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Failing Friday – Not Even a Weak Bounce?

Yuch, this is getting ugly!  

The NYSE and the Russell, our erstwhile leaders, are now leading us down, having fallen over 2.5% from their Thanksgiving highs and, more importantly, finding no support at the 50-day moving averages.  Even worse, there's no panic-selling yet, no volume spikes, just a relentless grind down that has, so far, earased all of November's "amazing" gains that had everyone so excited.  

Well, not us, we were predicting doom and we got wisely to cash at the top but THEY (my fellow pundits) have never been more unified on the bull side and I had never felt more alone sticking to my guns while the market went up and up.  

Could I have been more bullish right up to the last minute?  Sure, but that would have put our MONEY at risk and we do not like to risk out money, plentiful though it may be in today's environment.  So plentiful, in fact, that Argentina needs 26.8% more of it to buy the same goods and services they bought last year and the police are now on strike, demanding wages that keep up with the surging cost of living, allowing looters to have free reign of the streets.  Government spending jumped 44% to keep up and relented to the police (33% raises) but now the public workers are threatening to strike too.

Is this the inflationary future for America?  Argentina's debt to GDP is just 43.2%, that would be like America having just a $7Tn debt and not $17Tn and rising.  Argentina will take a page out of the US book to fix inflation as well as their GDP – by adjusting the way they gather and report the data!  

We've already forgotten that the US boosted their GDP by 0.5% last Q by changing the way they value intellectual property like TV shows and films, adding hundreds of Billions of Dollars of implied value to potential re-runs of the Kardasians.  Not a mention of it last week, as we simply accept it as fact now – as if it's always been that way

And if all others accepted the lie which the Party imposed – if all records told the same tale – then the lie passed into history and became truth. "Who controls the past," ran the Party slogan, "controls the future: who controls the present controls the past." And yet the past, though of its nature alterable, never had been altered. Whatever was true now was true from everlasting to everlasting. It was quite simple. All that was needed was an unending series of victories over your own memory. "Reality control," they called it: in Newspeak, "doublethink." (Orwell, 1984 – 1.3.18)

SPY 5 MINUTEThe Party lie of the day is the positive numbers you may be seeing in the Futures.  What really happened is, after the bell and into the close of the index Futures, they were pushed down about 0.25% so, when they reopened, the Futueres base-line was set 0.25% below where the indexes actually closed yesterday.  Now, in the morning, the Futures are back to where they closed, but that let's the MSM tell you that the Futures are looking up – to give the the very false impression that buyers are stepping in.   Clever, isn't it?  

Who benefits from this nonsense?  Well, just watch that TV until the commercials come on and write down the names of each sponsor.  In the newspaper or one the Web, look at who the ads are from.  Rupert Murdoch, for example has $13.4Bn and most of it is tied up in stocks.  He is so interested in maintining the top 1%'s status quo (#33 on the Forbes list) that he bought the company that controls the Dow Jones Industrial Average, which itself has been re-written to make it look better this year (adding NKE, V and GS in October).  

INDU WEEKLYDo you think Mr. Murdoch wants his paper printing articles that say his holdings are worth less?  No, he wants to have MORE money next year than he had last year, not less.  T is a front-page sponsor (isn't it GREATthat they'll stop subsidizing smart phones?), Chanel is on page 2 along with Forevermark Diamonds, Jaquet Droz watches, Canali and Tourneau (luxury goods are the place to be investing!), followed by Breitling, Tiffany and Beluga on page 3.  

What really amazes me, more than the blatant manipulation of the media, is the fact that anyone making less than $100,000 could possibly believe the WSJ gives a crap about them.  It's one thing to be aspirational but, as we discussed extensively in Member Chat this morning, upward mobility is essentially a myth in America.  If it weren't the WSJ would have ads from executive training schools or business incubators, right?  As it is, it's news by the 1% for the 1% (including the ever-popular "house porn" section) and propaganda for the rest of you.  

Of course, other than the moral outrage, we're fine with the fact that the markets are fixed.  It's much easier to bet on a manipulated market than a free one – just ask JPM or GS, who only lost money on 2 days in Q1, 6 days in Q2 and 15 days in Q3 (out of about 60 in each Q).  Why are they starting to lose more?  More scrutiny as the Volker Rule finally kicks in. Still, the house usually wins and that's why, at Philstockworld, we teach you to BE THE HOUSE – Not the Gambler!  

As I noted yesterday, you can get our trade ideas like every day by becoming a Member at Philstockworld.  A PSW Annual Report Membership gives you access to all of our daily posts as well as archived chat sessions AND a subscription to Stock World Weekly, all for less than $1 per day.  Doesn't that make a perfect Christmas gift for all the investors on your list?  

Just yesterday, in fact, in the morning post (which is delivered to our Members in progress at 8:35 and finished before the bell – usually), I mentioned that we were shorting oil at the $98 line.  This morning, oil is at $96.75 for a gain of $1,250 PER CONTRACT – isn't that kind of information worth $1 a day?  The XRT Jan $90 puts we liked opened at $3.80 and finished the day at $5, up a very nice 31% on the day.  

In our Member Chat, as I noted, we were already extremely short in our Short-Term Portfolio and that did well enough during the day (up a virtual $14,000) that we decided to cover with 50 TNA weekly short puts ($65.81s) at .70, giving us $3,500 worth of upside protection, in case the market reverses.  

If it continues down – well, we didn't make any changes (note the large amount of oil shorts!) so we are on track to make another $14,000 today in a big move down – so the potential cost of insurance is reasonable.  This is a very similar move to the profitable trade we made live, in Tuesday's Webcast.  

Keep in mind though, as I said Monday, this is just fund trades for fun money, on the whole, I much prefer CASH in this uncertain market.  That includes having a long-term, very well-hedged portfolio (because we don't like to go in and out of 2-year postiions if we don't have to) but the more cash the better.  Just yesterday, in our Member Chat, we found several good long trade ideas – there's always something, in any kind of market but, at the moment, I'd rather have a green Christmas and wait for January to jump back in.  Take some of that money and go shopping – the economy needs you!  

Have a great weekend, 

- Phil


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  1. Oil Lines

    R3 – 98.86
    R2 – 98.52
    R1 – 98
    PP – 97.66
    S1 – 97.15
    S2 – 96.80
    S3 – 96.28

    Yesterday's high and low – 98.18 / 97.32

  2. STP / Phil – Since there is no 66 puts for TNA in tomorrow's expiration I entered in the 65.81 puts which was closest in price and strike. 

    And we might want to cash these early if TNA opens higher like it looks right now!

  3. CL broken 97

  4. Good morning! /cl open outcry starts at 9am (est), normally they might pump up the price first. /dx is falling…

  5. Some might need to catch on to the rest:

    The market's pullback over the last three days has left the S&P 500 just above its 50-day moving average.  Below is a look at the percentage of stocks trading above their 50-days by sector.  In the S&P 500 as a whole, 52.6% of stocks remain above their 50-days.  Four sectors have readings higher than that, while six have readings that are lower.  As shown, the Industrials sector has the strongest breadth with 71.9% of its stocks above their 50-days.  The Financial sector ranks second at 61.7%, followed by Consumer Discretionary (59%) and Health Care (58.2%).

    Technology, Materials and Consumer Staples are all above 50% but just below the S&P 500's overall reading.  The three really weak sectors are Energy, Utilities and Telecom.  In the Energy sector, 31.8% of stocks are trading above their 50-days, while Utilities and Telecom have lowly readings of 6.5% and 0%, respectively.  Keep in mind that there are just six stocks in the Telecom sector.

  6. Good Morning!

  7. so wait for the opening push up to ??? and then short the hell out of /CL ? Its creeping //

  8. Good morning!  

    That's fine on TNA, StJ – it was just a hedge in lieu of stopping out on our short positions.  

    Oil failing $96.50 – that's the thing about playing into the rollover week, you never know when that big dip will come, but it usually comes…  That's why yesterday I said I didn't like that upside idea on USO – better to be on the right side of the Fundamentals and take your lumps so you can get back up with conviction.  

    Picture from Downtown Cairo – I guess Global Warming is a myth…

    Photo: Budget Pact Protects Social Security and Medicare:

    Interesting take on my old "Gang of 12" rants:

    Photo: Please CONTACT your CONGRESS members TODAY, they are voting for it, from taking UNEMPLOYMENT benefits away from taking them away!

