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Tempting Tuesday – Looking for the New Normal

The new Big Chart is here:

Oooh, ahhh – look how high those levels have gotten.  We discussed the whys for these adjustments in our weekend post and how is, of course, The Fed – along with the other Central Banksters who have been pumping up the economy by giving so much money to the top 0.001% that they have nowhere left to put it but equities and, so, we rally!  

Top 0.001% (out of 7Bn people on Earth, that's 70,000 and, of course, that includes about 20,000 Corporate Citizens as well – even thought they are often owned by wealthy individuals – a double bonus for them!) corporations have so much money, they are running around buying each other and buying their own stock – anything they can think of to get rid of all the money the Central Banks are handing out.  Well, anything but hiring people or investing in R&D, Infrastructure, Cap Ex or anything that would actually GROW the businesses.  

What the World's wealthiest businesses and individuals DO spend their money on is teams of accountants and lawyers who help them to shuffle their money around through various overseas shell corporations in order to avoid paying taxes.  Here's how Google knocks their tax rate down to just 2.4% in 4 easy steps:

Now we have companies flat-out leaving the US to avoid taxes but it's not US taxes they are avoiding – it's ALL taxes.  Medtronic (MDT), for example is acquiring Covidien (COV) for $43Bn and the combined group will be domiciled in low-tax Ireland, the official home of its merger partner, COV.

Medtronic’s executives will stay in Minneapolis and Covidien’s will remain in Mansfield, Mass. Covidien, then part of Tyco, left America for Bermuda in 1997 before moving to Ireland in 2009. The deal thus involves an inversion with a “foreign” firm that has itself already inverted: a sort of “inversion squared.

All this juggling will save MDT about $750M a year in taxes, which every single US taxpayer will then pay $5 each to make up for.  Over the next 50 years, the merger will pay for itself in tax savings while extracting $250 from your wallet as well.  

Of course it's not just $250, this is the 15th "invesion deal" of the last two years and just yesterday Shire (SHPG) turned down a $46Bn offer by AbbVie (ABBV) to do a similar deal and Pfizer (PFE) is trying to buy AstraZeneca (AZN) for a whopping $128Bn – what the hell it's only money (and your money at that!).  

These top 0.001% companies are using the money YOU are subsidizing as the Central Bank artificially reduces borrowing costs that allow mega-corps to access stupendous amounts of cash, which then make deals like this worthwhile so, in addtion to 20 of these deals costing each and every taxpayer in the US $5,000 (money that we have to make up to pay the country's bills) – we also take on another $50,000 worth of debt on our National Debt Clock.

This does not, of course, affect PFE, GOOG or MDT – after all, they "live" in Ireland now!  Good thing, too, because that National Debt Clock shows that your family is already on the hook for $757,351 (public and private) as of this morning.  While another $100,000 won't make much difference to you, Corporations have teams of accounts who make sure money like that NEVER slips through the cracks.

Billions are being spent on lobbying efforts to lower Corporate Taxes even further and not just in the US.  Just this morning, in fact, Japan knocked 15% off their Corporate Tax rates and our friends in the GOP are pusing for more tax reduction at the state and national levels.  The joke is that, while we are being urged to bring our taxes down to Ireland's levels (12.5%), Ireland is looking to crack down on corporate tax cheats and RAISE their taxes.

As you can see from the chart on the left, Corporations are only paying 10% of the US tax burden now, which is funny because they earned $3Tn last year yet paid less than $250Bn in taxes (8.3% net), which is LOWER than Ireland's 12.5% rate.  If we lower our rate to 12.5%, then Corporations will fire accountants who can't get it below 5% – this is not a war we're going to win, folks.  

Is this, then, the new normal?  I do have a concern here that we have reached "peak avoidance" and that there won't be much room left to cut after this.  Companies are racing into Ireland mergers to take advantage of this scam before the loophole closes on them and, even if we assume earnings are improving – they are improving based on closing stores, cutting staff, shaving taxes, shrinking portions etc. and, from our last quarter's productivity report – we may have finally cut all the way to the bone.  

We're going to be watching earnings very closely for signs of real growth – as we'd love to be able to look to the high end of our new ranges with anticipation BUT, I am VERY concerned that we are reaching Peak Fed, Peak Tax Avoidance, Peak Subjugation of Workers and Peak Pretending There's No Inflation – all at about the same time and this, my friends, is a bubble you DO NOT want to pop!  


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  1. Oil Lines

    R3 – 109.08
    R2 – 108.23
    R1 – 106.96
    PP – 106.11
    S1 – 104.84
    S2 – 104
    S3 – 102.72

  2. Soccer / Phil – Like everything else in this country, soccer will become more popular when there is more money involved. Soccer players here make 10% of what they make in Europe with the exception of a few stars. When they make as much as basketball, baseball or football players, you might see more kids getting involved. It's already the second most popular sport for kids, but we don't have the professional infrastructure here to match what they have in Europe. That could change over the next 20 years.

  3. Slight exaggeration on those tax influenced moves Phil (presume you mean $5 x 50 years costing only $250 which is very little and given the time value of money etc etc) … all the moves are legal of course.. I am from Ireland. From what I can see every single corporation tries its utmost to legally minimize its taxes. If governments want to they can change the laws. It is interesting that they do not do so. Obviously they are enablers and know they can suck the ordinary man in the street dry which is utterly reprehensible imho…Dec

  4. Good Morning!

  5. If GDP continues to slide due to offshoring the U.S. government will revert to reporting GNP and the party will continue unabated. I'm sorry, didn't you get an invitation…?

    And let's not forget the Fed hasn't gone negative yet with the Fed Funds rate.

  6. Good morning! 

    Thanks DM, corrected now.  Companies should do all they can to reduce taxes – it's the Government's idiocy that lets them.  Unfortunately, the corporations control the Government so it's a closed loop now, which is why the burden of paying taxes has moved almost entirely to the workers.  

    In Ireland though, at least you have a VAT.  In the US, they talk about dropping Corporate taxes to Ireland's levels but that would be insane without a subsequent tax on goods and services.  

    For those of you who don't know (and correct me if I'm wrong, DM), Ireland has a 21% Value Added Tax that is INCLUDED in the sale of most products.  It's a tax companies cannot escape from because it's collected every single time they sell a product of service.  If US companies did that, it would be effectively a 20% tax on all $15Tn worth of transactions (less on food or energy) and would generate $3Tn a year, which is more than the TOTAL we collect in taxes in the US.  So, we could put in a VAT and eliminate ALL Corporate and Individual Taxes.  

    Soccer/StJ – It's no all about money or kids wouldn't play field hockey or wrestle or do gymnastics.  I'm not kidding, Americans like to win and we won't play soccer just so we can go to the World Cup and get our asses kicked.   That's why soccer is considered a "stupid" sport by most Americans – it's not a game we can win and throwing money at it doesn't give us a particular edge so we have no idea how to get good at it.  

    Meanwhile, Futures still down a bit but Nas got green.  Heading into the end of Q2, we weren't expecting much of a pullback anyway so just a watch and wait kind of week overall. 

  7. VAT .. the current Irish rate is 23% for most goods and services (excluding food) .. companies can reclaim the VAT paid on purchases and offset that against the VAT collected from sales to the end user though .. man in the street gets hit again … the UK charges 20% VAT … consumption tax seems a nice way for governments to collect tax without worrying about teams of accountants/lawyers trying to find loopholes…

  8. Canada had a PST, provincial sales tax & a national sales tax, VAT & "said" putting them together would lower the overall tax on goods & services. IN fact, the total tax was not lowered & the combined amount was, 3 years ago at least 14%. It was just more baloney putting more burden on the workers. Property taxes were never lowered & though you are assessed every 3 years,  they have an inflation of almost 3% every year. So, give the politicos a dime & then they up it to a dollar every time. Though they export oil to us they pay more for gasoline, heating fuel & utilities than here. So it could actually get worse than it already is here.

  9.  Phil, how about DE – they still have a reasonable PE(10), and yield a div of 2.6%. You can buy the '16 80/90 BCS, and sell the 80 put for net .95 on the $10 spread that's 100% in the money. Of course selling a few callers over the next 18 months should make it more fun as well. Thoughts?

  10. Phil yesterday you made a comment on the ABX rolling re Wombat question 

    I like your view on this on just as one example. I hold the Jul 14 CVX 130c sold same for 1.67 the stock is trading at 132.39 the cost of the  Jul 130 caller caller is now 3.33 meaning that I would be about 50% down however I would not roll this one until the difference of 3.33 – 2.39 = .94 premium is burn down to say .10 or .20 cents why would I pay .94 cents of premium now?

  11. Non Sequitur by Wiley Miller

  12. my tos paper money has lost live real time data and is now delayed only

    has anyone else had the same thing happen


  13. tommyt – Contact TOS and ask them to fix it (they will).

  14. Thanks DM. 

    Buybacks/Diamond – We had the same kind of frenzy in '07 & '08 – it really keeps a rally going long past a logical top.  

    Canada/Pirate – I think all taxes should be abolished in favor of a straight-up VAT of 20% with no exceptions.  In the US, that would be $3.3Tn a year – if the Government can't make due with that, then we have some very serious problems.  The other good thing about a VAT like that is the US would finally get paid for it's most valuable resource – OUR CONSUMERS!   No one shops like Americans and our Government could use the VAT to make sure ALL companies – even foreign ones – pay their fair share when doing business in the US.  

    DE/Deano – CAT just gave some really nasty guidance on Asia but DE is not to strong there so yes, I like them here ($91.65) but no reason to own the stock when you can just sell the 2016 $80 puts for $4.85 and use that money to buy your $80/90 spread or the $85/97.50 bull call spread at $6 which is net $1.15 on the $12.50 spread so just about a 10-bagger if all goes well and easy to adjust if not.  I would rather roll to the $80s (now +$2) only if DE does drop – otherwise, $97.50 should be an easy target but $2 is a very cheap way to buy $5, so I like those $90s too – good catch!  If you are going to sell calls, I'd stick to 1/2 sales.

    CVX/Yodi – First of all, I don't get how you could have sold the same as you hold but, isolating the short July $130s (now $3.55), the stock is at $132.67 so those callers have about 1/3 premium, which is a little early to roll but you do need to watch the month you will roll to and, with earnings late July or early Aug, selling Aug calls is very dangerous so I'd watch the Sept $135s, now $2.20, which will cost you $1.35 to roll (essentially the premium) and just make sure it doesn't end up costing you more than $2.  Assuming your long position makes money while CVX goes up and assuming your delta is at least .35, then by the time CVX is over $137 (new net), your longs will gain $1.50(ish) – so no major worry. 

    LOL Diamond:


    TOS/Tommy  - No, you should call them.  

  15. Don't forget – Webinar at 1pm!  

  16. At the open

    09:34 AM ET

    • Dow -0.06% to 16,937.26. S&P -0.01% to 1,962.61. Nasdaq +0.09% to 4,372.63.
    • Treasurys: 30-year +0.33%. 10-yr +0.2%. 5-yr +0.09%.
    • Commodities: Crude +0.03% to $106.21. Gold +0.3% to $1,322.40.
    • Currencies: Euro +0.11% vs. dollar. Yen 0.%. Pound +0.2%.

  17. On the hour

    10:00 AM ET

    • Dow -0.06%.
    • 10-yr +0.14%.
    • Euro +0.07% vs. dollar.
    • Crude 0% to $106.18.
    • Gold +0.04% to $1,318.90.

  18. ICSC Retail Store Sales reports highest Y/Y growth since last year

    07:58 AM ET

    • ICSC Retail Store Sales: +2% W/W, vs. +0.4% last week.
    • +4.1% Y/Y vs. +3.1% last week.
    • “The strength was broad-based across most retail groups.”.

  19. Brent prices remain stable as Iraq oil data eases supply worries

    07:59 AM ET · USO

  20. Phil thanks for your comment my bade English I hold the short Caller! Yes obviously cover by 2x the amount of BCS so you are correct to say The BCS will gain over the caller. Yes rolling into earnings is always a problem. I just wanted to clear the position 50% down on the caller. You do not roll with 1/3 of premium to pay. That was just my point.

