysts wrote.<p>It’s the billion dollar question: Where is the U.S. economy headed?<p>Well according to Citigroup, likely not toward meteoric growth. On Friday, Citigroup’s head of North America Economics, William Lee, downgraded the bank’s forecast for the U.S. economy in …


  81. NEW YORK (Reuters) – After several false starts over the last two years, U.S. fund managers are betting that energy stocks have finally hit bottom.<p>Firms including T. Rowe Price, Fidelity, and American Funds have been adding shares of exploration and production companies that they say have the most …


  82. Unless you’re tracking expenses carefully, it can be hard to tell whether your city’s cost of living or your own spending habits are the cause of your financial troubles.<p>Using the 50-30-20 budgeting rule, for example ? in which 50 percent of income covers necessities, 30 percent is for …


  83. <i>Wired</i> ran an enormous profile on mysterious AR startup Magic Leap today, written by legendary tech journalist Kevin Kelly. It’s incredible, and you should read it, if only because Kelly’s obvious love and enthusiasm for virtual and augmented reality is infectious and energizing.<p>But the piece also …


  84. UCO/Burr – In the OOP, we have the short July $8.50 puts but, either way, at $10.38, I'm not worried about them not expiring worthless so what would we want to change?  You can play with it if you want to – you can always sell more and take more risk but I prefer to let the trade make it's 100% and keep an eye out for a fresh opportunity (like UNG earlier this week).  

    ILMN/BDC – I don't think of them at any time…  They just warned on Q1 so you might want to give the downgrade police a chance to rethink them first.  Their p/e was crazy-high anyway and is still high (44) after a 23% drop.  As to the company itself – miles outside of my expertise – how do we know good gene-sequencing from bad gene-sequencing and how do we know what kind of competitive pressure they face with all these newer, cheaper companies popping up?  It's very possible though, if you are a fan, that the new CEO is just kitchen-sinking this quarter so he can look good going forward. 

    Illumina shares tank after big revenue miss

    Illumina's stock dropped more than 20 percent after reporting preliminary first-quarter revenues well below expectations.

    LL/BDC – I thought they would pop better over $15 but holding it is nice.  Recovery for them is still a long, slow process.  

    Laggard/Burr – Yep but assuming they are going in the right direction, of course.  

    Energy/BDC – That's why I'd rather stick with cash – those energy stocks jumped back too much already for a "what the hell, I have nothing else to play" trade.  


  85. Following up on my above remarks on GILD and for those who follow the progress

    Here the updated spreadsheet on all three stocks

    https://docs.google.com/spreadsheets/d/14M1S8fE4QXm3GFUb_W5js-tGx8myd-Ucu_Z6uHT7now/edit?usp=sharing


  86. StJL – "Ideas / Naybob – Ideas are bulletproof except ideas on how to deal with bullets!"

    Double entendre indeed. Bullets are a sticky wicket. One can always read DC vs Heller US vs Miller ; and US v. Cruikshank to gain further insight into the 2nd amendment.  Once one does this, they learn, its not really about the 2nd amendment at all, its about history repeating itself, but you probably already know that.


  87. Naybob – People wrapping themselves in the constitution rarely have the interest of the ideas behind the constitution in mind. The same could of course be said about people wrapping themselves in other documents!


  88. Bullets/ideas- that's easy. Lock and load.


  89. for those that bought UNG May calls at 0.16 with me, you're welcome


  90. OOP kicking ass, up $19,000 in the last 10 days and we hardly changed anything (mostly took stuff off the table to get more cashy):

    We're finally back on track on this one!  


  91. I have to run to a meeting, will be back this evening!  


  92. AAPL down to 106 from 112 in 3 sessions.  Is that because of funds getting nervous that they will miss the numbers next week or they know something we dont?


  93. CF was taking crap and downgrades for awhile. Today's candle is bullish. DBA had a sharp reversal and CORN finally cracked the 50-day in a very bullish way. These have been significant heart-ache laggards for a couple of years but that's review-mirror stuff now, how will they do this year? that's always the question!


  94. Rookie/AAPL  -Nikkei last week said that AAPL is lenthening a production cut of its Iphones into another quarter. 102.92 is my tgt for down move as that wld be a gap close.


  95. Long UNG with a stop at $6.85 on a daily close. Tgt is 7.80 to 8.30.


  96. LOW   10,000 Oct  $80 calls and $65 puts trade mid market .  I'll confirm OI change tomorrow


  97. Is U.S Steel (X) really worth almost 3 times as much as it was just two months ago, or was it badly mis-priced then at $7 ?  

