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Thank Trump It’s Friday – Dodd-Frank Rollback Dooms Us All

Image result for top 1% share of income post crisisSeriously?

The House voted yesterday to repeal much of the Dodd-Frank Act (the one that was meant to protect us from another Financial Crisis) by creating the Orwellian-named Financial Choice Act, which was unanimously opposed by Democrats because "it is bat-shit crazy."  Only one Republican, Walter Jones of North Carolina, was brave enough to stand up against this bill, which was crafted by a coalition of Goldman Sachs flunkies and Koch-funded think tanks.  

As you can see from the chart above, the financial crisis was very good to the top 1%, dropping a 15% larger share of the wealth into their laps (and out of your pockets if you are not one of us!) while the poor, of course, got 10% poorer.  It's a fair trade – in order for 1% of us to get 15% richer, you only have to get 10% poorer – so we both win, right?

So the incentive for Trump and his Top 1% buddies and their pet Congresspeople is to create another financial emergency, which will allow them to once again take on sweeping emergency powers and plunder the Treasury while plunging the Bottom 99% further into National Debt (now $20 TRILLION) to pay for it – just like we did last time.  Or maybe I'm wrong – how is that trickle down thing working for you so far?  

Related image

That's just the Top 1% minimum cut-off.  To get into the Top 0.01% (32,000 Americans), you need a minimum income (not wealth) of $36M per year.  THEN you will get the attention of a Congressman!  As it stands now, the banks are in for a good old time as they are once again allowed to engage in speculative trading (the kind that drove oil over $100/barrel and gold to $1,800/once) and, if you want to complain about it, you can't – because the bill also guts the Consumer Financial Protection Bureau because, if Wells Fargo creating millions of fake accounts to charge their customers extra fees has proven anything – it's that banks don't need regulating.

“It destroys nearly all of the important policies we put in place…to prevent another financial crisis and protect consumers,” said Rep. Maxine Waters (D., Calif.), referring to the Dodd-Frank law.

Image result for republican tyrannyLOL – Oh Democrats, they are so cute, aren't they?  Don't worry because GOP Committee Chairman Jeb Hensarling said he is looking for ways to push pieces of the plan through the Senate without Democratic support by attaching some measure to the annual budget bill, which passes on a majority vote because that's how democracy works – you get a voting advantage and then you steamroll in whatever extreme legislation you are paid to write, no matter how much it harms your constituents and despite all objections from the other party.  Ah, Democracy – the tyranny of the majority (well, the electoral college majority, anyway).  

It's funny because, before the 2008 crisis, one could maybe forgive us for being ignorant of the danger but this is just plain stupid and economically suicidal – these people are laying the groundwork that will destroy America far more thoroughly than any terrorist ever could.  

Meanwhile, this stuff is great for the banks, of course, and XLF popped yesterday but still has a long way to go if it's on a path to recovery.  We got a nice pop in the Dollar overnight and our long play on the /DX Futures from last Friday's PSW Report was good for a nice $854 gain and now we're long /DXU7 (Sept) at 97.08 as we cashed out the front-month in our Live Member Chat Room this morning. 

Aren't you glad you didn't spend $3/day to subscribe to the PSW Report last week?  By saving $15, you also save having to pay taxes on $15,000 worth of trade gains over the past 5 days – that's like saving $5,000 – congratulations!  

Premium Memberships are almost full and that means it's almost time to raise our prices again, as there is a limit to how many Members we can have in our Live Chat Room.  To help you pay for a Membership, I'll let you follow our Russell (/TFU7) trade idea from chat this morning, where we shorted 4 September contracts at 1,418.25.  The 4 contracts pay $200 per point so a drop of 25 points, to 1,397, will generate $5,000 and fully pay for a Basic Live Chat Membership for a full year, which would also lock in the current prices – that will save you more than the taxes you saved by not subscribing last week!  

Another way to play the Russell short is by using the Ultra-Short ETF (TZA), which is way down at $16.50 and the simplest way to play is to buy 100 June $16/16.50 bull call spreads at 0.29 ($2,900) which makes up to 0.21 ($2,100 – 72%) by next Friday if TZA is simply over $16.50.  That's pretty good money for a week's work!  

Next week is going to be wild as we have the Fed decision on Wednesday (2pm) along with PPI on Tuesday, Retail Sales, CPI and Business Inventories also on Wednesday, Philly Fed, Import/Export Prices, Empire Manufacturing and Industrial Production on Thursday and Friday we have Housing Starts and Michigan Consumer Sentiment.  That's a good week of data and Retail Sales will be key on Wednesday and we don't think the Philly Fed can continue it's blistering pace – another good reason to hedge.  

Speaking of trade gains, by the way, oil is back at $45.50 but we had a nice $500 per contract run up to $46 and of course we are reloading this morning.  Oil (/CL) holding up against a rising Dollar is a good sign.  We will also reload Gasoline (/RB) back at $1.495 and those gains have been uninspiring so far.  

The Dow shorts were huge winners from yesterday morning's PSW Report as we peaked out right at our 21,200 target and then fell back to 21,100 for a nice $500 per contract gain there as well (you're welcome) and the Russell (/TF) shorts were good for $450 per contract as we dropped back to 1,410 and, as noted above, we're back on that horse this morning.  Not bad for a $3 newsletter, right?  

Have a great weekend,

- Phil

 


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  1. I don't know how vindicated I would feel if the FBI director had spent 2 hours telling the entire world that I can't be trusted to tell the truth or if my friends in Congress had to explain my behavior by saying that I was ignorant! Maybe that last bit explains the vindication.

    In the meantime, Trump probably didn't pay attention to what Comey said – he said that when he left, Trump was not under investigation but then added later that it was up to Muller to decide if Trump committed obstruction of justice so basically saying that Trump is now under investigation.It's not that complicated.



  2. Maybe some lessons will be learned from the Kansas experiment with tax cuts although I doubt it. They will come up with explanation for the failure again:

    http://talkingpointsmemo.com/news/kansas-override-brownback-roll-back-tax-cuts

    Kansas legislators Tuesday night repudiated the tax-cutting experiment that brought Gov. Sam Brownback national attention, with even fellow Republicans voting to override his veto of plan reversing many of the income tax reductions he’s championed in recent years as a way to fix the cash-strapped state’s budget.

    The state will increase its personal income tax rates and end an exemption for more than 330,000 farmers and business owners. Legislators expect the changes to raise $1.2 billion in new revenue over two years to close projected budget shortfalls totaling $889 million through June 2019 and also provide additional funds for public schools.

    If you try the same plan all the time and it never works, what does it say about you?


  3. C'mon /RB! Get over that 1.50 line, it's the weekend you know! 


  4. Good morning!  

    Wrecking the Ship of State

    Big Chart – RUT is over the line, can't be too bearish.

    Sadly, StJ, many people think that cartoon is the actual truth (and don't even get the joke).  

    It seems like Comey did tell Trump 3 times he was not under investigation and Trump said Comey told him that 3 times last week in a tweet.  Since it's very doubtful Trump took notes of the 8 meetings – I'd say Trump certainly does have tapes and people who reviewed those tapes and came up with talking points like "Comey said 3 times you were not under investigation".  Of course, it's very possible those people are Russians using sophisticated listening devices (I'll bet Trump is so bugged he sets off metal detectors), so we'll never get to the bottom of this…


  5. Good Morning.


  6. Who needs tapes when there is always a backside to pull 'facts' from?……


  7. can't even say FU TSLA….

    FU ME!!!!


