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What Now Wednesday – Trade On? Again?

Wow, it's like a soap opera!  

Bloomberg now has a newsletter called "Terms of Trade" that tries to keep up with the ever-changing nonsense each morning.  I read it so you don't have to but, if you ever want way too many details – have at it.  I mostly ignore the noise and chime in when it seems significant but this week it seems constantly significant, unfortunately.  

In yesterday morning's PSW Report, I said the S&P 500 (/ES) Futures would fall to 3,075 and they hit that pretty much on the button around 10:30.  Though we illustrate the point using charts, PSW does not use or believe in TA at all – we just use our handy, dandy 5% Rule™ and the rest is just math.  That math is more accurate than 100 TA guys and it only takes us a few seconds to tell you what's likely to happen (and how to make money playing it).  

In fact, in yesterday's Live Member Chat Room, at 11:37, I said: "We can play /RB (Gasoline Futures) bullish again over $1.585 with very tight stops below" and, in the Morning Report, I had already predicted: "I have a feeling the White House will at least try to walk back Trump's comments before the S&P (/ES) fails that 3,000 line and 1,585 has been very bounce for the Russell (/RTY) – so it's a great place for a bullish bet with tight stops below."

As you can see from the Gasoline Chart above, we just crossed back over $1.585 early this morning and, so far, it is holding up against a weakening Dollar while the Russell (/RTY) is already back at 1,611 – up 26 points which is good for gains of $1,300 per contract already and I'd put a stop at $1,100 and be very happy with those gains (and a stop on /RB at $1.59 now, to lock in $220 per contract gains with a trailing 0.005 stop).  

See – not so hard to make money in the Futures and you can join us this afternoon at 1pm, EST for our Live Trading Seminar and, hopefully, we'll have some fun and profitable things to trade then too.  

Since we're still near the record highs I think it's safe to tell you why I think these levels are still silly.  Forget China trade, that's really just a $125Bn tax Trump has put on 330M Americans ($378/citizen) so he can redistribute it to his rich friends like Dooh Nibor (Robin Hood backwards).  It's annoying but it isn't killing the economy – even for people who only make $30,000 a year – that's 1% of their income stolen by the President but all those 1%s add up big for the Corporate Citizens Trump serves and his buddies are adding 2.5-5% to their bottom lines in handouts from their buddy Trump – a great return on their campaign contributions!  

Meanwhille, Personal Income continues to rise (just as it has been for 10 years) as more people get back to work and State by State enacts higher and higher minimum wages BUT it's a bit of an illusion as Personal Income includes MASSIVE amounts of Transfer Reciepts – which are $2.6Tn worth of Dividends and Interest that almost completely accrue to the Top 5% – without those – you get a drastically different picture of REAL Personal Income:

That's true with Retail Sales as well.  Holiday shopping numbers include an 11.5% increase in Porshe sales with Cayennes (my car) up 52.4% from last year (am I an influencer or what?).  Other luxury cars are also doing very well as are companies like Tifanny's (TIF), who are being bought by Louis Vuitton (LVMUY) for $16Bn, Nordstom's (JWN), etc.  Private Jet sales were over $30Bn this year – a new record – just look how many were parked at Davos for the Climate Summit….

To keep that in perspective, Southwest Airline (LUV) only had $22Bn in total sales last year and Tesla (TSLA) sold $21.5Bn in cars last year so yes, that's a big number in the Retail Space.  You can see the Super Bowl in Miami this year (Feb 2nd) AND go to the Pre-Game Party for just $20,250 per person but I've seen packages for over $100,000 including a few other perks so don't cheap out if you don't have to.  8)  All these ridiculous numbers that benefit perhaps 1 out of 1,000 of us (Top 0.1%) are all a part of those "improving" retail sales numbers 

uncaptionedWhile you are on Amazon (AMZN) shopping for that Alexa Speaker or back massager, ssome people are using it to buy Rolex Watches for $60,000, Micky Mantle Cards for $85,000, etc.  In fact, 70% of Americans with incomes of $150,000 or more are Amazon Prime Members vs 40% of households below $50,000.  Prime Members spend an average of $1,300 per year vs $700 for non-Prime Members.   

