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Testy Tuesday – Tax Day Edition

Time to pay your taxes.

But, fortunately, it's still not time to pay the piper for all that money we're borrowing to goose the economy.  Well, goose may be too strong a term as 5 years and $5 Trillion Dollars into this mess, we're really only flatlined the GDP to where it was back in 2007.  

Did you get your $5,000,000,000,000 worth?  We know the top 0.01% sure did.  We've made the World's Billionaires alone $1.4Tn richer than they were in 2009 – and it only cost 140M working Americans $37,714 each!  That's how much $5Tn in additional debt has cost us – on top of the $2.5Tn we piled on fighting Iraq or Afghanistan for whatever reason it was we had to invade those guys. 

Billionaires

Don't worry, it's all fair, each one of those Billionaires also owes the same $37,714 as you do – they feel your pain!  Multiply that by 3.5 and that's your share of the National Debt, which is still growing by $500Bn a year, although that's 1/2 of how fast it was growing under Bush II.  And, of course, we're not even counting the Fed's $4Tn of additional debt – because we still get to pretend that will all work itself out in the end.  

Just like CHINA!!!  China's Central Bank has been trying to drain a little liquidity out of the system and it looks like that's already dropped GDP growth for the quarter down to 1.5%, nowhere near the 7.5% annual levels the Government was hoping for. That led Chinese stocks to fall about 1.5% this morning, led down by Financial and Commodity stocks.  That's the reaction to M2 (money supply) GROWING by 12.1% instead of the 13.3% it was growing a month earlier and despite $169Bn in loan growth.

FXI WEEKLY

“Investors are a bit worried because M2 is quite low,” Zhang Haidong, an analyst at Tebon Securities Co., said by phone in Shanghai. “New loans may be better than expected by a little, but it’s still not considered good data; we still think liquidity is very tight.”

At the same time as liquidity is drying up and the economy is slowing, a massive housing glut is pushing Chinese real estate pricing to the brink of collapse.  If real estate prices collapse, the Chinese banks that have Trillions in loans out on all these empty buildings are in DEEP TROUBLE.  Already, construction companies are being paid with unsold apartments – signs of a top if ever there was one!  Check out this picture – all the buildings on the right are unfinished in Yingkou:

Data in some of these smaller cities is scarce. But in 100 cities tracked by Nomura Holdings, 42% of those classified as Tier 3 and Tier 4 saw housing prices decline in March from February. Home construction in such cities is racing well ahead of population growth, says Beijing research firm Gavekal Dragonomics, as developers continue to build new projects without buyers.

The overall value of Chinese housing sold in the first two months of 2014 declined 5% from a year earlier, government statistics show. Private-sector data indicate the decline continued in March. The construction, sale and outfitting of apartments accounted for 23% of China's gross domestic product in 2013, that is up steeply from 10% in 2006 and is higher than American housing's share of GDP reached during the height of the U.S. housing boom in 2006, Moody's says.

The finances of some cities and developers are being affected. China's local governments depend on land sales to developers for about 40% of their revenue. Now those sales are bringing in less cash.  After the city of Fenghua in eastern China cut the price of land, developer Zhejiang Xingrun Real Estate Co.—which had incurred higher land costs—found it tough to sell apartments and make payments on its debt, which the city website put at nearly $600 million. Municipal officials say they are trying to stave off a bankruptcy by the developer that could tarnish the city's reputation. 

China PPIFurther weakness could mean trouble for construction companies and appliance and commodity producers. Furniture and appliance sales in China have been slowing along with the weaker pace of apartment sales. Also potentially affected are businesses that use real estate as collateral to get new loans; China's banks rely on property holdings as the main collateral securing loans.

We remain "Cashy and Cautious" as it's hard to imagine a China melt-down being ignored by the rest of the World.  With all the economic meddling by the Central Banksters, anything is possible but, as we keep showing you – there's plenty of ways to make good money with our sidelined cash.  Yesterday, for example, I noted we were shorting Oil Futures (/CL)  at $104 in our morning post.  

As you can see from the chart on the left, we got a nice dip to $103.50 (up $500 per contract) mid-day, followed by another entry opportunity in the afternoon and then an easy ride back down to $103 – for another $1,000 per contract gain.  Fun things to do with money when you are bored!  As I mentioned before, we also have USO and SCO option plays, of course, from our Member Chat Room - as longer-term bets that oil won't hold $100. 

What we care about today is whether the indexes hold our bounce lines (see yesterday's post for full explanation) and we predicted the weak bounce lines for the day would be Dow 16,120, S&P 1,832, Nasdaq 4,075, NYSE 10,350 and Russell 1,125 and, what we actually got was:  Dow 16,173, S&P 1,831, Nasdaq 4,023, NYSE 10,359 and Russell 1,115.  On the whole, not a fantastic showing.  

We'll be watching the S&P and NYSE very closely, as they are both right on their lines while the Russell and the Nasdaq, our usual leaders, still have a lot of work to do.  

Keep in mind that I talk about China, Japan, the EU, the Ukraine, Income Disparity, Money Supply, Deficits, etc. to keep the MACRO picture in focus – it's not stuff that's immediately actionable – just the undercurrent the short-term market has to swim against.  We strive to be patient investors and use those long-term developments to help us plant our trees for future growth – it also helps to keep us from being surprised when "suddenly" something blows up in the short-term.

Our LIVE Trading Webcast is today at 1pm (EST) – Join Us!  

 


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  1. Oil Lines

    R3 – 105.43
    R2 – 105
    R1 – 104.12
    PP – 103.68
    S1 – 102.81
    S2 – 102.37
    S3 – 101.50


  2. Quote of the day:

    Patrick O’Shaughnessy, “History teaches us that we should avoid lottery stocks like the plague.  Just like the actual lottery, the probabilities of a big payoff are just too low.”  


  3. Why monopoly is bad:

    http://www.ft.com/intl/cms/s/0/3052b4a6-c0d6-11e3-bd6b-00144feabdc0.html#axzz2yxThgLel

    Yet Comcast has won plaudits for saying it would divest 3m television subscribers to head off antitrust concerns. Whether that will be enough to stop it from charging monopoly prices for its TV programmes is of secondary importance. The internet is the prize.

    The public’s indifference to the rise of the internet barons is also assisted by lack of knowledge. Americans are rightly proud of the fact that the US invented the internet. Few know that it was developed largely with public money by the Pentagon – or that Google’s algorithmic search engine began with a grant from the National Science Foundation. It is a classic case of the public sector taking the risk while private operators reap the gains. Few Americans have experienced the fast internet services in places such as Stockholm and Seoul, where prices are a fraction of those in the US. When South Koreans visit the US, they joke about taking an “internet holiday”.

    US average speeds are as little as a tenth as fast as those in Tokyo and Singapore. Among developed economies, only Mexico and Chile are slower. Even Greeks get faster downloads.


  4. Good Morning!


  5. 4-7-14tax

    We spend 4.4% of our GDP on defense which is 2% over the world average. It's double what China spends. Only Russia spends as much and their budget is $90B, ours is $680B…

    People wonder why Germany has a balanced budget – they spend 1.4% of GDP on defense. If we spent 3% less on defense, we would also have a balanced budget. That would be $510B less on spending. And Germany collects over 40% of GDP on taxes, we collect 32% or so. That's another $1.3T difference for us. So close to $2T. We would not know what to do with the surplus – I guess a tax cut would be needed.


  6. /CL back to 103.63.  Is anyone still short from 104?  I've been out of the game, working our beach concession stand since thursday.


  7. Burrben where is that stand located!


  8. TSLA breaking $200

    ( good morning )


  9. It's in New Smyrna Beach, north of the 3rd Ave on-ramp.


  10. Good morning!  

    Another half-point bump puts us over those weak bounce levels so now we're on to looking for strong bounce lines at 16,240, 1,850, 4,150, 10,430 and 1,145.  If we're over the weak bounces at Dow 16,120, S&P 1,832, Nasdaq 4,075, NYSE 10,350 and Russell 1,125, then we can ASSUME that we're going to test strong and we can play those indexes bullish as long as 3 of 5 are over the line.  

