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Monday Market Movement – Maybe Momentum Makes More Mayhem?

Wheeeeeee!  

We love a good sell-off but we cashed in our index shorts with huge gains last Friday (you're welcome) and this morning, the Oil (/CL) Futures longs we kept (also picked for you in Friday Morning's PSW Report) are up $1,000 per contract at $46.50 and Gasoline (/RB) just hit $1.52, which is up $1,260 per contract and we are taking the money and running on both of those while waiting for the bounces to reload our index shorts.  

It's really all about the Nasdaq (/NQ) which, so far, has fallen from 5,900 to below 5,700 but we'll be looking for a weak bounce over the 5,700 line (40 points) to 5,740 so going long on /NQ is a no-brainer this morning with tight stops below the line.  If we make a strong bounce (5,780) today, then all of Friday's sell-off can be quickly forgotten but failing the weak bounce would be a bearish sign and we'd be looking for other indexes to short as well.

Mondays are, of course, meaningless days in the market, especially in the summer and we'll have to wait until tomorrow to see what's really going on but a huge correction like we had on Friday COULD lead people to contemplate that some of the overbought crap they have in their portfolios may not actually be worth 100 times earnings. 

Speaking of Tesla (TSLA), the lock-up period on their secondary offering ends on the 15th (Thursday) and 1.335M shares that were sold for $262 on March 20th can now be sold for $350+ (up 33%) at the same time as the long-term growth prospects of the company are being questioned.  On top of that, another 3.2M shares become convertible at $327.50 and bond-holders look at that as a bonus and may be quick to flip a 10% quarterly gain – that's the danger of constantly raising Billions each year to fund your cash burn.  

As you can see from the chart on the left, without subsidies Tesla's sales fell off a cliff in Denmark and TSLA's US EV Tax Credits have only until Q1 '18 before they drop in half to $3,750 and, by Q3 '19, they will be down to $1,875 before terminating completely in 2020.  

Current Expectations For $7,500 Federal Credit Phase-Out For Major US EV Makers (*aprox). Grey shaded areas are expected future sales in 000s. Colored blocks indicate stage of the Federal credit a particular OEM is at (click to enlarge)

That's an even bigger problem for Tesla as Toyota (TM) hasn't even begun using their credits and Toyota customers will be getting double the rebates Tesla customers get in 2019  and then Ford and BMW will have the advantage in late 2019 and 2020.  Being first to market may give you an early advantage but, in this case, it turns into a strong disadvantage down the line.

We went short on TSLA back in May and boy that was a disaster (we're still trying to wriggle out of that trade).  See:  Tesla’s Earnings Miss – Emperor Musk has no Clothes!  Still, nothing has changed our mind regarding TSLA's true value being well below $300 and our current position (after rolling our initial loser) in our Short-Term Portfolio is:

So we started with a net $6,900 credit and it's not likely the June puts will go back in the money (Friday is expiration and TSLA would need to drop 10%) so we're just crossing our fingers now and hoping the stock goes back below $335 by July expiration (21st) so we can net out of the whole trade even (from our initial loss in May), though selling those $335 calls now for $32 nets you short at $367 – I love that as a new play!   If July doesn't work out, we'll roll the short calls along because, EVENTUALLY, reality will kick in and tank this stock – knowing when is the tricky part…

Today is going to be a watch and wait day for the most part, though we usually find something fun to trade during our Live Member Chat room.  As I mentioned above, we're long /NQ and looking to reload on Oil and Gasoline as well as our index shorts if the Nasdaq fails it's weak bounce line.

As I noted on Friday, it's a big data week with the Fed Rate Decision on Wednesday (2pm) and, very unusually, Bill Dudley is speaking Tuesday at 1:35, the day before the meeting and Kaplan speaks on Friday so it seems to me they are going to be hiking and feel the need to steer expectations over and above the usual quiet period around a meeting.  I don't think enough people are expecting a Wednesday hike – we'll see how that plays out during the week.

Be careful out there.  

 


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  1. Phil--is there a reason why JO is so low? I would have thought it would be at least 18 with coffee rallying? Is the fund broken? Decay? 


  2. Morning All

    Sold KC at 128.65 from 126. Bought 1 long CL at 46.65..and 1 Long NQ at 5700


  3. Good Morning.



  4. Well I thought TSLA was going to open under 350… Dangit!


  5. Latch/CL – is that July or Aug contract?


  6. what made tsla jump?


  7. ravi – CL CLN7

    Phil – Silver — bouncing on the $17 line… time for a long?


  8. Latch/CL-FYI, you might know this already….

    Last day of trading is Friday as per my broker. Monday 9am is auto liquidation cutoff.


  9. IBM – Has a nice looking chart.  One of the few techs showing good relative strength.


  10. FU stocks rallying today finally


  11. I'm shorting /TF now after taking a bit of a loss on /NQ


  12. Retail stocks catching some bids.


  13. thanks ravi – yes I show 4 days trading left


  14. Good morning!  

    This is how our Government runs now:

    How can even Republican's not realize how F'd up this is? 

