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Non-Farm Friday – 4,000 Dead People Don’t Need Jobs Anyway

If this were a stock chart, what would you predict?

The only thing outperforming BitCoin and Tesla in 2020 is the number of people dying from the virus every day in the US and, just like the stock market, we are setting new records almost every day.  Over 4,000 Americans died yesterday but we're too distracted by the revolution to keep the asshole in power who got us into this mess to pay any attention to the actual mess.  

Certainly Donald Trump isn't paying any attention to the virus or the inept roll-out of the vaccine or the complete failure to provide PPE equipment to protect our people.  None of this has been on his agenda and President Thanos will do whatever it takes to stop Joe "Iron Man" Biden from doing something about it.  365,000 people have died in the US so far from Covid-19 (yes, it's been a full year as it's now 21) yet, if 4,000 of them died yesterday, that's a pace of 365,000 in 91 days.  So, at this pace – which is accelerating rapidly – as many people will die in the next 3 months as have died in the last 9 months.  

So far, we have vaccinated 5M people in the first month and that's a bit less than 2% of the population so only about 50 months and we'll get to everyone.  Since the vaccine doesn't stop people from spreading the disease – it will have very little effect on slowing the spread until about 1/3 of us are vaccinated which, at the current pace, will be mid-2022.  Hopefully Joe Biden will do better than Donald Trump and, thankfully, Mitch McConnell will no longer have the power to stop him.

The market, meanwhile, does not stop going higher – no matter what happens.  This is fantastic for those of us who own stocks but not very good for the rest of humanity, who are seeing the largest wealth gap in modern history grow away from them day by day.  

We're playing the S&P Futures (/ES) short at the 3,800 line – simply because it's a good percentage hedge over the weekend as the S&P 500 could easily drop 50 or 100 points for gains of up to $5,000 per contract and the Dow (/YM) Futures can be shorted at the 31,000 line with tight stops above and those pay $5 per point and the Dow has very little support back to 30,000 – also good for a potential $5,000 gain per contract on a pullback.  The Nasdaq (/NQ) Futures are also a good short at the 13,000 line at $20 per point, per contract.  

8:30 Update – No surprise at all that the Non-Farm Payroll Report is showing 140,000 jobs lost to mark the last month of the Trump Error.  Our leading Economorons had forecase GAINS of 71,000 so they missed by less than 300%, which is pretty good for our economic experts.  It's hard to imagine what planet these people live on as anyone who walks down a street or has friends or family who actually work at real jobs knows how rough it is out there for the average American – besides all the dying, I mean.

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Of course more deaths and less jobs mean MORE STIMULUS, so we can't be sure how the markets will take these negative reports but I'll certainly feel better with some additional hedges in place over the weekend – just in case there's an attack of reality at some point.  On the bright side, 135,000 jobs have been added to the prior 2 months but the trend is clearly not our friend here and it remains to be seen how much of a shot in the arm this second round of stimulus will provide. 

A big negative that leading economorons may not notice is the 0.8% rise in average hourly earnings for those who are still working as that is a leading indication of inflationary pressure and also negatively impacts Corporate Profits and 0.8% is 4x what was expected and highly inflationary.  

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That's another factor in the upcoming Biden Presidency – an acceleration of rising Minimum Wages as well as a move back towards labor benefits like Health Insurance, Child Care, Pension Protection, Paid Leave, Safe Working Conditions…  If you are a Republican, we will wait for you to finish throwing up….

Just when we thought we had rolled back all the Labor Progress our fellow Americans fought and died for over the last 100 years, here comes another Democrat to protect all those snowflake workers.  Is it too late to storm the Capitol?  Earnings have been pretty good so far with only Greenbrier (GBX), Acuity (AYI), Bed, Bath & Beyond (BBBY) and Lindsay (LNN) missing this week out of 22 reports.  That's still almost a 25% miss rate but it's a small sample and not a disaster considering the state of things this year.  

Earnings season begins in earnest next week and we'll look for clues in the guidance now that we finally know Joe Biden will be President with a Democratic Senate and a Democratic House.  While the party may be over for Big Business – it should be just the boost the other 99% of the country needs to get America working again and maybe put a stop to all the sensless deaths caused by the negligence of the current Administration.

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Have a great weekend,

- Phil

 


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  1. Good morning!

    Gold has lost its luster to a zero and ones fabrication called bitcoin.  What happens when there is no electricity and one needs to pay for something? Long gold. 

    Also, heard that the Middle East is now collecting Bitcoin instead of dollars to sell barrels of oil. King Dolla holla is fading into the past.


