Weekly Update Ended Feb 10, 2018

Good morning.

I hope everyone is well rested from the madness of last week. I also hope most of you were able to avoid the positional pain as well, as the downdraft was fast and furious.

Riddle me this, how many of your family, friends and/or colleagues have told you last week that they are moving out of stocks and into bonds because Wall Street is saying that yields are now closer to 3% than not? The answer? Not one single person would have told any one of us that they were moving out of equity and into bonds and/or switching their allocations from equity funds into fixed income funds. That is just the shite that Wall Street feeds Ma and Pa who lap it up eagerly as a reason for the sell-off.

The real reason is simple enough as far as I am concerned. The big macro notes predicting doom and gloom from the likes of Goldy, BAML, JPM had stopped working or were working only to a very limited degree (effect lasting intra-day or a day or two), so Wall Street came up with this shite. Bond yields, my axx. It's simple, most of the money-center banks and broker-dealers trading desks were probably caught short as the markets continued to climb and the firms had to come up with the next crisis as a reason to take Ma and Pa's money. So, they created a hue and cry about the FOMC being bearish (which we all know they were not) and that led to bond yields climbing and that was enough for the algos to take over. 

Simple as that. 

At least for me, it is. You might not agree with what I am saying or think me a conspiracy nut, however, I would love to hear your explanation for the "made on Wall Street" crash. 

However, it is what it is and it is also the battlefield we have chosen, so it's all good. 

Last week I wrote the following--"Will our markets correct? Of course, they will. Was Friday the extent of the correction? Is there more to come? The answer to both questions is it remains to be seen. No one and I mean NO ONE can answer that for us except for with a guess. The markets have been on a tear in the first four trading weeks of 2018 and a pullback would be welcome by both sides, dark-side and those in the light."

So, we have had our correction (indices were down over 10% at one point) so does that mean it's "up, up and away" time? 

Not necessarily, however, today could be a terrific day with The POTUS set to unveil the infrastructure investment plan. 

As of February 10th, 2018, the jaysomaney.com options account is up $280,252 or 106% and the options account has a net liquidation value of $545,878 with cash of $475,971.

As of February 10th, 2018, the jaysomaney.com equity account is flat and the account has a net liquidation of $500,000, all of it in cash.

As of February 10th, 2018, the jaysomaney.com mini account is down $1,606 or 22% and the account has a net liquidation value of $5,714 with $5,268 in cash.

The combined liquidation value of the three jaysomaney.com accounts as of Fen 10th, 2018 currently stands at $1,051,592, up 36.1% overall for 2018. $981,239 is the net cash position of all three accounts combined.

Our cash position is down slightly from a week ago as I was able to add a couple of positions however if last week was the Big One and it is indeed up, up and away, I will need to deploy some of that cash quickly. 

Last week:

The S&P was down 5.2% (in addition to the -3.4% the week ago and were it not for the very late and last 20 minute bounce on Friday, the index would be down over 10% in 2 weeks)

The Nazz was lower by 5.1% ( in addition to the -3% the week ago)

The Dow dropped 5.3% (in addition to the -4.1% the prior week)

FAANG:

FB was down 7.4% (two-week loss of 7.4%)

AAPL was down 2.2% (two-week loss of 9%)

Bezos (AMZN) down 6.3% (two-week loss of 4.3%)

Flixsta (NFLX) down 6.7% (two-week loss of 9.7%) 

GOOGL down 6.6% (two-week loss of 12.4%) 

BATS:

BIDU hammered down 7.7% (two-week loss of 18.1%)

BABA dropped 5.7% (two-week loss of 16.7%)

TCEHY down 6.5% (two-week loss of 15%)

SINA gave back 7.3% (two-week loss of 15.3%).

So, what jumped out at my team and a few investors who watch my numbers closely, is the fact that despite the markets in major turmoil the last couple of weeks, our portfolio actually went up in value the last couple of weeks. Cash is and always will be the best hedge out there. Yes, Wall Street will love for all of us to spend money on rolling hedges (via derivatives and outright shorting) but that is all a crock of shite and most folks that spout off about hedging really have no clue about the cost of carrying a rolling hedge on a permanent basis. They hear stuff on the boob tube about hedges (most of which is pure shite) and will walk around telling everyone how they were short this and short that when we have an event like we have seen the last couple of weeks. The truth--reality is far different from the shite WS peddles to investors every day. In order to maintain hedges at all times in one's portfolio, there are massive costs involved, upwards of 1%/week or so depending on the size of assets under management, and no one can bear that cost because that is a cost that goes unused almost 95% of the time if not more. Which is why even dedicated short funds underperform most of the time due to the one simple fact-they have to sit around and wait on an event (manufactured or justified) like we have seen the last couple of weeks in order to make any money from the dark side.

