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What Now Wednesday – More Trade BS Halts the Rally

Image result for not again coyote animated gifNot again!  

Now Trump is "considering" Huawei-like sanctions on Hikvision (a $37Bn company) and Zhejiang Dahua Technologies, sending both companies limit-down 10% this morning, even though the US is only 5% of Hikvision's sales.  Other companies are supposedly on Trump's "list" but they have not been disclosed.  

Meanwhile, yesterday, China's President Xi toured a rare-earths manufacturer, likely to point out that China actually has us by the balls as they supply 90% of the rare materials that make electronic manufacturing possible.  

On his tour, President Xi was shown on state television on Monday accompanied by his emissary to the trade talks with the U.S., Liu He. Stock prices of companies associated with the industry soared in China in anticipation of a potential increase in prices of the materials.  Beijing exerts critical influence on the supply of rare-earth materials. The 17 elements have high-tech uses: neodymium for permanent magnets in mobile phones, terbium in LED lights and dysprosium used to cool nuclear rods, for example. Though the minerals are found in abundance in many parts of the world, processing them into materials is often highly polluting, sometimes releasing radioactivity. China holds that production chain.

This whole thing could be part of a brilliant plan by Trump to manipulate the situation to allow him to lift the environmental restrictions on rare-earth mining in the US. and Texas Mineral Resources Corp. (TMRC) is one company that would greatly benefit from such a decision.  I don't usually play penny stocks, but this one could be fun at 0.27, as they would certainly be in the right place at the right time if Trump can play the "national security" card (again) to allow TMRC and others to begin strip-mining America.  That's certainly worth a few board seats for the Trump family down the road, right?

We already began the day shorting the Dow in our Live Member Chat Room, my note to our Members at 7:06 am was:

/YM is a nice short below 2,850 if /ES is below 2,860 and /NQ is below 7,450 and /RTY is below 1,545.  We're pretty flat at the moment but the Dollar is at 97.84 and, if it breaks over 98 – a lot of things you buy Dollars with will collapse.  

At the moment (8:05), we already have a 50-point gain and that's good for profits of $250 per contract and we can cash that in and now watch the S&P (/ES) as it tests the 2,850 line and that can be our next short if it fails (with tight stops above).  There's no particular bad news other than the above and the market seems to generally shrug off trade issues – despite how ridiculous that is.  

Gasoline (/RB) is still down at $2.07 in the front-month contracts but we're playing July's /RBN19 contracts and they are at $1.985 and we love them long this morning with the EIA Report coming at 10:30.  Natural Gas (/NGV19) is also a buy at it tests $2.65 ($2.59 on /NG).  Saudi Arabia (Aramco) just signed a deal to buy Liquefied Natural Gas (LNG) from Sempra Energy (SRE) at a rate of 5 MILLION TONS of LNG EACH YEAR for 20 years.  A Million tons of LNG is about 48Bcf so 240Bcf from just one deal – almost 10% of US storage!  

Silver (/SI) just hit $14.45, which is a nice gain of $500 per contract since we featured it in yesterday morning's PSW Reportyou're welcome!  Gold (/YG) has also blasted higher, now $1,276 and +$6 on gold is good for gains of $193.20 per contract – aren't Futures fun?

Remember:  I can only tell you what is likely to happen and how to make money trading it – the rest is up to you…

It's really not complicated, we use the same principle of Fundamental Investing we apply to stock but on a much shorter-term basis and then we apply intelligent cash-management techniques to minimize our losses while we occasionally luck out and have really good gains.  Despite underperforming so far (because the API Report showed a big build), we really like our /RBN19 play on Gasoline Futures the best.  That hardly ever fails into a holiday weekend though today looks to test that theory.

After the EIA report there will be the Fed Minutes at 2:00 but, before then, We have speeches from Williams, Bostic and Kaplan and Bostic already said yesterday that the December Rate Hike may have been a mistake – and he's supposed to be a hawkish one!  

We have a Live Trading Webinar at 1pm, EST for our Members – I think it's going to be a fun day to trade.  


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  1. I think that the market bias is downward now but I also think that this administration will try anything to prop up the markets including trying to influence the Fed or add more lies because the only thing keeping Trump over 40% is the economy and by extension, the markets. 

