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Weakening Wednesday – How Nice to Watch from the Sidelines

So far so good. 

We have no regrets on Monday's call to get to CASH!!!  Now, it is possible that it's a self-fulfilling prophesy as I went on TV, live at the Nasdaq on Monday Morning and told their viewers why I thought the market was drastically overbought – using very simple math that simply demonstrates that it's not likely that, after taking 200 years to get to $65Tn, the global markets were going to be able to justify a $35TN (53.8%) gain in 12 months.  

What's most amusing to me is the number of people on Social Media who feel that they need to defend the bubble and come up with dozens of reasons why I am wrong and why "this time is different" because of Trump's Tax Plan, the Global Recovery, Emerging Markets, Easy Money Policies, the Sharing Economy, Robot Automation…  All good reasons we should be having a rally – but not this INSANE, RIDICULOUS, UNSUSTAINABLE rally and, frankly, the whole time they are talking I just keep thinking "Wow, people just don't understand the basic concept of math, do they?"  

It's the same math I used in 2010, when I wrote: "The Worst-Case Scenario: Getting Real With Global GDP!" when I used the same MATH to show that the markets should be much higher than they were.  7 years later, the math hasn't changed, the markets have.  I'm not your enemy just because I'm trying to tell you the markets are overbought any more than your doctor is when he tells you your cholesterol is too high.  I've been warning you for a long time and I've prescribed hedges to make sure our portfolios didn't suffer any major damage but now, unfortunately, the untreated condition has gotten worse and we need to operate/liquidate – IMMEDIATELY – to prevent serious damage to your finances.

Image result for global gdp growth 2017Like a doctor, we don't know for sure that staying in the market will kill you, we have to rely on our observations and the risk/reward of cashing in vs. staying bullish into 2018.  Is the global market more likely to add $5Tn (5%) in the next month or two or is it more likely to realize it couldn't possibly have grown 58% in a year and, therefore, stock prices have probably gotten ahead of themselves, to some extent, between 58% and the actual growth of 3.4%.  

As you can see from the Chart, China has been a huge part of the Global growth story and they are slowing down (because of pollution and debt, which we also predicted) and India is still doing well but it's only a $2.2Tn economy, 20% of China's size so, unless India is going to pop 5% more – it's not going to make up for China's 1% drop.  Again, math…

I'm not trying to be a downer, I'm very long-term bullish on the global economy but that doesn't mean the markets can't get ahead of themselves and, clearly, they are way ahead of themselves now.  Not only have they priced in ALL the possible good news and then added a huge bonus but we're completely ignoring all the bad news (see Monday's list) and not even considering some of the good news, like Tax Cuts, may not be good news at all because it increases the National Debt by 50% over 10 years and it throws 36M people off health care and it cuts benefits to the 250M (78%) people lucky enough to still have health coverage and it cuts funding for basic education, R&D, environmental protection, infrastructure spending and college loans – you know – the future.  

It is truly amazing how much money you have to spend when you don't care about the consequences.  The Trump Tax plan ignores all the consequences and, like any immature child, acts as if buying that new, shiny thing they want will make them truly happy forever after – so happy they will trickle all over the poor people.

Here's a fun chart from the Federal Reserve that shows the Wealth of the Top 1% has just passed the total wealth of th Bottom 90% while the Top 10% has also been in sharp decline as there is not enough money in the World to feed the Beast that came from Mar-a-Lago. 

Again, it's a math thing and again and it's unsustainable as the Top 1% can no longer grow their wealth, which is now 40% of all the Wealth in the US, without taking it from the bottom 99% – including the idiots in the Top 2-9%, who think they are "in the club".  If you EARN less than $1.8M PER YEAR – you are NOT in the club.  That is the cut-off for the LOWEST rank of the Top 1%, 3M people in this country who have TWICE AS MUCH money as 300M other Americans and as much money as the 30M people in the Top 2-9%.  

If the economy is growing at a rate of 3% and the Top 1% want to continue to grow their wealth by 5% per year, where will the other 2% come from?  It HAS to come from the Bottom 99% and you know the Top 2-9% are going to fight very had to keep their share but for every Dollar of wealth gained by the Top 1%, the Bottom 99% has to give up $2 – because they have half as much to begin with.  That is math.  

So, for the Top 1% to get 5% richer and not go to war with their toadies in the Top 2-9%, they have take ALL of the 3% GDP growth (done) and ALSO direct their toadies to pass laws to transfer another 4% of the wealth from the bottom 90% to the Top 1%, which will translate to another 2% for the Top 1%.  That's what the Trump Tax plan is all about – you HAD to put a Billionaire in charge to do something this terrible to 300M people – and a cruel, heartless one at that!  

