by phil - January 6th, 2015 7:59 am
Wow, what a downer yesterday was.
Our Members were loving it as we reviewed our Short-Term Portfolio on Friday afternoon and it was up just 68.7% for the year at $168,680 and, of course, we were bearish into the weekend. Those same positions, with no adjustments, finished the day yesterday up 81.7%, at $181,680 – gaining $13,000 on that little dip – not bad for a "down" day!
Today we expect a bit of a bounce in the market but we already had our fun this morning playing oil long in our Live Member Chat Room beginning at 5:18 am with a bullish trade idea at $48.80 on /CL (Oil Futures). We already stopped out of that at $49.25 for a nice $450 per contract gain – enough money to buy a nice breakfast while we wait for the markets to open.
We also went long on /NG (Natural Gas Futures) in our Live Member Chat at $2.825 this morning and, already we're up to $2.90 on those for a $750 per contract gain on those contracts. This is why we love trading the Futures. We'll discuss Futures trading in our Live Webinar today at 1pm (EST) and, since this is our first official one of the year, it will be FREE to join AT THIS LINK. If you want to learn more about how we make these trades – come join us!
As I said yesterday, we simply trade on the Fundamentals but it's also important to learn how to make those trades and to have a trading discipline. We discussed some scaling techniqes this morning and you can learn more about that by checking out our Strategy and Education sections but, to learn advanced techniques like Futures Trading, the live Webinars seem to be most effective.
I can tell you what we're trading in the morning post (this newsletter has 17,720 active subscribers) like, for example, this morning we will re-enter a bullish position on oil (/CL) back at $48.85 and stop out at $48.75 and re-enter on a cross back over $48.85 (same plan as I told you yesterday) and then again at $48.50 - baiting our hook with $100 worms while…
by phil - January 5th, 2015 8:00 am
Watch that 2,040 line on /ES (S&P Futures).
If that breaks, as you can see from TradingView's 90-day chart, we have a big gap to fill back to 1,984 and, if that fails – we're goingt o be looking at the October lows again (1,800) – a potential 10% drop to kick off 2015. Ahead of that, we may get a bounce off the 2,040 line, but don't hold your breath (more on that below).
The Euro has continued to collapse over the weekend (see this morning's Tweet for maket news), down below the $1.19 mark this morning and that's sent the Dollar back to 92, which is putting pressure on commodities, especially oil, which is now testing the $51 line, where we'll take a long (/CL) with a stop at $50.90 and then again at $50.50 with a stop at $50.40 and again at $50, with a stop at $49.90, risking 3 $100 losses in the hopes of catching a $500+ winner (a 0.50 move up).
We laid out our expectations for a pop in oil this week way back in 2014 (on 12/23), so I won't go into it all again but I will point out that our premise on Natural Gas has already played out and our long call at $3 on /NG (Nat Gas Futures) is already at $3.12 for a $12,000 gain on a 10-contract block and our long call on UNG at $15 should also be going well this morning.
There was nothing complicated in our bullish call on /NG, we simply paid attention to the weather patterns and this morning we're getting the news we expected weeks ago, that an Arctic Polar Blast has punched through the boarder and will be dragging cold air into much of this country for the next week. (Image on right via Zero Hedge)
Duh! In other words, it gets cold in the Winter and, since PSW Members are also the smartest 1% of the country, we KNOW that Winter BEGINS on Dec 21st, yet the Natural Gas Futures were trading like it ended already. That's the basis of Fundamental Investing – look for places where the market simply has…
by phil - January 2nd, 2015 7:57 am
Happy New Year!
We've already posted our Trade of the Year for AAPL, rolling it out live on Money Talk back on the 19th and, before that, it was our Top Trade Idea for Dec 17th, along with our runner-up trade on BHI, which we also added to our Long-Term Portfolio (which we reviewed on Wednesday). On the 18th, Top Trades featured DBA, which became one of our "Secret Santa's Inflation Hedges" on the 21st. That should have you all caught up – in case you are just getting back from vacation.
