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Thoughtful Thursday – Contemplating the S&P 500

This is Part II.  

I tweeted out part one (as well as Emailed an Alert to our Members) earlier this morning, so I'll take a break while you read that and get caught up

In case you are wondering, the image on the right is the explosion at China's Tianjin port last night that registered as a 2.9 earthquake and has killed dozens and injured hundreds.  It may have been an LNG accident or it may have been a chemical explosion but, either way, all 17 Republican candidates have vowed that we will not rest until the kind of laws that prevent cool explosions like this in the US are repealed so American businesses can fairly compete with China in industrial accidents.  

As to the markets, suffice to say you can read yesterday's post and be all caught up as we're right back where we started from yesterday morning.  Fortunately, we cashed in the EWJ shorts that we picked for our 5% Monthly Portfolio (see Seeking Alpha's Premium Research to join) and the 10 Sept $14 puts we bought on Monday afternoon for 0.90 hit our $1.35 target yesterday for a very nice $450 gain, which was 50% in just 2 days!  

That trade alone puts us 10% of the way to our +$5,000 goal for the month (5% of our $100,000 portfolio) and our other 3 trade ideas have contributed another $800 of their own so far (all this week) for a perfect start and $1,200 gained for the week (so far).   

Now, getting back to the broader task at hand – in our previous post we discussed whether or not the markets were going to continue to pull back or if, possibly, we are consolidating for a move higher and I said that, to make that call, we should focus on the S&P 500's top 25 stocks, which make up 44% of the indexes weighting.  Those stocks are:

As I noted earlier this morning, I think XOM, CVX, AAPL, PG, IBM, INTC, HPQ, WMT have made pretty good corrections while MSFT, JNJ, JPM, T, WFC, BAC, CSCO, KO, GOOG, PFE, PEP, PM haven't really corrected at all.  The other 5 I could take or leave and that leaves us with 12 stocks that could go lower vs 8 stocks that SEEM cheap, but there's the catch – a lot of things SEEMED cheap in July of 2008 as well!  

Obviously, XOM and CVX have their own special problems, with oil down at $43 and not likely to make huge improvements (though we are long here for the holiday) – neither are stocks I'd expect to carry the S&P higher and, if anything, they will weight them down.  IBM, AAPL and INTC are stocks we already have long positions on – so I won't get into the merits there.  HPQ is in the same boat and I like them too – we just didn't need another tech…

 

As you can see, these 4 tech heavy-weights have been a huge drag on the S&P for the past few months, with each of them roughly 10% off their highs.  On the other hand, GOOG has gone up 24% since early July, adding $100Bn of market cap in 60 days, more than making up for AAPL's $70Bn loss over the same period.

It's hard to compare apples to oranges, of course, but AAPL and GOOG – maybe…  Either way, it's all tech and it's hard to say why MSFT, CSCO and GOOG are flying high while AAPL, HPQ, IBM and INTC are down in the dumps.  I guess you could draw the conclusion that the internet itself is expanding and that's good for search engines and routers but hardware sales are still depressed – partially due to the new device-oriented access we all enjoy.  IBM SHOULD be benefiting from this but they are in the middle of restructuring, so a different story there.  

Now the question is, are we too excited about our 3 high-flyers given weak hardware sales?  MSFT's current p/e is 31.5, historically very high.  GOOG is also nose-bleeding at 31 but CSCO is "normal" at 16, which is still 23% higher than the 13 average of our 4 down tech stocks.  You could use this logic to argue that our 4 depressed stocks are buys – and that's why we're long, but I don't think I'd want to play GOOG and MSFT to go higher, even in a rally so, until our tech laggards turn – I think this group is a drag on the index.  Point bears.  

That leaves the bull camp needing PG and WMT to bring up the bottom and that's not going to happen with the China drag so now we have to contemplate whether JPM, WFC and BAC should be so happy and yes, they should be with all the FREE MONEY the Fed is showering on them (C is in there too and GS just missed the cut).  

Of course, we KNOW the Fed is going to tighten in the Fall – not much, but a little and the free ride will eventually come to an end.  No reason to short them now but no reason to assume the growth that's priced in will continue either.  Still not scoring any points for the bulls…

JNJ, T, KO, PFE, PEP and PM are all consumer stocks of different stripes though PFE has it's own special market and isn't really discretionary and neither is JNJ's health-care sector.  Of course, PM, PEP and KO do their best to make sure there are plenty of unhealthy customers for the other two and T is a utility with a consumer product kicker.  We know the bottom 80% are struggling with low wages and higher costs of living and that's eating  into their disposable income:

Of course, US Corporations have cut loose from the US long ago and mainly use this country as a source of cheap capital where their Corporate Personhood is protected by the business-friendly courts and, of course, as a tax haven where the average US corporation pays just 12% of their income in taxes – the lowest effective tax rate in the World.  Having destroyed the American consumer by moving their jobs overseas, underfunding retirement programs and stifling benefits, our Corporate Masters are forced to look overseas for their actual revenue growth.  

Over the last year, those overseas revenues have been in rapid decline and we're not picking up the slack at home so there is NOTHING here that justifies the S&P trading at an all-time high – especially when it's 10% higher than last year's trading range with a negative overall growth rate (mostly energy/commodities dragging it down).

So, upon further examination, there is no change to our stance of being short the markets at these levels which, on the Futures this morning, are 17,400 on the Dow (/YM), 2,095 on the S&P (/ES), 4,550 on the Nasdaq (/NQ) and 1,212.50 on the Russell (/TF) and, as usual, we look to short the laggard of the set with tight stops above.  We also took on a more aggressive SDS (ultra-short S&P) position yesterday afternoon – as we felt the run-up was nonsense anyway – this post just confirms our gut reaction

Be careful out there!  

 


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  1. Phil – Regarding that commodity chart I posted, there are of course many deflationary factors – slowing growth being one them. Demographics has a role as well although could be mitigated by a rising middle class in developing countries. But as a follow up to an earlier article I posted, the biggest factor is probably technology – we need less energy in general whether it's coal or oil for example mostly because we are more efficient. Maybe there is less waste with other commodities as well. 


  2. Phil, in light of the outlook for oil over the long term would it not be prudent to take another look at OIH, RIG, etc in our portfolios? Or maybe just get out? Thanks


  3. Good Morning!


  4. Interesting thoughts on why wages are not rising:

    http://www.psmag.com/business-economics/the-future-of-work-why-wages-arent-keeping-up

    The suggestion I want to make is that one important reason for the failure of real wages to keep up with productivity is that the division of rent in industry has been shifting against the labor side for several decades. This is a hard hypothesis to test in the absence of direct measurement. But the decay of unions and collective bargaining, the explicit hardening of business attitudes, the popularity of right-to-work laws, and the fact that the wage lag seems to have begun at about the same time as the Reagan presidency all point in the same direction: the share of wages in national value added may have fallen because the social bargaining power of labor has diminished. This is not to say that international competition and the biased nature of new technology have no role to play, only that they are not the whole story. Internal social change and the division of rent matter too.

    Now I would like to connect this hypothesis with another change taking place in the labor market. Lacking anything more euphonious, I will call it the casualization of labor. The proportion of part-time workers has been rising: both those who prefer it that way and those who would rather have a full-time job. So is the number of temporary workers, whether employed through agencies or on their own. So are the numbers of workers on fixed-term contracts and independent contractors, many of whom are doing the same work as they once did as regular employees. These are all good-faith members of the labor force; they are employed but without what used to be thought of as a regular job.

    This shift toward more casual labor interacts with the issue of the division of rents. Casual workers have little or no effective claim to the rent component of any firm’s value added. They have little identification with the firm, and they have correspondingly little bargaining power. Unions find them difficult to organize, for obvious reasons. If the division of corporate rents has indeed been shifting against labor, an increasingly casual work force will find it very hard to reverse that trend.


