Mr. Trump went to China.
That's it, nothing happened. The deal-maker in chief made no deals, though he did take credit for $250Bn in business deals, which were actually the course of our normal trade with China, like $36Bn worth of Boeing (BA) planes, most of which were already part of their existing backlog. While these transparent attempts to puff himself up may work with the gullible US voters, Trump faced mockery in the Chinese press – even the "official" press which said: "Emotional venting cannot become a guiding policy for solving the nuclear issue on the peninsula."
There was no trade deal, no pushback on exports, no movement on China's currency manipulation, NOTHING which Trump promised during the campaign and nothing is coming from Trump's "great friendship" with China's President Xi. Trump went so far, in fact, to absolve China for unfair trade practices saying they were only doing what's best for their country and it was the fault of past US Presidents for making bad deals – like the one he is sticking to by leaving China empty-handed.
"After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens. I give China great credit, but in actuality I do blame past administrations for allowing this out-of-control trade deficit to take place."
Japan's Nikkei went on a wild ride last night and is currently off 1.666% at 22,580 after bottoming out at 22,500 and we noted this action in Tuesday's morning Report and shorted the Dow Futures at 23,500 in our Live Trading Webinar yesterday along with Oil (/CL at $57.50) and, yesterday, in our Live Member Chat Room, my comment to our Members into the close (3:58) was:
Indexes curling over, Good time to short /ES at 2,590 (tight stops above). Lined up with 23,500, 6,340 and 1,480.
Those last 3 were, of coure, the Futures for the Dow (/YM), Nasdaq (/NQ) and Russell (/TF) and the Dow has already gone below 23,400 for a nice $500 per contract win while the S&P (/ES) just hit 2,575, which is good for gains of $750 per contract overnight. Oil already hit our goal at $56.50 and that was good for $1,000 per contract gains as well and we even FINALLY sqeezed a small profit out of Gasoline (/RB) as it came back to the $1.80 line.
We're taking quick profits here because no sell-off has lasted more than a few hours recently but it's fun to pick up a little side cash once in a while – so we don't feel like we're totally wasting our time on our hedges. By the way, we discussed a good TZA hedging strategy yesterday – that's still in play for the moment.
Meanwhile, we continue to make stupid money in our portfolios. For example, back on Sept 6th I appeared on BNN's Money Talk, where we initiated a new $50,000 Portfolio to track our picks and already, just two month's later, our 4 positions have rocketed up 61.2%, driving the net up to $80,587 for a quick $30,587 gain:
If the market is going to just keep printing money like this, far be it for us to not play the game but this is RIDICULOUS, returns like this are simply not sustainable over the long run – where is all the money supposed to come from? On the show, I noted we liked Limited Brands (LB) enough to make it our Stock of the Year for 2018 and that spread required just a net $3,400 cash outlay (the short puts require margin too) and already the net of the spread is up to $14,850 for a gain of $11,450 (336%) and, again, this is just 62 days later!
Just to be clear though, it is RIDICULOUS that we have a market where I can go on live TV and tell Millions of people how to make 336% returns on their cash in 62 days. I may be good but this is a broken market with RIDICULOUS price mis-matches that, in theory, shouldn't last but, in practice, they just keep going on and on as the Fed's insane monetary policy continues to feed the bubble.
This is why we hedge. This is also why we have so much CASH!!! on the sidelines (have I mentioned how much I love CASH!!! lately?). For one thing, we can make PLENTY of profits with small trades like the ones above – we don't need to over-commit and, for antoher thing, we want to stay very liquid to take advantage of the correction – if it ever comes. As I mentioned last month, I could not hedge my children's 529 college plans effectively so I CASHED!!! them in. I'll put the money back to work in January, if we survive those earnings but I couldn't imagine leaving unhedged money in play as we head into the end of 2017.
Please, be careful out there!
Oil/Baron – Yes, so I wouldn't go short over the weekend but playing for quick rejections at $57.50 is fun and profitable!
