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Meaningless Monday – Waiting for Yellen to Testify Tomorrow

We're got our strong bounces on Friday – now we'll see if they hold up! .  

As you can see from our big chart, we still have Spitting Cobra patterns forming on all but the Russell, which has turned into a Vomiting Cobra, spilling all the way down to the 50 dma at 1,150.  We're still below the Weak Bounce Line on the NYSE – so we'll watch that closely and the Russell needs to get over their Strong Bounce at 1,170 to confirm:  

  • 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

SPX WEEKLYAlso key, of course, is the 3 of 5 red signals on our Must Hold line on our Big Chart™ - only the NYSE is likely to make it over today, with a 64-point move (0.5%) taking it back to 11,000 – certainly that's not asking too much before we flip to some more bullish betting, is it?  

We still have 29 stocks on our Buy List (Members Only) and, since they dynamically update, it's very easy to see that about 1/2 of them haven't gotten away yet and are still playable for dip buying.  We also have 29 more stocks from our old Long-Term Portfolio, which we liquidated on May 29th – and that is full of great trade ideas as well.  

We just did Week 4 for our our May Trade Review over the weekend and we slipped to 73% that week (ending 5/23) which brought us down to 84% for the month with 158 out of 197 trade ideas on the winning side.  Still, going from 125-17 to 158-29 was an early indicator that we were losing our feel for the direction of the market – which led to us taking the money and running into the holiday weekend.  

Our Long-Term Portfolio was up 19% for the year when we cashed it in and we're still up 19% after re-deploying $200,000 of our $1M in margin ($500,000 Virtual Portfolio) on new trades for the 2nd half.  

7-11-2014 5-59-36 PM buybacksWe still have 80% of our buying power and 100% of our cash on the sidelines (because we sell premium to BE THE HOUSE – Not the Gambler™).  On the other hand, our generally bearish Short-Term Portfolio is UP 10% since the end of May – even though the S&P is up 50 points.

That tells us that things may not be as they seem and that's made pretty clear by the dramatic pullback in companies buying their own stock.  As you can see from this chart (thanks Dave) - the last time we had a pullback like this it was a very good indicator of a pending market crash but who, in the summer of 2008, would have believed that?  

Two months of dramatically lower buybacks also tells us that it won't be so easy for those companies to beat on EPS down the road because they are no longer decreasing the S that the Es are divided by – that's how these things turn into self-fulfilling prophecies.  

Speaking of ways to manipulate stocks – there was a fantastic article by Matt Levine that lays out how CYNK and other penny stocks are able to manipulate their prices.  I don't say this often but you MUST read this article or you are missing a huge portion of your market education!  

While it's very clear that closely held companies like CYNK are manipulated, why do you find it hard to see how stocks like TSLA are manipulated?  According to Yahoo, 68% of TSLA's shares are held by Institutions and 35% are held by Insiders and yes, that's more than 100% because of naked shorting that goes on in even the biggest of stocks.  So, if you are a retail shareholder who happens to own TSLA – it's an accident and your actions buying and selling the stock matter as little as the price of gas does to a Tesla driver.  

When you buy stock in an IPO, like AliBaba - which is coming up, you are VOLUNTARILY getting into a situation where just 10% of the stock is actually floated while the rest is held by insiders and the Banksters who took them public.  You are every bit as much a sucker as the people buying penny stocks.  You may do well, but only if it suits the goals of the people who really control the action.  

As I mentioned above, today's action will be meaningless and Friday's gains on 54M SPY shares traded (1/2 normal volume) was meaningless so we will watch and wait patiently for Ms. Yellen's Senate Testimony tomorrow morning.  THAT will have some meaning.  Here's StJ's chart for the week ahead:

Plenty of data to chew on, once the week gets started.  Until then – be careful!

150785 600 Emergency Immigration Funding cartoons

 


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  1. Whiting to acquire Kodiak

    01:44 AM ET · WLL

    • Whiting Petroleum (WLL) will acquire Kodiak Oil & Gas (KOG) creating North Dakota’s largest Bakken shale producer. During the first quarter, total combined output of the two companies was more than 107k barrels of oil per day from the Bakken/Three Forks formations.
    • The deal is valued at $6B, including $3.8B in stock and $2.2B in net debt, and is expected to close in Q4. Kodiak shareholders will receive 0.177 share of Whiting stock for each share of Kodiak common stock they own.
    • “It’s going to allow our production at the combined company to grow faster than Whiting standalone did before,” says Whiting CEO James Volker. “The combined company will have greater access to capital which will accelerate development of oil production.”


  2. DreamWorks Animation pinched by downgrade

    07:11 AM ET

    • B. Riley downgrades DreamWorks Animation to a Neutral rating from Buy.
    • The investment firm thinks meaningful short-term catalysts from the studio will be missing.
    • A price target of $25 on DreamWorks is set by B. Riley.
    • DWA -1.1% premarket


  3. Alcoa signs $1.1B supply deal with Pratt & Whitney

    07:24 AM ET · AA

    • Alcoa (NYSE:AA) signs a 10-year, $1.1B deal to supply engine parts to United Technologies’ (NYSE:UTX) Pratt & Whitney unit, including forging for aluminum fan blades for jet engines.
    • The agreement gives AA a key role on Pratt’s new PW1100G geared turbofan engine as well as other commercial and military turbines; more than 5K of the more fuel efficient PW1000Gs have been sold even before aircraft using the engine enter service from next year.
    • The PW1000G’s architecture, which allows the fan to rotate more slowly than on other aircraft, opened the door to the application of advanced aluminum alloys that offer price and weight advantages over titanium designs, Alcoa CEO Klaus Kleinfeld says.


  4. Swiss firm to snap up Russell Stover Candies

    07:31 AM ET

    • Lindt & Sprungli closes in on a deal to buy Russell Stover Candies.
    • The Swiss company already has a chocolate property in the U.S. through its ownership of Ghiradelli Chocolate Company.
    • Terms for the proposed deal haven’t been disclosed.


  5. GE Aviation expects $30B of orders at air show

    07:38 AM ET · GE

    • Engine maker GE (NYSE:GE) is expecting $30B worth of orders at the Farnborough Airshow between its operations GE Aviation and CFM International, a joint venture between itself and Safran (OTCMKTS:SAFRF).
    • CEO of GE Aviation David Joyce also commented on Airbus’ decision to order its A330neo engines through rival Rolls-Royce, stating that it was the right move and it would not have made sense financially for GE to supply the engines.


  6. Home Depot to sell MakerBot 3D printer in select stores

    07:41 AM ET · HD

    • Home Depot (NYSE:HD) says it plans to sell 3-D printers made by Stratasys (NASDAQ:SSYS) in stores in 12 different markets as part of a pilot program.
    • The company has already been selling the MakerBot 3D printer from Stratasys on its website.


  7. Citigroup confirms $7B settlement with DoJ over RMBS case

    07:56 AM ET · C

    • Citigroup (NYSE:C) +1.2% premarket after confirming it reached a $7B settlement with the Justice Department in the U.S. government’s investigation into mortgage-backed securities the bank sold in the run-up to the 2008 financial crisis.
    • The figure was more that twice what many analysts expected earlier this year but less than the $12B the government had sought originally.
    • Citi will pay a $4B civil penalty to the DoJ, plus $500M to the FDIC and several states, and will spend $2.5B on “consumer relief.”
    • Citi says it will take a related pre-tax charge of ~$3.8B in Q2; the bank will report Q2 earnings shortly.


  8. Slower pace of lawsuits paves the way for tobacco M&A

    07:59 AM ET · RAI

    • The reduced pace of smoking lawsuits is helping to stoke up M&A activity in the tobacco sector, according to analysts.
    • Reynolds American (NYSE:RAI) disclosed in a recent SEC filing that it faced 5K Engle-related suits in Q1 of 2014, well-off the high litigation pace of a few years ago.
    • The clearer visibility on liability in the sector should help push forward deals which a few years ago would have stalled.
    • Lorillard (NYSE:LO) is +0.7% to $66.48 in premarket trading.


  9. Citigroup beats by $0.19, beats on revenue

    08:02 AM ET · C

    • Citigroup (NYSE:C): Q2 EPS (Excl. CVA/DVA) of $1.24 beats by $0.19.
    • Revenue (Excl. CVA/DVA) of $19.37B (-3.2% Y/Y) beats by $440M.
    • Press Release


  10. Harry Potter attraction boosting traffic at Universal theme parks

    08:13 AM ET · CMCSA

    • Universal Studios Japan (NASDAQ:CMCSA) expects to see an extra 2M visitors to its Osaka theme park due to the popularity of the new Harry Potter attraction.
    • If long lines are an accurate indicator, the new Harry Potter ride at Universal’s Orlando park has also boosted traffic significantly.


  11. Boeing expecting sales drop for defense unit

    08:19 AM ET · BA

    • Boeing (NYSE:BA) has warned of an expected sales drop between 7-10% for its defense, space and security business compared with sales for 2013. Spending cuts by the U.S. and other western governments have been the main factor behind the company’s lowered expectations.
    • Still, Boeing plans to compete for several U.S. contracts including a next generation long-range bomber, a trainer jet for the air force, and a surveillance drone for the navy. Even if the company were to win some contracts, revenue from the programs will mainly increase only after 2020.


  12. Manchester United scores $1.3B deal with Adidas

    08:22 AM ET · MANU

    • Manchester United (NYSE:MANU) scores a 10-year kit sponsorship deal with Adidas (OTCMKTS:ADDYY) which will see it earn $1.3B over the course of the contract.
    • The amount is more than some analysts forecast Manchester United would nab after Nike passed on renewing its contract with the club.


  13. Good Morning!



  14. Oil Lines

    R3 – 104.40
    R2 – 103.60
    R1 – 102.04
    PP – 101.24
    S1 – 99.68
    S2 – 98.88
    S3 – 97.32

    3 lines below $100. The trend is definitely down…


  15. AAPL/Phil- Will you be sharing any thoughts about how to play Apple earnings? I cashed out all of my naked Apple holdings while leaving myself with 5 Jan '16 80/100 Bull spreads, 14  of the Jan '16 85.71/100  BCS, and 21 Jan '16 85.71/ 107.14 BCS along with 5 Jan '16 81.43 puts.  I am somewhat concerned about this coming earnings announcement since there are still no new products launched, hints that Mac sales are off, and with a new Iphone rumored to be coming in the fall we have to think sales of existing models will be slow as people wait for the new model. On the other hand, if they have a huge share repurchase in the quarter, it could inflate the EPS and offset a small sales slowdown. I would like to see a temporary drop in price that would allow us to reload before new products are announced. What do you think Phil?


  16. Good morning!  

    Interesting video of L Ron Hubbard's Great-Grandson ripping apart the history of Scientology.  

    Watch this when you have a chance: "Who is Dependent on Welfare" – very nicely done.  

    This one is so good I'm going to make it a post – John Oliver sums up everything I've been saying about Income Inequality in 15 minutes or less:


  17. AAPL/Craigs – I don't see anything special from this earnings report.  In fact, I think they might miss as there's expectations of 14% growth vs 9.5% expected for the year and I just don't see why Q2 should be ahead of pace.  Yes, there will be less shares – so I sure wouldn't short them and, of course, they could make an announcement that could drive them up over $100.  So I am sticking to our well-covered (1/2 deep in the money calls) position and happy to add more short puts and roll the long calls on the way down or, if up, then add more long spreads and roll the short calls.  In other words, I think I need more information, so I want to stay flexible.  

    Keep in mind, in our $500,000 LTP, our position is 5 AAPL 2016 $70-90 bull call spreads and 5 short $85.71 puts and in our $500,000 Income Portfolio, we have 70 2016 $85.71/107.14 bull call spreads and 20 short $87.14 puts and 35 short Oct $84.29 calls.  It should be noted that we started the Income Portfolio with 5 old contracts (35 new) and, when it went up too fast, we doubled down the long spread, leaving us where we are.  

    Had we not left ourselves room to roll and DD – we'd be totally screwed – keep that in mind with your current (and future) AAPL position!  

    Oil laying around $100.50, gold $1,306, silver $20.95, copper $3.25, Nat gas $4.15, gasoline $2.92 with the Dollar at 80.25. 

    As it often is, Monday is a watch and wait day.  We're certainly not impressed with opening up half a point – what matters is where we end up.


  18. Phil/ SDS … would you consider now to be a reasonable time to possibly initiate a long term Jan 2016 long 'insurance' position on SDS using options. I am thinking of buying SDS Jan 2016 $25 call, selling $30 or $35 call and Selling $24 or $25 puts to pay for the call spread. Thinking of 5% of my buying power to put towards this in a retirement type account which is largely invested in income stocks. Appreciate your thoughts as always. Thanks


  19. phil, would you suggest rolling AAPL 2016 $85.71/$92.86 bull call spreads to a more potentialy profitable position. thanks.


  20. SDS/DM – Yes, I think while the S&P is up is the time to buy the protection.  Realistically, though, you need to have a long-term plan.  A Jan SDS spread won't pay you well unless SDS is down in January.  If we have a drop this summer and the Fed steps in with QE4, 5, 6 – then it's just an expensive roller coaster ride.   SDS is at $24.93 so only giving yourself 4% down (2% up on S&P to 2,009) before you own it.  When you say 5% of your buying power – do you mean you will end up long SDS at net $25ish for 10% of your cash?   That is not unreasonable protection, as long as your longs are making enough to justify your loss, which would be 4% or 10% (0.4%) for each 2% the S&P rises over 2,000(ish).  

    Personally, I'd rather take the Sept $24/27 bull call spread at $1 with the Sept $23s at $1.40 with a .70 delta as you are in the money with a 200% upside.  If the price of the $24s goes down to $1.20ish – THEN you can spend the money to roll out to Jan calls. 

    So, let's say the S&P drops 10%.  Clearly you are 100% in the money on SDS and you make 200% while your portfolio loses 10% so, to be even, you need to have 5% in that spread but being even isn't the goal of a hedge, mitigating the damage by half is find.  So call it 2.5% to be generous will pay back 7.5% with a gain of 5% to offset half your loss on a 10% drop.  

    Let's say you have $200,000 of longs and expect to lose $40,000.  Then you want to have $10,000 of the SDS spreads.  

    Now, 10% down on the S&P would pop SDS 20% to $30.  10% up, however, would drop you to $20.  Do you really want to own (with a $2 sale price) 5,000 shares of SDS at $25 ($125,000) that are down $25,000 when the S&P is up 10%.  Your $200,000 of longs should be up $20,000 at least but that means you lose on an up move (or call it "very well protected against future dips").  

