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Tempting Toppy Tuesday – 7th Time’s a Charm?

SPX WEEKLYWelcome back!  

Not just from your holiday weekend but welcome back to the top of the S&P as we attempt our 7th breakout of the year.  That's right, a month never goes by when we don't have a new rally that takes us back to the top of the channel, nor does a month go by when we don't re-test the bottom of the channel either – but let's ignore that as it's unpleasant.  

Interestingly, as you can see from Dave Fry's S&P chart, there have only been 9 positive weeks out of 19 in 2014 but oh boy did they make them count – with almost every one of them setting a new record – before the selling resumed.  Despite all these "records" being set, the average capital allocation strategy hasn't performed all that well in 2014, so far:

Thank goodness we're not pursuing any of those!  Thank goodness also that we didn't give our money to any hedge fund managers, as hedge funds are off to their worst start of the year since the Financial Crisis. Not listed here is our "Be the House – Not the Gambler" strategy, which we will be reviewing live today at 12:15 EST in a Live Webinar (sign up here for free). 

Selling risk to others in our Member Portfolios has given us 10%+ gains for year (so far).  In fact, the only strategy we agreed with from the above chart was gold, which we bet heavily (along with DBA) at the beginning of the year.  We were still knocking it out of the park in early May, with 40 of our 47 trade ideas in early may coming up winners already (see our May Trade Review).  

Remember, this isn't about making good picks, per se – it's about having a good strategy that gives you a high probability of success – even when you are wrong about a trade.   BEING THE HOUSE and selling risk (through options) to others is the closest thing we get to a "sure thing" in trading.  It's not fast, it's not sexy - but it works!  

Actually, I shouldn't say it's not fast, as we have plenty of trade ideas that make very quick returns on cash – even when the intention was to make a long-term trade like (from our May picks):

  • AAPL 2016 $500/550 bull call spread at $21, now $32.60 - up 64%
  • DLTR Jan $50/55 bull call spread at $2.40, selling 2016 $45 puts for $3.60 for a net $1.20 credit, now -0.20 - up 83%
  • EZCH Jan $25/30 bull call spread at $1.85, selling $20 puts for $1.75 for net .10, now .70 - up 600%
  • 10 IRBT Dec $35/45 bull call spreads at $2.90, selling 10 Dec $30 puts for $3.30 for net $400 credit, now net $50 credit - up 87% ($350) 
  • STX 2016 $52.50/57.50 bull call spread at $1.90, selling 2016 $30 puts for $1.60 and June $50 puts for $1.60 for net $1.30 credit, now 0.25 credit - up 80%

In all those cases, we SOLD more premium than we bought – that's what we teach you how to do in these Webinars (and at PSW every day!).  While it wasn't our intention to make 80% in a month, if a trade works out more successfully than we thought, the profits can come very quickly.  

The key to the strategy, however, is that – when a trade DOESN'T go your way – you are able to make adjustments that turn many of our losers into winners over the long haul.

Now that earnings season is mostly over, I'm not adverse to giving out a few freebies in the morning post.  For instance, today in the Webinar we'll be looking at ABX, which is back where we liked them in the fall at $16.50.

Using our "Be the House" strategy, we're not going to buy ABX for $16.50, though.  What we're going to do is PROMISE to buy ABX for $15 for $17 in January of 2016 by selling the put contract.  The put contract obligates us to buy ABX for $17 from the seller of the stock.  He is getting essentially insurance from us that, in his worst case, he will get $17 back for his stock.  In exchange for our guarantee, he will pay us $2.90 (up front) for our contract to buy his stock.  

That puts us into ABX at a net of $14.10, which is 14.5% below the current price.  We could leave that alone and have a very nice entry on the stock and, if ABX is over $17 in January 2016, the contract simply expires worthless and we keep our $290 (option contracts are for 100 shares each).  If ABX is below $17, we are forced to pay $1,700 anyway, but we still have our $290 for the contract, so our net on 100 shares is $1,410.

That's the most basic part of our strategy, we are NOT buying a stock, we are buying the risk of owning a stock we REALLY WANT to own anyway and getting paid for it.  We can fill our portfolios with promises to buy stocks for discounts and leave it at that and still make very nice returns but, we can also be more aggressive than that.  

In the case of ABX, we feel it's very undervalued at $16.50 and we can buy the Jan 2016 $15 calls for $3.35.  That is an options contract we buy (for $335) that allows us to buy ABX for $15, which is $1.50 below the current price.  The additional $1.85 is the "premium" we are paying for the options contract.  

But we don't like paying premium, so we SELL risk premium to someone else in the form of the ABX 2016 $20 calls for $1.55 ($155).  What we are doing there is promising to sell ABX to someone else at $20 in exchange for his $1.55 today.  This is what we call the J "Wimpy" Wellington Wealth Building Strategy!  

We DON'T actually own ABX but we did buy the right to purchase it for $15 for $3.35.  Now we are selling the right to buy it for $20 for $1.55.  That drops our net for our $15 calls to $1.80 and, of course, we have a $5 price advantage to our caller, so we never have to worry about ABX going over $20.  That nets us into the stock at $15 for $1.80 so, effectively, we're paying $16.80 for ABX or .30 worth of premium.  

What we get for our 30 cents, is 100% of the upside of ABX over $16.80 but, rather than spend $1,650 for 100 shares of stock (per contract), we're using just $180 and, up to our cap at $20, we have the potential for $320 of upside – a 177% return on our cash!  

But wait, there's more!  Don't forget we also sold the 2016 $17 puts for $3.35.  That puts another $335 in our pocket and now we have a net CREDIT of $1.55 ($155) and, if ABX is over $20, we not only keep that $155 but we make another net $500 on the spread – isn't this fun?  

That's a net profit of $655, laying out no cash at all and our worst case is we end up owning 100 shares of ABX per contract at $17 less the $1.55 net credit or $15.45 – still $1.05 less (6.3%) less than it's trading for right now.  

6.3% downside protection on our entry and we can make $655 of upside, which is 40% of ABX's current price if things go well AND we are hardly using any of our cash (we do use $333 of margin, so the return on margin is "just" 196%).  If you pursued this strategy with every stock you ever bought – would your trading performance be better or worse than it is now?  

Now you know how to construct an "artificial buy/write" – just one of the strategies we like to employ at Philstockworld.  If the indexes continue to trend higher this week, despite our skepticism, we'll be looking over our Buy List (Members Only) in our Live Chat Room and doing a bit of bargain shopping. 

I am still skeptical of the rally but we have to play the cards we're dealt.  Here's an interesting chart from the WSJ, showing how anemic this "recovery" really is.  Also, keep in mind that the US recalculated the way we measure GDP (accounting for the future value of films and TV shows, for instance), which is a big part of the boost we have vs everyone else.  

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  1. Good Morning!


  2. Good morning!


  3. howdy howdy howdy


  4. Good morning!

    Oil back to $104 and failing it this time (/CL), so a good short below the line.  Hopefully we get a big one this week.  


  5. $103.80 – guess I can afford breakfast today!  


  6. lordie i hope so.

    phil / mods
    since you're using ABX,, I've had them for quite a while, wiring for them to get some legs.
    -10 June $17 calls ( 0,26 )
    Jan15 BLCS $15-25 ( $3.80 )
    Jan16 $17 short Puts ($2.75 )
    obviously the new entry you run through is more aggressive, nut you modify anything here or just let it run out. 
    My first temptation is to roll the short $25s down to the $20's, but then I second guess myself – not sure why.
     


  7. $103.75 should be support and the fall from $104.50 is 0.75 so .15 bounces to $103.90 and $104.05 (strong) are what we're looking for.  If $103.90 fails, then it's likely $103.75 will fail so re-enter short around $103.95 with a tight stop if we pop $104.05 and then we wait to see how high they can go.  


  8. ?????? ????

    Oil Lines

    R3 – 105.08
    R2 – 104.76
    R1 – 104.56
    PP – 104.24
    S1 – 104.04
    S2 – 103.72
    S3 – 103.52

    Last full day in Russia – meetings all evening and tomorrow leaving for France where I will be for 10 days and hopefully a more relaxed schedule!


  9. I guess the Russian characters don't show up… Oh well, it was good morning in Russian!


  10. ABX/Wombat – In the LTP, we have the 2015 $13/20 bull call spread with the short 2016 $15 puts from a Dec entry.  Your Jan $15s are $2.40 so I'd want to protect that and invest in a roll to the 2016 $13s at $4.60, so you are paying $2 for $2 in position and getting a year for free.  As to the short Jan $25s, now $.15 – I'd buy them back and wait for a bounce but capitulate and sell the 2016 $17s (now $2.50) if they can't hold $16.  As long as you get $2 for the $17s, it pays for your roll. 

    Wow, there's Goaaaaaaaaaaaaallllllllll at $103.75 already.  Now we'll see if it's going to be bouncy or fails.  Doesn't look like it will hold, actually – very fast drop…

    Dollar 80.40 – about last week's level.  

    Gasoline back to $3 as well after that BS pump job on Friday.

    Enjoy France, StJ! 


  11. Phil // ABX
    Don't know if this alters, but except the monthly short calls, everything is Jan16 – not 15


  12. Markets open higher on positive data

    09:35 AM ET

    • Dow +0.34% to 16,662.50. S&P +0.39% to 1,907.90. Nasdaq +0.59% to 4,210.31.
    • Treasurys: 30-year +0.1%. 10-yr +0.02%. 5-yr -0.03%.
    • Commodities: Crude -0.66% to $103.66. Gold -1.07% to $1,278.10.
    • Currencies: Euro -0.09% vs. dollar. Yen -0.01%. Pound +0.15%.


  13. Stock futures supported by upbeat economic data

    09:25 AM ET

    • Stock futures trade near their best levels of the morning after better than expected data on April durable goods orders and March Case-Shiller home price data; S&P and Dow +0.4%, Nasdaq +0.5%.
    • European shares continue higher after yesterday’s strong showing following the weekend presidential vote in Ukraine; Asian equities ended mostly lower after the latest flare-up of tensions in the South China Sea.
    • Treasurys are off to a tepid start after the long weekend, as the 10-year note is up one tick with its yield at 2.53%; precious metal prices are sharply lower, with gold and silver down 1% and 1.3%, respectively.
    • Still ahead: consumer confidence, Richmond Fed, Dallas Fed.


