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Thrilling Thursday – March Rate Hike Looms But Market Ignores Risk

How many ways can they tell you?  

Every Fed speaker this week has indicated that rates will be going up sooner than later and CPI and PPI coming in at DOUBLE expectations yesterday indicated the Fed is already behind the curve on raising rates and Yellen, yesterday and Tuesday said to Congress "if we do not raise rates we run the risk of causing a Recession" – seems pretty clear to me.  Still the markets are only pricing in a 41% chance of a hike at the March 15th meeting – beware the ides of March indeed!  

The Fed needs 3 hikes in 2017 and if not March, we're left with May 3rd, June 14th, July 26th, Sept 20th, Nov 1st and Dec 13th.  They won't want to raise two meetings in a row so, if not March, then May is a must and every other after that but May is a long time to wait when inflation is double your expectations on Feb 15th.  So, unless CPI and PPI have substantially calmed down over the next 30 days – expect a rate hike at the March meeting.

Another thing that's gotten ridiculously inflated is the S&P's Price to Book Value Ratio, now back over 3 for the first time since the catastrophic top of 2007.  Ah, good times…

The Book Value of equity is an accounting measure that is based on the historic cost principle, and reflects past issuances of equity, augmented by any profits or losses, and reduced by dividends and share buybacks.  Essentially, it's the price a buyer would be expected to pay for the company, as is, in a takeover or liquidation.  The Price of an equity is nothing more than speculation on the future value of the company so a PBV of 3 indicates you are paying 3 times more than the stocks are actually worth.  

Now, the average company is not going bankrupt, so it's normal to pay something for the operation of the company and your expected future income but 2-2.4 is a more normal PBV, not 3 – 3 is simply about 30% too expensive.  

Of course, President Trump promises to lower those nasty taxes but, as I pointed out on Tuesday, Corporations don't really pay any taxes anyway.  At our Las Vegas Seminar, we looked at some companies that do pay a decent amount of taxes and who will benefit from tax breaks (see our Top Trade Alerts for Trade Ideas) but how do lower corporate taxes help Amazon (AMZN), who paid $1.4Bn last year against their $400Bn market cap (0.35%) on $135Bn in sales (1%) and $47.7Bn in Gross Profit (2.9%)?   

Image result for real corporate tax rateIn 2014, GE had a NET Income of $10.2Bn and paid $773M in taxes (7%) – how much of a tax break could they need to have the proper incentives?  The Obama administration put the screws to Corporations in 2015 and upped corporate collections from $251Bn to $341Bn but that still averages less than 15% of their earnings and it's still just 13.6% of the $2.5Tn individuals have to pay in income taxes.  

It's right there in the Fed's chart, $2.5Tn in profits, $341.7Bn in taxes paid is 13.7%.  That's an ACTUAL FACT and, the less Corporations have to pay, the more individuals have to pay – another fact.  Well, poor individuals anyway, the rest of us have good accountants!  Trump won't release his Tax Returns (and Congress won't make him) but, when Warren Buffett did, it showed he made $62,855,038 and paid $6,938,744 in taxes (11%).  

Granted he had to pay $250,000 to accountants but that too was tax-deductible so that's what I recommend everyone do.  Stop griping that the system is unfair poor people or small businesses.  You too can get and army of accountants if you want, so it's very fair!   And thank you so much for your vote.

Speaking of votes, your Republican Congress is hard at work coming up with the next great American growth industry – Clean Air!  No, not the air you breath, silly, the air you will PAY FOR after they eliminate the EPA – as called for in HR 861, which calls for the "Termination of the Environmental Protection Agency" – this is not "cutting back burdensome regulations," this is having no regulations at all!

Of course, lax regulations are how Matt Gaetz got elected in the first place and I'm sure the voters in Florida will be as thrilled as his Koch Brother backers when we get rid of those pesky manatees and tear down those coral reefs and spill another Billion gallons of oil in the Gulf of Mexico.  I'm sure BP would have voluntarily have spent $20Bn on the last clean-up if only the EPA had gotten out of the way and let them jump in to help…

Image result for air pollution masksThat's the problem with removing regulation (and regulators, apparently) – it's all a big party until something happens, and then you don't have a mechanism to cope with it and instead of funding the EPA for $8Bn a year to protect the entire nation, a single incident in Florida randomly costs the state $20Bn and suddenly we're all wearing masks to protect us from the air outside.  

Though the EPA's budget is $8Bn, they collected $6Bn in fines in 2016 and secured $1Bn in commitments to clean up superfund sites – so net $1Bn cost for the agency AND they secured another $13.7Bn in investments by companies in actions and commitment to control pollution for the benefit of US Citizens (remember them?).  So elminating them would save the Government $1Bn but it would save corporations $20.7Bn and much, much more as they would then be able to pollute wherever they want with no repercussions – PARADISE!  

Of course, the GOP will argue, that you as a private citizen can always sue the Koch Brothers for poisoning your air.  They will have huge law firms representing them and dozens of climate-denying scientists who will show the court that your lungs are better off with their soot in them than without and you and your lawyer and your lone expert will slug it out with them in court – have fun!  

Oh, and in case you thought you might make a class action lawsuit, think again – they are taking that power away from you as well – thank you for your vote.  

Meanwhile, you are very welcome for yesterday's long call on July Coffee (/KCN7) Futures, which have flown up this morning to $151 and that's up 3.5 from yesterday at $375 per point is $1,312.50 per contract to start your day off right.  Unfortunately, our Russell (/TF) shorts at 1,395 are going $250 per contract against us at 1,400 but we are short 8 contracts now (see yesterday's Live Trading Webinar replay) at an average of 1,399 and we're sticking with them.  

Best of all this morning, Oil (/CL) has the nerve to fake $53.50 after yesterday's MASSIVE 9.5Mb build in inventories so of course we are shorting those again as we run headlong into contract rollovers on Tuesday (and Monday is a holiday so trades would be crazy not to be out ahead of the weekend).  

If the Dollar were not down 0.5% this morning (100.70) then we'd be looking much worse in our indexes and commodities.  Like I said, investors are very wrong about the Fed and the Dollar should be stronger and I'm not the only guy who knows that – expect it to firm up at 100.60 and head back to 101.50 and that will push oil and the indexes lower – hence our bets. 

Be careful out there.

 


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  1. Today is /cl opex day so price can pin around oi fyi  


  2. Anyone know what index shorts Phil has on?


  3. For those sleeping during the night, here is a repeat of early morning.

    Hi Guys,

    A different play. I am looking at ORLY, one of Americas large spare part automotive supplier.

    The price runs at 270$, high but very steady. Cash flow and balance sheet looks good. Steady sales.

    They operate in two directions, 1. Supply spare part to dealers and private persons.

    2. Also gives service and install parts for you.

    They do not show a dividend, and due to the lofty price and no leaps, I start with two put plays.

    Sell an August 240 put for 6.30, allowing for a dip of 10%.

    TOS shows me a PM margin requirement of 1,500.00.

    For the more conservative members I would sell a BPS August 240/230 for 1.85

    TOS requires 355.00 in PM margin and your max. loss is 815.00 all based on one option play.

    The return based on margin requirement gives you for # 1  42% over the 6 month period.

    # 2 is 52%.

    As usual do your own research and do not bet the farm on it.


  4. Phil/GNC

    Do you still see value in GNC?  Sales were ok, and the earnings drop was probably expected with the changes that were made.  https://www.zacks.com/stock/news/249607/gnc-holdings-gnc-misses-earnings-estimate-sales-in-line


  5. 144,100 oil contracts left as of 8:36am today


  6. GNC: how about roll 2019 calls 7.5 to 5 and selling 2018 10calls?


  7. Gotta draw more lines! I am already tired of winning…


  8. Unfortunately for the American people, the stock market seems to be the only place we are winning – Mexico won't pay for the wall, Russia and China are toying with us, breathing and drinking water will soon be dangerous as they eliminate the EPA, the entire Muslim world hates us, that Yemen raid killed civilians and a SEAL team member, and millions of people will lose their healthcare. And we have not see the tax plans, the Social Security and Medicare plans and the education reforms yet! Winning!!!


