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Thursday Follies – Post Fed Depression

Now what?

What can we do now to boost the markets.  We got the Fed minutes yesterday afternoon and there were no new revelations there to justify another 18 consecutive days of new highs.  Sure it's being spun that way but that's the same way these depraved Financial Networks spin every rally – at the behest of their mainly-broker sponsors.

Not that the financial press is any better – even as an independent who makes his money selling subscriptions, rather than ads, I still find that we get far less subscribers when we are cautious or negative on the market than positive so, even if you think the Networks are not being specifically paid to mislead you – you can be sure they are doing it for the ratings!  

The closer you get to a bubble top, the harder it is to get fresh money off the sidelines and the harder the market cheerleaders have to cheer to get you to put your money into the positions the sponsors are trying to wriggle out of.  Meanwhile, the sponsors play their own games – sending their analysts out to upgrade key stocks that boost the sectors they are trying to unwind.  As we pointed out yesterday – that's why you see all these upgrades on Tesla – the same week Musk is accused of fraudulent forecasting.  That's NOT going away – but their profits are! 

Since we first tested S&P 2,500 in July, I have urged caution at these levels and now we're at 2,550 and it doesn't make me feel better.  Though it's the opposite, it reminds me of what Jim Cramer said to his viewers on October 31st, 2007 (5:20 in the video):

 

"You should be buying things and accept that they're over-valued but accept that they are going to keep going higher – I know that sounds irresponsible – but that's how you're going to make the money. " – Cramer, 10/31/2007 – Dow 13,930 

"That's why the market just won't quit, no matter how poorly actual companies are doing." – Cramer, 2/1/2008 – Dow 12,743

"Very simply, I believe that it's time to BUYBUYBUY." – Cramer, 6/13/2008 – Dow 12,307

Image result for s&P 500 volumeThe Dow was at 9,625 by Nov 4th, 2008 and bottomed out on March 9th, 2009 at 6,626 – down more than half from 10/31/07.  In case you weren't there at the time – it's HARD to get out of the market while it's falling.  You can't always find buyers for your shares while the price is dropping and then you tend to make poor decisions as you keep hoping for a bounce to soften the blow.  The average volume on the S&P (SPX) is about 800,000 the past month and that's down 42%, from 1.4M this time last year.  

There are NOT 42% less shares so what would happen if there was a rush to sell stocks when there is so little buying volume?  During the crash of 2008, average trading volume was 3M/day.  What happens to prices when 3M sellers meet 800,000 buyers?  

I HATE to be the voice of reason in an irrationally exuberant market but it's my job to tell you what is likely to happen and how to prepare for it.  We are certainly not bearish invesors – we are VALUE investors and, while we would love a pullback – we're not waiting for one.  Our portfolios are brimming with longs we've picked up over the years that we still haven't gotten tired of but, in order to PROTECT those profits, we insure ourselves with hedges – usually on the indexes.  

Image result for chicken littleWe have been giving you trade ideas for hedges all month (and in Sept too), both in our Morning Reports and the Live Member Chat Room.  Over the past 6 weeks, as we close in on Q3 earnings, we have gotten the most bearish we have been since we cashed out our portfolios in the Summer of 2015, catching a 2,000-point drop in the Dow right on the nose.  This is not right on the nose, this one is costing us money (well, costing us potential gains) and we're not happy about that and we WILL use some of our CASH!!! to bottom-fish on earnings but, on the whole, we're sidelined with our portfolios locked in neutral for the moment.  

Now that we are past the Fed minutes, it's all about earnings and this morning CitiGroup (C) beat by 0.10 at $1.42 and that's giving them a little pop and JP Morgan (JPM) also beat by 0.11 at $1.76 but revenues are down 27% from last year and expectations were very low and they are essentially trading flat off that news, though flat is $97/share and that's a market cap of $340Bn for a company making about $25Bn so a p/e of 13.6 is reasonable – as long as we assume nothing will ever go wrong again.  

In 2015, JPM earned $24.4Bn and in 2016 JPM earned $24.7Bn and this year they should earn $25Bn – this is not much growth, folks.  Nonetheless the stock is up almost 100% off the Feb 2016 lows of $50.19 and 50% above the 2015 highs of $66.58.  Those guys had two full years to look at $24-25Bn in earnings and decided $66.58 was plenty – what has really changed?  JPM, like most stocks, is up on some fantasy-camp scenario of a perfect market with less taxes and less regulation and more profits – not very different than what drove the Bush rally back in 2006 and 2007 – the lesson here is that investors never learn their lesson…

At some point, the market will either have to grow into its valuation or that valuation will adjust downward to fit the market's actual earnings.  I don't know when that point it – only that this earnings quarter makes me very nervous so I'd rather sit out this leg of the rally than risk what we've gained so far.  Yesterday we talked about picking up lagging International ETFs and we discussed our Russia (RSX) trade idea over at the Nasdaq as well as the reality of tax cuts vs the very high expectations reflected in the indexes:

 

We will be keeping our Nasdaq Portfolio at www.philstockworld.com/Nasdaq.  Our only losing trade (so far) is our QQQ bear put spread where we bought 10 Jan $147 puts for $9.50 ($9,500) and we sold 10 Jan $136 puts for $5.05 ($5,050) for net $4,450 on the $11,000 spread.  QQQ is currently right at $148 and the spread is down to $2.47 ($2,470) for a $1,980 (44%) loss at the moment but it's good for a new hedge – just remember to buy some bullish positions to cover it!  

