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Monday Market Momentum – Up into the Fed Meeting

Federal Reserve Thanksgiving | Leave The Plantation OrganizationUp we go again.

Of course, we're up today because Europe and Asia are up and they are up because we were up 2.5% on Friday and they are just catching up but that doesn't stop our pre-market traders from seeing a rally in Europe and trying to catch up to that – even though their rally was a reaction to our rally and yes – it's all total BS but that's the way the market works, so don't whine about it

Despite the record-high markets (or maybe the record-high markets are because of them?), Congress is still talking about another stimulus package on top of the $3Tn they've already doled out plus the $4Tn the Fed has been tossing around.  House Democrats already passed the HEROES Act in mid-May, which would provide a one-time payment of up to $6,000 to households and come with a mammoth $3 trillion price tag which, so far, the Republicans have shut down because this money would actually go to people, not Corporations – so they've been pushing their own bills but stimulus is stimulus – more or less.

The extra $600/week unemployment benefits for our 25M unemployed citizens runs out on July 31st at which point this party could come screeching to a halt as that's $2,400/month x 25M = $60Bn/month of stimulus that could be taken away – then who's going to order take-out?  

This economy is fake, Fake, FAKE yet we have many many people in willfull disbelief (Jerry) who would much rather go on as if everything was great than face the truth – that the Government (Elaine) is just putting on a big show to make the voters feel better and is generally lying about the economy's "performance."  To George (skeptics), it just doesn't seem likely that things could be going so well – given the actual evidence he sees of economic performance yet even he WANTS to believe all the "breathing, the panting, the moaning, the screaming" is all for real and, unlike Elaine – you're not going to have a moment of truth with this Government – so enjoy your fantasy!

Even Friday's Non-Farm Payroll Report, which kicked off and 829-point move in the Dow, was FAKE!!!  In the May Jobs Report, over 3 MILLION workers were mis-classified as "absent from work" instead of laid off.  That "mistake" gave us a gain of 2.5M jobs on Friday rather than a loss of 500,000 jobs and, EVEN THOUGH the BLS issued a correction right after the report was released, President Trump took credit for the 2.5M job gains as if they were real with all the breathing, panting, moaning and screaming that has come to defy the United States' President.  

Black Lives Matter: A movement in photos Photos - ABC News

"Nobody has ever done, for the Black Community, what President Trump has done – think about it."  

Yes, let's all think about that… 

See, it doesn't matter if it's FAKE!!!, as long as you WANT to believe it then you are happy to hear the BS – even if you know it can't possibly be true.  Trump had his usual slew of lies in that press conference but the most insulting was the one about Black Unemployment, which was the only category of Unemployment that went up in May – even with the FAKE!!! numbers.  

Oh well, what does it matter as long as the market is going higher? 

If you can live with that attitude – great – I guess.  If not, then you need to hedge, even when the hedges aren't working.  That's what we did during Q1 and THANK GOD we had those hedges when SUDDENLY the markets realized there was a virus in March – the same virus that we had been talking about since Christmas.  

The Severity Of The Impact Of The Stock Market Crash Of 2008-2009Markets aren't quick to react, they are slow to react and they are very slow to accept reality.  We had a Financial crisis that began in 2007, when the Wishire 5000 (most of the market) went from 15,200 in September to 12,500 in March, 2008 - a 17.7% correction.  We recovered from that in May of 2008 (sound familiar) and THEN the whole thing fell apart and the market fell another 50% into March of 2009 – a full 18 months after the correction began.

Here we are just 3 months after our correction began declaring victory and we're back to people predicting Dow 30,000 and Nasdaq 10,000 because that's what happens when your economy does all that breathing, panting, moaning and screaming, right?  

Let's hope it's not faking it….

Image

 


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  1. Added the Nasdaq chat we revised in January because it seems relevant now!


  2. Someone was commenting this weekend that the market is now priced the same that it was when we had 3.5% unemployment when in fact we have 15% (after they correct the mistake). And as Phil points out, unless these 20M people still unemployed find jobs by July 31, this could all unravel. 

