Good news for Visa!  

You know how you get that "teaser" rate on your credit cards or no interest for 12 months when you start? Well, that all goes away when you have a delinquency and then they get to hit you with 22% interest FOR LIFE AND penalties and then you are DOOMED!!!!  Well, 2.2% of credit card holders are now in that category, the most since the market collapsed in the sub-prime loan crisis.  

Of course, we'd never make that mistake again, right? So what have our beloved credit card companies been doing about it? Well, they issued over 20M new credit cards to subprime borrowers in 2015 and that's up 56% from 2013. And the borrowers paying those crazy penalty rates are, of course, the ones who can least afford them:

Missed payments in states with large oil or energy sectors continue to worsen. The share of card balances that were at least 90 days past due increased 12% in Oklahoma, 10% in Texas and 20% in Wyoming in the third quarter from a year prior, according to TransUnion. The Wall Street Journal reported in April that rising unemployment in the energy sector was pushing up delinquencies on credit cards and auto loans, raising the risk of new losses for banks.

Don't worry about bank losses – we'll bail them out – where's the risk in that? Speaking of criminal banking institutions,14% of Wells Fargo (WFC) customers have decided to leave the bank, the other 86% seem oblivious to the news. Of course the other banks are eager to meet the former WFC customers, so they can cross-sell the crap out of them! This is how the free market is supposed to work, where the customers punish wrongdoers by withdrawing their support. Unfortunately, you wouldn't know there we wrongdoers without regulatory oversight and, even then, it apparently takes years and years to uncover.

Rather than put our money into WFC and expecting a recovery (and they are only down about 20% despite the fact that a lot of their profits turned out to be fraud-driven), how about looking at one of the banks that will benefit from new customers – like Bank of America (BAC), who had a nice jump in App downloads in the 30 days after the scandal broke at WFC (9/8). That makes for an easy inference that they will likely have a good 4th Quarter, right?

BAC was our Stock of the Year in 2012 at $5.75 so it's hard for us to get too enthusiastic about them at $16.77 but it's been 4 years and I think they've grown into their value. Of course, for our Members, we'll put together a nice options spread but it's earnings month so I can't share those with you so I'll just act like some kind of normal market pundit and say BUYBUYBUY BAC at $16.77 (wow, I can't believe that's considered stock picking!). 

We made a bad pick yesterday, risking Sonic (SONC) into earnings and it wasn't the earnings but the guidance that disappointed and the stock is down this morning but we still like them and like their long-range plans so I put out a note to our Members to buy on the dip early this morning, in our Live Member Chat Room as the company tested the $22.50 line.  

Fortunately, we're in a tight options spread (March $25/27.50 at net $1.40) so the dive in the stock won't kill us and now we can sell some puts to pay for the spread and give us a very cheap entry – hopefully the June $25 puts for $4 or more.  If we sell those and spend another $1 to roll to the March $22.50 long calls, I think that trade can be salvaged (it's in our Options Opportunity Portfolio). 

The markets are generally quiet and we also shorted the indexes this morning at the same lines we went for yesterday and already the rising Dollar is making us money as it climbs over the 99 line – on it's way to our 100 goal, which will make you $18,000 if you took our FREE trade idea from our September 14th morning post, which was:

Goldman Sachs has finally caught up to our long Dollar (/DX) premise and we're still sitting on 4 longs at 95 on the Dec 31st contracts (DXX6) with a goal of hitting 100 (but we'll take 99.50 for $4,500 per contact gains for the holidays).  We're expecting a bit of a repeat of last October's action and, until then, we'll just need to be patient.  As I was saying to our Members yesterday, we don't know WHEN enough people will realize we're right to move the Dollar higher but we do know it won't take much of a catalyst to get it going – a Fed hike next week would be a good start.  

If you are futures challenged, the Dollar ETF (UUP) is a nice way to play, now $24.64 and you can buy the Jan $24 calls for 0.85 and sell the $25 calls for 0.35 for net 0.50 on the $1 spread which is already 0.64 in the money so, if UUP stays flat through January expirations, you make 28% but the potential is 100% gain if up moves up just 2% to $25 – that's nice leverage! 

We're up $16,000 already on our 4 long contracts so don't be greedy if 99 fails to hold, we can always get back in once we're over the line, using it for a stop. Those UUP Jan $24 calls are already $1.55 and UUP is at $25.53 so right in the money for our full 100% gain if we simply hold 99 – that was easy!