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Retaliation Wednesday – The Empire Strikes Back!

Image result for us china tariffsTariffs! 

China hit back last night with $50Bn in tariffs against US exports like cars, chemicals and soy beans along with 106 categories of American goods that are exported into China and, more specifically, goods that are exported from Republican-dominated states, where lawmakers might be expected to have some influence with President Trump, presumably to get him to back down from the latest trade demands.

"China has never succumed to external pressure – external pressure will only make the Chinese people more focused on economic development.  China's attitude is clear, we don't want a trade war because a trade war would hurt the interests of both countries.  As the Chinese saying goes, it is only polite to reciprocate." – Trade Minister Zhu.  

Image result for us china tariffsOnly polite to reciprocate” is unusually dark and direct. Unlike the U.S. president, who salts his speech with off-the-cuff remarks about foreign policy, Chinese officials don’t usually digress with clever comments.  Trump has undone years of hard-fought civility in discourse that was meant to avoid exactly the kind of economic catastrophe he is now causing.

Wei Jianguo, a former vice minister of commerce, said the key to understanding China’s response is “same proportion, same scale and same intensity.  That means we will retaliate with the same strength,” he said. “Whatever the total value of trade the United States targets, we will target the same amount. If it’s in the form of tariffs, we will do the same.”

The escalated Chinese response is exactly what we predicted for our Members.  In fact, last Tuesday (3/27), right in our Morning Report, I said:

The markets are back up to our weak bounce lines(see yesterday's reportthough I think we'll be using them as shorting lines this morning as the Dollar is recovering quickly, up 0.6% and that's bound to put a bit of pressure on the markets as they finally hit some resistance.  Dow (/YM) 24,350 is my favorite short at the moment, with tight stops over the line and 6,850 on the Nasdaq (/NQ) will make a fun shorting line as well.    

Why short?  Well, nothing at all has changed other than it's POSSIBLE that China and the US will have a trade agreement instead of a trade war but, other than that – all the other stuff that caused the market to fall off it's highs all month haven't gone away – Thursday's trade talk just made them worse and now they are not worse – they are the same – not better either.

In yesterday morning's post, we played for the weak bounce back to 6,500 but we failed it intra-day, which kept us very skeptical of the low-volume "rally" the pundits were celebrating last night.  As I noted in our Live Member Chat Room that back on the 23rd, regarding my comments from the Live Trading Webinar:

As I said yesterday, we will probably get a bounce due to China's no or mild response but that's only because China doesn't rush to respond to things.

We had the initial, small retaliation on the 27th and now we have round two that brings China's tariffs up to match Trump's but let's not forget there are 180 other contries that also may decide to place tariffs on American products in retailiation – this is just the effect of China joining the trade wars with our blowhard President.  

And who benefits?  Why, Russia of course, who have been seeking closer trade relations with China and now that Comrade Trump has single-handedly undone the relationship building we've done with China dating back to Nixon – Putin is happy to step in and fill the $50Bn trade gap as many of the things that will no longer be supplied by Trump Country can easily be produced in Mother Russa instead. 

Robert Mueller needs to stop looking for evidence that Trump colluded with Russia on the election and start looking at the very obvious evidence that Trump is colluding with Russia to destroy the US economy, as well as our hard-won standing as the Global Leader – that ship has already sailed at the last G20 Meeting, where Trump disgraced us on the International Stage and now they are dismantling the economy and plunging the country into insurmountable debt and economic chaos.

Meanwhile, despite OPEC's lowest output in a year, Oil prices are tumbling back to $62.50 after that ridiculous pre-holiday run-up that also sent Gasoline (/RB) to $2.03 but back to $1.96 now – a drop of $2,940 per contract!

Oil Futures (/CL) falling from $65 to $62.50 is good for $2,500 per contract and, with over 500M FAKE contracts open at the NYMEX, we're talking over $1Bn lost so far this week – DESPITE Trump's rolling back the CAFE Standards (mileage requirements) on US Autos. 

