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Kevin O’Neill: Who’s In the Mirror?

June 19, 2017


Tom and his Stocks and Jocks guests were discussing the London attacks a few weeks ago when the “why” question was asked. Is it economic circumstances, desperation, or US incursions in the Middle East… or is it something else?

It’s something else. Specifically, these attacks are committed by people who adhere to a rigid ideology and refuse to accept the legitimacy of all others. There is a mindset that goes with labeling others infidels that is well past passionate disagreement. Once one believes that infidels are lesser creatures, once one believes that the spread of Sharia Law is commandment, and once one believes that those who disagree are evil, terrorizing others into capitulation and subjugation becomes a viable tactic.

A recent Islamic State (ISIS) manifesto said, “Even if you were to stop bombing us, imprisoning us, torturing us, vilifying us, and usurping our lands, we would continue to hate you because our primary reason for hating you will not cease to exist until you embrace Islam.”

They hate us

Certainly ISIS claims other grievances, but they ultimately are tied to accepting Islam not only as faith but as law. The manifesto explains why they hate us:

  1. Because you are disbelievers: “We hate you, first and foremost, because you are disbelievers; you reject the oneness of Allah – whether you realize it or not – by making partners for Him in worship, you blaspheme against Him, claiming that He has a son, you fabricate lies against His prophets and messengers, and you indulge in all manner of devilish practices.”
  2. Because you are liberal: “We hate you because your secular, liberal societies permit the very things that Allah has prohibited while banning many of the things He has permitted, a matter that doesn’t concern you because you Christian disbelief and paganism 32 separate between religion and state, thereby granting supreme authority to your whims and desires via the legislators you vote into power.”
  3. Because some of you are atheist: “In the case of the atheist fringe, we hate you and wage war against you because you disbelieve in the existence of your Lord and Creator.”
  4. For your crimes against Islam: “We hate you for your crimes against Islam and wage war against you to punish you for your transgressions against our religion.”
  5. For your crimes against Muslims: “We hate you for your crimes against the Muslims; your drones and fighter jets bomb, kill, and maim our people around the world, and your puppets in the usurped lands of the Muslims oppress, torture, and wage war against anyone who calls to the truth.”
  6. For invading our lands: “We hate you for invading our lands and fight you to repel you and drive you out. As long as there is an inch of territory left for us to reclaim, jihad will continue to be a personal obligation on every single Muslim.”

This brings me to my point.

Are we any different?

How does tolerance for different ways of thinking in the 2017 United States of America compare to the above? Do we debate, or do we demonize?

I am not asking about the idiot fringe on both the left and the right. I’m asking about the political mainstream – politicians, television and radio pundits, and other high profile people who influence how the masses think.

Compare the following statements, and explain the difference in tolerance.

“Allah does not love the infidels. … They are the residents of Hell, and will there forever abide.” – Sheikh Abdar Razaq Afifi, deputy president of the Department of Guidance and a member of the Board of Great Ulema of Saudi Arabia.

“Republicans don’t believe in the imagination, partly because so few of them have one, but mostly because it gets in the way of their chosen work, which is to destroy the human race and the planet. Human beings, who have imaginations, can see a recipe for disaster in the making; Republicans, whose goal in life is to profit from disaster and who don’t give a hoot about human beings, either can’t or won’t. Which is why I personally think they should be exterminated before they cause any more harm.” — The Village Voice’s Michael Feingold, in a theater review of all places

“At what point do the people tell the politicians to go to hell? At what point do they get off the couch, march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp for being an idiot?” – Talk show host Erick Erickson

How about some demonizing from elected officials?

Every member of Congress knows in his gut what’s in the people’s interest and what’s in K Street’s interest. If you think your real boss is some smug guy in a corner office with his Gucci loafers up on a mahogany deck and not the folks back home, those folks who voted for you, who gave you 25 or 50 hard-earned bucks, who put up yard signs and made calls for you, you deserve to lose. Shame on you, you shouldn’t just be fired, you should be tarred and feathered as the original tea partiers would have done. That’s my view and I welcome yours. – Former Arkansas Governor Mike Huckabee

“That Scott down there that’s running for governor of Florida. Instead of running for governor of Florida, they ought to have him and shoot him. Put him against the wall and shoot him. He stole billions of dollars from the United States government and he’s running for governor of Florida. He’s a millionaire and a billionaire. He’s no hero. He’s a damn crook. It’s just we don’t prosecute big crooks.” — Rep. Paul Kanjorski, D-Pa

“You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables, right,” Clinton said. “The racist, sexist, homophobic, xenophobic, Islamaphobic—you name it; and unfortunately there are people like that. And he has lifted them up.” — Former Secretary Clinton at an LGBTQI fundraiser.

