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Technical Tuesday – Small Correction or BIG TROUBLE?

Wheeeeee – down we go!

We couldn't be happier, of course – as we were feeling a little silly having cashed out a month ago, with the market making new highs on us.  Still, we stuck to our Fundamental guns and now we are outperforming the market by a mile this year and, even better, we have some exciting opportunities to use our sideline cash to do a little shopping – but not yet.  

There's no hurry.  Those XRT May $84 puts I mentioned in yesterday's post that went from 0.85 last Thursday to $1.42 yesterday morning hit $2.35 into yesterday's close.  That's up another 65% in a day and that's money that's compounding for us on the way down, up 176% in 3 days now.  This is what we do with our sideline cash – so it's not like we sit around twiddling our thumbs…

I sent out an Alert to our Members yesterday to sell the T July $35 calls for $1.10 to cover a long position we have on T.  Pre-market they are down 1% and those short calls are up 10% on day one already – but there's 100 more days to go.  Again, this is what we can do with our sideline cash.  We also shorted JPM in an earnings spread – that trade is here from our Live Daily Chat Room.  

We had lots of fun in our Futures trading, flip-flopping our bets for the bounces and catching nice moves in both directions – but mostly down.  We even made some quick money with long plays on the Momo stocks – also playing for bounces.  Our last trade idea of the day was shorting /NKD as it failed the 14,800 mark into the close (coupled with a falling Dollar and rising Yen) and that index fell straight down to 14,450, good for $1,750 per contract.  We were already longer-term short position on the Nikkei through our EWJ puts in the Short-Term Portfolio, this was just a bonus bet.  We also added JNJ May $95 puts at .80, those could be fun if the weakness continues.  

RUT WEEKLYNow things are going to get interesting at the Nasdaq has fallen from 4,375 to 4,050, which is 325 points or 7.5%.  The 5% drop line was at 4,150 and the 10% line is 3,950 – we'll see which one gets tested first!  On the Russell, we'd down from 1,210 to 1,130 so 80 points is 6.6% with the 5% line convenienctly at 1,150 and the 10% line at 1,090, which is right about the 1,100 line we expected to fall too, which is also the 200 dma on the Russell.  

Per our 5% Rule™, we ignore the spikes and we concentrate on the move from the major consolidation at 800 to the 50% move to 1,200 and, from there, we expect a HEALTHY correction of 20% of the run-up, back to 1,100, which is still bullish (if it holds).  That's why we're still bullish in our Long-Term Portfolio (but well-hedged, of course), we think this is just a minor, and very normal, correction and, unless those levels break – that's how we're going to be playing it.  

.SPX WEEKLYMeanwhile, we'll be playing close attention to the 15% line on the S&P, which is also the 50 dma at 1,840 and isn't it funny how we were able to make these predictions over a year ago?  

Actually, it's not funny, the stock markets are rigged and run by computers and all we do with our humble 5% Rule™ is show you how the programs work.  Keep in mind, we haven't changed our lines from last year, when we felt the 10% line (1,760) on the S&P was what the index was worth.  That's still our target for this year – unfortunately, still down from here.

We're willing to change our mind (and our targets) if earnings tell us a different tale than what we expect to hear this quarter and, of course, the Dollar is a factor in re-setting the index levels and this morning it's so weak that it's failing the 80 line as neither the BOJ or the PBOC has stepped in with more stimulus yet.  So, like spoiled babys used to getting a constant supply of free-money candy, the markets are having a little temper-tantrum.  We had some notes on monetary policy in our morning news report, which I tweeted out (you can follow me here) and also put it on our Facebook Page (which you can follow here).  

This chart is an excellent summary of WHY we are bearish into earnings.  As I noted above, we flipped bearish on Friday, Feb 21st, when the S&P was at 1,840 and it's only back to 1,840 now though, as noted yesterday, we've actually had an excellent month of hit and run trading from the sidelines.  

In that post we suggested the TZA April $16/19 bull call spread at .80, selling the $15 puts for .62 for net .18 at the time and we were looking for a $9,000 pay-off so we added 30 contracts for $540 and, two weekss from expiration, those spreads are net $1 or $3,000 for 30 and up $2,460 or 455%, right about our 500% goal (the post was, after all, titled "5 New Trade Idease that can Make 500% if the Market Falls").  

So we don't have to have a huge sell-off to make very good money on well-constructed hedges.  We practiced our "BE THE HOUSE – Not the Gambler" strategy that is our focus for training our Members in 2014.

We also suggested, in that same post, a longer-term hedge using a combination of AAPL and SQQQ (ultra-short Nasdaq) right in the morning post (get yours every day RIGHT HERE):

We can sell 1 AAPL 2016 $450 put for $42.50 ($4,250) and buy SQQQ 15 June $50/59 bull call spreads at $3 ($4,500) and that's a net of $250 in cash out of pocket for $13,500 (5,300% on cash) worth of protection and our worst case is owning 100 shares of AAPL for net $452.50 ($45,250).   

Despite AAPL selling off again, the 2016 $450 puts are now $40.75 ($4,075) but the SQQQ spread is already right in the money with SQQQ at $58.83, just .17 below our target and the net of that spread is now $4.89 ($7,335) for a net of $3,250 off our initial $250 cash investment – up 1,204% in 6 weeks.  Considering the upside potential of the trade is 5,300%, this hedge is merely "on track" at the moment.

How did we know to make the Nasdaq and the Russell our primary hedges 6 weeks ago, when they were both trending to new highs?  That's simple, we have our 5% Rule™ and we have FUNDAMENTALS – as I said yesterday, we're happy to teach you to trade like this – but you have to be willing to learn!  

 


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  1. US, Canada Work To Clear Great Lakes Shipping Lanes.

    The AP (4/7) reports on combined efforts by the United States and Canada to clear the shipping paths in the Great Lakes, where persistent ice has forced factories to temporarily shut down production. According to the article, icebreakers on Lake Superior “were still encountering ice layers 2 feet to 3 feet thick,” and roughly 75% of the lake remains frozen. Mark Gill, the US Coast Guard’s director of vessel traffic service, said it would be roughly two more weeks before freighters can cross Lake Superior without an icebreaker escort, and icebreaker duty could still continue into late May. The AP also details the effect of the slow shipping on some of the manufacturers in the region.


  2. Oil Lines

    R3 – 102.91
    R2 – 102.11
    R1 – 101.51
    PP – 100.71
    S1 – 100.11
    S2 – 99.31
    S3 – 98.71


  3. Phil – Love that article that you outlined this morning:

    http://online.wsj.com/news/articles/SB10001424052702304441304579481200046204022

    Obviously, having proponents of man-made-climate-change theory running energy-research institutes at the college level is an example of inmates taking over the asylum, but there is method to this madness. Over the past 25 years, the environmental movement has been very successful using a two-pronged approach to push its anti-fossil-fuel agenda.

    The first prong involves leveraging the U.S. courts and executive agencies to directly control the oil and gas industry through government regulation and taxation. The second involves indirect control through thought leadership and opinion-shaping. Culturally and generationally, man-made climate change is becoming accepted wisdom due to the steady indoctrination taking place in our universities.

    Just wow…. So what are universities to do, hire the 0.01% of scientist who disagree?



  4. TASR – ok, that's me, capitulated…


  5. Good morning!  

    Dollar 79.85!  Futures still flattish but I think it's not a good thing that they couldn't jack them up for the open.  Today might be a blow-off bottom but there are still 10-year notes to sell tomorrow and TLT is only at 109 and I'm sure they'd like to see 110 ahead of the auction, which is why we have Plosser at 2:45 (big hawk) after neutral Kocherlakota at 1:30 today.  After this, it's all dove from the Fed for the rest of the week so time to take those bearish bets off the table – we can always add more if these bottoms break.

    For reference, that's 16,100, 1,835, 3,500 and 1,130 on our Futures and that corresponds with 16,200, 1,840, 4,075 and 1,135 on the Indexes and NYSE 10,400 for good measure.  

    All can be played long (follow the laggard) over those lines and I'll run the 5% bounce levels after this.


  6. Look at EEM go today again – emerging markets catching up to the US! Is a rotation going on?


  7. Richer and Poorer / Phil – And that is excluding capital gains which would definitely not let the bottom 90% catch up!


  8. pcln all over the place!


  9. Fargo 6th-graders mop up against college investors

     

    http://finance.yahoo.com/news/fargo-6th-graders-mop-against-college-investors-173300583.html

     

    Carlson encouraged them to be patient


  10. OK, what should be our bounce levels?  These are broader, from consolidated tops to non-spike bottoms on the indexes (not Futures) over the past month:

    • Dow 16,600 to 16,200 is 400, so 16,280 is weak and 16,360 is strong
    • S&P 1,890 to 1,840 is 50 so 1,850 is weak and 1,860 is strong.  
    • Nas 4,350 to 4,075 is 275 so 4,130 is weak and 4,185 is strong
    • NYSE 10,650 to 10,300 (hasn't hit it, but that's the floor) is 350, so 10,370 is weak and 10,440 is strong (no chart from Finviz but Yahoo chart)
    • RUT 1,200 (overshot) to 1,100 (not yet) is 100 so 1,120 is weak and 1,140 is strong (chart)

    In the Russell and NYSE's case, they had broader patterns to consider while the others are in more of a rising channel which, in the Nasdaq's case, may be breaking.  Anyway, we didn't make weak bounces yesterday and we still need strong bounces today or the indexes remain in a downtrend.  If we get to those lines and stop (happening as I write this) that's a REALLY bad sign.  Maybe time for 5 More (more) 500% Plays!  