    Instead, if you are going to buy $10,000 worth of longs, why not sell $5,000 worth of the short SDS Jan $25s for $2 (25 contracts) and obligate yourself to a rollable 2,500 shares at $67,500 and raise the other $5,000 selling puts on stocks you would want to buy if the S&P drops 10%.  This is what the Buy List is for!   Just scan the charts and see who's cheap:  CCJ, CLF, EBAY, HMY, HOV, IBM (not too bad), IRBT, ISRG, KBH, PFE, RRD, TASR, TEX, WEN, WFM are all still low in the chart so now you just have to figure out which one will help diversify your existing holdings and look for a short put to raise cash like:

    WFM 2016 $33 puts can be sold for $2.80 

    WEN 2016 $10 puts can be sold for $2.50 

    RRD 2016 $15 puts can be sold for $2.35 

    TASR 2016 $13 puts can be sold for $3.35 

    PFE 2016 $28 puts can be sold for $2.15 

    KBH 2016 $15 puts can be sold for $1.70 

    So, if you offer to own 500 shares of each of the above (if they get about 10-15% cheaper), you will collect $7,450 to put towards long plays.  By the way, it's picks like this that you end up reading a month or two later in the Portfolio Review and say "why didn't I take any of those"?  


  21. phil/AAPL, ….i meant potentially MORE profitable…


  22. SDS/Phil … wow that just about covers everything, thanks a million … DM


  23. Major Earnings for the Upcoming Week:

    Monday:  C, MTB, PPHM, WTFC

     

    Tuesday: CMA, CTAS, CSX, GS, INTC, JNJ, JPM, WWW, YHOO

     

    WednesdayABT, BAC, BLK, EBAY, NTRS, PNC, SNDK, STJ, USB, YUM

     

    Thursday: AAL, AN, ATHN, BHI, BAX, BX, COF, DHR, FITB, GOOG/GOOGL, MAT, NVS, PM, PPG, SAP, SLB, STX, SYK, UNH

     

    Friday: BK, FHN, GE, HON, JCI

     

    Economic Releases (7/14-7/18):

    Monday:

    N/A

                                                                                                                                                                                    

    Tuesday:

    6:45 am CT – GS Store Sales

    7:30 am CT– Retail Sales

    7:30 am CT – Empire State Mfg. Survey

    7:30 am CT – Import & Export Prices

    9:00 am CT – Business Inventories

    9:00 am CT – Fed’s Yellen Speaks

                                                                                                                                                                                                                  

    Wednesday:

    6:00 am CT – MBA Purchase Applications

    7:30 am CT – Producer Price Index (PPI)

    8:00 am CT – Treasury Intl. Capital

    8:15 am CT – Industrial Production

    9:00 am CT – Housing Market Index

    9:00 am CT – Fed’s Yellen Speaks

    9:30 am CT – Oil Inventories

    11:00 am CT – Fed’s Fisher Speaks

    1:00 pm CT – Beige Book

                        

    Thursday:

    7:30 am CT– Weekly Jobless Claims

    7:30 am CT– Housing Starts

    9:00 am CT – Philly Fed Survey

    9:30 am CT – Natural Gas Inventories

    12:35 pm CT – Fed’s Bullard Speaks

                                                                                                                                                                                                            

    Friday:

    8:55 am CT – Consumer Sentiment

    9:00 am CT – Leading Economic Indicators


  24. /TF harshly rejected at 1,170 – still holding up as a great shorting line (and that's not a good sign for the bulls!).  

    TSLA/Jabob – They have such massive issues with warranty and their "guaranteed" resale values (which are what keeps the leasing costs lower than they should be) that people who buy the stock are either short-term players OR clinically insane.  

    Tesla’s Resale Value Guarantee allows owners to sell their Model S back to Tesla between the end of months 36 and 39, regardless of the loan’s term. The resale amount is specified at the time of delivery and is forecasted to be higher than any high volume premium sedan brand (Audi, BMW, Mercedes, Jaguar or Lexus). This value is equal to 50% of the original base purchase price of the 60 kWh Model S plus 43% of the original purchase price for all of the options, including the upgrade to the 85 kWh battery pack (exclusive of taxes, fees, and accessories).

    So they are buying back 36-month old batteries for 50% of their purchase price – that's just ridiculous – AND it's not accounted for on their books.  Of course, that's why Musk wants his Giga-Factory – it will give him a way to add a shell to the game and keep moving the losses around before anyone catches on.  

    Note that if you Google "laptop battery resale" there is NOTHING.   They have no value in resale.  None.  You can resell almost anything but not used batteries.  As I'm sure Shadow will point out, they are noting but hazardous waste with a faint electrical pulse…

    AAPL/Lunar – 2017 will be out next Q and then will be a better time to roll.  The $85.71s are $16.75 and the $92.86s are $13.10 so net $3.45 out of $5ish means you have 50% upside if AAPL stays over $93, which allows for almost a 5% drop.  So making 50% in 18 months apparently doesn't do it for you so how much money do you want to risk to "improve" your upside?  The $90/100 spread is $5 so 100% upside and $6.43 in the money at the moment.  If you move your spread to 1/2 of those you take 0.65 per spread off the table but AAPL has to be 10% higher for you to make $2.50 more vs 10% lower and you still make $1.55.  That means, in order to squeeze another $1 out of your spread, you are gong to up your target on AAPL by 20%.  Is that really what you intend to do?  

    It's not that I don't like the $90/100 spread, we're even more aggressive on top in the Income Porfolio but we're also at $85 on the bottom and we also 1/2 covered with short calls AND we sold puts so, on the whole, no – you are asking to be wildly more aggressive than we are, so I don't approve.  

    Keep the bird that's in your hand and, if you want to gamble, try the 2016 $95.71/105 bull call spread at $3.30.  That one has 200% upside and a net .11 delta so you only lose .55 (16%)ish on a $5 drop in AAPL.  THAT's a good risk/reward play.

    You're welcome DM, was a well-timed question worthy of a mini-post.  

    Thanks QC.  I don't like to guess earnings the first two weeks but lots of interesting ones ahead. 


  25. I don't know if anyone is having the same problem, but the Risk Profile feature on TOS is not working at all on both my machines. It shows correct information for existing positions, but is out to lunch for positions I create.


  26. phil/AAPL, thanks for laying out that reasoning--it is really appreciated.  i think it is a bad habit--wanting to tweak the portfolio adn thinking that it could be doing better--when it is doing just fine.  but they way you laid it out is helpful.  thanks.


  27. stjeanluc: Just to check, I built a quick Iron Butterfly on SPX, and the risk profile looks about right. Nothing unusual that I can see.


  28. Quote of the day:

    Morgan Housel, “Everyone who reads financial news has an obligation to know about themselves what the pundit can’t: Your own risk tolerance, age, job security, time horizon, and level of expertise, to name a few.”  (Motley Fool)


  29. Thanks Jbur – I'll check with them because I have the problem on 2 machines, not just one.


  30. SPY DD on the 198s…..booyah!  Taking the money and running on 2/3.  Letting the rest ride.  20c trailing stop.  GM!


  31. Momo fever today


  32. Jbur – It works with SPX on my machine, but try to build a spread with another stock. I tried with ABX, TSLA, NFLX and August strikes. Not working.


  33. Monetizing binge-viewing is the next ad frontier • 10:42 AM

    Fresh research from Annalect indicates more than a third of binge-viewing TV watchers would agree to watch some ads if it meant they could score lower subscription rates.

    In an interesting twist, binge viewers end up discussing with friends and family the ads they do see at a higher rate than normal viewers.

    What to watch: Streaming services such as Netflix (NASDAQ:NFLX), Hulu, and Amazon (NASDAQ:AMZN) are still trying to define how advertising can be part of their model, with dynamic ads tapped to be an effective way to increase relevancy and conversion rates. On the content side, major networks (CBSDISCMCSAFOXA) want to move to a C7 system (7-day window) of counting ads from C3 in order to capture VOD, streaming, and DVR viewers.


  34. TOS/StJ – I just tried one and it did seem ok.  They just made changes over the weekend, maybe they screwed something up.  

    You're welcome Lunar.  I'm trying to get people happy to "accept" 20% annual gains as a good thing.  Hard work with so many greedy people about.  wink

    SPY/Pharm – Very nice!  

