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Friday Already – What Next?

Don't you just love short weeks?

That's why, as of March 19th, I will be officially retiring from Mondays.  Despite all the fun discussions of quick trades, the bulk of the trade ideas at PSW are long-term, fundamental value plays that we pretty much don't even touch month-to-month.  We're always looking for opportunities of course but Mondays are usually silly, low-volume days in the markets and poorly attended by our Members as well – as they like to have their Mondays off too.  So, as I turn 55 next year, I've decided to move into stage one of my retirement and cut Mondays off my schedule.  That will make every week a 4-day week but still plenty of time to make money!

That's why we are focusing this year on demonstrating the value of long-term investing.  The new portfolio we're doing for Money Talk is another example of the "set and forget" trading style which dominates our portfolios and, if we can make 40% returns working 4 days a week – why not put it to our advantage and take 3 days off?  Only 5 more years before I cut out Friday too!

All of America would benefit from a shorter week.  First of all, if we all worked 4 days a week, they'd need 20% more people to do the jobs.  The people who have an extra day off would have more time to shop and go out – putting more money into the economy and everyone would be in a better mood – America solved.  Even if we all worked 4, 10-hour days instead of 5, 8-hour days, things would be better off and we'd save 20% of our commuting costs and fuel consumption as well.  Personally, I already work 12-hour days – so I'm REALLY looking forward to cutting one out…

I could have skipped yesterday morning as our Dollar play /DX is down $300 per contract at 91.10 and the Sept $22.50 calls are $1.30, down $100 per contract.   That's not terrible but we're very spoiled as it's the first Futures trade we've missed in two weeks, though we did expect a rough start as Fisher quit in the morning but at least we all got great entries and plenty of time to get in (we doubled down on /DX this morning in our Live Member Chat Room to bring the average down to 91.25).

Do you know what causes sudden, surging demand for Dollars?  A stock market correction.  You see, people THINK they are holding $500Bn worth of Amazon (AMZN) stock at $980, but that's only because they haven't actually tried to sell it.  In reality, there are not $500Bn worth of buyers waiting to trade their cash for shares.  In fact, 3M shares a day is a lot of trading in AMZN, just 0.6% of the shares and THAT is what is used to set the price for the other 99.4% of the shares.  Just because one idiot (or 6/10th of an idiot) out of 100 thinks AMZN is worth $500Bn – doesn't mean there are 99.4 other idiots just a stupid.  I gave my premise for Amazon's long-term demise in yesterday's Live Trading Webinar.  

AMZN has earnings the last week in October and they will not make any money and they will be lucky to finish the year with $4 in profit for a p/e of over 200 – ridiculous!  So, if you would like an AGGRESSIVE short on AMZN, I would play the following:

  • Sell 2 AMZN Nov $990 calls for $40 ($8,000) 
  • Buy 5 AMZN Nov $1,030 puts for $72 ($36,000)
  • Sell 5 AMZN Nov $980 puts for $42 ($21,000) 

The net cost of that spread is just $7,000 and it pays $25,000 if AMZN is below $980 (where it is now) in November for a gain of $18,000 (257%).  The margin is steep on this trade ($20,000) and you can quickly lose $27,000 if AMZN goes up 10% to $1,090 so it's a risky trade but a good hedge against a bullish portfolio.  We already sold 3 Jan $1,015 calls in our Short-Term Portfolio (STP) back on July 24th as part of a successful bear spread then and we still have the short calls, now up $10,440 with $13,560 left to gain – so we don't need the new hedge, nor is it as safe as it was when our Members caught the dead top on our previous call.  

That was easy money as we sold into the earnings spike, which we thought was very silly at the time, when I said:

Amazon (AMZN) is not in the Dow but, at almost $500Bn, it's 2% of the S&P 500 and AMZN is up 66.6% from $600 to $1,000 so, if it was a Dow component, it would have added 3,400 points by itself – see how silly the Dow is?  Earnings-wise, AMZN has been impressive with sales going from $107Bn in 2015 to $136Bn last year and on track for $142Bn this year (slowing drastically, which is why Bezos got desperate and bought Whole Foods (WFM)).  Earnings went from $600M to $2.4Bn to maybe $2.6Bn this year (oops again), but investors don't care about profits, do they?  Why not pay 200 times earnings? 

I also had a good diatribe on AMZN in our Live Member Chat Room on the 25th as well as the 19th, laying out my case for why AMZN is over-hyped and retail is over-sold.  I just discussed LB as a potential Stock of the Year pick for 2019 on Money Talk Wednesday night and, last week, on Wednesday, I mentioned that we had called a long on the Retail ETF (XRT) for our Options Opportunity Portfolio subscribers over at Seeking Alpha on 8/24 and we nailed the bottom but you can still make good money picking up the scraps our Members leave behind.  Our trade idea was:

So I wouldn't look for a big move up but we don't need one if we are BEING THE HOUSE.  So, for the OOP, let's:

  • Sell 10 XRT Jan $36 puts for $1 ($1,000)
  • Buy 10 XRT Jan $37 calls for $3.40 ($3,400) 
  • Sell 10 XRT Jan $42 calls for $0.850 ($850) 

That's net $1,550 on the $5,000 spread that's $3,500 in the money to start.  Upside potential at $42 is $3,450 (222%) in 148 days – not too shabby.

XRT is up just $2 since our call but that has been enough to drive the puts down to 0.80 ($800) while the long $37 calls are now $4.20 ($4,200) and the short $42 calls are now $1.20 ($1,200) for net $2,200, whihc is arleady up $650 (42%) in 10 days but the good news is, even if you are too cheap to subscribe, you can still get into this trade for $2,200 with an upside potential of $2,800 if $42 holds through January.  See – even the leftovers from our Member trades are the best trading ideas you can follow!  

So what if you "only" make 127% instead of the 222% our Members make – at least you saved $3/day by NOT SUBSCRIBING HERE!  

Enjoy the free trade ideas while you can – earnings season is coming up again and we don't give them away during earnings.  If the last two weeks of free trades haven't convinced you to join us and learn our trading system – nothing will anyway…

Tomorrow is North Korea's Foundation Day, so we'll be expecting some "fireworks" over the weekend – another good reason to be long the Dollar as we got a spike from 91.50 to 93.25 into the Holiday on their last launch.  Even if Kim decides to celebrate quietly, we still have the Fed Rate Decision coming on the 20th, which is the same day the October Oil Contracts (/CL) will roll over (and we'll talk more about that looming disaster next week).  

Hurricane Irma is, of course, still heading to Florida (in case WWIII doesn't bother you enough) and Florida's Governor Rick Scott could not have been more clear in his warning, which was:

"If you live in any evacuation zones and you're still at home, leave!  Do not try to ride out this storm … we can't save you once the storm hits.  Look at the size of this storm. It is wider than our entire state," Scott said. "Every Floridian should take this serious and protect your family."

You'll have to forgive Scott for the poor grammer.  He is, after all, a Republican and, appropriately, he has orderd all the schools closed in the State.  Shifting forecasts have also raised the threat to the Southeast from Irma, prompting emergency declarations in the Carolinas and coastal Georgia, including areas that haven't suffered a direct hit from a major hurricane in more than a century.  Georgia Gov. Nathan Deal ordered a mandatory evacuation starting on Saturday from the state's Atlantic coast ahead of Hurricane Irma, including the city of Savannah. Nearly 540,000 residents on the coast were ordered to evacuate inland.  

This is great for our Lowes (LOW) and Home Depot (HD) trades and can't be good for Carnival (CCL) or Royal Caribbean (RCL) cruise lines so, if you want to be mean, you can short those, as they will be dealing with tons of cancellations for the quarter and have been trading near highs.  CCL has earnings at the end of this month and the Oct $60 puts make for a fun gamble at 0.55 as Hurricane Jose is right behind Irma so the whole month of Sept is likely to be a loss for them.

Warren Buffett picked the wrong year to buy airlines as well and we'll talk about more storm plays today in our Live Member Chat Room.

Have a great weekend,

- Phil

 


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    Click here to see some testimonials from our members!


  1. Phil / Retirement;

     

    So Do I understand that  you will not get up at 3:am  anymore???.   LOL



  2. Will not be adding to FNSR here. 

    Will probably look to switch into LITE or ACIA for tax purposes


  3. Morning, everyone!

    The webinar replay is now up!

    https://youtu.be/aG4JigHEYno


  4. Good Morning.


  5. Good morning!  

    3am/Advill – I don't set an alarm, that's just how early I get up if I go to bed before midnight.  I usually sleep 4-5 hours a night and one random day I'll sleep 6-8 but I don't try to force anything and I do take naps if I get tired but short ones are usually all I need.  What I can't do anymore is go 2 days without sleep, which I used to do all the time when I was young.  

    So "retirement" is out of the question for me (I'd be so bored!).  In fact, I have the Hedge Fund starting up and plenty to do with PSW Investments to fill up my Mondays next year but I do cherish the occasional 3-day weekend.  It's likely that most Mondays there will be a post and I will stop by to chat – I just want it off my official schedule so people will be able to schedule time with me during a weekday – which is currently very difficult to do.  

    It's getting into a rut that kills me.  Yesterday I ran straight from the Webinar to a PSWI meeting for a property data company we started in March and we're finalizing the software and I was going over things with the programmer and we were discussing marketing and strategy and information access with lawyers and THEN we went to dinner to talk about another project we intend to start next year and I got home at 8:30, made some chat notes and couldn't sleep until well after midnight as I was so energized from all the cool stuff we're doing.  Woke up at 5, walked to the bagel store (just me and the cook at 5:30) and then came back to work on my post.  That's a day for me.  

    /NG took a dive, down 0.05 to 3.154 on /NGZ7.  

    Big Chart – RUT rejected at 50 dma, watch out if others begin to fail, short the laggard (still /NQ, now 5,961).

    FNSR/Albo – Recovering already.  

    Dudley Backs Higher Rates, Says Low Inflation May Be Structural

    Back-to-Back Hurricanes to Test Post-Katrina FEMA Reforms

    Google(GOOGL) is apparently ready to buy smartphone maker HTC

    Don't let IBM's blunders in health care blind you to the huge benefits of technology in medicine

    Greatest Evacuation In History" – 650,000 Ordered To Leave Florida

    Not Just Florida: Georgia And South Carolina Face "Catastrophic Storm Surge"

    Millennials Head One-Third Of All Poverty-Stricken U.S. Households (The Rest Live With Mom)

    Massive Data Breach At Equifax: As Many As 143 Million Social Security Numbers Hacked

    Toronto Home Price Bubble Bursts Into Bear Market

    Panic Buying Leaves 40% Of Miami Stations Out Of Gas

    World's Most Powerful Bank Issues As Major Warning

    Dollar & Bond Yields Plunge As Cohn Doubts, A Draghi Dud, & Debt Ceiling Denials Dominate

    White House Denies Cohn Report, Says Considering "At Least Six" For Fed Chair

    Senate Passes Debt Ceiling/Govt Funding Deal: Here's What Happens Next


  6. phil—we appreciate your hard work.


  7. FNSR??? I am short 5 jan 18 $25 puts with a long 10 Call spread $20/$30….Suggestions how to proceed?


  8. Pharm / Phil,

    Wonder if you had a chance to listen to SGYP's presentation and analyst call yesterday. They raised debt and confirmed that costs will be remaining the same as the first half. Any thoughts on SGYP ?

    Thanks

    Pat


  9. CMG going to test the 300 mark again soon.


  10. Well, as is said in U.S  ….Holy Cow!!, 

    Your idea of moving to Europe (Spain coastal areas in the north near France are great) sounds coherent with that way of living, by the way, how is PSWI doing? any place to visit and sniff a bit?.

    LQMT…what is going on? will they finally get the amorphous Iphone body contract?, I have been waiting during 7 years that to happen.


  11. Phil – NG, is the long premise a combination of Irma and seasonal? or just Irma?


  12. rustle – looks like CMG was downgraded from market perform to under perform by Cowen and co.  Wants their clients who did not pick it up at $300 to jump in…. why such a late downgrade after recent positive news about the queso launch.


  13. Oil, $5.73 spread now


  14. Phil / AAPL   i've got some long naked calls ( jan '19 145 and Jan 19 140's) that id like to sell some short term calls to partially cover  what would you suggest.  I was looking Oct 170 for 1.8….. 

    thanks 


  15. @learner

    Has to do with the price of avocados going higher again.  It's a valid point.


  16. House passed the relief bill.  77 Republican idiots voting against it so far (not a single Dem).

    SGYP/Pat – Just gotta be patient on that one and wait for the next study.  I wouldn't put new money in but not going to bail either.

    CMG/Rustle – Gosh, and they haven't poisoned anyone in two weeks.  

    PSWI/Advill – We're super-busy, launching the Hedge Fund is the project for the quarter.  If that goes well, we'll never need funding again (but we'll IPO anyway).  I figure all we have to do is make 20% consistently and we'll be one of the top performing funds in America and, with just $100M under management, $20M profits generates $4M in fees (20%) + $2M upfront (2%) for $6M and we're running the fund for well under $1M so clearing $5M on the management end.  Of course, if we are making 20% for 2 years in a row, we'll be a $1Bn fund!  

    Speaking of making 20% in a day – Oil just dive-bombed to $48.10 !  That pays for my weekend.  Taking $2,000+ and running.

    Sadly, that is NOT the kind of trading we'll do in the fund – too risky!  

    LQMT/Advill – No, just rumors.  They still can't make enough of the stuff to use it to case an iPhone.  If you bought plastics in 1967, you would have sat on it for a while, wondering why it didn't take off but, as manufacturing processes kicked in – well, now we have an ocean full of them!  

    /NG/Latch – High reward, low risk play on hurricane possibilities through Nov.

    AAPL/Batman – For $25 and $21, I'd cash out and flip to a bull call spread like the $160 ($12.40)/$180 ($5.10) bull call spread at just $7.30.  You can put just 1/3 of your money back in and that gives you almost all the upside to $180 that you would have had with naked $140s and $145s and you can do a 1/2 or 1/3 sell of the Oct $160s ($5.20) because earnings aren't until after expiration and you'll still get great premium for the Jan whatevers ($170s are now $5.20) and, of course, you could do a 2x roll and still not be in trouble AND you have $15 CASH!!! on the sidelines anyway.

    Avocados/Rustle – That is totally Trump's fault!   It's not that much worse than last year though and I can't imagine avocados are that make or break for them (and they do charge extra anyway).  

    Image result for chipotle avocado costs


  17. you can buy stock in alvocados

    CVGW

    https://finance.yahoo.com/news/calavo-growers-inc-announces-fiscal-130000587.html

    earnings were a couple of days ago


  18.  oops thats avocado


  19. American Idiot (2004) – Nothing's changed….. :(


  20. Good Morning

    Phil what is the min req for the hedge fund

    also for anyone interested  :-) an interview with my daughter and others from the digital group of the BO white house featured on Forbes.com      https://www.forbes.com/sites/gretchenfox/2017/09/06/the-rising-stars-of-social-media-an-interview-with-the-obama-white-house-digital-team/#7f672370207b


  21. …looking forward to a great show on the 13th…. :)


  22. 1020 – Mattress Firm Amphitheatre?


  23. Yes…


  24. Hi Savi – Cool article!   :)


  25. Nice


  26. Glass Animals on the 19th…. :)


    • Speaking to CNBC, FRBNY President Bill Dudley says the season's hurricanes mean short-term pain for the economy, and could impact the timing of the next rate hike. The comments coming from an economy bull, that sounds like another way of saying, "no rate hike this month."
    • Dudley, however, sees no reason not to proceed with a plan to begin paring the central bank's balance sheet, and still believes additional rate hikes are in the future.
    • The greenback is losing ground against both the yen and euro as a combination of factors weigh on investors' minds.
    • These include the impending landfall of Hurricane Irma, tensions over North Korea, the ECB's indication it may taper its QE program, as well as a Fed rate hike that's likely off the table for December.
    • The U.S. dollar index is now at its lowest level since January 2015, slipping 0.4% to 91.08 in overnight Asia trading.

    • The data breach at Equifax (NYSE:EFX) affected 44% of the U.S. population, but closer to 75% of those with a credit file, says Compass Point's Michael Tarkan. The operational, reputational, and legal concerns for Equifax are obvious, but TransUnion (NYSE:TRU) and Experian (OTCQX:EXPGY) may be swept up as well as lenders may question whether to keep supplying data to credit bureaus.
    • On the other hand, TRU and EXPGY could benefit from disruption as EFX.
    • History shows financial firms may up having to spend $200-$300 per affected customer.
    • Then there's online consumer lenders like LendingClub (NYSE:LC), which more heavily rely on the credit bureaus. Fraudsters are also more likely to target online lenders given faster approvals and the lack of a manual underwriting process.
    • Source: Bloomberg
    • EFX -15.9%, TRU -0.8%, LC -2% premarket. Experian down 2.25% in London action.
    • Among the names on watch: COFWFCDFSSYFJPM

    • Three senior executives at Equifax (NYSE:EFXsold shares in the days after a historic security breach was discovered, but before it was widely reported, Bloomberg notes.
    • The execs sold about $1.8M worth, and none of the shares are listed as being part of 10b5-1 scheduled trading plans.
    • Equifax shares are now down 12.4% after hours.
    • The breach was discovered by Equifax on July 29; three days after that, according to an SEC filing, Chief Financial Officer John Gamble unloaded $946,374 worth of shares and Joseph Loughran (president of U.S. information solutions) exercised options to rid himself of $584,099 worth.
    • The day after those two sales, Rodolfo Ploder, president of workforce solutions, sold $250,458 worth.
    • Updated: The company says that the three execs hadn't yet been informed of the incident, Bloomberg reports. They “sold a small percentage of their Equifax shares,” and "had no knowledge that an intrusion had occurred at the time,” Equifax says.

    • Uber (Private:UBER) wants its London uberX service fleet to go electric by 2025.
    • Vehicles in the budget-friendly and popular uberX service will need to become at least a hybrid.
    • London transportation regulators mandated that all private-hire vehicles must be capable of zero emissions by 2020.
    • Uber will offer drivers up to £5,000 to upgrade to an electric or hybrid vehicle and will offer up to £1,500 in service credits to Londoners who get rid of a diesel vehicle. The £150 million planned for these programs will come from a slight raise in ride charges.
    • Uber will temporarily have less competition in the London market since the Transport for London has shut down Taxify over licensing issues.
    • The company failed to register as a private-hire taxi operator under its main name.  Taxify instead considers itself a tech company while “City Drive Services” is the arm that picks up customers. City Drive Services does have a license, but TfL isn’t amused by the setup. 
    • Previously: Lyft launching self-driving car test program in San Francisco (Sept. 7)

    • Kroger (NYSE:KR) falls sharply after the company says it won't provide long-term guidance.
    • The grocery store operator roughly matched estimates with its Q2 report on a 0.9% gain in identical same-store sales, but the lack of color on the anticipated impact of the two major U.S. hurricanes along with the lack of long-term guidance has investors skittish.
    • Oppenheimer is in early with a downgrade on Kroger to Perform from Outperform.
    • Previously: Kroger EPS in-line, beats on revenue (Sept. 8)
    • Shares of Kroger are down 6.32% premarket to $21.33.
    • The grocery store sector is getting hit hard after Kroger (KR -6.5%) posted earnings. The grocery store operator noted that's not losing customers, but pricing competition is having an impact on the bottom line.
    • Smart & Final Stores (SFS -7.6%), Supervalu (SVU -5.2%), Weis Markets (WMK -1.8%), and Natural Grocers by Vitamin Cottage (NGVC -3.3%) are all down.
    • Food distributers SpartanNash (SPTN -3.9%) and Chef's Warehouse (CHEF -1.8%) are also feeling the impact.
    • Target (NYSE:TGT) is down 1% in early trading.
    • Previously: Kroger EPS in-line, beats on revenue (Sept. 8)
    • Previously: Kroger falls sharply after earnings (Sept. 8)
    • Restaurant same-store sales decreased 2.0% Y/Y in August, according to data from Black Box Intelligence.
    • Comparable traffic was down 3.9% during the month.
    • Blackbox cites Hurricane Harvey and the Floyd Mayweather-Conor McGregor fight as two negative factors on restaurant traffic at the end of the month. "Consumer spending power remains limited and that is restraining retail sales, especially at restaurants. The impact of Hurricane Harvey and potentially Irma are large enough to slow growth in the third quarter," says Black Box.

    • Cowen & Company downgrades Chipotle (CMG -3.9%) to Underperform from Market Perform.
    • Analyst Andrew Charles warns that the restaurant chain's quality and value perceptions remain near "trough levels" and same-store sales pressure could persist.
    • The queso menu introduction isn't seen providing enough of a sales lift, while Chipotle's focus on store operations over unit growth could reel in investor expectations.
    • Cowen's price target moves to $250 from $370 to rep 18% downside potential.
    • Analysts think the inventory issues at American Outdoor Brands (NASDAQ:AOBC) could continue into the next quarter as firearms demand remains soft compared to a year ago.
    • Price target drops on American Outdoor are in from Cowen ($19 from $27), Wedbush ($16 from $20) and Jefferies ($17 from $20).
    • AOBC is down 18.77% premarket, while Sturm Ruger (NYSE:RGR) is down 3.46%. Vista Outdoor (NYSE:VSTO) is off 1.93% and Sportsman's Warehouse (NASDAQ:SPWH) is 1.15% lower.
    • Taiwan Semiconductor Manufacturing Company (NYSE:TSMannounces August consolidated revenue amounted to $3.06B, up 28.4% on the prior quarter.
    • Revenue from the first 8 months of the year was $20.4B, up 2.6% on the year.
    • Sales were driven by 10nm product shipments mainly for Apple’s A11 processors.
    • Q3 10nm shipments expected to represent 10% of total revenue compared to 1% in Q2 due to the new iPhone product cycle. 
    • Q3 forecast puts revenue from $8.12B to $8.22B with analyst estimates at a $8.19B consensus. 
    • Revenue for the year expected up 5% to 10% on last year, which reported a record $31.6B.  
    • Previously: Taiwan Semiconductor hits back at anticompetitive practice accusations (Sept. 6)

    Opko: Why I Am Cautiously Bullish 

    Diligence Is The Mother Of Good Luck 

    • Williams-Sonoma (NYSE:WSM) says it will be interviewing for 4K open positions during its first-ever National Hiring Day on September 14.
    • The company says it will also be accepting online applications for open positions at corporate offices and across supply chain management offices.
    • Source: Press Release

  27. Banks/Pstas – That would be trouble!  

    CVGW/Stock – Already up but not as much as avocados are.  Kind of expensive at $68.55, which is $1.2Bn for less than $1Bn in sels and $37M in profit last year.  Doesn't look like this year will be better – as noted in chart above, last summer had a good run for them too.  Nice as a concept but I don't think they work in practice.

    /TF rejected at 1,403, which is the weak bounce line.  

    /YM 21,800 makes a better shorting line (tight stops above) as well as /NQ 5,950 but /TF is now the laggard if we start heading lower.  

    Fund/Savi – $250K.  Nice article, what is she doing now?


  28. Here Come the Republican Retirements



  29. How Not to Run the E.P.A.





  30. Here's a screenshot of analyst actions/target for FNSR. In general, they lowered price targets to reflect the bad quarter, but still have "buys" at this lower price. At least one of these analysts previously said that this current quarter would be weak.  (I just included newer analyst actions.)


  31. Phil – NG. What's your position? I have 2 short at 3.175


  32. I mean long. 


  33. /NGZ7/Latch – I have 2 long at $3.158 and I'm waiting to add at least one more around here ($3.114) – maybe at $3.10.

    Could still go 10 cents lower if $2.90 doesn't hold – so I don't want to get in too deep too soon.


  34. CL – below 48 now


  35. Phil, what are your current thoughts on DIS? I currently have  +20 2018 90/105 BCS, -20 Sept 29 103 calls,   and -10 2018 105 puts


  36. Phil,

    What do you think about uup at these levels?

    Thanks


  37. Phil a CL bounce at 47.50 or does it have deeper depths to go to? 


    • "We’ve lowered our prices on thousands of items," says Target (NYSE:TGT) in a blog post.
    • The stock has dropped to session lows, off 3.3%
    • Target is lower by more than 3% after announcing price cuts on thousands of items.
    • Down in concert: Wal-Mart (WMT -2%), Costco (COST -2%), Dollar General (DG -1.7%), Big Lots (BIG -0.9%)
    • XRT -1.05%

    Disney drops Microsoft as Movies Anywhere partner

    • Disney (NYSE:DIS) has dropped Microsoft (NASDAQ:MSFT) as a partner for its Disney Movies Anywhere service, per Engadget.
    • Disney didn’t disclose why the drop happened but sent out an email telling customers that Microsoft’s Movies and TV store is no longer supported though already purchased content will remain unaffected. 
    • Continuing partners include Apple’s iTunes, Amazon Video, and Google Play.   
    • The loss won't dent Microsoft's financials but could drive customers away from its services in order to have a one-stop media location.   
    • Previously: Microsoft, Adobe advance cloud-focused partnership (Sept. 7)

    Bloomberg: Court sides with Apple in Qualcomm royalty dispute

    • Qualcomm (NASDAQ:QCOMdrops 2.2% as Bloomberg says a federal judge in San Diego sided with Apple (NASDAQ:AAPL) in a royalty dispute.
    • Qualcomm wanted to force Apple contractors to pay royalties while other legal matters were ongoing. 
    • More information when available.

    How Sessions' DACA speech dehumanizes immigrants, frames them as inherently criminal

    Explore layered, customized maps of for the United States and by state at .

    The fact that Paul Ryan doesn't know Wisconsin's minimum wage is everything that wrong with our government.

    .: We're gonna need a lot more lithium mines to fuel cars of the future

    It's official: No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as

    Here's what Trump has done for America – 12% of your ENTIRE wealth has been forfeited (so far).  But hey – record market highs!  

    Up 17% – as long as 80% of your money is in the market – you should be keeping up!  


  38. Been away for a few days from the board as I was prepping the house(s) – my in-laws as well – for Irma.  Hopefully I didn't miss too much –   Stay safe everyone else in South Florida (i'm in Broward)…  Hopefully I'll be back on the message boards in a few days…  Signing off for now and bagging up the computer.


  39. Phil – NGZ7 – so when you made the call at 3.195 long, you had not bought any yet?  The action today has been mainly down, so no real chance to DD to reduce from there that I can see.  thanks


  40. Phil://  Any adjustments needed to one of the top trades (it maybe in another portfolio also)

    SVU Sell 50 2019 $3.50 puts at 0.70 ($3,500)

    SVU Buy 50 2019 $2 calls at $2.20 ($11,000)

    SVU Sell 50 2019 $3.50 calls at $1.35 ($6,750)

    Thanks.


  41. /CL $47.75!  Missed $600 more on that fall.  angry

    Oil/Craigs – I think it's way too hard to call with two hurricanes coming.  To me, it's not impacting our production too much and the incoming tankers are diverting so not sure how much will be delayed so, on the whole – it would be silly to guess so it's a no play.  As you know, I had conviction on the short and, into the weekend uncertainty, I was very happy to take my last $2K off the table and be done with it at $48.10.

    Now I have long /NG and /DX – those I feel better about.

    DIS/JMD –  ESPN is in a tail-spin, that's got to start stabilizing and they are in a massive spending cycle too with the Star Wars parks opening.  It's good you sold the $103s and I'd take that money ($2?) and invest it in rolling down the Jan $90s $8.75 to the 2019 $80 ($19.75)/$97.50 ($8.40) bull call spreads at $11.35 and that then makes your Jan $105s ($1.40) your short calls and maybe I'd cash 5 (just in case you get burned) and put a stop on 5 at $2 in case they go higher.  The Jan $105 puts ($10.50) can be rolled to the 2019 $97.50 puts ($8.85) and you don't have to roll it but I wouldn't let the spread get over $2 before pulling the trigger.

    UUP/Harip – Just picked them yesterday.  I think it oversold and like the Sept $22.50s, now $1.20 from our $1.30 entry as a bounce play into the Fed (20th). 

    Ah, now /NQ is leading us down – was the right call after all!  

    Be careful Jeff – let us know how it goes. 

    /NG/Latch – That was like a whole day ago.  Cashed those on the spike up (because $3.20 didn't hold) and back in today at $3.158 still, as it popped before I could DD just now. 

    SVU/Rookie – Well 2019 is a long way off and SVU reverse split 1:7 in July so that became 7 2019 $13/25 bull call spreads and 7 short $27 puts in the LTP.   SVU is currently at $19.51, which means, despite today's sell-off, the trade is on track so no need to adjust at the moment.  

    • The total U.S. rig count edged higher by 1 to 944, following prior week increase of 3, Baker Hughes says in its latest survey.
    • The oil rig count fell by 3 to 756, while gas rigs gained 4 to 187 and one rig was classified as miscellaneous.
    • U.S. crude oil prices declined 2..26% at $47.98/bbl.
    • Shares of Lululemon (LULU +1.6%) are jumping around amid a fresh round of M&A rumors.
    • Volume on LULU is above normal activity. The athletic apparel stock reached $63 for the first time since March.

  42. Phil

     Are you working on a lithium trade?

    Thanks


  43. Lithium/QC – Going to read up on it this weekend to see if there's a sideways play but no particular extractors seem like a good way to play so far.  

    This may be BS on a penny stock (ILC) but I'll give them $1,000 to see what happens:

    International Lithium Receives Proof of Concept Study for Lithium Recovery Using Membrane Separation

    Of course I assume it's a scam so if they spike to 0.20, I'll cash half and then forget about the rest for a few years.  


  44. Phil, we still have a Sept 15 AAPL 150 caller on our books just slightly showing a small profit today shall we leave it or possible roll to Oct 20 160 call for about 5.50 ? Just in case the stock really will go up again.


  45. ~~ QCOM – Qualcomm shares drop; as they lost bid to force Apple (AAPL) contractors to pay royalties.

    ~~  QCOM – Qualcomm: WSJ reports Apple (AAPL) manufacturers will continue to withhold royalty payments as judge denies QCOM motion.  


  46. AAPL/Yodi – I'm more worried about down than up at the moment and earnings are well after expiration so we'll get a good roll regardless. The Oct calls expire before earnings too so we get two good sales.  I just told them on Money Talk that we'll probably have a 10% correction ahead of earnings – we'll see if I got it right ($150).  

    QCOM/Albo – I think it's just a process and all they lost was a motion – they didn't lose the royalties yet.  Still, AAPL must be driving them nuts, suing them in a dozen different countries.  Just bullying QCOM with money and lawyers at this point.  

    The KFTC’s order reviewed by the Court does not invalidate any existing license agreements, does not prohibit Qualcomm from entering into licenses for its standard essential patents (SEPs) and other patents at the device level and does not limit the royalties Qualcomm can seek or collect for SEPs under its current or future licenses as long the license agreements are consistent with Qualcomm’s FRAND commitments. As the Company has described in its prior public financial statements, the order requires Qualcomm to engage in good-faith negotiations with chip companies seeking a license and to negotiate possible amendments with current licensees upon request.

    An interesting way to play this is to short NXPI, who QCOM is buying for $112, which is about 35% higher than before the offer.  QCOM has to come up with $37Bn in cash and they may not be able to get the money if their cash flow is impacted.  

    Anyway, that's super-duper unlikely to happen but it would be fun if it does and the NXPI April $100 puts are $2.50 and could quickly double on even a rumor of the deal failing.  Just a fun play.


  47. Speaking of DIS – CLOSED until Tues at the earliest.  Universal and SeaWorld too.


  48. There's our 50-points on /NQ at 5,925 so goaaaaallllllllllllllllll!!!! – don't be greedy!  

    /ES 2,460 should be bouncy too.  /TF still holding 1,400 s well as it can. 


  49. Phil – "I can't reconcile why the Dollar (/DX) is at 91.40… Do you know what causes sudden, surging demand for Dollars?  A stock market correction."

    In a around about way, you answered your own question.  Via foreign FX reserves the dollar still has 64% of global share, so that's NOT how the dollar has devalued. Observing the following Treasury spreads:

    UST 10 vs 2

    UST 10 vs 90 day

    Low end rising with Fed bumps, high end compressing, forced flight to safety with duration mismatches. No lack of demand for long duration T's there. FYI, another 75 bps via Fed raise and/or balance sheet reduction, should compress those spreads into traditional recession territory. 

    Foreign FX reserve shifts and bond sales covered, so what's left?  FX itself, but not in a traditional sense, unless one wants to buy into the MSM BS.  BOJ rate -0.1; ECB -0.4. Note here, Yen rising from 117 to 110; while Euro rising from 1.03 to 1.19.

    Dollar global transaction share = 84%, which dwarf's all other pretenders. No USD "money", no honey. To keep things afloat, the market is being flooded with "dollars" for liquidity, via carry trades utilizing forward dollar swaps which "print" dollars and increase the float. Many in Yen, but of late much more in Euro. Next support is 90.50, breaking that 88 and Out.


  50. No stick so far, this close is looking ugly.  

    Dollar/Naybob – So you think the Dollar will go lower from here?  That's a shame because I'm long at 91, total overreaction by people who think they understand the currency markets but don't.  For one thing, Europe doesn't want the Euro over $1.20 as it's bad for exports so they'll work the levers:

    Japan doesn't want a strong Yen, so they'll do something as well:

    And, while our Fed may use the hurricane as an excuse to skip a step this meeting, I expect pretty clear (for them) language that indicates they will be tightening at the next meeting (unless conditions deteriorate).


  51. Jeff & others in Fla-Best of luck in staying safe. Family in Turks And Caicos survived last night. Total devastation on islands, and home had roof part of roof taken off, but restaurant was in good shape. Many condos and homes are built to hurricane strength so that helps. Islands shut down electricity which is smart as lines are down all over. Scary times for sure. You can always get another home, or possessions, but you don't get back your life. Hang tough.


  52. Turkey has become a problem for many Germans, travelling to Turkey.

    Spies are all over. The other day a German visited one of the view Catholic churches in Turkey.

    He was followed by one of the Turkish police. Leaving the church he was confronted by the police,

    Asking him if he said prayers in the church. The German visitor said yes I did. The policeman continued saying I saw you kissing Jesus’s feet hanging on the cross. Again the German answered yes I did. The policeman carried on questioning “would you kiss ours president Erdogan’s feet as well”?. The German replied, O yes if he was hanging there. Could be applied to Trump as well!!!


  53. I would expect the Fed to tighten soon because you have absolutely seen inflation after Hurricane Harvey and will see more after Hurricane Irma.  Also the economy will see a boost from this.  The construction industry is about receive a tremendous amount of work.  Not the way you would want to see it, but it will.


  54. Rustle-the problem I see for builders is finding workers. In Fla most were done by Hispanics, or Mexicans. With this immigration disaster, that maybe a stumbling block.


  55. Pretty weak finish.

    Stay safe Florida people!

    Have a great weekend everyone, 

    - Phil


  56. workers/Pirate

    Trump is an idiot because it really is going to affect Houston too, but there will be companies and individuals from all around the country pulling up stakes and traveling to these areas to find work.


  57. Rustle-my sister is scrambling to find anyone to get her shutters up in Fla. Everyone is booked. She had a contract with someone who said he couldn't do it. Her place is in Venice, so it seems tough to find people already and Texas is massive repairs too. With the "graying" of America we need  younger immigrants to fill the gab.


  58. My Mom says that too, can't find workers to get anything done down in Boca.  

    The storm is still moving left, going to hit the West Coast of Fla more than the east now.  

    Here's Miami:

    My Mom's on the board at the ballet:

    Image result for remain calm all is well

    Direct hit from Irma could leave Florida residents without power for weeks

    Miami Beach a year before the Category 4 storm of 1926, and this year. The reinsurance firm Swiss Re estimates that a similar storm would inflict more than $200 billion in damage if it hit Miami today. Credit

     
     
    Hurricane Irma from the Space Station.
     
    Wow!  
    Ships are also getting out of Dodge:
     
     

  59. The East Coast of Florida is from out of the woods though with probably a strong storm surge from the way the wind is cycling! 



  60. This storm size is UNREAL. ANd when it completely destroyed Barbuda, it was packing 185 mph winds. Categories in the Saffir-Simpson scale are 15-20 mpg apart, and a Cat 5 is 157 mph+, so not only did Irma reach the twilight-zone sized "Cat 6," at 28 mph over Cat 5's base case you could call it a Cat 6+. Or a 7, jeez.

    Does it snow in Florida?? because Rick Scott is a PRECIOUS SNOWFLAKE that can't be bothered to even mention "climate change" in state documents and when REALITY base citizens talk about it and what might happen in the future as climate change not only gets WORSE but the rate it gets worse ACCELERATES, maybe just maybe he could shut his dumb, politican-paid-off pie hole.

    Seriously through, increased sea levels causing worsening flooding in Miami have been snowflaked down to "nuisance flooding." Morons.

    My rant aside, my fellow PSW-ers hopefully you evac'ed and are safe and sound, as well as all friends and family, and praying to the Flying Spaghetti Monster that this storm magically dissipates to a much wimpier cat 3 or 2 this weekend!

    (note that His Noodley Appendages are what causes hurricane maps to exist in the first place. Proof of diety, QED!)


  61. Fortunately Jose looks like it'll spin out to sea. Yea!!

    Oh, and also, it looks like Rush got out along with all of his Oxy's and Hydro's, so thank heavens….

    /end sardonic head shaking


  62. BDC  -you said   ~~Seriously through, increased sea levels causing worsening flooding in Miami have been snowflaked down to "nuisance flooding." Morons.

    Did you mean seriously though instead of seriously through ? 8-0

    ~~biodieselchris
    September 6th, 2017 at 4:00 pm | Permalink | Tweet thisIgnore this user 

    Albo/English: trough thorough through threw though thought

    I may lose my house but I still have my sense of humor !

    tough stuff





  63. Phil - Dollar/Naybob – "So you think the Dollar will go lower from here?  That's a shame because I'm long at 91, total overreaction by people who think they understand the currency markets but don't."

    I did not offer any speculation on the dollars trajectory, only causal factors effecting "valuation" and potential downside support levels: "Next support is 90.50, breaking that 88."

    I agree with you, this is an investor overreaction, and BOJ, ECB and PBOC can ill afford to have the dollar decline further. Dollar decline will indeed hurt their economies viz exports, and make the cost of import commodities and inputs higher. 

    Moving West, the value of $5.7T in foreign FX reserves held in dollars will further decline, along with the $1T in deposits foreign institutions have parked in our banking system, while the excess reserves collect IOER.  Doing the math, there are $6.7T reasons why one might not want the dollar to slide further.  

    On the other side of the double edged sword, the stock of US dollar denominated debt of non banks outside the United States was $9.7T end 2015, with $3.3T of this being EM's. So there are $9.7T reasons why one might want the dollar to decline.

    At the end of the day, further dollar decline is a "shame", a "blessing" or neither, depending on ones perspective. Much like hedging a portfolio, dollar positions demonstrate that concomitantly holding diametrically opposed ideas in one's head while retaining the ability to function, can be challenging and Out. 


  64. Afghan Anger Simmers Over U.S. Leaflets Seen as Insulting Islam


  65. PG- B-Fly position- I am not in sync with your official plays on PG but I have Sept opex coming up this week and looking for suggested rolls:

    10 Jan 19 75 P cost 5.75; now 1.91

    10 Jan 19 95 C cost 3.15 now 4.17

    -10 Sept 85 P cost 1.27 now .0025

    -10 Sept 87.5 C cost 3.20 now 5.42


  66. Dollar not having a good year – just wonder why:

    https://www.bespokepremium.com/think-big-blog/worst-year-for-the-dollar-since-1986/

    Might of course be related to general incompetence in Washington!


  67. Congrats Phil on the forthcoming "reduced" work week.

    I don't quite believe the following, but it'd be halfway amusing if the Equifax thing was just a scam to get 143 million people using their free credit monitoring services for one year…in hopes that 10% of them would fall for paying $19.99/month to continue using the service.

    14.3 million x $19.99/month x 12 months/year -> would be an incremental $3.4 billion in revenue.  Not bad for a company that does $3'sh billion in revenue.  And this revenue would be 90% profit.

    Kaspersky and Symantec have long been accused of introducing new virus strains to further sales of their anti-virus products.  This wouldn't be dissimilar.

    reinharden


  68. PStas

    As in many cases I have as well various plays with PG.

    Yes it was originally introduced as a Butterfly play, this is the reason why you hold the now somewhat value reduced Jan19 75 put. I am not sure how long you are in the PG butterfly play, but the sale of shorter month putters in the past should have compensated for the loss of value in the Leap put.

    Further I see as in case of many members, you went for a 10 option play, as I only entered a 5 option play, making it much easier to handle any down drafts. In addition I am holding the stock of PG, originally bought at 80.95, where I in addition enjoy my Armchair play with this stock.

    Coming back to your present position, I first look at the performance of this stock.

    PG Nov 2015 at 64.15 last Friday 92.84. So your long Leap call of 95 is still OTM, even that the stock was never higher than Friday. Not looking too good for any leap play.

    My suggestion is only based in the hope PG will still climb higher on its ladder.

    I would roll the 10 87.5 Sept. callers to 10 Jan19 100 callers for a credit of 2.41, giving you at least a span of 5 dollar 95/100 in your BCS.

    Sell 5 Dec. 95 calls for 1.14. PG will give earnings 10/25 so if you feel the stock will stay in the present range, you can even look at the Dec. 92.5 caller at 2.33.

     We expect the Sep 85 putter will go worthless. So you can sell 10 Dec 90 putters for 1.40. I personally would even sell only 5 Dec putters, looking at the present frail market situation.

    In case we have a 10% dip you looking at PG at 83.55, even at 85 your Dec 90 putter will not look to good and your 75 leap put will do not much to compensate.

    Looking at my port with PG, in my way of trading I show since Jun 14 a 28K profit, so a short putter might not be that detrimental for me, than possible for someone else, dancing on a high wire.

    These are my thoughts, possible Phil may give his magical hand to this, but in the end the final decision will be with you.


  69. In respect to Hurricane Irma, I sincerely hope all Floridians will have taken the warnings of official serious and got the hell out of range.

    I have weathered in Mexico the Hurricane Wilma, 250 Km/hour, after the storm past, I looked out of my front door and thought I landed on Mars, trees, which were still standing up, were stripped of every leave they had the day before, in total a devastating picture.


  70. StJL – "Dollar not having a good year – just wonder why:"

    Refer to my two previous comments in this string.  Then go here, download Q1 2017, some confirmation of what I wrote earlier (forward dollar swaps) is on pages 13, 14 and 15.  It's synthetic and Out.


  71. Dollar Demise; – Try the podcast Macro Voices which has prime interviews and works with RVTV occasionally.  The Sept 7 issue with Luke Gromen will give you all you need to know on why its dollar lower for longer…  https://www.macrovoices.com/podcasts/MacroVoices-2017-09-07-Luke-Gromen.mp3   download the slides as well


  72. Fox News!

    In keeping with their reporting style, Fox News states it will only cover Republican households in Florida affected by hurricane Irma!!????????????????


  73. Smilies did not come out in last post- sorry


  74. Albo – nice

    I felt a rain drop in Seattle finally! Oh my goodness!


  75. Yodi-Thx for your input


  76. I've been running a startup for the last few years (still am), so I don't have as much time to play in the stock market as I would prefer.

    For example, while I still have a large FNSR position, I've not had a chance to read the quarterly reports in great detail.  But absent actual information, I view most weakness in FNSR as a stock problem, not a company problem. Then again, my FNSR basis is quite low. ;-)

    So, while I could be out of date, I view the correct price of FNSR as $40+ with a 20'sh P/E ratio.

    But they're not going to get that when they've turned in two consecutive quarters of declining revenues.

     

    Anyway, at the moment, I view FNSR's weakness as a macro problem that will correct itself over the next quarter or three.  They are still the market leader in optoelectronics and I continue to believe that market will continue to grow nicely over the coming 5 to 10 years.  The addition of sensing markets in addition to the past data and telecom markets should be interesting.

    reinharden


  77. GDPNow vs Nowcast: When Will Hurricane Adjustments Take Place?



  78. Hurricane Irma in Pictures



  79. Mashable


  80. Latch – thanks for the link. I nattered about de-dollarization in petrodollars, two years ago. Try the link right below yours JPS is my go-to for Eurodollars and Out


  81. A lesson in lazy investing: TEVA

    I am in this position with a large paper loss as are many others. How? Mea Culpa !

    I jumped in without my usual due diligence simply on my own bias not to mention favorable PSW comment. I would like to think, had I done my homework, the large dept millstone would have  grabbed my attention and given me pause. Alas, did not happen so now the decision is taking a loss now or working the dead money for a couple of years to break even or maybe turn a small profit if executed with a dose of luck.

    Which brings me to my subject- LB.

    I have no position primarily because my fundamental research raises some serious issues. Fundamentally, their balance sheet is weak at best.  LB has cash and has successfully turned inventory sufficiently to fund operations, pay the debt interest and dividend. However, LB's equity is zip- actually negative. At its simplest, assets less liabilities equal less than zero. So, hypothetically, liquidating the company would net nada after paying the debtors. An oversimplification for sure but troubling none-the-less. Curious about how the firm got there prompted more digging. Seems to me the primary inside stock holders (approximately 20%) stripped cash from the business via special dividends of $1/share in 2014; $2/share in 2015 plus another $2 in 2016. So, about $1.5 Billion in special divvies ( approx $300 MM to the insiders).

    Add to that, more than $1B in stock repurchases in 2014, 15 & 16. Note that total shares outstanding remained constant over this period so they were buying to offset stock options.

    So that's about 1/2 the debt load and as far as I care to dig. I note the bond ratings are at the lowest end of the range and could be considered speculative and carry substantial credit risk. I am not a bond guy but that would make me nervous.

    Bottom line, LB has some terrific brands in Victoria's Secret and Bath & Body Works. Very loyal customer following with significant international opportunities. Recent product line restructuring account for much of the weak sales numbers but can certainly work out in time.  Management has been operating near negative equity for a few years now so they are surely skilled in the arts of juggling finances. This could continue and the market not take account of the debt/balance sheet hole. Decent earnings covers many other sins.

    So what can go wrong? The feared R word for one. A significant revenue decline could stretch the inventory turn rubber band hurting cash flow making the debt load a bigger burden. This makes it a more speculative play and not in line with my capital preservation goal.

    So, unlike TEVA, I will pass on LB and wish the those going forward the best of luck. 


  82. Morning Nat – yes I've been listening to JS for sometime as well — all too technical for me, but I do understand the summary.  What gets me puzzled is how Japan is able to do what it does and not collapse.


  83. pstas – - thanks for the LB comments.  Look forward to Phil's response. The big 'R' is due and perhaps these two (3?) hurricanes will do the trick?


  84. Japan collapse… I agree and think it will happen sooner rather than later. Their fate is pretty well sealed in my book. Will not crash our markets as the flight of capital will hit our shores. Europe continued weakness causing more capital flight, it all comes here as a last hope before our own house of cards collapses. Short run we could see a blow the top rally, more likely than a decline. It will seem irrational for sure but it isn't the first and won't be the last time things get weird. The key will be timing when to get out. I'm net short right now but only for the very short term. Just want to be prepared for when the last bear capitulates… should be quite a spectacle and an amazing short opportunity.


  85. Mk- confused a bit by your last comment. Blow the top rally short term, you are net short for short term are conflicting statements and you add that last of bears capitulating followed by a great short opportunity seems to conflict as well. What am I getting wrong as I read this? 


  86. Should have said medium term rally. Short term as in weeks, doubt markets will like the disasters. Also the fed has said "very soon" start to asset sales. That's going to hurt markets more than rate increases as they pull cash from the market… flood of flight capital comes later, just maybe not too far off… hard to put a date on it, I just think I know it will come. my 2c worth.


  87. Caught a cold, first in years… Hit it with zinc drops and green tea, lemon and honey. Doing better than my poor roommate who brought it home… still sucks.

    GO SKINS!!! Love the start of the season, hope springs eternal…


  88. Oil… I bought a bunch more USO calls late Friday, amazed how low the spreads and premiums are compared to most ETFs, guess it's the volume. Great drop, I'd cashed most my longs at 49 and 48.50 at 200-250% profits, still think we go up from here into end of the month.


  89. Phil Irma appears to be an event that won't affect oil or gasoline production but may hit demand for a few days . This seems like we should maybe see RB price drop from Harvey rise, maybe? Any thoughts about this going into the week? Can't see why oil would rise mk  other than a bounce maybe.


  90. Stopped out of my FTR, Kept the short puts since I have 2019 $10 puts sold at $4.20 and I really don't expect (and will be happy to buy) anywhere close to net $5.80 a share. Nice run from 12 and I'm reloading into the preferred, FTRPR. $22.84 less $11.12 in dividends (4 more to come before conversion, ex div Sept 14) is over 48% and gives you 1.33 shares for 11.72 net or $8.81 a share, 27+% ongoing return at today's dividend rate.. I believe most preferred holders have shorted their expected conversion shares. Most shorted company on NASDAQ, they have already sold them and while they won't have to buy to cover, there won't be any dumping either. Hope it gets cheaper, I will reinvest those dividends and buy more. This is a real gem now!


  91. Good evening! 

    I hope everyone had a good weekend and that all our Florida folk are safe.  Fortunately, the storm calmed quickly and we didn't get the storm surges they feared.  Also, Korea didn't blow up the World – that's a pleasant surprise….

    Futures are popping, up about 0.33%.  /KC had the best commodity pop so far but none too exciting.

    • Hurricane Irma watch: The impact of Hurricane Irma will begin to be sorted out during the week as the extent of storm damage becomes clearer. There could be more volatile trading with insurance stocks such as Travelers (NYSE:TRV), Progressive (NYSE:PGR), Allstate (NYSE:ALL), Chubb (NYSE:CB), RenaissanceRe (NYSE:RNR) and Universal Insurance (NYSEMKT:UVE) – while Disney (NYSE:DIS) and SeaWorld Entertainment (NYSE:SEAS) will also be on watch. Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) have already been bid up 6% ahead of the storm, while self-storage names Public Storage (NYSE:PSA), CubeSmart (NYSE:CUBE) and National Storage (NYSE:NSA) could continue to draw interest. Lodging stocks and the airline sector will also be in focus as analysts weigh in on the potential hit to Q3 earnings.
    • Apple Special Event: Apple (NASDAQ:AAPL) hosts a product update at its first event at the Steve Jobs Theater. Potential reveals include new iPhone models, the Apple Watch 3/LTE and an Apple TV with 4K and HDR capabilities. There could also be a surprise or two in store for Apple fans.
    • Notable earnings reports: Limoneira (NASDAQ:LMNR) on September 11; Farmer Brothers (NASDAQ:FARM) and U.S. Global Investors (NASDAQ:GROW) on September 12; Cracker Barrel (NASDAQ:CBRL), Park City Group (NYSEMKT:PCYG) and United Natural Foods (NASDAQ:UNFI) on September 13; Oracle (NYSE:ORCL) on Septemeber 14.
    • IPOs expected to price: Tremont Mortgage (Pending:TRMT) on September 14.
    • IPO quiet period expirations: Clementia Pharmaceuticals (Pending:CMTA) on September 11 and Venator Materials (Pending:VNTR) on September 12.
    • Secondary offering lockup expirations: Milacron (NYSE:MCRN), DelMar Pharmaceuticals (NASDAQ:DMPI), Norwegian Cruise Line (NASDAQ:NCLH), Arena Biopharmaceuticals (NASDAQ:ARNA) on September 11; Canada Goose (NYSE:GOOS), GenMark Diagnostics (NASDAQ:GNMK) on September 12; MuleSoft (NYSE:MULE), Adesto Technologies (NASDAQ:IOTS), ProPetro (Pending:PUMP) on September 13; Genpact (NYSE:G) on September 14.
    • Notable annual meeting: Inter Parfums (NASDAQ:IPAR) on September 12, Casey's General Stores (NASDAQ:CASY) on September 15.
    • Sales update: Charles Schwab (NYSE:SCHW) on September 15.
    • Special shareholder meeting: West Marine (NASDAQ:WMAR) on September 12; DuPont Fabros Technology (NYSE:DFT) and Bankrate (NYSE:RATE) on September 13; SmartFinancial (NASDAQ:SMBK) on September 14; NeuroMetrix (NASDAQ:NURO) on September 15.
    • Analyst/investor meeting: SSR Mining (NASDAQ:SSRM) on September 12; Alexander & Baldwin (NYSE:ALEX) on September 14,
    • M&A walk date: Agrium (NYSE:AGU) and Potash (NYSE:POT) on September 11.
    • FDA watch: Briefing documents for Pfizer's (NYSE:PFE) Sutent sNDA are expected by September 15. Valeant Pharmaceuticals (NYSE:VRX) could hear by September 17 on latanoprostene bunid CRL. Bristol-Myers (NYSE:BMY) and AstraZeneca (NYSE:AZN) are presenters at the European Society for Medical Oncology this week.
    • Barron's mentions: There's a stern warning to investors on Nike (NYSE:NKE) in the cover story this week. The new strategy at Altaba (NASDAQ:AABA) is seen as a positive, while the MTV relaunch at Viacom (VIAVIAB) is expected to fall short. The impact of a new Apple Watch on telecoms is also analyzed.
    • Sources: EDGAR, Bloomberg, Nasdaq.com.
    Seems like theater to me:  Gulf crisis still going strong
    • Accusing it of "distorting facts," Saudi Arabia suspended any dialogue with Qatar on Saturday, just after a report of a phone call between the leaders of both countries suggested a breakthrough in the Gulf crisis.
    • The discussion came a day after President Trump offered to serve as a mediator to help resolve the dispute, which has shaken the economy of the the world's biggest exporter of liquefied natural gas.
    • A growing movement to eventually ban traditional fuel cars has received a boost from China.
    • The country is developing a timetable to end gas and diesel auto sales, but it hasn't delineated a timeframe like the U.K. and France, which will ban the vehicles by 2040.
    • Seeing the future? Chinese-owned carmaker Volvo (OTCPK:GELYYconfirmed in July that all its new car models would have an electric motor from 2019.
    • Seth Klarman apparently isn't seeing enough opportunities in the market. He's holding 42% of Baupost's $30B in AUM in cash, and has recently told investors to expect a return of some capital, reports Bloomberg's Sabrina Willmer.
    • It would be the third time Baupost has ever returned money to investors – the others being in 2010 and 2013.

    Variety: Bezos pushing strategy lift at Amazon Studios

    • A video programming strategy revamp at Amazon.com (NASDAQ:AMZN) is under way at the urging of chief Jeff BezosVariety reports, in a push to lift Amazon Studios' profile to the level of prestige usually firmly occupied by HBO (NYSE:TWX).
    • Amazon today confirms five new projects that fit the profile Bezos is looking for: high-profile shows that can demonstrate global appeal, a la Game of Thrones.
    • Along with a pair of comedy pilots and a Fred Armisen/Maya Rudolph comedy, the company has given a green light to a period drama from Paul Attanasio and Wong Kar-wai and a Seth Rogen-produced comic book adaptation.
    • The new strategy is informed by the wealth of data Amazon has been gathering, and its experience with existing series similar to the new direction, including Man in the High Castle and The Tick.
    • A success on the level of Game of Thrones (which "is to TV as Jaws and Star Wars was to the movies of the 1970s") wouldn't hurt, says Amazon Studios chief Roy Price. “The biggest shows make the biggest difference around the world. If you have one of the top five or 10 shows in the marketplace, it means your show is more valuable because it drives conversations and it drive subscriptions. … We’re a mass-market brand. We have a lot of video customers and we need shows that move the needle at a high level.”
    • In  other words:  What they are doing so far isn't working!  
    • Walt Disney's (NYSE:DIS) announced upcoming streaming services around its ESPN sports empire and its world-class entertainment brand, and the latter will square off against Netflix (particularly with news that Star Wars and Marvel films will be pulled off Netflix to join Disney and Pixar on the news service).
    • That means a ton of expensive content and foregone revenues, UBS says — and it will take a major customer success to make it work out. Achievable, but it creates "EPS uncertainty for the next several years."
    • Disney will need 32M global subscribers just to break even at $9 per month,” writes Doug Mitchelson and team. That would be well behind Netflix and its outlier 100M subs, but far larger than HBO Now (around 3.5M subscribers this summer) and CBS All Access/Showtime streaming (headed for a combined 4M subs by year-end).
    • UBS bases its estimates on $9/month, but analyst Michael Nathanson thinks Disney could go for $5/month to more quickly build a user base.
    • Disney's investment in its own service is "both intriguing from a build the future growth of the company perspective, but also daunting in terms of the amount of lost third-party revenue,” UBS says, noting film TV licensing is $2B/year alone and licensing through services like Netflix comes to $500M.
    • Apple's(AAPL) Top New Phone to Be Called ‘iPhone X,’ Code Leaks Show(video) Apple Inc.’s most important new phone for years will be called the iPhone X, according to a leak of the company’s latest mobile operating system on Saturday. Strings of software code inside of the leaked operating system, first detailed by Apple news website 9to5Mac, show the expected three new phones will be called the iPhone 8, iPhone 8 Plus, and iPhone X. App and game developer Steven Troughton-Smith discovered the names in the software and tweeted about it on Saturday.

  92. Posting tonight as I am getting 4 wisdom teeth pulled tomorrow first thing so will only be coming out (hopefully) anesthesia when the market opens.


  93. Interesting to see futures up on the better than expected news in Florida. There will still be some heavy damage probably topping $100B like in Houston when you factor in the evacuation costs and how long people will be without power. So yes, better than expected, but still pretty bad!


  94. Dollar/Naybob – So are you bullish or bearish?  I read a lot of words, one could interpret either from them.  I have 4 long /DX and just called a Sept UUP play in the morning report last week – so I think my position is pretty clear – just curious what yours is?

    Image result for scarecrow wizard of oz both ways

    PG/Pstas – Well, they are at $92.84 so the short puts will go worthless and the short calls will be $5.34 if we expire here on Friday.  You sold the pair for $4.57 so down less than a buck is your performance for the month/quarter….   It's not too relevant what you paid for the longs as long as you are recovering the cash.  Notice though what we did in our last adjustment (18th):

    PG – A bit high in the channel so let's buy back the short Sept $87.50 puts (0.10) just to clear the slot and let's cash our Jan $85 calls with a nice profit at $8.50 ($8,500) and replace them with 15 2019 $95 ($4.30)/$105 ($1.40) bull call spreads at $2.90 ($4,350) so half off the table and still very good coverage for our short calls

    You went differently than our 2019 $85 calls ($4.25) and $70 puts ($2.50) and we sold Sept $87.50 puts and calls for $4.70.   On that Aug top (and we're there again so same play) we cashed our longs at $8.50 and they are $8.50 again so same roll.  In your case, you went wider than we did and that's why you have the big loss – especially as you guessed wrong by giving your short caller $10 more to run before your cover kicked in.  There are repercussions to how you set up the long end of a butterfly that you need to consider – spending less money is a terrible reason to have poor covers!  

    We spent twice as much on our calls as we did on the puts, so we were much more bullish on PG, you went the opposite way and were much more long-term bearish – that's the whole difference on the spreads.  

    Anyway, water under the bridge and you work with what you have.  I still think its toppy and I'd still sell the short calls for the spread and then it's just a matter of collecting cash and I think $90 would be a reasonable pullback and earnings are late Oct so we can expect a good roll so I'd sell the Oct $90 calls ($3.40) and the $92.50 puts ($1.45) and just roll the loser or collect $2.35 if we're in the middle.  Just looking to burn premium for 40 days and then we can still sell earnings premium on the next set.

    Collecting $4.85 means your break-even is $87.65/94.85 and it's 40 days out of 859 left to collect so 5% of the days collecting $2.35 in premium x 20 would be collecting $40+ by doing nice, conservative sales like that 20 times.  You only have to get lucky a few times to get way ahead and, as you just saw – even blowing your target by $5 doesn't hurt too badly.  

    Hola Reinharden!  Haven't seen you in a while.  Good Equifax theory, I was wondering myself but the PR is so terrible and they may end up regulated – doesn't seem worth it though, as you note – $280M/month is worth a bit of a hassle.  Good take on FNSR, I agree, just a blip.  

    PG/Yodi – Well I think we should do what you say with a $28K profit under your belt!  cheeky

    Category/Pstas – I agree but I'm fairly sure new categories are coming (car, TV, home). 

    LB/Latch, Pstas – I don't have a "response" – you can make valid arguments on both sides.  My case is you are buying a premium brand retailer that isn't losing money as if they are going BK, so I like them.  People buy companies that are actually going BK and do very well when they recover – I prefer to find ones that other people think are going BK and reap the rewards when they don't.   Many companies go through rough patches over any 20-year take but, while they are in them – people just completely freak out.  What should I say?  Is it possible LB goes bankrupt because AMZN eats into their business and mall traffic shrinks and no one buys fancy underwear anymore?  Sure it is.  Will TEVA fail to make money selling generic drugs the way they have for the past 116 years?  Possibly.  

    What I do know is that, if a fund wants to buy shares, they plant stories that panic retail investors out of the stock so they can buy them cheaply and investors are herd animals and very rarely will go against the grain.  To me, it's an opportunity but I can't be everyone's psychologist – investing like this can be a very rough ride and, despite the overwhelming success in dozens of trades like this in our LTP (and several that blew up in our face, as well) – people still freak out and panic if one doesn't go our way right away.  

    As far as a recession?  If anything, $200Bn worth of hurricane damage (both storms) will be a boost in Q4 as we make repairs.  It's down south so the builders won't be slowed by weather and more than 1/2 of the $200Bn is coming out of idle money in insurance reserves (and they'll be fine as they raise rates to replenish the cash) and some will come from the government that prints more and some will come from homeowners who tap their credit to rebuild.  Possibly this will also give energy to infrastructure bills as clearly we must improve the electrical grid to improve blackouts and levees to prevent floods.  All in all, a slight depression in Q3 GDP from the slowdown followed by a glorious Q4.  Figure $4.5Tn is a typical quarter and money spent on the ground has to go at least 3x through the system (money multiplier) but even 2x would add 10% to Q4 GDP or figure 6% with 4% bleed into Q1 – no recession there!

    Not that that has anything to do with TEVA or LB though!

    And what Mkucs said!  

    Oil/Craigs – Hmm, let's see what the chart says:

    What has happened since then?

    So, at $47.83, what do you think we should do?

    Yikes, StJ – have fun at the dentist!


  95. How many streaming services do we need:

    https://www.bleedingcool.com/2017/09/09/disneys-streaming-service-32-million-subscribers/

    Business Insider also had the numbers to see how many subscribers Disney would need to break even, not even profit but break even: 32 million. As previously stated, Netflix began streaming in 2007 and just broke 100 million global subscribers this year. HBO GO is still at a comfortable 3.5 million and CBS is claiming they’ll have 4 million. The Disney brand is worth a lot, but is it worth that much? UBS, who broke down the numbers, doesn’t think it’s an impossible goal to meet.

    I have Netflix, Hulu and Amazon already. I would not add the Disney one simply for streaming the Star Wars and Marvel movies that will be either VOD or in other premium channels anyway. 32M will take a while to get I think. I don't even have time to watch everything on my watch list.


  96. Phil my question was about gasoline. I was only commenting to mkucstars about oil, since I know it is in a no play area. I was suggesting to him that he shouldn't be quick to go long other than a bounce play. So, do you see gasoline retreating further from those Harvey increases this week? We shot up from the low 1.50's to 2.17 I think and I am wondering if you think we keep heading back towards the 1.50's or will they find an excuse to keep it up here in the mid 1.60's? 


  97. My response Craigs… that's what makes a market :) I believe we will break through 50 and close the gap with brent, now a $6.17 spread and both are up this morning… just my 2c, and it isn't a huge position, fun money really. 50 Sept 15 $10 calls for 4c… where we were Fri morning. Gasoline hasn't dropped a penny here since Harvey. $200 if I'm wrong…


  98. It isn't morning yet… wow, foggy from this cold…


  99. Good morning!

    Big relief rally on both light hurricane and Fed off the table for Sept.  

    Streaming/StJ – And don't forget CBS wants us to pay just to watch the new Star Trek too – it's getting ridiculous.

    Gasoline/Craigs – Just as unpredictable as oil at this level but more likely to calm down than go up (as is oil).  If I had some mania to play because I don't know how to walk away from an uncertain situation, I'd play Brent's premium to contract and for it to break back below $52.50 in the very least.  


  100. Phil,

    I am once again in need of your strategy advice:

    I long IMAX stock (24.38) and short equal number of Dec 20 calls (.90, now 1.80) sold to cover when things looked especially bleak. No conviction that this weekend's box office numbers for 'IT' , itself will be a game changer or indicate better days ahead. So looking to roll the Dec 20s to Mar 24s (now .90) which would make me about even. Plus short some Sep 26 puts  (2.5, now 5.80) which I am okay holding pending assignment. Your thoughts appreciated.

    Thanks