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Phil's Stock World



Daily stock picks and option trades, market analysis, and investing strategies for investors and traders of all types.



Last Build Date: Mon, 24 Apr 2017 12:00:32 +0000

 



Monday Madness – Le Pen Victory Leads to All-Time Highs

Mon, 24 Apr 2017 09:37:41 +0000

Marine Le Pen is still in the running. That was supposed to be a disaster but, in fact, she is polling so far behind her remaining opponent, Emmanuel Macron, that Europe has decided not to worry about the Far Right taking over France and the Euro and the European markets are staging a massive rally this morning. As of 5am (I have to be in NYC today for the Nasdaq open), the French markets are up 4.3% with Italy right behind at 3.8%, Spain 3.4%, Germany 2.75% and even the UK, who already elected to leave the madness far behind, are up 1.8%: The Euro has blasted 1.5% higher, sending the Dollar down 1%, back to 98.90 (where we're long /DX as that's silly) and the US Futures are up 1% so far, but that's woefully behind the reaction the European equities are showing.  Fortunately, on Thursday, in our Live Member Chat Room, we hedged the upside by going long Japan's Nikkei, saying: Nikkei (/NKD) is now the laggard to the upside and also benefits from a rising Dollar so 18,600 is a good long line for them.  As you can see, the Nikkei popped 400 points for us over the weekend, yielding gains of $2,000 per contract and outperforming the Dow, which also pays $5 per point, by 100%.  Fortunately, we took the short money and ran mid-day Friday and our portfolio adjustments left us less bearish than we had been (and we went long on Oil (/CL $50), Silver (/SI $17.80) and Coffee (/KC $133), so we'll see how they perform in this rally as well. Not that anyone cares about actual news but Israel bombed a weapons depot in Southern Syria in retaliation for a mortar attack from Syria upon the Golan Heights on Friday.  That's the kind of news that used to send the markets lower but I guess war in the Middle East is the least of our worries when Donald Trump and Kim Jong Un both have their fingers on nuclear buttons… allowfullscreen="" frameborder="0" height="360" src="https://www.youtube.com/embed/JlPfcC_aEoY?ecver=1" width="640"> And,…[...]



TGIF – Lower Taxes and “Better” Health Care Leave Us at Highs

Fri, 21 Apr 2017 12:40:51 +0000

(image) More and more promises.

Our man Mnuchin yesterday gave the markets a huge lift by claiming "we're pretty close to bringing forward major tax reform" and the markets went crazy but he also said that by "soon" he meant before the end of the year. That then is a really stupid reason for the markets to rally since they already rallied on it being done in Trump's first 100 days (this is day 90) but, apparently, you can cry "wolf" as often as you want and this market will rally to your cause.

Also promised yesterday was swift approval of the TrumpDon'tCare Health Plan (Part II) and this one is much more horrific than the last one as they now have a TABLE OF DOOM!!! which has surcharges for pre-existing conditions like PREGNANCY, which will set you back an additional $17,320 if you or one of your family members is prone to such things.  I wish I were joking but no, that's actually the cost for pregnancy with "no or minor complications" – complications are extra:

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And this analysis does not account for surcharges as a result of individuals’ previous health conditions. Scarce data exists on pre-ACA rate ups, but insurers raised premiums for individuals based on health history, not just current health status. Without pre-existing condition protections, cancer survivors now free of the disease or patients who underwent successful surgery years ago could find themselves facing significant surcharges as well.

As we've noted before, without "saving" $1Tn on health care costs, Trump can't get $1Tn worth of tax breaks for himself and his Billionaire buddies so they have to slash insurance and they do so by passing the costs on to you, the people who need the insurance. But only if you get sick so, if you're not sick – don't worry about it, right?  That's the logic by which the Trump Administration is going to have you, in the Bottom 99%, hand $1Tn to the people in the Top 1%. 

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This is really insane, folks, this will not make America great, this will make Americans poor while a select few become incredibly
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Thoughtful Thursday – Markets at a Crossroads

Thu, 20 Apr 2017 12:31:36 +0000

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"I went down to the crossroads, fell down on my knees.
Down to the crossroads, fell down on my knees.
I'm standin' at the crossroad, babe, I believe I'm sinking down." – Cream

Earnings are simply not that exciting.

The growth in earnings was SUPPOSED to come from the Financials and the Energy Sector and we've gotten so-so reports from the Financial Majors and oil just collapsed to $50.50 yesterday (a profit of $2,500 per contract for those of you who followed our morning call to short at $53!) and that can't be great for Q2 profits if we stay down here, can it?

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We've been telling you for years what a complete and utter scam the oil market is and knowing it's a scam is the secret to our success.  Today is the last trading day for the May contracts and they still have 25M barrels of fake, Fake, FAKE!!! open orders to get rid of – down 100,000, 1,000-barrel contracts (80%) since Tuesday's post and, lo and behold – June is up 55,000 contracts (that are also FAKE) while the other 45,000 fake orders have been distributed across longer months – in order to fake that demand down the road as well.

(image) Since we KNOW the trading is FAKE!!!, we KNEW they had to get rid of over 100,000 May orders in 2 days and we knew that would put pressure on oil and that made a good short – it's not very complicated and we do it ALL THE TIME because, although it's a total scam – it's a very predictable one…

After today, however, we will be flipping long on oil and, in yesterday's Live Trading Webinar, we identified a great long position on the Oil ETF (USO), using July call options and, of course, we'll be looking for opportunities to go long on oil in the Futures (/CL), using our brand new oil trading range chart.  Oil will be pumped back to $55-60 into July (and then we'll go short…
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Will We Hold It Wednesday – Nasdaq 5,400 Edition

Wed, 19 Apr 2017 12:32:53 +0000

(image) 5,440 was our line in the sand.

Since March 21st we've been using that line to short the Nasdaq Futures (/NQ) as a move above that line was in no way justified without some real improvements in earnings and now, with earnings season upon us, we're still not seeing evidence yet that the market should be breaking higher.  

In that same 3/21 post, we had 11,550 on the broader NYSE and now the NYSE is at 11,375 – down 175 (1.5%) while the /NQ is back at 5,415 this morning.  Our Long-Term Portfolio was up 148.9% that morning and, as of yesterday's close, we're at +162%, gaining $65,402 in less than a month so we certainly aren't complaining about the extended rally and, as I said at the time, BALANCE is key and we have been using some of those profits to bulk up our hedges into earnings.

Aside from being long on the Nasdaq Ultra-Short ETF (SQQQ), we also have shorts on Nasdaq leaders Amazon (AMZN) and Tesla (TSLA) and neither one of those are doing well at the moment as more and more money has been pouring into the leading stocks while the rest of the Nasdaq has been selling off.  Propping up the index leaders while selling the rest keeps the "dumb money" flowing into the Nasdaq while the "smart money" heads for the exits – leaving the dumb money to hold the bag.

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The Chaikin Money Flow (CMF) is an oscillator derived from the Accumulation/Distribution Line. CMF values are calculated by adding all the A/D line values for the period and dividing this by the total volume for the period.  When there is strong buying pressure with high volume, this pushes the indicator higher and strong selling pressure with reduced volume pushes the indicator lower. The Accumulation/ Distribution line either reaffirms the trend or gives a warning that the trend is about to change direction. 

We had massive inflows into the markets since the election and especially since the beginning of the year but there was a drastic turn in mid-March and money was actually flowing out of the market last week.  Seems to me people are getting nervous and the VIX confirms this – the only thing
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