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.
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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
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..
positive news for medical marijuana stocks
http://www.collective-evolution.com/2013/05/30/new-study-shows-cannabinoids-improve-efficiency-of-mitochondria-and-remove-damaged-brain-cells/
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/
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
Or more likely in the pocket of the Koch brothers. Maybe they don't like their air breathable and their water drinkable.
Oil finising at $106.75. A bit disappointing on SCO/USO but great on the Futures.
Vegas/Wombat – Bring the wife, they have Spas and stuff…
HLF/Rustle – 85M shares and what could Ackman possibly have? Call it 20M (doubt it) and say he shorted around $40 (probably higher) so he's down $200M at $50 in a $12Bn fund – there's no breaking him on this one.
FLUX/Opes – That's a new one on me. They certainly seem to be growing but low money to burn ratio and big debt so I'd expect they dillute soon – maybe that would be a better time to get in.
BCRX/Randers – Congrats!
GOOG/Wombat – No saving those – they're just not going to go that way at this point unless AAPL has a huge miss and throws the whole market into question.
Top/Jabob – I have called the top, this should be it.
MJNA/Jyoti – Our base is .08 on that one in the Income Portfolio, we like them.
Medicinal values/ZZ – If it were more legal, I'd want to come out with a line of teas…
Only 69M on the Dow at 3 after that huge open – been dead all day otherwise.
AAPL/MrM – So, it could go either way?
GOOG/StJ – Uh, duh to that one! That's why they're buying up all the fiber. If the web can't grow, they can't grow at this point. They are like a fish that has reached the max size for the tank…
EPA/StJ – LOL, on the other hand, apparently humans are also like fish that have reached the max size of the tank and the Republicans have voted to stop cleaning the filters.
TLT failed $110.
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/
Tea/Newt – I wonder it there's a big enough market to just make pot tea for the legal outlets?
TSLA/MJJ – Very cool but watch that video and tell me how they get from 450 cars/day to over 1,000 without many years of work and billions more of machines? The fact is, they are so efficient, how much can they really improve things?
You can really see why 60% of the people in this country don't work anymore!
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.
HLF heading to $60 now – that's still gotta sting poor Ackman.
GLD/Albo – Good job, $1,350 was our bounce target and getting to $1,330 on a big move like that is close enough.
TSLA/Shadow – Exactly, it took them years to get this far and will take them at least a few more to double up but they are priced to double in about 2 years. As it is, they are barely hitting this year's target.
Not even cracking 110M at the close but maybe more after the bell.
Wheee on NFLX!!
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?
At the close: Dow -0.03% to 15539. S&P +0.16% to 1695. Nasdaq +0.29% to 3598.
Treasurys: 30-year -0.07%. 10-yr +0.06%.
Commodities: Crude -1.16% to $106.62. Gold +3.08% to $1332.75.
Currencies: Euro +0.35% vs. dollar. Yen -1.05%. Pound +0.55%.
Market recap: Stocks continued to grind higher following gains in global markets, but McDonald's held down the Dow after disappointing Q2 results. For the most part, companies have been able to clear a low bar of earnings expectations, although a flurry of reports are on tap in the coming week. Gold posted its biggest one-day gain in nearly a year; WTI crude fell back below Brent prices.
Tea/Newt – If I didn't have so much else going on. Still, remind me on weekend as I'd love to chat about it and probably have a backer – a guy who wanted me to help him set up dispenseries in NJ if they legalized.
Vegas/Micro – It's nice but it costs us money to put them on and, of course, we can't justify more than two a year. If we build it up a bit, aside from starting to attract interesting guest speakers, we can do them quarterly in different parts of the country. Our nice, small group can still get together for dinners and poker, of course.
NFLX/Vedan – I'm not sure what was expected but they added 1.2M to give them 37.8M so 3.2% growth simply doesn't justify a p/e of 642.
TSLA/Shadow – It's a big plant and I have no doubt they can spend another $1Bn or so and double capacity in 3 years and then add 50% more for another Billion 3 years later and be producing 1,200 cars/Day (438,000/year at 7 days/week) in 2020 and, if they make as much per car as they are making now (about $2K/car) that's $876M and their p/e is down to 16! See how easy it is to turn them into a value play!
Of course, 6 years from now you have to start wondering about the life-cycle of the original robots….
Texas Instruments (TXN): FQ1 EPS of $0.44 in-line. Revenue of $3.05B misses by $0.01B. (PR)
I remember when I was thrilled to have a network running at 10 Mbps:
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.
Futures heading higher by about a quarter point. China exploded up 2% at the open. Nikkei up 1%, India up 1%. Main news is Japan upgrading their economic outlook but, if you think about it – that means maybe less free money:
10 Mbps/StJ – Ah, those were the days. In that funny Moore's Law sort of way, we'll only have to wait another decade for Terabyte service at $99/month. Not sure what we'll do with it – maybe holograms by then. Quantum computers, terabyte connections – eventually big brother won't just be watching you – he'll probably be able to transport troops into your living room at a moment's notice…
TSLA/Newt – Here's an old article that highlights the point that their original factory bargain is a one-time thing. The cost of doubling production will be far more than the costs they've incurred so far.
Sell-off/Vedan – I've been expecting a sell-off since the the end of May. We got a little one but now we're way higher than May and testing the 5% lines on the RUT and S&P, with the Nas already over – so let's make sure they look weak before banking on a downturn. Still, it's those TZA Oct bull call spreads, like we have in the Income Portfolio, that I like the best. Remind me in the morning and we'll see which one is currently the best-looking.
Big Chart – Can't really stay bearish if we have the RUT and S&P + 5% with the Nas just 30 points from the +10% line! Once the Dow or NYSE hit their marks (16,000 and 10,000) – it's going to be silly not to play fro another big leg up.
Gig/Kinki – Wow, that's a great deal! Japan has the advantage of being small and compact – so worth the money they spend to lay fiber to 90% of the people. Still, it's a great base to build off and gives them a huge business advantage.
LOL Wombat – Good job stickin' it to the man. That is a problem for the providers – now they have such fast connections and WiFi is so good, that people may as well share super-fast connections unless they need them to pirate videos.
Interest/ZZ – I can't see them staying low long-term. Even the Fed admits that, one day, they will stop printing money. The question is when but look how fast things went up on just the taper talk. Still, between now and then the economy could have an event and rates could drop again – but that would be the time to short the hell out of TLT (back around 125).
6:36 PM A Southwest (LUV) flight has crash landed at NYC's LaGuardia Airport, apparently losing its front landing gear upon touchdown. The airport is closed to further landings for now. No injuries are reported. LUV has not yet issued a statement. Shares -0.5% AH.
Thanks for the market update, Phil! 🙂
Good morning!
Asia finished strong but Europe dropping off a bit over lunch. Majors are up 0.25% but Italy (1%) and Spain (1.5%) still very happy.
Oil down to our primary target at $106 band the Dollar is still low at 82.41 so we'll see how that unwinds. Gold down to $1,327 but holding up so far.
Same story on earnings this morning. Low expectations being met but many, many revenue misses. AAPL trumps it all this evening.
Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 FHFA House Price Index
10:00 Richmond Fed Mfg.
1:00 PM Results of $35B, 2-Year Note Auction
3:58 AM Asian shares are higher following comments by Chinese Premier Li Keqiang that the government won't tolerate growth below 7% and as poor U.S. housing data reduces fears about Fed tapering. Japan +0.8%, Hong Kong +2.4%, China +1.9%, India +0.8%.
4:07 AM European shares are mostly higher in mid-morning trading, tracking Asian stocks after the Chinese government indicated that it will aim to keep GDP growth to at least 7%. KPN +5.4% following news that it's selling its German ops to Telefonica. EU Stoxx 50+0.3%, London +0.3%, Paris +0.1%, Frankfurt +0.2%, Madrid+1.35%, Milan +0.6%.
6:00 AM Overseas: Japan +0.8%. Hong Kong +2.3%. China +1.9%. India +0.8%. London +0.3%. Paris +0.1%. Frankfurt +0.2%.
7:01 AM On the hour: S&P +0.2%. 10-yr -0.2%. Euro -0.09% vs. dollar. Crude -0.62% to $106.28. Gold -0.71% to $1326.45.
7:01 AM S&P 500 (SPY) futures +0.2% and Nasdaq 100 (QQQ)+0.3% amid another wave of earnings reports set to be capped by Apple after the bell. Europe's moderately higher with the periphery outperforming and Asia notched bigger gains overnight. China and Hong Kong each gained about 2% after Beijing suggests it would step in with stimulus should GDP growth slow much more. Treasury yields turn higher for the first day in a few, the 10-year up 4 bps to 2.51%.