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2,750 Tuesday – S&P 500 Hits it’s Next Benchmark

2,750 already?

It was only September when we got over 2,500 so another 10% in 4 months is a 30% annualized pace for the senior index.  Back on 9/26, I asked "Is S&P 2,500 the Market’s Waterloo?"  and clearly it has not been, with barely a down day since, punctuated by this year's crazy kick-off that's taking us 75 points higher (3%) for the year, so far.

Of course that's nothing compared to what's going on with our GreenCoins (GRE), which blasted up another 100% this morning on heavy volume, despite the sell-off in some of the more popular crypto-currencies.   That's up 1,000% from our Dec 3rd call to buy the currency, where we guaranteed we'd accept them at 0.00044 as payment for 2018 Annual Memberships.  We even tweeted that one out the same day – so there was ample chance to get in on the fun.    

And why shouldn't we be able to make 1,000% in a month?  That's the new market paradigm these days when, as I predicted on November 29th, at this pace "We Will All Be Billionaires."  The next day (11/30) we analyzed the Dow in "24,000 Thursday – Dow Continues Its Insane March Higher" and now the Dow is at 25,300, up 5.4% in 6 weeks.  Of course, we didn't think it was sustainable and we cashed out our protfolio positions into the holiday and, since last Monday, we've been slowly building them back up – since this rally seems to be showing no signs of slowing down.

While I'd much rather see a good correction before we jump in and start buying again, we also don't want to get left behind in a good rally so we're picking up values where we can – though there aren't many value stocks left these days!   

Not only is the S&P testing the 2,750 line but the Nasdaq 100 (/NQ) Futures are just under 6,700 – and that's up 10% since October!  We're using the Nasdaq's ultra-short ETF (SQQQ) as our primary hedge at the moment as we really can't believe earnings are going to live up to the hype but it's not really about earnings – it's about the new tax law and what it can drop to the bottom line.

Still, the markets have the momentum and will continue to rise until something stops them so we are simply buying to be defensive at this point.  Last week, for example, we talked about how we would be building up our new portfolios and our trade idea for that morning was:

  • Sell 10 AAPL 2020 $140 puts for $9.50 ($9,500) 
  • Buy 10 AAPL 2020 $150 calls for $35 ($35,000) 
  • Sell 10 AAPL 2020 $180 calls for $20.50 ($20,500) 

That spread cost us a net of $5,000 on the $30,000 spread with $25,000 (500%) upside potential if Apple (AAPL) is over $180 in Jan 2020 and, though it's only been a week, the short puts have already fallen to $8.40 ($8,400) and the $150/180 spread is now net $14.80 (14,800) so net $6,400 is up $1,400 (28%) in 7 days because – well because they just GIVE money away in this market, don't they?  

That's why we don't fear missing out on a rally by going to cash, the upside on our options spreads is so much – we just need to know the market isn't going down and we'll outpace the gains by a mile.  Another trade we published in that morning Report was for Ford (F) – and that was a simple covered call with some short puts in case we were able to buy more stock cheaply:

  • Buy 1,000 shares of F for $12.49 ($12,490) 
  • Sell 10 2020 F $12 calls for $1.50 ($1,500) 
  • Sell 10 2020 F $12 puts for $1.50 ($1,500)

Though this was not meant to be a sexy play, with only 39% upside potential and though it's only been 7 days, F is already at $13.15 ($13,500) and the $12 calls are $1.90 ($1,900) and the $12 puts are $1.35 ($1,350) for net $10,250, which is already up $760 (8%) from our original $9,490 outlay.  Again, money is just being printed for you at the rate of 1% a day in this market and, while it may be fun – it can't possibly last – especially without inflation.

These are secret Hedge Fund trades, these are straightforward stock and options trades I am telling millions of people about LIVE and then checking back on them a week later to count the winnings.  How is this a realistic market when it's this easy to make annualized returns of over 100%?  

THAT is what we are worried about.  At some point, reality will assert itself and the market will correct.

Maybe…

 


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  1. Does anyone follow this company ?

    ~~ HMNY – Helios & Matheson announced that MoviePass surpasses 1.5 mln subscribers  

    Less than 30 days after announcing its milestone of 1 million subscribers, MoviePass added another 500,000 new paying subscribers since December 12, 2017. 

    HMNY owns about 60% of MoviePass.   Looks like more than 50% of the float is short.


  2. Added the 2750 line on the S&P which happens to be our 25% Up line! Surely a sign of the madness of these markets!


  3. Good Morning.



  4. So let's all party like it's 1929!


  5. I hear it was a very good year… all the way through September.


  6. albo/MoviePass

    I don't know that much about the company but bought several of the passes through Costco before the holidays and it is a great deal.  Paid 89.95 for the whole year and can see any 2-D movie at most theatres.


  7. Thanks, Lalalinda. 

    I saw where they were working with Costco.


  8. Good morning…  TGT up almost 3% 

    Target rallies after strong profit outlook

    Jan. 9, 2018 8:28 AM ET|About: Target Corporation (TGT)|By: Clark Schultz, SA News Editor

    Shares of Target (NYSE:TGT) break higher as investors eye the boost in full-year profit guidance.

