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Faltering Thursday – Trouble at the Top?

Now what? 

Options expire on Friday and last expiration day (4/18), we were 2.5% higher on the Russell and Nasdaq , which is about how much higher the Dow, S&P and NYSE are from where they were at the time.  

It's been an interesting month watching our indexes diverge but, as we discussed in our Tug Boat Example last week, this sort of behavoir simply doesn't last very long.  The end of that discussion (last Thursday) was:

NYSE 10,000 was clearly the right line and 10,500 is the 5% line and 10,750 is 7.5% with the NYSE now at 10,667.  Another reason we don't move the Must Hold lines is the NYSE has given no indication at all that it will be able to go over 11,000 (10% line) and we're back the tugboat that holds the others back.

 

RUT 1,100 is the 10% line and 1,200 is the 20% line and the RUT moves like the only thing trading it is a computer running on the 5% Rule.  Complete obedience of the lines makes it fantastic to trade – except the direction it moves is quick and seemingly random!  Still, 1,100 is a very good floor (so bullish above) and 1,200 has been too hard to hold (so short below) and, at the moment, it's fallen into the lowest quadrant of that range – not able to stay over 1,125.  That indicates a downward bias as it makes a triangle squeezy thingy down there (and it's below the 200 dma at 1,115 at the moment).  

 

So, either the RUT comes out of the triangle squeezy thingy to the downside and drags the others with it or the Dow, NYSE and S&P pop over their resistance and bring the RUT along for the ride.  Interesting times indeed…

RUT WEEKLYAs you can see from Dave Fry's Russell Chart, the RUT resolved it's triangle sqeezy thingy to the downside – after the requisite head-fake and now we're back to the good old 1,100 line, where we're happy to go long again if it holds on the /TF Futures (with tight stops below).  

We've moved our main hedges already from TZA (ultra-short Russell) to DXD (ultra-short Dow) since the Dow has a lot more room to fall from it's loft new heights

Finding fresh horses is one of the things we like to teach our Members to do at Philstockworld.  We already rode the Russell horse down from 1,200 to 1,000 – it's tired now but the Dow was over 16,700 when we added our shorts this week, almost 10% over the year's low at 15,400 – a juicy short indeed!  

INDU WEEKLY

I know, I sound like a broken record warning you not to trust the rally and calling for cash but if you don't believe me, how about listening to the highest-earning hedge fund manager of 2013?  David Tepper gave the keynote speech at the SALT Conference last night and his opening comments to top hedge fund managers and investors were my opening comments to you this motth (plagurism forgiven):

"I think we're OK. But, listen, there's times to make money and there's times not to lose money. This is probably you're supposed to think about preserving some of your money…I think you can still be long, but I think you're supposed to have some cash now."

"I am nervous. I think it's nervous time."

 

He said the market is probably OK. "But it's getting dangerous."

Anthony Scaramucci asked for any opportunities that are glaring.

Nothing.

 

"I'm not saying go short. Just don't go too friggin long."

Hmm, now where have we hear that before?  Tepper couldn't say "Cashy and Cautious" without sending me 15 cents first but you get the gist of it.  He pointed to the Central Banks. He has a new phase for Central Banks - "Coordinated complacency…the market's kind of dangerous in a way.  I think the ECB…they better ease in June. I don't know how far they are behind the curve…We are a fairly leveraged world…I'm not so keen about deflationary forces."

I can only tell you the same thing as the top hedge fund manager in the World tells you a month before he tells anyone else (probably at the same time as he was acting to reduce his own positions).  What you do with that information is up to you.  Internally, we reviewed all 5 of our Member Portfolios in yesterday's Live Chat Room and. so far, we're outperforming Tepper by an average of 8% this year – not too shabby!  

Yesterday morning, we began our day in Chat shorting all the Futures at Dow 16,650 (/YM), S&P 1,890 (/ES), Nasdaq 3,600 (/NQ) and Russell 1,110 (/TF) and the Russell was our big winner with a $1,000 per contract gain during the day while the other indexes as well as oil (/CL) gave us $500 per contract gains.  Just because we're mainly in cash, doesn't mean we can't have a little fun.

On Friday, I listed a few stocks we are buying in the morning post and this week, we went over 9 trade ideas (so far) on some of our favorite bottom-fishing plays and, of course, we made our portfolio adjustments as well – still generally bullish for the long-term but, as Tepper says, there's simply not a lot to buy at these prices.  

SPX WEEKLYEurope had weak GDP numbers this morning (0.8% growth) and China is still falling apart and Russia is still pushing into the Ukraine – ignore these things at your peril!  As I keep saying as we drift along the top of the S&P range – I'll be very happy to get more bullish AFTER we break out to new highs over 1,900 but, until then – CASH!!! makes me more comfortable.  

While we sit at the sidelines, we can still make a few bucks trading on earnings and news, of course.  Last Thursday, for free, right in the morning post, I suggested buying 2 TSLA 2016 $220/300 bull call spreads for $20 ($4,000), selling 2 2016 $140 puts for $22 ($4,400) and selling 3 Sept $200 calls for $26.50 ($7,950) for a net $8,350 credit. 

  • We had a great oppen with TSLA spiking up to $194 making easy fills, even after the earnings news but, as we expected, the excitement died down and now they are stuck at $190 and the bull call spread is $17.30 ($3,460) and the short $140 puts are $21.70 ($4,340) and the Sept $200 calls are $17.50 ($5,250) for a net credit of $6,130 – up $2,220 (26%) in just 7 days.  
  • In the previous day's post, we had 4 FSLR Jan $77.50/85 bull call spreads at $2 ($800), selling 5 July $75 calls for $3 ($1,500) as another bearish earnings play.  FSLR dove to $62 and already the July $75 calls are down to $1.03 ($515) and the Jan spread is down to $1.30 ($520) but that net's out to -$5 if we wanted to close the trade now and we had a $700 credit so $695 profit is a 99% gain in 7 days.   

This is why David Tepper and I don't mind going to cash – there's always something fun we can trade! 

 


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  1. Oil Lines

    R3 – 103.33
    R2 – 103
    R1 – 102.55
    PP – 102.21
    S1 – 101.77
    S2 – 101.43
    S3 – 100.99

    Tight range today!


  2. Apparently it's hurting Putin's wallet a bit now:

    http://qz.com/209718/putin-hopes-china-can-solve-russias-budget-woes-but-hes-in-for-more-misery/

    Now, Putin appears to have blinked in his negotiations with China, as the Ukraine crisis has given Europe even more reasons to diversify away from Russia. In a report to clients, political risk firm Eurasia Group says it expects a deal—if it closes—to price out at current European rates of $10 to $11 per 1,000 cubic feet of gas. Given the cost of pipeline construction, Gazprom requires at least $12 per 1,000 cubic feet to break even. The gap will likely be closed through China’s usual method of a gargantuan up-front payment.[...]

    And Putin’s headaches from US shale don’t stop there—it has also pushed out all but a trickle of high-quality Nigerian light crude from the US market, and that oil will instead flow to Asian customers and exert downward pressure on prices for the rest of the year, according to JP Morgan analysts. That will, in turn, hurt the Russian budget, which relies on oil and gas exports for more than half its revenue.


  3. Good Morning!


  4. Putin – I'm optimistic, that economics can keep this freak in a box…..


  5. Good morning!  

    writing-a-blog-post.jpg


  6. This was cool, a cat saved a kid from a dog:


  7. They could use a 'cat' like that in the Whitehouse….. :)


  8. Good morning!  Still feel like I am camping, as the smell in the air ain't ocean!


  9. Another weak open – this is a real change in the pattern.  RUT 1,091 (/TF) already, Dow (/YM) testing 16,500.  

    Oil $101.85.  

