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Monday Mayhem – FBI Busts 22 Penny Stock Scammers

Operation "Penny Pincher" nabbed 22 penny stock pumpers.

As I often point out to our Members, a stock doesn't have to be a penny to be a penny stock – any stock with a market cap under $100M is generally what we're talking about – regardless of the share price.  

That's because the stock can be easily influenced by exactly the kind of action the FBI proved is RAMPANT in this industry – a single trader can, for a fee, move money into the stock and send the prices skyrocketing – then press releases are put out to whip retail investors into a frenzy and they follow with their money and, usually, get burned.  

Of course, the same thing happens with mid-cap stocks as well and even large-caps – it's just that the people manipulating those stocks are generally better at covering their tracks!  22 is the number of people the FBI caught in the short period of time an operation like this can run before word gets out that their cover people are conducting a sting.  Imagine how many other must be out there!

Obviously the markets are manipulated.  We know CEOs and their Boards worry about the stock price – the minute they begin to worry about the stock price, manipulation is sure to follow.  That's the way the system is designed.  We have a Fed who worries about the price of the market and they manipulate it too!  It's our job simply to be aware of the manipulation and take it into account in our trading and investing decisions.  

Back on June 12th, I began a series of articles pointing out that oil and gasoline prices were being manipulated into the holiday weekend.  Oil shot up to $107.68 that day and stayed between $105 and $107.50 through June but the EXTREME lack of actual demand we warned you about.  This morning, oil is below $104 and up $3,500 per contract from a short at $107.50 – a trade idea we highlighted for our readers Friday morning, June 13th

You can subscribe to Philstockworld and get interesting trade ideas like that one, in your mailbox, at 8:30am most days (unless I'm late with my post).  Stuff that's featured in the morning post only requires a Report Membership to unlock.  

Our higher-level Members get access to other trades during our Live Daily Chat, like 20 SCO Oct $22/26 bull call spreads at $1.30 ($2,600) paired with 10 short Oct $24 puts at $1.25 ($1,250) for net $1,350 on the $8,000 spread.  The upside potential is $6,650 (492%) should SCO (an ultra-short on oil) be over $26 at the October close.  Already, as of Friday's close, SCO hit $25.37 and the spread is already at $2,750 – up 104% in just the first month which means it's "on track" to make the full 492% by October.  

As traders, we don't "care" if the market is manipulated – as long as we are able to understand HOW it's being manipulated so we can play along.  We teach our Members to "Be the House" and play along with these games – rather than be one of the suckers these scams are aimed at.  

Those who know me, know I do care – A LOT – about this stuff and we do what we can to make people aware of what's really going on in the market and we do what we can to make our legistlators aware of it too but, unfortunately, most of them are already aware – because they, like the people in the FBI sting, are willing participants in the problem.  

When people vote along party lines as their main criteria, then there's no penalty for being a crook in politics.  That's why politics is so crooked – it's not an issue that is likely to cost a Senator or Representative their seat – unless it's so blatant that it can't be ignored, and I'm sure you can think of some really blantant stuff that DIDN'T cost someone a seat.  

So we play the rigged markets because it's the only game in town.  Two weeks ago (June 23rd) we updated our Big Chart and the Nasdaq has already plowed through it's goal at 4,400 and LOOKS (which can be deceiving) like it may be on the way to 4,800 – re-testing those dot com highs! 

These are indeed exciting times to be in the market – there is mindless money to be made on the way up (and our Buy List has 29 names on it, 8 of which we've pulled the trigger on already for our Member Portfolios) and highly leveraged money to take advantage of on the way down as well.  

While we can't predict where exactly the music will stop – that's no reason not to enjoy the game – while it lasts…  

Meanwhile, we have a low-data week but we do have over $100Bn in bonds to sell, so a lot of Fed speak along with their minutes on Wednesday (2pm).   Earnings season officially kicks off tomorrow with AA reporting after the bell along with HTZ (of the ones I care about).  HELE and WDFC on Wednesday, FDO, PGR and PSMT on Thursday and Friday morning we get FAST, INFY and WFC and THEN (next week) earnings season really begins with C, BAC, INTC, CSX, BLK, MTG, PJC, TXT, GTXI, MTB, WHR, COF, GOOG & BK.  

I hope you had a good rest, now it's time to get back to work!  


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  1. Good Morning!

  2. Detroit Automakers Shorten And Eliminate Normal July Shutdowns Due To Surge In Sales.

    The Chicago Tribune (7/3, Snavely, Priddle) reports Detroit automakers are shortening or eliminating their traditional two-week summer shutdown at many of their US plants due to “brisk” sales of pickups and SUVs. Chrysler workers will be working for the next two weeks at four assembly plants, while Ford is idling four plants for only one week, and General Motors will keep one-third of its plants open.


  3. Major Earnings for the Upcoming Week:

    Monday:  N/A


    TuesdayAA, TCS, TZ


    Wednesday: NG, RT, SYRG


    Thursday: FDO, PGR


    Friday: FAST, INFY, WFC


    Economic Releases (7/7-7/11):


    11:30 am CT – TD Ameritrade IMX



    6:30 am CT – NFIB Small Business Optimism Index

    6:45 am CT – GS Store Sales

    9:00 am CT– JOLTS

    12:00 pm CT – Fed’s Lacker Speaks

    12:00 pm CT – 3-year Note Auction Results

    12:45 pm CT – Fed’s Kocherlakota Speaks



    6:00 am CT – MBA Purchase Applications

    9:30 am CT – Oil Inventories

    12:00 pm CT – 10-year Note Auction Results

    1:00 pm CT – FOMC Minutes



    7:30 am CT– Weekly Jobless Claims

    9:00 am CT– Wholesale Trade

    9:30 am CT – Natural Gas Inventories

    12:00 pm CT – 30-year Bond Auction Results

    12:15 pm CT – Fed’s George Speaks

    3:30 pm CT – Fed’s Fisher Speaks



    10:15 pm CT – Fed’s Plosser Speaks

    1:00 pm CT – Fed’s Evans Speaks

    1:00 pm CT – Treasury Budget

  4. GPRO has options listed!

  5. Oil Lines

    R3 – 104.54
    R2 – 104.33
    R1 – 104.05
    PP – 103.85
    S1 – 103.56
    S2 – 103.35
    S3 – 103.07

    Tight lines following a 1/2 on Friday!

  6. Monday’s economic calendar

    12:00 AM ET

  7. Goldman moves up forecast for first rate hike

    07:58 AM ET · SHY

    • The Fed will first boost the Fed Funds rate in Q3 2015 rather than 2016′s first quarter, says Goldman chief economist Jan Hatzius, his revised forecast coming after Thursday’s big jobs number, but noting “the cumulative changes in the job market, inflation, and financial conditions over the past few months.”
    • The new forecast is still a bit more dovish than market expectations for a rate hike by mid-year, but Hatzius notes a larger significance to his move: It’s the first time since the crisis he’s actually moved forward his expectations for rate hikes.

  8. US consumer spending declines in June

    08:31 AM ET

  9. Hong Kong outlook cut over rift with Beijing

    08:54 AM ET · EWH

    • We reduce Hong Kong to underweight on concerns about negative news flow,” says HSBC, worried the “Occupy Central” campaign will sour relations with China and hurt the economy.
    • The bank didn’t elaborate further (it expects to release further details later this week), but HSBC earned more than half of its pre-tax profit from China and Hong Kong last year, and has come under some criticism along with Standard Chartered for pulling advertisements from Apple Daily – a move the paper’s owned has said is politically motivated.

  10. Retail car sales in China rise 14%

    08:56 AM ET · GM

    • Retail automobile sales in China rose 14% to 1.47M units in June, according to fresh data from the Passenger Car Association.
    • Sales for the first six months of the year are up 11% to 9.09M.
    • Major automakers such as General Motors (GM), Volkswagen (VLKAY), and BMW (BAMXY) have been increasing their presence in smaller cities in China this year.

