Summertime Blues (GS)

Summertime Blues (GS)   OK, so it was the Fourth of July, and a lot of folk took leave from the markets, but does that really explain it? We’re talking about a significant decline in trading volume that occurred at the end of last week amidst a market rise that now, on second glance, is looking wafer thin.   Oh…?   Yes, a great number of the leaders advanced, including the FAANG crowd and their associated partners in crime, Microsoft, Nvidia, Qualcomm and Cisco, among others – and Facebook even logged an all-time closing high.  But as mentioned, it looks more and more like those big names are churning, with a number moving straight sideways on diminishing activity.   Have a look – So what’s it all mean?   Time will tell, of course, but it appears we’re preparing for a summertime doldrum to set in before earnings season, a kind of “sell in July before we head to the sky” phenomenon.   So there’s more “bull” to come?   Yes, we haven’t given up on the bull market yet.  We hold that there’s a ways to climb before sentiment levels are truly slap-happy, and the majority of the country…

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Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)

Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)   The local authorities in my city have just notified me that my newborn son’s name is  not acceptable to them, and that I’m going to have to change it.   If ever there were a case of government overreach, this is it.   They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.   If, of course, the judge agrees. In this day and I age, there’s no shortage of asininity in the world.  I can be a Satanist.  I can have a sex reassignment.  I can purchase and cohabit with a robot.  But I can’t call my kid what I want to call him?!   What the hell is going on!?   People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.   That’s right, Dander.   My wife’s great uncle from Denmark, who passed away nearly…

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NORMANDY’s North Korean Missile Defense Issue (BUD,GS)

NORMANDY’s North Korean Missile Defense Issue (BUD,GS)   Now, the United States is a powerful nation, certainly if one measures power in terms of military hardware and training.  Whether and when to use that power is a separate question that we’re not going to address here.   What we would like to consider today is a potential conflict with North Korea and the trading possibilities that develop from it.  As crass as that may sound, it happens to be our job, and if stocks are going to move either before or after that eventuality, paying subscribers want to know. Investing is about making money.  It has nothing to do with raising children properly or feeding stray cats, both of which are yeoman endeavors. And both of which can be successfully accomplished by rich and poor alike.   But our goal here is to make money, and our trigger finger is on the trade button as the tensions ratchet higher and the possibility of something both unexpected and explosive draws nearer.   EMP – What the Experts Most Fear   In the last few days, we’ve seen the North Koreans threaten Guam with missiles and President Trump offering Pyongyang “Fire and…

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The CAT Came Back (CAT,GS,DIA,IYT)

The CAT Came Back (CAT,GS,DIA,IYT)   It’s not easy to measure the impact geo-political events will have on markets.  Indeed, most headline-grabbing happenings – including live fire incidents between sovereign nations – end up having a negligible effect on securities prices.   That said, if the fear that a major conflagration might erupt captures traders’ imaginations, then nothing will stop even the coldest hands from divesting themselves of everything in their portfolios save cold, hard cash. The current developing conflict in the Persian Gulf between Qatar, on the one side, and a group of powerful Arab nations on the other (including Saudi Arabia, Jordan, UAE and Egypt), has an ominous ring to it, and no one should believe that because of a shared language or religion, these nations would be loathe to engage in open conflict with one another.   Arab civil wars have been as plentiful as they’ve been deadly, as the current conflict in Syria makes abundantly clear.   But never before have we seen such a potency of firepower available to all sides as we do in the current crisis.  Nor have we seen such clearly drawn alliances as we now do.  All of which leads us…

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THE DREADFUL ANXIETY PANIC SHOW! (UIS,GS)

THE DREADFUL ANXIETY PANIC SHOW! (UIS,GS)   We’ve commented several times in this space on the inglorious use of sedatives and anti-depressants that has overtaken such an alarmingly large segment of our population.   At last count, we reported that the U.S. was the global leader in prescribing such medications, and the stats still bear it out.   Have a look – We can understand the melancholy-stricken Arctic Isle of Ice requiring drugs (now in second place, behind us); heck, the darned place is pitch black for most of the year.  And sunlight, we know, is a requisite component of good mental health.   But the U.S.?   There are a great many reasons to account for the overwhelming number of pill popping, nervous nellies in this country, but that’s maybe less worrisome than the accelerating rate at which that number is growing.   Consider – over the last twenty years, the number of Americans being prescribed antidepressants has jumped by 500%!  In fact, no other type of drug is more widely dispensed.   And if that weren’t alarming enough, things may now be taking a turn for the outright dreadful.   Security Sinkhole!   News from Unisys (NYSE:UIS), one…

