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Faltering Friday – Fundamentals Finally Matter

Wheeeee – this is fun!  

We had a nice $1,000 per contract gain on the oil Futures (/CL) this morning, as I said to our Members at 4:15am in the Chat Room:  "The Dollar has found a floor at 80.50 and is back at 80.60 at the moment.  Oil is not going to like that and of course we still like the short at $97.50 on /CL."  We just got out of the trade, taking the money and running at the likely bounce line and now we're looking to re-load at $97 or a cross back below $96.75, but the easy money for the day has already been made.  

I mentioned our oil short in yesterday's post as well (subscribe here if you want to get ideas like this delivered to you every day) as well as our Russell (/TF) futures short at 1,175 and we took that money at ran at 1,163 for another $1,200 per contract winner when I called the turn at 2:50 pm in yesterday's Member Chat.  Gold Futures (/YG) also gave us a $1,000 per contract winner, rising off our $1,235 entry all the way back to $1,265 where we —- took the money and ran!  We didn't do anything special yesterday that we didn't teach you in Tuesday's Webcast on Trading the Futures.  

In fact, if you check out that Webcast link, you'll see that we sent out a trade idea for DBA, which we added to our Long-Term Portfolio for a net $200 credit on Tuesday and already, as of yesterday's close, the trade is already up $250 for a 125% return in just 2 trading days.  Still, that trade is only "on target" as we anticipate making $4,200 (2,100%) if all goes well this year.   That is just one of our 5 Inflation-Fighting Trade Ideas for 2014 at Philstockworld.  

Speaking of out of control inflation – I told you so on Argentina, back on Dec 13th but, like many of the Fundamental concepts we point out at PSW, it takes a little time before the retail investors catch on to our investing premises.  Today, Argentina is on top of every fund manager's agenda as the Government was forced to devalue the Peso by 12.7% yesterday, as 28.4% inflation is destroying their foriegn reserves.  

“Argentina is ‘biting the bullet’ but without a full set of teeth,” Vladimir Werning, an economist at JPMorgan, wrote in a report yesterday. “Insufficient interest rate or fiscal adjustment leaves the devaluation vulnerable to generating more inflation pass-through than achieving real competitiveness gains the government desires.”

The peso dropped as much as 16.5 percent over the last two days to 8.2435 against the U.S. dollar before the central bank intervened in the market by selling $100 million. The move helped trim yesterday’s losses to 9.4 percent from the central bank’s closing price Jan. 22, the biggest daily decline since the financial crisis that followed the country’s record $95 billion default in late 2001.

The peso closed at 7.8825 per dollar, and changed hands in the illegal street market at 13.06 pesos per dollar, according to Buenos Aires daily Ambito Financiero, which tracks the rate.  If the bank hadn’t stepped in I don’t know where it would have gone — surely 10 or 11,” said Francisco Diaz Mayer, a currency trader at ABC Mercado de Cambio in Buenos Aires.

This is, of course, all just a side-show to what's going on in China (subject of yesterday's warning) as the head of ICBC said this morning that the lender WILL NOT compensate trust investors for losses in the broken instrument his bank promoted.  "The incident will be a lesson for investors on moral hazard and risks associated with such investments," Jiang told CNBC from the World Economic Forumin Davos, Switzerland.  He followed that statement by saying "Muhahahahaha" for an uncomfortable amount of time.  Well, as long as the investors learned something (like never to trust a Chinese bank again)…  

Overall, though, we are just "on track" with the sell-off we've been expecting all year and our new long and short-term virtual portfolios we track for our weekly webcasts are perfectly balanced – actually GAINING a bit of money during yesterday's market turmoil.  

Our Long-Term Portfolio held a $4,375 gain (set up on 11/26/13) and, because we anticipated the sell-off, our Short-Term Portfolio jumped to a $1,370 gain as of yesterday's close.  That's the value of learning to BALANCE our portfolios as well as following our core strategy of BEING THE HOUSE – Not the Gambler.  

That $1,370 gain in the Short-Term Portfolio is off a $2,035 cash credit, so up 67% in less than 2 months.  In the Long-Term Portfolio, we have a $13,710 cash credit and that makes the $4,375 profit 32% against the credit and "on track" in our more conservative portfolio.  As I have been saying over and over until I'm sure you are sick of it – we are "Cashy and Cautious" because we've been waiting for a pullback to make bigger investments – but that doesn't mean we can't make a few Dollars while we wait, right?  

I'll review some of our 2014 trade ideas over the weekend and we'll be looking for some nice bottom-fishing picks in our Member Chat as we are itching to deploy some of our sideline cash and, if this is all the dip we're going to get – we'll take it.  But beware the Macros – if the popular press starts picking up on all the horrible stuff that's going on in the World, the beautiful sheeple may start stampeding out of equites.  Already TLT is back over 107 – we'll see if the Fed can talk it back down next week, ahead of another round of note sales.  

Also, watch the timing with China's Lunar New Year Celebration, which begins next Thursday.  Hong Kong will be closed Friday and Monday but Shanghai will be closed Thursday through ALL of next week – not good timing at all if people begin panicking out of Trust Accounts next week!  

A whole week off – must be nice….

Have a great weekend, 

- Phil


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  1. Good morning

    Might be a good shopping day today

    Here one for the armchair traders

    CCUR buy the stock at around 8.20 to 8.40 and sell the Sept 7.5 straddle for 2.20 You might get called on the div as the yield is 5.7% but what the hack you collected already 2.20 as Phil explained to one member yesterday be the house not the gambler. In this case you buy the stock for 6.20 and your assignment is at 7.50 with a stock which pays 5.7%.

  2. Phil

    most of my majors aren't performing ( ABX CLF AAPLE BTU OIH IRBT TASR etc ) and I'm watching the same charts you are   Would you consider more protection other  than the small TZA position were carrying.  I'm fully expecting  a 10% whack this next quarter. 

    Would also appreciate your view on FXI. All the bad news is hitting it hard. 

    BTW – good morning %>

  3. Palotay / TSLA – thank you for sharing your hedging strategy for short call positions. I've been looking at the same strategy for similar positions – TSLA being one them. Thanks, Eric

  4. Flipboard/Phil….following up on one of your questions from a day or two ago. I'm following your magazine. A lot of times its more convenient to whip out the iPad and read the articles instead of messing around with the laptop. 

  5. USO and/ or SCO

    What do you like for a new entry? 

  6. Good morning!  

    Still very choppy and not a good day to buy.  Too much investor optimism out there and people can be SHOCKED if they take the time to read the news this week and the news happens to start talking about the melt-down in Emerging Markets, the riots in the Ukraine, Turkey's mess, Argentina, China….   That, combined with the holiday week in China that will cut off a big chunk of the World's potential market participants (they take this holiday seriously) – does not make for a good investing climate.  

    Sure we want to pick up deals like LULU or SHLD when they crash below value on earnings misses but let's not consider every stock that pulls back 5% from a 50% one-year run to be a "bargain"!  

    The Dollar popped back to 80.51 as the Nikkei touched 15,000 (now 15,135) so that's BOJ intervention at 80.20, which was 102 Yen to the Dollar – those levels are REALLY good to know!  

    Oil is $97.09 coming into the normal 9am pump job and I doubt they can take $97.25 out with a Dollar over 80.50 – we'll see.  Gold touched $1,273 but gave it up there and is back at $1,269.  XLF getting worse, showing $21.40 at the moment and TLT 107.40, which is going to make our own Central Bank want to intervene.  

    RUT made a perfect bounce off 1,160 and, if you are playing /TF – that's the kind of stuff you look for when you get to a major support.  Now we'll see where we end up with our levels at:

    • Dow 16,300 and 16,100
    • S&P 1,825 and 1,800
    • Nas 4,125 and 4,075
    • NYSE 10,275 and 10,150
    • Russell 1,155 and 1,140

    That's from this morning, by the way – if you are a new Member, always check the end of the previous day's post for early morning news and chat.   I generally just keep going forward, it's all one continuous conversation from my perspective…

    I got done very early today because I was up early, as I tend to be when the market is exciting.  

    CCUR/Yodi – I like the strategy but I'm not sure about the stock.  Quite a run you are chasing on essentially a penny stock ($75M market cap) - what's the deal with them?  

    Majors/Wombat – Well this is a great weekend to discuss that kind of stuff.  First of all, take a real look at the new LTP and STP – we barely have any positions.  In the LTP, we sold 6 sets of naked puts, a bull call spread and a bear put spread and the rest is 7 buy/writes and, actually, the DBA bull call spread is kind of a buy/write with CAKE so it's 8 buy/writes, 5 naked puts and a bear put spread (GLL).   Very, very conservative and we're not trying to make huge gains and we're not.  

    We allocated $140,000 of our margin and made $4,425 in 2 months (3.1%) but that's GOOD!  I'd rather make 15% a year consistently than 30% one year and be flat the next.  15% compounded is MORE than 30 and 0…  Also, of course, buy/writes are back-loaded with profits – you don't expect to make much until the last quarter of the trade, when the premiums begin to crush. 

    You have ABX, CLF, BTU and OIH – all commodities and I have warned people off BTU and OIH many, many times.  Then you have AAPL, IRBT and TASR of which, only AAPL is a current pick because we're waiting for IRBT and TASR to have pullbacks before we enter.  If you've had IRBT a long time, then it's up but if you came in around $35, that's where we took it off the table as it was more than a double for us.   Same with TASR as we took $17.50 and ran from our $4 entry.  

    Even though I LOVE both of those stocks LONG-TERM, it doesn't mean they can't be short-term overpriced.  If you are a LONG-TERM investor (decades), then who cares what they are doing this year but, if you are worrying about your "quarter" – why would you be holding any stocks that are high in the channel in such a toppy market.  

    FXI you KNOW I wouldn't play bullish and, as I've said many times, I wouldn't play them bearish either because China does things like suddenly pumping $90Bn into the system overnight.  You may as well play roulette for all the logic that goes into trading that index.  

    Also note we took big hits on TZA and other hedges in the STP but we didn't press the bets.  Why?  Because now we have breakdown levels on the Big Chart that are well above our LTP hedged targets, so we don't NEED the hedges until/unless we fail.  We hedged first, then bought long-term positions, then the hedges died when the market went up and we no longer needed them because the gain in the market became our hedge.  

    Should we start buying another round of bullish positions, we'll start to hedge again but now our STP has speculative hedges like GOOG March $1,000 puts an WYNN 2015 $165 puts and some Feb TZA short puts (rolls from dead artificial buy/write) and FAS Money, SCO and more TWTR and WYNN shorting spreads.  

    The fact that we don't have a single long in the STP should tell you something but ALWAYS keep in mind that the STP is 1/5th the size of the ALL BULLISH LTP with $45,000 of margin allocated vs the $140K in the LTP.  That's what I'm trying to teach this year – Balance, portions, PATIENCE!!!  

    Feed free to ask questions and I'm happy to work on this stuff in detail as it's going to help everyone learn the more stuff we go over.  

    Flipboard/Brill – Yes, it looks much nicer on a Pad than it does on the PC.  Matt is working on a big project to replicate that kind of functionality for our web-site (and others) – so this magazine is practice for a much broader concept.  One of our little Build a Berkshire Ideas….

    TSLA/Palotay – Yes thanks.  I hope someone is putting stuff like that in the Wiki.  

    SCO/Pstas – SCO is more fun, I like the artificial buy/write on that one, March $31 puts are 4% below so 2% on oil and that's back near $100 so the bet is SCO stays under $100 and you collect $1.20 and then you can buy the $31/34 bull call spread for $1.30 and that's net 0.10 on the $3 spread that's currently $1.33 in the money (up 123% to start with oil at $97.50).  

