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Thrilling Thursday – Nasdaq Makes New Highs, Ethereum Flash Crashes
Wow, what a ride!
The #2 Crypto-currency, Ethereum had a bit of a flash crash yesterday, trading as low as 0.10 from the high of the day at $317 as a single seller tried to sell $30M worth in what is really an illiquid market. Even after the first wave reversed, a second wave took the currency down to $130 on even heavier volume than the first, forcing the main exchange, Coinbase, to go offline.
Even though the "Status ICO" (selling program called an "Initial Coin Offering") is over, there are still a huge number of transactions clogging up the network and the only way to get transactions in is to pay huge fees (which most of the exchanges probably don't want to do). Until it clears out, people are going to be missing ENS auctions, unable to withdraw from many wallets and exchanges, etc. As noted by Emansipater, one of Reddit's crypto experts:
"Badly designed ICOs, plus selfish and foolish miners = major delays and maybe even substantial losses for everyone else." Judging by the ensuing flash crash, this was an accurate assessment.
Inexperienced traders on amateur exchanges – what could possibly go wrong?
That's what I like about the Dollar – it hardly ever goes off-line, freezing my assets while it's value goes up and down 99% in a day. Have I mentioned how much I like CASH!!! lately? We certainly have tons of CASH!!! in our 4 Member Portfolios and, as noted in this weekend's Portfolio Review, we're very well-balanced but still tilted a little bit bearish as we simply can't endorse the insane valuations that are driving indexes, especially the Nasdaq, to record highs.
I was on Money Talk last night and we discussed the trade ideas from yesterday's morning Report and I called a bottom on Oil (/CL), which was trading at about $42.50 last night after testing $42 during yesterday's carnage. That's well below our $44.50 entry but we're sticking…
We're still using the same chart.
I'm not saying AMZN buying WFM is a mistake – it's a good move for AMZN as it drops their p/e from 198 to 163 so now it only takes 163 years for AMZN to make the $995 you pay for their stock – what a deal! I'm just saying maybe the whole thing is silly and AMZN should be trading at, at most, 50 times earnings which, even if you assume that WFM is a brilliant acquisition and they double profits over the next 24 months to $6Bn, would…
$1,800,221 – that's up 300% from our $600,000 start on our paired portfolios back on 11/26/13.
The trick is to…
And we're done being bullish.
Maybe this time will be different and that's why we have a Long-Term Portfolio that is filled with long-term trades (which are, in turn, hedged by our Short-Term Portfolio) and 
Wheeee, this is fun!
That's it, the bears are dead.
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Wheeeeeee!
Seriously?
What to talk about first?
Fortunately, Congress is on the case with the House having passed a bill to…
BUYBUYBUY?
While we are timid about shorting individual stocks, we are happy to do some hit and run work on the Futures and the trade ideas we had for you in yesterday's PSW Report (
Unemployment is LOW!
Restaurants are doing what every industry will have to do in a tight labor market, they are raising prices and HOPING not to lose too many customers as a trade-off. Unfortunately for restaurants, food at home is getting cheaper at the same time – making the trade-up to a meal out a more and more expensive decision for consumers.
Some regions are more bubbly than others, mostly in Texas and out west (Seattle, Denver, San Francisco) with massive gains since the last bubble burst. Yesterday's read on the Beige Book shows an economy that does not support this kind of housing recovery and just last night, San Francisco Fed President John Williams said the Fed is still on path for 2 more hikes in 2017 with a goal of 3% by 2019.
He's back!
The White House has yet to announce any terminations or staff realignment. Instead, overnight Trump took another swipe at reports that his Twitter privileges may be removed, saying that "the Fake News Media works hard at disparaging & demeaning my use of social media because they don't want America to hear the real story!"
This is gettting interesting, isn't it?
The Futures went flying this morning.
