Presented by Greg Jensen, Karen Smith, and Eric Hale.
Greg Jensen: Good afternoon, good evening everyone. Welcome to the Options Animal Weekly. This is Greg, glad to be here today. I’m joined by two of my favorite people on the planet.
Karen Smith: Aww.
Greg Jensen: Eric Hale, glad to have you here, Karen.
Eric Hale: Oh I thought you meant your wife, and [crosstalk 00:00:18].
Greg Jensen: Oh, well I am actually at home today, but I’m just sitting in my home office, but I’m talking about you two. I’m talking about you two.
Eric Hale: Aw, thanks.
Greg Jensen: My hope is, for you guys, is that you were long this week, because good grief! Can we go any higher? I guess before we get into talking too much about what’s going on in the market, I need to remind everyone that the information in the broadcast today is for educational and illustrative purposes only. No way a recommendation to buy or sell any security, nor should it be considered any type of investment advice. Remember that these stock and options market do involve risk, and you should have a firm understanding of the rights, the risks, the obligations, associated with all your trading instruments before considering placing any type of trade. Make sure and have those primary and secondary exit points planned, because you never know when the market’s going to get just too bullish, which has been the case. Right? I mean up, up and away!
The stat I read today is that 18 days into the trading year now, we have now surpassed almost 70% of the analysts’ end-of-year target on the S&P already. We could finish at 2872. Only 5 out of 15 analysts had end-of-year targets higher than where we’re at. Just not even three full weeks into the year, and … You know, to be honest, it’s starting to get a little bit unnerving how bullish this is going. Especially the last couple of days, because I thought we had a little bit of profit taking this week, especially in the tech sector. I’m like, “Okay, good. Here it comes. We’re going to get a little bit of pullback.
On Tuesday, I think was the day we got a little bit of pullback and yet, even though we did have some sell-off in some big names like Apple … Had a little bit of a sell-off this week. You know, you had companies like Facebook take a little bit of a breather, at least for the first part of the week. Then by the end of the week it didn’t. Microsoft, Google, some of the big, big tech names took a little bit of a breather. You had other names just absolutely just barreling to the upside all week long. From Amazon, to Netflix, to Boeing … I mean, you can go down a list of stocks and just … We’re starting to get parabolic right now.
I wasn’t expecting this bullish of a move, but this move in January is getting really kind of stupid. I’ll be honest. I can’t think of a better word than bullish, but it’s stupid bullish right now. I mean, it’s crazy. Look at the RSI on the SPX right now. We are at 87 on the RSI, almost. That is just unreal.
Eric, are you bullish right now?
Eric Hale: Hey, I’m trading what I got. I agree with you 100%. I don’t think anybody’s surprised … It’s a really good week, too. Lots of good stuff going on, and listening to people talking [Davos 00:03:37]. I don’t have access to these numbers, but I do hear there is still a ton of cash sitting on the sidelines. I was talking to an investor early part of this week who said, “I’ve basically been … For the past three years, I haven’t really been in the market.” There are a ton of people on the sidelines watching this go. When you say parabolic, that is the word.
I mean, there is no doubt, if you look at this trend that we’ve had going up until December as being very bullish, I mean just look at January! It is just insane. I was going to say, you said we’re higher than like 70% of the forecast for the year. Can we just like put the market on pause and for the next 11 months, just stay here? What about you, Karen? What do you think?
Karen Smith: Yeah, you know, today was the day that surprised me, because the other days this week we were kind of starting to hesitate. I thought, “Oh well, we know that overbought conditions can be worked off one of two ways.” Either with a pullback, like you mentioned Greg, or with time, with consolidation. So I thought, “Okay, this is going to be that sort of consolidation phase.” Then of course, today came and in particular, if you break down today’s price action, most of … Well, I shouldn’t say “most of”, but there was certainly a push, maybe an option expiration Fridays sort of event that happened in the last 30 minutes that really catapulted things.
In terms of that overbought condition, if you happen to take a look at a weekly chart, so a one year weekly candle chart, on the S&P, we are actually above 90 on the RSI, on that particular chart. Greg, I was actually going to ask you, because I’ve been involved now with Options Animal and very active in the markets since 2008, 2009 … I don’t think I can remember a time so far in this bull that we were that overbought, technically speaking, on the RSI. Even in 2013, when we started the year very bullish, if you recall, that was quite a big week for the S&P, I don’t remember going to these extremes.
So I tend to agree with you gentlemen, that you have to trade the bull bullishly. Long calls on the SPY have worked really well here recently. But at the same time, common sense just says, “Hmm, how long can this go?” In particular, is this sort of that “blow off top” that often accompanies some sort of volatile, bearish volatility, dare I say that out loud, that can come to the marketplace.
So Greg, do you remember being that overbought in this bull? I don’t. Maybe we have been, and I just don’t recollect.
Greg Jensen: Not this bull. The last time I remember this type of euphoria was 1999. It wasn’t across the market like this one is. In 1999, although the whole market was relatively bullish, it was really just a handful of tech stocks … You know, the internet-based type of companies that were this bullish. In fact, you were seeing a lot of selling pressure in some of the other names of people like, “Yeah, I don’t want to own Wal-Mart or Home Depot or Boeing or any of the airlines right now because I want everything in Silicon Valley.” So there was a huge rush to everything dot com. Some of you may remember that, some of you may not.
This one is across the board. It is really hard to find a sector that is not participating in this rally right now. Part of that, I think, does come back to what we’ve been saying for several years now, that has been driving this market. That is, TINA, that there is no other alternative, except for there always was one other alternative that we just didn’t talk a lot about because we don’t trade it a lot. But that was the bullish bond market that was going on, right alongside the S&P for the last five years.
Well that may be where a lot of this cash is coming from, because the bond market is starting to show signs of weakness. We are starting to see some selling going on. I think there’s a lot of people who have been in bonds for the last 5 to 10, arguably 15 years, that now that there are several signs on the horizon that the bond rally may be over. Whether it’s comments from China from a few weeks ago, that said, “We’re no longer going to be buying U.S. bonds.” Whether you believe it or not is one question. I know President Trump came out and said that was fake news. But China said they’re not going to be buying bonds anymore, per report I believe from Bloomberg.