    Keep in mind with these plays that we salvage the long call if it drops 50% (now $2.50) and roll it to a longer month or just kill it and roll the short put, looking for that to expire worthless (like we're doing with TZA in the STP).  

  7. Oil is at $97.30 – must be almost 9 o'clock….

  8. Oil Lines

    R3 – 99.46
    R2 – 98.65
    R1 – 98.08
    PP – 97.27
    S1 – 96.70
    S2 – 95.89
    S3 – 95.32

    Yesterday's high and low – 97.84 / 96.46

  9. These guys have the answers to their own problem but refuse to implement them:

    Wage stagnation and unemployment are huge challenges for companies that make consumer products—which, eventually, includes just about every company in the world. So why aren't these CEOs clamoring for economic policies that might actually address this?

  10. These stories keep on popping up and one day they will all come true and it won't be pretty:

    What makes China unlike Western economies is that the government, not the market, determines the interest rates—in other words, the cost of money—on both deposits and loans. By setting them both artificially low, the government shifts wealth from savers to borrowers.

    The more money pumping into the system, the more borrowers benefit. And pump it does: controlling the value of China’s currency versus the dollar forces China’s central bank to spew enormous sums of money into its financial system.

    As for China’s hapless savers, the closed capital account leaves them unable to invest in much else, so despite lousy rates, they keep stashing their cash in banks.

    This unfair distribution is why the money supply can surge without juicing consumer inflation. To achieve a similar effect, a market-based system would have to do something like this, argues Pettis:

    Imagine if somehow the US were to enact a law whose result was that every time the Fed expanded the money supply, a one-off tax was imposed on households, the proceeds of which were transferred to corporate borrowers. In that case monetary expansion would be much less likely to cause an increase in demand for consumer products, and so would create much less consumer price inflation, and much more likely to cause a surge in production.

    So what about monetary policy—has it, as Yglesias argues, been getting tighter?

    The answer is that it has for some but not at all for others. Thanks to China’s two-tiered system, monetary policy that’s looser for producers is simultaneously tighter for consumers.

    This two-track system amplifies changes in money supply. When money creation eases, growth tends to tank, as it did in 2012. That’s a big reason why maintaining 6-8% GDP growth while “rebalancing” China’s economy—shifting away from investment and toward consumption-led growth—is so tricky.

    It’s also why China’s debt makes interest-rate liberalization so fraught. Chinese businesses are already spending an eye-popping 39% of China’s GDP paying interest. Shifting money back toward consumers leaves less to go toward those payments. And that means lots of companies would go belly-up.

  11. CEOs/StJ – I have tried explaining, in the past, to several major corporations why they should lobby FOR higher wages.  Even for a company with as much interest in cheap wages as MCD, the logic is that raising the wages for 100M of their CUSTOMERS offsets the damage that will be done by raising the wages for their staff by 10% (adding 2.5% to cost of food).  It's not complicated logic but the Conservative brain-washing is very thorough and they are all terrified of rising wages.  

    Dollar 80.535 but oil $97.30, can't get $97.50 to short and $97.25 too choppy (good for scalping between $97.30 and $97.20 if you are quick, though).   I'm still favoring short at $97.25 but you have to want to DD at $97.50 and then half out at $97.375 (your average) or all out at $97.55 ($300 loss) as it's way too choppy for a tight stop – which is why we don't usually play .25 lines!  

  12. phil,

    tks for your thoughts…if i read it correctly….sell the 10 x jan5 140's PUTS and buy 10 jan 6 ..180-250 bcs.

    if tsla goes above and holds 190…sell the jan5 140 calls and buy 10 more bcs……….

    roll the 8 sht feb 150s calls to 12 mar 170 … now or wait until the 3 prem goes to 1 or that correct..

    would you answer a question re put selling as i know you have a reason and i would like to understand as you always look ahead……

    on selling the 10x jan5 140 puts for about 18$ ..what is the difference of selling 20x of the jan 5 115s for 9/change and having the same amt of money or so but reducing the downside to 105 vs 120…hope the question makes sense and if AH is better thats fine………….and tks…….

  13. Good Morning!

  14. palotay, mrmocha,

    tks for your thoughts re your approach to tsla……always good to hear what others are doing as i am not prone to being on the computer full time to handle the moves like futures…….

    mrm if would be interesting to hear your thoughts as to that year you went thru also as i seemed to have taken your place in that vortex ;) along with some others……………….tks

  15. Good morning. On the road can’t do much but good time to catch up on reading all posts

  16. Miss not playing oil —oh well

  17. Another good day for miners…

  18. Phil:  So what's a trade related to the prospect of the minimum wage being increased?  Not optimism on my part, just vibrations from the zeitgeist — it will happen.  Hell, if Thailand can do it, I expect the U.S. can, and will — 13 states have raised their minimum wage this year, but not high enough to get over the poverty line. But the U.S. is still a one-person-one-vote country, and you really cannot fool all of the people all the time — just most of the time, and time is running out on this one, I'd wager.

  19. Anyone for sushi?  ALL Bluefin Tuna Caught In California Are Radioactive - It's a silly scare piece as the amounts they are finding are less than you get from a digital watch on your wrist but it's keeping tuna prices low as people are scared off.  

    TSLA?/Mill – I'm so confused!  We went over this yesterday and I even drew out the position for you but still you refuse to format anything.  Yes to selling the puts you should have sold from our older discussion.  Yes to the roll because you chewed up all the premium from the short callers so what's the point to keeping them when you can roll them to something with more premium at a higher strike?  As to the puts, selling 20 x $115 puts for $9 obligates you to own 2,000 shares of TSLA for net $106 = $212,000 while selling 10 of the $140 puts for $18 obligates you to own 1,000 share of TSLA for net $122 = $122,000 so your plan costs $90,000 more than mine to raise the same amount of money.  

    10 $140 puts at $18 can ALWAYS be rolled to 20 $115 puts at $9 and, if you UNDERSTAND how the options work, you will know that, as TSLA goes lower, the premium on the short $140s gets chewed up and the premium on the $115 puts increases – so the availability of the roll lasts a long time.  Which puts are $36 (double the $140s)?  That would be the $175 puts – that's $35 above the $140s, MORE than the $25 spread between the $115s and the $140s so we can assume your  roll gets BETTER if TSLA goes lower.  

    The same logic applies to rolling to 2016.  As the premium in the short $140 puts wears down on a TSLA drop, the premium on lower 2016 puts goes higher.  So, at he moment, your short 2015 $140 puts are $18 and the short 2016 $110 puts are the same.   If you want to roll to 20 of something, the 2016 $80 puts are $9 and that's a price at which I actually WOULD want to be long on TSLA but, for now, why not protect yourself by selling puts that will actually lose money if TLSA goes higher (delta of .24 on the 2015 $140 puts) rather than the $115 puts with a delta of just .14 (so 40% less upside coverage)?  

    And, finally, if you are not able to watch these positions – DON'T PLAY MOMO STOCKS!  There's a reason they are called MoMos, they can go up and down 10% in a "normal" day and 20% is not unheard of – that's more like a futures trade than a stock trade and it's not for casual trading.  

    Hola Savi!   There was a nice dip in gasoline to $2.64 (/RB) but already back to $2.66.  

    Nat gas (/NG) rejected at $5 again, back to $4.91 – very scary to play when it moves this much but I do like playing the reject at $5.  Oil $97.40 with the Dollar at 80.48 but I think it's back to an effort to jack up the open as the selling is resuming.  UNG WEEKLY
















    Still overbought on the longer-term NYSI – need a much bigger sell-off than this to get prices to be realistic

  20. Ah Phil—do not rub it in—/RB and /NG I was patiently waiting for those plays. :-( maybe next week

  21. There – $97.15 and done on oil (+$100).  Now we wait for $97.25 to be re-tested or a failure at $97 or a test of $97.50 if they go over $97.25…  Once the market opens, you have to be super-conservative on /CL

    Minimum Wage/ZZ – It's XRT!  We already shorted them and look at the chart above – we nailed it!  If they fail support at $80, it's a long way down to $75 or maybe $70.  Watch XLY to confirm as they are close to breakdown too but, unless XLY fails $64.50, I wouldn't chase XRT:


    If minimum wage is increased, then I'll be loving MCD and other low-end fast food and WMT and TGT – whoever sells to low-end consumers because the 10% bump in wages (ish) would be a 100% bump in their discretionary spending ability but it wouldn't take them out of the same class of retail they currently spend at. Wages MUST go up – I've been saying it for 5 years – I just can't believe how hard it's been to gain traction on this issue.  

  22. ARIA!!

  23. It's on fire!! :)

  24. /DX up means no short on /CL

  25. Sorry had that backwards, /DX down, no short /CL

  26. Isn't that a Boss song?

  27. FU NFLX!!!!


  28. vix at 15.26 quick take a picture or buy a put maybe:)

  29. /NG/Savi – Where were you when I called a long on them at $4.15?  I had charts and graphs and everything to support my premise!  Not that I would have stuck it out to $5 but, at $100 per penny per contact, that was a $8,500 call…

    Wheeee!  More downside action.  Dollar 80.49 but RUT 1,155 and Dow testing 16,000 (/YM, not the index).   NYSE 10,150 on the button – 5% Rule rules!  

    Dollar/Jfaw- No, dollar up means weaker oil but you want to see the Dollar over 80.50 – what matters is where it is relative to the open each day as we can assume oil's open priced in the change in the Dollar overnight.  Anyway, it's a great day to scalp nickels and dimes on the oil contract (/CL) between $97.25 now and $97.15 and that range is getting lower as we go along.   On the whole, still a good short  but Fridays are very dangerous times to short oil and we usually prefer to go long gasoline (/RB) from Thurs-Friday.   The only reason I'm liking oil short is because the pump job up from $94.50 was utter BS in the first place and that's likely to unwind over the next couple of weeks. 

    And now you've got it!  

    NFLX/Jabob – Very artificially flat.  There's exactly one seller for every buyer – funds are tightly controlling it as they hand off their shares to the bag-holders who have been suckered in this week.  

    VIX/Sage – No good run has gone unpunished in ages with them.  

  30. Howard Schultz of SBUX just had a good interview on CNBC about internet & social media direction and impact on retailers. You can watch on CNBC web. 

  31. I had that /CL short, got shook out for a real small loss and then WEEEEEE without me!

  32. What I find helpful is to over the /DX on the /CL chart.  TOS, Studies, add study, compare with, enter /DX in the box.

  33. Tesla Motors Inc (NASDAQ:TSLAannounced the price of its Model S sedan in China yesterday. To everyone’s surprise, the electric vehicle maker as priced its sedan at 734,000 yuan or $121,000 in Beijing. Its about $40,000 higher than the U.S. price of the Model S at $81,070 because of unavoidable charges like import duties, taxes and transportation charges. But Tesla Motors’ price is much lower than what industry experts were expecting.



  34. Phil, CL shorting 97 line?

  35. Tesla goes on sale in the UK this spring and has received pretty favourable write-ups by the motoring press.  £50000 for cheapest model I think

  36. palotay/nflx,  thanks for the protection strategy in yesterdays chat.  I thought phil was up early, will certainly look into it.  one question, which naked callers were you protecting with the bcs?  thanks

  37. phil,

    tks for being a "mensch"……even in your inimitable a.. kicking mode i work towards my hours….and in the future will list all my positions ;) ……

    two other things…… intuitively i know that the 140 is better than the 20 115 ….but i cant speak for anyone else….it just clarifies and makes more sense when you explain it……… thanks…hopefully some other folks learned something also…

    im not playing momos…….ive stopped playing a long time ago…just exited nflx totally w./ smaller loss tks to you and now trying to extricate myself from elon……….

    so tks and maybe as mrmocha said i will like him be able to look back on this positively with your help after reality sets in…………………..and have a good weekend…….