Lock her up, Crooked Hillary, Lying Ted Cruz, Little Marco…

“The Republicans’ plan boils down to this: Dirtier air, dirtier water, less people with health insurance.” – Barack Obama

“As your governor, you’re going to be seeing a lot of me on the front page, saying ‘Governor LePage tells Obama to go to hell.”‘ — Maine Republican gubernatorial candidate Paul LePage

“Well, in addition to the NRA, the health insurance companies, the drug companies, the Iranians… Probably the Republicans.” Hillary Clinton, remarking on the enemies she is most proud to have made.

“If Hillary Clinton can’t satisfy her husband what makes her think she can satisfy America?” – retweeted from Donald Trump’s Twitter account (later blamed on a campaign)

It isn’t much of a leap to, as ISIS does, call for violence. I’ll bet it’s more mainstream than you think.

“A spoiled child (Bush) is telling us our Social Security isn’t safe anymore, so he is going to fix it for us. Well, here’s your answer, you ungrateful whelp: (audio sound of 4 gunshots being fired.) Just try it, you little b*stard. (audio of gun being cocked).” — A “humor bit” from the Randi Rhodes Show

“You have got to say no to this, and if they push this through, you need to riot in the streets. You need to riot in the streets. Our country was built on revolution and it’s about time we took it back. These people are dangerous. It’s about time to put an end to this leftist control of this country, and if a revolution is what it takes, damn it, then that’s what it’s going to take, because liberty will not be denied.” – Radio host Jim Quinn

“You guys see Live and Let Die, the great Bond film with Yaphet Kotto as the bad guy, Mr. Big? In the end they jam a big CO2 pellet in his face and he blew up. I have to tell you, Rush Limbaugh is looking more and more like Mr. Big, and at some point somebody’s going to jam a CO2 pellet into his head and he’s going to explode like a giant blimp. That day may come. Not yet. But we’ll be there to watch. I think he’s Mr. Big, I think Yaphet Kotto. Are you watching, Rush?” — Chris Matthews

“Violent protesters who shut down free speech? Time for another Kent State perhaps. One bullet stops a lot of thuggery,” — Marquette County MI GOP secretary Dan Adamini

“This is absolutely outrageous,” the group tweeted sarcastically, linking to the story. “House Republicans should NOT be shot! They should be guillotined.” — The Young Democratic Socialists at the University of Georgia, responding to a professor’s comment that Republicans “should be lined up and shot.”

“The vast right-wing conspiracy blame has been undermined by her [Clinton’s] evasions, by her outright lies, if I may say, by her pandering, by her race-baiting, and now we have what some are reading as a suggestion that somebody knock off Osama – Obama – well, both if we could.” — Fox News contributor Liz Trotta

“If I had my way, I would see Katherine Harris and Ken Blackwell strapped down to electric chairs and lit up like Christmas trees. The better to light the way for American Democracy and American Freedom!” — Democratic Talk Radio’s Stephen Crockett

“Go to your Congressman’s office and scream at him in the most colorful language possible. Hang him in effigy at protests. If you’re willing to do the time for the crime, have a swing at him.” Washington Examiner contributor Bob Owens

“Or pick up a baseball bat and take out every f*cking republican and independent I see. #f*cktrump, #f*cktheGOP, #f*ckstraightwhiteamerica, #f*ckyourprivilege.” — Orange is the New Black star Lea DeLaria responding to a meme about using music to deal with violence

“I think they should be allowed to build it followed by the hijacking of an Iranian plane right into that building and blow it to smithereens.” — Denver Post columnist Mike Rosen regarding the proposed Islamic community center in Manhattan

When demonizing isn’t enough

Islamist propaganda goes beyond calling infidels evil. They are dehumanized – vile animals and beasts, perverted transgressors and partners of Satan to be fought until religion is Allah’s alone. We Americans never would stoop that low, would we? Would we? Of course we would. In fact, dehumanizing political opposition is fashionable in some circles.

O&A: “Condoleezza Rice”

Charlie: “I’d love to f— that b*tch dude” (laughter). “She’s the F—in man”

O&A: “yeah”

Charlie “I’d F…that b*tch.”

O&A: “I just imagine the horror in Condoleezza Rice’s face…” (laughter) “as she realizes what’s going on as you were just holding her down and F’n her.”

Charlie: “Punch her all the F’n face, shut the F— up b*tch”

O&A: “That’s exactly what I meant” (laughter in background)

Charlie: “You know F— it …. and George Bush wife? I’d F— that b*tch to death” — “Shock Jocks” Opie & Anthony talk rape & violence with their guest “Homeless Charlie.”

Ted Nugent can make a greatest hits album of his ugly comments – He has called President Obama a “piece of shit” and a “subhuman mongrel” He called Hillary Clinton a “worthless bitch” and called for her to “ride one of these (guns) into the sunset.” He told Obama to “suck on my machine gun.”

“Violence solves nothing. I want a rhino to f*ck @SpeakerRyan to death with its horn because it’s FUNNY, not because he’s a #GOPmurderbro.” – Jos Whedon

“I went down this morning to sign up my Dog for welfare. At first the lady said, ‘Dogs are not eligible to draw welfare’. So I explained to her that my Dog is black, unemployed, lazy, can’t speak English and has no frigging clue who his Daddy is. So she looked in her policy book to see what it takes to qualify… My Dog gets his first check Friday. Is this is a great country or what? — Virginia Beach (Va.) Republican Committee Chairman David Bartholomew

“Sarah Palin needs to have her hair shaved off to a buzz cut, get headf*cked by a big veiny, ashy, black d*ck then be locked in a cupboard.” — Azealia Banks advocating rape

Once the opposition isn’t human, anything said or done is okay. That’s how ISIS members behead infidel mongrels, record the deeds, and put them online to terrorize opposition and delight followers without a second thought. The examples above follow the same dehumanization path. What’s next?

Orthodoxy

When it’s good versus evil, we’re expected to pick a side; and in such a war, there is no room for dissent. Follow orders without question. Shout down the opposition. Ridicule them. Eliminate the Republican Democrat infidel dogs.

Don’t question orthodoxy. ISIS doesn’t tolerate it. In increasing numbers, Americans don’t tolerate it either.

Consider a selection of responses from the left when liberal Rolling Stone writer Matt Taibbi dared to draw the distinction between Russian meddling and the Trump campaign’s collusion.

Here’s a way to evaluate that heuristic: Could you be “an independent voice” and “skeptical of both sides” and still publish 100% bullshit? (Taibbi’s response: Sure. But at least you would know it was my bullshit, and not some party’s talking points.)

btw I’d rather be in sync w/ Dem Party than in sync w/ Fox News talking points abt how Russia investigation is media “hysteria” (Taibbi’s response: Hey, Eric – when was the last time you had an opinion that wasn’t exactly in sync with the Democratic Party?)

Yeah, fuck the Democratic Party and all of its opinions. Let’s try this argument in 2018 and see what happens — is that okay, Matt? (Taibbi’s response: If you’d like your reporters to be mouthpieces for political parties, there are plenty of news outlets that will accommodate you.)

Charles Krauthammer wrote an article called “The Guardrails Can’t Contain Trump” and got these responses and many more like them from fellow conservatives.

What in the world are you talking about? Are you being paid off for outright lies or are just this one-sided you can’t see the truth?

I use to be a fan of yours. You cannot accept @Potus just like the dems. Why dont you give this country a break and let the man #MAGA

We once listened with respect when @krauthammer commented but that was prior to mindlessly impulsive unfair comments made towards @Potus

What exactly is wrong with you?

I find both authors to be honest brokers who, while ideologically driven, offer opinions that they can support with facts. Agree or disagree, they spout no party lines; and for that they are candidates for excommunication from their preferred political parties. Sharyl Attkisson says it well in her soon-to-be released book The Smear.

The trend to censor & silence rather than inform, listen and/or persuade is (in my opinion) damaging to what we’re supposed to be about.

Is it hopeless?

When it comes to politics, Americans should not like what they see in the mirror. Unfortunately only a few have taken a good long look.

Warren Buffett has looked. “I believe in hate the sin, love the sinner, and I also believe in praising by name and criticizing by category.” He went on to say, “I think it’s a mistake to get angry with your, with people that disagree with you. In the end we do have to work together… And it does not help when you demonize or get too violent with the people you’re talking to.”

Ted Nugent has looked, too. “At the tender age of 69, my wife has convinced me that I just can’t use those harsh terms,” he said last week. “I cannot, and I will not; and I encourage even my friends-slash-enemies on the left in the Democrat and liberal world that we have got to be civil to each other. I’m going to take a deep breath and I am going to back it down; and if it gets fiery, if it gets hateful, I’m going away. I’m not going to engage in that kind of hateful rhetoric anymore.”

For my part, I look to the words of Martin Luther King in his famous speech in Washington on August 28, 1963.

But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force.

The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. And they have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone.

Dr. King led a movement of people who first were enslaved and, though technically free, were oppressed for another century. No leader had more cause to demonize than he, yet he resisted the urge and exhorted his followers to do the same.

Can we heed his words in 2017?

 

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Frank Fahey: Market News for the Prepared Mind: 6.19-6.26.2017

June 19, 2017


“Chance favors the Prepared Mind.” – Louis Pasteur

“Experience traders control risk, inexperienced traders chase gains.” – Alan Farley

“It will not always be summer; build barns.” – Hesiod

“Facts are stubborn things; and whatever may be our wishes, our inclinations,
or the dictates of our passions, they cannot alter the state of facts and evidence.” – John Adams

The market generally goes on its annual summer hiatus starting on July 4th. The annual summer doldrums seem to have hit the market a couple works earlier than usual this year. It seems like this annual event started a couple of months earlier than normal.

The Dow Jones Industrials set multiple records while ending the week at record high – 21,384.28. Weaker economic reports seem to have little effect on the seemingly inexorable upward move. Be nimble

Here is an overview of the US market behavior last week and for 2017:

Data Source: OptionVue8

The CBOE Short-term Volatility Index (VXST) was down nearly 20% this past week. The VXST uses nearby and second nearby options with at least 1 day left to expiration and then weights them to yield a constant, nine-day measure of the expected volatility of the S&P 500 Index. This level for the VXST shows a lowered expectation of short-term movement for the S&P 500 movement.

