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Thrilling Thursday – Our Apple Trade of the Year Pays Off Early!

Go Apple!!! 

AAPL was our 2014 trade of the year, so we are thrilled with their Q1 earnings and expecting to see $600 on this run (I sent an Alert to our Members early this morning and you can see it on Twitter as well) detailing our strategy as well as discussing PSW's Rule #1 and it's practical implications.  In our first Webcast of the year, we picked AAPL as our top trade idea and again, on TV on March 6th, I was almost embarrassed to say AAPL was once again our trade of the year for BNN (it was last year's trade too).  

NDX WEEKLYThe fact was, there simply wasn't a more obvious way to make money tnan buying AAPL at just over $500.  When AAPL dipped to $480 in February, we PRESSED our long bets from January, rather than abandon them.  As I was saying, our 2013 trade of the year was also AAPL and I hate to seem like I don't have any other ideas but that options spread netted 550%, turning $2,800 into $15,400 in 2013 (the spread matured this year at 614% but we killed it early).  

Rolling that $15,400 into this year's trade has another 525% of upside potential (at AAPL $650), which would return $80,850 if AAPL is at $650 or better in Jan 2016.  So, starting with $2,400 in Jan 2013, we can parlay our bet to $78,450 in profits (3,268%) in just 36 months – not bad!

This stuff isn't hard folks, that was starting with just two contracts in 2013 and following our trade of the year.  In 2012, our trade of the year was BAC – which turned out to be the best-performing stock in the S&P that year.  In fact, on Jan 5th of 2012, I laid out my case for putting 100% of your portfolio into BAC and simply leaving it there for the year.  I was even crazy enough to go on TV on the 17th and say the same thing!   Lucky it worked out, really…

Of course, we don't only make picks once a year.  Just yesterday morning, in Member chat, Wobat said: "Did i miss the debrief on AAPL?  Been waiting to scale in another round," to which I replied:

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?  

That's a very simple options strategy we were able to employ on earnings day, where we buy the 2016 $500 calls for $68 and sell the 2016 $550 calls for $47 for a net of $21.  Since the calls we buy are $50 lower than the calls we sold, we will have $50 more than the short caller at any AAPL position over $550.  We did this yesterday morning, at 11:47 in our Member Chat Room, on the day of AAPL earnings.  This position requires no margin at all, just $21 in cash ($2,100 per 100 option contract) and returns $50 ($5,000) in 2016 if AAPL is simply over $550 – and it was at $530 when we made the trade!  

Don't be scared of options, this was a very simple way to be bullish on AAPL, enter the stock for and effective net $521 on 100 shares (per contract) into earnings with a potential upside of $29 (138%) and all AAPL had to do was go up $20.  So we got a discount on the entry and tremendous leverage for the upside at the same time.  This is what we teach you how to do at Philstockworld!  

Into the close, I sent out a special Alert to our Members with 4 more earnings plays (5 if you count the fact that I reiterated our stance on AAPL) to take advantage of the day's action and they were:

  • 10 CAKE Oct $45/49 bull call spreads at $2 ($2,000), selling 8 June $47 calls for $1.90 ($1,520) for net $480.  Our premise here is that CAKE would have margin pressure on rising food costs (they did) and sell off a bit.  The short calls will expire worthless and most of the long spread's value will remain intact and, if CAKE comes back, we may get the full $4,000 at $49 come October for an upside potential of $3,520 (733%) in just six months.  Again – don't be scared of options!

  • CROX – We simply like establishing a position by selling the 2015 $12 puts for $1.60, which nets us into the stock for $10.40 – a very nice 30% discount to the current price.  We just did a Live Webinar yesterday where we discussed the importance of buying ALL of our stocks for a discount.  This too, is what we teach you at Philstockworld (and you can SUBSCRIBE HERE to get these trade ideas and educational tips every day).  This trade, by the way, is still available as it turns out CROX earnings aren't until next week.  

  • 4 FB Jan $60/50 bear put spreads (a more complex trade) at $4.40 ($1,760) with 5 short June $60 puts at $4 ($2,000) gave us a net $240 credit and that bet was, essentially, that FB would stay over $60.  Earnings were good so the short puts we sold should expire worthless and we keep the $240 credit plus whatever value remains on the  bear put spread as a bonus.  Not bad for a night's work, right?  

  • With TXN we set up a complex butterfly-style trade, where we bought 10 2016 $50 calls for $3.10 and 10 2016 $40 puts for $3.25 to cover the sale of 10 June $44 puts for .65 and 10 June $48 calls for .75, so we collect $1,400 in premiums against our $6,350 in longs (22%) in 57 days with 600 more days to sell down the road.  If all goes well, we collect $1,400 10 times over two years ($14,000) against our $6,350 long investment for a 220% return on our investment.  Again – this stuff isn't that complicated, we teach it every day!  

As to the broader market.  AAPL is not the market – it's a huge part of the Nasdaq (about 17%) and the S&P (3.5%) but AAPL's gains were already Samsung's losses, as they had a very poor report last Q and likely will again this quarter.  That's net neutral for their suppliers as well and not any kind of rel indication of the economy. 

Nonetheless, we're going to have a nice rally today and we should re-test those March highs but, more likely than not, we're going to use that opportunity to load up on shorts again – just in case we get another healthy rejection.


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  1. Oil Lines

    R3 – 102.97
    R2 – 102.52
    R1 – 102.09
    PP – 101.64
    S1 – 101.21
    S2 – 100.76
    S3 – 100.33

    Tight lines today!

  2. What was AAPL's 12/31 close?

  3. Good morning! 

    AAPL closed at $561.02 on 12/31, Angel.  Generally, we've been long at $500 or less but that's going to have to change now as I doubt we'll see it again.  

    For last quarter in particular, Cook said the company reduced its iPad channel inventory compared to the same quarter last year, so sales were actually in line with the high end of Apple's internal expectations.

    Speaking on the iPad business as a whole, Cook made some really interesting points to remain bullish. First, he said the iPad is Apple's fastest-growing product in the company's history. Apple has sold 210 million of them so far, which is almost twice as many iPhones Apple sold in the same period of time.

    Cook also made a strong case for the iPad in the enterprise market. He cited one study that said 91% of tablets activated in the enterprise are iPads. Meanwhile, nearly all Fortune 500 companies use iPads. He also said it was a smart move of Microsoft to finally release Office on the iPad, which should help with enterprise adoption since many businesses rely so heavily on the software. In fact, Cook said Microsoft should've released Office for iPad earlier than it did. 

    In education, Cook said the iPad has a 95% market share, but the challenge now is to get more schools to buy them and gain penetration.

    Finally, Cook still believes tablet computing is the future.

    "I believe the tablet market will surpass the PC market," he said on the call.

  4. Meanwhile, better plan that summer vacation sooner than later:

    It is not a question of if a killer asteroid will strike our planet, devastating at the very least a city, and at most the entire race. It is just a question of how soon. The current consensus: it won't be too long now.

    Killer Asteroid Coming Relatively Soon

    A new study by a group called the B612 Foundation—a group dedicated to fighting the asteroid menace, which is a pretty weird mission, but its leadership includes real live astronauts and scientists, so let's take them as reasonable—finds that relatively large asteroids strike the earth with a pretty high frequency. Since 2000, earth-based sensors have detected 26 asteroid explosions at least as powerful as a nuclear bomb. None of them have landed upon our heads… yet. But the group's extrapolation of how often really, really big and bad asteroids hit our planet is pretty scary.

  5. Phil/CMG-since posting my questione earlier about CMG, I noticed that you said you had covered this in the webinar on Tuesday along with many other ideas. Is there anywhere that these are posted other than viewing in the replay? 

  6. Good Morning!

  7. Phil,

    Please advise how to position my current position in AAPL:

    10 contracts Buy 2015 500 call at 110.6 

    10 contracts Sell 2015 360 Put at 41.6.

    Thank you as always

  8. /cl from 101.45 to 102.15.  Under 102 might be a good short.  

  9. hi, is there a replay for yesterdays webcast yet?


  10. Cramer actually figured it out – AAPL is NOT indicating overall strength, they are taking market share back from their competition.  Wait until they have bigger phones – game over (just like the IPod cycle!).  

    Durable goods were good, which is confusing since housing sucked.  Not sure where they are putting all the washers and dryers…  I guess people who don't move spend on other things?  

    • Mar. Durable Goods: +2.6% vs. +2.0% expected, +2.1% prior (revised).
    • Ex-transport +2% vs. +0.9% expected, +0.1% prior (revised).

    CAT had a great Q, glad we didn't chase those shorts!  

    • Caterpillar (CATprofit +4.8% to $922M.
    • Machinery sales -12%, with falls of 20% or more in most markets, although North American sales increased 6%.
    • Operating costs -1.2% to $11.84B.
    • Increases FY EPS guidance by 25 cents to $6.10 a share, citing growing demand from builders, although it leaves its sales outlook unchanged at $56B. Consensus is for $5.93 and $56.2B respectively.
    • Shares are +4.1% premarket. (PR)
    • Previous

    KKR pulled off a win for us:

    • Economic net income of $630.3M falls from $647.7M one year ago, but distributable earnings of $446.8M are up 54% Y/Y as buoyant stock markets made it a good time to harvest. IPOs in Q1: Pets at Home, Santander Consumer USA. Share sales in companies already public: Jazz Pharma and Nielsen. Realized carried interest of $168.8M nearly doubles from last year's $88.1M.
    • The carrying value of the P-E portfolio rose 4.5% in Q1 vs. 5.9% one year ago (Blackstone's rose 7% in 2014 Q1).
    • CC at 10 ET
    • Press releaseQ1 results
    • KKR +1.1% premarket

    FCX just as we thought, cost cutting trumps small revenue miss – upside potential is massive:  

    • Freeport-McMoRan Copper & Gold (FCX): Q1 EPS of $0.49 beats by $0.08.
    • Revenue of $4.98B (+8.7% Y/Y) misses by $30M.
    • Press Release

    UPS blames the weather but, bottom line is, someone missed some sales somewhere:

    • UPS (UPS) misses earnings estimates as the winter weather took a heavier toll on profits inQ1 than anticipated.
    • Though revenue in the U.S. Domestic segment rose 2.6% to $8.5B during the quarter – costs associated with overtime wages, purchased transportation, and snow removal jobs dropped operating margin in the segment by 220 bps to 10.9%.
    • The International Package segment saw revenue increase 5% and margins widen by 14% without the snow headaches.
    • UPS shifts 2014 EPS guidance to the low end of its range at $5.05-$5.30 vs $5.19 consensus.
    • UPS -1.3% premarket

    Still more data to come and about 200 earnings reports today!  

  11. Just my 2c, I got a new LG G2 after sending back the Nexus 5.  I don't see how a phone could be any better, other than full readability in the sun light.  The G2's voice system actually works, it's like star trek.  instead of "computer", I say "ok google", or "wakeup"

  12. phil.

    morning….great call on aapl…..currently hold 5x jan 16 450-600 bcs (net 70)

    sht 4 jan 15 470 puts at net 30

    sht may 1x may 520 call at 13

    sht may 1x 540 call at 7…

    was thinking of buying back 2 puts in excitement and maybe rolling up the 450's to 550's

    would appreciate your thinking….tks

  13. Burrben – I actually like my Nexus 5… I looked at the LG G2 as well, but I wanted a clean Android phone.

  14. CMG/Craigs – The position is in the STP and we just went over it on Friday.  We don't have a transcription service for the Webinars, though it's a good idea if you can find a cheap one!  As to the overall position, if you are in the June $515s, I will point out that that is 57 days from now – have you even given it 5 days since you rolled?    Since my 1:41 comment on the position yesterday, nothing else has changed that I know of. 

    AAPL/Jasu – Think about your position.  The Jan $500 calls were $48 yesterday with a delta of about .55 so a 10% move up in AAPL ($50) should gain you maybe $30 at best.  Since moves over 10% are unlikely, it's probably about the best you can do.  Fortunately, the short puts are doing great so you will make money, only not so much.  You could sell the $550 calls for $50 to some other sucker and then your net on the spread would be about $20 and you make $30 if AAPL holds $550 through Jan or, if you take the $75-80 off the table now, you have a $30 loss there offset with the $41.60 put sale and you make $10+ with pretty much no hassle. 

    Other than that, ask me again once we see the new numbers.  

    Oil/Burr – Usually a good short after nat gas inventories (10:30).  

    Webcast/Tommy – Yesterday was a sales webcast and they sold out so I don't think they are going to have a replay.  It's not the same as our usual Tuesday sessions.  

  15. Closing out 3/4 of RFMD position on this big move. :-)

  16. Anyone catch the /NKD short last night at 14.6?  I got an alert around dinner time and shorted it.  Now 14410.  :)

  17. AAPL/Mill – What is with you and the short-term short call selling?   The $470 puts are $10 and it's extremely likely you'll make that $10 over the next 8 months so that's up to you  but, since you are going to have to roll those short May calls along and HOPE (not a good strategy) that AAPL stays under $600 for a while, you may as well buy back the $470 puts and sell some Jan $520 puts for $24 to balance out the short calls a bit better.  Whichever way AAPL goes, you simply roll the losing side.  

    Phones/Burr, StJ – I have decided that you should A) be able to name your phone so it recognizes it's name and B) they should teach it social niceties like please and thank you so it knows when you are done talking to it.  If I can say "Hal, get me movie tickets" and my phone says which ones and we have a conversation and it gets the tickets and I say "thank you", it should know to go back to sleep.  I don't see why we should have different conversations with our phones than we do with our assistants – soon the phones will be smarter…

    AAPL not exactly flying higher.  Amazing how many people are not believers in this stock, no matter what it does in sales and profits.  As we expected, $570 is a tough nut to crack so it's 5% Rule time and we call $520 a floor and that makes $570 a 10%(ish) move up so 2% back is $560 and then $550 would be a strong retrace and that (which is also the 50 dma) should be the new floor for AAPL, with a range between there and $650 through November earnings at least.  

    And, by the way – another great example of why we ALWAYS sell into the initial excitement – no matter how much you love something.

