Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Monday Market Mania – Suicide Missions

Image result for trump kim jong un cartoon"You're on a suicide mission."

"No, you're on a suicide mission."  "Rocket Man" "Dotard".  That pretty much sums up the weekend tweet wars between fearless leaders Donald Trump and Kim Jong Un, who both finally found someone to play with that understands them.  Nort Korea's foreign minister told the UN on Saturday that North Korea "will strike premptively if needed" and the US countered by sending bombers right to the edge of North Korean airspace in a massive escalation of events not seen since the Cuban Missile Crisis – yet the markets are just shrugging it all off this morning.  

“None other than Trump himself is on a suicide mission,” Ambassador Ri said through the UN’s simultaneous translation. “In case innocent lives of the U.S. are lost because of this suicide attack, Trump will be held totally responsible.”

“The very reason the DPRK had to possess nuclear weapons is because of the U.S."

Image result for trump kim jong un cartoonEver the diplomat, Trump followed that up Saturday night on Twitter, posting: “Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won’t be around much longer!”  Trump's bombers, of course, flew out of Guam – effectively making North Korea's poiint that the base is a direct threat to them.  

North Korea’s state media issued a statement Saturday from the National Peace Committee of Korea describing Trump as “wicked” and “a rabid dog.”  U.S. analysts now estimate that North Korea may have as many as 60 nuclear weapons, according to a Washington Post report.  

Of course, Trump is just following the grand tradition of name-calling practiced by all our greatest leaders, remember when Kennedy called Kruschev "Little Nicky"?  No, of course, not, becasue President Kennedy wasn't a moron!  

I know, it's almost hard to remember what a real President sounds like these days, right?  So, it's easy to see why Oil (/CL) is blasting higher this morning ($51.35) and we're 4 short at $50.80 avg – so down about $2,000 so far and adding 2 more short here puts us in 6 short at $50.97 avg).  We had several small drops (0.10) to $50.40 on Friday's play for small gains but the contracts we left open for the weekend burned us in this morning's sharp pop.  

Not only are we under the threat of Nuclear War breaking out at any moment (who's less impetuous, Trump or Kim?), but Facism is on the march, with the far right parties scoring significant progress in elections in Germany and New Zealand over the weekend.  While the US equity traders seem completely oblvious to the danger.  Gold (/YG) is still up around $1,295 but Silver (/SI) is down at $16.90 and makes a nice long play down here.  The Dollar is keeping them down at the moment but that's OK as we love the Dollar and, if you read the Friday Morning PSW Report (or Wednesday's) you know we were long at the 91.50 line and we just hit 92.40 there for $900 per contract gains – again – you're welcome! 

Speaking of gold, one of my favorite penny stocks, Northern Dynasty (NAK), will be speaking at the Denver Gold Forum this week.  We have been playing this stock since it was less than 0.50 at PSW and even my kids have this one as they are sitting on a massive gold reserve and at, in theory, have only been held back by environmental regulations which, of course, Trump is nuking.  

To be very clear, this is a casino stock and we already cashed half out at $2 and half out at $3 and then doubled down at $1 and then half out at $2 again – and that was just this year!  So it's a free ride for us and I generally hate to talk about small stocks but this one is so interesting and gold is likely to pop so I'll just say, at $1.88, they are worth checking out.  On a more conservative basis, our Trade of the Year was Wheaton Precious Metals (WPM) and you can't get our trade anymore but, back at $19.23, you can play the following:

  • Sell 5 WPM 2019 $20 puts for $3.30 ($1,650) 
  • Buy 10 WPM 2019 $17 calls for $4 ($4,000)
  • Sell 10 WPM 2019 $22 calls for $2 ($2,000) 

That's net $350 on the $5,000 spread that's $2,230 in the money to start so a very good chance to win as long as silver doesn't collapse over the next 16 months.  The upside potential on the trade is $4,650 (1,328%) if WPM is over $22 in Jan, 2019.  The put sale is aggressive and obligates you to buy 500 shares for $20 amd we're 0.77 away from $20 but I have faith.  If assigned, you own $10,000 worth of WPM for $10,350 (the $350 you laid out, presumably lost as well).  Ordinary margin on the trade is just $2,058 though, so a very margin-efficient way to make $4,650.

On the more conservative gold side, we like Barrick Gold (ABX) at $16.30 as the lowest-cost producer.  As of last December's report, ABX had 85.9M ounces of gold in the ground, not to mention 11.1Bn pounds of copper but the Gold is more interesting, at $1,295 an ounce that's $111,240,500,000 worth of gold yet you can buy the whold company for $18.5Bn.  

Of course, gold doesn't do them any good until they mine it but ABX has the lowest extraction costs in the business, down around $900 so they make $400 an ounce in profit and that times 85.9M ounces is $34.4Bn and we're not even counting the copper that's a "waste product" of their gold mining.  What's cool about ABX is their low-cost extraction makes them a good candidate to weather a downturn in gold while an upturn in gold quickly drops right to their bottom line.  We already have ABX in our Long-Term Portfolio as well as our Options Opportunity Portfolio but, as a new trade, I like:

  • Sell 10 2020 $15 puts for $2.20 ($2,200) 
  • Buy 15 2020 $15 calls for $4 ($6,000) 
  • Sell 15 2020 $22 calls for $1.70 ($2,550) 

That puts us in ABX for net $1,250 on the $10,500 spread so the upside potential is $9,250 (740%) if ABX is over $22 in Jan, 2020.  The downside is being assigned 1,000 share of ABX for $15 ($15,000) plus the loss on the spread would be net $16.25/share – which is pretty much the current price so it's a bit aggressive but, as I said, this is a great long-term stock.  Margin on the put side is a very skinny $1,424 so another very efficient trade.