Amazon Prime Video has over 100M Global Subscribers and will pass HBO (130M) within 2 years and perhaps sooner as Amazon is in the midst of rolling out Prime Now, which is aiming for 1-2 HOUR delivery service including groceries from Whole Foods.  After that, they'll have to just stand outside your home with a truck full of stuff you might want to get any faster…

Notice the chart says Amazon wants to "change your behavior".  They want to get you into the habit of NEEDING to have things you want within 2 hours, they want you to stop planning your meals, stop having batteries around the house, stop worrying about running out of toilet paper – Amazon wants you to as dependent on them as a toddler is on its Mommy.  Sure it's probably a terrible idea for society – but it will be great for Amazon's sales!

The only company that knows you better than Facebook is Amazon because Facebook only knows what you like and what you want – Amazon knows what you NEED….


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  1. Good Morning!

  2. Good morning, All!

    It's webinar day! 1pm (eastern), here:

  3. Good morning!

    /RB blasted up to $1.61 – that's enough for me! 

    Don't forget inventories at 10:30 are always a wild card.  

  4. Phil, nice call on /RB !

  5. We Are Not Winning the Trade War

  6. ‘Serious misconduct’ by Trump takes center stage at hearing

  7. Finally!

    Frontier +6.1% with CEO change seen as positive step

    • Frontier Communications (NASDAQ:FTR) is up 6.1% in first action after its change of the CEO guard, with recent Frontier financial adviser Bernie Han taking over for Daniel McCarthy.
    • Cowen is reacting positively to the change, saying the shift is "another logical step" to a potential reorganization.
    • As creditors reportedly push for a debt reorg, Cowen's Gregory Williams expects Han would only take the job with some guarantees, such as a formalized plan.
    • And that would require buy-in: If an out-of-court unsecured swap happened, the company would need broad support for it to avoid bondholder/shareholder lawsuits.
    • He has a $1 price target, now implying 45% upside.
    • The take is much the same at Citi, though the firm is bearish despite the progress made with a new CEO. The company is a seller of shares and says Frontier needs to invest in full-fiber capabilities to keep up with competition – which may not be possible under the current capital structure.

    Frontier CEO McCarthy exits

    • Frontier Communications' (NASDAQ:FTR) chief executive officer and president is stepping down from his positions and from the board.
    • Daniel McCarthy has resigned, and the board has unanimously appointed Bernie Han as president/CEO and to a director's seat, effective immediately.
    • McCarthy had spent 29 years with the company, including the past four at the helm. "I leave knowing the company is in great hands with Bernie at the helm of this skilled and dedicated organization. I remain a firm believer in Frontier’s future," he says.
    • “As we continue to take action to improve Frontier’s operational, financial and strategic position, now is the right time to transition leadership," says Chairman Pamela Reeve.
    • Han had previously served as CFO, COO and executive VP of Strategic Planning at Dish Network. He's been an adviser to the Frontier board on financial issues since Oct. 16.

    ISM service index

    US PMI Services Index

    Truck orders soft in November

    • Truck orders are estimated by ACT Research to have fallen in November.
    • Combined NA Classes 5-8 intake fell 15% M/M and 38% Y/Y during the month on a nominal basis. Preliminary North America Class 8 net orders were down 20% M/M to 17,500 units, while Classes 5-7 orders fell 8% M/M to 15,300 units.