    Photo: Rich Get Richer, Poor Get Poorer: A study by economist Emmanuel Saez shows that from 2002 to 2012 the income for the bottom 90 percent of income-earners decreased by 10.7 percent, while the income for those in the top 0.01 percent increased by 76.2 percent. Read the study

  9. It's Friday the 13th….. 

  10. The short TNA puts are good for a 50% gain so we look to protect our profits in the excitement!

  11. My hero!  

    1. 'Bishop of Bling's' $42 Million German Residence to Be Turned Into 


      Nov 5, 2013 -  to be turned into a soup kitchen, as Catholic commentators continue Pope Francis has banished the German Roman Catholic prelate 

    TSLA today $145 puts at .58 are a fun play.  

    Our TNA STP short calls are now .25 so a stop at .35 for a 50% win or out at .15 as there's no reason not to take that and run.  

    Firaday 13th/StJ – Ah, that explains it.  

  12. Oops, I meant short puts, of course ($65.81's).  

  13. curves turning on /CL

  14. Gasoline bounced off $2.6288 and back to $2.6366.  Over $2.64 is playable long on /RB (with very tight stops) and a signal to get out of oil longs but /RB never made our level yesterday and died hard since.  

    Dollar 80.43 keeping /NKD over  15,535 but not making oil happy ($96.60).  Gold bounced right off our long target of $1,220 and is already $1,231 for a very nice gain and, of course, that moves the stop to the $1,229.50 line (.50 below each $5 line taken).  

  15. I guess we cash our TNA puts at $0.13 now!

  16. TNA/STP – Absolutely done at .13 as they'll hold .05 till the last minute, no matter what so we can only make .07 over the day and the thing could go very much against us if selling resumes, which I think it will because why, exactly, would people want to be long into the weekend?  

  17. not so much selling pressure on /CL – interesting.

  18. Phil – I have 6 TSLA Jan 14 Bear Put Spreads 185/165 with a cost of $9.03. The mid-market spread to unwind is about $2. I'm planning to hold and allow remaining premium to decay. Curious, if you had any other suggestions to manage the position? Thank you, Eric

  19. Phil?trick


    I own TZA 20 calls and the RUT is up  3.2 and TZA is down .13 but it is exactly the same as yesterday at the close trying for the weak bounce….My question is how could one play this game in reverse or combat the trick so to speak, any thoughts?

  20. Phil/Sco~Hi, the short Dec sco 33p in our STP is .7 now. Shall we buy it back for small profit? There is one week left.

  21. wait I think I answered my own q, decay of a next week option is why I am down?

  22. TSLA $150! 

    Oil/Wombat – Maybe not so much buying interest, even at $96.50?   I assume the Iran news is not going the way the bulls want it to.

    TSLA/Eric – Well, when there's a silly spike like this, I tend to look to see if I can improve the position.  If you buy back the $165 puts for $21, you run your net up to $30 on the $185s, which isn't terrible as TSLA is at $149 and the $185s are $37.50 so you're up $7.50 off your $9 start and I'd take that off the table (in other words, kill the trade for net $16.50) and then spend $10.50 on the $160/140 bull call spread, which can make you another $9.50 but keeps $6 in your pocket so anything over $3 is a profit and you can stop at net $6 and still be ahead.  

    Oops, forgot about RH, who dropped for silly reasons.  I like 5 short 2016 $50 puts for $10 in the Income Portfolio

    Lots of news early this morning (previous post and Alert) but here's some more:
    What's the point of inflation if you can't pass it along to the consumer?  Producer Price Index edged down 0.1%
    • Nov. Producer Price Index: -0.1% in-line with expectations and -0.2% prior.
    • Core PPI +0.1% in-line with expectations and +0.2% prior.

    Ireland exits rescue program

    • "This isn’t the end of the road," says finance minister Michael Noonan as Ireland becomes the first EU state to officially exit its rescue program. "This is a very significant milestone on the road."
    • The economy is forecast to grow about 2% next year and unemployment is below 13% after rising above 15% in 2012. Noonan pledges to keep the screws down on fiscal discipline, but also makes noises about a tax cut sometime in the next two years.
    • Irish stocks are up marginally on the session; EIRL is up 37.7% YTD.
    Simon Property to spin off strip centers/smaller malls
    • SpinCo will be an independent, publicly traded REIT initially with interest in 54 strip centers and 44 smaller enclosed malls (each generating NOI of about $10M or less). SpinCo's initial year NOI is estimated to be more than $400M and initial year FFO is estimated at $300M, or $0.80 per share.
    • The spinoff will take the form of a tax-free distribution to shareholders who will see a boosted dividend – Simon Property's current $4.80 annualized payout will be maintained, and SpinCo's initial year dividend is estimated to be at least $0.50 per share.
    • The distribution is expected to take place in 2014 Q2.
    • CC to discuss is at 9 ET.
    • SPG +1.1% premarket
    • Press release

    Anadarko gets three downgrades after court decision, shares -11.5%

    • Anadarko Petroleum (APCalmost certainly will appeal yesterday's court ruling against it in the Tronox litigation: "We vehemently disagree with the judge's [decision]… We fully expect to pursue every avenue available to us through the appellate process to protect the interests of our stakeholders, once a final judgment including damages has been rendered."
    • The severity of the ruling for APC will come down to damages: While the judge found that the trust is entitled to recover ~$14.17B, APC may be able to lower the figure by ~$9B for offsetting costs it may have incurred from the Tronox transaction.
    • J.P. Morgan downgrades APC to Underweight and a $77 price target, while Citi and Global Hunter cut shares to Neutral from Buy; Credit Suisse views $65-$70 as a potential floor level valuation.
    • Jefferies, maintaining a Buy rating and $111 price target, believes APC could pursue more aggressive dividend/buyback moves to instill shareholder confidence that the ruling will be found excessive.
    • Shares -11.5% premarket.

    Told you so!  Coffee prices take a turn higher

    • Robusta coffee prices rose to their highest level in three months in London trading after bean stockpiles fell more than forecast.
    • Arabica coffee prices also showed gains.
    • Related ETFs: JO.


    Mobile app coming from McDonald's
    • McDonald's (MCD +0.3%) thinks its new McD app could be the answer to driving up traffic from younger consumers.
    • The company is testing the app at 1K stores to see the response to deals offered on various menu items.
    • The mobile apps of Starbucks, Chipotle, and Panera Bread have been credited with helping drive repeat traffic to the restaurant chains.

    Setback for Spain as LVS pulls $35B resort project

    • Spanish stocks are off the highs but remain ahead by 0.4% on the session following Las Vegas Sands' reported decision to drop its massive project for suburban Madrid. The 10-12 year, $35B project was to include 12 casino resorts with 36K rooms, and was a key spoke in the government's plan to pull the economy out of its slump and lower the 26% unemployment rate.
    • Shares of Las Vegas Sands (LVS) are on watch after Sheldon Adelson gives up on his vision of a $30B casino complex in Spain.
    • Plenty of investors have been clamoring for Las Vegas Sands to stick to its strength of producing impressive returns in Asia and avoid the land of +25% unemployment.
    • The MSCI Spain Capped ETF (EWP) is up 26% Y/Y.

    Retail darling Lululemon loses its shine

    • Lululemon (LULU) is downgraded to Neutral by Credit Suisse and assigned a lowered price target of $59.
    • Yesterday, execs with the retailer gave an uninspiring performance during the firm's earnings call. Outgoing CEO Christine day skipped the affair and those fielding questions seemed a bit bowled over by the brand's sudden lack of momentum. (earnings call transcript)
    • LULU -0.1% premarket to $60.35.

    Movie theater operators take on IMAX

    • Movie theater operators (CKEC, CNK, RGC, MCS, RDI, AMC) take on IMAX with a rapid expansion of the number of large-format screens for which they can charge premium ticket prices.
    • The development could cut in IMAX's revenue if moviegoers associate the two different formats as offering the same experience. For The Hunger Games: Catching Fire, IMAX collected close to $13M during the opening weekend compared to the $9.6M outsized private-label screens took in.
    • Analysts think the private-label screen will have a tough time overtaking the power of the IMAX brand.

