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Non-Farm Friday – Is America Working?

This has not been a good trend.

Since the ill-conceived Summer Walk-Out, when everyone decided the virus was no longer a threat.. just because…  we have been going the other way as the virus has re-asserted itself and last month we even had a net job loss of 140,000 jobs.  That's not good because Donald Trump was the first President since Herbert Hoover (-6.4M) to preside over a net loss of jobs during any term, losing 3M net jobs in 4 years.  

Keep in mind that we add about 2M people per year so we need at least 1M more jobs per year just to stay even (with 1/2 the population working) so losing 3M jobs puts us 7M jobs behind in 4 years so Biden will have to add 150,000 jobs a month to keep up with population growth AND another 150,000 a month to make up for the lost Trump jobs over the next 4 years – just to get us back to where we were before the Trump error began.

That's 14.4M jobs in 4 years but it is possible as Joe Biden was Vice-President when Obama added 10.4M jobs in his last term and Biden was a Senator when Bill Clinton added 12.3M and 11.3M jobs in two consecutive terms.  Heck, Biden is so old that he was a Senator back when Jimmy Carter and Ronald Reagan added over 10M jobs each.  So yes, we can make America great again and we started on that road yesterday as Vice President Harris cast the tie-breaking vote in the Senate to move forward with Biden's $1.9Tn Stimulus Package.  

$1,900,000,000,000 is certainly a lot of money.  In fact, it's $131,944 for each job we need to create over the next 4 years so of course the Republicans voted 100% against it as they don't want yet another instance of a Democrat turning around an economy that was wrecked by a Republican – how many Hoovers can there be before people begin to notice a pattern?  

Republicans offered amendments on cutting federal funding to states that have an active investigation into underreported deaths in nursing homes and blocking aid for schools that don’t reopen after teachers have had the opportunity to be vaccinated.  Another GOP amendment aimed to prevent Congress from raising the federal minimum wage to $15 an hour during a pandemic; President Biden’s relief plan calls for gradually raising the minimum wage to $15 an hour. The proposal would also bolster Federal unemployment assistance, send $1,400 direct checks to many Americans, and provide funds for vaccine distribution and offer aid to schools.  Every single Republican voted against this.

8:30 Update:  49,000 jobs.  That's all we added in January and that's going to be a black mark on Biden's record as he was President for 11 days during that slow growth period.  Well, that's how Fox News will report it anyway, right?  At least it wasn't negative but it's certainly not a sign that we're recovering without stimulus as we are still -7M jobs and let's say those 7M people made $35,000 a year that's $245Bn out of the economy right there which is why stimulus does make sense as the Government can borrow cheaply and fill that gap ($1Tn in 4 years) but what about the 160M people who are working but are struggling anyway?  That's why the stimulus bill is so high, unfortunately.

Today's Report also included annual benchmark revisions to employment. About 22 million jobs were lost in March and April at the onset of the pandemic and related business restrictions. Job growth, though, has slowed since the summer – which means our gap is more like 10M jobs, not 7M left to fill and 49,000/month is clearly not going to get us there.  

Late last year, many states and local governments mandated that businesses like restaurants close or reduce operations to combat rising numbers of virus cases. Some places have recently loosened those restrictions. Positive areas include manufacturing, with companies reporting increased demand for goods and new hiring, and housing, where low interest rates and the pandemic have boosted demand.

Speakig of demand, there may not be a lot of demand for oil but OPEC is keeping a tight reign on the supply and that's gotten prices back to $57 this morning.  “It looks like, at every turn, Saudi seems to want to support the market,” said Michael Hiley, head of over-the-counter energy trading at New York-based LPS Futures. “If demand really picks up, we could be short oil pretty quickly, because U.S. production isn’t going to come back fast.”

That's kind of funny as that quote is like any salesman telling you that you need to hurry or they'll be sold out – even though they never are.  There's no difference between oil traders talking up their product in Bloomber or GameStop traders talking up their stock in Reddit except the Reddit crowd are being investigated while these guys just keep screwing people over with their BS that costs not only oil traders money, but every single one of us is affected when we go to buy our next tank of gas at inflated prices.

Of course the oil market is not the same as a stock like GME because the people who are buying the oil futures don't actually want the oil they are buying contracts for – they are only buying them to sell for a higher price.  So, if enough people sell (short) those fake contracts and then wait until the rollover date – the "longs" will be forced to capitulate and sell for less – or face the consequences of the delivery of 1,000 barrels of oil per contract.

There are currently 407,318 open oil contracts for March delivery (407,318,000 barrels) and traders like Mike Hiley need to unload them by the 24th in order to avoid having to pick them up in Cushing, OK – a facility that can only hold 50M barrels and is already full.  So clearly these open orders are pure BS – nothing but empty trading instruments that have no basis in reality. 

