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Will We Hold It Wednesday – Nasdaq 7,000 Edition

Wow, what a day!  

Yesterday, in our pre-market Morning Report,  we made a call to short the Nasdaq Futures (/NQ) if they failed to hold 6,700 and fail they did as we got a massive 200-point drop which paid us $20 per point per contract for $4,000 per contract same-day gains on the Futures – you're welcome!   Our oil shorts also did nicely, racking up additional $1,500 per contract gains on the day as we pulled back from $69 to $67.50.  This is why we take Monday's off now – we can make plenty of money on Tuesdays!  

This morning we'll be looking for bounces but failing to hold the weak bounce lines will likely signal more pain ahead and, don't forget, we were already expecting a big move down on Thursday so this may be an early start to a proper 5% correction.  I ran the numbers for our Members in yesterday's Live Chat Room into the close (3:40):

2,685 to 2,620 is 65 points so 13 points is 2,633 (weak), which is right where we failed. 

24,600 to 23,800 is 800 points (wow) but I'll call it 150-point bounces to 23,950 and 24,100:

6,700 failed to 6,475 so 225 gives us 45-point bounces but call them 50 so 6,525 (weak) and 6,575 (strong)

In this case, it's worth noting that the exact line is 6,520 and that's exactly were we're failing.  When the 5% Rule is predicting things that exactly, you know the Bots are driving the market!  

1,575 to 1,545 is just 30 points so 6-point bounces to 1,551 and 1,557.  

So why are we talking about Nasdaq 7,000 this morning?  Because the Nasdaq we track in the Futures is the Nasdaq 100 (/NQ) and that's around 6,500 but the Nasdaq Composite Index, which holds about 3,000 stocks is at the very significant 7,000 line and to say that we MUST HOLD that level is a huge understatement.  This is the same Nasdaq that famously tested 5,000 in March of 2000 – right before the collapse that took us to 1,140 (down 77%) in October of 2002 – 18 months of maket hell that those who went through it will never forget.  

Now, 18 years later, we're 40% higher than the Top and 514% higher than the bottom but already having pulled back from 7,500 but one could argue that the fair value for the Nasdaq Composite, which was back at 1,300 as recently as March of 2009, is more like 5,000, not 7,000.  You can get to that number very quickly by simply applying only a 50x multiple to Amazon (AMZN), which would drop the stock 80%, Netflix (NFLX), which would cut the stock 60%, Tesla (TSLA), which would cut the stock to zero…  You get the idea – the index has some wildly overpriced companies at the same time as alternate investments – like Bonds – are becoming more attractive.

Stocks have been wildly inflated simply because money has had nowhere else to go.  Real Estate got risky, the banks pay no interest, bonds pay no interest, commodities were in a downtrend – there was nothing else to do with money but plow it into equities and the people who did so have been rewarded for the past decade but now it may be time to pay the piper as rates cycle back up and money tightens up.  

That means the DEMAND for money for housing, labor, commodites, bonds… will increase and that means the people who have CASH!!! will be able to demand more interest for their money and that puts upward pressure on rates as well.  Despite the best efforts of the Central Banksters to flood the World with money – there's still a finite amount of it and, like BitCoin, it can rise in relative value when it gets scarce and demand picks up.  

We were discussing the Dollar in Member Chat on the 17th and Grasshopper asked if I still like the Dollar (/DX) for a long play and I responed: "/DX/Grass – Same as last week, I like it at 89 with tight stops below and I'll like it again at 88 if that fails.On April 11th I had said to our Members: "Dollar tested 89, good long on /DX down there with tight stops below" and that was good for a quick run to 89.50 or gains of $500 per contract and this run just hit the $2,000 per contract mark but 91 is a good place to take a profit and we'll see what kind of legs we have.  

To some extent, we can blame the 2% rise in the Dollar for the 5% drop in the Nasdaq as the stocks are traded in Dollars and a stronger Dollar means you need less of them to buy the same stock.  Also, the rising Dollar reduces the value of overseas earnings if you collect them in Euros or Yen or whatever – that's a factor too.  Let's call the Dollar rise a contributing factor but not THE factor driving the market.  This evening we get earnings from Facebook (FB) and Apple (AAPL) reports next week (5/1) and THOSE factors are going to drive the market up or down more than anything else.  

Apple has fallen from $180 to $162 in the past week and that's 10% and AAPL is 15% of the Nasdaq so 1.5% of the Nasdaq's drop was caused by AAPL and add another 0.5% for the suppliers that were taken down in Apple's wake and now we can see why the Nasdaq fell a quick 5%.  A full correction will take the Nasdaq down another 5% or 350 more points to 6,650 and that will be roughly 6,200 on /NQ

Yesterday morning, we drew this Nasdaq 100 (NDX) chart for you, predicting a test of our 20% line at 6,480 and the low of the day was 6,464 and we closed at 6,509 so take it seriously when I tell you that, if the weak bounce line at 6,525 fails to hold today, we are very, VERY likely to be testing that 6,200 line by next week.

