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Friday Failure – 1,880 is a Bust!

Did you see the frightened ones? 
Did you hear the falling bombs? 
Did you ever wonder 
Why we had to run for shelter 
When the promise of a brave new world 
Unfurled beneath a clear blue sky?
 - Pink Floyd

What were we excited about? 

With 204 of the S&P 500 now reporting 68% (139) have beat earnings estimates BUT only 44% (90) have beaten on revenues.  It's yet another year of cost-cutting and share buy-backs to boost earnings per share with no actual growth in real earnings yet the market, overall, is up 35% from where it was last year on a 2.9% overall growth in EPS.  - THAT'S FRIGGIN' CRAZY!  

 

If we back out BAC, who had the crap fined out of them this Q, then the S&P earnigs are up a more respectable 4.9% but, on the other hand, that includes superstars like AAPL, who dropped $13Bn on the S&P by themselves, and it's very unlikely the rest of the S&P will bring up the curve.  In fact, Zacks is now estimating that overall earnings will be DOWN 0.9% for the quarter compared to last year and DOWN 4.6% from last quarter.  

SPY 5 MINUTENo wonder we are seeing the continued exodus of "smart money," who sell in volume into every rally we have.  What's getting scary (and keeping us bearish) is that now we aren't even making gains on weak volume.  Yesterday's move up was 100% due to AAPL, which gained over 8% on the day.  

Since AAPL is 15%+ of the Nasdaq, that 8% gain should have popped the Nasdaq 1.2% and the rally in AAPL suppliers should have lifted the index even more.  But it didn't.  The Nasdaq was only up 0.8%, so it would have been down 0.5% without AAPL's contribution and even further without the rally in suppliers and the sectors that support them.  

As I said to our Members yesterday ahead of the bell, Apple's gains are Samsung and others' lossses, NOT an indication of strength in the sector.  That's why AAPL is our stock of the year – it's simply a better company in a better position this year than their competitors.  Our AAPL trade of the year (see yesterday's post for details), which was added to our Long-Term Porfolio on 12/30, is already at net $69 from an origianl net of $21, so up 228% in just 3 months and well on-track for our 525% target gain.

 On 5 contracts in our Long-Term Portfolio, that's a virtual $24,000, helping to push our Long-Term Portfolio up over 10% for the year already. That works out well, since the topic of Wednesday's Live Webinar was "7 Steps to Consistently Making 30-40% Annual Returns" and, here we are, right on track for 40% in our main portfolio for 2014!  

Keep in mind, we are still playing the market very cautiously, as we don't trust this market at all, so the bulks of our Long-Term Portfolio and our Income Portfolio are still in cash.  We're adding a few companies here and there as they fall (again, see yesterday's post for a few examples or Join PSW and Get These Trades Every Day - LIVE) and, with 3/5 of the S&P still to report, we're fairly certain there will be many more opportunities to add some bargain stocks over the next 30 days.  

As you can see from the Bespoke chart on the right, there's no shortage of bargains to be had after earnings.  Even our beloved IRBT had a bad Q, but it was because of sequestration slowing their military contracts – the consumer segment was gangbusters and we are salivating over the opportunity to jump back in (we sold high) at a discount!  

There are a few others on this list we will be picking up (when they form a good bottom) and a few from the bull list we'll be shorting when they fly too high.  Speaking of flying to high – our ship finally came in on V and, as expected, guidance was a disappointment and they are down about 4% pre-market.  No surprise to us, of course, as we're well aware the bottom 90% consumers are completely tapped out.  V is a Dow component and, of course, that means we shorted the Dow Futures in this morning's Member Chat (16,400 on /YM) and we'll see how low we can go today.  

147608 600 Stickup cartoons

Next week we have another 1,000 companies reporting earnings (100 on the S&P) and a ton of data, including a Fed Rate Decision on Wednesday.  It's going to be an exciting week and we're short into the weekend because we kick off the week with housing data – and we already know that sucks.  

Have a nice weekend, 

- Phil

 


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  1. 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!


  2. Are low volumes that significant when they have been trending lower for quite some time?

    http://blogs.marketwatch.com/thetell/2013/09/03/sp-500-trading-volume-lightest-in-15-years/

    Or have options become more popular than owning stock?

    http://www.businessinsider.com/goldman-where-the-sp-500-trading-volume-went-2013-2


  3. Oil Lines

    R3 – 103.38
    R2 – 102.86
    R1 – 102.43
    PP – 101.91
    S1 – 101.48
    S2 – 100.96
    S3 – 100.53


  4. And wheeeeeeee on oil!


  5. Good Morning!


  6. Phil

    Any good SPY puts here?

    Thanks

    Strether


  7. Good morning!  


  8. Image Detail


  9. Good move on SCO PUTS finally!


  10. Meant the May 26 calls. Sorry


  11. Meant the May 26 calls. Sorry


  12. In the event of melt-down/Louis – I still like TZA best of all.  Small caps went up fast and are likely to go down just as fast in a real crash.  My second choice is the Dow, as China issues will hit the conglomerates hard.  We just did TNA May $63 puts on Wednesday – but, as usual, no one ever believes me until AFTER we turn back down and now those $1 puts are $1.25 (but still good for more).  So, now, how about:

    • TNA May $76/70 bear put spread at $3, selling CMG June $440 puts for $2.95 for net 0.05 on a $6 spread that's $5 in the money with the RUT below 1,140.   It doesn't have to be CMG, of course, anything you REALLY want to own if the market drops is appropriate as a hedge.  
    • DXD ($27.12) June $25/29 bull call spread at $1.70, selling FCX 2016 $30 puts for $3.50.  You can buy 30 of the June spreads for $5,100 and sell 10 of the short puts for $3,500 for net $1,600 on the $12,000 spread.  Figure, in a major crash, people run to gold and FCX has some support.  

    Wheeeee on oil!  $100.50 and now we'll see what the bounce looks like.  

    Volumes/DC – I think they are relevant because I'm comparing up days to down days over a short time.  As an "options guy", I don't see them getting much more popular – I'm still a curiosity at investing events though no longer a pariah – so that's progress!  

    SPY/Streth – I prefer the above.  


  13. SCO/Den – I knew what you meant!  

    Don't forget, in the STP, we took a very aggressive DXD position (60 May $27 calls @ $1.25) as well as SCO, where we bought back the short calls and have just the 10 long May $26 calls and the 10 short May $29 puts.  SCO is at $28 and I'm still struggling with whether I want to risk these past May (summer driving season).  If not, then we can't roll and, if we can't roll, then we need to take our profits on a dip like this.  Tricky…

    Dollar smacked down to 79.80, oil $100.75, gold $1,302, silver $19.77, copper $3.12, nat gas $4.655 and gasoline $3.07 and NOW I like it long with very tight stops (/RB).  


  14. AMZN down on earnings.  Where am I – have I been dreaming for the last 10 quarters and finally we're back to reality?  

    Nope, TSLA is still over $200 – still in fantasy-land…

    CLF just below $18, this is our buy point.

    IRBT below $35 but this might be it at $34 – look sharp.  

    CMG holding around $505 – anything over $500 is good consolidation.  

    GOOG might have stopped falling.  

    Don't forget, the Dip Buyers were not burned so we have to reset the count to 3 again.   They need to be burned 3 times before we can get a significant sell-off.  


  15. FAS/Phil, the calls we sold yesterday--are there longer term calls covering those in the STP? or were they naked?  separately, where can i view the STP holdings?


  16. Reuters/UofM Consumer Sentiment at 84.1

    09:55 AM ET


  17. Deckers opens +6%, gives strong full-year revenue guidance

    09:49 AM ET · DECK

    • Deckers Outdoor (DECK +5.9%) surges higher after posting a smaller than expected loss and beating revenue forecasts for the three-month transition period that ended March 31.
    • DECK reported 11.7% growth in revenues to nearly $295M, beating analyst expectations and the company’s own guidance of 6% revenue growth.
    • UGG Australia, which contributes the most to DECK total revenues, posted a 15.8% growth in sales; direct-to-consumer comparable sales, including same-store sales and comparable sales from e-commerce, jumped 16.9%.
    • Sees Q1 EPS of -$1.33 vs. -$1.05 analyst consensus estimate and revenue growth of 12% vs. 9% to $186M consensus; sees FY 2015 EPS growth of 13.5% vs. ~13% consensus and revenue growth of 13% vs. 10% to $1.74B consensus.
    • Sterne Agee believes DECK guidance probably is conservative, and keeps its Buy rating and $95 price target on the shares.


  18. US Apr. PMI Services Flash Index at 54.2

    09:45 AM ET


  19. Cytokinetics ALS drug fails

    09:34 AM ET · CYTK

    • Shares of Cytokinetics (CYTK -60.1%) are set for an ugly day of trading after its lead product tirasemtiv misses its Phase 2b primary endpoint of significantly improving muscle function compared to placebo in ALS patients.
    • The disappointing result forces the company to consider ending the product’s development. Last year the firm made a dosing error in the clinical trial when it mistakenly gave placebos to patients in the treatment arm. The foul-up delayed the trial by three months and forced it to take a $5M charge.
    • The company’s other lead program, omecamtiv mecarbil via a partnership with Amgen, also failed a Phase 2b trial (IV formulation) last September. Amgen awaits the results of a mid-stage trial on an oral formulation before deciding to proceed or exit.
    • The landscape for good news looks barren.


  20. At the open

    09:32 AM ET

    • Dow -0.34% to 16446. S&P -0.3% to 1873. Nasdaq -0.68% to 4120.
    • Treasurys: 30-year +0.21%. 10-yr +0.12%. 5-yr +0.09%.
    • Commodities: Crude -1.39% to $100.52. Gold +0.69% to $1299.5.
    • Currencies: Euro 0.09% vs. dollar. Yen -0.24%. Pound -0.09%.


  21. What the Google+ chief exit might mean

    09:26 AM ET · GOOG

    • “Today’s news has no impact on our Google+ strategy – we have an incredibly talented team that will continue to build great user experiences across Google+, Hangouts and Photos,” says a GOOG representative, responding to the idea that Google+ chief Vic Gundotra’s exit means the service is essentially no longer attempting to compete with the likes of Facebook and Twitter.
    • Techcrunch reports the Google Hangouts team will be moving to the Android team, and photos is likely to follow. “Basically, talent will be shifting away from the Google+ kingdom and towards Android as a platform.” It’s not clear where the rest of the team will go, but Larry Page could follow the lead of Mark Zuckerberg and send the bulk of the group to mobile roles, signaling a major acceleration of mobile in general, rather than Google+.
    • Previously: Google+ chief leaving Google


  22. Investors on edge over Ukraine fears, disappointing earnings reports

    09:25 AM ET

    • Stock futures indicate a lower opening as escalating tensions between Russia and Ukraine as well as some disappointing earnings reports put investors on edge; S&P and Dow -0.3%, Nasdaq -0.6%.
    • European bourses trade broadly lower after S&P cut Russia’s credit rating to one notch above junk and tensions rise in Ukraine; Asian markets ended mixed.
    • The earnings tone has taken a more negative turn, as Amazon, Ford and Visa head lower after disappointing earnings and/or guidance; Microsoft is higher after its earnings fell less than expected.
    • Treasurys rose overnight but have retreated from their highs; the benchmark 10-year yield is lower by one basis point at 2.68%.
    • Still ahead: consumer sentiment.


  23. Ballard Power in strategic intellectual property deal with United Technologies

    09:11 AM ET · BLDP

    • Ballard Power (BLDP) +8.4% premarket after announcing the acquisition of the transportation- and stationary-related fuel cell intellectual property assets of United Technologies (UTX).
    • The assets consist of ~800 patents and patent applications, as well as patent licenses, invention disclosures and know-how primarily related to Proton Exchange Membrane fuel cell technology.
    • UTX receives 5.1M BLDP common shares, $2M cash, a grant-back license to use the patent portfolio in its existing businesses and a royalty on BLDP’s future IP licensing income generated from the combined IP portfolio.


  24. Pandora defended after soft guidance hits stock

    08:54 AM ET · P

    • Pandora (P) is now available in all 10 of the bestselling passenger vehicles, with 5M new activations in Q1, notes Needham’s Laura Martin, reiterating a Buy rating and $41 price target and sharing her key takeaways from the earnings call (transcript). “We estimate that P has a 5 year head start over other ad-driven streaming services.” Her team raises expected FY EPS to $0.17 from $0.15 an sets FY15 EPS at $0.48.
    • Mobile ad revenue of $103M increased 59% Y/Y, driven by rising audio ads, say Cowen’s John Blackledge, maintaining his Outperform and $41 price target. Mobile advertising RPM of $29.46, up 44% Y/Y was slightly ahead of his team’s forecast. “As in-car listening hours ramp, currently ~5% of total listening hours, P is likely to air more in-car audio ads than on other devices to offset the inability to offer video/display ads.”
    • Previous earnings coverage
    • Shares -5.9% premarket


  25. D.R. Horton upgraded at ISI after big March quarter results

    08:41 AM ET · DHI


  26. Brookfield Office Properties beats by $0.03, beats on revenue

    08:41 AM ET · BPO

    • Brookfield Office Properties (BPO): Q1 FFO of $0.27 beats by $0.03.
    • Revenue of $582M (-1.4% Y/Y) beats by $16M.
    • Press Release


  27. That head and shoulders SPY chart you just put up looks more like 4 burns to me.   :)


  28. AOL teams with Microsoft to offer premium video content

    08:27 AM ET · AOL

    • “Beginning this summer, content from AOL brands like HuffPost Live, TechCrunch and Moviefone, as well as partner sites including ESPN, TMZ, Rachel Ray and Martha Stewart will be available on MSN and Bing Apps for Windows and Windows Phone helping both companies provide consumers with the best possible experience.”
    • “The AOL video library will include content from all 15 AOL On channels and its 2014 slate of original series that will be unveiled next week at the Digital Content NewFronts.”
    • AOL Video President Ran Harnevo: “The sheer scale of Microsoft’s (MSFT) network will help us reach a massive new audience and continue our climb.”
    • AOL +1.8% premarket
    • Source: Press Release


  29. Blackstone reportedly high bidder for $2.5B of Irish loans

    08:21 AM ET · BX

    • The loans are linked to properties built by Irish developer Michael O’Flynn and his companies, reports Bloomberg. The discount rate to their face value is not known. The loans currently reside on the books of Ireland’s National Asset Management Agency (NAMA), which was set up in 2009 to take over €74B of troubled commercial loans held by the country’s banks and sell them over the next decade.
    • Sales have been slow, but are picking up as Europe shows slight signs of emerging from its slump. Blackstone (BX) last month said it raised $7B for Europe’s largest-ever real estate fund.


