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Wednesday, June 7, 2023



Turnaround Tuesday – Will CNBC Apologize to America?

I wasn't worried, were you?

Actually, we were worried enough this weekend to revisit "5 Plays that Make 500% if the Market Falls" as we took off our very profitable April 28th disaster hedges in last week's dip, leaving us net long and just a little nervous going into the weekend.  As I mentioned last week, I find myself in the very strange situation during capitulation cycles of having to push back against general Member sentiment as even the most experienced traders tend to fall victim to the combination of market and media manipulation when it's as relentless as it has been for the last 10 sessions as the markets dropped 7.5%, pretty much without a break

We first noticed the all-out media attack on the markets way back on June 15th, when CNBC featured the tag-team combination of Pimpco's Mohaned El-Erian and Nouriel "Doctor Doom" Roubini – one who is pushing his bonds and one who is pushing his book and both of whom can be counted on to spin things as negatively as possible.  That very effectively put the breaks on the rally from 9,800 on June 7th to 10,450 (6.6%) on June 15h and ran us back down to lower lows as EVERYTHING that happened since then was put into a negative light.  I won't rehash all the idiotic statements made by Cramer or the Fast Money crew or the rest of the Criminal Narrators Boosting Commodities – it's either obvious to you or you'll never see it at this point. 

CNBC has been woking the markets over since May 21st, when I first pointed out how negative their coverage had shifted.  Over the weekend, we discussed the workings of the game and the players that CNBC work for and, wouldn't you know it – this morning, timed for lunch in the EU, Dr. Doom Roubini is their very special guest – AGAIN!  El-Erian and Gross were kind enough to warn people this morning that "shares are no bargain as the recovery fades" and Barton Biggs is telling anyone who will listen that he liquidated half his tech holdings last week.  Funny how they don't tell you WHEN they are buying or selling, just a mention after the fact to "help you" make the right decision. 

The psychology of the stock market couldn’t be worse, yet the valuation probably couldn’t be a whole lot better,” said Phil Orlando, the New York-based chief equity market strategist at Federated, which manages $350 billion. “Because corporate earnings estimates are rising, there’s a significant valuation imbalance that suggests later this year stocks are going to start going up again, and they’ll probably go up sharply.”  Profit for Standard & Poor’s 500 Index companies will jump 34 percent in 2010, compared with a projected gain of 27 percent on March 29, according to more than 8,000 estimates compiled by Bloomberg yet if you listen to Corporate News, you would think the World was ending.   

We won't be sure the World isn't ending for another week but we made it through the holiday weekend and expectations for Q2 earnings (or at least Q3 guidance) have now been pushed so far down that it will be hard for even PALM to disappoint.  Today we get ISM Services and short-term TBill Auctions.  Wednesday we'll get MBA Purchase Applications, Redbook and ICSC Retail Sales Reports and a speech from Jeffrey Lacker at night.  Thursday we get Chain Store Sales, BOE and ECB rate announcements, 3, 10 and 30-year auction announcements, Natural Gas and Petroleum Reports on the same day, Consumer Credit Report and a look at the Fed's Balance Sheet and the Money Supply after hours.  Friday finishes up with Wholesale Trade at 10 so nothing too Earth-shaking ahead but the next week is crazy busy.

We have very few earnings reports this week:  CSIQ, FDO, WDFC, COMS, GBX, HELE, ISCA, INXI, LWSN, NUHC and PSMT – that's it!  Next week gets interesting with AAP, SHAW, AA, CSX and NVLS on Monday; FAST, INFY, AIR, ADTN, INTC and YUM on Tuesday; ABT, JTX, PGR, TXI and MAR on Wednesday; SCHW, CBSH, FCS, JPM, MTG, NVS, PPG, WWW, GWW, AMD, GOOG, KMP, PBCT, TPX and NCTY on Thursday and BAC, C, FHN, FNFG, GCI, GE, GPC, KNL, MAT and BPOP on Financial Friday, which is also option expirations day so it will be fun to see if we can take back 800 points as fast as we gave it up to finish around the same 10,450 we were at on last options expiration day in this manipulated joke of a market. 


