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Terrific Tuesday – Markets go Through the Roof

Image result for wonka glass elevator animated gifNasdaq 6,000?  

Why not, we hit 5,000 in early 2015 and it's been two whole years so why not add 20% to the index – 50% from the lows of last year but let's not pick nits, right?  In fact, the Nasdaq Composite ($COMPQ) is up 20% since the election, gaining $1.7 TRILLION in market cap to hit $8.5Tn for the first time this morning.  

I know I didn't put $1.7Tn into the Nasdaq, did you?  No, no one put $1.7Tn into the Nasdaq.  In fact, there were only approximately $200Bn worth of net inflows into the Nasdaq since the election and the rest is LEVERAGE.  That's because the price of all the shares that haven't been trades instantly adjust to the price of the shares that are actually trading and, in a low-volume rally like the one we're having, those distortions can get pretty drastic.  

Another problem with the Nasdaq, which we've discussed before, is that the top 10 stocks make up almost 1/2 of the index, more than half if you don't count GOOGL twice.  It's all about what the Top 10 are doing and, other than GILD (who I just featured as a great bargain on Nasdaq Live yesterday morning) all of these stocks have been performing very well and soon we'll see if the earnings justify the massive gains.

Back when the Nasdaq was first challenging 5,000 on Dec 7th (Pearl Harbor Day) we were concerned that the market may fly higher – like it did in 1999 before the crash.  At the time we used a bullish $3,850 Dow ETF (DIA) trade that has already returned the projected $15,000 (289% profit) but there's still the obligation to buy 500 shares of AAPL at $97.50, on the short puts we sold for $10 (now $3) so, if we were to close those out for $1,500, the final profit on the upside hedge would be $9,650 (250%) but who doesn't want to own AAPL for $97.50?  So why would we pay $1,500 to get out of those contracts?  

As I mentioned yesterday, we have PLENTY of upside trades in our Long-Term Portfolio and in our Options Opportunity Portfolio and yesterday the LTP gained 2.5% ($12,500) while our hedges in the Short-Term Portfolio lost $5,000 but the key is that the hedges lock in the net gains – a reversal in the markets won't take it away.  It's worth sacrificing some of your upside for peace of mind (30% as a rule of thumb).  

Another key to this strategy is knowing when to cash out at the top (we just cashed Chipotle (CMG) ahead of earnings).  That way, you keep all the gains AND make money on the hedges when the correction finally comes.  We'll let you know how that turns out as the market hasn't corrected much in the past 3 years and the Dow is up another 150 this morning because – well, we don't need a reason, do we?  In fact, fear has not been less in the market since early 2007:

In early 2007, the Nasdaq was just testing 2,500 and it ran up to 2,860 by November but then down 50% to 1,400 a painful year later.  Timing those entries and exits is hard, that's why we like to play both sides because, if we make a mistake – neutral is pretty much the worst thing that happens to us.  Now we're up 3,500 points (140%) from those 2007 highs and we need to consider whether or not the companies we're paying up for are actually making 140% more money than they did then – or if, like 1999, the multiples have just gotten out of control.

Image result for wonka glass elevator animated gifAt this point, I have no idea whether or not this rally is legitimate.  The main reason we are flying higher today is yet another pledge from the White House to cut Corporate Tax Rates from 35% to 15% because, you know, that's going to really help out the middle class, right?  

It is going to help out shareholders as it's a $240Bn/yr tax cuts for those Corporation who weren't able to hide all of their profits in offshore accounts.  It will add $2.4Tn to our National Debt over 10 years, rocketing us past the $20Tn mark where interest on the Debt, at 3%, will be $600Bn a year.  But wait, there's more!  Trump also want to cut the rate to 15% on "pass-through expenses", which will cost us another $160Bn a year.

Oh sorry, by us I mean those of you who don't have hundreds of thousands or millions or Billions invested in the market – we'll be fine, thanks!  In fact, we'll take all that money we save on paying taxes and buy ourselves some shiny new robots so we can fire your ass and toss you into the social safety net we're dismantling right before your eyes.  And still you think Trump is working for your benefit!  

Image result for wonka glass elevator animated gifSeems like madness to me but we are, fortunately, in the investing class and we're happy to go along for the ride and happier still knowing we have our hedges – just in case this crazy train goes off the rail at some point – and, happiest of all knowing that, if our worst fears are realized and Trump drives this country completely down the tubes – that we can afford to leave.

The Gilead (GILD) trade idea I had yesterday for the Nasdaq crowd is a great way to play an extended Nasdaq rally and a great stock to play as a value, even if the market tanks.  The trade idea I shared (with updated prices) was:

  • Buy 10 GILD 2019 $60 calls for $11.70 ($11,700) 
  • Sell 10 GILD 2019 $70 calls for $7 ($7,000) 

That's net $4,700 on a $10,000 spread so the upside potential at $70 is a net $5,300 profit (112%) and this trade requires no margin at all, just $4,700 in cash.  If you want to save the cash and don't mind a bit of margin, you can also sell 5 GILD 2019 $60 puts for $7 ($3,500) and that drops the net on the spread to just $1,200 and increases the upside potential to $8,800 (733%) in exchange for $3,366 in ordinary margin.  

I had intended to talk about Taser (AAXN) and a couple of other great stocks that are on our Watch List so I urge our Members to go over there and check those 21 stocks for remaining bargains before they all turn out like Whole Foods (WFM), where our trade idea (2/17) was:

WFM (2/17) – Nowhere near as cheap as SVU but WFM made $500M last year and is selling for $10Bn so p/e 20 but I like the fact that they are pushing into Europe and I like the rollout of their less-expensive 365 stores – though they are cannibalizing sales and eating into the bottom line for now.  Since it's a slow roll, I would just plant a stake by selling the 2019 $30 puts for $4.50 and see how things go with a break-even at $25.50. 

See, SVU, still pretty cheap!  

We will go over the Watch List tomorrow in our Live Trading Webinar (1pm, EST) and we'll see if 6,000 holds on the Nasdaq today but most likely we'll invest some of those long-term gains into improving our hedges – just in case gravity is real.  

 


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  1. Good morning, 

    CL below $49.. ouch.


  2. KC- Off the floor, showing signs of life? Perhaps, but it could be a move to sucker fresh longs in before driving lower. Who knew coffee trading could be so volatile and crazy? Everyone, just like knowing that healthcare would be complicated if you looked at past charts or experience depending on which you are talking about..


  3. Up and away…



  4. Good Morning.


  5. NFLX getting a nice push today after good news.  Glad I don't short that stock but part of the reason I will never short it unless it's extremely overbought is I really do think they will be bought out even at a crazy valuation.  I don't want to wake up one day and find out game over and seeing NFLX at 170 or 180 on a buyout.


  6. We are supposed to have the big tax unveiling tomorrow which means that all of Trump's friend are going to go long the market before it happens! They are looking at reducing the corporate tax rate from 35% to 15%, removing the corporate AMT and possibly even make pass-through corporations also pay 15%. At which point it will make sense for high earners to quit their jobs, start an LLC and get hired as consultants by their current employers! Corporations making billions will pay a lower rate than their middle-class employees.

    The cost – Around $250-300B per year… Not paid of course because deficits don't matter when the president is from the GOP. I am sure they will toss a few crumb to the middle class in there as well.


  7. abx ouch!


  8. FU TEVA!!!


  9. Phil,

    Thoughts on /CL and /KC?


  10. Phil;     Need help!    

    SVU;   Have  2 / 3.5 (1.85/.74)BCS Jan 19' , Short Puts 4 (1.15)  Jan 19'

    Current value; BCS   2.15/1.40   Puts .90

    Question?  Should I sell to close, the Long Calls, and hold the shorts call / put  to allow for time decay or do nothing 


  11. Good morning! 

    Another day another rally.  I think the money is coming out of commodities to run into equities as people are taking this tax cut thing seriously now and that does drop 20% to the bottom line of companies that pay taxes and that means small caps (who pay taxes) should outperform on the way up – again – because we already had this rally in November, when they first promised it.  

    Team Trump talking up the markets is not different than Team OPEC talking up oil – it works until it doesn't and then nothing helps.  Clearly though, we don't know when this train will slow down and we shouldn't try to guess – it's like a storm we just have to ride out for a while.  

    Silver all the way to $17.65 and Gold might test $1,250 again and if the Dollar wasn't so weak I'd be jumping in but watching and waiting seems best for now.  Anyway, looks like ABX may soon be a buy again and I always like that play better.  

    Coffee/Craigs – Really not too complicated, we expected it to bottom in April/May, which is why we've been selling the pops.  Same as last year:

    The only real problem with these trades is people get into them as if they are going to go your way right away and that doesn't really happen that often – that's why we scale in – so we're HAPPY to add more on the way down but that also doesn't mean that every time we ad more, it's going to pop right back up for us.  Short-Term moves on commodities are totally unpredictable – you need to be in for the long-term trends.  

    Oil too:

    We're in the same place we were last April and, hopefully, we'll be in the same place we were last June for the same no particular good reason.

