Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Friday Flip Flop – Warsh Calls for Rate Cuts – Market Continues to Panic

This is too funny.

They can't get anyone on the actual Fed to call for a rate cut so they bring back Ex-Fed Governor Kevin Warsh to call for an "IMMEDIATE GLOBAL RATE CUT" and, if that isn't enough, CNBC interviews him and Joe says "You know there are rumors you are going to be the next Fed Chairman."  We've been through this dance before – no matter how much Donald Trump wants to put "his guy" on the Fed to throw money (borrowed) at every problem (like he did with his casinos before they went bankrupt) – he doesn't have the right to force Powell to resign.  It's one of the very few checks that remain on Trumps power – now that the GOP Senate has become his Yes Man.

Warsh is yet another Republican talking head from the (and you can't make this up) Hoover Institution, where most of the Fellows seem Hell-bent on repeating the mistakes that led to the Great Depression – as if Hoover is some kind of Economic hero to be revered, rather than reviled.  This is the last bastion of Trickle-Down Economics in America or, as Bush the 1st liked to call it "Voo-Doo Economics" or, as Trump likes to call it "Loans from Dad".  

Since 2016, Warsh has been one of Trump's economic advisers – and look where it's gotten us! 

Where it's gotten Warsh, however, is married to Jane Lauder, granddaughter of Estee Lauder, who is worth $2Bn – so they do know a lot about trickling on poor people, at least…

“This thing’s moving pretty darn quickly,” Warsh said. “At the very least, a statement on Sunday night before Asian markets open would buy them a little time and let us all learn a little bit more about where things are.”

Image result for federal reserve ammunition cartoonWarsh agrees with my take that the Fed doesn’t have a lot of ammunition to help markets and the economy, but he thinks that means it needs to act quickly in a coordinated fashion with other Central Banksters like the European Central Bank, the Bank of England, the People’s Bank of China and the Bank of Japan but I think they CB's only have one big save left and, if this virus continues to spread rapidly, we're heading into a Global Recession and they'd better save their ammunition for that.  

Nothing would be worse than the announcement of massive stimulus and then more viral outbreaks leading people to think not even the Fed can save us – THEN you will see some panic selling!  Warsh's comments have actually made things worse as it's perceived he's speaking for the Fed and that Fed is now looking ineffective – exactly the trap that the ACTUAL Fed Governors were trying to avoid falling into!

Image result for federal reserve ammunition cartoon

We'll see if this rumor of more Fed bailouts will do the trick but I doubt anyone is going to go into the weekend long in HOPES (not a valid investing strategy) that the Fed now has the power to wipe out viruses and fix Global Supply Chain issues.  Infections are up to 83,774 this morning and deaths are 2,867 with 36,654 recovered so that means 7.8% of the outcomes are DEATH so far – a little worse than the numbers the CDC and WHO like to throw around because they divide deaths by infections – even though most of the infections are too recent to know if the patients will recover (it's been a very slow process). 

Fortunately, we have some really good hedges protecting our portfolios, which began with our Jan 23rd post titled: "How We Are Hedging China's Coronavirus Crisis" where our first hedge was:

  • Buy 20 FXP June $50 calls for $7 ($14,000)
  • Sell 20 FXP June $65 calls for $2.50 ($5,000)
  • Sell 5 FXP June $50 puts for $4.30 ($2,150)
  • Sell 5 CHL Sept $45 puts for $4 ($2,000)

That was a net $4,850 spread and, so far, with the China Ultra-Short (FXP) now at $61 and CHL at $40, the $50/65 spread is $12.25/5.25 for net $7 ($14,000) and the short $50 puts are $2 ($1,000) and the CHL puts are $6 ($3,000) for net $10,000 – that's up $5,150 (106%) in the first month and it's a $30,000 spread so another $20,000 still to be gained if all goes well – that's a nice hedge!  

Since that spread can still return $30,000 on $10,000 – it's still a good hedge to protect us from a further downturn and it makes sense to stick with FXP as China is the epicenter of the outbreak (for now) and their economy is likely to be seriously impacted through Q2 (June).  

