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Which Way Wednesday – Trouble at 4,500 for the S&P 500

And just like that we're failing at the Bounce Lines.

4,512 is the weak bounce line on our bullish Bounce Chart (see yesterday's PSW Report for more details) and the S&P Futures (/ES) topped out at 4,514.75 before being rejected at the exact spot our Fabulous 5% Rule™ predicted way back in January.  More to the point, for you TA fans – see that "W" that's formed since mid-February?  If we can't break higher (4,500), then we're beginning to form a consolidation pattern that's likely to break LOWER, not higher.

Keep in mind however that, in the BIG PICTURE, this is, so far, barely a pullback at all.  The S&P 500 was at 2,000 in 2017 and, even if we assume it grew at double the normal rate and gained 15% a year and was positive every year since, that would be 2,300 in 2018, 2,645 in 2019, 3,041 in 2020, 3,498 last year and now 4,022.  THAT would be after 5 years of SPECTACULAR growth.  

At the beginning of 2017, our GDP was $18.9Tn and now it's $24Tn so that's up 27% in 5 years – very impressive but the S&P 500 is up over 100% – 4x more than the economy has grown and, as we know, $11Tn of that $5.1Tn in growth was Stimulus coupled by low rates from the Fed – not exactly giving us a genuine reading, is it?  

The Problem Of Pulling Forward Sales & Revenue | by Real Investment Advice  | HarvestAnd the S&P isn't just disconnected from the Economy, it has become disconnected from its own sales numbers!  As you can see from this chart – since 2007 (before the last collapse), the S&P is up over 200% (this chart only goes to 2021) in PRICE but it's up just 51.5% in Revenues.  This does not make sense.  

We have to ask ourselves, what is more likely to happen first?  Are sales for the S&P going to double or are the prices we pay for stocks going to come down?  At the moment, the bond market is crashing and housing is too expensive and commodities are out of control so the stock market still looks pretty attractive BUT, as bond rates move back to 5% (projected at the end of the year), then those "risk-free" 5% gains begin to look very attractive vs a massively overpriced stock market and certainly, by the end of 2022 – we're not likely to see S&P sales up 100%, are we?

One Giraffe Drinking Water In The Dry Landscape Stock Photo, Picture And  Royalty Free Image. Image 101345287.So: PREPARE FOR A CORRECTION!  I know it never seems to come but math is math and those who deny math end up sailing their ships off the edge of the World.  What we have now on that monthly S&P pattern is a "thirsty giraffe" pattern – and we all know what happens when a giraffe takes a drink, right?  

We talked yesterday about taking advantage of market bounces to press our hedges and the Nasdaq is up over 10% since March 15th (13,000) and the Russell is up 8% (1,920) and SQQQ and TZA are the primary hedges in our Short-Term Portfolio and our STP is at $433,993 and our LTP is at $2,579,568 for a combined $3,013,561 and that is up $200,000 since last week's review of our paired portfolios (which began with $600,000 on Oct 28th, 2020).  That means we have $66,000 to spend on hedges but, since $3M is where I was planning to cash out – let's spend $100,000 to be a bit more cautious. 

As noted in our last review, we have already purged every position from the LTP that we're not ready to ride out a 50% correction with but, at a combined $3M – I'm not sure we should as CASH!!! is by far the best thing to have in a market crash.  But, for now, since it's possible there will be more stimulus (China just dropped some on their markets) and the war might end – we still aren't excited about giving up our longs – which leaves us with the option of improving our coverage with more shorts.  

Our Short-Term Portfolio (STP) as it stands now:  

  • Short Puts – COIN finally found a bottom.
  • DIA – If we buy back some short puts, we can be more aggressive selling short-term short puts on the dip so let's buy back 15 (since they are profitable) Sept $320 puts for $10 ($15,000).  We're at net $36,000 on the $150,000 spread and now uncapped on 1/3 so this is great protection and we already had one successful short put sale where we made $4,400 on the March $335 puts – thanks to last week's rally.  Let's call this $110,000 of protection (I'm not going to do all the math this morning).

  • TQQQ – We just covered the short Jan puts so not much to do now but wait for expiration.
  • SQQQ – The Jan $60 calls are not likely to get hit so money is better spent on the long end.  If we buy 50 more $30 calls it's about $60,000 but the Jan $25 calls are only $14, so it will cost us less than $30,000 to roll $75,000 deeper in the money and that then will position us better to sell short calls down the road – so a good investment.  Now we are in the $525,000 spread (with 1/4 uncovered) for net $74,610 so it's $450,390 of downside protection.  

  • TZA 1 – Since they are up 33%, let's buy back 50 (1/3) of the short Jan $40 calls for $6.65 ($33,250).  We have $400,000 worth of protection at net $79,000 so $321,000 of downside protection.
  • TZA 2 – Let's offer to roll 200 of our 2024 $30 calls at $12 to the 2024 $25 calls at $13.50 (no more than $1.75 for the roll would be a good deal).  That will put us $100,000 deeper in the money for net $35,000 and again, it will make it easier to sell short calls.  Let's also buy back the 50 short April $40 calls for $2,700 as they can only hurt us.  Without the roll, it's a $600,000 spread at net $38,625 (aren't options fun?) that's at the money with $561,375 downside protection.  