    Big Chart – Wow, those 50 dmas sure didn't provide any upside resistance, did they?  

    Consumer Confidence 120.3 – down from 125.6 but still strong.

    Richmond Fed 20 is down 2 but still strong.

    NFLX/Rustle – These stocks are unstoppable.  Very 1999.  

    ABX/Jabob – That's why we bought back those short puts in the LTP – now we get to sell them again.  

    See above, Japar.  


  12. TEVA needs to get their act together or it will be full FU.

    ~~Teva CFO Eyal Desheh is set to leave after nine years in senior positions at the company, Calcalist reported. The company has not responded as of now.
    In February, CEO Erez Vigodman stepped down, with current chairman Yitzhak Peterburg taking over as interim CEO.
    Link to story: {NSN OOYX2D3PWT1C <GO>}
     


  13. All / GreenCoin – Just wanted to reiterate my introductory crypto how-to guide is live here.

    Phil – nice video on the Nasdaq this morning. I like the play on GILD.


  14. I'm long some /CL off the 49 line here, but close stops.

    Phil, do you like a USO trade here for the summer?  I don't have any USO.


  15. Phil – what was the play on GILD?


  16. never mind I found it


  17. Torq, GILD play is in the morning post above.


  18. Comment content omitted because it is too long.


  19. SVU/01 – I don't get the rush.  It's a potential $1.50 net pay-off against your 0.04 credit entry and currently it's at net -0.15 with SVU at $4.38.  Clearly, if you simply leave it alone (and SVU stays over $4), you will get $1.50 back so all you accomplish by making any sort of adjustment is PAYING the ridiculous premiums you are supposed to be selling.  In reality, you are also quoting crap prices because the last on the $2 calls was $2.10 but the bid is now $2.20 and the ask is $2.80 and use your head – they are $2..38 in the money – how can they possibly be $2.15? 

    When you are trading spreads like these (artificial buy/writes) – all that matters is whether or not the underlying stock is on track for your target or off track.  If it's on track – LEAVE IT ALONE!!!  I try to lead by example each month with the LTP by NOT TOUCHING IT!!! 

    TEVA/Seer – Kind of normal for a new CEO to bring in a new CFO.  

    Thanks BDC. 

    USO/Burr – In the Webinar last week we took the July $9 calls at $1.45, still about there.  

    • Mar. Consumer Confidence120.3 vs. 123.1 consensus; 124.9 (revised) in February.
    • Present situation Index 140.6 vs. 143.9 prior
    • Expectations Index 106.7 vs. 112.3 prior.

    • French Presidential finalist Marine Le Pen is "taking a leave of absence" from her role as the leader of the National Front Party, in an attempt to broaden her appeal before the next round of voting.
    • "I will feel more free and above all, above party politics," she told France 2.
    • Le Pen is still backed by NF, which wants to slash immigration, clamp down on trade, and overturn France's relationship with the EU.
    • The North has reportedly staged a massive live fire-drill to commemorate the 85th anniversary of the founding of its military following the docking of a U.S. submarine in the South.
    • Meanwhile, the Trump administration has invited all 100 U.S. senators to a White House briefing tomorrow to discuss the situation, while the President calls for new U.N. sanctions against Pyongyang.
    • President Trump is open to waiting until later this year to secure funding for a wall along the border with Mexico.
    • The shift could clear the way for lawmakers to strike a deal avoiding a government shutdown on Saturday, which marks Trump's 100th day in office.
    • Democratic votes will be needed, since spending bills need 60 votes to clear procedural hurdles.
    • A federal government shutdown could result in major furloughs at the DoD and even disrupt the production of weapon systems, according to experts.
    • Major U.S.-based defense contractors rely on the Pentagon for the bulk of their revenue and any prolonged slowdown in federal government spending or a halt in key reimbursements could force them to announce furloughs of their own.
    • There's also exposure for subcontractors and suppliers, including small or medium-sized businesses more sensitive to the disruption in cash flow.
    • The Trump administration yesterday began the process of imposing a tariff of up to 24% on Canadian softwood imports into the U.S.
    • Trump tweets: "Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!"
    • The loonie (NYSEARCA:FXC) is lower by 0.75% vs, the greenback to $0.7353, its weakest level since late last year. Stocks in Toronto are higher by 0.45% in early action.
    • The S&P 500 is up 0.5% in early action, but the ITB is lower by 0.5%.
    • Down the most is PulteGroup, off 4.4% after topping Q1 bottom-line estimates, but with gross margin off more than expected.
    • Also at work is the Trump administration's slapping of a tariff of up to 24% on Canadian softwood imports – the resulting increase in lumber costs would seemingly threaten homebuilders' gross margins even more.
    • Toll Brothers (TOL -0.7%), D.R. Horton (DHI -1.1%), Lennar (LEN -1.1%), KB Home (KBH-1.4%), NVR (NVR -1.4%)
    • Q1 EPS less items of $0.31 up 17% Y/Y, and ahead of estimates by $0.02.
    • Closings up 7% to 4,225 homes; ASP up 6% to $375K; revenues up 14% to $1.6B.
    • Gross profit of $368M or 23.2% of revenue vs. $356M and 25.5% a year ago.
    • Net new orders up 8% to 6,126 homes; dollar value of 16% to $2.4B.
    • Backlog of 9,323 homes valued at $3.8B vs. 8,755 homes valued at $3.4B a year ago. ASP of home in backlog up 6%.
    • Conference call at 8:30 ET
    • Previously: PulteGroup beats by $0.02, misses on revenue (April 25)
    • PHM -3.4% premarket

     

     

    • While Saudi Arabia's deputy crown prince, Mohammed bin Salman, has said Aramco (Private:ARMCO) is set to be valued at $2T, officials working on the deal have struggled to come up with a scenario under which it is worth more than $1.5T, WSJ reports.
    • The figure even accounts for a more favorable tax rate and other tools the government has instituted to make its IPO  more attractive to investors.
    • ETFs: KSA
    • Valero Energy (NYSE:VLO): Q1 EPS of $0.68 beats by $0.05.
    • Revenue of $21.77B (+38.6% Y/Y) beats by $2.61B.
    • Press Release

    • Freeport-McMoRan (NYSE:FCX): Q1 EPS of $0.15 in-line.
    • Revenue of $3.34B (+3.1% Y/Y) misses by $130M.
    • Shares +1.8% PM.
    • Freeport McMoRan (NYSE:FCX+2.2% premarket despite reporting in-line Q1 earnings and slightly weaker than expected revenues, and lowering its FY 2017 operating cash flow guidance.
    • FCX says Q1 sales volumes were hurt by regulatory restrictions on Indonesian concentrate exports, resulting in the deferral of ~190M lbs. of copper and 280K oz. of gold; concentrate exports resumed on April 21.
    • FCX foresees FY 2017 consolidated sales of ~3.9B lbs. of copper, 1.9M oz. of gold and 93M lbs. of molybdenum; for Q1, FCX expects 1B lbs. of copper, 440K oz. of gold and 24 M lbs. of molybdenum.
    • The company sees full-year operating cash flows of ~$4B, down from $4.3B, but says "the resumption of concentrate exports in Indonesia and expected continued strong performance from our Americas operations will enable us to generate significant cash flows in the balance of the year to achieve our balance sheet objectives."
    • Press Release
    • Alcoa (NYSE:AA+4.1% premarket after easily beating Q1 earnings expectations in its first full quarter as a stand-alone company.
    • AA says Q1 profits grew sequentially on stronger alumina and aluminum pricing, and reports a 59% Q/Q gain in adjusted EBITDA of $533M.
    • AA reiterates expectations for FY 2017 adjusted EBITDA of $2.1B-$2.3B and projects 2017 global aluminum demand growth of 4.5%-5% Y/Y, up from its January outlook for 4% growth.
    • The company continues to see relatively balanced global bauxite and alumina markets and a global aluminum surplus of 300K-700K metric tons.
    • AA will be "very aggressive on cost-cutting,” analyst Lloyd O’Carroll tells Bloomberg, and “can move a lot faster” since the Arconic spinoff

