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Make or Break Monday – Oil Cuts, Virus Counts and Emerging Markets

Global GDP tracker suggests a sharp downturnIt’s a make-or-break moment.”

That is according to former IMF chief economist Maury Obstfeld who went on to say: “This may be the greatest global crisis we’ve faced in the postwar period.”  Having all taken steps to support their individual economies, failure by the leading Group of 20 countries to now act together could consign the world to “reservoirs of disease” and trigger outward migration from poor countries on “a biblical scale,” said Obstfeld, now a professor at the University of California, Berkeley.

Social distancing and hand-washing are not options in countries where having your own room and running water are luxuries few can afford.  The IMF says emerging markets will need Trillions of Dollars worth of aid from developed nations or they will simply become long-standing viral hot-spots that could re-infect the rest of the World at any moment.  We are, indeed, all in this together!

We'll hear more about this at the IMF's annual meeting, which starts tomorrow.  At the same time, emerging markets are facing a massive liquidity crisis as they don't have Central Banks that can simply crank up the printing presses when they need to throw money around.   Capital has simply flown out of Emerging Markets and is continuing to do so and those are the people who supply a lot of the parts and materials that make American factories run.

While I could write a whole article on that crisis and it's implications – we don't have time because we need to talk about the Oil Crisis, which also affects Emerging Markets.  This weekend, OPEC finally agreed to cut production by 10M barrels/day (9.7 actually) but the US had a 30M/b net build last week and generally we use about 130Mb/week so that's a 19% overall build and, as I said to our Members over the weekend:

Meanwhile, we had a net 30M build this week and that's out of 130Mb production so 19% too much oil being produced gives us an idea of the extent of the pullback in the economy.  I know I last filled up about a month ago.  In fact, I should go start my car just to make sure the battery is good.  Anyway, so OPEC cut 10Mb out of 100Mb/d production is nowhere near enough and we're going to drown in oil soon as we overflow every possible storage space.

Oil back to $22.65 as there's NO DEAL – /RB 0.682, /NG $1.75 – all very tempting but, as I said, 10Mb is never going to be enough though it really is as they are looking ahead to the virus ending and traders are not.  In other words, 10Mb/d does nothing to address the current surplus because, if the US has a 30Mb build out of 200Mb, then we're 15% too much and that's 15Mb/d globally but that's not realistic to continue all year and OPEC is looking at a long-term cut and they feel 10Mb for 6 months (1.8Bn barrels) will address the 15Mb/d build for 3 months (1.35Bn barrels) and then some – it's just that they are communicating it poorly and again – people simply don't understand math.  

Even though there is a deal this morning, the math on the 10Mb cut simply doesn't work out for the short-term traders and that allows Banksters like Goldman Sachs (GS) (see: "Goldman’s Global Oil Scam Passes the 50 Madoff Mark!") to stir up dissent, saying this historic cut is not enough and putting up very confusing table and claim the actual cut will be much less because, for one thing, non-OPEC nations won't actually cut 21% to fall in-line with OPEC.  

THEREFORE, concludes Goldman's analyst, it's really only a 5Mb/d cut when you look at it his way and therefore you, the Retail Investor, should not go long on oil (not until GS's clients are done loading up on it near $20, of course) and then, when oil is back over $40, Goldman will tell you how you'd better get in fast or you will miss an historic rally – while their clients are cashing out their 100% gains.  That's how the market works and we are being treated in this cycle to seeing all these manipluation games play out at hyper-speed – which makes them much more obvious if you pay attention.  

Global oil use heads for steepest annual contraction in historySpeaking of storage, by the way, storage tanks in the UAE and around the World are filled to capacity as all those empty roads you've been seeing for the past month begin to take their toll.  As you can see from the chart, 50% of the World's oil is used for transportation and 60% of that is used by "Light-Duty Vehicles" or passenger cars.  

So almost no cars are on the road and that means 60% of 50% or 30% (at most) of the oil is not being used.  Thiss is very simple math.  So if we usually consume 100Mb/day of oil then up to 30Mb/d of oil is not being used but, as I said above, more like 20Mb/d and then for how long?  So far, 30 days = 600Mb and let's assume 3 months and we're at 1.8Mb and that means OPEC would have to cut oil production 10Mb/d for 6 months to make up the difference and they feel they've accomplished that.

The problem is that storage is getting full now but the US has 70Mb of spare capacity in the Strategic Petroleum Reserve and other countries do too, so some of the surplus will go there.  So I do think this ($22.50) is a good bottom for Oil and we can play the /CL Futures bullish here with a tight stop below the line (and we'd try again at $20 if this fails or any time we're back over $22.50) or we can play the oil ETF (USO) at $4.90 and, while that's fun, we can put last week's lessons to use with the following trade idea:

  • Sell 5 XOM Jan 2022 $30 puts for $4.30 ($2,150) 
  • Buy 30 USO Jan 2021 $3 calls for $2.30 ($6,900) 
  • Sell 30 USO Jan 2021 $5 calls for $1.10 ($3,300) 

That's net $1,450 on the $6,000 spread so the upside potential is $4,550 (313%) in 9 months, which is a pretty good rate of return and you risk owning 500 shares of Exxon (XOM) at net $32.90, which is 25% below the current price.  The ordinary margin requirement is just $657 but that's not the point, the point is, if you have $16,450 sitting around and you don't want to take big risks but you wouldn't mind owning 500 shares of XOM as your worst case, either you'll get the stock or you'll get $4,550, which is a 27.6% return on $16,450 anyway.  

Lots of people are THRILLED to make 27.6% in less than a year, not our Members at PSW, of course – this is not a trade we'd usually bother with but it's exactly the kind of trade we will be making in our new Hedge Fund, which aims to make nice, steady returns off of very conservative positions with the aim of paying our quarterly "dividends" (not really dividends) by selling puts and calls against our long positions.  

For instance, XOM July $52.50 calls are $1 and July $30 puts are $1.20 so we could sell just two of each and collect $440.  $440 may not seem like a lot but it's 2.6% of $16,450 so our money is safely on the sidelines, we have committed to buying XOM very cheaply in 2022 and we make $4,550 (27.6%) if oil is over $25 at the end of the year AND, while we wait, we collect 2.6% per quarter – which beats the Hell out of most income funds.  

We don't have to manage your money – you can certainly learn to do it yourself and we'll be happy to teach you how.  The main trick is to stay well-diversified and well-hedged and to NOT BE GREEDY!!!  Most people who blow up their trading accounts in markets like these do so due to over-leveraging and lack of diversity – even more so than lack of hedging.  27.6% is PLENTY of money to make in a year – even without the bonus 10% quarterly pay-outs.  Especially in a volatile market – SAFETY FIRST should be your watch-word.  

