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Final 3 Days of 2015 – Looking Ahead

Things are looking up this morning.

Europe has come back from Boxing Day with a nice 1.5% pop in Germany, Italy and France while the UK and Spain are up about 1% as well.  11,000 is the bull line on the Dax and 10,500 is the bear line – so we're bouncing around in-between at the moment, just as we are on the S&P between 2,000 and 2,100 and the Dow between 17,000 and 18,000.  

On the whole, it's all just one big consolidation – but what are we consolidating for?  None of your time should be spent looking at the index charts this week – not when the volume is less than half of what it is on normal days.  Yesterday on SPY, for example, just 66M shares were traded and the average volume is 118M.  That was the lowst full-day trading of the year and it followed Christmas Eve's 48M so the two days together barely added up to a "normal" day.  

What you should, however, be concerned about is how FAKE the action was as it drove the McClellan Oscillator well into overbought territory.   The McClellan Oscillator is a breadth indicator derived from Net Advances, which is the number of advancing issues less the number of declining issues.  It's a momentum indicator, similar to MACD that gives us an idea of whether or not a rally is broad-based enough to be sustained and, clearly, this one isn't. 

NYMO  DAILY 

What we have going on at the moment is good, old-fashioned window-dressing – aimed at painiting a picture of 2015 that will be sold to potential investors in 2016.  The brokers need you to put your money in the market so they can charge you fees – that's how the game is played and it really helps their sales pitch if the market wasn't negative the year before so all stops are pulled out to get us green at the end of the year.  

Related imageCase in point – while JPM and other big banks have already raised the deposit rates they pay to their Top 1% clients, the only increase that was passed down to the bottom 99% since the Fed hike has been the fees they CHARGE for home, business and credit-card loans.   As usual, the rich get richer and the poor get poorer

If we expect the economy to turn around in 2016, we first need to see some changes made in the way money is distributed throughout the economy.  How is it going to help the Global Economy if the Top 1% get 10% richer but the bottom 99% stay flat or lose ground — again?   We've already milked all the rally we're likley to see from luxury stocks – even Imelda Marcos had to stop buying shoes once she ran out of closet space!

As we close out 2015 we have a lot of lingering problems in the Global Economy that aren't going to go away by raising credit card rates.  In fact, the US's $1.4Tn Student Loan debt pile would only get worse – as will our currently $320Bn annual interest payment on our outstanding $18Tn in Government Debt.  

Japan's faith in the radical reforms of Abenomics is failing, while China's growth is slowing. Latin America is also a mess – from Brazil's massive corruption scandal to Argentina's efforts to turn around its government.  The mood doesn't get better in Europe, as the continent faces an economic and refugee crisis, and Britain threatens to leave the EU. On the political and security front, the implosion of the Middle East continues.

We already knew the "unicorn" companies in the US had ridiculous valuations and that, in turn, trickled up to the Nasdaq, where valuations also got out of control (see AMZN, NFLX, etc.).  Hanergy (HNGSF) is a Chinese unicorn where $20Bn of PRESUMED market value has disappeared in 6 months.  Earlier this year, Hanergy was the World's most valuable solar equipment manufacturer and they are still huge ($1.6Bn) but their shares are suspended pending an SEC investigation.

Sure, it's only China and mostly Chinese investors who saw all their money vanish in a puff of smoke so who cares?  But what if next it's Uber ($50Bn) or Lyft ($3Bn) or Xiaomi ($46Bn) or AirBnB ($25Bn) or Palantir ($20Bn) or SnapChat ($16Bn)?  There don't have to be any shenanigans to kill the values – just a failed IPO or a shift in sentiment can do it and suddenly venture funds all over the country begin to report losses and the tide quickly turns and spills over into the broad markets.  

150 still-private companies have an impled valuation of over $600Bn and where, exactly, is that money going to actually come from?  When they do finally go public (or attempt to) they will be asking for Trillions in valuations and, as in China, that money will be drained away from old-school companies to support the dreamers – because investors, like unicorns, are always chasing rainbows – even though they have never actually caught one. 

There's a whole lot of chasing going on as we close out 2015 – we're not chasing anything until we see how 2016 comes out of the gate.  For now, we remain "Cashy and Cautious" into the New Year.  

 


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  1. /NG be Rollin, Rollin, Rollin!

    2.333


  2. Come on /SI.  Give daddy a new Macbook.


  3. Looks like they are trying to avoid finishing the year in the red! Futures are up nicely this morning. Monday could be a real test of the strength of this market.


  4. Good Morning

    Phil—great call on /RB—out for now


  5. I was waiting for a pullback on /RB to 1.2, but maybe we won't get that this week.  Nice pop if you caught it!


  6. does the mkt close early Thurdsay?


  7. Good morning!

    Boy, if these web connections were better I could live on a ship pretty happily.  I am starting to see the appeal of The World.  On this ship, there are 1,500 crew taking care of 3,000 guests so it occurs to me that we could all take turns 1 in 3 trips being the crew and then 2/3 of the time we'd have these lovely catered vacations.  I wonder what the other running costs of the ship are?    

    Good job Savi.  You might get another entry after inventories if they disappoint.  

    Fed gradualism sets us up for another financial crisis

    China Bond Defaults Seen Rising as Borrowing Costs Climb in 2016. Chinese corporate defaults will likely spread next year as borrowing costs climb, financial companies surveyed by Bloomberg said. All 22 bond traders, analysts and others surveyed forecast China’s corporate default rate will rise in 2016, while over 70 percent expect the extra yield on corporate notes to increase. The premium on five-year AA rated company securities over government notes has risen to 175.9 basis points after plunging to an eight-year low of 169.2 basis points last month. More firms in China are struggling to repay debt amid the worst economic slowdown in a quarter century. The number of listed companies with more debt than equity has jumped to 913 from 705 in 2007, according to data compiled by Bloomberg. Three Chinese manufacturers said last week that they lack funds to repay bonds due this month. Earlier in December, pig iron producer Sichuan Shengda Group Ltd. became at least the seventh Chinese firm to renege on local debt obligations this year.