    At the moment, I like /TF 1,120+ with a very tight stop below (it's below at the moment) and Dow 16,200 (/YM), if it crosses.  Should coincide with /NQ 3,500 and /ES 1,835 so those are our bullish marks (long the laggard, stop if 2 of 4 fail).  

    The Dollar is just under 80, over that line will pressure the indexes.  Oil is $103.70, coming around for another short at $104 and gold spiked all the way down to $1,272 but back to $1,293 already.  

    VIX is low (15.65) so no one is too worried and TLT steady at $110.40 but should go lower if we're going to be bullish.  


  11. We lost what we expected on the JNJ May $95 puts in the STP, now .55.  They beat and raised guidance so let's take the loss and move on.  


  12. Priorities/StJ – Very good point. 

    Oil/Burr – You're not supposed to ride it back up from $103 to $103.60!  At least check on the IPhone once in a while.  I'm still into shorting it over $103.50 in any case.  And what kind of concession?  

    TSLA $197! 

    None of the MoMos looking very strong.  If you want to play MoMos to bounce, try SOCL, which is down to $18 from $23 (22%).   The Sept $18 calls are just $1.65 and you can sell the $21s for $.55 fro net $1.10 and, if SOCL goes lower, you can then sell the $15 puts (now .60) for $1+ to pay for the spread.  


  13. Gold miners getting killed today it seems…


  14. BURRB LOOKS GREAT THERE!

     big reversal lower in india last night…china finished at lows down over 1%…russia creamed today…brazil hit


  15.  ukrainian troops storming an airfield right now…i assume its held by russians….cant keep up


  16. I am supposed to be in Russia in a month… So much can happen in the meantime!


  17. Russians/Angels – I believe the correct term is "Concerned Ukrainian Citizens".  wink

    Dollar moving down sharply to mask sell-off in broader market – be careful!  Obviously, longs didn't hold their lines so no bull plays until/unless we get back over.


  18. Phil –  I had no position, I was asking the general question if the "psw group" is still mentally short oil at 104.  I haven't had time to read all the posts, but tue/wed is my day's "off".  

    The concession sells all the standard beach stuff.  Food, drinks, desserts, and rents beach equipment.  Nice roi on the products we sell, but totally weather dependent.  I'm still getting a trading / stereo system setup in there.


  19.   ukraine saying russian 45th airborne in slavyansk
     

    9 killled in military operation in kramatorsk


  20. Wow.. what a turn here!  Holding XRT May 79 puts


  21. Nothing like a prospect for more international tension to kill a fake rally!


  22. Beach stuff/Burr – Fun!  Nice cash business.

    XRT/Louis – Don't get too excited, it can all change again 15 mins later.  

    I think the Russian stuff is keeping oil up and dollar is helping.  /NG flew back to $4.60+


  23. XRT – I know .. things can change,, sometimes in seconds .. but I like to wave a flag now and then when I can


  24. /NKD testing 14000


  25. Phil,

    Any trade on /NKD, go Long?


  26. Operations begin?!?! Oh @#$%!


    • Yellen Says More Capital 
      Would Help Big Banks

      Federal Reserve Chairwoman Janet Yellen says the largest and most complex financial institutions may be able to strengthen their balance sheets further by raising more capital than regulators have required to date. 8:48 AM

    Did you guys see this chart on the securities exams?  I got all 5 of these questions but check out how shockingly few answered each one correctly – very scary when you realize how many brokers fail it (you have to take it):  http://projects.wsj.com/quiz/?uid=financial-exams-quiz0408&type=flat

    /TF testing 1,100 again.  All red now, back at yesterday's lows.  Shouldn't Cramer come back on and take back everything he said about a bear trap? 

    /NKD/Jasu- You can play it for a bounce off 14,000 but I'd get the hell out if it fails, same for /TF at 1,100.


  27. Did you guys see this chart on the securities exams?  I got all 5 of these questions but check out how shockingly few answered each one correctly – very scary when you realize how many brokers fail it (you have to take it): 

    My Merrill Lynch broker asked if I could come in over lunch next week and chat with the FA's about index credit spreads.  I'm holding out for a reduction in my quarterly fee.  I'm planning to buy my own lunch next week.    


  28. Index spreads/Mjj – I'm not a big fan of paying fees on non-directional bets.  Seems like the main purpose of those is for your to give money to the broker over extended periods of time.    It's nothing you can't set up yourself with well-placed options.  

    Ouch, there goes 1,100 on /TF!    Watch /YM 16,000 – if that goes, big trouble.  

    XRT new lows.  TSLA $192!  

    NAHB Housing Market Index: 47 vs. consensus of 49.0; 46.0 prior (revised).

    Apr. Empire State Survey: +1.29 vs. +7.5 expected, +5.6 prior.

    Redbook Chain Store Sales: +2.6%Y/Y vs. +2.9% last week

    Food prices increased in March, according to the latest report from the Bureau of Labor Statistics.

    The category showed a 0.4% M/M and 1.7% Y/Y gain during the month to beat expectations.

    • The Netflix (NFLX -2%) service is down this morning in a broad region, according to website monitoring services.
    • Shares of the company are also under-performing in early action.

  29. Nice tag and rejection at $104 on /CL again, now $103.72 (so stop is $103.75).  


  30. f*&NG Putin – anyone have his number ? He's screwing up our /CL spreads /


  31. Gold back over $1,300 already, silver lagging at $19.52 – it's a dangerous long but a stop at $19.50 or if gold fails $1,300 could be very rewarding at $50 per penny, per contract.  


  32. Wombat, did you lighten up on those yet?  I'm out with minimal profit, might just stick with shorting stuff for the time being.  I think they'll probably work most times but I do get stressed watching them.


  33. TNA April (Thursday) $65 calls not bad at $1.75 if you want to play for a bounce off 1,100 – low was $1.52 so far so a stop at $1.50 is low risk against big possible reward (TNA down $2 for the day at $65).


  34. pwright
    no, just letting them gain value. I'll pull the plug tomorrow – shame about all this Ukraine crap – bad timing.
    I follow some of Phils calls on certain futures I'm comfortable with, but this method has become my main focus.
    I'm using reasonable amounts, scaling in. So, for this month I'll cash maybe 8K. It's much easier for me and less stressful than individual hit-and-run plays. ( As I watch my NKD position : > )
     


  35. Drybulk shipping rates decline for a 16th consecutive session.


  36. Wombat

    It does seem like an interesting play; I may watch from the sidelines for next 1-2 months, but if I start to feel more comfortable with the pattern, I may incorporate it.  I think there are limits to my understanding of the oil markets (which is why I better watch for a few rounds), but at least in my own head this trade makes sense.  Here's hoping you'll touch $.50 or below :)


  37. Continue to add to QUIK position.


  38. pwright
    sure, if we close at the predicted .55, .45 and .35, – it'll be a 12K play for me. I'm learning as well ( the U crisis ) isn't helping. If you'd like to take it off-line just email me through wombat creative dot com.


  39. this will be the 9th try for /NKD at 14000


  40. Not very bouncy today.  

    /NKD below 14,000 – ugly stuff.  Good luck Wombat. 

    Dry Rates/Albo – That's a big deal, clear indicator that demand, Globally, is simply not there.  

    • Amazon's (AMZN -1.9%) rumored smartphone will have a 4.7" display sporting a modest 720p resolution (most high-end Android phones are now at 1080p), sources tell BGR, which has published photos said to show a prototype.
    • The device also reportedly features Qualcomm's (QCOM +0.2%) Snapdragon processor (no model # is given), 2GB of RAM, and a 13MP rear camera. Qualcomm is already the CPU provider for the latest Kindle Fire tablets, and the just-launched Fire TV set-top.
    • BGR joins the WSJ in reporting the phone will have a 3D display enabled by four front-facing cameras (one at each corner) to complement regular rear and front cameras. The cameras allow Amazon to enable 3D viewing without the parallax barrier needed by other glasses-free solutions (hurts image quality) .
    • With the 3D display Amazon's main point of differentiation – Google-backed Android phones will have a major app/services ecosystem edge – Amazon is reportedly supporting 3D viewing "in as many areas as possible," including wallpapers, app icons, its maps app, and its media stores.
    • The WSJ reported Amazon plans to ship its phone in September after unveiling it in June.Re/code followed up by reporting a low-end phone is also on tap, and that Amazon is working hard to woo Android developers.