  11. Ice/QC – Further proof that global warming is a hoax.  

    Climate article/StJ – Keep in mind that you are reading it from an informed citizen's perspective but the Journal is using it to preach to the faithful climate deniers, who really think there is some vast left-wing conspiracy, spearheaded by Al Gore, to control America through fear of an unseen enemy.  Makes sense they believe that, since that was their Iraq strategy.  This is how they begin raising money for the new cause (see notes above), to "re-educate" America into a nation of climate-deniers.   Paul Tice (the author) is the Energy Portfolio Manager at BlackRock – hardly an objective journalist!  You can see the money boys getting behind this "issue" right from the beginning – that's going to be fun to watch…  Next week – talking points on Fox, then a "study" by the Heritage Foundation!  Hans von Spakovsky is the legal hit man for Heritage, who also works with Blackrock and was successfully blocked from being appointed to head the Federal Election commission in 2007 – just a fun fact…

     TASR/Scott – Just when they are forming a nice bottom?

    At this price ($17), I like selling the TASR 2016 $15 puts for $3, let's do 10 of those in the Income Portfolio and 10 in the LTP as we'd love to own TASR for net $12.  

    TASER Reports Hundreds More AXON Camera Sales

    TASER Wins AXON On-Body Camera Orders

    TASER Announces Multiple Orders of Smart Weapons

    Rotation/StJ – Money's gotta go somewhere.  EEMs LOOK cheap.  

    Capital gains/StJ – What do you expect from the WSJ – they're not going to give you the real picture.  I'm surprised they even put that chart in there but the gist of the article is spinning the study to "prove" that poor people would be better off putting their retirement accounts into the market (yet another run at the remaining SS funds by the Banksters).  It's funny as they use the artificially low interest rates and the artificially high stock prices to "prove" that now is the time to BUYBUYBUY – they really do want to completely wipe out the bottom 90% so they can steal the rest of the country…

    LQMT getting interesting again at .21.

    DBA through the roof – testing $29.  BTU $18, CLF $21 – gotta love our bottom fishing!  ABX holding up well at $18.61 – all of our 2014 top picks beating the market by a mile.  

    Student investing/QC – That's the same kind of straight-up logic Jackie uses for her picks.  Kids know what kids are buying and they are fundamental buyers – not influenced by chart fluctuations!  Last time we had a "take your daughter to work day", last June, Jackie's top pick was ADBE, based on the new pricing model.   They topped out at $70 from $43 at the time – not bad!   When the stock was being beaten up for their new strategy, Jackie was a buyer based on the Fundamentals – a chip off the old block. 


  12. TASR/Phil – bottom, yeah.. maybe. but I was holding long calls and getting to where you get out or double down and I don't know where 'bottom' is going to be in this market yet. lots of things are looking bottom-y now, but my hands still have scars from playing that game too many times!  Just going to watch tasr for a bit now…


  13. Phil: Perhaps GME is worth considering a short on. It looks like it might make a second attempt to break the 200 MA, which also a line of fairly good resistance. A fail could take it down to the 37.50 or 35.00 level pretty easily. Just a thought.


  14. Phil/BTU~ Good calls on the 2014 top picks. What's the long term play for BTU? Sorry, I missed that one. Thanks!


  15. BTU has a great cost advantage with coal from the western US- Wyoming. Look what happened to JRCC….


  16. Phil// Do we still hold on to our XRT?  If you had an earlier post, sorry I missed it.  Thanks.


  17. Hey, how come Jackie hasn't been posting here recently? I've made some nice bucks off her picks….


  18. Has anyone had any luck being able to execute the TASR play? Bid at 2.30 ask is 3.00 and I guess patience is the name of the game, but just wondering if I may have missed some strategy that gets the job done. 


  19. TASR – I got filled at 3.00


  20. Craig/TASR – i put in my order to sell 2 contracts @ $3.  ToS initially showed $2.65, and a minute later (9:53est), it filled at the full $3.  It immediately was showing a $70 gain with the options at $2.65.  I reckon I got lucky this time :) .


  21. craig / TASR – 10 contracts just traded at $2.80 and 20 contracts traded at $3.00 prior to that…


  22. no fill on the TASR for me yet, but I experienced the same thing when selling the Jan 15 $12 puts way back when.  The mark was $1.50 and it took a few days to fill, but I finally got my desired $2.00 sale.


  23. TASR/Scott – It's all in the timing.  No matter how much we like TASR (it's our stock of the decade) that doesn't mean we stay in it after it's up 200% from our $6 last entry point.  Now that we can get back in at "just" up 100%, we can start establishing a new position for the next leg.  

    There are so many stocks to buy – why chase ones that have already taken off?  There's always going to be a sale.  Just keep a list of stocks you like and, when they get cheap, that's when you buy.  If not – vacation time!  Here's 20 other stocks (noted on 1/15) I like to buy whenever they get cheap – but that doesn't mean we don't sell them when they get expensive!  

    • GOOG, IBM, ISRG, AAPL, KO, MCD, GE, BAC, F, ABX, BRCM, SHLD, SBUX, HD, GLL, NLY, CIM,  GLW, TSLA, IRBT

    How often does a month go by when one of them isn't on sale?  Certainly not a whole quarter.  Then there's stocks like BTU, CLF, X, LULU…  plenty of things we consistently buy, year after year when they are low BUT, if you don't take the OPPORTUNITY to sell them when they are high – what the Hell are you doing?  

    GME/Jbur – They are brushing up against the 200 dma at $45 but I don't see a compelling reason to short them.  I can't believe they are doing as well as they are with so much of the gaming market moving to Apps but I suppose we're in a good gaming cycle and expectations are super-low for this Q – just .58 after making $1.92 last Q.  And keep in mind, that's $1.92 in ONE QUARTER on a $44 stock – the rest of the year doesn't have to be anything special when Christmas is that good.  I don't like GME and I wouldn't bet them bullish, but there are far safer things to bet against.  

    BTU/Invest – In the LTP, we have 10 2016 $15/20 bull call spreads at $2 and we sold 10 $18 puts for $4.80 for a net $2.80 credit ($2,800) with a max upside of $7,800 (+378% on cash) at $20.  It's only up about $700 at the moment, so still good for 10x but nowhere near as good as where we started in Jan (we adjusted on 2/6 to get more aggressive when BTU fell lower because we had FUNDAMENTAL FAITH that the bottom would hold!).  

    Actually, those other picks from 1/29 were pretty good too:

    • NFLX ($404.50) March $435 calls can be sold for $10.60, covered with 2015 $440/480 bull call spread at $13.  I'd go 5 short and 4 long.  
    • NFLX Feb $390 puts at $9.80, stop if they get over $410 should cost about $1.20 at most so call it an $8.50 stop.  
    • NFLX 2015 $440/400 bear put spread is $22 and you can sell the $550 calls for $22 for a free trade with $40 of upside if NFLX is below $400.  Unfortunately, TOS wants $40 in margin on the short calls so not for everyone…
    • TSLA ($176.47) 2015 $210/180 bear put spread at $20, selling $220 calls for $19.50 for .50 on the $30 spread.  Margin on those is a more reasonable $17.  
    • SHLD ($37.66) 2016 $30/50 bull call spread at $7, selling $25 puts for $6.85 for net .15 (5 in the LTP)
    • BTU ($17.35) 2016 $15/20 bull call spread at $2, selling $13 puts for $1.85 for net .15. (10 in the LTP)
    • WYNN ($195.03) March $200 calls can be sold for $7.35 and covered with 2015 $210/240 bull call spreads at $8 and we can sell 5 ($3,675 credit) and buy 4 ($3,200 debit) for the STP.

    We had to mess around with WYNN, of course but it worked out well, again because we stuck with our FUNDAMENTAL VALUE OUTLOOK when the PRICE went against us.  And, by the way, I have been considering this and one of the flaws people have in trading is applying that strategy (rolling, doubling down) to WHATEVER BS THEY PICK – that is NOT a good strategy.  You have to be very, very sure about your value proposition and you have to check it and re-check it and check it again every time you make a move and every day after that.  You can't just assume that, because we rolled and doubled down on WYNN, that you should do the same with PCLN – it's not the same thing at all!!!  That's something we need to be more clear about – especially for the new Members….

    • Anyway, so NFLX finished at $406 in March, so those short calls expired worthless for a $5,300 gain on 5 contracts and the long spread was better at the time but still $8.50 for an $1,800 loss on 4 contacts so net $3,500 off the original $600 credit on the spread is up $4,100 (683%) – gotta love it. 
    • The NFLX puts would have stopped out for a $1.30 loss.  
    • The Jan $440/400 bear puts spread is already deep in the money and net $28.50 and the short $550s are $7 so net $21.50 off the original net $0 is halfway to goal and up 50% on margin ($40K) in two months – that's why you shouldn't fear margin plays – they make nice returns too!  
    • TSLA isn't in the money yet but the Jan $210/180 bear put spread is $14.80 and the $220 short calls are $36.50 so net -$21.70 is down $22.50 on that one (so far).  That means I like it more now than I did then but it's a rough ride (as we knew it would be – that's why they weren't portfolio picks).  
    • The others are still in the portfolios – on track.  Not a bad set, on the whole, will be a fantastic set as the premium on TSLA runs down and, if not, RAWHIDE!!!  

    XRT/STP, Rookie –  Well, I said we should flip long at 9:40, so that would have been a good time to take them off the table but my bad for not specifically making an official call on every single short-term position I've mentioned over the past month, so we'll play it out, in which case I'd like to see how the day finishes first.  They bounced $1 but down $5 and bouncing $1 is a weak bounce, not even strong and the indexes are weak bouncing too – even if they hold weak, it's still bad after 2 days, they should be at strong by now if they are serious about recovering but I'd still be inclined to take money and run if weak bounces hold. 