    Damn, you have to be really fast to play the RUT – back to 1,165 now.  

    Momos/Rustle – Wow!   TSLA up $9 in a straight shot, NFLX up $12, AMZN $8, TWTR $1, GOOG made a huge U-Turn, CMG $10 ($606) – someone is pushing some buttons.  

    Of course Yellen was featured in the New Yorker this weekend and that article is being mined by the bulls as if it's a new announcement of doveish policy.  Actually, there is good ammunition for that mindset:

    • The Fed chair stayed on message about the economy,  repeating her view that the economy is getting better but still in need of Fed stimulus. “The headwinds are still there,” she said. “It’s still going to require an unusually accommodative monetary policy. That is the same message Fed watchers expect Yellen to deliver to Congress this week.
    • Yellen described Fed policy as pushing the economy like a person pushing someone in the back.
    • The Fed chief is already feeling a little isolated. She regrets that she doesn’t feel she can meet regularly with Fed watchers because she can’t control what they might report.
    • Yellen was sarcastic about the economic theory that markets function well on their own. “The financial crisis really diminished the prestige of those who think that financial markets are always efficient and work extremely well,” she said.

    She may as well put on a skirt and some pom-poms and cheer on the rally!  Now, skeptical guy that I am, I see something like this moving the markets and it makes me discount the move even further.  Still waiting and seeing but if we are being driven by ridiculous things like these MoMo pops – it's certainly not a market I want to chase higher.  


  35. stjeanluc: I built AN August Bull Call in PCLN and it didn't graph out on the risk profile. Then build one on INTC and it did. When I went back to PCLN it was there and looked normal. 

    Who knows?


  36. Thanks Jbur – it looks like they screwed up something with the latest update.


  37. TOS analyzer has been flakey for the last week or so. i'm really disappointed in how buggy the platform has been this whole year. probably kludging in IRS and NSA 'monitoring' code to, you know, make us safer.


  38. The great Republican:

    Image Detail

    Who remembers $1.30 unbranded gas?

    Kansas still heading for a complete economic meltdown, courtesy of Conservative Strategies actually being enacted:

    The toll of tax-cutting in Kansas

    "Our new pro-growth tax policy will be like a shot of adrenaline into the heart of the Kansas economy," he promised then. Brownback's tax consultant, the supply-side guru Art Laffer, promised Kansans that the cuts would pay for themselves in supercharged economic growth.

    Instead, job growth in Kansas trails the nation. The state's rainy-day fund is dwindling to zero. Month after month, revenue comes in even lower than fiscal officials' most dire expectations.

    In the rest of the country, school budgets are finally beginning to recover from the toll of the last recession; in Kansas, they're still falling. Healthcare, assistance for the poor, courts, and other state services are being eviscerated. 

    Who's benefiting? The rich, including those proud offspring of Wichita, Kan.: the Koch brothers. 

    Despite all this, Brownback resorted to an op-ed in the Wall Street Journal a few weeks ago to declare that "the early results are impressive." Among other statistics he cited, "In the past year, a record number of small businesses — more than 15,000 — were formed.

    Yes, but as shown by the Center on Budget and Policy Priorities, a Washington economic think tank, 16,000 disappeared. And many of those businesses that Brownback crowed about were surely created to take advantage of one of the tax-cut quirks Brownback enacted. This is the elimination of all taxes on partnerships, sole proprietorships, and LLCs that pass through their tax liabilities to their owners. That allows everyone from freelancers and petty contractors to huge partnerships to avoid any state income tax at all, as long as they're organized as a certain type of "small business." 

    WYNN back to $205, that stock is unkillable.  

    Completely uncritical coverage of TSLA continues:

    Tesla Motors, Inc.'s Gen III Affordable Vehicle: What You Need to Know

    You don't need to know that currently, the battery alone costs more than the price of the car they say they will produce in two years, apparently.  


  39. When I was an undergrad I use to buy Phillips 66 high test for $0.64/gallon.  $5 would get me through the week in my MGB.  Today, $5 Bernanke Pesos will barely get me home from the gas station.  That's progress…


  40. TSLA // Sick is good
    Like the teenage vernacular – I've figured it out. So a massive fault line in TSLA's warranty regarding batteries and drivetrains is exposed and the stock shoots up +10 points. I get it. Sick means cool.
    When they miss earnings this could pop over $300 >>


  41. TSLA Friday $230 calls can be sold for $3.40 if you are brave (selling into the excitement).   At the moment, they can be rolled even to Aug $270s so, if you don't mind risking earnings in early Aug – not an awful risk with a 20% cushion.  


  42. Phil – thats insane  ; >


  43. NFLX has earnings tonight and the morning pop to $455 has the Aug $500 calls selling for $8.50 – that's super hard to resist too. 


  44. Phil is looking like a gambler today.


  45. Phil / Daredevil
    So, I'm assuming that you're working those calls into spreads and not naked ?


  46. Sixth Longest Bull Market Rally Ever

    It’s been 25 months now since the last time that the S&P 500 pulled back by 10% or more.  That makes this the sixth longest stretch since 1950 without a 10% decline.  Even though this is the 6th longest rally, it’s actually the smallest in terms of percent increase on the list below.

    The 64 years between 1950-2014 represent 774 months.  The five rallies that lasted longer than this one lasted 250 months combined, and 125 of those months occurred once the rallies had lasted longer than the current rally.  That means that about 16% of market history since 1950 took place in rallies that had gone as long or longer than this one without a 10% decline.


  47. Phil / NFLX - earnings are a week from today, not today.


  48. nato says russia masses troops again on ukraine border…up to 12,000 now


  49. phil / talk me off the ledge
    NOW those TSLA $230s are looking really beer-goggly. Should I give my keys to bartender ?


  50. Phil

    Unless I missed something, we need to roll the DIS July calls in the Butterfly  by the 19th.


  51. Anyone buying SFTBY here for the pre alibaba runup (if there is one)?


  52. EXEL!  I hope you're in on that one MrM, zoom zoom!


  53. EXEL…I'm in…any reason for the runup?


  54. Man, we have got to get into the structured note scam!  A girl just interviewed me on the phone about a TSLA note BCS is putting out where they pay 16% for a year on $230.  The deal is, if TSLA is between $160-230 any quarter, you get paid.  Over $230 any quarter, you are called away and expire.  Over $160 – under $230 you get your 4% interest ($9) and under $160, you are assigned at $230 and take the loss.

    What a SCAM!!!  The Jan $230 calls can be sold for $31 with $45 of margin.  BCS obviously gets better margin than that but they could sell those and keep $31 while paying out $18 and, assuming TSLA stays over $160, they can expect to sell another $31 for the next 6 months so they net very little risk.  

    Meanwhile, they take the remaining $190 cash and lever it 10x to $1,900 and lend it out with a 2% spread (at least) and pick up another $38 for the year.  Now they have no risk at all and probably make about $55 per share of TSLA for doing nothing. 

    I asked the girl and she said she thinks only banks can write structured notes like this so my new ambition is to start a bank! 

    Daredevil/Wombat – No, those are just very risky naked call sales.  You know I don't call them often but those prices are just silly (or they were, calming down a bit now). 

    NFLX/Mr. M – Thanks.  That was my fault because Yahoo's date was 21-Jul-14 and I read July 14th.

    Russia/Angel – Well you didn't think Putin would just walk away, did you? 

    TSLA/Wombat – Like really good tequila, it's fun if taken in moderation only.  Otherwise, things can turn ugly fast.  

    DIS/Gerry – Yes, Wednesday should be rolling day (or at least planning to roll day).  They never dipped, even on the market weakness.  We may have to bump up the longs. 