    The retailer pushed up its outlook on 2019 EPS to $5.15 to $5.45 vs. $4.36 consensus.

    TGT +3.45% premarket to $69.50 vs. a 52-week trading rangfe of $48.56 to $72.08. The positive outlook from Target could be enough to give a slight upward nudge to Walmart (NYSE:WMT) as well. Walmart is up 0.47% in premarket action.

    Previously: Target lifts guidance after strong holiday sales (Jan. 9)

    #ICR18


  9. Whats with WPM? today?


  10. SVU reports tomorrow before the open


  11. Good morning!

    I'm doing the Nasdaq show this morning – will be back around noon..

    Looks like buying anything that's a stock is the way to go so far….

    HMNY/Albo – It's an interesting model.  They essentially buy the tickets (at a discount, I think) whenever the customers request them and I guess they hope it's like a gym membership, which people keep paying for but don't use or maybe they think they can make a lot of money off marketing and analytics?  I'll be very interested to see their earnings and guidance.    

    Big Chart – I guess we could just double all the levels?

    TEVA/Jabob – LOL, don't you just love analysts?  

    TGT/Learner – That's one that got away from us.  Too expensive to get back in now.  

    WPM/Baron – Have you seen the dive Silver is taking?

    Later guys! 


  12. Bank stocks catching some bids ahead of earnings. 

    Also somewhat steepening yield curve.


  13. LB keeps getting weaker.


  14. Phil, I'm looking for some guidance on CCJ.  I'm short 12 puts at net $6.27. For a stock that has 4.26% dividend, 1200 shares would cost $20,256 if assigned, and I can then sell the $10 puts and calls for $3.30, lowering basis to $12.97 and $.40 in dividends lowering It down to $12.57 and repeating in 2019. 

    Or can buy back the puts for $6.900 and buy 20 $7/$12 2019 bull call spreads, selling the $10 puts for a net outlay of $.33 with the potential for a $9,340 profit, minus the net loss of $7,524 this year for a $1,816 total profit.  I realize I'm trying to make up for a loss, but there is still an outlook for higher uranium pricing, and it’s the one stock (other than FTR) that I’ve weathered the storm. 

    Thanks!


  15. Albo – I think that the expectation is for more deregulation on the banks so short term, more profits. Until the entire system crashes again and taxpayers have to bail them. That's how Trump ran his business so not surprising anyway.


  16. HMNY

    Helios & Matheson: MoviePass subscribers surpass 1.5M after year end surge; Lower cash burn est based on usage assumptions — Maxim Group  (7.06 +0.14)

    Helios & Matheson: MoviePass subscribers surpass 1.5M after year end surge; Lower cash burn est based on usage assumptions — Maxim Group  (7.06 +0.14)

    1/9/2018, 10:31:42 AM ET

    Maxim highlights HMNY's announcement that MoviePass (MP) had surpassed 1.5 million subscribers after a surge in year-end and early January subscriptions. Firm believes average movie visit per new subscriber is lower-than-expected and membership turnover remains low. As a result, they narrow their operating loss estimates to $91 million in 2018 and $75 million in 2019. They believe that in the NT, a rapidly increasing subscriber base is an important data point so that theaters and studios alike are made aware of the leverage MoviePass is building. Firm believes by year-end, multiple theaters or studios will look to make early deals with MP. MP has been promoting I Tonya and we believe solid response by subscribers could lead to a performance payment by the distributor, Neon; Buy, $25 tgt.


  17. STJ – No surprise there.


  18. Really thought the market would take at least a small dive in the new year as there was a lot of talk about people holding off on selling till the new year to take advantage of the tax cuts.  I know it's early in the year but this is getting ridiculous now.  Sad!!!!!!


  19. HMNY / Phil – They pay full price for the tickets as of now but as Baron's post points out, it's more than likely that the disruption that this model is creating will lead to deals with studio and theater chains. It would be crazy for them to fight it anyway. As a theater owner, I welcome more people buying my $0.15 popcorn for $5…


  20. Holy crap, another rockin' rally! 

    People at the Nasdaq are generally incredulous but "going with the flow".

    Oil went nuts, passing $62.50, /RB even nuttier over $1.825

    LB/Jabob – That's why it's good to cash in.  Now we can play again.

    CCJ/Rperi – Well, for starters, I've gone off them since Japan is not restarting plants and others are on hold and solar is getting cheaper – not sure how much growth is there…   So I would not play them too aggressively and you're looking at needing 20% in a year on the spread.  I can't tell what puts you sold but, if you sold them for $6.27 and you can buy them back for $6.90 – then they are a non-issue and I'd do that and simply sell some 2020 $10 puts for $2.55 and, if so inclined, use that money (say $2,550) to buy 20 of the 2020 $7 ($3.80)/$12 ($1.75) bull call spreads at $2.05 ($4,100) so net $1,550 on the $10,000 spread and, while you are waiting, you can sell 5 (1/4) March $9 calls for 0.80 ($400) and you've got 8 of those sales ahead to pick up about $3,200 while you wait.  

    Dive/Ult – I think we have to give people time to talk to their accountants and such.

