(SPY) Archives

Battle Testing Your Portfolio

The great thing about the sudden $5 pop is the price of oil since Monday is that it battle tests your portfolio. You really don't know what you own and the risks it entails until something like this comes along. I'll explain why.

For a start, you get a very clear idea of which of your assets are of the "RISK ON" variety, and which are of the "RISK OFF" persuasion. This is easier said than done because asset classes often change gender, flipping from "RISK ON" to "RISK OFF" without warning. Knowing which is which is crucial in hedging portfolios and measuring your risk. It is not unusual for a trader to believe he has a safe bet on, only to watch his portfolio completely blow up because the cross asset relationships have changed.

Look at Tuesday's market action. Traditional "RISK ON" assets, like stocks (SPY), got pounded. The traditional flight to safety assets, such as bonds (TLT) and gold, did well. This is where a typical balanced portfolio does well. Oil (USO) is usually a "RISK ON" asset, but not this time. Fears of a supply interruption, no matter how unfounded they may be, sent prices for Texas tea through the roof. On this round, oil clearly fell out of the "RISK ON"/"RISK OFF" model.

Not only do assets show their true colors in conditions like this. They also demonstrate their character. Look at the gold/silver ratio. Historically, silver (SLV) moves twice as fast has gold (GLD), with double the beta. Since the last low, it has doubled gold's move. When the barbarous relic gained 17% from the recent $1,175 low, silver roared some 36%. Thus the relationships have been maintained.

How did my own model trading portfolio do? I took it on the nose with my oil short, moving from a profit to a loss. But my short positions in the yen and the euro did well, nearly offsetting those losses. So overall, my 35% year to date performance has been protected, and the volatility kept down. This is whyy I always try to run a book of counterbalancing "RISK ON" and "RISK OFF" positions, or stay very small. You should do the same.

Oil Has Suddenly Become Hot

The Technical/Fundamental Tug of War: Who Will Win?

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For the last few weeks, I have had two groups of analysts screaming in my ears.

Fundamental researchers are asserting that at $105 per share in earnings, generating a price earnings multiple of 15, stocks are at the historic middle of a 10-22 range. Q2 earnings are over, and modestly outperformed on the upside, although not with the magnitude seen in recent quarters. Plus, the taper is on the table, and the Federal Reserve may deliver a surprise at its upcoming September meeting.

Furthermore, risk assets are about to enter a period of seasonal strength. If you ?sell in May and go away?, you should then ?return in September and buy, fill your boots.?

No, no, cry the technicians. Although the small caps (IWM) have been going gangbusters, the large cam Dow and S&P 500 indexes have failed to put in new highs, raising the risk of a failed double top.

What is a befuddled individual investor to make of all this? My belief is that fundamentals always win out over the long term, and that technical cues are at best, a lagging indicator. I use charts for guidelines on where to place orders on a short term basis. The longer you stretch out your time frame, the less relevant they become.

At best, technicals are right 50% of the time, right in the same league as a coin toss, and most of the brokers and investment advisors out there. How many technical analysis hedge funds are out there? None. They are all fundamentally driven. The same technicians making the incredibly bearish prognostications today were making equally convincing bearish arguments last November.

However, since we are descended from prehistoric hunter-gatherers, we are all visually oriented. We respond to stimuli we can see much more rapidly than those we can conceive. A picture truly is worth 1,000 words, and probably a lot more. That?s why so many brokerage firms use them to sell research. I employ charts to back up my fundamental arguments because they are so easy to understand, definitely not the other way around.

So I think the fundamentals will eventually win out, and that we will get the autumn rally that I have been predicting. In fact, we may be only four years into a seven year bull market that is in the process of boosting price earnings multiples from 10 to 18 or 19. The mountain of cash sitting on the sidelines, and the failure of the major indexes to pull back more than 7.5% this year are telling you as much.

Exactly when will the big move up happen? Don?t ask me. Go ask a technician.

Great Technician, Lousy Fundamantalist

More of the Same from Uncle Ben

Diary, Newsletter

Ben Bernanke delivered exactly what I expected today, continuing his massively simulative monetary policy as is. The taper went missing in action, and search parties have been already sent out by the bears.

