How Many Burgers Can I Eat ?
McDonalds took a real beating today on earnings and everyone was asking the question, are we at PEAK Burgers?? This isn’t the oil market where we know that with the exception of advances in technology (fracking, etc) and use of new power sources, we will eventually run out of the black liquid. A better question would be have we finally gotten to a point where there are just too many burger joints that will serve you breakfast, lunch and dinner? Like the Starbucks across the street from each other, and the blocks of food drive-thru windows where you can get tacos, burgers, chicken and most anything, the issue for MCD $121.86-$5.54 or roughly $40 Dow points, is are there just too many competitors for their market. In a quarter mile in my small town there are McD, Burger King, 5Guys and Wendy’s. How many burgers can I eat??
Apple went the other way and after closing $96.67 down for the 4th day in a row beat expectations and closed @ $103.25. It has now made a recovery high over the the gap down it left last quarter on its miss. If it moves a little higher $104 it will have completed the roundtrip.
Enough about what’s happened already, let’s look at trades that look good now. The US$ index has spent the last month consolidating after the massive move up on Brexit. While it looks a little expensive, it has been able to consolidate ABOVE its breakout @$97.00 The longer it spends above this level, the more likely it is to hold and move higher. That should be bad news for Gold, Oil, and any of the other world commodities quoted in US$. The GLD has been trading between $125 and 130 since the Brexit vote. I’ve been trying to buy the lows and sell the highs but as yet have not been able to succeed in either the puts or calls. Unfortunately, this market has done exactly what I expected, but since it trades all around the world it’s been doing when our markets aren’t open. Right now I would pay $1.55 for either the 8/126.50 calls or the 8/126.50 puts, and stop them out on a decline below $124.75 or above $127.60. Anyone who knows me knows I really don’t care if I get the trade off or not, if I can’t do it at my price.
If we’re right on the US$, then the other trade would be in the Oil. Today I sold the SCO, bought @ $89.28 @ $102.92. Last night I said I’d sell it @ $105 or better but it is getting oversold and was down 4 days in a row and from $46 to $42.50. I took the profit and will now see if it holds this important area of support.
We also sold COTV on a stop at the close today @ $23.84 for a $3.00 gain and we also added both AA @$10.43 and AA 8/10.50 calls @ $ .34. The stock closed $10.65 and the calls @ $ .43.CAM
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