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Weakening Wednesday – Powell’s Testimony Doesn’t Really Help
That's what Robert Reich calls the confusion and bewilderment Americans feel when listening to the President but the same can be said for our New Federal Reserve Chariman, Jerome Powell, who testified before the Senate yesterday and will testify again tomorrow without actually saying anything at all but, like the parable of the blind men feeling an elephant – everyone will be able to draw a conclusion about what he said – even if those conclusions are diametrically opposed to each other.
CNBC says "Powell backs more rate hikes as economy growing "considerably stronger"" while Market Watch says Treasury yeilds are heading lower on doveish testimony and CBS says "Jay Powell shrugs off trade worries, expects rates to keep rising" and Bloomberg says "Powell's 'For Now' Caveat a Sign Fed Rate Hikes Not on Autopilot." So Jerome Powell, like the President, is all things to all people – whatever you want to think he said – he kind of said it.
Is that really what we want in a Fed Chairman? Why is our monetary policy a closely guarded secret? There was, briefly, a movement to make the Fed more transparent and have them set firm tartgets for actions well ahead of time but investment banks can't make money if EVERYONE know what the Fed is going to do – who would they be able to bet against with their inside information?
It doesn't get more inside than Goldman Sachs, of course, who have alumni like Neel Kashkari, Stephen Friedman, Bill Dudly, Patrick Harker and Robert Kaplan. In fact, there are 12 GS Alumni currently on the Fed Board (not to mention Carney heading the Bank of England, and, of course Draghi at the ECB) and Goldman was even fined $50M after one of it's emploees was caught obtaining regulatory documents from former collegues at the NY Fed but don't worry, no one has been caught since! Treasury Secretary Steve Mnuchin is also a former GS partner.
And, of course, a few Trillion Dollars worth of our National Debt (which you and your children owe) was accrued by the Fed (who still have $4.5Tn worth of debt on their balance sheet) bailing out Goldman and other…
Wheeeee!
President Trump is meeting his handler this morning.
21%.
As I was saying, as an investor, you are getting your $25 worth from an earnings perspective as it's still 20x earnings but, consider that last year, this company had $4Bn in cash on the $20Bn valuation (or cash and no debt) and now it does not. Wasn't the OPPORTUNITY to use that $4Bn to grow the business part of what made the company worth 20x earnings in the first place. Now that opportunity is lost and the company is what it is at $25/share with MUCH LESS possibility of growth down the road as it WASTED 25% of it's market cap buying back it's own stock!
88 to 11.
The NATO talks have been well summed up in this one image of Trump looking in the opposite direction of everyone else in the photo 
None of the above as it turns out it was simply the President, already bored with meeting with his former allies, was looking forward to heading off to…
66.6 Thousand.
It's Monday so we must be up in the Futures, right?
Well, Trump has started World War III.
2,728 once again!
The Chinese markets, of course, are falling off a cliff, like they did in 2015, when our markets also ignored them, until 3 months later, when the S&P dropped 12% from 2,100 to 1,850. Maybe this time will be different – maybe China doesn't matter, maybe Trade Wars can be won, maybe Trump is a genius and his policies will all work – even though they seem more like they are going to bankrupt us at the momnet. Hope can spring eternal but that doesn't make me want to bet on it!
In fact, speaking of manipulation, you can see from the EIA Report last week that these bastards EXPORTED 3,088,000 barrels of Refined Products (gasoline) PER DAY last week – effectively stealing 21.6 MILLION barrels from Americans and creating an artificial shortage in this country to drive up prices – WHERE IS TRUMP ON THAT???
Trade Wars are heating up!
Imagine how embarassing it is when your elected leader goes off on factless tirades launching baseless accusations at supposed allies and engaging in policies that are nothing but detrimental to the Global Economy… We are used to having Presidents who stayed awake in school or at least learned something about the World along the way to the Presidency – being governed by effectively a selfish, clueless 5 year-old is a new experience for all of us. Too bad it has real-life repercussions.
Wheeee! That was exciting!
According to the Financial Times
First of all – 
Now what has President Trump done?