  38. Wheeee!  And there goes $97!  

    Shake-out/Jfaw – That's what I was saying above, you have to be willing to take the wider spread.  TO ALL ON FUTURES:  Keep in mind that the oil futures are HIGHLY manipulated.  When you take a position, the first thing "THEY" will try to do is stop you out of it.  90% of the orders you see are fake and they are, in fact, just sitting there trying to beat you out of a dime – you and 100,000 other people that let them make millions of dollars per hour.  That's why we generally only play strong .50 support and resistance lines and we try to go WITH the momentum in our direction – almost never against.  

    If you do want to take a chance away from the .50s, then you need to use a scaling in strategy, like I showed you in Tuesday's Webcast and those are much riskier.  Always keep in mind that you are only scaling in with the goal of getting back to that initial contract at a higher strike.   You NEVER want to carry a big block of futures contracts unless you are really ready, willing AND able to stick out a massive loss for the long haul.  

    Dollar 80.595 now, oil $96.93 – generally oil is holding up strong against the rising Dollar so far but it's the tend we're most concerned with.  

    TSLA/Newt – 50% mark-up is less than expected?  That's interesting.   CHINA!!! is still the magic word and it worked for TSLA this week – great entry opportunity for new shorts…

    $97/Brit – But of course!  Our premise du jour is that Japan stepped in to prop up the Dollar at 80.20 and probably want us over 80.50 and oil, of course, shouldn't have been back to $97.50 so between there and $96.50, we are generally comfortable shorting at any cross.   By the way, whenever I see your name, this song goes through my head

    Brent, by the way, has been falling steadily for the last two days, from $110 to $107 now (BNO is the ETF) – that's another good reason not to believe oil should be higher:

    16,000 hangin on on /YM, 1,150 being tested on /TF – nasty business if it fails.   

    You're welcome, Mill.  You know I need to vent sometimes…  I'm sure it's a great lesson for others – another reason I don't really mind going over things like that.  cheeky

  39. jfawcett

    Thanks for the overlay idea on TOS.  You are the TOS guru!

  40. The bots came in on the dips in YM.  but tick struggling to get over 0

  41. phil, your thoughts on XOM.  I have 30 March $95 puts, which have now made back $2500 out of a $10K loss.

  42. Ow!  There goes 1,150 on the RUT – horrors if they can't get that back!  





  44. I'm trying not to kick myself for getting out of some TNA weekly puts early. I had 200 at an average price of $0.20!

  45. FROM THE FT:

     Here at Davos, I’ve just had the opportunity to moderate a discussion between the Japanese prime minister, Shinzo Abe, and a group of international journalists. I asked Mr Abe whether a war between China and Japan was “conceivable”.Interestingly, he did not take the chance to say that any such conflict was out of the question. In fact, Mr Abe explicitly compared the tensions between China and Japan now to the rivalry between Britain and Germany in the years before the first world war, remarking that it was a “similar situation”.

  46.  i would think we are about to bottom at least for morning right near here…rally for a few hours then weaken into close

  47. Scary angel….

  48. dcraig

    This is likely the low for today but IWM 114.17 is one bounce.

  49. Phil: I hear you on China— how many Porsche 911's at $130k a pop sell there?  I have traded my brass in for glass. No more shorts on this Co.

  50. dcraig

    Got out on the second bounce, The RUT has drawn a line.

  51. TSLA / Phil – Luxury cars sell at a huge premium in China. 

    Now we know what you might be thinking: that's significantly more than the $69,900 Tesla buyers pay in the United States. And you're right. But you have to take into account several factors. For one, the US price includes a $7,500 federal tax credit. For another, Tesla is including the 85 kWh battery pack as standard in China – an option that would already tack on an extra ten grand Stateside. There's shipping costs to take into account (about $3,600 worth, Tesla figures). And last but not least, there's the considerable taxes the Chinese government rakes in on imported cars: $36,700 of it, to be precise.

    But cheaper than other brands:

    For example, a BMW 650i sedan that goes for US$91,000 in Germany can sell for RMB2 million (US$326,000) in China.

    Nice markup!

  52. Phil / hedge – if S&P can't hold 1800, what hedge do you recommend in case we get a 10-20% correction?  Thx. 

  53. Thanks Shadow… doesn't help me now. I got out with only 10 cents profit. I took profit on some Feb TNA puts as well. Trying not to be greedy here.


    I'm working on a setup to trade TF futures through OEC. I've been experimenting with volume based bars and I'm liking what I see. I plot the supply/demand nodes based on historical 10K contract bars, then trade off of 300 contract bars, with a 600 contract bar chart visible as well. 15K contract bar nodes on the ES are also helpful as well. Of course, it's nice to look at the DAX, 10 year, and DX as well. Information overload!

  54. You are welcome JR….

  55. dcraig Now 3rd bounce hope it isn't a breakdown. I only had a few contracts but made $.50 on them. Doubting this is the long awaited correction. I still have USO puts that may be best to hold.

  56. ~~Concurrent Computer (CCUR)

    ConcurrentComputer185 5 Tech Stocks With Electric Dividend YieldsCCUR Dividend Yield: 6%

    Ever wonder who tackles the massive job of sending hundreds of different television programming choices to millions of different cable subscribers?

    For that matter, have you ever wondered how video-on-demand works?

    Contrary to popular belief, it’s not your cable company directing all the digital traffic involved in providing a cable television service. It’s Concurrent Computer (CCUR), and clearly the company fills a need that’s not going away anytime soon.

    That perpetual demand isn’t the only reason an investor might want to own shares of CCUR stock, however. No, the reason income investors should be interested in Concurrent Computer is its dividend yield of 6%. Again, though, note the low volume at just 50,000 shares traded daily

    The curtsey of Investors Place comments

  57. another bot save on YM

  58. XOM/Lunar – Well, we never thought they should have gone back to $100 in the first place.   Think of how much better off you would have been if you had only shorted $5K and doubled down at $2.5K and again at $1.5K – then you'd be in for 4x $9K at an average of $2,250 and you'd be taking 3/4 off the table now with a profit and then you could let the 1x ride without worrying and a MUCH lower basis, kind of like this:

    STP Review:

    • XOM – They just tested $100, but it held.  We need a pretty spectacular failure in oil for this one to work out at this point but I do want to press our $6K loss into earnings (1/30 – a busy day) by picking up 30 March $95 puts for $1.  

    See how nice it is to scale in?  Those puts are now $2.25 for a $3,750 recovery   Of course, that's water under the bridge and we know we don't think oil should be this high but VLO's good outlook makes us worry that XOMs refining margins will also be great in the US.  Fortunately, XOM is very, very big and very, very global so VLOs benefit (cheap oil) won't help XOM on the sales side.  Still, I'm less confident in the short than I was and I'd keep a tight stop here ($97.72) in case they pop $96 and I'd keep lowering that stop by .50 every time they go .50 lower.  

    One HUGE mistake people make when they get behind is trying to make a profit.  When you are behind – just be THRILLED to get out even.   You were wrong on the trade – why stay in it when you have a chance to exit?  You don't even have to get even.  In the example above, we lost $6K on XOM and now we got $3,750 back.  That's GREAT.  It was a bad trade and we're now lucky we only lost $2,250 and we can just walk away and find something more obvious to trade since, clearly, we didn't understand the dynamics of XOM correctly.  

    You are always a ray of sunshine, Angel!  wink

    Kicking/DrC – No point, just a lesson learned so, next time you see a similar set-up, you'll be faster on the trigger.  

    Abe/Angel – He's nuts!  China could commandeer all those super-tankers that come and go every day and land 100M soldiers in Northern Japan  by the weekend.    It's 400 miles from China to Japan (closer at some points) and Japan's entire army is 250,000 people, about 0.02% of China's population.   

    Cars/StJ – Hey, that's capitalism – charge as much as the suckers will pay.  

    Hedge/Terra – Why didn't you ask me yesterday when TZA was my favorite?   In the STP, we had 20 short Feb $16 puts at .55, and they were.60 yesterday but .35 now.    I guess you can sell the March $16 puts for .75 and use that to buy the $17/21 bull call spread for 0.93 and then you're in the $4 spread for net 0.18 with 2,100% upside potential and TZA is already at $17.36 and $21 is up 23% or about an 11% drop on the S&P.  Of course you could also use any short put on something you really want to buy if it gets cheaper, like CLF 2016 $18 puts at $4.20, which pays for 4.5 of the spreads each.  


    CCUR/Yodi – Thanks. 

    1,144 on /TF – castastophe!  1,799 on /ES just as bad.  We're passing those -2.5% lines – this could be the big one….

  59. Big one / Phil – Stop teasing us….

  60. CZR plays coming in very nicely

    DDD has dropped 0ver 7$ could be an interesting play

  61. VIX 16.40!   We topped out at 16.75 Dec 17th (Tuesday) but then a super-sharp reversal that Wednesday (big green bar):

    CZR/Yodi – You'll see, my WYNN short will work too.  

  62. From Pretzel….and Springheel Jack has a similar target.

  63. TWTR has been stuck at 62 for ten days so I just bot next week's 63/62/61 put fly for a mere .10 on the chance it pins another week. Note that next week begins the run-up to earnings, however, so anything goes.

  64. 100M Chinese soldiers / Phil – They would have to train them fast. They have only 1.7M soldiers in their ground forces now!

  65. Hi Phil … I know it is a rough day … CLF down nicely at $19.55 .. I have been waiting on this PATIENCE  and can now do the 2016 13/18 Call spread and $15 puts instead of 13/20 and 18 put … presume ok to start scaling in for long term play basis .. :)

  66. For those who are following the CAT back ratio play the stock has dropped over 2$ today and we looking fine in the Feb play. We will wait till after declaration on Monday before possible setting up a new March play. No sense in doing something today as you never now where the wind will come from 

  67. CLF / Dmulligan – Falling knife… They are below $20 now which looked like support but my next line is at $18 at this moment. I like them too, but I am in no rush to step in at this time.

  68. Phil I am not running down your WYNN play as I have a good bunch of positions there as well, have to pay for my overseas trip up today on WYNN 1,100.00 for the day!!! But as we all know it is only on paper until closed.

  69. In my small mind, the biotechs are holding their ground quite well, so this is not all out panic selling, just a breather on a TA channel line that needs to be met.  If 1750 breaks, then things will change.

  70. CLF Stj is walking in his soft moccasins

  71. Even the gold miners have joined in the selling…after that initial thrust up.

  72. yodi

    Pay per view is steady income, dividend, but growth would take wage hikes and first the cell phones need to come back.

  73. pharm

    That is the way it usually goes and a good bounce back to resistance would be prime for a real correction.

    Check what happened a week ago Monday Tuesday, we haven't hit that either. VIX getting more real!

  74. Moccasins / Yodi – You mean snow boots!

  75. shadowfax  pay per view you got me there is it PAY Vodafone ??? or what

  76. Give them time and they'll find a solution to our problems:

    Power harvested from the Sun and wind is pouring into electricity grids by the gigawatt. That makes it ever more important to find an efficient and convenient way to store renewable energy for those times when the breeze dies or the skies cloud over.

    “Now we have a good chance of solving that problem,” says Michael Aziz, a materials scientist at Harvard University in Cambridge, Massachusetts. His solution is a flow battery that packs a high energy density with no need for the expensive metals found in other models.

    Flow batteries work by pumping different chemical broths over two electrodes separated by a membrane. The chemicals exchange protons across the membrane and shuttle electrons around the circuit that connects the electrodes, which discharges the battery. Reversing the reaction recharges the cell (see diagram at the bottom).