    On the other hand, the market could be rallying on the prospect of the end of the Trump error. We make new highs as new polls show Biden with a bigger lead. If it's one thing that markets don't like, it's chaos and chaos is what we have now! So a change could bring some order and maybe the law back as well!

    If I were Trump, I would resign now and ask president Pence to issue a blanket pardon for everybody in the administration and also his family. Pence might think on how that worked for Ford, but that might be his only chance to be called Mr President so he might do it… 


  3. Good Morning.


  4. StJ/Trump – While I'm sure most of us would love to see Trump step down, his narcissism won't let him.  He's a child trapped in an adult body and as such he has no concept of the future or repercussions/consequences, as he's never had to face consequences for his actions in his life (and when he has, he's always able to find a scapegoat or excuse).  Like a toddler, he is only capable of living in the present, so he will not resign as he sees himself as invincible/untouchable.  

    That's an interesting thought about the markets possibly starting to price in a Biden victory and a return to stability. However, while I'm stil very much a novice compared to many of you on this site, I have talked to too many people over the past couple months who have been jumping headfirst into buying stocks--and these are not people who should be buying stocks….what can go wrong?


  5. BA…Wow. wow. whoa!

    Phil, contact sent to you on nitrile gloves.


  6. CHK wow wow whoa as well. And wow.


  7. Phil/ACB/CHK

    CHK – was there a reverse split and then the increase?

    ACB – I had Jan 22 $1 Calls at 0.45 purchase price. With the reverse split they should be similar to the $12 calls. At the current prices of $14.35 my $1 calls are only at 0.30. this does not make sense. or basically it is the way to screw people..

    regards


  8. Markets / Marz – This looks to detached from reality for me at this moment! Markets seem to way ahead of where Main Street is now. But as Phil says, $6T is a lot of money even though little of it with go to the people who need it. But they also don't play the markets.


  9. bynd is up 10. Chk is up because opec cut production? But we don't need it and oil is down with ung?  CRAZY!


  10. Good morning!

    Now we have massive supplies of gloves and masks to sell if anyone needs – made a lot of deals over the weekend.  Other PPE equipment too but we're sticking to MASSIVE orders – 10s of millions – though I can pull strings for our Members if needed

    There are hundreds of thousands to be made in commissions doing these things so, if you know people in the industry on the buy side – send them over!

    Big Chart – Gotta short /ES at the 3,200 line – simply not rational!  Don't follow me, I've been wrong for a week straight!

    Nasdaq 10,00 will be interesting too.  Still waiting for /RTY to catch up, 10% to go.

    Thanks Pharm but I don't see anything in my box at the moment.  BA and CHK amazing:

    CHK/Pat – They issued a "Going Concern Warning" on May 11th and no new news so far.  They were $14 2 days ago and all this is after a 1:200 reverse split on 4/15 so divide $45/200 = 0.225 – this is just a penny stock with a $420M market cap (now that it's up 100% for the day) attracting way too much attention. 

    ACB/Pat – Another penny stock!  They reverse 1:12 on 5/11.  As to the pricing, the old options have essentially become illiquid – no one is trading them so there are no bids or asks changing the prices.  If you wait until 2022, you'll just get what you get for them but it's going to be very hard to generate interest for them in between.  Of course, logically, you could consider that a bargain and buy 12,000 of the old 2022 $1 calls for 0.30 ($360,000) and sell 1,000 new 2022 $15 calls for $4.50 ($450,000) and you would pocket $90,000 and IN THEORY, you can't possibly lose.  I wouldn't want to test that theory but I'd love to see someone do it!

    Don't play/StJ – That's the point though, most of the $6.7Tn went to people who DON"T need it and those people do play the markets.  

    Crazy/Pirate – It's totally nuts but it's Monday, so I reserve judgment. 


  11. Congratulations to New Zealand. Zero new cases today. Only 22 total deaths (1.46% of cases). Imagine if we had a young, charismatic, intelligent leader that cares about her citizens well being, as opposed ot the pig asshole we have.