    JO/Jabob – It's pretty much tracking coffee, which has been generally down though, with /KC, we've learned to take advantage of the moves within the channel – this is why I like playing Futures better than stocks – we make money on the way down and we'll still make a fortune on the way up.

    Oh no, indexes failing already.  Well out of /NQ and back to /TF shorts (1,420) and /ES shorts (2,420) with tight stops above.  Missed 21,200 on /YM.

    Big Chart – Could get very ugly if S&P follows the Nasdaq.

    TSLA/Jabob – Too many well-conditioned dip buyers.  

    Silver/Ravi – Since It think the Fed tightens on Weds, I'd wait and see where we are.  

    IBM/Albo – Possibly my next Stock of the Decade if it doesn't break out too high by 2019 but now would be a good time to buy under $300.

    FU/Jabob – That's one of the nice things about value stocks – they do well in downturns.  

    Good switch Jeff.  

    Retail/Albo – Had a big day on Friday too.  Funds are looking to switch to underperformers it seems.


  15. sold SI at 17.065.  the dip below 16.985 scared me


  16. I'm going to poke long at /NQ 5650 with very tight stops below.  250 down from 5900, so 50 point bounces if it holds.


  17. GILD looking good today.  IMAX even holding well last couple of days.


  18. Jeff – nice call on NQ, I followed – thanks for sharing.. stop at 5679 at the moment and moving it up more hopefully.


  19. Jeff – 5% rule on NQ – 5900 -5650=250.  ok.   than 50pts is 20% = weak bounce?   is that the math?  Right now we are getting 25pts bounce to 5685 and failing.


  20. Cliffs Natural Resources Inc is on the move.


  21. Phil,

    Question: NQ volume appears to be tracking higher than Friday, this is ominous given weak bounce lines are also failing.  NQ is way overdue for a correction.  You have mentioned Monday movement is meaningless, do you think the same for today if volume is decent?


  22. learner – vol index.  Are you reading that off TOS? I see 28.65%. what does that mean?  I also see the bars at the bottom but there is no scale. 


  23. Latch, I was just looking at the charts from finviz. see the volume scale below.



  24. Latch, yes – sort of. 5600 is 5% down in the bigger picture, but really you are supposed to look at consolidation over the longer term with the trend in general to figure out the significant lines over the longer term.  Then look at the more recent action and see what lines up.  You can use the 5% rule for any time period on its own, but its better used with a sense of the bigger picture so you don't get caught up just making lines whereever. 5650 isn't a long term line (no consolidation etc.) but it is a round number and lined up with a pivot point. So, I was willing to take a poke as long as it held thinking that 5600 is 5% down and would be next if it broke.  The others turned around at the same time so that was also helpful.  Of course tight stops! Since it held, we watch the action and look for 50 point bounces (20% of the move) and see what happens. 

    Let's see what Phil says….I could be just telling you hocus pocus and randomly got it right today, so take what I am thinking with a grain of salt. 


  25. FU TSLA!!!!


  26. go FTR!!!


  27. So, now I can play long again over 5700 and look for 5750 but have tight stops below the line.


  28. MSFT – did the short Sep $67.50 calls ever fill in butterfly adjustment?

    CTSH – did the long 2019 $55 puts ever fill in butterfly adjustment?


  29. Options Opportunity Portfolio Review (OOP):  Well, we did it.  AAPL pulling back a bit (right after our June 1st adjustments) was the perfect way to gain ground as we now have 60 short Sept $140 calls that are now up $45,000 leaving us miles over our 8/8 (2-year anniversary) goal with $318,192 – up 218.2% overall and up a wild $33,354 (33%) since our May 5th review.  

    The funny thing is, we didn't add any new plays, other than FXP, we simply adjusted some old ones but, as noted last month, the positions we had had the potential to gain $163,373 over the next 18 months – it just so happens conditions allowed us to gain 20% of that this month.  Also, last month was a $7,107 loser so we're really up net $26,247 over 2 months, which is right on track for our usual $10,000/month gains.  

    BALANCE is key and yes, as we saw last month, balance doesn't mean you never lose but between balancing our positions and BEING THE HOUSE and selling premium to suckers – we tend to win out over time.  That's why our AAPL adjustment was aimed at selling as much premium as possible – AAPL was high and people were paying far too much for long calls and they have quickly come back down in price – so quickly that I'm not sure I want to let them ride.  

