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Fed Speak Week – 11 Fed Speakers Aim to Steer the Markets

Let the manipulation begin!  

After a 0.25% rate hike did nothing to deflate the market bubble, the Fed will take another swing at things this week by speaking to us 11 times and it will be Evans (Dove), Evans (Dove), George (Hawk), Mester (Hawk) and Rosengren (Dove) on Monday and Tuesday followed by Yellen (Dove), Kashkari (DOVE), Kaplan (Neutral) , Evans (Dove), Bullard (Hawk) and Williams (Neutral) on Thursday and Friday.  So an edge to the doves but the doves had a 3:1 edge last year, so it's a change in tone towards hawkish for sure.  Kashkari was the dissenting voter who did not wish to raise rates at last week's meeting – he speaks Thursday at noon.  

In their recent statement, the Fed says "The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal."  The word symmetric was added since January and indicates the Fed is warning that they do not intend to let inflation move over 2% for any period – that should be clarified a bit this week and it's a key indicator that the free money party is really winding down. 

As we noted in our Friday Morning Report, the recent Fed action has driven the Dollar to the bottom end of its range, back to where we bottomed out at the Feb 1st meeting, after which we climbed back 2.5% over the next month and, unless the Fed speakers come off surprisingly doveish this week, we can expect the Dollar to rapidly move back to its mid-range at 101.50 and that will put pressure on commodities as well as the indexes.  

Oil (USO) is already under rollover pressure with 3 days to trade April contracts (/CLJ7) and already we're down to $48.50 ($47.90 on April) and we hit our $49.50 shorting goal on the May contracts (/CLK7 – also from Friday's report) so you are welcome for that $1,000 per contract winner to start your week off with a smile.  Our index shorts (same post) have had minor pay-offs so far but, as noted in the Report, we're confident enough in our index shorts at this point that we're beginning to short specific stocks ahead of a broad-market "adjustment."

As we expected, our 2/9 short on Tesla (TSLA) paid the full $12,500 for a lovely $8,600 (up 220%) gain on cash in five weeks - what other market newsletter do you read that does this for you?  

Read this review of the Chevy Bolt and you'll see why we're so happy to short TSLA – it's everything Musk has been promising but already in production from a different car maker with thousands of dealers and much deeper pockets.  TSLA is currently raising $1Bn in a secondary offering and that's just HALF of what they need just to make it through 2017 while GM just sold Opel for $2Bn after adding just over $2Bn to their cash pile in 2016.  GM has salespeople and showrooms, TSLA does not – without a drastically superior car, it will be hard for Tesla to match the Bolt for consumer attention.

We're hoping TSLA goes higher but worried they won't so our trade for the moment is going to be:

  • Sell 3 TSLA April $265 calls for $9 ($2,700)
  • Buy 5 TSLA April $290 puts for $30 ($15,000)
  • Sell 5 TSLA April $275 puts for $19 ($9,500)

That nets you into the $7,500 spread for $3,300 so the upside potential is only $4,200 (127%) but, on the bright side, it's only 32 days away (April 21st) to expiration.  We only need TSLA to stay below $265 to collect the money and, if they go higher, we will roll our short calls to 6 May or June calls at higher strikes (the June $305 calls are $5 and the margin is $15,000 on 6 short ones) and then we would widen the spread, possibly adding $5 or less to roll our $290 puts to the $300 puts (now $38.50).

So we'll take the spread as we'd hate for it to get away but we're actually HOPING (not a valid investing strategy) that Tesla goes a bit higher first – so we can get better prices for a bigger spread.

Image result for trump trade warMeanwhile, the reason we're still generally bearish on the markets is that the G20 communiqe has, as expected, dropped anti-protectionist language, indicating that Trade Wars will be on like Donkey Kong in 2017.  While delegates greeted Steve Mnuchin and said that he had been engaged in the process, they said he didn’t elaborate on how the U.S. considers itself to be treated unfairly. It wasn’t possible to reconcile his stance and that of the other members in any substantive way.    

I “regret that our discussions today didn’t end in a satisfactory manner,” French Finance Minister Michel Sapin said in a statement. In a press conference later, he said that “there wasn’t a G-20 disagreement, there was disagreement within the G-20 between a country and all the others. This isn’t a caricature, this is the reality of things.”

Image result for trump climate denialClimate change was also dropped from the agreement as the US, China, India and Saudi Arabia all wish to continue destroying the World so, in the grand scheme of things, who really cares what happens in the market during one of our last precious weeks on Planet Earth?  I mean really people, you voted for your own extinction – lemmings are laughing at us!  

Aside from passing a death sentence on the planet and costing the US millions of jobs by introducing the exact same tariff program that kick-started the Great Depression, our Government is hell-bent on ripping health care away from tens of Millions of Americans and don't forget the Draconian Budget Proposal – that pumps hundreds of Billions of Dollars from the poor to the rich something I warned you Trump and his ilk would do 10 years ago "The Dooh Nibor Economy (that’s “Robin Hood” backwards!)"  Here's John Oliver on the subject:  

None of those things give me that "all-time market high with record valuations" kind of feeling but the market still hasn't given us a signal to cash in our longs just yet, so we will remaining "Cashy and Cautious" with plenty of CASH!!! on the sidelines and plenty of hedges protecting our longs and we'll see how the quarter finishes next Friday but don't forget the Fed has already cut GDP forecasts from 3% to 0.9% for Q1 – does that sound like all-time high to you?

 


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  1. YUCK !  

    ~~ 07:06 ET

    QUIK

    QuickLogic intends to offer and sell $15 mln shares of its common stock in an underwritten registered public offering  (2.34)

    The Company intends to use the net proceeds from the proposed offering for working capital, the development of next generation new products and general corporate purposes. The Company may also use a portion of the net proceeds to acquire and/or license technologies and acquire and/or invest in businesses when the opportunity arises; however, the Company currently has no commitments or agreements and is not involved in any negotiations with respect to any such transactions. 



  2. The GOP better be careful because Trump is the type of guy that will take you down with him and try to be the last survivor:

    http://talkingpointsmemo.com/edblog/do-we-have-lift-off


  3. And not much work being done in the basement of the White House:

    http://ritholtz.com/2017/03/trumps-skinny-budget-omits-budget/

    Probably too busy playing golf! There is no seriousness about governing from this group of people. They are just a huge wrecking ball whose damage will take years and years of hard work and pain for many.


  4. Bull markets everywhere: http://stockcharts.com/articles/chartwatchers/2017/03/all-world-index-hits-new-record.html

    The FAW includes stocks from 47 developed and emerging markets. It just recently cleared its 2015 high which resumed its major uptrend. That's a positive sign because it shows that the stock market rally is global in scope. The FAW, however, is heavily influenced by the U.S. market which is also at record highs.