    Industrial Production was a disaster and CPI is not keeping up with PPI, so margin squeezes ahead (duh!).   Seriously, this stuff comes as a total surprise to most analysts – yet they still have jobs.  In the real world you get fired for not having a clue what's going on with the things you are assigned to watch:

    • Dow -0.26% to 16571. S&P -0.25% to 1884. Nasdaq -0.18% to 4093.
    • Treasurys: 30-year +0.38%. 10-yr +0.11%. 5-yr +0.01%.
    • Commodities: Crude -0.45% to $101.91. Gold -0.77% to $1295.8.
    • Currencies: Euro -0.31% vs. dollar. Yen -0.08%. Pound -0.07%.
    • Apr. Industrial Production: -0.6% vs. 0.0% consensus, +0.9% prior (revised).
    • Capacity utilization 78.6% vs. 79.2% consensus; 79.3% prior (revised).
    • Net foreign outflow of long-term U.S. securities were $126.1B, with net outflows by private foreign investors of $115.5B and net outflows by foreign official institutions at $10.6B.
    • Taking into account both foreign and U.S. securities, the net foreign purchases of long-term securities were $4B vs. $90.3B (revised) prior.
    • Foreigners increased their holdings of U.S. T-bills by $9.3B.
    • Report
    • Initial Jobless Claims-24K to 297K vs. 317K consensus, 321K prior (revised) (319K prior).
    • Continuing claims -9K to 2.66M.
    • Wal-Mart (WMT) says severe weather in the U.S. cut into EPS by approximately $0.03 inQ1.
    • Comparable-store sales growth in the U.S. was flat for the period.
    • Global e-commerce sales rose 27%.
    • Segment revenue growth: Walmart U.S. +2.0% to $67,85B; Walmart International -1.4% to $32.42B; Sams Club +0.1% to $13.89B.
    • The company sets Q2 EPS guidance at $1.15-$1.25 vs. $1.28 consensus.
    • WMT -2.8% premarket
    • Generating store traffic in the U.S. was an issue for Wal-Mart (WMT) during Q1. Traffic fell 1.4% during the period, partially offset by a 1.3% boost in the average ticket of customers. E-commerce added 30 bps to the comp during the period.
    • Inventory growth of 5% outpaced the rate the company grew sales by 430 bps.
    • Comparable-store sales growth for the Neighborhood Market format rose by close to 5%.
    • Sam's Club showed a drop in comp sales of 0.5%.
    • Walmart International was the only segment to grow profits during the quarter with a 3.4% gain in operating income to $1.20B.
    • WMT -2.8% premarket
    • Kohl's (KSS): Q1 EPS of $0.60 misses by $0.03.
    • Revenue of $4.07B (-3.1% Y/Y) misses by $150M.
    • Press Release

  10. LOL, I just realized I posted a cat video!  Now I can't make fun of those people… 

    Putin/StJ – Would be nice if they capitulate and oil drops like a rock.  

    Speaking of oil – we just stopped out after testing $101.50.  Next short is below that line or back at $102 or rejection at $101.75 if you trust yourself to be quick.  

    There goes 16,500 on /YM.  Cramer almost comical to listen to, pulling out obscure companies with great growth to "prove" his point of how things are actually going great and retailers should ride out the dip in the market (so his hedge fund buddies can dump on their asses).  It's criminal!  


  11. Anyone else on IB having issues getting quote of /CL jun futures?  I can't get any.  I see all other /CL future months.  Quite annoying.


  12. my ib /cl jun futures working a ok


  13. TLT 114, VIX popping to 13.33 (up 10% in a day).  

    /NKD testing 14,200, bad if that breaks.  1,870 holding on /ES so far, as is 1,080 on /TF and 16,450 on /YM.  

    Gold back to $1,300, silver dropped all the way back to $19.40 and now $19.61, trying to spike out the longs, I think.  Copper didn't like the data, down to $3.14, nat gas $4.34 with inventories coming up and gasoline dove back to $2.95.

    Philly Fed not terrible at 15.4 but Homebuilders Index a disaster at 45!  

     


  14. SPY Puts…..mmuuuuuuuuuahhhhhaaaahhhhh! 


  15. GLD – June 120 Ps…..52c.  20 of 'em.


  16. Phil Business in Idaho Falls

    Had to go to my nearest city yesterday for welding stainless steel, as It is often months I like Wall Marts cat litter, great video BTW, and also mole killer to save my garden. Local nursery sells scram and moles laugh at you, sucker spent $40, washes away when you water the plants. Point is the store looked like Sears or Kmart with empty shelves, no lines at 3 checkouts, How can they keep the doors open. Home depot empty! There was more business in 2009. Noticed propane is down to $1.99 per gallon from $5.00 in the winter. Seems recession is already on us.


  17. Pharm

    Tesaro, Inc. (TSRO), what do think of them

     

    Thanks


  18. IWM has dropped below it's last few stopping points, some support at 107.4.


  19. Once again, muddy numbers – bad industrial production, better job numbers and OK Philly fed and great Empire State survey. How can you make a final decision based on that…


  20. Why do we not have XRT puts?  How could we have forgotten those?  

    Recession/Shadow – I'd say bottom 80% is clearly in a recession in this country – it's just ignored by the top 10% completely because, for the most part, we don't live there.  At least I was able (I hope) to warn the people who follow me here and I know that makes me come off like some crazy liberal because I actually worry about what's happening to the bottom 4/5ths of the people in this country – but it's also good investing advice.  

    There's only so long you can ignore these issues before they come back an bite you in the ass.  

    • The average rate for a 30-year fixed-rate mortgage ticked down to 4.20% – the lowest rate since November - from 4.21% in the prior week, according to the latest Freddie Mac survey; a year ago, the 30-year rate averaged 3.51%.
    • The average rate for the 15-year fixed-rate mortgage fell to 3.29% from 3.32% in the prior week; a year ago, the 15-year rate averaged 2.69%.

  21. TSRO/qc – Their Pipeline:

    Rolapitant is a potent, highly selective, long-acting NK-1 receptor antagonist currently being developed for the prevention of CINV. -   Uuummmmm…MRK, PFE, and many others have one of these ON THE MARKET.  So, u do the math.

    Niraparib is an orally active and potent poly (ADP-ribose) polymerase, or PARP, inhibitor, currently being studied for the treatment of ovarian and breast cancers.  7 companies in clinical trial, 2 in Phase 3.  They are not one of them.  It is a race, but the big guns are right there with them.  So, risky.

    TSR-011 is a potent, orally available ALK (anaplastic lymphoma kinase) inhibitor, with potential applications in a variety of oncology indications. 10 compounds in trials, w/ 2 on the market.  So, I ask 'what differentiates them from the others?'  ARIA, PFE, NVS, Chuga, etc are all on this one.  NVS and PFE are on the market.


  22. It was the weather…

    http://www.bespokeinvest.com/thinkbig/2014/5/15/utilities-drag-down-industrial-production.html

    While the improved weather was supposed to help economic data, today's Industrial Production (IP) report for the month of April came in significantly weaker than expected.  While economists were expecting IP to be unchanged from March, the actual reading showed a decline of 0.6%.  This was the biggest miss relative to expectations since November 2012.

    Looking at the internals of the report, the big culprit behind April's miss was a huge drop in the Utilities sector where output fell by 5.3%.  While most of the economy was hurt by the cold weather, and saw improvement as the weather improved, the opposite was the case in the Utilities sector, where harsh winter weather increased demand and the spring thaw led to less demand.  For the month of April, production in the sector fell by 5.3%, which was its largest monthly decline since January 2006 and the fourth largest monthly decline on record. 


  23. Phil // Ports
    Taking discussion offline if you wish – don't want to clog up the boards. Just say 'yes' or 'no'.


  24. Thanks Pharm (TSRO),  for your help  looks like a me too company


  25. Phil// Do you recommend initiating any positions on XRT?


  26. Do we think 70 is still a good bottom for WMT?


  27. In the STP, let's roll our 5 CMG June $515 calls ($8.20) to the $465/495 bull call spread at $10.80 and DD so we'll have 5 at $22-$8.20+$10.80 = $24.60 + 5 more at $10.80 = 10 at average $17.70 on the $30 spread that's $30 in the money and we also sold 5 Jan $280 puts for $10, so that knocks $5 off the average too (assuming it works out, of course).  


