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

Click here to see some testimonials from our members!

Thrilling Thursday – Quick Gains Made Shorting Oil and Gasoline as OPEC Loses Control

Wheeee! 

As you can see from the chart, we made just under $2,500 shorting Gasoline (/RB) futures into yesterday's run-up after inventories.  We also picked up $1,560 on our oil shorts so all is very, very well this morning despite a slow week trading futures (it's generally been too crazy to risk). 

Things are still risky but we had a net build in EIA inventories yesterday so the Fundamentals were bearish and oil spiked up on Syria fears but Syria themselves are not big suppliers of oil and the real news is OPEC, for the 5th time this year, being forced to admit the rest of the World is simply filling the gap of their production cuts (now 1.8Mb/d) with overall Global Supply UP 180,000 barrels a day led by the US adding 1.5Mb/d – mainly from shale production.  

There's simply no Fundamental reason for oil to be over $65 so, yesterday, when we got that silly spike up on oil after the weak Inventory Report, I said to our Members:

Wow, that was a crazy reverse on /CL.  I'm back short at $67.45 with a stop over $67.50 – I dare them!  /RB too at $2.075 – ridiculous!  

As you can see, $67.45 turned out to be the dead to – perhaps BECAUSE we called it but we'll take the win either way and we'll certainly take the $1,560 profit!  This morning we stopped out back over $66.50 but we're happy to go back short on /CL below that line with tight stops above.   The Dollar is back over $89.50 and, as long as we hold that line – I'll be liking the oil short but we should be thrilled to take $500/contract gains at $66 as it's still almost the weekend – which is a very dangerous time to be shorting oil.

If you are Futures-challenged and want to make a longer-term play against oil prices, the Ultra-Short ETF (SCO) is down at $18.78 and we can play to get out before the May Holiday weekend with the May (18th) $18 ($1.70)/$20 (0.85) bull call spread at 0.85 on the $2 spread so upside potential of $1.15 (135%) but I'd be thrilled to take a quick 0.40 (47%) off the table, as that's a very nice short-term gain.

Otherwise, as usual, the Futures are up and, as usual, we're waiting tosee if they can make our Strong Bounce Lines before we begin chugging the Kool-Aid and joining the buying frenzy.  Since Tuesday, we've gained a single green box on the Russell (now 1,555) but still waiting for recovery signals from the S&P, Nasdaq and NYSE and, since the levels need to hold for a full day, at least – nothing they do today really matters anyway:

  • 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)

Don't forget, we expect strong bank earnings tomorrow and if that can't get us over the hump, nothing will.  Bed Bath and Beyond (BBBY) had good earnings but bad guidance and they are getting hit hard this morning so it would be foolish to rush back into the market if other retailers begin warning as well.

It's a good time to be patient. 

 


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



Comments (reverse order)


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

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

    Click here to see some testimonials from our members!



  1. I guess not so rare:

    https://news.slashdot.org/story/18/04/11/2037250/japan-team-maps-semi-infinite-trove-of-rare-earth-elements

    Japanese researchers have mapped vast reserves of rare earth elements in deep-sea mud, enough to feed global demand on a "semi-infinite basis," according to a new study. The deposit, found within Japan's exclusive economic zone waters, contains more than 16 million tons of the elements needed to build high-tech products ranging from mobile phones to electric vehicles, according to the study, released Tuesday in the journal Scientific Reports.

    I am guessing that we have a lot of untapped resources under the sea, getting to it might be problematic though.


  2. Another attack on the poor:

    https://talkingpointsmemo.com/news/trump-admin-considers-drug-testing-requirement-food-stamp-recipients

    The Trump administration is considering a plan that would allow states to require certain food stamp recipients to undergo drug testing, handing a win to conservatives who’ve long sought ways to curb the safety net program.

    Did we perform drug testing on bankers when we bailed them out with more money that was ever spent on food stamps? Or executives at the car companies, the airlines and whoever receives tax credits? Gimme a break.


