Posts Tagged ‘EUO’

Testy Tuesday – Are We There Yet?

Once again CNBC has gone too far!

The futures were doing very well, up almost 1% until CNBC put together the tag-team guest spot of Mohamed El-Erian, the notorious bond pusher from Pimpco and "Doctor Doom" himself – Nouriel Roubini in a classic bear and bigger bear face-off that was timed right into the EU's lunch hour.  Roubini's new book is called "Crisis Economics" and there's nothing like a crisis to chase people into the loving arms of PIMCO, where El-Erian gets the fees.  It's odd that there's not even a simple disclosure statement from El-Erian to guide viewers like: "You know, I do well when the market does bad."    

This same gloom and doom tag-team was touring America in September of 2008 (see "Roubini, El-Erian – 'Things are Getting Worse'") and we're up about 20% since then but, to be fair, things did get worse first.  The boys teamed up again this February (12th) and their predicition of an additonal 20% drop off the February lows (also brought to you by the fear-mongers at CNBC) was completely wrong at the time but the boys dusted themselves off and took this show on the road again as noted in this May 28th article pairing the two's depressing outlook.   

Things were getting better yesterday until Moody's (the company Buffett owns a large stake in but has nothing to do with according to his testimony) downgraded Greece in the afternoon – something that was not at all unexpected but was treated as market-moving information on a slow news day.  Does CNBC push doom and gloom for ratings or are they trying to help their bosses at GE water down the financial regulation bill by making it seem like the average investor is against it or are they just trying to keep Cramer and the Fast Money team from looking clueless?  This is why we used to have LAWS that kept our news sources "fair and balanced" - the moment a news provider takes a side with one of their high profile shows or personalities – they then have a vested interest in MAKING the prediction come true – how can that not color their future editorial positions? 

As I said last week, Dr. Doom doesn't have to be in on a conspiracy – He's Doctor Doom!  The media
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Thrusting Thursday – Where’s Our Rocket Fuel?

This is NOT David Ristau's graduation party!We just cannot get this party started! 

Every rally is getting sold into, much the way every sell-off was bought into last year.  Is this a major change in sentiment as the "smart money" takes every opportunity to get out of the market or is this the "dumb money" being stampeded to the exits – once again at the bottom of the cycle? 

Fear is certainly permeating the air and, as I have to keep saying to make our position clear, we are generally aiming for 75% cash with 23% positions that are hedged by at least 20% and 2% in Disaster Hedges that pay 5:1 so we "bullish" but it’s bullish and guarding against a 30% drop – which is more bullish than we were in May, when we were guarding against a 40% drop on our buys.  Anyway, it’s VERY important to keep that in mind as we are picking up very long-term positions and we actually HOPE the market does go lower so we can buy more at low prices because it will be HARD to commit our cash to any rally that doesn’t get us over the April highs and we may have a LONG time to wait for that one. 

So, we are having fun with short-term trades and doing our bottom fishing and, as I mentioned yesterday, we are now taking some upside hedges that can give us 10:1 pay-offs if the market breaks UP on us.  That way, if we have 23% in positions that make 20% and even just 1% in positions that make 10%, at least we pick up about 15% if the market gets away from us.  If we were more bullish, we’d make a bigger commitment but heck, we STILL are not at our weak bounce levels yet so caution is the way to go. 

We need a catalyst to get us going just like the myth of infinite Chinese growth was the catalyst that got the markets through last year we need to sell the story of a US recovery overseas to now get those investors back in the water or we’ll be left swimming all alone with the sharks

Patience Art PrintI was happy with the Beige Book yesterday and we thought the sell-off in the afternoon was BS so our last trade idea of the day was to grab the QQQQ July $45 calls for $1.08 and those will get us…
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Forgotten Weekly Wrap-Up

Well, what a huge waste of time this week was!

