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Will We Hold It Wednesday – S&P 1,880 Edition

SPY 5 MINUTEWhat a recovery!

Things are so good, they could hardly be better – as long as we ignore the non-existent volume that this house of cards is being built on, of course.  80M shares traded on SPY is half of the volume we got during the sell-off but it doesn't take 2 up days to make up for one down day – not at all.  In fact, it's only taken 5 up days with a total of 548M shares traded to erase 6 prior days of declines in which 860M shares were traded to the down side.

Still, we have to respect the phony technicals while they last and it's not like we're not willing to play along.  Our Long-Term Portfolio remains very bullish, as we only expected a short-term correction anyway, and has jumped $13,000 (2.6%) since last Thursday's review.  So GO MARKETS, from that perspective.  We don't care if it's a fake rally – as long as we can make some real money trading it, right?  

Yesterday we did a Live Trading Webinar (replay available here) where we reviewed a dozen bullish trade ideas in 90 minutes and today, at noon (EST) we will do a special presentation expanding on our "7 Steps to Constistently Making 30-40% Annual Returns" featurning two additional trade ideas and you can sign up for a FREE CLASS RIGHT HERE.  Here's the intro video: 

And what is step one of our 7 step program?  Wait for a sell-off!  Well, we just got one and that's why we found lots of things to buy.  Despite our Long-Term Portfolio's impressive gains over the past two days, it's still playing catch-up to our Income Portfolio, which is up 7% for the year because we cashed it out at the top in March and now we are able to go on a shopping spree, picking up things that have gotten cheap in the recent sell-off.  

The S&P may have come roaring back but it didn't bring everything back with it.  CMG, for example, is still down 20% after an earnings disappointment but people are very hung up on the fact that food costs went up faster than CMG is hiking prices (squeezing margins) while ignoring the 13.4% same-store sales growth.  Overall revenues for the chain were up 24.4% from last year – as they are also rapidly adding new stores while YUM and MCD have both reported flat numbers – and CMG hasn't even gone to CHINA!!! yet! 

Needless to say, we picked them up as a long as they tested $510 and I outlined that trade in detail in yesterday's Webinar (link above).  We don't expect a rapid turnaround – we're playing for 2016 and they may re-test $480 so we only have a 1/2 position on so far –  but it's certainly worth watching and the stock will rise sharply if their planned 5% price increases doesn't impact their turnover.  And, of course, should food prices moderate – big bonus!  

Last Wednesday, in the morning post, I mentioned that we were shorting oil at $104.95 and, as you can see from the chart on the right – we did very, very well on the sell-off we've been telling you would happen for weeks.  Oil hit $101.50 and, at $10 per penny, per Futures contract (/CL), I'll let you calculate the profits for yourself! 

We took the money and ran on our USO and Futures plays at $101.50 yesterday (because we're not greedy) but we did leave our SCO spreads intact, as those were simply bets that oil would stay below $105 into May expirations (16th), which is two weeks before the holiday weekend that kicks off summer driving season – so I think we're good with our target on that one.  

RUT WEEKLYI had mentioned last Monday that we were looking for strong bounces, so we took our TZA calls (ultra-short Russell) and XRT puts (short Retail) off the table and we discussed our targets, per the 5% Rule™, that we expected to hit on strong bounces which were:  Dow 16,240, S&P 1,850, Nasdaq 4,150, NYSE 10,430 and Russell 1,145.   

It was only yesterday that the Nasdaq finally popped over 4,150 and the Russell cleared 1,145 so now we'd like to see them hold it for a full day and THEN we will be in the mood to buy some more.  

Though we don't generally give away free trade ideas in our morning posts during earnings season (but you can sign up here and get them every day), we did point out that our TZA April $14/17 bull call spread paired with the short $15 puts that we had shared as a Twitter Alert on 2/28, was still "just" $1.90 last Wednesday morning with 2 days to expiration.  I suggested that, even though we were already up 115%, there was still another $1.10 of potential upside in the next two days.  

TZA closed at $16.83 on Friday, just short of our goal but the spread netted out at $2.83 and that was up 49% in two days, though up 221% from where our Members took the trade.  Now it's back to $16 and, at $15, we're going to like it again.  See – it's not complicated, is it?  

That's because our VALUE outlook for TZA doesn't change just because the PRICE does.  In Thursday's post we discussed RIG at $40, and HAL just had fantastic numbers, indicating strength in the sector, so you might want to re-read that one and consider that trade, we're likely to discuss it in today's Webcast, as it's one of my favorite upside deals at this level.  

Join us at noon (EST) and we'll continue this discussion LIVE!  


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  1. Good Morning!

  2. Good morning! 

    Check out this guy – very clever webcast and a noble cause:

  3. HBO-Amazon deal catches the attention of Netflix investors • 9:20 AM

    Shares of Netflix (NFLX) turn lower after HBO and Amazon sign an exclusive streaming deal to boost the library of Amazon Prime.

    NFLX -2.5% premarket to $363.69.

  4. Oil Lines

    R3 – 104.94
    R2 – 104.25
    R1 – 102.88
    PP – 102.19
    S1 – 100.82
    S2 – 100.13
    S3 – 98.76

    Once again, I have a Fib line at 101.80 and that was in play yesterday afternoon and night. It seems to be resistance now.

  5. Meanwhile:  

    Bartlett:  How Income Inequality Can Hurt the Economy 

  6. Tesla Motors in a hiring mode for new California facility • 9:26 AM

    Tesla Motors (TSLA) is hiring for a plant in Lathrop, California which it plans to modify and add manufacturing equipment. The site was previously used by Chrysler's Mopar unit.

    The EV automaker has posted opening for 32 jobs at the facility on its website. Most lean to the engineering and technical side.

    Tesla job openings for Lathrop facility

    Read comments

  7. Phil


    ATT here?

    i was on a beach two weeks ago when you did the entry on it with stock at 33

  8. Phil –  What to do about CREE?  My worst position is CREE.  I was assigned on some short puts and now have 200 x CREE @ 70   now 53.20 after so so earnings

    -2 Jan15 62.5C @ 8.4 now 3.00.

    I'm not sure if I believe in the stock, it was a trade I ignored gone bad.  I'd like to get out even if possible.  GS is saying that this price move is a buying opportunity.  I've lowered my cost basis down to 64.6 by selling the calls.  I'm guessing just to roll down the calls and sell more juice?

  9. Phil / GILD
    Was there a new entry for GILD posted yesterday – can't find it

  10. On GILD I'm trying to do the Jan16 -65P +65/80 BCS for a credit of -0.50.

  11. Burr //

    why such a huge spread ?

  12. /NKD has 200SMA death cross – holding my ground at 14500

  13. Well. I like GILD for the really long term.  Once all the hub-bub about the price goes away, or they lower the price, I think they'll easy be over 80 by Jan16.  But if they aren't I don't lose any money unless they are at 64.5, which after earnings isn't likely in my book.  So I have a 15 spread that's $10 in the money which I don't pay anything for.  

    Easy to calc payoff's too.  If GILD just holds 70 I make 500xspread, 75 = 1000xspread, 80=1500xspread.  

  14. /cl broke 102

  15. NFLX/Jabob – Those deals are going to get more and more expensive as they all go for exclusives.  Meanwhile, it sucks for consumers as we have to get Prime for this and NFLX for that or HULU for something else – ridiculous.  

    Oil/StJ – Should head up into inventories and, with expectations very low, they may pop on any kind of draw. 

    Preliminary data from the American Petroleum Institute shows crude inventories in the US rose by 519,000 barrels last week, well-short of the 2.3 million barrel increase forecast and far-below last week’s figure of a 10m barrels gain in inventories. Gasoline stocks were said to have fallen by 3.39 million barrels, exceeding expectations of a 1.7-million decline, boosting strong bullish sentiment on the markets. Distillate fuel inventories rose by 570 000 barrels, the trade association reported, defying projections for a 0.46-million drop.

    Later today the Energy Information Administration will release its weekly oil inventories report, providing stronger data on stocks in the US. Last week US crude oil supplies jumped by 10.0 million barrels to 394.1 million, sharply exceeding analysts’ projections for a moderate 1.75-million-barrel jump. This was the steepest build up in more than ten years, while gasoline decreased by only 0.15 million barrels, though the EIA reported that gasoline consumption was at the highest level since January.

    Watch Brent at $110 – if they get over that, then WTIC should go higher too.  It's about BNO $44:

    TSLA/Jabob – They have 6,000 workers now, not a very big hire.   Their PR people are simply amazing!  

    T/Maya – With T up 10% already, now I'm more excited about CHL  If they drop back to $42 or if they get over $45, I'll be liking them again:

    CREE/Burr – Here's my usual comment on them – never over $60.    

    CREE/Silent – We did just sell puts, we had a put and we sold it!  Currently CREE is having a visit from the downgrade police as idiot analysts scramble to be the first to say they always knew they were no good.  It was a small miss (5%) and mostly caused by a shift to lower-margin lighting sales while the exponential move in screen volume is trailing off as companies like HTC give up trying to play in AAPL and Samsung's pool.  

    I never liked CREE but that's mostly because they are usually too far ahead of their proper value, not because they're a bad company. I'd be kind of happy to buy them at $50 (WITH a 20% discount) and then happy to DD at $35 but not at all excited at $60.  You can sell 2015 $40 puts for $3.70 and that's net $36.30 on round one, which doesn't suck but, as I said, I'd let the downgrade police have at them and maybe they hit $52.50 and then you can sell the $35 puts for $4 (now $2.50) and THAT would officially be one I'd like for the Income Portfolio (10).  

    They are like many MoMos – I don't hate them, I just don't think they are a good value.  You sold the puts for something and you say $64.60, which would be the profit on the short calls so I imagine your basis is a bit lower than that.  So, if you want to stick with them, I'd buy back the Jan calls for $3 and sell the 2016 $50s for $12 and the 2016 $45 puts for $6.20 and that's $15.20 more in your pocket and your basis is now below $50 on 200 – not so bad if it's worth all the fuss to make $3K back. 

    GILD/Wombat – This is from yesterday morning:

    GILD/JMD – I would have liked them at $63.50 two weeks ago but back to $73 already is neutral territory.  Still, as long as you REALLY want to own them long-term, then you can sell the 2016 $65 puts for $8.50 and buy the 2016 $70/90 bull call spread for $7 and sell the July $72.50 calls for $4.90.  That's a net credit of $6.40 so you are covered to about $95 to the upside and your break-even to the downside is $58.60, which is 20% off the current price as your worst case to the downside.  Ideally, they stay between the 50 dma ($76) and the 200 dma ($70) post-earnings and, if not – RAWHIDE!  

    Big pop already today.

    /NKD/Wombat – Watch out for the Dollar – it's moving up, which the Nikkei likes.  If the Dollar cracks 80, /NKD will get back over 14,500 easily.  

    Oil/Burr – Not too surprising to see them run up into inventories.  It's what happens later that matters.  Also, per news this morning, more Ukraine worries helping to sustain it.  

  16. Thanks Burr // GILD

    thanks Phil // GILD

    watchin $$$$ like a hawk

  17. Ugh, catastrophically bad new home sales! Let the downside commence!

  18. $$$$ tanking as we speak

    short /nkd 14500

  19. New Home Sales are a DISASTER – Down 14% in March (and running out of weather excuses).  

    TZA May $15 calls just $1.60 – 10 in the $25KP and 20 in the STP with a stop at $1.40 (RUT 1,150+).

  20. hov ?