  8. I'm just have to look forward to what the Republik of California will come up with to fight the emerging tyranny from the East….:)


  9. Secession might become an option soon 1020!


  10. We have plenty of room for all our East Coast friends!


  11. Big spike up at the open for the indexes but fading fast.  /YM is the laggard at 21,185 and 21,200 is still a good stop.  

    I'm up to 6 /TF short at 1,418.983 so next 2 get added at 1,421 to push me near that 1,420 line but back to 4 if I get even and then back in the cycle again.

    • Citi downgrades Snap (NYSE:SNAP) to Neutral on user growth and monetization concerns.
    • Analyst Mark May notes the company’s forecasted Q1 weakness creates near-term concerns about user growth. 
    • Upcoming lockup expiration will create more pressure by boasting float by 500%. 
    • PT: $20, down from $24; Analyst average: $22.
    • Source: Bloomberg 
    • Snap shares down 1.59% premarket.  
    • Piper Jaffray analyst Sam Kemp writes that Facebook’s (NASDAQ:FB) current share price likely has an upside in H2 ad revenue, potentially driving range-bound trading in the near term though his long-term expectations remain unchanged.
    • Kemp believes revenues could triple by 2022 based on growths in Instagram ad units, e-commerce relevance, Messenger audience, and through outsourcing customer service. 
    • Sees Instagram revenues increasing from last year’s $2B to $22B in 2021. 
    • FY17 and FY18 EPS estimates rise one cent each to $4.82 and $6.03, respectively. 
    • Piper Jaffray reiterates Overweight rating and $165 price target.   

  12. 1020 – How about refuges from the UK now our PM just got into league with a bunch of climate denying, creationists with links to terrorism?


  13. Malsg, can you explain your post, I don’t get it.


  14. Got my rubber boots on, shit's getting deep today.


  15. Phil – KC — looks like it wants to get to 130. 5% rule from 125.5 to 131.75   Is 128.5 and hold a strong bounce? 

    #2 – do you see KC going higher this time of year. Looks like Julys in the past were good up months.

    I had 2 at 126.8, Sold one at 126.95.  Avg now is 126.05


  16. IWM new intraday high by one penny… rocket seems to have fizzled


  17. I'm most likely wrong but for .50 I took the chance the TSLA reverses today.  It just seems like the stock has to be exhausted.  Though if it falls to 372 in next hour, I will be out of half.


  18. forgot to clarify, bought the 370 puts for today


  19. VIXin…..has no umph left in it.  Happy Friday.  I guess in my investment lifetime, it is an amazing feat to have hit two ATLs and ATHs.  


  20. Pharm

     

    Is Epistyle EPZM a hold or sell?

    Thanks


  21. At this point I wonder… if we bombed North Korea would it even make the news?


  22. rustle… TSLA is a constant short squeeze..

    lesson.. never short the most shorted stock in the market-- most crowded trades usually get you squeezed.

    it's not like there is bk risk (at least not for a long time) 


  23. TSLA/Jabo

    I am long the stock with short puts but just a feeling that weak shorts have covered in last few days and short position is a lot less.


  24. hope you are right..

    i am one of those weak shorts..

    painful lesson


  25. /KC/Latch – It may take a while to get going.  Our premise is the northern hemisphere won't have as good a season as the southern did (which just finished) and we're also hoping demand keeps up.  

    TSLA/Rustle – Sure doesn't look exhausted.  No reality to the stock at all, 1.6% is up $1Bn first thing in the morning and on what?  3M $375 shares is $1Bn but they'd all have to be buys with no selling to have the flow match the move – more likely it's 1/100th of that.  It will be spectacular when it pops but when is a good question.  

    VIX/Pharm – 9.44!   I don't know why we don't just short this thing every month and go on vacation:

    NoKo/Mkucs – We did.  

    Never short the indexes on a Friday, apparently…  

    Or any other day…


  26. Why are we short this market again? Wtf


  27. /TF-killing me…..


  28. SVXY long 10 of Jul 150/140 Bear put spread and short 5 of jun23 160 calls…should I roll?


  29. FU FTR!!!!

    the market hits new highs every day and this POS stock can't even have one green day..dangit!


  30. jelutuck - our previous government failed to get a majority following last night's election so have had to form a government with one of the smaller political parties.  The one they have chosen is the DUP and their policies are somewhere right of Fox News.  Its actually horrifying.


  31. We're not short, Jeff, we have many more longs than shorts but we're hedging (and re-hedging) on the way up to lock in a percentage of the long gains.  If your long gains are not, in the very least, keeping up with your short losses – then you are over-hedging and need to either cut back on the shorts or add more longs.  

    We've gotten a bit more aggressive with the shorts but the LTP gains are still outpacing the STP losses by a wide margin and the OOP is essentially neutral in either direction as we lock in a 190% (so far) gain into the end of year 2 (Aug 8th).   My goal there is to get another 10% for an even 200% – probably I could just buy some TSLA longs…  cheeky

    SVXY/Millard – Well the June short puts should go worthless and you still have $7.50 in the July $150 puts and the Sep $160 puts are $17.50 so is it really worth spending $10 to roll up $10 and buy 2 months?  I'd wait for the short June puts to expire and then you can sell the July $150s to some other sucker for $7.50 and do that roll and then it will be net $2.50 and well worth it.  You only have to wait until next Friday and the delta on the July puts is 0.33 and the Sept puts are 0.44 so, even if SVXY moves $10 against you – the roll only costs you $1 more. 

    FTR/Jabob – Looks even to me.  

    Far right/Malsg – That's how America went down the toilet, the Republicans threw in with the Koch-funded Tea Party and things went straight to Hell from there.  


  32. EPZM….I like the science qc, and if anything, I would sell a put or two down a few bucks.  Seems to be a falling rock right now.


  33. Yeah, I know. I was just referring to futures. But I also know why we're short there. 


  34. Phil & Co – how much to run an Ad that climate change is turning people gay?  That should get the base motivated.  I reckon even Betsy would get behind that.

    Come on oil.  Its the weekend and Daddy needs a new country to live in!


  35. Pharmboy 

     

    Thanks 


  36. 1 Short TMU7 at 1429


  37. meant TFU7


  38. Pharm

    Exelixis, Inc. (EXEL)

    You think they have another $10.00 of upside?

    Thanks


  39. I have 5 short /TF at 1424 now 


  40. here comes the TSLA reversal


  41. Reality Winner. Unreal, yet all too believable.


  42. /CL busted through 46  -- hope it holds.   Out of 3 at 45.56 avg.    Thanks PSW! 


  43. up 4x on those options, not bad for less than 2 hours but still holding.


  44. Butterfly Portfolio Review:  It's only been 3 weeks since our last review but the market is crazy and we had a lot of adjustments posted on Tuesday so I wanted to make sure everyone is on the same page ASAP.  First of all, thank goodness for the low VIX as it's giving us our profits on the shorts we sold (most of the money we make in the Butterfly is from premium selling).  The downside is the new shorts we're selling have low premium – which puts more pressure on our targets.  

    As we get closer to expiration, the time decay also gives us a nice profit kick but, on the whole, not an exciting month as we're only up $5,000 (5%) at $317,546, but that's after being down last month so, on the whole, we are staggering through in this crazy market where some of our short calls are getting away from us.  Still, up 217.5% overall is not a tragedy for our "conservative" portfolio.  

    Note:  I'm skipping the 3 loose items at the top and will discuss them in context of the full trades as I get to them alphabetically.