  9. Good Morning.


  10. Stjean – You could depress a newborn Quokka with your optimism.  


  11. Well Le Pen wins first round is my bet and the world press says America is donw and Trummp will be in jail for eternity..Ill be taking the opposite side of those near hysteric calls

    Phil look at the premium for the roll over to April RBOB ( GAS) ive never seen it that substantial


  12. Phil – NG, showing 2.9 again.. I am looking for revenge.  :)


  13. Also /RB selling off a bit here.  Maybe it's the Thur bottom into a Fri bump.


  14. I am with you on Le Pen for the first round Angel although I don't think that she wins the whole thing… We'll see.


  15. Doe anyone know the trading hours EST for the oil futures  Fri and Sat?


  16. Futures finish trading at 5 pm on friday and start back at 6pm Sunday.


  17. ~~VRX +2.6%   (FDA approves Siliq to treat adults with moderate-to-severe plaque psoriasis.)


  18. Burr – RB , YES!! I am out by the skin of my teeth — made $945 , when 4or 5 days ago I had a $9k loss (4 shorts) going.  man I am building up scar tissue. 

    Holding 2 shorts CL at avg 53.3  and 2 shorts TF at 1399.6


  19. I don't see Macron winning just don't..she's like an old pair of shoes and right now alot of my French friends miss the old days ..uh oh


  20. Yodi – ORLY.   have you seen this WSJ article  on auto part makers?   https://www.wsj.com/articles/if-car-industry-retools-parts-makers-will-reel-1487214325?mod=djemheard_t


  21. FU GNC!!!!


  22. Estimates.

    @SNLEnergy survey points to 126-Bcf #natgas storage withdrawal, which could be the last triple-digit draw of season http://bit.ly/2lS91eM 

    126-Bcf #natgas storage draw would be below last week's -152 Bcf, below the 5-yr avg of -156 Bcf & below the -136 Bcf for same week in 2016


  23. What will the market do if their is no President Trump in 6-9 months.  The Russian accusations are not going to disappear and I really think there is much more to it then just Flynn talking on his own to an ambassador.  Question is will the GOP be pressured to investigate.


  24. FlynnPeachment Baby!


  25. ?rustle – I wouldn't be too concerned about the gop, the "crooked media" will save the day… :)


  26. Thanks ravi-futures


  27. rustle unless there is something we don't know ( and there ALWAYS is) the GOP isn't going to investigate a thing

    those in power decide this is the terrible truth these days


  28. But if something does happen, will the markets stay the course under Pence or crash back down.  I'm actually surprised they are ignoring the issue completely.  This was more of a market question than political statement.


  29. With RSI levels showing very overbought, the rate hikes on the table and the Russian issue, you would think the markets are due for a correction.


  30. The webinar replay is now available!

    https://youtu.be/35cVCSm0CdY


  31. Pharm/PGNX

    What do you expect from PGNX?  They got a boost today because they were added to S&P Small Cap 600.  Is it all about Azedra?


  32. and there goes CL – I am out with a tidy profit.


  33. Rustle – I agree with you.  I think the VIX is way too low.  That's why I'm short the SVXY and also have on a SVXY put spread.  As we've talked about before, trying to play the VIX options is very difficult.


  34. if tax promises are unmet we are in for a swoon


  35. Ok, I'm out @ 52.80 from 53.40.  

    Latch, good job on patience waiting for that move down.  While there was more profit on the table, be proud that you didn't get scared out.

    Where is the /RB bottom for a long into Friday?  /RB doesn't roll next week like /CL does so we have time!


  36. What happened with NG?


  37. /NG below 2.9 with 8 days to go.


  38. Good morning!

    Oil hanging out around $53.40, /TF at 1,400 but decliners are more than advancers today so I have faith that the BS will end shortly (and, of course the oil overhang is still 120,000 contracts):

    Index shorts/Burr – Just the 8 /TF shorts at 1,399.  Other than that, I'm all about the oil…

    GNC/DC – As a long-term turnaround I do like them, short-term, you will be disappointed.  They dropped the dividend and suspended the buybacks, which I consider responsible but others will consider disaster so we'll see where they go (down 13% at the moment at $7.21).  with no dividend, we might want to ditch the stock but I'm not ready to do anything just now – want to see where things settle out. 

    GNC/JMD – We have 3,000 shares so selling them for $7.33 is $21,990 and we can turn around and sell 50 $7.50 puts for $3.50 ($17,500) and we already sold 30 2019 $12.50 puts for $4.14 and we'll buy them back for $7 and take a $2.86 loss ($8,580).  So that's net $30,910 in our pocket and we have just the short puts and the 30 short 2019 $12.50 calls ($1.75) which we'll cover if they start to go up.  Meanwhile, we only put $17,580 into the trade so $13,000ish profits if GNC is between $7.50 and $12.50 despite the drop and our worst case is buying 5,000 shares at $7.50 ($37,500) less the $13,000 credit we have makes $4.90/share.  

    Big Chart/StJ – Maybe we should make it a 10% Rule?  cheeky  Trump was right, this winning stuff is exhausting…

    Wheee on oil!  $52.75 – gotta have faith in the system.

    Getting that move down in /RB too – almost $1.51.

    /NG right off $2.90 again is a good sign:

    /RB/Angel – Yeah, the people rolling contracts will be screwed for sure.  

    /NG/Latch – That's the winning level (until it isn't).

    Oil/Jomp – The Futures close at 5pm and come back at 6pm so only down an hour but Friday it's closed until 6pm Sunday but I'm not sure there's trading on Monday so maybe not until 6pm Monday – I wouldn't risk it because, even if there is trading – it will be thin and, of course Rent-A-Rebel!  

    At least 39 people killed by car bomb in southern Baghdad, with many more injured – third blast in three days


  39. No Trump/Rustle – Then I guess we'll just have to put up with the 30% average gains we got under Obama…  cheeky

    Image result for stock market by president

    Related image

    Out of oil/Learner – Me too $500 per contract stop just triggered.   

    Out of all but 5 /TF shorts too.  Right on the 1,400 line now.  

    /RB/Burr – I'd take $1.51 with very tight stops below.  If that fails, $1.50 is another good spot, of course.  


  40. No Trump/Phil

    We might have gains, but does the market have gains under Pence?


  41. Since I'm like commodity guy now

    Working #natgas in storage now stands at 2,445 Bcf — 303 Bcf less than this time last year and 87 Bcf above five-year average of 2,358 Bcf

     .@EIAgov reports 114-Bcf #natgas storage withdrawal for week ended Feb. 10 vs @SNLEnergy survey average calling for -126 Bcf


  42. PHIL you bailed on those Tf shorts? I am surprised given your take on the internals a few minutes earlier still you made money!


  43. Latch,

    OLRY Thanks for the article on WSJ two thing 1. I hate companies or in this case papers which are just putting baits out to subscribe. 2. Trump is full of BS also with his import stop he will get on other piece of shit in his face, Look at Chevrolet they cannot even sell cars in Europe! So in return cars will only cost more in the US and the spear part sale for 2. hand cars will boom as less people can effort to buy a good M. BENZ or BMW any more.

    That is the other side of the coin


  44. Phil, as to GNC: What I have is 20 2019 BCS 7.5/17.5 with -20 2019 10 puts. This position is down about$ 7900 with break even about 9 bucks in 2019. What would you do with this? I can roll the 7.5 down to 5 for 1.2. I suspect you would call this a no brainer if I'm going to say in the position. Would you also sell 2018 10 calls? Looks like its holding 7 or even 7.5 already.


  45. Sorry break even in 2019=sock at 9 bucks.


  46. CL Shorts, got in just under $53.50 and was out real quick for a $100 gain (missed the big leg down but was going into a meeting and didnt want to leave it open without being able to watch it) 

    Just a question for Phil and the rest who are trading futures. Do you guys set a stop in these situations? For instance you shorted at $53.50, your up $100, do you just put on some sort of automatic $50 trailing stop loss and wait to get stopped out? or do you watch just watch it and sort of play it by feel? 

    Im on interactive brokers 

    Thanks


  47. Phil,

    I'm still short /nq at 5197 trying to figure out when to DD. Now that we failed 5300, is it a good time? I'm sure I'm going to get scolded for this….


