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Tuesday, February 7, 2023

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Thrilling Thursday – Romney and the Markets Turn Up

What a debate last night!

One of the candidates will lower taxes for the middle class and small businesses while slamming shut loopholes on the rich and Big Business, limiting their deductions and raising taxes if needed, he will provide national health-care and concentrate on jobs, punishing outsourcers and educating US workers to get them on the path to full employment.  The other candidate is already President.  Romney now claims there will be no 20% tax cut for the rich – I assume his rich backers assume he's lying to get elected (lying doesn't bother them) and President Obama was in no way prepared to debate the guy who showed up yesterday and he lost the debate in an embarrassing fashion.  

From a market perspective, we were playing the weakness as nervousness ahead of the debates and accumulating long positions as planned yesterday.  Oil blew past the $88.50 target I set in yesterday's morning post – all the way to $87.70 before finally bouncing back and hitting our target again overnight (now $88.64).  That drop from $91.22 in the Futures was good for $3,500 per contract in the Futures but, of course, we were done being short, as planned at $88.50 and in fact made a couple of bullish trades – long on USO at $33 (as planned) and short on SCO at $44.  We'll see how they work out today but up at the open is a good sign.  

RUT WEEKLY HPQ was irresistible as it tested $15 (long-term positions) and BBY gave us a good entry again at $17.50.  We made a quick 50% on the TNA weekly $61.50 calls, which we grabbed for $1 in our $25,000 Virtual Portfolio at 10:09 in Member Chat and we caught a nice move up to $1.50 not even 30 minutes later as our 838 line (weak bounce) on the Russell continues to hold.  

Our bullish stance on AAPL finally paid off as the stock went from $660 to $672 at the close – hopefully $680 is next.  Gasoline only got to $2.75 (we were hoping for $2.70) but is back to $2.86 already in pre-market trading (/RB).  

As you can see from Dave Fry's Russell chart, we're still in a bullish consolidation – just below our breakout level and today, so far, we don't have rising Dollar headwinds to hold us back as the Yen hit goal at 78.70 to the Dollar and seems happy enough above 78.50 (the Nikkei gained 1% and is back over 8,850 goal).  

Neither the BOE or the ECB changed their rates today, that's weakening the Dollar (79.70 at 8:40) as we are now engaging in more easing relative to those currencies and the BOJ knows better than to waste their money fighting the tide today but we can expect at least an attempt to support the Dollar at 79.50, which will be 78.50 on the Yen.  Meanwhile, oil is up over $89 again and gold just hit $1,797 and silver is over $35 and that's going to be great for our long silver and gold hedges (see Friday post).  

XLF WEEKLY Spain had a bond auction that went pretty well this morning – selling $5.2Bn of 5-year's at 4.77% and 2-years at 3.28% – a huge improvement over last month so Draghi can take a victory lap this morning.  We have our own Fed Minutes this afternoon (2pm) as well as an update on the Fed's Balance Sheet after the close and a speech from Bullard (hawk) on Monetary Policy at 6:30.  So far, the Fed hawks seem to have drunk the Kool-Aid and are as doveish as the boss so it will be interesting to get Bullard's take but it won't mean much to the markets with Non-Farm Payrolls over-riding all else tomorrow morning.  

Hopefully, today will be the day XLF gets back over $16 (we're long).  You would think backing the banks would be a no-brainer with QInfinity but, so far, we're just not getting anything like the reaction we had to even operation twist last fall, which too XLF from $11 to $15.50 (up 40%).  Granted, QE3 was anticipated and we already ran from $13 to $15.50 but where's my other $2?  It won't be a real rally until the Financials participate.  JPM reports next Friday – we may have to wait for that catalyst to ease the jitters that still surround US Banking….

Responding to a question of whether an ECB rate cut is even conceivable considering the "broken transmission mechanism," Draghi says the ECB's use of non-standard measures (OMT) "speaks for itself." In other words, the bank believes a rate cut will be of little use, so don't expect one.  So the dollar will remain more favored than the euro as the borrowing currency for carry traders…

There's a lot of back and forth action now as Draghi answers questions and we're probably going to be testing our strong bounce lines once again today but I'm not looking for a major breakout without about 150,000 jobs created tomorrow.  In fact, anything over 200,000 is going to make Romney look foolish, despite he fine performance so we'll see just how much pull Obama really has at the BLS because the next debate is just two weeks away and if lack of job growth is off the table – it's going to very hard for Romney to score any points on repealing Obama Care and raising military spending by 30%.

