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Money Market Movement – Up, of Course

Up and up the markets go, when the madness stops, no one knows

There's simply no reality to these market moves any more.  We just finished our May Portfolio Review and our net gain was only 2.7% while the S&P gained 3.1% because we're a bit too bearish for this rally and our hedges are killing us and today we're up yet again in the Futures, back to 2,440 on /ES, where we had success shorting them last week.  

The Nasdaq (/NQ) is up 50 points from Friday's close at 5,733 and there's no reason for this excitement – it's just a normal pumped-up Monday and, so far, not even a weak bounce from the Nasdaq's fall from 5,900 to 5,700 (ignoring the spike below).  These moves are not just mechanical and fake but obviously so but I'll bet you already forgot that we had this conversation last Monday, when I said:

It's really all about the Nasdaq (/NQ) which, so far, has fallen from 5,900 to below 5,700 but we'll be looking for a weak bounce over the 5,700 line (40 points) to 5,740 so going long on /NQ is a no-brainer this morning with tight stops below the line.  If we make a strong bounce (5,780) today, then all of Friday's sell-off can be quickly forgotten but failing the weak bounce would be a bearish sign and we'd be looking for other indexes to short as well.

Mondays are, of course, meaningless days in the market, especially in the summer and we'll have to wait until tomorrow to see what's really going on but a huge correction like we had on Friday COULD lead people to contemplate that some of the overbought crap they have in their portfolios may not actually be worth 100 times earnings. 

That was June 12th and here's what the Nasdaq has done since:

You can see why we remain skeptical, right?  The Nasdaq did exactly what our 5% Rule™ predicted, exactly when it predicted and we made nice money going long on the Nasdaq last week and then we made good money going short and the reason we can make these predictions is because the movement is so obviously manipulated – we can spot it a mile away and stay ahead of it.  We'll still be looking for a strong bounce this week but a 2nd failure means we're likely consolidating for move down, not up and a 5% correction from 6,000 (even though we didn't get there) is 5,600 and it's very possible we'll see that before we see 6,000 (if at all).  

Similarly, we went into the weekend long on Oil Futures (/CLQ7) at $44.75 and Gasoline (/RBQ7) at $1.42 which we went over in last Wednesday's Live Trading Webinar and you can see both of those have made a bit of progress and we expect to see more into the July 4th weekend but we'll be quick to take profits off the table as the longer-term macros for oil and gasoline are not favorable.  

However, speaking of market manipulation, our friends at the NYMEX have done a fantastic job of rolling out all those fake, Fake, FAKE!!! July contracts, with just 75,660 left and 3 days to dump them and they've moved them into fake, Fake, FAKE!!! August contracts (510,730) as well as Sept (2,943), Oct (103,719) and Nov (108,475) which adds up to the EXACT SAME 1.1Bn FAKE!!! contracts they've been carrying in the front months all year long.  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Jul'17 44.68 45.06 44.45 44.82 08:25
Jun 19

 


-
0.08 24516 44.74 75660 Call Put
Aug'17 44.89 45.28 44.68 45.04 08:25
Jun 19

 


-
0.07 161553 44.97 510730 Call Put
Sep'17 45.11 45.51 44.92 45.26 08:25
Jun 19

 


-
0.06 8792 45.20 288493 Call Put
Oct'17 45.35 45.72 45.15 45.52 08:25
Jun 19

 


-
0.11 1701 45.41 103719 Call Put
Nov'17 45.60 45.97 45.40 45.74 08:25
Jun 19

 


-
0.07 2208 45.67 108475 Call Put
Dec'17 45.85 46.24 45.65 46.00 08:25
Jun 19

 


-
0.06 5885 45.94 308326 Call Put
Jan'18 46.13 46.42 45.89 46.30 08:25
Jun 19

 


-
0.13 1078 46.17 86730 Call Put
Feb'18 46.14 46.64 46.14 46.64 08:25
Jun 19

 


-
0.26 707 46.38 38206 Call Put

Of the 75M barrels worth of fake orders for July, less than 15M barrels will actually be delivered despite over 3 BILLION barrels worth of contracts (3M) being traded during the month of July alone.  All that trading to deliver 15M actual barrels is either the most ridiculously inefficient system ever devised by mankind or a gigantic con job used to manipulate the price of oil by creating a false sense of market demand for the 2nd most abundant liquid on the planet.  We report – you decide…

Of course, we're not here to pass judgment – we don't care IF a market is being manipulated as long as we understand HOW the market is being manipulated and we're able to play along at home, right?  Many of the "traders" at the NYMEX work for the companies that sell you oil and it doesn't matter if they lose money trading (and you lose a lot of money churning 3Bn fake orders each month) as long as they can jack up the price you pay at the pump because every extra dime you pay for gasoline is multiplied by 400M gallons consumed each day.  $40M per dime, per day is the value of manipulating oil – a scam that costs US consumers $50-$100Bn each year – thank you NYMEX!  See: Goldman’s Global Oil Scam Passes the 50 Madoff Mark

That's right, I have been pointing out this scam for a decade yet nothing ever changes.  Meanwhile, we continue to make money playing along at home and I continue to call on our Congresspeople to take action and put a stop to it because, although it's a very profitable scam - it's destroying this country!  