  30. Colgate-Palmolive profit slips, records charge related to Venezuela exchange rate

    08:19 AM ET · CL

    • Colgate-Palmolive (CL) -0.8% premarket after Q1 earnings met estimates but were hurt by a one-time $174M charge ($0.19/share) related to the fall in value of the Venezuelan bolivar.
    • All operating divisions contributed to a 6.5% organic sales growth in the quarter, led by an 11% increase for Latin America and 7.5% for Asia; but net sales in Latin America, which accounts for ~27% of company sales, fell 5%.
    • Gross margin widened slightly to 58.4% from 58.3%, as higher raw and packaging material costs offset higher pricing and cost savings.
    • CL says it expects another year of strong organic sales growth and gross margin expansion for 2014, with EPS to grow 4%-5% on a dollar basis and at a double-digit rate on a currency neutral basis.


  31. More on State Street results

    08:04 AM ET · STT

    • CEO Joseph Hooley: “We are responding to the challenges presented by low interest rates and conservative investor risk appetite by realigning our staffing to support our goal of positive operating leverage for the full year.”
    • About 6.1M shares repurchased during quarter for a total cost of $420M, completing $2.1B buyback plan begun in March 2013. $1.7B buyback approved for the year beginning April 1 (boost in the quarterly dividend to $0.30 per share is also expected).
    • Net income of $433M fell from $443M one year ago on revenue of $2.56B up from $2.47B. Net interest reveneu of $572M vs. $577M. Net interest margin of 1.24% is off 6 basis points from a year ago.
    • Expenses of $1.92B rose from $1.81B. Q1 results include $72M of severance costs related to staff reductions expected to save about $40M per year beginning in 2015.
    • Source: Press Release
    • Previously: State Street misses by $0.01, beats on revenue
    • STT no trades premarket


  32. KKR teaming with Nasdaq to offer trading in buyout funds

    07:56 AM ET · KKR

    • Private equity firms have been aiming to reach a new group of investors, and KKR is making it happen, teaming with Nasdaq OMX (NDAQ) to form an exchange in which investors can sell a portion of their stakes in KKR buyout funds. KKR is likely to file regulatory paperwork as soon as this month, reports the WSJ.
    • The institutions and wealthy individuals who invest in P-E buyout funds (with minimums of millions of dollars required) typically must agree to have their money tied up for a decade or more, but this deal will allow them to sell smaller investors slices for as little as tens of thousands of dollars – the investors can cash out earlier than usual and the P-E firms get a far broader range of investors.
    • The already-public listings of P-E firms on major exchanges – with BX, CG, APO, FIG for instance, joining KKR – offer mom and pop investors shares in the parent companies rather than the individual buyout funds.
    • ETFs: PSP, PEX


  33. BofA slips amid leak of massive global mortgage settlement

    07:41 AM ET · BAC

    • Bank of America (BAC) is 1.1% lower in premarket action after last night’s leak of the DOJ seeking more than another $13B out of the hide of shareholders over legacy mortgage issues, according to Bloomberg. The settlement would come on top of the $9.5B agreed to by the bank to resolve FHFA claims, and a deal could come within the next two months, according to sources.
    • Most of the loans in question became BofA’s problem after it purchased Countrywide and Merrill Lynch – one made the punk loans and the other packaged them into MBS.
    • This deal – which would also resolve state AG charges – would tower over JPMorgan’s eye-popper of a $13B settlement from last year, which included $4B for the FHFA.
    • They’re coming for your banks next: There are another eight lenders under investigation by the DOJ and state attorneys general over similar charges.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, PFI, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS, AIRR


  34. Burger King Worldwide beats by $0.01, misses on revenue

    07:30 AM ET · BKW

    • Burger King Worldwide (BKW): Q1 EPS of $0.20 beats by $0.01.
    • Revenue of $240.9M (-26.5% Y/Y) misses by $1.1M.
    • Press Release


  35. Amazon turns lower post-earnings

    07:29 AM ET · AMZN

    • Up for most of the after hours session following earnings last night, Amazon (AMZN) has turned lower by 2.1% in premarket action amid a couple of price target trimmings by the sell side.
    • Wells Fargo cuts its PT range on the Outperform rated stock to $357-$381 from $417-$440, citing lower-than-hoped operating income guidance and higher spending.
    • Calling the quarter mixed, RBC’s Mark Mahaney lowers his PT to $400 from $425. He too has an Outperform rating on the stock.
    • Deutsche has reportedly cuts its PT to $400 from $425.
    • Ratings and PTs are retierated at Evercore and Credit Suisse.
    • Previous earnings coverage


  36. More on Ford Q1: EPS misses, net profit drops 39%, shares sink 2%

    07:22 AM ET · F

    • Ford’s (F) EPS of $0.25 missed consensus of $0.31.
    • Net profit slumped 39% to $989M, hurt by Ford adding $400M in warranty reserves for older vehicles in North America. The company also booked $100M for higher freight and other items due to the severe winter weather, and previously disclosed expenses of $400M that are mainly due to Venezuela’s currency devaluation.
    • Wholesale volume and revenue increased, with continued market share gains in Asia Pacific, driven by record market share in China
    • Shares are -2% premarket. (PR)
    • Previous


  37. Phil – Thanks for the information on TZA / TNA  and DXD!  


  38. France looking to keep Alstom in French hands

    07:06 AM ET · ALSMY

    • French Economy Minister Arnaud Montebourg is working on an alternative to a possible sale of all of Alstom (ALSMY, AOMFF) or just its energy assets to GE (GE).
    • Montebourg, who wants to keep Alstom under French ownership, plans to meet GE’s management following reports of the U.S. conglomerate’s interest in Alstom, having met the latter’s CEO yesterday.
    • The WSJ has reported that GE wants to acquire Alstom’s energy business, while Bloomberg wrote that GE is interested in the whole company; it could then spin off the transport unit into a new listed entity.
    • Previous


  39. Google faces sizable French tax bill

    05:08 AM ET · GOOG

    • Google (GOOG) has received a demand from France that could force the search giant to pay hundreds of millions of euros in tax.
    • Like many other countries, France is unhappy with Google’s corporate structure, which enables it to recognize revenue through a subsidiary in Ireland, where the tax rate is very low.
    • In February, it was reported that the French government could demand that Google pay €500-1B. (10-Q filing)


  40. Reuters: Tech giants pay $324M to settle no-hire lawsuit

    04:54 AM ET · AAPL

    • Apple (AAPL), Google (GOOG), Intel (INTC) and Adobe (ADBE) agreed to pay $324M to settle an antitrust class-action suit accusing them of creating illegal no-hire agreements in Silicon Valley to keep wages down, Reuters reports.
    • The amount is far less than the $3.4B in damages that 64,000 employees were collectively seeking. That figure could have tripled had the case gone to trial and the workers won.
    • The deal was disclosed yesterday, although financial terms weren’t provided.


  41. Mortgage demand plummets to 14-year low

    04:43 AM ET · DHI

    • The amount that lenders originated in mortgage loans plunged 58% on year Q1 to a 14-year low of $235B, almost entirely due to drop in refinancing. The figures are from industry newsletter Inside Mortgage Finance.
    • Loans for acquisitions were flat on year and lower than in Q4.
    • The trend is the latest indication that increasing interest rates are hampering the housing recovery. The average 30-year fixed-rate mortgage was 4.5% last week, up from 3.6% in May last year, when rates spiked after the Fed indicated it would scale back its QE program.
    • Tickers: DHI, PHM, RYL, MHO, NVR, LEN, SPF, MDC, HOV, TOL ORI, NLY, AGNC, MTGE, ARR, TWO, IVR, CMO, MFA, WMC, FMCC, FNMA, RDN, NMIH, ESNT, GNW
    • ETFs/ETNs: ITB, XHB, MORT, MORL, REM, MORT, MORT


  42. Honda’s net profit more than doubles

    03:56 AM ET · HMC

    • Honda’s (HMC) FQ4 net profit surged to ¥170.5B ($1.67B) from ¥75.7B a year earlier as sales climbed 13% to ¥3.1T ($30B), boosted by the weak yen and a rush by Japanese consumers to purchase cars ahead of a rise in sales tax at the start of this month.
    • Honda sold almost 1.2M vehicles worldwide, with sales in Japan jumping 41%.
    • The company forecast a 3.6% increase in FY 2015 profit to ¥595B ($5.8B) and 7.7% growth in revenue to ¥12.75T, as well as global vehicle sales of 4.83M. (PR)


  43. WSJ: Alibaba mulls world record IPO

    03:35 AM ET · ABABA

    • Alibaba (ABABA) is considering expanding its IPO to over $20B, which would make it the largest listing in U.S. history, the WSJ reports.
    • The offering would be above the $19.7B that Visa raised in 2010 and could even top the world record $22.1B that Agricultural Bank of China attracted in Shanghai and Hong Kong in 2010. Until now, figures of $15-16B have been bandied about for Alibaba’s IPO.
    • Under the plan being discussed, Alibaba would sell shares in addition to its investors, which include Yahoo (YHOO). Another major shareholder, Softbank (SFTBF), is not planning to sell shares in the deal.
    • “Alibaba is at the point where, after the extreme growth they’ve had, they’re going to need capital to make another huge push forward,” says investment adviser Paul Boyd.


  44. good morning Phil, I was having a look at that TXN butterfly, might want to take a stab at it.  Where do you like the strikes for a new entry?

    Thanks


  45. Japanese core inflation unchanged in March; Tokyo CPI jumps in April

    02:25 AM ET · DXJ

    • Japanese core inflation, which excludes fresh food prices, held steady at 1.3% on year in March but came in below consensus of 1.4%.
    • Core core CPI, which excludes fresh food and energy, slipped to +0.7% from +0.8% in February.
    • Overall inflation increased to 1.6% from 1.5%.
    • Tokyo CPI surged to +2.9% in April from +1.3% in March and core inflation to 2.7% from 1% for the biggest rise since 1992, boosted by the hike in sales tax at the start of the month. Excluding that increase, prices rose just 1%, as in March.
    • The question is whether the Bank of Japan’s attempt to push inflation to 2% by 2015 has stalled despite the BOJ’s massive bond-buying. If so, the bank might feel the need to increase its asset purchases. (PR)
    • BOJ officials are increasingly concerned that the domestic bond market isn’t reflecting how inflation has risen over the past year or so, Bloomberg reports. That raises the risk that yields could suddenly surge. The problem for the BOJ is that yields have stayed low because of its QE program.
    • Meanwhile, President Barack Obama has ended a three-day trip to Japan without sealing a trade deal that’s seen as key to the wider 12-nation Trans-Pacific Partnership. While the U.S. and Japan have made a breakthrough on market access, gaps remain.
    • The Nikkei is +0.2% and the USD-JPY is flat at ¥102.33.
    • ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, NKY, JYN, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, JSC, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP


  46. Amazon’s unit growth slips again; delivery network in test mode

    Yesterday, 10:40 PM ET · AMZN

    • After initially trading higher following its Q1 revenue beat, Amazon (AMZN) finished AH trading up just 0.3%. A possible factor: CFO Tom Szuktak shared on the CC Amazon’s Y/Y paid unit growth fell to 23% in Q1 from 25% in Q4 and 29% in Q3. Slowing unit growth “remains a yellow flag since [the metric] is a better proxy than revenues for the overall velocity of the business,” says Baird’s Colin Sebastian.
    • While paid unit growth slowed, “Other” North American revenue, a segment dominated by Amazon Web Services, saw revenue growth accelerate to 60% from 52% in Q4. For now, the segment only accounts for 6% of revenue.
    • Thanks to AWS and 28% EGM growth, North American sales growth (+26%) was roughly even with Q4. International sales growth picked up to 18% from 13%, with 27% EGM growth offsetting 4% media growth.
    • AWS and 3rd-party fulfillment growth helped gross margin rise 230 bps Y/Y to 28.8%. But fulfillment spend rose to 11.7% of revenue from 11.1% a year ago, tech/content spend (boosted by video licensing and AWS capex) to 10% from 8.6%, and marketing to 4.4% from 3.9%.
    • Meanwhile, the WSJ reports Amazon is quietly testing its own delivery network (trucks and all) in San Francisco, L.A., and NYC. It’s probably not a coincidence all three markets are ones in which the AmazonFresh same-delivery has launched, or is expected to.
    • Q1 results, guidance/details, PR


  47. Plug Power sells more shares than planned in its biggest-ever stock sale

    Yesterday, 07:23 PM ET · PLUG

    • Plug Power (PLUG) sold 22.6M shares – far more than the 15M it had filed to sell – at $5.50 each, in its biggest stock sale ever today, showing continuing investor demand for some smaller tech companies despite the fuel cell company’s turbulent trading history.
    • The offering raised $124.3M before the potential sale of additional shares to underwriters; PLUG has conducted five stock offerings since the start of last year, each raising $30M at most.
    • PLUG brought in Morgan Stanley to lead the offering with Barclays while demoting Cowen & Co., the banker on its last three equity sales, to a passive role in favor of underwriters that rank among the top 10 by market share in arranging U.S. stock sales.