  14. Gold slips amid slow Chinese demand

    09:25 AM ET · GLD

    • Chinese net gold imports from key conduit Hong Kong fell to 67.04 tons in April, down from 85.13 tons in March, and the lowest level since February 2013. A gold trader in Shanghai notes Chinese banks are flush with the metal, having imported a record 1.16K tons in 2013.
    • As China slows though, Morgan Stanley says policy changes in India could be supportive for gold, pointing to an easing of import rules by the country’s central bank. The support is likely to be modest, says Morgan, as much of the
      “lost” demand from tighter rules was being met by unofficial imports. “The effective rise in gold imports will be much lower on a net basis.”
    • Gold is off 1% in morning action to about its lowest level since early February at $1,278 per ounce. GLD -1.3%
    • ETFs: GLD, IAU, SGOL, UGL, DGP, GLL, UGLD, DZZ, DGL, DGZ, DGLD, AGOL, OUNZ, UBG, GLDS, GLDL


  15. Cisco +1.6% on Deutsche upgrade to Buy

    09:18 AM ET · CSCO

    • Talks at last week’s Cisco Live conference with management and IT product buyers/distributors leaves Deutsche confident about a “stronger than anticipated [multi-quarter] ramp for Cisco’s new switching, routing, security, wireless, and Cloud IT Services solutions.”
    • The products in question include Cisco’s (CSCO) Nexus 9000/ACI switching/SDN platform, its CRS-X and NCS core routers, Meraki’s Wi-Fi hardware/management software, and SourceFire’s security hardware.
    • Deutsche’s PT has been upped to $30. A long line of firms hiked their PTs two weeks ago following Cisco’s FQ3 beat and better-than-expected FQ4 guidance.
    • Deutsche had downgraded Cisco to Neutral in November (following weak FQ2 guidance), when shares were at ~$21.


  16. FHFA Housing Price Index

    09:09 AM ET


  17. S&P Case-Shiller Home Price Index rises in March

    09:01 AM ET


  18. Biocryst drug hits primary endpoint

    08:58 AM ET · BCRX

    • In a 24-patient Phase 2a OPuS-1 clinical trial, Biocryst Pharmaceuticals (BCRX) hereditary angioedema drug BCX4161 achieves its primary endpoint of a statistically significant reduction in mean angioedema attacks versus placebo. The mean attack rate was 0.82 for BCX4161 compared to 1.27 for the control group.
    • CMO Dr. William Sheridan says, “The efficacy and safety profile of BCX4161 seen in the OPuS-1 trial strongly support its continued development.”
    • Shares are up 23% premarket on heavy volume.


  19. KKR offers $1.1B for Singapore’s Goodpack

    08:43 AM ET · KKR

    • Goodpack is a provider of bulk containers and KKR‘s offer of S$2.50 per share is a 6.8% premium to Friday’s closing price. The stock is higher by 20% this year vs. a 3.5% gain for the Straits Times Index.
    • Goodpack Chairman David Lam, an owner of 32% of the stock – is supportive of the bid.
    • KKR has promised to get busier in the Asia-Pacific region and this bid follows this month’s $2.8B attempt (failed thus far) to buy Australia’s Treasury Wine Estates, and the purchase of an 80% stake in Panasonic Healthcare in March.


  20. InterContinental Hotels higher amid buyout talk

    08:41 AM ET · IHG

    • Shares of InterContinental Hotels (IHG) are higher in premarket action after the company reportedly rejects a £6B from a U.S. hotel concern.
    • Analysts have a mixed read on if InterContinental will engage in serious talks on a new bid.
    • IHG +3.4% premarket


  21. Durable goods rises 0.8%

    08:31 AM ET

    • Apr. Durable Goods: +0.8% vs. -0.8% expected, +3.6% prior (revised).
    • Ex-transport +0.1% vs. -0.1% expected, +2.9% prior (revised).


  22. Staples chopped down by Goldman Sachs

    08:13 AM ET · SPLS

    • Goldman Sachs downgrades Staples (SPLS) to a Sell rating from Neutral.
    • Structural challenges will dominate the story on Staples, according to Goldman.
    • The ratings cut stings a little bit more than most with the investment firm raising Office Depot to Buy on the same day.
    • SPLS -1.3% premarket


  23. Ukraine could pay Russia an initial $2B in proposed deal to resolve gas dispute

    08:13 AM ET · OGZPY

    • Russia and Ukraine take a tentative step toward resolving the dispute that threatens to cut off Ukraine’s gas supply, as the two governments agree to consider a deal in which Ukraine would quickly pay Russia $2B on Thursday, followed by negotiations on Friday over the price Russia charges Ukraine for its gas, EU Energy Commissioner Günther Oettinger says.
    • The deal first would need to be approved by Moscow and Kiev, as well as the boards of state gas companies Naftogaz of Ukraine and Gazprom (OGZPY) of Russia.
    • However, emboldened by the election of a new pro-Western president, Ukraine PM Yatseniuk says Gazprom owes Kiev natural gas worth ~$1B which it had “stolen” when Moscow annexed Crimea.


  24. Box office wrap: X-Men dominates, Godzilla slows, new Disney princess on tap

    08:08 AM ET · FOXA

    • 20th Century Fox’s (FOXA) X-Men: Days of Future Past earned $171.1M in a broad global opening during the Memorial Day weekend. A CinemaScore of “A” for the film indicates the latest installment in the X-Men franchise could have some legs.
    • Godzilla has fallen off its torrid early pace with word-of-mouth mixed after Warner Bros. (TWX) clever marketing held up demand early. A U.S. tally of $205M-$225M is now forecast.
    • On tap: Disney (DIS) looks to continue its runaway princess success with Maleficent opening at the end of the week. A $60M opening is forecast.


  25. BofA resubmits capital plan to Fed

    08:00 AM ET · BAC

    • “The third party review has been completed and resulted in additional adjustments that had a de minimis effect (less than one basis point reduction) on the Corporation’s reported regulatory capital ratios for the period ended September 30, 2013, and no effect on such ratios for the period ended March 31, 2014.”
    • The Fed has up to 75 days to review the resubmission.
    • BAC +1.4% premarket


  26. JinkoSolar -7% as earnings miss estimates

    07:50 AM ET · JKS

    • JinkoSolar (JKS) -7.1% premarket after reporting Q1 earnings that fell far short of expectations, although net income of $1.5M compared with a $20.7M net loss in the year-ago quarter.
    • Total solar product shipments were 581.2 MW vs. guidance of 440-470 MW given at the end of Q4, a 0.9% Q/Q decrease but a 71.6% Y/Y increase.
    • Gross margin was 24.0% vs. 24.7% in Q4 2013 and 12.7% in Q1 2013.
    • Expects Q2 total solar module shipments of 570-600 MW; for FY 2014, reaffirms expectations for total solar module shipments of 2.3-2.5 GW, with total project development scale above 400 MW.


  27. Office Depot back in favor at Goldman Sachs

    07:39 AM ET · ODP

    • Goldman Sachs upgrades Office Depot (ODP) to a Buy rating from Neutral.
    • The investment firm bumps up its price target on the office supply chain to $7.00.
    • ODP +4.6% premarket


  28. More guilty pleas coming from Swiss lenders?

    07:38 AM ET · HSBC

    • Feeling its oats after getting Credit Suisse to plead guilty to tax evasion, the DOJ looks set to quicken the pace on investigations of 13 others Swiss lenders, including the Swiss unit of HSBC. Of the 13 under the scope, only HSBC has substantial U.S. operations.
    • “It looks like DOJ has a plan in certain cases where they can get a guilty plea but not destroy the bank,” says former IRS deputy commissioner Mark Matthews. “I’m sure that any bank confronted with that can hardly take comfort.”


  29. Food sector on watch after mega-merger

    07:28 AM ET · PPC

    • A $6.4B offer by Pilgrim Pride’s (PPC) to buy Hillshire Brands (HSH) could rattle the food sector.
    • For starters, the deal could spoil Hillshire’s offer on the table to buy Pinnacle Foods (PF).
    • The quick analyst take on a PPC-HSH combination is favorable with the companies focused in different areas (chicken vs. packaged meat) which could lead to easy access to new distribution channels.
    • Premarket: HSH +22.9% to $45.49, PF -5.3% to $31.50.
    • Also on merger watch in the food sector: THS, SJM, GIS, KRFT, CPB, ADM, BGS, RAH, HAIN, K CAG


  30. Macau revenue growth for May tracking with estimates

    06:09 AM ET · MPEL

    • Casino revenue in Macau is up 15% for the first 25 days of the month, according to a read from Sterne Agee.
    • The pace of sales growth is in-line with the consensus estimate of analysts for the month.
    • Forecasts call for 12% to 17% growth for casino operators for the year.
    • Macau related stocks: MPEL, MGM, WYNN, LVS, GXYEF, SJMHF


  31. Sony CEO states possible TV profit even with sales miss

    03:25 AM ET · SNE

    • Sony (SNE) CEO Kazuo Hirai has announced a possible profit from TV units despite a continuing slump in sales.
    • “The company’s struggling TV unit could make its first profit in more than a decade even if it misses sales forecasts by as much as 16%,” Hirai says.
    • The Sony chief exec cut last year’s net-income forecast three times, and the company unexpectedly forecasted a ¥50B ($491M) net loss this year while cutting more jobs and selling assets to build up its PlayStation 4 gaming system.
    • Previous coverage


  32. Phil we need to set up a play on HSH up from 37 to 45 all sheep are running suggest to sell Jul 14 44 caller for 2.00 


  33. one more piece of the puzzle/ ABX
    so, for to mention got to mention ABX goes ex-dive tomorrow, hence the dive today.
    so I've bought back my Jan16 short $25's, and bought 25 June $200 calls to play the bounce.
    This will give me enough to roll down my longs or my short puts >
     

    It sound alike your more concerned about the short puts, correct ?


  34. $20 calls/


  35. QUIK briefly mentioned in Barron's as a potential takeover candidate for GOOG.  Very much a long shot IMO.


  36. ABX/Wombat – No, 2016 is better for your roll down and I'd still buy back the short $25s (.66) and see if it bounces.  And no, I'm not concerned about the short puts at all because I still think the VALUE of ABX is over $20 and because you are a young man with another 20 years to roll the short puts down to lower strikes.  

    HSH/Yodi – They got a cash offer, at $45, if the deal is upped by 5% you lose very fast with nowhere to run – not for me. 

    QUICK/Albo – GOOG buys an average of one company every two weeks.  There's only 9,000 stocks so, in 30 years, they will have bought 10% of the market at this pace – that puts anyone in play, but I wouldn't buy things based on that – I prefer to buy things based on good values and, if someone else recognizes it and buys them – so much the better.  

    Speaking of values – our CMG is now $531.  That's a good example of value trading because, at $600, we were shorting it because we thought it was only worth $550 and then, when it fell below $500, we flipped long – because we thought it was worth $550.  Our VALUE premise doesn't change – the strategy changes when the PRICE of the stock changes – the rest is just common sense.  