  21. Phil / Soccer:   …" It's no all about money or kids wouldn't play field hockey or wrestle or do gymnastics.  I'm not kidding, Americans like to win and we won't play soccer just so we can go to the World Cup and get our asses kicked. "…. So you don´t play because you do not win……

    You are joking don´t you?

  22. S&P Case-Shiller Home Price Index

    09:01 AM ET

  23. FHFA Housing Price Index remains flat in April

    09:07 AM ET

  24. Redbook Chain Store Sales rise at a slow pace in last week

    09:10 AM ET

  25. Major correction continues in Dubai

    09:13 AM ET · UAE

    • The DFM index closed 6.7% lower today, bringing its decline to more than 25% over the last six weeks. The market is still up 19% this year after more than doubling in 2013.
    • Unsurprisingly, it’s property-related stocks leading the way lower, and today Arabtec – a major construction firm – dropped nearly 10% amid a reported management shakeup (the stock’s now off more than 50% this month).
    • Along with Qatar, Dubai this month began trading as an emerging market, having been upgraded to that status by index-provider MSCI one year ago.
    • ETF: UAE

  26. Plosser doesn’t disappoint hawkish fans

    09:43 AM ET · SHY

    • Presenting various frameworks for figuring where the Fed Funds rate should be, Philadelphia Fed chief Charles Plosser says even the weakest view suggests a rate hike in Q3 with a 1% Fed Funds rate by the end of 2015. The strongest outlook suggests Fed Funds at 4.7% by the end of next year.
    • Plosser is a voting member of the FOMC this year.
    • Short-duration Treasury ETFs: SHY, BIL, SHV, VGSH, SCHO, SST, TUZ, DTUL, DTUS

  27. New home sales soar past estimates

    10:00 AM ET

  28. Richmond Fed business conditions grew mildly in June

    10:01 AM ET

    • June Richmond Fed Mfg. Survey: +3 vs. +7 forecast, +7 in May.
    • Shipments 2 vs. 10
    • Capacity Utilization 8 vs. -2
    • Number of Employees 3 vs. 10
    • Average Workweek 7 vs. 3
    • Wages 12 vs. 22

  29. Consumer Confidence at 85.2

    10:01 AM ET

  30. Guidance trips up Carnival

    10:28 AM ET · CCL

    • Carnival (CCL -2%) trades lower after the company’s fresh guidance disappointed investors.
    • The cruise ship operator raised full-year EPS guidance $1.60-$1.75 vs. $1.50-$1.70 prior and $1.72 consensus.
    • Carnival’s Q2 earnings report

  31. Fastest pace of new home sales in six years

    10:09 AM ET · ITB

    • May’s adjusted annual pace of 504K new home sales is the fastest print in six years. The number is 18.6% above April’s pace and 16.9% higher than a year ago. The supply of new homes on the market at the current sales pace dropped to 4.5 months worth from 5.3 months in April.
    • Sales in the Northeast jumped to 34K from 22K in April, and those in the West to 130K from 97K.
    • Full report
    • Homebuilder ETFs: ITB +1.2%, XHB +0.7%.
    • Toll Bros. (TOL +1.2%), Lennar (LEN +1.4%), D.R. Horton (DHI +1.7%), KB Home (KBH +1.7%), Hovnanian (HOV +1.3%), PulteGroup (PHM +1.3%)
    • Previously: New home sales soar past estimates

  32. McDonald’s tests order-ahead mobile app

    10:06 AM ET · MCD

    • McDonald’s (MCD) is testing a mobile payment app which allows customers to order ahead at 22 stores in Georgia, according to Business Insider.
    • Customers can pick up their orders through curbside delivery or in stores when their order number is called.
    • The McD Ordering app is already available for download from Google Play.
    • What to watch: Analysts think mobile payments are a margin-booster in general, although they also note store execution of the program for McDonald’s could be a challenge.

  33. Repsol cleared by Spain’s high court to drill off Canary Islands

    10:03 AM ET · REPYY

    • Repsol’s (REPYY, REPYF) plan to explore for oil off the Canary Islands in a $10B project reportedly has won the backing of the country’s Supreme Court, which rejected seven appeals against Repsol’s exploration permits.
    • A favorable ruling would remove one of the last few hurdles remaining for Spain’s biggest oil company to begin drilling off Fuerteventura and Lanzarote islands near West Africa; should Repsol discover oil, it has estimated the project would cost €7.5B ($10.2B).

  34. Ford says F-150 launch is on schedule

    09:58 AM ET · F

    • Ford (F +1.1%) exec Joe Hinrichs says the launch of the aluminum F-150 is on schedule.
    • The statement could allay some fears raised by Morgan Stanley of a slow roll-out of the new F-150.
    • Production of the aluminum-bodied pickup starts this summer.
    • What to watch: Early testing of the F-150 has gone well, according to the automaker. If outside reviews go as favorably on durability and ruggedness, the F-150 could sell well due to the improved fuel economy it will offer consumers.

  35. Morgan Stanley puts the brakes on Lorillard

    09:47 AM ET · LO

    • Lorillard (LO -1.9%) trades lower after Morgan Stanley downgrades the company to an Underweight rating.
    • The investment firm thinks the takeover premium on Lorillard has outrun itself to offer investors very little upside.
    • There’s also some caution issued on the risk of the menthol-heavy Newport brand.
    • What to watch: Look for a defense from Wells Fargo analyst Bonnie Herzog who is far out on the Lorillard limb.

  36. LiveDeal still creating a buzz

    09:40 AM ET · LIVE

    • Shares of LiveDeal (LIVE +5.9%) are active again after the company pushes out another PR calling attention to its restaurant-friendly platform.
    • The focus on LiveDeal has increased since OpenTable and Priceline announced their merger.

  37. Report: BHP planning more iron ore mining jobs cuts in Australia

    09:12 AM ET · BHP

    • BHP Billiton (BHP) is cutting 500 jobs at its flagship Australian iron ore division as part of an ongoing review of the business, the Herald Sun reports; a report from the Australian Broadcasting Co. says as many as 3K jobs could be targeted.
    • The cuts come as iron ore spot prices have plunged more than 30% YTD.
    • “Iron ore miners such as BHP are in the early stages of going through what the coal miners have been experiencing,” says a mining analyst for MineLife in Sydney. “In effect, they are being asked to make do with less.”
    • BHP -0.8% premarket.

  38. More questions than answers at Walgreen

    09:05 AM ET · WAG

    • Walgreen (WAG) felt pressure on pharmacy margins during FQ3 (earnings, details) with third-party reimbursements lower.
    • Though the forecast for cost savings from the company’s merger with Alliance Boots was pushed higher, visibility on the integration is still cloudy with key decisions still hanging in the balance. A potential tax inversion move tops the list.
    • Walgreen pulled its 2016 guidance and put investors into a waiting period until later this summer for more clarity.
    • WAG -2.2% premarket

  39. Citi aims for growth in Brazil

    09:01 AM ET · C

    • Citigroup (C) has recently sold off retail banking operations in Greece and Spain, but it’s looking for growth in Brazil and hopes to boost its customer base there by 5% this year and again in 2015.
    • Citi has shifted focus to 150 global cities with the highest potential for consumer-banking growth and Brazil has three on the list: Sao Paulo, Rio, and Belo Horizonte. The bank’s focus, says Helio Magalhaes – the President of the Brazil unit – will be on better-off customers, and Citi plans to open a flagship branch in Sao Paulo’s financial center.
    • The only U.S. bank with retail branches in Brazil, Citi has 350K retail customers and 50K corporate clients, the same numbers as in 2012. The bank also has about 1M credit cards in-country under the Citi and Diner’s Club brands (the Credicard unit with 4M cards was sold last year).

  40. Duke Energy plans big solar project in North Carolina

    08:36 AM ET · DUK

    • Duke Energy (DUK) says it will build a three-site solar energy project in eastern North Carolina that will be the largest east of the Mississippi, and will sell the power to institutions in Washington, D.C.
    • George Washington Univ., American Univ. and George Washington Univ. Hospital will buy the electricity under a 20-year purchase agreement the buyers say is the largest in the U.S. by megawatt-hours that is not with a utility.
    • The first 20 MW site will be built this year, with two others planned for next year; the entire project will total 52 MW.

  41. “Measured” rate cut in Turkey

    08:34 AM ET · TUR

    • The central bank lowered its benchmark interest rate for a 2nd consecutive month with a 75 basis point cut in the one-week repo rate to 8.75%. The overnight borrowing rate remains at 8% and the overnight lending rate at 12%.
    • Economists had expected a cut of between 50 and 75 bps this month, though some had also expected reductions in the overnight rates as well. The central bank, however, noted improving global liquidity conditions as a reason for the “measured” action.
    • Turkish stocks are about flat on the session.
    • ETFs: TUR

  42. New Jersey keeps up fight for sports betting

    08:23 AM ET · BYD

    • The Supreme Court didn’t rule on the efforts of New Jersey to legalize sports betting in the state in a development that could be a setback for casinos in the region.
    • New Jersey was hoping to join Nevada, Delaware, Oregon, and Montana as the only state where sports betting was sanctioned.
    • State legislators haven’t give up the fight and say they will pursue a different strategy to see widespread sports betting allowed in New Jersey.
    • Related stocks: BYD, MGM, CZR

  43. Staples pulls out margin-defying pricing for back-to-school season

    08:11 AM ET · SPLS

    • Staples (SPLS) announces it will launch a national price matching program ahead of the back-to-school season.
    • The company will match prices on items sold through an online retailer and under its 110% Price Match Guarantee offer a 10% discount off a competitor’s price on qualifying items if documentation is shown.
    • What to watch: The company’s early back-to-school salvo at Amazon is likely to bring in some extra traffic, although the potential impact on margins is making some retail analysts cringe. Staples will need to sell a good chunk of accessories to customers utilizing the price matching program to play catch-up.
    • SPLS -0.8% premarket

  44. Analysis: Williams-Sonoma to outperform

    07:56 AM ET · WSM

    • Morgan Stanley initiates coverage on Williams-Sonoma (WSM) with an Overweight rating.
    • The investment firm sets a $82 price target on the retailer.
    • WSM +0.3% premarket

  45. UBS better play than Credit Suisse says JPMorgan

    07:51 AM ET · UBS

    • UBS could nearly quadruple legal reserves to CHF 7B ($7.8B) and still have a common equity ratio of 13% by 2016, say JPMorgan analysts Kian Abouhossein and Amit Ranjan, also including a sizable dividend in that estimate.
    • In contrast, Credit Suisse’s (CS) common equity ratio drops to 9.3% – the lowest of the 17 global investment banks – thanks to the $2.6B U.S. tax evasion fine.
    • Credit Suisse’s investment banking operation, notes the team, is more highly exposed to shrinking fixed income business, generating just 48% of revenue from equities vs. 68% at UBS.
    • On wealth management, UBS gets the nod because of its stronger position in fast-growing Asia.

  46. Soccer – I think what Phil is trying to say without offending is "Soccer Sucks"….. ;)

  47. BOE’s Carney keeps them guessing

    07:27 AM ET · FXB

    • Doing his best to shake up currently dead volatility in foreign exchange, Bank of England Governor Mark Carney – days after suggesting markets aren’t pricing in rate hikes soon enough – says the U.K. economy still has spare capacity needing to be filled before higher rates are needed.
    • He also assures any hikes are likely to be gradual and limited.
    • Cable quickly slipped from about $1.7030 to $1.6970 on his remarks and is currently lower by 0.2% on the session to $1.6991.
    • ETFs: FXB, GBB

  48. India likely to cap prices on more drugs

    07:15 AM ET · GSK

    • An Indian health ministry panel meets today to consider adding more drugs to the government’s National List of Essential Medicines (NLEM). Membership on the list means that there is a cap on the price. It makes drugs more affordable for the >1B people, 70% who live on <$2/day.
    • Many observers are surprised by the formation of the committee considering the business-friendly posture of new Prime Minister Narendra Modi.
    • Last year the number of drugs on the NLEM increased from 74 to 348, covering ~30% of the total drugs sold in India.
    • Drug firms can protest and complain, but in the end there is little they can do. Even if the NLEM expands further, India remains an attractive growth market for the industry.
    • Related tickers: (GSK) (ABT) (PFE)

  49. morning PSWers!