 


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  1. Morning everyone!

    The weekly webinar is today at 1pm! Join us here:

    http://philstockworld.enterthemeeting.com/m/UFDXFPH4



  2. The kind of stuff that Trump comes up with defy the imagination each time:

    http://talkingpointsmemo.com/edblog/trump-tonight-on-hannity

    The country, we took it over, the last eight years they borrowed more than it did in the whole history of our country. So they borrowed More than $10 trillion. Right? We picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months. In terms of value. You can say in one sense, we are really increasing values and may be in the sense, we are reducing debt. 

    Of course, under Obama the market doubled but that doesn't count! But when Trump adds 15%, it's debt reduction. And the guy wants to take NBC's license away for spreading fake news?


  3. Quote of the day:

    http://talkingpointsmemo.com/livewire/trump-rages-nbc-nuclear-story

    “It’s frankly disgusting the way the press is able to write whatever they want to write. And people should look into it,” he added.

    Hmmm…. reminds me of other people in history, but who?


  4. Good Morning.


  5. Richard Branson investing in Musk's Hyperloop venture.  It will be rebranded as Virgin Hyperloop One.  My guess is he knows this will never happen but he just bought years of publicity for Virgin.  We all know Musk can't make money with companies but he is damn good with publicity and showmanship. 


  6. GLUU

    ~~GLUU +5% (upgraded to Buy from Hold at The Benchmark Company).

    One of Opt Trader's picks.  Sold some.


  7. Good morning! 

    CBSH missed with 0.71 vs 0.74 and hitting the 2.5% rule to the downside very quickly ($56.50).  We'll see what kind of bounce they get.  I'd call it a $2 drop so we look for $56.90 (weak) and $57.30 (strong).

    JPM and C both up a little.

    Big Chart – Exhausting but I do like the RUT at least consolidating at the 5% line (though no real pullback yet).

    Trump/StJ – I don't know if he's delusional or just knows how easy it is to confuse his base.



    "Propaganda must be aimed at the emotions and only to a very limited degree at the so-called intellect… The art of propaganda lies in understanding the emotional ideas of the great masses and finding, through a psychologically correct form, the way to the attention and thence to the heart of the broad masses." -- Adolf Hitler, Mein Kampf, pp. 180

    Branson/Rustle – I'm shocked.  It's not Musk's company, just based on his idea but wow, I don't get Branson getting involved.  

    The money isn’t the only connection between Hyperloop One and Virgin; the Hyperloop company’s President of Engineering Josh Giegel is a former Virgin employee. Branson noted in a blog post that he also visited Hyperloop One earlier this summer to view its technology first-hand, at the Hyperloop One DevLoop test track site in Nevada outside Los Vegas.

    I guess Branson trusts the guy and who knows how much money it actually is.  Branson has $5Bn so even giving them $100M is not much different than one of us investing $100K on something we think is cool.  Of course, when we invest $100,000, we don't have $4.9Bn left! 

    GLUU/Albo – They are fun.  You've been in and out of them for years, right?  


  8. GLUU – Yes.  Following Opt's lead.  It's been a good one.


  9. Phil,

    Russell, looks like it breached 1500 and bounced back up you still holding RUT shorts ?

    Thanks

    Pat


  10. Phil thank for you thorrow comments on MIC


  11. Nat gas came out at 10:30, oil at 11 I suppose:

    WTF on /TF – Hit 1,501 and then exploded up.  

    This is ridiculous – not at all realistic. 

    • The man who might well be the next Fed chairman, current Fed Governor Jay Powell says markets have so far reacted benignly to tighter monetary policy, but things can "turn on a dime." The catalyst for such a turn could be high levels of corporate debt in emerging markets, particularly in China. "Market reactions to even small surprises can be unpredictable and outsized."
    • Mortgage rates make a sharp move higher, although the benchmark 30-year fixed rate still remains below 4%, according to Freddie Mac's latest weekly survey.
    • The 30-year fixed-rate mortgage averaged a 10-week high 3.91% for the week ending Oct. 12, jumping from 3.85% in the previous week, and the 15-year fixed averaged 3.21%, up from 3.15%; a year ago at this time, the 30-year and 15-year fixed rates averaged a respective 3.47% and 2.76%.
    • The rise in credit card losses is "reversion to the mean," says Citigroup (C -0.7%) CFO John Gerspach on the earnings call. Nothing he sees suggest a meaningful turn for the worse in consumer credit.
    • Speaking on JPMorgan's (JPM -0.3%) earnings call, CFO Marianne Lake says much the same thing even as it too reported a big jump in card loss provisions.
    • Nevertheless, credit card players are among the weaker performers today, with Capital One (NYSE:COF), Synchrony Financial (NYSE:SYF) and Alliance Data all down by more than 1%. Discover (NYSE:DFS) is lower by 0.75%. American Express (NYSE:AXP) is ahead 0.2%.
    • Previously: Citigroup flat after topping estimates (Oct. 12)
    • Previously: JPMorgan flat after earnings topper (Oct. 12)

    I guess that translates to "BUYBUYBUY"?