    LQMT back to 0.18, lets buy 10,000 shares for $1,800 in the $25KP.  


  37. Phil // Thanks
    Thats pretty much what I did. I've studying behavior of stocks going ex-dix and its seems to me, days before they go ex-dix, the crash, then pop up into ex-dive ( sometimes over compensate ) They then sell off about half the gains, and then return to normal.
    So the only difference is I bought some short terms calls.

    You wanted me to remind you about 
    EBAY and NFLX today – moved way against us and they're June.


  38. Oil coming back over $104 without a pause so no entry until it calms down, back to below the $104 line or $104.20 with a stop at $104.27 or, of course $104.45 with a stop at $104.55.  

    EBAY/Wombat – What about them?  I totally forgot.  Might take me until after lunch to get back in the swing of things apparently.  


  39. FU PCLN!!!!

    FU TSLA!!!!


  40. Phil / EBAY
    5/22 Conviction PUTS on EBAY long Jun15 $45

    5/19 DD on NFLX long Jun14 $305 puts


  41. Gold shorts….whoa…yeah!  Selling 1/2.  Just a smidge more to go and then out.  Trailing stop is 10c. 

    SPY May5 192 calls that were bought for 8c…all out.  Now 43c. Booyah!


  42. EBAY/Wombat – I was short on EBAY?  Now I'm massively confused.  I like EBAY, we bet EBAY long last I remember.  As to NFLX, that one I do have a conviction short on.  In the STP, we now have 10 June $275 puts at $1.20, which are now 0.19 – there's not much to do with those but accept the $1,200 loss but I'll look for more, longer puts on NFLX and, eventually, we'll catch them at the right time.  

    In the LTP and the Income Portfolio, we're still long on EBAY. 

    Gold/Pharm – $1,271, maybe we'll see $1,250 again. 


  43. Dallas Fed not good – and that was the hot one:


  44. Major Earnings for the Upcoming Week:

     

    Monday: N/A

     

    Tuesday: AZO, JKS, QIHU, WTSL, WDAY

     

    Wednesday:  BWS, CHS, DAKT, DSW, PANW, PLKI, TOL

     

    Thursday: ANF, AVGO, COST, EXPR, GES, LGF, PSUN, SPLK

     

    Friday: BIG

     

    Economic Releases (5/26-5/30):

     

    Monday:

     

    Markets Closed in Observance of Memorial Day

     

    Tuesday:

     

    7:30 am CT – Core Durable Goods Orders

    8:00 am CT – Housing Price Index

    8:30 am CT – ECB President Draghi Speaks

    8:45 am CT – Flash Services PMI  

    9:00 am CT – Consumer Confidence

    9:00 am CT –Richmond Manufacturing Index

     

    Wednesday:

     

    TBD

     

    Thursday:

     

    7:30 am CT– Weekly Jobless Claims

    7:30 am CT– Preliminary GDP

    9:00 am CT– Pending Home Sales

    9:30 am CT – Natural Gas Storage

    10:00 am CT – Crude Inventories  

     

    Friday:

     

    7:30 am CT – Personal Spending/Income

    8:45 am CT– Chicago PMI

    8:55 am CT– University of Michigan Consumer Sentiment

    4:00 pm CT– FOMC Member Plosser Speaks  


  45. Thanks QC.  

    Nice link to a bunch of great colorized photos – things we are used to only seeing in black and white:

    Albert Einstein, Summer 1939 Nassau Point, Long Island, NY

    This was funny:


  46. Don't forget, I have a Webinar at 12:15 – part of a group session going over "Be The House" for new peoplehttps://wci.webex.com/wci/onstage/g.php?t=a&d=665752074


  47. PCLN wtf?

    Why is PCLN up 55 points — so much better than the others with no news?


  48. How's PNRA look at current prices?


  49. PCLN/Jabob – The Street just issued a BUYBUYBUY report on them.  You can short again when Cramer's sheeple finish plowing in but $1,260 pushes the forward p/e over 20 and that should provide some resistance as it's also the strong bounce off the drop from $1,350 to $1,100.  I can't believe you still short this stock – it's probably tied with TSLA as the hardest stock to short.

    PNRA/JMD – I like CAKE much better.  PNRA is in a good growth phase though and $150 is probably the bottom of the channel but I wouldn't expect a big move back up anytime soon.  You can sell the 2016 $130 puts for $10 for a net $120 entry on just $12 of margin – that's they way I'd play for an initial entry.  


  50. Phil did I see you say somewhere that you were going to be doing the regular Tuesday webinar on Wednesday this week? 


  51. FWIW -Another view on ABX from Larry Edelson of Weiss Research. Don't know if he has any credibility or not, but definitely not a fan of Barrick Gold:

    "For instance, Barrick Gold Corp. (ABX), the world's largest gold mining company, has $1.5 billion of debt maturing next year. It's issuing new equity to investors to help pay off that debt, thus diluting shareholder equity.

    In addition, it's looking to merge with giant Newmont Mining (NEM) to also help out its debt malaise by reaching economies of scale via merging with another giant.

    Newmont is a top-notch miner, but if it merges with Barrick, which I expect it will, then Newmont will lose its independence and get saddled down with Barrick's problems."


  52. The week's events 

    Data deck for 26 – 30 May 

    Date 

    Time 

    Indicator 

    Period 

    BofAML Estimate 

    Consensus 

    Previous 

    5/27/14 

    8:30 

    Durable Goods Orders 

    Apr 

    -0.6% 

    -0.7% 

    2.5% 

    5/27/14 

    8:30 

    Durables Ex Transportation 

    Apr 

    0.0% 

    0.0% 

    2.1% 

    5/27/14 

    8:30 

    Core Capital Goods Orders 

    Apr 

    0.3% 

    -0.3% 

    2.9% 

    5/27/14 

    9:00 

    S&P/CS Composite-20 yoy 

    Mar 

    11.8% 

    11.8% 

    12.9% 

    5/27/14 

    10:00 

    Consumer Confidence 

    May 

    83.5 

    83.0 

    82.3 

    5/29/14 

    8:30 

    Initial Jobless Claims 

    24 May 

    320k 

    317k 

    326k 

    5/29/14 

    8:30 

    GDP qoq (Annualized) 

    1Q S 

    -0.7% 

    -0.5% 

    0.1% 

    5/29/14 

    8:30 

    GDP Price Index 

    1Q S 

    1.3% 

    1.3% 

    1.3% 

    5/29/14 

    8:30 

    Core PCE (qoq) 

    1Q S 

    1.3% 

    1.3% 

    1.3% 

    5/29/14 

    10:00 

    Pending Home Sales 

    Apr 

    2.0% 

    1.0% 

    3.4% 

    5/30/14 

    8:30 

    Personal Income 

    Apr 

    0.4% 

    0.3% 

    0.5% 

    5/30/14 

    8:30 

    Personal Spending 

    Apr 

    0.0% 

    0.2% 

    0.9% 

    5/30/14 

    8:30 

    PCE Core Prices (yoy) 

    Apr 

    1.5% 

    1.4% 

    1.2% 

    5/30/14 

    9:45 

    Chicago Purchasing Managers 

    May 

    61.0 

    60.8 

    63.0 

    5/30/14 

    9:55 

    U. of Michigan Sentiment 

    May F 

    82.5 

    82.5 

    81.8 



  53. Webinar/Craig – Yes, our regular Webinar is tomorrow at 1pm:  https://cx955.infusionsoft.com/app/linkClick/95836/5bb09b1f42142b1c/86104154/10ade2ba8c4e14f6

    It's getting crazy, there were over 300 people on the one we just had.  

    ABX/Albo – Bigger is better in mining, for reasons I just outlined in the Webinar.  I never mind if companies issue stock to pay off debt – it's better than using cash.  

    Dollar 80.50 so kudos to the indexes for holding up.  

    RUT up 1.17% and still miles away from 1,200.  Others up about half a point.  

    Gold $1,266, oil $103.92.  /YG is a good long above $1,265 with a tight stop below. 


  54. Phil// Question on SLW – Looks like it is falling hard?  When do you see a turn around in the metal stocks like ABX, SLW, etc?  Thanks.


  55. Larry Williams re Gold.. from 2005 but still some great info

    http://www.trade2win.com/articles/842-all-you-wanted-know-about-gold/p/1

     

    ?


  56. If we get the strong bounce on the RUT, do we push some more bullish bets or is it too delayed?


  57. Now that Rut has broken above 1130 are you more prone to viewing the RUT making a run to 1200 before we see it revisit 1100? I still see the record highs as silliness. XRT slid briefly over 84 this morning and I missed the opportunity to buy some puts at that price.


  58. PCLN: I adopted Phil's 4 friends approach 'cashy, cautious, short term short and long term long :) '

    Cashy: just closed out Jun 1140/1180 – sold the 1140 for $60 and rolled the 1180 to the Aug 1240 for a scratch.

    Cashy – sold 10; Jun 1060 puts @ $38.75, now at $1.62

    Cashy – long 10; Oct 1100/1175 BCS

    Cautious – sold 20; Jan 15 1195 puts @ $162, now @ $94

    Short term short – sold 20 Jan 15 1300 puts @ $144, now @ $97 (covered by the short puts above

    Long term long – 30 Jan 16 1200/1400 BCS

    So plenty of opportunities for PCLN to bite back, and as many questions I will be asking from now on to Phil on how to adjust. Thinking about PCLN is so much easier when earnings are a couple of months away.


  59. Correction: PCLN Short term short – that should be 'sold 20 Jan 15 1300 calls @ $144, now @ $97'


  60. buying some AAPL calls before the split ?

    whenever anything seems totally obvious, i usually get burned.

    Anyone ?


