Bears better have sold yesterday

As $SPY makes a new high on this thinly traded Wednesday, the scenario for bears is an easy call: Your asses are doomed. The Turks shooting down a Soviet fighter YESTERDAY was your last chance to cover, that window has closed and you need to stock up on $.99/lb frozen butterballs if you want to make it through the winter.

Here’s the rundown of economic data out today :
First-time jobless claims fell by 12,000 to 260,000 last week, the lowest number in a month. Consensus was for 270,000 claims.
Durable Goods orders rose 3%, faster than the 2.1% gain forecast, but down year-over-year.
The Conference Board’s Consumer Confidence Index fell to 90.4 in November, missing estimates for 99.5. It was also lower than October’s reading of 99.1.

Lovely note from the Atlanta Fed:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 1.8 percent on November 25, down from 2.3 percent on November 18. The forecast for the fourth-quarter rate of real consumer spending declined from 3.1 percent to 2.2 percent after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis.

Meh.

A rate increase has already been factored into the market, if the FOMC delays this again…. moonshot.

Crude loves this level and despite the world being awash in it, its not going to $20.

If you are short, it is going to be a very cold, bleak dreary winter.

$SPY will be at 212 by FOMC meeting.

Enjoy the Holidays!

I woke up around 4am this morning and as I usually do, picked up my smartphone and checked US Equity futures,pretty much unchanged. I went downstairs turned on Bloomberg and WTF! S&P down 12.50 points.

Another Russian plane goes down in flames, I did not see that coming.

from the Guardian this morning:

Russia is now Turkey’s second-largest trading partner and 60% of its natural gas comes from Russia.

Economic dependence is one powerful reason, among several, why Erdogan (Turkish President) will not want this latest border incident to escalate into a wider confrontation – although this is something that may not be entirely within his control.

Sergei Lavrov, Russia’s foreign minister, is due to visit Ankara on Wednesday for bilateral talks. Turkish officials said the visit would go ahead as planned, even as they consult with Nato in Brussels. There will be much to discuss.

I would use this opportunity to close out any short positions that are not working (that is until 4am this morning) except for  metals, materials or energy (add to any short positions on this blip), add to positions that are working (except Palo Alto you lost that trade yesterday  at 4pm ) and count your blessings that Putin is not Stalin.

SPY is getting crushed so there will be a mass plunge on the open as a ginormous (to large to count) amount of stops are going to be taken out. SPY at 207.75 as I write this.

I see a nice fill the gap after sanity returns day trade, need to see the open before I call a buy point.

Happy Turkey Day!

This was the reaction from the market on October 15th as economic numbers (jobless claims) suggested that there would be no rate hike in 2015. last week the Fed hinted it would raise rates in December and the market rallied over that.

Crude futures were down over $1.50 last night (stronger $, OPEC comments), they suddenly reversed and are now up 30 cents.

Today we will be impacted by this:

Advanced Notice of a Meeting under Expedited Procedures

It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 11:30 AM on Monday, November 23, 2015, will be held under expedited procedures, as set forth in section 26lb.7 of the Board’s Rules Regarding Public Observation of Meetings, at the Board’s offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.

Meeting Date: Monday, November 23, 2015

Matter(s) Considered
1. Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.

My thoughts are that the FED is worried that “bad things” might show up in indicators between now and mid December when rate decisions are announced, retail sales may just be god awful and we can’t “alibaba” numbers here in the US.

It is a short week and moves are amplified in thin markets.

The Market hates a vacuum and I hear a huge sucking noise.

Ok, yesterday was a bad day. I was absolutely, 100% positive that the fed would CLEARLY let it be known a rate increase was coming in December. If I have learned anything over the years its “don’t fight the Fed.” Market breadth has been negative (as it was yesterday) but Mega Caps are keeping major indices afloat. I watched a fade Tuesday and held overnight, expecting to see a very weak opening and a stampede to the exits yesterday afternoon.

Exactly the opposite happened. Market opened strong and I never had a opportunity to exit. I backed off, looked at my strategy and added a few more puts on the close.

One day does not a bull (or bear) market make.