    • Helios and Matheson Analytics (NASDAQ:HMNY) discloses that it holds a 53.7% pro-forma stake in MoviePass after increasing the purchase price of its investment to $28.5M.
    • The company also has an option to purchase additional stock in the subscription-based movie ticketing service for $20M in cash.
    • A risk disclosure included in Helios and Matheson's filing (SEC Form 8-K) is something that warrants attention.
    • "MoviePass has incurred losses since its inception and has a present need for additional funding. These factors raise substantial doubt about MoviePass’ ability to continue as a going concern. For the foreseeable future, MoviePass expects to fund its operations from additional debt or equity offerings and increased revenue from subscribers," reads the risk disclosure.
    • Concerns over MoviePass have hung over the movie theater sector (AMCRGCMCSIMAXCNKRDI) amid wide discussions over what the long-term impact will be on traffic.
    • Shares of HMNY are down 10% in premarket trading after rocketing up over 1000% in three months.
    • Previously: MoviePass tops 400K subscribers (Sept. 14)
    • Previously: Helios & Matheson up +700% in a month, here's who called it (Oct. 10)
    • Previously: Rally continues for Helios & Matheson Analytics (Oct. 11)
    • Royal Dutch Shell (RDS.ARDS.Bagrees to acquire NewMotion, the owner of one of Europe’s largest electric vehicle charging networks, for an undisclosed sum.
    • NewMotion operates more than 30K electric charging points in the Netherlands, Germany, France and the U.K., and provides access to a network of 50K-plus public charge points across 25 European countries, serving more than 100K registered charge cards.
    • Piper Jaffray is out with the results of its annual Taking Stock With Teens Survey. Adidas and McDonald's are two brands that made notable gains with teens over the last year, while Ralph Lauren (NYSE:RL) and Nike (NYSE:NKE) fell back in comparison to last year's poll. The top brands listed by the 10K teens included in the survey are posted below.
    • Top clothing brands: Nike (NKE) 23%, American Eagle Outfitters (NYSE:AEO) 11%, Adidas (OTCQX:ADDYY) 4%, Forever 21 4%, Hollister (NYSE:ANF) 4%.
    • Top handbag brands: Michael Kors (NYSE:KORS) 31%, Kate Spade (owned by Coach) 16%, Coach (NYSE:COH) 14%, Louis Vuitton (OTCPK:LVMHF) 6%, Vera Bradley (NASDAQ:VRA) 6%.
    • Top footwear brands: Nike 46%, Vans (NYSE:VFC) 12%, Adidas (OTCQX:ADDYY) 11%, Converse (owned by Nike) 7%, Birkenstock 2%.
    • Top restaurant chains (average income): Starbucks (NASDAQ:SBUX) 12%, Chick-fil-A 8%, McDonald's (NYSE:MCD) 6%, Olive Garden (NYSE:DRI) 4%, Buffalo Wild Wings (NASDAQ:BWLD) 4%,
    • Top restaurant chains (higher income): Starbucks (SBUX) 11%, Chick-fil-A 10%, Chipotle (NYSE:CMG) 8%, McDonald's (MCD) 5%, Dunkin' Donuts (NASDAQ:DNKN) 4%.
    • Tech: No surprise, but linear TV was a less popular choice again as Netflix (NASDAQ:NFLX) and YouTube (GOOGGOOGL) dominated with teen mindspace. Snapchat (NYSE:SNAP) was by far and away the most popular social media platform.
    • Credit Suisse has trimmed its price target and forecasts slightly for Twenty-First Century Fox (FOX +0.7%FOXA +0.5%) after looking at near-term headwinds.
    • The firm lowered its target price to $35 from $37, implying 33% upside, and lowered EPS forecasts by 1% each of the next two years. It sees soft NFL ratings and some regulatory risk in the company's bid to buy out the rest of Sky.
    • Sunday night NFL ratings are down 7% Y/Y despite soft comps, and the firm sees a possible drag on domestic ad revenues in Q2 and Q3 2018.
    • The "core" company — stripping out STAR, Hulu, Sky and Shine Endemol at $18B — trades at 6.7x 2018 EV/EBITDA.
    • It's still got a compelling implied valuation, the firm says, and Credit Suisse is sticking with its Outperform rating.
    • With prices up in gasoline, metals and agriculture, Japan's wholesale prices rose in September at the fastest annualized pace in nearly nine years.
    • Wholesale prices were up 3% Y/Y in their ninth straight month of increase, and the fastest growth since October 2008 (excluding the effect of the 2014 nationwide sales tax hike).
    • But that won't make it easier for the country's central bank to hit a 2% inflation target, since many companies will just absorb higher input costs without passing along price hikes to consumers.
    • Core consumer prices were up 0.7% Y/Y in August.
    • The Bank of Japan, resigned again to falling short of the 2% target, now expects to reach it by March 2020. There's a chance that a policymaker there could suggest still more monetary stimulus, though that's unlikely to win majority support currently.