    Jackie/Snow – Because she thinks my job is very boring!  She gave it a try, was very good at it, but didn't like it so I'm not going to force her.  My stepfather used to make me work in his chemistry lab and I HATED it – not going to do that to my kid.  She still advises me on trends when she sees them. 

    TASR/Craigs – Yep, we only want it BECAUSE it's $3, otherwise, no play,  You just have to offer and be patient.  That's an important point for all – if you refuse to pay 10% more before you buy a position as a habit, your portfolio performance will go up 10% on average.  Same goes when you sell but, of course, you also have to learn to get out with non-greedy profits and not too great losses (20%ish) otherwise, you can't afford to be patient if you wait until you are bleeding to death to get out.  Of course, when you have a 10% advantage on every entry, it's A LOT easier to take those non-greedy profits and quick losses – isn't it?  


  24. USO – dollar down, oil up… seems like a good time to add a few USO puts. May $37s?


  25. scottmi

    I bought some more USO puts today. I did April as my plan is to dump them tomorrow, maybe before 10:30.


  26. Phil, your above comment means we should have sold the EWJ May 12 puts also? Had 20% gain. Still learning! Not patient enough with entries, sometimes too patient with exits:) Thx.


  27. BTU/Phil/Invest – We also have a BTU position in the Butterfly Portfolio


  28. Dips bought for about 15 minutes, sellers took the next 45 minutes, Bots took the second bounce in a vapor. Beats me as for direction but the bounce is not strong.


  29. Phil – Webcast today?



  30. Shorting /CL just shy of $102


  31. Thanks, Phil. I do believe in fundentals for long term investment. However, I think TA is better method for short term trading.


  32. USO/Scott – good idea, let's discuss in the Webinar (1pm).  Absolutely yes to shorting /CL below the $102 line (now $101.90).  

    EWJ/Griffin – For educational purposes, I can't go jumping in and out of the STP positions every time the market blips up and down.  But, if you are day-trading positions, and especially if the position has any significant amount of money to you  - don't be a schmuck and take the cash!!!  20% is our goal on any trade, especially if it comes in a single day.  Also, if you have an APRIL position, of course you want to close it with just two weeks to go.  If I were sitting around with nothing to do but trade those STP positions, of course I would have taken the money and ran on XRT yesterday and EWJ this morning as we got nice moves down on both.  Either they bounce or we find something else to trade tomorrow – like my JNJ puts…

    BTU/Akademia – Yeah, but that's running a different strategy, also leans bullish.  

    Good observations Shadow.  Hard to read and don't forget Fed Minutes tomorrow.  

    Yes Eric, WEBCAST AT 1PM!

    Good article, Deano:

    Good call Button.  See, it wasn't a good short in the morning, but now it is…

    TA/Invest – Yes, good for short-term trading and I'm not, by nature, a short-term trader.  While it's fun to make a quick profit, it's far more satisfying to make a long-term one – for me anyway..


  33. I was bummed for about one minute that my hard stop triggered at $101.76 on /CL. Not so much now Gotta play those lines. Trying another short with the profits at $102.25.


  34. Tesla's business leasing program in focus • 12:43 PM

    Tesla Motors (TSLA +3.5%) CEO Elon Musk is extolling the speed and ease of the company's new business leasing program on Twitter.

    Musk tweets that an application only takes 5 minutes and just a few taps to procure a Tesla EV for a business customer.

    Robert W. Baird thinks the initiative will boost demand for the Model S and Model X. It also gives Tesla the option of introducing asset-backed securities in the future.


  35. Oil giants are the most evil entity ever. The greed is bad everywhere but oil exploits everything everywhere every time. They have already bought off blame for what they have done to the economy. They will let the world fail first monetarily and second environmentally. Beyond greed, evil, devil like. Russia will not effect oil in a meaningful way, they can't afford to.


  36. Jabo TSLA

    I realize I am negative but does that not show sales are becoming a problem. Who is financing the leases?


  37. shadow—somehow, no matter what TSLA does it comes out as a positive.. hard to understand when the super gigafactory is still a huge risk IMO. To guarantee car prices seems insane too! I think they will eventually go bankrupt if they actually do the gigafactory. But I am probably even more bias than you. 


  38. Regarding the student investing article, has anyone looked into Motif Investing?  Looked interesting.  You can make a basket of up to 30 stocks, ETFs and buy it all for a brokerage fee of $9.95.  You set the parameters of what sectors you want, etc. and I guess it comes up with a list.  You can use other’s Motif’s too.  Might be good for a small IRA you don't touch much.

    Any Thoughts?

    I could not get linking to work.  6th button from left above.  Here is site:

    https://www.motifinvesting.com/how-it-works/overview


  39. jabo

    Musk's tweets are not doing as much as they were, now down about 20%. Most of us experience a good run but it always ends. Batteries is way over the top of possible and your right on if he tries. Doing that at the top of a business cycle is just crazy!


  40. Motif/Grant – sure I have some thoughts, including is not a vehicle for me. sounds very much a gimmick to me that is just another way for retail 'speculators' to gamble on the opinions of strangers.  Great of course for the middleman who sells the bundles. 


  41. Motif – I could, of course, be persuaded to change my opinion.


  42. Oil/shadow – indeed, that's some pricey oil all of a sudden today. how do those @#$%!s do it?


  43. scottmi
    front month cal spread .73 


  44. Scott – I have not heard of Motif before.  Just sounded like an interesting concept.


  45. scottmi

    yesterday and today they rolled about 30,000 contracts. I am down on my position as 102.49 is a buck higher than I expected. I also think tomorrow will be a build and dumping contracts is an indicator that they want out this month.


  46. I'm back!  

    That was a good live session, I thought.  Got a lot accomplished.    I wish you guys would participate a bit more, though.  

    So weak bounces not holding and we're very likely to have another leg down.  If you got out of XRT, now's a good time to get back in – the May $83 puts are $2.05 and still my favorites. 

    The S&P is the lagging index to the downside and SDS is a 2x ultra at $29 and the May $27/29 bull call spread is $1.10 and you can sell the $29 puts for $1 for net $10 on the $2 spread, so 1,900% upside.  


  47. fairly significant technical damage to gs…especially given it isn't a momo or have a crazy valuation…and barometer of health of economy/market


  48. Phil – XRT – Are the $83 or $84 puts  your favorites?  The 83 puts are $1.62, and the $84 puts are $2.05


  49. Model S sales level off • 2:28 PM

    Tesla Motors (TSLA +2.7%) sold about 1.6K Model S vehicles in the U.S. during March to show just a slight increase over the sales tally for February, according to AutoData Corp.

    Barclays is out with a note to clients indicating it believes demand in the U.S. has plateaued. Q1 Y/Y unit sales growth of just 1% from Tesla backs up Barclays' claim.

    The EV automaker is looking to the Model X introduction to be the main driver for mass market sales.


  50. TSLA/Jabo – again I ask, who is going to want to strap their small kids into a Model X when it may burst into flames at any time? As a family car, just begging for tragedy.


  51. Phil – on the XRT.. didn't you mean to say the 84 puts?  Or do you have both


  52. jaboeast

    That is less than 20,000 cars a year. The X is actually way out considering it needs cheaper batteries, battery makers in US have failed.

    scottmi

    If you watched the crash tests, kids in back? Never! The 2nd and 3rd rows flew forward, ignored as the tests check the front seats.


  53. Phil / TZA
    I'm finding it difficult to stay on the same page with the TZAs. I am still holding July spreads in most portfolios. I don't have a long-term and short term port separated ; so when you mentioned getting rid of all the TZA in the recast – were you just referring to those that are playing the short term ?


  54. But.. thanks for that.  I went ahead and bot some of the 84's


  55. Wow Jobob – It is ridiculous that TSLA isn't selling off more. If this is true, it basically confirms the bear thesis.


  56. Nice call Phil.. selling off on the laggard /ES (SPX via SDS)


  57. Oil/Wombat – yeah I like them put spreads on USO. apr36/may37s is my spread. today took me from a nice profit to down -$41..  WTF? added a couple more. and some naked may 37 puts as well. Very interesting to see what transpires tomorrow.


  58. scottmi
    I'm still practicing the /CL calendar spreads that hummer came up with. Sell the front month, buy the next and wait for rollover. Thought I missed the boat this time – just got in this morning on the craziness. The great thing about it is, if you get in at a decent price, you don't really care what happens to the price, it will eventually have to meet the back month.


  59. Phil can you explain what would need to happen for the SDS play to pay 1900%. I could use a real example to illustrate how this works if you could? I am really struggling to understand this. selling puts is a bullish play, so if the S&P goes down don't we lose money by selling those puts?


  60. craig
    SDS is an ultrashort – so if we sell puts with the drop, the puts gain value. 


  61. craigsa620,

    SDS is ultrashort; -2x a move in SPY.  Shorting the $29 put is bullish on SDS which is bearish on SPY.


  62. Craig – SDS is an ultra short ETF.  Meaning it moves in inverse to the S&P by a factor of 2.  If the S&P goes down 1%, SDS goes up 2%.  If SPY goes down, SDS will go up, and the puts you sold will expire worthless, and your spread will appreciate to full value.  Turning a position that only cost 5 cents, into $2.00.


  63. yeah, what JPH said ; >


  64. Lol.  Great minds….


  65. Wouldn't it be easier to just buy SDS call? It seems that the short calls eat into profit so much on these short term trades. Or is the short call to mitigate possible loss if goes the wrong way? Like with XRT, we just buy the put, not a spread.


  66. Thanks all. My bad, I didn't see that it was a short. I think I got it mixed up with XRT. I really appreciate the help. So with SDS, down is up. Nice to have all of you helping.