  28. Phil // DIA
    great call on the DIA $161 puts – +50% in a day 
    cash 'em of let em ride ?

    ( still have DXD )


  29. Utilities/StJ – That's a pretty good excuse. 

    Ports/Wombat – Send me an Email.

    XRT/Rookie – No it did it's drop from our usual $85 shorting spot this week and we missed it.  That really sucks though.  

    WMT/Burr – Yes, it probably is but first they have to get past the 200 dma at $75.  If that holds into next week, you may want to consider selling something like the 2016 $70 puts, now $3.75.  

    DIA/Wombat – Depends why you bought them.  If it was a trade, then you are a greedy bastard for even asking.  We have a Rule #1 (which you are obviously ignoring) and a Rule #2 (which you are ignoring so far) and, as I'm sure you know, Rule #3 is:  "If you have already read and disobeyed Rule #1 and Rule #2, why do you even bother asking me since you obviously don't listen to what I say you stupid, greedy bastard!"   If, on the other hand, it's a hedge, I'd just put a sensible stop on 1/2 at 40% and stop the other half at 20%.  

    Or, as I said yesterday:

    DIA/Sibe – The point of buying the DIA June $161 puts for $1 isn't because we expect the Dow to be below $160 on June 20th, it's because we expect it to track AHEAD of that curve between now and then.  For that trade to win, the Dow has to drop 650 points in 37 days or about 20 points a day on average.  So the bet we're making is that the Dow will be down more than 60 points by the end of the week (below 16,600) or more than 200 points by next week (below 16,450) and we should have a winner. 


  30. CMG/Phil-which month are you rolling to in the BCS ?


  31. CMG/STP, Craigs – Same month, June.  

    Actually, looking at the charts, we're bouncy here so I'd certainly take quick profits on short positions like the DIA puts off the table and put stops on spreads like DXD if the Dow gets back over 16,500.  We can always add a new spread later.  


  32. qc – many biotechs are. The question is:  is it novel?  I want compelling information that me too drugs are better than the last.  Insurance and the FDA are going to make things very difficult….


  33. I must add yet another paen to Phil's "cash and short" call, as my TZA shorts are past paying for Similac and Pampers and have now covered all doctors and Mt. Sinai hospital bills for young Charlotte, as TZA took the portfolio up 10%.  Cashy and cautious indeed.  Now what, sensei — below 11000 Russell, dare we go long?


  34. Home builders losing confidence in recovery

    A monthly confidence index from the National Association of Home Builders slipped one point from a downwardly revised April figure.

    Read more: http://www.cnbc.com/id/101675736

    Sent from the CNBC app. Available for iPhone
    and iPad


  35. From Bloomberg, May 14, 2014, 9:29:10 PM

    Samsung Electronics Co.’s Galaxy S5 smartphone, left, and Apple Inc. iPhone 5c. Photographer: Brent Lewin/Bloomberg

    The main battleground between Samsung
    Electronics Co. (005930)
    and Apple Inc. (AAPL) in the global smartphone market
    is moving from courtrooms to the laboratory, amid a race for
    patents on atom-thick technology for the next generation of
    devices.

    To read the entire article, go to http://www.bloomberg.com/news/2014-05-15/samsung-apple-smartphone-battleground-is-single-atom-thick-tech.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  36. From Bloomberg, May 15, 2014, 10:42:01 AM


    Traders work on the floor of the New York Stock Exchange on May 13, 2014. Photographer: Spencer Platt/Getty Images

    U.S. stocks fell, with the Russell 2000 Index poised for a 10 percent retreat from its March high, after data showing an unexpected decline in industrial production fueled concern about the strength of the economy.

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


  37. From Bloomberg, May 15, 2014, 9:09:31 AM

    A Costco Wholesale Corp. store in Hackensack, New Jersey. Photographer: Ron Antonelli/Bloomberg

    The cost of living in the U.S. rose in April by the most in almost a year, a sign inflation may pick up as demand in the world’s largest economy recovers from a weak first quarter.

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


  38. From Bloomberg, May 15, 2014, 5:44:35 AM


    Germany, the euro area’s largest economy, led the first quarter expansion, with GDP up 0.8 percent, beating economists’ forecasts. Photographer: Krisztian Bocsi/Bloomberg

    The euro-area recovery failed to gather momentum last quarter, as France unexpectedly stalled and economies from Italy to the Netherlands shrank.

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


  39. From Bloomberg, May 15, 2014, 10:25:00 AM

    Russia’s first-quarter economic
    growth slowed to the weakest in a year as the standoff against
    the U.S. and its allies over Ukraine shrivels up investment.

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


  40. EXEL/Pharm    They announced today -10 presentations at ASCO.   Seems very positive.  Sell more puts?


  41. From Bloomberg, May 15, 2014, 12:01:00 AM

    Trucks line up to make deliveries at the Port of Oakland on Feb. 18, 2014 in California. Photographer: Justin Sullivan/Getty Images

    Trucking companies are increasing their bets on the U.S. economy picking up speed.

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


  42. From Bloomberg, May 15, 2014, 10:02:03 AM

    New Jersey surpassed Florida with the
    highest share of U.S. mortgages in foreclosure in the first
    quarter as delinquencies fell to pre-crisis levels.

    To read the entire article, go to http://bloom.bg/1nO56Nv
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  43. From Bloomberg, May 15, 2014, 5:08:59 AM


    Bank of England Governor Mark Carney. Photographer: Simon Dawson/Bloomberg

    Pound bulls still have reason to be
    optimistic following the Bank of England’s attempts to temper
    interest-rate expectations, according to firms from Bank of New
    York
    Mellon to Mizuho Bank Ltd.

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


  44. From Bloomberg, May 14, 2014, 2:18:11 PM

    Recent surveys have shown almost a third of bees in an estimated 2.6 million colonies fail to survive the winter dormant season. Photographer: Simon Dawson/Bloomberg

    Two years ago, Steve McDaniel’s bees
    started dropping like flies.

    To read the entire article, go to http://www.bloomberg.com/news/2014-05-14/bee-deaths-prompt-calls-for-u-s-to-ban-some-pesticides.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  45. Amazon to debut three original kids series

    10:48 AM ET · AMZN

    • Amazon (AMZN -1.4%) announces the launch dates of three series aimed at children audiences on Prime Instant Video.
    • Tumble Leaf airs May 23.
    • Creative Galaxy comes June 27.
    • Annedroids premieres on July 25.
    • What to watch: The company is taking a different approach to drawing in children viewers to its streaming service than Netflix by passing on paying for well-known franchise character shows.


  46. Heard during Disney’s media conference chat

    10:39 AM ET · DIS

    • Disney (DIS -1.7%) CFO Jay Rasulo held a wide-ranging Q&A session at the MoffettNathanson Media & Communications Summit Conference.
    • The exec says the acquisition strategy (Pixar, Marvel, Lucasfilm, Maker) of the company sets it up to see payoffs on different trajectories and time-frames. Some of the “inflection points” are arriving earlier than forecast.
    • Rasulo sees an enormous opportunity with pushing Disney’s IP into the Maker YouTube network. Creating native advertising directly with Maker will remove some of the third party cuts.
    • ESPN will see some back-half cost increases due to new NFL and MLB contracts which kick in. The relaunch of A&E network The Biography Channel to FYI will also cut into margins during the period. The guidance from the company is for high single-digit operating income growth from the cable networks business.
    • Conference Q&A transcript


  47. Plug Power +3.9% as Cowen upgrades, sees profitability by Q4

    10:34 AM ET · PLUG

    • Plug Power (PLUG +3.9%) shares recapture a chunk of yesterday’s 7% reality check after reporting another quarter of losses, as Cowen analysts upgrade PLUG to Outperform from Market Perform.
    • The upgrade follows a factory tour yesterday citing a high level of activity, strong YTD bookings of $80M – twice the 2013 level – that should lead to a steep ramp in Q2 and profitability in Q4, and a strong cash position; however, higher expenses prompt Cowen to lower its price target to $6 from $7.50.
    • Roth Capital keeps its Neutral rating and $3.75 price target on the stock, saying long-term opportunities are encouraging but advising focus on near-term execution first.