A view of old houses surrounded by new apartment buildings in Guangfuli neighbourhood in Shanghai, China, April 8, 2016. REUTERS/Aly SongSpeaking of countries that are being destroyed, I'll be going on China's CGTN this evening to talk about their runaway housing market.  Despite Government efforts to reign in the madness, new home prices across the country were still rising at a 10.4% annualized clip in May, according to the National Bureau of Statistics.   

Chinese Policymakers have prioritized stabilizing an overheated market ahead of a Communist Party reshuffle later this year, reiterating the need to avoid dramatic price volatility that could threaten the financial system and harm social stability but it may already be too late as Australia, which has had a similar housing boom, is already beginning to come apart at the seams with stagnating rents and collapsing construction (down 30% since last June).  

Prices in China's Shenzhen actually fell 0.6% last month and Beijing and Shanghai were flat while other bubbles are still being blown like Guangdong province's Qingyaun City, where prices for new condos are being officially collared at no more than 5% higher and no more than 15% lower than "similar markets in the past month."  While you can drive a truck through those restrictions – it's indicative of how dangerous the Government perceives the market to be getting.  

Despite all the controls, Chinese banks lent out another $100Bn in May to new home buyers, indicating neither the consumers nor the banks are really getting the message that the Government is trying to cool off the housing market or, perhaps, the message is loud and clear and people are rushing to get in while they still can though, unfortunately – like US home-buyers in 2006 – many of these new home-buyers have gone their whole lives without seeing a real estate market go down – the really don't understand the risks they are taking as the leverage up their life savings into homes that no one can really afford.

Watch the rents – rents are dynamic, when they start dropping, the party may soon be over!

Back on June 1st, in our Morning Report, we listed some of our concerns about China and a hedge to play it with, which was itself a roll from our orignal short using China's short ETF (FXP) from April 3rd.  As we expected, our adjustment is paying off and FXP is now at $25.52 with our goal at $26 by September.  We weren't wrong initially – just early!  The net of the trade is now $3,890 out of a potential $8,000 if we get it right so still good for a new trade if you can settle for a double.

Be careful out there.  

 


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  1. Posted this chart on the Friday post not realizing that Phil had started another post! The USA not really the land of equality:


  2. And some charts that predict the end of coal no matter what Trump does:

    https://www.bloomberg.com/news/articles/2017-06-15/solar-power-will-kill-coal-sooner-than-you-think


  3. Good Morning


  4. Good Morning.


  5. Nat gas hitting a seven month low this morning. 


  6. Is Ameritrade charging a fee to trade /NG like it did for /KC and /DX?


  7. Um….BLCM….good morning!


  8. Pharm – Thanks on BLCM.  It's in my daughters Robinhood acct.  Not big $$, but still nice to see.

    Phil – Do you like /DX below 97 for a long?  The sept /DX, now 96.995.

    /RB with a big whipsaw today too.


  9. Phil// Recommendations for the below SVU trade

    SVU +25 $2.00 calls 2019

    SVU -25 $3.50 calls 2019.  The bcs cost was .90 per spread.

    SVU -25 $.35 puts 2019 sold at .70 cents

    Thanks


  10. Phil// What should we do with our July USO $9.00 calls.  Should we close since it hasn't had any traction so far?  Thanks.


  11. Phil –  What do you think of Aug /NG here @ 2.928?  It's tracking the July contract, which expires in 9 days, tick for tick.  


  12. Pharm –  Did you have CLVS?  Up $45 today.


  13. another typical monday for ftr, gnc, m, jo, tgt, lb… dangit!


  14. Good morning!  

    I hope everyone had a nice weekend.  

    I took the girls to see a show on Sat and they chose to see 1984 – I could not have been prouder!  I even said to them "Are you sure, it's probably depressing" but they wanted to see it.  It wasn't a traditional telling (kind of like Anne Frank's Diary for Winston Smith) - decent but not great but the girls thought it was interesting and we had a great discussion at dinner afterwards – that was a better father's day for me than the one we had planned for Sunday!  cheeky

    I didn't get to it in the above post but there's lots of Fed speak and not much data this week:

    Dollar strengthens on Fed Dudley's interest rates view | Reuters

    Fed's Dudley says he's not paying attention to bond market's signals of …

    Tight U.S. labor market should push inflation higher: Fed's Dudley …

    That's keeping oil under $45 so far, /RBQ7 popped up to $1.46 already.  /NGV7 back in play at $2.94 ($2.90 on /NG) but not for the feint of heart (I have 2 long).  

    Big Chart – RUT looks weak, or did until this morning and we'll see how the Nas does but the Dow is flying – which seems silly if oil can't get it together (XOM, CVX) though AAPL seems bounce at $145 and $10 on AAPL is 85 Dow points by itself – more than enough to pop 21,500 and 2,450 on /ES.  

