Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Which Way Wednesday – Fed Minutes Edition

So far, so predictable.

And that's the way we like our markets, right?  It was two weeks ago (2/6) that we prediced the market would bounce back from 2,550 to at least 2,650 (strong bounce) for the week and then, on 2/9, we broadened our lines and came up with the following predicted range for the S&P (/ES) Futures using our fabulous 5% Rule™:

Here's how those lines are holding up two weeks later:

We're testing the top of the bounce range but remember that range tops out still only 40% back to the 30% line, which doesn't even register on the chart anymore as the trading range has narrowed – as we predicted – at the lower levels.  As I said in yesterday's Morning Report, evidence suggests that 20% line may be the top of the range for rest of the year, not the bottom or even the middle and we will need to look down to the 10% line, at 2,420, for proper support after the next correction.  Hopefully, we'll consolidate around there for a proper move up later in the year (assuming things hold up in the economy).

This isn't about TA (I HATE TA), the 5% Rule is just a mathemetical representation of the Fundamental Value of the S&P 500 and we simply use the chart to illustrate it.  Stocks can go a very long time 10% overvalued and even grow into that valuation without a correction but 20% over-valued is strething it and, as we're seeing this earnings season, we set the high-flyers up for big punishments when they miss.  Here's the Big Picture on our other indexes from our Big Chart:

Those 50 and 200 dmas are the only TA I do pay attention to because those represent the average that a large sampling of investors have been willing to pay for a stock (or index) and, as you can see, we're still miles over the 200-day moving averages for our indexes so, the question is, what changed in the last 50 days to justify a 10% bump in the indexes?  I guess you can kind of say the taxes but, as we noted in yesterday's Report – those are only going to add 5% to earnings at best and, if that's it – then we're still a good 5% too high and we should be looking down, not up, to see where the market is heading next.

There's nothing bad about a correction, corrections let you buy stocks for reasonable prices.  It's like never buying jeans again because they went on sale – that makes no sense.  Corrections are as natural as sales are in stores and this one in the stock market is long overdue.  A correction is only a problem when you don't plan for one:  When you overplay a bullish hand, when you fail to hedge, when you fail to keep cash on the sidelines – that's when you fear a correction.  Otherwise – it's simply an opportunity!  

We finished last year at 2,675 so, in the bigger picture, the drop to 2,550 was only down 125 points (5%) for the year, not even touching the average 13.8% decline.  It only seemed like a big drop as the S&P had moved 200 points higher BEFORE falling 125 points below the baseline.  Now, at 2,706, we're still net postive for the year – so we haven't even had our real correction yet and why should this year be so exceptional that is has no correction?  If you can't easily answer that – you should probably consider a good hedge!  

Meanwhile, we'll see if we can take out those strong bounce lines and, just as importantly, those 50 dmas at 25,188 on the Dow, 2,727 on the S&P (also the strong bounce line), 6,632 on the Nasdaq, 12,966 on the NYSE and 1,548 on the Russell.  Until 3 of those 5 are over the line – there's nothing to be bullish about anymore so than you would be bullish about a ball you dropped that has bounce back to your knee making the next bounce back to your hands – that's not the way physics works and, without the application of additional force (money flows) – that's not the way the markets work either!

The Fed releases minutes at 2pm and that might boost the markets as they've generally been operating in fear of more hikes recently and I very much doubt there will be indications of more than 4 hikes in the minutes.

We'll be doing a Live Trading Webinar at 1pm, EST so we'll be able to react live to the Fed – come join us this afternoon.

Also, I will be giving a 4-hour "Master Class" on Hedging, Options Trading Strategies, Portfolio Management and Fundamental Analysis at the opening of the New York Traders Expo this Sunday, Feb 25th at 9am at the Marriott Marquis – so register now if you'd like to hear a lot more about our strategies as well as get a look at our Top Trade Ideas for 2018.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Good morning, All!

    It's webinar day!

    Join us at 1pm here:

  2. Rejected – so far!

  3. Phil / CMG. have same

    20X of the '20 300 / 350 BCS 

    I also have 5X of the '20 $280

    and short

    3X Apr $315 Calls 

    3X Apr $320 Calls

    Im thinking of rolling these up to 330 or just uncovering completely….  Would like your thought on this.


  4. Good Morning.

  5. GLUU -  A name from the past.

    Quite a few of us did very well following Optrader in and out of GLUU.  Could be worth another look.