  18. /NKD/Burr – Yeah, huge dip from 14,600 to 14,400, then back to 14,500 this morning but now 14,400 again (and falling) as the Dollar hits 80 (but getting rejected there).   One of Japan's big utility companies said it will take a long time to restart it's reactors, which means their fuel costs will remain high all summer.  Also, TM had some disappointing numbers and I think they were disappointed that not much on trade came out of the Obama trip.  

    Speaking of Japan restarting nuclear reactors – CCJ is still pretty cheap at $23 (even though we last bought them below $20) so we can add it to the Income Portfolio, selling 10 2016 $20 puts for $2.50 and buying 10 Jan $19/24 bull call spreads for $3 for net .50 on the $5 spreads.  Demand should pick up by the fall, that's why we're doing the shorter time-frame.  

  19. Meanwhile, indexes falling faster than I thought as sellers coming back as soon as any buyers show up – forgot to mention how awful yesterday's volume was:


    Not only was the volume pathetic, but we didn't even go up – that's why I said above we would short into this rally but we didn't even get the time and already we're in a sell-off.  

    Same on the indexes yesterday, 1,880 on /ES, 16,400 on /YM, 1,1500 on /TF and 3,600 on /NQ – though only the Dow hasn't failed already.  Our   TNA puts are looking good – May $63 puts already $1.35 – up 35% from our $1 entry.  Too bad I didn't put them in the STP! 

  20. phil…tks

    on the sht calls…you had mentioned in the past when you have a loss to roll a quarter of the loss at a time…was thinking of rolling the sht may520 and 540 (since no prem left) to the jun 550's ……your thoughts.

    i bought back half the puts (2)on the open…

  21. And boom! LQMT is .20 again.  Tempting but now while everything is selling and, of course, no word that new IStuff will be made of liquid metal so the usual post-AAPL disappointment for them.  

    TWTR dove to $44!  

    NFLX $340 again, who can play a stock that moves 10% a week?  

    SHLD just keeps going up – back to $44. 

    GMCR $92.50, almost at goal ($90).  

    TSLA back to fail at $205.  

    In the STP, let's sell 5 more FAS May $90 calls at $3.10 – should have done that yesterday!  

  22. pretty good article a few days ago in SA by Cam Hui about "risk exhaustion":

    the line I like is "everywhere we go, investors think their market is expensive, but are forced to buy it anyway.."

    maybe still mostly cash for awhile yet, earnings plays and futures pokes?  I keep looking at stuff and having trouble wanting to buy it

  23. Phil,

    i just joined and need help with the following if you have time:

    Phil if you get time:

    I own 100 data purchased @65.01

    sold 1 data oct 18 call @ 60 for 15.91

    sold 3 data oct 18 puts@ 85

    any advice would be apreciated, thanks joe



  24. PHIL,

    Re FAS sht calls, is the sl grtr OI the reason  you picked the May 17s ?

    B-A spread seems to be ~. 10 -.15 on all contracts.


  25. AAPL/Mill – No, the thing was to roll your calls before less than 25% of the calls value is premium (out of the money).   This is why I kept saying don't short AAPL, we have conviction long but now you are in a position where you have to keep shorting them – even though you don't believe in what you are doing.  That means you will be constantly conflicted until you finally get done with those short calls.  Fortunately, it's only 2 and you do have longs so now you have to look at them as protection for your long gains.  

    Since you have 5 Jan $450/600 bull call spreads at $70 and the $450 calls are $122, I'd cash 2 of those and buy 2 $550 calls for $63 and take the extra $59 x 2 ($118) and roll the 5 $600 short calls ($44) to the $700s ($20) for net $24 x 5 = $120.  That will leave you with 3 2016 $450 calls and 2 2016 $550 calls and 5 short $700s, so you are buying $300 more potential upside for $2 (and raising your target by 10%).  

    NOW you have 2 short May $530s (averaging) at $34 that are PROTECTING the $113 that you are in the money on your 3 $450s and that doesn't seem like a bad thing at all, does it?  The July $555 calls are $23 and you can roll your $68 of short calls to 3 of those and then you have 3 $450s that are $115 below the short calls.  If AAPL goes over $600, you might want to add a few more $550/700 spreads in anticipation of rolling your 3 short $550s to 5 short $600s, but cross that bridge when you come to it.  Again, I think you should close the short puts you have and sell the more aggressive ones (2 or 3) for balance.  

    Exhaustion/Pwright – If you don't see things you want to buy – don't buy them!   I have trouble teaching Jackie (12) that as well, her sister (14) has no trouble going out for a day and not buying anything but, if Jackie has $20 in her pocket – it pretty much causes her physical pain not to spend it.  Most traders are no different – they feel like cash in their portfolio is some kind of failure on their part – as if they are missing something if they don't spend it right away, rather than waiting for a better opportunity to deploy it.  

    Gold shot up to $1,300 – interesting.  

    Welcome Jcristal!  DATA is not the kind of company I generally like, too narrowly focused but you can't argue with their success.  You can, however, argue with their insane valuation – $4Bn with $232M in Annual sales and $7M in profits for a p/e of 571 – what the Hell were you thinking???  Obviously, it's the puts that are killing you, now $27 but that's down 300 x $12 = $3,600 and the 1 call you sold is $11 so $500 back there is a $3,100 loss and another $350 down on the stock is $3,450 lost is probably getting off lucky.  I'd take the loss and walk away but, if you think you'll regret it, you can sell 5 of the Oct $50 puts for $5 and get $2,500 back and your worst case would be owning 500 shares at net $45 and you'd still be a damned site better off than you are now but make sure you REALLY want to own them for $45, when their p/e would still be 416 (meaning that it will take them 416 years to earn back each Dollar you give them).  

    FAS/8800 – WHAT?   What's with the code?  This isn't a text message, we can use our words.  Something about shorting FAS calls but those are $90 so I haven't got a clue what May $17 refers to.  

  26. Phil,

    Re FAS short calls, I was asking why you chose the May 17th contract (I assume it was May 17th). Was it because of the open interest being greater? Bid/asked spread seems to be 10 -15 cents on all contracts.

    Sorry for the confusion – gotta be the water in Atlanta.

  27. Another minor build in Nat Gas – Producers either holding back or shipping it out somewhere else. 


    Nat gas spiked up to $4.80 and down to $4.70 but back in the middle again.  Not playable.  Gasoline back to $3.08 despite more Ukraine worries.  Not that the Ukraine has anything to do with the price of US gas but, any excuse will do for them.  Oil hit $102.20 but back to $101.89 – also too tough to call, unfortunately.

    Copper jumped to $3.11 on good FCX CC, where they see demand improving.  

    Markets bouncing already, 10 QQQ TOMORROW $86.50 calls in the $25KP at .95 with a stop at .75 – risk is $200.  

  28. AAPL 2016 $500 puts can still be sold for $42 and the $500/600 bull call spread is $46.50 for net $4.50 on the $100 spread that's $66 in the money to start.  Worst case is owning AAPL for net $504.50 and best case is making $95.50 (2,122%) and TOS says the ordinary margin on those puts is $50, so it's 200% back on margin as well!  

  29. Pharm, are you out there?  I've got the SGYP short May 5 puts and long July 5-7.5 BCS you recommended awhile ago, it's up pretty strong today.  Has there been any news?


  30. This has been doing well for me.  Posted months back.  

    Jan15 SPY -130P +175/180 BCS @ 1.36  now @2.95.  Still $2 left to gain if SPY holds 180.  B/E SPY 176.36 about a 100pt drop on SPX from here.

  31. AAPL pushes the LTP up over 10%!   STP only down 6.5% (and 1/5th the size) so hedges are working even better than we hoped.  

    Now the Income Portfolio (where we went to cash) has fallen behind – up just 7.8%, part of that is because we have a less-aggressive AAPL position in the Income Portfolio but the rest is because we didn't just leave our longs alone and let the short premium burn off for a month.   Will be an interesting race to watch this year.  

    SPY/Burr – That's our LTP position.  

    FAS/8800 – Ah, chose May because we already had 5 short Mays and chose them in the first place because it's too much of a pain in the ass to sell the weeklies.  Watch out for that Atlanta water – isn't that how Walking Dead got started?  

  32. Phil,

    Not sure of the creative source behind Walking Dead, but the rest of Georgia (Atlanta is a bit of an oasis,culturally and intellectually) just passed the most unrestricted gun law in the country/world: you can now not only carry loaded and concealed firearms in churches but also in bars ! Great combo booze and firearms – drawfs the possible consequences of legalizing marijuana, in my view (not withstanding ZXZ's articulate thoughts to the contrary earlier) . Cannot even remotely grasp what those bastards were thinking. Wonder what effect that will have on the state's population.

  33. Qs out of gas at $87.60, let's take $1.20 and run on the QQQ $86.50 calls in the $25KP – making $250 beats losing it!  

  34. 8800 – Wow, the Wild West is back in Atlanta !

    BTW, A little know factoid -most people think of Atlanta as an Eastern city.  It's actually almost due south of Detroit.

  35. 8800 / gun control

    Reducing restrictions on C&Cs generally (and this is statistically valid) has the benefit of reducing gun violence.  The crazy people already were carrying…now you just have more level headed people with stopping power.

    Here's the wikipedia on it.  Of course, I speculate whether anybody will take a wiki seriously but I hope we can all admit it is a decent place to START research.,_Less_Crime  I guess this is a book that has performed studies and statistical analysis.  The "support" for the book finds a negative correlation between gun access and gun violence while the "opposition" has found no effect or a slight, temporary increase in aggravated assault.

    Anyway, back to money… wtf happened with FFIV?  Up 5 dollars, then back down to flat, now barely up against a backdrop of a good earnings call.  Makes no sense!

  36. known

  37. 8800.  That's awesome!  I hope they pass the same laws in FL!  I already have my CC, and even without a CC we can keep loaded handguns in our glove boxes.   As they just found a meth lab YESTERDAY next to my house (not down the street, literlly next too) I'm all for it.  

    That's why I'm short RGR puts, I have LCR's stashed everywhere.

  38. JPH1121, Burrben

    Very interesting point guys. Actually there is some evidence that awareness that the other guy has some lethal firepower at the ready, would make most 'level-headed' folk have second thoughts about telling someone they're ugly and their mother dresses them funny. Sure was true in the Old West. Unfortunately, the presence of booze does not encourage level headedness as most of us can attest to being under the influence – in our younger days, of course. Nothing to do with guns for home defense or even persuading your neighbor not to pee on your roses.

  39. Phil

    Any earning trade on Corning's (GLW) first-quarter results are due next week on April 28


  40. And guns in churches and schools in the hands of untrained individuals… what could go wrong?

  41. Holding the QQQ's   Just bot 1 AMZN May 2  350 call ..  It's a "why the hell not" trade… Not a valid trading strategy

  42. Yes StJ.. I agree… and,… I hate the argument that reducing restrictions makes the world a safer place because now the "good guys" also have access.  Untrained nervous nellies really.  The only thing easier access allows is MORE crazies having access.

  43. Phhh, concealed carry, what's with that? I have my Manchurian broadsword, and I'm pretty good with it. But I sure as heck don't conceal it….pockets aren't that big.

  44. Did anyone get a fill on CROX yesterday?  I'm showing the 2015 $12 puts at .80, which is a far cry from $1.60 that Phil listed.

  45. Or did he mean the 2016 ones?

  46. Atlanta/Albo – Wow, that's funny.  I guess it's because we fly over Georgia on the way to Florida and sometimes (especially in the old days) we had to change in Atlanta so we think if it as right below us.  Still, we consider both Detroit and Chicago to be "normal" places and Atlanta falls into that category, though it is surprising, now that you point it out, that it's closer to Birmingham, Greenville, Huntsville and Chatanooga than Charleston. 

    Guns/JPH – Oh please, don't get me started.  The Wiki entry is "More Guns, Less Crime" – it's a biased entry in the first place.  In fact, it's not even a proper entry – it's an ad for a book that's totally biased.  Do you even know who John Lott, Jr is?  His whole career is about gun advocacy – what do you think his books "findings" would be?  

    In 1996 when Lott's research first received media attention, Charles Schumer wrote in the Wall Street Journal: "The Associated Press reports that Prof. Lott's fellowship at the University of Chicago is funded by the Olin Foundation, which is 'associated with the Olin Corporation,' one of the nation's largest gun manufacturers. Maybe that's a coincidence, too. But it's also a fact."[52] 

    In the course of a dispute with Otis Dudley Duncan in 1999–2000,[58][59] Lott claimed to have undertaken a national survey of 2,424 respondents in 1997, the results of which were the source for claims he had made beginning in 1997.[60] However, in 2000 Lott was unable to produce the data, or any records showing that the survey had been undertaken. He said the 1997 hard drive crash that had affected several projects with co-authors had destroyed his survey data set,[61] the original tally sheets had been abandoned with other personal property in his move from Chicago to Yale, and he could not recall the names of any of the students who he said had worked on it. Critics alleged that the survey had never taken place,[62]

    In response to the dispute surrounding the missing survey, Lott created and used "Mary Rosh" as a sock puppet to defend his own works on Usenet and elsewhere. After investigative work by blogger Julian Sanchez, Lott admitted to use of the Mary Rosh persona.[62] Sanchez also pointed out that Lott, posing as Rosh, not only praised his own academic writing, but also called himself "the best professor I ever had".

    Many commentators and academics accused Lott of violating academic integrity, noting that he praised himself while posing as one of his former students,[71][72] and that "Rosh" was used to post a favorable review of More Guns, Less Crime on Lott has claimed that the "Rosh" review was written by his son and wife.[72][broken citation]

    "I probably shouldn't have done it—I know I shouldn't have done it—but it's hard to think of any big advantage I got except to be able to comment fictitiously," Lott told the Washington Post in 2003.[72][broken citation]

     Here's the actual correlation between guns and gun violence – pretty direct:

    So please, JPH, try to do some research before posting politicized nonsense here.  Not that we mind politicized nonsense, we just like it to be based on actual facts and not right-wing fantasies passing for them… 

    This chart pretty much says it all:

    We so crazy!  

    FFIV/JPH – As I said about them yesterday, very fairly valued at $108 – even with the good earnings.  

    Guns/Burr – Remind me not to visit your neighborhood!  

    GLW/QC – They are always on our list of stocks we buy when they are cheap but they haven't been cheap since we got them fro $14 last year.  At $21, I'm not comfortable being more bullish but I also wouldn't bet against them.  

    AMZN/Louis – We'll see if the Bezos magic continues.  So far, it hasn't mattered that they make no money.  We'll see if people are still in such a forgiving mood this Q.  Certainly they didn't give GOOG a break.  

    Guns/Louis – This is still my favorite overview of the situation:

    CROX/Palotay – It was the short 2016 $12 puts, still $1.60.  

  47. Guns – such a fun topic. History is full of what could go wrong if they are NOT in the hands of "untrained individuals…"

    Here a good oldie!
    Grand Funk – Don't Let 'em take your gun

  48. FTR/Phil – I have some shares (cost basis 3.12) covered with may 4.5 strike in my IRA. Have had an order to roll to Jan 4.5 for long time but can't do it for even a thin dime. No great problem to 'let it go" but it's a nice dividend still. Suggestions? try roll for nickel? even money (expect both would result in call away with next dividend anyway). Roll up (which is only offered at par or negative)?  How best to evaluate how much to "pay" to keep it longer?

  49. The FTC backs Tesla Motors on direct sale issue • 12:37 PM

    Tesla Motors (TSLA -0.1%) appears to have a friend in the Federal Trade Commission on the issue of the direct sale of automobiles to buyers.

    In a blog post on the FTC website, the agency says it's "bad policy" for consumers accustomed to using the Internet to compare and shop be forced into the dealership network.

    The automaker has run into some roadblocks in several states where powerful dealership associations have been hard to brush aside.

  50. Just because you have an oppinion doesn't make you right. Crime is down in Wyoming since all that can own a gun can carry anywhere. Stopping the war on drugs will stop more gun crime than trying to take guns away.

  51. Great video Phil. . hilarious. Thanks for that!

  52. SODA/Phil – great call on the 'Israel" source for the news item! Grabbed a put and up at least my annual soda spend, now with trailing stop dropped on.

  53. GLW / Phil – It really is hard nowadays to find something I like that is cheap… If it's cheap, I already have some of it – gold miners, silver, coal, other basic materials which got killed last year so good pickup there. The rest are good companies (mostly tech) where my cost basis is lower than today's price but I am still very cashy now. But adding new positions today is a bit scary I have to say. Just waiting for big earnings misses I guess but not too much luck so far. And this market won't even take a decent breather…

  54. Anyone know what the deal is with RIG today?  Up 4.5%.  I bought back my short call portion of a 2016 spread about a week ago, and that is looking pretty smart (lucky).  I'm, wondering if I should cover again now, or give it a few more days.  Phil?

  55. Phil // AAPL
    The new AAPL entry you posted – would you wait until this backs off in the next few days ? or at this point it doesn't matter.

  56. New Positions/Stj – amen to that. Most of my long entries now are calendars or diagonals.. I still get paid if stand still and even get some downside cover in case need to bail.  IF they prove strength by still going up, then I add more/higher diagonals, verticals, or rarely, straight long calls. New stock entries really rare. last were HOV, IRBT, and SVM when it cleared $2 again. This market is too whack. Who needs a black swan with all the very evident issues??!

  57. phil……….tks…for the indepth exp……..

  58. Phil

    I have the DBA BCS Jan 2016 22/26 Jan 16 21 puts

    Would like to roll puts what strike or roll bcs and puts

    What do you suggest?


  59. scottmi and stj, glad to hear I'm not the only one feeling queasy about putting on longs at the moment.  scottmi, any chance you'd run me a quick example for a calendar / diagonal you are playing?  I wonder if it may be a long time before there's much cheap to buy out there, going short seems rough also, I can wait it out in cash, but would be great to find a way to conservatively make a few bucks in the meantime :)


  60. phil, thoughts on nflx.  sitting on the 200MA right now.

  61. Early forecast for April U.S. auto sales • 1:40 PM

    forecast from J.D. Power and LMC Automotive calls for automobile sales in the U.S. to reach 1.1M units in April, up 5% Y/Y.

    The average transaction price in April is expected to be 3.6% higher at close to $29.8K.

    What to watch: Close to half of the new models in 2014 are arriving in the premium segment which will cause new competition as some premium pricing dips down into the levels of non-premium models.


  62. Scott – I agree. Actually, all my positions are diagonals or calendars. Flat is good… And you have some room on the downside.

    I was actually looking at IRBT, but they don't seem to done on the downside yet! I see some support around 35 but I need to see them hover around that first. They are below for now. Next line is around 31 – a bit too far below to make a good entry for me.

  63. Well, of course, except for my "Die VXX" plays where I am actually long by being short VXX… But of course you can't be long VXX!

  64. pwright – sure. this morning got a fill on UNP call diagonals for net $3 :  long Jun 190, short May2 192.5.  wanted to get in following good earnings breakout to new high.  it might not play out but my stop is pretty large at a CLOSE below 181.07. If it get's there, the cover will reduce loss by about half even without rolling the cover (which I would probably do). Also looking at an long August 190, short June 195 diagonal but want to see it test and/or remain above 189.40 with a green close.

  65. Phil,

    During this quiet time (relatively), I wanted to get your thgts on an alternative put selling strategy:

    Instead of selling a distant put option (on a stk you are comfortable owning) at a discount (20%), what about selling a near term put contract, at an above the mkt (in the money) strike ?

    Say IBM (now 190) 1/16 170p@ $12 vs Jul 210p @ $20

    (1) If the stk drops, roll the put option down and out, until it stabilizes (hopefully) – with a lot of time to do so.

    (2) If the stk goes up, you enjoy a much larger premium at expiration or before

    (3) if the stk stays at the same price level,you get exercised but can sell the stk and profit from the premium time decay.

    Risks, problems with this approach? Thanks in advance

  66. FTR/Scott – Are you saying you can't buy back the short May calls?   FTR is at $5.90 so the May $4.50s should be $1.40 + something so $1.45 is very fair, and that's the ask.  I assume you are trying to roll for no money but that's unrealistic.  Why not just offer $1.35 for the short Mays and offer to sell Jan $5s for $1 and see which one fills first and then decide what to do with the other end.  

    FTC/Jabob – Now they have blogs to float major policy changes?  That's a bit strange.  

    Nat gas/QC – That got them off the floor at $4.67, back over $4.70 now. 

    You're welcome Louis, it's from "Bowling for Columbine".  

    SODA/Scott – It's just like that gun story – when you read something in the MSM, you have to think of who the source is and what they stand to benefit from a story before you just go taking things at face value.  That's why Seeking Alpha is based in Israel – it's the wild west for stock market manipulation out there!  

    Cheap/StJ – So you are acting like Buffett, who has gone 5 years without buying anything at some points – that shouldn't worry you.  

    RIG/Palotay – Speaking of things that were too cheap!  I'd give them a chance to at least test the 200 dma at $45, unless they fail the 50 dma at $41.50 but, remember what I said Tuesday, every day above the 50 dma tugs that line higher and curves it more bullish.  

    AAPL/Wombat – That's the best entry I see at this time for people who aren't in it.  I don't think AAPL will be below $550 again (outside of a broad market sell-off).  

    IRBT/Scott – Thanks for reminder.  Still on watch, waiting for a non-red candle to add to Income Portfolio.   TASR already took a very sharp bounce back up.  

    Our last entry was right on the money:

    Submitted on 2014/04/08 at 10:34 am

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

    See, TASR (our stock of the decade) is a good example as we LOVE them, but we still wait for them to be low in the channel to buy them and, when they get high in the channel, we sell them.  It doesn't mean we don't love them – it just means we understand that stocks go up AND down and, if we accept that, we can make $2-4 between $16 and $20, which used to be between $15 and $18 and, before that, we used to play them from $7-9 and, before that, we played them from $4-6.  Since TASR crossed $15, it's hit $18 and back 3 times and now it held $16 from the last peak at $20.  So we buy when it's low, get back to cash when it's high and, if it gets away from us (like GLW, SUNE, SPWR), then we move on to find the next cheap thing.  

    You're welcome Mill.

    DBA/QC – That was our other trade of the year – worked out too well.  You can almost get $4 for the spread and be done with it and the 2016 $27/31 bull call spread is $2 so 1/2 off the table and then you only need to sell puts if they go lower – to pay to roll down the calls.  

    NFLX/Lunar – I would not be surprised to see them go to $200 so, if anything, speculative puts would be my play but, since they are an evil MoMo, staying away is a better play since they already dropped 25% to get here.  

    Autos/Jabob – It's funny as I don't see that many people with new cars, though I guess even if they sell 1M per Q, that's just 1 out of 100 families getting a new car.  Seems to me, a truly healthy economy with 140M workers should sell a car every 7 years at least, so 20M cars a year, not 12M.  Oh, here's a chart to show what I mean!  See, we're "excited" by a number that actually sucks – kind of like new home sales:

  67. And down we go again.  Another chance to short /TF at 1,140. 

  68. FCX,BTU/Phil,

    I'd like to get into long-term positions with these two stocks.  What would option combinations would you recommend to take an initial stab?  Thanks!

  69. Puts/8800 – Are you talking about a spread?  We do those sometimes, it's the same as any other play where you (hopefully) take advantage of the relative premium.  As long as you REALLY want to own IBM, there's nothing wrong with it but why would I bother buying Jan $170 puts if I'm bullish on IBM and want to own them?  I'd still rather just sell the 2016 $190 puts for $21, net in for $169 and move on with my life as I wouldn't have to look at IBM again until next year (assuming I REALLY want to buy them).  

    FCX/Wappler – They pay a $1.25 dividend, so they are  worth owning and you can buy the stock for $34 and sell the 2016 $32 puts and calls for $9.50, which drops your net to $24.50/28.25 and makes the dividend 5% while you wait.  Worst case is you end up with 2x at $28.25 but $2.50 in pocket by then means net $27, which is 20% off the current price.  If you get called away at $32+, then you make $7.50 + $2.50 dividend or 40% over two years and only long-term gains to pay.  

    • Freeport McMoRan (FCX) +2% premarket after Q1 earnings fell 21% Y/Y, hurt by lower copper prices and higher costs, but results topped analyst expectations.
    • FCX previously had raised its copper production despite weaker demand and lower prices, but output fell 3.3% during Q1 to 948M lbs., with average realized price/lb. falling to $3.14 from $3.51 a year earlier, partly due to the conflict with Indonesia's government that has halted its copper concentrate exports from the country.
    • Total gold production also declined, falling 1.7% to 231K oz., with average realized price/oz. falling to $1,300 from $1,606.
    • Gross margin narrowed to 25.7% from 33.5% as input costs rose 21% to $3.7B; capital spending totaled $1.61B, double the year-ago period, and FCX continues to expect $7B in capital spending for the year, up from $5.3B last year.
    • FCX's oil and gas unit sold 16.1M boe, beating its forecast of 15.3M, primarily reflecting higher Eagle Ford production volumes.

    BTU/Wappler – That one is a bit more scary and they don't pay a good dividend (.34), so I'd just sell the 2016 $15 puts for $2.15 and net in at $12.85 and, if they go lower, then I'd consider a bull spread.  

    • Peabody Energy (BTU) -2% premarket after reporting an unexpected Q1 loss and slightly lower than expected revenues, as a 7% increase in sales volumes to 61.3M tons of coal was offset by weak pricing for steelmaking coal.
    • BTU sees a Q2 EPS loss of $0.14-$0.39 vs. consensus $0.14 loss; sees FY 2014 shipments of 245M-265M tons.
    • Australian revenue of $612M was hit by a 17% decline in revenues per ton, while Australian sales totaled 8.2M tons, including 3.2M tons of met coal and 3.1M tons of seaborne thermal coal.
    • U.S. mining revenues rose to $985M as a 10% increase in western shipments overcame a 7% decline in U.S. revenues per ton.
    • Reduced unit costs in both U.S. and Australian operations by 4% and kept capital spending at 10-year lows, improving liquidity to $2.1B while cash rose to $508M.

  70. Phil// Under what conditions is it advisable to buy back the short call leg of a long-dated bull call spread? I see that you bought back the SLW 2015 short calls, on which there was a 50% gain. What about with a 2016 spread? What guides your decision? Thanks. 

  71. scottmi: thanks.  I'm following you with a few of the long June 190s / short May2 192.5s, just to see how it plays out.  If it heads to the downside, I'm guessing you roll the cover to sell more premium at the June strike?  Is there a way to identify which strike to roll to?  Also if it goes your way, I guess you roll the covers up someplace above your longs and call it a bull call spread?  Is there a timing to it / how close do you usually wait to expiration on the covers before rolling?

    Thanks again and sorry for all of the questions, still figuring this out, and this looks like an interesting play

  72. phil/ gun control:  Had to go to a meeting.  The problem with politics…statistics: so easily manipualted.  Anyway, that was short non-research that resulted in that article but hey, at least I didn't reference Michael Moore to support my argument. ;)  Just playing; let's all be friends.  At the end, I think we can both agree that the best thing you can do to cut down on violence is improve the economy (for everybody) as poverty is the strongest link to pretty much all violence.

    New topic: Going to have to see if I can find more information related to this CNBC article.  Looks promising, especially if it gets us moving towards fusion faster.

  73. Phil, Is there any way to improve my position on SLV. I am short the July 27 Put, and have been rolling it forward for quite some time, but to no avail.

  74. Phil,

    I was asking (original below) about SELLING puts (IBM now 190 as an example). Wondering about either selling a higher strike (above market – example Jul, 2014 $210 fro $20) versus below market (170 Jan/2016 for $12). AH response would be great.




    During this quiet time (relatively), I wanted to get your thgts on an alternative put selling strategy:

    Instead of selling a distant put option (on a stk you are comfortable owning) at a discount (20%), what about selling a near term put contract, at an above the mkt (in the money) strike ?

    Say IBM (now 190) 1/16 170p@ $12 vs Jul 210p @ $20

    (1) If the stk drops, roll the put option down and out, until it stabilizes (hopefully) – with a lot of time to do so.

    (2) If the stk goes up, you enjoy a much larger premium at expiration or before

    (3) if the stk stays at the same price level,you get exercised but can sell the stk and profit from the premium time decay.

