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Tuesday Terror – Belgium’s Brussels Bombing Breaks Bulls Backs

BBCThis is not the way we want to be right

There was bound to be something that caused a sell-off.  On Friday, we noted the massively overbought conditions that led us to bumping up our SDS hedges and yesterday morning, we marked off our lines for shorting the Futures at 2,040 on the S&P (/ES), 17,550 on the Dow (/YM) 4,415 on the Nasdaq (/NQ) and 1,100 on the Russell (/TF).  If it wasn't this morning's bombings in Brussels, it would have been something else – the markets were bound to have a pullback after a 10% rally.  

As much as we hate to think about it and discuss it, the possibility of terror attacks is ALWAYS a factor in hedging our portfolios for possible sudden downturns.  These things can happen at any time and believe me, as a New Yorker, I can tell you that things can get very bad, very suddenly.  When 9/11 happened Wall Street was shut down for 3 days and, when it opened, we had gapped down 10% and quickly fell another 10% – can you afford to have that happen to your positions?  

If not, you need to learn how to hedge and THAT is why we ALWAYS have downside protection in our portfolios and that is why, especially when there's a good bull run like last Friday – we spend a little more of our unrealized gains on insurance and THAT is why we like to have plenty of CASH!!! in our portfolios – just in case.   

I'm not a fear-monger and I'm not an alarmist – terrorism is simply a very real fact of our lives and it will happen again.  Already the market's ability to shrug off these incidents is amazing but it's always amazing what people can get used to if it happens often enough.  When I was a kid, we still did duck and cover drills under our desks at school – then we'd go out and play. 

If you did not follow our advice and hedge at the top last week or yesterday, today you'll need to chase something and you'll pay more for the same protection.  Just like any insurance policy – it's cheaper when you don't seem to need it.  No matter how much you think the Central Banks are backstopping your play – there are certain things that are out of their hands.  

In today's attack, so far we know:

  • At least 26 people killed in attacks on Brussels airport and a central metro station
  • Two blasts at Zaventem airport – one probably a suicide bomber, officials say
  • Airport blasts kill 11, wound 81, says Belgian health minister
  • At least 15 people killed and 55 injured in Maelbeek metro station bombing
  • Prime Minister Charles Michel appeals for calm and solidarity
  • The blasts come days after the capture of Salah Abdeslam, the main fugitive in the Paris attacks in November

American Airlines (AAL) may have been one of the check-in counters that were bombed at the airport (they say they were one more over) and their stock is down 3% pre-market.  Travel in Europe will be disrupted for at least a day but no major effects overall.  

Oil (/CL), interestingly, is down, back below $41 this morning as we wait on this week's inventories and Natural Gas (/NG) hit our $1.80 re-entry point overnight, so we're back in that trade but at $2.08 on the July contracts (/NGN6).  The April contract is /NGK6 – that's the one we previously played – now $1.93, down from $2.  I had called the bottom on the April contracts live on TV, two weeks ago at $1.62 – our 10 contract play gained $33,000 in those two weeks with a $1.95 exit.  

That same morning (March 7th), I posted a modification of our Trade of the Year, on the Natural Gas ETF (UNG), saying:

Keep in mind the Natural Gas ETF (UNG) is our Trade of the Year and it's very rare that you are still able to play our trades of the year this deep into the first quarter but you can still make the following trade:

  • Sell 10 UNG 2018 $5 puts for $1 ($1,000) 
  • Buy 20 UNG 2018 $5 calls for $2.10 ($4,200) 
  • Sell 20 UNG 2018 $9 calls for $0.95 ($1,900)

That puts you into the $8,000 spread for a net of $1,300 in cash, so the potential upside is $8,700.  Your obligation, should UNG be below $5 (now $5.90 with Nat gas at $1.62) would be to own 1,000 shares of the ETF for $5,000 PLUS the $1,300 you put in (presumably lost if you don't pull the plug early) so net $6.30 is more than the current price, so this is a very aggressive trade.  The margin on 10 shorts is net $517.49 of ordinary margin so it's a very efficient trade to have in your portfolio with a potential for a better than 4x return on cash+margin.  

I know UNG isn't as sexy as our usual trade of the year picks but there's nothing unsexy about 200% annualized returns, is there?  That's why I've been banging the table on this one.  Once people catch on to the fact that US exports of natural gas have nowhere to go but up – it's not likely we'll see these prices again. 

That trade is already at $1,940, up $640 (49%) on cash and up 123% on margin as this was a very efficiently-designed trade (as trades of the year should be!).  Sadly, this will be the last free post until May as we've hit our new Membership goals and will be closing our Premium Individual Memberships, probably for the summer (Institutional Memberships still available.  

Don't worry, if you can't afford $2 to subscribe to our newletter every day (and the above trade alone paid for the whole year already), I still do plenty of media appearances where I often drop free trade ideas and you can still follow our Options Opportunity Portfolio over at Seeking Alpha – now up 32.1% in month 7 – and that's our worst-performing portfolio!  

We gave away 14 free trade ideas in our morning posts last month (reviewed here) and, as of March 4th, 12 of them were profitable (more so now), so we don't really have anything else to say about our service and performance – you either see the value or you don't and, if not – we'll talk again in May.  

As I write this, the Futures are turning down again.  We already sent a Morning Alert out to our Members reiterating our Futures shorts so all is well as far as our positions are concerned.  Now we'll wait and see how much damage is done but I don't expect to fall below those strong retrace lines (see yesterday's post) we already predicted without an additional downside catalyst.  Keep in mind, this is about the right price for equities – we just got a little too excited after the Fed announcement and now we need to calm down

Watch out for US sentiment reports.  Germany's ZEW sentiment index fell to 50.7 in March, down from 52.3 in Feb and leading economorons were expecting 53 – so they have no clue.  In the broader Eurozone, sentiment fell from 13.6 to 10.6 – that's down 22% in a month folks – and that was BEFORE the bombings. 

Be careful out there!  

 


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  1. Good morning,

    If Brussels brings the futures down we might as well be prepared to  see this more as a monthly routine.

    This was my prediction some 7 month ago. I did comment that the Islamic influx to Europe will only bring chaos, and I was called all sort of names. Here we have the results when refugees enter a country uncontrolled. I think the future will adjust themselves. 


  2. good morning….


  3. yodi – These acts of terrorism will occur around the world, regardless of the "refugees"….

    Duck and Cover – Everyone…. :(


  4. 1020

    I am not sure where you are but here in Europe it is a disaster 


  5. Merkel lost her pence on that one



  6. That was so funny – guy on Fast Money last night saying that a GOP president (Trump) and a GOP congress would get a lot of stuff done next year… Let's recap – how did that go the last time it happened? We started wars, exploded the deficit and ended up with the biggest recession in 75 year. Yup, stuff got done! Idiots!


  7. My family and I live in Southern California, about a two hour drive to San Bernardino where 'terrorists'  (read 'American citizens') lived, worked and killed 14….. Not Scared! :)


  8. Quote of the day:

    "To summarize, strong supply and weak demand contributed to the collapse of oil prices through the first part of this year. Which if either of those fundamentals has changed since then is substantially less clear at this point." (James Hamilton)


  9. Used to "commute" to the Brussels airport twice a month between 2000 and 2001! Actually took a flight from Newark on Friday 9/14/2001 the day they reopened all the airports after 9/11 and they had implemented all kinds of security measures in Brussels then. Flights to the US were in a separate part of the airport. A lot changed since then but it looks like they will change again!