And that brings us to this morning's final topic – Virus Counts.  It's depressing but we have to talk about it as the US now has 557,663 out of the World's 1,863,406 confirmed cases and, so far, we also are in last place for testing with just 2.8M tests administered – not even 1% of our population.  So the short story is we have no idea how many people are infected and Johns Hopkins has begun to monitor US testing to cut through Trump's BS on the subject.  600,000 infected is 1/500 Americans and we're on a path to be over 1M Americans (1/250) infected by the end of the month – that same time that Trump wants to lift restrictions.  

Do you want to go back outside in May, when 1/125 people MAY be infected – perhaps 1/67 by the end of May (5M Americans) if we don't do something to slow the spread NOW?  Later is too late and waiting until November is far, far too late – if we are even able to hold an election at that point.  

That's why we're still very cautious and we added hedges into the weekend for our Member Portfolios – this is no time to throw caution to the wind.  Earnings season begins this week and it's not the earnings that matter but the guidance, or whatever the CEOs say in lieu of guidance – that will mostly be pulled:
Image

The Retail Sales Report is Wednesday alonw with Empire State Manufacturing and the Atlanta Fed Report and the Fed's Beige Book – which may not be up to date enough to get a real idea of what's happening but clearly the Fed is already terrified and doing whatever it takes to prop up the economy.  Philly Fed is on Thursday and Leading Economic Indicators on Friday but it's all about earnings, starting tomorrow.

Be careful out there! 

 


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  1. I don't think that anyone knows the actual impact that this pandemic will have on the overall economy. It looks like markets are predicting a return to normal very quickly. I am skeptical…

    Of course, now Trump is posting stuff about firing Fauci because he had the audacity to mention facts! Removing guardrails around Trump will lead to costly mistakes!


  2. Good Morning.





  3. Who Is Immune to the Coronavirus?


  4. Coronavirus US live: Trump fumes over report social distancing was delayed as deaths pass 22,000


  5. A Month After Emergency Declaration, Trump’s Promises Largely Unfulfilled





  6. Hi Phil

    I have a position that is causing me a lot of troubles and I would like to have a good advice from you

    This is my position:

    long 700 EW (EDWARDS LIFESCIENCES) STOCKS now at 215

    long 7 EW 230 1/15/2022 PUT for 26 now at 50

    short 7 EW 200 August 21 CALL sold at 13.18 now at 31.10

     I would like to keep the stock and not to have it called away but at the same time i don't want to sacrifice too much for this

    Some points to consider:

    1) on the 28th of April EW will have Q1 earnings, the business in Europe has been moderately impacted in march by elective surgeries been deleted due to covid, while in US the business has been impacted only in the last 10 days of march, so may be earnings won’t be that bad.

    2) for the second quarter of 2020, earnings will be released at the end of July, if the coronavirus impact on elective surgeries will continue in April and May both in Europe and US, the stock can have a further decline

    3) If at the earnings of Q1 will be released a bad guidance for 2020 the stock can decline, please take into account that in q4 2019 the guidance for 2020 was increased and that the stock has an high P/E of 40

    4) an 3 to 1 spilt has been announced and will take effect at the beginning of June, this could help the stock to increase?

    5) how the split will impact on the options I have? I will have 3 x 7 PUTs and 3 x 7 CALLs at 1/3 of the strike?

    So should I?

    1) roll the 200 August call to 2022? What strike?

    2) Should i sell the PUT and Buy back the call ?

    3) Should I wait for the earnings of April and hope for a lower price to buy back the call and a better price to sell the put?

    4) should i keep it as it is and may be sell Puts into August to balance a bit wat i m loosing on the calls? What strike?

    I know this is a lot to request for, but I feel a bit lost in this problem and would really appreciate your help.

    Thanks a lot – Federico


  7. AAPL – I haven't seen this broadly in the news yet but it looks like Apple did better in China in 1Q than I anticipated.  Looks like shipments of about 2.5M units in March 2020 vs 2.7M in March 2019 so not bad.  For the 1st Qtr Apple down about 13% yr over yr.  Overall China total smartphone shipments were down 39.2%.  Although the stock price up a lot vs last year I tihnk this will be good news.  Source is China gov't CAICT not on their English website yet.  


  8. Ragfed74

    I have only one quetion why do you hold a stock which pays zero div.?

    Your Aug short call is not even ITM stk at present 207.66.

    You ass in the hand looks like is the long put at this day and time.


  9. The Bug: It looks like we've peaked in the US, and are starting on the downslope of the epidemic curve. Look at these graphs, and the important one for epidemic tracking is the daily new case reports: https://en.wikipedia.org/wiki/2020_coronavirus_pandemic_in_the_United_States#Statistics


  10. TSLA back to $600 it's relelntless


  11. Phil/ACB

    With the plan for 1-20 reverse split from ACB, is it a good idea to close the long 2022 calls?

    regards


  12. thanks Yodi for your interest.

    I hold it becouse i work for this company and they give me with a small discount.

    My August short is ITM since my strike is 200 and EW is now at 207.66

    Agree with you with the PUT but i don t know if it is a good idea to sell it now to cover the buy back of the 200 call.

    Any advice?


  13. Good morning!

    Markets not off to a very good start but I'm happy when we have rational responses and there's nothing very exciting in the news to rally off of.

    Impact/StJ – It depends on the duration.  China is getting back to work but the rest of the World is shut down so they are off to a slow start for that reason.  The last country to get back to normal (us, for sure) will get back fastest as the rest of the World will be willing to work by then and I've been saying that will be June since January and I still think you'll be sitting in a movie theater in July and you will look around and think back on my words at how amazingly normal things already seem by then.

    That has nothing to do with Trump, there will be a coup next month if Trump doesn't get his act together and the Governors are already ignoring him and doing their own thing.  This is a crisis he can't just screw up on his own and there aren't enough collaborators willing to kill their citizens on his behalf.  

    Firing Fauci may be the last straw for people's patience with Trump.  He'd have to replace him with someone amazing right away to get away with it.  Trump will have to smear Fauci first – so keep an eye out for that in the Conservative media but that tweet was a trial balloon and did not play well amidst the backlash.  

    EW/Rag – Better hear than $160!  I'm not a fan of EW, they are still overpriced at $207, which is $43Bn in market cap and they barely hit $1Bn in profits so 40x earnings is not attractive to me and you can throw growth out the window as people are putting off heart surgeries whenever possible (COVID is VERY bad for people with heart conditions).  Oh, I see you have taken a lot of this into account with your bullet points.  

    Bottom line is I'm not a believer so my advice would be to be thankful you are back at $200 and GTFO and wait for earnings to see if they are worth re-entering.  I wouldn't count on a split to save you – companies making actual profits is what saves you!  

    Also, 700 shares at $208 is $145,600 so I assume you are a big boy with a big boy margin account and you already sold 7 2022 $230 puts for $26, which I assume is making up the bulk of your losses at $55.  I would cash out the stock ($145,600), leave the short calls and roll the short puts ($38,500) to 10 of the 2022 $180 puts at $30 ($30,000) and pick up 10 of the 2022 $150 ($78.50)/$200 ($48.50) bull call spreads for $30 ($60,000) to cover the short calls, which will either expire worthless or you can roll them higher but that would also mean your short puts are doing better.  

