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Technical Tuesday – Testing the 200 DMA’s

chartWheee – what fun! 

Up 500, down 500 – what volatility?  Yesterday the Volatility Index (VIX) did hit 25 and that's great for us as we get good money for the options we like to sell.  We're generally just amused when the market collapses as we have great hedges, like the one we posted in Thursday morning's PSW Report:

As an additional hedge, at the moment, I like for the STP:

  • Sell 4 WHR 2020 $125 puts for $12.50 ($5,000)
  • Buy 50 SQQQ May $16 calls for $3.90 ($19,500) 
  • Sell 50 SQQQ May $20 calls for $2.20 ($11,000) 

That's net $3,500 on the $20,000 spread that's almost all in the money to start and the only way to lose is if the Nas goes up quite a bit from here which, with all these headwinds, doesn't seem too likely.

The WHR short puts are still $12.50 but the $1.70 spread hit $3 for a gain of $1.30 x 5,000 units for $6,500 (185%) gained in 2 trading days – you're welcome!  Remember, I can only tell you what is likely to happen and how to make money trading it – the rest is up to you.

In our Live Member Chat Room we already cashed in the long calls ($4.50) and left the short calls which are covered by another hedge we already had.  That pulled $22,500 off the table – more than the maximum we expected to make on the trade but now we have to deal with the short calls so we're hoping for a bounce in the Nasdaq as we test the 200-day moving averages.  

  • The Dow finished the day at 23,644 but fell below the 200 dma at 23,423 during the day and, if we call that a fall from the 50-day moving average at 25,300, that's down 1,900 points and we'll call it 2,000 and look for 400-points just to make a weak bounce now, at 23,800 and 24,200 would be the minimum we'd need to see to believe the Dow may be making a proper move back up.
  • The S&P fell harder than the Dow, finishing the day below the 200 dma of 2,589 at 2,581 despite bounce from 2,552 into the close.  Falling from 2,800 was 212 points so call those bounce lines 42 points to 2,640, which just so happens to be (Ta Da!) the same line we've been tracking for months on the S&P.  In fact, here's the chart that's been predicting the future(s) for you all along:

Remember, the 5% Rule™ isn't TA – it's just math!  We use a chart to illustrate the equations but we could care less about the squiggly lines other than to check our predictions.  In this case, the updated S&P chart was from March 27th (last Tuesday), where I said:

As I said above, I'm more inclined to go short here because there is NOTHING that I'm seeing in the news or the data that justifies us moving to the more positive range (over the 20% line) which means we're more likely still on track to fall into the 10-20% range, where 2,640 is the top and 2,420 is the bottom.  That's the range we predicted we'd end the year in and this year is just getting started but it seems to me there's still more money in shorts than in longs at this level.  

That was in the context of the Futures ramping back to 2,680 that day and that 80-point drop back to 2,600 paid a very nice $4,000 per contract the next day and, in the Live Trading Webinar, we flipped to Silver Futures (/SI) longs that we cashed in yesterday for $1,850 per contract gains.  Trading is fun!  

  • The Nasdaq is the only index not to fail it's 200 dma, yet, and we'll watch it closely but, just because an index doesn't fall to your goal, doesn't mean you can't calculate it's bounce lines.  From 7,170 to the 200 dma at 6,270 is a 900-point drop and 20% of 900 is 180 but we'll call it 200 and call the bottom 6,300 (since we didn't hit it yet) and that means we can look for 6,500 to be the weak bounce – which makes sense after yesterday's intra-day low of 6,326.   Another 200 gives us the strong bounce at 6,500 and that's what we'll look for today and tomorow.
  • The NYSE fell from exactly the 50 dma at I'm going to call it 13,000 to the 200 dma at 12,300 and finished the day at 12,216 so the NYSE MUST get back over 12,300 to take any of today's bounces seriously.  The 700-point drop calls for 150-point bounces and that's going to be 12,450 for the weak bounce and 12,600 for the strong and we'll need some good news to pull that off.
  • Russell tested the 200 dma at 1,488 in a fall all the way from 1,600 so we'll call it 1,500 and that's 1,00 with 20-point bounces on /TF to 1,520 and 1,540 though 1,512 is the 5% line – so that will be very significant today.