    A better way to judge the performance of foreign stocks it to look at global stock indexes that don't include the U.S. Foreign stocks are on the rise as well. Chart 2 shows the Vanguard FTSE All-World ex-US ETF (VEU) rising to the highest level since June 2015. It still needs to clear its 2014-2015 highs, but is heading in that direction. The VEU is a combination of foreign developed and emerging markets. Interestingly, the VEU has actually done better than the U.S. this year.


  5. Good Morning.


  6. This is a surprise :

    ~~ FEYE –  FireEye upgraded to Buy from Neutral at BofA/Merrill.  


  7. Phil – DXD  July BCS 12/16  – it is doing well.+90% up.  Still have room to run?


  8. SJL – I am glad you have a 'place' to vent. You pick up Phil's slack when he has more important things to do. :)


  9. Yeah, I hate that stjean insists on posting FACTS….. ;)


  10. 1020  – I guess that its in CAPS, makes you more sure and allows a license to continually and boringly vent?  Yawn.


  11. Phil, whats your take on /NG here with all the heat coming?  Short for a bit until summer A/C season?

    https://twitter.com/EdValleeWx/status/843797547630125056


  12. Phil – I was following the DXD trade. It was up 111%. and now its dropped to – 13%. ??  At one point I was up $11k!!!  what am I missing?


  13. Latch – You're a funny person. This is not your blog and Phil is not boring. Yawn indeed….


  14. Just pursuing my mission of educating people Latch!


  15. 11k – Yawning can be expensive… :)


  16. GNMX….Did not meet its primary endpoint.  Secondaries worked in many areas.  Ashame, that it could have helped so many kids with ADHD, and not taking a stimulant for it.

     

    Happy Monday.


  17. ARRY walking back its hopes to file….as the data it said it had….it does not have.  Oye ve….


  18. omg you guys are starting up early let's one: not call a pay for site a blog..20 or 30 of us have been posting here for years still fighting like siblings very cute

    Phil owns this company his content etc etc I don't think its his day job if it was he would have 500 full pays and would be moderating these little skirmishes..it's all silly but never ever boring I am going to have more coffee BURP


  19. Now completely covered on the WYNN position.  Will most likely have the stock taken away.  Oh well, it was fun while it lasted.


  20. Good morning!  

    Not much going on so far but the RUT just turned sharply lower after testing 1,385 again so we'll see.  

    Oil bounced off $48 (/CLJ7) or $48.50 on /CLK7, which is what we're defaulting to now.  There's no reason to play the old contract in its last few days. 

    Big Chart – Bullish sign if we don't form that M top – if we're not below the middle of the M by Weds – that's a sign of strength.

    Disappoval/StJ – Hopefully he'll take the GOP down with him.  As noted by John Oliver, Trump didn't actually work on the budget – not even sitting in meetings.  His budget guy watched his campaign statements and put the budget together based on that – how idiotic!  

    Trump to spend 7th consecutive weekend at Trump-branded property, at enormous cost to taxpayers

    As Quartz reported on Friday, after this weekend, Trump will have already spent about $16.5 million on trips to Mar-a-Lago. For that amount, Meals on Wheels could feed 5,967 seniors for a year and after school programs could feed 114,583 children for a year.

    And it's costing $300,000/day ($109M/yr) to protect Melania in NY because they insist on living separately.  Where is the outrage from the Conservative media?  

    Image result for meals on wheels melania

    Let them eat diamonds!  

    Even Fox is turning against the TrumpDon'tCare Plan:

    Apparently their viewers are not fans.  

    And this isn't going away:

    Comey is testifying right now on the subject. 

    /NG/Burr – I'm generally bullish on /NG so not looking to short it at all.  You could play for a rejection at $3, of course but, over that, I wouldn't play bearish and under that, I would be looking for support to go long.  

    DXD/Latch – Well it's still a good hedge if you need it as that but up 90% is very nice this early on so, if it was a bet, why not take half and put a stop on the rest, you can always add a layer after you are up 200% if it keeps going higher. 

    Now kids, don't fight.  

    WYNN/Albo – Yeah, up and up they go.  


  21. Phil – to be clear – you are not boring, only some of your slavish followers.  Moving on to the subject of peak oil demand. Have you seen this from Raymond James?  ……..~Most of our readers, it’s safe to say, would rather have us predict oil prices over the next 24 hours than the next 24 years. While we
    generally stay away from making ultra-short-term trading calls, we are equally averse to throwing out forecasts that extend decades into the future. …….This is a relevant question for energy investors who are making decisions with a long-term timeframe in mind. We would not discourage anyone from taking this issue into consideration.  But we want to make our view crystal-clear: while peak oil demand is something that will eventually happen, it is exceedingly unlikely to materialize within what the vast majority of investors would consider an investable timeframe. While it would be rather silly (and academic) for us to specify a particular year, we are comfortable stating that there is no realistic way that global oil demand can peak until after 2025 at the earliest, and more likely beyond 2030. There are as many predictions out there for when oil demand will peak as there are for who will win an Oscar. In November 2016, the CFO of Shell stated on the earnings call: “We’ve long been of the opinion that demand will peak before supply. And that peak may be somewhere between five and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.” Notice the extremely wide range; in Shell’s view, the peak of global oil demand can materialize anytime from 2021 to 2031. Would you like to guess which end of that range the media focused on? Not surprisingly, reporters like to make a splash – we don’t blame them – hence this headline from Bloomberg: “Energy Giant Shell Says Oil Demand
    Could Peak in Just Five Years.” Technically true, but not exactly the most balanced summary of what was said. Earlier this year, moreover, Shell’s CEO also explained that a peak is unlikely until the late 2020s.


  22. BTW: RJ has been saying $70 oil for the past two years. So what do they know? :)


  23. Kids – LATCH STARTED IT!!!….. :)


  24. FU M!!!


  25. Love how the Republican questions are trying to shift focus off of Trump's wiretap lies and Russian links and make it all about leaks which happen in every administration.


  26. Wow, line of questioning by GOP is turning the investigation onto the newspapers, who may have committed a crime by reporting that there were matters that needed investigating (as their sources were passing along "state secrets") – they are using this hearing as a back-door attack on freedom of the press – WaPo and NYTimes have been named. 

    Oil/Latch – I did the math and I don't know when or where but I do agree that it's more like 2020 than 2025.  The global fleet, at the moment, gets 30mpg (US drags it down), in 10 years it will be 45 so 1/3 less use averages 3% less per year on average, which hopefully outpaces population growth (or there will be 10Bn people) by a good margin so, unless we have economies adding auto transportation at an alarming clip – it's very hard for demand to go up and, if anything, electric cars and shared driverless cars and Uber will drive demand down faster, not slower. 

    M/Jabob – See, that was worth looking up:

    It may be a bit under the radar for some, but a report from Cowen & Company projects that Amazon's clothing and accessory sales will climb 30% in 2017 to $28 billion while Macy's (NYSE:M) will drop 4% to $22 billion. That would make Amazon the largest clothing retailer in the United States, Geekwire reported.

