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Thursday Thoughts – The Trade War We Choose to Ignore

Image result for tariffs chartAnother $16Bn in tariffs

Or, should I say, another $4Bn in taxes against the American Consumer placed by Trump causes another $4Bn of Import Duties to be place on US goods we are trying to sell to China.  That's the real impact of the announced "$16Bn in tariffs" that Trump gleefully announced on Tuesday, which was immediately followed by an exact retailiation by China yesterday.   

“This is very unreasonable,” China's Ministry of Commerce said, “In order to defend China’s rightful interests and the multilateral trade system, China has to retaliate as necessary.”

This brings our cross-tariffs with China up to $50Bn and we already know there were painful effects from the first $20Bn so this is 150% more pain for US companies and 150% more taxes on US Consumers but still a drop in the bucket compared to the $500Bn in taxes Trump has threatened to place on US Consumers who buy Chinese goods.  That's all a tariff is, it's a tax that punishes consumers for buying certain items from certain countries – the behavior they are trying to change is yours – not China's!  

Now, who do you think will be more successful in getting their people to change their habits?  If it were Japan, we would have already lost this trade war as the Japanese people tend to obey Government edicts but Chinese people are a bit more like Americans, making independent choices though, on the whole, they tend not to fight the Government unless it's important while Americans generally ignore the Government and do whatever they want.

Image result for china rare earth metals 2017We're not there yet but if the Chinese Government declares it "unpatriotic" to buy American goods – our exports to China can ground to a very quick halt. China can also hit us where it hurts on Rare Earth Materials, which China makes 90% of for the Planet Earth, not because they are actually rare but because producing them causes levels of pollution that most countries find unacceptable.  

Now, you can say that Trump can lift restrictions on strip-mining and lift all enviromental protections "for the sake of the economy" and we can begin producing our own Rare Earth Materials but that would take years just to begin to take up the slack and, in that time, our entire Tech Industry would collapse.  Or China can just impose export tariffs on the materials and drive consumer prices through the roof.  As with many trade items, Rare Earths are somehting we WANTED China to produce as we EXPORTED our pollution to China – now Trump wants it back!

China has OPEC-like power to control rare earths and you simply can't make modern electronics without them – they have simply chosen not to use that power before – other than setting higher prices once in a while.  Trump has opened the door to an all-out war with China that can quickly escalate in very ugly ways that can destabilize the Global Economy.  Yet the market doesn't seem very concerned.  

While still elevated, the Volatility Index (VIX), at 12.35 is about as complacent as it's ever been – down from a brief spike into the 20s earlier in the year.  We've been discussing some long plays on VXX and VIX futures in our Member Chat Room but no portfolio positions yet as we've been burned before betting the VIX won't stay below 12 but above 10 is virtually a sure thing – so that's what we're looking to play as it drives lower. 

The trade war is real but the market is not pricing it in.  Trump gave the whole $12.5Bn the Government is collecting from the first $50Bn in tariffs/taxes Trump imposed on US Consumers to the famers, so that their votes would not be harmed by his idiotic policies.  So you pay $12.5Bn more for Chinese products and that money goes to the farmers so they don't have to lower the price of the food you eat – isn't that great?  

Perhaps that's why Core PPI is up 0.3%, which is a 3.6% annual pace meaning that 10-year notes, even at 3%, are nowhere near keeping up with inflation.  China's PPI is up 4.6%, so the Trade Wars are biting on both ends yet the traders keep trading like this party ain't never gonna stop….   

Even though the S&P's price/earnings ratio has dropped to 18.8 times earnings thanks to Trump's policy of not taxing the rich while sticking it to the poor, that's still in the 88th percentile of all-time high ratios and, according to the Wall Street Journal, the median stock's p/e ratio is now in the 97th percentile – that's a measure you get when you remove the spectacular earnings of AAPL and a few others from the mix!  

