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Trump Error, Day 130 – The President Returns from Disastrous World Tour

Down the memory hole: Establishing "1984" for today's Trump-filled worldHe's back!  

After a relatively calm couple of weeks while the President was in Europe, we're back to the National nightmare of dealing with an Administration in turmoil (Trump now has a "war room" dedicated to staving off negative reports about his ties to Russia – at your expense, of course) with Trump's son-in-law, Jared Kushner, now under direct investigation and there are rumors of a major staff shake-up as suspected leakers are being fired now that the boss is back in town.

There are as yet unsubstantiated claims that Trump is now under indictment for his ties to Russian mobsters (but a sitting President has immunity so the case is "on hold").  Last week, the Trump campaign released an email to supporters entitled "SABOTAGE," in which the campaign said, "There are people within our own unelected bureaucracy that want to sabotage President Trump and our entire America First movement."

The White House has yet to announce any terminations or staff realignment. Instead, overnight Trump took another swipe at reports that his Twitter privileges may be removed, saying that "the Fake News Media works hard at disparaging & demeaning my use of social media because they don't want America to hear the real story!"

This kind of stuff is not really good for investor confidence.  Not only is Trump's domestic agenda in turmoil but he has single-handedly taken the mantle of World Leadership away from the US for the first time since World War II with Germany's Angela Merkel warning the G6 (who were all aligned with science against Trump on climate change this weekend) that reliable relations with her country’s closest post-World War II ally may be a thing of the past.

“The last few days have also shown me that the times when we could completely rely on others are to some extent over,” Merkel said in a speech at a climate conference in Berlin on Monday, echoing her language of the day before. “We are and remain close partners,” she said of the U.S. and Germany, “but we also know that we Europeans really must take our destiny into our own hands.”

Wow, we just blew our relationship with Europe!   Trump has, however, succeeded in uniting Germany's political parties – AGAINST HIM – as even Merkel's opponent in the upcoming election, Matin Schultz said:  “The new U.S. president doesn’t rely on international cooperation, but rather isolationism and the apparent right of the strong.”  Schulz accused Trump of “political blackmail” in an op-ed piece for Tagesspiegel newspaper on Monday.

Trumps slogan "America first" is not just an attack on the principle of free trade."America first means Trump's logic: saying good-bye to the painstakingly negotiated Paris climate protection agreement, the dismantling of the United Nations, political blackmail instead of international diplomacy".

None of this stuff is good for the markets, folks – especially markets that are trying to justify record highs.  I'll be live at the Nasdaq this morning and I've been asked to discuss hedging strategies (see notes from our Live Member Chat Room) – "just in case" and there's a general sense that selling in May and going away was indeed the top topic of conversation at the Hamptons over the weekend.  We'll see what happens as the top traders come back from their summer homes and decide whether or not they want to roll the dice on June.

Jeff Snider at Alhambra Investments made a good point this weekend that businesses can no longer afford labor, as evidenced by ultra-low unemployment coinciding with still ultra-low wages.  Snider does the math and makes a strong argument that the "recovery" we've had has come at the expense of the workers – especially the 15M people who have dropped out of the labor force since 2009.  As noted by Snider:

"In the end, all this confusion exists because the wrong measurements are employed starting with the wrong linear perspective. GDP was never meant to quantify shrinking; in fact, nothing is, which is why we have such difficulty measuring just how badly the economy has performed during a decade otherwise clearly lost. "

A whole lot of financial engineering went into giving us a positive Q1, not the least of which were the easy comps we had from last year's terrible Q1.  A whole lot of buybacks and favorable estimations of forward tax rates (Trump's tax breaks for the wealthy and corporations have been assumed to be passing) allow companies to show greater profits on the same or even lower sales.  If you take out the Energy Sector's 21.6% earnings growth – the S&P 500 was flat to last year (when we were at 1,850) and, despite all the record-high hoopla, 36% of the S&P 500 companies missed their sales numbers.  

As noted in the chart above, S&P 500 earnings for Q1 came in at a $140 rate, just $10 (7%) better than they were in 2014 yet the PRICE of the S&P stocks has gone up 30% based on wild exrapolation of all the stars lining up to give us a perfect economic recovery with full employment, low wages, low taxes, infrastructure spending and cheap commodities.  It's never happened before – so why not now?

Image result for extrapolation cartoon

As you know, our 4 Member Portfolios are mainly in CASH!!! and very well-hedged.  So far, we've been waiting for the crash that simply never comes but that's OK as we manage to amuse ourselves with Futures plays (from last week's Live Trading Webinar) like Coffee (/KC), which made $3,937 off the $128 line:

Our oil trade (/CL) was good for $2,300 on Friday's recovery (and we gave you that one FOR FREE in the Morning Report – you are welcome!)

We also gave you our Gasoline (/RB) trade idea on Friday morning and that was good for $2,062 into the close. 