    That leaves you with $77,100 back in your pocket and a $100,000 spread that's 100% in the money and the short puts and short calls which will hopefully expire worthless.  If EW goes lower, hopefully it holds $180 and, if not, there's always 2023 to roll to and you can always spend $50,000 to roll the 2022 $150s to the $100s if EW does go lower and you still think it's a bargain – at least you'd have the cash sitting around to do it.  

    AAPL/Stu – I think they are unstoppable and these negative reports on them are mostly over supply issues so very silly as it has no long-term impact on the juggernaut.  

    The Unstoppable Juggernaut by Omniversal on DeviantArt

    Downslope/Snow – I don't see how we can make that determination with only 1% tested.  Still, this is where we SHOULD see a slowdown so hopefully we haven't botched things so badly that we're not seeing a peak in daily cases but Thursday was 432,529 and today is 557,663 so up 125,134 (28%) in 4 days is still around 50% weekly growth or 100% monthly growth so we need to do a lot better than this before we put on our party masks.

    TSLA/Coulter – And that's despite deliveries looking like 50,000 for Q1.

    ACB/Pat – I head 1/12.  I take i you mean our Earnings Portfolio position, where we have 50 long 0.50 calls at 0.40, now 0.45 and 10 Jan $2 puts at $1, now $1.21.  It's such a small position I'm not going to bother changing it – cost more in friction and fees than it's worth at the moment.  The plan was to hold it for 2 years and see what happens – the split doesn't really change that but I will change my mind if we get a nice pop worth cashing in.  


  14. Well, at least the /ES shorts are doing well.

    Stopped out 2 (of 4) of the /CL longs as $23.50 failed (topped out at $24 but I was greedy) and I'm fine holding the other 2 for a longer-run.  

    STP back to $549,041 and the LTP is green at $542,875 so we're well-balanced at $1.1M.

    Butterfly up 100% at $401,041 after our aggressive adjustments but we'll have to be careful if the market starts falling again.  

    Dividend Portfolio is still down 27.8% at $144,334.

    Earnings Portfolio is up 85.6% at $185,575 after aggressive adjustments.  Same issue as Butterfly. 

    Future is now Portfolio up 6.2% – never had a big dip.

    Hemp Boca Portfolio is up 20%, saved by TAP.  

    Money Talk Portfolio is down 8.2%, we missed our chance to get more bullish as I wasn't on the show but it rode out the downturn pretty well.  


  15. Phil – what are your thoughts on options expiration and how that plays into short term pricing. I know some others in the group have commented on this also.  Seems like short term they would want to keep it around 600 into Friday.  Earnings next week I believe 4/22 which is always risky


  16. last comment on TSLA


  17. Phil, curious more about how you time closing out positions? Your RH trade last week has produced solid results and should continue to do so. With a return in the 50-70% range will you take profits and look for a new position? 


  18. /Phil

    Thanks for your answer I really appreciated but may be i did not express properly my position is:

    long 7 EW 230 1/15/2022 PUT for 26 now at 50

    so i bought 7 protective PUT strike 230.

    i m not a big boy, those are shares i got from the company I work for in years of work….that is why i decided to buy the PUT to not see all those years  of work disappear in the covid mess.

    Phil can you be so kind to elaborate your advice taking into account that i bought the 230 PUT ?

    Anyway from your previous comment i take that you are pretty negative for EW and that you have a bad outlook for next ew earnings

    Thanks for your help


  19. $7,500 is enough on /ES so done with that and fresh horse would be /NQ 8,200 or /YM 23,000 if those fail.  

    TSLA/Coulter – I can't play based on what "THEY" want the stock to be at.  To me, TSLA is back to being overpriced so I wouldn't go long but it's way too low in the channel to short so it's simply foolish to play and I don't touch it.  Very simple.  

    RH/Jby – Yeah, I hate it when they go up so fast as it puts me in an annoying position.  Logically, making 50% in a short time is tempting to take off the table but we had a 700% upside potential on the trade – so it's not very surprising to make 10% of our goal on a bounce, is it?  

    We took the $85/125 bull call spread last week with the short $110 puts and we're almost in the money already but the spread is net $17,650 out of a potential $80,000 and the margin required is very low with just 5 short puts so the question is, do you have anything better to do with $17,650 than make $62,350 (353%) between now and Jan 2022?  And, if you do – is it more of a sure thing than RH hitting $125?  

    RH Long Call 2022 21-JAN 85.00 CALL [RH @ $121.23 $-1.42] 20 4/7/2020 (648) $100,000 $50.00 $10.70 $50.00     $60.70 - $21,400 21.4% $121,400
    RH Short Call 2022 21-JAN 125.00 CALL [RH @ $121.23 $-1.42] -20 4/8/2020 (648) $-72,000 $36.00 $6.75     $42.75 - $-13,500 -18.8% $-85,500
    RH Short Put 2022 21-JAN 110.00 PUT [RH @ $121.23 $-1.42] -5 4/7/2020 (648) $-21,500 $43.00 $-6.50     $36.50 $0.50 $3,250 15.1% $-18,250

    We are not day-traders though we are not adverse to taking profits in a day if they seem ridiculous but this is simply according to plan and we have no reason to change our mind on RH – we just happened to catch a perfect entry last week (because we understand the fundamental value of things and pay attention to the news).

    EW/Rag – Sorry, my bad, I thought you sold the puts.  Well that's good and I'd take that money and run and I'd still cash the shares and do the rest, more or less.  You are collecting $38,500 instead of paying for the puts and cashing the stock for $145,600 and if you sell 5 of the 2022 $180 puts for $30, that's another $15,000 in your pocket less $60,000 for 20 spreads would give you net $100,600 in pocket + the $100,000 spread and the 5 short puts and 7 short calls.  To the downside, worst case is you have to buy 500 shares back at $180 ($90,000) which is in your pocket and the upside is you end up with $200,600 or more by Jan 2022 (there will be more short call sales).  

    I'm "negative" on EW because there are thousands of companies trading at much cheaper valuations, not because they are a particularly bad company.  I'm certainly worried about earnings and this is a way to keep you in it without taking ridiculous amounts of risk with earnings on the horizon.


  20. PhilSQQQ

    SQQQ doesn't seem to be acting like a 3x down from the NASDAQ ..  seems to have a mind of its own and isn't going up the way it should on a down day. Bought 25 Sept $16c for $4.60 on Fri and now the Dow is down around 450 or 1.85% and SQQQ is only up .35% (was even negative) and my calls are trading LOWER at around $4.50. Planning to sell some covers but prices don't seem to be rising they way they should and most strikes show no trades at all. Comments?