Data Source: OptionVue8

The week of June 19 includes reports on existing home sales and new home sales. The prior week’s steep decline inhousing starts and permits have lowered expectations for this week’s reports. A small, yet healthy, increase is expected in the FHFA House Price Index. The coming week should be devoid of any international economic reports with the capability of of moving the markets.

This earnings season is over. There are few more earnings announcements this week than last week. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website. Earnings highlights include Adobe Systems, Lennar, HB Fuller, LA-Z Boy, Fedex, CARMAX, Winnebago, Sonic, Barnes&Noble, Carnival, Hain Celestial, and Bed Bath & Beyond

Advice to stimulate your imagination:

“The purpose of technology is not to confuse the brain but to serve the body.” – – William S. Burroughs

“I want to stay as close to the edge as I can without going over.
Out on the edge you see all kinds of things you can’t see from the center.” Kurt Vonnegut
 
“A point of view can be a dangerous luxury when substituted for insight and understanding.” – Marshall McLuhan

“If you spend more than 13 minutes analyzing economic and market forecasts,
you’ve wasted 10 minutes” Peter Lynch

 

Monday, June 19:

Economic: No major announcements.

International Economic: No major announcements.

Other: New York Federal Reserve Bank President William Dudley will speak at the Business Roundtable Meeting held by the North Country Chamber of Commerce and North Country Regional Economic Development Council, in Plattsburg, NY – 8:00AM, President Federal Reserve Bank of Chicago Charles Evans will speak about current economic conditions or monetary policy at the Money Marketeers of New York University event in New York City, with audience and media Q&A – 7:00PM.

Earnings: None meeting criteria.

 

Tuesday, June 20:

Economic: Current Account – 8:30, Redbook – 8:55.

International Economic: Germany PPI – 2:00AM, Bank of Japan Minutes – 7:50PM.

Other: Federal Reserve Vice Chairman Stanley Fischer to deliver keynote speech at the DNB-Riksbank Macroprudential Conference Series in Amsterdam – 3:15AM, Boston Federal Reserve Bank President Eric Rosengren to speak about “Bad zero: Financial Stability in a Low Interest Rate Environment” at the DNB-Riksbank Macroprudential Conference Series in Amsterdam – 8:15AM, Dallas Federal Reserve Bank President Robert Kaplan to discuss current economic conditions and implications for monetary policy at the Commonwealth Club in San Francisco – 3:00PM.

Earnings:

 

Wednesday, June 21:

Economic: MBA Mortgage Applications – 7:00, Existing Home Sales – 10:00, EIA Petroleum Status Report – 10:30.

International Economic: No major announcements

Other: Japan All Industry Index – 1:30AM,

Earnings:

 

Thursday, June 22:

Economic: Weekly Jobless Claims – 8:30, FHFA House Price Index – 9:00, Bloomberg Consumer Confidence – 9:45, Leading Indicators – 10:00, EIA Natural Gas Report – 10:30, Kansas Cit Fed Manufacturing Index – 11:00AMMoney Supply – 4:30.

International Economic: Great Britain CBI Industrial Trends Survey – 2:00AM.

Earnings:

 

Friday, June 23:

Economic: PMI Composite Flash – 9:45, New Home Sales – 10:00, Consumer Sentiment – 10:00, Baker Hughes Rig Count – 1:00.

International Economic: France GDP – 2:45AM, Germany PMI Composite Flash – 3:30Am, Eurozone PMI Composite Flash – 4:00AM.

Other: St. Louis Federal Reserve Bank President James Bullard to discuss the U.S. economy and monetary policy at the Illinois Bankers Association Annual Conference in Nashville, TN – 11:15, Cleveland Federal Reserve Bank President Loretta Mester to be the keynote speaker at The Policy Summit on Housing, Human Capital and Inequality: Transforming Regional Economies: Growth and Equity through Policy and Practice, with audience and media Q&A, in Cleveland, Ohio – 12:40PM, Federal Reserve Board Gov. Jerome Powell to speak at the Federal Reserve Bank of Chicago Symposium on Central Clearing, with audience Q&A – 2:15PM.

Earnings: None meeting criteria.

 

Monday, June 26:

Economic: Durable Goods Orders – 8:30, Chicago Fed National Activity Index – 8:30, Dallas Fed Manufacturing Survey – 10:30.

International Economic: No major announcements.

Earnings: None meeting criteria.