Money managers are using the weakness among tech companies to urge clients to trim tech-heavy portfolios and put that money into the market’s cheaper pockets. Wells Fargo Investment Institute, for instance, cut its view of tech stocks to “neutral” for the second half of the year and has a more favorable view on financial stocks. Inflows into tech-focused funds have slowed from earlier this year, and popular vehicles, like the Technology Select Sector SPDR fund, have been suffering redemptions some weeks. Investor outflows totaled nearly $300M for the tech fund in the past week, according to FactSet.

Some investors have been plowing that money into other asset classes, such as short-term government bonds, whose yields have jumped to their widest margin against the S&P 500’s dividend yield in years (something we discussed in detail in yesterday's Live Trading Webinar). Others have been opting for more-defensive footing among equities, putting money into shares of financial firms, health-care companies and utilities, where valuations are more attractive.

Meanwhile, Musk is being investigated and Tesla (TSLA) is down about $365 so yesterday's short play is looking good already.  It's very hard to figure out which way the indexes are heading but we are taling the opportunity to scoop up Gasoline Futures (/RB) as they test the $2.01 line this morning in hopes we get a nice 0.10 pop ($4,200 per contract) like we did into the holiday weekend last August.  That was also a trade idea from yesterday's Live Trading Webinar.

 


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  1. Good Morning, All. 

    I'm sorry to have to report that yesterday's webinar recording had an error and did not save. Unfortunately, there will be no replay today.



  2. ~~CTL -Looking better and better, IMHO.

    CenturyLink Reports Second Quarter 2018 Results
    Second Quarter Highlights
    - Raised full year 2018 outlook for Adjusted EBITDA to $9.00 to $9.15 billion from $8.75 to $8.95 billion, and Free Cash Flow to $3.60 to $3.80 billion from $3.15 to $3.35 billion
    - Achieved Net Income of $292 million
    - Generated Adjusted EBITDA of $2.27 billion, excluding integration-related expenses of $160 million
    - Adjusted EBITDA margin, excluding such items, increased to 38.5% from 35.7% in Pro Forma Second Quarter 2017
    - Generated Cash Flow from Operating Activities of $1.58 billion
    - Grew Free Cash Flow to $919 million, excluding cash paid for integration-related expenses and special items of $108 million.
    - Exited second quarter 2018 with $675 million of annualized run-rate Adjusted EBITDA synergies related to the acquisition of Level 3.

    Still yielding over 11%.
     


  3. I am a believer Albo!


  4. Good Morning.


  5. Albo/CTL,

    what setup do you have for this one?

    regards


  6. I am in CTL Albo — thanks to your commentary.  


  7. Waited until it was gone from the news to release this damning report:

    https://talkingpointsmemo.com/news/puerto-rico-higher-hurricane-maria-death-toll

    Puerto Rico has conceded that Hurricane Maria killed more than 1,400 people on the island last year and not just the 64 in the official death toll.

    That's Katrina level of damage there but yet no one makes a big deal because it's Puerto Rico!


  8. It's a f*cking shame to treat fellow Americans like that…. :(


  9. PR/ there was bad – if not corrupt – decision making at state-equivalent and federal.  Most US utilities have personnel sharing plan for emergencies. For instance, power to my mom's condo in Florida (Hurricane Irma) was actually restored by guys from West Virginia 10 days after.  Puerto Rico wasn't part of this consortium; Governor didn't seem to know about it a month later; neither did Dept. of Interior which tried to give dirty contract to friend, instead of setting something like this up.


  10. Pat_swap – Not sure what you mean by setup, but I am long a ton of stock and a ton of calls, and short a bunch of puts.  I've said for some time that if CTL could demonstrate that their dividend is sustainable,that the stock would most likely trade to yield 8-9% rather than 11-12%.  It seems that it's now happening now.

    GrassHopper – Glad you're in.


  11. Albo/CTL

    Love it!  One of my largest holdings.


  12. Dclark – It's very rare that you get to lock in an 11-12% yield, perhaps for years to come.  Don't know for sure that's happening here but it looks like it could be.