It's a busy data week, highlighted by an even dozen Fed speeches, including Yellen tomorrow at lunch in Ohio.  The Fed National Activity Index weakened in August and we're wating on the Dallas Fed but that's likely to be down due to hurricanes and Consumer Confidence is iffy tomorrow and Durable Goods on Wednesday should be a miss and GDP on Thursday should be revised lower so, needless to say, we're still shorting the indexes!  

We also still like Friday's long play on Volatility (VXX) and Thursday's hedge using the Russell Ultra-Short (TZA) and enjoy the free trade ideas while they last as the earnings are starting to come in and PSW does not give out free trade ideas during earnings season.

It's going to  be an exciting week – be careful out there!  

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Phil/SI- Nov contract?


  2. Phil/SI- I should have asked Sep or Oct?


  3. There is no stopping the Russell!


  4. While Trump takes time to tweet about the NFL and NBA (not going well for him), people in Puerto Rico which is part of the USA are suffering greatly and no one who can do anything seems to care that much! No visit from El Presidente so far…


  5. Oil back to a $6.35 spread, brent dragging us along. Those poor producers, no matter how much they suck out of the ground the traders can't get enough


  6. Speaking of oil, in the scheme of things, $50 will look expensive in 20 years:

    https://www.bloomberg.com/news/articles/2017-09-21/how-electric-cars-can-create-the-biggest-disruption-since-iphone


  7. I guess we keep on buying dips since the market won't ever go down again:

    http://theirrelevantinvestor.com/2017/09/23/new-highs-should-be-bought-not-sold/

    Warren Buffett has been investing for nearly eight decades and has seen thousands of new highs and several market tops. One of the biggest drivers of Buffett’s success, aside from his early stock picking prowess and later ability to allocate capital, is the fact that he never sold into the teeth of a bear market. He always expected the future to look better than the past, and this is a view that he still clings to.

    This week  Buffett said he expects the Dow will hit one million in 100 years. It would need to gain 4,374% to get there, which sounds ridiculous, until you realize that would require less than 4% a year to get there. In the 76 years since Buffett bought his first stock in 1941, the Dow has increased over 20,000%, or 6.4% year. The future doesn’t have to be as good as the past for the Dow to hit seven digits.

    Buying these 2117 1M calls on the Dow for my grandchildren!


  8. Good Morning.


  9. Good morning… LB moves above $40..now, hopefully, trends higher from here into earnings and beyond as comp sales recover on a YoY basis. 


  10. Good morning!

    AAPL is dragging the Nas down as more reports come out about IPhone Weakness:

    • Digitimes sources report that Apple (NASDAQ:AAPL) told iPhone component suppliers to slow deliveries.
    • Component suppliers are currently shipping about 40% of the planned quantities for the initial production of the premium smartphone.
    • The number comes in below the 60% of supplies ordered during the initial run of the iPhone 7 in 2016. The remaining 40% was ordered within a few months.
    • Sources say that Apple lowered shipping supplies to gauge iPhone 8 sales and iPhone X pre-orders, which begin on October 27.
    • Sales of the iPhone 8 and 8 Plus were lower during the first three days than previous models, according to Localytics data.
    • The two models together formed 0.7% of the iPhone market during those days, marking the lowest share performance since the iPhone 5s in 2013. The iPhone 8 Plus made up 0.4% of the total.
    • Important note: The Localytics figures don’t represent actual sales numbers but rather the devices using one of the 37K apps integrated with the data company’s SDK.
    • Apple shares are down 1.28% premarket. 
    • Previously: Tim Cook "thrilled" with iPhone, Watch launch day sales (Sept. 22)

    Apple's stock sinks toward 8-week low after report raises concerns over iPhone X demand

    Apple's iOS 11 AR Not Ready For Prime Time

    Apple's European Suppliers Pounded as Bad Reviews Haunt iPhone September Launch

    [$$] Sales Softness for iPhone 8 Hits Asia Suppliers

    Same as it ever was:

    The iPhone 6S has been a major disappointment for Apple – Apr. 27 …

    Page 10 – Apple iPhone 6 sales disappoint, shares plummet 7 …

    iPhone 7 – Apple sales are NOT as good as hoped, report claims …

    iPhone 6s sales could be a big disappointment for Apple investors

    Apple Reports Big Profits, But iPhone Sales Disappoint Apple Inc …

    iPhone 6 issues – Apple disappoints | Official Apple Support …

    Priced at Rs 39,000, new iPhone SE disappoints Indian fans – The …

    iPhone SE First Weekend Online Sales Disappoint Compared To …

    Five disappointing things about the iPhone 5S – CNET

    /SI/Ravi – I just play the front-month for a quick pop – WPM is my long-term play.