This morning S&P futures leaked very strong, but have weakened as we approach the open.

My opinion is still the same, but my trading philosophy today is not to get caught up in a drunken buying spree, but just stay neutral and try to close out some positions as we go into a very dead Thanksgiving week.

Good luck

I am sure I will get blasted over this piece, but it is always good to take a look at the holdings in an ETF and see what you are actually buying. The top 25 holdings in SPY make up 35% of the total assets. AAPL #1 3.59%, MSFT #2 2.5%. FA(N)G (no Netflix) 6.5%, Banks 6%, Pharma 3.5%, Oil 3% with 1% holdings of Disney, Coca Cola, GE, and Home Depot. The point here is (yes there is a point) a couple of stocks can create a big move in SPY. This morning Goldman put AAPL on their “conviction” list (which frankly has a pretty shitty track record). the stock is up 1.6% in PM. I will be watching Apple at the open to see if it holds or fades. Be aware of what is moving SPY and you gain an edge over those who don’t. Photo this morning is of a Malinois riding a tank in the Middle East. One of his kin, Diesel; a 7-year-old police dog in France, was killed during the Police raid in Saint Denis this morning. Rest in peace Diesel, you died a hero, helping get rid of a band of cowards. Market opens in 25 minutes.

This morning, I must admit I am in a quandary. I have long positions I have hedged, I have been selling the rally (cash is ammunition, try making money without it); but I need to plan for the chance this was not a one day rally and there is another leg to this uptrend. I rely more on fundamentals than TA but I use it on occasions like this morning. I look at the $SPY chart (and others) from different time horizons (one day, five days, one month, three months). It is amazing how viewing different timelines can give you such a great roadmap as to when/if to buy/sell or get the fuck into cash, gotta watch the open. I still want to fade this thing, but always trade what you see, not what you want to see.

As the indices rally to (near) new highs, breadth has been terrible, with just a few Mega stocks disguising what has been a very dead market. The IWM ( iShares Russell 2000 Index) has been anemic all year and doesn’t appear to have any reason to rally now. We have hit a shot term top and I am suggesting you hedge right here through year end to protect your investment accounts. FB, AMZN, NFLX and GOOG charts all look ominous right now and former biotech stars are just beartraps now. Buy January PUTS on the S&P (yep did a 180 here), enjoy the holidays and come back next year. I see nothing out there that makes me want to buy anything.

When the “cloud” first appeared , it was hailed as the Messiah by “Big Data” and all the other legacy hardware techs as a way to fee customers some more and line their pockets. They were wrong, very wrong. Oracle (who bought Sun Microsystems) even flaunted how much money they would make. Well payback is a MF. Google and Amazon are making a killing selling the cloud because it is does not eat into other revenue centers. EMC, Net App, Oracle, and IBM receive the bulk of their revenue from selling huge Data Storage Systems (slinging hardware). They then sell service contracts at nosebleed margins to make those 50%+ margins. Now comes the cloud and customers can buy the storage they need with no maintenance issues. Need more storage, just rent more storage. This is why EMC sold itself to Dell and IBM and ORCL will NEVER meet their revenue numbers. Welcome to hell fellas.

$PANW has been getting slammed because a couple of “Cyber” stocks have posted lame numbers and forward looking statements. don’t get confused here, Palo Alto is the real deal. Firewalls are necessary to keep out the “bad guys” the problem with them is they slow data speeds to a crawl. $PANW is the alpha dog when it comes to keeping out the hacks and not killing network speeds. The reason, their CTO, Nir Zuk is the best in the field. He started at Checkpoint, moved to Juniper and finally had to found his own company to get a platform that worked. Cisco talks the talk but they are not even a close second. Company reports on the 23rd of this month, they will kick ass as usual.

Jobless claims up, jobless claims down, Fed will raise rates, Fed will never raise rates, WHO CARES? The only functioning economy is the one here in the good old US, there is no bubble , balloon or death cross. Don’t try to pick the next biotech, or high tech miracle, just buy $SPY. TYIA. As an aside, I will never time stamp jack, I am not getting paid to do this. if you have a problem with that, I have a site where you can hang out or just hang yourself.