     
    • A ship loaded with more than 25K pounds of low-enriched uranium has left Iran for Russia as part of a deal aimed to limit Tehran's nuclear program.
    • In a statement, Secretary of State John Kerry said the move was "one of the most significant steps" in fulfilling last summer's nuclear accord, and it may be only weeks before the agreement takes effect.
    • On "Implementation Day," roughly $100B in Iranian assets will be unfrozen, and the country will be free to sell oil on world markets and operate in the global financial system.
    Iran Adding to Global Oil Glut Dims Hopes for Recovery Next Year. Investors are losing faith in an oil-price recovery next year as Iran prepares to add more crude to a global glut. That’s good news for American drivers who have enjoyed the lowest gasoline prices in six years. Hedge funds reduced bets on rising prices to a three-month low and kept bearish wagers near a record high in the week ended Dec. 22, data from the U.S. Commodity Futures Trading Commission show.
     
    • Saudi Arabia's stock market dropped 3% in the first 15 minutes of trade today after the country unveiled a 2016 budget – the first under King Salman – that included measures to cope with a new era of cheap crude prices.
    • The plan will see heavy spending cuts, tax increases, and rises in fuel, gas feedstock and electricity prices .
    • Saudi officials said the government ran a record deficit of nearly 367B Saudi riyals ($98B) this year, or about 15% of gross domestic product.
    • Previously: Saudi Arabia plans spending cuts to shrink budget deficit (Dec. 28 2015)

    Saudi riyal in danger as oil war escalates. “If anything happens to the riyal exchange peg, the consequences will be dramatic," warns the country's exchange rate guru.

    Painful drop in Macau traffic in November

    • The Macau Statistics and Census Service reports traffic to the gambling destination fell 7.6% Y/Y and 1.8% M/M in November to 2.59M visitors.
    • The number of overnight stays were up 0.4% Y/Y, while day trips decreased 14%.
    • Mainland visits to Macau fell 12.6% during the month.
    • YTD Macau visits -3.1% Y/Y to 28.08M.
    • The decline in Macau traffic was widely anticipated, although operators hoped the opening of Studio City on the Cotai Strip in late October would create a wave of new visitors.
    • Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMY), Sands China (OTCPK:SCHYYOTCPK:SCHYF), MGM China (OTCPK:MCHVFOTCPK:MCHVY), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF,OTCPK:SJMHY).

    Furious Coal Baron Lashes Out: "Obama Is The Greatest Enemy I've Ever Had. It's Beyond Personal"

    • Transocean (NYSE:RIG) +3.1% premarket, bouncing back from a 4.9% loss on Monday on news that Shell had opted for an early termination to its Polar Pioneer contract.
    • The deal was scheduled to expire in July 2017.
    • Previously: Shell opts for early end to Polar Pioneer contract (Dec. 28 2015)

    Japan Steelmakers Fall as Inventories Rise Despite Output CutsSteelmakers led declines in Japan after an increase in stockpiles signaled a slower pace of a recovery as global peers struggle with overcapacity. JFE Holdings Inc., Japan’s second-biggest steel supplier, fell as much as 4 percent and traded 3.1 percent lower at 1,900 yen as of 11:24 a.m. in Tokyo. Tokyo Steel Manufacturing Co. dropped as much as 6.1 percent before paring its decline to 3.5 percent. The Iron and Steel Index fell the most among segments listed on Japan’s Topix.

    Asian Mining Stocks Fall With Metals as China Outlook Weighed. Asian materials shares dropped with industrial metals in London as concerns about demand from China’s slowing economy reasserted themselves. The dollar gained against all its G10 peers, while oil drifted lower after snapping its rally Monday.A gauge of mining shares dropped on the MSCI Asia Pacific Index, as BHP Billiton Ltd. and Rio Tinto Ltd. fell in Sydney. The MSCI Asia Pacific Index dropped 0.1 percent by 10:36 a.m. in Tokyo, with South Korea’s Kospi retreating 0.5 percent and Japan’s Topix index little changed

    Key Funding Source for Miners Is DepletedCompanies that provide the majority of ‘streaming’ financing are running low on capital. For struggling mining companies, an important source of financing is growing scarce. Contending with falling profits and hefty debt payments, mining firms such as Glencore PLC and Vale SA this year increasingly turned for cash to specialist lenders who pay large lump sums in exchange for metal deliveries.

     

    • It's not only severe weather that hit FedEx (NYSE:FDX) before Christmas. The shipping company is also attributing its delivery failures to volumes that "far exceeded all previous records."
    • "An unprecedented surge of last-minute e-commerce shipments" flooded in ahead of the holiday, FedEx said in a statement,
    • "UPS completed its deliveries on Christmas Eve, and customer feedback suggests everything was delivered on time," spokesman Glenn Zaccara said by e-mail.
    • Whatever the case may be, both stocks are down year-to-date: FDX -14.5%; UPS -12.8%.
    • Previously: FedEx lower after late shipments raise concerns (Dec. 28 2015)
    • Previously: FedEx plans Christmas deliveries after delays (Dec. 25 2015)

    GameStop on watch after Pacific Crest warns

    • Shares of GameStop (NYSE:GME) are on watch after Pacific Crest calls the retailer the "big holiday loser" of the season.
    • The investment firm notes that weak holiday traffic reinforces the negative impact of digital channels on the GameStop business model.
    • Pac Crest recommends that investors stay on the sidelines with GameStop.
    • GameStop closed at $28.49 yesterday vs. a 52-week range of $27.90 to $47.83. In a bullish view, SA contributor Josh Arnold thinks the +5% yield on GameStop provides a backstop for investors.

