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Comment by dawgydaddy

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  1. dawgydaddy

    MU / Phil – When we did the MU top trade, I wasn't able to get a fill that day on the short July $50 calls. Just thought about it this morning. Well I could sell those calls now for $6.25 instead of the $2-something in the original trade, so that wouldn't be bad relative to the orginal trade idea, but given current circumstances, would that be the correct thing to do?







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Non-Farm Friday – Back to Work Edition

COVID Small Business Resources in Chattanooga, TNWe're waiting on Payroll Data.

Last month, in the April Report, the US Economy lost 20.5M jobs and, though "experts" are expecting another loss of jobs – we re-opened much of America in the middle of May, so it's very possible we show a net gain for April as people got back to work.  Expectations for this report are for around 8.5M additional job losses but the Futures are antiipating a positive number and are already up 1%.

Keep in mind, of course, that's AFTER the Government created a $700Bn Paycheck Protection Program that handed out money to employers in exchange for not laying off their employees during the crisis.  Figure the average worker makes $5,000/month including wage deductions and that's 2 months so $700Bn/$10,000 = 70 MILLION JOBS that the Government paid to salvage – otherwise this could have been, by miles, the greatest loss of jobs in American history.

Maybe now you understand why the Republicans were suddenly cooperating with the Democrats and supporting that stimulus package.  It's very hard to be re-elected when 50% of the voters don't have jobs!

ImageThat's why this jobs report tells you nothing about the real health of the economy.  It's a fiction that's been concocted by the Government so the people are not generally aware of how hard-hitting this disaster has been.  Yesterday, they were already talking about another $1Tn of stimulus by the end of June – anything to keep Q2 GDP from being down more than 50% – which is the current forecast by the Atlanta Federal Reserve.

8:30 Update:  Wow, we did get a gain of 2.5M jobs – that's great and miles better than the low expectations set by leading Economorons.  That puts our Unemployment Rate at 13.3%, MUCH better than 20% expected though Average Hourly Earnings fell 1% and that's not good for the workers but GREAT FOR WALL STREET (isn't everything?).  

Doesn't matter why, the Futures are up like a rocket though, in keeping with the theme of the last two weeks – unemployment for Black people still rose 2% - which makes sense since we've already reported that very little of the PPP money made it into the hands…
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3,100 Thursday – S&P 500 Tests Our 10% Line

3,135.

That's the 10% line above our Must Hold Level of 2,850 on the S&P 500.  If we can get over that and hold it, then we will have secured the rising 50-day moving average which will "Life Cross" over the 200-day moving average around June 19th and THAT would be a very bullish set-up into the summer – assuming the re-opening is getting into full swing by then.

So TECHNICALLY, the markets are in good shape but let's keep in mind that it cost us $6.7Tn to buy this technical rally and it's likely to cost another $2.3Tn to keep it going and that will put the National Debt around $28Tn more than 3 TIMES the $9Tn of debt we had in 2007 – before the Financial Crisis.  $10Tn was added during Obama's 8 years in office and now another $10Tn is being added during just 4 years of Trump (so far) – that's a much faster pace than Covid was spreading back when Trump said we shouldn't worry because we only had 5 cases in the US!

ImageSo the running cost of papering over a Recession seems to be about $10Tn but I'm not sure we're papering over this Recession – so far we're just boosting the market DESPITE the terrible economy.  The Atlanta Fed's GDP Now Forecast shows a projected 52% drop in Q2 GDP while the range of private forecasts projects only a 25% decline.  

That's a huge discrepancy – usually they are off by no more than 1% but it will take until July 30th before we get our first official estimate of Q2 GDP so, until then – let the speculators have their fun.  

Tomorrow we get the actual Non-Farm Payroll Report for May and it will be very hard to top April's loss of over 20M jobs, which wiped out all the jobs gained by Trump and all of the jobs gained by Obama so we're right back to the level of employment we had during the Bush crisis – which cost us $10Tn to get out of.   


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Which Way Wednesday? Just Kidding – Markets only go Up!

The Bear Will Not End Until The Fed Is Buying Stock ETFs | Seeking ...Yawn!

This is getting boring.  Every day the stock market goes up and up while we read about the Protests and the Riots and the Cold War with China and the Unemployment and the Virus and the Debt and the Economic Slowdown….  None of that matters on Wall Street because the World's Central Banks printed $20,000,000,000,000 of new money this year and almost all of that money went into the stock market.  So much so that the Fed now directly buys ETFs.

The five largest purchases by the Fed, in order, were iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT), Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH), iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and SPDR (JNK).