  6. Good morning! 

    Big pop at the open gets us green – now we'll see what sticks.  6,850 is still my go-to short (/NQ) if we hit it, now 6,832 but maybe 1,545 on /TF gets tested too (1,539 now).

    CMG/Batman – Well if the 5 2020 $280s are naked longs then you are well-covered and I wouldn't do anything as they are still good protection and you can roll them when they run out of premium, not while they have a lot of it.

    Reuters guys just interviewed me on Lending Club (LC) and it amazes me how seriously they take this company.  I don't know if they'll use what I said as I told them it was basically a $1.6Bn penny stock that lost $125M lending $575M in 2017 and it's really just a question of when they run out of suckers to fund them.  Didn't seem to be the angle they were going for in the article…

    GLUU/Albo – Those game companies are really hard to pin down.  This one's a $500M company that makes no money but at least they don't lose too much, maybe $50M and they have $63M in cash so worth a toss if you think they have some new game but we liked them when the Kardashian game was a hit for them, not sure what their next trick is.  

    Woops, no going to make our shorting lines…

  7. Another insane valuation:

    • Airbnb (Private:AIRB) has lost over $100M on its Experiences feature, according to a WSJ source.
    • Experiences offers unusual activities in the areas surrounding an Airbnb rental. Airbnb gets a 20% commission from booked activities in classes. 
    • Sources say Experiences brought in about $10M in gross sales last year or $2M for Airbnb. 
    • The company forecasts $200M in annual gross sales by the end of this year or $40M after the commission. 
    • Airbnb has a $31B valuation and nearly broke even last year with $2.57B in revenue and a $75M loss. The company is expected to go public next year.       
    • Previously: Detroit enforces Airbnb rental ban (Feb. 9)
    • Redbook Chain Store Sales+3.7% Y/Y vs. +2.8% last week.
    • Month-to-date chain store sales +3.2% Y/Y.
    • February sales are expected to be up 3.7% Y/Y.
    • February U.S. PMI Composite Flash55.9 vs. 54 consensus, 53.8 prior.
    • Services PMI 55.9 vs. 53.5 consensus, 53.3prior.
    • Manufacturing PMI 55.9 vs. 55 consensus, 55.5 prior.

    • German flash composite output index eased slightly in February at 57.4 retreating from an 81-month high of 59.0, missed forecast of 58.5,
    • However, the index at 57.4 still reflects robust, albeit slower, growth across both the manufacturing and service sectors.
    • Flash manufacturing PMI at 60.3 against the expectation of 60.6 as factory output growth eased to a four-month low as the pace of expansion moderating further from December’s recent peak.
    • German services PMI fell to 55.3 from near seven-year high of 57.3 in January, against the expectation of 56.9.
    • Source:

    Robust growth still seen in eurozone

    • Emerging as one of the best-performing major economies last year, eurozone business growth remained robust this month despite indications that higher prices and a stronger currency were taking a toll.
    • IHS Markit’s composite flash PMI fell to 57.5, from January's final reading of 58.8, but the reading was still one of the most expansionary – or farthest above 50 – in more than 11 years.

    UK Unemployment Rate Rises To 4.4%; Wage Growth Up 2.5%

    • The jobless rate in the UK inched up from its lowest level of 4.3% in more than four decades in December to 4.4%, against analyst consensus of the unchanged unemployment rate.
    • The claimant count fell by a seasonally adjusted 7,200 in January, compared to expectations for a gain of 2,300 people, following an increase of 6,200 a month earlier.
    • The average earnings index, incl. bonuses, rose by a seasonally adjusted 2.5% in the three months to December (excl. bonus rose by 2.5%), matching forecasts and unchanged from the preceding three-month period.
    • The rise in the jobless rate and the increase in average earnings may undermine the case for the BOE to raise its benchmark interest rate in the months ahead.
    • Source:
    • Devon Energy (NYSE:DVN-7.3% premarket after missing its Q4 earnings number and issuing 2018 production guidance that also missed analyst expectations.
    • DVN said its Q4 oil production missed its own guidance by ~14K boe/day, and forecasts FY 2018 total output of 552K-576K boe/day with U.S. oil production rising ~14% this year.
    • RBC analyst Scott Hanold, who rates DVN at Outperform, expects shares to trade down today as investors may take a wait-and-see attitude for now.
    • Cowen’s Charles Robertson, who also rates the stock at Outperform, says DVN's earnings call should focus more on the company’s potential for cash return in dividends and buybacks after it pays down debt.
    • J.P. Morgan’s Arun Jayaram says 2018 is off to a slower start for DVN but the firm retains a positive bias on shares over next 12-months, given the company's plans to balance growth and free cash flow generation.
    • Source: Bloomberg First Word

