by phil - January 10th, 2014 8:30 am
We're waiting on the Jobs Report.
I don't think it's going to matter, whether or not we employed more or less than the expected 200,000 new people in December doesn't matter as much as what we had to pay them. Hourly earnings are, so far, up 0.2% for the year and the average work-week for "employed" people is 34.5 hours and that's GOOD news for Corporation, who are spending 15% less per worker than they did in 2005.
Now, you may wonder how the workers feel about that but, if you do, then you are some kind of LIBERAL and you have to leave right now because this is a stock newsletter and we should care no more about the feeling of labor as we do about the feelings of a barrel of oil – the second biggest cost for our beloved Corporate Masters.
Of course, there are some Corporations that do own oil, and they do care about the price of each and every barrel they own, but there are no Corporations who own people (not legally, anyway) - so f*ck them, right?
Our current trickle down economic policy guarantees us a steady supply of cheap labor. Labor costs were, in fact, rising in 2007 but "accidentally" wrecking the economy wiped out over 9M jobs and, at an average of 100,000 jobs a month added since Obama took over in Jan, 2009, we've now added back 5M of them – leaving plenty of people still scrambling for work – so many, in fact, that Congress wisely decided that they are just lazy and cut off their unemployment benefits.
And, the best part is, we've replaced all those nasty high-paying jobs with cool low-paying jobs – leading to record corporate proifts – Yay Capitalism!!!
8:30 Update: And here's the number - just 74,000 jobs added, a 63% miss from what Economorons were estimating and the lowest positive figure since 1978. Will that tank the market? Hardly – because it means the Fed will have an excuse to give us MORE FREE MONEY!!! Again, we're buying stocks, we're capitalists, we don't give a crap if 126,000 people…
by phil - January 9th, 2014 8:21 am
That's it, I'm officially the last bear in America.
Well, according to the AAII Bull-Bear Sentiment Survey, anyway. In the entire 23-year history of this survey, there have never been more bulls or less bears and, as you can see from the ratio, it won't be long now before they track me down and shoot me – well, that's what it feels like to be bearish in this market.
I guess the people at Macy's are crazy too, they are closing 5 stores and laying off 2,500 people in the middle of the greatest bull market (sentiment-wise) in history. It won't hurt their stock, of course, which is up 30% from last year (along with the rest of the market) and, in fact, BMO Capital just gave them an upgrade because firing people is what American Corporations are all about these days.
We're still short in our Short-Term Portfolio, and painfully so at the moment but we ARE playing the technicals and we need to see the S&P confirm with a move over 1,840 and then 1,850 to match up with Dow 16,500, Nas 4,175, NYSE 10,400 and Russell 1,070 – as which point we are HAPPY to make more bullish plays.
Meanwhile, our last set of bullish plays is doing just fine. Aside from our 3 Trade Ideas for 2014, which were all bullish, we had our last 5 Bullish Trade Ideas on December 17th which followed up on November 25th's 5 MORE Trades That Can Make 500% in a Rising Market.
Needless to say (obvious from the chart), all of those trades are doing fabulously, even our ABXs have finally come on strong. The ten trade ideas from those two posts (and you can get trade ideas like this delivered to you daily with a PSW Subscription) were:
by phil - January 8th, 2014 8:24 am
1,825 or bust!
That's the deal today as we wait for the Fed minutes at 2pm. We already had the Fed statement back on December 17th, when the Fed announced a very light version of tapering along with a promise to keep rates near zero for at least another year.
That sent the Dow flying from 15,750 back to 16,500 (4.5%) and a 750-point run gives us the expectation of a 150 point retrace (20% – weak) to 16,350 or a 300-point retrace (40% – strong) back to 16,200 and, so far, 16,350 has held and that's a bullish sign for the Dow.
BUT, it's held on ridiculously low volume (see Dave Fry's chart) so it don't mean a thing until we see a proper test and it's hard to imagine what the Fed can say that would be worth adding to the 5% pop that's already been baked into these minutes – so I made the call to short the Dow Futures at 16,450 (/YM) this morning in our Member Chat Room.