 

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Frank Fahey: Market News for the Prepared Mind: 6.12-6.19.2017

June 12, 2017


“Chance favors the Prepared Mind.” – Louis Pasteur

“Experience traders control risk, inexperienced traders chase gains.” – Alan Farley

“I had nothing to offer anybody except my own confusion.” – Jack Kerouac

“You should never make predictions, especially about the future.” – Samuel Goldwyn

Sorry for the delay in posting. A full weekend with family has resulted in a truncated version of this blog. The numbers for last week paint a picture – with or without commentary. The divergence between the major indexes was of a magnitude I have rarely seen during my years as a trader. A FANG sell-off (Facebook, Apple, Amazon, Netflix and Google) had minimal impact upon other equity indexes. The sell-off was a classic stock rotation with money going from FANG and other tech stocks to the financial sector. The rotation of sectors and increasing intraday movement are characteristic of late stage bull markets.

Here is an overview of the US market behavior last week and for 2017:

Data Source: OptionVue8

The VIX gained nearly 10% last week. The monthly VIX futures basically held constant. The Short-Term Volatility Index (VXST) show a gain of Just over 22%. The tenor of the VIX options market was modestly bullish. Russell Rhoads’, CBOE VIX guru, trade of the week took place on Friday. Per Russell, “A trader purchased 3000 VIX Jun 21st 14 Calls at 0.36 and then sold 4500 of the VIX Jun 21st 17 Calls for 0.18.” This ratio spread was done for even money.

Data Source: OptionVue8

The economic calendar heats with reports on industrial production, retail sales, consumer prices and housing starts. The highlight of the week will be the Fed’s rate decision on Wednesday and its comments in the subsequent press conference. will be the highlight of the week. The wild card, as always, will be potential political fireworks from inside the Beltway. International economic news will be highlighted by announcements by the Bank of Japan and the Bank of England. Both are expected to maintain current policy and interest rates.

This earnings season is over. There are only a smattering of earnings announcement this week. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website. Earnings highlights include H&R Block, John Wiley & Sons, Kroger, and Bob Evans Farms.

Advice to stimulate your imagination:

“The purpose of technology is not to confuse the brain but to serve the body.” – – William S. Burroughs

“In the business world, the rearview mirror is always clearer than the windshield.” – Warren Buffett

“A point of view can be a dangerous luxury when substituted for insight and understanding.” – Marshall McLuhan

“If you spend more than 13 minutes analyzing economic and market forecasts,
you’ve wasted 10 minutes” Peter Lynch

 

Monday, June 12:

Economic: No major announcements

International Economic: No major announcements.

Earnings: None meeting criteria.

 

Tuesday, June 13:

Economic: NFIB Small Business Optimism Index – 8:30, PPI – FD – 8:30, Redbook – 8:55.

International Economic: Great Britain CPI & PPI – 4:30AM, China Fixed Asset Investment, Industrial Production, and Retail Sales – 10:00PM.

Other: FOMC Meeting Begins. New York Federal Reserve President Willian Dudley speaks about the Impact of Regulation on a Bank’s Internal Capital Allocation at the Prudential Bank Regulation Conference, in Washington D.C. – 1:45PM.

Earnings:

 

Wednesday, June 7:

Economic: MBA Mortgage Applications – 7:00, Consumer Price Index – 8:30, Retail Sales – 8:30, Business Inventories – 10:00, EIA Petroleum Status Report – 10:30.

International Economic: Germany CPI – 2:00Am, Great Britain Labour Market Report – 4:00AM, Eurozone Industrial Production – 5:00AM.

Other: FOMC Meeting Announcement 2:00PM, FOMC Forecasts – 2:00PM, Fed Chair Press Conference – 2:20.

Earnings:

 

Thursday, June 15:

Economic: Weekly Jobless Claims – 8:30, Philadelphia Fed Business Outlook Survey – 8:30, Empire State Manufacturing Survey – 8:30 – 8:30, Import and Export Prices – 8:30, Industrial Production – 9:15, Bloomberg Consumer Confidence – 9:45, Housing Market Index – 10:00, EIA Natural Gas Report – 10:30, Money Supply – 4:30.

International Economic: Great Britain Retail Sales- 4:30AM, Eurozone Merchandise Trade – 5:00AM

Other: Bank of England Announcement – 7:00AM.Bank of Japan Announcement.

Earnings:

 

Friday, June 16:

Quadruple Witching

Economic: Housing Starts – 8:30, Atlanta Fed Business Inflation Expectations – 10:00, Consumer Sentiment – 10:00, Baker Hughes Rig Count – 1:00.

International Economic: Eurozone HICP – 4:00AM.

Other: Dallas Federal Reserve Bank President Robert Kaplan to speak at a moderated Q&A held by Park Cities Rotary Club in Dallas, with audience and media Q&A – 12:45PM.

Earnings: None meeting criteria.

 

Monday, June 19:

Economic: No major announcements

International Economic: No major announcements.

Other: New York Federal Reserve Bank President William Dudley will speak at the Business Roundtable Meeting held by the North Country Chamber of Commerce and North Country Regional Economic Development Council, in Plattsburg, NY – 8:00AM, President Federal Reserve Bank of Chicago Charles Evans will speak about current economic conditions or monetary policy at the Money Marketeers of New York University event in New York City, with audience and media Q&A – 7:00PM.

