Archive for the ‘Uncategorized’ Category

GDPhursday – Data Points to Sharp Decline

Image0.2%! 

That's all we're getting per the most recent GDPNow Forecast from the Atlanta Fed.  Are they setting the bar so low it can only be beat or has our economy really fallen off a cliff just 4,5 and 6 months after $2.2Tn in stimulus was pumped into the economy beginning at the end of March?  What does it say about our economy if 10% of our GDP going out in stimulus only gave us a 2-month boost?  

And, keep in mind that the Government spent tens of Billions of Dollars getting everyone vaccinated in Q2 – that was additional spending as well.  Q2's GDP rate was 6.7% growth but, again, that did include $2.2Tn of stimulus in a $5Tn quarter – 44% of the total netted us 6.7% growth = sad….

We're not even quite at $20Tn, using the inflation-adjusted GDP model, which has us at $19.37Tn – just a tiny bit over the $19.2Tn we were clocking in Q4 2020.  That has not, of course, stopped the S&P 500 from going from 3,300 to 4,560 in that time – up 38% in price for 0.87% more economy – inflated just like everything else these days because the solution to all our problems has been to give more and more money to the already rich, who have prospered like never before in the past two years.  

Hotel Occupancy was at 65% of 2019 levels last week, restaurants were at 95% thanks to a surge in home delivery services.  Consumer Savings are up but that's because the Government handed out money and people are too afraid to spend it.

chart of consumer sentimentIn reality, Consumer Sentiment is back down to where it was during the pandemic as real-world economic conditions are not that good for the bottom 99.9%, who need a REAL economy to be able to make their money.  Only the ultra-rich, who are disconnected from having to actually provide goods or services people want, are thriving in this false economy but those people control the media and, therefore, the narrative that tells us, over and over, how wonderfully things are going..  

8:30 Update:  2% was the GDP number so better…
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Which Way Wednesday – Over the Top Ahead of GDP

4,575.

Do we deserve to be here?  Judging from earnings so far, I'd say no but the rally has kept going with a massive 275-point (5%) surge in the S&P 500 so far in October.  The real move we care about was the one from 4,390 to 4,550 – just 140-points but that causes us to expect a 28-point (weak) retrace to 4,522 or a 56-point (strong) retrace to 4,496 in the very near future – probably tomorrow.

Tomorrow is our first look at the Q3 GDP and expectations by Leading Economorons are still averaging 3.2%, which would be down 50% from Q2s GDP of 6.7% but the Atlanta Fed, based on silly things like Data – are telling us GDP is more likely to be 0.5% – that's quite the discrepency.   Will the market care either way?  A GDP Report so close to retraction could spur Congress to print more money and/or keep the Fed printing theirs with QE – both have been a big positive for the markets.

This morning we got the Durable Goods Report and the headline there is MINUS 0.4%, down from +1.3% in the August report – which wasn't very good anyway and was revised down from 1.8% originally reported.  July was also negative so we have net 0% for July, August and September and that keeps our poor Q3 GDP thesis intact, doesn't it?  

According to the WSJ:  "Money managers still have worries, ranging from the fate of President Biden’s infrastructure and social-spending plans to the potential unwind of Federal Reserve stimulus measures that have goosed markets since early 2020. For now, though, many investors say they are sticking with stocks in the expectation of modest if bumpy returns through the end of the year."

Our indexes are holding up well pre-market but BA was disappointing and will drag down the Dow and the S&P 500 and Asia closed down 1% and Europe is off about half a point so it's not very clear what US traders are so excited about.  MSFT, TWTR and MCD all had good earnings, however – so maybe they'll offset other weakness for the day.

Nothing really matters until tomorrow's GDP Report but…
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Tobin Smith: Bad Energy Decisions Matter

 

Image by Harry Stilianou from Pixabay

Bad Energy Decisions Matter

The 2022 Energy Crisis Is Here as Nations Struggle to Keep The Lights On

Courtesy of Tobin Smith, Transformity Research

Many Transformity Research investors have made a fortune in our energy infrastructure investments in the last 20 months, and we stand to make a lot more profits as the 2021-2022 energy crisis deepens.

