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TGIF – Slip and Slide Week Comes to a Close

Wow, that was a close one!

We ALMOST had a correction but, fortunately, dip buyers prevailed and we pulled a sharp reversal right after the bell yesterday and finished the day only down about 0.4% and about 2.5% down for the week (so far).  

I do hate to be nit-picky about these things but – can we REALLY call it a reversal when, in fact, declining volume on the NYSE was 2,275,176,430 while advancing was only 834,544?  

That's 3:1 declining!  In fact, of the 3,241 shares on the NYSE, only 964 were positive yesterday – also 3:1 against.  The same on the broader Nasdaq too.  

SPY 5 MINUTEIn fact, yesterday was a complete catastrophe other than the low-volume "rally" from 10am to 2pm, with the other 75% of the day's volume being all downhill from 9:30 to 10:00 and again from 2pm to close (4pm EST).

Still, as the great President Bush once said: "fool me once, shame on — shame on you. Fool me — you can't get fooled again.

Of course, an even greater President, Lincoln (who had himself shot when he found out he was a Republican) actually said that you can, indeed fool some of the people all of the time and the stock market is certainly evidence of that, as dip buyers rush in on anything that even looks like it might be a rally – no matter how much of a charade it actually is. 

RUT WEEKLYYou can see our predicted 1,150 line come into play on Dave Fry's Russell Chart but it doesn't show that the Russell Futures made it all the way down to 1,140 before being jammed back to 1,165 and, finally, settling the day at 1,160.

As Dave points out, we're still down 4% for the weak week and all yesterday's action really was was a WEAK bounce off a 5% dip (1,200 to 1,140), which is EXACTLY what our 5% Rule™ predicted would happen.  

Those TZA August $14 calls I told you about on Tuesday, when they were .91, topped out at $1.82 in the morning for an exact double – very good money for two day's work and a great offset for a quick dip.  The main purpose of our hedges is to allow us to ride out a quick downturn and see if there is, indeed a real trend in play.  So far, there isn't – not on the surface anyway.  

And it's all about appearances in this market – no one seems too concerned about HOW we make our levels – as long as we make them.  Fundamentally, I expect a full correction on the Russell back to 1,100 by the end of the month, but I am willing to revise my bearish prediction should earnings come in better than expected, especially retail.  Speaking of retail – we shorted XRT two different ways last Tuesday, in our Live Member Chat Room, with me saying at 10:33 am:

XRT/DM – Thank you, I did want to add them.  $88 is too beaucoup for XRT (and $50 was too beaucoup for GPRO it seems) and I like 5 Aug $86 puts at $1.10 in the $25KP and, in the STP, let's pick up 10 of the Sept $93/88 bear put spreads for $3.20 ($3,200) with $1,800 of upside (56%) if XRT simply stops going up here.  

As you can see from the chart, our entry was well-timed and the Aug $86 puts are already $1.60, up $200 (45%) on 5 contracts in our $25,000 portfolio – where we specialize in small, affordable trades that fit in anyone's budget.  The $3,200 spread is very much "on track" for the full $1,800 gain – as long as XRT does not recover $88 by September.  Already the spread is $3.70, also up .50 per contract ($500), but just 15% on the more conservative, longer-term play (so far).  

This is one of the reasons we keep 5 different virtual portfolios at Philstockworld, we can practice different strategies for different portfolio types as well as different levels or risk tolerance.  Our Income Portfolio, for example, is risk-intolerant, as it's made for retirement accounts and simply seeks to gain 10% a year as safely as possible, with a tremendous amount of self-hedging in the positions.  That portfolio is right on track, up 6.6% for the year.  

Our more aggressive Long-Term Portfolio (also $500,000) is down just a bit this week but still up 18.8% for the year and it is hedged by our $100,000 Short-Term Portfolio, which offsets the LTP's losses nicely and finished the day up 8.2% – which is exactly how they are designed to work together!  Our Butterfly Portfolio ($100K) really doesn't care what the market does, and it's up 20.4% at the moment while the aforementioned $25,000 Portfolio is up 10.5% so far. 

We reviewed all of our positions in Tuesday's Live Webinar and we weren't worried then and we're not worried now because, on the whole, we're very well balanced.  If you are not well-balanced and were worried as the market dipped yesterday morning, consider this morning to be an opportunity to hedge a bit more or, at least – to lighten up on your bullish positions and get to more cash.   Earnings season is here and things could get pretty rough!  

BALANCE is the key to enjoying your trading experience.  As Mr Miyagi said:

"Better learn balance. Balance is key. Balance good, trading good. Everything good. Balance bad, better pack up, go home. Understand?"  

Well, that's sort of what he said.  Words to live by nonetheless. 

Have a great weekend, 

- Phil

 


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  1. Oil Lines

    R3 – 104.80
    R2 – 103.90
    R1 – 103.34
    PP – 102.45
    S1 – 101.89
    S2 – 101
    S3 – 100.44


  2. Not a good day in Europe yesterday:

    http://qz.com/232976/a-gruesome-day-for-europes-markets-in-one-table-three-charts-and-one-photo-of-garth-brooks/

    And France not recovering quickly:

    France blamed the drop on workers taking too many four-day weekends.


  3. Very good article about the oil boom in the US:

    http://www.slate.com/articles/business/the_juice/2014/07/america_world_s_leading_oil_producer_as_we_re_pumping_more_we_re_using_less.html

    On a macro level, it turns out the U.S. has actually managed the oil boom with some modicum of intelligence. It’s little-appreciated, but the boom in oil production has coincided with a quiet revolution in the way Americans use oil. At the same time we are pumping more, we are using less, and using it more intelligently. Consumption amounted to 18.9 million barrels per day in 2013, which was up from 2012. But that rise followed seven years of net decline, from 20.8 million barrels per day in 2005 to 18.49 million barrels of oil per day in 2012. Between 2005 and 2013, oil consumption fell 9 percent in absolute terms.

    Transportation accounts for about 72 percent of petroleum and other liquid fuel use. And this vital sector has become much more efficient in recent years, thanks to the advent of hybrids, the imposition of new standards, and persistently high gas prices. The typical car sold in June 2014 got 25.5 miles per gallon—hardly great, but up 27 percent from October 2007.

    Petroleum Imports.


  4. Good Morning!


  5. Still viewed as an unsettled scientific debate on Fox News and a hoax for some in Congress:

    http://www.businessinsider.com/the-scientific-debate-on-global-warming-in-one-chart-2014-3

    James Powell Global Warming Chart


  6. Phil, doing our 20%, 40% rule on /TF, I calculate our levels to be 1155 and 1169. would you recommend trading the futures line at this time or do you see some downside risk and wait for better entries/? thanks as always. 


  7. Phil/TASR

    Are you closing the position in the Income Port. and replacing with the one from yesterday or just adding another? You had $15 puts with $13/20 bcs I believe.


  8. Phil

    DE starting to look good again approaching its 200MA. 


  9. Good morning!

    Big Wheeeeeeee! on oil this morning, $101.80 after hitting $103 for another short entry overnight (those rascals!).  That SCO spread is looking pretty safe at the moment.  

    We're opening pretty flat with the Nas up 0.3% but still below 3,900 on /NQ.  /ES 1,960 and /TF 1,160 are levels that need to be taken as well as /YM 16,850 before I would even consider a bullish position today (other than TASR, if you missed it – still recovering, though it might be just us buying).  Until then, those are all good shorting lines.  

    Oil/StJ – And all those new car sales are generally higher-mileage (one of the other reasons new cars are so affordable – they lead to immediate gas savings for the buyer) so our fleet should pick up a lot of efficiency over the next couple of years.  

    Climate/StJ:  

    Miami, the great world city, is drowning while the powers that be look away

    Low-lying south Florida, at the front line of climate change in the US, will be swallowed as sea levels rise. Astonishingly, the population is growing, house prices are rising and building goes on. The problem is the city is run by climate change deniers

    Too funny if not so tragic…

    /TF/Jasu – As above, I like the short at 1,160 because the news sucks and the gains yesterday were low-volume BS.  What rational person wants to BUYBUYBUY into the weekend?  

    TASR/RJ – Not yet but I will be considering a change next week.  I'm still good with that target (over $15 by 2016) but, of course, no reason not to improve it. 

    DE/DC – I prefer CAT if it gets cheap (more construction work), so DE has to have a really good sale relative to CAT.  


  10. Don't forget the market is run by computers so very likely same program again today – sharp turn back up at 10am on low volume and then selling resumes at 2pm.

    SPY 5 MINUTE


  11. I'm liking /RB long at $2.93 with super-tight stops below.  


  12. Phil / Hedge – Took the TZA play off the table yesterday (thanks by the way) but I'm curious if you would recommend adding another TZA play over the weekend. My positions are mostly from your income portfolio so they should be self-hedged but if we fail today, I think it may be be good to have something of a hedge in place, no?


  13. Trip to Jackson, mega-buck land proved vacationland is dead this year. Was not held up on Teton pass, both ways. Albertsons was low business, noticed 2 groups of guys buying the cheapest food they could find, and discussing fuel prices. The doctor's office, 6 full time, and mine a U Utah 1 day per month showed total deadness. I waited an hour and one person came for the 6 while I was 30 minutes late to see him and 30 minutes early because the road was empty. Otherwise the office was a financial disaster. The hillside falling shows how stupid planning was, letting Wall Greens cut back into the hill to make a parking lot, now full of dirt, rocks, and store closed after 4 months. The Budge family moved out in November from fear and the house is split in half. Out of state cars were all California or 99% CA.


  14. World's Largest Mall (China) Still Empty After 7 Years.  

    Geez, what would our GDP be like if we just plopped mini cities around the country like that?  And the miracle of State-Owned businesses is there's no loss.  The banks get paid, the builders get paid – the Government just prints money and uses it to build stuff…

    TZA/Pfehl – Yes but waiting to see what kind of afternoon rally (if any) we get.  Of course, if we don't get a rally, then I'll be wanting a more aggressive short!  

    I hate to do it (as it's a sign of a bear market), but it's time to bring out the Multi-Chart so we can find our fresh horses to short:

    So, in the 6-month view, it looks like the Dow, S&P and Nas have the most to give up still, along with the Hang Seng and Nikkei – all on their 50s and with a 2.5% gap down to the 200s.  Lots of chances to short if the 50 dmas break and, of course, those 50s then give us very good stopping lines.  

    Wow Shadow, sounds kind of grim! 


  15. The low this AM was right after 9:30 on all the charts-interesting-the computers seem to be all synched. I'm waiting to get anymore hedges until we are green again. Anything ITM will be gone, or rolled, if not. I wonder how many more TSLA"S will burn up this weekend?