  48. crs101010  I've tried trailing stops before but they are always hunted.  You have to put the trailing amount high to begin with, and then they move it down, up, down, up, down up, which sucks the trail in, and they stop you out.  

    You did the best thing, get out with a gain if you have something to do.  

    I set price level alerts at every .15 or so with TOS, then in a meeting I know which way price is moving.  


  49. Crs….have you thought about trading qm instead?  Half the size of CL, so half the  risk. I have easier time of leaving them alone for a bit in situations like yours above, especially when Phil has this kind of conviction on shorting oil. 


  50. I've also used this while driving.  Works well.  IB Natural Language trader interface.

    https://www.interactivebrokers.com/en/index.php?f=21214


  51. Rustle I wouldn't about who the president is go back at a chart from the day they initiated the DJIA 

    what do you see?

    speculate to the sleeping point Pence… might even ignite a larger market rally global melt up right now with plenty of opportunities on both sides..InFLYNERRATION Le Pen in Merkle out Trump decomPENCEating..EU moribund Phil and the gang living large..what could be better…(no details)


  52. Thanks for the feedback guys, never even knew that IB natural language thing existed! 


  53. Trying the /RB long off 1.5155.


  54. Phil

     

    What do you think of  ?

     

    Enbridge Energy Partners, L.P. EEP

    12.7 div

     Thanks


  55. Full press from paul ryan and trump later….attempting to change the narrative….


  56. Denmark banning all refugees form entering

    WTF


  57. ?ryan – "We'll get working on it once we return from recess..?err…district work period"…..


  58. :)


  59. Pence/Rustle – One nightmare at a time!   Fear of Agnew is what kept Nixon in office for a while.  

    /NG/Burr – Those inventories are coming down nicely.   Very on schedule for $4 eventually.

    /TF/Angel – They looked bouncy at 1,390 so I took $4,000 in profits – is that a bad thing?  Always a fresh horse to ride if we break lower and I do still have my /NQ shorts (2) that haven't paid yet at 5,293.

    ORLY/Yodi – Don't forget electric cars need far less parts – an issue for the long run.

    GNC/JMD – Well, they are at $7.50 and $9 is certainly not out of the question so no need to do anything.  The $10 puts are $5.10 and the $5 puts are $2 so you could roll 20 $10 puts to 50 $5 puts about even and then, if you sold them for $2, your net would be $4 on 50 = $20,000 – not much worse than your current risk but with a much easier target.  The $7.50 calls are $3.60 and the $5 calls are $4.75 so if you can do the $2.50 roll for less than $1.35, why not?  As to the short $17.50s, they are $1.25, which is a rip-off but the June $10 calls are 0.60, which is a bigger rip-off so I'd sell 1/2 of those and put a stop on 1/2 the short $17.50s over $8 (the stock, not the call) to keep balanced.  Meanwhile, I'd offer $1 to clear out the short $17.50s so you can sell more Junes.

    Stops/Crs – If you set close manual stops they will almost always trigger as the machines poke in the opposite direction before making a move (called "flushing the stops").  I do keep stops but they are mental ones and I don't rush to trigger unless I see that my line is hopelessly breached.  It's like hitting a curve ball – the more you see, the better you'll get.  

    /NQ/Japar – Well, my basis is 5,293 so not really inclined to DD at all – if we're over 5,300, I'd rather take my $140 loss and go home.  I got my /TF money, the /NQs were only and example because I thought 5,300 should be rejected fro a few bucks – that's all. 

    /NKD was the one we should have played – I talked about it but it didn't hit our 19,500 line until after the Webinar (and the close) but now 19,200 was a nice drop.  

    That thing sounds cool, Burr!  

    Dollar may be coming off the floor at 100.50.

    ENB/QC – They do a lot in the Gulf, which is going to be slow to come back.  For a pipeline company their p/e (even with generous projections) is high in the mid 20s.  If they keep paying a 0.44 dividend quarterly, that takes a lot of the sting out but it's 4.1%, not sure what you think it is.  Options only go out to July so it wouldn't be something I'd mess with though not terrible if you sold the $40 puts and calls for $6, which is 15% of the stock price.  That and the dividend make it reasonable.  

    Charlie/Angel – So the cranky old rich man says the other cranky old rich man has a point?  

     

    Money Laundering/Angel – It is way harder to launder money these days.  Under Bush, two banks max and  you could wash almost anything clean now you have to pay fees at 4 or 5 banks to launder your money properly – it is a travesty!  

    Image result for money laundering scarface animated gif

    Recess/1020 – Wait, didn't they only just get here?  


  60. Qcmike – FWIW,  I saw notes from both FBR and Mizuno on Jan 30.  Both firms downgraded EEP and are looking for a distribution cut.


  61. Crash? No way says Armstrong. Dow going to 23,000:

    "I have been stating persistently that the Dow cannot “C R A S H” when the majority are bearish and retail participation is at historic lows (see Gallup poll)…the bulk of buying is short-covering – not fresh longs. This is very important. Fresh longs buying new highs turn sellers on a downturn. Short-covering does not…"

    https://www.armstrongeconomics.com/armstrongeconomics101/training-tools/understanding-the-rally/


  62. Cramer and Gartner both long, too… go figure.


  63. PHIL that was a great trade I thought you were indicating out higher.. nice go!

    Market participants have come to expect intraday recoveries I am anxious to see if we DON'T close at the LOWS today


  64. Gartner -> Gartman.


  65. Burr – appreciate the support! thanks .. Taking a lesson from Phil, I will next time keep at least one short going to honor my original conviction.  I did originally have my stop at 151 on RB but compromised at 153.5, felt I was being greedy and RB was resisting too long for me. I've already lost enough sleep on it. 

    I like RB long but I think 151 or lower is likely before the 23rd.


  66. Gartner < a steaming pile of horseshit.


  67. LATCH I used to pay a lot of money for his tripe he Faber Roubini I could go on and on dreadful track records and people lemming like buy their drivel.."one must need be short of oil" what a pomposity of pompositiouness #oldundiesdennis


  68. SORRY L MEANT HANG WHY DO I CONFUSE THE TWO OF YOU!!


  69. Gotta love NYC street art:

    Putin Trump Hater dating app

    Let’s not mumble or whisper about the central issue facing our country: What is this democratic nation to do when the man serving as president of the United States plainly has no business being president of the United States?

    Obama went eight years without a major White House scandal. Trump lasted three weeks.

    Michael Flynn resigned on Monday evening as national security adviser after admitting to misleading Trump and Mike Pence (who repeated Flynn’s version of events on national television) on the nature of his calls with the Russian ambassador, which took place weeks before Trump was sworn in as president. It is now clear that Flynn and the Russian ambassador discussed sanctions imposed by the Obama administration while President Obama was still in office, which is a big no-no for an incoming administration.

    But the most important aspect of Flynn’s resignation isn’t that he (allegedly) lied to the president and vice president or even that he discussed sanctions with a Russian official. It’s that, as Jeet Heer wrote on Tuesday morning, Flynn’s relationship with Russian officials increasingly looks like the tip of an iceberg of compromising and possibly illegal links between Trump’s campaign and the Kremlin. 

    A group of Rep. Dana Rohrabacher’s (R-CA) constituents went to his office on Tuesday to deliver Valentine’s cards. They go every Tuesday now, asking Rohrabacher to hold a town hall meeting in his district.

    But now, after a confused tussle in the hallway involving a 2-year old and a 71-year-old-woman, Rohrabacher is now accusing them of engaging in “political thuggery, pure and simple.”

    This is like living in a cartoon depiction of a tyrannical state…

     

    Japan has just invented Robo-bees that can legitimately pollinate the earth

    This is the best:

    Hillary used an Email server that MIGHT have been hacked – he spoke directly to the Russians and then covered it up, lying directly to his President and Congress.  Lock him up!


  70. angelcur/confuse  Because we are both amazingly good looking and smart.


  71. agree Han , but I thought it went without saying, yet it is good to remind folks occasionally.


