We're ending the first quarter with a bang.
Our quarter ends 10 days early because stock options expire today and quarterly Futures contracts roll over. Next week is just the end game for the retail schmucks. As you can see from Dave Fry's SPY chart, up volume yesterday was about 60% of the down volume on Wednesday but it COMPLETELY reversed Wednesday's drop – despite the fact that 60% more people sold than bought over the two-day period.
This is how we manipulate the markets to make it LOOK like the indexes are holding up when actually we are selling our shares and cashing out. It keeps the retail suckers buying, especially when paid pumpers like Jim Cramer and the crew at CNBC are on the air 24/7 telling you to BUYBUYBUY and IGNOREIGNOREIGNORE any negatives – just like they did during the 2008 crash.
Maybe this time is different, maybe there's another reason a TV station that averages just 52,000 viewers in the 25-54 key demographic, remains on the air – other than just being a propaganda device for the top 1%. Certainly they aren't viable on their own merits as you can reach more people standing in Times Sqare with a megaphone.
Is it a sign of a market top when CNBC only has an average of 52,000 suckers tuned in at any given moment? Sadly, in these thin market volumes, 52,000 sheeple mindlessly following Cramer off a cliff can still move the markets, so we have to torture ourselves daily and pay attention to what CNBC is saying as neither Fox Financial or Bloomberg have managed to match CNBC’s impact for moving the markets.
Even now, when I go to visit brokers on Wall Street, every office has TVs tuned to CNBC (maybe they are not Nielson families), even though, clearly, the broadcasts did nothing at all to help Wall Street avert the last crash and, in fact, many would argue that their mindless trend-following and their constant cheer-leading for the latest bubble greatly exaggerated the damage done in the markets as people tune in expecting news and instead get nothing but PROPAGANDA that leads them to making very poor investment decisions.
We remain mainly in CASH!!! but this morning I noted to our Members in early morning Chat that I still liked the Russell Futures (/TF) short at the 1,200 line (I also tweeted it out – and you can follow me HERE) as I expect some funds are going to be heading for the exits on the early morning pop. China had a big, fake rally this morning (see our "News You Can Use") but the overall newsflow remains very negative.
We're not ALL negative. Yesterday morning, in the main post, I mentioned our CMG April $620 calls, which went from $8 to $17 in two days but ran all the way up to $24 yesterday (up 200%) and, though we were already done with them – we decided that would be a good time to flip negative on that one and my trade idea at 1:38 in Member Chat was:
Holy cow, you can sell CMG April $600 calls for $35 with CMG at $610, that's $25 in premium and earnings are on the 17th. CMG was $570 on Tuesday morning! You can cover those with the Jan $650/750 bull call spread at $27.50 for a net $7.50 credit and any move below $600 between now and April should make a nice, quick win and, if not – RAWHIDE!
As our Members know, Rawhide is our fallback play of rollin', rollin', rollin' our shorts calls or puts to lower strikes with longer timeframes if a trade goes against us. The long bull call spread acts as a backstop to protect us from a sharp move up but, since we have a net credit going in, even a very sharp drop will still net us a nice profit. We also liked the April $475 puts, which were $1.30 yesterday.
Our first trade idea for yesterday morning was, in fact, a bullish one on Silver Futures (/SI) at $21.35 and this morning /SI hit $2.55 and, at $50 per penny, per contract, that's a nice $1,000 per contract gain. We also played Gasoline Futures (/RB) bullish ahead of inventories at $2.85 and we hit our $2.90 goal and that one pays $420 per penny, per contract for a $2,100 per contract win. I keep telling you the market is rigged and this is simply how we play the rigged market.
We flipped short on oil again at 1:31 at $99.25 and thats' where we are this morning as well (/CL) and, in that same comment, we also took a poke at the NFLX April $400 puts, as they were just $6.75 with NFLX at $430 – just as silly as CMG. Our premise is these MoMo stocks are being pushed up to mask the dumping by the Banksters of other stocks in the indexes. That's the same premise we used to go long on the MoMos on Tuesday – and that worked out great!
At 3:10, we decided the TNA March $85 puts were a fun play at $1.80 but we took the money and ran at $2 into the close, as the markets didn't look as weak as we thought they would. We're certainly going to look for another short entry this morning if TNA is still high but now we'll have to give them a week, at least. Next week will be very interesting!
Have a great weekend,
– Phil