    I've been "coining" so hard and barely had time to come up for air. That's would good, solid option-selling portfolios do for you — little need to check them 6 times a day (or even once a week).

    Still putting feelers out for solar/wind guys. Free coins … yesterday we gave out $1.82 per kWh, so think of it as a new (somewhat esoteric) revenue stream. The market decides the daily price ultimately though, so it can move around!

    Here's our twitter too.

  50. VRTX — WWOWW~!!

  51. FU NFLX!!!!

    FU TSLA!!!

  52. Phil // Momo
    I think you've got me confused with Jabo ; > I haven't played any mom's this year – CMG, PCLN, AMZN, GOOG, GMCR, NFLX, etc – can't do it. Don't do the crime if you can't do the time – Ooooooooooooo.
    TSLA is just such a house of cards and so outrageously valued, – I'm ok with 'the gamble'
    Thanks with your help on DXD – ya – confusing. Thats why I posted it up. My biggest problem is that I over hedge. Thats where most of my money has been lost this year. I'm just good at it. But I know the minute I pull my hedges – your cartoon becomes real ; KA  - BOOM !!!!
    Speaking of TSLA – when would you pull the short $140's to pay for a roll on the Sept $200's. You mentioned before that this should be more actively managed. 
    Heres the post on the after hours stuff – seems to be some controversy  - whatever.

    BDC // Solar
    I know some startup guys in SF – hit me up at and I'll connect you.

    Site keeps freezing. Argh.


  53. I have my finger on the Ignore button 1020 :-)

  54. stjeanluc – Gotcha!   :)

  55. My daughter pointed me to this app:

    That looks pretty cool if you are sick of waiting on hold for customer service!

  56. bioD – Can you provide a quick explanation of how you are planning to make money on these coins?  Just wondering as I have no insight into the field other than bitcoin increasing in value and getting stolen.

  57. FU Germany!!!!


    sorry yodi

  58. Rolling/Yodi – Generally, around 30% (premium left in short call), I'll look for what I want to roll to and then I just put a stop on the net rolling cost.  

    Soccer/Advill – No, not kidding.  Americans like to win, they abandon teams that lose (except Cubs fans) and get into sports where "We are the Champions" can be sung on a regular basis.  

    See a pattern?  

    Soccer/1020 – I don't think it sucks, it's lots of fun when I go to games in Europe.  It's just not catching on here, even back when they tried really hard to start a league.  The problem is you really have to start by spending 20 years funding school and college soccer programs to get a whole generation into it and maybe 10 years in, start a league with the expectation of making pretty much no money for another 10 years.  After 20 years and maybe $50Bn spent – I bet you'd have soccer in the 10% range.  Not sure if the payback is worth it but if basketball teams are fetching $2Bn, figure a 24-team league would make it's money back over time. 

    Momos/Wombat – True, that picture is better suited for Jabob but you also tend to do a lot of gung-ho trading.  On hedging, first of all – it's pointless if you aren't SURE you will make at least 2x the amount you will lose on the hedge if the market is flat or up.  Then the idea is to try to find a hedge that will mitigate appx HALF the damage on a 10% drop or more – NOT on a 5% drop.  A 5% drop you should be able to ride out – the idea is to have money to deploy in a real correction, not a dip.  

    Notice what we do with the STP, we always have hedges and they always lose money (in this market) but we keep rolling them back and picking some other short-term plays to HOPEFULLY make enough money to pay for them.  Meanwhile, the LTP, FOR A FACT, makes at least 20% a year if the market DOESN'T sell off because every single trade there is one where we give ourselves discounts on the entries and sell plenty of premium so that every tick of the clock makes us money in any direction.  

    TSLA/Wombat – I'm confused.  I know you have the short $320s, which are down but way out of the money so no worries other than margin (for now).  If you sold $140 puts, yes, I'd take advantage of the pop to take them off and, if TSLA goes lower, you can re-sell and, if TSLA goes higher, you may as well sell higher puts anyway. 

    LOL StJ!  

    NFLX/Rustle – Jackie and her friend told me yesterday that NFLX sucks because they've already watched everything.  Of course they mean everything they like but I find that too as I have maybe 24 things on my list to watch (that I never have time for) but it's slim pickings when I look to add something new.  For kids, who have 8 hours a day free to watch TV, they chew through the whole catalog in a year.   Long-term, I still think NFLX is nothing more than a new studio and will one day be priced like one – but that day may take a while.  

    Meanwhile, RUT knocking on 1,090 again but rejected there on /TF.  Europe is closing mostly red and that German Confidence thing is serious business but we seem to be ignoring it.   I'll play RUT short for the Webinar if it's still up here.  

    Dollar creeping back up to 80.50.  Oil $106.36, gold $1,319, silver $21.005, copper $3.155, nat gas $4.50, gasoline $3.127.

    Fastcustomer/StJ – That's fantastic.  I wonder how those arrangements work.

  59. How on earth is women's volleyball not one of the top sports picks?

  60. Phil // TSLA
    Sorry. Two different positions.
    I hold a Jan15 $320/420 Bear Call spread ( $3 ) in a few accounts. 
    Any way to take advantage of the longs ?

    Second is the PSW position 
    -3 Sept $200 short calls ( $26.55 )
    -2  Jan16 $140 short puts ( 0.87 )
    Jan16 $220/ 320 Bull Call spread ( $22 )

    The margin is just really annoying.

  61. Soccer – Seriously, soccer is a fun game to play, but watching it played can be a challenge at best, just like a pitching duel in baseball, except baseball won't have the fights and the occasional urine bomb to keep things interesting…… :)

  62. TSLA/Wombat – Wow, you risked $100 to make $3?  The problem you have (and you are seeing it now) is that the $420s are so far out of the money (with a 0.06 delta) that it offers no protection.  If TSLA were to pop $100, to $338, the long $420s would be about $6 more, which is right because the $320s are now $8.65 and the $420s are $1.80.  Unfortunately for you, the $320s you sold have a .22 delta and will be down $22 on the same $100 move up but, because they would go in the money, it would be even worse as the $220s are $39.50 (+$31), so the net delta against you is about 50% more than it seems (and 50% more than an analyzer would tell you – which is why they suck).  

    So of course you are in trouble on that position – it's a terrible position where you took 33x more risk than potential reward and you lose net 5x more on a move up than you make on a move down.  Also, isn't that a completely ridiculous amount of margin to tie up in an attempt to make $3?  

    The other position, which is in our STP, involved a lot of premium selling and is currently down about $2K but it's not worth changing unless we see strong earnings in Aug, in which case we'd DD the long spread (with $100 upside protection above $220) and roll the short calls up to something $320 or higher and, of course, sell more puts.  

    Jon Stewart great as usual with Iraq coverage:

  63. Phil / soccer;   what your figure  shows is that most popular sports are those that allows  hundreds of ad´s in it, is not casual that games with more " time offs" ( time for commercials) are the most broadcasted.

    You can seat for 4 hours in a Football game with 90 minutes of effective game…rest are commercials.

    If your theory is true U.S could never win in atletism, America´s Cup, etc.

    Another point is the "singularity"  The Baseball World League  ( just Americans playing) or the Football (rest of the World plays Rugby), trying to identify U.S identity with exclusive sports  something in fashion with the "anticommunist" in the 50´s., but still alive.

  64. The point to sports is do you fit in. Did you go to school with a whatever team? Can you relate, local team, school team. My high school did OK in basketball. After that my schools had debate. I can't watch baseball, golf, hockey, or soccer. I surfed, and skied and sometimes check that out but not being able to do either dims enthusiasm. I watch only professional football, my mom and dad started that and sometimes racing because girlfriend does, her brother worked for Dale Earnhardt and Richard Petty. Likely what your kids are into but again how do you relate or fit in.

  65. Phil // TSLA
    Yikes. I absolutlely ( obviously did not see it that way ) I was looking at it as ( spent 1x on longs, collected 6x on shorts ) – but I see your logic, albeit late. So, when you initialize  a position you're looking at the potential reward ( $3 ) versus the spread ( $100 ) I did run this through an analyzer too – sigh.
    any reco's on how to protect the $320's ?

  66. interesting // TSLA
    if you take a look at the 1yr wkly – the entire last move on TSLA has been on declining volume with absolutely no money flow ( CMF )

  67. VRTX….well, how about that July 75/80 C spread…..boom.  Done with it.

  68. Wombat TSLA well explained by Phil. But do you really think TSLA will go up an other 80$ by Jan15?

    Obviously the 420 is a shot to the moon. If you really think they will go up to 320 To cover is sell puts against it. But TSLA has its high days and low days and I think they will run out of steam again after the present run up.

  69. NFLX/Phil

    But for the adults who pay for it especially the mid 20's to early 40's range which is their biggest client base, there are a ton of shows to watch, not so much movies.  I still have movies sent to me so I have the newest ones.  My brother just started watching the Walking Dead and hasn't seen Mad Men, I have never seen Breaking Bad yet.  I know many people who watch NFLX more than cable.  That being said, still think the valuation is insane.  Good companies don't equal good stocks.

  70. STJ/VXX – do you ever lighten up on your VXX trade when the vix gets this far down?  I'm showing a 30% gain on my position and am wondering if I should sell all or half and wait for a better entry. 

  71. Oh Jesus.
    The site somehow checked me off the 'news' posts. I unchecked it and I lost all my comments.

    Yodi / TSLA
    In short, no ; I do not think TSLA will pop +35% their value on earnings. However Phil was correct in his thinking. My problem with this is I entered too late. I have the same trade in a different account that is 20K up. I don't look at deltas and such when I place trades – it's more on where I believe they will be trading.
    That being said I am hesitant to sell puts against it over earnings but that's what I was asking.
    Thanks for the response.
    TSLA catching some pressure at the 200

  72. wombat

    A refresh should fix it your comments are on the site. I refreshed to make sure.

  73. Ads/Advill – Not only that but the games themselves have been changed over the years to become more "commercial friendly".  They didn't used too constantly stop football games – it makes it really annoying to see a game live.  Say what you want about it but that's how we roll!  

    Relating/Shadow – That's true, I have friends up north who actually like hokey!  Amazing but true…  cheeky

    TSLA/Wombat – That's why I stress that you understand the how's and why's of options, rather than follow trades – whether from me or a spread hacker!  Anyway, my point was just dump them, reclaim your margin and move on to more useful positions – why tie up your cash with that silliness?   As to money flow – the whole market is like that.  

    NFLX/Rustle – If I didn't have Tivo, I'm sure I'd use NFLX more but Tivo is still better-organized and quicker to run shows and has everything I could possibly want (including NFLX). 

    Gotta run to the Webinar!  

  74. Pay whatever TV has got to start fighting for equality. I sold Satellite TV and many hoses don't have a dish anymore, here cable TV dried up and NFLX has a good price point but it requires a good internet connection and here if fiber has been run to your location, cost $100 per moth to stop buffering plus you get a land line another $40 want it or not. I will bet this isn't the only place and I know people that shut off internet to save, slow speed with land line is $92. They have a cell phone, lots are not smart phones, data costs add too much. I am sure most can't fathom this. Metro areas are a different world.

  75. VXX / Palotay – I am in for the duration. If you can enter at a price lower than your average, you can add more. But it's up to you. If you are happy with a 30% gain in less than 6 months, you can't go wrong taking profits!

  76. Damn, I'm so pissed we missed those RUT shorts!  

    Notice Nas never really came down – wasn't a good laggard in the end.  

