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DAILY DIARY

Doug Kass

Why I'm Calling It a Day

I am filled with profound sadness that our editor, Teddy Cohen's relatives have been formally declared deceased by President Biden.

Israeli-American Hostage Judi Weinstein Haggai Declared Dead in Gaza ' Newsmax.com



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I am going to call it a day - a bit early.

Please keep Teddy and his family in your prayers.

Be safe.

Position: None

My Comment of the Day (Part Deux)

Watch FinTV. Group Stink and FOMO are alive and well... and pervasive.

There is a great deal of certainty that the market rises reasonably strongly in 2024, the landing is soft and inflation returns to the Fed's target.

As Grandma Koufax used to say to me, "Dougie, rotzaruck."

Position: None

Howling About the ECB's Balance Sheet

Wolf Street keeps on howling - this time about the ECB's balance sheet.

Position: None

The Gospel According to Tom Lee

Position: None

Recommended Reading

On cannabis: "How Canada has milked the cannabis business almost to death

Position: Long MSOS (M), Short MSOS calls (S)

Oil Vey

Adding to: 

* (OXY) $60.35

* (CVX) $150.26

* (XOM) $100.67

Position: Long OXY (VL), CVX (L), XOM (L), Short OXY calls (M)

Weak Treasury Auction

The 1:00 pm auction is adversely hurting equities - at least temporarily.

Draws 3.859% vs. 4.399%.

Bid to cover ratio: 2.50 vs. 2.44.

Position: None

LOPE Short

Shorting more Grand Canyon Education (LOPE) .

See my remarks earlier in Comments Section.

Position: Short LOPE (S)

S&P Sectors

* At 12:30 pm

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Position: None

Hedgeye on the S&P

Position: None

My Comment of the Day

Just Now

Since most if not all of the talking heads on The Death Star are almost always fully invested (and were before the "fed pivot") - the narratives that they all seem to agree with is total BS. It is simply a way of sounding right... all of the time.

Position: None

Wisdom From Danielle

Position: None

'It's Not FOMO'

* At times I feel I live in an alternative investing universe...

That is the explanation of a talking head on FinTV who just moved to neutral from negative on equities despite a very low 2024 Real GDP forecast of only +1% and below expectations for next year's S&P EPS growth. 

That, to me, is FOMO. 

Personified.

Position: Short SPY calls (M)

New Short

Capital One (COF) at $131.50. 

An historically poor underwriter of consumer credit with an extended chart. 

More next week.

Position: Short COF (VS)

S&P Sectors Intraday

* At 10:40 am... 

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Position: None

Market Internals

* At 10:30 am...

- NYSE volume 99M shares, 39% below its one-month average 

- NASDAQ volume 1.63B shares, 5% below its one-month average

- VIX up 0.48% to 12.49

Breadth

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Biggest Movers

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Heat Map

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Position: None

Where's the Beef?

* With EPS expectations declining, the rally has been a valuation reset...

Position: None

Big Pharma

I'm adding to big pharma.

Position: Long BMY (M), JNJ common (M) calls (VS)

JPM Trading Short Rental

Following a large upward move, and moving into (JPM) at $169.78, I have taken a trading short rental in JP Morgan.

Position: Short JPM (VS)

Selected Premarket Movers

Upside

- (CING) +169% (NASDAQ delisting of its stock has been delayed until at least Feb)
- (NVFY) +165% (earnings, color)
-LAES +46% (Post-Quantum Semiconductor Technology Fortifies Cryptocurrency Security)
- (MBOT) +32% (announced Positive Results of Its GLP Pivotal Pre-Clinical Study Where All Study Objectives Were Met)
-WLDS +19% (signs agreement with undisclosed global defense company, to design together a first of its kind prototype for defense use cases)
- (DATS) +13% (unveils the "Habytat" AI Social Gaming & Developer Platform)
- (ASNS) +11% (receives order from major North American rail operator for management software and services)
- (SQM) +6.5% (Chile's state-owned copper mining company Codelco has partnered with miner SQM to take a majority stake in future lithium projects in the country)
-SRFM +5.2% (disclosed entered into binding terms for $35.2M mandatory convertible debenture with GEM Global Yield LLC)
- (ATUS) +4.3% (reportedly Xavier Niel expressed interest in buying the Portuguese operations of Altice)
- (SILO) +3.5% (provides update on its dosage and time-release ketamine-loaded implant, designated as SP-26, being developed as a potential at-home pain relief treatment for fibromyalgia and other chronic pain conditions)
- (CLRO) +2.9% (entered into a Non-Exclusive Cross License Agreement with Sennheiser)
- (VNET) +2.8% (inks strategic partnership with Shandong Hi-Speed Holdings Group Limited)
- (CNDT) +2.7% (announces agreement to sell its Curbside Management and Public Safety businesses to Constellation Software's Modaxo)
- (BIDU) +2.2% (number of users of AI bot Ernie has exceeded 100M people)
- (PENN) +2.2% (Hedge Fund HG Vora (18.5% stakeholder) seeks board seats at Penn)