I don't think the simple absence of more negative news will be enough to turn the markets back up, we'll need some positive noises from data and earnings and today we have Auto Sales, which I don't see as a boost and tomorrow we'll see Factory Orders and ISM – not big market movers either.  Thursday we get Trade Balance and that's it so it's all up to the Non-Farm Payrolls on Friday to get us over the hump. 


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  1. Death crosses imminent! Historically, not that meaningful for the long term, but psychologically for the short term.

    But hey, Trump said yesterday that we have the best economy ever right now, so no fear whatsoever!

  2. So we bail out the car makers and they turn around and help kick us in the ass:

    The current rules were designed to limit carbon emissions and pollution from transportation, which has overtaken the power sector to become America’s biggest climate problem and remains the largest source of air pollution. The standards would avert 570 million metric tons of greenhouse gas emissions by 2030, equivalent to stopping 140 typical coal-fired power plants for a year, the Union of Concerned Scientists has estimated.

    They’d save consumers money too. According to Margo Oge, former head of the EPA’s Office of Transportation and Air Quality, the fuel savings alone through 2025 would add up to $1.7 trillion.

    That's a lot of money being stolen from our pockets!

  3. No one to blame but Trump for DACA:

    This is the guy who claims to be the greatest dealmaker ever in history. He killed DACA; he refused every possible deal to reinstate it; he changed his demands almost daily; and he demonstrated approximately zero influence over Congress. So now he’s red-faced with anger and desperately trying to deflect blame for something that everyone knows he’s responsible for. What a putz.

  4. Interesting article on the theory of efficient markets:

    In other words, even markets with some rational participants can behave irrationally. Speculation can move prices around for irrational reasons, and rational traders often either can’t or won’t bother to correct them. However, it’s worth noting that the effect is less pronounced in 2012-2016 than in 2007-2011, suggesting the possibility that this particular market inefficiency may have been a temporary phenomenon.

    Efficient markets theory never really fits the facts, but it never quite dies, either.

  5. SQQQ/Phil- thanks for further explaining on the hedge.. I did jumped the gun and close the May long calls before closing bell and my position is exactly on how you further explain this morning. I'm glad I am learning along the way and able to act before closing bell last night rather than waiting till today. Hopefully one day, I will too able to make right decisions on adjusting the hedges.

  6. All is good today it seems… Retaking 200 DMA, Spotify IPO on deck.. Amazon and Nvidia are "excellent buying opportunity", we are told, and history shows that it "pays buying the market on a dip ahead of earnings"..

    Phil, here is my position on HMNY as of today:

    Short 10 Jan 2020 $5.00 PUTS @ $3.00

    LONG 15 Jan 2020 $2.50 CALLS @ $3.00

    Short 15 Jan 2020 $7.50 CALLS @ $1.15

    I am planing on doubling down at some point in the near future. starting with the long calls, short $5.00 PUTS and than waiting for better times to add the short $ 7.50 calls Would that be the right thing to do ?

  7. Took small initial position in SGYP.  Bought stock at $1.80.  Sold 45 Jan 2019 2 calls for .50 and sold 30 of the Oct 1.5 puts for .33.

  8. Good morning!

    Big Chart/StJ – Thanks for having that up early today, timed out well for the post.

    Fuel/StJ – Don't forget that the oil and gasoline we don't use also pushes the price down for all the oil and gas that is used so it's a triple hit on the planet and consumers.  Completely insane policy shift!

    Rational markets/StJ – Well, as the headlines say, you can't have a "rational" market running smoothly if the people participating in it don't act rationally.  However, if you take the irrational into account – I find the rest makes pretty good sense.

    Oops, so much for the rally already.  RIP recovery, 6:15 – 9:45 am….

    Hedges/Dave – Good job.  It's like learning how to surf – it's all about the minor adjustments to keep your overall balance along the way.  Once you get good at that, even a big wave doesn't phase you but it does take time and practice until those adjustments become reflexive.