    • Caterpillar (NYSE:CAT): Q1 EPS of $1.28 beats by $0.66.
    • Revenue of $9.82B (+3.8% Y/Y) beats by $550M.
    • Excluding restructuring costs, Q1 2017 profit per share was $1.28, double first-quarter 2016 profit per share excluding restructuring costs of $0.64 per share.
    • "Our team delivered outstanding operational performance and, for the first time in more than two years, same quarter sales and revenues increased," said CEO Jim Umpleby. "We're also benefiting from our significant cost reduction and restructuring actions."
    • Increased guidance for 2017: Full-year earnings of $3.75 per share excluding restructuring costs (vs. $2.90 per share). Revenues are expected to be $38B-$41B (vs. $36B-$39B).
    • CAT +5.2% premarket
    • Q1 results
    • Press Release
    • Net earnings of $763M, or $2.61 per share vs. $806M, or $2.61 per share, in the same quarter a year ago.
    • Sales by segment: Aeronautics +8%; Missiles and Fire Control +4%; Rotary and Missions Systems +3%; Space Systems +11%.
    • Cash from operations $1.7B; Capex $170M; Repurchased 1.9M shares; Paid cash dividends of $544M; Backlog of $93.5B at the end of the quarter.
    • Updated outlook for 2017: Diluted earnings per share of $12.15-$12.45 (vs. $12.25-$12.55), on net sales of $49.5B-$50.7B (vs. $49.4B-$50.6B).
    • LMT -3.5% premarket
    • Q1 results
    • McDonald's (NYSE:MCD): Q1 EPS of $1.47 beats by $0.14.
    • Revenue of $5.68B (-3.7% Y/Y) beats by $160M.
    • Shares +2.06% PM.
    • McDonald's (NYSE:MCD) reports global comparable-store sales increased 4.0% in Q4. Total revenue was down 4%, impacted negatively by five percentage points from F/X swings.
    • Comparable-store sales increased 1.7% in the U.S. to top the consensus estimate for a 0.8% drop. The All Day Breakfast menu, Big Mac promotions and beverage deals all helped to bring in traffic.
    • International Lead Markets segment comparable-store sales rose 2.8% vs. +1.7% expected, while comparable sales increased 3.8% in the High Growth Markets segment vs. +2.7% expected.
    • The company reported operating income of $2.03B, which also topped consensus estimates.
    • "There's a sense of urgency across the business as we take actions to retain existing customers, regain lapsed customers and convert casual customers to committed customers, notes CEO Steve Easterbrook.
    • MCD +2.73% premarket to $137.80 (all-time high).
    • Press Release
    • Brinker International (NYSE:EAT) reports comparables sales fell 2.3% in FQ3 to miss the consensus estimate for a 1.8% drop.
    • Comparable sales fell 2.3% at company-owned Chili's restaurants and 1.6% at Maggiano's locations. Traffic was down by over 5% at both chains, but the impact from pricing and mix-shift was positive.
    • Restaurant-level operating margin fell 40 bps to 17.0% of sales during the quarter.
    • Previously: Brinker beats by $0.09, misses on revenue (April 25)
    • EAT +0.97% premarket to $45.90.

     

    • Supervalu (NYSE:SVU) reports Wholesale net sales rose 3% to $1.79B in Q4, primarily due to sales to new customers and increased sales from new stores operated by existing customers.
    • Retail net sales squeezed 3.2% to $1.07B and identical store sales fell 5.8%.
    • Gross margin rate grew 10 bps at 15% primarily driven by higher gross margins and vendor allowances as well as lower inventory shrink costs.
    • Adjusted SG&A expense rate up 20 bps to 12.3% primarily due to higher employee costs.
    • Operating margin rate slipped 140 bps to 1.2%.
    • SVU +1.82% premarket.
    • SUPERVALU (NYSE:SVU): Q4 EPS of $0.13 beats by $0.04.
    • Revenue of $2.91B (+0.7% Y/Y) beats by $10M.
    • Shares +1.82% PM.
    • Press Release

     

    • Walgreens Boots Alliance (NASDAQ:WBA) and Rite Aid (NYSE:RAD) agree to extend the end date of their merger agreement to July 31.
    • The companies say they are "actively engaged" in discussions with the Federal Trade Commission.
    • RAD +5.90% premarket to $3.95 after Q1 results. WBA inactive.
    • UBSD maintains a bullish view on Coach (NYSE:COH), keeping the retailer lined up as one of its top picks and rated at Buy.
    • Analyst Michael Binetti thinks M&A opportunities give Coach some upside. Buckingham Research hit the same theme in a note to its clients, saying the math works out for Coach to acquire Jimmy Choo (OTCPK:JYMHF).
    • Last week, Jefferies reiterated its Buy rating and $53 price target on Coach. The firm also thought M&A was in the mix for Coach.
    • Shares of Coach closed at $39.30 yesterday vs. a 52-week range of $34.07 to $43.71

     

    • Analyst Scott Searle sees "ample opportunity for growth" by new products like smartwatches and entry into international markets.
    • There's also plenty of monetization potential from Fitbit's (NYSE:FIT) loyal installed base of around 50M globally, with 23M active users.
    • He initiates coverage with a Buy rating and $10 price target, suggesting 77% upside from yesterday's close.
    • Shares +3.35% premarket to $5.85.

     

    • Gannett (NYSE:GCI) is up 7.9% and reaching its highest point since early February after posting Q1 earnings where it beat on top and bottom lines and raised EBITDA guidance for the full year.
    • Revenues grew more than 17%; excluding unfavorable exchange-rate changes and $1.8M in exited operations, they grew 19.3%. Digital revenues of $234.7M made up 30.3% of operating revenue.
    • Net cash flow from operations of about $31.1M, vs. a year-ago $17.3M. Cash balance at quarter's end was $89.5M.
    • Revenue by segment: Publishing, $694.9M (up 5.6%); ReachLocal, $77.6M (new); Corporate and Other, $968,000 (down 30.3%).
    • It's boosted EBITDA guidance for the full year to $355M-$365M, up $30M at the midpoint. It's reiterated guidance for revenues of $3.15B-$3.22B, and sees capex of $65-$75M (excluding real estate); depreciation/amortization of $150M-$155M; and effective tax rate of 28-32%.
    • Conference call coming at 10 a.m. ET.
    • Press Release

    • Netflix (NASDAQ:NFLX) is in a licensing deal with iQiyi in China, according to an exclusive from Variety.
    • A Netflix spokesperson tells Variety that it's too early to provide details on when the company's content will be available for streaming in China.
    • The Baidu (NASDAQ:BIDU)-owned iQiyi online video platform has 500M monthly users.
    • Shares of Netflix are up 3.07% premarket to $148.25.

    Accumulate $1 Million By Dollar-Cost Averaging AT&T 

    • Yahoo (NASDAQ:YHOO) CEO Marissa Mayer is set to make some $186M as a result of the internet company's sale of its core business to Verizon (NYSE:VZ).
    • A special meeting to vote on the deal is scheduled for June 8, according to securities filings.
    • The hefty pay out comes despite Mayer's inability to accomplish what she was hired to do five years ago: revitalize the fading internet icon.
    • Alphabet's (GOOGGOOGL) self-driving car unit is set to dramatically expand its testing efforts by making hundreds of autonomous vehicles available to families and commuters in the Phoenix area, writes Tim Higgins in the WSJ.
    • The "Early Rider" program would be the first public trial for the company after putting in more than 2.5M miles on city roads since 2009. Waymo will begin taking applications today.
    • Waymo already has 100 Chrysler-Pacifica self-driving minivans on the road and plans to add another 500.
    • A secret team of NASA veterans, robotics experts and ex-Tesla (NASDAQ:TSLA) staffers – recruited by Apple (NASDAQ:AAPL) to lead its self-driving car project – has had its cover blown by what appears to be a snafu.
    • Recently released documents by the California DMV contained the names of six "driver/operators" of Apple's driverless cars, but those names were supposed to have been redacted.
    • Previously: Apple looms large in self-driving car push (Apr. 22 2017)

    • April State Street Investor Confidence Index+2.6 points to 99.5 vs. 96.9 in March.
    • "April has seen some improvement in North America and Europe despite looming geopolitical tensions and policy uncertainty in the US and abroad," says State Street's Ken Froot
    • Barrick Gold (ABX -9.8%) plunges after reporting weaker than expected Q1 earnings and revenues and lowering its 2017 gold production forecast.
    • ABX trimmed its 2017 gold production outlook to 5.3M-5.6M oz. from 5.6M-5.9M oz., with two-thirds of the reduction driven by the sale of 50% stake in its Veladero mine in Argentina, which is expected to close at the end of Q2, and the rest due to a guidance cut at Veladero due to the recent spill; guidance for 2017 gold costs, copper production and costs, and capex were left unchanged.
    • ABX says it now expects full-year production at Veladero of 630K-730K oz. of gold, at all-in sustaining costs of $890-$990/oz., vs. its previous forecast of 770K-830K oz. at all-in sustaining costs of $840-$940/oz.
    • Q1 gold production totaled 1.31M oz., at a cost of sales applicable to gold of $833/oz. and all-in sustaining costs of $772/oz.
    • Morgan Stanley's Evan Kurtz, who has an Equal Weight rating on the shares and a $15 price target, says ABX's production outlook was "largely expected, but carries some risk."
    • Tupperware Brands (TUP +11.8%) pops after topping Q1 estimates by a comfortable margin and setting favorable guidance.
    • The company sees Q2 EPS of $1.17 to $1.22 vs. $1.19 consensus and FY17 EPS of $4.67 to $4.77 vs. $4.56 consensus.
    • Strong demand in Brazil, China, Mexico and South Africa is helping turn the tide for Tupperware.
    • The strong read on sales and profit was enough to push Tupperware to a new 52-week high of $73.50.
    • Previously: Tupperware beats by $0.07, beats on revenue (April 25)

    Even Tupperware!  


  20. Interesting story about how Amazon kills far more jobs than it creates.

    http://nypost.com/2017/04/25/amazon-is-great-for-consumers-but-is-it-great-for-america/


  21. AMZN/Tom – I've been saying that forever.  True of WMT too.  There's a reason it was obvious that monopolies had to be broken up in the 1900s, before that, everything was a mom and pop operation and you could see the damage "Big Box" stores did to a town right in front of your eyes.  Now people are bamboozled by BS in the media (and a lack of education and experience) and simply go along while Capitalism becomes a thing rich people do TO them.  

    Not that the Socialists didn't try to warn us:

    Image result for capitalism pyramid

    Image result for capitalism pyramid

    Image result for capitalism pyramid


  22. Thx Phil;    Forgive me for the Crap prices, the data was delayed


  23. OT: Body cams

    Anyone think that there is a market for a personal body cam that you wear all the time and then you download video and then software analyzes and uses facial recog to tag people in the videos that you want?

    For example, say I'm out on a picnic with my daughter but I don't want to hold my camera up all the time, but she does something really cute, and I miss it.  I'd love to have a copy of that, but I miss all the good stuff.

    Same goes for all those moments that are awesome but no one saw it.  etc etc etc


  24. Pres Obama jokingly hinted to this at last year's WHCD, almost exactly one year ago. 

    "if this material goes we'll ill use it again next year at Goldman Sachs and earn me some serious Tubmans"

    400k net at Cantor healthcare conference that is some serious Tubmans!

    My shorts are "bleeding my own blood"


  25. Angel – Obama will end up richer than Trump!


  26. Angel – One issue that the French election winner will face is that neither of them has an existing base in Congress. The congressional elections in June might change that of course, but it's going to be harder than winning the presidential elections. I don't know that Le Pen has a strong enough team to give her a majority no matter what. Macron could probably count on some socialists and centrist support so the better shot of the two. But we could certainly see a coalition government which in the end might not be that bad.


  27. AMZN/PHIL/TOM : it’s not the loss of jobs that the scariest part. It’s how they are aiming for absolute control over what we choose and how they are/will manipulate buying decisions.

    Scott Galloway – How Amazon is Dismantling Retail  https://youtu.be/3MOwRTTq1bY

     One example is that they want to push people to use Alexa instead of web search by giving lower process on Alexa purchases instead of through the web. The main reason being is when you ask Alexa what to buy it recommends a couple things they want to push instead of you seeing a list on a page with pros and cons. For example they show how they push their batteries and Alexa offers no other options?! They talk about getting rid of brands as if it’s a great thing. Brands are not all BS there are differences, pros and cons I want to see. I don’t want a homogenous purchasing space. So they just want one kind of everything made? I mean the vast number of products that really are not that different is one thing I agree, in Germany you don’t have a cereal aisle with 500 choices or you get 3 diaper brands, but allowing for brands allows for differentiation, allows for innovation. To make a product that is truly different.


  28. Phil/jobs… you've talked about this before, but I'm really concerned that there simply aren't going to be enough jobs to go around in the future.  It is only partly true that obsolete skills get displaced by newer skills. If a company replaces a thousand workers with a robot, then the robot is the one who got the job, not a person.  And unless you are the guy who repairs the robot, you are out of luck.  And does anyone think some unforeseen new industry is going to be labor-intensive?


  29. body cams/Burr – not sure society is ready for that. didn't go so well when google tried it: http://www.urbandictionary.com/define.php?term=Glasshole


  30. Pharm / SGYP,

    I have a cost basis of 5.50 per share. Do you think I should double down at this level ? I am also confident about SGYP's value and happy to hold them long term if needed.

    Thanks as always.

    Pat


  31. Phil, right now my portfolio is positioned slightly net short the market.  The butterfly portfolio is contributing a lot of negative delta, as is TSLA, not to mention a very considerable position in TZA via 2018 spreads, and short puts.  This net short position has obviously hurt the past couple days.  Is this what you would recommend, or should I get a bit more long?  I believe you have said in the past that you always want to be positioned net long the market, since it tends to go up (which has been very apparent this week).  I'm slightly down for the year, with TGT, FTR, TSLA being my biggest losers so far.  I'm not too concerned, just want to make sure I'm not over-hedged.    


  32. ETC (ethereum classic) is really moving. I like this coin.


  33. AMZN/microflux – thanks for the Galloway link


  34. Phil/Craigs – Another day another rally.  I think the money is coming out of commodities to run into equities

    Coffee, Oil, Commods, Bonds, Yen, Equities – April 19th we nattered here about JPY/USD carry taking $ down to 103 Yen on the next leg down.  Nattered April 20th here about Cup O Joe.  Right now Fib – 5% rule bounce in progress from 108.  Notice how the markets are reacting, when the carry is off there is liquidity. 

    Phil's observation above is cogent and astute.  Liquidity is not coming from the carry, but liquidation in commodities and bonds.  Said liquidation may continue as we approach a blow off TWIN PEAKS.  I cannot emphasis enough, WATCH THAT FX PAIR CLOSELY, as it is this overvalued markets liquidity condition TELL. Out.


  35. scottmi : welcome :)


  36. Major steroid injection in this market.  When does the short term shorting begin?  Never?


  37. SQQQ / Phil,

    What are your thoughts on the below SQQQ spread.

    Buy 20 May 33 Calls @ 2.17

    Sell 20 May 38 Calls @ 0.32

    As SQQQ is at 34.87 to me that feels like an efficient trade.

    Thanks as always.

    Pat


  38. SAINTY it's amazing the montization of post presidencies I have a feeling Trump will make billions Obama maybe one

    Clintons more than they deserved


  39. Look at /NQ just running away! 5050 up next. 


  40. Nat I need you to explain your comments in more clear language so I can learn from what you say. Can you please rewrite this as though you are saying it to someone who is a real beginner in this stuff, which is what I feel like lately. Said liquidation may continue as we approach a blow off TWIN PEAKS.  I cannot emphasis enough, WATCH THAT FX PAIR CLOSELY, as it is this overvalued markets liquidity condition TELL. Out. Liquidation of commodities will continue as we approach a blow off of which twin peaks? The FXpair is JPY/USD but if it drops are you saying it will indicate a market drop? I think that is what you are saying, but not sure.


  41. Phil,

    Rolling strategy question – when time permits:

    I have a small GILD sht put position: 4, 1/18 sht GILD 75 puts (orig crd of 7.89 x 4 = +31.60, now @10.75 x 4 = debit of 42.80 to buy back) that I want to roll. 

    Given my personal aversion to rolling to the most distant contract (1/19) in the event of a GILD Armageddon event, I am looking at rolling to the 1/18 65 puts (@4.65 x 3 = crd of14.25). 

    Net result would be crd of 45.85 ( orig crd 31.60 +new crd of14.25) minus the cost to buy back the 1/18 75s ($42.80) for a net crd of 3.05 with less exposure (3 cts instead of 4).

    I realize that the current position is essentially cash neutral if exercised against (75 – 7.89 = 67) which is where GILD is now – after your ' Potent Phil Power' broadcast recommendation yesterday - but am looking at buying myself some protection should the downtrend resume. 

    Your comments appreciated, as always.


  42. dollar getting ready to fail 98.50!


  43. Body Cam/Burr – I don't have time to live through my day once, let alone go back and watch the highlights!  I tell my kids they could have backpacked around the world by now for all the time they spend watching their friends' lives on-line.  Anyway, these on-demand drones are the future.  They'll get smaller and smarter and soon a camera/personal assistant will follow you around wherever you go, documenting your exciting life.  

    Now there's an idea, how about a drone uber that lets you "rent" a professional drone to follow you and document an event.  They could be dispatched and recharged in any city and, when someone orders the drone on the phone, it would lock on them and fly out and start documenting.  

    Alexa/Mirco – Works very well for daily things too like when you say "order pizza" or "get more detergent" – not too many people are going to say "get more Tide", like they live in a commercial.  If those brand preferences are "soft" habits, AMZN and their team of psychologists will prod and poke the sheeple until they "chose" the products Amazon wants them to.  One of everything made – Isn't that Russia and China's model?  Things that make you go hmmmm….  

    Image result for trump russia

    Jobs/Tom – No, there are not.  In 1900, 90% of the PEOPLE worked, everyone except people who were too young or too sick worked (too old not an excuse) and 90% of them were farmers.  100 years later, only 165M out of 320M people have jobs and 100 years from now, I doubt more than 50M people will have jobs.  You can't fix this by moving jobs around – you have to completely RETHINK the concept of labor and deal with a post-work society.  We are going in completely the wrong direction and it's going to cause massive, painful disruptions down the line.  