    • AAPL – Whole new position now and doing well so far.  The changes in AAPL have dramatically upped the cash position in the portfolio, which is  something we wanted to do to guard against a possible market correction (we don't have hedges in this portfolio so CASH!!! is our hedge).  Now we have 60 2019 $140/170 bull call spreads with 20 short $130 puts with a $180,000 potential at $170+, currently valued at net $68,150 so there's $111,850 upside potential on that spread!  We also have 60 short Sept $140s we sold for $17 so $157 is our break-even there but, even if we just give the money back – there goes $102,000 but, ideally, AAPL dips a bit into Sept and then gets back on track next year to maximize our gains.  
    • COST – Essentially a new position after the adjustments so good for a new entry (the 2019 puts are a buy, not a sell – will be fixed).
    • CTSH – We're waiting for a pullback to sell some puts.  

    • DIS – We are right on target for our short July puts and calls and our long trade is mostly in the money – a rare perfect trade this quarter!  
    • GIS – I spoke too soon, also right on target.
    • MSFT – We just rolled the short calls and we're hoping for a bit of a pullback but at least our long spread is in the money (2019 $62.50/70).

    • PG – Another one on track.  Actually it's not as bad as I thought…
    • TGT – Here we are simply long on TGT and waiting for it to come back.  It's crazy how far behind WMT it is.  
    • TXN – Been on a massive run all year (20%) and our short Oct $77.50 calls are the new roll of a painful loss last month bt at least our $72.50/82.50 spread is in the money to take some of the sting out.  
    • VLO – You would think they'd be tanking on low gas but lower oil is good for them.  Here we have June puts and calls that were in the money until this morning – now improving and, per the Valero Rule, that means it's time to go long on /RB!  Meanwhile, we'll be simply looking to sell July $65 puts and calls once these expire.  

    • WMT – WMT is up almost 20% while TGT flatlines.  TGT made $2.7Bn on $70Bn in sales (3.8%) and WMT made $14.3Bn on $485Bn in sales (2.9%) and WMT's market cap is $240Bn while TGT is $30Bn so WMT is priced 8x more than target with only 5.3x more profits and 23% worse margins.  So, either WMT is overpriced or TGT is underpriced – we're playing for a little of both.   The 15 short June $67.50 calls are deep in the money at $11.80 ($17,700) and we will roll them up to 25 Sept $72.50 calls at $7.40 ($18,500) about even.

    • WYNN – So high we didn't even want to sell short puts yet they keep going up.  Hopefully this is it as we already sold the short Jan $130 calls but our spread is $120/145 so we do have room to run.  

    So, on the whole, just a bit of excitement as we made adjustments at what we THINK is the top but our main defense is cash – $300,000 worth of it in a $321,000 portfolio.  Even with the AAPL trade we're only using $273,840 of $642,000 in ordinary margin – in a PM account, we have 80% of our buying power intact.


  45. good call rustle


  46. sold half at 2.35


  47. Once again the Nas takes a good dive while the RUT is still at highs.  Next time I should just wait for the Nas to give the signal before shorting /TF.  Hopefully it follows lower.  

    Trump is about to speak on infrastructure.  

    Ad/Malsg – Give the idea to the South Park guys, they can make a whole show about it.  

    TSLA/Rustle – Good job!  (that's why he's our hedge fund trader!) 

    You're welcome Joseph.  Check out how VLO telegraphed that move today – especially the way /RB gains outpaced /CL, which widens the crack spread and their profits.  

    We may have to revive the Valero Rule!  


  48. hope you sell the rest at 10 or higher!


  49. jabo -me too, possible it gets to 365 today though.


  50. Phil that Trump cartoon is hilarious.  Would have been better if the iceberg was called truth or something.


  51. OMER – started picking up in last 30 minutes..!


  52. Phil/PG Butterfly

    Where would you roll the Jun 16 $87.5 puts and calls?  Thx.


  53. Jeffdoc- I too am in TF and getting killed. I sure could use Trump to say something stupid to drop the market for the afternoon! 


  54. Tesla – just exceeded BMW in market cap … I think 2000 wants its valuation metrics back :-/


  55. Wow, I agree with what Trump's saying about regulations on building projects but some of them are there to make sure public money isn't misused and, of course, that things are actually built to code.  Still, they certainly can be streamlined quite a bit.

    PG, Butterfly/DC – Oops, should have mentioned those.   Our next sale will be Sept $87.50 calls ($2.20) and the Sept $87.50 puts ($2.30) as it's generally right in this range.  

    Guy on CNBC says how crazy is it that the head of the FBI testifies on TV that the President is a serial liar and the market makes new highs?  


  56. Nas down 0.5%, RUT up 1.3%.


  57. Jabo – couldn't hold till 10 but happy at 4 with the last batch


  58. Trump – I'm guessing everybody already knew that about DJT, therefore nothing new.


  59. good job rustle (even though I hope you regret selling them later) ;-)


  60. Great timing, Rustle !


  61. phil — is RUT leading or lagging NAS? 


  62. VLO/Phil – Now, that is incredible!  Thanks for the homework over the weekend.  

    The beach is calling and I must go.  Good Weekend All


  63. Go (down) TSLA!


  64. FYI… the local news (FL) and weather channels are reporting an 'above' average hurricane season. Thinking /NG long October – any estimates on the winter season up North?

    Story Highlights

    NOAA expects 11 to 17 named storms this season, more than the 30-year average for the Atlantic Basin.

    The Weather Company predicts 14 named storms, seven hurricanes and three major hurricanes this season.  Warmer North Atlantic sea surface temperatures and the reduced likelihood of El Niño's development are among the factors taken into account.


  65. joseph – how is NOAA's forecasting record? As good as the FEDs? :)




  66. could've got the 10



  67. TSLA…Technical reversal or news?



  68. Phil – TSLA – "Seriously I have never seen such a ridiculous valuation in my life.  Pets.com had a better chance of justifying its market cap than TSLA does."  

    Thank you for my moment of sock puppet Zen and 1st LMAO of the day.


  69. Ok, I bought back 4 of 5 on that little dip.  I'll sell as we bounce here and keep scaling in an out until I'm happier with my avg.  Will hold 2 until the end of the day I think.


  70. Palladium soars to a 16-year high


  71. Anyone know what is happening to the / NQ futures?



  72. Ancient Egypt, Ancient Rome… Hey Ben Carson, I guess you mean full of slaves.


  73. Carson/mkucstars1

    Carson doesn't believe in slaves, they were immigrants.

    "That's what America is about, a land of dreams and opportunity," Carson said while speaking to HUD employees. "There were other immigrants who came here in the bottom of slave ships, worked even longer, even harder for less. But they too had a dream that one day their sons, daughters, grandsons, granddaughters, great-grandsons, great-granddaughters, might pursue prosperity and happiness in this land."


  74. C'mon Nas, pull the RUT down with you. Sorry everyone, I just need a brief drop .


  75. why is JO down???


  76. Took my losses on NQU7 at $2k instead of $7k and feel like a winner… huh?  :)


  77. I know, Rustle… I won't waste time reading the article… it would be funny if it wasn't real.


  78. RUT/Latch – I hope it's lagging, /NQ is down 1% and if the RUT goes down 1% my Europe trip goes to first class!  

    Have a good weekend Joseph.

    TSLA down 2.5% before bouncing to -2% ($362.50), strong bounce is $364.25 and that's off the open so if it fails there – it's getting weak.  Off the spike to $375 back to $360 is $15, so $363 is weak and $366 is strong so that's the area to watch anyway ($364-366).