During yesterday's Member Chat, we caught a nice move on the Russell. Aside from our usual Futures short (/TF) we looked at the option combo of buying the Jan $17 calls for .52 and selling the Jan $17 puts for .47 for a net entry of 0.05. That was at 11am and, by the time we were doing our weekly Webinar, at 2pm, that combo was at 0.25, up 400% in two hours. This is why we don't mind being mainly in CASH – you can make a Hell of a lot of money in this market by just deploying small amounts of your sidelined capital.
Also, keep in mind that CASH has gained 1.5% since we went to it over the holidays – that's something investors often lose sight of – cash is also an asset class that, sometimes, we want to get into when it's cheap. We had a situation where stocks were expensive-looking and cash was cheap, so we traded our stocks for cash – a very simple plan.
by phil - January 7th, 2014 8:16 am
It's only a little pullback – so far.
As you can see from Doug Short's S&P chart, we're having a modest pullback on increasing volume as things return to "normal" following the holidays. You can see why we elected to sit out the past two weeks – already the gains have reversed and we're right back to where we were just before Christmas, where we took the opportunity to get to CASH!!!
We've deployed that cash in a very profitable fashion with some great short-term plays, including last Thursday's short on oil. In yesterday's morning Alert to Members, which I also tweeted out at 7:30 am, my trade idea to short oil at $94.50 yeilded a nice $1,250 gain on the day as oil bottomed out at $93.20 with a stop out at $93.25. Those Alerts are usually sent out to our Voyeur and higher subscription levels. Though, for all of our Trade Alerts, you need a Premium Membership, of course.
Once the markets opened, my first idea for a Futures trade in Member Chat was shorting the Russell (/TF) at 1,160 and the Dow (/YM) at 16,450. The Russell fell to 1,142 for a $1,800 per contract gain and the Dow hit 16,340, up $550 per contract. When you can make quick moves like that off a cash position, what's the rush to get "back into" the market?
We haven't re-opened our USO short or SCO long positions as we're hoping for a run back to $95 on oil inventories (tomorrow, 10:30) where we can make a contrary play BUT, if oil hits $94.50 and fails again, we will take that short with tight stops. Meanwhile, the absense of short-term shorts leaves us long-term long with our Dec 2019 contract hedges - so let's hear it for the manipulators today!
Dave Fry's Transport chart shows us a little break-down in that sector, despite FDX's $2Bn share buy-back announcement. Dow theorists watch the Transports carefully, so we should too but part of this may be attributable to the storm conditions in the Northeast – so we're not going to read too much into it until/unless next week continues the trend…
by phil - January 6th, 2014 8:14 am
That thing is that the economy is the number one issue facing our nation. Just like it was when Clinton said it in 1992, when he first used the phrase in campaign to unseat Bush the 1st, it has been in 2004, 2008, 2010 and 2013 – the economy matters more, followed closely by Unemployment as a bi-lateral concern.
Presumably, from the way the stock martet behaved in 2013 – going up about 30% in a single year (as opposed to the 5 years it usually takes to gain that much), the economy must be booming – so why all the concern? Well, the simple answer to that is that the economy isn't benefitting the bottom 90% very much – from their point of view, things have not gotten much better at all. Not only that, but now we've cut off the Unemployment Insurance to 1.3M already struggling Americans.
As I noted in our Member Chat Room this morning:
As I said about that last week, screw those guys (from a top 1% perspective) because they only get about $1,200 a month so 1.3M of those lazy bastards losing their benefits is only $1.5Bn a month taken out of consumer spending – not a big effect – unless you happen to be one of those losers, then it's a life-changing effect but, hey, by the end of the year we save $18Bn, that's enough to paint an aircraft carrier – with the blood of those 1.3M of the families we're supposedly protecting…
Wall Street seems to have had a much better recovery than Main Street. Asset prices have responded vigorously while real wages have been squeezed. Inequality has been widening (see Free exchange). It is hardly surprising that voters have become discontented, with a surge in support for the populist right in Europe and plenty of partisan bickering in Washington. The combination of an angry electorate and nervous governments may lead to unpredictable policy measures--and an atmosphere that is hardly helpful to either business or investor confidence.
by phil - January 3rd, 2014 8:17 am
Wheeee, what a ride!
