Good morning, what we see are stocks trying to rally with flat futures prices. However, we saw a strong US Dollar and rising interest rates (yields on US Treasuries). We see an elevated VIX which means the price of downward protection is elevated, up about 25% over the past week.

Commodities are mixed, but the pressure from the US Dollar and interest rates will be bearish on US equities.

GLTA

Enjoy our video below. In it, we discuss Verizon Communications $VZ in great detail. We share what we saw when we decided to go long the calls on $VZ, and why the stock price dropped this week.

By: Jeffrey P. Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure Inc.
​Chicago Quantum

Yesterday was a tough day in the markets. We saw it trending significantly lower in pre-market, and by the time the markets opened at 0830 ET, the move was largely completed. Thank you Finviz.com for the visual below. It does not mean that the markets were silent during the day, as we saw our investments move significantly during the day, but the die was cast early.

In full disclosure, we added a long and a short position on Friday, and sold our short position Monday afternoon for a 2% profit. It was good work. However, our long position lost more than the gain and we added to our long bet with 80% of the profits of the short trade. This is what most investors will do, add to their long bets and 'buy the dip.'  We did, fingers crossed. No bling bling today until our ultimate trade settles (hopefully higher).

​The market flip-flopped this morning in the past hour. Interest rates moved negative. US equity futures moved negative. VIX: negative. Semiconductors and chips are more down than up this morning.

The market moderated this morning, with 17 minutes left before market open. The trades that looked obvious last night are mixed this morning. We will be watching the screens today.

The markets are interesting and show some conflicting data this morning.

Interest rates rose this morning in the past few minutes (all pre-market), and they were down earlier.

Most economically sensitive sectors are trading higher pre-market.

​The US Dollar is on fire, up against most currencies. 

However, the market is on a new downturn leg, down 5% over the past five days. Watch out, this could be the beginning of a new movement lower. I do like that the pre-market action is pointing higher, which could be just normal trading or a Bear Trap.
​

By: Jeffrey P. Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.

Ok, we see weakness across the US and Global (non-US) stock markets. Even Jakarta and Malaysia were down yesterday. However, mainland (PRC) China stocks were up.  Europe is down. The cost of insurance is up significantly, as measured by the VIX. We get the feeling that traders are betting against US Equities using the Nasdaq Composite 100, The S&P 500 Index and the Russell 2000 Index. They are simultaneously buying puts, which will profit as the market drops (so, they make money both ways, actually 3 ways). Profit on the shorts, the puts and the insurance, and if they bought the VIX, they make money on that too.

Who is losing today? The individual retail investor who bought risky stocks. You know who else may be losing today? Bank depositors. The top 10 US banks are trading lower in pre-market. Not sure why, need to take a look.

Good luck in the markets today. Be careful, we have not seen a down Monday like this in a while, and it could define the week.

Other notes we took while recording our video:

1. Yield curve not really inverted anymore, the long bonds are dropping.
2. Corporate bonds, especially investment grade, are dropping (both yield, and risk)
3. Economic metals are down, slightly.
4. Energy is flat this morning.
5. Long UST Notes/bonds are flat.
6. Yahoo Finance VIX is up 18.25% this morning to 23.13. FinViz VIX was already at 24.50 last night.
7. Fallon: Fibonacci Retracement Support level markets were down 23.8%. Fibonacci circle is found in nature as being a very efficient shape. Snail is a fibonacci.


If you like Gold, NEM Newmont Mining.
If you like Copper, FCX Freeport McMoran
BX Blackstone $103.30
The Carlysle Group CG: $33.56


Narrative: Economy is doing great. Lots of Jobs. Inflation still a concern:
FRB: Continue QT and Interest Rate Hikes
Stock Market: US Equities: Will start to fall again
Bond Market (Corporate): Will also fall


US Treasuries (short-end will see higher yields) and (long-end: market will decide).


Short UST: unchanged
1-year UST are up to 3.3%


Mortgages are up 30-year fixed conforming: to 5.6%, and MBS are down sharply.


Quantitative Tightening Pattern (up and down) - rinse and repeat. Each time, it goes lower.
Silver under $20.00 an ounce.
Gold at $1,743 / oz


Yen 137/Dollar
Bitcoin $21,250 (Hit $20k before $30k)


Walking Wounded and MEME stocks are down PM
Top 5 US Banks are down, PM
Money Managers: Down
Retail is down PM
FLEX: Flexsteel industries: up PM
Party City hold PRTY Up
Coal is up


Bitcoin related stocks are lower:
Physical mining - lower


This is the morning that people turn bearish.
VIX is up 4.55% this morning. (Finviz)


Pre-market: RED RED RED


Why are all of the top 10 US Regional Banks lower this morning?
- Recession Fears?
- Housing Fears?
- Interest Rates / Interest Income?
- New Law / Politics?
- USD - Stretch


Her name was Darya Dugan. Looks like a Red Sparrow, which would be a valid military target if true.

