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Tuesday Trade Turmoil – Rumors Drive the Market

Is this fun or what?

After being down 500 points in the morning, the Dow almost fully recovered into the close, getting all the way back to 26,400, which was a lovely $2,000 per contract gain on our Futures play from yesterday's Morning Report.  Playing a pre-market move like that for a bounce off support – especially when the "news" was a tweet from the President that had no official standing ("the whim of a madman").

This morning we have Team Trump accusing China of reneging in it's trade commitments, which is an odd thing to say as they are in the middle of negotiating so nothing is actually commited yet.  Also, unfortunately, the Trump Administration says many, many things that are not true – so it's kind of hard to take their word over China's – even though they are "on our side".  In fact, this past weekend, Trump celebrated his 10,000th false statement since he took office less than 1,000 days ago.  Trump has single-handedly created an entire division of fact-checkers, now employed at almost every media outlet and he does keep them busy at over 10 lies per day.  

Yesterday's briefing from Lighthizer (the anti-China fanatic) and Mnuchin (withholder of Trump's tax returns), which took place after U.S. markets closed on Monday, made it clear there are deep concerns about the direction of the talks and the Futures tanked again and are still down more than half a point this morning but not so low that we want to go long again.   

Image result for trump china trade cartoonThe level of brinkmanship on both sides and their obvious mutual distrust has made the path to even a temporary cease-fire a lot murkier than just a few days ago,” said Eswar Prasad, professor of trade policy at Cornell University. “It is likely a cooling-off period will be needed to get the talks back on track, but the imposition of additional tariffs by the U.S. later this week could keep the talks derailed for a while to come.”

I love the fact that we have actual Ivy League Professors of Trade Policy but they comment from the sidelines while people with no experience whatsoever are in charge of the actual negotiations.  You can bet China doesn't pursue such a moronic strategy.  In fact, they were scheduled to send their top 100 people to the US to wrap this thing up this week before the Monkey-in-Chief threw his wrench into the process.

You can't run a Government like this.  Well, you CAN run a Government like this – that's what they are doing – but it's a clusterf*ck and, stupidly, it's hurting us much more than it's hurting them as US Imports are down just 12% as our Consumers just end up paying more money for the same stuff while our exports (which create jobs) are down 21% over the past year.

Don't get me wrong, market turmoil is fun.  We get to make our Futures day trades and, even if we get it wrong, we're just a tweet away from a change in direction.  

Speaking of which, front-month Gasoline (/RB) Futures fell to $1.95 this morning and it's sent the July contract (/RBN19) down to $1.92, which is a great floor to play off as it covers two holiday weekend but keep in mind that Gasoline contracts are $420 PER PENNY, so they can be very painful if you get them wrong but we're looking for a pop to $1.95 for over $1,000 per contract in profit and the way I would play this one is to go long one at $1.92 and then double down at $1.90 (if it keeps falling) to average $1.91 on two contracts and then put a stop below $1.90 for about a $1,000 loss but re-enter on any cross back over $1.90.

Aside from the holiday weekends and the start of summer driving season, you have a lot of tension in the Strait of Hurmuz with Iran, which is where 1/3 of the World's oil passes through.  So we can cross our fingers and pray for war – won't that be fun?  If you are Futures-impaired, you can play the Gasoline ETF (UGA), which is currently at about $31 and we can play it in our Short-Term Portfolio like this:

  • Buy 20 UGA July $29 calls for $2.50 ($5,000) 
  • Sell 20 UGA July $32 calls for $1.40 ($2,800) 
  • Sell 10 UGA July $32 puts for $2 ($2,000) 

That's net $200 on the $6,000 spread so if UGA is over $32 at July expiration (19th) you will make a $5,800 (2,900%) profit.  Not bad for less than 3 month's work, right? 

See how much fun trading volatile markets can be?

 


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  1. Good Morning!


  2. Good morning!

    Indexes getting worse as it's seeping in that there won't be a trade deal any time soon.  

