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Wonderful Wednesday – And We’re Up 300 Points Since Friday Because?

Image result for stock market rally 1929What a rally!  

I just finished our November Portfolio Reviews and our Long-Term and Short-Term paired portfolios are just shy of their 40% goal for the year but our more aggressive Options Opportunity Portfolio, which we trade over at Seeking Alpha, has gained another 100% in 2017, now up 233.8% in just over two years (we begain on 8/8/15 with $100,000).  If the market keeps going the way it is, we have no doubt we can add another $100,000 over the next 12 months.  This is how, thanks to Trump, the rich are getting much, much richer.

Even more ridiculous is are the gains on our Money Talk Portfolio, which was initiated to track the calls we made live on that show, including our Trade of the Year on Wheaton Prescious Metals (WPM) which started the year as WPM but that didn't stop our net $2,000 entry on the spread from gaining $8,425 and that's only "on track" to our expected $23,000 gain by next January (2019), so it's still good for a new trade from here, with $14,575 left to gain over the next 12 months – that's still 173% up from the current $8,425.

Of course, a mere 173% return is not enough to make it our 2018 Trade of the Year, where we aim to get 300-500% returns on the net cash of our spreads (there are also margin requirements) – and we have NEVER yet missed one of those.  At the moment, contenders for our 2018 Trade of the Year include Macy's (M), Chesapeak Energy (CHK), Cleveland-Cliffs (CLF), Chipotle (CMG) and Hanesbrands (HBI) – all of which we are already in from our recent Portfolio Review but can still make fantastic new trades.  We were going to go with Limited Brands (LB), but they already popped and got away from us (well not us, but before we got a chance to announce the trade though it is, of course, on our OOP, LTP and Money Talk Portfolios). 

The best thing about the Money Talk Portfolio though, is that we haven't touched those trades at all since announcing them on the air – 3 of them on Sept 6th, in fact.  Those 3 trades used just $10,750 of our cash and are already worth $36,125 for a $25,375 (236%) gain in just 2.5 months.  

This is, of course, why we've gotten cautious into the holidays though.  It's ridiculous that I can go on TV and publically announce 3 trade ideas that return 236% on cash in 75 days.  THAT is exactly what a market bubble is.  Gains like that are unsustainable.  If you make 100% a month, you turn $100,000 into $409 MILLION by the end of the year.  Does that sound like it's likely to happen?

As I mentioned on Monday, we sent out 6 Top Trade Alerts for November and, thanks to this crazy +300 point week, those are all off to a flying start as well.   Still, this is WRONG – it shouldn't be this easy to make these kinds of returns – it indicates a broken system and, for now, it's broken in a good way so we're all having fun but soon it can break in a very bad way – taking away the gains much faster than it gave them out.  

This is not a gold rush – we didn't discover any new resources that are making everyone richer other than money that is STILL being handed out by the Fed at a rate of $60Bn per month along with the ECB's $80Bn and the Bank of Japan's $40Bn.  THAT is where our market rally is coming from but, even so, the US indexes are up about $7 TRILLION since the election with Global Markets now at roughly $80Tn and the US making up almost half at $36.6Tn.

Image result for global gdpHere's the thing though – where did the $7Tn come from?  The Global GDP is about $95Tn and let's say it grew 3% this year to $98Tn.  Even if every cent of that went into the market, that's still $4Tn too much.  To save a boring logic and math discussion, let's just say about 50% of the rally is overdone and we expect a 10% correction from here – in the very least.

My theory, which Warren Buffett agrees with, is that people are expecting a Tax Cut next year and that means there's no reason to sell our stocks this year and get taxed at higher rates on our profits.  The low-volume rally we're getting this month indicates that theory is playing out as there are very few sellers but, thanks to IRAs, 401Ks, QE funds, Soveriegn Wealth Funds and ETF inflows – there's a constant bid underneath the market – something I discussed this summer on Nasdaq Live.  In fact, we were talking about S&P 2,600 and the outperformance of the Russell at the Nasdaq in early October.


During that interview we talked about investing in the Russia ETF (RSX), which is still in play for next year but not a high-enough probability to make a Trade of the Year, unfortunately.  If oil keeps heading higher though – it's very much worth considering.  

The best thing about keeping balanced portfolios and using our "set and forget" style of trading with self-hedging spreads is that we get to take nice vacations without worrying about our stock positions.  As I said on Monday, we didn't become traders so we could be chained to a desk all day and holidays are times better spent with your families.  

I hope you and yours have a happy, healthy and wealthy Thanksgiving! 

All the best, 

- Phil


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  1. Morning, All!

    There will not be a webinar this week. We'll pick back up next week.

    Happy Thanksgiving!

  2. Good morning!  

    Got a little sell-off in /CL but no luck on /TF so I'm taking /CL and running but I'll leave the /TF shorts to see how they go today and Friday.  

    I'm off to the airport – have a wonderful holiday.  

    All the best to you and your families,

    - Phil

  3. Happy Thanksgiving to Phil all other members!  Be safe!

  4. Phil & Everyone-Happy Thanksgiving to all.  Hope you enjoy.

    Hoping we see an overcorrection on our favorite stocks whenever this market returns to earth.  Be nice to have more LTP plays than short term trading.

  5. Happy Thanksgiving to the entire PSW family!

  6. Happy Thanksgiving to everyone!


  8. Who needs America?

  9. Happy Thanksgiving to you and your family!

  10. Happy Thanksgiving !   A few of us hard core around today.

  11. Do the stuffing and don't get stuffed, may the revenge of the gobbler, prime rib, lamb or ham be gentle. Remember, respect the dirty bird or fear the kickin' chicken. Happy Thanksgiving and Out.