Earnings: None meeting criteria.

 

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Frank Fahey: Market News for the Prepared Mind: 6.5-6.12.2017

June 5, 2017


“Chance favors the Prepared Mind.” – Louis Pasteur

“Experience traders control risk, inexperienced traders chase gains.” – Alan Farley

“All you need is the plan – the road map – and the courage to press on to your destination.” – Earl Nightingale

“To achieve anything in this game,
you must be prepared to dabble on the boundary of disaster.” – Stirling Moss

The Dow Jones Industrial Average, the Stand and Poor’s 500, and the NASDAQ Composite all closed at record highs last week. The Dow Jones Transportation Index is flirting with new highs. This stellar performance came despite pronouncements by analysts that the “Trump Trade” is dead, weaker than expected job growth and lackluster consumer spending.

Trading has an underpinning of discipline combined with the trader’s personal risk/reward comfort zone and their understanding of what is a “normal” market. Traders often discuss the concept of “normal.” Our success depends on being able to reduce market movement and trends to a lowest common denominator. This basic view of the market is what is “normal.”

My recent conversations with other professional options traders have shown a growing consensus that we are seeing a new ”normal.” A new “normal” requires the options trader to reassess current strategies within the context of current market intraday movement, implied volatility for options, and the liquidity/investor participation individual option markets. This is another example of the need “The Prepared Mind” in successful implementation and management of option strategies.

Here is an overview of the US market behavior last week and for 2017:

Data Source: OptionVue8

The VIX has closed has closed below 10 more time this year than any other year since 1990. The average VIX closing price is lower than any other yearly averages during the same period. The VIX and associated derivatives held strong this week despite record high in the major equity indexes. Spread strategies being implemented in VIX options tend to be bullish. The spreads being quoted appear to be reflecting the belief the VIX is trading around a support level. This level appears to be rooted in psychological feelings rather than technical facts.

Data Source: OptionVue8

This week will be a much quieter last week. The focus will be on the service sector. manufacturing, the consumer, and inventories. The highlights of the week is fired FBI Director James Comey is scheduled to testify before the Senate Intelligence Committee in an open session on Thursday morning at 10 AM. This testimony will be aired live on ABC, CBS, CNN and other networks.

This earnings season is winding down. It has been a strong earnings season. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website. Earnings highlights include Thor, Casey’s General Sore, Fred’s, GIII Apparel, Oxford Industries, Brown-Forman, Analogic, Verifone, and J.M. Smucker.

Advice to stimulate your imagination:

“Sometimes paranoia is just having all the facts.” – William S. Burroughs

“You’ll always miss 100% of the shots you don’t take.” – Wayne Gretzky

“All media exist to invest our lives with artificial perceptions and arbitrary values.” – Marshall McLuhan

“If you spend more than 13 minutes analyzing economic and market forecasts,
you’ve wasted 10 minutes” Peter Lynch

 

Monday, June 5:

Economic: Gallup US Consumer Spending Measure – 8:30, PMI Services – 9:56. Factory Orders – 10:00, ISM Non-Manufacturing Index – 10:00, Labor Market Conditions Index = 10:00, TD Ameritrade IMX – 12:30-

International Economic: No major announcements.

Earnings:

 

Tuesday, June 6:

Economic: Gallup US ECI – 8:30, Redbook – 8:55, JOLTS – 10:00.

International Economic: Eurozone Retail Sales – 5:00AM.

Earnings:

 

Wednesday, June 7:

Economic: MBA Mortgage Applications – 7:00, Gallup US Job Creation Index – 8:30, EIA Petroleum Status Report – 10:30.

International Economic: Germany Manufacturers’ Orders – 2:00AM, Japan GDP = 7:50PM. China Merchandise Trade Balance – 10:00PM.

Earnings:

 

Thursday, June 8:

Economic: Weekly Jobless Claims – 8:30, Bloomberg Consumer Confidence – 9:45, Quarterly Services Survey – 10:00, EIA Natural Gas Report – 10:30, Money Supply – 4:30.

International Economic: Germany Industrial Production- 2:00, France Merchandise Trade – 2:45AM, Eurozone GDP – 5:00AM, China PPI and CPI – 9:30PM

Other: European Central Bank Announcement – 7:45AM, Fired FBI Director James Comey is scheduled to testify before the Senate Intelligence Committee in an open session on Thursday morning at 10 AM.

Earnings:

 

Friday, June 9:

Economic: Wholesale Trade – 10:00, Baker Hughes Rig Count – 1:00.

International Economic: Japan Tertiary Index – 12:30AM, German Merchandise Trade – 2:00, Great Britain Industrial Production and Merchandise Trade – 4:30Am.

Earnings:

 

Monday, June 12:

Economic: No major announcements

International Economic: No major announcements.