 

So that's a nice $4,362 from our $3/day PSW Report just from Friday's post – not a bad use of our sideline CASH!!! as these Futures trades are great for quick in and out gains while we wait for market resolution.  For the Futures challenged, we also mentioned our 40 long USO July $9 calls at $1.20 and they jumped over 10% to $1.35 for a $600 gain (12.5%) on the Day – and these are just the free trades folks – you can subscribe here before you miss the next one!  

No new trade ideas but we'll like the same levels if we test them again and our other plays (VIX, Indexes, Dollar) are still in play from last week.  Today and tomorrow are going to be "watch and wait" kind of days and we have another Live Trading Webinar tomorrow – hopefully we can do as well as we did last week!

 


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  1. Let's remember when Trump was hitting Obama for making enemies… It took him only 3 days to get Europe united against us. Of course, now we have new friends like Putin, Erdogan, Duterte! 



  2. Volatility in commodities is really low now:

    https://www.bloomberg.com/gadfly/articles/2017-05-29/this-dearth-of-volatility-in-commodity-markets-will-pass

    Fundamental factors may also be playing a part. The most dramatic instance of volatility this century came in the run-up in prices before the 2008 financial crisis, when China's voracious commodity demand crashed into markets that were short of supply, sending prices soaring. The opposite happened in 2015, with Chinese consumption dropping just as producers were running supply hard to pay off debt they'd taken on to increase output.Right now, we're closer to a Goldilocks economy. As Gadfly's Liam Denning wrote last week, there's abundant supply in both agricultural and energy markets these days, and the development of U.S. shale oil in particular has meant the market is able to respond quickly to supply shocks, causing prices to even out.


  3. Interesting take on buybacks and valuation:

    http://www.economist.com/news/finance-and-economics/21722634-also-reveals-better-match-between-stockmarket-performance-and-economic

    In a buy-back, investors receive cash for a proportion of their holdings. A new paper* in the Financial Analysts Journal argues that adding this to dividend receipts to calculate a total payout yield gives a better estimate of future returns than the dividend yield alone. It also reveals a much better match between stockmarket performance and overall economic growth.

    Using data going back to 1871, the authors find that the average dividend yield has been 4.5% and the total payout yield 4.89%. Since 1970 the dividend yield has dropped to 3.03%, but the total payout yield has averaged 4.26%. Looked at on that basis, the overall income return from shares has been not that far below historical levels.


  4. Good Morning.


  5. Good morning! 

    Have to run to the Nasdaq but I'll be back about 11.  

    This is a blast from the past – the last time a President tried to cut public television we had a great champion speaking against him:

    Futures recovering a bit but it's like a Monday and a lot of important people won't be in until noon so I don't expect too much early action and the month ends tomorrow anyway.

    No automatic alt text available.


  6. will tsla ever go down???? dangit!


  7. ftr was at 1.50 premarket.. what a tease dangit!


  8. TSLA

    Jabob -  IMHO, this advice from Winston is worth heeding.  Selling short calls against MoMos is very difficult. The losses are potentially unlimited and the profits are very limited.

    ~~Winston
    May 25th, 2017 at 1:17 pm | Permalink | Tweet thisIgnore this user 

    Trading MOMOs: First, don't fight the trend – leave someone else to call the top. Go long and strong. Sell puts on weakness.


  9. albo--you are right.. I have a small short on tsla and amzn.. but the unrealized losses while waiting keep building even with the positions being really small. When you add my small long positions on these dogs (FTR, JO, GNC, M, F, TEVA, GILD, LB,and TGT) it makes things worse…

    On the bright side, everything is working great! 


  10. everything else..that is


  11. Yesterday night was watching the last M. Moore  documentary  http://www.economist.com/blogs/prospero/2016/05/documentary-film,  

    Really good, and Trump was not in power when it was produced.   


  12. jabo, i think it's pretty clear that they intend to take TSLA to 350 soon.  and once it gets there, 400 is likely because the model 3 will be delivered at some point.  so, better to adjust accordingly.  i am saying this to myself of course.  i have large losses i've been rolling along.  i was feeling hopeful that i might start break even in june, now that phil finally relented and entered a short position and he usually has a good feel (although, he wisely stayed away from it for years).

    but now it looks like i have to roll out to 2018 and then hope it doesn't get to 500 by then!


  13. JUst made a red line on my NFLX play and paid 9K to pay for an error to enter this play!!!


  14. Phil – Censored Alpha Editorial – re: their whimsical "standards"; just received a promo email, thought the hypocrisy would make you howl.

    "First, it’s essential to understand that editorial standards don’t change. Authors have to publish high-quality work to be successful, and that high-quality work stands as the best marketing for their service."

    The lead sentence brings this to mind…and Out.


