KO disappointed.
It's not good when Coca-Cola misses revenues. It's usually an indication that the consumer is really hurting. Net Income fell to .59 for the quarter, down from .61 last year but it was the 3% drop in Revenue that was surprisingly light, leading CEO Muhtar Kent (a straight-shooter – see my 2010 interview) to state he "was not happy with our performance." The beverage maker cited "a challenging global macroeconomic environment" and bad weather for its performance.
Rather than shorting KO, we're shorting oil this morning and I sent out a tweet early this morning, identifying a shorting opportuntiy on /CL Oil Futures at $106.45 but we stopped out of those at $106.50 and now we're looking at the $107 line as our next shorting target, waiting for the big drop we are fairly positive is going to come as we head into the NYMEX contract rollover next Monday. I'm not going to get into it again (see last few weeks of posts) but the bottom line is they have faked way too many orders for September and now they have just 5 sessions to cancel or roll 130,000 contracts, about 25,000 contracts per session and, yesterday, they only managed to get rid of 13,000 – that does not bode well for the NYMEX Fraudsters.
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Click for
Chart |
Current Session | Prior Day | Opt's | ||||||||
| Open | High | Low | Last | Time | Set | Chg | Vol | Set | Op Int | ||
| Aug'13 | 106.44 | 106.74 | 105.91 | 106.47 |
05:23 Jul 16 |
– |
0.15 | 16473 | 106.32 | 138979 | Call Put |
| Sep'13 | 105.96 | 106.24 | 105.46 | 106.05 |
05:23 Jul 16 |
– |
0.13 | 6807 | 105.92 | 336220 | Call Put |
| Oct'13 | 104.64 | 104.80 | 104.11 | 104.66 |
05:23 Jul 16 |
– |
0.17 | 1101 | 104.49 | 125043 | Call Put |
| Nov'13 | 103.20 | 103.20 | 102.75 | 103.06 |
05:23 Jul 16 |
– |
0.07 | 561 | 102.99 | 74312 | Call Put |
| Dec'13 | 101.63 | 101.82 | 101.16 | 101.77 |
05:23 Jul 16 |
– |
0.21 | 1132 | 101.56 | 211463 | Call Put |
By next Monday, all but maybe 15,000 of those contract (1,000 barrels per contract) will disappear. This will create an artificial shortage of oil in August as no orders mean no deliveries and no deliveries mean inventories will be drawn down, whether demand is actually there or not. We'll watch this crime in action this week as NYMEX Terrorists threaten our Nation's energy security by tearing up oil contracts (that are already approved for delivery), choking off the supply of oil to our great nation and extorting Billions of excess Dollars from US Consumers at the pump, in the Airlines and to heat, cool and power their homes and businesses.
As usual, our leaders will do nothing.
No wait, I take it back. As usual, our leaders will collect another $30M in bribes from the Koch Brothers. That's the Koch's average annual spending to buy better themselves better Government. It's only a sliver of their $50Bn fortune (50,000 Million and, as you can see from the chart on the left – they sure get their money's worth) but there's only 435 Members of the House of Representatives and 100 Senators and $30M/535 is still $56,000 per Congressman from the Koch brothers alone. Given that about half of those Congresspeople are Democrats, who generally get $0 from the Kochs – we're into 6-figure pay-offs to the average Republican.
In fact, according to the Kochs, those bribes alone makes their Republican cronies 3x richer than the top 1% (I kid you not, this is their actual video explaining it):
That's right you "poor" people – suck it up, you're 10 TIMES richer than people who are REALLY poor so stop your whining and vote to end that minimum wage so you can compete fairly with people making $2.50 a day in China!
According to the Koch Brothers, making $34,000 a year for a family of 4 puts you in the Global Top 1% – so your interests and their interests are perfectly aligned! If this is the kick-off to the 2014 mid-term election strategy for the GOP, I know a lot of Democratic strategists who will be having a party this weekend!
