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Monday Market Movement – Major Danger Ahead!

These are not good chart patterns: 

We haven't gone anywhere on the Dow, S&P or NYSE since early March and we've lost 6% on the Nasdaq and 8.3% on the Russell yet, to hear the mainstream media tell it – there's no better time to invest.  

Nazi propagandist Joseph Goebbels said: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it."  Clearly that's the template being used today by the MSM and even our politicians these days.  

President Bush himself said: "See, in my line of work you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda."  Unfortunately, no one told him he wasn't supposed to actually repeat what they told him in the strategy meeting to the general public – but we all know that's the way things work, don't we?  

SPY 5 MINUTEAs you can see from Dave Fry's SPY chart, we got a very exciting pop into the close on Friday for no particular reason and now, for no particular reason the Futures have given back most of those gains.  But don't worry, into the open, while the volume is still low, it's sure to get jammed back up again – just in time for the Funds to dump their shares on the retail crowd.  

We don't care IF the game is rigged, as long as we can figure out HOW the game is rigged and play along.  This morning I posted to our Members that Silver Futures (/SI ) were a long at $19.50 and that Gasoline Futures (/RB) were a short at $3.  Already silver hit $19.65 for a $750 per contract gain and gasoline fell to $2.985 for a $630 per contract gain – and the Egg McMuffins are paid for!  

We KNOW it's rigged and we KNOW the moves were fake so, when they hit good resistance points, we knew it was very unlikely they'd get past them.  If they did get over the resistance, we'd take small, quick losses and be done with the trade.  Of course we went over the news and the data from around the World to make sure our premise was sound but those are the basics and we teach them every month in our Live Futures Trading Workshops.  

This weekend, we went over our basic strategy for long-term investing, reviewing how we can turn $25,000 into $500,000 in 15 years using our conservative, long-term strategies.  While we have a lot of fun making aggressive short-term trades and earnings plays and futures trades – THIS is where we like the bulk of our investing to be – making slow, steady long-term gains.  

Long-term investing shouldn't be exciting.  If you want exciting, try a hedge fund – though most of them aren't worth a damn.  Barron's reviewed the top 100 Hedge Funds this weekend and the 23rd fund on the list failed to make 20% over the last 3 years.  That's the same 3 year when the S&P began 2010 at 1,000 and finished 2013 at 1,600 – up 60%.  Only 22 hedge funds in the World beat the S&P for the past 3 years.  

In fact, had Glenview (the #1 fund) not made 101.74% last year, they wouldn't have even been on the list.  When you are down 2 years in a row, a fund is incentified to "go for it" so they can get paid.  If they lose for the 3rd straight year – you're going to withdraw your money anyway – so better to bet it all on a couple of big scores.  5 of the other top 22 funds made 50% or more last year – otherwise they too would have been mediocre at best.  

Barron's notes that many of the top fund "are equity specialists that focus on a short list of companies they get to know extremely well."  Glenview's 20 biggest long positions are 2/3 of his porfolio with Larry Robbins following our lessons on "Smart Portfolio Management," as do most of the major funds.  Glenview made most of their money betting on Biotech and Health Care – the same stocks Pharmboy and I have been advoctating since my "2010 Investing Outlook".  

That sector was a giveaway, Obamacare was coming and that means more people would be using health services over the next 3-5 years, so that's what we bet on.  Of course things went up and down in between but focusing on the LONG-TERM macro premise and, as of last September, our 15 health care picks were up an average of 64% – and that's just the stocks – with option strategies, the returns were ridiculous.  

 Since we are able to use options to leverage our positions to make 40-60% annual gains when we're right, we like to have a lot of cash on the side for those times when we get it wrong. 

Maybe we're wrong about the dangers the economy is facing (see today's news alert for more scary stuff) but so what?  By being cautious and taking our profits off the table, we free ourselves up to do some bargain hunting and last week, in our Live Weekly Webinar, I outlined 9 great trade ideas that can all give us 20% or better annual returns – and we don't even have to pay any fund fees!  

This year's top fund manage, David Tepper, agreed with me last week about remaining "Cashy and Cautious," so I'm not feeling like I need to build a big case for it this week.  I laid our our DXD and DIA hedges on Friday and there was ample opportunity to get into either or both on the afternoon climb – AS WE PREDICTED.  

This week is highlighted by Global PPI Reports, Quad Fed Speak and Minutes on Wednesday and bad US Housing Data.  Oops, I'm not supposed to tell you it's bad until after the report – silly me.  

Just be careful out there!  

 


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  1. Good afternoon from Moscow… I had been to Russia before (St Petersburg) but only the center of town. Once you drive outside of town, it's a bit of a culture shock. Not in New Jersey anymore… The plane from Paris to Moscow didn't fly over Ukraine for some reasons! The section of the airport where I arrived was fairly new, but it looked empty.  Interesting so far. 

    Oil lines

    R3 – 102.79
    R2 – 102.28
    R1 – 102
    PP – 101.48
    S1 – 101.19
    S2 – 100.68
    S3 – 100.39


  2. Good morning! 

     

    Next week, Ryan is set to hold a hearing on poverty featuring three “experts.”  I put experts in quotation marks because none of these three individuals has ever lived in poverty.  As someone who grew up dirt poor, you really can’t be an “expert” on being impoverished unless you’ve actually, you know – lived in poverty.

    You would think that a hearing to discuss poverty might feature some people who actually live in poverty.  Except, Paul Ryan won’t let that happen. Director Mariana Chilton of Witnesses to Hunger, an advocacy project that shares the stories of low-income Americans, said, “When Ryan had his first hearing last July, we wrote to his office to see if we could testify, but they weren’t interested.” This kind of reminds me when I see panels of all males discussing women’s health.  While it’s easy to talk about “stats” that tell you what it’s like being poor, until you’ve lived a life where you weren’t sure if you’d have food to eat or electricity the next day, you really don’t know what it’s like.  For many people, “being broke” consists of having to cut out HBO from the cable package or eat out less every month.  For poor people, it’s living in a constant state of fear that even the slightest unexpected disaster in your life could be the difference between having a home for your children and your children being homeless.


  3. Cool StJ – I look forward to hearing reports from the ground over there.  


  4. Good Morning!


  5. Charts of the week:

    http://qz.com/210337/you-really-should-see-these-13-important-economic-charts-of-the-week/

    A sample:

    US-retail-sales-month-on-month-change-US-retail-sales-month-on-month-change_chartbuilder (2)

    US-non-mortgage-consumer-debt-outstanding-in-trillions-Home-equity-Auto-loan-Credit-card-Student-loan-Other_chartbuilder (2)

    Deleveraging in progress unless you are a student…


  6. Russia / Phil – First report, don't talk politics in the office when you are the only American with 700 Russians around you… It's good natured, but we don't get our news from the same (government monitored) outlets, lets put it this way. 


  7. Good Morning from Cleveland—-STJ Russia when u could be in Cleveland ha !!

    Phil—when would u go long /RB as Memorial Day weekend is upon us  Thur ?—thanks


  8. Savi – Maybe I'll fly back through Cleveland on the way back! How much warning do you need for a home cooked dinner?


  9. STJ—if u like spicy stuff just let me know when— u are more than welcome at our home ;-)


  10. Savi – I guess I'll have to bring something to cool the fire then :-)

    Next time I am in Cleveland then… Although I have been there once in 30 years so no need to start shopping just yet.


  11. Phil// I was waiting to trade the USO June 37 puts you had suggested in the 25kp. Is this a good time to buy those now or is there a better trade on USO?  Since the crude has been climbing I was looking for a nice entry point before jumping into this trade.  Thanks.


  12. Phil// You had mentioned we might have to close the SHLD trade (part of LTP I think) if it doesn't hold 40+.  Are we still looking to close out that position if our premise doesn't hold this week?  Thanks.


  13. GM!  Zoom Zoom…higher and higher we go!

    ABX…digging its own grave.

    Good article on the Kochs….At one time, they were not who we think they are….