    A roundup of tech ratings changes

    • Amazon (AMZN +1.3%) has been upgraded to Strong Buy by ISI.
    • Stratasys (SSYS +2.5%) has been started at Overweight by Stephens.
    • Ciena (CIEN +1.5%) has been upgraded to Outperform by BMO a day after posting mixed FQ4 results and slightly disappointing FQ1 revenue guidance (midpoint below consensus).
    • Ubiquiti (UBNT +1.1%) has been started at Outperform by Wells Fargo.
    • Procera (PKT +2.1%) has been started at Buy by D.A. Davidson.
    • China Mobile Games (CMGE +3%) has been started at Buy by Brean.

    Seagate, Western Digital upgraded to Buy by Citi

    • Citi's Joo Yoo has upgraded Seagate (STX -0.3%) and Western Digital (WDC +1.3%) to Buy, while respectively raising his PTs to $62 and $100.
    • Echoing recent Intel upgrades, Yoo expects Seagate and Western improving/stabilizing PC demand. He also sees the hard drive giants to getting a boost from sales to cloud infrastructure services firms; Western is targeting these companies (and others) with its newhelium drives.
    • Yoo downgraded Seagate and Western to Sell in Oct. '12, and upgraded them to Neutral in July. Shares have had a pretty good run over the last 14 months.
    • STX +1.6% premarket.

    The New China!!!  ARC Group forms 3D printing division, Brean ups PT to $30, shares +5%

    • ARC Group Worldwide (ARCW +5%) shares spike after the company announces it has formed a 3D Material Technologies division which will utilize 3D printing, CNC machining, and MIM Technology to create prototypes for customers.
    • The company notes its experience with FDM, SLS, and SLA 3D printing tech, and "views metal 3D printing as a significant area to build out its capabilities."
    • Brean Capital, which initiated shares at Buy with a $25 PT on Wed., raises its PT to $30 on the announcement, and believes shares could be worth upwards of $45-$50.
    • Brean believes "ARCW is in an incredibly advantaged position to lead in metal 3D parts," with the firm likening ARC's new ops to 3D Systems' Quickparts and Stratasys's Redeye businesses.

    Advertising works on Twitter; RBC boosts price target

    • "A substantial 40% of Twitter (TWTR) advertisers reported improving ROI over the last six months and 40% have also increased their Twitter spend," says RBC Capital, upping its price target on Buy-rated Twitter to $60 from $33.
    • 59% of respondents plan to increase ad spend with Twitter over the next twelve months, says the team, while only 4% plan to decrease.
    • Shares +1.2% premarket to $56.

    Three breakfast reads

  23. Another benefit of being in the Top 1%.  Apparently :

    "The 16-year-old is white, from a wealthy family and received probation for a drunk driving crash that killed four people. The teenager’s attorney successfully claimed that his client is a victim of "affluenza," or the product of wealthy, privileged parents who never set limits."  So now it's a medical condition to be born rich.


  24. RUT gallantly holding 1,100 so far.  

    Oil holding $96.50 with Dollar at 80.43 after one rejection at 80.50.  

    TZA/Sage – You're out of the money, so they can screw around with you.  If you want to play the swings, you are better off with something in the money like the Dec $18 calls, which are $2 with TZA at $19.95 so, essentially, no premium.  Those you can trade as a day trade but I'd play them like the Futures and only use strong resistance lines like 1,105 or 1,107, looking for a pullback there.  Like the Futures, it's a nickels and dimes play but, unlike the Futures, you have to watch your trading costs as you go in and out very carefully.  

    SCO/STP, Invest – First of all, it took me more than 5 mins to answer this but no, I still think we'll be below $33 next week on SCO (below $96.50 on oil) and, of course, that's what we felt when we first sold them.  Second, even if we are over at $35, for instance, we'd be down $1.10 and I'd be comfortable rolling to a lower strike the following month as the overall premise doesn't change.  All this is is "back on track" for SCO and there's a reason we did the Dec $33 puts and not the Jans as we planned on having an extra month to roll them and, if you'll notice, the Jan $31 puts are .60, so .10 to roll down $2, which is 7.5%, which allows for a 3.75% move up in oil ($100) so, unless you think oil is going to be $100 at Jan expiration, buying back the short Dec $33 puts for .70 is a waste of $700.  

    Correct Sage but that doesn't mean you can't take advantage.  

    Affluenze/Rperi – LOL, that's the kind of "let them eat cake" moment that can lead to the revolution that finally takes the bastards (us) down.  

  25. Citigroup maintains lululemon athletica inc. (NASDAQ: LULU) with a Buy and lowers the price target from $80.00 to $73.00.

  26. this is just silliness – its the Facebook phenom all over again. there is absolutely no correlation between ROI in any vertical and Twitter. Companies are stupid, and just follow the latest social media glitter. Did you know that only 4% of their users even 'tweet' ? The rest are all automated or retweets.

    "A substantial 40% of Twitter (TWTR) advertisers reported improving ROI over the last six months and 40% have also increased their Twitter spend," says RBC Capital, upping its price target on Buy-rated Twitter to $60 from $33

  27. Thanks for explaining your next potential move on SCO in detailed, Phil! It was my first time to play SCO, and I was inexperienced. Glad that you shared your knowledge to strengthen my confidence.

  28. Affluenza / rperi & Phil – Can poor people claim that they suffer from lackenzia where they lack so much that they also lack the knowledge of right and wrong?

  29. phil, on TSLA, do you still like the 2015 short $80 calls?  or another new short position?

  30. Lunar TSLA 80 short calls please the stock is trading at 150!!!!

  31. Butterfly Collection:  

    NOW we need to do something with TWTR as our June $50 calls are $13.50, so we take that money and RUN and take our 5 Dec $42 short calls ($15.40) and roll them up to 10 Jan $55s ($5.25) and 10 March $44 puts ($2.60) for about even.  The Dec $42 puts are .10 and we'll let those expire next week.  We still have the June $37 puts as cover and I'm disinclined to re-cover the longs but, if I were going to, I'd take the Jan $50/65 bull call spread at $6 but we can pick those up if TWTR breaks $58.50, not before.  


  32. T hadn't herd that lady gaga song nice. one can only hope …

  33. TWTR BF/Phil – How would you adjust if in an IRA?  Thanks!

  34. Sage

    Unless you have an extraordinary deal the round trip cost of options is under 2 cents. The exception is trading 1 or 2 options, then the transaction fixed cost kills it. Another way is trade TNA/TZA stock, that times 3 adds up and then you don't pay for contracts that add up quickly.

  35. yodi, i think that was the trade a couple of weeks back when TSLA bounced up to $150.  it was actually quite profitable as TSLA dipped back down to $140.  I think it was proxy for going short.

  36. Are we still looking to go long RUT at 1100?

  37. Phil, SJL

    It looks like we may need an S4 (not samsung)  for CL this morning.

  38. CZR seems like the gift that keeps on giving.  Will cash in on my 10 short $15 Jan puts at $1.20 in 35 days and I am looking at 2015 and 2016.  The 2016 $15's are $5.20 but low volume currently.  That would put you in at net $9.80 or 52% off the current price.  The 2015 $12.50 puts can be sold for $2.50 which also puts you in at more than 50% off current price.  Phil or yodi any other ideas?

  39. Razi.M S4

    You can do it yourself with this free be computer.

  40. Thanks.

  41. Lunar TSLA as I can see it, it is a typical MOMO stock and betting it as low as 80 well could become very uncomfortable. Yes IF it goes down you will make money. I am more an OTM better.

  42. Phil// RH selling 2016 strike 50 puts are trading between 8.80 and 9.80.  The trade suggestion earlier was to short put for $5.00.  Has the price fluctuated that much or am I looking at the wrong one.  Sorry to keep posting questions like these.

  43. johnO

    Long RUT was a hedge for short positions, IWM, follows the RUT, failed first point of resistance. FWIW IMHO only long if IWM stays over 110.3 for at least 20 minutes, and that would be a day trade, not hold.

  44. $400M Mega Million Jackpot today.  1/259M chance of winning so we could buy all the tickets!  I say 10, 11, 24, 32, 44 and 26 as the mega number. 