    Note trade above for the STP:

    Aside from the holiday weekends and the start of summer driving season, you have a lot of tension in the Strait of Hurmuz with Iran, which is where 1/3 of the World's oil passes through.  So we can cross our fingers and pray for war – won't that be fun?  If you are Futures-impaired, you can play the Gasoline ETF (UGA), which is currently at about $31 and we can play it in our Short-Term Portfolio like this:

    • Buy 20 UGA July $29 calls for $2.50 ($5,000) 
    • Sell 20 UGA July $32 calls for $1.40 ($2,800) 
    • Sell 10 UGA July $32 puts for $2 ($2,000) 

    That's net $200 on the $6,000 spread so if UGA is over $32 at July expiration (19th) you will make a $5,800 (2,900%) profit.  Not bad for less than 3 month's work, right? 

    And I'm liking /RBN19 at $1.92 as well – seems like an over-reaction to me and, even if it's not, it's the 2.5% line so expect a good penny bounce, even if it's just weak.


  3. Good morning,

    Anybody knows what happened with Coffee?


  4. Phil FTR – were you going to review this after earnings and take a look at the position?


  5. /ES 2900 has been a powerful number, we'll see if that continues today


  6. Coffee/Kgab – Good harvests coming in on flat demand:

    In April 2019, the ICO composite indicator fell by 3.2% to 94.42 US cents/lb, which is the lowest monthly average since July 2006 when the price reached 88.57 US cents/lb. Prices for all group indicators fell in April 2019. Low prices discouraged sales in March 2019, and world coffee exports amounted to 10.98 million bags, 3.8% lower than in March 2018. Shipments in the first half of coffee year 2018/19 increased by 4.1% to 63.15 million bags, reflecting the ample supply of coffee on the international market. Shipments of Brazilian Naturals rose by 18.4% to 21.7 million bags, and Colombian Milds grew by 8.6% to 7.95 million bags. Exports from Brazil in the first half of coffee year 2018/19, fuelled by significant growth in its harvest and encouraged by a depreciation in the exchange rate, increased by 26.5% to 21.29 million bags, driving the growth in global exports. Between April 2018 and March 2019, world exports rose by 4% to 124.72 million bags. The exports in this period coincide with the crop year for a number of countries, including Brazil and Indonesia, the world’s largest and fourth largest producers

    Market fundamentals are one of the main drivers of the current low prices as coffee year 2018/19 production exceeds consumption by 3.69 million bags. This is the second consecutive season of surplus with a cumulative total of 8.35 million bags.

    So no luck in this round.  We're waiting for an event that knocks down production.  Notice the balance is just 4M bags, plus or minus out of 165M so 2.5% is the difference which means an event that damages just 5-10% of a major producer's crops could swing things in our favor.  Also, we're now below the level at which it's worth it for a lot of farmers to grow coffee so, if they switch to other crops or go on strike – we can win that way too.

    FTR/Batman – They have an annual meeting today and might change the board but here's what's in the report:

    Churn

    Since they bought the VZ assets, they have been getting churn under control but still losing 2% of their customers each quarter.  Revenues have been declining (of course) and all this was expected to happen because a lot of VZ clients were bound not to be happy suddenly being FTR customers and, when their contracts came up, they went to T or CMCSA or S or TMUS, etc and that means FTR had to also drop prices to retain customers as all those guys were coming after them hard. 

    revenue decline regression

    On the bright side, the decline in revenues is slowing but will it ever turn around is the question?

    What I really care about is Cash Flow and that is still generally under control:

    Op FCF Table

    People freaked out that Cash Flow went negative in Q1 but it's always negative in Q1 – it's Q2 that matters to see if they are turning things around.  CapEx is steady so no reason to think they won't:

    Capex

    And management would argue that they are shedding the least profitable customers so revenues go down but profits go up, which is a valid point.

    Churn Rev FCF

    Debt gets whittled away (as planned):

    Net Debt per Quarter

    Debt Summary 2019

    So they re-affirmed guidance which is the same guidance they gave last Q, which took us up to $3.

    They kicked the ball down the road but the big issue comes in 3 years, when they have $2.7Bn to pay off and then it's hell in 2024 and 2025 and that's the big concern – they still haven't really articulated a plan to pay this back although FCF would allow for steady payments to be made if they smooth it out.

    2,900/Mike – Well that went fast!  Going to test 26,000 again but I wouldn't bet on it too quickly.

    Yikes, /RB hitting $1.91 but the good news is we're going to fill our spread. 


  7. The One-Income Trap


  8. /MES – New S&P E-mini futures – 1/10th the size of a standard E-Mini contract. 


  9. CTSH getting interesting again.   They brought in a new CEO ( Humphries) with little / no consulting experience.  He kitchen sinked the year taking down the outlook provided be the company in Feb.    The Chaiman ( who was the CEO / Chariman  / founder) D'Souza is still with the company.   I've never heard the company talk so much about costs and efficiency on a quarterly call.   Humphries was with Dell and HP early in his career and  more recently with Vodafone… so he knows a lot about cost cutting which I'm not convinced the company needs.   I've had a long position that I am concerned about it  so I've taken to covering this for this year to salvage some of the recent dip in the stock.    I'll wait and see for a but.   My hope is that this guy works w/ D'souza to instill more discipline but still continue acquiring and focusing on customers.   This is the first time in 15 years of lining the stock that I'm worried about the direction.  



  10. Silicon Valley Is Coming for Your House



  11. STJ, you selling VXX calls up here yet?  Or waiting?  I was thinking of selling a 1/4 position.  January $50 calls look nice.


  12. /MES/Tshroy – Fun to play with, I suppose but I'd only end up buying 20 at a time.

    CTSH/Batman – When you cut costs in a service company you tend to make your people miserable and your people are the product you're selling and the good ones might leave – very tricky thing to handle.  

    Still $60 is $33Bn and these guys are certainly good for $2Bn in profits so a reasonable price and, as you noted, they really threw it all on the table this Q to clean out the books.  

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 8,843 10,263 12,416 13,487 14,810 16,125 16,323 16,839 17,878 +12.8%
    Operating Profit $m 1,678 1,885 2,142 2,289 2,481 2,801 2,647     +10.8%
    Net Profit $m 1,229 1,439 1,624 1,553 1,504 2,101 2,022 2,330 2,548 +11.3%
    EPS Reported $ 2.02 2.35 2.65 2.55 3.56 3.59 3.47     +12.2%
    EPS Normalised $ 2.02 2.35 2.65 2.55 3.66 3.82 3.65 4.03 4.42 +13.6%
    EPS Growth % +17.3 +16.6 +12.7 -3.8 +43.8 +4.2 -0.3 +5.61 +9.55  
    PE Ratio x           15.6 16.3 14.8 13.5  
    PEG x           2.78 2.91 1.55 1.14
    Profitability

    Quick turnaround or not, I like them down here enough to sell 10 CTSH 2021 $60 puts for $9 ($9,000) in the LTP to remind us to keep an eye on them (and get paid $9,000 for doing nothing).  Ordinary margin looks like $11,500 but that should calm down once they stop dropping.  

    Yikes, down $420.

    Bad break for Uber, looking to go public on Friday but we're done selling notes Thursday at 1pm and Powell speaks Thursday morning at 8:30 so maybe all "fixed" by then and, if not, Evans is speaking at 1:15 on Thursday to spin things back up regardless.

    $2.75 was the low on UGA – close enough (and still $2.80) but then we want to wait for $1.70 on the short $32s in the STP, now $1.10 and, if that doesn't play out, then we can sell Oct $32s, which are now $2 and we would just deal with the roll if we have to later.  The Oct $29s are $3.50 so the roll would cost us 0.70 at the moment and should go lower and lower as we close in or go deeper in the money. 

