Posts Tagged ‘XRT’

Monday’s Mixed Signals – Time to Dress the Windows?

SPY DAILYWheeee, what a ride!  

We're up, we're down and over and out – but That's Life in the markets, right?  Life is being good to our Short-Term Portfolio, now up 59.2% for the year as we caught the bearish move very nicely.  Because our STP was up, we have, so far, been able to ride out our long-term positions but we're certainly concerned about a major breakdown possibly in the works.  

As noted by Dave Fry in his SPY chart, that 50 dma is a big point of contention now and of course we're going to get a bounce off a line like that.  In fact, the new lows we hit at the end of the week led us to recalculate our bounce lines for this week and now we are looking for:

  • Dow - 17,000 (weak) and 17,100 (strong) 
  • S&P  1,975 (weak) and 1,985 (strong)
  • Nasdaq 4,475 (weak) and 4,500 (strong)
  • NYSE  10,760 (weak) and 10,820 (strong)
  • Russell 1,125 (weak) and 1,140 (strong)

SPY 5 MINUTEWe weren't too convinced by Friday's low-volume rally and we aren't going to be convinced by anything that happens on the last two days of the month (window dressing) but clearly any failure of those weak bounce lines is going to have us racing back to some bearish bets into the start of October (and earnings season).  

Speaking of earnings - the CEO of Macy's, Terry Lundren is not too enthusiastic about Q4.  After…
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$1,500 Friday – Yesterday’s Futures Play Pays Big!

That's $2,200 in two days playing with us!

Not bad for free picks, right?  On Wednesday, we played the Nasdaq Futures (/NQ) short at 4,100 and those gave us a nice, $700 per contract gain in just a few hours.  Yesterday, we reviewed that trade idea right in the morning post (which you can have delivered to you every morning, pre-market, by SUBSCRIBING HERE) and I added:

That's why, today, right now, we are once again shorting the Futures at 17,100 in /YM(Dow) and 2,005 on /ES (S&P) and 1,175 on /TF(Russell).  Yesterday we shorted the Nasdaq(/NQ) at 4,100 – a trade idea I outlined in the morning post for our subscribers – and that trade made $700 per contract by noon.  Not a bad day's work, right?  

SPY 5 MINUTEFutures trading is a useful skill as we can make adjustments to our trading almost anytime we get some new information – even when the market is closed.  

We played bullish on Draghi fever early in the morning and then, in our Live Member Chat Room, at 10:35, we nailed the turn for a re-entry at 1,180 on the Russell (/TF Futures), 17,150 on the Dow (/YM) and 2,010 on the S&P (/ES) as well as $95 on oil (/CL) and we were rewarded with moves down to 1,160 (+$2,000 per contract), 17,025 (+$625 per contract), 1,990 (+$1,000 per contract) and $94.25 (+$750 per contract).  

As I said yesterday, we can make trades like this because the market is RIGGED and we understand how it's rigged, which enables us to play along and profit from the manipulation.  We don't like it, we don't endorse it but, since it happens every day – we may as well bet on it, right?  

Of course there are other ways to make money on pullback and we teach those as well at PSW. Here's a couple of trade ideas we had for our Members
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Friday August Finally – Dressing that 2,000 Window

Saved by the bad news!  

August has been a spectacular month in which we ignored the most bad news ever ignored by a species that is still not extinct.  With any luck, an asteriod will head straight for us next month and we can rally the markets another 5% in anticipation of more Fed easing on impact.  The asteriod struck the other side of the Earth this morning as Russia Invaded Ukraine and Euro Zone Inflation plunged to 0.3%, miles below the 2.0% target considered "healthy".  

This is, of course, GREAT NEWS, because it means Super Mario is free to go ahead and do something – like he always says he will do but never does.  That doesn't stop people from believing it because they WANT TO BELIEVE – they want to think someone is going to save them and make all their hardships go away.  11.5% of the people in Europe are still out of work, double the rate in the US.  Over 25% of the people under 25 are out of work, about the same as the US.  These are horrific figures – of course people are eager to hear the words of a potential savior.  

Since it's Friday, we're not going to debate the merits or discuss what a farce it all is – we've done that this week.  Today we'll talk about making money.  

On Tuesday, in the morning post, I suggested the TNA Sept $72.50/76.50 bull call spread at $2, selling the Sept $68 puts for $2.  10 of those would not have cost you a penny (since it netted out to $0), though about $7,500 in margin on the short puts.  Today the spread is $2.50 and the short puts are $1.15 for net $1.35 or +$1,350 in 3 days, which is an 18% gain on the committed margin despite the fact that TNA has essentially gone nowhere.

I don't point this out to brag, we have plenty of trade ideas that have done much better – I point this out because it was a free trade idea, right in the morning post which anyone could have done and it…
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Thrilling Thursday – Rejection at S&P 2,000

SPY 5 MINUTEOh my God, it's dip!  

The Futures are off a bit today and that's no surprise to those of us who have been paying attention to the volume, or lack thereof, as we made our final approach at the 2,000 line on the S&P 500.  Jim Cramer was literally foaming at the mouth this week as he and his CNBC co-conspirators herded the sheeple into the markets to participate in the tail end of the rally, where the suckers could hold the bags for their Corporate Masters.  

Why am I angry at Cramer today?  Because yesterday he committed the same crime he commtted in 2008 that cost so many people their life's savings – he told people not to sell their stocks on a pullback.  "Don't take profits" is the message for the viewing public.  But, I would ask, if people don't take profits – when will they ever get profits?  What kind of stupid message is that?  Well, it's the message that leaves you holding the bag while his hedge fund buddies head for the exits.  It's not much different than telling one group of people not to leave a burning building while you make sure all your friends are getting out safely.

"This is not just my opinion. I can prove it to you empirically. See, as I was preparing to write my book "Get Rich Carefully," I went over the previous five years of trades made by my charitable trust. And as I reviewed those trades I noticed that far too often, my good judgment would be overcome by excessive skepticism."

If the "proof" Jim is talking about is his Action Alerts Plus, then I'd say you really should think long and hard about following his advice here (via Kirk Lindstrom – who does compete with Cramer):

Jim Cramer's Action Alerts Plus Performance & Returns

I guess, sure, Jim legitimately should regret that he wasn't more bullish from 2008 to 2013, when the market popped 200% and his trust gained about 100% but don't you think the lesson Cramer should be taking from that experience is to CUT YOUR LOSSES, not
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Which Way Wednesday – Japan’s GDP Plunges 6.8%

MORE FREE MONEY!!!  

That's all this chart says to traders this morning, who are taking the European Markets up over half a point this morning and are goosing our Futures by half a point as well as bad news is good news and TERRIBLE news is even better in this Central Bank-sponsored market.

Private Consumption in Japan fell 5% in April, May and June and wages dropped 1.8% while sales taxes rose 3% and – PRESTO – there's your 5% decline in Private Consumption.  

Obviously, giving the workers more money is out of the question in a Conservative Capitalist Economy like Japan and we're certainly not going to tax Corporations when we can raise sales taxes that disproportionately target the poor instead so the only solution is:  MORE FREE MONEY!!!

Japan has increased their monetary base by 50% since last year and this year they are on track to add another 25% to pump it up to 270,000,000,000,000 Yen.  In March of 2000, there were just 50Tn Yen in circulation so a 5x increase in the money supply and NONE of it ended up in the hands of the bottom 80% who, just like in America, saw their standard of living DECREASE over the past decade and a half.  

It's a great race to the bottom in annual GDP growth overall as essentially all of the economic gains in Japan and the US accrue to the top 10% (people and corporations) while the bottom 90% circle the drain on the "Road to Serfdom" that Hayek warned us about 70 years ago:

“It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it. Yet it is this support of the tendencies toward monopoly which make them so irresistible and the prospects of the future so dark.

"If we face a monopolist we are at his absolute mercy. And an authority directing the


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TGIF – Slip and Slide Week Comes to a Close

Wow, that was a close one!

We ALMOST had a correction but, fortunately, dip buyers prevailed and we pulled a sharp reversal right after the bell yesterday and finished the day only down about 0.4% and about 2.5% down for the week (so far).  

