Weekend Reading: Did The Grinch Steal Christmas?
by Zero Hedge - December 14th, 2018 4:25 pm
Courtesy of Lance Roberts, Real Investment Advice
On Tuesday, we put on a small S&P 500 trading position for an oversold bounce. At first, it didn’t work and we were almost stopped out, but a late day rally kept us in the position.
Wednesday was a different picture as stocks rocketed out of the gate on more “trade talk” news with China, but that rally faded as well heading into late day as the owner of the “National Enquirer” was granted immunity in exchange for details on another Trump-related “hush money” payment.
Yesterday, the markets struggled out of the gate as economic data pointed to slowing rates of inflationary pressure and economic growth, fell into negative territory, and then ended the day flat.
This morning stocks opened down as concerns of global economic weakness rose from China.
So far, the “Santa Rally” has failed to appear and traders are beginning to wonder if they are on the “Naughty List” this year? With all of the rhetoric over trade, White House shenanigans, and weak economic data, it certainly would seem to be the case.
But, it may actually be more of the “Grinch (aka The Fed) That Stole Christmas” this year.
While the Fed’s rate hikes do indeed raise borrowing costs and slow economic growth, it is the extraction of liquidity from the markets which is most important. As shown in the chart below, the Fed is now reducing their flows by $50 billion each month. This is in direct contrast to the billions they were injecting previously which corresponds with the markets decade-long bull market despite weak revenue growth due to a sluggish economic expansion.
But it is no longer just the Fed. On Thursday, the European Central Bank made two important announcements.
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They will stop adding to its stock of government and corporate bonds at the end of December, and;
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They are seeing signs of weaker inflation and economic growth.
In other words, as world markets are beginning to struggle as the driver of the decade-long bull market is being removed.
But yet, despite the market turmoil this year, which certainly got investors attention, the debate has…
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Phil thanks. You never cease to amaze me with your thoughtful perspective on a myriad of different issues and challenges. It's kind of an embarrassment of riches since I joined this board a few years back. The ride from Dow 9,000 or was it 8,000? up to Dow 15,000 seems hard to believe. I wish I could have it all over again, except with the capital I have now.
Winston
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Phil, Thanks for the long calls@ $ 85 on AAPL. A quick $4900. Paid for my subscription!!
Newthugger
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I've recently done exactly what Phil described. I upgraded my ability to trade the IRA acct. by transferring acct. from TDA to TOS. TDA would not allow spreads; TOS does. Neither will allow naked options. With spreads I am able to buy calls or puts several months out then sell front month calls or puts over and over. This allows me to collect premium, which is, of course, the goal. This wasn't an original idea. Phil put me onto it. Since the transfer I've substantially increased my performance in the IRA!
Iflantheman
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Thanks, Phil!!! I just crushed today with it with silver (SLV) calls today, thanks to your persistent reminders of how ridiculously cheap it has become, and watching my TSLA this week $240 puts dissolve into chump change added an extra note of amusement.
Zeroxzero
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Well I want to thank P. Davis for his style and for the fact that he affirmed my thoughts for a correction. He was right and his confirmation of my bias saved me thousands. Mr. Davis is amoral when it comes to money. He realizes the poor are screwed but we must fight to win. A measure of sarcasm and dark humour and it is great reading. 100% right on the correction.
Chaffey
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I have been reading the "free" PSW for about a year and have always liked Phil's style as it closely resembled the way I like to trade (mostly naked put options). I have been a paid subscriber for about 5 weeks and I have been learning a lot from Phil and other members. I had made some money on Phil's "free" ideas in the past and I joined because one of Phil's futures ideas paid for my subscription within the same day (NG). Phil deserved my subscription and I was eager to learn more. I just did a quick tally and within the last 5 weeks the ideas that I chose to follow from Phil generated over 25K in options profits and 12K in futures profits (some of my trades were more conservative than what Phil's had suggested). I have a lot to learn, experience and confidence to gain. Thanks again Phil and Successful Trading to all.