Of course these downside numbers assume we'll be able to roll out of trouble on any shorts we have sold but there is no severe risk at the moment.  Overall, we have $1,342,765 and we've added 33% more downside protection just like that – more than the $200,000 we've gained so I feel good about our hedges again and, when we feel confident in our hedges – it makes us confident to go out and look for more longs, right?

BALANCE is the key to a happy portfolio, and happy trading!  

 

 


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  1. Good Morning.


  2. "thirsty giraffe"  I was thinking more of a hungry aardvark…but that's just me. ;)


  3. Good morning 


  4. Good morning!  

    Hungry Aadvark/1020 – Unfortunately, he's now a US Senator.

    Oil back at $113 – API showed a nice draw.

    API, Oil Inventory Moves Crude -4.28 million (expected +25,000) Gasoline -626,000 Distillates -826,000

        

    /NG going wild.

    drunk party GIF by South Park

    This is getting buried but it's a deplorable attack on Ketanji Brown:

    WASHINGTON — After all of the entreaties from top Republicans to show respect at Judge Ketanji Brown Jackson’s confirmation hearings, Senator Ted Cruz on Tuesday afternoon chose to grill the first Black woman nominated for the Supreme Court on her views on critical race theory and insinuate that she was soft on child sexual abuse.

    The message from the Texas Republican seemed clear: A Black woman vying for a lifetime appointment on the highest court in the land would, Mr. Cruz suggested, coddle criminals, go easy on pedophiles and subject white people to the view that they were, by nature, oppressors.

    The attack, the most dramatic of several launched from inside and outside the Senate Judiciary Committee’s hearing room, contained barely coded appeals to racism and clear nods to the fringes of the conservative world. Two other Republican senators, Josh Hawley of Missouri and Marsha Blackburn of Tennessee, had already signaled they would go after Judge Jackson by accusing her of having a soft spot for criminals, especially pedophiles, and an allegiance to “woke” racialized education.

    Senator Tom Cotton, Republican of Arkansas, also pressed the issue on Tuesday night. None of those issues were connected to cases coming before the Supreme Court — or to cases ever decided by the court. They were amplified outside the chamber by institutional Republicans and the conservative media. Fox News ran a headline reading “Ketanji Brown Jackson serves on board of school that promotes critical race theory,” and the Republican National Committee shared a GIF on Twitter showing the judge’s picture with her initials, “KBJ,” crossed out and replaced by “CRT.”

    “I do think it’s a legitimate question to ask — would they be asking these questions if this were not a Black woman?” bristled Senator Raphael Warnock, Democrat of Georgia, who is also Black. The list of skeptical questions about Judge Jackson’s record read like a compendium of political touchstones animating Republican politicians and voters: critical race theory, parental rights, mask mandates and transgender women in sports.

    Democrats Are Making Life Too Easy for Republicans

    Meanwhile, "only" 30,000 new cases and "only" 1,000 deaths is now our daily average for Covid and I was watching CNBC early this morning and their "analyst," Scott Gottlieb, who was Trump's FDA Commissioner was literally saying that the pandemic is "essentially over" and people should not be concerned about so few cases and deaths.  WTF???

    And it completely blows my mind that the reason we aren't getting a 4th Covid booster is because there's no money allocated for it.  

    What is the value of a human life these days?  There should be a ticker for that…


  5. WTF/Phil  Don't worry, it's just those folks that never bothered to take the 'shot'…..That's mind blowing.


  6. Booster – More than likely a small cap,,,,DEATH…. :)


  7. life trade    just sell the naked 80 (year old ) calls 



  8. Russian Stock Market Prepares for Unusual Reopening



  9. Anti-Vaxx/1020 – True, Darwinism at work to some extent but it's the schools that really concern me and this long covid thing that's costing the population valuable IQ points we can't afford to lose. 

    LIFE/Stock – Not the years but the value.  Based on court settlements, about $800,000 is the going rate if you feel like taking a life and have to compensate the family.  It would be really cool to refine the data and have a ticker that goes up and down daily based on policy decisions, public health data, lifetime earnings expectations, etc.  

    There have been some efforts made but I think these high numbers are BS and jury awards for wrongful deaths indicate how the private sector is able to value human life vs what the Government pretends to value it at:

    United States[edit]

    The following estimates have been applied to the value of life. The estimates are either for one year of additional life or for the statistical value of a single life.

    • $50,000 per year of quality life (the "dialysis standard",[32] which had been a de facto international standard most private and government-run health insurance plans worldwide use to determine whether to cover a new medical procedure)[33]
    • $129,000 per year of quality life (an update to the "dialysis standard")[34][33]
    • $7.5 million (Federal Emergency Management Agency, Jul. 2020)[3]
    • $9.1 million (Environmental Protection Agency, 2010)[35]
    • $9.2 million (Department of Transportation, 2014)[36]
    • $9.6 million (Department of Transportation, Aug. 2016)[37]

    Note above that Dialysis is $50,000 a year (my Dad's was $7,000 a month but that was for the hospital too, I suppose) and that's the benchmark as to whether or not something is going to be covered – so that's the value of you to your health care provider.  If our Government actually valued our lives at $9M then we would be "spending" $9Bn per day on Covid deaths or $3Tn per year and you would think the Government would be more concerned than it is – especially since we were losing over 3,000 per day at the high points.  