    Risks, problems with this approach? Thanks in advance "

  75. 8800 / put selling:  The problem with selling an at or in the money option is it is a directional play.  A $210 put on a $190 stock for $20 has zero premium where the position is losing money immediately upon a $0.01 loss in the value of the underlying.  The $170 put doesn't start actually losing money until the stock drops under $158 even though you might have paper losses before that point because none of it is realized until the position is closed or exercised.  IF somebody early executes on an option while premium remains, you instantly profit by the amount of the premium.

    You also use MUCH less margin to sell the $170.  All in all, you have a much greater chance of profit on the low strike than the high strike.

  76. UNP/pwright – if down, I'll probably roll the short call out week to week. ideally, the stock would rise a bit slower and the short would expire before being overrun to the upside. then can add another higher or leave uncovered all depending. If ITM, then roll at same strike for credits until it's a vertical, while adding new long diagonals.

    choosing which future strike to play.. usually it is the closest that gives highest premium for decay, but sometimes there is a jump at some other strike further out. eyeball them or drop them in a spreadsheet that divides the option premium by the number of days left to expiration to get a quick and dirty look at what average daily burn would be.. and consider the one with the highest number.  For these calendars, you are limited by the long call date.  I usually try to roll for the closest strike to get the most chances and fastest decay.   And keep to your stop(s). If the stock moves up, I keep looking for the next 'natural' stop (swing low point usually) I can move to, and I have a trailing ATR line as a backup stop.

  77. UNP – also, I got it for my price today one the spike down.. had my order in for a couple days.

  78. TNA/PHil – You recommended puts on TNA yesterday, and that was a great call, I'm up 30% currently.  I'm going to go ahead and sell half (when in doubt sell half), but am wondering if you expect further downside here in the short term?

  79. /NKD on the move

  80. tf – huge battle going on at 1140 – looks like it wants to go lower, perhaps not resolved until a/h..

    phil – when you're trading futures, could you talk about how you view the pivot points.  obviously they carry significant meaning a lot of the time.  do you use them as a basis for going long or short ever, or just as a potential target exit? 

    looking at tf – the near pivot support line is around 1139 and i know you like a short below 1140. 

    thanks so much for all you do here!

  81. man, shame about LGF, I thought Divergence was actually pretty good.

  82. toepull80/TF – Phil has his own strategy that works, and I'm sure he'll explain. Allow me to make this suggestion. Take a 30 min chart of IWM and plot support and resistance levels where you see confluence (frequent reversals at major price levels and where moving averages and trendlines come together). This is generally not hard to do. Now watch price and volume action in relation to your pivots. Look for big volume to enter several minutes before reversals. It depends on the day but 600k shares is usually sufficient to trigger a reversal. The volume may enter on a red bar, but look for a wick to suggest the selling action was stalled. Now look for volume to drop off substantially to confirm lack of interest in further selling. Now look for a good entry on TF. There are, of course, lots of exceptions, but this is useful to add to your futures trading toolbox.

  83. Conditions/Griffin – It depends on a lot of other factors.  It depends what your go-forward plan from that point it.  Making 50% with a long time to go is a good rule of thumb as it's going to take you (in the case of Jans) 8 more months to make the next 50%.  It goes back to what we were discussing in yesterday's webcast – whether a trade is on track or not – and we'll do a whole webinar on Portfolio Management soon.  Really though, with any position, you need to evaluate it based on what you know today and what you expect to happen between now and expiration (see "The Microwave Oven Theory of Behavior").

    Nukes/JPH – Those thorium reactors do seem promising but I've been reading about them for 10 years and they're still in the same place.  Fusion is about 20 years away – that will save us.

    SLV/Zten – Interesting that it hasn't been put to you at $8.10 with SLV at $18.90, no premium left.  I would suggest rolling to 2x the 2016 $20 puts at $3 and there's $6 back and that probably makes you even if SLV is over $20.  You can just do that and forget about it and, worst case is you own 2x at $20 ish – and then you can sell calls and more puts to drive down the basis, but we'd be talking sub $20 silver for two years for that to happen – doubtful.  

    IBM/8800 – Oh, not a spread, just selling puts?  Well, if you sell the $210 puts for $20 that's no premium, which violates the whole concept of "being the house".  Essentially, it's just a straight bet on IBMs direction where the most you can win is $20 but the most you can lose is $190.  Since statistically you'd be right half the time, over the long run you can be pretty sure you'll end up bankrupt.  Also, it would happen faster than that since, on the way up, the premium will increase and the short puts will hold some of their value while, on the way down, you would lose every single penny of the drop.  Selling 2016 $170 puts for $12, however, nets you in at $158 for a nice 20%(ish) discount at worst and, at best, drops $12 in your pocket.  That's the way we DO like to operate.  

    And what JPH said.  

    TNA/Palotay – I don't know.  I'd say yes, there should be more downside because AAPL is up 8% and it's 20% of the Nas so 1.6% of the Nasdaq's 0.8% gain today is only because of AAPL and then AAPL suppliers are also way up so probably 2% of the 0.8% gain is from AAPL.  Same(ish) for the S&P, where AAPL is a major component and the rest of the indexes are holding up in sympathy but it's a one-trick pony and yesterday, 1/2 of the reporting companies missed, today it's about 1/3 - again – I just don't see how that can possibly justify paying all-time highs for equities.

    Note that auto chart above (and the housing chart is worse) – when we do beat, we're beating numbers that are down 30% from where they were 6 years ago.  The economy doesn't have to be declining for stocks to be overvalued – they simply assumed a better recovery than we're actually getting and, therefore, overpriced.  

    Without the Fed, we'd be 20% lower, at least.  But there is no such thing as "without the Fed" so we have to guess at proper levels but still, these don't feel right to me.  

    Pivots/Toe – I use them for visual clues but we're looking for (under the 5% Rule) for certain retracements and whole number lines, that are far more significant than pivot points, which are constantly redrawn and STILL aren't right half the time.  If a 5% line like 1,150 (15% up on the RUT on our big chart) lines up with a pivot point (it does today), THEN I consider it more significant than usual.  The reason 1,140 is significant to us today is because the RUT fell from 1,200 to 1,100 and that makes 1,120 a weak bounce and 1,140 a strong bounce – these are the same numbers we've been using all of last year yet notice how exactly it works.   


    We had an overshoot to a 50% retracement at 1,150 but now we're testing the strong bounce line at 1,140 and the fact that the RUT seems more like it wants to fall below it than move higher indicates some general weakness.  That being the case, we look for things to confirm it and we have the Nasdaq, which fell from 4,375 to 4,025, which is 300 points so 20% weak bounce (60 points) is 4,085 and 40% strong bounce is 4,145 and the Nasdaq, just like the Russell, is just above the strong bounce at 4,148.  

    Since that is coming WITH AAPL's help, it's very unimpressive, so we remain a bit bearish until this is resolved.  \

    So we're short at 1,140 but the pivot at 1,139 is, for the moment, providing support.  It just becomes another line we'll watch and, if it turns out to be stronger than ours – we know a lot of TA programs are watching that line and we will continue to expect support there but I suspect our line is real and theirs is false – and it won't last long.  

    Divergence/Wombat – Too many other good films, it wasn't even on IMAX the 2nd weekend because Captain America bumped it out.  Very poor scheduling but I still like LGF long-term.   They didn't lose money on Divergence – it just wasn't a Hunger Games-type hit.  



  86. Speaking of things that aren't good but we act like they are:

    They told us not to worry in 2008 too!  

    Russia/Angel – Oh, this will be fun…

  87. after the invasion into the Ukraine, buy YNDX when they really get cheap

  88. Good BTU news:

    • Peabody Energy (BTU +2.8%) powers steadily higher, reversing early losses after CEO Gregory Boyce says during this morning's earnings call that the company is looking seriously at closing some of its met coal operations.
    • Some analysts also have come to BTU's defense: Brean Capital's Lucas Pipes wrote that investors should be relieved by the company’s ability to continue to navigate the low price environment relatively well, Simmons' analysts said BTU's downside guidance was reasonable given lower benchmark met and thermal coal prices ahead, and Cowen said it would be buyers on share price weakness.
    • Most other coal names also are up: ANR +3.9%, ACI -1.5%, YZC +0.2%, CLD +0.4%, WLT+0.9%, CNX +2.8%.

    GOOG, AAPL, MSFT and others are settling the class-action that they conspired to hold salaries down.  That's going to squeeze margins down the road…

  89. scottmi: many thanks again.  I've been looking at the weekly premiums, it looks like if you play your cards right, you can have a better than free long call by the time you get to June expiration (you can do quite well just standing still, I am understanding what you and StJ were saying). 

    In terms of the stops, are you setting stops on the diagonal as a whole, or just on the long calls?  Or are they just mental stops based on the stock price?


  90. Phil,

    Thx for the sht put explanation

  91. stops/pwright – diagonal as a whole for me. I won't hold naked calls. takes ridiculous margin (for the pennies remaining usually) and have been burned before. as I said, this market is just nuts.  And we just don't know, will it be tomorrow when "over the edge it goes?"

  92. Russian peacekeeping troops in Ukraine.  Isn't that the classic definition of oxymoron ?

  93. MSFT earnings and conference call with the new CEO could be interesting tonight.  Leaning bullish since Ballmer's gone.

  94. Well, looks like we're holding into the close, for what it's worth.  

    MSFT/Albo – Don't forget new CEOs like to kitchen-sink the losses and write-offs sometimes, so he can go forward with a clean slate. 

  95. I would short AMZN with a put, but it's too expensive.  

  96. This was a fantastic learning day. Thank you Phil! And everyone else, too!

  97. scottmi: makes sense, thanks..

  98. phil & dr craig – thank you for the tremendous insights you provided me with!

  99. Bingo on my AMZN call.    Nice ..19.74 vs 19.43

  100. You're welcome Griffin.  

    Well, good thing those AMZN puts were expensive – up they go again!  

    You're welcome Toe. 

  101. Hope it holds into tomorrow

  102. Strong growth again for Las Vegas Sands

    04:14 PM ET · LVS

    • Las Vegas Sands (LVS) reports casino revenue soared 38% Y/Y to $1.076B in Q1, led once again by sizzling growth in Macau.
    • The company saw its occupancy rate improve by 280 bp to 94.4% during the period and generated an increase of 18.9% in RevPar to $252.
    • Profit watch: Macau generated profits again right at expectations. EBITDA in Singapore rose 9.7% to $435.2M, while profit margins in Las Vegas where tighter.
    • LVS +1.3% AH

  103. Visa Inc. misses on revenue

    04:10 PM ET · V

    • Visa Inc. (V): FQ2 EPS of $2.52
    • Revenue of $3.16B (+6.8% Y/Y) misses by $30M.
    • Press Release

  104. Deckers Outdoor Corporation beats by $0.07, beats on revenue

    04:09 PM ET · DECK

    • Deckers Outdoor Corporation (DECK): Q1 EPS of -$0.08 beats by $0.07.
    • Revenue of $294.7M (+11.7% Y/Y) beats by $12.57M.
    • Press Release

  105. SunPower Corporation beats by $0.17, beats on revenue

    04:08 PM ET · SPWR

    • SunPower Corporation (SPWR): Q1 EPS of $0.49 beats by $0.17.
    • Revenue of $683.7M (+19.0% Y/Y) beats by $14.33M.
    • Press Release

  106., Inc. misses by $0.01, beats on revenue

    04:08 PM ET · AMZN

  107. Broadcom Corporation beats by $0.05, beats on revenue

    04:07 PM ET · BRCM

    • Broadcom Corporation (BRCM): Q1 EPS of $0.51 beats by $0.05.
    • Revenue of $1.98B (-1.0% Y/Y) beats by $20M.
    • Press Release

  108. Starbucks Corporation EPS in-line, misses on revenue

    04:07 PM ET · SBUX

    • Starbucks Corporation (SBUX): FQ2 EPS of $0.56 in-line.
    • Revenue of $3.87B (+8.7% Y/Y) misses by $80M.
    • Shares +2.7%.
    • Press Release

  109. Government reportedly wants more than $13B from BofA over mortgages

    04:06 PM ET · BAC

    • Bank of America (BAC) in Q1 salted away another $2.4B in legal reserves without saying why, but the WSJ last week reported talks between the bank and the government over a settlement had intensified following last year’s massive JPMorgan deal (also $13B).
    • Today, it’s Bloomberg reporting the U.S. as seeking more than $13B from BofA.

  110. Microsoft Corporation beats by $0.05, misses on revenue

    04:05 PM ET · MSFT

    • Microsoft Corporation (MSFT): FQ3 EPS of $0.68 beats by $0.05.
    • Revenue of $20.4B (-0.4% Y/Y) in-line.
    • Shares +2%.
    • Press Release

  111. Pandora Media beats by $0.02, beats on revenue

    04:03 PM ET · P

    • Pandora Media (P): Q1 EPS of -$0.13 beats by $0.02.
    • Revenue of $180.1M beats by $5.16M.
    • Shares -4.4%.
    • Press Release

  112. At the close

    04:00 PM ET

    • Dow +0.01% to 16502. S&P +0.17% to 1878. Nasdaq +0.52% to 4148.
    • Treasurys: 30-year +0.06%. 10-yr -0.01%. 5-yr -0.03%.
    • Commodities: Crude +0.48% to $101.93. Gold +0.66% to $1293.1.
    • Currencies: Euro 0.08% vs. dollar. Yen -0.22%. Pound -0.11%.

  113. Apple, Google, Intel, Adobe settle no-hire antitrust suit

    03:54 PM ET · AAPL

    • Apple (AAPL +8.4%), Google (GOOG -0.4%), Intel (INTC – unchanged), and Adobe (ADBE -1.9%) have settled an antitrust suit accusing them of creating illegal no-hire agreements.
    • Terms are undisclosed for now. 64K employees had been collectively seeking $3B in damages, and antitrust rules could in theory triple that figure in the absence of a settlement.
    • The settlement comes after PandoDaily unearthed a slew of e-mails from Steve Jobs, Eric Schmidt, and others pointing to the existence of no-hire deals.
    • Separately, Google has denied media reports stating Glass is now publicly available. The company says it failed to edit an order page created for Glass’ April 15 sale (thus giving the impression it’s still available), and will be pulling the page shortly.