  21. Good for the Nikkei short (/NKD below 14,500) as lack of demand for housing $$$ will weaken it.   

    Also good for Dow short (/YM) below 16,400 – now 16,415. 

    Oil will have big trouble breaking up now as well – that was a very, VERY bad number!  

  22. ITB breaking below support at $23.50!  


  23. Now we have bad builder earnings and bad durable goods numbers to look forward to…

  24. HOV not off by too much yet

  25. GMCR getting sold this AM.

  26. stjeanluc,

    CLF has earnings today AH.  By any chance, do you have earnings stats on these guys?  Waht's their usual swing?  TIA!

  27. Seems Martin Wolf / FT has been reading Phil.

  28. USA EIA Crude Oil Inventories – W/W 3.5M vs Exp. 2.6M Prev. 10.0M.

  29. anyone confirm a div on KKR for me ? getting conflicting dates.

  30. Dollar rising and futures rebounding sharply after two terrible economic reports? Gimme a break…

  31. ISRG & IBRT / Phil … both look good for initial entry play now after nice earnings dip (per webinar Step 1 is wait for a sale). What play do you prefer down here at $385 on ISRG and $36 on IRBT? Thanks

  32. Looks like TZA stopped out already.  I bought the May30th 15's as they were only .07 more, so I'm holding for a bit.

  33. CHL / Phil, Hi was there a play mentioned on China Mobile .. it is now around $45 with 4% dividend…presume good candidate to buy stock and sell 2016 calls and puts for tranche 1….thanks

  34. Well, so much for shorting.   I guess we're back to bad news is good news on data.

    • EIA Petroleum Inventories:
    • Crude +3.5M barrels vs.consensus of +2.4M and +10M last week.
    • Gasoline -0.3M barrels vs. consensus of -1.4M and -0.2M last week.
    • Distillates +0.6M barrels and -1.3M last week.
    • Futures -0.12% at $101.63.

    Nothing for oil bulls to get excited about on this report.  

    HOV/Pwright – That's one of our featured trades in the Webinar today. 

    GMCR/CDT – Nice move down, too bad they didn't hit $110 first as we could have bought back the short puts in our spread.  Rising coffee prices hitting them.

    Wolf/ZZ – Thanks, good article. 

    KKR/Wombat – I don't see it yet.  

    Break/Yo – It's already broken, this market is completely unrealistic but that's because the Fed keeps telling people there IS a Santa Claus – and he comes any time we have even the slightest of dips.  

    ISRG/DM – With both, you have to wait and give the downgrade police a crack at them as they could go lower, though $380 is our predicted floor over the long run on ISRG.  IRBT is having a ridiculous drop vs the earnings report.  Consumer division is going gangbusters and military contracts were on hold – no surprise there.  

    With either one, step one is selling puts into the excitement of the drop.  You can sell ISRG 2016 $350 puts for $44 and that's net $306, which is another 25% off and 1/2 the highs.  On IRBT, you can sell the Dec $35 puts for $5.50 for net $29.50 and I'd be happy to own either at that price but, after that housing report – I'm even happier to wait a few days to see how low things can go. 

    TZA/Burr – Yep, sorry about those.  Better to stop out quick and reload when things make more sense.  

    CHL/DM – I like CHL as a long-term play.  They are simply having the same problem T used to have with up-front AAPL costs hurting their margins and we bought T back then too because it's the kind of thing that reaps long-term rewards.  Meanwhile, I would not jump in until we see a bar forming that's not red.  Especially when you are initiating 2-year plays – what's the hurry? 

  35. Thanks Phil //
    Did i miss the debrief on AAPL ?
    Been waiting to scale in another round

  36. TZA. In at 1.58 out at 1.48. Oh well. No harm, no foul. Mkt wants to go up

  37. Phil, current holdings in aapl

    -1 jan15  450 put, -5 jan16 400 put, -8 jan16 450 put

    +13 jan16 450/650 bcs

    +7 jan15 500/550 bcs

    how would you adjust if aapl falls after earnings


  38. TZA
    out as well
    Phil, you owe me another kobeburger

  39. /nkd breaking 14500

  40. DOW earnings was very good.  I like the stock with a 3.3% div and sell the Jan16 55C for 3.10

  41. ISRG, IRBT, CHL / Phil .. thanks sold the Dec $30 puts on IRBT (breakeven 25% lower than today's price) … will wait for ISRG and CHL downgrade police…

  42. wombat kobeburger or better

    Go to a fancy bucher shop and have them or take home and do yourself grind up a "prime" rib steak, tell them to leave the fat, no lean burger will do. It will cost at least $25 for the burger meat and the process seems like a capital crime but excellent. The rest is how you like it.

  43. Wombat – Historically, KKR goes ex-divd the first or second week of May.

  44. shadow
    JJ's secret Burger
    ½ Ground Sirloin Steak
    ½ Ground Brisket
    ½ Ground Chuck

    Option #2
    1 Ground Sirloin
    ½ Ground Chuck
    ½ Ground Pork Butt

    Grind meat right before grilling over oak.
    Anytime man, drop on by. : >

  45. SODA – Up big.  Speculation that SBUX will buy a stake in them.

  46. thanks albo

    shadow / burger
    if you really want a treat, sous-vide your burger MR ( I built my own – happy to share ) and then sear it on a tricked out grill at 1200 degrees. ( can also advise ) 


  47. wombat JJ's would be first choice for me Option 2 is as you say 2nd. Bay area?

  48. phil, i am exceedingly pleased with myself--I sold 2015 $450 calls on NFLX yesterday into the excitement.  they are up nicely today with the pullback.  i successfully resisted the temptation to sell April 25 or May calls because while i might have made more i could have gotten burned too.

    note to self: (1) sell into the excitement, (2) sell premium (3) give yourself many months to adjust in case you are wrong.  (basically, what you advise every day!)

  49. Oh sure, now things are dropping again.  Of course we can add /TF to the short list below 1,150.  

    AAPL/Wombat – We added AAPL to the Income Portfolio on the 15th, the $500/550 bull call spread that's already up $1,000 out of a potential $29,000.  We never got a dip in AAPL worth adding puts so we just have the bull call spread but, paying $50,000 back on $21,000 down at $550 – who needs short puts?  

    TZA/Louis – That's why I prefer the Futures for day-trading – so much less hassle.

    AAPL/JMD – I don't like the whole set-up.  You realize you are on the hook for owning 1,400 shares of AAPL at about $450 for $630,000, right?  It's fine if you have a $10M account but not very clever otherwise.  If AAPL drops $50 on earnings, not only will your short puts double in price but the margin will go up substantially as well, perhaps forcing you to sell at the worst possible moment.  While I like the Jan $500/550 bull call spread (see above), I don't like the 2016 $450/650 spread at all as the $650s, at $23 with a .26 delta, do very little to protect your $450s, at $98 with a .73 delta.  Essentially, you are so bullish on AAPL that you will be completely crushed by a downturn and, again, unless you have a $10M account – you probably won't be able to fix it.  

    With $500K, in our Income Portfolio, we ONLY have the spread I noted above, with a max risk (and HIGHLY doubtful it would go that far) of $21,000 and, in the $500,000 LTP, we have 5 2016 $450/650 bull call spreads that we ADJUSTED into (taking advantage of a dip) and we sold 5 2016 $450 puts, which obligates us to own $225,000 worth of AAPL, which would be 10% of our margin buying power.  That's as much as we want in a $500,000 portfolio but, more importantly, even if AAPL drops $100 to $425, we KNOW we will ride it out long-term.  Make sure you feel the same way about your 1,300 shares. 

    TZA/Wombat – If it's for a burger, hold it until tomorrow morning.  

    DOW/Burr – Very good but not cheap.  

    You're welcome DM.  

    SODA/Albo – Can't see what SBUX would want with them.  It's a rumor from one of those Israeli websites – I wouldn't trust it. 

    SodaStream surges after website says Starbucks close to buying stake

    Shares of SodaStream (SODA) are jumping after Israeli website Globes reported that the company is in advanced talks to sell a 10% stake in itself to Starbucks (SBUX). Israel-based SodaStream markets at-home soda makers. WHAT'S NEW: Starbucks is in advanced talks about buying a 10% stake in SodaStream in a deal that would value the Israeli company at $1.1B, Globes reported today. That valuation would represent a 30% premium over the company's price as of earlier today, the Israeli website added. An official announcement of the deal will be made soon, Globes quoted unnamed sources close to the deal as saying. WHAT'S NOTABLE: Last week, another Israeli website, Hebrew language Calcalist, reported that SodaStream was in talks to sell a 10%-16% stake in itself to a strategic buyer at a company valuation of $1.1B. PepsiCo (PEP), Dr Pepper Snapple (DPS), and Starbucks may have held talks with SodaStream about the matter, Calcalist previously stated. PRICE ACTION: In late morning trading, SodaStream jumped $4.45, or 11%, to $44.88.

    Man, you really can fool some of the people ALL of the time….

    NFLX/Lunar – Very nicely played!  

  50. One of these days, I'm going to have to get nice and rich like all you guys so I can afford a 1200 degree grill and $5000 hamburgers.  Only 26 and recently graduated from college though so plenty of time for that ;) .

    But hey, that's the reason I'm here!

  51. For you highest end smart phone wishes!

    New Technology Promises Bright and Easy-to-Read Microdisplays

    Full sun never an issue, even with sunglasses on.

  52. JPH
    $50 in meat, cause you grind it.
    I found an old circulator on craigslist, drove an hour to get it from an old science lab – $100
    I tricked out the grill myself ( really easy to do. )

    DIY Man !!!

    Shadow // SF

  53. wombat – I'd love to hear about the sous-vide and the grill.  I wonder if I could do that for our food truck burgers?  Drop me a email at

  54. Wombat, JPH

    You don't even need a circulator. Just fill a big pot with 130-140F water and periodically add heat to keep it in the zone. Put the burger in a flattened ziplock bag  and let 'er go for about an hour. Sear 'n serve. I built a sous vide temp controller years ago before discovering you really don't need it if you are willing to tend the water bath. I did a 2 1/2 lb prime ribeye in my 15 gallon brew kettle over 3 hrs. Came out perfectly med-rare! Just remember to pat dry the surface of the meat before searing it. That's the key to getting a nicely browned crust. If it's wet, it won't come out well.


    Wombat – No fuss – No muss. less than two bucks (w/o cheese)   ;)

  56. Thanks phil

  57. everyone is expecting a huge number form facebook

    expectations for AAPL are low but many saying buy now as its a second half story..makes me uneasy

  58. Oil really wants 102.  I'm expecting it to get rejected pretty hard.  This is its 3rd attempt today.

  59. CMG Phil … is there a current play to open for an initial play for this stock now it is around $510…. thanks

  60. Netflix to launch original Spanish-language series • 1:22 PM

    Netflix (NFLX -5%) announces it will launch an original Spanish-language series for the first time in 2015

    The company ordered 13 episodes of a comedy about feuding soccer team heirs called Nosotros los Nobles.

    What to watch: During the firm's earnings call (transcript) earlier this week, CEO Reed Hasting said the company is "very confident" that it will see success in Latin America. Despite the optimism, analysts forecasting international subscriber growth for Netflix have had a tough time getting a handle on where the ceiling is for the Latin American nations.

  61. Damn, busy day at my "normal job" and tons of earnings… I'll have to squeeze that in after 2:00 PM!

  62. YODI

    Doing OK?  Hope your knee rehab successful. My wife had hard time first two weeks but fine after that.

