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Wednesday – Waiting for the Fools on the Hill

Day after day,

Alone on a hill,

The man with the foolish grin is keeping perfectly still

But nobody wants to know him,
They can see that he's just a fool,
And he never gives an answer

the fool on the hill

Well on the way,

Head in a cloud,

The man of a thousand voices talking perfectly loud

But nobody ever hears him,

or the sound he appears to make,

and he never seems to notice,

the fool on the hill,

And nobody seems to like him,

they can tell what he wants to do,

and he never shows his feelings,

 

But the fool on the hill,

Sees the sun going down,

And the eyes in his head,

See the world spinning 'round.

INDU WEEKLYBen Bernanke speaks to Congress today in a true test of the greater fool theory as all of the people in the Capitol attempt to fool all of the people in the World, as well as each other, all of the time.  

Some of the people sold their stocks yesterday (we went short(er) last week) and we'll see what some of the people do today as yesterday (and the day before) was a very low-volume affair and, as you can see from Dave Fry's Dow chart – we're pushing that 15,500 resistance level and well set up for a massive breakout….  Or a 1,000-point collapse.

At the moment, we're betting on the collapse for the simple reason that "M" patterns love to be made and the earnings and the macros are, so far, not matching the price of equities, which are now up that 1,000 points since April's earnings and up 2,000 points since January's earnings and up 3,000 points since November earnings.  

That's 30% in 3 quarters!  Did your stock make 30% more than it made last year?  If not, it may be overpriced.  Did your stock sell 30% more than it did last year?  If not, it may be overpriced.  Is your stock projecting to grow 30% in 2014?  If not, it may be overpriced…  

Oil sure is overpriced and yesterday they dumped just 14,000 August contracts (depriving the United States of 14Mb of oil that were scheduled to be delivered in August and creating an artificial shortage), leaving NYMEX traders still with 138M barrels of oil scheduled for delivery to the US in August.  That would be about 45M barrels a week delivered to the US and those are binding contracts that can only be cancelled by the "buyer."  

I use the quotes because these criminals have no intention whatsoever of buying oil.  They are ORDERING oil in order to drive up the price that YOU (an ACTUAL user) are forced to pay by creating a false demand environment.  In fact, of the over 4Bn barrels of August oil contracts that are TRADED this month, only 11M (0.2%) will actually be DELIVERED - the rest is an artificial pump job aimed at manipulating the price of oil.   And who do you think all those trading fees are ultimately passed on to?   

We take advantage of the fakery to print our own money.  Yesterday, for example, I sent out an Alert to our Members to short oil (/CL) futures at $106.49 and, later, when oil went up to $107 (as planned in the morning post) we hit that short too.  We caught the drop during the day to $105.75 and that's $1,250 PER CONTRACT in profits and, this morning, we got another run up to $106 for another shorting opportunity.  So we don't care if "THEY" manipulate the oil markets personally – but it is a very bad thing for America and needs to be stopped!  

Now, enough talk of ameteur manipulators.  Why bother with them when the Master speaks this morning?  

Already we have the release of Bernanke's testimony and TLT (we're long) is flying up as the Fed Chairman says they have no intention of curtailing (tapering) the current $85Bn a month bond-buying program and that the Fed may even INCREASE purchases if US Corporations fire more workers (or simply refuse to hire new ones).  That's the not-very-coded message from the Fed to Corporate America – "We will keep giving you free money as long as unemployment remains high."  

That's sent gold (we're long) flying back up to test $1,300 and the markets did pop (as expected) but, on the whole – so what?  What is this man saying that's new?   What is this man saying that should make us ignore earnings misses by MAT, NTRS, NVS and PJC this morning, along with revenue misses by ASML, KNL, STJ, TXT and USB.  There were only 20 earnings reports this whole morning and 9 of them were tarnished!  

Not only that but the "beats" we're seeing have year over year revenue gains of 1%, 2% not a single double digit gain in the group yet there's probably not two of these stocks (10%) that aren't up 20% or more from last year (average stock is up 30% since November!).  SOMETHING is not connecting here and, when there is a disconnect between the market and reality – reality often wins in the end.  

That's all Uncle Ben is trying to do – postpone the end.   Hopefully extending it past the point of his resignation, so he can go out as the man who led the markets to a 200% gain since March of 2009, rather than the guy who blew the biggest bubble in history.  Bernanke hedges all of his legacy bets, saying:    

“The risks remain that tight fiscal policy will restrain economic growth over the next few quarters by more than we currently expect, or that the debate concerning other fiscal policy issues, such as the status of the debt ceiling, will evolve in a way that could hamper the recovery. More generally, with the recovery still proceeding at only a moderate pace, the economy remains vulnerable to unanticipated shocks, including the possibility that global economic growth may be slower than currently anticipated.”

We'll see how all this is digested by the markets today but, leading off with this statement pre-market – there's probably nowhere to go but down from here.  Could this be The End??


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  1. Oil Lines

    R3 – 108.58
    R2 – 107.88
    R1 – 106.86
    PP – 106.16
    S1 – 105.14
    S2 – 104.44
    S3 – 103.42

    Yesterday's high and low – 107.18 / 105.46


  2. Here is an update of the LTP because some of the short calls expire this week.

    I highlighted in pink the 2 calls that need to be rolled.

    Phil – The obvious problem is the NFLX one as they have run up $30 since the last update on 7/8 (unreal).


  3. Reposting a question from yesterday if you have time – I have a remaining $34 call from a SCO July $35/38 bull call spread, where I sold a $35 put for net $.35.  I bought back the short call when it dropped to $.65, then sold it again for $1.52, for a new net credit of $.52.  I bought that new call back for $.25 on the last rise in oil, rolled the $35 put to the Aug $34 put for $.15 credit, and rolled the $35 call to the Aug $34 call for $1.15, for a new net of $.73.  The $34 call is now $.47.  Would you advise rolling the call down in strike to say $30 for $1.10 and selling something like an Oct $33 call for $1.70 and rolling the short put out to Oct for $1.00?


  4. RUT WEEKLYGood morning! 

    Whenever Cramer puts on a suit and sits at the desk on CNBC, you know it's a mega-pumping day.  

    Looks like we're pumped back to yesterday's highs and let's keep an eye on the RUT and that 1,039 line as that's the tippy-top of the long-standing channel – above which, even the bulls would have to say it's looking over-done.  

    775 in November to 1035 in July is 260 points and that's 33.5%, which means your average small business owner should be driving around your neighborhood in a new Tesla as business is up a third from last year…

    Speaking of TSLA, trying to hold $107 this morning and they SHOULD find support around $105 but, if not, you have $100, then $95 but, after that $80 – if they're lucky!  

    There's that huge gap from $60 to $80 that was never tested and, as noted yesterday, only 32M shares changed hands yesterday – barely enough to cover the shorts – if all the shorts were inclined to cover.  If, like us, they sold 1/2 with a 15% gain, then, like us, they probably have a stop around 10%, back around $110, that should be our bounce zone this morning but a serious test there.  So, over $110 and we might get a nice round of short covering but under $105 is death.   Earnings have been set for Aug 7th and GS and I are now aligned with our $85 price targets for the end of the year.  

    We have the Beige Book later and oil inventories at 10:30 and Ben starts speaking at 10 – leading off with the speech we already heard.  

    For a fun bet, I'm liking 20 of the DIA weekly $154 puts in the STP at .50.  If Bernanke disappoints or oil takes a dive, they should get a nice pop.  If we're not down by lunch, we'll take the loss.  

    Meanwhile, oil (/CL) is once again testing $106 and VERY TIGHT STOPS ahead of inventories (10:30) but still worth losing a few nickes for as we could get a mega-move down at some point today or tomorrow.  


  5. TSLA – looks like the Elon faithful (the Eloi?) are buying this morning..


  6. I don't like TSLA over $110 – let's cash our Aug $120 puts for $15.25 in the STP and re-buy when it calms down.  


  7. Might make sense to collect a double on TSLA now…

    Phil – The AAPL spread is also at $6 now.

    Since we moved CLF and BTU to the LTP, the position has improved by $1400 so we cut the loss by 30% already.


  8. Good morning! TSLA is flying up, just like what I said yesterday. Strong reversal (bear trap). Not sure if it lasts though. It's not a rational stock.


  9. Not out of the woods yet:

    http://qz.com/105057/china-swears-its-kicking-that-nasty-credit-addiction-so-whyd-it-fall-off-the-wagon-in-q2/

    The 7.5% GDP growth China reported on Monday was no surprise. Roughly in line with the government’s target growth rate for 7.5% in 2013, it was also consistent with the government’s message of late that it would prioritize structural reform over growth.