  15. lunar/jabo — 350 then 400? damn. I think we'll see 306 before that. Seems like one more lunatic run up before the market sees the error of its ways…. of course I have no idea what I am talking about


  16. 5 weeks till Model 3 supposedly comes out.  Might see more of a run up in TSLA as it gets closer.


  17. You guys are really gluttons for punishments… Stop shorting these MoMos! When it works, it's nice to talk how right it was, but in most cases, it's just too painful as seen here many times.


  18. fun fact, TSLA is now worth as much as BMW.


  19. jeez  FU TSLA!


  20. More on CTL.

    https://seekingalpha.com/article/4077358-centurylink-corvex-likes-stock?isDirectRoadblock=false

    Snippets :

    ~~•Corvex Management recommended CenturyLink at the Ira Sohn Conference.

    •The investment firm has a valid point about placing Jeff Storey into the CEO role.

    •The stock remains a solid recommendation based on the financials of the new entity with or without the CEO catalyst.

    ~~Corvex sees at least 50% upside in the stock. My own investment thesis sees the stock as cheap due to the high dividend yield supported by the increased cash flow from the Level 3 deal.


  21. /Phil/NG- do you like NG OCT here at 3.2?


  22. Phil or anyone? - Oil still $49.64, poor OPEC.  /RB $1.622 and they are both in big trouble if weekend demand seems like it was weak.

    What do you mean?  Oil and RB will drop if demand is weak.  With the 4th of July holiday around the corner, I was planning on riding /CL and /RB down this month and then make a long play closer to the 4th.  Oh, by the way, the Oil discussions for the past couple of months were fantastic and paid for my membership, albeit I closed early at 161.42 and 49.00.  That had a lot to do with you beating the table on a 'greed' statement in one of the many articles in the archives at PSW.  Anyway, can NOT thank you for the education and that includes the rest of the PSW clan too.  Even Jabo's FU list, cos I have most of those as well, but I am chomping at the bit to DD.  


  23. Joseph- agree. If you ignore the petty politics the investing stuff is priceless. No offense, I can get passionate about my opinions too… just remember what we're here for.


  24. Momentum is really falling here, I think we have to test the recent low before we go any higher… but I have no faith in this bubble market anyway.


  25. More GNC news…  hope Q2 numbers are explosive.   If the stock jumps as it did after the last earnings report, would a BCS be a good strategy?   

    https://seekingalpha.com/article/4077393-can-gnc-rudy-like-ending?app=1&auth_param=1e5gug:1cir45l:932a1fc379237db2f599a49400563c27&uprof=44&dr=1#alt2

    Mkucstars1 – thank you for the feedback and yes it is 'priceless'. 


  26. hope you are right Joseph… so far, gnc and ftr have been disasters…maybe Trump will save them?


  27. Hola people!

    Friggin' TSLA:

    AMZN we expected to test $1,000 – the question is whether or not it pops over:

    NFLX fiesty too:

    We were talking about Nasdaq hedges but also saying "what's the point – it only ever goes higher"  Even the people at the Nasdaq are baffled, we were chatting after the show with their top market makers and they find the activity very strange, for what it's worth.

    Big Chart – Still waiting for 11,650 on the NYSE to confirm new highs along with /TF 1,400 – broader indexes not as strong so same old, same old so far.

    Buybacks/StJ – It's a benefit if you are a buy and hold investor but not for people who come in at inflated prices after the wealth has been distributed.

    TSLA/Lunar – Well they have to get past another earnings report before that happens.  I'll take todays move with a huge grain of salt.

    SA/Naybob – They allow manipulative BS that is clearly coming from pump and dump sites but God forbid you question Capitalism – THAT they banish!  Also, their whole reward for click system is BS because writing positive articles on MoMo stocks is the best way to get paid at SA so the site is filled with articles tripping over themselves to fawn over crowded trades.  People just love to have their POV reinforced.

    Model 3/Rustle – Or 5 weeks until it doesn't.  What then?

    Gluttons/StJ – They make good hedges when the market finally does correct (if ever).

    /NG/Ravi – I like /NG any time it's down in the range but keep in mind that $3 is the only reliable floor so very tight stops on the 0.05 lines or make sure you are HAPPY to DD at $3 or lower if it takes a major plunge.

    Oil/Joseph – It would be nice to see it sell further but failure at OPEC has taken the edge off the long premise.  Certainly no immediate catalyst until we're much closer to July 4th weekend.  Glad you've been doing well but the secret to success in futures is NOT trading 90% of the time.  You want to have the alignment of good support/resistance on something you'd LIKE to trade AND some kind of proximate catalyst that should give it a push in your direction.  That's why I rotate to different plays – sometimes one thing is good and sometimes something else.  As noted above, now /NG is getting interesting as it dips but not interesting enough to make a call – yet.