A miss by Apple would do the trick by itself but disappointing results from Facebook could make people question the runaway valuations of the entire tech sector as there may indeed be more risk factors than the models have been predicting.  Fortuntately the Nasdaq is our primary hedge and our Member Portfolios use the Nasdaq ultra-short (SQQQ) to protect our long positions.  Even our low-touch Money Talk Portfolio has an SQQQ hedge, one that has been performing quite well for us:

Security Description Quantity Trans
Date
Age Net
Cost
Issue Price/
Total Change
Effective
Cost
/Shr
Lower
Stop
Limit
Upper
Stop
Limit
Curr. Price/
Change Today
Gain/Loss Market
Value
1 Short Put
Short Put 2020 17-JAN 60.00 PUT [ALK @ $65.26 $0.00] -5 2/1/2018 (632) $-4,100 $8.20 $-0.95 n/a     $7.25 $0.75 $475 11.6% $-3,625
1 Bull Call Debit Spread
Long Call 2018 21-SEP 16.00 CALL [SQQQ @ $18.53 $0.00] 40 2/1/2018 (149) $12,080 $3.02 $0.98 n/a     $4.00 $0.77 $3,920 32.5% $16,000
Short Call 2018 21-SEP 23.00 CALL [SQQQ @ $18.53 $0.00] -40 2/1/2018 (149) $-9,000 $2.25 $-0.20     $2.05 - $800 8.9% $-8,200

That was our hedging idea for the $50,000 Money Talk Portfolio as we announced it on the show (1/31) and the idea was to sell puts against a stock we really liked (ALK) to pay for the SQQQ spread so that, if the market did not go down, at least we would probably offset the cost of the insurance.  As it stands, Alaska Air just had good earnings so no danger on the short put and the 40 SQQQ Sept $16 calls are $2.50 in the money so net $10,000 if they were to expire at this level but still $18,000 more upside should the Nasdaq fall further.  

Just last Thursday, we reitereated our short idea for SQQQ in the Morning Report – hedging is a vital part of our long-term investing strategy and times like these we are reminded why.  Back on 3/29, also in the Morning Report, we called the following hedge for our Short-Term Portfolio:

That's the strategy we were discussing in yesterday's Live Trading Webinar so this was a good opportunity to go over an example in detail.  With our early-round entries, we almost prefer the market takes a dip and "forces" us to build larger, lower positions as it really amplifies our returns – IF things improve down the road.  If not, the hedges are key and the hedge we added yesterday was:

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.

That should be very easy to buy this morning as SQQQ should open lower and I don't think Whirlpool (WHR) is going anywhere.  WHR is simply a stock we'd like to own if it gets cheaper (now $151) so promising to buy 400 shares for $125 (17% discount) puts $5,000 in our pocket but it could be any stock you REALLY want to buy if it gets cheaper (see our Watch List for dozens of possibilities).  

Though we haven't moved much (net) on SQQQ since 3/29, the short time-frame on the spread works to our advantage as we were "Being the House – NOT the Gambler" and selling more premium than we bought and, with 23 days until expiration, the May $16 calls are now $2.80 and the May $20 calls are just 0.85 so net $1.95 is $9,750 and the short puts are $11 ($4,400) so net $5,350 is already up $1,850 (52%) out of a potential gain of $16,500 so plenty of room left to run on this one (and Whirlpool already had earnings so we're not worried about a nasty surprise there).  

Remember, I can only tell you what the market is likely to do and how to profit from it – the rest is up to you!  

Meanwhile, bounce or not bounce, it don't mean a thing if the indexes can't swing back over those 50-day moving averages and, the longer they stay below them, the more likely it is we have a "death cross" that brings the 50 dma below the 200 dma and that, my friends, is the first step back to Nasdaq 5,000 – so let's be careful out there!  

 


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  1. Goodbye 50 DMA, hello 200 DMA!


  2. I'll ask again, but has there been a more corrupt administration in the past 100 years:

    https://splinternews.com/the-consumer-financial-protection-bureau-doesnt-want-co-1825516647

    Now, according to the Wall Street Journal, Mulvaney is considering revoking the public’s access to the Consumer Complaint Database, a web portal where Americans can file complaints about financial institutions. Mulvaney’s reasoning for this, the Wall Street Journal says, is that it “contains information that hasn’t been fully vetted by the government,” which may be the first case of anyone in the Trump administration caring to vet anything.

    What's next, defang the SEC so that their good friends can do insider trading in all impunity?


  3. Good morning, All!

    There will be no webinar today, instead we will do it tomorrow at 1pm

    I'll post the link in member chat tomorrow morning.


  4. Good morning! 

    Well, we're green so we'll see what sticks.  

    Not sure why oil took the inventory report so badly, it was a net draw – I'd stay away until after the EIA (10:30).  If anything, /RB can be played long at $2.09 with very tight stops below in hopes of hitting $2.10 ahead of inventories (but I wouldn't risk the announcement). 

    Corruption/StJ – Gee, that's tough at Tammany Hall is now more than 100 years ago so I guess you have to go with Daley or Nixon as the top rivals for corruption but collusion with Russia is a line even the Mafia wouldn't cross – Trump's gotta be the winner. 

    I'm here until 1:30 but then have to run for a meeting.  


  5. Good Morning.


  6. S & P testing the 200 dMA.


  7. Not a lot of green on my screen today, but CBI is back to $15.


  8. So much for bouncing – I just went to make a coffee and down we go!

    Meanwhile, GreenCoin now sustaining it's best rally ever.   We've had spikes before but not ones that built on each other like this:

    • Bitcoin (BTC-USD) overnight made a run at retaking the $10K level, but topped out at about $9.8K. It's currently trading hands for $9.43K, down 2.3% on the session.
    • Ether (ETH-USD) -6% to $661, Ripple (XRP-USD) -6.2% to $0.86, Bitcoin Cash (BCH-USD-3.3% to $1,360, Litecoin (LTC-USD-5.6% to $155.
    • The technicians are busy detailing the move, but cryptos surely needed a breather after 50% and more rallies for much of the sector.
    • OTCQX:GBTC no action premarket

    Go CBI – Merger back on apparently.  