  11. New buyback plan for Bed Bath & Beyond

    08:46 AM ET · BBBY

    • Bed Bath & Beyond (BBBY) approves a new $2B share repurchase program on top of a plan which still has $861M remaining.
    • The company expects the new buyback plan to be completed during FY16.
    • BBBY +0.5% premarket

  12. Analysis: Online threats to clip Bed Bath & Beyond

    08:24 AM ET · BBBY

    • Bank of America downgrades Bed Bath & Beyond (BBBY) to an Underperform rating from Neutral.
    • Online competition could chip away at the retailer’s market share, warns BofA.
    • The investment firm drops its price target on the stock to $51.
    • BBBY -1.3% premarket

  13. Tesla Motors to investigate split-in-two Model S

    08:17 AM ET · TSLA

    • Shares of Tesla Motors (TSLA) are mildly lower as a story of a fiery crash of a stolen Model S in L.A. grabs some headlines.
    • After a high-speed chase, the Model S is reported to have split in two after impacting with a light pole.
    • The automaker says it will investigate the accident.
    • TSLA -0.8% premarket

  14. Hyundai under fire in home nation for fuel economy claims

    07:56 AM ET · HYMLF

    • Hyundai (HYMLF) has been sued by consumers in South Korea over inflating fuel economy ratings for its models in the nation.
    • The automaker faced a similar flap in the U.S. last year that led to a settlement with buyers that cost it hundreds of millions of dollars.

  15. Canaccord downgrades GT Advanced

    07:39 AM ET · GTAT

    • GT Advanced (GTAT) has been downgraded by Canaccord Genuity to a Hold rating from Buy. The target price for the stock is $20.
    • Last week, the company announced its new restructuring, eliminating approximately 70 jobs and recording $13.4M in charges ($1.8M cash).
    • GTAT -6.9% premarket

  16. IBM, Beijing partner to reduce city smog

    07:26 AM ET · IBM

    • IBM (IBM) will partner with Beijing – increasing the monitoring and forecasting capabilities of the Chinese capital to reduce its issues of severe smog. IBM aims to help the city through its collection of real-time emissions data and forecasting expertise, and to help it attain its 10-year Green Horizon initiative.
    • Beijing already has an alert system to predict heavy pollution days in advance, allowing it to shut schools and factories when needed, but residents say is not enough.

  17. Dish Network on watch as spectrum enthusiasm builds

    07:10 AM ET · DISH

    • Dish Network (DISH) is on watch after Barron’s indicates shares could jump 20% on optimism heading into the FCC wireless spectrum auction in November.
    • A bet on Dish is a bet on CEO Charlie Ergen who is a big proponent of the spectrum strategy. Ergen also holds a 51% stake in the company.

  18. Volkswagen to build two Chinese manufacturing facilities

    06:34 AM ET · VLKAY

    • Volkswagen (VLKAY) has announced its plan to build two new manufacturing facilities in China. VW will partner with the state-run FAW Group to spend a combined $2.7B on constructing the plants.
    • “With these investments, Volkswagen is clearly expressing its commitment to the Chinese market,” says VW President Jochem Heizmann.
    • The company reported an 18% increase in Chinese car sales between January and May, totaling 1.5M vehicle sales. With an additional €18.2B investment, VW intends to increase its annual production capacity in China to more than 4M cars by 2018.

  19. Daimler expecting Chinese sales to overtake rivals this year

    05:51 AM ET · DDAIF

    • Daimler (DDAIF) is expecting its Mercedes-Benz brand to outperform rivals Audi and BMW by number of cars sold in China this year. Luxury car demand in China is predicted to exceed the U.S. by 2020, and Daimler is determined to secure its market share.
    • The company presented a strategy last August that included plans to launch around 20 new or upgraded Mercedes-Benz models in China over two years. The tactic is estimated to increase Chinese sales by a third, to more than 300,000 cars a year by 2015.

  20. Italy again delays payment of commercial debt

    04:39 AM ET · EWI

    • Italian Economy Minister Pier Carlo Padoan says the country will not make its debt repayment to private sector suppliers until the end of the year. This marks the third time the payment was delayed in 2014.
    • The European Commission has already opened a formal infringement procedure against Italy for failing to abide by its Late Payments Directive. The law requires governments to reduce payment delays to no more than 60 days.
    • Italy currently owes approximately €75B ($102B) to private suppliers, and the suspended payments have triggered layoffs, factory closures and even bankruptcies.

  21. Archer Daniels Midland will buy Wild Flavors

    04:08 AM ET · ADM

    • Archer Daniels Midland (ADM) says it will buy Wild Flavors for €2.2B ($3B) in cash, and assume €100M of net debt.
    • The company expects to complete the deal by the end of the year, and will launch a new unit called Wild Flavors and Specialty Ingredients.
    • Previous coverage

  22. U.S. cautions China over tech trade agreement

    03:56 AM ET · XLK

    • The U.S. has warned China that treaties and other global negotiations could be in danger if negotiations fail regarding their high-tech product international trade agreement. The agreement includes an annual $2T in trade, and eliminates tariffs and other trade barriers on IT products.
    • China has recently excluded approximately 60 new product categories, including medical devices and next-generation silicon chips, from the trade agreement. American authorities are looking to use this week’s annual U.S.-China Strategic and Economic Dialogue to update the 1996 Information Technology Agreement.
    • U.S. officials warn that if an agreement is not reached, increased opposition will be taken in Congress toward other trade deals with China.

  23. Summer box office doldrums continue after weak holiday weekend

    07:41 AM ET · VIA

    • The summer box office stayed in a sluggish trend with a 4th of July weekend that failed to produce any fireworks.
    • The top 12 films for the weekend earned $118.5M, down 47% from last year when Despicable Me 2 and The Lone Ranger debuted.
    • Transformers: Age of Extinction led the box office rankings with a $36.4M haul for Paramount (VIA, VIAB), while Tammy opened to $32.9M over the five days for Warner Bros. (TWX).
    • The summer box office is now down nearly 20% Y/Y after the misfire during the crucial holiday weekend.
    • Related stocks: CKEC, CNK, RGC, MCS, RDI, AMC, IMAX, FOXA, SNE, CMCSA, LGF.

  24. Troubles hit Afghanistan’s election

    03:35 AM ET

    • Afghanistan’s election for a new leader to replace President Hamid Karzai, is spiraling out of control after candidate Abdullah Abdullah claimed rival Ashraf Ghani Ahmadzai of ballot-rigging. Abdullah warns he will reject the results, if he thinks they are plagued by fraud.
    • “There is no doubt that fraud has happened, massive fraud has happened,” says Abdullah. “After all suspicious areas are audited, we will accept the election results, but not before that.”
    • Western officials are desperate for the success of an election whose $129M cost they mostly funded, to leave Afghanistan with a democratic handover of power. NATO countries are also looking for the new presidency to permit a contingent of foreign troops to stay, which the current president has refused to allow.

  25. Samsung facing tough times

    02:59 AM ET · SSNLF

    • Samsung (SSNLF) is facing a tough time on all fronts, as competition from cheaper models and the launch of the iPhone 6, will likely cause profit to decline again this quarter. Chairman of the group, Lee Kun-hee, also suffered a heart attack in May, leaving the company without a leader and unclear succession.
    • According to a Thomson Reuters poll, the company is expected to say on Tuesday, that earnings fell 12.6% for the second-quarter. Previously, CFO Lee Sang-hoon announced that the company’s Q2 results “doesn’t look too good.”
    • As a result of this year’s 5% stock drop, Samsung says it will compensate investors by boosting dividends.

  26. Overseas

    06:00 AM ET

    • Japan -0.37%.
    • Hong Kong -0.02%.
    • China +0.03%.
    • India +0.53%.
    • London -0.16%.
    • Paris -0.39%.
    • Frankfurt -0.19%.

  27. Pro-Russian separatists planning final showdown in Donetsk

    02:08 AM ET · RSX

    • Separatist leaders are now saying the evacuation from Slovyansk, one of largest rebel strongholds in eastern Ukraine, was strategic. Following their retreat, pro-Russian rebels are gathering for a final showdown in Donetsk, the last major city they control.
    • Ukraine has now declared it plans to lay siege to Donetsk, a regional capital with one million residents.
    • “This is not a complete victory,” says President Poroshenko. “This is the beginning of a breakthrough in the fight against militants for the territorial integrity of Ukraine.”
    • Russia has still not openly intervened on behalf of the separatists, after the West called upon new sanctions against the country should it involve itself in the conflict.

  28. France not worried about additional U.S. bank probes

    Yesterday, 09:46 AM ET · SCGLF

    • France’s finance minister Michel Sapin states that he is not worried about additional U.S. probes on other French banks, following last week’s guilty plea by BNP Paribas for violating U.S. sanctions.
    • “I think the risk is rather being perceived by other very big European banks,” says Sapin.
    • According to U.S. sources, French banks Societe Generale (SCGLF) and Credit Agricole (CRARY) and Germany’s Deutsche Bank (DB) are also being investigated for having potentially violated U.S. sanctions.

  29. Ukrainian separatist strongholds begin to fall

    Yesterday, 08:53 AM ET

    • Slaviansk, one of largest rebel strongholds in eastern Ukraine, has been mostly recaptured by Ukrainian forces. Government troops outnumbered separatist forces about 50 to one, Reuters reports.
    • With a population of approximately 130k, Slaviansk became known as the “hotbed of resistance,” during the Ukraine crisis over the last several months.

  30. U.S. becomes world’s top oil producer, but July 4 gas prices at six-year high

    Sat, Jul 5 · UNG

    • The U.S. became the world’s largest natural gas producer four years ago, and now it is the world’s top producer of crude oil, surpassing all other countries with output exceeding 11M bbl/day in Q1, according to a new report issued today by Bank of America.
    • Partly as a result of the shale boom, West Texas futures are at a ~$7/bbl discount to their Brent European counterpart, but it hasn’t made the expected impact on pump prices: “Typically such a large energy supply growth should bring prices lower, but in fact we’re not seeing that because the whole geopolitical situation outside the U.S. is dreadful,” says BofA’s head of commodities research.
    • Drivers on the road for the Fourth of July weekend are facing the highest gasoline prices since 2008, despite the fact that U.S. oil production is its highest since 1986 and gasoline is well supplied across the country.

  31. Airbus trails Boeing deliveries, orders

    Fri, Jul 4 · EADSF

    • Airbus’ (EADSF) 303 aircraft deliveries for the first-half of 2014 trailed behind Boeing’s (BA) 342 for the same period.
    • Airbus’ orders also declined, after receiving 120 cancellations. The European plane-maker was left with 290 orders, compared with the 499 of rival Boeing.

  32. Mercedes-Benz sales skyrocket

    Fri, Jul 4 · DDAIF

    • Global Mercedes-Benz (DDAIF) sales climbed 13% in the first-half of 2014, due to high demand in China and other Asian markets. Sales in June were up 8% compared to a year earlier.
    • Strong growth in Asian markets led China to report a 38% increase for the first six months of the year, accounting for 17% of the company’s world-wide sales.
    • However, other markets attained more modest growth trends. Sales in the U.S. and Europe grew by approximately 7%, while Germany, Mercedes’ home market, fell flat in the first-half of 2014.

  33. European Commission demands Amazon’s tax records

    Fri, Jul 4 · AMZN

    • Officials are demanding Luxembourg transfer over Amazon’s (AMZN) tax records, following the European Commission’s investigation into corporate tax codes in Ireland, Luxembourg and the Netherlands.
    • The probe is examining the low tax rates global companies pay in the three countries, and will make known if their tax deals are allowed under EU law.

  34. Obama, Merkel threaten Russian sanctions

    Fri, Jul 4 · RSX

    • President Obama and German Chancellor Angela Merkel have threatened to increase Russian sanctions, if the country does not work to de-escalate the crisis in Ukraine. U.S. officials believe pro-Russian separatists are receiving a steady flow of weapons and fighters from Russia.
    • With the authorization from President Petro Poroshenko, Ukraine this week has been advancing on rebel strongholds along its eastern border.

  35. Daimler developing driverless technology

    Fri, Jul 4 · DDAIF

    • Daimler (DDAIF) is now rivaling Google, after unveiling a self-driving truck prototype, named Mercedes-Benz Future Truck 2025. Unlike Google’s pod-shaped, two-seat vehicle, Daimler is aiming its driverless technology at freight transport and the trucking industry.
    • The truck is intended to hit the market by 2025, although it will have to pass many regulatory and legal hurdles, and poses clashes with freight unions.
    • Regarding the level of supervision required for operating the vehicle, Daimler announced “its truck model still requires human oversight while freeing the driver to perform back-office tasks such as handling bookings and billing, or planning future itineraries.”

  36. AmEx to face antitrust lawsuit

    Fri, Jul 4 · AXP

    • AmEx (AXP) will go to trial Monday, facing an antitrust lawsuit from the U.S. government. The latter is claiming AmEx limits competition, hurting credit card providers that charge lower processing fees.
    • According to the government, American Express bans its millions of merchants from offering incentives for customers to use less-expensive credit cards or cash when making purchases. However, AmEx claims the rules guard customers from price discrimination and have assisted in promoting competition.

  37. U.S. grounds the F-35

    Fri, Jul 4 · LMT

    • The U.S. military has grounded its entire fleet of Lockheed Martin (LMT) F-35 fighter jets, until additional inspections are conducted on the warplane’s engine manufactured by Pratt & Whitney (UTX).
    • It was reported yesterday that U.S. and British authorities were looking into requiring mandatory inspections on the F-35, after an engine caught fire in Florida last week.

  38. Good morning!

    I hope everyone had a nice holiday – I had a great family weekend.  

    Germany had more manufacturing slowing in June (3 months in a row):

    German manufacturing grew at the slowest rate in eight months in June, a survey showed on Tuesday, adding to signs that the expansion in Europe's largest economy lost momentum in the second quarter.

    Markit's Purchasing Managers' Index (PMI) for the German manufacturing sector fell to 52.0 in June from 52.3 in May.

    Still, over 50 is expanding – just not as quickly.  Still worst since last year and last year we hit a bit of a summer slump, which is what we're expecting anyway – just another confirming signal. 

    /NQ follows $NDX, not $COMP so this chart is useful for us Futures Traders:


    $NDX is doing the 100% run from 2,000 to 4,000 and that means we expect pullbacks of 20% (of the run) to 3,600 and 40% at 3,200 and we can see very healthy consolidation at 3,600 on the way up (and only a minor pause at 3,200) – so it looks like that will be a solid line at 4,000.  

    Since we already had consolidation at 3,600, we can assume we won't get a violent pullback and 3,600 should hold so now we look at the range between 3,600 and 4,000, which is 400 points so 80 and 160-point retraces there mean we expect to see consolidation at 3,840 and 3,920.  Last week spurted us over 3,840 but, with volume coming back, we'll likely see that again before there's a proper attempt at 3,920.  

    So that makes /NQ a nice short below 3,910 (now 3,909) with a re-try at 3,920 with very tight stops.  Catching a 70-point dip would be very rewarding ($20 per point on /NQ) while the risk isn't so bad.  

    On QQQ, it's at $95.55 and the July $97 puts are only $1.59 so very little premium (.09) means you can play it as a proxy for the Futures.   Let's put 5 in the $25KP and 20 in the STP.

  39. Wow, AAPL jammed higher just now, that's a Nas booster at $94.50.  Should have waited for something like this – a spike up to shake out the shorts.  

    Thanks QC. 

    GPRO/Diamond – Too bad they fell from $50 already.  Some idiot paid $6 for the Oct $46 calls – I'd certainly sell those and then cover with something in Jan, like a $45/55 bull call spread at $3 but it would be a tough fill – just an idea.

  40. LQMT popping again – flew back to 0.27 (speaking of penny stocks).  

    Apple Keeps Liquidmetal iWatch Dream Alive With New Patent

  41. sorry to bother you with this phil but I haven't been able to locate link to last Tuesdays webcast

    was there one?


  42. Also, speaking of penny stocks – Sold a little more DRWI.  I keep selling, and it keeps rising.  Oh well, I guess there are worse things.

  43. IBM/Phil – I missed the IBM trade last week and have been looking at selling the 2016 160 puts and buying the 180/190 BCS (already $8 ITM) for a net $2.80 credit but since earnings are next week that's probably a bad idea right now. Maybe just sell the puts first for $7.80?

  44. AAPL $95 was $665 a couple of weeks ago.  See how much easier it is to jam a stock higher after it splits.  $100 ($700) will be tough to get over but, once that cracks, $800 ($114.28) won't seem like a big deal.  

    • Dow -0.29% to 17,018.50. S&P -0.24% to 1,980.70. Nasdaq -0.23% to 4,475.61.
    • Treasurys: 30-year +0.18%. 10-yr +0.04%. 5-yr +0.01%.
    • Commodities: Crude +0.05% to $103.83. Gold -0.39% to $1,316.20.
    • Currencies: Euro 0.% vs. dollar. Yen -0.2%. Pound +0.24%.
    • Dow -0.37%.
    • 10-yr +0.06%.
    • Euro +0.01% vs. dollar.
    • Crude -0.25% to $103.52.
    • Gold -0.61% to $1,313.20.

    McClellan Sounds "Alarm" Over Stock Market Drawdowns - The Nasdaq 100 Index is making new multi-year highs, levels not seen since the weeks just after the 2000 Internet Bubble top.  But it is interesting for us to see that the average component stock in that index is down 7% from its trailing 52-week high. 

    Chart In Focus

    Excluding Oil, The US Trade Deficit Has Never Been Worse

    Lagarde Signals Cut in Global Growth Forecast as Investment LagsInternational Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution’s global growth forecasts as investment remains weak. “The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment” spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France.

    ECB: We're aware of asset bubble riskEuropean Central Bank executive board member Benoit Coeure says the bank's current monetary policy of interest rates close to zero for a long period increases the risk of asset price bubbles. Mr. Coeure said the International Bank of Settlements is right to point at the risk that cheap money may generate exuberant rises in some asset prices in the euro zone posing a systemic crisis risk when eventually bursting.

    European Banks Are In Trouble

    Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market

    The Illusion Of Central Bank Control Is In Full Force

    Central Bank Smackdown - Mauldin

    Foodflation – Since QE3, Breakfast Is Up Over 24%

    "There Is No Honest Pricing Left" – The Epochal Error Of Modern Central Banking

    German Manufacturing Orders Decline on Geopolitical RisksGerman factory orders (GRIORTMM) fell more than economists expected in May as geopolitical risks weighed on confidence in the strength of Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, fell 1.7 percent from April, when they rose a revised 3.4 percent, the Economy Ministry in Berlin said today. Economists forecast a decline of 1.1 percent, according to the median of 30 estimates in a Bloomberg News survey. 

    Political Battle Over Export Bank Heats UpNew House Leadership, Conservative Groups Seek to Shut It Down. Lawmakers at a recent House hearing on the future of the Export-Import Bank were given an extra piece of reading material: a personalized index card laying out exactly which companies in their districts benefit from the financing agency and how many people they employ.

    Ocean acidification is rising at its fastest pace in 300 million years (BV)

  45. Webcast/Tommy – You know, I never saw it.  Maybe the Darwin girl was on vacation?   I just Emailed her so I'm sure we'll get it later. 

    DRWI/Albo – If we figure $1.40 was consolidation then 100% run to $2.80 and pullbacks of .28 ($2.52) and .56 ($2.24) would be expected – watch for those lines to hold on a pullback for possible re-entry.  50% line was $2.10 and you can see a slight pause there so looks like bullish consolidation.  

    IBM/Ivan – Sure because you can always get a spread, even if you have to move the bracket but this could be your last chance to sell those puts for a good price.

  46. Thanks, Phil.

  47. Getting ready for earnings – here is a list of the big movers. We'll be playing some of these:

  48. BCS/Phil – Thanks Phil, at what point would you add a BCS to a short put position that is up? BBBY for example…

  49. Tweet of the Week

    Jul 2, 2014 | 10:59 AM EDT

    The honor goes to Bill Gates.

    Speaking of China, the tweet of the week is from Bill Gates:



  50. /TF falling out of bed…..should have had the foresight to short at 1200….damn! 

  51. PHIL/FB

    I am short FB 62.50 Jul 18 puts in short term portfolio. Can roll to Jul 25 for 1.40 credit. Good idea?

  52. hey phil, hope you enjoyed a nice weekend with the family.. did u make it back to action park yet?  that video was hilarious!

    question for you about shorting nq below 3910 – nice call btw.. are you viewing it as a conviction short?  something you'd stay in overnight?

  53. BCS/Ivan – Well, it depends but look at IBM now at $188.  You can sell the 2016 $160 puts for $7.80 and if IBM goes down $20, they should be about $15 – the price of the $180 puts now.  As long as you REALLY want to buy IBM, that's not a big deal as the stock would be at $160 and you have committed to it at net $152.30 so, no big, fast profits but no reason to worry.  

    If IBM goes up $20, though, the puts drop to $3.60 (the price of the $140s) and now the $170/200 bull call spread you may have wanted to buy for net $15 when IBM was at $188 would be $21.50 (the price of the $150/180 spread) but, since IBM is already up $20 at $207, you can flip to the $190/210 spread at probably the same $15 when you already have a $4 profit in your pocket from the short put sale.  

    Looking down $20, the current $190/220 spread is $9.30 so, essentially, the spread loses $5.70 on the way down and gains $6.50 on the way up – very even risk/reward so no emergency to play them vs the puts, which drop $4.20 on a move up and would force you to sell a higher position, which puts you in a worse position going forward.  Keep in mind the main commitment here is the willingness to REALLY buy IBM for $160, if you bump that deal up to $180, you've cost yourself $20 per share on a long-term commitment, lost cushion, etc.  

    That's why we sell the puts first and worry about the spreads later!  

    Tweet/Rustle – You have to subscribe to Real Money Pro.  That is a good stat, though:

    Embedded image permalink

    Doesn't anyone worry the Earth will pick up a wobble with all those Gigatons over there?  cheeky

    /TF/Jasu – That's always a short!  Got 9 points off /NQ so far.  Good for $180 per contract.  Of course 3,900 should be bounce so be careful here.  

    16,900 should bounce on /YM too and 1,185 on /TF – if not, BIG TROUBLE!

    FB/Zten – Are you saying you want to roll back a week and get another $1.40 credit?  The reason you get another $1.40 is because FBs earnings are July 23rd, so you are turning your short puts into an earnings gamble which, of course, it way more volatile.  What you SHOULD do is be happy they July $62.50s dropped to .45 (they were .25 last week so already too greedy) and get out of a crazy MoMo stock where you only have a 5% stock move separating you from disaster. 

    Short-term short put (or call) selling is an incredibly dangerous game because you only get a small amount of money.  When you are playing a stock that has moved between $52 and $72 (40%) in the past 6 months and you are playing the middle of a 20% range ($62.50) - collecting .45 on the hopes the stock DOESN'T move more than $2.50 (4%) in the next 11 days is pretty friggin' risky, isn't it?  

    That is NOT being the house – at all.  

    Action park/Toe – No, Tina vetoed Action Park and rightly so as my daughter's friends were coming too.  It's one thing to risk my own kids breaking something, I couldn't do it with someone else's until I check out the new park for safety (relatively speaking), so we went to Great Adventure (SIX) instead.  What an incredible business that place is!  

    It was $40 to get in (season passes are $110) but, even if you have a season pass, tube rentals are another $10 a day, fast passes were $20 a day (not too popular) and there was no possible way not to spend $20 on food and drink per person so that's about $70 per day x 4,000 people at the water park is $280,000 and another $280,000 at the ride park is $560,000 per day and 100 days of summer is $56M x 18 parks = $9.5Bn, which squares with their $1.1Bn in revenues (so I was a little conservative) but to me, the Water Park is the way to go as you don't have to build and maintain all those machines and you get the same revenues.  

    As to /NQ – Well, I took the money and ran at 3,900 on the Futures, which is what I always do with Futures trades and then I look for a bounce and how strong the bounce is and then I'll look for other ways to play it.  On the QQQ, however, I let that one ride until I decide my target of 3,840 isn't going to happen.  

  54. Oops, I meant $950M on SIX, not $9.5Bn!  

  55. Hey all, got a day off from school so I figured I'd stop by. Quick question for Pharm if he's around…. Why is PLX getting killed? I see no news but positive outcomes for trials, etc. yet everyday it falls further and further… 

  56. Phil- this guy has called a hearing on earth becoming wobbly.. Lol. I remember when this came out, was praying it was a republican who said it!