    • USO – I'm less enthusiastic than I was about this one so no adding or rolling but I don't hate it enough to kill it.  
    • UUP – Expires on Friday and a big disappointment but the Fed is meeting Wednesday so I'd rather hope for a move up than take $310 off the table but hope is not a valid investing strategy - so no doubling down.  
    • CHL – Good for a new entry.
    • IMAX – Good for a new entry (silly sell-off).  
    • NLY – On track
    • SONC – Will expire worthless (100% profit) on Friday.
    • WTW – Way better than on track and I can't believe you can still sell those for $1.45.  No reason to take it off the table as we're not at all worried about a 50% pullback.
    • FXP – Some progress but no meltdown in China yet.  
    • SQQQ – One of our hedges.  We doubled down on 6/1 so now it pays $75,000 at $45 but that's 15% down in the Nasdaq from here, so a pretty major correction.  Still, that makes it great protection between now and January, especially as the net cost was just $15,000ish.  

    The purpose of our hedges is to lock in our gains, not to "win".  As a rule of thumb, we put about 1/3 of our unrealized long gains into our insurance plays (FXP, SQQQ, TZA) and we HOPE we lose it all, because that means our long plays are doing well.  A key component of this strategy, however, is learning how use our "Be The House - NOT the Gambler" strategy, so you can make money in flat or slightly down markets as well.  

    • TZA – We moved this to a less-aggressive spread than we had but still good for $120,000 if it triggers at $30, though that would be a 33% drop in the Russell so, realistically, it's $60,000 worth of protection we paid $26,000 for (due to losses already incurred).  The current net is only $18,400 so the upside potential at $45 is $41,600 – very reasonable when added to the SQQQ.  
    • AAPL – Big adjustment made on 6/1 and who knew it would pay off so fast.  Even as I'm writing this the Sept $140 calls are back to $9.50 so there goes $4,500 of our gains – expect big volatility from this position!  As our long position is a spread and doesn't need that much protect, if we do get another chance to buy back 20 of the Sept $140 calls for $8 or less – let's do that!  Remember, we only have 60 short calls because we were burned by the first 30 we sold…
    • AAXN (TASR) – Good for a new position.  I like this because it's independent of the market overall as the long-term story is the adoption of cameras by the police.  
    • ABX – We got a great entry in November but they are still stupidly cheap at $16.27 and this is a $14,000 spread that's currently net $4,195 so $9,805 (233%) upside is still pretty darned good as a new trade.  

    • ATI – On track.
    • CDE – On track.
    • CHK – Good for a new trade.  We're counting on hurricane season to shut some production in the gulf and give land-based CHK a nice leg up. 
    • CLF – On track.

    • CSIQ – On track
    • DBA – A bit slow-moving but we still have faith. 
    • DIS – In the money already.  
    • FTR – If FTR were not planning a reverse-split, I would have doubled down at $1.20 but I don't want it to be messy so we're waiting.  I LOVE this stock – it's one of my favorite undervalued, underappreciated companies AND you get a 15% dividend while you wait (10% for us because we came in earlier).  

    • GM – Good for a new trade. 
    • JO – We're not happy with this one but also don't want to throw good money after bad if Coffee doesn't pick up by summer.  
    • M – Another undervalued stock I still like.  Good for a new trade.
    • SGYP – Their main drug, Trulance, is going through all the regulatory hoops and, hopefully, soon comes the part where they start making money.  We bought back the short calls so now we're aggressively long, hoping they justify those original $7 expectations.  

    • SPWR – On track.
    • SVU – On track.  Well, 100% in the money with a long time to go but it's a $7,500 spread and only net $3,125 at the moment and we're not worried about the target so may as well wait and collect another $4,375 (140%) – even though it seems dull.
    • SVXY – We got a nice pop in volatility that turned this one around for us and I still have faith in the trade.
    • TWTR – On track (and what a wild ride to get here).  
    • UNG – That's two natural gas trades (CHK) with the same premise.  UNG is on track.
    • WPM – We already cashed out one, this is what's left and on track.  
    • XOM – Finally took off for us and, fortunately, we were so conservative that we're already 100% in the money and FANTASTIC for a new trade as it pays $5,000 over $80 and the current net is just $2,355 so 100% upside if XOM simply stays over $80.  THAT is what I mean by setting up your trades so you make good money in a flat market (and our break-even is below $75).  

    Notice the theme of these trades – they are OPPORTUNITIES we take advantage of when stocks are too high or, more often, too low and we especially take advantage of extended options premiums and sell them to the kind of suckers who thing things always go up or always go down.  We are simply applying value investing techniques against an inefficient pricing system and, as evidenced in our first two years – that's a pretty good way to play the market!  


  30. Phil/OOP – I think you meant to say buyback 20 140 Sep Calls or did I get that wrong?


  31. CMCT  Thinly traded so only for those who want <1000 shares but it just declared a nice speical divvie of $1.98.  Even with the move up today that leaves plenty on the table.


  32. Can't believe how much Ethereum has gone up.  I have not bought or shorted any of the made up currencies and I have no idea how high they will go but the concept still sounds so crazy to me.  The fact that you can just make up a currency and have it trade like a precious metal (actually 1000x better) is insane.  This has to be a bubble that will pop at one point.  Is there really a huge difference between collection these coins and trading beanie babies at their height?  Seems more like a collectible fad to me still.


  33. OMER nice move so far today


  34. what a tease…ftr, m. tsla, amzn…dangit!!!!!


  35. scottmi/OMER  Yes, I bought enough to have 5% of it vs total portfolio.  2nd largest position


  36. 5% Rule/Jeff, Latch – What's key is to look at the 5,000 line and the 6,000 line and, if we're bullish, then retraces from the 6,000 line should hold and 10% down is, of course, 5,700 and then you can do the math between 5,700 and 6,000 (or the so far high of 5,900) to figure out lines.  If those aren't working, you have to consider the 15% line from 5,000 (5,750) and work in 1.25% (72 but call it 75) moves from there so 5,825 and 5,675 would be the lines to watch.  Since those don't seem to be working and 5,700 does seem to be holding up, it's more likely this is bullish consolidation on the way to 6,000 than a bear move.  

    So the big move from 5,000 to 6,000 expects a weak (20%) retrace to 5,800 and a strong (40%) retrace to 5,600.  We had some consolidation at 5,600 on the way up and it held on the first test so, if it holds again – chances are we make a break to 6,000.  As noted, we're looking for 5,740 on the short-term bounce and 5,750 is the 15% line off 5,000 so that area is going to be hyper-critical and, if we blast through it – that's very bullish.

    Back in /RB long at $1.495 – just one to start. 

    Volume/Learner – Well strong volume makes it more meaningful but you could say there's a buyer for every panicking seller, which is not a sign of weakness.  Certainly we won't know until we get into tomorrow and see which side of 5,750 we're on.  

    MSFT/Tangled – Sept $67.50s filled at $6 on 6/6.  Was still that price on the 7th in the morning and $5.75 on the 8th so can't see how you missed it.  

    Same on the $55 puts – easy fill at the time, though more now as CTSH dropped off since the 6th:

    Calls/Ravi – Yes, thanks very much for catching that!  

    Coins/Rustle – Well all currency is made up and the only real thing the State has to offer (if they are not backing it in gold) is uniqueness (hard to counterfeit, serial numbers) and crypto-currencies actually do a better job than that because they also have a hard limit as to the total that will ever be created and there is a fair and verifiable cost for each new "coin" that is created through mining.  


  37. OMER/Hanj – what kind of move are you looking for with them?


  38. coins/Phil

    Sticking with the don't invest in what you don't understand rule in that one.  I'll never be hurt that way.


  39. Phil

    Do you see any trade in the Privatization of Air Traffic Control ?

    Thanks


  40. Scottmi/OMER  A double in 1-2 years


  41. Phil, 

    What about the 5/19 EWZ and 5/24 IMAX for the OOP?

    Listed Below: 

      Sell 5 EWZ 2019 $25 puts for $2 ($1,000) 

      Buy 10 EWZ 2019 $25 calls for $11.50 ($11,500) 

     Sell 10 EWZ 2019 $35 calls for $5.50 ($5,500) 

    AND

    Sell 5 (more) IMAX Dec $29 puts for $4.30 ($2,150)

    Buy 10 IMAX Dec $23 calls for $4 ($4,000) 

    Sell 10 IMAX Dec $28 calls for $1.40 ($1,400)

    Thank you!!


  42. thanks Phil/Jeff.


  43. RB – whats going on? It has been diving all morning.


  44. OMER/Hanj – you see that happening via growth, or buyout?


  45. And the sell-off continues. 

    Bounce failed at 5,725 – not good.  

    Air Traffic/QC – Sure, someone will win big but hard to pick winners.  IRDM owns Aireon and they are the leading supplier to the Government (25% of their total business) and should do well with private contractors but the whole thing is so insane I can't imagine it will pass.  

    They are already in the middle of rolling out next-gen satellites (called NEXT) and it would take years for anyone else to catch up to them.  As it is they are undervalued, with a p/e of 11 though stuck in the mud as far as growth goes.  Options only go out to Jan but you can sell the $10 puts for 0.90 and that's an easy entry at $9.10 for a 15% discount and, if you want to get more aggressive, the Jan $10 ($1.70)/$12 (0.80) bull call spread is the same 0.90 so a free look at a $2 spread and worst case is owning them for $10.

    What about/OOP, Wing – Wow, sorry, I seem to have not updated the new positions.  I will have to add them in next time.  Thanks.

    /RB/Bulls – I don't know but I have 4 long at $1.4925 now.  

    • Piper Jaffray reiterates the Overweight rating on Amazon (NASDAQ:AMZN) but pushes price target up $150 to $1,200.
    • Analyst Michael Olson writes that the firm’s proprietary Google search trend analysis indicates Amazon’s retail growth is unlikely to decelerate in Q2. 
    • Olson noted that the search analysis showed that Amazon-related words had a 23% year-over-year growth in June, which matched the growth amount in March. 
    • Amazon shares are down 2.38%.   

