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Which Way Wednesday – Groundhog Day Again!

SPX DAILYI was almost going to just put up my Jan 13th post again.  

That one was titled "Weak Bounce Wednesday" and we opened that day at S&P 1,923 after bouncing almost exactly as high as we had predicted in Monday's (Jan 11) "Meaningless Monday Market Movement."  This is why "Groundhog Day" is one of my favorite movies of all time.  In that movie, Bill Murray plays Phil (great name), a weatherman, who gets trapped living the same day over and over again – yet he's the only one who is aware of it – for everyone else, they've never seen that day before.  

That sums up my job very nicely.  All day long I talk to people and reporters who are constantly surprised by things I have seen happen over and over and over again.  Each time, they have no idea what will happen next and, while there certainly are variations from time to time – I'm able to predict the outcomes with a pretty good degree of accuracy, not because I'm smart – but simply because I'm paying attention.  And I'm not the only one – this is from Dave Fry this morning:

Like Bill Murray it feels like a bad Groundhog’s Day again as markets moved right back down in volatile, what I believe, is a descending spiral.

For bulls, just when you think markets are ready for a big time rally, (nearly 400 points higher just last Friday), bears moved back in taking charge once again. I further projected on just last week Thursday we could expect a countertrend rally in the S&P from 1902 to 1956. We hit 1940 on Friday and have fallen once again to close at 1904.

Paying attention to repeating patterns does more than make our Members look smart – it makes them lots of MONEY because we're able to place our bets accordingly.  

Like yesterday – despite the falling futures in the morning I called for a long on Natural Gas May Futures (/NGK6), which opened at $2.13 and topped out at $2.19 for a $600 per contract gain.  We also reiterated our Trade of the Year idea on UCO/USO, which hasn't gotten away yet but, so far, it was a perfect bottom call at the open.

This morning I sent out an alert to our Members (and Tweeted it out for good measure) calling for long Futures plays at 1,900 on the S&P (/ES), 16,100 on the Dow (/YM), 17,200 on the Nikkei (/NKD) and 0.975 on Gasoline (/RB).  All made a few hundred Dollars before stopping out except Gasoline, which fell back to $97 for a quick stop out at the $97.50 line for a small loss.  Our long on oil at $30 also died at $30.50 with "only" a $500 gain – still good enough to pay for the Egg McMuffins while we wait for the market to open

We'll still like those lines long this morning as we expect oil to hold $30 and, more importantly, our bounce lines of 3 weeks ago haven't changed and neither have the macros we've been tracking so there's no reason for us to think we're breaking down here UNLESS Europe fails to pull it together at the -5% line, which is 9,400 on the DAX, down from 9,900 last week.  That makes, according to our fabulous 5% Rule™, a weak bounce 9,480 and a strong bounce 9,560 on the DAX – those are the short-term lines we care about in Europe and nothing is safe if the DAX is under 9,500. 

Locally, our bounce lines for the indexes are:

Dow 15,840 is the -10% line on our Big Chart, down from the Must Hold Line at 17,600.  That makes the weak bounce 16,200, about where we finished the day yesterday while a strong bounce would be 16,550.

  • S&P 1,850 from 2,100 was a 250-point drop and that makes for 50-point bounce lines to 1,900 (weak) and 1,950 (strong).  We were rejected soundly on Monday at 1,950 and that was a bad sign – right back to test the weak bounce which, for the moment, held up.  

  • Nasdaq, as I mentioned in the other post, is all about AAPL and AAPL is still on the outs at $94.50 but it's a BUYBUYBUY there, so we HAVE to love the Nasdaq to hold up at 4,200, even though it's the +5% Line on our Big Chart and well above our other indexes.  We did actually spike down to the 4,000 line on the 20th but let's call 4,100 the real floor and that is 600 down from 4,700 so 120-point bounces to 4,200 (weak, rounding down) and 4,350 (strong, rounding up) are what we'll looking for and 4,200 needs to hold so we can have faith in the others.  

  • NYSE tumbled from 10,450 (our -5% line) to 9,350 (-15%) since Christmas and that's 1,100 points so we'll be looking for 9,550 (weak) and 9,750 (strong).  

  • Russell 1,200 was our Must Hold line and we haven't held that since Thanksgiving – which is one of the reasons we've been so bearish since then.  1,000 is, however, 16% below that and 1,020 is the -15% line while 960 is -20%.  We've come nowhere near 960 (and, hopefully, we won't) so we'll work with that 1,020 line and that's not even weak – that's just better than hopeless!  For a weak bounce, we'll need to recover 1,050 and then 1,100 and no, the math doesn't work on those but the Russell is a crazy-assed index (technical term) which is prone to wider swings but does obey those round-numbered lines.  