    HMNY/State – Down and down they go!   No news and a 10% drop today.  As they look pretty shakey, I'd consider diversifying by taking the now $3.70 $5 puts ($1,850) and rolling them to IMAX or CNK puts of equal value so your fate isn't entirely tied to HMNY on the trade.  Since the net of the trade was about $1,000 – that just leaves you with that to concentrate on and the 2020 $2.50s are now $1.15 and you paid net $1.85 so if you DD here, that's a $1.50 avg – not really worth it, is it?   If anything, I'd buy back the $7.50 calls for 0.50 (not more) to lock in the 0.65 there and THEN, if the $2.50s go below $1, I'd dd on those and sell 1/2 the $5s (now 0.75) to cover at least 1/2 the cost of the new set.  That would put you in 30 of the 2020 $2.50 puts, 1/2 covered with the $5 puts for about $1,500 more so $2,500 means your break-even would be $3.50ish.  

    SGYP/Albo – We had some luck with them but that was Pharmboy's call, not mine.  I wouldn't know if they are currently a good deal but a hell of a fall in the past year.

    On the whole, I'm not into deploying anything at the moment – I think we get another big leg down.  Still waiting for 2,400 to see if that holds, on the whole.

  9. YM/Phil- worth poking shorts at 2400 with tight stops?

  10. A little confused on the SQQQ hedge question. If you are expecting further declines then cashing in the long calls and leaving the shorts open seems counter intuitive? Explain?

  11. I chopped in and out of JPM.  Tempted to get into TWTR.  

  12. Recovering again… Could be an interesting day!

  13. /YM/Dave – I guess you mean 24,000 – we'll have to see but, at the moment, we're getting an enthusiastic move back up on (so far) 1/4 of yesterday's down volume:

    Date Open High Low Close* Adj Close** Volume
    Apr 03, 2018 258.87 259.77 256.84 259.52 259.52 34,805,312
    Apr 02, 2018 262.55 263.13 254.67 257.47 257.47 180,477,400
    Mar 29, 2018 261.12 265.26 259.84 263.15 263.15 111,601,600
    Mar 28, 2018 260.75 262.64 258.58 259.83 259.83 146,452,300
    Mar 27, 2018 266.17 266.77 258.84 260.60 260.60 129,941,400
    Mar 26, 2018 262.13 265.43 259.41 265.11 265.11 141,956,100

    As I said though, no new bad news so of course we expect at least weak bounces.

    SQQQ/Pstas – I expect snow next winter but I'm not going to put my skis on and hike up the mountain now, am I?  The market goes up and down (see this morning for an example of up, see yesterday for an example of down) and there's a way to take advantage of that by adding and removing hedges.  The trick is in keeping your position such that you don't get burned if the market drops hard instead of bouncing.

    Chain store sales top 4% pace

    Helios and Matheson drops after delaying 10-K filing

    • Helios and Matheson Analytics (HMNY -7.9%) trades lower after the company discloses that its 10K for FY17 will be filed late.
    • "The Company had increases in revenue and increases in costs of sales, and as mentioned above, the Company had a significant increase in the cost of financing activities. The net loss is expected to be approximately $153 million, of which approximately $101 million is attributable primarily to derivative expenses and other non-cash financing costs and the balance is attributable to loss from operations."
    • SEC Form NT 10-K

    P&G in talks with Pfizer over consumer unit

    • Procter & Gamble (PG +0.5%) is in talks with Pfizer (PFE +0.3%) over a purchase of the company's consumer products business or a joint venture arrangement, according to CNBC.
    • Pfizer is expected to make a decision by the end of the month.

    Facebook pulled from BofA US 1 list; shares -2%

    • Facebook (NASDAQ:FB) is off 2% today after being pulled from Bank of America Merrill Lynch's US 1 list.
    • By clearing the flagging stock, BofA made room on the list for Nvidia, which it sees levered to multiple growth markets including AI and vehicles.
    • BofAML is staying a Buy on Facebook; the company's shares are now down 11.9% YTD, but have risen 9.1% over the past 12 months.

