2,750 Tuesday – S&P 500 Hits it’s Next Benchmark

2,750 already?

It was only September when we got over 2,500 so another 10% in 4 months is a 30% annualized pace for the senior index.  Back on 9/26, I asked "Is S&P 2,500 the Market’s Waterloo?"  and clearly it has not been, with barely a down day since, punctuated by this year's crazy kick-off that's taking us 75 points higher (3%) for the year, so far.

Of course that's nothing compared to what's going on with our GreenCoins (GRE), which blasted up another 100% this morning on heavy volume, despite the sell-off in some of the more popular crypto-currencies.   That's up 1,000% from our Dec 3rd call to buy the currency, where we guaranteed we'd accept them at 0.00044 as payment for 2018 Annual Memberships.  We even tweeted that one out the same day – so there was ample chance to get in on the fun.    

And why shouldn't we be able to make 1,000% in a month?  That's the new market paradigm these days when, as I predicted on November 29th, at this pace "We Will All Be Billionaires."  The next day (11/30) we analyzed the Dow in "24,000 Thursday – Dow Continues Its Insane March Higher" and now the Dow is at 25,300, up 5.4% in 6 weeks.  Of course, we didn't think it was sustainable and we cashed out our protfolio positions into the holiday and, since last Monday, we've been slowly building them back up – since this rally seems to be showing no signs of slowing down.

While I'd much rather see a good correction before we jump in and start buying again, we also don't want to get left behind in a good rally so we're picking up values where we can – though there aren't many value stocks left these days!   

Not only is the S&P testing the 2,750 line but the Nasdaq 100 (/NQ) Futures are just under 6,700 – and that's up 10% since October!  We're using the Nasdaq's ultra-short ETF (SQQQ) as our primary hedge at the moment as we really can't believe earnings are going to live up to the hype but it's not really about earnings – it's
continue reading

Monday Market Madness – Who’s Watching the Watch List?

It's been a busy weekend.

Last Wednesday, we put up our Watch List for 2018 and we had about a dozen trade ideas, right off the bat, that we were adding to our Long-Term Portfolio and Options Opportunity Portfolio.  Over the weekend, we've added 10 more actionable trade ideas for the OOP and LTP - so don't complain there's nothing to buy in this toppy market – we even had a nice hedging play for you on Friday.  While we're still expecting a correction – it's likely to be just another buying opportunity in a generally bullish market.  

Considering how sure I am that we're going to have a 10% correction this quarter, I was actually surprised at how many stocks there are trading for good prices.  Granted, I was looking at thousdands of stocks and found only dozens to buy – but I thought we'd find far fewer than that.  I suppose it's because the rally has been fairly narrow in scope – leaving many good stocks behind in favor of chasing the popular stocks to new highs.  

It's still too scary to short things, which is a shame – because there are so many things that are tempting to short like Tesla (TSLA) at $316 (always a good short), Amazon (AMZN) at $1,230 ($600Bn!), Netflix (NFLX) at $210 and whatever Uber is currently trading for!  We'll get AMZN's numbers at the end of the month but, last I heard, they should be about $60Bn in sales and $1Bn in profit for the quarter, which will put them up around $2Bn for the year or less than $5 per $1,230 share so it will only take AMZN 246 years to pay back investors at that pace.  

The investing premise on AMZN is, of course, that they will grow into their valuation but then their valuation jumps was faster than their growth – up 50% in 2017, in fact – yet people just keep snapping it up – with half of that growth coming since October.  

How will Amazon justify a $600Bn valuation?  It's earning $2Bn now and it's selling about $180Bn a year worth of stuff while WalMart (WMT) sells $500Bn so let's say AMZN gets as big as WMT
continue reading

Friday Follies – Trump Promises Dow 30,000

Dow Jones Industrial Average crosses 25000 for the first timeWell, we're past 25,000 the Dow and the President is promising 30,000 so we'd better buy more stocks, right?

As crazy as it all seems, the makets COULD go up another 20% and there are about 200 trading days for the Dow to gain 5,000 points so 25 points a day would seem calm compared to what the markets are adding this week.  Keep in mind how silly this is as it's a $100 TRILLION Global Stock Market and when we have these 1% gains across the board, we're adding $1Tn of "value" in a single day against an $85Tn Global GDP that's growing, at best, 4% for the year ($3.5Tn).  

Related imageThat, in a nutshell, is what's wrong with the World now – we value Coprorations more than we value Governments and Coporations and their Top 1% owners are slowly but surely taking control of our Governments, turning us into a Global Oligopoly in which people don't matter.

Oddly enough, the people love it, though.  Especially the Top 10% of the people, who buy stocks, as they seem content to let the Billionaire Class lead us into the land promised by Ayn Rand 60 years ago, one in which 

 

IN PROGRESS

 

 

 

 

 

Follow-Through Thursday – Dow 25,000 and Bust?

