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Monday, March 18, 2024

TGIF – Gold Flies Higher as Kushner Goes “Under Scrutiny” in Russia Probe

Image result for trump russia tiesThis is gettting interesting, isn't it?  

Jared Kushner, Trump's son-in-law, is now a "person of interest" in the FBI investigation into the Trump Administration's Russia ties.  That doesn't mean he's guilty but it does mean the investigation has moved closer to the President – to the guy married to his daughter, in fact.   The records of records of both Manafort and Flynn have been demanded by grand jury subpoenas, NBC News has reported.  

Kushner has already admited to meeting with Sergey Gorkov, who is the Chairman of VneshEconomBank, a Russian government-owned institution that has been under U.S. sanctions since July 2014.  Gorkov studied at the training school for the FSB, one of Russia's intelligence services.  To be fair to Kushner, you can't be part of Trump's Team and NOT have met with Russians – they are EVERYWHERE!  

Meanwhile, why are you here?  It's the Friday before a 3-day weekend, we didn't become investors so we could work every day, did we?  Go have some fun – I'm already on vacation, writing from my hotel room like a sensible fellow.  

Yesterday's big story was the collapse of oil after the OPEC meeting.  Despite extending the existing production cuts for 9 more month, the cartel failed to increase them and, since the current cuts have barely been effective and since the US production is already filling the gap and putting us back in a glut – a lot of oil longs finally gave up hope and bailed out, leading to a whopping 5% Rule™ correction on the day.

We're long here ($48.50) on the Oil Futures (/CL) as well as the Oil ETF (USO) at $10 as we are only just starting summer driving season and the July 4th holiday gives us another opportunity to see some gains in the coming month.  We may fall another $1 first, to $47.50 because Brent Crude (/BZ) is still at $51 and $50 is better support for them and $47.50 is better support for us but I would hate to miss the rally, so I'd rather get started now.  Gasoline (/RB) is also a good buy at $1.60.

In our Options Opportunity Portfolio, we alreay have 40 USO July $9 calls we bought for $1.48 ($5,920) back on 11/15 and now they are $1.20 ($4,800), so down a bit but we still like them as a new trade.  

After Trump spoke at NATO yesterday, European markets are off 1% this morning and that should be a drag on our own Futures.  Our markets have been stubbornly bullish this week with the S&P (/ES), so far, holding on to 2,400 and the Dow (/YM) over 21,000 with the Nasdaq (/NQ) at 5,775 though the Russell (/TF) is weak at 1,377, making up (so far) for our loss on the S&P shorts

The volume on the way up has been anemic, with just 200M shares traded on the S&P ETF (SPY) in the last 4 days as it rose while the down volume just last Wednesday was 172M – that means we can easily resume our sell-off at a moment's notice.  We're expecting a flatline today – despite Europe's woes, as there are nothing but junior traders manning the desks today since anyone with any authority has already helicoptered to the Hamptons by now (the house opening parties start Wednesday and run through Monday night).

We taked about liking the Dollar (/DX) long at 97 yesterday and UUP was $25.08 and we did hold the line(ish) but still a chance to get on board with our trade idea into the weekend and before the G7 pronouncements.   The Fed meets again on June 14th and another rate hike will send the Dollar flying back to 100, espeicially with Draghi (ECB), Carney (BOE) and Kuroda (BOJ) still on hold. 

On Tuesday I'll be over at the Nasdaq for a live broadcast and they want to discuss, of all things, hedging strategies!  You know things are scary when the Nasdaq wants to have someone tell their viewers what to hedge with…  Of course we love our SQQQs but I'm not going to talk about it now (we already have them in our OOP and STP) – you'll have to tune in on Tuesday morning.

We had fun shorting the VIX Short ETF (SVXY) a few weeks ago as it fell from $160 to $130 and now it's back to $151 so we can play it again.  July $150 puts are $11.70 and you can buy 10 of those for $11,700 and sell 10 of the July $140 puts for $8.50 ($8,500) and also sell 5 JUNE $160 calls for $3 ($1,500) for net $1,700 on the $10,000 spread and, once the short June calls expire, you can pick up another $1,500 selling July calls to make it a free spread.

See, there's plenty of things we can trade, no matter how toppy the market gets.  We even have a new trade idea for the LTP in our Live Member Chat Room this morning

Have a great weekend,

– Phil

 

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