I still love China Mobile (CHL) as a long-term hold but now there are a lot of US companies on sale as well but we'll stick with CHL for now and set up a new FXP hedge as follows:

  • Buy 30 FXP June $55 calls for $9 ($27,000)
  • Sell 30 FXP June $65 calls for $5.25 ($15,750)
  • Sell 5 FXP June $55 puts for $3.50 ($1,750)
  • Sell 10 CHL Sept $42.50 puts for $4 ($4,000)

We got a better price on CHL so we're selling more and our net entry on this $30,000 spread is $5,500 and the spread is $15,000 in the money to start so not too bad with a potential gain of $24,500 (445%).  The risk is being assigned 1,000 shares of CHL at $42.50 ($42,500) and those are already down $2,500 but we can roll them along and CHL is probably not going to disappear with their 900M customers any time soon.

Our other primary hedges are the long Nasdaq Ultra Shorts (SQQQ), and we also shorted Tesla (TSLA) and Chipotle (CMG) as well as our Trade of the Year, which was a long on Barrick Gold (GOLD) and that, of course, is working out fantastically for our readers (you're welcome!).

We'll be adding some more as the day goes on so stay tuned.

Have a great weekend, 

- Phil


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. Happy Friday!

  2. As a quick reference, the NYSE was at 11,300 when Trump took office. It's now at 12,547, up 11% in 3 years. Clearly Dow and S&P up close to 30% in that same time period (good but not best ever by a long shot) but confirmation that this has been a very narrow rally boosted by few names like Apple, Amazon, Google and some other tech giants.

  3. Spot VIX over 40 now – no one is worried at all…

  4. NatGas at $1.72 – what is that. I guess sick people don't need to heat their houses! 

    It does look like Q1 GDP will need to revised looking at the price of commodities – they don't indicate robust activity.

  5. Still on track with my VIX/VXX prediction, but margin is expanding quickly. Thankfully, lots of cash available. But great time to sell more long dated, far out calls! The Jan 22 50 calls could be over $5. VXX at 50 would the VIX at 160. That zombie apocalypse time… 

  6. APT – Up huge again !

    This small company couldn't produce enough masks to justify this price.

  7. This is the fee to short APT.

    Please note: The estimated annualized rate to sell short is 46.5%.

  8. Bought back the MLPQ I sold yesterday for $11.58.

  9. pandemic trade idea 

    short BFAM   Bright Horizons child care 

  10. VCRA   could benefit   

    Vocera Communications, Inc. provides secure, integrated, and intelligent communication and workflow solutions that empowers mobile workers in healthcare, hospitality, energy, and other mission-critical mobile work environments in the United States and internationally. The company's communication solution integrated with other clinical systems, including electronic health records, nurse call systems, and patient monitoring, as well as to provide critical data, alerts, alarms, and clinical context that enable workflow.

  11. Unbelievable – closing in on another 1000 point loss! Best stock market ever for short sellers!

  12. That's one heck of a weekly candle:

    Back to where we were at the start of 2018!

  13. Spot VIX closing in on 50! I wish I could bring myself to sell some puts now but as Phil said, in 2008, the bounce after the first 20% drop was in fact another shorting opportunity.

  14. Phil / /CL-

    Is there a level you would target to go long /CL?  42.50 seems like a solid base but given the state of the world are we in a 'wait & see' situation.  Thx!

  15. Cool website to keep track of cruise ships some have webcams

  16. Phil/ Short term trade ideas

    Any ideas on any short term trades?  Kind of too late to short things.  Should we wait for some kind of bounce to short?  Any thoughts on what price you would pick up AAPL, MSFT, NVDA ?

  17. Good morning!

    You can see why there's no substitute for CASH!!!  24,750 on the Dow – that's crazy – that's our -10% line (on the button) already!

    That's why we call them "Must Hold" lines – if they don't hold – we're screwed!  Seriously next week we may have to revert to the old levels as that might be the new "normal" going forward.  This is what happens when you build a house of cards, thin-volume rally with no regard for the underlying Fundamentals (or lack thereof). 

    And what STJ said.

    APT/Albo – Will be a good short when things calm down but lots of new cases today: 1,000 more in China and 500 more Globally – that's much worse than 800-900 total yesterday.  NOT under control.

    Shorts/Stock – I do expect emergency stimulus this weekend from someone.  Shorts are a bit dangerous. 

