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Trendless Tuesday – Stuck at the Market Top

2,480! 

That was our shorting line last Tuesday and here we are (still) again on the S&P and waiting for SOMETHING to happen.  Volume on the S&P ETF (SPY) was only 26.8M, the lowest Monday reading of the year and less than 1/2 of Friday's volume.  Where have all the traders gone?  

How are we going to punch up through 2,500 if we can't even hold 2,480?  The Dow is a joke of an index (22,050 on /YM), so we don't count that and the Nasdaq (/NQ) is having trouble at 5,950 in the Futures while the Russell (/TF) was also a short at 1,430 last week and today they are struggling to hold 1,411 – another bad sign.  On the SPY ETF, you can see the volume melting away as we struggle along the $248 line.

 We've been talking about hedges and a good way to hedge the S&P, other than simply shorting /ES Futures with tight stops above, is a bear put spread on SPY options, which we can accomplish with the following:

  • Buy 20 SPY Sept $247 puts for $2.50 ($5,000) 
  • Sell 20 SPY Sept $242 puts for $1.35 ($2,700) 
  • Sell 5 TEVA 2019 $20 puts for $4.40 ($2,200) 

That spread is net $100 and pays $5,000 (up 4,900%) if the S&P drops below 2,420 (2.5%) into Sept expirations.  You have an obligation to buy 500 shares of TEVA for $20 ($10,000), but that's a stock we really love at this price so, essentially, free money for promising to buy it.  Ordinary margin on the short puts is just $900, so it's a very margin-efficient way to raise cash but you can use any stock you REALLY want to own as an offset.  

That covers us through some August uncertainty without risking very much (other than owning TEVA) and it's one of the main ways we like to hedge for the short-term.  It's much less aggressive than our longer-term ultra-short ETF long spreads, those provide the bulwark of the protections for our long-term positions.

For those comfortable playing the futures, however, nothing beats a straight-up bet on the indexes as long as they are below the above levels as we can get out of them quickly with fast profits on the occasional dips our indexes are prone to take, but don't seem to last very long. 

Notice we only hit 2,480 the one time on the 27th and quickly dropped back to 2,460 (a $1,000 gain on the drop) but, since then, we've generally ranged from 2,475 to 2,465 ($500) with more frequent moves from 2,475 to 2,470 ($250).  With Futures trading, it's better to get in and out with a quick profit several times than wait for one big move.  Once we see a top established, we can play it over and over again – until it breaks – then we need the good sense to get out.

I'm getting out today – I'll be taking the morning off and back in the afternoon.

No webinar this week as I'm on a cruise, but I don't think I'll miss much – other than a bit of a pullback we're well-prepared for.

Later, 

- Phil

 


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  1. DJ Tesla Raised to Buy From Hold by Argus 

    Aug 08, 2017 07:41:00 (ET)
     

     

    Ratings actions from Benzinga: http://www.benzinga.com/stock/TSLA/ratings


  2. ~~ VRX – Valeant Pharma beats by $0.76, reports revs in-line; updates FY17 revs guidance, reaffirms Adj-EBITDA outlook.

    Stock opens strong.  


  3. albo, VRX – the other good thing is aggressive debt reduction by management.  They will divest non-performing assets use the proceeds to lower debt and improve earnings per share.. this is a good 2 year turnaround story.   Next time there is a market correction and the stock falls below $15, I intend to DD.  I thought I will get my opportunity at this earnings, but management delivered.  


  4. Learner – And they have no debt maturing until 2020. 

    Bausch and Lomb, their most valuable asset, accounted for 56% of their revenues, and is growing.

    Management expects to reduce debt by more than 5 billion by February.


  5. PSW/IMAX

    What is the latest setup that we have for IMAX in OOP. is it the Dec 23/28 BCS?

    thanks



  6. pat

    I only see $29 Dec puts sold for $2.00.

    phil 
    July 18th, 2017 at 12:42 pm | Permalink | Tweet thisIgnore this user

    Options Opportunity Portfolio Review (OOP):  Our last review was actually June 12th,

     


  7. TSLA's coupon slightly better rate than expected.  4.875 with a B- rating


  8. that is a lot better than 5.5% 

    B- ?? should be a BS rating imo


  9. I wouldn't be taking that chance to get less than 5% on a company who could be out of business in 2025.


  10. rustle--me neither.

    but most seem to believe they are $$ good.