    Amazon -1% on Trump tweet suggesting post office collusion

    • President Trump tweets yet again about Amazon (NASDAQ:AMZN).
    • Tweet: “I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!” 
    • Amazon shares are down 1% today and down 8.3% in the past week since Axios reported that Trump is more concerned with Amazon than Facebook. 
    • Previously: Axios: Trump more concerned with Amazon than Facebook (March 28)

    General Electric -2% amid flurry of analyst chatter

    • General Electric (GE -2%) tumbles back below $13 following plenty of early morning analyst chatter, most of it negative and including yet another bearish take from J.P. Morgan's Stephen Tusa.
    • Additionally, Stifel analyst Robert McCarthy lowers his FY 2018 EPS estimate for GE to $0.95 from $0.98 and his FY 2019 EPS outlook to $1.05 from $1.10, citing continued challenges at Power, expectations for slower growth across long cycle businesses and material cost inflation challenges; McCarthy also cuts his GE stock price target to $13 from $15 while reiterating his Hold rating.
    • Also, Oppenheimer's Christopher Glynn reiterates an Underperform rating on the stock, writing that while GE's balance-sheet liability "mechanisms remain interesting/fairly constructive" in terms of answering insurance reserve requirements and pension deficits, the company is "still walking a fine line."
    • But figuring no recent GE news could be viewed as good news, Citi's Andrew Kaplowitz keeps his Buy rating on the stock, with no significant new issues having emerged following the announcement of GE's insurance reserves funding plan; he thinks that as more time passes with no significant new issues emerging, the more investors can gain confidence that new management can fully focus on executing a turnaround.

    Trade war could lift gold past $1,400

    • “In the 40 years I’ve been involved in the gold market, the most important determinant of the gold price has been international confidence in the U.S. dollar," says Sprott U.S. Holdings CEO Rick Rule.
    • A "zero-sum trade war … that's bad for everybody" could spark gold above $1,400 per ounce, he argues.
    • On the other hand, an easing of trade tensions might have gold heading in the other direction. BNP Paribas expects gold to end the year lower, and reminds the Fed may be on the path to four rate hikes this year.

    Toyota March U.S. sales: +3.5%

    • Toyota (NYSE:TM) unit sales +3.5% to 222,782 units vs. +4.9% forecast by Edmunds.
    • Toyota truck sales rose 13.9% to 113,168 units during the month off strong demand for the Tacoma and Tundra. SUV sales were up 17.5%.
    • Sales by brand: Toyota +4.5% to 195,750; Lexus -3.2% to 27,032.
    • YTD Toyota U.S. sales +7.4% to 572,033 units.

    BoJ discussing QE exit options – Governor Kuroda

    • The Japanese central bank has been discussing how to exit smoothly from its massive QE program, but says it's too early to reveal details at this point.
    • How the BOJ normalizes policy will depend on what’s happening with prices, the economy and markets, said Governor Kuroda, speaking to parliament.
    • Analysts say the change in communications strategy is a clear indication of a pivot towards policy normalization.
    • The yen could significantly strengthen if the BoJ stops printing money making any QE exit difficult to implement.

    Ford tops estimates with 3.4% U.S. sales gain

    • Ford (NYSE:F) unit sales +3.4% to 244,306 in March to top the estimate from Edmunds for a 2.8% gain.
    • Passenger car sales -8.1% to 52,635 units.
    • SUV sales +7.5% to 82,395 units, including a 19% gain Edge sales.
    • Truck sales +6.7% to 109,276 units. F-Series sales +7.0% to 87,011 units.
    • YTD U.S. sales -2.9% to 599,581 units.
    • Ford's sales wrap: "We saw incredible demand for our trucks and SUVs, selling over 87,000 F-Series pickups. Ford brand SUVs established a new sales record in March. Demand for our all-new Lincoln Navigator is off the charts, with some customers buying the SUV sight unseen."
    • Shares of Ford are up 1.47% to $11.02.