As you can see, the Income of the Top 1% (3M) is just about to pass total of the Top 2-9% (30M) but those pesky 300M workers still get half of the available income.  But what if we replace those annoying workers with robots?  Then we will get ALL the money.  Well, not the toady money, but we'll get to them next, right?  For now, we need the toadies to help us not only eliminate the jobs that support those 300M "losers" but we'll need to get them to like it and we'll need to remove the social safety net before too many people fall into it and it, gasp, costs us money!  

Uber and Lyft, for example, have 500,000 drivers and the drivers, if you can believe the nerve, keep 80% of the fares from their trips.  So let's say, for example, an Uber driver gets $50,000 in fares and keeps $40,000 and his expense for a car, insurance and gas is $1,000/month ($12,000).  That leaves the driver with $28,000 while the Top 1% owners of Uber/Lyft gets $10,000 x 500,000 = $5Bn.  Now, some people might be satisfied to make $5Bn for running an App but, if they were, they wouldn't be in the Top 1% in the first place, right?  

In order to take the ENTIRE $28,000 x 500,000 ($14Bn) away from their 500,000 bottom 90% employees, Uber and Lyft will buy a fleet of self-driving cars, which won't cost much more than the drivers spend now but now there will be no more drivers and the 500 Top 1% owners of Uber and Lyft will make $19Bn a year while the 500,000 unemployed drivers will flood back into the labor force and drive wages down for all of us – so a win/win/win for the Top 1%.  

Image result for robots replacing workers chart

That is the end result for all automation projects and I know there is some kind of fantasty world where "other" opportunities will spring up to replace, well everything, but this is not going to be a small disruption to the status quo – this is the dawn of the end of labor, which is pretty much all the Bottom 90% are trained to do.  Fortuately the Bottom 90% are also trained to be docile sheep and the media where they get all their information is owned by the same Billionaires who are taking their jobs – forestalling the revolution.  

Speaking of which, Disney is looking to buy NewsCorp, which will bring us down to 4 owners of virtually all of the media in the United States (and AOL is now owned by Verizon and Time Warner is back out – for now).   The boards of these media companies typically include representatives of international banks, multinational oil companies, car manufacturers and other corporations.  About a third of newspaper chain editors admitted in a survey by the American Society of Newspaper Editors that they “would not feel free to run a news story that was damaging to their parent firm.” 

 Image result for ownership of media

All of this automation and coporate control of the media is going to happen right away, of course.  It's all happening now, has been happening for a long time and will continue to happen and, as Carlin said "there's not a damned thing you can do about it."  I've advised my children to train in careers that will take a long time for machines to master but I will advise my grandchildren just to be rich, and own the machines – because there really is no other way to be safe in the society we are forging here.

Image result for economic zombiesAnd don't you think the toadies know it?  That's why there is this "frenzy" of greed with so many politicians willing to do ANYTHING to gain the favor of the rich and powerful.  Like cartoon lackeys of super-villains, they see which way the tide is flowing and they want to be on the winning team. 

Those in the Bottom 90% are already casualties to them – walking economic corpses who don't even know they are dead yet, so what's the harm in smashing in the heads of the Bottom 90% and putting them out of their misery if it helps the toadies gain their objectives?  Hey, come to think of it – aren't there several TV shows that are drumming that logic into our society – even making heroes of the head-smashers?

Now where was I?  Oh yeah, so THAT's why I am long-term bullish about the economy.  I'm in the club, most of our Members are in the club and we're going to make a FORTUNE while tens of millions of people in the bottom 90% lose their jobs and fall through the social safety net our toadies are cutting more holes in, even as we speak.  If you want to secure your own future – GET IN THE CLUB! – not that we'll let you in, but it's fun to watch you try.

Even now, we are building our walls to keep out potential competitors for our 3M top spots.  Like Egyptian Taskmasters, we reward our toadies for cracking the whip – even when it's their own friends and family they are torturing.  Those walls need to be built because the thing we fear more than anything else is becoming one of you!  First we'll keep out the Mexicans, then we'll say how well that worked and we'll build walls within our cities to keep out the riff-raff and, before you know it, there will be two kinds of Americans – those who can get past the walls and those who can't.

It's a lot easier to watch 90% of the country sink into 3rd-World poverty if we don't have to interact with you.  Don't worry though, we'll have our robots to take care of us and clean up the mess.  

Image result for terminator animated gif

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  1. Good morning, All!

    Join us for the weekly webinar, today at 1pm!

  2. Good Morning.

  3. That tax cut is not a done deal it seems. In their rush to pass anything, the GOP messed up many things including the corporate AMT and there is no easy fix. In addition, the GOP California delegations just realized that eliminating local tax deductions is a suicide mission for them so they are looking for a solution now. Could be fun…

  4. This might become a problem for crypto:

    In just a few months from now, at bitcoin’s current growth rate, the electricity demanded by the cryptocurrency network will start to outstrip what’s available, requiring new energy-generating plants. And with the climate conscious racing to replace fossil fuel-base plants with renewable energy sources, new stress on the grid means more facilities using dirty technologies. By July 2019, the bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today.