  57. No one mentioned TSLA today – down 2.66% on the crash news:

    It's not just the stolen car (above) – it seems like there was another crash with a model S that didn't explode:

    A subsequent, deadly crash later the same day involving a Model S that rear-ended a Toyota Corolla in Palmdale, Calif., killing the Toyota's driver and two child passengers, also received extensive coverage.  

    Of course, car crashes happen all the time and more TSLA's mean more crashes and lithium batteries do, in fact blow up when catastrophically damaged and so do gas tanks BUT when a Tesla explodes – it's going to be news and the more Tesla's that go on the road, the more will be involved in crashes and the more negative publicity it will generate – another reason I think TSLA makes a good short at these levels.  Not that it's a long-term negative as it's just car stuff people will get used to (look at GMs great month last month!) but it is the kind of thing that keeps car stocks from sustaining ridiculous valuations.  NFLX isn't going to explode a TV set – it's very unlikely AMZN will cause any deaths next Q – TSLA has the potential to have a catastrophic event – that's why is shouldn't get the kind of premiums other MoMos get – no matter how great their growth path looks. 

    PLX/Jrom – I don't see anything.  

    Guam/Jrom – Can you believe that guy was a Judge?  Scary…

  58. Very weak bounces on indexes so far – all failing.  /NQ can be re-entered short below 3,900 with tight stops, still the best short until /YM fails 16,900. 

  59. Guam/Hank Johnson…..uh…Believe it or not that was him making a joke.  He has a very strange sense of humor.  Yes….Mr Johnson seems to like deadpan humor. Did you catch his speech about a world without balloons?

  60. Hank/cdtbud – thank you! I feel so much better he was just joking around. I mean, if they can't actually win our approval, our congress can at least provide comic relief, what? They must be the circus part…

  61. GM issue is the ignored air bag problem blamed on a switch. TSLA has a rear seat safety problem the first was shown in a test crash. If the driver in the stolen crash was wearing a seat belt he would have burned to death. My fear is kids in the back especially the third row.

  62. Johnson in 2010 expressed concern at a hearing that the planned military buildup on the island of Guam might force it to tip over. Johnson later said he was speaking metaphorically about the population increase's effect on infrastructure and the ecosystem.

    Sure you were, Mr. Johnson ! 8-)

  63. Johnson/Cdt – Joking?  That's really not a good time to be joking and, clearly, nobody got it.  I do feel better know that's a joke but the guy still concerns me.

    TSLA/Shadow – Do you mean in the SUV?  I don't think a model S had a 3rd row.  I haven't heard any negative safety issues re. the SUV – where did you hear this?  Do you have a link?

    Johnson/Albo – Watching it again, I could see where he might have thought that was a joke – kind of hard to imagine a rational person was not joking but I can see where people who already have their mind made up might be happier to characterize it that way than have any sort of open-minded attitude.  After all, why start now, right?  

    Here's snopes with a fair and balanced view on the subject.  

  64. Phil – Not a case of Democrat or Republican at all.  Watch the Guam video again and tell me that he doesn't sound like Bill Murray in Caddy Shack. :-)

  65. No way that was a joke. He couldn't even come up with the words width and length. 7 miles uh uh uh 12 miles uh uh uh. Don't know who is worse, him or the people who elected him

  66. Sold a few DSX Jan $10 puts.

  67. jromeha/Johnson  The people voted for him over Cynthia McKinney.  I'll take his bad jokes over her.

  68. I'm a democrat CTbud, I'm not just out to get him. That was no joke. And if he was trying to get metaphorical(which I don't believe), he's still a moron. But you're right, I like the way he votes. He's like the replacement dictator in Sacha baren cohen's movie "dictator"

  69. Interesting chart:

    greatest invetors ranked

    Note that the "World's Greatest Investors" only beat the S&P by 10-20%, with only a couple of short-term outliers.  That's compared to tens of thousands of investors who do not beat the S&P.  That is why this year we are stressing conservative strategies that make realistic returns over the long haul – THAT is the skill you need to perfect BEFORE you begin to gamble.  

    Even if you are 70 and don't expect to live more than 10-15 years, you're still going to be hard-pressed to make 30% and, of course, any failure that backfires and costs you 30% would be almost impossible to recover from.  Making 15-20% is very realistic and can be done consistently, that's about 12% better than the usual 8% the S&P generates and, while you will miss out on a 30% year using our LTP strategies – you also will miss out on those 20% drops.  

    While it's frustrating for short-term players to see some stocks gaining 50% while your portfolio is "only" up 20%, over the long haul – making 20% a year puts you in league with the best investors in the World.  Do that consistently and compounding interest takes care of the rest!

    LOL – it's scary what they know about people these days.  Turns out the average person only read 2.4% of Piketty's book.  It's funny because they also mention "Thinking Fast and Slow," which has been on the table by my couch for a month and I just can't get motivated to get through that one!  

    Johnson/Albo – He's from Georgia, that's how they talk down there.  In watching it again I think it's more the total lack of reaction he got from the General that changed the tone of his comment.  He was making a good point, putting that base in Guam was going to increase the population of the island by 25% and would have a tremendous (and not necessarily positive) impact on the 100,000 people who lived there.  If this were Star Trek, the Prime Directive would prevent the Government from interfering with a local culture like that but we are more like The Empire – we just take what we need and vilify those who stand against us.  

    Miles/Jrom – Well the context of the conversation was that the US base was going to cover 39,000 acres and nobody knows how to do that conversion – including the General, apparently.  Turns out the base is covering 29% of the Island's total land area at about 60 sq miles and that's the point Johnson was trying to get at.  The EPA said the proposed base would strain the island's water resources, overwhelm their sewage treatment and destroy the coral reefs so of course the character of anyone opposing the military takeover of Guam would be assassinated.  As it stands, the whole thing is on hold but I'm sure the navy will keep trying until they get it.  

    This is what Guam looks like already, they want to almost double the amount of land the bases occupy:

