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  1. jims says:

    Smi (smart money indicator) service. buy sds at open…

  2. jims says:

    oil volatility is wicked today..

  3. whidbey says:

    We wait for fed to decide.

  4. whidbey says:

    buying oil,silver and beans today for rest of year.

  5. whidbey says:

    Reits in my portfolio have done well recently – up +.84% yesterday. The cash holdings are doing OK too. I am expecting a decline of major proportions before this cycle completes over the next couple of years.

  6. Daddy paul says:

    Looks like the train is pulling out of the station. Be long or be wrong. It feels like Jan 1988. As Jason says press the accelerator.

  7. whidbey says:

    Excesses in corporate credit preceded each of the three previous recessions.
    Ten years ago, one-third (33%) of corporations carried lower-quality ratings of BBB. Right now? 50%.
    The credit cycle has peaked or is extremely close to having done so.
    Household and corporate leveraging on “too-low-for-too-long” monetary manipulation is not likely to avoid negative consequences as the Federal Reserve presses down harder on the brake pads.

    Short call Condor indicated.

  8. cyber5 says:

    I think your are right whidbey. I am in Australia and we have this royal commission into banking and financial institutions going on and its been digging up all sorts of rorts that are mostly related to institutions milking the clients funds.

    One company (AMP.asx) has been getting hammered from revelation that it has been charging clients for fictitious services for years while lying to the regulators. Now it looks like they will go under. It has also been revealed that the loan books of the aus banks are full of sup-prime lair loans.

    Lets face it, central banks have been printing money like confetti and telling everyone that there is no inflation while all the time ignoring the elephant in the room => all the ballooning overpriced assets.

    Now the bubble is stretched to the max and it is no longer possible for financial institutions to grow and make money from loans linked to rising asset prices. It is now also difficult for them to make money from milking the client funds because of the regulators.

    So where is all the money going to come from to keep these financial institutions afloat? Big credit crunch brewing!

  9. whidbey says:

    The spread between the 2-year and 10-year bond yields is hovering above minor support at 43 basis points. That’s its lowest levels since 2007. The decision-making committee’s next meeting is June 12-13.
    A 25-basis-point hike in June, , would leave the spread between the 2-year and 10-year yield at less than 25 basis points.

    If the yield curve flattens, or even inverts, expect to see additional selling pressure on the financial sector. The banks, regional banks especially, will be laggards of the sector.

    Short call Condor is my call!

  10. whidbey says:

    Lollapalooza of a day. Bonds and notes above 3%, “problems” for consumer,banks and holders of the debt. Holding options and lots of cash.

  11. liar liar says:

    dollar index put in a short term bottom and put together a very impressive, steep rally, bringing into question whether it was a major bottom. hard to tell right now. bonds are breaking below their previous lows, turning more and more into a longer term down trend. if confirmed, both of these trends will have consequences.

  12. whidbey says:

    Change in the Volcker rule. I would guess it will relax some trading rules for banks allowing greater liquidity in the economy. Gold prices is saying today is important. Be alert for the US$ to vary significantly in the near future. No investment advice is to be implied from this post

  13. whidbey says:

    Rising Fed rates are creating what is the single biggest upward driver for Treasury yields — the jump in money-market rates now verge oN offering real returns to investors (and beating stock dividend yields).

    The Bloomberg Barclays index of T-notes due in 10 years or less is heading for the first losing streak in its 45-year history. gOLD IS ACTING STRANGELY, waiting to buy maybe shifting to call opions.

  14. Daddy paul says:

    I enjoyed Jason’s video. I have selective perception but I hear all the time from other successful traders emotions are not your friend in trading. Jason acknowledges that we have emotions in his video. Two thumbs up.

  15. whidbey says:

    XLE is up 9% this year and up 17% Y/Y. Energy has been a buy for a while, still looks good unless USA economy enters weakness or recession. Things are slowing for summer, Sell in May is still an alternative. Largely in cash…… watching.