  16. Phil

    The cashier confirmed that business was way off and she likes it busy, makes the day fly by. Another noticeable at the butcher block. No Kobe beef, rib eye $9.99 and Atlantic Salmon on sale for $5.97 per pound. Another you won't notice east coast but everything from lettuce to peppers were wilted, I assume the California drought is impacting produce. This Jackson WY were it cost $500 to eat out and deluxe rooms $10,000 per night, at least they were.


  17. AAPL moving up, tasr still going down-11 basically.


  18. Media giants get their say on Comcast-Time Warner Cable merger • 10:14 AM

    The Department of Justice has asked CBS (CBS +0.2%), Disney (DIS -0.2%), and Discover Communications (DISCA +0.2%) to weigh in on the proposed merger between Comcast (CMCSA -0.2%) and Time Warner Cable (TWC -0.2%).

    Presumably, the media companies expressed concern over NBCUniversal receiving preferential treatment if the deal is approved.

    Netflix (NFLX +1%) and Dish Network (DISH +0.4%) are already on record as opposing the deal.


  19. private TSLA

    Those batteries are over a year old and more cycles will absolutely increase failures. Still no giga factory, I really doubt they need it with sale falling off. BTW the free charging stations in Jackson are unused. County government is so wise with spending, they also have to fix the hill falling onto Broadway.


  20. AMZN up 13.86 quite a jump !!!!!


  21. Yodi,

    I will be moving to Germany this week for the next school year and would like to meet up if you're interested.  How much longer will you stay there before you return to Mexico?  My email is 'business2@palli.com', send me a note with your contact info.


  22. sold TASR 2016 $10 puts for $1.65.  margin on Fidelity $3.29.


  23. BBBY – look like someone decided $58 was time to buy the dip


  24. TASR, oops margin $3.17 not $3.29.


  25. Pretty well out of DRWI at this point.  Put some of the proceeds in ANAD, but mostly in cash in the penny stock area.


  26. TSLA/Pirate – Yeah, I guess they need to add a warning label that says "Caution, car may catch fire if split in half"  cheeky

    Ribeye/Shadow – $9.99?!?  Send me 1,000 pounds and we'll make $5,000 (if I had a butcher shop).  I just chose not to buy ribeye yesterday because it was $18.99 at FWM vs $6.99 for sirloin.   It was only for a stir-fry, so there was no way I could justify that spread.  

    TWC/Jabob – Who is going to say they are for it?  

    AMZN/Yodi – They are seeking drone approval and everyone is excited.  I'm trying to do the math between loading 300 items on a UPS truck and that truck then doing a route with 3-4 more trucks that hit 10 homes an hour vs loading 1 item on – assuming 20-minute round trips 12 hours a day = 36 trips per drone x 2 for chargine – 20 drones over and over again.  Seems like more labor on their end for sure (loading and reloading and charging drones – not to mention repairing them) and even if the drones are $10,000 each, that's $200,000 in drones (and I very much doubt $10,000 will give you a box-carrying robot drone) vs cost of 4 trucks and people to accomplish the same task.    Kudos to Bezos for trying and I am sure it's the future but only in the same way that a Roomba, THEORETICALLY replaces the need for vacuuming – doesn't really work in practice in most places.  Not to mention that, in order to get the drones within 10 minutes of the customers, they will need to build thousands of local shipping centers and staff them and they STILL have to have trucks that take stuff from the main centers to the regionals – so now we're only saving 3 trucks and drivers with 20 drones (and at least one drone operator so saving 3 trucks and 2 employees at best).  

    In short, drones are a really dumb reason for AMZN to be up 5%!  

    Amazon seeks OK for testing of 50-mph drones

    Amazon climbs after ChannelAdvisor says sales growth accelerated

    That second one is just as dumb as sales does not equal profits at AMZN.  In fact, all of their profit growth last year was from raising the price of Prime Memberships (like COST).  

    Still, certainly not a stock you stand in the way of!  

    TASR/Lunar – That's a big margin.  They are essentially charging you the full $5 it costs to own the stock (50% margin) less the $1.65 you are collecting.  TOS says $1.13.  

    BBBY/Scott – I'm pretty comfortable with our bottom call.  

    DRWI/Albo – Nice exit, you can always get back in over $2.50:

    Dec $2.50 puts are .80, over $1 might make a nice sell if you are interested on a pullback.  

    TSLA/Cturb – I think they should spin it that TSLA is a car that kills thieves…  blush

    Let's not forget our bounce lines, still in play from yesterday:

    • Dow 17,050 to 16,800 is 250 in 3 days so you need to make a strong bounce in 1.5 days in order to have a chance at a V recovery.  Bounces would be 50 points so 16,850 and 16,900 are what we'll watch.  
    • S&P 1,985 to 1,955 is 30 points so 6-point bounces to 1,961 and 1,967 will be our targets. 
    • Nasdaq 4,485 to 4,360 (now I'm rounding) is 125 so 25-point bounces to 4,385 and 4,410.
    • NYSE 11,100 to 10,900 is 200 points so 40-point bounces to 10,940 and 10,980.
    • Russell 1,208 to 1,140 is 68 points and we'll call that 14-point bounces for 1,155 (rounding) and 1,170

    The only change I made since 11:32 yesterday is changing the S&P's weak bounce level to green, and that was black – right at 1,961 yesterday, now 1,963.  So pretty much nothing has happened at all in the last 24 hours.  VIX was 12.50, now 12.25.  TLT was 113.50, now $113.50.  

    /RB failed $2.93 after brief trip to $2.935 – dead money.   Oil $101.50!  


  27. /CL broken below 101.50


  28. VIV – starting to get interested in selling 17.5 puts..



  29. Oil/Phil – have no USO or SCO position at moment. feel like i'm missing out…  Dare I start a short position?



  30. scott

    I think the consensus is we're looking for a drop to $100 by Oct.  We're also closer to short, medium, and long term support than we are resistance so it probably isn't a great trade to make on a technical basis.  However, risk factors on a fundamental basis are favoring the short side imo.


  31. Taco Bell updates Cantina Bell menu as Chipotle rolls on

    11:35 AM ET · YUM

    • Taco Bell (YUM) plans to update its Cantina Bell menu next week with more meat-heavy options and new protein items such as Greek yogurt.
    • Incoming CEO Brian Niccol says the changes are being made in part to appeal to Millennials.
    • The Cantina Bell menu hasn’t dented the momentum at Chipotle (CMG -0.3%) as some CMG skeptics forecast it would.


  32. Utility funds might weather the next rate scare, Morningstar says

    11:10 AM ET · VPU

    • Morningstar’s Robert Goldsborough thinks utilities are unlikely repeat their mid-2013 swoon, asserting that investors now are pricing in 4% U.S. Treasury yields, which would suggest no substantial downward moves in utilities if rates hit that level; utilitiy companies also could continue their recent outperformance if Treasury rates stabilized close to 3%.
    • On the other hand, Brendan Conway of Barron’s sees this as reason for caution in the long run; if the climate of falling rates since 2000 is one of the drivers of utilities’ tremendous decade-plus performance, then the end of that climate would seem to bode ill for ETFs such as VPU and XLU.
    • Also: IDU, UPW, FUTY, RYU, PUI, FXU, SDP, PSCU


  33. Also, going to pick up a couple contracts of the July $73c TNA @ $2.15 to play for a bounce off the 200 DMA.


  34. Amazon, eBay pop on good ChannelAdvisor data; Google ticks higher

    11:07 AM ET · ECOM

    • ChannelAdvisor (ECOM +6.9%) clients saw a 34.4% Y/Y June increase in their Amazon (AMZN +4.5%) same-store sales. That growth rate is well above May’s 28.1%, and is the highest rate seen in the last 12 months.
    • Client eBay (EBAY +2.5%) same-store sales grew 12.3%. That’s a little better than May’s 11.5%, and suggests the toll taken by a data breach and Google algorithm changes might be abating a bit. Auctions -19%, fixed-price +18.4%, Motors +10.4%.
    • A positive for Google (GOOG +0.9%): Search ad-driven same-store sales rose 20.4%, a big improvement from May’s 11.5% and the 2nd-highest level seen in the last 12 months. Cost per click (ad prices) rose 5% to $0.48, conversion rates 6% to 2.81%, and average order value (AOV) 7% to $137.02.
    • ChannelAdvisor notes AOV has historically “been a good indicator of consumer sentiment,” and that the appeal of Google AdWords for marketing costlier items remains strong.
    • Meanwhile, Google’s product listing ads (PLAs) keep gaining traction as a vehicle for selling cheaper goods. Their same-store sales rose 47.8%, sharply above May’s 21.4%. AOV fell 8.7%, but conversion rates rose 10.5%.
    • Deutsche has upgraded ChannelAdvisor to Buy. eBay reports on July 16, Google on the 17th, and Amazon on the 24th.


  35. New NHTSA probe covers 500K Ford vehicles

    10:52 AM ET · F

    • The NHTSA says it will investigate Ford (F +0.8%) over a potential problem which could impact steering on older vehicles.
    • The issue affects close to 500K Crown Victoria, Grand Marquis, and Marauder vehicles from the 2004-2007 model years.
    • Even amid the onset of recall fatigue in the industry, the high vehicle count for the latest probe stands out.


  36. More on Whirlpool’s purchase of Indesit

    10:43 AM ET · WHR

    • Whirlpool’s (WHR +1.9%) purchase of a large stake in Indesit will help it come close to doubling the company’s presence in Europe.
    • Indesit appliance brands include Indesit, Hotpoint and Scholtes
    • Though Whirlpool has closed several plants in Europe over the last few years, it sees pockets of strength emerging and views the Indesit purchase as a quick entry into new categories.


  37. Mining stock rally points to coming gains for gold prices, analysts say

    10:38 AM ET · GLD

    • The outperformance of gold mining stocks over gold this year points to at least some price gains ahead for the metal, analysts say.
    • “The gold stocks typically begin rising or falling in advance of the metal, thereby foreshadowing the trend,” Gold Newsletter‘s Brien Lundin says, adding that “they move further on a percentage basis than the underlying metal, thereby offering leverage.”
    • Lundin sees prices in the $1,400-$1,500 range at the end of the year, with prices continuing to strengthen in a “slow-but-sure” climb out of last year’s steep correction.
    • ETFs: GLD, GDX, NUGT, IAU, DUST, SGOL, UGL, DGP, GLDX, GLL, UGLD, DZZ, GLDI, DGL, DGZ, RING, AGOL, DGLD, OUNZ, GGGG, PSAU, TBAR, UBG, GLDE, GYEN, GLDL, GLDS, GEUR, GGBP


  38. Joe’s Jeans pops after earnings beat and upgrade

    10:28 AM ET · JOEZ

    • A FQ2 earnings beat by Joes’s Jeans (JOEZ +17.5%) and a timely upgrade from B. Riley on the company have lit a torch under shares.
    • Joe’s Jeans boosted its gross margin rate by 300 bps in FQ2 as it showed little ill effect from its integration of Hudson Clothing Holdings.