    Thx


  21. CAKE- went to the local store for an order pickup Saturday evening and saw they were doing quite a business in c/o both walk in and curbside p/u. Per company press release:

    The Company has seen off-premise sales recently accelerate approximately 85% since the fiscal fourth quarter 2019 level. On an annualized basis, current off-premise sales would equate to over $3 million per unit, on average. The restaurants are operating sustainably at present under this model. Currently, 30 locations across the Company’s concepts, including three The Cheesecake Factory restaurants, are temporarily closed. 

    On the downside, they have announced suspension of April rent payments but I see no indication on dividends. I am assuming suspended for now.

    Store locations criteria is on income demographics so well place for a recovery. Still however, much uncertainty re: the continuing virus impact so considering small, conservative play. 

    Buy stock around $19; sell 21 Jan $20 covered call for approx. $5 nets a 44% return if called away @ 20. Any divvy would be a bonus. If stock went lower, would consider selling some puts.

    Thoughts?


  22. Interesting to see how much premium there is in the OTM calls. I have the $40/55 INTC Jan22 BCS with the stock at $58 it's 100% ITM and you could probably buy the spread for around $9 and get a 66% return on cash if INTC just holds $55. That's the case for a lot of stocks right now.


  23. SKX might be a nice long vol play.  Right now, the vol is pricing in a 8% move. The average move over the last 4 is 10%.  7 out of the last 8 earnings moves have been over a 10% move.  We do have a couple of days until earnings.  We should see some increase in the vol as we approach and that should slow time decay down.  The play is to either, add this as a long vol trade to your portfolio and/or hold it through earnings with the expectation that SKX hasn't done great in the last quarter and will move more.  On the other hand, SKX is down half from its high after last earnings, so you could also assume I am wrong, take the other side of this and sell and straddle or strangle.  This assumption would be that SKX's earnings miss is already baked into the price and it won't move (much). 

    Happy to hear some feed back from the group!


  24. Phil – what tool are you using for your /ES setup and where do you have your lines ( red, purple, green) based on?  


  25. /Phil

    thanks a lot.


  26. Anyone having trouble with TOS? Can't log in on mobile and orders not going through on desktop.


  27. TOS – YES, NOT RESPONDING …


  28. same here….


  29. TOS – YES, NOT RESPONDING …

     

    Me too


  30. TOS Back


  31. SQQQ/Wing – I don't think it tracks well intra-day as it's overwhelmed by sentiment trading.  Also, SQQQ doesn't follow the Dow, it follows the Nasdaq, which is generally flat today.   If you are buying the SQQQ calls to protect against a fall in the Dow – you simply played the wrong ETF.  

    CAKE/Pstas – If you are allowed to not pay rent in April and you do – isn't that kind of a foolish use of cash?  Government bailouts supposedly on the way to take care of that.   I like CAKE, we usually have it so I agree, we should add it to the LTP down here as $18.50 is $830M and they are good for about $100M in profits so $20 is certainly more realistic – even in a crappy year.  

    Year End 31st Dec 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg
    Total Revenue
    $m

    1,977 2,101 2,276 2,261 2,332 2,483 2,452 2,905 4.66%
    Operating Profit
    $m

    145 165 201 153 119 104     -6.47%
    Net Profit
    $m

    101 117 139 157 99.0 127 50.1 102 4.68%
    EPS Reported
    $

    1.96 2.30 2.83 2.47 2.14 2.86     7.80%
    EPS Normalised
    $

    1.97 2.39 2.83 2.64 2.50 3.47 0.754 2.32 12.0%
    EPS Growth
    %

    -5.84 +21.1 +18.3 -6.49 -5.45 +38.9 -78.3 +207  
    PE Ratio
    x

              5.82 26.8 8.71  
    PEG
     

                0.129 0.276  
     

    They only go out to 2021 but, for the LTP, lets:

    • Sell 10 CAKE Jan $15 puts for $2.85 ($2,850)
    • Buy 20 CAKE Jan $12.50 calls for $9 ($18,000) 
    • Sell 20 CAKE Jan $20 calls for $5 ($10,000) 

    That's net $5,150 on the $15,000 spread so $9,850 (191%) upside potential at $20 and, if not, this is a position we're very happy to double down on for the long-term.   Ordinary margin requirement on the puts is just $946 and the risk is owning 1,000 shares at $20.15, which is where it is now.

    Bull call spreads/Motox – Best way to play in a market like this.  

    SKX/Dano – That's one we certainly like long-term.  $25.25 is $4Bn and they made $350M last year so 12x earnings and sneakers are more of a put-off purchase than a lost one – that's a plus for that kind of industry.  

    No reason not to sell 10 SKX 2022 $20 puts for $4 ($4,000) in the LTP to remind us to keep an eye on them.  

    /ES/Akrum – That's an active trader chart on ThinkOrSwim and it's their normal 5 Min chart, adding the study called "Pivot Points".

    You're welcome Rag.  

    TOS/Jeff – Slow but working in Florida. 

    That makes me nervous when TOS slows down – indicates a lot of volume going on somewhere.  


  32. Yesterday there were 2.7M tested in the US, today it's 2.8M – 100,000 tests a day means it will take 10 years to test everyone.  Yep, I still have no confidence in this Government or their statements that we're slowing down infections with their 1% sampling rate…

    Reading Faces - Dilbert by Scott Adams



  33. /CL/Phil – Are you stopping out at 22.50 or holding?


  34. US is behind Luxembourg, Iceland, Spain, Switzerland, Italy, France, Belgium, Ireland and Liechtenstein and ahead of everyone else in terms of tests per million population.

    In deaths per million, the US is ranked behind 10 Western European countries. 

    Just keeping it real. 


  35. Here is an excerpt from an email received from our local hospital system in North Texas.  Note they are modeling peak bed requirement for May 14th

    Systemwide, we are running a baseline census of 950 adults. This includes patients who came into our facilities with heart attacks, strokes and medical problems other than COVID-19 AND 334 patients who are either COVID-19 positive or Persons Under Investigation (PUI). Utilizing surge staffing and repurposed beds, we can staff up to 2,300 beds – an additional 1,350 patients beyond current census. Our current model has our peak bed requirement at 1,358 on May 14, assuming that the growth rate and case curve do not deviate. Our mix of beds between medical-surgical and ICU is still not where we would like it, but we are working on that.


  36. I'm working my way out of my TSLA call/put positions — like you said Phil it's not worth the stress (or the margin) — covered my short puts on the bounce.  Trying to have patience with covering some of the lower short calls (660 & 680) — might keep 2020 800 and 1200 short calls  


  37. /CL/Ravi – Well I have a cushion of making $1,000 so $21.50 is break-even and, by that time, I'd probably triple-down at $20 so not stopping out as I feel very confident we're well over $25 in July so rollin', rollin', rollin' until we hit that.  

