Entries by Phil

Friday Thoughts – Did Amazon’s Great Earnings Save the Markets or Doom Them?

Image result for pinky brain take over the world animated gif$134 BILLION! 

That's what Jeff Bezos is worth this morning as Amazon (AMZN) crushed earnings last night with $51Bn in sales for Q1, up 43% ($16Bn) from Q1 last year.  And Q1 is usually AMZN's slowest quarter so we're taking about possibly a $300Bn year, which would make Amazon approximately 1/10th of all US Retail Sales and growing at 43% means we are 7 years away (do the math) from AMZN putting every other retailer out of business.  

Operating income was $1.927Bn, which seems good but not when you consider $3Bn of that $2Bn in profit came from cloud services and the rest of the business lost $1Bn.  In fact, inclusive free cash flow was NEGATIVE $3Bn but let's not cloud the Amazon celebration with ugly facts like those.

I didn't make this up – it's their own slide!  Still, $4Bn of that $3Bn "loss" came from leasing payments (cloud computers are expensive) and they are kind of an asset – until the next generation of computers comes out in 18 months.  One thing Amazon will be doing to close the ga is raising the fees on 100M Prime Members by $20, which will drop another $2Bn to the bottom line but it won't help much if they are burning $3Bn a quarter. 

Speaking of slides, that's what the Retail ETF (XRT) and the rest of retailers are likely to do if Amazon's gains turn out to be Retail's losses.  I just ordered $60 worth of Nespresso pods this morning on Amazon despite the fact I was right in a grocery store yesterday.  Amazon is very good at getting you into the habit of buying things once you let them know what your preference is and now they are delivering things to the trunk of your car if you want!  

We don't have a lot of Retailers in our portfolios and we went over the ones we do like in yesterday's Live Trading Webinar (replay available here).  I imagine we'll see some real bargains popping up over the next couple of weeks and we're still in the middle of the end for Toys R Us and Sears though Toys R Us is more like the end of the end now.  

 

IN PROGRESS

 

 

Thrilling Thursday – Indexes Run Up to the Strong Bounce Lines – Now What?

Image result for meaty beaty big and bouncyWe're right at our bounce targets.  

Dow 24,100, S&P 2,646, Nasdaq 6,575 and Russell 1,557 were our strong bounce lines in yesterday's Report and that's right on the 7,000 line for the Nasdaq Composite we are using as a major "pass/fail" level for the market in general.  A lot of strong earnings from Tech last night ONLY got us to the 7,000 line – so not very impressive so far and I am in favor of shorting the Nasdaq (/NQ) at the 6,600 line with VERY tight stops above that line.  We might get another spectacular failure on any hiccup in earnings this morning.

There's not really any news driving things but we do get a Durable Goods Report at 8:30, Consumer Comfort at 9:45 and the Kansas City Fed Reports at 11 ahead of a 7-year note auction at 1pm in which the US will attempt to borrow $29Bn at less than 3% interest so "THEY" want the market to be lower at 1pm to herd the sheeple into bonds – we'll see how things play out.

If you didn't like where the market was yesterday, all you had to do is walk away for an hour and it would be heading the other way when you got back.  The Dow went from 23,850 at 7:30 to 24,050 at the open to 23,800 at 9:45 to 24,000 at 11 back to 23,850 at noon and then on to 23,950 just after 1pm and back down 50 and then a nice move to 24,100 at 3pm but it was too much, too soon and we fell back 100 points into the close but then, miraculously, in the last 5 minutes, we spiked back up 75 points to engineer a decent close.  If it sounds like total BS, that's because it was – this is a thin, bot-traded market and clearly it's being pushed up whenever the volume is low and then sold off to the suckers who think they are smart for buying the dips. 

As I said on Monday, when the Dow was at 24,450, which is now 300 points from here, we're waiting for the week's and Amazon (AMZN), MSFT (MSFT), Intel (INTC), Starbucks (SBUX) and Bidu (BIDU) get their licks in tonight followed by Exxon (XOM) and Chevron (CVX) tomorrow so, in the very least, we…
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Will We Hold It Wednesday – Nasdaq 7,000 Edition

Wow, what a day!  