  39. Salesforce buys CRM analytics startup RelateIQ for $350M

    10:25 AM ET · CRM

    • Salesforce (CRM) is buying RelateIQ, provider of an analytics-based cloud CRM software platform, for $350M in stock. (8-K)
    • RelateIQ has pitched itself as a data-driven alternative to Salesforce and other CRM platforms. Its apps analyze a user’s inbox and calendar to find valuable contacts, merge relevant data, and keep track of customer interactions. The company recently raised $40M at a $245M valuation.
    • Salesforce, already the CRM market’s largest vendor (16.1% 2013 share, per Gartner), is looking to stay ahead of both established software giants such as Oracle, SAP, and Microsoft (expanding their cloud offerings), and upstarts such as SugarCRM.
    • The RelateIQ deal is Salesforce’s largest since last year’s $2.5B purchase of cloud marketing automation software vendor ExactTarget.


  40. Senators ask Gilead for Sovaldi pricing info

    10:09 AM ET · GILD

    • Senate Finance Committee Chairman Ron Wyden and committee member Chuck Grassley have formally requested information from Gilead Sciences (GILD +0.9%) about how it determined the $84,000 full-regimen price for Sovaldi. The drug’s high rate of effectiveness and lack of competition has stoked the rapid uptake by the medical community and has put Medicare and Medicaid under budgetary pressure.
    • Potentially complicating matters for Gilead is the fact that it is selling Sovaldi to Egypt for $900 for a full regimen.


  41. Isle of Capri dives after announcing management changes

    10:01 AM ET · ISLE

    • Isle of Capri (ISLE -14.2%) falls sharply after CFO Dale Black resigns and the company eliminates the position of Executive Chairman of the Board of Directors.
    • Shares of the casino operator had raced higher this summer on buyout talk, but are giving back a decent chunk of it today.


  42. Fastenal falls nearly 5% as Q2 gross margins come in weak

    09:56 AM ET · FAST

    • Fastenal (FAST -4.9%) opens sharply lower as Q2 earnings rose nearly 8% Y/Y on improved revenues, but revenue came in slightly below analyst estimates and margins weakened.
    • Gross margins fell 140 bps Y/Y and 40 bps Q/Q to 50.8%, below the traditional 51%-53%, and management indicated that near-term gross margins will remain at or below the low end of prior targets (or ~50.5%-51.5%) driven by ongoing softness in higher margin fastener sales.


  43. Trading in CYNK halted; SEC issues suspension order

    09:54 AM ET · CYNK

    • Trading in CYNK Technology (CYNK), the “social marketplace” that at one point yesterday had a $6B+ valuation in spite of having virtually no revenue or assets, has been halted on the pink sheets.
    • In addition, the SEC has issued a suspension order that lasts until July 24. The agency cites “concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions.”
    • The financial press continues to have a field day unearthing details about CYNK’s operations (or lack thereof).


  44. Ebola outbreak in West Africa uncontained

    09:48 AM ET · BBRC

    • According to the World Health Organization, the Ebola epidemic continues to spread in Sierra Leone, Liberia and Guinea. The total number of confirmed infections is now 888, including 539 deaths, since February.
    • Ebola’s mortality rate is as high as 90%. It is spread by close contact with the body fluids and tissues of infected people. There is no treatment or vaccine available.
    • ETFs: BBRC, EMBB
    • ETFs: IBB, BIB, IRY, IXJ, BIS, DRGS


  45. Soft comp derails PriceSmart

    09:27 AM ET · PSMT

    • PriceSmart (PSMT) trades lower after underwhelming with its FQ3 report.
    • The company’s meager 1% gain in comp sales for June is trumping a profit beat.
    • PSMT -3.3% premarket


  46. DragonWave catches post-earnings upgrade

    09:27 AM ET · DRWI

    • T.D. Securities has upgraded DragonWave (DRWI) to Hold two days after the company beat FQ1 estimates and issued stronger-than-expected FQ2 guidance.
    • Boutique i-bank H.C. Wainwright upgraded DragonWave a week before earnings.
    • Shares +1.3% premarket.


  47. Traders look to quiet session as Europe jitters ease

    09:25 AM ET

    • Global markets are much calmer today, as concerns over a major Portuguese lender have cooled; S&P and Dow flat, Nasdaq +0.2%.
    • European markets trade mostly higher, with Portugal’s PSI +2.2% after yesterday’s 4.2% plunge; Asian markets ended on a mostly lower note.
    • Currency markets also show resilience, with the euro trading at 1.3612 vs. the dollar, reversing yesterday’s marginal weakness; the yen is broadly unchanged against the dollar.
    • Financials are in focus after Wells Fargo reported a higher profit amid a drop in revenue, sending shares -1.2% premarket; the big investment banks will report next week.
    • Treasurys open the day with modest gains; the benchmark 10-year yield is lower by one basis point at 2.52%.


  48. Playing the waiting game on Gap

    09:00 AM ET · GPS

    • Canaccord Genuity backs its long-term bullish thesis on Gap (GPS) despite the retailer’s disappointing report on June same-store sales growth.
    • There’s a bit of patience with Gap amongst retail analysts with the company set to roll out a global merchandising and marketing strategy later this summer. The plan could boost results.
    • GPS -1.0% premarket


  49. Nordic American Tanker Ltd declares $0.12 dividend

    08:52 AM ET · NAT

    • Nordic American Tankers Limited (NAT) declares $0.12/share quarterly dividend.
    • Forward yield 5.58%.
    • Payable Aug. 12; for shareholders of record July 25; ex-div July 23.
    • A dividend-in-kind for NAT‘s 20.1% holding in NAO. (PR)


  50. Mortgage insurers tumble on FHFA proposal; opportunity in new players?

    08:38 AM ET · MTG

    • An update on the mortgage insurers as a premarket slump in their stock prices has turned into a rout in the wake of proposed new rules from the FHFA which would force sizable capital raises. MGIC Investment (MTG) -15%, Radian (RDN) -7.2%, Genworth (GNW) -4.8%. Also worth keeping an eye on is Old Republic (ORI).
    • Goldman chimes in, removing MGIC from its Conviction Buy list.
    • There’s no action in newer mortgage insurers National MI (NMIH) and Essent Group (ESNT), but neither are burdened by any legacy issues and both welcome the new rules, with Essent saying it’s already in compliance.
    • NMIH response
    • Previously: Radian is not pleased
    • Previously: Genworth will need to raise about $500M


  51. CME and Thomson Reuters to operate silver fix

    08:29 AM ET · CME

    • CME Group and Thomson Reuters (TRI) have won the battle to operate the London silver fix when the current system is disbanded next month, says the London Bullion Market Association.
    • CME’s role will be to provide a price platform and methodology, while Thomson Reuters will be charged with administration and governance.
    • The silver fix is currently set each day at noon by three banks (Deutsche, HSBC, and Scotiabank) via conference call, but there’s been just a bit of scrutiny of late about possible benchmark manipulation in a number of other markets.
    • Silver’s overhaul is likely just the beginning, with the gold, platinum, and palladium fixes next on tap for reform.


  52. Zillow, Trulia’s user growth remains healthy in June

    11:43 AM ET · Z

    • Zillow (Z -0.3%) had 83M monthly unique users in June, +2% M/M (hurt by one less day) and +49% Y/Y. The Y/Y growth rate is even with May’s.
    • Trulia (TRLA +0.7%) says its monthly unique visitors topped 54M in June, up from May’s 51M+. With the help of aggressive marketing, Y/Y growth accelerated to 55% from May’s 47% and Q1′s 42%.
    • Both companies have easily outperformed the Nasdaq this year (Zillow especially). Zillow now goes for 12.4x 2015E sales, and Trulia 4.5x 2015E sales.


  53. Wells Fargo backs off bullish view of Procter & Gamble

    08:36 AM ET · PG

    • Wells Fargo downgrades Procter & Gamble (PG) to Market Perform from Outperform and reduces estimates for FQ4 and fiscal years 2015-2016.
    • The investment firm hasn’t seen the fundamental forward progress that it expected and has lost some faith that growth drivers will fire up.
    • PG -0.5% premarket


  54. Halliburton in new JV to target China tight oil, gas

    11:42 AM ET · HAL

    • Halliburton (HAL -0.7%) and Chinese private oilfield service provider SPT Energy sign a joint venture deal to tap tight oil and gas reserves in China’s remote western region of Xinjiang.
    • SPT has 20 years experience operating in Xinjiang, while HAL would contribute its expertise in enhancing oil recovery using fracking technology, says SPT, which will hold 51% of the new entity.
    • It is HAL’s first joint venture for hydraulic fracturing services in China, joining similar tie-ups between Weatherford and Sinopec as well as FTS International with Sinopec.


  55. Wells Fargo little-changed after inline quarter

    08:20 AM ET · WFC

    • Net income of $5.7B up 4% Y/Y. EPS of $1.01 up 3%.
    • ROA of 1.47% slips from 1.57% in Q1, 1.55% a year ago.
    • ROE of 13.4% slips from 14.35% in Q1, 14.02% a year ago.
    • Net interest income of $10.8B gains $176M from Q1, with NIM of 3.15% down five basis points thanks to strong deposit growth, but not enough to do with the money.
    • Noninterest income of $10.3B up $300M from Q1, with mortgage banking income halting its steep decline – it rose to $1.7B, up $213M from Q1. One would expect a gain thanks to seasonality though – on a Y/Y basis, mortgage banking income fell 39%. Overall noninterest income fell 3% Y/Y.
    • Noninterest expense of $12.2B up $246M from Q1 and essentially flat from a year ago.
    • Common Equity Tier 1 ratio of 11.31% vs. 11.36% in Q1, 10.71% a year ago. 39.4M shares were repurchased during Q2, plus an estimated 19.4M shares through a forward repurchase deal expected to settle in Q3.
    • Credit losses of $717M in Q2 vs. $1.2B a year ago. Bank releases $500M for its credit loss allowance (vs. total income of $5.7B), but expects lower level of releases going forward.
    • Conference call begins at 10 ET.
    • Previously: Wells Fargo EPS in-line, beats on revenue
    • WFC -0.3% premarket


  56. Volkswagen reports on June sales

    08:18 AM ET · VLKAY

    • Volkswagen (VLKAY) reports deliveries rose 4% to 859.4K in June.
    • Strong demand in China and Europe for Volkswagen helped prop up softer results from the U.S. and South America.
    • 1H sales for Volkswagen were up 6% to 4.97M vehicle, including an impressive 18% gain in China to 1.81M vehicles.