In the past this move would have triggered a massive move up in risk assets, and a collapse of the bond market, but not this time. Bernanke's news is not exactly new, and leaving things unchanged doesn't exactly prompt frenetic bouts of volatility. We are also in the summer doldrums, with much of the market liquidity now competing in company golf tournaments, gorging at clambakes, or topping up tans at the beach.

What this sets up is a rather dreary season of trading inside narrow ranges. The S&P 500 (SPY) will bounce along like a ping pong ball between 1,580 and $1,680, the ten year Treasury bond (TLT), (TBT) within 1.90%-2.40%, the yen (FXY), (YCS) inside ?98-?104, and gold (GLD) trapped inside $1,250-$1,480.

You can trade outside of these ranges with alternating call and put spreads and take in some modest returns. Or you can conclude that the risk/reward is mediocre at best, and join you friends on vacation. You don't fool me. When I send out my newsletter these days, those "Out of Office" messages are breaking out like sunburns at Coney Island, Navy Pier, and the Santa Cruz Boardwalk.

I think the markets are reserving their real fireworks for us in the coming fall. If the Federal Reserve's economic forecast is correct, we are headed towards a 2015 GDP growth rate of 2.9%-3.6%, an unemployment rate of 5.2%, and an inflation rate on only 1.6%-2.0%. That is a best case, "golden age" type scenario for the financial markets which leaves the Great Recession well in the dust of the rear view mirror.

The "Big Tell" here is the Fed's inflationary expectations rate. They are close to nil. The august government agency thinks that even a return to the long term average US economic growth rate above 3% won't ignite a wildfire of price hikes. That greenlights a continued pedal to the metal on monetary stimulus, and highlights the unemployment rate as the top priority.

These predictions would give us the launching pad for risk assets to commence a nice yearend rally. That would take the S&P 500 to $1,750, bond yield to $2.50%, the yen to ?110, and gold down to $1,100, much to the chagrin of gold bugs everywhere.

What was the biggest move today? My short position in the Japanese yen, which plunged a full 2% as Bernanke spoke. Sometimes fairy tales come true after all.

Where?s This Market Bottom?

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After yesterday?s 217 point swoon, the S&P 500 (SPX) has fallen 4.3% from its late May peak. It looks like the ?Sell in May? crowd is having the last laugh after all, of which I was one.

Is this a modest 5% correction in a continuing bull market? Or is it the beginning of a Harry Dent style crash to (SPX) 300 (click here for the interview on Hedge Fund Radio)? Let?s go to the videotape.

This was one of the most overbought stock markets in my career. I have to think back to the top of the dotcom boom in 2000 and the pinnacle of the Tokyo bubble in 1989 to recall similar levels of ebullience. In fact, two weeks ago we were at a real risk of a major melt up if we didn?t encounter some sort of pullback. So the modest selling we have seen so far has been welcome, even by the bulls.

There is still a reasonable chance the final decline will be nothing more than a pit stop on the way to new highs. Institutional weightings in equities are at a lowly 31%, compared to 50% 20 years ago. It seems that everyone in the world is overweight bonds (see yesterday?s piece on ?Welcome to the Sack of Rome?).

In recent weeks, the S&P 500 yield ratio has fallen behind that of the 10 year Treasury bond, at 2.10%, but only just. With a price/earnings multiple of 16, we are bang in the middle of a long time historic range of 10-22. Zero overnight interest rates argue that we should be at the top end of that range. The argument that the ?Buy the Dip? crowd is still lurking under the market is real, just a little further than the recent dips allowed.

So how much lower do we have to go? After the close, I enjoyed an in depth discussion with my old friend, Jim Parker, of Mad Day Trader fame about the possible permutations. The following is an itinerary of what your summer trading might look like, expressed in (SPX) terms:

6.2% - 1,605 was the Wednesday low, the 50 day moving average, and the downside of the most recent upward sloping channel on the chart below. This trifecta of support is many traders? first stop for a bounce.

5.4% - 1,590 is the first major downside Fibonacci level. We could see this as soon as the May nonfarm report payroll is announced on Friday.

6.0% - 1,580 is the old 13-year high. Markets always love to retrace to old breakout levels.

6.5% - 1,570 represents a give back of one third of the November-May 330 point rally.

8.3% - 1,540 is the double bottom off the April low.

11.1% - 1,493 is the 200-day moving average. This is the worst-case scenario. I doubt we?ll get there, unless the fundamentals change, which they always do.