I do hate to be nit-picky about these things but – can we REALLY call it a reversal when, in fact, declining volume on the NYSE was 2,275,176,430 while advancing was only 834,544?  

That's 3:1 declining!  In fact, of the 3,241 shares on the NYSE, only 964 were positive yesterday – also 3:1 against.  The same on the broader Nasdaq too.  

SPY 5 MINUTEIn fact, yesterday was a complete catastrophe other than the low-volume "rally" from 10am to 2pm, with the other 75% of the day's volume being all downhill from 9:30 to 10:00 and again from 2pm to close (4pm EST).

Still, as the great President Bush once said: "fool me once, shame on — shame on you. Fool me — you can't get fooled again.

Of course, an even greater President, Lincoln (who had himself shot when he found out he was a Republican) actually said that you can, indeed fool some of the people all of the time and the stock market is certainly evidence of that, as dip buyers rush in on anything that even looks like it might be a rally – no matter how much of a charade it actually is. 

RUT WEEKLYYou can see our predicted 1,150 line come into play on Dave Fry's Russell Chart but it doesn't show that the Russell Futures made it all the way down to 1,140 before being jammed back to 1,165 and, finally, settling the day at 1,160.

As Dave points out, we're still down 4% for the weak week and all yesterday's action really was was a WEAK bounce off a 5% dip (1,200 to 1,140), which is EXACTLY what our 5% Rule™ predicted would happen.  

Those TZA August $14 calls I told you about on Tuesday, when they were .91, topped…
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Synthetic Put Bearish On Constellation Brands

 

Today’s tickers: STZ, PETM & XRT

STZ - Constellation Brands, Inc. – A large stock and options combination play on wine, beer and spirits producer, Constellation Brands, Inc., appears to be a synthetic put on the name that benefits from bearish movement in the price of the underlying in the near term.Shares in STZ, up roughly 80% since mid-June 2012, are currently down 1.1% on Monday afternoon to stand at $35.24 as of 12:05 p.m. in New York trading. The hefty transaction in STZ options today pushed overall options volume to a level well above the stock’s average daily options volume of around 13,100 contracts. The largest transaction in STZ options appears to be the purchase of a 20,000-lot Feb. $37.5/$42.5 call spread for an average net premium outlay of $0.75 per contract, tied to the sale of STZ shares at $34.80 on a 25.5 delta.The synthetic put position is a bearish strategy that prepares the trader to profit from declines in the price of Constellation Brands’ shares through February expiration.

PETM - PetSmart, Inc. – Shares in the specialty retailer of products and services for pets and their owners are in negative territory on the first trading session of the week, down 1.0% at $67.50 as of 11:30 a.m. ET on Monday. A sizable bearish options strategy initiated on PetSmart today suggests one trader is bracing for shares to potentially extend declines during the next few months. It looks like the strategist purchased a 2,000-lot April $60/$65 put spread for a net premium of $1.80 per contract. The bearish position starts making money if shares in PETM decline 6.4% from the current price of $67.50 to breach the effective breakeven point at $63.20. Maximum potential profits of $3.20 per contract are available on the trade in the event that shares drop more than 11% to settle below $60.00 at April expiration. PetSmart’s shares last traded below $60.00 in May 2012.

XRT - SPDR S&P Retail ETF – The…
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Finally Friday – Maybe Tomorrow the Markets Won’t Fall

Falling, falling, falling

That's all the markets have been doing lately.  As you can see from our Big Chart – it's been a pretty orderly sell-off according to our 5% rule with roughly a 4-5% drop during October with some consolidation, followed by a much steeper 4-5% drop after the election.

We're back to the point where we expect resistance at an 8% total drop as well as some bounce action where once again we'll be measuring for strong or weak bounces to determine whether or not we can get a turn again (our indicators kept us bearish last time).  Regarding the current action, I said to our Members yesterday in Chat:  

I think there is a lot of selling as people take capital gains while they can.  I think that it's very possible that it's going to be very difficult to get a proper rally into the end of the year because there are plenty of people waiting for a rally to take their gains, whether through timing or position.  The problem with this state of not knowing is it becomes prudent for people to hedge for the worst and, if someone had a 20% gain for the year and now it's 15% and they can take it off now and keep 12.75% (after 15% tax) vs possibly hitting another 5% drop and running down to 8.5% this year or possibly 7% (at 30%) if they wait until next year and there's no recovery (and the more the cliff looms the less likely recovery seems) then it almost doesn't make sense not to take the 12.75% and run.  So that's very possibly the selling pressure we see and it may continue to be relentless into the end of the year unless there is some sort of resolution or delay to the cliff. 