    Tesla updates on Q1 deliveries

    • Tesla (NASDAQ:TSLAreports a production total of 34,494 vehicles in Q1. The tally included 24,728 Model S and Model X vehicles, and 9,766 Model 3s.
    • The company says that in the past seven days it produced 2,020 Model S vehicles, lower than its 2.5K target set earlier. "In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles," says the company.
    • Tesla's Q1 deliveries came in at 29,980 vehicles, of which 11,730 were Model S, 10,070 were Model X, and 8,180 were Model 3.
    • On production issues: "We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment."
    • On demand: "Net Model 3 reservations remained stable through Q1."
    • Shares of Tesla are up 4% about ten minutes after the press release hit.

    Delta Air Lines higher after traffic update

    • Delta Air Lines (NYSE:DALreports revenue passenger miles increased 4.3% in March to 18.946B. Domestic RPMs rose 4.2% to 12.217B.
    • Capacity was up 3.0% to 21.804B available seat miles. Domestic ASM were up 4.1% to 14.113B.
    • The carrier's load factor improved 110 bps to 86.9%. YTD load factor was flat at the end of March at 82.9%.
    • Shares of Delta are up 1.25% premarket to $52.60 after a 5% drop yesterday.

    GameStop slips after Loop Capital loses confidence

    • Loop Capital Markets downgrades GameStop (NYSE:GME) to Hold from Buy after factoring in the lack of momentum working in the retailer's favor.
    • The investment firm slashes its price target to $14 from $26.
    • Shares of GameStop are down 1.33% in premarket action to $12.65. The 52-week low on GME is $12.20.

    Analysis on the fuel economy reset

    • Height Capital Markets weighs in on the Trump EPA's decision to begin the process of rolling back fuel economy requirements.
    • Interestingly, the investment firm doesn't expect a huge pullback from the 54.5 mpg target set by the Obama Adminstration.
    • "We suspect that the new 2025 target could be as low as 46-50 mpg, reflecting the lowest end of the range studied by the Obama Administration in 2012," updates Height.
    • While a final rule is expected by the end of the year, a wildcard in the mix is the status of current EPA chief Scott Pruitt. Height reminds that if Pruitt doesn't hold on to his job that an even more "aggressive advocate" for softened fuel economy standards could be pulling the string.
    • The Trump Administration will also have to decide if it wants to take on California in court and the 12 states that follow its lead, a process that legal scholars aren't convinced is easily winnable.

    J.P. Morgan's Tusa puzzled by ratings agency 'inertia' on GE

    • Longtime GE bear Stephen Tusa at J.P. Morgan reiterates his Underweight rating and $11 price target on the shares, and raises the issue of how long the ratings agencies can support a "currently unjustified rating" on the company.
    • Despite "material changes" in fundamentals, little progress on asset sales, a lack of "clean numbers," and an SEC investigation, ratings agencies covering General Electric "remain on the sidelines" with their commentary, seemingly giving the company "precious time to work their way out," Tusa says. "We scratch our heads as to the repeated inertia."
    • Tusa says he expects to remain bearish on the stock until GE's fundamentals show signs of prolonged improvement.
    • Shares +0.3% premarket.

    Buy U.S. Steel ahead of 'very bullish' catalyst, Citi says

    • U.S. Steel (NYSE:X+2.6% premarket after Citigroup upgrades shares to Buy from Neutral with a $46 price target, lifted from $43, ahead of a "very bullish" catalyst in steel prices.
    • U.S. flat rolled prices are peaking and expected to gap lower, although they likely will make "higher lows" similar to met coal and iron ore equities in 2017, Citi analyst Zlexander Hacking says.
    • Noting that shares are down ~25% in recent weeks with the price of iron ore, U.S. Steel now has "good value at 10% FCF yield in 2018-19 and considerably higher in 2020-plus, post-asset revitalization," Hacking writes.
    • The firm also raises its steel price forecasts after recent tariff announcements anddowngrades Commercial Metals (NYSE:CMC) to Neutral from Buy with a $22 price target, cut from $29, as several rebar projects announced in recent months will offset the benefit of lower imports.

  14. Phil

    Is it time for a LABU trade ?


