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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: Thu, 22 Mar 2018 10:31:51 +0000


Federally Funded Wednesday – S&P About to Retest 2,640 as Fed Withdraws Stimulus

Wed, 21 Mar 2018 12:49:02 +0000

(image) Yawn, are we there yet?

This is the same chart we were using since the beginning of February and, in March, the markets have been full of sound and fury which has signified nothing as all that bluster has us right back where we started, with the S&P 500 finishing yesterday's session at 2,716 – exactly 3 points higher than we were 30 days ago.  

When we did finally break out over the Strong Bounce Line at 2,728, the S&P flew all the way up to 2,800 (3/12 and 3/13) when I said we were going to short the S&P (/ES Futures) back to 2,400 and we hit 2,700 (up $5,000 per contract) on Monday and 2,720 is a weak bounce from that.  My comment on the overall market was:

"I said we plan on deploying more cash when the S&P drops to 2,400, which is 15% down from the current 2,800 but that includes people paying $1,600 for a share of Amazon (AMZN) that generated $4.56 in profit last year for a return of 0.285% – Japanese bond investors laugh at Amazon shareholders!  Come on folks, this is ridiculous – markets can't sustain these kinds of gains."  

Now you know what I meant by that comment – markets can't go up just because – there needs to be real money flowing in and a real economy to sustain it – we have neither of those things.  Yes, the economy is growing, but not fast enough to justify those kinds of market moves and that's why we have our 5% Lines™, especially our Must Hold Levels™ – to remind us where the REAL value is in the markets and that keeps us from losing our heads and chasing ridiculous valuations.  

(image) It also tells us when things are too cheap and, just like there was a mania to buy stocks at sky-high valuations, there's a mania to sell perfectly good stocks like GE (GE), L Brands (LB) or Chipotle (CMG) at fire-sale prices – surprisingly in the midst of the same rally (see our March 12th Top Trade Review for those trade ideas). 

Even now, Amazon (AMZN) added back $41.50 (2.7%) yesterday as it retests $1,600,…

Take It Back Tuesday – Breakdown, What Breakdown?

Tue, 20 Mar 2018 12:35:52 +0000

(image) Well, we know Monday's are meaningless. 

In fact, next Monday is my last official Monday before I retire, at 55, from Mondays.  In five more years I will retire from Fridays too but, for now, I'll just be skipping Mondays – officially, though I'll still write a morning Report and pop in on chat – I'm just not going to commit to being around on Mondays so I can put a bit more time into PSW Investments, our Hedge Fund (Capital Ideas) and, of course, me.  

The only call I made during our Live Member Chat Room yesterday was my 10:14 comment to our Members, saying:

What craziness with FB, down 5.4% now.  /NQ holding 6,950 so far and we're still miles off the lows so it's really not very weak, considering.  More important to watch the S&P around 2,750 as that's the 50 dma it failed and NYSE is falling further away from 13,000 and even below the Must Hold at 12,800 so – NOT GOOD there.  

The Nas still has a very long way to go to catch up to the others on the downside and, since this news has a sweeping effect on many Nas companies and since analysts will only this week begin downgrading based on data concerns – /NQ is still my favorite short below 6,950 with tight stops or 6,975 or back at 7,000 but I can't see that happening.


Those kinds of calls, I will ALWAYS show up for!  What a great way to start the week.  At 1:50, we began playing for the bounces, though it was a rocky road for the first hour:

Looks like we found a


Monday Market Movement – Trump Turmoil Roils Futures

Mon, 19 Mar 2018 12:32:10 +0000

Oops, he did it again.   Our deal leader hit the Twitter this weekend, attacking Meuller and his team summarizing all the Team Trump talking points with the following (1 of 8): Donald J. Trump‏Verified account @realDonaldTrump Mar 17 More The Mueller probe should never have been started in that there was no collusion and there was no crime. It was based on fraudulent activities and a Fake Dossier paid for by Crooked Hillary and the DNC, and improperly used in FISA COURT for surveillance of my campaign. WITCH HUNT! That came after Trump opened the doors for every lawyer in America to request a retrial for anyone who was ever convicted by the FBI: …[...]

TGIF – Closing out a Weak Week for the Markets

Fri, 16 Mar 2018 10:23:53 +0000

Not just a weak week but a weak 45 days since February. After testing our 30% line on the S&P 500 at 2,860 at the end of January, we plunged down to our 20% line at 2,640 in early Feb and now, 5 weeks later, we have struggled to hold the 25% line, which has now become the 50-day moving average as well at 2,750. The annotation on the chart is not our 5% Rule™ but a simply Fibonacci retracement and it shows you what a cleanly technical move the market is making.  That, in turn, indicates that the majority of this trading is being done by robots and those robots are not trading with emotion or enthusiasm – they are just trading their pre-programmed ranges and it won't take much of a change of human hearts to send the whole thing crashing back down another 10% from here.   I told CNBC in Japan earlier this week that my number one Global concern was a Trade War and now, in addition to steel and washing machine tariffs, we (and NATO) are sanctioning Russia and Russia is retaliating against us and now Trump is readying "sweeping tariffs and investment restrictions on China" – this is what a trade war is folks – no one declares it, it just happens step by diplomatic step.  Suddenly, among Conservatives, "Globalism" and "Globalists" have become bad words, words used to describe their enemies the way they used to say "Communist" and "Socialist".  These are very dangerous times, folks. This myopic, anti-Progressive, anti-progress, protectionist view of the World comes right out of the early 1900s and in fact, the first "America First" Committe was formed as an attempt to keep the US from "meddling" in World War II and was "characterized by anti-semitic and pro-fascist rhetoric."  Trump's form of Fascism isn't anti-semetic yet, just anti-Muslim and anti-Mexican and anti-African and anti-Poor so, as long as you aren't one of THOSE – you're good – for now.   Hoover's America First protectionism and tariffs landed us in the Great Depression and Hoover, like Trump, literally promised his base "A Chicken for…[...]