    To make matters worse for Macy's, other department stores, and the mall retailers Amazon competes with, this trend is likely to accelerate as millennials gain buying power. A research report from Slice Intelligence shows that Amazon has twice the online sales of its nearest competitor with that age group. Amazon.com gets 16.6% of all the online clothing purchases made by the 18-to-34-year-old demographic, according to Slice.

    A chart of Millennial spending on clothes

    Leaks/Rustle – Yes and notice how it was framed by first establishing the legal precedent – effectively forcing Comey to launch an investigation into the sources used by the papers and that then leads us to the Trumped-up Supreme Court, who will get to overturn the First Amendment "in the interest of National Security".  


  27. Phil

    Any interest in

    National Oilwell Varco, Inc. NOV

    Thanks

     

    NOV/QC – Have to ask me next week, not sure what they've been up to recently and that's a lot of research.


  28. The apple tree is growing in to the sky!! 141.29


  29. Chicago Fed National Activity Index

    7 signs Japan has become a 'demographic time bomb'

    Petrobras turns to Brazil's Supreme Court to free divestment plan

    • Petrobras (PBR +0.4%) is asking Brazil's Supreme Court to lift an injunction obtained by an oil workers' union that froze sales of its assets, including its fuels distribution unit.
    • Brazil's federal audit court last Wednesday allowed PBR to proceed with its divestment program, but required the company to restart the processes in all but two projects, but a regional oil workers union said its injunction obtained in the state of Sergipe remained in effect.
    • Separately, PBR says it will raise prices for liquefied petroleum gas by 9.8% in the Brazilian market.

    Transocean to sell entire jack-up fleet in $1.35B deal

    • Transocean (NYSE:RIGagrees to sell its entire fleet of 15 jack-up drilling rigs to Oslo-listed rig operator Borr Drilling for $1.35B.
    • The sale includes 10 operational rigs and five rigs that are still under construction, according to Borr.
    • The news confirms earlier reports of a deal valued at closer to $1.2B.

    Caterpillar reports retail statistics ending February

    • Caterpillar (CAT +1.3%) reports that its retail machines sales were down 1% Y/Y in the three months ending February, with resources industries down 7% and construction industries up 2%.
    • Energy & transportation retail sales in the same period were down 9%.
    • SEC Form 8-K

    Tesla Bankruptcy Chances Increased Exponentially With The Capital Raise 

    Shake Shack upgraded to Neutral but yanked from Best Ideas at Wedbush

    • Shake Shack (SHAK -0.3%) is upgraded to Neutral from Underperform with a $33 price target, raised from $30, at Wedbush, based on on valuation and lowered expectations.
    • While Wedbush believes SHAK’s valuation now is more in line with the company’s long-term opportunity, the firm removes the stock from its Best Ideas list, as it no longer sees the current $1.1B enterprise value as unjustifiable due to lower valuation that reflected weaker terminal sales volume expectations, as well as higher annual unit growth rate than earlier estimated.
    • In addition, the firm notes that same-store sales headwinds were now well understood, saying, “Given very strong new unit openings, we do not expect SHAK to benefit from a multi-year maturation cycle.”

    Sonic downgraded to Hold from Buy at Canaccord amid increased competition

    • Sonic (SONC -2.6%) is lower after Canaccord Genuity downgrades shares to Hold from Buy and cuts its price target to $24 from $30, citing soft sales in recent months and growing food and drink competition from retail channels such as convenience stores.
    • Canaccord believes industry sales will continue to be challenging, and intense promoting and discounting will remain a theme, as quick service restaurant companies fight for market share, and sees no identifiable catalysts for material same-store sales improvement in the coming months.
    • SONC shares already are 27% lower over the past year vs. a 16% Gain for the S&P 500

    Advanced Micro Devices raised to $16 target at Jefferies

    • From $13 (current price $14.22) and reiterating shares at Buy, analyst Mark Lipacis elevates sales estimates, citing greater visibility into Ryzen 7 and forthcoming Ryzen 5 launch (April 11), and Advanced Micro Devices' (AMD +5.4%) ability to balance pricing and competitive performance, which firm expects to result in material share gains from Intel (INTC +0.8%) within desktop, server and notebook segments beginning this year. Models 2017 sales and EPS 700 bps and $0.17 over consensus forecasts, respectively.
    • Previously (March 13, 2017): Intel downgraded to Hold at Jefferies

    Intel ships new storage drives

    • Intel (NASDAQ:INTC) has started to ship the first products it hopes will reshape the market for computer memory and help it profit more from the tech world's data explosion.
    • The new storage drives are based on technology called 3D XPoint, which closes the gap between conventional and flash memory.

    Apple target to $155 at Cowen and Company

    • From $135, analyst Tim Arcuri (Outperform) cites field checks on iPhone 7/7 Plus supply and early indicators on upcoming models supporting firm's view consensus forecasts remain "way too low" for H2 2017 and 2018. Models new iPhone builds at 110M-120M for 2017, and $10 and $11.50 in EPS for 2017 and 2018, respectively.
    • Apple (NASDAQ:AAPL) $140.44, +0.38%.

  30. Phil/TSLA

    TSLA trade this morning is not official, is it?

    We're hoping TSLA goes higher but worried they won't so our trade for the moment is going to be:

    Sell 3 TSLA April $265 calls for $9 ($2,700)

    Buy 5 TSLA April $290 puts for $30 ($15,000)

    Sell 5 TSLA April $275 puts for $19 ($9,500


  31. Every GOP senator sounds like the dumb southern sheriff from a James Bond film or from Smokey and the Bear.


  32. I think it's time to officially grab that TSLA trade for the STP:

    • Sell 3 TSLA April $265 calls for $9.20($2,900)
    • Buy 5 TSLA April $290 puts for $29 ($14,500)
    • Sell 5 TSLA April $270 puts for $15 ($7,500)

    We widened the spread by $5 so now pays $10,000 if all goes well and the net cost is $4,100 which leaves a nice $15,900 (144%) upside potential – see how it's worth waiting for the right time to get in!  


  33. The math for potential upside is incorrect in the TSLA play above.  Max value will be $10k ($20 x 500), minus our cost, gives us a $5,900 potential gain.


  34. Senators/Rustle – This guy Gowdy is no dummy, he's a Tea Party Lawyer, former prosecutor with US attorney's office for most of his career.  Lot's of the Reps yielded their time to him and he just built a massive case to go after the Times and the Post on this – if nothing else, it will create a huge side-show that will distract from the actual investigation that's supposed to be going on. 