    This is why the funneling of wealth to the "job creators" is completely insane.  They use the money to build robots and put more people out of work and they make more money and buy up all the companies that didn't automate yet with their competitive advantage and put millions more out of work and get richer and richer and pay less and less taxes until maybe a few thousand people have everything and the other 320M people have to scratch out a subsistence living with no government assistance whatsoever (because the Supreme Court said "one Dollar, one vote").   That's the direction we're heading…  sad

    SGYP/Pat – At $4.25 you average in at $4.88 so not terrible but you could also sell the 2019 $5.50 calls for $1.05 and the $3.50 puts for $1 and that drops your net to $3.45 and you make $1.55 (45%) at $5.50 while doubling down to $4.88 makes just $1.24 (0.62 x 2) at $5.50 so you are better off with the puts and calls until about $5.65, which is up 33% from where we are now.  Even if you wanted to be more aggressive, I'd rather sell the $5.50 puts for $2 as that's net $3.50 on your new set and it cuts $2 off your basis right away.

    Portfolio/Palotay – Well, it does sound like you are a bit over-hedged.  As I noted this morning, we tray to make about 60% of what the market makes on the way up and stay neutral on the way down when we are "reluctantly bullish" – as we are now.  That being said, the STP fell $19,000 this morning and the LTP is not making up for it and the OOP lost some ground and the Butterfly Portfolio, as usual, is going nowhere.  

    TLSA is a very aggressive short so hopefully you have a good-sized portfolio as that one can really hurt you – it's a lot of the reason the STP is down $19,000 today as they are back at $310.  

    What you need to do is look to add some longs if you have margin room and, if not, I'd start with TSLA to lighten up on the shorts – it's super-aggressive.  TZA I'd simply write off the loss to the cost of insurance and move them along.  TGT and FTR, if they are 2019, are 2019, so don't worry.  

    Speaking of TZA:  In the STP, we have 100 TZA Jan $15 calls we bought for $4.40 and are now $3.58 but TZA is at $16.75 so the calls are in the money and we'll just have to ride them out.  We also sold 40 Jan $20 puts for $4.05, now $5.30 and again, we just ride them out.  Our other index hedge in the STP is SQQQ (now $35) and there we have 50 Sept $35 calls we bought for $6.20, now $3.15 (down $15,000) and 15 long Jan $48 calls that are leftovers from a spread but bought at $13.20 and now $2.45 is down $16,000.  That's the cost of our insuring $1.3M worth of longs in the LTP. 

    Fortunately, in the OOP, we balanced out our TZA spread:

    Short Call 2017 21-JUL 19.00 CALL [TZA @ $16.75 $-0.61] -40 2/9/2017 (87) $-12,600 $3.15 $-2.34 n/a     $0.81 $-0.27 $9,360 74.3% $-3,240
    Long Call 2018 19-JAN 15.00 CALL [TZA @ $16.75 $-0.61] 80 3/15/2017 (269) $41,360 $5.17 $-1.60     $3.58 $-0.38 $-12,760 -30.9% $28,600
    Short Call 2018 19-JAN 30.00 CALL [TZA @ $16.75 $-0.61] -80 3/15/2017 (269) $-14,560 $1.82 $-0.79     $1.04 $-0.08 $6,280 43.1% $-8,280

    Because we sold the July calls, we are, amazingly, ahead on this spread.  On SQQQ, we only have the bull call spread, so more damage there but not too serious:

    Long Call 2017 15-SEP 35.00 CALL [SQQQ @ $34.94 $-0.63] 25 3/1/2017 (143) $15,750 $6.30 $-3.15 n/a     $3.15 $-0.44 $-7,875 -50.0% $7,875
    Short Call 2017 15-SEP 50.00 CALL [SQQQ @ $34.94 $-0.63] -25 3/6/2017 (143) $-7,250 $2.90 $-2.05     $0.85 $-0.25 $5,125 70.7% $-2,125

    Notice the difference in how we hedge the $100,000 (now $283,000) OOP vs how we hedge the $600,000 (now $1,793,000) STP/LTP combo.  We KNOW our LTP positions will throw off $20,000 in a week like this so losing $20,000 on hedges is not a tragedy but we can't afford that kind of risk in the more conservative OOP, where we pretty consistently make about $10K a month.  

    So no AMZN, TSLA, NFLX in the OOP and we hedge our hedges so that nothing gets too out of hand.

    Don't forget in the LTP we cashed that MASSIVE CMG position, that left us too bearish for the week as we didn't lower the covers in the STP.  

    When/Rustle – IF Trump can cut taxes, then it's a whole new valuation game on the indexes and this 20% market rally will stick.  How he'll sell $4Tn in additional debt (10-year cycle), I have no idea but maybe the entire GOP caucus is a complete sell-out to business interests and has simply been waiting for this moment to completely F over their constituents.  $400Bn a year is more than enough to buy the next election 100 times over – that's the logic here.  

    That's the problem, no one has ever contemplated theft on such a massive scale before.  The repercussions of this kind of move will change America for decades to come and that's great if you are a corporation that's big enough not to be trampled by bigger corporations or a niche player like me who will benefit from the low taxes (as will my customers) and has no fear of robo-advisers (yet).  

    Let's say, for argument's sake, that Trump's family makes $200M in 2017, dropping taxes by 20% makes them $40M richer.  In just 4 years he will have doubled the money he spent to get elected.  No wonder he could turn down the $400,000 President's salary.  

    SQQQ/Pat – Well May is way too close, we capitulated to Jan and Sept ages ago.  The May $33s at $2.17 can be rolled to the Sept $35 ($3.11)/50 ($1.10) bull call spread for about even and you can offset the cost of the short calls, if you want, by selling a couple (2) of Sept $35 puts for $3.30 or any put on something you do want to buy.  The width of the spread protects you against a sudden move over $38 (and you should stop 1/2 the short $38s over 0.50 anyway and the rest at $1) and you end up with 4 more month of insurance with no money out of pocket.  

    /NQ/Jeff – Well why stop at this point?  

    GILD/8800 – Well GILD is at $67.18 and your puts are net $67.11 so what do you care what premium is attached to them at the moment?  The 2019 $67.50 puts are $10 so just keep an eye on that relationship and don't let it cost you more than $2 to roll down $7.50 but why roll if you don't have to?  Your adjustment makes sense but again, you don't have to.  Also, keep in mind, if they spike down (5/2 earnings) then the puts you want to roll down to will gain premium faster than the put you own so that roll price is likely to IMPROVE if the stock goes against you and, if it doesn't, then you don't need to roll.

    Dollar/Lunar – BUYBUYBUY /DX down here (98.62).  Might test 98 but I doubt it.

    Another one repeating last year's pattern of bottoming in April.  


  44. craig – Have you ever tried to read one of Nat Nabob's articles?  It's almost impossible to get through.  Although I do like to read fast and I have a short attn span.

    https://seekingalpha.com/article/4055359-20-quicklogic-trick


  45. taxes/Phil

    So the real question is if the tax plan doesn't pass (I don't think they will be able to sell it), then what happens to the market?  Does it continue or stay here in the talk that a new plan will be unveiled soon and the can is just further kicked down the road or does the market retreat?


  46. Because of the low volatility of CMG in last 3 earnings announcements, the volatility expected from today is very low.


  47. Phil

    What are your thoughts on mortgage reits

    NRZ  New Residential Investment Corp.

    Paying 11 %

    Thanks


  48. Phil, too early to get into ABX today? 


  49. 30 ticks on /cl each way 3 times makes for a nice day!


  50. Burrben – "Although I do like to read fast and I have a short attn span."

    A.D.D. sound byte and elevator version are NOT how I learn or roll. Why? The Devil IS in the DETAILS. From A Dollar Melt Up?  aka Ghostbusters…

    As those [our] faithful readers know all too well, and we thank you for your patronage and patience, which only hell knows wherefore and why, this is not a brief prospectus nor for the casual reader or faint of heart. Those desiring a dearth of detail as found in elevator or sound-byte versions, should immediately cease reading this missive, for continuance may severely damage their A.D.D (attention disorder deficit) modus operandi.

    As always, with regard to the subject matter and life in general, we claim to be nothing more than an idiot, albeit a useful one. In attempting to decompose these events, it is our hope that we can share what little we know (next to nothing), while perhaps learning something new and useful along the path. As always, take the best and leave the rest.


  51. Phil – Dollar – "Another one repeating last year's pattern of bottoming in April."

    Bingo, that's a partial footprint from a pattern of seasonality.


  52. I'm short /ES @ 2385 and long /DX @ 98.75 avg


  53. Craigs – "The FXpair is JPY/USD but if it drops are you saying it will indicate a market drop? I think that is what you are saying, but not sure."

    From the linked comments: Usually, weak yen vs dollar (carry off) Nikkei rises.  Strong yen vs dollar (carry on) Nikkei falls. 

    Generally… Weakening Yen vs $ (more Yen per $) carry is OFF as ample "dollar" liquidity exists, equities generally rise (volume can vary and volatility declines).

    Strengthening Yen vs $ (less Yen per $) carry is ON as "dollar" ill-liquidity exists, equities generally go sideways (thinly traded) and/or decline (selling volume and volatility generally increase).