Verreaul
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Peter D, Just a note of thanks. Eight weeks ago, I entered my first RUT strangles, when the RUT was at 625. Tomorrow, I will let them expire, with the RUT at 625 (give or take). I didn't care when the RUT went to 650, nor when it dropped to 590. Easiest, no touch money I've made in a long time.
Judahbenhur
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I am a Registered Nurse, so is my wife. We work hard to take care of seven kids that are the joy of our lives. The cost for a basic membership is ALOT from our our monthly budget of spending and saving…but well worth it! Phil has allowed me to really ramp up the savings we put away for our children's college funds and our retirement.
David
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I'd like to wish Phil and everyone else that contributes to this board a very Merry Christmas and happy New Year. The wealth of knowledge on here is incredible, and it has greatly contributed to my understanding of markets, politics, and the world in general. This year was when Phil's teachings all seemed to click in place, and my portfolio's performance shot up, and for that I am very grateful. Thank you!
Palotay
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Phil – just wanted to say a sincere thank you for teaching me how to offset, hedge, roll, and not panic. My account is up 10% in the last two weeks, and far from panic, this is becoming great fun. Thanks again,
Deano
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Phil.... I remember back in March of '09, you stated " Unless you think the country is going to hell in a hand-basket, NOW is the time to do your buying". Do you remember ? I took your advice, and bought leap $2.00 calls on F, approximately 200,000 shares using the options, for just pennies. Now that was the best Ford I ever owned.... made over $1 mil - thanks go to you Phil. I now drive a Mercedes but still "love" the Ford.
1234Gel
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Phil – Great calls yesterday, you were in top form. As I was reading your postings, I had hindsight of what the day brought. The calls were uncanny!
Jfawcett
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My watch list looks like a grid where Phil's recommendations went UP and everything else went DOWN! It looked something like an ad for Philstockworld. I am half in cash, followed the recommendations (AAPL TASR YHOO) on a 20K portfolio and still up 1% for the day. Thanks!
Sn0gr00ve
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Hi Phil, Thanks for the free disaster hedge ideas. I implemented variations of two of them on SDS bull call spreads and EEM bear put spreads (haven't done the TZA yet) and they really hedged my short term longs nicely today. Makes it seem a lot less like gambling. You are the man (of the people)!
Howard Roake
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The wonderful resource that Phil has created for us and nourished by its members is so powerful in what it can teach us going forward, but also what we can learn from the past. I never say it often enough, but Phil – thanks for all the work you do for us.
Winston
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Blessings, ALL: So we have completed two months of 2015. So far it has been a good ride with my PSW all short put portfolio showing a 15.73% gain with $83K in profits harvested in 2015.
IHS4GOD
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Why were the analysts wrong? If I were a Japanese investor who purchased US stocks prior to November at Y80 yen to the dollar, with the US market up an average of 15% or more and upon selling the asset I covert dollars to Yen, also realizing an additional 25% gain (one dollar now converts to 100+ Yen rather than the 80 I used at time of purchase), I think I would be unloading US assets also. But analysts never do the math in their articles nor very rarely bring up or discuss the ramifications of currency fluctuations. I don't include Phil in this group as this is a valuable lesson I am learning from him.
Denlundy
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Joined last year and and started profitably trading options thanks to everything I have learned here. THANK YOU!!
OnWisconsin
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Phil, I have to hand it to you. It seemed that you were the only person on the planet that thought stocks falling was still possible. I am glad I listened. About the end of the year I was really beginning to second guess though. Thanks for suggesting taking some profits last Nov. It no longer looks like I missed much.
rj_jarboe
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I have been here for 8 yrs, and find it the best service out there. There are more eyes on the market in this forum than anywhere, and opinions abound. So, relax, and let the group help you out.
Pharmboy
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WOW!!!!!!!!!!!! How will I ever do anything else in my life that will compare to the wild ride you get trading an ultra etf in the most volatile sector in the stock market the day before option expiration?