    So rare that TSLA sells off we have to take a picture, right?  

    Hurricanes/Joseph – From my 50+ years of traveling between NY and FL and being an avid skier who cares about weather stuff, I can tell you that the year after El Nino is usually strong for hurricanes and the year after that if not.  We did get our expected winter storms out west so now I expect the hurricanes in the east.  

    NOAA/Latch – The new satellites they have now are making weather forecasting much more of a science.  Like going from magnifying glasses to microscopes.  

    For Naybob:

    Image result for pets.com sock puppet animated gif

    Good job Jeff!  

    LOL, I knew that would happen – should have played it:

    • According to Capital Forum, FTC staff are preparing a suit set to block the Walgreens (WBA-0.6%)/Rite Aid (RAD -13.9%) merger.
    • Among the issues is concern that Fred's (FRED -5.2%) can't step in to replace Rite Aid as a competitor.

    Submitted on 2016/11/08 at 10:47 am

    CVS/Options – Ever since WBA formed, I've pretty much decided RAD and CVS are essentially doomed.  Boots really has it together in Europe and they are spending big to revamp Walgreens over here and it will cost Billions for CVS and RAD to start catching up, which will impact earnings, etc.  Actually, RAD already gave up and is being swallowed by WBA as well, which does not bode well for CVS.

    Submitted on 2016/11/08 at 12:36 pm

    CVS/Tangled – If you are stuck with them, I'd roll them or maybe roll 1/2 and sell the other half on WBA – just to diversify your bet.

    WBA/8800 – As noted to Tangled above, I feel better about them than CVS but then WBA is on an M&A kick that might hit them for a couple of Qs but, LONG-term, I think WBA is a good, solid hold.

     

    Submitted on 2017/01/27 at 2:58 pm

    RAD/DC – They don't make anything on their own and, if the deal isn't done, then WAG is their competitor and they are DOOMED.  It's a nasty but common tactic to string a competitor along by dangling a deal in front of them and then letting it fall apart – leaving them up a creek without a paddle.  I get that vibe here.  

    Bloomberg recently reported that Walgreens has yet to satisfy the FTC’s requirement, which caused Rite Aid stock price to collapse. This coupled with the failure to extend the deadline has caused mass panic and a great deal of uncertainty.

    If they REALLY wanted the deal, they certainly could have hit the FTC's numbers.  

    Furthermore, why announce the Fred’s purchase of 865 Rite Aid stores in December, to satisfy the FTC’s requirement for store divestments? And finally, why tell analysts and investors earlier this month that it still planned to close the acquisition in early 2017?

    Why does that not make sense?  Boots bought WAG and they wanted to dump stores but, being English, they didn't want to seem like bad guys so they are "forced" to dump 865 stores cheaply, rather than just closing them. 

    Submitted on 2017/02/02 at 11:20 am

    CVS/8800 – Anyone who is not WBA is screwed.  

    RAD/Pat – I think WBA is going to kill them eventually.  Even at $4.50, you'll be lucky if they cover 0.05/share for a p/e of 90 and this is not, by any stretch of the imagination, a growth story.   So, from that info – I'd say short Einhorn!  

    See, you guys think I just make this stuff up but I could see that one coming a mile away!   Poor RAD.  crying

    Nas/Craigs – They are now 2.5% apart – that is usually as far apart as the majors get from each other – even that is very unusual in a single day. 

    JO/Jabob – /KC is up for the day, just not as up as it was.  JO is just silly.  

    AAPL down 3% you know, that's killing the Nas.  

    On the bright side – it puts us on track to make $180,000 in the Butterfly and OOP!  

    /NQ/Latch – Congratulations, that is SO much better than losing!  


  79. rustle – nice reversal on TSLA! I assume those were short term options expiring today? I love thos eplays when they work out.


  80. @bdc

    Yup.  Cheap options, big payoff.


  81. /NQ only saved by the 5,800 line (so far), I'd call it a 100-point drop which means even a weak bounce is going to be 20 points. 


  82. Look at the volume on the Nasdaq – 1.5x normal volume:


  83. Short-Term Portfolio Update:  Since our May 16th update we've dropped another $21,000 as those MoMos are killing us but the LTP profits are nice and safe and that's the main point here.  It's only by happy accident that we're up 305% in the STP as it's supposed to LOSE money as the LTP goes up but our timing was fantastic taking profits on the dips (back in the days when there used to be dips).  And talk about CASH!!! – we have a net $405,515 value but we have $490,475 of it is cash as we sold a lot of MoMo short calls, which are now eating into the profits but I still have faith.

    • JO – Dead trade and I don't like this ETF anymore.  Still like /KCU7 (Coffee Futures) though.  
    • AMZN – Dow $10K on these and we'll have to roll as we get closer to earnings but no hurry as $993 is still ridiculous.
    • FAS – Was doing great but the banks popped on the Dodd-Frank repeal.  Won't change anything and the whole repeal is likely to be massively delayed in the Senate and they'll snap lower.  This is the leftover leg of a bullish spread we already made huge money on.  Just being greedy (and it's become another hedge).  

    • AAPL – Those were just an offset to some hedge – on track. 
    • ABX – Another offset, also on track.
    • GOGO – Another offset – we're good at picking these!  
    • SBUX – Yep, really good!  
    • NFLX – This may end up working out if the short puts expire as it was a net credit on the spread.  If the short calls expire worthless, we'll be golden.  Meanwhile, maybe we'll get lucky next week on the short spread.  

    • SQQQ – So the cost of this hedge (the $40/55) since May is net $6,000 and it's a $150,000 hedge.  That's your monthly cost of insurance.  Just make sure your longs make at least $12,000 in a flat to up market and you'll be fine!  
    • TSLA – F them!  Insanely overvalued cult stock.  I will not capitulate!  

    "To the last, I grapple with thee; From Hell's heart, I stab at thee; For hate's sake, I spit my last breath at thee."

    Related image

    Unfortunately, this white whale is costing us money.  It almost seems unrealistic that our short $335 calls will expire worthless but Emperor Musk has no clothes (or profits) and, one day, all the people will realize it's true and point and laugh….

    • TZA – Our other big hedge.  This one is aggressive and down a bit but, as with SQQQ, it's lost $14,000 since March so $5,000 a month and if the Russell falls 10% and TZA goes up 30% to $21, that's $60,000 back and another 10% fall in the RUT would be $27 for another $60,000 (all profit) – that's how the insurance policy works (and we already bought back the short calls so maybe cost $15,000 less). 


  84. Holy crap, my /TFs went green!  Back to 10 short with tight stops now – thrilled to be even.  

    Notice how the weak bounce failed on /NQ and then we failed 5,800 on the 2nd test.  Good use of the 5% Rule.  


  85. Phil, what's your avg?


  86. Holy crap indeed! 


  87. Must be somewhere around 1425


  88. die tSLA!!!!!


  89. 09-Jun-17 10:22 ET

    NVDA – NVIDIA: Citron out cautious on shares  (164.41 +4.47)

    This was from Briefing Trader.  Saw it shortly after it was posted.  Should have acted on it, but didn't. :-(


  90. Avg/Jeff – On /TF?  Almost exactly 1,425.  Playing for first class seats now.  


  91. Thx.  That's what I figured.  


  92. /GC > Phil – What do you think of /GC at 1270 (50 DMA 1263) with /DXU7 at 97?
    Fallout from UK seems to be subsiding and EUR regaining against the USD, …. and Trump is back on the tweets.


