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TGIF! Have the Markets Found a Bottom or are we Waiting for the Big One?

Nice bounce.

It should, I suppose, be pointed out that, in our Wednesday Morning Report, we predicted the Dow would bounce to 1,080 points to 22,680 but that would be a Weak Bounce and that we were not going to be impressed until we saw the Strong Bounce Line holding at 23,760.  Though it was an all-time record move, the Dow finished up EXACTLY 1,080 points that day.  Most pundits, if they made a call like that, would be interviewed for the rest of their lives about it and put on the President's Advisory Committee but my response to questions about it is "TA is for morons" so it doesn't make for a good interview.  

The 5% Rule™ is not TA, it is simply math that is based on our understanding of how computer algorithms tend to trade and, since 90% of all trading is done by algorithms – it's pretty darned accurate!  In addition to our 5% Rule™, we have our Tugboat Theory™, which we went over in this morning's Live Member Chat Room.  While we did flip much more bullish in our Options Opportunity Portfolio on Wednesday, we're still waiting to confirm the strong bounce lines before getting more aggressive in our Long-Term Portfolio.  The lines we are looking for remain:

  • Dow 27,000 to 21,600 is 5,400 points so 1,080-point bounces to 22,680 (weak) and 23,760 (strong) 
  • S&P 2,950 to 2,360 is 590 points so 120-point bounces to 2,480 (weak) and 2,600 (strong) 
  • Nasdaq 7,700 to 6,160 is 1,540 points so 300-point bounces to 6,460 (weak) and 6,760 (strong) 
  • NYSE 13,200 to 10,560 is 2,640 points so 528-point bounces to 11,058 (weak) and 11,586 (strong) 
  • Russell 1,750 to 1,400 is 350 points so 70-point bounces to 1,470 (weak) and 1,540 (strong)

We've made some progress but, as you can see from all the red, nothing very exciting so far and, if those green boxes don't hold up – it will be time to add more hedges.

Have a great weekend, 

- Phil


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  1. Art Cashin: "From the collapse of Lehman to the financial crisis bottom in March 2009, the S&P 500 rallied more than 4 percent on 13 different occasions."

  2. Good Morning.

  3. stjean..;-(

  4. Tugboat – Thank you! 

  5. Closed out /ES trade up 103.

  6. Good morning! 

    Futures don't matter and intra-day doesn't really matter – we'll just see what hold up for the day. 

    /ES holding 2,480 is critical (2,504 now) – the others are not close to their inflection points so it's all about /ES this morning.

    Europe is up 2% but just catching up to us.  Our EWGs are nicely in the money now:

     Dollar a bit weak and /RB testing $1.30 also worth watching.

    Copper shows hopes of trade deal improving.

    You're welcome Grass.

    Nicely done Albo! 

  7. Does anyone know if it is half day on Monday? Thanks for refreshing my memory on the tugboat Phil. Always good to be reminded of all the variables. We had our Christmas snow so it is the great white out in North country.

  8. Pirate – Mkt closes at 2 PM.

    Hopefully, that gives me enough time to establish all my losses. 8-)

  9. Hi Phil.  Could you recommend a few hedges, i would like to study them I case we need them.  Thanks.

  10. i thought it closed at 4pm monday?

  11. Jabob, I'm assuming this is accurate :

    Dec. 31New Year's Eve Open Early Close 
    (2 p.m.)

  12. I think its 4pm, nyse doesn't indicate other

  13. Thanks Albo-Jabo. Couldn't find the info on TD. And down we go!!!

  14. ugly!!!

  15. Pharm's recommendation LQDA has held up nicely in this crazy market.  Unfortunately no options.

  16. Are many options contracts assigned around?  I received UCTT Jan 2020 sold PUT assigned, perhaps the bottom of the downtrend?

    or someone got nervous

  17. wonder if mr. stick will come out to play again???