Downside

- (BJDX) -37% (prices 2.7M common share offering at $1.30/shr in $3.5M public offering)
- (CTSO) -30% (STAR-T Trial did not meet primary effectiveness endpoint in overall patient population that underwent different types of cardiac surgeries)
-NKGN -12% (pursuant to amendment, NKGen Biotech and seller agree to increase share consideration by 200K shares of common stock)
- (CYTH) -10% (completes merger with Applied Molecular Transport)
- (NEO) -9.8% (Federal District Court for the Middle District of North Carolina has issued a preliminary injunction, effective immediately enjoining the RaDaR assay from NeoGenomics Labs, Inc)
- (BLIN) -6.3% (earnings)
- (RGLS) -6.1% (files $150M mixed shelf)
- (MARA) -5.2% (crypto weakness)

Position: None

Premarket Percentage Movers

At 9:04 am:

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Position: None

Sir Arthur Holds Court

From Arthur Cashin: 

Wednesday's trading session had its own variety of mood swings and reversals. Nothing like what we saw in the final hours of Rasputin, but changes and some minor whipsaws, nonetheless. The market began alright. It looked like it was just getting ready to quietly extend the Santa Claus rally and the post-opening session was relatively calm with the bulls in control. We alluded to some of that in this late morning update:

Late Morning Update 12.27.23 - This morning's equity market seems to be benefitting once again from seasonal bullish updrift and that is part of the Santa Claus rally. Yields are not a heavy influence nor are they any kind of negative and that is a very mild benefit to the bulls. They are also cheered by the fact that regional and community banks continue to move up, helping to further the broadening of the market and keeping the breadth positive. Bulls have control of the ball. Let's see if they want to move it along and the biggest problem would be to fumble it away, but as I say, it looks like a kind of internal technical drift.

The geopolitical headlines, particularly around the Red Sea are simmering up. The Houthis seem to be benefitting from the fact that Saudi Arabia has asked the U.S. to be easy in the counter strikes lest the Houthis go all out on the Saudi refiners and the like. That, it is thought, gives the Houthis a sense that they can be a little more aggressive on their side without fear of major retaliation from the U.S. In any case, it is not having an immediate impact on the market nor is it forcing a kind of flight to safety. In the meantime, stay close to the newsticker and please stay safe.

The market began to pullback around midday and then when it deemed the five year bond auction as a success at 1:00 p.m., they came on again and went nearly to the highs of the day, only to waffle a couple of more times before we got to the closing bell. That is not untypical of this holiday season. Not fully attended trading floors, somewhat volatile light volume trading and that brings swings of varying types, but no sense trying to make a major literary outline for Wednesday's action. The market was clearly caught up in its own internals. It waxed and waned as the algorithms moved in and out and there were certainly geopolitical headlines, but nothing that dominated the trading. So, let's see if the Santa Claus rally continues as they brought the Jolly Old Elf home safely at the close and, the first place is where we should normally look at this time and that is the action in the foreign markets.

Overnight, global equity markets are showing strong streaks of individuality. Japan, with some weaker factory data, managed to close down the equivalent of about 170 points in the Dow. Conversely, Hong Kong and Mainland China closed up the equivalent of about 750 points in the Dow. India was up, but only by 170 Dow points. As we go to press, the markets in Europe cannot seem to make up their mind. The markets in London, Paris and Frankfurt are all showing fractional gains with the emphasis on the word fractional. So, I think, they are waiting to see how their cousins in New York gather things up and react. The U.S. economic calendar is modest and befits the ongoing holiday season. Pre-opening, we will get things like International Trade Data, Initial Jobless Claims, Retail Inventories and, at the same time, Wholesale Inventories.

At midmorning, we get Pending Home Sales and Natural Gas Inventories and Oil Inventories, bunched together because of the holiday. At 1:00 p.m., we get a Seven Year Auction and then, after the close, everyone will look to the Fed's Balance Sheet to see if quantitative tightening is continuing at pace. So, we will have to see if the bulls can continue the Santa Claus rally or, if they are going to take a day off to consolidate, which appears be the case.

In preopening futures, the Dow is looking somewhat softer, while the Nasdaq looks a little bit better. Action around the Red Sea continues at pace with new threats and counterthreats. So, you definitely want to stay close to the newsticker. Keep your seatbelt fastened. Stay nimble and alert and stay safe in these very difficult times. Let's see if we can leave another cookie out for Santa and keep him in a somewhat generous mood.

Position: None

Woods on CNBC

* And I agree...

Position: None

More On Sentiment

Position: None

More Night Moves: A Detailed Look at Overnight Futures and Why/What Markets Are Moving

*Down the stretch we go!