    LULU/Invest – All trades see is the 10% price downgrade.  Looking good for our $55 entry target.  

    TWTR/Wombat – It's amazing how they love to have stocks to wildly extrapolate on.  Most of the tweets on Twitter (non-professional) are people begging other people to re-tweet their tweets. 

    Lines all failing now – even oil!  

    You're welcome Invest.  

    Lackenzia/StJ – I love it.  Now if only we can get a lawyer to use it!  Can you imagine the balls on those guys going into court with that defense.  If that were on a TV show, we'd say the plot was too silly,

    "Too hard for clever folks to understand
    They're more used to words like:
    Ideology . . .
    They're not talkin' 'bout right and left
    They're talkin' 'bout

    Right and wrong – do you know the difference?"

    TSLA/Lunar – Well, at the moment I'd say I like the 2015 $92.50 puts better ($10.70) at the $100 puts are $13.20 for a $2.50 gain so 25% if TSLA drops about $7.50 (5%) is good leverage.    Keep in mind though – the path of the TSLA shorter is a very difficult and often painful one.

    Gaga/Micro – There's a few of those, I love them.  Good to give the kids a quick overview.  

    TWTR/Lance – Well there you want to roll your 5 long June $50s ($13.50) to 2x the 2015 $60s ($12.75) for $12 out of pocket and roll the short Dec $42 calls ($15.40) to 10 March $50s ($11.50) for + $7.60, so the whole thing costs you $4.40 but then you can sell 5 March $44 puts for $2.50 (no reason to add more on that side) and now you spent $1.90 for the roll but you gained 3 more months on your caller and only widened your spread to $10 from $8 and the puts you sold are now way out of the money.  

    Costs/Shadow, Sage – Don't forget paying the bid/ask spreads, hard to avoid if you are trying to get in and out fast.  

    TSLA/Yodi, Lunar – Yes, we use those for short-term trades, as indicated above, to profit from a correction that improves the contract – we don't actually have to believe the stock will go that low, we're just looking for a good risk/rewards spot in the chain.  

    RUT/John – I don't think so.  Newsflow not good and we failed the weak bounces yesterday and then they faked the open – bad omens….

    LOL Razi!   Gotta love it…

    CZR/Rperi – They're at the top of where I'd want to play them.   Also in our Butterfly Collection but I'm disinclined to move them as I think $20 is getting a bit silly to the upside. It's $1 for every Billion they owe…

    RH/Rookie – That was selling 5 puts for $10, so far it didn't fill as $9.30 was the best they got to.  Not a terrible fill there but we have plenty in the Income Portfolio so I only want actual good deals, no chasing.  

  45. Phil, there is a typo or some bad math in the morning article

    " I mentioned that we were shorting oil at the $98 line.  This morning, oil is at $97.75 for a gain of $1,250 PER CONTRACT – isn't that kind of information worth $1 a day?"

    That is only $250 per contract.  Not sure if the type is the $98 or the $97.75.

  46. Shadow/RUT – Thanks, I should have clarified I was using the TFZ13 Futures contract for nickels and dimes playing support bounce.

  47. $96.75 at the time, thanks Pharm.  That kind of math is NOT worth $1 a day!  8(

  48. phil.

    hate to come back re tsla but this spike has given me some anxiety…..just saw your post about difficult and painful and i can vouch for that…in spades ……….

    i saw your post re a tsla bcs for jan of 140-160…so want to get your thoughts on this spike..the 50dma is 152 and change.

    i am short calls 20×165 and 20x 190 to expire  in jan (hopefully and i know) ……….im also sht 8 jan 130's sold at 9…

    i have 8 jan 15 140 calls and sht 20x 180's (from an old bcs ….been selling off the longs as the stk declined) i am also short jan 15…5x..115 and 5x 130 puts

    my intent was to wind up with the jan 15……sht 180's and the sht puts after jan exp below 165

    so my question is would you roll the sht jan 130's up now and to where.   or wait for this to ease up and as always anything else you would like share……..tks…..

  49. johnO

    Futures I don't do but the RUT is my game. Today is a great in/out day. Hope you caught  that opening spike to short. I more or less expect a late day save today. It is Friday too bad the 13th.

  50. Phil sage

    I make the trade cost simple. If my cost in usually ask is $.50 it is bid of $.52 to break even sell with all the costs covered. My cost on 10 contracts is $.0175 and lower fractional on larger. Just an easy way for me to keep track

  51. rdn4evr

    That was the best laugh of the year. Great find.

  52. Funny how no one cares when GOOG drops $25 in 3 days…

    And what Shadow said on the RUT.  

    Nas barely hanging on to 4,000, AAPL $555 (remember that line?).  

    Dollar still 80.40. 

    LOL, Thanks Craig.  Got confused by the green.  

    TSLA/Mill – I thought you were worried about the $115 short puts?  Funny how fast things change, isn't it?  Can't you please save a reasonable layout of your positions if we are going to discuss them every time TSLA moves up and down $30 (20%)?  

    Of course you know by now to have bought Jan $10 calls to cover them over $130, so you've got that going for you, right?   I'm not going to get into it again but please re-read what I wrote to you in Nov, when you were freaking out at $120.  Now it's not even the $160 I expected and we're back already?  As far as I can tell, you have:

    • 20 short Jan $165 calls  (no idea what price)
    • 20 short Jan $190 calls (no idea what price) 
    • 8 short Jan $130 calls, sold for $9 (I can't understand this as you should have been BUYING Jan $130s to cover, not selling them)
    • 8 2015 short $140 calls (no idea what price)
    • 20 short 2015 $180 calls (no idea what price) 
    • Mystery amount of short 2015 $115 puts (no idea what price) 
    • 5 short 2015 $130 puts (no idea what price)

    Based on your fantastic summary and the fact that it's only December of 2013 and TSLA is at $150.61 – I would LEAVE IT ALONE FOR GOD's SAKE!!!  Do you even know where you'd like TSLA to be?  You SOLD $130 puts and they are at $150, you sold $165 calls and they are at $150.   You also sold 2015 $140 calls so I guess you need TSLA to flatline at $135 for the next 14 months so you don't have to worry but, on the whole, I would just LEAVE IT ALONE FOR GOD's SAKE!!!  Clear?  

    Costs/Shadow – I'm not worried about you, just wanted to make sure people were taking it into consideration.  That's why I don't like to make those calls unless I strongly feel there's 20% in it or more.  

    Best article/Rdn – LOL!  I have another good one:  China's People's Daily picked up The Onion story naming Kim A Chinese state-run site was fooled Tuesday by a satirical story that declared North Korea\'s Kim Jong Un the \Jung Un "The Sexiest Man Alive" and thought it was real.  

    The Chinese story reprinted satirical comments describing Kim's "air of power that masks an unmistakable cute, cuddly side," his "impeccable fashion sense, chic short hairstyle, and," the story says, "that famous smile."

    The story on People's Daily Online on Tuesday illustrates the mutual backscratching that China and North Korea exercise through their government-run media. The incident also shows foreign media outlets' difficulty in navigating The Onion's brand of satire.

    A woman responding to a call Wednesday to the office of the website said it was "impossible that the People's Daily will quote from any unreliable media — we do verify our news and sources."

  53. S4 / Razi – LOL. It's really rare that we fail S3 or R3 and the lines are actually working well this morning.

    When that happens, you have to open up your chart and look for support and resistance in the past. For example, I would say that $96 looks like the next support line and than $94. But that would be a big wheeeee there.

  54. Anyone else see a violent spike down in DIA that quickly reversed? 

  55. MegaMillions: 1 in 258.9M


    that's a gimme ;)

  56. BDC

    Megamillions, what would empress me is someone wins it all buying 1 ticket.

  57. shadow, what is you native language?

  58. Phil/Mega  The 'Mega number' only goes to 15….you lose!  ;)

  59. Phil Hell of a good job on TSLA shall I send you mine????

  60. Legos is warning that shoppers are not spending, LEGOS


    My son owns approximately 258.9M, how about and MAR XRT 85/80 put spread for 1.65?

  61. BDC

    Roots go back to Mayflower II, tried to learn Spanglish but the locals wouldn't talk to me so I forgot it.

  62. DIA, Spike down yes at 8:48 PST

  63. Phil,

          We need to throw in a little humour now and then.