    McDermott Reiterates Rejection of Subsea 7’s Non-Binding, Unsolicited Proposal


  9. Phil/GRE

    The coinexchange.io where my GRE coins are, it shows 0.00000005 BTC as the price of the GRE and the recent sell orders also show the same. But somehow coinmarketcap is showing 0.00000299 BTC as the price. That is the huge difference. Not sure how to trade on the market that shows that high price. As advised I have put in a limit order to sell few coins at 0.00000280 BTC rate but no luck so far.

    regards


  10. Speaking of coffee, /KC back to $118 this morning – this is why we prefer to play for the quick profits.   

    I don't mind going back in one long at $118 and then another at $117 and 2 more at $116.50 to average $117 for 4 – that's been a pretty reliable spot (/KCN8).  

    Stupid 4 Seasons in Canada got me hooked on Nespresso espresso capsules.  I always use my machine just to make coffee and I mostly drink tea anyway but the espresso is miles better tasting and now I keep craving them.  Not about the caffeine for me, I can drink 4 cups and go right to sleep – but I love the taste!

    Stocks extend losses as investors fret over rising interest rates

    • Stocks opened slightly lower as U.S. Treasury yields continued to climb this morning; S&P and Nasdaq -0.5%, Dow -0.6%.
    • The S&P's loss puts the index within a few points of its 200-day moving average (2,608.86).
    • The 10-year yield yesterday crossed the 3% mark for the first time in more than four years before easing back to 2.98%, but the benchmark yield is currently 4 bps above its Tuesday close at 3.02%, while the two-year yield is 3 bps higher at 2.49%, its highest level since 2008.
    • Major European bourses trade lower across the board, with Germany's DAX -1.2%, U.K.'s FTSE -0.9% and France's CAC -0.6%; in Asia, Japan's Nikkei finished -0.3% and China's Shanghai Composite closed -0.4%.
    • In U.S. earnings news, Texas Instruments +2.8% after reporting better than expected Q1 earnings and revenues, Boeing +1.2% after crushing Q1 earnings and revenue estimates and raising its full-year profit guidance, but Twitter has turned lower, now -4.8% despite reporting above-consensus Q1 earnings and revenues.
    • All S&P sectors are starting in the red, with losses led by the consumer discretionary group (-0.8%).
    • WTI crude oil +0.1% at $67.74/bbl, as investors await the government's weekly crude inventory report.
    • Gold Fields (NYSE:GFI-8.8% premarket after reporting lower production for the March quarterand warning of more difficulties at its South Deep mine in South Africa.
    • GFI says gold production for the quarter fell 1% Y/Y and 10% Q/Q to 490K oz., while output from South Deep rose 4% Y/Y but fell 41% Q/Q to 48K oz.
    • GFI says South Deep’s production was hurt by a slow production build-up after the seasonal holidays, two labor restructuring processes that occurred at the end of 2017 and during the quarter, and a change in shift arrangements which was supposed to lift productivity but appears initially to have resulted in the opposite effect.
    • As a result, GFI cuts its full-year production guidance for South Deep to 244K oz. from its earlier outlook for 321K oz.; the company forecasts overall full-year production of 2M-2.5M oz.

    German government lowers GDP growth forecast to 2.3 percent in 2018

    • The German government has revised its FY18 economic growth forecast downwards to 2.3% from 2.4%.
    • Economy Minister Peter Altmaier will present growth forecasts for 2018 and 2019 during a news conference on Wednesday. They will form the basis of new tax estimates which are due in early May.
    • Core operating earnings of $2.5B, or $3.64 per share vs. $1.9B, or $2.17 per share in the same quarter a year ago.
    • Revenue by segment: Commercial Airplanes +5%; Defense, Space & Security +13%; Global Services +8%.
    • Booked 221 net orders in Q1 and delivered 184 commercial airplanes, a 9% increase from the quarter a year ago.
    • Strong operating cash flow of $3.1B; repurchased 8.9M shares for $3B; Cash and marketable securities of $9.9B provide strong liquidity.
    • Backlog remains robust at $486B, including over 5,800 commercial aircraft.
    • Raised outlook for 2018: Core EPS of $14.30-$14.50 (vs. $13.80-$14.00); Revenues of $96B-$98B; Commercial deliveries of 810-815 planes.
    • BA +1.5% premarket
    • Q1 results

    Twitter turns deep red after cautions on earnings call

    • Twitter (NYSE:TWTR) shares gain 3.7% premarket on Q1 results that beat EPS and revenue estimates with a 21% Y/Y revenue growth. Q2 guidance expects adjusted EBITDA from $245M to $265M, EBTIDA margin from 37% to 38%, and stock-based compensation expense from $85M to $95M.
    • FY18 guidance has stock-based compensation expense from $350M to $450M and capex from $375M to $450M. 
    • Key metrics: Owned-and-operated ad revenue grew 28% on the year. DAUs grew 10% on the year and MAUs grew 3% on the year to 336M. 
    • Earnings call is scheduled for 8 AM Eastern with a webcast available here
    • Press release
    • After some solid-looking premarket gains on earnings, Twitter (NYSE:TWTR) has taken a fall (now down 6.9% in the regular session) after providing softer guidance and warning for the year ahead on its earnings call.
    • While the company still expects to be profitable, it's still working through a business recovery it started in Q3, says CEO Jack Dorsey, and competition will increase in the second half.
    • Sequential revenue growth for the rest of this year will look like 2016 because of tougher comparables, says CFO Ned Segal.
    • Shares are about 17% lower than their premarket highs.
    • Earnings call slides
    • Previously: Twitter +3.7% on Q1 beats, ad revenue growth (Apr. 25 2018)