The GOP is convinced they are going to take back the Senate next November because Americans are sick and tired of getting JOBS and having PEACE and PROSPERITY, with a stock market that is now up 200% since finally getting rid of George Bush II in 2009. We don't want those high-mileage cars or roads without potholes to drive them on. We want FREEly poluted water and air that you can cut with a knife – just like China!
That's how we compete globally in the Koch Brothers Fantasy Camp – drop US wages to be on-par with the rest of the World (10% of what we make now on average), stop taxing Corporations and Wealthy Individuals (like the Kochs) and let those Corporations do what they want (as if they don't already).
If you aren't for those things – you are a Godless, Anti-American Communist who should stop voting and leave the country (where the new immigration laws will prevent you from coming back).
Speaking of Godless Communists, China financial instability du jour is an 800% increase in WMPs, or "Wealth Management Products" where over $1Tn of Chinese savings (the size of Australia's total economy) is now in instruments that are, essentially, Ponzi schemes, where the investor puts in money for "guaranteed" 1% WEEKLY returns.
As investors pile in, financial firms need more inflows of cash to pay off maturing products, resulting in mounting risks that prompted China Securities Regulatory Commission Chairman Xiao Gang to call them a “Ponzi scheme” even before the latest record purchases. Issuance of new products and borrowing from the interbank market are among the most common ways banks pay out maturing WMPs, according to Fitch.
“The WMP market has inflated to a huge size,” said Wilson Li, a Shenzhen-based analyst at Guotai Junan Securities Co. “Should they go bust, Chinese banks have their reputation on the line, and they face the risk of compensating investors because of pressure from the general public.” A record 1,137 WMPs were sold by about 70 banks in the two weeks ended June 28, an increase of almost 50 percent from the first two weeks of the month, according to Benefit Wealth, a Chengdu, China-based consulting firm that tracks the data back to 2007.
“In an environment where liquidity is tight, banks will find it more and more difficult to attract fresh money to keep the game going,” said May Yan, a bank analyst at Barclays Plc in Hong Kong. “Until investors are hit by a real default, they won’t understand what they are really buying into.
Our June CPI was 20% too strong (up 0.5% for the month) and our Chain Store Sales were 20% too weak (up 3% from last year vs. up 3.6% last week) and Retail Store Sales were DOWN 1.1% for the week vs +3% last week and that's dropped the annual run rate from +2.9% to +1.7% on this week's total disaster as people's disposable income goes into the gas tank – THIS IS NOT COMPLICATED FOLKS!!!
The American consumer is at the end of their rope and it's not like Europeans or Asians or Emerging Marketeers are carrying the consumer ball for the Global Economy. Corporations are not spending and the Fed is telling them that, IF they hire, THEN the Fed will cut off the Free Money. So, surprise, surprise – THEY'RE NOT HIRING! Again, not complicated – very simply cause and effect all around.
On the bright side, Goldman Sachs DOUBLED their profits to $1.93Bn as endless supplies of Free Fed Money was converted into incredible trading gains on the stocks, currencies and commodities they manipulate – accounting for $2.46Bn of the bank's Revenues. Oh, and please, please, PLEASE do not bee fooled by "just $1.93Bn" in profits for GS – that's AFTER they distributed $3.7Bn to compensate their employees (32,000, so $1M each if distributed evenly, which it's not!) through bonuses on the $1.93Bn the company allowed to trickle down to their stocksuckersholders.
Don't bother sending this article to your Congressman if you want things to change – send them a check instead – that's how the Koch brothers get things done!
Oil Lines
R3 – 109.06
R2 – 107.9
R1 – 106.97
PP – 105.81
S1 – 104.88
S2 – 103.72
S3 – 102.79
Yesterday's high and low – 106.74 / 104.65
I won't be around at the open so I will update the portfolio a bit later when I come back in front of my PC.
This one is working, Phil.
You're shot out of a cannon today, Phil. Great article.
Good morning!