    Not that there weren’t any surprises in the Q2 data. As it happens, the composition of China’s economic output showed something quite unexpected. Make that “alarming,” actually. Consumption contributed only 45.2% of GDP in H1 2013, down from 60.4% in H1 2012 (paywall). Meanwhile, investment’s share leapt to the highest levels we’ve seen since 2009.

    Put another way, in Q2, China basically reverted to the same economic structure it had in 2010, when Beijing was pumping trillions of dollars worth of stimulus lending into the economy. 


  10. Guardian/Scott – That's a great link.  Do they do that every day?  

    LTP/StJ – Thanks, I'll go over that shortly but great chance to roll NFLX. 

    SCO/Rperi – Sorry if I missed it.  If I go past your question (I generally answer in order) and skip you – you can safely assume I just didn't see it and re-ask.  SCO July $34s are dead in the water.  SCO is a 2x ETF and $4 is 13% of the current price so you need oil to drop 6%+ just to get SCO to $34 and that's about $99, which would be thrilling for us (and not impossible) but not likely as we're only HOPING to get $102.  

    Oh wait, you rolled it to Aug?  Good man, then.  Below $99 is obtainable by Aug but then we have to wait for the next rollover and that's going to be AFTER expirations so, to play for THIS rollover, you can either DD or roll down and the Delta on the $34s (now .45) is .21 so you need a $1.50 move in SCO, which is about $3.50 in oil, to get back to .75.  Not unreasonable.  If you DD then you average .60 and need a $1 move or about $2 on oil (very easy).   If you spend .45 to roll instead, it puts you down to the $32s (.85) and they have a delta of .35 so you need maybe $1 to win back your missing .30.   NOW – if you DD, you can take half off if they get back to .60 and you'd be back in them even at .60 on the remaining half.  If you roll, on the other hand, you need to cash out to get your money off the table.  So I'd DD as you can take 1/2 back and take quick advantage of a dip and then let the rest ride without so much worry.  

    China/StJ – Very scary at this point.  


  11. Linn energy,

    for you fellow LInn Energy sufferers/owners, Goldman out with positive, subjective cmts this AM, causing Line to open up @26.70 …and quickly sell off. Maybe a nice opportunity to sell a few short calls.


  12. Phil:  I have sort of lost my way with BRCM.  I start to take note of it at $33 and target $31 as being very interesting.  As a supplier to all our good friends in the phone/computer market, I have become less of an enthused buyer at $30.  



  13. Dougherty & Co's analyst Andrea James raised her PT on TSLA from $90 to $200 and thinks they can go as high as $300.  She was the one who originally had a PT on the premise that AAPL was going to buy them.  Looks like that company was long quite a bit of stock for her to come out with another insane projection with no numbers backing it up.


  14. watching bonds closely…if they dont sell off on bernanke taper talk then fundies are reasserting themselves…or maybe they sense no taper talk.
     im not sure…they are definitely trying to confuse the market as much as possible, so now that its leaning no taper maybe he hints at taper..ha


  15. Elon Musk's Hyperloop:  (Go to 19 second mark)  http://www.youtube.com/watch?v=-ceegnWSENQ  Soryy couldn't find a better clip..


  16. avg gas now 3.65…up another .15 in a week… the way oil is acting has to bother them…and part of its bubble is related to qe


  17. Yippee for Yahoo – those Alibabba numbers were incredible.  

    Long-Term Portfolio Update:

    • AAPL – See Summary.  No change other than we wanted to get out of those Jan $390s so let's please take the now $53 and run!   Profit potential on remaining position at AAPL $500 is $325,750.  
    • SQQQ – September and SQQQ is at $24 and a 3x ETF so $29 is 20% away and that's 7% down on the Nas – not impossible but not what we're betting on.  The thing is, we don't have any longs to protect so not much point to these in the context of this portfolio but, we also think we're going to get SOME correction, so we'll hold them through AAPL earnings, at least.  
    • GOOG – Waiting on earnings (tomorrow) to roll the July short calls (if necessary).  
    • NFLX – OK, here's a neat trick.  Our Sept $205 calls (20) are now $65 ($130,000) and we want to lock them in so we roll them to 30 of the 2015 $225/300 bull call spreads at $31 ($93,000) and roll the Sept $225 calls (20 at $53.50 = $107,000) to 20 Jan 2014 $265 calls at $40 ($80,000) and roll the 4 short July $195 calls ($69 = $27,600) to 10 more Jan 2014 $265 calls at $40 ($40,000) so the net roll is about even  (-$14,600) for the short calls and we take $37,000 off the table on our long calls for net $22,400 in pocket and we're left with 30 short Jan $265 calls (the current price), which are all premium covered by 30 2015 $225/300 bull call spreads which are $65 in the money with another $35 of upside.  
    • That means we can't lose any money until/unless NFLX is over $300 by Jan and, so far, we spent about $20,000 on the two spreads less the $4,000 credit for selling the short $195s and the $22,400 in our pocket means net a $6,400 credit (per our current position) and anything we make at Jan expirations would be pure profit.  Since we're $75 in the money at $300 and our callers would only be $35 in the money  - we actually have a break-even around $340 in Jan but, of course, our long spreads wouldn't realize their gains unless NFLX held $300 through Jan 2015.  Hopefully, they fail to hold $265, the callers expire worthless and our profit is whatever is left on the bull call spread.  At $265, that would be $120,000+.
    • CLF – Much better
    • BTU – Much better.  

  18. geez, what the hell is bernank saying?


  19. what just happened to GDX?

    PHIL!!!!!


  20. Uh oh – Bernankes talking and BitCoins aren't flying out of his ass – people are  losing faith, Dollar rising, TLT dropping….


  21. Phil- What do you make of the AXP news? Thanks


  22. Paul Farrell "Doom Report" (I like the guy.  At least he believes what he says and what's that phrase?  A stopped clock is right twice a day):

    Sucker’s bull market of 1928 now repeating…http://www.marketwatch.com/story/critical-warning-no-17-dow-5000-crash-of-65-2013-07-17?dist=lcountdown


  23. ICE will be making some changes to their clearing system on Friday..

    https://www.theice.com/publicdocs/clear_us/notices/13-059_ClearingSystemRelease_Updated.pdf

    NYMEX traders may be especially interested in this feature:

     

     

    The ability to mass remove data associated with a group of trades


  24. PCYC – Aug 110/115 BCS for 1.40.  Just a few.  FEW!


  25. what happened to the oil report?


  26. LINE/8800 – Just a crazy stock now.  Not much reason to play it either way.  

    BRCM/MJJ – Essentially, it's just caught in a chanel and probably will remain so for a while.  I wouldn't bother owning the stock (or any stock that doesn't pay a dividend) as you can trade your $33.62 shares for the 2015 $28/35 bull call spread at $3.70 and sell the $28 puts for $2.60 and then you net into the $7 spread for $1.10 and your worst case is you own them for $29.10, which is a 13% discount to the current price and less margin (ordinary) and far less cash tied up.  Now you only need them to hold $35 to make $5.90 – you'd need the stock to get to $40 otherwise.  Along the way, you can do 1/3 sales of $35 calls when it tests that line and roll them to 2x the $37 calls and then the $40 calls (maybe buying more longs to cover as your original position goes deep in the money).  I think that's a much more relaxing way to own this stock.  

    Warren/8800 – Can we impeach Obama and just make her President now?  

    Dougherty/Rustle – Too funny.  Goldman's calls now being overriden by Dougherty a day later?  This market is completely irrational.  Sill, nice to get another shot to short at $117 (50% retrace).  

    Taper talk/Angel – Don't forget he does this all again tomorrow.  

    Hyperloop/MJJ – Remember when Jobs was running Pixar and people were upset that he wasn't paying enough attention to AAPL?  How come Musk is going to space and designing hyperloops (all separate companies) and selling solar panels and everyone thinks that's fine?  

    Gas/Angel – There was a note this morning about CA hitting $5!  

    Meanwhile, oil back over $106.  Oil inventories were net flat so still a good short play as you know they're ditching imports to fake the draw (and they know it too):

    EIA Petroleum Inventories: Crude -6.9M barrels. Gasoline +3.1M barrels. Distillates +3.9M barrels. Crude -0.21% at $105.47.


  27. Paul Farrell/ ariverA:  He probably still a closet astrologist. Always knew he was a pessimist.  Stopped reading anything by him when I learned about his faulty thought processes.

    http://www.amazon.com/Think-Astrology-Grow-Rich-Money/dp/0963884719


  28. GDX/Jabob – Dollar popped (83) and gold dropped ($1,280).  This is not complicated stuff…

    AXP/Vedan – This is why we were shorting MA and V ages ago but no one seemed to care and they went on to record highs.  So we knew this was coming last fall and now the retailers are reacting to it but it's not like they are super-cheap at $74.  