  15. SQQQ/Phil- at what price is a good price to take off the 50 may short 50 calls, sold for $2.14? I thinking as long as the downtrend is over, just buy back at whatever price?

  16. Going down again…. Looks like a wheeee kind of day!

  17. SQQQ- OK, playing the swings. Still wrapping my arms around hedging as most of mine previously did not do as well as expected so need to make some short term moves. 

  18. pstas- I bought 25 18/23 June spread as per Phil recommendation as I don't like the index swinging around. I still own the 80/40 Sept 15/20 spread and 50 short may 20 calls. I think it's a good time to add the June but I only added 1/2 of the recommended 50 spread as I prefer to wait see how the day ends before thinking to add the remaining 25 over the week.

  19. SPOT – Spotify to begin trading today. 

  20. Futures options / Phil (from the morning post)- Thank you Phil, much appreciated

  21. LABU/QC – We may close red today – it's only time to check supplies in the bomb shelter!  

    I love to play LABU when it's low in the channel and we're certainly at a spot where I want to be in.  I'd just like to see the market stabilize first.

    SQQQ/Dave – I assume you mean the short $20 calls?  There's no particular price as we expect them to either expire worthless or we roll them to longer months with higher strikes.  Ideally, once they fall back to about $1, I'd keep a tight stop on 20/50.  The current $2.40 price is 100% premium at $19.94 – why would you pay that?  

    I hope Spotify does well as we're still invested in FUNN at PSW Investments.  Should grease the wheels for us to get more funding.

    You're welcome EMike!  

    Dollar back to testing 90 – we'll see how that goes.   Gold and silver pulling back as we expected. 

    /NGV8 on the move already at $2.82.

  22. IMAX Signs 30-Theatre Agreement With Guangzhou JinYi Media Corporation In China

  23. Trump talking trade with Lithuania and, of course, it's all about LNG, which he has nothing to do with, it's simply a new thing that was going to happen with or without him which he is taking credit for.  This is doing nothing for our actual trade at all. 

    IMAX/Jabob – Not dead yet.  

    Rates jump higher as equity markets stabilize

    • Stocks are hardly in major bounce mode, but the major averages have at least stabilized after plunging to 2018 lows yesterday.
    • The S&P 500 is up 0.5%, and the Nasdaq 0.3%. The Dow is higher by 0.7%. Downside leaders like Facebook, Tesla, and Amazon are all in the green today.
    • With the equity waters looking safer, money is flowing out of Treasury paper, leading to a five basis point rise in the 10-year yield to 2.78%. TLT -0.75%TBT +1.5%
    • In monetary policy news, current San Francisco Fed President John Williams has been named as the replacement for the departing Bill Dudley atop the New York Fed. Williams is a company man, though some in Congress may look to make some noise about the appointment – his San Francisco Fed was responsible for oversight of Wells Fargo while its myriad malfeasances were taking place, and now Williams will have supervisory power over the Wall Street banks.

    Investors in local currency EM debt risk a sharp dollar move

    • Given strong performance over the last 12 months, investors have poured a total of $745B into EM local currency debt.
    • “Most people who invest in emerging local do so unhedged. Generally they tend to run the duration and currency risk,” says James Athey of Aberdeen.
    • The trade has generated 13% returns over the past year, and more than half these gains are from currency performance.
    • With the Fed unwinding its balance sheet and tightening monetary policy, the risks of a sudden reversal are rising, but the market still doesn't expect it.
    • “It’s never been this cheap to hedge against a sharp rise in the dollar.” said Damian Sassower of Bloomberg.

    Australia's central bank keeps interest rate unchanged

    • Australia's central bank continues its longest run of 20 months of unchanged interest rates at record low of 1.5% in April policy meeting.
    • Inflation is likely to remain subdued for some time, reflecting low growth in labor costs and strong competition in retailing," said RBA Governor Philip Lowe in a brief statement.
    • A Reuters poll of 45 analysts taken last week found around half expected a rise late this year, with the rest tipping a prolonged pause to 2019.

