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Flatlining Thursday – Markets Continue to Ignore or Embrace Bad Data

3-2-2016 3-16-46 PMWe're short today.

We didn't like yesterday's Beige Book from the Fed, which we went over live at 2pm during our Weekly Webinar and we made a few buck shorting the Russell but it then reversed overnight and I sent out a note to our Members (and on Twitter) this morning saying:

Flatlining, more or less in Europe after Asia was up 1% and our futures are flatter than flat and even oil is flat at $34.73 and /NKD skimming along at 16,900 so we'll just have to see what happens today but I stand by my interpretation of the BBook (bad) so, if we slip below these levels, we can short the laggards (4th or 5th to cross below with tight stops if any go back over the line):

Dow (/YM) 16,850, S&P (/ES) 1,980, Nasdaq (/NQ) 4,325, Russell (/TF) 1,065 and Nikkei (/NKD) 16,900

All are just over the line so 3 going under signals bear and then either of the 2 that haven't fallen are fair game.  The same logic can be used to go bullish but I've seen nothing so far to make me lean that way – including the Dollar back to 98.15, down about 0.5% and not helping much.   Oil is still a short below $35 (now $34.70 on /CL) and /NG testing $1.65 again means I like /NGK6 long again at $1.78 (as long as $1.65 holds on /NG). 

No change so far so, if you are a Report Member or above and getting this daily pre-market Email (8:35) or viewing it on-line while it's in progress (exclusive for Members), there's still plenty of time to short the laggards.  We have Jobless Claims and Productivity (or lack thereof) at 8:30 and then how can PMI possibly be good at 9:45?  We also have Consumer (Dis)Comfort at 9:45 followed by ISM Services and Factory Orders at 10 and the BBook and the recent Regional Fed Reports indicates they are NOT GOOD.  Things are bad enough on the data front that Dallas Fed Gov Rob Kaplan is scheduled to spin it at 10:45.  Kaplan is another Goldman Sachs puppet, who will likely do his best to tell us to REMAIN CALM – at least until Uncle Lloyd is done selling.

Kaplan, Kashkari (Minneapolis), Dudley (NY) and Harker (Philadelphia) are all Vampire Squid alumni who left amazingly high-paying jobs at GS in order to control our regional banks and set monetary policy for our nation.  It's not a conspiracy THEORY when 4 of the theoretical conspirators can be directly tied back to the bank, is it?  

Anyway, the markets are manipulated – so what?  The question is, how do we get our share?  Today we're shorting what looked like an extremely low-volume run-up into the close that took the S&P from down 0.5% to up 0.45% in the afternoon.  That's why we figured shorting (with tight stops) into this morning's reports would be a good idea.  We simply pay attention to the short-term indicators so, when these monthly reports come out, we know what to expect.  

8:30 Update:  Speaking of expectations, Jobless Claims were up 6,000 to 278,000 for the week (a bit high) but Productivity is down 2.2% while Labor Costs are up 3.3% and that is NOT GOOD for our Corporate Masters, who prefer to pay less money for more productivity – not the other way around.  Still, with rising minimum wages, this was not unexpected but, for some reason, analysts think Factory Orders (10) will be up 3% and ISM Services (10) will be at 52.9 and both of those numbers are setting us up for disappointment. 

We're just looking to make a few bucks ahead of Kaplan's speech, where he can spin the markets right back up if he says the right things.  Consumer Comfort, which is likely to come in under 45 and hasn't been over 50 (positive) since early 2006 though it was all the way down to 25 from 2008-2012 and we survived that so – think happy thoughts!  

Tomorrow, of course, we get the Non-Farm Payroll report and, if Consumer Comfort is over 45, then we can interpret the higher wages and lower productivity as hiring and training and, if that is the case, then we may get well over the 180,000 jobs expected in tomorrow's report.  Too far over though, and traders will worry the Fed is going to tighten in their March meeting (they won't) so we'd like a Goldilocks number, right around 200K but not very far over.  

We'll have to play it by ear – it's going to be a volatile couple of days and we've erred (if it is an error) on the side of caution as we have a lot of gains to protect from the last two weeks.  

 


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  1. Good morning!   

    KR    sell puts?


  2. Good Morning

    Need some help from someone who knows?

    My sister in Law Mexican Married to Norwegian man with residence permit in the US, has worked for a US company both having lived in Mexico, for the last 3 month they spent living in His house in Huston as he was treated for cancer and he died last week in Huston. Her name is not on his US banking accounts, neither on the title of his house, seem to have stock as well, she is still in Huston hardly speaks any English, Question what must she do , and what documents does she need to even get to his US banking accounts. She has not even the funds there to pay for his cremation. A lesson for all of as to learn if you not prepared when called!!! Please let me have a reply to my email yodiet@live.com not to clutter up our site. Thank you.


  3. Good Morning!



  4. Yodi, Did her husband leave a will?  Texas is not a community property state as I recall.  She needs to retain a Texas attorney versed in immigration law and process associated with probate. Have her document what her deceased husband written and witness verifiable wishes/directives were.  This is not a do it yourself process in my humble estimate. Best Regards to her and you.


  5. Newthugger no do not think so thanks for your advise most appriciated


  6. She will have to file a will with the probate court, get the death certificates IF there is a will. But not being a US citizen opens up a whole new aspect. Thugger is right, an immigration specialist would be first. Yikes-so many people never prepare their loved ones for this certainty, unfortunately. I am sure there are bilingual lawyers in Texas and that might ease things. She will need money, however.


  7. thanks pirateinvestor


  8. This week's webinar is now up! You can watch it on our YouTube channel here:

    https://youtu.be/hOnIMmlHPQo


  9. Yodi/Newt — Texas is a community property state, but that's only a small part of the many issues you describe. She should see a probate lawyer immediately.


  10. Good morning!  

    /NG off to a really bad start, /NGK6 testing $1.76 for the first time.  Maybe I'm nuts on this trade???

    Pro: Nat gas is bargain of the century

    Speculators boost net shorts in natural gas -CFTC

    Former Cheniere CEO Souki Starts His Own LNG Company

    CERAWEEK-Cheniere to export 8 to 10 additional LNG cargoes in coming months

    Anyway, I'm back to 15 long down here, hopefully pick up 2-3 cents to lower the basis on the original 10.

    KR/Stock – Sell puts because they had terrible sales numbers?  They do have costs under control and beat on earnings but a lot of the "growth" in sales was the acquisition of Roundy's.

    They make $2Bn a year and the market cap is $37Bn so not a bargain – especially for a grocery store.   WFM has a p/e of 21 and they have heavy growth.  SVU has a p/e of 8.5, half of KR and, at $5.15 per share, you can make some great options combos out of them like:

    • Sell 10 SVU 2018 $5 puts for $1.25 ($1,250) 
    • Buy 20 SVU 2018 $3 calls for $2.65 ($5,130)
    • Sell 20 SVU 2018 $5 calls for $1.50 ($3,000)

    That's net $880 on the $4,000 spread that's starting out in the money and TOS says $1,420 in ordinary margin so very efficient for any kind of portfolio and all SVU has to do is hold $5 and you make $3,120 in two years.  

    I'm sorry for your sister-in-law's situation and, of course, sorry for her loss.  Of course she'll need marriage certificate and proof of residence (hopefully same as his) and she'll need a local lawyer who specializes in estates.  Hopefully one of the Members knows someone in Texas who can help.  Ask her if she at least knows who his lawyer is – that could be a good first step.  You have to be careful to find an honest lawyer who won't take her for a ride and it won't be a quick process.  Tell her to also look through the bills and see if he had life insurance (and maybe she'll find a bill from his lawyers too).  If recognized as community property and no will, things should work out eventually but it's a long process. 

    And what everyone else said.

    Big Chart – Still holding up pretty well.  Indexes popping back up after a weak start already so be careful with any shorts!  Remember –  TIGHT STOPS!  


  11. I wish you both luck. She will need her marriage license to prove they were married also. Doesn't make any difference where it took place as long as she has the document to prove it. If he had a lawyer in Norway, she might want to check to see if a will was left there. Just off the top of my head these things pop in.