    Different world/Shadow – That's what I was saying on the Webinar – hard for people who have time and money to be on trading Webinars to get their heads around the lives of the bottom 40% in this country.  This weekend, we had to go through Paterson to get somewhere with my daughter and her friends.  Though it's the town next to us – we are "up mountain" and they are down in the valley and have nothing to do with each other (and our police make sure of that!).  The girls are about 12-13 and have grown up next door to this town and they could not believe how poor it looked.  Most people in the top 40% think poverty is when you get a notice on your electric bill and have to give them a check and you put off a mortgage payment for another week – actual poverty is generally and abstract concept for the top 40% that they simply can't relate to.  

    Things are getting worse now – no buyers at all.

  77. Looks like /TF is a distant memory! Up 15 since 6:30, down 17 now…..pissed is the mood right now!

  78. Here – this will cheer ya up – super cool – at least I know where my migraines come from now.

  79. NBCUniversal gobbles up prime-time ad market share

    02:42 PM ET · CMCSA

    • NBCUniversal (CMCSA) has lined up as much as $2.5B in fall prime-time ad commitments, according to Variety.
    • That mark would be well-ahead of the $2B hauled in by the broadcaster last year.
    • Media insiders think ABC (DIS) and CBS (CBS) took in less money this year than last, although CBS probably secured the best rates of the bunch.

  80. Microsoft launches another Android phone

    02:33 PM ET · MSFT

    • Four months after Nokia launched 3 low-end Android phones (the Nokia X, X+, and XL), Microsoft (MSFT -0.5%) has launched the €99 ($135) X2. The device sports a 4.3″ display (bigger than the X’s 4″ display) to go with 1GB of RAM and a dual-core, 1.2GHz., CPU.
    • Like the prior models, the X2 doesn’t run on Google’s version of Android, and thus lack the apps/services normally bundled with it (Play, Gmail, Maps, YouTube, Now). Microsoft and Nokia’s apps/services take their place.
    • Nonetheless, the phones allow Microsoft to sell devices that can leverage much of Android’s app ecosystem (still far larger than Windows Phone’s) as it battles with Google and its OEM partners for prepaid/emerging markets buyers.
    • PC Magazine’s Sascha Segan isn’t convinced Microsoft is committed to Android long-term, especially since the price delta between the X line and low-end Windows Phones is about to dissipate. “Phone development cycles are still well over a year … there were plenty of sunk costs, and the really low-cost Windows phones aren’t ready yet. [The X2] just barely aligns with Microsoft’s strategy, but it aligns.”
    • Previous: Microsoft reportedly thinking of allowing Android apps on Windows/WP

  81. Cantor upbeat on Facebook’s video ads; Forrester teen survey positive

    02:18 PM ET · FB

    • Facebook (FB +1.3%) is overhauling its news feed video-ranking algorithm to account for factors such as whether whether users have watched and for how long, notes Cantor’s Youssef Squali (Buy, $80 PT) Squali sees Facebook’s efforts to better personalize video content as “a precursor to a more aggressive monetization ramp.”
    • Though Facebook officially launched its auto-play video ad product in March, it’s taking a cautious approach to rolling them out, and has said it doesn’t expect huge 2014 sales.
    • Meanwhile, a Forrester survey of 4,517 Americans aged 12-17 found over 3/4 of respondents were on Facebook, and that nearly half of all 12 and 13-year olds had increased their Facebook usage over the last year.
    • Forrester also reports Facebook and Instagram were the only social networks over 25% of respondents claimed to use “all the time,” and that smartphone owners were “nearly twice as likely to say they use Facebook all the time as non-smartphone users.”
    • Forrester’s numbers follow less encouraging U.S. teen survey data from Pew and Piper, and the concerns about teen engagement that followed October remarks about a drop in U.S. teen DAUs.
    • Yesterday: Sterne forecasts $30B in 2018 revenue

  82. Aggressive push by Delta Air Lines disrupts rivals

    01:55 PM ET · DAL

    • Delta Air Lines (DAL +0.1%) is creating a headache for rivals with its penchant for invading new markets, notes Wolfe Research.
    • Both JetBlue (JBLU +1.2%) and Alaska Air (ALK +0.9%) have felt the heat from Delta’s aggressive push.
    • No stunner, but Wolfe Research reminds that tight capacity for carriers in their competitive markets leads to stock out-performance.

  83. NetApp gains on favorable analyst day outlook

    01:31 PM ET · NTAP

    • NetApp (NTAP +2.4%) guides during its 2014 analyst day for FY15 (ends April ’15) EPS growth of “just under 10%.” That’s favorable to a consensus for 6.5% growth.
    • NetApp also forecasts its branded revenue (93% of total) will see mid-single digit annual growth from FY15-FY17, and that its gross margin over this timeframe will be in the 63%-64% range. GM was at 63% in FY14, and 61% in FY13.
    • OEM revenue (7% of total), getting clobbered thanks to the loss of IBM sales, is expected to see “modest declines” after FY15. Op. margin is expected to be in the 18%-20% range from FY15-FY17 vs. 18% in FY14 and 15% in FY13. NetApp has a goal of growing EPS at 2x the rate of its branded revenue growth.
    • NetApp plans to hike its dividend (1.8% current yield) in FY15, and to use up its current buyback authorization within 12 months. The company had $1.1B remaining on its authorization at the end of FY14, after spending $374.5M on buybacks in FQ4.
    • Shares remain well below their 2010/2011 highs amid growth and competitive concerns. They go for just ~8x FY15E EPS exc. net cash/investments.
    • Analyst day slides

  84. ABC News gets its own Apple TV channel

    01:23 PM ET · DIS

    • ABC News launches a new Apple TV channel today which will make on-demand content available to consumers.
    • The channel will feature local content and live video along with archived ABC footage.
    • The deal makes another step forward in the growing content relationship between Apple and Disney (DIS +0.3%).

  85. SunTrust, JPMorgan defend amid carnage

    12:59 PM ET · WWWW

    • Though it has been trying for years, Google has failed to kill off Yelp in the local/SMB reviews space, notes SunTrust, reiterating a Buy and $38 PT on (WWWW -19.8%) following the Google Domains launch.
    • Likewise, JPMorgan (Overweight) observes Google (with the help of partners) has been offering domain name services for some time.
    • In spite of the defenses, both and Endurance International (EIGI -9.9%) remain off sharply.
    • Worth noting: Yelp, unlike domain registration firms, is able to use its network effect to keep Google and other rivals at bay. At the same time, the domain registration market has long been intensely competitive, featuring high-profile names such as Yahoo and GoDaddy.
    • Google’s pricing for Domains (still in beta) is likely responsible for some of the heartburn: The Web giant is charging $12/year per registration, and is bundling support for up to 100 e-mail addresses and sub-domains, as well as free private registration. charges $37/year per registration, and another $1.95/month for private registration.

  86. BNSF, Canadian Pacific ordered to disclose plans to speed grain shipments

    12:48 PM ET · BRK.A

    • Warren Buffett’s BNSF Railway (BRK.A, BRK.B) and Canadian Pacific Railway (CP) face a June 27 deadline to say how they will clear a backlog of grain shipments that has frustrated farmers for months.
    • The U.S. Surface Transportation Board is ordering the railroads to outline by then how they will deal with service disruptions, including a timeline for doing so, and to subsequently provide weekly updates about their progress.
    • This year’s unusually cold winter slowed rail networks in the U.S. and Canada, forcing railroads to run shorter trains and aggravating congestion on a system already dealing with increased shipments of crude oil from North Dakota’s Bakken Shale region.

  87. FDA clears new home oxygen concentrator

    12:47 PM ET · INGN

    • The U.S. regulator approves Inogen’s (INGN) At Home oxygen concentrator. When sales begin later this year, the 18-pound unit will be the lightest 5 liter/minute continuous flow oxygen concentrator on the market as well as having the lowest power consumption.

  88. Pandora rallies on bullish Canaccord, MKM notes

    12:39 PM ET · P

    • A talk with Pandora’s (P +3.4%) IR team has given Canaccord’s Michael Graham (Buy, $43 PT) “renewed confidence in Pandora’s ability to exceed [Canaccord's] revenue targets over time, especially when viewed through the lens of future local sales capacity.”
    • Pandora has been spending heavily to grow its local ad salesforce: Sales/marketing spend rose 63% Y/Y in Q1 to $61.8M.
    • Meanwhile, MKM’s Rob Sanderson (Buy) believes Pandora could see $5.60/year in EPS one day with the help of rising ad load. He observes that while Pandora has a 9% share of ad-supported radio listening, its audio ad sales “represented less than 2% share of the spending pie last year.”
    • Pandora’s 2014 and 2015 EPS consensus estimates are only at $0.17 and $0.48, respectively. Though its ad load has been rising, the company has been taking a measured approach in order not to alienate users who have plenty of alternatives.
    • Shares have topped $29 for the first time since April.

  89. Midday Gainers / Losers

    12:45 PM ET · VRTX

  90. Foreigners buy the dip in Vietnam

    12:30 PM ET · VNM

    • Data from JPMorgan show a net 16.6M shares were bought by foreigners last Friday as Vietnam slumped on news China had sent more oil rigs to disputed waters in the South China Sea. This compares to an average of 2.3M shares over the previous nine trading days.
    • Year-to-date, Vietnam is ahead 8.8%, but is down over the last two months, with JPMorgan noting disappointment the foreign ownership limit on brokerages has not yet been lifted. Also combining with the China news were two different county ETFs undertaking routine rebalancing last week.
    • VNM +0.3% on the session.

  91. Micron jumps post-earnings; SanDisk also up

    12:09 PM ET · MU

    • Micron’s (MU +4.9%) FQ4 guidance “clearly confirms up-cycle or record-high profit for not only FQ4-14 but also FY15,” says BofA/Merrill, reiterating a Buy (following a 2-notch upgrade earlier in June) and hiking its PT by $3 to $43.
    • BofA declares Micron’s strategy, which includes ramping SSD (previous) and mobile DRAM sales, has “little execution risk.” Its PT is equal to 14x FY15 (ends Aug. ’15) EPS.
    • Needham has upgraded shares to Strong Buy. It admits FQ3 gross margin was “slightly below expectations” amid growing NAND controller/firmware investments (SSD-related), but considers the spending justified.
    • RBC, which upgraded Micron in May, once more calls the company a long-term play on the memory industry’s structural changes (echoes of David Einhorn). Summit Research observes strong server DRAM sales (boosted by Web/cloud and big data demand) are providing a lift.
    • But with shares up over 6x from their fall 2012 lows, there are also some contrarian views. Morgan Stanley wants “a better entry point,” given Micron is at 10x the firm’s peak EPS estimate. Susquehanna thinks Micron has a ways to go in improving its controller/firmware tech, and that a partnership or acquisitions might be needed. Pac Crest argues SanDisk (SNDK +1.1%) has a technology edge for 3-bit (TLC) NAND.
    • Micron stated on its CC (transcript) it’ll take a “measured and prudent” approach to FY15 capex. The company also reiterated it expects DRAM supply and demand to be balanced, and thinks NAND supply growth could fall going into 2016 due to challenges related to 3D NAND investments.

  92. Retail watch: Promotional fever cools off a bit

    12:07 PM ET · WMT

    • Channel checks from Deutsche Bank indicate the promotional cadence in the retail sector has been dialed back a notch from the level seen in Q1.
    • The investment firm sees less promotional activity from retail beasts Wal-Mart (WMT +0.3%) and Target (TGT +0.2%) – while department store chains such as Kohl’s (KSS +0.7%), Nordstrom (JWN +0.6%), and Dillard’s (DDS -0.1%) have also shown some improvement.
    • J.C. Pennney (JCP +1%) is a tougher nut to crack for DB with its radical changes in pricing strategy making the year-over-year comparison less informative.

  93. Enthusiasm builds over Japan casino legalization

    11:45 AM ET · MPEL

    • Casino stocks gain steam after Japanese Prime Minister Shinzo Abe says his party aims to pass a law in the next session of parliament to legalize casinos in the nation.
    • Japan is forecast to be Asia’s biggest casino market after Macau.
    • Advancers: Melco Crown (MPEL) +2.5%, Caesars Entertainment (CZR) +1.9%, MGM Resorts (MGM) +1.9%, Wynn Resorts (WYNN) +1.4%, Las Vegas Sands (LVS) +1.2%.

