Iran War Widens

7/31/2026 The War Spreads Later versions of the Hydra story add a regeneration feature to the monster: for every head chopped off, the Hydra would regrow two heads. Lernaean Hydra or Hydra of Lerna Nolan’s Odyssey is the current movie hit so why not a Greek Mythology reference? The Hydra would re-grow two heads when one head was removed, and that is just what is happening in the Iran ‘conflict’ aka Epic Fury. Iran is attacking Kuwait with hundreds of missiles and drones. No wonder, the US is using it as a base for soldiers and weapons used in the conflict. Egypt confirms the port of Damietta on the Mediterranean was hit by a drone strike July 2. Two LNG tankers were struck. Dubai, home to 3.6 million, has been hit by Iranian missiles. Yes the LTHAAD and Patriot defense system caught them but the resulting debris still fell in the area. Iran’s message is to urge these countries to lobby the US to cease operations. As outlined here last week, the price of oil reached $120 and then fell back to $78. It is correcting sideways. Share of energy and service companies are now trading above that downtrend line from $120. Our floor of $78 was tested and held this last week. Today Friday, WTIC has traded from $81.06 to $86.45, now at $84.26 as I write. How to play this as investors? I don’t think big money will be made buying Exxon Mobil XOM at $154 or Chevron CVX at $195. Energy service stocks are a derivative of bullish energy activity. Those offer a potential better return. Examples include Patterson PTEN, Transocean RIG, and Halliburton HAL. Patterson is trading around book value. Its net income is moving to positive and rigs are utilized. It advanced 4.77% just today. Transocean is trading at 67% of book value. It is the largest offshore driller in the world. It pulled back from $7.50 to $5.00. Like so many energy plays it is trading sideways in a correction. Schlumberger jumped on better earnings, but HAL is still orphaned at $31.95. Buying on dips is advisable. Digital plays are only for the daring now. Microsoft just jumped from $395 to $465 in two days setting a record for billions gained in that time frame. Glad you bought it. Amazon AMZN dropped from $270 to $230 and today rebounded to $270, go figure. Fast trading algorithm trading gives results like this, not a game for the individual investor. The ten-year Treasury note yielded 4.16% in January. It jumped today to 4.73%. This has picked up the advance in rates from the 39-year low of .5% in March, 2020. When asked by Maria Bartiromo about that, Kevin Hassett, Director of WH National Economic Council, replied that Artificial Intelligence would tamp down rates. That was surely the worst quote of the week. I am long TBF, higher rates ahead, and other energy service plays.

Energy Update

7/30/2026 As I say, summer never fails to entertain. After a 1,000 point drop in Indu, it rebounded 613 today. but really still below the recent highs of July 7. NDX and SOX bounced today, expected, still in a downtrend. Crude oil is holding around $84 for WTIC. Patterson PTEN had a nice jump today on improved results in their 8K. I am watching Halliburton HAL. At $120 oil it as $43, today 31.64, this is ridiculous when oil is $84, one of the premier energy service stocks trading this low. SLB had an 11% jump last week but it has corrected back to where it was around $48. The positive results for PTEN should bode well for other energy service providers, hence the interest in HAL. RIG at 45.08 is in the same category selling below book value, my energy service page of stocks is ligting green. Trump is the classic example of a guy how makes money, well I guess he has in real estate, and thinks that success translates to every other field. Hence after snatching Maduro, he thinks he can re make one of the oldest civilizations on the planet to his liking, not going to happen. My bet is that Iran will coninue to bargain their way to higher oil prices, That Trump is publicly cursing, not Presidential DJT, shows Iran is winning the mental and physical game of higher oil prices. Newspaper article tomorrow.

Movie Producer Jason Cloth Indicted for Fraud

7/30/2026

Hmm, Was that A Bear I Saw Today?

Wednesday 7/29/2026 The INDU declined 1m153 points or 2.19% today. The INDU has been holding up as investors, read gamblers, shifted from the now out of favor SOX NDX and Mag 7 stocks to the more run of th emill INDU 30 which does not contain the condentration of tech stocks. the June 10 low was 49,920, call it 50,000. We need to see previous lows like that taken out to have more assurance the top is FINALLY in. Stock indexes ralled late in the day and then on FED no cut news fell to lows of the day. SOX semi-conductors has fallen out of its sort of head and shoulders pattern. Ditto for the Mag 7 stocks. IF NDX contines to respect its June 7 high, we will have moe confirmation of a top in stocks. Okay I am edging back to the bear camp for stock market in general. Recall we have HDGE for INDE, SH for SPX, PSQ for NDX and RWM for Russell 2000. Back in 2009 the NDX was actually under 2,500, today it closed at 27,192, the potential for loss is as large as dot.com 2002 or sub-prime March 2009. the 200 month moving average for the INDU is 25,1841, or about 50%, a fibonacci number, of where the INDU is today. As we have not been to the 200 month MA since 2009, this seems a reasonable eventual target. Why you ask? Margin debt is 50% higher than in 2000, height of the dot.com mania. All those leveraged trades will be unwound. Margin debt in brokerage accounts is 6.5x to cash, there will be a scramble out of that borrowed money. Far more margin exists in leveraged ETFs including so called income funds like municipal bonds and REITs, sold as safe investments. And there are all sorts of leveraged funds like the latest on Spacex, and various indexes. Actor William DeVane is a spokesperson on TV for a metals firm. As he puts it, there have only been two times when the Federal Budget was more than the GDP< WW II and now. Worse those borrowing costs are rising. I have noted that the ten year note was 3.95% February 28 when teh fighting started, now it is 4.6%. The FED left rates unchanged but the bond market has not, see previous sentence. right on cue, Iran refused whatever deal has been floated and oil jumped $5, right at the $78 WTIC level. Again higher interest rates and higher eergy prices were features of the 1973-74 melt down. Still working to get chart display back, patience. I hope you are finding this information of value dennis.elam@att.net