    • Atlantic Equities raises Amazon’s (NASDAQ:AMZN) price target to $1,250 on ad sales that could quadruple by 2020.  
    • Analyst James Cordwell notes that sales of Sponsored Products, which allows third-party sellers to advertise in product searches, grew over 100% this year.
    • Cordwell predicts $8.8B in Sponsored Products sales by 2020, up from last year’s $1.5B to $2B.  
    • Cordwell expects brand advertising sales to reach $3.2B by 2020 and total ad revenue to total $12B. 
    • In other news, Amazon announces plans to hire 120K holiday workers for its fulfillment centers and customer service centers across the United States.       
    • Previously: Amazon Alexa gets voice recognition (Oct. 11)
    • Allegheny Tech (NYSE:ATI-0.8% premarket after guiding Q3 earnings to a surprise loss of $0.06-$0.09 per share vs. analyst consensus for a $0.06 profit.
    • Including a $1.05/share charge for goodwill impairment, ATI’s Q3 loss would total $1.11-$1.14/share, on revenues of $865M-$875M vs. $850M analyst consensus estimate.
    • ATI says Q3 results in its flat rolled products segment were hurt by a steep decline in raw material prices, primarily ferrochrome and nickel, causing the FRP segment to operate at a loss in the quarter; the company expects improved results in Q4.
    • The cryptocurrency is up 8% today to $5,200. Earlier, it touched $5,217.
    • Analysts are struggling to explain the surge as there's been no major new news, but it's pretty clear bitcoin has more than shrugged off regulatory crackdowns in China and Russia.
    • Crusty economist Ken Rogoff earlier this week predicted the technology behind cryptocurrencies will thrive, but the price of bitcoin will collapse as governments move to strangle anonymous payments systems facilitating tax evasion and crime.
    • Disney's (NYSE:DISMovies Anywhere has just launched, a digital movie locker and app launched with backing from five of the six major Hollywood studios, as expected.
    • Along with Disney (and its Disney, Pixar, Marvel and Lucasfilm marks), the service features films from Sony Pictures Entertainment (NYSE:SNE), 20th Century Fox (FOXFOXA), Universal Pictures (NASDAQ:CMCSA) and Warner Bros. (NYSE:TWX).
    • That brings together a combined library of more than 7,300 films. Still missing: Paramount (VIAVIAB) and Lionsgate (LGF.ALGF.B).
    • While it's owned by Disney, it operates independently via an advisory committee representing the participants, and movies can be redeemed through Amazon Video, Google Play, iTunes and Vudu.
    • Customers can use a free app to connect their Movies Anywhere account with participating digital retailers, and Movies Anywhere will sync the library across accounts so users can stream or download on a wide variety of devices (including Amazon Fire, Android and Android TV, Apple TV, Chromecast, iOS devices and Roku devices).
    • As a promo, new users connecting with one of those four retailers will get free digital copies of last year's Ghostbusters remake and Ice Age. Connecting with a second gets free copies of Big Hero 6, Jason Bourne and The LEGO Movie.
    • It follows in the footsteps of the UltraViolet locker model (which studios abandoned for superior Disney tech) and the previous proprietary Disney Movies Anywhere. (Libraries from the older services will port over via retailers.)
    • Previously: Bloomberg: Most rival studios joining Disney digital locker effort (Oct. 10 2017)

  12. Phil – I think the hose and pipe allegory to the IWM versus the market is the greatest thing I've ever heard.


  13. That's a massive swing from API, which showed a 3.1Mb build so oil should be back to $51 at least off this report.  /RB, on the other hand, was the opposite going the other way, as API had a 1.57Mb draw.  The net is EIA has a 1Mb net draw more than API – nothing great for oil and certainly no good for Gasoliine.

    • EIA Petroleum Inventories: Crude -2.8M barrels vs. -2.0M consensus, -6.0M last week.
    • Gasoline +2.5M barrels vs. -0.5M consensus, +1.6M last week.
    • Distillates -1.5M barrels vs. -2.2M consensus, -2.6M last week.
    • Futures -2.01% to $50.27.

    Honey badger don't care:


  14. Thanks BDC – I do my best to convey the concepts. cool

    /TF/Pat – Yes, still have 10 short at 1,502.  Should have cashed out but was busy and didn't see it pop back over.  


