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
Good morning!
Oil Lines
R3 – 111.19
R2 – 110.06
R1 – 109.17
PP – 108.04
S1 – 107.15
S2 – 106.02
S3 – 105.15
Friday's high and low – 108.93 / 106.91
Maybe now they will recognize that austerity is not a solution:
http://qz.com/106635/the-latest-sign-that-europes-plan-to-cut-debt-by-cutting-spending-just-isnt-working/
great article.
amazing.
FU GS,JPM, and the rest of the crooks!!!!
Got stopped out of oil at $107.85 for a nice gain. Looking to reload. Thanks Phil.
Good morning!
Meanwhile, no shift in position. In fact, the QQQ weekly bull spread is dead as the indexes are turning red now.
Dollar is down half a point to 82.38 so masking a much worse than it looks sell-off. Volume pretty heavy (relatively) at 23M in 15 mins.
Oil tapped $108 but now heading back down – hopefully we get a big one today but no reason not to enjoy those little drops (as noted in early morning comments).
TSLA – flying! Aug 100 puts are now 2.50, bought at 4.40 in the STP.
Phil, how about a good long term play on Copper. Being pragmatic, Goldman and JPM could win…
Go ABX!, Go GDX! And just in time, too. I'm way over invested in gold and other commodities…
Top article in Seeking Alpha today is "Market Cap Weighting: Tesla Joins QQQ" which is nice – but they were actually added a week ago! Doesn't matter to SA, facts are not their strong suit…
Paradox of Thrift/StJ – That's exactly the kind of Econ 101 that's been completely ignored by the Conservative, austerity supporters. And it is precisely because they are those wealthy families who are able to cut back on a few things and "fix" their budget. Excess is easy to cut – necessities are not.
Thanks Jabob. ABX $17.43 already, not bad for a change.
Oil/Bruce – Very nice. Good discipline. Should be a re-entry at $108 but watch out for the Dollar dropping hard and fast (82.22), which is keeping the price up. When the Dollar finds a floor, things will get more interesting.
TSLA/Nicha – That's why we started with just 5 contracts.
Copper/Rpme – It's going to take a long time for copper to turn around because China had/has huge stockpiles of it and global production is actually higher than demand because the demand included China stockpiling it WHILE they were building dozens of empty cities and hundres of airports and malls that are also empty now. Like CHK on gas and ABX on gold, I think it's silly to play with anything but the best and that's FCX, who are also super-low because they are 25% gold.
Over-invested/Arivera – Keep that in mind when you get a chance to lighten up and don't get greedy! When we get behind on a position – our primary goal needs to shift to getting out even.
Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
Quote of the day
“Under the old economics, shortages of money were believed to come from expenses exceeding revenues. The [NY] Times alludes to the new understanding of money shortages: They are racist in nature.”
~ Holmes W. Jenkins Jr. ~
Link WJS article here
Ck out new Best 2013 Mid-Year Idea here if you missed it
Cancer Genetics, Inc. (CGIX) — Progress in the Human Genome and Angelina Jolie
MARKET
Streaking to all time new highs – Wow!
The stock market, as best seen by the S&P 500 (SPX), just put on a blistering 132 points in 19 trading days, while the Dow added 992 points during the same period. The historic advance came off a deeply oversold low (McClellan minus 301) of June 24th where price had fallen below the lower trendline of the channel that had its origins in November 2012. The McClellan Oscillator had ticked multi-year and extreme deep lows on June 13th at minus 330.
Certainly the current market picture looks overextended yet the current McClellan Oscillator has backed off its recent one-year high of overboughtness a plus 217 to a neutral 143. So we could digest this recent spike with some back and fill that would temper the overextendedness and allow the moving averages to catch up. Also notable, is that price has yet to approach the trendline at the top of channel that goes back to 2009, but we are only 19 S&P points shy from that extreme resistance. Add in that the averages just barely have closed in new high ground so it’s possible that the old street axiom of “sell the first attempt at new highs” could be operable
The Market remains in a strong up trend, but prudence suggests some profit-taking here.