    Big Chart – What a nice V on the RUT!  

    Image result for everything louder than everything else

    Puerto Rico/StJ – Yes, it's amazing how poorly they get treated.  

    Oil traders/Mkucs – It's early in the contract cycle, they can afford to mess around.  

    Electrics/StJ – That's a very slow ramp-up. The Model S came out in June 2012 so 5 years to the Model 3 with only one company pushing.  Now the Big Boys are in the race with all their assembly lines and global logistics already in place – the next 5 years will not look like the last 5 years at all!  

    Buffett/StJ – Talking his book at this point.  Buffett bought a ton of COP right at the top of the Bubble in 2007 and he bought 2 failing Irish banks for $277M that he unwound for $27M in that crash too.  So Buffett can be as overly optimistic as anyone else.  

    It's interesting, by the way, that Berkshire didn't fall as much as the S&P at the time because Buffett not only did a massive buy of his own stock but told investors where the floor was – to get them to buy as well.  Now, looking back, people totally forget the circumstances and think Berkshire outperformed the S&P on its own merits.  

    I think Google should have a feature where you roll the date back to whenever you want and then all the news and results you get are as of that date.  That way, you could get a good picture of what was actually happening on a past day in history.

    LB/Learner – That was the offset to last week's TZA hedge.  


  11. Both FTR, and my choice CTL, up nicely this morning.

    CTL is yielding 11%, and all indications are that their merger with LVLT will take place sometime mid to late October.  If that merger does take place as expected, that dividend will be very secure.


  12. Nat gas looks good here near that rising lower trend line… still like UNG? What's your favorite non futures play…


  13. Phil/TF- are trading in and out to bring avg up or just holding for now?


  14. FTR/Albo – Identical moves this morning.

    Frontier Communications Operations in Florida Return to Near-Normal Levels Thanks to Reliability and Resiliency of FiOS All-Fiber Network

     

    “The resiliency of Frontier’s buried all-fiber network was a significant differentiator in the market,” said Melanie Williams, Frontier’s Senior Vice President for Operations in Florida. “Where power was available, the services of the majority of Frontier’s FiOS-based customers remained operational despite Irma’s impact. Frontier customers who lost power saw their FiOS services automatically restored once electricity was available.”

    Frontier’s central office and remote office facilities remained online throughout the storm, either because electricity was available or generator power kicked in, added Williams.

    “For customers on our copper network with traditional corded phones, voice service continued to work regardless of power availability,” said Williams.

    Indexes zig-zagging up and down this morning.  Dallas Fed was a big winner:

    • Dallas Fed Manufacturing Survey: +17.0 vs. +12.0 consensus and +17.0 prior.
    • Production: +19.5 vs. +20.3 prior.
    • Capacity Utilization: +15.8 vs. +12.2 prior.
    • New Orders: +18.6 vs. +14.3 prior.

    Logically, that indicates the storm caused little disruption so, logically, why should oil be so high?

    UNG/Mkucs:

    Submitted on 2017/09/15 at 3:11 pm

    • UNG – Will this trade ever pay off?  I still like it long-term and I'd hate to miss it if it finally pops so we'll just leave it alone.  

    /TF/Ravi – Well we just hit 1,455 so I DD'd to 20 at 1,445 avg but I'm dying to get back to 5 even, as this has been painful and crazy.   


  15. North Korea now says Trump's tweets are a declaration of war and they now have the right to shoot down US bombers – even if not directly over their air space.  What a F'ing World we live in!  


  16. Dumb Azz may want a war to 'distract' from an inevitable impeachment…..


  17. maybe some firms did have a sell button programed… or it's just the bots seeing "declaration of war"


  18. Not to say too much about politics, I do have to enter one little point, following the above remarks.

    Yesterday we did have the German elections and to no surprise for me, the right wing party AVD became the third strongest party. Even that it was to all others dislike, the party gain the same amount of votes in the east part of Germany as the CDU, leading party.

    Principal the party is opposed to the overwhelming inflow of Islam as well as uncontrolled immigration. These results obviously to my opinion was the fear at the present situation of many Germans.

    But to compare the AVD to the Trump party is just a plain insult to this party. No one wants war here, we seen enough of it. I trust nino Dumbo has never been or seen close up war, possible only played and wants to continue playing war games. The man is surely getting out of control, and submits US solders as Pawns on a chess board.

    It is surely time to stop this Dumbo.


  19. Two Key Indicators Show The S&P 500 Becoming The New "Cash"

    Spain Moves to Block Catalonia Vote but Independence Push PersistsSecessionists press on as Madrid’s efforts appear to lessen turnout prospects for a vote it deems illegal.

    Iran Tests Ballistic Missile Amid U.S. TensionsTest comes days after U.S. President Donald Trump sharply criticized Iran in U.N. address.