    Toshiba seeks new credit line for restructuring

    • Reeling from a $1.3B accounting scandal, Toshiba (OTCPK:TOSYY) intends to ask for a new ¥300B ($2.5B) credit line to fund a large-scale restructuring, a move that comes on top of a ¥400B commitment line secured in September.
    • Last week, Toshiba had its credit rating downgraded to junk by Moody's, and said it would slash 6,800 consumer electronics jobs, taking total cuts beyond 10,000.
    • A U.S. appeals court has cleared Cisco (NASDAQ:CSCO) of infringing another company's Wi-Fi technology, reversing a $64M judgment against the networking equipment maker in a long-running patent dispute.
    • After eight years of litigation that included a trip to the U.S. Supreme Court, the ruling stated that Cisco was not liable for directly infringing a patent held by Commil USA on a way to help spread wireless signals over a large area.

    Howard Marks Warns "Investor Behavior Has Entered A Zone Of Imprudence"

    America's 'children in the basement' won't be moving out any time soon

    Dividend Growth 'Mistakes' – Separating Fact From Fiction And Opinion

    Biotech Weekly: Top Value Biotech Picks For 2016

    Here is what could go wrong on Wall Street in 2016


  8. Nope, regular market hours Thursday but I'm done around noon!  Just because they are open doesn't mean they need us to watch them….


  9. Phil,

    "The federal government is trying to get taxpayers off the hook for billions of dollars of potential losses if another mortgage crisis arrives – and in the process, it's quietly giving birth to a new asset class. Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) next year plan to ramp up sales of new types of securities (called Connecticut Avenue Securities and Structured Agency Credit Risk) that in effect transfer potential losses in a housing downturn to private investors. The sales are especially notable because issuances of private-label MBSs, which also give private investors mortgage exposure, are still moribund."

    This should be the acronym for the agency handling this one… Mortgage Asset Securities and Structured Agency Credit Risk Enterprise – aka MASSACRE.


  10. LOL Naybob!  True if it all hits the fan again.  Still, smart of the Government to realize that, if they just pay 1% more interest, they can get investors to take on completely insane risks for them.  wink


  11. UGAZ – Boy did I get off the train too soon.  Bought some DGAZ at $12.55 to try and play a pullback in NG.  Strictly a scalp trade.


  12. Phil

     

    Did we do this roll on DIS from Friday?

    Thanks

     

    DC Mentions DIS and we were supposed to roll it and I do endorse that move but I really can't call it an official move until Monday – because so few people are here to play it.


  13. UGAZ/Albo – That one is rocketing up too:

    UNG not doing so bad either – looks like our Secret Santa play is already a hit:

    DIS/QC – Not officially (that I remember) but it was a good idea to roll – it was the end of a short day (thurs, not Fri) and it would be pointless to call it then.  Still hasn't been official since we're bouncing nicely already and $110 (our max) is clearly in sight for 2 weeks from now so the only thing a roll would accomplish is delaying when we get paid.  

    Star Wars numbers are huge and will only get huger as China opens next week – possibly crossing $2Bn at the box office by expiration day, or that weekend.  

    Looks like we're at Grand Cayman but I'm just going to lunch at a friend's house, then I'll be back early afternoon.


  14. AMZN….$700, here we come.  Happy New Year all…


  15. Phil:  I have BCS orders in for FB and GILD as well as sold puts. The orders are: GILD Jan 17 BCS 100/110 and 85 Puts (short); FB Jan 17 BCS 100/110 and 80 Puts (short). Are these the ones that you would recommend or not?

    Thanks, 


  16. DGAZ – Out for now -.25.


  17. IBM – Trading above the 50 dMA for the first time in more than 2 months.


  18. CMG/housekeeping – just looking over ST portfolio and I didn't see CMG puts – maybe you closed that? Happy New Year 


  19. War-torn economy sees prices soar as it plans to ease capital controls following IMF bail-out

    Inflation will hit 44pc in Ukraine this year, as the embattled economy has seen prices soar amid economic collapse.

    Consumer prices have hit eye-watering levels in 2015, according to the country’s central …


  20. Early on Saturday morning, the largest containership ever to visit North America arrived at the port of Los Angeles, marking the U.S. debut of a new …


  21. Iraqi PM declares ISIS will be ‘terminated’ in 2016

    The Iraqi prime minister, Haider al-Abadi, has arrived in Ramadi a day after his government declared the city liberated from Islamic State.

    Abadi kicked off his tour with meetings with security and provincial officials, reports said. The recapture of the city, where the Iraqi flag was raised on …


  22. U.S. Stocks Climb as Energy Shares Rebound

    U.S. stocks gained Tuesday as investors snatched up shares of energy companies and other big decliners of 2015.

    The Dow Jones Industrial Average gained 171 points, or 1%, in early-session trading. The S&P 500 and the Nasdaq Composite rose 0.9%.

    Eight of the top 10 gainers in the S&P 500 are down by …


  23. Via Finanz und Wirtschaft’s Christoph Gisiger,Howard Marks, Chairman and founder of Oaktree Capital, warns that investor behavior has entered the


  24. Voluntary Enslavement

    Submitted by Jeff Thomas via InternationalMan.com,In recent years, I’ve been predicting that the governments, particularly those of the EU and US,


  25. Gene editing was one of the most talked-about topics of 2015, and rightly so.

    One technique in particular, known as CRISPR/Cas9, has made it possible to quickly and precisely edit genes by cutting and pasting bits of DNA, opening the door to curing genetic defects and preventing the spread of …


  26. New York is finally getting its promised 5G gigabit Wi-Fi as the city starts upgrading payphone booths with the latest tech thanks to a public-private partnership that Google managed to get a slice of in an acquisition made earlier this year.

