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Monday Market Movement – Trade Wars and Earnings

Don't get fooled by a bounce.

Team Trump softened their tone over the weekend, leading Asian stocks to move back up and Europe opened up over half a percent and our Futures are up half a percent but now Trump has undone the weekend's diplomacy with this morning's tweet calling China "STUPID TRADE" that has been "going on for years."  Hey, maybe it is a brilliant negotiating strategy where the President ACTS like an out-of-control lunatic so the Chinese will submit to "reasonable" requests from his underlings.  Or maybe he's just insane or maybe he's a Russian agent working to undermine 50 years of relationship-building between the US and China?

Meanwhile, we'll be watching the S&P closely, especially around our 2,640 line to see if it holds tomorrow (today is meaningless) and we'll be looking for the same bounce lines we were looking for last week (and all of March), which are:

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

And those bounce lines are being generous with the greens as we're including this morning's BS Futures run-up already.  The reasons the bounce lines matter is that you are bringing down the 50-day moving average and the longer you are below the bounce lines, the faster the 50 dma falls and, eventually, it crosses below the 200 dma and that, my friends, makes a very serious technical selling signal known as a DEATH CROSS, when the 50 dma crosses under the 200 dma.

That's what the 5% Rule™ does.  It tells us, ages before the TA people will see it on their charts, what those charts are going to look like in the Future and doens't knowing the future give you an advantage in playing the market?  Sure it does…

And I wouldn't worry about the 200-day moving average, I'd worry about the 50 MONTH moving average, which, for the S&P 500, is all the way down at 2,200!  Keep in mind, that is the indication of the fair value of the S&P 500 companies as considered by the cash trading habits of millions of investors over the past 4 YEARS.  Sure, you can think those guys were all idiots and only you have the market figured out – best of luck with that:

Last year, we did a great deal of math and decided the Trump tax cuts were good for a 10% boost and, since our Must Hold level on the Big Chart, pre tax-cut, was 2,200, 110% of that is 2,420 and that's why we've been using the 2,400 line for our buy point on the Watch List.  So far, we've come very close to 2,500 but no 2,400 and we're still patiently waiting for some other economic shoes to drop before we begin deploying more of that CASH (80%) we're still holding on the sidelines in our Member Portfolios.   

Today's action is meaningless for two reasons:  A) It's Monday – Monday's are BS (I don't even work Mondays, I'm not even here) and B) The Dollar is down from 90.3 on Friday morning to 89.6 today so 0.7% is more than the market, which is priced in Dollars, is gaining this morning.  So it's all complete and utter BS – don't be sucked in by the move up and certainly not if we're not even hitting our strong bounce lines and, if the weak bounce lines turn red – look out below!

We expect good earnings from the banks on Friday so the indexes are not dead yet, I'll be a lot more interested in what Bed Bath and Beyond (BBBY) have to say on Wednesday and then, next week, we begin to get some real numbers and we will adjust our portfolios accordingly:

Until then, it's more "watch and wait" which I'm sorry is boring but you can see from the past few week's gyrations why I haven't been too keen on either adding or changing positions – we still don't have any real indication of which way things are heading so why make plays when we're not sure.  Even when we are sure we're only about 70-80% effective so trading when we're not sure is silly, right? 

We have the Fed Minutes on Wednesday afternoon and Kashkari speaks that evening with Kaplan Tomorrow morning and 3 Fed Speakers on Friday – presumably to prevent a complete melt-down if the Bank Earnings are sour:

It looks like we're be opening at 24,100 on the Dow (/YM), 2,620 on the S&P (/ES), 6,500 on the Nasdaq (/NQ) and 1,525 on the Russell (/RTY) and I'm inclined to go short, especially on the Nasdaq below 6,500 but out if any of them cross back over and then we just wait to see how the bounce lines play out.

Be careful out there, 

- Phil

 


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  1. Death crosses imminent! Although historically speaking not that significant:


  2. Ackman is not doing so well:

    https://www.institutionalinvestor.com/article/b17n3h68k3hr1c/what%E2%80%99s-keeping-bill-ackman-in-business

    Meanwhile, Pershing Square Holdings still has $3.9 billion, and another $500 million is in an SPV that solely invests in ADP and which is still locked up for four years. Ackman and his employees account for approximately another $1 billion. At its peak, Pershing Square had $19 billion. Firm-wide assets were $8.2 billion as of March 31.