The Ukrainians are fighting back.


VIX Climbing is a signal for short-term pressure against US Equities.

By Jeffrey P. Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
Chicago Quantum

By: Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.

Big day today. Lots of movement if you know where to look (in pre-market).  Generational wealth being created and lost in pre-market and expected throughout the day today.

In today's video we focus on options expiration and a few stocks that are really moving in pre-market.

We don't see the kind of news in the mainstream social media, or news media (online) that gives us a reason to trade either up or down. The narrative feels managed and politely positive. That is ok with us, we like polite society...however, this is not how you manage money or your investments.

Stocks are showing red pre-market. Down about one percent. We have not seen this in a while and it surprises us. The VIX is trading where it landed two days ago, up about 15% to 20% from the low of 20.00 it reached recently. There is not much fear in this market despite almost retracing half the losses of the recent bear market.

The US Dollar is super strong. Interest rates are rising and falling multiple times in a week as the market tries to decide whether we are in a recovery, a recession, a tightening, a pivot, and whether inflation rising in China and Japan just means that this is a global contagion of 'free money' and we all have to work together (sink or swim) to recover global tight (and valuable) fiat currencies. We don't know whether firms are hiring, firing or just standing by. Production and orders are down, inventories are being used up...but not sure whether this is just a short-term malaise as the Summer wears on. Cannot tell long-term economic direction today.

So, Good luck out there. There are individual risky (high BETA) stocks that are down 5% to 15% pre-market at the time we made our video and those options values are moving dramatically. Options premium is being burned and earned even before the market is open. We noticed so many stocks that are trading actively this morning.
​

We discuss Corbus Pharmaceuticals stock trading action today. It was exciting over the past few days, and the large, million share bets sent the stock down from ~$0.30 to ~$0.215. Very risky moves, and looks like there was a big short again this morning of over 1 million shares.

We also see significant pre-market movement in Verizon $VZ lower.

Hallador Energy Corporation $HNRG is trading higher this morning, up to $7.00 per share.

Corporate bonds were lower yesterday and Mortgage Backed Securities lower today. Likely in part due to slight weakening of risk-free US Treasuries, and the rest is market / firm risk.

Markets looking flat today. Bond Yields not moving much. Recession fears seem to be abating.

Most industry sectors are mixed this morning. There is not a firm commitment of direction either way today.

Enjoy the video.
Not investment advice.
Good luck to all! GLTA!
Jeff

Disclosure: At the time of the video, we are long the common of $AMS and $CRBP and short the common of $HNRG.

By: Jeffrey P. Cohen, Investment Advisor Representative & President
US Advanced Computing Infrastructure, Inc.
Chicago Quantum

Good morning, it’s August 17. We wore a RED shirt today because we thought the market would drop today. We are not happy that it is falling, but we are in a bear market and this is a good reminder.


Friday, Options expire on individual stocks that have them.


VIX was up 17% last night. People were buying downside insurance on their portfolios.


BBBY up pre-market.

There is a market to make money in individual stocks that is independent of the direction of the overall market. It happens in the summer (things are slow), kids off school and college, low liquidity and few people around. Quiet times.

We heard 2nd hand (hearsay) that the Federal Reserve / US Treasury bought its own 30 year bond issuance. Bought $38B of it this week.  By doing that, they are keeping yields lower and raising the price of the bonds. US Treasury PUT or a floor under bond prices.

Corporate Fixed Income was down.

ROTATION ALERT
Market Sector Rotation from Risky to Consumer based and lower-risk names.


Risk off on UST
1 month yields down
1, 10 and 30 year UST yields up. 10-year yield is up significantly.
DD: latest 10-year auction.
Bond futures are down (hard to tell).1/4 to 1 down.

The geo-political narrative has changed in the US mainstream media. Everything is bad economically, and there is no news internationally except that Europe will suffer from crushing economic hardship.
Ukraine Russia news is hard to find.
Taiwan China news is impossible to find.
Inflation is not in the news either, must have been fixed by that new law.
News is on the drought globally.

Liz Cheney (love her dad, Dick Cheney) lost her congressional seat in Wyoming.
She was not true to her party, and she paid the price for that disloyalty and lack of grace.

EUROPE stocks down significantly. 
VIX moderated. Big bets were made in Asia last night, and again this morning after the market opened.
Asian markets bought the puts against the SPY
Asian markets up significantly last night, and spent some of their earnings to protect their US equity positions.  Global players doing that too. Easier to trade Asian hours, probably.