    Starting in beta today, up to 10,000 kiosks will get …


  27. Google has revealed the next generation of its Google Glass head-mounted display.

    The Enterprise Edition of the glasses has been rumoured for some time, but has now been confirmed in a filling with the US Federal Communications Commission (FCC).

    While the original Google Glass was aimed at consumers, …


  28. In Portugal, Claudia Barros writes that things are getting worse and worse:

    Individuals filing for bankruptcy or having no money to purchase food, are becoming more and more common in Portugal. It’s not just what we’re used to having and not able to survive with less; people struggle to get a degree …


  29. The War against Cash, Part I

    Politicians hate cash.

    That may seem an odd assertion given that they love spending money (other people’s money, of course, as illustrated by this cartoon).

    But what I’m talking about is the fact that politicians get upset when there’s not 100 percent compliance with tax laws.

    They hate tax havens …


  30. Carmakers are very slow when it comes to electric cars. Volkswagen makes one solitary electric model, as does Mercedes. The Toyota Prius? That’s a hybrid. There’s extraordinarily little choice if you want an all-electric car — and there’s even less if you want an affordable one that’s well below …


  31. Here is a review of the Ten Economic Questions for 2015.
    There are always some international economic issues, especially with Europe, China and other …


  32. The S&P 500 is down modestly since the beginning of the year. Through Friday, the 500-component index is down 2% in 2015.

    It would be doing much worse, however, had it not been for the heavy lifting of some mega-cap stocks. Consider Facebook, Amazon, Netflix, and Google, which are collectively being …


  33. Looks like some records have been shattered.

    While the final numbers won’t be in for a few more days, it’s clear that 2015 has been a record-breaking year in terms of sales for certain industries. Here are three categories that had a particularly stellar 2015.

    Movies
    By the middle of 2015, observers …


  34. The Oil Market Prediction Game<
    Anybody who tells you they know where the oil market is headed for 2016 is inexperienced, too stupid to realize there …


  35. What Have The Past 30 Years Taught Us About Managing Risk? by Knowledge@Wharton

    How Managing Risk Has Changed

    The problem with many catastrophic risks


  36. Most people would agree that it would be better to prevent cancer, if we could, than to treat it once it developed. Yet economic incentives encourage researchers to focus on treatment rather than prevention.

    The way the patent system interacts with the Food and Drug Administration’s drug approval …


  37. Enjoy those balmy winter afternoons while you still can. A dramatic weather shift could soon be in the offing

    It has been ridiculously warm across the eastern half of the country this month, with many spots likely to see their warmest December on record. New York City may reach as high as 72°F on …


  38. This week, the New York Post ran its annual edition of the “lol, look at the overpriced garbage tourists are buying on New Year’s Eve” story, a …


  39. Here's the pullback in NG that I was looking for.  Had the stop too close.


  40. DIS/Phil – so with all the great box office news, why not rocketing up? already baked in by Thanksgiving? Masking ongoing ESPN or other issues? Undisclosed problems with new park..?  


  41. /CL- It is amazing how they manage to keep the price higher into the holiday, because all the news is telling us that oil should be sinking even lower. The big one is the news that Iran is shipping nuclear materials to Russia thus opening the spigot to start exporting oil very soon and take back $100B in assets. I guess we will see the affects on Jan 1 or soon after, just as Phil has been saying.


  42. Hola people!

    Just had a fabulous lunch.  I see the markets are holding their gains and all is well.

    /NG/Albo – Seems like some healthy consolidation so far:

    This was bound to be resistance as we consolidated between $2.40 and $2.60 on the way down for a whole month:

    DIS/Scott – Good film revenues were pretty much baked in (and so was declining ESPN revenues) so it's really just a matter of which story has the most traction at any given time.  Remember, in the Butterfly Portfolio, we've been targeting $110 at Jan expiration since October – that took into account all of these factors, which is why we started shorting at $120 (which seemed dangerous at the time but ESPN was the reason I thought $120 would be the cap DESPITE the Star Wars mania).  So, on the whole, this is just the right price for DIS. 

    CMG/Rexx – We have the March $530/570 spread that we paid about $15 for and the March $530s are still $23 so no real danger yet.  I don't think we sold any puts either – just waiting to see how this pans out.   

    Meanwhile, short AMZN calls killing the STP!  

    Oil/Craigs – That's why I don't let short-term nonsense distract me from my long-term premise.  Given enough time, those macros do tend to come into play.


  43. Basic materials money flow – re the chart I posted yesterday. talking it through with a an institutional banker and he pegged it as pension-fund managers moving their cash into the market for end of year so their clients don't see a heavy load of cash on the books ("we don't pay you to 'manage' cash!"). Basic materials so beaten down, probably as safe a place as any for a week or two. Might see that get pulled right back out again at the beginning of the year as they get back to cash…


  44. LOL, and the LTP is up to $716K (+43.2%) so we're STILL treading water between that and the STP (a bit over $300K).

    AAPL held $105 pretty well, again.  We may have to be more aggressive on our put sale. 

    Materials/Scott – Interesting theory, we'll see how it plays out. 

    Even GPRO has a pulse today.  I have yet to see one among the 3,000 people on this boat (mostly upper-middle class). 

    Even more significant (and somewhat surprising) is that the vendors don't work with GoPro.  That I don't get, I would think parasailing and swimming with dolphins and diving would all be ideal for GoPro to team up with the experience vendors.  If they can't get it to catch on here – I don't see where their market is ever going to be.


  45. Wow, speaking of dips we should have bought – check out MCD:


  46. Noble Group Ltd., the commodity trader battling criticism of its accounting, had its credit rating cut to junk by Moody’s Investors Service on concerns about the company’s liquidity amid a broad downturn in prices for energy and raw materials.


  47. Canadian stocks fell, snapping a five-day rally as the market re-opened following the Christmas holiday, as Valeant Pharmaceuticals International Inc. slumped after the embattled drugmaker’s chief executive took a medical leave of absence.


  48. Consumer confidence rebounded more than forecast in December as Americans grew more optimistic about the current state of the economy and job market.


  49. Canadians are starting to lose faith in their housing market.


  50. Treasury five-year notes fell for a second day as a $35 billion auction of the securities drew the lowest demand in more than six years.


  51. Most Brazilian stocks declined amid a 53 percent dip in trading volume on Ibovespa companies after a report showed Latin America’s biggest economy posted its biggest primary budget deficit of the year in November.


  52. U.K. insurers may face claims totaling as much as 1.5 billion pounds ($2.2 billion) from businesses and homeowners for damage caused by two storms this month, according to consultant KPMG LLP.


  53. short term UNG plays really paid off well. We finally made a bottom call stick!


  54. for you short term guys, UNG is looking "evening star"-ish

    http://stockcharts.com/h-sc/ui?s=ung

    next couple of days could be down. I won't play it down from here but will add some longs if it does pull back.


  55. Winter is coming!


  56. thanks on CMG.  

    AMZN  grr

    Winter here (New Hampshire) First snow of season. Yikes.  Now stuck in the woods. I rented car that looks like SUV but doesnt have AWD.

                                                   


  57. Phil / T – Getting in the overbought territory - looking at selling some covered calls on this — 35 may be a good resistance line, was looking at the either the Jan '16 35 Calls or the July '16 36 Calls at 36 thoughts?


  58. MORT EOY dividend is only 0.500

    Last couple of years was ~1.50. What's the take on this position is a rising rate environment?


  59. Via Seabreeze Partners’ Doug Kass,“I begin every day by asking three important questions. One among them is this: ‘In a paperless and “cloudy” world, …


  60. Samsung thinks it’s about time that fitness trackers did more than monitor your pulse. It announced today that it’s put into mass production a new chip that builds in support for measuring five attributes: body fat, skeletal muscle mass, heart rate, skin temperature, and stress level (although, …


  61. The massive robotic mule developed by Alphabet-owned Boston Dynamics won’t see combat with U.S. Marines.

    LS3 (Legged Squad Support Systems) was meant to carry cargo for weary soldiers in the field. Funded by the Defense Advanced Research Projects Agency, or DARPA, the robot was capable of walking …


  62. I was having my second Frogasm of the night when dinner got weird.

    Not that this or any other night at Señor Frog’s in Times Square was ever fully conventional. In point of fact, I had already danced in a conga line wearing a three-foot-high crown of yellow and orange balloons that made me look like …


  63. The next big step towards sending humans to Mars

    NASA may dream of sending humans to Mars in the coming decades, but the fact remains that nobody’s really sure how we’ll survive the journey or set up camp on the red planet.

    The Orion spacecraft that will drive astronauts to Mars has a diameter that’s …


  64. Apple became the next version of itself this year.

    A changing public face

    Among the biggest changes was how Apple presented itself. Specifically, more of its executives spent more time in the public view, granting access, often proactively.

    This year, CEO Tim Cook did a lot of interviews by Apple …


  65. HOG – finding support?


  66. Streaming is making the music industry more unequal

    This year, in lieu of the traditional Best Of Lists, we thought it would be fun to throw our writers into a draft together and have a conversation. Jamieson Cox and Micah Singleton talk about how the rise of streaming music is making one of the music industry’s big problems even bigger. Apple is


  67. When Airbnb hired longtime hotelier and Joie de Vivre founder Chip Conley to serve as the company’s head of hospitality in 2013, it was a clear signal that the company was looking to evolve beyond its low-rent couch-surfing roots, and class up the user experience. Since coming onboard, Conley has …


  68. The Republican Fear of Facts on Guns

    The three rivals for the Democratic presidential nomination showed enough sense of responsibility in their debate on Saturday to freely discuss the nation’s epidemic of gun violence. Unfortunately, this was only half the debate voters deserve. The Republican candidates are callously ducking the …


  69. The chat-bot already interacts with 250,000+ fans on messaging service Line.

    Even though machines can now generate clickbait headlines and automatically write earthquake news reports in the name of journalism, live television has remained shielded from artificial intelligence. That hasn’t stopped …


  70. Samsung could be set to launch a new smart ring accessory that would allow you to control various smartphone, TV and home automation system features …


  71. Mobile, content and data dominated the marketing world in 2015.

    As the year draws to a close, I sat down with some of my marketing friends to discuss their ideas and predictions for the year ahead. The conclusion- 2016 is going to be one of the most competitive and complex years in the global …


  72. Below is a look at the 2015 year-to-date % change (local currency) for 76 country stock markets around the world. So far this year, the average …


  73. It appears $38 is the new strange attractor for WTI Crude oil as it coincides with the last two weeks’ “opposites” inventory data releases. Brent and …


  74. This year held a lot of surprises, from shocking incidents of terrorism and mass violence to Donald Trump’s ascendancy in the polls.

    Below are 11 of the developments that most amazed and astounded readers in 2015. This list is, of course, just a small fraction of many turning points from the past …


  75. Phil, I have trading SWKS for about a year now and like the pricing of the puts — seems to have been in a broad daily channel.  Wrote Jan 17 $70 puts w/ 40% return on margin.  Nice. Of course, the "internet of things" isn't going away and there is some parallel sentiment w/ AAPL.  Your thoughts please…. Glad to hear about your vacation.  