  14. Phil// Sorry, it was June 38 puts instead of the 37 puts I had mentioned earlier.  Thanks.


  15. ABX / Pharm – Moving apart from GDX today…


  16. Wow, and up we pop right at the bell.

    • Dow -0.3% to 16443. S&P -0.24% to 1873. Nasdaq -0.23% to 4081.
    • Treasurys: 30-year +0.21%. 10-yr +0.16%. 5-yr +0.1%.
    • Commodities: Crude +0.6% to $102.19. Gold +0.6% to $1301.2.
    • Currencies: Euro +0.21% vs. dollar. Yen -0.33%. Pound -0.07%.
    • Stock futures likely will open on a lower note, as weakness in overseas markets and a mixed reaction to corporate deal news set a negative tone; Dow -0.3%, S&P and Nasdaq -0.2%.
    • AstraZeneca -11.5% premarket after again rebuffing Pfizer’s “final” offer of £55/share ($89.96), while AT&T -2.6% after agreeing to buy DirecTV in a stock and cash deal worth $67B.
    • "The falling apart of the AstraZeneca deal could be setting a negative tone on today's trading, because the health care sector has been one of the better performers," S&P Capital IQ's Sam Stovall says.
    • Asian stocks finished lower on China slowdown fears, with the Shanghai composite at a two-month low; European markets are modestly lower.
    • Treasurys hold gains to start the day, with the 10-year yield down 2 bps at 2.51%.
    • Brent crude rises above $110/bbl on renewed concerns over Libya's oil output following some of the worst violence in Tripoli since Gaddafi's ouster in 2011.
    • Gunmen stormed Libya's parliament yesterday and demanded its suspension, claiming loyalty to a renegade army general.
    • An end to a month-long blockade of major oil ports in eastern Libya last month raised the prospect of higher crude exports, but just-opened oil fields have been closed again as clashes erupt.
    • Also helping push crude prices are potential Norwegian strikes and the shutdown of BP's Foinaven field for maintenance.
    • Energy companies with a significant presence in Libya include Total (TOT), Statoli (STO), ConocoPhillips (COP), Marathon Oil (MRO), Hess (HES) and Occidental Petroleum (OXY).
    • Iron ore prices drop below $100/metric ton for the first time in nearly two years on worries that demand from China is being outpaced by increasing iron ore output from global miners.
    • However, WSJ reports that India's iron ore production could fall by nearly a third this year due to a new court decision that ordered an additional 26 mines to be shut down.
    • A top government mining official says the order may mean India's exports this financial year could end up near last year's level of 15M metric tons vs. expectations of a rise in output to ~22M tons; India exported as much as 118M tons of iron ore in 2009-2010.
    • Global iron ore producers include CLFVALERIOBHP.

  17. lqmt--wow


  18. News/StJ – First thing I do in a new country is buy all the local papers (the ones in English, anyway).  Even in England, it's a very different story than we get here. 

    Memorial day/Savi – Already?  Wow, I'm not ready for this holiday!    Markets are closed Monday next week.  Yes, usually gas is a good play and I'd take a chance off the $2.98 line (or $2.97 if that fails) with very tight stops but $3 is going to be hard to crack – as you saw this morning.  Probably a triangle squeezy thing and then it breaks higher into the weekend.  

    USO/Rookie – We're hoping for a big sell-off this week due to the contract rollover on Weds, HOWEVER, it is the holiday weekend coming up and maybe prices don't drop at all.  So the June $38 puts (now .95) are a gamble, though less so than they were at $1.33.  I'm inclined to DD today at .83 if we get there as we only have 5 in the $25KP but, it's hard to predict which way oil will go due to the Libya thing – which I'm not sure I believe but they're pushing it hard as a reason for oil to go up.   We'll see how they handle $102.50. 

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Jun'14 102.13 103.09 101.97 102.98 09:48
    May 19


    -

    0.96 30713 102.02 80545 Call Put
    Jul'14 101.68 102.49 101.52 102.37 09:48
    May 19


    -

    0.79 74215 101.58 310736 Call Put
    Aug'14 100.83 101.58 100.75 101.47 09:48
    May 19


    -

    0.71 15679 100.76 150929 Call Put
    Sep'14 99.86 100.55 99.81 100.45 09:48
    May 19


    -

    0.63 10697 99.82 125665 Call Put

    They've done a good job rolling out the contracts, with just 60,000 left to roll (they'll leave 20) over the next 3 days, that's not going to be an issue.  If oil goes over $102.50 (for more than a spike, of course), I think we should just dump out of our shorts. 

    SHLD/Rookie – Well it's at $40 now so let's watch it closely.  

    CLF still a good trade per that iron ore in India article above.  You can sell the 2016 $15 puts for $3.40 for a net $11.60 entry (30% off).  

    LQMT/Jabob – That's just the usual nonsense with them.  Pretty reliable between .16 and .30 so below 0.20 we get interested in accumulating and above .25 we start selling.


  19. News / Phil – I already read news from newspaper from 4 different countries… Does the local edition of the WSJ count ;-)


  20. I miss Pravda. 


  21.  

    Major Earnings for the Upcoming Week:

    Monday:  CPB, URBN, VAL

     

    Tuesday: ADI, AINV, CNET, CRM, DKS, HD, INTU, MDT, SPLS, TJX

     

    Wednesday: AEO, DRYS, HRL, LOW, NTAP, PETM, SINA, TGT, TIF, TSL, WSM

     

    Thursday:  ARO, BBY, BRCD, DLTR, GME, GPS, MRVL, ROST, SHLD, SMRT, TFM, TIVO, TTC

     

    Friday: FL

     

    Economic Releases (5/19-5/23):

    Monday:

    11:10 am CT – Fed’s Fisher Speaks

                                                                                                                                                                                    

    Tuesday:

    6:45 am CT – GS Store Sales

    11:30 am CT – Fed’s Plosser Speaks

                                                                                                                                                                                                                  

    Wednesday:

    Fed’s Yellen Speaks

    6:00 am CT – MBA Purchase Applications

    9:00 am CT – Fed’s Dudley Speaks

    9:30 am CT – Oil Inventories

    11:50 am CT – Fed’s George Speaks

    12:30 pm CT – Fed’s Kocherlkota Speaks

    1:00 pm CT – FOMC minutes

                        

    Thursday:

    7:30 am CT– Weekly Jobless Claims

    8:45 am CT –PMI Mfg. Index -Flash

    9:00 am CT – Existing Home Sales

    9:00 am CT– Leading Economic Indicators

    9:30 am CT– Natural Gas Inventories

    10:00 am CT – KC Fed Mfg. Survey

                                                                                                                                                                                                            

    Friday:

    9:00 am CT – New Home Sales

     


  22. Pharm—do u have any ideas based on the presentations at the  ASCO mtg beginning may 30th—thanks


  23. NFLX – pretty perky for…what news?


  24. Savi, I am reading about those now.  Will get back to all .


  25. Phil/BRCM

    At what price will you sell calls against the spreads in the LTP?


  26. Pharm,

    Are you avoiding all of the fires?


  27. Thanks Pharm


  28. Thanks QC.  

    Dollar below 80 – 79.94 – always a good trick for keeping the markets up.  

    We got pretty sharp falls on the Big Chart last week so we need sharp bounces or you get this.  We already have that on the Nas and the RUT so we have to watch the Big 3:

    • Dow fell from 16,700 to 16,400 is 300 points so 60 bounces = 16,460 weak and 16,520 strong – now 16,478.  
    • S&P fell from 1,900 to 1,865 is 35 points so 7 bounces is 1,872 and 1,879 – now 1,879
    • Nas is in the midst of a greater fall (H4 or 5 now) from rejection at 4,375 (the apex) and the bottom was 4,000 so 375 is 75 bounces to 4,075 and 4,150.  On the Nasdaq, H1 was 4,286, H2 was 4,177, H3 was 4,149 and H4 was 4,155 – see, it's just physics…Now 4,109 and if they fail to get to 4,150 again, it's a pretty good sign there's going to be more downside to come.  
    • NYSE fell from 10,700 to 10,500 so 200 points is 40 bounces to 10,550 (rounding) and 10,600, now 10,595.
    • RUT is also in a long fall from 1,200 to 1,100 so 100 points is 20 bounces to 1,120 and 1,140, now 1,110 – so very lame.  Like the Nasdaq, RUT is at about H5 and getting weaker on each bounce.  