Those 10 Oil Futures (/CL) contracts I mentioned as a short in yesterday's morning post gained another $23,000 during the day as oil plunged back to $95.50 – not a bad pick for the first post of the year. We set our stops at $95.80 to lock in gains and we already took our USO puts off the table as they were up 100% and we hate to be too greedy, though we're happy to re-enter them if they get cheap again.
We still have our SCO (ultra-short oil) plays in place, to take advantage of a proper break-down. They had a longer time-frame so we chose to leave them active as we feel USO will be well below that $33 line ($92.50 oil) but, as Dave Fry notes in his chart, inventories are today and anything can happen.
The Nikkei is another Futures play (/NKD) I've been banging the table on, shorting them whenever they go over the 16,300 line and we got the big pay-off yesterday, as the index fell all the way down to 15,900 for a lovely $2,000 per contract gain. Don't worry if you missed that one, this index is like a yo-yo!
As I reminded you yesterday, when we added 2 more trades for 2014, our big trade idea for 2014 is AAPL and, this morning, Cantor's Brain White agrees with me and makes it his top pick for 2014 as well. White declares Apple's valuation (just 9x his calendar 2014 EPS estimate exc. cash) "remains depressed," and predicts "new product innovations" will help it return to growth after posting its first EPS declines in a decade. He also expects Apple, which opposes Carl Icahn's buyback proposal but says it's still weighing cash-return options, to return more cash to shareholders in 2014.
We were actually hoping AAPL would take more of a dip and give us a cheaper entry, but White may have screwed that up for us by re-ignighting excitement in the stock. Oh well, there's bound to be other fun things to buy. CLF, for example, went down a bit yesterday but ABX (also…
by phil - January 2nd, 2014 8:00 am
Happy New Year!
We ended 2013 with a bang. As you can see from Dave Fry's SPY chart, the last hour was all window-dressing but we couldn't quite get to 1,850 on the S&P, closing at 1,848.36 for the year, up 29.1% in 12 months, which was a big 7.5% behind the small-cap leadership of the Russell, which finished the year officially at 1,1656,64, up 36.6% or an average of 3.05% each and every month of the year!
If we take just $100,000 and compound it at a rate of 3.05% per month for 10 years, we get $3.64 MILLION Dollars. 10 years later, it's $132.7M and 10 years after that, we have $4.8Bn so, if you want to be a multi-Billionaire in 30 years, just put $100K into the Russell and go fishing, I suppose.
That's what the Pundits and Financial Advisers are telling you when they say last year was "normal" or that we have a "new paradigm" and it's OK to chase performance, despite the fact that history has shown us, over and over and over again – that it's usually not. My very simple investing premise for 2014 is to buy the worst performer of 2013, which is gold, which fell 28.2% for the year. It seems to me that if everyone who has $100,000 today and sticks it into an index fund has $4Bn in 30 years, they might choose to buy something shiny for their spouse down the road.
As we noted on Tuesday, there are 373M people in the World with more than $100,000 today and they average, if you include the top 29M (the top 0.4%) they average $491,689 each so, by bullish market logic, they should have an average of $23.8Bn each in 30 years and that's $8.87 QUADRILLION or 40 times more money, just for the top 5%, than there is TOTAL in the World today.
So, if the markets are going to continue to go up, I humply submit that there MAY be just a little more inflation on scarce things that rich people like to buy. Stocks are one of those things, of course and art and, of course, GOLD! Between now and the time our 3D printers…
by phil - December 31st, 2013 8:43 am
Will it be a happy new year?
Hard to imagine it being happier for the markets than 2013, with the indexes closing at record highs and investor optimism nearing 80% bullish – as good as it's been since October of 1929 – just day's before the crash. Earnings were also looking great in 1929 and the gap between the top 1% and the bottom 99% had never been greater – until now.
That's another record we've shattered in this trickle-less rally, wealth disparity is at an all-time high. The top 10% are partying like it's 1999, and why shouldn't they? The top 10% control 83% of the country's financial wealth, 50% more than they did in 1929 and the next 10% have 12%, leaving 5% for the bottom 80% to share.