          Puts a smile on peoples faces.

  64. Back up to $96.50 on CL

  65. TSLA/ Phil: I have Jan 145 calls – long $9.40.  sold half this AM- contemplating the remaining 5 – hold or sell. And then recover with Jan14 $150's or whatever is $10.

  66. phil….if im reading you correctly it seems you are saying……

    i should leave it the f…k alone………..based on that i will go into hibernation on my tsla for now…..

    cmon its been a couple of weeks and you know you were missing my tsla dilemma… a root canal…;)

    seriously…….tks ..hopefully when this is over you will be the second happiest person ………

  67. Laughs

    Family way back, Fighting in revolutionary war GGGGGrmpa got hit with a cannon ball but only lost his teeth. That was one bad ass revel or the British were bound to loose with cannons that weak. When I was told the story I laughed and said too bad he didn't catch it and through it back at them.

  68. i am assuming that 97 is the official short line for /CL
    bastard just jumped the fence on me

  69. Weak bounce and resistance lines are holding, QQQ and SPY not even trying.

  70. NYMEX falling behind on dumping contracts. Run up not back to yesterday with weekend dressing added.

  71. Mega/1020 – Really?  I thought it was the same set as the others?  Oh well, shows how often I play.  

    TSLA/Yodi – Sure, I'm on a roll.  8) 

    XRT/Sage – We already had that in STP and bought back short putter.  I guess nothing wrong with setting up a new spread though – premise is the same.  

    DIA/Sage – I have it at 11:50 on TOS, just a flash crash, maybe trying to flush the longs before taking it higher.  

    Humor/Razi – I'm all for that.

    Back to looking for 1,107 on the RUT (weak bounce) then we can worry about the rest but I think this is more about Nas 4,000 dip buyers than anything else.  

    TSLA/Newt – That's the play but, I'd stop out and not cover over the weekend as a fundamental play as $150 is BS for these guys (but so will $160 be!). 

    TSLA/Mill – Just make sure that, when they do cross a $10 line, you momentum cover with whatever call is $10 that's at least 45 days out.  Right now, we're near the $150 line and the Jan calls are pushing it as they are only  35 days to expiration and $9 buys you the $150s with a delta of .52 and the March $170s are $9.70 but delta just .38 so we would stick with the Jans for now and we simply cover when TSLA crosses over $150 and get out when it slows down, especially if over $155 because you just buy another call over the $160 line.  Had you done that at $130 and $140, you'd have at least $5 in your pocket to put towards rolling all your long-term short callers higher.  See how that works?  

    Cannons/Shadow – My dad got his tooth knocked out by a cricket ball.  Both war heroes in their own way, I guess…  8) 

    Oil/Wombat – Even $97 is a bit low.  Just the normal run-up into the NYMEX close to set a better price for the weekend (though calling $97 "better" is a stretch).  

    Daughters/1020 – I guess I'd be mixing Molotov Cocktails and planning the revolution if not for my daughter!

  72. Phil: Thanks.

  73. Phil – DIA flash crash – I see it on TOS – those phantom bars "P-bars" have a way of getting hit in the next week or so.  Worth a DIA 155 Calendar?

  74. RUT just blasted $108.50 – it's a Festivus miracle!  

    You're welcome Newt.

    Nice foot of snow this weekend expected in Killington – very tempting…

    DIA/Rdn – Just goes along with the general short premise for next week but the DIA Dec $155 puts are just .55 and could be a fun play. 

    Cowen upgrades U.S. Steel, ArcelorMittal on rising steel prices
    • U.S. Steel (X +2.8%) and ArcelorMittal (MT +1.2%) are upgraded to Outperform from Market Perform at Cowen, which prefers the most vertically integrated steel companies to insulate against rising raw material costs.
    • Strengthening demand and an accelerating global economic recovery should enable producers with excess capacity to capture latent earnings, the firm says, but non-vertically integrated mills likely will face a margin squeeze from elevated iron ore prices.
    Retail watch: Anxiety at Legos
    • Nobody knows toys like Legos which means anxiety emanating from the Denmark-based company might be cause for concern amongst retailers.
    • Though consumers have stepped up spending on automobiles, housing, and electronics – the early reads on holiday spending have been poor.
    • Legos CFO John Goodwin says this year is the "greatest stress test" the company has seen as it banks on the theory that consumers will shop late and shop often this holiday season.
    • He adds it's difficult to ascertain why consumers are holding off so much this year.
    • Retailers carving out a decent amount of space for Legos include Kmart (SHLD), Target (TGT), Wal-Mart (WMT), and Barnes & Noble (BKS).
    SodaStream falls 5.1% to dip below $50
    • SodaStream (SODA -5.1%) trades lower with volume heavy on a momentum move not tied to any specific company news.
    • Share have slipped below $50 for the first time since April.
    Medtronic implants pacemaker without surgery
    • Little-noticed from earlier this week, but worth mentioning: Medtronic (MDT) on Monday announced the first human implant of the world's smallest pacemaker, the Micra Transcatheter Pacing System.
    • One-tenth the size of a conventional pacemaker, the unit was installed not with surgery, butdirectly into the heart with a catheter inserted in the femoral vein.
    • " Once positioned, the pacemaker is securely attached to the heart wall and can be repositioned if needed,"  says the company.
    • The race begins: In October, St. Jude Medical (STJpurchased Nanostim, a private manufacturer of a similar device. Nanostim's offering is being readied for European markets, but has not yet won formal FDA approval, though it has been given additional approval through an exemption for "investigational" devices.
    • Medtronic's unit has been granted investigational status worldwide.
    • Press release
    EA, Take-Two rally after NPD's November figures released
    • NPD estimates U.S. physical retail video game sales fell 24% Y/Y in November, after having risen 12% in October and (thanks to the Grand Theft Auto V launch) 52% in September. The fact many gamers directed their discretionary income towards buying next-gen consoles may have played a role here.
    • Electronic Arts (EA +7.2%) investors appear pleased Battlefield 4 came in at #2 on NPD's bestseller list, in spite of the well-publicized bugs and gameplay issues EA is scrambling to address. In addition, Madden NFL 25 is ranked #4 after falling out of the top-10 in October, and FIFA 14 is at #10.
    • Activision's (ATVI +0.1%) Call of Duty: Ghosts topped the bestseller list, and Skylanders: Swap Force is ranked #7. Take-Two (TTWO +2%) investors appear content with the factGTA V came in at #5 after easily topping NPD's list for two months; Take-Two's NBA 2K14 is ranked #6, up one spot from October.
    • NPD also states the PS4 outsold the Xbox One in November both in terms of hardware and game sales. But that might simply be the result of an earlier launch (Nov. 15 vs. Nov. 22). Sony claimed 2.1M+ PS4 sales as of Dec. 3, and Microsoft claimed 2M+ Xbox One sales as of Dec. 11.
    Broadcasters and streamers adapt to binge viewing trends
    • New polling from Harris Interactive confirms that consumers streaming video content prefer the practice of binge viewing.
    • The news isn't a shocker to Netflix (NFLX -0.2%) and Amazon (AMZN +1.3%) which have been pointing toward their own viewing data for quite a while.
    • Redbox Instant (VZOUTR) could be the next streaming service to bring on TV shows for binge viewing, according to media buzz.
    • The read-through for broadcasters (CBSAMCXFOXADISCMCSA) is mixed. Advertising rates could suffer if more viewers are willing to wait until series are available for streaming, but the payoffs for quality content are getting higher and higher. Just this week, CBS CEO Les Moonves tipped off that Amazon paid $700K per episode for streaming rights to Under the Dome - while AMC Networks knows full well that without Netflix hit show Breaking Badwould have broken down.
    OpenTable slumps in response to Apple patent application
    • Apple has filed a patent application for an advanced restaurant reservation/ordering system. The systems would be aware of how much time a customer has spent at a table, would alert waiting customers when a table is ready, and would provide menu recommendations based on customer preferences.
    • OpenTable (OPEN -4.1%) investors appear nervous about the patent application. However, taking share from OpenTable in the face of the restaurant reservation leader's huge network effect would be an uphill battle, especially if (as one would expect) Apple's offering is only available on mobile devices to iOS users.
    • OpenTable's services have been integrated with Siri for more than a year.