The one report that I think is very clear, and it is going on, is the selling pressure in the bond market that’s coming from The Federal Reserve. We know they’re selling, we know they’re decreasing their balance sheet. They started in October. We know we’ve got about four and a half trillion dollars of debt that’s going to get sold back into the market from that standpoint. So, rather than getting defensive and moving to cash right now with it, I think what’s happening is you’re seeing a huge influx into the S&P 500 and other dollar-denominated assets.
Now, a lot of this move you could arguably say has been … At least this week, has been fueled by Davos. Eric, you mentioned it. The interesting move earlier in the commentary early in the week was from Treasury Secretary Mnuchin, who said, “A weak dollar is good for the United States, and good for our trade policy.” So you saw everything dollar-denominated, whether it’s the S&P, whether it’s things like gold, whether it’s things like … Well, other than maybe Bitcoin didn’t, but the dollar decline has had, I believe, some positive pressure on the S&P.
So Eric, you hinted at Davos. What are some of the other things that maybe you saw this week that helped push this bullish market, or maybe just kept the pedal to the metal, so to speak?
Eric Hale: I mean everybody from Larry Fink and Blankfein, and Dalio … Well, I don’t know if you saw it. Did you see Trump’s speech today? I don’t care what side of the aisle you’re on, it was a darn good speech. It was … I mean, I don’t know, somebody must have made him practice because you can always tell when he’s going off script, but it was a very well-written speech. I thought it was excellent, made a lot of sense. I mean, it was pretty good.
We don’t see U.S. Presidents going there a lot and talking, but one of the things that came out, and you mentioned this on the U.S. Dollar. This is something that does have impact on the market. I remember a time not too long ago, maybe like four or five years ago, maybe longer, where it was only the U.S. Dollar that seemed to matter. It was the strength of the dollar, and the weaker the dollar got, the higher the market went. I don’t know that that’s necessarily a good thing. There’s a point where a weak dollar is not good. It’s funny that you commented on that, because Mnuchin said this week that, “Hey, a weak dollar is good for the economy.” Generally, it is.
No President ever says he has a weak dollar policy, because I think some people … It’s too much to explain to too many people. They think it’s like saying, “I’m going to burn the flag.” Or something like that, they equate the U.S. Dollar with some sort of symbolism. But what a weak dollar does is it makes our products more attractive. I think what we’re seeing is definitely this … This blue line is the weakening. This is something from Dave Wilson from Bloomberg News. He sends out a chart of the day. This was the chart of the day, and this is something that came from Jim Paulsen from Leuthold Group, that was saying, “Hey, hold on here a moment, because a weak dollar is okay. But considering everything else, considering the situation with the 10 year treasuries, this could actually be a bad thing.” And that’s true. When the dollar gets too weak, it’s a bad thing.
So having the U.S. Dollar lower does make our products more attractive. It makes it harder for us to buy things outside of the United States, but it certainly helps our products and people who are exporting things. Generally what happens is we’ll see a rally in commodities, and we’ll also see the market tends to go up with a weaker dollar as well. Karen, did you have any thoughts on the U.S. Dollar, any of this commentary? What did you think about this week with regards to that?
Karen Smith: It definitely provided some intraday volatility, obviously, on Wednesday, that was that day where we had the … There for a while, we were getting into a pattern. It looks like the buy programs trigger in the mornings, and we head up and then we kind of top out a little bit. Then on Wednesday, in particular, when all of that vernacular was coming out, that’s when we saw that quite volatile day, big swing on the Dow, in particular.
I think it all comes back to the context as well of the Fed. If, in fact, this lower dollar does start to lead to stronger and stronger inflation, when does the Fed start to become a nuisance maybe, if you will, to these markets. We’re going to have a new Fed Chair, it’s going to be a really interesting year, obviously, as we move forward.
So, not a lot of talk about that at this moment in time. Of course, I don’t want to jump too far forward into the data of the week and that sort of thing. But in that context, I think it could be really intriguing as we head forward. Will they continue to be as friendly and benign to the markets in light of the fact that we have these forces that obviously could start to “overheat”, maybe for the first time in this entire bull run.
So that’s something to kind of keep on the back burner, but at least at this moment in time, markets don’t seem to care about that sort of thing at present. So what do you think, Greg, in terms to the Fed?
Greg Jensen: I think you’re absolutely right there, Karen. I think if you take a step back and look at the big picture economy. If you go back to level one, if you think what we always talk about, what drives the economy. Well, it’s a good labor market. We’ve had a good labor market here, domestically, for several years now. Now, we’re operating, I would say at full employment, yet really through most of 2014 and 2015, even though most of 2016, the market didn’t really rally like you thought it may have based on full employment, based on good S&P earnings. Yeah, it was bullish, but it wasn’t a screaming bullish really until 2017, and now obviously the kickoff of 2018.
I think part of that has been that the different policies that President Trump was elected on, we all knew were going to be good for the economy. I think the first maybe six months, even arguably until the end of the year, the biggest question mark was, “Is this administration going to be able to actually get the things done they said they were going to get done?” So I think there was some question mark, and some people holding back of, “Yeah, we’re really going to really jump into this market until we get the Tax Reform passed.” Once it finally passed, I think all of the people who were maybe whether you want to call them anti-Trumpers, or you want to call them … You know, they just didn’t believe that it was going to happen. Even without being an anti-Trumper, they just didn’t think that government can ever pass anything anymore, because they’re so inefficient.
When it actually happened, and they realized, “I gotta get bullish in this market, because everything is lining up.” We’ve got a fantastic economy here in the United States, but it’s going abroad now, too. We’re seeing strength in Europe, we’re seeing a lot of growth in Europe. We’re seeing even South America, excluding Venezuela, that’s its own mess, obviously. But outside of Venezuela, you’ve got a strong South America. You’ve got strong Asia right now. China is firing on all cylinders, Japan is doing well. Korea’s … I mean, things internationally are growing. We have a full labor market. We have S&P companies beating on the top line.
I know we’re going to get to that to talk about some of these earnings, but I’ll be honest, today’s announcement from Intel was the one that has me as excited about almost any earnings report out there. I guess it was last night, but Intel’s number, to me … They’re old, they’re huge. For them to have good top-line growth, that’s exciting in my opinion, for the potential growth of the economy right now. Because of all of those things, I think the only obstacle that this market can hit right now is the Federal Reserve, and whether the Fed is going to push the brakes from a monetary policy standpoint. But so far, they have not signaled that they want to.