  54. Phil,

    GILD – thx for the counsel. Agreed if GILD doesn't head south, no need to roll, however, trying to hedge against the unknown. 

    One aspect I didn't grasp – if the delta on the 1/18, 75s that I own is 70 and the deltas on the 65s is 42 then wouldn't the higher delta 75s gain premium faster ? Not sure how the 1/19 67.50s (delta of 46) figure in since I was had been looking at 1/18 65s.

    Thanks again 


  55. Market/Rustle – Well, so far, the fact that Trump has not actually done anything he said he would do in the first 100 days doesn't seem to have bothered anyone but I think if we get past July (fiscal year) with no tax changes, then people will believe nothing will take effect until 2019 and before that there's an election when all this crap may be reversed (one can only pray) before it does too much damage. 

    CMG/Rusle – I don't care, we're out.

    NRZ/QC – They seem fine but I don't know them in particular and learning a new REIT is a LOT of work.  If you remind me on May 1st, I'll check out the earnings and the CC but it looks to me like they simply dipped after going ex-dividend but, other than that, they are in good shape.  Of course REITs are a rough ride with rates changing. 

    ABX/Ult – Yes, too soon.

    Seasonality/Naybob – Not my favorite way to play but when you have a herd-driven market, those crop cycles need to be heeded. 

    Speaking of Dollar/Yen – /NKD up another 300 today.

    Delta/8800 – The $75s will do better if GILD goes up, worse if it goes down.  The higher delta is simply a function of what percent of each Dollar move you will catch.  If you roll the Jan $75 GILD puts ($10.75) to the $65 puts ($4.70) you are moving from net $64.25 to net $60.30 but the Delta drops from 0.71 to 0.42 so a $5 rise in GILD will drop the $75 puts about $3.50 but the $65 puts will drop just $2.10.  If you don't think GILD will go back up from $67.25, then of course you don't want to be in the short $75 puts but, as I noted, you can roll down 10% per year so it's really do you not believe they'll hold $60 in 2020 or $45 in 2022 or $30 in 2024.  As long as you are REALLY interested in owning them long-term, this kind of thing shouldn't bother you at all.


  56. I was having a really good day until Phil posted that /NKD pic.  Dang, shoulda held.


  57. Phil,

    Understood. Thanks for the in-depth lesson. To paraphrase DJT, "Who knew options could be so involved."


  58. Phil, with TSLA at 313, should the 300 short calls be rolled to, say, Sep 320? Could be done at zero cost for now…


  59. It is riduculous that congressional leaders have kept the $1.1 trillion spending measure under wraps, and with only three days until Friday’s deadline to pass it, most members of Congress don’t know the details,

    Our representatives are supposed to govern, yet they will have little time to examine or contribute to the makeup of the final product. A select few have real control of the nation's purse string.


  60. Phil – It's interesting BTC/USD pairs are trading at $1,267 and CNY pairs are trading at $1,070. Is that reflecting the difference of what the renminbi is really worth or the difficulty in getting in/out of BTC inside of China?

    http://coinmarketcap.com/currencies/bitcoin/#markets


  61. TGT/Phil – looking over the 2017 picks list..  would TGT be good here for a new entry?


  62. 2017 picks – actually, is there any best of the bunch for right now? PBI, M, VZ, LB, TGT..?   SUN has popped up a bit, but still offers 10% dividend!


  63. I was about to chide Phil for a lack ofposting today, when I realized that I had somehow checked the box to ignore Phil! Geez what an idiot I am. 


  64. this chart (1 d ticks) makes me think bitcoin is going to go on a tear.


  65. Back to record lows on the VIX… I wonder if anyone is loading up on long puts.


  66. LOL 8800.

    TSLA/Ellie – Knowing they CAN be done at zero cost is good enough for me!  Really, you don't want to do it if you don't have to.  If we're right and they collapse, we collect in June, not Sept.  

    Select few/Den – Even fewer than that, I imagine.  They all do what they're told, an not by Trump, who also does what he's told.  And who benefits?

    Goldman Sachs (with a dozen "advisers" surrounding Trump):

    Year End 31st Dec 2011 2012 2013 2014 2015 2016 2017E 2018E CAGR / Avg
    Revenue $m 36,793 41,664 40,874 40,085 39,395 37,850 32,248 33,330 +0.6%
    Operating Profit $m 6,169 11,207 11,737 12,357 8,778 10,304     +10.8%
    Net Profit $m 4,442 7,475 8,040 8,477 6,083 7,398 7,881 8,207 +10.7%

    JP Morgan:

    Year End 31st Dec 2011 2012 2013 2014 2015 2016 TTM 2017E 2018E CAGR / Avg
    Revenue $m 97,234 97,031 97,367 95,112 93,543 95,668 97,104 102,218 108,274 -0.3%
    Operating Profit $m 26,749 28,917 26,675 30,699 30,702 34,536 35,299     +5.2%
    Net Profit $m 18,976 21,284 17,886 21,745 24,442 24,733 25,661 24,058 26,492 +5.4%

    And don't forget, for both those firms, the "costs" in the business are the massive salaries drawn by management, who make more than the shareholders (but are also shareholders).  

    Image result for banksters trump

    Image result for banksters trump

    Renminbi/BDC – That is interesting, seems like there should be some way to turn  that into cash. 

    TGT/Scott – Love TGT, at $55 they have a $30Bn valuation and they dropped $2.7Bn to the bottom line last year on $70Bn in revenues.  and they paid $1.3Bn in taxes so cut that in half and their bottom line jumps 20%.  Don't worry, I'm sure they'll pass those gains along to their workers…  Anyway, as a new trade I'd go:

    • Sell 5 2019 $50 puts for $5.60 ($2,800)
    • Buy 10 2019 $50 calls for $8.10 ($8,100) 
    • Sell 10 2019 $60 calls for $3.75 ($3,750) 

    That's net $1,550 on the $10,000 spread that's half in the money to start.  If all goes well and TGT goes up 10% in two years, the net profit over $60 is $8,450 (545%) and ordinary margin is $3,014.  

    Best of the bunch/Scott – Well, ESRX got very cheap, they bear watching.  FCX is still cheap, GILD, of course, JNS, LB, M, PBI, QCOM, SVU, AAXN, XOM – those are good too.  SUN does have a great dividend but I'm not sure what kind of company it is now that the sold all those units.  

    LOL Craigs.

    BitCoin/BDC – Kind of already on a tear overall.


  67. Puts.. a quick review of DIA, SPY, RUT, NDX, QQQ, IWM, TZA shows IWM, RUT and NDX as the only ones with more puts transacted today than calls. IWM is the standout with a p/c ration of 2.381..!


  68. Oil suddenly took off, well $49.69 but better than below $49.  


  69. BDC, I set up my account at coinbase.com, but I have one question.  What is a Bitcoin vault and how is that different from a Bitcoin wallet?


  70. they're not letting TSLA drop below 312.  if it closes here, it'll open at 320 tomorrow!


  71. SGYP/pat – the 'drug' is best in class.  I am waiting, as we all are.  Phil's play looks good, which does wonders for the cost basis.  Lots of activity on OTM calls in October and Jan '18.


  72. Wow, I guess it was not explained in a cartoon so too hard to understand for our great businessman of a president:

    http://www.independent.co.uk/news/world/americas/us-politics/angela-merkel-donald-trump-explain-eu-trade-11-times-germany-chancellor-us-president-a7699591.html

    “Ten times Trump asked [Ms Merkel] if he could negotiate a trade deal with Germany. Every time she replied, 'You can’t do a trade deal with Germany, only the EU,'" the official told The Times.

    Donald Trump to turn off one of the government's most important sites
    "On the eleventh refusal, Trump finally got the message, 'Oh, we’ll do a deal with Europe then.'"

    Senile or dumb – take your pick! Can't wait to see that great tax plan!


  73. GOLDMAN we've been mewling about wall street and POTUS long before Trump

    At this rate I wouldn't be surprised to see DOW 25000 by year end

    Absurdity begits more of the same


  74. EPZM….up 16% … LOL.


  75. here comes the 3 pm buy program… NAS spiked higher


  76. lunar/ TSLA at 320 tommorrow.   What's the logic.  I happen to have 5 312.5 call I am just playing with.


  77. Phil  SQQQ  Any new position ? How about 2018 45/70 bcs at net $1.50 x50 or 100x? Has to break one of these days.


  78. CDN, congratulations, you probably made a dollar on each of those calls in the last 30 minutes (unless you are short the calls).  "they" want to get to 350 before end of year…no logic. 


  79. Lunar/Tsla  Yes I am long but its a weekly expiring in 3 days. Still, I accept your 320 open and will close out at that time.  I have someone to blame now which is comforting


  80. GOGO – even these guys perking up, though on diminishing volume


  81. Phil,

    Any trade on VZ; seems to have come down from 54 at the beginning of the year , down to 46.50. Prefer a 40 P for 2019, start with 5 contracts and DD if it goes lower. Nice dividend also….your thoughts….Thanks as always


  82. Wow, today flew by.

    EU/StJ – Would be funny if not so horrifying.  They should at least make you pass a basic test of recent World history before you can become President.  

