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Tariffic Tuesday – Market Shakes off Trade Wars as Kim Disarms

Trump wins!

North Korea said they are willing to hold talks with the US about giving up nuclear weapons and "normalizing" relations with Washington (whatever normal is these days).  The two Koreas also agreed to hold a summit meeting between Mr. Kim and President Moon Jae-in of South Korea on the countries’ border in late April, Mr. Moon’s office said in a statement.  

“The North Korean side clearly stated its willingness to denuclearize,” the statement said. “It made it clear that it would have no reason to keep nuclear weapons if the military threat to the North was eliminated and its security guaranteed.”

“The North expressed its willingness to hold a heartfelt dialogue with the United States on the issues of denuclearization and normalizing relations with the United States,” the statement said. “It made it clear that while dialogue is continuing, it will not attempt any strategic provocations, such as nuclear and ballistic missile tests.”

Between that news and the growing consensus that Trump's tariffs won't really affect much of the Global Trade (the EU retailiated with just $3.5Bn in sanctions against US goods) the markets are sharply higher yet again and, once again we'll check in on the S&P's bounce lines to answer the eternal question: "Are we there yet?"  Here's the line we were looking for a month ago:

And here's where we are today:

I would be more excited but last Monday we had a fake 80-point gain on low volume and yesterday we had an 80-point move on low volume – so it remains to be seen if it actually holds up for more than a day.  Also, last Monday was far more impressive than where we are now and we fell 140 (5%) points by Thursday – so let's not get carried away by getting halfway back to where we were, OK?  

There's not too much market-moving news, we had Powell's testimony last week and then the Tariff thing and now we have possible peaceful moves in North Korea but were we really discounting the market over North Korea in the first place?  Hard to say something is now a positive when it wasn't really a negative before.  We're out of earnings season and data has been mixed so what catalayst do we have to take the market back to it's highs (S&P 2,872 – still 5% higher than we are now)?

Where we are, at the moment, is halfway between where we peaked out and January and where we felll to in February.  A bit bullish if we stay above the strong bounce line – but certainly nothing worth throwing a party over.

The key is getting back over the 50 dma at 2,736 – otherwise we're likely consolidating between the 50 and 200 dma and that means this is the top, not the bottom, of the range to come.  It's a little scary to short this morning but if the Dow Futures (/YM) dip back below 25,000 – that's a good line to keep a tight stop on with a short below.  It should line up with 2,730 on /ES, 6,720 on /NQ and 1,555 on /TF (also fun to play short) so look for 2 to go below and then short the laggard – stopping out if any of them go back over.  

Again, nothing has fundamentally changed, this is most likely dip buyers running in again because they believe that 2,872 was the "right" price but that's like thinking 105.9 is the "right" body temperature, just because you spiked that high once.  Markets overshoot the mark all the time and then they settle down to a more realistic level – we don't believe 2,872 or even 2,640 is a realistic level – most likely it's the top of a channel that goes 10% lower to 2,420.  

We've been saying that for a month and Goldman Sachs disagrees with me, they say 2,449 is the right level for the S&P 500 using this chart and the following voodoo;

The index saw an initial selloff that was impulsive in nature (wave A). This tends to mean that there’s likely going to be another impulsive 5-wave decline to complete an ABC 5-3-5 count. From current levels, an eventual C wave could reach somewhere close to 2,449.

Having said that, it’s not uncommon for wave B to form complex structures (often triangles). Although ultimately bearish, there’s scope for some initial consolidation/ range-bound price action while still in the “body” of the February range.

The next significant retrace level below is 61.8% from Feb. 9th at 2,631. The 200-dma will likely be critical at 2,560. This particular moving average held very well at the prior low. Getting a break below it would therefore help to confirm that this is in fact wave C targeting at least ~2,449.

Reaching this 2,449 level would also mean retracing ~38.2% of the immediate advance from Feb. ‘16 (2,467). This would therefore be an ideal target from a classic wave count perspective; that is, if correcting the rally from Feb. ‘16.  

As has been discussed in previous updates, the market could also be starting a much bigger/more structurally corrective process, counter to a V wave sequence from the ‘09 lows. If that’s the case, there should be room to continue a lot further over time. At least 23.6% of the rally since ‘09 which is down at 2,352.