    In 2012, Gowdy received the Defender of Economic Freedom award from the fiscally conservative 501(c)4 organization Club for Growth. The award is given to the members of Congress who have the year's highest ranking, according to the Club for Growth's metrics. Gowdy scored 97 out of 100, and was one of 34 congressmen given the award.[26]

    An ardent social conservative, Gowdy considers himself "pro-life plus." He not only believes "in the sanctity of life," but argues that "the strategy should be broader than waiting for the Supreme Court to revisit Roe v. Wade."[27]

    Trey Gowdy signed the Contract from America, which aims to defund, repeal, and replace the Patient Protection and Affordable Care Act, limit United States Environmental Protection Agency regulations, enact a reform of the federal tax code, pass a balanced budget amendment, and end earmarks.[28][29]

    Math/Paloty – Thanks, I fixed it right after but you have to refresh. 

    Wasn't there another trade we wanted to add?


  35. StJ – easy to chide "the other side" but at some point these people need to be reached out to and need to believe in something. Otherwise we continue to lose, and lose bad … oops I mean bigly? :P


  36. I think you wanted to short AMZN.


  37. Math / TSLA – Isn't the upside potential $5,900 (not $15,900) based on a max spread of $10,000 and a cost of $4,100? Somehow an extra $10,000 is showing up in the equation…


  38. ATI/Phil    you mentioned something about them last week


  39. Eric that is what TOS says 5000!


  40. /KCN7 – Looks like this ship has sailed (Was too cheap to snag at $143 last night)


  41. gowdy – First, we kill the messenger. The right has never liked 'whistle blower' protections…wonder why?….


  42. ftr wtf???


  43. Phil – "The word symmetric was added since January and indicates the Fed is warning that they do not intend to let inflation move over 2% for any period – that should be clarified a bit this week and it's a key indicator that the free money party is really winding down. "

    Symmetry of the inflation objective

    The inflation target of 2% is expressed in terms of an annual rate of inflation based on the Consumer Prices Index (CPI). The remit is not to achieve the lowest possible inflation rate. Inflation below the target of 2% is judged to be just as bad as inflation above the target. The inflation target is therefore symmetrical.BOE

    The Bank views the risks of inflation moving above or below target as equally serious and acts symmetrically to avoid both risks over the medium term. Such an approach guards against both high inflation and persistent deflation.BOC

    Without symmetry, inflation might spend considerably more time below 2% than above 2%. Inflation persistently below the 2 percent target can be just as deleterious as persistently above. 

    A Symmetrical Target – The Fed's preferred measure — the price index for personal consumption expenditures, excluding volatile food and energy. Since SEPTEMBER 1992, said preferred measure has been BELOW 2%, drumroll please…. 252 out of 291 months.  That's 21 years out of the last 24.25 years.

    Is it any wonder they are finally raising and decided to include the term "symmetrical" in January? Little late to the party me thinks, as in asleep at the wheel for the grand midnight gala on the Titantic.  Get in the car and Out.  


  44. Phil, for TSLA, which of the 4 TSLA expiration dates in April do you mean?


  45. Leok – He means the main one, which is always the 3rd Friday of every month, unless he indicates otherwise.


  46. In your live webinar last weds, I thought you wanted to add NLY. 


  47. MU/stj – do you still look for/at earnings plays? They're up this week 3/23…


  48. Earnings / Scott – A bit too much on my plate right now! 


  49. mnm NYL  Simple by stock and sell Oct 11 sraddle for 1.16 to 1.18


  50. obviously buy typo!


  51. Am I missing something? I don't see why ford and GM are selling off.


  52. BLDR/Hanj – insiders exercised and sold a whole lotta shares following the gap up. Possibly tipping down with a gap to test and or fill…  i'm currently short.


  53. Scottmi/FF  Needs to giddyup and go within next two days it has to take out Friday's high or we could be stuck in a new channel.


  54. AMZN/Palotay – Oh, scary!  $850 is just ridiculous, though.   Earnings are last week of April so best to go this way for the STP:  

    • Sell 2 AMZN April $850 calls for $18.20 ($2,640) 
    • Buy 3 AMZN April $880 puts at $27.70 ($8,310) 
    • Sell 3 AMZN April $850 puts for 11 ($3,300) 

    Here we have a $9,000 spread that's mostly in the money for net $2,370 so the upside potential is $6,630 (280%).  If AMZN pops to $900, we would owe $10,000 back but earnings are after and, should we decide to stick with it, the premiums we roll to should be rich. 

    TSLA/Eric – See above.  I corrected it but it shows up as the old price unless you refresh your screen.

    ATI/Stock – Ah, there's a bullish one I like!  ATI makes exotic materials, mainly used in Aerospace.  They are what we used to call a "Boeing Buddy" – a BA supplier that does well when BA is making lots of planes.  Barron's just wrote them up and, of course, it's an infrastructure stock. 

    In the OOP, let's add the following trade:

    • Sell 5 ATI Oct $17.50 puts for $2.70 ($1,350) 
    • Buy 10 ATI Oct $17.50 calls for $2.80 ($2,800) 
    • Sell 10 ATI Oct $20 calls for $1.80 ($1,800)

    Here we have a $2,500 spread that we're taking a $350 credit for.  Our worst case is owning 500 shares of ATI at net $16.80 but then we'd sell $17.50 puts for $2.80 and net $14, which is about 20% off the current price and only $7,000 – so a position we can well afford to get "stuck" with.  

    FTR/Jabob – By EOQ, all the S&P funds have to be out of it.  Maybe a nice pop after that.

    Fed/Jabob – They just need an excuse that doesn't sound like "We are totally out of ideas".  

    TSLA/Leo – I don't do weeklies.  The 21st is the regular April contract.  

    And what Palotay said!  

    NLY/Mnmarsh – Thank you!  That's the one I actually meant.  Another one we can add to the OOP but also for the LTP.  NLY is a good, solid REIT that pays a fat, $1.20 dividend on an $11.10 stock.  

    In the OOP:

    • Sell 10 NLY 2019 $12 puts for $2.90 ($2,900) 

    In the LTP: 

    • Sell 30 NLY 2019 $12 puts for $2.90 ($8,700) 

    The problem with NLY is that they don't have long-term $11 calls so not worth selling Oct $11s for 0.30 as they are very likely to get called away (the premium is less than the dividend) and, if we owned the stock ($11.10) and sold the 2019 $10 puts ($1.25) and the $12 calls (0.25) our net would be $9.60/10.80 and our maximum win would be $2.40 + $2.10 in dividends (one already gone) for $3.50.  By just selling the puts, we use less cash and collect $2.90 now instead of waiting 2 years to realize $3.50 at the same $12 we need to win on the short puts.  

    If NLY does fail and we are assigned, our net is a comfortable net $9.10 – so all good no matter what happens.

    Selling off/Datra – I think everything will start selling off soon.  Some are just jumping the gun.


  55. Any one knows what symble to put in to the TOS indices watchlist /TF does not work for me Thanks


  56. FF/Hanj – yeah, on dividend-corrected chart (Prophet) just came back to test pre-special div high, but at least is at right side of channel if it is going to break higher. They got their pop on earnings so don't know what else will push them unless we get a roll of analyst upgrades (and I don't really see that happening).