  10. stjean – We're traveling to Europe this Summer for a month to visit family in Italy. Flying into Frankfurt and not going anywhere near Belgium…. :)


  11. Lots of "refugees" in Frankfurt 1020…


  12. stjean – not much different from LAX or JFK… ;)


  13. Good morning!  

    Arrogance of Elites Helps Drive the Trump Phenomenon

    That pretty much sums up the political landscape.  I wish they'd go back and score older politicians – I bet we'd see a big bump in Half Truth and very little false.  Used to be, if you said something that was proven false – that would be the end of your candidacy.  

    This woman is amazing:

    This is huge (like country-changing huge) and now there's no 5:4 Conservative majority to turn it over:

    A federal court sent down a ruling Monday morning that says gerrymandering is unconstitutional and therefore, no longer allowed. Republicans have been scheming to sway the vote in the state of Florida by counting felons who can’t vote as nearly half of the voting population.

    About 1,200 people who are legally not allowed to vote make up 43% of listed voters, which“inflates the political influence of the non-prison population of District 3 and dilutes the political influence of the rest of the county.” A lawsuit filed in March of 2015 stated that the gerrymandering of Florida prisons creates an unfair sway in votes.

     

    Today the court finally ruled on that case and found that gerrymandering was, in fact, unconstitutional because it violates the “one person, one vote” principle in the 14th Amendment. The ruling found that gerrymandering weakened the votes of the residents who legally allowed to vote, and that, while clever, is not a political trick they will continue to allow.

    deadstate then vs now

    tan 6

    tan 7


  14. Refugees/Yodi – They have no idea who did this, a bit early to crow about your prejudices being confirmed. 

    Meanwhile, markets bouncing back already – especially the Nas, which is almost even thanks to AAPL up a quick 1%.  Once we're over $106.50 – it's a clean shot back to $110.

    Oil/StJ – The supply side can drop very fast actually.  The complete lack of drilling new wells is bound to do damage to US supply at some point, probably summer so, if OPEC does cut back now – we could quickly flip to drawdowns all summer long.  Not sure if they are smart enough to accomplish that.  

    Meanwhile, check out /RB

    Looks like it's heading to $1.50. 

    Obama speaking to Cuba – we'll be sending gasoline there for sure.  

    Brussells/StJ – There's a Sheraton right across the street from where the bomb went off that I stayed at – I remember the view.  

    Belgium/1020 – Too bad, it's a beautiful place – especially Bruges.  


  15. Truth-o-meter / Phil – Turns out that Hillary who supposedly cannot be trusted has the lowest number of mostly false and false! Of course, one of the pants on fire assertions from Trump and Cruz is that Hillary lies all the time….


  16. /ES – Since /ES is currently under 2040 (has been since the wee hours of the morning), should we be looking to short when (if) /ES bounces back up and touches 2040, or is it safe to start jumping in now at 2037 and then get another one if it keeps going back up to 2040?


  17. Cuba / Phil – And does the next president reverse that? Impose a new embargo? I just read that Cubans in Florida are already switching sides in that debate. If the GOP loses them, they can kiss Florida goodbye!

    And besides, the business community is all on board – 11M potential new customers, undeveloped pristine beaches, what's not to like.


  18. Truth/StJ – Yes, but it's still shocking that both Hillary and Bernie score so many falses.  That's why I'l like to see historical data – surely things haven't always been this bad – but then again…

    /ES/Cordoor – Yes, we can play it until it breaks but if ANY of our lines are over, we shouldn't try shorting and that's 17,550, 2,040, 4,420 and 1,100.  If we're rallying, someone will lead us up and the S&P is closest (2,039) so I wouldn't get too comfortable with a short here.  

    Cuba/StJ – Brilliant timing by the Dems, they knew this would happen and Florida comes off the GOP map!  The whole thing has been ridiculous since Nixon went to China.  How do we make peace there and not with our next-door neighbor?  I fault Bill for not going at the time, he could have sat back and smoked a cigar with Fidel – that would have been epic and Al Gore would have been the next President! 

    Speaking of Al Gore was right:

    Scientists Warn of Perilous Climate Shift Within Decades, Not Centuries

     

    The nations of the world agreed years ago to try to limit global warmingto a level they hoped would prove somewhat tolerable. But a group of leading climate scientists warned on Tuesday that permitting a warming of that magnitude would actually be highly dangerous.

    The likely consequences would include killer storms stronger than any in modern times, the disintegration of large parts of the polar ice sheets, and a rise of the sea sufficient to begin drowning the world’s coastal cities before the end of this century, the scientists declared.

    “We’re in danger of handing young people a situation that’s out of their control,” said James E. Hansen, the retired NASA climate scientist who led the new research. The findings were released Tuesday morning by a European science journal, Atmospheric Chemistry and Physics.

    Virtually all climate scientists agree with Dr. Hansen and his co-authors that society is not moving fast enough to reduce emissions of greenhouse gases, posing grave risks. The basic claim of the paper is that by burning fossil fuels at a prodigious pace and pouring heat-trapping gases into the atmosphere, humanity is about to provoke an abrupt climate shift.

    Dr. Hansen argues that society is in such grave peril that he feels morally compelled to go beyond the normal role played by a scientist and to sound a clear warning. That stance has made him a hero to college students fighting climate change, but some fellow scientists say they believe he has opened himself to the charge that he is skewing his scientific research for political purposes.


  19. oil … WOW


  20. Hey, I actually got credit for making a call!  http://www.voanews.com/content/natural-gas-prices-move-higher/3247916.html

    This could be an exciting new trend!  

    Oil/Jabob – Wow on the 5 min chart, yawn longer-term.  


  21. Phil, I give you CREDIT every day!! : )    Newt


  22. How about LL? resolves CARB inquiry…


  23. "Do you all remember how beautiful and safe a place Brussels was. Not anymore, it is from a different world! U.S. must be vigilant and smart!" Donald Trump

    I love when someone who has zero idea of what Brussels really looks like tweets shit like that. Central Brussels is rough as. Hopefully America will wake up to her senses.


  24. Lionel – Ask Trump to take a stroll around the Gare du Midi in the evening to see how beautiful and safe it has been… 


  25. Phil/RIG,

    below 10. What was the RIG trade that is part of one of the portfolio? Apology but it is difficult to find a trade. maybe I am not doing it right.

    regards


  26. That's true Newt, thanks.  

    LL/Eric – Up a quick 8% ($13), we'll see if it has legs.  

    Of course, that means it's time for Tilson to come back and bash it some more.  

    Richmond fed manufacturing sector activity expanded; new orders and shipments increased

    • Mar. Richmond Fed Mfg. Survey+22 vs. 0 expected, -4 previous.
    • Shipments 27 vs. -11 prior.
    • New order volume 24 vs. -6 prior.
    • Prices paid 0.60 vs. 0.16 prior.

    Chain store sales accelerate in latest reading

    • Redbook Chain Store Sales +0.8% Y/Y vs. +0.6% last week.
    • Sales are expected to accelerate this week in front of the Easter holiday.