  18. US pending home sales slipped 0.7 percent in November

  19. Teachers Quit Jobs at Highest Rate on Record

  20. Monday/Pirate – Not sure if it's a half day or not (I don't think it is) but I will be scarce as I'll be up in Orlando that day.  Tuesday the markets are closed.

    So Happy New Year to all sensible enough to take a 4-day weekend!

    Hedges/Robert – I think the Nasdaq could still collapse so SQQQ is still valid.  Of course I love selling AAPL 2021 $135 puts for $15 as that's net $120 on the entry and I'd consider that free money so, as a hedge:

    • Sell 5 AAPL 2021 $135 puts for $15 ($7,500)
    • Buy 30 SQQQ June $13 calls for $5.50 ($16,500) 
    • Sell 30 SQQQ June $21 calls for $3 ($9,000) 

    That's net $0 out of pocket on the $21,000 spread that's $12,000 in the money to start so you can't lose money unless the Nas goes higher and then it becomes pretty unlikely that AAPL won't be higher too.  On the downside, if AAPL goes down, it takes the Qs with it and you collect $40 per share to buy your 500 AAPL shares with, netting you in at $80.

    Assignments/Advill – Surprisingly not too many considering the size of the dip.

  21. Jabob – I think you're right about the stock market closing time.

    This is from Briefing Trader.

    The stock market is open for a full day of trading on Monday (New Year's Eve).

    2PM was from Kiplinger and wrong , !

  22. Advill Hi which put did you have? I hold the Dec 20 17.5 put still has a lot of premium. Was a dump play in the first place ultra clean srew up!!!!

  23. albo--thx.

    I can't believe they don't close it at 1pm Monday.

    Maybe, they think Monday's matter???

  24. Bond market closes at 2pm on Monday. Stock market has regular hours.

  25. Augrusot -  So that's where the 2 PM came from.   Thanks.

  26. Not sure if anyone saw this:

    Mastercard SpendingPulse: U.S. Retail Sales Grew 5.1 Percent This Holiday Season
    Purchase, NEW YORK – December 26, 2018 – A robust shopping season from before Thanksgiving through Christmas has given retailers much to cheer about this year. According to Mastercard SpendingPulseTM, which provides insights into overall retail spending trends across all payment types, including cash and check, holiday sales increased 5.1 percent to more than $850 billion this year – the strongest growth in the last six years. Online shopping also saw large gains of 19.1 percent compared to 2017.
    “From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
    The Mastercard SpendingPulse report details holiday shopping from November 1 through December 24. Key findings of the report indicate that despite weather challenges, this was a winning holiday season for retail overall; however, the story was different category by category:
    Total apparel had a strong season with a growth rate of 7.9 percent compared to 2017, recording the best growth rate since 2010. The category followed through on a strong momentum that started during the back-to-school season and accelerated through fall right up to Christmas.
    Home improvement spending continued to surge across the U.S. with spending during the holiday season up 9.0 percent. This trend started before the holiday season and helped the sector power through to a strong finish.
    Department stores finished the season with a 1.3 percent decline from 2017. This follows two years with growth below 2 percent, some of which can be attributed to store closings. However, the online sales growth for department stores indicated a more positive story, with growth of 10.2 percent.
    Electronics and appliances were down 0.7 percent. The home furniture and furnishings category grew 2.3 percent.
    Poor weather did pose an issue during some primetime shopping periods. This included cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15-16, on both the East and West coasts. Conditions were also less than ideal on Friday, December 21, in the East, with storms that impacted the final run of the season.

  27. Retail sales/Aug – Great numbers, that's what's been keeping me bearish, the very simple math of full employment and rising wages puts a bit of a bottom into Corporate Earnings.  

    Even XRT is bouncing, bur not likely to hurt our short in the STP:

    Long Put 2019 18-JAN 55.00 PUT [XRT @ $40.15 $-0.50] 20 9/27/2018 (22) $8,300 $4.15 $10.78 $4.15     $14.93 - $21,550 259.6% $29,850
    Short Put 2019 18-JAN 50.00 PUT [XRT @ $40.15 $-0.50] -20 9/27/2018 (22) $-2,900 $1.45 $8.48     $9.93 - $-16,950 -584.5% $-19,850
    Short Call 2019 18-JAN 52.00 CALL [XRT @ $40.15 $-0.50] -10 9/27/2018 (22) $-1,850 $1.85 $-1.84     $0.01 $0.00 $1,840 99.5% $-10

    Meanwhile, indexes still in the red but I guess we can say flat.