  57. GOP looking desperate in their questions.  Terrible, Sad!


  58. $DJI, SPX, COMP, NYA, RUT, VIX


  59. CVX testing its 200dma


  60. HPE coming up to 50dma and gap above to fill…


  61. /TF – Yodi, /TF is one of the futures provided by ICE and will now require a monthly fee to get pricing. TOS recommended RUT as an alternative measure. Otherwise, pay for quotes or don't see anything. /DX was another. Use $DXY instead.


  62. scott thanks for the info


  63. Phil – Peak Oil – Why is this long debunked urban myth still a THING? "Cloaked in their authoritative robes of academia, the theorists marched on an unsuspecting and naive public; waving their Hubbertian charts with ever shifting bell curves like magic wands at a Hogwarts quidditch match; while in unison chanting an unprovable mantra in Goebell's like fashion."

    We thank Hubbert's fear mongering acolytes for keeping the public believing in the depleting oil fairy tale while picking our collective pockets for billions of dollars in oil insider profits. Who profited from spooking the herd? The cartel and speculators. Who has paid? John Q. Public. A quantifiable societal disservice indeed.  If I had a dime for every time I've heard these mindless parrots squawk, Peak comin! The end is nigh! What wrong again? Well for sure next decade?, I'd be a billionaire.

    Debunking exemplars: Peak What? Is It Safe?; Peak What? Dancing With The Devil?; and Peak What? Hubbert Was Wrong?  Click here if you really wanna go deep down the rabbit hole or better yet click here if you want to Get in the car and laugh your ass off at Hubbert's cult, whose motto should be: "Our ignorance is as vast as our failure to use common sense and our minds." Out.


  64. Peak oil- hmmm, sounds much like peak temp?

    Just sayin'


  65. we were discussing peak Demand.


  66. Well, the markets weren't too happy about something at 1:30.  

    Oil/Naybob – I'm in the Abiogenic camp.  cheeky  Bring that up and watch peak oil proponents have a heart attack.  


  67. Pstas – Peak oil- hmmm, sounds much like peak temp?

    Different animal. The price of oil has more to do with leveraged overspeculation in the futures market, based in part upon a misperception, that the supply is finite, we will always need it and as Phil well knows the SCAM leverage for billions of non deliverable or existent oil.


  68. Yodi – /TF and ICE futures.  Depending on your account balance you may of may not be charged for Level II quotes.

    Log in then go to Client Services -> My Profile -> Subscriptions -> Real-Time NASDAQ Level II Quotes and select "Subscribe".  The cost will then be displayed, mine was $0.0.


  69. Last Thur PYPL was mentioned as a possible Butterfly opportunity ??


  70. Phil/ATI  why not sell 10 of the 15s?


  71. Latch – "we were discussing peak Demand."  Shell CEO quoted: “We’ve long been of the opinion that demand will peak before supply.

    Yes I know you were.  What do the Tooth fairy, Easter bunny and Santa Claus have in common with Peak oil supply which the Shell CEO brings up in your post?  All unprovable urban myths.  Peak demand is just another theoretical boogey man being used to manipulate the market.  Odds are its already passed, again, unprovable and lacking substance, pun intended. 


  72. Granted, different species but rhymes with hyperbole.


  73. Phil, re NLY, did you get the 2.90 on the Jan 19's  12 short puts?  Now, @ 2.30, bid; 2.75 ask.  Just wonderin' Thanks!


  74. Phil is now the time to buy a summer uso spread.  72300 contracts remaining. What spread would you recommend at this time?


  75. Phil – "Oil/Naybob – I'm in the Abiogenic camp.  cheeky  Bring that up and watch peak oil proponents have a heart attack."

    I am too, and I did in the Peak What? Trilogy, they did not like it.  Like I said above, if you wanna howl click here. If people believe in PEAK oil, or believe what politicians tell them, they will believe in this.  We need investors for this money maker, lets franchise it.  Get in the car and Out.


  76. GLNCY / Phil,

    This one is an ADR and does not have any options but its a large overseas based company. They produce majority of world's Zinc production and would like to get your thoughts

    Thanks as always

    Pat


  77. ATI- I remember this one from years ago. It was one of those "story stocks" that everyone piled into and got hammered in the market collapse. 

    Looking at the numbers, it is still a turnaround play which may do well but for now, I will wait and watch given negative cash flow and heavy debt load. Lots of companies have been loaded up with cheap debt that can turn into a millstone in a recession. We shall see. 


  78. Phil – CL . I am carrying 4 short at 48.89. With the rollover imminent, I suppose I should lighten up or get out at the bounce up arrives?  Thanks!


  79. What is Ilene's email? Tried to send her something over the weekend and it bounced back. 


  80. Nattering – I don't think Phil thinks peak oil demand is theoretical.  


  81. TSM – well, never got in, and on it goes to new more better highs..  just not a market for new ATH entries!


  82. EdroOO,

    Thanks for /TF when you say log in? In to where ATameritrade or ?


  83. PBI – not in them, but how tragic. Is there a future or just going away like Kodak and Polaroid? 
    (btw, Time Zero, a polaroid documentary, is awesome. http://timezeromovie.com/ )


  84. test


  85. Yodi – Log into http://www.tdameritrade.com, not TOS.


  86. Trying to post having trouble…

    Latch – "Nattering – I don't think Phil thinks peak oil demand is theoretical."

    Phil is a free thinker, like me.  I think peak "demand" has already occurred and new technology will continue to cut demand exponentially.  I also think the last three Super Bowls were fixed and can prove it statistically. But what does that have to do with the price of tea in China? How about peak magnetism?


  87. Edro00 Thanks OK


  88. Does anyone know why there were no review and updates of the Butterfly portfolio last week for the monthly options expiration that occurred on Friday?


  89. Butterfly:  

    OOps. Found it last Tuesday….   Thanks.


  90. ATI/Hanj – It might go to $15, I want to stay flexible and OOP doesn't need that kind of commitment ahead of a possible correction.

    NLY/Newt – No, they were $2.75 but that's not too bad, only 5% off goal.  Last person was impatient and did a big sell at $2.55 20 mins ago and now bid is $2.30 (which only suckers would sell for – don't be one!) and ask is $2.75, so we're back to more disciplined sellers.  NLY is up today and it's a 2019 trade so you only have 21 months left to fill it at a good price – by all means, start worrying now!  cool

    USO/JMD – I'm happy with what's in the OOP ($9/12) but the $12s are too cheap as a new spread so I think the July $9 ($1.60)/11 (0.45) bull call spread at $1.15 is good as it has no margin and pays $3 if things go well for a $1.85 (160%) profit.  Not back for 4 month's work.