    Time will tell.  I know things are looking better in the steel industry, but the move looks excessive to me.


  98. Rookie,Hang- Don't we see these Apple rumors every quarter before earnings as "they" try to manipulate us? So while they may be true we should probably take it with a grain of salt. After all they just popped because of a different rumor. Btw, saw a story that they hired a top Tesla engineer for the car project on Bloomberg earlier today. 


  99. Hopefully /ym back to 18 and then a fail for another run down to 17.9 if dx doesn't drop more. 


  100. Was at work all day. Got in at last hour of trading and gambling with three trades: /ES ( 1 short)  and /NQ (1 short, 1 long) made $266 net.


  101. AAPL / Craig – I still don't see the logic with that Apple car! There is just no profits to be made in this EV business. By the time they get to the market, BMW, MB and Audi will probably have the luxury side of that market cornered and they have been making cars for decades so they have a good grip on production. What does AAPL know about making cars… We mock TSLA, but they would face the same issues. It's just a rumor for now – my guess is that they will work in interiors ergonomics and the technology that goes with it. That would make more sense.


  102. Intel improving profits the old fashioned way – laying off people:

    http://talkingpointsmemo.com/news/intel-lay-off-twelve-thousand-employees

    Because shareholders are not happy with only the $11B in income!


  103. Who could have foreseen that:

    http://talkingpointsmemo.com/news/kansas-lawmakers-abandon-brownback-budget

    Brownback blames the economic sluggishness — the state ranked 43rd in total personal income growth in 2015 — on slumps in agriculture, energy production and aircraft manufacturing.

    "You've got some global issues that are going on that we have absolutely no control over," Brownback told reporters at a recent news conference.

    But Scott Drenkard, an economist for the conservative Tax Foundation, told legislators last month that farmers and business owners appeared to pocket the extra money from the state's recent tax cuts rather than use it for expansion — "tax avoidance, not job creation."

    The state's personal income tax collections dropped 24 percent during its 2014 budget year, down $713 million. They've increased since, but the official projection for the 2017 fiscal year is less than $2.5 billion — still 15 percent off the 2013 peak.

    Meanwhile, Kansas reported gaining only 800 private-sector jobs between March 2015 and March 2016, a mere 0.1 percent increase.

    What a surprise, the job creators don't create jobs but keep the money instead! You cut taxes and for some reasons, you get fewer tax revenues and good jobs are not created. Where have we seen that before – right every time it has been tried! But this time it will be different. So now they have to take drastic actions but even the hardline GOP guys are not willing to walk the plank because they are up for reelection this year. The interest of the voters always comes first but right after reelection concerns:

    Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.

    Lawmakers are worried about approving any further reductions in an election year. All 40 Senate seats and 125 House seats are on the ballot in November.

    Taking money from teachers pensions – always a winning play! How do these people sleep at night?


  104. Brazil’s Rousseff Vows to Fight After Losing Impeachment Vote

    Brazil’s President Dilma Rousseff on Monday pledged to continue fighting an impeachment process that she considers a threat to democracy and a …


  105. As the WSJ wryly put it this morning, “Officials at the European Central Bank surely celebrated Tuesday’s survey showing the last barrage of asset …


  106. Anne Carter had her Tesla Motors Inc. Model X sport-utility vehicle for a few days before the $138,000 electric vehicle suffered a mechanical malfunction.<p>On a recent morning, the car’s falcon-wing doors wouldn’t open as she prepared to drive her children’s carpool to school. “It’s a bummer; you …


  107. PARIS (Reuters) – French authorities have sent McDonald’s France a 300 million euro ($341 million) bill for unpaid taxes on profits believed to have been funneled through Luxembourg and Switzerland, business magazine L’Expansion reported on Tuesday.<p>It said tax officials had accused the giant U.S. …


  108. <b>The Unprecedented Real Estate Bubble In China by Gary D. Halbert</b><p><b>FORECASTS & TRENDS E-LETTER<br>by Gary D. Halbert</b> <b><br>April 19, 2016</b><p><b>IN THIS ISSUE:</b><p><b>1.</b> <b>China</b> …


  109. Last month was the hottest March on record by far, NOAA confirmed Tuesday. March was 2.2°F above the 20th century average. This anomaly (departure …