So the next time an investor buddy asks how much money you made on the short side when we have had an event like the past two weeks, pat him/her on the back, congratulate him/her for his "brilliance", wish him well for the future and run as far away as you can and as fast as you can.

THERE IS NO BETTER HEDGE THAN CASH. 

THIS NEXT SECTION IS FOR THOSE OF YOU WHO WISH TO HEDGE YOUR PORTFOLIO-- I HAD STOPPED INCLUDING THIS SECTION HOWEVER BASED ON WHAT I HAVE READ AND HEARD FROM MY INVESTORS/SUBSCRIBERS/IMAs, I WILL MORE THAN LIKELY ALSO LEAVE THIS SECTION IN GOING FORWARD.

Use the same hedges as last week as these hedges should provide you the most bang for your money all things being equal. Buy any one or buy them all depending on the size of your account and the extent you wish to hedge your account(s).

Go Long SQQQ or buy SQQQ Calls (SQQQ is proshares ultrashort QQQ-leveraged 3x)proshares ultrashort QQQ-leveraged 3x)

Buy QQQ Puts

Buy Puts on any of the FANG names (most volatile) or short the names individually if you prefer

Go long SDS or buy SDS Calls (SDS are the proshares ultrashort S&P500--leveraged 3xproshares ultrashort S&P500--leveraged 3x

Use VIX and VIX related ETF/ETNs (extremely risky as we all saw last week)

PLEASE NOTE THESE HEDGES ARE JUST MY SUGGESTIONS. AS SUBSCRIBERS VERY WELL KNOW, FOR ME, CASH IS (and has always been) THE BEST HEDGE. IF NOT CASH, IT'S EQUITY SINCE THAT CAN BE CONVERTED TO CASH IN SECONDS.

Remember, it is you who hits the buy button or sell button each and every trade and there are no exceptions there at all. 

Also, I am bringing back the following section as well after what we all went through last week as a reminder:

Please keep your positions in size with your account size (value). Most importantly please remember that I am running a marathon here and not a sprint. I am in no hurry whatsoever for any position and thus will not enter a position unless I feel the risk/reward is stacked in my favor. Yes, I will occasionally have positions work against me despite the risk/reward prior to the trade but if I was batting a thousand, none of us would be in our little room. We would all be on our own private islands. Even more important for all of us to remember that trades and opportunities will come no matter what the markets are doing. 

Please, please don't roll the dice and don't bet on anyone single position without keeping the size relative to your overall account. I promise you even 1 or 2 call options at a time add up to spectacular returns over time. 

There is nothing worse than seeing someone (new or experienced) blow up his/her own account by going "all in", long or short.  Please avoid those sort of "investments" As my dad used to tell me all the time, "Rome wasn't built in a day".

Remember together we will all get there, wherever that may be for each of us individually.

Not a sprint but a marathon. (This is the most important takeaway for all of us) Will always hold true as far as I am concerned no matter what anyone else thinks on the outside. 

Until next week, may the trading Goddesses and Gods smile on all our trades, investments and dice rolls.

Our futures are up 30 on the e-minis at the moment. We could have seen the worst of the manufactured on Wall Street "correction". The key word is "could:

We shall see.

Stay safe
Jay

Weekly update Ended Feb 3, 2018

Good morning:

I hope each and every one of you had

Mega-cap techland earnings are behind us and by and large, numbers were pretty good. Netflix and Amazon were spectacular, Facebook and Google were good while Apple reported okay numbers (given the intense fake news and lies that went into their ER) albeit completely underwhelming. 

There was so much noise shouting and sweaty-palmed hand-wringing from the always-short-never-a-loss gang over the weekend that the end of the world is upon us given the beatdown in the markets on Friday. The fake news from that cabal focused on the FOMC statement, which they twisted around to hawkish. However, all the Fed said in that statement was that the tight job market could create an increase in wages which in turn could lead to inflation goals being achieved by 2018. To me and you that would be common sense, however, the always short gang took that as a sign that the end of the world is here. Again. Of course, they have been at it for the last 5 years or so with the same tired song and dance and cryptic messages and dire warnings.