  41. http://seekingalpha.com/article/2142403-real-retail-sales-per-capita-another-perspective-on-the-economy

    The "Real" Retail Story: The Consumer Economy Remains at a Recessionary Level

    How much insight into the US economy does the nominal retail sales report offer? The next chart gives us a perspective on the extent to which this indicator is skewed by inflation and population growth. The nominal sales number shows a cumulative growth of 164.4% since the beginning of this series. Adjust for population growth and the cumulative number drops to 112.3%. And when we adjust for both population growth and inflation, retail sales are up only 24.6% over the past two-plus decades. With this adjustment, we're now at a level we first reached ten years ago in March 2004.


  42. dont forget the only reason the market isn't tanking badly…is because of the belief that us/europe wont do anything at all substantial in response…any hints at otherwise and we get creamed…. eem new low…creamed


  43. Wow, 111.15 on TLT – that's a sign of panic.  That's 2.6% on the 10-year.  Now people who got 3% are "lucky".  

    Oil hit $104 yet again and back to $103.75 again and now heading back up.  Seems easier to me than sitting in spreads.  

    Retail Sales/DC – Great point and in-line with what we observe about lack of wage growth.  I don't know what fantasy World analysts are living on where they thing stagnant wages can lead to rising sales.

    Creamed/Angel – And this isn't even about China, which is a much bigger issue.  


  44. There goes TNA – better to take another bullish stab once things settle down.  


  45. QUIK/ Albo

    Hi, pls could you lay your case for QUIK?  On initial look seems interesting.  What are your expectations?

    Thanks


  46. TNA is a day trade yes?  I'm assuming that's not a portfolio move from the "cashy and cautious" comment in the morning post.


  47. ISRG/Phil … has pulled back very nicely … those Jan 2016 $350 puts are now $38 .. can now get $31 for a lower strike at $330 … they are talking to me :)


  48. TNA/JPH – The idea is, if you are generally bearish, you want to try to find something to capture a bounce on the way down.  Sort of a quick insurance play, in case things turn back up again.  It's not really worth jumping in if you have nothing to protect.  

    ISRG/DM – $380 is where we think they should hold, worst case.  And, of course, when a stock is down with the market, we don't really hold that against them.  

    When we see things selling off on top of sell-offs they already had – it's possible a bit of panic is setting it – not a good time to try to bottom-fish.  

    Not getting the big move in Silver I had hoped (/SI) but $19.53 now so stop out even at worst. 

    • Last week's lows were Dow 16,015, S&P 1,814, Nas 4,052 (blew through that today), NYSE 10,271 and RUT 1,106 (also gone).  
    • Below here we have support at Dow 15,800 (200 dma), S&P 1,760 (200 and 10% line), Nas 3,950 (200 and 20% line), NYSE 10,000 (200 and Must Hold) and RUT 1,050 (the 5% line).

  49. aapl almost back to $500


  50. Checho – My info on QUIK comes from Next Inning reports.  It is a tiny company, and therefore, underfollowed.  Their revenues grew from 14.9M in 2012 to 26M in 2013.  Next Inning projects that they will more than double this year to 60M.  QUIK is already shipping display products to Samsung.  They expect to be shipping sensor hub products for cell phones starting in the 3rd Quarter of this year. These must be "always on" and consume low power.  NI states that the QUIK product consumes 1/30th of the battery power of competitive Micro Controller-based sensor hubs on the market today.  They believe that this is a big deal.  Very early on a small company stock, but one that seems to possess a lot of potential. We'll see.  To date, QUIK has been selling into the tablet market.  Smartphone volumes are huge.  One billion smartphones were shipped in 2013.  Forecasters are projecting smartphone volumes to grow 29% year-over year.  If, and it may be a big if, QUIK can compete competitively in this market, the results could be very significant to such a small company.  I may be drinking the Kool-Aid on this one, but I'm a believer.


  51. Phil / CMG – is there any earnings play you could recommend on CMG?


  52. ISRG/Phil … thanks for the perspective


  53. huh. albo
    how are you playing them – straight stock ?


  54. CMG/Pfehl – Not really is it's in the middle of a recent range (so it could go either way) and we have no particular reason to be bullish or bearish here.  Last month, our trade idea for CMG was this:

    Submitted on 2014/03/20 at 1:38 pm

    Holy cow, you can sell CMG April $600 calls for $35 with CMG at $610, that's $25 in premium and earnings are on the 17th.  CMG was $570 on Tuesday morning!    You can cover those with the Jan $650/750 bull call spread at $27.50 for a net $7.50 credit and any move below $600 between now and April should make a nice, quick win and, if not – RAWHIDE!  

    See, that was easy because we made the play when they were spiking to a silly high.  That's our Rule #1 – ALWAYS sell into the initial excitement.  We got a great price and made a great trade.  Trying to force a trade just because they happen to have earnings is arbitrary and can get you into a lot of trouble.  You need ALL the stars to align to make a trade – no matter how tempting it may look.  CMG could easily go $50 either way in a flash – it's just not worth playing over earnings when neither the floor or ceiling is clear. 

    With the market falling in general, what we'll be looking for into earnings is companies that get overly punished and fall to lows we don't mind playing.  

    You're welcome DM. 


  55. XHB – Trading below the 200.  New low on HOV.


  56. Wombat -Both stock and options.  I like the Nov 2.5 calls.  Can probably be bought for $2.40 or so.  Also sold a few more Nov $5 puts for $1.10 this morning.


  57. Phil – Thanks for the fast response. I got burned on some TSLA puts and I guess I'm hoping for a quick profit to make up for it but going about it entirely the wrong way. Learning can be painful sometimes. 


  58. Playing TNA AND QQQ for a bounce but if RUT BREAKS BELOW 1098 not a goog omen.


  59. /NKD +1K day -= out.
    Seems you can play the 14000 line all day


  60. Sometimes, the fish aren't biting, Pfehl.  Smart guys move on to find better hunting grounds.

    Webcast time!  


  61. QUIK – Albo – I'm sold and starting to scale in – Thanks


  62. I'm guessing we cashed in the EWJ Apr 12P's?  They are sitting at a mid of 1.10 for me, a 49% winner.


  63. Checho- Good luck.  I think I'm right, but as the saying goes, "Many a slip twixt cup and lip".  Esp. on the small guys.

    FWIW – Homebuilders.  Bill Miller states that he believes that there is no question that we are at the beginning of a long home-building cycle.  His favorite is PHM.  Now might be a good time for Phil's HOV play ?


  64. Wow, buying the HOV underlying with a 2016 $5.5C/4.5P strangle looks like a pretty good deal.


  65. VOD/Phil   What do you think about VOD?    Today there was a huge 2016 play, selling the $25 puts for $1.40 and buying the $35 calls. 


  66. Thanks for another excellent Web presentation.  Unfortunately got there late but very helpful as always.


  67. Thanks Louis.  

    EWJ/Burr – Yes, we're done with those. 

    HOV/Albo – If we're not at the beginning of an up cycle, then this economy is totally screwed.   At $4.42, you can sell the HOV 2016 $4 puts for .80 and buy the $3/5.50 bull call spread for $1.20 for net .40 on the $2.50 spread that's $1.42 in the money to start.   We already have a large HOV short put position (50 contracts) in our LTP and the Income Portfolio with the short $5 puts at 0.95 for a net $4.05 entry – this is better!  

    VOD/Stock – I like them overall but they are throwing a lot of cash around so I'm not expecting there will be a huge move.  If rates rise, people will worry about their debt load (and they just spent another $10Bn for Ono) and if they get credit downgraded they'll have trouble rolling over, etc.  So, the longer you give them, the more time you have to be wrong – there's a reason the $25 puts are $1.40 with the stock at $35!  

    Getting a good move now back to green but hard to trust these late-day moves.  

    Oil $103.50!  


  68. phil/tna – yet another great call there!