    Lots of redemptions and losses.


  3. Good Morning.


  4. Good morning! 

    Well, I just suck at retiring – although I did sleep until 4am, so that's something…

    I can't sleep when the markets are interesting.  If I didn't have PSW I'd still get up and read the news and trade – I'd just take longer lunches and swim a bit more.  

    Did some midnight swimming last night here in Whistler – they have a nice, hot, outdoor pool with hot tubs and Canadian beer and I do like the West Coast schedule because the markets close at 1am – so I have the rest of the day to have fun.

    Anyway, I am going to have a nice breakfast but then back to work.

    Big Chart – I'll be curious to see if these levels hold when the Dollar comes back but it's still all about staying over that 200 dma but every day under the 50 dma brings us one step closer to a triangle squeezy thingy (the technical term) and, when those are occurring ahead of a death cross (which is what would be forming the triangle) – they don't often resolve in favor of the bulls though, as STJ notes, not that big of a deal in the long run though I would say that those statistics don't take into account how ridiculously overbought the market may be coming into the death cross. 

    Ackman/StJ – Well he certainly did that to himself.  Lots of crazy bets he wouldn't let go of.









  5. So much for a small bounce. 

    We have to start playing for these idiotic moves. 

    Dollar 89.575, oil back to $63.50, /RB $1.983, /NG $2.80, /KC testing $1.20 again.

    I shouldn't have told you guys I'm talking Monday's off – now no one shows up on Mondays.  I didn't say YOU GUYS should take Monday's off – I still want a place to go and chat about the markets….

    Anyway, we're right at 2,640 and, of course, that's causing the S&P to pause so we'll see how it resolves.  /YM is right at the strong (24,200), Nas is way under and /RTY is right in between strong and weak so we'll see how the Dow and /ES hold up here.


  6. Hi Phil!  :)


  7. /KC percolating up today – starting to put some +ve momentum together. Rolling FOP 1.2 puts from May to June for a small credit.


  8. It's Monday and I am still here…


  9. Ok Phil….I'll bite. What's your feeling about energy complex?  Any place you like RB or CL short? It feels like there is way too much optimism at these levels and many more potential negative catalysts over the short term.

    A loonie for your thoughts?


  10. Here comes Robert Mueller’s last laugh


  11. I’m around too. 


  12. Phil, Looks like another 500 point "up" day……This is not investing, this is institutionalized, fed supported fleecing of peoples hard earned savings! 


  13. MONDAYS MATTER!!!!!

    ;-)


  14. David Rosenberg‏ @EconguyRosie Apr 6

    More

    Barely over 3 months into the year and already no fewer than 22 sessions with intra-day moves in the Dow of 400+ points. We had 1 all of last year. The only other time in the past have we seen so many 400 point moves bunched into such a short period — Oct 2008 to Jan 2009.


  15. Hi Gave my trade ideas already in the wee hours. Any one traded them? I did.


  16. Hello, Yodi  -  didn't see your early hours trades. A repeat, please?


  17. Hi Yodi – liked the WSM idea, but have not been able to fill the strangle – looks like it might fire for $8.00 but not $8.20 – happy to wait as the stock is off a tad to $50.01 vs. Friday's close of $50.30.


  18. Phil……any thoughts on ENB?  Dropped by 30%+ and yielding 6.64% currently.  Has options out to 01/19.  Thought not the greatest liquidity. 


  19. G trader look at Last Fridays note if I give an early trade it is always in the last trading day. Normally 6 hours ahead of the US US.

    Winston yes close the strangle for 8.10. There is always a bit give and take. Look how crazy the market is again. Possible on the next twitter of the clown we down to minus again. You never know what it will be in the next couple of hours.


  20. Thanks for the plays Yodi.  I'm doing both as well.  


  21. Here. Just doing a lot of reding.


  22. Reading. Phil you need a spell checker on the site!


  23. Thanks, Yodi  -  found them  -  I, too, trade in a different time to most  -  we are GMT -10, East Coast, Australia

     

    Ciao


  24. Hi 1020, thanks for showing up.  cheeky

    /KC/Winston – It always pops off the lows but, so far, we haven't gotten the big one. 

