Is this the sign of a "healthy" market?
For the second day in a row, they've had to halt bond trading in Tokyo as a precipitous drop in the Yen (due to BOJ craziness we discussed last Thursday and Friday) dropped the currency 5.3% since Thursday and shot the Nikkei up (due to happy exporters) 4% to just under 13,400 this morning.
I sent out a Tweet this morning (from our Member Chat) to short the Nikkei at 4:01 as it ran afoul of our 5% Rule and it's a big WHEEEEE! already at 8am as we have a pullback to 13,315 which has paid for our Egg McMuffins – with plenty left over for a sushi lunch as well (at $5 per point, per contract, on the /NKD Futures). Catching an 80-point drop like this pays $400 (just enough for Masa!) and the margin on the /NKD contracts is $2,200 each – this is a tool traders should WANT to have in their belts, not run away from…
We'll be featuring a seminar on trading the Futures at our PSW Investor Conference in Atlantic City at the end of the month – I look forward to seeing our Members down there!
We had a big ka-ching on Friday with our oil shorts as we bottomed out at $91.91 and I had already called for us to flip long back over $92.50 on /CL Futures and those were good for $500 per contract into the NYMEX close. Only a fool plays Futures over the weekend but we got a nice open at $93.50 to re-short as there was nothing bullish about oil on Friday other than screwing consumers over the weekend.
Speaking of screwed – it seems that Social Security's Disability Benefits will run out of money in 2016, according to the WSJ – just in time for the elections! So we're not going to worry about it now as I'm sure we will elect wise men to see us through this crisis – as they have all the others {end sarcasm font}.
Before I went on vacation last week, we were discussing the Income Disparity that is destroying America and Barry Ritholtz has a nice article on it this morning so I'll just sit back and watch him argue with psycho Conservatives this week as they present their ad hominem attacks to dispute the rock-solid evidence of the abuses of Capitalism, which is not efficient at distributing anything but more work to the bottom 80% while more profits accrue to the top 1%, who make so much that the next 19%, like pilot fish who suck up to sharks to catch a few scraps – SEEM to be benefiting from the same system. But it's an illusion – get rid of the shark and there would be much more food for everyone else…
I was on a cruise ship last week and we pulled into the Mexican port of Costa Maya, which is a very poor town of perhaps 2,000 people. Our ship had 4,000 passengers and 1,500 crew so, of course it's good for their economy for us rich folks to drop by and spread a few Dollars around (it's pretty much their whole economy) but I pointed out to the cruise passengers I was on a Catamaran ride with that it was lunch time and the whole buffet on the ship was going to waste as most passengers were on shore excursions so I said wouldn't it be nice if we at least invited the town's school children up to have a nice lunch. Holy cow – you would think I had proposed overthrowing the US government the way people reacted.
There really is no hope for us if this is how the top 1% treat the rest. I am quite certain that more food was thrown in the trash at lunch alone than the entire population of Cost Maya consumes in a day. And, of course, we're not the only ship that stops there (there were 2 others when we were there) but we WANT them to be starving, we WANT them to stand at the docs and offer to sell us bracelets for $1 or drive us around all day for $20. If we fed them they would get "lazy" and, of course, "lazy" means unwilling to work crap jobs for slave wages because their basic needs are being met – so they can "afford" to have some dignity.
That would then prevent the top 1% from making obscene amounts of corporate profits benefiting from the slave wages the locals are forced to accept to feed their families. So you see – we CAN'T feed the poor our excess – it would ruin everything. Ah Capitalism – you can be used to justify almost any moral atrocity…
Anyway, back to the markets. So it's earnings season and AA kicks off the week with likely bad news this evening but bad is expected so we'll see how bad. We already have AA in our Income Portfolio and we'll probably want to add to it if we get a nice dip but we already covered what we did have with the April $8 calls that we sold for .66, so AA is trading right where we expected back in February, when we initiated the position.
We're still bearish on the week and I went over some of the bad news in Member Chat this morning, so I won't re-hash it here. Already (9am) I see that the Nikkei has failed to hold 13,300 (yay!) and oil is already at $92.90 for a quick $600 per contract gain while I've been writing this post (you're welcome!) and the Futures are pulling back more to flat as the pre-market manipulation gives way to the reality that it's time for earnings to put up or shut up to justify the massive market tear we've been on since Thanksgiving.
We love playing earnings in our short-term portfolios and we already have plays on NKE, AMZN, IBM, XOM and JNJ in both of our 25,000 portfolios with our Aggressive Portfolio adding plays on AAPL, GOOG, EXPE, COH, LULU and FB so it's going to be fun and we'll certainly do our usual quickie plays when we see some good ones. Hopefully we can kick the VIX back up to 15 to give us some better premium selling opportunities as it's not so much the earnings we like to play as the volatility ahead of earnings as we happily take the bets from suckers who think they know what's going to happen.
Good hunting!