  5. And your scary chart of the day – changes in the percentage of population over 65 by 2050:

    USA actually doing better than average – going from 15 to 21%. Immigration playing a big role obviously despite rants from one side of the aisle! Look at China though – going from 9% to 24% and no real social safety net in place.


  6. Phil / SDS – ON the DEC 18 Calls ( long 2.85) will these roll down or get covered today w/ the dec 20 Calls?


  7. Phil / SDS – ON the DEC 18 Calls ( long 2.85) will these roll down or get covered today w/ the dec 20 Calls?


  8. /CL 42.50 for anyone that wants it


  9. MSFT and INTC can't hold green on a day that CSCO beats, another sign of weakness. MSFT got an upgrade today as well.


  10. /CL 42.31


  11. And dropping, blow off bottom perhaps?  I'm just watching now to see where we hold…or not. 


  12. Commodities/StJ – As I said, this may be the new normal. 

    OIH/Jomp – Well I may be wrong and commodities may fly up.  To some extent, I see them as a hedge against inflation, though that genie is hiding deep inside the bottle.  In the LTP, we have BP, UNG, USO, RIG, SDRL, ABX, BHI, CCJ, CLF, DBA, ECA, JO, OIH and SLW in the materials space.  We bought them when the market was high thinking that, if the rally was real – these would eventually catch up.  Clearly that hasn't been the case but, on the whole, they haven't fallen too far either.  

    So the question is, even with the "new normal", do we want to own companies that sell food, fuel and other materials or do we think those things will never cycle back?  On the whole (see our last 6 monthly reviews), they still seem cheap to me – so I'm not jumping out – especially when the overall portfolio is up 38% and these just happen to be the laggards.  

    Bargaining power/StJ – I would have thought that was completely obvious.  As to the part-time aspect, the assumption that people work part-time by choice is quite a leap and their lack of equal treatment only circles back to the main issue of the diminished collective bargaining ability of the workers after union-busting Reagan threw their Commie asses out of the country. 

    Ronald Reagan's War on Labor (Labor) by Dick Meister

    Remembering Ronald Reagan:  The Way He Really Was

    Reagan was no friend of working men and women. In 1981, the President fired more than 11,000 air traffic controllers who went on strike for better working conditions. He jailed the strike leaders and crushed their union. Reagan packed the National Labor Relations Board with anti-union appointees and encouraged the use of permanent replacement workers by employers faced with labor actions. As J.C. Myers remarked on June 7, 2004 in his article "Where's the Rest of Him?", Reagan "made union-busting fashionable again." The 40th president also cheerfully promoted what Meyers has called "the transformation of a high-wage manufacturing economy into a low-wage service economy," along with the export of jobs to lower-cost labor markets in other countries.

    During the 1980s, the median real wage stagnated, and real income plummeted for scores of millions of Americans. As Frances Fox Piven and Richard Cloward noted in their book "The New Class War: Reagan's Attack on the Welfare State and Its Consequences," Reagan's dramatic cuts in aid to the poor, job training, unemployment insurance, education, housing assistance and urban programs constituted a "new class war" against the poorest, most vulnerable people in our country. According to a Los Angeles Times, the number of families living below the official poverty line increased by 33 percent ("A Presidency Characterized by Paradox," June 6, 2004). Between two and three million Americans were homeless by the late 1980s, and homelessness became a national political issue for the first time since the Great Depression. The Reagan Administration also eliminated Social Security disability benefits for one-half million people.

    Demographics/StJ – I guess Africa can invade and take over the rest of the World if they time it well.  

    SDS/Batman – I'm inclined to be patient and see what sticks.  If 2,060 doesn't hold, we could be looking at a proper leg down.  Of course, keep in mind that's because SDS is a HEDGE that is helping to protect a $700,000 BULLISH portfolio so the $13,750 position (50) is a drop in the bucket and it NOT INTENDED TO WIN.   It's insurance and I'm playing it as insurance – if you are worried about losing money on your insurance – then maybe it's a bet and you shouldn't be playing it the same way.  

    /CL $42.50 did not hold!  Wow, that's so sad…  $42.27 now and I have no conviction so I won't play – tempting though it may be.  Dollar 96.59 is up 0.5 from the lows.  Indexes down about 0.5% too so really just moving with the Dollar – same as yesterday, which is why we decided to stay short.  

    Oh, and China eased again – another 1% drop so 4% in 3 days so far.  

    /RB $1.72 would be really interesting at $1.70 for a long into the holiday though last holiday weekend was a bust.  

    /NG just keeps chugging along:

    When you don't see any particular logic to the moves – DON'T BET!  


  13. Phil,

    Any thoughts on selling SCO calls, maybe the 150's? or too soon?


  14. Jefdoc, yea I was in 1@ 42.53, bought 1 more at 42.30 watched, then out both @ 42.34. Bad day


  15. DBC/phil – considering buying puts in this or is there another vehicle you would turn to as a further hedge for more potential commodity deflation (for resource and commodity positions still held such as cvx, abx, fcx, aa, etc.)?


  16. NVDA – another thought re these guys.. great earnings, but if other tech lagging, then perhaps this is not general support for consumer market (gamer machines, home and business pcs) but rather, NVDA did well due to specialized linux-based bitmining rigs…


  17. Jomp, similar for me, but ok with the loss in the grand scheme, there are more opportunities around the corner, just gotta be patient. 


  18. Speaking of DB*, DBA making what looks like another bottom – the tenth in that many months it seems! No one is eating anymore? 



  19. Thanks dclark! No going to help the commodity index overall.


  20. SCO/Rs – We already sold 15 SCO Aug $74 calls in the STP that are killing us:

    Clearly a case of the market remaining irrational longer than we can remain solvent!  Still, this was the top (bottom for oil) in Jan and should be now as well.  We'll have to roll ($32) to 1.5x the Oct $90s ($23) and hopefully it won't go much higher.  As to your actual question – yes, from scratch I think it's a good sell and I'd sell the Oct $100s for $16 as that gives you a bit of room to the upside and an easy target for a pullback.  

    One reason I'm not too worried about these short puts is they can be rolled to 1/2x of the 2017 $60 puts ($12) and the $150 calls ($25) for $37 so we could end up (if we decide) to drop to 1/2 our current position and drop the margin considerably while we let time take it's toll on the premium we sold.  

    DBC/Scott – You want to short commodities AFTER a 50% pullback?  I don't like that idea at all.  You either have to have conviction that this is the bottom of a cycle you will ride out for a year or so or you should be getting out – don't start betting against yourself – that's how people went from 50% losses in 2009 to being completely wiped out in 2011!

    We've been at the bottom of this cycle for all of 6 months and it took 18 months to turn around in 2008/9. That bottom was also forced by sliding demand in Asia and a strong Dollar that drove commodity prices far lower than they would have been naturally.  

    This would be a good time to read the classic post:  "Don’t Just Do Something, Stand There!"

    Bitmining/Scott – How big of a market is that?  

    DBA/StJ – Bumper crops all around from that Ag report yesterday.  

    And what DC linked to!  


  21. Ouch, /NG did not like the inventory report:


  22.  Phil

     I will be on vacation from Aug. 27 to Sept 12.

     I will be in Asia not able to follow the market very often, also the time difference.

     What would you suggest to hedge with? Or wait till next week

     Thanks


  23. DBA- my commodity guy says:

    "yesterday was a rough day for grain longs.  corn touched limit down.  they squeezed out most of the longs and took out the lows of 09/2014 and 05/2105."


  24. We have bumper crops as the Midwest has had loads of rain & much warmer weather than normal for most of the upper part at least. I've NEVER seen the prairie GRASS OVER 6 FEET in my memory, ever. As an off topic, if it is clear tonight go out and watch the Perseid meteor showers that are peaking tonight. You should see them reflected over the lake; absolutely, totally awesome. They've been going for a couple nights. but tonight is "show time."