    Might have found a bottom on LABU:

    Still no volume today, very easy  to reverse.

    Thanks, StJ – I should have said except you.  I can certainly count on you being here, thanks!  

    Energy/Rayne – Fundamentally, I think energy should be much lower but the Saudis are propping it up while they peddle their Aramco IPO and they are willing to spend a royal fortune to do so.  The Prince is running around the US trying to build alliances with the US energy cartel into the June OPEC meeting so it's very dangerous to short oil but I certainly wouldn't go long this close to $65 either.

    Hola Jeff!

    Fleecing/Jasu – You wouldn't feel that way if your 401K was being propped up, right?  They up and down gyrations are killing traders but bullish investors are doing OK.  It just seems very dangerous and unstable to me and it won't take much of a push to start a real selling panic.

    Monday's/Jabob – Only up 400, we'll see what sticks tomorrow.  In the slightly bigger picture, Dec, Jan, Feb, March and April so far have not mattered:

    Remember when I called for a cash out at the end of Dec?  This is why.  You could have had a nice vacation but nooooooooooooooo!  

    400 points/Winston – Also a time the markets were being desperately propped up before a blow-off panic sell.

    Thanks for trade ideas (and work ethic) Yodi!  

    FB/Rexx – Not good when Hollywood turns against your company.

    ENB/Ult – I like the company but not particularly cheap at $31.75, which is $52.5Bn with $35Bn in sales and $3Bn in earnings but only because they took a $2.1Bn tax credit that won't be repeated.  Realistically, they are earning about $1.50 per share so fairly priced at $30 – even a bit high considering the normal valuation for this sector is closer to $15 so not something I'd jump on.   Just because they were inanely priced and now just a little bit expensive doesn't mean you should bet on them re-taking insane – that's exactly the logic that did get people in trouble in 2008! 

    Spell checker/Den – Then my screen would be all red and distracting…


  25. H trader well down under!!!! Far distance from Europe. Welcome to our site.


  26. Zuckerberg doing well in testimony.  Though he says improving controls will impact profits, stock is up 2% as it sounds like he may be doing enough to escape harsher actions.  We'll see how the Q&A goes.

    "I started Facebook, I run it, and I'm responsible for what happens here." Mark Zuckerberg will tell Congress his company didn't do enough to prevent social-media tools from being used for harm


  27. Repeating my trade idea from this am as well:

    One trade I am looking at is GIS, who has been beat up for issuing more shares and buying a new product line, which they have done successfully before. Trade idea is buying the '20 42.5/52.5 BCS, and selling the 42.4 puts for a credit of .53. Worst case is a 6% discount on this dividend payer which has increased its dividend for the last 14 years in a row.


  28. Getting a little selling now, rejected at 24,350, 2,655, 6,600 and 1,540 

    GIS/Den – Certainly I like them long-term.  We had them in the Butterfly Portfolio last year.   Glad we got out before the big dip but attractive now as a long.

    FU JPM!

    • General Electric (GE -0.7%) was the Dow's worst performer in 2017 and is repeating that dubious distinction so far this year, but bearish J.P. Morgan analyst Stephen Tusa thinks GE is still "the most expensive stock in the sector."
    • Tusa believes any recovery in GE's Power unit will not occur until the next decade, which means there's not enough progress to offset dilution from necessary divestitures.
    • The analyst also thinks GE's free cash flow run rate could total just half of the prevailing $1/share bull case narrative, which finally will work its way into 2019 consensus estimates this year, making GE shares pricier than peers.
    • JPM reiterates its Underweight rating on GE with an $11 price target, which Tusa calls "generous."

