Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Republican Baby Budget Battle Breaks the Stock Market

Stock-Markets / Stock Markets 2013 Sep 30, 2013 - 02:32 PM GMT

By: PhilStockWorld

Stock-Markets

Told you so!

As we expected, the Futures are off about 1% this morning and down about 3.5% on the Dow, S&P and NYSE since Thursday, the 19th, when we told you to ignore the Fed rally and the painted charts and focus on the FUNDAMENTAL ISSUES that were going to drive the market lower. I also had some opinion about what to do with the new oil contract, saying right in the morning post (where even the free readers could see it):


Oil shot back up to $108 on the new October contracts (/CLX3) and we shorted them in Member Chat this moring and already caught a very nice $500 per contract ride down to $107.50. Tomorrow is the last day the October contract trades (/CLV3) and there are still 79,243,000 fake barrels on contract and, if they were actually delivered to Cushing, OK next month, the US would have a 15-20M barrel PER WEEK build in inventories and prices would plunge.

That, of course, will not happen. What will happen is that the 79,243 fake open orders for October will be rolled into the already 331,304 fake open contracts for November to make it look like we have this MASSIVE demand for oil when, in fact, less than 20M barrels will actually be delivered in October, November and December in order to make it LOOK like we have a scarcity of oil in this country.

It's a con, plain and simple. It is the criminal manipulation of the energy markets in order to overcharge you for oil, and petroleum products – screwing you and your family out of thousands of Dollars each year but please – don't write your Congressmen – just continue to be a good little drone and pay the criminals. That's the American way…

That last part was, of course, sarcastic as I'm always encouraging our readers to write to Congress and our Members sometimes do and we get some interesting responses. Do we make a difference? I don't know but I do know those /CLX3 contracts fell below $102 this morning and that's a gain of $6,000 per contract and, had you shorted all 331,304 contracts 11 days ago – you'd be $1,987,824,000 richer this morning. Not bad for free advice, right? If you don't get our Daily Newsletter – I'd start here!

Of course, most people just short a few contracts but still, making $18,000 or $30,000 or $60,000 in 11 days is pretty good, right? We also shorted USO and went long on SCO (the ultra-short oil fund) for those who can only play stocks or options and even the stock made 5% on USO and 10% on SCO while the options on them have almost doubled up already (the good side of leverage!).

I wouldn't be wasting your time telling you this if conditions weren't right for more fun. Cheesy as it is, I have to say "I told you so" so you'll know I might know what I'm talking about next time I go rambling on about the oil scam and how we can take advantage of the market manipulation to make even more money as we head into the end of the year but, for now, $101.50 (this morning) is a good place to take the money and run while we wait for the day's intrigue to resolve itself.

137657 600 GOP Suicide cartoonsThat same day, aside from finding a long play on TTWO that's working well and a short play on TSLA we're still waiting for – I made an offhand comment to StJeanLuc at 1:13 in Member Chat regarding Boehner's idiotic speech that day, which was: "Boehner/StJ – I don't see how he backs off this cliff now," accompanied with this and several other political cartoons indicating my ever-so-slightly Liberal disdain for the GOP.

The next morning, also totally for free in the Morning Post (and Emailed to you pre-market at 8:30 am in our daily PSW Report to our Members) I had several ideas to short the market as we maxed out our overbought levels on the NYSE McClellan Oscilator (90), saying: "This stuff isn't complicated folks, it's just physics." Our FREE trade ideas were:

  • IWM short at $107, now $106 – up 1%
  • Russell Futures (/TF) short at 1,070, now 1,063 – up $750 per contract
  • TZA Oct $22/25 bull call spreads at .96, now $1 – up 4%
  • FAS Oct $80 calls short at $1.55, now 0.30 – up 80%

In Member chat we added the SPY Oct $171 puts at $2.05 as a Portfolio Hedge and those are already at $3.09 – up 50% in 10 days on a 3% move down in the S&P – now THAT'S how you use LEVERAGE to your advantage!

When you are able to make 50% on a 3% move in an index on your insurance plays, you only have to commit a very small amount (5% or less) to offset losses. As I often say to members, hedging your portfolio with trades like this can be better than cashing out because you don't have the friction cost of getting in and out of positions and, if you are using our "7 Steps to 40% Annual Returns" system, then leaving your positions open means you are MAKING money on your short premium sales and that pays for your insurance.

As noted in that video and as noted last week in Member Chat – one of our "7 Steps" is realizing that, sometimes, it's a good idea not to play the game and, other than our short positions that seemed kind of obvious – this seemed to be one of those times when CASH was truly KIng. Aside from the Republican idiocy in Congress today is the last day of what may be a prop job into the end of the 3rd quarter anyway, we've got a heavy data week capped off by Non-Farm Payrolls on Friday.

Already this morning we got some bad news out of China as September PMI came in barely above the line at 50.2 and that's down a point from the "flash" PMI estimate of 51.2 that gave them a boost earlier in the month as they are, in fact, flat to Augusts 50.1. There are still a lot of structural headwinds ahead, says HSBC's Frederic Neumann. "This is as good as it gets for the time being. It reflects the stimulus over the summer but don't expect too sharp an acceleration from here." Nomura's Zhiwei Zhan believes that the marginal improvement in August indicates that China's economic recovery is unsustainable, and he expects growth to peak in Q3 and then resume slowing. We chose not to renew our China play but, back in August, we liked them in our 8/21 Member Chat, as we looked over the Fed Meeting Minutes and I said:

So far, we're not even near weak bounces so we can't really read these tea leaves yet but, I think Asia will love it and Europe will be up so how about adding 10 FXI Sept $34 calls to the STP at $1.70 and 10 EWJ Sept $10 calls at $1.20 to cover a rally in Japan and China.

Those FXI calls expired on the 20th at $4.43, up 160% and the EWJs expired at $1.90 for a smaller 58% gain. We took the money and ran on earlier spikes, however as we knew the data from China was – let's just say – less than reliable…

Not that our own economic data is reliable. Our last NFP report had revisions to previous reports that were more than 1/3 of the current amount – that borderlines on being completely useless from a data point of view. However, our job is not to measure how useful the data is, our job is simply to predict the market reaction to useless data so we can make some money from the idiocy of others.

Other big news this week will be Auto Sales tomorrow along with PMI, ISM and Construction Spending. Bernanke speaks on Wednesday afternoon (assuming the Government is open) and we have various jobs reports throughout the week, leadding up to the big one. PMIs come in from Europe and Asia as well and EU jobs numbers and retail sales – lots of interesting things to mull over as we wait for those Q3 earnings reports to start coming in.

Cash is king but, so far, we've had great opportunities to put it to use (see Friday's post) and, whether the Governement shuts down or stays open (which would be worse?), I think we'll find something to play!

- Phil

Click here for a free trial to Stock World Weekly.

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2013 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PhilStockWorld Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules