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Monday, February 26, 2024

Thrilling Thursday – Japan Jump Juices Futures

What a morning we are having already!

At 5:49 I posted to our Members: "Nice opportunity to short the RUT at 600.50 in the futures..."  We had two plays running and the Russell was kind enough to drop all the way to our $599 target, which may not seem like a big deal but it's $1 per penny per contract on the futures so that more than pays for breakfast already.  600, if you recall, has long been our watch level on the Russell and we get very interested in the action around that level.  10,500 was a good short on the Dow too but we missed that one by an hour but maybe we'll get another poke at both this morning as Jobs are very likely to sound bullish.

What Phil?  You may ask.  How can you suddenly believe jobs will be bullish?  I don't, but I do believe the MSM lies to you and that no one will mention the fact that the jobs numbers are based on models that give added weight to prior years and now we are comping against the Lehman collapse of last year when 610,000 jobs were lost in November (unadjusted), which was the first November decline since 2001 and the worst monthly decline since 1939.  So we have a situation in which idiot economists (who apparently have no clue how these numbers work) are estimating 125,000 job losses in tomorrow's NFP, but there will be an offset of at least 75,000 jobs from last year that can bring that figure down to 50,000 or less.  Today's weekly number will be similarly affected.   

The same seasonal adjustment will affect October as well and we may get a downward revision there as well so beware of "spectacular" jobs numbers this morning, as I said to members yesterday – that is excitement we are going to want to sell into.  Also on today's sunshine economic calendar is revised Q3 Productivity (if you liked the numbers the first time, you'll love them when we act like they are new today), ISM Services and Retail Sales.  Obama convenes his "jobs summit" at 1:30 and then says something probably right at the market close like "we have a plan" and then we can rally off that

Officially Cyber Monday sales were up 5%.  Unfortunately, on-line sales make up just 6% of all retail sales so 5% of 6% is 0.3% and that's the contribution to retail sales this year IF the Monday madness continues through the holidays in cyber-world.  AMZN was selling CDs for $5 on Monday – if I had known that I could have added another point to those figures.  Does that really count?  Is dumping stuff at prices that can't possibly make money now being counted as improved sales?  Oh wait… Cash for Clunkers – silly me – forget I asked that….

OK, I'm done complaining for now.  I'm not going to get into it because it sounds like another conspiracy but the PR machine of the Gang of 12 is spinning and bloggers who are concerned about the economy are now under attack.  The funny thing is that the attack is based on calling anyone who tries to point out that GS is evil or government data is BS is some sort of whack-job conspiracy theorist and, of course, when we (because yes, I'm one of those people) try to point out that this seems like a very sudden and well-coordinated uprising against bearish bloggers, we are then accused of THAT being our new conspiracy theory.  One day I'll write more about this when I'm in the mood (I minored in media in college) but for now I will leave you with this brilliant bit of diversion by Sean O'Brien in his "Ode to the Tin Foil Hat and Black Helicopter Crowd":

It is with curious amusement that I have watched the explosion of the Govt/Fed/Vampire Squid conspiracy theory genre within the bloggeratti and the mainstream media.  They all act as if they have just discovered something so secret and nefarious. They( and I am sure you know whom I am talking about…..) delight in “uncovering” anomalies in the tape or after hours activity in the SPY.  They must spend hours putting together deep research pieces on dark doings in the MBS market.  I have news for them…..IT IS NO SECRET.

So you see – We are wrong to point out that GS is rigging the market or that SPY trading activity should be investigated or that Government Statistics are distorted – not becuase it's not true, but because it's old hat!  I don't know Sean O'Brien but I do know that if I ever have to go to prison and want lessons on how to bend over and take it without complaining – he'll be the expert I turn to.  Thanks Sean, without waste of space media hacks like you the Holocust never could have happened or perhaps you think it didn't or perhaps you think it's no secret so we should just go with the flow and bake a few Jews? 