    US/Dawg – I can't imagine where you get this stuff:

    Entity Code Date Cumulative total tests per thousand
    Iceland ISL 12-Apr-20 102.71
    Luxembourg LUX 12-Apr-20 48.539
    Bahrain BHR 12-Apr-20 37.681
    Estonia EST 12-Apr-20 23.654
    Norway NOR 12-Apr-20 23.21
    Switzerland CHE 12-Apr-20 22.352
    Israel ISR 12-Apr-20 18.636
    Italy ITA 12-Apr-20 17.084
    Slovenia SVN 12-Apr-20 17.005
    Austria AUT 12-Apr-20 16.497
    Latvia LVA 12-Apr-20 14.904
    Australia AUS 12-Apr-20 13.936
    Portugal PRT 12-Apr-20 13.301
    New Zealand NZL 12-Apr-20 12.996
    Denmark DNK 12-Apr-20 12.097
    Czech Republic CZE 12-Apr-20 12.071
    Canada CAN 12-Apr-20 10.761
    South Korea KOR 12-Apr-20 9.991
    Belgium BEL 12-Apr-20 9.691
    Russia RUS 12-Apr-20 8.902
    United States USA 12-Apr-20 8.466
    Finland FIN 12-Apr-20 8.229
    Slovakia SVK 12-Apr-20 5.274
    Turkey TUR 12-Apr-20 4.486
    Chile CHL 12-Apr-20 4.454
    United Kingdom GBR 12-Apr-20 4.194
    Poland POL 12-Apr-20 3.637
    Hungary HUN 12-Apr-20 3.485
    Romania ROU 12-Apr-20 3.215
    Malaysia MYS 12-Apr-20 2.358
    Uruguay URY 12-Apr-20 2.322
    Serbia SRB 12-Apr-20 2.104
    Taiwan TWN 12-Apr-20 1.982
    South Africa ZAF 12-Apr-20 1.364
    Ecuador ECU 12-Apr-20 1.363
    Costa Rica CRI 12-Apr-20 1.326
    El Salvador SLV 12-Apr-20 1.039
    Japan JPN 12-Apr-20 0.612
    Pakistan PAK 12-Apr-20 0.313
    India IND 12-Apr-20 0.142
    India, people tested   12-Apr-20 0.131
    Indonesia IDN 12-Apr-20 0.099

    And, even if the US were only behind a few countries – would that make it acceptable that we've only tested 1% of the population?  Is that our goal "Let's make America mediocre again"? 

    There are 534,000 cases, 20,000 deaths and 30,000 recoveries in the US, so that's 484,000 people who are sick with no outcome and you think that means we're doing well?   So far, 40% of our outcomes have been death, but let's keep playing with numbers and point at other countries rather than FIX the problem here…

    Watch Dozens Of Ambulances Line Up Outside Moscow Hospital As Russian COVID-19 Cases Soar. 

    'You think you're free, then it comes back': Doctors and patients explain what the coronavirus 'second-week crash' feels like.

    WHO envoy says coronavirus ‘will stalk the human race for a long time to come’.

    Heart Conditions Prove Especially Dangerous for Covid-19 Patients.

    N.Y. Deaths Top 9,000; Italy, France Cases Slowing: Virus Update.

    Peak/Stock – So they have 334 current patients and forecast 1,358?  That's not ideal.  That's 4x – and puts the US at 2M patients – getting close to 1% infected in a month.  That BETTER be the peak!


  38. A lot of Financials selling off ahead of earnings is dragging us down.  

    • CAT down $11 (8.6%) 
    • V down $6 (3%)
    • AXP down $4.50 (5%)
    • JPM down $5 (5%)
    • TRV is down $3.50 (3%)

    Almost nothing in the Dow is green (WMT, INTC, CVX, AAPL, WBA, PG).  Those 5 are good for about 250 points of the Dow drop (half).