    Don't forget, Monday's are total BS anyway – let's just see what happens for now.  

    NFLX/Scott – Price increase and 3 new shows.  No new information – just spin.  

    AAPL jammed up to $605 – that's helping the Nas a lot.  

    BRCM/RJ – Well, if the markets are bouncing, then no price but, generally, the 50 dma is $30.50 so, if they look like they can't get over it, it might be time to sell a few covers.  

    Gasoline is testing $2.97 now but very bad if it fails here.  Oil $102.25, kind of unplayable today (Futures-wise).  


  29. Phil

    Fas calls today  ?

    Thanks


  30. momos recovering..??


  31. FAS/QC – Good point, if FAS does pop to $22 again, we should sell 1/2 cover on our spread.

    Interesting chart:

    It's still true that poor in our country is middle income in China or India.  Good thing it doesn't occur to them to complain about it…

    Also a good chart:

    S&P 500 Valuation Metrics

    Two Housing Markets for the Two Americas (Fiscal Times)

    What Tim Geithner doesn’t know about Social Security is shocking (LA Times)

    How Wall Street recruits so many insecure Ivy League grads (Vox)

    Chipotle’s prices are rising faster than expected, but customers don’t care (Quartz)


  32. NFLX / Phil – I recall you posting a week or two back that 360 was a technical resistance line and you'd sell calls there, is that pattern still in place?


  33. Valuation / Phil – Looking at all the numbers I thought that we would be a well over the averages but in fact besides the Shiller PE, we are below average on these valuation indicators. Of course, forward calculations are based on forward numbers which are only guesses. But even the trailing ones are better than I thought. Maybe Shiller is the only true measurement stick though… Very surprising altogether.


  34. Phil, 

     Phil: Help…

    current AAPL position 10 contr. 2015 500 call buy at $110.6, plus 10 cont. 2015 360 Puts sold at $41.6…..   The call just broke even…what is the best course to max profit….roll to 2016 530 call for even, or get the hell out given the run on appple. Thanks as always


  35. jasu / AAPL

    Why not just sell a higher strike call?  2015 $660 for $20.20 looks like a pretty good strike imo.


  36. NFLX/MrM – It's the falling 50 dma but this is a very strong move into it so better to see if it holds before catching a rising knife (or whatever the opposite is when you're shorting). 

    Shiller/StJ – That's what I go by but maybe Shiller is missing something and, of course, maybe they are wrong about the forward projections and, for certain, the trailing p/e's are on the basis of $1Tn per year of Government and Fed stimulus that we now pretend (since no one ever seems to care about the debt anymore) that we'll never have to repay and will never have a negative effect on the economy down the road.  Based on that premise – things do look pretty good!   surprise

    AAPL/Jasu – Well, you were very aggressive and, to the extent that you were worried in the past you should be cutting back now as we only sell puts on stocks we REALLY want to own at the net price.  If you didn't REALLY want to own $360,000 worth of AAPL  - you have no business being in a trade like that.  And shame on you for not doing a spread anyway.  Let's say you leave your net $60(ish) $500 calls and AAPL goes to $700.  What do you make?  $140,000.  Your risk is owning 1,000 shares of AAPL at net $420(ish) for $420,000.

    The Jan $360 puts are dead at 0.66 and you can buy those back and sell just 5 2016 $500 puts for $31 ($15,500) and buy 5 $450/600 bull call spreads for $94.50 and that's net $63.50 ($31,750) on a $75,000 spread and your net commitment to AAPL is "just" 500 shares for $281,750.  Then, if AAPL falls back to $350, you can double down for $175,000 and you have 10 at $456,750 – hardly worse off than you were before but you have half your cash off the table and you only need AAPL at $600 to make $43,250).

    If AAPL does great and plows over $650, you can always add a $650/800 bull call spread, now $32 or just roll your short $600 calls ($68.50) to the $700 calls ($34.50) and you're buying $100 more upside for $34.  That's why I never start with an aggressive spread – they are so easy to adjust once you are sure you are on track.  


  37. JPH: That's one trade I did not even think of….; 

    I was basically trying to buy more time, 18 months for the same initial 2015 outlay and then sell a 2016 call for 700, and if aapl drops, sell a put at the 400, 450 level….As Phil's dad would say, greed kills. Let me work on tos analysis….Thanks for the tip though!


  38. Phil,

    My bad: I did have a 2015 500/650 BCS with a 2015 360P……I took 21.60 profit by buying back the 650 Call early…..panic…greed, stupidty, etc. So now I have two legs open, both bullish plays that I am lucky to hold….what are my options then…..same as you suggested, or does the play change.?  


  39. Phil:

    TWO has been consolidating around the 10.25 mark for the last two months after a nice run-up from 9.0. Good support around 8.50. Any opinion on the outlook for this REIT, or any other REIT alternatives?


  40. We're a little past a week on earning on TSLA.  This is around the time they release some BS news and the stock shoots up.  It was very strong last week and continuing a move up now.  Can't wait to short the next squeeze.


  41. AAPL/Jasu – That's not stupid, you took advantage when it dipped, now it's going up and it's time to re-cover but I think you are not looking at the net profit correctly, which should be pretty good.  Same play, if you were even a little bit nervous with your open $450,000 play, why do it?  There's lots of good stocks to trade – even if you have $5M to play with, the time to go 10% in on AAPL is AFTER it falls to $350 and you have to DD, not while it's at $600.  

    TWO/Decade – Their fortunes are closely tied to the GSEs, which could be a good or bad thing.  I'd split them with NLY, to spread the risk but TWO is nice and you can buy the stock for $10.28 and sell the Jan $9 calls for $1.40 and the $10 puts for .85 for net $8.03/9.02 and you should get .25 dividends in June, Sept and Dec while you wait so, if called away over $10, you get back $2.72 on $8.03 for a 33.8% return in 8 months – pretty good.  

    TSLA/Rustle – I'm not sure what more they can say at this point.  China, Giga, Norway, New Models…  Wolf, wolf, wolf…


  42. TSLA/Phil

    Musk always has some crap up his sleeve.  He's a con man worth billions, he knows how to run a good shell game.  Taking investors money in TSLA and turning into his own through sales of options and stock.


  43. TSLA/Rustle – do I detect the sound of a short's bitter tears?

    https://www.youtube.com/watch?v=HKQMOfbEGs8

    (I was there!)


  44. TSLA/Scott

    Absolutely not, I spent $600 total on some 215 calls for this week that I bought.  Have no other position. 


  45. rustle

    I think you once test drove a TSLA and said no way. I am glad someone else says Musk is a con man. I even think how he made the billions with pay pal was slimy as an add on not needed, only thing it guarantees in internet sales is a problem takes much longer to resolve and more hoops to jump through. Like pay pal he would sell TSLA to anyone anytime, "The plan!" 


  46. Great summary of the GM issue:

    VIX still super-calm at 12.41.

    Oil $102.33, Dollar back over 80, gold $1,295, silver power-dove to $19.34 and $19.30 is our usual long line.  Nat gas $4.51, gasoline laying at $2.97.


  47. Phil/ Thanks for the explanation on USO.  I have couple of questions

    (a) I am trying to understand the DD strategy.  In this USO trade, you suggested that you'd be inclined to DD when the price hits .83.  Why not DD @ .95.

    (b)  AAPL – is ready to break out or is it being jammed to 605+ to show a decent NAS?

    Thanks for the explanations.


  48. TSLA/Shadow

    That wasn't me.  Never test drove a TSLA.  I made a shit load on TSLA so I can't complain and recently killed it on earnings.  But I HATE any CEO who manipulates stocks and causes retail people to lose money from unfair play.  Even when I'm on the side of the manipulation, I still hate him.


  49. USO/Rookie – Because, at .95, it still has a good chance to get back 40% $1.33 and get us out even.  At .83, the chance of it going up 60% to $1.33 becomes more remote but, by doubling down there, we drop the net to $1.08 and then we need just a .20 move (25%) to get out even – much more realistic.  With a June deadline on a trade we entered less than a week ago – we don't want to jump into anything too quickly.   As to AAPL, it's Monday so more likely it's simply being pushed to manipulate the market but there was a lot of progress towards a new IPhone over the weekend – looks like September roll-out, which means a huge Q4 and a beat for the year is likely.  

    • After concluding "certain aspects" of LifeLock's (LOCK -17%) Wallet app "may not be fully compliant with payment card industry (PCI) security standards," the company has pulled the app from mobile app stores and "taken steps to delete all stored information for the mobile app from [its] servers" as a precaution.
    • The widely-used app has its roots in LifeLock's $42M December acquisition of app developer Lemon, and supports the company's subscription-based identity theft-protection services.
    • LifeLock asserts its move doesn't affect those services, and that it will be "working to return a Wallet with the highest level of PCI compliance to users soon."
    • Security industry vet Graham Cluley thinks pulling the app was "the right thing to do," but also expects some fallout. "This is going to be a headache for some LifeLock users, who may have put passwords and PIN codes into their LifeLock app hoping that the service would remember them on their behalf."
    • Frozen is now the 6th highest grossing film ever in Japan after spending yet another week at the top of the box office ranking. The animated film has brought in $183M in Japan to smash estimates for the region.
    • Disneyland announced ticket prices increases for two parks in California. The company has invested heavily in upgrades at Disneyland and Disney California Adventure.
    • Hudson Square picks up coverage on Disney (DIS +0.3%) with a Buy rating and $96 price target.

     

    • If DirecTV's (DTV -2.2%) NFL Sunday Ticket deal isn't renewed on terms similar to the ones discussed, AT&T (T -2.1%) can walk away from the deal, AT&T discloses in an 8-K. DirecTV CEO Mike White says he's confident Sunday Ticket will be renewed by year's end.
    • "The last six years for AT&T have been about data, the future is about delivering video at scale," declares AT&T CEO Randall Stephenson. He states AT&T is only paying for 30% of the deal in cash to keep its powder dry. Among other things, Ma Bell plans to spend up to $9B at next year's huge low-frequency spectrum auction, and will also participate in an auction for higher-frequency AWS spectrum.
    • Also: 1) AT&T plans to grow its grow its broadband footprint by 15M homes (largely in rural areas), in part by offering fixed wireless services. 2) White says DirecTV is looking for M&A opportunities in Latin America. 3) AT&T promises DirecTV's services "will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers" for 3 years. 4) Cost synergies are expected to total $1.6B/year.
    • AT&T and DirecTV are both lower. DirecTV shareholders get 1.905 AT&T shares for each DirecTV share if AT&T trades below $34.90 at closing time, and 1.724 shares if it trades above $38.58. They get an equity payoff equal to $66.50/share if AT&T trades between those two figures.
    • More on AT&T/DirecTV
    • Goldman's Donald Lu has upgraded China Mobile (CHL +1.9%) to Conviction Buy, and simultaneously downgraded rival China Telecom (CHA -2.7%) to Neutral.
    • Lu thinks 3G/4G adoption will boost CHL's data ARPU, and help reverse the decline in its total ARPU in 2015. He adds the arrival of cheaper 4G smartphones (eventually reaching $100 unsubsidized price points) and potentially strong iPhone 6 demand will act as catalysts.
    • As for China Telecom, Lu believes a decent amount of good news, including steady earnings growth (wireline-driven) and a tower-sharing deal (will lower capex) has been priced in. He's also worried about possible share loss to CHL as the latter's 4G subscriber base grows.
    • Previous: Chinese carriers allowed to set their own prices

  50. Hard to find any 'values' out there unless materials/miners: ABX, CDE, HL, SVM, MCP, CLF, BTU 


  51. Miners are still being attacked. Abx was bottoming out at $15.4 in last Dec. Almost getting close…


  52. Phil,

    Would you take a stab at C say 5 contracts 2016 38P? Pretty close to a 52 week low…..Thankyou


  53. Some down, some still falling.. IRBT, TASR, CRAY, CREE, TREX, KBH, COH, AEO, FEIC, WFM, BBY, DDD, AMZN, HMC…


  54. OPTT/Phil – Right down by it's 2.5 strike. Buy/write entries?


  55. Values/Scott – And to play the materials, you have to have faith that the economy is getting stronger and these prices aren't BS.  

    ABX/Jasu – And gold was $1,180 in late Dec.  

    C/Jasu – I'm not a big fan of C.  BAC is a better deal to me around $14.50 and you can blow off the penny dividend and buy the 2016 $15/20 bull call spread at $1.40 and sell the $12 puts for 0.92 for net 0.58 on the $5 spread and your worst case is owning them at $12.58 (14% off).

    Falling/Scott – Same pattern as we've had all month, broad-market sell-off masked by narrow buying in the stocks that hold up the indexes.  

    OPTT/Scott – Well, if you are going to buy them, this is the spot.  They are like IRBT – you have to have long-term faith.  They just dilluted 4.5M shares at $3.10 to raise $10.8M, about a 33% float but I don't mind when companies dilute a bit to raise cash – especially when I can come in at the other side of it!  You can buy the stock for $2.44 and sell the Jan 2.50 calls for .75 and the $2.50 puts for .90 and that puts you in for 0.79/1.65 – about 30% off the current price if assigned.   That one is good enough to add to the Income Portfolio – let's call it 4,000 shares for $3,160.  

    Speaking of long-term faith – NAK finally moving back off it's below $1 slump.  


  56. In the $25KP, let's DD on the NFLX June $275 puts at .68.


  57. In the STP, We have 10 NFLX June $275 puts, now .68 and let's roll those up to the $305 puts ($2.20) and add 10 more at that price which will average us on 20 at ($1.20 (original) + $1.52 (roll cost) + $2.20 (new cost))/2 = $2.46 avg.  


  58. AZN….glad whomever here did not sell those $75 Ps, huh?


  59. Phil/Nak,

    Range is 1.7 – 0.6. So that is 1.10 and assuming 22 bounces 0.60 + 0.22 = 0.82 (weak bounce). Did I get that right?

    Thanks


  60. That's convenient, if I weren't so jet lagged, I could trade the last 2 hours from my hotel room at night with the 8 hours difference!

    I guess I'll pass now and post the lines tomorrow morning, tonight for you guys.


  61. And daylight until 10:00 PM… Northern latitudes are great! At least in the summer.


  62. rj – we avoided the fires luckily.  Not something I want to experience again, but I have a feeling that this will be a normal thing in our area for years to come thanks to global warming and continued development of the area.  Houses are being built again all over San Diego, and I think another real estate bubble is building.  People cannot afford to live here….


  63. APA for calls.  Just a TA trade. 


  64. IMGN Jun $10 Ps.  STO for 20c.


  65. AZN/Pharm – Wow, really!  That was QC – and that's a good warning to anyone who thinks those things are easy money!  

    Phil/Pharm

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

     Thanks

     

    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.  

    These deals ain't over until they are over! 

    NAK/Pat – You can't really apply the 5% Rule to something so thinly traded.  It's essentially a penny stock and will just do what it does, it's not moving with the currents with the rest of the market.  NAK is VERY speculative.  They are sitting on a massive deposit of copper, gold and moly but it's in an environmentally sensitive part of Alaska and they are at war with the EPA over whether or not they can drill it.   So this trade will eventually be a 10-bagger or zero – there's not much in between so the real play is to buy 2x at 0.80, sell 1x at $1.60 and then just forget about it until 2020.  

