WAR! All the Latest Bellicosity and Bombast! (SPY,C,FB,DIA,IYT)

WAR! All the Latest Bellicosity and Bombast! (SPY,C,FB,DIA,IYT)   North Korea, friends.  It’s all about North Korea.   What do we mean?   Well, in the first place, you can expect that the news cycle is about to be dominated by that nuclear-tipped maniac, Kim Jong Un and his merry band of scribblers for the next couple of months, as the move toward a full scale erasure of the wicked Northern Kingdom is hatched, plotted and executed.   Already we see signs that, at the very least, the stage is being set for a negotiating turn of the screw the likes of which haven’t been seen since Bold Boy Arnold threatened the entire stickball crew behind P.S. 113 in Brooklyn back in 1931. Anyhow, we note several new developments in the last few days that we believe will provide the backdrop for a temporary top in the markets and subsequent short-term decline.  They’re connected to North Korea, and they’re as follows –   First, the New York Times is reporting on drills to evacuate American citizens from South Korea in the event of a peninsular war.  These are drills that have taken place in the past, to be sure, but…

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The Scent of Ascent (FB,C)

The Scent of Ascent (FB,C)   We’re going to start this week by claiming unapologetically and without any shame that tech stocks – particularly those sexiest FANG names – are about to spear the meat and offer a taste sensation that will be remembered by the longs for years to come. Here’s the setup.   First, earnings season is now underway and expectations for the quarter have been revised drastically lower.  Between storms and their damage and the effect they’ve had on employment and agriculture and tourism and the like, Wall Street believes aggregate earnings numbers will be far inferior to what was initially expected.   And that could bring a blessing.   Should there be upside surprises, we could see a great many stocks move strongly higher.   Indeed, of late, we’ve seen a slow tick higher in anticipation of better numbers, and even fresh, new highs on all three major averages as late as this week.  And that, too, bodes well for the bulls.   We would add that a great many of the biggest tech names are now showing technical signs of impending breakouts, and we’d highlight Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Tyler Technologies (NYSE:TYL), Tesla (NASDAQ:TSLA) and…

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Break Out the New Silverware (SLV,C,FAZ)

Break Out the New Silverware (SLV,C,FAZ) There are those who go through life happy to be around people, cajoling and backslapping, but desperately uncomfortable in their own skin.  And then there are those who prefer solitude, but are quite content with who they are.  The former we often refer to as ‘extroverts’.  Some prefer to call them ‘politicians’.  The latter are labeled ‘introverts’.  But a better term might be ‘wise’.   Now, of course, there’s a broad spectrum of people that fall in between these two extremes, and our point in offering all this today is to get you thinking of roughly where you fall in that space.  Why?  Because it’s more than likely that if you’re from the latter, quieter camp, you’re going to fare better at the trading game than your more boisterous comrades.   And that’s because individuals who possess an inner calm, who know themselves better, as well as their abilities and limitations, who aren’t given to an exaggerated sense of self-worth, who don’t need the affirmations of others, who don’t need the latest model or biggest automobile to prove their worth, who get along just fine being an anonymous presence, and needn’t be laughing and…

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Long Legged Copper Trade (FCX,OSX,DIA,C,FAZ)

Long Legged Copper Trade (FCX,OSX,DIA,C,FAZ) We’re going to give you a number of things to think about today, most notably the prospect of rising interest rates and the effect they’ll have on commodities.  We’re going to mix in a discussion of inflation, too, as that up-and-coming star will likely play an outsized role in just how these two items (rates and commodities) interact. Before we get to it, however, we have to review two open trades, both of which require your attention.   We’ll start with our September 1st initiative, from a letter called Oil Services About to Spill, in which we urged you to purchase the OSX March 135 PUT for $9.80 and sell the DIA March 176 PUT for $6.20 for a total debit of $3.60.   The DIA PUTs finished far out-of-the-money, and as you can see from the chart below, OSX is nowhere near the 135 mark, despite selling off dramatically over the last seven weeks. Unfortunately for us, selling what remains of the option’s time value would only net us a few cents, so we have to look for a different means of recovering our initial debit of $3.60.   And this is how we’re…

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Running Numbers (XLK,IYH,GS,FCX,FAS,C,TLT,HYG,AXP,V,RSX)

We’ve got so many trades come due, there’s little time for anything else!   Let’s get right to it.   First, we’ll take a look at a trade we launched over a year ago, on the 12th of November, 2015, in a letter called The Sachs of a McMorAno.   There, we urged you to dump the commodities and move hard and bullish on the financials, using two stock bigshots to play the trade, Freeport McMoRan (NYSE:FCX) and Goldman Sachs (NYSE:GS).   The trade recommended you purchase the January 2017 FCX 10 PUT for $3.00 and sell the GS January 2017 GS 150 PUT for $4.95.  Total credit on the trade was a fat $1.95.   And now?   Wow!   First of all, we closed out the FCX PUT on the 10th of December, 2015 for a dandy $4.12 and recommended you “leave your GS PUT to rot.”   And so it did.   On the third Friday of January, 2017, the GS PUT took the chloroform, expiring worthless, and giving us a very large $6.07 on absolutely no initial investment.  We’d like to thank the academy, the directorate, the foundation and the makers of Turtle Wax for all…