  48. EIA Natural Gas Inventory

    10:31 AM ET


  49. Crocs on the move after upgrade

    09:57 AM ET · CROX

    • Crocs (CROX +0.4%) gets a lift from a rousing upgrade from CL King.
    • Shares are now rated a Strong Buy after being stuck on Neutral.
    • CL King has a solid reputation for its read on the footwear category.


  50. Revenue strong at Manchester United despite 7th place finish

    09:31 AM ET · MANU

    • Manchester United (MANU) discloses the failure of the club to qualify for competition in Europe next season (Champions League or Europa) will cost the company £30M ($50.3M).
    • Matchday revenue in grew 9.1% in FQ3 despite the club’s slip from the top of the standings. Broadcast revenue was strong with a 64% Y/Y rise due to some extra games and new rights deals.


  51. EXEL – well, they are cheap.  But are they cheap enough?  Worth a shot in here, but smart small.


  52. EXEL – How about stock with the Nov $4.5/2.5 STO C/P combo for net $2.25.


  53. CMG/Phil  For the STP CMG roll, I am seeing the JUNE $465/495 bull call spared trading at ~$20 instead of $10.80.  Am I looking at the wrong thing?  Thx.


  54. Jobless claims (NSA) are getting back to normal it seems:

    http://www.bespokeinvest.com/thinkbig/2014/5/15/jobless-claims-at-a-seven-year-low.html

    Now, it's down to the jobs people are getting… And people on minimum wage lost over 10% of buying power in these 7 years!

    And BTW, when politicians tell you that they used to work for minimum wage when they were kids, tell them that you want to get the same deal they got back then:


  55. Phil/Pharm

    You think it would be a good idea to sell puts on AstraZeneca PLC (AZN), given the takeover talks

     Thanks


  56. Congrats ZZ!  See, I told you you didn't miss anything.  As to going long – no reason to.  A quick couple of bucks in the Futures off the weak bounces but, on the whole, not very bouncy so far.  

    CMG/StP, Bshing – I'm sorry, that's my mistake, we'll have to make that the Sept $465 ($52)/$495 ($36) bull call spread at $16 instead.  Same DD at $16.  

    Minimum wage/StJ – That's the thing, our generation, who worked for minimum wage between 1960 and 1975 made pretty good money at the time.  That's what warps the views of people who are our age now and think back and don't understand that THIS minimum wage is not the minimum wage we used to be able to live on – even though it sounds better.  Also, the inflation data is way understated because health care costs used to be covered by minimum wage jobs as well – and then you got bonuses and overtime!  Imagine that…

    AZN/QC – Well, if the takeover falls through, especially if it's because of some problem uncovered at AZN, you will be in for a great deal of pain.  I'm surprised you can still get an OK premium for the long puts – you can sell the 2016 $70 puts for $4.50 and net in for $65.50 , which is about where they were before this nonsense began.  As long as you seriously want to own AZN back at $65 for the long haul – it's free money and, if the deal goes through, it cancels out early and you get paid in full.  


  57. Peter, do you have any new spx straddles?

    thx


  58. DIA June $161 puts at $1.40 is plenty to take off the table as /YM holds 16,400 and the Dow is at 16,432.  

    Our DXD play was the July $25/28 bull call spread at $1.10 and that's only up to $1.30 – so much less exciting than the  calls but, if you take the .50 we made on the calls, then the net of the bull call spread drops to .60 and that can now be the stop while we wait to see if the Dow recovers and we have free insurance!  

    Oil $101.50!  Still looks like it wants to go lower.

    RUT down 5% in 3 days – that's nasty.  That means a 1% bounce (18 points) to 1,098 is weak and we round that to 1,100 and 1,120 – still the same lines we always look at. 

    Nat gas head-faked down to 4.28 and then rocketed back to $4.50 – this is why I don't like playing it!  

    /SI makes a nice long at the $19.50 line with super-tight stops below.  

    VIX 13.50.


  59. Gotta like playing /TF long at 1,080, just for the small bounce.  


  60. Phil,

    RRD continues to drop and the protection I had from my entry (which exactly timed their start down, of course)  is now exceeded.  I am prepared to scale in and would like your thoughts on what to watch to pick an entry. 


  61. Phil,

     I have the May DXD $27 calls that expire tomorrow, which I sort of forgot about. Does it pay to roll them or something?


  62. Phil / AA – I purchased 1,200 shares of AA at $8.76 (now $13.20) and sold 12 Jan15 calls @ $10 for $0.78 (now $3.45) and sold 12 Jan15 puts @ $10 for $2.28 (now $0.20) some time ago. I'm happy to leave the calls until the time premium burns off further, but curious about the puts. 1) I can leave them to burn further, 2) roll the puts out to 2016 and a $12 strike or 3) buy the puts back and wait for a better opportunity to sell the Jan16 $12 puts for something around $2.00. 

    I'm happy with the protection the ITM calls provide and the current puts no longer offer an attractive return at the current prices….. Thank you for the insights…


  63. FCC backs neutrality proposal; Wheeler open to tougher rules • 12:13 PM

    By a 3-2 vote, the FCC has backed chairman Tom Wheeler's neutrality proposal. As previously reported, the proposal doesn't stop ISPs from creating pay-for-priority deals with content providers (fiercely opposed by neutrality supporters), but does seek comment on whether they should be banned.

    The proposal also calls for creating an ombudsman to represent the interests of Web users, and for holding ISPs to service minimums. Moreover, it suggests re-evaluating the looser neutrality rules mobile carriers have been subject to.

    Notably, Wheeler (no doubt sensitive to the public backlash to his past remarks) stated during the FCC's hearing (live blog) he's open to regulating ISPs as common carriers (something they've strongly opposed). The commission seeks comment on what rules it should use to enforce neutrality.

    Initial comments on the proposal can be submitted until July 15, and reply comments until September 10.

    Netflix (NFLX -2.5%), which has pushed for tougher neutrality rules even as it agrees to direct peering deals in the near-term to guarantee service quality, is following the market lower. The FCC vote comes as Sandvine reports Netflix has accounted for 34% of North American peak downstream traffic in 2014, up from 32% six months ago.


  64. wow .. vix not even at 14 (yet)


  65. that's a lot of red out there..!


  66. Speaking of triangle squeeze thingys, don't the Dow and S&P look like a rising one?  I do appreciate the wider breadth of the RUT and Q but the reality is that most funds benchmark themselves against the S&P.  I think that sets us up for a "blow off top"…still "cashy and cautious" though….Phil, your 15 cents is in the mail


  67. SINA is a top pick being bought on weakness.


  68. CORN – i'm surprised with this breakdown today. Just last week USDA report was lower supply and "better than expected" demand.


  69. Time to BTFD?  $DJI down to trendline it's hid several times in last couple months on 3/14, 4/8, 4/28, 5/7 and now today. One dip under for 3 days before april 15.


  70.  Frankfurter Allgemeine Zeitung:

        Merkel Says Euro Crisis Not Over, Warns of 'Deceptive Calm'. German Chancellor Angela Merkel in interview says she shares the assessment of IMF Managing Director Christine Lagarde, who has warned of a "deceptive calm" in financial markets and flagging zeal for reforms in Europe.
     

      http://www.bloomberg.com/news/2014-05-15/stubborn-bond-bears-double-down-on-money-losing-wager.html
     

     hedgie herd…


  71. RRD/Sibe – Well, step one is wait for them to stop falling and THEN we look at what to roll to.  There's no new news, this is the same drop.  

    DXD/Kevin – You should be thrilled they popped to .25 today.  I wouldn't chase, Dow should get a bounce here into expirations, maybe back to 16,500.  