If $62.50 fails, look for /CL to test $60 (another $2,500 gain on the shorts) and for /RB to hit $1.90, good for $1,680 gains per short contract.  Keep tight stops above and they are both great risk/reward plays.

Speaking of US Autos, good sales numbers rallied the market yesteray but, of course, March has 3 more days (10%+) than February – so of course we have stronger numbers!  

Speaking of strong numbers, or lack thereof, depsite MASSIVE money printing and MASSIVE debt accumulation, Japan's Industrial Production numbers are still lower than they were 10 years ago.  After falling 6.8% in January, the February figures only bounced back 4.1% and the year/year gain is just 1.4%, the wost level since October of 2016 and pretty much the opposite of the effect Abe was claiming just weeks ago.  

This is the World's 3rd largest economy folks and it's stalling – it would be good to pay attention to these things!   Failing Monday's lows (2,550 on /ES) or failing again at the weak bounce lines will lead us to add a layer of additional hedges as we prepare for the drop to S&P 2,400.

I don't think we'll toss off the escalating trade war and Trump's war on Amazon continues as well and, if he can go after them – who's next?  One of the benefits of living and investing in the US is that you don't expect the Government to interfere in the oridinary course of business other than through the courts when they violate the rules but this corrupt, irrational, unpredictable, untruthful Administration has thrown out the rule book (and the rule of law) and, last I heard – the markets don't like uncertainty.

Let's be careful out there! 

 


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  1. Good morning, All!

    There will be no webinar today.



  2. So now the EPA wants to go after California for their separate emissions standards! What happened to state rights? Remember, states had the right to not provide Obamacare exchanges because – state rights! I guess this time it's different. And as there been a more corrupt cabinet secretary than Pruitt in modern times? Sickening.



  3. Trump's war with Amazon:

    https://www.vanityfair.com/news/2018/04/trump-war-with-amazon-and-the-washington-post-is-personal

    Now, according to four sources close to the White House, Trump is discussing ways to escalate his Twitter attacks on Amazon to further damage the company. “He’s off the hook on this. It’s war,” one source told me. “He gets obsessed with something, and now he’s obsessed with Bezos,” said another source. “Trump is like, how can I fuck with him?”

    I don't care that much about Bezos but having a president attack personally the CEO of a US company with the sole objective to destroy the company has to be unprecedented. Are there any limits to the vindictiveness of this small man? Probably jealous because Bezos actually has billions.


  4. Good morning! 

    Yikes!  NO Webinar today – I'm working from my Mom's kitchen!  


  5. Oops. Edited my webinar post to reflect.


  6. Big Chart – Well now Tuesday didn't matter and we'll see which way Wednesday goes but, on the whole, still a watch and wait kind of week.

    EPA/StJ – I'm just dumbfounded that people in this country can't see what's going on.  Or maybe they just really don't care but, either way – Jersey is looking better and better to me.

    Nice budget breakdown and, as above, I agree re. Bezos and, again, how do people not see what Trump is doing – he's the bully picking on another big kid to assert his dominance in the playground.  Hopefully Jeff has the balls to stand up to him.  Tim Cook would kick his ass for sure.


  7. Trump / Phil – We know that Bezos has the money to mess with him! I am guessing that if he wanted to play hardball, he could find ways to mess up the Trump empire pretty nicely. But not sure he wants to go that way – he is just more mature although with Trump, the bar is pretty low.


  8. 11% of Americans don’t use the internet. Who are they?






  9. MSNBC analyst: Donald Trump is subject of Robert Mueller grand jury




  10. EIA petroleum data for the week ended Mar 30:

    •The EIA reports that for the week ending Mar 30th:?Crude oil inventories had a draw of 4.6 mln barrels
    ?Gasoline inventories had a draw of 1.1 mln barrels
    ?Distillate inventories had a build of 0.5 mln barrels


  11. CL and RB just shot up got stop out of both


  12. Homebuilders strong today following LEN earnings.  PHM, KBH, etc.  Even HOV.


  13. Bezos/StJ – Bezos can mess with Trump by focusing the WaPo on him.  Trump thinks this is already happening but, of course, the WaPo is just doing the same thing it's done since Watergate – no change in policy there.  Still Trump blames Bezos because, if Trump had control of a newspaper – he knows he's certainly use it to attack his enemies and reward his friends so he can't imagine Bezos doing anything else. 