Yeah, they’re talking about raising rates, but they’re so caught in this fear of deflation that this market is running right now. I said we were going to melt up. I thought we could get to 3,500, 3,400 on the S&P. At this rate, we’re going to hit that by April. I hope not, because I’m not that bullish. My positions aren’t that bullish. I do have some covered calls on some of my stocks that I don’t want taken away, but anyhow, yeah the bull is on. Until we see something else come in and try to push the brakes, it’s going to keep going. I would love to see a pullback, to be honest. When markets get this bullish, this parabolic, it it makes you start to question, “Okay, this is feeling too bullish.” And the faster it goes up, the quicker it’s going to come down, too. I’d love to see a breather.
If we could even just go sideways for a couple weeks, that would be fantastic. Let us reset some of these overbought RSIs and overbought technical indicators. Because right now, we’re getting in the ether on this overbought.
Eric Hale: I don’t know if you saw the … I pulled up a … I guess it was a few slides ago, but Karen mentioned it and she said a weekly chart. I went back, so here’s a 10 year weekly chart on the S&P 500. Yeah, those are weekly bars. This is 10 years. This is going back to 2007, okay? Look at the RSI here. Look at it! I mean, on the weeklies, we barely get above it. Like Karen pointed out, we’re up over 90 on the RSI. That is incredibly overbought.
I saw somebody posted a technical saying that this has only happened four times in history that we’ve had the RSI coincident with all these other indicators. The technical that they showed indicated … And I’ll see if I can find it. Showed that the market, three months, six months, was higher, even though we were overbought. So what we’re talking about here from a technical standpoint, this an oscillator, because they tend to seek an average. So it spends some time above, and then it spends some time below. Then it kind of goes back and forth. When you get too far on one side, that might be the time to buy. When you’re too close to one … You know, to high, that might be a time to sell. That generally works.
But we’re in this different market. I swear, I mean just the past two years have been the weirdest market. I mean, it’s not like anything I’ve ever seen before. I mean, I’ve got a good solid decade of keeping an eye on this. I go back in back past, and look in 20 or 30 years, even longer. I don’t remember seeing a period with this low volatility, no pullbacks, and now we’re going freaking parabolic here. I mean, it’s insane. It’s insane!
Karen Smith: Yeah …
Eric Hale: I mean, from a technical standpoint, you have to say it’s going to pull back. Go on, Karen.
Karen Smith: Well, I was just going to say, looking at that [inaudible 00:20:20], that is something I hadn’t looked at, coming into this session. But looking at your [inaudible 00:20:24] as well, take a look at the velocity of that [inaudible 00:20:27]. The only other time, really, that you see quite that velocity and that size on the histogram bar, is back after 2008. So, when we started the recovery, basically, in 2009, was the last time you see that.
So, momentum is a force. Obviously, that fear of missing out, FOMO as we call it, is obviously in play. Record in-flows, in particular, into the SPY, which is sort of that passive investing thesis of … You know, especially individuals like you said, who have not been involved, and finally capitulate and say, “Okay, I give up. I can’t take it anymore.” The same sort of thing that happens in market bottoms, when the last hold-outs sell, and that’s the bottom, and off we go. Same sort of scenario here. I’m not saying we’re copping out at this moment, certainly, with this very strong momentum. But you do kind of have to look at it, shake your head a little bit.
Really, to buy here, with the assumption that we don’t pull back, and that we just continue to go higher, if you’re playing odds, the odds are not really in your favor on that particular trade, at this moment in time. I agree with you, Greg. The best scenario is just a pause, just a healthy pause, that resolves this. But, when you start to get these straight lines to the upside, that’s oftentimes the little mini air pockets, maybe what I call it, are formed, and it can come down just as hard. So that’s why we hedge, and that’s why we have, as you mentioned, secondary exits in place. It’s ready to go, just in case.
Greg Jensen: And to be honest, just so you guys aren’t looking at your portfolios right now, and you’re looking at the strategies that you’ve learned from us, and you’re wondering, “Man, I’m up this month, but I’m not up like the market is.” Well, part of that is good that you’re not up like the market is, because that means you’re being proper in your trade structure.
When we teach proper risk management, and you actually apply proper risk management, you’re not going to beat the market when it’s doing this kind of thing, because you can’t and still be properly hedged. You have to be all out bullish. The risk of being all out bullish, you pointed out very well Karen, is that at this level, you have to start being cautious. I mean, the weekly trade that I did today on Verizon … Just my selection of Verizon in and of itself was like, I would love to say let’s go do Netflix, but can you even … It’s not that I’m … I’m in Netflix. I am. I’ve got a big position in Netflix. But, I can’t buy any more at this level. I mean, it’s insane up here. I have to wait for a pullback before I jump in there.
So yeah, it’s an interesting bullish market that I expect we need a pullback soon. I still don’t think the pullback’s going to be very big, because I agree with what you said, Eric. I think there’s a lot of money waiting to get to running because of all of the underlying fundamentals in the worldwide economy that are good right now. So even though the market may be a little bit ahead of it and getting expensive, it’s really the only con you can find out there for this marketplace, is simply that the valuations are so high that it needs to breathe for a little bit. Go sideways, if nothing else. Maybe even have a three to five percent pullback and then take off and go bullish again, because of earnings like Intel’s that we just had. I mean, earnings like Netflix. I don’t know, did you guys see Netflix this week?
Eric Hale: Don’t you follow me on Twitter?
Greg Jensen: I do. I know you saw Netflix this week.
Eric Hale: I was doing the happy dance this week. I did an exploding [inaudible 00:24:19], a rather large one on it. So I can buy a car. That was a good week.
Greg Jensen: Yeah.
Eric Hale: Yeah, it was a good move. By the way, I love that trade, because it’s like you do have protection to the downside. You got high probability, and if it explodes up, it just … It exceeded my expectations, and man it continued to run. But I hit my primary exit and I was out.
Thinking ahead … I don’t want to get too far ahead with earnings, but be interesting to see some not too far away. We’ve got Apple coming up in a few weeks, but we’ve got some other earnings coming up next week, some tech companies. Of course, Starbucks disappointed, but one thing I do want to do … We had this really bullish discussion. Before we go too far, I wanted to talk a little bit about some of the volatility indices, you know the VIX, which is a little bit higher than … We’ve been talking about it being potentially getting into the low eights here. Now we’re hovering around 11, so there is a little more volatility there.
