ICARUS ALTITUDES (IYT,DIA,FAS)

ICARUS ALTITUDES (IYT,DIA,FAS)   Everyone wants to fly.  Everyone wants to be a spaceman and soar to the heavens, free from the shackles of this mortal coil.   Look at Playboy Branson of Virgin Airlines fame, look at Amazon’s Bald Bezos, look at Elon Musk from the Tesla boondoggle, and you’ll understand that the rich and famous no longer believe that flying across the ocean on a private jet is chic.  Today’s vogue travel plan has to involve oxygen tanks and space suits. How it all turns out is anyone’s guess.  Sure, it could be like Apollo 11.  Or, it could end up like another Kim Jong Un flop that blows up as it leaves the cold dark earth.  We all remember what happened to the Space Shuttle Challenger.  That one never even made it into the bleak reaches of the final frontier.  And that was NASA.   The reason for our jaunt today into the ether is a nagging feeling that the transport stocks have simply gone lunar.  A look at the latest price action (below) shows a wonderful rise that has the bulls all a’twitter and the possibility of an overbought signal arriving any day now.   That’s…

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Financial Two-Timer (FAS,DBC,OSX)

Financial Two-Timer (FAS,DBC,OSX)   You won’t see this talked about too much anywhere else, but we feel it’s worthy of your attention.   On Tuesday afternoon, Transportation stocks logged new, all-time record highs, with the Dow Jones Transportation Average reaching 9795 intraday.  Yesterday it tacked on a further gain.   As we’ve pointed out numerous times, we’re not whistling Dixie when we say this is news.  There’s no question about it.   For as Dow Theory tells us, when the averages are rising in tandem to new highs, we have what’s termed a ‘bullish confirmation’.  There have been six such instances of that this year, and as the chart below shows, that’s exactly what Tuesday’s action again achieved.   Have a look – This is the last six months of the two bellwether indexes charted against each other.   The Industrials have been making successive new highs all year, never going more than a few weeks without triggering the confetti.  The Transports’ celebrations, by contrast, have been less regular.  Their last major high was registered in mid-July, and after some steep losses thereafter, they only managed this week to pull ahead of their former championship mark.   But a win…

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President Hope (FAS)

President Hope (FAS)   Let’s run it down…   Stocks took off with the conclusion of campaigning last November and haven’t looked back.  We have new record highs on at least one of the indices almost daily, and despite a slightly less enthusiastic slope over the last few months, the rise continues.   And that has led many to ask if there’s more to come.   Why?   Well, the gains themselves notwithstanding (they’ve been extraordinary and almost unprecedented), traders and analysts have led us to believe that the surge higher was predicated on the policies of the incoming president, that included, among other things, significant infrastructure spending, a massive tax reform package, and a repeal of the Affordable Care Act.   Lo and behold, though, we’re now approaching a year since the election results were tabulated, and none of these things has happened – nor do they appear likely to pass into law in the foreseeable future!   So what of the stock market?   If it gained on a hope of these items being implemented, shouldn’t it just as quickly nose-dive on realization that they won’t?   Hmm…   On the other hand, what if they didn’t exactly…

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Buy Me a Gift! (TSLA,XLK,FAS)

Buy Me a Gift! (TSLA,XLK,FAS)   There’s nothing more disheartening than having to remind someone it’s your birthday.  Not just anyone, of course, but someone who’s supposed to know and has forgotten.   Why?  Because it puts you in the awkward position of making someone else feel awkward for the purpose of getting something from them. Face it: there are those who will certainly forget, those who you HOPE won’t forget, and those whom you can’t under any circumstances LET forget, because THEY can’t afford to – they’ll feel worse than you if they’re not reminded.   And there the trouble begins…   Here at Normandy – birthday or no – we feel it’s our responsibility to point out the uncomfortable truths that are often overlooked or intentionally ignored by the rest of the newsletter cadre, and to deliver them to your inbox in an upbeat manner, such that you don’t turn us off – heaven forfend! – and go looking elsewhere for more ‘cheerful’ news.   No, no, we say.  The truth may hurt, but a dose of humor certainly helps the medicine go down, as archangel Julie Andrews once put it. The uncomfortable truth that we want to…