  48. Freescale names new CFO, provides strong Q2 outlook

    Yesterday, 07:04 PM ET · FSL

    • Freescale (FSL) has hired Dan Durn, formerly the CFO of #2 chip foundry Globalfoundries, to be its new CFO, starting in June. Durn will replace Alan Campbell, who announced plans to retire in January.
    • The chipmaker has guided in its Q1 report for Q2 revenue of $1.14B-$1.2B, above a $1.13B consensus. Gross margin is expected to rise 50-75 bps from a Q1 level of 44.8%.
    • FSL -1.7% AH in spite of the guidance and a Q1 beat. Shares went into earnings trading within a hair’s breadth of their 52-week high of $26.
    • Q1 results, PR


  49. South African platinum producers to offer wage deal directly to strikers

    Yesterday, 06:44 PM ET · AGPPY

    • The world’s top three platinum producers – Amplats (AGPPY, AGPPF), Impala Platinum (IMPUY, IMPUF) and Lonmin (LNMIF, LNMIY) – say they will bypass the union representing tens of thousands of South African miners and offer a new wage deal directly to their employees, after talks aimed at ending three months of strikes hit an impasse.
    • Although the move doesn’t bring an end to negotiations with the AMCA union, it could further damage already strained relations between management and strike leaders.


  50. S&P 500 adds Under Armour, Navient

    Yesterday, 06:25 PM ET · UA

    • Under Armour (UA) and Navient (NAVIV) are added to the S&P 500 index, effective April 30.
    • Out of the index are SLM Corp. (SLM), which is splitting into two companies – Navient, and a consumer banking operation that will continue under the Sallie Mae brand – and Beam (BEAM), which was acquired by Suntory Holdings.
    • SLM moves for now to the S&P MidCap 400, ousting Alpha Natural Resources (ANR).


  51. Microsoft guides conservatively again

    Yesterday, 06:09 PM ET · MSFT

    • Microsoft (MSFT) guides on its CC for FQ4 revenue of $20.4B-$21B, slightly below a $21.04B consensus. The company’s FQ3 guidance proved conservative, and investors are assuming as much for its FQ4 outlook.
    • The revenue outlook for individual reporting groups: devices & consumer licensing $4.1B-$4.3B, D&C hardware $1.3B-$1.5B, D&C other $1.9B, commercial licensing $11B-$11.2B, commercial other $2.1B.
    • Xbox channel inventory drawdown is expected to impact D&C hardware, and a lower impact from Win. 7 upgrades caused by the end of XP support will affect D&C licensing. Commercial other is expected to see ~10% Q/Q growth on the back of cloud services (Office 365, Azure) demand.
    • Opex is expected to grow 4% Y/Y to $8.4B-$8.6B after adjusting for an EU fine. Capex is expected to total $1.5B (cloud investments), and unearned revenue to grow in line with seasonality. A tax rate of 18%-20% is forecast.
    • Microsoft’s unearned revenue balance rose 14% Y/Y in FQ3 to $19.5B, topping guidance and exceeding FQ2′s 12% clip. Bookings rose 6%, down from FQ2′s 12%. The company’s contracted but not billed balance closed above $22B (up over $1B Y/Y).
    • MSFT +2.7% AH. FQ3 results, details, earnings slides (.ppt), guidance (.ppt), prepared remarks (.doc)


  52. Phil – Misse AAPL the first time around but joined the club with your 500/600 BCS posted yesterday. Let this be my stock of the year also!


  53. Scottmi: "and down goes the sky"… thanks for posting, great music


  54. yeah that au4 was good stuff


  55. FAS/Lunar – Usually, I put up the portfolios on Fridays.  That FAS was adding 5 more covers to our existing spread (now fully covered).  

    Burns/Louis – No because consider where a dip buyer comes in.  At 176 in Dec, they made money.  Then a dip to 180 in Jan and they lost but then, at 174, they win.  Small dips in March to 184 both rewarded, big dip to 182 rewarded again.  We're not taking about long-term traders here, we're talking about the people who rush in and "buy on weakness" – generally they are thrilled to make 5-10% and get back out.  

    Gasoline flew up over $3.08 so that's the stop now (0.005 trail) 

    You're welcome Louis. 

    TXN/Pwright – See morning note to Akad.  

    AAPL/Pheh – Don't forget, the plan is to roll the $500 calls lower (-$50 for $25 or less) and sell short puts ($450s for $40+) to pay for it if AAPL drops 10%.


  56. Indexes weak bouncing – not looking good. 


  57. Phil/IRBT- This is the first time I have sold a put that has moved below the strike and I am wondering about the mechanics. Will ToS automatically assign the shares or do they wait for a period of time to see if the price holds?  


  58. RIG is sooo strong despite the falling market. Money is rotating to Energy and Oil & Gas service sectors.


  59. Craigs / Puts …. short puts rarely get assigned before expiration date unless there is a huge % move underneath the strike price you sold.


  60. happy friday phil – i know you like toyota if it dips a little lower — do you have any thoughts on honda? 

    they just reported what looked like strong earnings and they are trading below the 200dma.. strong support appears a few bucks off yet in the 29/30ish area


  61. Phil / Pwright / TXN – Phil, as you said in the morning… “we have a lot of time to make adjustments”. I was considering the changes you suggested, but this dip is helping me rebuild the original butterfly. The $50 calls just filled at the $3.10 target. So now I am only waiting for the $44 puts to sell at $0.65 (currently at $0.58). If the trend reverses I will sell them at whatever I can get since I am up on the long $40 puts ($3.10 instead of $3.25) and the short $48 calls ($1.01 instead of $0.75). As you say, patience is key!


  62. Akad and Phil - I got the 40 puts for $3.25, 50 calls for $3.04, then sold Jun 45 puts for $.90 and 48 calls for $.63.  I think your entries are a bit better than mine, but here we go anyway :)   Phil, when rolling the Junes, are you going to be looking to roll monthly, quarterly?  I'll probably need to bug you guys about how to adjust these, until I start figuring it out..

    Thanks


  63. AAPL approaching the 570 PT on a down day! Keeping the market from falling of the cliff?


  64. IRBT/Craigs – If the put CLOSES below the strike on expiration day, it will be assigned to you at the strike price.  If that happens, the $$$ of the strike will be taken from your account and you will have X amount of shares of IRBT placed in your account – it's not a big deal at all.  At any point in between, the person you sold the puts to can assign the stock to you by putting the stock in your account and taking your money but that would void his contract so it's very unlikely they would do that when there is still premium left on it.  Just pick stocks you REALLY want to own at the net strike and leave them alone.  Chances are, you will never get assigned but, one day, you will get an assignment and then you will learn it's not a big deal at all and you will never worry about it again.  Unfortunately, it may take years as it's pretty rare – so most people worry for nothing for a very long time.  

    RIG/Invest – That sector has had solid earnings and growth (record exports).

    TM/Toe – Yes I like TM, especially around $100.  $85 was our last entry but we took 50% profits and ran at $130+.  Finally a chance to get back in!  Remind me to look next week – they should be good for the Income Portfolio.  

    TXN/Akad – That's why we don't worry about a move in either direction, we just sell as much premium as we can and wait for it to expire and then, we sell some more.  Wash, rinse and repeat.  If you catch a channel and optimize your entries – so much the better but generally, with our Butterflies, we don't stress out over it.  

    TXN/Pwright – Same thing, no big deal.  You sold $1.53 worth of 56-day premium against a $6.29 long position that's good for 629 days.  If, conservatively, you make 10 sales like that, you will collect $15.30 over the life of the trade and, even if your longs expire worthless, you will be up as much as $9, which is 150% of what you laid out.  That leaves considerable room for error on any single month's adjustment, doesn't it?  

    AAPL/Jasu – If it were contributing to the drop, this would be VERY ugly.  Of course, this is right in line with my theory that they use AAPL to prop up the markets and mask a broader exit.  Notice yesterday, decliners were outpacing advancers by about 20% on the Nas – albeit on very low volumes:

    4-24-2014 5-32-47 PM Diary


  65. Phil – I did a long term covered call with a put leg on T but was exercised just before the recent dividend. With the drop after earnings would you look to re enter the covered call side or just ride the short puts? Thanks


  66. Phil,

    Would like to leg into IRBT with an initial sale of Dec 2014 $30 P for about $3.30 say 5 contracts…..your thoughts please…Thankyou  


  67. DXD-FCX/Phil – does not look like a good pairing to me with comparison charts. FCX falls along with $DJI plunges. I've been burned on the premise that people 'run to gold' in a market drop before. Or am I not interpreting your pairing right? 


  68. Au4 – hey you guys, you are welcome. whole album free from artist at

    http://au4.ca/


  69. things look pretty ripe. Can we short TSLA yet?


  70. DM/Phil- Thanks for the answers on IRBT. I am very comfortable with this trade (after all it Phils pick of the decade or century, can't remember which), and I just wanted to know what to expect, which as you have said is most likely nothing! 


  71. my mining rig is pumping out 6 solarcoins an hour! So cool!!


  72. nflx pcln…even tsla..????


  73. bcd / TSLA
    I'm out of everything but Jan15 420/320 BRCS, still grab some good premium.

    Phil / DIS
    Looking back at the rolls – are we holding May 80 calls short ? I thought we were bullish into earnings.
    Yes, I also have the 77.5 short puts


  74. Phil / CMG – Should we be adjusting out Jun 515 calls now that CMG is touching 500?


  75. T/Willsons – If you got called away, you should have had cash placed in your account and had a short position on T, right?  If you closed that by buying back the stock, that means you ONLY have the short puts.  I'd certainly wait until after the Fed next week to see how things go but we're right back in the normal range, so no reason you can't go back to the well.  

    IRBT/Jasu -After the Fed next week, I will be excited about that play. 

    FCX/Scott – Gold is low, copper is low, FCX is 50% copper, 40% oil and gas and 10% gold so, essentially, it's a long-term commodity play that should RISE with the market and, since DXD is a bet the market will FALL, the idea is that our short FCX puts that expire worthless in a bull market pay for our wrong-way bet on DXD.  The BONUS premise is that, if the market plunges and people panic into gold, that FCX won't fall as much as the Dow and then we can win on both ends.  The idea is to have an OFFSET for the bearish position, not to match it – or we'd just sell DXD puts.  

    TSLA/BDC – Where were you at $260?  

    IRBT/Craigs – Century, TASR is the decade.  I did the math a while ago but short story is IRBT currently sells $500M worth of crap and makes $25M for a p/e of 20.  By next year, they should be up around $650M (+30%), with $35M in profits and a p/e of 18.5.  The military spends $700Bn a year on stuff, like $20Bn on F-35s that don't actually work.  A trained soldier in the field is a $2M/yr expense for the army and, at some point, some of those soldiers will be replaced by $500,000 robots. Not one, not two but thousands of them for Billions of Dollars.  IRBT has the inside track for those programs and already they are testing special-purpose robots like bomb-checkers and scouts – much cheaper to send a $50,000 camera-fitted robot to check out a building than a $2M soldier…  How many squads are there who will get a robot squad-mate in the future?  

    That's why I think IRBT is a very likely 10-bagger over the next decade or two.  They are profitable now, a single, Billion-Dollar annual contract from the military (and we aren't the only military) would probably drop 20% to the bottom line or $200M – up from $25M now.  They just have to hit the right mix.

    Also, this:

    Scott Hartley, one of the founders of 5D Robotics, recently had this to say at an Army demonstration at Fort Benning in Georgia: …”ten years from now, there will probably be one soldier for every 10 robots. Each soldier could have one or five robots flanking him, looking for enemies, scanning for land mines.”

    US Army robots will outnumber human soldiers 10 to 1 by 2023

    And destroying all humans!  cheeky

    Solar coins/BDC – I'm saving mine for when they are worth $1,000 each.  

    DIS/Wombat – I assume you mean in the Butterfly Portfolio?  It's a butterfly, we don't really mess around with them.  DIS is at $78.50, $80 is 2% higher and the market is weak.  I haven't changed my mind.  

    CMG/Pfehlm – Nope, we thought it could hit $480 so we'll see what happens.  Barely been down in a bad market since it crashed and June is still 56 days away.  If CMG can move $5 in one day (1% – and it often does) then it can go up or down $280 in 56 days.  At the moment, it's $15 from our strike – do you think we need to move it already?


  76. FCX/  which one of you guys sold 4000 January 33 puts for $2.78?


  77. Phil- I am holding 5 AAPL Oct $565 calls that are up almost 100% (thanks to Wed. night's report) that I bought before I began following you here at PSW. From what I have learned here, I am pretty confident that you would be telling me to close these, take profit and….? What would you advise me to do next? I still love AAPL, but I don't want to get burned by a short term move down that would eat up this hard won profit. Should I sell and wait a bit to see what happens? WWPD?


  78. UNP/pwright – not adding any more longs on this weakness. when broke 189 I rolled the may2 192.5 cover down to may2 190, converting the diagonal to a calendar.


  79. craigsa620 / AAPL – How about selling the Oct $600 calls for $18.65 and make it a vertical? You protect some of your gains if it goes lower and you still participate in possible gains up to $600.


  80. Along the same IRBT theme, as well as SWIR, I'd suggest a look at FLIR.

    I work with both SWIR and FLIR products.  FLIR has some damn cool products that the military loves.


  81. Phil- On a macro level, how do you see market heading into FOMC and NFP week? Stay short RUT index in particular over weekend? Thanks


  82. FCX/Stock – Hey, what's an extra $1.112M between friends?  wink

    AAPL/Craigs – Well, they are $32.50 so $16,250 and you can close those and buy 2016 5 $550/650 bull call spreads for $35 for $17,500 and those have $32,500 of additional upside at $650 and you can put a stop on those at $12,500 and lock in a 50% gain on your original $8,000 while keeping 400% more upside potential.  Since the spread has a net delta of 0.32, AAPL would have to fall $30 (6%) before you stop out.  That has no margin.  If AAPL does fall, you can either stop out OR you can THEN sell puts and use that money to roll your calls down to a wider spread.  

    FLIR/JPH – I like them too but they are already bigger (5x IRBT) so they wouldn't get the same pop from the same contract.  SWIR I don't follow, but they seem nice.  