  67. griffin,

    The short call increases the leverage ratio.  The play isn't looking for a big drop in SPY but it does make the insurance on the LTP cheaper.  I think that is more of the goal.  This play is almost more of a strangle than a full blown bearish call.  It gains primarily through premium decay.


  68. My 2 cents is wait until tomorrow for the indexes plays, Fed could save the market slim as that may be, but maybe the day and a better short.


  69. Ah, I see. Thanks for the insight, JPH. Nice to be surrounded by so many great minds:) Market feels spooky at the moment.


  70. TSLA/Jabob – Wow, 5-minute credit, what could possibly go wrong?  

    Motif/Grant – It is interesting but not much different than just buying stocks yourself unless you simply can't afford to diversify.  It's good if you want to play AAPL, GOOG, PCLN, etc without forking over mega-bucks per share.  I guess you could assemble a dividend-fat set as well so interesting, but who has the time?  

    Oil/Shadow, Scott – Quite the pile-up with 10 trading days left but not too many contracts in Aug so no major problem rolling out to this set.  Sept has 91K already and the big problem comes in December, which is already stuffed with 204,000 contracts.  Interestingly, Dec 2015 has 119,000 already – that's a lot for 18 months out.  

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    May'14 100.69 102.71 100.68 102.48 14:50
    Apr 08

    102.56
    2.12 263528 100.44 273023 Call Put
    Jun'14 100.06 101.95 100.01 101.74 14:50
    Apr 08

    101.81
    2.03 131007 99.78 256063 Call Put
    Jul'14 99.32 101.10 99.30 100.87 14:50
    Apr 08

    100.96
    1.93 53460 99.03 129170 Call Put
    Aug'14 98.52 100.16 98.48 99.99 14:50
    Apr 08

    100.04
    1.86 34414 98.18 68649 Call Put

    GS/Angel – They were on my Dow shorting list this weekend.  

    XRT/Palotay, Louis – Well, since you can spend .43 more to buy $1 of position, I think I like the $84 puts better as a new play (and it was our old ones too).  The $84s are better. 

    TSLA/Jabob – So pretty much they sold ALL their cars in Norway?  

    TZA/Wombat – Well it depends.  Are you hedging or betting?  If you are using them to protect long-term positions, then I wouldn't give them up but if you are using them as a BET the RUT will go down – well, you won, so maybe take some off the table.  In the STP, we had Aprils, which HAD to go but we also had the July $15s, which were well in the money and we had 70 because at first we lost and then we doubled down and then we won – so we were THRILLED to take the profits off the table at 1,140.  If 1,140 fails, we'll take a new TZA position because, like I also said in the webcast – we can find a new winning trade every day when we have CASH!!! – so why cling to one that's already profitable if you have even the slightest doubt it's not going to retrace on you?  

    Laggards/Louis – As you get used to it, you won't need me anymore – it's the best way to play the futures.  Then you just watch for one of the other guys to turn back up and you get your finger on the stop button to take your profits.  Very relaxing, like counting cards…

    Oil hugging $102.50 after tapping $102.71.  Dollar dead at 79.83.  Gasoline popped to $2.98 so something is up.  Nat gas $4.54.

    SDS/Craigs – You're in for net 0.10 so $2 is + $1.90, which is 1,900% higher.  It's at $29 now so the bet is essentially that the S&P will be below 1,850 at expiration.  The nice thing is that, even with the S&P at 1,897 last week, SDS was only down to $27.50 so figure you are out about $1 if you stop out over 1,900 (because your $27 calls are still worth .50) vs making up to $1.90 if it doesn't.  Also, $28 seems like good support, probably 1,870 on S&P and then you risking $0 (as the $27s would be $1 and the short puts are rollable) to make $2 – those are the kind of deals we look for. 

    LOL – And what everyone said!  I love it, teaching really does pay off…

    SDS/Griffin – That's right, mitigation.  This is how we BE THE HOUSE – Not the Gambler.  We SELL as much premium as possible so that, even if SDS drops back to $28, we still end up even (because the $27 calls would be $1 to offset the $1 loss on the puts).  The only reasons we buy a naked put or call are either we want to take a very quick momentum profit (if it comes) or we want to limit our downside in case we're wrong OR, as in the $25KP, because we don't have the margin to make a more sensible trade where we sell premium.  


  71. IRBT/ Phil. Down at the 100 DMA, which is back at the January highs.. At what level would you looking at an entry point.


  72. Oil…..whilst I do not have a crystal ball.  I am long.



  73. wombat – /cl calendar spreads

    I must of missed hummers post.  can you explain?  

    I just checked March expiration and the front and next months prices do not converge


  74. My stop is 101 FWIW.


  75. edro / CL
    they won't merge until everyone starts to roll over contracts. Just buy the spread as high as you can get it ( right now its .77 ) , and let it dissolve, usually around .50 has been the norm.


  76. IRBT/DM – I'd like to see them test $35 but I'd really love to see $30 if the market fails.  

    Oil/Pharm – Didn't we just have this conversation in early March?  

    • Inflation is too low, unemployment is too high, and the Fed is being too hasty in removing stimulus, says Minneapolis Fed boss Kocherlakota. "An unemployment rate of 6.7% means that the U.S. labor market is far from healthy," he says, "but I would say that this measure – troubling as it is – could well overstate the degree of improvement in the U.S. labor market."
    • Kocherlakota was the sole dissenter at the last FOMC meeting, when the group voted to taper further and signal a hike in the Fed Funds rate in H1 of 2015.
    • At this point December 2015 Eurodollar futures are pricing in just a bit more than three 25 basis point hikes in the Fed Funds rate between now and then. At the long end, the 10-year Treasury yield is off two basis points on the session to 2.68%.
    • TLT +0.25%, TBT -0.5%

  77. LOL….yes, I do believe we did.  Did ok as well on both sides of the trade.  Gotta honor the stops.


  78. Good point on Giga Fantasy Factory:

    Since late February, the buzz in the battery business has focused on Tesla Motors' (TSLA) audacious plan to build a lithium-ion battery gigafactory somewhere in the southwestern US.

    The scale and scope of the project are nothing short of gargantuan: a single factory that will integrate the entire lithium-ion battery supply chain; make more cells in a year than all the world's other lithium-ion battery factories combined; incorporate recycling technologies that don't even exist; and power it all with solar panels and wind turbines.

    It's the industrial equivalent of a Cecil B. DeMille epic with a hero of biblical proportions and a cast of thousands – at least until construction is completed and huge sections of the gigafactory commence "lights-out" operation as robots eliminate the need for human involvement.

    While Tesla's car factory in Freemont, California boasts the world's second largest footprint with 5.4 million square feet of mostly empty manufacturing space on a 210-acre site, the proposed gigafactory will need about 10 million square feet on a 500- to 1,000-acre site.

    If the gigafactory is built, Tesla's combined facilities will rival Ford Motor's (F)River Rouge Complex, which took a decade to build and eventually included 16 million square feet of power plants, steel mills and manufacturing facilities on a 1,000-acre site.

    You remember River Rouge, the sprawling factory complex in Dearborn, Michigan that gave Mr. Ford the confidence to decree, "Any customer can have a car painted any color that he wants so long as it is black."

    While Tesla has estimated a $5 billion cost for the gigafactory, giga-scale projects have a long and colorful history of giga-scale cost overruns. In its initial announcement, Tesla implied that industry partners including Panasonic (OTCPK:PCRFY) would gladly cough up $3 billion for the privilege of participating. Panasonic, however, is backing away from the project like a startled crawdad, which isn't all that surprising when you remember that Panasonic has already absorbed over $6 billion in impairment losses for obsolete lithium-ion battery factories it bought from Sanyo in 2009 and 2010.


  79. Pharm

    What’s your take on?

    Kindred Biosciences, Inc. (KIN) pets

    Exact Sciences Corporation (EXAS)  This new test, Cologuard, screening for colorectal cancer, 

    Thanks


  80. Wow, that's two days in a row that flew by – I love it when the markets are interesting.  

    Meanwhile, to summarize, weak bounces today and that's with an even weaker dollar – not a good sign.  AA tonight, Fed minutes tomorrow.  

    $102.50 failing on oil – You know I like that short!  


  81. you guys want to invest in the next big thing ?


  82. qc – KIN is …um, wombat…


  83. Wombat; Is there a potential downside to your strategy other than locking up capital for several weeks?  Seems you're likely to make a couple of percent while you wait for the role.  What am I missing?


  84. alpha /
    which one – oil or buying the patent ? : >


  85. I don't think hummer would mind if i repost this //

    The only way to know if oil is too high is to compare it to the other oil contracts.  If Dec14 month goes down and current month CL goes up — theres is a fake rally , and like a rubber band , it will swing back….  so what I did, I bought April CL and sold March CL for a net credit of -.89 and again at .75 …these are the futures, not the futures options… there is no time decay on futures, but they tend to get very close together near expiration, with next month even passing the expiring month in price. They got all the way down to -.14 on Fri. This has happened every month since Aug .  -- I am now buying May CL and selling March CL for a net credit of -1.00--   As March approaches expiration , Im hoping that everyone rolling out of March is rolling into April or May. It doesnt matter if CL goes up or down, as long as those March get dumped and the April or May get bought.  I expect April to pass March in price by .20 or better before the expiration, so that I close my position for another credit.   I will then sell April and buy May , but not for less than -.75 credit on each spread— 10 spreads is the same as 2 contracts short , margin wise— eventually , May and April prices will merge.


  86. KIN – too much for me right now.  PETX is another I am watching closely for a pull back.

    EXAS – going to be interesting to see how much they charge for it.  I would be conservative with them….


  87. ISRG?


  88. @wombat – do you remember how this spread behaved last month?

    It shot up over $1 towards the end.