  76. A Timeline of Failed Tech Predictions

    on December 29, 2015 at 10:22 am

    Total Shares 0

    In the realm of technology, predictions about the future are …


  77. WASHINGTON — The hedge fund magnates Daniel S. Loeb, Louis Moore Bacon and Steven A. Cohen have much in common. They have managed billions of dollars in capital, earning vast fortunes. They have invested millions in art — and millions more in political candidates.

    Moreover, each has exploited an …


  78. Who’d think that a $150 video game controller would be so popular?

    Not Microsoft, apparently, which is having a tremendously hard time keeping ahead of demand for its newest gamepad.

    Despite the high price, it’s a fantastic gamepad — and apparently Xbox One console owners are responding to that …


  79. API oil inventories in an hour?


  80. The Tech That Will Change Your Life in 2016

    Entering 2016, the future never felt more within reach.

    Science fiction will become science fact this year when you take virtual-reality vacations and your dishwasher reorders its own soap. Are you ready for a drone that follows you around like paparazzi?

    When we gazed ahead at the devices, …


  81. Molycorp, the rare-earths metal producer, warned of a liquidation scenario and presented financial information that justified its exit from Chapter …


  82. A few months ago I traveled to Houston and wrote about the increasingly upbeat mood I encountered at the energy companies I visited there. I came …


  83. scottmi/Money flow

    So GLD should see some buying??

    regards


  84. Phil I have a position in TWTR that is killing my portfolio and my question is whether this is a company with a future that I hold on to and roll or is it a dying piece of crap that has a part time CEO and should sjust be cut loose. I thought it was the latter but I am beginning to doubt if them. I thought it was the future of news and how many people would get information, but I am not sure if it will be replaced by something else or if they can find a way to get back in favor with the market? I would love your thoughts since I just can't figure it out. My positions need adjustment, but I don't want to waste time if this company is never going to find it's way back to 30-40 in price.


  85. The Pew Research Center’s 2013 Global Attitudes survey asked 40,117 respondents in 40 countries what they thought about eight topics often discussed …


  86. The oil industry is overcapitalized, over leveraged and needs >$65/b oil to survive according to a research report issued to clients of …


  87. Companies can hire and fire perma-lancers at will. Is it any wonder the middle class is vanishing before our eyes?

    In the aftermath of the economic collapse in 2008, a significant factor in the decline of the quality of jobs in the United States, as well as in Europe has been employers’ increasing …


  88. Yesterday afternoon, Dealogic announced the for the first time in history, global announced M&A volume in 2015 would surpass $5 trillion. This record …


  89. TASR- What was the last entry you suggested for TASR Phil and would you recommend it again? I think you said something the other day reaffirming your belief that they are still undervalued, but I want to make sure I had it right? I may wait until after we see what happens to the general market in anuary, but I want to be ready if you think it is still your stock of the decade?


  90. Mules – couldn't help laughing at the Army's robot. They'd be better off using real mules, in all seriousness. Fine, underappreciated animals. I've ridden one on occasion, nothing wrong with them at all. Why make things so complicated except to enrich the manufacturer. Enrich some mule breeders instead.


  91. Who’s up, who’s down and where the money is flowing in New York’s $1.3 billion theater industry

    The Business of Broadway

    Who’s up, who’s down and where …


  92. Sorry Phil, This needs correcting… Tim Cook – 60 minutes interview

    Charlie Rose: And most Americans would be surprised to know that nearly all Apple products are manufactured by one million Chinese workers in the factories of Apple contractors, including its largest: Foxconn. Yet Tim Cook insists that China's vast and cheap labor force is not the primary reason for manufacturing there.

    Charlie Rose: So if it's not wages, what is it?
    Tim Cook: It's skill.

    Charlie Rose: Skill?

    ?Tim Cook: It's skill. It's that Chi--

    Charlie Rose: They have more skills than American workers? They have more skills than--

    Tim Cook: Now-- now, hold on.

    Charlie Rose: --German workers?

    Tim Cook: Yeah, let me-- let me-- let me clear, China put an enormous focus on manufacturing. In what we would call, you and I would call vocational kind of skills. The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we're currently sitting in. In China, you would have to have multiple football fields.

    Tim Cook: I'd love to bring it home.

    Charlie Rose: Why don't you?

    Tim Cook: Because it would cost me 40 percent to bring it home. And I don't think that's a reasonable thing to do. This is a tax code, Charlie, that was made for the industrial age, not the digital age. It's backwards. It's awful for America. It should have been fixed many years ago. It's past time to get it done.

    According to its most recent internal review, Apple has limited the work week to 60 hours, raised pay, and cracked down on child labor. But 30 percent of the facilities that make its products around the world still do not meet Apple's own safety standards.

    Tim Cook: We believe that a company that has values and acts on them can really change the world.

    About coming out….Tim Cook: When you're in a minority group, it gives you a sense of empathy of what it's like to be in the minority. And you begin to look at things from different point of views. And I think it was a gift for me.

    "it would take the average Foxconn worker more than 31 months, or about two-and-a-half years, to earn enough money to afford the $10,000 Apple Watch Edition they are helping to build. That’s assuming a monthly base wage of 2000 Chinese yuan ($320), according to China Labor Watch" – MarketWatch.

    Click on that MarketWatch piece, its worthy.  Our steelworkers have been locked out since Aug. the skills are still here despite the jobs being outsourced and therefore the schools no longer teaching skills for jobs that DO NOT EXIST.  Cook is a professional liar like most Sillycon Valley CEO's are.  Yeah if only our people would work 60 hours a week for $320 a month and Apple could pay no tax.  So much for that MINORITY EMPATHY of Cook's.  I'm only going to say the nicest thing I can.. FU COOK. OUT.


  93. Phil / T – follow up to the covered call prior  - the cost basis on the stock is 33.9..


  94. Natter… Foxcon did put up nets around their housing to catch the jumpers…

    shows how much they care.