We will need to take and hold at least 3 of those 5 strong bounce lines into the weekend or we'll have to up our downside hedges significantly!  Our bullish premise is based on the fact that oil is bottoming and that the oil sector has been a huge drag on the markets.  Ex-oil and oil services and the banks that lend them money – things are looking pretty good.  While China is slowing down, it's not stopping and the glut of materials will work themselves out – eventually.  Investors who were so badly burned in 2008 are being overly cautious in 2016 and we see many, many fine companies to invest in at these levels (see our Watch List)

We will revisit our Watch List in today's Live Trading Webinar (1pm, EST) and also go over some Futures Trading Strategies and hopefully we'll be well above those entry levels I posted above.  

Be careful out there!  


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  1. Good morning Everyone!

    There will be a webinar today at 1pm Eastern.

    Join here:

  2. This is going to end in tears… for the taxpayers! Bankers will of course be fine, collect their bonuses, get tax deductions for the losses and move along complaining about heavy regulations:

    Now, big money managers including Neuberger Berman, Pacific Investment Management Co. and an affiliate of Blackstone Group LP are lobbying lenders to make more of these “Alt-A” loans….Many of these loans come with interest rates as high as 8%, compared with an average of about 3.8% for a typical 30-year fixed-rate mortgage.

    ….There has also been a rebranding effort: Most lenders prefer to call these products “nonqualified mortgages” due to the stigma attached to the Alt-A category. By backing these loans, money managers said they would reach an underserved corner of the housing market: Borrowers who have good credit but might be self-employed or report income sporadically.

  3. Destroyers of world…

    And of course, the whole thing is a hoax anyway. Or, in the evolving language of denialist politics, “Not scientifically justifiable that this country should establish economic regulations that hit on the poorest,” says John Christy, an atmospheric scientist at the University of Alabama. In the role of “science says everything is awesome,” Christy describes himself as a scientist who builds datasets. His pride and joy is a collection of bulk temperature records taken from the Earth’s surface up to 50,000 feet above sea level.

    Climate scientists use surface temperature as their go-to dataset—most of the weather affecting humans happens well below 50,000 feet. That’s 20,000 feet higher than the top of Mount Everest. So the climate community is critical of Cristy, because including higher altitudes averages out the extreme temperature fluctuations that affect things like arctic melting, ocean warming, and sea level rise.

    But in the hallowed halls of the science committee, that kind of evidence is enough to throw into question the very theory that carbon dioxide increases air temperature. If the science ain’t there, why bother with all this pesky intergovernmental politicking and killjoy regulations?

  4. Japan's problems – will also become Europe's problems soon:

    Japan’s economy shrunk in four of the six years between 2008 and 2014. And in the two years it did grow, the best it did was 1.8 percent. The persistently disappointing growth figures might have something to do with policy. But they have a lot more to do with demographics. Very few developed economies, given Japan’s demographic circumstances, would be able to post positive economic growth, or inflation. Indeed, when you look at this way, it seems like the world may be holding Japan to an unrealistic standard.

  5. Probably going to get shut down in Congress as it's too good for the middle class and takes money away from the "makers":

  6. Good Morning!

  7. Good morning!  

    Now the pink lines are the stop lines @ 16,150, 1,906, 4,212 and 1,010 – very nice double-dip to start the day!  

    As expected /NG pulled back while oil went up ($30.75 now) but all of these moves are weak because the Dollar is down to 98.15 – almost a 1% drop from yesterday's close so this lame move up is strictly because the Dollar is being pushed back down. 

    Of course, that's holding /NKD back a bit but that's OK (17,275) – still a nice pop and that's their S1 line (one below pink), so still the laggard.

    Big Chart – Looks like a weak bounce failure to me.  Dollar better run back to 95 or I'm not sure we can make strong…

    Alt-A/StJ – LOL!  The underserved corner of the market they want to reach are the ones they can rape for what used to be called sub-prime loans.   And, of course, once they run out of the first round of suckers, they simply raise the requirements until most people are forced into high-spread loans.   And this is WITH regulation.  Imagine what they would do do us if we deregulate them further?

    Destroyers/StJ – It's hard to believe that they are either so dumb that they actually believe it or so evil that they don't believe it but use to forward their agenda.  

    GOOGL/StJ – Wow, such a fuss in the 2nd day ever that GOOGL is bigger than AAPL.  Talk about ridiculous extrapolations….

    Retirement/StJ – They don't want people to be comfortable in retirement because then they don't surrender their homes in reverse mortgages or keep borrowing until the day they die.  

    Well, so much for that rally.  I am much more cautious about triple-dipping on Futures plays so be VERY careful here (all stopped out again at the moment).  