  12. Phil, Selling any GILD puts today?


  13. BDC My son lives in the Turks And Caicos main island capital Providencialis Provo for short. 12 cases 2 deaths. No flights in or out for months. Is not reopening until July 22 to any flights. Heavy Afro population and one small hospital. English held. His restaurant was shut down early March with no delivery's or pick up service. That's what it takes I guess.


  14. I'd call 'him' a schweinhund, but yodi thinks it's offensive…. ;)

     

    Now Yodi!?


  15. “It’s just so crazy that Wall Street is perfectly fine, untouched,” Cuesta said. “I feel like Wall Street should feel how we feel.”

    Doesn't that just sum it all up?


  16. I got into CHK. Mania. Market purchase filled at 49.25.

    The feeling I get is there's about 6 months out of every 10 years where penny stock garbage flies. We're in the middle (hopefully not at the end yet!) of one of those times. HTZ, GNUS, MITT, XSPA, NINE, RNET, ETHE, CHK, etc etc. It is often also the sign of the ultimate final bubble. Before The Big One. 

    In the time it took me to type this CHK went to 52.82


  17. Dream on BDC!

    Happy 7M infections by the way – US will hit 2M of those by Wednesday.  

    We hit 1M on 4/28 so that was 5 weeks.  500,000 was 4/10, 250,000 was 4/2 (wow) 125,000 was 3/29 so doubling went from 4 days to 8 days to 18 days to 37 days that's a good pattern but still means we have 4M  infections just in time for the kids to go back to school in Sept. 

    The question is, will the lockdown reverse the slowing trend and, keep in mind, it's not at all slowing in number of new cases, just the rate of expansion in the population at large.

    https://www.nytimes.com/2020/06/06/world/coronavirus-update-us-usa.html

    With states beginning to allow varying degrees of economic reopening, large protests against police brutality being held in dozens of cities and warmer weather inviting people outside, forecasters tracking the Covid-19 pandemic in the United States are approaching a difficult juncture.

    While the portrait of the country over all has improved significantly in recent weeks, epidemiologists have cautioned that different states are likely to experience very different challenges now in measuring and controlling the virus’s spread.

    According to data compiled by The New York Times, more than a third of states are still seeing new infections increasing. But as many of them move ahead with reopening plans, their outcomes may depend on factors like how stressed their health care systems have been and how far they are along the curve.

    In some relatively large states such as North Carolina and Arizona, increased testing suggests that infections are still climbing quickly and may spike further as more people venture out.

    In another group are states that have achieved modest declines in new cases, but where the sheer number of people already infected remains the main source of concern. Even as states such as Maryland or Connecticut have seen small declines in new infections, both still have alarmingly high counts per capita, which have taxed health care systems for weeks.

    The fear for states in the second category is that with scores of people already infected, recent declines could be quickly erased through increased social contact in the months ahead, threatening health care systems anew.

    Yeah, that re-opening is going really well, right? 

    Don't worry though, 2/3 of the people with outcomes aren't dead in almost every state!

    30,374 deaths, 67,544 recovered

    New York US

    12,176 deaths, 27,824 recovered

    New Jersey US

    7,316 deaths,  recovered

    Massachusetts US

    5,943 deaths, 53,670 recovered

    Pennsylvania US

    5,904 deaths,  recovered

    Illinois US

    5,895 deaths, 42,041 recovered

    Michigan US

    4,633 deaths,  recovered

    California US

    4,071 deaths7,284 recovered

    Connecticut US

    2,936 deaths, 31,728 recovered

    Louisiana US

    2,776 deaths4,240 recovered

    Maryland US

    2,712 deaths,  recovered

    Florida US

    2,379 deaths,  recovered

    Ohio US

    2,303 deaths, 25,138 recovered

    Indiana US

    2,180 deaths,  recovered

    Georgia US

    1,841 deaths, 49,758 recovered

    Texas US

    1,527 deaths, 4,074 recovered

    Colorado US

    1,479 deaths, 6,538 recovered

    Virginia US

    Oscars: Every Best Picture Winner Ever Ranked From Worst To Best ...

    Brazil stops releasing Covid-19 death toll and wipes data from official site

    See, problem solved!  

    After six months of coronavirus, how close are we to defeating it?