    • Coal stocks suffer a beating after Deutsche Bank downgrades Peabody Energy (BTU -3.3%) to Hold from Buy with a $19 price target, down from $23, to reflect lower realized coal prices (particularly metallurgical coal) and anticipated ongoing cost pressures in foreseeable future.
    • Consol Energy (CNX -1.7%) is the firm’s only Buy-rated coal stock because of the company’s “fast-growing natural gas business and solid financial position.”
    • Although the Deutsche team says its focus is shifting to more company specific stories from an emphasis on sector performance, other coal companies are sharply lower: ACI -4.3%, ANR-4.8%, YZC -1.3%, CLD -2.4%, WLT -3.6%, RNO -1.5%, WLB -2%.
    • "We believe GT can still hit the midpoint of its sales guidance of $600-$800M but believe our checks of a slower ramp in 2Q14 makes the high end more challenging," writes UBS' Stephen Chin while downgrading GT Advanced (GTAT -13%) to Neutral.
    • Chin is worried about the pace at which Apple-related sapphire output is growing, and has respectively cut his 2014 revenue and EPS forecasts by $100M and $0.05 to $700M and $0.12. Consensus is at $696.5M (+133% Y/Y) and $0.08.
    • Canaccord's Jonathan Dosheimer, who this morning cut GT to Hold, expresses skepticism the iPhone 6 will use sapphire cover glass in large volumes, and considers 2016 EPS upside unlikely unless sapphire cover glass is used across Apple's iPhone/iWatch lineups.
    • Dorsheimer's remarks follows a June report claiming only the 5.5" iPhone 6 will feature sapphire cover glass – the 4.7" model will use Gorilla Glass – and that the 5.5" model will be in short supply through year's end due to sapphire yield issues.
    • Sapphire wafer vendor Rubicon (RBCN -5.9%) is following GT lower on a weak day for tech. GT is still up 95% YTD.
    • A recent patent application (noticed last Thursday by AppleInsider) assigned to both Apple and Liquidmetal (LQMT +7.6%) covers the use of a "counter-gravity casting process" with a molten metal alloy.
    • Apple argues counter-gravity (vacuum-based) casting enables higher yields and simplified molding relative to a poured casting approach. The company has filed a number of Liquidmetal-related patent applications in recent years.
    • In May, Liquidmetal extended a patent exclusivity deal with Apple that covers consumer electronics products by a year.
    • Total (TOT -1.7%) CEO Christophe de Margerie said over the weekend that weak oil refining conditions weighed on the company's Q2 profit, as they did in Q1.
    • The CEO said TOT is working to make its refining business more efficient and more profitable by creating synergies with its petrochemicals business, but there are no plans to close or sell refineries.
    • de Margerie also said he would prefer that more euros were used in oil trading instead of dollars, after the U.S. Department of Justice recently imposed a ~$9B fine and a year-long ban on the dollar-clearing functions of French bank BNP Paribas – of which he is a board member – over violations of U.S. sanctions.
    • Another tough day for airline stocks as worries in the sector over business demand and capacity continue to crop up.
    • Delta roiled the sector last week with a cautious view on second-half profit.
    • The World Cup has put a bigger crimp in business travel to Latin America than expected, according to analysts.
    • Also in the news, both Delta and American Airlines say they will cut flights to Venezuela due to a dispute over cash trapped in the nation.
    • Decliners: Delta Air Lines (DAL) -3.0%, Republic Airways (RJET) -2.9%, American Airlines Group (AAL) -2.5%, United Continental (UAL) -2.0%, Hawaiian Holdings (HA) -1.9%.
    • Google (GOOG -0.2%) has set aside up to $500M to bring its Shopping Express local/same-day delivery service nationwide, re/code reports.
    • Google hasn't confirmed the number,  but is open about its willingness to spend heavily on Shopping Express. "You can very much expect that we are putting a lot of money into this" says exec Tom Fallows.
    • Last month, Google expanded Shopping Express' reach to include overnight delivery for the whole of Northern California. Fallows says Google hasn't settled on pricing for the service, but says a sub-$100/year price would be surprising.
    • Amazon (AMZN -1.2%) charges $299/year for its Prime Fresh same-day service (currently in 3 cities, includes groceries). It also offers standard Prime subs in 12 cities same-day delivery for some products for a $5.99 flat fee.
    • Whereas Google is relying on retail partners such as Target, Whole Foods, and Staples to handle warehousing – Google's trucks pick items up from stores for delivery – Amazon is opting for a go-it-alone approach that's initially more costly/time-consuming, but could also be more efficient over the long run.
    • Among Google's apparent goals: Boosting sales of product listing ads by (in Fallows' words) "closing the loop on locally available items," and obtaining data on consumer buying activity that could be later offered to marketers,
    • Google and Amazon already have a growing ad rivalry. Amazon, whose users are more likely to go directly to its site/apps to place an order (and thus bypass Google) than other online retailers, is stepping up its efforts to use its mountains of customer data to deliver targeted ads. Google, meanwhile, is expanding its arsenal of tools and services for e-commerce firms.
    • eBay, meanwhile, is backtracking on plans to aggressively expand its Now same-day service.
    • Petrobras' (PBR -0.4%) profit could be reduced by $15B between 2014 and 2018 if it had to suspend oil platform contracts with Holland's SBM Offshore (SBFFF), the company said in a Brazilian securities filing over the weekend.
    • The potential reduction in profit is based on an estimate of the amount of lost oil and natural gas output and additional spending needed if PBR had to stop using the floating oil production platforms leased from SBM.
    • SBM is the subject of investigations in Brazil, the Netherlands and the U.S. over the alleged payment of $250M in bribes in Africa and South America, including $139M allegedly paid in Brazil.
    • Movie theater stocks Regal Entertainment (RGC -1.1%), Carmike Cinemas (CKEC -0.6%), and Cinemark Holdings (CNK -3%) trade lower after a weak 4th of July weekend keeps movie chains under pressure to meet Q3 projections.
    • IMAX (IMAX -0.6%) and RealD (RLD -2.9%) are also lower off the lackluster box office news.

  70. Books/Phil – I don't know if I read "Thinking Fast and Slow" further than you, but I gave it the boot less the halfway through – don't waste your time, go read Kim Stanley Robinson or Barry Eisler.

  71. Bases might have a certain amount of acreage, but that doesn't mean everything is bulldozed and paved. A lot of the time things are left as is with a big fence around it. Leaving trees and bushes create a nice buffer zone and prevents some prying eyes. Yes, adding xxx number of marines will strain the environment but it will happen. Okinawans hate the marines and want them to leave. Further, the "pacific shift" will be a theme over the next two decades so our presence there will be beefed up. 

  72. And it is the politicians as much as military pushing for the base…. You just have to say CHINA!! I guess we'll agree to disagree about that man's intelligence. 

  73. RUT down 1.5% and other indexes only down 0.25% – interesting.  

    Gotta watch that 11,000 line on NYSE for big daddy confirmation.  

    Fast/Snow – I think it's a bad habit I got into from college philosophy but I do tend to force myself to read books until the bitter end.  Of course, back then at least you were sure your teacher had actually read the book – these days, apparently, people who finish a book are few and far between.  Gives me an idea though – apparently I just have to come up with 50 good pages and the rest can be jibber-jabber and no one will notice!  

    Marines/Jrom – It's the Okinawans causing the problem, the Guam base is the relocation spot.  I agree and Johnson said as much in that video – there simply isn't anywhere else for them to go in that region and we MUST put those troops somewhere.  Maybe we could make a deal for one of China's empty cities?  wink

  74. Stopped out Hov. Glad that I initiated a small position as I sensed the exciments from the crowd…

  75. Jibber-jabber/Phil. Here ya go:

  76. HOV/Invest – Well, as soon as $5 went it became shakey to $4.50. 

    There goes 3,900 again on /NQ.  /TF failing at 1,185 now.  

    ROFL Snow!  We must set up a web-site full of this stuff – I bet it gets a million hits!

  77. By the way, everyone is wringing their hands over the movie box office but I think the movies just suck this year.  We looked for movies to see this weekend and there wasn't anything interesting – and that's with kids who were motivated to see something!  I don't remember another 4th of July weekend without at least one blockbuster movie to see. 

    Jobs/Albo – Well that does make sense.  The minimum wage means you are paying the least you can but it doesn't mean the job doesn't need doing.  Other than WMT or fast food places, most minimum wage people are just one or two very low-level positions in companies where others are higher paid, like janatorial staff, etc. Just because I have to start paying the night janitor $600 a week instead of $400, doesn't mean I'm going to do without him.  Even for MCD, we did the math and it adds about 2.5% to the cost of food if they want to keep it revenue neutral – and that was for going to $15!  

    I've said forever that raising the minimum wage is a net positive and, if this does spread, it's the one thing that will get me much more bullish on our economic future.  We're a consumer economy – give money to the consumers and the economy will grow – not complicated…

  78. Jobs / Phil and Albo – I find it incredible that facing these studies that show that raising minimum wage is not bad, raising taxes is not going to kill the economy, investing in infrastructure is not a bad thing that some people stick to their ideology and refuse to consider the facts… It seems that it's like a faith – you believe something, and no matter what science or studies show you, you won't budge in your belief. It's no way to govern a country.

  79. I'm with you guys on this issue, believe it not.

  80. BCS/Phil – thanks for the education! (as always). And thanks for the recent short idea on TNA, TZA, XRT, QQQ, SQQQ etc. Kept me almost flat for today!

  81. Webinar Replay Link HERE.  

    Studies/StJ – What I find incredible is that there needs to be a study to show those things!  We have ten thousand years of recorded history showing the value of the middle class, infrastructure spending and moderate taxation as well as ten thousand years showing what happens when there is income inequality, expensive wars and neglecting your own lands.  It especially drives me crazy when people who claim to read the bible act like they've never heard of any of these things….

    I believe you Albo, you're not entirely lost!  cheeky

    You're welcome Ivan – good to be well balanced, isn't it? 

  82. PLX/jro – I see no reason for it to fall.  Sell the news events?  Rebalancing?  IDK.  Just holding on with my fingernails…as it is my largest holding.

  83. Studies / Phil – Just like Pinketty's book, how many people started reading the Bible and never finished? 2.5%…

    Or only read what suits their ideology!

    One of these days someone will start a religion based on the things Jesus actually said in the Bible.

  84. PLX/Pharm - Good time for a new entry?  

  85. PLX/palotay – sure, sell some puts …Nov 3s….or buy a bit of stock and sell the  Nov 3 puts and 4 calls for a 1/2 entry.