    Subdued pace of manufacturing growth persists in March

    US home prices rose in January

    IMF Politely Asks China To Explain Exactly How Large Its FX Forwards Book Is

    Connecticut Credit Risk Spikes To Record High

    Fed's Go-Slow Message on Rate Hikes May Get Burned by Prices. (videoInflation may be starting to fire up and the Federal Reserve’s credibility could get burned. Just days after policy makers softened their outlook for the pace of interest-rate increases, evidence has accumulated that prices are beginning to move higher. If that trend continues, it could fray investors’ confidence that price pressures remain in check, or lead them to conclude that this is a deliberate effort by the Fed to test the 2 percent target to ensure the US economy remains durable despite weakness and deflationary forces abroad. Exhibit A: Both longer-run survey and market measures of inflation expectations are starting to recover, after dipping during the market turmoil of last the last few months.

    Misplaced Confidence In The ECB – Lessons From John Law's Mississippi Bubble

    JPMorgan: Money flows back into Treasurys after dovish Fed

    • According to a bank survey, the share of "long" investors adding to long-dated U.S. government paper rose to 21% this week from 16% previously. This follows the FOMC last week cutting its expectations for rate hikes this year by half to just two.
    • The share of "short" investors holding fewer long-dated Treasurys fell to 19% from 25%.
    • Longs outnumbered shorts by 200 basis points vs. a week earlier when shorts outnumbered longs by 900 bps.
    • The 10-year Treasury yield is lower by three basis points today to 1.89%. Ahead of the Fed last week, it was pushing 2%.

    BlackRock: There won't be a recession

    • Investors should pare their Treasury holdings because the U.S. will avoid a recession, BlackRock said in a research note, weighing in on the recent downturn talk currently being debated on the Street.
    • "Economic indicators this week may show the U.S. economy experienced a mild slowdown but is not headed for a recession," according to the world's largest money manager.
    • U.S. 10-year note yield -4 bps to 1.88%

    Corporate profit ride turning into a train wreck(video) If the stock market rally is going to continue the next couple of months, it will have to do so against an aggressively worsening profit backdropThe corporate earnings picture is ugly and getting uglier in a hurry, with S&P 500 companies expected to post an 8.3 percent decline in first-quarter profits from the same period a year ago. While history suggests that earnings season always ends up looking better at the end than it did at the beginning, if the current trend holds up it will be the worst period since the third quarter of 2009, according to FactSet.

    It's Not Over Yet – Moody's Put Deutsche Bank On Review For Downgrades

    Iran could join output freeze group at a later date

    • Iran may join other oil producers planning to freeze production to support prices at a later date, according to OPEC's secretary general Abdullah al-Badri, but the country will not join an OPEC/non-OPEC producer meeting in Qatar on April 17.
    • "They have some conditions about their production," he said at a news conference in Vienna. "Maybe in the future they will join the group.
    • OPEC still expects crude prices to rebound to a "moderate" level even if Iran doesn't join the deal to put a hold on output levels.
    • Crude futures +0.4% to 41.68/bbl.

    Drilling Rig Suppliers Say Oil Recovery Will Be Slower Than ExpectedLeaders of the world’s largest suppliers of offshore drilling rigs and the services that go with them see the oil market recovery taking even longer than expected last year. Transocean Ltd. Chief Executive Officer Jeremy Thigpen expects it will have to wait at least another three years before his company can begin charging higher rates for offshore rigs. Schlumberger Ltd. chief Paal Kibsgaard sees the oil industry, stuck in the deepest financial crisis ever, in no rush to get rigs back online even after prices recover. Before rig owners can charge more, they must first see a boost in activity after the worst crude market crash in a generation. Transocean doesn’t expect an increase in rig leases until late next year or sometime in 2018, Thigpen said Monday in an interview at the Scotia Howard Weil Energy Conference in New Orleans. Daily rates, which have fallen by more than half over the past two years, aren’t expected to climb until 2019 or 2020, he said.

    Transocean -11% as CEO says rig dayrates will not rise until 2019-20

    • Transocean (NYSE:RIG-11.3% premarket after CEO Jeremy Thigpen says it will takeat least another three years before his company can begin charging higher rates for offshore rigs.
    • Thigpen told the Scotia Howard Weil Energy Conference late yesterday that RIG does not expect an increase in rig leases until late next year or sometime in 2018, and daily rates – which have fallen by more than half over the past two years – are not expected to rise until 2019 or 2020.
    • RIG leads the industry in reducing its fleet, with 24 rigs scrapped since the downturn began and another 8-10 it could retire over the next 12-18 months, Thigpen said; RIG now has 61 rigs in its fleet with another 11 under construction.

    Soon After We Sounded The Alarm, Canada's Regulator Warns Local Banks Are Underreserved To Energy Losses

    Travel stocks slide following airport and metro explosions in Brussels

    • Travel-related stocks are down sharply following the terror attacks in Belgium at a metro station and the international airport.
    • The latest report indicates 26 people were killed and 130 were injured from the explosions.
    • Notable movers in premarket trading include Priceline (NASDAQ:PCLN-2.26%, Expedia (NASDAQ:EXPE-3.1%, Delta Air Lines (NYSE:DAL-2.5%, Carnival (NYSE:CCL-2.4%, United Continental (NYSE:UAL-3.6%, Norwegian Cruise Line Holdings (NASDAQ:NCLH-2.0%, Royal Caribbean (NYSE:RCL-2.4%, Tripadvisor (NASDAQ:TRIP-1.6%

    Domino's Unleashes Pizza-Delivery-Robot As 2 Out Of 3 Americans Expect Jobs To Be Automated

    Morgan Stanley sees 30% upside for Wynn Resorts

    • Morgan Stanley upgrades Wynn Resorts (NASDAQ:WYNN) to an Overweight rating from Equalweight with Asian markets stabilizing.
    • Wynn's market share in the key Macau market is expected to increase to 13% to 14% from 10% as the Wynn Palace contributes.
    • "Wynn is highly levered today (~6.5x) but will be a cash flow machine once Macau Palace and Boston open (>10% FCF yield in ’19)," observes MS.
    • The investment firm assigns a price target of $120 to the casino stock.
    • WYNN +1.36% premarket to $94.00.

    China Loves IPhones, Just Not Cheap OnesTwo-and-a-half years ago, Apple released a cheaper version of its high-priced smartphone that was supposed to be popular in emerging markets like China. The iPhone 5c was a failure, and Apple killed it off less than a year after it was introduced. This week, Apple is releasing the iPhone SE. Like the 5c, it’s cheaper than the marquee handset by recycling some of the previous year's tech specs. Notably, the screen (an iPhone's single most-expensive component) remains not only smaller but of lower quality than more-recent iPhones.Yet there are a few reasons why the SE will succeed in China where the 5c didn't.


  27. Hey , just realized we're off Friday!


  28. Here is an interesting one.

    NAVI  ( old Sallie Mae)  15,000 Jan2018 calls bought for $1.25-1.30      Pays 5.15 dividend, though Hillary, among others,  has been a critic the past year


  29. Shippers/Phil - is it time for a value entry here and any opinion on who is the best of the bunch? FRO? TK? SHIP? …?


  30. DRII a trader sells 4000 April $20 puts for $1.50 and buys 4900 June $20 calls for $5.20

    the puts expire before earnings and on 2-24 the company announced forming a committee to explore strategic alternatives to maximize shareholder value.