    /CL/EMike – Will we use oil next year?  Sure but consider that there's been no interruption in production while consumption if falling off a cliff so the surplus builds and builds and that will take a long time to burn off and OPEC still hasn't really committed to deeper cuts so I'm not guessing the bottom – tempting though it may be.  We do have USO longs and those I'm willing to roll with but Futures too risky.

    Webcams/Kustoms – Wow, we have such cool tech these days.  Great for Somali pirates to make sure the ships don't have escorts. cool

    Short-Term/Rookie – As above, waiting to see what the Global Response is over the weekend.  We are mainly cash and waiting to pick up the pieces, no hurry to jump in as you don't know where the bottom is and I'm not going to try to guess on a 4,000-point down week.  

  18. This would be what the old lines look like! 

  19. Great perspective, StJ, thanks.

  20. stockbern/BFAM – How do you short it – via put purchase or a put spread or outright short the stock?

  21. There was a very large commercial gold short position.  Many people ignored it.  The hedgers were right.

    Also spec long interest was at an all-time high, a very crowded trade and viola !

  22. vkat    Haven't actually looked into shorting it yet.  Just an idea that popped into my head, thinking parents would want to keep their kids out of daycare if things get worse. That has not happened yet here but it did in Japan.  Im guessing either method would work, but short selling stock varies depending on your broker.

  23. ELMD  another company that could benefit, though not performing well in this market

    Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy and related products that apply high frequency chest wall oscillation therapy in pulmonary care for patients of all ages in the United States and internationally. The company offers SmartVest airway clearance system that consists of an inflatable therapy garment, a programmable air pulse generator, and a patented single-hose that delivers air pulses from the generator to the garment to patients with compromised pulmonary function; and SmartVest SQL System that provides advanced generator programmability and an enhanced pause feature with save, lock, and restore functionality. It also provides single patient use SmartVest and SmartVest Wrap products for health care providers working in intensive care units; and Aerobika, an oscillating positive expiratory pressure device. The company offers its products primarily to home health care market for patients with chronic lung issues, including bronchiectasis, cystic fibrosis, and neuromuscular disease. Electromed, Inc. markets its products primarily to physicians and health care providers, as well as directly to patients. The company was founded in 1992 and is headquartered in New Prague, Minnesota.

  24. Add SVXY to the buy list

  25. XAIR

    Beyond Air, Inc., a clinical-stage medical device and biopharmaceutical company, develops nitric oxide (NO) delivery systems to treat respiratory tract infections and other diseases. Its NO delivery systems are used for the treatment of pulmonary hypertension of the newborn, bronchiolitis, and nontuberculous mycobacteria. The company was formerly known as AIT Therapeutics, Inc. and changed its name to Beyond Air, Inc. in June 2019. The company is based in Garden City, New York.

    Nitric oxide inhibits the replication cycle of severe acute respiratory syndrome coronavirus.

  26. Rolling all my 2021 puts to 2022 puts to capture premium spike  SKT 13's  F 7's  trying to get 3 for 2022 NLY 10's


    Apple CEO Tim Cook says China factories are close to resuming full production, according to NY Post.

  28. Image result for south park tweek animated gifSTP now up $70,000 and LTP is down $86,000 – still good.  Great for a 4,000-point drop actually.  Not too much pressure to act into the weekend in that case but maybe we can tweak our hedges.  

    That guy's name is Tweek, by the way, his parents own a Starbux and he drinks coffee constantly…

    Anyway, LTP was $527,138 last week (so down $100,000 since) and STP was $62,305 and that gained $130,000 so, actually, the hedges are REALLY working.  This is how the STP got to be up 600% in the last series – same thing – the hedges doubled us up on the dips and then the LTP recovered without us needing to move STP money in so we just ended up getting more and more money in the STP every time the market dipped.

    Other portfolios have some damage but no big losses (below our start) so far so all is well as things go on sale. 

    Gold/Albo – Big pullback today. 

    China/Albo – The trick is can they stay open without incident through next week?

    APPL came down nicely:

  29. kustomz – way cool site! thanks

    stockbern / XAIR – all they do is deliver ntirous?

