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Why Worry Wednesday – Market Continues to “Soar and Ignore”

No Brexit deal again.

Not that the markets seem to care but, at the moment, Britain is scheduled to leave the EU on March 29th and, as you can see from yesterday's vote, they are nowhere close to agreeing on a divorce settlement with the EU.  

Without a deal, the UK must depend on the EU to simply give them an extention and restart negotiations but, if the EU plays hardball – the UK could be cut adrift, with no trade agreements with ANY country.  Since all the EU nations have negotiated as a block for the last 30 years, the UK doesn't have any individual trade deals with any nation so, effectively, they can't trade.  

EU President, Donald Tusk, said that the 27 EU governments would consider a “reasoned request” from the U.K. for an extension, noting they would need to agree unanimously. The leaders, he said, “will expect a credible justification for a possible extension and its duration.”  Meanwhile, Jeremy Corbyn, leader of the main opposition Labour Party, said: “The government has been defeated again, they must accept that their deal…is clearly dead,” adding the U.K. should stay in a customs union with the EU.

View of Caracas during the partial power outage on March 9.This is total chaos in the UK, one of the World's largest economies and Venezuela is still blacked out and Maduro has accused the United States of waging cyber warfare and attacking his grid in order to carry out President Trump's wishes to have him removed from power.  Sadly, there's nothing about that accusation that sounds out of the question.

Meanwhile, all this is a distraction as we await the Meuller Report but, even after all this waiting, it's only a prelude to long-delayed House Investigations into: Russian contacts, obstruction of justice, abuse of power and a scheme to buy the silence of a pornographic film actress(es) who claimed an affair(s) with President Trump.  

So, at the moment, we have as much political uncertainty as the UK or Venezeuela.

Be carfeful out there!


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  1. Contrary to what Trump says, flying is a lot safer but that's as long as we don't have CEOs calling the president to ignore possible issues:

    In a statement released Monday, the FAA said, “if we identify an issue that affects safety, the FAA will take immediate and appropriate action.” Boeing CEO Dennis Muilenburg, who reportedly donated $1 million to Trump’s inauguration, called the president on Tuesday and lobbied him not to ground the 737 Max planes.

  2. Using bogus numbers to justify budget items:

    For no particular reason, Trump has instructed that growth over the next ten years will be 3 percent—so that’s what his economic advisers gave him. It’s not uncommon for budget documents to fudge a little bit, perhaps assuming an optimistic 2.3 percent growth instead of the consensus 2.1 or 2.2, for example. But Trump’s budget is just straight science fiction. There’s no longer even a pretense of using consensus figures.

    Just for comparison, the CBO projects an average growth rate a full percentage point lower than the Trump White House. The IMF is a shade lower over the next five years. The World Bank agrees.

    We are like China now, we'll have projections and the numbers will match down a decimal point.

  3. Phil,
    Do you still short ES?

  4. Good Morning!

  5. Good morning!

    We're back to possible breakout levels so no shorting unless someone fails a 200 dma (/ES still closest).  Durable goods were good and BA has stabilized – so no particular reason to go down.

    BA/StJ – Big mistake by them to make this look more political than it is.

    /ES/Kgab – Not if it's over the 200 dma at this point.

    /KCN19 back under $100 and a great long to play over that line (tight stops below).  On /KC, we're bouncing off the $95 line with a burst of volume. 

    /NG we already did yesterday at $2.77 but you can still play bullish over $2.80 with tight stops below that.

  6. I hope all of these parents, with their 'best of intentions' do some jail time and can't buy their way out of the charges facing them….

  7. …You should have spent more time being a Parent.  :(

  8. /NQ testing 7,300!  

    I'm working on the LTP Review – going to take 2 days!

  9. Criticism of FAA mounts as other nations ground Boeing jets

  10. Apple Races to Get Studios Signed Up for New Streaming Service

  11. Canada just grounded 737s in their airspace based on "new evidence" – not looking good! 

    Worse is the damage to the reputation of our FAA – turned into a political tool overnight and now we lose our authority to determine air-worthiness of planes.  That's 50 years of reputation squandered overnight by the Putin Puppet!  

  12. Phil the reputation is one thing but passengers lose confidence in boarding this plane. Would you be comfortable?

  13. BA/Yodi – I used to really hate flying but then I took lessons and got over it.  I do think there's some point that US pilots tend to be a lot more experienced than Asian pilots, who were involved in both crashes but, given a choice – I wouldn't fly it for 6 months, at least but it's not a realistic option as I fly a lot of legs where 737s are used.  Still, chance in a million is safer than driving and one more incident and they will ground them all so just have to hope it's not me!  

  14. Well I took as well some flying lessons in my time, one simple thing I cannot understand, that it does not seem possible to switch from Autopilot to manual!!! My car does that by just toughing the brake or pressing a button.

  15. Yeah, that seems to be the problem and BA doesn't want to admit their new "feature" is killing people.  Their "fix" is for the pilots to quickly disengage the Auto Pilot and ignore all the false warnings – I can't say I am happy getting into a plane where that's the solution to a system problem.

    Related image

  16. I do not even understand why a plane is on Auto pilot at all after 5 minutes after take off.

  17. Webinar? I didn't see any mention or link….

  18. Auto/Yodi – Are you kidding, they are already talking about pilotless planes!  

    No webinar today Mkucs – I'm in CA this week – too crazy.

  19. Phil / Macys M

    Any thoughts on how the latest news will effect things?

    the sacked 100 top execs

    going EX Dividend 3/14


  20. OK, been away and was just missing you big guy :)

  21. Potter M they must be sacking a lot of money sucking lemons. UP 1.4%. I do hold the stock in my plays and I am still in the plus. Price is still low and the div is good.