    Caution- this is a time share company that has been criticized for overly aggressive sales practices


  31. Friday?/Stock – Damn, I had no idea – I could have left early for AC.  I never get the logic of Good Friday, I know why Passover moves around (different calendars) but why Good Friday/Easter.  Next year it's 4/14.  Thanks for reminding me.  

    RIG/Pat – All 4 portfolios were updated last Thursday.   I'm not sure what you mean by difficult as I have to go to the post and look for RIG, I'm not sure how I can explain how I do it "right" but, looking at the portfolios, I see RIG in the LTP, I see RIG (it's alphabetized in each section so, under "R", between OIH and SLW) and our position is:

    It's worse now as RIG dropped to $10 but Thigpen (CEO) didn't say they are going broke – he just said the turnaround will take time.   I'm not worried about the 2015 short put and that's where most of our loss is and we'll roll the Jan $13 calls (now $1.35) to the 2018 $10 calls (now $3.20) on a bounce back (because the shorter-term contracts will likely move up faster, for about $1.80.  So we'll be buying $3 in position and a year of time for $1.80.  

    NAVI/Stock – I'd do a lot of research before going in on that one.  Aside from whatever parts they have left, they may still owe the Government money and then they will be a political football for 6 months.  Also, it's not like housing is back on its feet yet. 

    Shippers/Scott – The BDI is still a disaster but hopefully improving.  Oil prices going up may help with demand for cargo but a negative too as they use it to move those ships.    

    FRO is the best of the worst with "only" $250M in debt and $100M in cash.  They are priced at $1.3Bn at $8.37 and they are probably making about $150M (they sold assets in Q3, that isn't really profit you can count on) so the P/E is much worse than it looks but, in a good year, they've should be good for $250M but $250M x 32 = $8Bn and you're still short $370M and even if this were a riskless sector I still wouldn't want this stock – and they are WAY better than the others.  

    If the BDI pops back over $750 (for reasons we consider sustainable), THEN there will be a lot of shippers we can bottom-fish but why buy them now?  

    DRII/Stock – If they aren't overly aggressive, then they aren't going to sell many time-shares.  It's a form of a legal scam – I find it very hard to believe the Government still hasn't done anything to regulate them better.  I would have thought AirBnB would be putting a huge dent in their earnings and maybe they are and this little run-up is a last gasp on the way into the low teens.  

    On paper, they are a great stock but they are a Congressional pen-stroke away from being a lousy stock and I'm not sure their lobbyists are strong enough to keep the wolves at bay for too long – especially since companies like MAR actually want more regulation because paperwork is a battle they can easily win against smaller operators.  

    The Consumer Financial Protection Bureau has launched a probe of Orlando-based Westgate Resorts related to selling or finance tactics to determine if the company's salespeople are violating federal law, the Orlando Sentinel reports.
    The probe is at an initial stage right now, with the Consumer Financial Protection Bureau asking for documents before deciding if it will investigate further.
     
    Westgate lost a legal battle recently over alleged high-pressure sales tactics in Tennessee, which the company tried to appeal to the U.S. Supreme Court. That bid failed when the high court in December declined to review Westgate’s loss .
     
    Owner Siegel famously told people in 2008 he would lay off employees if Obama was elected – but he wound up hiring more and boosting their minimum pay to $10 per hour last year.
     
    “This could be just the beginning of many more legal challenges ahead,” Gregory Crist, president of the NTOA, said at the time. “The Overton case exposed and put on record various Westgate sales, training and compliance practices which violated the consumer protection and timeshare act,”

  32. lionel… Trump knows Brussels pretty well and called it back in January .."Brussels is a hellhole"

    http://www.nytimes.com/2016/01/28/world/europe/trump-finds-new-city-to-insult-brussels.html?_r=0

    I think he might travel more then most of us


  33. PARIS — Since the November attacks in Paris, the Belgian authorities have carried out dozens of raids, combed whole neighborhoods for well-known militants, and even locked down the entire capital for days, all part of what they promised was a stepped up effort to root out jihadists.<p>Yet none of that …


  34. Assuming everything goes as hoped.<p>SpaceX CEO Elon Musk has long talked about launching payloads into orbit as often as once per week. Now, that dream may be slowly becoming a reality.<p>SpaceX executives have indicated that the company, which has only managed two launches so far this year, could ramp …


  35. 6 advantages the iPhone SE has over bigger phones

    Apple is back to making iPhones with 4-inch screens with the brand new iPhone SE.<p>That’s a big change from the general trend for premium smartphones, which have only gotten bigger in the last few years.<p>But Apple’s iPhone SE has its merits that some might argue makes it better than the bigger iPhones.<p>…


  36. Image source: LendingMemo, republished under CC BY 2.0.<p>Unsurprisingly, given the tragic events in Brussels today, global equity markets are lower on Tuesday. The U.S. is no exception, with the<b>S&P 500</b> and the<b>Dow Jones Industrial Average</b> (DJINDICES: $INDU) down 0.01% and 0.09%, respectively, at 11:30 …


  37. While fears of a broad-based US recession have abated in the last few weeks, the other recession at US corporations is showing no sign of ending anytime soon.<p>While a US recession is loosely defined as two straight quarters of negative GDP growth, this corporate recession has come in the form of two …


  38. The U.S. Supreme Court on Tuesday handed a loss to Tyson Foods Inc over the company’s challenge to an almost $5.8-million class action judgment in a case won by workers at an Iowa pork-processing facility who contend they were underpaid.<p>The court, in a 6-2 ruling, upheld an appeals court ruling in …


  39. Tons of homeowners are stuck.<p>Around the country, many Americans would love to make a move in terms of their housing situation. Specifically, they want to buy their first homes, or trade up from their starter homes to nicer, bigger digs, just like countless homeowners before them.<p>But people are …


  40. The Dicey Retirement Gamble Americans Are Making

    It’s appropriate that the Employee Benefit Research Institute’s (EBRI) 2016 Retirement Confidence Survey was just released during the American Society on Aging’s annual Aging in America conference I’m attending in Washington, D.C. Unfortunately, from my reading of the survey, workers are far more …


  41. The technology world has lost an icon. Andy Grove, the former chairman and chief executive of Intel, died Monday, eliciting an outpouring of remembrances, memories and eulogies from leaders in Silicon Valley and far beyond.<p>Apple CEO Tim Cook tweeted that Grove “epitomized America at his best.” …


  42. Obama calls for lifting of Cuba embargo and embrace of free market economy

    Barack Obama urged Cuba to embrace the free market in a landmark speech in Havana that championed economic liberty rather than political reform as the key to unleashing the potential of its people.<p>Ignoring calls to echo Ronald Reagan’s famous “tear down this wall” speech in Berlin, President Obama …


  43. Here’s your morning jolt of news, insight and analysis on the global energy business. Send us tips, suggestions and complaints: EnergyJournal@wsj.com<p>Sign up for this newsletter: http://on.wsj.com/EnergyJournalSignup<p>SWISS COMPANY TO ACCEPT FIRST AMERICAN SHIPMENT<p>In a milestone marking the opening of …


  44. Financial Times Slams Share Buybacks

    <i>Harvard Business Review</i> called them “stock price manipulation.” The Economist called them “an addiction to corporate cocaine.” Reuters called them “self-cannibalization.” Now the <i>Financial Times</i>, in an article by John Plender, calls them “an overwhelming conflict of interest.”<p>Yet share buybacks not …


  45. UBS: Sell stocks now!

    With markets grinding higher and fears of an imminent recession seemingly in the rearview mirror, it wouldn’t be hard to think that the stock market has room to run upwards.<p>Don’t get too excited, however, said the technical analysis team of Michael Riesner and Marc Müller at UBS. It looks like the …


  46. Robots don’t sue.<p>CEO of CKE Restaurants Andy Puzder wants to take humans out of the fast food equation.<p>The Carl’s Jr. and Hardee’s parent company could soon implement an employee-free operation as Puzder told <i>Business Insider</i>, “I want to try it.” The chief executive was inspired by Eatsa, a …


  47. Egypt’s military is hijacking its economy

    Economics and politics in the Middle East have merged into a story of insider advantages and popular discontent. Much of the region is detached from the global economy. Tensions between private wealth and state institutions exist in Tunisia, Algeria, Libya, and Egypt thanks to bloated public …


  48. Phil/RIG,

    Thanks for the update.