I wanted to point out the VIX futures though. So the bottom line here is the VIX. These are the VIX futures. The VIX is a calculation. It’s based on puts on the SPX options, the cash [inaudible 00:25:38] It is a direct indication of whether option are expensive or cheap. That’s really all the VIX is. If the VIX is high, then SPX options that expire in 30 days are high, or around there. That’s basically all it means.
What can you assume from that? Well, when it’s high people are nervous, right? But the VIX futures, of course, are traded based on what people’s perception of what the VIX might be in the future. What I see here is this rising up in the … At least, this is the March future, this is June futures, where we got a little spike up and then a pullback. The futures haven’t come back down. In fact, they’ve gone up a little bit, while the VIX has gone down.
So sometimes we see the VIX futures move in one direction. This is why it’s really dangerous to trade those. When people are trading a VIX derivative, you’re not trading the VIX, you’re trading something that’s based on the VIX futures, whether it’s options on the futures, or the actual futures on the futures, or some other sort of derivative. There’s some really funky stuff that’s out there. You’re like, “Well, the VIX went down, but wait, why did my trade go the other way?” That happens. Or the other way, you know, the VIX went up and yours didn’t trade. You’re like, “Why did I not make more money? The VIX moved 10% and my ETF didn’t change.”
This is a little bit bearish concern. So we’ve got VIX, little bit higher, that’s a bearish concern. But what I usually do, I go to look to the futures and think, “What are the futures telling me? Oh wow, the futures are still hanging up here.” That means somebody’s sorta betting that they want to see the VIX up around 13 in the next month. That’s what somebody in the market, or people in the market, maybe that’s where the market thinks they feel a little bit comfortable there. So that is a little bit of fear. That is a little bit of fear in the marketplace and something we should be aware of.
I wanted to take that and go down a couple other paths and talk about some sentimental indicators. When I do the slides … Karen did the slides, by the way, but I threw in a couple extras of my own. Karen did an awesome job, as usual.
Karen Smith: Thank you, Darling.
Eric Hale: You’re welcome. This is the CNN Money Fear & Greed Index. This oscillates between extreme greed and fear. I wish we had an S&P 500 chart to throw in here with it to see, but generally speaking, when it’s very high, those are usually market tops, and the very lows. So we’ve been much, much higher. We haven’t had any bearish markets for quite a while, but we are pretty high. We’re up in this extreme stuff. That is a little bit of a cause for caution for me, when too many people … I think that will be the sign of the top, is when everybody says, “Fine, I’m gonna just put all my money in the market. I’m all in.” Everybody’s like, “It’s going to continue to go higher, and I gotta get it.” And everybody and your grandmother, they’re all putting money in the market, that’ll be the top.
So these warning signs of extreme euphoria in the market, we need to keep an eye on that. It’s not a reason to be bearish, but there is another changing sentiment that I want to share with you. So I subscribe to the Bespoke Premium newsletter, and I share some of the results. There was a day today, they pointed out and said that there’s a significant shift in short interest this week.
So on the 25th, the data from 10 days before … So short interest, that’s how many shares that bears have borrowed from shareholders, with the intention that they’ll sell it at this price and buy it back at another price. That is another bearish sentimental indicator. So I think implied volatility and short interest are two of the best ways to get an objective measure of what the market’s thinking. So there was a pretty significant shift.
So this shows where it was … Because it’s updated every two weeks. This shows where the short interest was, and where it is today. What we’re seeing … So going to the right means more bears, and everything across the board, all the sectors, every one of the sectors here, there has a been a shift in bearish sentiment, more than where it was. Some more than others, but everything went in the same direction.
Now that doesn’t mean that a crash is coming. It doesn’t mean that at all. It’s just one of those things that you’ve gotta say, “Hmm, okay. Let’s take a look at this.” Because some people are bearish. Does this mean that I need to be hedged? We preach this all the time. This means you’ve gotta have your secondary exits in place. When you’re not sure what to do, I know what Karen would say, I know what Greg would say. They would tell you … Well we’re not giving trading advice, but I know what I do with my account, I know what they do with their account. We go [inaudible 00:30:41] and protect ourselves in case something happens.
But I want to dive a little bit deeper down on this, because there’s some information here that might make your jaws drop a little bit. I’m going to look at some of the individual companies that are shorted. So these are the S&P 500 most heavily shorted stocks. This is one that I know a lot of people like to look at, Under Armor. It is now at 31%. That’s 31% of all the shares that exist are short. That’s pretty darn huge.
There’s some other names that are in … You go down a little bit lower, Harley Davidson sometimes. But I know that … So down here, we got a whole bunch of retail. So I know we have some people that trade Mattel, and Nordstrom’s and Macy’s, Ralph Lauren. So there’s a bunch of retail and 15% of their shares are short. This information, you don’t have to get it from Bespoke. It’s available other places. You can find it on Google, a number of different places, but they just did a nice job presenting this information. So this is something to be aware of.
The other thing, if you’re not familiar with short interest, there is a phenomenon called short squeeze, which actually makes the stock price go higher. So, somebody who’s trading Under Armor, or somebody who’s a little bit savvy, they may want to put a bullish trade on it because these bears, when the price goes up, they don’t like that, puts a lot of pain on them. So, if it goes up, those people could decide to get out. When they get out, they buy the stock, makes the stock go higher. These are all candidates potentially for short squeeze.
But what usually happens is that shakes itself out, and then the stock goes back down again. So it’s another reason to be careful, and just not trade just technically, to really dig down and look at some of these sentimental indicators. If you see a stock moving really bullish, “Oh, everybody’s bullish, I’m going to go buy it.” Then you find out what’s just short squeeze, and when all the short interest is gone, then it goes down. So you gotta be careful with that.
Now on the other side of the chart is the least shorted stocks. This is kind of interesting here. So Pepsi, S&P 500, less than .53%, Microsoft, Phillip Morris, there’s some real good quality in here, some interesting companies. So these are the companies that have the least amount of short interest. I’ll leave it for you to digest, but I just thought going back to this and seeing a shift in short interest, it is another sentimental indicator. I showed the VIX futures here, that we got this bump up. I’ll let you two respond. I don’t know whose turn to talk … Was that Karen or Greg?
Greg Jensen: Well, I just sent you a chart, because I actually … In the background, I thought, “You know what, I’m going to see if I can find something with a longer term, back to when the RSI was this overbought.” But I actually found kind of a scary chart. I sent you an email. It’s actually somebody else’s work, I found it on Twitter. But it’s some interesting trend lines that he’s drawn in there.