  13. Bad and Corrupt….Without a doubt. It is as if PR is a third world nation….

     

    Perhaps a preview of what's in store for the rest of US….. :(


  14. Phil/Albo/CTL

    If I want to enter it now what would be a good option setup. Long shares is also fine.

    regards.


  15. Phil TSLA an other week or so and your promise will come true below 300. Interesting to see. These stock buyers are just as crazy as the Trump believers. Surely get me.


  16. VIX now below 11 – no one is worried! We are imposing new sanctions on Russia, increasing the trade war with China, N. Korea is not listening to us, the federal deficit will be $1T every year as far as we can see, our president is in legal jeopardy and 1/2 of Congress doesn't care about the bottom 90%. 

    Other than that, everything is awesome!


  17. Pat_swap – Phil would be the best person to answer that.

    But I think the Jan 2020 $22 or $23 calls look cheap.  An 8% yield would imply a $27 stock price.


  18. Good morning!

    Sorry, was trying to get dropbox working – I THINK I have a file of the webinar to send to Greg so I took a stab at sending it.  Have no idea if I did it right or not.

    Big Chart – NYSE tested and held the must hold for the first time, we have to take this new leg of the rally seriously.

    Still, have to short /NQ at 7,500 – just for fun.

    CTL/Albo – Also breaking out of it's range:

    Puerto Rico/StJ – Unbelievable what they let happen to those people.

    Peurto Rico/Rexx, 1020 – Yes, that's the official Fox spin on it – that it wasn't our Government's total lack of response but what is effectively a state government's corruption that caused the post-hurricane humanitarian disaster.  Bush ran the same playbook on New Orleans after Katrina – what can the poor Federal Government do with their Federal Emergency Management Agency in the face of a Governor who made some bad decisions?  It's just hopeless so don't blame the President, who personally gave people paper towels to clean up the flood damage…

    Image result for trump paper towels animated gif

    Ingrates! 

    Administration of Trump-bashing Puerto Rican mayor reportedly facing …

    That's the report from Fox News that got repeated endlessly by Conservative media except that it's FAKE NEWS that is not at all true.  Though it was debunked a day later – that doesn't stop Conservative idiots form continuing to repeat it a month later as if it's a fact.  

    Fact Check: Is Mayor Carmen Yulín Cruz of San Juan Facing Charges …

    Can you imagine that there are people who would actually hear a story like that on a Conservative Media Outlet and it wouldn't even occur to them that something like that would be huge news that everyone would be talking about – even outside their little Conservative bubble?  It's true though – there are really people who are that easy to fool…

    Sadly, we were all fooled again with the Trump/GOP disaster that was voted in less than 2 years ago and look what is already happening to our country…  As they say, you get the Government you deserve and we are simply too stupid to learn.

    CTL/Pat – As a new play, I'd look at selling 20 CTL 2020 $20 puts for $3.30 ($6,600) and, assuming, you don't mind getting assigned $40,000 worth for a long-term play, that's as much as the $2.16 dividend but you get it now to help pay for 2,000 shares of the stock at $20.45 and 20 short 2020 $17 calls at $3.70 ($7.400) so you are netting into 2,000 shares for net $13.45  and you get your dividends ($3.24) so net net $10.23 ($20,460) and called away at $17 ($34,000) would be a $6.77 (66%) profit in 18 months and the break-even is around $13.25 – miles below the current price.


  19. Mike Pence announces the Space Force and the markets turn sharply lower.  Ka-ching on /NQ shorts! 


  20. TSLA/Phil- never got filled for the STP tesla play ytd, was wondering if it's still good for a new trade today?


  21. Phil, can you give us your thoughts on ROKU?  Big gain today after an "earnings" beat.  Interesting business model.  


  22. Dave TSLA is dropping like a stone I think you are a little bit late. I am looking for 300 already!!!!


  23. yodi- yess, sadly my order never got filled…. the options were just all over the place


  24. Roku is possibly short covering today/


  25. And quickly recovering.  

    TSLA/Dave – Wow, a little late on that one.  Not sure why, the net was the same yesterday overall.  As a new play on the same idea, I still see:

    • Sell 2 TSLA Jan $420 calls for $12.50 ($25,000)
    • Buy 3 TSLA Jan $450 puts for $103 ($30,900)
    • Sell 3 TSLA Jan $420 puts for $80 ($24,000) 

    Those are all the last sale prices and they net out at $1,900 – essentially still the same entry we had and the upside potential is $9,000 for a $7,100 profit – nothing wrong with that.

