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Friday Failure – OPEC Does Not Agree to Extend Production Cuts

This will be interesting.

After saying they would for the last 10 days, driving oil from $47.50 on 9/11 to $51 (7.4%) on Wednesday (now $50.45), OPEC has now decided they will "wait and see" what happens between now and their March meeting.  As U.S. shale oil continues to thrive and seasonal demand wanes, the surplus that has weighed on markets for three years could return. If OPEC doesn’t extend the supply curbs, the market will return to oversupply again, forecasts from the International Energy Agency indicate.  

Our average on the Oil (/CL) Futures shorts is $50.48 on 10 contracts and we're waiting fo the great unwind, which probably won't happen today as the weekend is here but these contracts run until 10/20 and there are 1.267Bn FAKE!!! orders over at the NYMEX in the front four months – so we're pretty confident there will be a catastrophic sell-off at some point.

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Nov'17 50.73 50.78 50.32 50.39 08:26
Sep 22

 


-
-0.16 112700 50.55 591424 Call Put
Dec'17 51.12 51.13 50.68 50.78 08:26
Sep 22

 


-
-0.15 18699 50.93 362835 Call Put
Jan'18 51.34 51.39 50.96 51.05 08:26
Sep 22

 


-
-0.16 5652 51.21 215723 Call Put
Feb'18 51.49 51.53 51.14 51.20 08:26
Sep 22

 


-
-0.19 5745 51.39 97180 Call Put
Mar'18 51.59 51.59 51.26 51.35 08:26
Sep 22

 


-
-0.14 3687 51.49 180488 Call Put

We're confident shorting at $50-$51 because that's the point at which everyone makes money producing oil.  Even the high-cost UK (where all oil is deep-water) makes 10% selling $50 oil so the incentives to pump all they can at these prices becomes quite high and the prices tend to become self-correcting.  

As you can see on the chart, Saudi Arabia has a very unfair advantage over their OPEC buddies with a $9 average production cost so it hurts them a lot less to cut production because their margins are so massive for each barrel sold.  They wanted to get the other OPEC producers to agree to cuts but many of those countries are having trouble making their budgets and, as you can see from the first chart – have already been cheating all summer.  

When so many people are cheating you either have to call them out for their cheating and get them to stop (the goal of today's meeting) or you have to end the game (the outcome of today's meeting).  Now the chips shall fall where they may – along with oil prices – and we expect to at least see $49 again for a $1,500 per contract gain.  We'll follow up next week and see how things go.  If you short all 591,424 FAKE!!! open contracts at the NYMEX, a $1 drop would net you $591,424,000 profit.  I'm not greedy – I only took 10, leaving the rest for my readers. .

Image result for oil scamOne day, I'd love to organize 591,424 people to buy 1 oil contract each and TAKE DELIVERY ($50,000).  That would MORE THAN DOUBLE the commercial inventory (477Mb) of the United States (the entire Strategic Petroleum Reserve only has 675Mb) and create a glut of crude in this country so intense, that it would take years to unwind.  On the downside, we would take a tremendous loss on the contracts we have delivered but we can offset that by shorting 5 other contracts and making 5x what we lose – while doing our country a service and cutting oil prices for our fellow Americans while breaking the back of the NYMEX oil scam.  Maybe we can do it on Kickstarter?

Speaking of fun trades, the Dollar (/DX) was back at our 91.50 long line this morning and we made $750 per contract on those on Weds and we're very happy to do it again if they insist.  We also played the UUP Oct $23.50 calls at 0.45 and they hit 0.60, for a 33% gain on the day – so that's the range we still like to play in for the Dollar.  The Fed's Williams this morning, attempted to soften Wednesday's blow by stating "We have quite a bit of room to reduce interest rates in response to negative economic developments if needed."  

"Obviously we've talked about this endlessly. We've announced it and the markets have taken totally taken this in stride. But it's still an open question as we actually implement this next month and over the next several years – 'how will markets react?' Well obviously be following that very carefully."

"My view, based on a lot of research people have done including my own work on this, is that the normal Federal funds rate is likely to be around 2.5 percent," Williams also said.  Williams is a super-dove, of course.  Robert Kaplan, who is more of centrist, speaks at 1:30 pm (EST). 

We're still short the Russell (/TF) at 1,435 and it's 1,445 for a $50 per contract loss at the moment but a great entry for those who are not in it with stops out above 1,450 (and back in below) for $100 losses if it keeps going crazy.  It's not about today, but about next week, when we wil have Consumer Confidence and New Home Sales on Tuesday, Durable Goods and Pending Home Sales on Wednesday, GDP on Thursday and Personal Income & Spending, PCE Prices, Chicago PMI and Michigan Sentiment on Friday – so it's a busy data week and we're pretty sure the hurricane will cause Durable Goods and GDP to slump enough to knock the market down a bit

We had a TZA hedge for you in yesterday's morning's PSW Report, so we're good into the weekend.  

With Trump and Kim trading insults and threating to drop hydrogen bombs on each other – I like of like the Volatility Index (VXX) long over the weekend.  It's at $41 now and we can make a nice aggressive play for our Options Opportunity Portfolio as follows:

  • Sell 10 VXX Oct $40 puts for $2 ($2,000)
  • Buy 20 VXX Oct $38 calls for $4 ($4,000) 
  • Sell 20 VXX Oct $42 calls for $2.35 ($2,350) 

That works out to a net $350 credit on 20 of the spreads that will pay $4,000 for a $4,350 profit (1,242%) in 30 days if VXX is over $42.  If not, we are obligated to be long 1,000 shares of VXX at net $39.65 and we would then sell Nov $40 calls, which are now $4.50 for maybe $4,000 back and, if our worst case is having a stock we can make 10% a month against selling calls – I think we can live with that, right? 