    And their other bonds trade at a hefty premium, i believe.

    UNREAL!


  11. TEVA/Phil-looks like a weak bounce here, but the day's not over yet. 


  12. I trade with OptionsHouse and they were taken over by E-TRADE. The cutover has been a nightmare and I am looking for another platform. Any suggestions? Stocks, options and futures. I have a Schwab account but that is not a great trading system. Appreciate the advice


  13. Kapella / OPH – Im at OPH/Etrade too but havnt seen issues (other than losing my ICE futures access initially).  What issues are you seeing?  Thanks!

    Btw, most people on this site recommend Think or Swim (TD Ameritrade)


  14. Have lost all my watchlists and charts on the futures side…


  15. dclark41/IMAX

    thank you!!


  16. Up up and away!


  17. This had me laugh, what's it been about 7bn raised since this was said?  This is from 2011.

    http://www.greencarreports.com/news/1073019_tesla-motors-wont-need-more-money-says-ceo-musk#image=100365767


  18. to the moon? We're gonna cut taxes! See how good we did with cutting obamacare? This will be just like that! The apprentice president is large and in charge, what could go wrong? Pay no attention to the man behind the curtain… So let it hit 2500, pull out the noisemakers, pop the champagne, but better buy some protection… bubbliciuus!


  19. Pharm or Phil

    ENDP   I have some old Ps that I'm behind on and would like your opinion as to the LT outlook. Should I roll out or just take the loss in January?   Thanks.   


  20. Kapella – Gotcha.  Agreed, the futures transfer was total mess. 



  21. Over an 81 RSI on DIA now and still won't short yet.  If DIS has good earnings, we are in for an up day tomorrow.


  22. ENDP….I would hold and roll them out as time permits.  Not sure what the strikes are, but they should be good to go this fall IMHO.


  23. Rumour de jour that UTHX is on the selling block.  NVS, GILD and others are looking at them.  BMRN is also there….VTRX as well.  Biotech/Pharma is gonna go crazy this fall on consolidation.


  24. /NG-Latch, Been trading NG/QG for a month, I go long when it dips below $3 and sell directly afterwards, not huge profits, but been taking a lot of small wins during the past month. Last week was the first time it didn't pop above $3.00 in quite a while.  So, now I am loaded up with 2 NGZ7 @ 305.5 and 12 QGX7 $2.945.  Do you see a hurricane in Mexico driving up the NG price?  

    So far, no threat to the Gulf of Mexico, except some flooding.   


  25. Jobu (jabo)….TEVA is up!


  26. Pharm / SGYP – i was expecting a better summer from them – what do you think of them?


  27. Batman…need to see how sales go for a year or so.  Uptake is the key.


  28. Pharm / ESRX, is that in your wheelhouse?   If so, any word on the street about Humana buying them out?


  29. Joseph – other that forecasters predicting more potential storms this year, I have no idea. I have one at 3.55 and am tired of seeing it hit 3.1 and not selling.  I am holding but kinda like your idea on the small wins as opposed to the home run. Not familiar with QG — seems lightly traded.


  30. Good afternoon and WTF?

    It's not just that they announce tax cuts but they announce them just as the market is about to open – hard to fight when the administration is manipulating the market:

    Border Taxes also got the ax.  

    Now we'll see what sticks 

    • Copper prices have climbed 7% and iron ore has jumped more than 20% since the end of June, but July trade data suggests that China's demand for metals may be weaker than it has seemed, according to WSJ's Heard On The Street.
    • Y/Y growth in Chinese imports of copper concentrate slowed from June’s pace, while imports of iron ore and coal declined outright compared with both the previous month and a year ago; overall import and export growth also slowed, hinting that the lift to China from rebounding global trade may be near its peak.
    • China's investment growth has stalled in the electric power and information technology sectors, the most important infrastructure sectors for copper, and Chinese steel capacity cuts are unlikely to be enough to sustain a strong rally without help from solidly growing demand, WSJ's Nathaniel Taplin writes.