    Delivery tests at Burger King and Popeyes

    • Restaurant Brands International (QSR -1.2%) is testing delivery with hundreds of Burger King and Popeyes restaurants in the U.S., according to execs on yesterday's earnings conference call.
    • Management called the initial results "encouraging," particularly in the later hours when check sizes are larger.
    • Burger King's Q1 same-store sales increase of 4.2% in the U.S. raised some attention in the restaurant industry yesterday.
    • Supervalu (NYSE:SVU) is getting some credit on Wall Street for its sale-leaseback deal involving eight distribution centers as it charts a course to return to EBITDA growth.
    • Guggenheim (Hold rating) says "consistent" growth for Supevalu is still six to nine months away even with the "weak" retail banners taken off the table, while Telsey (Market Perform, $18 PT) points to the "cloudy" visibility on the company's turn to retail profitability.
    • Pivotal Research asks if Supervalu's progress is enough to satisfy the lurking activist investors.
    • The bull in the group is RBC Capital (Outperform, $39 PT). The RBC team calls Supervalu very attractive at its current level, noting the under-appreciate real estate and synergies from the Unified deal.
    • Sources: Bloomberg, Reuters
    • Shares of Supervalu are up 4.45% in premarket trading to $15.26.

    GNC pushes special shareholder meeting to May 9

    • GNC Holdings (GNC -0.3%) adjourns a special meeting of shareholders until May 9 to allow additional time to solicit proxies and obtain a quorum for the meeting.
    • During the adjournment period, GNC will continue to solicit proxies from stockholders on the share issuance proposal.
    • The company notes over 92% of the proxies received to date authorized a vote in favor of the issuance of convertible preferred shares to Harbin Pharmaceutical Group Holdings Co.
    • Source: Press Release

    FirstEnergy files plan to permanently deactivate three nuclear power plants

    • FirstEnergy (NYSE:FE) subsidiary FirstEnergy Solutions says it has formally notified the Nuclear Regulatory Commission of its decision to permanently deactivate its three nuclear power plants over the next three years, citing "severe economic challenges."
    • "We are actively seeking policy solutions at the state and federal level as an alternative to retiring these plants, which we believe still have a crucial role to play in the reliability and resilience of our regional grid," says Don Moul, president of FES Generation Companies.
    • The closure of the plants – two in Ohio and one in Pennsylvania – will affect ~2,300 employees.
    • FES, its subsidiaries and FirstEnergy Nuclear Operating Company have filed for Chapter 11 bankruptcy.

    Graphics card shipment drop coming in April on crypto weakness

    • Taiwanese graphics card makers expect April shipments to drop 40% on the month due to drastically slowing demand for cryptocurrency mining, according to Digitimes sources.
    • Sources say some mining farm operators have stopped purchasing graphics cards to wait for Bitmain’s mining machines, which should launch in Q3. 
    • Gross margins for the graphics card makers are expected to drop from 50% to between 20% and 25%.   
    • The downturn could impact AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA). In March, Susquehanna analyst Christopher Rolland estimated that mining-related shares accounted for 20% of AMD sales and 10% of Nvidia’s sales. In its Q4 earnings call, AMD said the percentage of annual revenue tied to blockchain was in the mid-single digit percentage range. 
    • AMD shares are down 0.2% to $10.09.
    • Nvidia shares are down 0.5% to $220.21.  
    • MoviePass Ventures took an equity stake in the new Gotti movie starring John Travolta, according to Deadline's Anthony D'Alessandro.
    • MoviePass Ventures is the financing arm of Helios and Matheson Analytics' (NASDAQ:HMNY) MoviePass business.
    • "By utilizing the MoviePass marketing platform to drive traffic to the theater, MoviePass Ventures hopes to capture additional revenue from downstream windows, including other forms of international, domestic, and streaming distribution in addition to merchandising, music and other ancillary rights," writes D'Alessandro.
    • Shares of HMNY are up 2.07% premarket to $2.47. A new Buy rating/$12 price target from Maxim Group may be factoring in a bit.

  11. GreenCoin/Pat – That's a pretty wide spread.  Can you actually buy them for 0.0000005?  I'd certainly think the real price is somewhere between (and closer to 0.00000005) but 1/500th of a cent seems pretty cheap.  

    PSW will very happily accept Annual Membership payments in GreenCoin at that rate!  Let's set the following table:

    • Annual Premium Membership = 20M GreenCoin  (GRE) 
    • Annual Basic Membership = 10M GreenCoin 
    • Trend Watcher Annual Membership = 5M GreenCoin

    So if anyone can buy them for that price (0.00000005 BitCoins) - they'll have themselves a lovely discount and, whatever coins they have leftover will be a nice lottery ticket because if just 1M GreenCoins actually go to a penny (in a liquid manner), that's $10,000.  


  12. Good article on tankers:

    Aggressive Tanker Scrapping – Why Now?


  13. Oil up 2.2Mb, /RB up 840,000 but distillates down 2.6Mb so not too bad net but headline taking /CL and /RB lower, though we did get to $2.095 ahead of the report for a small gain.


  14. Anybody have heard of or have thoughts on Harvard Bioscience Inc (HBIO)? I know we had a couple people who had expertise in that sector on the board (although i dont think ive seen Pharma around in a while??)


  15. Phil — GRE — I have GRE at CoinExchange, as well, and the current sell order is for 6 satoshi (.00000006). Coin Market Cap is not accurate (and is some sort of average), unless you have coins at YoBit, where you can buy for 298 and sell for 270, currently. I haven't read all the posts on this, but I assume there is some reason why you can't buy on CoinExchange, move them to YoBit and sell for a huge profit. Or why, for that matter, anyone would buy on YoBit in the first place (unless it's some sort of territorial thing). Or am I missing some piece of this puzzle?