Big wheeee! on oil finally, $107 did the trick and we're flying down below $106.50 to $106.33 so stop at $106.50, of course. We still have API tonight and EIA inventories tomorrow but the key is that HUGE overhang of contracts that MUST clear in 5 business days.
Generally bad macros this morning but TSLA's dropping like a rock despite a moronic upgrade to $230 from Northleand Capital, whoever they are. Goldman just called them out and used my logic (and my price target) to do it so I'll be nice to GS for the rest of the day.
Phil If you can handle NFLX as you handle TSLA you are my man!!!
Hey Phil, I think the GM math is off. It looks like it should be: (1.55 * 5 = $775) – (3 * 1.25 = $375) = $400 credit not $505 credit. Do you think the trade still makes sense?
The volume just wasn't there so nothing the market did matters. Now we have our usual Tuesday AM pump job but it's not likely to hold off that retail data and, don't forget, as I pointed our earlier, the only reason we're not opening down 0.5% is because the Dollar was dropped to 82.60, from 83.60 on Friday, so more than 1% in two days.
Good job on oil Bruce but I hope you are not being greedy as we're back over $106.50 again.
Thanks Dennis, I could have kept writing on the Kochs for hours, those guys really piss me off!
Homebuilder sentiment is going to be our best news of the day at 10 – we'll see how we get through that.
At the open: Dow +0.02% to 15488. S&P +0.07% to 1684. Nasdaq +0.06% to 3610.
Treasurys: 30-year +0.07%. 10-yr +0.01%. 5-yr +0.01%.
Commodities: Crude +0.19% to $106.12. Gold +0.55% to $1290.55.
Currencies: Euro +0.42% vs. dollar. Yen -0.38%. Pound +0.05%.
10:01 AM On the hour: Dow -0.09%. 10-yr +0.07%. Euro +0.47%vs. dollar. Crude +0.25% to $106.19. Gold +0.53% to $1290.35.
Market preview: Stock futures have leveled off after CPI came in slightly higher than expected, with the S&P Mini almost unchanged. Market economist Peter Cardillo reckons the market will "take a rest after its run to record highs." Coca-Cola -2.8% on the heels of disappointing earnings, although Goldman Sachs is +1.1% and J&J is +0.7% following their results. Later: NAHB Housing Market Index
Bought some NUGT @ 5.81. Sold Aug 6 calls for .80. If stock @ 6 or higher at expiration, it's a 17% return for 31 days. If ABX, the poster child for weak gold stocks, can rally. NUGT should be good for a bounce. If not, I'll write it again. Not selling puts at this point.
Phil – BAC earnings are tomorrow am, and they've done nothing but climb the last month. How about a backspread on them?
NFLX/Yodi – That one is completely out of control but some thing – we focus on the $500+ we lost and simply make a new bet into earnings at this insane number ($265 today).
GM/STP, BGB – Thanks for fixing the math. Credit $400, not $505 but I do still like the trade as that Europe number was very bad (see morning news in last post).
TSLA bagholders having trouble finding real buyers at $120!
NUGT/Albo – I like that play as we really don't see gold staying below $1,250 for long. In fact, EGO just scrapped a mine and cut E&P over price of gold (news above) so we are, in fact, at the breaking point where the price of gold forces production cuts. This is exactly WHY I like to back the biggest and best commodity suppliers like ABX, BTU, FCX, even XOM when their commodities crash, as they are best able to weather the storms and come out the other side usually stronger than they went in.
BAC/Deano – C just had nice numbers and are up 1% and BAC was my stock of the year last year and $15 is my long-term target so, to some extent, I think they are just finding their proper level.. C is justifying a 100% gain from last July, BAC was $7 last July and now $14 so I don't see them as a good bear bet and the premiums aren't such (.40 for the Aug $14s) that you want to risk a 10% move going against you ($1.50 to $15.50). So I would just stay away or, if you want to have real conviction shorting, the Aug $15 puts are just $1.10, wich only .10 of premium into earnings and the $14 puts are .40 so you can do that spread for net .60 and make .40 (66%) if BAC fails to get over $14 – much simpler than a backspread – IF you want to be bearish.
Oil failing $106!
NFLX/Too expensive: wow- up again. June 26 they were around $212. I have a Sept 205/225 BCS and the long prems are not moving- the short is up 4.24… (go figure) the short put Jan15 $145 has not budged either. What gives?
A number of Momos getting hit today:
TSLA, SCTY, LNKD, XONE, SSYS, CMG, etc. NFLX Didn't get the memo.
DVA/ Phil: "once they have you on it they have you forever"– Kinda like smokes. That might make a good portfolio as a side or an add to the Income Port- a basket of got you for life products. I'd like to head that up if possible. Starting with the following categories: Banking, Consumables, Entertainment, Medical. Any other catedgories to look into? Some holdings may overlap.
I think that cashing in at least 1/2 of the TSLA puts is the prudent thing to do!
Phil – thanks for your input as always. I'm just curious on how your target on XLF was $20, and how you don't see see BAC as toppy here. Did you think WFC, GS & JPM were going to miss, or has your mind changed on XLF? Thx
Got you/Newt – in ancient times "cobbler" was a very secure craft, because people always need shoes. Still do.
Koch/ Rant:
http://www.youtube.com/watch?v=9444NNJ-S_c
Lyrics:
http://www.metrolyrics.com/grievance-lyrics-pearl-jam.html
SCTY down 5% as well, glad we took the long money and ran yesterday!
ABX $15.80 – the world is going sane all of a sudden!
NFLX/Newt – The bull call spread won't do anything as the short calls have more premium than you do on the long side. Not much you can do about that except let it burn off. When a stock goes up violently (applies to put side too) the intenal volatility goes up and the options stay expensive – not good if you are an impatient seller of options who needs to see immediate gratification but just fine for a guy like me, who's happy to be "on track" and ignores the noise in between.
Momos/Albo – As I noted with Jabob yesterday, it's just about when people reach their capitulation breaking point that we tend to have these turns. That's why I prefer fundamental trading – once you learn to have convictions, they make your trading life a lot easier.
I like that idea of a Life or Death Portfolio, Newt. Funeral business is good too along with hospitals, etc.
XLF/Deano – That's the same target we had for ages as $20 is a very significant upside resistance and 100% over the 2011 bottom and 50% over the 2012 average and, frankly, the bank earnings are not growing that fast and they are only growing due to QE and rising rates are huring the non-iBanks (haven't reported yet) and the economy sucks. So, on the whole, $20 is likely to be, at best, a consolidation point (meaning selling calls over it makes sense) and, at worst, at top on the way back to re-test $18 (20% retrace), which also happens to be the 200 dma.
Cobbler/Snow – Only now you have to know the Chinese word for cobbler!
Rants/Newt – Speaking of rants, John Oliver had a great commentary on Zimmerman yesterday (video below) but first, you have to check out this one.
The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Indecision Political Humor,The Daily Show on Facebook
Pharm/ Any adjustments to your weekly AAPL butterfly?
LV Meeting Update Novmber 10th and 11th 2013
I have been negotiating with Caesars in LV and have come up with the following deal (for it to work we need at least 40 people to commit)
the room rates at Caesars for Sat and Sun are $259 +tax, $109+tax respectively–no resort fee–free internet in rooms
registration fee will be $400 for the first 20 who sign up with a rebate of $75 from the next 20 who sign up and the 2nd 20 and the 1st 20 will get another rebate from the 3rd 20 who sign up—please note that the rebates are contingent on getting 60 or more registrants–(are your eyes glazing over as yet) the breakdown is as follows
1st 20– pay $400 -$75 -$50
2nd 20– pay $400 -$50
3rd 20 –pay $400
Two meals are included—lunch on Sunday and breakfast on Monday
please e-mail me asap at savi_ted@hotmail.com
Phil – that's my point, and given that BAC is a component of XLF, not sure how you're bearish (or at least not bullish) on XLF, and more bullish on BAC? It seems to me that BAC is one of the weaker components in XLF – so just trying to understand -thx
NFLX wait for $300 and then make a million dollars.