Fortunately for Members, we also have "5 Plays that Make 500% if the Market Rises," so we'll have a hot time in the old town tonight watching all the bears scramble to cover.  During last week's carnage, we went against the grain entirely and moved from 25% to 35% invested in long-term, well-hedged plays but ditching our Disaster Hedges and covering our Mattress Plays did make for a nervous weekend so you'll have to excuse me for being relieved, at least for the moment.  Once we get past the open, we don't mind if the market turns down because we can adjust on the fly, it's the gaps down that we fear when we are bullish into the weekend but just look at how cheap the Dow is getting:


To be more bearish here is to assume the S&P chart will get worse than it was in the ‘08 panic and we’re already passing the ‘09 panic.  Earnings have to be TERRIBLE to justify this movement.  Taking a look at the Dow above, do you really think all of these companies are not really oversold – that once they report earnings THEN we will see how they are still 20% overpriced?  Think about it – it’s not all that likely.  Don’t think about the economy and your fears and the Dow index as an abstract – the Dow is a reflection of the performance of these 30 companies just as the Nasdaq is a reflection of 100 (well, mostly just AAPL these days) and the S&P is a reflection of 500 companies.    

On Friday, I had said to Members right at 9:38, in the Morning Alert: "If we run up, then it will be prudent to get more neutral into the weekend but if we stay down and hold our levels, then saying a little bullish will be fine. Out of short-term short trades if you haven’t already.  Keep in mind we have some great 500% upside plays you can still grab here if you think you are too short."  The latter was a reference to our 500% upside plays.  We also went with EEM July $38 calls at .99, and a QLD $50/53 bull call spread for $1.30 (selling puts as well for more profits) as well as long plays on RIMM, AA, HOV, VLO and TASR.  My optimism was based on the considered TA analysis I shared with Members at 2:39:

After completing last month's "Omega III" market pattern on the Trade Bots, it's now time to spring the bear trap and run the "Apha II" into options expiration on July 16th.  Maybe there will be as little logic to the rise as there was to the fall – who really cares – it's just our jobs to try to catch these waves when they come and ride them out for as long as they least (until the cheerleaders are back on CNBC and we know it's time to bail!). 

Yesterday Morning I said to Members in Chat (yes, I know, we are a sad bunch of addicts that wake up and talk about the markets on a Monday holiday) that China hanging around 20,000 was still pretty bullish as they were at 11,344 in March, 09 so, when people say markets are failing because they dropped from +100% to + 75%, it does strike me as a bit funny because what the MSM is saying is that anything less than up and up and up without a pullback is a reason to panic

Remember, China tends to lead us up and down and not vice versa in a long-term view and India, has very interestingly gone the opposite way since mid-may and they are up 114% since March ‘09.  One might wonder what they have to be so happy about or one can wonder why are we acting so miserably?

The S&P was at 666, went to 1,220 (up 83%) and is now 1,022 (up 53%), so we’re a lot worse off than China so far but the question is, are they under-reacting and should be down around 16,000 or have we over-reacted and the S&P should be back at 1,140 (up 72%)?   Even Europe is bored with going down and flatlined yesterday and they are leading us up today (up 2.5%) after some pretty good gains in Asia as well (up 1.5%).  EU bank stress tests come out on July 23rd and the French Finance minister is upbeat about it

China bought $6Bn worth of Japanese Bonds this morning but said they were not ditching the Euro so that perked up the Euro and knocked down the Yen in overnight trading.  Chinese companies, though, are running all over Japan and buying up Japanese firms and the Agricultural Bank of China's $23Bn IPO is 20x oversubscribed so that's $460Bn of sidelined money in China that will have to find something else to invest in later this week – see how smart that EEM play was? 

We remain cautiously optimistic.  Not much has changed for us, we've been buying on the dips since the flash crash at the same levels – we just never thought we'd get so many opportunties to buy at the lows.  Now we'll see what levels we can climb back to so we can work our way into a new set of disaster hedges but, meanwhile, the millions of retail investors who were influence by the MSM to dump their shares at the bottom and now become a part of the pack scrambling to get back in as we open, now up 1.5% in pre-markets should demand more than an apology – they should demand an investigation! 



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goldman / 11:33
No conformation, maybe 12:03 or :06 and then you should have been back in TZA at 12:15 on the 3 min chart. Keep at it, you’re always getting better !!

What will they say if LeBron James leaves Cleveland ?