Free Markets Are Dead: Fed To Start Buying Junk Bonds, High Yield ...That's right, the Fed now buys junk bonds and the majority of these ETFs are managed by Blackrock (BLK), who also runs the Fed's debt-buying programs (once again, the Fed is NOT a Government Agency – it is a Banking Cartel made up of Bankers to protect the interests of Bankers).  Still, even for bankers, this seems a little fishy.

Buying Junk Bonds is a round-about way of giving CASH!!! to Corporations but in a way that the average American does not understand.  The companies issue bonds that normally would not get purchased at low interest rates but the Fed steps in and buys them all at the issue price so they are effectively giving the companies ($148Bn in Q1) loans far below the fair market value and ignoring the risks involved.  Since the only people that can be hurt by this are the taxpayers – why the F not?  

That $148Bn will be dwarfed by the Q2 lending, which is still underway and you can see what a party this is for Blackrock, whose stock jumped 20% on massive volume as the Fed started buying everything they had to sell.  This is simply a long-term game-changer for BLK and other Junk Peddlers – ALL bonds get sold – no one goes Bankrupt.

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Tuesday Turmoil – Trump Threatens More Violence

This is how we now treat Freedom of Speech and Assembly in America.

Day 7 of the protests and the President is ratcheting up the rhetoric, telling the Governors they have to "DOMINATE" the streets and, yesterday afternoon, in a scene you would think was from a movie where they want to establish that the Leader is an evil man who could not care less about his people, a PEACEFUL crowd was violently cleared from the President's path so he could walk to a church, hold up a prop Bible and make a speech threatening to use the US military to put an end to the protests.  

This is the point in the movie where you cut away to the heroes working from their basements with a plan to overthrow the monstrous tyrant, right?  Well, here's two such heroes who are willing to speak up – one from an attic and one from a garage:

And how are the markets reacting to the violence and the chaos all across America?  Well the Dow Futures are up 170 points (0.666%) this morning at 25,630 and if that's not a sign to short /YM, I don't know what is!  There is now a total disconnect between the markets and reality as many stocks are now making all-time highs on the premise that the pandemic is ending – which it clearly is not.

On Friday morning, we had 1,734,586 infections in the US and just over 100,000 deaths in Trumpland.  This morning we have 1,811,277 infections and 105,147 deaths so, in 4 days, we have 76,619 NEW infections – almost as many as China had TOTAL – and we've had 1,200 American's per day DIE of the virus.  1,200 per day is a rate of 438,000 per year and, of course, those people are disproportionately black so at what point would you take to the streets to fight for your people and your children's right to life, liberty and the pursuit of happiness – the principles this country were once founded upon?


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Monday Marching Madness

George Floyd Death - NBC News | NBC NewsThe First Amendment is getting a workout this weekend! 

Usually the Second Amendment gets all the attention as it's backed by the gun lobby but the First Amendment needs a lobbyist it seems as the President is attacking the Freedom of the Press and Speech – which used to be a big one in this country that we cared deeply about – and now "the right of the people peaceably to assemble, and to petition the government for a redress of grievances" is under attack as well

And what is the grievance?  Well, the sign below says it all.  While killing black people is a daily event in the US with 7,666 of "them" killed by the police in the past 6 years for an average of actually 3.5 each and every day in America.  It's one of those things we know is happening but we accept.  We were upset about it for a while (body cams) but then WE forgot (and WE is, of course, white people because I don't think it's the kind of thing you forget if you are black) but then George Floyd was tortured and murdered right on camera for using a counterfeit $20 bill that he may have had no idea was counterfeit.  

Floyd was a bouncer in a club, he ended up with a fake $20 bill and spent it.  He was also a truck driver (because everyone needs 2 jobs in Trumpland) to support his wife (widow) and daugter (now fatherless).  Living in Minnesota is always risky for black men, who are 4 times more likely to be killed by the police than white men – despite making up just 5% of the population.

Data dive: Racial disparities in Minnesota traffic stops

I want to be able to go in a White neighborhood and feel safe.  I want to be able, when the cops are driving behind me, not to clench and be tense.  I want to be able just to be free and not have to think about every step I take. – Protester


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Comment by phil

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  1. phil

    I hope everyone's weekend is going well.  

    Things sure seem to be going GREAT in America:

    Protests flare across U.S. | Live Events | Reuters

    George Floyd Death - NBC News | NBC News

    Riots in America: Fears About New Coronavirus Outbreaks - Bloomberg

    America clamps down on freedom of assembly as 25 cities imposed ...

    4 more years baby!

    Leadership!

    Protests rage for a fifth night across America | National ...