    Postmates cuts jobs amid tightening IPO environment

    • Postmates (POSTM) has laid of dozens off employees and closed its Mexico City office, according to CNBC sources.
    • The several dozen layoffs included people in San Francisco HQ, Los Angeles, Nashville, and other offices. The company has about 1,300 employees.
    • Postmates statement to CNBC: "We made the difficult decision to end operations in Mexico City as we focus on our continued growth in the US. We continually review our business to ensure that staffing is aligned with current business needs and have made small adjustments as a result."
    • Postmates submitted a confidential IPO filing earlier this year. The IPO market belt has tightened in the wake of WeWork's failed debut and the weaker than expected launch of Postmates competitor (UBER -0.4%).
    • Rival GrubHub (GRUB +1.1%reported a downside Q3 in October with soft guidance due to deteriorating fundamentals.

    Atlas Research positive on Altria

    • Atlas Research talks about the upside on Altria (MO -0.3%) and why bears may have it all wrong in a detailed interview with Seeking Alpha Pro+.
    • Atlas Research notes the company's Q3 per unit profitability in the combustibles segment grew by 20.4% Y/Y, despite incurring a 6.6% decline in volumes. Notably, the combustible segment operating income grew by 12.5% to record the fastest growth rate in the last four years.
    • "Altria has upside from virtually every conceivable future scenario of nicotine consumption trends. On the one hand, if vaping regulations push more consumers back towards traditional tobacco products, Altria wins from better prospects in its core tobacco business. On the other hand, if the vaping industry returns to growth, Altria will participate through its Juul stake," reads the bullish summary by the research analyst.

    Major shakeup at Expedia

    • Expedia Group (NASDAQ:EXPE) announces the resignation of CEO Mark Okerstrom and CFO Alan Pickerill, effective immediately.
    • Chairman Barry Diller and Vice Chairman Peter Kern will oversee the company's executive leadership team, managing day-to-day operations, while the Board determines the long-term leadership of the company.
    • Chief Strategy Officer Eric Hart will serve as acting CFO.
    • The company also announces a new share repurchase authorization for up to 20M million shares, which is on top of the 9M shares available under the current buyback plan.
    • Barry Diller on the shakeup: "Ultimately, senior management and the Board disagreed on strategy. Earlier this year, Expedia embarked on an ambitious reorganization plan with the goal of bringing our brands and technology together in a more efficient way. This reorganization, while sound in concept, resulted in a material loss of focus on our current operations, leading to disappointing third quarter results and a lackluster near-term outlook. The Board disagreed with that outlook, as well as the departing leadership's vision for growth, strongly believing the Company can accelerate growth in 2020."
    • Diller says he will be buying shares in Expedia as an indication of his confidence in the company's new path.
    • EXPE +4.15% premarket to $103.50.
    • Source: Press Release

    Model X earns top safety score in Europe

    • Tesla (NASDAQ:TSLA) says the Model X landed a 5-star safety rating from the European New Car Assessment Programme, which evaluates a car's safety assistance features as well as its ability to protect adults, children and vulnerable road users. The Model X earned the highest overall rating to date in the 2018-2019 protocol for the class that includes large off-road vehicles.
    • The Model X is still the only SUV to ever receive a 5-star safety rating in every category and sub-category from the U.S. National Highway Traffic Safety Administration.
    • Shares of Tesla are up 0.57% premarket to $338.10.

    Rare Apple bull sees declining iPhone retention

    • Maxim says the firm's survey shows Apple (NASDAQ:AAPL) facing declining iPhone retention rates.
    • The data "shows a concerning rise of outflux of iPhone users" to 9% from 5%. The influx rate falls from 13% in 2017 to 7%.
    • The survey increases Maxim's confidence in its Sell rating and $190 price target. Apple has a Bullish average Sell Side rating with only 6 Bearish-equivalent ratings out of the 44 total.
    • Apple shares are up 1% pre-market to $261.91.