JRW – Think I’ll run SSPro Tuesday…ETPro doesn’t have an 8ema setting, I tried to create one by adjusting the smoothing ratio to 0.266.  Looking at the SSPro chart for today, they are not the same…think I’ve been looking at an inaccurate conformation chart…youch…

I recall someone mentioned "Schwab Platinum" a few days ago.  I have an account at Schwab, and I got "Schwab One".  I can’t find anything about "Schwab Platinum" at their web site.  Does it provide more services, or deeper discounts?  Can someone help?

exec JRW
exec this administration is the scapegoat left with a mess and personally they have done nothing to correct it. I will vote against them or not vote. Sorry your bailing but both You JRW, my father, and I agree on gladly pay taxes on a profit and as Phil says take the profit and run! BUY AND HOLD IS DEAD!

cwan120 – I mentioned the "platinum" schwab account.  That is what they mentioned when I called them last week, three levels…platinum, gold, regular.  I’m not sure if the rep made it up or not as I noticed it is not listed on their website.  I was attempting to compare Platinum ET Pro to their best package, and they did say their discounts and account levels depended on account cash size and/or number of trades…just like most other brokerages.  Sorry for the confusion…

 brutal relentless selling. Chris almighty. GOOG – 12 straight red bars.

Phil: my AAPL calls were and are AUG270,

JRW / Taxes / Helicopter:  lol!  That’s great because Ben is gonna wear his out next year!  Remember, he’s still got his job regardless of who wins in November.

I am a few steps behind you, trying to replicate the system.
Would you mind running the exact scenario to setup the signals to enter and exit? I’ve gotten so far, setting the IWM chart at 3 mins, fast stochastic, RSI and another indicator I am missing… when they all converge (as well as having bounced a support level–not sure also what constitutes a bounce– 2 or 3 times  what exactly? ) then buy.  when a resistance is not broken (after 1st try?), sell. 
Thank you for your help…

let me know please when to enter a TNA trade, still mighty difficult and always behind and late.

 RMM, I would no problem but I am having the same issues, not sure yet on the correct signals and how to properly setup the charts, etc

3 min charts (I have no 3 min so I use 2 min, this is riskier), stochastics with RSI, Momentum,
put in the lines which JRW publishes,

Phil:  I apologize if you have read this before, but hadn’t seen any comment, so wondered if you had really even saw it from the other day.  Please ignore if you don’t have a mind to comment, but  I have come across a small booklet that claims to be translated from Russian text of a meeting that took place around 1905. I wanted to share some of the quotes and would really appreciate your thoughts–so many of the things you come up with are things we have thought as well and are so grateful that someone else is "thinking" out there!!:
 p. 22—“…hatred will be still further magnified by the effects of an economic crisis, which will stop dealing on the exchanges and bring industry to a standstill. We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, a universal economic crisis whereby we shall throw upon the streets whole mobs of workers simultaneously in all the countries of Europe. These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot.”
p. 30…“ To complete the ruin of the industry of the [people] we shall bring to the assistance of speculation the luxury which we have developed among the [people], that greedy demand for luxury which is swallowing up everything. We shall raise the rate of wages which, however, will not bring any advantage to the workers, for, at the same time, we shall produce a rise in prices of the first necessaries of life, alleging that is arises from the decline of agriculture and cattle-breeding: we shall further undermine artfully and deeply sources of production by accustoming the workers to anarchy and to drunkenness and side by side therewith taking all measure to extirpate from the face of the earth all the educated forces of the [people].”
(many other things are in there also) And further in reference to some of the things we have talked about–
They also claim to name the presidents, and have control of the press, our education system–they provide the scheme on how this is being accomplished—they say this is all being orchestrated so as to establish a super-government ran by a despot.  One of the many very disturbing quotes, is that people will serve them just for the right to exist. 
The name is the Protocols, and there are 24 of them outlined that talk about their goals they have worked on for centuries.  They talk about how we are just cattle to be herded by them.

 Phony Protocols/Fizz  –  You have stumbled onto the Protocols of Zion, a forgery from 1906, which were used to stir up hatred of Jews and fear of Communists taking over the world.  The New York Times exposed these as forgeries in 1921.  You can look it up on Wikipedia.  Lots of US hate groups still pass them around.  