    Dow/Angel – Yep, snuck right in at 21,000 while we were watching the Nasdaq.  S&P 2,400 next. 

    EPZM/Pharm – Great call!  

    SQQQ/490 – I talked about it earlier but that spread works fine.  One day it will fall and, until then, it's the price of insurance.  

    GOGO/Scott – I hate it when a stock I like isn't cheap anymore.

    VZ/Jasu – T and VZ are bleeding customers to TMUS, not an exciting time to get in on either of them.  $40 put not a bad entry though.  Even if they fight back, it will impact margins as people are wising up to low-cost data plans on smart phones.

    And S is hanging in there too:


  83. TSLA/Lunar

    I'd take some profit now on those calls. If market is down tomorrow, TSLA most likely will be down.  Didn't perform great yesterday in context of the market and Bank of America downgraded it today and GS reaffirmed a sell rating.  This is just moving with ETF money and automated buying programs today.


  84. Thanks to DJT, Canada might be an inexpensive Summer trip…..



  85. we have an energy report this afternoon?


  86. TSLA/rustle, it's CDNJay that's long.  i've been short TSLA since 2013 !!!


  87. TSLA/lunar

    Ugh


  88. WYNN, looks like this won't be coming back to 100 anytime soon.


  89. CMG 1.60 vs 1.27.  Should've bought those 470 calls at 15.00


  90. CMG and WYNN both up big on earnings.  

    Energy/Angel – API later. 

    CMG/Rustle – I'm still glad we took the money and ran on the bull spread.  We still have the short puts…  The crazy thing is that it was ever that low!  


  91. API oil report due at 4:30 pm EST.

    Consensus expectations are for a 1.6 million barrel decline in crude stocks.


  92. Anyone trading CL into inventory reports?


  93. too late, CL already moved down although seems to be moderating.


  94. CRUDE +0.897mb

    GASOLINE +4.445mb

    DISTILLATES -0.036mb

    CUSHING -1.971mb


  95. Will be a bullish sign if oil can hang onto $49.50 through tomorrow.  Gasoline build is very ugly though. 

    My diminishing demand premise is looking good!


  96. People are freaking out and this lumber tariff doesn't even go into effect until Sept.  


  97. Phil,  how will the lumber tariff affect LL?


  98. Phil, 

    Does the /RB build change your premise on /CL thru July?


  99. jelutuck / Coinbase – the "vault" just adds a layer of security where there's a 3-day waiting period to withdraw coins.


  100. Craigs – "I was about to chide Phil for a lack ofposting today, when I realized that I had somehow checked the box to ignore Phil! Geez what an idiot I am. "

    As Aunt Bee (Beatrice) might have said regarding Opie Taylor… Oh Andy, it was an accident, so aren't you being a bit harsh on the boy? Those who choose to use the ignore button are by definition, an ignoramus.


  101. PHIL/CL your diminishing demand premise certainly is very good!

    you continue to believe that trough to peak seasonality will kick in..this action is very bearish but the charts look pretty oblivious to fundies except "it's driving season!'


  102. earnings are the best they have been in five years tax cuts no shutdown Le 

    Pen will implode buy buy buy..I would think tomorrow will be down…


  103. I wonder if tomorrow will be one of those EIA reports that is very different from the API and/or if the OPEC guys announce new production cuts to keep the price from dropping too far into the "summer driving season'. 


  104. It’s been a long time coming but MiFID II (MiFID) is almost upon us.<p>Most people in the industry have been aware of the impending regulations for many years, but were able to brush it aside for a variety of reasons: the implementation date is far in the future / it’s been delayed / we are waiting …


  105. Donald Trump has long been television ratings gold, and, even as president, he has kept his eye squarely on the small screen as a gauge of his popularity, a barometer for his governing agenda and his ability to dominate the airwaves, as The Washington Post’s Ashley Parker and Robert Costa reported …


  106. Stock markets in the United States rose Tuesday morning, buoyed by optimism over far-reaching tax changes that President Trump’s administration is expected to propose in the coming days.<p>The Nasdaq composite index rose above 6,000 for the first time, while the Dow Jones industrial average and the …


  107. The pain of RB is not letting up.  Having to really hunker down on margin maintenance if I want to see the eventual up turn.  


  108. by williambanzai7 – Apr 24, 2017 2:11 PM<p>Look, a bright shiny object!<p>by Sprott Money – Apr 24, 2017 11:55 AM<p>Constant economic predation. Ever more …


  109. A coal mining industry group’s board of directors voted on Tuesday to press President Donald Trump to withdraw from the Paris climate change agreement — just one day after EPA Administrator Scott Pruitt met with the group’s leadership and urged them to push the issue, two sources told …


  110. by williambanzai7 – Apr 24, 2017 2:11 PM<p>Look, a bright shiny object!<p>by Sprott Money – Apr 24, 2017 11:55 AM<p>Constant economic predation. Ever more …


  111. Marijuana is likely to be legal throughout Canada next year and the markets are eager to get in on the ground floor.<p>Canada continues to trail blaze when it comes to legal marijuana, with national legalization on the table in 2017 and even Snoop Dogg traveling north of the border to partner with an …


  112. Whilst we still aren’t entirely sure what the iPhone 8 will look like, there have been a flurry of rumors in the last month that the device will not be launching to Apple’s normal annual schedule.<p>Today, Nikkei is the latest publication to claim that the iPhone 8 may not be in customer’s hands until …


  113. 100 Days: Trade<p>The president can look tough on tariffs against a country that can’t retaliate.<p>President Donald Trump’s administration fired its first shot in a potential trade war, but it’s not Beijing or Mexico City in the crosshairs. The target: Our friendly neighbor to the north, Canada.<p>Trump …


  114. Online commenters have praised an anonymous hacker’s efforts to disrupt the Islamic State militant group’s social media accounts by filling them with gay porn.<p>The hacker, who goes by the name WachulaGhost, started targeting the Isis accounts after being deeply affected by the notorious shooting at …


  115. Yann LeCun once built an AI chip called ANNA. But he was 25 years ahead of his time.<p>The year was 1992, and LeCun was a researcher at Bell Labs, the …


  116. Chicago’s Trump Tower has an unusually large number of condominiums for sale and for rent, and real estate agents predict that a glut of available units in the building may pressure owners to drop their prices.<p>Already renters in Trump Tower say they have been able to get sizable discounts.<p>Bearing …


  117. <b>Nuclear bombs have a strange quality</b>: They are a type of weapon that countries spend enormous sums of money to develop but <b>don’t actually intend to …


  118. Strategist Tom Lee has a clear message for investors: Stocks are carrying more downside risk than upside risk at this juncture.<p>Lee, founder and head …


  119. Canadian PM responds to lumber tariffs imposed by the US

    TORONTO (AP) — Canadian Prime Minister Justin Trudeau said Tuesday that Canada and the U.S. could suffer from what he called a “thickening” border, a day after the Trump administration imposed new tariffs on softwood lumber and trade tensions between the two countries escalated.<p>Trudeau was …


  120. The Dust Bowl years can serve as a metaphor for what we may be facing economically in the coming months and years: bad government producing high debt …


  121. Trump adviser Kellyanne Conway has lavish new digs in the nation’s capital, according to a report by The Washingtonian.<p>An anonymous real estate source told the magazine that Trump’s former campaign manager was the likely buyer of a house listed for $8 million by the late Moeen Qureshi, former …


  122. Oil’s jerky path to recovery has been a frustrating, money-losing affair for hedge fund trader Pierre Andurand this year, but he’s sticking to his …


  123. Facebook is testing a new feature that presents you with alternate perspectives before you read an article – and it might be its best attempt at combating fake news yet.<p>It’s doing so with a small addition to its ‘Related Articles’ feature. First introduced in 2013, the feature would pull up …


  124. After the failed negotiations over the repeal of Obamacare earlier in March, the Trump administration appears to be on the brink of proposing a new health care bill. While the details are still sketchy, it seems likely that the new bill will leave many lower-income Americans without access to …


  125. Although we Canadians are a polite lot, we now find it necessary to construct a giant wall on our southern border using Canadian softwood lumber. We will make Trump pay for the wall in part by imposing a 20% tax on maple syrup exports. The balance will come from the sale of Marijuana Visas beginning next year. Construction begins tomorrow.