First Brands BK Analysis

7/27/2026 https://outlook.cloud.microsoft/mail/inbox/id/AAQkAGE5ZDc1MzhhLTU5OWQtNDE3Ni1iMjhjLTY3ZjJhNGNiMzRhNQAQALf9dtG7T0VDnuSOhzPTjdU%3D

Stock Rally Relaxes as does Oil

7/27/2026 I watched the Big Short, movie, on Aamazon Prime this weekend. It is the story of how Michael Burry identified weak mortgages, his group created CDOs Collateralized Debt Obligations to short mortgages. I am amazed something this financially complex made it to the Big Screen but it did, worth a watch. Now comes Dr. Burry's, he is a MD of all things, positions today. Comments (126) "The Big Short" investor Michael Burry disclosed a round of portfolio changes on Substack on Friday, deepening several short bets while expanding select long holdings. Michael Burry added to his bearish bets on Micron (MU), Nvidia (NVDA), and other semiconductor names. Burry said in a Substack post that he "sold short" more shares of Micron Technology (MU) at $933.86 and added to his Nvidia (NVDA) short at $210.28, Stocktwits reported. The 'Big Short' investor also increased his exposure to Flutter (FLUT) and DraftKings (DKNG). His existing bearish positions in Tesla (TSLA) and Palantir (PLTR) remain in place. Burry said he has not covered his short position in Tesla (TSLA), adding that it "gets smaller all on its own." Additionally, Burry also "sold short more" Caterpillar (CAT) at $893.49 and added to his short position in the iShares Semiconductor ETF (SOXX) at $535.83. He said the SOXX position, together with his puts, represents a large position. I don't know when he initiated his short in SOXX but that is essentially what is holding up the market. __________________ Stock Indexes NDX SOX jumped sold off and then recovered later today. Oil dropped $7.57 to end the ay thought energy and service were not hurt as badly as I would have thought. The cessation of bombing of Iran by US does mean the US is out of targets and weapons despite, as usual, what Trump says. And the Houthis are still holding htings up on the south side of the Red Sea. Iran took it all and like that old Timex ad, is still ticking. Oil and energy stocks appear to be undergoing consolidation which may well take through August. That's it for Monday.

Energy Stocks Will Now correct a Bit

Energy and energy service have had a great run into Brent $100. Looks like they need to coalesce around their moving averages a at somewhat lower prices. Wall Street is re-thinkingits mad dash in to AI spending see the weekend WSJ. It is always so, the street jumps al over the latest idea, dot.com, sub-orime, and then buyer's remorse. while the OEX index is selling off we need to see closes under the April lows to get excited about a stock market top. As mentioned the bond market has jumped from 3.9% to 4.6% on the ten year T note since Feb 28. I have emphasized the impprtance of the March 2020 39 year low, and rates have soared since then. Eventually this will be the problem for stocks. Federal interest alone is more than the defense budget, is anyone worried? Lead WSJ editorial this weekend decries Trump's tariff obession yet again even finding some 1930 Smoot Hawley legisilation to aid him. That 1930 tariff act prolonged the Depression. It was opposed by economists then as Trum['s tariffs are now. Apparently he does not remember April 2025 Liberation Day and the stock market meltdown. So here we are, summer still, again I am not sure there will be much clarity until after Labor Day.

Stocks Fall, Oil Soars

7/23/2026 The OEX SP 100 declined 1.64% today. Chart import is still not working. All major stocks indexes declined today, energy remains on balance better with crude oil up $4.50 today. While I gave u[ on calling a market top, this is at least a start. NOtably the day, Feb 28, Trump started the Iran attacks, the 10 eyar Treasury note was just under 4%. today it is about 4.65%. the markets are taking notice. I just heard Trump say that Iran has not felt enough pain. We shall see who feels the pain. Persian history dates several thousand years. I doubt a few bombing attacks will topple the country. Again all this looks like 1973-74, high energy prices and increasing interest rates. The wonderful hedge of gold fell $100 and silver $2.50, right along with stocks. Metals do what they want. Wrap up this weekend.