    Notice $70 is the bounce line on Brent (/BZ)


  13. TGE/Phil- any thoughts on this stock? it's paying 8% div


  14. TGE to high to its 52 week high for me


  15. I have been trading NOK for several years now.  Very stress free, as it trades in a 2-21/2 range

    Bought some stock at $5.04.  Sold the 6/21 $5 calls for .23 and the 6/21 $5 puts for.19.  Stock goes ex-divd on 5/31 by .196.  That's .61 income against a $5.04 purchase, or 12% in exactly 1 1/2 months if the stock closes above 5..

    Obligated to buy additional stock at $4.8 if below 5..  Would love to have the stock put to me, as I believe NOK will be a big 5G player in the next couple of years.


  16. Price if put to me would be $4.81 not $4.80


  17. OOPS again.  The .196 was last year's dividend.  


  18. Phil going through your UGA spread this morning Jul. 29/32 is 3000 not 6000!!! Is it not a bit to high for the spread and as well to high to sell a 32 put a lot of expectations?


  19. TGE/Dave – Midstream oil plays are pretty good but I don't know how long our current level of production will be sustained.  $24.50 is just about $7Bn and last year they made $137M and now Blackstone took them over and now they are PROJECTING forward profits of over $400M but even that is a p/e of 17.5, which is a stretch for a pipeline company – especially with all these other pipelines being built – what if people prefer using a new one or rates go down due to more supply of pipes?  

    Blackstone may also screw around with the model they use (MLP) and that can end up hurting common shareholders and, in fact, that's what I would do if I were an evil VC and didn't care about screwing the shareholders over to enrich myself.  

    The last two Qs were $60M so $240M is the run rate, not $400M but earnings are tonight so let's take a look tomorrow and see what kind of track they are on.

    NOK/Albo – They seem to keep finding ways to make money, I'll give them that.  Coming off 4 years that cost them almost $4Bn in losses means you won't be paying taxes for a long, long time but they just announced a Q where they lost $450M so I think I'd wait to see signs of a turnaround before jumping in.   Hopefully it's 5G investing that will pay off but, since EVERYBODY is making 5G investments – how is it going to be any better for companies than having LTE was?  It's just going to be something that they'd better have or no one will use them but it won't confer any particular advantage if everyone has it and it's the new standard.  

    UGA/Yodi – Yes but there's 20 of them and no, I don't think $32 is too high as it's $31 now and /RB is very low, was 10% higher last summer so that would be around $34 on UGA – I'm just saying we should be over $2.  

    Speaking of Oil and Gas – Apparently the Saudis said they would pump more to make up for Iran.  What sweethearts! (they hate Iran). 

    Dow down 550 at 25,850 – yikes!  1,580 again on /RTY along with /ES 2,873 and /NQ 7,616 with VIX (TOS version) at 21.20!   Got another 850 points to go before the next support (25,000).

    Nas testing 2.5% for the day at 7,600 – that's a good long line if you're brave!  

    Meanwhile, I called it on May 1st:

    AAPL should give the Nasdaq a boost this morning but we're still not back to 8,000 on /NQ (the 100) and 7,800 is the 20% line on the Nasdaq so we'll be watching that closely as well as the 1,600 line on the Russell (/RTY) and, maybe, S&P 3,000 if all goes very well.  Unfortunately, I can't see topping all those major lines without a pullback (Dow 26,750 will be in play as well) and this is a textbook 20% run for the year so even a weak retrace would bring us down 4% with a strong retracement giving us an 8% dip before we can consolidate for a move higer.  

    As the volume has been very, very low during this rally – I think it's far more likely we see S&P 2,800 tested again before we see 3,000 broken – the question is, what catalyst will it take to turn this market bearish?  This afternoon we have an FOMC statement and, since no one expects them to raise rates again in 2019, any language in that direction could cause a bit of selling.  

    On the other hand, the US and China are making nice trade noises and, although a trade deal will only put us back to where we were before all this started – it's still being taken as a reason to rally.  In our Portfolio Review (members only) I noted that the urge to cash out is growing very strong as our gains have been RIDICULOUS and can't possibly keep going at this pace but, then again, there's my Apple trade – how can I let trades like that go?  