  69. Phil – Sorry to keep asking about the butterflies, but I couldn´t get to the Webcast on time… Any adjustments?


  70. TNA/Toe – Who needs Futures, right?  

    Butterflies/Akad – Tomorrow, I promise! cool


  71. Phil // TSLA
    from the webcast – just wanted to clarify. I wasn't so worried about the roll because of conviction, it's that darn TOS margining. On a 15% array my margin on that single leg was 31K and it varies significantly. I still appreciate the roll in abstract though – that's what I wanted.
    I bought some cheap May puts to offset, gained about 8K in margin. Just window dressing to get though May. 

    Thanks 




  72.  market bottomed the second a headline came across that japan will downgrade its economic assessment….weaker yen….buy buy buy…that is so positive..ha! 

    http://www.zerohedge.com/news/2014-04-15/headline-broke-todays-downward-momentum


  73. Teflon market, Pharm.  Govt's have too much invested in the wealth effect to let it go at this point.  Or, at least not until they can ignite the next real estate boom, coming soon to a [wealthy] neighborhood near you.  The only certainty in all this is an extended period [3 years min.] of low global rates — which is enough to make a living.


  74. Phil: Thx for the nice little TNA trade today…. more than lunch money!


  75. Phil: Thx for the nice little TNA trade today…. more than lunch money!


  76. Just had a $550 run to do my wife's errand.  As I'm driving there, get my alert /CL > 103.90  20min later I get my alert /CL < 103.50.   Thanks wife, I saved you $12 and lost $550.  Make sense to me.

    Sorry needed to vent.


  77. Phil –  Thanks for the XRT trade.  Good call.  Hope I don't regret it but took it off at 1.25 and 1.24.  Crazy market… I guess you really can't fight the Fed as they say. :)


  78. Burrben – I can identify with that scenario.  Have done the same thing.


  79. Phil – I know it is a week early, but … what are your initial thoughts on AAPL earnings?


  80. TSLA/Wombat – If it causes margin issues then why play it?  Keep in mind, when you make those rolls, you commit to tying up the margin for longer and longer periods of time.  What opportunities are you giving up to chase after this stock?  

    Good cartoon, Pharm. 

    Japan/Angel – They already said they'd dump more cash on the markets AND they're raiding the pension accounts to put those into the market as well.  Not sure what more will be accomplished but hope springs eternal, I suppose.  

    You're welcome Jbur.  

    LOL Burr, I advise you NOT to have that conversation – it's not likely she'll see it that way at all.   Bullish for the bounce off $103.50, I hope….

    XRT/Louis – Very good call taking the quick profit, those retraced fast, which is why we ALWAYS sell into the initial excitement.  I missed making the call, so we're stuck for now.  

    AAPL/Diamond – No new products in Q1, lots of App sales from Christmas but I don't think it will be exciting.  Still, they aren't priced for exciting and last Q they beat by 3% and dropped to $490 but then jammed back to $550 pretty quickly.  Hopefully they do the same this Q and we have a chance to press our AAPL bets into a dip but I think we're too close to the rising 200 dma at $505 and they pop up on good news, possibly margin improvement as their production costs are going down and they haven't cut prices.  

    To play AAPL earnings, I'd go with the Jan $500/550 bull call spread at $21 and, if they go up, you make 138% at $550.  If they go down, you can roll the Jan $500s ($46.50) to the 2016 $450s (now $93) and sell the 2016 $400 puts (now $23) for about $45 to pay for most of it.  Since we don't have AAPL in the Income Portfolio, let's add 5 of those spreads and see how it plays out.  


  81. SCO / Phil .. Good time to sell some SCO puts?? Which month and strike do you like? Thanks


  82. Speaking of earnings – tonight:

    CSX
    Consensus – $0.38
    Whisper – $0.40
    Average move – 3.3%

    YHOO
    Consensus – $0.37
    Whisper – $0.41
    Average move – 7.6%
    Price into options 6.5%

    INTC
    Consensus – $0.37
    Whisper – $0.39
    Average move – 4.7%
    Priced into options – 3%


  83. Don't like YHOO long term. They have been fleeced by Alibaba ahead of the IPO and I am not confident that they have a good plan in motion. IMHO.

    CSX will give us a good idea about the coal industry.

    INTC has held up nicely so far. As well as QCOM…


  84. AAPL / Phil – Last year, they missed and they went up 13% in 2 weeks. In 2012, they beat and lost 6% in 2 weeks.

    I am guessing we want a miss….


  85. TWTR with a big pop today, up 10%, taking SOCL up with it.  

    TSLA struggles back to $194.50.

    SCO/DM – Don't forget that once you get to the end of May, you have "summer driving season" and they can add $5 to oil for a while.  So not really a great time to play unless you don't mind rolling through to the fall.  We're stuck with the short April $29 puts in the STP and I'll roll them along to the May $28 puts, selling 30% more to make up the price difference but I'm not in love with it as a new play. 

    YHOO/StJ – Tricky as Alibaba's looming IPO is essentially the whole reason people like them.  Since you can sell the April (tomorrow) $34 calls for $1.20 and you can buy the May $33 calls for $2.40 for net $1.20 on the $1 spread and since I think, even if YHOO has bad news, the IPO will bring them back later – I like that for a fun spread.  Too bad INTC is up so much or I'd like them too – now I'm just curious as to whether they can justify $27.

    AAPL/StJ – I want a miss so we can BUYBUYBUY on a sell-off.  


  86. Is this yesterday's chart or todays?

    SPY 5 MINUTE


  87. CNBC blaming spring break for the strange trading.  Guess I should go to Daytona to find out which way the markets are going…

    Well, overall it's a little improvement but, as I said earlier, it's not very impressive if it takes 2 days to make weak bounce levels – that's more like what happens when you form a Head and Shoulders pattern.


  88. Buying started much earlier today – around 1:00 PM! Just as the yen started tanking like Angel said.


  89. strangest trading that we've seen in a while…new lows still expanding though, chart looks like a bottom but I'm not totally convinced 


  90. Phil – Just to confirm, the Income Portfolio was cashed out, correct?  Is this the one where I argued with you about going to cash?   Or is it the other way around?

    What's the philosophy difference between the income port and the long term port?

    "

    Now the Long-Term Portfolio has been chopped in half (3.2%) vs the Income Portfolio (7.2%).  Hopefully this will lay to rest the debate about whether or not it's better to cash out even long-term positions in a toppy market. "


  91. YHOO up big now – over 8%

    INTC not moving much

    I guess we wait for conference calls now.


  92. Income Portfolio/Burr – No real difference, one was started specifically for the Webinar people but it's the same thing, essentially.   When I called for cash, I wasn't going to bother cashing out the Portfolios because it was a big hassle but you whined about it so we compromised and we cashed the Income Portfolio but not the LTP and, at the moment, the LTP is up 3.6% while the Income Portfolio is up 7.2% but the race isn't over because most of what's in the LTP is long-term positions that are maturing so the small fluctuations along the way don't mean anything, what matters is how we wind up in our mostly 2016 positions.  

    For instance, in the LTP, we sold 50 EGLE 2016 $2.50 puts for $1.30 ($6,500) and EGLE is at $3.13 so, if we expired today, we'd be up $6,500.  As it stands, we're being charged $750 for a loss on the position.  That $7,250 swing on one position – if we flatline, is 1.5% added to the gains and that's money the Income Portfolio will not be making on it's cash. 

    Of course we'll look to add more positions and we can even add EGLE, for that matter but we went to cash and we do not, in fact, have tens of thousands in potential profits that are "in progress."

    Wow, YHOO $37!   That's going to bury the short calls, might be tricky to pull a profit out of that one.  


  93. API says +7640k w/w vs last week +7080k


  94. And oil heading back up see what china numbers are tonight


  95. Phil –  Yeah, I wasn't bragging (or whining), just trying to get back into the flow with limited time to spare on what positions I was missing and which was where.  

    As I've said before I'm changing my whole approach to long term "investing" and learning patience.  When I have the time I'm going to play futures like today as short term bets with a small % of money.  

    I worked 8hrs yesterday of physical labor and made a total of $175.  I made or lost that without a thought in the past trading.  Now when I make $200, I can equate that 8hours of carrying chairs in the hot sun, cooking over a fryer or grill in an enclosed box, dragging boxes of soda from Sam's to my truck to a trailer, and sweeping "powder" sand from every crack, cranny, and nook I can think of.  It makes the numbers Real, if you know what I mean.