  72. With all this talk about the inequality amongst the classes, the part that rarely gets media play and for me is the most horrible is how it effects our kids.  https://www.yahoo.com/news/keep-taking-meds-oecd-tells-ailing-italy-143252487.html.  SAD?! Hell no, MAD! is what we should be.


  73. Phil. Cl. 53.33. Like another short?

    I feel like I'm gonna get caught once


  74. Phil. With /rb roll so pricey will that pull front month /fb higher to lessen the roll pain?


  75. Anything to do with the SCO/SCHN positions expiring tomorrow?


  76. robobees/ too bad we don't have belushi to push them around


  77. Phil,

    Any thoughts about risks of letting the SCO 2/17 30/32.5 bcs expire tomorrow vs closing out now? I know you are out of oil futures. Curious as to your assessment of waiting another day to cash out the SCO bcs – risk/reward.

    Thanks in advance


  78. Out of /RB @ 1.532 for a few nice dinners.


  79. PG leaping to new all time highs!


  80. SCHN will go worthless and BCS SCO Why pay .40  premium let it expire


  81. BURBB thats a hell of a great counter trend play!


  82. Latch, this /RB play was long into a holiday weekend.  We talked about it on the webinar.  Let /RB bottom out, then go long and take quick profits.  There wasn't much downside risk if you don't hold, but some upside potential.  

    I'm short a /CL @ 53.40 again.  Just want to squeak out a little more as I'm going to SanFran this weekend.


  83. Scott don't you guys have a butter fly on PG it looks good!


  84. PG/Yodi – not me..


  85. TSM – too… and so many others at new highs, going strong.. does NOT look toppy, and P/E is "only" 16.5, downright reasonable these days.   gawdawlmightee what a market.


  86. Scottmi/PACB  Today we should get that close above 5.39.  


  87. Phil, Anyone,

    This press conference is just crazy crap, or as Phil would say cray-cray! 4 years of this, I may take to the bottle….


  88. Scott TSM is 10$ higher than Jun last year. Don't like plays if the stock is at the top of it's graph.


  89. PACB/Hanj – :-)


  90. scottmi/PACB I am out at 6.73.  No shitting you.  My trade thesis was a gap close.  


  91. jasu – press conference – agreed! does not inspire confidence. I was wondering how the indexes are taking it.


  92. Yodi – I know.. but gives you a good stop!


  93. They are surprised and flat at this time…..ROFL….


  94. Trump talking about how he inherited a mess. What the hell did Obama inherit then? 


  95. Trump talking about his great ratings and how Fox and Friends is the most honest morning show.  I live in an alternative USA


  96. Scott Good stop! love to see what play you would suggest


  97. OMG—--this is our Prez


  98. TSM/Yodi – considering but haven't dived into it yet. too distracted listing to the world according to Trump. Wow, he just lays it* out there. I hope the press people know this is *his* briefing and are not under any illusion that it is theirs..

    *definitions of "it" will vary widely!


  99. Trashing Hilary for not admitting she knew debate questions.  Seriously that was more than 4 months ago.  Then says "I'm not a bad person, by the way."

    Like snorting coke on the weekend and saying "I'm not a drug user, you know"


  100. When does Woody Allen come out and say "CUT, CUT!!"?


  101. Scott what can I say the majority chose a clown, so now you have one. fun to watch


  102. Obama inherited a big mess too double fudge big mess..we ve always had a mess all the clean up now will have to do with actually helping the middle class not sure a multi billionaire is the guy to do it but if he is its a mitzvah


  103. Yodi don't gloat let's see how Germany does when they elect a populist 

    Europe is going to go hard right scary


  104. ANGEL Great to get something else than Merkel she screwed up big with her Flüchtlings politik.


  105. Trump with a long, rambling press conference.  Says over and over again that his nominees are being unusually delayed but they held Obama up for 10 weeks before confirming his cabinet and this is week 3 for Trump.  Also, as evidenced by one resignation and one withdrawal already – he's putting forth unqualified, unacceptable people and trying to bully them through the process regardless – THAT's why it's "difficult."   The point of the process it to compromise with the opposing party on your picks – that's not even close to happening.

    Says news is fake but the leaks they are reporting are real and need to be investigated.  Fake news was illegally given true information about Flynn which led to his real resignation and it's not Flynn's actions but the actions of the media that will be investigated – amazing!  

    Oil/Burr – Of course, anything around $53.50 is a good spot to play though there is certainly a lot less downward pressure now than there was this morning so just looking for a quick $250 or so. 

    /RB/Burr – No way to know, it's an unusual gap and, so far, the front-month /RB is holding $1.51 (hasn't recovered like /CL either).

    SCO/8800 – SCO is at $32.74 and we bought the $30/32.50 bull call spread for $1.15 and it's now $2.10 and should gain 0.30 (14%) tomorrow.  Do I have a better way to make 14% in a day than leaving it alone?  No, I don't.  Do I think Oil will go higher than $43.50 and drop SCO below $32.10 (net $2.10) in the next 24 hours?  No, I don't.  So I leave it alone.   If you want to be fancy, you can cash $2.70 on the $30 calls and leave the short $32.50s to expire (now 0.34 in the money) and you might do better – you might do worse…

    Killer robobees/Rexx – Good image!   What ever happened to those killer bees anyway?  

    Image result for killer bees snl animated gif

    /RB/Burr – Very nice.  

    SCHN/Yodi – No question on those at all.

    WTF?  Trump just said "nuclear holocaust would not be a good thing" re. dealing with Russia.  Wow, I feel confident now…

    PG/Butterfly, Yodi – We sold the April $87.50 calls and $85 puts for $3.90 so under $91.40 is our goal on this leg.

    Bottle/Jasu – I think we're way past that…  

    Maddie said to me last night that she thought she was getting depression because she couldn't stop reading about all the horrible things this administration is doing.  I had to tell her about the Nixon years and the fact that I pretty much spent Reagan's term drunk and stoned in College and after but these things do pass.  She said she'll look forward to some drinking (17 in July) but doesn't want to be a pothead so she'll try to focus on good things and look forward to the next election.  Was a good talk…  cheeky

    OMG – he's still talking!  What glory for an egomaniac like him with the gold background…


  106. Trump – look people – we can be the smartest guys in the room predicting how to invest given the situation. That's our job here. Let's do a good job.

    We could time the market top for instance.


  107. Phil / nuclear holocaust:

    sounds like "puts" may be in order …. :P


  108. BioD- agreed, that is why I asked about the index responses..seems to have calmed the animal spirits for the moment ? I think we are moving from the market taking direction from the Fed and more towards Trump. 


  109. Latch – we could make a lot of money here – we gotta be team players though. I've got thick skin (or so I think) so no problems at all slingling the political mud around, and personally I find it quite enjoyable - but let's do it within the theater of trying to out-fox the crystal ball. That's my call out for PSW for the next 2 years. 


  110. I had to turn off CNBC; this episode of SNL wan't that funny – no one got chased with a podium or anything.


  111. Phil – CL pressure. Yesterday when you showed us the futures open interest it was 174826. At the moment it is 119369.  Is this the lower pressure you are referring to? Looks like 20000 went to April already. I am curious as to what the number will be when March expires


  112. Phil — Daughters — you are not alone.  I had to have the same talk with my daughters (19 and 22). More so with the younger one, who is genuinely horrified by the things she has seen and heard in the past year. And it wasn't just booze that got us through the Reagan years, it was Dead Kennedys, The Clash, Gang of Four, etc. But that era passed, and so will this one.


  113. I am starting to dig a nuclear shelter in my backyard. This guy is totally off his rocker! They have to impeach him before he does something nuts! I noticed that even Latch is not that impressed anymore!



  114. Reagan/ I won a case of Beer on Reagan 1980,  I figured it was a hedge against getting drafted.

     And my old man didn't get a haircut during the Nixon years…

    Now I tell my kid that I only read the obituaries,  (And the kid told me History teacher said the same),

    Here's a good one from last week. https://www.nytimes.com/2017/02/06/business/lorenzo-servitje-a-founder-of-the-worlds-biggest-bakery-dies-at-98.html?_r=0


  115. And to put this market in the perspective of the last 8 years:

    http://www.motherjones.com/kevin-drum/2017/02/chart-day-sp-500-end-great-recession


  116. Comment content omitted because it is too long.


  117. Cut/Rperi – I wish!  

    By the way, the Dems have ZERO ability to block his nominees.  The only reason nominees don't go through is because his own party defects and votes against them.  