Energy Begins Third Wave

7/22/2026 I don't know what is wrong with the google site blogspot but I hope they get it fixed quickly, meanwhile Front page WSJ today More than a week after resuming strikes against Iran, the US has been unable to quell Iran's ability to strike back. In short there will not be anothe MOU or short term cease fire, the game's afoot as S Holmes would say. I bought back the calls I sold against stocks, some were already at or near the strike price. The time to sell calls will be when we are topping out, a long way off. On the weekly charts the energies are just starting a wave three up, yes buying a year ago would have been better but here we are and we do what we can. The major stock indexes need a sold weekly close under first the April 2026 low and then the much April 202 low. Until then I am assuming summer is just playing with investors as usual. I am bullish energy The 30 year bond is about to take out the 110 previous low. let's add more TBF the bear bond fund Silver looks like it wannts to rally back but this is still not a great trade Let's hope blogspot gets quickluy fixed.

Mid Summer Night's Dream

7/21/2026 Graphic im[prt is still not working. Yes the major indexes rose today. Most do not have 60% in the up volume column The NDX was 50/50 for advance and decline but you won't hear that on cable tv/ I have accumulated APA, VENOM, and COP and written calls due August 21. The stike price for say COP is 120 while I bought at around 114, ditto the others. I was surprised at the high premuim on APA. The markets have completed five waves up by most any time period. But a top and sell-off in July is rare to I don't remember one. Weakenss is tyoically late Sept to Oct, recall 1929, 1987 were in October. The dot.com rally ended in March. The sub prime rally ended in Fall 2007. The WSJ says investors, never gamblers of course. are away from the Mag 7, indeed, and the SOX index obunced today after a 19% decline. Crude oil has jumped another 1.68 to 84.91. Trum[ promises more attacks on Iran so the price is liable to keep going. I notice all the energy stocks are up against a down trend line coming from the high of $120 oil and their highs at this time. We shall see if the shares break through that downtrend, I expect they will. Silver bounced to $59. I remain optimisic and bullish on oil. Fall remains a question for markets.

Stocks Not Holding the Open Bump

Monday 7/20, 2026 blogspot is not posting the charts sso comments only. One can make the case that major indexes like the INDU today, openned up and then could not hold closing down. Yes that could be a final high or just another summer fake out before an August end rally into Labor Day, still indexes closed down. The Mag 7 ETF did as well. Today's WSJ assures investors are looking elsewhere for bargains, the Mag 7 are old hat. Whatever that index is headed down. Apple has been on a tear from 275 to 320 but it too seems to have stalled today. our buy write with COP is working well. COP closed up a buck to 115.68 and the call increased as well but that means nothing to us. Looks like this might get called away by Aug 21. XOM is more expensive than CO{ 145 vs 115 but the option premium is the same. I added VENOM today. Silver still looks headed to the low 50s. Bonds are not rallying in price butthat is about it. Saber rattling continues in Mid East. I was just watching Larry Kudlow interview Jack Keane on Fox business. Larry was of couerse all for bombing to 'knock Iran out.' Recall that in 413 BC Persian intervened on the part of Spart in the Pelopensian War to allow Sparta to defeat Athens. https://en.wikipedia.org/wiki/Peloponnesian_War Persia now Iran has been around a lot longer than the US and I suspect will be there a century from now. All this is keeping the oil price firm. Perhaps blogspot will be back to normal tomorrow.

Buy Write Example

Friday purchased 400 cop fr 45,588 sold 4 Aug 21 120 calls for 915.33 Assume one could do that ten times a year then the optioin income is 10x or $9,1530.30 What is that return? 9,153. / 45,588 = 20% Yes that is right and yes assuming the stars align so one could do that every month, maybe a stretch, but there it is. Three things can happen. COP stays at 114, the call expires, we an write another call, and if a dividend is paid before that it is out. COP drops. I do not expect that given the new war footing in Hormuz but if so, we kep the call premium of 915.33 COP closes over 120 before Aug 21. In that case I sell COP for 120 - 114 = 6 points plus keep the option premium of 915. 120 - 114 = 6 x400 = 2400 plus the 915 or 3315, not bad for a month's work. Now right on cue, Trump threatens Canada with tariffs over the smoke drifing down to the US from the Canadian fires. Never mind the politics, this sort of chaos will only send all sort of prices higher, and dampen the stock market advance ala last April 2025. thanks DJT.

SOX and NDX

 7/18/2026

SOX is down 19% from its high and NDX is down about 7.5%.

 Yes this is significant, to watch. That low in mid May remains unbroken. PMO is way off but could come back. See comment on high yield in last posst.

It is summer and nothing falls apart historically until October.  

Has the Market Given up On Junk Bonds Yet?

 7/18/2026

Uh No it has not, and until it does Mr. Market is not done topping. 

 

These are the two big Junk funds ad neither has turned down in a significant way. 

A junk bond is one rated less than Baa. Real junk is CCC of which 50% defaults. So the default of a junk bond is a sign the issuer is done, kaput. Likewise the lack of faith in a broad group of bonds, my junk is better than your junk, will finally show some lack of faith in the market.

A WSJ article warns of excessive stock issue regarding AI, how about excessive bond issueance, of which everyone from governments to business is guilty.  

1973-74, Semis and NDX

 7/17/2026

The high in the stock market will occur amid the collapse of the NDX 100 high tech and SOX semi-conductor  stocks.