  15. Phil – I like your Nasdaq FB interviews right downtown with the set the way it is and the traffic going by in NYC. I lived their shortly and it was great. Too bad they don't let you put down the mac though!


  16. Thanks Phil, I was watching it but my avg is 1496 so was hoping for a quick drop below 1500. Now I feel bad for not taking some of it off at 1501. 


  17. Phil, can you recommend an option trade on google if one were to expect a 20-30% increase in the next year or two? Been looking around at the usual options selling puts and buying a bull call spread, but its hard with google when selling a put not to commit to owning $1,000,000 worth. Any other ideas / ways to play it?

    not actually looking at it for myself, but was explaining the merits of our options strategies to somebody else and they held the above belief. 

    Let me know, thanks!


  18. Took a flier on some IWM 149.5 next week puts. 


  19. Wouldn't do anything till after earnings on TSLA (10/25) but the fact that it's short interest has finally come down (lowest in 2017), Norway (it's 3rd biggest market) is trimming its subsidies on EV cars (that has had a big impact on TSLA in some states that have done that), the Model 3 production problems and the continual incinerator of cash, this is lining up to be a great short on a bump up, hoping earnings move it 20-30 points higher.


  20. Mac/BDC – Well those are my notes – just in case.  Usually I don't need them.

    1,501/Pat – I was greedy too, was going to get out for the bounce off 1,500 but we never hit it.

    GOOGL/CRS – Well, they are trading at $1,006 and the key is whether or not you want to own any. You say not $1M but what about $100K or $200K?  For starters, if you are playing for $1,250, then obviously you'll be looking to sell the 2019 $1,240 calls (there are not $1,250s) for $30 and then you can buy the $1,120 calls for $60 and that's net $30 on the $120 spread with no margin and a $90 upside (300%) at $1,250.  

    From there, you need to consider what safety is worth.   The $1,100 calls are $68 and let's say you sell those and buy the $1,000 calls for $113.  That's net $45 on the $100 spread with $55 upside (122%) so now we know the range of expected returns.  

    If you choose to sell just one 2019 $1,000 put – that's $86 ($8,600) and obligates you to own $100,000 worth of GOOGL at $1,000 (the current price) but if you apply 2 of those ($17,200) to 5 of the $1,000/1,100 bull call spreads ($22,500) now you have laid out just $5,300 cash against $50,000 of upside potential at just $1,100 (up 10%) with the worst-case owning 200 GOOGL at net $1,026.50

    You have to figure out your comfort zone based on those factors but, if you don't REALLY want to own GOOGL then you have no business selling puts on it in the first place.  

    If I don't mind owning $70,000 worth of MSFT then I can sell 10 2020 $70 puts for $6.70 ($6,700) and buy 30 2020 $75 ($10.20)/$85 ($6.20) bull call spreads at $4 ($12,000) and that's net $5,300 on the $30,000 spread so, on the whole, you get much more bang for your buck with GOOGL and not too significantly more of a commitment, so it's a good deal, but either one would suck if the market crashes and you have to eat those short puts.  

    What we do is not about chasing momentum stocks higher.  With both of these stocks, you are overpaying for the calls and getting underpaid for the short puts – it's NOT a good example of what we do because it's not a trade I'd be likely to call with such toppy charts.

    TSLA/Rustle – I am praying for a move up!  


  21. aapl has retraced 50% of the recent 165 to 150 drop.


  22. You all listening to Larry Summers on CNBC calling out JamieDimon?


  23. Getting a little turn-down again.

    And it's webinar time


  24. Phil, what just happened with /cl,,,,,I don't see any news?


  25. No idea but that's what I mean by unplayable. 


  26. Baron2 – no, what's Larry saying?


  27. phil, how to play GE?


  28. Biodiesal,

    Dimon had said that tax reform would be big boost for economy, and that employers would hire more people.  Summers said tax reform would not be big boost for economy, and if Dimon was so sure, he should come out and say who, what and where he would be hiring.  CNBC guys/gals did not seem too happy with what Summers had to say.


  29. I have optimum cable right now and thinking of switching to FIOS.  Anybody with FIOS want to share how it is?  I hear customer service is horrible, billing can be sketchy and you have to watch it and internet (what I'm most concerned about) goes out more than some cable companies.  On the bright side, price is a little cheaper, internet is about 5x faster and DVR is better plus you can pretty much take your TV and DVR with you on the road and watch everything from a tablet or phone.  Any opinions?


  30. FiOS / Rustle – I have FiOS having switched from Comcast. I would not switch back even though I have both options here (not common). Tech support is OK, but what cable company has great support? In general the TV experience is good – the Quantum system lets you record tons of stuff at the same time and you can view some of it on the road (not all channels I believe). Internet is great. They just upgraded me to Gigabit from my 150 Mbps line for free. You don't really get 1 Gbps but close enough with the right hardware and close to the router (or wired).