  8. Phil the other day you discussed with one of our members was it CSCO or was it ORCL to get rid of ??


  9. Phil

    Good morning!

    I have a few of the AAPL Jan 17 $90/120 spreads left.

    I think we were net $13 in the spread in one of the PSW portfolios.

    Now the 120's are $2.9 and I am thinking of selling the March $97's for same and keep selling front month premium every month 

    What do you think? I did not see a play in reducing the strike on the longs from $90 down to $80 or anything like that 


  10. Dennis Cheatham said he felt as if he were receiving a message from the past last May when a package arrived in the mail from Nielsen asking him to participate in the survey that for decades has detailed the television viewing habits of Americans.

    He was eager to take part, but quickly ran into a …

  11. Phil/aapl

    Of course, I would buy back the $120's for $2.9 before selling monthly premium

  12. Phil TWTR receives a very negative view here in Europe. will they go down the tube same aplies to YAHOO ?

  13. Yodi – I believe it was ORCL…

  14. STX – Catching some bids.

    Euro strong.

  15. First in a series on what Harvard scholars are doing to identify and understand inequality, in seeking solutions to one of America’s most vexing

  16. Goldman Sachs CEO Lloyd Blankfein says he can easily explain what’s going on in the equity market right now.

    The rest of the market, not so much.

    In an interview with CNBC — his first TV appearance since being diagnosed with lymphoma and undergoing chemotherapy — Blankfein said he’s “generally …

  17. Down go coffee pods

    Several years ago, coffee pods seemed invincible. Sales of the single-serve cups were skyrocketing, more than tripling in the United States between 2011 and 2013 alone. Sales of coffee pod machines, meanwhile, were soaring too, growing from 1.8 million units to 11.6 million from 2008 t0 2013, …

  18. Unless California Governor Jerry Brown intervenes, the state of California will be executing Kevin Cooper on February 10.Cooper has been on death row …

  19. Countries throughout the Caribbean, Central and South America ?could? lose billions of dollars in international tourism revenue over fears of the Zika virus.

    The World Health Organization declared the Zika virus outbreak an international emergency, and travel warnings have been issued for 25 …

  20. /ES from 10+ to 11- in 1/2 hour what gives?

  21. Thanks Stj

  22. Phil, STJ – Thanks for setting me straight on the biotechs.  Still selling off strongly.

  23. Wells Fargo & Co. said Wednesday that it has agreed to pay $1.2 billion to settle a long-running suit that accused the company of “reckless” lending and leaving a federal insurance program to pick up the tab.

    The U.S. sued Wells Fargo in 2012, accusing the U.S. mortgage lender of engaging in …

  24. Retailers are facing a puzzle.

    Theoretically consumers should have more money in their pockets from low gas prices, low unemployment, and increasing (slowly) wages.

    Despite all of these tailwinds, retail sales have been reporting generally disappointing earnings.

    So why are many traditional retailers …

  25. Bernie Sanders on  Charley Rose

  26. Yodi, I asked about ORCL and Phil said didn't like it. 

  27. What goes up usually comes down.

    Record auto sales in 2015 lent a big boost to overall economic output, but Americans’ appetite for autos and trucks is falling from those highs. That slowdown hurt GDP in the fourth quarter, and it’s set to dent first-quarter output, too.

    “That number can’t go up to …

  28. With the market now predicting precisely zero rate hikes for the rest of 2016…

    … the Fed will have to take a machete to its next dot plot when it …

  29. The presidential election is certainly important, but in our horse race fervor we’ve forgotten what really matters

    As the actual voting starts for 2016 it is critical we not just fixate on the horse race, but also on just how much socio-economic deterioration has occurred over these last eight years …

  30. Thanks Scottmi

  31. Biotech / Albo – You are welcome. We are in a zone of support for IBB around 260, but if we are not done with the correction in general, 220 is more like the place where you might want to make a bet! And since a lot of bear market corrections will hit the 61% retracement, then around 180 is the last stand! Crazy…

  32. Hanging up on annoying telemarketers is the easiest way to deal with them, but that just sends their autodialers onto the next unfortunate victim. …

  33. Albo – Any news I don't see on FNSR? Up about 3% today, going against the tape!

  34. The deck is stacked against Sanders’ legislative vision. That doesn’t mean his vision isn’t of vital importance

    Much has been said and written about Bernie Sanders’ ambitious legislative agenda, especially now with his closer second place finish to Hillary Clinton in Iowa. In fact, over the weekend, …

  35. The generation gap looms large, with the old guard GOP against any drug-law changes. Jason Vaughn isn’t giving up

    “Prohibition will work great injury to the cause of temperance…It goes beyond the bounds of reason in that it attempts to control a man’s appetite by legislation and makes a crime out of

  36. STJ – Nothing I can find.

  37. I hope inventories help and doesn't kill oil today

  38. When children are introduced to something nutritious, they tend to reject it—which many parents don’t have room for in their budgets.