    Trump Says He Wants 15% Corporate Tax Rate Despite Plan for 20%. (videoRepublican tax negotiators are targeting a corporate tax rate of 20 percent, according to two people familiar with the matter — but there’s at least one potential obstacle: President Donald Trump. “We’ll see what happens, but I hope it’s going to be 15 percent,” Trump told reporters Sunday as he prepared to return to Washington after a weekend in New Jersey. The current corporate tax rate is 35 percent. Meanwhile, the group of administration officials and congressional leaders that’s planning a framework for tax legislation is also expected to recommend cutting the top individual tax rate to 35 percent, down from 39.6 percent, according to two people familiar with the matter.

    The Politicization of EverythingEverybody loses in the Trump-NFL brawl over the national anthem.

    As Trump's Feud With NFL Escalates, Patriots Owner Says He Is "Deeply Disappointed" By President's Comments

    NASCAR Team Owners Say They Won't Tolerate National Anthem Protests

    Ravens, Jaguars players kneel during national anthem after Trump's attacks on NFL

    Sen. Collins Says She Will Probably Vote ‘No’ on Latest GOP Health-Care Bill‘It’s very difficult for me to imagine a scenario where I would end up voting for this bill”.

     

    Leveraged Loans Are Back and on Pace to Top Pre-Financial Crisis RecordsInvestors worry this could pressure financial markets if global economic expansion fades.

    Total in growth mode, seeks 5% annual oil production growth through 2022

    • Total (NYSE:TOT) says in an investor presentation that it is entering a new phase of “profitable growth” and expects to extend its 5%/year oil production growth target to 2022, as it breaks away from the belt-tightening period that followed the 2014 oil price crash.
    • “Today we are in a more growing and ambitious mode,” says CEO Patrick Pouyanné, while TOT still aims to achieve $3.6B in savings by the end of this year and increase targeted savings on operations from $4B in 2018 to $5B in 2020.
    • TOT sets its capital investment target, excluding resources acquisition, at $13B-15B during 2018-20 from previous guidance of $14B-$15B in 2017.
    • General Motors (GM +0.8%) is laying off the overnight shift at a Tennessee sport-utility vehicle plant, idling hundreds of workers due to "moderating" sales.
    • That's troubling if it shows a broader car-market slowdown has extended into popular SUVs.
    • The plant at Spring Hill, Tenn., makes the GMC Acadia and Cadillac XT5 crossover SUV models. About 1,000 people work the overnight shift, though some will likely shift to other parts of the operation.
    • “Although crossovers now make up a larger share of the automotive industry, overall volumes are moderating,” GM said in a note to employees. “We believe the best way to react … is to reduce output.”
    • Investor trust in Elon Musk has taken a hit after the U.S. Justice Department yesterday said Tesla's (NASDAQ:TSLA) SolarCity agreed to pay $29.5M to settle allegations that it overstated the costs of its solar installations to receive inflated grant payments, Charley Grant writes in WSJ's Heard On The Street.
    • Solar panels are a fairly small part of TSLA's business but the company's total liabilities exploded to nearly $20B after last year's SolarCity acquisition, which was approved by investors despite Musk's conflicts as the solar firm's chairman and largest shareholder.
    • In any case, payments from the government grant program at the center of the allegations will decline in coming years: The investment tax credit is worth 30% of qualifying solar costs through 2019, but in 2022 it falls to 10% for commercial systems and zero for residential systems.
    • TSLA is up 67% YTD "because investors believe fully in Musk’s vision and ignore the fragility of the balance sheet. That trust took a $30M dent with [the] settlement, and investors should wonder what could be in store for the stock if confidence in Musk were to waver even slightly," Grant writes.

    Amazon(AMZN) is making huge physical bets in defiance of the retail apocalypse

    Target raises minimum wage to $11 per hour

    • Target (NYSE:TGT) announces a hike in its minimum hourly wage to $11 per hour in October from a current level of $10 per hour.
    • The retailer also commits to boosting the minimum hourly wage to $15 by the end of 2020.
    • The increase will also apply to the more than 100K hourly team members that Target is hiring for the holiday season.
    • TGT -0.75% premarket to $58.55.
    • Source: Press Release

    Reuters: Toshiba chip unit deal delayed by Apple

    • Reuters sources report that Toshiba (OTCPK:TOSBFOTCPK:TOSYY) has told its lenders that the chip unit deal isn’t signed yet because Apple hasn’t agreed on key terms.
    • The winning chip bidder was a consortium containing Bain and Apple. 
    • Toshiba needs to finalize the sale as quickly as possible to leave enough time for antitrust approvals before full-year earnings report in March, which could trigger a Tokyo delisting without the sale. 
    • Toshiba told lenders about Apple to explain the delay and to request a roll over for $6.1B in credit lines expiring at the end of this month.  
    • Previously: Toshiba releases chip unit sale details, plans to continue with Fab 6 (Sept. 21)