  16. Phil/ Coffee :

    If you like good coffee and enjoys small doses of highly concentrated "elixir" then you need a "real" espresso machine, perhaps there are others but my experience is with Saeco (now absorbed by Phillips kitchen division).

    My machine is a 19 bar pressure machine which I bought 12 years ago,( I use only bottled or demineralized water). My coffee costs less than 0.04 per cup  (against 0.20 of Nespresso) and is miles better

    I don´t know why are so expensive in the USA, I paid about $200 12 years ago…and is still working perfectly.

    https://www.amazon.com/dp/B01N2RHNOL?aaxitk=Qb6LTTJK0GnyRRmVIyxt9A&pd_rd_i=B01N2RHNOL&pf_rd_m=ATVPDKIKX0DER&pf_rd_p=3534726502&pd_rd_wg=rCh36&pf_rd_r=51S8RKZM8KTM9X1TS8VR&pf_rd_s=desktop-sx-top-slot&pf_rd_t=301&pd_rd_w=TfSfw&pf_rd_i=saeco+coffe+express&pd_rd_r=b0283d29-baa9-4301-bc08-e79a1c9f180e&hsa_cr_id=5685979380001


  17. HBIO/Crs – Well, they have the impressive name but, essentially, they are a penny stock with a $200M market cap that has never made a profit but they do have $100M in revenues (no growth) and low debt so, if they have something to add to the pipeline – they may be poised to become a real company.  They've already run from $3 to $6 in anticipation of making maybe $10M by next year and, if they keep their revenue stream intact, they can probably squeeze out $10M to show progress. They have a CC scheduled for 5/2 – I'd check that out before jumping in.

    GRE/Esco – I don't get these exchanges.  These days, you have to demonstrate serious interest to get listed (or you can bribe them – that's very common) – even though it's essentially just adding a line of code on their end.  As BDC noted yesterday, it's up to us (who hold them) to write to the exchanges and tell them we want to trade GRE but, even if they grant it, we still need the trading volume to support it.  That's why we're working this quarter to set up a PR/Marketing campaign for GreenCoin aimed at getting it accepted by some vendors – that's the key to taking it to the next level.  

    Real machine/Advill – No thanks.  Even as easy as it is, I can't be bothered to "make" a Nespresso for myself other than when I'm really in the mood – there's no way I'm going to sit there and grind beans, etc.  I'll splurge 0.20 on a cup that takes 30 seconds and requires no clean-up (I assume the maids take away the empties – I have no idea cool).   


  18. GRE/Yobit – their exchange has not synced the wallet in over a year. That means the wallet doesn't work with the GreenCoin network. So the coins trading on there cannot be moved off and no new coins can be deposited. Therefore, they are trading in an artificial market, limited to a fractional subset of total greencoins that previously made it onto the exchange before the wallet went into maintenance.

    The coinexchange.io market is a properly functioning, open market and is therefore the real price.

    Coinmarketcap.com uses an algo to determine the price. For a long time they dollar-average weighted both Yobit and CoinX. When yobit had high volume relative to CoinX, it would ratchet up the price, which is why on the chart there's the periodic big spikes. Recently, their algo decided that the REAL price (CoinX) is an "outlier" and so they omit this data, and therefore report ONLY the wrong, much higher, fake market price. So now you just see this perma-big spike exclusively.

    I've mentioned the mechanism of how this works a bunch of times, so hopefully people read my comments (???).

    The way to fix this, as I mentioned yesterday, is to bug Yobit in the Support tell them to "sync the GRE wallet." Tell them you want to trade and make them do their job! Phil's right, they basically add a line of code to these exchanges so it's not hard, but they need to see a community (trade volume = trade fees for them) or they aren't interested in you.

    As to why someone who is trading on yobit wouldn't just go sign up at coinx and buy the same asset for 1/60th the price, my guess is as good as yours. Perhaps it's just bots trading (likely), or geographically  one group of traders (on yobit) don't know about the other website (coinx). But who knows. It does show an interesting aspect of this whole enigmatic crypto world: this particular asset exits only, and wholly within, this particular exchange – it's truly a pure example of the Greater Fool Theory in motion.


  19. I still like GBTC at 4


  20. Phil,

    I’m with you on the Nespresso. Fantastic espresso!


  21. What crazy market action!  

    This is why we have bounce lines – to filter out the noise….


  22. Hi Phil.  Any thoughts on LMT?  Made some money with them on the last move up.  Got whacked the last two days.  I know you like them long term.  What are your thoughts on a trade?


  23. japarikh 

     i  have a nespresso.for about a year also, i still like my k cup sumatran reserve coffee and we use both machines

     

    machines


  24. Phil

     Any trades on AAPL into earnings?

     Thanks


  25. LMT/Taihu – I've been waiting for them to come down, still not in the LTP, even though I do like them long-term.  When we liked them, they were $240 so I don't really consider $328 to be a "bargain" just because they pulled back a little.  Realistically, it's a $94Bn market cap for a company that's 2 years away from making $5Bn so 20+x earnings means I'm not leaping in unless there is a much better sale than this.

    Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 47,182 45,358 39,946 40,536 47,248 51,048 51,626 51,064 53,498 +1.6%
    Operating Profit $m 4,434 4,505 5,012 4,712 5,549 5,921 6,497     +6.0%
    Net Profit $m 2,745 2,981 3,614 3,605 5,302 2,002 2,396 4,453 5,078 -6.1%
    EPS Reported $ 8.36 9.04 10.1 9.93 12.4 13.0 14.5     +9.3%
    EPS Normalised $ 8.46 9.90 10.1 10.1 12.6 13.0 14.5 15.6 18.0 +9.1%
    EPS Growth % +3.9 +17.0 +2.0 +0.3 +24.3 +3.7 +17.1 +19.5 +15.3  
    PE Ratio x           25.8 23.2 21.6 18.7  
    PEG x           1.32 1.19 1.41 0.79
    Profitability

    • Chinese refiner Sinopec (SNP -1.7%) plans to continue to cut its Saudi Arabian crude oil purchases for June and July loadings, after slashing May shipments by 40%, Reuters reports.
    • Two senior executives from SNP trading arm Unipec tell Reuters that the reductions in May followed Saudi Aramco’s decision to raise its official selling prices for Arab Light crude, which made the grade non-competitive against other crudes.
    • SNP’s request for a 40% cut in its May Saudi crude imports coincides with scheduled maintenance at its largest refinery, but the big supply cut was a surprise as Saudi Arabia only sells its oil through long-term contracts where the permitted change in the monthly contract volume is plus or minus 10%.
    • The FTC has filed a complaint against LendingClub (LC -8.9%), charging the company with misleading consumers.
    • Developing …
    • Aluminum prices are stabilizing today following three weeks of frenzied trading, with the price for three-month delivery on the LME rising $22.50/metric ton to $2,229 after several days of sharp losses.
    • The U.S. Treasury Department this week moved to loosen sanctions that forced companies around the world to stop doing business with Russian producer Rusal, ending a rally that had spiked the metal from $2K/metric ton to a seven-year high above $2,700.
    • “There is not that sense of urgency any more" following the U.S. action, Erik Bay Gundersen, head of aluminum trading at Mercuria Erik, tells Financial Times.
    • Aluminum names including Alcoa (AA +2%), Century Aluminum (CENX +3.7%) and Kaiser Aluminum (KALU +1.2%) are recouping a slice of their recent losses in today's trade.
    • ETFs: JJUFOIL
    • Airbnb (AIRB) has a new report that says the U.S. federal government could save up to $4.1B over 10 years by choosing its properties over hotels.
    • Even shifting one-quarter of the travel to Airbnb could save more than $100M per year, says Airbnb. 
    • CEO Brian Chesky will appear as the keynote speaker at the Internet Association dinner in D.C. later today.       
    • Previously: Paris takes Airbnb to court for unauthorized listings (April 12)
    • The Beijing Motor Show is creating some buzz on various fronts.
    • Volkswagen (OTCPK:VLKAY) is talking up its huge $18B tech investing target in China through JVs, while Japanese automakers (HMC, {TM]], OTCPK:NSANYOTCPK:MZDAY) are taking a different and quicker route to EV dreamland by "slapping" electric motors on popular gas models.
    • BMW (OTCPK:BMWYY) is highlighting its plan to produce an all-electric SUV in China to sell to global markets. BMW is partnering with Brilliance China Automotive (OTCPK:BCAUFOTCPK:BCAUY) on the bold venture.
    • Tesla (NASDAQ:TSLA), which is participating in the Beijing show for the first time, is drawing large crowds for the Model S, X and 3 displays, according to local media reports.
    • Mercedes-Benz (OTCPK:DDAIF) is showcasing the new Mercedes-Maybach all-electric SUV concept. A new version of the compact A-Class model is also on the floor.
    • Audi (OTCPK:AUDVFOTCPK:VLKAY) is also making news by tipping its plan for more factories under the FAW joint venture. The German brand wants to double local production.
    • Geely Automobile Holdings ([[GELYF, OTCPK:GELYY) has the new Bo Rui GE model turning heads. The next-gen Bo Rui GE is called the flagship energy model for Geely.
    • Ford (NYSE:F) is keeping it pretty simple, with the Escort and Focus in the spotlight as the automaker eyes market share gains in China.
    • General Motors (NYSE:GM) is displaying five all-electric models in Beijing, including a concept Buick SUV with promises of a 375-mile range.
    • Sources: Automotive News, Automotive World.
    • Broadcom (NASDAQ:AVGO) is up 0.7% today following an initiation at Overweight by Piper Jaffray.
    • The firm has set a $293 price target, implying 27% upside from today's higher pricing.
    • Broadcom shares are down 11.1% in 2018; they're still 3.2% higher than at this point last year.

  26. LMT/Taihu – By the way, $240-$360 is a 50% run so $120 means $24 weak retrace to $336 and strong retrace is $312 so those are the lines to watch if you want to play.  


  27. Phil- What about home Builders? 


  28. EW is the leader in TAVR in which aortic heart valves are replaced with a catheter rather than with open heart surgery (will greatly expand next 10 years) dropped 135 to 123 on earnings, last night now already back to 129. Guidance for the year was confirmed on press release. I just added to my position with a 2020 leap 100/130 BCS thats 29 dollars in the money for 11.75. It also has liquid weeklies and monthlies that have enough implied vol to make money by cherry calls to pay for the spread


  29. Homes/Dave – Tricky with rising rates, I've been waiting for HOV 2020s to come out but not until July, I think.  They are still my favorite but maybe earnings season will cause some bargains to appear.  

    EW/JMD – I'm sure it's good but they only make $500M with a $27Bn valuation.  Can I interest you in AAPL for $800M (30x more) who are dropping $55M to the bottom line (110x more) and sitting on $250Bn in cash (10x more) as a better place to put your money?