  25. Meanwhile:

    • The Goldman Sachs buyback desk had its busiest day since 2011 yesterday, reports Bloomberg, and a new all-time record when based on the value of stock purchased.
    • U.S. stocks reversed panicky early action to end Wednesday in the green, setting off a global rally continuing into today.
    • Companies have been busily buying back shares for years, but they're getting a little less value today than of late – the S&P 500 trades at 18.5x annual earnings vs. an average of 16.6x for the last decade.
    • In the green earlier as global markets took a breather from a deflationary scare, crude oil has turned sharply lower, now down 2.2% to $42.33 per barrel.
    • USO -2.5%
    • Black gold had bottomed in mid-March at about $43, but bounced and held back above $60 from May through the end of June, from where the bear market restarted.
    • Unsurprisingly, the energy sector is leading stocks lower today, the XLE off 1% versus the S&P 500 down 0.3%.
    • Offshore drilling stocks could see further downside despite already falling ~30% in two months, Barclays analysts say, expecting offshore spending to decline by double digits again in 2016 as operators wait for signs of oil price stability and lower development costs before committing resources.
    • The firm says floater retirements have stalled, with 38 retirements since last October but only three since June, making little headway for the 60-70 additional floater retirements the industry needs to rebalance the market.
    • The firm downgrades Atwood Oceanics (ATW -7.3%) to Underweight from Equal Weight with an $18 price target from a previous $27, and maintains Underweight ratings on Diamond Offshore (DO -3.7%), Noble Corp. (NE -6.7%) and Ocean Rig UDW (ORIG-6.2%); Ensco (ESV -5.2%), Pacific Drilling (PACD -5.2%) and Rowan (RDC -6.3%) are maintained with Equal Weight ratings.

     

    • Glencore (OTCPK:GLCNFOTCPK:GLNCY) says it will incur a $790M impairment on its oil assets in Chad and cut capital spending this year to preserve cash, as it reports mixed production results for H1.
    • The company paid ~$1.35B, a 61% premium, for Caracal Energy in Chad in April 2014, but now plans to take the writedown after significantly reducing the number of drilling rigs in the country and changing the capital budget of its operations there.
    • Glencore says it is cutting its full-year overall spending estimate to $6B from an earlier outlook of $6.5B-$6.8B, as the slump in commodity prices has forced global miners to cut costs and rein in spending.
    • Glencore, which has the biggest exposure to copper of the large diversified miners, says its own sourced copper production fell 3% Y/Y to 730.9K metric tons in H1 due to lower output in South America.
    • H1 zinc output rose 12% to 730.3K metric tons, mainly due to the ramp-up of expansion projects in Australia, and coal production fell 4% to 68.7M tons mostly due to market-driven production cutbacks.
    • In its full-year forecast, copper output is estimated to be little changed at as much as 1.55M metric tons, while zinc output should gain to up to 1.57M and coal production will fall to as low as 135M tons from 146M tons last year.

     

    • Demand for gold fell to its lowest in six years in the second quarter, in a further sign the world's largest buyers, China and India, are staying away from the precious metal.
    • According to the World Gold Council, overall demand totaled 915 tonnes, a 12% drop from the same period last year.
    • Prices saw further declines due to a strong U.S. dollar and expectations for a Fed rate increase, failing to draw any direction from the uncertainty in Greece and other financial crises.
    • Gold -0.2% to $1121.50 an ounce, after trading between $1200-$1230 during most of Q2.
    • July Import/Export Prices: Import prices -0.9% M/M vs. -1.1% consensus and -0.1% prior (revised).
    • Export prices -0.2% M/M vs. consensus of -0.3% and -0.3% prior.
    • Iron ore shipments to China have been disrupted after yesterday's deadly explosions at Tianjin’s port – the world's 10th largest – caused authorities to restrict vessels calling at the facility.
    • Mills in China are the world’s largest buyers of iron ore and the blasts, which have killed at least 44 people, will prompt shippers, traders and users to tap stockpiles and seek alternative routes.
    • BHP Billiton (NYSE:BHP) says its iron ore operations at the port have been disrupted but that there was no damage to iron ore discharging berths; BHP does not own or operate any iron ore berths at Tianjin, but the port does receive its shipments along with those of other iron ore miners.
    • Fortescue Metals (OTCPK:FSUMF) also says its iron ore operations at the port have been affected, while Rio Tinto (NYSE:RIO) has not provided details of any potential damage.
    • Also, Chevron (NYSE:CVX) says it suspended operations at a nearby lubricants facility but that the plant did not sustain immediate visible damage.
    • Iron ore futures in China jumped nearly 4% to their highest in more than five weeks.
    • Tianjin handled 25M tons of iron ore imports in H1 of this year, or 5.5% of China’s total, and shipped out ~30% of the country’s steel exports in the period.

  26. QC-have a great trip!


  27. Hedge/QC – I'm happy with our mix in the STP (Jan SQQQ and TZA spreads, Dec SDS calls).  I wouldn't want to be too aggressive as it's just as likely that another round of massive QE is dropped on the markets as it is that we collapse.  If not for NLFX and SCO, the STP would be up over 200% at this point – that's a good sign that the hedges have been working well!  

    Commodities/Pstas – We'll see what happens when the winter storms blow through.  El Nino conditions can cause hurricanes and tornadoes all over the place.  As pirate notes, it's already causing unusually good conditions for this year's crop but that can snap the other way very fast.  

    Persied/Pirate – I love that stuff!  


  28. El Nino here in CA is now the hope for putting in a dent in the drought. 


  29. VLO has been braking tops  since last month…..Agree that oil is boosting a bit the operative margin  but  is coming from $65 to $71 in  a few days.


  30. OIl / commodities / ag – I like the idea of bottom feeding around here but for long term growth (my tendency to try to time short term moves aside). If you are putting together a longterm or retirement portfolio together with good solid dividend paying growth it would be very hard to not like XOP (and associated stocks like RIG), XLEOIH etc down here. DBA perhaps though they are a futures-backed instrument not actual "food" but there's VEGI, a thinly traded global food fund (that bounces between 25 and 28 pretty regularly)


  31. Phil – Is the new Seeking Alpha 5% Monthly Gains service included for Premium Members or is there a separate subscription charge?  If included, how do I login?  Should you add a link at the top of this page? 


  32. Last couple days have been good to cherry pick.  Got some DIS yesterday at 105.95 and bought some IMAX today at 34.90.  Bought AAPL a little early last week at 114 but it turned being down a little didn't last long.


  33. Waiting to see if TSLA can go a little higher so I can write the calls at 255 for next week.


  34. Rustle-mighty brave to even think of touching tsla. I've been trying to get back into aapl, but this market is so manipulated re it was buybacks that pulled the market back up yesterday, that I wonder how long they can keep pulling the rabbit out of the hat to forestall this long overdue correction. All they have to do is keep buying the top 10 stocks and then pull the rug out whenever they decide & the long buyers get shafted big time..


  35. pirate/tsla

    I think being on the short side of TSLA at 255 for next week after this bs bounce on diluting shares, who cares if Musk is buying in with a pittance of his worth in which he made more than that back already for the bounce in the stock, is not that brave.  Not in it yet though, want over 2 for the calls, will need stock to move up another buck minimum.


  36.  Phil

     TZA Sept 10/12 BCS as a hedge correct?

    Thanks


  37. HMY – Phil,

    I've gotten crushed on my position, so is it worth throwing a few more $$'s at them at these levels or is BK on the horizon?  I feel ABX will survive so maybe better to allocate possible upside to them. TIA.


