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Tuesday, February 7, 2023


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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Thank you Pharm and Phil.

MNTA/amit – I like them, they are in bed with SNY, and have some interesting things in the pipeline.  Conservatively, I would sell the Jan $15/14 strangle ($2.50 see if you can get it for this) and buy the stock.  Small position.

Sorry going political for a moment because the more I read about the debate last night (and I did watch it), the sicker I get.  I don't know why people can't hold each other up to the fire when they are lying or challenge their facts.  When Romeny cited he saw studies that had the President's tax plan raising taxes for the middle class by $3-4,000, Obama should've countered and which studies are these?  And he could've pointed out when hearing them that they are Koch funded institutions that have a deep Republican bias.  Why is Obama so afraid to ask Mitt Romney if he signed an agreement with Grover Norquist pledging under no circumstances that he would raise taxes?  Bring that corruption out in the forefront and don't know why he didn't say anything about the video or let his own zinger go referring to that.  And I don't think Romney did that well either, he didn't go into any detail about anything, he completely said the opposite of what he was saying all along and his practiced zingers seemed written and stiff like the one where he said, "you own your house and your car but you don't own your facts".  That was his big zinger?  It sucked.  Can you tell I'll be voting Obama?

debates/rustle:  Well, theres two more debates left.  Obama's a lawyer and he was known for using the "rope-a-dope" strategy with Hilary during the 2008 Democratic Primary. He could just be laying the groundwork for what could be a larger strategy.  Or I could be completely wrong.  It just seems very strange. 
Anyway, Romney is now on record on national TV completely reversing his prior stances.  A good lawyer will use that to maximum as he nears his closing arguments.

The TUrkey/Syria skirmish is their excuse!?!?!!? B/c those fockers produce sooooo much oil? What a joke, not that they dont use this sh!t every month but it is really getting old.

That is a start and adds to why I call Obama spinless wimp. Wish he could stand up to congress, as a political leader he isn't.
I will vote for him and as far as I'm conserned Romney needs to go to jail with the banksters!

GLD/ Pharm- Hi- I was following the GLD 173 dec's and selling calls- I am at 173 weekly. Can you help me with this- roll, buy back and wait till Fri, etc.? Thanks.

I too was disappointed that Obama didn't call out Romney on his lies or the Republicans on their obstruction. I am afraid that the low-information voters (likely most of them) would have taken away the  impression that Romney was "strong" and "presidential" while Obama was "weak", "hesitant" and "over his head", because he sure looked like that last night. 

With all the people here does anyone have any business dealings with Romney ? 

Ask anyone from Dunkin Donuts or Kay Bee Toys how business dealings went with Bain.

Thank you for the uso call yesterday and the Dug call a few weeks ago.

Seriously, WTF, oil up 3$ for NO REASON!!! FU OIL!

PGNX….lifting off the floor…..is that all us?

rustle/debate –  my understanding is that neither candidate was allowed to ask the other direct questions ,,,

The debate rules brokered by the PDC (Presidential Debate Commission)  stretch the use of the word "debate".  There is an excellent piece from Democracy Now (h/t Jesse's Cafe Americain)  with author George Fatah about the origin of the PDC, and the degree to which it  has neutered political discourse:

VRTX Oct/nov 62.5 calendar calls for 1.15.

So.Cal. – Gas prices up nearly 21 cents in a week – 9 cents overnite…..

Unfucking believable, all yesterday's fall gone. F#CKING OIL!

You can go around those rules by stating, Mr. Romney signed a pledge to Grover Norquist.  Or saying the institutions that say my plan would raise taxes are Koch funded institutions and have a Republican agenda.  Then Romney would have to respond to that.
BTW, are the two most annoying women in the world Arianna Huffington and Ann Coulter? 

VRTX….1.25….they are moving quickly.

Aurianna was a total anti gay right wing fire breathing vajahjah….when did she become a liberal!!

angel – One of the benefits of divorce…..  šŸ™‚

Amazing how well the market is doing with AAPL lagging so much behind. Something is really weird there!

Mutual fund investors pulled $5.1 billion out of U.S. stock mutual funds for the week ended Sept. 26. The prior week, investors removed $4.8 billion from these funds, according to data from the Investment Company Institute.

thanks for the USO call, helped with the HPQ body blow from yesterday.

CSX – coming up off a channel low. vix is down and the 2014 12.5 calls are going for just a couple pennies of premium.

AAPL/ Phil:  what do you think about purchasing the $680's weekly back?

Kustomz Phil Rail!
If you will admit that rail mostly connects the east and west most of commerce coasts, has to go through the middle, and those rail lines go though my neck of the woods? The trains are backed up 24 hours a day, lets say the rails are at 100% usage. I have asked others as to the Northern line through Montana also, people in Wyoming think coal is 98 to 99%, Montana 95%. What else is on the trains? New cars, trucks, lumber, piping, and long bridge support beams in about the volume of each decreasing. Too large and or heavy for roads.

Cars and trucks are in protected/ inclosed flat beds, much less chance of damage than over the roads.

Volume is in spurts of down, the late rise is on NOTHING!

HPQ – for IRA accts the Jan 2014 $15 puts sold at $3 or better give a 20% return on cash-secured trade (or ~16% annualized). 

Trains….don't forget oil!  Buffett's call on Burlington Northern because Obama would 86 Keystone pipeline…….
Pretty quiet now, just have Nov 655 AAPL calls naked, some QQQ Oct 70s…..just waiting, probably cover AAPL below 665(close there, not dip), and looking to recover if it gets back to 680.  Probably sell weekly calls and pick up nickels/dimes while waiting for iMini and earnings…….

Shadow- Others- I have seen those long coal trains while driving through MT.. Do you it takes one of those to power a Coal plant for only one day..

Value/pricing question re AAPL call options: if I wanted to take advantage of 4Q earnings (10/25 + 3mths = 2/25 +/-) that would mean Apr 20 which are 65 for ITM vs 53 for Feb 16 (which might be  early for announcement). Would there be any benefit to going deeper ITM?
Thanks in advance

OMG.. there goes the t party….

Pharm, O NO MY EYES!!!


I am going long NFLX into Oct 23 earnings.   BTO Oct 20 Bull Call Spreads 65/70  for 2.15.   This is NOT a MoMo trade.   Why am I going long NFLX?   Because it's going up……….    

Then it's a MoMo trade lflan   šŸ™‚

stjeanluc /NFLX….I thought all funds in the MoMo portfolio were used up on AAPL.  If your calculations say no, then add this to the MoMo port.  Thanks.   

I have had these on for way too long…..

MoMo / lflan – Sorry, I was just joking as you are making a momentum trade and saying it's not a MoMo trade! We'll stay with the AAPL trade now!

What happened on FTR, all the Cramer folks buy it back?

stjeanluc….Well, I'm kind of sheepish about advertising a long NFLX trade,  but gosh, I have to call 'em as I see 'em.  And yes, I think we are tapped out in the MoMo portfolio to AAPL, so we'll leave it where it is.    I see Phil is massaging those AAPL covers to good advantage, which I love to do when trading time allows.  I'm more interested right now in going to a futbol game (soccer).   See you guys tomorrow.   

Phil – Do you still recommend holding FTR long?  TIA

AMZN – looks like they want to pin 260.. but max pain calculators show 250 as the peg. what will happen tomorrow?

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