For a variety of reasons, the profitless public Exploration and Production (EP) Fracking Boom is unlikely to happen again… and thus we are in a structural bull market for energy and a longer-lasting Fracking Bust while the resurging world economy that still runs on 80% hydrocarbons for energy barely hangs on. 

We forecast $75 oil in June and $4 natural gas after it became clear the major oil and natural consumption countries were on a path to at least enough vaccination and natural immunity to re-open their economies. We knew there would be more pent-up demand for oil and natural gas, and not nearly enough marginal new production.

We knew that because in the United States, the world's new leader in energy production, the public companies that created the Great American Energy Fracking BOOM had lost $trillions in borrowed money in a race to the bottom of the energy fracking mountain. Wall Street and energy banks were not lending any more energy production money because it would only serve to make them lose MORE money per barrel of oil or MMMbtu of natural gas.  

The old rule of commodity economics--the cure for high priced energy is high priced energy--requires willing lenders and investors to finance unprofitable energy drilling and production. But the folks with the money called uncle even before the pandemic hit the oil patch. When combined with OPEC+ getting religion on oil production that skews oil prices higher at the margin, now the new marginal producer of oil and natural gas in the world (American energy industry) was cut off from their financial enablers.

When fracking technology became profitable, lenders and private equity forgot that the cure for $100 oil was $100 oil…and the $100s of billions of drilling spending made the US the new marginal producer of light sweet crude. The “produced natural gas” that…
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Terrific Tuesday

4,577! 

That's a new all-time high on the S&P 500 and it came on an exceptionally low-volume day but let's not quibble – people are buying whatever Corporate America is selling, whether it's a coin they just made up last week or a SPAC they made up yesterday – form eschews substance these days and the less you offer – the more they will pay.

Does that no make sense?  Well, then you are playing the markets incorrectly, my friend!  Aside from a few companies that have gotten trashed – earnings don't seem to matter, nor does guidance.  Having a pulse seems to be enough to get investors excited and lifting stocks higher.  Tesla (TSLA) sold 100,000 cars to Hertz (Bankrupt) for $420M and the stock jumped $120Bn in value.  Even if each car was sold at a 250% profit – it would still have gained 100 times more than they could earn selling the cars — in a day.

Tesla | Barron'sAnd, of course, logically, these are the same 100,000 cars that would have been sold to someone else had Hertz not bought them – or were we worried that TSLA wasn't going to sell out their production prior to this?  No, that wasn't the case at Tesla's entire production for 2022 is projected to be 1.3M cars and it was going to be 1.3M before and after this deal.  

This chart is from Barron's way back on October 21st, when TSLA was only trading at $865.80, which was roughly $860Bn in market cap.  Since then, it has gained almost $200Bn – the entire market cap of Toyota Motors (TM) – without any of the fundamentals actually changing (it's only been a week!).  Toyota makes 1.2M cars PER MONTH and they also make $1.6Bn PER MONTH – also as much as TSLA makes in a year.  

Where is the logic to these valuations?  There isn't any.  The total global auto market is 80M cars per year – even if TSLA sold them all it would be a hell of a stretch to get to $1Tn but, currently, TSLA has 2% of the market yet their Market Cap is equal to the entire rest of the
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Monday Market Movement – All-Time Highs Ahead of GDP Report

What Me Worry? - MinterMarketsEverything is up.

Oil is at $85 this morning but no one considers anything a crisis.  Solar Wind is back, hacking more tech companies, Evergrande is still a problem in China, the Fed is likely to begin tapering at the next meeting, there's still no stimulus package and still 1,509 people died of Covid yesterday with 72,644 infected – essentially ever single person at a football stadium.   What, us worry?  

That's as many people infected in the US in a single day as China has had TOTAL (109,203) and they shut down their whole country over it.  The US is banking on herd immunity to keep us relatively protected and that means everyone gets the disease eventually and we see who survives.  