    I think V is a good short here at $189.  10 Aug $175 puts for $1.05 in the STP.  


  29. Phil- On AXP- shouldnt this risk already be priced into the guidance and estimates. The retail crowd may react today but the Banksters covering this would have put out notes to the buyside for several months. Curious on whether the estimates have priced this in.


  30. V/phil – shorting them? ouch!  AXP is only giving us a better entry, not showing us that MA or V are going to turn around.. (yeah, i remember trying to short them last year..)


  31. ditchig imports @ 1.1 million barrels per day.


  32. Good Morning—what happened to  some of you  who replied yes when we originally set the  meeting dates—let me know if you are still interested—I need to get this done asap—we have met more than 1/2 the room requirements but still need registrants—atm we have 14—thx


  33. Pharm

    Any interest in Sarepta Therapeutics, Inc. (SRPT) or Jazz Pharmaceuticals (JAZZ)

     Thanks


  34. LQMT surging!


  35. BBG 34% on ASX this morning!


  36. Jbur – Farrell/  I see Farrell more of a balance kind of thing than actually believe him.  Sort of like to zerohedge or one of my bear favorites: Marc Faber.    Interesting reads, sometimes even right but never follow!

    That said, I do expect a crash at the end of this rainbow…


  37. LQMT / Lionel – Lots of stories this morning about an AAPL phone with liquid metal…


  38. ….and Billabong boardshorts!


  39. Lizard brains/Arivera – I like that.  

    Mass Remove Data/Scott – What the Hell does that mean?  ICE is not NYMEX, it's actually worse but nothing US Government can do about them.

    Oil/Tommy – Thanks for reminder, I was watching Bernanke.  

    Astrology/Jbur – Hey, Reagan used to run the country that way…

    AXP/Vedan – You would think so but how is AXP attractive at this level?  They're already priced for substantial growth and ignoring the possibility of mass defaults in Europe and China if things get worse.  I wouldn't short them because they are great but I don't see buying them over $70.  It's always surprising how "shocked" retailers can be by things we've already grown bored discussing.  SBUX will be like that when people finally react to the lawsuit.  

    V/Scott – Same play, same premise, different year. 

    Imports/Shadow – Thanks:

    U.S. crude oil imports averaged 7.7 million barrels per day last week, up by 180 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.7 million barrels per day, 1.1 million barrels per day below the same  four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 717 thousand barrels per day. Distillate fuel imports averaged 130 thousand barrels per day last week.

    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum 
    Reserve) decreased by 6.9 million barrels from the previous week. At 367.0 million 
    barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 3.1 million barrels last week and are well above the upper limit of the average range.

    That's 7.7Mb shorted this week on imports – the entire "draw" in inventories.  

    PSW Las Vegas Conference – Please, if you want to go, give Savi a break and commit early so we can finish with the rooms and such.  This is not a super-casual thing like at LV Moda's place – the hotel actually needs MONEY to set things up.  

    LQMT/Lionel – Ah, finally!  There's the usual AAPL rumors (as expected) and they just signed with a sales rep (not a big deal) but, as I said, they were ready to pop on any kind of good news or AAPL rumor. 

    Liquidmetal® Technologies, Inc. (LTI) (LQMTthe leading developer of amorphous alloys and composites, has signed a Manufacturers' Representation Agreement with TM&S, LLC, also known as Technical Marketing and Sales. TM&S specializes in sales of Powder Metal and MIM (Metal Injection Molding) parts. “TM&S is a trusted advisor for established customers that procure Powder Metal and MIM parts, who often find Liquidmetal provides significant performance or cost advantages,” says Bruce Bromage, EVP of Business Development and Operations. 

    “Liquidmetal technology fills a critical gap for design engineers and sourcing professionals that need high precision parts in volume, and especially for those applications that require high quality surface finish or strength. I am pleased to be able to offer this exciting technology to my customers,” remarked Derek Rasmussen, President of TM&S.

    We have 10,000 shares of LQMT at 0.08 and the plan was to sell 5,000 shares at 0.11 – that's still the plan and, after that executes, we'll be thrilled to buy 5,000 more at 0.06 for the STP. 


  40. MSFT/Phil – i have some MSFT, covered with 2015 $32 calls (sold for 4.40 so net out at $36.40).  With the recent runup, thinking i want to sell the stock out from under it.. but do want to cover the shorts with something so not ballooning my margin req. Sell stock, buy 2015 $40 calls? roll the shorts up and buy ATM calls?  Cover with ATM shares to setup a bear call spread?  Not sure how to really play this. I think MSFT is a bit overrun here and will swing down again (and up most likely) before Jan 2015.


  41. Oil scam — remember in 2009 when gas went from $4.50+ to $1.70 in 8 months? That probably really caught the scam artists off guard. They've re-grouped since then – I doubt they would let that ever happen again.

     

    At least in other country's they care enough to raid an office or two. We Americans just take it up the tailpipe.


  42. MSFT – oops, meant cover with ATM calls for a bear call spread…


  43. Here's that $106 cross on oil (/CL) – again!


  44. I hear FB's finally got advertising figured out and it's starting to get pretty good. 


  45. Phil // TSLA
    Thanks for the follow – I came to the same conclusion. I took off 10 longs on the spread ( buy them back once they get cheap ) and I'm gonna sit back and enjoy the show. IF TSLA finishes under $140 in Jan15 – $100K – Kobe burger on me.

    Why is it so hard to teach people to NOT do anything????
    Its the hardest thing to teach – thats why.
     


  46. LQMT !?!?!? Anyone ? Up +74% == any news ?

    V – no way man = $175 puts – you crazy boy.


  47. As a follow up to the Rev's article on Sears yesterday, Krugman explores the limits of the free market:

    http://krugman.blogs.nytimes.com/2013/07/16/john-galt-and-the-theory-of-the-firm/

    Now, why exactly that’s true — why some things are better done through market mechanisms, while others are better done through at least a bit of command-and-control — is a deep issue. Oliver Williamson (pdf) got a Nobel for helping elucidate some aspects of that issue (although that may not mean much to you, considering some of the people who’ve gotten Nobels).

    The thing is, however, that for a free-market true believer the recognition that some things are best not left up to markets should be a disturbing notion. If the limitations of markets in providing certain kinds of shared services are important enough to justify the creation of command-and-control entities with hundreds of thousands or even millions of workers, might there not even be some goods and services (*cough* health care *cough*) best provided by non-market means even at the level of the economy as a whole?

    So in a way Eddie Lampert is being consistent: he’s putting his money (or actually his investors’ money) where his ideology is, and applying market-worship to the internal management of his own company.

    Of course, the purity of the experiment is sort of spoiled by the likelihood that there isn’t actually any such person, that he’s just a hologram. But still.


  48. Pharm/Dia~~ hi, I’m wondering did you buy yesterday’s July Dia 152/151 bear put spread? If you did, could you please give us a heads up if you make any adjustments? Thanks!


  49. they rolling oil contracts like VERY actively today (would be interesting to see numbers tomorrow) – spread between Aud and Sep contracts is down to .12c from .45c on Monday


  50. qc – in meetings today.  I need to look at SRPT.  JAZZ, they are ok, but a one trick pony.  I would be careful with them, although they do make money.


  51. Scott: V / MA — wish I had that $3k or so back that I threw away on puts on them last year…


  52. LOL – Someone is following instructions on LQMT – 0.11 is a dead stop now…

    MSFT/Scott – Do you really want to go short on MSFT?   I prefer not to flip-flop on things without fantasticly good reasons.  Better to cash out, walk away and find a new playmate if you are tired of a stock.  You own the stock, you liked them below $32, so why not cash the stock for $36 and sell the 2015 $28 puts for $2.20 as that's net $25.80 for a re-enty ($38.20 in pocket).  Then you have the short $32 calls, now $5.70 so, rather then buying them back, you can roll them up to the $35s at $4 (-$2.70) and pick up the $40s at $2 (-$2) and now you have put net $33.50 back in your pocket and your worst downside case is re-buying at $28 and your worst upside case is owing $5 but, of course, you can always roll again and sell more calls OR buy MSFT if it crosses $40, cash out your long calls (let's say $2.50) and then you only lose $2.50 if called away at $35 but still rollable.  That last part's tricky as it's several moves away….

    Scam/BDC – I don't think they've reformed.   Maybe they've gotten better at controlling it though.  

    Gold bottomed at $1,270.  Nice for a bullish play on /YG with a hard stop below that line.  