    AA/Eric – So you have a $10 buy/write at net $5.70/7.85 and you will get called away in Jan for $10 and make $4.30 (75%).  You wish to avoid this somehow so you could roll the short $10 caller ($3.40) to the 2016 $12 puts and calls at $3.95 and that lowers your net another .55 to $5.15/8.58 and then, if you get called away at $12, you will make $6.85 or 133% for extending it another year (if all goes well).   So you are trading in your bird in the hand for 1.6 in the bush – not terrible if you don't have anything better to do with the $10 you could pocket in Jan if called away.  I'd cash out the stock now ($13.21), buy back the Jan $10 caller fro $3.40 to net $9.81 back in pocket and roll the short Jan $10 puts (.23) to the 2016 $12 puts ($1.40) and, if you end up getting assigned, you are back in at net $10.60 or you get another $1.40 for a total of $11.20, which is about the most you'd make screwing around with the stock for another 18 months anyway.  Hopefully, you can find a stock that is actually cheap to spend your $9.80 on between now and then instead of buying more AA at 50% more than the price that you liked them at.   That's minus tax consideration, of course!  

    1,085 on /TF - that's good for a quick $500!  Gotta love that 5% Rule…

    Neutrality/Jabob – I can't see how that's a win for NFLX.  

    Thingies/Cdel – Thanks, now I can buy some gum!  The fact that funds benchmark to the majors is exactly why they are manipulated.  The whole system has been designed and directed that way for decades until we have this easy-to-manipulate joke of a market that forces retail investors into the worst possible deals on a daily basis while the people pulling the strings have their TradeBots rob you.  There's a reason JPM and GS go a whole year without a losing day – they're not gambling – they're being the house.  

    CORN/Scott – To some extent, I think they are flushing out the weak hands.  Corn went up almost 20% between Jan and April and look what it did to sales:

    People are just too poor to keep buying things when they get more expensive – they switch to whatever is cheaper very quickly.  Still, at a certain point, the stockpiles dwindle and must be refilled so I think CORN holds the 20 dma at $33 and heads back up from here.  

    BTFD/Scott – Well it's worked every other time but I'm happier with the RUT long for $500 and then right back to cash.  One of these days, that line won't hold and everyone will begin to bail.  Of course, Yellen may save the day later too.  

    • Coming in the same week when the Dow and S&P 500 hit new record highs, the Russell 2000 (IWM -1.6%) today tumbled into correction territory, now off 10.2% since its record high hit on March 4.
    • The Dow (DIA -1%) and S&P (SPY -1.2%) haven't suffered a correction since 2011 H2, though the Nasdaq fell into correction in November 2012 (the tech index fell nearly 10% from March through mid-April this year, but bounced).
    • The question at hand is whether the large-cap averages will follow the Russell. or continue to go their own way to new records.
    • Ukraine says it is ready to pay Russia $4B for natural gas in exchange for an agreement to return to a lower price for the fuel, but its finance minister says his country won't make more concessions in the dispute over the price Russia is charging for gas.
    • Gazprom (OGZPY) raised the price to $485 per 1,000 cubic meters starting April, and says Ukraine owes $3.5B for gas through the end of that month.
    • Meanwhile, Russian President Putin reiterates that his country will only deliver gas to Ukraine if it pays in advance in cash starting from June, and that a meeting involving Russian, Ukrainian and EU officials had failed to settle the issue.
    • Shareholders at Chipotle (CMG -2.4%) rejected an executive compensation plan the company proposed at today's annual meeting.
    • A spokesperson for the company say the measure only received 23% of the vote.
    • Full voting details will be posted in a SEC filing.
    • Previous: Executive pay on the agenda at Chipotle annual meeting.
    • No less than 16 firms have upped their Cisco (CSCO +6.4%) PTs after the company beat depressed FQ4 estimates and offered better-than-expected guidance and order data. The hikes are generally in the $1-$2 range.
    • RBC (Outperform) thinks value investors might embrace Cisco as it returns to flat revenue growth and further cuts opex. "[Free cash flow] is predictable at $11B-$12B/yr; we look for Cisco to remain a dividend grower." After backing out ~$30B in net cash, Cisco currently goes for ~8x RBC's FCF target range.
    • Goldman (Buy) estimates Cisco's routing and switching numbers were respectively 8% and 2% above consensus, and is pleased with early uptake for the Nexus 9000/ACI SDN platform and NCS and CRS-X core routers.
    • Nonetheless, there are still plenty of concerns about long-term challenges. MKM (Neutral), which has already raised alarm bells about SDN threats: "Cisco seems to be benefiting from SDN in the near term, but the competitive landscape is set to become much more difficult over a 12+ month time frame."
    • Credit Suisse (Underperform) questions "the size and scope" of early Nexus 9000 deployments. "Our secular concern is that the impact of SDN will introduce more competition at multiple points in the network. While the impact will take time, the threat will be very real, shrinking gross profit dollars for the entire networking stack."
    • Shares are holding onto yesterday's AH gains in spite of a tech selloff.
    • More on Cisco's earnings
    • Fitch Ratings downgrades RadioShack's (RSH -0.7%) issuer default rating to CCC on the growing likelihood the company will need to restructure its debt.
    • Fitch on RSH: "Fitch is increasingly concerned about the RadioShack's ability to operate beyond 2014 given the significant cash burn in the business."

  72. Because predictions have been so accurate:

    http://www.capitalspectator.com/q22014-us-gdp-nowcast-2-8-5-15-2014/

    Economic growth slowed to a crawl in the first three months of this year, but a rebound is projected for the second quarter, according to The Capital Spectator’s median econometric nowcast. GDP is expected to rise 2.8% during the April-through-June period (real seasonally adjusted annual rate). This is an initial estimate that uses limited Q2 data and so the projection is a preliminary review that will be updated several times in the weeks ahead as new economic indicators are published and existing data are revised. The final nowcast for the quarter will be published shortly ahead of the official Q2:2014 GDP report. The US Bureau of Economic Analysis (BEA) is scheduled to release its “advance” Q2 estimate on July 30, 2014.

    gdp.A.15may2014


  73. MU – nice fall today right after last night's news that Einhorn and Klarman like it..

    http://www.valuewalk.com/2014/05/david-einhorn-seth-klarman-bubble/


  74. Any bond plays?  The bond indices look perky today, and I cannot imagine why anyone would see them as a safe haven, given that a stock selloff should stretch out QE-infinite even further.


  75. UNP/pwright – i'm happy to observe that UNP is not falling as much as indexes and our play is still about a 15% gain and still burning off premium with positive theta.


  76. scottmi true, my net is hardly even off at all, given $1.50 drop in the stock. 

    I'm wondering if market bounces back up from here, or keeps sinking.  It seems bouncy at the moment; I've got some hedges which I really ought to keep in place for insurance purposes, but it is tempting to cash.


  77. when in doubt, sell half, I guess would be the thing !


  78. Nice 25% gain on those NFLX puts already (I got in at 1.30).  


  79. I think I'll give them a few more days to see if we can get a complete retrace of this silly rally, back down to $315.


  80. Yodi re: SWI, did you get a fill on your short 2016 30 puts at $3.60?  I put in an order for 10, got filled on 1 but still waiting on the others.


  81. Anyone playing the RUT bounce, if as I watch IWM it doesn't blow past 108.8 level this time get out.


  82. MU/Scott – Too high for my tastes.  

    Bonds/ZZ – I think it's a really stupid place to put money.  Just a day after we get nasty inflation data too – I don't even get the mentality of bond buyers.  

    Dollar stuck on the 80 line.  

    NFLX/Palotay – There's one I think can do much better.  

    Murdoch/Diamond – I was talking about that in yesterday's post.  

    RUT/Shadow – Did I not call the RUT for a bounce of 1,180?  I'd say it's done now at 1,090, but it was sure fun for $1,000!  


  83. ~~pwright72

    SWI got filled at 3.60 today 10 AM this is always if you are patient.