    BFAM – having been a BH customer I can tell you most parents would keep their kids at home in a voluntary self quarantine situation (especially if they are also home from work) but still pay the fee to hold the spot for whenever quarantine ends. They would be a better play on any general recession (massive loss of jobs) because that's when a parent coming out of work would stop paying the fees and do the child care themselves. There's obviously a bunch of more generic ways to play a general recession, like QQQ DIA SPY puts/shorts, etc.

  30. I'm getting pretty mega short term bullish. Might risk a few longs going into the weekend! 

  31. APPL/China opening factories is very much like that scene in Jaws.

  32. With RCL and CCL coming back today it might be the Shock and Awe phase is coming to an end. The long emergency phase is still on us though.

  33. Update on VXX/VIX – So far things are going a little better than I expected with a spike this high. My VIX calls are up 6x so far, and the delta keeps rising on the protection. Out of an abundance of caution I moved a portion of my 2021 30 calls to June 2021 37s this morning just to temper the delta a bit, even though I have tons of margin available. If we keep going up my expectation is that the gains on my VIX calls will start to overwhelm the losses on VXX. Will give another update next week. 

  34. Where can I get a jacket like the mayor of Amityville?

  35. Hello

    sold my vxx spread—accidentally bought put instead of call —:-)

  36. Hi Phil,

    Is there a price of AAPL or BRK.B where you would become interested? I have a sold AAPL put with a $290 strike expiring April that I'm thinking about rolling out but have not done so yet. And I wouldn't mind getting into BRK.B at some point but I'm guessing you like them much lower? Thx

  37. I hope someone is shorting these 50 point /ES rips, wow.

  38. Bullard ( Fed I think came out and said if there is a pandemic rate cuts were possible… but that economy is doing well….   not sure if this is what spiked things

  39. VXX / Palotay – I have not rolled anything yet. I still think that the 30 calls are pretty safe until VIX is closer to 60. Still tons of margin available and many rolls options. I was surprised to see these OTM VIX calls showing some profits. Unreal.

  40. With RCL and CCL coming back today it might be the Shock and Awe phase is coming to an end. The long emergency phase is still on us though.

    The Naz went positive briefly but harshly rejected. That's flashing a signal we could shed another 1000 on the Dow today! Oh no!

  41. The trick is deciding when to book the profits on my VIX calls. They expire in March and April, and the theta is immense. If I sell the March ones, I can't count on the April's having a ton of delta with this much time to expiration. Right now my plan is to wait to see how things look next week. 

  42. Going viral: Six charts and the $6 trillion loss

  43. batman – the Feds might juice the markets with a coordinated buy

    China beige book worse than anyone thought possible

  44. GOLD    seeing 5000 May $19/18 short strangles for about $2.50-  looks interesting 

  45. One more crazy thing, if the VIX is at 60-70 in a couple weeks, my long $50 VIX calls will be worth $10-20, from a 0.12 basis. $1200 can turn into $100-200k. Talk about leverage! Obviously the more likely event is things calm down, and I take a total loss on them. 

  46. snow – thanks for posting about this

  47. If the Feds announced a MAJOR stock buy right now, that would work out very good for me. C'mon Trump you know your only chance at re-election is a strong stock market…. DO IT!!!!!

  48. Yes, we need another QE. Where is the tweet from the twit when we need it?

  49. VIX / Palotay – And if the VIX reaches 120, you'll be a one crash millionaire…

  50. Again, down 500 looks like a relief…

  51. Another weak bounce and Europe is down 4% at the close so I'm not enthusiastic.  I just did my reading and didn't find any good reason for that bounce we just had. 

    These are good ideas, Stock, just not ready to buy yet.  

    SKT/Bert – Did we finally find a floor?

    RCL/BDC – This is "coming back"?  This is why we have a 5% Rule – to stop people from thinking bounces are comebacks….

    Let's say $120 was the natural line and that's 50% up from $80 so that makes sense and that means $80 is your must hold line and we have 8-point bounces and an 8-point overshoot to $72 so weak bounce is $88 and strong is $96 and they weren't much support on the way down.  Not that I don't love RCL down here – it's just that we don't know this drop is over by any stretch.   

    Prices/Sun – I learned that lesson in 2008, just because you get "good" prices, doesn't mean you should catch a falling knife.  When they form a floor, THAT will be a good entry though 40% down I think the risk will be minimal anyway.  