Did you manage to make it through that without laughing? Well, that's the situation we have now, unchecked power in the hands of Donald Trump and today he's using it to suspend due process. Of course, it's only being used against immigrants at the moment but that's kind of the point of that famous poem by Pastor Niemoller about the Holocost:
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The Dow is down 1% for the year so up 1% (250 points to 24,750) is also very important to make. Meanwhile, as you can see from the chart above, the Nasdaq is still up 12% for the year – though we made a lovely $5,535 on Wednesday's short position (
Coming back or just bouncing?
Wheeeeeeee!!!
Seriously people, let's step back for a second to consider that CHINA has just accused the US of BLACKMAIL and of violating International Laws and undermining diplomacy – all in one paragraph! President Trump is undoing 70 years of hard-faught diplomatic steps that have given us 70 years of relative peace and prosperity. Who actually benefits from Trump single-handedly upending the World Order?
$817,961!
As you know, 
It's Fed day!
I remember working in the late 70s and early 80s when it was downright insulting if you didn't get a 5% annual raise just for doing your job 10% was fairly normal for doing a good job and when you took a job that started at $25,000, you fully expected to be making $50,000 in less than 5 years. That seems like a fantasy these days as it's been decades since the workers have been given a fair share of the profits.
This is good news.
Meanwhile, the Amazon (AMZN) and Apple (AAPL) driven Nasdaq is up 30 points (0.42%) since last Wedneday and we're back at our shorting line at 7,200 on the 
Of course the market did gain about 140% between April of 1999 and March of 2000 so it's not like it can't possibly happen. Then it lost 80% over the next 8 months but let's not dwell on the negatives, right? Like now,…
Thank goodness!
Crypto currencies are also having a doomsday as BitCoin falls below $7,000 as a South Korean Coin Excahange was hacked over the weekend. See, this is why we have BANKS and Government-backed currencies – there's a massive system in place that insures against loss and theft of your US Dollars. We put that in place after years of the exact kind of random losses, robberies and devaluations associated with old monetary systems. Crypto currencies are sure making things great again – for bank robbers!
The consequences of the U.S. driving away allies, even if it wins short-term trade concessions, could do lasting damage to the strength of America’s coalition (see "
WOW!!!!
I suppose if we're going to learn to accept valuations in the Trillions, we should start thinking about Corporations more like countries or maybe we should just start trading countries – it's a work in progress – anyone want to go long on North Korea at $17.4Bn? With 25M people, that's just $696 per person – seems like a bargain compared to South Korea, which is "valued" at $1.7Tn for just 50M people so $34,000 per person's share. Life is good below the 38th Parallel!
Good morning HomeSec!
And we're already being Trumped for questioning this massive attack on freedom of the press as the 
How many jobs were created in May?
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We had a lot of fun yesterday with our index shorts. In yesterday's PSW Morning…
Meanwhile, it only takes 10 companies to make up 20% of the S&P 500 with Apple (AAPL) coming in at 4.1% these days. Apple has boosted the Tech Sector to the top of the S&P with 26% of the market cap, followed by Financials at 15%, Health Care at 14%, Consumer Discretionary 13% and Industrials at 10%. The Energy Sector, which once led the index, has fallen to just 6% of the S&P's market capitalization.
At this point, it's very possible that the 5-Star Coalition that controls the biggest voting block in Government will seek to impeach Mattarella and, if that happens, we go from unstable right to the point where the hero is usually sweating over the nuclear bomb with a pair of pliers debating which wire to cut.
Yesterday the market blasted higher on the release of the Fed Minutes, which didn't really say much other than the addition of the word "symmetric" but it was used in regards to INFLATION, not rates. 
Don't say I didn't tell you so…
As earnings season begins to wind down, we're seeing analysts projecting that the 20% pop in earnings caused by the Trump Tax Cuts for Corporations will somehow happen again next year (it is certainly possible that, if the GOP keeps the House and Senate, they may pass another round of cuts for the Top 1% – crazy as that may seem). Edward Yardeni of Yardeni research asks "
Same old, same old…
WTF?