  84. Phil yes you did I was just saying it looks done now. I wasn't in on it but assume some were.


  85. Phil /bonds — I was talking about shorting bond ETFs, which spiked today. But the bid/asked spread was too rich for the movement I would expect, no trade.


  86. How was that for a call at 11:58?:

    Gotta like playing /TF long at 1,080, just for the small bounce.  


  87. Done/Shadow – No pullback yet and we were expecting a move back to 1,100 (weak bounce).  Should have played TNA on that one.  

    Shorting/ZZ – I like the idea but, as you say, the spreads are too crazy and then you never no what the Central Banksters will do next.  TLT hasn't been this high since last March, when it topped out at 120, which was about the highs of 2012, so it's getting interesting now.  

    • Joe LaVorgna's forecasting has been less than on point for awhile, but every dart thrower hits the bullseye once in a while, and the Deutshce Bank chief U.S economist sees a sharp rebound in the economy this quarter.
    • Pointing to examples from June-July 2003 and May-June 2013, LaVorgna says the rise in rates will be dramatic and fast. "Each instance saw an unexpected and substantial sell-off in interest rates that was the direct result of a shift in investors’ expectations of the path of monetary policy."
    • The catalyst could be the economic data, or maybe the Fed itself wants to suck some of the froth out of the market by taking a hawkish stance, says LaVorgna.
    • "More importantly, we believe that it will be obvious to the FOMC sometime over the next few months, that policymakers’ soft targets on unemployment and inflation will be met much sooner than what was built into the last publicly available forecast in March."
    • The 10-year yield is lower by four basis points on the session to 2.50%. TLT +0.7%
    • The $2.5B fine stands against the $1B amount which has been floating around for the past couple of weeks. The guilty plea, though, is the most interesting part as prosecutors have shied away from forcing these on banks over the worry regulators could seek to remove a bank's charter, with resultant ripple effects on the economy.
    • In this case, prosecutors and regulators have worked to prevent this from happening, and regulators will instead be satisfied with a fat payout – of the $2.5B fine, $600M is going to the NY State Dept. of Financial Services and $100M to the Fed. The rest goes to the DOJ.
    • At issue are charges the Swiss lender assisted wealthy Americans in their efforts to evade taxes. A guilty plea could come as soon as next week, with sources saying final details are still being worked out.
    • In the red along with the rest of the stock universe all session, a bit of green begins to creep into the mortgage REIT sector (REM -0.4%) as the 10-year Treasury yield tumbles below 2.50%.
    • Annaly Capital's (NLY +0.1%) Q1 results were a notable disappointment as management seemingly found itself overhedged while rates fell sharply. One wonders if the hedges were lifted at all for Q2.
    • The sector's best performer today is CYS Investments (CYS +1.1%). Management indicated on the April 22 earnings call that it thought mortgages were too pricey, so instead had put a slug of money into Treasurys – a move looking pretty good so far.
    • Others: Two Harbors (TWO), Chimera Investment (CIM +0.2%), Armour Residential (ARR-0.1%), AG Mortgage Investment (MITT +0.1%)
    • ETFs: MORTMORL
    • Chinese solar demand fell to just 1GW in Q1 from 6GW in seasonally strong Q4, writes Deutsche, which was upbeat about local solar activity at the start of the year.
    • Deutsche believes Q2 installations will be in a 3GW-4GW range, and (following talks with Chinese solar firms) and thinks 2GW is a more realistic target for 2014 Chinese distributed solar installations than the government's 8GW target. A 14GW target has been set for total installations (8GW distributed, 6GW utility)
    • The Deutsche report comes a couple days after Bloomberg reported the Indian government has deemed foreign solar firms (inc. U.S. and Chinese companies) guilty of dumping products, a move that raises the possibility of tariffs. Though still much smaller than China's solar market, the Indian market has been growing quickly.
    • Solar stocks (TAN -3.6%) are underperforming amid a market selloff. Notable decliners: JKS-7.5%. SCTY -6.1%. TSL -5.4%. CSIQ -5.3%. YGE -4.9%. CSUN -4.7%.
    • Daqo (DQ -9.8%) is especially hard-hit after pricing its 2M-share secondary offering (previous) at $29.
    • U.S. airliners flew 52.4M passengers in February, flat growth from the year-ago period.
    • The group showed greater efficiency this year with fewer flights flown during the month.
    • The average flight length also increased during the month which is a boost to profitability for the sector.
    • Related stocks: LUVUALDALJBLUALKHASAVEALGTRJET.
    • DOT passenger data

  88. One of my favorite columnists, Mike Royko (Chicago Tribute), was quoted in the NYT saying "No self-respecting fish would be wrapped in a paper that Rupert Murdoch owned".


  89. Phil More evidence of the BIG R! Nothing builds on tree stumps so 10% can fly and 10% can shop Wall Mart, BFD. Someday everything falls apart and watch the rich bitch about how bag it is for them.


  90. BAD not bag BTW tree stumps are dead trees in case you don't understand me.


  91. Yellen will speak at 6:10pm est tonight. Market might be more volatiled in tomm.


  92. Very true, Sibe. 

    Recession/Shadow – What's amazing to me is the complete lack of media coverage.

    Nice explanation of the Wal-Mart wage cycle:

    But there is some good news:

    How low can Rush Limbaugh go in Los Angeles?

    The syndicated talker, who for two decades has been universally regarded as the most popular and powerful AM talker in the country, continues to wallow in obscurity in the nation's second largest radio market. According to recently released ratings from Nielsen Audio, Limbaugh's California flagship station, KEIB, now ranks  39th in the Los Angeles market, attracting an anemic .5 ratings share. (A ratings share represents the percent of those listening to radio in the market who are tuned into a particular station.)

    The tumble to 39th place represents yet another downward lurch — in March the station logged in at 37th place. Note that there are a total of 45 rated stations in the Los Angeles market, which means Limbaugh's KEIB station (the call letters mirror Limbaugh's motto, "Excellence in Broadcasting") has nearly reached the ratings basement.

    I still think the GOP is in for a rude awakening in November.  Hopefully not just wishful thinking…


  93. Wow, not even making weak bounces into the close.   Asia's not going to like this at all…


  94. Phil WMT

    Last few times brought in for great cheap clumping cat litter. It pisses girl friend off but at the cashier I mention WMT employees on food stamps/welfare, you deserve a raise and the Walton family is the richest, 3 times no comment, yesterday an expecting  woman, no wedding ring, says I get both!!!!!!!


  95. Better be careful, Shadow, they'll put you in mall jail…  wink

    • Europe is the "largest emerging market in the world," says Carlyle's (CG -1%) David Rubenstein, holding court at the SALT conference in Vegas. The old East-West divide, he says, is now a North-South divide, but overall things are in "reasonable shape," and the pricing is attractive.
    • Asked about David Tepper's nervousness, Rubenstein allows there's a bit of froth in markets, and notes half the deals getting done right now are P-E firms selling to each other. Prices aren't necessarily through the roof, but leverage is being ratcheted up.
    Get those pesky regulators off our backs!   Williams investigation expanded after "unusual" trio of gas accidents
    • A U.S. government probe into safety practices at pipeline operator Williams Cos. (WMB,WPZ) is being expanded after a natural gas plant fire led to the evacuation of a town in Wyoming last month, the company’s third accident in a year.
    • The U.S. Chemical Safety Board already was investigating last year's explosion at the Geismar, La., that killed two workers and injured 80; after two more recent incidents, the board plans to look at whether there’s "a higher-level corporate issue."
    • CEO Alan Armstrong says Williams will hire outside experts to provide an independent look at their practices, but the company's capital spending on maintenance has declined in recent years even as its pipeline network expanded.

  96. All the indexes down about 0.9% – not diverging today.  

    We'll see if Yellen can turn things around but she's speaking in Washington at an SBA dinner – I doubt she'll use it for a forum to make an Earth-shaking comment.  