    SFTBY/Jrom – I did the math and you may as well just buy Yahoo.  In fact we did in the STP. 

    Look below at the Sector Performances today – this is one narrow MoFo of a rally!  


  55. GTAT hammered on forecasts – good entry >>>


  56. Timely view from Trefis:

    ARO priced for BK and 2016 $3.50/5 bull call spread at .40 with stock at $3.17 is a fun way to play the upside if they are saved.  With $2Bn in revenues and very little debt, someone should want them for $250M in market cap so let's risk $2,000 in the Income Portfolio (50 contracts) on this one and $4,000 (100 contracts) in the STP with potential upsides of $7,500 and $15,000 coming back in 18 months.  If they get bought over $5, we get the whole thing much sooner!  

    GTAT/Wombat – Down for very silly reason of rumored production delay on IPhone 6.  Even if it is true (doubtful and expected dates were rumors anyway), it doesn't change the long-term demand for Sapphire.  I'd still wait and see but very interesting if they get cheaper.  

    If they do hold $15, watch the 2016 $12 puts (now $3).  Selling those for $2.50 or better is pretty much a no-brainer and super margin-efficient at just net $1.30.


  57. Pharm / EXEL – yes, I have 25 NOV 3/6 BCS from a few months back so would love to see $6/share later this year :)


  58. That sure is a ridiculous looking chart on HOV.  


  59. /CL getting serious pressure at $100.50


  60. EXEL – Rumor of a Roche buy out.  Oh, and this:

    Shares are rallying after the company announced positive phase 3 data for coBRIM.

    The study met its endpoint of improving progression free survival of BRAF. CEO Michael Morrissey commented, "Despite recent therapeutic innovations, BRAFV600 mutation-positive advanced melanoma can be difficult to treat due to the emergence of resistance."


  61. PHIL/INVN

    I recently put on this position: Jan 16 BCS 20/30 and short 20 put. Also, short Sept 25 call. They are doing well so far.


  62. HOV/Palotay – Good example of how finicky the market is these days.  People have no idea what things are actually worth and just rush in and rush out based on latest rumors.  Think about their business – they buy land and build homes and sell them, probably a year turnaround in the pipeline.  You can't possibly have a drastic change in trend over any quarter – let alone a month!  

    /CL/Wombat – I was hoping for a pop back to $103.50 but looking like a dead snake now.  

    EXEL/Pharm – They have a lot of room to run at $4.  You can play the buyout rumor with the 2016 $3/7 bull call spread at .85 and, if you really like them, you can sell the 2.50 puts for .50 to net .35 on the $3 spread and worst case is you own them long-term for net $2.85 or, if they get called away at $7 – nice 750% gain on cash.

    INVN/Zten – AAPL partners are good to play early on but, over time, AAPL tends to squeeze them for margins and then there's always the risk they switch suppliers, so be careful.  


  63. ISRG/Phil- We liked this back in May when it was down in the $360 area. After watching it rise to $426 do we like it again down here at $383? While it may still fall further if earnings are not good, I do believe the long term outlook is ok as the new machine gains traction, hopefully laying to rest worries about robotic surgery.  I do worry though that capital spending is being delayed as economic worries continue and weak earnings expectations will continue to be a drag. Do you think it is worth a look before earnings or wait until after? Seems like  if there is any type of positive surprise it could jump back up quickly and the opportunity is lost. 


  64. wombat, thanks for reminding me about oil, I was meaning to play the bounce today and after I read your post I grabbed /CL at 100.7 and out a few minutes later at 101 even with some McMuffin money, per Phil's rules.  I think they'll bounce it even higher so keeping an eye on it, but often they do the big pushes overnight so it's hard to catch the monster moves.


  65. Another quote for today:

    Ben Carson, “Investing success comes from setting reasonable expectations and anticipating the fact occasionally things won’t work out as you planned.”  (A Wealth of Common Sense)


  66. EXEL/Phil- I wanted to look at the EXEL Jan'16 BCS you suggested and I can't find anything past the Feb '15 options on TOS, or TDAmeritrade. Any thoughts? The Feb '15 3/7 spread is about $1.00 so is this what you were talking about?


  67. EXEL-  According to yahoo finance 50% of the float is shorted?  That could be why the huge vol today.


  68. Apparently we might face a pilot shortage – deregulation didn't help there:

    http://www.theatlantic.com/business/print/2014/07/turbulence-ahead-the-looming-pilot-shortage-and-its-decades-long-history/374171/

    Roghair said all pilots struggle at the beginning of their careers. Current FAA regulations require 1,500 hours of in-air training before a pilot can work for an airline. “It also costs pilots thousands of dollars to gain the education they need,” Roghair added. “New pilots can come into the industry in significant debt. When you consider the wages they’ll make if they enter the industry, more would-be pilots are simply choosing another path.”

    “Unless they come from a wealthy family, the problem every new pilot has is debt,” Simoneau said. “The First Officers I flew with at American Eagle came there with over $200,000 in debt for a job that pays $22,914 per year, to start. It took me about 10 years to pay it back. If anything, the situation for new pilots is much worse.”


  69. mrm / CL
    I tend not to get into days trades unless I have a really strong backstop. I have short Aug spreads balanced with Oct, Dec, March longs >> presently up 10K
    will close on Wed ( option expiration )


  70. stjean

    I work in the industry as a pilot.  We saw this coming years ago.  Several stories:  We(the company I work for) is seeing a 50+% washout rate of newly hired pilots.  The talent is just not there and companies are scratching their heads on what to do about it.  It used to be that a pilot could finish their flight training with 300-400 hours and go to work in the right seat in order to get to the 1500(ATP requirements) in order to move to the left seat.  The 1500 hr limit to even fly right seat really puts new pilots in a pickle.

    The feds tried to inflate the talent pool by increasing the part 121 retirement age to 65.  In hindsight, this was a double whammy because people just aren't getting into the field. 

    We are currently on vacation in Kauia.  I was talking to a lady down by the pool and she commented that she had a son attending North Dakota State(a big aviation university).  I asked if by chance he was going to school to be a pilot and she said "yes."  I then made that statement that it must have cost a lot of money, to which she responded, "we have over $200,000 into his training and now he is having second thoughts about even being in the industry. 

    The bottom line is that the economics of becoming a pilot just doesn't make sense.  The next 10 years in this industry is going to be a bumpy road.


  71. value boys getting frustrated…nygren bullish on amzn…gundlach bullish on tsla

    draghi says wont stop blowing bubbles even if he sees them…hahaha

    Euro rises


  72. ANYONE?

    What are the approximate terms for a 3 year TSLA lease?


  73. shadowfax  - Ben Dover knows! ;-)


  74. diamond

    Who is Ben Dover? I was thinking less than $1K per month is another liability problem. Fixing problems not in for service and not fixing the complaint is quite the diversion, new drivetrain? Part is the battery and front end parts, that ended 40 years ago. Software is a fix for a problem. Lots of problems and more cover-ups as the nice guy. When was the last car to split in half?


  75. PCYC butterfly with 100 as the body.  23c.  Pays 3:1.


  76. ISRG/Craigs – They had a "death cross" where the 50 dma failed the 200 dma back in early June but, since then, the 50 dma is $380 and has held all the way and the 200 dma is $400 so $384 is a nice consolidation zone preparing for another run more likely than falling on the way down:

    They are not projecting much growth, maybe 10% into next year and $380 is not $360 – so not as easy a decision here as it was then.  Also, we had a better VIX then and got paid more for the risk.  There are massive potential positive or negative surprises based on what procedures are approved or disapproved for their machine – especially with a new machine rolling out that needs new certifications.  The spike to $541 in April was on the announcement of the new machine, that excitement (that we always sell into!) died down quickly as the reality of a whole new sales and approval cycle kicked in.  