    GNC/Joseph – We already have a stock position in the LTP (because we like the dividend):

    They suspended their 0.80 dividend as they did a major revamp in Q4 but they will re-evaluate going forward.  I'm betting they reinstate – which makes this price ridiculously cheap.  

    Is the Options Market Predicting a Spike in GNC Holdings (GNC) Stock?


  28. phil/nasdaq action…and they haven't even unleashed AAPL yet.  that can easily be taken to 160, to push the market higher, as is always done.


  29. FU TEVA!!!!!


  30. A new report predicts that we’re on the edge of an incredibly rapid transition to an entirely new transportation system–where it will be so much cheaper and easier to not own a car, you’ll get rid of it as soon as you can.<p>Ask a typical industry analyst how long it might take Americans to take most …


  31. <i>UPDATE: Texas Rep. Cesar Blanco (D) posted audio of a phone call to his Twitter account late Monday night, in which a man is heard making racist remarks and saying he “stands with” Rinaldi.</i><p><i>WARNING: This video contains foul language.</i><p><i>“My office is now receiving these calls. @MattRinaldiTX comments</i> …


  32. Some of the militias under consideration are recognized as “extreme antigovernment groups.”<p>A Republican leader in Oregon says the party may use private militias, including groups widely recognized as antigovernment extremists, to protect GOP officials.<p>The move comes after Friday’s deadly stabbing …


  33. Good news abound at Costco! Net sales increased 7.9% in the quarter rising to $28.2 billion from $26.2 billion. Comparable store sales rose 5% for the total company, 6% in the U.S., 2% in Canada and 2% in other international units. Excluding the impact of changes in gasoline prices, U.S. sales were …


  34. This virtual world isn’t just for gaming. Nvidia says its virtual reality technology could be used to train the robots of the future.<p>Star Trek fans, rejoice. Soon you could be spending your time inside your very own holodeck — as an animated torso.<p>Taking a brief step away from GPU spec talk, …


  35. Ever wonder what an autonomous vehicle ‘sees’ via its sensors, on-board computing and sensor fusion system? This video from Civil Maps, the high-definition maps technology company backed by Ford, reveals some of what’s going on when it comes to combining detailed 3D maps with sensor data culled …


  36. While it is hardly a novel claim – in the past many have warned that Australia’s housing and stock market are massive asset bubbles (which the local …


  37. White House Communications Director Resigns as Shake-Up Begins

    • After his first foreign trip, President Trump begins shaking up his White House.<p>• Resignation of White House communications director may only be the start.<p>• Trump again says on Twitter that Russian investigation is “Fake News.”<p><b>White House communications director resigns.</b><p>A long-promised shake up …


  38. Depending on who you ask, estimates of the number of retail stores that will close in 2017 range from 7,000 to 10,000. Given the retail climate, the number of new store openings is likely to be much lower. If you walk in almost any shopping area now, you see vacancies. They’re an eyesore, they make …


  39. Press Release: Fitch Downgrades Frontier Communications' to 'B '; Outlook Revised to Stable


  40. Shares of TiVo stock soared in early Tuesday morning trading due to a favorable patent decision. A final ruling is expected September 26.<p>The …


  41. ‘What is the opposite of a “margin of safety”?’ This is a question I’ve been considering because it seems that’s exactly what investors have settled for in passively buying equities today. But first we should probably define “margin of safety” before we can begin to understand its opposite.<p>Ben …


  42. U.S. home prices climbed in March at the strongest rate in nearly three year as a dwindling supply of houses for sale is causing prices to significantly outpace income growth.<p>The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index rose 5.9 percent over the past 12 months ended in …


  43. <i>This article originally appeared on the Motley Fool.</i><p>Oil is starting to recover from the depths of this most recent cycle, but it’s nowhere near …


  44. MILAN (Reuters) – European shares fell slightly on Tuesday, with banks leading the decline on fresh political jitters and following a downgrade by a …


  45. FRANKFURT (Reuters) – European Central Bank policymakers are set to take a more benign view of the economy when they meet on June 8 and will even discuss dropping some of their pledges to ramp up stimulus if needed, four sources with direct knowledge of the discussions told Reuters.<p>With economic …


  46. RE Capitalism.  Every thing has a life span.  Centralized economies had a good run but eventually failed.  Capitalism is long in the tooth and corrupted but eventually will die a slow and painful death. Not sure what to replace it with.  I`m 63 so I`ll be dead by then.  Good luck to all you young whippersnappers


  47. Is what we have capitalism? I prefer crony crapitalism to describe what is going on now.


  48. and….AAPL is off to the races.


  49. AAPL/Lunar – Very true, AAPL usually caps off these rallies.

    Capitalism/CDN – Has to be a universal basic income.  100 years from now, you'll only need 10% of the people to actually work so the same people who feel the need to work hard and have more now will do the same then while the rest of the population can worry about art and poetry – essentially, we go back to the Greek system that was based on slave labor, only now it will be machine labor (until that revolution happens).