 Well I feel like the WORLD’S BIGGEST MORON giving back $17k (from a high of $105k) and depressing my dreams and aspirations of trading my way into a comfy early retirement.  Not much to say but too big bets in on GOOG and TBT and the whoel world absolutely hates these two stocks right now and I think investors are stupid f*cking morons for piling into bonds that pay 0.1% a month, but who am I to say and the market is a cruel CRUEL master. 
At this stage I would characterize myself as being in the Valley of Death on the sinewave looking graphic Phil posts now and again —  that is, where the caption reads "I’ve missed it completely, I’m a moron, I gotta sell or else I’ll lose everything" a.k.a. where the mass market mentality was back at DOW = 6,600.  
Trying to look at it this way, GOOG has had some good runs:
3/10 to 5/12/2008 = 433 to 600, +39% (63 days)
11/17 to 2/2/2009 = 262 to 371, + 42% (77 days)
3/9 to 12/28/2009 = 324 to 620, +91% (296 days)
Trying to fight the pessimism and keep emotion out of what could be a very good investment decision despite the losses. I want to capture the next GOOG move. Sept-540 calls at 1.80 or 550’s at 1.35 would capture a similar move to the first two listed above with 3,500% potential.

AAPL/RMM – You have to take things off when you are that exposed.  Roll out to a 1/2 Aug cover if you are worried but NOBODY should be in open July positions that they have premium in (sold premium OK) after tomorrow.
Phil – does this mean that a sold put that will need to be rolled or bought back at a loss? No more waiting for things to turn around?

Hi Goldman
Can I find anything like the setting you mentioned on TOS charts? 8ema thanks
July 6th, 2010 at 4:45 pm | Permalink  
JRW – Think I’ll run SSPro Tuesday…ETPro doesn’t have an 8ema setting, I tried to create one by adjusting the smoothing ratio to 0.266.  Looking at the SSPro chart for today, they are not the same…think I’ve been looking at an inaccurate conformation chart…youch…

BioD – i bet a few of us could line up to compare the size or our moronicness. But you are right, that’s not what matters. We have to get through with enough marbles to play again.
Just wish i had taken seriously Phil’s call to cash. I didn’t cause i dint want to have a loss. HAHAHAHA. Laughs on me now.

 Snow – As jromeha mentioned above TF is the RUT futures symbol. The "U10" indicates September 2010 expiration. Since I’m impatient and wish to achieve fortune sooner than I deserve, I’m looking for ways to trade JRW’s system with leverage. I tried with IWM options for a day, and did pretty well, but options are kind of annoying for day trading with all the variables that affect price. I figured my next move would be to try futures, and that worked out pretty well too. The RUT e-mini futures contract is worth $100/point per contract, and moves in $0.10 ticks. Since I’m just starting out with this, I only trade 2 contracts at a time. That requires about $10K in margin. 
I still don’t have a good sig rune on my stoch RSI. Can anyone with Shwab’s system post a screen shot? I may just sign up for an account to get this one critical indicator. All I ever see is an oblique straight line (and there are LOTS of oblique lines to confuse ‘the one’). 

Stoch/Drcraig: You can get the same effect on TOS by putting in the StochRSI study and setting the %k, RSI, Slowing settings to 14,14,1 on the 3 min and 14,3,3 on the 1 min chart.   The come out looking the approx. the same as the sspro stochs.

add to RMM comment Phil– I have july 250 short put 20 position, suggest to august roll to lower strike and add 1/2 cover with short call ( like 280 short call), I also have august 260/280 bull spread, 250call bot at 16.28 and call sold at 6.53, how should I adjust this or should I buy back aug 260 call and leave the short side decay till august that would even money, loss 6 on august 250call and hope fully even decay with august 280 short call — is this the right way to think of readjust the position….need your help. thx

Hi, goldman, re Schwab,
What kind of commissions do they offer for "Platinum"? TIA.

revtodd–Thanks for your info.

They may be forgeries but truth is stranger than fiction…..

 yipcarl – Yes truth is stranger than fiction, just not this particular one. Like you, I often wonder if world chaos is part of some diabolical plan.  I confess to a love of spy thrillers and James Bond movies.  But often I think that when we uncover the truth, it is more likely to be that greedy and power-hungry people made the diabolical look normal and acceptable to the rest of us.  I think Phil is pointing out that we don’t need to make up villains because they are hiding in plain site.  I’m for reigning in the robber barons before some demagogue uses a forgery to convince that our problems will be solved if we exterminate another 6 million people.  