  38. HERO:  Hercules Offshore files for bankruptcy

    Sad story. Made  good profits off this stock over the years. Glad I never got back in when it looked cheap. 


  39. NFLX making a big move today because T-Mobile is doing a deal with NFLX to give their service away for free for one year.  Think most of the move is catching shorts today.  When a deal like that is made now, I wonder what the overlap of current NFLX customers that will cancel their service because they are getting a year for free is.  Basically, I'm assuming the net subs they acquire will not be that many.


  40. VLO/Advill – Tempting but too scary to short, which is a good attitude that has saved us many losses since they popped $60 in Feb.

    Actually, we are kind of short in our target ($63.75) in the Butterfly Portfolio but RAWHIDE!  

    5% Portfolio/Grant – There is NOTHING that appears in SA that doesn't come out of a PSW post or this chat room.  If you are a Premium Member here, there is nothing you will miss.  The "posts" on SA are simply selected comments from our chat room (because what constitutes a post on SA is a very low bar). 

    IMAX/Rustle – I like that one!  

    Unless Star Wars is a big disappointment, this could be a massive next few months for IMAX.  Unfortunately, they are affected by China, so things can bet worse before they get better.  Despite the huge growth, only about 10% of their screens are in China.  

    IMAX CEO to Cramer: China is opportunity, not risk

    IMAX reported a box office revenue increase of 58% year-over-year to $343 million and quarterly revenue up 35% year-over-year to $107.2 million. In addition to these records, the company saw global per screen average rise to $415,000, which was a 41% domestic increase and 33% international increase. The company had not seen per screen revenue averages this high since Avatar was released in 2010. Adjusted EPS increased 60% year-over-year to $0.40 and GAAP EPS increased 79% to $0.34. During the second quarter, the company received commitments for 30 new theaters giving the company a total backlog of 391 theaters. It installed 35 new IMAX theaters, which gives the company a total of 976 IMAX theaters world-wide, up from 868 the previous year. In addition, the company increased its annual guidance for theater installations to 120 due to its ability to outpace initial projections at the start of the year and would essentially match 2014 theater installations of 121. In total IMAX should reach over 1050 theaters by the end of the year, an increase of 12% over 2014. On the conference call, the CEO stated theaters were eager and working hard to get these new IMAX's open before the strong fourth quarter lineup in 2015 (i.e. Star Wars)

    Unfortunately, they spend a lot of money building theaters and earnings, though growing fast, are only moving from 0.75 last year to $1.16 this year and $1.35 next year, which makes it tough to justify a $35 price (forward p/e 26).  That's why I haven't made the call yet – I'm hoping they hit $30 so we can sell $30 puts and take a $25/30 bull call spread.  Probably won't happen, but that's a price I'd absolutely want in at.  

    TSLA/Rustle – Well IMAX is a real bargain compared to TSLA,.  I was in the Garden State Mall yesterday and they had a TSLA store with ONE car, not even the SUV or a mock-up of the SUV, just the regular model S that they say is $70,000, unless you want it to work – then it's $95-135.  They are holding 65% residual value on a 3-year lease and that is what will ultimately undo the company as there is no way a 3-year old electric car with a depleted $40,000 battery pack is worth $58,500 out of the $90,000 you paid for it.   Multiply those losses ($10K per vehicle is generous) by the number of vehicles delivered under lease (50,000 ish so far) and that's $500M in losses that will have to be realized at some point.  

    The only thing saving TSLA for now is that they only delivered 2,700 cars in 2012 and almost all of them were cash sales and probably most of 2013 was too, so it doesn't really hit the fan for them until 2017, when the 2014 leased cars begin rolling over.  

    Musk says he will buy about $20M worth of shares.  That's out of $13.1Bn (per Forbes) or 0.15% of his money and $10Bn of that money is his TSLA stock!  So of course he'll spend $20M to "set an example" buying TSLA, if his little purchase pushes his 40M shares up just 0.50 – he's even on the transaction!  

    And, of course, the real point is to get other suckers to give you $470M so TSLA can lose that because the first $5Bn they've spent haven't netted a dime in proifts so far.  What a scam!  

    TZA/QC – That's very aggressive since you have no real time to recover if it goes against you.  

    The TZA Sept $10s are 0.87 and the $12s are 0.36, so net 0.51 means you are not paying premium and the net delta is 0.34 though, so you will lose a lot on a 10% move down in TZA (3% on RUT).  On the other hand, the Oct $10s are $1.15 and you can sell the Sept $11s for 0.51 and that's net 0.65 and, if you buy 1.5x the Oct $10s, you spend, for example, $3,450 less 20 of the Sept $11s at $1,020 for net $2,430 and the net delta is 1.5x 0.63 (94.5) – (0.42) = 0.415, so almost the same as the Sept net (0.34) but with a lot more flexibility (and half the Theta decay) since you can sell more calls or roll the short calls, etc.  

    Another terrible auction of 30-year notes.  Yesterday's 10-year had no demand either.  2.88% today with very low demand.  

    The dip is already baked in from yesterday's auction but this should drive us back to the support line at about $122 on TLT. 

    ABX/Jeddah – I don't believe they are going BK but you never know.  We've been holding on in the LTP with 20 short 2017 $15 puts and 25 long $5 calls.  With the stock at $8, it's not too promising – looking but it is 18 months away and I don't see the point to doing anything until we can see the 2018 options.  If I had the 2016 $15 puts ($7.30) I could roll them to 2x the 2017 $10 puts ($3.50) and sell the 2017 $8 calls ($2.05) and roll my 2016 $5s ($3.20) to the 2017 $3s ($5) without taking any money out of my pocket.  Since that sounds kind of attractive – I'd rather wait for the 2018s to come out than take a loss just because I'm impatient or don't like staring at a red entry in my portfolio. 

    Barrick ABX

    Gold is down $600 an ounce but if gold costs ABX, HMY, etc $1,000 to pull out of the ground, then gold is down 6/7ths (85%) of their operating profits.  Of course their stock looks like crap!  If you believe gold will keep falling below the cost of pulling it out of the ground, then get out.  

    It actually can because part of that cost is the cost of acquiring the mines at $250/oz and if gold companies go BK and people can buy mines for $25/oz, they can then undersell ABX by $225/oz, which can then force ABX to go BK and then their gold goes on the market at $25/oz and so on…  It's not happening yet, of course, but that's the worst-case for the miners.  

    HERO/Pstas – Wow, that's some collapse.  


  41. ok I recommend Phil Davis as Chairman of the SEC

    Yikes!  I only want that job if we declare monetary Marshall law.  


  42. I should add, on behalf of all the members here that you can only take the job if you keep PSW running!! That's a lot on one plate! We need you here too keep us out of trouble :)  


  43. Roomba’ maker, iRobot, gets green light for robot lawn mower

    From the makers of hoover robot 'Roomba', iRobot Corporation, has now been accepted by U.S. government regulators, Federal Communications Commission (FCC), to start working on and selling a "robotic lawn mower" (RLM).

    The iRobot RLM will depend on stakes fitted into the ground – complete with transmitters – to help it move around outdoors. The stakes' transmitters will communicate with one another and then the lawn mower, to help track a route around the garden.

    http://www.cnbc.com/2015/08/13/roomba-maker-irobot-corporation-gets-green-light-for-robot-lawn-mower.html

     


  44. I want a robot that cleans and cooks! (and pushes my lawnmower)


  45. Don't worry Jeff, it would be a condition of any Government job I take that I can still play the markets and comment during the day.  Might be a bit of a conflict for an SEC Chair, of course…  blush

    NFLX/Rustle – Doesn't matter as long as it sounds good.  

    I'm actually surprised TMobile has so many subscribers – they suck around here:

    They got super-aggressive with the pricing and this deal with NFLX is just another way to go.  

