Pair Trade Idea: Long Airlines, Short Drillers

Is it fair to say that the airlines and oil drillers business models run opposite one another? Drillers want expensive crude to justify their projects and airlines want lower crude, so that jet fuel prices can drop and help them run a profitable business.

You can see how these two industries run counter one another in their share price performance, especially in July.

Here take a look.

Isn’t that fascinating? Go long airlines, short drillers in July and close out that trade in January. I haven’t run the historical numbers yet, but I bet it beats the tits off the SPY. All of these tools are available in Exodus.

Let’s take two stocks, one from each group, as an example: CLR and UAL.

Aside from 2011-2012, this trade minted money over the past decade.

While on a road trip with his wife, former Chair for the Hillary Clinton campaign, John Podesta, lamented over the President’s reference to him in a tweet earlier today. This is what the President said.

Everyone here is talking about why John Podesta refused to give the DNC server to the FBI and the CIA. Disgraceful!

— Donald J. Trump (@realDonaldTrump) July 7, 2017

I don’t know what John’s problem is with that tweet. It appears that the President was merely having a moment of honesty with the American people, relaying the thoughts of those he was talking to at the G20. Everyone seems so concerned over John Podesta’s handling of the DNC server.

Here is John’s long winded rant, which, quite frankly, borders on the mentally insane.

1/ On a x-country road trip with my wife;

— John Podesta (@johnpodesta) July 7, 2017

2/ Pulled in for a pit stop in E. Fairmont W. Va. to see that our whack job POTUS @realDonaldTrump is tweeting about me at the G20.

— John Podesta (@johnpodesta) July 7, 2017

3/ Get a grip man, the Russians committed a crime when they stole my emails to help get you elected President.

— John Podesta (@johnpodesta) July 7, 2017

4/ Maybe you might try to find a way to mention that to President Putin.

— John Podesta (@johnpodesta) July 7, 2017

5/ BTW, I had nothing to do with the DNC.

— John Podesta (@johnpodesta) July 7, 2017

6/ God only knows what you’ll be raving about on twitter by the time we get to Utah.

— John Podesta (@johnpodesta) July 7, 2017

7/7 Dude, get your head in the game. You’re representing the US at the G20.

— John Podesta (@johnpodesta) July 7, 2017

In summary, John Podesta is ruining his wife’s road trip by yammering on about the President. While the President does, indeed, need to focus on the G20 and perhaps avoid discussing Podesta on his twitter feed, I think we could all agree that John needs to focus on his long road trip to Utah. Jesus Christ, how will Mrs. Podesta make it all the way there with John throwing fits like this over the President’s little tweet?

Taking a systematic approach to investing has forced me to analyze the markets in ways I never would’ve done on my own. The money flow in and out of the market is simpler than I thought. Mostly, it’s based upon market caps and certain criteria rooted in fundamentals.

For example, the SPY shed 0.2% for the week, while small caps lost 0.9%. For the first time in 9 weeks, I underperformed because I was in small caps. Today I was forced to sell all of them, reduce my TLT to 5%, and go long mega caps with 75% of my assets.

Digging deeper into mega caps, I found that the fundamental criteria that had guided me in and out of stocks helped enhance performance by an enormous degree. The entire mega cap quintile lost 0.2% for the week, while my fundamentally based screen gained 0.6%.

As such, I am now a happy and proud long in mega cap stocks that I would otherwise abhor — but done in a manner that is consistent with the style and grace that you’d expect from a space alien magician (SAM).

By all measures, the action in the tape this week has been the best in perhaps the past two months. We’ve seen risk off assets drop, small cap degenerates fall out of favor, and mega cap growth return to the top of the hill — urinating on all those below.

This all bodes well for a summer rally, providing oil can avoid collapsing.

Look at these two, like best friends. Who said Americans can’t get along with Russians? In his first press conference with Russian President Putin, Trump said he was ‘honored’ to meet him. Reciprocating, Putin said he was delighted.

(Cue liberal screeching)

In other news, Mexico still has to pay for the wall that is not being built. It’s a good thing Mexico is gonna pay for it, because Congress hasn’t allocated any funds to get it started. God bless Mexico.

Question for Putin haters out there: would you have preferred Trump hand Putin a signed declaration of war instead of shaking his hand?

Well, it looks like status quo.

The market timing tools inside Exodus work, scary almost. I’ll be reshuffling my portfolio today. In the meantime, find solace knowing the United States is punching European markets in the face, as the G20 meetings commence.

The world is our oyster. Are you man enough to eat it?

We’ll talk about crude later on.

Thoughts on this?

Jingoism and nationalistic fervor are often reviled by both leftists and cynics. In my younger years, I regaled in the glory of America — up until the point that I felt it was being used to emotionally control people to pursue an agenda that ran counter to the best interests of the people.