We're thrilled to have a nice little pullback and we even bought a couple of stocks yesterday but, on the whole, we're even more thrilled to be mainly in CASH!!! during this period of market uncertainty. 
The market is so predictable.
The Dow is also having fun around it's own 20% line but, in this case, it's been unable to get over the line (25,200). 26,250 is the 25% line and that's 1,050 away but we'll call it 1,000 so we can call the bounce lines 200 points and that makes our up and down range from 25,200: 24,800, 25,000, 25,400 and 25,600 so we can chart that like this:
Speaking of reversing: .jpg)
What a week it has been!
I don't want to get to excited but:
Having 15 drinks in front of…
Former President Barack Obama, who rarely comments on his successor, 
If most companies were doing that, I'd be very unhappy as it's often a waste to buy back your own stock but Apple just repatriated $250Bn in cash from overseas and, frankly, they have nothing better to do with their…
Other analysts blasted TSLA as well:
What is fake news?
Europe is closed, Asia is closed.
$134 BILLION!
I didn't make this up – :format(jpeg):mode_rgb():quality(40)/discogs-images/R-9199284-1484689008-8476.png.jpg)
Wow, what a day!
Here come those tears again
Central bankers sounded the alert that a trade war would leave them worrying more about the economic fallout than any boost tariffs would give to inflation. Colombia’s central bank president said a trade war would be "catastrophic," his Paraguayan peer said it would be "bad for everyone," while Japan’s chief described protectionism as "very undesirable." Across the board, 2019 growth forecasts are moving lower while debt is getting quickly out of control.
I am now a Donald Trump fan!
Here we are again!
Wheeee!
As you can see, $67.45 turned out to be the dead to – perhaps BECAUSE we called it but we'll take the win either way and we'll certainly take the $1,560 profit! This morning we stopped out back over $66.50 but we're happy to go back short on 
He's at it again
“The most important thing about a U.S. strike is the potential for Russian casualties as a result of any military activity there,” said Ayham Kamel, head of Middle East and North Africa research at Eurasia Group. “That is where there’s a risk of an escalatory cycle that would be much more meaningful than attacking Assad’s forces.” In March, Valery Gerasimov, chief of Russia’s General Staff, already warned the US that “in the event a threat arises to the lives of our servicemen, the Armed Forces of Russia will take retaliatory measures…
If Trump is smart (debateable), he'll thank Xi and move on – WITHOUT declaring victory. Only by stressing cooperation can we back off the cliff of this Trade War but, of course, the cooperation Xi envisions is essentially Globalization – the very thing the Trump Administration and their…
Don't get fooled by a bounce.
Holy cow!
That was our only official play of the day but it was good for profits of $3,000 per contract so, no need for more, right? We knew 6,650 was going to be resistance (between our weak and strong bounces) and, of course, we also knew Trump was going to continue to attack Amazon (AMZN) and that casts a shadow on the whole tech sector because – if the President of the US can harrass one tech company – what's to stop him from going after others and, with that precident set – what's to stop every World Leader from going after their political business enemies like Trump does?
Tariffs!
“Only polite to reciprocate” is unusually dark and direct. Unlike the U.S. president, who salts his speech with off-the-cuff remarks about foreign policy, Chinese officials don’t usually digress with clever comments. Trump has undone years of hard-fought civility in discourse that was meant to avoid exactly the kind of economic catastrophe he is now causing.
Wheee – what fun!
Well, we survived the Space Debris at least.
Down 1,000 points isn't so bad.
Wheeeeeee, this is fun!
We'll see what sticks into the weekend but patience is the key on that trade as the Saudis are pulling out all the stops to keep the price of oil high as they continue to…
Down 6.9% for the month!
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Until then, we have plenty of longs and plenty of hedges so we just sit back and watch and wait. The US and European markets are closed next Friday (my Birthday, actually Thurs but it's celbrated on Friday this year) and Easter is Sunday and that Monday will be slow and that whole week will be slow, as will the weak before (next week) so not the best time to determine what levels are holding up but a great time to take a break!