  95. GLD/pat – yeah, I haven't seen it in /GC or GLD.. there was a little bump in GDX.  Basic materials is more than just precious metals though. For all I know, it could be Yellen closing out fed short positions in gold, coal, steel, aluminum, etc.  In any event, the money flow turned back in, and in a significant way (relatively). I'll be watching on a weekly basis to see if it continues.  


  96. SUV/Rexx – Those fake SUVs are the worst!  Without AWD they are even worse in the snow than cars  because they have screwed up weight distributions.

    T/Batman – I'd go conservative as this market rally may reverse next week.  If not, then you have a nice gain anyway.

    MORT/BDC – I like the REITs assuming a gentle rate slope by the Fed, which is very likely.

    HOG/Scott – Well, they are making $4/share so you'd think the low $40s should hold.  I think they could be fun for a poke down here ($46) with a long put sale.

    SWKS/Newt – I like them but tricky to play as they move pretty violently.  Long-term it's a great story so nothing wrong with the put sale as long as you can ride out a general market dip that threatens that $70 line.

    API/Jabob – As far as I know but I have dinner and a show tonight.  After last week's draw, I think anything less than -3M is going to disappoint.

    TWTR/Craigs – I like them long-term but it will be a long time before they turn back up.  It's very hard to gain that kind of traction and that by itself makes them valuable – they just need to figure out how to monetize it and if YHOO can double up (and they have several times), then so can TWTR.   Still, it's a LONG-term thing, if you want something to happen next year or in 2017 – I wouldn't count on it.

    TASR/Craigs – I don't have TOS running (too expensive) but you can get $5 for the 2018 $17 puts for a net $12 entry.  That's pretty good!  If you want to be more aggressive, you can pick up the $15/22 bull call spreads for $2.50 and you still have a $2.50 net credit with a $14.50 net entry as your worst case or you can buy 2x the bull spreads for net $0 and worst case is you own TASR for $17 and best case is you make $14 at $22 in two years.

    Mules/Snow – Much more sensible idea!

    Cook/Naybob – Good point.  AAPL will lead the world in building robot factories down the line. 

    Catching jumpers/Mkucs – Because retraining is more expensive than netting….  Also, the average employee dies in debt to the company store – they aren't letting them off that easily!  cheeky

    Gold/Scott – Lots of articles on how the CBs are working to kill off money – why would they not want to kill off gold too?


  97. Mules/Snow – what does mere -cost- matter when it would be WRONG to put an animal in harm's way on a battlefield… You don't think our Commander-in-Chief is so callous, do you!?


  98. Nattering – those invisible lines hat have been drawn haphazardly around the globe apply to people, not to capital. If you want to be worth $20B are you going to hire assembly technicians in the US for $3200 a month (Working 40 hours) or Chinese making $320 (working 60 hours)? It's simple math, and segregation, of course, the value the foreign workers add can get shipped here but they cannot. Manipulating this simple fact is why Mr. Cook and the Walmarts can possess $150B among the 6 of them, and 1B people possess nothing.


  99. Good article you posted Phil although it does make me sick:

    http://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html?smtyp=cur&_r=0

    The impact on their own fortunes has been stark. Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.

    How can these people complain about taxes in the US. Just makes you wonder why the middle class keeps on voting for the people who insists on the top 1% paying no taxes!


  100. oil weaker  dangit


  101. I have a fitbit, but I just upgraded to the Iphone 6s+.  Wondering if I should return the fitbitHR that I got for Xmas, and get the Apple Watch.

    Any opinions?


  102. Anyone see the API #? must have been a disappointment.


  103. up 2.9mm I think--sucks.


  104. Burrben – I had a fitbit used it extensively… then got an AppleWatch as a gift…. now never use the fitbit.  There are so many more features on the watch that i use as opposed to the Fitbit…. I was planning to wait for the next watch cause i think battery life will be better and it may have more health features ( along / w possibly slimmer) but i will now probably just by the new one when it comes out.  


  105. Phil—is there any chance that this AH drop in oil because of the AP # is a head fake and could reverse tomorrow? Or am I wishful thinking?

    I was really hoping oil would at least hang in there until the end of the year but I guess we will see what happens tomorrow.

    Really wish those AP #s would have been better. Dangit!


  106. Jabo- Probably not, but I have noticed that the price of oil can do very strange and unexpected things in the short term, even in the face of seemingly bad macro news. So if the EIA number is better than the API number you could see a bounce on that. I would expect a drop though if the EIA confirms a build in inventories. You may even see it spike up first on a head fake, but when they were expecting a decent draw and they get a big build, look out at some point soon. Watch out on NG as it can move in sympathy and you may see some profit taking. Good opportunity to reload though if it does since the weather is looking to be cold for a few weeks atr least on the East coast.


  107. Thanks craigs.

    How close is AP to EIA typically?

    I was pretty shocked to see the build but I guess I shouldn't have been.

    I guess you never know what tomorrow may bring.


  108. The S&P continued its push higher, closing over its down trending line of resistance (had pushed back four times). Notice, too, that its 50-day moving average has moved above its 200 – a very bullish thing if this continues on increasing volume. We now are in an overbought state (2-period RSI < 70).  Notice too, the down sloping $RUT:$SPX (relative strength ratio) line indicates that large caps have outperformed since Oct.


  109. Another horrendous year is drawing to a close in the oil patch. After starting out with hopes of a rebound, 2015 will instead punctuate the worst two years ever suffered by U.S. crude producers.


  110. The most destructive oil crash in a generation is giving ship owners a billion-dollar windfall.


  111. Chinese securities regulators are preparing some of the world’s strictest regulations on a trading practice at the heart of the global debate over high-speed computerized markets.