What drew me to it first was the overbought RSI, but the interesting trendline … And his caption, by the way, says, “SPX Hell is almost here. Enjoy your weekend.” We’re very overbought. We’ve had a significant rally, and honestly if we don’t get a pullback, I do get more and more worried that something’s going to be this bad.
So here we go. So you can see up there on the top, the RSI level. Like I remember, the last time it was this high was 1998, 1999. The trendlines that are interesting, he’s pointing out obviously some potential reversal levels that it could hit based on the trendline. Now, it doesn’t have to reverse when it hits that trendline, right? It could break right through it and go to the upper level of that trendline also. So there’s a potential for the market to get really bullish, but there’s also the potential for a big pullback right here.
The fact that we’re as overbought as we are … Now these are monthly bars, by the way. These aren’t weeklies, this is a monthly chart. So even that far left side, back in ’99, 2000, even when we were hovering at the potential of a correction level, if you look at this and say, “Hey, there’s a trendline that we’re about to run into. This looks like resistance.” Notice that for 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 months, it hugged that top resistance line that this individual has drawn in there.
So we could keep hugging that top line, but I think what you have to do at this point is what Eric just mentioned. Watch things like short interest, watch volatility. Those are going to be our telltale signs. To me, one of the other ones that I continue to watch … And Karen, I know you put this chart in here. I’m still watching the yield curve on the difference between tens and twos right now. That, to me, it continues to tighten. We’re continuing to see the yield curve flatten.
Now, it’s not negative yet. We’re still positive, but it continues to trend lower, this difference between the two year and the ten year. Because of that, if that ever does roll over, that could be, again, another indicator that it’s time to take some profits off the table, maybe wait for a pullback to jump into the market. I wouldn’t say, in any sense, go short this market. That would be crazy at this point. I think you still have to be long right now, because that’s the trend. But your Spidey senses should be going off here pretty soon, that hey, we’re getting a little overbought. Maybe it makes sense to take some profit off the table. You may not get all of the gain, but you never go broke taking a profit either, is an old saying that I once heard.
Karen Smith: Spidey sense, I love that. That’s great, Spidey sense! Fantastic, Greg. I couldn’t agree more. I let some things get called away in the last couple of weeks in oil and stuff that was just so unbelievably bullish. It never hurts to raise a little cash in the middle of something like this. That gives you opportunities, or gives you cash available to try to spot opportunities. So, stay long, but hedged. I think that’s what we’re saying.
Eric Hale: So this another chart somebody emailed me this week that’s interesting. It’s the one I alluded to earlier. So this is still looking at a different RSI, looking at a 14 month RSI. Every time that we’ve gotten above 85, what’s it look like six months, 12 months, 24, 36 months later?
Six months, we’re up 7.6. In 12, we’re up 17, in 24, 55. These are generally considered really overbought, and the market, every time that’s happened has plowed forward. So this is on the other side of the case, maybe this is bullish indicator. I don’t know. I think you have to look at everything. I don’t think any one of these is going to be right. That’s the thing that scares me, too, in technicals. They can go back and find a technical that proves whatever they want to.
Greg Jensen: Yeah, and even pointing back, like you said, pointing back to that chart that I just sent you, it doesn’t … Just because it’s at that middle potential resistance line, that doesn’t necessarily mean it’s going to hold. It may blast to the upper one right now. That’s a very real chance. We could keep going bullish. I just want a breather.
All right, what else drove the market this last week? I know we’ve got some earnings that performed really well. We had some economic data, let’s talk about that first. Economic data was kind of mixed. I mean, we had some home sales data that was both missed expectations, though pretty solid numbers, to be honest. Both new home sales and existing home sales were okay, considering the mortgage rate is starting to creep up. You do see that starting to climb back up again. So new home sales was good.
GDP actually missed its number for the month, though still in a nice, positive trend line. The best one I saw this week was the Durable Goods order. The Durable Goods number was solid, indicating … To me, this is a reflection of things to come, because I believe we’re just starting to see the tip of the iceberg when it comes to capital expenditure, because of the new tax bill.
I think, again, if you believe what Apple said, they’re going to bring a lot of money back home, and they’re going to put it to work here. They’re going to be doing a lot of Durable Goods orders. That was a very positive number. So, yeah, economic events were kind of mixed, but I’m still seeing they were relatively positive.
Eric Hale: The other one was Initial Claims, which was up a little bit. So they revised up 17,000 from last week. We’re at 233,000 Initial Claims. It’s seasonally adjusted, which okay, but I think putting it in this perspective, we go back to 72 and really look at where we’re at and see. So this dotted line is a four week average, is what it is. That’s what that dotted line.
It shows that we’re … Somebody made a comment earlier in one of the chats about, are we near full unemployment. I argue that we can get down into the low threes, mid to low threes. I think we can see a three … We’ll find out next week. We’re getting ahead of ourselves, but the employment situation, I think we can see a 3.5 if things continue to go the way they are.
I do think from a fundamental standpoint, the TDP is plowing forward. All of the things … And I think there’s more opportunity for growth. This is hard to get this much, much lower than here. I mean, I don’t know that we can get down to 200,000 just because of the way things work. I mean, some people just automatically get laid-off seasonally, and there’s nothing you can do about it. We can only get so low.
But I do think the employment situation, I think we are going to see inflation, we are going to see wage growth. The other big one you touched home sales. So new home sales, it’s a choppy number. So it didn’t freak people out. But one of the things that I did want to point out, and that is the difference between existing homes and new homes. Historically, there’s always been a pretty good correlation between those. Through the crisis that happened through 2007, both markets took a real beating, but new home sales took a real beating.
I mean, look at this. We are still not even back to where we were back in ’94 for new home sales. That market has not come back. During this period of time, all of this time, new home sales is what grew the market, and we’re not even there yet. We talk about shifting demographics and millennials, heard an interesting stat. One in four millennials has $100,000 in their 401K. I think they’re a little bit more conservative, probably because they’re tempered by … They lived through this. They’re old enough to remember it. Maybe they were young teenagers or something, but they certainly are astute enough to know that that happened. Maybe that’s impacting them, but those people are going to buy homes eventually, and maybe it’s multi-level homes. I don’t know. They might all go live in communes and they’re going to move out of their parents’ basements some day.