The big story of 2015 is going to be whether or not a strong US economy will be able to ignite what is an otherwise lackluster (almost recessionary) Global GDP. Just this morning we got TERRIBLE news on Euro-Zone Manufacturing PMI (50.6), which is barely over the 50 line that marks declines while CHINA only cleared the bar bay 0.1 on Saturday.
"Euro zone factory activity more or less stagnated again in December," says Markit. "The weakness of factory output, combined with the subdued service sector growth signaled by the flash PMI, suggests the eurozone economy grew by just 0.1% percent in the fourth quarter." That's 1/4 of the World's economy flatlining along with Japan and the BRICs (another 1/4) – not a good start:
Only China and the US are actually growing and China's growth is slowing and the US changed the way they measure their GDP and much of our "exciting" growth in GDP has been related not to actual growth, but to the new way we calculate the same old growth. Even our made-up numbers aren't that thrilling, with 3.1% expected for 2015 and that's WITH the Fed pumping in another $800Bn.
What? You thought the Fed stopped QE? Silly investor – the Fed didn't STOP QE, they just stopped increasing the amount of QE. They are STILL rolling over $800Bn worth of TBills as they mature each year and, in fact, as our need to borrow has been decreasing (thanks to that Socialist, Health-Care Providing, Job Creating, Anti-Business with the World's best-performing Economy Obama!),…
by phil - December 31st, 2014 8:32 am
Happy New Year!
What a year it's been, too. We added 2.7M jobs this year and that's good because we also added 2.7M people to our population so, essentially, we didn't lose any ground. As more and more people left the labor force (retired, discouraged) however, official unemployment fell from 7% to 5.8%.
We still have 2M less people working thant we did in 2007 – despite adding about 20M people (now 320M). I guess it's progres if one in 10 people are able to find a job, right?
Of course, none of that stuff matters as long as the rich get richer and boy did they – with the Forbes 400 adding $98Bn to their pile of cash in 2014. Now $98Bn is a lot of money for just 400 people to spend – so some of that trickles down to us poor folks who have humble financial newseletters or make expensive cars or pilot privat jets – you know, regular Joes in the top 10% – it's been a very good year for us.
It's been a very good year for the markets with the Nasdaq leading us with a 14.4% gain on the year followed by the S&P at 12.4%, Dow 8.5%, NYSE 5.2% and Russell 4.25%. More impressive than the S&P's 12.4% gain was the fact that we went the ENTIRE YEAR without having more than 3 consecutive down days. That has NEVER happened before, NEVER. We can thank the World's Central Banksters for that – these markets are now so manipulated, they can't go down anymore.
We spent 2014 emphasizing our "Be the House – Not the Gambler" investing strategy and, although the carefully controlled market performance led to low implied volatility (giving us less premium to sell), we still managed to scratch out impressive gains on all five of the virtual portfolios we track for our Members.
- Our Short-Term Portfolio acts as a hedge for both our Long-Term Portfolio and our Income Portfolio. It began the year with $100,000 and, generally, we made bearish bets to offset our more bullish portfolios. As
by phil - December 30th, 2014 8:29 am
There's a level we haven't seen since the Dot-Com days. After 15 years, we're back over 4,800 for the first time and it would be a real shame to fly so close to the sun without getting a chance to melt our feathers at 5,000 once again, wouldn't it?
While I doubt we'll get there by the end of the year (tomorrow), 2015 would have to be a serious disappointment if we can't make 200 more points (5%) on the Nasdaq. AAPL is once again our Stock of the Year for 2015, so we do expect it to happen – as AAPL is about 15% of the Nasdaq but, heading into the holidays, we're SHORT on the Nasdaq as we don't like that HUGE gap down to the 40-MONTH moving average at 3,750, which not at all coincidentally is a 50% retracement of the current stimulated run-up.