INFN/Jeddah – It's not about missing it, it's about hopefully learning the lessons so next time you have a bad feeling about something into earnings, you don't take an unnecessary risk. Other lesson there is don't buy things that are already up 25% or, if you bought it back in the Spring, then the lesson was don't be a greedy bastard after you got 20% gains quickly or, in the very least, set stops on your winnings.
/CL/Japar – Well there's 424,000 open contracts that probably expire on the 21st but maybe the 20th (depends if they count Friday as a holiday after Thanksgiving) so at least 8, maybe 9 days left means close to 50,000/day to roll and the total is about 1.2Bn barrels, which is going to have a reckoning one day but maybe not into a holiday (which lets out Nov and Dec rollovers). So no clear bet this time of year – tempting though it may be…
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M/Taihu – That's what I hate about analysts. They essentially force companies to get on the bandwagon and do whatever the rest of the sector is doing or the analysts don't understand and start hating on them. The whole AMZN thing is hype, AMZN's retail sales were $77Bn in 2015 and $91BN last year so up $14Bn is 20% but that's $14Bn out of $3.5 TRILLION in US Retail Sales or 0.4% – and AMZN's number is Global!
Though it's trending down, it's very slow and that kind of degradation is fixed by closing stores (demographics, more than AMZN is hurting them) and it doesn't mean it's a crisis, many stores expand and contract successfully – the danger is in not recognizing a changing market and thinking you can fix things with more ads and sales.
I like them because they can be fixed by tweaking (like SKX and NKE when they were down). When you have a good brand, you can fix things.
SEDG/Scott – There's lots of those. Most of their good news comes off Business Wire, which is paid PR.
Speaking of M, flying today. I wonder if that's because of the Top Trade Alert?
It's funny because all the data was right in people's faces this morning and the stock was barely moving.
Shopaholic/Seer – I'm not one either but I have teenage girls, so I see a lot of shopping!
For the day/Baron – What was wrong with M? As we're bouncing back and the Dollar is holding, /NKD might bounce over 22,600 (now 22,585) and you can play that line bullish with tight stops.
CMG/Lunar – Long road to recovery there.
CMG/Yodi – Well it depends how the broker does margin. 100 at $350 is $35,000 and margin is $15,000 when it's in the money by $75. The Jan $350 puts are $75 and they can be rolled to 1.5x the 2019 $300 puts at $54 for a credit or 1.4x about even and the net margin might be the same but PM should give you a break.
Of course, Lunar, if you want to save margin you might want to consider just rolling the loss to a much lower strike. You could also consider selling 2019 $300 puts ($54) and the 2019 $350 calls ($20) as that would decrease the margin since you are hedging both sides and not too likely CMG pops $80 to hurt you (and still a huge improvement even at $375, right?
Phil – Great timing on M !
KUDOS.
NYC/Crs – "Dear Evan Hansen" is a good, unknown show. "Beautiful" is very nice too. "Lion King" is always good and "Wicked". Down where you are is a place called Eataly and inside Eataly is a restaurant called Manzo, which is a really nice place but must have reservations. It's just one of those cool NY things to see too. You can listen to live Jazz and get chocolate souffle on demand at the Knickerbocker Grill – if I were at the Gramercy, I'd be hitting that up one night! Restaurants worth checking out are O Ya, which is my current fave but $200/person, Tao Downtown, Bouley at Home (my favorite chef), Downtown Bakery, Koi Bryant Park is also cool sushi/japanese. Eleven Madison Park is also a real experience if you don't mind spending $300/meal but bar tastings are "only" $155 – if you can get in – possibly one of the World's best restaurants and they keep almost closing but haven't yet. You can walk to that one. ABC Kitchen is near you too, nice.
Thanks Albo – better to be lucky than good!
DJ Frontier Comm Cut to Hold From Buy by Gabelli & Co.
Thanks Phil CMG Yes selling some naked calls could compensate some what.I decided to take shorter time calls like Jan 18 and March 18 possible 315 to 320. That way You can follow closer the development of that stock.