    Peaking/Naybob – You forgot to go historical and talk about Holznot and, of course, Peak Coal – what a catastrophe that wasn't.  So now it's peak oil and we can take our bets on how long before they try to convince us it will soon be Peak Solar or at least Peak Wind 

    The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. –  Thomas Sowell

    Sell More Using the Scarcity Principle in Marketing – The Balance

     

    In psychology, the Scarcity Principle describes the urge to purchase, gather, or obtain something that a person feels that they may not be able to get in the future. Part of this urge stems from the need to ensure we have what we need to survive. We also tend to value things either rare or that we cannot have, but the pleasure principal also addresses the need to feel in control.

     

    By obtaining something that is difficult to get we demonstrate an ability to control our environment. This need to control is not just about self-worth, but also about "keeping up with the Jones'."

    GLNCY/Pat – Well Zinc is hot right now and Glencore is huge but into a lot of stuff besides Zinc.  It's a good, steady, long-term hold but a crap dividend so I'd rather have FCX, which is $12.62 but you can sell 2019 $12 calls for $3.60 and $10 puts for $1.60 and that nets you in for $7.42/8.71 so you make $4.58 (62%) if called away at $12 (flat) or higher or you own 2x for $8.71, which is a 32% discount as your worst case.  To make that on GLNCY, it has to hit $13.77 but then the next cycle - it has to do it again while you can make your 62% every other year on FCX whether it's up or flat.  As a bonus, FCX used to pay a nice dividend, it was 0.56 in 2015 but they killed it last year and this year as they dumped out of that bad oil investment.  If they put it back on, you'll be in great shape. 

    Millstone/Pstas – Definitely something to watch out for in general.

    /CL/Latch – Yep, way too greedy after seeing $48.50 today.  Contract count looks like 72M but not sure if that's today (in which case it's a lot) or from the open (in which case it's manageable).

    Ilene/Pstas – Sent to your mail.

    Demand/Latch – Well I wouldn't say peak or no peak but gasoline will peak out where we are now and go into decline so oil demand will drop off too BUT that doesn't mean that, ultimately, demand won't catch up again over time – especially if oil stays cheap and gets used for more things.  LONGER-TERM, I think solar/electric will be our primary source of power and heat and sythetics (that we create) will replace oil for most industrial uses.  We can already build diamonds – not a big leap to hydrocarbons and then it's just a matter of cost/efficiency.  Actually, Germany ran their army on synthetic gasoline 75 years ago and they did pretty well – came in 2nd!  

    Ruins of the German synthetic petrol plant (Hydrierwerke Pölitz – Aktiengesellschaft) in Police, Poland

    PBI/Scott – They have pivoted to more of an information management company but huge competition in the space.

    Butterfly/GC – Because you missed it!   This is from Thursday's post (and it really hurts my feelings when you don't read my posts!):

      We just reviewed our Options Oportunity Portfolio's postions yesterday and seven of them are still good for new entries and, on the whole, we're very pleased with our balance.  We also went over our Butterfly Portfolio Positions on Tuesday Night and our Short-Term Portfolio (STP) and Long-Term Portfolio (LTP) were reviewed last week so we are all ready for tomorrow's expiration day madness (hopefully).  


  91. Nattering – by your own alias's definition your mind wanderings sometimes have little do with layman's toil and reality….and I don't agree that free thinking is the same as lost thinking. How about Peak Aimlessness? :)


  92. And up the market goes again, just to prove Mondays are meaningless.

    I have to talk about Brazil's economy on China TV tomorrow night – any experts?  


  93. Phil – was that PYPL Butterfly suggestion last week worth reviewing?


  94. And now hydrogen cars powered by fuel cells:

    http://www.autoblog.com/2017/03/20/2017-honda-clarity-fuel-cell-first-drive-review/

    Peak oil demand indeed!


  95. Latch – "by your own alias's definition your mind wanderings sometimes have little do with layman's toil and reality….and I don't agree that free thinking is the same as lost thinking. How about Peak Aimlessness? :) "

    That's a non sequitur and could be circular logic, I once took a flyer on that.  I practice Dudeism, the worlds slowest growing religion, so we could say a stream of unconciousness or Peak Mindlessness. Oh wait I'm sorry that actually happened on Nov 8th of last year to 63M Americans. Uh…lost my train of thought there. Anyway, if you’d like to find peace on earth and goodwill, man, we’ll help you get started. Right after a little nap. Get in the car and out.


  96. Phil / Hurt Feelings

    Sorry Phil but sometimes LIFE's distractions get in the way of my reading every word, of every post, from every member, every day to keep updated……you see where this is going?    

    You wouldn't believe the heckling I put up with from my wife about not having a life….for being on your site every day all day long to achieve what you just gave me shit about…….. :-) )   


  97. Must have been a good weekend for many here!  Wow…If only biotech could do something about that! :)


  98. Phil/Pharm/SGYP,

    It is moving down. Hold on to it? What is your view on it?

    Thanks as always

    Regards


  99. Pat…SGYP…I am holding.


  100. DDR/Phil – REIT offering 5.9% dividend. First glance at numbers I don't see full cover of income for dividend, let alone paying down debt (which they show they did)… Value here or gutting?


  101. Latch – "your mind wanderings sometimes have little do with layman's toil and reality"

    You gotta start thinking like a kid again. I meant it when I said Peak Magnetism. Take a glimpse into the future, Musk has the right idea, he just has it wrong. Think EMP, Lorentz, Mag-lev and the MONORAIL at DISNEYLAND.


  102. Build a self propelled magnet car. – Watch the video, anyone can do it in under 2 minutes. http://www.popsci.com/build-super-simple-car-in-minutes

    EMP – Basic en.wikipedia.org/wiki/Electromagnetic_propulsion


  103. UNG – a hero today.


  104. The Magnet Car - Now thats the ticket,  wanna get in on the ground floor with this hot technology investment? The stock is cheap today, going fast, get in the car and Out.


  105. Seriously full scale EMP prototypes are already on the drawing board.


  106. Speaking of "Peaks," maybe we've seen Peak Globalist…

    https://www.infowars.com/globalist-david-rockefeller-dead-at-101/


  107. Naybob,

    Interesting. Looks to good to be true. Have you tried to build that toy car? 


  108. hope we stay away from peak burgundy


  109. PYPL/Nan – Certainly worth a look but how about tomorrow? 

    Life/GC – Hey, if you want my life advice it's play the LTP or the Butterfly Portfolio and take more vacations!  This is supposed to be fun, not work!  I'm here all day because it is my job, you should be checking in when you WANT to.

    SGYP/Pat – That was an ugly move back down but Pharm think it will hold $5 so we'll see.

    DDR/Scott – Remind me in the morning and I'll take a look – not one I play and REITs are tricky.  

    I love PopSci, Naybob!  Coating the world in Tin-foil would appeal to Trump as well….