    Roomba’ maker, iRobot, gets green light for robot lawn mower

    From the makers of hoover robot 'Roomba', iRobot Corporation, has now been accepted by U.S. government regulators, Federal Communications Commission (FCC), to start working on and selling a "robotic lawn mower" (RLM).

    The iRobot RLM will depend on stakes fitted into the ground – complete with transmitters – to help it move around outdoors. The stakes' transmitters will communicate with one another and then the lawn mower, to help track a route around the garden.

    IRBT/Jbur – Wow, that is, in every possible sense of the phrase, an accident waiting to happen!  Still, it's the catalyst we wanted to get back in – should have had faith in the $30 line:

    In our LTP, we already have 10 short 2017 $30 puts at $5 and 20 long 2017 $28 calls at $7 and you can still get into that spread for the same net $9,000 we started with (net $4.50 per call means we make all the money over $32.50 x 2,000 shares).  As a new trade idea for our 5% Portfolio, we can:

    • Buy 10 Dec $27 calls for $5
    • Sell 10 Dec $32 calls for $2.20

     That's net $2.80 on the $5 spread so 78% gain if IRBT holds $32 through Dec option expirations (18th).  The trade will cost $2,800 and return $5,000 with a break-even at $29.80, which is $1.65 (5%) below the current price.  We'll look to stop out of the trade if IRBT fails to hold $30 – but I have faith in this one!  


  46. Sorry, math error in that IRBT trade – all fixed if you refresh page.  


  47. Wow, check out /NG!  

    Oil closing right at $42, down 3% for the day, much worse than Brent (-1.5%) 

    The Dollar didn't do it – it's been flat for the day(ish).  

    What all these insane up and down moves do is get people to quit hedging because you get burned too much by multiple black swans.   Once you take out the hedges, you can totally destroy the markets and there will be no buyers to step in because the people who would have made cash on the way down end up just staring at the sidelines, wishing they still had their shorts.  

    With 90 mins to go, there's been no improvement on our bounce lines with these lame moves.  


  48. This is interesting for PLUG:  University team designs 1st powered unmanned aerial vehicle in UAE

    SHACK options open tomorrow:

    Speaking of VLO, TSO got whacked for the 5% Rule today:

    I've never felt TSO was as good as VLO but it is sort of tempting to play VLO short on that move.  The Aug $72 puts at $2.50 have just 0.30 in premium….


  49. From Bloomberg, Aug 12, 2015, 7:20:01 PM
      Aerial photograph of oil storage tanks in Cushing, Oklahoma.

    Oil sank to a six-year low as rising OPEC output and China’s devaluation of the yuan increased concern that a global surplus will worsen.


  50. From Bloomberg, Aug 13, 2015, 1:16:54 PM

    The biggest selloff in China’s yuan in two decades inevitably evoked the memory of the Asian crisis during the late 1990s.


  51. From Bloomberg, Aug 13, 2015, 2:00:00 PM

    Commercial and residential buildings stand shrouded in haze in Shanghai, China, on April 18.

    Air pollution is killing an average of 4,000 people a day in China, according to researchers who cited coal-burning as the likely principal cause.


  52. From Bloomberg, Aug 13, 2015, 11:47:36 AM

    Mr. Snuffleupagus, left, Big Bird and actor Taraji P. Henson during the “Sesame Street Promo” skit on April 11, 2015 on an episode of “Saturday Night Live.”

    Time Warner Inc.’s HBO appointed Oscar the Grouch and Elmo to lead its children’s programming, part of an effort by the premium cable network to expand its audience at a time when fewer young people are watching conventional TV.


  53. From Bloomberg, Aug 13, 2015, 8:46:10 AM
     Aug. 13 — Greece saw unexpected economic growth in the second quarter as GDP rose 0.8 percent ahead of the standoff with creditors that saw capital controls imposed in the country. Bloomberg’s Hans Nichols reports on “Bloomberg Surveillance.”

    European institutions voiced “serious concerns” about Greece’s ability to repay its debt as Prime Minister Alexis Tsipras prepared for a renewed showdown with party rebels in parliament to try to pass a third bailout.


  54. From Bloomberg, Aug 13, 2015, 9:25:16 AM
      A Shake Shack burger restaurant in Moscow.

    Shake Shack Inc., the New York-based burger chain founded by restaurateur Danny Meyer, fell the most in a month after pricing a secondary stock offering at $60 a share, below Wednesday’s close.


  55. From Bloomberg, Aug 13, 2015, 8:30:01 AM
     Aug. 13 — Sales at U.S. retailers rose in July on growing demand for everything from cars to clothing, and a decline the previous month was wiped away, signaling consumers are propelling growth in the world’s largest economy. Bloomberg’s Julie Hyman reports on “Market Makers.”

    Sales at U.S. retailers rose in July on growing demand for everything from cars to clothing, and a decline the previous month was wiped away, signaling consumers are propelling growth in the world’s largest economy.


  56. From Bloomberg, Aug 13, 2015, 5:01:57 AM
      Luxury Consumer Product Manufacture At Bang & Olufsen A/S

    Bang & Olufsen A/S dropped the most in more than a year after the Danish maker of high-end televisions and Hi-Fi components reported a wider loss as it incurred costs tied to a retreat from car-stereo systems.


  57. From Bloomberg, Aug 12, 2015, 8:10:42 AM

    Not just a metaphor.

    Congress’s most recent fight over highway spending seemed awfully familiar. Once again, authorized cash for transportation projects was dwindling. Once again, no one could agree on a proper extension. And once again, Congress ended up passing a stopgap bill — the 34th in six years, in fact.


  58. From Bloomberg, Aug 13, 2015, 2:19:58 PM
      People’s Bank of China officials have called on the International Monetary Fund to add the yuan to its basket of reserve currencies in a review later this year. Photographer: Brent Lewin/Bloomberg

    Oanda, a retail foreign-exchange broker, increased its maximum trading leverage ratios to 100:1 from 50:1 for customers in Europe and Asia, excluding Japan.


  59. Phil

     TZA Thanks 


  60. From Bloomberg, Aug 13, 2015, 2:04:09 PM
      A Tesla Motors Inc. Model S electric vehicle at the company’s showroom in the Repulse Bay area in Hong Kong, China, on May 24, 2015.

    Tesla Motors Inc. annoyed some owners of its Model S cars with an e-mail requesting that they stop hogging the free fast-charging stations the electric-vehicle maker provides to ease long-distance travel.


  61. From Bloomberg, Aug 13, 2015, 1:40:51 PM

    The last time investors in the $11 trillion
    corporate-bond market were so risk-averse, it was 2013 and the Federal Reserve’s move to unwind its crisis-era stimulus had triggered what became known as the “taper tantrum.”


  62. From Bloomberg, Aug 13, 2015, 12:30:04 PM

    Cord-cutting is gaining steam.


  63. From Bloomberg, Aug 13, 2015, 11:55:19 AM
      Spreads on Junk Energy Bonds are at Distressed Levels

    Most junk-bond investors can’t sell their energy-related holdings fast enough. Then there’s Matt Eagan.


  64. From Bloomberg, Aug 13, 2015, 11:08:15 AM

    The two biggest unions at South African gold-mining companies said wage negotiations have broken down, bringing the industry closer to a strike.


  65. From Bloomberg, Aug 13, 2015, 11:00:00 AM

    Increases in auto loan debt and credit card balances offset a decline in mortgage debt to leave total borrowings of U.S. households roughly unchanged in the second quarter, the Federal Reserve Bank of New York said Tuesday.


  66. Phil / SDS – thanks, i'll let it sit a bit,  It's more of  a hedge… on my open positions…. with a bit of a bet on the downside … will look to add or roll if SPX gets to 2110.

     

    IRBT – can't get the 27's at 5…. but the 32 are looking ok…. maybe on a dip in the am tomorrow.