Thanks for the NYC recommendations Phil! I'll have to check some of those out. Been to Koi before, Bryant park is my parents favorite hotel to stay at while in the city.
GILD is at the 200d MA. Buying some Jan 75 Cs for a bounce. Risky, but will see.
CRS – while your in the theatre district go to Junior's for a NY Yankee – half pastrami, half corned beef piled high and a slice of cheesecake, both to die for.
CMG/Yodi – They'll need a couple of good Qs to get people buying back over $300.
You're welcome, CRS, have fun!
GILD/Pharm – Pullback is a nice 2nd chance for people who missed it the first time.
VIX spike was fun while it lasted:
Finally found Monday's Interview:
Well, we got back at least half the losses so another good day for the Bulls as that wasn't much damage and dip-buyers were again rewarded.
50 points so far on /NKD – good for $250/contract.
DIS, NVDA and JWN reporting. DIS, of course, we expect good things from.
Hey CRS, this is nice if you want to do something special for real Broadway fans.
Phil,
SRCL – analytical exercise with a view to the future. Company is dominant in medical waste industry, steadily rising sales. However, earnings have been declining along with margins. Terrible mgt team reputation, questionable acquisitions and trumpesque treatment of clients (just settled 300m class action suit).
At a 2 yr low, and with a nod to TA, with very low RSI (<20) and island reversal today. Thought this might be a candidate for a turnaround should future new mgt (and activist interest) attempt to correct the above.
Your thoughts appreciated.
Phil/CRS – optional in the Theatre District – Now, I don't think they still have the vintage red velour wall paper with the big T's, and red tuck and roll pleather seats, but you can still go have a steak without reservations from noon up till 11PM at this joint, which is the LAST of its kind in NYC.
The daily lunch special is a sirloin served with baked potato, green salad and slice of garlic bread. Now I know it's a little expensive at $8.99, so splurge on the carmelized onions, roquefort dressing, butter, sour cream, chives, cheese and bacon bits or upgrade your cut of meat.
At dinner time Tad's Famous Steak Special Cut is kinda pricey at $13.79 with all the trimmings. If you want to go hog wild, get the #6 T-bone or Porterhouse for $17.59, or the 7 oz Filet for $16.99, they have ribs and burgers too.
In the day, I would pass by Tad's at 4AM usually loaded with a pleasure unit in tow, hear the sizzle, smell the fat burning on the grill, stagger in and have a full steak dinner for.. drum roll please $2.50. With desert and a beer or a fine screw top wine, if you spend $20 a head at this joint, you've gone overboard.
Just remember to use lots of A-1 sauce and if you need it, bring extra Poligrip. You can stop laughing now Phil, you'll get there. Time for my meds, a steak and IV. Out.
Positive news from SGYP
Reports Q3 (Sep) loss of $0.22 per share, $0.06 better than the Capital IQ Consensus of ($0.28).
Demand and prescriber growth (per QuintilesIMS)
More than 25,000 prescriptions were filled in the third quarter of 2017, up 105% over the prior quarter, with more than 37,700 prescriptions filled since launch in March.
Over 7,000 healthcare professionals had prescribed TRULANCE, an 87% increase over the second quarter.
Cash and cash equivalents were approximately $117.8 million at the end of the quarter.
All activities are progressing on-track to support the FDA review of the supplemental new drug application (sNDA) for TRULANCE for the treatment of adults with IBS-C. The Prescription Drug User Fee Act (PDUFA) date is January 24, 2018.
The investments we've made and the continued execution of our commercial strategy have allowed us to drive strong early customer demand, gaining TRULANCE coverage on major commercial, Medicare Part D and Medicaid plans within the first six months of launch. Our progress in market access demonstrates that payers recognize the potential value TRULANCE can offer CIC patients, which we will leverage as we move towards the anticipated expansion of the label with the IBS-C indication this coming January. With growing customer demand, improved market access and the expected expansion into IBS-C, Synergy has a significant opportunity to drive further growth and long-term value for patients, healthcare providers and our shareholders."