    Intel announces eighth-gen Coffee Lake desktop processors

    Image result for artificial intelligence
    • Intel (NASDAQ:INTCannounces its eight-generation Core processors for desktops, adding to the line started with the laptop processors last month.
    • The processors offer more cores than previous models and Intel says the chips are 32% faster than the last gen and 65% faster than a three-year-old machine. 
    • While the eight-gen Core laptop processors were based on the seventh-gen 14+nm node Kaby Lake, the desktop chips are on the 14++nm Coffee Lake node. 
    • The six models start with the i3-8100 with four cores and four threads and 3.6GHz clock speed with a $117 price tag. The line tops out at the six cores, 12 threads i7-8700K that clocks at 3.8GHz with a boost up to 4.7GHz and a $359 price tag. 
    • The eighth-gen Core desktop processors launch on October 5.  
    • Previously: Intel launches 8th-gen U Series processors (Aug. 21)
    • Microsoft (NASDAQ:MSFT) kicks off its Ignite conference today in Orlando, Florida with some major announcements.
    • Expanding enterprise: Microsoft launches the 365 F1 software bundle for front-line workers like cashiers, factory workers, and truck drivers.
    • The bundle includes StaffHub, a newer app for digital shift management with forthcoming task manager and time clock updates, and old standards Office 365, Windows 10, and the Enterprise Mobility and Security suite.
    • Microsoft will also pair with Acer, HP, Lenovo, and Fujitsu to create devices better priced for front-line line workers. The product pricing will start at $275. 
    • On the more traditional side of the enterprise business, Microsoft announces that the Slack-esque Microsoft Teams will replace Skype for Business as the enterprise team collaboration tool of choice. Skype for Business will still exist and get an update next year, but Teams will offer a faster, more streamlined communication method that can play nice with Skype when desired.  
    • Machine learning tools: Microsoft launches the machine learning tools the Azure Machine Learning Experimentation service, Azure Machine Learning Workbench, and the Azure Machine Learning Model Management service. 
    • The Experimentation Service helps developers quickly train and deploy experiments with full versioning. 
    • The Workbench desktop client is a lifecycle development control panel and the Model Management service helps developers and data scientists develop and manage models nearly anywhere supporting a Docker container such as Azure Container Service. 
    • Cloud updates: Microsoft puts its Cloudyn acquisition to work with the Cloudyn-based Azure Cost management service coming free to Azure customers. 
    • Azure also gets reserved instances, which reward longer-term contracts with on-demand instance discounts of up to 72%. Amazon Web Services has offered reserve instances for years but Microsoft ups the game by offering an instance cancellation or refund at any time whereas Amazon contracts are harder to offload before the end date.    
    • AWS held 34% of the cloud infrastructure services market in Q2 with Azure at 11%, according to Synergy Research Group.    
    • Previously: Microsoft confirms acquiring cloud monitoring startup (June 29)

    Sprint lower on reports SoftBank will take market value in merger

    • Sprint (NYSE:S) has reopened for the week 4.8% lower after reports that its owner SoftBank (SFTBY -0.2%) would forgo a premium and take market price in a stock-for-stock merger with T-Mobile (TMUS +0.1%).
    • That comes in an environment where T-Mobile majority owner Deutsche Telekom (DTEGY+0.3%) had told SoftBank that Sprint should be valued at a significant discount to market value, Bloomberg reports.
    • Meanwhile, with due diligence under way, the two hope to reach a deal by the third week in October, CNBC says.
    • Valuing Sprint at close to market value would mean SoftBank owning 33% of the combination and Deutsche Telekom about 39%.

  20. HMY – Phil,

    Morning Phil.  You did not mention your oldie HMY with NAK and ABX.  Are you still positive on it?


  21. Sold 1/3 of UVXY position that I put on last week.  Up 1.35.


  22.  Why is /RB running up so much today don't see any special news to support other than some POEC noice …


  23. hmm typo 'OPEC noise" 


  24. /RB …….all a big scam……..watch it crash tomorrow.


  25. PCLN – Phil, end of July you helped me out on a PCLN position that was causing me some concern. I ended up with the following based on your advice (for my sins, I took 50% of your advice, and ignored the other 50%! – which was to sell the Jan 18 $1850 puts). The position I adjusted to was:

    sell 5, Jan 18 $2000 calls for $141; buy 10, Jan 19 $2000 ($270) / $2200 ($180) BCS – for net $90

    The short Jan 18 calls have dropped to $33 – and the net of the Jan 19 BCS is $58.

    We said to touch base when PCLN drop 5% from its price of $2050 (end July) – its now closer to a 10% drop, and I still have the opportunity of selling puts – but in no hurry to do so. Should I leave alone until the price of the long leg of the 2019 BCS drops to what I paid for the spread ($90) or is there a cunning plan to take advantage of this drop?


  26. Phil,

    What are your open futures positions?


  27. HMY/Jeddah – I was just mentioning 3, didn't want to do 4.   Gold and silver shot up this morning too.  

    HMY is still nice and cheap and, as a new play you can:

    • Sell 20 2019 $2 puts for 0.55 ($1,100) 
    • Buy 50 2019 $1.50 calls for 0.65 ($3,000) 
    • Sell 50 2019 $2.50 calls for 0.35 ($1,750)

    That's net $150 on the $5,000 spread with $4,850 (3,233%) upside potential at $2.50 in 16 months.  Worst case is you own 2,000 shares @ $2 ($4,000), which is the current price. 

    /RB/Youri – Up with oil, no particular reason otherwise.  Oil is up on escalating war talk and not just with NoKo, Trump has been pissing off Iran too.  And it's Monday – Monday's are generally low-volume BS days.  

    And what Ult said!  