    Can't afford/Pharm – I was thinking about that this weekend too.  My town had its 100th year anniversary and everyone was at the park for a party and I thought about how probably 70% of the people living here now couldn't afford their own homes if they had to buy them today.  Unless we have an influx of young, rich people looking to buy homes – this does not bode well for the long-term…

    Good night StJ! 


  66. SF Fed Home sales info….good read. 


  67. Phil

    AZN   I sold a few of the jan 16  70 Puts for 4.20, that net 65.80


  68. Pharm / San Diego

    I share a house with 4 other people (girlfriend who I pay for and 3 others) and I make more than the average family working as an electrical engineer and doing personal training on the side.  Keeps my living expenses much lower while I work on paying off my hefty student loan bill, car payment, etc.  Unfortunately, my gf doesn't make much but on the flip side, at least she understands that unless she starts making more, we won't be buying a house of our own or getting married anytime soon.


  69. San Diego/JPH – I would not be able to live here were it not for us moving here 14 years ago.

    If everyone recalls watching the fires and an apartment complex on fire, well, right next to that complex are attached condos for sale.  > $500K/condo.  That is ridiculous.


  70. Home Sales/Pharm – Wow, right off a cliff!  

    AZN/QC – Much better outcome than chasing those $80 puts!  

    Good plan JPH, every $10,000 you save this early is $200,000 when you retire!  (of course, you have to actually save it and not spend it on something else) 


  71. GLD gave up all its gains today.  Next leg…down IMHO.


  72. Little surge going on into the close.  They are working hard to keep the Nas and RUT up 1%.  


  73. I'm showing no volume at all on SPY, 48M at the moment but probably delayed on Yahoo.  Even if we bump 50% into the close – 72M is very, very low.  


  74. Dow 16,511 just under strong bounce at 16,520.  S&P 1,885 is over strong at 1,879.  Nas 4,125 is under the strong bounce at 4,150.  NYSE 10,618 is just over the 10,600 goal and RUT 1,114 is still below the weak bounce at 1,120

    So, overall, not terribly impressive.  Don't forget, this is day two for bouncing – they are supposed to clear their strong bounces by now (if they are serious about recovering).  

    Nothing to do but wait and see what happens tomorrow. 


  75. UNP/Pwright – moved stop up to 191.12. I know is tight at just 2% back, but reckon this market may turn around on us at any day and will want to take profit on this, as too easy to watch the gains go right away again very quickly.


  76. Pharm/fires

    I am afraid that state and local gov. will cut back on funds for fire equipment and personnel at the time when we obviously need more of both. After almost losing our property in Co. last year to a fire I have become a little more educated on how many serious brush and forests fire are occuring on a regular basis. Not a good trend.


  77. scottmi, I have done the same, although I'm not sure how to target the stop so exactly in TOS; I've just been setting mine based on the value of the spread.  I've just set mine so it'll stop me out with a small overall profit.  I'm hoping we can get to expiration on the May4 192.5s this week with a roll, I'd like to see what the premiums are like :)


  78. More housing info….lumber.  YIKES!


  79. rj_jarboe/fires

    Are you a permanent resident of CO, or just have a second home here?

    The last couple of years it's felt like I'm living in a foreign landscape, not the Colorado Springs that I came to love.  Two years ago we lost 347 homes and 2 lives, the fireline stopping less than 1/2 mile from my home.

    Last year we had severe flash floods in Manitou Springs, 3 miles from here, and lost another 486 homes in the Black Forest, part of Colorado Springs.

    It just continues to get hotter and drier here. Many of the Ponderosa pine trees are dying off, then with high winds getting toppled..

    Guess this is what the scientists refer to as desertification.

    http://www.denverpost.com/wildfires/ci_20962119/colorado-wildfire-waldo-canyon-fire-officials-confirm-hundreds

    http://www.huffingtonpost.com/2013/07/10/black-forest-fire_n_3572931.html

    http://gazette.com/fridays-flash-floods-were-manitou-springs-worst-disaster-in-decades/article/1504673


  80. Pharm

    who is next for pfe if they are done with anz

    any guess

    thanks 



  81. El Erian in FT editorial on 'lowflation' and persistently low rates.  Uncharted territory, comments welcome.

     

    http://www.ft.com/intl/cms/s/0/f9fe9a8e-dd11-11e3-8546-00144feabdc0.html


  82. Rick Santorum. A Republican doing the math; the next election might be of some use to the country after all, irrespective of who wins.

     

      http://online.wsj.com/news/articles/SB10001424052702304422704579571881202454744?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth&mg=reno64-wsj 


  83. From Bloomberg, May 20, 2014, 2:18:57 AM

    European stock-index futures were
    little changed, with equities trading within 1 percent of a six-year high, as investors weighed corporate earnings. U.S. index
    futures and Asian shares were also little changed.

    To read the entire article, go to http://bloom.bg/1qR3pB7
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  84. From Bloomberg, May 19, 2014, 11:57:42 PM


    May 12 (Bloomberg) — Peter Esho, chief market analyst at Invast Securities Co., talks about the Australia’s government and central bank policies, and the nation’s stocks.
    He also discusses global investment strategy with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Australia’s central bank signaled it
    will keep interest rates low for some time as inflation is
    contained and the economy adjusts to fewer resource projects.

    To read the entire article, go to http://bloom.bg/1p7JjOz
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  85. From Bloomberg, May 19, 2014, 4:00:00 PM

    An employee secures a protective cap to a steel pipe destined for OAO Gazprom near Volgograd, Russia. Photographer: Andrey Rudakov/Bloomberg

    Russia is close to signing a decades-long contract to supply natural gas to China at a price that would value the deal at about $400 billion, according to Prime Minister Dmitry Medvedev.

    To read the entire article, go to http://bloom.bg/RPqh3W
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  86. From Bloomberg, May 20, 2014, 2:17:58 AM


    May 20 (Bloomberg) — Manpreet Gill, Singapore-based senior investment strategist at Standard Chartered Plc’s wealth management unit, talks about political instability in Asia and the impact on the region’s markets.
    He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Japanese shares rose from a one-month
    low, the Australian dollar dropped and nickel slid after surging
    more than 5 percent yesterday. European equity-index futures
    were little changed and the cost of insuring Thai debt jumped
    after the army declared martial law.

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


  87. From Bloomberg, May 20, 2014, 2:09:14 AM


    Customers sit at a service counter as Vodafone Group Plc employees work on a computer inside one of the company’s stores in London. Photographer: Jason Alden/Bloomberg

    Vodafone Group Plc (VOD) posted its seventh
    straight quarter of service revenue declines as funds coming in
    from Europe shrank.

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


  88. From Bloomberg, May 19, 2014, 11:57:09 PM

    May 20 (Bloomberg) –- Bloomberg’s Haslinda Amin reports on Thailand declaring martial law and what it means for the country. She speaks to Angie Lau and Zeb Eckert on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Thailand’s army imposed martial law nationwide after months of political turmoil that brought down an elected leader and tipped the economy into a contraction.

    To read the entire article, go to http://bloom.bg/R1MPhi
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  89. From Bloomberg, May 20, 2014, 12:15:17 AM

    While cybersecurity tops Director of National Intelligence James Clapper’s list of global threats for the second consecutive year, spying concerns were elevated to the No. 2 issue, a reflection of the impact on national security agencies from fugitive contractor Edward Snowden, who exposed secret intelligence collection programs. Photographer: Win McNamee/Getty Images

    China suspended its involvement in a cybersecurity working group and threatened further retaliation after the U.S. indicted five Chinese military officials for allegedly stealing trade secrets.

    To read the entire article, go to http://bloom.bg/1p7NZUv
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  90. Sent from Bloomberg for iPad

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

    Thailand 1Q GDP Contracts 0.6% on Year
    May 19: Bloomberg’s Zeb Eckert reports on Thailand’s just released GDP figures for first quarter of 2014.