    • Per Johns Hopkins Case Tracker, worldwide confirmed COVID-19 cases are now 1,897,373 up 44.9% from a week ago. Fatalities are up 62.9% to 118,304. Leaders:
    • U.S.: 568,176 (+63.7%)/22,935 (+124.3%).
    • Spain: 169,496 (+25.5%)/17,489 (+32.8%).
    • Italy: 159,516 (+20.3%)/20,465 (+23.9%).
    • France: 137,873 (+47.0%)/14,986 (+67.9%).
    • Germany: 128,092 (+26.6%)/3,038 (+82.8%).
    • In the U.S., New York continues to be #1 although the rate of new hospitalizations has dropped. The state has accounted for almost 41% of American fatalities (9,345/22,935).
    • Royal Dutch Shell (RDS.A -2%) says it has temporarily shut in production at its Perdido oil platform in the Gulf of Mexico following a leak at Exxon Mobil's (XOM -1.4%) Hoover offshore oil pipeline system.
    • "Without access to that pipeline system, and with no other alternatives in the available supply chain system, Perdido has been forced to ramp down," Shell says.
    • Perdido is a Shell-operated joint venture including BP and Chevron (NYSE:CVX), and is a production hub with an estimated peak production of 100K boe/day.
    • The 153-mile HOOPS pipeline brings oil from several offshore oilfields to the Quintana Terminal near Freeport, Tex.
    • Moody's drops the credit default rating on J.C. Penney (JCP -5.4%) to Caa3 and shifts to a Negative outlook.
    • "Although J.C Penney liquidity is adequate, the widespread store closures as a result of the coronavirus pandemic and the continued suppression of consumer demand is expected to pressure J.C. Penney's EBITDA, impede its turnaround strategy and weaken its leverage to unsustainably high levels" warns Moody's VP Christina Boni.
    • Moody's expects the company will have significant cash flow deficits in FY20 as EBITDA declines from the effect of COVID-19 on store traffic and continuing weak consumer demand hurt results. The ratings agency estimates that EBITDA could decline in excess of 80% in fiscal 2020 before slowly recovering in 2021. Moody's anticipates it will take well into 2022 before EBITDA reverts back to the approximately $600M of EBITDA realized in 2019. As a result, J.C. Penney's leverage is seen remaining at unsustainably high levels over the next two years.
    • Ford (F -4.6%) says it will start producing new powered air-purifying respirators this week to help protect healthcare workers from Covid-19.
    • The automaker is producing the respirators out of one its plants in Detroit. The facility is expected to have the ability to make 100K or more respirators.
    • The new respirators, which were designed in partnership with 3M, include a hood and face shield to cover head and shoulders, and a supply of filtered air for up to eight hours.
    • Amazon (NASDAQ:AMZN) will let third-party sellers ship nonessential items to the e-commerce company starting this week, according to WSJ sources.
    • Last month, Amazon prioritized "essential" items such as cleaning products and shelf-stable food to keep up with the coronavirus-related demand surge.
    • Amazon's statement: “Later this week, we will allow more products into our fulfillment centers. Products will be limited by quantity to enable us to continue prioritizing products and protecting employees, while also ensuring most selling partners can ship goods into our facilities."
    • Over the past month, Amazon has hired 100K new employees for its distribution centers and delivery network.
    • Earlier today, AMZN announced plans to add another 75K workers for full- and part-time positions.
    • KeyBanc drops Grubhub (GRUB -13.6%) to an Underweight rating from Sector Weight on its views there could be further headwinds in the SMB market.
    • The firm assigns a price target of $32 to GRUB vs. the average sell-side rating of $51.09. Only three out of 31 sell-side firms covering Grubhub have a Sell-equivalent rating on it.
    • The 52-week low on Grubhub is $29.35.
    • Previously: Grubhub to take profit hit to support industry (April 13)
    • In October Freddie Mac expected 6.1M of new home sales in 2020, on an annualized basis.
    • Now it doesn't see reaching that level until 2021.
    • Freddie reduces its sales forecast to 5.1M homes for this year, according to Freddie Mac's Quarterly Forecast.
    • "Although the uncertainty of the [coronavirus] crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year," says Freddie's chief economist, Sam Khater.
    • The forecast also projects house price growth slowing to an annual rate of 0.4% in 2020 then rising 0.7% in 2021; that's way down from the October 2019 report, which expected 2020 house price growth of 2.8%.
    • Overall, the forecast expects annual mortgage origination levels to remain at $2.4T in 2020 and 2021; the total number is up from $2.05T that was expected in 2020 as of October 2019.
    • Purchase originations are seen falling to $1.09T in 2020 and increasing to $1.34T in 2021; refinance originations expected to be $1.26T this year and $1.03T in 2021.
    • Average 30-year fixed-rate mortgage is expected to be 3.3% in 2020 vs. 3.8% in the October forecast; in 2021, it's expected to slip to 3.1%.
    • KeyBanc maintains an Overweight rating on Alibaba (NYSE:BABA) and raises the target from $248 to $255.
    • Analyst Hans Chung says Chinese e-commerce recovery tracked better in March, which should lead to stronger GMV in Q4.
    • Chung expects the momentum to continue due to the "strong desire for online sales."
    • Related: Last week, Macquarie analyst Han Joon Kim said he left conversations with BABA's investor relations team confident that H2 was tracking "better than feared."
    • Alibaba shares are up 1.3% to $198.90. The company has a Very Bullish average Sell Side rating.
    • Over the past weekend, the U.S. Centers for Medicare & Medicaid Services distributed $30B of the planned $100B in CARES Act grants to healthcare providers as they battle COVID-19.
    • The distribution to specific providers was based on total share of 2019 Medicare Fee-for-Service (FFS) revenue (denominator is $484B).
    • In a note, Baird is "somewhat surprised" by HHS's allocation methodology, expecting hospitals to get the lion's share considering the magnitude of pressures from the pandemic.
    • It estimates that the grants will boost EBITDA 20-40% for post-acute providers, 6-8% for hospital operators and 3-10% for certain others.
    • HHS has indicated that the remaining $70B will be focused on providers in hard-hit areas, rural locations and providers with lower shares of Medicare revenue.
    • Post-acute tickers (Baird following): Encompass Healthcare (EHC -2.8%), Amedisys (AMED +2.0%), LHC Group (LHCG -0.0%).
    • Hospitals: HCA Healthcare (HCA -4.2%), Tenet Healthcare (THC -6.2%), Universal Health Services (UHS -5.0%).
    • Others: Acadia Healthcare (ACHC -7.2%), Addus HomeCare (ADUS -5.8%), DaVita (DVA -2.6%), MEDNAX (MD -9.3%).
    • ESPN (DIS -2.6%) is asking some of its highest-paid personalities to take pay cuts, as a sports hiatus rolls on amid the COVID-19 pandemic.
    • The network is looking for cuts of 15% from  that would range over three months of pay cycles, and it reflects hope that this move will tamp down a need for furloughs, Variety says.
    • “We are asking about 100 of our commentators to join with our executives and take a temporary salary reduction. These are challenging times and we are all in this together,” the network says.
    • Netflix (NASDAQ:NFLX) is bucking a down market yet again – and in fact today is up 5.9% to touch its highest point in a year and a half.
    • The stock is just a few percentage points below its all-time high from summer 2018, and it joins one other SPX stock (gold miner Newmont) as the only ones in the index setting new 52-week highs.
    • Today, Canaccord Genuity boosted its price target to $450 from $415, implying 15% upside, based on expectations for heavier subscriber growth during the pandemic "due to an increase in demand for in-home entertainment options," aided by the lack of live sports at competitors.
    • The firm now sees total paid subs growing 16.5% this year, vs. a previous view for 15.7% growth – due both to new customer adds as well as reduced churn from current subscribers.
    • Sell-side firms are Bullish on Netflix overall, though Canaccord's price target is considerably above the average on the Street. Seeking Alpha authors are Neutral, and the stock has a Quant Rating of Neutral.

  39. CAKE- my read is that firms , if qualified for loans and eventual forgiveness have to actually pay the expenses, not defer. Either way, still a good bet , imo. 


    • Barron's is out with a simple stock screen today that is pretty simple, but also fairly intriguing.
    • The publication ran a screen for S&P 500 companies who have outperformed the index by at least 13 percentage points this year (positive return YTD) and that Wall Street analysts expect to continue growing their earnings in 2020 and over the next five years.
    • The dozen that were churned up by the screen are Akamai Technologies (AKAM -2.1%), Arista Networks (ANET -3.8%), Cabot Oil & Gas (COG -0.2%), Citrix Systems (CTXS -0.0%),  Dollar General (DG +0.6%),  Gilead Sciences (GILD +1.4%),  Nasdaq (NDAQ -4.6%),  Newmont (NEM +4.8%), Old Dominion Freight Line (ODFL -3.9%), Steris (STE -3.1%), Vertex Pharmaceuticals (VRTX +0.9%) and Walmart (WMT +1.8%).
    • Add Square (SQ -0.7%) to the list of fintechs approved to lend to small businesses through the government's Paycheck Protection Program.
    • "We will start rolling out our PPP loan applications this week," writes Square Capital Lead Jackie Reses via tweet.
    • It's working with partner Celtic Bank, which has experience as a SBA lender.
    • Square will start with employers "whose application data we can verify automatically. We expect to expand access to more small businesses soon."
    • Fintechs — including Square, PayPal, and Intuit — are most likely to have the most impact in helping one-person businesses apply for the loans as they're less likely to have a bank credit relationships than small businesses with a payroll, writes BTIG analyst Mark Palmer.
    • Papa John's International (NASDAQ:PZZA) plans to hire up to 20K new employees in an effort to keep up with demand for delivery, according to CEO Rob Lynch.
    • Lynch told Cheddar in an interview today that the pizza company is using a new contactless delivery model to keep workers and customers safe.
    • He also noted that PZZA isn't seeing any supply issues yet due to the pandemic.
    • Shares of Papa John's are up 22% over the last five weeks.
    • A recently completed study conducted by Accurate Diagnostics Labs and joint venture partner RUCDR Infinite Biologics at Rutgers University demonstrated the potential use of saliva samples to test for SARS-CoV-2, the virus causing COVID-19.
    • According to Dr. Andrew Brooks, COO of RUCDR Infinite Biologics and Professor of Genetics at Rutgers University, there was 100% concordance between saliva samples and nasopharyngeal swabs.
    • The process for using the saliva collection device, made by Utah-based Spectrum Solutions, is to remove it from the packaging, spit into a tube, remove the funnel, place a cap on the tube, turn it (to release the preservative) and hand it to collection personnel (if drive-through), thereby mitigating the risk of transmission to healthcare workers who are currently responsible for obtaining samples from the nose or throat.
    • The FDA has already signed off on emergency use of Spectrum's product, called the DNA 1000 Saliva Collection Kit.
    • Dr. Brooks says expanded collections will begin immediately.
    • COVID-19 testing-related tickers: Abbott (ABT -2.0%), Roche (OTCQX:RHHBY -0.9%), Thermo Fisher Scientific (TMO -2.1%), PerkinElmer (PKI -2.7%), Co-Diagnostics (CODX -0.9%), Chembio Diagnostics (CEMI +20.8%), OraSure Technologies (OSUR +2.3%)
    • The Fed has the tools it needs to avoid deflation even as the coronavirus pandemic leads to lower demand in the U.S. economy, Richard Clarida, the central bank's vice chairman, told Bloomberg Television in an interview.
    • "Demand is impacted very adversely. W're trying to offset that with our policy," he said. "I believe it’s dis-inflationary. I don’t believe it’s deflationary."
    • The Fed has launched emergency programs for as much as $2.3T in loans and cut interest rates to almost zero to keep business running and credit flowing.
    • "There is nothing fundamentally wrong with the U.S. economy," Clarida points out, adding that he's confident it will get back to the strong position it was in before the COVID-19 pandemic hit.
    • He also defended the Fed's decision to purchase some kinds of high-yield bonds issued by companies that were rated investment grade before the crisis began.
    • “Several important companies in the U.S. were investment grade up until this crisis hit,” he said. “And what we said in our programs if they’ve been downgraded after the date of the crisis they will have access to these new facilities.

