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Just Another Mueller Monday – Let the Indictments Begin!

The new Watergate?

Image result for guilty guilty guilty doonesbury

After almost a year of interviews and investigations, the first indictments are coming for Team Trump and the markets, so far, are very complacent about it.  Of course we don't know who is being indicted or where it will lead but, having gone through Watergate when I was young, this is following a very familar path.  So much so that our President is putting out angry 5-part (a new record!) tweets seeking to shift the focus to his usual punching bag – Hillary…

I find it interesting that very few people forwarded or commented on his middle tweet but interest picked back up on tweets 4 & 5.  It seems very odd to me that 33% of the people who didn't retweet part 3 would then retweet part 4.  Maybe it's the use of all caps that gets people excited about a tweet?  We report, you decide whether or not Trump's account is tweeted by Russian Robots.  

Actually, that's one of the things Robert Mueller will be deciding on that.  Apparently, the anwser isn't no involvement as members of Trump's team are going to be ARRESTED (tweet that) and that's a bit awkward because, as Trump himself has said, regarding Hillary's FBI investigation, "We must not let her take her criminal scheme into the Oval Office" while PRAISING the FBI and DOJ for having "the courage" to pursue the truth.  He also said:

Trump lied about Doug Schoen, by the way.  Schoen worked for Hillary in 2008, not 2016, he had flipped Republican in 2010 after he was hired as a Fox News analyst and even wrote a book with Republican hit-pollster, Scott Rasmusen about the Tea Party movement.  Trump was right though, about a protracted legal battle that ties up the Oval office being a disaster for our country.  Hopefully he'll take his own advice and step down…  

The special counsel, meanwhile, has taken up several strands of inquiry, including into the business affairs of Trump's former campaign chairman Paul Manafort, claims that members of the President's campaign team, like former national security adviser Michael Flynn, transgressed in their alleged contacts with Russian officials and whether the President's dismissal of FBI Director James Comey amounted to obstruction of justice.  The President's political vulnerability is becoming more acute as well — an NBC/Wall Street Journal poll Sunday put his approval rating at 38% -- the lowest point of his presidency. 

We just got word that the winners today are Paul Manafort, who ran Trump's campaign and Rick Gates, one of Manafort's business partners, who has been asked to surrender to Federal Authorities this morning, likely regarding payments they allegedly recieved from the Russian Government through a dummy corporation in Cyprus which is, if nothing else, money laundering.  This is normal with this kind of investigation – you get people who are certainly guilty of something who may be willing to flip and turn witness on other things they have done – as the little fish point to the big fish – and the guy who ran Trump's campaign is a pretty big fish to start with!  

And notice Trump's approval numbers look a little like a fish.  Coincidence???  

Stocks-WatergateDuring the Watergate investigation, 66% of the country thought the press was out to get Richard Nixon with 49% of the voters, as late as June of 1974, telling pollsters the whole thing was "just politics."  Clearly we've learned nothing in 43 years.  Clearly investors have learned nothing either as the Watergate scandal cost the S&P almost 50% of its value in 18 months while the price of gold doubled.

Bitcoin already hit $6,300 this weekend – perhaps the new gold?  Our GreenCoins (GRE) have shot up 472% (you're welcome) since we last discussed them in July, but miles and miles to go before they even get to a penny – so we're hanging on but, of course, taking some profits on those crazy spikes (don't chase)!

Playing the cryptocurrency market is something to be done with FUN MONEY ONLY but it was fun money when people used 10,000 Bitcoins to buy 2 pizzas in 2010 – a transaction that is now worth $63M or about $4M per slice!  So PLEASE, keep that in mind when investing in Digital Currencies – if you get a winner, you can make a fortune, so don't bet a fortune on it – there's no need – and you are VERY likely to lose the money instead.  It's like roulette but with worse odds.  Check our out Digital Currency section for news and commentary on this fast-paced sector.   

As to the markets, it's another huge earnings week, with about 20% of the S&P 500 checking in, highlighted by Apple (AAPL) on Thursday.  Our AAPL positiion in the Long-Term Portfolio (LTP) is fairly aggressive, with 50 of the 2019 $150/180 bull call spreads covered with just 20 of the Jan $155 short calls (and 15 short 2019 $120 puts) and AAPL is already ramping back towards $165 in anticipation of huge numbers.  FaceBook (FB) is Wednesday's big deal but we'll be watching Tesla (TSLA) with great interest as it's put up or shut up time for that Ponzi scheme.  

It's also going to be a busy, busy data week, puncutate by a Fed Meeting which begins tomorrow with the statement released Wednesday at 2pm – during our Live Trading Webinar – so that will be exciting.  Other than expected comments from Yellen on Weds, we only hear from Atlanta Fed's Bostic on Thursday and Neel Kashkari on Friday so it's all about earnings and data for the next two days – which is probaly bearish but, on the other hand, we're not expecting much selling until they year rolls over – as the pending tax cuts make profit-taking in 2017 a huge waste of money.  

 


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  1. Need to add more lines already!