The vaccines keep your infection mild or give you an immune response without getting infected at all and, at this point, almost 200M of us are fully vaccinated and 220M of us have had at least 1 shot and 110M of us are not vaccinated at all and pretty much have no intention of getting vaccinated so, for God's sake, take your booster shots because 1 out of 3 people you come in contact with have ingored their saftey and you own and 2M of them (2%) have gotten Covid this month so, at any given time – 1 in 50 of them are actively infected.  

This disease is never going to go away if 1 in 50 people at any given time are actively infected.  Covid isn't a "one and done" disease – people get re-infected so, while you may personally be doing whatever you can not to get infected – 1/3 of the people living in this country are incubating the disease and future mutations to keep challenging us down the road.  

Bruce Plante cartoon: Is the coronavirus winning? | Columnists |  tulsaworld.comThis seems like an insane plot to an outrageous science-fiction movie but this is our real lives in America 2020.  We are tied with El Salvadore and Turkey in the vaccination rate of our people.  Sri Lanka, Fiji, Ecuador, Mongolia, Turkmenistan – even Brazil is doing better than we are – along with 100 other countries who are ouperforming our
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Leveling the Playing Field With Cloud Gaming

 

Leveling the Playing Field With Cloud Gaming

Everyone Needs Access To Games

Courtesy of Reed Berkowitz at CuriouserInstitute

A friend of mine noticed something interesting. His teen was playing a game online with a group of other kids, but no one was actually “playing.” The characters were just kind of standing around chatting with each other as the game went on without them. The game had become secondary to the conversation. He mentioned it in our group chat and everyone with teens had noticed something similar. We had all seen our kids chatting on Discord or some other software and hanging out in-game.

It turns out that, without much fanfare, gaming has become one of the world’s largest social activities. Covid-19 increased the importance of gaming even further, driving game sales around the world.

The giants of the video game industry have thrived in the pandemic. Can the success continue?

The pandemic has turned everyone into gamers

Gaming has evolved into a medium that can not just relieve the stress of isolation but be a cure for isolation itself. It can take us places and connect us to people.

The problem is that gaming is only a solution if you can afford it.

Ever since the first arcade games, the types of games people can afford to play, and how long they can be played, have always come down to money. As people lose their jobs or their businesses, or scramble to get by on a percentage of what they used to, families have less and less access to the expensive hardware and software that gaming requires. This is creating an ever-widening gap between gaming haves and have-nots.

Cloud gaming, still in its infancy, has risen as a way to help bridge this gap and get new demographics of gamers into gaming.

It’s a literal game-changer.

Gaming Is Essential

There has always been a disproportionate amount of fear-based reporting about the negatives of gaming. The truth is, even…
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Fabulous Friday Finish – Rocky Earnings do not Stop Indexes from Making New Highs

Nice move on /NG this morning.  

We hit our goal at $5.32 this morning – as we predicted in Wednesday's Live Trading Webinar (replay available here) giving us a $3,200 per contract profit in two days – congratulations to all who played along (we are done with this trade)!  Our original set (this was a bonus round) was played on Tuesday, when I said:  

So basically we want to lock in $1,000 – so that's the stop but over $5.10 and that becomes the stop but the retrace from $5 would be 0.02 and 0.04, which is where we'd end up stopping out.   What do we expect?  Well this had a very high potential for reward as we've slipped from $5.80 so it's an 0.80 drop (will consider below $5 while market was closed to be overshoot) so 0.16 bounces means $5.16 would be the weak bounce and the retrace from that would be 0.032 so $5.13 and $5.105 so, on the way up, we watch those carefully to see if they give us trouble.  More bullish if they don't. 

As I keep saying, the 5% Rule™ is not TA – it's just math.  That's why, unlike TA, it actually works. It doesn't work on it's own, however, you have to have the Fundamentals backing you up but the combination of solid support and strong Fundamentals is a winning one.  Oil (/CL) is back to $83.50 and the S&P (/ES) is back to 4,550 and both make nice shorts here.   As I've mentioned before – we think the GDP Report next Thursday will be a disappointement.