  16. cyber5 says:

    Get ready for a China backlash on trade. China has just blocked all Aussie wine imports at the border. “New customs rules targeting Australian companies and industries” is the reason given. Many are suggesting it is for siding with the US on too many issue. This could get ugly!

  17. bravon says:

    Thanks for the Video, Jason!
    I wish you included at least a couple examples where you took the loss based on your system and it jumped up the day after and never came back. And also how you felt and dealt with it.
    Thanks for everything you do.
    Cheers!

  18. whidbey says:

    “No trade wars”, I am using 5% stops, but still invested and holding lots of cash.

  19. whidbey says:

    Long weekend so things are slow, atypical and misleading in all probability. Holding 20% invested. Predicting Fed will push interest rates up and banks will find lending a full time task. Volcker rule is to be redesigned to make loans more readily available. Bet it does not work out well. Lousy fall is coming maybe.

  20. Daddy paul says:

    Keep your foot on the gas.

  21. Fred Simons says:

    Preponderance of technical evidence points to higher market levels. US-China trade kefuffle does not affect internal Chinese commerce. Buy BZUN, the $10 move from current levels is commencing. P&F target is $69, a marvelous number in more ways than one.

  22. whidbey says:

    I am beginning to appreciate the difference in quality within the REIT sector, as the higher-quality names like Simon Property Group (NYSE:SPG), Taubman Centers (NYSE:TCO), and Macerich Group (NYSE:MAC) are beginning to utilize their competitive advantages to provide differentiation. Always a market somewhere…building reits this month.

  23. liar liar says:

    this is starting to look and feel like a flight to the dollar, which may be the first step of flight to safety. if that’s the case, this should be good for the bonds (u.s. treasuries of course, not brazilian sovereign debt or high-yield corporate bonds) but not so much for risk assets (equities, etc.).

  24. whidbey says:

    Credit Card Delinquencies Spike Past Financial-Crisis Peak (2009) at the 4,788 Smaller US Banks. the 100 largest US banks are doing OK, but debt levels on loans will be allowed to rise and number of loans will decline in all probability. Called selectivity.

    Make plans for a patch of rough going..in the coming year or so.

  25. whidbey says:

    In Q1, the delinquency rate on credit card debt at banks other than the largest 100 banks spiked to 5.9%, higher than at the peak during the Financial Crisis, and the credit-card charge-off rate spiked to 8%. These smaller banks marketed to the most vulnerable consumers that had been rejected by the biggest banks. … Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller US Banks.

    Using a long call strangle and expecting a lousy summer into the fall 0f 2018…

  26. Daddy paul says:

    God only makes great summers. Especially up here where the ground was still frozen last weekend.

  27. whidbey says:

    Today is volatile in spades. Suspect that Dax could start something in the EU which catch the world by surprise. In index puts, only 20% invested…. watching.

  28. jims says:

    The pushback against Trump’s Zionist blackmail-induced activity in the Middle East could be seen when “the House on May 23 banned Trump from declaring war on Iran without Congressional approval, and Congress on May 24 killed a measure for the U.S. to recognize Golan as part of Israel,” the sources say. In other words, Zionist blackmail against Trump is not going to be enough to allow these fanatics the opportunity to start their long-awaited World War III.

    Other Pentagon sources, meanwhile, are saying a major victory against the Zionist-controlled banks was achieved last week and that as a result, trillions of dollars fraudulently obtained after the Lehman crisis is now going to be used for a new financial system. The source says,

    “…that a gold-backed U.S. dollar looms on the horizon; that the U.S. government is going to stop borrowing money from the banks; that Donald Trump may have succeeded in getting back perhaps…

    $15 trillion in “credits” from the $23-43 trillion now known to have been stolen by the banks; and—most importantly for the American public—that sometime in June over a trillion dollars will be released into the U.S. economy through trusted stewards—normal people, many of them veterans—to inspire a job creation and new construction boom such as we have not seen since the aftermath of World War II. The massive investments in mostly black inner cities and mostly white impoverished rural areas is part of this deal.”