  3. CVS/WBA – Just another interesting tidbit regarding prescriptions, I use an app that is becoming very popular called GoodRX.  Recently, I went into CVS and they were charging me approx. $110 with my insurance card.  I pulled up the app on my phone and typed in the drug, quantity, etc and my cost was $50.  I literally took $60 off the bottom line from CVS.  The employees there don't really like repackaging and entering all the information again with the new prescription, but my thought is too bad.  I saved a lot of money. 


  4. Oil/Phil- suddenly spike on RB at 2.05, got out all my 3 contracts for crude and RB. 3k. Cheers phil.


  5. Good Morning.








  6. In case it affects anyone, ETN Delisting.  I have seen JO in discussions before.

    https://www.businesswire.com/news/home/20180111006198/en/Barclays-Announces-Launch-15-Commodity-ETNs-Delisting


  7. Thanks Thatway – looks like JO would trade OTC after the delisting so not much liquidity. I guess it's going to be replaced by BJO.





  8. Ring Of Fire: Tremors and Eruptions in the U.S.-China Trade War


  9. Good Riddance, Mr. Speaker



  10. How government policies in India and China are widening income inequality


  11. Signs of a Political Armageddon


  12. Why You Should Care About The LIBOR Crisis


  13. CBI - Very strong.


  14. FU LB!!!!!!


  15. Phil / ABX – thoughts on latest 1Q numbers?

     Barrick reports preliminary 1Q production results, showing gold output fell 20% to 1.05M ounces from the year earlier period. Preliminary sales for the quarter are $1.07M. The decline reflects Barrick's sale of a 50% stake in its Veladero mine in Argentina and reduced production at its African unit Acacia, where production has slowed in the wake of a dispute with Tanzania over taxes and other matters. The company reports full 1Q results April 23. (jacquie.mcnish@wsj.com)





  16. It could be that JP got a tap on the shoulder, a whisper in his ear and he went to his keyboard at the Fed and hit ctrl-p


  17. ~~ – Markets pushing toward HoD as Senator John Cornyn said that President Trump indicated NAFTA deal is getting close in private meeting yesterday.  


  18. GoodRX/tshroy- interesting and thanks for the app suggestion. Sounds like these business are being squeezed from all sides.


  19. Good morning!

    I have to be out of here at 11:30, I'm speaking on a panel so I can't skip it (I think they did that to me on purpose).   I'm pretty sure my whole day will be shot after that but more or less normal tomorrow though I'll leave by noon (3pm, EST) to head back to Vancouver on the way home (Sat).

    Big Chart – Nas and RUT over 50 dmas again, Dow testing at  24,455, S&P testing at 2,669 so that's the tale of the tape today. 

    Rares/StJ – That's great news, especially as China can't hold the rest of the World hostage.

    Drug testing/StJ – Two major problems with that are the testing companies are big campaign donors and you are talking about spending Billions on testing INSTEAD of on the food and, even worse, the tests are inaccurate and put up a lot of false positives but the solution for that is the victim has to pay for another test and often needs a lawyer or legal advice to go through the appeal process which, of course, the poor people can't afford.  

    Even if the mother smokes pot – do we starve the children?  Trump and the GOP say YES!  

    MVEN up to $1.55.  I think at this point I know too much to talk about them but PSW Investments will be working with them. 

    By the way, people who were interested in investing in PSW Investments or the Hedge Fund should contact Greg @ philstockworld dot com ASAP as it's already halfway through April and we'll be closing this round at the end of June so just over 60 days to complete paperwork and transfer funds!  

    GoodRX/Tshroyer – That sounds great.  I wonder if CVS or the drug company lose the $60?

    Oil/Dave – Good exit and I hope back in with a good entry on /CL now!

    If Brent fails $71.50 then our US shorts are in good shape.

    JO/That – Yes, we need to be out of all those.  We need to switch to BJO:

    Image result for blowjob animal house animated gif

    I wonder, to what extent, the unwinding of JO is depressing the Coffee Futures?

    CBI/Albo – Nice move up today!

    ABX/Batman – Well, production isn't earnings and they sold off a lot of mines so of course production is down.  I think that stuff is baked in but they are down to $12.88 on the news but I think there were going to retrace that line anyway after a nice $2 run (so weak retrace is -0.40, which we hope will hold).