    Macros/Ps – I think we flatline into the Fed, probably with a drift a bit higher on rumors of more easing that won't pan out.  Certainly I want to stay short over the weekend but we already got a great move down today, with the RUT (/TF) now at 1,120, for a $2,000 per contract gain from our morning entry.  Dow Futures (/YM) at 16,296 for a nice $500 per contract gain as well.  


  83.  i think we should start an etf ourselves…called 3x Ultra Bear Hedgie Herd

     its really uncanny…i think its a function of too many short-term traders because everyone waiting for music to stop and huge amount of subpar talent from mutual fund industry migrating and masquerading as hedge fundsif you can figure out how hedgie herd is positioned….you can make money most of the time doing the opposite


  84. Phil – with 98B outstanding units, solarcoin will never even be worth $1. I doubt it would ever crack 10 cents …


  85. Too many rules in an ETF!  Essentially they are just a scam to scrap fees from investors.  Of course, they are well-paying scams so make sure I get my cut…

    crying, BDC….


  86. // DIS
    no, I didn't think you changed your mind. I didn't have the fly just the short puts and calls ( which I assumed were long b/c we're bull ) but re-reading your post, I caught that they weren't.

    DIS // The Apr short $77.50 calls ($1.30) can be rolled to the May $80 calls ($1.60) for .30 (+300 in our pocket) as we're bullish on DIS into earnings.  The short April $80 puts ($1.55) can be rolled to the May $77.50 puts ($1.70) – just in case we're wrong and, anyway, we still get another $150 for our trouble on that one.  

    Phil // CZR
    Related – can you look at the CZR fly – we were going to use this as a teaching tool.
    I'm looking at the two May legs

    The short $20 calls are up +73%

    The short $20 puts however are assignable

    ( which leads me to an obvious question for you, when you're doing the math in your head on short puts are you using the mark or your trade price ? Meaning, if were assigned I would take a small loss selling them back. But no one knows what I got paid for them, so they're looking at the market price, which would seem like it has premium left – does that make sense ? )


  87. EZCH/albo – any news on your sleeper? double down time or..


  88. scottmi // get outta my head


  89. scottmi re: UNP, noted, I followed your lead, got $.75 to roll to the May2 190s.  So now I guess I've collected about $2.20 against my initial outlay of about $4.57 for the long June 190s; I guess the strategy is the same, keep rolling the weeklies at same strike if able, or lower if must, are you still stopping the whole trade at around $180?

    thanks


  90. Pharm / CYTK – Your expertise please…. 60% down! Do they have anything else besides the failed ALS drug? I have a small long position and some May $7.5 and $10 puts… DD, roll, close or wait for assignment? Just closed my May and June calls for a nice profit. All in all I am still up.


  91. UNP/pwright – yes, a close below 181 will have me all out. with these you CAN roll down to make it a credit spread (mostly can only recover some loss, not go positive) but my PREMISE for the trade was long and I will take the 181 stop as object proof I was wrong with more down likely. I'm not so much a player to try swinging it short at that point however. I have tried that game before and rarely works for me. End up just getting washed about.  I will consider adding another long diagonal if it does find support down near my stop and turn up again—but the stop will remain 181 until I get a new/higher swing low point.


  92. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1fzIMPJ

    Bob Shanks Defends Ford’s ‘Kitchen Sink’ Quarter
    April 25 (Bloomberg) — Robert Shanks, chief financial officer of Ford Motor Co., talks about the automaker’s first-quarter profit reported today, business strategy and outlook.
    Shanks speaks with Matt Miller and Stephanie Ruhle on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

    Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  93. From Bloomberg, Apr 25, 2014, 12:57:14 PM


    Potential home buyers view a model home at the Shapell Industries Inc. Gale Ranch community in San Ramon, California, U.S., on Friday, Jan. 24, 2014. Photographer: David Paul Morris/Bloomberg

    After a roller-coaster decade of boom-bust-boom, the U.S. housing market is going downhill just when many economists thought annual sales would be heading up.

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


  94. From Bloomberg, Apr 25, 2014, 10:32:41 AM

    Janet Yellen, chair of the U.S. Federal Reserve, listens during an open meeting of the Board of Governors of the Federal Reserve in Washington. Photographer: Andrew Harrer/Bloomberg

    Federal Reserve Chair Janet Yellen is concerned that the standard models central banks use to forecast inflation may be broken.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-25/yellen-concerned-fed-model-fails-to-predict-price-moves.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  95. From Bloomberg, Apr 25, 2014, 2:08:01 PM

    German Chancellor Angela Merkel delivers a press statement prior to a meeting with Polish Prime Minister at the Chancellery in Berlin on April 25, 2014. Photographer: Odd Andersen/AFP via Getty Images

    The Group of Seven nations are preparing new measures against Russia, European officials said, as Ukraine’s government said separatists had seized international monitors as hostages in eastern Ukraine.

    To read the entire article, go to http://bloom.bg/1rtcD3t
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  96. From Bloomberg, Apr 25, 2014, 12:01:00 AM

    A man uses his phone as he walks past an Apple store in Hong Kong. Photographer: Anthony Wallace/AFP via Getty Images

    Corporate America is putting its record $2 trillion cash pile to work.

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


  97. DIS/Wombat – Those were adjustments to our original spread, not a new spread.  Surely you've been playing CZR long enough to know that it can easily move $2 in two weeks.  We sold $3.20 worth of premium and now the premium is $3.10.  The only math I'm doing is we sold a $20 put and call and CZR is $18 so 33% of the premium is out of the money so, if I do nothing, I make $1.  Since my longs are $8.40 making $1 in the next 21 days is 12% or 208% annualized by NOT messing around with the trade.  What exactly is it, that you think we should do to our perfectly fine 208% money maker – that is such an emergency?  What has changed that we should change our target?  What new information do you have?  If you want a play that is adjusted constantly, try the STP, not the Butterfly Portfolio – but don't try to turn one strategy into another.   

    Also, the AMay $20 puts are $2.50 with the stock at $17.75, who is going to burn .25 just to assign you the stock?  You are right, they don't care what you paid, they care what they paid and they paid a .25 premium so they lose 10% of the contract price, plus pay assignment fees in order to make you buy CZR for $2.25 over the current price – it's not worth it.  

    Oil $100.50! 


  98. Nice, LTP holding 10% (+$50,000) and now STP only down 4% (-$4,000).  That's vs cashing in the Income Portfolio, which is up 7.4% ($40,000).  $25KP up 15.9% ($3,900) and Butterflies up 16.2% ($16,000).  Not bad for a choppy market.  

    I'm going to try Emailing the Portfolio to chat – if it's messed up, I'll erase it and reload…


  99. Nope, no luck, format must be too strange.  Let's try this:

    Butterfly Catching

    Security

    Quant.

    Cost
    Basis

    Cost/
    Share

    Curr.
    Price

    Change

    Market
    Value

    Trans.
    Date

    Age

    Description

    Custom Spreads

    DIS 2016 JAN 55.00 CALL

    10

    $ 23,320

    $ 23.32

    $ 25.55

    $ 2.23

    $ 25,550

    02/06/2014

    (631)

    JAN 55.0 CALL [DIS @ 79.59]

    DIS 2016 JAN 95.00 PUT

    10

    $ 23,590

    $ 23.59

    $ 20.20

    $ -3.39

    $ 20,200

    02/06/2014

    (631)

    JAN 95.0 PUT [DIS @ 79.59]

    DIS 2014 MAY 80.00 CALL

    -10

    $ -2,150

    $ 2.15

    $ 1.69

    $ -0.46

    $ -1,690

    04/17/2014

    (23)

    MAY 80.0 CALL [DIS @ 79.59]

    DIS 2014 MAY 77.50 PUT

    -10

    $ -1,000

    $ 1.00

    $ 1.06

    $ 0.06

    $ -1,060

    04/17/2014

    (23)

    MAY 77.5 PUT [DIS @ 79.59]

    BTU 2016 JAN 20.00 CALL

    10

    $ 2,000

    $ 2.00

    $ 2.49

    $ 0.49

    $ 2,490

    03/25/2014

    (631)

    JAN 20.0 CALL [BTU @ 17.84]

    BTU 2016 JAN 13.00 PUT

    10

    $ 2,000

    $ 2.00

    $ 1.31

    $ -0.69

    $ 1,310

    03/25/2014

    (631)

    JAN 13.0 PUT [BTU @ 17.84]

    BTU 2015 JAN 18.00 PUT

    -10

    $ -3,400

    $ 3.40

    $ 2.29

    $ -1.11

    $ -2,290

    03/25/2014

    (268)

    JAN 18.0 PUT [BTU @ 17.84]

    BTU 2014 MAY 16.00 CALL

    -10

    $ -1,250

    $ 1.25

    $ 1.93

    $ 0.68

    $ -1,930

    04/17/2014

    (23)

    MAY 16.0 CALL [BTU @ 17.84]

    CZR 2016 JAN 22.50 CALL

    10

    $ 4,700

    $ 4.70

    $ 3.70

    $ -1.00

    $ 3,700

    03/31/2014

    (631)

    JAN 22.5 CALL [CZR @ 18.47]

    CZR 2016 JAN 15.00 PUT

    10

    $ 3,700

    $ 3.70

    $ 3.70

    $ 0.00

    $ 3,700

    03/31/2014

    (631)

    JAN 15.0 PUT [CZR @ 18.47]

    CZR 2014 MAY 20.00 CALL

    -10

    $ -1,300

    $ 1.30

    $ 0.60

    $ -0.70

    $ -600

    03/31/2014

    (23)

    MAY 20.0 CALL [CZR @ 18.47]

    CZR 2014 MAY 20.00 PUT

    -10

    $ -1,900

    $ 1.90

    $ 2.25

    $ 0.35

    $ -2,250

    03/31/2014

    (23)

    MAY 20.0 PUT [CZR @ 18.47]

    TXN 2016 JAN 50.00 CALL

    10

    $ 3,100

    $ 3.10

    $ 3.80

    $ 0.70

    $ 3,800

    04/23/2014

    (631)

    JAN 50.0 CALL [TXN @ 48.47]

    TXN 2016 JAN 40.00 PUT

    10

    $ 3,250

    $ 3.25

    $ 2.70

    $ -0.55

    $ 2,700

    04/23/2014

    (631)

    JAN 40.0 PUT [TXN @ 48.47]

    TXN 2014 JUN 44.00 PUT

    -10

    $ -650

    $ 0.65

    $ 0.29

    $ -0.36

    $ -290

    04/23/2014

    (58)

    JUN 44.0 PUT [TXN @ 48.47]

    TXN 2014 JUN 48.00 CALL

    -10

    $ -750

    $ 0.75

    $ 1.48

    $ 0.73

    $ -1,480

    04/23/2014

    (58)

    JUN 48.0 CALL [TXN @ 48.47]

    Portfolio Totals

    Total Cost

    $ 53,260

    Total Market Value

    $ 51,860

    Starting Basis

    $ 100,000

    Cash

    $ 64,695

    Return On Account

    16.6 %

    Total Portfolio Value

    $ 116,555

     

     

  100. That's not so bad – these are as of last night.  Still, the pictures are better – just a real pain in the ass to capture and transfer….

    $25KP:  

    Income Portfolio:  


  101. gold up to 1300 and my miners are net neutral on the day (day p/l down $12.84). bah humbug!


  102. scottmi re: UNP, I know what you mean, I would rather just stop out than try to make a silk purse so to speak, but there's a lot to like about this trading style.  Limited initial outlay, no fluctuating margin, flexible, and a chance to sell premium on a weekly basis.  I do think I'll want to try to use more of these, as I get a better hang of it.  Thanks for putting me on to em :)


  103. Short-Term Portfolio (STP):

    Long-Term Portfolio (LTP):  

    On the 17th, the LTP was up 3.9% and we made 3 changes.  The STP was down 1.4% and we made 4 changes.  A week later, they are up another $25,000 between them.  It's not that the market changed much, more that our positions are getting more solid and generating better returns – the trees we planted are starting to take root!  

    Also, like a surfer catching a wave, we're getting a better feel for the market and getting better at balancing our positions to take advantage of each good wave when it comes.  It doesn't mean we'll never get wet, but it does mean we're in position to catch a really good one if things go our way.  


  104. pwright – one trick is to keep your eye on the underlying long.. always better to have it father out (4-6 months even). if it erodes too much, you may have to kill play too as they rarely come back enough (even if stock does) to make a gain. Primary though of the setup is to -reduce- your loss when a play goes against you as opposed to -eliminating- a loss.


  105. Also, stjean and pharmboy are experienced hands at the calendars.. i'm just a humble grasshopper.


  106. Added to my ANAD position.  Am underwater in this one, but still like it as a spec.  Earnings are next Wed.


  107. TSLA – ah… always a warm and satisfying feeling to see it under 200.. !


  108. scottmi, I set my stop at around $180 also, but who knows, maybe Cramer'll be in a suit on Monday, as Phil likes to say, we can get back up over :)


  109. Phil// Have you reached a conclusion re holding SCO? I'm standing in front of the microwave and can't make myself open the door :)


  110. Phil, still bearish on NFLX?  If so, has there been a bear play suggestion?


  111. FYI – read a great book a couple weeks ago that I meant to mention, so here goes: 
    "The Smart Money" by Michael Konik.  Wild time!

    http://www.amazon.com/The-Smart-Money-Bettors-Millions/dp/0743277147/


  112. a grand week, well shepherded, Phil… Thanks!


  113. Here's a pitch from Influence Mobile, who we were looking at as a potential target for PSW Investments.  We're not going to make the window on this one (and, don't forget, we're closing round one next week) but, if anyone likes the sound of this deal and wants to talk to them, let me know:

    The Influence Mobile Team – "Influence Mobile's marketing technology enables organizations and celebrities (aka “Influencers”) to influence shopping at the point-of-purchase.  It creates a compelling way for influencers to leverage their online followings to interact meaningfully with and monetize fans who can earn unique prizes, exclusive content access and other offers from those influencers.  Our $2M seed round is being led by Founders Co-op, and is nearly 80% closed."

