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Tuesday, February 7, 2023

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Faltering Thursday – GOP Losses and Trump’s Lack of China Deal Spook Markets

China Donald Trump & Xi Jinping (Reuters/D. Sagolj)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!  

 

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Phil – Great timing on M !

KUDOS.

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. 

Retailers Slash Holiday Season Hiring

Bodyguard admits Russia offered to send prostitutes to Donald Trump during “Pee Pee Tape” trip

GILD  is at  the 200d MA.  Buying some Jan 75 Cs for a bounce.  Risky, but will see. 

Date Ticker Shares/Options Cost Total Profit/Loss
           
16-Oct-2016 PETX 500 $7.81 $3,905  
11-Apr-2017 BLCM 200 $12.75 $2,550  
2-Oct-2017 PFE        
  2019 Jan 32 C BTO 2 $4.75 $950  
  2019 Jan 40 C STO 2 $0.96 $192  
11-Oct-2017 CRMD 2000 $0.72 $1,447  
9-Nov-2017 GILD        
  2018 Jan 75 C BTO 2 2.25 $450  
 
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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.

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."

Something Old, Something New: $250 Billion in U.S.-China Deals Don’t Add Up

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