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


  91. From Bloomberg, May 19, 2014, 7:00:01 PM


    May 20 (Bloomberg) — David Buckle, head of quantitative research at Fidelity Worldwide Investment, talks about the U.S., China and U.K.’s central banks’ policies.
    He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Rohit Sabhlok said he’s upset he lost a bidding war on a London house. Katy Barnes bought her home to avoid rising rents, while Holly Martin purchased hers as an investment. Both are hooked on a website that shows their property values soaring. Kay Durrant used her home’s growing equity value to pay bills.

    To read the entire article, go to http://bloom.bg/R1J0sk
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  92. From Bloomberg, May 19, 2014, 7:00:00 PM


    Logos for Visa Inc., Maestro and Mastercard Inc. payment systems sit on an automated teller machine (ATM) used by a customer inside a Credit Bank of Moscow bank branch in Moscow, Russia. Photographer: Andrey Rudakov/Bloomberg

    Visa Inc. (V) and MasterCard Inc. (MA) have about six weeks to decide whether a new Russian law requiring them to pay hundreds of millions of dollars to operate in that country is worth the cost. For now, Visa’s answer is nyet.

    To read the entire article, go to http://bloom.bg/R1I4V0
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  93. From Bloomberg, May 19, 2014, 10:03:59 PM

    Solar-powered “Supertrees” at Gardens by the Bay stand in front of commercial buildings in the central business district in Singapore. Photographer: Brent Lewin/Bloomberg

    Singapore’s economy will experience “modest” expansion this year as a tight labor market constrains some industries amid improving global demand, the government said after growth exceeded initial estimates last quarter.

    To read the entire article, go to http://bloom.bg/1oKChla
    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, May 19, 2014, 10:20:32 PM


    May 1 (Bloomberg) — Wynn Resorts Ltd. Chief Executive Officer Steve Wynn talks about the company’s business outlook for Macau.
    Wynn Macau Ltd. reported a first-quarter profit that beat analyst estimates as the billionaire’s casino drew more mass-market gamblers in the world’s largest gambling hub. He speaks with Bloomberg Television’s Stephanie Ruhle. (Excerpt. Source: Bloomberg)

    Chinese stock investors are running
    out of places to hide.

    To read the entire article, go to http://bloom.bg/1ggU8gX
    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, May 20, 2014, 1:44:20 AM


    May 15 (Bloomberg) — Paul Sheard, chief global economist at Standard & Poor’s, talks about Japan’s economy, government and central bank policies.
    Japan’s economy grew at the fastest pace since 2011 in the first quarter as companies stepped up investment and consumers splurged before the first sales-tax rise in 17 years last month. Sheard also discusses the outlook for the global economy. He speaks from Tokyo with John Dawson on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Three weeks before Japan increased
    its sales-tax for the first time in 17 years, Prime Minister
    Shinzo Abe turned to Nobel laureate Robert Shiller to try to
    restore a vital ingredient of his economic revolution: optimism.

    To read the entire article, go to http://bloom.bg/RPfI0S
    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, May 19, 2014, 9:53:43 PM

    The biggest Philippine money manager
    is reducing equity holdings on concern a rally that drove
    valuations to the most expensive level in Asia is poised to end.

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


  97. From Bloomberg, May 19, 2014, 10:41:06 AM

    The Stuyvesant Town-Peter Cooper Village in New York City. Photographer: Michael Nagle/Bloomberg

    For four years, tenants and creditors have haggled over the fate of Stuyvesant Town-Peter Cooper Village. It could all be over next month.

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


  98. From Bloomberg, May 19, 2014, 10:41:42 AM


    An employee folds a T-shirt in a clothing store in Florida. Photographer: Ty Wright/Bloomberg

    When it comes to clothing, Americans don’t need their mamas to tell them they better shop around.

    To read the entire article, go to http://www.bloomberg.com/news/2014-05-19/skimpy-clothing-prices-check-fed-s-drive-to-meet-inflation-goal.html
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  99. From Bloomberg, May 19, 2014, 4:35:38 PM

    What’s the return on investment at this table? Photographer: Bradley C. Bower/Bloomberg

    The U.S. has somehow become a country in which poker players from Staten Island, New York, to Boise, Idaho, can’t risk a few hundred bucks in an honest game without fear of criminal prosecution.

    To read the entire article, go to http://bv.ms/1j3t4N3
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  100. From Bloomberg, May 19, 2014, 5:42:52 PM


    DB HQ. Photographer: Hannelore Foerster/Bloomberg

    A story you could tell about global banking since the financial crisis is that banks, who had sort of lost themselves in the frenzy leading up to the crisis, have spent the last few years in deep introspection. They are learning who they are, and they are becoming more themselves. Deep down, UBS always knew it was a wealth manager, and Morgan Stanley is figuring out something similar about itself. Goldman Sachs, on the other hand, knows that fixed-income trading is at the core of its identity, and JPMorgan has looked into its heart and decided that being smirkily too-big-to-fail is a pretty good look.

    To read the entire article, go to http://bv.ms/1p7eOIi
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  101. Vodafone FY EBITDA falls 5.4%

    03:20 AM ET · VOD

    • Vodafone’s (VOD) FY EBITDA dropped 5.4% to £12.8B as revenue slipped 1.9% to £43.6B, hurt by the carrier’s exposure to sluggish European markets.
    • Net profit attributable to shareholders soared to £59.25B from £413M a year earlier, boosted by the sale of Vodafone’s 45% stake in Verizon Wireless for $130B, for which the British carrier received a one-off contribution of £48.2B.
    • Adjusted operating profit dropped 37% to £7.67B, mainly due to a much lower contribution from Verizon Wireless before it was sold.
    • In Q4, organic service revenue declined 3.8%, although that was slightly less than consensus of -3.9%.
    • Expects FY 2015 EBITDA to drop to £11.4-11.9B.
    • “Our operational performance has been mixed,” says CEO Vittorio Colao. While Vodafone’s “emerging markets businesses have performed strongly,” in Europe, the company continues “to face competitive, regulatory and macroeconomic pressures.”
    • Vodafone declared a final dividend of 7.47 pence a share, giving total dividends of 11 pence, up 8%. (PR)


  102. BP suffers yet another setback over 2010 oil spill claims

    02:17 AM ET · BP

    • BP (BP) has again failed in its attempt to limit the amount of compensation it will have to pay for the 2010 Gulf oil spill, with a 13-judge Fifth Circuit Court of Appeals confirming lower-court rulings and rejecting the company’s request to force claimants to prove a direct link between the disaster and any losses they may have suffered.
    • BP could now appeal to the Supreme Court.
    • The company, which has so far taken a cumulative pretax charge of $42.7B for the spill, argues that forcing it to pay what it has said are “wholly fictitious” compensation claims will cost it billions of dollars extra.


  103. German PPI decline moderates

    02:06 AM ET · EWG

    • German PPI fell 0.1% on month in April after dropping 0.3% in March but came in below consensus for no change.
    • On year, PPI -0.9% vs -0.9% and -0.8%.
    • The drop in prices for industrial products comes as the ECB considers further easing measures to battle low inflation in the eurozone, with even the Bundesbank reportedly open to significant stimulus. (PR)
    • The euro is flat $1.3707.
    • ETFs: EWG, BUND, EWGS, DBGR, GERJ, DXGE, BUNL, FGM, BUNT, GGOV, HEWG


  104. Tuesday’s economic calendar

    12:00 AM ET


  105. Credit Suisse to pay $2.6B in settlement

    Yesterday, 07:19 PM ET · CS

    • The DOJ states Credit Suisse (CS) will “pay a total of $2.6 billion – $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services.”
    • The final bill meshes with a Reuters report stating CS would pay “more than $2.5B.”
    • The bank has pleaded guilty to “conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service.”
    • CS -0.4% AH