Yesterday, in our pre-market Morning Report,  we made a call to short the Nasdaq Futures (/NQ) if they failed to hold 6,700 and fail they did as we got a massive 200-point drop which paid us $20 per point per contract for $4,000 per contract same-day gains on the Futures – you're welcome!   Our oil shorts also did nicely, racking up additional $1,500 per contract gains on the day as we pulled back from $69 to $67.50.  This is why we take Monday's off now – we can make plenty of money on Tuesdays!  

This morning we'll be looking for bounces but failing to hold the weak bounce lines will likely signal more pain ahead and, don't forget, we were already expecting a big move down on Thursday so this may be an early start to a proper 5% correction.  I ran the numbers for our Members in yesterday's Live Chat Room into the close (3:40):

2,685 to 2,620 is 65 points so 13 points is 2,633 (weak), which is right where we failed. 

24,600 to 23,800 is 800 points (wow) but I'll call it 150-point bounces to 23,950 and 24,100:

6,700 failed to 6,475 so 225 gives us 45-point bounces but call them 50 so 6,525 (weak) and 6,575 (strong)


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Testy Tuesday – Nasdaq 6,750 or Bust Edition

Here come those tears again

6,750 is the 25% line on the Nasdaq and we've been here a few times and the bulls were very excited to buy the dip at 6,650, as that's where we popped in early March but, as I noted to our Members in yesterday's Live Chat Room, we're simply repeating a pattern that was supposed to give us an up and down day yesterday that ended flat and today we should be up 30 points on the S&P and tomorrow 25 more and then we crash back to where we started to finish the week.

Can the market really be that programmed?  It will be interesting to see if the news and data actually matter or if we're simply doomed to repeat the behavior we observed from Feb 22nd-28th after two weeks of mirroring the behavior from Feb 5th-21st (see yesterday's morning report).  There's a fine line between being locked in a range and being trapped in a market that is being driven by trading bots.     

When the markets are thinly traded, the Bots do dominate the trading and, if no one has a solid reason to re-program them, then they are going to keep trading the same way, over and over again until someone breaks the cycle.  According to Yahoo, the average volume of the S&P ETF (SPY) is 120M shares a day, but here's how it's been trading for the past week:

Date Open High Low Close* Adj Close** Volume


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Monday Market Movement – No News is Good News

The Futures are up, of course.  

The Futures are always up on Monday morning as it's a low-volume event and "THEY" can start the week off on a good note.  Since lat night, at 6pm, the Dow was up at 24,550, down to 24,350 and now back to 24,450, which is 50-points better than Friday's crappy close so YAY!, I guess.  It's all total BS, of course and I don't even work Mondays anymore (this isn't me, this is PhilBot 3000, my AI work in progress that will take all of your jobs, starting with mine) so it just doesn't matter but, for the sake of having a post – we'll pretend that it does

Both the IMF and the World Bank had meetings this weekend in Washington, DC and the general consensus there was that the Global Economy is good but Debt and Trade Wars risk making it bad again.  Since Debt and Trade Wars are Donald Trump's go-to policy moves – we're probably screwed.  A communique by the IMF’s main advisory committee, released Saturday, represented a ratcheting-up of pessimism since the group’s last semiannual meeting in October.  “I don’t know where the trade dispute is going quite frankly,” Budget Secretary Diokno said in an interview. “President Trump keeps changing his mind.”   

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.

In particular, according to Bloomberg, the IMF is worried that markets might be underestimating the threat of an inflation shock in the U.S., where the Trump administration is increasing fiscal stimulus with the economy at or near full employment. A surge in inflation might force the Federal Reserve to raise interest rates faster than expected, a move that might cause turbulence in emerging market. The fund warned that global public and private debt has reached a record $164 trillion. A spike in interest rates would test the ability of borrowers to refinance
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Trump Tweets Oil Down to $67.50 Giving our Readers $2,000 Per Contract Wins!