Lindsay Lohen to the big house for 90 days.  Her first wakeup call.  Her rock bottom? …or tender bottom?

Wonder if anyone has tracked the number of comments to Phil as an indicator.  Not so many today.  There must be some correlation there somewhere relative to the markets but I’m new to the site so maybe someone else already has noted this and will divulge the secrets.

matt, Lindsay….Washington then Hollywood..if you know what i mean…all the great actors are deceased..its now a cease pool of overpaid delinquents

dezev, really not much to comment on. Phil’s usually a few weeks early 😉 He’s been pounding the table on the fundamentals but technically its a mess in the markets. All about the earnings and outlook this and next week. So far the data has sucked if you were too bullish but on the other hand nothing that screams dive dive dive…yet.

Hi, dezev,
You got a good observation!  I didn’t notice until you mentioned it.  Interesting…  Could be some sort of leading indicator 8)

Oh, dezev,

Hi kustomz and cwan120,
It’s nice to have a reply.  Having been on another site with a few observations and thought it was a Moseleum.  Perhaps and hopefully this is one where all can share ideas.  Regardless, ala Jim Morrison we might break on thru to the other side.  Bear or Bull market, we’re not getting out of this one alive so perhaps as Rodney King said "Can’t we all just get along!".
Rock on!

Phil: Re: You have to take things off when you are that exposed.  Roll out to a 1/2 Aug cover if you are worried but NOBODY should be in open July positions that they have premium in (sold premium OK) after tomorrow.
Please help with the following:
Buy (5)TNA JUL 2010 40 Call @ $2.70… now .325:           Sell (5)CAT JUL 2010 60 Put @ $2….now $2.09
Sell (5) TBT JUL  2010 40 Put @ $2.29… now 4.75            Sell (5)BA JUL 2010 65 Put @$3.90…now 4.00
If I read you correctly, the only one that needs attention is the TNA. …. Thank you for all your help.

From the Dept. of FWIW,
CNBC website seems to be getting more bullish.

Phil> “That is one blow-out discrepancy today.  Dow up 0.59, S&P up  0.54, Nas up 0.1%, NYSE up 0.8% and RUT down 1.5% – haven’t seen anything like that in ages.”

Maybe RUT is being discounted more by poor job numbers since smaller companies are supposed to be the engine of job growth. I’m hoping it rebounds with earnings prior to options expiration because I’m overexposed to a dumb spread I took on TNA.

My specific indescretion was a TNA July 35/25 bull put spread at -$1.70. Seemed safe enough when TNA was in the 40s. It could still survive if RUT is above 600 next Friday.

So Phil, I’ll be watching intently your RUT levels for the next week.

I am no economist, but judging by the onslaught of negative sentiment form the bond guys, they must be worried about their own portfolios and they certainly have a lot to lose if the economy improves and money flees to equities and interest rates have tension to climb a bit. Usually he that clamours the loudest has the most to lose so my suspicion is that they are worried.
We all just need to survive this with capital intact and minimize losses by use of wise hedging and small positions. I think we win in that case.

I am no economist, but judging by the onslaught of negative sentiment form the bond guys, they must be worried about their own portfolios and they certainly have a lot to lose if the economy improves and money flees to equities and interest rates have tension to climb a bit. Usually he that clamours the loudest has the most to lose so my suspicion is that they are worried.
We all just need to survive this with capital intact and minimize losses by use of wise hedging and small positions. I think we win in that case.

Phil–thanks for taking the time to talk with me about this, you are very kind. (You and what you have said during the day are the topic of discussion between my husband and I many evenings!) You are soooo right about so many things.  I enjoy reading what you have to say.  Also, I wouldn’t want anyone to think of me that I would encourage or support the destruction of a race–so wrong.
Also, I so admire you for your care for others–trying to teach us what you know.  Thank you.

FYI, I certainly didn’t take your previous post on the "Protocols" as implying that you advocated any of the destructive ways that it was used later on.  I just wanted to point out where they came from so people would know.

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