  106. Western companies win new deal offers from oil nations, but will they come?

    Yesterday, 07:17 PM ET · TOT

    • Mexico, Iran and other countries that once played hardball with big oil companies are now rolling out the welcome mat, offering generous deals in the hope they will bring capital to stimulate output.
    • But it isn’t certain the big oil firms will want to return to all those countries, as the economics of the oil business may be changing to favor different kinds of exploration projects elsewhere in the world, WSJ reports.
    • The biggest shake-up is coming in Mexico, where production has been falling steadily while rising electricity demand has forced dependency on imported natural gas and sent prices soaring; Total (TOT), Chesapeake (CHK) and Chevron (CVX) have expressed interest in entering the country.
    • Iran is considering big changes to its current stringent oil terms, but some analysts say “it will be a slow process to get Western oil companies back to Iran… Iran’s reservoirs are prolific, but they are also complex and in poor shape.”
    • Also, he Ukraine crisis has reinforced the trend in thinking about geopolitical risk as being a big factor.
    • ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, XES, IYE, IEO, IXC, IEZ, GASX, PXE, IPW, PXJ, BARL, PXI, PSCE, FENY, RYE, FXN, GNAT, DDG, IOIL, FILL


  107. IBM buys startup to give Watson “depth of personality”

    Yesterday, 06:52 PM ET · IBM

    • IBM has bought Cognea, a startup developing virtual assistants that interact with users via A.I.-based personalities. Terms are undisclosed.
    • Big Blue plans to integrate Cognea’s technology with its Watson A.I. hardware/software, with the goal of allowing Watson to deliver “conversational services.” Potential end-markets mentioned by the company include “virtual personal assistants, health coaches, companions for elderly people, investment advisors, tutors, travel agents, customer care agents and shopping advisors.”
    • Google (Now), Apple (Siri), Nuance (Dragon Mobile), and Microsoft (Cortana) are few of the companies that have already made big investments in virtual assistant platforms.
    • IBM, hungry to halt double-digit server revenue declines, promised to invest over $1B in Watson in January, including $100M in startups working on software/services for Watson systems. But while the company is hoping Watson produces $10B/year in revenue in ten years, the platform had only produced $100M in revenue as of last October.


  108. Gold industry consolidation likely despite Barrick-Newmont merger collapse

    Yesterday, 06:33 PM ET · GDX

    • Despite the collapse of the $33B Barrick-Newmont merger last month, scarcity and extraction costs would seem to make consolidation of the embattled gold mining sector inevitable, WSJ‘s Alistair McDonald and John Miller write.
    • The gold industry ramped up exploration as prices increased 6x from 2001 through 2012 to $1,750/oz., but prices since have tapered off to ~$1,300/oz.
    • Discoveries also have tapered off: 22 gold deposits with at least 2M oz. of gold each were discovered in 1995, there were six such discoveries in 2010, one in 2011, and zero in 2012.
    • The grade of gold held by miners declined 35% from 2001 to last year, and lower grades require digging up more earth to find the metal so are more expensive per ounce; the cost of mining an average oz. of gold rose to $745 in 2012 from $280 in 2005.
    • ETFs: GDX, GDXJ, NUGT, DUST, GLDX, JNUG, JDST, RING, GGGG, PSAU


  109. Hertz plans to release delayed Q1 results by June 9

    Yesterday, 05:10 PM ET · HTZ

    • Hertz (HTZ) says it plans to release its Q1 earnings by June 9 and file its 10-Q report by June 13.
    • HTZ had postponed the filings after it discovered several errors dating to 2011 that caused it to restate results from that year.
    • HTZ says it is still reviewing whether changes to its internal control over financial reporting and disclosure controls and procedures are necessary.


  110. Reports: Apple talking with Samsung, Ahrendts hatches big retail plans

    Yesterday, 06:33 PM ET · AAPL

    • The Korea Times reports Apple (AAPL) and Samsung (SSNLF) are once more in talks to settle their far-reaching global patent battle. A source: “Samsung has recently resumed working-level discussions with Apple and the key issue is how to dismiss all lawsuits … Some more time will be needed to fix terms of details such as royalty payments.”
    • The report comes after Apple reached a settlement with Google/Motorola Mobility that didn’t feature a patent cross-license, and was awarded $120M in damages (less than a requested $2B) from a CA jury earlier this month in a Samsung suit. Apple is receiving undisclosed licensing fees from HTC as part of a 10-year settlement reached in 2012.
    • Separately, 9to5 Mac reports new retail chief Angela Ahrendts is laying out “a three-part vision for the future of Apple retail: an emphasis on China, mobile payments, and completely revamping the end-to-end Apple Store sales experience.”
    • Apple has already said it plans to triple its Chinese store count to 30 by 2016, and has been reported to be working on a mobile payments service. As part of her retail overhaul, Ahrendts is reportedly interested in “blurring the lines between Apple’s online and physical stores.”


  111. Vodafone FY EBITDA falls 5.4%

    03:20 AM ET · VOD

    • Vodafone’s (VOD) FY EBITDA dropped 5.4% to £12.8B as revenue slipped 1.9% to £43.6B, hurt by the carrier’s exposure to sluggish European markets.
    • Net profit attributable to shareholders soared to £59.25B from £413M a year earlier, boosted by the sale of Vodafone’s 45% stake in Verizon Wireless for $130B, for which the British carrier received a one-off contribution of £48.2B.
    • Adjusted operating profit dropped 37% to £7.67B, mainly due to a much lower contribution from Verizon Wireless before it was sold.
    • In Q4, organic service revenue declined 3.8%, although that was slightly less than consensus of -3.9%.
    • Expects FY 2015 EBITDA to drop to £11.4-11.9B.
    • “Our operational performance has been mixed,” says CEO Vittorio Colao. While Vodafone’s “emerging markets businesses have performed strongly,” in Europe, the company continues “to face competitive, regulatory and macroeconomic pressures.”
    • Vodafone declared a final dividend of 7.47 pence a share, giving total dividends of 11 pence, up 8%. (PR)


  112. Delphi Automotive sees China revenue doubling by 2016

    Yesterday, 05:38 PM ET · DLPH

    • Delphi Automotive’s (DLPH) China President Simon Yang foresees revenue from the country doubling to nearly $5.5B by 2016 as Chinese car makers boost their quality for increasingly discerning local customers.
    • China should account for 35% of worldwide auto sales by the end of this decade vs. 16% last year, Yang says, driven by growth in car sales, particularly upscale models that use more high-end auto components.
    • Yang also says Chinese brands could become global players if the government relaxed joint venture restrictions on foreign auto companies, even though global brands are currently taking share from Chinese rivals at home.


  113. CNBC: Alibaba’s IPO could arrive in August

    Yesterday, 04:05 PM ET · ABABA

    • Citing sources, CNBC reports Alibaba (ABABA) “could look to make its stock market debut the first week of August.”
    • The company reportedly expects to receive feedback from the SEC about its F-1 filing (published two weeks ago) as soon as June 7, and then “spend a few weeks correcting or clarifying any issues raised.” Presumably, Alibaba would then launch its IPO roadshow.
    • Yahoo (YHOO +1.4%) followed Internet peers higher today. The company sold off after Alibaba filed its F-1, but rallied in April after posting Alibaba’s Q4 numbers.
    • The Q4 figures led some of the sell-side to argue a $200B+ post-IPO valuation is possible. The recent selloff in Chinese Internet stocks might temper Alibaba’s multiples a bit.
    • Related tickers: SFTBF, SFTBY


  114. Chesapeake shares benefit from positive analyst commentary

    Yesterday, 02:59 PM ET · CHK

    • Chesapeake Energy (CHK +1.1%) gets votes of confidence from at least three market analysts after last Friday’s negative reaction to news of the details surrounding the planned spinoff of its oilfield services business.
    • Analysts at Tudor Pickering upgrade CHK’s rating to Hold from Trim, KLR Group raises its rating to Buy from Accumulate with a $37 price target (from $33), and Jefferies maintains its Buy rating while lifting its price target on the shares to $35 from $31.
    • The firms cite improved capital productivity and say Friday’s dropoff was an overreaction.