    The big advantage of flow batteries is that the chemicals can be stored in tanks outside the battery assembly. Increasing capacity is simply a matter of building larger tanks, making flow batteries particularly suitable for large-scale energy storage.

  77. Stj Still enjoying 85 degrees until end of next week 8)

  78. yodi

    I built houses and guess who paid to view? Those overpaid slackers, Dodd/Frank put the construction business on hold 2 weeks ago, that is why the surge the last 2 months. Truth in lending law will disqualify 3/4 of buyers now. The rich just can't sustain what the masses have in the past.

  79. Now gold is starting to sell off. 

  80. CLF / StJ / Yodi … looks like I am going in alone on this one … Done 13/18 call spread and $15 puts 2016 for 19c credit .. will take another bite if it gets down to $18 Stj :)

  81. ~~DMulligan

    CLF there is always a good time to get in I am in already I have not even looked at the position today as it is a play for 2016 so if I sit around looking at this one every day I would not have time to do some trading.

  82. Look at LULU holding up very well today

  83. Same with TGT

  84. Flow batteries have the same problem as any other, stores DC. DC is only good for short distances unless converted to AC where the voltage can be stepped up for long transmission by transformers. DC to AC conversion is very inefficient producing high heat so it can be done in a single structure, better yet convert the house to DC everything and forget transmission to others via the grid. FLYWHEELS!

  85. Had an SLV 19.50 fly that looked perfect two hours ago and is now in shambles; Fridays sure got exciting when weekly options came along!

  86. CLF … Time and Sales shows big block selling, not mom and pop.

  87. /CL looks like 96.60 holding.  Pump into the /CL close starting?

  88. Nat gas back at $5 on more cold forecast.  That got oil off our $96.50 target but it was a good run – hard to get motivated to play now.  

    VIX just leaped to 16.85!  Isn't it funny how sentiment changes so quickly?   That's why I'd rather sit out the rally with cash than try to play when the market is so toppy – it's all a load of crap – completely fake valuations.  Even GOOG is down 2.5% on the day.  

    TWTR/MrM – How have those things been working?  I would think if you took exits at +20% or so, you'd be more consistent as that probably happens a lot vs a winning expiration.  

    Soldiers/StJ – Don't forget, China has 100M more men than women, and mostly young ones.  Give any 100M young, horny guys a gun or knife and rev them up with some war talk and drop them off in a foreign country with orders to kill and rape and pillage and you'll usually get the results you need.  

    What do we pay Chinese workers?  Maybe $4 a day on average.  Give them $5 a day and your war costs just $500M a day and there's no way Japan could take even a month of that so $15Bn and it's all over.  You actually have to credit China for having the restraint NOT to just go take whatever they want in Asia.  

    CLF/DM – When the whole market is falling, it's to be expected.  Sure, I love the lower strike enty.  

    By the way, now the STP is up 2.5% ($2,500) and the LTP is up 0.7% ($3,500) so the combo is still going up in the falling market!  

    That means we do need to do some buying once we find a bottom or we're a bit too bearish and that, by the way, is how we can tell – by observing them when we get big moves one way or the other.  

    TOS, by the way, let's you allocate different cash piles to different portfolios, which you can then flip between with a pull-down.  It's very useful for managing this kind of strategy (and also keeps you from having too many positions in front of you).

    WYNN/Yodi – Very true, still early innings.  

    Flow batteries/StJ – I like those but, for home storage, I like flywheels better.  You just keep spinning them faster when you don't need them and tap the energy when you do.  They are fantastic solutions if you don't need to move them around.  

    Superbowl/1020 – Wow, that would be really messed up.  I knew when they announced it I wouldn't want to be in Giants stadium at night in early Feb.  Moving the day would cause an airport nightmare for the rest of the week. 

    /ES can be played bull off 1,800, Dow (/YM) 16,000 confirms and can be played as well.  

  89. Phil/TOS – How do you allocate different cash piles to different portfolios in TOS?  I can't believe I didn't know you could do this.

  90. Oil/Jfaw – I like a bull play off $96.50 but with super-tight stops.  It's just a play on the likely manipulation – no fundamentals support oil at $96.50 right now.  

    Also guys, of course we expect a weak bounce back to S&P 1,816 – anything less than that will not be impressive at all.  RUT touched 1,140 from 1,170 (ignoring ridiculous head-fake to 1,180) so -30 means weak bounce is 1,146 and strong is 1,152 now.  NYSE needs to retake 10,150 for any of this to look good.  

    Overall, I'm not into buying anything right now.  Weekend reading could take us down another 2.5% by Tuesday.  

    TOS/Palotay – Just call them and tell them you want to set up more sub accounts under the main.  

  91. Sorry, that's 1,808 (weak) and then 1,816 (strong) on the S&P (20% and 40% retrace of drop from 1,840 to 1,800).  

    Also, if the retrace to strong doesn't come faster than the drop – then there's less chance it will stick and the drop was from yesterday's close to noon today so if they don't make a strong bounce by the close – likely we head lower next week.  

  92. In-between – Also at Davos, the president of the country caught between Japan and China made some interesting comments -

    " After delivering her speech, President Park held discussions with the executive chairman of the World Economic Forum, Klaus Schwab. When asked about unification on the Korean Peninsula, she introduced her blue print for unification which envisions a bright future and her vision for what a unified peninsula would look like.

    She said that unification would offer great opportunities to not only the Korean Peninsula but also to neighboring countries. It would also solve the pain of the North Korean people who suffer under the dictatorship. She emphasized that the world needs to create an environment based on security deterrence that can lead to unification.

    As Schwab asked the president about economic assistance during the process of unification, President Park answered that unification would bring a bonanza to not only Korea but also to all of Northeast Asia as it could provide a new growth engine in the region.

    Once the Koreas are united, she said, investments will be made in large-scale social infrastructure-building projects in North Korea. This would revitalize the three northeast provinces of China and the maritime provinces of Siberia in Russia. Neighboring countries could then expect even further growth, she said.

    The president added that a unified Korean Peninsula would become an attractive investment destination and could lead to further related investments in China and Russia, rather than create an economic burden. “From a humanitarian perspective, unification would be able to solve the great pains of the North Korean people, who suffer poverty and human rights violations,” said President Park. The president also pointed out that unification should take place on the firm ground of security deterrence. She concluded by saying that Korea has been striving to create an environment on the Korean Peninsula that is optimal for peaceful unification." 

  93. Oops, sorry, editor acting odd.

  94. BA losing some feathers down 4$

  95. I know some people do not think to much about BIDU but I have been doing very well with them and scaling in today by buying the Jan16 150/170 BCS @ 8.55 and selling Jan16 110 putter for 11.60 BIDU had a good fall the other day and is not much participating on today 200 drop

  96. SHLD now green on the massive SPX sell off.

  97. ED is up on a down day.  XLU looking to cross 200ma.  

  98. Korea/Snow – I think, when you are trying to unify a country, you should avoid criticizing your potential partner for their human rights violations and the crappy conditions of their people.  What she should do, is what Kohl did with East Germany in 1990.  First he announced massive programs to cooperate economically and improve ties to EG and there was no pressure, no timetable.  When EG had a near economic collapse a year later (because Russia stopped supporting them), WG jumped in and gave them massive no-strings aid and that got the EG people behind the movement.  You can't have any kind of merger when your President, or your people, think you are better than the South Koreans.  If you want them, you need to want them as equal partners and you need to act that way from day one or it will never work.

    Lots of tasty-looking opportunities going by on the screen but we have to let them go – bigger opportunities may lie ahead…

    Cash is good!  

  99. I am not sure but today is a day to close the TZA Feb 16/16 straddle

  100. /CL – 96.25 to the penny and to the stratosphere!

  101. Korea/Phil….wow! I see your point, but,wow, that's a tough row to hoe- NK is not EG.

  102. Where is that elusive bounce ?

  103. Oil  96.28  at 12:20 and  96.95 at 12:47…………….manipulation?

  104. TZA/Yodi – Sure, I'd take that and run.  Can always switch to the TZA spread above.  

    /CL/Jfaw – Always the obligatory head-fake before the real move.  

    Korea/Snow – And as long as you guys feel that way, then you have no chance of making it work.  


  105. Phil – I don't think I would consider a guy (President of N. Korea) a potential partner after condemning his uncle and 5 aids to death by having 120 starved dogs eat them alive while he watched for an hour… hopefully neither would China.

  106. Partner/Chas – Well then you are proposing war, not "re-unification" – you want to forcefully remove the current leader and take over his country so you can "run it properly".   How often in human history has that worked out?   I'm not saying Jr Kim is a great guy – just let's not pretend to be saying one thing when we're saying another.  Also, do you seriously believe the guy fed his uncle to starving dogs?  That was a joke started in a humor blog that Conservative talking heads have been spinning as the truth long after it was known to be BS.  If anyone needs to be overthrown, it's the right-wing media that treats their audience with such contempt.  

  107. Wow, tagged $97.25 on oil for yet another short entry and down we go again!  

  108. I can't believe Cramer has the nerve to show his face on TV after pumping everything that wasn't nailed down this month….

  109. what was your cost basis for the Feb14 $14 VIX === I'm still way down 

  110. China / Phil – In any case, it would not make that much sense for them to invade Japan… They tried with Vietnam back in the 80's and that didn't work so well. Of course, the Vietnamese army has some experience by then. Invading Siberia on the other hand would make a lot more sense economically, giving them access to all the resources they need. That has been my prediction for a while and if I were Putin, I would not make more enemies because you don't know when you'll need friends with big sticks!

  111. ARIA is WoW. Trade of today.

  112. Pharm – loving ARIA so far, thx for that.  

    Phil – re: your natural gas bottom call, you didn't recap that while the 15/20 BCS is up a tad, the $17 puts we sold a mere two weeks ago are up more than 25%… stuff!

  113. Dichotomy – your points are very well taken, Phil, but there's no way President Park could take the country to war. I think what she's saying is that the inevitable NK collapse presents economic opportunity, and is perhaps saying that might be better than China annexing NK as a cheap labor camp. I do find it worrisome that she did not mention Japan.

    By the way, look at LQMT moving up on a down day.

  114. Russell and NYSE getting hit the worse today… NYSE through it's 50 DMA now. Could get ugly Monday in Europe and Asia!

  115. Think we test the RUT 50DMA @ 1137ish?


    Catching up on my Tweets:

    Macintosh at 30: Interesting, profound and curious things said about Apple's 'insanely great' computer

    On the 30th anniversary of the Apple Macintosh, read the original NYT review of the computer:


    Buy Forever Stamps Today: Prices Going Up This Much After Sunday –

    What's wrong with Davos –

    Despite rocky rollout, Obamacare's rapidly catching up to its target numbers via

    "A stagnant global economy is straining health-care budgets to the breaking point."

    Wall Street’s frightening new plan to become America’s landlord

    Syria peace talks open with negotiators in separate rooms |

    Cameron Defends Carney as BOE Prepares Forward Guidance Update via

    If instead of $20 billion in legal charges JPM had $40 billion, would that boost Dimon's 2013 comp from $20MM to $40MM

    Holder: No possibility of clemency for Snowden

    One Of The Top Senate Democrats Just Called Republicans' Bluff On The Debt Ceiling

    Why the Military Industrial Complex Needs Al-Qaeda, the Best Enemy Money Can Buy

    Despite The Hype, A Very Unfinished Recession For Most Americans


    Speaking of the ECB's "credible", "transparent" stress tests…

    .: ECB's Draghi: weak and uneven recovery is beginning

    Japan-China war of words goes ballistic in Davos – – The Telegraph

    Hildebrand: "European banks have raised €500 billion". Great – only €2..7 trillion more to go

    The VIX futures showing that backwardation is biggest since Oct & June S&P 500 selloffs & rallies

    Huckabee said women with 'out if control libido' see the federal government as 'Uncle Sugar'. Ok, 2014 is done. On to 2016.