  12. IDRA-You might want to climb on board. this train is leaving the station. Go under the SEC filings and there is a report on this new cancer fighter. Very interesting and volume is picking up.


  13. We´re so overbought now the short definitely feels like the right trade here. I think any sell off ahead of draghi will likely be contained, but once he has finished chuntering away a healthy consolidation in SPY to 1950 area should be an easy trade.


  14. Hi Fellows,

    I thank you for all your help I will advise her as good as I can. yodi


  15. BDC – I've been buying some ENPH.  Stock has made a strong  50%+  since the low on Feb 24.  Are you still in this one ?  I'm finally profitable on this falling knife.


  16. Speaking of Biotech, I really liked that idea on LABU (Biotech Ultra-Long) from yesterday's webinar – enough to add it to the STP and the OOP (since they don't have longer options):

    • Sell 10 LABU Sept $5 puts for $1.35 ($1,350) 
    • Buy 10 LABU Sept $5 calls for $3.70 ($3,700) 
    • Sell 10 LABU Sept $9 calls for $2.20 ($2,200)

    That's net $150 on the $4,000 spread (magic number today) and LABU is a 3x ultra bull so all IBB has to do is twitch higher and this thing pays off big.  I like it because the downside risk is owning 1,000 shares of LABU at $5.15, miles below the current price and that makes you long-term long on biotech – which we certainly want to be!  


  17. Factory orders a bit weak and ISM pretty much in-line:

    Factory orders growth back in positive territory

    Non-manufacturing sector continue to grow at a slightly slower rate

    • Feb. ISM Non-Manufacturing Index53.4 vs. 53.1 expected and 53.5 prior.
    • Business activity 57.8% vs 53.9%
    • New Orders 55.5% vs 56.5%
    • Employment 49.7% vs 52.1%

  18. By the way, I don't know when they adjust these estimates but they are way off what they were yesterday.  I guess the economorons are tired of being wrong by 300% so they are trying to cut it back to no more than 100% misses. cool

    Natural gas inventories up next – should be interesting.   Still long 15, which shows I'm worried as I had 20 last week!


  19. Nice moves in gold and silver this morning.


  20. This NG page has a lot of good info: http://www.eia.gov/naturalgas/weekly/#tabs-prices-4

    …deciphering it all is another matter 


  21. Gold and Silver are flying as the Dollar falls another half point to 97.75:


  22. NG stays almost even with a small draw, but it seems to be enough for traders, although this could just be the head fake. CL moving up on the news though too, so who knows, Hope we all do well as I am long UNG in a spread from a while back (trade of the year).


  23. /NG/CRS – These are the two that matter and it's pretty clear what the problem is:

    But, it does show production has topped off finally and storage is dropping but not fast enough to get us under the top of the 5-year range.  Looking forward though, we know exports will eventually eat into storage (all else being equal) and it's hard to imagine production doesn't fall off at some point as drilling has been dead since last spring:

    Weekly natural gas rig count and average Henry Hub

    Case in point – very small draw but /NG popping back up.  It's just too freakin' low:

    Natural gas inventory draw rate declines in the last week


  24. FU UNG!!!!!


  25. Wow, the fix must really be in with Kaplan – the market is rallying on nothing now.  

    Consumer Comfort will be interesting in a few mins.

    /TF testing 1,070 lined up with 1,980 on /ES, still 16,850 on /YM and 4,312 on /NQ so a mixed bag with /NKD down too at 16,835 so, technically, /TF is still the best short if the S&P gives up 1,980. 


  26. what jabo said


  27. See all the profit-taking on /NGK6 at $1.80?  That's not a good sign.  That was $1.68 on /NG.  

    Consumer Comfort still weak but mixed:

    Consumer confidence declined in the last week of February to the lowest level of the year as Americans’ perceptions about the U.S. economy and the buying climate waned.

    The Bloomberg Consumer Comfort Index fell to 43.6 during the period ended Feb. 28 from 44.2 the prior week. A measure of whether it’s a good time to spend posted its weakest reading in six weeks.

    Steady hiring, gradual wage gains and still-low gasoline prices are helping underpin households’ attitudes about their financial situation. The comfort gauge has been stuck in a 1-point range since the end of 2015 as optimism is constrained by uncertainty surrounding weak global markets and a pickup in core inflation.

    "The latest personal income and outlays report indicated stronger-than-expected consumer spending fueled by increased wages last month, " said Gary Langer, president of the New York-based Langer Research Associates LLC, which compiles the data for Bloomberg. "But core inflation also rose more than anticipated."

    Consumer prices, excluding food and fuel, rose 0.3 percent in January, the most since 2012, figures from the Commerce Department showed Friday.

    Buying Climate

    The Bloomberg measure tracking whether Americans think it’s a good time to purchase goods and services dropped 1.8 points, the most since the end of November, to 39.9 after being little changed over the previous two weeks.

    The measure of views on the current state of the economy eased to 35 from 35.5 the prior week, while the weekly personal-finances index crept up to 56 from 55.5.

     

    The Bloomberg Consumer Comfort figures showed sentiment among full-time workers declined to a five-week low, while part-time employees were less pessimistic than a week earlier. Confidence worsened among all age groups except those 18 to 34. Sentiment for Americans earning more than $50,000 a year climbed, while confidence of those making less was little changed.

    So, what's going on?  Bernie voters feel better about the future than older voters.  That's why we have that red and green paragraph, the rhetoric people hear trumps what they are actually observing in their own wallets.  That's why I do have an underlying bullish outlook for the US – I think things are improving slowly and steadily but it will be a long time before the voters begin to realize that.  


  28. Oil over $35!   

    I'd like to short it but I'm very long /NG now and that would be kind of betting against myself.  

    Indexes all over the lines now so no shorting unless they break back down.  


  29. A joint venture between mining giants BHP Billiton and Vale is to pay $1.1 billion (£780 million) in compensation and repair costs over a dam disaster in Brazil dubbed the country’s “worst environmental catastrophe.”<p>BHP on Thursday announced that it has reached an agreement with Brazilian …


  30. 40 top banks have trialled trading fixed income products over 5 separate blockchains — cryptographically secure networks inspired by the technology underpinning digital currency bitcoin.<p>R3, the industry-wide body trying to bring blockchain technology to finance, announced on Thursday that its …


  31. Bill Gross is at it again.<p>In his latest investment outlook, Bill Gross writes about how the sun will eventually swallow the Earth whole instead of nurture life.<p>Which, it seems, is sort like what has happened to capitalism, just at a faster rate. First helpful, then harmful.<p>Here’s Gross (emphasis …


  32. To be among the top 10% in San Francisco, your salary needs to reach at least $238,855. And to crack the top 25%, you need to earn $141,790.<p>That’s according to an interactive tool from The New York Times that allows you to enter your household income and compare your earnings across 344 zones …


  33. Phil Thanks for SVU and LABU 

    I just have taken a little different approach by for members who do not like the put sales 

    Bought the stk SVU @ 5.14 and sold the Apr. 5 call for .39 gives a flat return of 4.9 % in 43 days 

    With LABU bought the stock at 7.35 and sold the Apr. 7 call for 1.40 flat return in 43 days 14.3%


  34. I'm finally hitting a couple of things especially with continued strength on CNX XOP RIG etc. Especially CHK, wow!!, and I bought in only like a few days ago!

    The one uber-laggard is UNG. That production graph says it all. <10 bcf to 45+ ???? That's 4X production gains in 5 years. This is great for all of us heating homes with NG but for investing in an ETF that rolls through futures ….. not so much!

    My premise is electrical production is shifting quickly away from coal: natural gas is cleaner (easier to extract, no ash leftover to deal with), the plants are more versatile (can be sized more dynamically, can be turned on/off more quickly, better suited for a grid with lots of intermittent renewables generation), and of course emissions contain contain less contaminants and about half as much CO2 generation per kWh (if anyone cares about the latter). So now with electricity prices still fairly fixed, or going up for a lot of people in reality, and generation costs at a historical low, there'll be a huge run up in NG demand as these small, distributed plants come online. It just takes time though.