    If you are not getting filled, it's probably because you are asking for the net on the spread rather than filling out the individual legs, where you could put in offers for $1 or more BETTER on each leg and likely fill them as TSLA gyrates up and down. 

    Keep in mind this is a dangerous play that can easily blow up on you – especially in margin requirement so don't mess around with it unless you can laugh off the short $420s doubling or tripling against you!  

    ROKU/Palotay – Well they had a profit of $526M, which seems like a lot and then, excluding A LOT of items that impacted that profit, they broke even but revenues were just $156.8M so WTF?  I have not studied up on these guys as I don't even like NFLX and ROKU is priced at $6Bn at $58 but it's nothing compared to NFLX at $153Bn and they only make $550M on $12Bn in sales so if ROKU can make $526M on $156M in sales….  let's see, carry the 1 and divide by what's left and – ONE TRILLION DOLLARS!!!!   

    I'm sorry but, like Buffett – if it's too idiotic I just stay away but, if you are so compelled, I'd play for them to double up on more insanity since there seems to be no shortage of that.  The 2020 $50s are $17 and the $75s are $10 so net $7 on the $25 spread that's 100% in the money to start is a good way to play them long with limited damage.  At $75 you make $18 (257%) without even risking an assignment thanks to all those greater fools out there and let's say you pull the plug at $3.50 so the risk is far outweighed by the reward.


  26. LB

    Don’t ask how I got here – it was a bunch of my mistakes wrapped in a disaster. Anyways here’s where I am now.

    LB –Long 80 LB Jan 18 2019 $32.5 Call  -

    LB Short 80 LB Jan 18 2019 $40 Call

    Can the loss be mitigated by long term adjustments – ?

    Thanks


  27. Damoytz;  without providing the prices at which you acquired those positions it is impossible to provide assistance.  One rule to keep in mind here at PSW is to adjust a call spread once the price of the long call decreases below the net of the original trade. The key now is to determine whether you still have conviction and if so look to roll out to 2020 and probably increase the size.


  28. Phil – Selling 2 TSLA calls at 12.50 brings in $2500.


  29. PR/ Yes.  I was just saying the Commonwealth and the Utility less prepped than average state. And they made a bad decision on not reaching out to other utilities immediately. That's…curious.  And then as you point out FEMA and Interior coming in like vultures made it worse.


  30. LB/Damo – Well LB is at $32 so not a tragedy and you paid net whatever on the spread, say $3.50 and now the Jan $32.50s are $2.50 but the 2020 $27.50s are $6.70 and you can roll to 80 of those and sell 80 2020 $35s for $3.80 to pay for the roll and now you have 80 $27.50/35 bull call spreads at the same $3.50 with 80 short Jan $40 calls at 0.65 and I'd put a stop on 30 at $1 and 25 more at $1.50 and $25 more at $2 so your worst case would be spending about $10K to get out of the short calls and you can sell 20 of the 2020 $27.50 puts for $4.20 and that's another $8,800 in your pocket right there.  Good as a new trade!

    TSLA/Albo, Dave – Hmm, may have gone a bit crazy with my zeros!  So the net on the above TSLA spread is $4,400, not $1,900 and it still pays $9,000 so only 110% upside potential now.

    Less prepped/Rexx – Well that's what happens when you ignore a financial crisis for a decade – things that should be done to prevent disasters aren't done and then, when there's a disaster – you are completely screwed.  I don't think "other utilities" can just flip a switch and supply electricity to an island 1,000 miles away unless you are privy to some amazing technology I've never heard of.  