    Regarding virtual portfolios, I went to the virtual portfolios link on the top of the page and the recent review was not there. The latest review is on Jan 4th. And I was not sure exactly when the last review was done in the chat.

    regards


  49. <b>Since 2011, American photographer Mustafah Abdulaziz has travelled to eight countries around the world highlighting the global water crisis in his documentary project, Water Stories.</b><p>Seventy large-scale photographs from the series are on display in London in his first UK solo exhibition.<p>Abdulaziz’s …


  50. 1. Internet access growing worldwide but remains higher in advanced economies

    In many advanced economies, the ubiquity of the internet is now a given. It permeates commerce, social interactions, politics, culture and daily …


  51. Coal-fired power consumes 7 percent of the world’s freshwater, Greenpeace says.<p>Burning coal doesn’t just pollute the environment and harm people’s health — it’s a huge drain on the world’s increasingly strained supply of freshwater.<p>The world’s coal-fired power plants use enough water to meet the …


  52. A year ago, Zhou Xiaochuan, the governor of China’s central bank, joined a chorus of official voices talking up the nation’s stock markets as a way to help the economy.<p>Now, according to some domestic media reports, Mr. Zhou apparently did that again, in remarks at an economic forum over the …


  53. In a first, the alien planet hunting telescope Kepler has seen a bright flash of a shockwave sent out by an exploding star at the end of its life.<p>The shockwave was propelled out into the universe by a red supergiant star, which exploded in 2011, 1.2 billion light-years from Earth. The star was …


  54. USO – The straddle I recommended the other month expired last Friday for a nice $1.60 gain on $9.50 investment in USO.  Vol has come down, but might as well keep riding this one until it stops working.  Buying USO at $10.50 and selling May $10.50 strike calls for $0.72 and $10.00 strike puts for $.50.  Looking for a 12% return through May if USO holds above $10.  Thoughts?


  55. Phil would you please give me a short term option trade for IBM.  I want to see a quick results (positive of course).  I have never completed a single option…and hey I have done 4 or 5!….Most of yours are pretty advanced with all the rolling etc.   I would appreciate it.  IBM is down some today.    thanks


  56. What happened to GTATQ?  I had some shares put to me when we all got into it a long time ago.  No listings/data past 2 days.


  57. Well, Nas finally topped out at 4,440 and /YM got rejected at 17,550, which is exactly our line and /TF failed at 1,100  and /ES topped out at 2,047.50.  Now we'll see where it all ends.  

    /RB just crossed $1.50!  

    USO/JJ – Nothing wrong with that trade!  

    Sometimes we forget how easy it is to use the system Craig likes to teach at our seminars, simply buying stocks and selling front month or quarter puts and calls.  The returns aren't thrilling but, as you have with USO, they sure are consistent!  

    With USO at $10.54, the sale of the May $10.50 calls for 0.72 and the $10 puts for $0.50 drops the basis to $9.32/$9.66 so worst case is you have 2x at $9.66 (8.3% off) and your best case is you get called away at $10.50 with a $1.18 profit, which is 12.6%.  

    Oil is currently $41.50 so 8.3% off would be $38.05 so, essentially, the bet is simply that oil will be higher than $38.05 in May and, if not, we end up owning 2x for $9.66 and then we sell another $1.25 in puts and calls and our basis goes down to (speculating) $8.50/8.75.  $8.75 (and that would be 4x, mind you) would be 16.6% off the current price of oil, so $34.61 and that's the real bet – Anything over $34.61 (call it $35) in July is some kind of profit on a 4x position and, meanwhile, if oil holds $40, you're looking at 5% monthly returns.  

    Since that's the goal of our 5% Portfolio (OOP) and this is a very high-probability play as well as a very valuable lesson in stock and options trading, lets add this trade to the OOP and track it:

    • Buy 500 shares of USO at $10.53 ($5,265) 
    • Sell 5 USO May $10.50 calls for 0.74 ($370) 
    • Sell 5 USO May $10 puts for 0.48 ($240) 

    That's net $4,655 and, if all goes well, we'll get called away in May at $10.50 and get $5,250 back for a $595 profit (12.7%) in 59 days.  You can make these trades all the time but always be sure to go through the math (as I did above) and make sure you are VERY COMFORTABLE with owning 4x at the net price if things go against you.  In our case, we'd end up with 2,000 shares of USO at net about $8.75 for $17,500, something we can live with in what is now a $130,000 portfolio.  

    Keep in mind that's our worst case and the initial net margin effect is just the cash of the transaction (since the margin credit from the stock offsets the debit from the short put).  If you have a PM account or one of those IB accounts with 500% margin, you can really have fun with these things once you get used to them.  For example, you could do 1,000 shares at $10.53 and sell the May $10 calls ($1.36) with the May $9.50 puts (0.32) and that nets you in for $8.85/9.175 and then, at $10+, you make $1,150 – so it's a bigger commitment and less than a 2x payoff but your break-even is about 0.50 lower (5%) which is $2 lower on oil ($36).  

    So the trade-off is a bit less return vs an improved likelihood of success.  I didn't choose that one because the commitment is higher (and not everyone has PM) and also because I'm comfortable with $38+ as a breakeven for oil in May.  

    IBM/Coke – I can't give you a trade idea on IBM, especially short-term, as it's back near $150 and we only liked it BECAUSE it was $130.  LONG-term, I still like them but, at $150 in the short-term, it could go either way – especially as we're still expecting a general market pullback – one day.  

    Oops, looks like we're getting it into the close!  

    GTATQ/Grant – I believe our shares were extinguished in the bankruptcy (see yesterday's note). 


  58. grant:

    IT'S GONE!  They reorganized and made us pay for it!  I get sore every time I am reminded of that company!


  59. Good article on share buyback you linked to Phil:

    http://www.forbes.com/sites/stevedenning/2016/03/22/financial-times-slams-share-buybacks/#a36ccf71dc03

    It's just so destructive in the long run… Only demanded because people like Icahn don't have the patience to wait for R&D to pay off! Thankfully not on the board of Google!

    “It is high time institutional investors took a firmer grip,” writes the FT. “In the U.K. that would mean voting against most buyback authorities.”

    A positive sign in the U.S. is that Larry Fink, the CEO of BlackRock, the world’s largest institutional investor, has written all the CEOs of the S&P 500 and called on them to present long-term strategies. Fink wrote that buybacks “deliver immediate returns to shareholders” while their companies are “under-investing in innovation, skilled work-forces or essential capital expenditures.”