Despite some rocky earnings reports, most notably from Intel (INTC), the market is in a bit of a relief rally as China's Evergrande suddenly made a bond payment (as if one payment fixes everything).  Had they not made this particular $83.5M (out of over $300Bn in debt), they would have been in default, been audited and all their financial woes would have been exposed in short order – of course SOMEONE came up with that payment!  

SNAP is also getting crushed and other social medias are getting dragged
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Fallback Thursday – Stimulus Cuts and China Woes Take the Edge off the Rally

We're shorting the S&P (at 4,512 avg so far) ahead of the GDP Report next Thursday..

As noted yesterday, the Fed's estimates for Q3 GDP have come down from 6.25% in July to 0.5% as of last week yet the consensus among leading Economorons is still for a 3.75% gain and those are the guys who are yapping on TV and writing the articles you read in the MSM – you know, idiots… 

Part of the discrepancy is, of course, laziness.  3.75% is the average of the Top 10 and Bottom 10 forecasts in the GDPNow Survey and a lot of people still in the Top 10 simply haven't revised their opinion since July, failing to follow the advice of John Maynard Keynes, who said:  "When the Facts Change, I Change My Mind. What Do You Do, Sir?"

Facts have definitely changed in the past 3 months as inflation has spiked, Covid has resurged, shipping has backed up, disrupting supply chains, labor is in short supply and we're even flat out failing to deliver some commodities, causing spikes in Natural Gas, Gasoline, Copper, Uranium…  In short – it's a mess! 

BILLIONAIRES ARE LEAVING THE PLANET, yet we thing everything is fine?  China is certainly not fine as Dollar-bond defaults from Chinese property developers are rising quickly as the country’s housing market slumps, and the problem could worsen as a wave of debt from the beleaguered industry comes due in the coming months.  Real-estate developers dominate China’s international high-yield bond market, making up about 80% of its total $197 billion of debt outstanding, according to Goldman Sachs.

Since Evergrande and Fantasia defaulted on payments earlier this month, at least four other Chinese developers have either defaulted or asked investors to wait longer for repayment. A 30-day grace period for Evergrande to pay international bondholders, meanwhile, runs out this weekend, and investors are expecting the company to default on close to $20 billion in outstanding dollar debt.

That is just a drop in the bucket as Evergrande alone is over $300Bn in debt and, if they want to borrow more – 20% is the going rate.  Does that sound sustainable to you?  The extreme market dislocation raises the risk of a vicious cycle, in
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Phil's Favorites

How to make fragile global supply chains stronger and more sustainable

 

How to make fragile global supply chains stronger and more sustainable

Shipping containers are moved from the Fairview Cove Container Terminal In Halifax in May 2021. THE CANADIAN PRESS/Andrew Vaughan

Courtesy off Adel Guitouni, University of Victoria; Cynthia Waltho, University of Victoria, and Mohammadreza Nematollahi, University of Victoria

...

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Digital Currencies

Ethereum: the transformation that could see it overtake bitcoin

 

Ethereum: the transformation that could see it overtake bitcoin

The crypto wars are hotting up. Wit Olszewski

Courtesy of Daniel Broby, University of Strathclyde

The world’s second most valuable cryptocurrency, ether, has been touching all-time highs in price ahead of a major upgrade of its underlying platform, ethereum. Ether is currently worth in aggregate just shy of US$500 billion (£363 billion). That’s still slightly less than half that of the biggest cryptocurrency, bitcoin.

...

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Zero Hedge

Wait Until All These New Homebuyers See Their Property Taxes Go Up Next Year

Courtesy of ZeroHedge View original post here.

To add another chapter to the "our economy is a ponzi scheme bubble that is bound to eventually burst" argument, those who went out and overpaid for property this year may wind up with a hangover in the form up skyrocketing property taxes.

We all know that higher real estate prices (hereinafter referred to as "a real estate bubble") are often praised by government and Fed officials as signs of progress for the economy. They're great news for those who already own property and terrible news for those looking to enter the m...



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Politics

Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.