In other words, it feels good to be patriotic and to flaunt pride for God and Country — but what’s the point when the people we elect use that emotional currency to bomb the brains out of people overseas — exposing our bravest to depleted uranium — treating them like shit when they come home to continue life as a normie?

I get the conundrum that if we don’t control the narrative being woven, someone else would — like dog eating fish faces in Asia. It’s hard to ‘love’ an entire country with so many degenerates and fucked up places of ill repute. I’ve come to realize that ‘country’ is better defined as the friends and family close to me — even some of you internet people who might reside in third world shit-holes, like Canada.

Nevertheless, the following Tucker Carlson monolog is inspirational, in spite the fact that it reeks with idealism. If being a ‘team player’ for America requires me to send my son’s overseas to die for some war that was designed to help elite’s at one of our many gigantic globalist corporations — count me out.

If we’re talking freedom to say these things without the NSA monitoring every text or email that I make, whilst watching subversive content online, maybe I’ll waive a flag or two on the 4th of July.

Our mean reversion algorithms are suggesting the Nasdaq is oversold here. The last signal was on Thursday, which resulted in an immediate bounce. Over a 10 day holding period, the track record for this signal is flawless.

Before heading out and buying FAANG stocks, consider the shallowness of this sell off. Our oversold signals are intuitive and adjust over time to conform with different markets. Today’s Nasdaq is nothing like what we saw in 2010. I can illustrate this for you with the next chart, which is the tech sector’s oscillator dating back to 2009. This is the overbought/oversold mechanism in a visual format.

As you can see, today’s oversold signal is very shallow and would never even be close to oversold just a few years ago. But this is the market we’re living in now. To act on this, your core thesis must be that status quo will remain intact and we’re heading back higher — as has been the case, almost uninterrupted, since November.

Check out the new Exodus landing page.

This is a prime example of a know-nothing politician making promises that will never be fulfilled.

According public records, the last time a human being went outside ‘low orbit’and traveled to the moon was in 1972, during the Apollo 17 mission. There are many who believe we never went to the moon and that Stanley Kubrick produced the first lunar landing. All that aside, it is a fact that we’ve not traveled outside the Van Allen radiation belt since 1972.

But here’s crazy Pence telling a group of people at NASA that we’re going back to the moon and will also ‘put boots on the face of Mars.’

Okie dokie.

Maybe LB is lower because women no longer want to identify with their gender? Isn’t sexy nightwear somewhat SEXIST, after all? Plus anyway, with so many flamboyantly gay males these days (by my assessment from the teevee, upwards of 75% of all numales are in fact gay) there isn’t any need for romantic nightwear.

Down you go L Brands, you racist, sexist, bastards!

L Brands reports June comps of -9% (Victoria’s Secret -17% and Bath & Body Works -8%) vs mid to high single digit decline guidance.

Over in China, the Chinese do not want to corraled into degenerate Kentucky Fried Chicken outposts any longer. They must feel those eateries are beneath the dignity of man — judging by today’s stock price action.

Down you go YUMC.

Reports Q2 (Jun) earnings of $0.27 per share, $0.01 worse than the Capital IQ Consensus of $0.28; revenues rose 0.4% year/year to $1.59 bln vs the $1.6 bln Capital IQ Consensus.

Same-store sales grew 3%, including growth of 4% at KFC, flat at Pizza Hut. Opened 90 new restaurants during the quarter.

Total restaurant margin increased 2.7 percentage points to 15.3%, primarily due to the impact of retail tax structure reform and also driven by same-store sales leverage, partially offset by wage inflation and commodity inflation.

Operating profit increased 64%, and 73% excluding F/X, primarily due to the impact of retail tax structure reform and also driven by same-store sales leverage. F/X negatively impacted reported operating profit by $8 million.

The overall market seems to me, a mere immortal amongst peasants, completely screwed. Don’t tell me you weren’t thinking the same.  Sure the Dow is only down 140 and the Nasdaq 55 — but the breadth and the lack of energy leaves me with an uneasy feeling of dread. No?

Case in point, why is UAA and GNC sharply lower? I can’t find any news.

Amongst the mega caps, TSLA and GE are down more than 4%. That’s not good news. Next thing you know, the entire market is down 4%. What this market needs is an enema — a good cleansing. But don’t get caught outside when it happens, otherwise you’re liable to shit yourselves and embarrass yourselves whilst entertaining your manlet friends in a genderless locale, presiding over faggot daiquiris.

Just sit there and enjoy the inflation. After you spend $500 at the grocery for a few small bags of goods, feel good knowing that you were merely a byproduct of Federal Reserve policy to enhance inflation.

Mission accomplished.

Since hitting a seven year low in early 2016, the FAO food index is up 17% — led by strong gains in butter.

Look at some of the price increases for June alone.

Butter +14% to a record high
Meat +1.8%, up for a sixth month.
Grains +4.2% to a one-year high.

You might want to forgo that large stick of butter inside your moronic bullet proof coffee this morning. It’s getting awfully expensive.