  63. 1020 / In-N-Out & Hold the Cheese -

    No cheese on that Double-Doube? That's Heresy. You need to be purified of tainted thought with pain for such apostasy!

  64. Look how the market has been trained to flatline while I'm doing my webcasts!  I think that's because we're the only real humans trading the market….  surprise

    1200 degree grill/JPH – I love my Viking!  Cost $4,500 but now that I've been in the house 15 years, that's just $300 a year – so worth it!    Considering how many parties we've had, I'd say it adds about .10 to the cost of each burger. 

    Speaking of learning, this range has been paid for 10x over by owning MIDD stock (company that owns Viking).  Check out their long-term chart!   This is one I used to pound the table on back in 2008/9, when they fell from $75 down to $25 – as if people weren't going to barbeque anymore…  Unfortunately, they haven't been cheap since, so we never talk about them but you get the idea – if you have a long-term goal, you can set up a stock strategy that will help you own the thing you want.

    Cool stuff Shadow.  

    Meat/Wombat – Don't you guys have good butchers that do that for you? 

    Best burger/1020 – For going out normally (not high-price), I like the Kobe Burger at the Cheesecake Factory (CAKE), it's the only one that's as good as the ones I make for myself.  

    You're welcome JMD and good call on oil.

    AAPL/Angel – I agree, it's very unlikely this Q is anything other than OK.  

    CMG/DM – In the STP, we have the June $515 calls, now $15.30, paid for with the short 2016 $280 puts, now $11 for net $4.30.  If CMG can't hold $500, we'll sell some other calls and roll the $515s lower, but I think $500 will hold.  

    VIX still sanguine at 13.40.  TLT not so complacent at $110.70 (but good for note auctions today and tomorrow) and XLF at $22 so all seems well. 

  65. Damn, who forgot to remind me to short WYNN?  

    All the MoMos looking weak this afternoon – that was a pre-drop signal last week so watch out. 

    TNA May $63 puts at $1 make a nice, speculative short.  

  66. Most, if not all, places that say Kobe burgers are using regular beef, biggest scam:

  67. phil..tks on the oxy……..dr craig………

    per your sous vide…how do you know the internal temp …of the meat…….do you go by the water……..i put my burger/steak in the oven until int temp about 110…then grill………same effect curious re your method…tks

  68. Sony real estate business to launch in August

    01:56 PM ET · SNE

    • Sony (SNE -0.1%) plans to launch a real estate business in August, according to Nikkei.
    • The company plans to leverage its information technology know-how to offer smart real estate guidance to clients.
    • The initiative falls under a broad plan by Sony to find new growth channels.

  69. McDonald’s vs. Chipotle: Customer wait times a factor

    01:50 PM ET · MCD

    • Janney Capital Markets delivers some common sense commentary on McDonald’s (MCD -0.2%) and its recent stumble in the U.S.
    • Analyst Mark Kalinowski notes the company’s vast number of menu items slows down service times and can lead to kitchen confusion and order mishaps.
    • At one time restaurant analysts chided Chipotle (CMG -1.9%) for its single pipeline approach to customer queues and simple menu, but the chain has bested most rivals in improving comparable-store sales over the last year.

  70. Google goes after Facebook’s app ads; WhatsApp hits 500M MAUs

    01:43 PM ET · GOOG

    • Google (GOOG -1%), which already offers app promotion/install ads for its AdWords search ad platform and AdMob mobile display ad network, has updated its offerings to allow marketers to target users based on app usage, as well as offer ads urging users to open apps they’ve already installed (but might be ignoring).
    • Much like Twitter’s newly-launched app install ads, Google’s revamped offering is aimed at Facebook (FB -2.4%), which drove 245M downloads last year via ads allowing developers struggling to get noticed within app stores to promote themselves on news feeds.
    • Google is also rolling out new reporting, automated bidding, and bulk-action tools for AdWords clients – the company calls them “enterprise-class” – and has confirmed it’s testing the use of offline data to measure search ad effectiveness (previous).
    • Meanwhile, WhatsApp CEO Jan Koum says his company has reached 500M MAUs – up from 450M in mid-February, when the Facebook deal was announced. Koum notes India (48M MAUs), Brazil (45M), Mexico, and Russia are WhatsApp’s biggest growth drivers, and promises to keep its apps simple and uncluttered; some rivals have a different strategy.
    • Facebook is lower ahead of today’s Q1 report. Pre-earnings commentary has been mixed.

  71. Dissecting GM’s Q1 tally

    01:39 PM ET · GM

    • General Motors (GM +0.9%) could show a slight loss in Q1 as it takes on a massive hit from costs tied to the ignition switch recall.
    • The consensus estimate of analysts is for adjusted EPS of $0.06 vs. $0.54 pre-recall and $0.67 a year ago, but a few firms such as Barclays have GM in the red for the period.
    • The automaker’s Q1 EPS could also feel a drag from foreign currencies and extra costs from a broad roll-out of new trucks, while solid pricing trends in North America are working in its favor.

  72. Microsoft reportedly bringing back Start menu in August

    01:05 PM ET · MSFT

    • The Verge reports the Start menu, beloved by many Windows 7 fans unhappy with Windows 8′s big UI changes, will likely be added to Windows 8.1 courtesy of an August update.
    • Microsoft (MSFT -1%) announced on April 2 (at its BUILD conference) the Start menu will return, but didn’t provide an ETA; past reports suggested it wouldn’t come back until the launch of Windows 9 (expected in spring 2015).
    • The company showed off a revamped Start menu at BUILD that included live tiles, and also demoed a feature that allows (touch-optimized) Metro-style apps to appear within distinct windows in desktop mode. The Verge’s sources state Microsoft is trying to get the latter feature ready in time for the August update.
    • Though PC sales are showing signs of stabilizing, Microsoft’s efforts to gain tablet share via dual-UI Windows 8 systems haven’t gone according to plan. Gartner estimates Windows 8/RT had a 2.1% 2013 tablet share, up from 1% in 2012.

  73. Oil companies fight plan to slow North Dakota energy production

    12:57 PM ET · CLR

    • North Dakota’s industrial commission is considering a proposal that would cut back on the state’s booming oil production as a means of controlling the amount of natural gas that’s being burned off at well sites.
    • North Dakota drillers currently flare more than a third of the gas because development of pipelines and processing facilities to capture it hasn’t kept pace with oil drilling.
    • “If production curtailment is the chosen regulatory path, then wells will be shut in or not even drilled,” says Roger Kelley, director of regulatory affairs for Continental Resources (CLR), one of the biggest players in the state.
    • Other top North Dakota producers include EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.

  74. Numericable pulls off record junk-bond issuance

    12:52 PM ET · HYG

    • In what may or may not end up being a bell-ringer of a deal, French cable company Numericable finalizes its record €7.9B junk bond offering, reportedly pricing the yield even lower than the initial whisper numbers. The size blows past the previous record – Sprint’s $6.5B issuance last year.
    • This deal is spread over €2.25B of euro-denominated paper, $7.75B of dollar-denominated, and across three tranches of varying maturities.
    • RBS’s Albert Gallo: “The new deal highlights strong growth in the European high-yield bond market, which has grown fivefold over the past five years to nearly €300B?.?.?.?Despite the strong supply, we expect European high-yield spreads to continue to tighten over the year, on recovering growth, easy ECB policy, stable fundamentals and low default rates.”
    • The proceeds are to be used to fund Altice’s (Numericable’s parent) purchase of Vivendi’s telecoms business.
    • Previously: Largest junk-bond deal ever on tap

  75. AT&T -3.3% post-earnings; reactions to wireless numbers mixed

    12:46 PM ET · T

    • Though investors aren’t thrilled with AT&T’s (T -3.3%) Q1 wireless numbers, Wells Fargo (Outperform) calls them “big time solid.” The firm notes net adds and churn were better-than-expected, and thinks Q1 results suggest the telco’s 2014 guidance is “quite achievable.”
    • Morgan Stanley (Equal-Weight) is less charitable: It estimates 500K of AT&T’s 625K postpaid net adds came from tablets, and notes cheaper Mobile Share plans – launched following intense price competition and promotional efforts from T-Mobile (TMUS -3%) – led wireless service revenue growth to fall.
    • Canaccord observes strong uptake for Next upgrade plans boosted subscriber adds, but expects the trend to moderate. The firm has cut its 2014 EPS estimate to $2.69 from $2.78 (consensus is at $2.71).
    • On the CC (transcript), management talked up the ability of Next adoption to lower subsidy expenses, and mentioned U-verse revenue is now on a ~$14B/year run rate.
    • Strong U-verse growth has narrowed AT&T’s wireline revenue declines, albeit while pressuring margins. The company promises wireline margins (-110 bps in Q1 to 10%) will improve in 2016.

  76. Goldman to profit as competitors exit commodities

    12:42 PM ET · GS

    • “The more banks that exit commodities trading, the less competitive it becomes for the banks which stick with it,” says Sandler O’Neill’s Jeffery Harte. “[Goldman Sachs has] the bigger franchise to be a winner. It now has a much bigger piece of a much smaller pie.”
    • While Barclays has its commodities business on the block, and JPMorgan have already agreed to unload at least parts of their operations, Goldman – whose three top execs got their start at the bank’s commodity unit – is holding firm and stands to gain market share.
    • “Right now it feels like we’re starting to maybe see the beginnings of some marginal benefit of competitors exiting parts of our business that otherwise, quite frankly, they had charged in with excess,” said GS CFO Harvey Schwartz following earnings results last week, proudly noting Goldman has been in the game since 1981.

  77. Wild ride for Supervalu

    12:17 PM ET · SVU

    • Supervalue (SVU) has been shopping its Farm Fresh and Shoppers grocery chains, according to dealReporter’s sources.
    • Shares of SVU have been on a wild adventure today, moving up 12% before falling back down to a 2.1% gain for the day. Volume is already 5X normal activity.
    • Previous: earnings

  78. China a big part of Disney’s box office success this year

    12:12 PM ET · DIS

    • Captain America: The Winter Soldier has raked in over $100M in China over three weekends to quickly become the 7th highest grossing imported film ever in the region.
    • The film’s smashing run follows closely on the runaway success of Frozen in China for Disney (DIS -0.5%).
    • The two films have a box office tally of over $1.7B between them.

  79. More profits taken in online broker names

    11:58 AM ET · AMTD

    • The online brokers trade lower despite a big earnings report from TD Ameritrade (AMTD -2%), and an upgrade to Outperform for E*Trade (ETFC -1.5%) from Wells Fargo ahead of its results after the bell today. Schwab (SCHW -1.5%) – reported Q1 last week.
    • Big picture: Though struggling for the last month amid the heightened level of HFT hubbub, the brokerage names have had major runs thanks to sharply higher levels of trading activity. The next catalyst higher will likely be boosted short-term interest rates … timing yet to be decided.
    • On the earnings call, AMTD management says it expects FY EPS near the high end of $1.20-$1.40 guidance. Street consensus is for $1.44.

  80. Plug Power plunges nearly 8% on secondary offer, short sales

    11:55 AM ET · PLUG

    • Plug Power (PLUG -7.7%) earlier this morning tripped a Nasdaq short-sale circuit breaker following news late yesterday that it was selling an additional 15M common shares, sending shares nearly 8% lower.
    • ~30% of PLUG’s shares are sold short, according to FactSet.
    • Shares haven’t been helped by a disclosure that the company sees Q1 revenues approximately at or moderately higher than the mid-point of previously announced guidance of $5M-$6M.
    • Ballard Power (BLDP -0.1%), which supplies PLUG with its fuel cells, and FuelCell Energy (FCEL -1.5%) also are lower.