XLF/Deano – BAC, C, GS, JPM are all going to hold XLF up. Regional banks will likely be under pressure as will insurers and that will pull it down. $20ish is equilibrium.
$300/BDC – I just may have to try that play (maybe 500 $100 puts for about .20) – just in case it works out…
phil,
morning, few smiles vis a vis tsla today.
need some advice re managing position.
based on last weeks discussion, i now own 10 bcs 100-150.
im short 20 jan 125's and 5 sht jan 15 125 (from roll last week) and sht 8 jan15 95 puts.
can you give me an idea i.e. an outline on how to go reducing exposure/ minimize loss as we go down in price. for instane tos is showing a + 12k today. am i right in trying to reduce my exposure. i.e. buy back 5 call and 2 puts or let this play out since i have re worked the position based on the 125 + price last week. tks
p.s. based on the latest prices not original if i bought back 5 call +3500 and 2 puts -600
NFLX / $0.20 — those are the types of plays I like….
I think PCLN might fall apart if there is a general market downturn. Premiums are high. Maybe a bear spread?
I'm looking for <800 or so by mid August.
Phil // TSLA
Funny. I've been waiting for this and now I'm like a deer in headlights.
I have the +40 bull call spread ( $100/140 ) still profitable and the -20 short $150's up 23%
what would the strategy be here ?
do I cash oiut half the bull call spread to cover the shorts and let it run ?
do I cash all the shorts and wait for a bounce ?
love your instincts here //
Phil–you broke out of the slump!!!!
somehow I just bough BLDP Nov13-4c for 0.05
bioD: I agree NF*X – sold a couple of July 20 $285s, if it jumps over 8% today then I am defintely a monkey's uncle.
This morning, Jefferies increased its price target on shares of Priceline.com (PCLN) to $1005 as travel demand to Europe is improving. With the higher price target, Jefferies increased its EPS estimates through 2014 and reiterated its buy rating. Shares of Priceline were lower today, falling 1.3% so far.
UBS increased its EPS estimates on shares of Priceline.com (PCLN) through 2014 as the company should continue to outperform its peers. In the report, UBS reiterated its buy rating and set a price target of $1035. Shares of Priceline were lower, despite the report, falling 0.8%.
TSLA/Mill – LOL, now you're worried about them going DOWN? That's too funny! If you remember, those are the ones I was worried about and you were supposed to put a tight stop on 1/2 of them because, as I said: "you can always re-cover if you think the stop shouldn't have triggered but you'll be much more pissed if TSLA falls below $95 and you're stuck with short puts."
Anyway, So, you have 10 $100/150 bull calls spreads (2015?) and you're short 20 Jan $125 calls and 8 Jan $95 puts (should be 4). I'm not sure where you stand overall but, if you are + $12,000 today and that makes the whole trade even(ish), then why not shut the whole thing down, take a day or two off from it and come back in with a small, sensible trade (if you still feel like playing in the madness).
As you can see from our STP move – I'd rather be small and flexible with such a crazy stock and ONLY press our bet when it's extreme in the range. Since our range is $85-125 – $115 isn't as extreme as $130 was and, so, I'd rather have ligher bets.
If you want to get move short, you are better off selling one of your long $100s and letting the short $15s hang out to dry as you can always roll the short puts (unless you detest the idea of owning some TSLA one day). I'd hate to see the puts crush you as TSLA can easily drop back to $100 and maybe lower if they blow earnings and, if you're worried about the PRICE of them and not the value – you're not going to like the result but I'd focus on the fact that you made $12,000 on your position, DESPITE the fact that it's offset by 8 unfortunate puts where the losses are 100% premium – so you made a lot more than that on your main position.
NFLX/BDC – Fun to go for 10 time on different things and, if you hit one – it was all wortth it!
PCLN/BDC – Too scary to short. There's a real business under there. Like LNKD.
TSLA/Wombat – Another one??? If you had 40 long spreads and just 20 short calls, you weren't very bearish. The bull spreads are 2015, they're only $13 and the short $150s (Jan?) are now $9 and the net delta of the spread is not even .20 and the delta of the short calls is .31 so it turns out you are only .10 bearish per $1 – a very tedious way to make money! I'd certainly cash out half the spreads so you are "normally" bearish on TSLA and you can always add them back if it bounces but, otherwise, you wait for expiration with a 3:1 delta advantage to the downside.
Thanks Jabob – like all streaks – they tend to come to an end.
BDLP/BDC – Never hurts to ask.
NFLX/ZZ – Hopefully not today but on earnings – who knows?
PCLN/Jabob – I guess travel is improving as everyone rushes to get out!
everyone lovws pcln
http://beta.fool.com/robertbaillieul/2013/07/15/7-core-growth-stocks-for-your-portfolio-priceline/40097/?source=eogyholnk0000001
VEGAS baby! Game on! Thx Savi.
AAPL butterfly….no adjustments lionel. this was an all or nothing trade. If you are even or up, get out if you don't like the action. I think they pin on that MA line which is…..right at the butterfly body…
LV Update
5 of the first 20 spots are taken
Abx yeah! Tsla seems it’s a day to kill the greedy bastards or ad driven stock buyers. We might see $100 by the end of today, then strong reversal in tomm? Who knows… 🙂
phil,
im going to review all the rolls etc to see what it comes to……but pls the last thing im worried about is tsla going down……
i would love to see the sht 95 puts itm (big f/n smiley face)
I actually just made money on TSLA… wow! thx guys for keeping it real here!
1:30 PM Checks suggest Priceline's (PCLN -1.8%) Booking.com unit is seeing strong user review and listings growth, and continues to grow beyond its core European markets, says Jefferies' Brian Fitzgerald, who is raising his PT to $1,005 from $860. Fitzgerald, who is nudging his EPS forecast higher, adds traffic data points to strong unique visitor growth for both Booking.com and discount hotel reservations site Agoda. Fitzgerald's note comes a day after UBS raised its PT to $1,035, and a week after Morgan Stanley upgraded Priceline on expectations of stabilizing margins (thanks to lower search ad spend growth).Read comments
I think TSLA at 65 at end of week would be just super!
Does anyone have Phil's REIT list?
Thanks Pharm
Phil // Update
No, not another one – same position with mods. I widened my bull call spread per your advice to Mill and also pushed my short callers up to $150.
I could kick myslef for not selling half the bull call spreads yesterday but it is what is.
I rolled the spreads for a $5 credit so they are now $13, correct.
+40 Jan15 $100/140 Bull Call Spreads ( $5 credit ) / combined P/L +75K
-20 Jan15 $150 short calls ( sold for $30 – now $18 ) / +23K
I was going to sell half the spreads this morning but it seems too late now – should I wait until their is a bounce tomorrow or the next ? I was thinking they would at least attempt a comeback being TSAL zealots and all ; >
I'm also thinking under $110 by back the short $150's, and then sell them again when they bounce.
I was also thinking of after ( if ) they bounce enough to flip the spread bearish ( $140 / 160 ) TOS says 8K in MR.
Phil
Do you think AT&T will buy some of the EU phone companies?
Any guess on which one or two?
Thanks
AGN- Pharm- was that your play? What do you make of the chart today?
yen strengthening too much..dxj under pressure
cities in italy being downgraded just now…rome, milan, turin, liquria, sicily
AAPL TRADING WELL TODAY..AAPL/GLD CORRELATION STRENGTHENING..HA
RUMORS OF HILLSENRATH ARTICLE LATER TODAY