 

Looks like NDX managed to hold just above the June low.  

SOX, yes the two are very similar but SOX did not hold teh June low, closing lower today, Friday. 

 

Before Kevin Hassett went to work for Trump 2025, he was a pretty good economist. LarryKudlow and Stuart Varney had him as a frequent commentator on their shows on Fox Business. 

Back then, pre- 2025, Kevin said we were going back to the 1970s, high energy, more inflation, not much on stock market but I wanted to bring you up to snuff with what happened in stocks 1973-74. Kevin now shills for Trump, honestly, why did you need to lose independence Kevin. You would have been far more interesting observing in what is about to happen than trying to defend it. 

Read 1973-74.  

 Out of the 20 largest percentage gains and losses in the DJIA, none occurred during this time period.^[8]

^{Which is to say, there was never a single or multi-day crash, massive sell- off.}  

At the time Ross Perot had taken over what was F I duPont and then duPont Glore FOrgan. He was going to show Wall Street he was better than the Merrill Lynch HR dept. Well he managed to take both duPont and Walston under, all offices eventually sold off to competitors, Perot's obnly flop to myknowledge. 

 

Friday July 17, 2026 Energy Update

 7/17/2026

  

Long Term Energy Update

July 15, 2026 Let's look at the longer-term energy. picture, Recall Iran has nothing to sell other than oil, so their interest is in a stable oil, profitable price.

In early 2025, oil started dropping from $80. It went all the way to $55 by December, 2025. Then bingo, February 28, 2026 and we get Epic Fury, Trump attacks Iran, do you suppose there is a linkage in the $55 and a war to jump price to $120?. Yeah, uh huh. That would have been  the rare time to buy an option on oil. Oil drops back on Vance's Memo of Understanding, how naive can Vance be?  Bingo, the oil price stops right at the confluence of the chart moving averages.  Again, do you think this is all coincidence? And out goes the memo, Trump will get 20% toll free, and then the next day he won't, gee don't you know the Iranians love this stuff, leader of the free world cannot make up his mind, but that is not our problem at hand. And holy Petrodollar Batman, oil jumps right thru all four MAs to come to $79.58, that was Wednesday.

My contention is that the Iranians have established a new floor for oil at $70 - 80.  I believe this will be the new normal for some time. Now to a strategy that will maximize our returns given this floor price. We are now able to invest right at the emergence from this new price floor. Expect Iran to keep things going right into the mid-terms.  Trump does not have the Congressional backing to do much more than the fireworks currently on display.   The oil price stays firm as they sell via shadow ships to China et al.

July 17, 2026 Oil jumps $2.50 overnight. All the major energy stocks jump upside. Trump was expecting oil prices to drop, uh no, uncertainty via fireworks upsets rather than calms markets.

The big AI news this week was the 22% one day drop in IBM. Sure they made billions but uh, er, ah, maybe bet too heavily on a few customers using their product instead of an AI alternative, but what does it matter? The stock took the biggest hit since the 1987 one0day crash. Wal Street is getting nervous about lots of AI investment with questionable returns.

I have been warning of stock market topping conditions for a year, talk about early!  This morning the tech heavy NDX is down 1.77%, falling out of its sideways formation. One day does not change a trend, but it sure did for IBM. Time to dust off those re-runs of Dallas, J R Ewing is back.

www.professorelam.blogspot.com

 

 

A Look At a Major Oil

 7/15/2026

Conoco Phillips

 

Here is a 2 hour chart boig ack to the high in oil in May. It jumped off the bottom and it probably short term over done, the MAs need to catch up. We can buy here and sell a August 21 115 call for about $300. Let's suppose COP does nothing between now and then. so it is Augu 21 and we collect the $300. If we did that every month, 12 x 300 = 3600 / 11,146 = 3.2% in addition to the 3% dividend it pays or total 6% income. And we have the chance for appreciation, I think appreciation comes later as the MAs need to come together before this group of stocks can advance. 

Okay a look at service energy tomorrow 

Major indexes are quiet and it is summer, look for more of the same till end of August.

I still think silver has another low in the 50-55 area before we have a trade able low in. 

Treasuries still very slow movers.

See  you tomorrow. 

 

Long Term Energy Update

 7/15/2026

I have no position on the over all market direction other than to say it is still up.

I do not desire to chase techs at this point see 22% drop in IBM yesterday., But NASD is unphased.

Let's look at the longer term energy. picture, Recall Iran has nothing to sell other than oil, so their interest is in a stable oil price. Specifically a profitable price.

In early 2025 first arrow, oil started dropping form $80. It went all the way to $55 by Dec 2025. Then bingo, Feb 28 and we get Epic Fury, Trump attacks Iran, gee do you suppose there is a linkage in the $55 and a war to jump price to $120?. Yeah, uh huh. That would have been the time the rare time to buy an option on oil. More on options in a bit. Oil drops back on Vance's Memo of Understanding, how naive can Vance be?  and bingo the oil price stops right at the confluence of the moving averages. that is the second arrow on the right.  Again you think this is all coincidence? And out goes the memo, Trump will get 20% and then the next day he won't, gee don't you know the Iranians love this stuff, leader of the free world cannot make up his mnd, but that is not our problem at hand. And holy Petrodollar Batman, oil jumps right thru all four MAs to come to $79.58, I recorded this chart as shown 12 54 PM CST.