    I can't check this guy's number but even if he wrong by 50%, still a big number.

  5. Even conservative economists predict a disaster:

    “There is no historical evidence that any tax cut in history comes anywhere near paying for itself,” he said bluntly. “At the most you get back a third of the revenue you lose, but that might be overly optimistic.”

    Bartlett, who also served as a Treasury Department official under George H.W. Bush, added that most previous tax cuts were enacted during economic downturns with high unemployment, and argued this bill will have far less positive impact because the economy is already doing well.  

    “When there is more slack in the economy, you get more bang for the buck,” he explained. “But there’s no reason to think that now, when we’re at a cyclical peak, that we’ll see any stimulative effect at all. If I were a corporate executive, I wouldn’t be building new factories for all the new sales I’m going to get.” 

  6. Holy crap, this is scary:

    I am constantly forced to remind myself that while we may one day hope to conquer ignorance, there will never be a cure for stupid. Barry Ritholz

  7. ?George Carlin – A reality check for todays Teens….. ;)

  8. I tried to listen to the interview with Maladrino, but couldn't get it. Said "not available.?" Might have to have a current Twitter account, or sign-up.

  9. hi phil

     LAURENTIAN BANK   LB.TO  sold off 8 percent yesterday due toannouncing they  had to buy back 124 million worth of mortgages it had previously sold. I consider it to be a very solid canadian bank and this looks like an over reaction to me likely due to canadians recent nasty experience with home capital group.

    The details are available on i would greatly appreciate your thoughts on this if you get a moment.

    Also what do you think about canadian bank valuations currently ive heard alot of americans consider them to be a short.


  10. Albo/Yodi,

    So everything I did yesterday was wrong.  I went longer on RH, shorter on HRB, and forgot about PLAY which I was leaning short on.

  11. Baron I told you to sell RH what more can one do???:)

  12. Phil/Portfolios-little behind here.  I agree with the new portfolios, but am hoping we get a lot of questions on the FU positions.  Don't have time for the futures and swing trading, but I think it's important to see the more complex trades and improve your skill at getting out of trouble when it arises.  Glad you are going to focus on fills/execution next year.  Hoping I have more time to ask questions regarding the specific strikes you choose and the technical.  Thanks.

  13. RH -  Baron, taking off the risk exposure on the short calls was the thing to do, but Yodi was right.  Good tome to just get out.

    WIN – Recently sold some WIN at 2.65.  Added back some exposure at 1.95.

  14. Phil; regarded your answers yesterday to members on the Butterfly rolls for WYNN and WMT, my question is what would trigger those rolls for you?  Once the 2020 come out, maximize the value of the long call, no premium in the short calls?  You would generally update positions once a month around the expiration date.  Would you have made those adjustments now or would you have waited until Jan when the short calls were expiring? TIA

  15. Good morning!  

    LA on the 405:

  16. TEVA WTF???

  17. Whole healthcare sector is bleeding

  18. I hear torquio but TEVA seems to be the worst again. Dangit!

  19. CLF    mentioned here a couple of days ago.  Some big trades today in the '19 & '20 $4.00 puts

  20. So – Phil – you think we should cash-out the Trade of the Year???  

  21. Phil/Portfolio Review

    One of my friend has the following positions in a small portfolio which have been accumulated over a period of 2 to 5 years. he cannot do options in this account and do not want to sell and book profits and pay the taxes. Do you think there is a way to hedge the portfolio without options (I guess it is difficult…). Plan is to sell some in Jan 2018.

    AA -
    AIG -
    ARNC -
    AXP -
    C -
    CSCO -
    EXK -
    FMCC -
    FMNA -
    GS –
    HBAN -
    OMER -
    WFC –

    AXP, C and WFC have good gains at this point. And EXK and SNAP are in big losses.

    I want to know what you recommend to protect gains in a portfolio without using options. I can provide more information if require.

    thanks as always.


  22. Big Chart – Wow, the Nas may test the 15% line at 6,210 at this rate.  Now we should calculate the drop from the 20% line (6,480) – even though we didn't hit it.  6,350 was the 17.5% line, so over that is going to be bullish again.

    Had we completed the move from 6,210 to 6,480, that would have been 270 points and call it 250 and call it 6,200 and 6,500 so we have a weak retrace of 50 to 6,450 and a strong retrace of 100 to 6,400 and those are clearly blown.  