    Image result for terminator animated gif

    /NQ still under 5,800, good shorting spot with tight stops over.


  50. TSLA….didn't think they'd hit 350 today.  but maybe.



  51. TSLA also passed Honda awhile back on market cap and next major car company to leap is Volkswagen at 78bn


  52. "One current White House advisor said last year that “2016 is the Flight 93 election: charge the cockpit or you die. You may die anyway. You—or the leader of your party—may make it into the cockpit and not know how to fly or land the plane. There are no guarantees.? Can anyone or anything turn this tide of our growing separation from each other? I can’t imagine what could do it in the short-term."

    No this flight was not hijacked by foreign terrorists. Taking Flight 93 one step beyond, point in fact this is more like a modern telling of the Flying Dutchman myth, a tale of insanity known as The Odyssey of Flight 33. An unlikely break of the time barrier finds a commercial airliner (parable for the insular electorate of the Unites States) sent back into the prehistoric age.  

    An odyssey where the passengers keep making the same mistakes over and over again. And yet wonder why things keep repeating themselves and are constantly getting worse. After decades openly spent abdicating their freedom, and being satisfied with the illusion of agency afforded them by those they choose to relinquish control to, they just can't seem to get back home to 2017.

    Flight 33 was never hijacked by foreign terrorists, just common seemingly innocuous domestic ones.   Many have been and still are searching high and low, and with plenty of hatred and blame to go around, fingers are being pointed in many directions.  Alas, to catch a glimpse of the real terrorists, all those passengers have to do is take a good look at who they have put in charge, then give a passing glance into, the next reflective surface or mirror.

    The tools of conquest do not necessarily come with bombs and explosions and fallout. There are weapons that are simply thoughts, attitudes, prejudices to be found only in the minds of men. For the record, prejudices can kill, and suspicion can destroy, and a thoughtless frightened search for a scapegoat has a fallout all of its own for the children, and the children yet unborn. And the pity of it is… that these things cannot be confined to the Twilight Zone. – Rodman Edward Serling


  53. And this comes to mind as apropos and Out.


  54. @advill,  yours truly was/is and hopefully will be involved in exactly the same things going forward.  The biggest advantage with big data is that we can track company trends on a daily basis.  Then position accordingly and make alpha on the pop at earnings announcement.  Cost is definitely a barrier – but having looked at many (50+) alternative datasets – even one or two that work knock the ball out of the park.  Definitely a big boys game right now, but with fintech and other big data start ups, like all things, I think cost will come down.   


  55. how is GBTC 432? Bitcoin is ~2250 (225 NAV to gbtc). We're not even talking Tulip Bulbs anymore, this is like paying someone +70% premium to hold Tulip Bulbs on your behalf!!! Just buy them your damn. PEOPLE CAN'T REALLY BE THIS STUPID/LAZY???!!! Can they? This is crazy. Who are these absolutely stupid people, I don't get it. Or maybe I'm the stupid one. 


  56. From Raymond James – CL  ~Today, we will
    give our take on what the extension really means for global oil fundamentals. To summarize our conclusions: (1) the extension substantially tightens (i.e., makes more bullish) the global supply/demand equation in the second half of 2017 and start of 2018; (2) the key metric of days of supply is set to fall below normal levels in 3Q17; and (3) larger, more durable inventory draws should support further recovery in prices towards cyclical highs in the next six to nine months. Ultimately, fundamentals are what matter………………Don’t let the market’s “sell on news” sway you: the extended cuts make the already improving days-of-supply metric even better. Absolute inventory levels matter, but days of supply (defined here as OECD inventories divided by global demand) is always a more relevant metric. As shown in the charts on the next page, inventory levels in the OECD (comprising roughly half of global inventories) were on track to shrink meaningfully in 2H17/2018, even without the help of extended OPEC cuts.
     


  57. ethereum could go to 500 from here


  58. Phil – are you concerned with the potential for conflict with North Korea? We will have 3 carriers in the same theater – extremely rare for us to do that.  Low priority media event at the moment. Not sure if N.K will back down.


  59. Korea.  Why attack them. Their missles only travel about 11 meters ( thats about 35 feet)


  60. Phil do you have any idea why futures trading sometimes seems to skip a month. For example the gold contracts were trading in the June contracts until just a few days ago but then the default went to the August contract and no one seems to be trading the July contract. I'm curious why this occasionally happens. 


