by phil - December 3rd, 2013 2:22 am
And the madness continues!
We had our fabulous Las Vegas Conference last weekend so we're a bit behind this month and we ended the week at record highs. Our September Trade Review (Part 2) wasn't done until 11/2 anyway and Part 1 of September was completed on Oct 13th, when the market was just beginning to fly. (Chart by Dave Fry) We called the September action almost perfectly and, out of 112 trade ideas for the month, 96 (85%) were winners – an incredible percentage that actually improved upon August's 81%!
For some reason, people think I'm too bearish but that's because our SHORT-TERM Portfolio is full of bearish offsets to the bulk of our positions, which are NOT tracked until the reviews, because they are longer-term trades or day trades. Also, if we tried to track 112 additional trade ideas per month, we'd be just about getting to February now!
Options are not like stocks, we don't want 1,000 people all following the same trade (as I noted last month as well). That's why PSW is an educational site where our goal is to teach you to identify your own opportunities to BE THE HOUSE, Not the Gambler. By putting up an average of 5 trade ideas every trading day – we give our Members a huge variety of trade ideas that can fill in any portfolio. These trade ideas are highlighted daily in our Member Chat Room at PSW! Keep in mind that this is an arbitrary point in time and some trades could have had better (or worse) exits in between – we're not doing this to keep score, just to get an idea of what worked and what didn't in the past month so, hopefully, we can make better decisions this month.
by phil - December 2nd, 2013 6:22 am
And, there are 6 less days between Thanksgiving and Christmas than we had last year! That's the bad news, the good news is E-Commerce sales are up 17.3% as it's Brick and Mortar that's dying, not Retail on the whole. We'll see how XRT performs, we're short the ETF but it's not a good picture of retail because it includes RAD, SWY, AMZN and EXPE among it's top holdings – not a pure play on brick and mortar operators...
AMZN, in fact, will be flirting with $400 this week (where we will short), especailly after Jeff Bezos threatened to unleash his drone army upon America in last night's 60 Minutes interview.
Sure, it's a great idea to give an egomaniacal Billionaire permission to privately operate thousands of army-quality drones across the country – what could possibly go wrong (and now I have an idea for the next James Bond film!).
Actually, the business I'll be going into is selliing EMP guns to people who want to see free goodies drop from the sky!
We're also waiting for our equity markets to drop from the sky but no luck there as we continue to defy gravity and, according to Nobel Prize-Winner, Robert Shiller, logic!
"I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply in some property markets," Shiller told Sunday's Der Spiegel magazine. "That could end badly," he said.
"I am most worried about the boom in the U.S. stock market. Also because our economy is still weak and vulnerable," he said, describing the financial and technology sectors as overvalued.
"Bubbles look like this. And the world is still very vulnerable to a bubble," he said.
by phil - November 29th, 2013 8:24 am
I hope everyone is having a nice holiday.
The US Markets were closed yesterday and today we close at 1pm and then Christmas Eve we're closing early again and closed XMas day (Weds), of course, but not New Year's Eve so just two more humbug interruptions of our bull Market before 2014 and so far, it looks like we're rolling right into our Santa Rally with the US Futures up another 0.25-0.5% this morning.
Today is "Black Friday", so named because it's traditionally when retailers finally get into profits for the year and whatever they can make over the next 30 days are going to be it for their 2013 profits. Due to an unfortunate turn of the calendar, there are only 3 weekends (after this one) until Christmas – that places more than the usual importance on this weekend's retail sales.
The National Retail Federation has forecast that up to 140M consumers will go shopping over the long weekend, up a bit from 139.4M last year. IBISWorld has projected that total sales through Cyber Monday will rise 2.2% to $40.5Bn. Mobile traffic increased over 31% yesterday as smartphones accounted for more than 23% of all Internet traffic. By 6 pm, online sales were up 10% over last year.
Germany, surprisingly, had a 0.8% slump in Retail Sales for October, following through on a 0.2% drop in September and missing the predictions of leading economorons of 0.5% growth by a mile (or 1.6 kilometers). That's pegging their year/year sales at -0.2% vs the +0.3% consensus in the World's 4th largest economy.
Now, I'm not going to ruin the holiday spirit by pointing out that this is troubling. Let's just do what the rest of the market is doing and completely ignore the bad data! As you can see from Dave Fry's NYMO chart, we're not very overbought, even at these levels, so we'll add a few more 500% plays for additional upside moves and see what happens. We've placed plenty of bearish bets and we'll adjust those to keep them active but it's bullish bets we need for balance now.
by phil - November 27th, 2013 7:57 am
Put another Trillion on the fire!