  2. Added some lines for the S&P. Nasdaq is hopeless now as far as lines! Probably need some reset. The Biden boom is catching me flat-footed here :-)


  3. Good Morning.


  4. Jobs / Phil – Last month of the Trump error could be far in the future I am afraid! That ship won't turn in a month! 


  5. Must hold on Nasdq should be around 11K, SPX ~3250 and 29K for NYS… :O(


  6. Phil/Admin – Can we go back to the old width for the site. It was lot better when arrange multiple windows in a cascade style.

    Thanks


  7. Good morning everyone. Sorry for the delay. Here is the link to Wednesday's webinar replay. 

    https://youtu.be/5ARWNOc-P1o


  8. Good morning. Wonders will never cease. I actually got into PSW without a fight with all my computers! HOnest severe warning as unsafe, all my credit card info would be breached etc, etc. Cold and foggy up north and my sons house in TCI was burned to the ground NY's eve, but life does go on. He let the insurance lapse since his restaurant was closed down. Nothing like losing 1 mill on a waterfront home. They think it was fireworks that set trees on fire then reached house. Of course he didn't let me know about his trevails until too late. Just when you think nothing more could go wrong.


  9. Good morning!

    Bitcoin/Pharm – If they start taking BitCoin for oil that can send it to the moon.  Good scam if they've already accumulated a ton of them and now cause a massive transaction base to form – smart! 

    Bigger Chart – Needs to be bigger.  Maybe a log scale?

    Width/Ravi – I agree, it's annoying.  Programmers probably will fix on the weekend.

    Wonders/Pirate – Yes the programmers have actually been getting some things done this week (but screwing things up too).  Holy crap, so sorry to hear about your son's house.  


  10. Phil/CHL-  Seems like there is an advantage to converting the ADR to HK shares and the cost is minimal (unless all holdings are banned by this November) .    The ban does no damage to the Chinese and it is not much of a strategic move you would think it would get reversed at the very least as a bargaining chip.  


  11. Most of my CHL short puts just got assigned to me despite the puts having huge premium on them.   I ended up selling the stock and making a small profit on them.  Nice.


  12. CHL

     

    I have long Jan 2022 call options  — there is currently 0 bid price

    Do you think I can just hold on to them (no choice) and hope the stock gets relisted before then???


  13. Any ideas on how the CHL dividend will work?  Will it be suspended along with trading?  What a cluster. 


  14. If CHL is delisted, it can go on to the OTC market, no? Nothing should change when it comes to the dividend.


  15. Phil/GS Thank for AAPL ideas .. in process. Re your GS comments, would you advise rolling up the short $210 calls to widen the spread given the jump in price?

    Good to see the site connection is now https secure .. passwords safer, might be related to new width?


  16. Not sure CHL can be on the OTC market after Nov 2021.  Think you still get the dividends until then though.  


  17. CHL/Seer – I don't see Biden continuing this policy.  It's silly and we go back 20 years to China no longer allowing US ownership etc. in retaliation and that would freak out the S&P 500.  

    CHL/Jeff – So CHL is at $26.33 and the $25 calls are $0/10.  I'd offer 0.10 to DD and halve your basis.  It says I can sell the $20 puts for $100 too – I'll take that!  No likely CHL goes to -$80 and costs me money, right?  We knew this was coming, will be untradeable for a while.

    CHL/Jeddah – You still own the stock.  They can't confiscate it so you should still get your dividend when it's paid.

    And what Pharm said.  It's only being delisted from the exchange – it's not being vaporized.  

    GS/Wing – Not sure which $210 calls you mean but sure, if you can roll them out and up for free to widen the spread, that's fine but, if you are going to put money in, I'd rather start a new position but then GS is too high so I wouldn't right now.

    Indexes going red. 


  18. CHL I tried this morning to sell puts for the indicated price. It was rejected by TOS. They only accept closing order so said. Yes they assigned some puts to me. I feel after the yellow loco clown is gone, things will turn to normal again.


  19. wow, TSLA is at 881, holy smokes. since it doesn't obey any reasonable valuation metrics, there's no theoretical upside limit


  20. you know the joke fool me once? Well, how about fool me 1000 times? TSLA 870 calls, bought at yesterday's close, and expiring today, are up 1800%.

    So any one want to short this thing??? :)


  21. pharmboy – if bitcoin's hash power were suddenly, drastically decreased, bitcoin runs into its own mining progression paradox: there is no way for the difficulty to be reduced unless blocks can continue to be found. This is bitcoin's biggest weakness. It's sort of an extreme case, but a real one. Take for example, China bombing all of their own mining sites simultaneously while some strategic "blackouts" occur elsewhere. If Bitcoin mining hashpower fell by an order of magnitude, the time to find block next goes up by the same (now 100 minutes), which makes people nervous and dumps the price, which makes the existing miners that much less profitable and basically bitcoin gets "stuck," it cannot progress to block next. 