    LOOK: Apple holds a HUGE amount of corporate America's cash

    NASA didn't expect a Mars rover to last for 10 years, and it just made a mysterious discovery

    Is Chinese data really to blame for the selloff?

    Super Bowl homes command $1,600 a night as listings jump:

    Here's a look at the bloodbath overseas this week: $$

    Smith & Wesson says it will stop selling some guns in California over a law requiring information on bullet casings |

    For Jeffrey Gundlach, the U.S. housing recovery isn’t so rosy | via

  117. Missed a few:

    Schumer Suggests ‘Electoral Reform’ As Way to ‘Lessen the Grip of the Tea Party’

    Nobody told me this thing could go DOWN also!?!?

    Hate to see how these retailers do after everyone gets their heating bills this month.


  118. Phil?rolling back


    Under what circumstances would you roll back or give away time, for example a Apr SPY put ITM rolling to MAR and taking profit along the way and keeping your short on with less time or would you always just set a trailing stop and get out of the position?

  119. GO SHLD :)

  120. it's incredible that the rest of the market is off 1 to 1.5% but NFLX is within 0.25%.

  121. VIX/Wombat – Sorry, I don't even remember Feb $14s.  

    Sense/StJ – I was only saying Abe was an idiot to start saber-rattling by using the example, not actually planning an invasion.  

    UNG/Stever – You mean this one? 

    UNG right on the 50 dma at $19.50 , down from $22 and Nat gas bouncing off the $4 line.  They really haven't gone below $14 and usually over $15 and you can sell the 2016 $17 puts for $2 and buy the Jan $15/20 bull call spread for $3 for net $1 on the $5 spread.  Not a bad way to play them.  


    That moved a lot faster than we thought!  

    Park/Snow – Of course not war but why talk about reunification while insulting the people you want to unify with?  Bad job on her part is all I was saying – unless she has another agenda. 

    LQMT/Snow – Very strong rumors that AAPL will announce something next week.  

    Ugly/StJ – 5% Rule says yes it will be…

    RUT/Sage – Futures already 1,139 (/TF). 

    Rolling/Sage – When you no longer think you'll hit your mark in the time-frame.  Not sure what you mean but if you OWN an LONG April SPY $185s, for example, now $7.47 and you were up maybe $2.50 and you wanted to lock in profits but still be short, I'd flip to the March $182/175 bear put spread at $2.50 and then you could put a stop at $1.25 and only risk 1/2 your money but still have $4.50 of upside (almost 200%) if SPY falls $5 more (2.7%).

    SHLD/Jfaw – Eddie does it every time! 

    NFLX/Lunar – I'm very sure they are managing that stock to roll the shares over to retail suckers who are buying in.   As I've said, I'm relentlessly short on them.  

  122. GILD taking a (small) step back.  Is there a recommended position to take?

  123. Miners – wtf? gold not tanked (same/higher than yesterday), dollar not really going anywhere, first they are up, then WHAM. huh?? most seem to be working to recover a bit now…

  124. FCX.. sell some puts? Aug $30s look nice.

  125. phil, is there an official short on nflx.  suggestions?  for a conservative one!

  126. Saber rattling / Phil – I don't know that Abe has much of a choice. The other option would be to roll over in front of China and that might not be a good precedent. Remember that map of China territorial claims:

    Someone has to put their foot down somewhere!

  127. Phil—-/NG—I missed that whole bit on nat gas—-where was I? Leaving Earth, on the moon — je ne sais pas— when do we go short on /NG-@5—-please ring loud bell when it is time :-) . Thx

  128. Pharm/spy~ Any thoughts on the SPY Mar 190 calls? Thanks!

  129. Phil – re: UNG, yes that one… we just let it ride or take the profits and move on?  Would usually stay more long term obviously but as is more a play tied to a commodity maybe the rules are a little different and we can come in and out similar to the oil plays but with options for those of us with day gigs getting in the way?

  130. savi /NG

    Watch the weather, that huge high pressure ridge over pacific states will eventually move east, and when it does it will be warm in happy kitty land, the scared to death east.

  131. Phil/WYNN  Your short earnings play (short 5 Mar 210C, long 3 Mar 210/240 BCS) is doing nicely already.  Now that all options are OTM, does it make sense to hold on or will the losses on the BCS start to offset the short call with two months to go?  Thanks.

  132. WYNN  Sorry, that was a long Jan 15 210/240 BCS.

  133. SPY / Investwizard – I have the target FIB 50% retracement line at 178.  That is where my buy signal is.  As a matter of fact, it will not most likely make it there today but I do have a buy order for Mar 179 calls for that anticipated bounce.  Use theo price in TOS to see the anticipated entry is.  You never know.

  134. Have a great weekend… Off to Phoenix!

  135. Invest….waiting on the SPY calls for now. I have my puts as well….but they are Jan15 150 and 160 that are still under water.

  136. GILD…just wait for now. 

  137. Shadow. – Yep waiting for the hint of warmth in the air—

  138. shadowfax 

     TNA into close  ?

  139. Thanks, Pharm. I’ll hang on my calls. It’s hard to convince bulls would get killed so soon.

  140. Phil,

  141. Thanks, Jfawcett. Have a good trip!

  142. 2.15 Buy express running late.

  143. qcmike TNA yes if ever a buy signal, since a little before 2 selling volume has stepped back up.

  144. Phil/TF


    Would you take a poke at a long 1137 if it fails to break there ?

  145. SPY calls – they are out in March, 189s, so they can be rolled down and covers can be sold to make up the difference.  Right now, they are 40c or so, and I bought them for 1.27 ave (I DD'ed).  So, I am waiting and seeing where this settles and expecting the 1770 target to be met in the coming week or two.

  146. GILD/Taihu – PATIENCE!!  Let the market pull back.  

    Miners/Scott – Anticipating a pullback in gold and they are probably right as people panic to the Dollar next week. 

    FCX/Scott – PATIENCE!!  Let the market pull back.  

    NFLX/Lunar – Unfortunately, 2014 is our year to be conservative and teach proper trading strategies, so we don't have any room for a crazy-assed Momo in our portfolios.  BUT, yesterday my NFLX trade ideas were:

    Submitted on 2014/01/23 at 9:37 am

    The 2015 $420/380 bear put spread is $23.50 and you can sell the $500 calls for $23 for net .50 on the $40 short spread.  That would take less margin and give you a massive upside ($3,950 per contract) if NFLX fails to hold $380 for the year – that's what I would switch to rather than mess around rolling. 

    Submitted on 2014/01/23 at 9:49 am

    NFLX tomorrow $375 puts are $2.60 and you can buy 10 of those ($2,600) with a stop at $1,600 ($1.60) and you can take 1/2 off the table at $5.20 and get a free ride for the rest of the day if all goes well.  Let's do 2 in the $25KP.

    Submitted on 2014/01/23 at 10:26 am

    NFLX next weekly $370 puts are $2.50 now so I like those but, of course, it's a gamble.

    The first one is still doable, the 2nd one stopped out and the 3rd one is about the same price but this is a crazy-assed stock I would not consider for anything other than a gambling portfolio with more than the $200 we risked in the $25KP (not even 1%). 

    China/StJ – Well, not too clear on that map but China's claim is pretty strong, actually:

    Japan "annexed" those islands in 1895, after declaring them uninhabited.  They were placed under US administrative control in 1951, just two years after the Communists came to power so their paperwork may have been missing at the time and they "failed to object."   When we gave Okinawa back to Japan in 1972, the Islands went with it.  So that's Japan's claim while China's goes back to the Ming Dynasty (1300s).

    UNG/Steve – It's a 400% upside play that's "on track", no reason to get out, not with 2 years to go.  If you want to gamble on the ups and downs, consider that it's 100% in the money so you can sell a few UNG March $25 calls (maybe 1/3) for $2.05 to pay yourself a nice dividend.  Stop 1/2 out at $3 and then you can do a 2x roll if you have to and you'd still have .55 net from the ones you have left.  

    WYNN/STP, Jet – About time too.  That one was: Submitted on 2014/01/15 at 12:33 pm with a whole page's worth of charts and graphs explaining my logic and the trade was:

    WYNN is $4Bn in debt and makes about $650M on a $20Bn valuation (30 p/e) and are expected to make $7.09 per share this year, up from $5.36 last year (up 32%) BUT next year only $7.56 is expected (up 6.6%) and last year they were around $100 – very hard to justify a 100% increase in market cap when earnings, even if they go well, are only likely to be up 46% for Q4.  Before this Q (and this will be the last one, they had easy comps, next year, not so much and it's likely to come up in the CC.  

    Earnings are at the end of Jan and we can sell 5 March $210 calls for $8.20 ($4,100) against 3 Jan 2015 $210/240 bull call spreads at $10 ($3,000) for a net $1,100 credit.  If WYNN fails to clear $210 into March expiration, we keep the $1,100 PLUS whatever remaining value we have left in the long spread.  If WYNN goes over, we have $9,000 additional dollars of upside protection against the $210 calls so $10,100 of net protection/5 contracts = $20.20 per contract so, this trade does not lose money until/unless WYNN is over $230.20.

    Let's officially add that to the STP but we'll do 10 short March $210s and 6 of the bull call spreads.

    Currently, the spread is still $7.45 ($4,470) and the short calls are $4.35 ($4,300 for 10) and $15 out of the money so, if we close it now, we pay net $170 but, if we let the calls expire worthless, we pay nothing and keep whatever balance remains on the long spread.  Not only that, but maybe we get a chance to re-load and sell $8,000 worth of June calls.  Get it?  

    Have fun Jfaw!  

    TXN may be selling out!  That's a market booster.  I guess they didn't want to wait until Monday to announce a blockbuster M&A deal when it might help them paint the close.  

    /TF/Sage – Off 1,135, yes, not 1,137 – too in-between.  But, at this point, I'd rather keep cash in my pillow and have a nice nap this weekend, dreaming about the bargains we can hopefully pick up next week.  Imagine what will happen to the guys who have bad earnings on Monday and Tuesday….

  147. Vix 17.24!  Now those calls are looking good, right Wombat?

  148. Sounds good, Pharm. Please keep us updated of the spy adjustment just in case.

  149. LQMT – having a great day!

  150. EWJ puts getting close to even

  151. NFLX 5 min chart is hysterical.  Yet no arrests will be made…

  152. Pullback/Phil – surely THIS is our big pullback..the Big Dip. Yesterday CNBC was near hysterical with the 'market crash" and toay I just haven't seen, but down to lots of convenient resistance levels.. support is here, the dips and bots and fed will buy.. won't they?

  153. Pullback/Scott – I told people I thought we should get to cash at Thanksgiving because I expected a pullback based on a very serious amount of consideration of proper valuation and our early Retail Shopping Survey indications.  We did pull back to 1,770 in early Dec (50 dma) but it was a really brief spike and the recovery after that felt fake and nothing has fundamentally improved since.  

    Meanwhile, the Fed, the ECB, the BOJ and the PBOC could not possibly have been more accomodative and ALL we have managed to do is re-test the Thanksgiving highs.  Now we're back to our Thanksgiving levels but things are, if anything worse with China coming to a head (how long have I been pointing that out?) and Emerging Markets in turmoil.   

    So no, I don't think this very minor pullback off a 35% run in 2015 is anything close to enough to correct the overpricing that is rampant in the market at the moment – especially when alternative assets (bonds) are becomming safer (backstops) and are starting to pay more interest.  