  61. Florida…going under water. 


  62. SLW/Phil      Phil, I'm thinking of a long position on SLW, possibly a buy write & selling 2016$ 20 calls and $18 puts.  Do you like that, or perhaps artificial?  A buy write get you back to 2010 prices.  Thanks


    • Dow +0.37%.
    • 10-yr +0.08%.
    • Euro -0.2% vs. dollar.
    • Crude -0.3% to $104.04.
    • Gold -1.92% to $1,267.10.
    • "The market is not cheap but it is not especially expensive either," writes Laszlo Birinyi,calling for the S&P 500 to take out 1,970 between now and the end of September. Lackluster economic data, so-so corporate earnings, and blowups in many Internet, social media, and biotech names aren't a concern, but instead a positive. "The overall market is shrugging off the tech and biotech problems, and that’s important … [it's] “the last stage of a great bull market. It’s the exuberant phase.”
    • Of his relatively muted call (1,970 is little more than 3% above the current level): "To suggest that we will leave NY on Monday morning and arrive in LA mid-Saturday ignores the possibilities of detours, flat tires, bad weather and other realities … We are still of the belief that this market will, like others before it, end with a burst of enthusiasm, with magazine covers and with detailed stories about the stock market perhaps even making it to page one now and again."
    • The Obama administration is planning to introduce next week a new climate-change initiative that would allow states to use cap-and-trade systems, renewable energy and other measures to reduce carbon emissions by existing power plants.
    • The proposal, which would affect hundreds of power plants nationwide, is designed to allow states some flexibility in meeting benchmarks instead of placing emissions limits on individual plants.
    • The EPA is scheduled to complete the rule by June 2015 with states submitting their plans the following yea. but likely lawsuits and political opposition could easily upend that timeline.
    • ETFs: XLEXLUTANERXKOLIDUVDEOIHERYVPUDIGDUGIYEPXJRYE,FENYUPWFUTYRYUFXNPUIFXUDDGSDPPSCU
    • In a "fireside chat" at the Deutsche conference, Daniel Pinto, CEO of the Corporate and Investment Bank at JPMorgan (JPM +1%) says little has changed since the sluggish update on trading revenue the bank gave in its 10-Q at the start of the month.
    • Previously: JPMorgan warning hits the big banks
    • The accounting error had zero impact on operations, says Dick Bove, and it now appears no impact on capital ratios either. Buy the stock, he says, as the higher dividend and initiation of the buyback should soon be re-approved.
    • Bank of America's (BAC +3.6%) capital plan – initially approved by the Fed but then suspended following the error - was for a boost in the dividend to $0.05 per share from a penny, and a $4B buyback.
    • Previously: BofA resubmits capital plan to Fed; "de minimis" effect
    • In other bank news, the lender has been hired by the Sterlings to sell the L.A. Clippers, reports Bloomberg, which says the asking price could be at least $1B.
    • North Atlantic Drilling's (NADL +8.9%) deal with Rosneft (RNFTF) is particularly good news for Seadrill (SDRL +1.5%), Cowen's J.B. Lowe says, as SDRL gains a foothold into the Russian market, adds significant backlog during the market downturn and monetizes part of its North Atlantic Drilling investment; also, a cash infusion is a positive given growing concern over SDRL’s ability to pay its dividend.
    • Morgan Stanley’s Ole Slorer thinks the deal is good for the entire industry, seeing the reduction in near term rig availability as an important turning point for the entire offshore driller space; it also expects further contract signings in Brazil and west Africa to help reverse current beaten down sentiment.
    • Lowe likes Transocean (RIG +1.6%) among drillers in the North Sea, where the number of rigs will drop as NADL's rigs head to Russia, while Slorer recommends laggards with limited business in Brazil, such as Helix Energy (HLX), Oceaneering (OII) and Frank’s International (FI).
    • With an increased focus on high quality production, Barrick Gold (ABX -3.3%) CEO Jamie Sokalsky is eyeing expansion plans for Nevada, where ABX got ~40% of its gold last year.
    • ABX’s plans in Nevada include working on a study for its Goldrush discovery, examining the potential for deeper mining at the nearby Cortez Hills mine and considering an expansion at the Turquoise Ridge mine; also, it is investing more in early-stage projects owned by exploration and development companies.
    • Sokalsky says merger talks with Newmont Mining (NEM -2.9%) are “finished" and ABX is focused on its strategy as a stand-alone entity, but remains interested in looking for ways to cut costs by cooperating with NEM in Nevada, where the companies run multiple operations near each other.
    • South African mining production plunged 24.7% Y/Y in the three months through March, the biggest quarterly drop since Q2 1967, and helping send the country's Q1 GDP down 0.6% Y/Y in its first contraction in five years, the government reports.
    • A four-month-old miner's strike at South Africa's three biggest platinum producers – Anglo American Platinum (AGPPY), Impala Platinum (IMPUY) and Lonmin (LNMIF) – has cost the companies more than 470K oz. of production in Q1 and 19.8B rand ($1.9B) to date in lost revenue.
    • A South African labor court judge is now mediating talks between the companies and the miner's union – a step supported by both sides but she can’t impose anything on the parties.
    • ETFs: PPLTPTMPGM
    • Canadian Solar (CSIQ) is forming an 80/20 JV with China's GCL-Poly to "build a manufacturing site to produce crystalline silicon solar cells in Funing, Jiangsu Province, China."
    • The plant will initially have a 300MW/year production capacity; the site can handle up to 1.2GW/year capacity if needed.
    • CSIQ expects to use the plant to produce cells with a 19% conversion efficiency by year's end, and notes the JV will boost the company's total cell manufacturing capacity to 1.56GW.
    • Also: CSIQ announces it has won a deal to supply 2.5MW of modules for a South Carolina solar farm. Shares are rallying on a good day for tech, after recently getting clocked due to disappointing Q2 guidance.
    • Channel checks from Cleveland Research indicate strong demand in North America for commercial trucks.
    • The investment firm bumped up its annual forecast for heavy-build truck sales due to the mid-year read.
    • Related stocks: CMINAVPCAROSKVOLVY.
    • Starbucks (SBUX +2%) will open the doors to a fast-casual La Boulange restaurant in Los Angeles on June 12.
    • The company already runs several La Boulange restaurants in San Francisco with early reviews largely positive.
    • The outlet in L.A. will serve standard La Boulange fare until 7:00 p.m. after which time the menu will include croissant burgers, wine, and cocktails.
    • The company hasn't been specific about the direction of the La Boulange brand. "You will see us experiment with La Boulange through various brand extensions," teases one Starbucks exec.
    • This could be the quarter that Michael Kors (KORS +0.1%) sees a reality check, warns Barclays.
    • Amid a new rush of analyst upgrades and glowing commentary, the investment firm thinks the luxury brand is bumping up against a point of maturity due its red-hot growth track.
    • Aside from Barclays, the consensus on the Street is chiefly for another Michael Kors earnings blow-out. The company has dazzled with its last few reports and Tiffany'sshowed last week that luxury demand is still vibrant.
    • Analysts expect Michael Kors to report EPS of $0.68 and revenue of $815.3M. The crowdat Estimize is at $0.76 and $857M.
    • Shares of AutoZone (AZO -2.1%) are under pressure despite the company beating estimates on both lines of its FQ3 report.
    • Raymond James isn't the only firm to note that AutoZone's double-digit rate of inventory increase during the quarter could spell trouble.
    • Advance Auto Parts (AAP -1.6%) and O'Reilly Automotive (ORLY -0.9%) are also weak on the day.
    • A "material ramp" in high-margin enterprise drive shipments in 2H14 could provide$0.30/share in upside to Seagate (STX +2.6%) EPS estimates, writes RBC's Amit Dayanani.
    • Daryanani thinks enterprise drives carry a 40%+ gross margin, well above a company-wide FQ3 GM of 28.5%. He believes Seagate can deliver $7+ in FY16 (ends June '16) EPS, aided by cost controls, buybacks, and a 30% GM.
    • Seagate's enterprise drive sales rose 200K Y/Y in FQ3 to 7.7M. They've been pressuredby weak enterprise server/storage demand, but have also received a lift from strong demand from Web/cloud clients. The latter customer base often prefers higher-density/lower-margin enterprise drives.
    • Western Digital (WDC +2.6%) is once more heading in the same direction as Seagate, as is assembly supplier Hutchison (HTCH +2.9%).
    • In a surprising move, Intel (INTC +1%) will work with Rockchip, a fabless Chinese chipmaker known for its ARM-based mobile processors, to develop a baseband/app processor based on Intel's SoFIA platform. The product will be aimed at the low-end tablet market.
    • The Intel/Rockchip solution will pair a quad-core Atom CPU with a 3G modem, and is expected to launch in 1H15. Intel already plans to offer a dual-core 3G SoFIA part for the large but cost-sensitive low-end Android phone market by Q4, and to offer a 4G version in 1H15.
    • Intel hopes the tie-up will help it be more price-competitive in a baseband/app processor market currently dominated by Qualcomm (QCOM +0.5%) and (to a lesser extent) MediaTek. Strategy Analytics estimates Qualcomm had 64% of the 2013 baseband market, MediaTek 12%, and Intel 8%.
    • The announcement comes as Intel gets set to launch Moorefield, a standalone app processor for sub-8" tablets. Moorefield is smaller and runs cooler than Bay Trail, which launched last fall.
    • Intel, which aims to ship 40M tablet CPUs this year, reported a giant $3.1B 2013 op. loss for its mobile reporting unit, thanks in part to marketing subsidies to OEMs. Morgan Stanley estimates the business will need to reach $8B-$10B/year in sales (up from 2013's $1.38B) to break even.


  63. SLW/Rookie – Both gold and silver are pricing for collapse at the moment.  I expect inflation to keep grinding and, EVENTUALLY, we'll see moves up in gold and silver but it could be a whole year – I'd keep the investments conservative and rollable for now. 

    RUT/JPH – I think I said last week that TNA would be a good play if the RUT held up over the weekend.  Had we not had such a quick pop, I would have played it this morning.  TNA is $70.89 and is a 3x, so a 5% move back to 1,200 on the RUT would pop TNA 15% to $81.50.   The July $74.81/79.81 bull call spread is $1.60 and pays $5 (+212%) if the RUT makes it back over 1,200 and holds it – that's a good upside hedge.  

    Silliness/Den – I agree it's silly but it was silly in late 1998 all the way through 1999, when the Dow went from 7,500 to 11,500 (53%),  And keep in mind that's nothing compared to the rally we're in now – from 666 on S&P to 1,910 (so far) is 186% – so we have to keep silly in perspective.  