The global economy and ours too
It’s messy out there. European debt is at an all-time high as is unemployment, and we can say the same here in the USA. China is slowing down and industrial metals are just off their lows after a major retreat – so the boom fed by China is long gone. McDonald’s (MCD) numbers just fell short of expectations and has warned of a tough year ahead in addition, Microsoft (MSFT) and Google (GOOG) said the same on Friday. Detroit is going bankrupt and the unfunded liabilities in many other cities like Chicago and Los Angeles warn of more extreme tension ahead. Many states are totally underwater, but never fear we have a new way of dealing with debt and money shortages – you simply just print more.. Over the last few years we’ve added many trillions of dollars to the economy from the Fed, right out of thin air. For perspective, profits of companies in the S&P 500 approximate $1 trillion. This is not going to end well. And yet the stock market streaks.
Don’t fail to read the WSJ article by Holmes W. Jenkins Jr. on money shortages here.
The S&P 500 (SPX) closed Friday at 1693 – The prior Monday it was 1680
Key Channel resistance off the 2009 / 2011 highs is at 1711
The 50-day moving average support is at 1639
Short term ‘price’ support is at 1689 – 1684 – 1678 – 1672
Further out ‘price’ support is at 1648 & 1560 & 1536
And beyond that at 1485
Then deep channel and trend line support of (October 2011) is at 1509.
Then the deepest channel and trend line support of (March 2009) is at 1342.
The 200-day moving average support is at 1524
LQMT up today.
Peter Schiff gets his bear on:
There goes $107.50!
is FCX earnings tomorrow?
Phil — Schiff — Doesn't he ALWAYS have his bear on? He's a "stopped clock" on gold. And he hates any good news for the Obama administration.
FCX/Jabob – Yes, tomorrow. Not much expected of them – 1/2 of last year's earnings and a year that's down 15% overall. Last Q they beat by 2.8% and the above play is not an earnings play – it's just an initial entry into a long-term position.
At the open: Dow -0.09% to 15529. S&P +0.09% to 1694. Nasdaq +0.25% to 3596.
Commodities: Crude -0.25% to $107.78. Gold +2.15% to $1321.15.
Market preview: Gold and silver are having a nice run, but U.S. stock futures are little changed pre-market, with S&P Mini flat, the Nasdaq +0.1% and and the Dow -0.1%. The latter is weighed down by a 2.7% fall in McDonald's following a disappointing earnings report. Hasbro is -2.5% after its results. With the lack of a major downward catalyst, economist Kent Engelke expects shares to drift higher in the coming weeks. Later: Existing Home Sales
Notable earnings after Monday’s close: CNI, CR, HLX, HXL, NFLX, SANM, STM, TXN, WRB
Three breakfast reads:
1) It's Amazon vs. IBM in battle for the cloud
2) Netflix: Eight Massive Warning Signs
3) Microsoft (And Nokia's) Window Of Opportunity To Close The App Gap
Schiff/Esco – Yep, a perma-bear. Certainly doesn't seem happy this week.
Back on track with earnings… We have a big one tonight:
NFLX
Average Move – 13.7%
Priced into options – 14%
Consensus estimate – $0.41
Whisper – $0.49
This is actually accurate:
http://www.dilbert.com/
NUGT – Up 19%.:-)
That's a smiley. :-).
Savi: So how do I contact you and get all signed up?
StJ
Since the Vol is already built into the options, I guess a long straddle would be ineffecient ?
StJ
Sorry mate – that was NFLX
NFLX/StJ – As noted in news above, not all their acquisitions are going to be hits and, as I said last week, their upfront costs on this acquisition spree is very likely to exceed returns in Q2 and best-case scenarios are already priced in so I can only see a bearish case from $265.
NUGT/Albo – Congrats on that one, great call!
Markets hanging on well again but hanging on is the operative word. Just waiting for the shoe to drop, I think.
It's a pretty light data week but Housing was a downer today and we have more tomorrow and Weds – so we'll see if it's a trend. Euro-Zone PMI not likely to be improving and then there's our durable goods Thursday but much more about earnings this week.
This morning was awful, with CKEC, GCI, HAS, MCD, NVR and SIX missing (6) out of 15 and BOH (Bank of Hawaii) had -4.8% earnings and KMB was flat so not very impressive there either. NFLX, TXN and ZION are biggies tonight but tomorrow is MO, DD, FCX, LXK, LMT, MTG, BTU, PENN, RSH, RF, R, TRV, UPS and VLO in the morning and AAPL, T, BRCM, EA, FNB, IBKC, IRBT, JNPR, KKR, NBR, PNRA, RFMD, UIS and VNW at night. So, who really cares what happens today?
Oil hugging that $107 line – trying not to fail it…
Earnings – don't forget CLF after market on Thursday.