  154. By the way, that chart does a good job of showing the ACCELERATING downward move the 5% Rule predicted on TUESDAY, which indicates we are at least on the way to a 5% correction off 1,850 (1,757) or, more likely, a 10% correction, back to 1,665 – we'll see next week  but a 2.5% drop on Monday means we're almost certain to be down 10% before we recover.  

    Not even getting the weak bounce so far.   Don't forget, failure to make a weak bounce and finishing down 1.25% indicates follow-through lower the next day.   What we then want to know is whether it is accelerating or decelerating (closer to 0.625% or 2.5%).  We are certainly primed for a 10% sell-off and -1.25%, -2.5%, -5% and then decelerating to -1.25% and 0.625% would be a perfect pullback.  

    From 16,500 on the main index, 10% down is 14,850 so 15,000ish is about as low as we expect to go – even if things get ugly.  The 200 dma is 15,400, which is 6.66% off 16,500 – the mark of the Blankfein!

    This is why I love the 5% Rule – we don't need no stinkin' pictures – it's just math!  

  155. When the dust settles,do u think we should pick up some F in the LTP/Income Portfolio?  Thanks.

  156. Next day down/Phil – ok.. so what is our fattest play (puts on index?) for putting on before close today?

  157. Warning, new options guy question based on your guidance above……has to be a few others like me out there asking the same questions……so I will take the plunge…..

    UNG/Steve – It's a 400% upside play that's "on track", no reason to get out, not with 2 years to go.  If you want to gamble on the ups and downs, consider that it's 100% in the money so you can sell a few UNG March $25 calls (maybe 1/3) for $2.05 to pay yourself a nice dividend.  Stop 1/2 out at $3 and then you can do a 2x roll if you have to and you'd still have .55 net from the ones you have left.  

    I get selling the calls for the dividend part, but everything in the sentence that starts with "Stop 1/2 out…." gets into the more advanced stuff that I need to learn and doesn't translate well for me….could you spell that out for me in more "new guy" speak?  :-)


  158. 18 I have vix 18 do I hear 19

  159. Remember FOMC Meeting Next Week.  That should bring added volatility to the market.

    2014 FOMC Meetings


  160. Virtual Short Strangle Portfolio,

    This is a dream day for selling premium, especially when we are saving up the margin:

    - Sell 5 SPX Feb 1650 puts for $5.3, Sell 5 SPX Feb 1870 calls for $1.825

    We are not predicting where the market will settle.  We just know that these strikes are roll-able.

  161. F/Rookie – That's a good one but I prefer to keep an open mind and we'll just see what there is that's attractive.  Patience.  

    Fattest/Scott – If you don't feel protected, then the TZA spread above is the best protection.  Aside from TXN, another mega-merger could be announced Monday and China could promise to bail out the Trust and Yellen could say something – I like CASH!!!!

    UNG/Steve – Let's say you have 12  of the UNG spreads and you decide to sell 4 short calls for $2.05.  That puts $820 in your pocket and, if the short calls go up to $3, you stop half out (ie 2 of the 4 short calls) and pay $600 back and you still have a $120 credit and the two short calls covered by 10 long positions.  Then, if they are still in the money near expiration, you can simply roll them to 2x of some other calls at a higher strike in a longer month but now we're 3 moves ahead and, if you have no experience, it's not going to make a lot of sense until you do it.  

    VIX 18 but 107.50 on TLT is the number to watch.  If you want to see the global economy collapse fast – TLT back to 125 ought to do it…

    Fed/Rookie – The fun never stops!  

  162. /NG    As I understand it the Mar contract is the last month using stored supplies for the winter months and April contract is the first month to start to re-fill supplies.  That is why you get the differences in Mar to April options.  Also selling Mar calls ahead of a late cold spell is known as "The Widow-maker Trade"  as many have blown up from this, google it.  So Mar prices can also drop violently on a warm spell.

  163. Expecting another round of tapering

    What better way to boost the T bills? Market uncertainty will bring people to the Treasuries and up the dollar which will then cause more market sell off and into more Treasuries.  In a way Fed is playing their cards very brilliantly (I suppose).

  164. Thanks super helpful re: UGN example…..other inflation/market-correction-defensive-related play you threw out that has jammed UP in less than a month is TITN 6/14 $15 puts, up 40%.  Excuse my enthusiasm but haven't had those types of gains in multiple plays in years let alone days doing it on my own…….maybe I should host the PSW infomercial!!!!  Cheers and have a great weekend all.

  165. Gonna close on the lows…..G'darnit….I have been waiting too too long for a day like today…. here here Teddy Bear!

  166. TZA – interesting the Feb $17/22 call spread is 1.01, the March is 1.05… .04 cents for a whole extra month! tells me not much expectation for any lower through that time…?

  167. TZA, oops, that was 17/21 spreads I was quoting

  168. Josh Brown:

    In case no one taught you this, here’s a trading maxim to remember for days like today and weeks like this one: 

    “They take the stairs up but the elevator down.”

    In general, stocks work their way higher way slower than they give it back…one of the most frustrating parts of being an investor.

    As of this writing, US Steel (X) is down 6 and change on the day, unwinding a 20 point gain it put on since the middle of December.  In other words, the stock lost 5 weeks worth of gains in 4 days

    Because China’s central bank told its bankers to chill out with the loans.

    Them’s the breaks.

  169. Just to add muck to decisions the RUT is off 2.5% today, S&P and NASDAQ same in couple days. All I have seen are sell signals but the market hasn't moved in hours. I would expect a stick but it will have to be a very late one, so Monday has 50/50 bounce or lower. Phil is perfect "cash" or my daring play USO puts as oil is out of touch with reality.

  170. Likely outcome:  Davos will save the (financial) world over the weekend. Yellen & Co will implement it next week. We will all be hating what happens to every open position we have, no matter what it is (yeah, we thought we were 'balanced'..!)

  171. Thanks for saving our asses Phil.  I really appreciate your patient instruction, especially your constant calls for cash.  Have a good weekend. 

  172. I'm surprised TSLA didn't jump to $300 when the China pricing was released…

  173. That is an UGLY close.  Down 2% indicates more follow-through next week (between 2.5% and weak bounce off that line).  RUT down 2.5% on the button.

    Have a great weekend everyone – I'll be around!  

    - Phil

    Floating-rate Treasury paper coming to market as yields sink

    • The Treasury sets January 29 for its first sale of floating-rate paper – $15B in 2-year notes. It's the first new security offering by the government since the introduction of TIPS in 1997.
    • The move comes as investors were reintroduced to the risk of rising interest rates for the first time in a while last year. Floating-rate investments saw plenty of interest, but options are mostly limited to riskier investments like bank loans (also called leveraged or senior loans; ETFs for these products saw plenty of inflows in 2013).
    • For now, the Treasury offering will be a niche product, and BAML says the biggest interest will likely come from money-market funds.
    • Amid the excitement for floating-rate debt, Treasury yields continue to dive in 2014, the 10-year off another five basis points today to 2.73%.
    • Short yen (FXY +0.8%) has been as popular a trade as long equities (maybe even more), and it too is reversing in January. Off 0.95% today, dollar/yen is down to ¥102.30 after starting the year above ¥105. Was it the weak Chinese PMI report this week, or the realization that Abenomics – really little more than devaluation – isn't working? Maybe it was just a trade that got too crowded.
    • The ETF story of 2013 – the Japan Hedged Equity Fund (DXJ -2.2%) – is now off 5.8% YTD, it's taking its sponsor WisdomTree (WETF -7.2%), one of the big individual stock stories of 2013, with it.
    • The slowdown in China can be viewed through the action in two brokerage names – with wealth manager Noah Holdings (NOAH -10.6%) and  real estate services firm E-House Holdings (EJ -7.3%) continuing to dive after big moves last year.
    • The HSBC PMI Wednesday night showed Chinese manufacturing unexpectedly falling into contraction this month and the country's Beige Book spoke of a "broken" credit transmission system.
    • The iShares Emerging Markets Index ETF (EEM) is off 1.3% in the premarket as investors rush out of emerging currencies. The Turkish lira plunged to a record low today, while Ukraine's hryvnia fell to a four-year low, and South Africa's Rand dove to its weakest since October 2008 following Argentina's decision to devalue the peso and a weak PMI report out of China yesterday.
    • “We continue to see the risks surrounding China’s macro trajectory as having a negative impact on EM,” says Morgan Stanley's Rashique Rahman. “As capital costs rise and investment slows, commodity prices should come under pressure, boding poorly for economies linked to China’s old growth model.”
    • In Russia, the ruble has declined to an all-time low vs. the euro.
    • Of Turkey from Rareview Macro's Neil Azous: "Their net foreign-exchange reserves are dwindling pretty fast. They’re definitely in the danger zone. If you’re a money manager, the responsible action is to take some measures to reduce risk.”

    Iran to woo oil companies with "sexy" contracts, Total CEO says

    • Iran plans to offer oil companies improved terms to develop oil and natural gas fields once a trade embargo against the country is lifted, Total (TOT -1%) CEO Christophe de Margerie says.
    • TOT, Europe’s third-biggest oil company, stopped work on Iran’s South Pars gas field in 2009 as the U.S. tightened sanctions, and the CEO says the company has “no specific right to restart” work on previous projects.
    • "The fact that [the Iranians] are telling us to start moving, to get ready, should mean that they are ready to make moves on the political discussions,” De Margerie says.
    • The Obama administration is set to complete a critical phase of its Keystone XL (TRP) pipeline review next monthWSJ reports, setting the stage for Pres. Obama to make a decision on approving the controversial project in the thick of the midterm campaign season.
    • The State Department aims to release a report on the environmental impact of the proposed pipeline extension next month, sources tell WSJ, a move that could put Obama on track to make a decision by May or June.
    • Administration officials have long been vague about the timing of the State Department review.
    • As the U.S. freezes and stocks plunge, benchmark U.S. natural gas futures topped $5/mmBtu for the first time since Aug. 2010 on expectations that continued cold weather would keep demand high for the heating fuel.
    • Natl gas has moved well into overbought territory during the last few days as consumers have pumped up their thermostats, and the spike may last a while longer given that the cold snap is set to continue all of next week.
    • Despite the run-up in prices for Jan. and Feb., longer-dated prices for the spring and summer remain below $4.50/mmBtu, providing little incentive for the likes of Chesapeake (CHK -0.1%), Devon (DVN -0.8%) and EOG (EOG -2%) to switch from oil to gas drilling.
    • The shift to backwardation is a big boost to United States Natural Gas Fund (UNG +8.2%) and even bigger to the leveraged VelocityShares 3X Long Natural Gas ETN (UGAZ +24.4%).
    • Barrick Gold's (ABX -1.5%) production is sure to drop this year after a number of asset sales, but after listening to CEO Jamie Sokalsky yesterday, TD Securities analysts think thedecline will be steep: ~6.2M oz. this year vs. 7M-7.4M oz. in 2012 and far from the halcyon days when it produced more than 8M/year.
    • The preliminary guidance provided yesterday "is likely to drive Street consensus estimates lower as analysts adjust for lower production, a higher tax rate and increased interest expense," the firm says in maintaining its Hold rating and $19 price target.
    • The strike at South African platinum mines has paralyzed the world’s three biggest producersof the metal for a second day, as talks to resolve the dispute over pay brake up until next Monday.
    • Negotiations between Anglo American Platinum (AGPPY), Impala Platinum (IMPUYIMPUF) and Lonmin (LNMIFLNMIY) and the AMCU union are expected to resume for three days beginning Jan. 27; platinum prices pared declines as prospects of a quick end to the walkout faded.
    • At least 70K employees began their strike yesterday in the country that is home to 70% of global production; the mining companies estimate the strike will cost ~$13M/day in lost revenue.
    • Previously immune to the selloff in the broader averages, things catch up to the Dow Transports Index (IYT -3%), with today's decline following yesterday's new all-time record.
    • Richard Russell alert? Followers of Dow Theory like to see industrials and transports moving together to confirm a trend. Prior to today's action the DJIA (DIA -1.2%) was down 2.3% YTD while the transports were up 2.3% - giving hope the broad market might be set to reverse course. Today's slump though, brings the transports into the red for the year.
    • Another transport ETF is the XTN.
    • General Motors (GM -2.7%) says over a third of its U.S. dealers have signed up for the Shop-Click-Drive program which lets customers do most of the car buying legwork online.
    • The innovative program is seen by the automaker as a way to engage younger shoppers, but has faced some resistance from dealers.
    • Participation in the online program by GM dealers is still optional.
    • BMW (BAMXY) says its new i3 EV will be priced close to a typical 3 Series compact – a mark which doesn't include any tax breaks a buyer might realize.
    • The automaker expects to sell a couple thousand i3s during the first year of sales in the U.S.
    • The model hits showrooms in May.
    • Toyota's (TM)  Bob Carter says hydrogen refueling stations will cost much less than the $1M-$2M figure being bandied around by critics.
    • The exec maintains infrastructure to support the technology could be up and running quickly.
    • Carter, seemingly Toyota's point man on hydrogen fuel cells, thinks eventually hydrogen will be cheaper for drivers than gasoline.