Remind me next holiday to just take the whole surrounding two weeks off.  We had similar nonsense around Good Friday and do you remember that HUGE drop we had on Dec 31st that was completely erased on Jan 4th?  It was very similar to the big sell-off we had on Jan 15th that was reversed on the Tuesday after Martin Luther King day (although that was the last good day we had for 2 weeks as the Dow droppped 750 points).  Now I don't want to connect that sell-off with Scott Brown's win in Massachusetts and we didn't go short just because the Dems lost their ability to make changes - we had gone short a week earlier as I called the markets "shell-shocked" – too battered by bad news to take appropriate action.  

My new mantra is "I can't change the system – I can only tell you what they are going to do and how to make money on it."  This week that was really put to the test but no more so than yesterday, when we got all the highs and the lows and all the drama in a single 6.5-hour session.  As you can see from David Fry's Chart, we took a huge dip on the Spain downgrade at about 12:40, followed by a stick save at 2 and then a massive dump back near the lows into the close.  As I had noted in the morning post, we were already short but I pointed out to Members in Chat at 12:26: "CNBC trotting out the Steve Wynn story again?  That was two weeks ago…  Looks like we’re heading for a panic frenzy on CNBC again!"  This is why we watch CNBC, even though it's like waterboarding ourselves every day, we need to know what they are up to! 

I put up a nice TZA hedge for Members which pays 500% on a 20% drop in the Russell as we had noted copper's inability to hold our $3.15 target – the Spanish downgrade was just icing on the cake but also totally expected by us as I had just that morning put up a chart of the cascading cycle of failures and mentioned Spain was next.  As we…
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Thrill-Ride Thursday – Wednesday Never Happened, Now What?

Poor CNBC!  They are never going to get those chocolates

I joked with Members during yesterday's rally, after Fast Money's bullish "Half-Time Report": "Uh oh – All the Fast Money people said buy - make sure you have your disaster hedges in place!"  Indeed the market fell off a cliff almost the second they said it but we got out of our TZA calls (a little early) and did a little bottom fishing yesterday with our own buys on LYG ($3.13), Short EUO ($25.30), VZ ($27), FRO ($30.50), RIG ($58.50) and PFE ($15.10).  Maybe I'm just a paranoid conspiracy theorist but I said to Members at the close:

That was a sad little show at the end wasn’t it?   Nas was beaten with a stick into the close.  AAPL $243, BIDU $67.46, AMZN $123… Ugly stuff.   Not at all sure what they were trying to accomplish if not a flush…

Gap/RMM – Yes (we will gap) up.  I just didn’t see why we would sell off like that.  It seems that someone wanted to paint un ugly picture, maybe they didn’t get a good fill on Tuesday morning?  Maybe not gap up tomorrow, maybe another drop and THEN we take off but I’m thinking a fund that wants to make numbers on Friday would want to flush us today and buy the SPX overnight and pump us up for a big finish so they can get back to cash on Friday and book it.

Isn't it funny how that's pretty much exactly what's happening this morning?  A huge gap up into the open that's erasing the previous day's losses when no one is trading – just like yesterday (when I get on my knees and pray - we won't get fooled again).  Fast Money got fooled out of their bullish 1:50 positions by 5pm as suddenly they relized the market is controlled by evil computer programs – not exactly news to us and no reason to shake us out of our well-hedged positions.  We ignored rumors on China (and we always ignore Steve Ballmer) in chat and those seemed to be the major rumors moving the market lower yesterday. 

Cramer kept the rumor mill grinding, saying: "The Chinese reportedly are debating whether or not to sell their European bonds, and that’s what killed our upward momentum."  CNBC seems to have pulled the video so it's hard to tell
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Monday Monetary Meltdown – Sill the EwRo!

Oh what a World, what a World

It's funny how much damage a splash of cold water can do, isn't it?  Especially when that splash of cold water is reality and the witch is fiat currency.  You are very, very lucky because I do not have to rant on about this for 2 pages here because I already told people this was going to happen in March of 2007, when I warned that rising oil prices were indicating a serious issue with fiat currencies and would eventually undo our then-indestructible rally.  The title of that post was "Are We Heading for an Economic Tornado?