    AAPL was traded by Millions of people, some of them pretty intelligent, who had hundreds of Billions of Dollars to trade with for years and, they topped out at $170 in 2017 and $220 in 2019 (back to $140) and then suddenly $300 in 2020 (end of 2019).  Is that in any way justified by profits going from $48Bn to $59Bn in 2018 – sure, that's good for 20% so let's say $220 is fair. but last year was $55Bn and this year, MAYBE $59Bn again though doubtful with the virus so why should AAPL be higher than $220?

    Year End 28th Sep 2014 2015 2016 2017 2018 2019 TTM 2020E 2021E CAGR / Avg
    Total Revenue

    182,795 233,715 215,639 229,234 265,595 260,174 267,683 281,192 309,719 7.31%
    Operating Profit

    52,503 71,230 60,024 61,344 70,898 63,930 66,153     4.02%
    Net Profit

    39,510 53,394 45,687 48,351 59,531 55,256 57,527 59,885 65,143 6.94%
    EPS Reported

    6.45 9.22 8.31 9.21 12.2 11.9 12.7     13.0%
    EPS Normalised

    6.45 9.22 8.31 9.21 12.2 11.9 12.7 13.6 15.7 13.0%
    EPS Growth

    +13.6 +42.8 -9.88 +10.8 +32.6 -2.65 +6.09 +14.5 +15.3  
    PE Ratio

              23.0 21.6 20.1 17.4  

              1.59 1.49 1.32 1.69  

    This is why we didn't get back into AAPL this cycle, it's too expensive for where it is in the cycle so it's just a stay away stock and coming down from completely ridiculous to slightly ridiculous doesn't suddenly make them a buy.  

    Same with Berkshire, they they have come back closer to their 2017 highs so I'd be more likely to start with them than with AAPL – especially knowing Buffett can go shopping again.

    China Beige Book/BDC – I thought that was possible.  How could it not be is more the question?  As I keep saying – this on top of the corporate and consumer debt crisis they were barely containing is likely too much for them to handle.

    SoKo/Snow – So more testing means more viruses found.  That's not actually encouraging.  

    They played a soccer game in Italy today in an empty stadium – just the players, no fans allowed.  

    Empty stadium

    A match, minus the spectators, in Milan on Thursday.

  52. The Bug/Phil – more found is better, trust me, I'm an epidemiologist!  ;)

    You have to know what's going on. Otherwise you get surprised by, "oops, how did that happen, we had no idea." And right now it's looking like at least 80% of found, diagnosed cases are mild. Good to know, right?

  53. Uh oh we could shed 1000 points in 3 hours again…

  54. RCL / I meant it was just "bouncing back" and it's up 3.5% while the Dow is still -2.9% so it *might* be a canary in the coal mine that the market loss is overcooked and could rebound, but to be clear, the rebound play was just for today and *possibly* into Monday but certainly not long term. 

    I wouldn't buy AAPL outright until it's under 150.

  55. snow – 80% mild is a great number but a concerning number is the % needing hospitalization. We have 700-800k staffed hospital beds in the US (which are usually some amount full, like 50%?) and if 10M become infected we cannot care for 2M folks needing oxygen, antivirals, ventilation, etc

  56. Man, they are selling every bounce! 

  57. In the meantime, I wonder how much money big IB like Goldman and others are making trading these huge moves! 

  58. Phil/TLT

    TLT @ 155…where was it in 2008?


  59. Also, 7 down days in a row! I wonder if historically there is a number where you get one up day after so many red candles! The same thing happened in December 2018 and we have a huge rally in the next session and there was an off day in between (Christmas) so maybe a rally after the weekend! Hard to see much positive coming over the weekend though. There is more risk of negative news IMO.

  60. it's a real possibility this whole Trump market was an Emperor with No Clothes. There's a difference between his fake news and reality. If that's been exposed there's nothing the admin can do to stop this slide. We could see Dow 18000 or lower.

  61. Don't want such a huge drop on the market BDC but if that's the price to pay to get rid of Trump, I might take the chances. And historically, markets do better with Dems anyway. Even socialist Kenyan Muslims :-)

  62. The pricing is crazy right now. Twice today I have tried buying put spreads and it won't fill at my price. So, I move the price up $0.05 and then it fills below my previous offer. Nuts!