While we don't think the Fiscal Cliff will end up being a big deal – that doesn't stop others from panicking.  This week we've been scooping up positions they have been running away from but, if we're going to have another leg down – we'll be needing those disaster hedges (see Wednesday's post) to keep us out of trouble.  It doesn't take much to profit from a downturn, fortunately, when we use good hedges.  On Wednesday I suggested the TZA April $17/24 bull call spread for $1.40, selling the $14…
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Monday Market Movement – More Mario Momentum?

SPY DAILYSo, where's our stimulus?

Like good little Pavlovian dogs, we ran back into the markets last week when Mario Draghi rang the stimulus bill – increasing the $60Tn global markets by 5% – that's $3Tn of valuation added in 48 hours on the say-so of a former GS executive that has been put in charge of the European Central bank.  What could possibly go wrong with this scenario?  

If we can't trust the Investment Bankers who are taking over our Government, who can we trust?  So we'll assume that everything WILL be fixed this week and that the ECB, Fed, PBOC, BOE, BOJ and all the little Central Banksters will be pumping enough money into the system to justify a $3,000,000,000,000 increase in Global Equity prices – even though that means, at an average p/e of 15, that all this expected stimulus somehow drops an additional $200Bn to the bottom line of Big Business to justify the bump in valuation.

How many Dollars, Yen, Euros and Yuan do we have to give to Corporations to turn into $200Bn?  Well, if it's AMZN – the answer is $15Tn because it takes $50Bn in sales for AMZN to make $600M so figure 75x in sales to make 1x in earnings.  Why use AMZN?  Well because AMZN is almost 5% of the Nasdaq and it was their amazing run last week, on what rational people would consider poor earnings, that reversed the downtrend initiates by AAPL's (who are 15% of the Nasdaq) miss.  

AMZN WEEKLYI guess it's obvious why we're short AMZN (see Dave Fry's chart) but let's look at AAPL now, who are quite a bit more efficient at dropping Dollars to the bottom line.   Last year, AAPL took in $108Bn and made a profit of $26Bn – now THAT'S a good company!  So let's pretend that all companies are as good as AAPL and nowhere near as bad as AMZN at converting sales to profits.  

Now to get that additional $200Bn in Corporate Profits we only need about $800Bn in stimulus – assuming, of course, that money actually went to people who would spend it and not to Banksters who are still trying to back-fill multi-Trillion Dollar holes in their mark-to-fantasy balance sheets.  $800Bn is a doable number so let's pretend it is enough to justify a 5% bump in the market and now we know
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Tut Tut Tuesday – Still No Rain

Tut, tut, it does not look like rain.  

You would think the worst drought in 80 years would merit more than the occasional mention in the Financial media – I've seen CNBC do one-hour specials on the marijuana crops so you'd think actual FOOD would maybe make it a little higher on the list of concerns for the MSM – especially when we are experiencing the worst drought of the past 80 years and the last one that was this bad led to a Global Depression (along with, of course, National Debt Crises and Financial Failures but mission accomplished there already).

You would think the drought has somehow fallen into a Somebody Else's Problem Field, where individuals/populations of individuals choose to decentralize themselves from an issue that may be in critical need of recognition. Such issues may be of large concern to the population as a whole but can easily be a choice of ignorance at an individualistic level.  As Douglas Adams explains in The Hitchiker's Guide to the Galaxy:  

An SEP is something we can't see, or don't see, or our brain doesn't let us see, because we think that it's somebody else's problem…. The brain just edits it out, it's like a blind spot. If you look at it directly you won't see it unless you know precisely what it is. Your only hope is to catch it by surprise out of the corner of your eye.
The technology involved in making something properly invisible is so mind-bogglingly complex that 999,999,999 times out of a billion it's simpler just to take the thing away and do without it……. The "Somebody Else's Problem field" is much simpler, more effective, and "can be run for over a hundred years on a single torch battery.
This is because it relies on people's natural predisposition not to see anything they don't want to, weren't expecting, or can't explain.

