Trumpy Tuesday – The Turmoil Continues

Ball of confusion.  

That's what we have going on this week and let's not forget the Fed does have a rate decision tomorrow at 2pm but, of course, NO ONE thinks they'll raise rates 6 days before the election but Hell, no one thought the FBI would send out a letter about POSSIBLY more Clinton Emails 11 days before the election and THAT happened – so here we are, with just 6 days to go – actually facing the POSSIBILITY (not probability) that Donald Trump may be the next President of the United States.  

I'm going to pretend I have no opinion as to whether that's a good or bad thing because, clearly, almost half of you actually think that's a good thing – so who am I to stand in the way of putting the 156th richest person in the country in charge of your life, with the mandate to shape the Future of your children with probably 4 Supreme Court picks ahead of him?  Of course he's got your best interests in mind!  After all, when has he ever failed to do what's best for the little guy?  Forbes says he's worth $3.5Bn and Trump said $10Bn as LITERALLY the first thing he told you in the campaign was a lie.  Clearly he's not a guy that would ever lie or exaggerate.  

Even if you have $10M, Trump is 350x richer than you are.  That's how much richer the average CEO is than the average employee so don't think you are in his "club" – you're not even likely to be the waiter at his club.  Like George Carlin says, it's a big club – and you ain't in it – it's also the club they like to beat you over the head with!  

Trump is simply doing in politics what he has always done in business – he's cutting out the middle man!  Why buy politicians (something Trump claims to be good at) when you can get other people to give you money so you can buy the whole election and then you ARE the politician who gets to be bought.  Look how rich the Clintons got, right?  Trump is fixated on this fact for a reason – because being President is a good gig – it's great for your brand!

Trump's brand is as a builder so, what does he say he will do?  He will build a wall!  Trump, build – that's what he's now googled with, right?  Trump is also compiling a mailing list of millions of donors and twitter followers, people who he can market to for decades to come because he now owns those lists and he can sell those lists ($10 per name is the going rate for the kind of information Trump gets from his donors) to whoever he wants to – over and over again for 10s of Millions of Dollars on each sale.  

When Trump began his campaign he boasted he would be the first person to make a profit running for President and, God bless him, that's exactly what he's doing.  That, my friends, is Capitalism at its finest and, if nothing else, you have to give it to Trump for pulling this off.  

So, in the new American landscape, I propose we start crowdfunding my drive for President in 2020.  We'll form an LLC (since Corporations are citizens and ours will be born in the US, so it can be President but it has to be 35, so we need to buy some old company and use their date of incorporation) and split the profits.  Then we can run for President and promise whatever BS people want to hear and make up a bunch of stuff (plenty of material here) about our opponents, promise to start wars and cut taxes and presto – we're the next Republican candidate!

Do I worry that my previous liberal positions may be used against me?  Of course not, Trump sure doesn't.  All we have to do is go to Iowa and eat some gross fried food and pretend to care about which pig wins the fair and then off to New Hampshire to sit in a diner and earnestly listen to townies bitching about life in the sticks and, before you know it – we'll be nationally ranked!  

Meanwhile, back in the markets.  The big excitement last night was another gasoline (/RB) pipeline explosion in Alabama, which sent prices flying more than 10% higher overnight and now around $1.55 from $1.41 yesterday.  We shorted it this morning in our Live Member Chat Room at about $1.575 so we'll see how it goes – clearly the move is overdone but those are our favorite kind of moves to bet against!  

This hasn't done much for oil, which fell below of $47.50 goal and is still below at $47 this morning, after testing $46.50.  Other than OPEC rumors, there's no real upside catalyst for oil until Thanksgiving but contracts expire early this month (18th) due to that same holiday so there's only 13 trading days left to get rid of almost 500,000,000 barrels worth of fake, Fake, FAKE orders for December delivery:

Imagine if they actually delivered 500M barrels in a month.   That would be 16Mb per day, almost 3x our total imports and these are just the contract on order for a single terminal (out of 9) in Cushing, OK – it's complete and utter BS without even a shred of basis in reality.  The front 4 months have over 1 BILLION barrels of oil "on order" yet, in the end, less than 80M will be accepted for delivery – and our regulators do nothing! 

Oil may go lower but the July contracts (/CLN7) are $50.16 and we're projecting $55-60 by July so you can make $5,000 to $10,000 per contract with those longs (margin $3,190) though we aren't buying them yet as we're hoping oil tests $45 first, about $47.50 on the July contracts.  We did cash in half our Oil ETF (USO) Nov $13 puts yesterday at $2.20 and the rest are $2.45, up 50% from our entry.  The next time we go for USO, it will be on the long side – but first, we'll see where the bottom is (probably $10).

The Dollar is down 0.5% and that's keeping our indexes green (and gold is back to $1,290) but Natural Gas (/NG) is coming down nicely ($2.90) and we look forward to getting long on those again or the ETF (UNG) below $8, hopefully $7.50.  

Earnings, so far, have been a bit better than last Q but, on a GAAP basis, they are still HORRIBLE, as noted on this handy chart, which seems to indicate there is no correlation at all (anymore) between the earnings and the price of the 500 companies in the index.  In fact, it's 20% LESS earnings than last year and we're paying more for them – what can possibly go wrong?

We talked about hedging on Friday and we talked about CASH!!! as your most valuable asset right now and now there's only 5 trading days before the election and we just saw how easily spooked the market can get (we still haven't recovered from Friday's FBI-induced dip) so play at your own risk but PLEASE – be careful out there…