The Dow was just above 12,000 at the time but, to an old fundamentalist like me, it seemed a little pricey and my dire warning at the end of the article sounds more like a recap of the last 3 years now when I said:

If we manage to topple the entire house of cards that is commodity pricing, perhaps we won’t need sub-prime mortgages to buy ourselves affordable housing at realistic interest rates.  There is certainly a storm brewing as a vacuum of money has been left in our heartland as the Broker/Commodity/Financial triumvirate has funneled $6T away from you and the things you enjoy (consumer goods) to force you to spend it to maintain the things you need (cars, tractors, appliances).  They’ve created a storm that threatens to tear the global economy apart.

As I've said many times, I don't have the power to fix things (but, if appointed dictator for life, I will serve) – I can only tell you what's going to happen and how to profit from it.  At the time we were buyers of gold, looking to ward off a probable slide in the dollar and what looked like inevitable inflation.  Now we are sellers of gold because, in this post-crash Gobal economy – who can afford it?  Sure speculators can afford it but just like houses or oil (or tulips for that matter) – eventually they have to find a real buyer.  Did you know gold demand is plunging in Asia?  What?   They didn't tell you that in any of the 100 TV commercials?  I am shocked… 

Actually, I can tell you the easiest way to time the gold market – count the number of commercials from people who want to buy your gold vs the…
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Wild Weekly Wrap-Up – The Madness of the Markets (Part II)

Well this is a first.

For some reason I keep getting an error trying to continue the previous post so I'm just going to continue here.  Sorry about that but it's too early on a Sunday to wake up the programmers.  So, where were we?  Oh yes, we had just finished getting full circle back to last weekend's post, where we reiterated bearish positions.  My target for this week kept falling from 10,700, to 10,500 to 10,200 as we lost all confidence in the ability of our indexes to recover and, of course, Europe fell quickly apart:

Monday Monetary Madness – Ewwwwro! 

It's amazing how quickly people can lose faith in one of the World's 3 major currencies.  So amazing that I can't believe you can sleep at night!  Have I mentioned how much I like TBT lately?  The Euro dropped from $1.51 in November to a low of $1.21 on Tuesday, that's our 20% rule, by the way and a retrace to $1.27 (20% of the drop) is not going to be very impressive until we're well over it. 

Unless you are an exporter (and who in America does that anymore?) then a strong dollar is kind of nice but the dollar isn't actually strong, we're down 6% against the Yen this month, it's just the Euro is very weak.  Unfortunately for Japan – everyone there is an exporter because their own people stopped spending money in 1990, when their market fell off a cliff and Japan's people lost all faith in investing schemes and sham financing deals – you know, the stuff that pretty much drives the US economy…  

 

The Media talks about Japan's lost decade, but this is the start of decade 3 of their deflationary cycle as the Nikkei has dropped from 40,000 in 1990 to 20,000 in 2000 to 10,000 in 2010.  Remember when Japan was the next big thing and they were going to take over the World and US executives were learning Japanese and US firms were rushing to tie up business in Japan etc., etc?  Thank goodness we're too smart to fall into a trap like that again! 

Nonetheless, I called a top at $25 on EUO and…
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Turnaround Tuesday – Crisis? What Crisis?

Wheeee!  Isn’t this fun?

We were so giddy with excitement on yesterday’s dip that we went with 12 new long positions while the markets were heading down and the people who didn’t read my morning post were panicking.  Things could not have gone better for us as we had a great spike down that let us lighten up on our many successful short plays and turn around and put that cash to work establishing what we hope will be some nice long-term positions, even though long-term in this market has been "more than a month" this year

Fundamentally, nothing has changed and we’re not letting go of our disaster hedges (in fact we added one yesterday too) but we are happy to do a little bargain hunting from our mainly cash positions as our Discount Stock Buying Strategy gives us a built-in 20% cushion in our first round.   That takes us all the way down to 8,500 on the Dow before we even have to worry about dollar-cost averaging, which also helps us sleep at nights – a nice bonus!