    If you want to make a quick $100M, just start up Faraday Motors and demonstrate your amazing Magnetic Propulsion Vehicle, make a few models, build a test track, get a celebrity endorsement and then issue stock against your $1Bn Unicorn Valuation Model (fill in the blank templates these days).  Before you know it, you will be swimming in cash and then, all you have to do is make some meaningless incremental progress announcement once each quarter while your accounting team moves most of the money to a nice, safe tax haven.   

    Nat gas/Scott – good channel for the patient among us.


  110. Naybob – or you can try this for less. ;-)

    http://www.kjmagnetics.com/fuelmagnet.asp


  111. angelcur/addendum…bordeaux, northern rhone, champagne and….


  112. Enfilade – thats not how it works, thats just to make you think.  Here are the results…

    http://www.sciencealert.com/independent-scientists-confirm-that-the-impossible-em-drive-produces-thrust


  113. Type this search term in Google, then click on the first result and see the prototypes.

    "electromagnetic propulsion car"


  114. Naybob,

    You've Peaked my interest. Ciao


  115. Try this marine application by Rolls Royce out… https://youtu.be/AZeWPlVoLko


  116. Email- got it. Thx. 


  117. ok Nattering. Magnets are cool

    Good one Angel! Lol


  118. Mercifully and finally, if Rolls Royce doesnt get your motor spinning. Try this BWM press release from 2009, the Mini Cooper that gets 1000 MPG with an EMP system and the video.  Wonder what happened with that one, OOPS Mulder!!! Is that the smoking man? I dunno Scully but like Angel said its time for PEAK VINO… Get in the car and OUT.

    https://www.press.bmwgroup.com/usa/article/detail/T0020244EN_US/mini-to-introduce-perpetual-motion-magnetic-propulsion-system?language=en_US

    https://youtu.be/clsrQq0iSNc


  119. Got out CL for a $10 loss. Watch it drop to $48.5 now. But I should not have been trading during expiry time #1. Plus to top it off I was up$800 but somehow put the wrong stop or close order in and missed it $48.6 Argh!  NG is spanking me.  3 shorts V7 at 3.215. 


  120. Peak burgundy / Angel – Unfortunately, we might not be that far! On the other hand, you might soon get some wine from higher latitudes! 50 years from now they might even make some quaffable stuff there.


  121. Nat / EMPççChinese are right now building a satellite which will test it, 

    http://www.sciencealert.com/china-is-claiming-it-s-already-started-testing-an-em-drive-in-space

    Meanwhile….U.S is investigating if Russians sent e-mails to whatever….and Europeans discussing Brexit 


  122. ~~SHLD – 10% owner Fairholme Cap'l bought 222,100 shares at $8.75-8.86 worth.

    FWIW – I still have faith in Berkowitz.


  123. Phil/abiogenic – gotta read the paper – linking doesn't quite support your assertion on its own…

    "These failures of the Russian-Ukrainian theory in areas where it has claimed its greatest successes essentially bring its role as a viable theory on which to base exploration programmes for commercial hydrocarbon deposits to an end. As a matter of fact, this theory is now largely forgotten even in the Former Soviet Union and virtually unknown in the west."


  124. love the big red bonnes mares clos de vougeout haute brion mmm


  125. You don't drink cheap stuff Angel!


  126. SAINTY i actually love some argentinian and chilean reds too 10-20$


  127. Latitude Wines / SJL – Have you been into the polar bear pee again? Wine growers in the Niagara Region are concerned that their premium Ice Wine is being endangered. 


  128. Markets have taken off /YM 20902 /ES 2375 – What gives?


  129. Phil – Mind listing any futures positions you are in right now?  


  130. Holy crapola on /KCN7.  147.45! 


  131. Bur > Futures – Any idea what caused the selloff in /SI and /GC? and pop in indices?


  132. No sorry, just logging on now and taking in the numbers.  I haven't been on all day, and I don't see anything popping out on twitter or stocktwits.


  133. Tempting to short /NKD at 19400, but too dangerous with /DX at 100


  134. Next generation networking (NGN) will provide a big opportunity for <b>Cisco</b> (NASDAQ: CSCO) as telecom companies will need more equipment to handle the spike in data traffic. As it turns out, data traffic is estimated to grow 53% annually until 2020, creating demand for next-generation routing …


  135. I still like /DX @ 100 long.  


  136. Tax Secrets of the 1%

    How does Warren Buffett pay a lower tax rate than his secretary? Here’s the answer.<p>We’ve all heard stories about wealthy Americans taking advantage …


  137. WASHINGTON (AP) — The Latest on President Donald Trump (all times local):<p>2:14 p.m.<p>The White House is defending proposed cuts to popular federal programs like Meals on Wheels amid President Donald Trump’s taxpayer-funded trips to his Florida beach resort.<p>Spokesman Sean Spicer said that “where ever …


  138. • <b>A new animation shows the orbits of hundreds of dwarf planets beyond Pluto.</b>• <b><br>The astronomer who compiled the data says it may capture only a small fraction of dwarf planets in the solar system.</b>• <b><br>A new definition of “planet” may categorize many dwarf planets and moons as planets.</b><p>You may be familiar with …


  139. Ha, great minds think alike,…. Fools never differ > Long /DX at 100.3


  140. Oops, the Fool cannot type …3 /DX long at 10.03


  141. Real Estate May Be A Time Bomb

    Relative to history, housing remains affordable but consumers remain squeezed and incomes are falling.<p>Housing demand is weak but supply is low …


  142. President Donald Trump used a campaign-style rally Monday night to press Congress to pass his Obamacare repeal bill, which has been struggling to secure enough Republican support ahead a vote planned for Thursday.<p>”Thursday is our chance to end Obamacare and the Obamacare catastrophe and to begin …


  143. SINGAPORE (Reuters) – Oil prices rose early on Tuesday on expectations that an OPEC-led production cut to prop up the market could be extended, and as strong demand was seen to slowly erode a global fuel supply overhang.<p>Prices for front-month Brent crude futures, the international benchmark for …


  144. F.B.I. Is Investigating Trump’s Russia Ties, Comey Confirms

    WASHINGTON — The F.B.I. director, James B. Comey, took the extraordinary step on Monday of announcing that the F.B.I. is investigating whether members of President Trump’s campaign colluded with Russia to influence the 2016 election.<p>Mr. Comey’s remarks before the House Intelligence Committee …


  145. Below looks at the Dow Jones Transportation Index over the past 20-years. Before we discuss the chart below, let me be clear about this, the trend at …


  146. When an apartment or penthouse isn’t big enough for wealthy New Yorkers, they get creative.<p>In recent years, several have combined multiple townhouses or building floors to create supersized homes — or Frankenmansions, as New York magazine’s S. Jhoanna Robledo calls them.<p>To construct these …