  63. Israeli scientists are possibly weeks away from a coronavirus vaccine, however another 3 months after that for production.

  64. VIX closing on 50 again! This has been a real day trader delight – up and down 500 points! 

  65. Trillions in wealth were tied up in the markets, this was bound to happen. Although, not at the pace witnessed this week. The folks that win in the markets have won and those that hold the bag…

    Its possible we can see 12/19 levels.

  66. *12/18 levels

  67. The Bug/vaccines – I cannot think of an outbreak where a vaccine or cure have been of any use. It's always a fairly low-tech, environmental (rather than clinical or individual) fix. So, give people sick leave, prevent large gatherings, fix the damn water supply in Flint, take the handle off the Broad Street pump, set up a scheduling app so people with MERS don't congregate in the Samsung hospital ER waiting room. Epidemic control ain't rocket science.

  68. Like Phil has said,  when things go really bad, you will want water filters. 

  69. Mild/Snow – Well mild might mean a lot of undetected transmission so we'll see.  As I've said, it's all statistics to me and as long as I see the infection rates climbing outside of China with higher daily deltas – I remain worried.

    Bouncing/BDC – You can fool some of the people all of the time and that's why weak bounces happen.  It's all proportional, 3.5% sounds great but they were at $137 in Jan and now $72 is down $65 so the bounces should be $13, which would be 20%, not 3.5% of $65.

    Selling/StJ – Biggest volume day yet.  Probably around 300M at close.

    Date Open High Low Close* Adj Close** Volume
    Feb 28, 2020 288.70 297.89 285.54 289.86 289.86 244,180,633
    Feb 27, 2020 305.46 311.56 297.51 297.51 297.51 282,744,800
    Feb 26, 2020 314.18 318.11 310.70 311.50 311.50 194,773,800
    Feb 25, 2020 323.94 324.61 311.69 312.65 312.65 218,913,200
    Feb 24, 2020 323.14 333.56 321.24 322.42 322.42 161,088,400
    Feb 21, 2020 335.47 335.81 332.58 333.48 333.48 113,788,200
    Feb 20, 2020 337.74 338.64 333.68 336.95 336.95 74,163,400
    Feb 19, 2020 337.79 339.08 337.48 338.34 338.34 48,814,700

    TLT/Pat – That's a possible sign of maximum panic.

    Filling/Daveo – That's why I haven't bothered the last few days – just sticking with the Futures (just 2 short /NQ at the moment).

    Vaccine/Stock – That's hammering GILD but that's because GILD doesn't say they have a vaccine when they don't.  I very much doubt those guys are legit.  

    Scientists started work on drugs to treat coronaviruses during the SARS and MERS outbreaks, but because the outbreaks died down, the job was never completed. Now, they’re able to dust off that old research and start building on it. The leading candidate is a drug called remdesivir, which was developed by the pharmaceutical company Gilead. Research showed that it could block SARS and MERS in cells and in mice. In addition, remdesivir was used in a clinical trial looking for treatments for Ebola — and therefore, it had already gone through safety testing to make sure it doesn’t cause any harm.

    That’s why teams in China and the US were able to start clinical trials testing remdesivir in COVID-19 patients so quickly. There should be data available showing if it helps them get better as soon as April. If it proves effective, Gilead would presumably be able to ramp up production and get the drug in the hands of doctors fairly quickly, Krammer says.

    The vaccine development process will take much longer. Experts say that it will be between a year and 18 months, or maybe longer, before they’re available to the public. One of the strategies for creating a vaccine involves making copies of one part of the virus (in this case, the bit that the novel coronavirus uses to infiltrate cells). Then, the immune system of the person who receives the vaccine makes antibodies that neutralize that particular bit. If they were exposed to the virus, those antibodies would be able to stop the virus from functioning.

    The pharmaceutical company Moderna is the furthest along in the process; it already has that type of vaccine ready for testing. A trial in 45 healthy people to make sure that it’s safe will start in March or April and will take around three months to complete. After that, it’ll have to be tested in an even larger group to check if it actually immunizes people against the novel coronavirus. That will take six to eight months. And then, it’ll have to be manufactured at a huge scale, which poses an additional challenge.

    Very true Snow. 