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Cash - 56.46 56.46 56.46 18:06
Feb 04

56.46s*
0.77

-
55.69

-
n/a
Mar'21 56.46 57.09 56.43 56.94 08:08
Feb 05

-
0.71 118032 56.23 407318 Call Put
Apr'21 56.32 56.93 56.32 56.78 08:08
Feb 05

-
0.71 28817 56.07 265941 Call Put
May'21 56.04 56.61 56.02 56.48 08:08
Feb 05

-
0.68 11625 55.80 204076 Call Put
Jun'21 55.61 56.24 55.61 56.08 08:08
Feb 05

-
0.66 14604 55.42 254111 Call Put
Jul'21 55.17 55.69 55.17 55.61 08:07
Feb 05

-
0.63 6329 54.98 138258 Call Put

Crude's rally this week has put prices in technically overbought territory

We're going to short Oil (/CL) Futures again at $57.50 or if it crosses back below the $57 line first and use tight stops (0.05) above to limit our losses to $50 per contract but hopefully we'll catch a nice 0.50 connection and make $500/contract instead.  

SCO is the Ultra-Short Oil ETF and it's going to open at about $8.50 and I like them long and we can leverage that by buying the March $9 calls for 0.65 and I usually hate to buy naked calls but these were $1.25 on the 2nd and today is the 5th so a lot can happen in the 42 days we have left to trade.

Have a great weekend, 

- Phil

 


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  1. It's a whacky world. We don't agree most of the time but I'm grateful to have found Phil and this site as the wisdom expelled has led me to a much greater understanding of the markets and investing. Thanks Phil and everyone!


  2. Some plays I am thinking of today 

    AMGN Vertical Jan 22  210/240 @ 15.30 Sell Jan 22 210 put for 15.10. PM margin 1500 

    WU buy stock @ 22.50 sell Jan 22 20/25 strangle @ 3.42

    Price may change at opening


  3. Good Morning.


  4. Is the latest webinar replay available yet? 

     

    Thanks


  5. Phil/HOL/FVRR

    Seeing some news on twitter about HOL and FVRR. what is your take on these 2?

    regards


  6. AMJ  buy STK for 15.29 sell Sep21 strangle for 14/16 2.48


  7. PS Monthly return on AMJ combined 2.9%


  8. Good morning!  

    Nice little dip on /CL but didn't quite make 0.50 but we'll take 0.25 and re-set if we can at the same lines (when crossing below).  

    SCO March $9 calls at target (0.65) – let's pick up 50 of those in the STP.

    You're welcome Swamp, great to have you on board! 

    WU/Yodi – Good one!  Nice 4% dividend (0.90) but I'd rather go with (for the LTP):

    • Sell 10 WU 2023 $22 puts for $4.50 ($4,500) 
    • Buy 20 WU 2023 $20 calls for $4.50 ($9,000) 
    • Sell 20 WU 2023 $30 calls for $1.25 ($2,500) 

    That's net $2,000 on the $14,000 spread that's $6,000 in the money to start.  The worst-case is owning 1,000 shares at net $24 (assuming our $2,000 is wiped out) and that's only 1/4 of an allocation block – so we have no issue with ownership at about the current price – that's why we can afford to be aggressive with the put sales.  WU is thinly traded so you have to be patient to get your fills.

    AMGN is also a good deal.  If they pull back to $220 I'll be into selling some $200 puts.

    Webinar Replay/CRS – Something went wrong with the recording this week.

    HOL/Pat – M&A is coming back a bit, which should be good for them but I know nothing about their operations.  FVRR is a strange thing to connect to HOL and I guess I'm old-fashioned but I like a company I'm paying $9Bn for to have, at some point, made money or, in the very least, to have more than $200M in sales as it's going to be very hard to get to $450M in profits when that would be 225% of your sales, right?  

    AMJ/Yodi – Good way to play that one.

    Good way to spread your MLP risk.


  9. I love this girl – she's got a few of these, they are funny and accurate.

     


  10. Phil in deed some of the BCS are more profitable and less capital incentive. But I like to have a good deal of armchair plays, just with an income of 2 to 3 % per month, while you sit back and smell the daisies.


  11. 0x (ZRC) the big mover in our Gemini account. 



  12. Today's big finish to the week is brought to you by the declining Dollar:


  13. Phil / SBUX —--  was about 98/99 after earnings now at 107….  the 90/ 110 BCS is settling in nicely …  I went into it and only covered  half covered the rest just today….  we'll see how it goes.  my target was 120 on the stock but went conservative on he 110 callers.

    long 50X Jan '13 $90 Call ( 20.3)

    short 50X Jan '13 $90 Call ( 13.5)

    Short 12 X Jan '13 $90 Put (13.15)



  14. Boeing’s New Big Plane Is Its Big New Problem


  15. Vale will pay nearly $7 billion over Brazilian dam collapse that killed 270 people



  16. it's all looking like a top, stocks, bonds, crypto. Long ag, energy, metals.