    Traction

    • 100,000 Monthly Engaged Fans
    • Generating early revenues
    • 20-30% conversion rate for desktop & mobile app install
    • Partnered with Creative Artist Agency (CAA), ICM Partners and two other talent agencies representing 80% of the market’s top “Influencers”
    • Live with A-List Celebrities including Lindsay Lohan, NAS, Jillian Michaels and many more

    Closed Deal with Ultra Music Festival that will allow for explosive growth in each city we launch in with them

    They are raising about $2M in a convertible note, these are the kind of deals we'll be fronting in exchange for a % once we get going.  


  114. Phil,

    I'm interested in the Influence Mobile deal.  Can you email me the particulars?  Palotay@gmail.com

     

    Thanks.

     

    -Mike


  115. Not very bouncy into the close – sad day for the markets but, on the whole, it was a fun week!  AAPL finished at $570, CMG $501, AMZN $303, GOOG $516, NFLX $324, TSLA $199 – now on to the Fed meeting…

    SCO/Griffin – That is what it's like.  I'm encouraged by the failure to retake $101 and, as I had said before, I simply don't see oil even holding $100 if the Ukraine stops making headlines.  So, we'll see next week.  

    NFLX/Taihu – It's down too much now, I like to short things when they are high but, unfortunately, no one believes me then.  Only after something has fallen do people say "hey, do you have a short play on them?"  It's strange…   

    http://www.philstockworld.com/2014/02/26/which-way-wednesday-popping-or-topping/

    So close – and yet so far.  

    All but the Dow have fully recovered from the January drop and the Nasdaq is making up for it by going 50 points over the previous 4,250 high (1.2%).  Is it a clear indication of a breakout or a silly spike higher with heavyweights like NFLX, TSLA, GOOG and PCLN acting like 1999-style dot com stocks?

    TSLA is priced at 100 times FORWARD earnings, NFLX about the same,  PCLN (26) and GOOG (23) are relative bargains by comparison and AAPL (our trade of the year), with a market cap of $465Bn against $40Bn of earnings would seem like a great deal, by comparison (even if you ignore their $180Bn in cash), yet they have, so far, been sitting out the market rally at $520.  

    This is just what it was like in 1998 and 1999, when people who owned "sensible" stocks like IBM, GE, AT&T, McDonalds, Ford, etc. were punsihed while Webvan (the old Amazon), Microstrategy (survivor), WorldCom (the old MCI), Inktomi (the old Oracle), Lycos (the old Google), Pets.com (the old nothing), Broadcast.com (the old NFLX), etc were valued at 100x earnings and more (the average p/e for the Nasdaq in 1999 was 78 times earnings).  

    February 24th, 2014 at 9:44 am | (Unlocked) | Permalink 

    NFLX/StJ – The big loss is the acceptance of the PRINCIPLE that they have to pay for bandwidth.  I remember when we only paid $19 a month for our mobile phones.  Once you agree to the concept, then it's simply a matter of relentless annual rate hikes until it's suddenly a significant amount of money.  "Blogstreamingmedia.com" is engaging in total speculation anyway, they have no clue what this deal means to NFLX but we do know they fought tooth and nail against the passage of the ruling – why would they do that if it was going to save them money?  

    NFLX/IHS – It's a big position but NFLX is at $432 so you are out of position.  Down $3,000 not tragic on 1,500 units but if NFLX does pop $440, then you have trouble.  I'd try to give it a couple of days and see how the analysts weigh in on the new fees – it's very hard to imagine how this would put them over the top.  I can't believe they're not down on this news.  

    February 25th, 2014 at 5:12 am | (Unlocked) | Permalink

    NFLX is interesting, as they only made $112M last year against their $27Bn market cap (p/e 241) and you hear about them "only" spending $50M with Comcast and they'll "only" spend $50M with VZ and, oops – that's ALL of their profits!  I know it's very complex and we won't know for some time how this impacts their profits but I find it very, VERY hard to believe this costs them nothing and even $10M a year is 10% of their profits! 

    March 6th, 2014 at 1:34 pm | (Unlocked) | Permalink | 

    Overvalued/ZZ – CMG, SCTY, GMCR, WYNN, AMZN, NFLX…  Lots to list but may as well play Russian Roulette with 5 chambers loaded and hope for a winning spin!    

    As I noted yesterday, EGPT ($67.75) seems a bit stretched and XRT is back to $87 (from $77), which is where we were gung-ho short before.  DIA is a bit silly at $165 and, of course, TNA $85 is way too high as well – those are some serious shorts I'd start out with.  

    Also, this was from the main post on 2/20:

    Isn't it useful to have that kind of information BEFORE something happens?  We put that knowledge to good use earlier in the day

    As I often have to remind people – I can only tell you what I think is going to happpen and how I think you can profit from it – the rest is up to you…  Hopefully, it goes without saying that, when we find 9 ways to short the market by lunch, it's GAME OFF for our short-term long plays!  

    NFLX/Jabob – You have to look at why it went up.  House of Cards was a big hit, with 16% of NFLX subscribers watching it the first week.   This is really not a big deal, it just means that 16% of their subscribers are fans – the first season, not that many people rushed for it but now it built an audience – just like any hit TV show.   Meanwhile, not a word about Lilyhammer, Hemlock Grove, Bad Samanthas, the Ropes….  NFLX is a TV station – nothing more.  The fact that they have A hit is novel, but it's not the game-changer they are pricing for.  Even if they were a successful TV station – they are still overpriced by 10x for that market.  

    The only way to short NFLX is long-term and with conviction.   I would short NFLX 2016 $500/400 bear put spread at $60 and sell the $550 calls for $60 for net $0 on the $100 spread – if I were crazy enough to short Momos.   That pays $10,000 per contract against no cash (TOS says $44 in margin) and you don't lose money until NFLX is over $550 and, keep in mind, at $500, you can capitulate and BUY NFLX to cover the short call and you can stop back out below $500 if it fails again. 

    And here's a very good rant about MoMos from February 19th, 2014 at 9:59 pm | (Unlocked) | Permalink

    Look at NFLX's chart:

    It's not that they don't go down, they go down fast and hard with great regularity – it's that you don't position yourself to take advantage of the pullbacks or, when they do happen, you aren't satisfied with your gains (or comeback) and then they go up again and you forget that they ever went down.  

    You can't play a short game shorting momentum stocks – that is simply Russian Roulette – they will eventually blow your head off if you keep spinning and pulling the trigger.  You have to go into the stock ASSUMING it can double on you and KNOWING what you are going to do at each 20% move it makes against you.  That's 5 times you have to roll that you need to have planned BEFORE making your first short (or long, though long has been easier of late).  

    In each and every roll, you MUST be in a position to AT LEAST get even if the stock has a 10% correction.  

    Even on earnings, CMG didn't move 20% in a day, they did go from $440 to $520, which is $80 and just about 20% but, if you are playing it right – you have a PLAN  for what happens at $528 (20% over $440) or else why the f*ck did you ride it into earnings in the first place?  If your PLAN at $528 allowed you to roll into a position where a 10% correction would get you even, then the dip from $540 to $480 would have fixed everything.  

    THAT is the point of playing MoMos – we start with small positions and make a larger commitment at higher and higher strikes and, if all goes well, we get more than a 10% correction – exactly at the point where we are heavily short.  But that point is AFTER the stock has gone 100% against you.  Just like the Futures trades, you have to lighten up on the pullbacks and reaffirm your shorts on the moves up.  Messing up that sequence is the same thing as trying to surf and missing your turn into the wave – it can be a perfect wave, but you will be wiped out because you played it wrong!  

    TSLA is completely ridiculous as it JUST went from $195 to $120 – what more can people possibly want?  I remember when it was at $120, people were freaking out about their $115 short puts and I had to reassure those people that TSLA wasn't worthless and they shouldn't panic out.  Momos do have real values, they just have wide swings around those values.  

    Of course, ABX goes from $21 to $15 to $21 (40%) again and people don't call them a MoMo:

    Why is that different than GMCR going from $80 to $120 (50%) and back again?

    The difference isn't the stocks – it's how you play them and how you OVERplay them and how you allow them to panic you in and out of positions vs IRBT, which went down and up 50% and all we did was buy more when it was cheap (as we did with AAPL):

    If you don't want the stress – PLAY BLUE CHIPS!!!  I like blue chips, I recommend them whenever they are low in a channel.  I pounded the table until my hands were bloody stumps in the crash telling people to buy blue chips but no one wants to talk about blue chips during the average day (nor is there any reason to, because they are boring) so we disproportionately talk about MoMos but NO ONE should be disproportionately playing them – not even in a short-term portfolio.  

    Thanks Tommy.  

     


  116. Anyway, where was I?  Oh yes, so have a great weekend everyone!

    Taihu, the point above isn't to say "I told you so" but to point out that I make these calls WHEN the values are too low or too high and I feel it's worthwhile.  Once we get a pullback then yes, maybe it will go lower but maybe it won't and maybe it won't is very, VERY dangerous with these MoMo stocks.  

    NFLX was one of those short positions I kept banging the table on as they rose from $300 to $450 as a good short but, as above, it was good because, if we kept pressing our bet on the way up, we'd get a huge payoff once they corrected.  Now they've corrected – it's just not as much fun to play anymore.  

    You have to learn not to chase moves.  NFLX is down 25% from the top, now is not the time to jump on the bandwagon.   The problem is, you also have to learn to look at a chart like that in late Feb/early March and have enough faith in the real VALUE of NFLX that you are willing to put your foot down and make a bearish bet.  

    That NFLX 2016 $500/400 bear put spread is already $80 and the short $550 calls are $19 for net $61 off the net $0 entry – not too bad for taking a stand.  They'll still gain another 66% if NFLX stays below $400….

    Thanks Scott!  

    Influence/Palotay – Yeah, sorry we weren't ready yet.  I'll Email you details.


  117. No worries Phil.  Our time will come.  Have a great weekend.


  118. Phil // CZR
    was that the 'teaching ' part ? ; >

    This is what I was looking for ;
    who is going to burn .25 just to assign you the stock?  You are right, they don't care what you paid, they care what they paid and they paid a .25 premium so they lose 10% of the contract price, plus pay assignment fees in order to make you buy CZR for $2.25 over the current price – it's not worth it.  


  119. Phil / Covered Calls – If there is time this weekend, could you teach a bit about writing covered calls. I'm specifically looking to add this strategy in my retirement account which basically only allows the covered call apart from buying stock outright and protective puts. The area I'm specifically wondering about is what you do when the stock price drops so much below your cost basis that writing a call to make any profit would require a strike price that basically has no premium. What would you look for in a stock that would qualify as a good pick for covered calls? Hope this makes sense and any input from you is greatly appreciated as always.


  120. Phil/ Mutual Fund 401K~ Just to follow up, can you tell me the custom issue for my 401K management? My answer to your question is no, I can't change my 401K as my employer contributes $$ to us each year. Can't complain!  However, we can invest in equity and bond funds. Very limited choices. I guess I could make very nice returns if it's options. I can utilize your investing techniques + your valuable picks + patience=$$. Reality is not perfect I guess.  

     

    Below is the related comments from last post.

    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.

    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?  



  121. Good morning!

    Teaching/Wombat – As long as you learn something, then that was the teaching.  

    Covered calls/Pfehlmann – If the account is tax-free, then you can write shorter-term covered calls but, if taxed, then it's silly to write calls that make you profits in less than a year.  Covered call-writing is boring and not very profitable with stocks because you cap your gains and only minimally guard against losses, that's why we don't bother.  Craigzooka, on the other hand, teaches a covered call-writing strategy at our seminars that's very effective, but it requires managing your position on a regular basis.  

    If you are talking about a retirement account, I'd stick with dividend-paying stocks where you can sell calls to improve your returns.  FCX is the example we had in the Webinar this week, and they pay a $1.25 dividend (3.7%) so you can buy the stock for $34 and sell the 2016 $35 calls for $3.60.  There's nothing sexy about it but what do you expect when you put your money in a restricted account?  You drop your net to $30.40 and you'll collect $2.50 more over 2 years in dividends so, if you get called away at $35, you make $7.10, which is 23% on your $30.40 – not exciting but hey, it's tax free!

    So all you can do is look for opportunities that make you better than 10% a year and hope that it compounds over time.  When the stock drops a lot, you are 10-20% better off than other people who bought the stock and didn't cover but that's about it – there's no magic beans here.  It's like saying you have signed a contract to box with both hands handcuffed behind your back and you're asking how you will win the heavyweight championship – it's just not going to happen.  What you do have to consider is whether keeping money in a restricted account is really worth it.   If you have no choice, then you just need to make the best you can of the situation.  

    Sticking to longer-term sales keeps you from getting killed when a stock drops.  Short-term selling may be more profitable in flat markets but, in both down and up markets, it tends to underperform.  Compounding 10% a year in a retirement account is very good money, the key is selecting good stocks, preferably that add dividend components and simply letting compound interest do its work for you.  

    As to your question about what to do when a stock drops below your cost basis – you have to evaluate the stock and either sell another call (and, if you learn to watch your deltas and reposition on the way down, you won't get hit with as much damage) or wait for a comeback.  For choosing stocks, of course you want to buy low in a channel, not high and it's also often better to buy a stock when it's sitting on a strike, as the option premium tends to be better.  

    I don't know if you are allowed to do bull call spreads or calendar spreads – both of those allow for far more flexible and profitable strategies than boxing with both hands tied behind your back.  

    • F just came down in price and you can buy it for $15.78 and sell the 2016 $15 calls for $2.10 for net $13.68.  Since F pays a .50 dividend, getting called away at $15 nets you $2.32, which is 17% back.
    • On the other hand, if you bought the F 2016 $13 calls for $3.25 and sold the same $15 calls for $2.10, you net into the $2 spread at $1.15 with .85 upside at the same $15, no dividend but a 74% return on your money.