  31.  seeing large 2020 put sales in KSS, GPS and KORS


  32. Scottmi – HL is up 11% today.


  33. Tsla/Phil- I dont mind shorting the $420 2020 calls since Musk state that's the buyout price…. I dont see anything else that would elevate it above $420 anytime soon?


  34. Any reason why you not selling the 2020 420calls instead?


  35. there is some good option premium in AAXN, our stock of the century 


  36. add JWN to that list of 2020 put sales


  37. Utilities. Ha ha that sounds like Musk, beaming power 1000 miles. And yeah they underinvested for decades. But that's not what I meant.  The utilities share people to do repairs after emergencies.  Nobody has enough staff to deal with many lines going down at once; but each unaffected utility can send a few crews to the disaster zone. That happens in TX and FL.  The utilities all have agreements.  But strangely PR waited a month to ask for that help.  Check  out the NYT article.  


  38. all those 2020 retail put sales could be tied to stock sales  - somebody taking profits on retailers by selling stock today, and willing to get back in at a lower cost in a year and a half


  39. Taking off 1/2 of my OSTK short put position ahead of their report tonight.

    Phil,  I really don't trust Patrick Byrne either. 8-)


  40. New armchair trade CCL buy the stck @ 59.17 and sell the Sept 21 strangle for 2.08. combined monthly return 3.2%.


  41. FU LB!!!!

    What a tease!


  42. TSLA/Dave – You never know.  I was waiting for $380 to short them (again) and we got it, so I shorted them.  Just because he pretends to have an offer doesn't change my long-term valuation but I was more cautious than I wanted to be because it's POSSIBLE (though remotely) that not only is he telling the truth but that there could then be a bidding war by multiple idiots.  Doubtful but not the kind of thing I want to risk massive losses betting against and, as I noted yesterday, short $500 calls went from $4 to $12 on that silly spike up – if you don't have a ton of buying power – you can get forced out on spikes like that by a margin call.

    2020/Dave – That gives them way too much time to beat us.   You are thinking like it's a sure thing they get bought out at $420, I think they don't but then maybe, over the course of 18 months, something happens to push them over $420 – then I'm screwed.  By starting in Jan, I have 12 months to roll to higher strikes in longer months.

    AAXN/Stock – Maybe good premium but the stock isn't cheap at $60 with 0.27 in earnings last year and MAYBE 0.50 this year.  Anyway, our Jan 2020 target was $50 for a 10-bagger – we're done with this one.

    JWN/Stock – Way more expensive than M with way less asset value (retail locations).

    Waiting/Rexx – They asked for help and the utilities could have OFFERED to help but the crux of the matter is PR signed a $300M deal with Whitefish, who were pushed by Trump's Interior Secretary Zinke so they THOUGHT that was being taken care of but it turned out to be a scam that wasted a month or so.  

    The company is headquartered in Interior Secretary Zinke’s hometown of Whitefish, Montana, a town of 7,200, and is financed by a private equity firm run by a major donor to President Trump.

    One of Zinke’s sons worked for a summer on a construction site for Andy Techmanski, Whitefish’s CEO. Zinke said Friday in a statement that he “had absolutely nothing to do with Whitefish Energy receiving a contract in Puerto Rico.”

    But the company was largely unknown, even to energy experts like the former National Association of Regulatory Utility Commissioners chair.

    At the same time, the government of Puerto Rico is $70 billion in debt, while PREPA owes $9 billion to its creditors.

    As of Oct, 2017:  PREPA has said the reason it went with Whitefish instead of other, more experienced companies is because the firm didn’t demand a large upfront payment, buying the utility time to scrounge up the cash. PREPA also said that it didn’t ask for mutual aid because it expected that reconstruction help the federal government wouldn’t cost it anything. But now utility crews are en route from Florida and New York, which means PREPA may have to come up with money to pay for relief sooner than expected.

    OSTK/Albo – Wise move.


  43. Rb/Phil- added 1 at $2.0


  44. Sheesh – the $380 TSLA pop was a nice vacation gift after all. I may be out of mine by the end of the day at this rate.