    • The price of aluminum surpasses $2K/metric ton for the first time in nearly three years as China continues to crack down on pollution and reform its bloated industrial base.
    • China’s Shandong province, a key production hub, says it ordered the closure of 3.2M metric tons of unlicensed smelting capacity; Wood Mackenzie says the figure represents ~9% of China’s total aluminum production for 2017 and could flip the market into a significant deficit with “obvious implications for prices."
    • Rising aluminum prices have lifted shares of Chinalco (ACH +8.6%) more than 50% over the past month; Alcoa (AA +3.4%), Century Aluminum (CENX +4.1%) and Kaiser Aluminum (KALU+1.6%) are all higher in today's trade.
    • ETFs: JJUFOIL
    • Strong earnings reports from Ralph Lauren (RL +9.2%) and Michael Kors (KORS +20.5%) are providing a lift to the apparel sector in general.
    • Also in the background is the reset on apparel sellers with the knowledge that that the adjusted border tax proposal has been scrapped by the GOP.
    • Sector watch: Vera Bradley (VRA +3.7%), Coach (COH +1.2%), Fossil (FOSL +12.1%), Movado (MOV +3.6%), Kohl's (KSS +2%), G-III Apparel (GIII +3.5%), Perry Ellis (PERY +4%), Gildan Activewear (GIL +1.9%), Delta Apparel (DLA +6.9%), Under Armour (UAA +2.6%), Canada Goose (GOOS +2.5%), Genesco (GCO +6.1%), New York Company (NWY +4.1%), Ascena Retail (ASNA +5.8%), DSW (DSW +4.6%) and Express (EXPR +4.1%) are all solidly higher.
    • Previously: More on Ralph Lauren's Q1 (Aug. 8)
    • Previously: Michael Kors soars after strong guidance (Aug. 8)
    • Time Inc. (NYSE:TIME) is 5.8% lower after its Q2 revenues dropped 10% with broad declines and missed analyst expectations.
    • Ad revenues fell 12% on a combined basis; while print was a heavy drag, digital ads declined as well. Meanwhile, circulation sales dropped by double digits.
    • Foreign exchange had a negative impact of about 2 percentage points; excluding dollar/sterling rates, revenues would have fallen 8%.
    • Net income fell to $13M from $22M.
    • Management pointed to a positive sign in OIBDA, flat at $88M, beating an expected $68.1M. It expects $500M-$600M of OIBDA within 3-4 years.
    • Revenue breakout: Print and other advertising, $249M (down 17%); Digital advertising, $25M (down 2%); Subscription revenues, $141M (down 8%); Newsstand sales, $58M (down 22%); other circulation, $8M (flat); other revenues, $113M (up 6%).
    • Cash from operations was $36M, vs. a year-ago $79M. Free cash flow was $16M against last year's $53M.
    • Press Release
    • Marriott International (NYSE:MARfalls off 3% despite topping estimates on both lines of its Q2 report and lifting guidance..
    • The hotel company expects full-year revenue of $3.25B to $3.31B vs. $3.23B to $3.30B prior forecast and EPS of $4.06 to $4.18 vs. $3.92 to $4.09 prior view.
    • Analysts says the outlook on Marriott's North American EBITDA came in slightly below expectations and note that shares have already run up 25% YTD on growth expectations.
    • Previously: Marriott beats by $0.11, beats on revenue (Aug. 7)
    • Oil extraction in Brazil's promising pre-salt offshore wells costs only ~$8/bbl, Petrobras (PBR-0.3%) CEO Pedro Parente says.
    • Brazil's pre-salt area has rapidly become the top priority for the company, and production last month from pre-salt wells surpassed the combined volumes from all other fields in the country for the first time.
    • Parente also says PBR's new fuel pricing policy will reduce the chance of prices reaching below international parity.
    • PBR has sharply reduced the price gap between the value of gasoline sold at its refineries and the spot price in the U.S. Gulf of Mexico since early July, when it announced changes to its pricing to adopt almost daily adjustments.
    • Cowen & Co. thinks that more than half of U.S. homes will have Amazon (NASDAQ:AMZN) Prime by the end of the year, per CNBC
    • The firm conducted a monthly survey of 2.5K homes and 49% had Prime. 
    • The recent Prime Day event reportedly drew in more new Prime members in a day than any other 24-hour period. 