Will our markets correct? Of course, they will. Was Friday the extent of the correction? Is there more to come? The answer to both questions is it remains to be seen. No one and I mean NO ONE can answer that for us except for with a guess. The markets have been on a tear in the first four trading weeks of 2018 and a pullback would be welcome by both sides, dark-side and those in the light.

Our portfolio is almost all cash with a combined liquidation value of all three accounts at $1,049,776 with $1,006,419 in cash.

As of February 3rd, 2018, the jaysomaney.com options account is up $277,252 or 104% and the options account has a net liquidation value of $542,878 with cash of $500,501.

As of February 3rd, 2018, the jaysomaney.com equity account is flat and the account has a net liquidation of $500,000, all of it in cash.

As of February 3rd, 2018, the jaysomaney.com mini account is down $422 or 6% and the account has a net liquidation value of $6,898 with $5,918 in cash.

I spent most of last week taking down positions and we are now extremely heavy in cash as you can see from the numbers above.

Were it not for the fact that I got caught with my pants down with a long position in Apple, 2018 would have been an almost perfect beginning for me. I guess the $16 or so point slide in the shares going into the ER print had me thinking that it could not get any worse. I WAS WRONG. It can and often does and did get worse. Will never happen again. In hindsight, the slide makes perfect sense (even putting aside the fake news and lies from folks like Kuo of KGI and Nikkei Asian et al) given the fact that Netflix and Amazon and even Google and Microsoft are getting into every possible area that makes sense for future growth while Apple management asks investors to make animojis of themselves. Give me a freaking break, Tim(id) Cook.

Last week:

The S&P was down 3.4%

The Nazz was lower by 3%

The Dow dropped 4.1%

FAANG:

FB absolutely pancaked.

AAPL got killed for 6.7%

Bezos (AMZN) up 2% after all that excitement

Flixsta (NFLX) down 3%

GOOGL down 5.8%

BATS:

BIDU hammered down 10.4%

BABA dropped 9%

TCEHY down 8.5%%

SINA dropped 8%.

Our futures are down 8.5 (e-mins) after being down 2x earlier this morning as investors try to figure out whether this is The Big One. 

From where I sit, the markets might head a bit lower from here or they may not. What is certain is the fact that the global economic recovery is only just beginning and the Central Banks (including our asinine Fed) would be crazy to hike rates too fast and derail that recovery. The "correction" last week was the typical over-reaction/manipulation we see in our markets from time to time. That is not to say that the downwards move stops here and now. All I am saying is that from a fundamental perspective the markets should continue higher once this pull-back has run its course.

I have been saying for years that our markets are extremely difficult and this is the hardest way to make a living. Yes, even more than surgeons or any other job in the world. This last week yet again hammers that point home. 

We have to be extremely careful going forward as the always-short-never-wrong-never-a-penny-lost gang will be out in force trying to scare investors into heading for the hills. The fake news purveyors and the financial press will be at their breathless best in trying to convince everyone how bad things are in the big, bad world. So, en garde it has to be even more so than normal.

May the trading Goddesses and Gods smile wide on all your trading/investing/dice-roll decisions this week.

See all of you in the chat room.

Be safe

Jay 

Weekly Update Ended January 27, 2018

End of the first month in 2018 and already so much has happened. Tech is no longer dreck and has become the go-to sector it seems. At least thus far in 2018 it has.

The one exception to the tech love is Apple. Fruity continues to confound and confuse with almost every sellsider on the Street having either thrown in the towel for this current (March) quarter and/or ducking and diving for cover by playing the CYA game. The naysayers are out in droves and the fake news purveyors are also having a field day. Most of that blame has to lie on the narrow shoulder of Tim Cook who as CEO has missed chance upon chance to take the company to greater heights. Leaving the fake news unchecked creates so much downwards pressure on the stock and I am sure so many investors are getting hurt while Timid Tim and his gang keep adding up their million with absolutely not a dime of their money ever at stake. 

Cest la vie.