    Thread by @thedailybeast: OPINION: The arrest of CNN reporter ...

    ???????????LV???????????30????????? ...

    What reasonable person could see a  connection here?  Clearly the President's words did not lead to attacks on CNN, right? 







Comment by phil

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  1. phil

    Good morning!

    See the STP adjustments above!







 
 
 

Zero Hedge

Orphaned Silver Is Finding Its Parent

Courtesy of ZeroHedge View original post here.

Authored by Alasdair Macleod via GoldMoney.com,

This article examines the prospects for silver, which has been overlooked in favour of gold. Due to the economic and monetary consequences of the coronavirus lockdowns and the earlier turning of the credit cycle, there is an increasing likelihood of a severe and sustained downturn that will require far more monetary expansion to deal with, favouring the prospects of both gold and silver returning to their former monetary roles.

...

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Phil's Favorites

COVID-19: A Data-Driven Analysis

 

COVID-19: A Data-Driven Analysis

By John Mauldin and Mike Roizen, MD 

Should you wear a mask in public? This seemingly simple question immediately generates emotional, political, and social anxiety.

It is just one of many provocative questions COVID-19 is forcing upon us. They should be simple, data-driven policy issues but many are not.

Today’s letter is in a different format from the usual Thoughts from the Frontline. As long-time readers know, I am in frequent (and lately almost daily) contact with Dr. Mike Roizen, emeritus head of wellness at the famous Cleveland Clinic, member of the Cleveland Clinic’s leadership team, and author of many books which, thanks ...



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Biotech/COVID-19

COVID-19: A Data-Driven Analysis

 

COVID-19: A Data-Driven Analysis

By John Mauldin and Mike Roizen, MD 

Should you wear a mask in public? This seemingly simple question immediately generates emotional, political, and social anxiety.

It is just one of many provocative questions COVID-19 is forcing upon us. They should be simple, data-driven policy issues but many are not.

Today’s letter is in a different format from the usual Thoughts from the Frontline. As long-time readers know, I am in frequent (and lately almost daily) contact with Dr. Mike Roizen, emeritus head of wellness at the famous Cleveland Clinic, member of the Cleveland Clinic’s leadership team, and author of many books which, thanks ...



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The Technical Traders

WOW, look at this huge setup unfolding in S&P 500. Squeeze the FOMO !!

Courtesy of Technical Traders

If you have FOMO on the stock market you better watch this video because it will make you feel better if what is unfolding is exactly what I have been talking about for the past week. The Short/FOMO Squeeze!

I offer membership services for active traders, long-term investors...



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ValueWalk

Warning Signs: Too Big To Fail Stocks In 2020!

By Sven Carlin. Originally published at ValueWalk.

In 2008 banks were too big to fail! In 2020, stocks might be too big too fail! We discuss the financialization of the economy, how household wealth is impacted by financial engineering and low interest rates force people to invest. This all leads to stocks being hot and discussed by many, cheap brokers like Robinhood add to the party. Usually, it would be a huge warning sign for the stock market, but today it might be indicating that stocks are too big to fail.

Q1 2020 hedge fund letters, conferences and more

With stocks being $28 trillion of american wealth, or 23%, it is hard to imagine the FED letting ...



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Kimble Charting Solutions

Is the 39 Year Treasury Bond Bull Market Over?

Courtesy of Chris Kimble

10 Year US Treasury Bond Yield “inverted” Chart

This chart should look familiar, as I’ve shared and updated it a few times to alert clients and readers.

It is the 10 Year US Treasury Yield Chart… inverted.

As you know, bond yields and price move in opposite directions. So this is a way to analyze and think about bonds. And as I’ve pointed out before, inverted charts can also reduce bias.

As you can see, bond yields created the largest reversal pattern in decades. When inverted (as this chart is), yields look like bond prices. So this is action is very bearish for bond prices on a long-term historic...



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Chart School

Silver volume says something is near boiling point

Courtesy of Read the Ticker

Fundamentals are important, but they must show up in the chart. And when they do and if they may matter, it is a good sign if price and volume waves show a change of character.

The Point and Figure chart below is readtheticker.com version of PnF chart format, it is designed to highlight price and volume waves clearly (notice the Volume Hills chart).

Silver ETF volume is screaming at us! The price volatility along with volume tells us those who have not cared, are starting to, those who are wrong are adjusting, and those who are correct are loading up. Soon the kettle will blow and the price of silver will be over $20. 

Normally silver suffers in a recession, maybe this time with trillions of paper money being creat...

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Lee's Free Thinking

US Southern States COVID19 Cases - Let's Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboar...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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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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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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