    We've had just about 1M total people dying since Covid began (0.3% of the population) so call that $10Tn but it's not the deaths we're paying for but the prevention so $11Tn may be about right – too bad so little of it was actually spent on Covid.

    China, by the way, has had 1M infections and 6,000 deaths in the past month and they have declared a State of Emergency.  Total infections in China were 1.225M  with 11,207 deaths – so massive uptick in the past month should be a concern to them.  

    South Korea also has had 8M out of 10.5M total infections in the past month and 5,825 out of 13,432 total deaths.

    Pakistan is interesting with 220M people and only 1.5M total cases and 30,000 total deaths.  I wonder what they have been doing right?

    Nigeria has 200M people and NO ONE has died in the past month with only 838 infected.  

    I hope someone is studying this stuff to try to figure out what actually works and what doesn't….



  10. Oil $115!

    CL1:COM +5.14%Mar. 23, 2022 10:31 AM ET21 Comments

        
    DVY -0.24%Mar. 23, 2022 10:33 AM ET3 Comments

    Many investors are looking for safety, security and income during a time when volatility seems to dominate Wall Street. Dividend funds often offer additional stability in just such uncertain periods.

    The topic comes into focus as the major stock averages see dramatic swings. The S&P 500 and the SPDR S&P 500 Trust ETF (NYSEARCA:SPY), the world's largest benchmark exchange traded fund, have seen large gains over the past week. Still, they remain in the red on the year, -6.2%.

    With that in mind, here are ten dividend ETFs that have each outperformed the S&P 500 in 2022 and are all trading in positive territory on the year.

    10 Dividend Funds:

    • Pacer Global Cash Cows Dividend ETF (GCOW)
    • Invesco International Dividend Achievers ETF (PID)
    • WisdomTree US High Dividend Fund (DHS)
    • iShares Core High Dividend ETF (NYSEARCA:HDV)
    • iShares Asia/Pacific Dividend ETF (DVYA)
    • AGFiQ Hedged Dividend Income Fund (DIVA)
    • First Trust Morningstar Dividend Leaders Index Fund (FDL)
    • SPDR Portfolio S&P 500 High Dividend ETF (NYSEARCA:SPYD)
    • iShares Select Dividend ETF (NASDAQ:DVY)
    • Global X S&P 500 Quality Dividend ETF (QDIV)

    GCOW, the high free cash flow fund with 101 holdings, has performed the best in 2022 compared to the others on this list, returning investors +6.9%. Moreover, GCOW comes with a quarterly dividend yield of 4.38%, ranking as the third-highest of the ten making.

    From a pure dividend yield perspective, SPYD offers the market the highest yield at 4.88%, while DIVA is the lowest at 1.31%.

    HDV, on the other hand, offers exposure to 75 high-quality dividend-paying domestic stocks, and it's also the cheapest of all funds with a 0.08% expense ratio. HDV's cost is even cheaper than SPY, the market's most popular ETF, and HDV is also +5.6% on the year and comes forward with a 3.41% dividend yield.

    See the table below of all ten ETFs, their 2022 performance, dividend yields, and expense ratios. Additionally, with volatility tracking higher in 2022, see how other prominent dividend exchange traded funds performed on the year.

    COWN -1.89%Mar. 23, 2022 10:26 AM ET

    • Investment bank Cowen (NASDAQ:COWN) on Wednesday has launched Cowen Digital, its Connecticut-based cryptocurrency division offering trading and custody solutions for institutional investors.
    • Custody solutions are provided through Cowen’s partnership with PolySign’s Standard Custody & Trust.
    • With the new digital asset unit, institutional investors can utilize Cowen's (COWN) proprietary algorithms through high-touch or low-touch trading, for example. Future functionality for Cowen Digital will include derivatives and futures, financing solutions as well as institutional DeFi and NFT access, the company said.
    • “Through Cowen Digital, our clients now have access to the crypto and digital asset markets with our institutional quality and fully integrated end-to-end execution and custody capabilities,” said Jeffrey M. Solomon, Cowen chair and CEO.
    • Looking at intraday crypto price action, bitcoin (BTC-USD -1.4%) is slipping to $42.2K and ethereum (ETH-USD -0.9%) is struggling to cling onto $3K.
    • See why Cowen may benefit from robust M&A activity this year.

    COWN has been a huge disappointment in our Future is Now Portfolio.

    COWN Short Put 2022 17-JUN 35.00 PUT [COWN @ $26.75 $-0.56] -5 6/9/2021 (86) $-2,800 $5.60 $2.95 $-14.10     $8.55 - $-1,475 -52.7% $-4,275
    COWN Long Call 2022 17-JUN 35.00 CALL [COWN @ $26.75 $-0.56] 20 6/10/2021 (86) $13,760 $6.88 $-6.61     $0.28 $-0.08 $-13,210 -96.0% $550

    We bought back 10 short Jan $40s with a $4,250 profit so we're in the trade for net $6,710 and now the options go out to October so we'll probably roll the short June $35 puts at $4,275 to 10 of the Oct $30 puts at $4.75 ($4,750) for a small credit but, even if they expire worthless, it's still down $6,700ish.  I don't have enough faith in them to try to fix it anymore and now I'll be really pissed if they do take off – unless it's soon enough to save the June calls (doubtful).  


  11. Sorry, in the Future is Now Portfolio, let's do sell those 10 October $30 puts for $4.75 ($4,750) as a pre-roll as it would really suck if they popped and we couldn't get that price again.  