  46. Question for everyone. I struggle following the chat while I am at work. Are you aware of a mobile tool (iphone). where it will send a notification everytime there is a new post with the content of the post. Thanks


  47. Rustle, humans make up a trade medium so they don't have to trade pigs for lumber. You need a system of trust though, so:

    1) 5000 years ago – Gold – God's currency. You can't counterfeit it. But it's still exactly a currency – you can't eat gold, it's doesn't contain 120,00 calories per ounce.

    2) 500 to 40 years ago (depending on who you ask) – fiat currency rises. A ledger system based on paper laws and stability of the issuing authority (usually, national gov'ts (USD, JPY), or association of national gov't (Euro)). Obviously this is a system you understand.

    3) 7 years ago – a computer-based, algorithmically derived and secured digital currency.

    It satisfies the three things you need in a currency:

    1) Trust – you have to be able trust it'll be around to trade it tomorrow

    2) Scarcity – their limited in some way

    3) transferability – someone else will accept it at the exact same price you value it at

    So let's look at gold/silver. The trust in the nucleus of the atom, the scarcity is the relative ease of mining the commodity, and transferability is hand-to-hand combat, so to speak. Fiat comes along, first anchored by gold and then "poof," that's a unneeded legacy. Fiat is a essentially an accounting ledger of services/products provided in exchange for the fiat. First it was paper money and coins, which had to be traded like gold (hand to hand) and then also a very good system for paper and pencil accounting (ledgers). These need to be validated by a third party for transfers (banks). This system was well served by digitalization over the past 50 years of computerization…. so what was still missing to make digitalization a currency on its own trust. This is what bitcoin/blockchain solved for. What comes next is inevitable.

    As to the price, well, that's a matter of explosive adoption; the supply/demand of scarcity meeting 7.5B people in the world that have never heard of something. So the prices will be erratic and currencies will come and go as this new wild west shakes out.

    The price is high now. Buyers remorse is never a reason to buy anything. Buying a crypto is always a gamble – even when I paid $0.30 for a handful of ethereum, I figured it was a 100% loss with a probability of 90%.


  48. crypto meltdown in progress

    hold on to your bladders!


  49. Scottmi/OMER  One of my trader buddies reminded me that we had ETF rebalancing last Friday (first reset day) and this is most likely contributing to OMER bump today.  Could last all week as this friday is the second reset day for etfs.



  50. bdc-- coinbase has higher prices?

    which one is right?


  51. EWZ/Wing – It seems we never officially added it to the OOP over at SA so I won't be adding that one officially.  If you are in it and have any questions, always feel free to ask.  As it stands, the 2019 $25 puts are now $3.80 but EWZ is at $33.50 so nothing to worry about and the $25/35 spread is $5.75 so those are about the same.  

    Chat/Bulls – At the bottom of the post, above the comments, is the RSS link for the day.  You just need to get an RSS reader that alerts you when new items are posted.  You can probably filter by asking for only alerts on certain commenters – I don't know exactly as I don't use them.


  52. Brian Rogers of T. Rowe Price in Barrons on BBBY :

    ~~"Bed Bath earned $4.58 a share in the fiscal year ended in February. Our estimate for fiscal 2018 is $4.30 a share. On a $35 stock, that’s an 8.2 price/earnings multiple. The company just increased its dividend by 20%, a good signal. They are excellent merchants, and are doing a great job of capital allocation. Bed Bath had 245 million shares five years ago, and now has 145 million. The company is a better-than-average retailer. It is a good house in a bad neighborhood. Even if it has big challenges in the next five years, there is probably a good way to make money as an investor. The stock has been left behind by the market."

    Phil – What are your current thoughts on BBBY ?   Thanks.


  53. Phil   SDS  Have an old June 17 12/16 bcs,rolling 12call to Sept 12c for 20cents.What do you think?  Or should just take loss? Is SDS agood hedge?


  54. why isn't tsla down with the others today? 


  55. @BDC

    Difference with gold is that it is actually used.  It's not just a currency, it's demand is for decor, jewelry and in microchips and circuit boards, among other things.  A currency is supposed to represent the country's good faith behind it.  These are just artificial creations.  I can basically form my own currency and we can just decide on a worth.  I still believe the that these digital currencies are nothing more than a hot collectible item right now and can just as easily go away if people decide not to use them.  You can't just back away from a country's currency and say, let's not use the yen anymore, too diluted.  Again, I don't trade it either way but that's the reason why.  There is no rhyme or reason for its movements.  It can go to 0 as easily as it can go to 10000


  56. Thanks Phil – Does anyone have experience with using the RSS link on the post?


  57. how is fiat money (or gold, when it;s not being used in jewelry) not an artificial creation? So is Shakespeare's King Lear – humans are artificially creative beings. "There's no rhyme or reason for it's price movements" is an opinion stated as a fact. There are indeed rhymes and reasons, an enigmatic greymatter area that you make artificially black and white in order to help it make sense to you. I don;t know. We've talked about this for eons now in here and it always surprises me to hear this type of pushback. Sure the price can go to zero – something I've always stipulated, and it could go to 10,000, the latter has been much more right over the past 6-7 years. In a forum where we spend countless hours prognosticating on what the future might look like if certain things happen (stock prices) this feels suprisingly short sighted to me.