It looks like we also picked the right day to go long on oil and the Euro and short on gold but those are more directional plays and we will be taking money and running as those run out of momentum since we do not have 20% cushions on those entries.  We still have our technicals to get through and despite our amazing V-shaped recovery yesterday, Asia was not all that thrilled and only managed weak bounces with the Hang Seng failing to retake 20,000 (19,944) and the BSE still below 17,000 (16,875) while the Nikkei barely held their critical 10,200 line (10,242) in today’s trading and the Shanghai is still languishing at 2,594 but at least has averted a total disaster below 2,500 so far (300 on StockCharts). 

There’s no need to annotate these charts – our foreign friends are in deep trouble until they get back over those "death-crossed" 20 dmas (blue lines) and will not be impressive at all until they get over the red 50 dmas.  Europe is up about 1% this morning for no particular reason and that’s not reflected in the charts but we’ll be watching the DAX closely this morning to see if they can stay above that critical 6,100 line, which they’ll have to do if the FTSE and CAC are
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Monday Monetary Madness – Ewwwwro!

Wow, nobody wants thos Euros!

Of course, that kind of makes me want them as the Euro collapsed to $1.223 last night and we moved into "crazy oversold" territory.  Just 3 years ago supermodel Gisele Bundchen (left) INSISTED on being paid only in Euros (classic sign of a top!).  It’s not like we’re going to run in and buy Euros but I think $25 is plenty on EUO so we’re done with those for now and they are up another $2 from when we were already thrilled with them on May 5th.  That was the same post in which I said about oil "that bubble may be popping too" and we’re down from $85 then to $72 this morning and we touched $70 this morning which is our 20% retrace from our April $87 highs.

Unfortunately, I can only tell you what is going to happen and how to profit from it, I can’t fix things (well I could but they don’t listen to me) although I may be attending next month’s New York Forum, where business leaders, hedge fund managers, sovereign wealth fund managers and private equity funds (in other words "THEY") will get together and decide "YOUR" future.  I am not selling out, this is not really the same "THEY" as the Gang of 12, this is the bottom 90% of the top 0.1% trying to make an actual difference in that very unique way that pushy New Yorkers are able to do (did you see how we’re taking over the Supreme Court by the way?).  

So I spent the weekend talking to people about how to FIX the problems that plague this planet and I am encouraged by the fact that there are, in fact, ways to improve our situation but, of course, we are held back by lack of government willpower to make the hard choices and do the right things instead of this global "chicken in every pot" nonsense that predominates global politics.  There are good people who are trying to do good things and some of those people even work in Washington, surprisingly enough, but that town is in the worst gridlock since Newt’s revolution back in 1995, which ended 40 years of tyrannical Democratic Rule and prosperity

Back then the Republican "Contract with America" promised us term limits, job creation and wage enhancements, a balanced budget law, and restrictions on American military activity in foreign wars.  That helped to usher in a decade of Republican rule and I don’t even have
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Weak Weekly Wrap-Up – Charting Uncertain Waters

I’m just doing a quick wrap-up this week because, surprisingly, it MIGHT be time for a new Buy List!

I had said to Members on Cinco de Mayo, in our 5% Rule Review, that if we broke below 1,155 we would retrace all the way to 1,100 with our 5% Rule resistance points around 1,100 at 1,155, 1,114, 1,100, 1,073 and 1,045.   We actually spiked as low as 1,066 on Thursday but finished the week at a very sad 1,110 as we watched for that "weak bounce" zone to be broken all day.  This does not bode technically well for the markets next week but I told Members we would have to give the markets a pass for the day.  Based on the uncertainty of the weekend, we can’t expect a lot of capital commitments ahead of the EU decision.  After all, we’re in cash – why shouldn’t other smart funds be too?

When I predicted we’d hit 1,000 on Wednesday, I did not think it would be on Thursday!  The markets are now negative for the year and the S&P has spiked almost to the Feb low of 1,044 (and our lowest close was 1,056).  That’s right, these 5% Rule numbers are the SAME ones we used back then and it’s the same series we used to measure our winter run at the end of last year.  We expect a bounce here, hopefully at least a test of 1,155 on a relief rally if Greece is "fixed" yet again on Monday but we’re not going to be too impressed until we’re over that line. 