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How You Feelin’? (HYG,GS,GM)

It’s rare that we see the sun shining so brightly in the middle of February.   For stocks, that is.   In fact, can you name a time in the last ten years when a) we’d reached all-time highs in the indexes, b) consumer confidence levels were this robust, c) institutional investors were all-in, d) business confidence and homebuilder sentiment looked so rosy, e) emerging markets, like a horde of thunderous elephants, had just broken higher after eighteen months in the doldrums, and f) a stack of S&P 500 firms (36 of them – see below) just cracked through resistance into record territory?   It would be hard. Does that mean we’re living in the best of all worlds?  That the country and planet have turned a corner and are headed toward a gold tower utopia that will make all of us bottom feeders rich beyond our wildest imaginings? It’s more likely there’s something else at work here, and if you’ll permit us a Biblical allusion, we’ll offer it up thus –   “Pride comes before a fall.”   It was stated by King Solomon some three thousand years ago, and as he’s counted among the wisest of men, let’s…

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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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Commodity Resurrection (KOL,GLD,GS,XLP,XLF)

Commodity Resurrection (KOL,GLD,GS,XLP,XLF)   The process has taken a while to unfold and may require another few weeks to gather momentum, but there’s no longer any doubt.   Grab some more popcorn and licorice.  The commodity horror show is winding to a close. Before we get there, however, we have three trades to close out, with a nice, net take-home for the trio.   Let’s start with our October 11th initiative from a letter called Multiples, Expanding Multiples and the Energy Spectrum.  In that missive we recommended you buy one KOL January 12 PUT for $0.90 and sell one KOL January 12 CALL for $0.85.  Total debit on the trade was $0.05.   Unfortunately, the dang thing is not moving according to the ‘Normandy Will’ and we’re therefore forced to close it out for what may end up being a loss.  We emphasize the ‘may’, because anything can happen in a week in this market, and by Friday’s expiry we could, in fact, see a profit.   That being said, the short CALL is now trading for $1.25, and we’re forced to buy it back in case the stock moves any higher and puts us into a willy of a…

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Becoming an Independent Equity Trader – I (GS)

Becoming an Independent Equity Trader – I (GS2) While the advantages of a life of financial independence cannot be gainsaid by anyone, there are certainly ‘headwinds’ that anyone who aspires to such a lifestyle should be aware of.  Indeed, folks who aspire to any sort of independence – be it energy or nutritive or potable independence – should be aware that they’re likely to encounter someone in some government office somewhere who will take umbrage at the very gall involved in not wanting to be reliant on their political overlords.   There are countless examples.   Not so long ago we read a story of a family whose wood stove was rendered illegal by county officials who insisted that the family be connected to an electric source for their heat and electricity needs.  There could be no ‘going it alone’ – no warming thyself with a bit of burning wood when temperatures dip toward freezing.   Oh no.  That may be fine for campers at government approved tent sites.  Or if you’re lost in the woods and have no other choice, well, maybe…   But the powers that be will not abide someone – anyone – being warm in their…

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Now Underway: Massive Market Fake-out! (GLD,GS)

It’s ridiculous.   Could it get any more ridiculous?   Maybe.   But if it does, we’re going to have to throw in the towel and admit that the tools we’ve grown used to employing over the last several decades are simply no longer of any value.   It will be a sad day, indeed – if it ever comes to that. We’re talking about the exaggerated lift we’ve seen in quite a number of stocks since the election of Donald Trump as president.  The indexes have taken off higher in a manner that continues to astound even the most veteran observers.   Take for example just two stocks – the Dow Jones Transportation Index (DJTA) and global banking and brokerage giant Goldman Sachs Inc. (NYSE:GS).   We’ll start with the trannies.   Here’s the chart – You can see that the rise has taken the index well into overbought territory (in green), according to that helpful indicator known as the Relative Strength Index (RSI).  Again, whether this tool continues to serve as it has in the past is becoming a greater mystery by the day.  For while it’s not unheard-of to get extended overbought readings such as these, the…

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