    Sure you can create you're own currency and have the world "value it." Exactly the point!! And what if that value is zero? Now you understand crypto. Congratulations.


  58. bulls4444444444  To use the RSS, download and use RSSAtom program.  Then put the link to the main post with the following appended "/feed/atom"

    For example:

    http://www.philstockworld.com/2016/12/22/3300-thursday-our-futures-trades-pay-for-christmas/feed/atom

     

    I'm helping since Kwan helped me out in the past. No one else knew anything about it.


  59. Thank you Burr!
    I will try it tonight an see if I can get going.


  60. bulls/RSS  If you need any help with adult feeds, i am your man.


  61. Did you ever notice how every GE CEO is supposed to be "the greatest" yet every time one of them leaves the stock goes up?

    BBBY/Albo – We sold short $40 puts on them for $4.50 so this is right about our target price.  I certainly agree and love them down here.  

    As a fresh trade on BBBY, I'd sell the 2019 $35 puts for $4.50 and buy the $35 ($6.10)/$42.50 ($3.10) bull call spread at $3 so you have a net $1.50 credit on the $7.50 spread and make $9 (600%) at $42.50 and worst case is owning them at net $33.50.

    SDS/490 – SDS still a good hedge but you want to roll your long calls before they drop below the net cost ofg the spread.  It's a bit late on the June $12s (now 0.65) but still, same concept and the Sept $12s are 0.90 and the Jan $12s are $1.30 so either of those but I'd go Jan and, when the June $16s expire (or now if you don't mind the margin), I'd sell the Sept $16 calls for .20 as you can either roll them wider or sell Jans for another 0.20+ in Sept.  That gives you 6 more months of insurance for net 0.25ish.

    TSLA/Jabob – It does it's own thing, have to have patience.  

    Looks overall like we might just be drifting into the Fed on Weds.  

    Ivanka Trump insisted that her father came away from James Comey’s testimony “incredibly optimistic”

    So, if he came away from the testimony "optimistic" – doesn't that mean there was something that could damage him?  If you have nothing to worry about, your mood doesn't drastically change just because it turns out you didn't get caught…


  62. Phil, what do you think of VALE resorts stock?  I heard a guy talking about it on the radio.  You get a div, they are making purchases and have monitized the summer.  This isn't the bio-tech vale, the resort company.


  63. OMER/Hanj – thanks, will check the Cowen bit out.


  64. U.S. Bears Return to China With Shorts Circling $6 Billion ETFs https://www.bloomberg.com/news/articles/

    Delta and BAC defund Shakespeare because the Bard was anti-Trump.  

    How Trump digs a deeper legal hole when he tweets

    Great video on this link of Shumer mocking Trump and staff:  Trump said that few presidents have passed more legislation than he has, though Congress has passed no major legislation since he has been president.

    'How to Heat Your Cannabis Grow Room by Mining Cryptocurrencies' – Who says America can't innovate anymore?

    Michel Temer, Brazil's president, lives to fight another day

    You can tell things aren't going well for Team Trump:

    This is what Jackie told me she noticed is happening: Is Apple Hobbling Older iPhones To Spur Upgrades?

    Trump’s travel ban blocked by another court

    Photo published for RBC Is "Astounded" By The Magnitude Of This Rotation

    Iowa asks the Trump administration for Obamacare help as it faces a ‘collapse’ of its market

    . finds 48 firms where at least 30 percent of brokers have had misconduct allegations or regulatory run-ins:


  65. Phil,

    what would be the best method to short bitcoin ? happy to risk some money in order to take advantage of the big rise. 

    Thanks 

    Pat


  66. iPhones / Phil – If that's true, that would be quite shocking! Not that it would stop people from buying the phones but that might erode the trust of some users. Of course, it's not unusual for new O/S to be more demanding of the hardware, but they are generally not designed for that purpose.


  67. MTN/Burr – I love them, always have.  It's just been a long time since they were on sale.  They are a 10-bagger since we liked them at $20 in 2009 and I think this is way higher than they deserve but I'd love them at $100.

    They only make $150M on $1.6Bn in sales yet, at $200, their market cap is $8Bn.  They borrow money to pay those dividends so you have to be careful.  