    • The FBI has discovered about 20 cyberattacks against retailers in the past year similar to the one against Target and has warned companies to prepare for more attempts to breach their systems.
    • The attack on Target used "memory-parsing" malware that infects point-of-sale (POS) systems such as cash registers and credit-card swiping machines to steal information from tens of millions of cards.
    • "The accessibility of the malware on underground forums, the affordability of the software and the huge potential profits to be made from retail POS systems in the United States make this type of financially motivated cyber crime attractive to a wide range of actors," the FBI said.
    • "Everybody we work with in the retail space is scared to death," says a cyber-security consultant. "They don't have a lot of defenses to prepare against these types of attacks."
    • If you're looking for a bear on the retail industry, look no further than Starbucks (SBUX) CEO Howard Schultz.
    • During his company's earnings conference call, Schultz didn't blame the weather, strapped consumers, or heavy promotions for comparable-store sales falling below expectations as he warned on a larger trend: A lack of boots in the streets.
    • "Holiday 2013 was the first in which many traditional brick-and-mortar retailers experienced in-store foot traffic give way to online shopping in a major way," said Schultz.
    • He says the "pronounced" shift in consumer behavior is accelerating and isn't likely to reverse, but Starbucks is one of the few B&M chains well-positioned to evolve while the ground crumbles around the retail landscape.
    • Starbucks earnings call transcript
    • Execs with Procter & Gamble (PG +2.7%) highlighted the consistent demand the multinational saw across global markets and notes late-quarter strength sets up FQ3 for solid organic sales growth.
    • An important note is that profits are growing at a faster rate than sales on a constant currency basis in developing markets. Russia, China, and Brazil should see even more margin accretion as innovation and local manufacturing contributes.
    • The company expects to make share repurchases of between $4B and $5B this year.
    • Good news on the diaper front: P&G's market share for diapers rose 150 bps over the last year in the U.S.
    • Earnings call transcript
    • A summer report in the First Financial Daily said "suspicion has been brought up" that Herbalife (HLF -8.6%) was violating Chinese laws, says the NYPost. The news was mostly ignored, but a similar story on Nu Skin (NUS -4.8%) in China's People's Daily last week certainly wasn't.
    • A difference thus far is Chinese officials have now said they're investigating Nu Skin, but have not done so regarding Herbalife.
    • The First Financial investigative reporter claimed a Herbalife representative making a recruiting pitch told him he had to buy about $2K worth of product to become a "direct sales representative," and that he was making over $3K a month selling HLF products.
    • “The pay-to-play aspect, exaggerated income claims and false product claims are signs that Herbalife could be engaging in pyramid behavior in China,” says Robert Fitzpatrick, who helped advise on writing Beijing's anti-multi-level marking law.
    • Martin Marietta Materials (MLM -2.9%) is in advanced talks to acquire building materials company Texas Industries (TXI +5.6%), and an agreement could be announced as soon as next week, Bloomberg reports; trading has resumed for both stocks after a brief halt.
    • TXI's strength in California and its home state would give MLM an entry into the cement market amid a U.S. construction rebound.
    • Chip equipment stocks aren't getting spared from a general market selloff after Samsung (SSNLF - the world's #2 chipmaker) guided for its 2014 chip capex to be flat Y/Y. AMAT-1.6%. LRCX -3.7%. ASML -0.7%. UTEK -2.2%. RTEC -3.2%. MTSN -5.1%.
    • Industry analyst Robert Marie observes this is the first time since 2009 that Samsung hasn't upped its chip capex budget. With Intel and TSMC (the industry's two other big clients) also guiding for capex to be flat (if not down) this year, Marie is cautious about 2014 growth, even though others have forecast sales will rebound sharply this year following a rough 2013.
    • KLA-Tencor (KLAC -2.2%) is joining the selloff even though the company posted an FQ2 EPS beat yesterday afternoon, and provided healthy FQ3 guidance – revenue of $790M-$850M and EPS of $1-$1.20 vs. a consensus of $814.5M and $1.11 – on its CC (transcript). KLA also forecast FQ3 bookings will be in a range of $700M-$800M (implies 10% Q/Q growth at the midpoint), and struck an upbeat tone about 2014 investments in 20nm and 3D NAND flash capacity.
    • KLA still expects 10%+ industry growth this year, but admits its outlook is "slightly weaker" than it was three months ago. The company also believes industry adoption of EUV lithography (important for ASML) has generally been pushed out to the 7nm process node from the 10nm node.
    • Sprint (S -3.2%) discloses it recently began implementing job cuts, and plans to record $165M in related Q4 charges. "Additional material charges" are expected in future quarters.
    • News of the cuts comes amid concerns Sprint, which is scrambling to build out its 4G LTE network and neutralize Verizon/AT&T coverage leads, continues to lose share to rivals.Verizon and T-Mobile's recent numbers have amplified those fears.
    • Separately, Sprint announces it has no plans to bring back the Nextel brand. TechCrunch reported last month the carrier is looking to reintroduce the Nextel brand to underpin its business services.
    • Sprint's Q4 results are due on Feb. 11.
    • Broadcasters face a tricky question on how to battle Aereo effectively, while not scaring off ad buyers at this year's Upfront meetings.
    • Fox (FOXA) and CBS (CBS) have threatened to go to cable if Aereo wins in the Supreme Court, a development that would have a major impact on ratings on ad rates. NBC (CMCSA) and ABC (DIS) have held their tongue so far on the nuclear option.
    • The Supreme Court won't rule on the Aereo case before the Upfront meetings in May.
    • In a new report, Citron Research assigns a $56 near-term PT to 3D Systems (DDD -6.5%), and takes aim at the company's valuation (naturally), growth prospects, and competitive positioning.
    • Citron doesn't believe any of the companies 3D has acquired "control transformative technologies" amid a fragmented IP environment for 3D printing, and deems its Cube consumer/enthusiast 3D printer line to be second-rate.
    • As evidence, it notes a Cube printer has an average rating of just 2.6/5 on Amazon from 10 reviewers, while MakerBot's (SSYS -4.7%) competing Replicator 2 has a rating of 3.8/5 from 48 reviewers.
    • Citron also notes recently-acquired Phenix Systems (represents 3D's entry into the metal printing market) has had less than $10M in revenue each of the last four years, and makes note of pending competition from Mitsubishi, H-P, and Epson. Likewise, The Sugar Lab (acquired in September) is deemed to be "nothing more than a husband and wife team working out an apartment in East Los Angeles."
    • Like Credit Suisse, Citron notes 3D trades at a major premium to Stratasys, which it considers a relatively better investment, and thinks shares would only be worth $46 even if 3D generated $2B in 2021 sales with a 20% profit margin, and paid no taxes.
    • Stratasys has followed 3D lower, as have Voxeljet (VJET -5.8%) and ExOne (XONE -6.8%).
    • Previous: Citron calls 3D a "bubble stock"
    • With equities getting routed today, Microsoft (MSFT +2.9%) has given back a chunk of the AH gains it saw following yesterday's FQ2 beat, but is still soundly outperforming.
    • By and large, the sell-side is pleased with Microsoft's enterprise strength, hardware sales, and cost controls. Credit Suisse has upped its PT to $42.50 from $40, while predicting Windows profitability and growth will improve in the next two quarters. It also expects Azure/Office 365 will generate "meaningfully higher" lifetime sales and profits than traditional licenses, in spite of near-term revenue cannibalization.
    • Jefferies is reiterating a Buy and $42 PT, and sees the "option value" on the Windows business (expected by the firm to decline 7.5%/year perpetually) rising following better-than-feared FQ2 numbers. But Goldman, which has been bearish since April, thinks FY14/FY15 estimates will keep dropping.
    • On the CC (transcript), CFO Amy Hood stated the macro environment is "a little better than [Microsoft] thought," and that enterprise Windows sales are benefiting both from Win. 7 upgrades and a shift towards more costly enterprise SKUs.
    • She also mentioned Microsoft was able to beat gross margin expectations in spite of a larger hardware mix by lowering costs in other areas, and claimed share gains in database (SQL Server) and systems management software (System Center).
    • More on Microsoft's FQ2
    • Samsung's (SSNLF) net-profit growth slowed significantly in Q4, rising 5.4% on year to 7.3T ($6.7B) won vs an increase of 25.6% in Q3.
    • Sales increased 5.7% from a year earlier to 59.3 trillion won.
    • Operating profit -6% to 8.31T won, the first drop in two years.
    • The company warned that it will be "challenging" to improve its earnings in Q1, "as the weak seasonality of the IT industry will put pressure on demand for components and TV products."
    • The strength of the Korean won hurt earnings by 700B won ($651M), and the company took an 800B won one-time charge related to employee bonuses.
    • Operating profit at Samsung's mobile unit was flat on year at 5.47T won but down from a record 6.7T won in Q3, hurt by the release of new iPhones.
    • Samsung expects Q1 smartphone shipments to rise at a "mid-single digit" pace on quarter and tablet shipments at a "high single-digit" rate.
    • Further operating profit breakdown: chip division rose to 1.99T won from 1.42T won a year earlier; display plunged 90% to 110B won, dragged down by weaker-than-forecast sales of the Galaxy S4 and poor demand for TVs; consumer-electronics dropped to to 660B won from 700B won.
    • Samsung intends to spend a similar amount on capex in 2014 as in 2013, when it invested 23.8T won.
    • Shares closed +3% in Seoul.

  174. Davos will pat 85 people on the back for saying inequality, Yellen will muck things up, and yes all positions will be losers including cash as the buck drops!

  175. Seems like they couldn't get /ES down 2.5% – so I think that means back to your regularly scheduled programming next week = up

  176. Thank you Phil – interesting week!

  177. Wow – I just disagreed with the master, sorry Phil but I  hope you're right given how I am positioned!

  178. Options are BS TZA up 7.5% in one day, very good on a year without contract charges.

  179. Nat gas/Brit – Sure but let's see how it goes first.  If you look at a long-term chart of UNG, it's a pretty wild ride but, historically, we're still very low in nat gas.  

    Fed/Rookie – As usual.  