    FB/BDC – I do like them down here ($26.58) – it's right in the range we expected in our STP play from earlier in the year.  I'd rather see earnings as you never know but they're 7/24 so Premise #1 is you're willing to own them at $25, so we can sell the 2015 $25 puts for $3.50.  Premise #2 is we don't think they'll fail $24 on earnings (-10%), so we can buy the Jan $20/25 bull call spread at $3.75 and sell the July (Friday) $26.50 calls for .30 and then plan on selling 1/2 the Aug $27 calls for $1 and you'll have a net free (assuming July expires worthless) $5 spread with a 1/2 cover of the $27 calls for $1 into earnings so you make money if they fall and you make money as long as they don't go up $10.  

    LQMT/Wombat – See above.  We don't need no stinkin' news!   Also, DON'T BE GREEDY!!! 0.11 was our target from day one – here it is.  


  53. LQMT: -$194M retained earnings, LOLZ.


  54. Phil/Gaurdian – I am honestly not sure, but it seems that on big stories they do have a live narrative.  I will try to keep my eye on it and let everyone know if it looks to be an interesting day.


  55. LQMT // Already cashed out. 
    The iPhone 5S (AAPL +0.1%) will feature an "indestructible Liquidmetal case," thinks BGR's Jonathan S. Geller after analyzing previously-leaked SIM tray pictures and finding similarities with Vertu luxury phones that used the material. Liquidmetal (LQMT.OB +68.5%) shares have soared on the pink sheets thanks to the report. Geller also thinks (but doesn't elaborate as to why) the 5S might usesapphire cover glass; if true, that's a positive for GT Advanced (GTAT +0.4%), and an incremental negative for Gorilla Glass maker Corning (GLW -0.8%). Separately (take this one with a big spoonful of salt), Taiwan'sCommercial Times reports the 5S may be delayed until year's end in order to support a 4.3" display


  56. Phil – no weekend feedback on the website idea …

     

    If you want to explore it I could come down to LV a day or two early?


  57. PGH

    And I thought I was going to get assigned more in October.


  58. I'm starting to post my trades here (a site built for testing purposes only). My thinking is if posts are always formatted the same way then I could build a personal page for each user that represents there current portfolio. This could also be used for things like the STP and Craigzooka's retirement portfolio, etc.

     

    e.g., something like this:

    <Keyword> <action> <quantity> <underlying> <expiry> <strike> <price>

     

    (the <keyword> signals for some action in a portfolio (as opposed to some random posting))


  59. Phil,

    Agreed. Line is a crazy stock which I wouldn't be playing other than to hedge my long position and underwater short 30/35 puts. Ergo, my thoughts to sell some short covered calls now @27.07, after this upward spike with intention to buy back short calls if Line makes it over the recent rally high (27.31). Much rather be at the lake.


  60. Dow volume 53M as Bernanke Finishes. 

    Oil/Lol – They are trading actively but that doesn't mean they're getting their rolls done.  Just churning away I think.  Like playing hot potato to see who gets stuck with the Aug contracts.  

    LQMT/BDC – Yeah, but they make it up in VOLUME!  

    Guardian/Scott – I like that format.  

    AAPL/Wombat – All very possible rumors.  They really do need a bigger screen, silly thing not to offer.  

    Aggregator Project/BDC – I'm so busy on background stuff I haven't had time to focus.  Las Vegas is too late but very good idea to hold a staff meeting on Fri/Sat, while we're there.  I do want to get back to the aggreggator project this week but, to keep you guys up to date, I have offers to look at from several big companies that want to work with us and I'm exploring to see if any make sense or if we should plow ahead on our own.  

    On your link, I see a site but no spreadsheet.  The reason I'm leaning towards parnering with pros is that we want to make a site that works AND LOOKS better than SA, we can't put out things that don't look excellent and I'm not sure we have the skills (or the time) to do that kind of job but we'll see once we get everyone together to chat (by the weekend).  

    LINE/8800 – Lake is a good idea.  


  61. Guys- Where do we get a live telecast online of Benny's testimony? Thanks


  62. Phil    YELP  Now close to $ 41.On 7/5 bot 8/17 $30puts for $1.35,now .35.Is my next move to sl the Aug 47calls for $1.10?Earnings on 7/31.Am I the sucker here? Thanks for your help!


  63. vedanomics

    It was on CNBC or some was, They can be rerun.


  64. Phil – gotcha – I'm really just learning (as a developer) so, as an example, it would take me a month or two minimum to get the portfolio to automatically follow the posts and all of that. With that being said I'm really looking to gain experience twoards some new ideas (I'm working with some guys to start social-energy type internet applications — renewable energy being my strength). I think personalized energy (or "social energy" or the like… I'm sure someone will come up with a better name) will be a extremely high-growth area for the next 10 years.

     

    The big company approach seems reasonable if you are accelerating the idea anyways.


  65. Oil invnetories going down again:

    http://www.bespokeinvest.com/thinkbig/2013/7/17/crude-oil-inventories-continue-to-plunge.html

    This week's report from the Department of Energy regarding energy inventories showed once again that crude oil stocks are rapidly declining. While traders were expecting inventories to decline by 2 million barrels, the actual decline was more than 6.9 million barrels.  Over the last three weeks, crude oil inventories have now declined by 27.1 million barrels which is the largest three week decline in at least thirty years.  Over that period, the amount of above average inventory has declined by over 40%.


  66. I took the V play


  67. STP Update – Now, we made $13,000 back in 2 days – if only we could do that starting from $0 for a change! 

    • SCTY – $41.49 is fine with us. 
    • SHLD – Getting bored with this one.  
    • LQMT – Down to 5,000 now at net .05 so the only reason it's in the STP now is we'd like to DD again at 0.06 or lower.  Otherwise, this may as well be in the LTP and one day, hopefully, we get $1 for them.  
    • SBUX – $68.75 rejected from $70 but still more than 10% over target with earnings on 25th (next Thurs). 
    • GLD – Blah, back to $1,277 (good for those /YG calls, though). 
    • AAPL – On track.
    • TLT – Almost got there but not quite. 
    • AMZN – $307, hanging tough.  
    • DIA – Weekly $154s at .52, topped out at .68 for a nice 32% gain if anyone was paying attention.  Now it's tricky but I still think we may get a sell-off on the BBook (2pm), so let's give it an hour before we give up.  As to the longer puts (Aug $151 puts), those are crash protecion and we'll give them until next week.
    • USO – Waiting for a good drop. 
    • SCO – Same 
    • FAS – Going the wrong way today ($73.30) but tons of time to roll.
    • TSLA – Done with those, now $13 again but the Aug $100 puts are $4.40 and were $8 this morning so let's start back with 5 of those – just so we don't miss out on the fun!  
    • NFLX – Still not worth taking out the short putter – just waiting for earnings, on the whole.  
    • GM – Shorted on the Europe auto news – not priced in yet and earnings next Thurs.  

  68. Pros/Phil – Phil, I have a friend in Korea who is good at building this sort of thing and is out of work at the moment. I'd be happy to put you in touch. His English is good enough that you won't need a translator, and he knows when and what to ask when things aren't clear.


  69. Bernanke/Vedan – Done now.  

    YELP/490 – Well, on 7/5, Yelp was $35, now $41 and your puts are way down at $30 with a month to go and earnings on 7/31.  It depends why you feel the need to relentlessly short them.   I agree they are over-priced but these are the kind of stocks people go nuts over so you're really rolling the dice into earnings as they are not even expected to have a profit.  If they make a penny, you are massively screwed.  So, to me, it's a coin flip – a random outcome that may or may not work out.

    Devolopers/BDC – Yep, that's the thing.   It does take time to put together a top-notch site but what's the point of putting something up that hardly gets any traction?  

    Inventores/StJ – But if you don't net it out with gas and distallates, what does it tell you?  That's their trick as most people only watch the oil.  Still, miles above the average is going to bite them in the ass at some point.  

    Friend/Snow – Thanks, I'll keep it in mind.  We'll do an Email circle and we'll identify everyone's talents re. the project and see what we have to work with by the weekend.  Having friends who can fill in is great too but keep in mind this is a no-money startup that's not all that likely to make much money down the road.  On the other hand, if he's out of work – you never know what might pay off down the line.  


  70. TSLA – Done with those, now $13 again but the Aug $100 puts are $4.40 and were $8 this morning so let's start back with 5 of those – just so we don't miss out on the fun!

    - and why would we be selling puts before earnings on this crazy MF ?? You really want to own TSLA at $95 ?


  71. I think we are buying the TSLA's, no?


  72. Phil – Sounds good. I would like to be involved in the SA2 site if there's room, or a role of sorts.


  73. BDC // the price Phil gave was on the Bid //
    buying would make mores sense to me ( now at $4.30 )


  74. Damn, we were holding LQMT down with our selling – now plowing over .12 to .13!  

    TSLA/BDC – Yes, buying puts.  Starting with 5 and we'll roll and roll and DD if we have to (which is how we got in the last ones!).  