    6,500 back to 6,200 then gives us a 50-point weak bounce to 6,250 and the 100-point strong bounce at 6,300 and those lines are the ones that are in play and they are bearish lines – as opposed to retrace lines, which are in play from a position of strength when they hold up.  

    Each 25 points on the Nas is significant and 6,350 is the 17.5% line, so super-significant there but we're miles away now and simply trying to make a strong bounce but failing 6,300 today will be a very bearish sign for the Qs.

    Tax Deal/StJ – I think they will push something through.  They don't know how long Trump will be President to sign it.  

    Bitcoin/StJ – I find those numbers hard to believe but I guess it's possible.  

    Interview/Pirate – The one in yesterday's post?   It works for me but I do have a Twitter account.  Sign up and follow me!  

    LB.TO/Tommy – Well what bothers me is that it was 4.9% of one portfolio they sold which, if you apply that to their whole portfolio, can get very ugly.  And now people are going to be looking for discrepancies (like when one person gets food poisoning, the whole chain goes under scrutiny).  I wouldn't jump right in and I'd wait for the audit and, hopefully, it discloses more bad loans but not so bad it justifies the next big sell-off.  You should go into that event prepared for a number and be ready to buy on bad news if it's not as bad as what's priced in.  On the whole, I was loving Canadian banks earlier in the year and last year but now they've appreciated to about the right price – so not too exciting. No reason to short them though.

    HRB/Baron – Aren't you the one I gave the bullish play to?  

    Submitted on 2017/12/05 at 12:01 pm

    HRB/Baron – Now there guys I love when they are cheap:

    There's not likely to be anything exciting about these earnings but you can pick up the July $24 ($4)/30 ($1.40) bull call spread for $2.60 and it pays $6 if all goes well for a $3.40 (130%) in 6 months if all goes well.  If earnings are disappointing, then you can sell puts like 2020 $20 puts, which are $2.60 now while the $25 puts are $4 – so in that range and that would more than pay for the spread and then you can invest in rolling the long calls so, either way, it's a good position.

    I know it doesn't seem sexy but already the July $24s are $5.40 and the July $30s are $2.20 for net $3.20, which is up 0.60 (23%) in a day.  

    It's not just about being right or wrong.  What I liked about the trade was that, even if earnings were bad – I still like HRB for the long-term, so I could adjust the trade and get another chance at it down the road.  The short bet was a one-time thing where you HOPE they disappoint but, if they don't disappoint – what is your comfortable exit strategy?  

    You are never going to be right (or wrong) 100% of the time.  Most people are 55/45 (mostly wrong) and the best stock-pickers are thrilled with 60/40.  The rest is all about risk-management and having a good plan for what to do when you are wrong.  Even if you are only right 40% of the time, if your winners pay 2:1 and your keep your losses at 50% then 10 $100 bets yield: $200, $200, -$50, -$50, -$50, $200, -$50, $200, -$50, -$50 - and that's STILL net +$200.  THAT is the goal of investing – win more than you lose on each bet and THEN worry about improving your guesses!  

    Questions/Seer – Well that will be up to you.

    Butterfly/Options – Well I watch the net of the rolls and, sometimes they are favorable and sometimes not and I try to pick good spots in the ranges and take advantage of good prices on each end.  Once there's no premium in a short put or call – it's no longer working for you so it's a good time to do something – unless you think it's got value as protection, of course.  In general, I try not to make changes more than the usual monthly updates – one of the points I like to hammer home in the portfolios is NOT to constantly mess with positions.  If you have a balanced portfolio, the number of things that work out tend to outnumber the number of things that hurt you by leaving them alone over time.  

    What would I have done?  Well either next week or in a month I would have made the adjustments but, since I think we're going to correct, I'd probably wait until Jan to see where we are.  

    TEVA/Jabob – Doesn't look like there's a deal with AMZN.  

    CLF/Stock – Benefit from protectionism.

    Slowdown in China is spooking people but CLF could care less:

    That's what I like about them.  

    As a new trade, you can sell the 2020 $7 puts for $2.50 to net in for $4.50 and leave it at that or you can add 2x the 2020 $4 ($3.10)/7 ($1.95) bull call spreads at $1.15 for a net 0.20 credit on $8 worth of spreads that are $4 in the money so far (though, at $6, you'd have to give $1 back to the short puts and only make 300% if CLF stays flat).  

    HBI/Jeff – Well our trade last Tuesday was

    In the OOP let's:

    • Sell 15 HBI 2020 $20 puts for $3.50 ($5,250) 
    • Buy 25 HBI 2020 $18 calls for $4 ($10,000) 
    • Sell 25 HBI 2020 $23 calls for $2 ($5,000) 

    We did double that in the LTP and now the $20 puts are $3.10 ($4,650) and the $18 ($4.50)/23 ($2.40) bull call spread is $2.10 ($5,250) for net $600 which is up $850 (340%) in a week.  I think the puts were $3.40 by the time we got in but the spread was an easy fill at $2 but the point is there's no loss there and you can certainly keep it as we're going to go right back in and I'd still do this position since it's now more in the money and still about the same price with $12,000 more to gain.  