  2. Morning, All!

    It's Wednesday, and you know what that means…? Webinar day!

    Join Phil at 1pm here:

  3. Impeachment Is Coming

  4. Carriers Begin Dropping Huawei Handsets as U.S. Crackdown Bites

  5. Good Morning!

  6. Phil,

    Based on API, do you not think we’ll get to 2.05 on /RB?

  7. Good morning!  

    Big Chart – NYSE held the 200 dma (barely) and that's the story so far.  Either the NYSE goes under or the RUT goes over – that's how we'll know which way things are heading…

    And what StJ said.  Are the desperate enough to bend over and accept China's version of a trade deal?  That remains to be seen but, as I predicted, China told Trump to F off and there's no signs they are even talking at the moment.

    /RB/Japar – Well based on API, I'm less sure but I don't think things like FACTS And MEASUREMENTS matter much when you are heading into a holiday weekend so, most likely, they'll jack the price up regardless of the actual Fundamentals so, of course, I'm still long.  

    Had to take the /KCZ19 money as we tested $100 – doesn't pay to be greedy.   Hopefully there will be another pullback to get back in.

    /SI pulled back to $14.42 but all good if $14.40 holds.  

    ROFL on Soybeans!  

    See, that was a strong retrace and now back up quickly:

  8. What’s at stake in this week’s European elections?

  9. U.S. Postal Service Is Testing Self-Driving Trucks

  10. Teddy Roosevelt: "Speak softly and carry a big stick."

    Donald Trump: "Lie constantly and carry a little stick."

    Image result for trump stormy daniels cartoon

    This is cool stuff, these guys and Holomid are both selling similar 3D Display systems – very cool for trade shows and stuff:

    Hemp Boca has a big Trade Show in mid June in NYC so I've been looking at what's cool for displays these days.  

  11. Mnuchin says we're meeting with China at the end of June so markets are moving back up a bit. 

    That's why we took the quick money off the table (again)!  

  12. collosal oil build

  13. terrifying drop in RBOB

  14. should we dd on rb phil or wait

  15. please help re /rb oh great one

  16. /RB- Personally I’m going to DD at 1.965 but if that fails I may reverse. 

  17. thanks dd im hoping to hear phils take on the eia report as to how important it is

  18. Mnuchin / Phil – This is another example of what these guys do. At the slightest market weakness they come back to the China deal well… How often are we going to get fooled. The boy has cried wolf 20 times now… 

  19. ???where is phil???  hope all is well

  20. My todays plays

    EMN bought stk for 70.91 and sold the Jul 72.5/70 strangle for 4.60 Monthly combined return 3.6%

    Made offer for new M stk @ 21.65 and Jan 21 23/20 strangle for 6.75

    NEP stk for 45.90 sold Jul 45 straddle for 3.40 combined montly return 4.2 %

    QCOM sold Aug 65 put for 2.90 now 3.00!!!

    CM sold Sep 80 put for 2.56 now 2.75!!!

    Vertical OXY sold Jul put 50/47.5 for .62

  21. Trust Phil having lunch before the storm!!!!

  22. Tesla looking real weak.  Here is an interesting thread speculating about why it isn't down even more:

  23. Sorry guys, I've been talking in yesterday's chat!  Now doing the webinar…  crying

  24. no sound on webinar, any one else having sound problems?

  25. Same here. No SOUND!

  26. Webinar will restart at 1:30 – technical problems. 

  27. Hey everyone! Phil had to reboot. He'll be back into the webinar in a few minutes!

  28. I was saying that /RBN19 is down $2,700 on two contracts but I'm going to add one more around $1.95 to have 3 at $1.97(ish) and then just 0.02 out of the money is not that hard to make up and, due to timing of inventory report (through 17th), I think it's just a matter of the holiday results not hitting until next week and, again, there's always July 4th.

    Still, I have a broad concern about our entire Government collapsing after that Trump insanity…

    Back to the Webinar (I hope). 

  29. I'll put up a brand new link in a minute for a new webinar instance. Use that since the old one is having issues.

  30. Hi Phil,  LB is down sharply today.  Just pre-earnings jitters?  What are your expectations for earnings?  Do you still feel as strongly about LB?  Thanks.