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Short Sellers Disappeared? Time to Short! (FAZ,C)

We’ve mentioned this a number of times over the last few years, but it bears repeating.  As we move toward the final, bull market, blow-off top, we expect to see price behaviors unlike anything we’ve witnessed historically.   And it will test all our markers, fundamental and technical, and very likely sentiment readings, too, which we fully expect to fly off the charts.   Why?   Because the final stages of a multi-generational bull market are not a rational phenomenon.   By nature, secular bull and bear markets always end with excesses.  But we’re now entering the mother-daddy of all bull market finales.  You will not see another market event like this in your lifetime, and your children and grandchildren may also never know anything like it, either. Prices for financial assets – and very possibly tangibles, as well – will skyrocket in a fashion that confounds even the most carefree analysts.  Needless to say, conservative types, who rely on conventional numbers and traditional measures to signal entry and exit points, will get left behind, folding too early and closing out their best positions, even as those same securities soar stratospherically and deny them an additional 30%, 40% or 50%,…

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Diversions! Distractions! Shell Games and Worry! (C,FAS,TYL)

We’ve got one trade to report before we move to this week’s business, and it goes like this –   The trade was opened on the 30th of June in a letter which featured Tyler Technologies (NYSE:TYL).  It was called July Rant, and it urged you to sell the TYL July 170 CALL for $1.70 and buy the TYL September 170 CALL for $8.70.  Total debit on the trade was $7.00.   Now, it’s never advisable to engage in braggadocio, particularly in this business, where you’re bupkus and spat upon if your last trade was a dud.   Fortunately, we’re specialists in ‘last trade success’ (and equally competent in the braggart department), so we offer you a look at the initiative only as a means to swell briefly like the Rhode Island Reds that we are.   Consider the chart of TYL that we offered at the time of the trade.  Below is an exact replica lifted from July Rant (with special permission from the author…heh, heh…) – Remember it?   At the time, we noted the touch at the top of the trend channel (red circle), and bravely asserted that there would be no more gains in TYL for…

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What the Hell Are You Eating!? (QQQ,C,URBN)

A brief digression in the name of another truth…   We want to suggest to you all – each and every one of you – that you take an hour out of your busy schedule to explore the findings of a woman called Natasha Campbell-McBride, a Russian born neurologist who’s based in Cambridge or Oxford, England, or some such.   Now, it’s not usually our place to comment on what you’re eating or to tell you how to cook the food you buy.  We’re more interested in making you the money you need to do it however the hell you please.   But because the world’s in such a pitiful state, and because most of you and your children suffer from a variety of heinous afflictions that are perfectly avoidable and require a mere change in diet (yes, brother, diet!), we feel more than a passing compunction to offer you the following.   Are you sick and tired and fed up with being sick and tired…   The lady’s done her homework.   Dr. Campbell-McBride has found, among other things, that diet (yes, diet!) is capable of fixing a broad complex of medical and health issues from which we all…

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The Urban Banking Reversal (URBN,C,GLD,FXI)

    Amid all the wailing and round-the-clock attention the damned primaries are getting, you’d think the Super Bowl had been changed to a non-stop, twelve-month televised death match!   But this isn’t sport, friends.   This is your life.   So, in the interest of offering you a brief digression, we offer hereunder a pithy primer on what all the hoopla is really about.   And it goes like this –   If you’re rich and secure and haven’t been overly picked on by government, you vote for Cruz. If you’re poor and secure and haven’t been overly picked on by government, you vote for Hillary. If you’re young and pissed and are looking for someone to hang, you vote for Bernie. If you’re old and pissed and are looking for someone to hang, you vote for Trump.   The Essence of the Times in 62 Words!   A few trades to run down before we begin.   One is simple, the other, not so much.   We’ll start with the easy one.   On February 23rd we opened a trade using the SPDR Gold Trust ETF (NYSE:GLD) in which we bought the March 24th 113.50 PUT for $1.92…

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Jobless claims rise, Citigroup (C) misses expectations and Bank of America (BAC) reports a drop in profits

Markets opened lower on Thursday after jobless rates crept up to a four-month high for the week ending on January 10. The Labor Department said that the number of people filing for unemployment claims increased 19,000 to a total of 316,000. The new data surpassed the 291,000 that economists’ were projecting. The previous week’s information was upwardly revised to show 3,000 more claims than originally posted. The more stable data, the four-week moving average, was up by 6,750 to 298,000. This number takes the large weekly swings out of the equation. Over the past four and a half months the jobless rate has remained below the 300,000 level, which is tied to a strengthening labor market. Brian Jones, a senior U.S. economist at Societe Generale, said, “It happens at the beginning of every calendar quarter and the beginning of every year, so it’s difficult to seasonally adjust at this time. People are finding work. The labor market is fine.” Shares of Citigroup Inc. (C) were trading lower after the company reported a drop in profits in their fourth-quarter results. The company largely attributed the lower numbers to a charge of $3.5 billion to settle legal claims and restructuring charges. Net income…

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