  67. Phil / AAPL – with a new announcement in Sept + a possible change to apple TV in Sept or OCT it looks like this may be forming a support at the 110 line – do you have a view on this?


  68. batman/AAPL

    AAPL relies on China for sales more and more.  It wouldn't surprise me to see AAPL fall to that $110 line or even $100 (especially if any slow-down in sales from China occurs). I know they have 200 bn in cash, but this reminds me of the last time we thought APPL had "sold-off".  We bought early and watched I it drop another 20-30% more.  I'd be cautious until there is more clarity and direction, specifically, with respect to China. 


  69. Phil, What do you think of the IBM Jan 2016 $155/$160 BCS for $2.33?


  70. CSCO doing the fade late in the day. All hail rule #1!


  71. You're welcome, QC. 

    Indexes topping out again.

    IRBT/Batman – It's more important what the net of the spread is.  Be careful not to sell the short calls first and then you end up naked short – a little tricky.  Might work though as the stock is also topping out here ($31.50).

    AAPL/Batman – I think $100 is the dead bottom so $110 is a good line to buy things at.  I'd just feel better if it were tested ($100) to confirm it.  Also, still expecting AAPL to be attacked by bears at some point.

    And what DC said.  If you are going in early and have tons of cash (as we do in the LTP), that's one thing but even in our LTP, we are very PATIENTLY waiting for things to settle down before going from 1x to 2x.  

    IBM/Sibe – I like IBM here ($155) but I'll like them more at $150 or less when they follow the broad market lower.  That was the whole point of going through the S&P this morning – we decided the selling isn't done yet!  

    CSCO/Deano – I thought that was a bit overdone. 

    Wow, 3:52 already!   And look, we're all red again – what a silly market…


  72. IRBT not fillable so far – have to be patient.  

    Coming in at $5.20/$2.20 but not worth spending +0.20 for (7%). 


  73. Phil – AAPL / IRBT.  I think i'll look to see what it does next time it hits 110 and maybe take a small poke more of a short term play if things line up.   I believe that the positives will override the negatives prior to Oct Announce ( Phone).  however after announcement if there is not a significant beat, with reasonable outlook it will be back lower.  Looks like most analysts are at projecting a 7% YOY grown for next year 9.8  to 10 so 13X to 15X gets you 127 to 150/sh.  This seems very doable.  Even with a china slow down this is in reach.

    The catalysts going forward would be a new larger iPad ( CY Q4) Apple TV ( Q4) and apple watch – new OS ( Q4) and hopefully enabling on board antenna and other features, possibly a new HW in Q2/Q3.  All in all next year may be a volatile year for the stock.  I'm not sure how to plan this.  Perhaps establishing some long calls at the low 100/ 110, then playing short term calls agains them.  I agree w/ DC, this year will be similar to the lost year ( 2013) when the phone had no catalyst, and the bears piled on.  However there is a dividend now, to put a floor under it ( at 70 this becomes a 3% yield) the run up is also not as pronounced…. some air is out of it already.  

     IRBT – did not fill today, but was loosing ground towards the end.  Friday may be good for this fill.  I almost bought the naked call early but chickened out.  Will see what tomorrow holds.


  74. From Bloomberg, Aug 13, 2015, 7:01:00 PM

    Utility and power grid managers in the U.S. are learning that the best way to cut carbon emissions and improve efficiency is the easiest: Just change your lightbulbs.


  75. From Bloomberg, Aug 13, 2015, 9:22:50 PM
      A man checks Chinese yuan bills in Beijing, China.

    The yuan halted a three-day slide after the central bank’s reference rate rose for the first time since China devalued its currency on Tuesday.


  76. From Bloomberg, Aug 13, 2015, 4:14:18 PM

    Goldman Sachs Group Inc. agreed to acquire an online banking unit from General Electric Co. that has about $16 billion of deposits, giving the Wall Street firm access to a cheap source of funding.


  77. From Bloomberg, Aug 13, 2015, 7:14:04 PM

    The yuan stabilized as China’s central bank strengthened its currency’s reference rate for the first time since Tuesday’s devaluation. Asian shares fluctuated, while U.S. oil and industrial metals in London headed for their seventh straight weekly declines.


  78. From Bloomberg, Aug 13, 2015, 10:02:21 PM
      Operators restart the nuclear reactor inside the Kyushu Electric Power Sendai plant in Japan on August 11, 2015. Photographer: Jiji Press/AFP/Getty Images

    Japan restarting its nuclear reactor fleet will keep pressure on depressed liquefied natural gas prices for years as the nation’s electricity utilities, the biggest buyers of the fuel, reduce purchases.


  79. From Bloomberg, Aug 13, 2015, 4:08:25 PM

    U.S. power plants are burning the least amount of coal seasonally in more than a decade, and yet supplies continue to climb.

    Fifteen states led by coal-rich West Virginia asked a federal court to stall Obama administration rules intended to cut the fossil fuel’s use and slow climate change.


  80. From Bloomberg, Aug 13, 2015, 6:00:09 PM
     Best of friends.

    Among the clearest casualties of China’s devaluation is the Bank of Japan. The chances were never high that Governor Haruhiko Kuroda was going to be able to unwind his institution’s aggressive monetary experiment anytime soon. But the odds are now lower than even skeptics would have previously believed.


  81. From Bloomberg, Aug 13, 2015, 9:31:38 PM

    Hon Hai Precision Industry Co. rose after posting a third straight quarter of increasing profit, as the Apple Inc. supplier was able to cut costs to offset slowing demand for smartphones.


  82. From Bloomberg, Aug 13, 2015, 8:17:11 PM

    Oil headed for the longest run of weekly declines since January amid signs the global glut that’s driven prices to the lowest in six years will be prolonged.


  83. From Bloomberg, Aug 13, 2015, 5:36:24 PM

    Republican presidential candidate Jeb Bush says he doesn’t want to make blanket statement on whether he would keep or repeal President Obama’s executive order banning so-called enhanced interrogation techniques by the CIA, AP reports.


  84. From Bloomberg, Aug 13, 2015, 6:12:46 PM

    Jeb Bush defended some of his brother’s Iraq war decisions as president while also seeking to pivot the conversation toward warmer feelings some Americans had for George W. Bush in the aftermath of the terror attacks of Sept. 11.


  85. Phil / MTW spinoff.

     It looks like the sum of parts of this business is about 12 for the restaurant business ( maybe 14 to 16 in a buyout) and the crane business is about 8 to 10.  so post split 20 to 21, and maybe 20 to 26 with a spinoff.  If there is a split, you'd probably get a non tax event that would give you x shares of the restaurant business and y shares of the crane business – so, you end up w/ crane at 8 / sh, and restaurant at 12 / sh.  Then if one of the spinoff is purchased or re valued ( multiple ) you end up with appreciation.  But i'm not clear on what would happen on the options side – say w/ the puts ( 2017 15 puts) or the 2017 18 calls.  Can you run through this please? 

    thanks. 


  86. From Bloomberg, Aug 14, 2015, 5:05:37 AM

    Portugal’s economy grew less than forecast in the three months through June.


  87. From Bloomberg, Aug 14, 2015, 5:03:19 AM

    Yuan positions at China’s central bank and financial institutions fell by the most on record in July, a sign capital outflows picked up and the central bank stepped up intervention to support the yuan.


  88. From Bloomberg, Aug 14, 2015, 5:00:00 AM

    New Jersey rail commuters have at least a 10-year wait for a faster trip under the Hudson River to Manhattan. Ferries could do much of the job right now.


  89. From Bloomberg, Aug 14, 2015, 5:00:00 AM

    New Jersey rail commuters have at least a 10-year wait for a faster trip under the Hudson River to Manhattan. Ferries could do much of the job right now.