  96. Oh, and I would argue, now that we have "corrected", it would be the time to add a 33% allocation to the Income Port for positions that were added to the LTP.  Does that make sense?  My argument was to Go To Cash at the top, wait for a semi bottom, and THEN add more positions.  So I would think we should be calling to adding the EGLE position to the IC when the SPX was around 1825.  When we see the next 5% level, if we continue to decline, we should add another 33%, etc, etc.  As long as the fundamental bias hasn't changed.  

    Just my 2c, enhanced by a bottle of cab.


  97. Burrben – Not convinced that we have finished the correction.  Bob Stovall of S&P, who is as good as any of the prognosticators, thinks we correct 10-20% this quarter.  Who knows ?

    BTW, my opinion enhanced by two margaritas. ;-)


  98. smileyI'll give my opinion enhanced by Passover wine later!  


  99. Indices hugging the DMA (50 and 200)


  100. Correction / Albo – When he means 10-20%, is that absolute or 10-20 of this year's move? Because 20% of the Dow now would be a 3250 point correction, basically wiping out the entire 2013 gains in one quarter. I am quite certain we need a correction, but he is talking about something quite drastic. That would make a lot of stocks very cheap (not all of them) and I have to believe that a lot of people would be jumping in way before we get there. In 2010, we corrected 10% but we had gone up 50% in less than a year. In 2011, we lost 15% but that was budget shenanigans. In both cases, we recovered in 6 months and went on higher. These were actually great buying opportunities looking back. 

    The economy is not going gangbuster, but companies are making money (on the back of the bottom 80% but it's money). But I don't see the same environment today – the rest of the world (except Russia which looks more and more like an out of control dictatorship) is doing better. China is slowing down, but actually, they need a breather as well. In any case, 10% would be nice though… But what do I know, right…


  101. On the other hand, back to where we were in 2008:

    WSMC 0414 565x420 Tuesday links:  unbundling risk and return

    Not that it ended that well! 


  102. Corporations get some nice breaks from the IRS:

    http://dealbook.nytimes.com/2014/04/14/looking-at-some-corporate-tax-loopholes-ordinary-citizens-may-envy/

     If individual taxpayers are arrested, admit guilt and reach a civil settlement with the government, they cannot deduct the costs from their returns. But amazingly, a company is allowed to claim those costs as a business expense. JPMorgan Chase, for example, which has agreed to pay billions of dollars in fines for various transgressions, can deduct a large portion — and all the legal expenses — from its taxes.

    A much larger loophole involves the deduction of executive stock options by the company issuing them. Inexplicably, many of Silicon Valley’s newest star companies will be able to shelter a large portion of their profits as a result. Citizens for Tax Justice estimated late last year that a dozen technology companies, including Twitter, LinkedIn and Priceline, “stand to eliminate all income taxes on the next $11.4 billion they earn — giving these companies $4 billion in tax cuts.”

    Like these guys don't make enough money already!



  103. Phil, Interesting morning article on graphene. What's your view on GTI? 


  104. wombat//NKD If you don't mind my asking, are you playing long off the line? or short?  I mean it could be either way looking at the chart, but I just want to observe. 


  105. siyang / NKD
    Sorry for the late response, I was out. NKD had been in a major downturn – 14000 is a MAJOR resistance level, so I was just following the lead. If was challenging it, I would short it.If it was bottoming on it, I would play it long. Thats all.

    Obviously I got out at right time ( NKD now at 14400, but if it came to 14500 I would put a short on it, risk $100 bucks and see what it does. If you stop out,wait for it to come back down, cross 14500, and then get in again.

    Phil. anything to add ?


  106. From Bloomberg, Apr 15, 2014, 11:05:47 PM

    A real estate agent shows a customer a scale model of a property development inside the Sea Shore of China showroom in Sanya. An extended slowdown would put pressure on Premier Li Keqiang to add stimulus or ease up on efforts to curb financial risks and property-price gains after this month outlining spending and tax relief to support growth. Photographer: Brent Lewin/Bloomberg

    China’s expansion slowed to the weakest pace in six quarters, testing leaders’ commitment to keep reining in a credit boom and pollution as risks mount of missing an annual growth target of about 7.5 percent.

    To read the entire article, go to http://bloom.bg/1jJfeDc
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  107. From Bloomberg, Apr 15, 2014, 11:08:26 PM

    People sit under umbrellas on beach chairs in the Yalong Bay district of Sanya, Hainan. China’s gross domestic product grew 1.5 percent from the previous three months, according to the median estimate in a Bloomberg News survey ahead of data released today, down from 1.8 percent in the fourth quarter. Photographer: Brent Lewin/Bloomberg

    Asian stocks rose for the first
    time in four days, with the regional benchmark index climbing
    from a two-week low, after U.S. technology shares rose and
    investors weighed slowing Chinese economic growth.

    To read the entire article, go to http://bloom.bg/1p8gBRj
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  108. From Bloomberg, Apr 15, 2014, 6:00:00 PM


    April 7 (Bloomberg) — President Barack Obama talks about U.S. education and the CareerConnect program that uses competitive grants to entice schools into linking their education plans with specific skills or experiences.
    Obama speaks at an event in Bladensburg, Maryland. (Source: Bloomberg)

    Barely 26 years old, Zhang Xi has studied at an elite American university, worked for an investment bank in Hong Kong and an oil company in Beijing and now may launch an Internet startup with two friends.

    To read the entire article, go to http://bloom.bg/1eMPykx
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  109. From Bloomberg, Apr 15, 2014, 6:03:23 PM


    Japanese Prime Minister Shinzo Abe is looking backward, not forward. Photographer: Tomohiro Ohsumi/Bloomberg

    For Abenomics bulls who still hold out hope that Prime Minister Shinzo Abe intends to make good on his pledges to revitalize Japan, the past week must have been at least a little disconcerting.

    To read the entire article, go to http://bv.ms/1l4r3mQ
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  110. From Bloomberg, Apr 15, 2014, 10:00:36 PM

    Pro-Russian activists make barricades in front of the gate of an airport in Kramatorsk, Ukraine on April 15, 2014. Photographer: Sergei Grits/AP Photo

    Ukraine began an offensive against separatists in its restive east, recapturing an airport amid claims that Russian special forces were supporting the anti-government groups.

    To read the entire article, go to http://bloom.bg/1kvJK4u
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  111. From Bloomberg, Apr 15, 2014, 9:51:33 PM

    Gold retreated for a second day,
    extending the biggest drop in three weeks, on prospects for
    further cuts to the Federal Reserve’s stimulus program as the
    U.S economy shows signs of recovery. Silver fell.

    To read the entire article, go to http://bloom.bg/1kvIyhr
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  112. From Bloomberg, Apr 15, 2014, 10:00:00 PM

    Companies across the U.S. from Texas to the District of Columbia and Nebraska are struggling to fill positions with metropolitan jobless rates below the 5.2 percent to 5.6 percent level the Federal Reserve regards as full employment nationally. Photographer: Mario Tama/Getty Images

    To hire 10 to 15 project coordinators this year, Sabre Commercial Inc. has boosted pay 10 percent and added a 401(k) retirement plan.

    To read the entire article, go to http://bloom.bg/1iX3Npq
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  113. From Bloomberg, Apr 15, 2014, 11:01:01 AM

    Confidence in Prime Minister Shinzo Abe’s stimulus policies is faltering after foreign investors
    sold $24.2 billion of Japanese shares this year, leaving them
    the cheapest relative to bonds in 18 months.

    To read the entire article, go to http://bloom.bg/1qG6xwd
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  114. From Bloomberg, Apr 15, 2014, 11:16:37 PM

    Chinese investors demanding their
    money back from a troubled 973 million-yuan ($156 million) high-yield product in Shanxi province were confronted by police in
    front of a China Construction Bank Corp. (939) branch.