  57. Wynn Resorts’ land deal in Macau under investigation

    08:14 AM ET · WYNN

    • A land deal in Macau involving Wynn Resorts (WYNN) is under investigation by authorities in the region.
    • Concerns about a $50M payment from Wynn to an entity with potential links to political officials is the focus of the probe.
    • The land in question is part of the Cotai Strip where Wynn is building its second large casino complex.


  58. Exxon investing in diesel with $1B expansion plan for Belgium refinery

    08:10 AM ET · XOM

    • Exxon Mobil (XOM) is making a contrarian bet to boost its struggling European refining business with its plan to invest more than $1B in expanding diesel fuel production at its big refinery in Antwerp, Belgium.
    • XOM’s head of refining for Europe and most other non-U.S. regions says the company is taking a long-term view on diesel: “If you look at Europe, demand for diesel continues to increase and demand for gasoline is decreasing.”
    • Big shifts in the European auto fleet have caused huge changes in fuel consumption; car and truck drivers in the EU now burn at least 2.5x more diesel than gasoline, while the use was even a decade ago.


  59. phil/TASR margin, not sure i follow the numbers.  Stock is $11.  $3.17 is 30% that.  I'm not doubting that TOS is only $1.13 but they charge me more for trading options.  With Fid I had negotiated the trading fees some time ago as I was doing a lot of trading and I was ready to move my entire account elsewhere (education funds and all).  But anyway, I am not sure I want to be that highly leveraged (10% margin only), in case things turn south.  Even on $3.17, I could make >50% in 1.5 years and that seems OK to me for a LTP.


  60. Self-denial diets falling out of favor

    09:54 AM ET · UL

    • Unilever’s (UL -0.2%) sale of Slim Fast confirms the sluggish growth trends being seen by diet food brands.
    • Healthy Choice (CAG), Lean Cuisine (NSRGY), Weight Watchers (WTW), and Jenny Craig have all struggled to keep up with expectations.
    • What to watch: The push by consumers into healthier foods such as Greek yogurt has marginalized the concept of a “hard diet” based on self-denial. Analysts think the diet category could continue to suffer as a consequence.


  61. Soft read on demand from lower-income U.S. consumers

    07:52 AM ET · RCII

    • Shares of Rent-A-Center (RCII) are now down 14.1% in premarket trading after warning it will miss estimates with its Q2 report.
    • The soft read on demand from lower-income consumers in the U.S. by the company falls in line with trends being seen at Wal-Mart and Family Dollar.
    • Analysts warn the earnings misfires could spill over to other retailers.
    • On watch: Aaron’s (AAN), Conn’s (CONN), Big Lots (BIG), Five Below (FIVE), Dollar Tree (DLTR).


  62. Qualcomm pulled from Conviction Buy list at Goldman

    07:46 AM ET · QCOM

    • The catalysts noted in the November upgrade “have largely played out,” says analyst Simona Jankowski, cutting Qualcomm (QCOM) to Buy from Conviction Buy.
    • The team trims its June and September quarter estimates to reflect weaker handset demand, but views the issues as “transitory and not thesis-changing over the longer term.”
    • Shares -1.2% premarket


  63. Genworth confident of quick compliance with new capital rules

    07:20 AM ET · GNW

    • Also responding to new proposed PMIERs from the FHFA (Radian earlier), Genworth (GNW) says it intends to be compliant with the updated capital rules by their anticipated effective date of Jun 30, 2015. The company expects additional capital to be required of $450M-$550M, and says it has a number of sources to be utilized to fulfill that.
    • Press release


  64. Reynolds American confirms tobacco players all lined up for Lorillard deal

    07:18 AM ET · LO

    • Shares of Lorillard (LO) are higher in early trading after Reynolds American (RAI) confirms an earlier report that it’s in talks with the company over a buyout.
    • Reynolds says British American Tobacco will support the transaction by subscribing additional shares.
    • Imperial Tobacco (ITYBY) will snap up key brands to help make the deal more likely to sail past regulators.
    • LO +4.6% premarket


  65. Engine malfunction of F-35 likely not to affect entire fleet

    07:09 AM ET · LMT

    • The Lockheed Martin (LMT) F-35 remains grounded, and will most likely miss its other international air shows in the U.K next week, although the Pentagon states that the June malfunction causing an engine fire is likely not a systematic issue.
    • “We really want to get at the root cause of this to determine exactly what caused it,” says Defense Undersecretary Frank Kendall. “There’s a growing body of evidence that this may have been an individual situation, not a systemic one. But we don’t know that for certain at this point in time.”
    • The fighter jet’s engine is manufactured by Pratt & Whitney (UTX).


  66. Telekinetic Google Glass

    03:17 AM ET · GOOG

    • A group in London called “The Place” has launched an app called MindRDR which allows Google (GOOG) Glass wearers to take a picture of what they are looking at by reading brainwaves.
    • The new app works via a bio-sensor attached to Glass, and picks up brainwaves that correlate to “focusing”. If a user strongly focuses on an item while connected to the hardware, a snapshot will be taken.
    • Photos can even be uploaded to Twitter via the mind, if a user focuses again right after the original picture is taken.


  67. Unilever sells Slim-Fast

    02:44 AM ET · UL

    • After suffering a decline in sales and popularity over the past decade, Unilever (UL) has sold its Slim-Fast brand to private-equity firm Kainos Capital. The company acquired Slim-Fast for $2.3B in 2000.
    • The financial terms for the sale weren’t disclosed, however Unilever will still retain a minority stake in the business.
    • The conglomerate is slowly stepping away from its core foods portfolio, and has also sold its Ragu and Bertolli pasta-sauce business for $2.2B last month.


  68. Russia not interfering as Ukraine surrounds Donetsk

    02:17 AM ET · RSX

    • The Ukrainian army is preparing its invasion of Donetsk, the pro-Russian separatist stronghold and city of nearly 1M. Rebel leaders are urging that residents evacuate the city and have vowed to never surrender.
    • Separatists have continued to call on Russia for aid although their eastern neighbor has not yet offered any direct military assistance. While it openly condemns Ukraine’s military crackdown, Russia faces heavy economic sanctions should it intervene.
    • ETFs: RSX, RUSL, RSXJ, ERUS, RUSS, RBL, RUDR


  69. Largest muni outflows since January

    01:59 AM ET · MUB

    • U.S. municipal bond funds had some of the biggest outflows since January, after investors pulled out $790M in the week ended July 9. $691M of the outflows was in the high-yield sector, being withdrawn due to default concerns of Puerto Rican debt.
    • Adding to the worries is Puerto Rico’s newest law which allows for public corporations to restructure their debt. The new law pushed ratings agencies last week to downgrade the commonwealth’s bonds even lower within junk territory.
    • Barclays High Yield Municipal Bond Index, up more than 9.5% in mid-June, was up less than 5.5% this past Wednesday.
    • ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, HYMB, ITM, MLN, SHM, CMF, XMPT, BABZ, BABS, PRB, SHYD, SMB, NYF, PZT, SUB, PWZ, CXA, PVI, SMMU, INY, MUAF, VRD, MUAD, MUAE, GMMB, MUAC, MUAG, RVNU, MUAH, FMB


  70. Citi: Chevron, ConocoPhillips, Total are best ways to play new energy wave

    Yesterday, 07:17 PM ET · CVX

    • Big oil companies are in the early stages of a new cycle of profitability, and the best stocks to play the wave are Chevron (CVX), ConocoPhillips (COP) and Total (TOT), Citigroup analysts say.
    • Most companies took rising energy prices as justification for increasingly marginal investment, the firm says. but the winners in this cycle “will be those that can reverse this trend, better aligning their business with the needs of customers for cheaper energy,” the Citi team says.
    • CVX is a leader in new oil sources in the Gulf of Mexico, COP’s main growth driver is U.S. shale, and TOT has slowed high-cost developments, making the three Citi’s “best value-adjusted opportunities” in the sector.


  71. Gartner hikes 2014 chip industry outlook

    Yesterday, 07:09 PM ET · SOXX

    • Gartner now expects global semiconductor sales 6.7% Y/Y in 2014 to $336B; the firm previously forecast 5.4% growth.
    • DRAM sales, boosted by strong pricing, are expected to grow 18.8%. But Gartner adds many other industry segments, including ASICs, FPGAs, analog chips, and non-optical sensors, are also doing well. As one would expect, mobile hardware demand is fueling much of the growth.
    • Trade group SEMI recently estimated global chip equipment sales would rise 20.8% this year to $38.4B, and 10.8% in 2015 to $42.6B. Investments in cutting-edge manufacturing technologies (3D transistors, 3D NAND flash, 14nm) is driving much of the growth.
    • Is a lot of the good news priced in? The Philadelphia Semi Index (SOXX) has easily outperformed the Nasdaq this year, thanks to optimism about improving growth and industry consolidation. Benchmark observed today inventories have been rising for much of the semi supply chain.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG


  72. WSJ: Alibaba IPO process could start at month’s end

    Yesterday, 06:18 PM ET · BABA

    • Alibaba (BABA) could launch its IPO process (roadshow included) at the end of July, sources tell the WSJ. With the process typically taking 2 weeks from start to finish, an IPO could happen around mid-August.
    • Bloomberg reported in June Alibaba was eying an Aug. 8 IPO. The Chinese e-commerce Chinese is believed to be mulling a $20B+ offering.
    • Yahoo (YHOO), whose Q2 results arrive on July 15, is required to sell a decent chunk of its 22.6% stake at IPO time. Many on the Street are hoping details will be given on the Q2 CC about Yahoo’s plans for the windfall. Topeka estimates post-tax proceeds from Yahoo’s IPO share sale of $9B.


  73. Apple roundup: iPhone 6 orders, U.S. Mac sales, Apple TV, TSMC

    Yesterday, 06:05 PM ET · AAPL

    • Taiwan’s Business Weekly reports Apple (AAPL -0.4%) has already put in orders for 68M iPhone 6 units. The report follows a May Morgan Stanley note indicating iPhone 6 orders are up 20% relative to 5S orders.
    • Cirrus Logic (CRUS -1.1%) would benefit from strong iPhone build activity. Orders, of course, can end up being drastically increased or pared back due to end-user demand.
    • IDC estimates U.S. Mac unit shipments fell 1.7% Y/Y in Q2 to 1.68M. With the U.S. PC market growing 6.9%, Apple’s share fell 90 bps to 10% (#4 overall). Revenue share is doubtlessly higher.
    • Parks Associates estimates Roku accounted for 46% of 2013 U.S streaming set-top (non-pay-TV) sales, and Apple TV 26%. A survey of U.S. broadband households with at least one such set-top found 44% used a Roku box the most, and 26% used Apple TV the most.
    • The WSJ backs up several other reports (previous) stating TSMC (TSM +2.3%) has begun producing an Apple CPU (likely the A8) using the foundry’s cutting-edge 20nm process. More interestingly, the paper reports Apple and TSMC have begun work on testing CPUs to be made using a 16nm process.
    • TSMC plans to launch a 16nm process (called FinFET+) next year that delivers major performance/power efficiency gains relative to its 20nm process. Digitimes has reported TSMC is working on a version of FinFET+ “tailored to Apple’s requirements,” as part of its efforts to manufacture Apple’s A9 CPU.
    • Nonetheless, Samsung is still expected to land a portion of Apple’s A9 orders, possibly with the help of its upcoming 14nm FinFET process.