    This financial move, if it is realized, is definitely connected to ongoing intrigue in Saudi Arabia, the current main financial backer of the old petro-dollar. Here, de facto monarch Mohammad bin Salman has not been seen in public since a shoot-out was reported at his palace on April 21, 2018. This move against Salman, who was put in power by Israeli special forces, is definitely linked to attacks on Saudi agent and former CIA head John Brennan, the sources say. Brennan is now being blamed as the source for the entire “Russiagate” witch-hunt against Trump, they say.

  29. jims says:

    Spain and Italy, especially, are going to be big in the news cycle over the coming weeks. To put this situation in perspective, the Italian and Spanish GDPs combined are worth more than $3 trillion, or 16 times the $194 billion GDP of Greece. This means the crisis will be 16 times bigger than the Greek crisis that, by itself, nearly undid the Euro.

    The Italians now have a government that plans to do something about the slow destruction of the Italian economy caused by its participation in the Euro by issuing a new currency to pay for various plans to fix Italy’s economy. The old establishment is so upset about the new Italian government that Italian President Sergio Mattarella vetoed their candidate for Finance Minister because he is opposed to the Euro. The Italian president is supposed to be a figurehead, and this anti-democratic move is going to result in an open attack on the Italian deep state, according to P2 Freemason lodge sources. Italy’s Five Star leader Luigi Di Maio said on Sunday that President Sergio Mattarella should be impeached for betraying the state because of his rejection of a eurosceptic as economy minister.

    https://www.reuters.com/article/us-italy-politics-impeachment/italys-5-star-leader-says-president-should-be-impeached-idUSKCN1IS0S1

    https://www.bloomberg.com/news/articles/2018-05-28/italy-s-establishment-vetoes-the-populists

    A comparable thing is likely to happen in Spain because of similar structural problems related to the Euro. These problems can only be solved by these countries either giving up economic sovereignty or else issuing their own currency. The governments in both countries favour issuing new currencies. However, any new currencies in Southern Europe would not only endanger the Euro, they would also open the way for the big Kahuna—a new currency for the United States to replace or cohabit with the no-longer-American U.S. dollar.

    In other words, the existing financial paradigm is likely to face its biggest crisis since the Lehman shock, and this time it may not survive without a complete reboot. Until that happens, we can expect financial turmoil.

    Typically with these crises, the first victims will be those with the riskiest gambling portfolios—in this case people who have been buying junk bonds and stocks at historically unsustainable prices.

  30. whidbey says:

    Positive open, but yesterday demonstrates the sensitivity of this market and its connection to the Euro system. Conservative management and respect for cash until fall at least is my call.

  31. whidbey says:

    liquidity is the next bubble, index funds account for 43 percent of all stock fund assets, and this is projected to be 50 percent in the next 3 years, according to Barron’s.

    In total, index funds represent $7 trillion of U.S. stock funds that have no active manager. All buying and selling are done automatically. Active management has gone out of fashion, and as this sea change occurs, the market’s ability to price companies diminishes.

    Ownership of stocks in the S&P 500 is concentrated with three companies; Vanguard, BlackRock, and State Street. They represent about 88 percent of the S&P 500, and if we include Schwab and Fidelity, over 90 percent of the S&P 500 is basically now in the hands of five companies.

    This is without doubt the greats threat to investors that can exist. Selling long calls, holding 85% cash.

  32. whidbey says:

    today’s tech bubble is more hazardous than the one that popped in 2000. You might say, “That’s crazy. Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), Google (NASDAQ:GOOG) – today’s internet-oriented superstars are real companies with real profits.”