  31. rustle/FIOS

    I have it now and have been on it for a few yrs. The wireless router is a bid dodgy. I have a Apple passport sitting in front of my router and all devices connect to passport. Hope this helps. Thx


  32. I had FIOS in NYC.  Was terrible.  Speeds were terrible…assume maybe network overload.  I had 150Mbps and was lucky to get 10 Mbps during peak time.  What you hear is accurate.  Customer service and billing is terrible.  They started charging me a rental fee for a router that I purchased and owned myself and wouldn't remove the charges.  I actually ended up in a legal dispute with them which was fun.


  33. FYI – I have had FiOS for close to 15 years now  and I have to call support maybe 5 times! I agree with Ravi, even their top of the line router is not that great. 


  34. Internet speeds are close to a GB upload and download now (940MB download, 880MB upload).  It's new to my area so don't know how bottlenecked it will be say at night.  I know sometimes you can unplug the router and restart it and it will put you, so to speak, in a different lane so you don't have as much traffic as the one you were in when it gets like that.  The speed is what caught my eye on changing since Optimum only goes up to 200mb.  Again the concern is how often the internet goes down and the customer service aspect which jjennnings obviously is not a fan of for good reason.


  35. and on a separate note, did anyone see Trump speak about how he wiped out the national debt with the amount of money the stock market went up?  Is he that delusional that he thinks he can just take that money from people and corporations and just pay the debt off?  And he's doing the opposite since he is actually trying to lower taxes on the highest bracket and corporations, making debt worse.  And this is the guy many people thought had a good handle on the economy.  He has no clue.


  36. FiOs / Rustle – Don't expect to get these speeds on WiFi. The 5 Ghz channel which supports these speed doesn't have a lot of range. On the regular 2.7 Ghz channel, you might get 200 Mbps and lower as you get further from the router. If you have a big house you should invest in a mesh network or at least an extender. On wired Internet, I have seen speed close to 700 Mbps download but no faster. Still plenty fast for Netflix…


  37. And I posted about Trump comments earlier this morning. The guy is clearly delusional. Maybe even crazy!


  38. Trump/stjean

    Seems like he's getting crazier each day


  39. Will Trump take responsibility for the bills when the market dips?? Pay out of his own pocket? It's gotta work both ways right? 


  40. I love the post on facebook , history of the presidency…

    43 white faces, one black and one clown.

    Yes, we elected a clown to run the country.

    Grab your popcorn…


  41. Phil – This year, Italy, France, Europe freakish heat waves, floods and hailstorms, and with NoCal wine country burning down the house, everything comin out of Napa and Sonoma is going to have a hint of smoke to it.  Could be time to go long on grapes, must, grape juice, concentrate, brandy, wine vinegar and WINE.  WVVI, BF.B, STZ, CWGL … this is making me thirsty, time for my IV and Out.


  42. Popcorn is long gone….working on Twinkies now….. ;)


  43. GE/Lunar – Wait for earnings is how to play them.  Or after they cut the dividend and calm down.  There's no 2020s out yet anyway but you can sell 2019 $23 puts for $2.20 and the $23 ($2.05)/$28 (0.60) bull call spread is $1.45 so that's a good set to keep an eye on but, if they cut the dividend, maybe a 10% drop and you can do the $20/25 spread for the same price with $20 puts.  THAT would be an awesome entry.

    FIOS/Rustle – Greg just got his and he's super-happy with the speed.  

    Service/StJ – Surprisingly, Optimum has gotten great with service but speed is sub-par. 

    Trump/Rustle – I'm too distracted by his scuttling of Obmacare today.  Nice stealth attack draining away so many paying customers that the whole thing will now collapse ("proving" their point that it was collapsing).  

    Dip/Jeff – That will be Obama's fault. 

    Image result for history of the presidency clown

    Paris banning all non-electric cars by 2030.  Beijing apparently heading that way too.

    Wine/Naybob – Depends how they make their money.  You want to find someone who has good supplies of non-Nappa wines.

    Hyatt got hacked now.  Why do we keep giving people our information?


  44. DDR – entering new short position (long puts)…  I just don't think it is going to end up a good year for them.  DDR Corp. is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers. As of December 31, 2016, the portfolio properties included 319 shopping centers (including 152 centers owned through joint ventures). These centers are in the Southeast and Midwest, with significant concentrations in Florida, Georgia, Ohio and North Carolina, as well as Puerto Rico.


  45. hacked/Phil

    Soon many companies will have to go back to keeping certain info on paper files and not on internet anymore.


  46. Why do we keep giving people our information?

    Because we have no way to function without doing so currently.  Even PSW Investments needed my social security number :)


  47. Is there a play on lithium that'll be used in all these car batteries? Or some of the other fundamental components? 


    • via Krebs on Security
    • Hyatt (NYSE:H) says it discovered sings of unauthorized access to payment card information from cards manually entered or swiped at the front desk of certain locations between mid-March and early July of this year.
    • Shares were in the green prior to the news, but now lower by 0.1%.