    This is the trap we fell into in 1999 and 2007…


  20. Wow, I should do a swing trading website on the side:

     

    Green/Winston – Good call, I hope you bet it.  As to CMG, I'm pretty sure $720 is the right time to short it:

    Image result for crystal ball animated gif


  21. Now someone can tell me why my TOS chart says 5/3 and not 5/6 like the other symbols?  Very strange, the chart is right but the dates are wrong and it's not like that on other symbols.  


  22. TSLA is NOT in a good-looking pattern:

    $200 to $400 means retraces are $40 so $320 was the strong retrace and then you still go by the $40s so $280 but, if that fails, now you're looking at that having been the strong bounce off $200 (the failure we haven't hit yet but is now predicted) and $240 is the weak bounce line and that's already been showing weakness so very likely we go to $200 and then $160 is the overshoot (and I predicted $150 by next year so this is a bit soon) and don't forget this is all happening to them AFTER they raised $2.5Bn more – so people are really losing faith.


    • Disney (DIS -0.8%) has dropped an atypically heavy number of schedule changes on its film release slate, as it sets up for its Fox-y film future — and in the process looks to be claiming Christmastime for its own.
    • Now that it's taken possession of rights to Avatar (the all-time global box-office champion), Disney is delaying the release of Avatar 2 a year, to Dec. 17, 2021. And that will push back Avatar 3 from that date to Dec. 22, 2023 — and Avatar 4 to Dec. 19, 2025 and Avatar 5 to Dec. 17, 2027.
    • Meanwhile, while the Skywalker saga wraps up this Christmas with the ninth entry in that series, three more untitled Star Wars films will follow on Dec. 16, 2022; Dec. 20, 2024; and Dec. 18, 2026.
    • The result is alternating Avatar and Star Wars films each holiday season from 2021-2027.
    • A few Marvel changes come with Disney taking over Fox's X-Men series. The New Mutants will be delayed to April 3, 2020, and Gambit has been pulled from the schedule.
    • Elsewhere, Steven Spielberg's adaptation of West Side Story will come Dec. 18, 2020, and Cruella Dec. 23.
    • Stocks continue their decline and Treasuries rally, pushing yield down 2.45% to its lowest in more than a month, as trade tensions ramp up.
    • The 10-year Treasury yield sinks almost 4 basis points to 2.45% vs. 2.46% yield at noon ET.
    • The Nasdaq falls 2.2%, the S&P 500 -1.8% and the Dow -1.9% in midafternoon trading.
    • Earlier, bond king Jeffrey Gundlach told CNBC that he sees the chances of new tariffs on Chinese goods at "better than 50%."
    • DoubleLine Capital's Jeffrey Gundlach sees a "better than 50% chance" that the U.S. will boost tariffs on Chinese goods to 25% before the two sides reach a trade agreement, he told CNBC's Scott Wapner.
    • “Both the premier of China and the president of the United States want to come across that they prevailed and didn’t give in," he said.
    • Be prepared for a further stock sell-off on Friday, if, as President Trump has threatened, the U.S. ratchets up the tariffs on that day, Gundlach said.
    • Previously: Gundlach says it's still a bear market (March 12)