    • Cheniere Energy (NYSEMKT:LNG): Q4 EPS of $0.54 beats by $0.08.
    • Revenue of $1.75B (+206.2% Y/Y) beats by $140M.
    • Press Release
    • Investors and analysts are still hashing out what to make of Walmart's (WMT -0.2%) e-commerce growth rates after yesterday's reported Q4 deceleration from prior quarters.
    • Walmart CEO Doug McMillon said the slowdown was largely expected due to the lapping of the acquisition (added scale), but did concede some "operational challenges" also factored in.
    • "Management expects the growth rate to ramp back up to the 40%+ range after 1Q, but we suspect this target will be met with more skepticism following 4Q17 results than when it was first laid out to investors several months ago," chimes in RBC Capital analyst Scot Ciccarelli.
    • For the full fiscal year, Walmart's e-commerce sales were up 44% Y/Y.

    La-Z-Boy races higher after earnings

    • La-Z-Boy (LZB +10.7%) gains after a comfortable beat on both lines of its FQ3 report.
    • The company's revenue tally of $414M topped even the highest estimate from Wall Street analysts.
    • Sales in the upholstery segment were up 6.0% to $321M and the operating margin fell to 9.9% from 11.8% Sales increased 17.0% in the casegoods segment to $27.2M and the operating margin increased to 10.3% from 6.8%.
    • Shares of Rent-A-Center (NASDAQ:RCII) fall sharply after Q4 results arrive short of expectations.
    • Comparable sales fell 2% during the quarter to miss the consensus estimate for a 1.5% increase. Total sales were down 6.6% Y/Y to $639M.
    • CEO update: "In order to improve company performance, we are focusing our attention on reducing costs and improving cash flow. We also intend to improve traffic trends through a more targeted value proposition and customer centric approach. In addition, we have also initiated efforts to more aggressively expand our franchising operations in order to enhance our brand in a more capital-efficient way."
    • Looking at cutting costs, the company says it has identified annualized cost savings opportunities of $65M to $85M, approximately two thirds of which is expected to be realized in 2018.
    • Previously: Rent-A-Center misses by $0.34, misses on revenue (Feb. 20)
    • RCII -15.45% AH to $7.55.
    • Broadcom (NASDAQ:AVGOlowers its offer for Qualcomm (NASDAQ:QCOM) to $79/share from $82/share.
    • Amount includes $57 in cash and $22 in Broadcom shares.
    • Adjustment follows Qualcomm’s raised bid to acquire NXP Semiconductors (NASDAQ:NXPI). 
    • If Qualcomm doesn’t complete the NXP acquisition, Broadcom would raise the price back up to $82.  
    • Key quote: “Broadcom believes that a responsible Qualcomm board could have preserved value by following ISS's clear recommendation to work with Broadcom on the NXP transaction and negotiate the sale of Qualcomm to Broadcom.  Instead Qualcomm's board acted against the best interests of its stockholders by unilaterally transferring excessive value to NXP's activist stockholders.  Despite this direct value transfer, Broadcom remains committed to delivering a value-maximizing offer to Qualcomm stockholders.” 
    • Broadcom shares are up 0.9% premarket. 
    • Qualcomm shares are down 0.6%
    • NXP shares are up 0.3%.    
    • Previously: Qualcomm increases NXP offer to $44B, activist investor approves (Feb. 20)
    • Previously: Broadcom: Qualcomm's boosted NXP offer a unilateral value transfer (Feb. 20)
    • Dish Network (NASDAQ:DISH) posted a big profit in Q4 with the help of tax reform legislation, but revenues fell by more than 7%.
    • A net income of $1.39B (vs. prior-year $355M) included a tax benefit of about $1.2B from adjusting deferred tax assets/liabilities. It also had a negative impact of $112M from impairment of long-lived assets.
    • The company gave its first numbers on Sling TV: 2.212M subscribers, which along with 11.03M Dish TV subscribers gave the company a total pay TV subscriber count of 13.242M. Net Pay TV subs rose by 39,000, including 75,000 reactivations in Puerto Rico and the Virgin Islands; last quarter the company wrote off about 145,000 subs there due to Hurricane Maria.
    • Pay TV ARPU for 2017 fell to $86.43, vs. 2016's 88.66. Average monthly subscriber churn for the year was 1.78%, down from 2016's 1.97%.
    • Conference call to come at noon ET.
    • Press release
    • 10-K filing
    • Google (GOOGGOOGLunveils a new AdSense unit called Auto Ads, which uses machine learning to better match ads to pages.  
    • The Auto Ads will detect the best kind of ad for a page, best ad placement, and how many ads to feature.
    • Publishers only need to add one line of code to use the ads. 
    • Google tells TechCrunch that publishers participating in an Auto Ads beta saw “an average revenue lift of 10% with revenue increases ranging from five to 15 percent.”
    • Alphabet Class A shares are up 0.2% premarket.  