    Bitcoin/Pat – I don't know if you can short on those exchanges and there's no proper ETF but GBTC is very tied to Bitcoin and seem silly to me – maybe you could use them but it's a very scary, dangerous trade either way.

    IPhones/StJ – Jackie said that to me a month ago and, since then, she's been verifying her theory with her large sample of high-school students and she's positive AAPL purposely slows down the phones or causes them to have issues (small glitches that weren't there before) as they get towards a year.   It's hard to say how they do it but they are constantly updating the OS and, since they control every aspect – it's easy to make changes that are too taxing for older phones.  Of course, a lot of the kids consider this a "feature" as they have an excuse to go to their parents and demand an updated phone.  

    I think AAPL does it to prevent the hand-me-down system, which has failed in my house as I used to get the new phone and Tina would have my old phone and then Maddie and then Jackie but, even if we get a new phone every 6 months – 2-year old phones are practically useless.  


  68. Trump / Phil – I just don't understand how smart people would not see this strange cabinet meeting today as the work of a deeply insecure person. Does he really need to have a roundtable where everybody takes turn praising him? And worse, these people go along with it. Really, really disturbing that these guys are in charge of our country.


  69. iPhones/Phil – I've noticed that with my own iPhone 5.  I am suspicious of every OS upgrade. Definitely been messing it up with more OS glitches that were never present before.


  70. iPhones / Phil – Sure, a great way to get people to get new phones each year. But as iPhone prices climb over $1000, more people might start to notice. Not every family can afford to spend that kind of money each year on multiple phones!


  71. stj – even if one can 'afford' it, who the hell -wants- to spend $1000 on a pocket-sized multipurpose supercomputer?


  72. Phil just so I'm clear, you said earlier that you think we are setting up for another advance, particularly in the Nasdaq? Is that correct? So used to hearing you shorting that I need to double check.


  73. Lol Phil,  As a fellow parent, I have seen this being used on me before …Of course, a lot of the kids consider this a "feature" as they have an excuse to go to their parents and demand an updated phone.  


  74. Phil I was also curious if you are back in CL with it back at 46 since you took a poke at RB or are you taking a wait and see on oil? 


  75. Scott – I sure don't but then again, I am an Android person and you can find very good ones for about $400 if you stay away from the luxury brands! Good enough for me… I can buy 2.5 phones for the prices of one iPhone.


  76. StJ it is deeply disturbing and what I can't understand is how so many seemingly intelligent people are supporting this madman! The guy is a symbol of all that is wrong with our country and our fixation with celebrity and status. I don't believe in religion but find myself praying that we somehow wake up and correct this before so much damage is done that people are dying all around us. Between his budget priorities and lack of direction on subjects like healthcare, it won't be long before we start seeing that.


  77. BDC / CC´s

    Today I spent my afternoon (spain) talking with a friend who is miner in one of the 74 nodes in the world, these guy used his savings 3 years ago (60,000 €) in buying  a portion in all the coins available at  the moment, today he is a bit over 1 million € in coins.

    The meltdown (or increase) of most of the CC´s is because they have "convertibility"  by bitcoin which is the "official" exchange , if you have Zcash for example you need to convert it into bitcoins before converting it in € or $, so if Zcash increase 100% and bitcoin increase 20 % you have  an extra  if as per today bitcoin is decreasing 20% all the coins decrease as well, that´s why in my opinion it looks like a meltdown….but is not


  78. Fiat currency – one of the best explanations I've ever seen is in a Jack Reacher novel – "A Wanted Man", Lee Childs


  79. craigs620 / dark times -

    You said it! I'm in the same place. When the agnostic in me begins reaching out to the unknowable for providence and deliverance from a secular, everyday force that looks to be capable of (if not poised for) destruction and chaos on an almost-biblical scale, I'm pretty sure that we're in the throws and woes that come along with circling the drain.

    Such is the political reality of late-stage capitalism 


  80. Phil / Trump's "Optimism" - 

    "So, if he came away from the testimony "optimistic" – doesn't that mean there was something that could damage him?  If you have nothing to worry about, your mood doesn't drastically change just because it turns out you didn't get caught…"

    I think you may be onto something there: 
    https://www.youtube.com/watch?v=3ATnIls5HSM&feature=push-u&attr_tag=b9cveniyxIu8r9Sx-6
     


  81. ..Trump…..you guys should get 2nd careers as corporate psychologists.


  82. Latch – Some real psychiatrists actually share our concerns! Maybe the patient is really easy to diagnose if us layman can reach the same conclusion. But no worries, it's not like Trump can do a lot of damage, right?