  70. Phil / C-Virus interactive map – You showed a map in the webinar this week forom Johns Hopkins – I found it and thought I had saved it – had the world map with a graph showing total cases and new cases etc for the world.  During the webinar it was at the top of my search but now can't find ti. – can you please post a link?

  71. VKAT – Map – Thank you!   this goes in a permanent window…. 

  72. WOW – WFC hit 40


    AT&T (T) – 34

    PFE – 33

    PM 80

    MO 39

    KO- 51

    LMT – 352

  74. Federal Reserve Will ‘Act as Appropriate to Support the Economy’

    Fed Chairman Jerome Powell signals central bank is prepared to cut interest rates if needed



  75. Thanks VKat, that's it. 

    WFC/Batman – That's scary.

    It is truly amazing how fast sentiment can change – especially when it was irrationally bullish.

    Powell/Batman – I disagree, he also said the economy is still strong – so it would be INapproprate to cut rates now but they will if they have to.


    And here's Powell watching the Dow after he made this statement:

    Image result for chris farely gif

  76. I was long some VIX calls that came into the money during the vol-pocalypse a couple years ago. I don't remember the specifics but I did not make much on that move, though it looked like I'd won the lottery premarket. I do remember the market for VIX options seeming a little bit broken that day.

  77. Dollar is down 1% in two days, but it's not helping.

  78. Poor Corona

    Some American beer drinkers are avoiding Corona, the beer, amid the deadly coronavirus outbreak, according to a new survey.

    A surprising 38 percent of beer drinkers insisted that they would not, under any circumstances, buy Corona as the deadly virus spreads across the globe, according to the survey conducted by 5W

    Well informed citizens. 8-)

  79. QCOM – Love the weeklies on this.  Bought a Jan 21 Leap some time ago and have been selling the weeklies. With the stock at $77 you can sell next week $80 at $1.85.  Rinse and repeat every week.  Even with stock moving down my average cost has been dropping quickly on the Leaps. 

  80. Trump admin pushing for a tax cut, Fed rate cut, we could easily hit 35k in the DOW by year end. 
    Sarcasm, not so sure. 

    STZ actually had a press release that sales of Corona are up 5% in the past 4 weeks.

  81. So Phil if we expect this to keep going would you close out an AAPL 2021 200/240 spread?

    Roll it down? I mean a year ago we were at $200

  82. Would love to be a fly on the wall in the oval office now! There must be real panic.

  83. And also, deficits are already projected to be over $1T! How much would a tax cut and slowdown add to that deficit. Not that it matters to the GOP until there is a Dem in the White House. But this would not look too tidy come November.

  84. Kustomz – That was obviously before they found out the truth !

  85. Gold /GC getting destroyed also…interesting…

  86. Sold 1/2 of MLPQ bought $12.14.  Keeping 1/2. 

    Just fiddling while Rome burns.

  87. While its interesting and exciting to watch this house of cards crumble, I just wanted to echo snow's comments and recommend that if you haven't before, to start thinking about taking care of ourselves and our immune systems.  Which means getting at least 7 hours of sleep, eating a healthy, nutrient and vitamin-rich balanced diet, getting lots of Vitamin C, and also trying to stay relaxed and staying happy.  Believe it or not studies show laughing actually enhances our immune system!  So watch some comedies or cat youtube videos. (the stock market's been making me laugh recently too, although its derisive) The best way for us to deal with this thing is for each and everyone one of us have our immune systems running at full potential.  Have a good weekend.

  88. China PMI this weekend, expecting 45 from 50 last month.


  89. Corona/Albo – You wouldn't believe how many of the old people here in Florida won't go to Chinese restaurants now.  

    Corona/Kustomz – What do they say about publicity?  As long as they spell the name right…

    Cuts/Kustomz – Even if that's true, I bet they want to time it more for the election, rather than actually trying to help the economy just because it's the right thing to do.

    AAPL/Coulter – I wouldn't, I'd be happy to roll the 200s to 2022 and wait for this to pass.  AAPL should hold $240 or at least get back over it by then.

    Deficit/StJ – We're heading to $1.5Tn at this pace.  

    Dow down 962 with 15 mins left – it's going to be close.

    /GC/Sun – Yes,very strange that gold is tanking.  