Still that means it’s time to at least lay out a new Watch List, which is the prelude to a Buy List – giving us a list of stocks we’d like to get into at lower prices.  Our last Member Watch List was back in December and by Feb 6th we had our famous Buy List, which we triggered at Dow 10,058 for a very successful run through March 18th ("Bye Bye Buy List!"), when we closed 2/3 of the positions and we have since cashed out the rest as I got more and more worried about the rally, finally calling for all cash last week.  

Speaking of last week, for those of you who say I don’t pick enough straight stocks – I listed 33 short trade ideas from my unofficial "Sell Listlast Friday (4/30) when the Dow was way up at 11,167…
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Phil's Favorites

How palm oil became the world's most hated, most used fat source

 

How palm oil became the world’s most hated, most used fat source

Oil palm fruit in North Aceh, Indonesia. Fachrul Reza / Barcroft Media via Getty Images

Courtesy of Jonathan E. Robins, Michigan Technological University

Palm oil is everywhere today: in food, soap, lipstick, even newspaper ink. It’s been called the world’s most hated crop because of its association with de...



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Biotech/COVID-19

The FDA's weak drug manufacturing oversight is a potentially deadly problem

 

The FDA’s weak drug manufacturing oversight is a potentially deadly problem

Though drug recalls are relatively uncommon in the U.S., reduced inspections increase the likelihood of manufacturing errors that slip through the cracks. AP Photo/Rafiq Maqbool

Courtesy of Adrian V. Hernandez, University of Connecticut and C. Michael White, University of Connecticut

The ...



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Zero Hedge

Buzzfeed Is Finally Going Public In SPAC Merger Valued At $1.5 Billion

Courtesy of ZeroHedge View original post here.

Update (1100ET): At long last, Buzzfeed is finally going public, a crowning career accomplishment for founder and CEO Jonah Peretti.

As we reported earlier, Peretti confirmed on Thursday morning that Buzzfeed had agreed to merge with the obscure 890 5th Avenue Partners (yes, it's named after the fictional headquarters of the Avengers), which raised $250 million in an IPO earlier this year.

The SPAC is led by CEO Emiliano Calemzuk and executive chairman Adam Rothstein, and counts NBCUniversal ad sale chief Linda YAccarino, former Buzzfeed President Greg Coleman, Time W...



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Digital Currencies

Will Bitcoin Crash the Stock Market?

 

Will Bitcoin Crash the Stock Market?

Courtesy of 

When the S&P 500 fell in March last year, it brought Bitcoin down with it. So if stocks can bring down Bitcoin, it’s reasonable to ask if Bitcoin can bring down stocks.*

If you thought the Bitcoin run-up to 60k was emblematic of investor** euphoria, then you probably wondered what would happen if it were to come crashing down. Would that take other high-flying areas of the market down with it?

It might be premature, but as of now, the answer is no.

...



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Chart School

RTT Plus Bulletin

Courtesy of Read the Ticker

RTT Plus private blog answer these questions over the last two weeks.

Ending: 2021-06-19

- Metal stocks very bullish after gold smash
- FED taper talk vs Basel 3
- Dollar devaluatioin before end of 2021
- COVID, Vaccine insight (off topic)
- The next play for the deep sate (off topic)
- The debt loaded USA can not break these economic stats


RTT Plus membership required to review.

RTT Plus members can include chart building services if you wish. If you you do not want chart building services select 'RTT Plus' only during the membership sign up process.

Sign up now!






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Politics

The Ukraine Fallacies (with Victor Rud)

 

The Ukraine Fallacies (with Victor Rud)

Americans are confused about the history of Ukraine. That's just how Russia wants it.

Courtesy of Greg Olear, at PREVAIL

Greg is the author of Dirty Rubles: An Introduction to Trump/Russia 

...

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Promotions

Live Webinar with Phil on Option Strategies

 

June is TD Bank's Option Education Month, and today (Thursday, June 10) at 1 pm EST, Phil will speak with host Bryan Rogers about selling options and various option strategies that we use here at Phil's Stock World. Don't miss this event!

Click here to register for TD's live webinar with Phil.

 

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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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