  61. Reminds me of SCUDs. They weren't too advanced but generated some awesome defense contracts.


  62. OOOh let me guess on futures.  It is probably about liquidity.  Gold is not super active so they don't want to spread it out over many months


  63. Machine Trading/Advill – While the Big Data angle is very useful, I think we're a long way off from machines that can really trade off it but most people trading aren't very good anyway so, by comparison, most traders can be replaced by a self-flipping coin anyway.  My Dad and I consulted on the original tradebots in the 90s and, even then we were all being told that computers would take over very soon.  Anyone who uses Siri or owns and Echo knows you can't trust these things to get you movie tickets, let alone bet your retirement on it!  One day, sure, but that day is still far away and the more they try to rush it – the more likely it is we have some horrific crash caused by bad data interpretation.

    TSLA/Rustle – Hey, TM is only $160Bn and those fools still make cars and, yuch!, PROFITS!  TSLA will easily pass them by very soon.  

    Revenue 3/31/2016 3/31/2015 3/31/2014
    Total Revenue 252,708,000 227,096,000 249,472,000
    Cost of Revenue 201,125,000 182,128,000 201,982,000
    Gross Profit 51,583,000 44,968,000 47,490,000
    Operating Expenses
    Research Development - - -
    Selling General and Administrative 26,191,000 22,033,000 25,233,000
    Non Recurring - - -
    Others - - -
    Total Operating Expenses - - -
    Operating Income or Loss 25,392,000 22,936,000 22,257,000
    Income from Continuing Operations
    Total Other Income/Expenses Net 1,466,000 1,377,000 1,637,000
    Earnings Before Interest and Taxes 26,859,000 24,313,000 23,894,000
    Interest Expense 315,000 191,000 191,000
    Income Before Tax 26,544,000 24,122,000 23,703,000
    Income Tax Expense 7,814,000 7,450,000 7,456,000
    Minority Interest 7,665,000 7,164,000 7,281,000
    Net Income From Continuing Ops 20,576,000 18,122,000 17,703,000

    I mean, come on – $20Bn in profit on $252Bn in cars.  Musk is going to have 25% margins at least and TM can't possibly compete with him because they are stupid and don't understand the car business like Musk does…

    GBTC/BDC – It doesn't matter if it's logical, they are getting rich by association.  So much money pouring into such a small space is very much like tulips.

    OPEC/Latch – I'm not at home but I'm pretty sure they said that last year too.  We'll see what happens in the 2nd half but the first half did almost nothing to cut inventories so I'm not sure where this sudden balance will come from.

    NoKo/Latch – I'm a little concerned but it's so far away and the market is so oblivious to everything (huge bombings in Baghdad today, no one cares) that it's hard to see why that would be the tipping point unless it escalates.  Not sure what it is Kim is going to do to "not back down" – that's like sending 3 NFL linemen in to bash some peewee player's heads and you're saying "those tikes are not backing down" – so what?  The only wild card here is whether China steps on on behalf of NoKo and that's not likely.  It's not likely we'd be doing anything there without already getting China's blessing except, of course, for the factor that our President is a complete lunatic and could be taking actions that would force us into a conflict with China because certainly he is that incompetent and reckless and egotistical and completely lacking in military or diplomatic training.  Other than that – not worried.  

    Futures/Craigs – They do have gaps sometimes but I don't know why, I usually just trade whatever's the front month and don't worry about it.

    CDN's explanation makes sense.  Kind of like options – mostly a supply and demand thing.

    Well, I have to check out now so I'm going to call it a day.   I'll catch up in the evening and tomorrow we'll be back to normal – or as normal as a webinar day can be!  


  64. MW UPDATE: Tesla shares on track for fresh record close above $333 

    May 30, 2017 14:56:00 (ET)
     

    Shares of electric car maker Tesla Inc. (TSLA) struck a fresh intraday record Tuesday, as excitement about the company's coming Model 3 sedan continued to build. The stock rose to a high of $335.16, putting it on pace for another record close. The stock set its last record close on Friday, ending at $325.14. "Tesla's short-term success is tied to the delivering and ramping up production of the Model 3 on time and as it gets closer to the scheduled start in July, investors seem to be encouraged by what they are seeing," electric car news site Elektrek wrote. Tesla's market cap currently stands at $54.8 billion, placing it ahead of General Motors Co. (GM) at $50.8 billion and Ford Motor Co. (F) at $44.3 billion, according to FactSet data. Tesla shares have climbed 56% in 2017, while the S&P 500 has gained 8%.


  65. Advill – 05/29 I wrote "See June chart for /CL WTI past three years $7 – $12 and $7 drops respectively. "

    At close:

    06/30/14 105.51 – 97.65 07/31/14 = -7.86

    06/30/15 59.09 – 46.77 07/31/15 = -12.32

    06/30/16 48.40 – 41.38 07/29/16 = -7.02

    The above "Hacienda" is for the month of JULY, not June.  As I wrote earlier on that day: "Too many things going on, Chinese Hibor 1 and 2 Week jumping into double digits had me distracted "

    I apologize, mea culpa. Interesting codicil: That's not the only thing that distracted me, right now in the old country. Night before, my wife did a 90 degree backward slip. The terrazzo tile left a baseball size hematoma with a prominent half golf ball rise in the center, on the back of her noggin.  Scared me shitless as for the first time in my life, I called an ambulance.  