  114. E*Trade sees upgrade and price target boosts following earnings

    03:47 PM ET · ETFC

    • Higher than expected net interest income against lower than expected provision expenses are the reason’s for E*Trade’s (ETFC +5.3%) earnings beat last night, says KBW’s Joel Jeffrey, raising his estimates and his price target, but leaving the stock rated at Market Perform.
    • Compass Point (Buy-rated) lifts its PT by $1 to $26.
    • Sandler O’Neill’s Richard Repetto upgrades to a Buy with $24 price target.
    • Previously: Heavy client activity boosts E*Trade

  115. Texas Capital tumbles after earnings miss

    03:18 PM ET · TCBI

    • Net income of $28.3M fell 15% from a year ago, and EPS of $0.60 fell 25% after January’s capital raise.
    • Q1 saw non-performing assets rise, primarily attributable to one borrower. Non-accrual loans of $43.6M, or 0.48% of loans ticked up 10 basis points from Q4.
    • Raymond James downgrades the stock to Market Perform from Outperform.
    • Source: Press Release
    • Previously: Texas Capital Bancshares misses by $0.13
    • TCBI -12.3%

  116. Fredriksen to take control of dry bulk firm Knightsbridge

    03:17 PM ET · VLCCF

    • Shipping magnate John Fredriksen agrees to acquire rival Knightsbridge Tankers (VLCCF +5.7%), creating a major operator of dry bulk carriers with 39 vessels as the sector gears up for an expected recovery.
    • Fredriksen’s unlisted Frontline 2012 Ltd., which already owns 38% of VLCCF, will hand over newbuild contracts on 25 vessels in exchange for new shares that will raise its stake in the company to 70%.

  117. SodaStream on watch with Starbucks set to report

    02:58 PM ET · SODA

    • SodaStream (SODA -5.5%) trades lower a day after a report in an Israeli publication tipping a potential investment by Starbucks sparked a rally.
    • What to watch: Shares of SodaStream haven’t give back all their gains just yet with Starbucks set to report after the close. If a direct investment by Starbucks isn’t disclosed, and there are no hints in capex guidance or capital allocation commentary, SodaSteam could slip even lower.

  118. D.R. Horton bets on bargain homes

    02:55 PM ET · DHI

    • “We wouldn’t be getting into Express Homes if we didn’t think it was the next segment of the market to recover,” says D.R. Horton (DHI +8.2%) CEO Donald Tomnitz.
    • His company’s Express Homes offers properties in the $120K-$150K range, an interesting bet given the huge quarter D.R. Horton just racked up by focusing on higher-end homes. Just getting underway this year, Express Homes is now concentrated in Texas, Florida, and Georgia. The homes are offered turnkey, with no options or upgrades available.
    • Still in rollout stage, the company has and expects to hit “aggressive targets” in 2015. D.R. Horton says the demand for the homes is there, but what’s lacking is supply as all-cash investors (from Wall Street and elsewhere) have hoovered up everything cheap coming onto the market.
    • Previously: D.R. Horton soars – sales and sales price both gain

  119. Google+ chief leaving Google

    02:47 PM ET · GOOG

    • Nine days after launching a one-day Google Glass promotion for the general public, Google (GOOG -0.4%) has once more made its display glasses available to all, albeit without announcing the move. Glass microdisplay supplier Himax (HIMX -2%) must be pleased.
    • The Explorer Edition of Glass still costs a steep $1,500. Glass’ full commercial launch – no ETA has been given, but an FT report suggested it’ll happen in 2H14 – will almost certainly involve a much lower price tag. Public attitudes towards Glass still remain very mixed, but businesses and institutions are dreaming up plenty of use cases.
    • Meanwhile, Google+ chief Vic Gundotra has announced he’s leaving following an 8-year stint at Google. Gundotra spearheaded the integration of Google+ – now has 300M+ MAUs, but engagement is still light – with a vast array of Google services, thereby turning it into an identity layer for the company’s Web empire (and sometimes triggering backlashes).
    • A Quora question about how Gundotra is perceived at Google yielded a positive response from an ex-engineering director – “Vic is a great communicator.” – and a less charitable anonymous response. “Internally, the Google culture is very open with people speaking their mind honestly. In contrast to that, Vic comes across as a used car salesman.”
    • Update: Google has denied reports stating Glass is publicly available. The company attributes the misunderstanding to a failure to edit an order page for the April 15 sale.

  120. Choppy ride for United Continental following earnings

    02:27 PM ET · UAL

    • United Continental (UAL -9.4%) put in a weaker quarter than Delta Air Lines and American Airlines in Q1 with passenger traffic dropping 0.3% and a key revenue metric sliding 2%.
    • Of note, the company’s higher exposure to Asia was a drag in Q1 and could continue to pull down its overall results.
    • The under-performance by UAL in Q1 was enough to prompt Wolfe Research to warn the carrier may face a “significant structural disadvantage” to its peers.
    • Investors have some concerns of their own, pushing UAL shares down to below $42.

  121. Facebook turns negative; company acquiring fitness app

    02:11 PM ET · FB

    • After trading sharply higher premarket, Facebook (FB -0.7%) is now down slightly, as investors balance big top and bottom-line beats (the company’s fourth in a row) with concerns about slowing growth and a CFO change.
    • Facebook has announced today it’s buying Finland’s ProtoGeo, developer of popular fitness-tracking app Moves. ProtoGeo says its team will work on improving Facebook’s products/services, but will also continue supporting its standalone app and has no plans to “commingle” its data with Facebook’s.
    • The acquisition comes amid surging industry hardware and software investments in mobile health/fitness-tracking solutions. Samsung included a slew of health/fitness features within its Galaxy S5, and Apple will reportedly do the same for the iPhone 6 and its anticipated iWatch. Google’s new Android Wear platform also includes health/fitness-monitoring support.
    • Separately, Facebook has launched a newswire page in partnership with startup Storyful in an effort to get more breaking news into feeds. Mark Zuckerberg has wanted Facebook to be the world’s “best personalized newspaper,” but users haven’t always felt the same way.

  122. Lam Research, Ultratech fuel chip equipment stock rally

    01:42 PM ET · LRCX

    • Lam Research (LRCX +11%) beat FQ3 estimates and guided on its CC (transcript) for FQ4 revenue of $1.19B-$1.29B and EPS of $1.14-$1.28, above a consensus of $1.16B and $1.09. Ultratech (UTEK +3.6%) missed Q1 estimates, but has reiterated guidance for 25%-30% 2014 revenue growth (above a 23.5% consensus).
    • Just as importantly for the industry, Lam has forecast the global wafer fab equipment market will be worth $32B in 2014 – $1B more than what Gartner previously forecast.
    • Lam also mentioned it has “seen some strengthening” in DRAM equipment orders – clients have been conservative with their capex following industry consolidation – and a “sustained commitment” among logic/foundry clients (Intel and TSMC?) to advanced processes (20nm, 3D transistors, etc.). However, there have been “some slight delays” in 3D NAND flash investments.
    • Chip equipment peers are also up: AMAT +1.4%. KLAC +1.5%. ASML +2.1%. ACLS +1.6%. CAMT +5.3%. RTEC +1.5%. PLAB +3.4%. One notable exception is Teradyne (TER -4.1%), which provided light Q2 EPS guidance – $0.36-$0.43 vs. a consensus of $0.49 – to go with a Q1 beat. Revenue guidance is in-line.
    • The group sold off last week after ASML offered soft guidance and a cautious 2H outlook. KLA reports after the bell.

  123. Homebuilders on the move as March quarter results roll in

    01:21 PM ET · ITB

    • The iShares DJ U.S. Home Construction ETF (ITB +2.7%) gains as earnings roll in from D.R. Horton, PulteGroup, Ryland, and M/I Homes. While PulteGroup saw slowdowns in closings and new orders, but offsetting increases in prices, D.R. Horton reported sales, new orders, and prices all on the rise. DHI is ahead 8%, Pulte 3%, Ryland (RYL +2.2%), M/I Homes (MHO +5.9%).
    • The SPDR S&P Homebuilders ETF (XHB +1.2%) is more of a homebuilding supply play.
    • Other builders: NVR (NVR +3.4%), Lennar (LEN +3.5%) Standard Pacific (SPF +2.8%), M.D.C. Holdings (MDC +3.2%), Hovnanian (HOV +2.5%), Toll Bros (TOL +4.2%).

  124. D.R. Horton soars – sales and sales price both gain

    01:10 PM ET · DHI

    • FQ2 net income of $131M or $0.38 per share is up 18% from a year ago. Revenue of $1.7B is up 22%. Homes closed of 6,194 is up 10%. Average sales price up 10%.
    • Net sales orders during Q of 8,569 up 9% Y/Y; value of net sales orders of $2.4B up 20%. Cancellation rate of 19%. Backlog of 10,059 homes up 5%; value of backlog of $2.8B up 18%.
    • Source: Press Release
    • Previously: D. R. Horton beats by $0.04, beats on revenue
    • DHI +8.3%

  125. Gazprom charges Ukraine additional $11.4B for unpaid gas

    12:58 PM ET · OGZPY

    • Russia’s Gazprom (OGZPY) has billed Ukraine’s Naftogaz $11.4B for not importing the full amount of natural gas under a 2013 supply contract, adding pressure on the Ukraine government as the prospect of supply cuts looms.
    • Ukraine’s ballooning debt could give Moscow the right to demand an early repayment of a loan, which could theoretically cause a domino effect on ~$20B of Ukraine sovereign and quasi-sovereign debt.
    • The latest figures from Ukraine put state debt at 804B hryvnia ($70B), or 52,7% of the GDP; if Gazprom’s demand is met, the ratio would rise above a 60% threshold that would give Russia the right to demand an early redemption.

  126. Tobacco stocks put in some gains

    12:57 PM ET · LO

    • Tobacco stocks brush aside news that the FDA is moving closer to regulating the e-cigarette industry.
    • Lorillard (LO +1.1%), Altria (MO +0.6%), Reynolds American (RAI +1.5%), Vector (VGR +1.1%), and Philip Morris (PM +0.6%) are all in positive territory for the day.
    • The early read on the action by the FDA is that it may favor the larger players in the e-cig industry as the barriers to entry become more rigid.

  127. Amazon reportedly paying $300M+ to HBO; Prime Pantry service launched

    01:08 PM ET · AMZN

    • Re/code reports Amazon (AMZN +3.5%) is paying HBO (TWX +0.1%) $300M+ over three years for its streaming deal. While steep, that figure is less than many estimated, particularly given the cost of Amazon’s deals with Viacom and Epix.
    • The Amazon/HBO deal covers many of HBO’s biggest hits, including The Sopranos, The Wire, Six Feet Under, Boardwalk Empire, and True Blood (early seasons for the last two). But it doesn’t cover HBO’s biggest current hit (Game of Thrones).
    • Separtely, Amazon has launched Prime Pantry, its latest salvo at supermarkets and Wal-Mart/Target’s grocery ops. Prime Pantry allows Prime subs in the continental U.S. to have up to 45 pounds of groceries shipped for a flat fee of $6. It arrives as Amazon gradually expands the reach of its AmazonFresh same-day delivery service.
    • Shares are up strongly ahead of today’s Q1 report. Recent ChannelAdvisor data has been encouraging, a sales tax survey less so.

  128. Mixed report from Time Warner Cable

    12:20 PM ET · TWC

    • Time Warner Cable (TWC +0.2%) narrowed video customer losses to 34K in Q1 while adding 269K new broadband subscribers.
    • At the end of the quarter, the company had 11.2M video customers and 11.4M broadband Internet customers in its fold.
    • Average monthly programming costs per video subscriber rose 10.2% to $37.69, but overall the company kept a lid on cost increases.

  129. Mortgage slowdown hits Old Republic title insurance ops

    12:11 PM ET · ORI

    • “While title insurance operations remained profitable, a transitory real estate and mortgage market downturn halted the fast-paced earnings progress of the past three years,” says Old Republic (ORI -3.6%), leading off its Q1 earnings report.
    • General insurance net premiums earned of $663.2M up 9.1% Y/Y. Net investment income of $66.1M up 6.1%. Benefit and claim costs of $500.9M up 12.2%. Pretax operating income of $64.6M falls 6.2%.
    • Title insurance net premiums earned of $393.8M falls 14.5% Y/Y. Net investment income of $7.1M up 9%. Pretax operating income of $4.7M falls 77.8%.
    • Mortgage insurance and consumer credit run-off business post pretax operating income of $19.5M vs. a $20.2M loss one year ago.
    • Source: Press Release
    • Previously: Old Republic International EPS in-line, misses on revenue

  130. MicroStrategy jumps on Deutsche upgrade, hopes for new policies

    11:43 AM ET · MSTR

    • Deutsche’s Karl Keirstad has upgraded MicroStrategy (MSTR +12%) to Buy. He reports management comments at yesterday’s shareholder meeting suggest the company is finally ready to “open up to the Street and is now willing to meet with top shareholders.”
    • Keirstad: “Roughly 10 years ago, MSTR adopted a no-communication policy with the Street, meaning no earnings call, no guidance, no contact with investors, no response to Street inquiries … This lack of visibility has been one of the biggest weights on MSTR’s industry-low multiple.”
    • He still doesn’t expect the BI software vendor to offer guidance, but thinks earnings calls are now “under consideration.” With shares only going for 1.4x 2014E EV/sales in spite of MicroStrategy’s possession of a best-in-class BI suite, Keirstad sees plenty of room for multiple expansion if the company “truly opens up.”
    • If history is any guide, Q1 results could arrive next week.

  131. Sina falls after online publishing, video licenses revoked

    11:11 AM ET · SINA

    • The Chinese government has revoked Sina’s (SINA -5.8%) online publishing and video licenses after finding articles and videos posted on that contained “lewd and pornographic content.”
    • For the time being, is fully operational. A government official tells Xinhua it’s not certain when the punishment will be implemented, and that Sina should have the chance to appeal. Sina’s Weibo unit has already run afoul of regulators plenty of times.
    • Sina’s shares are off sharply on a down day for Chinese Internet stocks.