  93. PCLN down 53

    AMZN down 31

    TSLA down 13

    wow.. what caused this? rustle?


  94. Wow, it's a good old-fashioned sell-off.  /NQ hitting -2.5% at 5,750 – that better be bouncy!  150-point drop so we're looking for 5,780 (weak) and 5,810 (strong).  Below weak at the close means we have a good chance of gapping lower on Monday.  

    Finally a Monday worth showing up for!  

    /GC/Aquila – It hasn't got any particular support until $1,260 and look out below if that fails.  Since I'm long $$$ I'm not too keen on long /GC at the moment and I don't see Europe improving over the weekend.  

    Well, there's my first class seat paid for at 1,420.  

    /TF still up 0.4% and that's 2.9% better than /NQ – there's a chance we get an epic move down into the close if 5,750 fails on /NQ.  


  95. STP gained $6,000 since I posted it!  LTP no change – hedges still working….


  96. 5750 on /NQ broke like it wasn't there.  Guess they could still take it back very easily. 


  97. Phil – Thanks for the sock puppet, I love Towely too!!!

    1020 – I'm just have to look forward to what the Republik of California will come up with to fight the emerging tyranny from the East….:)

    Taxi-fornia-cation

    Muck, Rustle – Carson – What a coconut!

    UK Election Results – Some comments from the UK - 

    "So May follows Cameron as the idiot Tory PM, throwing away a majority and Brexit. I was delighted at Cameron's comeuppance, but to throw away the most important decision of the British people in hundreds of years? That's incompetence verging on treasonous. From the moment polls closed and results started coming in on Referendum night, it was obvious Remain were going to fight our decision. We weathered everything, only to have May throw it away. Unbelievable."

    "It's taken less than a year for the people of this country to forget the biggest decision they made and go back to petty squabbling. Maybe I should be surprised we lasted that long. Now what's to follow… exactly the worst scenario, the humiliation of saying we wanted to leave and now our politicians saying actually we've thought about it and we don't really… total fkg humiliation, and yet another Tory PM absurd miscalculation."

    "Oh good… so now we're going to have Corbyn or a severely weakened May going cap in hand to Germany to forgive us for being so foolish as to think we could be a free people. It seems the vibrant proud nation of last year is once more drooling over their welfare checks… how sad."

    Some not so happy and Out.


  98. /GC . Phil – Thanks, I was an early seller of /DX at 96.8 (not being greedy) and looking for USD to retreat.  


  99. 2,420 went too easily on /ES too.  This is the problem with low-volume rallies, when people try to take profits – there are simply no buyers.  

    Have I mentioned how much I like CASH!!! lately?  

    AAPL down almost 5% – we could have stuck with our original short calls!  


  100. 5700 on /NQ!


  101. Nope, 5,700 failed! 


  102. That broke too, yikes!  Hold on!


  103. 2 first class seats at 1,412.50!  


  104. Had to cash half on that, stop the rest at 1,415.  Couldn't possibly sit in coach all the way to Europe thinking I let a first class seat slip away…


  105. Finally! I hope we get some follow through on Monday so I can buy!


  106. Wow, once again I miss the train I was riding through the rough spots-  NQ. Thought I was making the right decision to bail at 5820 before it bounced again as usual. Had 4 short at the time.  Trying to console myself with the 2 short TFs I got at 1428.


  107. There will be some pondering going on this weekend. Monday might be interesting indeed…


  108. Latch, if you can learn to consistently save the losers and take those winners off the table, you'll be amazed at how fast it adds up. 

    Done with /TF short – $5,585 for the day.  

    AAPL held 5% at $147 (so far).  Down $8 so call it $1.50 bounces to $148.50 and $150.  


  109. And I'm done.

    Phil, thank you for all the education here. I've gained so much knowledge being a part of PSW.

    Thanks to the rest of the members as well! I appreciate all of the contributions you make.

    Have a great weekend!


  110. EXEL/qc….IMHO, I don't think it has another $10 in upside.  SGYP…yes.  :)


  111. and…..time for the PPT.


  112. Sill long 4 /CLN7, 2 /DXU7, 2 /KCU7, 4 /NGV7 and 2 /RBN7.   Don't see any I don't want over the weekend. 

    You're welcome Jeff, have a good weekend.  

    • The Atlanta Fed tracker was seeing nearly 4.5% growth a few weeks back, and still 4% as recently as the start of June. Following the latest economic data – including the Census Bureau's manufacturing report and the BEA's auto sales estimates, GDPNow is expecting only 3% GDP growth in Q2.

    • Nvidia is down 6% after Citron likened the high-riser's gains to "frenzied casino action." Other chip names: Advanced Micro (AMD -5%), Cirrus Logic (CRUS -4.9%), Cypress Semi (CY-3.4%), Texas Instruments (TXN -2.5%).
    • Notable ETFs: SOXLSMHSOXXUSDXSDPSISOXSSSGXTHFTXL
    • Meanwhile in the large-cap names, Goldman's Robert Boroujerdi says the one-way direction (up) is leading investors to underestimate risks. He notes that if FAAMG were its own sector, it would have lower realized volatility than consumer staples and utilities.
    • Apple (AAPL -3.4%), Facebook (FB -2.6%), Google (GOOG -2.5%), (GOOGL -2.6%), Amazon (AMZN -2.1%), Microsoft (MSFT -2.6%), and Netflix (NFLX -4%) (for FAANG fans).
    • The Nasdaq is down 1.4% vs. the S&P 500 flat, and the Dow modestly in the green.
    • The U.S. total rig count rises by 11 to 927, following last week's increase of 8 and extending the count's consecutive streak of gains to 21 weeks, Baker Hughes reports in its latest survey.
    • U.S. oil rigs add 8 to 741, also a 21st straight weekly increase, natural gas rigs gain 3 to 185, and one rig is labeled miscellaneous; a year ago at this time, there were 328 active U.S. oil rigs and 85 gas rigs.
    • Five Norwegian oil and gas fields will shut down production unless a wage deal is agreed with the Lederne trade union, the country's top industry lobby group warns, with a deadline for talks at midnight tonight.
    • Voluntary negotiations broke down last month, and the two sides now face a mandatory process under a state-appointed mediator before any strike is allowed by Norwegian law.
    • The group says a shutdown would cut production by 443.5K boe/day, affecting fields operated by Statoil (NYSE:STO), Royal Dutch Shell (RDS.ARDS.B) and Eni (NYSE:E).
    • The retail sector is ahead of the broad market as investors jump back into some of the larger well-known store chain names.
    • Notable gainers include Target (TGT +2.9%), Nordstrom (JWN +3.3%), Abercrombie & Fitch (ANF +3.3%), Express (EXPR +3.5%), L Brands (LB +1.8%), Kohl's (KSS +5.5%), J.C. Penney (JCP +4.2%), Zumiez (ZUMZ +5.9%), GameStop (GME +2.4%), Sally Beauty Holdings (SBH+4.6%), Signet Jewelers (SIG +5.5%), Barnes & Noble (BKS +4.5%), Pier 1 Imports (PIR+4.7%), and Dollar General (DG +1.5%).
    • Hedgeye adds a short in Tesla (TSLA -2.8%) to its best ideas list, expecting the company's "exciting concepts [to] transition to mundane execution."
    • Tesla could find itself at a competitive disadvantage as its $7.5K tax credit begins to wind down next year, while late electronic vehicle entrants will still be fully eligible


  113. Phil/TF – thank you, was painful along the way, but very profitable in the end, patience, patience & more patience. :)


  114. Totally looks like a "stop run" today.  Totally on purpose and intended to do what has occurred.  New lows into the close tell me that it is more than that.  Otherwise, we have to wait until Monday.  Unless of course we close green today.