  81. IGT tumbles on weak product sales; peers also off

    02:07 PM ET · IGT

    • IGT (IGT -10.4%) posted FQ2 EPS that was slightly above the guidance provided in a March 25 warning, and reiterated a forecast for FY14 (ends Sep. ’14) EPS of $1-$1.10. But the company also reported gaming product sales (40% of revenue) fell 27% Y/Y to $202.6M, after having grown 4% in FQ1. Machine units recognized fell 45% to 7.9K, a reversal from FQ1′s 20% growth.
    • Gaming operations revenue fell 9% Y/Y to $230.4M (-8% in FQ1), with IGT’s installed base falling 6% to 53.4K and yield declining 5% to $47; weaker MegaJackpots revenue is blamed.
    • Interactive revenue rose 20% Y/Y to $79.8M (thanks to a 27% increase in social gaming revenue), but that’s a slowdown from FQ1′s 41%. DoubleDown’s MAUs fell 1% to 6.2M after growing 26% in FQ1, but its bookings per DAU rose 16% to $0.43.
    • Peers are also lower: BYI -3.9%. MGAM -2.1%. SGMS -4.1%.
    • FQ2 results, PR, CC transcript

  82. Plug Power plunges nearly 8% on secondary offer, short sales

    11:55 AM ET · PLUG

    • Plug Power (PLUG -7.7%) earlier this morning tripped a Nasdaq short-sale circuit breaker following news late yesterday that it was selling an additional 15M common shares, sending shares nearly 8% lower.
    • ~30% of PLUG’s shares are sold short, according to FactSet.
    • Shares haven’t been helped by a disclosure that the company sees Q1 revenues approximately at or moderately higher than the mid-point of previously announced guidance of $5M-$6M.
    • Ballard Power (BLDP -0.1%), which supplies PLUG with its fuel cells, and FuelCell Energy (FCEL -1.5%) also are lower.

  83. Keystone supporters say new delay revives push to bypass Obama

    11:36 AM ET · TRP

    • The latest Keystone XL delay is having an unintended consequence: the revival of the effort in Congress to bypass the White House by forcing approval of the project.
    • Forcing approval would be difficult; Senate backers admit they still are a few votes short of the 60 needed to advance the bill, two-thirds of the Senate – 67 members – would be needed to override a likely presidential veto, and Senate Majority Leader Harry Reid so far has declined to bring up legislation that could embarrass Pres. Obama on Keystone (TRP).
    • But the oil isn’t going to stay in the ground, and transporting oil by rail has more than doubled in the last three years; at the NTSB’s Rail Safety Forum this week, regulators and industry reps are discussing everything from tank-car design to emergency response planning.

  84. AIG opens a new line: Insurance against cyber injury

    11:18 AM ET · AIG

    • The nascent cyber insurance market grows up as AIG becomes the first major insurance company to offer policies compensating companies for cyber attacks which damage property and even people.
    • The market has been slow to develop as actuaries like lots of numbers and there aren’t a lot of them from cyber attacks yet, but Tracie Grella – who oversees AIG’s cyber insurance offerings – says the company has been able to draw on actuarial experience from other business lines.
    • “The fact that an insurance company has said there is enough actuarial foundation to offer products in what is today not a widescale problem but which certainly creates anxiety, is a very good sign,” says Aneesh Chopra who served as the U.S.’s first CTO.
    • Grella says AIG has seen its first claim – one arising from the so-called “Heartland bug.”

  85. California bill moves ahead

    10:52 AM ET · MDBX

    • San Francisco Assemblyman Tom Ammiano submits a bill to tighten the regulations governing the use of medical marijuana by adults. It would make it illegal for physicians to prescribe medical pot for patients they have not examined and bar prescriptions by doctors who have a financial stake in a pot dispensary.
    • The assembly Public Safety Committee passed the bill yesterday.
    • Somewhat controversial is the provision for the Department of Alcoholic Beverage Control to enforce the law. The California Narcotic Officers Association cites the irony in allowing an agency with regulatory responsibility over the use of recreational substances to regulate medical products. The senate version specifies the state health department as the regulator.
    • The bill, if passed, could lay the groundwork for a tax-and-control scheme for recreational pot use similar to Colorado and Washington.
    • (MDBX) (CANN) (AERO) (PHOT)

  86. CLSA: Cotai to be a major catalyst for Macau casinos

    10:41 AM ET · MPEL

    • Gaming in revenue in Macau will soar to $90B in 2018 after factoring in new casinos in Cotai, forecasts investment giant CLSA.
    • The firm sees the VIP and mass market segment both contributing to the explosive growth.
    • By comparison, Macau brought in $45B last year and major casinos in Nevada had revenue of just under $24B.
    • Macau related stocks: MPEL, MGM, WYNN, LVS, GXYEF, SJMHF.

  87. New home sales plunge in March

    10:19 AM ET · ITB

    • The seasonally adjusted new home sales pace of 384K in March is 14.5% below that of February and 13.3% lower than a year ago. It’s the slowest pace since July, and 14.5% is the 3rd-largest decline in 20 years. The median sales price of $290K is up 12.6% Y/Y. The supply of new homes on the market is 6 months at the current sales pace, up from 5 months in February.
    • Homebuilder ETFs: ITB -1.7%, XHB -1.2%.
    • Toll Brothers (TOL -1.6%), Lennar (LEN -1.9%), Hovnanian (HOV -1.5%), Pulte (PHM -1.6%), KB Home (KBH -3.3%), Beazer (BZH -2.4%), Ryland (RYL -2.6%)
    • The 10-year Treasury yield dips two basis points to 2.69%. TLT +0.4%, TBT -0.8%
    • Full report

  88. No buyers to be found. Russia scraps another bond sale

    09:57 AM ET · RSX

    • With no bids at acceptable prices, the Finance Ministry cancels this week’s sale of up to $560M of nine-year and five-year ruble notes. It’s the seventh cancellation in the last eight weeks.
    • “They decided to test the market and the market wasn’t responsive,” says Danske Bank’s Vladimir Miklashevsky. “A rather expected development given the geo-political turmoil.”
    • The Market Vector Russia ETF Trust (RSX -0.1%) is off 21% YTD, and the Micex index is on offer for 4.8x estimated earnings, the cheapest valuation among 21 developing countries monitored by Bloomberg.

  89. Dr. Pepper Snapple trims costs to offset sluggish volume

    09:53 AM ET · DPS

    • Shares of Dr. Pepper Snapple (DPS +4.4%) trade higher after the company tops earnings estimates with its Q1 report and reaffirms guidance at a level that is also ahead of the consensus mark of analysts.
    • Volume growth was only up 1%, but the company was able to lower costs and realize some productivity gains in the quarter.

  90. T / Phil – Should we buy back our T July $35 calls on this dip? They are currently $0.85 for a nice $0.26 profit in 15 days. We can sell some more after a rebound.

  91. Buffett can’t find a bear for Berkshire meeting

    09:02 AM ET · BRK.A

    • Since 2009, Berkshire Hathaway (BRK.A, BRK.B) has invited six journalist/analyst questioners to the Woodstock of Capitalism to join shareholders in querying Warren Buffett and Charlie Munger for several hours. Last year, Buffett added a twist by inviting “credentialed bear” (i.e., provably short Berkshire stock) Doug Kass.
    • Hunting for a bear for this year’s show, Buffett has been unable to find one.

  92. Popular agrees to sell about half of U.S. branches

    08:53 AM ET · BPOP

    • As tipped last night, Popular (BPOP) inks deals to sell its operations in Chicago, Southern California, and Central Florida, leaving the lender to concentrate its U.S. mainland business in New York and South Florida.
    • Together the deals include 41 branches, about $1.8B in related loan portfolios, and about $2.1B in deposits. The Chicago buyer is First Midwest Bank (FMBI), the California buyer is Banc of California (BANC), and Florida is Harbor Community Bank.
    • The deal will include the closing of Popular’s mainland headquarters in Rosemont, IL along with an Orlando office. Off the roughly 550 positions at those locations, 100 will be move to other mainland offices and 200 to Puerto Rico.
    • Popular says the sales will results in a net premium of about $25M along with a goodwill writedown of $160M and restructuring charges of $53M.
    • Shares +1.9% premarket
    • Previously: Popular nears sale of some mainland U.S. branches

  93. Millcreek-

    Since you're doing the cooking sous vide style, you don't need to know the exact temp of the meat, just the bath temp, and the approximate cooking time. In other words, you can't overcook the meat if it's sitting in a water bath at the desired final cooking temperature, so it's okay to overshoot a little on the time. From experience I know 45 minutes at 140F will adequately cook a 3/4" thick ribeye. I went with 3 hrs at 130F for the bone-in 2 1/2 lb 2" thick ribeye I cooked a few months ago. Just stick a thermometer in the meat when you take it out to be sure it's cooked all the way through. I use a 140F bath shooting for 130F just to save time, but the more conservative way to do it would be to set the bath temp at 130F for med-rare. I'm a big fan of melted stilton on my steaks, so for extra credit, crumble some on top and shove it under the broiler for a few minutes.

  94. That AIG news hits home.  I used to work with Tracie during my time at AIG, and my company now competes with AIG in the cyber market.  Rare to see insurance news on this board.  :)

  95. More color on Biogen’s Q1 results

    08:44 AM ET · BIIB

    • Top line revenues of $2.1B (+51%) driven by Avonex’s $761M, Tecfidera’s $506M, Tysabri’s $441M and Rituxan & Gazyva’s $297M.
    • Revenue growth has accelerated for five consecutive quarters.
    • The company recorded 100% of Tysabri revenues subsequent to its acquisition of the complete rights to the product in Q2.
    • GAAP diluted EPS was $2.02 (+13%) and net income $480M (+12%).
    • Full year guidance includes revenue growth of 26% – 28% and GAAP diluted EPS of $9.85 – $9.95.
    • (BIIB)

  96. SunPower up 8.6% on $250M Google deal

    08:41 AM ET · GOOG

    • Google (GOOG) and SunPower (SPWR) team to provide financing for about $250M of residential solar lease projects, with Google committing up to $100M and SunPower about $150M.
    • The program is expected to allow thousands more to finance solar power systems through SunPower, joining about 20K who already do so.
    • Press release
    • SPWR +8.6% premarket

  97. Three breakfast reads

    08:05 AM ET

  98. Solid quarter from Delta despite winter weather

    08:05 AM ET · DAL

    • Delta Air Lines (DAL) reports stronger-than-expected numbers for Q1 as the carrier improved its efficiency.
    • Passenger traffic rose 3.5% during the period on a 1.7% increase in capacity.
    • Revenue for Delta’s Latin America business was up 18.1% to $655M.
    • Fuel expenses fell $167M from a year ago on an average fuel price of $3.03 per gallon.
    • DAL +2.2% premarket

  99. More on Boeing Q1: Net profit drops 13%; ups EPS guidance

    07:56 AM ET · BA

    • Boeing (BA) net profit -13% to $965M.
    • Core operating earnings +12% to $2.095B; margin 10.2% vs 9.9% a year earlier.
    • Boeing Commercial Airplanes revenues +19% to $12.74B; operating profit +23% to $1.5B, margin 11.8% vs 11.4%; deliveries 161 planes vs 137 planes. Booked 235 net orders, backlog over 5,100 airplanes valued at $374B.
    • Boeing Defense, Space & Security revenues -6% to $7.63B; operating earnings -6% to $778M, margin 10.2% vs 10.3%.
    • Increases 2014 core EPS guidance to $7.15-7.35 from $7.00-7.20 prior to reflect the benefit of a tax settlement that Boeing will recognize in Q2. Consensus is for $7.38. Expects revenue of $87.5-90.5B vs forecasts of $90.09B; deliveries of 715-725 commercial jets.
    • Shares +1.9% premarket. (PR)
    • Previous

  100. Earnings today:

    Consensus – 10.21
    Whisper – 10.54
    Average move – 5.8%
    Priced into Options – 4.0%

    Consensus – 0.49
    Whisper – 0.49
    Average move – 5.5%
    Priced into Options – 3.8% (May)

    Consensus – 0.16
    Whisper – 0.17
    Average move – 11.3%
    Priced into Options – 9.46% (May)

    Consensus – 1.25
    Whisper – 1.27
    Average move – 9.4%
    Priced into Options – 6.91%

    Consensus – 0.25
    Whisper – 0.26
    Average move – 8.0%
    Priced into Options – 10.20%

    Consensus – 1.22
    Whisper – 1.25
    Average move – 5.3%
    Priced into Options – 3.54%

    Consensus – 0.41
    Whisper – 0.43
    Average move – 4.6%
    Priced into Options – 2.98%

    Low VIX not helping. Earnings Whispers has a proprietary forecast rating and they indicate that FFIV is the most likely to trade higher after the report. It's at the highest of their range at 70% chance FWIW.