    Hillary Clinton, the front-runner for the U.S. Democratic presidential nomination, says they undercut the American economy at the expense of needed investment.

    As one FT reader noted, what we have here is “a charade of corporate health.” Share buybacks are “a symptom of Quantitative Easing and a reflection of central bank ‘tooth fairy economics’ … a temporary triumph of financial chicanery over common sense and honest capitalism.”


  60. R&D/StJ – Yet GOOGL had to let go of Boston Dynamics because the payoff is too far out (and IRBT also gave up) – sad.  


  61. RIG/Pat – I do not always post our monthly reviews there.  As I hadn't finished the LTP review, I didn't make a new post.  The last review in chat was Thursday.  


  62. Well, GOOGL already has a ton of moonshot projects!


  63. IBM  thanks anyway Phil….I watch you do the options so masterfully on webinar and I still haven't been able to figure it all out…kinda thought there was always a play of some sort….I just spend all my time on futures and reading copious amounts of posts and comments.  Hopefully I made a little in /NQ (still open -1 contract from -8 and looks like may have made big $265 unless mark to market goes ahead and wipes that out too) lots of orders to balance out at break

    .  


  64. API shows a build of nearly 9Mb! Can this possibly still support oil prices rising? I am sure it will if I trade it short, but I sure am tempted. I can hear Phil now telling me not to though. Actually I can read it in this mornings post.


  65. Tonight in Utah, we get to experience the illusion of choice, of election, and of democracy, though in the past several decades we never really had it, and possibly we never did. Rest assured, we will always elect someone who supports the military industrial complex. This is why we will never feel the Bern. He cannot be elected, and will not be. So I won't be wasting my time attending my caucus.

    https://www.youtube.com/watch?v=8y06NSBBRtY&feature=youtu.be


  66. For all you UNG 2018 players from SA today:

    New market for U.S. shale gas opens in Europe
    In a milestone marking the opening of a new market for U.S. energy producers trying to sell natural gas, Swiss petrochemicals company Ineos today accepts the first seaborne shipment of U.S. liquefied ethane to Europe, WSJ reports, in another sign of how the North American shale boom has transformed the global energy map.
    The ethane was extracted from the Marcellus shale in Pennsylvania, where companies have been looking to diversify their markets for their ethane because of pipeline and storage limitations; unlike crude oil and gas, ethane is not restricted for export from the U.S., but a lack of transportation options has limited exports.
    Ineos’ shipments from the U.S. are underpinned by a 15-year contract with Range Resources (RRC +0.2%) and Consol Energy (CNX +2.9%), both active drillers in the Marcellus Shale who are struggling as declining energy prices have cut their revenue and share prices in recent years.


  67. Phil as you know. I am a novice option trader and would appreciate your opinions. I have two trades in gold and silver I considering as I believe they can be stronger earners over the next 2 years;

    RGLD: Earn income on selling RGLD Puts and be happy to own it at $40, Bet RGLD will be close to $70 before Oct as someone sold +2800 calls at $70 as per this link

    http://finance.yahoo.com/news/royal-gold-cooling-off-big-134742521.html

    The Trade:

    Sell 30 RGLD Oct 16 $45 PUT

    Buy 29 RGLD Oct 16 $55 CALL

     

    SLW; Buy long  Jan 18calls @ $3.5,  Sell Jan 17 Puts at $15 to earn income and lower cost of SLW stock ($15-1.5=$13.5 entry price) if exercised.The PUT also gives some short term insurance if SLW drops, The income from the sell of PUTS also offsets the cost of buying the calls

    BUY 10 SLW Jan 17 $15 PUT

    SELL 10 SLW Jan 18 $20 CALL

    I suppose as I am not including any real math I do not have a more exact picture of the risk. Thanks for your time.


  68. Latchdaddy/

    “You go to Brussels — I was in Brussels a long time ago, 20 years ago, so beautiful, everything is so beautiful — it’s like living in a hellhole right now,” Mr. Trump

    Since the end of the 60s/ early 70s migrants/guest workers have been left rotting in derelict neighborhoods with no chance of "assimilation". Central Brussels was one of them.

    This was already causing some social problems in the 70s and it is still a modern unsolved Europe-wide issue of how to include young people of second and third generation migrant descent. In a nutshell the European social elevator has been broken for the last 30 years. And Europe desperately needs to find a better way to share the cake with its youth.

    So yes Trump has spotted the problem and I have no issue with that. As StLuc said "Lionel – Ask Trump to take a stroll around the Gare du Midi in the evening to see how beautiful and safe it has been…" That is the Central train station in Brussels. Anyone knows there is a problem!

    But only Donald has the arrogance to stump uninvited into a decade long European debate and bark half baked stupid ideas. Why kill the cliche of "The Stupid American"? Waterboarding anyone…

    Just to set the record straight there has never been a golden era in Brussels before immigration or 20 years ago as he said. It is another beautiful lie from Donald! Most of Europe was a hellhole then. Migrants/guest works have been pivotal to the reconstruction after the war.

    I hope Donald travel more than us, at the end of the day he IS a candidate for the Presidency of the USA. We are not.


  69. Latchdaddy     I dont have time to comment on your RGLD & SLW trades tonight but you need stop right now and learn more about options before you commit any money.  I'll be happy to teach you offline.


  70. Good morning!  

    LOL, things are right where we started yesterday so not much exciting to say except OMG on gold diving:

    Oil holding up at $41 despite API report.  Of course we know refineries go off-line this time of year so a build is normal but still – how do we stay over $40 with this much oil sloshing around.  If there's no corresponding draw in products, then we'll see a bigger downturn I think.

    It's gone/DC, Grant:

    Buybacks/StJ – I love it when things we complain about gain traction!  

    IBM/Coke – I guess I don't emphasize it enough but step one is finding a stock that is particularly over or undervalues and THEN finding an options play – that's why they work so often – PATIENCE!!!  That's also why my morning post calls do so well – they are based on macro fundamentals (usually) that I've been thinking about – as opposed to a random stock someone asked me to find a play for.  That all goes back to my good old Levis example:  

    I KNOW that Levis cost $50 but I also know they are often on sale for $40 so I never buy them for $50.  Even when they are $40, I usually don't NEED them so I don't buy them.  BUT, if I see them go on sale for $30 – I'll probably buy a pair because I KNOW that's a great deal.   The fact that they are $30 doesn't make me stop liking them and I don't wait to see if they get cheaper next week – it's a price I feel has great value and I KNOW I'll use them for a very long time.

    That's easy to understand because you understand Levis.  Why though, is that hard to understand with stocks?  IBM was going to be our trade of the year towards Thanksgiving because they were at $130 and I was fairly positive they were good for $150 and it was very easy to construct a trade idea for IBM but it was too early to make the call for 2016.  By the time it was December, IBM had popped back to $140 while, at the same time, my 2nd pick, UNG was making new lows ($7).  So, like a horse that comes on strong at the finish, UNG beat out IBM for our Trade of the Year, mostly due to the timing of the announcement (which was due to me being on BNN that day in Dec).   

    IBM/Albo – Can't argue with that.  Still my leading candidate for Stock of the Year - 2016.  