    That means you can make the same return as you would with $13,680 worth of stock with the short calls and the dividend ($2,320) by buying just 33 bull call spreads for $3,795, which would return $6,600 at $15. 

    Not only do you need to tie up 70% less money (which means you are free to diversify for greater safety) but the net delta of the spread is just 0.18, which means F can drop $2 (12.7%), for example, and you are only down 0.36 x 33 contracts or $1,188, or 8.6% of your stock allocation.

    So, you make more on the way up and lose less on the way down with a bull call spread using 70% less capital – AND THAT's NOT EVEN USING A SHORT PUT FOR LEVERAGE.  No wonder we never talk about basic covered calls, right?  

    One question you need to ask yourself is: "How much money am I saving in taxes in an IRA vs. how much more money could I make without all these restrictions on my trading?"  If you can make 20% on F using the same strategy that makes 10% in an IRA, you'll bay back 6% of it in taxes (assuming it's all taxable profit) but not if it's long-term, in which case you give back 4%.  Either way, you're miles ahead, AFTER TAX, of your IRA returns.

    Another strategy you can use in most IRAs is a calendar spread.  Again, with F, you can buy the 2016 $13 calls for $3.25 and now you can sell quarterly calls, like the July $15s for $1.  That drops your net on the long $13s to $2.25 and we assume if F goes higher, that you'll be able to roll the July $15s to the Sept $16s (now .66) or the Jan $16s (now $97) and, obviously, even if you only roll up $1 per year, you turn net $2.25 into net $4 for almost 100% returns while using very little cash, no margin and giving yourself excellent downside protection.  

    By the way, Wiley wants me to write a book on options and I want to write it on our "Be the House" strategy.  Would the above make a good chapter and how could it be improved (and I'm sure we need illustrations and maybe spreadsheet examples).  


  122. Busy, busy week…. Manufacturing PMI, unemploymeng, GDP, Fed! And May Day on Thursday.


  123. 401K/Invest – Well the trick then is just to pick the right funds if that's your only choice.  You need to be careful of the fees charged by various funds, they can really eat into your profits over time.  Bond funds are completely useless, for the most part but equity funds can make returns, though generally they average 5-8% a year on the whole.  As with the above comment, it's amazing the crap people will put up with to try to avoid paying taxes.  It's the same thing with corporations – AAPL is hiding over $100Bn overseas and has been for 5 years to avoid taxes – had they bought the money back in 2009, paid $35Bn in taxes and spend $75Bn buying back their own stock, they'd have turned it into $375Bn now.  Instead, it's $100Bn sitting overseas still.  

    Matching contributions are nice so that account is just what it is, a place to park money and watch it grow (hopefully) over time.  Try to find funds that collect dividends and you can try working with sectors and timing but then that depends on how often you're allowed to buy and sell positions in your account.  Take a look at RYPNX and CSRSX, which is a realty fund that could do well if that market comes back.  

    Big Chart – The Nas and RUT are looking really bad, won't take much for the others to follow.  

    Next week we have a Fed decision but Yellen speaks pre-market the next day – it seems like they are going to do something the market won't like on Wednesday and they are scheduling Yellen early Thurs so she can backpeddle if necessary.  Lots of data next week but it will be swamped with earnings. 


  124. Phil / Covered Calls – Thank you for taking the time for the great explanation above. Unfortunately, in that account I have no choice but to box with my hands tied behind my back :(

    I like the idea of writing longer term calls to ride out any downturn that may befall a stock. One thing I would be allowed is to buy a put to make a collar.

    I think this would be a great chapter for your book; especially, with illustrations and spreadsheets. It would be nice to have an example of a covered call that worked out well and an example of a covered call that needed adjusting and what to watch for with the deltas. I know I would benefit from a delta lesson.


  125. Phil / True true true
    Well, I remember contributing voraciously to the Wiki so you would get off your arse and write the damn thing ; > I think ( not a writing strategy ) it'll be great. Stay away from the greeks and pretend your writing it for my mom ( who's doing better than I am … damn )
    Yes, the IRA part is nice b/c is represents ALOT of people. What we do is pretty niche, but if you could talk to the everyday man, I think you could make a big difference.
    Take my brother for example. Everytime I go home he asks me about options ( he's in IT, so not challenged by any means ) but simply cannot wrap his head around how options work. All, if not most, of his cash is tied up in an IRA, that is now in rollover that he can take charge of. I think covered calls, and calendar spreads are a reasonable ask for someone willing to check on their portfolio every other week.
    I use calendar spreads at TDA with my IRA's ( specifically with TZAs ) They will allow cal spreads up to one month forward.
    Since its the weekend, I'll add my two cents. I watch you carry short calls and short puts way over the line. At least how I was taught. When I sell a short put at 20 that I got paid $2 for, dip under $18, I see red. I think it's important ( the post that you responded with ) that folks understand the whole picture. You're right, who's going to burn .25 to assign me a stock that would hit me -2.25. This and how time effects assignment ( for example, even if you've burned through your premium, its 6 months out ).
    I particularly like the STP calls, because they're closer to the chest ; meaning I can look at a probability analysis and other tools to see my risk/reward. When we do long term 2016 plays, even with PM, TOS doesn't know how to handle them, so it slaps on the biggest margin possible. With vol stocks, this can be a killer. For example with TSLA this year, my risk arrays have flipped 3 times, sending me into massive house calls. Separate issue, I know.
    That, and of course a section on grinding money from 'butterflies'. Hard to understand but I love the set and forget portion, so I'm watching (a part from the CZR fly )
    If you ask me where I"ve lost the money this year ? Futures and Hedges.
    Hope that helps.


  126. On the deltas, just realize that you sell a call, let's say the BTU 2016 $18 calls for $3.50 with the stock at $18.  So you net in for $14.50 and, if you get called away at $18, you make 24%.  Obviously, you are protected down to $14.50 but the delta on the 2016 $18s is .57 so, in the short run, your stock will lose value 33% faster than your short caller (100% vs 60%), which is fine protection for the first $2 drop.  

    At $16 though, figure the $18 calls will be the price of the $20 calls ($2.60) so the short calls drop .90, not $1.14, and now their delta is .48, which means on the next $2 drop, the $18 calls will only lose 0.98 while your stock drops $2.  But the $22 calls are $2, so it's really even worse than you think it's going to be.

    See how you only have the ILLUSION of protection.  If however, you were paying attention, at the point at which the $18 calls fell from $3.50 to $2.60 on the first $2 drop, you would realize you are only getting 50% protection (.50 delta) and, with the stock at $16 and your net $14.50, you could have decided to flip to the $15 calls at $4, which would net you +$1.40 on the roll (changing your $2.60 caller for the $4 $15 calls) and that would have dropped your net to $13.10 with a call away at $15 (14.5%), so you give up 10% of potential upside but now the stock can drop 27% from where it was when you entered it and you'd still be even!  

    By keeping track of your protection and having clearly defined goals – you can manage your way through some pretty severe sell-offs and follow Warren Buffett's Rule #1 which is: "DON'T LOSE MONEY!"  

    Of course, you'll learn this stuff by doing and seeing examples over time and actually making the adjustments – there are no short-cuts or cheat sheets, you have to learn to understand how options work and how to make good entries and exits and, of course, the stock-picking itself is a dynamic thing.  

    Malcolm Gladwell says it takes 10,000 hours of practice/work for you to become an expert at something.  If you are willing to put in the time, I KNOW I can make you an expert but you have to be willing to do the work!  

    Thanks Wombat, very helpful!  


  127. Still a crisis in Ukraine:


  128. Check out the exodus from the Nas on Friday – almost 6:1 declining!  

    4-25-2014 6-35-40 PM Diary

    SPY 5 MINUTE

    SPY DAILY

    INDU DAILY

    NDX WEEKLY

    Here's why we sold more FAS calls the other day:

    KBE WEEKLY

    XLY WEEKLY

    TLT WEEKLY

    UUP WEEKLY

    FXY WEEKLY

    FXE WEEKLY

    USO WEEKLY

    EEM WEEKLY

    EPI WEEKLY

    FXI WEEKLY

    NYMO

    NYSI

    VIX

    That was nothing like panic on Friday, won't take much to really slam the markets down lower.  


  129. Happy weekend everyone.  this one's funny:  http://www.lifebuzz.com/funny-texts/#!Fl5u8


  130. FT runs through U.S. econ report, discussed GO [Gross Output] vs. GDP,  good summary:

    http://www.ft.com/intl/cms/s/0/37ab1ba4-cc97-11e3-9b5f-00144feabdc0.html?siteedition=intl


  131. Would it be an overstatement to state that the inconvenient clash of economic growth target vs. climate change research dooms us to live [barely] on "Dune"?  http://www.ft.com/intl/cms/s/0/0e6722ec-cd46-11e3-99be-00144feabdc0.html

     

    This weekend's practice for the apocalypse: 

    http://www.bing.com/videos/search?q=movie+clip+from+%22Dune%22&FORM=VIRE2#view=detail&mid=9A7899A2A36EA746E7739A7899A2A36EA746E773


  132. P.S. — I currently rent a Miami Beach condo, ending in June, thankfully.  Miles of Alton Road are being torn up and repaired from the incessant [sea water] flooding.  It won't help for long: the future is now. 

    http://www.nbcmiami.com/news/local/Alton-Road-Project-Gets-Underway-Monday-200675671.html


  133. Russia/Ukraine:  Remember how the "War of the Worlds" ended — "not with a bang, but with a [financial] whimper".

    http://www.nytimes.com/2014/04/26/business/international/standard-and-poors-cuts-its-rating-on-russia-citing-capital-flight.html?_r=0


  134. How Marlboro money paid for Commons launch of tobacco study
    http://www.theguardian.com/business/2014/apr/26/marlboro-tobacco-keith-vaz-plain-packaging





  135. Amazon Prime Versus Netflix Versus Hulu Plus: Which Should You Pay For?
    http://www.businessinsider.com/amazon-prime-versus-netflix-versus-hulu-plus-2014-4


  136. SpaceX gets closer to making a reusable rocket, sues Air Force
    http://www.latimes.com/business/la-fi-spacex-booster-20140426,0,2437496.story?cid=dlvr.it


  137. Curing cancer or AIDS could be the next frontier in Silicon Valley innovation
    http://qz.com/203283/curing-cancer-or-aids-could-be-the-next-frontier-in-silicon-valley-innovation/




  138. The Entire State Of California Is Now In Drought — Something That Hasn’t Happened In 15 Years
    http://www.businessinsider.com/100-percent-of-california-in-drought-2014-4


  139. Consolidation or Top? Key Watch Points Going Forward | Chris Puplava
    http://www.financialsense.com/contributors/chris-puplava/consolidation-top-key-watch-points



  140. iPad is crushing all its Android rivals combined in web traffic
    http://www.cultofmac.com/276061/ipad-web-traffic-crushes-android-tablets-combined/


  141. Google is waging a financial war of attrition to win the cloud
    http://qz.com/202903


  142. Beijing’s poorer neighbor is sacrificing its economy to clean up the capital’s air
    http://qz.com/203184


  143. Microsoft’s Xbox One Sold Just 1.2M Units To Retailers In Q3, Dips Below Xbox 360 Rate
    http://www.forbes.com/sites/insertcoin/2014/04/25/microsofts-xbox-one-sold-just-1-2m-units-to-retailers-in-q3-dips-below-xbox-360-rate/



  144. Merrill Lynch chart shows how much investors have pulled out of growth stocks and plowed into value
    http://blogs.marketwatch.com/thetell/2014/04/25/merrill-lynch-chart-shows-how-much-investors-have-pulled-out-of-growth-stocks-and-plowed-into-value/






  145. Running The Numbers, Amazon’s HBO Deal Is Not All It’s Cracked Up To Be
    http://www.forbes.com/sites/charleyblaine/2014/04/23/is-amazons-hbo-deal-all-its-cracked-up-to-be/




  146. Comcast’s monthly bills are way higher than Time Warner Cable’s
    http://qz.com/202618/comcast-monthly-bills-are-way-higher-than-time-warner-cables/


  147. Here’s How Much Money Big Tech Companies Make In Just One Second
    http://www.businessinsider.com/visualizing-how-much-big-tech-companies-make-2014-4



  148. Facebook’s mobile user base has crossed the 1 billion threshold
    http://qz.com/202349/facebook-mobile-user-base-has-crossed-the-1-billion-threshhold/


  149. Solar Power Is Now As Cheap As Grid Electricity In These European Countries
    http://www.fastcoexist.com/3028653/solar-power-is-now-as-cheap-as-grid-electricity-in-these-european-countries







  150. 23 Charts Of Rising Inequality That Will Make You Worried About The Future
    http://www.businessinsider.com/charts-on-us-inequality-2014-4




  151. Good morning!  

    In the end, the Tea Party is just another scam to separate people from their money:

    Out of the $37.5 million spent so far by the PACs of six major tea party organizations, less than $7 million has been devoted to directly helping candidates, according to the analysis, which was based on campaign finance data provided by theSunlight Foundation.

    The dearth of election spending has left many favored tea party candidates exposed before a series of pivotal GOP primaries next month in North Carolina, Nebraska, Idaho and Kentucky.

    Roughly half of the money — nearly $18 million — has gone to pay for fundraising and direct mail, largely provided by Washington-area firms. Meanwhile, tea party leaders and their family members have been paid hundreds of thousands of dollars in consulting fees, while their groups have doled out large sums for airfare, a retirement plan and even interior decorating.

    Three well-known groups — the Tea Party Patriots, the Tea Party Express and the Madison Project — have spent 5 percent or less of their money directly on election-related activity during this election cycle. 


  152. Book/Phil – I think your post from 11:04am on 4/26 would make an excellent chapter.  If you want something that's accessible to beginners, I'd suggest a chapter each for writing calls and writing puts (explaining what happens with each so that readers understand that getting assigned isn't a big deal), then move into spreads and finally the more complex strategies.  You might want to rate each strategy on a scale from "least aggressive" to "most aggressive", in terms of risk/reward (I think most people have an idea of where they see themselves on that scale).