    Night in the hospital, after CT and Xrays the Dr sez, Your wife is lucky, she has a hard head. I said, you betcha, so everything is as and where it should be, but nothings in order?  He smiled and nodded affirmative, the old lady howled and it hurt. 

    That ride, night and the tests, in the US would have been $5-6K easy.  I whipped out the card, the Dr said not necessary, we treat everybody the same, its all covered. Despite that, a repetition of this kind of activity is not recommended. Here's to socialized healthcare and swimmin with hard headed women, and Out.


  66. TSLA has to be a short squeeze… this is insane


  67. Wow, Nattering.  Anything to do with the knoggan is scary.  Glad everything is ok  and you didn't have to go bankrupt to find it out.


  68. Good to hear your wife is OK Naybob! BTW, CT scan alone would have been $5K to begin with. That's what they charged me earlier this year. It's amazing that people cannot look at life expectancy in Western countries and come to the conclusion that one system is the outlier for cost relative to outcome. A cynic would suspect vested interest.


  69. TSLA/Jabo

    It's been in a perpetual squeeze for the last 100 points and as long as the short percentage is over 20%, will continue to squeeze up unless institutions decide to sell.  Right now, they won't and the float of actual shares trading is very small.


  70. NFLX – House of cards Season 5 is released today


  71. TSLA – big ish dump at the close, but lunar maybe 350 is next. I can't ride there.


  72. N x N :

     Yes i just read it, well, let´s see Once I tried CL base in calendar trends, fortunately wit was in simulation mode!.

     Hope your wife is better and nothing serious happened, as StJ  says about the  stupid cost of basic (and cheap to operate) medical services, I know a man who is a gardener in McAllen, south Texas that filled  personal bankruptcy  after he felt from a tree and  broke an arm  the total cost was around $16,000 for a few X rays, plaster and some painkillers


  73. BDC / Ripple-

    Any general thoughts on Ripple?  It was highlighted in the BI article - "It’s already being used by banks such as Santander, Bank of America Merrill Lynch, UBS, and RBC".  Thanks!

    http://www.businessinsider.com/bitcoin-price-compared-to-other-cryptocurrency-2017-5


  74. Ripple looks as the response of the financial system to cryptocurrencies CC, in Spain Santander has  already  a dozen ATM´s where you can cash your bitcoins and others CC to € easily.

    ETH looks as the second best alternative to Bitcoin and Coinbase who is a big transaction site is betting for lightcoin as their third and only currency to deal with.

    BDC and Phil has been moving around this CC concepts for some time now but the approach of getting greencoins as a carbon rights trade currency being great idea is not gaining traction.


  75. By the way, Canada just refused to  implement blockchain processes in their financial system at least for the next years.

    https://www.theglobeandmail.com/report-on-business/rob-commentary/could-dlt-underpin-an-entire-wholesale-payment-system/article35106771/


  76. Advill – Money or Crypto Tulips?  Of late, a transaction volume squeeze.


  77. Jay, StJL, Advill – Thanks. Nothing like a wake up call to remind one, life is too short and Out.  


  78. Good morning!  

    Futures popping since 6:30 along with the Dollar pulling back to 97 but not low enough to stop oil and gasoline from falling off the table. 

    I suppose it's the report on deep sea drilling (see below) that killed oil and then the energy sector followed it down but then the Dollar weakened and perked the indexes up but not oil.

    • World stocks are set to end the month of May with a 2% gain after a calm day in Asia.
    • The Shanghai Composite in China finished the day 0.2% higher, while the Nikkei in Japan was down 0.1%. European stocks are mixed, with the Stoxx 600 down 0.02%. There's more action with currencies, with the sterling dropped 0.3% after a poll in the U.K. showed the ruling Conservative party could lose a significant number of Parliament seats to the opposition Labour Party.
    • U.S. stock futures are slightly higher into the last trading of the month.
    • Fedspeak alert: Dallas Fed President Robert Kaplan is due to participate in some Q&A in New York City this morning, while San Francisco Fed President John Williams is scheduled to talk in Seoul at the Bank of Korea International Conference.
    • The latest Federal Reserve Beige Book report on economic activity will also be circulated later today.

    Doubts Cloud Fed’s Rate Increase Plans Beyond JuneA potential political fight over the U.S. budget could cause the Fed to rethink its plans for later in the year.

    The Internet Helped Kill Inflation In America, Says Credit Suisse

    • MBA Mortgage Applications
    • Composite Index: -3.4% vs. +4.4% last week.
    • Purchase Index: -1.0% vs. -1.0%.
    • Refinance Index: -6.0% vs. +11.0%
    • 30 year mortgage rate unchanged at 4.17%.