  94. Paulson, Bloomberg, Steyer: Global warming is risky business

    11:44 AM ET · TRP

    • Former Treasury Secretary Henry Paulson, ex-NYC Mayor Michael Bloomberg and hedge fund billionaire Tom Steyer team up to release a report called Risky Business, that argues U.S. companies should treat climate change as any other business threat.
    • The report outlines the economic risks posed by climate change to the U.S., including extreme weather effects like hurricanes and rising sea levels that jeopardize more than $1.4T in coastal real estate; some Midwestern and Southern agricultural areas could see a decline in yields of more than 10% due to increased drought and flooding, according to the study.
    • Steyer is known in energy circles for his strong opposition to the Keystone XL pipeline (TRP).

  95. Vietnam, China dispute new disturbance near Cnooc oil rig

    11:28 AM ET · CEO

    • Vietnam and China trade new accusations that each had rammed a vessel owned by the other near a Chinese oil rig that has become a flash point in waters they both claim in the South China Sea.
    • Vietnam’s coast guard says an incident Monday left two Vietnamese sailors injured and a fishing vessel severely damaged after seven Chinese ships chased the Vietnamese boat several miles before one of them rammed it.
    • Vietnam says the Cnooc (CEO) rig was deployed within its 200 nautical mile exclusive economic zone, while China says it is carrying out normal activities in Chinese waters and is entitled to conduct drilling operations there.

  96. MeetMe +15.3% after reporting 15M+ daily chats

    11:28 AM ET · MEET

    • 15M+ chats were sent on a single day for the first time, MeetMe (MEET) announces. The company notes it wasn’t “consistently breaking” 10M chats back in April.
    • Much like its unique user growth (previous), MeetMe attributes the increase to the addition of new features to its apps, such as Friend Suggestions and Icebreakers.
    • Shares now +58% from their May low of $1.71. They rose last week following Wunderlich’s coverage launch.

  97. Chipotle increases use of local farms for produce

    11:11 AM ET · CMG

    • Chipotle (CMG) says it will purchase 20M pounds of locally grown produce this year, up 33% from the level of a year ago.
    • The company uses 45 different local farms across the country to supply it outside of the normal distribution chain.
    • The percentage of consumers that have indicated they factor in the sourcing of quick-service food has risen steadily over the last few years.

  98. Voters to decide on gambling in Massachusetts

    10:59 AM ET · MGM

    • The highest court in Massachusetts rules that voters can decide if a state law allowing casinos can be overturned.
    • The issue can now appear on the November ballot in the state.
    • Casino operators vying to develop complexes in Massachusetts include MGM Resorts (MGM), Wynn Resorts (WYNN), and Mohegan Sun.

  99. Kraton -9% after warning on China market

    10:50 AM ET · KRA

    • Kraton Performance Polymers (KRA -8.9%) is sharply lower after warning of “very difficult trading conditions” in the China market, causing Q1 results for LCY Chemical to come in below expectations; China represents more than half of LCY’s SBC business by volume.
    • Reaffirms FY 2014 guidance, seeing EPS of $1.50-$1.60 vs. analyst consensus estimate $1.79 and adjusted EBITDA of $150M; still expects the LCY acquisition to close in Q4.
    • Estimates it could take up to two years for the China market to rebalance.

  100. Groupon buys grocery coupon app; shares jump again

    10:46 AM ET · GRPN

    • Groupon (GRPN +7.8%) has bought SnapSaves, the Canadian developer of a grocery coupon app. Terms are undisclosed.
    • SnapSaves, which claims 2M+ Canadian users, will now expand its reach to the U.S. Its apps allow shoppers to receive cash back on select items after uploading grocery receipt pictures. Retail partners include Target, Costco, Whole Foods, and Safeway.
    • The purchase puts Groupon into competition with (COUP), which handled 1.3B+ transactions in 2013 and has a healthy mobile presence. Groupon has long asserted it wants to be an end-to-end provider of local commerce services for merchants.
    • Shares are adding to the big gains they saw yesterday following a bullish Piper note. 15% of the float was shorted as of May 30.

  101. Emirates to hold talks with Airbus, Boeing over new order

    10:46 AM ET · EADSF

    • After cancelling its $16B order for 70 Airbus A350 jets two weeks ago, Dubai’s Emirates airline is now looking to begin talks with Airbus (EADSF) and rival Boeing (BA +0.2%) for a new contract.
    • Emirates is looking for a purchase of 50 to 70 regional jets, such as the A350 or 787 Dreamliner, to operate its routes in the Middle East.
    • The carrier will discuss the options with Airbus and Boeing in late 2014 or 2015.

  102. For those who have not figured it out yet, 'News' has the benefits of all users, even the ability to ignore. I truly appreciate Phil's work in aggregating information from Bloomberg – but for pure unadulterated Phil….. and saving digital ink ………. No offence meant, hope none is taken :)  

  103. Phil // Butter
    Per the webinar comment on butterflies and spikes ; do you usually put stops on your short legs of butterflies ?

  104. Winston / News:  An obvious tip that never occurred to me.  Thank you.  My over-worked mouse scrolling finger is in your debt.

  105. Short term short is the place to be right now – and you didn't need me to tell you that. But having a portfolio of positions that have exposure to both sides of the tape make it easier to trade around. I was concerned yesterday about GS motoring higher yesterday – in the end decided to leave it alone. Today I reap the benefits. As so often is the case, long term positions should be adjusted with a view to the long term (thanks Phil). Constantly fiddling with positions, certainly for me, ends in tears. 

  106. WiFi images are very cool, Wombat.  I used to be concerned about all those various waves we're bombarded with but, as you can see from those pictures – there's just no point in worrying anymore – it's everywhere!  

    Now RUT down 1% – that's CRAZY!!! 

    No particular news to cause such a sell-off.  

    News/Winston – It saves me from explaining nuances all the time (assuming you actually read it!) and, of course, it's a good reference looking back to see what I might have been reading that caused me to take a certain position when I want to check my premise later on.

    Stops/Wombat – I don't put hard stops, generally but, as a rule of thumb – 1/4 out with a 1/3 loss and 1/4 out with a 50% loss because then you only have 1/2 left and an easy 2x roll.  If, in either case, it reverses on you, the damage is limited and you can re-sell what you bought back.  

    News/MJJ – Man, I would think you guys could at least bother to read the highlights!  

    Fiddling/Winston – Hard habit to break – especially for those of us who built businesses and learned that most things can be fixed by working harder.  

  107. News / Phil :  Of course we appreciate your agglomeration efforts, it is just that, on days like this, I tend to look for the wisdom contained in the patches of Blue Sky!!

  108. Phil/News: I actually thought I discerned a direct correlation between the number of news articles and the downward pressure on stocks :)  

  109. So, transports are up…but  BDI is down…BIG…

  110. Pressure/Winston – That's interesting.  I'd say, if the market does something funny, I'll tend to take a look at the news to see what's up so some correlation there but would be for up or down.  

    VIX shot up to 12.24 – now that's news!  

    BDI/Pharm – That's been bothering me too.  

  111. Phil – I guess I'm saying instead of analyzing the news, MAKE the news! Give us some more of that special brew which works in up and down markets so we can all tell our grandchildren, I remember those days when there was this guy and everything he touched it turned to gold.

  112. TOS update/problems:

    I just talked to the trade desk about the fact that I still don't have the greeks on a number of my positions on the Position Statement tab.

    They said it is a high priority, system wide,  issue that they are working on.

    All I can say is Wow!

  113. LOL Winston – that guy is on the sidelines at the moment in this very uncertain market.  That other guy will come back when there's an obvious move to make (ie, the Rothstein Strategy):

    It's easy to be right all the time when you WAIT PATIENTLY for the times when the trades are obvious.  The hardest thing to learn (and teach) is how NOT to trade.  

    Like NOW the RUT is a good long (/TF) over the 1,170 line (now 1,169).  It wasn't an obvious play before but now we're heading into the close and it's time to boost it again so I say long and, a month from now, this will go in the win column and you'll say "why can't you make calls like those anymore?"  wink?

  114. Winston it is more than the news, it is reality. I report my local oil indicator, and here is that latest. Diesel dropped from $4.20 to $3.85 per gallon while oil shot up to $107. I balance food for some parts so I can mow the grass. I jumped and hotwired it to start. Still needs a battery, ignition switch, and a blade. It is embarrassing next to places that have gardeners. There are millions that the rich call too lazy to work but they just hide and hope something changes. To maintain sanity you must stop trying because constant failure depresses everything. 

  115. CNBC blames bomb in Iraq that killed 50 people for the unscripted sell-off.  

  116. Are you saying to go long RUT and hold overnight?

  117. Phil

    CNBC is again full of crap markets are numb to 50 dead in Iraq. This is one down day after a move up unjustified.

  118. Shadowfax/ stop trying in order to knock failure on the head – never a truer word said.

  119. Another tourist town indicator for the now jet set. Early Monday morning I drove by 2 motels, not 10 cars put together years ago every room full. The bed and breakfast had 2 cars.

  120. RUT/Jasu – No overnights, I'm saying IF they clear 1,170 (haven't yet) then I'd go long using that line for a stop.  Hopefully we run to at least 1,172.50 for $250 per contract but ONLY if we cross over the line – small potential reward means you have to keep the risk as low as possible.  

    Down day/Shadow – They have to find an excuse for any down day – it's simply not supposed to happen and they wouldn't want the sheeple watching them to lose faith and stop buying.  

    RT ‎- 4 hours ago
    Unknown planes bomb ISIS positions in N. Iraq, Pentagon denies it's US … claims that the raid was carried out by Syria, citing local tribal chiefs.

    That MIGHT have happened today (unconfirmed but the same thing happened on Saturday and the market was up yesterday:

    It's kind of what they do (sorry for the news, Winston).  

  121. Pharm – It's getting to be time to sell some DSX OTM puts for income.  It's been a good income source for me for the past two years.

  122. Phil/Rothstein: The real message was that Mr. Thompson had all his money tied up in the land deal!!!!!!!!

  123. So…some quick little thoughts considering the CNBC headlines right now.

    "Dow drops 75 points as Iraq concerns undo data cheer."

    "US Oil ends near $106 as stockpile data loom."

    Now, either CNBC has their analysis all wrong or one of the two need to correct.  If Iraq is the reason for the Dow falling, then oil needs to climb.  If Iraq is not a concern, then the Dow should climb.  In other words, what's the better call re: oil?  USO or SCO longs in preparation for tomorrow?  I have no existing position at the moment but those $25 SCO longs seem like they could work out well if we get a build tomorrow.

  124. This is a great lecture:

  125. JPH

    I will promise this actual consumption will be down again no matter what numbers are put up. Phil is likely correct that prices will be up until after the holidays but I expect prices to drop way before September.

  126. Shadow is right-we are in a tourist area & there Is no one on the roads. We have a campground & Rv place on Lake Superior that the town runs & it has basically 1/5th of the campers we usually have at this time of the year. O f course the global warming hasn't hit yet 43 degrees this AM, but it is the deadest of seen in 12 years.

  127. Phil / news ;


    Usually news helps  " to wait paciently" , I don´t read them all but having heading and full lecture of what is interesting for me.

    What I could suggest is that phil´s calls to be made more clearly, there was now a confusion in what to do with /TF  is a good example of this.

  128. Private

    Thanks for the back up. I rarely believe I am taken seriously. This is the deadest since living her 20 years, 10 years ago there was more going on during mud spring. Where are the Mega Camper land road blockers?

  129. Rothstein/Winston – I disagree, I took the quote at face value as Thompson's issue was his overall situation anyway.   In any case, I don't agree with "betting it all" but I do agree with the rest – take your time, wait for the right moment and THEN make your bets.  The rest of the time we watch and learn.  Well, I learn – you don't seem to be a big fan of reading….

    Oil/JPH – No bet with July 4th weekend so close.  I like our bullish Oct SCO spread, where we're simply betting $105 doesn't hold that long but, short-term, anything can happen.  

    Roads/Pirate, Shadow – Certainly doesn't bode well for fuel consumption.  