Phil: The Savi link you posted takes me directly to Microsoft Outlook. Outlook has never been activated on my computer and never will be (yes, I love Microsoft as much as you). Is there another way to contact Savi, like a regular email address?
Oil rants/Phil – Korea is not terribly happy with US feds tendency to ignore the rest of the world when making pronouncements: http://koreajoongangdaily.joins.com/news/article/Article.aspx?aid=2974776, and given their oil dependency, I'll bet they'd be really pissed if they knew about the manipulations of the NYMEX bunch and the degree to which it is allowed, even enabled. Phil, I'm going to look for a way to bring this to a level of awareness, hopefully alarm and anger, in the Korean government, using "The Best of Phil's Oil Rants". With any luck this will result in nasty phone calls to people in power in the US from people in power in Korea.
NFLX / Wombat – With these prices, going long does look inefficient. On the other hand, going short the last couple of times could have been painful – gaps of 39% and 23%! Actually we got hurt with 25KP is memory serves me well. Staying away is probably the best thing.
LV Update
I am sorry for the delay in updating- my Mom has been sick and that has kept me busy
Phil–got your e-mail will get back to you asap
we have the first 20 commitments–would be great if we can get 10 more by end of week –and 20 would be just perfect
as stated before please
e-mail me directly as I am in and out on the site and miss some of the queries
note to the 20 who have commited and not paid as yet– please send the $400 to my pay pal acct using my e-mail —if you are requesting the "issue refund" feature on pay pal please add the fee they charge to your pmt
savi_ted@hotmail.com
Thanks
Jbur
Outlook is the worst, I refuse to use it , just type in his address on any account; savi_ted@hotmail.com
Jbur
Didn't expect it to come out a link, don't click it, type in your address bar, and that will skip outlook.
HLF – New yrly hi. Ackman getting squeezed.
What if everything we’ve come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course? (NYMag)
Great read.
Re posting per requests——LV Meeting Novmber 10th and 11th 2013
I have been negotiating with Caesars in LV and have come up with the following deal (for it to work we need at least 40 people to commit)
the room rates at Caesars for Sat and Sun are $259 +tax, $109+tax respectively–no resort fee–free internet in rooms
registration fee will be $400 for the first 20 who sign up with a rebate of $75 from the next 20 who sign up and the 2nd 20 and the 1st 20 will get another rebate from the 3rd 20 who sign up—please note that the rebates are contingent on getting 60 or more registrants–(are your eyes glazing over as yet) the breakdown is as follows
1st 20– pay $400 -$75 -$50
2nd 20– pay $400 -$50
3rd 20 –pay $400
Two meals are included—lunch on Sunday and breakfast on Monday
please e-mail me asap at savi_ted@hotmail.com
shadowfax—thx —fyi I am a Her not a He 😉
CLF/Snow – I can't think that far ahead with so many earnings reports in between!
Savi/Jbur – See above (thanks Savi!).
Korea/Snow – That would be great. It drives me crazy that I can't get companies like WMT or MCD to be concerned but the problem is, they are out running their own scams and there's this general Corporate Code that prevents them from using their lobbyists against each other (not to mention endless conflicts from the lobbyists).
NFLX/StJ – Yes, staying away is good advice.
HLF/Albo – Poor Ackman.
Freak coincidence/Rpme – The same could be said about 100,000 years of humans…
NFLX – thanks guys – thought it might be an interesting straddle becasue of all the hype, but I'll follow suit.
Winston – thanks for the list. I like the BCS portion of it becasue I find short puts in IRAs really ineffcient becasue they're cash-backed ( even in PM ) I'm in the process of actually weeding them out if they're ITM.
Trying to negotiate LV with the wife /
HLF/Phil
Just looked at HLF after that comment. At one point is Ackman broke? Btwn that and JCP, his fund numbers have to be up their with Paulson's.
battery expert / lithium batteries / FLUX penny stock
Is anyone familiar with Flux Power Holdings (FLUX)?
Ron
BCRX on a run today- thanks for the idea. Should I take some profits on the Sept 1 calls if I am up +200%? ( Just kidding, you have trained us well ) 8)
Phil
I have GOOG 860 puts weeklies destroyed ( net $1 ) — now ( .20 )
Yo Jabo, what say ye on GDX, ABX, CLF? No love today?
mjj— 😉
https://www.youtube.com/watch?v=hszJv-P2yNE
https://www.youtube.com/watch?v=21JxnYVQGLM
savi
Sorry on the gender, another case of ASSUME.