    Oil Report (thanks Albo) – Nice draw on oil pulls up back from $1.94 and $62 – now we'll see where we bounce back to.

    /NG is the big winner! 

    Even HOV/Albo – About time but I was hoping for $1.60.

    Still no long options on them – only out to Nov.  $2 puts are 0.50 – I do like those and the $1 (0.95)/2 (0.30) bull call spread is 0.65 so combine them and you're in for 0.15 on the $1 spread and your break-even is about $1.60.

    So let's say you were willing to own 5,000 HOV at $1.60 ($8,000), you could do 50 of each for net $650 on the $5,000 spread with $4,350 upside (500%ish) and worst case is you get assigned 500 for net $2.15 but, as long as they are over $1 - the calls offset some of that cost.  


  14. Indexes ripping higher again – we have to start betting on these runs.  Still failing to make yesterday's highs would now be a disaster.  


  15. On the indexes .. could it bu just filling the gap while luring Europe before the real flush ?


  16. Phil,  your thoughts:  Will Bezos be the Dem candidate for president in 2020?


  17. I don't understand why anyone would want to give up their cushy CEO gig for the thankless job of being President.  Doesn't matter what you do, people are going to tear you down.  (though would say that is much deserved in Trump's case)


  18. Gap/State – I think we're just consolidating for a move below the 200 dma but that can take 10-20 days easily to resolve, not 2-3….

    Bezos/Taihu – If anyone can buy an election, he can but why would he want to.  I never took him for an egomaniac like Trump and he already has all the money and power a normal person would want.  It would be nice if Bloomberg stepped in but he'll be pushing 80 in 2020 so probably not.  Hopefully he, Buffett, Bezos and others of a like-mind will throw their weight behind a good candidate who can clean up this mess but, if the Dems can't take back the House and Senate – it doesn't matter who the President is.   The damage Trump is doing to this country will take a long, long time to undo.

    Facebook's Zuckerberg to testify to House commerce panel in a week

    • Facebook (FB -2.2%) CEO Mark Zuckerberg will testify before the House Energy and Commerce Committee next Wednesday, in one of what may be a number of appearances with congressional committees expressing interest.
    • The Senate Judiciary Committee has invited Zuckerberg (along with Twitter's Jack Dorsey and Google's Sundar Pichai) to a hearing next Tuesday, but it's not known whether Zuckerberg has agreed to appear there.
    • He's never testified before Congress, but decided last week that now was the time, a source tells Bloomberg.

    Factory orders lower than anticipated

    New orders drag ISM Non-Manufacturing lower

    • Mar. ISM Non-Manufacturing Index: 58.8 vs. 59.0 consensus, 59.5 prior.
    • Business activity 60.6% vs 62.8.
    • New Orders 59.5% vs 64.8%.
    • Employment 56.6% vs 55.0%.

    PMI service remains strong in March

    Saving the markets this morning:  Bullard not in favor of more rate hikes

    • Not terribly surprising given his dovish stance over the past months, St. Louis Fed President Jim Bullard tells a Little Rock audience monetary policy is now neutral, and inflation is below target – thus there's no need to raise rates any more.
    • Bullard is not a voter on the FOMC this year.

    BOJ buys record $7.8 billion of Japanese ETFs in March to support market

    • The Bank Of Japan bought record ETFs of ¥833BB in March and ¥1.9T in March quarter as the central bank supported a market hit by a rising yen and fears of a global trade war.
    • The Nikkei share average (N225) dropped 2.8% in March and hit six-month lows, after falling 4.5% in February. Market analysts expect the Nikkei to remain volatile in the coming months as worries about a trade war cloud the outlook for world growth.
    • Traders also worry that Japan Inc will have to lower their foreign exchange assumptions for the fiscal year through March 2019, which would reduce manufacturers' profits made abroad.