Bottom line, it’s worth considering the possibility of continuing further than 2,467-2,449. Doing so might imply that this is not an ABC but rather a 1-2-3 of 5 waves down, in a larger degree ABC count that could take months to fully manifest. While it is still far too early to make this call, the important thing to note is that the 2,467-2,449 area will likely be trend-defining.

I don't know about all that nonsense but our 5% Rule™ says 2,420 and the 5% Rule™ is not TA, it's just math!  On the whole though, it does have many of the same elements as the Fibonacci Retracements Goldman's technical team is hanging their hats on so we'll agree to disagree on the exact target but, if I were you, I'd take the main point seriously and make sure your positions are well-hedged (see last week's PSW Reports for trade ideas to that effect).  

Steve Burns did a good job of summing up what's wrong with the current market valuations – they are based on NOTHING!  We are valuing middleman companies like Amazon (AMZN), Uber, Facebook (FB), AirBnB and Netflix (NFLX) at tens of Billions of Dollars – even though they are essentially the same dot-com models that evaporated into dust 20 years ago (next year is the Crashiversary).  

And why not?  As Steve points out, we're buying them with currency that is backed by nothing to the point that we're willing to exchange that for currencies some kid made up in their basement last week (see the Madness of DogeCoin for a great example of that).  There are always "experts" willing to explain to you why "this time is different" and we can create wealth out of thin air and everyone will be a Billionaire and there will be no consequences – it all sounds great, until it doesn't.  

I don't like to be Cassandra or even Chicken Little but I turn 55 this month and I've seen it all before – several times and we're still 80% in CASH!!! and very well-hedged in our portfolios because we don't think this is the end of the selling – just an intermission.  

Be careful out there! 


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  1. All kinds of patterns forming – double tops, triangle thingies… A TA specialist delight. The conclusion will be that we go up or down from here.

  2. Lots of rich people in the Northeast:

    18 out of 100 in NJ alone!

  3. Good Morning.

  4. A study seems to confirm what I have been saying all along – luck plays a lot greater role in success than we give it credit for. Hard work is one thing, but in the face of bad luck, not very helpful:

    The importance of the hidden dimension of luck raises an intriguing question: Are the most successful people mostly just the luckiest people in our society? If this were even a little bit true, then this would have some significant implications for how we distribute limited resources, and for the potential for the rich and successful to actually benefit society (versus benefiting themselves by getting even more rich and successful).[...]

    As you can see, the highly successful person in green had a series of very lucky events in their life, whereas the least successful person in red (who was even more talented than the other person) had an unbearable number of unlucky events in their life. As the authors note, "even a great talent becomes useless against the fury of misfortune."


  5. Phil; if we finish this week above 2736 50 dma, would you become short term bullish with the potential to get back to the January high?  

  6. Phil, 

    Just want to hear your thoughts on this. 

    Given your/our bearish stance on the markets, would it make sense to get into mostly butterfly positions now?  This way we are hedged for the downside as well as upside.  I have seen how you convert butterflies into BCS or BPS which would be more likely this time as a trend emerges for the underlying.  The cost of the butterflies can be recovered in our usual way by selling near term premium. 

  7. Phil/MAR

    Good morning!

    Request: Next time you have to bang the table on any stock, could you please ‘increase the volume’ beforehand?

    Sometimes, it just takes a little more banging….????????

  8. Good morning and wheee!  Nice 100-point dip on /YM ($500/contract) to start the day off right.  

    Up or down/StJ – I agree.  

    Northeast/StJ – Yeah, I've got to move to Kentucky or Tennessee where I can feel really rich…  I live next to Bergen County, which has 7 of the top 100 spots. 

    Luck/StJ – I tell my kids you can't control luck but, if you work hard and keep putting yourself in the right place – eventually it will be the right time and THEN you will be "lucky".

    Week/Options – It will take more than that single data point but I sure won't be shorting if we hold it.

    Butterflies/Learner – We have a bad combination of a volatile market and a low VIX – not good for butterfly positions, which prefer steady stocks and lots of premium to sell.  In the Butterfly Portfolio, we just have OIH, which we already flipped to a bullish position and we're still down 2% overall so I'd rather wait – until next earnings if we have to.

    The buybacks continue! 

    • Preliminary results from Amgen's (AMGN -0.3%) modified Dutch auction tender offer for shares of its common stock showed ~54.3M shares were tendered at $192 per share.
    • The company expects to acquire ~52.1M shares at $192 for a total of ~$10B. The number of shares represents ~7.2% of its outstanding stock.