    • Beyond Meat (NASDAQ:BYND) is up 12.8% on the day and carved out a new post-IPO high of $85.00 earlier in the session. Just over a week ago, the IPO was priced at $25 per share.
    • Earlier today, Bernstein forecast that the alternative meat industry could be worth $40.5B in the next decade, The firm says if Beyond Meat can claim 5% of the market, it will have $2B in sales in 2028.
    • On a related note, options trading on Beyond Meat starts tomorrow.
    • Three-quarters of internet ad spending went to the top 10 ad-selling companies, according to a new Interactive Advertising Bureau report.
    • The IAB doesn't name the companies, but eMarketer had projected Google (GOOG -1.1%)(GOOGL -1.2%) to hold 37% of the U.S. digital ad revenue by year's end while Facebook (FB-1.6%) grabs 22%, and Amazon comes in third.
    • IAB says U.S. internet ad revenues totaled $107.5B in 2018, the first time it topped $100B. Mobile ads were up 40% Y/Y to $69.9B and digital video ads grew from $11.9B in 2017 to $16.3B.
    • Social media ads were up 31% to $28.9B, but that spending was slowing and fell "well below" the 47% CAGR of social from 2012 to 2018.
    • Data privacy regulations could prove to be a major headwind for the ad spending, says IAB
    • The biggest banks are steering clear of a banking reform legislation that would make it easier for cannabis companies to open checking accounts or get business loans, the Wall Street Journalreports.
    • The SAFE Banking Act, making its way through the legislative process, would protect banks that handle cannabis funds from prosecution, even though the drug is still illegal on a federal level.
    • The sticking point is large banks' government-mandated and compliance obligations. With cannabis transactions still illegal under federal money-laundering rules, big banks aren't willing to take risks until the drug is fully legal in the U.S., especially not after recent big settlements over money-laundering violations.
    • No major bank publicly supports the bill's passage and any contact between them and members of Congress about the bill were initiated by the lawmakers, the WSJ says.
    • So with big banks keeping their distance, smaller U.S. players, such as state banks and credit unions, are the ones who stand to benefit if the legislation passes.
    • A combination of disappointing earnings reports (BMW, Adient) and more trade jitters are taking a heavy toll on the auto supplier sector as 33 of the 36 publicly-traded names with a market cap of over $50M are in negative territory.
    • BAML has its eyes on the tariffs overhang. "We maintain our cautious stance on the auto industry, but especially the automotive suppliers, as the threat of trade friction creates incremental structural risk to auto companies’ business models," warns analyst John Murphy. He observes that trade issues put pressure on the auto value chain even before volumes crack, which could pressure multiples and limit upside potential to auto stocks.
    • Notable decliners include Cooper-Standard Holdings (CPS -5.2%), Dana (DAN -2.2%), BorgWarner (BWA -2.3%), Autoliv (ALV -2.8%), Veoneer (VNE -6.1%), Delphi Technologies (DLPH -3%), Goodyear Tire & Rubber (GT -1.8%), Adient (ADNT -7.8%) and Tenneco (TEN-2.1%).
    • Crude oil prices plunge as rising worries over U.S.-China trade talks spark concerns about global growth and demand for oil: WTI -1.8% to $61.11/bbl, Brent -2% to $69.86/bbl.
    • WTI crude is "still riding a roller coaster" following yesterday's rebound but despite the decline, prices remain "above the technically significant $60/bbl round number support level," says Colin Cieszynski, chief market strategist at SIA Wealth Management.
    • "After reversing and closing higher [yesterday], it gives technical traders a formidable support point to work off," says Price Futures analyst Phil Flynn. "$60/bbl now looks like the support point, because if you can't take that out with trade war and tariff threats you are definitely not going to take it out if a trade war is averted."
    • Despite recent volatility, some analysts remain confident oil prices will stabilize and could even rally further if OPEC extends production cuts currently scheduled to run through June.
    • The Federal Reserve isn't poised to cut interest rates to combat inflation that's running below the central bank's target of 2%, Fed Vice Chairman Richard Clarida told Bloomberg Television.
    • "We think the policy in place now will get us there," he said in an interview.
    • Comments from Randal Quarles, the Fed's vice chair for banking supervision, also played down concern over the weaker-than-expected inflation, saying that transitory factors are contributing to the soft inflation number.
    • "We don't see a strong case to move rates in either direction," he said.
    • Starbucks (SBUX -0.2%) traded at an all-time high of $78.72 earlier in today's session as investors brushed off concerns of the upcoming Luckin Coffee IPO and any implications from the U.S.-China trade difficulties to take the long view.
    • Looking ahead to the full year, Starbucks expects global comparable sales growth to be up 3% to 4% and for about 2.1K new stores (net) to be added to the system.