  75. Stevegb200, are you on?  Greg has tried to send you mail at 8:20 and I know you wrote to him there was a problem.  

  76. Phil // NYMEX
    I was expecting a big drop off because of the inventory crunch. Are you saying they'll run this up  into close.
    That would suck because its Friday //

  77. Daughters / 1020 – I guess I am also an exception to that rule as I have 2 of them and well, you know my point of view!

  78. Oil/Wombat – They ARE running it up into the close but they do that every Friday with few exceptions.  Inventory rollover is NEXT Friday, not today.  

  79. IWM held over resistance for 30 minutes, headline, kind of, RUT, is hanging in but real headliners not following.

    Not a single sign of volume on my watch.

  80. Phil/Oil Inventory rollover~ the current /cl contract will be expired on 12-19. Is this the reason for causing inventory roller over on the next Friday? I don’t understand the oil inventory rollover concept.

  81. phil,

    let me use todays chart as i see it opened and went to 151 change and came back and went again 151 and came back….so if i catch the cross …….over the ten dollar line………then sell as it goes below and that being the case today would have done it twice….

    is it kind of like the futures with tight stops and you keep doing it till you get it right………but the key would be to catch the cross i guess………if you miss a buck or two because of a spike …do you still get in at the say 2 or below over the 10 number……i.e. 152…..tks………

  82. Crude Oil Exports – Should it be legal for US? Marketplace story:

  83. Phil,

    Do any Dec 21 SPY puts look good, if next week heads further down?



  84. scott

    My opinion is unless oil companies start paying a reasonable fee for the oil and gas, and all subsidies removed, NO.

  85. A side benefit to no crude exports with allowing refined exports is refining capacity is kept up past domestic demand. Don't forget what happens when a refinery is shut down, even for maintenance.

  86. TSLA – looks like it managed to close a gap to the October swing low when it peaked up, so… unless we get more hot air from His Muskiness, back to 120 to close the year, says I.

  87. Phil – what do you think of selling SHLD puts now or wait for better entry in January?  Jan 2016 $30 puts now @ 6.65.  Thanks.

  88. Silk Road/BDC – looks like you have even more venues to spend your bitcoins now..

    This was interesting:  "If you think these markets are just about drugs, you’re missing the primary point. The discussion board at Silk Road was full of Rothbardian economics and the philosophies of freedom."

  89. Rejected again at 1,107 – others didn't even threaten.  

    Oil dropped like a rock off that $97 line – ROFL!  Back to $96.50 already and not holding that. 

    Volume/Shadow – Total crap, just 40M on the Dow at 2pm.

    Rollover/Invest – Oh, Thurs and not Friday?  They have less time than I thought.  The assumption is that they don't REALLY want any of those barrels they have open contracts for in Jan (now 128K for 128M barrels).  Figure they want 25M at most, probably more like 15M with big inventories, the rest is FAKE orders they trade all month long like hot potatoes.  They have to either cancel them or roll them to the next month – both of which cost money so it drives down the price of the unwanted front-month contracts as the losing traders (stuck with the hot potato) try to get rid of the last of them.  That's the general downward pressure on the NYMEX into the last 10 days of the cycle that we like to play.  Lots of other variables, of course, but that's the gist of this part.  

    TSLA/Mill – As I said, I would NOT have done it at $150 because it already popped two levels ($130 and $140) without a pullback.  Technically, it came up from $115, which was a 50% retrace of the run from $40 (where it broke out) to $190 but the real run was from $40 to $100 ($60), where it consolidated and then from $100 to $180 and a 50% retrace of that is $140 and $40 to $140 is $100 and a 20% retrace of that is $120 and a 38% (strong) Fibonacci retrace is 38.2% of $180 = $111.24 so right in that neighborhood should hold if TSLA is still bullish.  The "right" price for TSLA is likely between $120 and $180, which just so happens to be $150, so it's essentially the "neutral" line, where we don't expect it to be very motivated to go higher without good news.  If you miss a buck or two because of a spike, you have to decide whether the spike has legs or not and that depends on why it's spiking but, fortunately, since you have so much invested in TSLA, you spend a lot of time reading about them and it's not likely you wouldn't be fully aware of WHY they are going up or down on any given day.  

    Exports/Scott – Ridiculous.  Maybe if we can add an export tax that at least puts WTIC on par with Brent when we ship it out of the country.  That money could then go towards solar subsidies so every 1M barrels we ship out generates $15M in taxes that pay for the installation (at $50K per home) of 300 homes worth of solar panels, so, at the end of a year exporting 1.5M barrels a day, we'd have taken 164,250 homes off the grid, saving (at $300 a month for electricity) homeowners $591M a year in electricity costs.  Since they save it every year for 20 years, at the end of 20 years we'd be saving consumers $12Bn per year on $54Bn a year in oil exports.  That's a program I can get behind!  

    And what Shadow said.  

    SPY/Streth – Big gamble into next week as the Fed comments will make or break you.  So it's a coin flip.  I like the DIA's above better if you want to risk .50, especially as XOM and CVX might follow oil down.  

    TSLA/Scott – I agree, you have to take into account how much pumping it took to get them back to $150.  This is why we read the news (and the Tweets). 

    SHLD/Bai – I like them down here.  This is where we keep coming in (near $40).  You can sell the 2016 $40 puts for $12 and that's a pretty good net $28 entry – I'd leave it at that.   In fact, in the Income Portfolio, we have 10 2015 $30 puts (now $4.35) so let's roll them to 10 of those for + $7,650!  

  90. $1/day…..craigz….U and I are birds of the same color, just different feathers… :)

  91. In the Long-Term Portfolio we have 8 short SHLD 2015 $35 puts, now $6.40 ($5,120) and let's roll those to 20 of the short 2016 $40 puts at $12 ($24,000) and pick up $18,800

    Also in the LTP, we sold 10 GOOG 2015 $850 puts for $46 and they are now $29.20 so let's kill those and sell better later.  

    Also, also, we seem to have 5 short TSLA 2015 $115 calls and I have no idea why, I would think they should be puts unless they are some kind of spread leftover.  Either way, let's sell 10 TSLA Jan $145 calls for $10.75.  

  92. Cramer – just saw yesterday's "unconditional love" spot. LOL!

  93. CNBC high-fiving because the Dow is still green.  Can viewers seriously be this oblivious to context?  

  94. LTP / Phil – The short TSLA calls are from an 85/115 spread we had opened back in May. We sold the long calls with a 400% profit ($44K) and left the short calls opened.

  95. TSLA/StJ – Well silly us for not stopping out when they dipped to $115 then.  

    As I thought, those TNA $65.81 puts are still .05 even though TNA at $66.85 with an hour to go.  Wasn't worth the worry, especially as they were back to .70 at one point that I noticed.  

  96. Weekly Stock Market Commentary 12/13/13


    By Lawrence G. McMillan

    The market — as measured by the S&P 500 Index ($SPX) — has declined on eight of the last ten days, and that has taken a toll on the technical indicators. However, $SPX is sitting right on support at or just below 1780 (see Figure 1). Hence, shorting the market now could be a mistake.

    Equity-only put-call ratios have been meandering at very low (i.e., extremely overbought) levels on their charts for a couple of weeks. Within the last two days, they have started to rise, and they are now both on sell signals.

    Market breadth has continued to be relative weak. Both of the breadth indicators that we watch are on sell signals, but are already in oversold territory.

    Volatility indices ($VIX and $VXO) remained low for quite a long while, and $SPX was able to rally while they did. But then $VIX broke out over 14 last week, pulled back briefly, and has now advanced to 15.54 as of today. This an upside breakout for $VIX, and that is bearish for stocks.

    In summary, if the market breaks down, it could make a sharp, but short-lived plunge lower, but we expect a rall by year-end

  97. Phil

    I like your oil tax idea, something like that might even bring out a overdue leap in technology. The tax could also buy flywheels which does more with less changes.