  28. Actually, the net of $10,000 says we should close XRT in the STP – if we can take $10,000 off the table.

  29. I've purchased what I will call "TSLA Insurance" on this week's earnings.  Took earnings for the week on a 50K portfolio and used about 10% of it to buy some 28 Dec TSLA 325  puts (cheap at .80).  If the market tanks this afternoon TSLA will go with it and my insurance kicks in.  If it holds, I keep 90% of the earnings.  

  30. How would MasterCard know about cash purchases, or debit card for that matter? Color me skeptical about any of these stats. With credit cards debt at all time highs before the holidays? Maybe the rich bought more. There has to be a reason.

  31. Xrt low was 38.10 now 40.69 not a lot of action considering.

  32. getting uglier again..

    does anyone expect that ther will be some window dressing today and monday?

  33. @Jabob – perhaps the pension funds have some more stock buying left…

    Massive stock rebound may be from $60B pension fund rebalancing: Bloomberg

    Dec. 28, 2018 12:52 PM ET|By: Liz Kiesche, SA News Editor 

    One theory behind the biggest single-day stock turnaround since 2010 may be pension funds buying up equities after December's meltdown.

    Pravit Chintawongvanich at Wells Fargo says the giant end-of-day gain could reflect end-of-quarter adjustments from pension fund that have $60B of shares to buy this month, more than the usual amount, Bloomberg reports.

    Institutional investors with large holdings in stocks and bond balance out their holdings at the end of each quarter, adding to losers and cutting on winners. He said money was pulled from fixed income, which has been outperforming equities.

    “While the $60 billion rebalance is historically large, its effect is probably exacerbated by the low market liquidity conditions,” Chintawongvanich said in a note. “A given dollar to buy or sell is moving the market more than it normally would.”

  34. thank you learner!

  35. mr stick … will he stay or will he go???

  36. uh oh!

  37. Surging into the close, so I guess we can risk just the hedges we have into the weekend.

    TSLA/Iflan – Very wise. 

    MasterCard – It's not MC the credit card company, per se.  They have a subsidiary, Spending Pulse the compiles consumer data so of course they use the massive CC data they have but it's actually a very reliable data provider.  Not only that but with gasoline cheaper, the consumer spending is even more impressive as gasoline is included. 

    Window-dressing/Jabob – This is the worst Dec since 1931 and Monday can't save it so, if I were the people pulling the levers, I'd kitchen-sink Monday and that would give us easy comps for 2019.

    Pension funds/Learner – Another factor of more employment at higher wages.  

    Anyway, as I said earlier, none of this intra-day BS matters – just whether or not we hold the weak bounces.  

  38. Phil,

    Wouldnt be good to buy back the FTR 8$ calls? They are now 0.2


  39. FTR/Kgab – I thought we did that already?  So yes, if they are still open, may as well buy back open short calls.

  40. Stocks add to gains in sluggish afternoon action

    • A bit less than 90 minutes ahead of the close the Nasdaq is up a full 1% and the S&P 500 0.8%. The DJIA is ahead 0.6%.
    • Should the Dow manage to close between -1% and +1%, it will end up being the first less than 1% daily move since Dec. 18.

    Zuckerberg says Facebook "fundamentally" altered its DNA

    • In a Facebook (NASDAQ:FBpost, CEO Mark Zuckerberg says the company has "fundamentally altered our DNA to focus more on preventing harm in all our services."
    • Zuckerberg says the company now has 30K people working safety and Facebook invests "billions" on security each year. He outlines how the company has improved its systems for identifying fake accounts and coordinated campaigns for election interference, built AI systems to identify and remove terrorism-related content, and changed its developer platform to limit access to user data.
    • Key quote: "To be clear, addressing these issues is more than a one-year challenge. But in each of the areas I mentioned, we've now established multi-year plans to overhaul our systems and we're well into executing those roadmaps. In the past we didn't focus as much on these issues as we needed to, but we're now much more proactive."