    Trading revenues should lift Q1 results at banks

    • Thanks to the big pickup in volatility late in Q1, Wall Street’s trading desks are about to report one of their best quarter in years.
    • Revenue growth projections range in the 5%-10% area, with equity desks seen reporting the best performance, and fixed income, currencies and commodities desks to show more muted gains.
    • The trading business has shown lackluster performance lately as regulation and low volatility have been barriers to growth. Trading revenues at the five biggest Wall Street banks was about $70B in 2017, down from nearly $100B in 2009.
    • Related Tickers: JPMorgan (NYSE:JPM), Citibank (NYSE:C), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS).

    Retail vacancies at six-year high

    • Q1 retail vacancies at regional malls have jumped to 8.4%, the highest level since Q4 2012, according to Reis.
    • “The first quarter tends to see the lowest activity,” says the report. “However, this was an unusually slow quarter for retail leasing and construction.”
    • Adding to the misery, community shopping centers in 41 of the 77 areas tracked by Reis experienced a rise in vacancy rates during the 12 months ending March 31.
    • The data confirms brick-and-mortar malls and shopping centers continue to be hurt by shifting consumer spending patterns moving online to e-commerce platforms like Amazon.

    German automakers take the China hit more than Detroit

    • Bernstein analyst Robin Zhu says it's BMW (OTCPK:BMWYY) and Mercedes-Benz (OTCPK:DDAIF) that stand the most to lose from China auto tariffs as they import the largest volume of cars from the U.S. plants into China.
    • German automakers accounted for more than half of the 280K vehicles imported into China last year. The 280K tally of course is very small in comparison to the global volume of major manufacturers, and doesn't include the joint venture operations set up by General Motors (GM -0.1%) and Ford (F -0.2%).
    • As expected, GM and Ford are both publicly calling for a de-escalation of US-China trade tension. "We continue to believe both countries value a vibrant auto industry and understand the interdependence between the world’s two largest automotive markets," reads a GM statement. "We encourage both governments to work together to resolve issues between these two important economies," mimics Ford.
    • BMW is down 1.85% and Daimler is off 1.25% in Frankfurt today. GM and Ford have recovered nicely from a premarket swoon in the U.S.
    • Previously: U.S. auto in reverse after China sets tariffs (April 4)

    Chinese airline stocks lower on trade concerns

    • Chinese airline stocks China Southern Airlines (ZNH -5.4%) and China Eastern Airlines (CEA -4.3%) are both sharply lower amid the China-U.S. trade scuffle.
    • Executives from both companies have warned that demand could fall due to the potential for higher pricing forced by tariffs.
    • China Southern is down 21% over the last 30 days, while China Eastern is lower by 12%.

    Whirlpool falls after Goldman Sachs warns on margins

    • Goldman Sachs lowers its rating on Whirlpool (NYSE:WHR) to a Sell rating after having it slotted at Neutral.
    • Analyst Sam Eisner believes Whirlpool operates in one of the "weakest industries for pricing power" and sees consensus 2018-2019 EPS estimates at risk of not being matched.
    • The investment firm's lowered price target of $135 reps 11% downside potential.
    • Shares of Whirlpool are down 3.48% in premarket trading to $145.96.