  22. Phil / Thoughts on KHC? Looks like it could be putting in a bottom.

  23. Long-Term Portfolio Review (LTP):  There are 9 small parts because I had a problem with my capture program.  $1,249,183 is up 149.8% and that's up $42,172 (8%) from our last review at $1,207,011 on 2/15.  We sold a few more short puts but that's about it since then.  

    I still feel like I want to go to CASH!!! but, I was wrong last month and it's a good thing we didn't then ($42,000 good), so I guess that's a little more buffer we have against a proper dip.  I am still looking to cut things but, as usual, I doubt I'll cut much as I love our positions…

    Not going over the short puts – all fine and I just noticed CMG is a double-entry so it looks like we're $11,480 better off than I thought!  

    All the dividend stocks are fine too.  No wonder this portfolio just chugs along….

    • AAPL – Back over $180 is very nice!  We're very aggressive here and need to consider selling July $185s, which are $8.30 so let's say we'll sell 10 of them for $10 – if we hit that.  That's $10,000, which would be silly to turn down on a 1/4 cover.  

    • ALB – Also aggressive but I think $95 would be fair.
    • ALK – Just flew on them to LA – very nice!  Let's buy back the short Jan $70 calls as they are 80% gains already.  
    • BHC – Doing better than I thought .  Fallback would be to DD on the long calls but not there yet.
    • C – On track.
    • CAKE – Let's buy back the 15 short 2021 $60 calls at $2.50 ($3,750) and see how they go.  

    • CDE – Hopefully will go up with gold.  Basically on track with 21 months left.

    • CELG – Waiting for the sale to go through. 
    • CHK – Looking to pop over $3 and I'm  happy to be aggressive on these.  Good for a new trade.
    • CMG – The sale of the June $600 calls was a pre-roll of the March $550s but they both got worse.  Oh well – try and try again.  We're just going to close the short March calls and we're left with the rest.  The main spread is $160,000 and in the money but only showing net $80,000 so plenty to gain and I doubt we'll get burned every Q on the short calls.  We're taking a $70 loss on 12 ($84,000) and we sold $40,000 worth of June calls so, if CMG is below $600 in June, then we only need $40,000 more to catch up.  

    • CZR – On track.  
    • DAL – Disappointing so far but not enough to let it go or adjust.  

  24. M/Potter – I don't see it as a negative.  Investors like shake-ups.  

    I missed you to Mkucs! 

    KHC/Soma – In the LTP but we already got aggressive last month – you can get even better prices now.  

  25. Long-Term Portfolio Review (LTP) – Part 2:  

    • DIS – What a year they are going to have at the box office!  We're on track with a lot of room to run.  My only worry is they spike up so let's buy back 1/2 the April $115 calls for $2.45 ($2,450)
    • F – Pays such a good dividend I'm willing to put up with weakness.  Anyway, we sold $7 calls for $2 so we're locked in at net $9.
    • FCX – Still has that new trade smell.

    • FTR – We're in for about net $30,000 so the breakeven on the stock is $1.50 but then we'd be assigned 15,000 more at $4.25 and our average would be $2.875 so that's about our actual break-even.  

    • GCI – Getting bought so just waiting.
    • GILD – On track but it's an ugly track.  

    I have a lunch meeting and I may or may not be back by the close.  If not, I will finish the LTP tomorrow.

  26. Phil, with the CMG short calls so far in the money, why can't you off set them by selling weekly puts for 2-3 $ish until you roll them? Yes, I know what you think of weekly iron butterflies but its hedged with the short calls (and include an answer that doesn't include bad produce). Thanks

  27. Pilotless planes – I guess my son's future as a professional airline pilot looks great right about now…. 

  28. Phil leaves so the market dives. Deja vu

  29. Reputation / Phil – It's amazing how much damage can be done in 2 years! It will take 8 years to fix it before people unlearn the lessons again. 

    As far as planes are concerned, people probably don't realize that most of the time they are in a plane, it's on autopilot! They can land planes automatically already and statistically speaking 80% of crashes are pilot error. Up until we let people like Boeing use what looks like beta version of their software in real planes that could have maybe gotten fixed earlier if POTUS has not shut down the government.

  30. Wow, I guess BA didn't donate enough money – Trump just called for a grounding of all 737s.  It'a a good call, the damage to our reputation was going to be worse than any damage to BA. 

    CMG/JMD – We already sold 2021 puts and, honestly, I'm just not that bullish on CMG – I think over $600 is ridiculous so I'm not inclined to sell puts on a sock I think is going down.   If we were in major trouble, then you are right and we need to not take sides and just sell premium but a close below $600 in June fixes everything with 18 more months to play so why do anything drastic now?

    Deja vu/Den – I know, they should pay me to stay in the chair!  

    Auto-pilot/StJ – Would be a very long time until I was willing to take a chance on a fully auto plane (though I think that's how flying cars will work – they're not going to let people do it). 

  31. Phil – Sometimes I wonder what is more dangerous, driverless cars or cars driven by idiots! Fortunately, they are pretty good at weeding out idiots from the planes cockpits!

  32. Gonna be tough for Manafort to get a pardon from Trump for state crimes unless Don Jr..runs for NY governor and that would be a long shot I think. Might want to start telling the truth or spend a good portion of his remaining life in court or jail (and broke).

  33. Francesco Cali, Reputed Gambino Crime Boss, Shot and Killed on Staten Island

  34. J&J Found Liable for California Woman’s Talc-Linked Cancer

  35. Barter and dollars the new reality as Venezuela battles hyperinflation

  36. At tense meeting with Boeing executives, pilots fumed about being left in dark on plane software