My contention is that the Iranians have established a new floor for oil at $70 - 80.  I believe this will be the new normal for some time. Now to a strategy that will maximize our returns given this floor price. We are now able to invest right at the emergence from this new price floor. Expect Iran to keep things going right in to the mid Terms. As Walter R Mead said in the WSJ, they don't think Trump has the backing for an invasion of Iran or any more than he is doing now. I  agree. So the pbrice stays firm as they sell via shadow ships to China et al.

 What are we looking for? We are looking for an ETF which is good for IRAs, personal or in my case even a 403B account.  Here is a Blackrock account which comprises the major oils. It shows a large A  C correction from the $120 top, not this is a different time scale than WTIC above. Also note Price is amidst three MAs. Good, this shows support at the 49 level. This might be a wider range but that is because it includes so many major oil. 

Here is a role call of the top firms, Total is the big French firm, amazing how well the French do outside their own country. COP split off Phillips to become a refiner on its own. Enbridge is a royaltytrust puying dividends, I do not want to own a bunch of those, too volatile. VLO is a firm here in SA which is a world wide refiner, my apologies for not buying it when I heard the CEO tell us to do so at $63, now turning slightly down at 290. 

I am now in other posts going to suggest alternatives to increase return in this area. As always intrested in your take on this. 

dennis.elam@att.net 

IBM down 22% Tuesday

 7/14/2026

Lower Earnings Drop IBM 

It may be the final realization that all the AI investment will take a while to pay off.

Will the panic spread to other stocks?

This is the sort of even to put a cap on a tech mania.  

It illustrates the danger of staying long any one stock in the NDX sector. 

CNBC Reports 

 7/14/2026

 

August crude oil is the lower chart, notice it hit 78. this morning, after hitting 81 earlier this moring, now, itis 79.90. Well no wonder XOM in top chart never changed much thought the jump in oil appears to hae occurred after the stock market close.

This also illustates my point, it pays to have some sold call protection against a stock position.More on this tomorrow. 

Semi conductors

 Could be a head and shoulders top, or an ongoing correction, see MACD at bottom. 

Magnificent 7 Stocks

 This looks like a top, a wave one down and now 2 up completing. 

Apple and Meta have calmed but NVDA and PLTR are picking up, as said,  as said NASD is not done yet to the upside. 

Yield dropped .25 of a point in the ten year, not a big deal. 

No big change in silver. 

update tomorrow on energy

 

Dennis elam 

 

 

PCAOB Regulator Joins Oath CPA = 80% automation

 7/14/02026

Christina Ho gives PCAOB the boot to join the race to to automate audits 

Please click and read the article. 

 

y Oath, and what is it building?

Oath is positioning itself as an independent verification platform for financial systems.

It has already received its CPA license.

Unlike traditional audit firms, Oath is building around continuous verification.

• Targets 80% audit automation by 2030
• Connects directly to a client’s data sources, such as accounting systems and document folders.
• Automatically extracts and reconciles financial data.
• Shifts audit from an annual process to a monthly, continuous verification

Founder and CEO Lucas Ward sums it up:  “Modern financial systems are built by machines. So why are humans still auditing them?”

__________________

 

Okay audit students, great idea or field day for fraudster? 

Fast Moving Energy Market

 7/14/2026 135 PM CST

I looked at the energy stock charts and too far ahead of them selves on the 120 hour for a position.

Sure enough, today Trump backs off taking 20% fee on Hormuz and decides it should be free passage, no kidding DJT, you know like say Miami to Jamaica!

 

So oil reverses from 81.27 to 77.86.   Oddly big oil stocks have not dropped in unison.

Let's see how the markets end in 1.5 hours 

Energy Anyone - July 6

 7/13/2026

Our comment July 6 is repeated here

 
 The charts of the major oils, XOM CVX BP SHEL all look about the same. Here XOM has corrected in an A B C fashion to the down side. Note price is just above the  200 day MA, a natural support level. 

Attempts to analyze the various major indexes are difficult. And it is summer when the markets tend to waffle and wander.  

My suggestion is to buy some of the major energy stocks and write call options against them. Crude oil has fallen to  reasonable support, some shipping is thru  Hormuz.  This seems a better strategy than trying to analyze the indexes which will not die. 

____________________

And that is what happened.

 XOM came right abvove the 200 dayMA red line seen at the very bottomed of the chart, It then railled

In a wave one up, two down, and now a larger three up along with the $3 jump in oil today. I stick by my buy write suggestion,  ideas tomorrow.

SPX and NDX are likely not done yet, patience.  This Mag 7 EtF looks tobe completing it s wave two up. This will be a drag o the five Mags now in the DOW 30 as this index turns down today, Apple hit an all time high today.

 

Bonds

30 Year T Bond

 Long bond price are falling so rates re rising. The stock market cannot ignore this forever. 

Today I saw prediction of a FED cut in Sept and Dec, not likely with long rates rising and oil back in bull mode.