  110. The talking speaker started as part of a secret augmented-reality project and ended up as a surprise hit.<p>By Joshua Brustein | April 19, …


  111. Police-equipment maker offers local officials guidance on contracts and trips to conferences<p>As cities confront growing pressure to outfit their police officers with body cameras, Taser International Inc. has coached local officials on how to avoid common bidding procedures, allowing it to secure …


  112. In a rare speech, Fidel Castro says that he will die soon

    Cuban revolutionary leader Fidel Castro delivered a valedictory speech on Tuesday to the Communist Party he put in power a half-century ago, telling party members he would soon die and exhorting them to help his ideas survive.<p>”I’ll be 90 years old soon,” Castro said in his most extensive public …


  113. SAN FRANCISCO — Intel, reeling from a collapse in demand for personal computers, said on Tuesday that it would cut 12,000 jobs, about 11 percent of its work force.<p>The company, the world’s largest maker of semiconductors, announced the move along with its first-quarter earnings, which were slightly …


  114. “The Republican Party is becoming the party of labor.”<p>Former New York City Mayor Michael Bloomberg.<p>NEW YORK — The Grand Old Party is no longer the party of business, Michael Bloomberg said Tuesday.<p>“The Republican Party is becoming the party of labor,” this city’s former mayor said in a keynote …


  115. The experiment continues…<p>From CBS News today:<p>Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut …


  116. When 195 nations clinched the Paris Agreement in December, it was heralded by some as a monumental achievement—the beginning of a process that would …


  117. According to a recently released book written by finance scholar Ning Zhu, unless China’s central government is able to quickly confront the multi-faceted and intertwined challenges facing the country’s economy, the outcome will be catastrophic.<p>“I think the current model is going to lead to a …


  118. The argument for the legalisation of cannabis has been won. Now for the difficult bit<p>IT IS like a hash-induced hallucination: row upon row of lush, …


  119. Yahoo Revenue And Earnings Sink As Bids Roll In

    Verizon and other suitors are lining up to buy Yahoo. What are they getting?<p>A declining business, as Yahoo’s first quarter earnings report showed on Tuesday afternoon. Yahoo reported $0.08 adjusted earnings and $1.09 billion in revenue, both down significantly from the same quarter a year ago. …


  120. (Reuters) – Five large U.S. banks cut more than $5 billion from their expenses during the first three months of the year, but it was still not enough to stop the financial bleeding in what was by many measures the worst quarter for Wall Street since the financial crisis.<p>Volatile stock and bond …


  121. GDPNow Holds Steady at 0.3% as Low Inflation Adds to GDP, Housing Subtracts

    The Atlanta Fed GDPNow Forecast remained at +0.3% following recent economic reports.<p>Today’s grim housing report subtracted a bit from GDP, but the …


  122. Swarms of graphene-coated nanobots could be our best hope yet of cleaning up the murky oceans, with scientists demonstrating that new microscopic underwater warriors can remove up to 95% of lead in wastewater in just 1 hour.<p>The invention couldn’t have come at a better time, with ocean pollution at …


  123. Limbaugh’s radio show is on the rocks and his station is bankrupt, but the right will survive when he’s gone<p>Is the clock ticking for Rush Limbaugh’s infamous radio show? The man who has done more than anyone besides possibly Roger Ailes in defining the modern day conservative movement is facing a …


  124. Ask anyone working in a newsroom what they think of their audience, and you’ll hear a variety of answers. Over the past couple of years, Andrew Haeg …


  125. CURITIBA, Brazil (Reuters) – A sweeping investigation into corruption in Brazil is targeting more infrastructure projects for this year’s Olympic Games than previously made public, a federal prosecutor told Reuters, citing testimony from construction companies and executives.<p>Carlos Lima said the …


  126. Paulson’s funds plunge nearly $2bn on Allergan and Valeant bets

    John Paulson’s losing bets on Allergan and Valeant have contributed to a near $2bn fall in his funds’ assets in the space of five months, taking the …


  127. <b>Growth Trends – Looking For Growth In The Right Places by Dan Roarty, James T. Tierney, Jr., AliianceBernstein</b><p>When the market is fixated on …


  128. Barack Obama’s landmark healthcare reforms have been dealt a blow by UnitedHealth, the US’s biggest private insurer, which is abandoning most of the …


  129. <b>This Market Cycle Diagram Explains The Best Time To Buy Stocks by Jeff Desjardins, Visual Capitalist</b><p>Is it possible to time the market cycle to …