What the hell, it's not our money. We spent "our" money 20 years ago – this is our children's money and their children's money we're dipping into and, by the time we get to great-great grandchildren – well, I'm going to want a paternity test before I start cutting back on my excess just to keep them from being broke, right? Who's with me?
Clearly Uncle Ben and the Fed agree, as they throw another $21.5Bn per week into the mix – hoping to get a reaction like kids tossing Mentos into a fountain. Turns out you need quite a lot of them to get a reaction but the Fed seems to have an endless supply of breath mints. As noted by The Burning Platform last Summer:
Bennie and the Inkjets went all in yesterday at 12:30. This Princeton professor who has never held a real job in his entire life actually proclaimed that buying hundreds of billions of toxic mortgage backed securities from the insolvent Wall Street bankers that own the Federal Reserve, will benefit the average American. He proudly stated that he will hold interest rates at 0% until at least 2015. This means that senior citizens can plan ahead and stock up on cat food to eat, because they will be paid nothing on their savings for at least the next three years. Ben’s claim to help home buyers is a bold faced lie. Mortgage rates were already the lowest in history. Interest rates are not the problem. Debt is the problem. Insolvency is the problem. Spending money we don’t have is the problem. Debasement of the currency is the problem.
For those of us paying attention to yesterday's action, the markets are getting stranger and stranger. Yes the S&P logged another up day but all of the day's low volume came in the last 15 minutes and it was ALL downhill into the close. We had noted a similar pattern on Monday, though less pronounced and this kind of fake, Fake, FAKE market behavior is just the kind of thing that leads us to get to CASH ahead…
by phil - November 26th, 2013 8:12 am
Party on markets!
Pending Home Sales were off 0.6% vs up 1.1% expected and the Dallas Fed fell to 1.9 vs 5 expected and 3.6 prior but no one cared and the markets finished flat to slightly higher on holiday volume levels. Note the stick-save at the close on Dave Fry's SPY chart as well as the Futures pop that was quickly sold off in the morning. Try adding up all the red bars and stacking them against the grey bars and THEN you'll get a picture of what's really happening.
What's really happening has been the subject of much discussion in Member Chat and we've been watching more reliable indicators like the 1.6M shares declining vs 1.3M shares advancing on the NYSE and the oil services (OIH) finally starting to roll over as the reality begins to sink in that oil is NOT going back over $100 anytime soon.
That's been our premise for shorting XOM ($95) and we're up to 20 Jan $92.50 puts on our Short-Term Portfolio, now .94. A 5% pullback in XOM, which has run up 13% since early October, would drop them back to $90.50 and yield $2 or better on the puts so that's our target. We're also short on USO and long on SCO (ultra-short oil) so plenty of ways to profit from continued weakness in the energy sector.
We're also shorting retail with XRT (Jan $90/85 bear put spread at $2.50 with 100% upside potential in 52 days) based on numerous factors, including the spending forecast chart on the left. Aside from Gallup's recent poll, Morgan Stanley predicts this will be the worst holiday season since 2008 with MAYBE a 1.6% rise over last year.
Consumer debt is at 5-year highs and consumer confidence was 72 in November vs 82.7 this time last year while "current expectations" are way down at 63.2 from 76.5 in July. Gas prices, while coming down from silly highs, are only .20 lower than last year (5%) and are unlikely to tip the scales. Finally, retailers aren't planning to hire and inventories were building – all bad signs as we head into the…
by phil - November 25th, 2013 7:06 am
It's that time yet again.
Back in early September, when we broke over the 5% line on the S&P (1,680), we decided it was time for "5 More Trade Ideas That Make 500% in an Up Market" as a follow up to our April 14th's 5 Trade Ideas, that were already on the way to hitting all of their goals. Those 5 new trade ideas were:
ABX is "off track" (so we like it for a new play) and QQQ is way ahead of projections and the others are merely "on track" for our expected gains. Now that we have our holy trinity of index levles (Dow 16,000, S&P 1,800 and Nasdaq 4,000), we can use the 2 out of 3…
by phil - November 22nd, 2013 8:16 am
Look at this chart – there's only 15% of us (bears) left yet still the MSM attacks us – why??? Why indeed? What are they afraid of? Why do Central Banksters Bernanke, Draghi and Kuroda all feel the need to say "What bubble?" in the same week? As a parent, I know when my kids deny something too much – it's a lot more likely that they KNOW they did a bad, bad thing…
Anyway, I am not a bear, I am just a Fundamental Investor who doesn't see anything worth buying BECAUSE IT'S TOO FRIGGIN' EXPENSIVE! Is that bearish? Once upon a time it used to be called rational. And it's not like there's NOTHING to buy, just yesterday, in our fabulous Webinar, we found bullish plays we liked for ABX, FTR and DBA. So, gold, communications and food, interestingly enough, are out of favor enough to be relative bargains in this runaway market. Why? Because they have real earnings that are hard to extrapolate to infinity.