Iran will continue the catch me if you can game right into the mid-terms frustrating Trump. We may have seen a new floor for oil at the $68 level.  

 

Junk ond Spreads

 7/8/2026

Junk spreads widen

 

Sure Enough, Oil Rallies

 7/8/2026

 

Oil jumps, stocks fall as Trump says interim Iran deal 'over'

 

Trump blasts NATO for rejecting his efforts to claim Greenland as leaders hold a summit in Turkey

 

Trump orders halt to US trade with Spain over NATO spending, Iran

 

Energy Anyone?

 7/6/2026

 The charts of the major oils, XOM CVX BP SHEL all look about the same. Here XOM has corrected in an A B C fashion to the down side. Note price is just above the  200 day MA, a natural support level. 

Attempts to analyze the various major indexes are difficult. And it is summer when the markets tend to waffle and wander.  

My suggestion is to buy some of the major energy stocks and write call options against them. Crude oil has fallen to  reasonable support, some shipping is thru  Hormuz.  This seems a better strategy than trying to analyze the indexes which will not die. 

$39 T and Counting

 7/3/2026

Good article on Federal Debt 

The debt grew from 1981 to March 2020, the end of the 39 year down cycle in interest rates. So as debt grew it 'seemed' manage able as it id not take that much of the overall budget, ie, interest rates to re finance the debt kept falling. 

Not now, After hitting about .5% for the ten year note in 2020, we are now around 4.5%. the interest on the debt is more than the defense budget. And no we do not owe it to ourselves, China and other foreign countries own a lot of it. 

Okay as long as the buck is the world reserve currency. But the Chinese have other ideas, like the Infrastructure Investment Bank. 

China would love ot substitute the yuan for the US Dollar. And if that were to happen, bets are off.  

Lower Highs

 7/3/2026

 The NDX made its high in early June. Since then we have lower highs, now we need lower lows.Taking out the June 10 low would be more convincing of a high.

 Notice SPX looks similar to NDX above, lower highs ut again it needs to take out that June low.  NOte 2 hour chart.

SOX semi conductor

Not exactly but similar with lower highs.  Again needs to takeout June low.

Okay DOW, not shown,  guys happy now?  Now five of the Mag 7 stocks are in the 30 DOW and it makes new highs, surprise though the Thursday rally was broad based. 

silver in counter trend rally 
 

Smoot Hawleyn2.0?

 7/1/2026

I have had students report on the smoot Hawley Tariff Act of 1930 a few semesters ago. After the Liberation Day stock market fiasco of lat April, things seemed to settle down, until now.

My students, graduate level Business College , an A & M system school, had never heard of it. They were amazed at its damage. Well Trump, since he did not write it, disliked the former NAFTA deal and wrote the USMCA US Mexico Canada trade agreement. I never read what actually changed, did you?  Could this be the out of left field event which upends the ever bunny stock rally?

Nowhere we go again, trying to zero our balance of trade with Canada and Mexico, why. If Mexico makes Ford pickups as well and cheaper than we can, why not buy them? that is roughly a Milton Friedman quote.   But Trump has bought in to the trade deficit folly as follows today. from Yahoo Finance

 

Let's see Save America  bill - no go

Memorandum with Iran - no go

Greenland - nope

Canada 51st State - nah uh

 so let's get back to Liberation Day 

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Today was the deadline for long-term renewal of the United States-Mexico-Canada Agreement (USMCA), the trade pact President Trump negotiated in his first term with the US's two top trading partners.

This time around, his administration says it will not renew the pact in its current form before more talks.

Representatives from all three countries meet virtually on Wednesday, with the US holding out and announcing plans to keep negotiating rather than re-up the agreement for another 16 years.

"The United States will continue to engage with Mexico and Canada to address the Agreement's shortcomings and our trade deficits with these countries," US Trade Representative Jamieson Greer said in a statement. "The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed."

In a call with reporters on Wednesday, a senior administration official downplayed the overall importance of the agreement, saying, "We have already seen the USMCA to some degree subordinated" by the president's other tariff actions.

The USMCA sets tariffs to zero on millions of goods traded among the three 

nations. The missed renewal deadline has been widely expected for days.

"I'm not looking for my pen," Canadian Prime Minister Mark Carney quipped to reporters on Tuesday. Mexico had called for the pact to be renewed, but the US had been pushing for more talks.

Trump has meanwhile taken to disparaging the agreement that took effect during his first term.

 

"I'm not a big fan of it," the president said last month. "I would rather not have the agreement, but I may sign it. … We'll see what happens."

The senior administration official said Trump's "primary" concern is America's trade deficits. But the negotiations could touch a range of sectors, such as automobiles, where both Canada and Mexico, as well as car companies, are pushing for lower duties, plus areas like aerospace and food products, where the US is a net exporter.

Greer has announced another round of talks with Mexico this month in Mexico City. That came after a June 15-17 meeting in Washington, D.C., which ended with a noncommittal joint statement from the US and Mexican teams that they had "advanced discussions."

The next steps with Canada are unclear, with no direct talks currently scheduled.