    Spotify opens at $165.90, near $30B valuation

    • Spotify (NYSE:SPOT) has opened for trading on the NYSE at $165.90.
    • With 177M shares outstanding, that equates to a valuation just short of $30B ($29.4B to be closer to exact).
    • That opens a new phase in the unusual saga of the music streamer's direct IPO, where it lists shares on the exchange for trading without typical roadshows and underwriting from investment banks.
    • Opening indications had been climbing through late morning until hitting the $167/$170 range.
    • It had gotten a reference price this morning from the exchange of $132, meaning the stock is nominally "up" 26%.
    • RBC last week came in with a strong price target of $220, while MKM added a $200 price target shortly after.
    • Updated 1:24 p.m.: In the past half hour, shares have settled to mostly trade between $160-$161/share

    Lockheed wins NASA contract to build supersonic plane sans sonic boom

    • Lockheed Martin (LMT +0.4%wins a $247.5M award from NASA to design and build a supersonic aircraft that does not create a traditional sonic boom.
    • LMT says the cost-plus contract will allow its secretive Skunk Works division to continue development of its Quiet Supersonic Technology aircraft first awarded in 2016.
    • NASA plans to flight-test the experimental aircraft by the end of 2021.

    Europe manufacturing PMI at 56.6 in March

    • Europe's manufacturing boom stumbled to an eight-month low of 56.6 in March as optimism waned and demand ebbed owing to a powerful winter storm, but expansion was still broad-based across the continent.
    • The March survey showed growth in cost pressures for UK factories and their selling prices cooled, something that may reassure Bank of England officials who are keeping an eye on inflation pressures.
    • Most economists polled by Reuters think the central bank is likely to raise interest rates to a new post-financial crisis high of 0.75 percent in May.

    Piper Jaffray analyst says don't worry about Trump v. Amazon

    • Piper Jaffray analyst Michael Olson says investors shouldn’t worry about President Trump’s continued criticism of Amazon (NASDAQ:AMZN).  
    • Key quote: “Nothing can be certain, except death and taxes … and more Trump tweets on Amazon. Sales tax collection changes would have limited impact.”
    • The firm surveyed 2K U.S. consumers and found only 5% see sales tax as a critical factor in deciding where to shop. 
    • Amazon shares are down 0.1%.  
    • Previously: Amazon -1% on Trump tweet suggesting post office collusion (April 3)

    UK Manufacturing PMI rises to 55.1 in March

    • UK manufacturing sector PMI rose to 55.1 in March, compared to forecasts for a reading of 54.8 highlighting that output growth picked up, but was offset by slower increases in both new orders and employment.
    • “The latest PMI survey provided further evidence that UK manufacturing has entered a softer growth phase so far this year,” IHS Markit director Rob Dobson said.
    • “With cost inflationary pressures also moderating to provide some respite for margins, the sector looks set to make further slow and steady progress as we head through the spring,” Dobson concluded.

    DoJ asks Supreme Court to drop Microsoft case due to CLOUD Act

    • The Department of Justice files a motion with the Supreme Court related to the Microsoft (NASDAQ:MSFT) case involving overseas data.
    • The DoJ wants the court to vacate the prior Court of Appeals judgment and dismiss the case due to last week’s passage of the Clarifying Lawful Overseas Use of Data (CLOUD) Act. 
    • The DoJ says the CLOUD Act now governs the warrant at the heart of the dispute, which traces back to 2014 when prosecutors took Microsoft to court to access suspects’ emails that were stored overseas. The Appeals court ruled in Microsoft’s favor in 2016, and the DoJ appealed that decision to the Supreme Court.
    • The DoJ went ahead and issued a new warrant for the Microsoft data last week and says that warrant is covered under the CLOUD Act. 
    • Microsoft shares are up 0.4%
    • Previously: Supreme Court seems split on Microsoft data case (Feb. 27)

    Study questioning specificity of CRISPR/Cas9 gene editing retracted by peer-reviewed journal