  12. Happy Thanksgiving everyone!

  13. happy thanksgiving to all. especially to a lot less fu's from jabobeast as that will translate to a good 2018 for a lot of us. i'm buying ftr, hbi and teva at these prices.

  14. Happy thanksgiving to all PSWers, and to Phil, Greg, and Ilene, too!  

  15. US Crude Oil Exports and Drilling Activity Impact OPEC

  16. /CL up sharply.

    CTL goes ex dividend on Friday.  Today is last chance to capture the .54 dividend, and receive 5 dividends in 13 months.  Says the guy whose credibility is lacking in this name. 8-)

  17. Well all you girls and guys, even that we here do not have a turkey in the oven, I wish you all there a happy thanks giving.

    Greetings from sunny Spain


  18. Phil and all – Happy & Healthy Thanksgiving! Safe travels to those of you on the road. I am thankful for all your participation in this community. Peace!

  19. GNC tanking again. wow

  20. Jabob – I just sold some Jan 2019 5 puts for $2.  Primarily because of this:

    15-Nov-17 08:16 ET

    GNC – GNC Holdings EVP adds to position; discloses purchase of 20K shares worth about $116K (transaction dated 11/10/17)  (5.78).

  21. 33% of the NDX are below their 200 day average… so, all time highs! 

    Building to an epic climax, gotta love it

  22. FTR—news?

  23. Jabob – Probably the perception that repealing net neutrality will be positive for the telcos.  VZ & T also up.

    It should also be positive for CTL.   There I go again.

  24. Wishing Phil and all the PSW members a Happy and Safe Thanksgiving!  

  25. Just landed, doesn’t seem like much reaction to the Fed. 

  26. Have good holidays and a safe turkey day. Best wishes to all.

  27. Happy Thanksgiving to all from sunny and very warm SoCal- 90 today; upper 80's tomorrow. Among many things for which I am grateful is no more snow and ice :)

    Phil- if you get bored eating Turkey- take a gander at CAH here. What do you think? 

  28. Phil/TF- just dropped 20 pts and i got some fills at 1495.60 on some open MIT orders. 

  29. Happy Thanksgiving to all.

    Also  we're celebrating my father-in-law's 99th birthday tonight.  Yes, he is still with it.  Reads a book every week, reads the entire newspaper everyday and even does the crossword puzzle.

  30. Thanksgiving is a big family affair for us, here is my menu:


    Bloody Marys prepared spicy using Tito’s vodka 

    smoked salmon dip with onions, capers, and fresh dill

    artichoke cheese squares

    vegetarian asparagus soup topped by house made croutons

    red leaf lettuce salad with Mac’s house dressing

    Rotisserie BBQ Turkey with a hint of smoke 

    Grilled tenderloin (secret family marinade)  and creamy horseradish sauce 

    bubbie’s baked muenster cheese squash 

    focaccia & challah pan stuffing  

    old fashioned green bean casserole

    fresh corn soufflé

    herb roasted beets 

    apple crisp

    chocolate pecan pie 

    vanilla ice cream


    MtBrave-Mt Veeder Cabernet Sauvignon

  31. God dam Stockbern how many michelin stars does your household have, that sounds delicious!

  32. stockbern 



  33. Stocky – you don't know what your missing, next year my place…


    Spam and Cheeze whiz with Chicken-in-a-Biscuit crackers

    Lil-Smokies dipped in BBQ sauce and grape jelly

    Deep Fried Gator Tail Bits – succulent and takes on the flavor of whatever the hell you fried up last in the oil. Catsup and mayo dip optional.

    Broiled Squirrel – mild and just a little gamey, with lemon juice, ymmm


    Po Folk Soup – Soda Crackas in Warm Milk

    Sioux Corn Poe (Edgar Alans fav)

    The Can-Can Can – Collard Greens, Sweet Potatoes, Creamed Corn – All canned


    Vegan Option Frito Pie

    Roast Possum – After you kill the possum be careful not to let him get away by playin possum.


    Cooter Pie  – stew that snappin turtle till it fall off da bone


    Carmelized Cheetos

    Fruit Cocktail mixed with Cool Whip, served in the drained can

    and the pièce de résistance

    Deep fried pork rinds and PABST BLUE RIBBON with moonshine Jello shooters.

    Indigestion, IV and Out.

  34. Thanksgiving day motto:


    now football, out

  35. AP source: Flynn lawyers make a break with Trump team

  36. Can the world’s mightiest naval fleet survive the perfect storm?

  37. Stocks Hold Firm as China Gains a Footing

  38. Robert Mueller is now pursuing Donald Trump on charges that sound a lot like treason

  39. China’s bond squeeze could spread offshore

  40. A Split From Trump Indicates That Flynn Is Moving to Cooperate With Mueller

  41. Why Wages Aren’t Growing

  42. Better Batteries

  43. What a Weird, Wired World It Was

  44. Good morning! 

    I hope everyone had a great Thanksgiving.  Glad I'm down in Florida as it got pretty cold in NY but I'm back Sunday so not too much respite. 

    The Futures are up but the volume is a joke.  Weds was only 45M on SPY, lowest full day of the year and today is a 1/2 day with a 1pm close.  

    Oil is blasting up to $59 with /RB closing in on $1.80 as the gift that keeps on giving from OPEC:

    Dollar down 1% is helping too:

    I like the Dollar long here (93 on /DX).

    No real data and not much going on so no reason the markets won't drift along at the highs today.

    /TF/Ravi – I wish I'd caught that dip, I could have cashed out.  

    99/Stock – God bless, that's fantastic.  Good menu too, save me a table for next year!