    Benjamin Netanyahu, the prime minister of Israel, has said his government is hitting “the emergency brake” on its easing of coronavirus restrictions, as increases in the number of cases apparently began to accelerate in the country.

    Netanyahu said that experts had showed him and other ministers that there had been a “steep increase in morbidity”. Although Israel is regarded as having done well in tackling its outbreak, about 800 infections were detected in the last week, as opposed to about 300 in the preceding two weeks combined.

    GILD/JMD – Not low enough for me.  This is about the right price for them, not $85+.

    The European health regulator has confirmed it has received an application from the US drugmaker Gilead Sciences Inc for approval of its antiviral drug, remdesivir, as a potential Covid-19 treatment in Europe.

    “The assessment of the benefits and risks of remdesivir is being performed under a reduced timeline and an opinion could be issued within weeks,” the European Medicines Agency said in its statement.

    Jobs/Maslg – I ate out last night and I can't see how they could afford to stay open.  Once the aid runs out – there will be another massive wave of job cuts. 

    CHK/BDC – Well played!

    Meanwhile AAPL at $330 is pretty impressive.  $1.43Tn.  Remember when we thought $1Tn was kind of high?  Not really when you are dropping $60Bn to the bottom line…  Based on other tech valuations, AAPL should be a $2Tn company at this point.


  18. CHK haulted, apparently I entered 1-2 minutes before it happened. Uh oh once it starts trading again….


  19. GILD – referring to takeover bid


  20. CHK…bio you are buying lunch!


  21. willsons – can't sell it – those schweinhund's wont stop halting it!

    Up $2400 in 15 minutes, good grief, the casino is pumping out chips right now


  22. Hospitals Got Bailouts and Furloughed Thousands While Paying C.E.O.s Millions


  23. VIAC   someone heard the table banging (a little late, though) and sold 2000 Jan22 $20 puts for $4.00


  24. VIAC   2000 of the $35 calls trade, not sure direction


  25. 1020
    June 8th, 2020 at 11:32 am | Permalink    | Tweet thisIgnore this user    

    I'd call 'him' a schweinhund, but yodi thinks it's offensive…. ;)

     

    Now Yodi!?

    If you tell me who you talking about I could understand??????


  26. CHK…bio you are off the hook for lunch…


  27. Phil, agreed. In the UK consumers are paying down debt £7.4 billion during lockdown. That tells me they are hunkering down both literally and financially. People can order in and have close friends round … they don't want to take the risk of eating/drinking out and that must be crippling for restaurants and bars operating at reduced capacity that basically make a profit at weekends and Christmas. 


  28. Phil/Put Sale,

    At what point of your Put sale you think about buying the short Put back. After a while when the Short Put goes way out of money then the decrease in the value of the Put slows down as the stock price increases. I understand that you like to keep it till the end but if one has margin constraints and want to get out and sell another put then? Do you use any % basis to decide when to get out of the Short Put position?

    CHK/ACB – thank you!

    regards


  29. Phil…if you did not get my email…sent it to you this morning, hit me up at pharmboy123 at gmail.


  30. We headed for a double top.


  31. GILD/JMD – That's not going to happen.  

    Chips/BDC – Amerika, where everyone's a Millionaire!

    lunch time gif | Tumblr

    VIAC/Stock – Better late than never.

    Ordering in/Malsg – Keep in mind that, when people order in, the waiters don't get paid.   In the US, that's 2.5M jobs so almost 1% of the population and then there's the dishwashers and busboys and such and the linen companies lose business and so much less bread consumption!  It takes a long time for a recession to ripple through the whole economy – this is just the papered-over tip of the iceberg.  

    Puts/Pat – Proud to pontificate on put pivot points.  In general, I expect to make x per month so say we sell an 18 month put for $18.  If the stock is flat or up, we should make about $1/month so, 6 months from now, if it's at $12 – we're "on track" and nothing needs to be done.  If, however, we are at $6 then we are 6 months ahead of schedule and then we need to see if we have anything better to do with the margin than wait 12 months to collect the last $6 (since we collected $12 in the first 6 months - it's only half as good).