    Broccoli is nutritious, and it knows it.

    Since humans and other plant-eating animals have reason to consume a lot of broccoli, it has come to produce goitrin, a …

  39. FU oil!!!!

  40. Oh no, huge build in oil inventories:  Oil up 7.9Mb, gasoline up 5.9Mb and distillates up 700,000.  Things could not be worse!  Production dropped off by nowhere near enough to cover this.

    $30 barely holding – only holding because now Ecuador is talking about cutting production with OPEC.   

  41. ~~


    EIA Petroleum Inventory Data

    From Briefing :


    The EIA reports that for the week ending Jan 29:
    •Crude oil inventories had a of build of 7.79 mln (consensus called for a change of +3.5-6.0 mln)
    •Gasoline inventories had a build of 5.94 mln
    •Distillate inventories had a draw of 0.777 mln
    •Reminder: The weekly API data late yesterday showed a build of +3.8 mln barrels

  42. Phil, do you think $30 will hold by the end of the day or are we doomed again?

  43. Morgan Stanley must feel proud about their TSLA call.  Man that thing finally fell off the cliff.

  44. Getting rid of/Yodi – It was ORCL.  CSCO is on our Watch List!  

    AAPL/Maya – Well the Jan $90s are still $12.80 and they can be rolled to 2x the 2018 $85 ($20)/100 ($13.20) bull call spreads at $6.80 and you can leave the 1x short Jan $120s ($3) or roll them to 1x the March $100s at $1.50 as you can theoretically sell twice as much premium (at least) that way and plenty of room to roll.

    German 2-year note down to 0.5%.

    TWTR/Yodi – Still popular with the kids.  I think they are underrated.  

    Wow, everything falling apart now.  Europe down 2%+ again.  

    How about that call to stop out?

    Now we're on the green lines (S2) on the above Futures charts at 15,900, 1,865, 4,100 and 987.50 and I think it's worth a poke long (TIGHT stops) but I really don't like that the Dollar is now 97.60 and that's down 1.3% for the day and our indexes are down 1.5% so this is way worse than it looks.

    Gold $1,140!  

    Of all the days for copper to take off – Dollar driven:

    You're welcome, Albo.

    Rose/Jomp – He's a great interviewer.  

    FNSR/Albo – I see nothing….

    LOL – Oil is going higher!  

    Oil/Jabob – I don't know about the day but I'm super-comfortable calling $30 a long-term floor – it's simply not sustainable.  

    TSLA/Rustle – Wow, failing fast.

  45.  Phil – I see nothing.  Classic ! ! !

  46. GDX up 3% today with gold ripping. But that $15/$16 zone has been a tough nut to crack higher… I really don't want to cover there but at the same time, that gold rally hinges too much on the weak dollar it seems and that can't last too long when other countries are "paying" negative interest rate for your money!

  47. Phil/Stj/BDC/ABX

    Look at ABX fly. it was close to 6 just last quarter.


  48. WTW coming right back down.  Oprah doesn't have the power to change a company in the long term anymore.  Should've stayed on network television.

  49. LOL – and up we go again!  Quick 100-point gain on /YM buys us lunch so lock it in.  Keep in mind that, without the weak Dollar – we'd be 1-2% lower than this.  

    Europe soon to close, down 1.5% on the majors but Italy and Spain down 3%.  Didn't help us yesterday when they closed…

    ABX/Pat – Rewards for the patient.  

    Oil $34.43 after that report – AMAZING!

    /RB $1.004 so stop at $1 on that one.  

  50. AAPL now more valuable than GOOGL again – thank you very much!  cool

  51. Phil--we need WTI to be at 34.43

  52. Ugh, that was Brent, not /CL!  /CL at $31.62 but that's still up 6% on the day. 

  53. VLO   

    Does anyone know what's going on with VLO today?

  54. BAC at yearly low.  Currently at $12.80.

    Book value   $22 +

    Tangible book value  $15 +

    Stock selling at ~8.5 times 2016 estimate.

    Jan 18 $10 puts last traded at $1.17.

    Looks like a good opportunity to me. 

    Phil, what BCS would you recommend ?

  55. VLO / Gclay – TSO reported that margins are eroding for refiners so I guess that also applied to VLO!

  56. VLO / StJLuc


  57. Phil how does WTI go up 6% when the API report of 3.8mb build drives it down to below 30 and the EIA comes in at 7.8mb and a total build of 9.5mb? Last week we had the OPEC cut rumors to help but I haven't seen anything this time that would be a catalyst? You keep telling me that short term oil moves make no sense, but shouldn't there be some rhyme or reason to it? 

  58. when there is bad news and it still goes higher… I like that!

  59. /cl up must have something to do with dollar down

  60. Looks like some regulation is not a bad thing:

    As you can see, leverage skyrocketed during the Bush era, which contributed to the 2008 financial meltdown, and then plummeted shortly thereafter. Then it flattened out for a couple of years, and under normal circumstances it probably would have started to climb again when the economy began to recover. Two things stopped it: Dodd-Frank and Basel III, both of which mandated higher capital requirements and thus lower overall leverage levels. This has reduced Wall Street profits but made the banking system safer for everyone.

  61. Super Bowl 50 analysis is up.  Enjoy.

  62. AMZN – the bookstores story must be freaking out investors. Where are the 'BTFD' folks?!?

  63. Wow.  Somebody came in and sold almost 300 of the Jan 18 $10 BAC puts after I posted.  Bid now at $1.

  64. VLO/GC – Bad earnings from TSO and bad guidance from them. . 

    BAC/Albo – Good question for the webinar (got behind!). 

    Oil/Craigs – Because it's a SCAM!!! Geez, why do you still act like the short-term fundamentals matter?  blush The catalyst is Ecuador (and you know what a powerhouse they are) saying that they may be willing to talk about cutting production.  Anything is going to help at these prices.  And the Dollar, of course – oil is priced in Dollars.  

    Leverage/StJ – Thank goodness.

    OK, Webinar time!  

  65. Scottmi – Amazon – See the posts at the end of yesterdays forum (today early AM)

  66. StJL – refining margins – an exemplar of eroding margins.

  67. Ecuador – $20B in exports – #72 in global exports – 45% to their largest trading partner, US. Mostly bananas 15%, shrimp, gold and 45% oil.

    "As per Wall Street Journal reports, Ecuador President said today that a special OPEC meeting is to be held this month. Similar comments from the weaker OPEC nations and non-OPEC producers have hit the wires repeatedly in the last two weeks. However, the likelihood of such a meeting is low, as stated by Saudi and OPEC delegates. Earlier today, Russian official also said that there are no plans for an OPEC and non-OPEC meeting."

    FX Street

  68. STJ – Think this accounts for strength in FNSR.

    ~~Telecom equipment/component stocks rally after Viavi and Oclaro's strong earnings

  69. Thanks Albo! That would make sense and also make me happy!

  70. Margins / Naybob – Cut in 1/2 since last summer. I am guessing that the reduced spread between Brent and WTI is not helping as refiner were making a killing with that.

  71. Closed play on BAC buy stock @ 12.74 and sold March 11 call for 1.90 expected profit 11.21 % p. month

    down side protection 10.34 or 18.4 %

  72. Yodi – I like it.  I sold quite a few of the 2018 $10 puts 1.15-1.20.

    Stock is trading so far below book value that I would think they will be buying back large quantities of their stock.  Very accretive to earnings. 

  73. Somebody busted out the fun house mirror for bonds and the dollar.

  74. Defense stocks RTN, LMT showing well today, despite dollar, market

  75. Constructive action but Dollar at 97.28 makes it all questionable.  

    Reminder from early morning comments:

    February 3rd, 2016 at 6:32 am | (Unlocked) | Permalink

    That's why CHL is the only Chinese company I like as a long-term investment:

    It's been a while since it was back at $50 and options only go out to Jan but we can sell 5 of the $50 puts for $4.50 in the LTP and see how things go.  Happy to roll and DD to 2018 if they go lower (when they come out). 

    China Mobile: Just How Big is It? (CHL, CHU, CHA)


  76. Whats up with GOOGL?

    Did someone sudeny decided to sell a large offering?

    Would have expected it to hang around $800 mark, with the numbers they put up.

  77. CHL – according to the spreadsheet from Friday  5 CHL short 2017 $50 puts already in the LTP so this order is DD?

  78. Yodi/BAC  I don't understand your BAC  play. Your net cost  is 10.84 per share. In  March if that stock is above 11 you will be called away and net .16   How do you get 11.21% 

    "Closed play on BAC buy stock @ 12.74 and sold March 11 call for 1.90 expected profit 11.21 % p. month

    down side protection 10.34 or 18.4 %"

  79. Phil/AAPL

    Thanks- that kinda makes sense- will look for a good opportunity to sell the 2017's longs and get into the 2018 spreads

  80. OPEC/Naybob – What it does accomplish is making oil too scary to short at the moment. 

    Refining margins/Naybob, StJ – That's why we held short on VLO in the Butterfly when it moved against us – normal cycles of refining. 

    BAC/Yodi – In the Webinar, I was liking the short 2018 $10 puts, now $1.10 – net $8.90 is very nice for them.