    PCLN/Winston – I think the target on the puts was to roll the short puts (which you didn't take – so better actually) to the 2019 $1,500 puts even and those puts are now $75 and still almost 20% out of the money, so still a good sale if you want some cash but no hurry as the rest is working.  I'd certainly keep a tight stop on the calls but $33 is $33 so no reason to kill them if you don't have to.

    Ideally the short calls expire worthless and then you sell 5 of something else (and the 5 puts) and use that money to roll your 2019 $2,000s (now $150) to the 2020 $1,750 ($350)/1,950 ($250) bull call spread so another $50 off the table and a 10 $200 spreads ($200,000) with 5 short new whatevers and 10 short 2019 $2,200s (now $90) and I'd then put a stop on 5 of the $2,200s at $100 which would leave you with a regular 10 contract spread (5 at $20 and 5 at $45) and the 5 short puts.  And that's all WITH taking $50,000 off the table!  

    Futures/Japar – Well, at 10:48 I said this:

    September 25th, 2017 at 10:48 am | (Unlocked) | Permalink

    /TF/Ravi – Well we just hit 1,455 so I DD'd to 20 at 1,445 avg but I'm dying to get back to 5 even, as this has been painful and crazy.   

    And then this happened:

    So guess what I have?  wink

    Oil is hitting $52 and I still have 6 short at $50.97 so not good at $52.10 and I'm going to add 4 more to avg $51.42 but I'll give up and take the $6K loss if we close above $52 – better to live to fight another day.!  


  28. PCLN – Phil / Thanks – I like that plan. But are you suggesting that I make that roll now – or what until closer to expiration of the Jan 18, $2000 short calls?


  29. PCLN/Winston – Just keep an eye on the relative costs and then there's no hurry as long as the net cost is reasonably in your ballpark.  I'd certainly rather wait until earnings (11/7ish)before doing anything drastic. 

    Stocks slightly lower as Apple, Pyongyang weigh

    • North Korean Foreign Minister Ri Yong calls the recent comments from U.S. President Donald Trump a declaration of war and says all options are on the table for the regime.
    • The shots from Pyongyang are being attributed to contributing to today's dip in stocks (Bloomberg is quick to note that knee-jerk market reactions to North Korea threats have been very short-lived in the past), although the weakeness in the tech sector looks to be more of an Apple event. Energy stocks are higher on the day, including Dow 30 components Exxon Mobil and Chevron.
    • Previously: Apple slows iPhone X supplier orders; soft initial sales for iPhone 8 models (Sept. 25)

    U.S. oil exports to meet 5% of non-U.S. demand by 2022, EPD exec says

    • U.S. crude oil exports will increase to meet 5% of global demand by 2022, as refiners seek more low-sulfur crude to meet stricter rules for cleaner fuels, an executive from Enterprise Partners Partners (EPD +1%) says.
    • U.S. oil exports may rise to ~4M bbl/day in five years, a 4x jump from this year, while global oil demand excluding the U.S. could rise to 73M bbl/day, up from 65M currently, says EPD Senior VP Brent Secrest.
    • Demand for light, low-sulfur, or sweet, crude is set to rise as countries push refiners to produce cleaner fuels, as highlighted by the Internationals Maritime Organization's new rules tightening the sulfur requirement for bunker fuels to a maximum of 0.5% from the current maximum of 3.5%.
    • EPD currently exports ~100K bbl/day of crude from the U.S. Gulf Coast.
    • Albemarle (ALB -3.3%) is lower after Baird downgrades shares to Neutralfrom Outperform with a $135 price target, believing ALB is positioned to capture growth in the lithium market but near-term execution is largely priced into the stock.
    • Baird says ALB's new technology could enable greater lithium volumes but may lead to multiple contraction if replicated by competitors.
    • The firm also thinks ALB has benefited from positive headlines about lithium demand growth, and negative headlines – expansions by competitors, flattening price curve, etc. – could impact shares with so many momentum driven investors now in the stock.
    • The auto parts and auto retailer sectors are seeing some buying action after Genuine Parts (GPC +5.9%) ponies up for Alliance Automotive Group.
    • Notable gainers off the M&A buzz include O'Reilly Automotive (ORLY +3%), Advance Auto Parts (AAP +2.5%), Essendant (ESND +1.7%), AutoZone (AZO +1.6%), Stonridge (SRI +2.1%), China Automotive Systems (CAAS +2.9%), Gentherm (THRM +2.6%), American Axle & Manufacturing (AXL +2.1%), Monro (MNRO +1%), Allison Transmission (ALSN +1.7%), Lydall (LDL +0.9%), Standard Motor Products (SMP +0.9%) and Modine Manufacturing (MOD +0.8%).
    • Previously: Genuine Parts to acquire Alliance Automotive Group (Sept. 25)

    AMD, Nvidia fall after Intel processor reveal

    • Shares of Advanced Micro Devices (AMD -3.3%) and Nvidia (NVDA -3.9%) down this afternoon following Intel’s (INTC -0.3%) desktop processor reveal this morning.  
    • Intel boasts about the gaming performance of the eighth-gen Core processors in the press release, calling the i7-8700K the company’s “best gaming desktop processor ever.”
    • Intel says the new generation offers 25% more frames per second on demanding games like Gears of War and up to 2x faster mega-tasking of games and streams than three-year-old systems.  
    • Previously: Intel announces eighth-gen Coffee Lake desktop processors (Sept. 25)