What will bring the Nasdaq back to Earth, I can't say for sure but, like the Ghostbusters, we shall CHOOSE the form of the destructor and it will come for us. There are SO MANY potential ways the markets can sell off: Oil, Russia, Greece, China, Climate, Liquidity, Deflation, Inflation – these are all problems that are going on in different parts of the World that we are, for the most part, ignoring at the moment.
Don't get me wrong, we can ignore problems for quite a long time. We're very good at ignoring problems and even pretending they don't exist (cough, global warming, cough, cough) in order to just get on with our lives and avoid dealing with things. Baseball, apple pie and burying our heads in the sand like ostriches is the American way these days and I'm not saying we should buck the trend – let's just make sure we're aware of it.
We're still long-term long and will remain so until the Fed(s) run out of money (or the ink they use to print more money with) but, short-term, we're well-hedged for a correction over the next 60 days that could take us halfway to that 3,750 mark (back…
by phil - December 29th, 2014 8:20 am
That's the amount of money China's reserve adjustment is putting into the market in 2015. “Beijing is trying to stimulate lending and they are trying not to use strong measures,” said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. “Policy makers across the globe are trying to boost demand by increasing bank lending, especially to businesses." In other words MORE FREE MONEY – for the top 1%.
As you can see from the CNN chart, $800Bn is really just a drop in the bucket but it all ads up as Global Stimulus since 2009 is now approaching the $20Tn mark, or about 5% of Global GDP per year for the past 6 years. Since Global GDP growth is still less than 5%, you can imagine what would happen to us if we DIDN'T get another $3-4Tn this year, so China is simply doing their part with a timely announcement of next year's contribution.
Unfortunately, the situation for the bottom 90% continues to deteriorate but, fortunately, none of them can even afford to read this article because they have to get up and work more hours for declining wages so we (the top 10%) can make more money even though we're selling the same amount of stuff for the same prices.
Of course, the joke's on all of us as even our money is being paid to us in devalued currencies. The Dollar had a good year but it still doesn't buy what it did in 2007 and the last time the markets were as high as they are now was 1999, when the Dollar index was at 120 – more than 20% higher than it is today.
So, if you are getting $208 for a share of the SPY (S&P 500) ETF because the S&P is at 2,080, that $208 only buys you about $165 worth of stuff in 199 terms. SPY was only $150 back in 1999 so you are a bit ahead – just not as ahead as you think you are.
by phil - December 27th, 2014 8:25 am
Sometimes we forget the basics.
In our video series, there's a lesson called "The Secret to Consistent 20-40% Annual Returns on Stocks" and I hope you've seen it. While the low implied volatility of the market has made it a rough year for option selling, we were still able to scratch out just under 30% profits in our long and short-term portfolios. We also cashed out out Income Portfolio with a 20% profit earlier in the year and we did it by following the BASIC strategies we teach at Philstockworld, not by gambling!
Not that we're adverse to gambling, gambling is fun – but fun means fun, which means it's a small part of our total investing portfolio while the vast bulk of our money is SENSIBLY INVESTED in safer strategies that are designed to grind out consistently good returns over many years. Two weeks ago we discussed the long-term advantages of compounding annual growth in "How to Get Rich Slowly" and now we'll begin discussing some basic strategies that can generate those consistent annual returns.
In the "7 Steps" video, we're discussing a basic covered call strategy and we delve into the Fundamentals of stock selection. At the time (Sept 2013), we were using ABX, which was trading at $19.15 and we sold the November $19 calls (45 days out) for $1.30. The simple instructions were to wash, rinse and repeat to make up to 40% a year by simply selling calls against the stock.
As you can see, ABX has dropped to $10.58 since then, down about 40% BUT, had you followed through and kept selling calls, we had a lovely 12-month period in which it stayed in our range and that would have given us 8 opportunities to collect at least $1 for $8 back before the stock turned down in September of this year. That would have dropped the net outlay below $10 and stopping out at $15 would have been a 50% gain for the year – even as the stock dropped 22% (from $19.15 to $15).
by phil - December 26th, 2014 7:21 am
Yes, I've been watching the Lego Movie with my kids but it does sum up the mood in the markets as we finish up the week with MORE FREE MONEY from our Chinese masters. That's right, In order to keep the party going, the PBOC has set their non-bank deposit rate to ZERO, essentially allowing their financial institutions to lend exponentially more money as ANYTHING can now be counted as a deposit and used for leverage – AWESOME!