    Last week was no compression whatsoever, quite the opposite.

    Last month it was loosing trade


  89. "Last week" – I mean expiration week of the last cycle


  90. In 2018 Albo… Not very brave! By then inflation will have eaten another 6-8% from where we stand now.


  91. Hypocrisy never killed anyone:

    http://talkingpointsmemo.com/news/obamacare-critics-koch-brothers-accepted-its-subsidies

    When Congress enacted the health care law in 2010, it appropriated $5 billion for the temporary reinsurance program. The goal was to subsidize employers' costs for workers who retire before they become eligible for Medicare. Hundreds of employers applied — many were corporations, cities and public universities — and virtually all the money was soon distributed.

    "If the Affordable Care Act is so awful," Reid asked, "why did Koch Industries use it to their advantage?"

    Federal records show that Koch Industries received $1.4 million in early retiree subsidies. That's considerably less than the sums many other employers received. A Koch Industries spokesman said he had no comment on Reid's latest criticisms.


  92. Not very indicative of a trend right now. Maybe the Fed can help tomorrow!


  93. lol370 / CL
    sorry – had to look back at my account statement.
    this is based on 10 contracts ( margin is less than holding 2 futures overnight )
    Mar/April +3K
    April/May +12K
    May/June ( just bought )

    I never wait until too late – when they're about .30 – .50 depending on where you came in.


  94. Anyone – I missed the webcast at 1PM today. Are they posted anywhere else on the site for replay?


  95. Took small positions in NAT and JAZZ today. 

    Details as always are posted in the excel file in the FCF Portfolio link at:

    http://www.valuesandvaluation.com/Stocks.html


  96. WSJ: Detroit nearing deal with bond insurers

    09:46 PM ET · AGO

    • An agreement between Detroit and bond insurers Assured Guaranty (AGO), Ambac (AMBC), and National Public Finance Guaranty (MBI) would be a critical step as the city winds its way through Chapter 9 bankruptcy. Detroit emergency manager Kevin Orr has deemed about $410M of previously sacrosanct general-obligation debt as unsecured, a decision bond insurers – who would be on the hook for millions if the paper sees just the 15% recovery Orr has proposed – are howling about.
    • “Time is growing shorter,” said Michigan Governor Rick Snyder in an interview today. “A lot of work is going on in the mediation process, with great urgency … [the] best case” is for parties to reach a settlement. A deal, says the Journal, could be struck as early as tomorrow.
    • Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, MUAC, MUAG, MUAH, GMMB, RVNU
    • Also watching with interest: Syncora Holdings (SYCRF).


  97. Apple roundup: iOS/Mac OS updates, baseband chips, search hiring

    07:13 PM ET · AAPL

    • 9to5 Mac, fairly accurate with Apple (AAPL) scoops, has provided a lengthy review of the features its sources suggest will be included in iOS 8 and Mac OS X 10.10 (Syrah).
    • In addition to its previously-reported Healthbook app (meant to work with multiple health sensors), iOS 8 is expected to feature an overhauled Maps app with better transit data, a simplified Notification Center, Wi-Fi CarPlay support, and better app-to-app communication. Voice-over-LTE support and a separate iTunes Radio app might also be in the cards.
    • OS X 10.10 is expected to feature a major Jony Ive-led design overhaul to go with under-the-hood improvements. Apple is reportedly testing Siri and AirDrop support, but 9to5 Mac hasn’t confirmed if those features will be ready in time.
    • Details on both operating systems are due at Apple’s June 2-6 WWDC conference.
    • Hit-and-miss Digitimes reports Apple “plans to form an R&D team to develop baseband processors for use in iPhones to be released in 2015.”
    • The iPhone and 4G iPad’s baseband chips are currently supplied by Qualcomm (QCOM), which dominates the 4G baseband market and has used a massive R&D budget to develop a lead in fields such as frequency band support and category 6 LTE (300Mbps peak speeds) integration.
    • Apple has hired Amazon search VP Benoit Dupin. He reportedly will work on improving Apple Maps’ search capabilities, which have received their share of criticism.


  98. Warren Buffett’s top dividend stocks offer ideas for a defensive posture

    06:46 PM ET · BRK.A

    • Utility stocks are the only group that’s been rising regularly in the recent selloff, but another group of stocks that might start to interest buyers: Warren Buffett’s top dividend yielding stocks from the Berkshire Hathaway (BRK.A, BRK.B) portfolio.
    • Coca-Cola (KO) is a long-time Berkshire holding, fitting with Buffett’s buy and hold forever strategy; the dividend yields 3.15%.
    • Procter & Gamble (PG) is a long-time holding; it just announced another 7% dividend hike and yields 3.18%.
    • Wells Fargo (WFC) is Buffett’s favorite bank and is the largest position in the Berkshire portfolio; while it yields only ~2.4% now, it telegraphed a quarterly dividend raise to $0.35/share for a new yield of 2.87%.
    • Wal-Mart (WMT) has grown to a stake of nearly 50M shares, and it raised its quarterly payout to $0.48/share, generating a new yield of 2.45%.
    • Buffett owns ~40M shares of GM, where the dividend is relatively new but the drop in the stock price now has its yield just above 3.5%.
    • GE was added as a larger stake after Berkshire’s warrant conversions, but the position is still worth only ~$250M; the dividend yields ~3.4%.
    • Buffett still owns 11M shares of ConocoPhillips (COP; 3.94% yield) but has moved more cash into rival Exxon Mobil (XOM; 2.7% yield).


  99. SAP making core apps available via cloud subscriptions

    06:27 PM ET · SAP

    • SAP‘s Business Suite, which includes the software giant’s mainstay ERP apps, will soon be available via cloud subscriptions. The apps will be offered through SAP’s Hana Cloud platform (launched last year), which already runs a slew of SAP and 3rd-party apps on top of the company’s Hana in-memory database.
    • In addition to ERP apps, Business Suite features CRM and supply-chain management apps. Whereas many enterprises have embraced cloud CRM solutions, they’ve generally preferred to keep mission-critical ERP apps onsite.
    • Nonetheless, NetSuite (N) has had some success selling its cloud ERP solution to mid-sized businesses, and Workday (WDAY) has reeled in enterprise buyers for its cloud financials software (different from an end-to-end ERP suite).
    • Aided by the Ariba acquisition, SAP’s cloud subscription/support revenue rose 121% in 2013 to €758M; all other software sales rose only 3% to €4.52B. The company is aiming for €3B-€3.5B in total 2017 cloud-related revenue.


  100. Alibaba founder, partners spending $1.05B on stake in TV firm

    05:55 PM ET · ABABA

    • An investment group led by Alibaba (ABABA) founder Jack Ma is buying a 20% stake in Chinese TV network owner Wasu Media for RMB6.54B ($1.05B).
    • Alibaba will help finance the deal with a loan, and will also partner with Wasu to develop Internet TV services and other Web content.
    • Last month, the Chinese e-commerce giant spent $805M to buy a 60% stake in film/TV drama producer ChinaVision Media, as it tries to play catch-up in a Chinese online video market led by Youku, Baidu, Sohu, and Tencent.


  101. State sides with Duke Energy in appeal of coal ash ruling

    05:48 PM ET · DUK

    • North Carolina environmental regulators join with Duke Energy (DUK) in appealing a judge’s ruling on cleaning up groundwater pollution leeching from the company’s coal ash dumps, as the Environmental Management Commission and DUK contend North Carolina law does not give the state the authority to order an immediate cleanup.
    • Environmentalists say the decision to file an appeal directly conflicts with public statements from Gov. Pat McCrory – who worked for DUK for 28 years before retiring to run for governor – suggesting his administration is getting tough with the company after a Feb. 2 coal ash spill that coated 70 miles of the Dan River.


  102. Failure to lift U.S. oil export ban may cause big drilling drop, Pioneer CEO says

    05:36 PM ET · PXD

    • Failure to allow U.S. crude oil exports could result in a big drop in the U.S. drilling rig market, Pioneer Natural Resources (PXD) CEO Scott Sheffield says.
    • The CEO also says a predicted oversupply of crude oil from the sharp and continuing production rise from prolific shale and unconventional basins could also result in a more than $30/bbl price differential for U.S. crudes to Brent.
    • The rig count would drop quickly if WTI, which now hovers near $100/bbl, were to drop to $70, Sheffield says; a rig drop might start with marginal plays, but “eventually every play” would shut.


  103. Reuters: GM to launch cheaper 2016 Volt

    05:05 PM ET · GM

    • Citing auto supplier sources, Reuters reports GM will offer two 2016 Chevy Volt models, with one of them being “a lower-priced model with a smaller battery pack and shorter driving range.”
    • GM is said to be aiming for a price point “just over” $30K for the cheaper model, and expects a range of less than 300 miles. The regular model “won’t deviate dramatically” from the current $35K version.
    • Also: The 2016 Volt will reportedly “share its underpinnings with the next-generation Chevrolet Cruze.”
    • With GM having only sold 58.2K Volts in 39 months, the company is hungry for a sales fix. The WSJ reported yesterday the auto giant plans to invest a fresh $450M in development and manufacturing for the Volt and its Cadillac ELR hybrids.


  104. Alcoa +2.5% as earnings top consensus, sees bullish global aerospace market

    04:58 PM ET · AA

    • Alcoa (AA) +2.5% AH after Q1 earnings manage to top Wall Street’s modest expectations; adjusted EPS of $0.09 topped estimates but fell short of $0.11 in the year-ago quarter on revenue of $5.45B, below last year’s $5.83B.
    • AA’s engineered products and solutions unit, which makes fasteners, truck wheels and parts for jet engines, posted a 9% Y/Y increase in operating income to $189M due to higher volumes for aerospace and commercial transportation.
    • The primary metals division, which makes raw aluminum, reported an operating loss of $15M vs. a $39M profit a year earlier.
    • Sees 8%-9% growth in the global aerospace sector, up from its earlier 7%-8% target, on strong demand for both large commercial aircraft and regional jets, as well as the business jet market.
    • Continues to project 7% global aluminum demand growth in 2014.