Is that too harsh?  Well what do you advise right in your post: "PSSST it is not news move along now.  I have a better Idea….If you have such strong feelings that the all the might of the the last great super power is pushing the market higher………going out on a limb here…..BUY THE MARKET."  I'll admit that we do play the manipulation, we love the predictability of the PPT in the afternoon trading but THAT DOESN'T MAKE IT RIGHT YOU TOOL!  Oops, I said I wasn't going to go into that now – sorry…

Speaking of tools, Cramer was in fine form yesterday pumping AMZN like his soul was for sale on-line (it's not, it was sold a long time ago).  Now we are short on AMZN and Cramer knows that but I'm not going to go back and forth with this jackass on the valuation when there's a perfectly good article right here by Value Cruncher.  So I'll skip my argument that AMZN is ridiculously overvalued and just point one thing out to Cramer's sheeple, who took the stock to new highs on his say-so in post-market trading.  CRAMER LIED TO YOU.  

 

His ridiculous premise that you should willingly pay 60 TIMES forward projected earnings was stupid enough but that's just his dangerous opinion.  The problem is that once you accept his asinine premise, he then feeds you a projected earnings number of $3 and tells you to add 30% because AMZN is off 30% in their projections (which should make you worry about management's competence but that's another matter) and he then gets to $3.60 and multiplies that by 60 and PRESTO, his target is $216 for AMZN, making it a $125Bn company by next year (with earnings of $1Bn). 

The REALITY is, if anyone watching Mad Money actually did their homework, that AMZN is really projecting (according to Yahoo Finance) $2.54 in earnings in 2010 and adding 20% to that figure is $3.05, not $3.60.  If you pretend everything else Cramer says makes sense, then you end up with $183, not $216 and, with the stock at $142 already (up 180% from last November), that's a 12-month gain of 28% if everything goes perfectly.  As I said, we're already short AMZN and we thank Cramer for lining up the buyers for our short positions (mostly selling long calls).  If it wasn't for market pumpers like Cramer sending his lambs to the slaughter at the tail end of a 200% run, we would have much less fun in the markets.

Speaking of pumping – we were going to talk about Japan.   Japan got us off to a fabulous start last night (which is great for our long-suffering EWJ longs) with a 3.8% gain (368 points) as export stocks went crazy as the BOJ finally managed to get the dollar back to 88 Yen.  The Nikkei finished at 9,977 and we probably need 10,000 there to beat 10,500 here so we'll see what happens tomorrow – it's going to be all up to Obama this evening to put the final spin on the global ball that began Monday in China.  The Hang Seng made it over 22,500 (up 1.2%) and China is up 6% this week already.  The Shanghai was rejected at 400 again so that's another one we'll be watching tonight. 

The ECB held their rates steady at 0.1% and EU markets are up slightly ahead of the US open but well over the danger zones (DAX 5,750, FTSE 5,250) so, like yesterday, we'll be playing the US for a bounce after our expected sell-off this morning. 

I rambled on too much this morning and have to go join the Members but here's the November same-store sales figures – you can draw your own conclusions (and make your own tin-foil hat!):

Nov. same-store sales (actual vs. Briefing.com estimate), update #1:
ARO +7% vs. +10%.
APP -11% vs. -3%.
BKE +1.4% vs. +4%.
BONT -6% vs. +1%.
COST +6% vs. +8.2%.
HOTT -11.7% vs. -7.9%.
LTD +3% vs. -2.3%.
PLCE -13% vs. +0.8%.
SMRT -7.2% vs. -6.5%.
SSI -12.5% vs. -5.3%.
ZUMZ -8.5% vs. -8.1%.

10 misses, 1 beat.

Nov. same-store sales (actual vs. Briefing.com estimate), update #2:
ANF -17% vs. -10%.
AEO -2% vs. -2.2%.
CATO 0% vs. -1.5%.
DDS -11% vs. -8%.
FRED -3.3% vs. -1.5%.
GPS 0% vs. -0.2%.
JCP -5.9% vs. -4.5%.
JWN +2.2% vs. +2%.
KSS +3.3% vs. +0.8%.
M -6.1% vs. -3.2%.
SKS -26.1% vs. -21%.
TGT -1.5% vs. -0.6%.
TJX +8% vs. +9.1%.
WTSLA -5% vs. -6.6%.

8 misses, 6 beats, for a total of 18 misses and 7 beats.

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