Have a great weekend, 

- Phil

 


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  1. good morning. markets closed weak yesterday afternoon and no good news overnight.



  2. kickstarter – lets do it. I am in



  3. Good Morning.


  4. 'Dotard' is my new favorite word….. :)


  5. Phil & Scottmi    in response to your discussion of KR and groceries from yesterday

     

    9/22/2017 8:23 AM ET

    Albertsons Cos., a major grocer, announced that it is buying meal kit company Plated, reportedly marking the first acquisition of a prepared-meals company by a national grocery chain.


  6. Good morning!  

    That was stuck in my head for some reason.  Probably as it's a 5-day work-week…  I forgot about the Chuck and Di aspects of the video.  

    Gasoline is back to its weekend tricks – that's encouraging actually – things are getting back to normal.

    Brent traders still hoping OPEC says something good:

    Oh no – Honey Badger got bit by a snake!  

    Come on Honey Badger – shake it off!  

    Nuts, now I have that in my head….

    Kickstarter/Bulls – Great, just 591,423,098 more guys and we're good to go!  cool  I would write it up but we'd be pretty blatantly attempting to manipulate the market and, unlike Big Oil and their pet traders – we would not be in and out of the SEC/CTFC the same morning…

    Dotard/1020 – I hope people start calling him Dotard Trump for the next 4 years – that will drive him nuts!  Finally we found a leader who's willing to play Trump's juvenile games.  

    Albertsons/Stock – That makes sense, like I said yesterday, that's where the customers are heading. 


  7. France says it will not attend Winter Olympics in SoKo (Feb 9th) if safety cannot be guaranteed.  How will they do that – lead umbrellas?  Pyeongchang, where the Olympics are being held is just 50 miles from the DMZ – gee, who could have imagined that could go wrong?  


  8. Phil – I see Dotard sticking with him well beyond impeachment…. :)


  9. I thought 'Rocket Man' was a cool name, actually…..


  10. I like Rump. Dotard Rump.


  11. Phil –  a general overall investment question. I notice that in general you are rolling out profitable positions more often than letting those profitable positions expire, where I tend to focus on getting my holdings in very profitable positions and then letting them expire. Thanks to your guidance I have become very proficient at rolling out non profitable positions, when it's a company that has some long term potential. Maybe its just having a manageable number of holdings to follow. In my strategy I often end up with 5-8 holdings on a stock, with say 3-4 clearly in the money. On a 1M account my strategy often has – 300-400k invested in 30 stocks times 6 holdings/stock or 180 positions – and can sometimes get overwhelmed.


  12. The Russell is relentless. I don't get it, but your time frame makes sense. Selling softly gets more shares into weak hands.


    • Sept. U.S. PMI Composite54.6 vs. 54.9 consensus, 56.0 prior.
    • Services PMI 55.1 vs 55.5 consensus, 56.9 prior.
    • Manufacturing PMI 53.0 in-line with consensus, 52.5 prior.
    • Eurozone PMI came in very solid for September as growth of business acticity accelerated. "Across both manufacturing and services, job creation was the second-highest seen over the past decade," notes IHS Markit.
    • Flash services PMI was recorded at 55.6 vs. 54.8 estimated. The gauge on incoming new business rose to 55.6.
    • Flash manufacturing PMI blazed to 58.2 to top the 57.2 mark anticipated by economists.
    • Eurozone flash composite PMI was 56.7 vs. 55.6 estimated to rise to its highest level since May.
    • Commerce Secretary Wilbur Ross will release a study Friday that he say argues for tougher rules of origin in NAFTA, due to declining U.S. value-added content for manufacturing imports from North American partners.
    • In particular, the Trump administration wants to see more U.S. content in auto imports, which make up the main source of U.S. trade deficits with Canada and Mexico. U.S. content in Canada's manufactured goods dropped to 15% in 2011 from 21% in 1995, he says; in Mexico's goods, it dropped to 16% from 21%.
    • Mexico says its imports into the United States contain about 40% U.S. content.
    • An opinion piece from Ross previewing the report comes ahead of a third round of negotiationsfor the deal starting in Ottawa on Saturday, where the U.S. Trade Representative looks to submit new text proposals dealing with more challenging issues, like rules of origin, labor standards targeting higher Mexican wages and mechanisms for resolving disputes.
    • Major U.S. automakers: FGMFCAU. ETFs: CARZ
    • Transocean (NYSE:RIG) says it will take a $1.4B impairment charge in Q3 to cover the costs of retiring six rigs that were previously cold stacked.
    • RIG is retiring the ultra-deepwater floaters GSF Jack RyanSedco EnergySedco ExpressCajun ExpressDeepwater Pathfinder and the deepwater floater Transocean Marianas; all will be put up for sale and recycled.
    • U.S. Steel (NYSE:X-3.5% premarket after Cowen downgrades shares to Underperform from Market Perform with a $20 price target, cut from $24, as the firm sees prices for iron ore and U.S. hot rolled coil poised to move lower.
    • U.S. Steel is heavily exposed to HRC spot market movements in addition to being vertically integrated, and is unable to benefit from a move lower in iron ore prices, Cowen says.
    • Cowen thinks seasonal production cuts and shrinking credit availability in China could pour cold water on steel pricing; 2017 has been the largest stimulus year for China since 2013, yet several economic indicators are well below 2013, the firm says.
    • Cowen also cuts ArcelorMittal (NYSE:MT) to Market Perform from Outperform with a $27 price target, trimmed from $32, saying the majority of the company's business segments are heavily leveraged to iron ore prices.
    • ETF: SLX
    • CarMax (NYSE:KMX) reports used vehicles unit sales rose 11.1% to 186,019, and +5.3% on a comparable-store basis in Q2.
    • Used vehicle sales advanced 11.9% to $3.69B.
    • Total wholesale vehicle unit sales grew 0.4% to 105,508 and total sales down 2.3% to $547.8M.
    • CarMax Auto Finance income expanded 12.5% to $107.9M.
    • Average selling prices: Used vehicles: $19,667 (+0.7%), Wholesale vehicles: $4,957 (-3.2%).
    • Gross margin rate improved 20 bps to 13.8%.
    • Gross profit per used vehicle increased 0.8% to $2,178.
    • Gross profit per wholesale vehicle +9.2% to $950.
    • KMX +3.86% premarket.
    • Volkswagen (OTCPK:VLKAY) is looking to secure long-term supplies of cobalt as it plans for a large-scale increase in EV production, according to Reuters.
    • Sources within the cobalt industiry say the German automaker is looking to secure cobalt supply for ten years starting in 2019.
    • Most of the world's cobalt supply is sourced out of the Democratic Republic of Congo.
    • The rise of low-cost carriers in Southeast Asia is expected to be a boost for Boeing (NYSE:BA).
    • The company lifted its 20-year forecast for planes in the region by 460 aircraft to now see total demand of 4,210 new airplanes worth ~$650B. Southeast Asia is taking on greater importance to Boeing and Airbus due to the explosive growth of carriers such as Lion Air, Vietjet and AirAsia.