  130. Apple, Google, and Facebook all have their sights set on a share of the online streaming market.<p>Amazon caused a significant tremor in Netflix’s share price earlier this week, by announcing that its Prime Video streaming service will become a standalone offering and go head-to-head with Netflix. But …


  131. Good evening Phil.. I am trying to look back on your comments on TSLA.  Using the search feature is not satisfying — Feb 10 2016 is the first tag.  Is there a better way?  I know you have discussed many times recently.  Looking to short it soon, but the puts are pricey.  Thanks

    Have one long on the Nasdaq but its not going anywhere.. put in tight stops and going to bed.


  132. /ES soldg 1 @ 2089,50, anyone else playing this?


  133. I'm short at 2088……see what happens tomorrow….Still think this may run higher,…for no good reason….


  134. good luck to us Sun


  135. last futures I played /NG long I was stupid and left overnight and didn't want to keep adding so lost $1500, now a little gun shy but by Phils lines great entry – either that of /TF at the time


  136. or /TF, not of


  137. I may look at it as a swing type position, adding if it goes higher…maybe around 2100 or 2110….depends on what happens…good luck to us both!!!


  138. Out 2087.50 +100, just wanted a win for confidence – good luck sun, still think its a good trade 


  139. Thanks…going to sleep on it…..hopefully not wake up to some manipulated disaster around 2100!


  140. any win is a good win!!   Especially in the futures…


  141. StJL – "People wrapping themselves in the constitution rarely have the interest of the ideas behind the constitution in mind. The same could of course be said about people wrapping themselves in other documents!"

    Although I understand it well and have encountered it a bazillion times,  unfortunately your first statement is an opinion based on generalizations which are not logically supported. Your second statement is non sequitur attempt at humor and I get it.   I will be direct, are you familiar with the court cases I cited for your benefit?  The reason I ask is, if one is going into battle they should be prepared.  This is why we have boot camp, to weed out the unworthy, because all they will do is get in the way and cost lives, their own and others.

    Unfortunately, the whole 2nd amendment, gun control issue is tied to that very concept and necessity.  If one knows the genesis then one can proceed in a logical fashion in an attempt to get to the root of the problem, lest they be failing about and shooting in the dark, pun intended.  Did you know that NOWHERE in the 2nd amendment is a PUBLIC right to bear arms spelled out and codified?  Just sayin, if one knows the genesis it helps… December 16, 1689.


  142. StJL – and you know it is not my intent to be snarky or anything.  The whole NRA rangle just pisses me off, nobody seems to be able to exert any common sense, which I am sure is one of your salient points. Out.


  143. Good morning!  

    The morning lift is like clockwork lately.  Good job playing the sell-off last night but they are trying to run us back up.  Nas is still way down.  

    INDU DAILY

    INDU WEEKLY

    SPY 5 MINUTE

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    I assume that's a rollover day for the VIX – people a lot more worried about May than they were with April.

    XLF WEEKLY

    GAAP (Generally Accepted Accounting Principles) have been tossed aside as investors lately opt fornon-GAAP, which always appear better. The other day Pepsi (PEP) and Morgan Stanley (MS) reported a large difference between the two different measures.

    seinfeld animated GIF

    Given better views for non-GAAP stocks were able both stocks were able to beat lower expected earnings allowing both stocks to rally. Pepsi warned of weakening global economy but increased non-GAAP earnings which included write-offs and one-time tax charges. This allowed analyst much lowered views as a hyped-up beat of those expectation. Morgan Stanley earnings net of DVA (Debt Valuation Adjustment) allowed the company to increase earnings substantially thus beating lowered expectations which allowed the stock to rally. For banks, beating much lowered earnings expectations along with non-GAAP trickeration and much financial media cheer leading—nothing could be finer.

    Given those awesome bank earnings, financials led markets higher once again as overseas markets were also strong.

    It may not be a shock to investors that Alan Greenspan has surfaced once again proclaiming in interview with Sara Eisen that quantitative easing did what it was supposed to do, which was to inflate stock prices and drive multiple expansion. All of this is precisely what we've been saying all along, which is that QE has always been about one thing, and that is to take wealth from many (savers), and transfer it to a select few (asset owners).

    KRE WEEKLY

    4-19-2016 3-11-45 PM USO

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    VIX WEEKLY

    Shanghia fell 2.5% and, significantly, failed to hold 3,000 and then failed to take it back.  Hong Kong down 1% and the rest of Asia was kind of flat, as is Europe.