    Trump goes "Can I be honest with you?" Wow, finally?  

    Done, finally.  Not one word about the tax plan – useless re. markets.  Russia is all "fake news" according to Trump but the leaks about Russia are real and those will be investigated.  Essentially what he said boiled down to "No, I will not punish Russia for interfering in the election or investigate it and, if you ask me again, it's nuclear armageddon time – so shut up." 

    Brilliant, annotated version of the press conference from WaPo (click yellow text for actual facts).

    To be clear to viewers around the world, in the last 3 press conferences, Trump has ONLY called on conservative news outlets for questions

    President Trump says he's not "ranting and raving," says he's having a good time https://www.bloomberg.com/live


     

     

    6 hours ago

    Things propping up the market the last few years that we no longer hear about: Margin Debt Share Repurchases QE/Central Banks

    Tr*mp complaining about these leaks is like the boyfriend who says the problem isn't that he cheated, it's that you looked at his phone

    President Trump says Chicago is worse than almost any place in the Middle East https://www.bloomberg.com/live

    Trump says he had nothing to do with Russia, asks why no one is talking about Hillary Clinton's debate performance https://www.bloomberg.com/live

    Q: Was anyone in your campaign in contact with Russia during campaign A: Hilary got some debate questions!

    President Trump says health care reform will come in early March before tax reform https://www.bloomberg.com/live

    TIME’s new cover: Inside Donald Trump's White House chaos

    Donald Trump Nothing to See Here Time Magazine Cover

    Goldman thinks a metals rally is in sight

    this press conference is insane but as long as donald cuts my taxes im cool with it

    Warren Buffett may SAY his favorite holding period is forever, but his portfolio has changed a lot. -A -B

    Changing views of Republicans help lift positive views of the economy


  118. Jason Chaffetz has no response for a little girl who asked if he believes in science

    President Trump says the roll out of the travel ban was smooth, but the court was bad https://www.bloomberg.com/live

    Water as an issue for U.S. national security lacks visibility & sufficient funding,

    Trump's administration should be investigated, from top to bottom

    Early impressions: Fewer view Trump as trustworthy, well-informed than Obama, Bush, Clinton

    Near-universal family planning would cost $3.6 billion per year. But the benefits would be 120 times that amount

    The ECB may be willing to bend its QE rules in a push to keep up stimulus

    "But if we have a nuclear holocaust, it will be the best nuclear holocaust"

     

    Inside Trump's business dealings with a mob-connected hustler:

    only 9 hours or so till the next massive newsbreak that will prevent us from having lives again

    Britain receives a final warning from the EU about its air pollution levels

    Chart of "the failing NY Times"

     


  119. "The point of the process it to compromise with the opposing party"

    No, it's not, but nice try. The point is to vet the choices of the duly elected president.

    That process has brought us to this point. Some process, huh?

    Hope and change…  well it's changing, and all we can do is hope at this point.


  120. Who's short /CL and at what avg? 


  121. I am at 53.4. 

    Phil are you all out of index shorts? If so when would u add more?


  122. Turns out it's a really good time for Maddie to try pot:

    President Trump says the U.S. is becoming drug-infested, and drugs are becoming cheaper than candy bars https://www.bloomberg.com/live

    Buy low, get high!  cool

    Investing/BDC - Yes, well from that press conference, we now have to consider what policies the administration will actually pursue and how that will affect the Dollar, rates, trade, etc.  And, of course, you have to know which companies the President likes and which ones he doesn't – it sucks to lose 10% on a tweet in the morning…

    Overall, I'm more concerned with whether or not my general premise that the market is toppy is right or wrong and I still lean right on that one as I hear nothing from Trump that makes me think he has a real plan to boost the economy – more like a plan to take credit for what he inherited from Obama before he flushes it all down the toilet with idiotic tax breaks (a la Bush II) and misplaced stimulus.  Not to mention this "emergency" rush to take away the Health Care from over 20M Americans.

    Holocaust/BDC – What company makes iodine pills?  '

    LOL Dsheara.  Not funny but great material for the weekend.  

    By the way, John Oliver is back and there is no better way to cheer up after that horrifying press conference:


  123. I've got 1 at the same price Burr


  124. Hoping for 53. I want to buy a moonshine still


  125. /CL/Latch – Yes, if they got rid of 60M barrels in one day and all they did was dip to $52.50, then it's reasonable to assume they can get rid of 120M in 2 days without much more pain than that.  So today, we hit $52.50 again (must be the same program) and right back up and now we'll see what they are stuck with tomorrow morning but clearly they are doing a good job rolling their barrels and lowering the pressure on the expiring contract.  

    Rock/Esco – Oh yeah – I was a city kid, saw hundreds of great concerts.  Best of times/worst of times…

    Obits/Rexx – I'm not there yet.  That was another good one from yesterday's conversation – I was chided for waiting too long to have children (37) because I'm going to die when Maddie (16.5) is relatively young and she doesn't know how she will cope.  I told her I think I can hang on a few more years and we all learn to deal with these things over time.  I also told her this is why I'm fine with her being a teen Mom – as I'd really love some grandchildren!  

    /CL/Jeff – I have 2 short at $53.45 avg.  

    Indexes/Burr – I just have the 2 /NQ shorts, need to let the broad population digest whatever the F just happened.  

    Moonshine/Burr – I never saw the need when I could just pick up the 151.  


  126. I bought my cl back at 53.37 as I gotta run errands. I'll short over .50 again. 

    No still for me yet, just a sashimi lunch. 


  127. grandpa phil/ but then you wont be able to buy her one of these http://i.imgur.com/e5f2ROX.png


  128. Phil/Cope  Maddie just needs to spend her first year attending UCSD and I promise she'll feel much better…. ;)


  129. Phil

     ENB/QC – They do a lot in the Gulf, which is going to be slow to come back.  For a pipeline company their p/e (even with generous projections) is high in the mid 20s.  If they keep paying a 0.44 dividend 

     Did you look at EEP  ?

     thanks


  130. Good article about valuation:

    http://theirrelevantinvestor.com/2017/02/13/should-stocks-be-worth-more-now-than-they-used-to-be/

    Stocks are not cheap. The CAPE ratio is 28.46, above the long-term average of 16.73 and more expensive than 96% of all readings. But exactly how expensive are they, and what might this mean for future returns?

    The chart below from Star Capital shows that the more expensive stocks are, the deeper the average drawdown. Also note that terrible losses are not limited to expensive markets; Cheap can get significantly cheaper.

    1


  131. Alan Greenspan, the former head of the Federal Reserve, warned on Thursday that even as the global economic outlook brightens, economists should beware of a “false sense of recovery”. The 90-year old said before The Economic Club of New York that there are some signs that the economy has emerged from a long period of “stagnation” that has persisted since the end of the 2008 recession. However, it is difficult to judge whether it is a durable recovery or merely a shift into “stagflation”, he said.

    Stagflation, or higher inflation with weak growth, would represent a substantial setback for policymakers since it is difficult to quell inflation without putting downward pressure on economic growth.


    “The vitality of our democratic institutions has been impaired,” he said. “Populism is not an economic philosophy but but a cry of pain for some leader to arise and ease that pain”.

    Veteran Black reporter asks Trump if he'll meet with the Congressional Black Caucus. His reply, "are they friends of yours?

    Trump reportedly heading to Mar-a-Lago for third straight weekend, obliterating campaign promise

    Trump has two settings: 1) A student giving a presentation without doing the reading 2) An angry customer who wants to talk to your manager

    Who is Alex Acosta?

    A Jewish reporter asked about rising anti-Semitism, and Trump called him a liar, told him to stop talking, and didn't answer the question.

    Trudeau, praising the E.U., doesn’t mention ‘brexit’ or Trump

    ICYMI: Trump makes media people squirm with insults that they also cannot respond to with equal force

    “I inherited a mess” is how I begin most doctor's appointments. I write it on the clipboard.