  126. MEXICO CITY (Reuters) – Mexican annual inflation rose more than expected in early April to hit its fastest pace in nearly 8 years, which could bode for further interest rate hikes from the central bank.<p>Inflation for the year through mid-April was 5.62 percent <MXCPHI=ECI>, the national statistics …


  127. They’re small, they’re cheap — and the Navy loves ‘em.<p>The Navy’s new fleet of Littoral Combat Ships is a shambles.<p>Would-be multi-mission warships …


  128. Why Barcelona Is Actively Trying to Push Away Tourists

    Barcelona is making it clear that tourists are no longer as welcome as they once were.<p>Two days after it banned all new hotels from the city center, …


  129. Samsung sure has some genuinely witty social media editors handling its Twitter account.<p>As part of its Galaxy S8 promo efforts, the company took to Twitter to ask its followers to share the very first photos they’ve snapped with their new handset.<p>While many responded to the request and tweeted …


  130. Who’s really going to end up paying for the new Trump tax on Canadian lumber? New home buyers in the U.S.<p>The Trump administration announced Monday plans to impose duties of up to 24% on most Canadian lumber, charging that lumber companies there are subsidized by the government. Canadian lumber …


  131. It’s incredibly easy to lose the context of earnings amid a hectic season — especially this week, which is filled with numerous earnings conference calls — and simply glance at the headlines and big-number figures. That’s a mistake that investors should be wary of making, especially in the case …


  132. AT&T sheds more lucrative wireless customers in 1Q

    NEW YORK (AP) — AT&T Inc. on Tuesday said it lost more of its most lucrative wireless customers during the first three months of the year as the country’s biggest mobile carriers try to lure customers from each other with offers of unlimited data plans.<p>Most people already have a cellphone, and the …


  133. Watching TV shows on devices other than tradition televisions is becoming ever more widespread, and the speed at which people’s viewing habits are …


  134. President Donald Trump appears to be OK with people judging his success by the stock market.<p>In an interview with the Associated Press on Friday, Trump was asked whether it was still fair to use the stock market as a scorecard to evaluate the success of his presidency.<p>”You live by the sword, you die …


  135. Ex-NASA engineer says that slower-spinning electric motors will keep noise to a hum—with only a couple of planes overhead, even at rush hour.<p>Flying cars still seem like one of those futuristic technologies that only exists for now in the realm of science fiction and old episodes of <i>The Jetsons</i>. But …


  136. A high-end Tesla Model S can rocket from zero to 60 mph in 2.27 seconds.<p>But can the electric car maker itself accelerate from producing 80,000 autos a year to 500,000 in 2018? A million in 2020? Can it make money in the process?<p>Short sellers are betting big on no.<p>It’s a dangerous bet.<p>Here’s how it …


  137. Lyrebird Can Listen and Copy Any Voice in One Minute<p>The resulting artificial voices do sound a little robotic, but are clearly identifiable as being …


  138. Verizon had a free cash flow shortage during 2016, an early indication that the dividend could be unsustainable and detrimental to Verizon’s future …


  139. Barrick’s first-quarter earnings report misses the mark, but are things as bad as they appear?<p><b>What happened</b><p>Shares of large gold-mining company <b>Barrick</b> …


  140. Tax plan probably a "sell the news" event? Already hedging about details not coming just yet, and with Ryan opposed to a major component, it seems that all the optimism is a bit early. Thoughts?


  141. grenowoods LOLZ funny stuff


  142. @Craigs,  I agree, this market optimism might unwind soon once the earnings season noise is behind us.  Also, the bond market is giving different indications – increase in high yield spreads, tightening of the yield curve – one of the articles posted here – Tom Lee.  I am surprised to hear this guy be cautious on the markets since he has been one of the perma-bulls for a while.  He quotes some stats on how historically market corrections have been better predicted by bond markets.


  143. And I hope this tax plan is a "sell on the news" or "sell on delay (thanks Ryan)" event.  Either case, sell -


  144. Canada fence- That would be hilarious, and it could be started pretty cheaply, hire 10 guys for a week, buy some lumber and call every media outlet you can find… can you imagine how many would show up? Make Donald so mad he'd piss his pants having to answer questions about that! Hey, it would be bigger than Trump's wall… I can hear it now… the comedians would have a great time with it. Worth every penny, somebody up north should do a kickstarter for donations… Mr. President, did you hear about Canada's really big wall? Now imagine a big announcement that they were deporting all the illegal Americans… I'd volunteer to go be deported…  got me smiling, thanks! Really big tax plan coming right up tomorrow… when will they vote to keep the damn government going? How soon do we have another debt ceiling vote? Funny thing is the expectations from some of us are disaster, pretty low bar…


  145. mkucstars1 > There is no need to hire anyone, just advertise Molson "Canadian Too Fours" to all helpers.


  146. Damn it Aquila – I was about to post "Offer free beer and half the country would turn up." But you kind of beat me to it though. Coincidentally, I'm currently sitting in a bar in northern Alberta drinking beer brewed by Molsons. 


  147. …. not too many takers for American "beer"?


  148. the valero rule – VLO is going down, XOM, OIH, XLE, CVX, CHK, SU, all trending up. Based off this article, http://www.philstockworld.com/strategy/ -- I am curious of your thoughts when VLO is trending down while the others are trending up.  Is this still a long opportunity on /CL.   

    by the way, i keep trying to find the 'end' of PSW articles, but I keep stumbling on more and more great stuff.  drinking from a firehose – good times!


  149. Damn it again Aquila. I was trying to avoid saying it but the draft I drink is Coors Banquet, brewed by Molsons up here. There are only four beers on tap at our small pub and that's the only one I can stomach. Pretty much tastes the same as the first Coors beer I drank in Colorado Springs back in 1986,


  150. Except VLO has been essentially flat for five months.


  151. ABX – Q1 results

    Long story short, Barrick faced some weather-related challenges and sold off half of a key mine this quarter, but overall, this wasn't a bad quarter. It continues to pay down debt, maintained its leading AISC, and remains healthfully profitable with a prudent budget. Gold investors would be wise to get Barrick Gold on their radars after today's drop.

    So what could be a new 2019 pick ?


  152. Tweet Tweet, Twitter (TWTR) up 10% Pre-Market 

    Daily active usage up 14% Y/Y 


  153. Good morning! 

    A little behind as I'm back from an early meeting. 

    Doesn't look like too much excitement as we wait for the Great Tax Cut announcement.  

    Oil couldn't hold $49.50 but the Dollar test 99 so that handicaps oil.  /RB can't hold $1.60 though. 

    LL/Taihu – I don't know how much of their lumber is Canadian sourced but I think this affects mostly soft wood – the kind used in construction, not the kind of wood you generally make floors out of.  Worry more about Peru cracking down on illegal logging.

    /RB/Japar – It would if the Fundamentals mattered on oil but they don't.  If they did we'd be in the low $40s.

    begins final expansion phase at field, aiming to double production

    is at 9.3 million bpd, up almost 10% since mid-2016, approaching the level of ’s top ,

    Reuters data shows that the volume of crude oil plying the world’s oceans hit a record high 47.8 million barrels per day in April, a 5.8 percent jump compared to December levels. That is a worrying sign given that December was the month before OPEC began reducing, so if global crude oil shipments are above even those elevated levels, then supply is probably higher right now than many believe.

    Photo published for Taking Stock

    /NG back from it's vacation.

    Seasonality/Angel – If it doesn't, it will be the first time ever that oil hasn't peaked in June/July.  Even if demand is being driven down by better fuel economy, it would still be relatively higher in the summer.  

    Earnings/Angel – Have you seen any good breakdowns.  I'm curious what "best" really is.  

    TSLA S loses top safety rating by Consumer Reports.  

    LOL Greno – Sound policy!  

    Taxes/Criags – You would think people will sober up but this party has been non-stop.

    Bonds/Learner – Those guys are usually smarter than equity traders.  

    Valero Rule/Joseph – That died many years ago.  What Valero tells you is the direction of the crack spread – the profit the refiners make selling 42 gallons of gas (really gas and distillates) vs the cost of the barrel they bought.  So if VLO was going down, it meant their spread was dropping which meant they would be less inclined to ramp up refining until they get better prices, which put pressure on oil prices, etc.  Sadly, the market kind of disconnected from those short-term fundamentals and now it's much more important what some OPEC minister says on the way to get his morning coffee.  Currently, it's very difficult to pass price increases on to the consumers so oil going up is bad for VLO as it simply narrows their spread.  Also, their earnings weren't so hot.  

    ABX/Your – I'd stay conservative at the moment with something like this:

    • Sell 5 ABX 2019 $15 puts for $2 ($1,000) 
    • Buy 10 ABX 2019 $17 calls for $3.40 ($3,400) 
    • Sell 10 ABX 2019 $22 calls for $1.85 ($1,850)

    That's net $550 on the $5,000 spread that's out of the money and you're obligated to buy 500 shares of ABX at $15 ($7,500) if it's assigned to you (not likely if they are above $15).  If all goes well, ABX goes up and you just collect the money.  If not, you can roll the $17 calls down to the $13s (now $5.50) for $2 or less and then you've spent $2,550 on a $9,000 spread (and the puts can be rolled down and out as well when 2020 comes along).

    I'll add this to the OOP if it comes down to $15ish.

    TWTR/01 – I had faith.

    http://www.philstockworld.com/2017/04/09/philstockworld-april-portfolio-review/

    • TWTR – Losses are not so terrible so this is a patience play.
    • TWTR – Very disappointing but we have a very low basis.  $5,315 upside potential. 

  154. headline: anthem hopes to resolve dispute with ESRX