  105. Intuitive Surgical -8.1% AH on Q1 warning

    04:57 PM ET · ISRG

    • Intuitive Surgical (ISRG) expects Q1 revenue of $465M, -24% Y/Y and well below a $537.9M consensus. The company partly blames “a $26 million deferral associated with a customer trade-out program for the newly launched da Vinci Xi Surgical System.”
    • Intuitive is also taking a $67M pre-tax charge for “estimated costs of settling a number of product liability legal claims against the Company.”
    • Q1 accessories revenue is expected to fall 2% Y/Y to $255M. Da Vinci systems revenue is expected to fall 59% to $106M. Service revenue is expected to rise 11% to $104M.
    • 87 da Vinci systems were shipped in Q1 (45 in the U.S.), down from 164 a year ago (115 in the U.S.).
    • Full Q1 results are due on April 22.


  106. New rules forces largest banks to hold another $68B in capital

    04:43 PM ET · BK

    • Finalizing the criteria on the eight largest banks’ leverage ratios – a minimum 5% at the holding company level and 6% at the bank subsidiary level – U.S. regulators impose a far tougher standard than international norms of 3%.
    • The eight affected: BK, BAC, C, GS, JPM, MS, STT, WFC.
    • The regulators at work were the Fed, the FDIC, and the OCC, and the Fed’s Dan Tarullo indicates he wants to go further, signaling the central bank may boost the risk-based capital surcharge to a higher level than the international standard. The most to lose in this scenario would be investment banks like Goldman and Morgan Stanley who don’t have the deposit bases of their retail brethren.
    • Banks have until January 1, 2018 to comply with the new rule.
    • Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC


  107. Intel shutting down Costa Rican facility, laying off 1.5K workers

    04:37 PM ET · INTC

    • Intel’s (INTC) Costa Rican chip assembly/test facility will be shut down and consolidated into the company’s other global operations. Intel will continue employing 1K workers within the country.
    • Intel, which had 108K employees at the end of 2013, announced plans to lay off 5K workers in January. It has also stalled the opening of a cutting-edge Arizona fab (meant to product 14nm CPUs) due to soft PC demand.


  108. Risk on: Tech momentum stocks rebound

    04:00 PM ET · LNKD

    • Smart bargain hunting or catching a falling knife? After being bludgeoned almost ceaselessly over the last couple of weeks, many high-beta tech stocks are closing the day with sizable gains.
    • The rebound comes on a day when hedge fund Coatue Management announced plans to return over $2B to investors following a 9% March decline caused by tech stock losses. It also comes as several tech giants, including Apple, Microsoft, H-P, and IBM, finish the day near breakeven, or with modest losses.
    • Leading U.S. Internet gainers: LNKD +6.2%. P +6%. ZU +5%. SALE +7.2%. SSTK +6%. AOL +4.6%.
    • Chinese Internet gainers: EJ +9.1%. WBAI +8.9%. QIHU +7.9%. ATHM +8.1%. YY +6.8%. SFUN +8.7%. GOMO +9.8%. Ctrip and Qunar were among the sector’s biggest gainers following M&A rumors.
    • Others: FSLR +7%. NMBL +6.2%. NPTN +5.9%. PANW +5.5%. EGHT +5.4%. RFMD +4.9%. QIWI +4.9%. CRUS +4.3%. RALY +5.5%.


  109. Steel stocks rise as Cowen sees rebound in fundamentals gaining steam

    03:38 PM ET · SLX

    • Steel companies (SLX +1.4%) are higher after Cowen analyst Anthony Rizzuto says improving steel market fundamentals are likely to provide a catalyst for steel stocks to rise.
    • With Q1′s bad weather now finished, the domestic steel market appears to be tightening and sentiment improving, Rizzuto says, expecting investors to focus more on the outlook for the remainder of 2014 than on Q1 results.
    • The firm rates US Steel (X +3.1%), ArcelorMittal (MT +2.5%) and Reliance Steel (RS +0.3%) at Outperform; AK Steel (AKS +5.9%), Nucor (NUE +1.7%) and Steel Dynamics (STLD +1.3%) are Market Perform.


  110. Barclays cuts targets for offshore drillers, sees potential 40% downside

    02:38 PM ET · ATW

    • Offshore drillers Atwood Oceanics (ATW +0.5%), Diamond Offshore (DO +2.4%), Rowan (RDC +0.9%), Ensco (ESV +0.8%) and Transocean (RIG +1.5%) are higher today even as Barclays cuts its price targets on the stocks.
    • The firm thinks near-term risk is skewed to the downside following a series of negative fleet status reports from the offshore drillers recently and concern for dayrate pressure in most offshore markets; if conditions deteriorate further, the firm would expect underlying asset values to decline further (NAVs declined 16%-plus following the financial crisis and 8% after Macondo), suggesting potential 40% downside before ultimate NAV support takes hold.


  111. Twitter officially unveils new profile pages, adds filtering options

    02:19 PM ET · TWTR

    • “The grand @twitter quest to be Facebook is finally complete,” quips Om Malik in response to Twitter’s (TWTR -0.8%) official unveiling of a revamped, image-heavy, profile page design (in testing for months) that bears a strong resemblance to Facebook’s Timeline pages.
    • The new profile page, which will be rolled out to all users in the coming weeks, will automatically emphasize tweets that have received more engagement, and allows users to pin tweets to the top of their pages. They’ll also be able to filter 3rd-party profile pages to only show tweets with photos, or exclude replies.
    • Winning over consumers comfortable with Facebook but uneasy with Twitter’s traditional UI/Timeline view has become a priority for the microblogging giant as it contends with slowing user growth. Twitter has already added conversation threads to its Timelines, and is experimenting with replacing its “Retweet” feature with a similar feature called “Share.”
    • Many of the respondents to a Deutsche survey of ex-Twitter users said they’d be motivated to return if there were better sorting/filtering tools, if more friends joined, or if there was more photo/video-sharing.
    • Shares are missing out on a strong Internet stock rally.


  112. Bank estimates cut at Sterne Agee

    01:34 PM ET · BAC

    • Growth over the last several quarters has been between 15-20%, says the team, but a major slowdown to a decline of 3-5% in now expected in Q1 (results begin coming in this week). The reasons are the usual suspects: Weak mortgage banking, weak capital markets, and legal and regulatory issues that are going nowhere.
    • Among the banks whose estimates are cut is Bank of America (BAC), now seen earning just $0.02 per share in Q1 from $0.30 previously. For all 2014, EPS should be $0.98, down from $1.06 originally forecast.
    • Other cuts of note: JPMorgan (JPM) now expected to earn $1.30 in Q1 from $1.36. U.S. Bancorp (USB) at $0.72 vs. $0.75. First Horizon (FHN) $0.13 vs. $0.16, and CVB Financial (CVBF) $0.23 vs. $0.24.
    • Having its EPS estimate boosted is Wells Fargo (WFC) to $0.94 from $0.90.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ


  113. WhatsApp launches prepaid service; Facebook’s Indian users top 100M

    01:17 PM ET · FB

    • WhatsApp (FB +2.8%) is partnering with German carrier E-Plus to launch a €10 ($14) prepaid SIM card that provides unlimited access to its mobile messaging services (no data charges apply) to go with regular voice/SMS/data services. Even after the SIM credit is used up, WhatsApp remains available.
    • Notably, the SIM card is provided under WhatsApp’s brand, effectively making the startup an MVNO. With an estimated 90% of German smartphone users having already installed WhatsApp, there’s a large installed base to sell to.
    • WhatsApp, used as an SMS replacement by a huge chunk of its 465M+ global MAUs, already has deals with 50+ carriers. Many of those deals, such as one with India’s Reliance, provide unlimited WhatsApp usage for a small monthly fee. Facebook proper is looking to strike deals that provide free/subsidized access to its core services; the carrier response has been mixed.
    • Meanwhile, a Facebook exec has told the Economic Times his company’s Indian MAU base has topped 100M. That makes India (population 1.24B) Facebook’s second-biggest market after the U.S. (182M MAUs). Brazil is #3 (83M), and Indonesia #4 (65M).
    • Globally, Facebook had 1.23B MAUs at the end of 2013. Since then, the company’s mobile MAU base has surpassed 1B.


  114. What’s left for Citi after $1.125B mortgage settlement

    01:07 PM ET · C

    • Citigroup’s (C -0.1%) “legal costs will remain elevated” says KBW’s Fred Cannon, noting last night’s settlement covering $59.4B in residential MBS “explicitly excluded” $24.6B issued by CitiMortgage. Cannon also notes the agreement does not release investor claims related to misrepresentations in the offering documents.
    • Morgan Stanley’s Betsy Graseck notes another $4B in paper tied to Citi’s Securities and Banking division could be an issue as well, but believes any future settlements will be as cheap as last night’s – 1.9 cents on the dollar, according to her. At that rate, future deals would cost Citi $542M, an amount Graseck believes the bank has already reserved for.


  115. SunEdison grabs another $150M in solar project financing

    12:39 PM ET · SUNE

    • SunEdison (SUNE +1%) has closed the first $150M from a $300M, 3-year, credit facility provided by Deutsche to support acquiring and building U.S./Canadian solar projects.
    • The company notes it has used $1.2B in funds from a prior facility to finance 325MW worth of projects. Last week, it obtained $250M in financing from Goldman for its YieldCo solar project spinoff.