  86. LOL StJeanLuc – I love the Tweets of God!  

  87. TastyTrade – good little video lesson on option trading traps:

  88. Phil
    Boy, when the market goes down, AAPL really takes off.

  89. Volume is actually pretty good today, 91M already on SPY (vs 50-60M last week).

    We've trended down all day but not too much damage and tomorrow we have Fed speak but the RUT has to be a bit discouraging for the bears.  

    Good tips Scott.  We should add links to these videos in the Wiki and our Education Section.  

  90. AAPL/DC – It's like a safety stock to MoMo players. 

  91. when is AA earnings tomorrow? any earnings play?

  92. SPY Volume? I'm seeing volume of 47.9 million at 3:55

  93. I'm seeing 49.2M on SPY.

  94. AA/Lunar – I prefer to wait until we have some earnings (more information) before placing bets.  AA should be doing well as they've scored some aircraft business as well as autos but that's already priced in at $15.  Now it's a question of how much they are benefiting but it won't likely show up in this report and that may lead to some disappointment so, if anything, I'd bet on a miss.  If I were to play it, I'd go for the Aug $14 puts at .25 and expect to lose half if wrong.  

    SPY/Eric – My bad, I must have been looking at the average volume!  

  95. Pharm- ditto. I see nothing, it's my largest holding and it's just been one steady drop…. Not complaining, just curious if you knew anything. Your picks have made me a lot of $$$ and I have faith this one will recover!

  96. jromeha – I don't believe in largest holdings anymore – I call those positions waiting to be rebalanced. Having large holdings has for the most part led me to mistakes, however selling premium, combined with balance, and patience, has been a good thing.

  97. Notice in that Tasty Trade video they are talking about SELLING options – Tom is very on board with my "Be the House" concept.  One of the things they warn against is selling weeklies that don't pay you enough premium – tempting but too dangerous!  

    Large holdings/Deano – Also something Tom discusses in that video – steady position sizing and diversification are very important. 

  98. School shootings – ok, something entirely different, but the topic has been discussed here. Interesting article on what you should teach your kids, and what schools could/should do..

  99. Phil,

    I think you'll like this, and others on the board as well.  Its kind of long so you might wish to skip the introductions and listen to the guest speaker.

  100. Here is the link

    Sorry about that.  This things got a hair trigger…

  101. I think we have reached reached some sort of transcendental peak in idiotic "investments" here as someone has started a Kickstarter to "Make Potato Salad" with an initial goal of $10 and managed to get 1834 backers with a current total of $23,501.00.

    No doubt mostly hipsters who thought how ironic this was and how cool it would be to brag to their friends about doing it.  It kind of makes me sad to think how much money people are willing to waste for pretty much nothing while people who are really in need get ignored.

  102. Russell took a beating today! Volumes still a bit light

  103. From Bloomberg, Jul 7, 2014, 5:20:48 PM

    Big winner. Not a big talker.

    Is Daniel Colman, poker’s new heavyweight champion, an adolescent narcissist, happy to take people’s money on the felt but unwilling to help improve poker’s image as a game of skill or a vehicle for philanthropy? Or is he an anti-huckster hero amid a swarm of endorsement-happy pros, greedy tournament presenters and the journalists who fawn over them?

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  104. From Bloomberg, Jul 7, 2014, 4:13:00 PM

    July 7 (Bloomberg) –- We’ve heard time and time again claims from Bill Ackman that Herbalife is a pyramid scheme, while the company and Carl Ichan say those claims are without merit. In March, the FTC opened an investigation and the Illinois Attorney General has been looking into complaints filed by a group of 13 Latinos who claim they were duped out of their life’s savings and Herbalife is to blame. Bloomberg has been looking into those claims to get a sense of what investigators have cut out for them. (Source: Bloomberg)

    Miguel Calderon is a retired construction worker with a sixth-grade education. He says an Herbalife Ltd. (HLF) distributor tricked him into squandering $30,000 in life savings on weight-loss shakes.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  105. From Bloomberg, Jul 7, 2014, 5:00:00 AM

    Everest College in Santa Ana, California on Nov. 13, 2012. Parent Corinthian Colleges, a for-profit education company, has more than a 100 campuses across the country, including Everest College. Photographer: H. Lorren Au Jr/The Orange County Register via Zuma Press

    For four years, the U.S. Education Department has threatened to rein in for-profit colleges and their soaring student debt. Now it has found a way.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  106. Apparently 10,000 hours is not the magic bullet:

    What's really surprising is how much it depends on the domain: 

    • In games, practice made for a 26% difference

    • In music, it was a 21% difference

    • In sports, an 18% difference

    • In education, a 4% difference

    • In professions, just a 1% difference

  107. Stj, I agree with that. Otherwise, there would be many Michael Jordan, Tiger Wood…. aptitudes play a huge part. I think 10,000 hrs does help players improve skills levels significantly if the players can train with the right meathologies and mentors that fit their styles. Othwise, the outcome could be the same orbnegative if the players keep training with the wrong routines. My 2 cents.

  108. Deano, I hear ya…. I don't really have time to do much wit.h my portfolio these days…shoot, I think I've only logged onto this site 3-4x since March. I thought PLX would be a safe, long term holding. Majority of my small portfolio are in this and FTR.  Definitely wish I would've hit up Marblehead one more time before I left!   I was packing and cleaning the rental house until the night we left though so didn't have a chance…. I'm really missing the opportunity to drive down to the cape on the weekends here in west Texas! Oh wells, I'll be moving to Hawaii in 3 months and I'll catch up on my beach time there! Lol

  109. jromeha – Hawaii? For how long? I might need to come visit!

  110. BTW jromeha – I still like PSEC for a nice stable divvy – its watching paint dry, but very consistent,

  111. From Bloomberg, Jul 8, 2014, 4:37:29 AM

    July 8 (Bloomberg) — Binay Chandgothia, a Hong Kong-based portfolio manager at Principal Global Investors, talks about Federal Reserve policy and its implications for global financial markets.
    He speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    European stocks fell for a third day
    as investors assessed equity valuations before earnings reports.
    U.S. stock futures and Asian shares were little changed.

    To read the entire article, go to

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  112. From Bloomberg, Jul 8, 2014, 4:04:46 AM

    July 8 (Bloomberg) — Jens Nordvig, global head of G-10 currency strategy at Nomura Holdings Inc., discusses central bank policy, volatility and China’s moderating accumulation of currency reserves.
    He talks with Ryan Chilcote and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    The European Central Bank’s
    unprecedented stimulus measures are starting to dim the euro’s
    allure among the keepers of foreign-exchange reserves.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  113. From Bloomberg, Jul 7, 2014, 7:01:00 PM

    The headquarters of the European Central Bank in Frankfurt, Germany. Photographer: Ralph Orlowski/Bloomberg

    Europe’s lenders are running out of time to get their books in order before the European Central Bank passes judgment on them.

    To read the entire article, go to

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  114. From Bloomberg, Jul 8, 2014, 3:41:08 AM

    Commerzbank had 934 million euros ($1.2 billion) in provisions for legal proceedings and recourse claims at the end of 2013, according to its annual report. Photographer: Ralph Orlowski/Bloomberg

    Commerzbank AG (CBK), Germany’s second-largest lender, will probably be the next bank to resolve
    alleged U.S. sanctions violations, a person with knowledge of
    the matter said.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  115. From Bloomberg, Jul 7, 2014, 6:12:35 AM

    Europe’s banks face a further $50
    billion of legal costs as they catch up with their U.S.
    counterparts, according to analysts at Morgan Stanley.

    To read the entire article, go to

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  116. Watch this video at

    Apple Hires Tag Heuer Exec in Race for Your Wrist

    July 7: IDC Executive Vice President and Chief Research Officer Crawford Del Prete and Bloomberg’s Adam Satariano discuss the smartphone wars and wearable devices.

    Sent from the Bloomberg iPad application. Download the free application at

  117. From Bloomberg, Jul 8, 2014, 12:01:00 AM

    Even as Ingersoll-Rand reaped the tax benefits of its foreign address, it took steps to expand its U.S. government business. In December 2007, two weeks before the first government-wide contracting ban took effect, Ingersoll-Rand agreed to buy Trane Inc. Photographer: Chris Maddaloni/Getty Images

    American manufacturer Ingersoll-Rand Co. (IR) forged the tools that carved the Panama Canal and shaped Mount Rushmore. When it shifted its legal address to Bermuda in 2001 to reduce taxes, the maneuver sparked bipartisan outrage in Congress.