    Granted, all of these corporations are profitable. They may be rapid growers as well. That does not mean investors are paying reasonable or rational prices for their fractional stakes. Nuveen’s NASDAQ 100 Dynamic Overwrite Fund (NASDAQ:QQQX). It is trading at a 15.7% premium to net asset value. What does this CEF do to command such a premium? It sells covered calls. That’s it.

    Hold on we are soon to confront a major correction.

  33. whidbey says:

    General Electric (NYSE:GE) needs to raise $30B in cash to get to 2.5x leverage as per ratings agencies, JPMorgan’s Stephen Tusa writes in a research note, adding that the industrial conglomerate would need to raise $40B in cash to bring its leverage in line with peers.

    Additional cash would also not change JPMorgan’s $11 price target on the stock as it would be dilutive, and likely to be received negatively, especially from retail investors.
    Source: Bloomberg First Word.

    We got some hollow businesses.

  34. whidbey says:

    There are two main issues today in Washington DC concerning Wall Street and the big banks. They’re too big to fail and they’re too big to jail. Naylor says there are four too big to fail banks – Bank of America (NYSE:BAC), Citi Bank (NYSE:C), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC). The market is expensive, P/E ratios confirm that. When the P/E ratios climax the big banks go with the high flyers. Hold on!

  35. whidbey says:

    Some of the FANGMAN stocks are massive share buyback queens, such as Apple and Microsoft. Others are bottomless cash-sinkholes, such as junk-rated Netflix, which has to constantly raise new money, either by selling more shares or selling debt, so that it has more fuel to burn through, and it doesn’t have a dime to buy back its own shares.

    That $173.6 billion in share repurchase plans includes the record-braking mega-announcement from Apple that it would buy back $100 billion of its own shares. Here are the top five that account for $134.3 billion, or 77% of the total:

    Apple: $100 billion
    Micron: $10 billion
    Qualcomm: $8.8 billion
    Adobe: $8.0 billion
    T-Mobile: $7.5 billion
    To put that May total of $173.6 billion.

    The point is that these firms can not exist without manipulations to provide working capital. When the music stops mnay firms will cease to be solvent. Caution into fall 2018.

    • Michael Moy says:

      I expect to see a PC refresh cycle when Intel and AMD fix their hardware for the meltdown/spectre bugs. The fixes, so far, have been in firmware and software but those kinds of fixes present problems. The fixes impact performance by 10 to 15 percent but I think that big companies would prefer to not have computers with hardware vulnerabilities at all. Intel and AMD are going back to providing big performance gains with new generations of processors as well. I expect Micron to be a beneficiary of a PC refresh cycle – though they have some legal difficulties right now.

      • admin says:

        Michael…when do you expect them to fix their issues. I’m due for a new PC but would willing to wait until the issues are fixed. – Jason

  36. cyber5 says:

    “record-braking mega-announcement from Apple that it would buy back $100 billion of its own shares.”

    Maybe it would be better spent greasing some palms in China to avoid a whopping big anti-Trump tariff on US tech goods sold in China.

  37. Daddy paul says:

    Now the hard question is when to sell for Max profit.

  38. whidbey says:

    The yield on the benchmark 10-year Treasury note was lower at around 2.902 percent at 5:25 a.m. ET, while the yield on the 30-year Treasury bond was also in the red at 3.054 percent. Bond yields move inversely to prices.As we head toward summer the Fed will decide the finacial future of the economy. Suspect that there is confusion to come as the international meetings take place. Holding 90% cash, looking at gold/silver.

    • whidbey says:

      Some Power in bonds…. and the stocks showed strength, as our host says: there is a market somewhere. Eyeballing stength in the index stocks….. this summer may lead to a sprint into the fall.

  39. whidbey says:

    Fed talk today/tomorrow. Heading into the summer when investing is like having a broken arm and going blind in one eye. Patience is a virtue and cash is king. PS I like Canadians, their head shed is horse of a diffent color.