    Of course there's room BDC.  I'll put you in the loop.  


  75. Original_14638190



  76. Beige Book (as of July 8th) – Manufacturing expanding, auto sales strong, retail sales softening, construction way up.  Hiring restrained, wages low, prices low.  Generally good stuff at first glance.


  77. Oh, yeah – so good news is bad news per Bernanke's testimony….


  78. FWIW I think IWM and second QQQ are 1 seller from a drop. Since Ben being delayed run up at 10 no buyers. Wonder if traders actually think big Ben will say something different tomorrow?


  79. Not for oil apparently, anything is good news. 


  80. jromeha

    The oil thing is all fake, run it up to dump, if it were a stock they call it pump and dump. Tomorrow wil tell a lot when we see if they rolled enough contracts. This is not good for them.


  81. Wondering which of the final 6 days these pricks will stop jacking oil up 50 cents into close. 


  82. Summary of Commentary on Current Economic Conditions by Federal Reserve District

    Prepared at the Federal Reserve Bank of St. Louis and based on information collected on or before July 8, 2013. This document summarizes comments received from business and other contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.



    Reports from the twelve Federal Reserve Districts indicate that overall economic activity continued to increase at a modest to moderate pace since the previous survey. Manufacturing expanded in most Districts since the previous report, with many Districts reporting increases in new orders, shipments, or production. Most Districts noted that overall consumer spending and auto sales increased during the reporting period. Activity in a wide variety of nonfinancial services was stable or increased in most reporting Districts. Transportation was stable or increased in several Districts. Tourism remained strong in some reporting Districts, although several Districts noted softness from bad weather. Residential real estate and construction activity increased at a moderate to strong pace in all reporting Districts. Commercial real estate market conditions and construction continued to improve across the Districts. Banking conditions generally improved across the Districts. Credit quality improved, while credit standards remained largely unchanged. Agricultural conditions were mixed, as weather patterns varied, while extraction was generally stable or increased.

    Hiring held steady or increased at a measured pace in most Districts, with some contacts noting reluctance to hire permanent or full-time workers. Wage pressures generally remained contained, although some Districts reported modest or moderate wage growth in some sectors. Price pressures for inputs and final goods remained stable or modest.

    We need that wage inflation to get a real recovery going.  This is a little, but not much.  

    Manufacturing and Other Business Activity
    Manufacturing increased in most Districts since the previous survey. The exception was Kansas City, which noted a slight contraction, with storms retarding some activity. Most Districts reported stable or increasing new orders, shipments, and production. Reports from contacts in the Cleveland, Chicago, and St. Louis Districts indicated moderate growth in manufacturing. The Minneapolis District further noted that more manufacturing firms increased activity than in the previous report; the Boston, New York, Richmond, Atlanta, and San Francisco Districts noted that the uptick was modest; and the Philadelphia and Dallas Districts noted slight improvements. Firms in the Boston, Philadelphia, and San Francisco Districts were broadly optimistic about prospects for the second half of 2013, while manufacturers in the Richmond District were cautiously optimistic; contacts expressed mixed outlooks in the Dallas District, and contacts in the Cleveland and Atlanta District do not expect future production to be as high as previously projected.

    The last BBook was June 5th – so this covers the first month of Q3.  Do these sound like reports you should be excited about?  Should you be BUYBUYBUYing based on slight, moderate, modest growth?

    Strong demand in residential construction continued to stimulate the manufacturing sector in several Districts. Home-building suppliers in the Philadelphia and Cleveland Districts reported strong activity. Wood product manufacturers expanded operations and increased production in the St. Louis and San Francisco Districts. A cement producer in the Dallas District saw a very strong market. Demand for construction equipment picked up in the Chicago District.

    Automobile manufacturing remained a source of strength in the Chicago, St. Louis and Minneapolis Districts. Steel and metal production increased in several Districts, including Philadelphia, Chicago, Minneapolis, Dallas, and San Francisco. Fabricated metal manufacturers in the Philadelphia and Dallas Districts reported gains. Primary metal production was steady at strong levels in the Dallas District, while reports on primary metal orders in the Philadelphia District were mixed. Specialty metal manufacturers in Chicago saw modest improvement in demand. The metal-forming business in Minneapolis is having a very strong year. Gains were reported by petroleum refining manufacturers in the St. Louis and Dallas Districts. Reports on semiconductor orders in the Dallas District were mixed, and semiconductor firms in the San Francisco District said sales increased substantially. Electronic equipment firms in the Philadelphia District reported lower activity. Food producers in the Philadelphia and Kansas City Districts saw weaker activity, while demand for heavy equipment in the Chicago District remained soft.

    Nonfinancial services activity was steady or increased in the New York, Philadelphia, Richmond, St. Louis, Minneapolis, and Dallas Districts. Transportation services were stable in the Richmond and Kansas City Districts, increased in the Cleveland, Atlanta, and Dallas Districts, and contracted in the St. Louis District. Consulting service firms in the Boston, St. Louis, and Minneapolis Districts have experienced increased demand and expanded operations since the previous reporting period. Accounting service contacts in the Richmond and Dallas Districts saw strong demand, while telecommunication service providers in the Richmond and St. Louis District reported increased activity. High-tech service firms in the Kansas City District and a software design firm in the Richmond District saw rising revenues, and software developers were in high demand in the San Francisco District.

    Consumer Spending and Tourism
    Most Districts noted that overall consumer spending increased during the reporting period. Reports from the Boston, Chicago, Philadelphia, Richmond, Atlanta, St. Louis, Minneapolis, and San Francisco Districts indicated modest or moderate growth in retail spending, while reports from the Cleveland, Kansas City, and Dallas Districts indicated steady to slightly higher sales. The New York District noted that retail sales in May and June had softened. Retailers in the New York, Cleveland, Atlanta, and St. Louis Districts reported that sales had not met expectations. Contacts in the New York, Philadelphia, Cleveland, Richmond, and Atlanta Districts also noted that weather conditions constrained retail activity. Demand for tech products was strong or increased in the Boston and San Francisco Districts. The Kansas City District reported that appliance purchases were slow, while the Richmond District reported that big ticket item sales were high. Inventories were at desired levels or slightly high in the New York and Cleveland Districts, and remained tight in the Chicago District. The outlook among retailers was positive in the Cleveland, Dallas, and San Francisco Districts and cautiously optimistic in the St. Louis District.

    That's disappoining.  In fact, I don't see where overall spending could have increased with such a ho-hum overview.  

    Most Districts that reported on automobile sales noted increased sales during the reporting period. Strong sales were reported in the Philadelphia, Richmond, Atlanta, Chicago, and San Francisco Districts. Reports from the Cleveland, St. Louis, Minneapolis, and Kansas City Districts indicated steady to moderate sales growth, and contacts in the Dallas District reported that sales were slightly softer than the previous reporting period, although still strong. New car sales increased in the St. Louis and San Francisco Districts, while they held steady at favorable levels relative to the same period last year in the New York District. Used car sales increased in the Cleveland, Richmond, St. Louis, and San Francisco Districts. Auto dealers in the Cleveland, Richmond, Chicago, and Minneapolis Districts reported strong sales for pick-up trucks. The Kansas City and Cleveland Districts expressed an optimistic outlook for future sales.

    Travel and tourism increased in the Boston, Philadelphia, Richmond, Atlanta, Kansas City, and Dallas Districts. The New York District noted that tourism had been mixed but fairly robust since the previous report. San Francisco also reported that travel and tourism was mixed across the District. Weather conditions affected tourism in some areas of the Boston, Philadelphia, and Minneapolis Districts.

    Real Estate and Construction
    Residential real estate activity increased at a moderate to strong pace in most Districts. Most Districts reported increases in home sales. Cleveland noted that June sales of single-family homes were down compared with earlier in the spring but up from last year. Boston, New York, Minneapolis, Kansas City, Dallas, and San Francisco noted strong residential real estate markets. Home prices increased throughout the majority of the reporting Districts. Boston, New York, Richmond, Atlanta, Minneapolis, Kansas City, and Dallas noted low or declining home inventories and upward pressures on home prices in some areas. Residential construction activity also improved moderately across the Districts, and contacts in New York, Philadelphia, Chicago, Minneapolis, Dallas, and San Francisco reported faster growth in multi-family construction, in particular.