    Remember, we are cashing in our portfolios because they are there to TEACH people.  If you have positions you like, there's no need to get out of them if they are well-hedged.  We're expecting a 20% correction that might not even come but, rather than hassle with keep this and not this and jiggle around all our positions and hedges and make a huge mess – why not just cash out and start from scratch?

    It doesn't mean you have to – we're only going to go back into most of the positions we have now – only smaller as we're banking $2M in gains!  

  23. Wow !  Deja Vu all over again.

  24. Phil,

    Did you stop out of /SI or are you playing with conviction?

  25. Portfolio/Pat – LOL, would you like to send me more information.  I guess I can get into the business of doing individual reviews for people who don't even bother subscribing.  Actually I can't – I'm not a financial adviser and that's simply not a good thing to do!   In GENERAL, you have to use your head and look at each position and think about how you feel about it – especially how you WILL feel if the broad market goes down 20% and your positions are down 10%-40%.  Which ones do you want then?  

    If you have "good" gains that can be offset with "good" losses, why not start there and begin to lighten up so at least you are more flexible (and have a lower cost of hedging) and then pick out some sensible hedges to go through the holidays. 

    Speaking of hedges.  TNA is the ultra-long Russell ETF at $67.87, well off the highs at $73.50.  If you think you will regret going to CASH!!! then you can take an upside hedge using something like this, which will give you great gains if the rally continues (or Santa Clause comes to town).

    Just like any play, a bull call spread will keep you from losing too much and the longer spreads have a lower net delta and that means you won't get too burned on the downside.  So, for example, we are cashing in the OOP (the SA people voted yes too) at $300,000ish and usually we make about $10,000/month so, if we think we'll miss out $20,000 in gains during December and Jan, we can:

    • Buy 20 TNA April $60 calls for $12 ($24,000) 
    • Sell 20 TNA April $70 calls for $6.50 ($13,000) 
    • Sell 3 TSLA April $330 calls for $19 ($5,700) 

    The net cost of the trade is $5,300 and it returns $20,000 if TNA is simply over $70 in April so you'll capture $14,700 (277%) in profits if all goes well.  If not, unless TSLA has a major rally, you will only lose $5,300 at most but, more likely, you'll be able to salvage half of that by closing out the bull spread if the market is heading lower – as we expect it will.  

    You can, of course, use anything to offset the bull spread but I feel pretty good about shorting TSLA, rally or no rally!  

    Oops, forgot about oil (I got out yesterday) – down big on net build in stocks:


    • EIA Petroleum Inventories: Crude -5.6M barrels vs. -3.4M consensus, -3.4M last week.
    • Gasoline +6.8M barrels vs. +1.7M consensus, +3.6M last week.
    • Distillates +1.7M barrels vs. +1.0M consensus, +2.7M last week.
    • Futures -1.23% to $56.91.

    The headline draw in Crude is wiped out by the bigger builds in Distillates and Gasoline and they signal weak demand so $55, here we come!  

    /SI/Japar – 2 long at $16.04, looking to add 2 more at $15.96 as we discussed yesterday (well off by a penny as I didn't get my $16.03 on 2).  

  26. As noted yesterday, Japar (and no, I don't like repeating things over and over again):

    December 5th, 2017 at 11:01 am | (Unlocked) | Permalink 

    OK, I added 1 long /SI at $16.06.  Will add another at $16, two more at $15.97 and then my avg will be $16 on 4 and probably stop out if $15.95 doesn't hold.  

  27. Phil/Portfolio Review,

    Yes I understand and you are absolutely right about reviewing individual portfolios. I mean my idea to show you the positions was to just get feedback on something that stands out and can be liquidated. I do not expect to explain each position. Also was important to understand how you hedge a portfolio which cannot use options to hedge. I guess netting profits and losses is the way to go first to reduce the size…

    appreciate your time to reply.


  28. BTC – tulip bulbs and beanie babies cannot be demised. Keep that in mind in that moronic comparison.

  29. Viagra goes generic: Pfizer to launch own little white pill

  30. California Fires: Blaze Breaks Out Near Getty Center in Los Angeles

  31. The Republican civil war, explained in 1 amazing picture

  32. Phil,

    Are you looking to go long /RB today for weekend run up or holding off b/c of build on EIA?

  33. those energy articles around bitcoin are so stupid and lacking. Who writes this stuff and how do they continue to publish it? I think there readers want to believe something and they fill that void. There is no other explanation.