    GOOGL/Maya – Someone realized they could trade it in for AAPL at those prices.  Their growth is nice but it's still 20x forward earnings.  AAPL is 9x forward earnings, not even accounting for their CASH!!!, so GOOGL being valued the same as AAPL is ridiculous and couldn't last.  Either AAPL had to go up or GOOGL had to go down – easier for GOOGL to go down but AAPL going up too – makes sense to me.

    CHL/LTP, Tangled – Oops, I forgot we did it already!  Well, at least I'm consistent!   One set of 5 is fine.

  81. /NKD still lagging behind at 16,980.  I have 2 overnight.

  82. Somebody is really working the day traders with all this chop!

  83. Phil,

      I have 1000 sh of SDS (net $20.00) and 2000 sh of SQQQ (net $20). Both are profitable, but are my only hedges, and as such, I think they could be improved upon. Could you suggest a better play?

      I'm also interested in your thoughts concerning a group of 2017 sold puts that I have that are not preforming well. An example would be 2 2017 CAT $85 puts (net $72.15) . Is now or in the near future the time to adjust near the (hopefully) bottom, or wait for it to play out further in time. I am a little concerned because I was assigned 400 shares of TWTR from a 2017 sold $35 put (net $31.05).

    As always,, thanks in advance

  84. GOOGL / Phil – There might also be some profit taking there… They went from $700 to $800 in a month or so. For many people, it's one good year right there. So when a stock like that goes up 15%, you take some off the table. 

  85. SDS/Kevin – Those are big positions.  You have the stocks and not spreads?  Way better off with spreads.  For example, the SDS March $21 ($1.90)/$24 (0.85) bull call spread is $1.05 and pays $3 if they S&P goes down not even 5%.  If the S&P goes up 5%, your $22,500 worth of SDS would lose 10% ($2,500).  However, if you put the same $2,500 into the spread (25 contracts), you would net back $7,500 (+$5,000).  While you limit your upside to $5,000, you take $20,000 off the table and let's say, for  example, you use that to sell 2 CAT 2018 $55 puts for $8 ($1,600).  Now you are net $900 overall and, if the S&P goes higher – it's likely the puts will expire worthless.

    As to CAT puts – I don't get net $72.15 – do you mean you sold the Jan $85 puts for $12.85?  If so, they are $25 ($5,000) and can be rolled to 2x the 2018 $55 puts at $8 ($2,400) and you recoup most of your losses without too much more commitment.  As to TWTR, that's annoying but hopefully they get bought out.  2018 $18 puts are a fat $6.30, so that's where I'd roll. 

    GOOGL/StJ – Yes and, at $500Bn – there's a lot of heavy hitters who I'm sure can use the cash to get more liquid against poorer performers they are trapped in. 

  86. Phil/401k

    I have a 401K which the company that I work for will not let me do anything other than buy the funds that they have qualified.  Last Oct when you table pounded cashy and cautious, pulled the money out of the funds to money market.  Any suggestions on when you get back in and put the money to work in the funds again?

    Thanks in advance

  87. Gerry BAC sorry a miscalculation on my machine the return is 3.58 % over the period until 18 March. and 2.57% p Month. Yes it was to good to be true, but still a good return. My mistake, to late for me here.

  88. Funds/Rookie – Well it depends what funds but now is a good time to put a bit into materials or financials, even housings.  Long-term, we're hopefully bottoming out in the cycle. 

    Nasdaq still lagging despite 2% move up in AAPL (but offset by 4% drop in GOOGL to some extent).  

    Oil hanging at $32.50, Brent $35.26 and Dollar still down at 97 – down almost 2% on the day.

    Tomorrow is a lot of data and Friday is NFP so this week is going to close with a bang!  

  89. Phil,

      Yes I have both SDS and SQQQ as stocks from assignments that I should have taken prior action to resolve. What spread would you advise for the SQQQ? I have 2000 of those, which is a lot more money than I realized. Thanks for pointing that out.

      I never thought I'd say this, but I wish in your teaching capacity you actually had exercises/tests, something like give situation in AM, give recommended action in PM. It would certainly give new meaning to Apple for teacher :)

  90. AMZN – Did Bezos hire Marissa?  Or that bearded guy from TWTR?!

  91. Nasdaq / Phil – Tough sledding when GOOG, MSFT, AMZN and FB are down! AAPL just can't pull all that back by itself anymore.

  92. /CL-  apparently the Russians floated another meeting room or today which is one of the reasons oil has moved up so aggressively, along with the dollar being down so far. Did see that. it should play out as it did last time with another big move down once the rumors are found to be just rumors. Just more manipulation for a weekend move up I guess. 