  116. What Amazon didn’t say about streaming data

    12:37 PM ET · AMZN

    • Amazon (AMZN +3%) made a big deal earlier today about growing its number of video streams at a rate fast enough to surpass Hulu and Apple over the last year, but didn’t say much about Netflix (NFLX +3.5%) in its press release.
    • The same streaming data from Qwilt cited by Amazon shows that Netflix held 57.5% of the video streaming market in March, compared to Amazon’s 3% share.


  117. Analysis: Weak sales trends for Ruby Tuesday

    11:47 AM ET · RT

    • Wunderlich Securities reduces its estimates for Ruby Tuesday’s (RT +1.3%) FQ3 same-store sales due to the chain’s exposure to weather-impacted regions.
    • The firm is also trimming FQ4 SSS numbers on concerns of heightened competition in the sector.
    • Shares are rated Hold with a lowered price target of $6.00.


  118. Fine dining traffic in recovery

    11:36 AM ET · MW

    • Visits to fine dining establishments rose 5% in 2013 to make up a little ground from the sharp fall following the 2008 market swoon.
    • Traffic for the segment outpaced the general restaurant industry which showed flat results.
    • Perhaps of interest to suit sellers (MW, JOSB, DXLG), one of the ways fine dining operators (DFRG, RUTH, BLMN) noted that they boosted traffic was by adopting looser dress codes.


  119. Amazon/eBay’s ChannelAdvisor growth picks up; Google search improves

    11:34 AM ET · ECOM

    • Aided by better weather, ChannelAdvisor (ECOM +4.2%) clients saw a 26.2% Y/Y increase in their Amazon (AMZN +3%) same-store sales in March, up from 23% in February and 14% in January.
    • eBay (EBAY +3.1%) same-store sales rose 17.8% in March vs. 15% in February and 12.7% in January. Fixed-price sales +21.5%, auctions -10%, Motors +19.7%.
    • Search ad-driven same-store sales, dominated by traffic from Google’s (GOOG +3%) AdWords, rose 11.2% vs. 4.3% in February and 10.3% in January. Clicks were flat due to a shift towards Google’s Product Listing Ads (PLAs). Ad prices fell 7% (soft smartphone ad prices are a likely factor), click rates rose 2%, and average order value rose 5%.
    • PLA-driven same-store sales rose 34.5%. Though that’s down from February’s 48% and January’s 62.8%, ChannelAdvisor chalks it up to “a normal aging of the program,” given PLAs only launched in late 2012.
    • Amazon, eBay, and Google are all posting solid gains amid a broader rebound in Internet stocks.


  120. Cheniere Energy target raised to $78 at Morgan Stanley after analyst day

    11:11 AM ET · LNG

    • Cheniere Energy (LNG +0.4%) moves modestly higher after Morgan Stanley reiterates a positive stance on the shares following LNG’s analyst day, feeling more constructive on the company’s ability to deliver on nine liquefaction trains.
    • The firm sees unappreciated upside in LNG’s gas marketing with the news of an additional sale agreement for the planned Corpus Christi export facility; the first train is fully contracted and LNG expects the second train to complete contracting over the next few months.
    • Stanley lifts its price target to $78 from $60; largely unnoticed last Friday, BTIG raised its target to a new Street-high $80.


  121. Wunderlich downgrades Cisco, worried about SDN/NFV alternatives

    10:46 AM ET · CSCO

    • “We came away from industry interviews in recent weeks with the view that the market has less interest in the Cisco (CSCO +0.1%) product suite than in past transitions,” writes Wunderlich’s Matthew S. Robinson, downgrading to Hold. “We see the range of alternatives for network automation/software defined networking (SDN), network function virtualization (NFV), and cloud services as dilutive to the Cisco installed base upgrade opportunity.”
    • Robinson also argues there’s “more opportunity” in small cap/high-growth names, given their recent selloff. His PT has been lowered by $1 to $24.
    • Plenty of other analysts have raised SDN-related concerns for Cisco. Some have also brought up NFV, which aims to do for higher-level networking tasks (security, load balancing, etc.) what SDN tries to do for switching/routing (allow proprietary systems to be replaced with commodity hardware).
    • Cisco recently took another step towards fleshing out its SDN vision by unveiling its OpFlex protocol for interactions between SDN controllers and the hardware they manage. The company argues OpFlex is superior to the widely-embraced OpenFlow on account of supporting a greater level of networking intelligence, and preventing controllers from being a single point of failure.
    • Much like its ACI/Insieme platform, OpFlex drives home Cisco’s efforts to keep customers from adopting rival SDN solutions by pitching an alternative that provides a rich feature set and deep network visibility, but is also linked to Cisco’s proprietary hardware.
    • Shares have turned positive after opening lower.


  122. Coal names higher as Consol raises coal production outlook

    10:42 AM ET · CNX

    • Consol Energy’s (CNX +3.6%) upgraded coal outlook is lifting coal names higher across the board: ANR +9.2%, WLT +7.4%, ACI +5.6%, YZC +5.2%, BTU +3.8%, WLB +3.1%, OXF +3%, CLD +2%, KOL +1.9%.
    • Stifel raises its CNX target price to $46 from $45, reflecting the strong market for northern Appalachian thermal coal, offsetting a weaker pricing and volume outlook for met coal (Briefing.com).


  123. Plug Power +3% as CEO Marsh says it is exploring new markets

    10:17 AM ET · PLUG

    • Plug Power (PLUG +3%) CEO Andrew Marsh tells Bloomberg the company is discussing plans to expand fuel cell usage into different areas, such as airport support vehicles and refrigerated tucks, while expanding its presence with trucks and forklifts.
    • Growing demand for cleaner forklifts has helped boost PLUG shares more than 1,000% in the past six months, and the company expects orders to almost quadruple this year to ~$150M, but Marsh says forklifts are only a niche to sustain the company; now the CEO wants to expand into new areas where fuel cells can compete with electricity from fossil fuels.
    • Other alternative energy names are getting a moderate lift: BLDP +2.4%, FCEL +1.1%.


  124. JOLTS

    10:02 AM ET


  125. Medtronic device helps paraplegics regain voluntary movement in legs

    09:57 AM ET · MDT

    • Medtronic (MDT) spinal-cord stimulators implanted into the backs of three paraplegic patients helped them wiggle their toes and ankles, flex their legs and even stand independently for moments at a time.
    • The treatment worked in two patients who were previously unable to move or feel their lower bodies.
    • Researchers now intend to conduct a similar study with eight more patients, using a new device with more flexibility.


  126. Gazprom pushes ahead with new pipeline, despite Ukraine standoff

    09:44 AM ET · OGZPY

    • Gazprom (OGZPY) wants to push ahead with plans to build a €16B ($22B) pipeline to send gas from Russia across the Black Sea and into Italy – bypassing Ukraine, through which ~50% of Europe-bound Russian gas flows – but in the wake of Russia’s annexation of Crimea, the fate of the project is now in limbo.
    • Absent from today’s talks between Gazprom and EU bureaucrats were executives from Gazprom’s partners – Italy’s Eni (E), Electricité de France (ECIFF) and Germany’s Wintershall.
    • Despite the uncertainty, Gazprom, which holds a 50% stake in the project, is pressing ahead with construction, laying pipes in Russia, Bulgaria and Serbia in the hope that the pipeline will be operational by 2015.


  127. American Airlines Group reports on March traffic

    09:32 AM ET · AAL

    • American Airlines Group (AAL) estimates Q1 operating margin was between 5% and 7% higher, down from its prior forecast for a 6% to 8% gain.
    • The company expects passenger revenue per available seat mile to show a 2.5% to 3.5% improvement for the quarter.
    • Weather smacked Q1 revenue by close to $115M and lowered operating profit by approximately $60M.


  128. Report: Amazon Prime streams tops Apple and Hulu

    09:16 AM ET · AMZN

    • Amazon (AMZN) announces that video streams on Prime Instant Video almost tripled last year.
    • Data from tracking firm Qwilt indicates that streaming video usage for Amazon surpassed both Apple and Hulu for the period.
    • AMZN +1.4% premarket


  129. More on Ford’s sales strength in China

    09:07 AM ET · F

    • Ford (F) brand sales in China rose 57% in Q1 led by strong demand for the Explorer, Edge and Focus models.
    • March is the first time ever that the automaker sold over 100K vehicles in China in a month.
    • Ford is planning on making a big splash at the Beijing Auto Show later this month with new model introductions for the local market.
    • Previous: Ford China sales +28%
    • F +0.6% premarket


  130. Redbook Chain Store Sales

    08:55 AM ET

    • Redbook Chain Store Sales: +2.9%Y/Y vs. +2.3% last week.
    • Mild weather and Pent-up demand for seasonal goods led to 2.9% Y/Y growth.
    • The market expects growth of 3.4% Y/Y.


  131. Captain America storms China

    08:41 AM ET · RLD

    • Captain America: The Winter Soldier brought in $39.2M during its opening three days in China to blow past all other films for the period.
    • The box office haul was boosted with 100% of the screening in China in 3D (RLD, IMAX).
    • The film has already earned over $300M globally for Disney (DIS) with its launch well-timed to capture younger audiences.
    • Previous: Captain America sequel timed to challenge Superman/Batman movie.


  132. Comcast and Time Warner Cable set for Senate grilling

    08:35 AM ET · CMCSA

    • Execs with Comcast (CMCSA) and Time Warner Cable (TWC) will answer questions from the Senate Judiciary Committee tomorrow in what is expected to be some testy discussion.
    • Some of the panel witnesses are expected to testify on the harmful impact for consumers of the Comcast-TWC combination.
    • What to watch: Senators may try to get pledges or concessions out of Comcast on pricing for broadband services with the company aiming to control roughly a third of the market.