  12. GIS +2.51%Mar. 23, 2022 10:14 AM ET3 Comments

    Strong results out of General Mills (NYSE:GIS +4.9%) has investors taking a look at other packaged food stocks on a down market day.

    J.M. Smucker (SJM+1.22%, Campbell Soup (CPB+1.11%, Kellogg (NYSE:K+1.09%, Hormel Foods (NYSE:HRL+1.01% and Hershey (NYSE:HSY+0.88% all outperformed in Wednesday morning trading with the Dow Jones 30 and S&P 500 Index both in negative territory.

    The biggest pullout from the General Mills (GIS) report was that the company was able to raise guidance on confidence that higher prices will offset some of the inflation pressures with input costs. There has been some concern that consumers would push back on prices and demand would tail off. Operationally, GIS also gave a good readout on the supply chain. "Even though General Mills gave an update at CAGNY near the end of its quarter (recorded about a week earlier), its customer service levels on pizza, snacks, and dough improved materially into the end of the quarter, helping lift results," observed Jefferies analyst Michael Lavery on the quarter.

    See a more detailed breakdown on General Mills' (GISearnings report and guidance update.

    SBRCY -42.22%Mar. 23, 2022 10:12 AM ET17 Comments

    • The Russian stock market will restart limited trading on Thursday after being halted for almost a month in the wake of the invasion into Ukraine, Russia's central bank said in a statement.
    • The Moscow Exchange will allow trading of 33 equities included in the Moscow Exchange Index from 9:50 to 14:00 Moscow time. There will be a ban on short sales of those securities, the Bank of Russia said.
    • Included in that group of stocks are Gazprom (OTCPK:OGZPY) (OTCPK:GZPFY), Rosneft (OTCPK:RNFTF), Sberbank of Russia (OTCPK:SBRCY) (OTCPK:AKSJF), and VTB Bank, which doesn't have a U.S. listing.
    • The operating hours for coming days will be posted later on the central bank's website.
    • Previously (March 1), Russia retaliates against Western sanctions; Moscow Stock Exchange still closed

    UBS -1.02%Mar. 23, 2022 10:08 AM ET

    • UBS (UBS -0.9%) launched its Virtual Worker Framework, a new industry-leading approach to flexible working that will provide U.S. employees in eligible roles with the opportunity to work 100% remotely.
    • In the upcoming months, it will start a phased implementation of the framework for select and prospective employees across the country.
    • It will begin with eligible Global Wealth Management roles in the U.S. and will be aligned with all regulatory guidelines.
    • In a global survey, 86% of UBS employees stated that they value greater flexibility, including the ability to maintain a remote or hybrid work arrangement.
    • In September, UBS adopted a flexible approach stating that staff who don't wish to receive a vaccine against the coronavirus can apply to work from home.

    Mar. 23, 2022 10:03 AM ET

    • February New Home Sales-2.0% M/M to 772K vs. 810K expected and 788K prior (revised from 801K).
    • New home sales fell 6.2% Y/Y in February.
    • The median sales price of new houses sold in February was $400.6K, down from $423.3K in January; average sales price of $511K rose from $496.9K in the previous month.
    • The seasonally adjusted estimate of new houses for sale at the end of February was 407K, representing a supply of 6.3 months at the current sales rate.
    • "While residential market demand remains strong and is likely to continue going forward, it will be important to monitor how international conflict in Ukraine, and its ripple effects on the economy and commodities pricing will impact the US housing market," commented Kelly Mangold of RCLCO Real Estate Consulting.
    • Earlier, mortgage applications fell amid rising mortgage rates.

    NFLX -0.66%Mar. 23, 2022 9:58 AM ET6 Comments

    Netflix's (NFLX -1.4%) new test of monetizing password sharing promises some incremental revenues with a wider rollout, Cowen says.

    The streamer recently said that it would test a feature in three countries (Chile, Costa Rica and Peru) encouraging subscribers to pay a few dollars extra a month to allow a profile or two outside of the household – less than the price of a full subscription, but a way to draw some money from password sharing that goes on now.

    "We think Netflix's recent efforts reflect a natural progression across more mature markets, and could add incremental subs and revenue if the test is rolled out globally," says Cowen's John Blackledge.

    If the test works and Netflix rolls the program out globally, he estimates it could add some $1.6 billion in global revenue, or 4% upside to the firm's 2023 revenue estimates.

    That's based on an assumption that in a wider rollout, half of non-paying Netflix households would become paying members, and that those new payers would be split between those paying up to $3 as an "extra" sub and those paying average revenue per user for each region.

    Cowen's monthly survey suggests there's a market for the new feature: Some 42% of U.S. users share a Netflix password, it says, and 10% of respondents said they had access to the service but aren't current subscribers, up from 7% in the first quarter of 2017.

    Blackledge has an Outperform rating on Netflix and a $600 price target, implying 59% upside.

    Wall Street overall has a Buy rating on Netflix, while Seeking Alpha authors have a Hold stance. Netflix's Quant Rating is also a Hold.

    For its part, Benchmark is skeptical that the new plan can be a growth "game-changer."