  8. You guys are quiet, is this a vacation week?

    Just a little stutter in the markets and now we're rockin' at 25,085, 2,734, 6,840 and 1,546 but we can't bet against the momentum though I'd love to catch 6,850 on /NQ and, of course, failing 1,545 is a good chance to short /TF with tight stops.  

    /NGV8 flew up to $2.80 after a head fake lower but /KC still sucking.  

    The Dollar stopped going up so now the rest can make a move. 

    • Fitch Ratings forecasts Macau's gaming revenue growth will grow a "solid" 13% this year. The mass market segment is expected to generate 16% revenue growth and revenue in the VIP segment is seen rising 10%.
    • The full-year forecast takes into account more challenging year over year comparisons later in the year and the more volatile nature of the VIP segment (+27% last year).
    • Fitch on licensing risks: "We do not believe the gaming concession expirations in 2020 for MGM Resorts and SJM Holdings and in 2022 for the other four Macau operators are a major risk. We think the government will take a pragmatic approach to renewing (or re-bidding in technical terms) the concessions, emphasizing future non-gaming investment and promotion of local employees by the concessionaires. That said, there is a risk that new concessionaires will be permitted or that the government will look to extract some form of additional consideration."
    • Full Fitch Ratings report
    • Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMYWYNN), Sands China (OTCPK:SCHYYOTCPK:SCHYFLVS), MGM China (OTCPK:MCHVFOTCPK:MCHVYMGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHFOTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO).
    • Related ETF: BJK.
    • Boyd Gaming (BYD -7.7%) trades sharply lowering after setting guidance below expectations. Harsh winter weather in the Midwest and South cut into Boyd's results over the first six weeks of Q1, warned Boyd execs on the conference call (transcript) last night.
    • Susquehanna analyst Rachael Rothman thinks Boyd Gaming will trade down for a bit due to the soft guidance, but sees upside from acquisitions and free cash flow playing out over time. She keeps a Positive rating on Boyd lowers the price target to $41 from $43.
    • Previously: Boyd Gaming misses by $0.05, misses on revenue (Feb. 20)
    • Previously: Boyd Gaming slips after earnings miss (Feb. 20)
    • Calling last night's earnings report a "mixed bag" despite the headline miss and soft guidance,BTIG's Mark Palmer reiterates his Buy rating on LendingClub (LC -9%).
    • He notes LendingClub was able to grow revenue 20% in Q4, but says that expenses were excessive and the company needs to manage them appropriately.
    • Palmer has a 12-month target price of $7 per share, nearly 100% upside from this morning's level.
    • Previously: LendingClub down 7% after miss, soft guidance (Feb. 20)

    • MKM Partners maintains a Buy rating and raises its Amazon (NASDAQ:AMZN) price target from $1,350 to $1,750, a 19% upside to yesterday’s close.
    • Analyst Rob Sanderson calls Amazon “the best growth story of all the mega-caps over the very long term.” 
    • MKM ups its 2022 EPS estimate from $66 to $78.   
    • Amazon shares are up 1.7% to $1,493.27 with a 52-week range of $833.50 to $1,498.  
    • Vonage Holdings (NYSE:VG) met expectations with Q4 earnings but swung to a loss due to tax-legislation adjustments.
    • Shares are down 11.5% and at their lowest point since Jan. 9.
    • Revenues ticked up nearly 3% and income from operations rose to $23M from a prior-year $5M.
    • Sharp business-segment gains made up for a decline in consumer revenues; UCaaS revenues came to $94M, $74M of which were service revenues. Service revenues were up 16% on an organic basis.
    • Adjusted OIBDA rose to $51M from $37M, beating an expected $50.8M.
    • Revenue breakout: Business, $134.1M (up 21.3%); Consumer, $119.9M (down 12%).
    • For 2018, it's guiding to revenues of $1.03B-$1.045B (above consensus for $1.028B) — Vonage Business revenues of $590M-$605M, and consumer revenues of $435M-$440M — and adjusted OIBDA of at least $195M, above expectations for $189.8M. It's adopted a new revenue recognition standard as of Jan. 1.
    • Press release

  9. Vacation Week?

    Yes!  I am in Park City, Utah!