  17. batman I think you mean 110 50 short call 90 Jan 23????


  18. Phil/everyone,

    For the unofficial stock data services project, I received a response from Zack's: they will lower the  monthly cost from $30 to $20 (further discount for annual subs) for PSW members if we have 100 interested members. If you would publicize this, I would be glad to count heads. Awaiting responses from other sites.


  19. Phil/TWO

    Thank you for your insight on HOL and FVRR.

    How is TWO at this price?

    regards


  20. SBUX/Batman – Let's say they make $4Bn again next year (this year is shot as it ends in Feb), what are you paying $126Bn for?  Just because most things are ridiculously expensive doesn't mean the expensive things are a bargain.

    Top/BDC – Or the beginning of the end for the value of fiat currency, perhaps?

    Zack's/8800 – 100 is a very tall order but, if you write up something promotional, I'd be happy to send it out.

    TWO/Pat – I was thinking about them yesterday.  I like them generally but they put out a lot of preferred stock recently and I'm concerned it may have an adverse effect on their ability to pay ordinary shareholders.  Also, it's hard to say how bad delinquencies will hit them over the next two quarters so I'd at least wait for Tuesday's report before jumping in.


  21. /CL good for 0.25 over and over.


  22. 8800/Zack,

    Is this separate from the Newsware? I was thinking if we could a deal on that one. Something for the bottom 99% :-)

    regards


  23. pat_swap,

    I spoke with Bill O (Newsware) at length yesterday. He is a unique guy with a 50 yr track record in stocks and commodities with lots of anecdotes about wall street players and their companies. Newsware has a basic price of $50 plus the cost of vendor services (News feeds- $95, Fly-on-the wall $45, MT wires $120, Street Insider $145, etc). No quantity discounts available on the news wires per se. The news wire folks evidently don't have a sense of humor when it comes to the cost of their services. I have contacted Fly, Finviz, TipRanks (incidently run by NY Ellliot Spitzer – of $5K hooker fame) and am awaiting replies.  I thought Zack's (which posts a S&P beating performance record – #1 category rated stks) would be of interest to the majority esp at a discounted price. Any other suggestions appreciated.


  24. Phil,

    How's this:

    PSW Member Special:

       Zack's has offered to lower the cost of its monthly subscription (Zack's Premium) from $29.99 ($249 annual) to 19.99 ($169) if we have 100 members sign up. The annual numbers may vary slightly depending on how many sign up. Your payments will go directly to Zack's.

    Check out their website (Zack's.com) to  see the outperformance of their stock recommendations (Zack's #1 rank outperformed S&P with an average gain of 24.9% (1988-2020); #2 rank 18.6%, etc.) and other research and news services. The folks manning the telephones at Zack's are not aware of this offer.

    Contact PSW's very own 8800, ASAP.


  25. Yodi. / SBUX  thanks you are correct see below. —--  was about 98/99 after earnings now at 107….  the 90/ 110 BCS is settling in nicely …  I went into it and only covered  half covered the rest just today….  we'll see how it goes.  my target was 120 on the stock but went conservative on he 110 callers.

    long 50X Jan '13 $90 Call ( 20.3)

    short 50X Jan '13 $110 Call ( 13.5)

    Short 12 X Jan '13 $90 Put (13.15)


  26. Zacks/8800 – I think you are assuming there's some great desire for Zacks – you haven't even explained what it is and why someone would want it.  Also, how do they contact you?

    That's another record close for the S&P 500 – simply amazing!

    • Have a great weekend, 
    • - Phil

  27. Phil / SBUX – China is almost back to normal…..  per CC, They have easy compares in CHN next quarter… in addition Colleges are a big driver for them and they are getting hit hard….  By this fall i think colleges will be open,  They have huge learnings from the China stores….. their view is when US allows them to open, they know how to bring up ops quickly and safely….additionally as people start venturing out there will be in-store service in the fall.   I see them at 3.2ish  this year and 4.3 to 4.8  next year '23….  the normal PE is sitting at 25 to 30 ish…      …   100 to 125 ish


  28. Phil,

    Thanks for the guidance. I thought folks were familiar with Zack's and could get specifics and become more acquainted via their website (Zack's.com.) Regarding contact, I had asked Andy (Admin) to set up a mechanism but hadn't heard back so offered to keep records of those interested myself -"contact 8800" as per previous post. Open to suggestions.

    Thanks



  29. Oxygen shortages bite in poorer countries battling Covid







  30. Canada Says No Cruises Until 2022, Shutting Down Alaska Trips




  31. Interesting lawsuit:

    No photo description available.


  32. How is this anything but a ponzi scheme?

    https://clva.com/





  33. Haiti Braces for Unrest as President Moïse Refuses to Step Down