    To read the entire article, go to http://bloom.bg/1iX34Ve
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  115. From Bloomberg, Apr 15, 2014, 8:48:37 PM

    An Apple Inc. iPhone 4S smartphone, left, and a Samsung Electronics Co. Galaxy S III smartphone are arranged for a photograph in Seoul. Photographer: SeongJoon Cho/Bloomberg

    Samsung Electronics Co. (005930) began its
    attack on patents Apple Inc. has asserted in a $2 billion case
    by trying to convince jurors that the iPhone maker exaggerated
    claims about inventions allegedly copied by the Galaxy maker.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-15/samsung-attacks-apple-patent-in-2-billion-case-as-not-so-novel.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  116. From Bloomberg, Apr 15, 2014, 7:22:50 PM

    Two billionaire hedge fund
    executives have joined Ameritrade founder Joe Ricketts’ super-political action committee as it works to elect Republicans to
    the Senate and House, according to a U.S. Federal Election
    Commission report.

    To read the entire article, go to http://bloom.bg/1eFvG8K
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  117. From Bloomberg, Apr 15, 2014, 10:25:42 PM

    The passenger ship “Sewol” is sinking off 20 kilometers north of Jindo, South Korea on April 16, 2014. Source: Yonhap

    South Korea dispatched coast guard,
    military rescue boats and helicopters to aid a passenger ferry
    carrying 476 people that’s sinking off the nation’s southwest
    coast.

    To read the entire article, go to http://bloom.bg/1kvJpPg
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  118. From Bloomberg, Apr 15, 2014, 6:04:57 PM

    Apple Inc. (AAPL), AT&T Inc. (T) and 11 other
    smartphone makers and wireless companies agreed to offer
    technology next year that would let customers remotely wipe data
    from their devices and render them inoperable when stolen.

    To read the entire article, go to http://bloom.bg/1eMPQI6
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  119. From Bloomberg, Apr 15, 2014, 8:51:32 PM

    Employees celebrate in front of a big screen displaying real-time statistics of transactions on Taobao and Tmall, the two main shopping sites of Alibaba, after the total single-day volume exceeded 30 billion yuan (US$4.926 billion) at the data center of Alibaba in Hangzhou city, east China’s Zhejiang province, on Nov. 11. 2013. Photographer: Imaginechina/ZUMA Press

    Alibaba Group Holding Ltd. posted a surge in fourth-quarter profit as analysts prepare to raise their valuations ahead of a potential U.S. initial public offering by China’s largest e-commerce company.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-15/alibaba-profit-grows-ahead-of-initial-public-offering.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  120. From Bloomberg, Apr 15, 2014, 10:26:49 PM

    The dollar rose against most of its
    16 major counterparts as investors sought haven assets amid
    tension in Ukraine and before Federal Reserve Chair Janet Yellen
    speaks today.

    To read the entire article, go to http://bloom.bg/1p8gLrU
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  121. From Bloomberg, Apr 15, 2014, 12:03:48 PM

    Corn is the most common grain in the U.S., with its production historically concentrated in a Midwestern region stretching from the Ohio River valley to Nebraska and trailing off in northern Minnesota. It had been ungrowable in the fertile farmland of Canada’s breadbasket. Photographer: Luke Sharrett/Bloomberg

    The snow is piled waist-deep outside the Southern Manitoba Convention Centre as more than 400 farmers gather to consider the once-unthinkable: growing corn on the Canadian prairie.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-15/canada-s-climate-warms-to-corn-as-grain-belt-shifts-north.html
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  122. From Bloomberg, Apr 15, 2014, 12:14:57 PM

    Cooling towers operate behind electrity pylons and a wind turbine at the RWE AG coal-fueled power plant in Weisweiler, Germany. Photographer: Hannelore Foerster/Bloomberg

    What’s a beleaguered utility to do
    when forced by the government to close its profitable nuclear
    power plants?

    To read the entire article, go to http://bloom.bg/1iQG2iO
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  123. From Bloomberg, Apr 15, 2014, 6:30:03 AM


    April 12 (Bloomberg) — European Central Bank President Mario Draghi talks about the performance and outlook for the euro area economy.
    Draghi speaks at a news conference at the International Monetary Fund-World Bank 2014 Spring Meeting in Washington. (Source: Bloomberg)

    For currency traders, talk is
    cheap, even when the person speaking is the president of the
    European Central Bank.

    To read the entire article, go to http://bloom.bg/1m4wm9B
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  124. From Bloomberg, Apr 15, 2014, 8:43:22 PM

    A man looks out at the skyline from an observation deck at night in Sendai, Miyagi Prefecture, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

    Japan’s government will cut its
    economic assessment for the first time in almost a year and a
    half, reflecting concern about the blow to consumption from this
    month’s sales-tax increase, the Nikkei newspaper reports.

    To read the entire article, go to http://bloom.bg/1l570Vm
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  125. From Bloomberg, Apr 15, 2014, 11:00:01 AM


    Men sit in a park in Tokyo. Photographer: Kiyoshi Ota/Bloomberg

    Japan’s population slid for a third
    year with the proportion of people over the age of 65 rising to
    a record, underscoring the challenge the world’s most-indebted
    economy faces in financing its aging society.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-15/japan-s-population-shrinks-for-third-year-as-ranks-of-aged-grow.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  126. From Bloomberg, Apr 15, 2014, 4:22:06 PM

    A customer shops at a Whole Foods Market Inc. store in New York. financial markets. Photographer: Victor J. Blue

    Consumer prices accelerated in March as Americans paid a bit more for food and rent, adding to signs that demand is improving in the world’s largest economy.

    To read the entire article, go to http://bloom.bg/Q9jSjz
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  127. From Bloomberg, Apr 15, 2014, 5:39:11 PM


    A change in Census data will provide a different picture of Americans’ heath insurance.&nbsp;Photographer: Joe Raedle/Getty Images

    Today, the biggest news about the Affordable Care Act probably is a Politico story that says insurance companies are becoming exchange optimists. It’s too early to predict, but it looks as though both large and smaller insurers are going to be more likely to jump into state exchanges than to leave them. That’s huge. The whole idea of the exchanges is to deliver the advantages of market mechanisms that were largely unavailable pre-reform. If this pans out, it would help bring down prices and encourage better insurance products.

    To read the entire article, go to http://bv.ms/1l4kErC
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  128. From Bloomberg, Apr 15, 2014, 12:19:31 PM

    Source: National Priorities

    As it’s Tax Day, let’s look at where our tax dollars come from and where they go.

    To read the entire article, go to http://bv.ms/P3fb9M
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  129. From Bloomberg, Apr 15, 2014, 12:17:17 PM

    Recovering Ukraine’s stolen money would be a help for these guys.&nbsp;Photographer:&nbsp;Rob Stothard/Getty Images

    The International Monetary Fund has pledged about $18 billion in loans to help stabilize Ukraine’s beleaguered economy. That amount is a fraction of the $35 billion that Ukrainian Prime Minister Arseniy Yatsenyuk says is needed from the international community to avert a default over the next two years.

    To read the entire article, go to http://bv.ms/P3eUDZ
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  130. With no end in sight to cash burn, Alpha Natural creditors’ alarm grows

    06:45 PM ET · ANR

    • The plunge in coal prices that has sent smaller competitors into bankruptcy is alarming bondholders in Alpha Natural Resources (ANR), as the no. 2 U.S. coal producer consumes more cash than ever, Bloomberg reports.
    • ANR’s $3.43B of debt equals 37.9x EBITDA, highest among U.S. coal producers, and its bonds have lost more than 9% this year, the most among met coal producers in the Bloomberg High Yield Corporate Bond Index.
    • “It’s going to get worse before it starts getting better,” one analyst says. “It’s a completely oversupplied market.”