    • Google (GOOGGOOGL) announces a five-year, $1B job training and education program that involves a few different projects.
    • The Grow with Google initiative will work with U.S. communities to provide job skills and small business growth advice. 
    • The Goodwill Digital Career Accelerator will receive $10M in funding from Google to train 1.2M people in digital skills and career opportunities over three years.
    • The company will also provide $1B in grants to global nonprofits. The money, distributed over five years, will go towards organizations working on “three key areas” Google thinks will “boost opportunity.”       
    • Previously: Target expands Google Express options (Oct. 12)
    • Ford (F -1.5%) unveils a plan to triple the number of EV charging stations for North American employees to 600 over the next three years.
    • "If we give people the ability to charge when they're at work, we can significantly up the potential for mass market adoption of electrified vehicle technology," says Ford sustainability exec Steve Henderson.
    • The sweeping Ford EV plan includes launching 13 new electric models over the next five years.
    • Beleaguered Teva Pharmaceutical Industries (TEVA -4.2%) is down on below average volume in a retest of the recent low of $15.22 touched on September 6. Shares are currently exchanging hands at $15.05, a 52-week low.
    • No particular news accounts for the action. Earlier today, the company settled its patent challenge with BioDelivery Sciences related to pain med BUNAVAIL but that should not have moved the needle much.
    • Pharmaceuticals and biotechs are down in general.
    • (PJP -0.9%)(IHE -0.6%)(XPH -0.9%)(IBB -0.7%)(XBI -0.3%)
    • Previously: BioDelivery Sciences settles Bunavail patent dispute with Teva (Oct. 12)
    • via Liz Hoffman and Peter Rudegeair at the WSJ
    • Founded in 2007, Genesis Capital lends to investors looking to buy, renovate, and quickly sell single-family homes. Growth has been speedy – the company lent $1B last year, up from $50M three years earlier. Behind that speedy growth has been funding, which Oaktree Capital (NYSE:OAK) has supplied since 2014. Deeper pockets are on the way.
    • Goldman Sachs (NYSE:GS) is buying, according to the report, with an official announcement maybe coming this week.
    • Goldman's traditional sources of revenue (particularly trading) are in what could be secular decline, so the bank has been busy trying to drum up business on Main Street – including taking in small personal deposits and making small business and consumer loans. Next stop residential mortgages?
    • Update at 2:00 ETOfficial announcement
    • U.S. crude oil prices trim earlier losses after U.S. government data showed domestic crude stockpiles falling for the third week in a row; WTI currently -0.9% at $50.84/bbl.
    • But in more bearish news for oil prices, the International Energy Agency also says global oil supplies rose in September while demand growth slowed.
    • U.S. crude supplies fell by 2.8M barrels for the week ended Oct. 6, well above the forecast of a 400K-barrel decline by analysts surveyed by S&P Global Platts and a 1.7M-barrel decline projected by analysts in a WSJ survey; the API reported yesterday that stockpiles had increased by 3.1M barrels.
    • The EIA also forecasts U.S. crude production averaging 9.9M bbl/day in 2018, which would mark the highest annual average production in U.S. history.
    • Barrick Gold (ABX -0.1%) says Q3 gold production fell from a year ago, hurt by reduced output at majority owned Acacia Mining (OTCPK:ABGLF) due to work permit issues and curtailed operations at its mines in Tanzania.
    • ABX says preliminary Q3 results show it produced 1.24M oz. of gold, below the 1.38M oz. produced a year earlier, while the average market price for gold in the quarter fell to $1,278/oz. from $1,333/oz.
    • Acacia says it generated 191K oz. of gold in the quarter, beating expectations, but sold only 132K oz.
    • ABX says gold production remains on track to achieve 5.3M-5.6M oz. for the full year, and it expects higher production and lower costs in Q4.
    • President Trump is scheduled to sign an executive order this morning at 11:15 am ET that will make it easier for people to sidestep certain ACA rules and purchase pared-down health insurance.
    • The order will instruct the labor secretary to consider ways for small businesses to band together as associations across state lines to buy cheaper health insurance that would be exempt from some ACA requirements.
    • It will also instruct the Health and Human Services, Labor and Treasury Departments to change the time span limit for short-term insurance plans which are cheaper but have more limited coverage.
    • Democratic state attorneys general have vowed to sue if the President tries to destroy Obamacare.
    • Selected tickers: GRX THW IXJ BME XLV VHT XBI CYH LPNT THC HUM HQY UHS AET CIHCA
    • There's a bit of a risk-on trade in the casino sector as some estimates in Macau are cut after a softish Golden Week in Macau and a lawsuit against MGM tied to the Las Vegas mass shooting garners attention.
    • Wynn Resorts (WYNN -1.9%), MGM Resorts (MGM -2%), Las Vegas Sands (LVS -2.3%), Melco Resorts & Entertainment (MLCO -1.3%), Red Rock Resorts (RRR -0.9%) and Boyd Gaming (BYD -0.8%) are some of the names seeing extra volatility.
    • Indonesia Finance Minister Mulyani tells CNBC that a deal with Freeport McMoran (FCX +0.2%) over the Grasberg copper mine will be resolved by the end of this year.
    • FCX in August agreed to sell a 51% stake in the Grasberg mine in exchange for licenses to operate the massive copper and gold pit until 2041, a deal Mulyani says has held so far and could be executed before 2018.
    • "We will continue making our best effort to make it hopefully even earlier than that, but we will try to do our best and I think the communication is good," she tells CNBC.
    • On valuing the 51% stake her government agreed to buy, Mulyani says the starting point was fair: "I really believe that both parties have a strong intention and willingness to come up with a good agreement which is benefiting Indonesians and Freeport."