  23. Here's something strange, /KC is very low but JVA (Coffee ETF) is up 8.5% today.  Someone knows something…


  24. Hi Phil,  

    Would you be looking for another 5%-10% lower before starting to play indexes higher? Thx


  25. The only things in the green today are hedges and put spreads. I like the idea of  finding companies that are likely to tank no matter what happens because they make money if the market goes up and they make more money if it goes down. I’ve played Tesla short a few times and it’s always been good to me. Very tempting since it seems likely that it’ll burn through the new cash in about 4 quarters and I don’t see anything on the horizon other than short-livesd hype that will turn the share price around. Anyone have other ideas on good shorts? I missed CMG at $720…


  26. Lower/Sun – It's very tricky to call as this is a self-inflicted wound by Team Trump that could reverse with a tweet – it's coinciding with the technical correction I expected last week and, as noted above, we do seem to be on the way to 2,850, which is the 5% correction from 3,000 and, if we were going to make a 150-point, 5% correction then the weak bounce off 2,850 would have been 2,880 and strong is 2,910 so those are the in-between lines to watch and, so far, 2,910 wasn't much support and we failed 2,880 to so it does look like 2,850 is very likely to be tested before we're done.  

    The next 5% takes us to 2,700 and that's a bit less likely but certainly not out of the question as we fell to 2,350 at Christmas.  If there is no trade deal and China retaliates – that becomes much more likely and even back to Christmas lows is very possible. 

    Keep in mind that, in the grand scheme of things, all of this is a very minor correction off the run from 2,000 (the point I was making last week).  

    Shorts/Dawg – As I just said, self-inflicted so could whip right back up, which is why I prefer hedging with the ultra-short index ETFs as they are pure protection for a balanced portfolio.  NFLX is still over-priced by a mile, trading at over 100 times earnings with competition from all sides:

    Already I'm at the point with my kids where if they want a new service, they have to drop one of the old ones as we have NFLX, Hulu and Prime and some game thing – enough is enough so NFLX bulls think they are bullet-proof but my kids would drop them for the next great thing that comes along.  While $15/month isn't a big deal, it's not the only one and people do notice and now AAPL has a thing coming out and there's CBS All-Access and dozens of others all vying for position.

    Meanwhile, I have to run for a meeting with the Dow now down 600 – looks like we will test 2,800 on /ES very soon! 


  27. Hi Phil.  REITS taking big hit.  Prelude to higher rates?   TLT trade?


  28. Put/Call ratio didn't reach an extreme today, probably indicating more weakness ahead.

    But we could be just a tweet away from a strong rebound.  It's difficult to trade in a headline driven market.


  29. SPY volume last two days double that of previous 20 day average.






  30. 25 Part-Time Business Ideas



  31. Good morning!

    Turning down yet again.  Notice the volume comes back when there's selling but still very low:

    Date Open High Low Close* Adj Close** Volume
    May 07, 2019 290.15 290.81 285.81 287.93 287.93 144,487,700
    May 06, 2019 289.25 293.31 288.90 292.82 292.82 107,198,100
    May 03, 2019 292.82 294.34 291.30 294.03 294.03 56,543,700
    May 02, 2019 291.68 292.70 289.52 291.18 291.18 65,030,200
    May 01, 2019 294.72 294.95 291.80 291.81 291.81 71,671,900
    Apr 30, 2019 293.49 294.34 291.92 294.02 294.02 81,111,700
    Apr 29, 2019 293.51 294.45 293.41 293.87 293.87 57,197,700
    Apr 26, 2019 292.10 293.49 291.24 293.41 293.41 50,916,400

    REITs/Taihu – Very tough to call, especially TLT, though we did used to short it at the $130 line, as that was just silly so $125 not too bad for a speculative short on higher rates (one day).  The problem is you have a President packing the Fed (or trying to) who would like to see rates go negative to boost the economy, which is the only positive Trump has to talk about.

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