I am now a Donald Trump fan!  

Yesterday morning I was interviewed on the Benzinga Pre-Market Show where our trade of the day was to short Oil (/CL) (USO) Futures at $69.50 and, during the day yesterday we got had a nice $1,500 per contract gain as oil dropped to $68 and then, this morning, as oil climbed back to $68.50, where we wanted to short again, our beloved President, Donald J. Trump tweeted out exactly what I had said yesterday afternoon at my Nasdaq interview, with the President saying:

Needless to say we are thrilled, not just with the money but with the President's ability to summarize what we say during a 5-minute interview in a single tweet – THAT'S LEADERSHIP!  Now, if the President would just put me in charge of the Strategic Petroleum Reserve and stake me with the Treasury, we could pay off the National debt in no time buying and selling oil contracts.  

We wouldn't need OPEC to back down if we simply break the NYMEX and we could do that by calling their bluff and promising to sell their fake, Fake, FAKE orders for 223M barrels of oil for May delivery, which we said last Friday would be cancelled or rolled by today and, lo and behold, as of this morning, there are only 26,672 contracts left open for May delivery, representing just 26.6M barrels (90% cancelled) and that will be cut in half today, leaving the US with just 13Mb imported to Cushing at $67.50 per barrel when, earlier this month, we had "orders" for over 500M barrels at $62.50 that were canceled by the criminal NYMEX trading cartel WHO ARE UNDERMINING THE ENERGY SECURITY OF THE UNITED STATES, which happens to be TREASON!  

Well, the orders were not "cancelled" – they "roll" the orders into other months to FAKE demand there as well and this little shell game pushes the price of oil up and up and costs US Consumers Billions of Dollars at the pump every month.  In fact, this month's $5 gain x 20M barrels a day x 30 days is $3Bn we're being screwed out of in April alone.  On the
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Failing Thursday – Rally has a Hard Time Justifying Itself

2,707 on /ES (S&P Futures)

Technically it's bullish but we are sputtering out and I don't see enough good news to sustain us here – even though here is still 170 points (6%) off the January highs and only 150 points (6%) off the Feb and March lows.  So we've hit the lows twice and hit the highs once and now we're struggling at the halfway point?  That doesn't sound very good, does it?  

Apparently, it doesn't sound good to Bond traders, who have are close to inverting the Yield Curve for the first time since 2007, which led to a total melt-down of the Global Economy 18 months later.  The good news is, the markets didn't crash in 2007 – they just flailed along near the highs before completely collapsing.  I tried to warn people then too…

If the barrage of Fedspeak this week is any indication, the persistent flattening is creating a dilemma for officials, who appear intent on gradually tightening policy. St. Louis Fed President James Bullard was the latest to weigh in, saying that central bankers need to debate the yield curve right now, and that it could invert within six months.  “A potential curve inversion should be taken as seriously as always,” Citigroup analysts led by Jabaz Mathai wrote in an April 13 report. “The historical relationship between the curve and implied recession probabilities is highly non-linear: implied probabilities grow very fast when the curve moves into inverted territory.”

A truly inverted curve “is a powerful signal of recessions” that historically has occurred “when the Fed is in a tightening cycle, and markets lose confidence in the economic outlook,” John Williams, the next president of the New York Fed, said Tuesday

I'll be on Benzinga Radio this morning at 8:35 and last time (Feb 23rd) I was on we discussed our GreenCoin (GRE) Trade, which was up to 0.004 at the time, a 10-bagger from where we picked it for them in January and now it's at 0.0098 so almost a penny!  Certainly it's doing a lot better than BitCoin, so we're
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Which Way Wednesday – S&P 2,700 Edition

Here we go again:

As you can see from the chart (click to enlarge) we're still making one of those triangle squeezy thingy pattens but the top of the down wedge is still at our 2,640 line (20% line) and it will be three more weeks of this nonsense (while earnings pour in) until it resolves itself but, with the nose of the triangle lower than where we are now (2,717) – the odds favor the short bet on /ES Futures.