    Football ratings inconclusive after Trump's boycott call

    • Fresh off President Trump picking a fight over the weekend with the National Football League — calling for a boycott to games over players' political protests — ratings Sunday were mixed, suggesting other factors might be at play.
    • Sunday night ratings on NBC (CMCSA -0.8%were slightly down, with 11.6% of households tuning in to the Oakland Raiders-Washington Redskins game, vs. 12.9% in last year's week three matchup between the Chicago Bears and Dallas Cowboys. This year's game drew a 20 share vs. last year's 21.
    • Meanwhile, CBS (CBS +2.1%) says its Sunday games gained 4% Y/Y to an 11.9 overnight rating. It had a more competitive game than NBC, as Green Bay went to overtime to beat Cincinnati 27-24.
    • The NFL aired a one-minute "unity" ad in prime time last night and plans to run it again during Monday Night Football
    • Chinese internet regulators have hit Tencent (OTCPK:TCEHY -3.8%), Baidu (BIDU -3.2%), and Weibo (WB -4.8%) with the maximum fines allowable under new cybersecurity laws.
    • The Wall Street Journal reports that the fines were due to banned content including fake news and pornography.
    • Fine amounts weren’t specified by the law says network operators can receive an up to $75K fine and have operations paused or licenses canceled.
    • Fined parties include Tencent’s WeChat app, Baidu’s Teiba message board, and the microblogging site Weibo that’s partly owned by Alibaba.
    • Previously: China investigates internet giants (Aug. 11)

     

    • The Korea Herald reports that Apple’s (NASDAQ:AAPL) 2018 lineup of iPhones could include a larger LCD model measuring over 6 inches with the panel coming from Japan Display.
    • The new device joins the previously rumored 5.8-inch and 6.46-inch OLED models with panels supplied by Samsung.   
    • Apple likely won’t switch to all OLED panels until 2019, which is when LG should have the production capacity to help minimize Apple’s dependence on Samsung. 
    • In current iPhone sales news, a KGI Securities analyst believes pre-orders for the iPhone X could pass 50M units
    • Analyst Ming-Chi Kuo notes that the X is the first complete form factor revamp since 2016 and could prompt a “super cycle.” 
    • Kuo expects Apple to ramp up iPhone X output in late October but doesn’t think demand will match supply until next year. 
    • The iPhone X pre-orders start October 27 and the device launches on November 3.     
    • Previously: Apple slows iPhone X supplier orders; soft initial sales for iPhone 8 models (Sept. 25)

  30. Phil,
    Have you seen Dave Fry’s Twitter comments
    lately? He seems pretty bitter. I liked his
    technical analysis and charts better..


  31. Not so meaningless Monday… seems Trump wants to push Kim over the edge. I think he does want a war to cover his problems, like bombing 7 countries isn't enough… lord help us.


  32. Dave/Randers – I think he's sick.  Site pretty much has been offline all year.  I reached out and got a non-committal response from one of his kids.  That was months ago. 

    Trump/Mkucs – Well, it's working, we haven't even mentioned Don Jr using his personal Email for government business or the accelerating pace of the Mueller investigation

    TEVA/Jabob – That's a pretty strange way of consolidating:

    Well, actually VRX kind of did that too:

    • China's government will implement some of its strictest cuts to steel production this week as it seeks to diminish winter pollution and further consolidate a fractious industry.
    • The reduction will cut in half the rate of steel production in the northeastern city of Tangshan, the largest steel-producing city in China, which ultimately will affect 20M metric tons of steel, the equivalent of ~7.5% of national annual production, and three other key steel-producing cities of Shijiazhuang, Anyang and Handan will announce similar cuts.
    • Meanwhile, prices for low-grade iron ore, one of the key ingredients for steel, have plunged more than 18% in the past month
    • Amazon Video (AMZN -2.2%appears to have cut 4K video prices to keep up with Apple’s price reduction paired with the Apple TV 4K launch.
    • Amazon formerly charged upwards of $30 to purchase 4K titles but now lists the titles between $5 and $19. Apple plans to charge $19.99. 
    • The original Fire TV recently went out of stock, prompting rumors that Amazon is preparing to release its own 4K HDR model. 
    • The Fire TV’s streaming media market share was 24% in Q1, up from 16% in the prior year’s quarter. The Apple TV market share fell from 19% to 15% in that same period. 
    • In other Amazon news, former VP Joe Biden is bringing curated news to Amazon’s Alexa and Google Assistant through Biden’s Briefing
    • The three to 15-minute briefings will feature Biden’s favorite stories through media partners including AxiosBloombergWired, and MSNBC. Voice actors will narrate the article content while Biden provides the intro, outro, and comments.      
    • Previously: Amazon drops Fire TV from store, new products coming soon? (Sept. 13)
    • Offshore drillers are surging after UBS analysts upgraded the sector to Buy from Neutral and several prominent names in the group, pointing to signs of improving demand for oil rigs and stabilization in the sector.
    • UBS sees utilization for drillships and jack-up rigs improving slightly next year and followed by greater demand growth in 2019-20, after weak oil prices have weighed on demand for offshore drilling services for three years, and believes a normalizing of oil prices in 2020-21 as well as measures taken to push out debt payments bolster the case for the companies.
    • The firm upgrades Transocean (RIG +7.9%), Rowan (RDC +5.4%), Ensco (ESV +9.4%), Noble Corp. (NE +9.8%) and Diamond Offshore (DO +10.9%) to Buy from Neutral while raised its forecasts for 2018 earnings before certain expenses in the space by ~25%
    • Instagram (FB -4.8%) now says it has 800M monthly users, an increase of 100M since it said it hit the 700M-user mark in April.
    • The service counts 500M daily active users; Snap (SNAP -4.2%) said last month that it had 173M DAUs. (Snap had its price target lowered by JPMorgan to $14, just 2% upside from Friday's close.)
    • Facebook also added that time spent watching video on Instagram is up more than 80% Y/Y, and that since March it's doubled the advertiser base on the platform to 2M.
    • Meanwhile, Facebook has introduced two ad tools: a location-based tool allowing for advertisers to target users based on offline activities (like physical store visits, purchases, and calls to businesses), and a new Canvas ad template (full-screen ads) designed to aid in product discovery.