    • Further membership boosts should come from the currently ongoing school shopping and from the upcoming holiday season. 
    • Amazon doesn’t disclose Prime membership numbers but Cowen predicts 45M as of last month, compared to 46M last year. 
    • Previously: Amazon Prime Day 2017 grew 60% on the year (July 12)
    • Norwegian Cruise Line Holdings (NCLH +5.8%) trades higher after posting solid numbers for Q2.
    • Revenue was up 13% off of strong ticket pricing and NCLH's net yield rose 8.1% Y/Y.
    • "Positive consumer sentiment in North American and key international markets has resulted in a robust booking environment that continues to be one of the strongest in recent history which, combined with our targeted strategic revenue initiatives drove second quarter revenue and yield growth well above expectations," says CEO Frank Del Rio.
    • The company now sees full-year EPS of $3.93 to $4.03 vs. $3.79 to $3.89 prior and $3.89 consensus.
    • Dean Foods (DF -20%) reports total volume slipped 2.7% Y/Y to 615M gallons in Q2.
    • The company's share of U.S. fluid milk volumes decreased 2.9% Y/Y.
    • Adjusted gross margin rate fell 260 bps to 23.9%.
    • Adjusted operating margin rate slipped 130 bps to 2.5%.
    • FY2017 Guidance: Adjusted EPS: $0.80 to $0.95; Free cash flow: $50M to $70M.
    • Chief Executive Officer Ralph Scozzafava said, "In the second quarter, we faced a challenging and rapidly evolving retail environment. We experienced volume pressure from both a macro and competitive perspective that impacted our total volume performance within the quarter, and we anticipate this will carry forward for the remainder of 2017. Our financial results came in well below our expectations. We are not satisfied with our performance and are determined to improve our execution. We are accelerating and expanding an aggressive set of commercial and cost productivity initiatives to address volume and mix. We expect these actions will better position our company for the future."
    • Shares of SeaWorld Entertainment (NYSE:SEAS) sink to their lowest level ever since the company's IPO in 2013..
    • The theme park operator reported a drop of 353K visitors during the first half of the year and saw a reduced amount of revenue per capita. SeaWorld's full-year EBITDA forecast also arrived far short of the consensus estimate ($280M-$310M vs. $343M expected).
    • Previously: SeaWorld Entertainment EPS of -$2.05 (Aug. 8)
    • Previously: Attendance pressure at SeaWorld Entertainment (Aug. 8)
    • SEAS -16.24% premarket to $11.40.
    • Sector watch: Keep an eye on Cedar Fair (NYSE:FUN) and Six Flags Entertainment (NYSE:SIX) even though most analysts consider SeaWorld's issues largely tied to public relations. Also, Disney reports earnings after the bell today.
    • Redbook Chain Store Sales+2.7% Y/Y vs. +2.8% last week.
    • Month-to-date sales up 2.7% through August 5.
    • August sales are expected to increase 3.1% as back-to-school tax holidays continue to drive summer traffic.
    • Lockheed Martin (NYSE:LMT): Initiated at Overweight, with a $342 PT, saying it has the right balance of segment margin growth, revenue visibility, leading 5-year CAGR and F-35 ramp up over the coming years.
    • Raytheon (NYSE:RTN): Started at Overweight, with a $188 PT, stating the company has leading positions in high demand areas of missile defense and optionality around an A-rated balance sheet.
    • General Dynamics (NYSE:GD): Initiated at Overweight, with a $185 PT, expecting Gulfstream may have difficulty sustaining margins given competitive threats.
    • Northrop Grumman (NYSE:NOC): Started at Equal Weight, with a $279 PT, saying its leading revenue profile is offset by light free cash flow yields and margin growth.
    • Argus lifts Tesla (NASDAQ:TSLA) to a Buy rating and raises its price target to $444 to rep 25% upside potential on the EV automaker.
    • The firm underpins its upgrade on the strong level of Model 3 orders and now expects Tesla to break even in FY18 before reaching profitability in FY19.