  132. Diamond Offshore profit beats estimates as rig dayrates improve

    10:49 AM ET · DO

    • Diamond Offshore (DO +3.4%) moves higher after Q1 earnings and revenues came in ahead of Street estimates, and last night’s fleet status report outlined short-term contracts on four rigs.
    • Q1 revenues fell to $709M from $729M, while expenses rose to $523M from $516M.
    • Utilization rates for DO’s ultra-deepwater rigs fell to 66% in Q1 from 91% in Q4 2013, but dayrates for ultra-deepwater rigs rose nearly 11% Q/Q to $387K while dayrates for deepwater rigs rose ~4% to $418K.
    • DO also said it would pay a special quarterly cash dividend of $0.75/share on top of its regular dividend of $0.13; repurchased 1.87M shares during Q1 at an average price of $46.32.
    • While falling rig demand and utilization is likely to affect the entire sector, analysts expect DO to fare worse than rivals, given the age of its fleet.

  133. PT hikes, upgrade follow Apple’s FQ2 beat; is Dow inclusion next?

    10:40 AM ET · AAPL

    • Apple (AAPL +8%) has received 5 PT hikes to go with one upgrade (from CLSA) following its iPhone-driven FQ2 beat, dividend/buyback increases, and split announcement.
    • Jefferies (Buy) isn’t crazy about FQ3 guidance (it thinks FQ2 demand pull-in is a factor), but is pleased with the pickup in iPhone sales growth and recommends buying shares “ahead of what we believe will be a successful iPhone 6 launch.”
    • Canaccord (Buy): “While our survey work indicates iPhone will likely lose share over the next several months to refreshed Android products, we believe Apple will win back meaningful high-end market share during [2H14].”
    • Nomura (Neutral) is more cautious, noting growth was just 0.4% Y/Y outside of China and Japan. But it also sees “little risk of a material negative disappointment in the coming months.”
    • Also: 1) Ahead of Angela Ahrendts’ arrival next week, Tim Cook suggests Apple plans to triple its Chinese store count over the next two years. 2) Many observers have pointed out Apple’s split could lead it to join the Dow (DIA), given the index is price-weighted rather than valuation-weighted.
    • More on Apple’s FQ2. CC transcript.

  134. Mortgage REITs plug along as first Q1 reports roll in

    10:36 AM ET · REM

    • A check of the mortgage REITs (REM +0.1%) finds not a lot going on stock price-wise following the first Q1 earnings reports from the sector this week (CYS Investments and Hatteras). As expected, book values grew and prepayments remained at a low level.
    • Perhaps unexpected was a good deal of caution from CYS management about mortgage prices – right now, it’s finding better value in Treasurys, and awaits a pullback in MBS prices before boosting those holdings. “The mortgage market is a little kid playing with matches,” said CEO Kevin Grant on the earnings call (transcript). “We just don’t know when everybody’s fingers are going to get burnt. The traders that play in this market, they know this and they know they are playing with matches.”
    • Amid the low supply of MBS out there, Hatteras (HTS +0.1%) management on its call (transcript) says it now has 10 originators delivering wholesale product to the company covering more than half of monthly cash flow needs. Up next is expansion into jumbo ARMs.
    • Other sector ETFs: MORT, MORL
    • Individual names: Annaly (NLY +0.6%), American Capital (AGNC +0.7%), (MTGE +0.2%), Armour (ARR +0.1%), Two Harbors (TWO -0.6%), Invesco (IVR -0.1%), Capstead (CMO +0.3%), MFA Financial (MFA +0.1%), Western Asset (WMC +0.5%).

  135. More on Quest Diagnostics Q1 results

    10:27 AM ET · DGX

    • Q1 revenues: $1.75B (-2.3%).
    • Income from continuing operations: $104M (-10.3%).
    • EPS: $0.71 (-0.1%).
    • Value per requisition decreased 2.8% due to changes in reimbursement and last year’s toxicology acquisition.
    • Harsh winter weather decreased revenues and volume by 2% and adjusted EPS by $0.11.
    • CF Ops: $84M (+$78.7%).
    • 2014 guidance:
    • Revenue growth: 2% – 4%.
    • Adjusted EPS: $3.95 – $4.15.
    • CF Ops: $300M.
    • CAPEX: $300M.
    • (DGX -2%)

  136. PetroChina profit slides as crude prices drop

    10:25 AM ET · PTR

    • PetroChina (PTR +0.1%) says its Q1 net profit fell 4.9% Y/Y to 34.2B yuan ($5.5B) from 36B yuan due mainly to rising costs and a decline in international crude prices.
    • Revenue fell 2% to 529B yuan because of a lower contribution from PTR’s upstream E&P operations; crude oil output rose 2.3%, although the average selling price for PTR’s crude oil fell 2.9% during the period.
    • Operating losses from the refining and chemical businesses narrowed to 2.2B yuan from 4.7B yuan, helped by the Chinese government’s authorization in September for an increase in refined product prices.

  137. Verizon -2% on lower postpaid adds; Sprint, T-Mobile also off

    10:10 AM ET · VZ

    • Verizon (VZ -2%) had only 539K wireless postpaid net adds in Q1 (549K total), down from 677K a year ago (720K total) and for once below AT&T’s quarterly postpaid figure of 625K. Also, retail churn rose 7 bps Y/Y to 1.37%, and retail postpaid churn 6 bps to 1.07%.
    • Those figures raise the question of whether Verizon’s commitment to a premium pricing strategy in the face of a T-Mobile-launched price war is impacting subscriber adds.
    • Nonetheless, wireless service revenue grew 7.5% Y/Y, nearly even with Q4′s 8% and much better than AT&T’s 2.2%. Wireless op. margin rose 210 bps to 35%, and retail postpaid ARPA 6.3% to $159.67. Verizon ended Q1 with 103.3M retail connections (97.3M postpaid).
    • Wireline revenue fell 0.4%, as 4.4% and 6.4% declines in enterprise and wholesale revenue (caused in part by voice weakness) offset a 6.2% increase in consumer retail (driven by 15.5% FiOS growth). Wireline op. margin rose 10 bps to 1.5%.
    • 98K and 57K FiOS Internet and TV subs were respectively added, down from 126K and 96K in Q4. Total broadband connections (FiOS or otherwise) rose 1.5% to 9M.
    • Q1 free cash flow was $3.93B, below net income of $5.99B but above illustrative net income of $3.8B. Verizon is still expecting 4% 2014 revenue and EBITDA growth. Its dividend yield stands at 4.6%.
    • Sprint (S -3.2%) and T-Mobile (TMUS -2%) are following Verizon lower. They fell yesterday in the wake of AT&T’s report. Sprint reports on April 29
    • Q1 results, PR,

  138. IMAX trails off following earnings miss

    09:56 AM ET · IMAX

    • IMAX (IMAX -4.9%) trades lower after missing profit estimates with its Q1 report and coming in about $2.5M light on revenue.
    • The company reports a backlog of 431 theatres compared to 282 a year ago.
    • During Q1, IMAX signed contracts for 36 new theatres.

  139. Under Armour lower after cautious earnings call

    09:43 AM ET · UA

    • Under Armour (UA -7.5%) trades lower after execs strike a slightly cautious tone during the firm’s earnings call.
    • Comments by management on Under Armour’s sales growth into Q4 and SG&A expenses for Q2 and Q3 could bring valuation questions to the forefront if they are interpreted as not meeting some bullish expectations.
    • Earnings call webcast
    • Previous: UA earnings

  140. Barclays defends pay in front of angry shareholders

    09:32 AM ET · BCS

    • “Bonuses up, profits down. Not a headline we would have chosen,” said Barclays (BCS) Chairman Sir David Walker at the bank’s heated annual meeting today. The contentious action comes following the decision to boost the bonus pool by 10% last year despite a fall in profits. Walker contends to increases were necessary to prevent an exodus of key investment bank staff.
    • “Our business was attacked very aggressively by competitors, particularly in the US,” he said, noting one case of a U.S. bond trading desk where two-thirds of the staff and two co-heads threatened to leave.
    • “We are paying for Manchester United but we are getting Colchester United,” says one small shareholder, summing up the feeling in Royal Festival Hall today.
    • Just before the annual meeting got underway: Barclays reports “significant” fall in fixed-income revenue
    • Nevertheless, it’s a bull market. BCS +0.9% premarket

  141. More on Waste Management Q1: Net profit jumps 36%

    09:27 AM ET · WM

    • Waste Management’s (WM) net profit rose to $228M from $168M
    • Increases guidance for free net cash flow, saying it expects $1.4-1.5B vs prior guidance of above $1.3B.
    • However, Waste Management says that regarding other elements of its guidance, “it’s difficult to predict underlying business trends in the first quarter due to winter seasonality.” Still, “early April volumes indicate a normal seasonal upturn.” Waste Management expects to “refine” its guidance after Q2.
    • Shares are -1.6%. (PR)
    • Previous

  142. Starbucks’ FQ2: Steady comp growth, margin improvement

    04:24 PM ET · SBUX

    • Starbucks (SBUX) reports global comparable store sales increased 6% in FQ2 vs. 5% in FQ1 and 6% for the year-ago period.
    • Comp growth was fairly consistent across regions: Americas and U.S. +6%; EMEA +6%; China/Asia Pacific +7%.
    • Operating margin improved 130 bps to 16.6% on sales leverage gains and lower commodity costs (coffee was hedged).
    • The company added 335 net new stores during the quarter.
    • FY14 EPS guidance is increased to $2.62-$2.68.
    • SBUX +0.9% AH

  143. Microsoft’s Office 365/Azure sales jump; Windows OEM sales up 4%

    04:24 PM ET · MSFT

    • Microsoft’s (MSFT) Commercial revenue grew 7% Y/Y in FQ3 to $12.7B, a little below FQ2′s 10% clip. Devices & Consumer revenue grew 12% to $8.3B after growing 13% in FQ2.
    • Commercial Licensing (50% of revenue, 65% of gross profit) sales +10% vs. +7%, with Windows volume licensing up 11% and and key server productivity offerings (Lync, SharePoint, Exchange) collectively growing double-digits.
    • Commercial Other +31% vs. +28%; 100% and 150% respective increases for Office 365 and Azure fueled the growth. The division is now nearly 10% of revenue, but still makes up less than 4% of gross profit (lower cloud margins).
    • D&C licensing rose 1% after falling 6% in FQ2, thanks in part to stabilizing PC sales; Windows OEM revenue rose 4%.
    • D&C hardware +41% (thanks to Xbox One sales) ahead of the Nokia deal’s closing; Surface revenue totaled just $500M. D&C Other +18%; Office 365 Home added almost 1M subs, raising its total base to 4.4M.
    • Drops in sales/marketing and G&A spend led opex to fall 7% Y/Y to $7.49B. That boosted EPS, as did $1.8B in buybacks.
    • Satya Nadella hosts his first CC at 5:30PM ET, guidance will be provided.
    • MSFT +2% AH. FQ3 results, PR.

  144. Stocks mostly higher, Apple results bring investors back to tech

    04:20 PM ET

    • Stocks finished mostly higher in a volatile session, as the main indexes swung in and out of negative territory on worries over military escalation in Ukraine, but investors mostly kept focus on positive earnings and stronger than expected durable-goods orders.
    • Tech shares and the Nasdaq got a huge lift from an 8.2% gain for Apple – its biggest one-day gain in two years – after it reported better than expected quarterly results, increased its stock buyback program, raised its dividend and announced a 7:1 stock split.
    • Healthcare stocks lagged, largely due to the underperformance of biotechs; financials also trailed other sectors.
    • After a 39-point rise and 49-point fall, the Dow ended little changed after components Caterpillar, 3M and Verizon posted mixed quarterly results.
    • Gold futures added 0.5% to $1,290 to end at a one-week high, but other haven investments, such as Treasurys, pared early gains; the 10-year Treasury yield dropped a basis point to ~2.69%.

  145. From Bloomberg, Apr 24, 2014, 11:41:05 AM

    Russian stocks slid to a month low
    and government bonds declined as President Vladimir Putin warned
    Ukraine against continuing its offensive on pro-Russian
    separatists after troops killed five rebels in an eastern city.

    To read the entire article, go to
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  146. From Bloomberg, Apr 23, 2014, 10:32:39 PM

    Logos of CJSC Transmashholding, a Russian locomotive and rail equipment manufacturer, and Alstom SA, during the III International Rail Salon Expo 1520 in Moscow. Photographer: Andrey Rudakov/Bloomberg

    General Electric Co. can dip into the $57 billion of cash it has amassed overseas to buy France’s Alstom SA in its biggest acquisition ever, a person with knowledge of the matter said.

    To read the entire article, go to
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  147. From Bloomberg, Apr 24, 2014, 3:12:30 PM

    NexGen complete knee solution manufactured by Zimmer Holdings Inc. Source: Zimmer Holdings Inc. via Bloomberg

    Zimmer Holdings Inc. (ZMH), a maker of
    artificial hips and knees, agreed to acquire rival Biomet Inc.
    for $13.4 billion to become the second-largest company in the
    rebounding market for treating muscle and orthopedic injuries.

    To read the entire article, go to
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  148. From Bloomberg, Apr 24, 2014, 1:05:14 PM

    April 25 (Bloomberg) — U.S. President Barack Obama meets Honda Motor Co.’s latest robot, Asimo, while touring a science museum in Japan yesterday.
    The kid-sized robot chatted in English with Obama, then ran, jumped and kicked a soccer ball. (Source: Bloomberg)

    In 1986, Honda Motor Co. built a pair of robotic legs that could walk in a line. A decade later, it added an upper body. Yesterday in Tokyo, Honda’s latest robot, Asimo, met its first world leader: It chatted in English with U.S. President Barack Obama, then ran, jumped and kicked a soccer ball.

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

         May 31 (Bloomberg) — Laura Nigro, executive vice president of Nest Seekers International’s office in Bridgehampton, New York, talks about the real estate market in Long Island’s Hamptons region.
    She speaks with Tom Keene and Sara Eisen on Bloomberg Television’s “Surveillance.” Howard Ward, chief investment officer at Gamco Investors Inc., also speaks. (Source: (Source: Bloomberg)

    Home sales in New York’s Hamptons, the beach retreat for financiers and celebrities, surged in the first quarter as stock-market gains and fatter Wall Street bonuses fueled demand for luxury properties.