    Commercial real estate market conditions continued to improve across most Districts. New York, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, and San Francisco reported modest to moderate improvements in nonresidential real estate activity. Dallas reported strong growth in leasing activity for office and industrial space. Boston and Richmond reported that commercial real estate conditions were holding steady or improving, depending on location. Nonresidential construction activity was stable or increased throughout the nation. Philadelphia, Atlanta, and Richmond reported that commercial construction was flat to slightly up, while Cleveland, Chicago, St. Louis, Minneapolis, and Dallas noted improvements in commercial construction.

    Banking and Finance
    Reports on banking conditions were generally positive across the Districts. Overall loan demand increased modestly across most reporting Districts. New York District bankers reported mixed but generally steady loan demand. Some bankers in the Cleveland, Chicago, and Dallas Districts noted competitive pressures to reduce loan pricing. Bankers in the Philadelphia, Richmond, Cleveland, Atlanta, and Chicago Districts noted a shift toward new home mortgages and away from refinancing (which was led, in part, by increases in interest rates).

    Reports on credit quality indicated slight to moderate improvements across the reporting Districts. Improvements were noted by the New York, Philadelphia, Kansas City, and Dallas Districts. Credit standards remained largely unchanged, although some bankers in the Atlanta and Philadelphia Districts noted increased competition to ease credit standards.

    Agriculture and Natural Resource Industries
    Agricultural conditions varied across the Districts because of differing weather conditions. Crop conditions improved in the Chicago and St. Louis Districts, while agricultural production increased in the San Francisco District and is expected to improve in the Kansas City District. Extremely wet conditions delayed planting and even resulted in some farmers in the Richmond and Minneapolis Districts planting soybeans instead of corn. Excessive rains in the Richmond District also damaged the wheat crop in some areas. Contacts noted persistent drought conditions in some areas of the Kansas City and San Francisco Districts and in most of the Dallas District. Winter wheat harvest output yields were highly variable because of crop damage from freezing and drought in the Dallas and Kansas City Districts. The condition of pastureland in the Atlanta and St. Louis Districts improved since the previous report.

    Coal production was lower compared with the same time last year for the Cleveland, St. Louis, and Richmond Districts. Energy activity remained robust or steady at high levels in the Atlanta and Dallas District. Natural gas production was stable in the Cleveland District and continued to increase in the Richmond District. Drilling declined in the Cleveland District, was flat in the Kansas City District, and increased in the Richmond District. Oil and gas exploration was up slightly in the Minneapolis District. Mining was flat in the Kansas City District, weakened in the Chicago District, and was sluggish in the Minneapolis District.

    How strong can the economy really be if we have a lame report on energy AND materials?  

    Employment, Wages, and Prices
    Hiring held steady or increased at a measured pace in most Districts. Contacts in the Philadelphia, Richmond, and Chicago Districts were cautious or reluctant to hire permanent or full-time staff. The Richmond and Chicago Districts noted relatively stronger demand for part-time workers. Transportation contacts in the Cleveland, Atlanta, and Kansas City Districts noted some difficulty finding qualified drivers. Contacts in the New York, Richmond, and San Francisco Districts reported high demand for technology workers.

    Most Districts reported that wage pressures remained limited or contained. The Chicago and Minneapolis Districts reported moderate wage pressures. The Chicago District noted that rising healthcare and other benefit costs were being passed onto employees. Contacts in the New York and San Francisco Districts noted that competition for technology workers had an effect on salaries. The Richmond District noted that wage growth picked up in the manufacturing sector, remained robust at non-retail establishments, and flattened at retail businesses.

    Overall consumer and input price pressures remained stable or modest in most reporting Districts, although some Districts noted price increases. Most notably, the Cleveland, Atlanta, Chicago, Minneapolis, and San Francisco Districts noted upward pressures on the prices of construction materials. The Philadelphia and Richmond Districts reported price increases for raw materials and finished goods among manufacturers. The New York District reported that input price pressures have abated further in manufacturing but remained widespread in services. Retail prices remained steady in the Boston, New York, Cleveland, Kansas City, and Dallas District, while retail price growth slowed in the Richmond District and wholesale retail prices increased in the Chicago District.

    Contrary to the headline read, this is a pretty blah report but, the good news is it keeps the Fed in play but, the bad news is – that's because the economy still SUCKS!!!

     

     


  83. If this was not a limited import period the build would be scary, I did the math even with cutting imports it was a build of .1 net.


  84. Phil:

    Should we roll those evaporating $36 USO puts up to the $37's?


  85. TSLA/Wombat – Why would we sell puts indeed – we are BUYING puts, betting on them failing to hold $100.  Speaking of TSLA, now they are getting a $300 price target from Dougherty, because $200 didn't pop them enough this morning from the same paid pumping firm.  Must be nice to be a Billionaire and just throw money at people to have them say nice things about your company.  

    Tesla Motors (NASDAQ:TSLA): Dougherty believes Tesla is executing to plan and that visibility has increased. The firm raised its price target to $200 from $90 based on Tesla’s third-generation potential and believes shares could be $300 at the factory’s maximum capacity.

    Tesla Rises on Dougherty Target Price Boost: Moverat Bloomberg

    This article is even more ridiculous (if possible) as it says TSLA is up because auto-sales are up.  They are production-constrained – it doesn't matter how many US autos are sold if they can only make 20,000, does it?  Tesla Stock Recharges As U.S. Car Sale Outlooks Ariseat Investor's Business Daily

    Telsa will double again: Analystat CNBC

    Tomorrow/Shadow – That's the mentality.  Maybe tomorrow is the day he drops a bombshell.  

    Oil jammed back to good old $106.50 and we'll just see what happens tomorrow morning (and get a barrel count tonight).  

    USO/DC – Those are Aug, we're going to let this contract period run out – unless they jumpt to $108 again, in which case we'll want the higher strikes.  

    71M on the Dow at 3pm.  


  86. Damn, did anyone notice how fast the Baltic Dry Index came back?  


  87. Trendline resistance holding, May that drop you are expecting Phil, a tad late?


  88. DIA $154 puts didn't work in the STP – out at .55.  


  89. Surprised people pay attention to Dougherty. Must also be a case where newer short positions set up yesterday would be hitting their stops and further fueling this insanity. 


  90. NFLX making new highs.  

    New shorts/Vedan – I think that's where the pop came from.  So many people only play this market by chasing trends.  

    Speaking of trends – LQMT 0.19 – penny stocks are fun!

    YHOO looking like a penny stock, up 10%.  


  91. I'm loving LQMT, wish I had more.  


  92. McDonald's ends up proving it's impossible to live on their salaries:

    Amid a movement of fast-food workers pressing for a higher minimum wage, a financial planning guide for McDonald (MCD)'s workers has landed with a thud.

    Suggested monthly expenses include $20 for health care; $600 for rent; and $150 payment for a car (that apparently needs no gas.) Unfortunately the budget doesn't have an allowance for food. 

     "It doesn't speak to the realities of low-wage workers in the food industry," said Teo Reyes, the program director for Restaurant Opportunities Centers United, a nonprofit that seeks to improving working conditions for restaurant workers. 

    "I think it would be commendable if it was also part of a movement to increase wages," Reyes said. "At this point is seems to be disingenuous and insulting."

    Also in the "not good" camp:

    The European Union's statistics agency Eurostat said Tuesday that adjusted for seasonal factors, exports from the euro zone to the rest of the world fell 2.3% from April, while imports were down 2.2%.



    It was the second straight month in which exports fell sharply, and the largest month-to-month fall since June 2011.



    Eurostat said that before seasonal adjustments, the euro zone had a trade surplus of €15.2 billion in May, up from €6.6 billion in May 2012 and €14.1 billion in April. The widening of the trade balance over the year was entirely because of a 6% drop in imports, a sign of weak domestic demand. 



    The drop in exports to countries outside the EU was particularly sharp in Germany, falling by 9% from April. By contrast, Italian exports to non-EU countries rose by 3.6% while Spanish exports rose by 0.8%.


  93. This is interesting, people way more interested in iTV than iWatch:

    Coming into that close close to 0.25%  ahead fro the day.  

    LQMT over .20 now – that's crazy!    Still, if it really does get used to cover 50M new iPhones – it's nothing.  


  94. Another weak volume day but better than last two days, maybe 120M.  

    TSLA back to $120 – first we roll, then we DD…


  95. Phil- How do you reach conclusions on a penny stock like LQMT? Are you going by historical performance? Thanks


  96. IBM good, INTC bad-- The DOW will lean toward IBM as it is price weighted. What does Intel shortfall mean overall?


  97. Pcyc didn’t get filled then it got rally in the next hr. Wait for another fish then :-I


  98. Phil:

    RE; Truck Act- I will talk to my higher ups when I feel more secure in my position. I think they get around it because it is not “ normal “compensation, like an extra bonus payment for milestone- 5 & 10 year anniversary- etc. The corporation & securities industry also limits my participation in outside business activities- much as I would like to help with hedge fund & new site project.