  101. Phil- earlier today you said you didn't like the Jan 2016 450/650 BCS for Apple, but last week you put out for a buy of the 500/650 BCS! Do I have something wrong or miss you changing your mind?

  102. Actually it was on April 3 that you said to buy the AAPL Jan16  500/650 BCS .

  103. Kobe/Rustle – Sure, I'm very happy with Wagyu, which is what most of it is – although there's plenty of variation in quality there as well. 

    T/Akad – As I think the market is weak, I'd rather keep the protection.  

    AIG/Palotay – Generally, insurance is nice and boring, so nothing to discuss.  We used to play AIG, back when it was interesting…

    AAPL/Craigs – Big difference because the $450s have a much higher delta (.72) than the $500s (.59) vs the $650s (.26) so 1/2 as much net protection on the $450/650 (.46) as the $500/650 (.23) is a pretty big difference.  Also, not paired with an unworkable amount of short puts makes a difference.  

    Working on earnings….

  104. Buffet doing a nice interview on CNBC. 

  105. China seized a Japanese cargo ship (Mitsui).

    Anyone with local perspective on this?

  106. New trade Jan 16 BIIB sold 240 Puts at 30.10.

  107. Didn't see a lot to do today.  Very boring.  Burned some premium, and had a couple of small trades.   I made about as much money today as a parking meter. 8-)

    Could be some action AH, tho.

  108. Ships/Scottmi – stories a coupla days old. Check sources other than Japanese or US, though – thos one is pretty good on this matter:

    There's a lot of sword rattling going on in the area, and a lot of history that people are still unhappy over. That explains a lot of it. The US should be vary careful, as Asians remember that the US giving permission to Japan to expand in the 1890s was tragic for the rest of the area. I don't have a good feel about whether China simply wishes to send a warning to Japan (and the US) or if they're feeling expansionist themselves.

  109. Earnings/StJ - 

    • AAPL – I like our bull call spread just to make sure we don't miss it if they fly higher.  Wouldn't be surprised if they miss and test $450 though, short-term.  Still, wouldn't play the downside. 
    • CAKE – Same cost issues as CMG and weather means it's very doubtful they hit .49.  They did .47 last year and Q4 was .57 and they missed those estimates by 0.02 and fell hard to $42.60 before recovering.   Unfortunately, CAKE has no leaps but I do like them so I like the Oct $45/49 bull call spread at $2, selling the June $47 calls for $1.90 for net .10.  Assumption is they head lower and we get a free bull call spread (and we can sell puts when they drop).  If they go higher, then we sell puts anyway and roll the short calls.   10 long spreads ($2,000) and 8 short calls ($1,520) in the STP.
    • CROX – Always a good long-term hold under $15.  Weak Dollar was probably good for them as more and more sales overseas.  Long winter not good for them as they are really a summer shoe but, again, that's a US thing.  Expectations very low (.17) so hard to disappoint so I like selling the 2015 $12 puts for $1.60 to establish a position at net $10.40, but I'd only add it to one of our portfolios if they miss and we get a better price. 
    • FFIV – They are worth $100, easy but, unfortunately, they cost $108 – so no bargains here.  15% growth expected from last year and I'd love to buy them if they miss and re-test $100 but I'm not too keen on gambling either way where they are. 
    • FB – We had a butterfly on them last Q that worked out well and they are back in the range where it might again but I think they'll do well and you can sell the 5 June $60 puts for $4 ($2,000) and cover with 4 Jan $60/50 bear put spreads at $4.40 ($1,760) for a net $240 credit – let's do a set of those in the STP – our worst case is we end up with some FB short puts below net $50 and I'm fine with that.
    • QCOM – I like BRCM better but these guys are good too.  Not too sure they'll hit their number @ $1.22/share though they did have a nice beat in Q4 @ $1.26.  Had they sold off, I'd like them long but they didn't and they are too good to want to short – tempting though it may be.  
    • TXN – Yawn!   They never do much and no reason to think that will change.  Also a good butterfly candidate, buying 2016 $50 calls for $3.10 and $40 puts for $3.25 ($635) and selling the June $44 puts for .65 and the the June $48 calls for .75 ($140) as it puts you on a path to collect $1,400 in long premiums against the $635 investment over 3 years.  Let's put 10 of those in the Butterfly Portfolio.  

  110. China/Scott – That's pretty drastic action, could get complicated if they expand it but I think the issue is specific to Mitsui and that specific case.  I wish they'd do the same thing to BP and make them pay Gulf victims or XOM in Alaska….

    And what Snow said (thanks for perspective, Snow). 

    BIIB/IHS – We used to love those guys. Still good but I can never get into trading them at 10x where we started. 

    Oil faded out to $101.50 at the close.  

  111. FB looks good!  

    • Facebook (FB): Q1 EPS of $0.34 beats by $0.10.
    • Revenue of $2.5B (+71.2% Y/Y) beats by $160M.
    • Shares -3.9%.
    • Press Release

  112. I thought Buffet sounded like he had a three martini lunch :) .

    Really hoping for a shot at APPL cheaper here

  113. Buffett/Cdel – Well it was some kind of wine bar they were meeting at.  Still, very sad, he's getting older.  I'm gonna have to go to the annual meeting this year – could be last chance to see him…

    QCOM disappoints – should have gone with my gut on that one:

    • Qualcomm (QCOM): FQ2 EPS of $1.31 beats by $0.09.
    • Revenue of $6.37B (+4% Y/Y) misses by $110M.
    • 188M MSM chip shipments, in-line with guidance of 180M-195M.
    • Expects FQ3 revenue of $6.2B-$6.8B and EPS of $1.15-$1.25 vs. a consensus of $6.59B and $1.25, and MSM chip shipments of 198M-213M.
    • Expects FY14 revenue of $26B-$27.5B and EPS of $5.05-$5.25 vs. a consensus of $26.8B and $5.13.
    • Shares -2.6% AH.

    FB with big spikes up and down but settling around $63.  QCOM $78.  

    Waiting on the rest.  

  114. expansionism/snow:   Japan does not have an expansionist mindset.

    I will give you one simple reason why we can't:  We don't have enough people and our population is getting smaller every year.  We're having trouble keeping people in the towns that we already have, where are we going to find people to inhabit the places we take over? (unless we starting using robot colonists, but thats a couple of decades down the road ;) )    Everyone in the country and in the world knows this.  How could Japan possibly be an expansionist threat? Its like completely ridiculous.


    The U.S. wants Japan to military up in order to take the burden off itself and still keep a check on China's rising military prowess, but I gotta be honest with you, I'd rather the Stars and Stripes just keep a base on Okinawa and Yokosuka indefinitely and leave the Self-Defense Force patrolling the waters and keeping Godzilla at bay.  Pretty soon all we're going to have is old grandpas and thats not going to help win any wars or anything.

  115. Great point Kinki, though I wouldn't keep shouting about how non-threatening you are or, next thing you know, Putim will begin building bases to "help you out".   surprise

  116. CAKE misses!  Another winner for us!  

    • The Cheesecake Factory Incorporated (CAKE): Q1 EPS of $0.43 misses by $0.06.
    • Revenue of $481.4M (+4.0% Y/Y) beats by $2.56M.
    • Press Release

  117. Snow – thanks..

  118. Putin/Kinki:  ROFL. Yeah, Putin knows this better than anyone, unlike Sarah Palin, we actually can see Russia from our backyard in Hokkaido.  The minute the U.S. pulls out of Japan, I think he starts sending troops to the Kuril Islands.   But thats why I'm selling IRBT puts.  We're gonna need some of those Roombas outfitted with laser targeting and ballistic missiles — and alot of them! :D

  119. AAPL 7 for 1 split!!

  120. That's going make for some really strange strikes….

  121. AAPL with kick-ass earnings and a 7:1 split – Christmas comes early!!!   Oh, also returning $135Bn to investors through buybacks and dividends.  Re-opens in 10 mins.

    • Apple (AAPL): FQ2 EPS of $11.62 beats by $1.44.
    • Revenue of $45.65B beats by $120M.
    • 43.7M iPhones (above expectations), 16.35M iPads (below expectations), 4.1M Macs.
    • Expects FQ3 revenue of $36B-$38B vs. a $37.8B consensus.
    • Shares halted.
    • CC at 5PM ET. Press Release.

  122. AAPL: Now mom and pop and get some shares for themselves and their kids too ;)

  123. AAPL/Kinki – Still going to be $100 very soon after split…

  124. That 7:1 split will really make it a lot easier to trade…

    That miss on iPad is a little worrisome. They really seem to be losing market share quickly in that segment.

    They'll be around $75 after split Phil. Do you expect them to gain 30% this year? We need to hear guidance first I think. That's what killed them last time.

  125. AAPL – so our existing option strike prices are automatically adjusted for the split?  

  126. AAPL/Phil: Yeah, now I wish I had a few more of those $71.428/$78.571 Bull call spreads in my portfolio.  Aaah, Cest la vie. ;)

  127. Damn, should have grabbed the Nas Futures (/NQ) – just popped 30 points!  

    IPad/StJ – Cook says they were supply-constrained and that sounds true to me.  As to $100 – I was targeting $650 anyway so that's $700/7 – about right and I think we'll get there fasted with the split.  Guidance is the same BS low-ball as usual, no worries there.  

  128. Anyone know when the split takes affect?

  129. $565!  Wheeee!  

    • Along with its FQ2 results, Apple (AAPL) has announced a 7:1 stock split. Split-adjusted trading will start on June 9.
    • The company's buyback authorization has been raised by $30B to $90B, and its quarterly dividend hiked by 8% to $3.29 (2.5% yield).
    • Shares remain halted. They'll resume trading at 4:45PM ET.

  130. up 8%.  yipeee!   Phil it was about a year ago at the AC conference when the stock first touched 400 that you were pounding the table on them.  Paying off now.  

    • Texas Instruments Inc. (TXN): Q1 EPS of $0.44
    • Revenue of $2.98B (+3.5% Y/Y) beats by $30M.
    • Press Release

  131. AAPL/Terra – Thanks but you missed it when I would write daily dissertations on why people should buy AAPL at $85 in the crash.  I was at the point where I would grab people by the shoulders and shake them until they agreed to make AAPL at least 10% of their holdings at that price!  