  64. Phil // UBNT
    I don't want to get all geeky, but these guys rock under the radar in terms of next gen connection tech. I'm setting up the new airFiber with my neighbor across the street. We have 38 people all routed through ( at $1,200 mo/ business connection ) that works out to about $32 a person for 1.4 Gbps with a 13K range. They're also on a world-free band at 24 GHz.
    I love these guys. Doubled their cash-flow in a year, but the market is really bearish on them. Dont know why.
    They got hammered on earnings.
    Volume is low but would be a juicy M/A for someone like CSCO or T


  65. The week's events 

    Data deck for 26 – 30 May 

    Date 

    Time 

    Indicator 

    Period 

    BofAML Estimate 

    Consensus 

    Previous 

    5/27/14 

    8:30 

    Durable Goods Orders 

    Apr 

    -0.6% 

    -0.7% 

    2.5% 

    5/27/14 

    8:30 

    Durables Ex Transportation 

    Apr 

    0.0% 

    0.0% 

    2.1% 

    5/27/14 

    8:30 

    Core Capital Goods Orders 

    Apr 

    0.3% 

    -0.3% 

    2.9% 

    5/27/14 

    9:00 

    S&P/CS Composite-20 yoy 

    Mar 

    11.8% 

    11.8% 

    12.9% 

    5/27/14 

    10:00 

    Consumer Confidence 

    May 

    83.5 

    83.0 

    82.3 

    5/29/14 

    8:30 

    Initial Jobless Claims 

    24 May 

    320k 

    317k 

    326k 

    5/29/14 

    8:30 

    GDP qoq (Annualized) 

    1Q S 

    -0.7% 

    -0.5% 

    0.1% 

    5/29/14 

    8:30 

    GDP Price Index 

    1Q S 

    1.3% 

    1.3% 

    1.3% 

    5/29/14 

    8:30 

    Core PCE (qoq) 

    1Q S 

    1.3% 

    1.3% 

    1.3% 

    5/29/14 

    10:00 

    Pending Home Sales 

    Apr 

    2.0% 

    1.0% 

    3.4% 

    5/30/14 

    8:30 

    Personal Income 

    Apr 

    0.4% 

    0.3% 

    0.5% 

    5/30/14 

    8:30 

    Personal Spending 

    Apr 

    0.0% 

    0.2% 

    0.9% 

    5/30/14 

    8:30 

    PCE Core Prices (yoy) 

    Apr 

    1.5% 

    1.4% 

    1.2% 

    5/30/14 

    9:45 

    Chicago Purchasing Managers 

    May 

    61.0 

    60.8 

    63.0 

    5/30/14 

    9:55 

    U. of Michigan Sentiment 

    May F 

    82.5 

    82.5 

    81.8 

    Source: BofA Merrill Lynch Global Research, Bloomberg 


  66. sorry last post did not work correctly


  67. Pharm // GWPH
    Familiar ? Juicy premiums


  68. COST/phil, Stj – see an earnings play? they've been pretty flat since last earnings.


  69. GWPH….well, don't particularly like them and would short if I had any cahunas.  Can I point to a reason, sure.  They are in trials with cannabinoid drugs…and why not just go down the street and buy the real thing?


  70. thanks pharm >>>


  71. scottmi re: UNP, I can't get a good fill on the Nov 195 / Aug 200s; too strong :)

    Gonna wait a bit for a pullback


  72. Apple heading up.  any news?  when are its big screen phones coming out?   I'm still holding out for $100 post split target.  


  73. PCLN/Winston – Seems like it's going well, not much to do with it though you may want to take the money and run on extra short Jan $1,195 puts, since you don't need them.  At this point, if there's a dip you can sell more puts, otherwise – just wait for the bull spreads to mature and free up the margin.  Or am I confused now, since you sold calls?  All seems fine to me, just have to wait until October and then see what happens.  

    AAPL/Wombat – I like the $600 calls, which will become 7 $85.71 calls.  If you go 2016, you figure you can always cover up if they dip but I'm pretty sure we go to $100 ($700) from there so, if you buy a 2016 $600 for $79.50, you net $11.36 and, if the $100s are $5+, you are net $6 on $15 spreads.

    Florida/Pharm – The funny thing is the cost of not regulating industries that pollute the environment and caused the problem us now falling on local Governments to fix, where they tax sales and property, which disproportionately affect poor people.  Then, as the Government is forced to spend more and more to fight climate change – the GOP gets to talk about how big and expensive Government is getting.  Such a win, win, win for them to allow the Earth to be destroyed…

    SLW/Stock – You know I like silver (/SI) long at $19 and here we are again.  SLW is a close enough proxy so I do like selling those 2016 $18 puts for $2.30 for a net $15.70 entry (23% off).  I don't think silver will take off like gold will but I do think low $20s is the right price. 

    UBNT/Wombat – Good call, nice company, good growth, fair price.  With companies like this, there's always a worry that CSCO or someone could put out something faster and cheaper tomorrow but I think the 2016 $45/55 bull call spread at $2 is a very reasonable gamble and, if they go lower, then you can sell puts – the $20s are already $2.50 and more than pay for the spread.  If you get $4 for them on a dip, you net in at $18 – even if the spread expires worthless.  Worth adding to the Buy List!  

    COST/Scott – They really only pop when they raise Membership fees – they don't make much money on operations.  Also, gasoline has not been pretty and that drastically affects their margin.  Since the 200 dma is $115 and the 50 dma is $113 and they are in between at $114 – something violent is likely to happen but I wouldn't want to guess what.  You could buy July $105 puts for .35 and July $120 calls for .47 and hope they pop 10% one way or the other and you should net out a double or better – that's a fun way to play it.  

    AAPL/Terra – Just the rumor of the new stuff that will control everything you own with your IPhone.  I think it's a great idea but it will take years to push it through the market.  You need light panels, remote receivers for your other electronics and your car – even the Apple enthusiasts will be hard pressed to have everything up and running without many visits from contractors.  


  74. Re: gwph-they are in trials for taking out  the chemical that causes the high to treat children with seizures. There is one company in Col that synthesizes the drug which is a private co run by 3 brothers. Apparently the chemical maybe useful in treating Parkinson's, MS & a host of other maladies. There was a PBS program on about the parent's fight to get treatment for their children & they had to MOVE to Colo where a DR. has to prescribe the medication for treatment. These children had as many as 10-30 seizures per hour and now can live relatively normal lives. They went down to about 1 seizure a week after medication with almost instant results. Obviously with this drug there can be many other uses once testing is completed. I expect Europe will be the first to get the ball rolling since they do not have the have the FDA to contend with but with states changing laws maybe there will be hope. Cannabis is a well known pain killer with proven results as the effect on the brain can be tracked.


  75. Lqmt-.1755


  76. Nabiximols & GWPH/Pirate – true.  BUT, what gives them the advantage that someone else cannot walk into the space and do the same thing?  Their drug is THC.  Nothing complicated about it.  They extract it from grown Maja.  I do not see a way that their market could not be cannibalized by a local grower, or big pharma.  There is no strategic advantage for them to have it.  Sure, they did the trials, but it is an easy space IMHO to jump in with both feet and wipe them clean.


  77. Pirateinvestor

    I  was in La Cross Wis for the weekend  

    Nice place


  78. GWPH/Pirate – Interesting, thanks.  Wish I had known al that at $10 last year!  

    LQMT/Pirate – Certainly we're not saving it then.  

    Little bit of a sneaky sell-off into the close.  Still, it's an impressive day for the indexes. 


  79. GWPH – all TEVA would have to do is synthesize it, make a new oral mucosal spray, show bioequivolance, and good-bye GWPH.  Hell, I would call DEPO and let them do it.


  80. Apparently there is a synthetic version that may be able to be marketed which bypasses the growing of cannabis & I am sure that could be patented. Anyways, its a big world out there with many possibilities & if people "perceive" something blockbusting, that's all it takes. I have made $ from it so am happy.


  81. Phil / 2 Q's
    UBNT – The technology that these guys use use for prosumers is better than anything CSCO / HP can provide by miles. They're basically putting ISP power connections within public reach.
    Surprisingly I went the other way – sold the short puts first, if they stabilize or go up I would add a BLCS at that point – why did you suggest the opposite ?

    AAPL – god they're expensive. They're on a tear right now – would you wait until they come back down to retest $600 ?

    GWPH – I love a good pharma fight ; >


  82. QC-I am on the so shore of Lake Superior, but have lived in La Crosse for a time. I'm much further to the north, east of Superior/Duluth. Finally Spring has arrived here but I spend my winters in the Turks & Caicos & Fla.  We had a brutal winter here this year, 120 inches of white stuff!! People were hammered with propane costs, over &7.00 a gallon most of the winter. Amazing.


  83. Pirateinvestor

    I was in Duluth MN a week ago on Monday and the wind chill was 29, and the wind blow the ice into the harbor.

    Its more fun in the summer.


  84. Pharm – Was that a joke –  cannibalized –  Ha Ha


  85. Brit – I no kid! wink


  86. From Bloomberg, May 27, 2014, 2:09:02 PM

    An open house in Colorado. Photographer: Matthew Staver/Bloomberg

    Safe as houses. That’s what the British call a sure thing. And that’s how many Americans have felt about real estate.

    To read the entire article, go to http://bloom.bg/1h9UerH
    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 27, 2014, 12:01:00 AM

    The Baccarat Hotel and Residences is a 50-story tower under development on West 53rd Street and Fifth Avenue, across from the Museum of Modern Art. Source: Baccarat Hotel and Residences

    Manhattan’s Billionaires’ Row is spreading south.

    To read the entire article, go to http://bloom.bg/1jUsDcM
    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 27, 2014, 11:35:04 AM


    The growth in Brooklyn’s economy was helped by the first uptick in manufacturing jobs in decades in 2012, according to state Comptroller Thomas DiNapoli. Photographer: Craig Warga/Bloomberg

    Brooklyn’s economy outpaced the rest
    of New York from 2003 to 2012 as private jobs grew almost twice
    as fast as in other parts of the city, state Comptroller Thomas DiNapoli said.

    To read the entire article, go to http://bloom.bg/1h9gvWq
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  89. From Bloomberg, May 27, 2014, 3:04:18 PM

    May 19 (Bloomberg) — U.S. Attorney General Eric Holder speaks about the indictment of five Chinese military officials on charges of economic espionage and other offenses linked to computer hacking of U.S. nuclear power, metals and solar industries.
    Assistant Attorney General for National Security John Carlin, U.S. Attorney for the Western District of Pennsylvania David Hickton and FBI Executive Associate Director Robert Anderson also speak at a news conference in Washington. (Source: Bloomberg)

    The Chinese government is reviewing whether domestic banks’ reliance on high-end servers from International Business Machines Corp. (IBM) compromises the nation’s financial security, people familiar with the matter said, in an escalation of the dispute with the U.S. over spying claims.

    To read the entire article, go to http://bloom.bg/1jUG0tB
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  90. From Bloomberg, May 27, 2014, 7:23:06 AM


    Drillers must keep borrowing to pay for exploration needed to offset the steep production declines typical of shale wells. Photographer: Ty Wright/Bloomberg

    The U.S. shale patch is facing a
    shakeout as drillers struggle to keep pace with the relentless
    spending needed to get oil and gas out of the ground.

    To read the entire article, go to http://bloom.bg/TOtcvq
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  91. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1jXV89m

    Apples Next Move: The Connected Home?
    May 27: Rosenblatt Securities Principal Brian Blair discusses Apple’s home automation push.

