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Tuesday, August 16, 2022


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

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

"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

And this comes to mind as apropos and Out.

,  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.   

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. 

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.

ethereum could go to 500 from here

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.

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

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. 

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

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

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%.

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.

TSLA has to be a short squeeze… this is insane

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.

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.


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.

NFLX – House of cards Season 5 is released today

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

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

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!


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.

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


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

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

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

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

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?

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