    To read the entire article, go to
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  150. From Bloomberg, Apr 24, 2014, 12:11:32 PM

    Workers move drying coffee beans at the Boa Esperanca farm near Braganca Paulista, Brazil. Photographer: Paulo Fridman/Bloomberg

    Brazil’s drought made arabica
    coffee this year’s best-performing commodity. Now, farmers are
    facing a downpour that is once more threatening crops.

    To read the entire article, go to
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  151. TXN butterfly – Well, I am attached to another object by an inclined plane, wrapped helically around an axis…

    Yesterday I did not manage to get my TXN order filled and did not realize that it was earnings day, so I left the orders overnight…(I know, I know, I am learning here!) Today I only have half a butterfly! Only the $48 call and the $40 put filled and the $44 put and $50 call are way off! I was thinking on waiting a few days to see if TXN retraces a little and I can fill those orders closer to the original target. What do you think, guys and gals?

  152. From Bloomberg, Apr 24, 2014, 8:30:51 AM

    Greek Prime Minister Antonis Samaras. Photographer: Kostas Tsironis

    Shut out of international bond markets for four years, Greek Prime Minister Antonis Samaras wasn’t going to take any chances with his country’s return.

    To read the entire article, go to
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  153. From Bloomberg, Apr 24, 2014, 4:10:23 PM

    Visa Inc. (V), the world’s biggest
    bank-card network, reported a fiscal second-quarter profit that
    beat analysts’ estimates as consumer spending climbed.

    To read the entire article, go to
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  154. From Bloomberg, Apr 24, 2014, 1:14:24 PM

    A fund managed by IVG Immobilien AG and Evans Randall Ltd. bought the tower at 30 St. Mary Axe, left, from insurer Swiss Re Ltd. for about 600 million pounds ($1 billion) in 2007. Photographer: Chris Ratcliffe/Bloomberg

    Lenders to the Gherkin, the conical
    skyscraper that’s one of London’s best-known landmarks,
    appointed a receiver to take control of the building after years
    of defaults.

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

    Photographer: Brian Stablyk/Getty Images

    The patient smoked cigarettes in the passenger seat of the ambulance every week, chatting with the driver while taxpayers foot the $1,000 bill to drive him four blocks for his dialysis treatment.

    To read the entire article, go to
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  156. From Bloomberg, Apr 24, 2014, 6:59:00 AM

    Spain’s Treasury sold three-year to
    10-year debt at record low yields after the Bank of Spain said
    growth sped up in the first quarter, underpinning a recovery in
    the euro region’s fourth-largest economy.

    To read the entire article, go to
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  157. From Bloomberg, Apr 24, 2014, 11:09:27 AM

    European Central Bank President Mario Draghi said, “In order to fulfil its mandate, the Governing Council is committed – unanimously – to using both unconventional and conventional instruments to deal effectively with the risks of a too-prolonged period of low inflation.” Photographer: Ralph Orlowski/Bloomberg

    Mario Draghi said the European Central Bank might start broad-based asset purchases if the inflation outlook worsens as he prepares the ground for one of the most radical policies in the ECB’s history.

    To read the entire article, go to
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  158. From Bloomberg, Apr 24, 2014, 9:45:00 AM

    Pedestrians walk past a store on 5th Avenue in New York. Photographer: Craig Warga/Bloomberg

    Consumer confidence rose last week to its highest level since August as Americans were more upbeat about being able to provide for their families than at any time in six years.

    To read the entire article, go to
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  159. From Bloomberg, Apr 24, 2014, 3:00:55 PM

    How’d this work out? Netanyahu, Abbas and Obama in September 2009. Photographer: John Angelillo/Pool via Bloomberg

    The decision by Israel’s security cabinet to suspend peace talks now that the Palestinian Authority has decided to forge a unity government with Hamas contains elements of reasonableness, realism, hypocrisy and myopia.

    To read the entire article, go to
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  160. From Bloomberg, Apr 24, 2014, 3:50:42 PM

    Photographer: Andrew Harrer/Bloomberg

    Joshua Green argues today that, in fact, Obamacare could help Democrats. Greg Sargent, meanwhile, goes deep into recent polls to reveal the complexity of public opinion about heath care.

    To read the entire article, go to
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  161. After hours gun information on training.

    About 20 years ago I took classes to carry concieled. The instructor taught for the CIA, FBI, and 2 state agencies. It shocked me that they teach you to shoot to kill people. Just to stop someone is not acceptable the heart or the head. I never got a permit and hope the training stops ASAP. The training is the same today. The defensive arts are reversal to this in that you stop the attacker and flee ASAP.

    Do you really want trained gun carriers? People who have guns are advised by others to practice and most do because they are scary, some people can never shoot accurately because they fear the noise, the kick back, and generally what they do. If you question this just think about how many shots fired by the trained police in a gun fight, 90% misses. It isn't like TV and movies.

    I completly agree that violence is up because of inequality and not have a brighter future. Never forget how many die over drug control, Mexico is our future if we don't smarten up. The most dangerous drug that triggers violence is liquor, and that is legal. Find a cop that doesn't drink, good luck with that. Jail doesn't stop abuse, never has never will.

  162. From Bloomberg, Apr 24, 2014, 2:43:10 PM

    She’s waving to Cliven Bundy. Photographer: Justin Sullivan/Getty Images

    Samuel “Joe the Plumber” Wurzelbacher. Sarah Palin. George Zimmerman. “Bette in Spokane.” Cliven Bundy. Every few months or so, conservatives elevate a new Everyman or Everywoman to embody their crusade. These are the “real Americans,” to use the unsubtle in-group vernacular, who are invariably oppressed by someone or other with an unbending desire to crush all that conservatives believe is good and true and American and free.

    To read the entire article, go to
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  163. Man, spent the entire afternoon doing paperwork to get my visa for Russia and forgot about the earnings. That visa process has to be a joke – I guess it's bad for Russians coming over but having to list every country I visited and the dates over the last 10 years. Gimme a break… Took me 45 minutes just for that. And all the personal information needed. I guess the cold war is still in effect and I'll be listed both with the NSA and the FSB now.

  164. Cliven Bundy / Phil – Watch all these big conservative guys suddenly run away from him after his comments about how good black people had it in slavery…

    Funny how Hannity was rushing to defend a guy who refuses to pay his taxes but watch out if someone in the bottom 20% takes advantage of a program. Apparently, there are 2 sets of rules – for his friends and for the others.

  165. Phil

    You should look closer at charts before posting, the most violence is in the most gun controled states, and vise versa. Your morning post. NJ, NY, MA, RI, and CT are in the top group, not working out as planned, only criminals and cops have guns.

  166. Shadow: The y-axis has "violence-ranking" indicator. Higher rankings (closer to 1) indicate higher prevalence of gun-related violence. Not the best use of data visualization techniques, though.

  167. Gee, taking on Fedex and UPS now:

    Amazon isn't waiting for the advent of courier drones to ship your orders faster than usual: the Wall Street Journal reports that the e-commerce giant has been testing its own US delivery network in New York, Los Angeles and San Francisco. Described in job listings as Last Mile, the initiative is meant to outperform established shippers like FedEx and UPS. These companies are increasing costs, can't always meet capacity and are "impeding innovation in delivery services," Amazon says in one job description.

    AMZN and GOOG will run the world soon!

  168. CLF:  Hammered AH.  Shave and haircut Friday for them with big miss on earnings and revenue.  A good entry position?

  169. I've been contemplating this trade and would much appreciate some input on whether or not I've got the right idea here:

    EGLE – currently at 3.47 (ill round to 3.50 for simplicity)

    Buy 1000 shares @ $3.50 (-$3500)

    Sell 10 June $4 calls @ .50 (+$500)

    Sell 10 June $3 puts @ .50 (+$500) [obligated to buy 1000 more shares if below $3 at expiration]


    obviously worst case scenario it drops to $0 and i lose $5500

    best case scenario  expires above $4 and im forced to sell and end up +$1500

    EGLE stays at 3.50 and i make +$1000 from the premiums i sold and i can repeat going forward.

    finally, lets say it drops to 2.50. then im in 2000 shares for $5500, and i can sell 20 $3 calls going forward until it comes back up / to reduce my cost basis.

    Any input? only reservation I have is there are earnings coming up between now and expiry (perhaps why the premiums are juicy?) 

    thanks in advance!

  170. Phil/ Portfolio management webminar~ I have a 401k portfolio that only invest in mutural funds. I hope your webminar could cover some techniques for managing this type of portfolio. I hope I could download it as I need to work during your webminar time. Anyways, I’ve been very conservative for my retirement. Only bond funds left. Cash is major position.

  171. {Phil // CLF
    Been holding from the beginning
    Jan16 20 / 30 BLCS ( $3.60 ) / Jan16 $20 short puts ( $5.35 )

    My instincts are to wait until they get hammered tomorrow, buy back the short calls and ride it out until I can sell calls again at a reasonable level.

    WWPD ?

  172. CLF – That 18 or so level looks like support to me in the long run. At the same time, there are 2 factors in play:

    1. Some people might bail out leading us lower
    2. Casablanca might come back with their plan and lead us higher.

    A lot of uncertainty in that name right now. I would hold off adding to any position.

  173. Looking a bit toppy again…

  174. I see an incipient cobra.

  175. /NKD just exploded in my face – anyone know why ?

  176. /NKD / Wombat – CPI numbers higher than expected.

    If you are going to play the Nikkei, have a look at the economic calendar I post on Saturday morning with the international numbers. Or look at:

    The rest of the world has their own numbers. If you play currencies or foreign indices, you better be aware of these economic releases.

  177. StJ / CPI
    I was looking at the Tokyo index. Damn.
    I'll let it correct overnight

    Thanks ==

  178. Sent from Bloomberg for iPad

    Watch this video at

    Test Driving Tesla’s Competition: BMW’s i8
    April 24: The ultra high-end electric and hybrid car space is suddenly getting a bit more crowded in China. Tesla had the first deliveries of the Model S to Chinese customers this week, while BMW will roll out its hybrid i8 super sports car for the China market by the end of the year. Bloomberg’s Stephen Engle got behind the wheel of BMW’s new offering in Beijing.

    Download the free application at

  179. From Bloomberg, Apr 25, 2014, 3:32:11 AM

    April 25 (Bloomberg) — Steven Barrow, head of Group-of-10 research at Standard Bank Plc, discusses the ruble amid the possibility of wider sanctions against Russia.
    He talks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Russia’s sovereign debt rating was cut to the lowest investment grade at Standard & Poor’s, which said further downgrades are possible if economic growth deteriorates and the conflict in Ukraine sparks wider sanctions.

    To read the entire article, go to
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  180. From Bloomberg, Apr 24, 2014, 8:10:40 PM

    An agreement between GE and $11.5 billion Alstom may be announced as early as next week, according to people with knowledge of the matter. Photographer: Ty Wright/Bloomberg

    General Electric Co. and Holcim Ltd. are sending a message to their industrial peers: The iron’s hot.

    To read the entire article, go to
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  181. From Bloomberg, Apr 24, 2014, 8:07:09 AM

    Richard Branson at an Airbus plant in Blagnac, near Toulouse, France, in this Jan. 18, 2005 file photo, as Airbus unveiled its A380 superjumbo. Photogarpher: Eric Cabanis/AFP via Getty Images

    U.K. billionaire Richard Branson’s Virgin Atlantic Airways Ltd. still isn’t sure whether it will ever fly the world’s largest passenger plane as it prepares for delivery of its first Boeing Co. 787 Dreamliners.

    To read the entire article, go to
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  182. From Bloomberg, Apr 24, 2014, 5:20:19 PM

    San Juan, Puerto Rico. Photographer: Richard Cummins/Robert Harding World Imagery/Corbis

    Billionaire hedge-fund managerJohn Paulson said today that Puerto Rico’s economy is at the beginning of a turnaround and predicted the island will become the Singapore of the Caribbean.

    To read the entire article, go to
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  183. From Bloomberg, Apr 24, 2014, 8:09:09 AM

    U.S. President Barack Obama said that a security treaty between the U.S. and Japan covers “all territory that is administered by Japan.” Photographer: Junko Kimura-Matsumoto/Pool via Bloomberg

    President Barack Obama warned China the U.S. would protect East China Sea islands administered by Japan and urged the two countries to peacefully resolve a territorial dispute that has raised tensions across Asia.

    To read the entire article, go to
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  184. From Bloomberg, Apr 25, 2014, 1:10:52 AM

    April 9 (Bloomberg) — Michael Bloomberg, the United Nations special envoy on cities and climate, and former mayor of New York City, talks about global climate change, the costs and consequences of pollution, and new energy initiatives.
    Bloomberg is the founder of Bloomberg LP, parent company of Bloomberg News. He speaks with Bloomberg’s Trish Regan at the Bloomberg New Energy Finance Future of Energy Summit 2014 in New York. (Source: Bloomberg)

    China passed the biggest changes to
    its environmental protection laws in 25 years, outlining plans
    to punish polluters more severely as leaders work to limit
    contaminated water, air and soil linked to economic growth.

    To read the entire article, go to
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  185. From Bloomberg, Apr 25, 2014, 4:06:47 AM

    April 25 (Bloomberg) — Steven Barrow, head of Group-of-10 research at Standard Bank Plc, discusses the ruble amid the possibility of wider sanctions against Russia.
    He talks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Stocks fell, led by emerging
    as Russia’s Micex Index headed for its longest losing
    streak in seven weeks after Standard & Poor’s cut the country’s
    credit rating and the U.S. warned Russia of an “expensive
    mistake” in Ukraine. The ruble led currencies lower while
    nickel pared its monthly gain.

    To read the entire article, go to
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  186. From Bloomberg, Apr 25, 2014, 5:16:21 AM

    Anshu Jain, co-chief executive officer of Deutsche Bank AG, said in April last year that the capital increase would allow Deutsche Bank to “take advantage of organic growth opportunities in a changing competitive landscape.” Photographer: Ralph Orlowski/Bloomberg

    Deutsche Bank AG (DBK), Europe’s largest
    investment bank, slid in Frankfurt trading as speculation
    intensified that it may sell shares to bolster capital.