    MAR/Maya – Oh come on, you were at that show!  We talked about a bunch of hotel stocks I liked at the time. 

    Have I mentioned GE lately?  BANG BANG!!!

    GE Jan $13 calls are $2.80 and you can sell the $15 calls for $1.70 for net $1.10 on the $2 spread so you can buy 20 of those for $2,200 and sell 10 of the 2020 $13 puts for $1.65 ($1,650) and net into the $4,000 spread that's mostly in the money for $550 so $3,450 of upside is 627%, most of which you collect in 10 months.

  9. any thoughts on TGT earnings? 

  10. MU/Phil- I was wondering if you would be interested in this stock as I am in since $30+ and recently Goldman flipped to bullish citing improving Dram pricing. I know it's against your taste for value stock.

  11. Phil--any opinion on NUE, STLD, X, or any of the others with all the steel news and steel prices rising?

    too late or opportunity maybe?

  12. Luck / Phil – Your kids already had their fair share of luck at birth compared to 99% of the world population. You need a lot of hard work to simply catch up to that! Being born on the right side of the tracks is clearly a very important factor.

  13. DaveH / MU – for what it's worth… Apple indicated they see RAM pricing coming down second half of year…

  14. MU/ Phil- yes DRAM pricing softening was highlighted on Micron last quarter but the management said the strong demand will ease the price softening. 

  15. TGT/CRS – We used to have them last year from the $50s but $75+ was a bit much so we didn't go back in.  Of course they "disappointed" unrealistic expectations.  They spent a lot of money on on-line to keep up and are "only" making $5.25/share.  How that causes a sell-off in an $80 stock (p/e 15.25) is beyond me – where are these idiots running to?  NFLX at 200x earnings?  

    MU/Dave – Another one I used to love at $10 just 2 years ago but very hard to get excited at $54, though they've certainly grown to keep up with it, dropping $5Bn to the bottom line last year on a $62Bn market cap makes them still very reasonable – especially in this space.  So yes, I do like them – even at $54 but I'd still go conservative:

    • Sell 10 MU 2020 $40 puts for $5.25 ($5,250) 
    • Buy 20 MU 2020 $35 calls for $24.50 ($49,000) 
    • Sell 20 MU 2020 $50 calls for $16.50 ($33,000) 

    That's net $10,750 on the $30,000 spread that's $30,000 in the money so the upside is $19,250 and you can sell 4 (20%) of the April $44 calls for $3.40 ($1,360) while you wait as that's 45 days out of 682 you have to sell so you can work that $10,750 down to zero while you wait for your $40,000.

    Steel/Jabob – MT is still my favorite.  Plenty of places for them to sell and ridiculous cheap at $33 (33.4Bn) with $5Bn in earnings last year.  They are down 15% on tariff news while the US companies are up 15% because they have to be protected from those mean foreigners.  Who do you bet gets drafted for the football team, the bully or the wimp who had to be saved by his mommy?  

    • Sell 10 MT 2020 $30 puts for $4.25 ($4,250) 
    • Buy 20 2020 $30 calls for $8.60 ($17,200) 
    • Sell 20 2020 $37 calls for $5.20 ($10,400) 

    That's net $2,550 on the $14,000 spread and that one we can add to the LTP as we have no steel stocks.  

    Luck/StJ – Well true but they can't help what they already have – they can only, hopefully appreciate it.  Maddie's not as smart as Jackie but she works her ass off to be on the same Honor Roll while still doing the art she loves – that makes me very proud of her.  I'm actually more worried about Jackie's work ethic as she breezes through school with minimal effort – but so did I and I turned out OK.

    DRAM pricing/Dave, Batman – That comes and goes and that's why I don't shoot for the moon with them but, over time, it's a company you can accumulate.  Also, AI, AR, VR, Robots, Toys, Vacuums, Self-driving cars, lawnmowers, etc means you shouldn't think of a computer as just a computer but pretty much everything you see is getting chipped over the next couple of decades.  I've got a pool-cleaning robot that spends all summer driving around my pool and keeping it spotless…