    Borqs Technologies (NASDAQ:BRQS+370%.

    SCWorx (NASDAQ:WORX+350%.

    Kandi Technologies (NASDAQ:KNDI+28%.

    AMC Entertainment (NYSE:AMC-18%.

    Royal Caribbean Cruises (NYSE:RCL-14%.

    • Spirit AeroSystems (SPR -5.2%) is downgraded to Underperform from Neutral with a $25 price target, slashed from $77, by BofA, which says continued delays in the 737 MAX's return to service and the impact of Covid-19 to commercial aircraft production and air traffic demand pose increased risk to the company's top and bottom line.
    • The growing uncertainty over key programs and the general commercial aerospace environment more than offset potential support from Boeing and/or ultimately the U.S. government, BofA's Ronald Epstein says.
    • Also, Bernstein analyst Douglas Harned lowers his Spirit Aero price target to $40 from $87 but maintains an Outperform rating, saying shares are "unusually cheap" given the long-term outlook.
    • The key driver of Spirit Aero's earnings over the long-term will be the MAX, and as long as it returns – which it should this year – Harned sees "strong upside coming from the MAX return and eventual coronavirus recovery."
    • Canaccord Genuity raises Amazon's (NASDAQ:AMZN) price target from $2,500 to $2,600, citing the coronavirus-related rush for "household essentials, groceries, and cloud computing."
    • The firm expects higher H1 fulfillment costs to be offset by higher AWS operating margins thanks to the "increased pricing power."
    • Related: Amazon recently announced it would put new grocery customers on a wait list due to demand. The company also announced plans to hire an additional 75K workers after filling its 100K pledge in about a month.
    • At the epicenter of the coronavirus pandemic, the state of New York reports new COVID-19 hospitalizations of 1,958 yesterday, down from 3,413 at April 2.
    • "I believe the worst is over if we continue to be smart," he said," Governor Andrew Cuomo said at his coronavirus briefing.
    • Deaths reached 10,056, up 7%, the smallest rise in a while.
    • The number of intubations, or putting patients on ventilators to help them breathe, actually fell by 21 yesterday, the first decline on the chart.
    • "When that's down, it's good and it's down," Cuomo said.
    • Although when the state will ease restrictions remains uncertain, Cuomo outlines what re-opening will look like: First, ease isolation, then increase economic activity, redefine the "essential worker" economy, apply more testing, and monitor the infection rate.
    • Toyota (TM -2.1%) and General Motors (GM -4.3%) have both stopped auto production in Brazil.
    • Toyota has halted production at its Brazilian plants until June 22, while GM expects to restart sometime during the same month.
    • Currently, very little auto production is going on at all in Brazil.
    • Kandi Technologies (KNDI +4.2%) says the Fengsheng Automotive affiliate introduced its first pure electric SUV.
    • The company says the Maple 30x is available for immediate pre-order,
    • The Maple 30X motor's features a maximum output of 70kw, the driving range of the vehicle on a full charge is up to 190 miles.
    • The national pre-sale price after subsidy starts at 68,800 yuan (~$9,778) and goes up to 79,800 yuan (~$11,342) for the premium package.
    • Kandi owns 22% of Fengsheng and Geely Automobiles (OTCPK:GELYF) owns 78%.
    • Source: Press Release
    • Raymond James cuts Apple's (AAPL +0.2%) target from $360 to $305, citing weaker global demand due to the retail store closures outside China.
    • Analyst Chris Caso expects weakness for iPhone and wearables sales, noting that handset order cuts in China indicate "slower end demand, off elevated expectations coming into the year."
    • Caso still expects the 5G iPhone to launch this fall but with lower volumes.
    • Raymond James cuts the targets on a few Apple suppliers: Qorvo (QRVO +0.4%) from $135 to $120, Qualcomm (QCOM +1.5%) from $115 to $110, Skyworks (SWKS -0.7%) from $140 to $120, and SiTime (SITM -3.8%) from $30 to $25.

  40. p.p1 {margin: 0.0px 0.0px 15.0px 0.0px; line-height: 16.0px; font: 14.4px ‘Trebuchet MS’; color: #0e1f33; -webkit-text-stroke: #0e1f33; background-color: #ffffff}
    span.s1 {font-kerning: none}

    phil/SQQQ

    I was trying for a small hedge with SQQQ as you’ve suggested and Nasdaq was down by 4.5% while SQQQ was also DOWN by 1.1% , not up by 12%   :(