Oh, and the funniest moment from last night's debate – Romney told Jim Lehrer he would fire him and shut down his whole network – now THAT's the Bain-Bastard Romney we all know and love because he said it with a smile too!  

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GM Everyone

Oil Lines

R3 – 94.94
R2 – 93.38
R1 – 90.82
PP – 89.26
S1 – 86.70
S2 – 85.14
S3 – 82.58

Yesterday's high and low – 91.82 / 87.70

Huge gaps between the lines!

Good Morning!

looks like the banksters don't want $1800 gold or $36 silver…slammed back.

PHIL your analysis of Romney is spot on. He is going to deek the mad right wing zealots. I was shocked at the flatness of the President.  

PGNX – starting a small position in it, selling the Nov $3 puts, buying stock.  I want to wait to cover, but look at the May $3 calls for 75c or better.

"Oh Superman, where are you now"?…..   Karl who?
http://www.youtube.com/watch?v=xZ96KrAI4xk
 
Phil, just learn to fly….and wear something….cool…with a cape….. ūüôā
http://www.youtube.com/watch?v=SrUnkuiAdvI

Interesting to watch my reaction to HPQ yesterday.  Literally a week ago I was considering closing out, for a very small profit, my long-term short put position because I was doubting whether they had a strategy or decent leadership.  Then when they tanked, I found myself inclined to roll and stay in because now they looked too cheap, even though it increased my exposure to them.  Was I:
a) smart
b) greedy
c) stupid
Only time will tell but I have tended to regret investing decisions that I've made on "gut feel" like this.

Good Morning.  Question..  If the markets turn in a flat boring day today, Does that mean the debate's outcome was already baked into the mix.  Should be interesting today no matter how it shakes out.

Nice recovery there!

Looking better as well. 

AMZN – Net is probably around $10.80 as of now.
V – Net $1.42 but not looking good!
QQQ – Net is $0.42 and that's where we are now.
AAPL – Net is around $24

QCOR….gimme gimme gimme….

fu hpq!!!!

Good Morning—–
neither the real Obama or Romney (good Houdini act by him) showed up yesterday—I tuned out

Phil/ Take the money on FAS 104 OCT calls?

Hey Phil- what do you think about selling the Jan 2015 NLY 15 Put at $2.75 for a long-term trade idea?

XLF calls.

HPQ…dead cat bounce coming up….today, tomorrow? I would scale into a position in here, 1/4 buy.  Nov 13 calls…..

DIA Puts -Still selling half at $1 stop? Then rolling the other 20?

GLD weekly C 174s.  buying back 1/2. 

Well well well….up up and away…..1500 on SPX..here we come.

/dx – Perfect technical trading this morning as it broke down from a trend line that started at the hourly low set on 9/14. Broke down on volume and then came back and retested. Failed the retest and is now breaking down again. If this sticks today I would guess we were headed back to retest the low at 78.72 sometime next week. Only caveat is we are extremely oversold on the 5/10/15/60 min stochastics. On the daily stochs we have room to fall.

Phil, 25KP AMZN roll did you mean $3.15 by any chance?

AMZN – sloppy but could be a right shoulder here at 260 to pair with left shoulder from Sept 10.

Phil, never mind AMZN question.

Next week SDS 12.50 calls near parity.

DIA 40-40 spread / Phil,
I'm going to be away from my computer for fair periods of time today. Thoughts on how to manage this trade as DIA goes down or up…? Thanks.

Pharmboy
Anything new you can share regarding DEPO? Thx.

I'm not real happy that the RUT just busted yesterdays low.  Why the divergence?

Any thgts/news re Facebook's gradual descent today?

Europe close

UK FTSE -0.1%
German DAX -0.3%
French CAC -0.2%
Spain IBEX -0.4%
Italy MIB -0.2%

DEPO/dc – keep selling premium.  They continue to consolidate.  I like them long term and are a very good play for a generic player (TEVA, etc) to reform things for better premium on generics…..will they be huge, no.  But their technology is sound.

Phil:
I hold 2 short this week $670 calls looking for AAPL to pin $670. When should most of the premium drop off if the stock hovers around $670? Is it on the last day or instead an accelerating but steady drop in to the close on Friday? Just observing it today it has already dropped $2.00. I am wondering how long I will have to hold these to reach my goal of around $2.00 (currently $4.00).

Pharm– thoughts on MNTA please

ae8055354

Sorry, disregard previous post.

XOP Dec 51 Ps….Oil may creep up, but barring disaster….it is going to get crushed.

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