Good morning!  

Trump's plan for teachers….

Picking up where we left off, with the BS pump-up into the open quickly reversing.  I'm still agnostic – just want to see where things settle out for the week.

Oil and gasoline still going down, /NG still don't care…

I guess /TF is worth a toss long at 1,500 if it holds but I'm taking a stop below 1,499 for $50 loss vs maybe it goes to 1,505 for a $250 gain on a bounce.  

If we do bounce, we'll have to then see if they are strong or weak but strong is far away now. 

Down 60, for example means 12-point weak bounce to 1,512 and 24 points just to make the strong bounce at 1,524 – still bearish until then and, if we don't make that by tomorrow – still bearish into the weekend. 

More important (and also a good long play) is 2,700 on /ES so of course we're going to bounce off that – even in a huge sell-off and down from 2,780 is 80 so 16-point bounces to 2,716 (weak) and 2,732 (strong) seems like a lot of work.  

Of course, if you need a short, if either of those fail their lines, then short the other one as soon as it crosses under and get out if either cross back over.   We're only 10 points above 6,800 on /NQ, down 200 points (2.8%) means we need 25 just to get back to the -2.5% line (6,825) and that's not even the weak bounce (40 points) at 6,840 and 6,880 would be strong.

Notice we failed at 6,880 on the way down yesterday and then a bad test into the open.

Big Chart – My death cross lecture on the Nas is already paying off.  There's no stopping it now, just a question of today or Monday as the 20 dma falls below the 50 dma.  That's about 4.5% below 7,000 (6,685) with -5%, of course, 6,650.

On the RUT, you can see the very neat 2.5% move between the lines and clearly no reason, now that we're at 1,500, for there to be real support (other than the psychological 1,500) until 1,476 (the 2.5% line).

LB/Jabob – Time for us to buy again you say?

Also below support but broad market not helping.  No major hurry but I am watching the 2020 $35 puts, now $5.86, as that's net $29.14 and I'll take 1,000 shares at that price in the OOP!  That means it would be silly not to sell 5 of them and take 10 of the bull call spreads – the $35s are $13.40 and the $45s are $8.80 for net $4.60 ($4,600) less $2,930 puts us in the $10,000 spread that's almost all in the money for $1,670.  Let's make that official:

• Sell 5 LB 2020 $35 puts for $5.86 ($2,930) 
• Buy 10 LB 2020 $35 calls for $13.40 ($13,400) 
• Sell 10 LB 2020 $45 calls for $8.80 ($8,800) 

LB was our original pick for Trade of the Year for 2018 and we are THRILLED to get another chance to enter at this price.  The company is guiding to a disappointing $3.10/share earnings in 2018 so 15x a disappointing year still gets us to our $45 goal!