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Amid the tech mania I have wondered what wrench might be thrown to upend the party. Here is Liberation  Day last April, a quick 9,00 point drop.

Trade nutcase Peter Navarro, whose Federal experience includes jail time served,  JamiesonGreer US Trade Rep,  Greer has been described as an "architect" of Trump's tariff policy by the New York Times, and Trump, the only good idea is my idea, now has the Canadian PM 'not looking for a pen.'  While predicting politics is not possible,  we could see a repeat of last April. With his Save America ill going nowhere perhaps Trump is looking to flex muscle elswhere, hmm that Memorandum of Understanding with Iran does not seem to be helping and we only see VP Vnce defending it. even Trump warned it would be Vance's deal if it failed, note Sec State Rubio is no where around it. 

We'll see. I still have my very modest short stock position. 
 

 

Brother Can you Spare Me a Dime, or $1.4 Trillion?

 7/1/2026

 

Brother, Can You Spare a Dime?" is one of the best-known American songs of the Great Depression. Written by lyricist Yip Harburg and composer Jay Gorney, it was part of the 1932 musical revue Americana; the melody is based on a Russian-Jewish lullaby. The song tells the story of the universal everyman, whose honest work towards achieving the American dream has been foiled by the economic collapse. Unusual for a Broadway song, it was composed largely in a minor key. The song became best known through recordings by Bing Crosby and Rudy Vallée that were released in late 1932. The song received positive reviews and was one of the most popular songs of 1932. As one of the few popular songs during the era to discuss the darker aspects of the collapse, it came to be viewed as an anthem of the Great Depression.

Dow Depression low was July 8, 1932 at  41.22.

 

The timing of the song and the lyrics, the unusual reality of the Depression for the average man, nothing average then or now about Broadway, and in a minor key, make this the perfect soconomic song for the Depression low of the Dow. In fact that was the low for the entire 1900s, previous December 1896  at 40.98,

The cause of the Depression was the drop from 391 in September 1929 to that low three  years later, the Dow dropped 232 in November 1929, rallied to 239 by May 1930 and it was all downhill fro there.  Then commercial banks would loan 90% of the purchase stock price with only 10% cash margin required. An 11% drop from the purchase price wiped out the stock collateral, if the buyer was unable to post margin the stock was sold by after May 1930 the bounce back high from the November low,  probably a at lower price still. But the crash to 239 wiped out lots of margin accounts. With no FDIC bank insurance 30% of the banks closed wiping out that much of the money supply.  

Margin debt has risen 54% to that $1.4 trillion, yes with a T,  in just the last year. Oh and the Glass Stegall Act of 1933. talk about too late now,  keeping commercial banks out of that business was repealed  in 1999, less than a year before the  Dot com top in March 200. The repeal sponsor, Phil Gramm , former Tx A & M Economics Professor and now occasional WSJ contributor, thanks Phil!

Exchange traded Funds ETFs can be leveraged, thy can borrow   2x or even 3x to double the bet on usually an industry, up or down.  Now one can buy 0DTE zero day to expiration option yes theyexpire today. One can buy future on leveraged ETFs, all future are massively leverage, and even options on ETFs. Leverage is then  ealisy500% or more in the ETF , related futures and options of 5x what it was in 1929.  Yet who is bearish or even warning of impending danger?

 

See the WSJ Monday front page article. Direxion 3x ull Semi ETF rose 700% from late March to early June, fun on the way up. Okay math students at 50% margin for later buyers when would a margin call kick in, once the ETF dropped well before a 50% loss, hmm do you think the buyer could pst cash margie without selling the fund?

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Wed Update

 The DOW gave up a 400point rally but closed down -13.96 day's end with all but  Transports closing lower. 

NDX

The end of June low was 28,890, then 28,600.  we need lower closes than that to think about a top. 

MU rallied from 400 to 1250 from April to late June dropping 10.57$ today. This is Oct 1929, March 2000, fall 2007 mania. 

Silver is rallying from its over sold at 55.62, closing lower will renew the down trend. 

No real news on bond yields, Marsh citing the FED 2% inflation rate is nowhere in sight. how long till Donald turns on him?
 

 

 

 

 

GAAP Consolidation Rules

 7/1/2026

 

Table of contents

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Key Takeaways

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Overview of US GAAP Consolidation Rules

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Models for Determining Consolidation

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When to Consolidate Under US GAAP

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How U.S. GAAP Differs from IFRS in Consolidation

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GAAP Rules for Capitalization of Costs

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GAAP Rules for Outstanding Checks

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Challenges in GAAP Consolidation

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Conclusion

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FAQs 

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Book a Call

Managing multiple entities can make financial reporting feel overwhelming. A 2024 report notes that 78% of auditors view intercompany accounts as a high-risk area, with manual processes, complex structures, timing differences, and currency conversion ranked among the top causes of financial statement inaccuracies or delays. Without clear rules, it’s easy for numbers to become inconsistent, stakeholders to lose confidence, and compliance risks to escalate.

That’s why U.S. GAAP consolidation rules are so important. They provide a structured way to combine your parent company and subsidiaries into one unified set of financial statements, giving investors and regulators a true picture of your business’s overall performance.