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Guy Can’t Stop Shuttin’ Up! (XLK,FAS)

Guy Can’t Stop Shuttin’ Up! (XLK,FAS)   Look around you, and you’ll see – it’s clear – the more that people talk, the bigger trouble they get into.   Is there any doubt?   Consider your own experience.  If you’ve been breathing for more than a few decades on this water-orb, your own life probably provides ample testimony to the fact that you should have just shut up.  You never would have gotten into that mess with your wife/boss/brother/ son/employee/bartender/etc. had you just kept your mouth closed.  Not that there isn’t a time for speaking your mind.  But that’s not the way things usually play out.   When we’re hot, and we want to let that good-for-nothing gut-sucker know it – it’s always the wrong time.  The key to avoiding these sorts of life-changing outbursts is to just zip it and wait.  There will always be an opportunity to explain the issue in a clearheaded, cool manner, and in a way that genuinely gets to the heart of the matter and convinces the lazy booger-boy he was wrong.  But without any heat.   And that’s the way we should always go about things.   It’s certainly the only way to…

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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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Slap-Happy Credit Trade (V, AXP, FAS, HD)

We start today with the dollar, as we believe the case for long term dollar strength is a powerful one.   And that’s not just because the Euro is taking a drubbing after Italy’s latest referendum results.  The Euro will likely see a continued arse-kicking as France, Germany, the Netherlands and other countries begin their move to the political right over the next year.  Elections are expected to significantly weaken establishment parties in those countries in the spring and summer, and with it, support for the very idea of a unified Europe and currency.   That’s all dollar positive, of course, as are current weaknesses in the Japanese Yen and Turkish Lira.  The latest dollar-yen move was, in fact, the biggest in more than twenty years!   As for Turkey, we’ll likely see other Emerging Market nations following that country’s lead into the land of currency weakness, while still other nations, like India, in attempting to enact a cash-free society – with all the pain that entails – will further boost to the U.S. Dollar.  There’s nothing like telling people that every one of their financial transactions will be monitored by government to give them a hearty desire to hold…

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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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Living on Reds, Vitamin C and Cocaine… (UHAL,FAS,IDU,DIA,AAPL,AMZN)

We’ve mentioned it before and we’ll do it again, because there’s no getting around it.   Most folks are going to be moving in the next few years.   Some by choice.  Some not.   The name we’ve chosen for the phenomenon is ‘The Great Migration’.  Maybe others have used the term, too.  If so, we haven’t seen it.  Either way, it’s coming.   Like all the global upheavals of the last few centuries, including two World Wars and a number of revolutions that spurred massive population transfers from Moscow to Lesotho to Dakkar to Timbuktu, what’s coming will be equally epic.   And don’t believe for a moment that wealth or status is going to save you from it. The pot is already being stirred.  Millions have taken to the roads and high seas in search of a haven from persecution – or to spread their particular brand of it.  Millions more are looking for an easy life where the streets are paved with gold, and (they believe) fast cars and women are available for the taking.   Throw in withering dose of economic upheaval, a break in the traditional geopolitical order, an increasingly aggressive and anti-American diplomatic bloc…

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Rotate Your Money, Pal! (IDU,FAS,HD)

Most people who drive automatic cars are unaware what would happen if, while cruising at highway speed, they threw the transmission into reverse.   Now, we’re not suggesting anyone try this on the way home from work, or even down at the local speedway, but having made the blunder ourselves on one occasion, we can assure you that the resulting action is not what you’d think.   There’s no riotous gear grinding, no thousands of itsy bitsy metal pieces shooting out like bullets onto the road, no screeching/wailing/careening this way and that, a la some late 70’s Burt Reynolds movie.   None of it. The car turns off.   It what?   You heard me.   The car turns off. It goes into some kind of sleep mode.   And here every make and model may be different, but the essence of the matter is that when the car moves from drive to reverse, some sort of ‘save’ button is levered, and the car simply rolls neutral-like toward a stop.   Rev her up and go again!   Our own experience was that a simple turn of the ignition fired up the old Nissan, and we were right back into…

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