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Thursday, December 1, 2022

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Monday Market Movement – End of the Ride?

One of these things is not like the other:

That's right, it's the Nasdaq, which fell hard and fast on Friday and, as I said to our Members over the weekend: "Will the Nasdaq correct or IS the Nasdaq correct?"  Based on the possibility the rally would continue and the Nasdaq would right itself (nothing matters until AAPL earnings tomorrow, anyway), we picked up the weekly QQQ $74.50/75 spread for .30 on Friday afternoon – a spread that gains 66% in 7 days if the Qs hold $74.50 (any positive move for the week).

This is a very simple trade idea – if the Nasdaq goes up – we're good.  If the other indexes go down – we stop out – not at all complicated.  

Also not complicated is our short position on oil.  If they (the crooks at the NYMEX) want to keep pretending they want to buy 1,000 barrels of oil for $108.50 each then we are very happy to promise to sell it to them for that price.  This is a very easy promise to keep as we can roll our obligation (just like they do) and we can buy December barrels for just $102.68, an almost $6,000 per contract spread in our favor.  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Aug'13 108.34 108.67 108.14 108.44 05:18
Jul 22

 



0.39 959 108.05 28536 Call Put
Sep'13 108.07 108.46 107.88 108.22 05:18
Jul 22

 



0.35 12034 107.87 387732 Call Put
Oct'13 106.15 106.67 106.11 106.45 05:18
Jul 22

 



0.33 2172 106.12 131990 Call Put
Nov'13 104.61 104.92 104.41 104.74 05:18
Jul 22

 



0.39 1114 104.35 83002 Call Put
Dec'13 103.03 103.26 102.80 103.10 05:18
Jul 22

 



0.42 2002 102.68 204514 Call Put

Back on July 4th, I pointed out that prices were being driven up over $100 a barrel by NYMEX Economic Terrorists faking the orders for over 250,000,000 barrels (250K contracts) for August delivery.  As you can see from the above chart, they have already cancelled all but 28,536 contracts (90%) and will cancel most of those today, the last day of trading, in order to create an artificial shortage of US oil next month by simply cancelling all the contracts that were ready for delivery.  

According to the EIA, imports of crude oil to the United States are down 1.2M barrels PER DAY – which means the criminal cartel of traders that control the NYMEX are choking off the US supply of imported oil by 36M barrels per month or 432M barrels a year – an amount equal to over 1/2 of our Strategic Petroleum Reserves.  They do this in a criminal conspiratcy to create an artificial shortage that drives up the prices we pay for heating oil, gasoline, diesel fuel, jet fuel, oil used to make products like plastic and, of course, to grow the crops we need to live.  

WAKE UP PEOPLE!!!  If you don't get angry about being robbed like this and WRITE TO YOUR CONGRESSMEN, these oil bastards will just rape you, and rape you and rape you again!  They are stealing your disposable income, they are stealing the disposable income of your customers, they are the primary cause of inflation and they are sending a large portion of that money overseas, where it often funds terrorists who kill Americans.

Now these criminals are faking demand for 387,732,000 barrels of oil in September.  Those contracts are rock-solid, the people who sold the contracts are absolutely obligated to deliver the oil to Cushing, OK the following month.  Oddly enough – THERE ARE ONLY 367,000,000 COMMERCIAL BARRELS OF OIL IN THE ENTIRE UNITED STATES – delivering that many barrels of oil in a month would double our supply and send prices rapidly falling.  So, do you know what these criminals are going to do?  They are going to cancel 95% of them all over again to maintain the appearence of a shortage and gouge you at the pump.  

Does your Congressman care?  Write to them and find out.  Our Members have already written to a few Congresspeople and gotten a few good responses but it's VERY, VERY, IMPORTANT that you do it this TODAY, as a Senat Subcommittee covenes TOMORROW to explore whether financial firms such as Goldman Sachs Group Inc. and Morgan Stanley (MS)should continue to be allowed to store metal, operate mines and ship oil. At a time when JPMorgan faces a potential fine for alleged manipulation of U.S. energy prices, the panel will discuss possible conflicts of interest in the business model, said its chairman, U.S. Senator Sherrod Brown, an Ohio Democrat.

5 years ago, the previous administration sold you down the river and gave control of commodity pricing to the people who stand to profit from its increase.  Now the Senate prepares to declide whether they will allow them to do it for another 5 years.  Are you just going to sit back and let this happen?  