    Inequality/StJ – That is sick and even worse than it looks:  

    We’re in a Boiling-Point Crisis of Exploitive Elites

    The richest 10% hold 76% of wealth – Aug. 18, 2016 – CNN Money

    39 million households are paying more for housing than they can afford

    A record-smashing heat wave will scorch the southwestern U.S.

    Coal/StJ – John Oliver did a bit on that this weekend.  

    Wow, Nas up 85 now – all indexes spiking up.  

    BLCM/Pharm – Good one!  

    BLCM…absolutely into them.  Selling Nov 15 C and 7.5 Ps. I have the stock for net 12.75. Been selling calls and puts against it.

    Who says stock picking is hard?

    Dollar/Burr – I still have 4 long /DXU7 at 97, looking for 98.50 one day 

    Had to take the money and run on /RB (up $1,200) as I'm still baby-sitting my 10 long /CLN7s with a $2,000 loss at the moment.

    SVU/Rookie – They are at $3 so the spread is on track, why mess around with it?

    You're in for net $2.20 so all above is profits as long as you clear, I assume, $3.50 for the short puts, which is where you are being hurt but they are only 0.95, so also no big deal and net 0.35 if the premium melts at $3.15.  The spread is still 0.70 so not worth doubling down and certainly not worth paying the short calls 0.70 to increase your break-even to $2.90 when you have no idea if SVU will even hold $3.  Sometimes, the only winning move is not to play.  

    USO/Rookie – Well I'm long 10 Futures so I think I'm going to hold the USO longs at least until Wednesday's report.  The point was to play for the July 4th run-up and this is the end of July contract rollover – exactly the opposite of what we're playing for.   As noted above though, we have 3 days to get rid of 76,000 contracts – they should be able to do that pretty easily which means there's no much selling pressure which, hopefully, they will take advantage of to squeeze the shorts.  

    /NG/Burr – I'm playing /NGV7 as it takes us into hurricane season, which should be a good one this year.

    Monday/Jabob – They just run the same programs every Monday.


  15. To reiterate: I will have another serving of AAPL pie alamode, with two servings of ice cream.  But wait my table is already fully laden with AAPL, however I can't refuse another serving at this price.  


  16. Seems like a well orchestrated market on the move.  Don't think it will hold up this week but won't put money on it.  Rather just wait and see for now.


  17. VRX – Up 6% on news that John Paulson joined the board.  Out with Ackman, in with Paulson.

    Paulson made gobs of money betting against the housing market in 2007, but hasn't had much success since.


  18. At least Paulson waited until they were down in the gutter so a lot less risk there….


  19. tsla might finally be done. chart looks toppy-ish


  20. STJ – Unfortunately he's been long since the upper 20's.  At last report he holds about 19 million shares from somewhere in the 20's.  It'll be interesting to see if he adds to that already 5% position.


  21. are you joking bio?


  22. no, I hate tsla and musk.


  23. me2


  24. cost getting spanked again today…

    amzn effect


  25. tsla/bio

    I agree, I'm only in short calls right now till secondary is announced.


  26. Well, I'm short S&P at 1450, almost no premium on SPXS calls this morning. Small stake but I have faith, willing to add if they get cheaper. Pump that market!


  27. STJ – OOPS on Paulson and VRX.  I looked again. He has been in it for quite some time, with part of his holdings much more expensive than I said.  He's in deep do do.


  28. IWM puts too, breaking now, I'm luvin' it


  29. MAT – down at 20.30 is offering 7.5% dividend


  30. Phil/1984  How nice was that?… A very cool Fathers Day indeed!

    I love talking to my kids.


  31. BioD – Any new thoughts on Crypto coins?  Litecoin is blowing up (ty!).  Where do we put some $$ now?  Continue buying ETH and Lite and Ripple?  Anything new?


  32. Both of mine texted me, only one wanted money…


  33. After all that we're still failing at 5,780.   I'm willing to short /NQ up here (5,770) with the better risk than reward (tight stops over 5,780 though).  

    AAPL/Newt – I'm not too excited over $145 but we're only one blowout report away from $200 and we'll never see $150 again.  I don't think it will be until the 8 is released though. 

    Wait and see/Rustle – Good plan! 

    That NY Factory Deal article is crazy, Jabob!  

    MAT/Scott – They gave away too many good lines for me to still like them.

    Kids/1020 – Yep, they are at the age where they are starting to get very interesting to talk to as well.


  34. Albo – Can't feel sorry for all these hedge fund guys! 


  35. Phil – Here's a show the Family would like…http://www.hanszimmerlive.com/

    Radio City – July 25th & 26th  :)


  36. Zimmer/1020 – The kids draw the line at classical music and opera though we did just go see Bugs Bunny at the Symphony and they enjoyed that.  


  37. I just saw the Hans Zimmer show in Prague a couple weeks ago, while on vacation.  It was amazing.  I would highly recommend.