    • SoftBank (SFTBY -5.5%) is expecting its massive Vision Fund to endure an investment loss of ¥1.8T – about $16.6B - for the fiscal year, putting a bow on months of retrenchment for the investment vehicle.
    • That would be a major factor in pushing SoftBank to an operating loss of ¥1.35T and net loss of ¥750B, it says.
    • And it follows writedowns of billions of dollars alongside such soured investments as WeWork.
    • SoftBank isn't detailing the investments responsible for the investment loss, instead pointing in general to market "deterioration."
    • Schlumberger (SLB -1.7%) and Halliburton (HAL -1.5%) are lower as both names are downgraded to Equal Weight from Overweight at Wells Fargo and to Sector Perform from Outperform at Scotiabank.
    • Wells Fargo's Christopher Voie sees more downside risk for mid-2020 North American drilling activity and to FY 2020 EBITDA estimates.
    • Meanwhile, Scotiabank forecasts U.S. rig count dropping to ~365 by the end of Q2 and stay flat through H1 2021 before finally increasing thereafter.
    • Schlumberger shares are seen at $18 by Wells Fargo and $15 by Scotiabank; Halliburton's price target is forecast at $8 by both firms.
    • SLB's average Sell Side Rating and Seeking Alpha Authors' Rating are both Bullish, while its Quant Rating is Neutral.
    • HAL's average Sell Side Rating is Bullish, but both its Seeking Alpha Authors' Rating and Quant Rating are Neutral.
    • Carnival (CCL -9.7%) says it is notifying guests that it will be cancelling more Carnival Cruise Line cruises as it extends the pause in North American operations to at least June 27.
    • Carnival Sunrise cruises out of New York are being canceled for the rest of the year.
    • "We are actively engaged with the industry and our stakeholders on additional protocols that we will be implementing when we resume service."
    • Carnival press release
    • Nearly one in four (24%) of small businesses have shut down temporarily in response to the coronavirus pandemic and 40% of those that haven't expect to shut down within two weeks, according to special survey of the  MetLife & U.S. Chamber of Commerce Small Business Index.
    • 43% believe they have less than six months to a permanent shutdown if they don't get further support; one in 10 say they have less than month until a permanent shutdown is unavoidable.
    • More than half of small businesses (54%) view the overall health of the U.S. economy as "poor."
    • Almost half of small businesses expect it will take six months to a year for the U.S. economy to return to normal.
    • What kind of help do they want? Respondents are most favorable toward direct cash payments (56%), SBA disaster loans (30%), and temporary cancellation of business payroll taxes (21%).
    • Vancouver Mayor Kennedy Stewart over the weekend warned of a round of service cuts as tax revenues run thin.
    • A survey by Vancouver-based Research Co. shows 25% of the city's homeowners planning to pay less than half of their property tax, with 6% planning on not paying a thing. More: 46% of residents have lost their job or suffered a reduction in hours; 50% of households report a drop in overall income, with 24% reporting a significant decrease.
    • Unable by law to run a deficit, Vancouver has already laid off about 1.5K of its more than 7K employees.
    • Already projecting nearly $200M in revenue losses thanks to the pandemic, Vancouver could suffer another $325M in lost money should that above 25% hold true, say the mayor. Vancouver, he says, would need to liquify assets and exhaust all reserve funds just to avoid insolvency, he adds.
    • Gamestop (GME +13.1%) is up sharply after stakeholder Scion Asset Management disclosed late on Friday that it boosted its position in the retailer to 5.3% from 3.7%.
    • Scion is the hedge fund shop of Michael Burry, who also made news last week for calling the universal stay-at-home orders the "most devastating economic force in modern history." Naturally, Gamestop has been hurt badly by store closings.
    • SEC Form 13D
    • United Airlines (UAL -9.5%) and Delta Air Lines (DAL -7.3%) are considering selling future miles awards to credit card partners JPMorgan Chase (JPM -3.1%) and American Express (AXP -5.8%) at a discount to raise cash, sources tell The Wall Street Journal.
    • Airlines have used the strategy before following the 2008 financial crisis, 9/11 and when trying to stave off bankruptcy, although it is seen giving away leverage to the credit card issuers.
    • "They’re scraping the bottom of the barrel," says CreditSights analyst Roger King on the cash-generating moves by airlines in general.
    • Ford (F -3.9%) trades lower after disclosing that it expects to report Q1 revenue of about $34B vs. $37.2B consensus and adjusted earnings before interest and taxes of approximately -$600M.
    • "We believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions," updates Ford CFO Tim Stone. Stone.
    • The automaker is taking more steps to preserve cash, including lowering operating costs, reducing capital expenditures and deferring portions of executive salaries. A phased restart of manufacturing in the U.S is being considered, although no timetable has been set.
    • Goldmans Sachs is out with a warning today indicating companies that landed government financial aid over history often rallied in the near term, but tended to lag the broader stock market in the medium term and longer.
    • "Although companies and industries have generally witnessed a brief rally immediately following government relief, the outperformance has not usually persisted over a longer-term horizon," reads the firm's warning.
    • The pop-and-drop phenomenon could be something to consider with companies considering financial grants -including American Airlines (NASDAQ:AAL), Delta Airlines (NYSE:DAL), Southwest Airlines (NYSE:LUV), United Airlines (NASDAQ:UAL), JetBlue (NASDAQ:JBLU), Hawaiian Holdings (NASDAQ:HA), Alaska Air Group (NYSE:ALK), Allegiant Travel (NASDAQ:ALGT), Spirit Airlines (NYSE:SAVE), Mesa Airlines (NASDAQ:MESA), SkyWest (NASDAQ:SKYW), Hilton Worldwide (NYSE:HLT), Marriott International (NASDAQ:MAR), Dine Brands (NYSE:DIN), Brinker International (NYSE:EAT) and Darden Restaurants (NYSE:DRI).

  41. SQQQ/Wing – It's a good hedge, just not good if most of your bullish positions are in the S&P or Dow.  As noted above, our STP/LTP is perfectly balanced and we have SQQQ and SDS hedges.  You have to find the right mix for your own portfolio.  

    LTP $545,985, STP $548,188 so $1,094,173 vs $1,091,906 at 11 – that is BALANCED!  


  42. Airlines selling miles is a scam.  They did this discount thing many years before and as soon as the market came back they raised the number of miles for tickets by more than enough to offset the discounts.


  43. How do the big boys or bots make money tagging the stops?   The price has to be pushed to wherever the stops are which costs something so how do they make money on the reversal?


  44. Airlines/Tangled – I know, they ruined the programs, which used to be worth pursuing.  

    Stops/Tangled – They don't do market orders, they do limit orders so they just keep hitting different levels seeing if they get a trigger and, a lot times, if they exhaust one level, like if there are 10 bids for /ES 2,750, then as soon as those disappear, if they are looking to buy, they first offer to sell 1 lower and 1 lower and 1 lower until they find the next group and then, if that's small, they'll blast it out of the way and push lower.  Once the find significant resistance, they'll then put in their buy 100 order.

    From your perspective, if you had a stop at 2,745, they might have flashed /ES down from 2,750 to 2,742.5 and hit your stop – right before it spiked right back up again.  The money they make is having the cheap entry – especially when they KNOW the only reason /ES was selling off is because they were the ones pushing it down.  

    Same thing works with any stock or index in either direction.


  45. TSLA $650.

    Nas up 1% on the day – interesting.


  46. Looks like AMZN and NFLX propped up Nas


  47. Airlines – If they sold gift certificates at 75 cents on the dollar, or 50 cents, they'd probably have some takers. Points…nope.


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