  35. In 2014, Dave Kerpen, chief executive of Likeable Local and author of “The Art of People,” received a postcard that illustrated the traits and behaviors of successful and unsuccessful people.<p>The card came from fellow Entrepreneurs Organization member Andy Bailey, the chief executive of Petra Coach. …


  36. An update on China’s big ball of money which we have seen pouring into stock, bonds etc before…<p>Right now it’s still sloshing hard into Tier 1 …


  37. <i>“It has not been easy for me. And you know I started off in Brooklyn, my father gave me a small loan of a million dollars.”</i><p><b>–Donald Trump, at a town hall appearance, Oct. 26, 2015</b><p><i>“He (Marco Rubio) also said I got $200 million from my father. I wish. I wish. I got a very, very small loan from my</i> …


  38. Whoa, haven't checked in awhile, Ethereum is at 9.19  (!!!!)

    http://coinmarketcap.com/


  39. A recent survey of Harvard Business School alumni found that fully 71% of respondents felt their business was harmed by rising inequality, middle-class stagnation, growing poverty, or limited economic mobility. And 66% of respondents felt that addressing these issues mattered more than promoting …


  40. BEIJING — With the world looking to China for assurance that it can manage its slowing economy and tumultuous stock market, President Xi Jinping has begun pushing a remedy that sounds less like Marx and Mao than Reagan and Thatcher.<p>Mr. Xi is calling his next big economic initiative “supply-side …


  41. One month ago, when looking at the latest Canadian official international reserves, we noticed something strange: Canada had sold nearly half of its …


  42. There’s a distinct whiff of optimism in the air where crude prices are concerned — something that has trickled down to stocks.<p>There was good and bad news in Wednesday’s U.S. crude production data. First the good: Oil production fell for a sixth straight week, and is now at the lowest since Nov. …


  43. Have to give my trader friend credit for a great call on energy stocks yesterday.  We are seeing some monster moves in a lot of the small cap and mid cap names !  Over 50% moves in some cases.


  44. Brazil’s Economy Shrinks by Most in 25 Years

    RIO DE JANEIRO—Brazil’s economy suffered its biggest contraction in 2½ decades last year as the country’s recession stretched through the fourth quarter with little sign of abating.<p>Gross domestic product shrank 3.8% in 2015, Brazilian Institute of Geography and Statistics, or IBGE, said Thursday. …


  45. Gold futures inched higher Thursday, and the yellow metal was on pace to post a weekly gain of nearly 2% even as stocks, typically viewed as riskier, also are on track to post solid returns.<p>Gold set for nearly 2% weekly rise, even as stocks gain on week<p>Gold futures moved higher Thursday, and the …


  46. Former Republican presidential nominee Mitt Romney charged into the increasingly divisive 2016 GOP White House sweepstakes Thursday with a harsh takedown of front-runner Donald Trump, calling him a “phony” and exhorting fellow Republicans to shun him for the good of the country and party.<p>”His …


  47. Ooops, says Herbalife

    Herbalife, the Los Angeles based purveyor of nutritional shakes through a multi-level network of sales people, has announced a snafu in relation to …


  48. If you thought that drones were just a bit of fun, or even if you think loads of novices flying them around is a bit dangerous, nothing is quite a scary as the UK and France’s new joint plan: the drone to end all drones.<p>The £1.5 billion ($2.1 billion) Future Combat Air System will see the creation …


  49. The global super rich continued to splash out on super-yachts and luxury goods last year, despite a decline in their overall wealth in the wake of financial market turmoil.<p>According to the latest wealth report from estate agents Knight Frank, published on Wednesday, sales of super-yachts – boats …


  50. Pharm/IDRA,

    you take on IDRA as pointed out by privateinvestor.

    regards


  51. IBM handed out another batch of pink slips to workers on Wednesday, in a round of layoffs that some employees described as “massive.”<p>The exact size of the layoffs could not be determined, but the job cuts are part of ongoing changes to the tech company’s workforce.<p>IBM won’t comment on or disclose …


  52. ‘Greenfield’ FDI – crossborder investments in physical projects excluding M&A, increased by nine per cent last year, to $713bn. Oil and gas attracted …


  53. At the Lee Valley consignment sale near Tekamah, Neb., dozens of used tractors, planters and other equipment were on the auction block for farmers trying to save a few extra dollars. It was a muddy day, with trucks and four-wheelers leaving deep black ruts – fitting conditions for an industry …


  54. UNG is still making fresh 52 week lows, so any entry here is trying to grab the knife. To that end I now have March 11th 6 calls. The last two weeks (I'm assuming my 7 calls for tomorrow are toast) were a bust.


  55. My 3 digit drop call yesterday in the Dow is looking like it has a chance now.


  56. LABU/Yodi – I like that one.  We're so spoiled we forget to appreciate the simple things that can make 10% a month! 

    RIG/BDC – Wow, first time I've heard them mentioned positively in years!  cheeky  Don't focus on the production gain on UNG because we're only at the top of the 5-year average in inventories so that indicates that demand is keeping pace (think of how many power plants dumped coal for NG already).  Also, there was a huge (and too early) ramp-up in anticipation of exports starting sooner but the logic is sound – even if the timing is off.  

    At some point, we will be exporting over 100Bcf/week and, looking at today's 48Bcf draw – we can chew through the 1,000 Bcf that separates high inventories from low in just 10 weeks at that pace.   That means that, in reality, we will need a substantial INCREASE in production before our exports ramp up and, if we don't get it (and we won't as the drilling stopped last spring), then we'll suddenly be looking at shortages in /NG until the high prices get production back on-line. 

    As you note, it takes time but I'm betting that it won't take as long for that very obvious logic to become common knowledge for investors and /NG will get popular with speculators again in the next month or two. 

    Here's Romney's big, planned, Trump-bashing speech, being covered by CNBC and Bloomberg, who rarely give Obama more than 5 mins before they cut away.  

    Ethereum/BDC – See what's going on with Bitcoin?  http://www.businessinsider.com/r3-fixed-income-trading-blockchain-experiment-2016-3 – this could be a good time to push GreenCoin again.  

    Woops, there goes $35 on oil again – they can't hold it. 

    /NGK6 can't hold $1.80 either ($1.67 on /NG).  angry

    And wheeee, Romney drives down the indexes!  Game on again for the shorts!  


  57. I think they are almost guaranteeing Trump goes 3rd party on them.  


  58. 1,066.50 is a good stop on /TF now, nice $350 pickup to make up for the loss earlier.  


  59. HMY AUY ABX – tightening down operations and costs has huge benefits on its own, but consider now the following math: Let's say theoretical Gold Mining Corp (GMC) had 1,000 in revenues and 1,000 in costs for a net revenue of $0. So after adding in the GSA, they're losing money. For mining, fuel can be as much as 30% of the cost, and gold has gone up 15% just recently. So cut 30% in half for the saved fuel (15%) and add 15% to the gross revenue and the same company is now making 1,150 – 850 = 300! They are making 26% margin now for doing absolutely nothing different than they were doing the previous year. Add on the fact that during the mining crunch a bunch of laggards and over-indebted companies fell off at the margin and you've got big opportunities.

    For the the record, I think gold sees 1500 before it sees 1100 again. It may run to a new high (1900 ish). We could be looking at a ….. golden …. opportunity here folks (pinky in corner of mouth, oh yes)


  60. UNG / Phil

    I've got plenty of UNG, and happy to further increase the trade but UNG is deteriorating a fair bit. What do you think of UNL as an addition to UNG? UNL has lost 18.7% less than UNG over the last 12 months.


  61. The one who fully embraced a Trump endorsement in 2012….?ffffff..fade away Romney!  :)


  62. Phil/3rd   Either way, there will be another Dem in the White House…..


  63. GreenCoin could handle 10X the traffic bitcoin does without blinking, maybe like 100x before it became a question. That's the benefit of 6+ years of software prototcol upgrades. Now you just have to know about it…

    Definitely this is why ETH is up and a lot of the other altcoins on the coinmarketcap list.


  64. LABU/Yodi – THANK YOU!


  65. BID starting to look pretty strong. Should we be adjusting the short calls, or wait for expiration?


  66. Justa you wellcome with these pays you can either get called as you have capped your profit and you out and done or you might rollor you and go for an other round. But you do not get burned on a put! On dips those puts grow like sunamis!