I do think what’s going to happen when we start getting inflation, we start getting wage growth, and we start getting housing really taking off, this market could continue to rip just insanely higher. It can happen. I know we’re giving arguments for both, and I always trade heads. I always make sure that I have an exit strategy, but I think you can make a bullish case here, too, for the market to continue. I don’t think anybody could deny that. I think the case is there.
Greg Jensen: Especially if you saw Netflix earnings.
Eric Hale: Yeah, Netflix. That was fun.
Greg Jensen: It was fun. I keep thinking, “Okay, this short call’s okay. I’ll sell this one that’s $20 out of the money.” Then two days later it’s in the money, and I’ll like, “All right, I’ll roll it out 20 more dollars.” Then it goes into money.
Eric Hale: $20.
Greg Jensen: Good grief.
Eric Hale: That’s a logarithmic look at it.
Greg Jensen: 274, yeah now I’m now five dollars in the money again on my short call.
Eric Hale: Oh yeah. Maybe you’re going to be selling …
Greg Jensen: Maybe I’ll let it go.
Eric Hale: You’re going to sell some stock. And Starbucks got beat up this week. Intel was fantastic. Karen, which of these were you following this week? I wish Jeff was here to talk about American.
Karen Smith: Yeah, well I’ll talk about Starbucks in my stocks to watch, since it’s one I picked for the year. But as far as the airlines go, that is one area that had some volatility, downside volatility this week. It was actually the dreaded words that you never want to hear if you are investing in airlines, additional capacity. It wasn’t American that said it. It was actually United said it in their earnings report. They were down double digits, Delta, America, you know, the entire space sold off on that. The earnings have been good, actually, in this space. So think that that might present a short-term sentimental opportunity for some of these, particularly American and Delta. But those are the ones that I was following and I’ll save Starbucks for my stocks to watch section.
Eric Hale: What’s the …
Karen Smith: Greg, did you follow any of those? What’s that?
Eric Hale: What’s United symbol now?
Greg Jensen: UAL.
Karen Smith: UAL, I believe.
Eric Hale: Oh, okay.
Karen Smith: Do you follow any of those, Greg, besides Netflix?
Greg Jensen: Yeah, a handful of them. Intel’s earnings were solid, both Freeport McMoran and Halliburton reported this last week. I think the picture, if you step back so far, you have to say … And the reason why I pointed out Intel to being the highlight is, the highlight to me so far this earning season as a conglomerate SMP, is we’re beating on top-line revenues.
That’s exciting. That means the economy’s really growing. It’s not just financial engineering, it’s not just the companies buying back shares so that they manipulate their earnings per share higher. It is legitimate demand for product, and we’re seeing it in a lot of different spaces. Even though Starbucks got beat up … And I’m interested to hear your commentary on it later, Karen. I listened to the interview that … I think, was it Kramer that did the interview this morning on CNBC with the CEO of Starbucks? I have to say, it still is pretty … I’m still pretty bullish on Starbucks, even though they didn’t perform here domestically. That was one of the things that caused them to have a little bit of pullback.
But yeah, the airline industry did get beat up. I think this is a competition thing. Competition’s good for all things. It had a nice rip to the upside. This is one of the reasons why I think Warren Buffett said he’ll never earn airlines, is because they do these type of things. Of course, then he went and bought airlines, right? Doesn’t he own United? Anyway …
Eric Hale: He owns a bunch of airlines.
Greg Jensen: Yeah, they have a lot of cash right now. That’s definitely one thing. It’s one of the reasons why Boeing keeps ripping to the upside. Even though they’re selling more airbuses right now, it seems like, than Boeings. But market doesn’t care. At least Boeing doesn’t care. Boeing just goes up.
Eric Hale: Boeing just goes up, yeah. They never land.
Greg Jensen: You want to talk about a parabolic chart, Boeing’s chart is parabolic right now. Unbelievable to the upside. That stock just goes up seven bucks every day. It paused a little bit, but yeah, look at that. It was at 160.
Eric Hale: Yeah, 156.
Greg Jensen: It’s $346 a share.
Eric Hale: That’s crazy.
Karen Smith: Yeah.
Eric Hale: Crude’s high. I mean, it’s made a nice bullish run here over the past few months, continues to run up. Crude impacts our economy. Nobody’s howling yet. I do think there’s some natural resistance that’s in there, because capacity’s going to come. I understand that we’re going to hit … Our new capacity’s going to go back and exceed, apparently what we were when Nixon was in office. A lot of American capacity coming online. It’s interesting to see what happens when crude going too high’s not good. But up here, start making it good for some of the oil companies, bringing some service and seeing some capital again, when the refineries start spending money because they’re making more money.
There’s a lot of ancillary businesses that are going to do well because other capital projects, people do projects, and they buy steel, and then steel workers get jobs, and blah, blah, blah. So, oil going up and getting it … That sector of the economy, too high’s bad for the economy but somewhere around here is kind of getting close to a sweet spot, where it’s going to be good for business. That could be another boon economically.
Another one that was this week for earnings, Caterpillar was up huge, was a really good three percent. The pre-market ended up coming down flat, but they had record sales, I think best sales they’ve had in 10 years. Just phenomenal. Another good sign, because they’re a bell weather for not just the U.S., but internationally, because they sell a lot of products around the world, especially China. So lots of reasons to be bullish out there.
So you want to jump to what’s going on next week? We got a big week next week for economic reports. There’s a lot of stuff coming out. Of course, the biggest one is the Michigan sentiment … No wait. I was just joking. Non-foreign payrolls and the unemployment situation, that’s the Big Kahuna, that’s the one that’s going to drive the market. Greg what else are you looking at this week?
Karen, what are you looking at this week?
Karen Smith: Well, obviously payrolls are always important, so we’ll take a look at that on Friday. We’ve got the ISM index to talk about manufacturing, we’ve got some continuing home sale information. This is one of those weeks where we have a lot of information from all of the different sectors, areas of the economy that we watch. I love these kinds of weeks, because I feel like we get a lot of info.
Consumer confidence, which has been, of course, astoundingly high. It’ll be interesting to see if it continues to stay there. PCE prices, our outgoing Fed Chair, Janet Yellen said that that’s the number that she has focused on most closely. That’s not necessarily to say that it’s going to remain that way before our new fed board. We shall see, but a lot of great info.
We want to take a look, and parse through this data carefully, because of all of this bullishness, maybe … If we don’t want to call it exuberance or irrationality, or whatever, let’s just call it excitement, anyway, in the market, is predicated on this pattern, and all of these things that Eric, you so beautifully discussed, continuing. So that’s why we always want to pay attention to these numbers.