  10. Phil what do you think of CBI earnings?

  11. Park City/DC – Very nice, love that place.  Apparently I have to go to Whistler in April for a conference.  crying

    CBI/JMD – With multi-year projects, they are hard to judge quarter to quarter.   Revenues were $1.7Bn vs $1.775Bn expected and $6.7Bn for the year, which was down 22% and backlog also down about 20% at $11.4Bn vs $13Bn but that's still two year's worth of work under contract.  Profits were up and margins were up so they are doing less but more profitable work – as was intended in the restructuring. 

    Moreover, the company booked new awards worth $1,284.8 million in the quarter compared with $932.6 million in the prior-year quarter. New awards for 2017 came in at $5.8 billion, reflecting an increase of 17% year over year, thereby reflecting the company’s strong competitive position in refining and petrochemical markets. 

    Certainly nothing I'd bail over:

  12. Phil – "Reuters guys just interviewed me on Lending Club (LC) and it amazes me how seriously they take this company.  I don't know if they'll use what I said as I told them it was basically a $1.6Bn penny stock that lost $125M lending $575M in 2017 and it's really just a question of when they run out of suckers to fund them.  Didn't seem to be the angle they were going for in the article…"

    And you told them so, the last sentence had me LMAO.

  13. /NQ 6850, I’m short 

  14. Nat    here's my get well soon card for UBNT

    "Wishing you speedy recovery, but in the meantime, please stay the F away from me"   :)

  15. Maybe people are out enjoying the weather! It's going to be 75 today in NJ on February 21. But hey, no climate change! 

  16. Sales of US homes fall year over year by most in 3½ years

  17. Whistler/Phil – what's the conference about? Do you have info re; contents and dates? It'd be nice to see you up there. Thx.

  18. Reuters/Naybob – I disappoint a lot of interviewers but they keep calling.  I guess they call people until they get the quotes that fit their pre-dispositions.  

    /NQ/Jeff – Nice catch, good for a quick $300.

    Weather/StJ – Yeah, crazy warm over here.  

    Whistler/Airvine – It's not public.  PSW Investments has hooked up with TheMaven (MVEN), and we will be putting some PSW content on their platform and they are having a get-together with all the contributors but remind me and, when I know the dates, I'll let you know as I'll likely be up there the whole week (as travel is a bitch) with only a couple of days of actual conference. 

    Here's 1,545 on /TF, if we cross below it's a good short (with tight stops above).  Lined up with 25,050, 2,730 and 6,835.  All have to be under to play!

  19. Phil / CMG – thanks I'll hold for now…. was expecting it to top out at 330 but who knows

  20. Whistler/Phil – thx for the info. Living in Vancouver I spend time and also ski in Whistler. I'll remind you later in March and see if you have some time to say hello. Cheers

  21. Vancouver/Airvine – Most likely I'll fly out on Sat, stay in Vancouver and head to Whistler on Sunday.

    Webinar Time!  

  22. I am in whistler skiing, pretty cold

  23. Phil/SQQQ- I have 40 of Sep 18 15 calls and I closed half of the 19 30 calls which means I still have 20 calls left which I sold for $4. With the Fed saying they maintain the gradual rate hike. Do you think I should adjust my SQQQ hedge or you still leaning bearish towards the market?

  24. We took /TF shorts at 1,550 in the Webinar.  Doing well now.

    My reading of the Fed minutes was that it certainly was nothing to rally over, so we shorted the rally.  

    Whistler/Millard – Hopefully not in April.

    SQQQ/Dave – See above – I would not want to go into the weekend with less cover but there's the assumption that the bullish positions you have will make 3-4x what you would lose on the hedge if it were wiped out.  

  25. Whistler / Phil - we ski Whistler on spring break some years, the lines are short and the days can be sunny and beautiful with snow overnight. Perhaps you get lucky.

  26. /DX flying up.  Looks like you were right on minutes phil.

  27. Stocky – "Nat  here's my get well soon card for UBNT "Wishing you speedy recovery, but in the meantime, please stay the F away from me"   :)

    When I did those two pieces on UBNT at SA, Andrew Left was so pissed off that he PM'ed me with his direct number.  We talked at length, and the bottom line was, he had less than nothing, viz. his petzl in his hand.  