Jim gave me a couple more cogent insights. The average big swing move is 100-110 points. The last 100-point move sprung off of the March nonfarm payroll report, which came out on April 5. Big swings also often start and finish around an options expiration, the next one of those is coming on June 21. So for the short term, 1580-1590 is looking good.

To confuse you even further, contemplate the concept that I refer to as the ?Lead Contract.? There is always a lead contract around, one on which all traders maintain a laser like focus, which leads every other financial product out there. It says ?Jump,? and we ask ?How High?? It is also always changing.

Right now, the Nikkei average (DXJ) is the lead contract. The Japanese yen ETF (FXY) is the close inverse. Every flight from risk during the past two weeks has been preceded by a falling Nikkei and a rising yen.
If you want to get a preview of each day?s US trading, stay up the night before and watch the action in Tokyo, as I often do.

You might even learn a word or two of Japanese, which will come in handy when ordering in the better New York sushi shops.

Looking for More Market Insights

Five Stocks to Buy for the Second Half

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Take a look at the chart below for the S&P 500, and it is clear that we are at the top, of a top, of a top. How much new stock do you want to buy here? Not much. Virtually every technical trading service I follow, including my own, is now flashing distressed warning signals. Maybe we really were supposed to ?Sell in May and go away.?

All RSI?s are through the roof. We have not had a pullback of more than 3.2% in six months, the longest in history. It has been up 19 Tuesdays in a row. Some 67% of this year?s gains have been on Tuesdays, and 83% since the 2012 low. So buying Monday afternoon and selling Tuesday afternoon is the new winning investment strategy. It?s a day trader?s paradise. The market is clearly cruising for a bruising here.

A 5%-10% correction seems imminent. After that, we will probably power on to a new high by the end of the year. The Vampire Squid, Goldman Sachs, posted a 1,750 target for (SPY). Why not? Their number seems as good as any. Who knew that the top market strategist for the year would be perma-bull Wharton business school professor, Jeremy Siegel?

The smart money is sitting on its hands here, maintaining discipline, and waiting for better opportunities. It is also pounding away at the research, building lists of stocks to pounce on during the second half. It is still early, but here is my short list of things to watch from the summer onward.

Apple (AAPL) ? Rotation into laggards will become the dominant theme for those playing catch up, and the biggest one out there is Apple. Buy the dips now for a 25% move up into yearend. An onslaught of new products and services will hit in the fall, and the company is still making $60 million an hour in net profits. Look for the iPhone 5s, Apple TV, and new generations of the iMac, iPad, and iPods. It will also make its China play, inking a deal with China Telecom (CHA). The world?s second largest company is not going to trade at half the market multiple for much longer, especially while that multiple is expanding. Technology is the last bargain left in the market. QUALCOMM (QCOM) might be a second choice here.

MSCI Spain Index Fund ETF (EWP) ? Look for the European economy to bottom out this summer and recover in the fall. In the end, the Germans will pay up to keep the European community together. The reach for yield and the global liquidity surge will drive interest rates on sovereign debt down as well, accelerating the move up. Also, the more expensive the US gets, the more you can expect other parts of the world to play catch up. Spain is the leveraged play here.

iShares FTSE 25 Index Fund ETF (FXI) ? Now that the new Chinese leadership has their feet under the desk, look for them to stimulate the economy. China will play catch up with the US, which should start topping out by yearend. It is also an indirect play on the reviving Japanese economy, the Middle Kingdom?s largest foreign investor. Japan has gotten too expensive to buy, so consider this a second derivative play.

Proshares Ultra Short 20+ Year Treasury ETF (TBT) ? The Treasury market bubble is history, and it is just a matter of time before we break down from these elevated prices. Look for the ten-year bond to probe the high end of the yield range at 2.50%. I don?t expect Treasuries to crash from here, but you might be able to squeeze another 25% from the (TBT) in the meantime.

Citicorp (C) ? Look, the financials are going to run all year. Use the summer dip to get back into this name, the most undervalued of the major banks, and a hedge fund favorite. A multidecade steepening of the yield curve is a huge plus for the industry. Now that real estate prices are rising, some of those dud loans on their books may actually be worth something.