    My kids would pay for NFLX out of their own pockets rather than lose it – though I'm sure they would also do whatever it takes not to pay.  $380 is $170Bn and they only make $5Bn so 34x makes it very hard to see them as an investment (we shorted them at $600 last year), despite the pullback.  On the other hand, $8Bn is 20x and I imagine they aren't too many years away from it so my only issue with selling the 2024 $350 puts for $56 (another 20% off if assigned) is that the $440 puts are $106 so, if NFLX drops $100 – it's going to be ugly in our portfolio with a 100% loss and no exit but to ride it out.  Still, too much money to turn down so, in the LTP, let's sell 5 NFLX 2024 $350 puts for $56 and collect our $28,000.


  13. Here is the link to today's webinar. 

    https://attendee.gotowebinar.com/register/5139000122377113100


  14. DVN +1.52%Mar. 23, 2022 9:57 AM ET7 Comments

    • Brent oil prices (USO) rallied 4%+ Wednesday in early US trading, to retake $120/b on the back of Russian pipeline news, spiking refining margins, and additional fuel price subsidies.
    • Tuesday, TASS news reported that "storm damage" may reduce oil export volumes through the CPC terminal; a terminal that loads ~1mb/d of Kazakhstani crude produced largely by US majors Chevron (CVX) and Exxon (XOM).
    • Refining margins in the US and Europe reached decade highs this week, increasing refinery demand for crude oil:
    • The UK announced that gasoline taxes will be reduced by ~26c per gallon, and government support for those impacted by higher energy costs will be doubled; the policies mirror energy subsidies already proposed or implemented in California, France, South Korea, Japan, Brazil, and Malaysia.
    • The share price response from US oils is relatively muted in early trading, with the index (XLE) up less than 2%; however, large-cap oil stocks like Occidental (OXY), Marathon (MRO) and Devon (DVNare up almost 20% over the past week.

    PENN -1.71%Mar. 23, 2022 9:53 AM ET1 Comment

    CBRE Equity Research dove into the value side of investing in U.S. sports betting stocks in a new note posted on Wednesday.

    Analyst John DeCree said the value of U.S. sports betting businesses is now dislocated due to the risk-off sentiment in the market.

    "While we appreciate the uncertainty of both inflation and rising rates, we believe valuation of most US sports betting businesses overcorrected," he noted.

    DraftKings (NASDAQ:DKNG -1.8%) is said to remain the valuation benchmark as the only large cap pure-play, trading at what is seen as a reasonable valuation of 3.2X FY23 revenue. Meanwhile, DeCree thinks the implied valuation of sports betting businesses of competitors like Caesars Entertainment (NASDAQ:CZR -2.7%), MGM Resorts (NYSE:MGM -1.0%), Penn National Gaming (NASDAQ:PENN -2.0%), Flutter Entertainment (OTCPK:PDYPY -2.5%) and Entain (OTCPK:GMVHF) are low and should be decoupled from other high-growth sector sell-offs for two important reasons.

    "First, gaming companies are very profitable with substantial FCF, which should make the equities less susceptible to rising interest rates relative to unprofitable growth companies. Second, the US OSB/iGaming is an entirely new industry with years of growth ahead, unlike other tech sectors that benefited primarily from state-at-home orders during the pandemic and are now normalizing.

    Looking down the road, a FanDuel listing is seen as a potential valuation catalyst for the entire industry if things normalize during the second half of the year and Flutter (OTCPK:PDYPY) sets it free.

    Sector watch: Sports betting sector looks for March Madness magic with historic revenue tally.

    TLRY +4.40%Mar. 23, 2022 9:51 AM ET12 Comments

    The U.S. Multi-State Operators and Canadian Licensed Producers are outperforming in the morning hours Wednesday as the cannabis industry shows signs of consolidation with two newly announced deals.

    On Tuesday after the close, Edmonton, Canada-based Aurora Cannabis (NASDAQ:ACB) announced an agreement to acquire TerraFarma for $38 million in cash and stock.

    Its U.S. counterpart, Cresco Labs (OTCQX:CRLBF), followed up on Wednesday with plans to acquire the rival MSO, Columbia Care (OTCQX:CCHWF) for nearly $2 billion, including debt.

    In addition to Aurora Cannabis (ACB), notable gainers include Tilray (NASDAQ:TLRY), MedMen Enterprises (OTCQB:MMNFF), HEXO (NASDAQ:HEXO), Canopy Growth (NASDAQ:CGC) and Sundial Growers (SNDL).

    Early this month, Tilray (TLRY) agreed to acquire more than $211 million worth of convertible notes issued by, Hexo (HEXO), allowing its local rival to avoid a major default of debt.

    The uptick in cannabis stocks comes at a time the sector has underperformed the broader market in the year so far, as shown in this graph.

    LN1:COM -10.92%Mar. 23, 2022 9:29 AM ET

    Nickel prices jumped 15% to their upper limit, rising for the first time since trading reopened a week ago after the historic short squeeze, and other industrial metals also rose on concerns over shortages from the Russia-Ukraine war and higher energy prices.

    London Metal Exchange benchmark nickel (LN1:COM) spiked by nearly $3K in just 20 minutes and was holding the 15% gain by 1200 GMT at $32,380/metric ton, according to Reuters.

    Overall volumes in London were lower than usual as many investors stayed on the sidelines, but nickel volumes of 3K lots were largely in line with other major metals, suggesting the market was starting to return to normal after two weeks of chaos, Reuters reports.