For U.S. companies with international operations or offshore entities, understanding these rules is essential. It’s not just about compliance; it’s about presenting financials that are accurate, transparent, and ready for scrutiny.

In this guide, we’ll walk through the key principles, models, and challenges of GAAP consolidation, and explain how applying them correctly supports stronger financial reporting.

GAAp Consolidation Rules

 

The J P Morgan $4 M Salami Inciden

 7/1/02026 WSJ

 

It turned into a Wall Street punchline, but big banks aren’t laughing.

After JPMorgan JPM -0.63%decrease; down pointing triangle fired a wealth manager for expensing a $642.50 Super Bowl platter, the employee claimed he was wrongfully terminated, saying he had intended the spread of deli meats and cookies for clients who didn’t show up. In May, the employee won $4.25 million in the case that became known as the “salami incident.”

Now, big banks have had enough of these sorts of claims and want to make sure they are never again vulnerable to them.

JPMorgan filed a motion late Monday in a California federal court to vacate the award to its former wealth adviser, Brent Ryan Bodner, over the deli meats gone awry. The award, the bank argued, was “lawless” and misrepresented the reason for his firing.

Another apparent target of JPMorgan’s filing: the watchdog group that awarded him the sum. 

The bank said Bodner took advantage of the Financial Industry Regulatory Authority’s rules to engineer a high payout. Finra, the industry’s self-policing group, adjudicates disputes among advisers, brokers, investors and institutions.

“FINRA exists to promote trust and confidence in the securities industry,” the bank wrote in its filing. But the bank said arbitrators punished it for “truthfully advising the investing community about Bodner’s misconduct, while rewarding a wrongdoer whose claims would fail as a matter of law in any other forum.”

The bank’s dig at Finra reflects a broader push on Wall Street to rein in the organization, whose arbitration panels rule on everything including defamation claims, whether investments were too risky for a client or if a broker is a “Wolf of Wall Street” type who needs to be punished.

In March, Finra asked the public to weigh in on a host of questions tied to its rules for deciding arbitration cases. Suggestions from banks and other financial firms poured in.

Brent Bodner was awarded $4.25 million after being terminated over a disputed Super Bowl spread. Marc Seldin Rosen

“I can’t recall the last time there was either a rule proposal or a request for comment that covered so much,” said William A. Jacobson, a law professor and director of the Cornell Securities Law Clinic. “It would be odd to me if a couple of large awards could cause Finra to want to look at the whole system and propose systemic changes.” 

Investor advocates and lawyers for advisers and brokers say it could end up handing even more power to Wall Street.

Already, Finra had a reputation for having a lighter touch than federal regulators. 

According to its own data, institutions win or settle the vast majority of cases brought to a Finra arbitration. Only 3% of all cases since 1989 have resulted in punitive awards, which are reserved for certain cases with “serious misconduct.”

Wall Street has nevertheless been galvanized by recent mega awards that were even bigger than the salami win.

There was a $133 million judgment against Stifel Financial and a $92 million award against UBS. The cases were brought by investors who claimed they weren’t properly told about risks, and the awards were upheld in court on appeal.

Any potential cap on damages or other changes to Finra rules would need to be approved by the Securities and Exchange Commission.

Among those that submitted letters calling for change are Charles Schwab, LPL Financial, and Sullivan & Cromwell, the law firm representing banks like Goldman Sachs and JPMorgan.

The industry wish list would broadly curb how much an arbitrator could levy in punitive damages, if at all, and allow cases involving large or complex investments to be routed to other arbitration forums, which are typically more expensive.

“They want to protect themselves,” said Jenice Malecki, a lawyer who was formerly part of Finra’s national arbitration and mediation committee.

The industry’s complaints may already have found a sympathetic ear at the SEC.

Michael Bixby, president of the Public Investors Advocate Bar Association, who opposes many of the industry’s proposed changes, said the Stifel award came up during a meeting with the regulator.

“Isn’t that number kind of big?” Bixby recalled being asked by an official at the SEC.

A spokesman for the SEC said the agency “would not comment on a private meeting.”

As for Bodner’s case—essentially, an employment dispute—banks are hoping to change the rules there, too. Finra’s rules require banks to explain the reason for employee departures on their employment records, a portion of which is usually public. JPMorgan says that requirement allowed Bodner to claim defamation and wrongful termination, which the company denies.

Arbitrators allowed Bodner to classify his leaving JPMorgan as voluntary. The bank is looking to reverse that.

An industry group, the Securities Industry and Financial Markets Association, recommended that new rules give firms “qualified immunity” against employee challenges to how their departures are described on their employment record.

As for Bodner, the former JPMorgan adviser’s lawyer isn’t happy with some of Finra’s rules either.

Marc Rosen criticized Finra rules for requiring employees to enter into arbitration over matters that don’t involve securities, and for allowing banks to assume former employees’ clients while hashing out employment disputes.

“Pretextual terminations that tarnish careers of honest employees is never permissible,” he said in a statement, adding that he is looking forward to defending against the bank’s suit. “The Arbitrators saw and heard all of the evidence.”