    • Morgan Stanley says internet stocks could “remain in the penalty box for some time” due to rising regulatory risks.
    • Full quote from the note to clients: “We saw early signs of some weakness in internet stocks around [Q4] earnings and more recently have seen rising worry of regulatory risks. The fundamentals may well be fine long term but we think the group may remain in the penalty box for some time.”
    • Morgan Stanley doesn’t expect regulations to come before the November midterm elections.  
    • Stocks that could move on the note: Facebook (FB +1.8%), Amazon (AMZN +1.6%), Netflix (NFLX +2.4%), and Alphabet (GOOG +2.5%).
    • Morgan Stanley is also cautious on semiconductors, saying it has “doubts about the sustainability of the semis cycle.”
    • Semiconductors continue to push up after Evercore’s positive note this morning. The Philadelphia Semiconductor Index is up 2.4%. 
    • German seasonally adjusted exports plunged 3.2% unexpectedly in February compared to the rise of 0.2%.
    • "As it looks, we have surpassed the top of the economic upswing," HSBC Trinkhaus analyst Lothar Hessler said, adding that the stronger euro was probably to blame for the weak export figures.
    • Germany's wider current account surplus, which measures the flow of goods, services and investments, edged up to €20.7B from €20.3B in January, unadjusted data showed.
    • Eurozone sentix index fell to 19.6 in April from 24.0 in March compared to consensus of 20.0.
    • The third consecutive decline erupted from concerns about a slowdown in global growth as trade tensions rise between the United States and China and lower economic expectations.
    • "Even though the current situation is still rated as excellent … the prospects for the future have become massively gloomier," Patrick Hussy, managing director at Sentix, said in a note.
    • Japanese investors sold a record $36.7B of U.S. dollar bonds in February as currency-hedged investment returns in dollar bonds collapsed.
    • The Japanese mostly invest abroad on a currency-hedged basis to eliminate exposure to FX fluctuations. Costs for hedging the currency have risen steadily since 2014, closely tracking rising short-term U.S. rates.
    • “For many Japanese investors, U.S. Treasuries are no longer an option,” says Tomoaki Shishido, an economist at Nomura Securities. Shishido says investors were likely to buy higher-yielding mortgage bonds and could buy a small amount of Treasuries without currency hedging.