    Shutdown slows FTC's Facebook probe

    • The government shutdown could prolong the FTC investigation into Facebook's (NASDAQ:FB) user data conduct as the agency runs out of funding today, according to The Washington Post.
    • The FTC's budget let it continue working until midday today. Until the shutdown ends, the agency can't conduct normal investigations or negotiate with companies.
    • With Democrats on the verge of taking control of the House of Representatives, party leaders are weighing whether the party should push votes on Medicare for All or focus on more modest health-care initiatives, the Wall Street Journal reports.
    • The Medicare for All concept is popular with liberal voters, but it's riskier in swing districts.
    • There are currently eight proposals for such plans, but none are likely to become law with the Republicans gaining a larger majority in the Senate.
    • Some Democrats, though, say the priority should be to stabilize the Affordable Care Act, especially in protections for people with pre-existing conditions, rather than to push for a major overhaul in healthcare.
    • EIA Petroleum Inventories: Crude -0.0M barrels vs. -2.9M consensus, -0.5M last week.
    • Gasoline +3.0M barrels vs. +0.0M consensus, +1.8M last week.
    • Distillates +0.0M barrels vs. -0.5M consensus, -4.2M last week.
    • Futures -0.04% to $44.59.

    • Sears (OTCPK:SHLDQ +8.7%) plans to close another 80 stores in March as it faces liquidation.
    • The company told employees it would begin liquidation sales at the locations in two weeks.
    • Since its bankruptcy filing, Sears has closed 260 of its roughly 700 stores.
    • Check here for the full list of closing locations.
    • Sears Holdings (OTCPK:SHLDQ) will likely liquidate if no bid comes in for the 125-year-old department store chain on Friday, CNBC reports.
    • Sears is down 1.1% in after-hours trading.
    • Its best chance to continue is a $4.6B proposal from its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments.
    • ESL is the only party offering to buy the company as a whole, CNBC reports, citing people familiar with the matter.
    • Lampert, though, hasn't submitted a bid or come up with financing as of Thursday afternoon, the people said.
    • If Lampert does submit a bid, Sears's advisers have until Jan. 4 to decide if he's a "qualified bidder." If he is named a qualified bidder, then ESL could participate in an auction against liquidation bids on Jan. 14.
    • Previously: Sears may have to unwind sale of notes, judge says: WSJ (Dec. 21)