Infinity an beyond is where this market is projected to go as the Yellen Fed promises to be even more doevish than the Bernanke Fed and the STAWealth chart on the right predits S&P 2,200 in 2015, at a cost of "only" $2Tn more Dollars on the Fed's balance sheet.
Thank goodness we never have to pay that back and… what? Oh, we do? Oh shit!
Well, at least we have a robust US economy that's creating Millions of jobs that will drive our GDP higher faster than the Fed and the Government drive our debt to infinity and beyond and…. what? We don't? Son of a bitch!
Well, you know jobs aren't everything, are they? Highly overrated economic indicators of a bygone era where people mattered. Fortunately, our economy is in a new paradigm that can motor on without any actual workers doing work and earning incomes and stuff and… what? It's not? F*CK!
by phil - November 21st, 2013 8:19 am
Wheeeee, what a ride!
I already sent out an Alert to our Members this morning and I tweeted it so since it's Webinar day and it's a good way to get new Twitter followers (giving out free money with great trade ideas). Already the Nikkei is off 50 points from our 15,500 shorting target and the short Futures play (/NKD) is up $250 per contract and the Egg McMuffins are paid for.
As you can see from Dave Fry's SPY chart, the Fed Minutes gave us a sharp dip but maybe it was just us selling as my immediate comment to our Members was "Oops, Fed Minutes not giving people the warm fuzzies." at 2:01 and then, at 2:04, I said:
Dollar over 81 on Fed minutes, now we know why Bernanke wanted to put such a doveish spin into these.
Nothing to rally over but nothing really like a smoking gun on tapering. Seems to me like they have no idea what to do and are all arguing with each other (quick read) and everyone is proposing a different plan for various possible scenarios. On the while, the gist of this is they don't think QE is working anymore – THAT is what you should take away from these minutes!
Game on for
by phil - November 20th, 2013 7:39 am
Welcome to the Grand illusion
Come on in and see what's happening
Pay the price, get your tickets for the show
If you think your life is complete confusion
Because your neighbors got it made
Just remember that it's a Grand illusion
And deep inside we're all the same. – Styx
Oh my God, I have run out of doveish metaphors to describe the Fed.
Like Austin Powers seeing a mole – all I can do is say dove, Dove, DOVE! Bernanke used his farewell speech last night to actually turn into a dove, fly around the room and poop on the Dollar, saying: "EVEN AFTER unemployment drops below 6.5%, and so long as inflation remains well behaved, the Committee can be patient in seeking assurance that the labor market is sufficiently strong before considering any increase in its target for the federal funds rate."
The OFFICIAL unemployment rate is just 7.3% and we're about 6 months away from seeing 6.5% – even if things go splendidly in the economy (and the Government doesn't shut down again in January) but the broader U6 unemployment rate is still more like 14% and ShadowStats calculates the actual unemployment rate (of actual people who want jobs but don't have them or people who want good jobs and have crap jobs) is more like 24% in the US, so we are miles and miles and miles and miles and miles away from 6.5%:
by phil - November 19th, 2013 8:23 am
Dow 16,000! So what?
That is ONLY the "Must Hold" line on our Big Chart. It's a level we've been waiting for the Dow to get to ever since the Russell crossed it's own Must Hold line at 1,000, way back in May. We were also waiting for NYSE 10,000 and we got that last week so the Dow is the final index to CONFIRM a rally – not the leading indicator of a new one.
What this does do for us is establish the Must Hold lines as a likely floor and we will now, finally, be able to raise our big chart levels by 10% (assuming we hold for the week), which will put the indexes current levels at new Must Hold levels 10% higher and, once again, the Dow would be 10% behind the leaders.
That's why we like DDM (ultra-long Dow) as our bullish cover – if the rally is going to continue, we can expect the Dow to play a little catch-up. In Member Chat yesterday, however, with the Russell pushing 1,020, we grabbed a new short play on TZA because the Russell is too high in the same way the Dow is too low – that makes for a very nice pair trade, assuming there's a happy medium there.
Like the Dow, the S&P barely had any time to enjoy the view at 1,800 before being smacked back down below it. Dave Fry blames Carl Icahn but I blame gravity as Icharus gets too close to the sun and tumbles back to Earth with his feathers ruffled.
The Nasdaq similarly tested 4,000 and that is a full 20% over its Must Hold line at 3,300 (crossed in May) yet we still have people who don't think this is a bubble – just a happy market, I suppose. This puts the Nasdaq up 33% in a year. If not a bubble, are we supposed to consider this "normal"?
"Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception." -- George Soros