  34. All/FNSR

    From IB Brokers



    Consensus EPS

    Consensus Revenue



    When Announced

    Avg 1-Week



    Q2 '18








     *Represents the average change in stock price over the one-week period following the past four earnings announcements.

  35. Damn, that took up a lot of space; won't do that again

  36. Phil, did you blow out the longs on /NGV8. You had 2 long yesterday at 2.875? thanks as always

  37. Albo/Yodi/RH

    Now up 2.5%?!  I hate the markets. FU RH!

  38. Albo/Yodi/RH

    Oh, wait, I forgot, I covered the short call and left the puts.

  39. A Weekend with Bernie

  40. if you download the Brave browser now you get 30 coins for free (currently $6.17). This is a freebie, and this browser is a view of an easy-to-use crypto-enabled future (which I discussed yesterday).

  41. Hmm webinar link not working for me? anyone else? getting a "this site cant be reached" error

  42. crs101010


    not working for me


    go to first comment today

  43. Phil/ any new futures position from the webinar, couldn’t join? Thx

  44. Phil/greg – if you sign up at you can register paw's domain as a content provider and people using the Brave browser send a portion of their tips directly to your account.

    Also: big picture –

    we gotta keep on top of this stuff. It's big

  45. *psw domain I meant (this autocorrect is getting way to aggressive)

  46. Holy crap, I have to start charging by the minute for those Webinars. Then I go out with my kids later and they say "Why don't you feel like talking?"

    Made $350 on /RB so it was worth people's time, I hope.  

    /RB/Japar – Good call but I took it and ran as I didn't like the way it was trading – especially with /CL failing $56, though I actually left on one long /CL at $56.

    /NG/Jasu – Same 2 longs about even.    I just don't watch them like you guys do.  I generally let things play out for days or weeks unless they make money quickly, in which case I'm happy and take the money. 

    Brave/BDC – That's a good promotional.

    Futures/Ravi – I have 2 long /NGV8, still $2.87 and one long /CL with no conviction at all at $56 and 3 long /SI at $16.02 that expect at least $16.20 for and 6 long /KC at $127.675 that I'll probably stop out at $125 but hopefully cash 4 of at $130.

    Big/BDC – I was saying in the Webinar, if Governments don't shut this stuff down by next summer, I think it will hit critical mass and be out of their control.  

    Once again the markets are weak-looking into the close. 

  47. Phil – thx

  48. Retail investors scooped up shares at fast pace in November – TD Ameritrade

    • The TD Ameritrade Investor Movement Index surged more than 15% in November – the largest single-month increase ever.
    • "The retail investor has become a bit more of a believer,” Ameritrade's Joe Kinahan tells Bloomberg. "We don’t want people to get overzealous, if you will. This is controlled exuberance.”
    • Investor Movement Index

    Sell-side mostly looking for bounce in Toll Brothers

    • Toll Brothers (NYSE:TOL) tumbled more than 7% yesterday following an earnings miss, but the sell-side is mostly defending, with a number of price target hikes.
    • Wells Fargo ups to $54, KBW to $50, and Oppenheimer to $53. Toll closed last night at $46.93.
    • KeyBanc is an exception, downgrading to Sector Weight.
    • Speaking on the earnings call, CEO Douglas Yearley said the company hasn't seen a change in buyers' behavior from looming tax reform (which could did the value of the mortgage interest deduction, particularly for the high-end homes Toll mostly builds).
    • Checking guidance, Toll expects sees revenues rising as much as 29% in fiscal 2018, but the adjusted gross margin of 24% would be slightly down from this year.
    • Shares +0.25% premarket
    • Previously: Toll Brothers misses by $0.02, misses on revenue (Dec. 5)

    Crude oil settles at two-week low on surprise rise in U.S. fuel stocks

    • U.S. crude oil tumbled 2.9%, its biggest daily decline in more than two months, to settle at $55.96/bbl amid a big jump in U.S. inventories of refined fuel while U.S. crude production hit another weekly record.
    • The latest EIA weekly data showed U.S. gasoline stocks rose by 6.8M barrels and distillate inventories added 1.7M barrels, hitting prices of both crude and products in a market that analysts say was tilting bullish and vulnerable to a selloff.
    • The EIA also showed U.S. crude stocks fell by a greater than expected 5.6M barrels, but this in part was due to closure of the Keystone pipeline after a leak in mid-November, which cut flows to the Cushing, Okla., hub; the line has since reopened.
    • “A solid draw to crude inventories amid higher refinery runs – nearly 800K [bbl/day] above year-ago levels – [was] offset by a whopper of a build to gasoline inventories,” says Matt Smith, director of commodity research at ClipperData.
    • “The sentiment-driven support to crude oil prices has somewhat dissipated as market participants look beyond last week’s OPEC meeting,” says Abhishek Kumar at Interfax Energy’s Global Gas Analytics in London.