  74. UnitedHealth study suggests cancer cost savings in lump-sum payments

    Yesterday, 05:54 PM ET · UNH

    • A UnitedHealth Group (UNH) study found that paying cancer doctors a lump sum to treat patients saved 34% vs. paying the doctors for each drug or service.
    • The three-year study tested the theory that percentage-based payments encouraged doctors to use treatments that were more expensive, but not necessarily most effective.
    • “We expected savings but not this great,” says SVP for oncology Lee Newcomer.
    • UNH shares recouped much of today’s losses, finishing -0.8% after a morning downgrade by Jefferies to Hold from Buy. Jefferies has a price target of $87 for the stock (closing price: $82.08).


  75. Chevron sees higher Q2 earnings, citing gains on asset sales

    Yesterday, 05:18 PM ET · CVX

    • Chevron (CVX) reports in its interim update that it expects Q2 earnings will be higher than Q1 due to gains on asset sales and an absence of impairments in the prior quarter.
    • U.S. net oil-equivalent production is seen higher Q/Q, due to less Gulf of Mexico maintenance activity and improved Permian Basin production; international net oil-equivalent production is seen lower because of planned Kazakhstan turnaround activity and the shutdown of the Angola LNG facility.
    • Q2 U.S. downstream earnings are seen comparable to Q1, as higher refining margins are offset by lower volumes and higher costs due to significant planned turnaround activity at the El Segundo refinery; international refinery crude input volumes are seen higher, reflecting lower maintenance activities.
    • CVX -0.3% AH.


  76. Court says Chesapeake must face trial on bid-rigging in Michigan lease sale

    Yesterday, 03:21 PM ET · CHK

    • A judge in Michigan has ruled that Chesapeake Energy (CHK -1%) must face a criminal trial on a charge of bid-rigging with Encana at a 2010 state land lease auction, citing evidence of a conspiracy between the companies that drove state lease prices down sharply.
    • The court cited evidence including an email sent by a top ECA exec to a land man bidding on ECA’s behalf on the morning of a 2010 auction which refers to a lease area on offer, stating that “this is a Chesapeake area and we will not be bidding.”
    • The ruling said evidence did not support a trial on two other charges involving private landowners, since although the companies discussed a deal to avoid competing for private land leases, they did not consummate one.


  77. Exxon says Pennsylvania AG singling it out in anti-fracking effort

    Yesterday, 02:57 PM ET · XOM

    • Exxon Mobil’s (XOM -1%) contends Pennsylvania’s attorney general has improperly singled it out in a bid to stop fracking, amid charges that XOM subsidiary XTO Energy is criminally liable for a leak of 57K gallons of wastewater that had been used in a fracking operations in the state in 2010.
    • The AG office argues XTO failed to install a system to contain spills around the storage tanks and neglected to secure them; the company says others have committed worse environmental offenses but haven’t been prosecuted.
    • XTO is asking a judge to order prosecutors to turn over all documents related to the decision to bring charges, and to hold a hearing on the destruction of evidence.


  78. New Amazon cloud services target enterprises, mobile developers

    Yesterday, 02:55 PM ET · AMZN

    • Zocalo, a new Amazon Web Services (AMZN -0.7%) offering aimed at enterprises, provides 200GB of cloud storage to go with document-sharing, IT admin controls, and integration with AWS’ WorkSpaces PC virtualization offering.
    • Amazon is charging just $5/user/month, easily undercutting BOX, Dropbox, and a slew of other rivals. Microsoft and Google are also pricing aggressively.
    • Amazon is also rolling out several new services for mobile developers relying on AWS. They include mobile analytics tools able to deliver usage reports on billions user events, a cross-platform push notification service, and a service (Cognito) for managing user identities/data across platforms. An SDK for connecting apps to AWS is also being launched.
    • Last November, Amazon rolled out AppStream, a service that allows games/apps to be streamed to mobile devices. The latest service launches come as Google tries hard to sell developers on the simplicity/ease-of-use of its cloud platform relative to Amazon’s, which maintains a feature set edge.
    • Amazon’s North American “Other” revenue (mostly AWS) rose 60% Y/Y in Q1 to $1.2B. Synergy Research’s numbers suggest Amazon’s combined IaaS/PaaS share still dwarfs that of rivals.
    • Separately, the FTC has officially announced it’s suing Amazon for billing parents for in-app purchases accidentally made by their kids; the agency settled a similar suit with Apple earlier in 2014. Any payout should amount to a slap on the wrist for a company of Amazon’s size.


  79. Supercharger milestone for Tesla Motors

    Yesterday, 02:02 PM ET · TSLA

    • Tesla Motors (TSLA -1.1%) says it passed the charging milestone of 1GWh in a single month during June.
    • The EV automaker figures that to be the equivalent offset of 168K gallons of gas saved.
    • Tesla forecasts that by end of 2015 at least 98% of the U.S. population will be within 100 miles of a charging station.


  80. TiVo rallies on Canadian deal, positive commentary

    Yesterday, 01:53 PM ET · TIVO

    • Canadian MSO Cogeco Cable is abandoning an in-house IPTV project and will instead roll out a multi-screen TiVo (TIVO +3.4%) DVR/video-streaming solution to its 800K video subs. The rollout is expected to start by March ’15.
    • The deal is TiVo’s first with a Canadian pay-TV provider. Last year, Cogeco’s Atlantic Broadband unit began offering a TiVo-powered service.
    • Brean and Piper are out with bullish notes predicting additional deals. Brean’s Todd Mitchell expects TiVo to “announce further deals with tier-2 U.S. cable companies where it is becoming the de facto standard for TV Everywhere,” and also thinks “a more comprehensive deal with a large European cable company” is possible by September.
    • TiVo added 341K MSO subs in the April quarter, and closed it with 4.54M total subs (3.58M MSO, 957K TiVo-owned). Virgin Media accounts for 2.1M of the MSO subs.


  81. Cantor Fitzgerald: Wait on Whole Foods Market

    Yesterday, 01:06 PM ET · WFM

    • Cantor Fitzgerald thinks Whole Foods Market (WFM -1.6%) needs to peel off some more share price before investors should jump in.
    • The combination of slower growth trends and higher input costs creates some operational challenges which haven’t been fully factored in yet, according to analyst Ajay Jain.
    • Whole Foods Market is down 34.8% YTD and is 42.4% off its 52-week high.


  82. From Bloomberg, Jul 11, 2014, 11:09:04 AM

    Scanning electron micrograph depicting a mass of Yersinia pestis bacteria. Photograph: Rocky Mountain Laboratories/NIAID/NIH

    A Colorado man is infected with the rarest and most fatal form of plague, an airborne version that can be spread through coughing and sneezing.

    To read the entire article, go to http://bloom.bg/W3MDl0

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


  83. Phil

    Hello!

    RIG looking interesting to you again at these levels?

    I have not yet had TOTAL fill of my thirst for off shore oil


  84. From Bloomberg, Jul 11, 2014, 11:13:08 AM

    July 11 (Bloomberg) — U.S. Representative Beto O’Rourke, a Democrat from Texas, talks about immigration policy and border security.
    He speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

    The U.S. House won’t support giving President Barack Obama his full $3.7 billion request to fund the response to the child migrant surge at the U.S.-Mexico border, Appropriations Committee Chairman Hal Rogers said.

    To read the entire article, go to http://bloom.bg/1ts3hJv

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


  85. From Bloomberg, Jul 9, 2014, 2:07:15 PM


    Photographer: Thomas Barwick

    Now should be the perfect time for U.S. workers to ask for a raise.

    To read the entire article, go to http://bloom.bg/1neLDo3

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


  86. From Bloomberg, Jun 26, 2014, 3:50:08 PM

    A customer swipes his credit card as he prepares to fill his truck with fuel at a gas station in Princeton, Illinois, U.S. Photographer: Daniel Acker/Bloomberg

    There’s the official inflation rate. And then there’s the real one.

    To read the entire article, go to http://bloom.bg/TBKPOq

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


  87. From Bloomberg, Jul 11, 2014, 12:00:07 AM

    Julian Knott, an executive director
    of JPMorgan Chase & Co.’s global technology network, fatally
    shot his wife before committing suicide, police said.

    To read the entire article, go to http://bloom.bg/1ncjeKy

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


  88. From Bloomberg, Jul 11, 2014, 11:18:53 AM

    A farmhand adjusts a milking device as dairy cows are milked in a rotary milking parlor at a farm operated by Synlait Milk in the town of Rakaia, New Zealand. Photographer: Brendon O’Hagan/Bloomberg

    A record payout to New Zealand dairy
    farmers last year is setting the stage for a global milk glut
    that Goldman Sachs Group Inc. predicts will last half a decade.

    To read the entire article, go to http://bloom.bg/1mlh28e

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


  89. From Bloomberg, Jul 11, 2014, 11:07:35 AM

    Russia agreed to write off 90
    percent, or almost $32 billion, of Cuba’s Soviet-era debt as
    President Vladimir Putin arrived on the Caribbean island for
    meetings with President Raul Castro and his brother Fidel.

    To read the entire article, go to http://bloom.bg/1mRPxEv

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


  90. From Bloomberg, Jul 11, 2014, 10:47:40 AM

    Oil-field trucks rumble down a beat-up county road in DeWitt County, Texas, in the heart of the Eagle Ford shale formation, in 2013. Photographer: Maria Sprow/Texas Association of Counties

    The road to U.S. energy security is often unpaved.

    To read the entire article, go to http://bloom.bg/1ml5im0

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


  91. From Bloomberg, Jul 11, 2014, 9:08:01 AM


    Cooling towers emit vapor into the night sky at a nuclear power plant in Grohnde, Germany. Photographer: Krisztian Bocsi/Bloomberg

    European pollution permit prices are
    poised to rise as lawmakers work on a proposal to permanently
    cut a record supply in their system.

    To read the entire article, go to http://bloom.bg/1mkZWak

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


  92. From Bloomberg, Jul 11, 2014, 5:26:01 AM

    Staff from a medical aid organisation carry the body of a person at a center for victims of the Ebola virus in Guekedou. More than 510 people out of about 840 infected with the virus have died, a fatality rate of about 61 percent. The WHO said June 26 the outbreak may last another three to four months. Photographer: Seyllou/AFP via Getty Images

    The deadliest outbreak of Ebola
    virus is raging in West Africa, and experimental drugs have
    shown promise in animal tests.