FOMC, don’t really expect any surprise there. I don’t think they’re going to raise rates here, especially with her leaving and whatnot. So I think that’s going to be a non-event. Greg, anything in particular here?
Greg Jensen: Jobs. That’s to me, the one I look at. Any time it’s on the list, that’s the one I look at, and non-foreign payroll. So we’ll see how that comes in.
Eric Hale: Ditto, okay. Well then let’s move to announcements. Greg, you want to talk about announcements, or no?
Greg Jensen: Yeah, just a couple of them. We’re late on time, so I’ll remind you. We’ve got a couple of fun events coming up. We’ve got Trade School, which is obviously our partner event we do with E-Trade. Our first one we’re kicking off in Dana Point on February 10th. So that’s coming up in just a couple weeks. So if you live in Southern California, want to come spend the day with us, learn how to use E-Trades platform, get some education from myself, we’re going to be doing that February 10th.
Then the big event is March 23rd and 24th in San Antonio, our next upcoming summit. Looking forward to that one as well. Make your travels.
Lucy got mad at somebody.
Karen Smith: Oh wow, that was great.
Eric Hale: No, that’s my wife. The garage door just opened [crosstalk 00:52:27].
So, the other one is tomorrow, Jeff and I are doing the Trader’s Workshop. It will be on noon Eastern Time. We spend about four hours going through … I’ve been actually doing some due diligence. I almost always place the trade. So this is a lot like a 6.9. In 6.9, we go through setting up a trade, except it’s stuff we actually want to trade, and how we actually trade it. So 6.9 isn’t how I normally trade, because we’re just using the information that we have up until level six.
I trade in my own way, so this is real trading and some good stuff. I’m going to go through an example of a Tesla trade that I have open right now. I just want to walk people through it and show it. Then I’ll come up with a couple different companies that I’m going to trade, and I’ll go through all due diligence. Jeff will do something like that, too.
If you’re interested in coming, it is recorded. It’s archived if you can’t make it, but get with customer service if you don’t see the link. You should be able to see the link on the community website. If you can’t see the link, get with customer service right away.
Greg Jensen: Okay, take us to our Stocks to Watch. Let’s start with Karen today. What do you got, Karen?
Karen Smith: Okay, well I already mentioned the first one, which was Starbucks. Sierra, Bravo, Uniform, X-ray. I loved what you discussed, Greg, actually. I haven’t had a lot of time to sit and really parse through the earnings report yet. Any time that you get comp sales that aren’t favorable, that’s never going to be good for any sort of retailer. It certainly wasn’t for Starbucks.
Technically speaking, however, it closed off of the low point of the day, fell right to what we would consider to be an initial support at the low point of the day, at about $56, $57. I’ll be taking some time to go through those fundamentals and read through what was said on this conference call. But this could be an interesting opportunity. I won’t likely trade it for the next several days, but wait to see if you get follow-through to the downside, or if you start to see any sort of appetite, given that we don’t get pullbacks, as we’ve discussed, if investors might want to come in here. So that’s my first one.
The other two, I just thought I’d take a look at the equities that I’m watching for the year. So the second one is Macy’s, ticker symbol M, as in Michelle. I realize that’s not the phonetic alphabet, but nonetheless. Eric, it was really intriguing when you were talking about short interest, because with Macy’s sitting at, I think it was about 15% short interest or so. It was higher levels a few months ago. It was over 20%, so we’ve already seen … And I think that that’s part of what you see in that bullish chart, short interest covering at this point.
I continue to see articles, discussions, about this company being a potential takeover candidate for Amazon. I trade this, I have shares, it’s a great dividend payer. I put diagonals and things of that sort as hedges. Got in, right there, at that last earnings event, toward the bottom there at about 17. It’s not parabolically moving, but it certainly is holding it’s own at this point in time. So that’s an interesting one to take a look at.
Then finally, Exxon. That was my third company for the year, X-Ray, Oscar, Mike. As much as the oil space has had a really nice bullish trend here, to start off the year. This was one that was sort of left behind some of the others, Occidental Petroleum and some others had outperformed last year. So maybe a little bit of catch up going on. I think that as it gets close to overbought conditions, it may hesitate here for a bit. This again, a good dividend paying stock, and an interesting one to take a look at. [inaudible 00:56:13], covered calls, all those sorts of things are great to trade candidates.
So those are my three to watch.
Greg Jensen: Eric, what are you looking at?
Eric Hale: Well, first thing I’m goin to do is take myself off mute. Can you guess what my first stock to watch would be? I’m going to steal yours. [crosstalk 00:56:35] It’s a fruit company from Cupertino, yes. Apple has been … The haters want to hate. There’s been a lot of people that have been trying to drag this thing down. We had some, I think some dubious reports that came out over the holidays, some other pullbacks.
I am going to trade it. I am probably going to trade it bullishly, and doing something that will put me as a secondary exit on stock, going through it. We’ll see. I have to think when we get a little bit closer. It’s anybody’s … Nobody knows where … It can go up, it can go down. I’ll take a look at where I think it can move and determine where I’m going to put my break evens, but I would only trade it because I’m willing to own it.
So if it goes up, I make money. If it goes sideways, I’ll break even or make money. If it goes down a little bit, I’ll be able to get out for a small profit. If it goes down a little bit more than a little bit, I’ll buy it. If it goes down a lot, well then we’ll see what happens. But interesting to see a lot …
The Home Pod’s out now. Finally that came out for pre-order. I can’t understand why anybody would spend 350 bucks if you already have an Alexa. I already have three Alexas. I don’t think I’m going to buy a Home Pod. So anyways, February 1st is earnings for Apple. I am most definitely going to trade it.
The second stock to watch, and this is one that … I meant to talk about it a little bit earlier. Folks, if you’ve been listening to me talk about this for a while, you would kind of be in tune to this. Twitter, I’ve been in it for a while. Big move today, and the reason that it went up today … She’s answering me by the name that I just said. She’s answering me, because she heard me talk, say her name, The Home Assistant.
Big move today in Twitter, based on a short seller, who’s had in the past been short on Twitter, came out today and said, “I am not short on Twitter, I am long on Twitter because I think they’re going to be acquired.” So, I like Twitter. I’m still playing that same song. I still think it could go. We have the horned owl pattern going on here. I’m kidding. I just made that up. It does kind of look like a horned owl, though, right? You got two little ears, is that the [inaudible 00:58:50]? I just made it up, I’m kidding. Twitter is my second stock to watch.
The other one is … There’s still some value that’s out there when you look at companies. One of the few companies that I think is still under-priced … There’s another one that I’m not going to mention, because I’m going to save it for you guys tomorrow. So if you guys are coming to the trade, there’s a company I’m really excited about, one I never talk about, I’m only going to save it for you. I’ll talk about it tomorrow and we’ll be setting up a trade on it, so come. It’s a big secret! I won’t tell you what it is unless you’re there.
GM is another one, though. There’s another one I’m not talking about. GM, General Motors, Golf, Michael. I still think the company’s worth, I think they’re worth something around $60, 60 plus. I think, fundamentally, a great company, lots of room to grow. I really only became a fan a few months ago because of the fundamentals. So those are my three stocks to watch. I’ll turn it over to you.
Greg Jensen: All right, first one to look at’s one that … ETF that I was looking at a couple weeks ago. The trend is still going. That is Golf, Lima, Delta. Gold is still trending higher right now. Again, it’s primarily a dollar story. They are at an interesting level here, in the 128 range. You can see that was the former high back in September, before. It then took a big dip again. So you might see a little bit of a battle going on. I just think you’re going to see a little bit of profit taking. Let the RSI reset. Exactly what I wish the S&P would do right now. But I think the upward trend in gold is going to continue. So that’s the first one I’m looking at this week.
The next one I’m looking at, I’ll actually be looking at this company very, very close next week. That is Delta, India, Sierra. Not from the standpoint of I’m looking at the stock. I’m actually going to help contribute to their earnings next week. The fam and I are making the trip to Anaheim, actually tomorrow. We’re getting on the road. My kids love to do road trips, so we’re going to get on the road. We’re going to drive our 10 hour drive down to Anaheim. We bought a bunch of new movies to throw in the car while we’re driving. We’re going to have a fun drive through Southern Utah and Nevada. We’re going to go spend some money at Disneyland this week.
I do actually like where their stock’s at. They’ve got earnings in a couple weeks. They’ve had a hard time getting through this 113, 114 level. As you can see, that goes clear back to May. It’ll be interesting to see if some of the changes they’ve made, the pay roll changes they’ve made at ESPN, some of the cord-cutting, some of the things that they talked about with their last earnings report that Bob Iger talked about that got the company excited again, got the stock moving again back to the upside. We’ll see how many they’ve been able to implement, kind of some of their game plan, but quite honestly this is a stock that I still just believe … A company that just prints money, with all of the different product lines they have. So, I like Disney right here. I think there’s a chance for them to finally break above this 114 level, but that’s a key level I’m looking at.
Last one is an earnings play this coming week. I’m sure it’s on most of your lists as well. Apple’s not the only one announcing this week, Eric. You talked about Apple. It’s the company that’s just a little bit smaller than Apple, market cap wise. There’s not many companies bigger than Faceplant, Bravo, as Jeff would call it. Facebook has earnings this week and they’ve had a nice … Excuse me, next week on the first, I believe, is their earnings event.
If their earnings go anything like some of the other fang stocks that have announced so far, expect this stock to be in the low 220s sometime two weeks from now. I don’t know, I can’t guarantee that it’s going to do that. This one has a much bigger market cap than Netflix does already. So it’s not as if it’s going to be the first time. You know, Netflix just went over 100 billion market cap. The market cap on Facebook is significantly higher than that already. But again, it’s in the fang space, and they still dominate their place.
The only reason it had its pullback a couple weeks ago, remember, was all an assumption, based off of some comments that Mark Zuckerberg made that said, “Hey, we’re going to rearrange our Newsfeed, and make not as many advertisements. We’re going to try to make it more people-centric.” Of course, the market immediately sold it off, and stock went from 190 to 175 in a few days. It’s right back at 190. Quite honestly, any time you see assumptive moves like that, even when they’re on really heavy volume … We don’t know what that’s going to do to the earnings.
So this earnings report is going to be very interesting, particularly with their commentary of what their forward guidance is in relation to some of the changes they will have made on their Newsfeed. Any time of blip, in my opinion, to the downside, is going to be create a buying opportunity, because fundamentally these guys still are dominating the future of marketing, and the future of advertising, and quite honestly, potentially the future of entertainment, for that matter.
So are they expensive? Yes. They traded at 37 price to earnings ratio. Could they get even higher? Yeah, I think they could. I think you’re going to see a big number from them next week. Like I said, it would not be out of my realm to see the stock trading at 220 in a couple weeks. Don’t go make a trade on it, don’t go bet on it. Build your trade, build your exit point, build your both primary and secondary, and make it on a rational decision.
Okay, those are the ones I’m looking at. I also heard Dell’s considering going IPO again. I don’t know if you saw the announcement. They’re buying VMware right now, and considering IPO’ing again. We’ll see.
Eric Hale: Well, they bought EMC. That didn’t go so well. Then VMware spun off of EMC, and everybody needs new laptops. Desktop computers, that’s definitely the market people … I fully recommend. Good luck with that.
Greg Jensen: Might be a good short opportunity. We’ll see.
Eric Hale: I’m sure they have a good idea, but … Go on.
Greg Jensen: Any final thoughts before we wrap it up for the week? Karen, I’ll start with you.
Karen Smith: Everybody have a great weekend! Greg, travel safely with the Jensen family. Greg, one question that keeps coming up over here in the chat is about your uncle, and that sort of uncle indicator that you talk about in the marketplace. So have we heard from your uncle recently in terms of where we are in the market?
Greg Jensen: Yep. Uncle Scott’s been talking to me about the market lately. I hate to say it. It may be the indicator. He’s active again.
Karen Smith: There we go. Well everybody, remember primary and secondary exits that’s tradable bullishly, but always know that things can change. Thanks Gentlemen, it was a lot of fun as always!
Greg Jensen: Eric?
Eric Hale: I want to tell everybody to get yourself to … Make a goal to go at least one summit, if not all of them. But take a hard look and plan on getting to San Antonio. Enough time to plan on it, work on the agenda, they just continue to get better and better. It’s going to be a really good one. So I look forward to seeing everybody at The Summit. Check the website for details.
Greg Jensen: Thanks everybody! Have a wonderful weekend and we’ll see you all again, same time, same place next week! Have a great week!