How long, can this keep going on?  

"Well, your friends with their fancy persuasion

Don't admit that it's part of a scheme

But I can't help but have my suspicion

'Cause I ain't quite as dumb as I seem



And you said you was never intending

To break up our scene in this way

But there ain't any use in pretending

It could happen to us any day" – Ace

So far, 2018 is looking like 2017, with the indexes climbing up and up and, as I noted to our Members this morning, there's some good economic notes backing up the positivity including 18 states that raised the minimum wage on January 1st, which puts a bit more disposable income into the hands of 4.5M affected workers while putting upward wage pressure on 50M more.  Those effects take time to roll in but rising wages is a trend we should be able to rely on.  

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?  

You can't just keep rewarding the market for doing the same thing it always does otherwise, as I warned back on November 29th, we will all be Billionaires.  While I'm sure you want to be a Billionaire, what's the point of it if everyone is a Billionaire?  If that happens, you're going to be nothing if you aren't a Trillionaire – that's what happened in Zimbabwe, where they were printing $100,000,000,000 bank notes in 2009, right before their currency completely…
continue reading

Wednesday Watch List Update – Stocks We Like for 2018

Related imageIt's very important to have a Watch List.

I like to have about 24 stocks I keep a close eye on so that, when something happens and they go on sale, I'm ready, willing and able to pull the trigger in an instant.  We did that in November, when Macy's (M) announced their earnings and we thought they were just what we wanted yet the market sold them off after the opening pop.  That gave us a window to act and, because we follow M closely – we KNEW it was time to act and I issued a Top Trade Alert, identifying it as our top contender for Stock of the Year for 2018 (replacing LB, another retailer who has already flown higher).  

We issued our 2017 Watch List back in March and in May we picked 13 out of 24 for action, including M as well as BMY, ESRX (still cheap), FCX, GE (cheaper), GILD, LB, PSA (still cheap), QCOM, TGT, GCI, FMCC and SEE (still cheap).  So, out of 13 picks we had been watching and pulled the trigger on, 10 are winners, 2 are flat and one (GE) is down.

This is the key to understanding our system.  GE was our only non-winner out of 13 picks (the flat ones make money too using our "Be the House – NOT the Gambler" system) and is still very manageable but, since they cut the dividend, we're not jumping back in yet – other than short puts.  

Image result for real investingIn 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.  

Imagine if you ran a baseball team that way – constantly cutting players who were having a bad month and hiring
continue reading

2018 Tuesday – How we will be Building our New $100,000 Portfolios

Image result for new year stock market 2018Happy new year!

I hope everyone had a nice holiday.  Over at PSW, we've been in CASH!!! since early December so we'll be starting fresh this year and setting up 4 new virtual portfolios so we can get a bit more educational and teach our Members both basic and advanced techniques for wealth building.  Our 4 Portfolios for 2018 will be:

  • Options Opportunity Portfolio (OOP) – This was orignally called the 5% Portfolio, as the goal was to use $100,000 to make $5,000 a month but, at Seeking Alpha, where we have a version of this portfolio, they felt is was confusing people to call it a 5% Portfolio, so we changed the name to what we do – look for opportunistic option plays.  Originally, we were more short-term but I realized not that many people have time to trade so actively so we went with more long-term trades, which still make plenty of money in the short-term.  While 5% a month may seem like a high goal, we were up over 100% in each of the two years we ran the portfolio.
  • Butterfly Portfolio – "Butterfly" refers to the type of spreads we use, though they are not typical butterflies as we use extended time spreads as well.  Since we began our first butterfly portfolio in 2006, it has been our most consistent player, easily averaging 40% annual returns with much lower volatility than the other portfolios.  Though the spreads are complicated, ofen with 4 or more legs, they are generally low-touch and their self-hedging nature means they have much lower volatility than our more directional bets we take in the other portfolios.  
  • Short-Term Portfolio (STP) – Our STP is part one of our larger, paired portfolio and the purpose of the STP is to protect the Long-Term Portfolio (LTP), which is generally 100% bullish.  So the STP tends to have shorter-term bearish bets and index hedges but we do take the occasional short-term plays if something interesting comes up.  We'll also use this portfolio for short-term speculation for trades which do not fit into our LTP.
  • Long-Term Portfolio (LTP) – Our LTP is our bread and butter portfolio and is much larger ($500,000) than the other 3.  The STP/LTP strategy


continue reading

Final Friday – Futures Push Markets to Record-High Close for 2017

Image result for happy new year 2018What an appropriate way to end the year.