    • With less than two trading days left to the year, here's how homebuilders' stocks stack up.
    • Starting with the broader view: iShares U.S. Home Construction ETF (ITB -0.4%) slid 31% over the course of the year compared with a 5.3% decline for the SPDR S&P 500 ETF (SPY +0.2%).
    • As for specific names:
    1. D.R. Horton (DHI -0.3%) lost 32% since the end of last year.
    2. KB Home (KBH -1%) -39%
    3. PulteGroup (PHM -0.3%) -22%
    4. Toll Brothers (TOL +0.2%) -32%
    5. Lennar (LEN -0.6%) -38%
    6. NVR (NVR -0.3%) -30%
    • Citi cuts its first quarter Apple (AAPL -0.1%) iPhone production estimates from 50M to 45M citing a weak outlook for the iPhone XS Max.
    • Analyst William Yang lowers his Max forecast by 48%.
    • The Chinese yuan slips 0.2% against the U.S. dollar and the euro after People's Bank of China officials made comments that indicated they're not loosening monetary policy as much as some economists may have hoped.
    • Some senior officials at China's central bank emphasized that monetary policy remains prudent, while aiming to be targeted and flexible, Bloomberg reports.
    • The country’s  leaders had pledged an “appropriate” balance between tightening and loosening in 2019, dropping the “neutral” description from the central bank's statement.
    • The new language, along with moves to boost private-sector funding, led some economists to expect potential reductions to bank reserve-ratio requirements or benchmark interest rates next year.
    • The omission “doesn’t represent any changes to policies,” said Sun Guofeng, director of the monetary policy department.
    • Wells Fargo (WFC +1.5%) agrees to pay $575M to resolve claims that the bank violated state consumer protection laws, says Iowa Attorney General Tom Miller in a statement.
    • He joins 50 attorneys general in the settlement.
    • Among their claims, the states and the District of Columbia allege that Wells Fargo opened millions of unauthorized accounts, improperly referred customers for enrollment in third-party renters and life insurance policies, improperly charged auto loan customers for some types of insurance they didn't need, and incorrectly charged customers for mortgage rate lock extension fees.
    • As part of the settlement, the bank will create a consumer restitution review program.
    • Update: WFC says it had accrued $400M of the settlement amount at Q3 end and expects to accrue the remaining $175M in Q4 2018.
    • Previously: Wells Fargo CEO hangs on in 2018, faces a tough 2019 (Dec. 27)
    • Con Edison (ED +0.1%) says a voltage monitoring equipment malfunction in the substation caused the sustained electrical arc flash that caused eerie blue lights in the sky above NYC last night.
    • No serious injuries were involved, and the affected service area had power back late last night.
    • Con Edison will continue to investigate the root cause.
    • Source: Con Edison Twitter.
    • JPMorgan welcomes Dell (DELL)(NYSE:DVMT) back to public trading with an initiation at Overweight with a $60 price target.
    • Source: StreetAccount.
    • Dell shares debuted with a $46 opening today.
    • The tracking stock buyout, which let Dell return public without an IPO, cost the company $23.9B. The company returned to trading to cope with its $52.7B debt pile.
    • Previously: VMware pays $11B dividend, Dell goes public (Dec. 28)
    • The latest outlook calls for above-average temps for the lower 48 in the 2nd week of January, according to Bloomberg.
    • The most recent inventory numbers are coming up, but stocks are already at their lowest seasonal level in more than a decade.
    • Natural gas is down 4.85% prior to the numbers, to $3.374. UNG -3.6%
    • Tesla's (TSLA +1.2%) move to add Oracle co-founder Larry Ellison to its board is "another major step forward" as the electric-carmaker seeks to build an independent board to guide its growth, according to Wedbush analyst Dan Ives.
    • Ellison could help channel Elon Musk's energy into positives for the company and away from the "going private" narrative that hangs over the stock, Ives writes in a note.
    • Walgreens Boots Alliance's Kathleen Wilson-Thompson is a "second impressive" independent board member, he adds.
    • Keeps outperform rating and $440 price target.
    • Source: Bloomberg First Word.
    • Analyst ratings: 14 buys; 9 holds; 11 underperform/sells.
    • Previously: Tesla +3.7% after proposing adding Ellison, Wilson-Thompson to board (Dec. 28)
    • President Trump's tweets this morning contend that closing the border with Mexico will be a "profit-making operation" because the U.S. loses over $75B a year under Nafta, he says.
    • Also part of the "close the Southern border" tweet missive--"Bring our car industry back to the United States where it belongs."
    • In the fourth tweet of the series, he says the U.S. will cut off all aid to Honduras, Guatemala, and El Salvador. "Word is that a new Caravan is forming in Honduras and they are doing nothing about it."'
    • S&P Futures +0.5%, Nasdaq futures +0.3%, and Dow Futures +0.5%.
    • GM (NYSE:GM+0.2% in premarket trading; Ford (NYSE:F) +0.5% and Fiat Chrysler (NYSE:FCAU-1.4%.
    • Previously: Trump threatens to shut border with Mexico (Dec. 28)