Earnings:

 

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Frank Fahey: Market News for the Prepared Mind: 5.29-6.5.2017

May 30, 2017


“Chance favors the Prepared Mind.” – Louis Pasteur

“Experience traders control risk, inexperienced traders chase gains.” – Alan Farley

“We are pioneers and the history of pioneers is not that good.” – Jeff Bezos

“I have a right to be blind sometimes.” – Lord Nelson

The blog will continue to focus on numbers and “facts.” The major indices rebounded from two weeks of negative numbers to set new all-time highs. The market’s ability to ignore “bad news” was a topic of conversation this week among the financial news talking heads.

Economic data has been tepid of late. The economic news continued this trend last week with despite disappointing GDP numbers for the first quarter, new-home sales, and durable goods orders. Many analysts attributed the strength of the US domestic equity indexes on better than expected results from overseas.

Other analysts have scrapped their crystal balls. The most puzzling explanation was, “The markets just want to go higher.” This analysis should be called the Cyndi Lauper Theory in honor of her song “Girls Just Want to Have Fun.” Please give me that man’s seat at the table.

Here is an overview of the US market behavior last week and for 2017:

Index 26-May Change % Weekly 2017 YTD Volatility of Index
Dow Jones Industrials (DJIA) 21,080.28 275.44 1.32% 6.67% 9.60% (VXD)
S&P 500 (SPX) 2,415.82 34.10 1.43% 7.93% 9.81% (VIX)
NASDAQ 100 (NDX) 5,788.36 136.80 2.42% 19.01% 12.26% (VXN)
Russell 2000 (RUT) 1,382.24 14.91 1.09% 1.85% 14.79% (RVX)
S&P 100 (OEX) 1065.35 14.56 1.39% 7.46% 9.16% (VXO)
Crude Oil (CLN7) 49.87 (1.09) -2.14% -7.46% 30.04%(OVX)
Dow Jones Transportation (TRAN) 4527.94 199.52 4.61% 11.76% NA
CBOE Volatility Index (VIX) 9.81 (2.23) -18.52% NA

Data Source: OptionVue8

The VIX closed just above the post financial crisis lows from earlier this month. The CBOE Short-term Volatility Index (VXST) closed at an all-time low on Friday. Russell Rhoads, CBOE VIX guru, points out the low VIX levels are not accompanied by SKEW in the 150’s. Usually, SKEW is inversely related to low VIX levels. The current SKEW a lack of concern for tail risk despite the low VIX. There appears to be a lack of near term fear about economic and political turmoil.

Indexes Ticker 26-May 19-May Change % Change
CBOE Volatility Index VIX 9.81 12.04 (2.23) -18.52%
VIX June Future (6/21/2017) VXM7 11.925 12.725 (0.80) -6.29%
VIX July Future (7/18/2017) VXN7 12.925 13.475 (0.55) -4.08%
VIX August Future (8/18/2017) VXQ7 13.775 14.425 (0.65) -4.51%
CBOE Short-term Volatility Index VXST 7.60 10.98 (3.38) -30.78%
CBOE 3 Month Volatility Index VXV 12.44 13.49 (1.05) -7.78%
CBOE Mid-term Volatility Index (6 month) VXMT 14.84 15.57 (0.73) -4.69%
VIX of VIX VVIX 81.81 87.21 (5.40) -6.19%
CBOE SKEW Index SKEW 125.41 131.39 (5.98) -4.55%
Long VIX ETP’s
ProShares Ultra VIX Short Term Futures ETF UVXY 10.95 12.95 (2.00) -15.45%
iPath S&P 500 VIX Short Term Futures ETN VXX 13.46 14.64 (1.18) -8.06%
ProShares VIX Short Term Futures ETF VIXY 11.22 12.16 (0.94) -7.73%
iPath S&P 500 VIX Mid-Term Futures ETN VXZ 24.60 25.08 (0.48) -1.91%
Inverse VIX ETP’s
ProShares Short VIX Short Term Future ETF SVXY 153.49 142.40 11.09 7.79%
Daily Inverse VIX Short Term ETN XIV 79.54 73.67 5.87 7.97%

Data Source: OptionVue8

It will be a very heavy week for economic news. The week starts with markets closed for Memorial Day in the U.S., and ends with the U.S. Employment Situation report. In between, we get a wide range of employment reports and indexes plus Consumer Spending, the S&P CoreLogic Case-Shiller Home Price Index, and International Trade.

This earnings season is winding down. It has been a strong earnings season. Confirm the date and time of any company’s earnings announcement before trading any earnings announcement strategy. The most accurate source of this information is the company’s investor relations website. Earnings highlights include g-III Apparel, Michael Kors Holdings, Vera Bradley, Analog Devices, Dollar General, Ciena, and Broadcom,

Advice to stimulate your imagination:

“Sometimes paranoia is just having all the facts.” – William S. Burroughs

“The secret of life is to have no fear; it’s the only way to function.” – Stokely Carmichael

“All media exist to invest our lives with artificial perceptions and arbitrary values.” – Marshall McLuhan

“The key to risk management is never putting yourself in a position where you cannot live to fight another day.” – Dick Fuld

Monday, May 29:

US Holiday – Memorial Day – Markets Closed

International Economic: Japan Household Spending and Unemployment Rate – 7:30PM.