  93. That last comment was supposed to have said meeting rumor and not room. Sorry 

  94. SQQQ/Kevin – As mentioned in the Webinar, I wouldn't short SQQQ because I think AAPL has bottomed.  Hopefully you can sell with a profit and just add a few SDS. 

    True, StJ.

    Meeting/Craigs – I'm hearing about an OPEC meeting so much now it might be true!  Certainly would explain today's rise after that terrible report.

  95. I am not sure an OPEC meeting makes that much of a difference anyway except to mess up traders! They might agree on production cuts and all will go home and cheat on these cuts anyway because they need the cash… Especially if prices go up 10-15%! Same for US producers who are not OPEC members.

    The facts are that demand is lower and these guys just produce too much in the face of new supply sources.

  96. Wow, CLF up 21.75% today, into the green! Sold half (had douled down twice to bring average down to 1.84) and WHEEE! let's do that again!

  97. STJ – Not only that, but Iran isn't going along, especially if it's supported by the Saudis.

  98. Definitely Albo… All BS.

  99. OPEC/StJ – I agree, these guys haven't followed their own allocations for 40 years – hard to start now.  

    CLF/Mkucst – Isn't it fun when that happens?  

    Well, flat futures so far.  Flad /NKD too,unfortunately. Obviously not happy about the weak Dollar. 

  100. Funds/Phil,

    Thanks for the response Phil.  Unfortunately the funds selection is very limited.  Have a bunch of Vanguard and Fidelity but mostly OTC, small or mid cap or large cap,  International  but nothing focused on housing, metals, financials.  

    If AAPL is bottomed out, may not be a bad time to get in to one of the stock funds was my thinking.

  101. I agree Rookie – this is the bottom (1,850) we've been looking for, may as well deploy some cash.  

  102. CLF- A little hard to get excited about a stock that just got back to $1.90 when many of us got into this thing at $15 thinking it was a buy just 18 months ago. Fortunately I exited a long time ago as it sunk under $12. Still hard to get excited about this one though. I do hope this is the start of the recovery for it. 

  103. This is the kind of stuff that happens when commodities markets collapse.

    The CEO of South Africa’s main power supplier, Eskom, told a group of reporters that Glencore — the massive international commodities trader — threatened to cripple the country’s power supply over the summer, Bloomberg reports.

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  105. Oh I doubt it Craig, long way to go yet.  Short squeeze rally, maybe another bump tomorrow. It's just a stock I dug into, decided it wouldn't go bankrupt and stuck with averaging down. My cousin asked for my best choice for a long term investment, and at $2.60 figured this was as good a bet as any as long as it survived, and I was taken with the new CEO.  Luckily it was around 5 when I took the first plunge. I expect another test of the lows and another chance to lower my basis again, and a chance at some real profits down the road. It's been a learning experience. Just thrilled to get back to even, hoping my cousin sees it soon. He was getting pretty worried at $1.20

  106. Dollar Weakens Amid Growth Fears

    Global currency markets ran into turbulence on Wednesday, as investors dumped the dollar amid falling interest rates in the U.S. and continued nervousness about global economy, crushing a slew of popular trades so far this year.

    The dollar tumbled against the euro and the Japanese yen, posting …

  107. It was a volatile day for tech stocks.

    Apple is back, baby.

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  110. BEIJING (Reuters) – Chinese President Xi Jinping has used a traditional pre-Lunar New Year visit to outlying regions to call for more effort to be made in economic and military reform, two causes of key importance to his administration.

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  111. The Bank of Japan’s unexpected rate cuts to negative are a desperate attempt to help out the FED and to support the dollar at the expense of the

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  113. Bank of Japan governor Haruhiko Kuroda is going all out to ensure markets understand that the bank can, and will, cut interest rates further into negative territory should the need arise.

    Speaking at a seminar earlier today, Kuroda delivered a Mario Draghi-like address to the audience, describing …

  114. The current melt-down of the world’s debt bubble is likely to continue in the course of the next months. The secular trend to expansion of credit has

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  118. Phil/AAPL/Googl

    The price action today certainly supports your and Stj's thesis. Someone or some people thought AAPL was cheaper and decided to take some profits.

    That being so, the common sense in me said that they were not going to go below $770 (price before earnings report), even in a down market!!

    But I guess, as usual, there are more things in play here than we think about sometimes!

    Always something new to be learned! 

    Fun! Fun! Fun! Especially in cash! Did I say 'thanks'?

  119. Good morning!  

    Down and down the Dollar goes – 96.87 now.  Gold $1,146.60, silver $14.74 after topping at $14.80.  

    Not copper though, so you know this is just a currency move – not an economic one:

    2-3-2016 3-22-42 PM.png USO

    Gasoline making the power move on Thursday (of course):

    As expected, money moving out of /NG for now:

    I'm not happy with Europe's open.  Draghi with the easy talk in a speech again but no call to immediate action disappointed traders out there.