  33. Phil –  it's clear – thanks a bunch!


  34. The Permian Basin of Texas and New Mexico holds 60 billion to 70 billion barrels of yet-to-be pumped crude oil, according to a study by IHS Markit Ltd.

    China oil consumption helping to ease downturn but fears persist

    Iran vows to keep exporting oil regardless of Trump's intensifying offensive

    Moody’s cuts outlook on oil and gas sector as growth slows

    The Permian "super basin" holds up to $3.3 trillion in untapped oil

    Top BP executive says OPEC needs to prolong oil output curbs

    Turkey warns Iraqi Kurds it can choose to "close the valves" on oil exports

    Most attendees see Brent price by Sep 2018 at $50-$60 a barrel range in straw poll. Only 10% see plus-$60 upside.

    Oil traders turn more bullish at Asia's top energy conference

    The China demand story is such BS – they are filling up new reserves, not actually using the oil…

    You're welcome, Winston.


  35. We are finding all that oil right when we won't need it anymore! Coincidence?


  36. Phil/News

    which site do you use to get news for a stock? td ameritrade does not provide up to date and detailed news nor I could get all news in google finance or yahoo.

    thanks and regards


  37. Oil/StJ – It's always been there.  It's just now they are facing a "use it or lose it" scenario where there isn't enough demand not to strand half the oil in the World in 12 years and they don't know how long it will be until the prices collapse so it's "drill baby, drill" until then.

    I used Yahoo Finance and Seeking Alpha and a paid thing called NewsWatch (we did a Webinar with them about a month ago), which is excellent if you want up to the minute news. 

    Wow, super-spike at the close – what a joke!  


  38. Bought some QQQ's today on the dip. Added a little bit more to my son's account. Up about 8% in 2 months! I think I've learned some stuff here. Thanks to all that contribute, and of course to the boss. Thanks Phil!


  39. GOOG can't lose – if people buy Android phones they use Google apps and if they buy iPhones they also use Google apps:

    https://arstechnica.com/gadgets/2017/09/siri-and-spotlight-will-now-use-google-not-bing-for-web-searches/

    As of today, searching the Web with Siri or Spotlight on iOS and macOS devices will show you results from Google, not Microsoft’s Bing search engine. This ends a Bing integration that was introduced in iOS 7 back in 2013.

    Google was already the default search engine in Safari in both iOS and macOS, and Apple is positioning this as a move for consistency, though there may be other reasons that have not been disclosed.

    Near monopolies are nice!


  40. Good morning from NYC!

    I'm on the 31st floor of Trump's SoHo Hotel, watching the sun rise over Brooklyn.  In-room Nespresso is a nice touch but there's a perfectly good Starbucks across the street too.  Had gourmet pasta at Sola Pasta Bar down the block – very excellent!  

    I have to be on TV at 11 at the Nasdaq's downtown studios, this should minimize my downtime on what I think will be an interesting day.

    GOP’s New Effort to Repeal Health Bill on Verge of Collapse

    Republican’s Latest Tax Plan Has Little Room to Maneuver

    U.S. Dismisses Talk of War After North Korea Threatens Jets

    If This Is a Trade War, China’s Winning

    Alibaba Takes Control of Logistics Business as It Seeks Global Expansion

    Asia was flat, Europe is flat and we're flat so far.  Oil pulled back a bit ($52) but miles to go before it normalizes.  

    Dollar still climbing, may be the only thing holding oil back.

    /KC back where we like them long (the $130 line)

    Most stocks aren't good investments (other than AAPL, of course!):

    What a GREAT first year it's been:

    How Electric Cars Can Create the Biggest Disruption Since iPhone (Bloomberg)

    Skills vs. Behavior (Collaborative fund)

    The worm has turned against big tech, and it’s overdue (L2)

    Climate Change Impacts in the United States