    Don't forget, the ECB goes tomorrow so it's Draghi Fever time!  Probably we'll all flatline into that.  

    Wednesday's economic calendar

    Japan exports fall as economic gloom persists

    • Japan's exports fell for a sixth straight month in March as slowing growth in China, soft global demand and a strengthening yen threatened to hold back the country's recovery.
    • Exports dropped 6.8% from a year earlier to ¥6.4T, while imports sank 14.9% to ¥5.7T, resulting in the highest trade balance since October 2010.
    • The weak indicators will add pressure on the government and the BOJ to stimulate growth, while a series of earthquakes that struck a southern manufacturing hub last week could hamper supply chain activity ahead.

     

    Japan manufacturers' mood up; yen rise weighs on outlook: Reuters TankanConfidence among Japanese manufacturers rose in April but it is expected to worsen again in the coming three months, a Reuters poll found on Wednesday, reflecting concerns about the yen's rise and tepid overseas demand. The Reuters Tankan, which tracks the Bank of Japan's quarterly tankan survey, found the service sector's mood soured in April and saw it getting worse because of the weakness in private consumption, which accounts for about 60 percent of the economy. The service-sector index fell to 23 from 24 in March and is seen declining to 15 in July, weighed on by retailers, information/communications and transport/utilities. The Reuters Tankan sentiment index for manufacturers rose to 10 in April from 6 in March, led by materials industries such as oil refineries and steelmakers. It is seen sliding back to 6 in July.

    All Japan Sovereigns Yield Below 0.4% as 40-Year Hits Record LowJapan’s 40-year bond yield fell to a record low, meaning all then nation’s sovereign bonds yield less than 0.4 percent amid speculation of additional monetary easing. The yield on the 1.4 percent government note maturing in March 2055 fell as much as 10 1/2 basis points to 0.31 percent in Tokyo Wednesday from 0.415 percent on Friday when the bond had last traded, according to Japan Bond Trading Co. The 30-year yield also touched a record low of 0.3 percent.

    PBOC Signals Less Appetite for Stimulus as Outlook StrengthensChina’s central bank is signaling less of an appetite for adding monetary stimulus following evidence of an acceleration in growth that has spurred a wave of upgrades of growth forecasts by private economists. While the People’s Bank of China hasn’t issued any official statement of a change in policy stance, the first signal of a shift came on Monday in a commentary by the state news agency Xinhua. While monetary policy will maintain a certain degree of looseness in coming months, prudence will feature more prominently than last year, Xinhua said. Late on Tuesday, PBOC research bureau chief economist Ma Jun said in a briefing with local media that future policy operations, while observing the need to continue supporting growth, will also pay attention to heading off macroeconomic risks, especially an over-expansion of corporate leverage.

    China Default Chain Reaction Looms Amid 192 Day Cash Turnaround. Chinese companies have never had to wait so long to get paid, as stockpiles build and customers delay sending funds. Firms now take a record 192 days to collect payment for their goods or services from when they pay for the inputs, according to data compiled by Bloomberg on non-financial corporations traded in Shanghai and Shenzhen. The cash conversion ratio is up from 125 days five years ago. Liquidity is tightening in China after company profits declined for the first time in three years and as debtors face their hardest time ever paying interest. “The longer the cash conversion cycle, the higher the risk of corporates not having enough cash to repay their debts,” said Iris Pang, senior economist for greater China at Natixis SA in Hong Kong. “That creates a chain reaction.”

    Slump in Chinese Tourists Leaves Hong Kong Malls StrugglingAfter 27 years of serving rib-eye steak and apple pie to American cuisine lovers in Hong Kong, Dan Ryan’s Chicago Grill has closed its doors at the city’s Pacific Place mall. Taking its place: a trendy new Italian restaurant called Operetta. "I don’t know why they had to leave," said Ho Kwan-lun, a urologist who took selfies with his friends in front of Dan Ryan’s before going in for one last meal the day it closed on April 10. "It’s a shame. This place has been here so long." The million-dollar question for landlords: How to keep mall traffic flowing when wealthy mainland shoppers have turned lukewarm toward Hong Kong and the local economy is slowing in tandem with China’s? Developers are searching for the answer by bringing in new tenants offering free yoga classes, champagne and caviar pop-up bars, and gelato.