  131. Notable earnings before Wednesday’s open

    05:30 PM ET · ABT


  132. Notable earnings after Wednesday’s close

    05:35 PM ET · AF


  133. More on Intel: Server CPU sales are healthy, mobile sales aren’t

    05:20 PM ET · INTC

    • Intel’s (INTC) PC Client Group (PC CPUs + connectivity and living room chips) saw its sales fall 1.5% Y/Y to $7.94B (62% of revenue). The Data Center Group (server/networking/storage chips) saw its sales rise 11% to $3.09B.
    • Internet of Things Group (embedded products) sales rose 32% to $482M. But Mobile & Communications Group (mobile products, inc. Atom CPUs) sales fell 61% to just $156M.
    • Software/service sales rose 6% to $553M, and all other sales (inc. flash memory) rose 18% to $545M.
    • While the PC and data center units respectively had op. income of $2.80B and $1.32B, the mobile unit had a whopping $929M op. loss, and the “Other” unit a $773M op. loss. Internet of Things had a $123M op. profit, and software/services a $7M op. loss.
    • The groups are the product of a new reporting structure.
    • PC and data center unit volumes respectively rose 1% and 3% Y/Y. PC ASPs -1% Q/Q and -3% Y/Y, data center ASPs +1% Q/Q and +8% Y/Y. Desktop ASPs +4%, notebooks -8%.
    • In its CFO commentary (.pdf), Intel attributes it strong Q2 GM forecast to lower 14nm start-up costs, higher volumes, and lower platform write-offs, partly offset by higher tablet volumes and related contra revenue for OEMs.
    • Intel’s cash/investment balance fell by $1B Q/Q to $19B ($11B offshore). Inventories fell by $409M to $3.76B, and headcount by 1K to 106K.
    • INTC +2% AH. Q4 results, guidance, PR


  134. CSX earnings slowed by weather but finish ahead of estimates

    04:58 PM ET · CSX

    • CSX (CSX) +0.9% AH after Q1 earnings fell 14% Y/Y, caused largely by harsh winter weather across much of its railroad network, but beat expectations, and revenue rose 2% to $3.01B as it hauled 3% more freight.
    • CSX says the early 2014 weather difficulties cost it $0.08-$0.09/share in increased expenses and lost revenue.
    • Coal volume declined 1%, intermodal shipments rose 5%, and merchandise volume added 2%, driven by growth in agricultural products and chemicals shipments.
    • Expects modest FY 2014 earnings growth on the strength of broad-based merchandise and intermodal gains and an improving domestic coal environment.
    • Approves a 7% increase in the quarterly dividend to $0.16/share.


  135. Chinese Internet stocks rise AH on Alibaba numbers

    04:55 PM ET · BIDU

    • Chinese Internet stocks, hit hard by March/April’s momentum stock selloff, are up in AH trading after Yahoo reported Alibaba’s Q4 sales and net income respectively rose 66% and 110% Y/Y.
    • BIDU +3.4% AH. SINA +1.7%. DANG +2.8%. VIPS +3%. QIHU +1%. WUBA +1.1%. YY +1.3%. YOKU +2.2%.


  136. Yahoo +7.5% AH on Alibaba numbers, guidance, display turnaround

    04:34 PM ET · YHOO

    • Yahoo (YHOO) discloses in its earnings slides (.pdf) Alibaba (ABABA) had Q4 revenue of $3.06B (+66% Y/Y), and net income of $1.35B (+110%). Revenue growth accelerated from Q3′s 51% clip.
    • Yahoo Japan’s sales fell 14% Y/Y in Q4 to $1.03B (worse than Q3′s 4% drop), and its net income fell 11% to $304M.
    • Yahoo itself is guiding for Q2 revenue of $1.12B-$1.16B, above a $1.08B consensus. Op. income is expected to fall to $130M-$170M from a year-ago level of $224M, and adjusted EBITDA to $290M-$330M from $386M.
    • Yahoo’s long-struggling display ad ops staged a turnaround in Q1: Sales (ex-TAC) rose 2% Y/Y to $409M after falling 6% in Q4 and 7% in Q3. Search revenue (ex-TAC) rose 9% to $444M after growing 8% in Q4. All other revenue fell 11% to $234M.
    • Display ads sold +7% vs. +3% in Q4, price per ad -5% vs. -7%. Search paid clicks +6%, down sharply from Q4′s +17%. But price per click rose 8% after dropping in each quarter of 2013. Did Henrique de Castro’s firing contribute to the display/search improvement?
    • $450M was spent on buybacks, up from $231M in Q4 and boosting EPS. While revenue rose 0.9% Y/Y, opex rose 15.5% to $1.1B.
    • Q1 results, PR


  137. Stocks close higher after volatile session, Nasdaq claws back from losses

    04:20 PM ET

    • Stocks swung from gains to losses and finally to gains in a volatile session, erasing a sharp midday swoon that saw the Nasdaq fall to near five-month lows before recovering.
    • The main indexes closed a little under their morning highs, which came as Coca-Cola and J&J delivered upbeat earnings reports.
    • Reports of pro-Russian separatists briefly taking control of an airfield in eastern Ukraine weighed on investor sentiment early on, but the mood brightened as it appeared a worst-case scenario wasn’t happening.
    • The rally in stocks and the dollar/yen pair also seemed to follow reports suggesting Japan may be set to lower its economic outlook, presumably fueling speculation that a downgrade would invite more policy stimulus from Japan.
    • The utilities sector (+1.3%) ended ahead of the other groups, extending its YTD gain to 11.8%; the biotech ETF added 1%, while the broader healthcare sector advanced 1.1%.
    • Recent intraday volatility warrants caution, Waverly Advisors CIO Adam Grimes says, as it implies a lack of conviction among traders: “You don’t necessarily want to be buying dips, but you don’t want to be selling into them either… It is a time for no action.”
    • Treasury prices strengthened as the rising tensions in Ukraine boosted demand, sending the benchmark 10-year yield to a six-week low below 2.6% before settling near 2.62%.
    • Gold futures fell 2.1% to ~$1,300/oz. on apparent profit-taking following yesterday’s three-week high for the metal.


  138. Intel +2.9% AH on strong margin forecast, in-line revenue guidance

    04:15 PM ET · INTC

    • Intel (INTC) expects Q2 revenue of $12.5B-$13.5B vs. a $12.96B consensus. Full-year guidance for flat revenue growth (compares with a consensus for 0.8% growth) and capex of $10.5B-$11.5B is reiterated.
    • Q1 gross margin was 59.7%, -230 bps Q/Q and +350 bps Y/Y, and above a guidance midpoint of 59%. GM is expected to rise to 63% (+/- 2%) in Q2, and full-year GM guidance has been raised 100 bps to 61% (+/- a few percentage points).
    • Full-year R&D/MG&A spending guidance has been raised by $300M to $18.7B-$19.1B. While revenue rose just 1.7% Y/Y in Q1, opex rose 12% to $5.09B.
    • $545M was spent on buybacks, up from $528M in Q4.
    • Q1 results, PR


  139. Google Maps chief leaves for Twitter; Project Ara phones due in January

    04:00 PM ET · GOOG

    • Daniel Graf, Google’s (GOOG +0.8%) Maps chief since 2012, is leaving to become Twitter’s (TWTR +11.4%) consumer products VP. Among other things, Graf spearheaded the launch of Google’s widely-praised iOS Maps apps after Apple controversially opted to use a home-grown Maps app in iOS 6.
    • Graf takes over Twitter’s consumer product efforts at a time when the microblogging leader is attempting to boost flagging user growth by launching and testing a slew of changes meant to make its platform more photo/video-friendly and less intimidating to new users more Facebook-like news feeds.
    • Separately, Google has announced the first phone for its Project Ara custom/modular phone initiative will arrive in January, and sell for just $50; presumably, adding various custom parts will increase that figure.
    • Google plans to have Ara, which aims to let smartphone buyers mix and match components such as a device’s camera, display, and CPU, support three device sizes. Google will supply “electronics backbones” for the devices, but will rely on third parties to provide the modules that run on top of them.
    • Twitter shares have flown higher amid an afternoon market rebound.


  140. Walter +5% as it idles Canadian coal mines, but industry needs more cuts

    03:47 PM ET · WLT

    • Walter Energy (WLT +5%) moves sharply higher on news it will idle its Canadian mining operations, a move seen as positive for the coal miner’s liquidity.
    • With met coal prices at $120/ton for the hard coking variety, WLT’s Canadian operations were losing ~$27M in annualized EBITDA, Brean Capital says; the firm thinks WLT may still pursue asset sales in Canada, although market conditions would make a transaction this year difficult.
    • UBS sees no reason to lift its Sell rating on WLT; the decision to idle should lower the company’s pace of cash burn and is a step in the right direction for the coal industry, but more production cuts are needed for met coal prices to rebound (Briefing.com).