    So their last big earnings disappointment (last year) was likely due to customers cutting back on orders while they wait for the newer machines.  Not just the machines that new customers wait for but customers who want to upgrade might order less disposables if they are not sure they'll be compatible with new machines.  Anyway, at this point, there does need to be some marked improvements in sales or, in the very least, some comments about a stuffed order book for new machines.  

    As it's an expensive stock, if you are not in it now, I'd rather wait for earnings to get a better story.  If you figure a miss drops them 10% to $340, the 2016 $340 puts are $37 so net $303 is a good price no matter what, a 1/2 sale of those puts a little in your pocket while you wait. 

    Good way to play MrM!  

    EXEL/Craigs – My bad, I just assumed the last contracts were the 2016s, they were, in fact, the Febs.  Same deal on the play though. 

    Pilots/StJ – Yep, another one of those situations in which the free market fails us.  I object to the whole concept that a guy responsible for my life is only being paid $22,914 a year!  One planeload of passengers more than pays for his year's salary and the the other 200 – 500 flights a year he flies accrues to the airline instead – that's criminal!  If a guys is going to fly me around, I want a guy who had a good night's sleep in a nice home who isn't distracted by having to juggle his bills and pay the rent and I certainly don't want a guy who is ignoring his own health issues because he can't afford to have things checked out…

    Well, 20 mins to close and we've gone nowhere since the open on no volume (44M on SPY at the moment).  

    Pilots/Buster – Well, I'm sure China will have a few thousand pilots to send over.  Check out Europe by comparison

    Haha/Angel – Actually, it seems the joke is on us.  

    TSLA/Shadow – The actual cost is about $1,000.  You'll hear lots of BS from TSLA about effective costs much lower than that but that's because they calculate in gas savings and EV Credits, etc as well as your own tax benefits from leasing (as if it's unique to TSLA).  Yet another Elon shell game.  


  77. Hey guys, just joined as a new member. I have been told by many silicon valley friends to buy INTC because of someone called Pranab Mistry ( head of internet of things). Anyone playing their earning tomorrow? It seems very bullish with 5SMA being upward.


  78. shadowfax – sophomoric double entendre …


  79. Airlines / Phil – And interestingly enough, airlines are now profitable… So they hit us for just about every possible fee – luggage, tickets, drinks, food, headsets and then they reduce the salaries of guys who have 500 lives in their hands and voila – profits! In the meantime, some idiots in Congress refuse to increase spending on the FAA unless we can offset it with cuts in food stamps or tax cuts and we could have some nice news headlines in the next 10 years.


  80. Flights are being canceled in small markets with small planes. The shortage is already here. I heard a Southwest pilot quit to fly a private .001% jet. Why not? Soon they will be the only decent employer until the world economy takes them down near the end.


  81. Welcome Abhishekseth (last time I'll type that out!)!  It's a bit early for us to be guessing earnings but we love INTC long-term.  Last I heard though, Pranab Mistry is over at Samsung and is supposed to be very clever.  If he went to INTC, that's a good thing but I haven't heard it and kind of doubt Samsung would give him up without a fight.  We're not in INTC at the moment because they are not cheap and, as to earnings, I'd hope for a misstep to give you an entry opportunity but I sure wouldn't chase or bet ahead of the game.  

    As to the 5sma – LOL, not my time-frame.  Ask Optrader about those!  

    Airlines/StJ – I don't know what they do with the money!  Airfares are out of control and the planes are generally full and they hit you for a ton of fees on top of that and they do nothing for you when you are delayed or even bumped.  SOMEONE is making money – it certainly doesn't show up on their balance sheets with UAL claiming just $500M in profits one $38Bn in revenues (1.3%) – that's worse then WMT!  

    139654 600 Airline Changes cartoons

    147475 600 Airline stowaway cartoons

    145051 600 Pilot shortage cartoons


  82. A bit of selling into the close but we held that half-point gain we opened with. 


  83. China/Asia isn't the answer.  Here's a synopsis from an ex training pilot that worked with a friend of mine.

    Low-down on Korean pilots

     

    —-- hi
    enjoy your flight on Asiana..

    After I retired from UAL as a Standards Captain on the –400, I got a job as a simulator instructor working for Alteon (a Boeing subsidiary) at Asiana. When I first got there, I was shocked and surprised by the lack of basic piloting skills shown by most of the pilots. It is not a normal situation with normal progression from new hire, right seat, left seat taking a decade or two. One big difference is that ex-Military pilots are given super-seniority and progress to the left seat much faster. Compared to the US, they also upgrade fairly rapidly because of the phenomenal growth by all Asian air carriers. By the way, after about six months at Asiana, I was moved over to KAL and found them to be identical. The only difference was the color of the uniforms and airplanes. I worked in Korea for 5 long years and although I found most of the people to be very pleasant, it’s a minefield of a work environment … for them and for us expats.

    One of the first things I learned was that the pilots kept a web-site and reported on every training session. I don’t think this was officially sanctioned by the company, but after one or two simulator periods, a database was building on me (and everyone else) that told them exactly how I ran the sessions, what to expect on checks, and what to look out for. For example; I used to open an aft cargo door at 100 knots to get them to initiate an RTO and I would brief them on it during the briefing. This was on the B-737 NG and many of the captains were coming off the 777 or B744 and they were used to the Master Caution System being inhibited at 80 kts. Well, for the first few days after I started that, EVERYONE rejected the takeoff. Then, all of a sudden they all “got it” and continued the takeoff (in accordance with their manuals). The word had gotten out. I figured it was an overall PLUS for the training program.

    We expat instructors were forced upon them after the amount of fatal accidents (most of the them totally avoidable) over a decade began to be noticed by the outside world. They were basically given an ultimatum by the FAA, Transport Canada, and the EU to totally rebuild and rethink their training program or face being banned from the skies all over the world. They hired Boeing and Airbus to staff the training centers. KAL has one center and Asiana has another. When I was there (2003-2008) we had about 60 expats conducting training KAL and about 40 at Asiana. Most instructors were from the USA, Canada, Australia, or New Zealand with a few stuffed in from Europe and Asia. Boeing also operated training centers in Singapore and China so they did hire some instructors from there.

    This solution has only been partially successful but still faces ingrained resistance from the Koreans. I lost track of the number of highly qualified instructors I worked with who were fired because they tried to enforce “normal” standards of performance. By normal standards, I would include being able to master basic tasks like successfully shoot a visual approach with 10 kt crosswind and the weather CAVOK.  I am not kidding when I tell you that requiring them to shoot a visual approach struck fear in their hearts … with good reason.  Like this Asiana crew, it didnt’ compute that you needed to be a 1000’ AGL at 3 miles and your sink rate should be 600-800 Ft/Min. But, after 5 years, they finally nailed me. I still had to sign my name to their training and sometimes if I just couldn’t pass someone on a check, I had no choice but to fail them. I usually busted about 3-5 crews a year and the resistance against me built. I finally failed an extremely incompetent crew and it turned out he was the a high-ranking captain who was the Chief Line Check pilot on the fleet I was teaching on. I found out on my next monthly trip home that KAL was not going to renew my Visa. The crew I failed was given another check and continued a fly while talking about how unfair Captain Brown was.