    LG Display wants to produce 10M OLED TVs in 2021

    • LG Display (NYSE:LPLwants to produce 10M OLED TV panels in 2021, which is six times more than the 1.7M produced last year.
    • OLED TV sales accounted for half of LG’s high-end segment (items costing $2K or more) in 2017 and the company forecasts growth to 70% of the segment this year. 
    • SVP Lee Sang-hoon to Nikkei Asian Review: “We will be able to produce 10 million, or 20 million OLED TV panels easily as consumers are willing to pay for better products. We plan to produce 2.8 million this year, and aim to reach 10 million by 2021.” 
    • To ramp up production capacity, LG Display plans to invest $18B in OLED technology in the next two years. 
    • Global TV makers using LG’s OLED panels in premium products include Sony, Panasonic, and parent company LG Electronics. 
    • LG Display shares are down 4.2% with the market slumping down due to the escalating US-China trade war.    
    • Previously: Tech stocks down as U.S., China reveal new tariffs (April 4)

    Reuters: Viacom preparing CBS counter-offer by Thursday

    • Viacom (VIAB +0.7%) is preparing a counter-bid to a merger offer of 0.55 shares of CBS (CBS +0.3%) for each share of Viacom, which it found inadequate, Reuters reports.
    • The ratio in the counter-offer (expected by Thursday) isn't fully decided, but is likely to be more than 0.62 CBS shares per Viacom share, sources told Reuters.
    • Viacom B shares are up to $29.62; a 0.55 ratio suggests a value of $29.14/share, while the 0.62 ratio suggests $32.85, roughly an 11% premium.
    • The issue of who would be No. 2 at the combined company to CBS chief Les Moonves — holding company National Amusements wants Viacom chief Bob Bakish, while Moonves wants CBS COO Joe Ianniello — is likely to still be a thorny point.
    • While Viacom B shares have turned positive, Viacom's class A shares (NYSE:VIA) are down 4.5%.

  19. Hi Phil, could you give me a call?


  20. am i seeing things???

    hmny and ftr are green???

    no tease please!!!


  21. Jabob – Focus on CBI.  Giving up yesterday's gains.


  22. Besides the Washington Post, he bought a 25,000 sf embassy building on embassy row in DC that he has gutted and rebuilt for his DC home and "salon."  It is likely that he will choose a DC location for HQ2, although some think  that 50,000 new young voters in Atlanta could turn Georgia blue.  He is an astute businessman,  liberal minded and the richest person in the world, not beholden to anyone.  As far as we know, there are no skeletons in his closest. Given Trump's animosity towards Bezos,  if there were something there we would certainly know about it by now.  It is very likely that Trump's attacks on Amazon are driven by his anxiety that Bezos could run with the Dems and win…possibly a Bezos/Oprah ticket!  


  23. Markets on a roll now, almost all green, which is still down for the week but better than the lows so Yay! 

    Same bounce lines are in play as yesterday.

    This is what I mean by "watch and wait" – could you imagine trying to reposition every time the Dow goes up and down 500 points?


  24. And, having conquered the business world, fixing the US and helping the world by being president doesn't sound like a bad idea for a guy who is still young.  Even Putin must admire him.  As an aside, Tim Cook's shots at Amazon are out of character for him and sound like a sop to Trump.  My guess is that Cook is in close contact with  China and that Apple will not  be on any tariff list soon.


  25. FTR – gimme MOAR!


  26. PETX – also nice today (and week) 


  27. Did you guys read this?  I think it was from yesterdays news. 

    https://moneymorning.com/2018/04/04/heres-what-march-told-us-about-the-coming-bear-market/

    Not sure if Lee Adler is a permabear, but his logic sounds good.  

    I bought some more September 19/28 SQQQ spreads as a hedge.  Cost = $1.70 for the $9 spread.


  28. Getting rejected at yesterday's highs but a weak rejection is bullish.

    Bezos/Taihu – Yes, nothing like two people with no government experience running the country.

    FTR/Scott – Earnings 5/1.  PETX seems interesting.

    Adler/Paloty – I think he makes some good points but, then again, I feel like a perma-bear these days.