  115. Interesting action indeed, looks like some risk reduction ahead of the Fed next week. And then a relief rally?


  116. NASDAQ currently down 2.61% – VIX +18%

    Date                  OPEN        HIGH         LOW          CLOSE      VOL

    Jun 09, 2017      5875.50    5898.38     5661.88     ????          2,100,108,003        

    Mar 10, 2000     5,060.34    5,132.52    5,039.35    5,048.62    1,992,170,000

    Mar 13, 2000     4,879.03    5,027.73    4,839.26    4,907.24    1,736,270,000

    Total drop

    Jun 09 open to low 214 pts = 3.6%

    Mar 10 close to Mar 13 close 141 pts = 2.7%

    Mar 10 high to Mar 13 close 225 pts = 4.3%


  117. Sum body wake up? History repeating itself?  Or just another day at the office? TBD and Out.


  118. did amzn really trade at 927?


  119. what a bizarre day… 


  120. Trump is such an idiot – says he's willing to testify under oath that Comey lied about some details.  That opens him up to a whole Bengazi thing but he's such an over-confident ass he thinks no one can touch him.  

    AAPL just failed $148.50.

    /NQ failed 5,750.  That's not good into the close!  

    If I hadn't just made good money I'd go short into the weekend but I think I'll just enjoy the CASH!!!

    AMZN/Jabob – Yes, nasty spike down for a minute.  We sold the July $900 calls for $50 – seems right to me…

    Bizzare/Jabob – Nope, same as last month so far:


  121. Well guys, this was a super-fun week.  I was starting to think I was crazy to be skeptical so today was a nice gift.  One day doesn't mean much but it means more than no days, right?

    Have a great weekend,

    - Phil


  122. Trump / Phil – This guy is in a dire need of a strong legal team that will tell him to STFU!


  123. i thought it was bizarre because the dow and rut are up and the nas is down triple digits..


  124. I'm sure they do but he was showing off for the Romanian President.  That's how you get him, he thinks so much of himself you can trick him into incriminating himself if he thinks it makes him look clever or tough.  

    Well, it's going to be a very interesting couple of years ahead as we sort through this mess.  Trump also was cagey about whether or not he had tapes.

    Dow/Jabob – Easiest to manipulate.  GS and JPM made up for AAPL's drop, XOM and CVX also strong.


  125. Wealth gap in Hong Kong hits record high


  126. 'Tech wreck.' I love it! What a delightful surprise to check into this evening. :-)
    Hope for more, doubt it will continue. (THat would be too good to be true.) But we shall see..! 



  127. 193 nations urge action to protect oceans _ with US protest






  128. Trump tweets while people die




  129. Phil – "I was starting to think I was crazy to be skeptical."

    Your patience and conviction shall be rewarded.


  130. Corrected NASDAQ closing

    Date                  OPEN        HIGH         LOW          CLOSE      VOL

    Jun 09,  2017     6330.25    6341.70    6137.68    6207.92    2,688,657,982        

    Mar 10, 2000     5060.34    5132.52    5039.35    5048.62    1,992,170,000

    Mar 13, 2000     4879.03    5027.73    4839.26    4907.24    1,736,270,000

    Total drop

    Jun 09 open to close 123 = 1.9%
    Jun 09 high to low 204 = 3.2%

    Mar 10 high to low 93 = 1.8%
    Mar 10 open to Mar 13 close 153 = 3.0%
    Mar 10 high to Mar 13 low 293 = 5.7%

    As a single day, just an afternoon sell off.  Post week end follow through selling in Monday's action might indicate broader problems to come. 

    Short covering highlights


  131. Nat- on the close today, what's your gut telling you? Another BTFD event or ?


  132. Latch – "Nat- on the close today, what's your gut telling you? Another BTFD event or ?"

    If this market wants to move further up, consolidation and correction is necessary.  There is beaucoup handwriting on the wall that current valuations are not justified, nor will be in the future.

    For the OR?  It will require an event (June 14th FOMC announcement or July 5th minutes; huge RMB devaluation) or sudden investor epiphany, much like March 2000.  TBD and Out.


  133. Nat, Latch:  On board with valuation correction, but tech companies today different from circa 2000… Apple, FB, Google have plenty of profits and cash. Valuation correction is overdue but growth (or expectations thereof) is only in tech, other sectors are behind.  Will be interesting to see how Monday progresses.


  134. Phil you have said before that when "they" start selling the FANG stocks it's usually a sign that the smart money is finally exiting. Do you think this was the start of a broad sell off or just another consolidation before advancing even more? I know that it should be the former but they keep buying the dips to mess with us. Also I got out even on TF but wish I could have seen that it was going lower after bouncing. I still struggle with knowing when to exit a trade in futures. 


  135. Good interview with Andreessen and Hoffman (led by Kara Swisher).. some commentary on news, politics, and lots on current investments in future tech and changes 'coming now' 

    https://m.youtube.com/watch?v=iZhBVBBBNs0&feature=youtu.be


  136. ethereum is at 344


  137. Craigs – "Also I got out even on TF but wish I could have seen that it was going lower after bouncing. I still struggle with knowing when to exit a trade in futures. "

    Review how lines are set and stay between them. As there can be no ambiguity in what you are doing, prior to entering a contract, the objective or goal must be clearly defined, Observe and know your targets habits, where it is, has been and is going. Focus, you have one priority, stay steady, X marks the spot.

    Never chase in anticipation or get greedy, as that lack of discipline can only result in being sloppy, collateral damage, and having to clean up an accident.  Wait patiently for the target to move into your cross hairs, then squeeze the trigger, terminate with extreme prejudice, make a clean quiet exit and move on to the next contract.   It helps to know this and Out.


  138. Craigs – Here's an example of calculating bouncey lines for major indexes on a Monday, Aug 10, 2015.

    So much for shorting the Futures, things are going up and up so we'll have to calculate bounce lines first.

    We'll use the July high and calculate that to Friday's close so we have:

    Dow 18,100 to 17,400 is 700 points is 3.8% and bounces are 150 points (round) to 17,550 (weak) and 17,800 (strong)

    S&P 2,130 to 2,080 is 50 points (2.3%) and bounces are 10 points to 2,090 (weak) and 2,100 (strong).

    Nasdaq 5,250 to 5,050 is 200 points (3.8%) and bounces are 50 points to 5,100 (weak) and 5,150 (strong)

    NYSE 11,050 to 10,750 is 300 points (2.7%) and bounces are 60 points to 10,810 (weak) and 10,870 (strong) 

    Russell 1,272.50 to 1,207.50 is 65 points (5.1%) and bounces are 13 points to 1,220 (weak) and 1,235 (strong)


  139. Craigs – This daily forum April 12, 2017 leads with the 5% rule.

    Here are some posts tagged with the 5% rule.

    Here is a 5% rule workshop on /CL from the forum above.  Click link to see the post and CHARTS.

    Good time for a 5% Rule Workshop:  So $53.75 is the top on oil (because it likes .25s) but first we should check what we expected up from the $50 line, which is $52.50 (5%) and $53.75 is 7.5% – WINNER!!!!  

    So, now we know what we're dealing with the fall is from $53.75 to $53.25 (if it's close, we use the .25s) which is 0.50 so bounces are 0.10 for $53.35 (weak) and $53.45 (strong) so, if we are over $53.50, we should get out.  