    NAFTA/Albo – So not ending NAFTA is super-bullish?  Markets be crazy! 


  20. Phil. ABX – Thanks for your thoughts….. I lightened up on the stock this AM at 12.91 for a good gain…. will wait for a pull back further below to buy any more… meanwhile the spreads will stay in place.


  21. Phil/HON

    Scottmi asked for your thoughts on HON yesterday.  I have some interest too.

    scottmi 
    April 11th, 2018 at 1:52 pm | Permalink | Tweet thisIgnore this user

    HON/Phil – Honeywell has been on a LONG time watchlist for me. finally has had a big of a pause/pullback. Can't know if is going to continue down or not. Is there a place you see value/entry for them? 


  22. BBBY/Phil- will you be burying BBBY? although it did not too bad earnings… probably just needs some adjustments? move the call further can tighten the spreads?


  23. CLDR up big on their investor day. 

    Also IPO of ZUO, which is up, big points to CLDR's relative value in comparison.


  24. Opened a position in BBBY with the sale of Jan 2019 15 puts at $1.50.


  25. Phil, Yodi

    In this time of recommended patience, I would like your thoughts on  a Yodi-type armchair trade (barstool trade?).

    Buy a bcs in the money on a stock like BAC (JPM) with reasonably good fundamentals and macro outlook. With BAC now@30.42; buy bcs Jan 25/30 for 3.40 . Return thru Jan of 47% in 9  mths. More conservatively, buy the Jan 22/27 for 4.00 for a 25% return thru Jan).

    Possible risk control strategy would be to buy back the long 25 call (now 6.50) if BAC closes below support at 29 and watch the short 30 calls (now 3.10) for a reversal vs just taking the 3.40 loss if BAC – and the world – completely crashes.

    Thanks

         


  26. albo-I would be cautious on any bbby puts. I played  a put yesterday and just  waiting to close for a 200% profit. Same store sale down overall and might keep going down.


  27. HON/DC, Scott – $146 is $109Bn for HON and they usually make $5Bn so p/e over 20 is not that cheap.  Last year they took a $3Bn tax hit (more than usual) for repatriating money but now they have the money and the real question is – will they do anything useful with it?   Overall, sales and earnings have gone nowhere for the past few years so hardly exciting at this multiple.  HON makes half their money on Aircraft and Auto Parts and 1/3 on HVAC, Safety and Security Systems so it's a play on Commercial Investment and the best thing to do is watch Airline/Auto earnings and guidance and Commercial Real Estate to see if those markets are heating or cooling (get it?).  

    Just because idiots were buying them for $165 in Jan doesn't mean they are now worth $150 – I don't see them as a particularly good entry nor do I think they have great growth prospects and there's a serious danger the do a big acquisition and overpay for another company.  They may do a buyback or special dividend that will pop the stock but, other than that, I don't see a big catalyst.

    Check out CSL, smaller ($6Bn) and cheaper (making $360M) and more room to grow:

    Meanwhile, Dow up almost 300 again – so anything is possible…

    BBBy/Dave – Well, in the OOP, we have a $10,000 allocation block and BBBY looks like this:

    Long Call 2020 17-JAN 17.50 CALL [BBBY @ $17.54 $-3.96] 10 1/8/2018 (645) $6,450 $6.45 $-2.68 n/a     $3.78 - $-2,675 -41.5% $3,775
    Short Call 2020 17-JAN 25.00 CALL [BBBY @ $17.54 $-3.96] -10 1/9/2018 (645) $-3,500 $3.50 $-1.76     $1.75 - $1,755 50.1% $-1,745
    Short Put 2020 17-JAN 17.50 PUT [BBBY @ $17.54 $-3.96] -5 1/8/2018 (645) $-1,400 $2.80 $0.98     $3.78 $1.03 $-488 -34.8% $-1,888

    So we're down about $1,500 and we're committed to owning 500 shares at $17.50 ($8,750) so we don't want to do much on the short put side but our net entry is $14.80, so not worried yet and 2021s will be out before you know it!