    Ford making parts from McD's coffee waste

    • Ford (NYSE:F) and McDonald's (NYSE:MCD) are teaming up on a sustainability partnership, in which the automaker will use coffee chaff from the Golden Arches to manufacture car parts like headlamp housings and other components.
    • In addition to making vehicles a little "greener," the chaff – the waste produced by coffee during the roasting process – will also help make parts that are 20% lighter and provide the company with up to 25% energy savings.

    BMW brand sales rise 10.2% in November

    • BMW (OTCPK:BMWYY) brand unit sales +10.2% to 31,213 units.
    • BMW passenger car sales down 3% during the month to 16,014 units.
    • BMW light truck sales advanced 28.6% to 15,199 units.
    • Total BMW of North America up 7.6% to 34,280 units.
    • YTD BMW brand sales grew 4.5% to 289,080 units.

    U.S. solar industry lost 62K jobs, $19B in investment on tariffs – report

    • The U.S. solar industry (NYSEARCA:TAN) has lost 62K new jobs and $19B in investments because of the Trump administration's tariffs on imported panels imposed nearly two years ago, according to a new report from the U.S. Solar Industries Association.
    • The SEIA report comes ahead of a Thursday meeting at the International Trade Commission that could decide whether Pres. Trump makes changes to or even cancels the four-year tariff that was imposed in early 2018.
    • "Solar was the first industry to be hit with this administration’s tariff policy, and now we're feeling the impacts that we warned against two years ago," says SEIA President Abigail Ross Hopper.
    • Despite the tariffs, global panel prices have continued to fall due to an oversupply in top producer China, while U.S. prices are among the highest in the world for solar, according to the report.

    JNJ says no asbestos found in baby powder

    • Tests conducted by two third-party labs show asbestos was not present in the single bottle that the FDA's contracted lab tested, nor was it present in retained samples of the finished lot from which the bottle was produced.
    • Further, JNJ's (NYSE:JNJ) investigation showed the testing protocol at said lab deviated from standard practice.
    • Shares are up 0.6% after hours.
    • Source: Press Release

    U.S. crude supply fell 3.7M barrels last week, API says

    • The American Petroleum Institute reportedly shows a draw of 3.72M barrels of oil for the week ending Nov. 29.
    • Gasoline inventories reportedly show a build of 2.9M barrels, distillate inventories show a build of 794K barrels.
    • Energy Information Administration data to be released tomorrow is expected to show crude inventories declining by 700K barrels last week, according to S&P Global Platts.
    • January WTI crude recently was $56.23/bbl in electronic trading after settling at $56.10/bbl.

    GoPro +2% on strong Black Friday sales

    • GoPro (NASDAQ:GPROreports a Y/Y sell-through growth of 30% based on available data from its larger U.S. retail partners and 20% based on European retail partners during the week of Black Friday.
    • For the entire Black Friday and Cyber Monday period, GoPro says total camera unit sales grew more than 120% Y/Y with the HERO8 Black accounting for 90% of total sales.
    • GPRO shares are up 2.3% after hours to $3.95.

    Alphabet's Page steps down; Pichai to lead Google, Alphabet

    • Alphabet (GOOGGOOGL) says Larry Page is stepping down from his co-CEO position, and Sundar Pichai will be CEO of both Google and its parent company.
    • "With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure," Page and co-founder Sergey Brin say in a post.
    • We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President.

    Natural gas gains on colder weather forecasts

    • Natural gas futures (UNG +4.3%) close +4.8% to $2.44/MMBtu after some climate models predicted a sweep of cold weather across the Midwest and eastern two-thirds of the U.S. within the next two weeks.
    • Some analysts are not convinced today's gain will last; Ritterbusch and Associates says it is "not yet seeing any below-normal [temperature] expectations and in the absence of such forecasts, additional price gains will likely prove limited."
    • Today's boost comes after the natural gas price plunged nearly 16% last week for its largest weekly decline in more than a decade, hurt by ample supply levels and milder than expected temperatures.