  90. From Bloomberg, Aug 14, 2015, 4:42:45 AM

    Hong Kong’s economy expanded faster than analysts forecast in the second quarter as rising wages and low joblessness fueled spending.


  91. From Bloomberg, Aug 14, 2015, 4:41:28 AM

    Japan’s environment minister said he won’t support a new coal power station planned for central Japan, the latest push by the ministry to rein in coal projects to control the nation’s greenhouse gas emissions.


  92. From Bloomberg, Aug 14, 2015, 4:00:00 AM
     

    The Italian economy grew less than forecast in the three months through June, as Premier Matteo Renzi seeks to reform the country’s debt-ridden public finances.


  93. From Bloomberg, Aug 14, 2015, 3:49:22 AM

    China, the world’s biggest bullion consumer, disclosed that it increased its gold reserves by 1.1 percent in July in a drive for more transparency as it pushes for the yuan’s inclusion in the IMF’s currency basket.


  94. From Bloomberg, Aug 14, 2015, 3:47:34 AM

    German government bonds were little changed Friday, holding a weekly gain, after the euro area’s economy unexpectedly grew at a slower pace in the second quarter.


  95. From Bloomberg, Aug 14, 2015, 3:24:56 AM

    Hungary’s economy grew less than forecast by analysts as a drop in agricultural output pushed the pace of expansion below 3 percent for the first time in seven quarters.


  96. From Bloomberg, Aug 14, 2015, 3:00:00 AM

    Romania’s economic expansion unexpectedly slowed in the second quarter as stronger consumption failed to offset a slowdown in industry and exports.


  97. From Bloomberg, Aug 14, 2015, 3:18:17 AM

    India’s benchmark gauge of demand for equity options fell the most in two weeks amid speculation the central bank will lower interest rates.


  98. From Bloomberg, Aug 14, 2015, 2:57:36 AM
      Operations inside the Rolls-Royce aerospace factory in Dahlewitz, Germany. German gross domestic product rose 0.4 percent, compared with an estimate of 0.5 percent in a Bloomberg survey.

    Euro-area economic growth unexpectedly slowed last quarter as expansion in its three largest economies fell short of estimates, highlighting the fragility of the recovery amid uncertainty surrounding the global outlook.


  99. From Bloomberg, Aug 14, 2015, 2:34:50 AM

    India’s wholesale prices dropped more than estimated, in line with retail inflation, adding pressure on central bank Governor Raghuram Rajan to cut interest rates.


  100. From Bloomberg, Aug 14, 2015, 2:05:22 AM
      Germany’s s role as Europe’s largest exporter leaves it exposed to stumbles in the global economy.

    Germany’s economy expanded less than forecast last quarter as turmoil in Greece and a slowdown in China sapped global demand.


  101. From Bloomberg, Aug 14, 2015, 1:07:44 AM

    Iron ore headed for its longest run of weekly increases since July last year after deadly explosions at the northern Chinese port of Tianjin disrupted shipments to the world’s largest buyer.


  102. From Bloomberg, Aug 14, 2015, 2:10:35 AM

    Firemen are seen near the spot of the Tianjin explosions in Tianjin, China on August 13, 2015. Photographer: Huang Liang/Beijing Youth Daily/ChinaFotoPress via Getty Images

    Chinese officials provided scant detail on the cause of massive explosions at a hazardous-chemicals warehouse in northern China’s Tianjin port, more than a day after blasts killed at least 50 people and injured more than 700.


  103. From Bloomberg, Aug 14, 2015, 1:06:21 AM

    Emerging-nation stocks headed for a fourth weekly decline, led by technology shares, as investors weighed the impact of the yuan devaluation that’s roiled markets. Malaysia’s ringgit tumbled to the weakest since 1998.


  104. From Bloomberg, Aug 14, 2015, 3:00:16 AM

    August 14 — Greek lawmakers approved a bailout package that may unlock as much as 86 billion euros ($96 billion) and help the nation avoid a default next week when it has to make a payment to the European Central Bank. After an all-night debate in Athens, Prime Minister Alexis Tsipras had to rely on opposition votes to secure parliament’s backing for a deal that includes sweeping economic reforms and budget cuts mandated by Greece’s creditor institutions.

    Greek legislators approved a bailout package that may unlock as much as 86 billion euros ($96 billion) and help the nation avoid a default next week when it has to make a payment to the European Central Bank.


  105. From Bloomberg, Aug 14, 2015, 1:30:46 AM
     Aug. 14 — ABN AMRO Private Banking Chief Investment Officer Didier Duret and Bloomberg Intelligence’s David Powell discuss France’s second-quarter GDP figures and what they mean for the economy and for Europe. They speak with Bloomberg’s Caroline Hyde on “Countdown.”

    France’s economy stagnated in the second quarter as European Central Bank stimulus and lower oil prices failed to revive investment and consumer spending.


  106. From Bloomberg, Aug 14, 2015, 12:01:03 AM
      An employee inspects a Volkswagen automobile at a Volkswagen AG showroom in Berlin, Germany.

    Thousands of cars from a host of manufacturers have spent years at risk of electronic car-hacking, according to expert research that Volkswagen has spent two years trying to suppress in the courts.


  107. From Bloomberg, Aug 13, 2015, 5:01:19 PM

    Apple Inc. customers waiting for the company to revolutionize live television as it did for music and phone service will have to keep waiting, at least until next year.


  108. From Bloomberg, Aug 14, 2015, 12:01:00 AM
      An Etsy necklace hangs on a mannequin in the craft lab at the company’s headquarters in Brooklyn.

    Artisan goods marketplace Etsy Inc., which promised to be a beacon for transparency as a public company, recently implemented a strategy that shrouds its offshore tax-cutting arrangements in secrecy.


  109. From Bloomberg, Aug 14, 2015, 12:00:14 AM

    Puerto Rico is approaching an inflection point that may prove to be more challenging than the commonwealth’s decision this month to skip a bond payment for the first time.


  110. From Bloomberg, Aug 13, 2015, 11:01:00 PM

    As allegations of corruption and incompetence swamp Brazil’s government, and plummeting commodity prices sap its economy, hundreds of thousands of angry citizens are expected to descend on central squares across the country on Sunday, posing a key test for President Dilma Rousseff.


  111. From Bloomberg, Aug 13, 2015, 5:02:38 PM

    HSBC Holdings Plc, Barclays Plc and three other banks agreed to settle U.S. investor lawsuits tied to the currency-rigging scandal, bringing the total so far to more than $2 billion across nine firms.


  112. From Bloomberg, Aug 13, 2015, 10:00:59 PM

    Malaysia’s ringgit headed for the biggest drop since 1998, extending an eighth week of declines as falling oil prices and political turmoil spur capital outflows.


  113. From Bloomberg, Aug 14, 2015, 2:00:05 AM
     Enjoy it while it lasts.

    Britain’s nightclubs are dying. Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers lobby group, says there are just 1,733 operating in the U.K., down from 3,144 a decade ago.


  114. From Bloomberg, Aug 14, 2015, 4:15:14 AM

    Turkey’s central bank lowered the cost of dollar borrowing for a fourth time this year, seeking to halt the lira’s slide after coalition talks on the formation of a new government broke down and sent financial markets tumbling.


  115. From Bloomberg, Aug 14, 2015, 3:05:45 AM

    The Czech economy unexpectedly accelerated as stronger domestic demand and improving exports sustained the nation’s seventh straight quarterly gain.


  116. From Bloomberg, Aug 14, 2015, 5:00:03 AM
     

    “Ripping up the Iran deal is a powerful statement,” cried Texas Senator Ted Cruz to conservatives in Atlanta last weekend. “If you vote for Hillary [Clinton], you are voting for Iran to have nuclear weapons.”