Ben?s New Leg for the Bull Market

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I just returned from my round of monthly wine club pick-ups in California?s lush and fertile Napa Valley. I invested a half hour soaking up the breathtaking views at the hilltop Silverado winery. Duckhorn offered a lavish lunch event, which I ducked out on. The Wagner family is prospering as always, recently opening a tasting room for their spectacular Caymus private label. The trunk of my electric Tesla S-1 is brimming over with fine cabernet, merlot, pinot noir, and the odd zinfandel.

Driving through rolling hills of ripening grapevines also gave me time to digest and contemplate the implications of the dramatic events of last Friday. The Department of Labor announced a bombshell of an April nonfarm payroll, showing 165,000 in job gains in the face of dire expectations, taking the headline unemployment rate down to 7.5%, a four year low.

Far more important were the dope slapping revisions of prior months. February was taken up from a healthy 268,000 to an eye popping 332,000. As if by magic, March was boosted from a feeble 88,000 to a more robust 138,000.

I made a nice killing with my long positions in Apple (AAPL) and the S&P 500 (SPY). But I also suffered painful stop outs in my short positions in the Russell 2000 (IWM), which only had two weeks to run to expiration, sending my performance for the month down in flames. Such is the risk of betting on this notoriously volatile and always revised data point. If you play with fire, you get burned.

There were 50 data points warning that the April nonfarm payroll was going to be a disaster, the details of which you can find in my most recently posted Global Strategy Webinar. They all painted a picture of an undeniably weakening economy, paving the way for a nice ?Sell in May? and a following summer correction right on schedule.

That?s why, to a man, every hedge fund trader went into the Friday release net short. So when the announcement came, the short covering was fast and furious. And it occurred across all asset classes simultaneously. Stocks of every description and commodities (CU) soared, while the Japanese yen (FXY) (YCS) and the Treasury bond market (TLT) cratered. Only the precious metals of gold (GLD) and silver (SLV) remained moribund, still working off a long hangover.

It turns out that I was not the only one who noticed the soggy economic data. It also caught the attention of Fed governor, Ben Bernanke, ECB president, Mario Draghi, and BOJ governor, Haruhiko Kuroda, who together launched a trifecta of coordinated rescue measures designed to provide emergency life support for the flagging recovery.

In the Fed minutes released on Wednesday, Uncle Ben suggested that he might actually increase monetary easing. The European Central Bank, in a better late than never move, finally cut Euro interest rates by 25 basis points. An indiscreet minister also hinted that negative Euro interest rates might be in the cards. Of course, burning all the shorts was part and parcel of this program.

So we now have to ask, what happens next? Welcome to an S&P 500 earnings multiple of 16, a figure not seen for six years! With zero interest rates, global monetary easing still expanding, and the rest of the world tripping over each other to buy American stocks, higher multiples are in the cards. Stocks that seem richly priced to us here seem unbelievably cheap to every one else.

How high is high? One old trader?s rule of thumb says that every multiple year breakout is worth at least 10%. That takes the (SPY) up to 1,760, and the Dow average to 16,500, possibly by year end. Instead of the major 5%-10% corrections investors have been expecting all year, we may continue to get sideways time corrections before each leg up.

There also seems to be another factor at work here. Every time I take a run at a 40% return, I get thrown back. It has already happened twice this year. It?s as if 40% is an unnatural act requiring incantations in strange tongues to surpass. Black swans come out of nowhere, as do the shocks and surprises. You can do all the work in the world in these conditions, and it often ends of being for free.

That?s why in past years, when I was running my big hedge fund, I would quit for the year whenever I approached the 40% level. I then sent a letter to my investors saying I?m not working anymore until I got paid my performance bonus off of the lofty numbers. I then proceeded to take extended vacations, sending my investors postcards from exotic locales.

They all loved it.

Bring Me That 40%

The Hard Numbers Behind Selling in May

Diary, Newsletter

If I had a nickel for every time that I heard the term ?Sell in May and go away? this year, I could retire. Oops, I already am retired! In any case, I thought that I would dig out the hard numbers and see how true this old trading adage is.

It turns out that it is far more powerful than I imagined. According to the data in the Stock Trader?s Almanac, $10,000 invested at the beginning of May and sold at the end of October every year since 1950 would be showing a loss today. Amazingly, $10,000 invested on every November 1 and sold at the end of April would today be worth $702,000, giving you a compound annual return of 7.10%.