    Now the SEC serves subpeonas on UBNT, based on a petseleh?  I wish the FBI, CIA, NSA and DOJ would handle the mole in Chief or head Schmeckle in such a manner.  BTW – the Russian indictments are just the start. 

    Deep Throat tells me that the Deutsche Bank subpeona involves records for SIV's and conduits showing that the Liar in Chief has been funded by Russian sources for over two decades. TBD.

    “I have nothing to do with Russia—no deals, no loans, no nothing.”  – Famous last words, here is DT's abridged time line.  If the unabridged one were made public, someone would have been lynched in public and Pence would have resigned.  Out.

  28. Hi Phil. Thoughts on SHOP?  Advice on a new position?  Thanks.

  29. hi phil your webinar is still running

  30. FU /DX!!!!!!

  31. Phil-What do you think of IDCC? Seems they are losing patents and earnings are tomm. Not alot of interest in calls and puts.

  32. Wheeee!  That turned out nicely!  Quick $500 per contract on /TF shorts. 

    Whistler/MrM – Spring is the only time I like to go.  Too old to ski when it's cold out these days.  

    Minutes/Rayne – I don't understand how people can misread them so completely at first glance.  Happens so often it's barely worth noting though.

    Great timeline, Naybob.

    SHOP/Taihu – Revenues $673M, losses $40M, Market Cap $13Bn – what am I missing?  

    Webinar/Tommy – Thanks!  

    /DX/Jabob – Don't tell me you shorted the Dollar?  I've been banging the table for long Dollar for months…

    IDCC/Pirate – It's a nice niche company that makes good money but I don't know anything about their patent schedules or what else they have going on as it's no one I mess around with – mostly because they have short-term options that are thinly traded and tend to be very volatile. 

  33. Nice 200-point swing in the Dow and the VIX is down 10% for the day. 

  34. not short the dollar but long ABX/miners ;-(

  35. Thanks Phil-I thought the same thing. Very thinly traded options and zero interest. Hmmm.

  36. NBA fines Mark Cuban for telling the truth – He said the Mav's best option for the season was to tank it so they get a good draft pick.  That's a big no-no in the NBA (but totally true).  $600,000 is cheap PR for Cuban.

    Miners/Jabob – Their turn will come.  Better to let the Dollar get strong now so it can get weaker later and not be pressure on the miners in the summer.  

  37. Wow, this day turned ugly fast.  

    That's why we need to see CLOSES over our lines before we count them as taken (as well as whole days without going under) – keeps us from following false moves.  

    This will make tomorrow interesting.  So far, the STP is making money faster than the LTP can lose it…

  38. Of course, everyone is saying how horrible the market is now on cnbc… 

    didn't they say the opposite last week?

    I guess they want to scare people out of positions this week.

  39. Into treasuries this week.

  40. good point..

    thx Phil.

  41. Phil - 

    You still like /RB short here at 1.75?

  42. /RB / Rayne – This afternoon's API report was in-line for gas and a positive surprise for oil so unless the morning's report is different, gas could drift up this week, IMO.

  43. Got it. Thank you señor Mocha

  44. Donald Trump’s plot with Russia wasn’t collusion. It was treason.

  45. Ted Cruz calls for ethanol overhaul at Philly refinery rally

  46. Phil – Timely or What? - new sealed charges against Manafort and Gates, see Reuters and Guardian.

  47. Good morning!

    Kind of flat at the moment and not much happening, people still trying to digest the Fed but Bullard (non--voter) already tried to soften the blow this morning:

    The neutral rate is "still pretty low" and the Fed shouldn't hike interest rates based on the conception from the last two decades of the twentieth century, Bullard added. It is "not the world we're living in today," he stated. In the policymaker's words, the Phillips curve effects are so weak that unemployment at 4%, compared to the natural sustainable rate of 5%, adds only seven basis points to inflation. "A lot" would need to happen for four quarter-point hikes in the benchmark rate this year instead of three, he concluded.

    FOMC Minutes: Stronger growth lifts likelihood of further hikes

    If anything, the market had been underestimating the number of hikes:

    It's such a short week we're basically just back to the same "watch and wait" into the weekend we were at last week already. 

    Timely/Naybob – Where there's smoke?

    Image result for smoke animated gif

  48. Phil,

    The RUT and S&P are at strong bounce lines (on overnight ranges), if my calculation for weak and strong bounce lines hold up; so then where from here?

  49.  It doesn’t mean anything until we hold the strong bounce lines for a full day AFTER closing over the line – without failing it at all.  THEN it’s bullish until broken.