    Among other industrial metals, zinc (LMZSDS03:COM+2.8% to a two-week high of $3,997.50/ton on worries about further suspensions of smelters in Europe due to high power prices; LME prices for aluminum (LMAHDS03:COM), copper (HG1:COM), lead (LL1:COM) and tin (LMSNDS03:COM) also rose.

    Aluminum prices jumped early this week after Australia said it would ban exports of alumina and aluminum ores to Russia.

    PEP -0.59%Mar. 23, 2022 9:20 AM ET8 Comments

    • Beyond Meat (NASDAQ:BYND) and PepsiCo (NASDAQ:PEPannounced the debut of Beyond Meat Jerky as the first product coming out of the Planet Partnership joint venture between the two companies.
    • Beyond Meat Jerky is described as an on-the-go snack experience that offers traditional beef jerky in original, hot & spicy or teriyaki flavors. Beyond Meat Jerky contains 10g of protein per serving, no cholesterol and is made with simple, plant-based ingredients like peas and mung beans.
    • The Planet Partnership JV is said to combine Beyond Meat's (BYND) leading technology in plant-based protein development and PepsiCo's (PEP) world-class commercial capabilities. The launch of Beyond Meat Jerky signals the first of many plant-based protein innovations from the JV.
    • Shares of Beyond Meat (BYND) jumped 3.39% premarket, while PepsiCo (PEP) traded flat.

    We do like BYND back at $50.  That's where we came in last time as I did the math and the potential is there but it's been very slow to get there – still not profitable (-$180M last year) but 33% sales growth does inspire faith.  $52.50 is $3.25Bn and that makes $150M the magic number for earnings so let's assume 10% drops to the bottom line and that means they need $1.5Bn in sales and $600M in 2022 then $800M next year, $1.2Bn in 2024 and 2025 we hit out goal.  That's still just a drop in the bucket for the meat industry so I guess this goes back in the Future is Now Portfolio as a full play:

    • Sell 10 BYND 2024 $30 puts for $7 ($7,000) 
    • Buy 25 BYND 2024 $45 calls for $20 ($50,000) 
    • Sell 25 BYND 2024 $60 calls for $15 ($37,500) 

    That's net $5,500 on the $37,500 spread so we have $32,000 (581%) of upside potential at $60 – I don't think that's asking too much.   Hopefully we can sell some short calls along the way – just 5 (1/5th) of the June $70s at $2.70 are $1,350 using 89 out of 667 days we have to sell but I think we're far too low in the channel to sell short calls just yet.  


  15. Here's some good court date – you can see the $1M I have in my head is from big stuff like cigarettes, where lots of money is spent by both sides arguing and they come up with $800,000.

    Macintosh HD:Users:jon:Desktop:Screen Shot 2014-03-19 at 3.50.22 PM.png

    But those are 1998 Dollars so hopefully our lives are keeping up with inflation.

    XOM +2.36%Mar. 23, 2022 9:20 AM ET121 Comments

    • Russian President Vladimir Putin said Wednesday that the country will begin demanding payment for natural gas in rubles.
    • The measure is likely a mild inconvenience for gas purchasers, and will only impact "unfriendly" export markets; though the policy could help stabilize Russia's currency.
    • Perhaps more importantly, the news comes less than a day after Russia's TASS news reported that "storm damage" may take the CPC shipping terminal offline for 1.5-2.0m.
    • The terminal loads ~1.0mb/d of oil (USO) produced in Kazakhstan by international majors like Chevron (CVX) and Exxon (XOM).
    • The timing of the Wednesday's statement may be coincidence, and "storm damage" may in fact be the cause of the terminal outage; however, this may mark the beginning of Russian attempts to leverage the country's position in energy markets to offset economic pain from sanctions.

    That's smart, forces a demand for Rubles.  

    Mar. 23, 2022 8:56 AM ET2 Comments

    The emergence of digital currencies and stablecoins "will require changes in existing laws and regulations," said Federal Reserve Chair Jerome Powell during the Bank for International Settlements Innovation Summit.

    Not only that, the new technologies may require "new rules, laws, and frameworks" to deal with digital currencies, he said.

    "There's no question that we're in a period of rapid technological change, especially in payments," he said. With the fast pace of innovation in financial target, "we don't know how they'll (digital products) will behave in time of market distress," he said. Regulators will also need to address the potential for crypto to be used in illicit transactions, he added.

    Updated at 8:21 AM ETWhile the Fed hasn't yet decided on whether it will develop a central bank digital currency (CBDC), Powell said that any U.S. CBDC would have to meet four requirements:

    • Ensure a user's privacy;
    • Be identity verifiable to prevent money laundering and illicit activity;
    • Be intermediated, which would lessen financial stability risks; and
    • Serve as a widely accessible means of payment; it would have to be immediately transferable.

    Updated at 8:51 AM ET: Powell sums up central banks' role in digital asset and technological innovation by saying they will need to evolve with the rest of the financial system. In this vein, the Fed has been hiring more people with this kind of expertise as it continue to conduct research in such things as decentralized finance, stablecoins, and digital assets. Also, it's collaborating with six other central banks through the BIS.