My friends at the research house, Dorsey, Wright & Associates, (click here for their site at http://www.dorseywright.com/) have parsed the data even further. Since 2000, the Dow has managed a feeble return of only 4%, while the long winter/short summer strategy generated a stunning 64%.

Of the 62 years under study, the market was down in 25 May-October periods, but negative in only 13 of the November-April periods, and down only three times in the last 20 years! There have been just three times when the "good 6 months" have lost more than 10% (1969, 1973 and 2008), but with the "bad six month" time period there have been 11 losing efforts of 10% or more.

Being a long time student of the American, and indeed, the global economy, I have long had a theory behind the regularity of this cycle. It?s enough to base a pagan religion around, like the once practicing Druids at Stonehenge.
Up until the 1920?s, we had an overwhelmingly agricultural economy. Farmers were always at maximum financial distress in the fall, when their outlays for seed, fertilizer, and labor were the greatest, but they had yet to earn any income from the sale of their crops. So they had to borrow all at once, placing a large cash call on the financial system as a whole. This is why we have seen so many stock market crashes in October. Once the system swallows this lump, it?s nothing but green lights for six months.
After the cycle was set and easily identifiable by low-end computer algorithms, the trend became a self-fulfilling prophecy. Yes, it may be disturbing to learn that we ardent stock market practitioners might in fact be the high priests of a strange set of beliefs. But hey, some people will do anything to outperform the market.

It is important to remember that this cyclicality is not 100%, and you know the one time you bet the ranch, it won?t work. But you really have to wonder what investors are expecting when they buy stocks at these elevated levels, over $159 in the S&P 500.

Will company earnings multiples further expand from 15.5 to 17 or 18? Will the GDP suddenly reaccelerate from a 2% rate to the 4% expected by share prices when the daily data flow is pointing the opposite direction?

I can?t wait to see how this one plays out.

Thank Goodness I Sold in May

?Sell in May? Has Started

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You don?t have to wait until May for the next correction in the stock market, which is only four trading days away. Take a look at the charts below prepared by my good friends, Arthur Hill and John Murphy at Stockcharts.com, and you?ll see it has already started. In fact, it might be almost over.

Only 42% of stocks listed on the New York Stock Exchange are now above their 50-day moving averages, down from the 90% peak at the end of January. That suggests we are already well into bear market territory. The downturn has been lead by materials, technology, energy, and industrials.

Look at the charts for the S&P 500 (SPY) and the Dow. We are clearly on target to match the previous all time highs in the next few days, possibly during the month end liquidity surge. That?s where potential double tops come into play. If I am right, then we could be in for a 5%-10% pullback. If I am wrong, then we are in for a flat line for a month before we resume the upward path.

So I am modifying my trading strategy that has been wildly successful for the past six months, delivering to you a 45% performance gain off the bottom. To use all of my favorite sailing metaphors, I?ll be battening down the hatches, clearing the decks, reefing the sheets, and preparing for a squall.

Here are the following course adjustments I recommend for a tougher market:

1) Cut your book in half and maintain a 50% cash position to take advantage of the unanticipated opportunities that will almost certainly come. You can?t buy bottoms if you lost all of your money on the downslide.

2) Shorten your maturities. Instead of betting the ranch by going out two or three months, limit option positions to the front month. There is no crueler existence than managing a long dated option position that is going against you.

3) Pigs get fed, but hogs get slaughtered. Instead of running positions into expiration, go for quicker, smaller profits. Instead of keeping the entire profit, settle for half or two thirds. Market volatility is so low that it is not worth hanging on for the final two weeks just to capture the last few basis points. This shortens the time that surprises or black swans can happen. Use time as capital. As I have so magnificently shown this year, you get a much higher score hitting 40 singles than a couple of home runs (hint for foreigners: our baseball season has just started).

4) Get yourself some short exposure for the inevitable shakeout. I recommend put spreads in the Russell 2000 (IWM), which always falls the fastest in down markets. But go at least 5% in-the-money to give yourself a safety margin income in case this thing keeps clawing its way up.

5) Avoid positions that have worked well for the past half-year, because this is where traders will rush to take profits and ?de-risk? their books first. This includes long positions in consumer staples, pharmaceuticals, utilities, and transportation, and short positions in commodities (CU), oil (USO), and precious metals (GLD) (SLV).

6) Get out of your bond shorts. It?s amazing to me that ten-year yields (TLT) have fallen to a parsimonious 1.70%, while stocks have rallied. But then, it has been an amazing life. This is rare in the rich tapestry of financial markets and usually presages trouble. It can only mean that the smart money is positioning itself cautiously in anticipation of a dump in stocks. If that is the case, the May correction could take ten year yields down to 1.50%, and bond prices though the roof. Use the month end ?RISK ON? surge to take profits on the (TBT).

There is an alternative explanation for all of this. The correction is already done and we are about to launch into a new bull leg. The selloff has been masked by a rotation within the broader indexes. Take another look at the chart of stocks above their 50-day moving averages. We have spent three months falling from 90% to 42%. Historically, it bottoms at 20%. The last time this happened was at the end of November and early June. Remember what happened after that?

If that is the case, we are already two thirds of the way through the spring correction, and on the eve of another 5%-10% leg up in stocks and other risk assets. It is what investors are least expecting; therefore, it cannot be ruled out. As my in-house strategist, Sherlock Holmes, used to say, ?Eliminate the obvious, and consider all other possibilities.?

Meet My New Strategist

Bidding for the Stars

Diary, Newsletter

A few years ago, I went to a charity fundraiser at San Francisco?s priciest jewelry store, Shreve & Co. The well-heeled masters of the universe bid for dates with the local high society beauties, dripping in diamonds and Channel No. 5. Well fueled with champagne, I jumped into a spirited bidding war over one of the Bay Area?s premier hotties, whom shall remain nameless. Suffice to say, she has a sports stadium named after her.

The bids soared to $12,000, $13,000, $14,000. After all, it was for a good cause, Pari Livermore?s California State Parks Foundation. But when it hit $12,400, I suddenly developed lockjaw. Later, the sheepish winner with a severe case of buyer?s remorse came to me and offered his date back to me for $14,000.? I said ?no thanks.? $13,000, $12,000, $11,000? I passed.

The current altitude of the stock market reminds me of that evening. If you rode gold (GLD) from $800 to $1,920, oil, from $35 to $149, and the (DIG) from $20 to $60, why sweat trying to eke out a few more basis points, especially when the risk/reward ratio sucks so badly, as it does now?

I realize that many of you are not hedge fund managers, and that running a prop desk, mutual fund, 401k, pension fund, or day trading account has its own demands. But let me quote what my favorite Chinese general, Deng Xiaoping, once told me: ?There is a time to fish, and a time to hang your nets out to dry.? That?s why my cash position has steadily been rising over the last few weeks.

At least then I?ll have plenty of dry powder for when the window of opportunity reopens for business. So while I?m mending my nets, I?ll be building new lists of trades for you to strap on when the sun, moon, and stars align once again.

As for that date? She eventually married one of California premier technology titans, an established billionaire in his own right, and now has two cute kids. It?s all part of life?s rich mosaic. And sorry, I?m not saying who because gentlemen don?t talk.

Buy Every Black Swan

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At least that?s what Ben Bernanke thinks. He said as much in his press conference yesterday in the wake of the latest Fed statement. He might as well have waved a red Flag at a bull.

The central bank took the opportunity to downgrade its US growth forecasts going forward as a result of sequestration imposed government spending cuts. What is impressive is how minimal the impact will be, each year only pared back 0.1%. Armageddon, not! Here are the new GDP numbers:

2013? +2.55%
2014? +3.15%
2015? +3.30%

These are at the high end of most private sector predictions. Does Uncle Ben know something that he is not telling us? If the Fed is anywhere close to being right on these predictions, it justifies the meteoric rise in share prices we have seen so far this year. It also suggests we have more upside to go.

Let me throw out a theory here. Ben Bernanke is so fearful of repeating the Federal Reserve mistakes of 1938 that he is going to ere on the side of caution on the monetary easing front. That is when the government tightened too soon, triggering the second leg of the Great Depression and another 50% fall in the Dow average. He certainly is getting a free pass on the inflation front. When is the last time you heard of a worker getting a pay increase?

All of this paints an outlook for stocks that is pretty bullish. We could well continue on up for the rest of 2013, save for a 5%-10% correction in the summer. In the meantime, I added more longs to my model-trading portfolio this morning, using the Oracle (ORCL) inspired dip to tack on positions in United Continental Holdings (UAL) and Apple (AAPL).

By the way Ben, how much is a gallon of milk at the supermarket? Watch this space.