The New SAT Keeps Score In Cash
In the Dark ages when I took my SAT’s and ACT’s, I actually went to the testing room and did the test. I would get my scores and apply to college. That was the old way to enter the University system. However, like anything else times change and now we have a new method to get into schools. It is one of the world’s oldest ways. Cheat!
As with everything else these days, the new method has taken on a 21st century tone. The new scheme is much more sophisticated. The FBI revealed last month that while they were in the process of looking into another scam that they had stumbled onto a real beauty led by a guy from Newport Beach California named William Rick Singer. Turns out Singer has been running the deal for almost eight years. He has been accused of taking in over $25 million dollars of wealthy parents money to fix test scores and bribe officials at various prestigious universities around the country.
Mr. Singer used a couple of methods to get the kids into school Two firms that he controlled, Key Worldwide Foundation and The Edge College & Career were the vehicles he used to run the scam. Mr. Singer helped more than 750 children of the rich and famous to get into elite universities. First he bribed exam administrators to alter the grades of students he represented to ensure that their scores were high enough to qualify. Second he bribed coaches and administrators to nominate non-qualified applicants to be recruited as elite athletes allowing for easier access. Finally, he used his charitable foundation to conceal the source of “gifts” from the parents as laundered money.
As usual this is only the tip of the ice berg. Mr. Singer has already plead guilty and is awaiting sentencing that could be as long as 20 years and a fine of over a million dollars. Some of the rich and famous are also pleading guilty and are cooperating with the FBI to find other families that were involved in the crime. University coaches and administrators have been reluctant to admit their role in the scam but that is only a matter of time. When it is all said and done a lot of people are going to have their lives and reputations ruined. They will get what they deserve for their arrogance and disregard of the rules that they feel should only apply to the little people.
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions with a short paragraph which will cover the trading subject.
Question: Why not sell a weekly straddle for a larger credit than a vertical spread?
Answer: Selling a straddle for a credit is not the same as selling a credit spread. When you sell a straddle, you are selling two options at the same strike price, a put and a call. And while it does create a much larger credit, it also creates unlimited risk. Selling a credit spread doesn’t have as much profit potential as selling a straddle, but it has limited risk. Remember when you sell an option you create unlimited risk. To negate that risk you must buy an option against your sale. I have seen some of the most brilliant people on earth blow billions of dollars by taking on unlimited risk. Don’t be one of them. Stick with the spreads that have either limited or unlimited reward but always have limited risk.
The Wise Guy Report: The View From The Floor
Each week I talk about what I think the Wise Guys (floor traders) are up to with the Big Three commodity contracts: Gold (GC), Crude Oil (CL) and Long-Term Interest Rates (ZB). I also track the Market Edge (www.marketedge.com) ‘Market Posture’ which has a twenty-six year record of forecasting the intermediate-term direction of the stock market as measure by the DJIA with around 70% accuracy.
T-Notes
The Fed has made it clear that they will not be raising rates in 2019 and that news should bring in higher prices, but so far it is not working. After wandering in a sideways pattern for most of the week, the ten-year had a break on Friday that violated near term support. There is still quite a bit of room to the downside to take out the long term support so we will stick with the trade. If traders feel that the Fed may even get more liberal with rates, the near term top could be taken out.
Crude Oil
The black gold is on a roll and continued to inch its way higher for most of the week. A late afternoon selloff on Friday prevented crude from posting another new high as the contract had to settle for a small gain for the week. The market is trending but as the price becomes steeper you have to be all alert to a potential blow off. However, since there is no overhead resistance in sight we will continue to ride this trend.
Gold
Traded in a narrow range all week. It was in positive territory early in the week but as has been the case for the past several months it seems to sell off on Thursday or Friday. The market appears to be looking for a direction but can’t find its way. It remains above long term support, so we still have room to hold the trade. Hopefully it will find a direction in the near future and that will tell us how to handle this position.
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The Market Edge – ‘Market Posture’
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