    Default Risk Increases for European Junk Borrowers, Moody's Says. The portion of European high-yield borrowers at risk of default is growing, according to Moody’s Investors Service. The number of companies in Europe, the Middle East and Africa that were rated at least seven levels below investment grade at the end of March increased to 47 from 33 a year earlier, according to a Moody’s report. The 42 percent increase in the lowest-rated issuers outpaced 5 percent growth in the total number of rated companies, wrote William Coley, senior vice president at the firm.

    Has The ECB's QE Been A Failure? This Is What Europe's Banks Think

    Eric Hunsader: The Financial System Is "Absolutely, Positively Rigged"

    Prudential Says U.S. 10-Year Yield May Fall to Record Low 1.25%. Benchmark 10-year Treasury yields may tumble to a never-before-seen 1.25 percent as investors seek alternatives to lower interest rates around the world, according to Prudential Financial Inc. “We’re going to be low and range bound,” said Robert Tipp, the head of global bonds and foreign exchange for fixed-income division of the second-largest U.S. life insurer. “This is an extremely low-interest-rate world. The higher-yielding products are going to be dominating,” he said Tuesday on Bloomberg Television.

    Atlanta Fed's GDPNow still sees negligible Q1 growth

    Stocks Are In "A Far More Precarious State Than Was Ever Truly Believed Possible"

    Sam Zell Predicts Recession Next Year: "I'm Being Realistic, Not Pessimistic"

    Goldman has a frightful quarter, but stock surges

    • We'll do one more post on Goldman's (NYSE:GS) lame Q1 results, but the stock is higher by 2% today, and so gives a pretty good idea of the value of looking backward when picking shares.
    • Return on equity during the quarter was only 6.4% – that's against a "more normal" level of 11%, says Evercore's Glenn Schorr, sounding like he's ready to cut his $184 price target. ROE routinely exceeded 30% prior to the financial crisis.
    • Nomura's Steven Chubak calls the quarter disappointing, and notes the bank's drop in FICC and equities revenue was among the worst in the industry. The WSJ's Moneybeat blog provides this helpful chart of revenue declines in Q1 among the big banks. Goldman is a major outlier to the downside.
    • What the heck happened in Investing & Lending, where revenues fell to essentially zero from $1.7B a year ago? On the earnings call, CFO Harvey Schwartz says investments in public equities more than offset gains in private equity paper, and the lending side of the operation took a hit from energy.
    • Now read: Nothing Unexpected And Nothing Good In Bank Results So Far (April 18)

    Homebuilders mull sluggish housing starts report

    • March's seasonally adjusted annualized rate of 1.089M housing starts fell 9% from February, though it was 14.2% higher than a year ago. Permits also fell, touching a 12-month low of 1.09M – down 7.7% for the month, but 4.6% higher Y/Y.
    • Economist Ian Shepherdson brushes off the weak March print as likely depressed by an earlier Easter. Trulia's Ralph McLaughlin takes a longer view – a 12-month rolling total of starts is up 13% vs. a year ago, the best since 2007. It's still 21% below the 50-year average.
    • The homebuilder ETFs ITB and XHB are up 0.2%, roughly inline with the S&P 500's gain today.
    • Now read: Housing Construction Forecast 2016-2017: Forget The Old Normal (April 17)

    Manhattan office rents are seeing 'signs of wariness'

    Yay!  San Francisco just became the first big US city to require solar panels on new buildings

    Told you so!  Crude dips below $40 as Kuwait oil strike ends

    • Crude prices have fallen below $40 a barrel after Kuwaiti oil workers ended a three-day strike that had cut the OPEC member's production by nearly half.
    • Concerns about oversupply were further reinforced by API industry data that showed a 3.1M barrel U.S. inventory build last week, about double that expected by analysts.
    • Bearish sentiment is also taking hold as traders continue to assess the impacts from the output freeze deal failure between major producers on Sunday.
    • Oil futures -2.8% to $39.94/bbl.