  115. Report: Verizon has held talks with Dish

    Yesterday, 02:35 PM ET · VZ

    • Sources tell dealReporter Verizon (VZ +0.1%) has held talks with Dish (DISH -0.3%). Dish shares are near breakeven after trading lower much of the day in response to the AT&T/DirecTV deal.
    • AT&T/DirecTV has fueled speculation Verizon could counter with an offer for Dish, which owns a large chunk of high-frequency spectrum that could be used to offer 4G services. But there has also been a fair amount of skepticism, particularly given Verizon just spent $130B to buy Vodafone’s Verizon Wireless stake.
    • Analyst Craig Moffett: “Dish Network has just been left standing … That Verizon might be a buyer is more wishful thinking than it is analysis.” Wells Fargo thinks Verizon might bid for Dish’s spectrum, but not the whole company.
    • The deal has also renewed speculation Dish will try to merge with T-Mobile (TMUS +2.1%), which could face tough regulatory opposition to a merger with Sprint.
    • Reuters reported in December Dish is weighing an offer for the #4 U.S. carrier, and Charlie Ergen has said a deal is a possibility.


  116. Jbur/fires

    We just have 38 acres with a RV that we visit a few time a year. We plan to build later. We are south of you. It was the East Peak fire that almost got us. I started following the forest service reports on where fires were last year and it was unbelievable how many wild fires were burning across the country at the same time. Have you gotten any moisture this year?


  117. SPY 5 MINUTEGood morning (officially)!  

    Things weren't very interesting earlier, so I went back to bed.  

    Still not very interesting, actually.

    As we thought, yesterday's volume was very low – it was actually the 2nd lowest day of the year,  that didn't stop the Nikkei and the Hang Seng from following us up half a point but Shanghai was flat at 2,008, dropping 10 points from its pumped up open and I'm sorry but you are NUTS to be too bullish in this market when that index is in danger of failing 2,000.  

    I don't mean not bullish at all – our LTP is still 100% bullish but it's hedged by the STP, which is mostly bearish.  Just – BE CAREFUL!!!

    Did you catch that news item above? "Shinzo Abe turned to Nobel laureate Robert Shiller to try to

    restore a vital ingredient of his economic revolution: optimism."  That's the World we're living in now – Central Bankers aren't even ashamed to admit that they manipulate the news and take actions aimed at making you THINK the economy is recovering.  That's based on the old "truism" that, if people are optimistic, the economy will improve but it's FLAWED because consumers no longer have any discretionary income to spend and they don't have any savings and small businesses, who still employ 80% of the workers, don't have any money to spend either.  

    They have shifted the bulk of the discretionary GDP to the top 0.01% who don't spend it at all but use it to consolidate their empires.  All these old economic rules don't apply to an oligarchy – every act of stimulus only serves to make the rich richer and push the rest of the country further into debt.  Sure, the rich are in debt too but a guy with $1Bn owes the same $164,000 per family as the guy with $100,000 does.  

    Not only that, but when you tax the top 0.01% 15-20% but tax the bottom 99.99% 35%, the money just keeps funneling to the top.  This madness has to end but, like Global Warming, it happens too slowly for most people to be aware of it until it's far too late.  Maybe it is already too late – look at the way Occupy Wall Street was crushed out of existence by coordinated thuggery by our Corporate-sponsored Governments.

    It was more sophisticated than we had imagined: new documents show that the violent crackdown on Occupy last fall – so mystifying at the time – was not just coordinated at the level of the FBI, the Department of Homeland Security, and local police. The crackdown, which involved, as you may recall, violent arrests, group disruption, canister missiles to the skulls of protesters, people held in handcuffs so tight they were injured, people held in bondage till they were forced to wet or soil themselves –was coordinated with the big banks themselves.

    The Partnership for Civil Justice Fund, in a groundbreaking scoop that should once more shame major US media outlets (why are nonprofits now some of the only entities in America left breaking major civil liberties news?), filed this request. The document – reproduced here in an easily searchable format – shows a terrifying network of coordinated DHS, FBI, police, regional fusion center, and private-sector activity so completely merged into one another that the monstrous whole is, in fact, one entity: in some cases, bearing a single name, the Domestic Security Alliance Council. And it reveals this merged entity to have one centrally planned, locally executed mission. The documents, in short, show the cops and DHS working for and with banks to target, arrest, and politically disable peaceful American citizens.

    This is over a year old but, of course, it was never even allowed on the US News.  

    As Mara Verheyden-Hilliard, executive director of the PCJF, put it, the documents show that from the start, the FBI – though it acknowledgesOccupy movement as being, in fact, a peaceful organization – nonetheless designated OWS repeatedly as a "terrorist threat":

    "FBI documents just obtained by the Partnership for Civil Justice Fund (PCJF) … reveal that from its inception, the FBI treated the Occupy movement as a potential criminal and terrorist threat … The PCJF has obtained heavily redacted documents showing that FBI offices and agents around the country were in high gear conducting surveillance against the movement even as early as August 2011, a month prior to the establishment of the OWS encampment in Zuccotti Park and other Occupy actions around the country."

    You would think the Tea Party would be outraged by this clearly outrageous Government behavior but the Tea Party is a Koch-sponsored farce, not an actual organization that actually cares about individual rights.  The GOP wants smaller Government – except for the ones that crack the heads and the Dems are no better as I haven't heard a single one stand up for these people.  

    These documents also show these federal agencies functioning as a de facto intelligence arm of Wall Street and Corporate America."

    There is a new twist: the merger of the private sector, DHS and the FBI means that any of us can become WikiLeaks, a point that Julian Assange was trying to make in explaining the argument behind his recent book. The fusion of the tracking of money and the suppression of dissent means that a huge area of vulnerability in civil society – people's income streams and financial records – is now firmly in the hands of the banks, which are, in turn, now in the business of tracking your dissent.

    Oh wait, I take it back, the Washington Post did publish something about this in their blog section – on Dec 31st, 2012 – just in time for no one to notice it.  

    Am I crazy to care about this stuff?  

    Sometimes I feel like I am, but I guess that's the point of the top 0.01% taking control of the media – the idea is to make us feel like there's something wrong with us when we question the status quo. As Orwell said and as Goebbels put into practice, history can be rewritten until people can't even remember the way things were before.  I see that all the time in my kids' "history" books.  

    Now that we are, effectively, "burning" the last of the paper books in the world (2 more generations, at most), all of history will be electronic and then, when they change it, no one will ever know.  

    Same goes with Financial Info – if you listen to CNBC or Bloomberg, oil is heading to $110 over the summer but, if you dig enough (and this one is even on Bloomberg.com), you find out this truth:

    WTI slid for a second month in April as U.S. crude inventories expanded to a record 399.4 million barrels, the highest level since the Energy Information Administration began publishing weekly data in 1982. Supplies were probably at 398.5 million barrels in the week ended May 16, according to the median estimate in a Bloomberg survey of seven analysts.

    Stockpiles at Cushing, Oklahoma, declined to 23.4 million barrels in the seven days through May 9, said the EIA, the Energy Department’s statistical arm. That’s the least since December 2008. Supplies have decreased as the southern leg of the Keystone XL pipeline began moving oil to Gulf Coast refineries from storage in January. The U.S. is the world’s largest oil consumer.

    So it's not that there's been any real draw on oil at all – new record highs means new record highs – they've just moved the oil from Cushing (where it's measured) to other places where it isn't.  

    Oil (/CLN4 = July) is $102.32 today, the boost is being caused by the rolling of /CLM4 ($102.76), which expires tomorrow, into the next month contracts.  That means, once the rolling is done – if Russia does back down in the Ukraine, the only real boost left for oil is Libya – and Libya only produces 1Mbd total.  So, still hope for a sell-off but a very tough call with the holiday weekend coming up – maybe not until next week.  

    Silver, meanwhile, tapped our long line at $19.30 again (/SI) – I still like that over the line.  Copper fell back to $3.145, nat gas is $4.46 and gasoline dove back to $2.96 and now that's a nice long (/RB) into the weekend as I'm sure they'll go for $3 again.