  67. Logic/Phil – obvious and rational are what seem to always bite me in the ass. "Timing is everything" is too true when using options.


  68. ABX, FCX, RIG, CLF, NRF… whoa..nice recent moves..

    Phil--do you have an opinion on CLD??? I remember in the past you had said why buy CLD when you could buy BTU instead. Both have been horrible… Do you think CLD has any hope?


  69. UNG   March $5.50 calls  @ .50


  70. just saw UNG April $6 calls trading 3600 contracts


  71. Got my Solar City (SCTY) proposal, let me state right off, that for me it is not worth it.  But for those who are curious, this is how it works.  They look at what you are paying for KWH from the electric company first.  For me it was a low 15.5 cents so the savings from them as of now is only 15% as they charge you 13.1 to lease the equipment with a 2.9% increase each year.  If you want to buy the equipment overall, it would've run me about $24,000 after all credits, was $64,000 before credits.  Obviously this would be the dumbest thing to do because you're panels might be worth a fraction of this in 5 years as newer more efficient ones come out and are produced for far less money.  So if you don't buy upfront, you lease with the option to purchase the panels outright at fair market value in 5 years.  They do not set the fair market value, it is actually the fair market value.  If the company goes out of business (which is very possible with their debt) they have to have money, with each panel installed, set aside to pay another company to continue the same amount of maintenance on your panels.  If for some reason you are using more energy than the panels are taking in, you are still with your power company and can get extra electricity from them.  If you have extra KWH that you do not use, the electric company will buy them from you each month and keep that credit on the books until the end of the year.  When all is said and done, if it were a 50% savings, it might pay to do it but the risks for me is electricity comes down more in price and you are stuck at that fixed level going up, panels become not only more efficient but smaller which would change the cosmetic look of your roof, and we possibly end up finding a whole better way of solar power without roof panels or a different type of energy altogether.  So very easy to do a pass but interesting, always wanted to know how it worked so allowed them to do proposal.  Side note, you get one free Nest thermostat if you join in March ($270) value.  Big whoop.


  72. LABU – another conservative play: just bot Sept 5 calls, sold sept 6 calls @ net .55. starting 15% in the money, returns 80% in 197 days (148% annualized) if stays above $6.


  73. Rustle – Good info on SCTY panels.  Thanks.


  74. CSCO/Phil

    You said to remind you in chat about a play that you wanted to do on CSCO.

    Were you thinking of a butterfly play?

    Dec


  75. TSLA had a similar run at the same exact time last Thursday.  Smells a bit suspicious to me.


  76. LABU – and filled some June 5/6 Bull call spreads at .60 which will yield a 55% gain in 106 days (191% annualized) if says above $6.  


  77. Rustle- solar panels- $45,000 in credits- is this all subsidies? 


  78. Argh!  Windows 10 just forced a massive update on my PC.  Hopefully it won't blow up now.  I got up to get some food and, when I came back – it said "do not touch".  What BS.  

    Gold/BDC – Yeah, I still think it has a lot of legs – especially the miners.  

    UNL/Enfil – Only short-term options so I don't play them but yes, the design leads to less decay.  Instead, I pick conservative positions on UNG (or they seemed conservative at the time!).  

    Romney/1020 – Good point.  He was very effective in his assassination speech though.  

    Donald Trump Endorses GOP Candidate Mitt Romney In Las Vegas

    “Donald Trump has shown an extraordinary ability to understand how our economy works,” Romney said, citing Trump’s record as a job creator. And, he concluded, “it means a great deal to me to have the endorsement of Mr. Trump.”

    “There are some things that you just can’t imagine happening in your life. This is one of them,” Romney mused at the press conference where he accepted Trump’s endorsement.” Indeed. He went on: “Being in Donald Trump’s magnificent hotel and having his endorsement is a delight. I’m so honored and pleased to have his endorsement.”

    Trump will use this against Romney later and make him look like a fool.  If Trump is smart, he'll point out that Romney is exactly the kind of party-controlling Billionaire his fans are sick of and, if anything, it will galvanize the Trump support.  

    BID/OOP, Palotay – Damn, that's unfortunate but we sold 15 out of 40 March $22 calls for $1.05 so we're just going to roll them along as our spread is $15/23 with 15 short $23 puts we sold for $7.77 – essentially the short $22s (now $2.90) are our protection on the play.  The July $27s are $2 so we could roll to 21 of those even and still be only 1/2 covered – no sense worrying when we have such an easy fix.

    CLD/Jabob – Do you know what ABX, FCX, RIG and CLF have in common?  They are the dominant players in their sector.  So is BTU – but we gave up on them too!  Coal is DEAD, really dead, not zombie coming back dead but dead like burning wood died when coal came along – it took a long time, people even still burn some today but, on the whole, dead.  Since coal was king we've had oil, wind, wave, thermal, hydro and solar come along.

    Really, why would you even look at coal?  It's dead – move on.  Sure some coal company will pop and come back on some deal or other while other go BK or get absorbed.  100 years from now they'll still be using coal for something but you won't be making money at it – that's for sure – or can I interest you in a horseshoe concession?  

    SCTY/Rustle – Yep, doesn't work but it does work for people who can't do math or read fine print so they do get a lot of customers.  For most people, "free" trumps $24,000 by a long shot. I don't understand why the power companies don't do it.   Better than losing customers is to make the same offer and lock them in for 20 years.  With a 20% savings, a 3% rate bump brings it back in 5 years anyway.  

    LABU/Scott – That works too.  That one has a lot of ways to play it. 

    CSCO/DM – I do like them down here (though more so at $22.50).   It can still be had for that price by simply selling the 2018 $25 puts for $3.40 (net $21.60).

    As a butterfly play, you'd have to assume $30 is the top and $20 the floor, so you could buy those calls ($1.80) and puts ($1.60) for $3.40 and then what can we sell?  The April $26 puts are 0.52 and the $27 calls are 0.55 and $1.07 is CLEARLY a lot less than CSCO can (and usually does) move in a month so it's REJECTED as a butterfly play. 

    As a long, however, you can sell the 2018 $23 puts for $2.60 and buy the $25 ($3.75)/30 ($1.80) bull call spread for $1.95 and that's a net 065 credit so your worst-case entry is net $22.35 (16% off) and your upside potential is $5.65, which is quite a lot so certainly no need for a butterfly.

    Trump is still in his bunker, coming out soon to blast Romney. 


  79. Phil/Trump: Donald was up early on Twitter with this zinger: "Why did Mitt Romney BEG me for my endorsement four years ago?"   heh heh


  80. Lol I can't wait for Trump to eviscerate Romney on his takedown speech. 


  81. Firewood – yes some still burn it!  For that friend who has a fireplace and you just don't know what to get them… see if you can find some of this: https://www.youtube.com/watch?v=TBb9O-aW4zI

    :-)


  82. Phil sorry just to clear confusion you surely talk re. CSCO of the Jan18 play not 2013! Would be nice but we can not turn back the time (((


  83. thanks Phil--that is what I thought you would say ;-)


  84. Doesn't look like the market is ready to roll over today.  A/D line 2-to-1 positive.  Thinking the market might key off the Jobs data tomorrow.


  85. Phil – "Windows 10 just forced a massive update on my PC."  If you’re on a metered connection, the updates won’t download until you opt to get them.

    If your using WiFi - open the Settings app, select Network & Internet, scroll down, and select “Advanced options” below the list of Wi-Fi networks. Enable the “Set as metered connection” option.   This tricks Windows 10 into not performing an intrusive update.  I believe you can do the same trick for your network connection if you are using Ethernet.


  86. Artesinal wood/Scott – I heard of that.  Some people have a lot more money than sense.  

    CSCO/Yodi – That's an odd typo to make.  Thanks.

    Trump already throwing out protesters.  

    Positive/Albo – Lots of stimulus expectations from the ECB keeping things up.  

    Windows/Nabob – Thanks, it is very annoying.  I'm sure there was a clock but I happened to be in the kitchen and missed it.  Here's a summary of my MSFT experience today.