  22. Talking about TSLA here my latest play on LI

    LI210618P28 18-Jun-21 28 -2 PUT 4.1 4.225

    LI210618C36 18-Jun-21 36 -2 CALL 7.45 7.5

    LI220121C22.5 21-Jan-22 22.5 2 CALL 16.75 16.85

     

    Entry cost: $1,010.00 (net debit)

    Maximum risk: $6,609.80 at a price of $0.00 at expiry

    Maximum return: $2,226.00 at a price of $36.00 at expiry

    Breakevens at expiry: $25.25


  23. Analysis: Ted Cruz would like you to just forget the last 4 years




  24. MMM nearly 10$ down over one month 175 now 166 what gives ????



  25. 10 GS '23 $170c ($61)

    - 10 GS '23 $210c ($42)

    - 5 GS '23 $165p ($21)  

    Do you see a worthwhile roll Phil? GS around $286.


  26. FTR up 55% today ;)


  27. Wow markets take a big turn down


  28. Finally getting some real selling.   

    We'll see what sticks.

    TSLA – Out of control (again).

    GS/Wing – You have a $170/210 bull call spread you paid $19 for and it's going to pay you back $40 (not including put profits.  Why mess around with it?  Is 100% not good enough for you?  Does it bother you that it's so in the money it's pretty much a sure thing?  The $170/210 spread is now $116/77 so almost $40 so just cash it in let the puts expire and find something to play that hasn't already popped 50% in 12 months.

    FTR/Dave – Too little, too late on them.

    Oil at $52!


  29. How many football games in the next week? Basketball?  Hockey?

    DKNG…hum….


  30. DKNG…gonna try a few Feb 60Cs for 2.11.  


  31. Pharm-

    I like your posts about all the biotech companies -- keep them coming

    Wouldn't you get more value for a BCS on DKNG?

    you could get a Feb 50/60 BCS for 3.43 and then its 6.57 profit at $60.

    you would need DKNG to be 68.68 to get the same return with the OTM call


  32. Jeffl….biotechs. Still watching and adding to a few.

    DKNG…I think it only needs to get to 62.11…but I am betting (ha) on a pop.  Then I will get out.

    It is strange, as I was in TWTR and UBER early on, rode up and got out…too early I guess. 


  33. ZM Feb5 $400Cs. $7.10. Buying a few of those as well for a run back up to $400.  This is my 'gambling', so in and out at your own peril.


  34. GBT is up to $49….ahh, the smell of blood in the street (d'oh).


  35. Phil/GS  Hey Phil can’t we ask a simple question without a rebuff  :(    

    I’m not even a Trumper, just an appreciative student learning to make good choices.

    Why mess with it?  Because there is something constructive to do with it, as you advised, – and it saves 2 years.

    Is 100% gains not good enough?  Of course, but why would you ask me that when you mostly go for much bigger gains?

    Does it bother me it's a sure thing in the money? Well it's a sure thing I'm gonna die but I'd still like to make the most of the time I have before that ;)

    Thanks for your good council as usual .. (we all hate Trump ;)


  36. BABA….Feb 250/280 BCS — 800 contracts at ~6.1 just went through.  (I was going to buy the 250s.) Someone is betting big.


  37. LULU…Feb $400 calls also look appetizing. In a few of those as well.  

    SPY at ATH again. YAH!


  38. Good article, 1020.

    DKNG/Pharm – Could almost be a Stock of the Future but I can't get past the no profit thing.  What are they spending all that money on? 

    Rebuff/Wing – Sure, ask a question that doesn't need rebuffing….  cool   The point is, don't take a perfectly good play and mess with it.  You chose a spread that makes 100% and it's making 100% – end of story.  You don't have to wait 2 years, you can cash it out now and move on to another 100% play but NOT THE SAME STOCK THAT ALREADY GAINED 50%.  You bought it at a bargain – that's why you made money.  Now it's not a bargain – play something else!   Not sure what any of that has to do with poor President Trump though – you guys are so political….

    BABA/Pharm – Aren't they a short with BIDU?  They could all get de-listed under the same logic as CHL.

    LULU too expensive for me here – and I used to like them.

    Have a great weekend folks, 

    - Phil


  39. wingwalker,

    GS reading your notes, I actually wanted to answer your question before Phil. You will not believe how many buffers I received during my time with this site, I learned this way. But to be truthful I was given you the same answer. The play was only set up a very short time, Stock goes up and down and this play started on super good run, so my answer why mess with it. By selling a leap call to the long call you sealed you profit. Rolling the short call already to a higher level after such a short time, will only cost you money, and mostly would not even work out in your favor. 