  29. Pretty much re-rejected at yesterday's highs but, if we don't fall back more than 1/2, it's constructive.  

    Date Open High Low Close* Adj Close** Volume
    Apr 04, 2018 256.75 261.41 256.61 259.94 259.94 66,715,731
    Apr 03, 2018 258.87 261.31 256.84 260.77 260.77 118,151,700
    Apr 02, 2018 262.55 263.13 254.67 257.47 257.47 186,286,300
    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
    Mar 23, 2018 264.17 264.54 257.83 258.05 258.05 183,534,800
    Mar 22, 2018 267.91 268.87 263.36 263.67 263.67 148,785,900
    Mar 21, 2018 270.90 273.27 270.19 270.43 270.43 78,709,600
    Mar 20, 2018 270.94 271.67 270.18 270.95 270.95 59,757,300
    Mar 19, 2018 273.35 274.40 268.62 270.49 270.49 109,208,400
    Mar 16, 2018 274.50 275.39 274.14 274.20 274.20 100,343,700


  30. What the hey !

    FTR up 12 %.

    Phil, so far CTL vs FTR is :

    FTR 1

    CTL 0


  31. albo--i just hope that POS could keep moving higher. It seems like every time these FU stocks have a little run it does not last. Hopefully, this time WILL be different!


  32. Hi Palotay, Lee Adler is not a permabear but he sort of leans that way. I think his analysis on liquidity is very useful but I don't know if he's always right (now he's saying both stocks and bonds cannot make big moves up because there is not enough liquidity). He was bullish years ago when the market kept rising. 


  33. Phil- can you please tell me how did you get everyday's SPX stats and volume as you shared above? Tried googling but could'nt find that format.


  34. Hi daveH

    Those are the historicals for the SPY ETF. Here is the link https://finance.yahoo.com/quote/SPY/history?p=SPY


  35. Rayne- thanks!


  36. FTR/Albo – My boys!

    SPY/Dave – Didn't we do this yesterday?

    And what Rayne linked!

    Gundlach reiterates his bearish views on CNBC

    • Talking to CNBC, "bond king" Jeffrey Gundlach thinks stocks will end the year lower due to both rising rates, and a bear market in bitcoin.
    • "The stock market can't take higher bond yields," said Gundlach. "We're in a volatility regime that is completely, obviously different from what we experienced in 2017. It's payback time," he added.
    • The DoubleLine Capital founder says bitcoin has been a leading indicator for the stock market, and its continued decline is a bad sign for equities. "Bitcoin clearly leads all risk assets," Gundlach said.

    Boeing remains lower but worries over China tariffs could be overblown

    • Boeing (BA -2%) continues to trade lower even as analysts believe China's proposed tariffs on various U.S. imports would affect only a few of the company's jets.
    • The tariffs are restricted to smaller planes with empty takeoff weights of 15K-45K kgs, which would affect the existing version of the single-aisle Boeing 737, which is being phased out, and the smallest type of the replacement 737 Max, which has only a handful of orders from Chinese customers; together, these account for just 5% of Boeing’s 737 backlog.
    • “This is a bad sector for China to apply tariffs,” according to analysts at Sanford Bernstein, noting that the rival Airbus (OTCPK:EADSFOTCPK:EADSY) A320 jet is effectively sold out through 2022.
    • “With a strong order book, a booming commercial aerospace market and only two global manufacturers, China will need [Boeing] aircraft for many years,” says CFRA analyst Jim Corridore. “We think the stock has well overcorrected on trade worries, and would use today’s likely weakness as an enhanced buying opportunity.”

    Microsoft will invest $5B in IoT over four years

    • Microsoft (NASDAQ:MSFTwill invest $5B into IoT programs over the next four years.
    • Microsoft Azure CVP Julia White: “The reason we are doing this is simple: Our goal is to give every customer the ability to transform their businesses, and the world at large, with connected solutions.” 
    • IoT applications are closely tied to cloud computing and Microsoft Azure stands second in the cloud market behind Amazon Web Services, which offers its own IoT suite. 
    • Microsoft shares are up 0.6% to $90.27. 

    That's it, really no news driving this rally – such as it is.