This AWESOME flood of new money into the global markets sent the Shanghai Composite up 2.77% this morning. Hang Seng is closed and Europe is closed but our markets are open and our Futures are up a bit but we'll short the Russell (/TF) yet again under 1,208.50 as it would be awesome if it fell back to 1,200 again and made another $850 per contract.
More Free Money finally woke gold up and it popped $25 overnight, back to $1,200 per ounce and silver is back over $16.20 and that's awesome because we're long on both. Oil is still just $56.20 with an awesome opportunity to go long on USO ($21.05) still available (we're already long through June – see Tuesday's post for our reasons why).
We're telling you how to get your own share of the FREE MONEY folks – they are just giving it away to rich folks like us who can afford to play the market. In our Long-Term Portfolio, for example, we're going to double down on our USO 2017 $23 calls, now $4 to bring our total to 50 long contracts. It would be awesome if USO just got back to $30, which have been the lows of the past few years – as that would drop $35,000 back in our pockets – a nice way to offset rising gas prices over the next couple of years.
Our entire Long-Term Portfolio has been awesome, up $83,690 as we prepare to close out the year but surprisingly dwarfed by the 60% gain in our Short-Term Portfolio, which we pair with the LTP to provide generally bearish balance as we navigate through the year. Both…
by phil - December 24th, 2014 8:23 am
Why it’s almost Christmas Eve, Mr. Scrooge!
The Global markets are closed tomorrow and we’re bound to have a very slow day – if you are looking for a Santa Clause rally on today’s trading, you are very likely to be disappointed. Today is a day for relaxation and reflection. Remember, the words of Jacob Marley, who said:
Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!
Marley was a man who worked and worked until the day he died and regretted it every day after. If you don’t believe in an afterlife and you don’t believe in leaving behind the World a better place than you found it, at least find some time for yourself so people don’t call you "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner" after you’re gone.
I was inspired by an old post on Barry’s site titled "Give and You Will Receive" listing 13 good ways we can all give every day.
by phil - December 23rd, 2014 8:17 am
I feel like I work at Pravda when I say "Markets are heading up this morning" – doesn't matter what's real, that's the news we're going to report. The crops are always new records, factory production is always up and the 5-year plan is always on track…
Nothing can be further from the truth than the Shanghai Stock Exchange, which opened down 2.5% flew back to positive and then decided to finish down 3% after all – manipulation failed for the day over there.
Problems in China are caused by their FAILURE to just lie back and accept the market manipulation going on on that side of the World. Goldman Sachs (GS) has been finally chased out of metals trading as a Senate subcommittee began examining their "alleged" manipulation of commodities and, over in China, the Securities Regulatory Commission is probing the same kind of index manipulation that is commonplace in our own markets.
Of course, if you want to see EPIC manipulation, you can't beat da boyz at the NYMEX, where they canceled all but 1,693 out of over 300,000 FAKE!!!! open orders that were placed in January, effectively shorting the US of over 20M barrels of oil in January.
Each contract represents 1,000 barrels scheduled for delivery to Cushing, OK, where the weekly inventory reports are tabulated and, by cancelling 99.4% of all the orders – the CRIMINALS at the NYMEX have deprived the United States of America of an economically vital resource in order to create an ENTIRELY ARTIFICIAL shortage of oil next month that their MEDIA LACKEYS will spin as an indication of demand increasing.
I'm NOT joking, this is an act of economic terrorism that is happening right now, in this country, that will affect YOU in two weeks (the first January inventory report on the 7th) and will drive up the price of oil through market supply manipulation followed by a propaganda campaign that will sucker people into taking long positions (off the hands of the Banksters who are currently…