    So I can only say do not be so sensitive when it will be explained a bit ruff. 


  40. Anyone has thoughts on the volatile movement on the metals? (GLD, SLV, and the miners)  

    USD got slightly stronger, Treasury yield got slightly higher, but the move seemed disproportional.

    Or is Bitcoin getting not just the mindshare but also the money flow now?


  41. Phil/Trump – so you teach us when a play has made good money quickly, then cash out .. how is that messing with the play? Isn’t it simply the logical thing to do? Why be so touchy about giving good advice? Is a faithful student not good enough for you? Does it bother you if it’s such good advice that it should be obvious? And why are you yelling about not re-buying GS? No-one mentioned that except you. Links to poor Trump .. well isn’t Trump known for turning on his poor admirers if they say something he doesn't like?   ;)

     

    Yodi, Danke für seine freundlichen Worte. All in good fun, I hope  :)


  42. stimulus / Dems will issue the $2k checks and market and commodities will run


  43. Phil – Question about options

    if you own a stock and sell calls against it and it shoots up – at what point would you roll the calls up?

    Ex. I have 500 MP @29.50 with -3 June 18 15 Calls (around 14.50) & -2 June 18 20 Calls (around 10.90)

    do you have a set rule? like delta >.9 or something like that

    and how do you decide what strike to roll them up to?

    happy to get input form other members on their strategies as well

    thanks

     


  44. also FTRCQ back from the dead?




  45. coulter531,
    As you ask for other input as well, I can only give you my WAY. Stock always goes up or down with a delta of 1. 
    Options have always lower deltas depending how close you are to the out (OTM), at (ATM) or in the money (ITM) the option is. By the in the money position of an option you differ between extrinsic and intrinsic value. Important is to look for the extrinsic value or the premium which the option has in relation to the strike price. If there is no premium left you can expect the delta of the option to be closest to 1, with other words the option increases just about the same as the stock price. 
    Under these circumstances you can expect to be called for by the buyer of the option to deliver the stock at the agreed to strike price. Option has no more premium left.
    The second way you can be called to the deliver the stock is at the time a div. is paid, where the premium (extrinsic value) is less than the actual div. paid.
    In your case MP pays no div. so only the first case does apply. Your 15 strike is 100% ITM (in the money) and the buyer of the call can call any time for the stock even that your option is only due in June. At this point your play has reached max. profit, and you could leave it as is, and you will, if called, receive 15 $ for the option contract, or if you still like the stock you can roll the option to a further month or months out at a higher strike price such as 30 or 35, where you will pay extra for the premium asked for. If you roll from 15 to say 35 you should not pay more then, as a rule of thumb, 7.50 extra. 50%.
    I personally do not like to set up option plays, with buy stock to cover, if they do not have at least a 3 to 3.5 % yield. Poor man's play or leap BCS are better plays. 
    Obviously if assigned at any point, you will lend up with a short stock position, which has to be resolved pretty soon, the stock can go much higher if you wait and you will pay more or if lucky the stock goes down, mostly after the div. has been paid, and you can liquidate the short stock for a better price. But I would not count on it!!!!
    Your 20$ strike price has still 1.40 premium and is in no danger of being called for. I would do nothing until every cent of the premium has been burned up. 
    For me, and this is not the rule for every one, I wait till the last 5 cents of premium has been burned up, before I roll, if I still like the stock at the given price. 
    By rolling up you, to whatever future month you should keep an eye on the 50% rule.


  46. Thanks yodi

    "If you roll from 15 to say 35 you should not pay more then, as a rule of thumb, 7.50 extra. 50%."

    50% of what?

    The roll I was thinking of doing (yes I still like the stock) was

    close the June 15s for $14.50 (current stock price 29.5) and sell the June 30s for 6.60 (all premium)



  47. coulter531 If you roll the option from 15 to 30 you step up 15 $, 50% there of is 7.50.

    As I said the stock does not pay a div. However a non div. paying stock always has more premium in options. So if you do not mind putting in your case 29.50x 500 = 14,750.00 in cash to this stock, and you expect still a good capital gain of this stock, by all means, stay with it. Remember the stock always increases more than the option, so in a up going stock price, you always ahead. 

    Rolling to the same month to 30, you actually do not expect the stock to go up much further, the capital gain is only .50 from todays stock price. I would roll up to Dec. 21 to the 35 call for 8.80 less the 14.50 you owe the buyer of the option, cost you 5.70 less than 50% as the gap is 20$.

    Remember prices may change at opening and could be different to the above.


  48. Law Enforcement Braces for More Trump Marches



  49. China pushes back against US sanctions with new rules