    To read the entire article, go to

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  118. From Bloomberg, Jul 7, 2014, 10:17:30 PM

    A couple view a Model S sedan displayed in the Tesla showroom at Parkview Green Shopping Mall in Beijing. Source: ChinaFotoPress via Getty Images

    Tesla Motors Inc. (TSLA), the electric carmarker led by Elon Musk, was sued in China for trademark infringement in the latest example of the difficulties foreign companies face doing business in the country.

    To read the entire article, go to

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  119. From Bloomberg, Jul 8, 2014, 4:29:31 AM

    Brent crude fell below $110 a barrel,
    reversing a rally that started when Islamist militants seized
    the northern Iraqi city of Mosul almost a month ago. West Texas
    Intermediate also traded near a one-month low.

    To read the entire article, go to

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  120. From Bloomberg, Jul 8, 2014, 12:07:12 AM

    Subaru vehicles bound for shipment sit parked at a port in Kawasaki, Japan. Photographer: Kiyoshi Ota/Bloomberg

    Japan posted a fourth straight current-account surplus, as income from overseas investments masks the failure of the yen’s slide to boost exports.

    To read the entire article, go to

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  121. From Bloomberg, Jul 7, 2014, 2:13:40 PM

    Japanese exporters looking to boost
    shipments after the first monthly decline in more than a year
    can’t rely on a weaker yen for support, according to economists
    led by Mary Amiti of the Federal Reserve Bank of New York.

    To read the entire article, go to

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  122. From Bloomberg, Jul 7, 2014, 4:35:28 PM

    Fred Hochberg, chairman and president of the U.S. Export- Import Bank, is at the center of a fight picked by Republican leaders  in Congress.

    Kevin Drum makes a (mostly) good point about the big Export-Import Bank fight on Capitol Hill:

    To read the entire article, go to

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  123. From Bloomberg, Jul 7, 2014, 4:21:01 PM

    Can climate policy and conservatism work together?

    There’s a lot to like about Eli Lehrer’s argument for National Review that conservatives should stop downplaying global warming and instead try to take advantage of it. But beyond demonstrating the promise of that approach, he inadvertently shows how little it would accomplish, at least within the constraints of today’s conservatism.

    To read the entire article, go to

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  124. From Bloomberg, Jul 7, 2014, 2:46:57 PM

    But not Gary Cohn! Gary Cohn doesn’t chase league table credit.

    Let’s say you want to sell a lot of stock. I can offer you two ways to do that:

    To read the entire article, go to

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  125. Phil,

      I'm short the 2016 NFLX 450 call at $92. What adjustment would you recommend going into earnings? Protective BCS? Thanks

  126. Good morning! 

    Futures down just a bit.  Asia was mixed, with India down 2%, Japan down 0.42%, Singapore down 0.25% Hang Seng exactly flat and Shanghai up 0.2%.  Europe is down 0.4-1% into lunch.

    Simons/Sibe – He's one of the all-time greats and a fantastic guy, very active in NY charity scene. 

    Potato Salad/Kinki – That's hysterical.  I'm happy to pay $5 for a good laugh like that! 

    Big Chart – Let's keep in mind that the previous 3 sessions were not real.  Now we'll see what's up (or down).

    I love the poker guy.  He's a dick about it, but I appreciate someone speaking out against the BS system while winning at it.  

    10,000 hours/StJ – Gladwell's "rule" came mostly from observing people who actually succeed in various professions and finding out how they got to where they were and the common bond was PRACTICE.  People confuse "expert" with being the best – not the same at all.  Some people have natural abilities and some don't but almost anyone can become proficiently an "expert" with enough practice – otherwise how would you explain the entire working world and the basis of career paths.  Since the actual abstract of the Princeton study costs $35 and all I see quoted is the same free cut-out in many articles quoting it – I very much doubt anyone writing about it knows anything more than "Gladwell is wrong and I can write an article that gets a lot of hits saying so."

    Not only that, but the study is limited to "deliberate practice," which applies mostly to knowledge workers.

    In reality, do you actually believe that 10,000 hours of practice in education will only make you 4% better than someone who doesn't practice at all?  Only 21% in music.  I guess there's no point at all to practice – just go ahead and do stuff – it will all work out great!  That's a ridiculous and terrible message to send to people….

    Aptitude/Invest – Yes, we all can't be Michael Jordan and some of us shouldn't even be on the court but, if you WANT to play basketball at a competitive level – do you think the practice doesn't matter?  My daughter plays basketball and I suck at it but I put a hoop on the back porch and she shot balls all summer and fall and made the all-star team the next season.  

    And by the way, Michael Jordan is known for being the player that practiced more than any other player – and that's compared to pro players.  

    Attitude is just as important as practice, of course.  Saying practice doesn't matter is just a way for people who are unwilling to put in the time and effort to give themselves a pass.  You may be limited by your basic abilities to never be "the best" but think of all the generations of mechanics, doctors, lawyers, cobblers, roofers…  

    Family names used to be based on your profession and children knew their careers from the day they were born and, with practice, they were able to become proficient enough to earn a living and, in turn, teach their own children.  That's the way things work and that's why Gladwell's theory rings true – we all know, deep down inside that practice does indeed make perfect but, in this modern world that's full of distractions – who has the time?

    NFLX/Japar – If you don't have conviction on that one, why play it at all?  You can't have a time advantage so anything you buy will cost you more premium than you sold, which makes the covers essentially detrimental.  I guess you can sell the $350 puts for $36 and give yourself some wriggle room but you won't be please if NFLX drops 20% because you don't believe in them.  An Aug $470/500 bull call spread is $10 and that protects you from most of a 10% move against you and, hopefully, you can salvage $5 if it heads lower so that's insurance but the kind that will cost you $30 over the next 6 quarters even if it all works out, but that's what hedges do. 

  127. 10,000 / Phil


    Good morning, being back  after a few days off.


    Practice is experience?, can we  compare 10,000 with experience? those who are  sitting  a chair, with a sore ass, …or living a situation.. ( unique by experience), or playing a piano.


    Harvard case method try to generate a speed up "experience" process through "cases", that can not be the ´case´ of a pianist where 10,000 hours is THE difference ( agree with you, will not be genius)

    Trading;  10,000 hrs. allows to eliminate many mistakes that are painfull $$$ , that´s why we are with you here. but in many fundamental approach cases 10,000 don´t help.

  128. Good Morning! Phil I have a question about diversification after reading many comments lately about the dangers of not being diversified. I find that I have about 35% of my portfolios invested in APPL (both stock and options). This is not for lack of trying, but rather because this stock has been so successful for me over the last 4 years that the position keeps building and I  am reluctant to liquidate any of my position. I know that eventually I will probably get burned when they don't recover as they did in 2013. I held my positions through that downturn as I knew it was temporary, although my faith was tested and I did wish I had gotten out in the fall of 2012 when I saw the stock dropping. Of course I made the usual mistakes and thought each new bottom was the end of it, and I know I will make the same mistake again, so how do you exit a successful trade when you think it has more upside, just to diversify? I know I should have the discipline to do this, especially with earnings coming up when the stock can make big moves, but even if I do pull the trigger where do I reallocate and get a better company than Apple? Now may be the time, because I have found that when all the "experts" are saying one thing, do the opposite. When it hit $700 and all the smart guys said it was going to $1000, it went to $395. When they said it was going down to $250 from that $395, it went back up to where we are now. Unfortunately, they seem torn about it now and there is no consensus either way. So, I turn to my true expert, Phil for guidance.

  129. Practice/Advill – It always helps, the question is, how much?  I think there's also a factor of doing things you have a talent for – or at least a desire for.  Many people do things they don't like doing and no amount of practice is going to make you enjoy something and, without joy – how are you ever going to be great?  Things like that don't go on spreadsheets – but they matter.  

    AAPL/Craigs – Is it possible to lay out the position?  Please do so in the new post and I'll let you know what I think.

  130. Brazil V.S Germany in 15 mins.