Equity Breadth still solid. 80% trading above 50 SMA
34% above 200 SMA, bear market rally
2.5:1 new highs to new lows

Bitcoin dropping a little
US equities dropping a little. We might add bitcoin to our runs to see the price relationship to US equities.

US dollar is up


Housing inventories up, new housing construction and permits are down. Buying are walking away from house contracts. Housing is bearish today.


BBBY $28.35 seems very high for this stock today. Not sure what is happening.


IMO: Chicago Quantum: We need to ‘end or win or negotiate a settlement’ to the Russia Ukraine crisis. Ukraine can target Russia's energy infrastructure without taking a single civilian life in the process. 

$FMNB made it to $15.00 per share. Congratulations.

Now, the day is well underway and we are just passing Eastern Time Zone lunch hour. Stocks that are risky and high-BETA have dropped significantly today. This is not a good day for risk assets (after they have risen 100% or more since the June 16 low).

Our personal portfolio is down and the CQNS UP run picks are down as well. 

​Good luck to all.

By Jeffrey Cohen, Investment Advisor Representative & President
US Advanced Computing Infrastructure Inc.

The markets continue to rise, but this morning pre-market the day looked slightly weak for US Equities.

We mention: $HNRG $AMS $CRBP $EJH, $VZ, $BANF, $FFIN, $WMT (of course, they reported earnings), a bunch of US banks, $KRE, crypto, cannabis, chips and semiconductors, computer makers (only a few left), money managers, and other proprietary indices we use to track key sectors.

IMO: Markets expected to be slightly lower today.
Slow, slightly down US equities day in a very broad-based rally.

S&P 500 up to 4,294, VIX steady at 20.45, oil, gas  and other commodities pretty flat.New highs to New Lows 3:1 (positive breadth).


Energy down
Industrials up
Risk is up
B2C struggling
Lending is up
Big Tech is up

Asian markets down or flat. Except Jakarta, Indonesia and Malaysia, New Zealand, S. Korea which are up slightly.

Europe is higher this morning between zero and one percent (markets were still open).

USD stronger. The Eurodollar is approaching 1.00 (at 1.0127). And Japanese Yen at 134.42.

Bitcoin at 24,050 (still between the 20k and 30k support level.  A small downtick in an upward trend from 18k.

UST Interest rates slightly higher (at all maturities). Still are as we write this.

Market Breadth turning more positive:
- Corporate Fixed Income (US) is up 2.3 : 1 (A:D), new lows 1.3 : 1 vs new highs.
- US Equities: 3:1 New High : New Lows
- 80% above the 50 SMA

On the geo-political news front, we see a few interesting developments. Global instability is rising, and our latent neocon roots are tingling. 

China has again demonstrated its military power near Taiwan.

Ukraine strikes back into Russia at their nuclear facility in Kursk, in a strategy we suggested a few months ago.  Took three tries according to the Russians. Russian military bases erupting in flames based on 'accidents' and saboteurs.

We hear no talk of recession, and see no writing of recession or economic malaise in the US mainstream media. Everything is awesome, the markets are rising, and midterm elections are right around the corner. The yield-curve inversion is fairly light, only indicating a lower long-term yield on risk-free money. No short term credit crunch, only FRB policy tightening. 

​What does this mean for us in the markets?
​

By Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
​Chicago Quantum (SM)

We had a good time with this morning's video. We took some of our earnings from Friday and invested them in BLING BLING for our video.

​YouTube Livestream Video Link: Here

BIG BEARISH BETS this morning
US Equities selling pressure increasing into the open.
​Those bearish bets petered out by lunchtime. 

We are attempting to profit again this week and not sure our back or neck can take another 'investment' in bling, but we are willing to try. Big smile on this one...and we do share our trade.

We bought Verizon $45 calls when the stock price dipped below $45, and we sold them when the price rose above $45 for a 3-day, 8% gain. We hope to rinse and repeat today. It didn't happen, Verizon moved with other consumer non-discretionary stocks higher, while energy and economically sensitive stocks (and high BETA stocks) fell.

We noticed about 15 macro-economic pieces of news this morning. They show a mixed stock picture for today, Monday. After the market opened, and through the morning, the market has been up and down. The morning was a risk-off morning where riskless stocks rose, and high-BETA stocks fell. We are in wait and see mode.

Also, remember that Friday is options expiration for individual stocks (which we trade in). This means that stocks and options 'come together' at market close on Friday. Expect above-average volatility.