This week is an absolute Yuge week for techland with most of the mega-caps reporting including Alibaba, Apple, Amazon, and Google on Thursday (BABA pre-bell). Talking about earnings this week, this is what's on tap besides many, many others:

Seagate Technology (NASDAQ:STX) )pre-bell), Lockheed Martin (NYSE:LMT), Rambus (NASDAQ:RMBS) today.

Advanced Micro Devices (NASDAQ:AMD), McDonald's (NYSE:MCD), Electronic Arts (NASDAQ:EA), Pfizer (NYSE:PFE), Juniper Networks (NYSE:JNPR), Sprint (NYSE:S) and Illumina (NASDAQ:ILMNon Tuesday.

Microsoft (NASDAQ:MSFT), eBay (NASDAQ:EBAY), Facebook, Qualcomm (NASDAQ:QCOM), PayPal (NASDAQ:PYPL), ConocoPhillips (NYSE:COP), Boeing (NYSE:BA) and AT&T (NYSE:Ton Wednesday.

Visa (NYSE:V), GoPro (NASDAQ:GPRO), Alibaba (NYSE:BABA), Apple, Alphabet, Amazon, UPS (NYSE:UPS) and MasterCard (NYSE:MAon Thursday.

Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), Merck (NYSE:MRK) and Phillips 66 (NYSE:PSXon Friday.

In addition, don't forget the FOMC meeting starting tomorrow and concluding Wednesday (no change in rates expected).

We also have the State of the Union from the POTUS to help guide our trading week.

On Friday, we have the January NFP data to contend with as well.

The jaysomaney.com main/options account finished the week with a liquidation value of $608,059 and is now up $342,433 for 2018 with cash at $191, 751.

The jaysomaney.com equity account (funded on Jan 22, 2018, from the main/options account) finished the week with no trade and is sitting on $500,000 in cash.

The jaysomaney.com mini-account finished last week at a liquidation value of $8,428 and is now up 15% in 2018 and has $5,360 in cash.

The combined liquidation value of the jaysomaney.com accounts, as of Jan 22, 2018, is $1,116,487 and the three accounts combined hold $697,111 in cash. So from an initial funding amount of $100,000 on Feb 1, 2016, to over $1.1 million in just under 2 years.

Last week:

The S&P was up 2.2%

The Nazz was higher by 2.3%

The Dow climbed ahead by 2.1%

FAANG:

FB up 4.8%

AAPL down 3.9%

Bezos (AMZN) up 8.3%

Flixsta (NFLX) up 24.6%

GOOGL up 3.9%

BATS:

BIDU up 1.6%

BABA up 11.5%

TCEHY up 4.7%

SINA up 1.8%.

Our futures are down 7.5 (e-mins) after being down 11.5 as the manipulation in the most manipulated market in the world continues unabated. 

May the trading Goddesses and Gods smile wide on all your trading/investing/dice-roll decisions this week.

See all of you in our little chat room.

Be safe

Jay

Weekly Update Ended Jan 13, 2018 & An Important Update

Two weeks in and already so much has happened. Tech love has come back all of a sudden although those of you who have been with me the last couple of years shouldn't be too surprised. All of December, we had absolute tech apathy at best and tech hatred at worst, depending on one's perspective and the negative nellies/ninnies/know-it-alls keep talking the end of techland, however, things always get better and getting better they are in techland.

Of course, we go through these cycles where tech goes from buy-at-all-cost to sell-as-fast-as-you-can status in a heartbeat. It makes very little sense but that is exactly how the playing field has been set by Wall Street. They want Ma and Pa chasing tech well after the run has begun and when the switch is flipped also bailing out when they should be hanging on.

Churn, baby, churn is the mantra on Wall Street and generate those commissions for the firms is what drives the Wall Street Machine.

In addition, along the way, we have the sweaty-palmed swamis, the pontificating pundits, the gushing gurus, and the always-short-never-wrong-and-never-a-dime-lost cabal, trying their best to scare you out of making money.

It's all good though and all part of our daily working lives.

I have been saying for a couple of years that the going gets even harder going forward and nothing has changed my mind on that. It will get even harder going forward and the fake news/negative news/downright lies will get even more strident and frequent as there are many folks who have missed the rally for YEARS. These folks are angry. Very angry. They will resort to absolutely anything to try and bring the markets down. 

"En garde!" is the best term that applies here for each and every one of us. 