  133. ICSC Retail Sales

    08:31 AM ET

    • More on ICSC Retail Sales: Same store sales rose sharply 1.5% W/W due to Easter.
    • 1.5% Y/Y sales were softer, considering 4-week average of 1.3% Y/Y being lowest rate of the recovery.


  134. Buy the dip in Genworth says Compass Point

    08:11 AM ET · GNW

    • An investor lawsuit combined with a broad market decline has created a buying opportunity in Genworth Financial (GNW), says analyst Ken Billingsley. The upside catalyst is the IPO of Genworth’s Australian mortgage insurance subsidiary.
    • Genworth has filed an 8-K and begun a preliminary “road show” for the unit – customary practice in Oz, but this doesn’t mean a final decision has been made for the IPO.
    • If the IPO does happen, says Billingsley, look for the initiation of a dividend this summer somewhere in the area of 50-70% of net profit after tax.


  135. Taco Bell on to phase two in breakfast blitz

    08:00 AM ET · YUM

    • Execs with Taco Bell (YUM) say the company is on to phase two with a marketing campaign designed to promote its new breakfast menu.
    • The next round of TV commercial will position the food chain as the “next generation” for breakfast after the first spots took dead aim at McDonald’s.
    • The company says response for its A.M. Crunchwrap, Waffle Taco, and Cinnabon Delights items has been strong. New breakfast products still to debut at Taco Bell include yoguer parfait, oatmeal, and premium coffee drinks.
    • Fast-food breakfast war timeline


  136. Three breakfast reads

    08:00 AM ET


  137. ICSC Retail Store Sales

    07:53 AM ET


  138. James River Coal -52.5% after bankruptcy filing

    07:42 AM ET · JRCC

    • James River Coal (JRCC) -52.5% premarket after filing for Chapter 11 bankruptcy late yesterday afternoon, listing $818.7M in debt.
    • “The writing has been on the wall that if prices don’t pick up this could happen,” says a Raymond James analyst, as the benchmark metallurgical coal contract for Q2 has dropped to $120/metric ton, the lowest price in six years.
    • JRCC, which produced 9.5M tons of coal in 2012, said it plans to keep operating as it reorganizes; one or more portions of the company could be sold, CEO Peter Socha said.


  139. James River – Does that create any particular incentive to pick up some BTU?  Have none right now.


  140. Good morning!  

    Very nice moves in oil this morning, all the way down to $102.02 and now back at $102.50 but there's a lot of news spin backing it up:

    Oil Futures Vault on Lower Production Forecasts

    Oils holds steady on renewed Ukraine tension

    BDlive-4 hours agoShare
    US crude inventories rose by 7.1-million barrels in the week to April 4, data from industry group the American Petroleum Institute showed, …
     
    WTI Oil Climbs to One-Month High on Cushing Supply; Brent Gains
    Businessweek-14 hours ago

    Stockpiles data

    US crude inventories rose by 7.1-million barrels in the week to April 4, data from industry group the American Petroleum Institute showed, compared with analysts’ expectations for an increase of 1.3-million barrels.

    But a steeper than expected fall in petrol stocks is setting a floor under the US oil benchmark as the drawdown is adding to evidence of a broad economic recovery and robust demand as summer driving season gets under way.

    US petrol stocks fell by 3.6-million barrels, compared with expectations of a 700,000 barrel decline.

    The previous week ended March 28, US crude inventories fell by 2.4-million barrels as shown by the EIA, ending 11 weeks of consecutive increases, Phillip Futures analysts said in a note. "The contrasting results may trigger a swing in market sentiment, hence weighing on WTI (West Texas Intermediate) crude prices."

    Investors are awaiting data from the EIA due later in the day as a further gauge of the country’s demand outlook.

    So now expectations are set for a big build in oil at 10:30, so it will be hard to disappoint them.  Very tight stops over the $102.50 line!  

    Meanwhile, the Dollar is laying around at 79.89, gold is $1,309, silver $19.90, copper $3.034, nat gas $3.54 and gasoline $2.98.  

    Our Futures are up about 0.2% with Asia up except Japan but /NKD is right where it was during our session, the drop in the Nikkei (2%) just reflects what already happened so now it's time to take the money on our EWJ puts.  

    Europe had a very enthusiastic open and is flattening out, up 0.5% into lunch.  There's not much news so I assume everyone is expecting nice notes in the Fed minutes. 

    • Nikkei Slips; Rest of Asia Gains

      Japanese stocks fell as Tokyo reacted to a sharply stronger yen. Meanwhile an overnight pickup on Wall Street buoyed the rest of Asia, with Australian stocks hitting their highest level since June 2008.

    • Global Growth Threatened in $623 Trillion Derivatives OverhaulGlobal regulators’ failure to align efforts to reform the $693 trillion derivatives market threatens to undermine economic growth, according to the International Swaps & Derivatives Association. Investors are struggling to adapt to regional differences to changes agreed by the Group of 20 nations as the industry meets for its annual conference in Munich today. In the U.S. traders have been reporting derivatives transactions to data repositories and have been required to have central clearinghouses back their contracts since last year, while European regulators are still defining the requirements.
    • BOJ Beat: Calibrating Kuroda's Optimism: Easing Still Possible

      Bank of Japan Gov. Haruhiko Kuroda sent the yen higher and the Nikkei Stock Average lower with a news conference Tuesday where his upbeat economic assessment was widely interpreted as an attempt to dampen market expectations of imminent new stimulus. The sharp reaction appears to have caught the BOJ by surprise.

    Ukraine Standoff Continues

    Negotiations continued in an attempt to end the occupation of a state security building by pro-Kremlin activists who security officials had accused of taking dozens hostage and wiring the building with explosives.

    • Russian Capital Outflow Highest Since 2008

      Russia's net capital outflow in the first quarter reached its highest level since late 2008 but was below initial expectations because the central bank didn't include key items.

    Toyota Recalls 6.4 Million Vehicles

    Toyota issued five recalls affecting millions of vehicles, in another blow to the world's largest auto maker's reputation for quality control.


  141. Phil – Thanks for the /NKD call.  I've been short the future when it crossed below 15100 with a wide trailing stop.  I never would have made this trade without you're eye on it.  Gracias.


  142. OpenSSL security flaw.  This is the biggest I've seen in years.  Watch all those bank accounts you have.  Turn on two factor auth if you can too.

    http://www.huffingtonpost.com/2014/04/08/heartbleed-66-percent_n_5112793.html


  143. Big thing/Wombat – Penn really has too much free time…

    ISRG/Cdel – They had a bad Q, caused by the rollover to the new machine.  Good entry opportunity but let's see if the downgrade police go on the attack. 

    Good example of headline spin.   This is how they chase retailers out of perfectly good stocks so the big boys can snap them up.  Anyway, it's only down relative to the spike up on the announcement of the roll-out of the new machine that is causing the low sales of the old machine.  The average investor simply has no concept of, or patience for, the business cycle.  They don't understand the companies they invest in and simply react to whatever happens over a few days on the chart – it's ridiculous – though a Hell of an opportunity for the few people who are willing to look under the hood when these things happen.

    Note what I said to Brill when they popped the other day (patience works both ways):

    Submitted on 2014/04/03 at 10:44 am

    ISRG/Brill – Ouch!  Not the kind of stock you can not watch for two days!  In retrospect, why were you in such a hurry to close the trade when you had until January?  Surely you could have picked a day when you were able to complete the transaction properly while watching it?  As it stands, I'd say it's a valuable $1,300 lesson.  You could HOPE (not a valid investing strategy) for a pullback but over $540, you just have to get out before this becomes extremely painful.  You're not bearish on ISRG so adjusting to make a long-term bearish play just sets you up for more pain. 

    There was a fundamental change in the VALUE of the company as they were approved to put out a machine that more than doubles the types of procedures they can do.  More use of machines means more sales of consumables – all good for them.  ISRG has been between $500 and $600 based on the old machine between early 2012 and mid last year and, when they did fall, we were BUYBUYBUYing them under $400.  Now, back to "only" $530, I sure wouldn't short them, not even a covered short. 

    Our last trade on ISRG was back on 12/10, when suckers were selling:

    Our other new trade idea from the weekend post (so far, still not finished, but still playable) was 10 SSO March $92/97 bull call spreads at $3.20 ($3,200) offset by the sale of 5 ISRG April $300 puts, now $5, for a $2,500 credit for a net of $700 and an upside potential of $3,300 (471% on cash).  

    Maybe we'll get another entry opportunity this week. 

    Maryland/Albo, StJ – Very disappointing with that time-frame.  

    Big Chart – Anything down today will be really, really bad.  S&P bounced off the 50 dma on a weak Dollar – that's not very impressive.  Dow pretty much hit the 50 dma too and, of course Nas and RUT failed.  NYSE looking strongest and they are the broadest so watch that 10,500 line and we should make a bullish bet on the laggard (probably Nas) if the NYSE has an easy time getting back over 10,500.  

    Here's the replay link for yesterday's webcast.

    NAT/Bdon – they just did a pretty dilutive offering, don't you want to let the dust settle first?  

    BTU/ZZ – No because the reason JRCC is BK is because the industry sucks right now.  I like BTU to weather the storm and profit from fire sales of their competitors' assets over time but I wouldn't chase them 20% over our entry – it's going to be a rough ride.  


  144. Phil,

    There is some news of late that AAPL is concerned about formidable competition in the iphone space that will put pressure on margins.  Since the phone sales are 45% of AAPL revenue are you concerned that this may erode the stock price either in the short run (earnings on the 22nd) or over the next two years?  I'd kinda like to do a BCS on them but seem to have a knack for picking just the wrong time.