    This is a great App:  GrubHub -4.4% as Amazon partners with Olo

    • Food-delivery specialist GrubHub (NYSE:GRUB) is 4.4% lower premarket after word of Amazon.com's parrtnership with Olo, which could let it press deep into GrubHub's delivery market space.
    • That would be a monthlong low for GrubHub, quoting at its lowest price since Aug. 3.
    • While Buca di Beppo is the only Olo customer so far to say it will be using Amazon Restaurants for delivery, dozens of other brands could follow, including Chipotle Mexican Grill and Shake Shack.
    • Online food ordering company Olo announces a partnership with Amazon (NASDAQ:AMZN) Restaurants food delivery service.
    • Under the partnership, Amazon Restaurants integrates into Olo’s Rails API so restaurants can easily list menus to third-party marketplaces. Orders integrate into existing POS systems for quick order processing. 
    • Olo’s network includes more than 200 restaurant brands including Chipotle and Shake Shack and 40K locations. The company says 60M consumers use the service, which is available through mobile apps or the Amazon Echo. 
    • Excitement is building in Macau for the Golden Week holiday. A channel check by Deutsche Bank indicated strong booking trends ahead of the holiday which runs from October 1 to October 8.
    • Investors hope the bookings translate into more casino traffic as several new resorts host their first Golden Week and look to bounce back from the typhoon lull.
    • Keep an eye on MGM Resorts (NYSE:MGM), Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), Melco Resorts & Entertainment (NASDAQ:MLCO) and Galaxy Entertainment (OTCPK:GXYEF) to see if their recent uptrend continues into Golden Week.
    • Related ETF: BJK.
    • CVS says it will begin limiting the duration and dose of some prescriptions for opioid painkillers in an effort to combat the growing addiction problem.
    • Troyen Brennan, CVS’s chief medical officer, tells WSJ the company will limit opioid prescriptions to seven days or less for certain patients with acute pain – a big change, since many CVS-covered patients with acute pain receive opioid prescriptions for 20 days or more – and limit patients with chronic pain to a maximum daily dose of 90 MMEs.
    • CVS and other health care companies have been accused of helping fuel the addiction crisis through their handling of opioid painkillers; CVS last year paid $3.5M to settle federal allegations that 50 of its pharmacies in New England filled forged prescriptions for painkillers.
    • CVS manages medications for nearly 90M people, or ~28% of the U.S. population, through its Caremark unit and runs 9,700 retail pharmacies nationwide.

    Still waiting on Qualcomm-NXPI deal

    • The tender offer for the acquisition of NXP Semiconductors (NASDAQ:NXPI) by Qualcomm (NASDAQ:QCOM) expires today.
    • The deal was first announced on October 27, 2016, but has hit several regulatory roadblocks and isn't widely backed by NXP shareholders.
    • Elliott Management and Third Point both have stakes in the buyout candidate.

    My comment from last week:

    Submitted on 2017/09/08 at 2:50 pm

    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.

    • The U.S. box office will be on watch this weekend with Entertainment Studios' Friend Request, Fox's (NASDAQ:FOXAKingsman: The Golden Circle and Warner Bros. (NYSE:TWX) film The LEGO Ninjago Movie all due to open.
    • A stellar performance by It has the September box running about 18% ahead of last year's pace through September 20. A good run over the next three days at theaters could boost investor confidence in exhibitors Cinemark (NYSE:CNK), Regal Entertainment (NYSE:RGC), IMAX (NYSE:IMAX) and AMC Entertainment (NYSE:AMC) amid growing concerns over the emergence of the MoviePass subscription model and an earlier premium video on demand window.

    • Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) are on the move after Reuters reports that deal talks are heating up.
    • Sources indicate a major breakthrough has pushed a merger closer to the finish line.
    • Softbank (OTCPK:SFTBYOTCPK:SFTBF) is expected to own 40% to 50% of the combined company through its Sprint stake, while Deutsche Telekom (OTCQX:DTEGFOTCQX:DTEGY) will hold a majority stake via its T-Mobile holdings.
    • Shares of Sprint are up 3.49% in premarket trading, while T-Mobile is 1.51% higher.
    • Wal-Mart (WMT -0.3%) is teaming up with hardware startup August Home to test a delivery concept that involves giving drivers a one-time smart lock passcode to access refrigerators inside of houses.
    • The grocery delivery process is highly monitored through the August app and can be viewed through linked security cameras.
    • The test is being run in Silicon Valley with just a few August Home customers.