    To read the entire article, go to http://bloom.bg/U614Dz

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


  93. From Bloomberg, Jul 11, 2014, 11:48:25 AM


    Return to sender.                                                                   

    One of the Britain’s most capable officials is under fire after a parliamentary review of the U.K. government’s sale of Royal Mail Plc decided he screwed up. Those accusing fingers, though, should be pointed at the banks who advised on the privatization, rather than the government’s business secretary, Vincent Cable. Moreover, they should be made to hand back at least part of the 10.3 million pounds ($17.6 million) they earned in fees for mismanaging the sale.

    To read the entire article, go to http://bv.ms/1jjT2CK

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


  94. From Bloomberg, Jul 11, 2014, 11:37:38 AM

    Adding more flags doesn’t make things more constitutional.

    One of the most appealing features of modern conservative thought is its insistence on fidelity to the Constitution. Whether or not we endorse “strict construction,” or the claim that the Constitution means what it originally meant, it is certainly honorable to emphasize that public officials are bound by our founding document. How odd, then, that prominent conservatives have been embracing Speaker John Boehner’s proposed lawsuit by the House of Representatives against President Barack Obama — an idea that reflects a stunningly cavalier approach to the Constitution.

    To read the entire article, go to http://bv.ms/1jjRiJy

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


  95. From Bloomberg, Jul 11, 2014, 10:18:51 AM

    My morning train reads:

    To read the entire article, go to http://bv.ms/1jxTUUG

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


  96. From Bloomberg, Jul 11, 2014, 9:00:13 AM

    Oh for the good old days, when everyone just met here.

    It’s sort of a miracle that anyone trades stocks on U.S. stock exchanges. Basic economic theory tells you that it should be impossible. It’s a simple agency cost problem. If you want to trade stocks, you go to a broker and give him an order. The broker takes your order to a trading venue. Different trading venues pay the broker different amounts of money for different orders. The broker wants to maximize his money, so he sends each order to the venue that pays the most (or costs the least). Simplistically, market orders to trade at current market prices go to dark venues, which will pay the broker for them, or at least execute them for free.1 Limit orders that are away from the market price go to stock exchanges, which will pay the broker for them (but which charge brokers to execute market orders). So the only orders that go to public stock markets are the ones that can’t trade. So there’s no trading. Oops!

    To read the entire article, go to http://bv.ms/1jxE3W8

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


  97. From Bloomberg, Jul 11, 2014, 8:22:23 AM

    I predicted this too (even though I know little about weather).                      

    When was the last time anyone got good investing advice from the front page of a newspaper or magazine or from a television pundit?

    To read the entire article, go to http://bv.ms/1jxx3IY

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


  98. From Bloomberg, Jul 11, 2014, 2:26:14 AM


    July 11 (Bloomberg) — Steve Barrow, head of Group-of-10 research at Standard Bank Plc, talks about the outlook for the yen and Bank of Japan Governor Haruhiko Kuroda’s impact on currency markets.
    He spoke yesterday in London with Bloomberg’s Niki O’Callaghan. (Source: Bloomberg)

    Japan is missing out on the spoils
    of victory from fighting a currency war.

    To read the entire article, go to http://bloom.bg/1q32LAt

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


  99. OK, all caught up on my reading now.  

    $101.25 finally bounced on oil, now we'll see how much but drop from $107 but $102 was our true bottom and $101 is 20% overshoot so nothing surprising so far but very bad for oil if $101 fails.  

    Perry/Rustle – Wow, the Governor of Texas accuses the Government of a massive conspiracy?  What a loon!!! 

    "We either have an incredibly inept administration, or they're in on this somehow or another," Perry had said Sunday on ABC's "This Week." "I mean I hate to be conspiratorial, but I mean how do you move that many people from Central America across Mexico and then into the United States without there being a fairly coordinated effort?"

    Oh well, now that Jesse Ventura is gone, I guess someone has to wear the tin-foil hat.  

    Oil/Scott – Well, once we're at $101.50 from $107, even if we get to $100 a 20% weak bounce takes us back to $101.50 so I'd say no real point in playing here until it fails off a bounce – especially into the weekend.  

    And what JPH said! 

    Gang of 3/1020 – Very encouraging as Shelly is a major GOP donor.  

    TNA/JPH – I'm not looking for more than 1,160 on /TF

    TASR/Lunar – But the stock price doesn't matter.  You are promising to buy it for net $10 so, if assigned, ordinary margin would be $5 per share.  Since you are getting paid $1.65 for the promise (short contract), of course they take $1.65 off the $5 and that makes the margin $3.35 per contract(ish).  What I'm saying is they are giving you terrible margin rates.  Something to be aware of but no big deal if you don't want to be leveraged anyway. 

    RIG/Maya – I love it that you always keep your eye on blue-chip bargains!  Interestingly, RIG is already on my screen as I was looking at it earlier today for a possible call.  I decided that, with oil crashing and possibly the indexes too, we might do better the the 50 dma at $43, though I think it's a long-term excellent price.  The 200 dma is $44 so tight range and happy to go bullish if it breaks over but, until then, I'd rather wait and see if we can re-test $40 first.  

    AAPL struggling to hold $95, not good for Nas if it fails (/NQ @ 3,885).


  100. TNA

    I'm playing for the bounce if we fall on TNA to the 200 DMA.  TradeMonster is telling me @ 72.59 on TNA (200 DMA), the position will be priced at $1.96 for the contract.  Rather than aiming for the absolute bottom, I figured I'd pick it up a little early.  However, I don't think the trade is going to execute because I don't think we'll get that low today.


  101. Phil – Continue to hold onto the SCO's in Oct?  IB shows the spread up 218% for me.  Since SCO will decay, and we got our big move down, continue to hold?

     The mid right now is 2.25 on the spread out of a possible max value of 4.

    The spread is now 100% ITM, but only a bit more than 50% of max value.


  102. Phil/RIG

    well, it DID break over its 200d at 44 a couple of weeks ago, but then fell back….

    So, while I would also rather get in again at 40, if it goes over 44, there is no guarantee that it STAYS over 44

    (a lot of work…this blue chip watching!!)

    Thanks


  103. TNA/JPH – Sensible approach.  

    SCO/Burr – Well, now it's a 50/50 risk so are we more than 50% sure that oil will be below $102 in Sept?  I'm comfortable with that.  I'd want to see at least strong bounce lines taken on the indexes before I dump a perfectly good trade in progress.  I know making 218% in a month means it's greedy to wait 3 more months for another 200% but it also means we can stop out at 150% without feeling too bad about it, right?  

    Also, don't forget, we took profits on USO and our Futures BECAUSE we had that long-term $8,000 from SCO coming to us if oil kept going down.  Kind of ruins the point if we now take $4,000 and run…

    RIG/Maya – That's why "watch and wait" is my default setting.  We got a test at $40, went to $46 and now $43 – we may never see $40 again but I'd at least like to see $44 prove it can hold up first (and not for one day).  

    Oil testing $101 now – lovin' those SCOs!  


  104. Phil

     

    FAS I sold the July 95 calls good time to roll  ?

    Thanks


  105. BFD … Now the sports world can obsess on something else …

    LeBron James announces return to Cleveland Cavaliers – SI.com


  106. I haven't lost a nickle shorting Tesla yet, after almost a dozen dice throws.  I have to wonder who could possibly be taking the other end of these trades,  and with what hypothesis? I don't know why I bother trading anything else.


  107. FAS/QC – That's in the STP and FAS is $99.17 and we sold the July $95s for $5.60 and they are now $4.80 but just $4.17 in the money so a 20% premium.  Are we 80% sure FAS will be higher next week and, even if we are – we're only going to be selling another August call anyway so what's the advantage to trading in 0.60 x 10 contracts ($600) of premium that will ABSOLUTELY expire in 7 days for, let's say, doing an even roll to the Aug $97s which have 5x more time to expiration?  Is that really worth paying a $600 premium for?  Especially since we haven't even sold any offsetting puts since the trade has never really been in trouble…

    TSLA/ZZ – Fortunately, there's one born every minute.  


  108. Phil

    Thanks for the cold water   Its good to  think 


  109. Phil

    Sorry if I missed this from an earlier post, just trying to check in during a busy day.  Where do we stand with yesterday's TLT trade ( July 115 puts) ? Are we holding through the weekend?

    Thanks!


  110. BDC was getting killed by CORN… Looks like a bottom is not near:

    http://www.ft.com/intl/cms/s/0/4314dd92-0863-11e4-9380-00144feab7de.html#axzz37BUmzsCa

    The prospect of a colossal 1bn-tonne global corn crop has sent the price of the grain below $4 per bushel for the first time in almost four years.

    Reports of near-perfect conditions in the US corn belt and favourable weather from Ukraine to China have pounded bulls in agricultural markets in recent weeks. Farmers’ incomes, tractor sales and land prices could be hit.


  111. Good trading articles – 5 ways to fail at trading:

    http://adamhgrimes.com/blog/five-ways-to-fail-at-trading/

    1. Trade too big.
    2. Use a methodology that does not work. 
    3. Change methodologies constantly. 
    4. Misunderstanding how trading works.
    5. Be overconfident.


  112. Quote of the day:

    Joshua Brown, “If no one believed that anything could ever go wrong, asset prices would be permanently bid up to levels from which no gains could be reasonably expected in the future.”  (The Reformed Broker)


  113. What to do when valuations are too high:

    http://alephblog.com/2014/07/10/what-to-do-when-valuations-are-high/

    • Cash is presently 16% of my portfolio.  I let that fluctuate between 0-20%.  I try to be fully invested during crises, and build up some cash when valuations are extended.  16% means valuations are high, but they could get higher — we aren’t at nosebleed levels.
    • I have more invested in foreign companies than I normally do.  Around 40% of the portfolio is in foreign companies, which are at present undervalued relative to similar US companies.
    • Emphasize companies with strong balance sheets, in industries that will not go away.
    • I own cheap stocks.  The median valuation of the stocks that I own is around 10x earnings, and 1x Net Worth (Book Value).

  114. Love the CNBC show the Profit.  The guy who created, produces and stars in it, Marcus Lemonis decided to bail Crumbs out and turn it around.  The stock has gone from .02 to almost .70 in two days.  That was a good trade missed.


  115. NFLX – here's a fun putterfly to fire and forget – bot 25 DEC 500 flies for .10, $250 makes you $12K if they pump it to a round number for year end.  NOTE: This is more of a lottery ticket than a 'trade' :) .