    Any of you Boeing glass-cockpit guys will know what I mean when I describe these events. I gave them a VOR approach with an 15 mile arc from the IAF. By the way, KAL dictated the profiles for all sessions and we just administered them. He requested two turns in holding at the IAF to get set up for the approach.  When he finally got his nerve up, he requested “Radar Vectors” to final. He could have just said he was ready for the approach and I would have cleared him to the IAF and then “Cleared for the approach” and he could have selected “Exit Hold” and been on his way. He was already in LNAV/VNAV PATH. So, I gave him vectors to final with a 30 degree intercept. Of course, he failed to “Extend the FAF” and he couldn’t understand why it would not intercept the LNAV magenta line when he punched LNAV and VNAV. He made three approaches and missed approaches before he figured out that his active waypoint was “Hold at XYZ.”  Every time he punched LNAV, it would try to go back to the IAF … just like it was supposed to do. Since it was a check, I was not allowed (by their own rules) to offer him any help. That was just one of about half dozen major errors I documented in his UNSAT paperwork. He also failed to put in ANY aileron on takeoff with a 30-knot direct crosswind (again, the weather was dictated by KAL).

    This Asiana SFO accident makes me sick and while I am surprised there are not more, I expect that there will be many more of the same type accidents in the future unless some drastic steps are taken. They are already required to hire a certain percentage of expats to try to ingrain more flying expertise in them, but more likely, they will eventually be fired too. One of the best trainees I ever had was a Korean/American (he grew up and went to school in the USA) who flew C-141’s in the USAF. When he got out, he moved back to Korea and got hired by KAL. I met him when I gave him some training and a check on the B-737 and of course, he breezed through the training. I give him annual PCs for a few years and he was always a good pilot. Then, he got involved with trying to start a pilots union and when they tired to enforce some sort of duty rigs on international flights, he was fired after being arrested and JAILED!

    The Koreans are very very bright and smart so I was puzzled by their inability to fly an airplane well. They would show up on Day 1 of training (an hour before the scheduled briefing time, in a 3-piece suit, and shined shoes) with the entire contents of the FCOM and Flight Manual totally memorized. But, putting that information to actual use was many times impossible. Crosswind landings are also an unsolvable puzzle for most of them. I never did figure it out completely, but I think I did uncover a few clues. Here is my best guess. First off, their educational system emphasizes ROTE memorization from the first day of school as little kids. As you know, that is the lowest form of learning and they act like robots. They are also taught to NEVER challenge authority and in spite of the flight training heavily emphasizing CRM/CLR, it still exists either on the surface or very subtly. You just can’t change 3000 years of culture.

    The other thing that I think plays an important role is the fact that there is virtually NO civil aircraft flying in Korea. It’s actually illegal to own a Cessna-152 and just go learn to fly. Ultra-lights and Powered Hang Gliders are Ok. I guess they don’t trust the people to not start WW III by flying 35 miles north of Inchon into North Korea.  But, they don’t get the kids who grew up flying (and thinking for themselves) and hanging around airports. They do recruit some kids from college and send then to the US or Australia and get them their tickets. Generally, I had better experience with them than with the ex-Military pilots. This was a surprise to me as I spent years as a Naval Aviator flying fighters after getting my private in light airplanes. I would get experienced F-4, F-5, F-15, and F-16 pilots who were actually terrible pilots if they had to hand fly the airplane. What a shock!

    Finally, I’ll get off my box and talk about the total flight hours they claim. I do accept that there are a few talented and free-thinking pilots that I met and trained in Korea. Some are still in contact and I consider them friends. They were a joy! But, they were few and far between and certainly not the norm.

    Actually, this is a worldwide problem involving automation and the auto-flight concept. Take one of these new first officers that got his ratings in the US or Australia and came to KAL or Asiana with 225 flight hours. After takeoff, in accordance with their SOP, he calls for the autopilot to be engaged at 250’ after takeoff. How much actual flight time is that? Hardly one minute. Then he might fly for hours on the autopilot and finally disengage it (MAYBE?) below 800’ after the gear was down, flaps extended and on airspeed (autothrottle). Then he might bring it in to land. Again, how much real “flight time” or real experience did he get. Minutes! Of course, on the 777 or 747, it’s the same only they get more inflated logbooks.

    So, when I hear that a 10,000 hour Korean captain was vectored in for a 17-mile final and cleared for a visual approach in CAVOK weather, it raises the hair on the back of my neck.


  84. Tesla Motors roundup: Win in PA, grass roots support in China • 4:02 PM

    Tesla Motors (NASDAQ:TSLA) will be allowed to sell vehicles directly to the public in Pennsylvania after Governor Tom Corbett signs legislation covering the issue.

    The EV automaker has plans for five dealerships in the state.

    A grass roots campaign in China to build a charging network from Beijing to Guangzhou has drawn notice. Though building the network isn't on the economical side, the response on Chinese social media networks has been impressive.

    Shares of TSLA rose 3.9% for the day.


  85. Wow Buster – that's scary!  


  86. That's it, I am now taking a boat to cross the Atlantic next time…


  87. It's all true.  I know a large number of pilots that are selective in their choices when commuting out of country.


  88. jabo TSLA

    The Musk scam may be about to unravel. Giga factory or pump and dump?


  89. Pilots/Buster: I think anyone who's read Malcolm Gladwell's "Outliers" knows the story of the myriad Korean Airlines crashes and the NTSB's investigation into why they were occurring.  Apparently they came to the same conclusion as your anecdote: The rigid class-structured culture.    

    Japan also famously has a super rigid culture and social structure and uses similar rote memorization techniques in school, yet has comparatively few airline crashes, so its still a bit of a mystery.

     

    Speaking of Japan, apparently Japanese commercial airline pilots make an average salary of $120,000, some pilots making as much $200,000.  Salaries start at around $80,000.   Naturally, ticket prices for JAL and ANA tend to be significantly more expensive, but with a salary gap that high between airlines, are pilots banging down the door at the JAL and ANA offices for jobs?


  90. buster – Which airlines do you suggest flying on?


  91. Any domestic carrier is good.  Asia, due to the fast growth, is where I hear about most of the issues.  I don't mean to strike the fear of God in all, but coming from an insider, it sure puts a light on the issue.


  92. Market Recap on Bloomberg

    "

    Goldman Sachs Group Inc. raised its S&P 500 forecast for

    2014 today to 2,050 from 1,900. Rising earnings and faster

    economic growth will push equities higher and stocks are still

    attractive relative to bonds, according to a research report

    from David Kostin, chief equity U.S. strategist at the bank"

    Why would the chief equity US strategist say that bonds are more attractive than equities? He will lose his job…won;t he


  93. That will put a hit on TSLA's profits.   LOL, just kidding – what profits?


  94. Gosh, can't believe I missed Santelli getting schooled by Liesman and others:

    http://talkingpointsmemo.com/livewire/rick-santelli-wrong-steve-liesman

    It's impossible for you to have been more wrong, Rick. Your call for inflation, the destruction of the dollar, the failure of the US economy to rebound. Rick, it’s impossible for you to have been more wrong. Every single bit of advice you gave would have lost people money, Rick. Lost people money, Rick. Every single bit of advice. There is no piece of advice that you've given that's worked, Rick. There is no piece of advice that you've given that's worked, Rick. Not a single one. Not a single one, Rick. The higher interest rates never came, the inability of the U.S. to sell bonds never happened, the dollar never crashed, Rick. There isn’t a single one that’s worked for you.

    Put him in a boat with Kudlow… And how are these tax cuts working in Kansas Rick?


  95. And Santelli uses the Fox News tactics of screaming over the other person while they speak when he can't win the argument. What an idiot!



  96. St J – As I am a new member, I have been trying to "take in" everything on the website and just learn. Your last post on Santelli getting "schooled" helped reinforce my belief that neither won, as they are talking about completely different things. (I can't really stand both as they constantly talk over other people and I have a full time job during the day ;-)   Liesman is correct in the sense that people would have lost money in the market had they believed what Santelli stated and acted on it; however, Santelli is right in saying that nothing the Fed has done has helped the average person who doesn't hold financial assets. If you don't have a useful skill / trait, you don't have a protected position in the government or don't have much in financial assets to fall back on / work with, you still haven't seen any glimpse of a recovery or improved conditions.