    • The peer-reviewed journal Nature Methods has retracted a 2017 paper that appeared to show evidence of off-target effects related to the much-hyped gene editing technology CRISPR/Cas9.
    • Scrutiny from other researchers, however, revealed that the study lacked key controlsmaking it impossible to attribute the observed genetic variants to off-target editing from CRISPR/Cas9.
    • Specifically, the study focused on the use of CRISPR/Cas9 to correct a certain genetic mutation in inbred mice. As follow-up, the authors wanted to assess off-target changes so they sequenced the entire genome of the mice instead of the predicted sites. The problem was that the precise genetic relationship between the CRISPR/Cas9-treated animals and the control animals was unknown and they were not siblings. Also, the level of background genetic variation in the particular strain of mice was unknown thereby precluding any valid conclusions of potential off-target effects due to the absence of a baseline comparator.

    Bitcoin bounce continues

    • Bitcoin (Cryptocurrency:BTC-USD) plunged to a 2018 low of $6.4K over the weekend, but has been climbing since late Sunday, up another 4.5% today to $7.4K.
    • Checking some other cryptos, Ethereum (Cryptocurrency:ETH-USD) sunk down to $363, and it's back to $404. Litecoin (Cryptocurrency:LTC-USD) has bounced to $126 from as low as $110, and Ripple (Cryptocurrency:XRP-USD) to $0.5276 from $0.4608.
    • OTCQX:GBTC +6.8% today

    Amazon Music Unlimited subscriptions double; analyst sees $20B in AMZN ad rev.

    • Amazon (NASDAQ:AMZN) tells The Verge that Amazon Music Unlimited subscriptions doubled in the last six months. But the company doesn’t provide a specific number.
    • Music Unlimited launched at this time last year. The service offers monthly plans that cost from $3.99 to $14.99 depending on the number of users/devices. 
    • Ads to $20B: Cenkos Securities analyst Alex DeGroote thinks Amazon’s ad business could be worth $20B by 2020. 
    • The analyst estimates that North America’s ad market represents about 40% of the global market or $200B currently. He estimates that Amazon has about $63B of the total or a 1.5% market share now. 
    • DeGroote estimates growth that would put Amazon’s at $8B of the North American market and $20B globally within two years.  
    • Amazon shares are up 0.9%.
    • Previously: Amazon -1% on Trump tweet suggesting post office collusion (April 3)

  24. Wow, /ES was red and now turning back.  

    Super low-volume day and hardly any chat either so I guess it must be Spring Break!

  25. Phil- how do you pull out the daily volume chat of the market that you showed above in one your replies? thanks

  26. Wow, we have a day-trader delight today – up and down 200 points! Bots are making bank now.

  27. Relative volume is indeed quite low right now:

    Look at the bar on the left!

  28. Lol! F this market! 

  29. any news behind that 2:45 PM bump up?

  30. poked a short on YM at 24000

  31. bio==seems to be moving with AMZN

  32. CBI

    CB&I up 7% following two contract wins out of China  (14.37 +0.98)

    •Co announced it has been awarded a contract by Hainan Huasheng New Material Technology Co. Ltd. for the license and engineering design for a diphenyl carbonate (DPC) petrochemical unit in Hainan Province, China.

  33. taking a $300 gain on the 24000 short. since it's less than 10 mins till closing anddidn't like how to hold 23900 levels

  34. Volume/Dave – It's in Yahoo Finance, the historical data of SPY.

    Quite the finish today, up 400 – Once again Monday did not matter.

    F indeed, Jeff!

    News/BDC – I saw nothing in particular other than the usual WH Press Secy telling reporters to ignore everything Trump said this afternoon.

    Good call Dave but be careful.

    CBI/Albo – We'll get there eventually.

    Ah, good job on the quick profits Dave.

  35. Reports of an active shooter at YouTube HQ

  36. I guess we'll see tomorrow if Tuesdays don't matter either!

  37. Premiums shoot up, but many are paying less for ‘Obamacare’

  38. Rules for Lending to the Poor Under Review

  39. Good morning!

    Futures down sharply at EU open, I guess people are starting to understand what a trade war looks like.

  40. Good morning, Trump should soon start to boast how he take down the markets.

  41. China Strikes Back at the U.S. With Its Own Tariffs

  42. Exit From European Stocks