  38. MAT/Phil – too many lines? Still have Barbie, FisherPrice, Hotwheels, Matchbox, several Disney, and even some comics.. and there is always room for new franchises. Not buying the stock (yet) here, but looking at some puts to start with. I figure Millennials are going to be getting into the having kids phase, and these are many of the key toy brands they knew and will want their kids to share in, too..  Like to see it hold 20.21 on weekly charts to buy stock (61.8% fib retrace of run from 2009 low), but as it is trending down currently, looks like can easily offer 'better entries' in the weeks to come.


    • Stocks are firmly higher in early action, with both the S&P and Dow hitting new records and the S&P technology index opening more than 1% higher; Dow +0.5%, S&P +0.6%, Nasdaq +1.1%.
    • European bourses sport solid gains, with Germany's DAX and France's CAC both +1% and U.K.'s FTSE +0.7%; in Asia, Japan's Nikkei closed +0.6% and China's Shanghai Composite finished +0.7%.
    • Large-cap tech stocks including Facebook, Amazon, Apple, Netflix and Alphabet all rose ~1% in early trading, as the group rebounds from last week's weakness.
    • Boeing +1.2% in the early going after announcing a series of new plane orders at the Paris Air Show.
    • Safe-haven assets are under pressure, with gold -0.5% at $1,250.50/oz., the Japanese yen losing 0.3% vs. the U.S. dollar, and the benchmark 10-year Treasury yield rising 3 bps to 2.16%.
    • Crude oil has slipped from its overnight high but still +0.4% at $44.91/bbl after losing 2.4% last week.
    • The U.S. expansion has a long way to go, says the FRBNY's Bill Dudley, and a gradual pace of tightening now assures no need to "slam on the brakes" further down the road.
    • As for any concern about the sharp flattening in the yield curve, Dudley pronounces himself unconcerned.
    • Treasurys at the long end showed a bit of movement around his comments, but are about unchanged, with the 10-year yield at 2.167%. Thirty-day Fed Funds futures continue to price in less than a 50% chance of a rate hike at the September FOMC meeting.

    • The S&P 500 Information Technology index is up 1.47% this morning as the sector improves from the recent pullback, which had clipped over 4% from the index.
    • Improving tech shares leading the charge include Apple (NASDAQ:AAPLup 2.41%, Facebook (NASDAQ:FBup 1.53%, and Alphabet (NASDAQ:GOOGLup 1.83%.
    • Tech leaders from 20 companies meet with President Trump today as the government seeks to cut $1T of debt in the next decade through IT cuts and cost improvements. 
    • According to a U.S. Government Accountability Office report last year, the government spent over $80B in IT, not including classified operations. 
    • The meeting will also provide a forum for discussing Trump’s planned changes to the visa program that brings high-skilled workers into the country, and into tech companies, and for improving the government’s cyber security. 
    • Companies participating include (AAPL +1.6%), (GOOGL +1.8%), (AMZN +1.3%), (MSFT+1%), and (INTC +0.6%).   
    • That volatility is U.S. markets is near all-time lows isn't news, but there's little to be seen in Europe and Asia as well, writes Steven Russolillo in the WSJ.
    • Asia may be most interesting. Realized volatility – a measure of how much share prices move around – has dipped to 8.2%, about the lowest since at least 2000. At that level, it means the market has moved by about 0.5% per day on average over a given time frame.
    • Since Jan. 2016, the Asia index has dropped more than 3% just once. In previous bull markets, there were 3% daily declines on average every two-three months.

    Steel stocks upgraded at Longbow on likely government action

    • U.S. Steel (X +4.2%), AK Steel (AKS +4%), Nucor (NUE +3.2%) and Steel Dynamics (STLD+2.2%) are all upgraded to Buy from Neutral at Longbow, citing strong evidence of an improved steel distributor market.
    • After speaking with contacts in the sector, the firm sees hot rolled coil prices rising by $50-$60/ton, driven by a recent modest uptick in downstream steel orders, inventory adjustments and a large pullback in the number of steel import offers.
    • Longbow is more confident of a positive Section 232 outcome, and says some buyers expect HRC prices to rise to $700-$750/ton, up from the current $590-$600, following expected government action in the form of protection from imports.
    • Longbow's price targets for the stocks: NUE $66, STLD $40, X $30, AKS $10.
    • ETF: SLX