    • whidbey says:

      Results are solid for the monthly 10-year note auction, where coverage, at 2.59, was the highest since January and end investor demand strong, with non-dealers taking down 72 percent of the $22 billion offering. The 2.962 percent high yield was 3.3 basis points below last month’s awarded yield, which was the highest auction rate for the note since January 2014. Risk taking is rising, Watch the FED action…

  40. whidbey says:

    Fed meet today,rates go up?

    Six of eight indexes on the world watch list have posted gains through Monday, June 11, 2018. The top performer this year is India’s BSE Sensex with a gain of 4.94%. In second place is S&P 500 with a gain of 4.05%. In third place is Hong Kong’s Hang Seng with a gain of 3.83%. Coming in last is Shanghai’s SSE with a loss of 7.69%. Expect this is summer dolldrums so little happens into fall?

  41. whidbey says:

    EUR, Bund Yields Tumble After Draghi Signals End Of QE.

    US PCE (excludes food and energy) is up significantly. The Fed is expecting to raise rates a couple of times this year. We can loose some weight or sell the house. Old pesants are NOT accustom to having choices.

    • whidbey says:

      maybe silver or gold or both?. looks unsteady for a while. The peasent. Buying options this AM…

  42. whidbey says:

    Trade war? Could be a hot commercial summer. sell some options??

  43. whidbey says:

    The Fed continues to raise rates…. until something breaks. Well, the first signs of that are being seen and the Fed (as well as other central banks) seem intent on continuing their course. Note: social security and medicare are short of required funds for the near future – years yes, but short. Weak opening today, time to be fond of cash and watching silver/gold. Am I concered? You bet you!!!!!

  44. cyber5 says:

    The Fed is increasing rates to avoid repeating the errors of the mid-Sixties, when it waited too long to snatch away the punchbowl, and let loose the Inflation Genie.

    Looking at the inflation rate if increase in the US, the genie is already out of the bottle – and a bond market crash is a huge risk.

    The ECB has no choice and has to reduce its bond purchases to zero by the end of the year, mainly because the northern “German” bloc are concerned that the euro could fall off a cliff if the ECB continues with QE while the FED continues to hike rates.

    The Bank of America says the ECB may bring forward the announcement to warn Italy’s Lega-Grillini insurgents that there will be no monetary cover for their fiscal blitz. So if the ECB no longer buys Italy’s bonds then who will? (Same goes for Greece, Spain, etc, etc…?)

    The end of QE in Europe is doubly treacherous because it rips away the ECB shield for Italy, meaning Mario Draghi’s “do whatever it takes” will no longer hold. The more immediate risk is that the US economy continues to decouple from the rest of the world in a Trumpian fiscal blow-off, catapulting the US dollar higher.

    The Bank for International Settlements estimates that offshore dollar debt – much of it borrowed by private companies in East Asia and Latin America – has jumped five-fold to $US11 trillion since the early 2000s. There is a further $US13 trillion in “equivalent” derivatives, three-quarters with a maturity of less than one year.

    The nub of the matter is that a surging dollar forces global commercial banks to retrench and causes a liquidity squeeze through complex swap and hedge contracts. It is a toxic cocktail when combined with surging US interest rates as well.

    Some $US9 trillion of global contracts are priced off dollar Libor rates. Emerging markets are now big beasts. The “blowback” from any crisis into the US economy would ultimately compel the Fed to retreat.

    https://www.theage.com.au/business/the-economy/a-worldwide-financial-storm-is-brewing-as-central-banks-pick-their-poison-20180618-p4zm36.html

  45. whidbey says:

    Tuesday, inflation as measured by the Consumer Price Index shed some light on what would happen in retail sales today. CPI rose 2.8% in May, the fastest year-over-year jump since February 2012. Conversely, the purchasing power of the dollar dropped 2.93% in May from a year ago, the fastest drop since November 2011.

    just holding on is going to be almost impossible for working folks…watch precious metals as a hedge…

  46. Daddy Paul says:

    Huge gap down = huge profit potential going long.