    Google and ad exchange partners offer fake traffic refunds

    • Alphabet’s Google (GOOGGOOGL) and some ad exchange partners will offer refunds for fraudulent traffic that expand on a prior refund program.
    • The Wall Street Journal reported last month that Google would issue partial fraudulent traffic refunds for ads purchased through its DoubleClick Bid Manager ad exchange. The refunds topped out at about 10% of total ad spending. 
    • Now Google’s partnered exchanges including AppNexus, OpenX, and Telaria will work to form an automated refund system “in the coming months.”
    • Refunds would apply to fake traffic detected within 30 days of monthly billing.
    • Fraudulent ad spending has actually dropped 10% this year but could still amount to $6.5B this year, according to a trade paper by the Association of National Advertisers and WhiteOps.  
    • Previously: WSJ: Google refunding some ad money due to fake traffic (Aug. 25)
    • Alibaba (NYSE:BABA) is in the sights of analysts this morning.
    • Cantor Fitzgerald starts off coverage on the e-commerce giant with an Overweight rating and price target of $213 (20% upside).
    • Citic Securities initiates coverage with a Buy rating and price target of $225 (27% upside).
    • If you like being in the majority, Alibaba is your type of stock. 47 out of 49 ratings on the stock are in the Buy equivalent category.
    • Shares of Alibaba are up 102% YTD.

    Piper Jaffray increases Apple price target and ASP forecast; iPhone 8 launches today

    • Piper Jaffray raises its Apple (NASDAQ:AAPL) price target by $6 to $196 and maintains an Overweight rating.
    • Analyst Michael Olson predicts that the iPhone 8 and iPhone X will boost the company’s overall average selling point. Olson forecasts FY18 iPhone ASP of $710 compared to the $696 Street consensus. 
    • The ASP increase also adjusts Olson’s FY18 EPS estimate from $10.68 to $11.11, compared to $10.89 consensus. 
    • Olson writes, “We recommend owning Apple on potential for a strong overall iPhone cycle, rising ASPs and a favorable services revenue trajectory.” 
    • The iPhone 8 and 8 Plus hit retail stores today with the launches in Sydney, Australia, and Asia described as “bleak” and “muted”, respectively
    • Apple shares are down 0.47% premarket.  
    • Previously: Raymond James: Apple hasn't begun final production of iPhone X (Sept. 20)

  13. Profits/Nan – Well I guess you'd say we're sticking with our winners and spending 1/3 of our winnings on the hedges to lock in the gains.  I'd love to cash out, but Mr. Market says that's foolish when you have one down day in a month, right?  Your strategy is great – especially as it's working!  

    There's no "right" way to trade.  There are plenty of WRONG ways but also quite a few right ways.  Swing traders make money, Fundamental traders make money, Day traders make money, even TA people make money.  The more important thing is to find a trading style you are comfortable with and get REALLY good at it – then you will make money too!  

    The big mistake most people make is "trying" something for a short while, giving up when it loses money (possibly just a down cycle) and they jumping on something else and giving up when that loses money and then going to the next thing – you're not becoming an expert that way – just beginning over and over.  I don't like day-trading – so I don't do it.  I don't like currency trading – so I don't do it (often).  I don't have time to dig into Biotech companies, because it's expertise I don't have and I feel I would be trading with insufficient information – so I don't do it.  

    My Dad was a systems analyst and we had a computer the size of a refrigerator in the house when I was a kid and it got so hot you could fry an egg on it and my Dad would couple our phone line to it with those suction things and he'd log us into NASA (he contracted for them) to play Lunar Lander and Pong on a little green screen.  

    Image result for telephone modem suction cups

    So I was always interested in computers and ours constantly needed attention so we were always opening it up and my Grandfather was a trader so, when I started trading on my own, I focused on Tech.  Computers and Chips were what I was comfortable trading.  Because of that, I started to learn more about Retail and then Retail caused me to have questions about Warehousing and Transportation which led me to learn about Logistics which led me to also consider Energy costs and other Commodities and then Manufacturing.

    So one thing organically grew from the next and I stuck to investing in things I knew about and as I became an expert in one sector, it would lead me to learn about other sectors that touched them.  The same goes with types of trading – I usually put in a good amount of my 10,000 hours trying each thing before I would move on – that gave me good focus on what I did and didn't like to do with my trading. 

    So, moral of the story is don't try to force things – I didn't set out to be an generalist but the things I learned along the way led me down that path naturally.  My trading style is based on what I'm comfortable with too – I like to have a firm handle on value (got it from Grandpa Max) before I trade something and, if I can't figure out the value – I don't do it.  That, in turn, makes my trades more manageable because – as you see from our reviews – more than half of them are simply "on track" or "not worried" at any given time – even when they are down in the cycle. 

    RUT/Mkucs – WTF was that?

    I think, because I'm mentioning it "THEY" are trying to blow us out of the positions.  Maybe we need to be more careful about that. 