  16. Here's why we're long OIH! 

    • The global oil and gas industry will need to invest at least $20T over the next 25 years to meet expected growth in demand and compensate for the natural decline in developed fields, Saudi Aramco CEO Amin Nasser tells the CERAWeek conference.
    • The necessary future investments will come only if investors are convinced "that oil is here for the foreseeable future… that is why we must push back on the idea that the world can do without proven and reliable sources," Nasser says.
    • “Even conservative estimates” suggest the need for ~20M barrels of new capacity in the next five years to meet demand, regardless of the growth of electric vehicles, Nasser also says.
    • He briefly mentioned plans for Saudi Aramco to go public, saying that the IPO plan is “proceeding very well,” but that the Saudi government ultimately would have to decide when and where it will be listed.
    • Porsche (OTCPK:VLKAY) introduced a new crossover concept variant called the Mission E Cross Turismo in a surprise reveal at the Geneva Motor Show.
    • The Cross Turismo has a range in excess of 310 miles per charge and has been tested out at a 0-60 mph time of less than 3.5 seconds. The automaker says the car can be charged at a rate of 250 miles driving range per 15 minutes.
    • Though the Mission E Cross Turismo in Geneva is just a concept model, comparisons to the Tesla (NASDAQ:TSLA) Model X are already being made. On that point, Crain's Automotive News' Dave Guilford says it’s not clear if the new upscale choices will "hurt Tesla or simply expand the segment… it's probably a little bit of both."
    • Morgan Stanley says investors want more clarity after Gogo’s (NASDAQ:GOGO) CEO announcement yesterday.
    • Analyst Landon Park says new CEO Oakleigh Thorne’s long association with Gogo could mean the change won’t cause any radical changes in strategy. 
    • Park says the company faces elevated leverage and free cash burn as American Airlines to move half its fleet to competitor Viasat, which could also win a new order from Aeromexico. 
    • Gogo’s shift to an “airline directed model” could create some average revenue per aircraft dilution as airlines lower Wi-Fi session prices. 
    • Firm maintains an Underweight rating and $7 price target, a 25% downside to yesterday’s close. 
    • Source: Bloomberg First Word.    
    • Gogo shares are down 6.5% to $8.78.    
    • Previously: Gogo CEO steps down (March 5)
    • Chicago Bridge (CBI +0.3%) has been awarded a contract valued at approximately $70M by JG Summit Petrochemical Corp. for the Stage 1 Expansion project in Batangas City, Philippines.
    • The scope of work includes the engineering, fabrication and construction of ten traditional field erected storage tanks, one double-wall liquefied petroleum gas storage tank and three spheres.
    Image result for trump revolving door
    • The president is telling his people that the White House's chief economic advisor Gary Cohn will quit if proposed tariffs come to pass, according to Bloomberg.
    • Not going quietly, Cohn has been making use of his rolodex – urging heads of affected companies to try and sway President Trump.
    • "People will always come & go, and I want strong dialogue before making a final decision," tweeted the president this morning. "I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!"
    • It's looking like one of the largest corporate-debt offerings ever as CVS Health kicks off fundraising for its $67.5B acquisition of Aetna.
    • While yields are still relatively low, it's been a rough year for the bond market, with not just benchmark Treasury rates on the rise, but corporate spreads moving higher as well (at least in part due to anticipation of this massive deal).
    • CVS is selling a mixture of fixed and floating-rate paper, and the longest portion – 30-year bonds – is expected to yield in the area 215 basis points over comparable Treasurys.

  17. Phil

    What’s our trade on OIH


  18. 24,725 on /YM – WOW!!!  Congrats to the shorts on that one!  

    I'm taking that ($1,375) and running as the other indexes look like they are bouncing so probably /YM does too.  In fact, 24,700 is worth a poke as a long with tight stops below.

  19. OIH/QC – That's the entire Butterfly Portfolio:

    Short Put 2018 16-MAR 29.00 PUT [OIH @ $24.44 $0.01] -10 1/24/2018 (10) $-1,000 $1.00 $3.58 n/a     $4.58 $-0.01 $-3,575 -357.5% $-4,575
    Short Put 2020 17-JAN 23.00 PUT [OIH @ $24.44 $0.01] -10 2/20/2018 (682) $-3,050 $3.05 $-0.24     $2.81 - $240 7.9% $-2,810
    Long Call 2020 17-JAN 20.00 CALL [OIH @ $24.44 $0.01] 15 2/20/2018 (682) $9,675 $6.45 $0.30     $6.75 $0.44 $450 4.7% $10,125

    Still good for a new trade.  Ideally, OIH comes back over $25 and we can sell 5 short calls to match the rolled short puts we'll be carrying.