* Among the many risks that are currently being ignored is the supply of crude oil:

* A Disconnect Between Valuations and The Real Economy:

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* Buy High, Sell Low?:

* Investor sentiment grows more stretched to the optimistic side -- the S&P Short-Range Oscillator is now way overbought (at 8.17% v 7.57%) as favorable economic and market outcomes remain the consensus view.

*This morning yields are higher and crude oil prices are lower.

Not on Monday, Tuesday, Wednesday, Friday, Saturday
Sunday but on Thursday... Thursday
Not on Monday, Tuesday, Wednesday, Friday, Saturday
Sunday but on Thursday, make sure you are thirsty
Ohhhh on Thursday, baby get ready ohhh on Thursday
Woaahoooh hold it ohh on Thursday
Just wait on Thursday, baby only Thursday

-- Thursday, The Weeknd

"The stock market will do whatever it has to do to embarrass the greatest people to the greatest extent possible."

- Wally Deemer

"Workin' on our night moves Trying to lose the awkward teenage blues Workin' on our night moves In the summertime And oh the wonder Felt the lightning And we waited on the thunder Waited on the thunder."

- Bob Seger, "Night Moves"

This daily Futures feature is like inside baseball. I try to show you and write about what I believe thoughtful hedge fund managers are looking at when they awake -- let's call it our normal routine -- setting the stage for their strategy for the day. The market is a complicated mosaic and the more info you have, the better trader and investor you will be!

The market (and money) never sleeps -- and neither do I, it appears! I have previously described the importance that overnight futures trading hold for me here. It is a guidepost to my strategy in the regular trading session. Moreover, the overnight/early morning futures hold opportunities as they are (1) inefficient, though liquid and (2) it seems fear and greed are often exaggerated outside the regular trading session. I frequently try to capture those efficiencies by trading actively both in the pre- and after-market sessions.

Here are brief observations I wanted to highlight and provide a summary of overnight price movements in various asset classes:

* Stock futures rebounded throughout most of the overnight session (with Nasdaq far stronger than the S&P). Again the range was remarkably narrow. S&P futures peaked at +8 and bottomed at -2. Nasdaq futures peaked at +45 and bottomed at -1. At 6:18 a.m. ET, S&P futures were -1 and Nasdaq futures were +38.

* Commodities are lower. Brent crude is down -$0.90 to $78.75.

* The S&P Short-Range Oscillator remains largely overbought at 7.57% vs. 6.54%

* The VIX is at a lowly 12.42 (0.00).

* The U.S. dollar is stronger against the yen but lower (for second day in a row) vs. the sterling and euro.

* Treasury yields are a bit higher overnight; as I've mentioned, we may be at the point that lower rates will hurt equities (we will see)! The 2-Year Treasury yield is +2 bps at 4.258% and the 10-Year is +3 basis points at 3.818%. Over there, the yield on the 10-Year U.K. Gilt bond is +7 basis points.

* Overnight, the inversion of the 2s/10s Treasuries curve is steady at -42. Real rates remain quite elevated; the 10-year is still about 1.5 (again in real terms).

* Gold is down -$5.70 at $2,087 after the recent spate of volatility.

* Bitcoin is -$400 and at the door of $43k.

Here is a synopsis of some of my columns I believe were important, or in the event you were out for the day and/or did not read my Diary. The principal intent is to review the logic of my market moves and other factors:

No Worries... Should We Worry?

My Ludacris Forecast Was Ludacris!

SPY ODTE Calls Rule The Day

Here were yesterday's trades:

* Buying Big Pharma

* Covered (PFE) short

* Shorting Private Equity

Position: Long JNJ (S), BMY (S); Short SPY calls (M), QQQ calls (VL), KKR (S), APO (S), KKR (S)

Charting the Technicals

"The man who reads nothing at all is better educated than the man who reads nothing but newspapers."

- Thomas Jefferson

Bonus: Top Links

* The Five Top Charts

* Dwyerama

* A Gold Breakout?

* Performance Chase

Position: None

Investor Optimism Ignites

The S&P Short Range Oscillator is ripping higher.

It is now at a very overbought 8.17% compared to the day earlier's 7.57%.

Position: Short SPY calls (M)

You Wanna BETS?

Position: None

Wowza

Position: None
Doug Kass - Watchlist (Longs)
ContributorSymbolInitial DateReturn
Doug KassVKTX4/2/24-26.73%
Doug KassOXY12/6/23-11.26%
Doug KassCVX12/6/23+14.24%
Doug KassXOM12/6/23+18.09%
Doug KassMSOS11/1/23-15.33%
Doug KassJOE9/19/23-10.23%
Doug KassOXY9/19/23-23.14%
Doug KassELAN3/22/23+40.53%
Doug KassVTV10/20/20+68.93%
Doug KassVBR10/20/20+80.53%