    • According to Reuters the CFPB is seeking hundreds of millions, and perhaps as much as $1B as a settlement for auto insurance and mortgage lending abuses at Wells Fargo (NYSE:WFC).
    • That amount would dwarf the $100M the bank was fined in September 2016 to settle its phony accounts scandal.
    • The stock price has shrugged off the news, now up 2% and sitting at a session high.
    It's news because I'm here:  The highs and lows of Whistler's skis season
    • Canadians are reportedly unhappy about the way Vail Resorts (MTN +0.8%) is operating the Whistler ski property it acquired last year for $1B, even though traffic was at a record.
    • The base rate pricing at Whistler in U.S. dollars created some painful F/X swings for Canadians and the lower level of discounting hasn't been popular with locals.
    • Whistler benefited this ski season from the light snow in the U.S. Rockies that led many more skiers to look to the north and its inclusion on Vail's Epic Pass.
    • Shares of Vail Resorts are up 6.2% YTD.
    • Rising market volatility, increasing geopolitical turmoil, subdued inflation, and looming trade wars are flashing a buy signal for longer-dated U.S. Treasurys, according to Matt Hornbach and team.
    • “Global bond market duration has not looked this attractive in over two years," they say, advising to buy the dip in bonds should equity markets rebound.
    • A return to all-time highs in stocks and/or a fizzling in trade tensions would have the Morgan Stanley team revisiting its bullish thesis.
    • With stocks moving sharply higher today, the 10-year Treasury yield is up 2.4 basis points to 2.801%.
    • ICE (ICE +1.2%says it won't rule out launching futures on digital currencies, following its two biggest rivals into the business.
    • “There is a trend here we can’t ignore in my mind, so I don’t discount it,” says CEO Jeffrey Sprecher. “People put more faith in a guy named Satoshi Nakamoto that no one has ever met than they do in the U.S. Fed."
    • Supervalu (NYSE:SVU) is down 5.4% after last Friday's report of a potential sale fizzles out.
    • A separate Dow Jones story indicates that the company is not in any serious talks about a sale.
    • Shares of Supervalu are swapping hands at $15.85 vs. 52-week trading range of $13.60 to $31.29.
    • Previously: Supervalu shoots up on sale report (April 6)
    • Early indications are that U.S. restaurant sales showed some improvement in March, according to Baird's David Tarantino. The analyst thinks the timing of tax refunds could play into comparisons to a year ago, despite the harsher-than-normal weather in large pockets of the nation.
    • "We believe chains that cater to lower-income consumers will see greater marginal demand improvement from individual income tax cuts than concepts catering to higher-income customers," writes Tarantino
    • He singles out Jack in the Box (JACK +0.6%), Texas Roadhouse (TXRH -1.5%), McDonald's (MCD +0.9%) and Dunkin' Donuts (DNKN +0.8%) as chains that could have seen the tax refund boost.
    • Baird is positive on the U.S. restaurant sector for the balance of the year.
    • Cleveland-Cliffs (CLF -2.2%) discloses that it will permanently close its Asia Pacific Iron Ore mining operations by June 30, citing increasingly discounted prices for lower-iron-content ore, the quality of the remaining iron ore reserves at APIO and the lack of a legitimate offer from a qualified buyer.
    • CLF estimates total costs to be incurred in connection with the closure of $140M-$170M.
    • CLF already had announced the planned closure of the APIO segment but the new disclosure commits a specific course of action.
    • Wedbush Securities backs its positive view on IMAX (IMAX -0.7%) amid solid trends in the U.S. and China.
    • The investment firm thinks the strong summer slate of movies bodes well for IMAX.
    • Shares of IMAX are down 5.08% over the last 52 weeks and sit about 34% below their 52-week high.
    • Uber (UBERwill acquire electric bike-sharing company Jump Bikes for an undisclosed amount. Jump deploys more than 12K bikes in over 40 markets.
    • Last week, TechCrunch reported that Jump was considering an over $100M acquisition offer from Uber. 
    • Uber previously announced a pilot program integrating Jump’s Bikes into the Uber app in San Francisco. 
    • Jump recently closed a $10M Series A funding round with Menlo Ventures and Esther Dyson among the backers. 
    • Competition: Ofo ($2.2B in total funding with Alibaba and Didi among backers), Mobike (acquired by Meituan for $2.7B), Hellobike (merged with Youon Bike), and Spin/Skinny Labs ($8M in total funding with Grishin Robotics and CRCM Ventures among backers).
    • In its latest policy announcement ahead of CEO Mark Zuckerberg's week on Capitol Hill, Facebook (FB -0.1%) has started a new scholarly initiative to assess social media's effect on elections.
    • Funded by a number of foundations, a group of scholars will define a research agenda and solicit research proposals with a full peer review process.
    • Facebook won't have rights to review or approve findings before publication.
    • The company says it's an important model for academic/industry partnerships, and that "the last two years have taught us that the same Facebook tools that help politicians connect with their constituents — and different communities debate the issues they care about — can also be misused to manipulate and deceive."
    • "We have made real progress since Brexit and the 2016 U.S. presidential election in fighting fake news, as well as combating foreign interference, in elections in France, Germany, Alabama and Italy," but there's much more to do, the company says, and it doesn't have all the answers.
    • Aluminum prices rose as much as 3% this morning as investors weighed the impact of U.S. sanctions on Rusal, the world’s biggest supplier of the metal outside of China and a major producer of alumina.
    • Rusal also ranks as the second biggest supplier of aluminum to the U.S. after Canada, and more than 10% of its output is sent to the U.S., ~$1B worth of metal that U.S. customers must now source from elsewhere.
    • LME aluminum for July delivery reached $2,124/metric ton before falling back, although the price remains below recent highs.
    • BMO Capital's Colin Hamilton tells Financial Times a short-term squeeze is possible in the aluminum market, which also is coping with a big outage at a key alumina plant in Brazil.
    • Morgan Stanley says higher Midwest premiums from sanctions on Rusal and possible Section 301 tariffs will benefit Alcoa.
    • Meanwhile, Russian-trade equities plunge, with Rusal falling 50% in Hong Kong as the company warned that the sanctions could trigger technical defaults on its loans.
    • The average retail gas price reached $2.70 a gallon last week to mark the highest level seen since 2015, according to data from the U.S. Energy Information Administration.
    • Economists say the higher gas prices in the U.S. are a consequence of the OPEC decision in 2016 to cut back on oil production.
    • The level of gas prices isn't considered quite high enough yet to cut significantly into spending by U.S. consumers.
    • There were hopes for a NAFTA announcement at this week's Summit of the Americas in Lima, but reports now suggest that negotiations are not advanced enough to announce a deal "in principle."
    • President Trump, his Mexican counterpart Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau are all due to attend the gathering on April 13-14.