    How about examples that show how each strategy works over the course of, say, 2 years, with stock "A" (goes up 10%~20% per year), stock "B" (trades in a range of -10% to +10% but ends flat at the end of the 2 years), and stock "C" (goes down 10%~20% per year).  I don't know if those percentages are the right ones to use – my point is that having consistent reference stocks that get used in every chapter might help people better understand how each strategy works compared to the others.  You could also illustrate how each strategy turns out compared to just buying and holding each stock, and this should help prove the value of "being the house".

    Finally, I'd stress the importance of monitoring and managing each position.  Usually, we need to be reminded to NOT mess with a position that has 2 years to play out.  But sometimes, it's important to make a change, such as an example you cited recently where if AAPL drops 10%, one should roll the long call in a bull call spread to a lower strike, if they can gain $50 of position for about $25.  The point here being to teach people that they need to have a PLAN for what they will do when they enter into a position.

    I think you could easily fill a book that covers all of these strategies for beginners, without even getting into the greeks and such.  Once you drive home the point that being the house rather than the gambler is the way to win, you'll have readers eagerly anticipating your NEXT book, covering more advanced topics and strategies ;-) .


  153. From Bloomberg, Apr 27, 2014, 2:46:14 PM

    Russian President Vladimir Putin. Photographer: Andrey Rudakov/Bloomberg

    The U.S. and European Union will
    impose new sanctions as early as tomorrow on Russian companies
    and individuals close to President Vladimir Putin over the
    escalating crisis in Ukraine, officials said today.

    To read the entire article, go to http://bloom.bg/1lhA1z7
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  154. From Bloomberg, Apr 26, 2014, 12:01:00 AM

    SpaceX’s Falcon 9 rocket lifts off from Cape Canaveral, Florida on April 18, 2014 carrying its Dragon CRS3 spacecraft on a resupply mission to the International Space Station. Photographer: Bruce Weaver/AFP via Getty Images

    Elon Musk’s Space Exploration Technologies Corp. plans to sue the U.S. Air Force, saying it should be allowed to compete in a satellite-launch market monopolized by the two biggest defense contractors.

    To read the entire article, go to http://www.bloomberg.com/news/2014-04-26/musk-s-spacex-to-sue-u-s-air-force-over-launch-monopoly.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  155. From Bloomberg, Apr 25, 2014, 3:40:33 PM


    Photographer: Jody Dole/Getty Images

    Canadian Prime Minister Stephen Harper missed the signs of growing opposition to the proposed Keystone XL pipeline, Bloomberg reporters describe in a behind-the-scenes investigation today. It took just one phone call with President Obama, on Nov. 10, 2011, to bring him up to speed.

    To read the entire article, go to http://bloom.bg/1ru2Hqj
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  156. From Bloomberg, Apr 27, 2014, 12:01:00 PM

    China Construction Bank Corp. (939), the
    nation’s second-largest lender by market value, reported wider
    lending margins in the first quarter, helping it to post its
    biggest profit increase in a year.

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


  157. From Bloomberg, Apr 27, 2014, 1:00:00 PM

    South Korea’s product innovation
    and the rise of the nation’s global brands such as Samsung
    Electronics Co. have helped it to outperform Japan on exports
    even after the yen’s slide.

    To read the entire article, go to http://bloom.bg/1fij5bJ
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  158. From Bloomberg, Apr 27, 2014, 12:01:00 PM

    Premier Li Keqiang’s invitation for
    private investors to help finance railways, ports and waterworks
    will help curb a blowout in regional debt, supporting a rally in
    local-government financing vehicle bonds.

    To read the entire article, go to http://bloom.bg/1fi9QIA
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  159. From Bloomberg, Apr 27, 2014, 3:29:40 AM

    BTC China halted local-currency
    deposits to clients’ China Merchants Bank Co. accounts, as
    lenders close accounts with Bitcoin exchanges amid government
    measures to check surging trading in the virtual currency.

    To read the entire article, go to http://bloom.bg/1lVw9SL
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  160. From Bloomberg, Apr 27, 2014, 4:00:00 PM

    Investors returned to gold just in
    time for the longest price rally in a month amid mounting
    tension over Ukraine.

    To read the entire article, go to http://bloom.bg/1hF6wS5
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  161. From Bloomberg, Apr 27, 2014, 12:00:01 PM

    Internet companies led the worst
    weekly decline since mid-March in Chinese stocks trading in New
    York as the government cracked down on online pornographic
    content and U.S. technology shares slumped.

    To read the entire article, go to http://bloom.bg/1h3E10Y
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  162. From Bloomberg, Apr 26, 2014, 1:32:03 AM

    China’s Hebei province said
    economic expansion slumped to 4.2 percent in the first quarter
    from a year earlier, as steel output fell and factories closed
    amid government efforts to clean up the environment.

    To read the entire article, go to http://bloom.bg/QNt1OX
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  163. From Bloomberg, Apr 27, 2014, 12:59:42 PM

    South Korean Prime Minister Chung Hong Won will stay in office until the government’s response to the ferry sinking has concluded, according to presidential spokesman Min Kyung Wook. Photographer: Park Young-Dae-Donga Daily via Getty Images

    South Korean Prime Minister Chung Hong Won resigned over the government’s failure to properly
    handle the nation’s worst maritime disaster in four decades.

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


  164. From Bloomberg, Apr 27, 2014, 12:00:00 PM

    A relative weeps before yellow ribbons at Jindo harbour where relatives of family members of the ‘Sewol’ ferry are waiting for developments in the search and recovery operations, on April 27, 2014. Photographer: Ed Jones/AFP via Getty Images

    Lee Mi Ja and her 50-member hiking
    club are among thousands of Koreans canceling holidays, as grief
    for the dead and missing from a sunken ferry overshadow what’s
    normally peak season for hotels and retailers.

    To read the entire article, go to http://bloom.bg/1h3E1y9
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  165. From Bloomberg, Apr 27, 2014, 10:20:18 AM

    Chung had to go. Photographer: Park Young-Dae-Donga Daily via Getty Images

    To many Koreans, Chung Hong Won has done exactly one thing right since the tragic sinking of the ferry Sewol cost hundreds of passengers, most of them high-schoolers, their lives. On Sunday morning, South Korea’s prime minister — the No. 2 official in the government — resigned.

    To read the entire article, go to http://bv.ms/1nSav39
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  166. From Bloomberg, Apr 26, 2014, 9:50:24 AM


    A man looks at a bulletin board while another speaks on the phone as Chinese relatives of passengers on the missing Malaysia Airlines flight MH370 have a meeting at the Metro Park Hotel in Beijing on April 23, 2014. Photographer: Wang Zhao/AFP via Getty Images

    Investigators are preparing to
    widen the seabed scan for missing Malaysian Air Flight 370 in
    the Indian Ocean after family members frustrated by a lack of
    information detained airline employees sent to meet with them.

    To read the entire article, go to http://bloom.bg/1nv0LOM
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  167. From Bloomberg, Apr 27, 2014, 7:27:26 PM

    Japanese index futures dropped as
    the yen held near a one-week high versus the dollar amid
    prospects Russia will be subject to new sanctions with tensions
    over Ukraine intensifying. Gold maintained gains with silver and
    platinum as Australian bonds followed Treasuries higher.

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


  168. From Bloomberg, Apr 27, 2014, 6:03:05 PM

    Shipping containers and container cranes are seen in the Port of Hamburg. Photographer: Krisztian Bocsi/Bloomberg

    Reederei Heinrich, a 149-year-old
    German shipping company, risks losing two of its three vessels
    unless it repays loans as financial stress in the industry
    spreads to banks facing a European Central Bank review.

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


  169. Notable earnings before Monday’s open

    05:30 PM ET · ACW


  170. Notable earnings after Monday’s close

    05:35 PM ET · ADVS


  171. Three Sunday reads

    07:00 AM ET


  172. Detroit, retirees agree to deal over benefits

    03:47 AM ET · MUB

    • Detroit has filed the latest version of its debt-reduction proposal after it forged a deal with representatives of tens of thousands of retired city workers.
    • Detroit has agreed to ease healthcare and pension cuts, although retirees will still only receive 10-13% of what they would have originally been given for healthcare.
    • The deal “puts the city that much closer to emerging from bankruptcy solvent, more credit worthy and better able to provide basic services to its nearly 700,000 residents,” said Emergency Manager Kevin Orr.
    • The agreement adds to those that Detroit has formulated with several banks, bond insurers and other retiree groups, boosting the chances of the city receiving approval from its creditors for its restructuring plan. However, some bond insurers and unions still haven’t come to an agreement with Detroit.
    • A vote on the debt restructure could start next month.
    • More on Detroit
    • ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, PRB, SUB, PZT, SMB, NYF, SHYD, CXA, PWZ, PVI, SMMU, INY, MUAF, MUAE, MUAD, VRD, MUAC, MUAG, MUAH, GMMB, RVNU


  173. Reuters: U.S. probing firms in multiple industries over hiring

    03:16 AM ET

    • The SEC and Department of Justice have expanded existing inquiries of potential bribery in Asia to include hiring practices, Reuters reports, with authorities questioning companies in several industries, including oil and gas, telecommunications and consumer products.
    • The investigators are particularly focusing on China, South Korea and southeast Asia, including Singapore.
    • However, it’s not clear which firms are involved, nor how many. On Wednesday, Qualcomm said it found cases in which “special hiring consideration” was given to candidates with connections to state-owned companies or agencies in China.
    • Until now, the main focus of the recruitment probes has been banks, and JPMorgan has attracted the most attention over allegations that it hired the relatives of top officials in order to win deals.


  174. Microsoft prepares to jump into crowded field with Xbox TV shows

    02:48 AM ET · MSFT

    • Microsoft (MSFT) intends to this week provide hints about exclusive programming for the Xbox, with shows set to include a series from Steven Spielberg based on the videogame “Halo.”
    • Another expected program is “Every Street United,” a documentary-style series about soccer that will start in time for the World Cup in June.
    • However, Microsoft faces a crowded field in which Netflix, Amazon, Hulu and Yahoo are producing original content for the Internet.


  175. China to ease capital controls for multinationals

    02:34 AM ET · FXI

    • China’s State Administration of Foreign Exchange is widening a trial program to loosen currency controls in the country and will allow domestic and foreign firms with at least $100M in annual foreign-exchange income to transfer money more easily.
    • The move is part of China’s plans to reform its economy and allow a bigger role for free markets.
    • ETFs: FXI, PGJ, GXC, FXP, YINN, CYB, CNY, DSUM, YANG, MCHI, XPP, YAO, YXI, FXCH, CHXF, FCA, TCHI, CHLC


  176. GE’s Immelt to meet French Industry Minister over Alstom deal

    02:21 AM ET · GE

    • GE (GE) CEO Jeff Immelt is due to meet French Industry Minister Arnaud Montebourg today to discuss the company’s possible bid for Alstom’s (ALSMY) energy assets. The deal could be announced tomorrow.
    • Although the state doesn’t have a stake in Alstom, the company is considered a national champion, while the government wants guarantees about jobs, especially with unemployment so high.
    • To make any deal more palatable, it would exclude Alstom’s transport business, which produces the iconic TGV train.
    • The transaction has the support of Bouygues (BOUYF), Bloomberg reports. Bouygues owns 29% of Alstom.
    • Meanwhile, the news-wire service compares GE’s bid for Alstom with its ill-fated $53B attempt to acquire Honeywell 13 years ago in a deal that floundered on EU antitrust opposition. GE’s success in receiving authorization for its acquisition of Italian aerospace company Avio last year shows “that it is able to work with regulators,” says Brussels lawyer Paul McGeown.


  177. Russia faces further sanctions but escapes wide-ranging action, for now

    02:02 AM ET · RSX

    • The U.S. and EU are set to impose new targeted sanctions on Russia tomorrow that would hit more individuals with travel bans and asset freezes.
    • The proposed action would come after the G7 concluded that Russia hasn’t met its pledge to “de-escalate” the conflict with Ukraine.
    • However, any moves wouldn’t target broad sections of Russia’s economy, as Ukraine has demanded. While the U.S. and EU have made noises about wider-ranging action, individual EU countries fear the consequences for their economies. Businesses, especially in the energy sector, have been lobbying to limit the sanctions.
    • Meanwhile, Ukraine and Slovakia are tomorrow set to sign a limited reverse-flow agreement that would supply natural gas to Ukraine, which is looking to reduce its reliance on Russia for its energy needs.
    • More on Ukraine
    • ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR


  178. FT: Comcast, Charter could announce $20B customer deal this week

    01:39 AM ET · CMCSA

    • Comcast (CMCSA) could this week announce a $20B three-part deal to divest subscribers as part of its attempt to assuage antitrust concerns about its proposed takeover of Time Warner Cable (TWC), the FT reports.
    • Comcast would sell 1.4M subscribers from TWC’s network to Charter (CHTR), while Comcast would also place 2.5M subscribers in a new company in which Charter would own 35%. Comcast and Charter would then swap 1.65M customers.
    • The transactions are contingent on Comcast receiving approval for its takeover of TWC.


  179. Reuters: Merck closes in on sale of consumer healthcare unit for $14B

    01:23 AM ET · MRK

    • Merck (MRK) could agree a deal to sell its consumer healthcare operations this week for almost $14B, Reuters reports, with Germany’s Bayer (BAYRY) and U.K.-based Reckitt Benckiser (RBGLY) the frontrunners to buy the unit.
    • Other healthcare consumer giants have also also shown interest in the business, including Procter & Gamble (PG), Novartis (NVS) and Sanofi (SNY).
    • Merck is looking to sell the operations as it only holds around 1% of the market.
    • A deal would be the latest in a wave of blockbuster transactions to have swept the healthcare sector recently, such as Pfizer’s $100B+ reported offer to acquire AstroZeneca, Valeant and Bill Ackman’s $47B play for Allergan, Zimmer’s agreement to purchase Biomet for $13.35B, and a series of deals involving Novartis, GlaxoSmithKline and Eli Lilly.