    To read the entire article, go to
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  187. From Bloomberg, Apr 25, 2014, 4:39:38 AM

    April 24 (Bloomberg) — U.S. Secretary of State John Kerry speaks about tensions in Ukraine as Russian forces perform military exercises on the two countries border.
    Kerry speaks at the State Department in Washington. (Source: Bloomberg)

    U.S. Secretary of State John Kerry warned that President Vladimir Putin is running out of time to comply with an accord to ease tensions in Ukraine, as Russia’s military began new exercises on the countries’ border.

    To read the entire article, go to
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  188. From Bloomberg, Apr 25, 2014, 4:16:58 AM

    A rally in 30-year Treasuries has
    pushed returns past 10 percent in 2014, the best start to a year
    in at least two and a half decades.

    To read the entire article, go to
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  189. From Bloomberg, Apr 25, 2014, 12:00:00 AM

    The “Authority of Law” statue stands in front of the Supreme Court building in Washington, D.C. Photographer: Andrew Harrer/Bloomberg

    Even as it deals with hot-button issues like campaign financing and affirmative action, the U.S. Supreme Court has patents on its mind these days.

    To read the entire article, go to
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  190. From Bloomberg, Apr 25, 2014, 4:40:33 AM

    U.K. retail sales unexpectedly rose in March as spending on clothing jumped, adding to evidence the economy gained momentum in the first quarter.

    To read the entire article, go to
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  191. From Bloomberg, Apr 25, 2014, 12:30:43 AM

    April 25 (Bloomberg) — Cliff Tan, East Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ, talks about China’s economy, central bank policy and local currency.
    Tan also talks about Bank of Japan policy and the nation’s Government Pension Investment Fund. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    China’s relaxation of interest-rate
    controls has left cutting banks’ required reserves as the chief
    monetary tool to counter a slowdown, focusing attention on an
    option used in the past decade only during financial crises.

    To read the entire article, go to
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  192. From Bloomberg, Apr 25, 2014, 12:41:33 AM

    April 25 (Bloomberg) — Izumi Devalier, a Japan economist at HSBC Holdings Plc in Hong Kong, talks about the nation’s economic outlook and central bank monetary policy.
    She speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Bank of Japan officials are increasingly concerned the nation’s bond market is failing to reflect emerging inflation, raising the risk of a sudden surge in yields, according to people familiar with the matter.

    To read the entire article, go to
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  193. From Bloomberg, Apr 24, 2014, 5:00:00 PM

    Solar panels manufactured by Panasonic Corp. sit on a rooftop at Fujisawa Sustainable Smart Town in Fujisawa, Kanagawa Prefecture, Japan. Photographer: Akio Kon/Bloomberg

    Developers of solar projects in
    Japan are looking to rooftops, empty lots and industrial parks
    in response to constraints limiting connections to the grid and
    difficulties finding suitable land.

    To read the entire article, go to
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  194. From Bloomberg, Apr 25, 2014, 12:02:09 AM

    April 25 (Bloomberg) — Tomo Kinoshita, chief Japan economist at Nomura Holdings Inc. in Tokyo, talks about the nation’s economy, and government and central bank policies.
    Tokyo’s consumer prices rose 2.7 percent in April from a year earlier, the biggest jump since 1992, pumped up by a sales-tax increase and a year of unprecedented stimulus from the Bank of Japan. (Source: Bloomberg)

    Tokyo’s consumer prices rose 2.7
    percent in April from a year earlier, the biggest jump since
    1992, pumped up by a sales-tax increase and a year of
    unprecedented stimulus from the Bank of Japan.

    To read the entire article, go to
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  195. From Bloomberg, Apr 25, 2014, 2:08:26 AM

    Bundles of Indonesian rupiah banknotes sit on a desk as a clerk punches numbers in a calculator at a currency exchange office in Jakarta. The rupiah, the first quarter’s best-performer, posted the second-biggest loss of the past two weeks. Photographer: Dimas Ardian/Bloomberg

    Fresh signs of faltering growth
    across the developing world are preventing currencies from South
    ’s rand to Indonesia’s rupiah from sharing in gains that
    sent U.S. stocks to a record this month.

    To read the entire article, go to
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  196. From Bloomberg, Apr 24, 2014, 6:03:24 PM

    Who’s ready for some bond-buying in Europe? Photographer: Ralph Orlowski/Bloomberg

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

    To read the entire article, go to
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  197. From Bloomberg, Apr 25, 2014, 5:10:17 AM

    Wimbledon has almost doubled prices
    for its guaranteed seats on Centre Court as it aims to raise
    funds for a refurbishment of its grounds.

    To read the entire article, go to
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  198. Good morning! 

    Good call hanging on on /NKD, Wombat, but bad call playing overnight, when those sort of things do happen.  Up to 14,600 and back to 14,400 – what a ride!  

    Our Futures are down just a bit and will probably flatline into the weekend.  Next week begins with home data (bad), Q1 GDP (weather?) and Consumer Confidence but then we get a Fed Decision on Weds, so you know how crazy next week is going to be.  Chicago PMI is next week to, along with Personal Income, ISM, Auto Sales AND NFP – busy, busy….

    So forgive me for not making a call to go bullish but I would prefer to see more data, and not just pretty bounces on low volume.  


    Check out the S&P chart.  Big volume down, no volume up, again.  This is not a good sign at all.  Also, look what's driving the market:

    4-24-2014 5-28-10 PM Buybacks

    That's not healthy!  

    Asia ended up down with Hang Seng down 1.5% and Shanghai down 1% along with India and Singapore was down half a point.  Nikkei officially finished up 0.17% but gave it up after the bell.  S&P cut Russia's ratings around 5am.  

    Tokyo CPI Spikes To Highest Since 1992 (Well Above Abe's 2% Target)

    U.S., Japan Fail to Clinch Trade Deal

    The U.S. and Japan failed to meet a goal of reaching a broad agreement on free trade during President Obama's three-day stay in Tokyo, Japan's economy minister said.

    Suspicion grows that China is exporting deflation worldwide by driving down yuan

    Commodity Markets Bullish on China

    U.S. Exports A Record Amount Of Gold To Hong Kong In January

    Europe has been weak into lunch, down about half a point across the board.  

    Bank Of England Chief Economist-To-Be Warns: "It's Time To Rethink Everything"

    Ukraine Halts Military Push

    Ukrainian forces moved in on a pro-Russian stronghold, but quickly halted their advance after Russia activated the thousands of troops it has massed just across the border.

    John Kerry Just Gave Russia A Final Warning

    And Then There Is Everything Else: Summary Of All The Ignored Conflicts And Crises Around The World

    Treasury Yield Curve Collapses At Fastest Pace In 7 Years

    • Demand for Home Loans Plunges

      Mortgage lending declined to the lowest level in 14 years in the first quarter as homeowners pulled back sharply from refinancing and house hunters showed little appetite for new loans, the latest sign of how rising interest rates have dented the housing recovery.

    • Demography + Debt = Doom

    And more banker suicides:  52 Year-Old French Banker Jumps To Her Death In Paris

    Visa(V) says revenue growth to slow, Russia sanctions hurting volumes. Visa Inc, the world's largest credit and debit card company, said U.S. sanctions on Russia were hurting its card transaction volumes and that revenue growth would slow further this quarter, sending its shares down 5 percent after the bell. Visa's quarterly revenue growth slid to a single digit in percentage terms for the first time in more than four years, due to a strong U.S. dollar.

    Cliffs Natural(CLF) posts Q1 loss on lower iron ore, coal pricesCliffs Natural Resources Inc, which is facing off against an activist investor that wants to break up the company, posted a first-quarter loss on Thursday on the back of lower market prices for iron ore and metallurgical coal. The Cleveland, Ohio-based miner reported a net loss of $83 million, or 54 cents a share, in the three months to end-March from a net profit of $97 million, or 66 cents a share, in the same period a year earlier.

    General Motors(GM) Being Investigated By SEC, NHTSA, And More

    Broadcom(BRCM) results beat forecasts but China hurtsBroadcom Corp beat Wall Street expectations in the first quarter, although profit and revenue were lower than a year earlier as the company's high-end chips for smartphones faced fierce competition in China. 

    'The Amazing Spider-Man 2' Opens in India Ahead of the U.S.

    Meet AISight – The "Pre-Crime"-Detecting Software Being Installed On Global CCTVs

  199. There goes 1,140 again on the RUT – still a short (/TF) and 16,400 on the Dow (/YM) and 1,870 on /ES.

  200. TXN/Akad – So you filled the short June $48 calls and the long $40 puts?  That's OK as you have 2 years to make adjustments.  I'd pick up the $55 calls for $2.30 because, if TXN goes higher, you can just DD on those and roll the short calls to 2x a higher strike.  On the short puts, since you already sold the June $48 calls and they are in the money, you can sell the $47 puts for .90 as your offset.  That puts you in (assuming you filled at our prices) at $3.25 for the 2016 $40 puts and $2.30 for the 2016 $55 calls for $5.55 worth of longs and then a credit of .75 for the short June $48 calls and .90 for the short June $47 puts and you are right back on track.  

    This is why we pick stocks like TXN, they are very easy to adjust and not likely to burn you in either direction.  

    The butterfly portfolio is our most conservative way to grind out money and, so far, it's averaging about 2% a month with very little cash committed - that doesn't suck

    Good point on guns, Shadow.  That's my problem in general – if you have a gun, then you are saying there are circumstances in which you are willing to shoot people.  That's where it starts.  Once you draw a line, it's a simple thing to move it, to lower the bar as to who you would shoot and under what circumstances.  And, while YOU (the group you) may think YOU are responsible and know exactly where that line should be – the more people you give guns to the more chances there are that one of THEM might have their line a bit lower than yours.  

    They don't have school shootings in China or Japan because people don't have guns.   It's not a complicated thing.  They've had a few stabbings and they've had a guy who gassed a train in Japan 10 years ago – but people don't go on shooting sprees and the number of stabbings is very low too.  It's the same logic the gun people use – if NO ONE has guns, then criminals know that the people they go after are equally armed and, even better, the police are far, far better armed than the criminals, which allows quick resolutions to those encounters.  

    And, from Australia:

    But one of Howard's other lasting legacies is Australia's gun control regime, first passed in 1996 in response to a massacre in Tasmania that left 35 dead. The law banned semiautomatic and automatic rifles and shotguns. It also instituted a mandatory buy-back program for newly banned weapons.

    On Wednesday, Howard took to the Melbourne daily the Age to call on the United States, in light of the Aurora, Colo., massacre, to follow in Australia's footsteps. "There are many American traits which we Australians could well emulate to our great benefit," he concluded. "But when it comes to guns, we have been right to take a radically different path."

    So what have the Australian laws actually done for homicide and suicide rates? Howard cites a study (pdf) by Andrew Leigh of Australian National University and Christine Neill of Wilfrid Laurier University finding that the firearm homicide rate fell by 59 percent, and the firearm suicide rate fell by 65 percent, in the decade after the law was introduced, without a parallel increase in non-firearm homicides and suicides. That provides strong circumstantial evidence for the law's effectiveness.

  201. Russia/StJ – You picked a Hell of a time to go there!  Daily Show on Cliven was very funny, obvious to "Liberals" from day one what a tool that guy was – amazing that Conservatives just can't see it.  It's a great point from that article – all you have to do is shout the right words and the Conservatives embrace you right away.  Of course, that's the secret formula used by many, many bloggers.  I know guys who are secretly flaming liberals who write Conservative blogs because Conservatives will just throw money at you if you reinforce their beliefs.  

    Charts/Shadow – As Decadence notes, it's a poorly constructed chart but it absolutely shows the relationship.  

    AMZN/StJ – I wonder, to what extent, that the new delivery system is impacting UPS?  Even a trial in a few cities would probably explain their poor results in the face of such a big gain in on-line shopping this year.  

    CLF/Mjj – I'm thinking it is a good re-entry (if you are out) – per the CC:

    "The first-quarter's winter weather in North America was some of the worst conditions we have experienced in 30 years," Cliffs' President and Chief Executive Gary Halverson said in a statement.

    Despite the weather's impact, Cliffs said it was maintaining its full-year sales and production volumes for all business segments. Demand from the company's North American customers is "very strong," Cliffs said, reflecting lower-than-normal iron ore inventory stockpiles at its customers' facilities.

    I believe them, it's in-line with why we like them in the first place (US comeback).  

    EGLE/CRS – That's a crazy little sector!   In our LTP, we only sold the 2016 $2.50 puts for $1.30 (now $1.20) as it was simpler and better protected.  EGLE doesn't pay a dividend, so there's no benefit to owning them and, as with all shippers, they always exist on the edge of solvency.  Your ownership trade is more aggressive than I'd go (if I went that way), I'd sell the 2016 $3.50 calls for $1.45 and the $3 puts for $1.50 and then you net 0.55/$1.78 - you can buy twice as many that way!  

    401K/Invest – That's more of a custom issue, why don't you remind me on the weekend and we can talk about it.  Also, first question from me is – can't you find a more flexible 401K?  

    CLF/Wombat – I don't think they'll be down that much, we'll have to see if it's worth doing anything.  

    And what StJ said.  

    LOL Strether.  

    Japan CPI – It's measured in Yen folks!  The Yen is down more than 10% from last year Q1, so of course the CPI is up 3% – how ridiculous that the MSM doesn't realize this! 

    That's why it reversed so quickly, the headline only fooled some of the people (but those people can be fooled all of the time, apparently).  

  202. Phil – In the event of a mkt meltdown, which of the indices, in your opinion do you think has the most potential for % move down.  I'm looking at call options on SDS and the DXD.  Any thoughts? Ideas?

    Thanks .. and thanks for being a great teacher!  I've learned so much in only a month!

  203. Phil,

    FB spread you put out has both 60 long and short puts which can't be held in one account. Could you clarify the transaction?

  204. Louis631 / Market Meltdown

    TZA or SQQQ are almost always going to be your ETFs of choice for aggressive shorts.  They have by far the most volatility, solid volumes, and reasonable premiums.  Also, and maybe most importantly, the NASDAQ and Russell are VERY far ahead of the other indices.