Matt1966
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As a retired stockbroker from a major Canadian brokerage firm, I can tell you I would never had access to these type of trade ideas, especially the hedges. Just closed out a July TZA 40/45 call spread today for a 271% gain in less than a month. I would have normally let that run but yesterday Phil commented to another member something to the effect that "you put down a $1 for a $5 upside, now that you are up 250% you have $2.5 in and you are hoping for a double." Just closed out a USO July $38 put that Phil suggested yesterday for a 49% one day gain. Thanks, Bob
RJK
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Hey Phil - writing to thank you! First of all, and I know you have heard this a few times form some others - the portfolio updates you have done - with entries and targets and even margin reqs are invaluable! I find myself understanding what is done here IN THEORY most of the time..however, there is a much bigger difference in placing and setting up the hedges properly than just understanding…This has been eye opening for me and Ifeel like I just took a major step in trading during the last week.
Bcfla
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You guys gotta give it to phil–the voice of reason yesterday, last nite and this morning.
Corleone
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A truly great website with a lot of information for investors. Whether you are a novice, seasoned, or a professional there is a lot to be gained about stock options and options trading from this very informative website.
ZKatkin
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Phil - FAS - I dont know whether to be happier I averaged down and sold calls or that I got myself out of FAZ the other day…thanks for that help
BCFla
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I have been a member off and on for years. Using these techniques I do consistently beat the S&P 500. Phil's Stock World has been the most important site in my financial life. It's impact on me over the past years has been huge. As have my tax bills!
Knightpilot
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Thanks for the oil tip Phil: Bot & sold the USO May 29 calls for net $125. Not bad for few minutes work.
JWick1981
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Phil - I'm with you just little bit longer than a month and you can not imagine how happy I am now, and not just because my P/L improved ( and I'm sure that it will be even better), but I found that the worst thing in trader's carrier is a LONELINESS. Here I found so many bright good guys, I looked for this service for years. THANK YOU AND TAKE GOOD CARE OF YOURSELF BECAUSE I PLAN TO STAY HERE AND RIDE THIS CREASY MARKET WITH YOU FOR ANOTHER 20-30 YEARS
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Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
Newthugger
Faltering Friday – Poor China Data Ends the Week on a Down Note
by phil - December 14th, 2018 8:44 am
Now what?
China's Retail Sales were "only" up 8.1% in November, below expectations of 8.8% and below October's 8.6% gains and Auto Sales were a real disaster, with a 10% drop from last year, the worst result in 7 years while Industrial Output rose 5.4%, missing the 5.9% expected. Exports and Imports also slowed but, overall, China is still on track for their 6.5% GDP goal for the year – effectively getting the "soft landing" they had been looking for – trade war or no trade war.
“China’s economy, if it’s in trouble, it’s only in trouble because of me,” Donald Trump told Fox News in an interview on Thursday.
Meanwhile, US Retail Sales were strong at 0.2%, double the 0.1% expected and October was revised up to 1.1% from 0.9% so all is still well with US Consumers so I don't see any reason why we should be putting in new lows, which would be 24,000 on the Dow (/YM), 2,600 on the S&P (/ES), 6,550 on the Nasdaq (no way) though the Russell (/RTY) is testing 1,420 for the 2nd time in a week so that would be the best line to make a bullish bet at.
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Speaking of Futures trades, we got a nice move in Gasoline (/RB) yesterday that netted a lovely $7,634 gain on 3 contracts off the $1.42 line as Gasoline was getting stupidly low again, also testing the same bottom we played last week. It's often worth playing double bottoms for bounces – especially if you keep tight stops below the line so that your risk is far less than the potential reward – those are the kind of trade set-ups we like to look for in our Futures trades.
We also look for patterns and, so far, all of this week's pre-market moves have been erased and this morning, at 8:50 am, /YM is down 188 at 24,400 and that's a great line to play bullish off of as 24,400 should be good support and, if it isn't, then take a quick loss and try again at 24,000. The…
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The PhilStockWorld.com Weekly Trading Webinar – 12-12-18
by clarisezoleta - December 13th, 2018 9:22 pm
For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.
Major Topics:
00:00:22 Checking on Indexes Charts
00:12:49 EME
00:17:32 Euro Stocks
00:19:29 NLY
00:25:34 Compound Rate Calculator
00:35:48 Going through watchlist charts
00:42:07 FDX
00:47:00 Long Term Portfolio
00:48:38 Short Term Portfolio – MSFT
00:50:58 CELG
Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – click here to join us at PSW!