We made a quick $300 per contract yesterday morning from our morning call as /ES fell from 2,700 back to 2,693 (stopping out at 2,694) but then lost $75 per contract trying to play it again as it popped over.  After that, we went to "watch and wait" mode, as planned – and that's where we are this morning, waiting to see which way things break.  There's a Beige Book release by the Fed at 2pm and then Dudley speaks at 3:15 on "Economic Outlook and Monetary Policy."

There's very little going on in the news and not much change in Fundamentals and earnings have been OK this week, with 31 (82%) out of 38 reports showing beats this week.  Of course, that's what we expected early in the season and if this can't lift the S&P back to at least 2,640 then WE'RE DOOMED!!!!  Sure, I think we're doomed anyway but that's only because of the Global Fundamentals and the market is usually pretty good at ignoring that.  

This morning, the Dow (/YM) can be shorted at 24,800, so that's a fun play but 6,850 on the Nasdaq (/NQ) Futures is always one of my favorite shorting lines and we can't argue with the classics – same strategy as yesterday, with tight stops over the lines.  

We have a Live Trading Webinar at 1pm where we'll go over some Futures Trading Techniques as well as reveiwing our 5 Member Portfolios.

 

IN PROGRESS

 

 

2,700 Tuesday – S&P Back at a Milestone We’ve Shorted Before

Here we are again! 

Back in January, the S&P 500 staged an epic rally that took us over the 2,700 line to 2,850 before falling back to 2,700 in early February, when I wrote "10% Tuesday – Market Correction Hits Our Primary Goal"   and "Flailing Thursday – Trouble at 2,700" saying:  

Well, it's been a day and people are already freaking out because we haven't flown back to 2,850 and it's going to be a while before they realize 2,850 shouldn't have happened in the first place and it's more likely that this (2,700) is the top of the range, not the bottom – at least through Q2.  On our Big Chart, 2,640 is the 20% line on the S&P and, even being generous, THAT should be the middle of a range we move 5% up (2,772) and 5% down (2,508) in, so call it 2,500 to 2,800 with 2,650 the middle line.  That's where I think we'll settle once all the dust clears.

As you can see, from the S&P chart using our predicted lines and the Fibonacci series above and below them – everything is proceeding as I have forseen for the past 3 months and now we get to see if earnings season can keep us in the green end of our trading range or not.  Remember, I can only tell you what is going to happen and how to make money playing it (3 months in advance!) – the rest is up to you…

In fact, on Thursday, 2/8, I said in our Morning Report:

I also like /TF over 1,500 and /NQ over 6,600 and /NQ is lagging and likely to pop big if we get moving.  /YM 24,800 and /ES 2,675 will confirm and tight stops if 2 of the 3 fail to hold those lines!

As you can see, we're following the 5% Rule™ pretty much to the penny so it's not a good time to "think" when we can just watch and see what happens.  If the market is recovering, we should get back over that strong bounce line (2,728) and hold it into the weekend and, if the weak bounce


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Philstockworld April Top Trade Review

Image result for top trade ideasYes, this is Monday morning's Report.

I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter.  What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.  

We did our last Top Trade Review in Marchso it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time.  As of the March review, we had looked at Top Trades that were initiated through July and, out of 32 trade ideas in 30 weeks, we had 24 winners and 8 losers but 2 of the winners turned around by Sept and that left is with 26 wins and 6 losses for a very solid 86.67% winning percentatge.

Our Top Trades are what we think are our best trade ideas of the week with the highest chances of winning and we send out Alerts to our Members via Text and Email but we don't have a specific portfolio for them as they ofen ended up in one of our 5 various Member Portfolios already.  

There's a bit of randomness to the reviews in that we check in on trades after roughly 6 months so they are usually in progress and may be randomly up or down at the moment but that's why these reviews are so great for identifying bargains that simply haven't made a move yet.  These are the Top Trade Ideas for August and September:

Tuesday, Aug 1st: Teva (TEVA) – We felt TEVA has bottomed out in early Aug but we were wrong and it did go a lot lower before bouncing back.  Our trade idea was:

As a new


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