    /NKD hit 17,200 but weak Dollar keeping it from a bigger rally.  We were in at 16,985 though, so who cares?

    We're up about half a point so far and hopefully  DAX stays over 9,500 and we can get a real rally going. 








    Here's something you REALLY do not want to see on only a weak bounce:


    On the other hand, the longer-term trend shows we're still severely oversold:



    This is very much a watch and wait kind of day – just have to see if they can keep it together and make progress towards 1,950 (strong bounce), etc.

  120. Morning! 

    Gasoline has paid for lunch. Now time to put an Apple in the retirement plan and phone some pals in NYC and tell them to crank their heating up! 

  121. OPEC meeting update – Apparently, almost everybody BUT Saudi Arabia now wants to hold a meeting to discuss production cuts.  This is exactly what the Saudis want though, so I imagine they will wait until almost every possible producer is on their side.  There won't be any official negotiations with the US but I'd keep an eye on XOM, COP and CVX executives heading out to secret meetings.  When everyone is on board – that's the end game for the Saudis.

    Markets turning down already as the Dollar stops falling – still pretty grim out there. 

    CLF/Craigs – Well, in the LTP, we kept on rolling and doubling down and now we have 70 short 2018 $4 puts we sold for $2.80 in later Sept and they pretty much represent our loss, which was $19,600 less what little we collected at the beginning (so long ago) when we thought $15 was a good entry.  So I'm pretty THRILLED to see any sort of bottom forming and especially happy to see a huge move here because we need to be on track for a 100% gain but that $20,000 loss is already in our total and we stuck with the position so we stand to make $20,000 back.  I find that easy to get excited about.  

    Had our timing been a bit better or had we not been down overall as CLF bottomed and in no mood for more materials – we could have done another 2x roll and then we'd be almost even on this move back from $1.20 but it's already a $28,000 purchase commitment in the LTP – so we're just going to hope for the best as we have PLENTY of materials bets (because we expected infrastructure spending to start up this year).  

    GOOGL/Maya – I think the deeper look inside their "moonshot" programs spooked people with their big losses and no results.  Of course, that's why hardly any companies are willing to do R&D anymore so I'll be happy to buy GOOGL on a big sell-off ($600) because I LOVE R&D (why I like IBM and AAPL) as a long-term investor.

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    After four months, Android Marshmallow finally hits 1.2 percent adoption

    Android's Weakness Continues To Undermine Google

    The most dangerous idiot in America: Cramer: Google Earnings Show How Expensive Stocks Can Be Cheap

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    Alphabet’s ‘Other Bets’ Wager A Big Money Loser For Now

    Wait, Google's 'moon shots' cost how much???

    The International Spitting Match Over The 'Google Tax' Intensifies

    Meanwhile, looks like we cut our AMZN shorts too early!  

    LOL, Malsg – Good plan!  

  122. Phil, is your conviction on NKD mainly driven by the lower dollar?

  123. LOL – CNBC about to do a spot called "Is Tesla Doomed?" 

    /NKD/Options – Out of /NKD at the moment (back where we started).  My conviction was into the Japan open as they were likely to catch up with our move (they did).  Now just watching to see how today goes.

  124. Also, remember, /NKD likes a STRONG dollar (good for their export-driven economy), not a weak one. 

  125. Why is the dollar weaker?

    Also, are you being sarcastic on copper or u really mean the statement?

  126. CLF- Thrilled for you too if a bottom is indeed forming, but we still have a lot to worry about in the materials sector until we are sure that China, Russia, Emerging markets, US, etc. aren't heading for recessions all. I am just glad to be on the sidelines of this one watching instead of hoping not to lose more money on another roll down. I know that they will come back and money will be made, I have learned that I have trouble waiting more than two years for my stocks to stop dropping and then another couple of years (maybe) to recover. I know your strategy preaches patience Phil and that we had no way to see this rout of the materials sector coming, but I am glad to be out of CLF and watching and learning from you and others. Not that I have anything better, but I am waiting with some cash for opportunities that I hope will take less time to find their floors than this one has. I am somewhat worried that it may be some time before we have anything like that though as all the news just seems so darn negative right now. I hate to think of what will happen to the world if we elect a Republican and I worry about market reactions to a Democrat. Maybe Bernie will find a way to redistribute the wealth and make us all rich. As Alfred E Newman said, "What, me worry?" Sorry for the ramble, it was a bad sleep night due to arthritis pain from the weather. Makes me very cranky.

  127. Phil,

    The recent slump in the US$, where do you see the futures trades/ levels for today. We are starting to roll lower into S1 territory…..your thoughts and guidance appreciated. thanks