What an exciting day.
Meanwhile, as we expected, the market was not too thrilled about the Fed hiking rates and we made some big money in yesterday's Live Trading Webinar (
Yawn, are we there yet?
Oops, he did it again.
Not just a weak week but a weak 45 days since February.
And, of course, they are not buying every stock, mostly their own so it's those big, Top 1% Corporations, 90 of the 9,000 listed companies – the ones who were given $1.5Tn worth of tax breaks by the Trump Administration – that are bringing back the cash they hid overseas to avoid paying taxes under Obama (at no penalty) – and are using it to buy back their own stock to mask the fact that earings are not actually improving by reducing the number of shares those earnings are divided by.
THEN things got really crazy (not Trump crazy, but crazy for normal people) as 
Notice that Russia employs the "Fake News" meme to deflect any facts they don't like – something they train all their operatives to do these days. According to Russia "Crooked UK" is up to their old tricks and we should ignore the poisoning and focus on the investigation – which can't possibly be unbiased if it finds Russia colluded with operatives to kill people on British soil.
Meahwhile, the GDP estimates are in free-fall and no one seems to notice, no one seems to care as the Atlanta Fed has taken their ridiculously optimistic GDP Now forecast down from 5%, which rallied the markets…
Overnight, we lost the “adult in the room”, Gary “Moe” Cohn, as he quit the White House rather than pretend he was in favor of the trade tariffs. I’m sure Cohns everywhere are breathing a sigh of relief that their names won’t go down in history next to Smoots and Hawleys in the annals of poor economic decisions. Speaking of anals – Stormy Daniels is suing Trump – just had to mention that! Meanwhile, in referring to the 1930 Tariff Act, I noticed the full name of the Act was:
Trump wins!
President Trump for life!
Angela Merkel is not a dictator but she just spent the last 6 months since the election forging an alliance that lets her extend here 12-year reign for another term at the head of Germany and de-facto head of Europe. Putin has been in office 5 years longer than her and Xi came to power in 2012 – so he has a long way to go if he wants to match his other Democratically elected peers as the…
Wheeeee!
Wheeee!
As we expected, our Short-Term Portfolio, which was $116,777.50 yesterday morning, jumped to $123,397.50 for a gain of $6,620 as our DIA June $255 puts moved back into the money and SQQQ climbed back over $15 but those trades "only" provide $100,000 and $40,000 worth of protection, respecitively, so it's time to consider the next layer of hedges – just in case this drop doesn't stop at the previous lows.
Wheeee, that was fun!
Best of all, our Long-Term Portfolio finished the day at $551,871 (up 10.4%) which is up $1,008 (0.2%) on a bad day – so we know we're doing something right there while our Short-Term Portfolio, which hedges the LTP, did it's job and gained $6,600 (6.6%) on the market drop so, as we intended, we're very well-hedged for the coming market chop into the month's end. It is ALL about balance in an uncertain market!
Powell speaks!
What we're expecting to hear from Powell is whether the Fed is more worried about overshooting (too loose) or undershooting (too tight) their 2% inflation target (just right) and the nuance will be whether Powell indicates concern about the recent bump in inflation – especially ahead of Thursday's PCE numbers, which are expected to come in hot, around 0.4%, which would pop the Fed's chart from 113.9 to 114.3 and that would be up 2.1% for the year – magic time!
What a fun market this is!
Last time I was on Benzinga, we talked about 
Wheeee, this is fun!
This morning, in an effort to spin the reaction to the Minutes (
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As you can see, we already had 
Is overbought the right price now?
You're welcome
Happy Valentine's Day!
The new budget is here!
But guess what happens when a city is flooded? SALES!!! Paint, hardware, carpets, furniture, Government clean-up contracts worth Billions of Dollars to Trump's donors. Isn't that better than spending Millions to prevent the disaster from happening in the first place?
We're up 300 more points!
Good golly, what a mess!
As long as 2,596 holds, we're willing to have a long on the S&P Futures (
Now this is what I call trading!
Wheeeee, what a ride!