    We also have to consider if we are way ahead for silly reasons – like the current rally, which has driven the stocks up and the VIX down (though still double where it was).

    If we think those conditions will reverse, then why not pull the plug early on anything we're not 1,000% sure of (and we fortunately did that in early March in the LTP).  

    Finally, as a rule of thumb, if any short is up more than 50% with more than 12 months to go – you'd better have a damned good reason not to cash it out and if it's up 75% with more than 3 months – same thing and 15% and more than a month to go – that last 15% better be guaranteed by Lloyds!  

    Which reminds me, I like LYG down here.

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

    31,603 24,840 41,662 35,798 28,469 43,814 43,814 15,872 16,202 6.75%
    Operating Profit
    £m

    1,762 1,644 4,238 5,275 5,960 4,393 4,393     20.0%
    Net Profit
    £m

    1,412 860 2,413 3,559 4,408 2,925 2,925 1,976 3,264 15.7%
    EPS Reported
    £

    0.066 0.030 0.116 0.174 0.220 0.138 0.138     16.1%
    EPS Normalised
    £

    0.150 0.084 0.142 0.198 0.257 0.156 0.156 0.068 0.174 0.830%
    EPS Growth
    %

    +1,056 -43.6 +68.5 +38.9 +29.8 -39.2 -39.2 -56.6 +158  
    PE Ratio
    x

              8.85 8.85 20.4 7.92  
    PEG
     

                  0.129 0.282  
     

    Stupidly low price at $32Bn.  They pulled dividends in April but the last one was 0.10 so 0.40 a year is great for a $1.84 stock.

    For the Dividend Portfolio, let's:

    • Buy 10,000 shares of LYG at $1.84 ($18,400)
    • Sell 100 LYG Jan $2 calls for 0.25 ($2,500) 
    • Sell 100 LYG Jan $2 puts for 0.45 ($4,500)

    That's net $11,400 and we get called away at $20,000 if they are over $2 for an $8,600 (75%) profit in 7 months even if the dividend doesn't come back.  

    Just sent Pharm. 


  32. CHK 2.2B 2025 bond selling for 5c. Stock doesnt care.


  33. Phil – any thoughts on GNC here

    I had a 2.5/5 2021 BCS and some shares I thought were dead but big move today

    should I take some profits here?

    thanks


  34. Phil// LYG Dividend clarification – Looks like they issue dividends only twice year.  If that would be the case then the dividend will be only .20 cents vs .40cents.Does that change the premise behind your pick LYG?

    Thanks.


  35. Phil/Puts,

    Great stuff as usual! I am cashing in on the VIAC Jan 22 $15 Puts as it is more than 50% up at this point and I can use the margin to sell another put.

    regards


  36. kustomz / CHK – bonds shmonds. Stocks only go moon up!

    But yeah, I sold half at 64, will se what tomorrow brings.


  37. CHK/Kustomz – Crazy.

    GNC/Coulter – It's a gamble we liked last year but seemed too risky in the new portfolios (which hadn't made profits yet to play with).   Now it's back where we liked them in the first place but I'm not sure they'll survive so not for me.  These are the kinds of stocks we look at AFTER our Watch List is empty.  If you have profits, I'd take some but maybe let this run play out a little.

    LYG/Rookie – Ah, that makes more sense than 40/184 but still very nice so no, doesn't change as I'm expecting $0 dividends.  I like to buy stocks that USUALLY pay dividends but aren't at the moment if that's the reason people are dumping them.  More often than not, they resume dividends at some point and people stampede back in.  

    VIAC/Pat – See, that's the right way to think about it.


  38. GNC – sold 1/3 of my shares, sold 2021 2 calls on 1/3 for .55 will let 1/3 run and hopefully my 2.5/5 spread will come into play.  bid ask too wide right now to close out


  39. Vix was rising all day…interesting.  Making those calls and puts more expensive as the market goes up.  Someone is gonna wipe out premium.


  40. So CHK rose because filing for bankruptcy is a good thing if it gives control to the right people.   No comprendo.


  41. Got into COTY. Will hang out here for a bit