    MCD: Decent concept (anyone could use a budget), but shows an amazing lack of realistic understanding of today’s financial pressures.

    If anyone is looking for extra nights in LV this was in Travelzoo today.  

     http://www.travelzoo.com/hotels/las-vegas/-90-Vegas-4-Star-Hotel-on-The-Strip-w-Cocktails-40-Off-1522724


  99. Randers—I did see the Travelzoo special—just a note-- our rooms are in the Palace tower with no resort fee $50 p/d or in-room internet fee $13.99 p/d --comes out to PSW rate being approx. $30 less for the total of 2 days


  100. MCD Living wages – Phil/  I read an informal article comparing government aid in PR vs minimum wage.  When items such as free health care, subsidized housing and other types of aid, it was foolish to work for minimum wage since all the benefits where eliminated.  I can't remember the conclusion, but it was over $9 per hour "to be worthwhile".  Of course, I pay $400 in electricity WITHOUT central air whle subsidized housing pays $25 with no limit – but hey, at least I earn my living and can be proud ;-(


  101. "Be to be silent and thought a fool, than speak and remove all doubt."   But, after hours, I thought I'd point out a physiological rather than market phenomenon in respect of this morning's comment  "…I think drinking liquids is addictive and, the more you have, the more your body is used to having and the more you want.  I just seem to remember taking very long car trips and spending days in the woods with just a canteen, which was plenty for a normal day.  Now people drink 3 giant cups of coffee… and juice and soda and there's water coolers, etc….  I think it's a general marketing thing that has worked to boost our consumption of liquids so they can be sold to us in various forms.  Maybe …it's another "crazy conspiracy theory" but it just seems strange to me that we survived for thousands of years without having to stop for a SBUX every 10 blocks…"  My take:  crazy conspiracy theory, as I could detect no conspiracy to delete the following from the internet, although Starbucks doesn't  display posters above their barrista's head with this information, admittedly:

     

    "As a stimulant, caffeine increases the activity of the cardiovascular system, thereby increasing heart rate and blood pressure. As a result, the renal system encounters a higher volume of blood to filter, resulting in a higher waste output. Accordingly, this property of caffeine causes more frequent urination…he detrusor muscles in the bladder help determine capacity limits of the bladder as well as control bladder output into the urethra. Caffeine relaxes detrusor muscles, thereby causing the bladder to feel fuller more frequently. Moreover, caffeine causes the bladder to be incapable of holding larger amounts of urine, causing urgency to urinate. This indirectly compounds the diuretic effects of caffeine."

    Read more: http://www.livestrong.com/article/294664-diuretic-effects-of-caffeine/#ixzz2ZL8nh9Tg

    Read more: http://www.livestrong.com/article/294664-diuretic-effects-of-caffeine/#ixzz2ZL87eiXa


  102. A good book to read on living with minimum wage, "Nickel and Dimed".


  103. LQMT/Vedan – I generally hate penny stocks.  I just so happened to be researching AAPL, came across LQMT and got interested enough in their stuff to check out the company, then I got familiar with their trading patterns and found a channel I tought offered a reasonable risk/reward.  As with Biotechs, though – I still consider any penny stock play to be a gamble (as opposed to an investment).  

    IBM/Vedan – Actually,  IBM did not include a $1Bn "workforce rebalancing charge" (ie. layoffs) and, if that were put in (GAAP) - earnings would have been $3.22, not $3.91.  Huge items like that are not generally non-GAAP'd and the revenues were a miss at $24.9Bn vs $25.3Bn expected – I would be happy to see them test $200 in the morning and short them there.  

    INTC basically is suffering from the general drop in PC sales – no surprise there at all.  Revenues off 5% as they simply don't make enough tablet chips to make up for declining PC chip sales.  Gross profit margins are, however, exciting at 58% (up 2%).  We loved INTC in Vegas (Nov) at $19 and $25 was a bit silly for them so, if they hold $22.50 on this dip, they're back to being a very nice long-term play.

    So, overall, corporate spending is weak, consumer spending is weak and people are nuts to treat it like we're in an economy that's growing like gangbusters.  

    Bonus/Randers – That's a bit different as it's long-established that they can give you a turkey for a bonus if they want to.  The real problem is these companies who give people debit cards as salary.  I agree on MCD – it's one of those things where someone high up probably had great intentions but then it was horriffically executed.  

    Of course, it points back to the root problem in our society – that a person simply can't live on minimum wage.  If so – then what's the point of having a mininimum?  Forget a family, a human being who works 40 hours a week has a right to expect to be able to go home to an apartment, with heat, electricity and running water.  They should expect to be able to afford to buy clothes and food and be given adeqate medical care and, when they become too old to work – they should be able to retire in dignity.  

    Does that sound crazy?  What's crazy is we drastically undervalue human labor.  Of course we do – it's in the interests of our Corporate Masters to train us to undervalue workers.  

    We used to pay people $400 a week (inflation-adjusted) as a minimum wage and the country didn't fall apart.  In fact, that was an era of economic prosperity because the bottom 40% actually had money to spend.  

    Also, inflation-adjusted or not, people did not have to spend $300 a month (a whole week's take-home) just for health insurance.  Gas was .35 in 1968, now it's $3.50 and minimum wage isn't up 10x to $16 – that just eats away at disposable income and any hope of savings a person may have.  

    People paid $1,000+ for a slave in the 1800s – that would be about $50,000 now – that's more money than a person making minimum wage makes in 3 years!  Then the slave owner would have to clothe, feed and house the slave – people were actually better off under that system than they are working for McDonalds! (other than the never being allowed to leave and having no rights thing) 

    Someone has to stop the madness, but it's only going to happen if WE the other people in America, realize that, even though someone has a minimum-wage job, they are still endowed by with certain unalienable rights, like life, liberty AND the pursuit of happiness.  As it says right in our own Declaration of Independence:

    That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness

    The Reps are all about "safety" and their own happiness, but completely insensitive to the happiness of the bottom 80%.  

    We looked at this chart last week, the bottom 60% have less than 10% of the wealth of this country.  The top 20% have 85%.  If we, in the top 20%, give up 10% of our wealth (though taxation, higher wages, whatever) to the bottom 60% – we would almost DOUBLE their lifestyle.  It would still be 1/4 of what we have for 3x more people so we'd be 12x richer than them on average, not 25x richer (except in our souls!).  

    Something to think about…

    Wages/Arivera – But if you paid people a proper wage then they wouldn't need assistance, would they?  What happens is the top 1% owners of MCD, WMT, etc pay sub-standard wages and make ridiculous profits based on underpaying their staff and then, when that staff doesn't have enough money to live on, they have their government cronies reach into YOUR pockets to make up the difference.  

    Coffee/ZZ – So it's a drug that makes you thirsty for more…. nice!  

    But it's not just coffee I was talking about.  I think, in general, we've been trained to be eating and drinking machines.  How many times do they flash food and drinks at you on TV in the average hour?  Here's a couple of examples of things we've been trained to consume:

    Of course, it's not the water we drink in the US but the water we use to make our food that's crazy:


  104. We are either getting toppy or building consolidation. My guess would be toppy now but given this market we could just be ready for the next 10% move!


  105. /CL – FU SCO!

     

    As of this morning…  August contract had 15MB draw, Sept 12.8MB increase, Oct 5.7MB increase.  I have not seen the end of the day count but i expect August to show 110MB tomorrow morning which should put pressure on the crooks for Thursday and Friday.


  106. A good article! Hope it’s true that the demands of physical gold from goldminers will be getting stronger.


  107. Phil / Pharm / Toppy;  After a number of unsuccessful hedges, I decided cash and relaxation was the only way to play — or rather not play — a market that alternately threatens to double or halve depending on the mood of central banks, which is not terribly predictable, and market reaction to their shifting moods, which is even less so.  But Phil's pointing out that we're up 30% in three quarters [!!!!] really whacked home today.  Then this arrived [GK].  I can't help but think that I'm over my head in these waters.  Was that a sickle-shaped fin poking out of that wavetop?

     

    "Unintended Consequences
    Long ago, when a student of Political Science, I concluded that the only
    valid political law was that of Unintended Consequences. It applies also to
    economics. An example relevant to current events is Japan which in 1996,
    began a model Keynesian experiment when advised by one Ben Bernanke.

     

    o     The monetary base increased by 2.5 times, with the Bank of Japan
    buying huge amounts of the Japanese bond market.

     

    o      Short interest rates were brought close to zero (for the full ten
    years) and real rates were negative (for a while).