    This is going to be great for us as it will take people a while to realize that the $500-$600 channel is now a $71.50-$85 channel and we can sell options on both sides of the range for probably very high prices.  The dividend is getting juicy too, now 2.5% and that means people won't be getting out so fast on the downturns.  

    See how easy it is to make 138% a year:  

    Submitted on 2014/04/15 at 3:31 pm

    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.  

  132. Fortune/Sun/Brave/Righteous – it was a lurking kind of day, with nothing much happening and then I see the brief exchange on AAPL BCS, and deltas, and all those kind of things. Then I see Phil making the case for putting on a straight spread on AAPL (Jan 16 500/550 BCS), and I think why no short put. I scratch my head, look at the logic, and kick myself for missing the opportunity. So I think what have I got to lose – and why not have a poke at something a bit better. So I take a punt on the Jan 16 500/560 BCS @ 24.50 (which I know is never going to fill). Well what do you know? – with a lateish swoon on AAPL, the thing fills. It rarely happens, but if you keep on pushing you just might get lucky.

    Phil, I don't care whether you are cashy or cautious, eating your breakfast McMuffins with winning futures trades, or calling every twist and turn in the market – keep on doing what you are doing!!!!!!!!!! Best thing I ever did stopping by here on my quest for a little knowledge on options trading. Thanks a bunch!

  133. AAPL split effective June 9th

  134. AAPL at $85/Phil:  Well, guess what, you can get it at that price again and still worth it!  :D

  135. My day has taken a turn for the better ! ! ! ;-)

  136. TQNT – Earnings positive for RFMD since they are now linked. 

  137. LOL, thanks Winston and congrats – nice adjustment!  

    Good point Kinki.  How long until the next split is what we should be betting.

    CROX earnings are NOT out today.  Doesn't change the trade – just have to wait until next week.  

    FFIV up and TXN at $48. 

    All in all, a good set of calls. 

  138. stjeanluc 
    April 23rd, 2014 at 2:45 pm

    thanks a lot for guidenance!!

  139. Intraday quadruple top on oil at $102.  SCO is lookin good!

    Opened a May $15/$19 BCS at $1.20 earlier today.  We'll see how that goes.

    Also speculatively opened a Apr-23 $105/$110 BCS today at $2.65 which I'll hold until expiration to delight in that yummy premium decay on the $110 and the delta appreciation on the $105.

  140. Phil,

    I am thinking of adding a butterfly on EMC and would like your input.  I am considering +10 Jan 16 $20 Put @ 1.03, +10 Jan 16 $32 Call @ .96; -10 May 14 $26 Call @ .44 and -10 Jan 15 $24 Put @ $1.13 for a net entry of .42 debit.  The June 14 $26 Calls can be sold for  .71 and the $27's for .32 so if I think this should work since EMC has been trading in a range of $22 -$28 for the past year.  It might  climb to $32 or slightly better if IT spending picks up, but it's anybody's guess.

  141. Food for thought

    Divorce Your Ego From Your Trading

  142. Looks like once again my Trade of the Year Idea for BNN (AAPL) is a big winner!  The two trades I gave them on 3/6 were:

    • 10 CLF 2016 $18/27 bull call spreads at $2.55, selling 10 2016 $13 puts for $1.95 for net $600 – still about that price and I still like them.   

    • 10 AAPL 2016 $450 puts sold for $41 (we've been selling that one all year), buying 10 2016 $450/600 bull call spread for $65 for net $24 ($24,000) which makes $126,000 profit at $600 (525%).  Should be up very nicely tomorrow!  

    I guess they'll invite me back again next year.  cheeky

  143. SCO/JPH – If they lose the Ukraine as an issue to fear, oil will drop like a rock.  

    EMC/Sibe – First rule of Butterfly Club is don't pick stocks that move 20% in a month.   EMC moves 20% OR MORE all the time!  It's a cheap gamble, and that's fine, but I don't like them in general as that space has no moat and is getting commoditized very quickly.  

    Ego/Invest – It's like the old saying "Leggo my Ego"  blush

  144. Last year's AAPL trade on BNN was good for 550% so a person who did that trade with just one contact at $2,400 would have gotten back $13,200 and then they could have used that to buy 5 of the new spreads at $12,000 and now those are on their way to $63,000 (plus the $1,200 cash they didn't spend this year) - not bad for 2-year returns!  

  145. Earnings Whispers had CROX today…. Oh well!

    In the meantime, they seemed to have hit it with FFIV! I'll have to check that out for future earnings.

  146. Congrats on all the great picks today Phil.  I unfortunately missed a lot of the earnings plays, but Apple is going to be spectacular for my account tomorrow.  

  147. Sent from Bloomberg for iPad

    Watch this video at

    Apple on Cusp of Significant Product Cycle: Blair
    April 23 (Bloomberg) — Rosenblatt Securities Analyst Brian Blair discusses Apple’s second-quarter earnings and buyback program with Julie Hyman on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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  148. Sent from Bloomberg for iPad

    Watch this video at

    Warren Buffett Is ‘Not Tempted’ to Buy Tech Stocks
    April 23 (Bloomberg) — Warren Buffett, the billionaire chairman of Berkshire Hathaway, comments on tech stocks. He speaks with Betty Liu on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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  149. Sent from Bloomberg for iPad

    Watch this video at

    Facebook Beats Street: What Analysts Are Missing
    April 23: Rosenblatt Securities’ Brian Blair and Bloomberg’s Cory Johnson break down Facebook’s first-quarter earnings report.

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  150. Sent from Bloomberg for iPad

    Watch this video at

    How Uber Broke Into the Chinese Market
    April 23: Ryan Graves, global head of operations at Uber, discusses the company’s international expansion.

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  151. From Bloomberg, Apr 23, 2014, 4:24:07 PM

    The trading floor of the Hong Kong Stock Exchange on Aug. 13, 2013. The MSCI China Index is largely composed of mainland companies listed in Hong Kong. Photographer: Jerome Favre/Bloomberg

    MSCI Inc. (MSCI)’s proposal to include mainland Chinese equities in its global indexes is getting a cold reception from investors.

    To read the entire article, go to
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  152. From Bloomberg, Apr 23, 2014, 6:29:30 PM

    An employee beneath a carriage of a London Underground Northern Line train at Alstom SA’s Traincare Centre in London. Photographer: Chris Ratcliffe/Bloomberg

    General Electric Co. (GE) is in talks to buy Alstom SA (ALO), the French builder of trains and power plants, in what would be GE’s biggest acquisition ever, people with knowledge of the matter said.

    To read the entire article, go to
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  153. From Bloomberg, Apr 23, 2014, 6:20:24 PM

    The opening of the first Apple Inc. store in Latin America, in Rio de Janeiro, on Feb. 15, 2014. Photographer: Dado Galdieri/Bloomberg

    Apple Inc. (AAPL) took dual steps to reassure investors concerned with its growth prospects, reporting a surge in iPhone sales and giving its shareholder payout program a $30 billion boost.

    To read the entire article, go to
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  154. From Bloomberg, Apr 23, 2014, 6:15:42 PM

    April 9 (Bloomberg) — Chris Weafer, partner at Macro Advisory, talks about Russian stocks amid the ongoing tension with Ukraine.
    He speaks with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    It was a vacation that Russian stock broker Alexander Antipov said he dreamt about for two decades: a tropical getaway from the harsh Moscow winter to the white-sand beaches of Acapulco, Mexico.

    To read the entire article, go to
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  155. From Bloomberg, Apr 23, 2014, 4:54:08 PM

    A Wal-Mart supercenter store in Sao Paulo. Photographer: Paulo Fridman/Bloomberg

    A relentless focus on everyday low prices helped Wal-Mart Stores Inc. (WMT) become the world’s largest retailer. The strategy hasn’t been working in Brazil.

    To read the entire article, go to
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  156. From Bloomberg, Apr 23, 2014, 6:25:19 PM

    New Zealand’s central bank
    increased interest rates for the second time in two months as an
    economic recovery gathers pace, and said it will assess the
    extent to which currency gains curb inflation.

    To read the entire article, go to
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  157. From Bloomberg, Apr 23, 2014, 7:03:23 PM

    Billionaire Patrick Drahi is
    winning friends in the junk-bond market.

    To read the entire article, go to
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  158. From Bloomberg, Apr 23, 2014, 8:38:21 PM

    A customer looks at an LG Electronics Inc. organic light-emitting diode (OLED) television, which uses an LG Display Co. panel, at the company’s Bestshop store in Seoul, South Korea. Photographer: SeongJoon Cho/Bloomberg

    Asian stocks swung between gains
    and losses as investors weighed better-than-estimated earnings
    from Apple Inc. and Facebook Inc. and an unexpected drop in home
    sales in the world’s largest economy.

    To read the entire article, go to
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  159. From Bloomberg, Apr 23, 2014, 7:10:47 PM

    Following Dell Inc.’s lead of going
    private may be HTC Corp. (2498)’s best shot at rebuilding itself into
    one of the top smartphone makers.

    To read the entire article, go to
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  160. From Bloomberg, Apr 23, 2014, 4:21:09 PM

    Pfizer and AstraZeneca are trying to make that transition from a time they used armies of sales representatives to sell broadly used drugs for basic health conditions. Photographer: Chris Ratcliffe/Bloomberg

    Do a few things, and do them well.

    To read the entire article, go to
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  161. From Bloomberg, Apr 23, 2014, 12:31:16 PM

    Buildings stand in Tel Aviv. Demand keeps building for Tel Aviv real estate in spite of Israel’s reputation as a powder keg at the center of Middle East conflicts and international efforts to boycott its exports because of its military occupation of the West Bank, where Palestinians hope to establish an independent state. Photographer: Ahikam Seri/Bloomberg

    Ehud Barak, the former Israeli prime minister, doubled his money when he sold an apartment in north Tel Aviv’s Akirov Towers that he’d bought in 2003 for about 12 million shekels ($3.5 million).

    To read the entire article, go to
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  162. From Bloomberg, Apr 23, 2014, 1:32:38 PM

    China will offer 80 projects in
    industries dominated by state-owned entities for private
    investment as the nation seeks to let markets play a bigger role
    in the economy.

    To read the entire article, go to
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  163. From Bloomberg, Apr 23, 2014, 4:18:00 PM

    A potential home buyer views a model home in San Ramon, California, on Jan. 24, 2014. Photographer: David Paul Morris/Bloomberg

    The housing recovery in the U.S. is running out of steam as buyers balk at record prices and higher mortgage rates that are making properties less affordable.

    To read the entire article, go to
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  164. I guess we can expect a big move on the Nasdaq tomorrow!

  165. From Bloomberg, Apr 23, 2014, 9:36:17 AM

    The Bundesbank has said Germany’s economy probably strengthened at the start of the year and European Central Bank President Mario Draghi predicts an “ongoing recovery” for the 18-nation currency bloc. Photographer: Akos Stiller/Bloomberg

    Euro-area services and manufacturing expanded faster than economists forecast in April, indicating the economy continued to strengthen at the start of the second quarter.

    To read the entire article, go to
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  166. From Bloomberg, Apr 23, 2014, 6:37:29 AM

    Britain is on course for its fastest economic expansion since 2007 this year, fueling speculation the Bank of England might raise interest rates as early as the fourth quarter. Photographer: Simon Dawson/Bloomberg

    U.K. Chancellor of the Exchequer George Osborne achieved his deficit-reduction forecast in the latest fiscal year after stronger-than-expected growth boosted tax receipts.

    To read the entire article, go to
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  167. From Bloomberg, Apr 23, 2014, 6:03:20 PM

    Twenty years of Chinese Internet. Photographer: Philippe Lopez/AFP/Getty Images

    Twenty years ago this week, China became the 77th country to connect to the Internet. It was a late and modest start — a single network in Beijing’s then-outskirts made the connection — but growth since then has been spectacular. China is now home to the world’s largest population of Internet users. Its social media platforms are some of the world’s most innovative. And its premier online marketplace — Alibaba — is about to launch what will probably be this year’s most valuable initial public offering.

    To read the entire article, go to
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  168. From Bloomberg, Apr 23, 2014, 7:03:25 AM

    At least the flows are better. Photographer: Sakis Mitrolidis/AFP/Getty Images

    There was a time not so long ago when the vast majority of experts agreed that a country could not emerge decisively from a financial crisis unless it solved problems of both “stocks” and “flows” — that is, secured a flow of money to cover its immediate needs and found a way to manage its stock of outstanding debt over time.

    To read the entire article, go to
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  169. From Bloomberg, Apr 23, 2014, 4:29:42 PM

    At what cost? Photographer: Michael Okoniewski/Bloomberg

    We hear a lot about how health care in the U.S. costs more than it does in than any other country. We hear less about the fact that higher education also costs more here than in any other country, and for many of the same reasons: We provide a very high-quality product to those who can pay, funded through a combination of public and private funds, and unlike many other countries, we do not send in the heavy hand of the state to control costs and prices by fiat. Instead, we subsidize pretty much whatever consumers decide to consume and producers decide to give them.

    To read the entire article, go to
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  170. From Bloomberg, Apr 23, 2014, 6:03:20 PM

    Look out behind you, Mario Draghi! Photographer: Ralph Orlowski/Bloomberg

    (This is the second in a three-part series.)

    To read the entire article, go to
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  171. It's funny when you try to make a point and get your facts confused. Of course, it's so easy to do that when your facts don't match reality:

    Over at the mother ship, David Corn has assembled a bunch of clips of Rand Paul being less than reverential toward Ronald Reagan. Here's an example from 2009:

    People want to like Reagan. He's very likable. And what he had to say most of the time was a great message. But the deficits exploded under Reagan….The reason the deficits exploded is they ignored spending. Domestic spending went up at a greater clip under Reagan than it did under Carter.

    Ouch! That's not just a hit on Reagan, it's a direct suggestion that his fiscal policy was worse than Jimmy Carter's. Jimmy Carter's!

    David has a bunch more along these lines. But here's my favorite part:

    After this article was posted, Paul's office sent this statement from the senator: "I have always been and continue to be a great supporter of Ronald Reagan's tax cuts and the millions of jobs they created. Clearly spending during his tenure did not lessen, but he also had to contend with Democrat majorities in Congress."

    Um, didn't Jimmy Carter also have to contend with Democratic majorities in Congress? Bigger ones, in both houses? Or am I thinking about a different Jimmy Carter?

  172. And BTW, GW Bush had Republican majorities and spending also exploded so the narrative loses a lot of credibility. The facts are that Dems president have generally been better with deficits than Reps ones over the last 40 years. Obama's record will not look great, but it's not like he inherited a surplus like GWB and the deficit curve is actually going in the right direction as opposed to Bush and Reagan at the same time in their presidency!

  173. I realize that PSW is not a social policy blog, but I would be surprised if economic reverberations do not follow the political change presently taking place in the legalization of marijuana.  I'm firmly against it, I think it is a very badly thought through policy change, and with California about to jump on the bandwagon, this thing has real legs now.


    What's the big problem with a joint or two?  You have to go down the rabbit hole on this one.  Let me say up front that I'm not "anti-drug" by nature, having taken them all at one time or other, from psychedelics to heroin, from psylocibin to cocaine — I used to live in Bogota, Colombia, among other places.  My only drug now is one glass of wine with dinner twice a week and St. Pelegrino the rest of the time, but I'm not "reformed" in any quasi-religious or moral sense, I simply became bored with it at some point, and have a bunch of kids, so it just stopped.


    Marijuana, as smoked in the U.S. for the last 50 years or so, is mostly pretty tame stuff.  But when you mix a super hybrid strain with the wrong person — and there are quite a few of those, like the guy that freaked out at the party on one joint and had to sleep over so his parents wouldn't find out — you are now allowing 4000-5000 lb. automobiles on the road with these guys at the wheel.  And that my friends, puts us all up the Limpopo with Yellow Jack.  I well remember the first time I was given a superstrain — jungle grown in the rain forest, no scientists in sight — and drove my dad's Chevy onto a Bogota highway at 10pm with a few friends.  The dialogue went as follows:  "Uh, man, what are you doing, you're going to wipe us out!!!"  "Huh, what, whaddya mean, am I going too fast, the limit is 75 [140kph]?  "No, no, you're only going 15 miles per hours, we're gonna get rear-ended and killed!!!"  This was at least three years after I started smoking in boarding school, but what I was used to had 1/10th the potency of my first Colombian  joint.


     Where this is going is pretty simple: you can easily test for, and measure, alcohol levels.  There's no conceivable way to do the same with superstrains.  How long do you have to wait?   How does a cop measure how much is in your blood?  Does that even have any relevance?  Dope is a psychotropic, it affects different people very differently, and the growers are already gearing up to create stronger and stronger varieties.  Wandering around Copenhagen cafes is one thing, strafing the I-5 at midnight on the stuff is quite another. 


    But it's about to happen.  I will conclude where I started:  this is an extremely bad idea, and it's being rushed into without adequate study or preparation [e.g.,vTHC level measurements, in plants and in people].  And what about the guy who had two drinks at the party and started climbing a huge tree at the party and fell off and had to be driven to the hospital?  Give him half a joint of Yellow Amnesia, Nitro OG, ABNormal or Psychosis Cheese [all available at your local store today] and you will not want your daughter to ride home with him no matter how legal it is.  I dunno, man, I don't think the Chinese are going to follow suit with this riff any time soon.

  174. ZZ/ completely agree..(and i got stopped for doing 15 after guessing i was going 70)

    you can have a glass of wine and not get drunk..however.try a little diesel and see if you don't get  'drunk"

  175. From Bloomberg, Apr 23, 2014, 9:52:39 PM

    A man examines an Apple Inc. iPhone 5. Photographer: Daniel J. Groshong/Bloomberg

    Apple’s iPhone was a smash hit in the BRIC countries last quarter, setting sales records in the emerging markets of Brazil, Russia, India and China, CEO Tim Cook said on the earnings call today.

    To read the entire article, go to
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  176. From Bloomberg, Apr 24, 2014, 1:27:45 AM

    April 24 (Bloomberg) — Ukrainian Economy Minister Pavlo Sheremeta discusses the endorsement of a $17 billion loan to the country by the staff of the International Monetary Fund and efforts to spur growth.
    He speaks with Ryan Chilcote on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    President Barack Obama said the
    U.S. and its allies have additional sanctions against Russia
    ready to go as the crisis in Ukraine escalated with Ukrainian
    security forces moving against pro-Russian separatists.

    To read the entire article, go to
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  177. From Bloomberg, Apr 24, 2014, 2:12:55 AM

    Customers try Apple Inc. products during the opening of the first Apple store in Latin America, located at the Village mall in Rio de Janeiro, Brazil, on Saturday, Feb. 15, 2014. Photographer: Dado Galdieri/Bloomberg

    U.S. and European stock-index
    futures climbed as investors assessed the outlook for corporate
    earnings after profit at Apple Inc. and Facebook (FB) Inc. beat
    estimates. New Zealand’s dollar gained after the nation’s
    central bank raised rates and nickel advanced.

    To read the entire article, go to
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  178. From Bloomberg, Apr 24, 2014, 12:01:00 AM

    Facebook’s revenue in the first quarter rose 72 percent to $2.5 billion, beating the average analyst estimate of $2.36 billion, according to data compiled by Bloomberg. Photographer: Andrew Harrer/Bloomberg

    Facebook Inc. (FB) was once mired in
    mobile-advertising doldrums. That was so 2012.

    To read the entire article, go to
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  179. From Bloomberg, Apr 23, 2014, 7:00:01 PM

    Recently constructed homes stand at a Taylor Wimpey Plc residential housing site in Langley, U.K. Photographer: Jason Alden/Bloomberg

    When James Seabury found his first
    home in northeast England in November, he had to borrow almost
    all of the 140,500-pound ($236,000) purchase price.

    To read the entire article, go to
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  180. Heineken revenues increase 3.4%

    03:15 AM ET · HEINY

    • Heineken’s (HEINY) Q1 revenue rose 3.4% to €4.04B but missed consensus of €4.24B.
    • Beer volumes +1.5% on a like-for-like basis to 38.2M hectoliters, below forecasts of 40.3M hectoliters.
    • Softness in Asia and Russia partially offset a pick-up in Africa and parts of Europe.
    • Heineken reiterated that its expects revenue to grow in 2014 on a like-for-like basis and excluding currency effects. The figure inched up just 0.1% in 2013. (PR)

  181. Unilever’s sales hurt by currency fluctuations

    03:01 AM ET · UL

    • Unilever’s (UL) Q1 sales dropped 6.3% to €11.4B, hurt by currency weakness in emerging markets.
    • “Growth continued to slow in the emerging markets, particularly in South Asia and South East Asia,” Unilever said. “Overall, developed markets remained weak although there were some further signs of improvement in southern Europe.”
    • Underlying sales increased 3.6%, above analyst forecasts of 3.3% but softer than growth of 4.9% a year earlier.
    • Underlying selling volume +1.9% vs consensus of +1.7%; prices +1.6% vs +1.5%.
    • Sales breakdown: Personal Care €4.2B, Foods €3B, Home Care €2.2B, Refreshment €2.1B.
    • Declares quarterly interim dividends of €0.285 and £0.2338 a share. (PR)

  182. Novartis net profit jumps 24% to almost $3B

    02:20 AM ET · NVS

    • Novartis’ (NVS) Q1 net profit leapt 24% to $2.97B and beat consensus of $2.7B, boosted by new drugs such as cancer treatment Afinitor and multiple sclerosis pill Gilenya. Sales in emerging markets, particularly China, also helped lift Novartis’ earnings.
    • Net sales rose 1% to $14.02B, falling short of estimates of $14.25B.
    • Sales of medicines launched in 2009 or later rose 17% to $4.3B. Gilenya revenue +31% at constant exchange rates to $552M.
    • Operating profit +22% to $3.5B.
    • Adjusted profit was flat at $3.21B, or 1.31 a share, with the EPS figure in line.
    • Novartis reiterated its forecast that 2014 sales will increase by a low to mid-single-digit percentage in constant currencies, and that core operating profit will grow more than sales.
    • Novartis’ results come after the company announced over $15B worth of deals in a shake-up of its portfolio earlier this week. (PR)

  183. Notable earnings before Thursday’s open

    12:05 AM ET · AAL

  184. Notable earnings after Thursday’s close

    12:10 AM ET · ABAX

  185. Thursday’s economic calendar

    12:00 AM ET

  186. FCC to reportedly allow “fast lane” ISP charges; will Netflix pay?

    Yesterday, 07:29 PM ET · NFLX

    • Net neutrality supporters won’t like this: The NYT and WSJ report the FCC will propose rules tomorrow that let ISPs charge content providers extra for priority access to their networks. The commission will continue prohibiting ISPs from limiting or blocking individual services.
    • FCC chairman Tom Wheeler has already hinted the commission could make such a move. Today’s reports come after an appeals court threw out the FCC’s existing neutrality rules in January; Netflix (NFLX) shares fell on the ruling.
    • Netflix, which accounts for a giant chunk of downstream U.S. broadband traffic, recently joined other Internet giants in paying direct peering fees to Comcast; that quickly led to a big improvement in Comcast’s Netflix streaming speeds. But Reed Hastings has made it clear he’s not thrilled with the deal, and wants tougher neutrality laws imposed.

  187. Facebook’s CC: Messenger users top 200M; slower ad growth expected

    Yesterday, 07:07 PM ET · FB

    • Over 200M of Facebook’s (FB) 1.28B MAUs use Facebook Messenger, Mark Zuckerberg shares on the Q1 CC. That figure, which comes as Facebook begins requiring mobile users download the standalone Messenger app to use it, suggests Messenger’s user base is on par with Instagram’s and ~40% of WhatsApp’s. (CC live blogs I, II)
    • Outgoing CFO David Ebersman notes headcount rose 39% Y/Y in Q1, and expects GAAP costs/expenses will grow 35%-40% in 2014; GAAP growth was 32% in Q1, and non-GAAP growth 26%.
    • Ebersman also warns Y/Y ad sales growth (+82% Y/Y in Q1) will slow meaningfully going forward. Facebook’s 2014 revenue growth consensus (also accounts for payments/other revenue) was at 44.6% going into earnings.
    • Sheryl Sandberg cautions Facebook’s auto-play video ads (launched last month amid high expectations) won’t be a major contributor this year. On the other hand, she notes use of Facebook’s custom targeting ad tools has grown 10x Y/Y, boosting ROI (and with it, ad prices).
    • Though accounting for just 16% of Facebook’s MAU base, North America produced 47% of Facebook’s Q1 revenue, down just slightly from Q4′s 48%. Facebook’s North American ARPU ($5.85, up $2.35 Y/Y) remains well above its ARPUs for Europe ($2.44, up $0.84), Asia ($0.93, up $0.29), and elsewhere ($0.70, up $0.20).
    • FB +3.7% AH. Q1 results, details, slides.

  188. Tech earnings guidance: Texas Instruments, Xilinx, ServiceNow

    Yesterday, 06:41 PM ET · TXN

    • Texas Instruments (TXN) expects Q2 revenue of $3.14B-$3.4B and EPS of $0.55-$0.63, largely above a consensus of $3.15B and $0.52. Shares +3.4% AH. (Q1 results, PR)
    • Xilinx (XLNX) expects FQ1 revenue to be flat to up 4% from an FQ4 level of $617.8M. That implies a midpoint of $630.2M, below a $638.4M consensus. Shares -5.1% AH. Rival Altera (ALTR) -4% ahead of tomorrow’s FQ1 report. (FQ4 results, PR)
    • ServiceNow (NOW) expects Q2 revenue of $160M-$162M and full-year revenue of $652M-$657M, above consensus forecasts of $156.7M and $644.2M. Shares -1.6% AH. (Q1 results, PR)

  189. Apple to raise more debt for cash returns; Cook open to big acquisitions

    Yesterday, 06:19 PM ET · AAPL

    • Apple (AAPL) aims to deliver annual dividend hikes going forward, new CFO Luca Maestri states on the CC. With the company’s domestic cash balance now at $18B, Apple will once more tap debt markets to help pay for its dividend and freshly-expanded buyback program. (CC live blogs: I, II)
    • Tim Cook partly attributes FQ2′s soft iPad sales to inventory changes; slowing tablet market growth might also be playing a role. iPad ASP was at $465, up from $440 in FQ1 and and $439 in FQ4 (suggests a mix shift towards the iPad Air).
    • Healthy emerging markets demand contributed to iPhone strength – BRIC sales hit a record, thanks in part to China Mobile. iPhone ASP came in at $596 vs. $637 in FQ1 and $577 in FQ4; Maestri suggests a mix shift towards the 4S contributed to the Q/Q drop.
    • Cook states Apple has bought 24 companies in the last 18 months – some are known to the public, but not all – and is “on the prowl” for deals. “We look for companies that have great people and great technology and that fit culturally and we don’t have a rule that says we can’t spend a lot or whatever.”
    • Also: 1) Angela Ahrendts will begin working as Apple’s retail chief next week. 2) 20M Apple TVs have now been cumulatively sold. 3) Roughly half of all iPhone buyers and 2/3 of iPad buyers were new buyers of the respective products. 4) There are now nearly 800M iTunes accounts. Will credit cards linked to them be leveraged for a payments service?
    • AAPL +7.7% AH. FQ2 results, split announcement, details.

  190. Here’s What The Buy Side Expects From Starbucks On Thursday

    03:12 AM ET | by Leigh Drogen Includes: sbux

    Starbucks Corp. (SBUX) is set to report FQ2 2014 earnings after the market closes on Thursday, April 24th. Last quarter there was some concern that Starbucks sales might be down because of the weather and lower customer traffic in shopping centers where many Starbucks stores are located. As it turned out Starbucks did come up short on revenue, but also managed to top profit expectations by a small…

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  191. 7 ‘Sleep Well At Night’ Dividend Stocks

    Yesterday, 03:21 PM ET | by Dividend Growth Investor

    #summary_content { margin: 22px 0 38px 0 !important; }#summary_content *{ font-family: Helvetica !important; color: #2A2A2A !important;
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  192. AAPL/ Phil … great pop to start the day. Should we take some profits on the initial excitement? Suppose the rule to sell half if in doubt applies. I agree AAPL should go higher over the next year but wonder will some profit taking take the price back down to allow re-enter at better prices when the dust settles or the market pulls back. Your thoughts as always are appreciated.

  193. Reminder: long /rb into weekend?

  194. Good morning!  

    AAPL/DM – Rule #1 (and we only have 2) is: ALWAYS sell into the initial excitement.   That's it.  There are only 6 simple words yet people seem to be endlessly confused by them for some reason.  There's "ALWAYS", that's pretty clear – it means all the time – it's the opposite of don't.  Then there's "sell", that too seems obvious, the opposite of buy.  "Into" is just a preposition, can't imagine that's where things break down and "the" I believe is a basic article – if that's causing confusion then I doubt any of the other words make sense either.  

    That leaves us with "initial", and now we're into something because it does mean "existing or occurring at the beginning" though, of course, beginning also means opening and we do have an opening bell, so there's a clue right there.   Finally, we have "excitement" and that's what initial is modifying.  Are people excited about AAPL's earnings?  Sure they are – you are, right?  That's why you don't want to sell, that's why we have Rule #1 – to remind you to sell exactly at the time you probably won't want to.  

    So, we're going to take some profits (and this goes for directional bets, not spreads – and the shorter-term, the more urgent it is) as soon as the excitement begins to wear down.  Rule #2 reminds us that, no matter how great we think the profits are going to be, we should still sell half.  Why is that?

    Because, if I am up 50% on a position and I take 1/2 off the table, now I can set a stop at 0% on the other half and I'll still be up 25%, even if it fully retraces on me.  If I set my stop at 25%, I lock in 50%.  We KNOW, for a fact, that we will get better prices for our options into a rally so, when the momentum slows, we take 1/2 off the table and MOST of the time, that's the best price of the day.   Even if it's not, even if the options go on to make 100%, we STILL make 75% on our full position.

    So, in game theory, taking a 50% profit off the table with a stop at 25% locks in 37.5% and pays 75% if the other half goes to 100%.  Leaving 50% profit on the table means a 20% retrace will drop you back to 30% and you lost compared to taking half off or, if we flatline from there, you also lose because the option pricing will calm down and ONLY if you were wrong and the stock keeps going higher (or lower, depending on your bet) will you do worse, but only 25% worse vs 50% better if the stock pulls back.

    That's why, statistically, we ALWAYS sell into the initial excitement and, when in doubt, we sell half anyway.  

    If you feel this is going to be a multi-day move, just put a very tight stop on 1/2.  Selling half doesn't mean you MUST sell, it means you should have a tight stop on 1/2 and keep track (if it's an option) of the highest price paid at any given time and make sure you get at least 80% of that price.  Again, that's if you thing the move is going to go long past the open.  90% of the time, it doesn't.

    Also, don't forget you can always get back into a position or take a new position (like we did with XRT) with a small part of your profits.  Remember XRT, we actually sold almost exactly at the best price of the month.  Why, because we followed our rule when there was a big spike down.  

    We HOPED that XRT would go below $80 but we still took MOST of our money off the table (switching to the much cheaper $79 puts, just in case we regretted getting out), but that didn't stop us from following our rules.  Why did we not sell on the drop to $82?  Because we had a target of $80 and $82 wasn't close enough, though we almost regretted it and, in truth, we would have made much more money selling 1/2 at $82 and then buying it back again on the bounce to $85.  

    That's another factor in ALWAYS selling into the initial excitement – it certainly doesn't stop you from getting back in if you turn out to be wrong.  The thing is, usually you are not and, when you do sell half, you regret not selling it all a hell of a lot more often than you regret selling the half.  

    Also, finally, you need to learn how RELAXING it is to take profits off the table and leave a profitable 1/2 positions that is simply making you bonus money, while you have a comfortable profit already off the table.  The value of that is hard to measure, but just as real!  

    Looking at the bigger AAPL picture, our target for 2016 in our Stock of the Year trade, was $650.  There is nothing that happened, other than the split, that changes that target for us and we think the split is worth $50 extra bucks.  That gives us a target of $700 or $100 post-split.  There's nothing in the numbers that surprises us – this is WHY we had that target in the first place.  

    So, given our $550 base value for Jan there's no reason AAPL shouldn't test the top of it's current channel at $600 on these earnings so, for any 3+ month options, I would set a stop about $10 below wherever it peaks (in case it doesn't get there) but, for a shorter-term option, you are better off taking 1/2 off the table early this morning (when the upward momentum slows) and spending that money on a long bull call spread – as I noted yesterday, our two AAPL trades of the year turned the first $2,400 into $13,200 and then, reinvesting that $13,200 into the second trade puts you on track for $63,000 – that's a LOT more than you make just leaving the first trade on the table, right?  

    We'll have lots of ways to play AAPL today, tomorrow and next week – but you won't be able to do any of them without CASH!!!

  195. Gasoline/Burr – A bit high at $3.09 to play a long this week.  Still might go up, but $3.10 is, hopefully (for the sake of consumers) a top.  

  196. Phil/CMG- I did not stop out and instead rolled the May 525 calls to Jun 515 calls as you had suggested, but obviously so far this has not worked out as hoped. So, do we cut losses or wait a bit for near term recovery, or roll to an even longer option? I have cash waiting to be deployed in this account, so I look forward to your guidance going forward.

    AAPL-please continue to shout out your suggestions since I believe that we are just beginning the next big product cycle here as they move into new arenas and find new ways to utilize their existing products and ecosystem.

  197. AAPL/Phil … thanks for the in-depth response :)

  198. So far, the play on AAPL seems to be fade the open.

  199. Damn.. all I had to do was sit on the TNA puts.. I sold them at the open as I assumed this would be a banner day for the mots.   Could get back in… just watching everything right now.  Cash burning a hole in my pocket.

  200. mkts not mots  hahah

  201. I'm really surprised at AAPL's pullback from opening price!

  202. Wow.. look at TNA go!

  203. and XRT finally