  180. Bullish Barron’s writeup for AIG

    Yesterday, 09:20 AM ET · AIG

    • “We feel like a start-up company with 64K employees,” AIG chief Bob Benmosche tells Barron’s. Up 57% since the start of 2012 vs. a 29% gain for the S&P 500, AIG – writes the magazine’s Jack Hough – has plenty of room to run and could double in the next five years.
    • The key is valuation – at just 0.76x book value, AIG trades at a significant discount to peers thanks to far lower ROE. One reason: Roughly one-third of AIG’s $100B in equity consists of “financial-crisis leftovers, rather than productive operating capital,” writes Hough. Among these items are $10B-$15B of derivatives which have been heavily marked down, are recovering, and set to expire over the next four to five years, $20B in DTAs which will gradually convert to cash as profits grow, and ILFC, whose sale for $6B should close in Q2.
    • As all that capital frees up, expect it to be used for dividends and share repurchases. AIG recently hiked the dividend and now yields about 1%, but Benmosche prefers buybacks as long as the stock trades so far below book.
    • Speaking of Benmosche, it’s likely he retires over the next year. Shareholders may miss him, but Bernstein’s Josh Stirling says it’s a good sign: “We just can’t think of a turnaround CEO in insurance who left before their story had fully inflected, and left the fate of their legacy in the hands of their successor.”


  181. Citigroup up next for DOJ on mortgage settlement

    Fri, Apr 25 · C

    • JPMorgan cut a deal for $13B late last year, Bank of America is reportedly in talks for a settlement figure greater than that, and now the WSJ reports Citigroup (C) and the DOJ are ready to sit down to begin negotiating how many billions that bank will have to part with over MBS created during the housing bubble.
    • Citigroup was a smaller player in mortgages than JPMorgan or BofA, and its mortgage-related settlements have tended to be smaller as well. Bernstein analysts estimate Citi issued $91B of private-label MBS between 2004 and 2008 vs. $965B at Bank of America (and Countrywide) and $450B at JPMorgan (and Bear Stearns and Wamu). Trying to put a ballpark number on a settlement figure, Bernstein’s thinking about $5B.


  182. Barron’s: Whirlpool still a buy despite earnings disappointment

    Fri, Apr 25 · WHR

    • Investors reacted to Whirlpool’s (WHR) Q1 earnings report with a collective shrug, but Barron’s says the appliance giant remains worth buying, offering sales growth, a buyback program and pent-up demand.
    • U.S. demand for household appliances is increasing due to an improving economy and growing numbers of young people finally able to move out of their parents’ homes, Johanna Bennett writes; with cost cutting, WHR is poised to grow profits at a clip that could average 20%-plus annually over the next few years.
    • With that kind of profit growth ahead and a 2% dividend yield, the stock deserves better than the current multiple of ~12.6x 2014 earnings it now fetches.


  183. Baird analysts list top 10 reasons to own SunPower

    Fri, Apr 25

    • SunPower rallied 6.7% today following Q1 earnings that beat Wall Street estimates and painting an outlook for strong demand in all regions; the results inspired Baird analysts to come up with 10 reasons to own the stock, which they say is their favorite among solar stocks.
    • Among the top reasons: seasoned management in an industry not known for stability; leading module technology, with solar modules that are more efficient than competitors’ and a larger lifetime power output; strong geographic diversity; active in commercial as well as residential and utility businesses; a flexible balance sheet able to pursue a yieldco in the future.


  184. Microsoft rushes to fix browser after attacks; no fix for XP users
    http://www.reuters.com/article/2014/04/27/us-cybersecurity-microsoft-browser-idUSBREA3Q0PB20140427


  185. This Week Is Totally Stacked With Major Economic Events — Here’s Your Complete Preview
    http://www.businessinsider.com/monday-scouting-report-apr-28-2014-2014-4



  186. Housing The Homeless Saves Money--Here’s The Research That Proves It
    http://www.fastcoexist.com/3028384/housing-the-homeless-saves-money-heres-the-research-that-proves-it


  187. How to keep on selling smartphones when we’ve nearly all got one already
    http://www.theguardian.com/technology/2014/apr/27/smartphone-market-saturation-apple-samsung


  188. Delayed flights may cost airlines billions after test case rulings
    http://www.theguardian.com/business/2014/apr/27/delayed-flights-airlines-compensation-rulings


  189. Here’s How The World Is Trying To Get Internet Across Oceans And Underwater
    http://www.businessinsider.com/heres-how-the-world-is-trying-to-get-internet-across-oceans-and-underwater-2014-4



  190. EU exit could wreck UK financial capital, says City lobby group
    http://www.reuters.com/article/2014/04/27/us-britain-europe-idUSBREA3Q0RZ20140427


  191. Spain’s borrowing costs are down – but the unemployment rate isn’t
    http://www.theguardian.com/world/2014/apr/27/spain-borrowing-costs-down-unemployment


  192. 10 Things You Need To Know As Asian Markets Open
    http://www.businessinsider.com/10-things-asia-april-27-2014-4


  193. Sickened Texas Family Awarded Millions In First US Fracking Case
    http://www.businessinsider.com/first-us-fracking-case-aruba-petroleum-2014-4



  194. Researchers Tested The ‘Gambler’s Fallacy’ On Real-Life Gamblers And Stumbled Upon An Amazing Realization
    http://www.businessinsider.com/the-gamblers-fallacy-and-the-hot-hand-2014-4



  195. How Big Data Helps Chains Like Starbucks Pick Store Locations — An (Unsung) Key To Retail Success
    http://www.forbes.com/sites/barbarathau/2014/04/24/how-big-data-helps-retailers-like-starbucks-pick-store-locations-an-unsung-key-to-retail-success/



  196. Phil,  that 2/20 TNA bear put spread is working out.  I'm going to look at more bear put spreads in this market.



  197. Confidence is a poor measure of economic health
    http://www.ft.com/cms/s/0/ccc6aad6-cbb7-11e3-8ccf-00144feabdc0.html


  198. RyanDetrick shared a chart on StockTwits
    http://stocktwits.com/message/22396144


  199. Productivity Has Been Stalling For A Decade, And No One Has A Good Explanation Of Why
    http://www.businessinsider.com/productivity-stalling-for-a-decade-2014-4


  200. America’s Consumers Are Dropping, Not Shopping
    http://www.infowars.com/americas-consumers-are-dropping-not-shopping/


  201. China’s crisis is coming – the only question is how big it will be
    http://www.ft.com/cms/s/0/f627e162-cc96-11e3-ab99-00144feabdc0.html


  202. Bad Government and Central Bank Policy Are the Main Cause of Runaway Inequality
    http://www.globalresearch.ca/bad-government-and-central-bank-policy-are-the-main-cause-of-runaway-inequality/5379433





  203. Mitch ‘McTurle’ McConnell: ‘Not My Job’ To Bring Employment Opportunities to Kentucky
    http://progressivepopulist.org/2014/04/26/mitch-mcturle-mcconnell-job-bring-employment-opportunities-kentucky-video/


  204. He Got About 199 Rejection Letters And 1 ‘Maybe’ But Still Managed To Invent Something Amazing
    http://www.upworthy.com/he-got-about-199-rejection-letters-and-1-maybe-but-still-managed-to-invent-something-amazing?c=ufb1


  205. Sarah Palin: If I Were President ‘Waterboarding Is How We’d Baptize Terrorists’
    http://www.mediaite.com/online/sarah-palin-if-i-were-president-waterboarding-is-how-wed-baptize-terrorists/


  206. DNA Analysis of Paracas Elongated Skulls Released: Unknown To Any Human, Primate, or Animal
    http://www.collective-evolution.com/2014/02/12/dna-analysis-of-paracas-elongated-skulls-released-unknown-to-any-human-primate-or-animal/


  207. One Year After Bangladesh Factory Collapse, Walmart STILL Hasn’t Signed Off on Worker Safety Standards
    http://progressivepopulist.org/2014/04/25/one-year-bangladesh-factory-collapse-walmart-still-hasnt-signed-worker-safety-standards/


  208. How Steve Perlman’s pCell can transform India – and the world – with superfast wireless
    http://www.zdnet.com/how-steve-perlmans-pcell-can-transform-india-and-the-world-with-superfast-wireless-7000028791/


  209. Why VC Firms Are Snapping Up Designers
    this is my idea god dammit
    been pitching it at VC for 6 months.

    Arghhhh.
     


  210. Good morning!

    Almost a half-point bounce in the Futures already based on the usual Monday M&A activity.  The fact that one multi-Billionaire can afford to buy crap from another multi-Billionaire with money they are able to borrow at 3% doesn't tell you anything real about the economy.  

    What is real is the Shanghai dropping 1.62% today, finishing at the low, just over 2,000.  What kind of moron would ignore something that significant going on in the World's 2nd-largest economy?  Oh yeah, US investors, apparently…

    Hang Seng was down 0.4%, Nikkei down 1% but /NKD back to 14,300 and now bouncing back to the middle of that channel again.  India held on flat and Singapore was down 0.75%, also finishing at the day's low. 

    Things turned around in Europe on M&A deals and those markets are up 1%.  Don't forget, we discussed last week how the Banksters control the timing of M&As, so they use them to manipulate the markets and this is just the same pattern of bumping up the  Futures and selling off into the retail buying frenzy once they trip the bottom-fishers.  

    And, of course, the Dollar has been slammed down (also the usual manipulation) to 79.6, Oil is $101.30, gold $1,302, silver $19.63 (/SI) is a buy if they cross over $19.65 again or on a bounce off $19.60, copper fell sharply to $3.09, Nat gas $4.68 and gasoline $3.075.

    /YM is shortable at 16,400 with tight stops above, /ES at 1,870 /NQ 3,550 and 1,125 on the RUT will confirm but Dow still my favorite short.

    Russian Markets Have Worst Week Since Crimea as S&P Cuts RatingRussian bonds and stocks suffered their worst weekly rout since mid-March as the truce forged to ease tension in eastern Ukraine unraveled, fueling concern that President Vladimir Putin faces stiffer international sanctions?

    Asian Stocks Fall Third Day as Russia Faces New Sanctions. Asian stocks fell for a third day, with the regional benchmark index heading for a two-week low, amid prospects Russia will be subject to new sanctions as tensions over Ukraine intensify. Honda Motor Co. sank 4.7 percent as Japan’s third-largest carmaker forecast a full-year profit that missed analysts’ estimates. Japan Display Inc. tumbled 11 percent after the supplier of screens for Apple Inc.’s iPhones posted operating profit and sales that fell short of expectations. Newcrest Mining Ltd., Australia’s largest gold producer, rose 3.8 percent as the bullion traded near a two-week high. The MSCI Asia Pacific Index lost 0.4 percent to 137.64 as of 9:31 a.m. in Tokyo, with nine of 10 industry groups falling.

    China’s Hebei Reports Growth Slump on Capacity, Pollution CurbsChina’s Hebei province said economic expansion slumped to 4.2 percent in the first quarter from a year earlier, as steel output fell and factories closed amid government efforts to clean up the environment. The increase in gross domestic product compares with national growth of 7.4 percent and the province’s previously reported 9.1 percent pace a year earlier. Hebei’s industrial output rose 3.5 percent in the first three months, down from 12 percent a year earlier, as the province pursued “structural changes to its growth model,” according to a statement on the government’s website dated April 23. The slowdown in Hebei’s expansion underscores the impact of the government’s campaign to reduce industrial overcapacity and contamination of the environment in the world’s second-biggest economy. Premier Li Keqiang said last month he will “declare war” on pollution and pledged to reduce emissions, impose a ceiling on energy consumption and boost clean-water supplies.

    Chinese Stocks Fall to Five-Week Low on IPO Concerns, China Life. China’s stocks fell, sending the benchmark index to a five-week low, after the nation’s biggest life insurer reported a drop in profit and concern grew that new share sales will divert funds. China Life Insurance Co. tumbled the most in six weeks after first-quarter profit slid 28 percent. China International Marine Containers (Group) Co. lost 2.1 percent after net income dropped 42 percent. Huayi Brothers Media Corp. plunged 4.1 percent, dragging down the ChiNext index of small-cap shares. The Shanghai Composite Index (SHCOMP) fell for a fourth day, losing 1 percent to 2,016.41 at 9:57 a.m. and heading for the lowest close since March 20.

    IMF Says Asia Must Pursue Structural Changes Amid VolatilityAsian policy makers must push ahead with structural changes to ensure the region continues to lead global growth and withstand volatility as the U.S. reduces monetary stimulus, the International Monetary Fund said. Asian economies will face higher interest rates and bouts of volatility in capital flows and asset prices as global liquidity tightens amid a recovery in advanced nations, the Washington-based lender said in its Regional Economic Outlook for Asia and Pacific released today.

    Saudi Arabia Reports Eight More Deaths in MERS OutbreakSaudi Arabia reported eight more deaths from Middle East Respiratory Syndrome as the number of cases in the outbreak climbed to 339.

    CODE RED: Central Banks Will Frantically Pound The Panic Button And Eventually Become Executioners To The World's Currencies.


  211. Which /SI does Phil look at here?  On IB I get to choose the 1000x or 5000x contract.  

    /SIM4 (5000x) or /SILM4 (1000x)


  212. Burr/SI   I only see volume in SI Jul19´14  the other has not, I´m long 19.65 in the Jul. one


  213. Just the standard contract on TOS, /SIN4 is, I believe, the July mini.  It pays $50 per penny and has a pretty high, $9,900 per contract margin requirement so, not the kind of thing you want to get wrong – which is why I rarely call it.  

    It did just hit $19.60 though and now $19.61 for a quick $500 but take that stop line (below $19.60) very seriously on /SI


  214. In fact, the Dollar bounced off $79.60 and gold failed $1,300 so game off on /SI until/unless those reverse.  


  215. LOL, now over $19.62 – they were waiting for us to get out…


  216. Thanks.  IB has lots of options, but sometimes it makes it confusing.  On IB I can still select the May and June future.