  117. Don’t Be Fooled By The Political Game: The Illusion Of Freedom In America

    Don't Be Fooled By The Political Game: The Illusion Of Freedom In America


    zerohedge.com / Tyler Durden

    Submitted by John Whitehead via The Rutherford Institute ,“The shaping of the will of Congress and the choosing of the American president has become a p…


  118. China’s Renminbi Devaluation May Initiate New Phase in Global Currency War

    China’s Renminbi Devaluation May Initiate New Phase in Global Currency War


    nytimes.com / PETER EAVIS

    For years, China looked like the principled noncombatant. As other countries, seeking to secure an economic advantage, let the value of their currencies…


  119. Tianjin Explosions Point to Risk of Storing Toxic Chemicals

    Tianjin Explosions Point to Risk of Storing Toxic Chemicals


    nytimes.com / ANDREW JACOBS

    TIANJIN, China — This bustling port city about a 90-minute drive from the Chinese capital confronted scenes of death and devastation on Thursday — huge …


  120. Eurozone Economic Growth Slows


    wsj.com / Nina Adam, William Horobin

    The eurozone’s economic recovery lost momentum in the second quarter, underscoring the deep-rooted fragility in the region as a cooling Chinese economy …


  121. Reading the renminbi runes

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    ft.com / John Authers

    “Whatever did he mean by that?” That, at least as far as folklore has it, is how the 19th century diplomat Metternich reacted to the death …


  122. Ten investing mistakes – and how to avoid them.

    Ten investing mistakes - and how to avoid them.


    charles-stanley.co.uk

    By: Rob Morgan Below I identify ten common investment mistakes to look out for – and how to combat them. 1. Falling in love with an investment You might…


  123. German GDP data dash expectations of stronger growth

    German GDP data dash expectations of stronger growth


    ft.com / Claire Jones in Frankfurt

    Germany’s economy expanded by 0.4 per cent between the first and second quarters of this year, with the latest fears over the global …


  124. Euro zone economy sputters as China risks loom


    reuters.com

    BERLIN (Reuters) – Germany enjoyed robust if unspectacular growth in the second quarter while the French economy stagnated, leaving policymakers looking…


  125. Back to Fundamentals in Emerging Markets


    project-syndicate.org / Dani Rodrik

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  126. Currency-rigging lawsuit settlements rise past $2 billion – lawyer


    reuters.com

    NEW YORK (Reuters) – Investors have recovered more than $2 billion (1.28 billion pounds) in settlements with nine banks over claims of price-rigging in …


  127. One big question: Will stocks lose $10 trillion in 2015 or in 2016?


    marketwatch.com / Paul B. Farrell

    Here we go again. Same cycle all over again. Another bubble, another blowout, another crash dead ahead, another massive $10 trillion loss for American i…


  128. Windows 10 Automatic Updates Take Dangerous New Direction

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    forbes.com / Gordon Kelly

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  129. Eurozone economies miss GDP forecasts: a chart – fastFT: Market-moving news and views, 24 hours a day

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    ft.com

    There has been a flurry of disappointing GDP releases from eurozone nations so far on Friday, ahead of the consolidated figure for the …


  130. Tiny balls of fire

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    economist.com

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  131. About One in Four Americans Satisfied With U.S. in August

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    gallup.com / Gallup, Inc.

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  132. The World’s Credit Investors Are Getting More and More Skittish

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  133. Pope Francis goes to Washington: Why congressional GOPers are about to get a papal smackdown

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    salon.com / Patricia Miller

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  134. The Eurozone’s False Recovery


    project-syndicate.org / Philippe Legrain

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  135. Fox News Backs Trump Against Megyn Kelly In Perfect Ratings Victory

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    forbes.com / Nomi Prins

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  136. Is China’s Economy on the Verge of a Great Crash?

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    bloomberg.com

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  137. Investors have been dumping solar shares based on a misconception about energy

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    businessinsider.com / Nichola Groom, Reuters

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  138. Holger Zschaepitz on Twitter

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    twitter.com

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  139. Donald Trump’s biggest crime is his honesty: How he exposes the sickening rot at the core of the GOP

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    salon.com / Patrick L. Smith

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  140. Global population forecasts

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    economist.com

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  141. Eureka! A Valuation-Based Asset Allocation Strategy that Might Work

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    valuewalk.com / Posted By: Alpha Architect

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  142. Fractures Form Inside Russia’s Central Bank as Recession Deepens

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    bloomberg.com / Evgenia Pismennaya Ilya Arkhipov

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  143. Get Ready for the Robot Explosion

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    bloombergview.com / Mark Buchanan

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  144. US Military Uses IMF and World Bank to Launder 85% of Its Black Budget

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    globalresearch.ca / Jake Anderson

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  145. This might be the biggest shark you’ve ever seen [video]

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    alltop.com

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  146. Dangerous chemicals at Tianjin blast site were stored just 600 metres from residential complex | Hong Kong Free Press

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    hongkongfp.com / Vivienne Zeng

    A residential complex badly damaged in the Tianjin explosions was located just 600 metres from a chemical storage warehouse at the centre of Wednesday’s…


  147. The Fed Is on Thinner Ice Than It Realizes, and It May Be Setting Us Up for Recession

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    bloomberg.com / Timothy A Duy

    Have members of the Federal Reserve already engineered a soft landing? And are they even asking that question? The thought came to me while reading Barr…


  148. Good morning!  

    Well, after lots of reading, no change in my attitude into the weekend.  From the look of Europe (down 0.6%) and our Futures (down 0.25%), it doesn't look like trader's attitudes have improved much either.  

    Gotta take a stab at /RB long at $1.675 – just in case it bounces but tight stop below $1.67.

    Dollar not even up, down in fact at 96.15

    Oil barely holding $42 but /RB is more fun for a long.  

    Gold back to $1,120 despite a huge effort in the press to talk it down.  



  149. AAPL/Batman – I would be very careful.  iTV is now delayed officially and the intro of the 6 gives them tough comps to live up to and you know "THEY" are ready to pounce on anything that even smells of weakness.  

    MTW/Batman – We'll have to wait and see on the options.  Most likely they will be split up as well.  Meanwhile, there's no official anything so it's all speculation and it's kind of hard to speculate on what effect the speculation would have on speculative options.  

    Big Chart – So now the FALLING 50 dmas on the S&P and the Nasdaq are acting like upside resistance – that's a bearish confirmation on the death crosses! 

    Have you guys noticed how many people have been on TV, including Ritholtz, talking down the death cross?  It is amazing to me how hard "THEY" are trying to keep people invested while "THEY" continue to run their stealth selling programs.  

    Nice pop in /RB already – don't be greedy!  


  150. Phil- thanks for play on /RB  made $400 (wasn't greedy), I sure hesitated a long time before I placed my order (yesterday I lost $1100 to /TF & /NKD thanks to obvious bot action- I read your Houston layover incident about pushing for a recovery and not just walking away with small loss…lesson learned here…I hope).  When the ladder was hopping up and down it reminded me of another lesson about pre-market plays….worried me about entry). But, after such an easy win – I wanted to go again – sell high and ride down - then out. (I scaled in and out). But, was interrupted by repairman appt.

    Also, placed order 5 & 5  on IRBT spread…not filled this morning yet..this will be a learning endeavor so I will watch it closely. Don't have much knowledge about options-yet!

     Initials again…SA  Seeking Alpha, ah ha!  Speaking of SA  I used to read "Phil Davis" there  for about  2 years (I was one of the cheap skates you chided…thanks for the encouragement to join)  and I thought I had learned enough to take you on…..NOT!!!!!  But, I have learned a lot more than you might think…I just can't quite put it all together and my biggest problem is the physical actions to order correctly….and certainly do not know how to track the options…but, I will…..with your help…BIG Thanks here!   coke  p.s. I'll try to make this my only epistle for the day!!!!