    • Argus note: "Although the ramp-up of the Model 3 will boost labor and overhead costs in the near term, we expect these additional costs to diminish over the course of 2018. As such, we believe that Tesla will be able to reach its target of a 25% gross margin on the Model 3 late next year, in line with the margins already achieved on the Model S and Model X."
    • Shares of Tesla are up 0.94% premarket to $358.50.
    • Like Howard Marks last month, Jeff Gundlach is seeing too much exuberance in the markets, but timing on a comeuppance is still to be decided.
    • "If you’re waiting for the catalyst to show itself, you’re going to be selling at a lower price," says Gundlach. “This is not the time period where you say, ‘I can buy anything and not worry about the risk of it.’ The time to do that was 18 months ago.”
    • Gundlach is cutting back on holdings of junk bonds and emerging-market debt, and putting the money into higher-rated paper with less interest-rate sensitivity.
    • Also of interest to DoubleLine fans – Gundlach is turning away money. His firm, he says, might stop marketing altogether once it hits $150B in assets (from around $110B now).
    • As for his DoubleLine Total Return Bond Fund (currently $54B in AUM), Gundlach says he's thought about closing it to new money. "We can’t do $100B  in the Total Return Bond Fund (DBLTXDLTNX) … The market isn’t big enough for our style, the things we invest in.”
    • ETF of interest: TOTL
    • Valeant Pharmaceuticals (NYSE:VRXQ2 results ($M): Total Revenues: 2,233 (-7.7%); Bausch + Lomb: 1,241 (-2.8%); Branded Rx: 636 (-2.6%); U.S. Diversified Products: 356 (-27.3%).
    • Net Loss: (38) (+87.4%); Non-GAAP Net Income: 362 (-21.3%); EBITDA: 879 (+7.9%); Non-GAAP EBITDA: 951 (-13.5%); Loss/Share: (0.11) (+87.5%); CF Ops: 268 (-40.2%).
    • Expects to exceed its $5B debt reduction goal early. No debt maturities or mandatory amortization requirements until 2020.
    • Sale of Dendreon Pharmaceuticals LLC completed, $811M used to pay down debt.
    • Cash divestment of Obagi Medical and iNova Pharmaceuticals for $190M and $930M, respectively, should close in H2.
    • 2017 Guidance: Revenues: $8.70B – 8.90B from $8.90B – 9.10B; Non-GAAP EBITDA: $3.60B – 3.75B (unch).
    • Shares are up 5% premarket on robust volume.
    • Michael Kors (NYSE:KORS) reports comparable sales fell 5.9% in FQ1 to top the consensus estimates of analysts for a 9% drop.
    • Retail net sales jumped 10% to $620M as the addition of 67 new stores (net) factored in and stronger than anticipated performances in North America and Europe. Wholesale sales fell 23% to $304M. Licensing revenue was down 6% to $29M.
    • Gross profit rose 40 bps to 60.3% of sales during the quarter.
    • Guidance for Q2 is set at revenue of $1.04B to $1.06B vs. $1.01B and EPS of $0.80 to $0.84 vs. $0.79 consensus. The company sees FY17 adjusted EPS $3.62 to $3.72 vs. $3.55 consensus. None of the guidance numbers factor in the acquisition of Jimmy Choo because the deal hasn't closed yet. MK believes the acquisition will be dilutive to EPS in the low single digit percentage range in FY18 and FY19 and accretive in the low single digits in FY20.
    • Previously: Michael Kors Holdings beats by $0.28, beats on revenue (Aug. 8)
    • KORS +12.81% premarket to $42.00.
    • Axios reports that Snap’s (NYSE:SNAP) first original program averages more than 5M unique viewers per episode.
    • ”Good Luck America”, in its second season, had 29M unique viewers for the whole season, up 45% from the first season.
    • Snapchat counts a user opening the video as a view so the rating numbers don’t directly compare to television ratings, but the metrics do provide some context on the success of Snapchat’s media endeavors.  
    • Snap shares are up 0.22% premarket.  
    • Previously: Deutsche Bank lowers Snap price target (Aug. 7)
    • Oil prices are on the rise on reports that Saudi Aramco (Private:ARMCO) will cut crude oil allocations in September by at least 520K barrels per day.
    • Buyers in Asia will see supplies from the Kingdom dwindle by up to 10%, as part of its commitment under an output reduction pact.
    • It comes as representatives from a joint OPEC and non-OPEC committee meet in Abu Dhabi for the second day to discuss compliance.
    • Crude futures +0.7% to $49.72/bbl.