“When Wall Street banks control the supply of both commodities and financial products, there’s a potential for anti-competitive behavior and manipulation,” Brown said in an e-mailed statement. Goldman Sachs, Morgan Stanley and JPMorgan are the biggest Wall Street players in physical commodities.

The 10 largest banks generated about $6 billion in revenue from commodities, including dealings in physical materials as well as related financial products, according to a Feb. 15 report from analytics company Coalition. Goldman Sachs ranked No. 1, followed by JPMorgan.  That's probably the saddest part about this – in order to skim $6Bn in profits from commodity trading – they manipulate the price of oil and petroleum products 20% higher, costing US consumers $125Bn a year – just so these bastards can make 5% of it!  

It's not just oil, of course:

“While nearly a billion people go hungry, Goldman Sachs bankers are feeding their own bonuses by betting on the price of food. Financial speculation is fuelling food price spikes and Goldman Sachs is the No 1 culprit.”
~Christine Haigh, World Development Movement 

As with oil, gold, silver, agriculture… Price has become disconnected from supply and demand and is now merely a means of enriching the Banks and their Traders and has nothing at all to do with setting free-market prices.  Quite the opposite, in fact – they now control the markets with an iron fist and create artificial shortages to justify price hikes and I AM NOT MAKING THIS UP – JP Morgan is being fined $500M right now to settle a case in which they are accused of manipulating the energy markets in California and Michigan alone.  

Do you think they JUST manipulated it in those states?  Do you think it was JUST JPM?  On Tuesday, the Federal Energy Regulatory Commission ordered Barclays to pay a $470 million penalty for suspected manipulation of energy markets in California and other Western states by some of its traders. The bank is fighting the charges.  

For God's sake, PLEASE take 5 minutes and write you Congressman, especially Senators, and let them know you want this stopped.  In the very least, send them a copy or a link to this article and say "What are you doing about this?"  We got some interesting responses so far – especially from Rand Paul, who is going to repeal Obamacare to help us!  

If you keep electing people, who let their campaign contributors rob you at the gas station, on the plane, at the grocery store, at the restaurant – every day and make it the focus of their political life to make sure the United States of America continues to have the worst, most expensive (by a mile) health care system in the entire free World, which also robs you and your customers of their disposable incomes and funnels all of our country's economic growth into the hands of the privileged few – then you are getting EXACTLY the sort of Government you deserve!   

We are those privileged few, of course.  While I was writing this, oil fell from $108.50 to $107.75 for a $750 PER CONTRACT contract gain betting against the NYMEX crooks.  We'll play this debacle all day long and enjoy the ride but what about the rest of our countrymen?  Senators care when they get letter from OUR zip codes – let's put our positions to good use for a change.  

Thanks, 

– Phil

 

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Jabo:  Nice for a change.  Hate to push the "FU" quota so early in the week.  😉

Phil was pretty close to calling the bottom on gold (at 1200).

Now I am waiting for him to call the "top" on the market 😉

Then we could say "the slump" was like a Ty Cobb slump..

Wommer:  Quite a coincidence, I had the Goog $860s, too, evaporated like mist in the desert sun, lovely to watch!!  Or was that a Phil call [compliments to the chef if so].

jyoti:  "Heart of Dankness"  — the race for the Cannabis Cup M.H. Smith, Broadway Paperbacks]- is a great read, especially if you don't know [as I didn't] the difference between a sativa and an indica [big difference].  I gave it up when I became a father; perhaps I should reconsider, after all that LSD!

AAPL – interesting research note from Fidelity:
"The stock has effectively languished since the company's last earnings report, trading in a relatively narrow range with the bulk of the range between $400 at the low and $450 at the high. Such action usually begs the question of whether the price movement is basing, or topping. After earnings, we may well see the range broken either way and such a break is likely to be decisive from a price perspective. News that does not move the shares much would likely mean the range would continue until the next catalyst emerges. On positive news, likely to consist of guidance, the next resistance level above $450 to note is at $465.37 and then at $473.25, a pivot from earlier this year. On a break below $400, next major support would be at $385.10, the 52-week low. Below that, on a major negative surprise the next level to watch would be at $371.15. The short-base is effectively neutral which could mean more downside risk on negative news in the absence of short-cover."

These are astounding numbers:

http://www.wired.com/wiredenterprise/2013/07/google-internet-traffic/

Everyone knows Google is big. But the truth is that it’s huge. On an average day, Google accounts for about 25 percent of all consumer internet traffic running through North American ISPs.

That’s a far larger slice of than previously thought, and it means that with so many consumer devices connecting to Google each day, it’s bigger than Facebook, Netflix, and Instagram combined. It also explains why Google is building data centers as fast as it possibly can. Three years ago, the company’s services accounted for about 6 percent of the internet’s traffic.