    From Tuesday's BIS sessions: New York Fed's Williams sees role for stablecoins, flaws for broader crypto

    CIBR +1.30%Mar. 23, 2022 8:50 AM ET1 Comment

    Cybersecurity exchange traded funds have come front and center as markets evaluate the heightened geopolitical tensions since Russia's invasion of Ukraine. On Wednesday, four ETFs stepped into the spotlight amid news from the FBI, as they warn organizations against Russian hackers.

    Four funds in focus: The First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR), ETFMG Prime Cyber Security ETF (NYSEARCA:HACK), Global X Cybersecurity ETF (NASDAQ:BUG), and the iShares Cybersecurity & Tech ETF (NYSEARCA:IHAK).

    Cyber funds fell early in 2022, part of the general market sell off that marked the first couple months of the year. However, since Russia invaded Ukraine, they have each seen a strong upside push as investors remain wary of Vladimir Putin’s motives.

    Since the start of the war on Feb. 24, CIBR is +19.4%, HACK +15.7%, BUG +16.5%, and IHAK +14.5%.

    Of the four funds, CIBR is the largest and most liquid, with $6B assets under management. Meanwhile, IHAK is the smallest with $615M under its belt.

    CIBR is also the most expensive, with a 0.60% expense ratio. In this category, CIBR is tied with HACK, which has the same 0.60% cost structure. IHAK is the cheapest at 0.47%. BUG falls in the middle with a 0.50% expense ratio.

    On the year, between all four funds, investors have poured in over $578M, with the bulk of the flows going to CIBR and HACK as they have taken in $450.78M and $101.93M, respectively in 2022.

    MRNA -1.69%Mar. 23, 2022 8:17 AM ET34 Comments

    Announcing positive interim results from a trial involving children aged 6 months to 6 years, Moderna (NASDAQ:MRNA) said on Wednesday that the company would seek regulatory authorization in the coming weeks for its COVID-19 vaccine at 25 μg as a two-dose regimen for the age group.

    According to the data from the Phase 2/3 KidCOVE study, the mRNA-based vaccine showed a robust neutralizing antibody response and favorable safety profile in children 6 months to under 2 years and 2 years to under 6 years of age, the company said.

    In both age groups, two doses of 25 µg led to a similar level of immune response to the 100 µg two-dose primary series in adults ages 18 to 25 years.

    During the Omicron wave, there was a statistically significant, but lower efficacy against COVID-19 infection in line with adult data. Studies are underway for a booster dose of the vaccine mRNA-1273 and its bivalent booster candidate mRNA-1273.214 to introduce a booster shot for all pediatric populations, Moderna (MRNA) said.

    "Given the need for a vaccine against COVID-19 in infants and young children we are working with the U.S. FDA and regulators globally to submit these data as soon as possible,” Chief Executive Stéphane Bancel said.

    In the U.S., the company has also started filing for emergency use authorization of the vaccine in children aged 6 to 11 years. It is also updating the EUA submission for adolescents aged 12 to 17 years with additional data.

    Moderna (MRNA) COVID-19 vaccine, branded as Spikevax, is approved in the U.S. at 100 μg dose for those aged 18 years and older.

    Read: Last month, the U.S. Food and Drug Administration (FDA) delayed a review of the COVID-19 vaccine developed by rival Pfizer (PFE) and BioNTech (BNTX) for children under the age of 5after the companies decided to extend the rolling submission citing the need for more data.


  16. AAPL +1.99%Mar. 23, 2022 7:16 AM ET11 Comments

    Apple (NASDAQ:AAPL) is seeing "stellar" demand for its iPhone 13 around the world and though the company has been hampered a bit by global supply chain issues, it looks as if there are "discernible" improvements, according to investment firm Wedbush Securities.

    Analyst Dan Ives, who rates Apple (AAPL) outperform and a $200 price target, noted that these improvements bode well not only for the upcoming June quarter, but the next iPhone release as well. The recently announced iPhone SE with 5G capability is likely to sell roughly 30 million units, adding to a "monster product cycle" for the company, the strongest since 2015, Ives added.

    "Taking a step back, while the risk off dynamic in the market has been front and center for tech investors with Apple's stock also under pressure thus far in 2022 along with other tech stalwarts, we believe the company is setting up for a monster growth cycle over the next 12 to 18 that is not baked into shares at current levels," Ives wrote in a note to clients.

    Apple (AAPL) shares fell 0.5% to $167.98 in premarket trading on Tuesday.

    In addition, Ives noted that Apple (AAPL) is likely gaining market share in China, to the tune of roughly 300 basis points over the past 12 months, due to the iPhone 12 and iPhone 13. Apple (AAPL) is also benefiting as consumers buy more expensive iPhones outside of China, many of whom are buying the Pro and Pro Max, "which is a nice positive for the March quarter."

    Last week, Ives said Apple (AAPL) is still the top tech stock after the Federal Reserve gave a "bright green light" to own oversold tech stocks.

    YOU +22.92%Mar. 23, 2022 6:24 AM ET

    • Clear Secure press release (NYSE:YOU): Q4 Non-GAAP EPS of -$0.09 beats by $0.09.
    • Revenue of $80.7M (+51.8% Y/Y) beats by $2.58M.
    • Total bookings up 99% to $109.6M.
    • The company sees Q1 revenue in the range of of $88M – $89M vs. consensus of $82.89M.

    I like these guys, they are the fast lanes at airports and now stadiums.  