    • China's manufacturing purchasing managers' index held in the expansion zone as the country returned from a two-day holiday Wednesday, marking its 10th straight month of expansion.
    • The index was unchanged from April's 51.2 and beat expectations for 51.0, indicating some much-desired stability amid bubble risks for the Chinese market. New orders also were unchanged at 52.3, while production dipped to 53.4 from 53.8.
    • Nonmanufacturing PMI rose to 54.5 from April's 54.0, with new orders rising to 50.9 from 50.5.
    • The indexes rose thanks in part to investment in construction and infrastructure.

    Japan's Industrial Production Hits Highest Level Since 2008Japan’s industrial output rebounded in April, hitting the highest level since 2008, as overseas demand continued to support the nation’s economic recovery.

    • The Bank of Japan plans to keep its bond buying activity at unchanged levels in June. The central bank is expected to accumulate ¥7.85T of notes next month based on the purchase ranges of various maturity dates.
    • The BOJ lowered its projection for Treasury bill purchases at the end of June to a range of ¥27T yen to ¥29T.
    • Eurozone flash inflation increased 1.4% in April to fall just short of the consensus estimate for a 1.5% rise. Inflation decelerated from the 1.9% pace seen in April. Core prices rose 0.9% during the month vs. +1.0% expected.
    • Eurozone unemployment fell 10 basis points to 9.3% for April.

    In Watershed Event, Europe Unveils Plan To Securitize Sovereign Debt

    • barnburner print of close to 4.0% is expected when Q1 Canada GDP is released later today. The economic numbers aren't expected to be strong enough to prompt the Bank of Canada to boost interest rates this year, despite the fast pace of growth in comparison to the U.S. and Europe.
    • "These days, a quarterly pace anywhere near our 4.5 per cent projection is a rarity among developed economies, and would have the last six months advancing at a 3 1/2 per cent rate," observes CIBC Chief Economist Avery Shenfeld.

    How Debt-Asset Bubbles Implode: The Supernova Model Of Financial Collapse

    The Next Stock Market Crash Will Be Blamed On Trump But It's The Fed's Fault

    • The conference season heats up today with several key gatherings.
    • Presenters at the Sanford C. Bernstein Strategic Decisions Conference in New York City include McDonald's (NYSE:MCD), Yum Brands (NYSE:YUM), Campbell Soup (NYSE:CPB) and Kraft Heinz (NASDAQ:KHC), PayPal (NASDAQ:PYPL) and Bank of America (NYSE:BAC).
    • The RBC Consumer & Retail Conference in Boston will see execs with Supervalu (NYSE:SVU), Brinker International (NYSE:EAT), and Dollar Tree (NASDAQ:DLTR) talk shop among others. Watch for guidance updates and comments on strategic adjustments to Trump policies.

    Manhattan retail rents are falling and it's not a good sign

    Another Warning Sign Flashes for Subprime Auto LoansFewer subprime borrowers are paying off their auto loans early, a possible sign that consumers with weaker credit scores are struggling more, according to a report by Wells Fargo & Co. researchers.

    A Wall Street bank just issued the most dire prediction yet about US shopping malls

    Once Costly Deep-Sea Oil Turns Cheap, to OPEC's DismayReports of deep-sea drilling’s demise in a world of sub-$100 oil may have been greatly exaggerated, much to OPEC’s dismay. Pumping crude from seabeds thousands of feet below water is turning cheaper as producers streamline operations and prioritize drilling in core wells, according to Wood Mackenzie Ltd. That means oil at $50 a barrel could sustain some of these projects by next year, down from an average break-even price of about $62 in the first quarter and $75 in 2014, the energy consultancy estimates.

    U.S. military satisfied after missile defense test

    Image result for missile defense cartoon animated gif
    • The U.S. military is taking a victory lap after a successful missile defense test involving a simulated attack by an intercontinental ballistic missile. An ICBM-type missile fired from the Kwajalein Atoll in the Marshall Islands toward Alaska was intercepted by a missile fired from Vandenberg Air Force Base in California.
    • Boeing (NYSE:BA) is the prime contractor on the defense system. Raytheon (NYSE:RTN), Orbital ATK (NYSE:OA) and Northrop Grumman (NYSE:NOC) are sub-contractors.

    Donald Trump Confronts New, Harsher Realities at HomeRussia probe expands to president’s inner circle, a staffer exits, and decisions loom on a new FBI director and Paris climate accord.


  79. I read that Tuesday's volume was lowest in 2 years… relevant?


  80. I bought 1 /TF long. Tight stop under 1375. They gotta get over 1380. 


  81. Phil had to miss webinar so I'm wondering if you had any futures trades you liked or started? Did you go long oil and are you holding any into tomorrow? RB, or NG too? Or is it too risky right now?