    Exxon is latest U.S. firm to supply newly free Mexico fuel market

    • Exxon Mobil (XOM -0.4%sends two cargoes to Mexico totaling 120K barrels of diesel and gasoline from its refinery in Beaumont, Tex., in its first fuel shipment to the country's newly free market.
    • XOM is moving cargoes along Kansas City Southern's (KSU -0.3%) rail network and plans to utilize the San Jose Iturbide terminal in Guanajuato state, which is being expanded, to bring in more supplies.
    • A growing number of foreign companies plan to invest in ports terminals, fuel storage facilities and other logistics infrastructure in order to compete with state-owned Pemex, the country's primary fuel vendor and distributor; Chevron last week said it would bring products from its California refining system to Mexico to supply its gas stations once the infrastructure becomes available.
    • First Solar (FSLR +4.6%) breaks out to fresh one-and-a-half-year highs in a strong response to yesterday's investor update, which included above consensus 2018 earnings guidance and the rollout of its long-awaited Series 6 panel.
    • Analysts weigh in with several price target raises, with at least five sell-side shops coming out with praise for FSLR.
    • Guggenheim hikes its FSLR target to $74 from $63, saying early success of Series 6 and favorable conditions in the marketplace encourage more ambitious expansion plans, and that the significant bookings help create visibility and improve conviction in its model estimates incrementally.
    • Needham says management's commitment to aggressive capacity expansion highlights the growing confidence in the large backlog of contracted business, and it believes FSLR's structural advantages position it to deliver solid top- and bottom-line growth beyond the 2018 transitional year (source:
    • Other price target increases: Baird to $69 from $53, Cowen to $77 from $66, Deutsche Bank to $75 from $65.
    • Steel names including U.S. Steel (X +6.4%) and AK Steel (AKS +5.5%) enjoy hefty gains following the Commerce Department's move to impose import duties on steel from Vietnam that originated in China.
    • While the market is rewarding the shares today, Axiom Capital's Gordon Johnson maintains the DoC's decision is "virtually irrelevant in terms of supply/demand."
    • Johnson says imports of cold rolled coil and hot-dip galvanizing steel have "virtually collapsed" since November of last year.
    • Vietnam suppliers say their product does not include Chinese components, and U.S. importers have continued to buy their steel, meaning that Johnson expects about half of the current imported Vietnamese steel gets banned incrementally.
    • Also: NUE +1.2%STLD +1.3%CMC +2.4%MT +1.9%CLF +1.3%WOR +0.4%RS +0.8%SLX +0.8%.

    Biotech drug pricing should not get substantially worse next year – Mizuho

    • In an interview with Bloomberg News, Mizuho Securities' Salim Syed says pricing in the biotech sector is "not getting any better" but "will not get substantially worse" in 2018. He says pricing and M&A activity will be key areas next year and beyond after a slowdown in deals this year.
    • Mr. Syed also says lower taxes for repatriated funds will be a positive, especially for cash-rich outfits like Amgen (AMGN -1.6%) and Gilead Sciences (GILD -0.3%) adding that bringing funds back to the U.S. should stoke deals.
    • Gilead (BUY/$83): A top pick for 2018 on bullish prospects for Yescarta. It could pursue deals but it would be potentially distracting from the Yescarta launch.
    • Amgen (BUY/$192): A "risky long" with attractive balance sheet and cash for acquisitions. Likes prospects for biosimilars and cholesterol med Repatha.
    • Biogen (BIIB -1.7%) (BUY/$400): A top pick for 2018 on bullish prospects for Alzheimer's candidate aducanumab. Sees a 10% boost to share price if it improves its messaging around Spinraza in Duchenne muscular dystrophy.
    • Celgene (CELG -0.8%) (BUY/$128): Needs to do deals to reignite share growth.
    • Separately, analyst Difei Yang likes Zogenix (ZGNX -4.4%) and ViewRay (VRAY -0.7%) adding that ZGNX, Nektar Therapeutics (NKTR -3.1%), Aerie Pharmaceuticals (AERI -2.5%), Revance Therapeutics (RVNC -2%) and Achaogen (AKAO -0.5%) are all potential acquisition targets.
    • Source: Bloomberg