    Oil prices surge ahead of OPEC production talks

    • Crude oil (USO +3.4%) powers higher amid optimism that the OPEC+ group could approve deeper production cuts when they meet in Vienna this week, with further support from industry data showing a larger than forecast drop in U.S. crude stockpiles.
    • January WTI +3.7% to $58.18/bbl; Brent +3.4% to $62.89/bbl.
    • "A deeper cut is being preferred by a number of key members," Iraq oil minister Ghadhban told reporters in Vienna.
    • "Amid trade war uncertainty, OPEC will be even more determined to maintain a floor on oil prices and will work to deliver precisely that outcome," surmises Stephen Innes, chief Asia market strategist at AxiTrader.
    • Meanwhile, OPEC's November crude exports excluding Iran reportedly fell to their lowest level since July, shipping an average of 14.79M bbl/day – 970K bbl/day below October levels and the lowest since July.

  8. Looks like a 5Mb draw in oil but a 3.4M build in /RB and a 3.1Mb build in Distillate - so glad I took that money and ran overall. 

  9. Crude inventory draw top estimates

    • EIA Petroleum Inventories: Crude -4.9M barrels vs. -1.7M consensus, +1.6M last week.
    • Gasoline +3.4M barrels vs. +1.8M consensus, +5.1M last week.
    • Distillates +3.1M barrels vs. +1.1M consensus, +0.7M last week.
    • Futures +3.71% to $58.18.

    The funny thing is the only person who said trade talks are going well is Trump – yet the market acts like he's telling the truth…

    If Trump is averaging 15 lies a day – what percentage of the time is he actually telling the truth?  Does he even say 20 things a day?  It's certainly not a safe bet…

  10. And once again, one of Trump's buddies is long futures I am sure! They are using the White House as piggy bank!

  11. Good for our VXX shorts though!

  12. Indeed Palotay – these 70 short calls are probably already showing like a $3k profit!

  13. Wow:

    Chesapeake Energy gets $1.5B lifeline; shares spike 15%

    • Chesapeake Energy (CHK +14.9%) surges on news it secured a $1.5B term loan facility - a lifeline for the company that issued a going concern warning a month ago.
    • CHK says it plans to use the loan proceeds to finance a tender offer and consent solicitation for notes issued by Brazos Valley Longhorn and to fund the retirement of Brazos Valley's existing secured revolving credit facility.
    • CHK says the transactions should improve its financial flexibility, as they will allow Brazos Valley and its subsidiaries to support CHK's current and future debt.

    We're back to that pattern of pre-market gains on no volume and then flatlining into the close – it's the story of most of our up days.  

    • Dow 27,400 was weak, strong 27,500 
    • S&P 3,090 (weak), 3,105 (strong) 
    • Nas 8,340 (weak), 8,380 (strong) 
    • RUT 1,600 (weak), 1,610 (strong)  

    So just the Nas is betraying the bulls – the others are over strong but they have to be over them for 2 straight closes (without failing) to be truly recovered.  

  14. Pretty quiet board today!

  15. It's the tryptophan!  

    Thanks 1020.

    Hopefully it's because people are watching the Webinar.  We went over the portfolios – very solid positions in there – I'm very happy with what we have. 

  16. Phil,

    Any idea/news why Csco is dropping today (Qual, etc are up) ?


  17. Phil,

    Regarding csco, meant QCOM is up, not QUAL.

  18. Red Flags for Robinhood

  19. What will an ice-free Arctic look like?

  20. Tired of OPEC Laggards, Saudis Threaten Oil-Output Surge

  21. Good morning! 

    Futures up again for no particular reason.

    CSCO/8800 – Back on the 14th, they gave weak guidance and, since then, have gotten a lot of downgrades.  I like them down here (another cyclical that people simply have no patience for) and have been waiting for a good bottom to jump in – this could be it.

  22. Under Pichai, Alphabet’s moonshot projects may face more scrutiny

  23. AP FACT CHECK: Trump suddenly loses interest in stock market