    At the moment, the IBM play would be:

    • Sell 20 IBM 2017 $125 puts at $8 ($16,000) 
    • Buy 20 IBM 2018 $125 calls for $21 ($42,000) 
    • Sell 20 IBM 2018 $150 calls for $11.75 ($23,500)

    That spread would be net $2,500 with the obligation to own 2,000 shares of IBM at net $126.25 ($252,500) so $126,250 in ordinary margin with the potential upside of $47,500 at $150, which is up just $8.50 (6%) from where IBM is at the moment.  Per ToS, the net margin on 20 short 2017 $125 puts is just $25,000, so this is super-efficient, as long as IBM behaves itself – especially considering the margin obligation goes away next Jan if IBM just holds $125 (down 11%).  

    Of course, if IBM goes lower, the short puts can be rolled (the 2018 $115 puts are $9.20) but it's not the kind of trade you want to be in if you don't want IBM to be a nice chunk of your portfolio at that price.  

    In our LTP, we already have 10 short 2018 $105 puts we sold for $7.22 on 9/24 and we bought 10 $135/160 bull call spreads for $10 so net $2.78 on our $30 spreads and that combination is still doable as well for the same net.  The disadvantage is you need to make $10 more to get the same return and you carry the short puts for another year – which is not a concern in our Long-Term Portfolio as we REALLY would LOVE to own 1,000 shares of IBM for net $107.78 for the very long term. 

    The idea of our Trade of the Year is it's the trade I feel is most likely to return 500% on cash in the next 12 months.   Even though we don't realize the full $50,000 until Jan 2018, we only need to be on track to make $15-20,000 in 2017, and that's far more than 5x our $2,500 cash input.  

    Submitted on 2016/01/04 at 11:45 am

    UNG/Batman – I made so many calls to go long on UNG in the past 30 days that I'm frankly not sure which one was officially the trade of the year but I did guarantee a free year PSW Membership if this one didn't make at least 100%.  Unfortunately (or fortunately) for people who took the challenge – it already made over 100%!  I do certainly hope you're not saying it was unclear that I liked UNG long???

    ?Submitted on 2016/01/04 at 3:40 pm

    Trade of the Year/Rookie – Officially it's now UNG from the Christmas Post (linked above) but I called about a dozen different UNG plays in December – pick any one – it just depends on what day you got started.  

    So that's how it works.  I KNOW I like IBM at $130 and I know I like UNG at $7 and when IBM is at $150, despite the fact that I like them, I don't buy and when UNG is at $6, despite the fact that it's below $7 – I don't panic because I KNOW it's worth $9 and I just have to wait for the sale to end so I can collect my money (again – we already won our Christmas bet).  

    API/Craigs – Yeah, it is what it is.  We're early in the contract cycle (a few days in) so there's no pressure yet so things like API have a lesser effect now than it would if we had less than 10 days to rollover.  Also, you have the continued assurances that the April OPEC meeting will "fix" everything.  Watch out below if it doesn't because it's the only thing driving us above $40.  

    Utah/Cordoor – Thanks for trying.  Hope you had fun.  

    Europe/Stock – Hopefully people begin to connect the dots.  

    RGLD/Latch – They had a fantastic quarter, which boosted them but the way they did it bothers me as they almost doubled production to drive cash flow and silence their critics.  

    It's hard to say whether or not that's sustainable and, even if it is, they only made $27M against a $3.2Bn market cap (p/e about 30 if consistent).  Anyway, so I would not REALLY want to own 3,000 shares of RGLD for $45 ($135,000) and I absolutely would not want to PAY $5.60 ($16,240) on a bet that they'll be over $60.60 by October.  Even if they are the best operators on the planet – they are still slaves to price fluctuations in gold that they have no control over and, as I said last week – the Dollar won't stay down at $95 and gold will come back down (see above).  

    Another reason I like ABX and HMY is because they are cheap (under $10 and under $5 when we picked them) and that means we can get a lot of bang for the buck on cheap options with little downside risk since any kind of metals play is speculative – no matter how good you think the fundamentals are.  

    Going back to our IBM/Levis example, there is not realistic price at which I'd be happy to own RGLD so I would skip them as a candidate but I KNOW I like ABX at $10 so I feel good about selling the 2018 $12 puts for $2.45.  Since I know I'll be able to roll those to 2019 $10s (the Jan $15s are $2.80), I can treat that $2.45 as free money and pick up the $10 ($6.20)/15 ($3.90) bull call spread for $2.30 and I have a net 0.15 credit and my worst case is owning ABX at net $12.15 while all ABX has to do is stay flat and I make $5.15 (3,433%).  

    So, under what conditions would RGLD go from $51 to $70 but ABX wouldn't hold $15?  Taking the same downside risk ($135,000), I can sell 100 ABX puts and buy 100 spreads and my upside, at $15 is $50,000.  For you to make $50,000 on the RGLD spread (assuming net $0 basis), you need to hit $72 but ABX can drop to $5 (down 66%) and you lose $50,000 while RGLD hitting $25 (50%) would already cost you $45,000.  

    Now, ABX improved their cash-flow by selling off their expensive mines and left themselves with only low-cost mines so they extract gold for less money (under $800) than their competitors (over $1,000) while RGLD solved their problem by doubling production on existing mines and selling more gold at the same thin margins – who would you rather own long-term?

    If you must stick with RGLD, the Oct $45 puts are $4.50 but the 2018 $40 puts are $6.80 so you can roll 30 puts to 20 of the 2018 puts about even and you have less risk/margin and a lower strike.  I would hope that you KNOW I will say you should flip to a bull call spread and stop being the sucker paying premium.  Assuming you don't want to wait 2 years, the Jan $40s are $15 and the $55s are $7.15 so $7.85 and let's say $4 net of the short put sale means $11 profit at just $55 x 29 contracts is $31,900 in a much more realistic spread.  

    Oops, my bad – it's $700/ounce for ABX:

    Barrick produced 6.12 million ounces of gold in 2015 from a portfolio that includes some of the world's premier gold assets. Our five core mines in the Americas are expected to account for about 70% of our total production in 2016 at all-in sustaining costs of $690-$740 per ounce.

    When you are looking to buy a miner (or any commodity producer), the most important thing to look as is how much it costs them to produce the stuff they are selling.  Their balance sheets and past profits don't mean anything, what matters is the price of the thing they are selling, how much of it they are able to sell (RGLD's saving grace, for now) and how much they can sell it for.  THEN you make sure they can service their debts, etc…

    SLW/Latch – These guys I like but again you are being the sucker and wasting your free money from the put sale to speculate on out of the money calls.  You also need to work on your portion control because the SLW trade is a $15,000 obligation – almost 1/10th of the RGLD trade – super imbalanced risk allocations.  Anyway, SLW was at $10 but not for long so I don't think the short $15s are too aggressive but there is a good chance you'll see $13 before you see $20 so be ready for a rough ride.  

    I'm assuming you are selling puts and buying calls, you say that in the text but then posted them backwards in the summary (see how hard my job is!).  Instead of spending $3.50 on the 2018 $20 calls that are $2 out of the money, why not buy the $12 ($7.50)/20 ($3.50) bull call spread for $4 and that's still net $2.55 with the short Jan $15 puts ($1.45) on the $8 spread so $5.45 upside ($5,450) if all goes well.  To make $5,450 on the net $2.05 spread you laid out, you need SLW to be at $27 vs my spread needing $20. So you need a 30% bigger jump just to make the same money – this is why we look for suckers like you to sell premium to (we're selling those $20 calls, in fact) – let them have their fantasies while we make money in the real world!  

