07/16/2016 Weekend Update

[Cobra]

Smart money selling huge this week, not extreme though so it's a warning, a pullback should be due soon.


How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

[Cobra]

Our weekly sentiment poll is here: viewtopic.php?f=9&t=2108

[Junior Buffett]

Is futures are down big after close?

[Cobra]

Is futures are down big after close?

Yes.

[Cobra]

Summary of the week's stock picks:
viewtopic.php?f=10&t=2102&p=227122#p227122
Not a bad week.

[Al_Dente]

.........

[daytradingES]

Cl is broken

[Cobra]

The weekly stock picks are here: viewtopic.php?f=10&t=2110&p=227127#p227127

[Al_Dente]

chart of the week:
http://www.bloomberg.com/view/articles/ ... ller-coast

[Cobra]

I updated the members only Next Day Edges, forgot one evidence forecasting the next Monday.
http://www.cobrasmarketview.com/2016/07 ... day-edges/

[Trades with cats]

This one speaks to the trutheyness of this weeks move into OPEX. WHERE IS TH VOLUME !

I fully buy into the theory that as foreign markets fail hot money will run to the US but it isn't running into equities. So to me this run up was brought to you by the trading houses and their clients, corporate executives. In the old days at Hewlett Packard they used to say " tell me how I will be measured and I will show you how I will perform". So now we have the run up prior to earnings done with corporate cash so Timmy and the Boyz can make bonus.

Now we are waiting for the inevitable drop during the lock-up period because there is no sideline cash waiting to buy at the top. How much ink the last couple of weeks on how money managers were holding their nose as they bought and taking out record levels of insurance. You would have to be a summer intern to see this breakout as strong.Earnings will be what the seventh or eighth consecutive quarter of reduced GAAP earnings and even the Elizabeth Holmes kind they favor in tech land are going to be down. That doesn't mean our great experiment with central planning can't keep the act going but at some point, and it keeps getting closer, a dollar of additional debt will produce 99 cents of economic activity and that is when the game ends.

[Trades with cats]

Black Gold Round-up- Well the EIA and Baker-Hughes validated that the shale CEO's actually do what they say. Oilprice.com says they have brought their prices down into the 40's for break-even in the Permian Basin. Wall Street got them some cash this spring and they are following through with both US production and rig counts increasing. Not a surprise, the only question marks were the timing and how much.

The people who actually control world price, the Niger River Avengers have once again caused force majeure for a Nigerian blend. That was the positive news this week, so go long and depend on guys with AK's running around in rubber boats!

The narrative that has come together to explain why we are looking at yet another summer slump is once again the story of central planning and the law of unintended consequences. Apparently China several years ago decided to firm up their energy supply sort of like the US and the Saudi's by being the lender of last resort. Only the terms weren't for repayment in currency but in crude oil and not at a fixed price but at current floating prices. So Angola, Venezuela and maybe others are flooding oil into China. I am guessing the slack in other markets is being filled by John Kerry's BFF Iran. The Chinese are filling the SPR and refineries are running at 11 million barrels a day, a 3% increase over last year. Domestic demand is not keeping pace so they have unleashed the 'tea pots' to export flooding the east with gas and deisel product. So now the europeans are trying to flood the US with their surplus. As a side note Jones act (US flagged) tankers can't economically take gulf refined product beyond the east side of Florida but european refiners can afford to ship across the atlantic. AT the same time as all the asian theatrics the US based refiners had an abbreviated spring shut down. Prices were up because of Canadian wildfires and the Avengers so they moved fast to return production. And the weekly Gov't numbers kept saying record breaking US demand, it is only the two month old but accurate reports that showed the reporting errors.Anyway this gets us to where we are at for the summer and it is deja vu all over again.


So Goldman's analysis from late last fall that product surplus could freeze the market is sort of coming true.

According to the media upside has several flash points were new production comes on with the best shale under 45, more at 50 and finally new deepwater comes on at $60. So longer term we are capped at that level. Who knows what a downside panic will go to. Supposedly more tankers are being chartered for storage to reduce losses though, not to make money. I think if someone's charts point to a potential panic collapse I would give it serious consideration.

[pezhead9000]

WSJ TSM Block Money Flow: positive block money flow

[pezhead9000]

Cumulative NYAD: positive

[Trades with cats]

Great cartoon recap of the "Elizabeth Holmes Story"
http://ww2.kqed.org/futureofyou/2016/07 ... n-history/

[DellGriffith]

Its Yahoo! Week

Final Bids for Yahoo!s core business is this week, July 18th (monday). A decision is expected shortly thereafter.

After the sale of its core business, Yahoo! will become merely a holding company. The big assets on the block are Yahoo! mail, Yahoo! finance, and Yahoo! sports. CEO Marissa Meyer made a big attempt to turn around the company by investing in rebuilding its search engine, boosting its media side (even releasing original TV content with the "Communty" TV show), hiring Katie Couric as global news anchor, and buying a bunch of startup web and phone apps, but none of it seemed to work.

Jeffrey Smith, CEO of activist hedge fund Starboard Value, took an interest in Yahoo! some years ago. Smith cut his teeth on turning around companies. He first turned his father's juice business (before selling it off for a big profit), and later led a hedge fund to oust the entire board of Darden Restaurants (Olive Garden) and helped rebuild profitability by making several big changes to the company.

Smith threatened to seek multiple seats on the Yahoo! board in 2015 unless Marissa Meyer agreed to make spending cuts. She agreed in principle but then broke her word in a last ditch attempt to save Yahoo! Smith then sought and won 4 seats on the Yahoo! board and now is pushing for a sale of core business assets.

The leading potential buyers are Verizon (Who also owns AOL and seeks to leverage Yahoo! assets to make it a big player in the mobile arena on par with Google and Faceook), AT&T (same reasoning), the Daily Mail (they target a similar in the UK and would use Yahoo! to expand its footprint into the US), and even Cleveland Cavaliers owner / Quicken Loans owner Dan Gilbert paired with Warren Buffet (Gilbert has an idea of making Detroit the financial / tech capital of the world).

http://www.pymnts.com/news/retail/2016/ ... -the-wire/
http://finance.yahoo.com/news/dan-gilbe ... 53568.html
http://www.forbes.com/sites/antoinegara ... 6a774a649b

I often joke that THE market top for this 8 year run will be when someone buys Yahoo! And here we are, at an all time high and Yahoo! is about to be sold!

[Cobra]

Guys don't forget our weekly sentiment poll, thanks.
viewtopic.php?f=9&t=2108

[Trades with cats]

A while ago I said that I thought the Fed was prepping the country for negative rates like in Scandahovia. This weekend John Mauldin makes it clear in his free weekly missive.
First that in June testimony Fed Chair Yellen said yes we have the legal authority.
Second he voiced the opinion (he does publish books and run big conferences on this sort of thing) that the Fed Chair was telling the truth when she told congress that they have no plan AT THIS TIME to go to negative rates. He is sure that is what they will do when the next recession strikes.
I would add that Loretta Masters certainly made that point for the fed this week. So I am just saying it would be sensible to assume negative rates when we hit the next recession in your planning, even though in seems very bizarre at this time.

[fehro]

Daily/Weekly Candles Weeklies look strong breaking out. Dailies a little toppy.

[fehro]

P&F long long term