  141. Blair negative on Wal-Mart as online competition grows, size inhibits change

    03:28 PM ET · WMT

    • Wal-Mart (WMT -0.8%) shares are lower, partly due to a William Blair downgrade to Underperform from Market Perform, mostly on concerns about the company’s size which slows growth and dynamism, competition from online retailers, and the possibility that investors will rotate out of retailers in general at this stage of the economic cycle.
    • Given the downgrade, the firm cuts its annual EPS estimates for this year and next by a dime each, to $5.15 and $5.50, and cites sluggish retail sales in Q1 and weak consumer confidence among low-income households, as many of them face the expiration of benefits from the federal SNAP program and higher healthcare costs.


  142. NYT: Federal probe of Herbalife doesn’t look headed for criminal case

    03:13 PM ET · HLF

    • Herbalife (HLF +2.8%) shares bounce back after NY Times‘ Dealbook reports that the federal inquiry into the company shows no signs of developing into criminal case at this point, no grand jury subpoenas appear to have been issued, and FBI agents have not started interviewing witnesses.
    • Reports earlier today suggested NY’s AG threw his hat into the ring of investigations over pyramid scheme allegations around HLF.


  143. Macau casinos to show profit gains

    Yesterday, 09:36 AM ET · MPEL

    • JPMorgan forecasts a 31% Y/Y increase in profits of Macau gaming companies during Q1 on a 20% gain in revenue.
    • A higher mix of mass market traffic is helping to boost margins in the sector.
    • Macau related stocks: MPEL, MGM, WYNN, LVS, GXYEF, SJMHF.


  144. Total’s European refining margin continues to deteriorate

    Yesterday, 08:54 AM ET · TOT

    • Total (TOT) says its European refining margin dropped to $6.60/metric ton in Q1, vs. $10.10/ton in Q4 2013 and $26.90/ton in Q1 2013.
    • The decline demonstrates the weak health of the European refining industry, which has been plagued by lower demand for oil products on the back of the economic crisis and stricter environmental regulations; it also faces more competition from refiners from other regions, notably the U.S. where refining costs are lower.


  145. Something for traders to at least think about …

    The big picture
    https://www.tastytrade.com/tt/shows/slm-s-spotlight


  146. /cl almost touching 105.  104.91 now


  147. Good morning! 

    Go oil!  Yes to going short at $105 (or $104.95, where it is now) on /CL but tight stops and, if over, we'll just have to watch and see if they make $105.50 and then $106…


  148. Here's a little analysis on oil.  He believes that 104.48 is the pivot to watch.  

    http://mrtopstep.com/major-resistance-104-48-crude-oil/


  149. All is well this morning with the Nikkei up 3%, back to good old 14,440.  Hang Seng and Shanghai were only flat, with the Hang Seng dropping 200 points into the close.  India is down 1% and Singapore up 0.2%.

    That didn't worry Europe, whose futures gave them a +1% open and + 2% in Italy.  FTSE gave up half of it but the rest are hanging on(ish).  

    Our Futures are up half a point. Dollar still 79.80, oil testing $105, gold $1,303, silver $19.63 (I knew they'd catch up!), copper $2.998 (got worse, what demand), nat gas $4.55 despite snow by my house and gasoline $3.044.

    All we can do is watch and see if they can take out the strong bounce lines.

    Over 40% Of The S&P 500 Is In Correction Mode

    Equity Rallies Are Corrective, Downside Risks Remain, BofAML Says

    Tuesday Humor: Biggest Fed Dove Concerned About "Real Erosion Of People's Purchasing Power"

    Soaring Food Inflation Full Frontal: Beef, Pork And Shrimp Prices Soar To Record Highs

    Baffle With Fake BS: Chinese Q1 GDP Beats And Misses At The Same Time

    China Data Lifts European Shares

    Shares rise in early trading in Europe after stronger-than-expected growth data out of China offset market jitters over an escalation of tensions between Ukraine and Russia.

    China's Growth Slows

    Hundreds Missing in Korean Ferry Disaster

    Combat Vehicles in East Ukraine Raise Russian Flag

    A soldier said the unit was part of the 25th brigade of Ukraine's airborne forces and that they have switched to the side of the pro-Russian forces, but that couldn't be confirmed. 4:39 AM

    Amid Venezuela's Crisis, an Urgent Need for Dialogue

    Housing Market Slow to Hit Its Spring Stride

    A flurry of recent housing data suggests that the market's spring selling season is getting off to a slow start, a worrisome sign after a winter of expectations that warmer weather would rekindle growth.

    Buyout Loans Eclipse '07 Record in Deal Frenzy: Credit Markets. The U.S. junk-loan market has never fueled so much dealmaking. A total of $85 billion of loans have been raises this year to finance acquisitions, topping 2007's record pace, data compiled by Bloomberg show. Issuance is set to accelerate as Avago Technologies Ltd. locks in the year's second-biggest loan for its takeover of chipmaker LSI Corp as soon as today and Men's Wearhouse Inc. borrows $1.1 billion to fund its deal for Jos. A. Bank Clothiers Inc. Leveraged loans are booming as the value of takeovers in the U.S. reaches levels last seen in 2008. While regulators have warned excesses may be emerging in riskier parts of the market as the Federal Reserve's zero-interest rate policy extends into a sixth year, the loan surge underscores renewed confidence in the ability of the least-creditworthy companies to expand as the world's largest economy strengthens. First-lien borrowings at speculative-grade companies equaled 4.2 times their earnings before interest, taxes, depreciation and amortization in the first quarter, the highest since the 4.6 ratio in the last three months of 2007, according to S&P Capital IQ Leveraged Commentary & Data.


  150. Working/Burr – Yeah, working sucks.   So unprofitable!  We're in an economy that rewards capital appreciation strategies over productive labor – fortunately, I realized that early in life and took full advantage.

    Mini-goal on oil at $103.75 (/CL) - there's a full day's work already!

    Adding/Burr – I am itching to do so but PATIENTLY waiting to see if it's a real correction (strong bounce lines taken and held).  There's always laggards to pick up.  Last round we added 7 positions and yesterday we added AAPL.  I can't go adding 7 positions every time the market bounces or we'd have 700 positions by Jan 2016.  WHEN there is something compelling, THEN I will buy it – not before – and certainly not because I decided to arbitrarily allocate 33% at an arbitrary point in time.  Your idea on adding is right, we'll look to the LTP and see who's attractive first as we take strong bounce lines but maybe there's better opportunities now.  Lots of homework to do. 

    SPY 5 MINUTE

    Big Chart – Now we have the Nas falling from 4,370 to 3,940, which is just about 10% down right at the 200 dma, which is crossing the 20% up line at 3,960.  So, of course we're going to expect 2% bounces of 86 points to about 4,025 and 4,100 anything less than that is failure.  Same for the RUT, from 1,210 to 1,105 is 105 so 20ish bounces to 1,125 and 1,145.

    SPY DAILY

    Of course, it's more important the S&P gets back over the 50 dma at 1,846 – it's already there this morning – just needs to hold it.  1,850 is the official strong bounce line and the S&P didn't make new lows yesterday so it's still the goal.  Dow came back fast, but it's a BS index and NYSE 10,350 and 10,430 were our goals and we should be over that today as well.  So figure we have strongs on the Dow, S&P and NYSE and we'll need the Nas and RUT to confirm.  

    SPX WEEKLY

    Capitalization/StJ – Makes you wonder where the other $20Tn of stimulus went?  

    GTI/Decadence – Their advanced graphite division is currently saving the company as the underlying, traditional, industrial metals division was very weak last year.  I think it's a good sign, overall, as clearly people seem to value their expertise in this area.  They've invested a lot in R&D, something I very much like in a company and, though I liked them a lot better at $7 last year, I don't think $11.20 is out of control given the Future potential.  If all goes well, next year they should make about .50 per share, a p/e of 22 going forward.  

    Unfortunately, they don't have long options but I do like buying them for $11.20, selling the Sept $10 calls for $1.85 and the Sept $10 puts for .85 to drop the net to $8.50/9.25, so your worst case is owning 2x at $9.25 (17% off) and your upside worst case is getting called away at $10 for a 20% profit and your middle case is you roll the short calls and puts along in Sept to collect more money and widen the strike zone.  

    If they miss earnings (4/24) and get cheaper – I'll want to add them to the Income Portfolio.

    Good call on /NKD, Wombat.  

    Time to work!