The Futures are being jammed higher to provide cover for sellers at the open and reel in more suckers to hold the bag.  The Dow Futures (/YM) are back to 24,850, where we shorted them yesterday and make a quick $250 per contract.  So that's every day this week we've been able to short the moringing run-up and, this morning, we might be able to catch 24,900 – or just under it and the S&P Futures (/ES) are an easy short at 2,698, with tight stops over 2,700 and that would be risking $100 per contract losses vs gaining $500 per contract is they calm back down to 2,688  – once again, we go for the positive risk/reward profile.

We also put our foot down and went long on the Dollar (/DX) at 92.00, that half-point drop this morning is the only thing boosting the indexes and commodities.  Gasoline (/RB) is also a fun short at $1.795 but that one is over the weekend into next week and might be painful if wrong ($420 per penny, per contract) but our logic is that the record cold snap doesn't encourage people to drive a lot and, after this weekend – what is the catalyst for gasoline over the usually slow winter?

Closing the markets at record highs gives the Banksters a great narrative to sell you overpriced equities next quarter.  After all – you don't want to miss out, do you?  Having the Dollar drop 3% since early November has made it more expensive to buy many things – including equities, which are exchanged for Dollars.    

Manipulating the Dollar lower is a great way to manipulate the market higher and the Banksters do this all the time when they want to paint a pretty picture for their year-end charts.  There's really nothing going on globally to justify a broad sell-off in the Dollar so we're going to start accumulating down here as a bounce back to 93.50 is good for $1,500 per contract and the margin requirement for Dollar Futures (/DX) is $1,980 per contract, so it's a pretty efficient way to make…
continue reading

Final Thursday Thoughts of 2017

Wednesday Wind Down for 2017

Not much is happening.

That doesn't stop us from making money in the markets, of course, but we have to be a bit selective in picking and choosing our spots.  Yesterday morning, for example, a pipeline explosion in Libya sent oil rocketing up to test $60 and, as it was climbing, I put out the following note to our Members at 11:09 am:

Oil exploding higher, $59.55 and /RB $1.796 - even though there's no logic to that following oil higher because a pipeline explode in Libya so I like /RB short under the $1.80 line with tight stops above.

That's all good Fundamental Trading is:  Read the news, think about what it means and play for or against the market reaction.  In this case, it was an over-reaction so we went against the market.  When oil hit $60 (/CL) we shorted that too as $60 is a tough line to cross and we expected at least some rejection there and, this morning, we just cashed in at $59.50 for a $500 per contract gainj already.

As to Gasoline (/RB), that was good for a quick $1,411.20 on two contracts into the close – not bad for a day trade, right?  Even if you have a $500,000 portfolio that you parked in CASH!!! and it's sitting on the sidelines, making $1,000 per trading day is $200,000 a year – that's a 40% annual return with some simple Futures trades while you wait for some good opportunities to re-deploy your cash!

Futures trading is a very valuable tool to have in your trading toolbox but, like anything worthwhile, it takes a lot of practice and that's why we do a lot of Futures work in our weekly webinars.  There will not be a Live Trading Webinar this week, however, as I'm on semi-vacation in Las Vegas, where I'm applying our "Be the House – NOT the Gambler" method to the poker tables.

Image result for winning pokerAside 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…
continue reading

Tinsel Tuesday – Market Decorations Expected to Last our the Week

Image result for santa on vacationWhy are you here?

I'm not here, I'm in Las Vegas!  It's 4am here – I have nothing else to do and the markets close at 1pm (PST) and I'll have a full day of fun in the sun after that – what's your excuse?  The US markets are open but not Europe, because they are not idiots – so expect very low volumes and take nothing seriously this week.

Nothing serious seems to have happened in the morning other than Apple (AAPL) getting some negative notes on IPhone X demand that's sending that stock and their suppliers about 2.5% lower in pre-market, which should put a drag on the Nasdaq (/NQ) and the Dow and S&P – all of which have AAPL as their largest component.  This could all be BS, where unscrupulous fund managers are taking advantage of the holiday – as well as Apple's refustal to comment on rumors – to knock the stock down.  

We can play along by shorting the Nasdaq Futures (/NQ) but they are already falling but the Russell (/TF) is lagging at 1,545 so I'd short them for a cross below, with tight stops above.  Speaking of Futures, congrats to those who played along with our long play on Natural Gas (/NGV8) from last Wednesday's Live Trading Webinar as we got a great pop this morning and an even nicer $1,200 gain – Merry Christmas to all of our Members!  

Now Coffee (/KC) has dipped back to $120, which is where we like to play them long with tight stops below that line.  We already put that note out to our Members earlier this morning, in our Live Chat Room.  The Nasdaq already hit our $1,000 per contract goal for gains from last week's short, where I said to our Members on Thursday morning:

Dow looks intent on giving us another chance to short at 24,850 (/YM) and that should be 2,690 (/ES), 6,500 (/NQ) and 1,550 (/TF) so all good shorting spots to watch (with tight


continue reading