Earnings:

SYMBOL B/A 5/26 Close AVGVOL AVG MOVE SMA 10 50% FIB
RYAAY BMO $106.22 255,745 3.11% $101.90 $97.03
TTM BMO $37.07 1,405,530 7.33% $35.18 $35.09

 

Tuesday, May 30:

Economic: Personal Income and Outlays – 8:30, S&P Corelogic Case-Shiller HPI -9:00, State Street Investor Confidence Index – 10:00, Dallas Fed Manufacturing Survey – 10:30.

International Economic: France GDP – 2:45AM, Eurozone Economic Sentiment – 5:00AM, Germany CPI – 8:00AM, Japan Industrial Production – 7:50PM, China CFLP Manufacturing PMI = 9:00PM.

Earnings:

SYMBOL B/A 5/26 Close AVGVOL AVG MOVE SMA 10 50% FIB
ADI BMO $82.81 3,287,900 2.71% $81.27 $78.80
KORS BMO $36.76 2,043,180 5.29% $36.41 $37.17
OLLI AMC $41.70 597,864 3.24% $40.30 $39.59
PANW AMC $118.08 2,227,790 12.80% $117.19 $114.72
SMTC AMC $37.10 488,458 2.13% $36.22 $35.27
VAL BMO $112.99 867,747 0.16% $112.22 $112.32

 

Wednesday, May 31:

Economic: MBA Mortgage Applications – 7:00, Redbook – 8:55, Chicago PMI – 9:45, Pending Home Sales Index – 10:00, Beige Book – 2:00, Farm Prices – 3:00.

International Economic: Germany Retail Sales – 2:00AM, France PPI, Germany Unemployment Rate – 3:55AM, Eurozone Unemployment Rate – 5:00AM, Japan PMI Manufacturing Index – 8:30PM.

Other: Dallas Federal Reserve Bank President Robert Kaplan to participate in a moderated Q&A session with audience and media at the C. Peter McColough Series on International Economics in New York City – 800AM, San Francisco Federal Reserve Bank President John Williams to speak at The Bank of Korea International Conference 2017: Global Economic and Financial Challenges: The Decade Ahead in Seoul, with media and audience Q&A – 7:30PM.

Earnings:

SYMBOL B/A 5/26 Close AVGVOL AVG MOVE SMA 10 50% FIB
AVGO AMC $241.21 2,361,800 3.57% $237.92 $228.88
COO AMC $217.46 380,447 1.44% $214.06 $208.60
DCI BMO $46.68 508,991 7.10% $46.72 $46.31
DG BMO $72.32 2,877,090 4.78% $71.46 $71.91
FIVE AMC $52.63 1,163,250 5.97% $52.12 $50.37
GWRE AMC $67.73 385,908 2.62% $63.50 $63.76
JOY BMO $28.30 1,114,410 0.12% $28.25 $28.21
LULU AMC $48.23 3,858,690 12.79% $49.32 $51.84
MBLY BMO $61.80 5,931,020 2.59% $61.78 $61.70
RH AMC $57.81 1,773,290 16.53% $57.58 $53.65
TECD BMO $94.66 427,206 5.06% $93.70 $94.95
VMW AMC $96.81 1,205,560 6.26% $94.61 $93.96
WDAY AMC $99.99 1,536,100 7.58% $97.71 $93.12

 

Thursday, June 1:

Economic: Motor Vehicle Sales, Chain Store Sales, Challenger Job-Cut Report – 7:30, ADP Employment Report – 8:15, Weekly Jobless Claims – 8:30, Productivity and Costs – 8:30, Gallup Good Jobs Rate – 8:30, PMI Manufacturing Index – 9:45, Bloomberg Consumer Confidence – 9:45, ISM Manufacturing Index – 10:00, Construction Spending – 10:00, EIA Natural Gas Report – 10:30, EIA Petroleum Status Report – 11:00, Money Supply – 4:30.

International Economic: Germany PMI Manufacturing Index – 3:55AM, Eurozone PMI Manufacturing Index – 4:00SM

Earnings: None meeting criteria.

 

Friday, June 2:

Economic: Employment Situation – 8:30, International Trade – 8:30, Baker Hughes Rig Count – 1:00.

International Economic: Eurozone PPI – 5:00AM.

Earnings: None meeting criteria.

 

Monday, June 5:

Economic: Gallup US Consumer Spending Measure – 8:30, PMI Services – 9:56. Factory Orders – 10:00, ISM Non-Manufacturing Index – 10:00, Labor Market Conditions Index = 10:00, TD Ameritrade IMX – 12:30

International Economic: No major announcements.

Earnings:

SYMBOL B/A 5/26 Close AVGVOL AVG MOVE SMA 10 50% FIB
CASY AMC $115.78 505,433 3.57% $114.47 $113.30
THO AMC $91.40 835,078 7.83% $93.33 $94.37

 

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