  45. PR/ that makes sense. FEMA wouldn't pay and they didn't have cash.


  46. phil any thoughts on adding to CDE here?


  47. /RB/Dave – I have 2 @ 2.01 avg, as planned.  Dollar having a strong day is keeping pressure on commodities (and the indexes):

    Honey badger don't care:

    TSLA/Ati – Yeah, nice, quick gains there.  If I were a short that got squeezed, I'd be really pissed!  

    CDE/Coulter – If you mean as a new trade – yes, I like them here.  If you mean for our portfolios – no because we already pressed ABX hard.


  48. After AAPL dividend tomorrow they will reshuffle the cards?  Or still early.  


  49. Judge admits error in Manafort trial


  50. Court orders ban on harmful pesticide, says EPA violated law


  51. Phil

    What is our trade on ABX ?

    Thanks




  52. AAPL/That – Not sure how many people time AAPL on the dividend but /NQ rejected at 7,500 is on a run from 7,200 so 300 points means a weak retrace is 60 points to 7,440 and that'd down a bit from here and a strong retrace goes back to 7,380, which still seemed high until this past week blasted us over.  

    Well, I'm off to the pool – have a good day! 


  53. ostk!


  54. Yowza ! ! !

    Maybe it's real.  Glad I kept 1/2 of my position.


  55. ~~  OLED

    Universal Display prelim Q2 $0.23 vs $0.17 Capital IQ Consensus Estimate; revs $56.1 mln vs $49.64 mln Capital IQ Consensus Estimate.

    Universal Display reaffirms FY18 revs $280-310 mln vs $298.97 mln Capital IQ Consensus Estimate.


  56. HL, OSTK, OLED – good day!   internet has been out (for my entire county) all morning until just a few minutes ago…barely connecting though. glad i'm not day trading.  


  57. Scott – Good day for sure !    What no CTL 8-) ?


  58. Mueller request signals Gates may still be cooperating




  59. Trump’s Plan Won’t Solve The Medication Price Crisis






  60. The dollar shoots up 60 cents, indexes & metals go south. I can't find anything in the news.  Shouldn't there be something out there for me to read???   It is a big concern, as I am in a few commodity trades and these particular trades usually drop when the dollar goes up.  Unfortunately, the market on my commodities will not open for a couple more hours.   Can anyone on this site recommend a good News source for these types of events.  I have Bloomberg news on in the background, several websites open and bookmarked, but have not been able to find anything on this front.  Other than a little bit of selling off in Asia and Turkey currency going lower.  Would luv to have another tool in my toolbelt to help with my anxiety in these situations.   At least I can grab me some gold now.   


  61. GrassHopper – look at ft.com. There is crisis in Turkey and the Lira plunged .  Looks like a flight to quality (USD).  


  62. Good morning!

    Dollar/Grass – Before Europe opens, the Dollar is thinly traded and something like Turkey news can cause a major player to move to Dollars and that drastically distorts the market.  It's actually fun to play against and I'm jumping back in /SI at $15.33 – $15.30 with a stop below that but 96 on /DX is likely to be rejected (and out if it's not, of course).  

    /RB is back to $2, I like that as well and /NQ exactly hit my 7,440 target so out of those shorts and taking a poke on the long side now. as  well as good old 2,840 on /ES (our old shorting line) and this time it's a long with VERY tight stops below. 

    25,400 is a good line to play long on /YM and /RTY 1,680 is our 4th line to watch.

    The absence of news is a clue as well!  

    Of course Europe is down 1.2% and our indexes are only down 0.4% with the Dollar up 0.6% at the 96 line so watch for Europe failing 1.25% as a sign to bail or the Dollar over 96 as a sign to bail and, of course, keep reading the news.

    And what Fel said! 


  63. 0.75 to the Dollar – poor Canada!  

    Woops, there's some news, Russia's Medvedev says that Moscow would consider it a "declaration of economic war" and would retaliate "economically, politically, or, if needed, by other means" if the United States imposes bans on Russian banks or their use of a particular currency.