  20. Robert Mueller’s Trump-Russia probe is now officially a murder investigation

  21. something just knock the market up?

  22. BKNG (formerly PCLN) stock hit all time high.  

     I covered my short puts way too soon.

    Winston, are you still in BKNG ?

  23. 24,850 already – what a crazy market!  And not hard to play either…

    Something/Jabob – The sellers got tired, the bots took over.  

    • Alcoa (AA +2.4%) and other U.S. aluminum producers tell Pres. Trump in a letter that they are "deeply concerned" about the effect global tariffs would have on their industry, including jobs.
    • The tariffs would "do little to address the fundamental problem of massive aluminum overcapacity in China, while impacting supply chains with vital trading partners who play by the rules," says the letter from the Aluminum Association.
    • The group urges Trump to look at alternatives to a 10% tariff on aluminum imports to the U.S., including a tariff specifically targeted to China's aluminum industry and an exemption for Canadian, European and other foreign producers.
    • Uber’s (Private:UBER) fleet of self-driving trucks can now deliver shipments in Arizona.
    • The trucks drive on the highway and human drivers take over for the final miles of the trip, which is called a transfer hub model.
    • Uber says this model will create more short-term jobs since the trucks aren’t anywhere near advanced enough to dock alone yet. 
    • Shippers using the Uber Freight app can book a trucker in a traditional truck, which drives to a hub to meet up with the driver-equipped self-driving truck.  
    • Previously: The Information: Uber considers Waymo collab after settlement (March 5)
    • U.K. retailer Debenhams Plc (OTC:DBHSFOTCPK:DBHSY) could rent out excess space in its London flagship store to WeWork (Private:VWORK), according to Bloomberg sources.
    • Debenhams wants to rent out parts of its 240 stores, which have become too large due to lagging brick-and-mortar retail sales. 
    • WeWork already stands as the top private-sector user of office space in London, according to CoStar Group. 
    • In other WeWork news, the company acquires online marking services company Conductor for undisclosed terms. 
    • Conductor uses online search data to help gear content based on user search demand. 

    I guess possibly the fact that even AA doesn't support tariffs may put a nail in the coffin for Trump's plans.  

    That We Work is a great company.  The spaces are great and they make a fortune with their model – a nice win-win.

  24. Picked the wrong day to short NFLX (yesterday)! 

  25. This could be great for Google – whoever cracks quantum computing first will lead the world:

    Google's been vocal about its efforts in quantum computing for years — back in 2015 it proudly announced a breakthrough that showed huge potential for quantum algorithms, for example — but every other major tech company has a similar agenda. IBM is working on a general purpose quantum computer for business use, while Microsoft is also exploring the area. The race is certainly on for quantum supremacy, but as the Bristlecone research team writes, it's "cautiously optimistic" that it's going to win it.

  26. Aramco CEO coming up on CNBC.  

    I had a great idea:  Israel should buy up the Aramco IPO and take control of the company.  That would then give them total control of the money that goes to the Saudi Royal family!  It would be a bloodless coup…

  27. Albo / PCLN-BKNG (aka Momentum Gorilla) - took my money and ran. It's a great stock (and a great company), but managing the volatility on such a high price stock brings its own challenges. Selling short term covers on the call side or put sales on the long side gets too close to gambling. The premiums are always juicy which means its difficult to rein in the temptation. 

    My current price level parameters for stocks to trade exclude sub $5 and higher than $200 stock. The former tend to fall through the floor, the latter reach for the sky!

  28. Phil—I think that is by far your best idea of the year! Maybe decade! ;-)

  29. Now here's something random that makes me feel good as I approach my 55th – I went out with all 3 of these girls in HS and 2 into college as well (one of them just posted on FB):

    Image may contain: 3 people, people smiling, people standing

  30. Now you can finally give one:

    Related image

  31. NFLX/Phil- I have a diagonal on NFLX, Short 4 March 18 300 calls for $1.34 and long 4 June 18 195 calls for $61.9. What would you recon to do wait till almost expiry to close out the shorts or roll the short calls to a higher strike price?