    On Brent, it made a 10% move $55 with a 20% (of the move) overshoot to $56 and has stopped there.  If $56 is failing (not yet) then we'd look to see $55 tested – especially as it wasn't properly tested on the way up.  Since WTIC moves in lock-step with Brent generally, we still have a pretty good chance of a $1 drop.

    SO, the call would be look for a drop to $52.50 but stop out if over $53.50 (but re-enter under the line).  


  140. Phil – I was going to link to Fib retracement but left it at 5% and Out.


  141. BDC – Ethereum – a man in a silly red sheet. Digging for kryptonite on this one way street…

    $1000 invested on Dec 31st @ $8 is now @ $340 = $42,500  

    $1K on Oct 17, 2015 @ 0.57c is now @ $340 = $596,491

    Bitcoin - $1000 invested on Dec 31st @ $960 is now @ $2915 = $3036  

    $1K on Jul 29, 2010 @ 0.06c is now @ $2915 = $48,583,333

    I imagine what Laszlo Hanyecz who bought two pizzas for 10K bitcoin on May 22, 2010, is thinking these days.  Man that pizza was worth $29,150,000

    Superman into the Krypto (his dog) and Ethereum and Out.


  142. Sell-off/Craigs – One day is nothing to base an assumption on.  We'll have to see what happens on Monday.  If there is follow-through to the downside and it continues on Tuesday (since Mondays are pretty meaningless) THEN we can say we're probably in a 10%+ correction.  As to getting out of /TF, you have to scale out as well as in or, if playing just a couple of contracts with tight stops – just be happy with the wins and don't regret money you didn't make.  Ty Cobb didn't wish he hit a home run while he was batting .420 – he took all the good pitches he could swing at – the doubles, triples and home runs come as a bonus – they can't be your goal.

    Fibs/Naybob – Wrote that one up too:  "Fibonacci Rules – Sometimes, the Old Ways Are the Best!"

    Image result for fibonacci cartoon


  143. Here's a try to spin up oil. 

    Russia, Saudis See Oil Inventories Falling After Price Drop
    https://bloom.bg/2sqrB3H


  144. Crypto/Nattering – and imagine, the people investing NOW at these prices are thinking their going to make money. It kind of makes me wonder if we've passed our TSLA moment with these things. Look out below!


  145. Wow, the traditional parties in France got buried in the legislative elections. It looks like Macron will have a super majority in the Assembly. Still a second round next week but predictions are very good now. So much for the populist movements there… I also think that him trolling Trump makes him look good in France where Trump is viewed as buffoon!


  146. But the French should love that we have President Jerry Lewis?


  147. Venezuelans flee to the US in search of better lives




  148. Doctors Fight GOP Senate’s Medicaid Clawback



  149. Role of Trump’s Personal Lawyer Blurs Public and Private Lines


  150. Donald Trump’s state visit to Britain put on hold





  151. TSLA doesn't have "sales"


  152. futures seem pretty quiet..other than bitcoin!!!


  153. Futures do seem calm so far, Asia shaking off our drop.


  154. Good morning! 

    Europe opening down about half a point and now our Futures are turned down, notably Nas down 1.1% at 5,689 but they're down because we were down and we're down because they are down so hard to say if it's legit.  Asia turned all red into the close though:

    Still, we can short /TF below 1,415 (still over after all that) with tight stops above for extra hedging (if you need it).  On the long side, if /NQ gets back over 5,700, I like it long for a bounce off the 200-point drop so 5,740 would be the weak bounce goal.  

    Oil right at $46, Brent $48.40, /RB $1.5075, /NGV7$3.06, /KCU7 $129.80.

    Russia, Saudis See Oil Inventories Falling After Price DropA deal among oil-producing countries to curb production and balance an oversupplied market will achieve its objective in the first quarter of next year, Russian Energy Minister Alexander Novak said, after prices tumbled on news of a build-up in U.S. inventories. His Saudi counterpart, Khalid Al-Falih, said at a joint news briefing in Astana, Kazakhstan, that inventories were declining worldwide and reductions would accelerate in the next three to four months. Inventories will settle to their five-year historical average — OPEC’s target — before the end of the year, though Saudi Arabia, the group’s biggest producer, may modify its policy if output cuts don’t have the desired effect, he said.

    Well, at least the Republicans got their asses kicked in France, Macron's party won by 32% of the vote there.  He's got like 400+ out of 577 seats, that's the 2/3 majority we'll need to fix all the redistricting!  

    Fed’s Effort to Guide Markets Falls ShortMoves to rein in financial conditions appear to be having little impact.

    FX Week Ahead Preview: Focus Returns To The US Economy As Politics Run Riot Once Again

    The Inconvenient Truth… Of Consumer Debt

    China Holds Firm to Its $5 Trillion Anchor as Fed, ECB Seek ExitInvestors who fret about when and how global central banks will run down their crisis-era balance sheets can be relaxed about the biggest of them all — China’s. Whereas the Federal Reserve’s $4.5 trillion asset pile is set to be shrunk and the European Central Bank’s should stop growing by the end of this year as the outlook brightens, China’s $5 trillion hoard is here to stay for the time being — and could even still expand, according to the majority of respondents in a Bloomberg survey of People’s Bank of China watchers.

    China's "Bubble Prophet" Sees Unprecedented Surge In Home Prices

    Economists See a Strong Chance of Second Term for BOJ's KurodaHaruhiko Kuroda is considered a contender to get a second term as Bank of Japan governor by a majority of economists who offered an opinion on the matter ahead of a policy meeting this week. A third of them listed him as the only possible contender to lead the central bank after his current term ends in April 2018, according to a survey by Bloomberg.

    Pound Faces Fresh Headwinds as U.K. Political Limbo Is ProlongedThe pound looked set to be buffeted by fresh headwinds on Monday after U.K. Prime Minister Theresa May’s efforts of clinging to power through a loose political alliance suffered a setback.

    When Currencies Fall, Export Growth Is Supposed to Follow—Until NowThe U.K. economy is providing a live test of whether globalization has blunted the textbook effect of currency depreciation.

    Is Another Spanish Bank About To Bite The Dust

    Puerto Rico votes for statehood

    • "The USA will have to obey the will of our people!" Puerto Rico Gov. Ricardo Rossello declared, after the island voted to become the 51st U.S. state in a non-binding referendum.
    • While 97% chose statehood, political foes will say the vote isn't credible as turnout was only about 23%.
    • It's also highly unlikely the Republican-controlled Congress will acknowledge the results, because Puerto Rico tends to favor Democrats.
    • Previously: Puerto Rico: The 51st state? (Jun. 09 2017)

     

    • The agency downgrades to AA from AA+ the ratings on about $22B of general obligation bonds of the Commonwealth of Massachusetts. The outlook is Stable, suggesting additional downgrades aren't likely for the foreseeable future.
    • Noted by S&P is the state's inability to rebuild its reserves as promised.
    • One week ago, S&P downgraded Illinois to one notch above junk.