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Thursday Flatline – Markets Drift Weakly into the Weekend
by phil - December 13th, 2018 8:30 am
"Well we know where we're going
But we don't know where we've beenWe're on a road to nowhere
Come on inside
Taking that ride to nowhere
We'll take that ride" – T Heads
As you can see frojm they S&P ETF (SPY) chart, we haven't done much of anything since Monday's open but it has been an exciting week as the S&P has had a 100-point trading range (4%) but each of these exaggerated moves in the Futures, whether up or down, seems to get dragged back to the middle once the real trading sessions (with volume) begins.
| Date | Open | High | Low | Close* | Adj Close** | Volume |
|---|---|---|---|---|---|---|
| Dec 12, 2018 | 267.47 | 269.00 | 265.37 | 265.46 | 265.46 | 97,760,100 |
…
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GE Soars 12% As ‘Biggest Bear’ Upgrades Stock To “Neutral”
by Zero Hedge - December 13th, 2018 8:11 am
Courtesy of Zero Hedge
A day after collapsing to the ominous $6.66 March 2009 closing lows, GE stock is soaring in the pre-market after long-time bear JPMorgan analyst Steve Tusa upgrades the company to neutral from underweight.
Citing the fact that the liabilities and “known unknowns” are better understood and priced into the stock price, Tusa (who has been a "sell" since May 2016) wrote that:
“We believe a more negative outcome on these liabilities (equity dilution, for one) is at least partially discounted, and it’s possible that the company can execute its way through an elongated workout that limits near-term downside,”
And that was good enough to juice the stock up 12% in the pre-market…
Still, he warned that a reset in free cash flow expectations may be necessary, even as it could provide a bottom for the stock.
Additionally, as Bloomberg reports, GE Digital said it would sell a majority stake in its ServiceMax cloud-based field-service software to Silver Lake and create a new industrial Internet-of-things firm with starting annual revenue of $1.2 billion.
As one wise old equity trader said to us on the news of another bottom-caller – "It can't get any worse… right?" – well it can still fall 100% more from here.
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Walmart Testing Flippy The Job-Stealing Robot Cook
by Zero Hedge - December 12th, 2018 11:05 pm
Courtesy of Zero Hedge
Walmart is testing out a new kitchen robot assistant named "Flippy" at its Bentonville, Arkansas headquarters in order to see if it might make for a valuable team member in its in-store delis, according to Yahoo! Finance.
While Flippy had somewhat of a rocky start at a Pasadena, California burger joint – having to be taken offline after its human co-workers couldn't prepare patties fast enough, the robot has had more recent success flipping 17,000 pounds of chicken tenders and tater tots at Dodger Stadium in Los Angeles.
"Walmart saw what we were doing and said, ‘Could you bring Flippy from Dodgers Stadium to our Culinary Institute?" said Miso Robotics CEO David Zito.
Yahoo Finance visited Flippy to see it in action at Walmart’s Culinary Institute and Innovation Center.
The way it works is Flippy automates the frying process for many of the items served in the deli, including chicken tenders, mozzarella sticks, and potato wedges. -Yahoo! Finance
Highlight: Exclusive: @SallyPancakes reports that Walmart is testing an "autonomous robotic kitchen assistant" at its Bentonville, Arkansas headquarters. Walmart is "evaluating the technology to see whether or not Flippy can fit in its deli counter." https://t.co/ObzMOMFjVy pic.twitter.com/6LpKpo9K6t
— Yahoo Finance (@YahooFinance) December 10, 2018
The way Flippy would work at Walmart is that an associate would place a frozen product on a rack, which Flippy would then identify and pick up using visual recognition technology. Flippy then "agitates" a basket of frying food to ensure even cooking, after which the robot will move the basket to a drip rack.
After a human tests the food's internal temperature, the associate can season it before it's placed in the hot food display case.
"If you think about commercial kitchens, they really are micro-manufacturing facilities. And yet, they are some of the hardest conditions for people to work in," said Zito. "Our whole thing is not about job replacement, right. You hear this over and over again. Automating food is very difficult. Ask any chef. Their…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site