    Lumber Liqudators higher after Trump-Trudeau chat

    • Lumber Liquidators (NYSE:LL) is up 4.05% after President Trump talked to Canadian Prime Minister Justin Trudeau on topics that included softwood lumber.
    • Last April, the Trump administration applied a tariff of up to 24% on imported lumber from Canada.
    • DryShips (NASDAQ:DRYS) announces that it will fire off a 1-for-5 reverse stock split of shares.
    • The reverse stock split will take effect on the Nasdaq Capital Market as of the opening of trading on June 22.
    • DRYS -22.86% premarket to $1.35.
    • Source: Press Release
    • Whole Foods Market (NASDAQ:WFM) is up 1.68% to $43.49 as it reaches its highest trading premium to the $42 Amazon offer.
    • Earlier today, Neuberger Berman Manager Director Charles Kantor told Bloomberg that there is plenty of room for higher offers. Barclays also believes a new bid could easily come in.
    • Previously: Barclays slaps $48 PT on Whole Foods – bidding war possible (June 16)
    • Deutsche Bank lowers Costco (NASDAQ:COST) to a Hold rating after having the retailer set at Buy.
    • The firm calls the Amazon purchase of Whole Foods a "game changer" that threatens the Costco grocery moat and membership renewal levels.
    • The price target on Costco is cut by the DB team to $172 from $187.
    • COST -0.37% premarket to $166.50 after a 7.2% drop on Friday.
    • Blue Apron (Pending:APRN) plans to issue 30M shares in its IPO.
    • The meal kit company expects to price the IPO in a range of $15 to $17.
    • Blue Apron generated $795M of revenue in 2016 and showed a net loss of $55M.
    • Blue Apron on its market upside: "We believe an opportunity exists to increase online grocery penetration to the level of penetration that exists in many other retail markets. Conventional grocery stores currently face many of the same challenges online as they do offline. They have high inventory counts, compete in the sale of commodity products, and confront considerable waste. In addition, conventional grocery stores generally have relatively low gross margin structures and are highly capital-intensive given their large retail footprints, making it difficult for them to invest in technology and innovation."
    • SEC Form S-1

    • UPS (UPS -0.1%) says it will add surcharges for online orders shipped to residences around Black Friday and during the rush week right before Christmas. The surcharge will be $0.27 per package for ground shipments and $0.81 per package for next day air.
    • The company notes that it flexes its delivery network to process near double the regular daily volume during peak season.
    • The shift will put retailers in a box as they weigh passing the hikes on to consumers or taking a margin hit on a high percentage of their holiday season sales. A possible fix for stores could be to highlight their programs that offer store pickups for online deliveries.
    • Hasbro (HAS +1.2%) launches its first subscription service for games.
    • Hasbro Gaming Crate brings new games to the doors of subscribers every three months.
    • Under the program, the "Party Crate" contains games with content geared toward college students, young adults,and parents looking to enjoy “adults-only” game nights. The "Family Crate" offers games designed to be played by kids and adults together.
    • Each crate with three games is priced at $49.99 plus shipping.
    • Source: Press Release
    • Mattel (MAT -1.1%) and JAKKS Pacific (JAKK -1.3%) both trade lower after Hasbro announces its first-ever subscription service for games.
    • Hasbro's dalliance with selling directly to consumers could be making some investors edgy.
    • Previously: Hasbro launches gaming subscription service (June 19)

    Nervous trading on Target continues

    • Target (NYSE:TGT) is down another 2.38% as investors remain wary on the impact of Amazon buying Whole Foods.
    • The general consensus on Target is that the retailer's customer base aligns closer to those of Whole Foods and Amazon than the customer bases of Wal-Mart and some other large chains to place it in the line of fire of a pricing war.
    • If there's a positive for Target that's being overlooked it could be on the wage inflation front. Amazon is seen as a likely leader in replacing retail workers with robots, automation, kiosks and app ordering — which could make it easier for Target to follow suit in order to compete.

    CRISPR Therapeutics announces patent for CRISPR/Cas genome editing in China

    • CRISPR Therapeutics (NASDAQ:CRSPannounces that China’s State Intellectual Property Office has granted a patent broadly covering CRISPR’s in-licensed gene editing technology.
    • The claims are directed to CRISPR/Cas9 single-guide gene editing methods for modifying target DNA in both non-cellular and cellular settings, composition of matter and system claims for use in any setting, including claims in producing medicines for treating disease.
    • The European Patent Office and the U.K.’s Intellectual Property Office have previously issued patents from the underlying international patent application.
    Image result for rewalk animated gif
    • Thinly traded nano cap ReWalk Robotics (RWLK +36%) jumps on a healthy 22x surge in volume in response to its announcement that it has developed a prototype soft suit exoskeleton to assist stroke survivors.
    • The prototype, called Restore, was developed in collaboration with Harvard's Wyss Institute for Biologically Inspired Engineering. It works by transmitting power to key leg joints via technology similar to the ReWalk exoskeleton. The cabling is connected to fabric-based designs that attach to the legs and feet.
    • The company says soft suit will be a development priority in fiscal 2017.
    • An estimated 3M stroke survivors have lower limb disability in the U.S.

    Snap +2.7% on Time Warner show development deal

    • Time Warner (TWX +0.7%) has set a broad deal with Snap Inc. (NYSE:SNAP) to build up to 10 original shows a year, which might include development by premium network HBO.
    • Snap is up 2.7% now to reach its highest point since last Wednesday, before a late-week decline.
    • The agreement covers show investment as well as an ad commitment from HBO, Warner Bros. and the Turner networks.
    • It's one of the biggest deals Snap has inked to date. The shows will come in such genres including scripted drama and comedy.
    • As with its other recent development deals, Snap keeps 50% of ad revenue from the shows.
    • It's the latest in a stream of deals from social-media networks and apps to build original content. Facebook (FB +1.2%) is working a plan to build shows with Vox Media, BuzzFeed, and others; it's resurrecting a canceled MTV show as part of that effort.