  41. Japanese 10-year yield is negative again

    • Nearly 29 years to the day after the top of the country's epic stock and real estate bubbles, Japan's 10-year government bond yield slipped into negative territory. The last time 10-year JGBs yielded less than zero was September 2017.
    • As recently as October, the JGB yielded a mighty 15.5 basis points. That stock markets globally have had a rough run since isn't exactly news. And with 2018 now officially in the books for Japan, the Nikkei posted a 12.1% decline for the year – its first annual loss in seven years.
    • There used to be ETFs allowing folks to go long or short JGBs (and with leverage). They died out from lack of interest.
    • Philip Morris International's (NYSE:PM) "cigarette business remains strong, with pricing power still intact," writes Piper Jaffray analyst Michael Lavery, who sees a 65% upside potential for the stock.
    • PM +0.1% in premarket trading.
    • Affirms overweight rating with price target of $110 and says recent stock declines "look overdone."
    • In addition to PM's strong core earnings growth, its electronic cigarette products look "attractive," he writes.
    • "We believe iQOS’s proven traction with consumers and its intellectual property position it well for further growth, and we continue to expect strong free cash flow generation."
    • Source: Bloomberg First Word.
    • Analyst ratings: 14 buys; 8 holds; 2 underperform/sells.
    • Previously: Wells Fargo calls Philip Morris a top pick (Nov. 14)
    • Transocean (NYSE:RIGrises 2.5% in premarket trading after announcing a rig design and construction management contract as well as a five-year drilling contract with Chevron (NYSE:CVX) USA for one of its two ultra-deepwater drillships under construction in Singapore.
    • The drilling contract has an estimated backlog of $8320M, excluding mobilization and reimbursables.
    • The rig will be the first ultra-deepwater floater rated for 20,000 psi operations; it's expected to start operations in the Gulf of Mexico in H2 2021.
    • In the event of termination for convenience by the customer, Transocean will be compensated for its incremental 20,000 psi subsea investment in the rig. Additionally, a termination for convenience occurring after April 2020, would result in a substantial termination fee.
    • Previously: Transocean adds to fleet with Ocean Rig closing (Dec. 5)
    • Debt "must be kept under surveillance, but it isn't so scary," Prime Minister Giuseppe Conte saidat his year-end press conference in Rome. "Italy’s economic fundamentals are very solid."
    • He also reaffirmed confidence in his coalition's controversial economic policies following a weeks-long standoff with the EU, as the government races against the clock to pass its 2019 budget law before a deadline on Dec. 31.
    • The "Impossible Burger" is getting some new competition called the "Incredible Burger" produced by Nestle (OTCPK:NSRGY).
    • It's the Swiss company's biggest push yet into the booming vegan market, which will be introduced under the Garden Gourmet label next spring.
    • The plant-based business may reach more than $1B in sales within a decade, according to Nestle's Laurent Freixe, CEO of the Americas.
    • Following similar moves by Ford and Hyundai, Nissan (OTCPK:NSANY) has become the latest automaker to cut output in China.
    • Slowing economic growth and a crippling trade war with the U.S. have pummelled local vehicle sales over the last few months.
    • Nissan reportedly plans to cut production in China – which is its second largest market – by a total of 30,000 units during the December-February period.
    • Many water stocks are trading well off their 52-week highs and look oversold given the strong fundamental outlook for the sector, says Boenning & Scattergood analyst Ryan Connors, who especially like Aqua America (NYSE:WTR), Tetra Tech (NASDAQ:TTEK) and Xylem (NYSE:XYL).
    • The water sector's industrial channel is on a strong upward trajectory that should last through the new year, while the municipal channel is back on a steady low-single-digit growth path, a "disconnect [that] creates opportunity, with the market selloff providing compelling entry points in a number of high-quality names where both the tactical fundamentals and strategic stories remain intact," the firm writes.
    • While some expect growth to ease in 2019, Connors thinks the sector is on solid ground, citing lower corporate tax rates, tightening capacity and secular drivers in industrial water; falling oil prices are risky for pure-play energy names but should lower costs elsewhere, he says, naming XYL and Ecolab (NYSE:ECL) as companies that should benefit.
    • The construction sector is “the cloudiest among the four demand channels,” with rising home prices and rising interest rates creating affordability concerns, Connors says.