    You're welcome Steve and yes, our casting director will be calling!  cheeky

    TZA/Scott – Yeah, you really have to get the timing right on those, they are like the VIX, the long months tend not to react to what's happening in the current month.  

    CASH/Shadow – Yes, weekend is a bit random but the possibility of panic in China makes cash the best option.

    Likely/Scott – I prefer to think it's likely that we have a pullback to realistic prices.  Why is that so horrible.  Things have been unbuyable lately.  

    You're welcome Dennis.  

    TSLA/Scott – Don't forget China is ground zero for investor concerns at the moment.  

    2.5%/Deano – Nope, just a weak bounce and look at it now – down 2.21% after the bell – tons of selling came on after the bell.  

    You're welcome Scott.  

    TZA/Shadow – Shorting TNA was even better – we should have though of that!  

  180. Fear is the strongest emotion. That’s why market falls faster than rise…

  181. Mr TopStep thinks Monday is gonna be a blood bath…

  182. Looks like we'll be getting another entry point for VXX! Up 12% today… Love it!

  183. Red Alert!

    I agree with Pharm – we have gone through some support levels like a hot knife through butter. Monday will certainly be interesting! NASDAQ and Russell were so far ahead they show less damage but it's getting close there as well. And Monday, AAPL reports. And a lot of other tech guys after that. Interesting week me think.

  184. In that case, Jabo would be happy as his Momos finally show real values.

  185. Senkaku-Diaoyu Islands:  I get the feeling that this whole thing is going to heat up to boiling and then finally be resolved with the U.S. plopping down a base on the islands, claiming it U.S. territory and patrolling the surrounding area with drones.  Actually, its probably the cheapest way in the end.  (P.S. theres oil under those islands! *nudge*XOM*cough*HAL*wink*)

  186. Sent from Bloomberg for iPad

    Watch this video at

    Blankfein: Technology Brings Bigger, Deadlier Risks
    Jan. 24: Lloyd Blankfein, chairman and CEO at Goldman Sachs, explains his worries over the technological risks to the financial industry at the World Economic Forum in Davos, Switzerland.

    Download the free application at

  187. From Bloomberg, Jan 24, 2014, 8:00:00 PM

    Austria’s mint is running 24 hours a day to meet orders for gold coins, joining counterparts from the U.S. to the U.K. to Australia in reporting accelerating demand boosted by the bear market in bullion.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  188. From Bloomberg, Jan 24, 2014, 5:30:55 PM

    U.S. stocks fell for the week,
    giving benchmark indexes their biggest losses since 2012, as a
    selloff in emerging-market currencies and signs of weakness in
    China spurred concern that global growth will slow.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  189. From Bloomberg, Jan 24, 2014, 7:15:47 PM

    Asian stocks fell this week, posting
    the longest streak of weekly losses in more than 18 months amid
    concern growth is slowing in China, the world’s second-largest

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  190. From Bloomberg, Jan 24, 2014, 12:41:04 PM

    European stocks posted their biggest
    weekly decline in seven months as emerging-market currencies
    suffered a selloff and a report showed China’s manufacturing
    industry unexpectedly contracted.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  191. From Bloomberg, Jan 25, 2014, 2:00:00 AM

    The pound strengthened to a 2 1/2-year high versus the dollar as jobless data that beat analyst
    expectations prompted the Bank of England governor to pledged
    keep down interest rates to support the recovery.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  192. From Bloomberg, Jan 25, 2014, 12:00:11 AM

    Treasuries gained for the longest
    stretch since April as emerging-markets losses and signs of
    slower U.S. economic growth led investors to seek safe assets.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  193. From Bloomberg, Jan 25, 2014, 2:00:00 AM

    Germany’s government bonds advanced
    for a fourth week, with 10-year yields falling to the lowest in
    more than five months, as concern growth in emerging markets is
    slowing boosted demand for the euro area’s safest assets.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  194. From Bloomberg, Jan 24, 2014, 6:18:43 PM

    France’s Aa1 credit rating was
    affirmed by Moody’s Investors Service, which maintained a
    negative outlook based on the continued reduction in the
    competitiveness of the nation’s economy.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  195. From Bloomberg, Jan 25, 2014, 12:01:00 AM

    Wal-Mart Stores Inc. (WMT), the world’s
    largest retailer, is eliminating about 2,500 employees at its
    Sam’s Club warehouse division in a bid to improve efficiency at
    the business.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  196. From Bloomberg, Jan 24, 2014, 1:38:05 PM

    Mexico’s Finance Minister Luis Videgaray said there is no need to support the peso, which fell
    to its weakest in 18 months earlier today, because the market
    remains sufficiently liquid.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  197. From Bloomberg, Jan 24, 2014, 12:37:32 PM

    More Davos Coverage >>

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  198. From Bloomberg, Jan 24, 2014, 11:36:19 AM

    Bank of England Governor Mark Carney
    said banks must change their behavior as regulators overhaul
    benchmarks such as the London interbank offered rate in the wake
    of manipulation scandals.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  199. From Bloomberg, Jan 24, 2014, 6:06:25 PM

    Emerging-market economies had a brutal week. For years, during the crash and its aftermath, they did well as the advanced economies slumped. Recently, not so much. Many developing countries are seeing their currencies drop and their bonds and equities hammered. Just as the global recovery appeared to be strengthening, a fresh source of instability has presented itself.

    To read the entire article, go to
    Sent from the Bloomberg iPad application. Download the free application at

  200. South Korea and the U.S. Reacted Much Differently to a Credit Card Theft Scandal

  201. Cannabis Cuisine Takes Colorado with Gourmet Munchies, THC Soda, Food–Pot Pairings

  202. Regulators Are About To Take The First Step To Revolutionizing Global Currency Markets

  203. Inflated worries, part 2 — a different look at the labour-market slack conundrum

  204. Emerging Market Contagion Spreads; Argentina, Venezuela, Turkey Roundup; 50% Tax on Internet Purchases

  205. ROBERT SHILLER: Bitcoin Is An Amazing Example Of A Bubble

  206. Peso collapse raises fears Argentina lurching towards decennial crisis

  207. Starbucks is getting ready to let you order coffee before you get to the store

  208. Australian dollar drops to 87.6 US cents as China’s factories slow down

  209. The average Chinese private-sector worker earns about the same as a cleaner in Thailand

  210. Japanese Government: Shinzo Abe Won’t Meet His Budget-Balance Promise

  211. The world put $4 billion on Starbucks gift cards last year

  212. PCs are dying, so Logitech pivoted to tablets—and had a surprisingly profitable quarter

  213. ‘Big Four’ accountants’ China units face US suspension

  214. China’s manufacturing output is shrinking and it’s hitting the little guys first

  215. Lockheed Martin’s 4Q Profits Sink 14% on Charges, Lower Defense Spending

  216. Mild weather hits clothes retailers, CBI survey shows

  217. China’s top hotels shed stars to woo austerity-hit customers

  218. TiVo Has Laid Off All But Two Hardware Engineers [Report]

  219. Chinese oil giants make use of offshore shell companies in Caribbean

  220. Co. behind W.Va. chemical spill: Up to $4M credit

  221. Google Glass user questioned by Homeland Security for suspected movie theft – The Tell – MarketWatch

  222. Facebook and Google refuse pot ads, even where marijuana is legal

  223. India’s bootleg luxury industry may be growing twice as fast as its real one

  224. Nearly half the people in South Korea had their credit card numbers stolen by one man

  225. Silicon Valley Doesn’t Have Enough Electric Vehicle-Charging Stations, And Drivers Are Freaking Out

  226. Phil,

    Again I wish to remind you to change the background of your TOS platform from black to white, the same background I am writing on at the moment so one can read thinks. No one can tell me you can read things well if letters in red or green are written on a black background.

    Once you follow the simple instruction to change and this alters nothing fundamental on your platform.

    Open TOS before you enter your password click on configure on the new window click on color and click on white save and you set to go. If you wish to enlarge your platform's numbers and letters you can on the same window click on a larger setting. save and you done.

  227. Did TOS resolve their upgrade problems???  Thanks in advance…. I currently use Fidelity's Active Trader Pro trading platform and they seem to be intent on upgrading it, but they don't have futures and commodities markets.  Also, their margin requirements are not PM.  Best Regards to ALL.

  228. Ron – seems to be running fine for me.

  229. Thanks Pharm. Aloha!!

  230. Phil / VIX
    This is why I usually don't play this, so our cost basis is a little different but I though VIX worked on momentum. For, example the Feb $14's ( $2.50 ) are just breaking even with VIX at $18.14 ?!

    Same with TZA, although up 8% in a day the March puts and spreads barely budged ? Am I missing something ?

    Yodi / TOS
    Another white background convert ! Yah ! The guys at TOS always laugh at me because I don't have the geeky black background. Quite frankly it hurts my eyes and is psychologically depressing.

  231. Phil / BTW 
    We have 40 Feb14 $14's in the STP.

  232. Wombat

    I don't know what it is but it is simply stupid to write dark letters on a black background. Same like guys driving black limousines in subtropical climates.

  233. Yodi
    well, i've heard it a thousand times >
    thats the difference between engineers and designers

  234. Pharmboy, 

    TOS still has issues…..can't download to Excel, and other numerous problems…..say they are working on issues…..can't leave a good thing alone…..another outsourced f..up! Seem to be having problems with Java…..No different than when I was installing Oracle 12i….Outsourced piece of crap!! 

  235. LOLZ bitcoin is a bubble? Sure, but where? $800, $8,000, $80,000? No one knows. Certainly we know it wasn't at $8 or $80, don't we?

  236. Here some more plays for traders looking as well for a div while playing the house on options

    This on e is an ETF (Exchange traded Funds) paying a monthly div. of .12 to .14 cents per share.

    Buy the stock at about 22.80. ( see first how next week develops) Stock has traded over the last year between 21 and 23.50.

    In this case I will sell first the Sept 14 22 straddle for 2.20 and than buy the stock, discounting the stock to 20.60 or near. Obligating you to buy he stock at 21.70 just about .70 higher than the years low.

    As always do not bet the farm on it as my self as a multi spread trader by a max of two.

    You might see it as a conservative purchase but 30 of these will pay for my families meal ticket every day.

    This one could bring you 76$ a month!!

  237. Some info on SDV

    The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global SuperDividendTM Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index. The underlying index tracks the performance of 100 equally weighted companies that rank among the highest dividend yielding equity securities in the world, as defined by Structured Solutions AG. It generally will use a replication strategy. The fund is non-diversified.
    Structured Solutions AG develops and markets structured investment products. The company offers a range of product structures, including funds based in a range of locations, certificates, and bonds, as well as alternative investment products. Its products include Lithium Index Strategy Fund, an equity fund offered by companies investing in lithium; and Global Mining Fund, an equity fund offered by companies engaged in mining exploration and investment. Structured Solutions AG was formerly known as ZJ Structured Solutions. The company was founded in 2007 and is based in Frankfurt am Main, Germany. Structured Solutions AG is a former subsidiary of ZJ Consulting AG.

  238. Weekend shooting at Columbia Mall, MD

    Current shooting target – Mall, not sure what will be the next

  239. Drones/Kinki – if you want to contemplate Drones, read Kill Decision. Just finished it today.
    Suarez continues his damn good writing.

  240. Phil…any thoughts on this

    The BBC reports HSBC has imposed restriction on larger cash withdrawals. Customers are discovering that unless they can provide written documentation of why they need withdrawals in amounts as little as 3,000 Pounds they cannot get the money. Their money. They have to prove to the bank they need it, to explain to the bank why you need your money. HSBC says they have a duty to prevent lawless use of money. HSBC says this policy started in November; it just didn't notify depositors of the policy.