  37. Less and less uncertainty now that China has clearly signaled "reciprocity".   No negative pre-announcements from any companies yet and earnings start in a few weeks.  Unless guidance trends are weaker than expectations, this market perhaps has some near term recovery into earnings.  


  38. Image result for imagine no religion

    Europe, 2014-2016. % of young adults (age 16-29) who identify as having no religion:

    • 1 Czech Republic 91%
    • 2 Estonia 80%
    • 3 Sweden 75%
    • 4 Netherlands 72%
    • 5 UK 70%
    • 6 Hungary 67%
    • 7 Belgium 65%
    • 8 France 64%
    • 9 Denmark 60%
    • 10 Finland 60%

  39. Food for thought, Pot beats BitCoin and Nasdaq over the past 12 months:

    "IT DIDN'T WORK. THEY'RE RETALIATING. NOW WHAT DO I DO?"


  40. Wednesdays matter!!!!


  41. Negatives/Learner – I'm very surprised how easily we're shaking it off.  We'll see if it holds but good progress now.

    Yesterday's short-term bounce lines (noted in morning post):

    Dow 23,800 (weak) and 24,200 (strong) 

    S&P 2,640 (weak) and 2,684 (strong)

    Nasdaq 6,500 (weak) and 6,700 (strong)

    NYSE 12,450 (weak) and 12,600 (strong)

    • NYSE at 12,468

    Russell 1,520 (weak) and 1,540 (strong)

    So, as exciting as this recovery is – we're not there yet, though this is a big save and puts us back on a possibly bullish track but we MUST clear those strong bounce lines into the Weekend and then, as I said a week ago – it's really up to earnings, which start in earnest when the Big Banks report next Friday (and we decided they would start out pretty well).

    • So, if you think you need a bullish hedge, XLF should be fun at $27.62 and the April $27 ($1)/$27.50 (0.65) bull call spread at 0.35 pays 0.50 if they hold $27.50 and that's good for 0.15 (42%) in 16 days.
    • You could also combine it with  short C 2020 $65 puts at $6.50, say 3 of those short for $1,950 pays for 50 of the spreads at $1,750 with $200 left as a credit (net $64.33 on 300 C) with the quick $1,500 upside if the bull call spread pays off.  
    • Also works with WFC, where you can sell the 2020 $50 puts for $5 so maybe 4 short there collects $2,000 and nets a $250 credit in that case. 


  42. Big finish on the indexes! 



  43. Exclusive: Mueller’s team questioning Russian oligarchs


  44. How U.S.-China Trade Spat Could Threaten Manufacturing


  45. Phil,  Thoughts on /SIN8 at this level and the market surge?  


  46. TSLA last two day run up from $250 back to $288 was on good volume. I thought the $250 support line would crack after the poor production numbers. They produced 2000 cars in the last week of March , but only 7000 over the previous 11 weeks of the first quarter. What did it cost them per car to produce that 2000 number.  My guess is that they were not produced at a profit…


  47. Good morning!

    It's a travel day for me so I'll be in and out.  Hopefully nothing too biblical happens.

    Chicago Stock Exchange being acquired by ICE, so the fix will be in anyway.

    Silver/Grass – $16.20 has been a pretty good floor so, as long as you are willing to DD if they sharply drop to $16 and stop out below that line – sure I like it here.

    TSLA/Den – Well a new production run will get cut some slack on profits.  They key is 2,000 cars a week so 100,000/yr is what people were hoping for – assuming it's not a BS number and assuming they can sustain it.  In THEORY, once they have production running smoothly, the profits will be there. 

    Strange day as China was down 2% but Europe is up 2% though only playing catch-up to us and Europe is pushing our Futures a bit higher, with the Nas closing in on 6,666.  We''ll be watching the bounce lines and seeing what sticks but not bearish as long as we close green today.


  48. Phil-China and Hk index are still reflecting the 4/4 trading session. Today it's public holiday for only the Chinese people for tomb sweeping and paying respects.


  49. Thanks Dave.