  116. You're welcome, QC.  

    TLT/Jeff – Those fell pretty hard.  They weren't for a portfolio, just figured they could make a quick 20% but only up 10% on yesterday's move and now down 20% at $1.60.  At this point, I'd give them the weekend as you can see this pattern is not too different than the other peaks so far:

    Of course, if the market really tanks, then money will flow to TLT, making it a bad trade so make sure you know the risks of holding these with just a week to go.  

    CORN/StJ – Totally broken now, I think.  People overplanted on high Futures pricing (always happens) and now bumper crop crushes them.  Also, soda companies moving away from corn syrup and cars moving away from ethanol is a fatal combination for corn.  

    Grimes/StJ – Those are ways to fail at anything. The Brown quote, however, concerns me.  Just because you KNOW nothing will ever go wrong, doesn't mean you immediately price something for it's maximum growth – that makes no sense at all.  At any given point, you pay for a return on your capital so if Steves Jobs and Woz come out of their garage in 1977 and lay out a bullet-proof 40-year plan that gets them to $40Bn in annual profits – would I give them $600Bn then?  That would be a TERRIBLE use of my capital because, even if we assume a smooth curve higher and flawless execution, my 40-year return would be only $800Bn – 1.25% of simple interest.  Shame on Josh for not understanding that.

    This is why the market will eventually collapse in a spectacular fashion – even people who are supposed to know better don't understand basic valuation metrics .

    Aleph/StJ – So HE knows valuations are not too high BECAUSE HE's only at 16% cash?  Man, it is getting very scary out there.  In 2007/8 I had more faith in the values than I do now.  People have just gone mental.

    CRMB/Rustle – Hell, I would have tossed $500 at them at .02 – why not?  At least they had a brand they could sell.  Still, it's a silly business – selling $1 per bite cupcakes.  Meanwhile, he is a tremendous dick.  There was a show where he was going to "help" a woman with her popcorn business and it's an all cash business, so of course she's skimming and of course she doesn't want to talk about it on TV but he suddenly turns it into a sting operation, screws her completely over (IRS will be knocking) and then withdraws his investment.  

    You can say, "sure she shouldn't be skimming" but what small business owner with a cash business has squeeky-clean books?  He never even proved anything, just layered assumptions on top of assumptions to make her look terrible.  I wouldn't be surprised if he destroyed the poor woman's business and bankrupted her family. 

    Oh jeeze, I'm right, she lost her Disney business already according to Yelp.  

    NFLX/MrM – You said it with "lottery ticket" – that's threading a very tight needle.  

    Markets  holding it together fairly well at 2:40 – better than yesterday but still just consolidating WITHOUT a strong bounce – not a good sign.  


  117. Adding to agricultural prices, potatoes have dropped to about 1/2 of last year, Idaho claims prices are now below cost. Depends on do you believe farmers? 50% is a big drop.


  118. Does that mean I can sell calls on CORN?


  119. Phil /follow

    TZAs over the weekend ?


  120. zeroxzero

    Please be careful, we are a way from crops harvested and the bumper crops. Somehow I feel this is driven down too far with wet weather.


  121. Phil / Lottery - so true, but better odds than at the 7-11, I just need GS or Cramer to pick the same target as me and I'm golden.


  122. Remember when farmers were getting and paying record prices for land 2 years ago – now that bubble is bursting as the Ag boom fades out and then the banks start losing money again and the circle of strife continues. 

    CORN/ZZ – I don't mess with Ags, a bit late now.  They can go back to mandating more ethanol in cars to bail out the farmers and then you'd be screwed. 

    I think Sugar should do well going forward.  People are moving away from artificial sweeteners and my buddy Muhtar Kent and I had this conversation a few years ago and he said there simply isn't enough sugar in the world for KO to use it in North America.  Pepsi already has 2 sugar brands that are doing very well and Mexican Coke (my favorite sugar fix) is very popular – even though 4x the price.  So I think there will be a tipping point at which another 2 or 3 items go sugar and suddenly we'll have a shortage and a spike.  

    Again, I'm no fan of Ags but $SUGAR is 0.17, which is the low end of the long-term range.  Seems like a good one to take a stab at.  SGG is the ETF and seems to track it pretty well.  Now $51.57, you can sell Feb $50 puts for  $2.50 and buy the $52/56 bull call spread for $2 for a .50 credit on the $4 spread that's $1.57 in the money to start.  If no one announces a new sugar drink during earnings this quarter – just bag the trade…

    TZA/Wombat – I'm kind of banking on Merger Monday to hold us up but certainly you'd better have SOME kind of covers.  We've got plenty in the STP (up another $4,000 today at 12.3%), so I'm not going to add an official one but, as noted above, QQQ is a good way to go as that 3,900 line is hanging tough on /NQ, so for a weekend cover, I kind of like the QQQ Aug $94 puts for $1.03.  The delta is .38 so a 1% gain in the Nas would cost you 35%ish but the same drop would put you in the money and pay very nicely on the way down.  

    Lottery/MrM – Hey, it's certainly fun and a huge winner if you hit it.  You have hit a few, right?  


  123. StJ/Trading Rules

    We could do than worse than ask all those members who have held a PSW full subscription for longer than 1 year.  One would think that survivorship bias would suggest the remaining members that are currently on PSW are likely to consider themselves to be ‘successful’. There is only so much ‘leergeld’ (a wonderful dutch phrase) that one can afford. Those who left presumably went onto perceived greener pastures to be found amongst the plethora of other stock newsletter writers.

    So inevitably, as a collective we risk to be classified as prone to groupthink beholden to the ideas of our beloved leader. Far from being a case of ‘Stockholm syndrome’ – I am a more than willing participant, and all the better for being so. So with that preamble here are my trading rules:

    1. Copy Phil’s trade ideas – particularly the ones with quotes, but there are some gems hidden away in between the news articles :)

    2. If I do not copy Phil’s trade ideas and I see that Phil was too early on his call, reconsider point 1 (most members have figured this out already).

    3. If I think I have some of my own ideas (inevitably a simple concept replication of a previous Phil idea), and after lying down for a while to give time for the feeling to pass, and they still seem like a good idea to me, enter the trade.

    4. If trades from point 3 go awry, ask Phil for advice to extricate myself from financial embarrassment. Then return to point 1.

    5. At the end of the day, I thank the Lord above that I joined this board at Dow 7,000 rather than Dow 17,000. As the wise man said; “it takes money to make money”.

    I have concluded that my expensive library of trading books that run the gamut from ‘Options for Dummies’ to the ‘Zen Masters guide to Options Trading fulfillment’ are largely worthless.

    I’m in a long term relationship with Phil; I can’t live without him, although it is sometimes difficult to live with him!!!!!

    God Bless Him. He’s a living, breathing, one man Trading Rule.


  124. Rolling next weeks SPY 198 Cs one more week for 33c net debit.  Come on baby…zoom zoom.  DD as well. 


  125. Mr Mocha.  What are the legs of the fly?  Never did a butterfly before, going to through it in the paper account to watch and learn.


  126. Burr: NFLX December 495/500/505 Puts 1:2:1 ratio.  10c debit. 


  127. XOM, CVX/Phil – both down today.. something turning?


  128. DOW reached 17000, NASDQ reached 4400, now SPX needs to also reach 2000, then, then, then, we will have our TRIFECTA….


  129. Hi by the way….t'is been a few days. I have been lurking, but in meetings and in the lab (YIKES!!)..l…


  130. Phil / flies - I'm above even on the putterflies but nothing to brag about, I only do momos and I hit about 1 in 10 ITM, so making a few $K on one pays for the next dozen or two, making it a cheap adventure.  Once I get a system developed with better payout I'll post it, it's a yearlong project.


  131. Thanks, Shadow, I'm out.

     

     Hey, what's up with the metals?  Silver / gold just rocking. I've got 'em, but I have no investment rationale — it's not as if QE was just initiated, and I'm not seeing any signs of inflation.  Refuge from an overvalued stock market?  The dollar's not dropping, either.


  132. Pharm, I'm bleeding to death on CRIS, ISCO, and PLX this yearhow's the rest of your bio portfolio holding up?


  133. You know a Democrat must be in charge when:  U.S. posts $70.5B June budget SURPLUS
    • The U.S. Treasury budget posted a $70.5B surplus for June, as receipts rose 13% to $323B vs. the same month a year ago; spending rose 49% to $253B.
    • Including the June surplus, the budget deficit for the first nine months of FY 2014 totaled $366B, down 28% from the same period a year ago and the smallest YTD budget deficit since 2008.
    • YTD, total budget receipts are up 8% to $2.258T while spending is up 1% to $2.264T.

    Uh-oh, running out of fake profits!  The big threat to Wells Fargo profit streak: loan loss reserves

    • Wells Fargo (WFC -0.6%) CFO John Shrewsberry warns investors in the bank's earnings conference call that loan loss reserves – an important source of profits for WFC and other banks as credit quality has improved over the past four years – will dwindle, as WFC expects to release reserves at a lower rate going forward.
    • WFC reported a slight gain in profits for Q2 yet revenue slipped, as did its net interest margin; if the trend continues, it will become more difficult without the release of reserves to keep growing earnings and maintain its 16-quarter streak of higher profits.
    • In the call, one analyst said he guessed that “Wall Street will be somewhat shocked” when the reserve releases and the ensuing profit boost evaporate.