  98. Phil – am on, just day gig getting in way.  Did not receive email yet, thank you for the follow-up.

  99. phil,

    as you know ….i have said a few times ……thank you for your help….made a number of mistakes along the way and find myself trying to dig out of those mistakes….lot of reasons and hopefully trying to learn as i go…

    i appreciate your help and the occasional ass kicking… i got involved in some trades and didnt scale…and quite honestly who knew tsla at 75 when we shorted the calls was going to 190 and nflx from 215 to 380 etc…… again always know i appreciate your counsel……….as i try to work myself out of this jam……….with your help………..

    have a good weekend……

  100. Email/Steve – I sent and Greg sent so something wrong, do you have an alt Email address we can use?  I know Yahoo is having system problems but did not hear anything with AOL. 

    Flywheels/Shadow – You know I like those.  

    Mill, it's no problem – I am here to help but I just don't like having same conversation over and over – it's kind of frustrating.  To be very clear, I don't think TSLA goes back over $160 or under $120 – that's the expected range.  When it's at $120 or $130, I'm enthusiastic about buying longs as they cross lines and, when they are up at $150 or $160, I like to buy some shorts (or sell calls).  Why?  Because I BELIEVE in the range!  I KNOW what I think TSLA is worth ($130) but we allow for a little enthusiasm to $160 (+20%) once in a while.  

  101. Pharm

    Any interest Zink’s rated them buy

    ·        Cryolife Inc. ( CRY)

    ·        Furiex Pharmaceuticals Inc. ( FURX )


  102. Flywheels

    What I like better about them is storing excess power on the grid and perfect match for wind farms making power at the wrong times. A bonus is not much to improve on except better magnets for less. 

  103. Phil: Nice rolling adjustment on SHLD increasing premium collected without increasing risk much, and taking advantage of the move down to position better. Thanks.

    On that note, I would done better had I closed out the Jan15 30 puts several weeks back when I had about 50% with over one year to go, then I could have reentered.  But no crying over spilled milk.

    Have a great weekend Phil and everyone.

  104. Phil,

    what are your thoughts on where aapl is going over the next 30-45 days?

  105. man, CL will not let go of that 96.50 //

    you really think they're going to push to 97 on close ?

  106. Thanks Phil – got your note and replied but no Greg, spam or anywhere.

    Finally stopped lurking (and learning) and dipped my toes in with the SHLD play -- kudos to all of you for the dialogue, will admit to it being a bit intimidating to someone new to the options game but do appreciate the environment and how you embrace relative rookies.  Cheers and enjoy the weekend.

  107. MSFT – nobody wants to be CEO?

  108. Phil on GOOG pls explain why we buy back Jan15 850putters with 29$ of premium or do you expect they will go down to 850 especially today as they down 8$ TIA

  109. qc – CRY makes me want to cry…no, don't know enough about their area of porcine valves, but looks interesting.

    FURX – first drug on their pipeline and commercialization is for PE (premature…).  The rest of their info is not really marketable to me.  Most are GLP-1 compounds (think AMLN or MRK or BMY or AZN or NOVO or….).  For $400M they are ok.  The most interesting one is their antibiotic.

  110. scottmi

    I would take MSFT CEO for 1/10 pay with big bonus if my Wind Generator/Flywheel in one takes hold. Where are they going with computers, diversify, and stay alive. What to do with all that cash? Answers, only the shadow knows.

  111. Scottmi – I know Phil doesn't think it will happen, but don't count out Mulally.

  112. MSFT:  It's not that nobody wants to be the CEO, it's that they don't want anybody who wants to be the CEO!!

  113. That's right, someday companies might realize a Name is very expensive and unproductive.

  114. NAK – how about that, I bailed yesterday and it's up 11% today, can't say I didn't tip you off to buy 8) 

  115. They keep jammin' that RUT up but it doesn't stick.  

    You're welcome Jbur.  It's just sticking to the "Be the House" basics – in every situation, we look for an opportunity to sell more premium without taking on more risk (or as little as possible).  That's also why our rule of thumb is to take (or protect with stops) those 50% profits. when they come.  As you say, milk spills… 

    My daughter (Jackie) literally cried over spilled lemonade yesterday.  The lid was stuck and then it came off and went all over the counter and she was so upset she ran to her room.  I'm so not in the mood for teenage girls! 

    AAPL/Rms – Q4 expectations are back up but I think they can handle the expectations.  I think they should hit $600 on earnings but, whether they go over depends on the earnings.  

    Oil/Wombat – I'll take a $1 drop every couple of days.  Very nice rejection at $97 today.

    Oops, bell!  Have a nice weekend everyone! 

  116. Teenage/ Phil: I hear that.  Ours is only two and a thousand times more in it than our boys.

  117. I'll pass your note along to Greg, Steve and welcome to the Chat Room (officially)!  

    MSFT/Scott – That job is a career-killer.  Anyone good enough to be the CEO (very complex company) would understand they have to fight the terrible culture Ballmer has fostered and it would take years before they could be effective.  Meanwhile, the press would rip them apart for every misstep the company makes and, ultimately, a bad economy would cause them to lose their job despite their best efforts.  No thanks!  Who they will end up with is an egotistical 2nd-tier CEO who will be drawn like a moth to a flame by the money and prestige and that will likely be a train wreck.  Elop is their best chance (simply because he almost has to do it if they ask) but they blew that by brushing him aside already so he has "2nd Choice" plastered on his forehead already and you can't change culture coming in like that.  

    Imagine showing up tomorrow for your first day on the job in a company that does $1.5Bn a week in business in 100 different product lines, many of which are very technical, with 100,000 employees spread across the planet.  You have no connections to the customers and no feel for the dozens of people who directly report to you and it will take you all of your first year just to shake hands with the people who report directly to them – forget meeting the customers!  

    The company is being sued in dozens of countries for anti-trust, privacy, investor issues, etc. and  has tens of Billions of Dollars of projects that are in progress, any of which you could be blamed for if they falter and the accounting alone is being run by dozens of firms in hundreds of countries constantly moving piles of money you almost certainly have never had to deal with in your life every single day.  You don't even know your CFO but you have to trust him with your corporate life from day one.  

    Meanwhile, you are expected to run all this, execute all that, deal with the rest AND chart a successful path for the company's future.  Having fun yet?  

    GOOG/Yodi – Because, at $1,061 with our short Jan $950 calls, if they fail to go any lower, we'll want to sell higher puts anyway and roll the short calls.  If they do go lower – then why would we want to hold the puts so, either way, we want to buy back those puts.  This is just the in-between stage where we select which puts to sell next, consider it a very slow roll…

    NAK/MrM – I told you, it's a lottery ticket.  Gotta be in it to win it.  

    2/Newt – Sorry but those hormones kick in and you are toast.  Enjoy the next 10 years while you can – after that, you'll begin to understand why men die younger…  8)  

  118. Thanks on GOOG Phil and all have a nice week end

  119. Phil, thanks for explaining the oil inventory rollover. I think it’s another expression of ‘the pressure to sell’. NYMEX has around 585k contracts (almost 600k) in the 4 front months. 4 days left till Thursday. They should feel the heat if there is no other crazy events pop up to distort oil market. Thanks for yr help again! :)

  120. You're welcome Yodi, Invest.  

    On oil, it's the front month that's closing where the real pressure is but the more total barrels in the front 4 (and over 550K is the old benchmark, now 600K for "too much pressure") makes it harder for them to roll for good prices – so they have to dump.  Today it seems, some people didn't want to risk the weekend.  

  121. Phil, thanks for refining and developing my oil trading knowledge. Have a good weekend!

  122. I have had it with IB…. Any suggestion for platform?  I trade commodities , options, currency but almost never trade bonds .  Been with a IB for years, tired of their margin policies 

  123. Platform / Hummer – Go with TOS and you can trade all these instruments. The software is much better from what I tested between TOS and IB.

  124. I would leave T-Mobile in a hurry if that happened:

    Sprint Corp. (S +3.44%) is working toward a possible bid for rival T-Mobile US Inc., (TMUS +8.65%) people familiar with the matter said, setting the stage for a giant telecom merger that if permitted by regulators would leave the U.S. wireless market dominated by three big companies.