  97. Good analysis at Stockcharts:

    http://stockcharts.com/members/analysis/20140515-1.html

    The Dow Jones Industrial Average ($DJIA) has been the strongest of the 4 main indexes recently. On Thursday, the Dow was unable to hold its breakout level. It pushed down to the 50 Day Moving Average (50 DMA). The rally which started last Wednesday (May 7) could not hold up. At this point we can label it as a failed breakout. What is concerning is the number of times it tried to exceed this zone of resistance at 16500 and 16600. Failing to hold above the resistance level for longer than 3 days after working so hard to break out seems to confirm the Nasdaq as the directional leader.


  98. Phil

    Actually they are afraid of me because I got a lawyer to get my guns back and have no clue I am about tapped out now from medical etc. The law only attacks the super poor and the stupid people behind this don't get it costs 3 times as much to punish as support. Lots of cop jobs costing taxpayers way too much to run up the bill further. The bottom 90% have had enough and are, sorry, too uneducated to protest with votes, REVOLUTION is coming. Remember this is a country willing to die for freedom, mostly the stupid, but they will win in the end.


  99. And I would not go crazy with CSCO either – we have been there before:

    Cisco (CSCO) also reported earnings and they were slightly positive. On a weak tape today, CSCO had a significant push higher as shown on Chart 10. On a long term chart (Chart 11), Cisco is moving into an area where resistance has stopped the upward rally. Will it be different this time?


  100. /CL Phil a question about the mechanics of oil futures trading. Being new to this, I am seeing the July futures now listed on TOS at 101.15 or so, and the June contracts at 101.56. I am holding a contract I sold at 101.90, hoping to catch a better exit, but have no experience with how the change over works. So, first question is how much time do we have to trade the June contract? I though we had another week, is that wrong? Second question is if it is normal for the expiring month to trade at a higher price like it is now? 


  101. Stj, thanks for sharing the good charting info. I appreciate it.


  102. Phil

    Aftermarket:

    Hey, I am able to read (quickly) most of the daily posts on some days of the week.

    looking at your portfolios, it looks like a daunting task, first to enter those positions and then follow them!

    especially, if I have more than one account to deal with.

    so, I thought I would periodically pick the worst losers, where you DD or close to tht point, have maybe 1/4 or 1/5 the number of positions, and try it that way. But it would be risky to manage an entire portfolio like that?

    what are your thoughts?

    any other way to manage this dilemma?


  103. craigsa620

    If I was you I would cash out /cl with your profit. its very easy to lose your profit and not safe to hold oil futures overnight you could easily be down 1000 by morning on one contract.

    tom


  104. If the pattern holds, we should get an up day tomorrow… Hopefully because if not we'll be through some support lines again.


  105. Phil / CMG – Hoping you can explain the CMG roll to the Sept 465/495 bull call spread for me as I'm trying to learn the reason behind the roll and what we are expecting to happen to CMG and what our corresponding moves would be down the road. I guess I'm having trouble seeing what will make us money on the spread with CMG at this level. From your previous posts you mentioned that if CMG cannot hold 500 we expect it to retest 480, I'm assuming that's now our premise but are we also thinking that CMG will not break 495 by Sept now? Sorry if this question seems basic (or confusing) but I'm still learning (and hoping you understand what I'm asking). thanks in advance :)


  106. From Bloomberg, May 15, 2014, 9:45:11 PM

    April 28 (Bloomberg) — May Yan, an analyst at Barclays Plc in Hong Kong, talks about China’s banking industry and investment strategy.
    She speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Chinese banks had the biggest quarterly increase in bad loans since 2005 as a slowdown in the world’s second-largest economy causes defaults to rise.

    To read the entire article, go to http://bloom.bg/1gGUBE1
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  107. From Bloomberg, May 14, 2014, 4:27:13 AM


    April 28 (Bloomberg) — May Yan, an analyst at Barclays Plc in Hong Kong, talks about China’s banking industry and investment strategy.
    She speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s central bank called on the nation’s biggest lenders to accelerate the granting of mortgages, a sign that developers’ prices cuts and incentives alone won’t boost a slumping housing market and economy.

    To read the entire article, go to http://bloom.bg/1mnSHh5
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  108. From Bloomberg, May 15, 2014, 4:00:00 PM

    Bystanders gather to watch as a man. injured after falling from his electric bicycle, is taken away by paramedics in Beijing. Photographer: Frederic J. Brown/AFP via Getty Images

    Electric bicycles are China’s answer to the Prius because they’re green, they’re zippy and they’re cheap. They’re also emerging as a safety hazard in a country where road accidents are the biggest killer of young people.

    To read the entire article, go to http://bloom.bg/1g9p8zw
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  109. From Bloomberg, Apr 30, 2014, 6:48:36 PM


    March 14 (Bloomberg) — Cory Johnson reports on electric car battery graphite pollution on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

    (Corrects headline of story published March 14 to insert industry context.)

    To read the entire article, go to http://bloom.bg/1goDWrv
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  110. From Bloomberg, May 15, 2014, 6:54:54 PM

    An Uber Japan Co. employee holds an Apple Inc. iPhone 5s showing a map on the Uber application for a photograph during a demonstration in Tokyo. Photographer: Junko Kimura-Matsumoto/Bloomberg

    Uber Technologies Inc. is seeking to join the $10 billion-plus club.

    To read the entire article, go to http://www.bloomberg.com/news/2014-05-15/uber-said-to-be-in-funding-talks-for-more-than-10b-value.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  111. From Bloomberg, May 15, 2014, 9:01:02 PM


    May 16 (Bloomberg) — Jonathan Garner, Hong Kong-based chief Asia and emerging-market strategist at Morgan Stanley, talks about India and China’s economies, markets and his investment strategy.
    He speaks with John Dawson on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Asian stocks fell, with the regional
    index (VNINDEX) dropping from a four-month high, as bonds from Australia
    to Singapore followed Treasuries higher amid concern the global
    recovery is stalling. Crude oil rose as the yen held gains
    versus most major peers.

    To read the entire article, go to http://bloom.bg/1g9J5pK
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  112. From Bloomberg, May 15, 2014, 9:01:02 PM


    May 16 (Bloomberg) — Jonathan Garner, Hong Kong-based chief Asia and emerging-market strategist at Morgan Stanley, talks about India and China’s economies, markets and his investment strategy.
    He speaks with John Dawson on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Asian stocks fell, with the regional
    index (VNINDEX) dropping from a four-month high, as bonds from Australia
    to Singapore followed Treasuries higher amid concern the global
    recovery is stalling. Crude oil rose as the yen held gains
    versus most major peers.

    To read the entire article, go to http://bloom.bg/1g9J5pK
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  113. From Bloomberg, May 15, 2014, 9:57:03 PM


    Construction cranes stand in Jinan, China. New building construction fell 22 percent in the first four months of the year, while home sales slid 18 percent in April. Photographer: Brent Lewin/Bloomberg

    China’s small-company stocks fell,
    dragging the benchmark index down more than 20 percent from its
    February peak, on concern valuations are too high as the economy
    slows and new share offerings divert funds.

    To read the entire article, go to http://bloom.bg/1mZA2ed
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  114. From Bloomberg, May 15, 2014, 11:00:01 AM


    Wynn Chairman Steve Wynn, 72, has had talks with several Japanese companies about building a casino in the country, he said today in Macau. Photographer: Brent Lewin/Bloomberg

    Wynn Resorts Ltd. (WYNN) and MGM Resorts
    International (MGM)
    , Las Vegas-based casino operators, intend to
    conduct initial public offerings for planned Japan resort
    ventures to help boost their profiles in the country.

    To read the entire article, go to http://bloom.bg/1gGD66Z
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  115. From Bloomberg, May 15, 2014, 8:17:55 PM


    George Soros, billionaire and founder of Soros Fund Management LLC. Photographer: Simon Dawson/Bloomberg

    George Soros’s family office and
    Tudor Investment Corp. were among asset managers that cut their
    stakes in financial-services stocks in the first quarter,
    getting out before many of the shares tumbled on poor earnings.