Various areas of psychology and philosophy of perception are concerned with the reasons why individuals often ignore issues that are of relative or critical
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News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Hedge Fund Billionaire Paul Singer: If Trump Agenda Fails, a Recession Could Follow (Fortune)

Market watchers who thought the stock market would drop if Donald Trump were elected were burned following his win: markets rose to new highs instead.

U.S. inflation path since 2012 is worrisome, policymaker says (Reuters)

The current level of U.S. prices is noticeably lower than what it would be if the Federal Reserve had delivered on its 2-percent inflation target, St. Louis Federal Reserve President James Bullard said, calling the trend "worrisome."

...



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Zero Hedge

Intelligence Agencies Admit 23,000 Jihadis Live In Britain; 3,000 Pose "Imminent Threat"

Courtesy of ZeroHedge. View original post here.

After failing to thwart two terror attacks that have occurred in the U.K. so far this year – both of which were carried out by suspected jihadis who were known to U.K. authorities – intelligence agencies have identified 23,000 potential jihadis living in Britain, according to a report published in the Times of London on Saturday. 

The report emerged after U.K. Prime Minster Theresa May downgraded the terror...



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ValueWalk

Is Jared Kushner The Downfall Of The Donald Trump Presidency?

By Polina Tikhonova. Originally published at ValueWalk.

Is Jared Kushner the middleman between Russia and the U.S. responsible for Moscow’s alleged meddling in the 2016 election? The FBI is investigating Kushner’s meetings with Russian officials, as the son-in-law of U.S. President Donald Trump and arguably one of the most influential White House advisers has become a person of significant interest in the Russia probe.

OpenClipart-Vectors / Pixabay

Politico calls Kushner a “shadow secretary of state” in the Trump administration. There have been reports ...



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Digital Currencies

Bitcoin Is Crashing (Again)

Courtesy of Zero Hedge

While Bitcoin is still up 13% on the week (its 8th weekly ruse of the last 9), the dollar price of the virtual currency is collapsing again in US trading (after a big rebound during the Asian session)...

Just as with yesterday, there is no immediate news catalyst for the flush.

Meanwhile, the huge arb with South Korea bitcoin pricing remains, and as of this moment is still nearly $1000.

Today's drop ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

U.S. stocks scale new peaks on retailer results; oil falls (Reuters)

Two top U.S. equity indexes scaled record peaks on Thursday after strong earnings reports from retailers, outpacing European shares which were little changed, while oil prices plunged after top crude producers extended output cuts for a shorter period than expected.

Hedge Funds Squeezed by World's Highest Rents Are Moving Out (Bloomberg)

Benjamin Fuchs raised eyebrows five years ago when he opened his hedge fund next to a place selling live chickens in Hong Kong’s hustling, bustl...



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Chart School

S&P Breakout on Higher Volume Accumulation

Courtesy of Declan.

While I expected the Dow Jones to be the breakout flyer, instead it was the S&P which led the charge on higher volume accumulation.  Technicals are all in the green with a return of the MACD trigger 'buy'.



The Dow did manage to break past 21,000 with a MACD trigger 'buy' but it's still contained by all-time high resistance at 21,200. The index is still well positioned for a larger breakout, but this is the sixth day of consecutive gains for the index so some pullback can be expe...

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Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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OpTrader

Swing trading portfolio - week of May 22nd, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Beyond just promise, CRISPR is delivering in the lab today

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Beyond just promise, CRISPR is delivering in the lab today

Courtesy of Ian HaydonUniversity of Washington

Precision editing DNA allows for some amazing applications. Ian Haydon, CC BY-ND

There’s a revolution happening in biology, and its name is CRISPR.

CRISPR (pronounced “crisper”) is a powerful technique for editing DNA. It has received an enormous amount of attention in the scientific and popular press, largely based on the promise of what this powerful gene e...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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