  31. Phil- I have the following position in HBI and wanted to do something with the long call to capture some of the profit by rolling this to a BCS or something like this. Currently I have Jan '19 15 calls with a basis of $6.22 currently $9.70 and an equal amount of short Jan '19 18 puts with a basis of $2.85 currently $0.85. I was thinking about rolling the long call to the Jan '19 23/30 BCS or the 25/30 BCS. Any input on this would be appreciated. 


  32. It's full-steam ahead on tax reform … with no details

     

    Republicans just want tax reform to cut taxes on the well-to-do. Here's a plan that's more fair and broad-based.

    IMAX/Pat – This:

    Short Put 2017 15-DEC 29.00 PUT [IMAX @ $20.45 $0.00] -10 4/28/2017 (129) $-3,150 $3.15 $5.40 n/a     $8.55 $-0.15 $-5,400 -171.4% $-8,550
    Long Call 2017 15-DEC 23.00 CALL [IMAX @ $20.45 $0.00] 10 5/25/2017 (129) $4,000 $4.00 $-3.00     $1.00 $-0.01 $-3,000 -75.0% $1,000
    Short Call 2017 15-DEC 28.00 CALL [IMAX @ $20.45 $0.00] -10 5/26/2017 (129) $-2,100 $2.10 $-1.88     $0.23 $-0.04 $1,875 89.3% $-225

    /NG/Latch – Massive production increases eating into our premise.

    IMAX/DC – The position was corrected.

    Broker/Kapella – I use TOS, Interactive Broker is also popular.

    LOL Rustle.  And that's just the first half.

    ENDP/TX – Massive, accelerating losses makes them scary.  I think I'd wait for them to calm down but not one I follow.

    Storms/Latch – My experience from skiing 35 years out West and having parents in Florida (so commuting around) is that lots of snow out west leads to hurricanes in the gulf the following fall.  Just want to be there if it happens.

    HBI/Calch – Well, if you have uncovered calls now with the nice profit, I'd buy back the $18 puts (0.85) so there's $2 and cash the calls ($9.70) so now you have $11.70 back off your net $3.40ish bet.  No sense in risking all $8.70 profit but sure, the 2019 $23 ($3.80)/$27 ($2) bull call spreads at $1.80 give you another $2.20 in upside or, if you sell 1/2x the $23 puts for $2.40 then net 0.60 with $3.40 upside on the 2x longs is $6.80 more than you have now if all goes well.


  33. Of course, there is the ongoing positive for /NG:

    • Cheniere Energy (LNG -0.2%) says it is nearing completion of its fourth liquefied natural gas unit at the Sabine Pass terminal in Louisiana, prompting it to raise earnings guidance going forward because its construction projects are ahead of schedule.
    • Without offering specifics, the company says it is "revising our 2017 guidance upward as our operating results year-to-date have exceeded our expectations, primarily due to LNG trains entering service ahead of schedule and the ramp-up in LNG production levels occurring faster than we'd forecast earlier this year."
    • LNG says consolidated adjusted EBITDA for the three and six months ended June 30 was $371M and $854M, respectively, vs. a loss of $4M and $48M for the comparable 2016 periods.
    • Also, LNG says it shipped out its 100th liquefied natural gas cargo in early April and exceeded 160 cargoes by the end of July.
    • Shares are lower after reporting a larger than expected Q2 loss but a seven-fold Y/Y rise in revenues to $1.24B vs. the $900M analyst consensus outlook.

  34. I kind of hope TSLA can get to 600 by 2020 when the competition for cars and batteries will be fierce and they are still losing money.  Would be a once in a lifetime short then.


  35. TCEHY  Anyone buy this when I did?  Up 18% on the common in 49 days.  Getting a bit ahead of itself technically though – thoughts if anyone else owns also?


  36. Hanj – Not in it, but nice !


  37. ESRX…have not heard anything about them.  


  38. Phil/GME  What do you think about GME?  Low debt, 2.2 billion mkt cap, 6.8% dividend.  Large short ratio of 28% and 95% institutionally owned.  Question is if they can continue growth with the upcoming game and console cycle.  Interestingly, over 55% of their sales come from "collectibles."


  39. $600/Rustle – Well, for now I'll be shorting around $380.

    TCEHY/Hanj – Good timing on them but kudos to Scott with this prediction:

    TCEHY – Why Tencent will be the biggest company in the world by 2025

    https://www.linkedin.com/pulse/why-tencent-biggest-company-world-2025-vito-petan

    ESRX/Pharm – Sort of drifting along for now.

    GME/Hanj – We like them as a bargain stock.  You keep thinking that business is over but it never is.  Kid like to hang out there so it's a slow death – like record stores.  But record stores didn't sell $500 consoles, so maybe more legs.