    Of course we'll wait until next week but the short $25 calls can be bought back for $1.70  ($1,700) and the $17.50 calls at $3.70 ($3,700) can be rolled down to the $12.50 calls at $6.40 ($6,400) and we can cover with the $20 calls at $2.90 ($2,900).  That would put us in the $7,500 spread for $1,500 more plus the $1,550 we spent at first is $3,050 but now $5,000 in the money on the adjusted spread.  

    While some people sit on the sidelines cursing trades out – others make smart adjustments and still double their money after a 20% drop! 

    Also, with the new spread, when BBBY recovers a bit, we can sell 5 short calls for 0.50 (currently the Aug $22.50s are 0.50) and Aug is 127 of 645 days so it may not seem like much but it's another $1,000 we can pick up while we wait, which is 33% more back on our cash.

    BAC/8800 – Nothing wrong with that.  Trades like that are fine if you leave yourself room to adjust if things go wrong (see BBBY above).  


  28. the rain starts in November and adult will be in full control again at that time so agreed on the optimism


  29. Thanks, Pirate.   I may be too early, but think it's worth  shot to own the stock at $13.50.  Nice trade on your puts.


  30. all of these fu falling knives…

    will there ever be a pick that doesn't need to be adjusted after 20, 40, 60, 80 percent drops…

    rather sit on the sidelines and not have to "hope" for a miracle that these POS companies ever recover.

    so happy i do not own half of these dogs…


  31. Phil/HON

    Thank you.


  32. albo-just learned to be cautious especially with falling knives. wonder about ge-earnings coming the 20th. Only have est of .12? How can they miss that though again the puts are heavy. Have hedged so really have learned from Phil about his success in trades, but like some short term gains too.


  33. Waiting for MVEN to hit 1.00. There were 0 trades 10 minutes ago now only 100? Up to 1.57 now. Can't really understand what they are. Just says digital company. Wonder if the do the algorithm trading? If Phil's involved probably worth a shot.


  34. 8800 BAC and JPM are positive no candidates for armchair trades. The stock should be paying div of over 3%. None does. Even WFC just manage 2.96, is very weak. I have traded BAC in the 20th and is for my feelings to high up same applies for JPM. I did sell the 2020 puts 45 of WFC, which paid off very well.

    Establishing leap BCS (tree planting) on both stocks you mentioned are too high up in the channel for my liking.


  35. Yodi,

    Understood. Thanks for the feedback. Agree that both banks are not candidates for armchairs. My thinking is that, because of their fundamental strength (JPM>BAC) coupled with the positive environment for bank stocks, the in-the-money bcs would offer a favorable risk/reward, especially when one can sell the long calls if price breaks down below support (29 for BAC and 108 for JPM). One guy's opinion.


  36. Drug testing - there are literally tens of thousands of rape kits that have not been completed – but yes, lets test for drugs so people can buy food

    http://www.endthebacklog.org/backlog-what-it/defining-rape-kit-backlog


  37. Adjustments/Jabob – Since we made 1/4 entries with 80% cash on the sidelines waiting to deploy when the market corrected back to 2,400 – I certainly hope we don't have too many picks that don't need to be adjusted 3 moths into a 2-year cycle.  If that were the case, we'd probably be paying way too much for our positions but feel free to continue to refuse to understand our process and complain about it constantly – it's so uplifting! 

    You're welcome DC. 

    MVEN/Pirate – They might as they will have to raise cash eventually.  As I've said, we have been invited to contribute PSW content as part of their financial platform.  I'm at a conference in Whistler now where they have about 200 publishers joining them to form a coalition and drive traffic to their site.  We (PSW Investments) are being compensated with stock (more dilution) as well as the presumed opportunity to reach millions of new readers.  

    Jim Heckman, the CEO was a founder of HULU and several other things that did very well including Rivals.com, which he sold to Yahoo for Mega-Bucks.  Maven is a non-sports version of Rivals to some extent.

    Not An Ad Network: What The Heck Is James Heckman Up To With …

    Anyway, I don't like to over-talk penny stocks.  They may fail to execute but we're signing up and giving it a shot. 