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


  92. Sent from Bloomberg for iPad

    Watch this video at http://bloom.bg/1wfn3Hk

    How Amazon Is Tony Soprano
    May 27: Porter Bibb, managing partner at Mediatech Capital, and Roxana Robinson, president of The Author’s Guild, discuss Amazon’s dispute with Hachette Book Group that has blocked pre-orders for forthcoming releases from the publisher and what it means for e-publishing and sales of physical books on the site.

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


  93. From Bloomberg, May 27, 2014, 3:57:56 PM


    Citigroup Inc. Chief Financial Officer John Gerspach. Source: Citigroup

    Citigroup Inc. (C) Chief Financial
    Officer John Gerspach said second-quarter trading revenue could
    be down 20 percent to 25 percent from year-earlier levels in a
    market he described as “becalmed.”

    To read the entire article, go to http://bloom.bg/1h9PmCS
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  94. From Bloomberg, May 27, 2014, 2:51:52 PM

    Apollo Global Management LLC (APO), the
    buyout firm led by billionaire Leon Black, boosted its planned
    bond market debut to $500 million from the $300 million
    initially marketed today.

    To read the entire article, go to http://bloom.bg/1jX8LFO
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  95. From Bloomberg, May 27, 2014, 2:10:39 PM

    European Union leaders are set to put
    off further sanctions on Russia after President Vladimir Putin
    showed a willingness to work with Ukraine’s new leader.

    To read the entire article, go to http://bloom.bg/1wgkuoa
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  96. From Bloomberg, May 27, 2014, 10:45:27 AM

    A woman carries a shopping bag on a crowded street in New York on May 19, 2014. Photographer: Craig Warga/Bloomberg

    Confidence among U.S. consumers rose
    in May to the second-highest level since 2008 as Americans grew
    more upbeat about the economy and labor market.

    To read the entire article, go to http://bloom.bg/1h8UlU9
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  97. From Bloomberg, May 27, 2014, 12:01:00 PM

    China’s Internet sales are surging as
    Alibaba Group Holding Ltd. and rivals lure more of the nation’s
    618 million users to shop online, suggesting conventional
    retail-sales figures understate the strength of consumer demand.

    To read the entire article, go to http://bloom.bg/1jXqoFx
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  98. From Bloomberg, May 26, 2014, 7:01:00 PM

    U.K. services companies’ confidence
    rose to a record this quarter, indicating continued expansion in
    the largest part of the economy, the Confederation of British
    Industry
    said.

    To read the entire article, go to http://bloom.bg/1kFJ38Y
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  99. From Bloomberg, May 27, 2014, 9:32:52 AM

    Zimbabwe President Robert Mugabe speaks in Harare on April 18, 2014. Zimbabwe’s economy is heading for recession less than a year after Mugabe, 90, was voted back into office to extend his 33 years of rule. Photographer: Jekesai Njikizana/AFP/Getty Images

    Ephraim Takavarasha sits on the
    sidewalk outside Johannesburg’s central bus station, wondering
    how long it will take him to sell his four cases of electrical
    sockets, mobile-phone chargers and alarm clocks when he returns
    to Zimbabwe.

    To read the entire article, go to http://bloom.bg/1muPZ8X
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  100. From Bloomberg, May 27, 2014, 11:00:01 AM

    Prime Minister Shinzo Abe’s drive to
    lower the nation’s corporate taxes gained ground as ruling party
    lawmakers signaled support for the flagship growth policy.

    To read the entire article, go to http://bloom.bg/1nrBPZX
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  101. From Bloomberg, May 27, 2014, 9:34:32 AM

    On Lombard Street on May 20, 2014 in San Francisco. Photographer: Justin Sullivan/Getty Images

    Home prices in 20 U.S. cities rose at a slower pace in the year ended in March as the housing market began to weaken at the start of 2014.

    To read the entire article, go to http://bloom.bg/1h8IiX4
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  102. From Bloomberg, May 27, 2014, 4:43:47 PM

    A shopper at a Lowe’s store in Cranberry Township, Pennsylvania. Photographer: Gene J. Puskar/AP Photo

    Orders for long-lasting goods such as appliances and metals unexpectedly rose in April after a gain the prior month that was stronger than previously estimated, indicating U.S. manufacturing is rebounding with the economy.

    To read the entire article, go to http://bloom.bg/TPPWvd
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  103. From Bloomberg, May 27, 2014, 3:47:04 PM

    What solace does the nation offer a father who lost his son to gun violence? Photographer: Spencer Weiner/Getty Images

    A mass killer inevitably desires to make his mark (and it is almost always a he) by committing a uniquely heinous crime. Yet gun massacres now happen frequently enough in the U.S. that they threaten to acquire the very adjective a killer is trying to rise above: ordinary.

    To read the entire article, go to http://bv.ms/1tjHa2L
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  104. From Bloomberg, May 27, 2014, 2:48:00 PM

    You’ve Arrived … in Beijing. Source: STR/AFP/Getty Images

    Critics of China are fired up over the World Trade Organization’s ruling on Friday that Chinese tariffs on American-made SUVs and luxury cars violate international rules, coming as it does amid U.S. allegations of Chinese hacking of U.S. businesses. Echoing the rhetoric that helped President Barack Obama win crucial Ohio votes in 2012, Democrats from the industrial Midwest trumpeted the ruling as a “significant victory” for American manufacturing jobs. “It is time for China to start playing by the rules,” said United Steelworkers president Leo Gerard, who urged the White House to “aggressively enforce our trade laws to make sure American workers get a fair shake.”

    To read the entire article, go to http://bv.ms/1tL7apG
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  105. From Bloomberg, May 27, 2014, 5:01:31 PM

    There’s a lot of bureaucracy in there that needs changing. Photographer: Andrew Harrer/Bloomberg

    The scandal at the Department of Veterans Affairs is not going to bring down the administration of President Barack Obama. Nonetheless, it does seem to have legs. Even the administration’s supporters are resorting to half-hearted attempts to blame Congress, or George W. Bush, rather than dismissing the charges as a nonscandal being hyped by ideologues.

    To read the entire article, go to http://bv.ms/1oGBwaN
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  106. From Bloomberg, May 27, 2014, 4:35:28 PM

    Cruel, unusual or rational? Photographer: Fanny Carrier/AFP/Getty Images

    On the surface, the Supreme Court’s death penalty holding today seems like a win for rationality and smart statistics. The 5-4 decision in Hall v. Florida said the state may not use an absolute cutoff of 70 on the IQ test as its measure of intellectual disability, below which a murderer cannot be executed — because the standard error of measurement on the test is five points plus or minus. Freddie Lee Hall, the defendant, had scored 71, 72, 73 and 80 on his tests. The Florida Supreme Court said he wasn’t intellectually disabled because he’d broken 70. Justice Anthony Kennedy, with the four liberals on his side, overturned the capital sentence.

    To read the entire article, go to http://bv.ms/1oGx4Zt
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  107. From Bloomberg, May 27, 2014, 2:26:34 PM

    Photographer: Andrew Harrer/Bloomberg

    One of the best things I’ve read recently is Andrew Prokop’s piece in Vox about the successful enactment of the DATA Act, which makes government spending information more easily available. Prokop shows how members of Congress, political parties, interest groups, the executive branch and the presidency are involved in lawmaking, and how the (seemingly arbitrary and obscure) procedures, rules and norms of the House and Senate make that happen.

    To read the entire article, go to http://bv.ms/1tL1j3O
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  108. From Bloomberg, May 27, 2014, 11:38:50 AM

    A scene from another show with interesting characters whose stories mesh imperfectly. Photographer: Helen Sloan/HBO via Bloomberg

    I’ve often wondered why more terrorists don’t try the device we saw last night on Fox’s “24: Live Another Day.” Margot Al-Harazi, aka Obviously Insane Woman, is planning to use her hijacked drones to fire missiles at London unless the U.S. president turns himself over to her.

    To read the entire article, go to http://bv.ms/1mldMGG
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  109. GWPH/pirate…that's all that matters.  Be nimble …

    Hum, no wonder….less shares floating around…..zoom zoom.


  110. ObamaCare….phooey…healthcare prices are not moving.  Sheesh.


  111. I don't want to invest in Alibaba, simply b/c they are too complex and Chinese ( not a racist slur, I'm just familiar with how the bulk of Chinese companies are regulated )
    So, I'm asking myself, whom does this surge benefit on the other end ? What retailers, utilities, etc. ?

    From Bloomberg, May 27, 2014, 12:01:00 PM

    China’s Internet sales are surging as
    Alibaba Group Holding Ltd. and rivals lure more of the nation’s
    618 million users to shop online, suggesting conventional
    retail-sales figures understate the strength of consumer demand.


  112. Phil

    aapl 3.37pm post:

    AAPL/Wombat – I like the $600 calls, which will become 7 $85.71 calls.  If you go 2016, you figure you can always cover up if they dip but I'm pretty sure we go to $100 ($700) from there so, if you buy a 2016 $600 for $79.50, you net $11.36 and, if the $100s are $5+, you are net $6 on $15 spreads.

     

    please explain the last part, after the "if the $100's are……

    i seem to be tearing my hair apart for some reason…maybe it was a stroke I had and forgot I had it

    thanks


  113. From Bloomberg, May 28, 2014, 2:59:19 AM

    Brent crude rose for the first time
    in three days amid speculation that escalating violence in
    Ukraine may disrupt supplies to Europe from Russia, the world’s
    largest energy exporter. West Texas Intermediate was steady.

    To read the entire article, go to http://bloom.bg/1nt0qxg
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  114. From Bloomberg, May 28, 2014, 2:37:14 AM

    Gold fell to the lowest level in more
    than 15 weeks as U.S. economic data that beat estimates backed
    the case for the Federal Reserve to keep on reducing monetary
    stimulus, while demand in China showed signs of waning.

    To read the entire article, go to http://bloom.bg/1nt7RVn
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  115. From Bloomberg, May 28, 2014, 2:30:39 AM

    Corn fell for a second day to the
    lowest in more than 12 weeks after farmers in the U.S., the top
    exporter, boosted sowing amid forecast for a record crop.

    To read the entire article, go to http://bloom.bg/1tMO1Uj
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  116. From Bloomberg, May 28, 2014, 3:21:55 AM

    Copper climbed for a fourth day to
    trade near an 11-week high after signs of improving demand in
    the U.S. and China, the biggest consumers of metals.

    To read the entire article, go to http://bloom.bg/1gzaB0c
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  117. From Bloomberg, May 28, 2014, 1:36:32 AM

    The revival in Iraqi oil output has
    stalled. Again.