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


  116. From Bloomberg, May 15, 2014, 6:03:50 PM


    Warren Buffett’s Berkshire Hathaway Inc. deputy investment manager Todd Combs. Photographer: Daniel Acker/Bloomberg

    Berkshire Hathaway Inc. (BRK/A) disclosed a
    stake in Verizon Communications (VZ) Inc. as Warren Buffett’s backup
    stock pickers build their portfolios. Verizon gained in extended
    trading in New York.

    To read the entire article, go to http://www.bloomberg.com/news/2014-05-15/buffett-s-berkshire-discloses-528-7-million-verizon-stake-1-.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  117. From Bloomberg, May 15, 2014, 9:01:41 PM


    Nickel ore is unloaded from the bulk carrier Sansho at Queensland Nickel Pty’s port facility in Townsville, Australia. Nickel had surged this year following a January ban on ore exports by Indonesia and as threats increased for economic sanctions against Russia, home to OAO GMK Norilsk Nickel, the biggest producer of refined metal. Photographer: Carla Gottgens/Bloomberg

    Nickel’s roller-coaster ride this
    year isn’t over, according to Goldman Sachs Group Inc., which
    expects the highest prices in two years to prompt expanded
    capacity for smelting and discourage purchases by steelmakers.

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


  118. SCIF WEEKLYGood morning! 

    India had a "sell on the news" moment as the Sensex fell 1,200 points (5%) from the open as the election results became official.  It was no surprise, it's still Modi – it's just that he didn't fly in to accept the nomination on a winged horse that pooped food and pee'd kerosene (their main oil) for the people – that's about what was expected on this 45% rally into the election. 

    Still, even the 1,200 point decline from the day's high (the 50% line, so 1,200 points was exactly a 10% retrace of the rally) left the Sensex up 1.13% for the day – craziness!  Nikkei was down 1.4% for the day and /NKD tested 14,000 but has settled back at 14,130.  Big China was up 0.08% but Hong Kong was down 0.08% and Singapore was down 0.3%.  

    Japan Tops Life Expectancy: WHO - People across the globe are living longer than ever, and Japan is at the top of the list.

    Private Economists, BOJ at Odds Over Forecasts

    What to Watch for During Putin's Visit to Beijing Next Week

    • Hong Kong Economic Growth Slows

      Hong Kong's economic growth slowed in the first quarter, dragged down by sluggish exports to advanced economies and a cloudy global outlook.

    China Bad Loans Rise Most Since 2005 as Economy Slows. Chinese banks had the biggest quarterly increase in bad loans since 2005 as a slowdown in the world’s second-largest economy causes defaults to rise.Nonperforming loans rose by 54 billion yuan ($8.7 billion) in the three months through March to 646.1 billion yuan, the highest level since September 2008, according to data released by the China Banking Regulatory Commission yesterday. Bad loans accounted for 1.04 percent of total lending, up from 1 percent three months earlier. The 10th straight quarterly increase in defaults adds to concern banks’ profitability may slip as they build buffers to cover loan losses.

    The Lightbulb Goes Off In China: "If You Don't Pay Me And I Pay Others, I Am The Sucker"

    Heard in the Hutong: How Mainland Chinese Feel About Hong Kong - Tensions between China and Hong Kong have been heating up, with spats over tourists' behavior making some mainland Chinese feel unwelcome in the former British colony. China Real Time hit the streets to see what Beijingers had to say about Hong Kong and its relationship with the mainland.

    • Soybean Companies in a Crush

      Commodity houses are reporting bleak results for their soybean businesses in China despite rocketing imports, as demand for byproducts like soymeal hasn't kept pace.

    Xi’s Southeast Asia Strategy Tested by Vietnam ProtestsChina’s efforts to head off a united Southeast Asia bloc against its pursuit of control of the South China Sea faces a backlash as President Xi Jinping considers how to respond to Vietnam’s fury over Chinese moves. Vietnam’s Prime Minister Nguyen Tan Dung called for support from neighboring nations in his country’s attempt to force China to withdraw an oil rig it placed in waters claimed by both nations. Vietnamese ire over the issue spurred attacks on Chinese workers in the country that left two dead. ?

    SPY 5 MINUTEMeanwhile, over in Europe, FTSE, DAX and CAC are all down very slightly while Italy and Spain are up half a point heading into lunch.  

    Euro-Zone Trade Surplus Shrinks

    Euro Zone's Weak Growth to Pressure ECB

    First-quarter growth of just 0.2%, despite a strong recovery in Germany, put pressure on the ECB to enact fresh easing measures.

     

    Portugal's Economy Needs Further Help

    Portugal's central bank issued a resounding warning to the government and banks that while the country has exited a $106.6 billion bailout program, much more needs to be done to put the economy on the right track.

    The Ultimate WSJ Guide to European Elections: One, Two, Three … Vote - Find out when you should start paying attention to European elections. We're giving you timings for first exit polls and what to watch out for in the results of individual countries.

    Our indexes are flattish (and it's expiration day, so that's normal) with the Dollar at 80.65, oil at $101.20 (bouncing off $101, which was an obvious place to flip long for the bounce, I hope), gold $1,294, silver $19.40 after bottoming at $19.33 and I'll like /SI long again if the Dollar fails 80.  Copper bounced off $3.13 to $3.15 and that's significant as they haven't bounced off anything over $3.10 in ages, Nat gas $4.45 and gasoline $2.96 but almost impossible to play today.  

    "Complacency"

    Will 'technical tsunami' continue as stocks try to stabilize

    U.S.-based stock funds attract $9.7 bln, most since March -Lipper

    S&P battles secretiveness surrounding loans to U.S. cities, statesStandard & Poor's Ratings Services is pressing U.S. state and local governments to disclose information about loans they take out from banks, which are frequently hidden from public view, saying it will not be able to assign credit scores without the information.

    Einhorn’s Greenlight Buys Nokia(NOK), Cuts Apple Inc.(AAPL), Sells GM(GM)

    GUNDLACH: We Could Be On The Verge Of 'One Of The Biggest Short-Covering Scrambles Of All Time'

    Pinterest Is Valued at $5 BillionScrapbooking Site Raises $200 Million Investment. Pinterest Inc. still makes little revenue, yet the scrapbooking site's value is soaring in the eyes of venture capitalists. The company said Thursday it raised a $200 million investment that values it at $5 billion, making Pinterest one of the most valuable venture-capital backed startups in the world. Investors are still willing to pay… ?

    • Big Investors Snatch Up Verizon

      Billionaire investors Warren Buffett, Daniel Loeb and John Paulson made a connection on Verizon Communications, as their firms separately picked up stakes in the telecommunications firm amid a wave of deal-making in the sector.

    • The White House is considering forcing power plans to cut carbon emissions by 25% over a 15-year period, Bloomberg reports.
    • The problem is that owners can only cut so much of a facility's emissions by increasing efficiency, so a lot of the reduction could have to come by "going outside the fence," such as by deepening the use of renewable energy, improving grid efficiency and encouraging customers to use less electricity.
    • Trying to compel operators to rely on such external measures could run afoul of what the government is allowed to do under the Clean Air Act.

    SPY DAILY

    SPX WEEKLY

    INDU WEEKLY

    I don't agree – I think people will run for the exits into the close.  

    NDX WEEKLY

    RUT WEEKLY

    XLF WEEKLY

    KBE WEEKLY

    XLE WEEKLY

    XLB WEEKLY

    XLY WEEKLY

    XRT WEEKLY

    XLV WEEKLY

    TAN WEEKLY

    TLT WEEKLY

    UUP WEEKLY

    FXE WEEKLY

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    DBA WEEKLY

    USO WEEKLY

    UNG WEEKLY

    EEM WEEKLY

    EWJ WEEKLY

    NYMO DAILY

    NYSI DAILY

    VIX WEEKLY?


  119. Yet another outrageous patent filing by AMZN:


  120. $WWE. Wow