     

    o     Government spending as a share of GDP went up by 50 pp.

     

    o     Government debt essentially doubled as a share of GDP.

    The purpose of all this was to stimulate the demand side of the
    economy, as prescribed by the prevailing economic orthodoxy. The
    actual results:

    o     Industrial production growth (I use the 4-year MA to proxy private
    sector GDP growth) fell from 2% in 1996 to zero in 2006.

     

    o     Inflation fell from 1% to –0.3%;

     

    o     Long rates fell from 3.1% to 1.3% and the bond market massively
    outperformed the stock market;

     

    o      Japan’s stock market languishes about 40% below its 1996 level.

     

    The results of Japan’s policies were thus the exact opposite of what was
    intended. The same policies have been sold to us for the past five years in
    the US, by the same salesman (Mr Bernanke). Caveat emptor.


  108. Hi Phil….Wondering your thoughts on a roll of  /ES July futures options contracts with one day to go…

    I let this get away from me hoping(not a valid strategy) that the market would come back down..so now I need to roll out and up….  I sold July /ES contracts at 1645 for a credit of 5.00….now 32.00 as of early this AM

    was thinking roll out until Oct at /ES 1695 for a slight credit or December at /ES 1730 for a credit as well…or should I go alot farther out for a bigger credit i.e. March 2014?  not sure its worth the stress for that long a time period…Or I could close but  that would be an 8K hit….I guess its all part of the 10,000 hours…Was a great strangle until the last couple of weeks with the melt up…..Thanks

     

    w


  109. Good morning!

    Futures pretty flat but much better since Europe open and we'll see if it holds. 

    Oil amazingly still holding the $106 line with 95,000 barrels left on the NYMEX and 3 days to roll them but they are relatively back on track after dumping 43,000 barrels yesterday.  They mostly went to Sept, as someone noted, they narrowed the spread to .12 and rolled the crap out of them and the spread closed at .13 so they can get right back to it this morning:

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Aug'13 106.56 106.73 106.15 106.32 06:25
    Jul 18


    -

    -0.16 12710 106.48 94759 Call Put
    Sep'13 106.35 106.49 105.93 106.12 06:25
    Jul 18


    -

    -0.23 10374 106.35 367254 Call Put
    Oct'13 105.07 105.07 104.60 104.70 06:25
    Jul 18


    -

    -0.35 1396 105.05 125950 Call Put
    Nov'13 103.65 103.65 103.16 103.28 06:25
    Jul 18


    -

    -0.30 497 103.58 76686 Call Put
    Dec'13 101.95 102.03 101.64 101.77 06:25
    Jul 18


    -

    -0.38 2533 102.15 205422 Call Put

    The Dollar is at 82.88 and gold is back at $1,280, TLT 109, silver $19.40, copper $3.12. nat gas $4.64 and gasoline $3.09.

    If we're going to get lucky on oil, it's usually after the nat gas report at 10:30 so it's still game on for shorting but, like yesterday – very tight stops over our .50 lines (/CL).  We'll continue to play USO and SCO short through next Weds and roll out to Sept if we have to. 

    Nikkei is a fun short again at 14,900 (/NKD) as 15,000 is a clear pullback spot so both lines are playable short with tight spots above.  Very good indicator is the Yen, back at 100 so below (stronger) is a bad Nikkei indicator and above (weaker) is a good Nikkei indicator.

    Thursday's economic calendar:
    8:30 Initial Jobless Claims
    9:45 Bloomberg Consumer Comfort Index
    10:00 Philly Fed Business Outlook
    10:00 Leading Indicators
    10:30 Bernanke delivers semi-annual monetary policy testimony
    10:30 EIA Natural Gas Inventory
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet
     

    Notable earnings before Thursday’s open: ANAPHBAXBBTBLKBPOPBXCHKPCY , CYS

    DGXDHRDOVERICFCSFITBGPCHBANHLSSJCIKEYMSNOK , NUEOMC,

    ORBPM, PPGSAPSHWSNASONSVUSWYTSMTZOOUNH , UNPVZ

    Notable earnings after Thursday’s close: GOOGMSFTAMDCMGISRGSWKSSYKCOF

    BGS , RMBSPBCTCBST,ACTGATHNCPHDALGNCEWALCYT

    4:21 AM Asian shares are mixed, with Japanese stocks (DXJrising 1.3% as the yen (FXYfalls 0.7% against the dollar following Ben Bernanke's comments yesterday that QE is still set to end by mid-2014. However, Chinese (FXI) and Hong Kong (EWH) shares drop after a rise in Chinese house prices sparked renewed fears about an overheating property market. Hong Kong -0.1%, China -1.1%, India+0.3%.

    4:45 AM European shares are mostly higher after struggling for direction earlier. The main factors that could be influencing sentiment include Ben Bernanke's goldilocks testimony to Congress and Greece passing the latest set of austerity measures. EU Stoxx 50 +0.25%, London +0.3%, Paris +0.3%, Frankfurt flat, Madrid +0.6%, Milan+0.5%.

    4:52 AM As expected, U.K. retail sales +0.2% on month in June vs +2.1% previously; on year, sales +2.2% vs +2.1% in May and +1.7% consensus. Excluding fuel, sales +0.2% (as forecast) vs +2.1% in May; on year, sales +2.1% vs +2.3% prior and forecasts of +1.6%. The pound (GBBFXB) spikes against the dollar before falling back a bit and is now -0.1%. (PR)

    6:00 AM Overseas: Japan +1.3%. Hong Kong -0.1%. China -1.1%. India +0.9%. London +0.4%. Paris +0.4%. Frankfurt +0.1%.

    Greece's parliament has narrowly approved the latest set of Troika-mandated austerity plans, paving the way for the country to receive the next tranche of its bailout. Held against the background of a general strike and nationwide protests, the program includes wage cuts for 25,000 civil servants and putting them into a "mobility plan" prior to forced transfers or layoffs. Greek shares (GREK+0.6%.

    Worse than Greece but completely ignored:  Detroit could reportedly file for what would be the largest municipal bankruptcy in U.S. history within days should emergency manager Kevyn Orr fail to reach agreement with the city's bondholders, pension funds and other debtees over restructuring long-term liabilities of $20B. The plan is to offer secured creditors much of what they're owed but to provide pennies on the dollar to unsecured bondholders, unions and pension funds. Municipal-worker retirees would be especially hard hit, receiving less than 10% of what they're owed.

    Moody's has cut Chicago's general-obligation debt rating bythree notches to A3, with the outlook negative, citing a retirement-fund deficit of $36B and "unrelenting public safety demands" on the budget. "Absent significant growth in the city’s operating revenues, escalating pension funding requirements will increasingly strain the city's operating budget, as pension outlays compete with other spending priorities, including debt service and public safety," Moody's said. (PR)

    Dell (DELL) is due to hold a shareholders' meeting this morning that will determine whether Michael Dell and Silver Lake 

  110. Phil

    Big Chart – As StJ notes, toppy or consolidating for massive breakout.  Once Bernanke is off the stage, it's up to earnings and I'm just not believing it's going to be enough to justify that 5% pop without even a 1% pullback.

    LQMT/Savi – That would be cool.  AAPL has a lock-up on LQMT for electronic devices too.  

     

    If they do have something this cool (total full screen with virtual button) and it's thinner and the rumor of a bigger screen is true – they are going to have another huge hit with the new IPhone but, I wouldn't be surprised if this is the 6 (next year) and not the 5s (Q4).  

    Oil/Jfaw - Way lower than we thought.  The only good news is that they had to stuff Sept. 

    Gold/Jabob – Something very strange is going on out there!  

    Japan/ZZ – The difference is that the Yen is in 1/10th the supply that the Dollar is so they could print in isolation and no one really cared.  Not sure if we'll get the same result here.  I think it's much more likely we trip the hyperinflation wire at some point and everything goes BOOM!  

    Still, cash is a very good thing as the BOOM! of hyper-inflation means you can take any dumb-ass long bull-call spread and make 2-300% a year (which we actually could have done in November!). 

    ES/Sun – Ouch!  I'd do the October roll first, December is not going anywhere but, more importantly, you need to use 1,680 as a spot to BUY August calls and use them as momentum plays to offset your long losses.  As noted just above, if and when hyperinflation kicks in, we will go up and up and up and up – so it is not smart to keep giving the S&P more time to beat you.  


  111. F*ck oil, not one meaningful pullback. 


  112. Oil/ Phil

     

    I think one of the other reasons that cancelling contracts may not be difficult other than roll could be that a lot of these contracts could be circular ones where the same entity/ crooks use multiple SPVs and in fact do a lot of trading amongst themselves and pump the price in doing so,  So maybe no of open contracts may not always be the best gauge?