    The problem is they were selling off:

    • A market data error has led the NYSE Arca to suspend trading in eight symbols for the rest of the day, Reuters reports.
    • Those stocks include Amazon.com (AMZN -0.3%) and both classes of Alphabet (GOOG +0.7%GOOGL +0.8%), along with Booking Holdings (BKNG +0.6%). Other affected stocks include AutoZone (AZO +0.8%), Intuitive Surgical (ISRG -0.1%) and Markel (MKL -0.9%).
    • The symbols continue to trade elsewhere; a Nasdaq spokesman says stocks could be traded on Nasdaq (NDAQ +0.3%) regardless of issues at another exchange.

    Yikes:

    • Chevron (CVX -0.4%) has evacuated executives from Venezuela after two of its workers were imprisoned over a contract dispute with state-owned oil company PDVSA, Reuters reports.
    • The affected staff numbers ~30 people in the coastal city of Puerto la Cruz, according to the report, although it is unclear how many people CVX already  has removed from the country.
    • The arrested workers may face charges of treason for refusing to sign a supply contract for furnace parts drawn up by PDVSA executives, according to a report earlier this week.

    Double yikes!  

    • General Electric (GE -4.5%) plunges as Moody’s revises its outlook on the company’s ratings to negative, marking the latest blow to the battered company.
    • Moody's says its move “reflects the added headwinds to restoring GE’s credit profile as a result of the $1.5B reserve that GE recorded' related to the Justice Department investigation of possible violations by GE Capital’s discontinued mortgage business.
    • The news comes as shareholders vented their frustration with GE's poor performance at John Flannery in his first annual meeting as CEO; shares have slumped 43% since Flannery took over on Aug. 1.
    • Several unions and retiree advocates protested outside the meeting in Pittsburgh, including workers from GE’s Erie, Pa., locomotive plant and other operations in the northeast.
    • Despite a large media presence, the meeting agenda contains no major issues; the most notable is the reauthorizing of KPMG as GE's auditor as the company is facing accounting probes from federal regulators.

    • The Third Avenue Real Estate Value Fund (MUTF:TVRVX) portfolio managers this week told investors some U.S. REITs ought to consider converting to C-corps in order to maximize shareholder value over the long term.
    • In exchange for paying no federal income tax, REITs must invest at least 75% of assets in real estate, and receive 75% of income from property sources. They also must pay out at least 90% of earnings as dividends.
    • With little in the way of retained earnings, REITs are thus often forced to raise capital at inopportune times, or sell assets.
    • With a 35% corporate tax rate, it's been a nice trade-off, but at the new rate 21%, it might just make more sense to convert to a C-corp.
    • Most will end up staying put, but REITs with large redevelopment or capex needs might want to evaluate a switch, says Third Avenue. Among them: Seritage Growth (NYSE:SRG), Macerich (NYSE:MAC), Vornado (NYSE:VNO), and JBG Smith (NYSE:JBGS). A Seritage conversion, says Third Avenue, "seems like a no-brainer."
    • via David McLaughlin at Bloomberg
    • According to the complaint filed in U.S. court in California, LendingClub (LC -7.7%) has been deducting hidden fees from loan proceeds issued to borrowers. Also noted were the withdrawal of double payments, and charging customers additional fees when loans were paid off.
    • Previously: LendingClub down 9% on FTC complaint (April 25)

  30. CTL, my largest stock position, has been on a bit of a run.  Now trading at the 200dMA.


  31. See what I mean about /KC – Got our penny for the day!  

    You gotta be in it to win it, as they say…

    Well, I have to run – I'll check in this evening.  


  32. GRE — BDC — thanks for the detailed explanation. I'll try and keep up!



  33. QCOM reports after the bell.


  34. Also FB, which could be a market mover.



  35. yep, waiting for QCOM – should be messy. 


  36. Electric Vehicles Begin To Bite Into Oil Demand




  37. Donald Trump Jr’s divorce suddenly makes a lot more sense





  38. Am I still in timeout? ;-(


  39. QCOM beat by 10 cents, Rev also up YoY… stock is up 2%


  40. FB

    ~~Facebook prelim Q1 $1.69 vs $1.33 Capital IQ Consensus Estimate; revs $11.8 bln vs $11.41 bln Capital IQ Consensus Estimate.


  41. CMG massive beat, EPS $2.13 vs cons $1.58. shares up 12% AH


  42. CMG – beat on top and bottom lines…. stock at 370 AH 


  43. QCOM – Reasonable earnings beating cons on both earning and revenue outlook is conservative. ….  Just got off the conference call. They indicated the NXP deal is really being held up by the larger Tarif issue between the governments, and that the china agency requirements were not show stoppers ( my paraphrase ).  In addition – they indicated that if this falls through that why would implement a significant ( $30 to $35B ) share buyback.   On a current market cap of 74B this is significant.  They have 180 days extension currently and this could be extended again…. however they seemed to be planning to cut bait at the end of this calendar year and go to buybacks in January …. could be sooner if the acquisition becomes hopeless.  


  44. batman 

     

    Thanks qcom



  45. Thanks Batman! This should really be supportive of the price moving forward. I still think that they have something in the tank. Let's keep in mind that Windows can now run on Snapdragonh chips so that could open another tablet/ultraportable market for them with always on 4G connection.


  46. GE/Batman – Thanks!  I found this from the GE article you shared.  


  47. Stj / Qcom.   Good points relative to other opportunities.   The key for them is they must stay in the top tier phones and tablets in order to justify their product's premium.  I think this is underpriced at the moment.  The issues with aapl are not trivial and the nxp deal is important to diversify in a manner that dovetails with their core skills.  This is at the government level but rest assured aapl has the gov ear as do other major players.  However they will get through this one way or the other. Either they luck out on nxp which a higher risk now ( maybe mnuchin will strike a deal ;)  and it closes or they buy a ton of shares and maybe go private.  I'm not sure where the bottom is but I think they are worth 60 to 65 per share without nxp. 