    Brussels/Lionel – Well said.  


  71. One of my alternative trading ideas I have started, for an expected return of 24% per year. This trade can be started with any multiple of 100. 200 300 stocks etc. First stock I have chosen is GILD. second stock XOM As usual any questions well come. 

     

    GILD

    div.

    3x .43

    1.29

     

    assumed income 12 month 88.85×1.24

    110.29

     

     

     

    starting capital

    88.95

     

     

     

    actual income received

    0.55

     

     

     

    still expected div

    1.29

     

     

     

    net call premium +income

    1.84

     

     

    3/22/2016

    at time we rolled

    93.87

     

     

    3/22/2016

    stock price +assumed income

    95.71

     

     

     

    income need by 2/17/2017

     

     

     

     

    110.29 – 95.71 =

    14.58

     

     

     

    weeks remaining

    51

     

     

     

    income needed /week

    0.29

     

     

     

    14.58/51=

     

     

     

     

    return YTD (110.29-.55-88.95)/88.85=

    0.23%

     

     

     

     

     

     

     

    Date

    action 

    $ out

    $ in

    time premium

    3/17/2016

    buy 200 stock GILD

    88.95

     

     

    3/17/2016

    sell200 86.5 strike mar4 call

     

    3.00

    0.55

    3/22/2016

    bought mar4 call 

    6.95

     

     

    3/22/2016

    sold apr1 90call 

     

    3.8

    0.35

     

     

     

     

     

     

    XOM

     

    div. .73/ qt

     

    assumed income 12 month 83.25×1.24

    103.23

     

     

     

    starting capital

    83.25

     

     

     

    actual income received

    0.45

     

     

     

    still expected div

    2.19

     

     

     

    net call premium +income(3x.73)

    2.64

     

     

     

    at time we rolled

    83.25

     

     

     

    stock price +assumed income

    85.89

     

     

     

    income need by 2/17/2017

     

     

     

     

    103.23 -2.64 =

    17.34

     

     

     

    weeks remaining

    51

     

     

     

    income needed /week

    0.34

     

     

     

    14.58/51=

     

     

     

     

    return YTD (110.29-.55-88.95)/88.85=

    0.23%

     

     

     

     

     

     

     

    Date

    action 

    $ out

    $ in

    time premium

    3/17/2016

    buy 200 stock  XOM

    83.25

     

     

    3/17/2016

    sell 200 82 strike mar4 call 

     

    1.7

    0.45


  72. Sorry about the mess Copied from my excel work sheet 


  73.  

    GILD

    div.

    3x .43

    1.29

     

    assumed income 12 month 88.85×1.24

    110.29

     

     

     

    starting capital

    88.95

     

     

     

    actual income received

    0.55

     

     

     

    still expected div

    1.29

     

     

     

    net call premium +income

    1.84

     

     

    3/22/2016

    at time we rolled

    93.87

     

     

    3/22/2016

    stock price +assumed income

    95.71

     

     

     

    income need by 2/17/2017

     

     

     

     

    110.29 – 95.71 =

    14.58

     

     

     

    weeks remaining

    51

     

     

     

    income needed /week

    0.29

     

     

     

    14.58/51=

     

     

     

     

    return YTD (110.29-.55-88.95)/88.85=

    0.23%

     

     

     

     

     

     

     

    Date

    action 

    $ out

    $ in

    time premium

    3/17/2016

    buy 200 stock GILD

    88.95

     

     

    3/17/2016

    sell200 86.5 strike mar4 call

     

    3.00

    0.55

    3/22/2016

    bought mar4 call 

    6.95

     

     

    3/22/2016

    sold apr1 90call 

     

    3.8

    0.35


  74. Sorry it just does not come out as shown on the reply 


  75. Good morning again (went back to sleep as it's a webinar day). 

    Sorry Yodi, spreadsheets never come out right.  

    So they caught the guy in Brussels (the one that didn't blow himself up) and apparently there was another bomb that they found yet, for some reason, this is considered good news and the markets go up (a bit) – so strange…

    Meanwhile – it's a good idea to make friends with this guy on social media and then NEVER GO WHERE HE GOES!

    Teenager injured in Brussels terror attacks had previously survived Boston and Paris bombings

    A 19-year-old who was injured in the Brussels terror attacks yesterday had previously been in Boston and Paris when deadly bombings took place, according to his father.

    Mason Wells was one of four Mormon missionaries caught up in the blasts in Zaventem airport yesterday, and escaped with a ruptured Achilles tendon, shrapnel injuries and burns.

    His father Chad told ABC that Mason was just a block away from the finish line of the 2013 Boston marathon , in which his mother was competing, when a bomb detonated and killed three people – as well as injuring over 260.

    LDS Public Affairs

    Victim: Mason Wells, who was injured in Brussels Airport attack

    Read the full story here.

    So is God protecting him or screwing with him?  What on Earth are the odds of that happening to someone?  

    Oh, and it's nice to know our diplomats are on the case:

    1. Donald Trump has accused British Muslims of not doing enough to tackle religious extremism in a Good Morning Britain interview on the Brussels terror attacks

    At the moment, Europe is up about half a point and we're right back where we were yesterday morning:  17,500, 2,042.50 (exactly back!), 4,435 and 1,091 with the Nikkie at 16,975 and of course 17,000 is a good shorting line on /NKD though the Dax is over 10,000 so not much conviction to our shorts:

    Terror simply doesn't worry us anymore:

    Certainly refining capacity must be coming off-line, which would explain this move in /RB:


  76. Wow:  Our Democracy inaction:

    Leaders from the Arizona branch of the Democratic Party have confirmed that its lawyers are officially making an inquiry after multiple Democratic voters showed up to the polls only to find that they were listed as independents, Republicans, or had no party affiliation at all.

    Many voters wound up having to wait in line under the hot Arizona sun only to find that they were ineligible to vote for the candidates of their choice. To add insult to injury, the polling locations have been so poorly planned that many voters had to wait in line up to four hours before finding out that their information had been improperly filed.

    10 minutes until polls close and at least 1,000 people in line at 3rd Ave & Fillmore polling place. 

     

     

    At PHX polling site. 7:30pm: line is 3K+ long. Voters at front been waiting for 4+ hrs.  

     

    Just talked to a guy who waited 3 hours to vote. He feels the long lines were a "deliberate plan" 

    Marc Martinez 

     

    ?

    ‎@marcfox10

    Just talked to a woman who has been to 4 different polling places trying to vote today. 

    9:00 PM – 22 Mar 2016 

    JOE DANA ‎@JoeDanaReports

    2016 primary has estimated 800,000 voters at 60 polling places.#12News


  77. Damn, that last note was:

    Consider: 2012 primary had 300,000 voters and 200 polling places. 2016 primary has estimated 800,000 voters at 60 polling places.

    That's all it takes to stop Sanders – make it impossible for his people to vote.  That's why Hillary won Arizona 2:1 but Sanders won Utah and Idaho.  Should states really be THAT different in their results?  


  78. IBM  Thanks Phil…I need the help.  I'm sorry I am at the very low basics on options.