    Popcorn/StJ – It's all about the popcorn.  


  21. ultguy… people are conditioned now, why sell if the market never goes down? I agree it's insane and setting up for a surprise… timing is the key.


  22. KODK – Up big !   Phil, remember your sarcastic flying car reference ?

    KODK -Eastman Kodak and WENN Digital announce licensing partnership to launch KODAKOne and KODAKCoin, a photo-centric cryptocurrency 
    Kodak and WENN Digital, in a licensing partnership, announced the launch of the KODAKOne image rights management platform and KODAKCoin, a photo-centric cryptocurrency to empower photographers and agencies to take greater control in image rights management.
    •The initial coin offering will open on January 31, 2018 and is open to accredited investors from the U.S., UK, Canada and other select countries.

     


  23. ESRX upgraded today by Baird to 92 from 81






  24. Yowza ! ! !

    KODK up 125%.  Sold 1/3.


  25. about time Phil you need to take GRE public :)


  26. Phil – Muck – So let's all party like it's 1929! I hear it was a very good year… all the way through September.

    Since it's a little slow, and the close is coming up, a moment of non market Zen… This last year was a very good year for me, and so in one aspect, I blew my horn today.  For those old enough to remember, and those who can appreciate the Plimpton-esque participatory journalism, enjoy and Out.


  27. KODK/Albo – See, now there's an actually interesting way to leverage crypto into something useful.  I would have tossed a few bucks at that one if it wasn't already up 100%.  Congrats on playing that one.

    Think how many Nasdaq stocks are having things like this happen and you can see why it's up like a rocket.  Very much like the .com boom.  

    ESRX/Batman – That's another one that got too expensive to get back into.

    GRE/Pat – It's not mine to take, I'm just a bystander.  

    Good job with the picks, Naybob.  Next year we'll do Vegas and put it to a real test. 


  28. Thanks, Phil.


  29. /NKD down 125 today but the US indexes could care less.

    /YM 25,400 is a fun short with tight stops above.

    /ES 2,760 finally got a reject

    /NQ 6,700 finally caused a pause – also a good shorting line

    /TF 1,565 is good to play for the cross below

    DAX 13,400 is a good check line too:

    Check out the 5-year charts:

    There are 30 year-old traders with 5 years' experience who have no idea whatsoever that markets can go down.  


  30. Phil, could you post the recent daily S&P volume and let me know where you get it? 


  31. KODK warrants up more than 2500%.  Welcome to the whacky world of crypto.


  32. It's SPY volume from Yahoo:   https://finance.yahoo.com/quote/SPY/history?p=SPY

    Today happens to be super-low:

    Date Open High Low Close* Adj Close** Volume
    Jan 09, 2018 274.40 275.25 274.09 274.82 274.82 40,326,583
    Jan 08, 2018 273.31 274.10 272.98 273.92 273.92 53,856,700
    Jan 05, 2018 272.51 273.56 271.95 273.42 273.42 83,524,000
    Jan 04, 2018 271.20 272.16 270.54 271.61 271.61 80,636,400
    Jan 03, 2018 268.96 270.64 268.96 270.47 270.47 90,070,400
    Jan 02, 2018 267.84 268.81 267.40 268.77 268.77 86,655,700
    Dec 29, 2017 268.53 268.55 266.64 266.86 266.86 96,007,400

    Well, I have to be in Brooklyn for a meeting (PSWI), so I'm going to get going.

    Back to normal tomorrow (whatever that is) and hopefully a Webinar using our new system, which we haven't tested yet! 


  33. Thanks Phil, I figgered it's been low… LOL, I have Yahoo… 


  34. Phil,

    http://www.abc.net.au/news/2017-12-01/mum-and-dad-investors-could-lead-to-housing-crash:-report/9215448

    What would be the best instrument to short the Australian Housing market ? Any Australian construction companies listed on the US exchange ? 

    Thanks as always 

    Pat


  35. There were few surprises in China’s latest inflation report


  36. Donald Trump may be on the hook for conspiracy to commit murder in Trump-Russia scandal




  37. Why dolphins are deep thinkers




  38. Good morning and wheeeee!!!!  

    Very nice gains on our index shorts (finally) and this is why I like to keep poking at them and taking those small losses – the winners more than make up for it!  

    I'm taking the money and running here, /NQ was my play and now testing S2 at 6,644 and my fresh horse is now /TF below 1,550 (but I doubt it) with /YM at 25,235 and /ES at 2,738.  If anything, I'd play long for the bounce here but huge winner ($11K) so I'm just happy to watch for now.

    Seems like we're only selling off because the Dollar dove and took /NKD down 250 and our indexes followed it lower – otherwise I'd be more inclined to stick with it.

    Sadly, I still have my 4 long /DX and those are down $2,240 now at 91.885 – should have cut them to 2 yesterday but I was greedy.  

    /RB is still a good short at $1.85, of course, with tight stops above. 


  39. Gundlach believes in magic… but Phil is the rubber band man :)

    https://www.youtube.com/watch?v=jdiB3cISeBk


  40. Do you have a link to your tv appearance yesterday?


  41. Sold some more KODK at 12 in the pre-market.