    In the LTP, we have the following (still playable):

    GME Gamestop Corp. 1000 2/24/2017 165 $25,750 $25.75 $-3.70 $25.37     $22.05 $-0.12 $-3,700 -14.4% $22,050
    Short Call 2019 18-JAN 23.00 CALL [GME @ $22.05 $-0.12] -10 2/24/2017 (528) $-5,600 $5.60 $-2.92     $2.69 $-0.02 $2,915 52.1% $-2,685
    Short Put 2019 18-JAN 20.00 PUT [GME @ $22.05 $-0.12] -10 2/24/2017 (528) $-3,200 $3.20 $0.43     $3.63 $0.02 $-425 -13.3% $-3,625

    We picked up the stock for the $1.52 dividend (7%).  As you can seel, we played it to go lower, not higher and, so far, on track.  We're just playing for the dividends and winding our cost basis down to $0 over time.


  40. thankyou Phil!  I hadn't seen that tweet – my tweet feed is just trump, jim gaffigan, and philly eagles. 



  41. pharm-- i think you must have drank Jobu's shot….dangit!


  42. Should've played the DIA on the high RSI, 220 puts for this week were .14 earlier, now .50.  Win some, lose some and watch some.


  43. China’s dominance in the global commodity markets, in one chart




  44. Latch, Are you long or short /NG?   While /QG is low volume, it is only $25 per penny, so less painful than /NG ($100 a penny).  I want to graduate to /NG, but during this learning opportunity, it allows me to practice at scaling into and out of a position. If it goes against me, I am not as concerned about adding and carrying more contracts, which I can scale out of when /NG goes back up.  I am new at trading the markets, but have been focusing my reading on /NG and there appears to be more bearish news than bullish on NG.   

    And general News reports hedging both sides, but I still like /NG over $3.00 during the Winter, coupled with an above normal Atlantic Basin weather report this year that could push it up sooner.  Again, I know very little about Futures, so, I am here to learn and if someone sees it differently, would love to hear their theory. 


  45. Wow, finished the day red across the board.  This market is really screwed up! 

    News is still 90% Trump and it's not good.  I don't want to post too much Trump news because it would sound like I'm picking on him.  At this point, I just hope our country survives him…

    /NG/Joseph – Just be very careful, there's a lot of cross-currents on the news re. Nat Gas at the moment.  I'm trying to quantify the increased production vs. demand but hard to gather the data as it's mostly new stuff we're interested in.


  46. Joseph – I am long – like Phil


  47. "Bank credit growth in the U.S. is tanking and the money supply growth rate is feeling the pinch."

    Interesting read.

    "as the Fed stops reinvesting proceeds, required reserves are going to shrink."

    and another interesting read

    Two guys who have partially connected the dots.


  48. Pcln down on earnings 


  49. Might be safer to stay out of the country now….



  50. In the workers paradise? Is there enough food?


  51. Phil API shows a draw in crude of 7.8 million barrels and a build of 1.5 mb gasoline. Finally getting 50 back if EIA confirms?


  52. What a reversal… Gundlach agrees with me, can we make it to 2500? I promise to short it, doubt we will get the chance. What was volume like?


  53. Trump promising "fire and fury ", so my wins whether markets react negatively to a US first strike, if it happens, or do these crazy markets rise on war news? 


  54. Not sure how the word wins got in there but it was supposed to say "my question is" not " my wins"


  55. VIX picked up a bit:

    Supply/Naybob – Yes, hard to imagine how we keep going forward when they reverse course. 

    Big Chart – RUT persistently failing, watch out if NYSE rolls over. 

    API/Craigs – We'll have to see what's up at 1pm – I'm not sure if the 10:30 will be enough info.  So far, no major move off API, which makes me think it's got some negatives to it.  

    Volume/Mkucs – Today was back to 52M on SPY, double yesterday's 28M almost.  Makes sense with the violent up and down move. 

    NoKo/Craigs – That's going to be random but, given the circumstances, we need an excuse to sell off and that would be a good one.  




  56. Key findings of the federal report on climate change


  57. The Great American Eclipse Is 2 Weeks Away. Are You Ready?


  58. US fertility rate hits a record low




  59. Good morning!

    Europe is down more than 1% and we're down 0.5% on /TF and /NQ.  /TF 1,400 is a good place to play for a long bounce if we get our usual pre-market run-up.  We're lined up right with /YM 22,000 (also a good long with tight stops below) and 2,460 on /ES and 5,880 on /NQ and if ANY of those lines fail then it's time to use them as bearish marks and short the laggard.

    Oil finally decided to turn up but only $49.50 and $52.50 on Brent – not a good play until we see EIA at 10:30.  

    War makes people nervous:

    Notice silver never had doubts: