Questions? Call us! 1-877-882-5867
Faltering Friday – Will Oil Drag the Markets Down in August?
Will the last short seller please turn out the lights?
According to S3 Analytics, Bets against the SPDR S&P 500 (SPY), the largest ETF tracking the broad index, fell to $38.9Bn last week, the lowest level of short interest since May, 2013. The same thing is going on in hedge funds as we're well below 2013 levels in short funds – people have simply given up on the idea that this market is going to go down – and that's probably the best time to short it!
In our Portfolio Reviews this week, we have been pressing our hedges by using about 1/4 of the money we have made on our longs, simply trying to lock in our gains as we certainly don't expect the market to make 4-7% every month – that would be silly, right? These days, you have to wonder as the S&P is up 25% from the mid-point (not the lows) of 2015 and early 2016 (2,000) yet, as I noted in yesterday's Live Trading Webinar (Members Only) the earnings of the components of the S&P are not matching those gains at all:
Apple (AAPL) is the top component of the S&P. With an almost $800Bn market cap, it makes up 3.7% of the index. In 2015 they had $233Bn in sales and made $53Bn, last year they had $215Bn in sales and made $45Bn and this year they are looking for $220Bn in sales and $46Bn in profit yet AAPL is trading 60 points higher (66.6%) than it was at the beginning of last year (after 2015 earnings were reported). What has AAPL actually done to justify a 66% gain? Mostly, it was drastically undervalued but, other than that – it has added no profits to the overall S&P. In fact, it has subtracted them!
AAPL is also the largest Dow component and $1 in share price is 8.5 Dow points (yes, it's an idiotic system). So AAPL alone is responsible for 510 points (12.5%) out of the Dow's 4,100 point run from 17,500 (23%). Now I love AAPL, it was our Stock of the Year in 2013, 2014 and 2015 (this year it is WPM), so I'm fine with their value now, it was simply too cheap before. By the way, we make…
And, if you think your own health care bill won't rise quite a lot more than $286.66 without Obamacare protections, then you are way too far down the rabbit hole to be saved. The repeal-only act will increase premiums for those who hold plans, according to the CBO. The office estimates that "
You'll get nothing and like it!
I'm back!
JPM missed, WFC missed and C beat but 
Wheeee, what a ride!
The cover-up is now incidental to the actual crime and now the question is whether the President knew what his campaign manager, son and son-in-law were doing or if he was completely oblivious, as he now claims. Anything other than completely oblivious is an impeachable offense for Presdident Trump so we'll have to hope it's a coincidence that:
Things are still toppy.
We're still in post-holiday, low-volume…
No, of course they won't.
What we have now, however, is a stock market that is outpacting wage growth, productivity growth, GDP growth – pretty much anything you want to measure growth EXCEPT the growth in income of the Top 1%, who are, of course, the primary owners of stocks. Their salaries have jumped about 25% in the same 5-year period but still, even that staggering amount of money isn't enough to justify the 100% rise in market prices.
You're welcome
It's not because of anything specifically he's saying – just the general loss of confidence people get every time they are reminded this guy is the President of the United States.
What a crazy vacation day.
Why are you here?
Less vacation time is simply another way the Capitalists steal from the workers. As you can see from the chart on the left, more productivity meant more wages until the 70s and, as noted above, that was also the…
Poof!
The VIX briefly spiked up 50% as the market plunged and that sent SVXY (we're short on them) plunging back down but a long way to go to our $105 target in September so we're expecting to see a general up-trend in volatility over the summer – but let's not get ahead of ourselves and see how the quarter ends first.
More of a concern than macro indicators, however, is how much money it's been costing the G20 to prop up the markets for the past decade as Golbal Debt just hit $217 TRILLION…
The banks all passed!
Seems like business as usual in America to me where the Top 10% of the population (30M) hold 75% of the nation's wealth AND make 50% of the income – yet they need tax breaks to get by….
That's why the "Fake (non-Fox) News Media" is under attack, ideas cannot be spread to the masses unless they are the State's ideas – all other opinions must be squashed or invalidated. Just the fact that I'm saying this here will cause this post to be censored at Seeking Alpha and several other places that usually syndicate our Morning Report.
And it's not really about the Top 10%, they are generally poor compared to the Top 1% but they do go along (like any good party Member) because what's good for the Top 1% is usually good for the Top 10% as…
There's a battle going on at the top of the market.
Here we are again, again.
That caused the forecasts for contributions of real Nonresidential Equipment and Inventory Investment to second-quarter real GDP growth to decline from 0.15% and 0.76% to 0.12% and 0.69%, respectively, which knocked the overall forecast futher down the line.
Be careful out there!
Getting back to the Nasdaq, although it seems outrageously high, the tech companies have come on strong with earnings – or at least Apple (AAPL) has, since that one company added $11Bn in profits or 50% of the Nasdaq's gains but 
Wow, what a ride!
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…
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.
Waiting.jpg)
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.