    It's a waste of time to try to turn Pinocchio into a real President. The focus needs to be on the Geppettos and legislators around him

    I think Trump believes what he's saying which is radically more disturbing than conscious lying.

    Americans are facing a $50 billion headwind

    Reporter 's harrowing account in of her arrest for the crime of journalism. http://www.cjr.org/local_news/rep


  132. Are yields giving us a warning message:

    http://www.marketanthropology.com/2017/02/connecting-dots-21617.html

    In fact, with todays CPI data, the 10-year real yield (nominal-CPI) went negative for the first time (on a downside trend) since May 2011; with the next previous occasion in November 2007 – both times not exactly prudent spots to own stocks.


  133. TSM/Yodi – for me, this would be a breakout/trend continuation play. Long. Offers 2.96% dividend (annual payment only, in june).  Last year's breakout that looks similar went from about 26 to 31.. So approximate 19% run in the year..applying to current price gives end of year target around $38. LEAP options do not have much depth/open interest so not heavily traded. $167Billion market cap so not likely to be bought out. Suggests different plays to me:

    1/ buy the stock. Stop at 31.30.  in favor of this is the dividend potential, and the quick exit possible for stock and known loss amount (not like an option premium evaporating and suddenly your loss is greater than planned) if we are actually at a top and get a pullback.  Very simple, traditional. Cover with a short call a bit later if it holds/advances (i.e. Jan2018 $40 calls for $1.20 or better). I would not sell puts here. For a 100 share position bought for $3,237, your risk is $108.  Risking 3% for a 17% gain ($563 profit at nominal target of $38). A nice Tharp R of 5.79

    2/ simple option play, is a lower cost stock replacement using Jan2019 long calls. To assume 100 shares as the shares you would have bought for $3,237 and delta of 100, you can buy 2 Jan2019 $25 calls at $8.00 (using mark for the math here) for  $1600 providing 163 delta… but your loss if stopped out is greater, too… ~$176.   Risking 11% for a 62.5% gain ($1,000 profit at nominal target $38). R of 5.68

    3/  Ratio calendar (the ratio is in case somebody gets cute and it zooms to the moon for whatever reason): Buy 15 Jan2018 $35 calls, sell 13 July $35 calls for net $1,115, providing 156 delta. Nominal target is now $35, and earlier in year (July) so expected faster payout. If stopped, risking $200 (rounding up, and making fixed amount loss), so risking 18% for a 143% potential gain ($1600 at nominal target $35).  R of 7.9.

    I like choice three. Similar would be a 10/9 ratio (or a multiple of that).   I really don't expect them to race so far by July, but I've been burned to upsides, too.  

    Phil – any thoughts and/or improvements welcome!


  134. /si finally over 18


  135. Yodi / ORLY -

    I like your play on selling the August puts….  I followed the company for several years but never pulled the trigger due to valuation.  They have a great supply chain and have done a  good job of using that to improve margins – GM up 2% avg the last 2 years, with most going to NI.   They also have a fairly smart management team.   The store are always clean and they hire knowledgeable people.  I am a bit concerned on the Tariff if  w/ MX since they source there as well as china.  At first glance if they can bring at 12.3 EPS in 2017 and maybe 13.9 in 2018 at a 25 PE 307 and a 20 PE gets them to 246 which is.  A good target on them may be about 285 / 290 in the next 12 to 18 months.   If this was put at a net 233 ish it may make a good entry on the stock.  The charts look kind of ugly over the last 5 months ….   I need to spend a bit more time on this before joining you, but thanks for bringing this up.


  136. Hanj – ORLY – Can you provide your view not he charts not this?


  137. LOL Rexx, I'm sure I will, not even a boyfriend yet.  These kids are so boring compared to us…

    UCSD/1020 – She wants to do art and psychology.  Made honor roll again so she should get her choice of schools (only a year away – holy cow!).  

    EEP/QC – I did not look but they seem much more reasonable with $500M in profits and $5Bn market cap at $18.25 and no drag from deep sea.  That takes away my primary objections for sure!  They pay a $2.33 dividend (12%) for now but projections are for a significant downturn in profits and that's why they went off a cliff after earnings.  

    I don't think they are "in trouble" but they probably will cut the dividend significantly so I'd start an entry by just selling the 2019 $17.50 puts for $3.31 so you get that instead of the dividend and worst case is you net in for $14.19 (22.5% off) and you save on having to hedge a full position.  

    CAPE/StJ – He comes to the same 50% overvalued I'm seeing – that's scary.  

    TSM/Scott – Well you have the Taiwan risk, which is back on the table with Trump's unclear China policy – keep that in mind.  Overall, they are a good, reliable company and really big ($164Bn) but with $10Bn in earnings to cover it – so a great deal compared to other semis.  

    Unfortunately, their lack of movement doesn't give them great option prices but $30 is probably a good floor and you can sell the 2019 $30 puts for $3.60 and that's about 20% off, so a good start.  Alternatively, the dividend is 0.94, which is nice (3%) but not nice enough to make me skip the discount.  Figure a 20 p/e would be the target at best so maybe $40 at best but you know I don't shoot for the moon so my play would be the 2019 $25 ($7.90)/$32 ($3.50) bull call spread at $4.40 and that would be net 0.80 on the $7 spread that's in the money to start.  Margin on the short $30 puts is just $4.15 so nice, efficient way to make $7.80 in two years – and we don't even need the stock to move higher.  


  138. TSM/Yodi – alternative stop is 30.50… would have to rework numbers.


  139. Punching up into the close – no matter what…

    Dollar finishing at lows – 100.44.  


  140. Is NG a good long now? 


  141. Phil – did you get my FAA scheme from last week? (I know you were busy with the seminar)…


  142. Phil - Pence/Rustle – One nightmare at a time!   Fear of Agnew is what kept Nixon in office for a while.  

    Have no fear, the new Gerald Ford is here, aka President Paul Ryan.  Sounds strange, I know, and as Stevie Wonder said…  Out.


  143. Speaking of Korea – Samsung's Vice Chairman, Lee Jae-Yong is being arrested (again) in connection with bribing former President Park.

    /NG/Kgabor – Very tempting given our general liking of it at $2.837 but, close to $3.15 ($3.177), I'm more inclined to start buying /NGV7 (Oct) and go long into hurricane season.  Then we can short the front-months if we don't like the way they are going to cover.  

    FAA/Rexx – If it was Emailed, I will hopefully catch up tonight but, if not, then Sat. 

    Ryan/Naybob – Wow, the horrors never stop!  


  144. phil, i got caught long the dollar at 101.5

    it was encouraging to hear you say this morning that 101.5 is where the dollar should be, but i don't feel so confident being this close to 100--for fear we might break lower.  i think confidence (or lack there of) in this administration, that's impacting it despite the financial fundamentals being good.


  145. Phil/Art & Psych  San Diego would be perfect….


  146. Phil/Koreans  Their Chaebols make the mob look like the boy scouts.  And its state sponsored and encouraged.  


  147. Phil/EEP  did someone say acapolco cliff dive?? I'm in!


  148. PGNX….was also on buyout rumors galor.  Will get out tomorrow if it does not fade.


  149. I'm short /TF at 1400….again. 


  150. I was asked to summarize the US Economic outlook for Dirigentes (Spanish):

    Though the US economy is clearly improving, Alan Greenspan warns that it may be the illusion of growth while what we really have is a return to Stagflation (a stagnant economy with inflation).   https://www.ft.com/content/ced8b126-915b-326e-b3ad-3e8beb2701f2

    The Federal Reserve sees low unemployment and high CPI and PPI numbers and feels pressured to act before they let the inflation genie out of the bottle but acting too soon or too much can force a market correction that would quickly set back the GDP.  Most analysts are expecting roughly 3% growth in 2016 which, for the $19Tn US Economy is still $500Bn – as much as 5% growth in China or 35% of Spain's $1.4Tn GDP – so it's still very impressive. 

    If the Fed manages to get their balancing act right, unemployment should remain low and growth should be in-line but the real wild-card is the Trump card – no one knows what he is actually going to do and up in the air are issues such as Trade Barriers, Currency Manipulation, Infrastructure Spending, Health Care Coverage, Bank Regulations, Military Spending and Energy Policy.  Since we have no clear picture of what is going on in these MAJOR areas – anyone who tells you they know what the US economy will do in 2017 is presenting you with alternative facts!

    What I will say about it is that the markets are priced as if ALL of these things will be a positive and that simply is not going to be the case so the markets are very likely over-priced and heading for a correction of probably 10%, possibly a bit more between now and June – so be very careful before jumping in at these high valuations.

    - Phil

    Nice short Jeff.  


  151. OOP

    The OOP or at least my version of it is going gangbusters!!!

    THX Phil!



  152. Auto subprime…. :)


  153. Snap cofounders Evan Spiegel and Bobby Murphy plan to each sell up to $256 million in stock when their company goes public in March, according to documents filed with the Securities and Exchange Committee on Thursday.<p>The Snapchat maker is seeking to price its initial public offering at $14 to $16 …


  154. “Illegal aliens are taking our jobs.” “Nope.” “Then they’re all on welfare.” “Nope. They’re productive members of society.” “How are they productive …


  155. If it feels like this bull market has been going on for a long time, that’s because it has.<p>In fact, the current market rally, which has lasted 2002 trading days, is the longest one since the rally that preceded the 1929 stock market crash.<p>Coincidentally, that rally lasted 2002 days (cue dramatic …


  156. This will end well!<p>by chindit13 – Feb 16, 2017 9:03 AM<p>Trump has his own flock of Sheeple, who are missing the most important aspects of his …


  157. Felix Kjellberg, known to his fans as PewDiePie, is by far YouTube’s biggest star. His videos, a mix of video-game narration, humorous rants and commentary, have cumulatively been viewed billions of times, and more than 53 million people subscribe to his channel. He has been called “the king of …


  158. The latest rumor for Apple’s next iPhone comes from JPMorgan analyst Rod Hall who claims that Apple will be adding a front-facing 3D laser scanner for facial recognition to unlock the device, as noted by <i>MacRumors</i>.<p>Hall claims that the 3D face scans will replace the fingerprint-based Touch ID system, …


  159. Markets are at record highs, but optimism breeds recklessness. The question is how big the bubble will get before it bursts<p>All three main measure of the health in the stock market are at record levels. Donald Trump is bragging about the boost he has given to share prices. Bourses around the world …


  160. Most businesses wouldn’t survive without driving demand for their products or services, either through marketing and advertising or through involving users so deeply in the design of the product that word of mouth spurs adoption. The same is true for social innovators. However, unlike many business …


  161. REUTERS<p>Former Federal Reserve Chairman Alan Greenspan has again defended the gold standard monetary system that the US dropped in the 1930s.<p>The gold standard pegged the value of the dollar to the precious metal at $35 an ounce, and the US central bank promised other central banks to exchange …


  162. “Are we building the world we all want?” That’s a question often reserved for the lips of presidents and religious leaders, and too rarely asked by CEOs. But technology has risen as a force that unites us, alongside government and faith. So too must captains of industry rise to accept their …


  163. With the stroke of a pen President Trump wiped out the Stream Protection Rule, an Obama-era order requiring coal companies to help protect streams and forests.


  164. AP FACT CHECK: Trump’s messy case that he inherited a mess

    WASHINGTON (AP) — President Donald Trump on Thursday made a messy case that he “inherited a mess” from former President Barack Obama. Economic stats and territorial losses of Islamic State insurgents don’t support his assertions about the problems handed to him on those fronts.<p>A look at some of his …


  165. Want to feel engaged at work? Try spending most of your time at home.<p>According to a new Gallup poll of 9,917 employed US adults, there is little difference in engagement between employees who work from home full-time and those that come into the office full-time. Workers who spent <i>some</i> time working …


  166. When Elon Musk’s SolarCity hosted stock analysts about a year ago to gush about its prospects in the solar industry, Gordon Johnson was nowhere to be …


  167. Phil – shorting TF.  I believe the market will push higher when Trump release his tax plans thru Munchin.  Do we have any idea when that will happen, so we can get out of the way?


  168. Border agents dismantle a weird-looking drug catapult used to toss marijuana over the fence between Mexico and the US.<p>A bizarre contraption caught the eye of federal agents patrolling along the US-Mexico border in Arizona last week. After seeing several people on the Mexican side running away from …


  169. The hotel business is competitive, but <b>Marriott International</b> (NASDAQ: MAR) has been an international leader in the industry for a long time. With the company having finished its merger with Starwood Hotels & Resorts in late September, Marriott just finished its first full quarter with the combined …


  170. General Electric currently offers income investors a safe long-term investment. The company has a fortress balance sheet, solid cash flow and a …


  171. Life near Oroville Dam now shadowed by fears and concerns

    OROVILLE, Calif. (AP) — Northern California residents, who had spent days at evacuation shelters, were allowed to return to their homes but many stayed only long enough to pack valuables before fleeing an approaching storm that will test recently repaired spillways at the nation’s tallest dam. …


  172. China is going to build 800,000 new charging points this year in support of the booming new energy vehicle (NEV) market. The figure includes 100,000 public chargers and 700,000 non-public chargers. The latter category consists mainly of company-charging points, and charging points for taxi’s, buses …


  173. BONN, Germany (AP) — Foreign ministers from the Group of 20 leading industrialized and emerging economies are starting two days of talks in the former German capital, with a focus on global development.<p>Germany, which is hosting the talks in the western city of Bonn, wants to keep up momentum on 17 …


  174. Wall Street and Main Street perk up and take notice when superinvestor Warren Buffett buys a bunch of stock in a major company.<p>This week, the Oracle of Omaha’s investment vehicle, Berkshire Hathaway, generated attention by boosting its stake in two major airlines with deep Chicago-area roots, …


  175. In Dave Cote’s mind, the case for optimism is clear. The CEO of industrial giant Honeywell believes that the U.S. economy is poised for a surge under …


  176. Gluskin Sheff + Associates chief economist David Rosenberg says he has been hearing whispers that the federal Liberals will table a “soak the rich” budget in the weeks ahead – one that includes a steep hike in the tax rate on capital gains.<p>Mr. Rosenberg said in his morning note that the …


  177. The last time investors were this optimistic about Macau casino stocks, it didn’t end well.<p>Back then, in 2014, bulls misread a Chinese …


  178. Fyi, /CL rolled over on TOS.  Hanging @ 53.80.  /CLH7 is still @ 53.42.

    I was hoping it WAS @ 53.80 as I was ready to hit the SELL SELL SELL button!


  179. Thanks Burr. I saw that and had to re-input CLH7.  Hoping for one more ride down.  Think it will hit 52.75 again? 


  180. /Burr- IB will allow March CL till 9pm on Monday 20th February. 


  181. To my comment about stock momentum continuing on Trump tax news. Great ZH photo!  http://www.zerohedge.com/news/2017-02-16/trumps-rookie-mistake


  182. Wow.  

    —with just one overseeing trading in the $117 billion U.S. oil market, where wholesale prices for gasoline and heating oil are set. By comparison, the U.S. Securities and Exchange Commission, which watches the stock market, has an enforcement team of 1,400. It receives $1.8 billion, part of which is funded by fees levied on stock trades. The CFTC gets its money from Congress.

    https://www.bloomberg.com/news/articles/2017-02-16/hunting-for-dirty-deeds-in-the-34-trillion-u-s-futures-market


  183. Good read on spoofing orders

    http://neurensic.com/spoofing-works-illegal/


  184. Maddie/Phil – you can tell her we had John Lennon to help us through, too. I wonder who will be the new voice of this era?

    Nobody Told Me
    https://m.youtube.com/watch?v=EImWL_ppAXM


  185. Phil/Maya/Seminar 

    Phil, 

    Thanks for the great seminar Phil.  I learnt a lot.  

    Maya, 

    Thank you for setting it up and made all the arrangements without a glitch.  Really nice of you to pay for dinner for all of us on last Saturday night.

    Looking forward to the next Futures seminar wherever it is.


  186. BDC – I wish I could just concentrate on making money with this moron in the presidency, but with a permanently disabled child and a gay child, I have to worry about He WHo Must Not be Named having them killed for not being "the right" kind of people.


  187. thanks for spoof read Burr.  Hard to believe they can make so many spoof orders for oil and not be caught


  188. /RB @ 1.5197.  Might be good for another long into Fri close if we get to 1.515 or 1.51.



  189. Crispr – The patent lawsuit is over and MIT/Harvard won.  This is good for GE as GE is partnered with them.  Coming from a friend who sells imaging equip for GE lifesciences.


  190. Scott looking again at your play on TSM, I could not get excited about this trade. I do not like to enter a play, when the stock is at an all-time high. Especially with a clown on the helm. You do not know what will be his next trick.

    Phil takes out the easy way by planting a typical tree and selling a leap put to reduce the cost.

    Over that period of two years you can weather ups and downs and hope for the best. Meantime selling cherry calls while you wait.

    I would prefer to set up a play with a stock like GILD, which has found a bottom and gives you a better chance of going up.

    Obviously Phil caps his play at 7.00 been now already full ITM. So you will not gain more, and only can lose if the stock goes down by Jan 19.


  191. Good morning guys,

    Today I am looking at two BPS to provide a margin of safety. Obviously you could sell the same as well as a cash secured put but with a very much higher margin and risk.

    MA sell Mar 10 107/105 BPS for .32 cents. PM margin 170.00 max loss 168. Return over 18% over 21 days.

    AAPL, one of our favorites, sell Mar 24 BPS 131/129 for .40 cents. PM margin 156.00, max loss 160.00. Return over 35 days 24.5%.

    As usual make your own research and don’t bet the farm


  192. An other play I like is JNJ  tree planting here! We should have done this already a bit earlier but still looking good. Buy Jan19 BCS 105/120 for 8.33 and sell the Jan19 110 put for 8.10. you can not beat this for .23 cents. Now while you waiting for your full 15 dollars, this is where you capped, you can sell cherry calls for the next two years. Now if you are very bullish on JNJ you could go up to the 125 caller to sell and your gain could be 20$. But it cost you 10.40 and you spend 2.30 to plant the tree.

    Your research as always.


  193. Oil go down. Short from the .50 line

    Can't sleep


  194. The X Greek financial minister Varoufakis giving good analysis on EU screwups mainly caused by Merkel's refusal to help Greece and other countries in trouble was the death of the EU and the reason brexit, shift to the right, and Putin gaining more influence especially to the Eastern block countries-Hungry, Poland, etc.  Every man for themselves and not a real Union. My next door neighbor is German, smart guy generally and says Merkle is a figurehead but Schauble is calling the shots.

    Yodi, how do you see that picture-I know you are no fan of Merkel.


  195. Playing w some /rb too @ 1.51


  196. Well that sucked blls 


  197. Jomp, I rather deal in stocks. My political view is the same as in the heart of many Germans, but most do not express themselves. Schauble, as finance minister is not calling the shots, but is managing his job well, I think.

    Many countries in Europe did not have the same experience than Germany after the last war.

    My father was given 50 DM after the war and told to get his ass of the bench. Mainly the southern countries are still sitting on the bench, keeping their mouth open, in the hope barbequed chicken will fall in to their mouth. On to Greece, the rich did look after themselves and let the country run dry. Still today the majority do not pay taxes, as they custom to put all money in their pocket.

    You cannot blame Germany for that. Each country had a chance to climb out of the hole, there was not even one stone over the other left in Germany! I have seen it with my own eyes. Sitting in the sun and drinking ouzo does help the bar tender but not the country. So obviously Schauble does not like to hand out fist full of money, while one uses the whip on the Germans to work.

    Regretfully this has changed in Germany now as well, many have become lazy as well

    .


  198. Good morning!

    Getting a nice little dip on the /CL contracts and the indexes are down too as the World has decided Trump is nuts based on yesterday's press conference.  If this market loses confidence, things can get ugly fast.  

    The guy says things that are blatantly untrue and his supporters here may not know what a fact is but the rest of the World is, for the most part, reality-based and President Trump is making us a laughing stock on the Global Stage.  Honestly, Putin could not have done more to quickly destroy America's standing in the World – even if he did actually try…

    Internals were super-weak yesterday too:

    Dollar/Lunar – Well a few hours below is no reason to panic.  Oddly enough, lack of confidence in this administration is still not a reason to dump Dollars because Dollars are what people panic into regardless.  Consider the leverage of actual Dollars flowing into the Market vs the $2Tn run-up in the S&P alone since the election.  

    As you can see above, there's a 1Bn share difference between advances and declines and figure the average S&P share is $50 so $50Bn net inflows for the day would take you 40 days to actually put $2Bn into the market to support the move.  There have been 60(ish) trading days since the election but 24 were red days (outflows) so the net bullish days were only about 20 for maybe $1Tn of actual money supporting the indexes.  

    Now, since the indexes (S&P by example) are up $2Tn and only $1Tn in actual Dollars went in – what happens when people want to cash out?  Well the Dollars that went into buying stocks are already in and the sale of stocks creates demand for additional Dollars – twice as many as were needed before.  Not only that but volume to the downside tends to be stronger so we could be looking at a sudden demand for $2-3Tn in a sell-off.  So Dollars go up due to demand while people panic out of bonds and equities – it's unavoidable.  

    It's also why quick gains in the indexes are quickly erased – there simply aren't enough Dollars in the World to support these silly valuations.  If the economy hasn't expanded by $2Tn (that's just the S&P so more like $6Tn for all indexes) then the valuation can't be sustained in a sell-off because there simply isn't enough money around to fill the sell orders at the pumped-up prices.   That's what happened in 2008 – people wanted to sell and there were no buyers at 10% off, 20% off, 30% off, 40% off….  That's when you find out what your stock is REALLY worth!  

    Houses too!  

    You're welcome Gerry.  As I said, I'm a bit uncomfortable with those gains – feeling the need for more hedging…

    Tax plan/Latch – First they have to actually propose one, then it has to get through Congress and then it has to be as PHENOMENAL as promised – I'm still short.

    /CL – We should all be switching to the April contracts (/CLJ7) - don't risk the weekend in March (/CLH7) contracts!  

    /CLJ7, in fact, just made a nice short right at $54!  

    Book/Latch – My comment is I have to write a book.  $30!  If I self-publish I've got to get at least half that money, right?  This one has 64 reviews so I'm sure thousands of people have bought it….

    One overseer/Burr – Yep, total joke.  That's why "THEY" can do what they do every month and I can point it out for 10 years and no one does anything about it.  Great examples on spoofing, thanks!  

    Lennon/Scott – Very true.  For Jackie it's Kanye, of all things.  Maddie likes world music, especially Asian, I have no idea what those people are saying.  The only concert Maddie ever wanted to go to (Jackie goes to lots) was a Japanese hologram "live".  It was really, really, strange…

    Seminar/Rookie – Yes, thanks again to Maya, who did a great job of putting things together – we had a great time in Vegas!

    Concentration/Criags – Well you'd better concentrate on having enough money to move to Canada, in the very least.  surprise

    /RB/Burr – I'm not very confident this weekend because of the rollover and the huge inventory build.  Also, President's day is not much of a driving holiday.  If you must play, I'd stick to moves over the $1.50 line with very tight stops below. 

    Crispr/Burr – That should mean 2017 will hopefully see a lot of advances now that ownership is settled.  


  199. True words Phil, the clown produces good material for the karneval season in Germany. I had some good giggles last night on one TV show. Even the news reports on local TV's producing great intertaining now, looking out for tomorrows joke of the day.

    Only the new US defence minister spoke some realistic words here. Europe has to pull up their socks.


  200. /RB-Burr- did you get out of RB long or DD?


  201. Yodi – for a new tree to plant, consider NVO


  202. test


  203. I got screwed by my /rb long. Dumped on me and wanted to get out with a 250 loss, but it dropped too fast. When I finally sold it, I sold two by accident and then it popped. Anyway it cost me 750. I made 500 on cl though. 

    Lesson, don't trade against algos in bed with a phone at 3am