    To read the entire article, go to http://bloom.bg/SMXvBS
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  118. From Bloomberg, May 27, 2014, 11:37:22 PM

    An employee tips a freshly cast 400 ounce gold bar onto a workbench after casting at a precious metal refinery near Mendrisio, Switzerland. Photographer: Gianluca Colla/Bloomberg

    After two months of treading water,
    gold prices are starting to sink.

    To read the entire article, go to http://bloom.bg/1nt4cH7
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  119. Sent from Bloomberg for iPad

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

    Can Equities Rally in a Rising Rate Environment?
    May 27: Green Square Capital Managing Director Lincoln Ellis and JPMorgan Funds Global Market Strategist Andres Garcia-Amaya discuss interest rates, the Fed and the bond market.

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  120. From Bloomberg, May 27, 2014, 7:00:01 PM

    A cyclist pauses at the top of Primrose Hill in London, as the city below lies shrouded in pollution. Photographer: Adrian Dennis/AFP via Getty Images

    London has a dirty secret.

    To read the entire article, go to http://bloom.bg/SMVe9G
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  121. From Bloomberg, May 28, 2014, 12:00:00 AM

    The nation’s biggest business lobby
    says President Barack Obama’s plan to tackle climate change
    could cost the U.S. economy $50 billion a year. Supporters
    predict it will create jobs and lower power bills.

    To read the entire article, go to http://bloom.bg/1gzafGM
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  122. From Bloomberg, May 28, 2014, 12:00:01 AM


    Forget peace, love and understanding. Like the samurai before them, today’s top traders are meditating to make a killing. Photo Illustration: Jamie Chung; Philippe Halsman/Magnum Photos

    When stock and bond markets took a
    dive in late January, hedge-fund manager David Ford kept his
    cool.

    To read the entire article, go to http://bloom.bg/1gzanGp
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  123. From Bloomberg, May 28, 2014, 12:00:01 AM

    Technology stocks are back.

    To read the entire article, go to http://bloom.bg/1gzaKka
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  124. From Bloomberg, May 27, 2014, 7:01:00 PM

    May 27 (Bloomberg) — Bank of England Governor Mark Carney speaks about the tension between pure free-market capitalism and social capital, and a list of steps to repair the ethos of the global financial system.
    Carney, speaking at the “Inclusive Capitalism” conference in London, also discusses the role of central bank policy in the recovery from the financial crisis. (Video courtesy of Inclusive Capitalism Initiative. Source: Bloomberg)

    Mark Carney wants more “we” and less “me” in global finance.

    To read the entire article, go to http://bloom.bg/1tjzUUk
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  125. From Bloomberg, May 28, 2014, 12:21:10 AM

    Brazilian street vendors are still missing the promised economic revenue from a long tradition of adorning the streets ahead of the World Cup in Rio de Janeiro, Brazil. Photographer:Dado Galdieri

    Rio de Janeiro’s streets undergo the
    same transformation every four years when Brazil’s national
    soccer team prepares to play in a World Cup.

    To read the entire article, go to http://bloom.bg/1gzaTnQ
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  126. From Bloomberg, May 27, 2014, 11:00:01 PM

    Joana Havelange, who is on the board of the organizing committee for next month’s World Cup, shared a social media message telling fellow Brazilians to get over the event’s $11 billion price tag.

    To read the entire article, go to http://bloom.bg/1haZbjY
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  127. From Bloomberg, May 28, 2014, 3:55:00 AM


    Jobseekers queue at the reception area inside an Agentur fuer Arbeit employment office in Stuttgart. The number of people out of work rose a seasonally adjusted 23,937 to 2.905 million in May, the Nuremberg-based Federal Labor Agency said today. Photographer: Krisztian Bocsi/Bloomberg

    German unemployment unexpectedly
    increased for the first time in six months in a sign of waning
    confidence in the recovery of Europe’s largest economy.

    To read the entire article, go to http://bloom.bg/1gzzXej
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  128. From Bloomberg, May 28, 2014, 3:11:38 AM

    May 28 (Bloomberg) — Tim Condon, head of Asia research at ING Groep NV in Singapore, talks about Federal Reserve, Bank of Japan and European Central Bank policies and their implications for financial markets.
    He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    European shares slipped from the
    highest level since January 2008, while Asian stocks gained
    after China reported stable growth in industrial profits. Gold
    slid to a more than 15-week low as New Zealand’s dollar fell.

    To read the entire article, go to http://bloom.bg/1or7v0Q
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  129. From Bloomberg, May 27, 2014, 7:00:01 PM

    The success of euroskeptic parties in
    the weekend’s European Parliament elections has barely
    registered as a blip on the shared currency’s radar.

    To read the entire article, go to http://bloom.bg/SMXGND
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  130. From Bloomberg, May 28, 2014, 3:33:06 AM


    May 26 (Bloomberg) — Phyllis Papadavid, senior global-currency strategist at BNP Paribas Corporate & Investment Banking, talks about the outlook for the euro and pound.
    She spoke May 22 in London. (Source: Bloomberg)

    The euro headed for its biggest
    monthly decline in four months amid speculation the European
    Central Bank will add to monetary easing next week.

    To read the entire article, go to http://bloom.bg/1nt43TV
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  131. Sent from Bloomberg for iPad

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

    Spy Dispute: China Said to Push Banks to Remove IBM
    May 27 (Bloomberg) — The Chinese government is pushing domestic banks to remove high-end servers made by IBM and replace them with a local brand, according to people familiar with the matter, in an escalation of the dispute with the U.S. over spying claims. Hans Nichols has more on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

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  132. From Bloomberg, May 28, 2014, 12:36:03 AM

    May 27 (Bloomberg) — Sunny Ng, vice president and equity portfolio strategist at State Street Global Advisors Asia, talks about China’s credit outlook and financial system.
    He speaks with John Dawson on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s biggest banks are poised to report the highest proportion of bad debts since 2009 after late payments on loans surged to a five-year high, indicating borrowers are struggling amid an economic slowdown.

    To read the entire article, go to http://bloom.bg/1ntbGKg
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  133. From Bloomberg, May 27, 2014, 11:20:14 PM


    May 28 (Bloomberg) — Neil Beveridge, an analyst at Sanford C. Bernstein & Co. in Hong Kong, talks about Russia’s $400 billion deal to supply natural gas to China.
    He speaks with Zeb Eckert on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Japanese lawmakers are reviving efforts for a 600 billion yen ($5.9 billion) natural gas pipeline from Russia, which last week signed a supply deal with China, to cut energy costs after the Fukushima nuclear disaster.

    To read the entire article, go to http://bloom.bg/1pgsCmG
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  134. From Bloomberg, May 27, 2014, 12:00:24 PM

    May 20 (Bloomberg) — Swedish Finance Minister Anders Borg discusses Pfizer Inc.’s bid for AstraZeneca Plc.
    He speaks from Norrtaelje, Sweden, with Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Even in a high-stakes deal worth almost $120 billion, one that would create the world’s biggest drugmaker, the personal details matter.

    To read the entire article, go to http://bloom.bg/1mv3Yvx
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  135. From Bloomberg, May 28, 2014, 3:55:25 AM


    April 18 (Bloomberg) — Michael Klibaner, regional head of research at real estate firm Jones Lang LaSalle Inc. in Hong Kong, talks about China’s housing market.
    China’s new-home price increases slowed across the country last month amid tighter credit that prompted developers to give discounts. Klibaner speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    The “golden era” for China’s property market has passed, according to China Vanke Co. (000002), the nation’s biggest developer, which is shifting its focus to homes for owner occupiers rather than investors.

    To read the entire article, go to http://bloom.bg/1pgxNmN
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  136. From Bloomberg, May 28, 2014, 2:39:18 AM

    Switzerland’s economy outpaced that
    of the neighboring euro area in the first quarter, with growth
    in exports and in the construction sector offsetting weaker
    household consumption.

    To read the entire article, go to http://bloom.bg/1phQMgO
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  137. From Bloomberg, May 27, 2014, 8:00:54 PM

    This isn’t a pretty picture for Thailand’s economy. Photographer: Paula Bronstein/Getty Images

    The generals who now control Thailand are making a big show of shifting their attention from guns to butter. Coup leaders are conferring with the central bank, the stock exchange and economic experts to safeguard growth. They would have better luck if they could communicate their ultimate intentions to the rest of the world.

    To read the entire article, go to http://bv.ms/1mBGlBj
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  138. From Bloomberg, May 27, 2014, 6:03:23 PM

    Can you manipulate this into a paper crane? Photographer: SeongJoon Cho/Bloomberg

    The shock that forces investors from a “risk on” to a “risk off” strategy could come from a financial crisis in China. In part one of this series, I addressed three problems — slower growth, transitioning from an export-led to a domestic-driven economy and rising militarism — that could deliver such a shock. Here, I look at three more nagging problems: corruption, currency manipulation and shadow banks.

    To read the entire article, go to http://bv.ms/1kcSQ1C
    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  139. Wednesday’s economic calendar

    12:00 AM ET


  140. Egyptian election extension

    02:16 AM ET · EGPT

    • Egypt’s presidential election has been extended for a third day after low voter turnout.
    • Former army chief Abdel Fattah al-Sisi is still well ahead of his only opponent, leftist Hamdeen Sabahy.
    • Election officials have also issued a fine of over 500 Egyptian pounds ($72) on individuals not taking part in the vote.
    • ETFs: EGPT


  141. Google’s next moves for self-driving cars: no steering, pedals

    02:00 AM ET · GOOG

    • Google (GOOG) is building two passenger prototypes that don’t have steering wheels, accelerator pedals or brake pedals in an effort to bring the self-driving small electric cars to market.
    • The vehicles are currently being built through partnerships with automotive suppliers and manufacturers.
    • Since 2009, Google has already been testing self-driving cars, helping incorporate some of the technology (such as laser sensors and radar) into Lexus SUVs and the Prius from Toyota (TM).


  142. AdAge: Yahoo getting set to launch YouTube rival

    Yesterday, 07:19 PM ET · YHOO

    • Yahoo (YHOO) is “ramping talks with video producers” ahead of a planned summer launch for a would-be YouTube (GOOG) rival, AdAge reports.
    • Backing up a March re/code report, AdAge‘s sources state Yahoo is looking to lure top YouTube content creators with a choice of either better ad splits – YouTube normally takes 45% – or a fixed ad rate 50%-100% higher than YouTube’s average net rate. Yahoo is also comfortable allowing creators to simultaneously upload to YouTube.
    • While some creators are interested, others are said to be lukewarm, given their ad rates are currently well above the YouTube average. Moreover, YouTube recently launched a program (Google Preferred) that allows brand advertisers to buy ads for top creators alone.
    • Moreover, creators have reportedly bristled over some of Yahoo’s initial demands, such as giving Yahoo a perpetual license to videos shared on Tumblr. One producer: “Anyone who’s done a content deal knows that would never fly.”
    • Yahoo, bent on growing its video ad inventory, has already struck a high-profile deal with Katie Couric and has begun dabbling in original content. More recently, the company was reported to be a near a deal for streaming software/services firm RayV.