  14. AAPL down sharply as rumors of low customer interest trump upgrade.  


  15. Wow, we're going to go the whole week without cracking 60M on SPY!  

    Date Open High Low Close* Adj Close** Volume
    Sep 22, 2017 249.05 249.42 249.02 249.25 249.25 9,210,114
    Sep 21, 2017 249.88 249.98 249.19 249.39 249.39 44,756,500
    Sep 20, 2017 250.07 250.19 248.92 250.06 250.06 59,574,100
    Sep 19, 2017 250.00 250.07 249.60 249.97 249.97 47,108,100
    Sep 18, 2017 249.61 250.12 249.28 249.72 249.72 46,235,200
    Sep 15, 2017 248.69 249.29 248.57 249.19 249.19 95,432,400

  16. Phil

    Deal talks said to heat up between Sprint and T-Mobile

     

    Is it a good idea to sell puts on  Sprint or T-Mobile

    Thanks


  17. Phil, did you short TSLA at 380 like you said you wanted to?


  18. Phil mentioned a few of his longshhot stocks the other day, GRNBF, LQMT, NAK, and I like the idea of having a couple of these for my kids. Anyone care to share their favorites such as these? Who has a possible get rich stock they like to share ? Mine was OPK, but lately they seem like a get poor company and that premise seems blown, so I am looking for new ones and Phil' are good but I thought it might be nice to open up the conversation on a quiet Friday. I will look for my next one as well. Thanks in advance for those caring to play.


  19. Longshot – NWBO @ 0.18/share, phase 3 topline results expected "soon"


  20. Crgs620

    Spec with some class:BLDP ( 2nd FCEL; no to pLUG) from my brief discussion yes'd with Phil & BDC. 


  21. Phil if OPEC rejected extended cuts, what is keeping oil from falling on that news?



  22. Thanks for playing 8800 and edro. We could have some fun with this. 


  23. Phil for my question about a dividend stock last night you said to see the list of dividend stocks above.   I do not see such a list or link to one??  Apologies in advance if it is staring me in the face.


  24. Zuela – Muck – Syntax or Sin Tax?  FYI, here are the STATE tax revenue estimates, county, city and other local taxes not counted.  Note how little corporations pay and Out.

    California Revenue Estimate 2016-2017

     

    Personal Income 86B

    Sales & Use 26B

    Capital Gains 12B

    Corporate 11B

    DMV Registration/Sales 7.8B

    Fuel Tax  4.7B

    Insurance 2.5B

    Maryjane 810M **

    Cigarette 790M

    Alcoholic Beverage 373M

    Indian Gaming 227M

     

    ** Not included in current budget estimates 

    Marijuana $7.7B Calif. market x 0.70 declared = 5.4B x .15 = 810M

    2016 est. market size black 75% $5.7B; medical 25% $2B.

    2017 est. market share legal 60% (5.4B); black 30% (2.3B); medical 10% (770M).


  25. Phil – thanks for your comments – your support is appreciated – I think I'll slowly work on reducing my number of positions – that will make my style/my success more comfortable. 


  26. Phil, in addition to the Apple BCS's below, I have -20 Oct 155 put and +10 2018 155 calls. Should I adjust anything with the current dip?

    + 20 120 call      +20 135 call 

    -10 150 call        -20  165 call          -10 170 call

    Thanks


  27. Sorry that -20 Oct 155 Calls and +10 2018 155 call…


  28. Muck – I like Rump. Dotard Rump.

    Thank you for my ROFLMAO of the day.  How about SODA? Senile Old Duck Ass.


  29. Phil – Guess Who Sent Me An Email?  Lemony Snicket wants to talk on the phone to clear up or 'splain a series of unfortunate events, that "I might not be aware of."   What do you think? I think it might go something like this... and Out.


  30. I try :)

    I have sexdaily.

    I mean dyslexia! 

    Fcuk.


  31. Phil in the News – "Phil Davis of PSW Investments was more downbeat, predicting a "pretty big sell-off over the course of the next couple of months" due to the short-term economic hit from two hurricanes and the impact of Fed tightening."


  32. I've been in NWBO and picking up more shares as it is a penny stock. It's a DCVax-L for GBM and it uses the patients immune cells to attack cancer cells including t cells. There is a good write-up in SA on it and the SCO protocols and and  possible extended longevity which is in the third and final stages of testing. News should come out soon. It's a Canada company, which I prefer since it seems like everything US is crooked  especially with the FDA who still has to approve this..


  33. What a way to run a country – pass anything even if we don't know the impact:

    http://www.politico.com/story/2017/09/22/trump-obamacare-repeal-doubts-243000?lo=ap_a1

    One official said the concerns from governors have alarmed some in the White House — and that "we really aren't sure what the impact will be” of passing the bill. 

    But Trump said it was a good bill….


  34. S/QC – Not enough information to make a short yet.  I just liked NXPI because it was considered 100% (so the option was cheap) but QCOM has cash-flow issues and I was wondering where they'd get $35Bn from.  Turns out they don't have it so far – but this deadline is easy to move and it's not like someone else wants to pay $38Bn for NXPI.  

    TSLA/Jet – No, they fell too fast and I missed it.  angry  I'm super-pissed because I waited PATIENTLY for 3 months for them to get back to $485 and I didn't want to make the call too early so I thought it would be good to wait.  

    OK, so it's not breaking out if you break over 1,450 but then immediately fail it again.  All that does is prove 1,450 is not a real support line.

    When you zoom out – it's just one of those spikes we ignore:

    You need to be aware of that – especially when you are day-trading (and we're always day-trading the Futures) as these things that look significant really aren't in the grand scheme of things.

    Penny stocks/Criags – Notice I've picked 3 on 5 years – not really the kind of thing you should set out to find.  For me, a penny stock has to have a fantastic opportunity to go 10x and something of actual value backing it up.  LQMT has a patent (can't make it in quantity yet), NAK has mineral rights to what was definitely a massive mine (environmental concerns were holding it back), GRNBF had a massive amount of GreenCoinXs that they were not being given credit for owning.  We bought SIRI when it was a penny stock because, aside from Howard Stern, they were locking in all the radio talent and my premise there was that talent did matter – that's how they won.  Plus they had satellite assets – also hard to replicate.  