  125. Unequivocal message from yesterday's Sosnoff Says:


    Who knew exit signs were painted green? 
    GOOG: Up 48% in 2013
    ES : Up 15% since June  
    TSLA:  Up 317% for 2013

    OPEN: Up 53% for 2013
    UNG: Up 24% since Nov
    TWTR: Up 37% in 10 days
    NFLX: Up 305% in 2013
    OIH: Up 19% for 2013
    WYNN:  Up 52% for 2013


    I've been getting out now for a long time. Continued to find buyers for some of my BCS and selling long term puts to make up the difference. Cash pile increases and this is necessary as I am positioned nicely long in certain positions and badly short in a number of others. For the remaining BCS I still have, selling front month calls (mainly two months out to gain some decent premium). 

    My canary in the coalmine (SPX bear put spread) is telling me there is not much air left down there. Without cash and plenty of margin I do not think I would be hanging around to play this trade a day game. When the move comes, there will not be an orderly queue at the exit.

  126. The age of robots is getting really started now:

    The New York Times reports tonight that Google has acquired Boston Dynamics, builder of terrifying walking robots DARPA-related projects like WildCat/Cheetah, Atlas, Petman and Big Dog. Andy Rubin has moved over from leading Android to directing Google's robotics efforts and tweeted a link to the story, commenting that "The future is looking awesome!" While we're sure it does — if you always thought the T-1000 was just misunderstood — reactions from meatbags are ranging from slightly uneasy to completely freaking out that a company with robots that go anywhere is teaming up with a company that seems to know everything about us.

  127. Asians, especially Filipinos, have embraced Crocs with open arms. Asia now accounts for 41% of the company's total sales.


  128. Phil,

    Good Morning!   I wonder if I might ask to to elaborate or quantify to some degree your reasoning for going to cash. Obviously, it is your perception that you feel a significant downturn in the market may soon be at hand. However, I don't quite read from you what you think may be the likely extent and/or duration of such a downturn. Do you see a 5% or 10% "correction" or do you see a more recessionary 20% decline that would last for sometime or perhaps you see a re-run of the great rececssion we had five (5) years ago.

    I ask this because the accounts for my family that I manage are heavily invested in preferred stock which tend to be more stable but also took a real beating during the big one five (5) years ago. This type of stock is not easily dumped and re-purchased since the bid-ask spread is usually fairly wide and of course while we're out of the shares we would also miss the quarterly dividends.

    Also, I have been buying some of the beaten down mREITS which have been crushed way beyond their book value by our monthly "taper trantrums". These stocks did quite well during and coming out of the big downturn. Do you think they are at risk with the kind of downturn that you're perhaps seeing?

    Your thoughts are much appreciated.

  129. STJ,

    Could you advise how I can view the current LTP?

    STP is featured frequently but having trouble finding the Long Term Portfolio.


  130. Hola people!  

    Margin policies/Hummer – I think all the brokers are messing around with the rules at the moment as they fear a crash wiping out investors, like it did in 2008.  ETrade almost went bust in that crash as their margin requirements didn't stop them from taking hits on over-leveraged trading accounts going deep negative as some stocks gapped down 20% in a day.  So I'm not sure who's going to be "better" than IB, who were way too liberal in the first place but we do like TOS for ease of use and execution, that's for sure.  

    TMobile/StJ – So funny how the whole telco breakup is collapsing back in on itself again.  

    Sosnoff/Winston – Gotta agree with that take.

    Robots/StJ – And there's a new Terminator TV series coming.  Maybe this time it will be sponsored by GOOG and IRBT and will show the softer side of terminating…

    Robots that not only take your job, but make sure you aren't around to become a burden on society either – that's very GOP!  

    CROX/QC – There's always going to be a market for those things.  Unfortunately, they let the quality slip, which I think was a huge mistake but I do like them down around $12.  You can sell 2016 $12 puts for $2.43 and use that to buy the $10/17 bull call spread for $3 for net 0.57 on the $7 spread – it's a nice way to play them long-term.

    Cash/CSL – I like it because it's flexible and puts you in a different mindset, as in:  Now you have to MAKE me want to take my CASH off the sidelines, as opposed to feeling like this is market money that SHOULD be invested in something.   That kind of attitude causes you to pick the best of a bad bunch.  

    SPY 5 MINUTEI see those 50 dmas being tested and we're not far from that.  After that, if we weak bounce, then it's off to the 200 dmas, another 5% down for a nice 10% correction and, if those don't hold – we're doomed.  Clearly though, the CBs will intervene at the 200 dmas so it's very unlikely we drop further than that without another major  country crisis popping up.  

    Ukraine may be an issue but let's not forget Argentina, Egypt is still a mess, Hungary no one cares about but yikes, South Africa is very bad, Turkey is worse, Portugal no one even talks about because Spain distracts them but Italy is worse than both.  But let's not forget that you can add up the debt of all those countries together, double it and double it again and you just about get to where Japan is.  

    INDU WEEKLYChina is down to AA- (same as Estonia), Pakistan B- (and we hate to see nuclear powers with bad credit!), we're AA+, Vietnam is BB-, Russia gets 3Bs, which is actually half a B better than Indonesia.  

    So how healthy is the World economy?  Clearly the ratings agencies aren't impressed.   

    I think oil crashed down to $85 and that takes down the energy sector and probably other commodities and financials with it.  Then we have a problem with oil-producing countries who need $100 Brent to survive and, of course, China is a complete facade that could fall over at any moment.  

    So, as to the question re. preferreds – look at what happened to each of your stocks in 2008-9 and make sure you are comfortable with going through that again (worst case) and then contemplate at what point you would slap on some index puts (like a failure of S&P 1,760) to somewhat offset the loss.  If you can't use downside hedges, then CASH is a very viable option.  It's been a good year, money doesn't have to be "working" all the time – your stocks have had exceptional runs but none of that matters if your strategy is to refuse to take profits and so much the worse if you would take a loss but not a profit!  


    I agree on the MReits but they could be in for more pain as well.  I certainly wouldn't want to be more than 2x in on any of them.  How realistic do you think 3% interest rates are.  Would you lend someone money at 3%?  Well, you do, you give it to your bank for much less if you think about it.   Still, people are only willing to lend at such low rates in a very bad economy, if the economy is really improving, the money will go to other places and rates will rise – because rates are how borrowers attract money away from other things.  

    This is an exceptionally manipulated market.  In the real world, bonds have to keep up with stock market returns or no one would buy them.  With the Fed buying more than 1/3 of all bonds and Japan buying another 1/3, there's little supply left and rates stay low but, should either of them simply stop buying or, God forbid, start selling – how long do you think rates will stay at 100-year lows?  

    Big Chart – We're close to our primary goal.  A blow-off spike down on Tuesday and then a big save by the Fed on Wednesday for a quick Santa recovery is the most likely scenario for the next two weeks. 

  131. Phil,

    Are people aware  of the new medicare taxes  = .9% additional tax on earned income and  = 3.9% additional on investment  income starting in 21 days. 

    That is going to overhang this market for months.


  132. SHLD / Phil – Can you do a short explanation of why you like SHLD at this level while there financials (I am an amateur looking at these) look terrible?

  133. AAPL iphone sales are killing it. Expect next earnings to be a good one.

  134. OK – we have to officially move current comments to under the Oct Trade Review (newest post) as I can't keep checking 4 places. 

    New taxes/Strether – Excellent point.  Could be a good reason for tax-related profit-taking this year.  

    SHLD/Jfaw – Same reason I've always liked them, they are worth more dead than alive.  Think of how many Sears stores are in key locations on land they've owned for 100 years.   They have 2,000 big stores and 1,500 catalog stores and 500 "specialty stores" around the country so 4,000 locations.  They have $7.5Bn in inventory and about $1Bn in cash and maybe $10Bn in debt and serviced as cash-flow is essentially even on $40Bn in sales vs $60Bn for AMZN though AMZN (who also doesn't make money) is valued at $175Bn vs $5Bn for Sears and AMZN has no property while Sears has 4,000 locations that, if they were worth only $500,000 each (and again, I'll bet you can think of 5 near you that are worth millions each) would be worth another $2Bn and then there's the value of the brands – some of the most famous names in America.  So yes, down around $5Bn in market cap, I start liking them again.  

    AAPL/BDC – Good thing we're long in LTP!  

    Tool/Deano – I love it!   Makes me feel like we will actually get to the Futures we imagined.  

  135. SHLD / Phil – I thought it was a real estate play. Thanks for clarifying. Always good to get on the same page.