    Class action complaint goes after CenturyLink for up to $12B

    • CenturyLink (NYSE:CTL) — beaten up Friday as an ex-employee sued, claiming high sales pressure led to false account approvals — now faces a class action complaint seeking up to $12B.
    • The new action looks to establish a class of consumers hurt by CenturyLink's sales culture and cites the prior suit as well as similar accusations on the Internet.
    • “The fact that a law firm is trying to leverage a wrongful termination suit into a putative class action lawsuit does not change our original position,” said CenturyLink's Mark Molzen, who notes Heidi Heiser (who filed the wrongful termination suit) didn't report her concerns to the company's Integrity Line. Heiser said she notified CenturyLink CEO Glen Post via an internal message board.
    • A named plaintiff on the class action complaint alleges he was charged higher fees than quoted, charged for a repair that was never made, and that he faces a monopoly situation with CenturyLink the only hardwired Internet provider available in his area.
    • Shares in CenturyLink and merger partner Level 3 Communications fell on Friday; today CTL is off 0.4%LVLT -0.5%.

    Morgan Stanley raises Microsoft price target

    • Morgan Stanley raises Microsoft (NASDAQ:MSFT) price target to $80 from $72 while reiterating an Overweight rating.
    • Analyst Keith Weiss writes that Microsoft’s "top line drivers include the Azure (Microsoft emerging as a public cloud winner), data center (share gains and positive pricing trends), and O365 [Office 365] (base growth and per user pricing lift).” 
    • Weiss says Microsoft has returned to double-digit EPS growth that’s durable and investors “should be willing to pay a higher multiple for that growth.” 
    • Estimates FY18 EPS at $3.45, compared to $3.32 consensus.  
    • Microsoft shares are up 0.77%.

    Apple and Ikea team for furniture AR app

    • Apple (NASDAQ:AAPL) and Ikea announce an augmented reality app that allows users to try out how furniture will look in the home before buying.
    • In an interview with Di Digital, Inter Ikea’s Leader of Digital Transformation Michael Valdsgaard says of Apple, ““It will become the biggest AR-platform in the world overnight. It’s super interesting to us.” 
    • AR is one of CEO Tim Cook’s passion projects, and Bloomberg reported in March that the company had built an AR dream team of engineers and developers that includes hires from the Oculus and HoloLens VR head

  39. Only one/Mkucs – Hey, that's pretty good!  

    MAT/Scott – As noted above, lots of pressure there so I'm waiting and seeing.   Used to be a stock I liked but losing Disney and Star Wars were moves that made me think management does not have it together over there.  

    Oil back to $44.50 – very annoying.


  40. MAT/Phil – yeah, some reorganizing certainly going on. Reading through some announcements, looks like they are going to "right-size" the dividend, so I think the 7.5% is pre-reduced value, and they are actually saying gibberish like "Building Mattel's Power Brands into connected 360-degree play systems and experiences…" and "Reignite Mattel's culture and team." Good grief. The consultants got to them.  Pity. Still have some great brands/lines, so I expect the company will survive despite the current 'unignited'(?) "team."


  41. Phil –  Just to confirm, your current futures postions are

    Long /DX off 97

    Long /KC

    Long /CL?

    Long /NG?

    Short /NQ

    Did I miss anything?  I'm not trying to imitate, just getting my head around them in relation to other systems I use.


  42. Phil,

    What are your thoughts on Amazon ? To me it appears there is more cash burn and investments for them to change Whole Foods if the deal completes but the general concept is the acquirer's stock goes lower and in this case its reverse. May be they will change the grocery business one day but the valuations seem far fetched.

    Thanks

    Pat


  43. RUT outpacing the dollar going up


  44. for that matter, all the indexes are outpacing the dollar.


  45. did somebody say something? Nasdaq on the move.. 

     


  46. LM – on weekly chart just breaking over 200wma (and 150wma) AND 50% fib recovery from Feb 2015 to Feb 20116 drop


  47. MAT/Scott – I think they'll survive but they are struggling to make $1 per $20 share so it's not like $20 is some thrilling valuation – just cheaper than it was.

    Futures/Burr – At the moment I am long:

    • /CLN7 – 10 @ $45.10 
    • /DXU7 – 4 @ $96.68
    • /KCU7 – 4 @ $127.10
    • /NGV7 – 2 @ $2.947
    • /SI – 2 @ $16.50

    Thr group is down $3K after cashing the /RBs and most of that is the /CL, which I should have taken 5 off this morning but I missed it and then I decided I did want to be in through Weds so no point in taking a loss to lighten up.  