    Poor Aramco:

    Poor /NG!

    Well, a little comeback into the close to avoid a down 1,000 day but certainly not a great week for the market.

    Have a great weekend, 

    - Phil

  90. 10-year 1.129% – Another week like this and we could go negative!

  91. Only down 400 points – victory!  

  92. Some profit taking by shorts at the close.

  93. Good deal – I thought I would have had to redraw the lines this weekend! Saved by the bell…

  94. Profit taking: I was looking at a huge day, went to get something to eat and come back and I'm down $10,000 because the YM shot up 800 points in 20 minutes!! Crossing fingers it comes down as fast as it went up!!!

  95. I would not take advice on timing the market from Kudlow. In 2008 he was still talking about the Bush boom and downplayed the crisis. And then told people to sell after Obama got elected because the market would not recover with Obama's policies. Him saying that it's time to buy makes me want to sell…

  96. Outbreak starts to look more like worldwide economic crisis

  97. China data portends more punishment for bruised stock markets

  98. Feds reject removal of 4 US Northwest dams in key report

  99. Coronavirus Tests Limits of Central Bank Firepower

  100. There goes the first poor person within the US to die from the virus. A man in Seattle?  (Strangely Trump said it was a woman, a wonderful woman…?)   

    What does this mean for the markets Monday? 

  101. I would hope one person isn’t going to spook the market, but you never know…

    South Korea up to 3,500 cases.

  102. Whatever happened to the tariff war with China? Sure haven't heard much about that lately….

  103. The Bug – news out Korea that I thought was a nasty rumor turns out to be true. Members of the cult that started the outbreak (and who had frequent visits with cult members in Wuhan – airfare from Daegu to Wuhan is like $50) who are symptomatic or contacts are going to other churches with the intent of spreading the disease so that their cult doesn't look so bad and their role in the outbreak is obscured. This isn't just some members going rogue; it's on orders from their leadership. Man, Korean cults are a major, major problem. That ferry disaster a few years back was associated with a cult corporation as well.

  104. The Bug: This is an excellent article on the Korean situation. I shudder to think what might happen in the US – probably not, but the differences in access to care are stark.

  105. snow:  Yeah, there were videos floating around of folks in China deliberately spitting on elevator buttons and hospital staff.  I think there a lot of, dare I say, "deplorables" who just become nihilistic in times of strife.  I guess thats why its hard to contain these epidemics despite all the policies the government might implement.

  106. Spooked: too early to say but got my $10k back this afternoon when futures trading started. In the first minute…

  107. /RB & /CL – Been wondering if there is a relationship between /CL and /RB that one could use to see if the two are out of whack with each other such that one might be able to predict if /RB might go up or down based on the price of /CL. Looks like it might be /CL divided by 42 plus $0.40, roughly, and if /RB is priced significantly off this price then it might move toward the mean. Has anyone else thought about this?

  108. A very astute and insightful assessment of the economic effects of the coronavirus by Mohammed El-Erian: 

    He always has great takes.  He thinks that unlike financial disruptions which can be fixed by central bank easing, this time monetary policy will not be effective and neither will fiscal stimulus.  Any hopes of a V-shaped recovery are over.  And there will be long-term effects in terms of further de-globalization, less travel and less migration.  

  109. Dawg daddy  hope you closed your position going back up right now

  110. We're up on stimulus talk again but just talk so far.  

  111. Trump picks Ratcliffe as top intelligence official, again

  112. How Coronavirus Is Already Being Viewed Through a Partisan Lens

  113. /RB/Dawg – They do tend to correlate and, more importantly, oil usually moves ahead of gas intraday but, over the long-term, gas moves ahead of oil as demand for gas drives demand for oil but is steadier in the short run.  I don't think you can really put a formula to it but there's a thing called the "crack spread" you might want to keep your eye on.


  114. S&P Dividend yield exceeded yield on 30 year Treasuries on Thursday.  Only other time this happened was briefly during the 2008-2009 crash:

  115. Bertil – I was sitting with my finger on the buy (to close) button when trading started Sunday evening. I expected it to move quickly one way or the other. Decided also that trading futures when the market is moving like it was Friday afternoon was more like playing blackjack than trading so lesson learned there and just happy to get out with my hide