  48. 1020 – 11/27/78 – I will never forget it.


  49. SFTBY, which owns a slug of BABA, has gapped up 3 days in a row.  If they can get a resolution on Sprint, their number one albatross, the stock could move higher.  I mistakenly used it rather than YAHOO as a play on BABA. It has been a long time coming around, but is finally nicely profitable,


  50. Sold some TWTR on this move.  Will look to re-establish at the 16 level.


  51. DDR/Scott – I like SKT (they are in the LTP).

    Paper/Rustle – Better but what we need is a way to give them nothing.  Some sort of facial recognition phone ID thing that should be as good as a notary and allows them to query your credit score/balance without having to ID you otherwise is all we need.  

    PSWI/Tangled – Well, that's the law, unfortunately.  It's a stupid system.  Doesn't even prove anything and this Equifax hack is going to blow up one day in a huge way as all that "vital info" that establishes your identity is now out there.  THAT is what our Government should be worried about at the moment – not how to gut health care or drive us further into debt.  

    Lithium/Jeff – We had a few but they all took off.  LIT is the ETF:

    /KCH8 getting back to $130 – it's a Thursday thing now, I guess.

    Certainly I like them long down here (above chart is /KCX7 so /KCH8 is a great deal just 3.5 higher).

    SFTBY/Albo – He certainly takes a lot of swings.  

    TWTR/Albo – Not bad down here:


  52. RIG – I came cross this :

    ~~•Transocean said that offshore deepwater costs have declined by as much as 50%, driven largely by structural improvements.
    •As a result, breakevens for a number of major offshore projects have declined from $91/barrel to $46/barrel.

    Have been out of RIG since the 14-15 level.  Time for another look ?
     


  53. Hacked/Phil – gov't worry indeed. that is the premise for the scariest book I tried reading last year (found at local library) - had to stop. Way too scary/real/possible. http://www.joenobodybooks.com/adrift.html


  54. Weird – there are no Oct 27 weekly $36 (at the money) strike VXX options


  55. /RIG/Albo – Well we assumed $50 was their break-even, not sure I get the warm fuzzies now if they need $46.  

    Hacked/Scott – It is too depressing to think about. 

    VXX/Tangled – That is odd. 


  56. RIG/Albo – ha! that's just happy talk. I made my final exit from RIG today… so in all likelihood, tomorrow it will begin an unstoppable surge, ending up becoming the unexpected juggernaut winner of 2017.


  57. Rig — the breakeven is NOT $50 for Deepwater operators — more like $60.  On top of that, the drilling contractors are not going to enjoy +$500,000/day rates…more like less than half.   Until we get over $65 – we will scrape by.


  58. Phil

    T AT&T Inc.

    What do you think for a trade with the sell off ?

    Thanks


  59. Phil/Albo:

    AAOI pre-announced negatively.  Optical stocks will get sold off.

    AAOI PE looking near 11.  Time to initiate put sales?

    My earlier Dec put sales may get assigned which is fine as I don't mind buying in the high 30s and get even lower PEs.  4Q guidance will be on their Nov 1st earnings call.


  60. Phil/GOOGL/MSFT charts

    I agree that these have gone up significantly..not only in the past 3 months, but insanely so over the past 3-4 weeks. 

    GOOGL up from 925 to $1005 in 3 weeks with MSFT up by the same percentage.

    However, looking at the charts you drew, both GOOGL and MSFT 'technicals' show a possible breakout, which needs to be confirmed. 

    Would you agree? If so, does your opinion change?


  61. QC/T

    I don't know what Phil thinks.

    If you believe the news today, with the hurricanes impacting both earnings AND infrastructure repair costs, then it has to be 1-2 Quarters worth of losses. But they also lost subscribers which was reported yesterday, dropping the stock from $39+change to $38.

    Having said that, T was at $35.28 not a month ago. So, personally, I am looking at $35 to start selling puts.

    Although I like the dividend and have been selling calls at $40 and $39 levels, I am afraid of the debt and would not rule out a dividend cut in the not too distant future.

    Now, let's see Phil's take on it…He liked T at $35 in the past..that, I know. (But the story may have changed)


  62. What Would Happen if the U.S. Withdrew From Nafta




  63. Phil,

      What do you think about the move in /NKD?



  64. A sitting U.S President attending a hate group as a key note speaker.  Wow, when the U.S falls you guys don't do half measures.