  48. Grasshopper.  Thanks.  Ge is a long long term hold and requires patience.   I've trading in and out of it but if it get or 12 or 13 I think that would be an interesting lace to move in.  It may not happen.  





  49. After the hugs and kisses, Macron rips Trumpism



  50. Phil, 

    How do you trade a futures contract when it hovers between our calculated weak and strong bounces. eg., /RTY swings between 1551/ 1557? Just too reluctant to go long or short when in this channel! Appreciate some clarification….Thanks as always.


  51. Good morning!  

    Not much going on, Dow up 50.  

    EU Rates left unchanged, no surprise. 

    Still watching the same bounce lines.  Not looking good with strong earnings coming in and no positive movement. 

    CMG blasting almost $50 higher!   We rolled to the short June $325 calls in the LTP so we'll have to do something, maybe buy more longs.  All part of the plan:

    Holy crap, the LTP gained 4% today!  I say cash it out and let's take the rest of the year off.  We'll do a series of seminars in various tax havens around the World and invite accountants and lawyers who specialize in helping people expatriate – just in case…

    CMG/Den – In the LTP, we did sell 3 April $300 calls for $14 and they are now $37.90 so we will be rolling them to June somethings but keep in mind that, when we sold the $300s, they seemed just as safe as the ones you are thinking of selling for the same price.  It's a stock that can burn you.  Fortunately, we are up a mile on the rest of the spread to make up for it.  

    From the LTP:

    Short Put 2020 17-JAN 270.00 PUT [CMG @ $337.84 $11.24] -5 1/2/2018 (640) $-17,600 $35.20 $-13.65 n/a     $21.55 - $6,825 38.8% $-10,775
    Long Call 2020 17-JAN 300.00 CALL [CMG @ $337.84 $11.24] 10 2/14/2018 (640) $57,500 $57.50 $26.65     $84.15 - $26,650 46.3% $84,150
    Short Call 2020 17-JAN 350.00 CALL [CMG @ $337.84 $11.24] -10 2/14/2018 (640) $-41,000 $41.00 $17.20     $58.20 - $-17,200 -42.0% $-58,200
    Short Call 2018 20-APR 300.00 CALL [CMG @ $337.84 $11.24] -3 2/16/2018 (3) $-4,200 $14.00 $23.90     $37.90 $7.95 $-7,170 -170.7% $-11,370

    We're well on track for our $50,000 return on the net $5,300 credit spread so the only question is how much we'll have to give back on the short calls.  At the moment, we're down $24 on the short calls and we only need to roll the loss ($7,200) along and, as our ace in the hole, we don't mind doubling up on the longs either.  

    This is one of those times a spread went our way right away and we would have rather if it traded lower first so we could have rolled the calls down and doubled down on the position (to the tune of FU CMG, of course) while we wait for the price to begin reflecting the value again.  Unfortunately, that didn't happen and CMG went straight up so we're only up about $9,000 so far.  

    I don't think they deserve $360 and $400 would be a stretch for the year and the Jan $360 calls are $30 so that's an even(ish) roll we could make but, as I said, I'd rather just roll the $7,200 loss to the June $340s at $18 so $4 of those is $7,400 and we're still pretty well-protected.

    Looking ahead, if we get burned again, that means our longs are way in the money and we could initiate 10 more spreads like the 2020 $370 ($54)/$420 ($33) bull call spreads at $21 and, since we have just 4 short June $340s – lets say they hit $30 because we're at $370 in June.  The delta on the 10 short $350s is 0.58 so figure $18 more for them is $75 ($75,000) and we could then roll them to 20 short Sept $370 calls for $30 (the price of the $340s now) and cash the 10 long $300s for $102 (price of the $270s) so $102,000 pays for 20 $370s but we'd just buy 10 more and pocket $50,000 leaving us with 20 2020 $370 calls, 10 short 2020 $420 calls and 5 short 2020 $270 puts covered with 20 short Sept $370s and call it 25 by the time we deal with the short June $340s.  

    So then we have a $100,000 spread that's at the money and about $50K in pocket – how's that for advanced planning?  

    QCOM/Batman – They have to do the buybacks to boost the earnings by the end of the year if they can't bury a slowdown in the merger.

    GE – I don't know if anyone replayed the Money Talk show linked above but that was when we first entered GE at $16 and, at the time, I said the bottom should be $12, where we'd double down so nothing unexpected is happening here – all part of the long-term process.  It always amazes me (and Buffett) how quick people are to abandon perfectly good companies.  As Buffett recently noted, if you just put your money in the S&P, leave it alone, don't panic and reinvest the dividends, you'll do very well.  Not everything goes up but most do – and that's enough:

    Warren Buffett: Investing in the S&P 500 could make you a fortune …

    Futures/Jasu – I tray not to trade a contract that's between the lines, that's why I have such a good winning percentage!  I only make bets when I'm 80% sure and then I'm only wrong about half the time – the rest is simply about good money management so your winners outgain your losers.  


  52. Phil / CMG – I have the following position….  CMG at 388

    Long 10X Jan '20 300 Call ( 58)

    Short 10X Jan '20 350 Call (40)  

    Can you suggest an adjustment here?


  53. Phil / CMG – I'm also open to a new position on this one as I have two portfolios and my smaller one does not have a position at the moment thanks,….


  54. LB – I wonder if this is finding a floor at 35 …. earnings are mid May….