  112. The dollar may have trouble escaping from its year-end malaise after a gauge of whether U.S. economic data are beating forecasts slumped to the lowest since June.


  113. KaloBios Pharmaceuticals Inc., the biotechnology company formerly led by Martin Shkreli, filed for bankruptcy after it lost two more directors and the Nasdaq stock market decided to delist its shares.


  114. After months of holding out, the Philippines on Wednesday said it would join the China-led Asian Infrastructure Investment Bank before a year-end deadline for founding members.


  115. Treasuries pay the most compared with other government bonds in almost a decade — and the danger to debt holders is that U.S. yields keep rising.


  116. Stocks fell with commodities as the divergence between onshore Chinese assets and their freely-traded offshore counterparts widened, underscoring pressures facing the world’s second-largest economy as it grapples with slowing growth.


  117. If this year was about reading Mario Draghi’s lips, 2016 will be about reading his mind.


  118. It’s official: 2015 was the biggest year ever for Hollywood.


  119. Sidecar Technologies Inc., the third-biggest U.S. car-hailing service, said it will end its ride and delivery operations as the company is squeezed out by better-known competitors Uber Technologies Inc. and Lyft Inc.


  120. Chinese shares in Hong Kong fell, extending the biggest sell-off in Asia this year, as financial and energy companies dropped.


  121. Record-low coal prices and increased wind and solar generation that pushed European power prices to their lowest in a decade may cause further declines in 2016.


  122. China’s 10-year bonds dropped the most in two weeks as the central bank’s chief economist damped speculation lenders’ reserve-requirement ratios will be eased by saying any adjustments should avoid causing too much volatility to short-term rates.


  123. China, the world’s biggest clean energy investor, plans to increase wind and solar power capacity by more than 21 percent next year as it works to reduce greenhouse gas emissions by cutting its reliance on coal.


  124. The yuan traded overseas fell to a five-year low after China’s central bank cut the onshore reference rate to the weakest level since May 2011, adding to speculation that the authority is guiding a decline as it focuses on rejuvenating economic growth.


  125. Indian stocks fluctuated before Thursday’s expiration of monthly futures and options contracts, with the benchmark equity gauge headed for its first loss in four years.


  126. South Korea’s factory output missed estimates in November as poor due to weak global demand continue to weigh on production in Asia’s fourth-largest economy. 


  127. Copper in Shanghai rose to the highest in nearly seven weeks as metals markets in China extended an end-of-year rally. Prices in London mostly pared Tuesday’s gains.


  128. Phil - Catching jumpers/Mkucs – Because retraining is more expensive than netting….  Also, the average employee dies in debt to the company store – they aren't letting them off that easily! 

    They should rename it from Foxconn to Pottersville.

    BioDiesel - It's simple math, and segregation, of course, the value the foreign workers add can get shipped here but they cannot.

    They get as many of them here as they possibly can.  It's called H1B Visa which Sillycon Valley has used for decades to avoid paying higher wages to engineers, programmers, etc. All the while claiming "shortages" in our talent pool as those with Masters and Phd's, over age of 40, sit under and unemployed. LIARS and TURNCOATS, nothing more, nothing less. I understand the labor value add for the turncoat outsourcers, the simple math for them is all too complicated for the rest of us. As I would debate the "value those foreign workers add" based on the societal costs we have paid on the turncoats behalf.  .

    BioDiesel: "Manipulating this simple fact is why Mr. Cook and the Walmarts can possess $150B among the 6 of them, and 1B people possess nothing."

    And there you have it.  The time will come when the pendulum swings back the other way, until then, this is what we have.


  129. Good morning!

    Bad oil report took a toll on /NG too – down 4% this morning, back at $2.26.

    Gasoline holding $1.26.  I would have rather gone long at $1.25 but we can play $1.26 long with VERY TIGHT STOPS below and then try again at $1.25 and $1.24.  The chance of a good run makes taking some small losses worth it.

    Jabob – I don't know what on earth led you to make bullish plays on oil but you will be lucky to see $38 again.  It's /RB that runs up into holidays, not /CL (though they do move a bit together, /CL is the indirect effect – so hard to predict).  Overall, the macros are way against oil into Feb, at least.   

    As to yesterday's rally: Ramped in the Futures and Camped on low volume – end of story:

    SPY  5  MINUTE

    SPX DAILY

    SPX WEEKLY

    Still, we shouldn't complain, the LTP closed the day at +43.5% ($717,657), so they can go for 50% if they want.  Looks like they ran into a spot of trouble this morning, though, with Asia generally flat and Europe flat to down a bit.

    Labor/BDC – And if $320/month leases a $30,000 car then that's about the price robots will have to get down to in order to replace the Chinese workers.  Then it will all be about whoever provides the cheapest land and electricity – that's something an enterprising country should be working on.  Then the guy who owns the robots will join the Billionaires club while another Billion people move to the bottom.

    Taxes/StJ – Really sickening stuff.   It's almost entirely what's wrong with this country but notice these articles always talk about personal tax when Corporate Tax is way, way worse.  That's because the publishers don't want people going there.

    Of course, CNBC has the guy from showmethefees.com and he's pointing out that fees in 401K plans tend to rob people of 60% of their savings over the life of the plan – that's really sick!  

    Apple watch/Burr – Jackie loves her FitBit but it's only been 5 days – we'll see if she's still wearing it at the end of the month.

    Oil/Jabob – Very wishful thinking.  This is oil's last chance for a pop before possibly going a lot lower.  

    NDX WEEKLY

    RUT WEEKLY

    NYMO  DAILY


  130. Rick Santelli sums it up nicely

    "I don't know how they do it? Plunge Protection Team? Abenomics? Japanese buying futures? No matter what The Dow will not be allowed to end the year in the red…"