    Mar. 23, 2022 6:11 AM ET15 Comments

    An interesting dynamic has been playing out in the market over the past week. Treasury yields have skyrocketed as the Fed signaled it would raise rates more aggressively than previously projected, which would typically be a drag on stocks. Tightening cycles have also traditionally spooked equity investors (at least in the short-term) with the risk of looming recession on tap, but the opposite seems to be happening. What's going on?

    Preemptive strike: "Maybe investors are feeling that with the Fed taking more of a proactive approach early on it won't have to slam on the brakes later," said Sam Stovall, chief investment strategist at CFRA.

    The whole picture: "The message that came out of the [Fed] meeting last week is that they are going to be tightening [monetary policy] but the U.S. economy is resilient enough to withstand that," explained Huw Roberts, head of analytics at Quant Insight. "The equity market chose to emphasize the economic resilience portion."

    Inflation slayer (Part 2): "Faster hikes are clearly going to help inflation come down and may reduce the need for a longer tightening campaign," noted Seema Shah, chief strategist at Principal Global Investors. "We are positive for equities for this year."

    Buy the dip: "You're beginning to see a little bit of the revenge of growth stocks," said Wayne Wilbanks, chief investment officer of Wilbanks Smith & Thomas Asset Management. "Prices have collapsed, so valuations have gotten much better, to the point where that outweighs interest-rate concerns."

    Some caution: "If I'm investing over the next 12-month horizon, I would reduce equities at this point. I would take some money off the table," pointed out Mohamed El-Erian, chief economic advisor at Allianz. "I don’t think the market has factored in yet what's going to happen to the economy."

    Alarm bells: "One thing I did learn many years ago you don't fight the Fed," declared billionaire activist investor Carl Icahn. "I have kept everything hedged for the last few years. I think there very well could be a recession or even worse, and the market can be in for a rough landing.

    XOM +1.55%Mar. 23, 2022 5:17 AM ET58 Comments

    With gas prices soaring nationwide, Maryland and Georgia have become the first states in the union to temporarily suspend their gas taxes. The measure in Maryland will be in effect for 30 days, saving drivers 36.1 cents per gallon on gas, or 36.85 cents per gallon on diesel fuel. Georgia's suspension will last through May 31, suspending levies of 29.1 cents per gallon on gas, and 32.6 cents per gallon of diesel.

    Bigger picture: A dozen other states are considering similar measures, with Connecticut set to vote on a gas tax holiday later today. There are also several proposals on Capitol Hill to suspend the federal gas tax, which is 18.4 cents per gallon, though such a move would be unprecedented. There has never been a federal gas tax holiday in the history of the U.S., while past breaks on state gas taxes have mostly been limited to a few days.

    Over in Maryland, the gas tax holiday will save the average consumer around $15 over the course of the month, but it will end up costing the state over $100M in revenue. While the measure is overwhelmingly popular, some warn it could eventually add to the tab of the taxpayer down the road, hurting budgets and infrastructure spending. "Producers are going to be the ones to really get the benefit of that tax decrease," added Kent Smetters, a former economist at the Congressional Budget Office. "They're the ones with the power here."

    Other ideas: The White House has reportedly dropped a proposal to send out pre-paid gas cards, given strong opposition in Congress over the plan's viability and effectiveness. Delivering the cards could also distract the IRS in the middle of the tax filing season. Regular gasoline now averages $4.23 per gallon, according to AAA, down about 7 cents from a week earlier, but up from $2.87 one year ago.



  17. WA State's Hit5 lotto is $1.3M jackpot and the game only has 850,668 combinations (at $1 each). Expected value, calculating liberally for multiple winners, is easily 1.50+


  18. Phil / DIS – I'm looking at a new entry on this one…  

    '24  140 ( 22)  / 160 (9)  BCS   with a short '23 $130 caller at 15.7.    My plan is to cover 3/4 of the BCS and the rest on a pop….  

    What do you think of this?


  19. Phil / DIS – CORRECTION  I'm looking at a new entry on this one…  

    '24  140 ( 22)  / 180 (9)  BCS   with a short '23 $130 caller at 15.7.    My plan is to cover 3/4 of the BCS and the rest on a pop….  

    Would like your thoughts on this

    thanks


  20. Lotto/BDC – I would love to do that experiment one day. 

    DIS/Batman – As I noted in the Webinar, I'm not that comfortable with a long at this point.  We have them in the Butterfly Portfolio to take advantage of suckers who want to bet them long – but I don't advise becoming one.  Covid is still a risk (Shanghai is shut now) and they have ESPN which suffers of sports have low attendance.   That lockout would have been a disaster for them if it continued.  DIS also has substantial hotel and cruise ship operations and they need people in theaters to watch their moves and at the malls to buy their merchandise.  So many ways it can go wrong at 25x earnings.


  21. Phil / DIS – thanks ( I had to step out of the webinar.)…   I'll review the 'tape'   I sold some $130 putters at 15.5 so I'll just hold those for now…..  You make good points, in addition Igor just resigned and the new CEO has been stumbling on several issues….   


  22. No problem.  

    The gist of the webinar is there are too many negatives floating around and we have to avoid being complacent.  Best to still be very defensive and I'm still very close to cashing out.


  23. It's very hard to decide which of your children to sell…


  24. Wall Street Is Scrambling For the Exits in Moscow — and Billions Are at Stake





  25. Russia destroys Chernobyl radiation monitoring lab, says Ukraine