Crude oil down almost 5%, or $4.48 to $87.61. This is a large drop, and is taking energy stocks down with it. It is either a sign of dramatic increases in supply (moar drilling), or diminished demand. Not future expectations of demand, but current demand. Global demand for energy is down. Either that or more people bought, rented or borrowed electric vehicles than ever before. We rode our bicycles yesterday and saved a little gas.

Recession 1: Recovery 0

Economic Metals fell, but are still at elevated levels.
- Copper down $0.11, still elevated.
- Silver down $0.50, still elevated.

Recession 2: Recovery 0

Short-term interest rates are higher, and long-term interest rates are lower. This will make longer-duration investments more affordable, but could reflect tightening of the money supply and more difficulty rolling over current debt and loans. Things could be getting tighter out there for companies that need to borrow money.

Long-term, long-duration, Risk Free, UST Interest rates are lower on this Monday morning.

Ultra short money at 2.2% (same as a bank account with $1 minimum balance). Bank accounts at 2.5%

Recession 3: Recovery 0

5.33% 30-year fixed mortgage.
2% fees
2% points
2% margin for the banks (3.33%) for the money, plus costs.
10-year UST 2.8% plus 0.5% in loan origination costs.
MBS looking strong.

Gold under $1,800

Bitcoin still in the range at $24.200

VIX still in range at $21.00
VIX at 21.50, 21.55


STRONG US dollar. The US Federal Reserve Bank is tightening money supply, along with the US Federal Government's fiscal policies. This is good for other counties to sell goods to the US, and bad for the US corporations that sell abroad.
- Eurodollar at 1.02
- CNY to USD: 6.77 on a rate cut in China.
- Chinese currency is weakening, makes their exports cheaper to US buyers.


Recession 4: Recovery 0


This is good news for US consumers. Gasoline down $0.12 per gallon wholesale

Recession 4: Recovery 1

Verizon debt weakening, higher yields.
$VZ stock has been down lately (almost 10%). We think it could recovery, but expect a bumpy ride.
Verizon stock rose today with other consumer defensive stocks.

Argentina raised its main rate of interest to 69.5% to combat inflation of 70%. Wow.
China lowered its policy interest rate a bit to stimulate domestic economic demand. They don't have inflation because (in part) they did not utilize fiscal 'give-aways' to deal with COVID 19 slow-downs. I remember reading about small subsidies for food delivery, but that was all. This is not the case in NATO countries which resorted to fiscal stimulus.

Recession 4: Recovery 2

Red day in the futures pre-market.
QQQ -1/4, -4/10
SPY -1/2, -6/10
Russell -2/3, -3/4



$BBBY - STONK that is up 20% this morning.
$WMT earnings (watch for the news on US and Global consumer behaviors).

By: Jeffrey Cohen, Investment Advisor Representative & President
Chicago Quantum (SM)
US Advanced Computing Infrastructure, Inc.

It's a 'so so' day in the markets pre-market. Not much action at all. Things trading in ranges, stocks up and down, commodities, interest rates and currencies all in range. Bitcoin up and down lately, but still in support ranges without much commitment in movements.

Just a slow morning on a Summer Friday.

A few things we saw:
The stocks are mixed pre-market. Banks are trading higher today. The recession must be over. Retail stocks were up too, showing that people have more cash to spend. Gasoline was down ~$0.06 pre-market (wholesale, 42k gallons), and so trucking firms were up pre-market. However, cannabis is up this morning, likely on Michigan's revenue read-out. I read that alot of people bought alot of cannabis last month. Medical was ~$21M, and recreational about 9x that amount. People cannot afford to drive or eat, but they can get high. Makes sense...and likely contributing to the significantly lower productivity rates in our non-manufacturing economy. (manufacturing you have to be there, and likely drug tested especially if operating heavy machinery).

Interest rates are up and down, but in the range. Lots of jerky movements, but not sure anyone is paying attention. We did see FRED Fed asset holdings INCREASE by $5B this past week. This is not quantitative tightening, this is quantitative easing at the margins. We were happy to see one month of inflation being under control, but it is definitely too early, in our opinion, for the FRB to start loosening the purse strings on monetary policy. Too early.

Good breadth yesterday in US equities, with more new highs than new lows, but the opposite in US corporate fixed income. New lows continue to outpace new highs, but high yield was more up then down, and investment grade was more down than up. This shows an increase of risk on the balance sheets of US companies.

We are still upset about the new corporate alternative minimum tax in the Inflation Reduction Act bill that passed the Senate on a party-line Democrat vote. It will hurt large corporations, and transform how companies report earnings. Gone are the earnings smoothing and earnings boosting accounting methods. Things will get a little gloomy on income statements over the next few years if the bill becomes law with this provision.

Market action over this past week has been consistent. Rise in the morning, then fade lower all day.