    OPK finally coming back a bit (LTP):

    • Opko Health (NYSEMKT:OPK) jumps 15% in after-hours trading after the company and its chairman and CEO Phillip Frost agree to settle certain Securities and Exchange Commission allegations that they violated securities laws.
    • Frost agrees to pay $5.5M and is prohibited, with certain exceptions, from trading in penny stocks under the settlement.
    • Frost will continue as Opko's CEO and chairman.
    • Opko agrees to pay a $100,000 penalty and to take certain actions related to the Securities Exchange Act of 1934.
    • Frost and Opko neither admit to nor deny the SEC's allegations.
    • Previously: Trading halt on OPKO Health to continue until lawsuit-related information submitted(Sept. 11)

  42. Last week's  weekly trades I posted were 100% profitable.  Here's a virtual trade for the coming week:This is an Iron condor you can sell on AAPL for the weeklies  set to expire  on 4 January: Sell 1  165 call.   Buy 1  170 call.  Ssll 1  150 put.   Buy 1. 145  put.   for 1.10 credit.  Margin $1,000 per contract, depending upon your broker.  Maximum possible profit is $1,100 , which is  10% on margin held for the week.  Break evens are 147 to 167.  If the trade requires adjustment, I will post it.  Happy Trading and Happy New Year!

    • December Consumer Confidence128.1 vs. 134 consensus; 136.4 prior in November (revised).
    • Present situation Index 171.6 vs. 172.7 prior
    • Expectations Index 99.1 vs. 112.3 prior.

    Here's my take on this:  Consumer Confidence has a present situation, "How are you doing now?" kind of questions and people say they are still doing very good.  The other half of the index is "How do you think things will be in a year?" and, when the market is down and there's turmoil in the news, it creates a feedback loop that worries the consumers and the Expectations Index tanks really fast.  You have to take that with a grain of salt because, a month from now, if they still have jobs and if the market recovers – then this number just ends up being a blip.

    Even with this turrndown, overall confidence is at 20-year highs.

    Category DEC NOV OCT SEP AUG
    Conference Board 128.1 136.4 137.9 135.3 134.7
    Expectations 99.1 112.3 115.1 112.5 109.3
    Present Situation 171.6 172.7 171.9 169.4 172.8
    Employment ('plentiful' less 'hard to get') 34.6 34.2 32.0 30.0 30.2
    1 yr inflation expectations 4.3% 4.7% 4.8% 4.7% 4.7%

    So, on the whole, I think it's a bit early to panic.

    Have a great weekend, 

    - Phil

  43. President Trump's tweets this morning contend that closing the border with Mexico will be a "profit-making operation" because the U.S. loses over $75B a year under Nafta, he says.

    I am confused.  What happened to the Trump negotiated profitable NAFTA replacement?

  44. LOL Tangled – don't overthink it, you'll get a headache…  MAGA!!!

  45. Yikes, someone pulled the plug into the close…

  46. Iflan – I liked your TSLA trade earlier in case we tanked – I did it for around .80, but I fat-fingered it and sold the puts instead of buying them! Just bought them back for .08! 

    Covering some short /ES too. Bonds were not confirming the rally like they did yesterday. 

    Have a good weekend!

  47. Atitlan:  Your trade was better than mine!   LOL.  It's always better to sell premium than to buy it, eh?  Come to think of it there used to be someone on this site whose username was SellPremium.  I suspect he's fully retired now while  the rest of us are still trading.  

  48. Thanks forgot about gasoline being added to retail numbers. Don't panic there is still plenty of time for that!!! Have a good holiday everyone.!!

  49. House GOP quietly ends probe into FBI’s 2016 decisions

  50. Most support gene editing to protect babies

  51. More Republicans Than You Think Support Action on Climate Change

  52. futures strong.. 

    I wonder if tomorrow will be a green window dressing day or another head fake???