  87. Romney gave Trump a chance to talk about himself for an hour – yikes!  


  88. He is the most arrogant person in the world imo.

    Is there a chance he could be the next POTUS?


  89. Phil – those bastards killed Kenny and Gates. LOL

    Enfilade – Flows / Naybob – "Thanks for the missive. In the short term we likely have reducing liquidity from tomorrow / ish for the next two weeks??"

    To answer your question - around April 1st – 15th last four years, down, deduct 30 day lag so Feb 29 – March 14th probably a downswing in cash on hand. Note, it is one of the smaller downswings during the year.  Week before options expiration (next week) tends to usually bring some wacky unwinds, especially when there is 3, 10 and 30 yr bond auctions (Tue, Wen, Thu) potentially siphoning capital, but not always. Since Feb 11th, Hibor, Libor have pulled back (loan funds cost less) and credit spreads have tightened (good sign which can mean growth), all indicating that at the moment, market liquidity is less constricted.

    Some perpective… from reading the missive you should know the following -  this is tracking bank deposits. Those deposits are largely driven by bank payments (debits) which represent money exchanging hands or monetary flows.   As such the flow of those deposits is a surrogate or proxy for potential aggregate demand because it represents our means of payment or cash in pocket and on hand. 

    Nuance… Liquidity is a relative term and can involve not only cash on hand, but on demand credit. The measure of deposits does NOT consider credit or debt that can be used for leveraged margin purchases.  You also know that there is a short term trend and a long term trend from the two charts.

    Results may vary… It is the observation of long term trends combined with known and predictable seasonal fluctuations that can potentially be used to time "market inflections" or critical junctures. This allowed me to be confident in the Q4 commodities V crash and potential near term oil bottom (TBD) we have hit; and a feeble Q42015 which would pour over into early Q12016.

    Ask your doctor if monetaryflows is right for you.  combining short term trends (which can turn on a dime as they are much more subject to credit or liquidity fluctuations, water slosh in the tank) with known seasonal fluctuations in an attempt to "time the market" is a completely different animal, and can be likened to playing with matches or trying to bottle lightning. Many moths drawn to that flame, have been burned in the extreme. Out and everybody have a great weekend.


  90. So SCTY is going up because of rumors that Musk will take it private, why, is TSLA going up?


  91.  

    Phil – just sent you a chart you might find interesting – % of stocks above the 200dma over the last 12 mos. Take a look (I would have posted if I could).


  92. Enfilade – one last thing as my rum is calling – market inflections require knowledge, aforethought and patience.  You don't chase, you wait until the target moves into your crosshairs, and they can be like this. Out.


  93. Phil has there been some change in the exporting plans for  Nat Gas like another delay or any explanation for this relentless downward movement? Is this simply because of oversupply and aren't there some producers that can start production cut/freeze rumors like they did for crude?


  94. See why you can't bet against TSLA:

    They JUST got downgraded.  

    Trump/Jabob – At the moment, 75% he's the GOP nominee and 40% chance he can beat Hillary after that.  They way they are causing a civil war in the party though, I think there's no way they can pull it together to win in November.  

    And another protester is ejected.  

    Murder must be great for business:

    Chesapeake +72% in two days after winning immunity in antitrust case

    • Chesapeake Energy (CHK +34.4%) looks headed for the biggest two-day gain in its history after announcing its cooperation in the federal antitrust case against former CEO Aubrey McClendon.
    • CHK says it received immunity under a Justice Department leniency program that shields companies from criminal charges if they are first to report antitrust violations.
    • University of Houston law professor Darren Bush tells CNBC that the way the indictment was written by prosecutors "indicated they targeted McClendon as having initiated the conspiracy," and was "the big fish" prosecutors were after.
    • Bush also says it is probable that the co-conspirator in the case - reportedly former SandRidge (SD +19.3%) CEO Tom Ward – had agreed to testify against McClendon at trial, and then plead guilty afterward.
    • NYU law professor Harry First says it is possible that the alleged co-conspirator testified against McClendon before the grand jury that ended up indicting him, and the conspirator would have been granted immunity from his own testimony being used against him as part of a separate prosecution.

    And never bet against Elon either:

    SolarCity soars amid Elon Musk buyout rumors

    • Vague market rumors that Elon Musk is looking to take SolarCity (SCTY +18.4%) private have apparently sent the the solar installer/electricity provider's shares flying higher. 6.6M shares have been traded thus far, topping a 3-month daily average of 5.3M.
    • Likely helping out today: 24.2M shares (40% of the float) were shorted as of Feb. 12, and many of those shorts have big profits following SolarCity's recent plunge.
    • Musk, SolarCity's chairman, recently upped his stake to 22.6%. The Tesla/SpaceX CEO hasn't given any public indication he wants to fully acquire SolarCity, which sports a $2.3B market cap and could require a buyout price in the ~$3B range.

    New record low yield for German two-year paper

    • Amid expectations of boosted QE and a further cut in rates from the ECB coming next week, the German two-year yield dropped to negative 0.578% today - a new record low. The yield on the 10-year Bund dropped all the way to 0.169%.
    • Kudos to Marketwatch, whose Markets center didn't blow up this week when the Japanese 10-year JGB yield fell into negative territory (and stayed there). Minus signs in front of 10-year government bond yields were surely not something contemplated by the designers of that capsule!

    Dimon: Profits recession yes, but recession no

    • Meeting with Jefferies' Ken Usdin, JPMorgan (NYSE:JPM) CEO Jamie Dimon doesn't see a U.S. recession as a likely outcome, but instead a "profits recession" led by the energy sector. Consumer trends remain positive, says Dimon, noting proprietary data showing gasoline-related savings are being spent.
    • The bank's conservative energy provisioning should more than cover losses, says Dimon, reminding the $1.5B in potential additional reserves talked about at investor day assumes $25 oil for 18 months.
    • As for revenue, the headwinds remain tough, but hopefully short term. He's hoping capital markets activity thaws and that an improving rates environment will boost net interest income.
    • Source: StreetInsider

    Small business borrowing collapsed in January

    • U.S. small business borrowing fell 13% in January, according to the Thomson Reuters/PayNet Small Business Lending Index. The read of 118.2 was the weakest since Nov. 2014.
    • "This a dramatic form of hunkering down," says PayNet's Bill Phelan, noting January's borrowing level isn't even enough to replace worn-out equipment, let along buy new machines.
    • The report authors say the index is a forward-looking one as it typically corresponds to GDP growth one or two quarters ahead.

     

    Timing in question as BofA makes big push into auto lending

    • Bank of America (NYSE:BAC) last May tapped two mortgage executives to lead the auto loan business, writes Dan Freed, and they have hired loan officers and salespeople at a fast clip since.
    • The timing could be deemed as curious, with regulators and competitors sending signals that the benign credit cycle of the past years has peaked.
    • Across the industry, banks classified $1.1B of auto loans as uncollectible in Q4. That's up 15% from a year earlier, and 39% from 2011 (though the size of the market has grown considerably since 2011).
    • "I'm not actively hiring or growing our operations across the platform. That's for sure," says Andrew Stuart, who heads TD Auto Finance.
    • Earlier this month, Capital One CEO Richard Fairbank said auto loans after the financial crisis provided "once in a lifetime type returns," but now the business has begun to lose strength.
    • For its part, BofA says its focused strictly on prime and "superprime" customers, and the vast majority of borrowers have credit scores above 700.

    Retail sales in Hong Kong down again

    • Retail sales in Hong Kong fell 6.5% in January, a sharper decline than the 4% drop forecast by economists but a sequential improvement from the prior two months.
    • The Census and Statistics Department said the near-term outlook for retail sales is still constrained by slow inbound tourism.

    Transocean says rig glut will drag out offshore-drilling recovery

    • Offshore drillers struggling with plunging demand will start getting more work before they get more money, Transocean (RIG +6.2%) CFO Mark Mey tells Bloomberg.
    • Rig-use rates, which have fallen ~70% in the past year and 90%-plus for the most advanced semi-submersible units, likely will begin to pick up within the next year or two, but the market will remain challenging and drillers will have to wait longer to see substantially higher charter fees, the CFO says.
    • RIG has led efforts to reduce surplus capacity by scrapping 24 floating rigs, or half the total number taken out of service, Mey says, adding that the company has 10-15 more that could be scrapped.
    • RIG has no urgency to buy rigs itself, but M&A activity is likely in the industry in the next 12 months, Mey says.