    AMZN/Pat – WFM is $14Bn and AMZN is $476Bn, you can't go by "the general concept" when AMZN had that money just laying around doing nothing.  In fact, WFM is only trading at 35x profit while AMZN is trading at 300x profit so, if you apply the WFM profits ($500M) to AMZN ($2.5Bn) and keep even most of AMZN's multiple, you could be adding $100Bn to AMZN's market cap off a $14Bn purchase.  There's almost nothing AMZN could buy, other than TSLA, that would not improve their net p/e ratio.

    Outpacing/Scott – Usually (in the pre-crazy days) the rising Dollar would be a drag on the indexes.  So would falling oil prices though…

    Nasdaq/Learner – I said short at 5,770, that probably did it!  

    LM/Scott – good value there.

    Oil contracts expire tomorrow, not Wednesday – that's why so weak today.  They were in worse shape than I thought this morning as 76,000 is actually a lot with 2 days left. 


  48. FU FTR!!!!!


  49. CAG,ADM/Phil – looks like been under some pressure.. i'm actually surprised they are not pushing highs.


  50. Phil, are you gonna roll your /CL's along if they don't perk up by Wednesday? I rolled my 2, to August contracts so just curious how you will manage yours. 


  51. Phil I thought it was Wednesday also. So do you think we will see continued weakness overnight and tomorrow or do you think they are done now selling? What number of open contracts will sway your opinion? 




  52. Car rams police van on Champs-Elysees, armed suspect dead



  53. Why The Stock Market Can Triple By 2026


  54. /CL- Phil is already in the August contract. He switched to it last week, I think.


  55. CAG/Scott – Pricing pressure from AMZN et al to cut costs is worrying people there.

    /CL/Jeff – Yes, I'm very made I didn't get out this morning over $45, that was my intention.  Now I'm adding 5 /CLQ7s at $44.37, while they are cheap so I'll have 15 overnight.  I'm fairly sure this is just rollover nonsense. Whether up or down, I'll look to cut the /CLN7s in half (at least) asap.

    Oil/Craigs – Well 76,000 open contracts in 3 days wasn't a big deal but we know two days is a problem so this sell-off is very much in line with "normal" into the last day.   Last days themselves are iffy but I do feel good about a weekend pump job.  

    /CL/Ravi – I thought I did but I didn't, still have the /CLN7s (and now 1/2 the /CLQ7s).

    Dollar creeping up all day, that's not helping oil at all.


  56. Started an initial position in P at $6.85.   Catching a falling knife (AKA Dumpster diving. ;-) )

    ~~09-Jun-17 P – Pandora Media:  SiriusXM (SIRI) to make a $480 mln strategic cash investment in Pandora  (8.42)

    ~~P – Pandora Media: CNBC's David Faber says Sirius XM Radio (SIRI) offered to acquire Pandora for $8/share  (8.42)

    ~~Pandora Media upgraded to Outperform at FBR & Co.; tgt lowered to $11  (8.52)

    FBR & Co. upgrades P to Outperform from Mkt Perform and lowers their tgt to $11 from $14. Firm's belief is that the risk/reward is now appealing, with the stock near an all-time low, but that the opportunity for better execution is much improved, thanks to Liberty/Sirius moving into a prominent position to steer the company. The Liberty/Sirius team's strengths lie where Pandora's weaknesses have been: excellent capital allocation and deal making and tight cost controls. The Sirius/Liberty team will not have total control of Pandora, but looks pretty unstoppable: It was, apparently, the only strategic (versus financial) team willing to inject new capital and will have the chairman's position, plus two other seats on a nine-member board, as part of the planned $480M preferred stake (yielding 6%) convertible into 16% of post-deal equity in five years at a $10.50 conversion price.

    There are reports that Sirius, through it's parent Liberty, offered $15 last summer, which was turned down.  (Shades of Yahoo.)

    There were also a couple of downgrades on this news.


  57. Jabo – Only a SINGULAR FU today? WUCK? Where's Your Sign?  That's great it starts with an Earthquake….


  58. nat--hilarious!


  59. Phil – SI — you are long DX and SI?  Is the SI justified by the base at the 16.5 line?  It broke it – now 16.46


  60. P/Albo – Other than a buyout rumor, is there really any reason to like P?  No chance of a profit this year or next and big losses while waiting.  Not surprised there wasn't an actual offer.

    /SI/Latch – Just 2 long /SI and the 4 long /DX from this morning.

    $44 is an important line for /CL:

    Looks like we're finishing at the highs of the day but still 5,776, not 5,780 and 2,450 on the dot on /ES with 21,469 and 1,417.50.  


  61. Jabo – "nat--hilarious!"  FU, LU2 and OUT! Smiley!!!


  62. Phil when you say 44 is important does it mean you are out if it crosses below? 


  63. WTF, is this a 3rd world country now:

    http://talkingpointsmemo.com/livewire/cnn-jim-acosta-white-house-briefings

    CNN’s senior White House correspondent Jim Acosta on Monday said the White House is barring recording equipment from its daily press briefings so that its “evasive answers” to reporters’ questions will not be documented on tape.