  32. NFLX/Dave – You sold calls for $1.34?   That's no premium at all against a $300 stock.    March $300s are now $25.50 and the June $195s are $131 so you're fine but I'd cash the $195s and buy 4 2020 $250 ($120)/350 ($73) bull call spreads for $47 so you pocket $84 and you have the 4 short calls covered by the 4 $100 spreads that are in the money.  At the moment, you can roll the short March calls to the June $340s ($24.25) and those to the Jan $400s ($28) by which time you'd be $100 in the money on your longs and still with the $84 in pocket.

    /ES stuck right at the 2,728 (strong bounce) line – not good if it can't stay over for the close.  

    Remember, we predicted this line a month ago!  

  33. TGT – I never exited the spread we has previously, selling 5 of the $52.5 puts, buying 10 $50/$65 BCS'

    So im inclined to just leave the spread to do its thing. Just wanted your take on earning, thanks! 

  34. NFLX/Phil- was'nt thinking nflx will keep on chugging forward :(   I got a little confuse on the idea, so I would roll my short 300 calls to June $340s and then immediately go to jan $400s? Do I still cash in the June 195 into the 2020 call spread?

  35. Given world peace as broken out due to Kim Jung Un, does it justify EWY 3.5% move as sustaining?

  36. energy storage is going to be big. Its a huge market. I cannot wait to tackle this problem. We're working internally like gangbusters — info soon!

  37. TGT/CRS – Oh long-term they should be fine.  

    NFLX/Dave – No, I'm just pointing out POTENTIAL rolls if NFLX stays high over the next year.  You can roll them up $100 per year – that's a lot of cushion.  The idea is to A) cash in the $195 calls while they are so high 2) buy a reasonable spread to cover the short March calls C) roll the March calls IF YOU HAVE TO to higher-strike, longer-month calls until they finally expire worthless.  Then, D) whatever you have left on the long spread is a bonus to the $84 you already took off the table. 

    EWY/That – Well they do have a constant overhang of NoKo at the boarder and what if they unify?  That worked out well for Germany.

    Storage/BDC – Definitely.  Since wind and solar are likely to be 1 & 2 until we get fusion, both need a lot of battery back-up.

  38. CTL

    ~~ CenturyLink CEO Glen F. Post, III to retire effective the day of CenturyLink's 2018 Annual Shareholder Meeting in May. 

    ~~President and Chief Operating Officer Jeff Storey will become CenturyLink's CEO and President effective at the time of Post's retirement.

    I view this as very positive.  LVLT's executives will be now running the show with Storey as CEO, and Sunit Patel as CFO.

  39. Busy going over the portfolios, gotta do updates next week already.

    In the STP, let's buy back 40 SQQQ Jan $30 calls for $1.80 whenever we can.  That will leave us with 80 long Sept $15s 1/2 covered with Sept $20s.  

    STP doing well at $140,000 (we did timely cash-outs on last week's dip) and LTP hanging tough at $547,000 for $687,000 (14.5%).  On 2/16 it was $525,741 + $117,429 so huge gains in past 3 weeks.

    Trump still sticking with the tariffs in press conference. 


  40. S&P close exactly on the strong bounce line?

  41. That's what happens in a Bot-driven market.  

    That was not a constructive day overall.

  42. NFLX/Phil, i have sold naked 6x Apr 250 calls. Was thinking of rolling up $40 in strike to Sept 290 for cost of $15. I have 3 covered by Jan 2020 300/400 bull call covers. Is it worth doing the short call roll? Thanks

  43. SQQQ/Phil- Sorry new here, what's the difference between STP and OOP? I assume they are the same.

  44. Gary Cohn is out

    Gary Cohn to Resign as Trump Economic Adviser Amid Trade Dispute

  45. The AMZN bots get their marching order from FB given BBRY?

  46. should we expect it to be a crazy day tomorrow?

  47. Futures off big after Cohn news. 

  48. LOL – Now that's a dip!   Dow down 300.

    And guess what, Jabob – Monday is officially erased and, therefore – MEANINGLESS!  

    Why does the Nikkei care if Gary Cohen resigns?

    STP/Dave – The STP is the hedged half of the STP/LTP combo portfolio.   The LTP is $500K, STP is $100K and has the hedges that protect the LTP and is also where we make short-term, speculative plays.  

    The OOP is a self-contained, self-hedged, $100,000 portfolio with a mixture of long-term and short-term positions.  Not even remotely similar to the STP.

    API mixed but not bullish:

    Crude: +5.661 mb Gasoline: -4.536 mb Distillates: +1.487 mb Cushing: -0.790 mb

    A little hope for /RB but not the report that gets them higher than $1.93 so that's a short and /CL $62.50 is still a good short.

    Honey badger don't care, /NGV8 at $2.86!

  49. Does Cramer pre-tape?  He seems totally oblivious that the market is down 350 while he's saying how strong the rally is….

  50. At first I thought, man you are overhedged maybe take a look at that tomorrow.  Now it’s like, man I hope I have enough hedges!

  51. That's why you just have to think of them as insurance policies that will definitely lose the money you put into them – UNLESS something terrible happens.  

    People like to not worry about stuff but I saw it in 2000, 2001 (9/11), 2008 and we had 20% corrections in 2010 and 2011 so it's really not as rare as people think and all bullish portfolios simply get trashed in a correction like that so I consider it my duty to prevent that from happening to my guys.

    Unfortunately, my efforts are only appreciated once or twice each decade…

  52. Taking a poke long on /YM at 24,520 with a DD at 24,505 and a stop below 24,495  – just in case the knee-jerk reaction reverses.

  53. Lined up with 2,695, 6,825 and 1,545.

  54. So clueless:

    The new Fake News narrative is that there is CHAOS in the White House. Wrong! People will always come & go, and I want strong dialogue before making a final decision. I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy!

  55. Well, that didn't hold up.  Down 400 now.

  56. DowDuPont says steel tariff may force new projects away from the U.S.

    • DowDuPont (NYSE:DWDP) says it is considering Canada or Argentina instead of the U.S. Gulf Coast for its next major investment, as Pres. Trump’s proposed steel tariffs make domestic construction pricier.
    • The tariffs would add hundreds of million of dollars to DWDP’s next wave of petrochemical expansion, COO Jim Fitterling tells the CERAWeek energy conference in Houston.
    • DWDP last year completed $6B in construction of new factories along the Texas Gulf Coast which Fitterling says contained ~$1.2B worth of steel; Trump’s proposed 25% tariff on steel imports would have added ~$300M in costs to the projects.
    • Nearly half of all U.S. manufacturing investment for the past two years has been for chemical plants, largely because shale gas provides a cost advantage over other areas of the world, Fitterling says, adding that a U.S. trade deficit for chemicals has turned into a surplus as a result.
    • Pioneer Natural Resources (NYSE:PXD) CEO says Pres. Trump's proposed tariffs on imported steel and aluminum would hurt his company’s profits.
    • Dove’s remarks echoed several other energy executives who have told the CERAWeek energy conference this week that they faced higher costs from tariffs, and that certain types of metal needed for pipeline and refining expansions are not made by U.S. companies.
    • Sara Ortwein, president of Exxon Mobil’s (NYSE:XOM) XTO Energy shale business, also said the oil and gas industry “is really the engine behind the economic growth in the U.S. Clearly anything that limits that is not something that we’re looking for.”
    • S&P futures -0.7% after-hours in reaction to a New York Times report that Pres. Trump's top economic advisor Gary Cohn will resign.
    • White House officials say there is no single factor behind Cohn's departure but the decision to leave came after he seemed poised to lose an internal struggle over Trump's proposed tariffs on steel and aluminum imports.
    • Cohn is expected to leave in the coming weeks, and would join a string of recent departures by senior White House officials.
    • Update: “It has been an honor to serve my country” Cohn says in part, in a statement released by the White House. “I am grateful to the president for giving me this opportunity and wish him and the administration great success in the future.”
    • Frontier Communications (NYSE:FTR) has launched cash tender offers for up to $1.6B in debt.
    • The series it's pursuing (in order of acceptance priority) are 8.875% senior notes due 2020; 6.25% senior notes due 2021; 9.25% senior notes due 2021; 8.5% senior notes due 2020; 8.75% senior notes due 2022; 10.5% senior notes due 2022; and 7.125% senior notes due 2023.
    • The offers expire April 2; tendered notes can be withdrawn up until the early tender time/withdrawal deadline of 5 p.m. on March 19.

  57. You would think FTR would be much higher. Usually, companies aren't tendering unless they are in better shape, right?

  58. 2018 is looking like the opposite of 2017 with volatility. Like stjean said the other day. This could be an interesting year with Trump. 

    Is Cohn really that important in your opinion? 

  59. Test

  60. Strange, I couldn’t post from my IPad and the comment box looks messed up.

    FTR/Jabob – I think, to some extent, since that’s why they just suspended the dividend, there’s no surprise here.

    As to Cohn, I think the panic is over losing the adult in the room. Now it’s like the 3 Stooges came over to do your plumbing but Moe quit. The whole job was going to be a mess but at least, with Moe, there was a chance that it would get done. Now there is no chance and things are likely to get much worse.

    Worst of all, word is that Cohn quit because Trump demanded he support the tariffs and that flies in the face of Trump’s claims that he listens to his advisers and respects dissenting opinions.

    Just another step towards Dictatorship.

  61. Cohn

    They are looking at some really marginal people to replace Cohn

    The National Economic Council job post doesn’t require Senate confirmation. An administration official said those being considered to succeed Mr. Cohn include Andy Puzder, a fast-food executive who withdrew his labor secretary nomination after domestic-abuse allegations from an ex-wife surfaced. Mr. Puzder has denied the claims.

    The official said others who could be considered include CNBC commentator and former Trump campaign adviser Lawrence Kudlow; Council of Economic Advisers Chairman Kevin Hassett ; and Mr. Navarro.

  62. Asian stocks decline as investors watch US tariff moves

  63. Trump administration sues California over sanctuary laws

  64. Online Reviews Are Biased. Here’s How to Fix Them

  65. Zinke says Interior should be a partner with oil companies

  66. Maya;   Agree 110% with the bang!..bang!  petition, I feel the same …When did Phil mention this?

    Phil, perhaps you can create a new BANG!  recommendation 

  67. It’s called “Top Trades” –  there’s a whole section on the top of the site and last year we were 82% successful. 

  68. Now the comment box is fixed but I've lost formatting in the main post section.

    I'm going to try writing it here and then copying it to the post – I figure the formatting must be the same(ish).

    Image result for 3 stooges plumbers animated gifOvernight, we lost the "adult in the room", Gary "Moe" Cohn, as he quit the White House rather than pretend he was in favor of the trade tariffs.  I'm sure Cohns everywhere are breathing a sigh of relief that their names won't go down in history next to Smoots and Hawleys in the annals of poor economic decisions.  Speaking of anals – Stormy Daniels is suing Trump – just had to mention that!  Meanwhile, in referring to the 1930 Tariff Act, I noticed the full name of the Act was:

    "An Act To provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes."

    I guess the long name for the new Tariff Act should be the "We never f'ing learn Act of 2018, where the American people fall for the same dog-whistle BS over and over again for the purposes of distracting them from a massive criminal investigation of pretty much the entire White House."  

    Image result for 3 stooges plumbers animated gifAs I said to our Members this morning: "As to Cohn, I think the panic is over losing the adult in the room. Now it’s like the 3 Stooges came over to do your plumbing but Moe quit. The whole job was going to be a mess but at least, with Moe, there was a chance that it would get done. Now there is no chance and things are likely to get much worse. "  That's why the market are freaking out this morning, with the Dow down over 300 points. 

    Overall, this is the kind of panic we see when a company loses its CEO – people sell into the uncertainty.  Trump could fix this by appointing someone like Warren Buffett or Janet Yellen to be his Senior Economic Advisor but he'll more likely choose a spineless toady like Larry Kudlow or the current head of the Council of Advisers, Kevin Hassett, whose primary claim to fame is publishing "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market" in 1999.

    Speaking of the Dow, you're welcome for our fabulous idea to short the Dow (/YM) Futures at 25,000 in yesterday morning's Report – the Dow hit 24,400 overnight and each short contract gained $3,000 for the day but we flipped long in our Live Member Chat Room overnight at 24,500 – a bit early but now those are paying off as the Dow moves back to 24,600 – up $500 per contract on the bullish play already.  


  69. Well the copying didn't work, hopefully they'll be able to fix it.  

  70. The key to our bearish call yesterday was exactly what we charted out in the morning (using the same charts we used all last month) with the S&P (/ES) failing our 2,728 line yet again and having that line act as a firm upside barrier all day long gave us the confidence to stay short into the close:

    Oddly enough, the Russell (/RTY) is already back to it's shorting line at 1,555 as the Dow crosses over 24,600 (which is now the stop for our longs) but we're not going to short the Russell just because it recovered first.  It only fell to 1,540 for just $750 per contract gains by 11am but then took off so it's a "no play" now and mostly we're just watching to see where things settle down today before making new bets.