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I love to say "I told you so" – it means I got something right.
Better late than never.
FYI, Wednesday's post was rejected by Seeking Alpha because: "
Wheeee, what a ride!
Finally!
While we can't count on Corporations to spend the cash they bring back in, we can expect the massive stock buyback trend to continue. As you can see from Credit Suisse's chart, the only real buyer of US equities for the past 10 years has been the Corporations themselves – who have engaged in MASSIVE buy-back programs that have lowered the share count of US equites by 20% which has therefore inflated the earnings per share by 20% by simply reducing the number of shares those earnings are divided by.
Can we really go higher?
How low can we go?
Solar-industry leaders said tariffs will slow growth in solar-panel installations and the jobs they create, which are more plentiful than in solar-cell manufacturing, a relatively small industry in the U.S.
Government shudown!
Meanwhile, the last time the markets were this bullish was 1987 and we begain that year with a rally from S&P 250 to S&P 335 in August and then back to 200 (-40%) in October – so a hell of a fun ride that time! More recently though, we were also very enthusiastic in 2015 and there we topped out, also in August, at 2,200 on the S&P and we only fell to 1,850 (-16%) into 2016 so maybe this rally can last into the summer but, if it does, it will be the most overbought, overconfident market ever measured – much healthier to have a small correction now.
Wow, what a week!
Getting back to Gasoline (
Higher, higher!
As we're moving into earnings season, this last leg of the market bubble is being driven by earnings revisions due, mostly, to Trump Tax Breaks but, as we warned about…
Wheeee!
Dow 26,000? Really???
FOMO (Fear of Missing Out) is what drives the markets and, if we are on the way to a Clintonesque 100% additional gain from here (Dow 50,000?), then we'd feel like real idiots missing out on that rally, even if there is "no inflation" – according to the Fed. As you can see from the Relative Strength Indicator – since 1960, we have never been this "strong" in the market and forget the fact that all those peaks ended…
What a great start to the year!
The key to building wealthy over time is CONSISTENCY. Warren Buffett's Berkshire Hathaway has "only" averaged 16% returns but he's been doing it for 50 years, allowing his initial investors to make 10,000 x returns on their invesments.
What pullback?
Wheeeee!
It's been a busy weekend.
Well, we're past 25,000 the Dow and the President is promising 30,000 so we'd better buy more stocks, right?
Clearly the markets are loving it as we made fresh record highs and this morning the Futures are making even fresher, higher records but, as noted above, how long can this keep going on? What has actually changed to justify today's record high?
It's very important to have a Watch List.
In order to become a real investor, you have to break out of your "winning" and "losing" mind-set and that's very difficult because your broker – who wants you to TRADE, not INVEST, gives you a daily scorecard with minute-by-minute updates to encourage you to thing of your portfolio as something that should constantly be fiddled with to improve your "score". They even highlight your losers in red – so they bother you and further encourage you to dump slumping stocks by raising the margin requirements on them – making them even harder to hold onto.
Happy new year!
What an appropriate way to end the year.
Not much is happening.
Aside from the bluffing and luck aspects of the game, winning consistently at poker is just like good portfolio-building, we try to take a consistent series of positive risk/reward positions and manage…
Why are you here?
We can play along by shorting the Nasdaq Futures (
Bubble, what bubble?
Yesterday, the Long Island Iced Tea Corp (LTEA) said they were changing their name to the Long Blockchain Corp or some such nonsense and the stock jumped 346%. For those of you who remember the pet food seller, Pets.com, this is the kind of nonsense you see at the height of a speculative bubble – people just trying to associate themselves with the…
The final Q3 GDP Report is out this morning.
1,500.
It hasn't even been signed yet.
Certainly, we don't want to read the actual bill, because it is one scary document! "The more you read, the more you go, 'Holy crap, what’s this?’” Greg Jenner, a former top tax official in George W. Bush’s Treasury Department, 
The Futures are up again.