    Calls/Advill – I do try but while I'm writing these short-term trade ideas, the stocks or futures are moving.  I'm happy to clarify but my main interest is to make a call and hit "submit" before the opportunity is gone.  

    Meanwhile, RUT now lagging others at 1,167.8 so now I like the long here with a stop below 1,167.50 ($40 loss) as long as /YM hold 16,750, /ES holds 1,942.50 and /NQ holds 3,795.

    I hope that's clear enough Advill!  

  130. Phil the Stewart clip was great, Dick at Liz's house in Wilson/Jackson. Cowboy hat, bet he doesn't show his face there. He is no cowboy and Liz is his audience, saying nothing, she dropped out of senate for very suspicious reasons like breaking the law.

  131. must add race after senate.

  132. Re: Vacations.  We run a beach concession stand in FL and the beaches here are packed Fri, Sat, Sun.  Lots of people.  Best attendance so far in years.

  133. Burrben

    Can you tell if it is locals? Going to the beach is not expensive unless you travel from far away. I always thought Florida was a winter destination. Going to Disney World is for kids summer, and definitely the well off.

  134. No Vacationers?

    I don't know about that. I have a couple of vacation rentals on the beach in the San Diego area. I have one week open in August in each of the condos ( at $2750 in the high season) and they will fill. I have a house that rents for $4900 a week in the high season. It has 6 nights open at end of September… other than that 100% booked till end of October. It sleeps 12 so we get 2 or 3 couples with their kids who split the rent.  Arizona folks mostly just desperate to get away from the heat! The 10% stay at the new Marriott down the street at up to $525+ tax a night.. and I was told today they are 100% booked over the 4th and doing well otherwise.

  135. Phil just sent this to John Barrasso with some of your points, response to his, not worth posting BS to me.

    ~~Dear John,
     You are completely wrong about exporting gas will help consumers! It will help the producers with higher prices and higher sales. The other issue you seem to miss is WY gas sales need more gas pipes or nothing goes anywhere. So you push coal that needs a push to clean it up not allow pollution, that would sell more coal. You want the Keystone pipeline but for what? Canadians will build it, fill it with their tar sands, 50 people get a job, and sooner or later we clean up the spills. These do nothing for American consumers.
     Corporate tax rate is 35% very high but only small business pay it. Corporate tax ends up under 15% and many companies like GE get subsidized and pay nothing. How about end all current taxes and put in a 20% VAT. 3.3 Billion dollars come in fairly and without a bunch of accountants and lawyers fighting for unfairness. Corporations can move wherever they feel best bust, everything sold in American to business or consumers pays a fair share. America is the consumer capital of the world.Phil just sent this to John Barraso,

  136. Your site still screws up copy paste. First it dumps my intro then adds that last line that I put back at the top.

  137. ~~gerryf

    I posted weeks ago the coasts are in a different reality but like the rich have all the wealth, the economy misses the entire center! Jersey shore, Florida, and California beaches and a bunch more mostly east coast.

  138. Miami Beach hopping, lots of shopping, restaurants full even though it is rather the low season.  But I doubt Miami Beach is a data point with much relevance to the U.S. — Florida's lack of an income tax and it's warm weather make it a natural for expatriates, and the place is hopping with Russians, Germans, and other overseas-based rich guys who need a bolthole where they're unlikely to be kidnapped or capped by Putin.

  139. Phil / Butterflies

    I know you don’t like talking about the butterflies but I don’t want to make any changes. I just want to understand them better.

    Of the five butterflies on the portfolio 4 of them have longs that you bought between 10% and 20% out of the money and paid between $4.00 and $8.40 for the call/put pair. For example BTU was approximately at $16.23 and you bought the $20.00 call and the $13.00 put for $4.00. To my view this makes for a cheaper long entry that is easier to compensate with the short sales, but you have a range where both longs could end up with NO value (I know we would probably roll them before that).

    However the DIS butterfly is WAY different. With DIS at approximately $75.56 you bought longs way in the money (about 26/27 % ITM). The cost of the longs was much higher at $46.91. This makes for a more expensive entry and more difficult to recoup, in principle, BUT this also warranties that at least one of your longs will have a lot of value at expiration (if we let them get there).

    Why did you choose this approach with DIS and not the others?

    How about a butterfly with longs at the money? For example one with DIS today buying both longs at the $82.50 strike (DIS at $82.68). Pros/cons?

    We keep learning


  140. Phil: A futures set-up question (I'm sure you never expected me to ask a futures question!)

    On TOS I've set up a 5×3 chart grid much like you have set up. I've noticed that in some of the webinars you demonstrate with a 5 minute candle, and sometimes 10 or 15 minute. What is your strongest preference, or does it depend on what's going on in the market?  

    On your numerous suggestions I'm going to dip my toes (carefully and one by one) in the futures market.

  141. CNBC blames bombings and geopolitical events? Those cretins! That is JUST what they want us to think. They don't want us to read between the lines. They don't want us to be informed and to critically appraise their ideas. We owe it to ourselves to think outside the box and get to the bottom of it! 

    I am confident that what I present, HERE, is what is ultimately responsible for such tumultuous market activity today:

    (i.e., "A 2013 'theremin only' concerto of Beethoven's Ode to Joy).

  142. yo_mamma

    The 9th in a strange way, what are you implying as reason?

  143. GTHP/Pharm – announced awards and closing in on LuViva approval from FDA (per latest 10-k)..  Time add some (more) before a glorious revaluation to unprecedented heights?

  144. VIV/Phil -  almost 9% dividend… something for the LT port?

  145. Shadow / Beethoven's 9th / A Theremin Concerto -

    Not implying anything, Shadowfax. I was just joking around.

    I figured I could make it appear that there was something happening behind the scenes that was nefarious and obscure, decorated with imperative language and allusions to tenebrous (shadowy) financial activity at work, I'd get a few laughs for providing a link to something that, as Monty Python would probably say,  was "completely different". 

    It's my immaturity breaking through at the end of a long day.


    Cars, soda/pop, cable TV, Brick and Mortar stores, and housing. It is having big implications on the economy and nobody is listening. 

  147. yo_mamma

    That is a very good point but I didn't think like that, still have no idea how the sound was produced other than the piano. a room full of very serious looking people with a what? More should check it someone should know. On my laptop speakers was awful.

  148. you can do better but I caught this John Stewart clip.

  149. aka/butterflies

    I have been wondering the same thing. I understand the DIS type with the OTM longs calls /puts because they act as insurance against a huge move and since the most you can lose on the longs is $4, you just have to sell more than that in premium. But I would love to understand the criteria for choosing the stock (DIS and CZR have very different volatility profiles for example) and why one would use OTM  vs ITM  longs. It also seems that managing excess volatility on these could be tricky and hopefully we can watch some examples of when and how to roll these.

  150. Butterflies – I believe the DIS transaction was a special case for IRA accounts that don't permit short credit spreads. In the DIS transaction, the call and put spreads are long spread positions, thus zero margin requirement. In the other four examples, the investor will post cash margin for the short credit spreads.

    Note: a few brokers will permit short credit spreads and short puts when covered with cash margin. 

  151. eric_s

    Not sure I follow you. The BTU butterfly is a pair of credit spreads, but all the others are debit spreads.

  152. Shadowfax / Beethoven for Piano & Theramin -

    The "choir", those people in black with the dolls on their laps, are using a device called a theramin (also called an aetherphone) to represent the voiced choral sound (and it's just … creepy). A theramin is a proximity sensor attuned to electromagnetic waves around it, which are manipulated by the relative position of a person's hands. The changes in the changes in the waves are converted to signals, amplified, and then transmitted to a speaker on the device.

    Jimmy Page used one in "It Might Get Loud" by waving his hands around the device and achieve some other-worldly effects from it. That was pretty interesting. Here, with 167 people using a thermin, it's just off-beat and funny like one would probably expect from an experimental orchestral arrangement in Japan…or anywhere.

  153. Japanese orchestra? Oh yeah – love it!

  154. DIS- This was set up by Phil to show how butterfly type trades could be done in an IRA, which don’t allow debit type spreads. My problem with it is that in the event of a big move you would be seriously exposed by the short leg and get no additional protection from the longs because the long gain on the put is offset by loss on the call and vice versa

  155. Phil, What is your opinion of buying a house now? I'm thinking of moving back to Florida on the east coast-Daytona Beach. Prices seem reasonable 180K, 2 blocks from the beach, nice 3/2 1600sf, interest rates still low and if inflation hits which I believe it will-it will give leverage too. I sold my condo in Thailand at the right time here. You made a great call a couple years ago in Las Vegas on the CityCenter condos. On the negative side I see more people not being able to afford houses also and interest rates moving up. Thanks

  156. Jomptien / FL;


    Prices in Florida are at the same level than before crisis, this is specially true in areas where international buyers are main force  ( half of the World in small wars means a push for " heaven" areas).

    Will tell you what I did with my house in TX. assuming you have the cash of your condo sale;

    1  Negotiate with your bank a  loan ( not a mortgage),  you provide as collateral a stock account with your money costs 2.5 yo 3.5%

    2. Create  a portfolio of dividend stocks with 5 to 13% dividends,   stops are a must.

    3. Pay your credit with the soon as you can.


    I did it in 2010 and is working fine.

  157. Good morning!  

    What a shame we missed the spike in oil back to $107.50 at 6:15 pm (pretty much when the Futures re-opened).  It's been straight down since then and we just bounced off $106 – which was enough to get me out of bed this morning (most mornings I look at Bloomberg and nothing is so exciting).  Brent is down 0.75 for the session and, after all that drama, we are flat at $106..25 so I still like a short here on /CL with a tight stop above the line.  

    US outlook

    The US will allow exports of light crude after minimal refining, the Wall Street Journal reported yesterday. The innovative refining process, which qualifies the fuel for export as a refined petroleum product, allows Pioneer Natural Resources, the company which owns the facility, to circumvent a 41-year old ban on crude oil exports in the US.

    There has been no change in policy on crude oil exports,” Jim Hock, a spokesman for the Department of Commerce, said for Bloomberg.

    Elsewhere, the US, which consume 21% of all oil, will post key economic data today. Durable goods orders for May are projected to stand for a 0.2% monthly growth, while core orders, which exclude transportation items, are set to add 0.4% on a monthly basis. Meanwhile, the final reading on GDP for Q1 will be revealed, and analysts forecast a figure of -1.8% annual growth.

    Later, Markit will post its preliminary reading on US services PMI for June. Experts suggest a standing of 58.6 after 58.1 in May. A reading of 50 or higher means expansion, and vice versa. The greater the distance from 50, the more sizable an expansion or contraction.

    Oil reports

    The private American Petroleum Institute (API) released its reading on US oil inventories for the week ended June 20 yesterday. The Institute posted a 4 million-barrel increase for crude stocks, while gasoline added 2.2 million barrels. A Bloomberg survey suggested a 1.7 million-barrel draw for crude. The official Energy Information Administration (EIA) report is due later today.

    Last week’s log revealed a smaller-than-expected drop for crude supplies, which declined by 0.6 million barrels. Imports of crude had slightly increased after dropping 20% over the previous two weeks. Meanwhile, motor gasoline stockpiles grew, as the report logged a 10% increase in gasoline production, for the highest output since 1986.

    Technical view

    According to Binary Tribune’s daily analysis, in case the West Texas Intermediate August future on the NYMEX breaches the first resistance level at $106.58, it probably will continue up to test $107.12. Should the second key resistance be broken, the US benchmark will most likely attempt to advance to $107.79.

    If the contract manages to breach the first key support at $105.37, it will probably continue to drop and test $104.70. With this second key support broken, the movement to the downside will probably continue to $104.17.

    Meanwhile, August Brent on the ICE will see its first resistance level at $115.01. If breached, it will probably rise and probe $115.56. In case the second key resistance is broken, the European crude benchmark will probably attempt to advance to $116.29.

    If Brent manages to penetrate the first key support at $113.73, it will likely continue down to test $113.00. With the second support broken, downside movement may extend to $112.45 per barrel.

