Thursday, July 2     Published daily Receive trading 'touts' free
Topic of the Week

Can Uber Live Up to All the Hubris?

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Uber is not a publicly traded company, but if it were, I would recommended shorting as many shares as you could borrow, beg or steal. That’s because the four-year-old purveyor of on-demand transportation is probably as insanely overvalued as venture-stage companies ever get. And that’s saying something, since, six years into a bull market, greed, recklessness and stupidity in the investment world have never been more cocksure. In December, when Uber promoted a $1.2 billion round of financing, investors effectively valued the company at $40 billion. That made it bigger than 359 of 469 companies listed on the Fortune 500 — bigger, in fact, than: Kraft Foods Group, Delta Air Lines, General Mills, CBS, Rite Aid, Macy’s, Viacom, Dollar General, Kellogg, KKR, Nordstrom, Halliburton Company, Archer-Daniels Midland, Omnicom Group, Charles Schwab Corporation, YUM! Brands, DISH Network, Aetna, ConAgra, Hormel Foods and Best Buy, to name just a few.

Earlier, when Uber was valued at a mere $18 billion, its initial backers stood to make 2000 times their initial investment. Will enough greater fools eventually come along to take them out of their shares [click to continue…]

Thought for Today

Holiday Countdown to Deadsville

Whatever hopes DaBoyz had of distributing stocks as they retrace Monday’s big selloff will be lost as the trading week draws to a close today ahead of the long weekend. Clearly, this is no longer the frisky bull market of past years, when nearly every three-day holiday was used by the smart money to promote a muscular short squeeze.  My expectation, with precise numbers to support it in today’s E-Mini S&P tout, is that buyers will be spent before Thursday’s opening bell. Whatever happens, have a great weekend!  See you on Monday.

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Touts

$USU15 – September T-Bonds (Last:148^21)

EDT

Steep selloff in bonds looksT-Bonds’ nearly relentless weakness must be viewed in the context of a long-term chart to see that it is merely corrective rather than impulsive. Which is to say, it’s not a bear market that has been unfolding over the last few months, but rather a normal-looking retracement of a very powerful — and still-promising — bull market. In fact, the selloff has yet to retrace even half of the steep ascent that occurred between December 2013 and March 2015.  That would imply more downside to around 147^01, just beneath the recent low. A 0.618 retracement would require 142^20 — quite a ways from here, although hardly inconceivable. I doubt that the violent upward spasm that accompanied Monday’s news concerning Greece has ended the correction.  Accordingly, we might expect more downside to at least 144^25, the p2 Hidden Pivot support of a pattern visible in the daily chart, where A= 157^12 on May 29.

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$ESU15 – September E-Mini S&P (Last:2070.25)

EDT

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$GDXJ – Junior Gold Miner ETF (Last:24.15)

EDT

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$GCQ15 – August Gold (Last:1173.00)

EDT

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$+JNK – High-Yield Bond ETF (Last:38.83)

EDT

One of these days, JNKIt’s been a while since we looked in on this vehicle, but that doesn’t mean we’ve lost interest, no sirree. Someday the phrase “Why do you think they call it junk?” will be in vogue once again, and it therefore behooves us to make potentially gainful preparations. Let’s limber up with a 0.40 bid for eight puts at the 34 strike expiring December 19. You can work this bid as long as JNK is trading 38.85 or lower.  If it’s between that price and 39.15, you should lower the bid to 0.35.  The market makers may be a little freaked to see a bid materialize out of nowhere for this very thinly traded option, but we can adjust our tactics once we’ve seen how they react. ______ UPDATE (June 17, 10:04 a.m.): Many reports in the chat room of options bought for 0.40. They came easily enough that we can infer we overpaid. Regardless, here’s step two: Offer a like number of Dec 19 options at the 32 strike short for 0.40 good till canceled. We are attempting to leg into a riskless $2 vertical spread, but JNK will have to fall hard to get us filled. _______  UPDATE (June 24, 12:46 a.m.): Stop yourself out of the puts if they trade for 0.20.

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SIN15 – July Silver (Last:16.030)

EDT

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