    Speaking of which – I have to go to the Seminar now – later all!


  38. Talking about armchair trades. I do have D on the radar. The stock has a PE of 13.5% and pays a div. of 5.2 %. However I am not yet prepared to buy the stock, as I think it might be still going lower. So I put my foot in the door and sell a put vertical May 18 60/62.5 put for a credit of .55 cents. This will give you some money in the bag by waiting. This is a foreplay to purchase the stock, on top with a very limited risk. Your max loss is 195.00 with a downside protection to 61.95. If not assigned the play gives you a return of 28% in 36 days.


  39. no complaints… 

    and i understand the process…

    just waiting to see IF it works with the FU stocks like you HOPE it will.

    GNC, FTR, HMNY, HBI, GE, TEVA, LB, JO, and some of the other FU stocks that have dropped over 50% since they were "values" tend to make me a little ornery  while I wait, I guess… ;-)


  40. State pension funding hits record shortfall, report finds


  41. OPEC sees oil markets tighten further even as U.S. shale booms




  42. The left is getting more active on health care


  43. /CL- anyone taking new shorts?


  44. IQ

    Scottmi – Have you taken a look at the recent IPO IQ, which is referred to as the Netflix of China ?


  45. I thought that the TPP was such a bad deal… Now we want in again?


  46. Very quiet on this board today. XLE has been going mostly sidewise only a shorter up tick today. So why we are waiting for the next TWEET, I am experimenting with an iron condor on this stock.

    April 27 sell Call 71/72 and sell put 69/68 for a credit of .62 upper and lower protection 71.62/68.38 max loss 38.


  47. When does the rinse cycle start?  I put 2 quarters in.


  48. Good up turn on my ADS trade of yesterday


  49. Waiting to hear who wins trumptards Shoots and Ladder game.


  50. AVGO 12B share buyback. +4.4% AH


  51. It's getting warmer for Trump:

    https://talkingpointsmemo.com/livewire/stormy-daniels-lawyer-cohen-told-court-he-would-plead-the-fifth

    The President’s personal lawyer announced his intention to potentially plead the Fifth Amendment in a defamation suit involving the President’s alleged affair with a porn star, the porn star’s lawyer said Thursday.

    Didn't he say that anyone who pleads the 5th is guilty?

    "The mob takes the Fifth Amendment," Trump said at a campaign event in Iowa later that month. "If you're innocent, why are you taking the Fifth Amendment?"

    Hmmmm, the mob!


  52. The Maven.net could be an interesting concept, especially as Seeking Alpha's Most Popular Investment Expert has a presence there :)


  53. This morning some different play TWTR. Here I am looking at an iron condor. The stock was under discussion during this week, if I am correct. My play the Apr 20th 31/32 caller and 28/29 putter.

    TOS shows a credit of .40. Breakeven 27.60/31.40. Max loss 60.00 and a PM margin requ. of 120.  33% over 7 days!!!! However if you set up the play individual it shows a credit of .52. So I would start at least with .52.

    Here you find a controlled risk, by knowing what your max loss is.

    This morning some different play TWTR. Here I am looking at an iron condor. The stock was under discussion during this week, if I am correct. My play the Apr 20th 31/32 caller and 28/29 putter.

    TOS shows a credit of .40. Breakeven 27.60/31.40. Max loss 60.00 and a PM margin requ. of 120.  33% over 7 days!!!! However if you set up the play individual it shows a credit of .52. So I would start at least with .52.

    Here you find a controlled risk, by knowing what your max loss is.


  54. Morning all,

    Crude/Phil- Crude at 67.5! grabbing any shorts? I tried for to fill 2 at 67.47




  55. TSLA~~Tesla: Elon Musk in tweet says 'Tesla will be profitable & cash flow+ in Q3 & Q4' .

    Must be time for another stock offering.


  56. IQ/albo – no, not at all, first I've heard of them! 


  57. HON/Phil (and dclark) thanks. Looks too pricey to me still, too. (As it has forever it seems.)






  58. How The Tax Cut Scam Works


  59. Trump Wants Back Into the TPP. Not So Fast, Say Members.