    While he did not go into detail, Medvedev's reference to "other means" appeared to have been aimed to raise the prospect that Russia could respond with military force or some other form of warfare, such as a cyberattack.

    "I would not like to comment on talk about future sanctions, but I can say one thing: If something like a ban on the operations of banks or on the one currency or another follows, it would be possible to completely directly call it a declaration of economic war," Medvedev said during a visit to the Kamchatka Peninsula in the Russian Far East.

    "And it would be necessary…to react to this war economically, politically, or, if needed, by other means," he said. "And our American friends need to understand this."

    Nice!  I hope Trump fans are very proud that they've voted the US closer to WWIII than we've been at any time since the Cuban missile crisis.  

    The potential sanctions Medvedev was referring to were proposed in draft legislation introduced on August 2 by a bipartisan group of senators including Republican Senator Lindsay Graham, who said its proponents want to "impose crushing sanctions and other measures against [President Vladimir] Putin’s Russia until he ceases and desists meddling in the U.S. electoral process, halts cyberattacks on U.S. infrastructure, removes Russia from Ukraine, and ceases efforts to create chaos in Syria.”

    The prospects for passage of what Graham called the "sanctions bill from hell" are uncertain.

    The full U.S. Congress will not be back in Washington until September, and the Reuters news agency cited congressional aides as saying they do not expect the measure to pass in its entirety.

    The aides said that, while it is hard to predict weeks in advance, it is more likely that some of its provisions would be included as amendments in another piece of legislation, such as a spending bill that Congress must pass before September 30 to avoid a government shutdown.

    A week after it was introduced, the Defending American Security from Kremlin Aggression Act (DAKSAA) of 2018 made waves again on August 8 when the Russian daily Kommersant published what it said was the full text of the legislation.

    The Russian ruble dropped sharply after the publication. It fell again on August 9, reaching a two-year low, after the U.S. State Department announced that new sanctions will be imposed on Russia over the poisoning of former Russian spy Sergei Skripal and his daughter in England in March, in what Britain, the United States, and others say was an Russian attack using a Soviet-designed nerve agent known as Novichok.

    The first set of sanctions covered by that announcement, which U.S. officials said target export licenses of sensitive U.S. technologies and industrial equipment, such as electronics, calibration equipment, and gas turbine engines, are expected to enter into force around August 22.

    A second set of measures could be substantially broader and would be imposed if Moscow fails to meet a 90-day deadline to provide “reliable assurances” it will no longer use chemical weapons, allow on-site inspections by the UN or other international observer groups, and respond to other U.S. demands.

    Kremlin spokesman Dmitry Peskov called the new sanctions "categorically unacceptable" and "illegal."

    Russian Foreign Ministry spokeswoman Maria Zakharova accused the United States of trying to "demonize" Russia and said Moscow would be preparing a response to "this unfriendly act," but did not elaborate.

    It's very possible, even likely, that this is all a big show – an artificial crisis aimed towards making Trump look good as he comes back from vacation and calms things down with his pal Putin.  I can see how both Putin and Trump would think that would work to restore people's confidence in their relationship.  

    I think I'm going to buy another 1% of HMNY for $1,200, that's 24,000 more shares at 0.05 though we're dubious about the actual share count.

    Remember, our time-frame for /RB is into the end of month holiday weekend – not day to day right now.  I'm just worried we won't see $2 again so I'm accumulating here.  

    Don't forget, for Europe, -1.25% is a bounce line so we look for weak (0.25%) bounces and strong (0.5%) bounces to see if they are breaking back up or just bouncing before going lower.  


  64. Lovely, Saudis airstrike a market in Yemen in retaliation for rebel action elsewhere.  Many civilian deaths, of course.  Will be interesting to see how our wet noodle foreign policy team at Trump Castle deals with this one.  When the US has weak leadership, other countries feel they can literally get away with murder…


  65. Hey, we forgot the VIX – perking up a bit