    OPEC/Craigs – The Fridayness.  Also, maybe war in Korea and, of course, the OPEC guys are talking up what they have accomplished and claim all is balanced and, in theory, we should get another draw next week as refineries come back on-line fully.

    ICOs/StJ – Shhhh, make sure BDC isn't here, he gets upset!  cheeky  I've said before, that's my issue with the whole thing, by nature, the person who creates the coins owns 20% of them before anyone else can.  That's just ridiculous since it only takes a few days worth of programming to make one.  Any monetary system where one person has 20% of the money is inherently unstable.

    Dividends/Tangled – I didn't realize our news feed isn't working.  If you want to see the news, you can access the raw feed on our Flipboard HERE.

    This was the dividend article:

    Corporate taxes/Naybob – The state where AAPL and GOOGL are only collects $11Bn in taxes – WOW!  And the Government does nothing because????   That DMV is quite a scam too.

    Good plan, Nan.

    AAPL/JMD – You have long AAPL Oct $155 calls and you didn't take a profit at $165???  There's not dates on the others so not sure what I can tell you.  I hope they are not all Oct.  Let me know in a proper format like: "20 2019 $120 calls at $20, 20 short 2019 $135 calls at $10.50"  you know – so I can have some kind of idea what you actually have before suggesting possible adjustments.

    Unfortunate/Naybob – How do you transfer a selfie to YouTube like that?  cheeky

    NWBO/Pirate – They sound cool but I don't like that they are raising just enough cash to survive ($1.75M).  They burned through $2.2M last Q and $4.6M the Q before.  Could be a long, hard road ahead. 

    Damn, AMZN is another great short I missed by waiting too long:

    • Amazon (NASDAQ:AMZN) is running Kindle ads across Alibaba’s (NYSE:BABA) China-based shopping sites in a move that suggests Amazon has given up on trying to compete in that market.
    • Alibaba and JD.com (NASDAQ:JD) dominate the Chinese e-commerce space with Amazon scraping out less than a 1% market share after a decade of trying, according to Recode
    • In Q2, Alibaba held a 51.3% sales share in the China e-commerce retail market with JD.com snagging 32.9%, up from 17.7% in 2014 according to an eMarketer report. 
    • Amazon instead plans to focus on dominating the India market after promising a minimum $5B investment in the region. 
    • Previously: JD.com gaining on Alibaba's Chinese e-commerce market share (Sept. 6)

    We were talking about it two weeks ago in the webinar – they are simply not special enough to keep out competitors.  Outside of their home market, they really don't have anything special to offer.

    Yikes, protectionism!  Really it's just a way for Trump to drive up solar costs to please his coal buddies:

    • The International Trade Commission, as expected, determines that U.S. solar panel producers are harmed by cheap imports; Pres. Trump will recommend remedies against import surges by Nov. 13 to address the situation, and he is widely believed to favor tariffs.
    • First Solar (FSLR +5.5%) surges in reaction to the ruling, as it is viewed as the biggest winner given its low cost advantage.
    • Tariffs would be a negative for Chinese solar names including Jinko Solar (JKS -1.7%) and Canadian Solar (CSIQ -2.8%), and residential solar providers such as Sunrun (RUN +0.6%), Vivint Solar (VSLR -5.9%), SunPower (SPWR +0.8%), SolarEdge (SEDG +1.5%) and Enphase Energy (ENPH -4.3%) could suffer higher costs for solar panels they purchase.

     

    • U.K. Prime Minister Theresa May laid out proposals for how the nation will partner with the European Union after it strikes out on its own in 2019.
    • May suggested payments would be made over the two years to ensure that no EU member nations falls short due to Britian's withdrawal. Though she didn't mention a figure, €20B is reported to be the starting point amount for U.K. Brexit negotiations. She also acknowledged that the U.K. will need to pay to keep certain science, education and culture programs in place.
    • May was more strident with her comments on Northern Ireland. "We have both stated explicitly we will not accept physical infrastructure on the border," she said.
    • The pound was volatile during the speech, but ended back very close to its starting point against the U.S. dollar and euro.
    • Time Inc. (TIME -0.8%) says print and ad revenues are softer than expected this quarter and that it is in talks to sell several assets, including Time Customer Service and a majority stake in Essence.
    • Assets set for unloading made up $488M in revenue over 12 months, about 17% of the total.
    • In its last earnings report, the company had said it expected to see sequential improvement in revenue after a 17% drop in Q2. But it's reaffirmed its full-year OIBDA forecast of $400M-$414M, expecting cost savings and other initiatives to offset advertising.
    • The Trump administration will defer a decision on steel tariffs as it focuses on getting tax reforms through Congress, Commerce Secretary Ross tells Bloomberg.
    • Ross says he will offer Pres. Trump a range of options when it reports its findings on the Section 232 steel investigation, but overhauling the tax system is the “single most important" item on the administration’s agenda.
    • Shares of major U.S. steelmakers are broadly lower: U.S. Steel, which also was downgraded at Cowen, fell by as much as 6%, while Nucor (NUE -0.2%), AK Steel (AKS -3.9%) and Steel Dynamics (STLD -0.7%) also are down.
    • ETF: SLX

  35. Russell… that was another shorting opportunity. They won't shake me out, I bought me some TZA when it spiked. 


  36. Phil

    Movie passes

     

    §  Did we look at  HMNY

     

    §  Helios and Matheson Analytics Inc. HMNY

    MoviePass And Helios: Executive Interview $HMNY
    http://www.seekingalpha.com/article/4108788

     

    What do you think of buying  HMNY ?