  83. Circling the drain? Yes we are, along with the rest of the developed world. Without defending him, that wasn't Trump's doing though he won't help matters at all. The collapse won't start here, it's close but I believe Japan will beat Europe for that distinction. We will however be the biggest. Unsustainable debt everywhere. If you want to blame a single person, by all means choose the leader in each failed state, but remember it is the elite in charge of the central banks that have brought us down this path and who will buy up the assets at bankruptcy prices when it all falls down. Put the blame where it is due and if you want to stick with politicians, the fact is the R's and D's have colluded to place us in the hole we are in. Pick sides, like the NFL the owners will be laughing all the way to the bank, win or loose. "It's a big club, and you ain't in it."  George Carlin


  84. here here muck!   Anyone watching House of Cards?  Carlin's quote above is paraphrased by Francis last line in S5 E12


  85. He was the Mark Twain of our time, surprised he was allowed to live so long.


  86. advill – interesting comments, thanks

    Snow – can you paraphrase some of the Jack Reacher definition of money?


  87. Sorry, BDC – it's a revelation at the end of the novel, and fairly complex. Don't want to put any spoilers out there, so I recommend reading it. Really a fascinating idea for a fiat currency. I guess Reacher/Child's definition boiled down a lot is "trust", or maybe "faith".



  88. Why Ethereum is outpacing Bitcoin



  89. California goes without Washington


  90. The Average Mid-Forties Male College Graduate Earns 55% More Than His Female Counterparts


  91. Defense chief Mattis urges Congress to allow base closings


  92. Phil/AAPL-wonder if the floor here is not too much further down given the large short interest.  Also wonder how much of the negative press is driven by those shorts.  


  93. Good morning!

    Cabinet/StJ – Ironically, Trump is praised like Caesar, the play that displeased him this weekend.  Sadly, also like Caesar, the evil that men do lives after them.  America will take a long time to recover from the damage Trump is doing.  Rome never did.  

    Phones/StJ – But it goes hand in hand with AAPL pushing the annual or semi-annual replacement programs that are built into phone contracts these days.  

    Who wants to spend/Scott – I do, I do!  Come on, I'm old enough to remember when I would have happily spent $10,000 on a pocket-sized super-computer.  It's also a phone, you say?  And a GDP navigator?  It also connects me to unlimited music and videos and all the World's collected knowledge?  $1,000 you say?  Ha!  I shall rule the World with such a device…

    I remember paying $300 for a Razr about 25 years ago – it just made phone calls.

    Also, keep in mind AAPL isn't selling a phone to "every family" – just the top 200M (10%).

    Advance/Craigs – Well, we didn't get weaker and /NQ still needs to check 5,740 (though failing so far) and then we'll see.  What I was saying earlier was that IF those lines work, THEN we are probably still in a bullish market.  There's no way we'll know until after the Fed.  

    Funny how that's exactly what the 5% Rule predicted would happen yesterday morning.

    Kids/Learner – They say it costs $1M to raise them – I must have missed the sale!  cheeky

    /CL/Craigs – I have 2 /CL now at $46.25 and 4 /RB at $1.4925 and I didn't like this morning's weakness so I didn't add and probably won't until after the API (if at all).

    Good point on conversions Advill. 

    Olberman/Yo – He's right and I love that his show is "The Resistance".  It's amazing that we now live in this alternate reality version of America where we need to have a resistance.  And now this:

    I love that show!  

    Psychologists/Latch – You don't need to have a degree to recognize a narcissistic, pathological liar:

    All to blame/Mkucs – Yes, it's everyone, but 90% Republicans:

    Image result for republican debt by president

    And, of course, it's fun to pretend Obama's debt was somehow his fault (or Clinton's, for that matter) but both of those Presidents DECREASED the debt every single year of their terms while the 3 (4 now) recent Republican Presidents have INCREASED it.  These are very simple facts but please, feel free to generalize and act like they are all the same if it helps you believe Republicans aren't so terrible.  

    AAPL/Seer – Well I think they are good for $180 by the end of next year so it's just a matter of finding a good buy point.  I did call a bottom at $140, essentially, with our call to buy back some of our short Sept $140 calls at $8, that's a line I think will hold unless the Nas really tanks.  AAPL is often attacked ahead of earnings to drive prices down – this phone speed issue seems like one of those made-up crises engineered by the shorts.  


  94. CL- Phil we didn't get any help from the news about OPEC output increasing by 336,000 barrels/day in May although it was from producers that were mostly not part of the output agreement, so it really should not be a surprise that Nigeria and Libya increased. Hopefully this is a quick move down that will be rectified by a "surprise" draw in inventories. 


  95. Debt – Isn’t the lower house of Congress responsible for the debt, not the president? Otherwise there would be gold toilets in the White House right
    now, no? (Maybe there are, how would I know.)


  96. dsheara – That's right and what's interesting is to look at when the sitting President also has his team in the majority in Congress. Bush 2 did for 6 years and the truth to spending is it makes you look good to your base now (they get free stuff) that you will need to pay off later. Both sides increase spending when their team is in congress and when the other team is usually that's when there's no spending passed.

    Trump has his team but his presidency is really different because he's so esoteric. It'll all be over after the 2018 election though.