    And running out of fake cities to power!  First Solar reportedly abandons plans for Chinese plant

    • First Solar (FSLR -0.3%) is reportedly abandoning its effort to build a 2GW solar plant in the Chinese city of Ordos, following years of talks.
    • The company signed an MOU with the Chinese government in 2009 to build the plant. Two years later, it signed an MOU with Guangdong Nuclear to help develop the project.
    • For reference, First Solar estimated it had 12.2GW of potential booking opportunities at the end of Q1. Shares briefly dipped due to the report, but have bounced back.
    • The 2014 World Cup has delivered smashing ratings reports for ESPN, Univision, and ABC – but has also exposed a weakness in the TV Everywhere platform for coverage of live events, reports GigaOm.
    • The complicated process to transcode video feeds into a content delivery network can create a delay of up to 20 seconds – plenty of time for spoilers to crop up for viewers through their online feeds, mobile devices, or nearby friends.
    • Though the delay isn't considered a big enough complication to derail TV Everywhere, it's another annoyance for viewers already frustrated with the authentication process.
    • Related stocks: DISHDTVCHTRCVCTWCCMCSADISCACBSVZ.
    • The Nikkei reports SoftBank (SFTBF) is close to a deal for a Sprint (S +4.4%)/T-Mobile (TMUS+1.9%) merger. Shares of both companies have moved higher.
    • Reuters reported 3 weeks ago Sprint and T-Mobile were looking to announce a deal around August, and that the former had lined up a $40B+ debt package. Prior reports mentioned a ~$40/share T-Mobile acquisition price and a $2B breakup fee.
    • T-Mobile is still below $34, as doubts about regulatory support for a deal remain high.
    • Prior Sprint/T-Mobile coverage
    • Kim Kardashian: Hollywood might be Glu Mobile's (GLUU +8.4%) "biggest game of the year,"says CEO Niccolo de Masi during a Bloomberg interview. "Kim is a one-of-a-kind talent with an incredibly precise fit to the game engine that we tailored but already had in the company," he adds, apparently with a straight face.
    • Bloomberg notes Cowen believes the game could produce $200M in annual revenue. Even if that figure includes Apple/Google's 30% cut, achieving it would spell a windfall for Glu, which currently has a 2014 revenue consensus of $160.9M.
    • The game is still #2 and #5 on App Annie's lists for the top free and grossing U.S. iPhone apps. It's #23 and #20 on comparable Google Play rankings. Users have given it a rating of 5/5 on the App Store, and 4.3/5 on Google Play.
    • Yahoo's (YHOO +0.4%) Marissa Mayer and AOL's (AOL -0.1%) Tim Armstrong "talked over drinks into the wee hours Thursday night" at the Sun Valley media conference, the WSJ reports.
    • The paper doesn't have details on what the CEOs discussed. The talk is noteworthy in light of widespread speculation Yahoo will bid for AOL using a part of the giant windfall it stands to receive from selling a portion of its 22.6% Alibaba stake at IPO time.
    • AOL has a slew of online media and ad network/tech assets that could appeal to Yahoo, and currently trades at just 1.3x 2014E sales. With the notable exception of Tumblr, Yahoo's acquisitions during the Mayer era have generally been smaller purchases meant to reel in technology and/or engineering talent.
    • Yesterday: Alibaba's IPO process could start at month's end
    • Citing production challenges, KGI's Ming-Chi Kuo now thinks the start of iWatch (AAPL +0.1%) mass-production won't happen until mid/late-November. He forecasts just 3M 2014 shipments.
    • Kuo also backs up past reports stating the iWatch will sport sapphire cover glass and a flexible OLED display, and adds the device will be waterproof. As 9to5 Mac notes, Kuo has a mixed track record for predicting product launch dates, but has a better record when it comes to predicting product specs.
    • Reuters reported in June the iWatch will enter mass-production in July. The WSJ followed up by reporting two models are on tap, and that they'll have "more than 10 sensors to track and monitor health and fitness data." The paper suggested mass-production would start in the Aug./Sep. timeframe.
    • China's state-owned CCTV has called the iPhone a threat to national security due to the ability of its Frequent Locations feature to track users. The criticism comes amid NSA-related tensions, and shortly after the Chinese government ordered local carriers to slash their subsidies for the iPhone and other high-end devices.
    • Last year, Chinese media and a government agency criticized Apple for its repair/warranty policies. The criticism ended after Tim Cook issued an apology and announced policy changes.
    • Ahead of Apple's July 22 FQ3 report, Canaccord's Mike Walkley has upped his PT by $10 to $112, and respectively hiked his FY14 and FY15 iPhone sales forecasts by 4M and 10M to 170M and 197M.
    • Though believing near-term iPhone sales have been hurt by iPhone 6 anticipation, Walkley is very upbeat about pent-up demand for bigger iPhones. He now sees Apple's iPhone ASP rising $51 in FY15 to $652.

  134. zero – the metals are all about technicals right now, they are painting inverse H&S, breaking out of channels, and other patterns, check out http://blog.kimblechartingsolutions.com/ and search for 'gold' to see some of the rationale.  This is why scottmi and I were pounding the table about SLW back around 20.


  135. MrM – um.  Along with SGEN…those are my portfolio, and bleeding is not the right word.   Let's just say I have DD on them all.  Biotechs in general are WAY overdone, hence my slowdown in recommendations as I feel it is 2009 all over again for them.  2010-2013 was great.  2014 and 2015 are going to be tough IMHO.


  136. Phil / QQQ
    Perhaps its just because you've hammered it into me for so long, but I'm not comfortable just buying puts. What about an bear put spread Aug 90/94 for .70 ? That way I'd make half back if it just stays still and I could roll out ?


  137. ZXZ

    Here is another crop tidbit, winter wheat is very likely a bumper crop as they already had enough water east of divide north. Could suck for west divide dry farm summer wheat, too hot and dry. No idea how they divide wheat.


  138. EPZM is my one bright spot, as it was ~ 21 when I wrote about it, but it is far less than the loss of all those noted ….


  139. Huge FB reversal. Stock should go back up to test the $68 mark….


  140. Pharm // GILD
    Hey – welcome back. I've been stripping my port but GILD is one I haven't let go and DD. I've researching the Senate investigation into Solvadi pricing but I don't think theres shit they can about it and the forecasts are pretty impressive. I guess you can do that without any competition ; > Do you have a differing opinion – it's not my space >>

    Thanks


  141. SUNE – speaking of technicals, to me it looks like it's breaking north of a channel it's been in for a year, anyone else care to weigh in on this?  This week I've been accumulating the OCT 24/28 BCS for $1.25-1.50, FYI.


  142. GILD/wombat – they should be fine.  I would not worry about them.  One thing in their pipeline is a LOXL2 mAb that should start to read out over the next year or so (all Phase 2 trials).  The mAb is for fibrosis and IF it is positive or smells positive, GILD will be $150 in a flash.  ITMN may take a hit then…..BMY bought my old company for the same indications, and IF they hit….both will go down.  BMY is 2-3 yrs out though.


  143. Interesting Bloomberg article on the reduction of Hedging Crude

     

    http://www.bloomberg.com/news/2014-07-10/bank-commodity-exodus-seen-cutting-long-term-oil-hedging.html


  144. Pharm // Thanks

    Winston // Second.

     


  145. LOL Winston – good rules!  cheeky

    XOM, CVX/Scott – Maybe something to do with the fact that the stuff they sell is down more than 5% for the month….  I do like them both for shorts – especially if oil fails $100.  CVX Aug $125 puts very reasonable at $1.35 and XOM Aug $105/100 bear put spread is more conservative at $3.20 with XOM at $101.70 so no premium and $1.80 upside potential (56%) if XOM doesn't hold $100.  

    Of course if they each drop $5, that's 80 Dow points, which brings us back to DXD!  

    Meetings/Pharm – Be careful, that's starting to sound like a job!  

    Flies/MrM – Hey, getting a free education has value in itself.  

    Metals/ZZ – This insane global money-printing had to spill over at some point.  That's why it was AAPL, ABX and SLW as our 3 main picks for 2014.  Goes back to the old bathtub example, the Central Banksters filled the Tub with $30Tn since the crisis so $5Tn a year/$400Bn a month and they are still going and it's not a problem if your tub was $30Tn from being full.  So, for those of us waiting outside the tub for inflation to kick in (trickle down) - nothing happens and nothing happens and the Fed puts another Trillion in and nothing happens and Draghi puts $1Tn in and nothing happens and Abe puts $1Tn in and nothing happens….

    Suddenly though, in a way that is not obvious to us (because we are outside the tub well below the top .001% line), the tub is full and, SUDDENLY, the next $400Bn that pours into the tub spills right out and we are suddenly soaked in inflation. That keeps going until they tun off the spigots – which takes a long time to unwind – that's why it's inevitable that they overshoot – by the time you see the inflation, it's too late to stop it.  

    QQQ/Wombat – That's a different kind of hedge though, because you won't be able to take advantage of a quick dip.  If I were going to go with a hedge like that, I'd rather go SQQQ ($41.23) Aug $40/44 bull call spread at $1.65 (almost no premium, net 30 delta) and consider selling something I REALLY want to own as an offset, like TASR 2016 $10 puts.  

    Woops, that's the bell already – have a great weekend folks!  

    - Phil


  146. ABX sure is looking a lot better!


  147. Crude/Chuck – That should make things interesting.  

    ABX/Palotay – Very nice (finally):


  148. Phil // Something
    must be rubbing off. Thats exactly what I did last week LOL

    SQQQ ($41.23) Aug $40/44 bull call spread at $1.65 (almost no premium, net 30 delta) and consider selling something I REALLY want to own as an offset, like TASR 2016 $10 puts.  


  149. hey guys
    I'm at home sick, so it may be my fever, but i just put in a GTC order on Phils QQQ puts ( after market close ) and they filled !!
    Am I missing something ?


  150. Budget Surplus / Phil – That can't be right, we have increased taxes, not cut them! How can there be a surplus. It goes against every ideological canons…


  151. ahhhhhhh. just got off the phone with TOS because of another problem ( ex friday )
    you can trade anything that marks or follows an idea 15 minutes after close
    never never never heard that before

    learn something new every day.


  152. idea = index 


  153. Just a quick comment about Limonis and the woman with the popcorn business you mentioned earlier. Forget about whether or not she should be skimming, wha


  154. Sorry, fat finger hit send too soon. What I wanted to say was what was that woman with the popcorn business thinking when she agreed to put herself on TV and let that guy look at her books? If you are doing something illegal, you don't invite TV cameras in. 


  155. Rick Perry's paradise:

    http://talkingpointsmemo.com/cafe/medicaid-obstruction-is-still-hurting-america-especially-texas

    Consider the Lone Star state, home to the highest uninsured rate in the country. According to data released by the U.S. Census Bureau’s Current Population Survey, nearly one in four Texans lacks health insurance coverage. According to the Urban Institute’s recent county-by-county estimation, Governor Rick Perry and the Texas state legislature had the opportunity to turn that troubling statistic around by accepting funding to expand Medicaid coverage for 1.3 million low-income adults. They rejected it. [...]

    Governor Perry’s expressed position is that “Medicaid is driving our national over a fiscal cliff.” But the opposite is true. Lack of access to insurance hurts family finances. Illness can cause workers to lose productive years. Undiagnosed or delayed diagnosis of preventable illness can raise the cost of treatment by many thousands of dollars. And workers who lose income due to health problems pay less in taxes and are not able to provide for their families.

    Nationwide, more than 1 million people would be free from financial hardship, 1.4 million would have reliable access to clinic care, 651,000 people would receive needed care, and preventive care would be available for free for hundreds of thousands.

    On top of that, Medicaid expansion under the Affordable Care Act would generate nearly 71,500 jobs in Texas in 2014, rising to 231,100 jobs in 2016. Many of these jobs would be in health care, an industry that pays well and provides good job security and benefits, including health insurance.


  156. Hey guys, it's summer time and I'm gonna do some traveling. I'll see you all soon. Good luck with investing. Wheee GOLD! Finally!! :)


  157. Phil, you have any insight into the difference between LINE and LINCO? I have about 30k in line for the div.
    Should I be in line or linco?