    Thanks


  37. Is it just me or does the market look constipated… needs to take a dump in the worst kinda way.

    Oil should be testing 50, it's trying but it's Friday.


  38. You said:   For me, NLY pays a 10% dividend ($1.20) at $12.35 and I can sell the 2019 $12 puts for $1.55, which is the same as 5 dividends so I get the benefit of the dividend and, even in an IRA, it's the same return on margin and my worst-case is getting an entry at net $10.45.

    Interesting tradeoffs here.   The number of quarters does appear to be about a wash and selling puts does possibly yield a discounted entry.  On the other hand number of shares can increase each quarter using DRIP each quarter if own the stock.   Hmmmmm


  39. Craigs — my favorite penny stock for fun is Glance Technologies, who are based in Vancouver doing something in the mobile payment space, targeting restaurants. They also have a partial interest in CannaPay, which is a mobile payment app for cannabis in Canada.  Symbol GLNNF


  40. Here is GLNNF's investor presentation:  http://www.glance.tech/GET-GlanceTechnologies-Overview2017.pdf


  41. HMNY/QC – I'm dubious about their model but I guess that won't stop them from going higher (like AMZN or TSLA).  Still, it's not in my nature to chase a 100%+ gain in two weeks.  

    Constipated/Mkucs – Lovely.  We'll see if they survive next week's data though, of course, they could use the hurricane as an excuse for everything (earnings too). 

    NWBO/Edro – Sounds interesting and also reminds me of this song (I was there!):

    This is why I encourage my kids to go to concerts – so many of my best memories are from going to concerts with friends!  In fact, we just bought Katy Perry tickets for October – I got the kids seats right by the mosh pit and I took a seat one level up where I can watch them but avoid the crowd.  I don't always go with but I kind of like Katy Perry…  

    NLY/Tangled – As an initial entry (as I'm sure you've noticed),I generally prefer to sell puts.  Big dividend payers don't tend to run up too much on you but they sure can tank if anything goes wrong so I like to get a 10% discount under my belt before committing.  We were heavy on CIM, NLY, CIM, ARR and AGNC when they got cheap and all of them started with put sales and we pounced on the stocks as they entered FU territory.

    McCain says he won't vote for health (lack of) care bill!  Rand Paul is out two and the two women from last time won't flip so YAY!!!! 

    • Chipotle (CMG +0.9%) chief marketing officer Mark Crumpacker tried to rally the troops at the company by telling them that all is well in queso land.
    • "The formal research we conducted prior to rolling out queso nationally showed very different results than what you might assume if you only looked at comments on social media," Crumpacker said in a memo directed at employees.
    • Queso has taken a dramatic role in the debate over Chipotle's same-store sales track and created a wider variance than typical with estimates from analysts.
    • Pro-queso take: Queso seen as a significant Chipotle sales driver (Aug. 29)
    • Anti-queso take: Queso not quite a home run for Chipotle (Sept. 19)
    • The total U.S. rig count fell by one to 935, following last week's decline of eight and the count's third straight weekly decline, according to Baker Hughes' latest survey.
    • The oil rig fell by five to 744 for its fourth decline in five weeks, but gas rigs gained 4 at 190 and one rig is classified as miscellaneous.
    • Crude oil prices are little changed; WTI -0.1% at $50.48/bbl.
    • Apple (NASDAQ:AAPL) CEO Tim Cook tells CNBC he’s “thrilled” during his traditional launch day stop at an Apple Store.  
    • Cook says the LTE Apple Watch 3 has “sold out in so many places around the world” and that the iPhone 8 and 8 Plus are sold out in some locations “but we’ve got good supply there.”
    • Cook also confirmed that the Watch connectivity issue is a software issue fixable with an update and that the issue hasn’t hurt sales of the device.   
    • Apple shares are down 1.35%.    
    • Previously: Apple issues statement on Watch cellular connection issues (Sept. 20)

  42. More unwinding to come:

    You might think paying $600Bn a year in interest payments (at 3%) may not bother the Government but how do you think Corporations will feel paying $150Bn a year on $5Tn?  Doesn't that $75Bn (more than at 1.5%) come out of S&P profits or is there some magic mechanism I don't understand that lets people ignore it? 

    John McCain to the rest of the GOP:

    How about CyberSecurity stocks?  Discuss…

    34% of the Nasdaq and 10% of the S&P looks like it might be ready to roll over:

    This is a funny presentation – we should all do ones for our kids!  

    Rescue dog in mexico has saved 52 people buried by the quake so far.  Show me a cat that can do that (or anything)!  

     

    Image result for drone carrying baby animated gif

    Image result for drone carrying baby animated gif

    World's largest airline commits to to innovate customer experience. Read more about their case:

    May's Brexit speech today:

    We're #1!  

    Catalonia President: "We Will Vote on Independence Whether Spain Likes it or Not"


  43. I like that BTFD tee….and that drone baby…. ;)


  44. Phil – "This is why I encourage my kids to go to concerts – so many of my best memories are from going to concerts with friends! "

    Day on the Green – Bill Graham – RIP -  I caught most of 1973 – 1979, just scroll down and look at the list. Whadda ya gonna do?  Good times my friend, good times, all up in smoke.  Oh dear, I have this sudden urge for my IV and Out.


  45. LB wow, thanks for pounding the table on that one in the webinar !!


  46. skiertahoe:

    Hi!  Long time no see. Hope all is well?


  47. Cool VIX chart:

    All 50 Medicaid directors come out against GOP bill to repeal ObamaCare

    Seriously. This is BANANAS. You couldn't get ALL 50 state Medicaid directors to agree any anything else in health care policy.

    South Park is apparently tackling the NoKo debate:

    Sadly though, this is real:

    This show sounds cool

    Nina’s backstory goes like this: she was created by a team of military contractors to carry out assassinations, and after years in their service, she’s left them and reprogrammed herself.

    The problem is, now that Nina isn’t doing someone else’s bidding, she doesn’t quite know what to do.


  48. Rescue Dog — good one Phil..I am cat person and concede this one gladly.


  49. I vote for Mark W Dealy


  50. https://www.meowingtons.com/

     

    My RagDoll thinks she's a dog…..  ;)


  51. Thanks for asking dclark, tore my knee skiing last winter in the best Tahoe snow year ever.  But other than that all is well.


  52. LB/Skier – We'll see if they can pop $40 this time.

    Cassidy argues his bill protects people with pre-existing conditions, because Trump tweeted it did

    PYONGYANG, North Korea—North Korea’s nuclear ambitions are etched into the landscape of its showcase capital city.

    A giant sculpture of the atom sits on top of a new apartment tower built for nuclear scientists. Atom designs adorn road overpasses, lampposts and building facades.

    Bomb imagery colors daily life. At an orphanage, children play with plastic mobile rocket launchers instead of toy trucks. Shops sell commemorative intercontinental ballistic missile stamps, while a bakery sells cakes featuring an upright rocket, ready for launch.

    A replica of a North Korean rocket stands in the center of a new science library in Pyongyang.


  53. skier:

    May go to Tahoe this winter, or Park City.  Hope snow is good.  Sorry to hear about your knee.



  54. Tahoe – I haven't been in a while, even though I have a place there.  Was just talking to the kids about heading out there in the Spring.  I want them to see this:

    Image result for tahoe snow

    Hopefully it's another good snow year:

    Related image


  55. Indexes getting jammed up into the close – RUT is green, up almost half a point at 1,452, /ES 2,499, /NQ 5,933, 22,300 on /YM.  


  56. /RB 1.666 – someone is playing a joke!  


  57. Mark Hart of Oaktree — advising caution but its not a bubble….  http://www.mauldineconomics.com/outsidethebox/yet-again#.WcVqwtZztDM.email


  58. UBNT recently mentioned here

    somebody sells 1872 Jan19 $30 puts for $3.50 to $3.60

    have a good weekend all!


  59. VIX is actually lower for the day, down to 9.54.  VXX is a blend of contracts – it's flat.

    Have a good weekend, 

    - Phil


  60. Phil, 1020, Latch – All know that due to their nature, Cats are not field rescue animals by trade. Canines? Anubis, Bau, Fenrir, Kerberos, Coyote, Xolotl, Kitsune, The Morrigan, Set, Wepwawet, and yes God is Dog backwards.

    Felines? Bastet, Mafdet, Tefnut, Mau, Mihos, Sekhmet, Mekal, Pakhet, Menhit, Matit, Mut, Ai-Apaec, Li Shou, Ovinnik, God L, Ix Chel, Cit Chac Coh, Barong Ket, Lamassu, all deities. Durga rode Dawon, Ceridwen was attended by cats, Thor gave Freyja a chariot pulled by two giant gray cats.

    My favorite, Hecate the DOG god, in order to escape the typhon, assumed the form of a cat, and then there is The Sphinx.

    Felines never have masters or owners, but they will rescue their faithful staff and family. See here and here (some duplication.)  For example, my IV almost fell, that darn cat snagged it for me and Out.


  61. The Bubble Investors Least Expect


  62. Surging stock market powers U.S. wealth to $96.2 trillion







  63. Phil

     

    Did we close our position on?

     

    CIM

    STWD

     

    Thanks


  64. Craigsa – love the request/call out.  Who knows what surprises may be in the collective experience? No bargain go-to gambles for me just now. My focus is all about shorts (KHC has been good this week) of late. Most recent longs for kids though in last quarter has been TCEHY, AMC, and XT.



  65. Felines and Canines? In our haste we forgot and lest I offend my Roman brothers… 

    Lupa Capitolina, the she wolf who after rescuing them from drowning in the Tiber, suckled the twins Romulus and Remus.  Ah Rome, this comes to mind and Out.


  66. Phil will this Indian summer be a help to Nat gas prices or a hindrance in your opinion?


  67. TSLA – doxes 'whistleblower' customer…  https://twitter.com/montanaskeptic1/status/911712724425592839


  68. "Phil will this Indian summer be a help to Nat gas prices or a hindrance in your opinion?"

    Due to increased bean consumption during Indian Summer, NAT gas would be more plentiful and Out.


  69. Lock him up:

    http://www.politico.com/story/2017/09/24/jared-kushner-private-email-white-house-243071

    Presidential son-in-law and senior adviser Jared Kushner has corresponded with other administration officials about White House matters through a private email account set up during the transition last December, part of a larger pattern of Trump administration aides using personal email accounts for government business.


  70. Good morning!

    Went away for the weekend, nice and relaxed but really could have used another day….

    Oil spiking over $50 and Brent $57 – the gap is widening.  Fortunately we dipped back to $50.40 last and we got a chance to reduce and now back to 4 short at $50.80 avg.  

    This is why we like /NG below $3

    CIM/QC – Qe closed them in June of last year!  STWD too.  Those were trade ideas from Vegas 2015!

    /NG/Craigs – I know I put my air conditioning back on – should be a bit more draw than usual.  Heating is never an issue this time of year so no negative so it can only be positive or neutral.

    Indexes flat so far.  Other countries flattish too.