  147. A police department in the UK is planning to launch a 24-hour drone unit, colloquially referred to as the “flying squad,” to help assist law enforcement.<p>Devon and Cornwall (D&C) Police in England are currently seeking a drone manager to lead the new robotic squadron, according to The Telegraph.<p>The …


  148. Venom from the deadly funnel web spider can be used to protect the brain from devastating stroke damage, scientists have found.<p>Australian researchers were sequencing the DNA of the venom when they discovered a compound, which they say could protect brain cells even when injected hours after a …


  149. HALCOTT, N.Y. — It’s about 15 miles from here to a dairy testing facility in Roxbury, or about one hour and 20 minutes round trip if you know these dusty mountain back roads like Chris DiBenedetto, a dairy farmer. He has been going back and forth for years, ferrying a sample of fresh milk for a …


  150. U.S. Secretary of State Rex Tillerson plans to skip an April 5-6 meeting of NATO foreign ministers for a U.S. visit by the Chinese president and will travel to Russia later in the month, U.S. officials said on Monday, a step allies may see as putting Moscow’s concerns ahead of theirs.<p>Tillerson …


  151. Communiqués from the Group of 20 finance ministers aren’t always the most keenly read documents. Investors should focus on what the latest, following a weekend meeting in Germany, didn’t say—and worrying further signs of a dawning age of protectionism.<p>Absent from the document was the normal …


  152. The Fed is behind the curve on rates, and has no choice but to continue raising rates.<p>Rising rates are normal during bull markets.<p>Bull markets ignore …


  153. The coal industry, which looked to be one of the biggest winners in the immediate aftermath of last year’s U.S. election, has struggled to advance since November, lagging behind the overall market despite President Donald Trump’s frequent pledges in support of the sector.<p>The VanEck Vectors Coal ETF …


  154. By Ben Levisohn<p>What do <b>ExxonMobil</b> (XOM), <b>General Electric</b> (GE) and <b>Wal-Mart Stores</b> (WMT) have in common? Not much if you ask me. But ask <b>Oppenheimer</b> …


  155. Well known Apple analyst Gene Munster is today out with his latest predictions and expectations for Apple and the iPhone 8. As noted by CNBC, Munster today spoke on the effect the upcoming iPhone 8 could have on the market, saying the device will lead to a “paradigm shift.”<p>Mujjo Wallet iPhone 7 Case<p>…


  156. It’s been something of a common lament among Wall Street veterans for a while now. And it goes, more or less, like this: All these darn …


  157. Phil/PYPL

    Looks like Paypal may NOT be the ideal candidate for the butterfly portfolio, after all.

    They are expected to grow earnings in 2017 and although the stock has been in a range, it appears to have caught a bid, just when we started talking about it last week.

    So how about, we sell the 2019 $40 puts for $4.40 and use that to buy the 2019 $45/50spread for $5.30/3.70, or net $1.60 on the spread. If you count the sale of puts, you are netting in for a credit of $2.80 and stock is put to us, it will be at $37.20. 


  158. Phil/NLY/AGNC

    Thank you for the idea of $12 puts for, let's say we get only $2.75! I like that.

    I have a large position in AGNC. I bet that with the Fed raising rates, AGNC may take a hit. So, with the stock at 19.10, I sold the April $19 calls short for $0.31- but only on 25% of the stock.

    Well, the interest rate hike of 1/4% actually caused the long term rates market to go down a few basis points.

    So, I sold the June $19 puts for $0.46. I don't mind adding another 25% of my stock at $18.54. And while I don't pick up the 18 cent dividend if called away on my short calls, I at least get 46 cents (instead of the 54 cents dividend for 3 months)

    Anything else you can think of to improve the position?

    Of course, I will try to get some income by trying to get the $2.75 on NLY you suggested.


  159. phil, i don't see how the dollar goes up from here, given what is going on with the presidency in this country.  there is after all, a finite possibility that proof of collusion between trump's campaign and the russian cyber effort is found.  and therefore a finite possibility that trump is impeached.  isn't that damning for faith in the greenback?  or is faith in the dollar immune from such politics in your opinion?


  160. GClay- Man do I hear you. My wife gives me a ton of crap for my devotion to reading Phils every word. The price we pay for trying to keep them well taken care of. 


  161. Latch I warned you about NG! Of course I then followed you in on this short, though much later than you started, but enough to still be unhappy. Should have listened to my own advice as well as Phil's. I did cut ,y losses though and will get it back today, just not sure how yet with the open contracts for April oil already down to 22000. Damn those guys are good.


  162. Good morning!

    Dollar taking another dive this morning, 99.60 at the moment and that's saving us from heading lower.  

    Asia was flat, Europe is flat.

    Oil popped back to $49.50 but rejected there.  Rumors now that OPEC will extend the production cuts that aren't working now but mostly the Dollar.

    AAPL seems to be making some kind of announcement as the Apple Store is down with a sign that says something special is coming.

    Abiogenic/BDC – Yes, I read it.  Just because I like the theory doesn't mean it's right – it's just fun and it really drives oil guys nuts when you talk about it.  It's the kind of thing that takes thousands of years to prove – we've only been drilling for 100. 

    Markets/Aquila – That's when the Dollar started falling.

    Futures/Burr – Sure:  None.  Went flat into the Fed and then went to Fl and haven't seen anything I like since. 

    PYPL/Maya – They only make $2/share so it's a high multiple for a payment company.  I'd be less aggressive on the spread, maybe sell the 2019 $35 for $2.70 and buy the $37 ($10.20)/42 ($7.20) bull call spread for $3 and then you are in for net 0.30 on the $5 spread that's more likely to pay off with less downside risk.

    Rates/Maya – It wasn't the raise itself that drove long-term rates down but the gradual forward path that's now expected.  Position sounds fine to me, you don't have to make decisions all at once. Make a small change, wait for earnings (and more information) and then adjust accordingly.

    Finite/Lunar – Risk compared to what?  That the EU will break up and the Euro will become worthless?  That China will keep their currency strong?  That Japan's 260% debt to GDP ratio will never be a problem?  No thanks, I'll stick to my Dollars, thanks!  

    NG/Craigs, Latch – This is why I don't short things I am long-term long on. Also, this happened:

    Chevron likely to end Australian LNG megaprojects, exec says

    • Chevron (NYSE:CVXsignals an end to major new liquefied natural gas projects in Western Australia and is unlikely to sanction an expansion of its Gorgon and Wheatstone export developments, Bloomberg reports.
    • The climate for developing large greenfield LNG projects has shifted to smaller developments given the drop in crude oil prices back below $50/bbl, says Nigel Hearne, a managing director with CVX's Australia unit.
    • “I can’t see in the near-term us investing in a fourth train at Gorgon or a third train at Wheatstone,” Hearne says, explaining that CVX is focused on generating returns on ~$88B in its existing investments.
    • The first train from the $34B Wheatstone project remains on schedule for mid-2017, Hearne says.