  2. It's all President Hillary Clinton's fault! LOL

    Today we will learn that Trump barely knew Manafort and as a matter of fact never spoke to the guy. 


  3. What is the thought on /CL? I went short at 52.50 then added one at 53.50. Should I cut my losses with this one? 

    It seems to be holding the 54 line so I am torn on what to do.


  4. What the M!


  5. CITIGROUP DOWNGRADES MACY'S TO SELL

    Font size: A | A | A

     

    7:18 AM ET 10/30/17 | CFRA


  6. TEVA – RBC Capital cuts PT to $13 from $15. This new price target represents a -2.40% downside over the stock’s previous closing price of $13.32.

    OCT 30, 2017 | 9:04AM | BY STOCKNEWS.COM STAFF


  7. How can President Clinton allow innocent men to be hunted down by the deep state? A violation of the constitution!  I cannot believe the media is ignoring this perversion of of the U.S justice system…. oh look something shiny.

     Meanwhile here in sunny Europe Spain is rounding up traitors (well it is nearly Guy Fawkes night here in the UK and we love a good gun powder plot so grab the tapas).  Jared K has flown to Saudi to claim amnesty from his father in law which has sent oil into the stratosphere … which incidentally… is so full of Co2  as of 2016 we will be lucky if we don't all starve/roast.drown by the end of the decade.  Everything is truly awesome!


  8. ?Good Morning.


  9. Good Morning!


  10. interesting deal by STZ.  The tobacco companies might move next.

    Oct 30 (Reuters) – Constellation Brands Inc has bought a nearly 10 percent stake in Canadian cannabis maker Canopy Growth Corp for about C$245 million ($191 million), the first major wine, beer and spirits producer to invest in legal cannabis.


  11. ~~Finisar (NASDAQ:FNSR) is up 5.5% premarket after reports from Northland that the company has gotten final qualification from Apple for high-power VCSEL lasers.
     


  12. Phil or anyone,

     

    I have CF $22.50 puts for 2019 that are 2/3's earned at this point.  What to do?  Leave alone, roll up, roll up and out to 2020, just add more puts and where?  The chart is strong.  Actually, I don't really care what the answer is; more looking for some insight as to what my thought process should be.  Thanks.


  13. GRE/Phil Let's  keep it real! The current bid on GRE is 1 Satoshi, which is as low as it can possibly go. Very low volume. 


  14. Good morning!  

    Holy cow, the Dow shot right up again at the open – AMAZING!  

    Oil popping too and /RB but quickly reversing as it's all BS.  

    United Nations of Debt: Visualizing $63 Trillion in Global Debt by Country Excellent chart by the Visual Capitalist https://www.themaven.net/mishtalk/econo

    Back to oil – there's an insane backlog of open orders in the front 4 months, that's keeping me bearish:

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Dec'17 54.16 54.18 53.75 54.06 09:09
    Oct 30


    -

    0.16 152063 53.90 597839 Call Put
    Jan'18 54.35 54.37 53.96 54.28 09:09
    Oct 30


    -

    0.19 28075 54.09 320656 Call Put
    Feb'18 54.45 54.45 54.07 54.39 09:09
    Oct 30


    -

    0.21 9066 54.18 130886 Call Put
    Mar'18 54.45 54.45 54.18 54.43 09:09
    Oct 30


    -

    0.22 8537 54.21 254030 Call Put

    1.3Bn is a new 4-month record for FAKE!!! orders.  


  15. Oil/Dreamer – I'm inclined to let it play out still.  Huge win in /KC covered me so just a lottery ticket now.  Over $55 is a definite give-up though.  Would be Brent over $61 first.

    M/Jabob – Downgraded, TEVA too.  At least they got GM, which we shorted.  

    Global stuff/Malsg – Just gotta ignore it all and go with the flow. 

    AAPL $166.  Good for pushing the indexes higher.  

    STZ/Stock – That was my idea 2 years ago (iced tea with THC in it) – no one wanted to invest!  That's also my long premise on MO (investing in legal pot).

    FNSR/Albo – That's good as we're aggressively long in the LTP.  

    CF/Baron – I am no fan of that business.  Very random pricing due to heavy international competition and you can't even count on demand.  So my take would be take money and run:

    As to thought process.  It depends how confident you are that they won't go back to $22.50 (or, if they go halfway there, you won't stop out after giving up gains).  That then falls back to whether you REALLY want to own them for $22.50 because, if you REALLY do – then who cares if they fall.  If not, however, needing 14 more months to make 1/3 indicates there are likely better things to do with your margin.  

    GRE/Jet – Well I can only go by the printed closing price.  Of course it's up and down like crazy but if you can buy them for 1 Satoshi, that's pretty good.  That chart was in Dollars, not Satoshi but check out these spikes you can sell at.  If you can buy something for 0.00037 and sell for 0.0037 – that's still a 10-bagger and, as I've noted many times, I like to buy $100 worth and sell $50 worth when it doubles so I have $100 worth for free and then, next time I can buy $100 cheap, I start it again and that's how I accumulate lots of free coins.  

    But yes, the whole thing is basically silly – no better than collecting beanie babies IMHO BUT, on the other hand, if I can make money buying and selling beanie babies – then why not?  


  16. Malsg – "well it is nearly Guy Fawkes night here in the UK and we love a good gun powder plot so grab the tapas"

    Thanks for my LMAO of the day.  I've Nattered it before, and I'll Natter it again…

    Guy Fawkes was the ONLY man EVER to enter Parliament with honest intentions.




  17. GOP tax reveal to set off ‘corporate hunger games’



  18. US consumer spending surged 1 percent in September






  19. World’s Largest Laser Could Solve Our Energy Problems


  20. Phil/JO

    The chart looks good for coffee long, so looking to adjust.  I think I would buy back the Dec $20 calls here, but what about adjusting the March 12/17 BCS?  Thanks for your opinion on CF; will play conservatively.




  21. stz / stockbern – Giving a nice pop to all of the marijuana stocks today.  Going to pick up some HMMJ.TO if it pulls back a bit from its 5%+ move today.  It's an ETF for marijuana related companies.  All indications are that there is going to be insufficient supply to meet the demand once pot is legalized in Canada on July 1st and it may take a couple of years for supply to catch up.  Most stocks pulled back a lot from last year highs but seem to be on the move again.  There is even a streaming company Cannabis Wheaton established but I looked at 1 deal they did and can't figure out why they paid a premium for shares of  one of their holdings.  Staying away from that one.  The bet is that it will be the booze, tobacco and grocery/pharmacy companies consolidating in the future.  



  22. stuman

    THCX   Hydropothecary Corp    the one I invested in.  headquartered in Quebec. They just announced a $50M debt offering today.



  23. Down go the indexes!  What a silly market…

    Oil and gasoline pulling back too.

    JO/Baron – Well, I strongly prefer just going in and out of /KC longs (/KCH8 is our current favorite) but, if you have the March $12s ($4.40) they only have 0.12 premium, so not much to improve at $16.28.  I don't see why you would spend money to buy back Dec $20s, they are 20% out of the money.  For additional upside, you could cash the $12s ($4.40) and buy 2x the June $15 ($2.25)/$18(0.95) bull call spreads for $1.30 so $2.60 on the new spreads and $1.80 in your pocket and you have another $6 upside ($3 x 2x) at just $18 and your two sets of short calls are well-covered.

    Upon reflection, the consumer spending boost seems to be storm-related and not at all backed up by consumer income, which was up 0.4% while Spending was up 1% so, in effect, people went 0.6% more in debt for the month.


  24. Phil – down go the markets – It was revealed that Ex Trump campaign adviser Papadopolus rolled over, way back on October 5th for lying about collusion with Russian Intelligence. Connection made.

    Senator Blumenthal tipped the hat over a MONTH ago on Sept 26th. Manafort, Flynn 99% sure to be indicted. 

    We Nattered about the nuances of exactly how an In-Flynn-eration might occur, way back in February.  Flynn Flew Over The Cuckoo's Nest? 

    This is what some former Team Trump statements for immunity might read like.  They might be going down like this. Out.


  25. Phil/JO

    The Dec  $20 calls are buyable for .05 on the $1.15 I sold them for.  The 15/18 BCS was what I was thinking too.

    FNSR/LB  Why does it seem like the long calls in LB are getting hammered while with FNSR not much upside?  I should know this but I guess I don't.  Thanks.

     

     

     

     

     

     

    lb


  26. Phil – All the Manafort, Gates and Papadopoulos docs are here. Great reading. Enjoy and Out.


  27. A Smoking Gun? 19. On or about May 21, 2016, defendant PAPADOPOULOS emailed another highranking Campaign official, with the subject line "Request from Russia to meet Mr. Trump." The email included the May 4 MF A Email and added: "Russia has been eager to meet Mr. Trump for quite sometime and have been reaching out to me to discuss."2

    2 The government notes that the official forwarded defendant PAPADOPOULOS's email
    to another Campaign official (without including defendant PAPADOPOULOS) and stated:
    "Let[']s discuss. We need someone to communicate that DT is not doing these trips. It should
    be someone low level in the campaign so as not to send any signal." 

    It gets better, from Page 8 on. I Got the DT's? (Donald Trumps) Time for my IV and Out.


  28. M    seeing 8000 lot trade of 2019 $15 puts.  Bid ask $1.63-$1.85    trade was at $1.83


  29. K and GIS    on somebody else's FU list


  30. TZA  Happy to report a bit of luck; in a fit of pique on Friday I loaded up on TZA naked shorts.


  31. Phil / SRC – What are your thoughts on this REIT?  I think it was on the buy list a while back and looks like it has stabilized from their April sell-off.  But any REIT in a rising rate environment might not be a good idea.  Thank you-


  32. Baron – TZA – I did to..just the stock only, averaging down…. come on sell off!


  33. Phil – RB  — nice work on KC.. I am still working my RB… are u shorting?  Still like the lines from last week?


  34. Sprint/TMobile merger is off.  S down 10%.  

    Going down/Naybob – This guy gives Teflon Don a whole new meaning – I wouldn't count on anything. 

    JO/Baron – Well, 0.05 no big deal but why pay anything?  As to some calls and not others, each stock has it's own implied vol and then there's factors like earnings or anticipated events that affect the amount of premium people end up bidding on various contracts.  

    Meetings/Naybob – But the question is, as it was in 1973: "What did the President know and when did he know it?"  Of course, back then, only idiots left a paper trail and he was still caught.  These days, every single person you talk to does 90% of their communicating via text or Email.  Then there's calendar data that can be pulled, GPS locations, etc.  Great for evidence-gathering.

    M/Stock – Hitting the 5% rule at $18.80.  

    Better to be lucky than good Baron but don't be greedy, that was a good dump.  

    SRC/EMike – There's a lot of investigation that goes into determining what's a good REIT.  SRC has not been on my radar.  I do know they tend to lease large commercial spaces, usually one tenant per location, which may not be a plus if they have the wrong tenants – that has to be investigated, as well as their financial conditions, loans, contracts, etc.  They collapsed in April after reporting high credit losses.  Do you know if they addressed that?  Things were better in Q2 but not good enough to do more than strong bounce off the floor into 11/2 earnings so a lot of people are waiting and seeing here.  

    A TA guy would say they filled the gap, failed and now are trending back down.  I see them maybe making $60M (10% revenues) against a $3.7Bn market cap so p/e is 60 for a REIT?  Not for me it isn't!  Also, they are possibly doing some kind of BS spin-out of 925 properties into a new REIT and those can be not only ugly but they can also screw current shareholders (like SHLD did with SRS).  

    /RB/Latch – Well I just missed a chance to get back to 1 short even at $1.703 but I don't mind being 3 short for the week.  


  35. 12:08

    MAT

    Mattel (+9%) recoups Friday's losses after BMO analyst suggested the company could be an acquisition target  (15.32 +1.32)

     

    12:06

    WBA

    Walgreens Boot Alliance shares recover from recent extended weakness after Director John Lederer this morning disclosed the purchase of 20k shares at $67 (transaction dated 10/26)  (66.08 +1.60)


  36. EMike/SRC

    I trade this, bought at 7.15 then sold calls and puts; was just taken from for nice profit.  In no hurry to  get back for Phil's reason's.  It appears to being sold on the fall and this bounce.  Earnings on my BDay 11/2.


  37. VZ- what just happened? Took an instantaneous dive?

    Related to Sprint/TMUS talks?


  38. Phil / SRC – Great info, much appreciated!!!

     

    Baron- Happy pre-birthday!  And I agree, this is definitely not a trade Ill pursue.


  39. Phil M 5% rule and I say it again the stock is a dying breed. MO, PM is down also .93 cents 1.03. People will not give up smoking even they have some Vulgar warnings here in Europe on the packets. But spending money at Macy's is luxury.


  40. yodi — it looks like a battle of the FU stocks to see which one will be crowned the biggest POS! Will it be TEVA, FTR, M, or GE? (GNC would be in the running but I got out at 10).


  41. FTR gets my vote….. :)


  42. Yodi - dying breed - "People will not give up smoking even they have some Vulgar warnings here in Europe on the packets. But spending money at Macy's is luxury."

    Thank you for my 2nd LMAO of the day.  I too have Nattered on this forum about discretionary spending and non essential luxuries. Aside from the excellent cigarette example, put it in perspective, Toys R Us shuttered and sold off FAO Schwarz, then went BK themselves.  If they can't buy toys for tots, well that sadly says it all. Now I really need a strong IV. Out.


  43. Nat   not too far behind tots are pets….TBD


  44. HOV -  cup. handle. break out soon?


  45. TEVA – Mizuho Securities reiterates Hold rating, $15 PT. This price target represents a 12.61% upside over the stock’s previous closing price of $13.32.

    OCT 30, 2017 | 2:16PM 


  46. Hi Phil.  In June I was put 1000 shares of FXP at 26.  Down 30% since then.   Was thinking of it as a hedge should China or our market collapse.  Suggestions please on how to proceed.  Thanks.


  47. Dathan – Knock it off, enough already with the FU crap brother. Guess I'll be seeing you tomorrow night. Happy Halloween. Smiley.

    Stocky – Pets, in times of crisis sad but true, however try these charts of late PETS (Meds), TRUP (Ins), IDXX (VetDiags).  Mutley Do Right? Out.


  48. Phil/RRD

    Can be bought at 9.20 with 6% div.  Then sell $10 calls and %8 puts for March.  Collect $1.20 and two div payments.  If between 8 and 10 in 137 days its 13% plus 3% div or almost 40% annualized, assuming my math is correct.  What do you think?


  49. RRD  Just one rub, earning are November 2


  50. VZ/Maya – Very strange but that's why we got out of them in the LTP – all the telcos are kind of shaky.

    You're welcome EMike.  

    M/Yodi – I think the death of retail is greatly exaggerated.  We'll know after XMas.  

     

    Our first holiday song!  

    And holy cow, this is funny too:

     

     

    HOV/Scott – Building very strong around here.  Was just up in Tarrytown and saw a massive project going up.  

    TEVA/Jabob – Woo hoo, $15!   I told you we were going places!   cool

    FXP/Taihu – Well you should always have covers otherwise you take the whole hit on the way down.  If you have 1,000 shares, you're down $8,000 and, of course, not much of a hedge if you're not exposed to China on the long side.  You could sell the stock ($18,375) and buy 40 of the June $15 ($3.80)/19 ($2.20) bull call spreads for $1.60 ($6,400) and those pay back $16,000 if FXP just holds $18, which is more likely than getting back to $26 and the same no margin with way less cash deployed.  

    RRD/Baron – Old favorite of ours but they split into 3 companies and we lost interest.  I don't have a good handle on the value of the new RRD or the stability of the dividend so I'd go in with a small amount at least until after earnings (tomorrow).  Remind me after they report and we can see what they look like.  


  51. phil,going back to my  question last wk,  b/c nov  sco $33/39 @2.20   also $35 puts  @3.00,have rolled the puts out to jan 18 $32.50 for $3.95


    • An earnings beat, guidance boost, and dividend increase on Friday added up to nearly a 5% decline in Simon Property Group's (NYSE:SPG) stock price that day.
    • Shares were caught up in the continued retail scare after J.C. Penney slashed its guidance, and inside the Simon Property numbers was a slowdown in NOI growth.
    • The plunge was "unduly harsh," says Boenning's Floris van Dijkum, noting a "vocal hedge fund crowd riding the e-commerce momentum."
    • Even modest buybacks could cool some fears and show management's belief in the stock's value.
    • He reiterates his Outperform rating and $240 price target (50% upside).
    • Source: Bloomberg's Lily Katz
    • Previously: More trouble for retail names sends landlords lower (Oct. 27)
    • Previously: Simon Property beats estimates, boosts guidance, hikes dividend (Oct. 27)
    • The largest U.S. oil ETF – the U.S. Oil Fund (NYSEARCA:USO) – saw its third consecutive weekly outflow last week, according to Bloomberg, with $84.6M pulled.
    • This comes amid a strong rally in the price of oil – above $54 per barrel this morning vs. under $50 three weeks ago.

    • Optimism is widespread for the first time in years among traders, smelters, miners and brokers gathering in London for LME Week, lifted by strong growth across the world’s key demand centers, supply curbs in China and a return of investor interest.
    • "The global economy looks much better than it has done probably since the crisis, maybe before that," says Saad Rahim, chief economist at Trafigura Group, the world's second largest metals trader.
    • Industrial metals have rallied sharply since the middle of the year: Copper is near $7K/metric ton, zinc has topped a decade high, and aluminum has jumped nearly 30% YTD, and brokers say macro hedge funds – once major players on the LME – are beginning to look again at metals markets.
    • On the LME, overall inventories are being drawn down, with stocks of metal in the LME warehouse system dropping to the lowest since 2008.
    • But global growth cannot continue at a fast pace forever and miners could respond to the metals rally by adding new production, warns Mark Hansen, top exec at mid-sized metals trader Concord Resources.

    • It's another ugly day for General Electric (GE -2.2%) shares, which are now on track to close at a five-year low and suffer the second six-session losing streak this month.
    • Deutsche Bank cuts its stock price target to $18 from $21 while reiterating its Sell rating, saying it will take years to work through GE's "operational and cultural challenges and establish a firm foundation from which the company can grow on a sustained basis."
    • Analysts at Evercore ISI note GE is pushing the argument that it is first and foremost a tech company, whose Mind + Machines conference last week "serves as a reminder that GE intends to reinvent itself as a more technology-focused company… GE’s vision of the future is that every job will be augmented by software."
    • Dunkin' Brands (NASDAQ:DNKN) is up 5.89% on heavy volume as rumors circulate indicating that JAB Holdings could be interested in adding Dunkin' Donuts to its stable of food brands.
    • JAB already owns Krispy Kreme, Caribou Coffee, Panera and Keurig Green Mountain.
    • It's not the first time the JAB-Dunkin chatter has circulated, but today's response from investors is more dramatic than in the past.
    • JPMorgan lowers Office Depot (ODP -16.3%) to Underweight from Neutral.
    • The analyst team warns on structural headwinds around office products consumption that will only "accelerate" in the future.
    • Shares of Office Depot are nearing their 52-week low of $3.01.
    • Sources: CNBC and Bloomberg
    • Target (NYSE:TGT) is down another 1% to drop back below $60.
    • The retailer was profiled over the weekend in Barron's as a stock that could return up to 30%.
    • "Longer term, demographics favor Target’s business, 80% of which is focused on household products, home furnishings, hardlines, and apparel (grocery and pet products supply the remainder)," writes Vito Racanello.
    • New brands such as children's apparel seller Cat & Jack and REDcard penetration upside are seen as two earnings drivers that could separate Target from the retail pack.
    • Target has outperformed the SPDR S&P Retail ETF over the last six months.

    U.S. box office haul for October a 10-year low

    • The Hollywood Reporter calls it a "box office bloodbath" after the movie industry records its worst October in a decade. The final weekend of the month was lackluster amid an intriguing World Series, the launch of a new season of Stranger Things on Netflix and headlines on the Harvey Weinstein continuing to reverberate.
    • Box office revenue for the month is down 13% Y/Y through October 29 and is likely to fall short of $600M for the full month.
    • The YTD box office is down 5.2% to $8.7112B.
    • Investors are taking it out on theater stocks. AMC Entertainment (NYSE:AMC) is down 6.09%, while Reading International (RDI -2.6%), Cinemark (CNK -0.8%) and Regal Entertainment (RGC-1.6%) are all lower. IMAX (IMAX -1.6%) is also in retreat even after it caught an upgrade earlier today.
    • Barrington Research boosts its rating on IMAX (IMAX -1.2%) to Outperform from Market Perform.
    • The analyst team sees some upside drivers for earnings, including new ways to use screens and seating configurations.
    • Barrington sets a price target of $32 on IMAX to rep 30% upside potential.
    • Previously: IMAX beats by $0.07, beats on revenue (Oct. 26)
    • GameStop (GME -3.3%) is offering an in-store rental service called PowerPass, reports Mashable.
    • A six-month subscription to PowerPass costs $60 and lets customers keep one free game after the subscription period ends.
    • The company is going to start signing up PowerPass subscribers on November 19.
    • GameStop is due to report FQ3 earnings around November 28.

    Sprint, T-Mobile pare losses as CNBC contradicts merger pullout

    • Another jump for Sprint (S -7.3%) and T-Mobile (TMUS -3.6%) — this time paring their worst session losses — as CNBC's David Faber reports a source saying SoftBank (SFTBY -2.7%isn't planning to withdraw from merger talks as soon as tomorrow, as previously reported.
    • SoftBank and T-Mobile parent Deutsche Telekom (DTEGY -2.2%) are struggling over governance and pricing issues, Faber reports, but he's contradicting Nikkei's take that SoftBank is pulling out entirely.
    • SoftBank has bounced off U.S. session lows on the news as well.
    • Previously: Sprint, T-Mobile slide on report SoftBank is killing merger talk (Oct. 30 2017)
    • Quick moves are taking place in wireless-industry shares after a report from Nikkei that SoftBank plans to end talks regarding a merger between Sprint and T-Mobile.
    • AT&T (NYSE:T) has made a quick slip, down 1.3% in recent minutes, while Verizon (NYSE:VZ) is off 2.2%.
    • Meanwhile, Dish Network (NASDAQ:DISH) — long discussed as a potential tie-up partner due to wireless airwaves that it's been hoarding — is quickly up 4.7%.
    • Cablecos Comcast (CMCSA -0.9%) and Charter (CHTR +2%) — which both are making early moves into the wireless-service market — are having more muted reactions to the news.
    • Sprint (NYSE:S) is now off 8.5%. T-Mobile (NASDAQ:TMUS) is down 4.8%. SoftBank (OTCPK:SFTBY) has joined decliners in U.S. trading, down 2.7%; and Deutsche Telekom (OTCQX:DTEGY) is now off 1.6%.
    • Updated 1:34 p.m.: Stocks in cell-tower companies — which have been in a general decline on the prospect of dealing with one less major wireless-carrier customer — are rising. American Tower (NYSE:AMT) is up 3%; SBA Communications (NASDAQ:SBACup 3.3%; Crown Castle (NYSE:CCIup 3.7%.

  52. Phil any thoughts on our SCO spread? Any adjustments to be made or should we just let it play out and if we are assigned sell the calls until we get called away?

    it was the 33/39 NOV BCS 

    selling the $35 NOV puts 


  53. SCO/Jash – Well that was the right call on the puts and there's no reason to buy back the short calls (0.10) as they should expire worthless and the $33 calls are 0.50 and you can roll that out to the April $27 ($6)/35 ($3) bull call spread at $3 which makes 100% at $33 with a bonus 40% at $35 so if, for example, you are down $6K, then $6K spent on that spread (20 contracts) is a realistic way to position yourself.  Notice though, the $27s are $6 and you are spending $3 on the spread, when the price of the $27s drops to $3 – that's the time to do the next roll (if necessary) so you can recover what you put in.  

    If you did the original OOP spread, we did 20 of the $33/39 spreads at $2 ($4,000) but we sold 10 of the $35 puts for $3 ($3,000) so our net cash entry was $1,000, which we recover selling the calls but we should have done the roll when they failed $2, not 0.50.

    Anyway, officially for the OOP, let's do the following.

    • Roll 20 SCO Nov $33 calls (0.50) to 20 April $27 calls at $6 ($12,000) 
    • Sell 20 SCO April $35 calls for $3 ($6,000) 
    • Roll 10 SCO Nov $35 puts at $4.50 ($4,500) to 15 April $29 puts at $3.50 ($5,250)

    Our net out of pocket is $4,250 + our original net was $1,100 so we're in the spread for net/net $5,350 but the spread is more than $6,000 in the money – so we're off to a good start on our adjustment!  


  54. More selling pressure into the close.  

    Go long handcuffs!  


  55. HFC – trying to break up…


  56. Pot Stocks

    I watched The House last night on DVD. Not really funny considering the cast, but Amy Poehler looked great and she spent the entire movie smoking pot.  So mainstreet and yet so many punishments. 40 years ago pot was highly illegal but no one cared; now its highly legal but where it is not, zero tolerance.


  57. Thanks Phil.


  58. Picked up a bit into the close.  Nas closed green but RUT down 1%.  

    Still, it was Monday, so doesn't matter.  Not much movement for the past two weeks actually.  255 on Oct 4th – very flat month. 

    Date Open High Low Close* Adj Close** Volume
    Oct 30, 2017 257.07 257.60 256.41 256.80 256.80 46,135,813
    Oct 27, 2017 256.47 257.89 255.63 257.71 257.71 83,149,700
    Oct 26, 2017 255.99 256.30 255.48 255.62 255.62 69,798,000
    Oct 25, 2017 256.18 256.31 254.00 255.29 255.29 103,715,300
    Oct 24, 2017 256.60 256.83 256.15 256.56 256.56 66,935,900
    Oct 23, 2017 257.48 257.51 256.02 256.11 256.11 63,915,300
    Oct 20, 2017 256.70 257.14 255.77 257.11 257.11 89,176,400
    Oct 19, 2017 254.83 255.83 254.35 255.79 255.79 61,903,800
    Oct 18, 2017 255.90 255.95 255.50 255.72 255.72 40,888,300
    Oct 17, 2017 255.23 255.52 254.98 255.47 255.47 31,561,000
    Oct 16, 2017 255.21 255.51 254.82 255.29 255.29 38,221,700

    Pot/Baron – I don't know what it is in NYC but I've never seen anyone busted for walking around with a joint.  I think the last holdouts against legalization are giving up soon – hence the investments by big companies.  

    You're welcome Taihu. 

    Dollar down half a point today (94.32), that was a bit supportive.  

    NKD took a nice dive – missed that.


  59.  

    Phil/ Pot     holdouts, dominoes are falling

     

    Texas Issues First Medical Marijuana License

    Texas has issued its first medical marijuana license and two more companies are expected to be awarded licenses soon.

    https://www.usnews.com/news/best-states/texas/articles/2017-09-06/texas-issues-first-medical-marijuana-license


  60. Pot Stocks

    Yeah, but  my apt complex has it in it lease specifically that pot is illegal and use will result in eviction.  Now that is AZ, which is "conservative" and surrounded by legal states, but still, back in high school in the 70's everyone, well not everyone, was stoned, and my teachers didn't care, in fact, I had smoked with several.  But now, God forbid you even look stoned in high school; they will search you. Zero tolerance.


  61. TSLA / Phil – Interesting article here on the Model 3 production line.  https://dailykanban.com/2017/10/source-tesla-responsible-model-3-production-hell/   

    Worth a read but the most interesting part to me was the lack of a "cold build" by the supplier at their own facility before shipping to Tesla.  Before the supplier shipped the line to Tesla, they had completed a cold build for another manufacturer for a 2020 model year vehicle.  "That project was started a year before work began on the Model 3 line and it was built, tested, disassembled and shipped to the factory before the supplier even started shipping elements of the Model 3 transfer line. That product is currently in validation/pre-production testing and will not become available until the second half of next year."  Article also suggests a second line is required to meet Musk's target production levels and there is not enough space in Fremont to build it and this line has not even been ordered. 

    I am wondering if Musk can pull another rabbit out of the hat like he did last quarter on what were bad results but made to look better with the $100million in ZEV credits which led the stock to fly up.  Now at $320 more or less back to where we were before the last earnings report when it went from $311 to $370.  Worst earnings call I ever heard to boot.  I currently am short with partial cover on put sales but

    Phil if you have a recommended short play, for those willing tolerate a bit more risk than in the porftfolios I am interested.  I have 600 shares short, 3 short November puts from $310/$315/$350 after removing covers on 3 other short puts.  Overall positive on my position to date. I went with short sales and short puts since buying puts was expensive for TSLA shares.  Earnings after the close on Wednesday. 

    I think this could be the quarter the truth catches up to Musk but I have been wrong for a couple of quarters on this.  On the flip side, his lack of updates make anything possible and I have seen 2 Model 3's driving in Toronto in the last week (out of a few hundred produced?) so I wonder if in stealth mode they have been more successful in production than articles suggest. 


  62. Happy Halloween!

    • More than 179M Americans plan to celebrate Halloween this year and are expected to spend about $9.1B on costumes, candy and parties, according to the National Retail Federation.
    • That's an all-time high since the association first began tracking Halloween spending 12 years ago.
    • "Retailers are helping customers celebrate in style with a huge selection of costumes, candy and decorations to cater to ghosts and goblins of all ages."

    Pot/Baron- Well it's like being the last dry states, I guess – they ratchet up the intolerance to compensate.

    Schultz/Jabob – Notice the news has gone 100% negative on them ahead of the announcement.  Now the scene is set for Schultz to be the savior (and justify hundreds of millions in stock options).  

    TSLA/Stu – They simply don't have the expertise to mass-produce cars.  Musk should have hired an ex big-auto CEO long ago to take care of that stuff.  His asinine assertion that he could re-invent the manufacturing process – as if everyone who went before him working their way up from the assembly line to run auto companies were incompetent – that's been his undoing.  Is he an egotistical asshole or a con-man?  That's the unanswered question.  

    The con man issue raises a problem because you can't trust Elon Musk to deliver an honest earnings report, which makes shorting them especially dangerous.  I'm hoping they pop 20% on earnings so I can short them at $380 again.  At $320, I don't want to play.  

    IF I were going to short them now, I'd go for the April $370 ($65)/$320 ($34) bear put spread at $31 and sell the $350 calls for $23 to net $8 on the $50 spread that makes $42 if TSLA is simply lower than it is now.  

    You have 600 shares short and some puts but my trade breaks even up to $360, where you'd be down $40 and it pays $42 (6 x would be $25,200) if TSLA is simply below the current price.  You need it to fall to $280 to make the same money.  So my trade is better in all respects except that it limits your gain in some fantasy camp world where TSLA drops below $280, which is possible, but if they are going that badly, THEN you can layer on more shorts.  

    Europe is slightly green and our Futures are up a bit too:

    I can see why the RUT is slipping, tons of misses now that the smaller companies are reporting!  

    What a Jerome Powell-led Fed may look like

    Here's everything you need to know about Jerome Powell, Trump's likely pick to lead the Federal Reserve

    The US Government Quietly Added $200 Billion To The National Debt This Month Alone

    ?Eurozone inflation slows in October

    • Despite the bloc's strengthening economy, eurozone inflation unexpectedly slowed in October, cooling to 1.4% from 1.5% in the previous month.
    • ECB President Mario Draghi has already warned that headline inflation figures will probably decline over the next few months due to the rebound in oil prices.
    • However, core inflation, which excludes volatile energy, food, alcohol and tobacco prices, also dropped, falling below 1% for the first time since March.

     

    China Factory PMI Falls From Five-Year High on Pollution CleanupChina’s official factory gauge fell this month, with new orders and prices leading the decline, as officials increasingly prioritize a campaign to clamp down on polluting industries and rein in debt.

    China PMIs Disappoint, Tumble In October

    China's Record Yield Curve Inversion "Spells Disaster"

    Tax Turmoil & China Contagion Slam US Stocks, Treasury Yields Tumble

    Japan’s Industrial Production Declines 1.1% in September. (videoJapan’s industrial production declined in September from the previous month, while the labor market remained the tightest in decades and household spending fell modestly.

    • Even as its peers in the U.S. and Europe begin to wind down stimulus, the Bank of Japan is holding its monetary policy steady, holding its short-term interest rate at -0.1% and maintaining its yield curve control and asset purchases.
    • The BOJ also trimmed its inflation forecasts, expecting core consumer prices to grow 0.8% in the fiscal year 2017/2018, lower than its previous projection of 1.1%.

    More record profits at Samsung Electronics

    • The semiconductor supercycle has propelled Samsung Electronics (OTC:SSNLF) to another quarter of record operating profit, which nearly tripled to 14.53T won ($12.9B) in Q3.
    • As a result, the company will double annual dividends to 9.6T won ($8.5B) in the next three years, with 2017 capital spending to reach 46.2T won ($41B).
    • Leadership changes? Samsung also recommended a new board chairman amid changes at the top of its three main divisions.

    Alphabet ditched autopilot feature

    • Waymo (GOOGGOOGL) stopped developing features that required drivers to take control in dangerous situations, according to CEO John Krafcik, as autopilot reliance left users prone to distractions and ill-prepared to maneuver.
    • "What we found was pretty scary… It's hard to take over because they have lost contextual awareness," he said during a media tour of a Waymo testing facility.
    • "Our technology takes care of all of the driving, allowing passengers to stay passengers."

    Apple(AAPL) Designing iPhones, iPads Without Qualcomm(QCOM) Parts, WSJ Says

    Facebook: Russian-related posts reached 126M people

    • In prepared testimony that it will present to Congress, Facebook (FB +1.1%) says that posts from accounts backed by a pro-Kremlin group reached 126M people at some point over a two year period — a number equivalent to about 40% of the U.S. population.
    • Some 29M people directly got served contact from the pro-Russian group the Internet Research Agency. Those posts traveled to the news feeds of 126M total through likes, shares and comments.
    • The prepared testimony portrays a shocked company looking to implement solutions to prevent such an occurrence in the future.
    • “The foreign interference we saw is reprehensible and outrageous and opened a new battleground for our company, our industry and our society,” testimony from General Counsel Colin Stretch reads.
    • Twitter (TWTR -2%) now says that it's found 2,752 accounts tied to Russian operatives, significantly more than it first reported.
    • Those accounts sent 1.4M tweets about the 2016 U.S. election, it's telling Congress.
    • In September it said it had found 201 accounts so linked.
    • The company notes that all 2,752 accounts have been suspended, and the account names have been provided to congressional investigators.