    Ultra Petroleum shares +60%, now up 236% the last two days

    • Ultra Petroleum (UPL +59.1%) surges for a second day after announcing that its wholly-owned Ultra Resources subsidiary had entered into waiver and amendment agreements with all of its lenders.
    • UPL said the agreements provide it with an opportunity to continue discussions with its creditors about restructuring all of its debt burdens, including its senior notes.
    • Shares are now up 236% over the past two days.

    Alcoa downgraded to Neutral at BofA following recent surge

    • Alcoa (AA -3%) is downgraded to Neutral from Buy with a $10.50 price target, cut from $12, at BofA/Merrill, which says the stock's 43% gain since mid-January fully reflects the expected benefit from growth in the aerospace segment.
    • The firm says it remains confident in the aerospace cycle supporting its specialty metals portfolio and eventual isothermal forge ramp up, but it believes AA has become a show-me story as other elements of the thesis have worsened.
    • BofA says January's near-20% Y/Y decline in U.S. heavy-duty truck orders may have a negative impact on AA's transportation and construction solutions segment; although aluminum and alumina prices have bounced back from their lows, the firm believes oversupply from China may limit upside.

    Iron ore prices have rallied, but analyst warns gains likely temporary

    • Iron ore was supposed to be weighed down again this year by rising low-cost supply and poor demand, but instead prices have soared 18% and established a foothold above $50/metric ton.
    • Iron ore’s resurgence has been a boon for miners’ shares: BHP Billiton (BHP +0.8%) touched a three-month high in London today, with gains supported by a legal settlement related to a dam spill, Rio Tinto (RIO -0.1%) rose as much as 3.5%, and Fortescue Metals (OTCQX:FSUMF +7.8%) surged 6.7% in Sydney to close at its highest since October.
    • The gains probably have been powered by restocking by Chinese mills and some weather-related disruption to shipments from Australia, according to Capital Economics, which warns that gains may prove temporary.
    • Iron ore prices will fall back, perhaps before the end of Q2, the firm's Caroline Bain tells Bloomberg, as Chinese steel production could fall sharply this year while Australian iron output will continue to rise.
    • Also, Moody's forecasts Chinese steel demand, which accounts for half of global supply, is expected to shrink by another 5% this year after a 5% drop in 2015.

    Joy shares reverse higher

    • Joy Global (JOY +15.8%) is soaring in early trade, after sitting in the red during most of premarket action.
    • FQ1 results missed expectations, dividend was in line and no share repurchases were announced, guidance fell slightly short of estimates…What happened?
    • Previously: Joy Global sinks after missing expectations (Mar. 03 2016)

     

    Freeport McMoRan downgraded at UBS on valuation

    • Freeport McMoRan (NYSE:FCX) -2.9% premarket after UBS downgrades shares to Neutral from Buy with a $9 price target following a 30% rise during the past week.
    • UBS points out that hurdles to recovery remain in place despite strong YTD execution; the recent rise in copper prices has been a welcome reprieve but the firm notes that FCX is highly vulnerable as a levered producer.
    • UBS says FCX also needs to navigate ongoing discussions in Indonesia to secure its future at Grasberg, and to achieve considerable success on asset sales to achieve its $5B-10B medium term debt reduction target.

    Total rail traffic volume down 4% in 2016

    • Total U.S. carload traffic for January and February fell 13.5% Y/Y to 1,947,084 carloads, according to data from the Association of American Railroads.
    • Intermodal containers and trailers traffic increased 8% to 2,088,747 units. The comparison was impacted by last year's West Coast port dispute.
    • Total U.S. rail traffic volume in the United States was down 3.6% to 4,035,831 carloads and intermodal units.
    • Categories showing strength in February included motor vehicles/parts and waste/nonferrous scrap. As expected, transport demand for coal and petroleum was weak.
    • "After Saudi announcements on energy pricing late last week it is painfully evident that it will take a while for the shakeout in that sector to play itself out, " warns the AAR.
    • Railroad stocks: UNPNSCCSXCNIARIIGBXCPKSUCNIWABTRN.

    Intel reportedly wins portion of iPhone 7 modem orders, lands Baird upgrade

    • CLSA's Sriji Pajjuri reports supply chain checks indicate Intel (INTC +0.6%) has landed a portion of Apple's (NASDAQ:AAPL) iPhone 7 baseband modem orders. He estimates the company could supply 30%-40% of the modems going into the device. Pajjuri thinks such a win would boost Intel's revenue and earnings by 1.5%-2%, and respectively hurt current iPhone modem supplier Qualcomm's (QCOM -1.2%) revenue and earnings by 4% and 2%.
    • VentureBeat reported back in March 2015 Intel's XMM 7360 4G modem (450Mbps peak download speeds) would go into 2016 iPhones aimed at emerging markets. The sitefollowed up in October by stating Intel "now has a thousand people or more" working to get the XMM 7360 designed into an iPhone, and that Apple is interested in eventually developing an SoC pairing a 4G modem with an A-series app processor, with Intel manufacturing the SoC and providing modem IP.
    • Qualcomm is still viewed as having a modem performance lead on the high-end. The company recently unveiled a modem (the Snapdragon X16) supporting 1Gbps peak download speeds, while adding the chip is expected to go into commercial products in 2H16.
    • Separately, Baird's Tristan Gerra has upgraded Intel to Outperform, and hiked his target by $5 to $38. He cites healthy DCG (server CPU division) growth and (without naming Apple) the potential for a major "tier-1 smartphone ramp" in 2H16.
    • Gerra: "After being on the sidelines for a few years on Intel, we think data center has reached sufficient critical mass within Intel's mix to drive a resumption in EPS growth starting in 2017 … Assuming a low single-digit decline in annual PC revenue and a high single-digit growth rate in data center (below Intel's 15% growth target), DCG mix becomes large enough to drive EPS growth starting in 2017 and in years forward … We believe Intel's LTE technology has matured, improving Intel's positioning for a potential tier-one smartphone ramp this second half."
    • Yesterday: Intel reportedly working on augmented reality headset platform

    On verge of meeting, Disney +1% as Piper upgrades

    • Ahead of its annual general meeting, Disney (NYSE:DIS) is up 1% as Piper Jaffray has upgraded the stock and raised its price target to the elusive $120 range.
    • That target's lifted from the firm's previous $105, and at the level Disney has twice tested in the past year before falling back. The firm's moved its rating to Overweight, from Neutral.
    • More than worried about ESPN, Piper's Stan Meyers is bullish on the film slate (24 titles coming in three years), which could drive a compound annualized growth rate of 12.6%.
    • He sees the firm's newly combined consumer products and interactive group becoming the company's second-fastest growing segment, a product of the firm's tentpole film approached combined with innovative toys and improved coordination in marketing with manufacturers and retailers.
    • The theme parks business is becoming "a lot more attractive," he says, and even at ESPN, he expects growth in fees/subscriber will outpace subscriber declines.

  95. Steve Breen Cartoon on Chris Christie today in San Diego

     

    http://www.sandiegouniontribune.com/photos/galleries/2016/feb/29/steve-breen-march-2016/


  96. Nothing like a good Trumpster fire…..


  97. Phil – Instead of buying UNG, perhaps we'd be better off shorting UGAZ and let the decay work for us.


  98. TSLA/Rustle – Reason has nothing to do with it.  I would guess today it's because they won a dealership battle in Indiana.

    Tesla Takes on the Dealerships—and GM

    Is The Direct Sales Model Critical For Tesla Motors?

    Tesla: Cash Burn Keeps Them Up at Night But These Analysts are Still Excited

    Pressure builds against short sellers targeting Tesla

    Tesla Traders Are All Over The Map

    Chart/Deano – Thanks:

    We rarely go over the 200 dma but it's down from 80 to 40 in less than 2 years and, since the indexes themselves are higher – you can only conclude that we have fewer and fewer stocks supporting the indexes than ever before. 