  143. Immelt says GE is open to an alliance with France

    Yesterday, 07:15 PM ET · GE

    • GE is willing to partner with France’s government in a possible alliance, CEO Jeffrey Immelt told French lawmakers today, as he tried to win their support for GE’s bid for Alstom’s (ALSMY) power equipment business.
    • Immelt didn’t offer specifics, but GE hadn’t previously stated a willingness to a government investment in a business resulting from any acquisition of Alstom’s assets.
    • A GE spokesman says the company is not offering the French government a stake in the steam turbine business; French Economy Minister Montebourg is worried that a GE deal could disrupt the supply of Alstom turbines to Electricité de France (ECIFF), which uses them to make France’s world-class nuclear reactors.
    • Immelt said today GE understands the “importance of the sovereignty of the nuclear industry” in France, adding that GE had been working with EDF for decades.
    • Siemens’ (SIEGY) Christophe de Maistre told the lawmakers today that his company’s eventual bid would spawn two separate companies: a power equipment firm and a train giant that would combine Alstom’s high-speed train operations with Siemens’ rolling-stock business.


  144. Court rejects BP request to delay spill payments during appeal

    Yesterday, 06:42 PM ET · BP

    • BP‘s request to extend a stay on payments to businesses that can’t directly prove they were damaged by the 2010 Gulf of Mexico spill, while the company seeks a review of disputed payments by the Supreme Court, was rejected today by the U.S. Court of Appeals in New Orleans.
    • A week ago, the same court refused to reconsider its earlier rejection of BP’s complaint that its claims administrator was misinterpreting the spill settlement and approving hundreds of millions of dollars in “fictitious” claims.


  145. Qihoo +5.4% AH on Q1 beat, strong Q2 outlook

    Yesterday, 06:32 PM ET · QIHU

    • Qihoo (QIHU) expects Q2 revenue of $300M-$305M, well above a $270.2M consensus.
    • Q1 results trounced estimates on the back of a 120.9% Y/Y increase in ad revenue to $140M, and a 172.2% increase in value-added service (largely gaming) revenue to $124.8M.
    • Improving search/mobile monetization contributed to the ad growth. Qihoo notes it’s now estimated to have 25% of the Chinese search market, up from 23% in Q4; the company has been aiming for a 30% share by year’s end.
    • Total users of Qihoo products/services rose by 4M Q/Q and 38M Y/Y to 497M. Users of Qihoo’s 360 Mobile Safe app rose another 13% Q/Q and 96% Y/Y to 538M.
    • Daily unique home page visitors rose by 3M Q/Q to 122M, after slipping by 7M in Q4. Average home page daily clicks rose by 91M Q/Q to 772M.
    • Gross margin fell to 79.5% from 87.4% a year ago. Opex rose 101% Y/Y to $155.2M.
    • Q1 results, PR


  146. Glaxo faces U.K. criminal probe on top of China investigation

    Yesterday, 06:26 PM ET · GSK

    • GlaxoSmithKline (GSK) says it is being investigated by the U.K.’s Serious Fraud Office for possible criminal violations in its commercial practices; no additional information was released.
    • Separately, GSK is being investigated by authorities in China for allegedly bribing doctors, hospitals and government officials to sell more drugs in that country, and allegations have surfaced of wrongdoing by company employees in Iraq, Poland, Jordan and Lebanon.
    • In December, GSK announced a global policy to stop paying doctors for giving speeches and attending medical meetings.


  147. Himax dives on rumors of losing Google

    Yesterday, 06:00 PM ET · HIMX

    • Rumors that Google will no longer use Himax’s (HIMX -13.6%) LCOS microdisplays in Google Glass going forward led shares to plummet in afternoon trading.
    • Google acquired a 6.3% stake in Himax last July, along with an option to up its stake to 14.8% within a year.
    • The company has made the $1,500 Explorer Edition of Glass available to all, but still hasn’t announced when Glass will see a full commercial launch.


  148. UBS sees no imminent bankruptcy risk in coals but likely down the road

    Yesterday, 05:58 PM ET · WLT

    • UBS analyst Kuni Chen thinks it makes more sense to start thinking about bankruptcy in the coal sector two or three years down the road rather than buy-the-dip opportunities, noting that the bonds of Walter Energy (WLT), Alpha Natural Resources (ANR) and Arch Coal (ACI) are edging close to distressed levels.
    • Some tranches of WLT debt are trading at $0.60 on the dollar, while ANR and ACI paper trade a bit better at 70-80 for unsecured debt with yields approaching the mid-teen percentages; the equities continue to be weak, with WLT down almost 70% in the last 12 months and ANR down 40%.
    • Chen also thinks it makes sense for Peabody Energy (BTU) to sell more stock to pay down its $6B debt load, since it would provide added flexibility to weather the downturn in the seaborne coal markets should prices stay at depressed levels for a longer than expected period of time.


  149. BioCryst -2.8% AH after announcing $100M stock offering

    Yesterday, 05:38 PM ET · BCRX

    • BioCryst (BCRX) plans to use the offering’s proceeds to help finance “clinical development of BCX4161; the development of both second generation hereditary angioedema compounds, commercialization activities relating to peramivir and the advancement of other preclinical rare disease programs.”
    • Underwriters have a $15M overallotment option. If priced at current levels, the offering would increase BioCryst’s share count by 17%.
    • The drug developer had $34.2M in cash at the end of Q1, and expects 2014 net operating cash use of $35M-$43M.
    • Shares rose 10.9% in regular trading, after BioCryst announced BCX4161 hit its primary endpoint during a Phase 2a trial.


  150. Moscow airport is a different experience… There must be about 20 flights leaving from this terminal the entire day. The place is empty. There was one person at the security line – me! And compared to what I am used to, it looked a little lax. No waiting anywhere – check in, security, gate and it looks like the runway is empty. Paris will test my patience now!


  151. Good morning! 

    Of course Futures are up but only a bit.

    Oil (/CL) tested $104.40 and rejected there, back to $104.30 and, of course, playable short below $104.25 or $104.50.  Gold (/YG) behaving so far at $1,265 but boy am I reading a ton of articles about how terrible gold is and how anyone with brains is leaving that trade and China doesn't like gold and the gold ETFs are liquidating – really makes me want to buy more!  

    Dow testing 16,700 (/YM) and that's also a good short line to play with very tight stops above. 

    Dollar 80.47, silver $19.10, copper $3.186, nat gas $4.495 (trying hard at $4.50) and gasoline also wishes for $3 at $2.995 but not looking good.  Oil inventories are pushed off to tomorrow.  

    UBNT/Wombat – Because the bull call spread won't hurt much on the way down (you can just roll it) and pays very well on the way up.  If you start with the bull call spread and it pops, you still make a nice (up to) $8 (400%) on the bull call spread and, if it drops, you only have $2 at risk and you can make adjustments.  If you start by selling the $20 puts for $2.50 instead, then a big move up only pays you $2.50 and a big move down costs you more than $2.  On the whole, that entry reflects my skepticism at this early stage.  If UBNT drops 20% ($7) on some news – I don't REALLY want to own them for net $17.50 for the long term.  That makes it more of a trade than an investment in my mind, so I seek to limit the risk.  

    AAPL/Wombat – I do hope (not a valid investing strategy) they come back down because we left short Jan $550 calls in the Income Portfolio, which are killing it at the moment. Our plan was to DD on the longs and roll the short calls if AAPL was over $625, which they are this morning but, of course, more than one day before we change.  

    Lake effect snow/Pirate – Fun.  My friend went to Buffalo and I used to go up there to visit – incredible amounts of snow in the winter.  

    Booking.com/Jabob – To me, it's a simple contractual relationship that should be honored.  Booking agrees to promote a hotel's space but the hotels have to promise not to undercut Booking – who guarantee the lowest rates.  In the US, they would throw that out but, in France, they might lose.  That's one of the hidden pitfalls of international expansion – you need another legal team for each country you start in..  

    Buybacks/Pharm – Wow, that's a lot!  

    Health care/Pharm – I wish they had a data set for the cost of health insurance on that graph.  Must have doubled since 2000 – bastards! 

    China/Wombat – You have to be careful with the numbers.  The basis is very low (like our own ECommerce numbers) so the question is 52% of what?  It doesn't really benefit the retailers, per se – the same stuff is just being sold through another outlet.  On the whole, they lose out to intermediaries like Alibaba – as the retailers who sell through them have to lose a bit of margin (fees, eating shipping costs, cutting prices…).  I don't think AMZN has benefited SNY or WMT or DKS or NKE – it's just a new outlet for the same river of goods flowing to the consumer.   

    Ah, there's the number $295Bn in on-line sales, so up about $100Bn from last year's $200Bn.  US retail sales are $4.5Tn so $100Bn is 2.2% of all sales for US and China is not too far behind us at $4Tn, so 2.5% of all Retail Sales in China moved on-line last year is the proper non-hysterical headline.  Also of note – China's overall Retail Sales grew 13.6% last year so about $500Bn which means on-line's growth only captured a small part of overall growth.  That's why you have to be careful with numbers like that – they can be extremely misleading. 

    AAPL/Maya – What I'm saying is that the $600 calls, "naked long" are currently $79.50 and, after a 7:1 split, will be 7 $85.71 calls at an average cost of $11.36.  After the split, we expect AAPL to go higher but, IF IT DOESN'T, then I am speculating that the NEW (post split) $100 calls can be sold for $5 or more, which would turn it into an $85.71/100 bull call spread at net $6 (about).  The current AAPL 2016 $700 calls (which will split to the $100 calls) are $42 and $42/7 = $6, so it is my expectation that POST SPLIT, even if AAPL heads a bit lower, you can still sell those $100 calls for $5 or better and put yourself in the spread.  But, to be clear, the point of the trade is to start out with JUST the $600 calls, in anticipation of a move up in AAPL after the split. 

    Moscow/StJ – Thats interesting because Moscow has two main airports (Domodedovo and Sheremetyevo) and also Vnukovo for local flights and I was always under the impression their traffic is comparable to New York's 3 airports.  Maybe it's the war but that sounds very empty – which one are you in?  


  152. Dollar bustin a move over 80.50!