“What’s really interesting is, over just the past year, how pervasive Google has become, not just in Google data centers, but throughout the North American internet,” says Craig Labovitz, founder ofDeepfield, the internet monitoring company that crunched the data. His probes show that more than 62 percent of the smartphones, laptops, video streamers, and other devices that tap into the internet from throughout North America connect to Google at least once a day.

Labovitz calls Google’s traffic “astounding.” The lion’s share of it comes from YouTube. But Google traffic involving search, analytics, web apps, and advertising is far from insignificant.

These guys are taking over the Internet….

These guys on the other hands are short-sighted:

http://tpmdc.talkingpointsmemo.com/2013/07/house-gop-pushes-cuts-epa-interior.php

House Republicans unveiled legislation Monday that dramatically cuts funding for the Environmental Protection Agency and various arts and wildlife programs.

The draft legislation (PDF), which will face committee hearings starting Tuesday, slashes the fiscal 2014 budget for the Interior Department and for the EPA by $5.5 billion from existing levels enacted for 2013 — a 19 percent cut that brings base funding down to $24.3 billion. It's $4 billion below levels already required by sequestration — automatic spending cuts that both parties say are senseless and onerous.

Or more likely in the pocket of the Koch brothers. Maybe they don't like their air breathable and their water drinkable.

Tea Bags/ Phil: I can help with that.

Zero

Thanks for the info. Ordered the book right away, sounds like a great read.

TSLA:  Wired's hommage to TSLA tech:  http://www.wired.com/autopia/2013/07/tesla-plant-video/

Sold some of my long GLD calls on this move.  Trying not to be greedy.

TSLA

And how many modern car plants are up for sale at bankrupt prices? How much to build a bigger new one?

nflx

Tea/ Phil: I would say yes. If you are interested we can talk. When I ran the numbers and scaled it up = insane.

Vega/ open to public:  aww dont open it up, what happened to our nice small group ? 🙂

Anyone knows the new subs addition expectation for NFLX this quarter? Thanks

NFLX might do a GOOG by tomorrow AM.

Very contained wheeee for NFLX – only down 5%.

Phil

I don't think they can afford to expand. New manufacturing in California is very expensive now that the state is broke, anywhere else would add transportation of common parts, and I wonder if the robots are maxed out doing multiple things already. Shipping stamped aluminum would be dificult to insure no damage, duplicating expensive as well as redesigning multi plants to do different parts. Car companies don't do it all but TSLA has to do much with small batches of unique parts. Then there is the financial/real profit?

I remember when I was thrilled to have a network running at 10 Mbps:

It's still not quite on par with Google Fiber, but Verizon today launched its fastest FiOS internet package ever, offering 500Mbps downloads and 100Mbps uploads to both residential and business customers. The new top Quantum tier is initially available "in parts" of every existing FiOS market, with Verizon working to extend availability to its entire high-speed internet footprint through next year.

Don't go changing your internet package just yet however, as the new premium offering comes at a premium price. A double play including the 500 / 100 speeds and a FiOS cable subscription costs $309.99 per month. That jumps up to $329.99 per month for a triple play that bundles in phone service; a two-year agreement is required in either case. Options are more limited for small businesses; they can only choose a standalone internet package that demands $369 per month.

And I was just ecstatic to upgrade to 100 Mbps… But now they have the freaking Internet coming to my house at 500 Mbps! For $300/month when 15 years ago a T1 line at 1 Mbps was $1500. Kids can now torrent entire pirated movies in seconds.

TSLA: cool video but the robots stole the show. All that programming….

TEA/ Phil: Yea lets talk. When I explored it too many slapnuts involved, if we can bring a business savy to this it will click.

Phil- I expect a sell off after the FOMC meeting eom. Wanted to hear your thoughts on how we can play it if new positions have to be initiated? To me the /TF is most vulnerable. Thanks.

broadband/stjean: $300 a month?? Yeesh, thats exhorbitant.  Got a 1Gbps Fiber line here in Japan for approx. $42 a month.  I think Korea is even cheaper.  The U.S. is so behind in terms of networking infrastructure.

telll me abouit it – i got sick of it and hacked into an undisclosed business connection with a nanobridge and provide three neighbors with my LAN – screw them
100MB / symmetric.

Phil:  If you have any comment about the possible trajectories of interest rates, I'd be glad to hear what you think. 

Thanks for the market update, Phil! 🙂

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