    /NG/Craigs – No, it's just slower than people (and us) hoped.  Also, it's very warm and winter seems over so short-term demand is not there and that means people who had a lot of March and April contracts are dumping out as fast as they can.  If Aubrey was still around, he'd have shut down half of CHK's production by now – he always managed output to match demand.  No sign of it so far from the others.  

    UGAZ/Albo – You can go that way but, as with every time people question premises and want to bail or switch on long-term positions – I'm smelling another buying opportunity.   If only I could get an FU from Jabob – I'd know the UNG market was ready to turn higher!  cheeky


  99. Not selling my UNG, just thinking for new positions.  Come on, Jabob !


  100. Jabob and Phil, if you want to get technical based on the current odds.

    Trump has an implied probability of winning the nomination of 74%

    Republicans are given a 35.8% probability of winning the general. 

    So the probability of both occurring would be about .74 x .358 = .2649 or about 26.5% change of Trump presidency…..i guess i took the long route to get here coulda just looked at the odds for trump as next prez but you get the idea. 

    Needless to say if you strongly believe his chances are less than the 26.5% (or more) than there's money to be made with a bet!


  101. Record-Breaking Gun Sales Continue Through February

    Record breaking gun sales continued once again in the month of February.<p>There were 2,613,074 firearms-related background checks performed by the FBI …


  102. <b>Short positions in oil exchange-traded funds surged to stunningly extreme record levels (up 300% in a month) in Janaury as crude oil plummeted.</b> Since …


  103. <b>There’s Been An “Anti-Dollar Movement” In The Market Recently by Eric Bush, CFA – Gavekal Capital</b><p>Part of our investment work is understanding what …



  104. A guy in L.A. took Adolf Hitler quotes and asked Donald Trump supporters what they thought about them<p>Donald Trump’s comments about Muslims, immigrants and “making America great again” have caused many to draw comparisons to Hitler… but have you ever wondered if Trump’s supporters have caught on to …


  105. Obviously, I meant DGAZ, not UGAZ.


  106. Phil,

      I have -5 JAN 2017 CHK $18 puts. I know you don't like, to put it mildly, CHK and they had a big move lately, so now looks like a good time to do something with them. These were rolled in several stages from $25. Would you suggest the Top Trades UNG play as a good vehicle for trying to get back the 5 odd K that CHK cost me?


  107. Chart / Phil – A clearer one would be this one:

    Shows percentage of stocks over the 50, 150 and 200 DMA! Over 70% over the 50 DMA has been a top in the last year or so. 


  108. And BTW, when the percentage of stocks below their 50 DMA is below 15%, it seems like a good buying opportunity!


  109. A cluster of low-magnitude earthquakes in the New York region has piqued the interest of residents, while some geologists predict the increase in temblors will continue and a large-scale one could be coming.<p>The seven earthquakes that hit the region during the first two months of the year already …


  110. TSLA/Phil

    Indiana news is so last week


  111. Aubrey McClendon Collected Chesapeake Paychecks Until His Death

    The late shale entrepreneur Aubrey McClendon was entitled to more than $56,000 a week in salary and bonuses from Chesapeake Energy Corp. up until his …


  112. Fed’s Kaplan calls for patience on interest rates

    Federal Reserve officials needed to show “patience” as they weighed up when to next raise interest rates, according to a governor at the US central …


  113. On November 21, 1922, the New York Times published its very first article about Adolf Hitler. It’s an incredible read — especially its assertion that …


  114. If you’ve passed through one of the nation’s airports recently and noticed a longer line at security, you aren’t dreaming. According to The Wall Street Journal, lines at TSA checkpoints are getting longer across the board, thanks to budget cuts, high passenger loads and new security procedures.<p>As a …


  115. NEW YORK (Reuters) – Home flipping – buying and reselling a home to make a quick buck – has risen in some hot U.S. housing markets, prompting concerns that local housing bubbles could be developing, according to a report published on Thursday.<p>The report by RealtyTrac found that home flipping in 12 …


  116. /NG – Phil, Are you up to 30 yet??


  117. so much for market going down.


  118. Republicans – will they self-destruct? and what impact if any will it have on markets (and our longer term puts)?

    https://www.armstrongeconomics.com/international-news/north_america/2016-u-s-presidential-election/republican-party-civil-war-of-self-destruction/


  119. Market/Rustle – a technician I follow on twitter commented on Monday that we should see first three days of March as up days as funds buy in… 3 days. I'll be happy to see a break anytime now.


  120. Scottmi – Speaking of Twitter.  Stock trading up thru 50dMA.


  121. Odds/CRS – So my guess was pretty much on the money?  Kind of a gambler's fallacy though as the 75% almost certain to happen so really it's 40/60 to win Presidency that matters.  It is interesting though that the GOP has decided to put the whole party against Trump and the almost 50% of GOP voters who support him.  

    DGAZ/Albo – Well, same animal, I knew what you meant.  

    CHK/Kevin – "Big move"?  Well, all the way to $4.34 now so wow, what do you want to do with them?  The $18 puts are $15 ($7,500) and you'd have to roll to 30 2018 $4 puts at $2.70 ($8,100) which isn't awful but do you really want to own 3,000 shares of CHK ($12,000) if it fails?  

    BHI is in the same business and you can sell 10 2018 $45 puts for $9 or OIH is a basket and you can sell 2018 $22 puts for $3, but the margin there would be prohibitive.  So yes, I like our UNG trade better than those alternatives, those short 2018 $5 puts are now $1 though so maybe you want to spread those short puts around a bit and not just load up on UNG either.  

    70%/StJ – That's a strange dynamic because it's bound to happen after a downturn.  I imagine that signal was crushed in 2009.

    TLSA/Rustle – It's the only new(ish) thing I saw.  

    /NG/Scott – 16 and not happy about it, missed my cash-out earlier because MSFT was rebooting my computer!  

    RUT 1,074!  

    Reps/Scott – Time to bring back the Whigs or the Bull Moose Party, the GOP is going off the rails.

    I've listened to preachers,
    I've listened to fools
    I've watched all the dropouts
    Who make their own rules
    One person conditioned to rule and control
    The media sells it and you live the role


    Mental wounds still screaming
    Driving me insane
    I'm goin' off the rails on a crazy train
    I'm goin' off the rails on a crazy train


  122. This says it all about the state of American politics:


  123. LOL – yeah, here's the guy who's going to scare Putin:


  124. One of our newly members asked me via email the question on my Trade above with LABU '' why I sold the Apr. caller ITM and I feel there might be some more member who should like to know. At the same time I like to stress that any new members who have questions are very simple as they may are, are well come on this web site to ask any question what so ever with out any restrictions,we all here to help and give answers if we can.

    I am not sure what trading platform you use. I use TOS (Think or Swim) 
    So if you look at the monthly options of LABU April. Here my system is set so you can see the extrinsic value of the option. It is when you sell at 7$ 1.10 if you sell at 8 you get only .95 cents. Obviously at 8 you have a better upsite potential as my 7 would, if I do not something before possible 15th April I might be called if the stock is over 7. But until that date you just watch the amount of extrinsic value in the option. In case the stock will go up and up the extrinsic value will go down to 0. But as long as the extrinsic value is above 0 and now div. is paid during this time you will not be called, because the buyer of the option will not pay you extra for the stock for the amount of the extrinsic value. this will not work if a div is paid, than say hyperthatical your extrinsic value is down to say 40 cents and the div paid during that month is 50 or 60 cents than you might still be called, as the buyer will gain .10 or 20 cents above your extrinsic value. Now say the stock goes down during that time at expiration below 7$ obviously you would not be called for. 
    I received 1.40 for the call so I will not lose on this play until the stock will fall below 7 – 1.40 = 5.60 while you with 8 $ receiving say only .90 your downsite protection is only till 7.10 below that value you lose on the stock if the stk goes below 7.10. Obviously you will live an other day and being the owner of the stock you can sell the next call. I will be called no extrinsic value left  and will be happy with my 1,40 forfooting the stock with a net profit of 1.10 or I roll to the next month before I get called.