     

    API: Oil inventories up a higher than expected 3.1M barrels

    Saudi Arabia takes out $10B in bank loans

    • Looking to counter dwindling oil revenues and reserves, Saudi Arabia is raising $10B from a consortium of international banks as it embarks on its first global debt issuance in 25 years.
    • The landmark five-year loan, a signal of Riyadh's newfound dependence on foreign capital, comes as the sustained slump in crude encourages other Gulf governments, such as Abu Dhabi, Qatar and Oman, to tap world bond markets.
    • Previously: Saudi Arabia preps for end of the oil era (Apr. 19 2016)

    Iran Is Ready To Flood The World With Oil… It Just Has No Ships To Deliver It

    Told you so!  Bloomberg: LNG exports trim 35B cf from U.S. natural gas glut

    • Cheniere Energy’s (NYSEMKT:LNG) Sabine Pass terminal in Louisiana has received nearly 35.4B cf of natural gas for export since pipeline deliveries to the facility were first reported in October – with most of the volume arriving in the last six weeks – helping gas futures to rise 7% over the past month as the shipments limit the size of the current supply glut, Bloomberg reports.
    • Exports of liquefied natural gas are boosting bullish traders after a flood of production from shale formations sent futures falling to historic lows, and hedge funds are betting on rising gas prices for the first time since 2014 as cargoes from Sabine Pass boost demand, according to the report.
    • Cheniere’s gas demand so far this year has helped support prices by $0.05-$0.10 per MMBtu, says Kyle Cooper of Cypress Energy Capital Management, adding that while volumes are still relatively small, Sabine Pass total consumption will reach 200B cf or more by this time next year.

     

    Steel stocks enjoy target price raises at Barclays, BofA Merrill

    • Analysts at both Barclays and BofA Merrill Lynch raise their price targets for some steel industry stocks (SLX +4%), seeing industrial activity picking up for this spring and tight domestic supplies and low imports supporting higher steel prices.
    • But the firm still expect pricing to come down over H2 as overseas production ramps back up and domestic scrap flows improve.
    • Barclays says US Steel (X +4%) and AK Steel (AKS +4.5%) still look expensive but the stocks should benefit in the near term from the momentum driving hot rolled coil pricing; the firm raises its price targets for X to $15 from $7, AKS to $3 from $2, Steel Dynamics (STLD +1.5%) to $27 from $22, and Nucor (NUE +0.9%) to $52 from $47.
    • BofA Merrill raises its stock targets for X to $9 from $1, AKS to $2.50 from $1, STLD to $27 from $24, and NUE to $55 from $50.
    • However, BofA also downgrades Reliance Steel (RS -0.2%) to Underperform from Neutral, thinking the stock’s strong move has taken its valuation well above its historical EBITDA averages.
    • Now read Reuters: China, major producers fail to reach steel deal

    China Retaliates In Trade Wars – Increases Steel Output To Record High

    Model X quality issues detailed by Consumer Reports

    • A new article posted by Consumer Reports dissects some of early Model X quality issues that are being reported by Tesla Motors (NASDAQ:TSLA) customers. It's not a complete surprise that the complicated falcon wing doors was a prime example.
    • CR also notes that message board complaints on the electric SUV range from issues with "balky doors, interior trim-piece tolerances, paint-spray quality, malfunctioning second-row seats, sheet-metal panel gaps, and climate control."
    • Tesla has a strong record on Consumer Reports with the Model S winning car of the year.
    • A spokesperson for Tesla says the company is being proactive in addressing customer concerns.
    • Tesla was down 2.56% today to land at $247.37.
    • Now read Tesla Model X Demand: Robust Or Bust?

    Restaurant same-store sales growth goes negative in March

    • Same-store sales at chain restaurants fell 0.7% Y/Y in March, according to data from Black Box Intelligence. The weak month contributed to Q1 same-store sales growth of only 0.4% vs. +1.2% in Q4 of 2015.
    • Restaurant traffic was down 2.7% during March.
    • Black Box thinks there is a correlation between a higher rate of employee turnover in the sector and lower traffic due to service frustrations.

     

    Restaurant sector under pressure after weak traffic read from Brinker

    • Restaurant stocks are skittish in early trading after Brinker International (EAT -6.5%) disappoints with traffic under pressure at Chili's.
    • Decliners include DineEquity (DIN -1.9%), Yum Brands (YUM -0.7%), Darden Restaurants (DRI -2.1%). and Bloomin' Brands (BLMN -0.7%).
    • Popeyes Louisiana Kitchen (PLKI -2.8%) is down after Cowen initiates coverage with a Marker Perform rating and $59 price target.
    • Buffalo Wild Wings (BWLD -3.4%) is under pressure with OTR Global making noise about Q1 and Q2 trends.