    In other words, the WSJ started (or perpetuated) a false rumor that spiked oil last night and API inventories showed big net builds that do nothing to support higher oil prices.  

  158. Dick Cheney is clearly unfazed that he and his unindicted coconspirator, George The Brain Dead, were responsible for the deaths of 4,500 American and at least 500,000 Iraqis.Cheney/Shadow – I can't believe that guy has the balls to show himself anywhere.  They started a war under false pretenses and thousands of American Troops lost their lives for no reason (not to mention hundreds of thousands of Iraqis) but there are no repercussions – that amazes me.  I guess one day it will be a joke people laugh about – like when Steve Colbert mentioned no US President visited more Indian Reservations than Andrew Jackson (because he was killing them all).  Tee hee, ha ha, aren't we naughty for all that genocide…  From the NY Daily News:

    It’s particularly interesting that Dickie’s Op-Ed appeared in the bible of finance, and yet there was no mention of the financial burden his 12-year war has put upon us taxpaying slobs.

    Estimates go as high as $6 trillion, even though the Bush administration had predicted the whole thing would cost between $100 and $200 billion, done, finished, the end.

    That bit of over-budgeting comes to about $75,000 for every U.S. household.

    Dick, formerly the CEO of Halliburton, also forgot to mention that a Halliburton subsidiary, KBR, reaped $39.5 billion from the war, according to the Financial Times.

    In the Op-Ed, Cheney scoffs at the naiveté of President Obama for claiming in 2011, “The tide of war is receding.”

    Apparently Dickie forgot about his boss’ famous “Mission Accomplished” speech just weeks after invading Iraq in 2003.

    Cheney even criticized President Obama for taking a day off, saying, “Terrorists take control of more territory and resources than ever before in history, and (Obama) goes golfing.”

    Meantime, No. 43 spent more than one year of his presidency at his ranch, often shooting doves (tragic irony noted).

    But of all the lies in Cheney’s disgusting Op-Ed none is as insulting to the American people as this one: “Rarely has a U.S. President been so wrong about so much at the expense of so many.”

    This from the man who helped usher in one of the longest wars in U.S. history, based on the bald-faced lie that Saddam Hussein was stockpiling weapons of mass destruction to destroy the United States.

    Cheney should return to shooting just his friends in the heart, because the rest of us are already heartbroken by what he did.

    Florida/Burr – I have the same question as Shadow, is that a big out of town tourist place?  You guys are south of Daytona, right?   

    Vacations/Gerry – I think there's a difference between top 10% vacation spots and bottom 90% spots – something worth paying attention to.  Meanwhile, the airlines have a lot of traffic, someone must be going somewhere.  

    Pasting/Shadow – Try using the word box.  If your source picks up bad code when you copy it, or is copy-protected, that can be the problem. 

    Butterflies/Akad – I don't hate talking about them, I just get annoyed when there are dozens of questions about them when the main point I'm trying to teach people is just to leave them alone and let the premium decay do its work.  We did DIS as an example of another way to do the Butterfly, that's all.  It's not my favorite way but it's good for IRAs that can't have uncovered sales.  In fact, I think that we did it in response to someone asking.  

    On DIS, the longs are the 2016 $55 calls at $23.32 and $95 puts at $23.59 – so that's net $46.91 on the $40 spread, which means our premium is $6.91 and there is NO POSSIBLE WAY we don't get $40 back on the spread.  That way, both the calls and the puts are "covered" and won't be rejected in most restricted accounts and now all we have to do is make sure we collect more than $6.91 in premium over 22 months.  At the moment, we sold July $82.50 calls and $80 puts for $4.35 and originally we sold March $75 puts and calls for $4.60 and the puts expired worthless but the calls were $5.20 (-.60) and then we sold April $77.50 calls for $3.60 and $80 puts for $1.67 and we closed them for $2.60 (+$2.07) and then we sold May $77.50 puts for $1 and $80 calls for $2.15 and those both closed out of the money (+$5.22) and now we sold the July $80 puts for $2.40 and the $82.50 calls for $1.95 so, in 4 months so far, we made $5.22 in exchange for tying up $46.91 (11%) BUT only $6.91 of that money is at risk – and that's an important calculation because there's no need to hedge this position at all.  

    When you consider that this is a ridiculously low VIX environment, you can imagine how much money we could be making in a more exciting market but we're on a pace to return 30% on capital without risking the bulk of the capital – there's certainly a value in learning those types of plays!  

    Butterflies with longs at the money is another way to go and also good for a low VIX environment BUT, what happens when you buy, for example, the CAT 2016 $105 puts and calls for $22.50?  Then you are the sucker that has paid the most premium right away.  You can then sell the July $105 puts and calls for $4.30 but what happens if CAT pops 10%?  Then you owe back $10 to the short position and you are still net $22.50 on your longs and you sell $4 of August premium but then, if you get burned again, your goal gets further and further away.  

    None of these strategies are foolproof but starting out by paying 5.5x more premium than your short sales isn't a good start! 

    Candles/Jbur – Actually I have the different times there because, when I'm scanning, I put a different contract where the time is, rather than change the time on the contracts (just easier for my taste).  Also, sometimes I look at the same contract with different views.   For futures trading, the 5-min chart rules but it is a good idea to check longer-term trends to confirm a line you THINK you see (the tea leaves problem).  If I see the same line on 5, 10, 15, 30, 60 and daily – I'll probably take it seriously!  

    Carefully is a very good way to start in the Futures. 

    Speaking of which, oil fell 0.10 but now is back over $106.25 so no more play until we either test $106.50 or fail $106.25 again.  Europe is down half a point with weak bounces off the lows so far.  Brent is $113.78, which is up from $113.60 before but we fell from $114.80 to $113.60 so $1.20 means .24 and .48 are our bounce lines at $113.84 and $114.08 and look how neatly we were rejected at $113.84:

    When we see the 5% Rule being obeyed that closely, it's a good sign because it means the bots are in charge and we can rely on our levels.  Also note that 113.84 was sort of the floor on yesterday's pullback.  In the bigger picture (and this is why we use multiple time-frames), we had a run from $107 to $115 (not counting spikes), which is $8 and that means we expect a $1.60 weak retracement to $113.40 and PRESTO!, there is was ($113.60 is close enough – it's not an exact science and currency fluctuations affect the chart while you are looking).  

    So, if Brent makes it back over the strong intraday bounce line ($114.08) it's back on a bullish track because, on the daily chart, it never failed a weak retrace of the primary rally.  

    We'll keep tabs on it during the day and see how things go.

    Theremin/Yo – I don't know how we can compete against countries that are that organized!  You can't even get 200 Americans to show up wearing the same outfit (someone always has to accessorize to stand out).  As to "news" – it's always something and I was pointing out that the same news happened over the weekend (there's a war going on, you know) and got no reaction so ascribing that particular cause to this particular effect seemed a bit disingenuous.

    “Man is so intelligent that he feels impelled to invent theories to account for what happens in the world. Unfortunately, he is not quite intelligent enough, in most cases, to find correct explanations. So that when he acts on his theories, he behaves very often like a lunatic.”  ? Aldous Huxley

    VIV/Scott – Options are very thinly traded on them but they are at an interesting price and testing the 200 dma at $19.50.  You can sell Feb $17.50 puts for $1 and the $17.50 calls for $2.75 against the $19.95 stock for a net $16.20/16.85 entry which makes the $1.55 dividend 9.5%, which is good but not great and I wouldn't put them in the Income Portfolio because then I would have to go out of my way to check on Telefonica every day (since I can't be sure news that affects them would make the WSJ or Bloomberg and certainly not on CNBC) and my net expected 18 month return of $3.50 (called away at $17 + dividends) is only 21% and last September they only paid 0.08 – so the dividend is not steady and has, in fact, been reduced by almost 50% this year, which is why the stock is "cheap" in the first place.  

    I'm not saying it's a bad play – just that I'm sure we can do better.  

    Millennials/Shadow – That's interesting.  I think the car thing is an affordability issue – not that they don't like them.  Lack of jobs (50% youth unemployment) and high gas prices and parents on tight budgets are not a recipe for young people to hit the open road.  Of course, the bad news for autos and energy is the kids end up training themselves not to use cars – so they don't.  My Dad grew up in London and never drove a car until he came to America and, living in Queens, he never used the car he had.  I met my cousin in Princeton last month (also from England) and she came down from Newark by train and she said she'd come up for the weekend and told me to pick her up at the train station near me.  I didn't even know the train ran on the weekend and she knew the schedule!  That's the difference, she's "trained" to use public transport, has put in her 10,000 hours (she's my age) and is an expert at using it and prefers it to driving.  That's what's going on with millennials – we're creating different habits due to circumstances, but the repercussions will be long-lasting.  

    Cheney/Shadow – That's the continuation of the clip I posted earlier.  

  159. Butterflies/Jet – They are just different "flavors" using the same concept.  As to what stocks to pick – I look for stocks where the implied volatility of the front-month options (the ones we are going to sell) seems higher than the likely path I expect the stock to follow.  Then I have to see if I can get reasonable prices for a long position (paying as little premium as possible but still protecting the short position) and yes, it gets very tricky when things take off on you but DIS, as noted above, shot up from mid $70s, when we entered to mid $80s in short order and we rode that out just fine. 

    20% moves, we are prepared to deal with, over that gets tricky.  Oh, that's another criteria – stay away from stocks that may go BK or may get bought – or any stock that's likely to move more than 10% in a month!  CZR is a little iffy in that regard but, because of the split, I figure they bought themselves a couple of years, at least.  

    We added CZR on 3/31 because the drop to $19 was so compelling and the front-month premiums were so juicy.  We've already collected more than we paid for the longs, so we went conservative and sold $5.80 worth of September puts and calls and our put spread is only $5 so, even forgetting that we can roll the loser, we can't not make 0.80 (minimum) – even if we have to close it, so there was no point in killing the position but we're basically just lucky they haven't done something bad to us so far (they almost did in May).  

    And what Eric said!  Way to keep track, Eric.  yes

    I like that one Scott.  That's the only thing I know how to play on a guitar.  

    Exposure/Brit – That's why we did it with DIS!  Too big to get bought, too good to go BK so VERY unlikely to pop the channel but still had good front-month premiums to sell.  The backstop is nothing more than a vehicle to satisfy crappy broker requirements – I'd be just as happy naked selling the DIS puts and calls.

    House/Jomp – If you are going to use it, then yes.  If you think it's an investment – that's a bit tough.  When rates do go up, the homes will become less affordable and may still correct down 20% but, LONG-TERM, inflation should take its toll and, eventually, we should get another round of massive home price increases, probably double within 10 years at least.  So, if you are buying it for you and don't mind riding out a dip, absolutely.  If you are investing and the rent covers the house – why not?  But, if you are buying a house and thinking you will flip it in a year or two – I wouldn't count on it.  

    I like that plan, Advill.  

  160. From Bloomberg, Jun 25, 2014, 5:00:05 AM

    European stocks fell for a fourth
    day, the longest stretch in seven weeks, as violence in the
    Middle East escalated. U.S. index futures were little changed,
    while Asian shares declined.

    To read the entire article, go to

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  161. From Bloomberg, Jun 25, 2014, 3:54:43 AM

    June 24 (Bloomberg) — White House Press Secretary Josh Earnest speaks about President Barack Obama’s telephone call to U.K. Prime Minister David Cameron about the situation in Ukraine and Iraq.
    Earnest, speaking at the daily news briefing in Washington, also discusses carbon emission regulation and the outlook for reauthorization of the U.S. Export-Import Bank. (Source: Bloomberg)

    The U.S. is preparing sanctions
    aimed at specific areas of the Russian economy, including energy
    and technology, as the Obama administration readies the next
    steps to pressure Russia over the Ukraine crisis, according to
    three people briefed on the plans.

    To read the entire article, go to

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  162. From Bloomberg, Jun 25, 2014, 2:42:20 AM

    Companies are debuting a record
    amount of bonds in Europe as investors demanding higher yields
    show greater tolerance for untested borrowers who are seeking to
    diversify funding as banks curtail lending.