  29. Deano In principal a good play. I did GIS in an armchair trade. Obviously you need to buy the stock, however my return is 2.1% per month, combined P/C. My present play runs till Oct 18. If I extend my play over 21 month like you with the BCS, it would give me theoretical 42% return. Your play based on one option would give you according to TOS 1034.00. My monthly return is 94.00 x 21 = 1974.00. Naturally based on 21 month and I still would hold the stock. You could sell monthly cherry calls to improve your income, however with a stock paying a div. of 4.33% the premium will be very low. Therefore for my liking Tree planting or better setting up leap BCS is better done with a stock paying little or no div.


  30.  

    The Justice Department will allow Bayer's deal to acquire Monsanto for $62.5 billion, Dow Jones reported, citing sources familiar with the matter.

    Monsanto shares rose more than 6 percent in trading Monday afternoon, reaching as high as $126.80.

    The acquisition was in limbo until the companies and the department could come to an agreement, which has now been established on principle. Bayer CEO Werner Bauman and Monsanto CEO Hugh Grant met recently with department officials, according to the report.


  31. Sold way back when some MON Jan 19 $100 puts for $11.60 – which looked like free money at the time. With this confirmation that Bayer can go ahead (the EU waved it through a long time ago) looks like it will remain free money.


  32. Winston same here my put has a value today of .46. Not bad. I have been selling put on MON for years.


  33. Yes, Winston… I had done the same.  Jan 19 $90 puts – this news locks in the profits. 


  34. Hmm, gave up a lot of the gains now – not sure what to make of this.  I guess we'll find out tomorrow.

    MON/Winston, Yodi, Learner - Good calls on that one, that's the way to play those things. 

    • Gartner forecasts that worldwide IT (XLK +1.6%) spending will hit $3.7T this year, up 6.2% from 2017.
    • Gartner research VP John-David Lovelock: “Although global IT spending is forecast to grow 6.2 percent this year, the declining U.S. dollar has caused currency tailwinds, which are the main reason for this strong growth.” 
    • Data Center Systems lead the IT market with $181B in spending in 2017 (+6.3% Y/Y), $188B expected in 2018 (+3.7%), and $190B forecasted for 2019 (+1.1%). 
    • Enterprise Software spending was $352B in 2017 (+8.8%) with $391B expected this year (+11.1%) and $424B expected in 2019 (+8.4%).
    • Devices round out the top three with $663B in 2017 (+5.1%), $706B expected in 2018 (+6.6%), and $715B expected in 2019 (+1.3%). 

     

    • Royal Dutch Shell (RDS.ARDS.B) says its greenhouse gas emissions rose last year to the highest since 2014, illustrating the challenge facing the company as it grows to energy demand while outlining a path toward a low-carbon future.
    • In its 2017 sustainability report, Shell says its direct emissions rose to 73M tons of carbon dioxide equivalent last year from 70M tons in 2016, reflecting output from refineries it acquired in the U.S. and the restart of units at a manufacturing site in Singapore.
    • Shell frequently says it is working to reduce greenhouse gas production, and plans to spend as much as $2B/year on low-carbon energy sources – the most among the super majors – and cut its carbon footprint in half by 2050.

    I love this:  What Global Warming?

     

    ICYMI: According to new research, human-caused global warming will become the main driver of most heat waves in the U.S. West by the end of the 2020s and in the Great Lakes region by the mid-2030s. https://www.climate.gov/news-features/


  35. See Jabob – Not even Tuesday and the day's gains are already wiped out.  

    Monday's are BS!  


  36. FBI raided Micheal Cohen's office – that's Trump's personal attorney!  

    That just happened, I don't think that's why we sold off.  


  37. Well, time for lunch – I love West Coast time!


  38. Phil,

    Wow from up 440 to up 35 at the close, fooled me again!! Bloody Amazing


  39. Bloody is right! 



  40. Your really have to love it when Monday becomes irrelevant before Monday is even over! I don't know what to make up of this move, but the trend is not taking a serious downturn and the numbers from Europe are not anything to rally about. And then we have CBO numbers:

    https://talkingpointsmemo.com/news/cbo-analysis-trump-tax-cuts-spending-bill-2019-deficit

    The report paints an unrelentingly bleak picture of federal deficits, which would permanently breach the $1 trillion mark in 2020 unless Congress stems the burst of red ink. The government would borrow about 19 cents of every dollar it spend this year. Deficits would grow to $1.5 trillion by 2028 — and could exceed $2 trillion if the tax cuts are fully extended and if Washington doesn’t cut spending.