  31. LB/John – We'll have to see with earnings but the short $35 calls in the LTP are 75% done at $1.15 so let's buy those back and in the OOP, let's buy back 7 (of 15) of the short $27.50 calls as well.

  32. I still have the 2 long /RBN19 with a $1.9815 avg and I won't add another (1) unless it drops me to $1.97 so about $1.95 is my spot to add.   It's about 0.02 lower than the front-month contract.


    The math for the stocks of 5/17 are still wrong on the Petroleum Status Report, should be more like 1,908 - massive difference so I don't see any reason not to be bullish.  Goes for /CL too at $61 and I'd DD around $60 and stop below that line or if /BZ fails $70, which should come sooner.  

    And Honey badger got bit by a snake!

    Maybe if the Pound stops collapsing:

    Due to the massive error in the EIA report, I think Oil (/CL) and Gasoline (/RB) Futures are oversold at $61.20 and $1.986 respectively.  July is the front-month contract now, /CLN19 on oil but /RB runs 6 more days in the June contract (/RBM19) and I prefer to play July (/RBN19), which happens to be 0.02 cheaper at $1.963.

  33. Plays/Yodi – Thanks for picking up the ball.   I really like CM at this price.  Very nice dividend on them.

  34. The founder and chief executive of Huawei Technologies Co. says the U.S. government is underestimating the Chinese tech giant, and within a few years no one will be able to catch up with its 5G technology.

    Speaking Tuesday to China’s state broadcaster China Central Television, Ren Zhengfei said a reported move by the Trump administration to temporarily ease export restrictions against Huawei was meaningless, as the company has already made preparations for such an eventuality, including stockpiling chips. He also said Huawei could make its own chips, though that doesn’t mean it intends to stop buying U.S. chips.

    Zhengfei said Huawei’s 5G technology would not be affected by a U.S. export ban, and that within two to three years, no company will be able to match its 5G technology.

    “The current practice of U.S. politicians underestimates our strength,” he said, according to a translation by TRT News.

    Ren said retaliation from the U.S. was inevitable. “We sacrificed [the interests of] individuals and families for the sake of an ideal, to stand at the top of the world,” he said, according to the South China Morning Post. “For this ideal, there will be conflict with the United States sooner or later.”

  35. NTAP down about 10% on lower earnings and lower guidance.  

    QCOM got clobbered today (and all week):

    STMP got killed again today:

    I don't get that one, I see them running around and making partnerships all over the place. No one's willing to give them a chance.  The MADE $136M in Q1 and, at this price, you can buy the whole company for $624M.  Very possible AMZN does as it fits in with their plans to expand shipping and take on UPS/FDX.  Buying them for $1Bn is rounding error on Bezos' divorce papers…

  36. TSLA down to $190 after hours.

  37. Added some short $22 LB puts into earnings – crossing my fingers that this after hours earnings rally holds. Everyone deserves a break in there at this point!

  38. Bought 200 shares of LB at lows sold on pop after hour for  quick 500.00 to offset my sold put  paper losses

  39. Existing Home Sales Decline AGAIN

  40. Powell Just One Global Central Banker Under Political Pressure

  41. William Barr just caved

  42. Good morning!

    I got my wish (and more) for /RBN19 at $1.935 so 3 now at $1.9515 avg.

    Down over $3,000 on 3 (as expected) but I do like my premise for next week.  I think there's panic selling in the front-month over low demand and it's about to roll over so that contract is dragging ours down at the moment.  Oil is weak too, testing $60 and also a great long and that one you can play with tight stops below the line so safer than the conviction play on /RBN19.

    Dollar over 98 is causing the collapse in everything else I warned you about the other day so we'll just have to ride it out.

    ECB sees inflation, even though our Fed does not.  

    DB is worrying people again. 

    Barr caved and will turn the Mueller Report over to Congress – unredacted with underlying evidence collected – that's probably why Trump had a melt-down yesterday.

  43. /SI – Finally just took off back toward $14.60

  44. Phil, I realize not directly related but what would a 20% S&P decline mean for SQQQ?  And what would that SQQQ change do to ATM SQQQ calls?