    Real estate skills of Shake Shack questioned

    • Shake Shack (SHAK -1%) needs some help picking its restaurant locations, according to a data study overseen by Bloomberg Intelligence.
    • Sites picked by the company score low on some key metrics that may impact sales levels.
    • The issue of location will become more important as Shake Shack launches in more small and medium-sized cities.

    Intuitive Surgical(ISRG) boosts procedure growth forecast. Intuitive Surgical Inc on Tuesday reported better-than-expected first-quarter profit on expanded use of its da Vinci robots in U.S. general surgeries such as hernia repair, and it raised its full-year outlook for procedure growth. The company now expects procedures using da Vinci robots to increase 12 percent to 14 percent in 2016, helped also by a favorable outlook for prostate and gynecological surgeries, executives said on a conference call. Intuitive previously forecast procedure growth of 9 percent to 12 percent

    You'd have lost nearly 20% of your money if you bought these 21 hot tech IPOs of 2014 and 2015

    Trump, Clinton win big in New York

    • Donald Trump and Hillary Clinton notched resounding victories in New York Tuesday night, ending losing streaks for both campaigns as they moved significantly closer to their parties' nominations.
    • Election results showed the front-runners landed about 60% of the Republican and Democratic vote in the delegate-rich state.
    • The next important date is April 26, which will see primary contests in Connecticut, Delaware, Maryland, Pennsylvania and Rhode Island.

  144. I don't see crude below 40 in tos for any oil contract or Brent. What r they taking about?


  145. LOL, Dylan Ratigan right before he quit sounds like me on a bad day:

    LOL – Fox news thought they had another inexperienced liberal student they could roll over to "prove" they have the winning argument and she rips them a new one:

    This is why the GOP fights so hard to make sure our kids remain ignorant.  Nothing scares them more than a well-educated voter.  Cavutos expressions are priceless.  Well, not priceless, he's well-paid to sell his fellow citizens down the river for his 1% masters.  

    Here's a chart that tells you what day you'd better be out of this country by:


  146. Burr it is /CLK6 which is the expiring contract today.


  147. Oh and it is currently up to 40.25, so that was a little while ago. 


  148. AAPL/Rookie – Happens all the time before earnings – trying to flush out weak hands.  

    I hope they do miss – we only have a small position in the LTP.  If AAPL were a country it would be ranked right behind Saudi Arabia, 20th largest, with a $650Bn GDP but AAPL, unlike Saudi Arabia, runs a $50Bn budget surplus.  Do you think you could buy 10% of Saudi Arabia for $65Bn?  AAPL is a way more valuable piece of property than they are!  

    Commodities/BDC – Staging a big comeback this week – we'll see if it lasts.  

    UNG/Hanj – That's our Trade of the Year (see OOP above).  Target is $10 in 2018.

    X/Albo – As I said a few weeks ago, MT is my favorite and I think the G20 HAS to start doing infrastructure projects as all other stimulus has now failed.  X was priced for BK at $7, if that's not going to happen, low $20s are fair.  

    Submitted on 2016/03/02 at 3:19 pm

    X/TX – I like MT better but X is good for a tariff play but so is CLF and way better premiums to play on those.  

    AAPL/Craigs – I see no possible reason they would get into the car business.  I still think they are simply designing car interior systems.  Although, with $250Bn in cash – they could go into the iHouse business if they wanted to.  

    Brownback/StJ – I say Kansas goes Dem this election – that's how awful this guy has been.   Moran's senate seat is up fro grabs I think this term.  There hasn't been a Democratic Senator from Kansas since 1932 so, if he gets tossed – I think that will mark the beginning of the end of the GOP.

    TSLA/Latch – When you do a search, on the top right you need to sort by date.  It's like a Google search, you need to put more than just TSLA in to get better results.  Try putting in TSLA and Phil and  don't forget to sort by date.  Of course, the problem with TSLA is it gets mentioned constantly, so lots of hits.  Anyway, talked about it in the main post on 4/5 - $250 was our shorting line.  

    /NG/Jomp – How did you lose money on /NG long?  I assume you don't mean last night?

    Oil/Burr – It was /CLK6, no longer showing as the front-month contract. 

    And what Craigs said!  

    OK, time for me to go to work…


  149. Phil – "Dylan Ratigan right before he quit sounds like me on a bad day"

    Thank you so much for posting that rant on value extraction.  I love it when someone has the balls to shine the light of day on the turncoat vampires who are sucking our future dry.  

    Sanders/Ratigan 2016 – You Want The Truth?