    Have a great evening!


  97. STJ- Thanks for putting these charts together. It looks like the broader indexes (NYSE & Russell 2000) are still lagging considerably. 


  98. Santelli / Spank – That's true, the Fed didn't help the average person (when have they done that in the last 20 years and I didn't see Santelli rant then), but I am very suspicious that Santelli cares that much about the average person… But the fact of the matter is that he has been wrong consistently, predicting the worse! That's why I put in the same boat as Kudlow who advised people to leave the market when Clinton got elected, get back in as Bush came in and leave again when Obama got elected. How does that help the average person! Can't they just admit that they have been wrong?

    If you want to rant against policies from the Fed that don't help the average person, be consistent and do the same when Congress or the President do the same and unfortunately Ricky has been quite silent over that last 15 years while inequality was rising so he he gets not credit from me.

    And thanks for posting – after hours discussion can be interesting!


  99. St J – Agreed – and Kudlow reminds me of the crypt keeper with a realllllly nice tie.  Straight up creepy.


  100. Chart / Sibe – Russell definitely behind right now.


  101. TSLA cover-ups keep marching in. I can't believe Musk actually has many people convinced of his eminent success. What I see is the next stock market scam with a few crooks involved waiting for payday. Watch out for when Musk can sell out. If this company had real value Carl the con man would be all over it. Lithium batteries are the problem not the solution. Titanium has to be welded in a non combustible environment. His new shield sounds so good until you forget strength, excessive cost, and realize it BURNS! The trouble with a lie is more lies to cover up previous lies, you end in a geometric curve, and someday enough lies is no longer possible. Beware everyone!


  102. Kudos has the creepy effect of a really well-preserved old guy that come from years of drug abuse.  Not many survive but, those who do tend to become wiry old men…


  103. BUSTER I sat on a board with one of the Chos

    so all i can say if Uh oh coz if i said uh cho

    phil would say god bless you


  104. Tesla/comments

    it seems the love hate relationship with the company as well as the stock continues- at least since the stock was at $35.

    why can't people on this site accept that Tesla the stock is NOT going down?

    just as amazon valuation has remained stratospheric over the past DECADE, so will tesla.

    lets embrace it and profit from it, instead of feeling victimized.

    (disclosure: I have personally owned neither stock, ever nor bought a tesla)


  105. Phil

    Have you ever used

    Bet to win?

    Thanks


  106. Good morning!  

    GS and JPM had huge beats, that's pushing us positive in the Futures from what was a turndown a little while ago AND RIA is buying LO for $27Bn – just for good measure, so anything other than new highs today would be very disappointing.  

    • Q2 earnings of $6B or $1.46 per share includes $500M or $0.13 per share in after-tax legal expense. Estimates were for earnings of $1.31 per share. About $3B returned to shareholders – $1.5B stock buyback and $0.40 dividend.
    • Consumer & Community Banking net income of $2.4B fallsl 21% Y/Y, with net revenue of $11.4B off 5%. Net interest income of $7B falls 2%. Noninterest revenue of $4.5B down 9% thanks to mortgage slowdown (originations fell 66% from a year ago). Credit loss provision of $852M compared with a benefit of $19M a year ago. Noninterest expense of $6.5B falls 6% driven by job cuts in mortgages.
    • Corporate & Investment Bank net income of $2B fallsl 25% Y/Y on revenue of $9B, off 6% (excluding impact of DVA). Banking revenue of $3.1B off 2%, with higher advisory fees and equity underwriting fees offset by lower debt underwriting fees. Markets & Investor Services revenue of $5.9B falls 12%, with fixed income revenue of $3.5B off 15%.
    • Conference call at 8:30 ET
    • Previously: JPMorgan Chase beats by $0.30, beats on revenue
    • JPM +1.8% premarket
    • Goldman Sachs (NYSE:GS): Q2 EPS of $4.10 beats by $1.05.
    • Revenue of $9.13B (+6.0% Y/Y) beats by $1.16B.
    • Press Release
    • Reynolds American (NYSE:RAI) says it will unload the Kool, Salem, Winston, Maverick, and blu eCigs brands along with some other assets to Imperial Tobacco (OTCMKTS:ITYBY) for $7.1B. The move is aimed at appeasing regulators.
    • The company says the acquisition of Lorillard (NYSE:LO) will be accretive within the first full year and will show a double-digit accretion rate in the second year and beyond.
    • A cooperation deal was struck between Reynolds and British American Tobacco (NYSEMKT:BTI) which includes sharing technology and development costs on next-gen tobacco products.
    • Premarket: Lorillard -3.7%, Reynolds American -0.2%, British American Tobacco (BTI) -0.5%.

    On top of that great news, we have Draghi saying the Euro should be even weaker and then Janet gets her turn at bad with Congress later:

    • Mario Draghi is warning that that euro zone recovery is at risk with a strong euro and highlighted that large-scale purchases of public and private debt do fall within the ECB's mandate to keep inflation low and stable.
    • EU growth has been facing a difficult time with the appreciated exchange rate threatening price stability. The euro came close to the $1.40 level in recent months from 1.20 against the dollar in mid-2012.
    • Draghi has also urged EU member states to implement tougher structural reforms to boost economic development.
    • ETFs: FXEEUOERODRREUFXULEURR
    • Janet Yellen will present testimony regarding the Fed's monetary policy this morning. Fed watchers are looking for clues for the timing of future interest rate hikes, especially after U.S. data in the second-quarter signaled the economy is gaining momentum.
    • Investors are still expecting a dovish stance from the Fed and that policymakers are in no rush to raise rates.
    • The expected news will probably keep the market rally going, but any hints of hawkishness will likely trigger a negative reaction.

    So it's new highs or bust today, watch 17,000 in /YM, 1,975 on /ES, 3,930 on /NQ and 1,160 is the laggard on /TF if you want to make a bull play, but very tight stops below that line and no play if the Dow can't hold 17,000.


  107. TSLA/Maya – I simply stopped playing it when it got too crazy.  We were long at $35 but, accidentally, we ended up short on calls we sold when it rocketed higher and we cashed our longs at about $85, thinking that was the end.  Then we spent a good part of last year rolling that position out of trouble until we finally got a nice dip, from $194.50 back to $116.10.  I think about $120 is fair for them now but not $220 so how should I "embrace" them at $220.  Should I tell people it's a good idea to buy them at this price, when I think it's ridiculous?   I'm not advocating shorts – other than obvious things like shorting yesterday's spike – just generally telling people to stay away.  

    We also stay away from AMZN, PCLN, GOOG, SCTY – not all stocks should be played.  There are 9,000 stocks out there and 8,800 are pretty predictable.  Unfortunately, like flies with flypaper – traders just can't stay away from the 200 most dangerous ones!  

    Bet to win/QC – I don't even know what that is.  


  108. Phil, A technical question for you on your favorite topic, the Butterfly.  I hold the BTU July $16 short call, sold at $0.83, now $0.14 with the stock at $15.84.  Given the downward trend of late is it smart to just let the call expire or best to buy it back (considering risk and transaction costs).  I plan to sell Aug. $16 calls.  I also held the July $16 short put but bought that back for a gain as the stock dropped below the strike price.  I'm considering selling the Aug. $15 puts also.  You thoughts would be appreciated.


  109. oh my
    /CL 99.82

     


  110. / RB    ..oh sh…..  coming straight on from 3.10 to 2.86  is any solid ground  there?