    To read the entire article, go to

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  163. From Bloomberg, Jun 25, 2014, 3:27:33 AM

    June 24 (Bloomberg) — Bloomberg’s Alix Steel and Ryan Chilcote examine the latest on Ukraine as Russian President Valdimir Putin calls for an end to the right to use force in Ukraine and rebels in the country match the cease-fire called by the Ukrainian government. They speak in today’s “Global Outlook” on “In the Loop.”

    Ukrainian President Petro Poroshenko called for immediate talks with leaders in Russia, Germany and France after pro-Russian rebels shot down a government helicopter in violation of a cease-fire.

    To read the entire article, go to

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  164. From Bloomberg, Jun 25, 2014, 2:37:54 AM

    U.S. Senator Thad Cochran. Photographer: Justin Sullivan/Getty Images

    The Tea Party went all in for a U.S. Senate seat in Mississippi and got beaten by a six-term incumbent who represents much of what it despises.

    To read the entire article, go to

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  165. From Bloomberg, Jun 24, 2014, 6:01:00 PM

    Norges Bank Investment Management Chief Executive Officer Yngve Slyngstad said, in Africa and the Middle East there “are quite a few countries where we’re not invested.” Source: Norges Bank via Bloomberg

    Norway’s $890 billion sovereign wealth fund, the world’s biggest, is building up its organization and preparing for a move into infrastructure and private equity, its chief executive officer said.

    To read the entire article, go to

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  166. From Bloomberg, Jun 25, 2014, 12:00:35 AM

    Penetration of Polish TV, broadband and telephone packages is 28 percent compared with 49 percent in Germany and 64 percent in the Netherlands, according to Cyfrowy. Photographer: John Guillemin/Bloomberg

    Tweeting, Facebooking, Skyping
    smartphone users are costing U.S. states and cities revenue as
    taxes rooted in old-fashioned telephone service fail to keep up
    with the Internet era.

    To read the entire article, go to

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  167. From Bloomberg, Jun 24, 2014, 7:01:00 PM

    While Shire’s Chief Executive Officer Flemming Ornskov has said AbbVie’s offer undervalues the company, he also has said he isn’t fundamentally opposed to a buyout if it adequately compensates Shire’s shareholders. Photographer: Chris Ratcliffe/Bloomberg

    AbbVie Inc. (ABBV), which was rejected on
    three different takeover offers for Shire Plc (SHP), may have to raise
    its bid to about 30 billion pounds ($51 billion) to persuade the
    drugmaker’s board to sell.

    To read the entire article, go to

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  168. From Bloomberg, Jun 25, 2014, 2:57:33 AM

    Most bankruptcies are linked to the property crash. Photographer: Simon Dawson/Bloomberg

    On a balmy June evening in Dublin,
    with pubs overflowing, Brodrick O’Neill is inside the Ashling
    Hotel learning how to declare personal bankruptcy.

    To read the entire article, go to

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  169. From Bloomberg, Jun 25, 2014, 12:01:00 AM

    Vladimir Putin, Russia’s president, attends a wreath laying ceremony at the Tomb of Unknown Soldier to mark 73rd anniversary of Nazi invasion of USSR outside Moscow’s Kremlin Wall in Moscow, on June 22, 2014. Stocks have rallied as Putin signaled that he’s willing to work with Ukraine’s new leader. Photographer: Sasha Mordovets/Getty Images

    To see why U.S. economic sanctions against Russia are likely to have limited impact, follow the spending of a small Delaware-incorporated, Nasdaq-traded television company named CTC Media Inc. (CTCM)

    To read the entire article, go to

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  170. From Bloomberg, Jun 25, 2014, 4:53:01 AM

    June 25 (Bloomberg) — Steve Brice, Singapore-based chief investment strategist at Standard Chartered Plc, talks about global stocks.
    Brice also talks about the U.S. economy and Federal Reserve policy. He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Stocks fell in Europe and Asia, U.K.
    bonds advanced and corporate bond risk increased. Shares in
    Dubai rose after a three-day rout while Russia’s ruble and
    Indonesia’s rupiah led emerging-market currencies lower.

    To read the entire article, go to

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  171. From Bloomberg, Jun 25, 2014, 12:01:00 AM

    A Tesla Motors Inc. Model S connected to a charger sits on display at the company’s store at the Short Hills Mall in Short Hills, New Jersey, U.S. Photographer: Emile Wamsteker/Bloomberg

    After Elon Musk let filmmaker Jon Favreau use his rocket factory to shoot some scenes for “Iron Man 2,” Favreau figured he owed his friend a favor. So he bought one of Musk’s cars.

    To read the entire article, go to

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  172. From Bloomberg, Jun 25, 2014, 2:45:26 AM

    Toyota Motor Corp.’s new hydrogen fuel-cell vehicle (FCV). Source: Toyota Motor Corp. via Bloomberg

    Toyota Motor Corp. (7203)’s vision of a
    hydrogen future will begin with a $69,000 car.

    To read the entire article, go to

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  173. Watch this video at

    Traders Tune Out Markets, Tune In World Cup

    June 24: Bloomberg’s Eric Chemi and Greg Rayburn, managing partner at Kobi Partners, look at how volume drops in global markets during World Cup games and allegations of bribery and corruption surrounding FIFA.

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  174. Watch this video at

    Insurgents’ Impact on Iraq Oil `Overhyped’: Larry

    June 25 (Bloomberg) — Carl Larry, president of Oil Outlooks & Opinions LLC in Houston, talks about the escalating conflict in Iraq and its implications for oil prices.
    He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

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  175. From Bloomberg, Jun 24, 2014, 11:03:19 PM

    May 22 (Bloomberg) — Marc Faber, publisher of the Gloom, Boom & Doom report, and Ian Bremmer, president of Eurasia Group, talk about U.S. initial public offerings by Chinese companies, the economy of China, the outlook for U.S. stocks and bonds, and investment strategy.
    They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    China’s chief auditor said growth in local government debt slowed, a sign that tighter scrutiny on borrowing and an economic slowdown have curbed credit.

    To read the entire article, go to

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  176. From Bloomberg, Jun 25, 2014, 1:57:40 AM

    U.S. inflation expectations over
    five years touched the highest in 13 months before data tomorrow
    economists forecast will show the Federal Reserve’s preferred
    measure of price gains rose to the most since October 2012.

    To read the entire article, go to

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  177. From Bloomberg, Jun 25, 2014, 3:30:53 AM

    The French economy will expand less
    than President Francois Hollande’s government expects this year
    and unemployment will climb as consumer spending and exports
    fail to accelerate, the national statistics office predicted.

    To read the entire article, go to

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  178. From Bloomberg, Jun 25, 2014, 2:57:30 AM

    Wildlife Works Carbon LLC, a U.S.-
    based business selling carbon credits in the voluntary market
    generated by forest conservation, plans to expand fivefold the
    biodiversity-rich areas it protects in Kenya.

    To read the entire article, go to

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  179. From Bloomberg, Jun 25, 2014, 2:17:21 AM

    June 24 (Bloomberg) — Japanese Prime Minister Shinzo Abe says his ruling party will seek to pass a law in the next session of parliament in autumn to legalize casinos as part of a plan to boost tourism.
    Abe spoke in an interview with Bloomberg News today at his official residence in Tokyo. (This is a translated excerpt. Source: Bloomberg)

    Prime Minister Shinzo Abe said the deflation that wiped out much of Japan’s growth the past 15 years and so stunted the economy that it slipped to No. 3 behind China, has ended and will be thwarted by new government policies designed to encourage business expansion.

    To read the entire article, go to

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  180. From Bloomberg, Jun 25, 2014, 1:28:17 AM

    An elderly couple walk down the street in Melbourne. When the nation introduced the retirement pension in 1909 for men of ages 65 and over, their life expectancy was 55.2 years. Now it’s 80.6 years, with women expected to live an extra four years. Photographer: Scott Barbour/Getty Images

    Australian Treasurer Joe Hockey wants to raise the nation’s retirement age to 70, the highest in the world, to prevent an aging population from draining state coffers. Miner Noel Chatterton laughs at the idea.

    To read the entire article, go to

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  181. From Bloomberg, Jun 24, 2014, 5:17:18 PM

    Wanna buy some bonds?

    This Chris Christie securities fraud investigation is pretty strange. The story, from the New York Times, seems to be that Governor Christie’s administration wanted the Port Authority of New York and New Jersey to pay for some repairs to the Pulaski Skyway, which is a road in New Jersey and not, you know, a port. The Port Authority’s lawyers said no: “The Pulaski Skyway, they noted, is owned and operated by the state, putting it outside the agency’s purview.” Christie’s administration convinced the Port Authority to do it anyway; apparently persuading people to do things they don’t want to do is a hallmark of the Christie style.

    To read the entire article, go to

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  182. From Bloomberg, Jun 24, 2014, 3:33:35 PM

    About those dollars . . . . 

    It’s not the projected size of the fine — $8 billion to $9 billion. It’s not even the demand to fire specific employees. No, as BNP Paribas prepares to settle claims by U.S. authorities that it has transacted some $30 billion worth of business in violation of U.S. international sanctions, the part of the settlement most likely to stick in Gallic throats (and cause a bit of choking elsewhere) is a ban on clearing dollar transactions.

    To read the entire article, go to

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  183. From Bloomberg, Jun 24, 2014, 1:49:11 PM

    That’s a lot of trash to get rid of.

    The moon in 2020 will be just as round as it is today, but if the geeks at the National Aeronautics and Space Administration have their way, it won’t orbit the Earth solo. The U.S. space agency is hoping to divert a small asteroid from elsewhere in the galactic neighborhood and robotically place it into orbit around the moon. With the rock in proximity to Earth — if a small asteroid can’t be found, NASA will hack off part of a larger one instead — NASA intends to land astronauts on it and take samples for further scientific study. NASA claims this Asteroid Redirect Mission will build technologies and capabilities that “will help astronauts reach Mars in the 2030s.”

    To read the entire article, go to

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  184. From Bloomberg, Jun 24, 2014, 6:02:42 PM

    Federal Reserve Bank of New York President William C. Dudley and his colleagues on the Federal Open Market Committee on June 18 trimmed bond buying by $10 billion for the fifth straight meeting, to $35 billion per month, while reiterating that they plan to keep the main rate close to zero for a “considerable time” after ending the purchases. Photographer: Scott Eells/Bloomberg

    Federal Reserve Bank of New York
    President William C. Dudley said investor expectations that the
    Fed may raise the main interest rate in mid-2015 may prove
    incorrect while appearing now to be “reasonable.”

    To read the entire article, go to

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  185. Thoughts on MCP for a new play?  You can sell the $2.50 2016 puts for $1.06, for a $1.44 entry (40% off).  Small position, just in case they go BK.  

  186. MCP/Palotay – The problem there is China controls the prices and, at the moment, they are producing more than the market needs, so prices are way down.   As I often point out, rare earths aren't actually rare – they are found everywhere, just in very small amounts, so a country like China, who have a lax attitude towards strip mining, has as much of the stuff as they wish to make.  The only reason MCP ever got hot was because China restricted rare earth exports in 2010 (to screw with Japan) for a while and spiked prices.  So I think MCP has a somewhat broken model AND I think they are planning a significant dilution to raise capital – I'd stay away or at least keep the speculation small. 

    Submitted on 2014/05/12 at 10:58 am

    MCP/Scott – China flooded the market and MCP ran into problems expanding their new mine.  That's the gist of it.   The real problem is they burned through all that cash and either have to borrow or dillute.  AFTER that, then I'd like getting in on them. 

  187. Florida Real estate , Thanks Advill and Phil

  188. Phil/ MCP

    Jack Lifton initiated the concept of  " US strategic rare metals consumption is in China hands", that made a few bankers. ( the only winners in all this story)  rich with the IPO  of an old mine of rare metals in California…end of the story.

  189. VXX – Closed out my 25P at close yesterday for 6.25 (bought 4.57)
    Still got a feeling we’ll get a small pullback, if we do will look to re-enter at lower prices.