    Transparency much…


  64. pHIL – cL — 40 Before 50


  65. Latch is that comment based on any new information or simply your prediction?


  66. Phil – I think Pandora is an interesting spec at these prices, almost  some 20% below the level FBR recommended them.  Not looking for a homerun, but think it could be a steady 10-15% earner.  Basically following Liberty Media into the name.  If it rebounds 15-20% in a short period, I'll let it go.


  67. PHIL / WFM – As I read through the announcement and the key players.  I'm thinking there will be little in the way of regulatory impediments, and there may be the opportunity for a bit of an increase the price sale price – maybe 1 or 2 dollars a share more, so a tgt sale price of 43 to 44 / sh.  I'm not sure if you've looked at this but would like your take on the possible buy out price points and if you see any real hurdles to the sale.  I'm looking at the following as a speculative position on the sale.  Anything below a 42.5 sale price would yield a small loss.  Thanks for your input.

    20X Jan '18 40 / 45 BCS for 2.5

    10X Short the Jan '18 42 Puts @ .5 


  68. craig, I follow Art Berman   http://www.artberman.com/  and other than Phil , he is the only one I will trade on.  His mantra is inventory overhang, shale drillers and neutral demand all lead to lower rather than higher.  His price range band is the same as Phil. I just think that globally demand is slowing and pressure is mounting to the downside – I think the traders will be testing OPEC.  If the dollar was stronger, CL would be in a real bind. 


  69. If we follow last year's patter, we'll be at $40 before we see $50:

    And conditions have not changed much – if anything we have more inventories.


  70. Phil – Just watched that coal story by John Oliver. It's really sick what's going on with these CEO and Trump is clearly an accomplice now. And Pruitt talking about the fact the Trump created 50,000 mining jobs already when there are only 76,000 coal miners! They created 1300 jobs and I guess that doesn't sound good enough. You can't trust these guys to tell the truth about anything. Insane!


  71. Phil – SI. what I meant to say is that it seems like a contradiction to be long both USD and Silver. I know you like SI at 16.5..  Are you surprised the DX did not climb more on Yellen's hawkish statements? I am.


  72. StJ the part of that story that I found most interesting was that The Kentucky Coal museum was being powered by solar energy. 


  73. Latch and StJ you guys may be right, but for now I think Phil is looking for 46 or even 45.50 before we see 40. He has said repeatedly that he is looking for just a small rally into July 4, but look out below after that 


  74. I agree with you craig.  



  75. oil getting spanked again! stjean called it!


  76. Good morning!

    Hopefully oil is selling off on the last day of the contract blues.  They finished yesterday at 27,500 so a lot of contracts were dumped yesterday but whatever is left over 10,000ish needs to be gone by 2:35.

    I'm up to 20 with an average of $44.50ish and not happy.  Will be back to 10 by end of day no matter what, can't risk API with 20 open.

    $44/Craigs – Would have stopped out if I caught it but I missed it.  It's those little $5,000 mistakes that kill you…

    Recordings/StJ – Holy crap!  That one has to go to the Supreme Court though, of course, it's Trump's court…

    $40/Latch – It's the end of the cycle, see last month and the month before and the month before that.  Contracts are being dumped in the EU market and the rest will go in the US market later today and THEN we will see what's real.  The World has ended several times before and the question is whether you would have made more money betting on $40 or $50?

    Pandora/Albo – I think liberty wants them for their music rights deal (to use on SIRI), not to stream free music.  Sure, it's a fun gamble but you know me – I need a reason to buy something that has something to do with the company actually making money.

    Speaking of music – does anyone use Tidal?  High-quality streaming, I just signed up to try.

    WFM/Batman – They are already trading above the offer price on speculation so, if no one comes along to bid them up, you're just tying up your money for a year.  Probably not too risky unless the deal falls apart, so you can look at it that way but not something I'd bother with. 

    Dollar/Latch – Yes, very surprised, especially with other CBs not raising.  I figure we'll get a slow grind up back to 98.50 and that wouldn't be a big negative for commodities.  

    • There was a burst of volume in oil trading in the last hour, and the price action has been to the downside, taking WTI crude lower by nearly 2% to $43.58 per barrel – the weakest price since mid-November.
    • In a bear market, any excuse will do, and today there's talk about higher output from Libya. USO -1.6% premarket.
    • The move is putting pressure on energy shares in the premarket. The XLE is lower by 1% vs. flat action in the S&P 500.

    Notice how they go out of their way NOT to mention contract rollovers as a factor?


  77. CL/Phil –  What is API?  

    I'm up to 20 with an average of $44.50ish and not happy.  Will be back to 10 by end of day no matter what, can't risk API with 20 open. 


  78. Joseph, 

    American Petroleum Institute. They track inventories etc and release a weekly report every Tuesday. 


  79. Thank you Jeff.  BTW… hope all is well with your newborn.


  80. API is also a unit of measure – of the density of oil.  The higher the number the lighter it is. Fact – US Shale oil light and US refineries are geared for heavy – thus we will be importing for a long while.