    Trust this will help


  125. That second Putin gif is from a great series called "Putin, Russia and the West" its a 4 part series covering Putin and Russia's relations with the West. Including lots of behind the scenes footage, interviews with diplomats / politicians. Covers Putin's rise to power all the way through to the Obama administration. 

    Even if your remotely interested in these subjects I would highly recommend the series. 

    And Phil if you think trump being the nominee is a certainty you can bet it and make a 33% return between now and July, not bad!


  126. Yodi – Great information for those of us in our first 1000 hours :)


  127. Yodi/LABU,

    Assuming you bought the stock at $7, won't selling the $8 calls for 0.90 set you break even at 6.10 instead of 7.10. I understand the $7 Call is a superior play but just want to make sure the numbers are correct.

    regards


  128. PAT you right just my typo thinking of buying the stock at 8 OK its late for me already 11.30 PM


  129. the eagle would've scared me too. I run by geese now and again and they don't budge off the path. They are MEAN sonsofbitches too…


  130. BDC 

    Wild Turkeys are invading our back yard. I got a wrist rocket sling shot & they barely budge.


  131. Eagle/BDC – While I'm no expert, I'm pretty sure a psychiatrist will tell you that his "cringe" reaction is not the reaction of an alpha male.  It's a strong indication of what we all suspect – that all his macho talk and bluster is his way of covering up a very average guy who know, deep down inside, that "he didn't build that" and he's terrified people will find out.  

    Check out this video, you can see those very few people who react very differently to danger (there was more in the show but they just have this clip).   They do it without thinking – Trump is not one of them.  There's no shame in it, of course, unless you perpetuate a delusional fantasy version of yourself and lash out at others to prove your false prowess.  


  132. Wild Turkeys/Randers – OMG, they are in my yard too!

    Actually we do have turkeys back there but we like them roaming around.  


  133. Asian stocks swung, with the regional index on course for its biggest three-week advance since 2009, ahead of a meeting of Chinese leaders and a monthly U.S. jobs report.


  134. Gold is back in a bull market for the first time since 2013, buoyed by investors snapping up the metal as they seek a haven from the turmoil rocking equity markets.


  135. The Republican party descended into full-scale civil war on Thursday, with its last presidential nominee, Mitt Romney, launching withering attacks against current front-runner Donald Trump, who responded with fury.


  136. Tech giants including Microsoft Corp. and Google rallied to Apple Inc.’s side in its fight against a judge’s order to help unlock the iPhone of a dead terrorist.


  137. Ahhh, some great bourbon there. You're making me thirsty :)


  138. Costco Wholesale Corp. will lift its minimum wage for the first time in nine years, by a $1.50 an hour, as the labor market tightens and competitors start giving workers a raise. 


  139. After 10 debates spent attacking each other, underdog Republicans finally focused virtually all their collective fire on Donald Trump, the Republican front-runner who was savaged by the last Republican nominee just hours earlier in a dramatic broadside.


  140. Oil is pulling away from the market’s biggest storm in seven years.


  141. Asian shares and oil both rose to eight-week highs, while European stock index futures gained and emerging-market currencies strengthened ahead of key U.S. jobs data and the start of the Chinese national legislature’s annual gathering.


  142. Chesapeake Energy Corp. is heading for the biggest two-day increase in its history after U.S. federal prosecutors rewarded the natural gas driller with immunity from prosecution in an antitrust case against its former CEO.


  143. Latin America’s largest economy shrank the most in a quarter century last year and no recovery is in sight as shriveling demand and political crisis pummel activity.


  144. Steps from the New York Stock Exchange, only a handful of tables are occupied at Bobby Van’s Steakhouse. Across the street, Reserve Cut has scores of empty seats. A few blocks away at Delmonico’s, one of the folks eating is the restaurant’s own hostess, seated at the end of a half-empty bar.


  145. China’s central bank drained the most funds from the financial system in three years, mopping up excess cash after a reserve-requirement ratio cut earlier this week boosted liquidity.


  146. The Abe administration nominated an economist with links to aides to the prime minister as a replacement for a Bank of Japan board member who in January opposed the adoption of negative interest rates.


  147. Chinese stocks recovered from Monday’s plunge to post their biggest weekly gain this year on signs of state intervention before the start of annual policy meetings.


  148. Goldman Sachs Group Inc. and Bank of America Corp., two of Wall Street’s biggest investment banks, plan to lean on their periodic culls of low performers this year to rein in costs as a market rout pressures returns.


  149. Good morning! 

    Europe is very erratic ahead of our NFP and our Futures are up and down too but mostly flat.  Asia was up 0.5-1% to finish the week with Shanghai all the way back to 2,874, up about 5% off that 2,700 line of DOOM!!!

    Gold, not surprisingly after watching the GOP debate, is up to $1,273 – I'm sure the sales of bomb shelters and gas masks will be booming today too because if those guys are the best Democracy can come up with – we are all very screwed!  

    Personal attacks fly between Trump, Rubio as Kasich defends continuing campaign. (videoSparks flew between Donald Trump and Marco Rubio at the Fox News Republican debate in Detroit Thursday, with Rubio going after his business record and Trump calling the Florida senator a liar. “He has spent a career convincing Americans he’s something that he’s not in exchange for their money," Rubio said.

    Megyn Kelly demonstrates how GOP candidates are forced to be rigid morons by the right-wing media and Trump schools her

    Smith & Wesson(SWHC) just reported a blockbuster quarter and says demand for guns is through the roof

    Anyway, not much going on – just a holding pattern ahead of NFP.  /NKD is just under 17,000 so it makes the best short or long on either side of that line and our other indexes are 16,925, 1,990, 4,325 and 1,075 and, between now and 8:30 – it could go either way so no conviction and it would be MADNESS to bet into the NFP report as that could be a violent move.  

    My bias is still down at the moment but bullish sign if we do survive NFP. 

    /NG at $1.626 and /NGK6 is at $1.75 and I've still go 16 but at least it snowed.  

    Natural-Gas Storage Crunch: Look Out BelowA record amount of gas in underground storage as winter heating demand winds down could create havoc late this summer.

    Kaplan goes again today – because he did a good job spinning things yesterday:

    Friday's economic calendar

    Fed Makes A Stunning Discovery: "Consumers Across The Country Are Borrowing More To Buy Cars And Go To School"

    figure 4

    There's just been a 'broad-based slowdown of global economic growth'

    Oil crash takes heavy toll on midstream energy companiesThis week the Cushing Marketlink pipeline, a central artery in the North American oil market, dropped its already-discounted rate for shipping light crude by a further 10 per cent to $2.50 a barrel. But this wasn’t the real bargain. As the pipeline lowered the official rate, shippers were subletting space on Marketlink for just $0.50 a barrel, industry executives say.

    UBS: "There Is No Doubt That The Move In Oil Is TOTALLY Short Squeeze Led", Here's Why

    It Hasn't Been This Bad Since The Viking Age": Dry Bulk CEO Warns Of Bankruptcy Tsunami, Counterparty Risk

    U.S. tech companies unite behind Apple ahead of iPhone encryption rulingTech industry leaders including Alphabet Inc's Google, Facebook Inc, Microsoft Corp , AT&T and more than two dozen other Internet and technology companies filed legal briefs on Thursday asking a judge to support Apple Inc in its encryption battle with the U.S. government.


  150. Phil what do you think will be the NFP numbers that will move the markets in either direction and make you either bullish or bearish? 


  151. I think we need (and I know I said this) just under 200 to be in Goldilocks mode.  Too far over will be too strong and puts the Fed on the table, too low will show weakness that scares people.

    Oops, here it is – blowout with 242,000 jobs AND +30,000 revised to last month.  It's too hot with a Fed meeting coming up but hourly earnings down 0.1% so maybe not so bad.  

    Labor Force Participation down yet again so maybe the gains are BS but, on the whole – I don't see this as being enough to pop 2,000 so I like /ES short at the lone watching 17,000 on /YM, 4,350 on /NQ and 1,080 on /TF and 17,200 on /NKD.  If ANY of them are over their lines – I wouldn't short but I would short /ES for sure below 2,000 with tight stops.