    TiVo CEO buys $1M in shares

    • TiVo (NASDAQ:TIVO) is up 2.8% premarket in thin trade after an SEC filing shows its chief executive picking up almost a million dollars in shares.
    • President/CEO Enrique Rodriguez bought 55,974 shares across two transactions this week (54,054 at $17.8647, and 1,920 at $17.681), for a net outlay of $999,606.
    • Shares are down 23% YTD and have fallen 9% over the past couple of weeks.
    • B. Riley analyst Eric Wold says Cinemark's (NYSE:CNK) movie subscription service is a smart strategy on the financial front.
    • "Assuming a $10 to $11 average ticket for times when these Movie Club tickets would be used, Cinemark would still net $3 to $3.50 per ticket (after the studio’s cut of the full-priced ticket) as opposed to $4.50 to $5 without the Movie Club discount," observes Wold.
    • "And with the average moviegoers only purchasing 5.3 tickets per year, the opportunity to drive increased visitation of even just one to two more times per year could have a meaningfully positive impact on Cinemark’s overall domestic box office trends as well as the financial results of Cinemark and studios alike," he adds.
    • Previously: Cinemark unveils movie membership program (Dec. 5)
    • After saying the last one was the "last one," Disney (DIS -1.2%) CEO Bob Iger is likely to take another extension of his term as CEO, past 2019, The Wall Street Journal reports -- to facilitate integration of Fox (FOX +1.1%FOXA +1.2%) assets into the company assuming the multibillion-dollar deal is done.
    • Sources say the extended tenure is likely as the biggest acquisition in Disney's history reportedly heads for some kind of endgame. The assets said to be for sale at Fox have an enterprise value between $40B and more than $60B, depending on the observer.
    • Iger would extend by another 2-3 years if the deal is done, according to CNBC.
    • Previously: Disney's Parks chief emerging as CEO succession candidate (Nov. 27 2017)
    • T-Mobile (NASDAQ:TMUS) has announced a new $1.5B stock repurchase program to last through Dec. 31, 2018.
    • That can include purchases on the open market or privately (but not buys from the holdings of parent Deutsche Telekom (OTCQX:DTEGY)).
    • "We also understand that Deutsche Telekom AG, our majority stockholder, or its affiliates, is considering plans to purchase additional shares of our common stock," T-Mobile says.
    • Shares are down 0.8% premarket.
    • Recode reports that last month’s revelation that Google (GOOGGOOGL) was tracking Android users without permission came from rival Oracle (NYSE:ORCL).  
    • Recode’s sources say Oracle has mounted a campaign against Google for the past year as the companies fight in federal court.
    • Other actions Oracle has taken against Google: $8.8M in lobbying, seeking EU penalties, and anti-Google billboards in Tennessee.
    • The legal fight goes back to 2010 when Oracle accused Google of copying Java to create Android. The next oral arguments in the current appeal begin tomorrow.
    • In other Google legal news, a California court dismissed class action claims that accused the company of sex-based discrimination.
    • Judge Mary Wiss said the lawsuit wasn’t appropriate because it included all female Google employees. The plaintiffs have 30 days to file a complaint on behalf of only the women who experienced pay discrimination. 
    • Oracle shares are up 0.9%.
    • Google shares are up 1.4%.

    Apple suppliers drop after Largan warns of lower Dec. revenue

    • Apple (NASDAQ:AAPL) supplier Largan Precision (OTC:LGANF) warns of lower December revenue compared to the previous month.
    • Largan had $187.2M in November sales, which was flat on October but up 8% on the year. 
    • The revenue drop comes in a period that’s traditionally strong for iPhone shipments. Largan supplies lenses and Face ID modules for the devices.
    • Taiwan’s Economic Daily News reports that Largan’s weak December comes from a drop in orders but didn’t specify from which customers. 
    • Yuanta Investment Consulting analyst Jeff Pu thinks Apple has cut back iPhone X orders from 69M to 63M for the November to March period after previously cutting iPhone 8 and 8 Plus for 1Q18 to 16M units, half of the current quarter.   
    • Apple suppliers moving on the news: Skyworks Solutions (SWKS -0.8%), Cirrus Logic (CRUS-1.6%), Broadcom (AVGO -1.2%), and Qorvo (QRVO -3.8%).  

  49. SQM is a Chilean company with mines in 3 countries, Australia will be 4th a Lithium mineral leader and has options, what do you think?, Phil, Yodi……

  50. Tax Bill – yes, it will make America Great Again, we will create more jobs, corporations will reinvest there new found wealth in America;  jobs… jobs.. and jobs.. .  NOT!    

  51. Advill, Hi not too far from you Miramar! Hope you OK in Barcelona. Regards.

    SQM, Not too sure about their battery product. Financials very questionable, negative cash flow, options only till Jul 18. 21% down from their yearly high. At 50 below their Oct low, but looks to be on a further down slide. Burned my fingers with MOS. Further I am one, not a believer in battery cars. Try to pull your RV with one of them. At present market I am in a wait and hold position. For me the stock is a gamble at best.

  52. GrassHopper to many sundowners, stay off it! :)

  53. :-)   Confirmed, I need to have a sundowner before reading the news.  I didn't realize how bad off America was until moving to Asia recently.