The jaysomaney.com account (main) finished last week with a liquidation value of $1,034,479 and is now up 35% or $232,513 for 2018. Cash is now at $555,661 and will increase even further going into January expiration (Friday). I will certainly get called out of my VIPS equity position (covered call sale). 

The mini account finished the week up 20% and has a liquidation value of $8,782. Cash in the mini-account is $6,770.

I have the approval to split the main account into two separate accounts-one for options and the other for equity including income generating through call sales. The equity account is being set up as you read this email.

Starting next week, we will have three accounts, main, equity, mini. 

It's important to remember that all three accounts are actually spawned off the initial account I had set up and funded back on Fen 1, 2016 with a starting capitalization of $100,000. So, in less than 24 months, that amount has increased to $1,043,261 (main plus mini) or more than a 10x return on the initial investment.

In addition, these results have been achieved with as little risk as one can possibly take in an options only account. That is, almost half in cash at almost all times and obviously, never any use of margin either. 

Not shabby, even if I say so myself. 

Anyways, that is all behind us now and we work in a business that asks daily, "what have you done for me lately?"

So back to business.

Last week:

The S&P was up 1.6%

The Nazz was jiggy for 1.7%

The Dow champed ahead by 2%

FAANG:

FB down 4.8%

AAPL up 1.1%

Bezos (AMZN) up 6.2%

Flixsta (NFLX) up 5.2%

GOOGL up 1.9%

BATS:

BIDU up 3.3%

BABA down 2.5%

TCEHY up 1.8%

SINA flat.

Our futures (e-mins) are up 13.5 and Nazz futures are higher by 39 with about 3 hours to go before the opening bell sounds.

We are now officially open for earnings season and this week we will hear from the likes of  C, CSX today, BAC, GS, HMI, USB. AA tomorrow, TSM, FAST, ADTN, PLXS, IBM, MS, CP on Wednesday, TSM, SLB, STI and KSU on Thursday and last but not the least, WIT on Friday.

See all of you in our little chat room. 

Be safe
Jay

Weekly Update Ended Jan 6, 2018 & Potential Split In The Account

The first week is in the bag and already all the standard Wall Street shite is all over the place. "As the first day goes, so goes the rest of the year." As the first week goes, so goes the rest of the year." It's all a load of crock. It is what it is, as far as a nice way to start the year and that is all.

Of course, on the flip side you have the negative nellies who will say the market is over-valued (it is not)and it needs to rest (not techland given that it's just starting there) or that the markets need to pullback (sure, at some point Chuckles and gang will pull back). However, these same folks have been talking about it for years (corrections, pullbacks, crashes and who knows what else) and all they have done is cost those who listened to them so much money, it should be a crime.

Anyways, it is what it is. We all have different opinions and that is what makes markets, no?

Last week, the jaysomaney.com main account finished up $125,272 or 17% higher on the week. The liquidation value is at $895,498 as of Jan 5, 2018, and of that, $490,066 is in cash.

The mini-account finished the week up 11% and as of January 5, 2018, has a liquidation value of $8,150. Cash is at $6.770.

Please note I am not going to be combining the results anymore. As far as I am concerned, the two accounts are separate starting January 1, 2018. 

Talking about separate accounts, I have been getting a lot of requests to set up an account that is stock (equity) only with covered call sales to generate income and I might consider that request once I huddle with the lawyers and also, of course, discuss with the BSBs. If you have any comments suggestions, please write me directly at jay@jaysomaney.com. TIA. Conversely, we can discuss it in the room if you like.

Last week:

The S&P finished up 2.6%

The Nasdaq was higher by 3.4%

and the Dow added 2.3%

FAANG:

FB +5.9%

AAPL +3.4%

AMZN +5.1%

NFLX +9.4%

GOOGL +5.4%

BATS:

BIDU +4.7%

BABA +10.8%

TCEHY +7.6%

SINA +12.1%

Our futures (e-mins) are down 4.25 after flitting between red and green all morning (very early) and Nazz futures are down 9 points as investor psyche is still as nervous as a cat in a roomful of Dobermans.

I can't blame them at all. 

However, there are a lot of names in techland that are still very, very cheap no matter all the copious crying/weeping and dire threats/warnings and cryptic warnings from the always-short-but-never-wrong-and-never-a-loss gang.

Cest la vie.

See all of you in the room shortly.

jay