There's no use complaining about it, these are the conditions we're living in (well, that's what we like to say to the bottom 80% – to keep them from revolting!). If the prevailing social condition is slavery and the average white plantation owner has 200 slaves, then we should buy stock in the plantations, right?
That's what we do when we play the markets, there was a brief fad of "social-conscience investment funds" but, of course, they underperformed and no one wanted them and they died a quick death. There are, in fact, just 29M people in the World who have more than $1M and only another 344M people who have more than $100,000 in assets. Between them, these 373M people, just 5% of the World's population, control 82.4% of the World's assets.
That's US and, believe me, you do NOT want to be one of THEM. You may think you can live fighting with the bottom 90% for your share of the remaining 17.6% but, essentially, it's like permanently moving to Survivor Island – and you've seen that experience break down even the strongest of people. Even the poorest Americans are typically in the top half of the global wealth dung-heap and the poorest Europeans as well – the rest of the world suffers beneath us all.
by phil - December 30th, 2013 8:14 am
One pill makes you larger
And one pill makes you small
And the ones that mother gives you
Don't do anything at all
Go ask Alice, when she's ten feet tall – Jefferson Airplane
Things are indeed getting surreal.
Appropriately, surrealism began in the 1920s, at the time of another great stock market bubble and was marked by representations of illogical scenes, often pasted together using everyday objects in unusual settings.
As noted by Dave Fry on his NDX chart, who'd have thought we'd be back to those "ridiculous" levels at Nasdaq 4,000 just 13 years after "learning our lesson"? Of course, the Nasdaq marched on to 5,000 before there was any actual lesson to be learned so we need to swallow our pills and go along for the ride if the Fed is intent on dispensing more psychotropics to keep us all tripping in 2014. While we're tripping, by the way, we can relax and get our brains washed by the Mainstream Media:
Do you think this is funny? This isn't funny, folks – this blatant example caught by Conan is, as he says, frightening. These are the kinds of messages that are placed in the media every day that are aimed at our spouses and our children and our parents – who may be a little more sucsceptible to these Corporate Messages. Everyon worries about the NSA LISTENING to them but no one ever worries about what's being SAID to us. This stuff is supposed to be "news"…
The news is nothing more than a script written by the powers that be as we prepare to celebrate New Year's Eve of 1984+30 and, of course, the so-called "Financial Media" is nothing more than a propaganda machine aimed at whipping viewers into a buying frenzy that retailers…
by phil - December 27th, 2013 7:23 am
1.3M US Citizens get cut off tomorrow.
That's right, we're finally pulling the plug on those lazy, unemployed leeches that have been draining $300M a week from us job creators (though, obviously, we didn't create jobs for them!). That's $15.6Bn a year – enough money to pay for 3 nuclear submarines! And what's more important to America – feeding 1.3M families (1% of the workforce) the week after Christmas or having 1% more submarines in our fleet? The choices couldn't be more clear for our Congress!
This is a real, substantial victory for our Repbulican way of life. Clearly a lack of jobs is not the fault of the system that has exported over 3M jobs overseas in the last decade alone but a failure of the weak, who didn't work hard enough or pray hard enough to make the cut. Come on, we all know one of them, the so-called "unemployed," who have been sucking at the Government teat for too long, when all they have to do is get off the couch and go back to work!
As the great and powerful Ronald Reagan once said: "Unemployment insurance is a pre-paid vacation for freeloaders." Moderate Republicans urged Boehner and House Majority Leader Eric Cantor (R-Va.) to rescue jobless benefits for the longterm unemployed earlier in December, saying the issue was "important to many American families." But Boehner would only consider the proposal if cuts were made elsewhere and job growth guaranteed, and the measure ultimately did not make it into Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan's (R-Wis.) budget deal.
"Speaker Boehner and fellow Washington Republicans are hopelessly out-of-touch, and their decision to Scrooge over a million unemployed Americans three days after Christmas is the latest and among the worst examples of it," Jeremy Funk, communications director of Americans United for Change, said. "All these struggling Americans got from the GOP for Christmas was a ‘Get Employed Soon’ card."