    • G7 countries vowed on Sunday to press ahead with climate change efforts despite a rift caused by the American withdrawal from the Paris accord.
    • "Italy and the overwhelming majority of countries regard Paris as irreversible and non-negotiable," Environment Minister Gian Luca Galletti declared.
    • EPA Administrator Scott Pruitt attended the first few hours of the two-day summit before returning to Washington for a cabinet meeting.
    • Key events are scheduled next week for the below list of companies. In some cases, share prices could see an extra dash of volatility.
    • IPO lockup expirations: Wildhorse Resource Development (NYSE:WRD) on June 12, Tigneix (NASDAQ:TIG) on June 13, Trivago (NASDAQ:TRVG) on June 14.
    • IPO quiet period expirations: Antero Midstream GP (Pending:AMGP) June 13, Biohaven Pharmaceutical (NYSE:BHVN) on June 13, Urogen Pharma (Pending:URGN) on June 13, KKR Real Estate Finance Trust (Pending:KREF) on June 14, Ovid Therapeutics (Pending:OVID) on June 14.
    • Secondary offering lockup expirations: Bright Horizons (NYSE:BFAM) on June 12, TransUnion (NYSE:TRU) on June 12, Tesla (NASDAQ:TSLA) on June 15, Performance Food Group (NYSE:PFGC) on June 15.
    • Notable general meetings: Shake Shack (NYSE:SHAK) on June 12, Best Buy (NYSE:BBY) on June 13, Cray (NASDAQ:CRAY) on June 13, Yelp (NYSE:YELP) on June 15, Time Warner (NYSE:TWX) on June 15,
    • Special shareholder meetings: BNC Bancorp (NASDAQ:BNCN) on June 12, Pinnacle Financial Partners (NASDAQ:PNFP) on June 12, Astoria Financial (NYSE:AF) on June 13.
    • Analyst/Investor days: Pure Storage (NYSE:PSTG) on June 13, Mattel (NASDAQ:MAT) on June 14, B2Gold (NYSE:BTO) on June 15, Michaels (NASDAQ:MIK) on June 15, Hormel (NYSE:HRL) on June 15, Corning (NYSE:GLW) on June 16.
    • Business update calls: Nordic American Tankers (NYSE:NAT) on June 13, Legg Mason (NYSE:LM) on June 15.
    • Roadshow: Principal Financial Group (NYSE:PFG) on June 15.
    • Piper Jaffray Consumer Conference: Wayfair (NYSE:W), Habit Restaurants (NASDAQ:HABT), Boot Barn (NASDAQ:BOOT) and others present on June 13; Cheesecake Factory (NASDAQ:CAKE), J.C. Penney (NYSE:JCP), Edgewell Personal Care (NYSE:EPC), Shake Shack (SHAK) and others present on June 14.
    • Barron's Bets: Mentioned positively in the publication are Comerica (NYSE:CMA), SVB Financial Group (NASDAQ:SIVB) and Zions Bancorporation (NASDAQ:ZION). 20% upside is seen on Lam Research (NASDAQ:LRCX).
    • Sources: EDGAR and Bloomberg
    • For the first time in history, bitcoin has crossed the $3,000 threshold, continuing this year's massive surge on increased demand from Asia-based investors.
    • According to CoinDesk, prices reached an all-time high of $3,012.05.
    • The cryptocurrency has now more than tripled in value since trading at $968 on Dec. 31, and has gained nearly 30% in June alone.

    European Union imposes import duties to counter Chinese subsidies on steel

    • The European Union has set duties of as much as 35.9% on imports of hot-rolled flat steel from China to counter what it says are unfair subsidies.
    • The European Commission, on behalf of the 28 EU members, found that Chinese companies had benefited from preferential lending from state-owned banks, grants, tax deductions and the right to use industrial land.
    • The EU already had set in place anti-dumping duties to counter excessively low prices, which it has now adjusted to a range of between zero and 31.3%.
    • ETF: SLX

     

    • The Trump administration intends to unveil a plan this week to trim regulations it believes constrain U.S. manufacturing growth, potentially affecting environmental permits, worker safety and labor rules.
    • It follows the opening of the first new coal mine of the Trump era. Corsa Coal (OTC:CRSXF) launched the facility in Pennsylvania on Thursday, marking the first new coal mine in the U.S. in at least 10 years.
    • The shipping industry – after struggling for years with overcapacity, price wars and freight rates far below breakeven levels - finally is showing signs of recovery, according to a WSJ analysis.
    • In container shipping, big players have merged or formed alliances and most should swing to a profit this year after posting huge losses in 2016, the cost to transport a container in the benchmark Asia-to-Europe route rose 55% Y/Y in May, and Q1 container volume at Singapore rose 5% from a year ago.
    • In drybulk shipping, demand this year is forecast to grow 3% sparked in part by surging Chinese iron ore imports, and capesize daily rates YTD have averaged ~$11K, 3x the rate in early 2016.
    • Even in the oil tanker business, which got off to a rough start this year, prospective owners appear to foresee a recovery and have started a buying frenzy, with 69 new and used VLCCs bought YTD vs. only eight last year.
    • Investors are noticing, as several stocks scored big gains over the past week: SB +26.1%SALT +18.9%NM +17.6%SHIP +14.5%EGLE +12.8%SBLK +12.6%NMM +7.6%DSX+6.7%.
    • Other potentially relevant tickers include DRYSGLBSSFLKEXSINOGSLGNKDAC
    Image result for gene editing cartoon
    • Editas Medicine (EDIT -3.3%) and Intellia Therapeutics (NTLA -0.1%) have sent letters to the editors of the journal Nature Methods sharply criticizing a paper it published recently that suggested highly touted gene-editing technology CRISPR/Cas9 may be too dangerous for use in humans. Both companies have called for a retraction of the paper which they say draws conclusions "unsubstantiated by the disclosed experiments."
    • The study, led by Stanford's Vinit Majhajan, appeared to show that the gene-editing technology wreaked havoc in the genomes of mice, specifically, an unexpectedly high number of off-target mutations.
    • The stocks of the two companies, as well as compatriot CRISPR Therapeutics (CRSP -2.3%), sold off on the news.
    • CRISPR-Cas9 is the "next big thing" in biotech because of its unprecedented precision in editing DNA. CRISPR, the acronym for "clustered, regularly interspaced short palindromic repeats," uses RNA to guide the molecular scissors, the Cas9 enzyme, to a specific DNA sequence where it makes a specific cut in the DNA and triggers the cell's DNA repair machinery to address the genetic defect.

    Uber Imploding: Chief Business Officer Resigns As Kalanick Plans "Leave Of Absence"

    'The Mummy' buried by 'Wonder Woman'

    • The Mummy is no match for Wonder Woman.
    • During its first weekend in theaters, Universal's (NASDAQ:CMCSA) monster movie debuted at No. 2, earning a tepid $32M in North American grosses, while Warner Bros.' (NYSE:TWX) film retained the top spot, collecting an impressive $57.2M.
    • Woman has now accrued about $205M domestically and another $230.2M from foreign markets.
    • Competition is still grinding at the big four U.S. wireless companies, Cowen & Co. says, particularly in the new unlimited-plan era.
    • It's ugly enough that the companies are looking ahead to 5G as a differentiator, says analyst Colby Synesael, but T-Mobile (TMUS -2.8%) is still the firm's pick for now.
    • "The first quarter of Unlimited for all four carriers left much to be desired," he writes, noting both AT&T (T +0.8%) and Verizon (VZ +1.2%) saw postpaid losses for the first time on record. Even T-Mobile's turned in some "less great" results. "Combined with continued pricing pressure, AT&T and Verizon are pivoting to new avenues of growth such as Mexico, content, media, IoT, and 5G, all of which can’t come soon enough."
    • T-Mobile's still his favorite on improving fundamentals and as a "compelling takeout candidate," though the persistent chatter around will-they-or-won't-they partners TMUS and Sprint (S -5.6%) has added volatility for both, and thus risk.