One commodity not doing well this winter is chicken wings, with prices down 30% since Football season started and Conservative commenters are blaming NFL protests for spoiling people's appetites but I'd say Republican policies which are destroying the buying power of the Middle Class are having a negative effect on $1/each wings. The same goes for Buffalo Wild Wings (BWLD), who blamed players taking a knee for hurting their business – 
Who says you can't make money in this market?
Yesterday's Fed Statement sent both gold and silver flying higher (and BitCoin lower) and we took the money and ran live, during the Webinar with a $10,000 overall gain on 8 contracts that gained 0.25 each at $50 per penny, per contract (the day's gain is coming of a dip). It's not that we don't still like gold and silver – it's just that making $10,000 in a week is good money – so why risk a reversal? If they don't pull back to give us another entry, then we'll find something else to trade (and we identified several in yesterday's Webinar).
Bubbles, bubbles, everywhere.
See how easy it is to make money in America – we just make everyone rich on a weekly basis – what could possibly go wrong? Two weeks ago, if you bought a BitCoin for $11,200 to exchange for GreenCoins (that's how small cryptos work, they trade in BitCoins) and you waited until they were back at 0.00022 on the 8th, your BitCoin was at $20,000 and you only needed 22.7M GreenCoins for a Premium…
80% overbought.
The Dow had just passed 5,000 at the time and, two years later, it was at 11,700 – up 134% AFTER the Fed Chairman said people were nuts for buying stocks. I don't know for sure if we were right to go to CASH!!! last week but it's not a permanent decision – it's simply something we're doing into the holidays and likely to remain until we see the Q4 earnings and 2018 guidance in January. THEN we will decide which stocks we want to ride for the next 100% of the market rally – if such a thing is coming.
I was going to talk about BitCoin (
We cashed out a few on Friday but kept the 
If I were Vladimir Putin, with half my fortune in oil, I'd be very concerned about that trend and, indeed, Trump is working hard to reverse the trend 
That "change" is now worth a fortune – as BitCoin passes $250Bn in valuation. That's
Like a doctor, we don't know for sure that staying in the market will kill you, we have to rely on our observations and the risk/reward of cashing in vs. staying bullish into 2018. Is the global market more likely to add $5Tn (5%) in the next month or two or is it more likely…
GET OUT!!!
For example, in November of 2016, the total market capitalization of Global Markets was $65Tn. That's about the same as our Global GDP ($80Tn), so not unreasonable. Unfortunately, now it's not reasonable at all as we're about to cross (or may cross this morning) $100Tn. That's up $35Tn (53.8%) in 12 months.
So that, folks, is the correction we are expecting when, at some point, investors come to their senses. Warren Buffett and I think that…
9 MILLION low-income children will lose their health care on December 31st. This is not Obamacare, these are children we, as a country, decided did not deserve to suffer just because their parents committed the mortal sin of being poor. Not that the GOP has forgotten about the parents. 
24,000!
America is great again.
The ENTIRE market cap of the S&P 500 at the 2009 lows was $6Tn and today we are testing $24Tn with just 5 stocks; - FB, AAPL, AMZN, NFLX and GOOGL (FAANG), making up $1Tn. I'm old enough to remember when a Trillion Dollars was considered a lot of money, but not these…
Our Trade of the Year is here!
Now that we've established that I do know how to connect a few dots, I will once again point out that China is only the second-most indebted nation on a debt to GDP basis (
Another day, another record high.
What a rally!
20-50 years.
In the past few years, scientists have identified marine ice-cliff instability as a feedback loop that could kickstart the disintegration of the entire West Antarctic ice sheet this century — much more quickly than previously thought.
Why are you here?
Next week is nonsense.
$450,000,000!
Aren't you glad we're hedged?
If they fail (and God help us all if they don't), Republicans will enter the midterm election year with their message muddled, without a victory on tax reform, and having spent a year's worth of time trying and repeatedly failing to dismantle Obamacare with nothing to show for it but bad headlines.
Speaking of things that aren't ending well: In addtion to Brexit Talks once again breaking down, Europe is a little concerned with "tens of thousands" of White Nationalists marching on Warsaw for the Independence Day Celebration. While the thousands of torches may have had a festive look and while "