    Since raising taxes is a no go, that means spending cuts! And we won't cut defense so the lower middle class will take the brunt of it have to do with less help. So less spending at Wal-Mart and Target I guess. Don't know how that's going to help growth. The GOP guys are truly clueless when it comes to economics. They keep trying the same crap over and over and get the same disastrous results!


  41. Okay, Phil, I'll join in since you're feeling lonely on a Monday (although, mind you, it's 6:30 am Tuesday here). We're variously indicting and sentencing the previous two presidents for some serious corruption (24 year sentence for Park), and President Moon is recognizing painful tragedies from the past, in particular the massacres (by Korean military with US permission, even encouragement) in Gwangju in 1981 and Jeju in 1948. Both were blamed on communists at the time, and doubtless there were some actual commies in the crowd – but it's more an admission that the politicians who favor US/Japan in the past have much to answer for. Korea since 1392 has had essentially two political parties, one group favoring China, and one group favoring Japan. The latter group currently leans toward the US as Japan's proxy, and has been the most anti-communist – and also the most corrupt, capitalist, and authoritarian. President Moon is in the more left, China-leaning camp, but is going for reconciliation, as the Japan/US people were often collaborators during the Occupation (1905 – 1945) and do not wish to admit it, while NoKo's mythology is largely built on their having been resistance fighters. Interesting times – but the plum trees, cherry trees, and mountain azalea are in bloom.


  42. Chapter 11s are up: https://wolfstreet.com/2018/04/09/chap-11-bankruptcies-spike-63-from-year-ago/

    And cardboard box indicator is down (sorry no link at hand)

    I'm keeping my hedges. 


  43. I have the strange feelings that Mueller's days are counted now! We have to be ready for a full blown constitutional crisis because the GOP will not lift a finger to condemn Trump! There will be people in the streets I think.


  44.  And the future’s just blasted back up – effing amazing! 


  45. A Fearsome Loss!


  46. Why China’s soybean tariffs matter


  47. FBI raid on Michael Cohen is even worse for Donald Trump than you think


  48. London: the money laundering capital of the world


  49. Israeli Military Probes Video of Shooting




  50. The Moon’s origins may be far different than we thought




  51. 14 years of Mark Zuckerberg saying sorry, not sorry





  52. Doing a bit of reading this morning, I did set some of my thoughts in the crystal ball and came up with the turbo armchair trade. The chair is not as comfortable as the normal armchair, as you need to work out of it just about every month, as well as you need a bit more selective in stocks.

    Here we go: PFE not as cheap as I like it at 32, but we work it with the present price of 35.45. Buy the stock (PE at 10 nothing to sneeze about) and sell the May 18 35/36 P/C for 1.60. Your monthly return is TURBO CHARGED at 3.6% per month!!! Your upper and lower range is 37.60/33.40.

    This means you could have an assignment at 35 but it only will hurt you below 33.40. Well above you will lend up with more cash than you started. But the show is over in 38 days, at which day you have A) more stock to do the next TURBO, B) you sit with handful of cash, or C) you start an new TURBO with the original stock. The only problem is you need to lift your BEHIND of your armchair at least once a month. Sorry I cannot serve it any better for you. You are only a member of a site which normally makes 20 to 25% per year. However I exclude the poker future players!!!!

    Do we actually have a percentage return on your latest Future plays? Sorry I do not play it, but prefer to smoke my cigar!


  53. DAX opened 1.3 % plus Bayer up 5% re. MON


  54. Same as above above but with PG buy stock @ 78.16 and sell the May 77.5/80 P/C for 3.07. Combined return for the month 3.32% only!!!!! Up and down protection 83.07/74.43


  55. Good morning!

    Combination of Xi indicating trade concessions and Japan extending QE for 5 years has us up again.  As usual, we’ll have to see what sticks.





  56. Lumber Hits Another Record


  57. /RB or /CL – interesting here? Think impending Syria military action might be a stay away time on either side, you agree?


  58. It's been a stay away at these levels anyway, too many cross factors to bet in between $65 and $60.


  59. Phil- thx