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Which Way Wednesday – IBM/AAPL Deal Boost Markets

Did you make your $1,000 yesterday? 

You would have if you read yesterday's morning post (subscribe here), where we picked the Russell Futures (/TF) short at 1,160 saying: "If the Russell FAILS 1,160, we'll be happy to flip short for another ride down to 1,150."  As you can see, we had plenty of time to get our planned entry at 1,160 and, as we expected, Yellen's speech disappointed and the markets sold off a bit – easy money!  

RUT WEEKLYWe even flipped back to bullish in the afternoon and, at the beginning of our Live Webinar (1pm), we were able to demionstrate a very quick $250 profit taking the Russell Futures long off that same 1,150 line.  In fact, you can see the big volume spike that came with our live call right on the chart! 

This morning, news of a deal between AAPL and IBM has both companies showing 2% gains pre-market.  For IBM, that's $5 and that's adding 40 points to the Dow Futures (/YM) pre-market and for AAPL, that's $2 and AAPL is 20% of the Nasdaq so 20% of 2% is 0.4% added to the Nasdaq from AAPL alone pre-market plus a nice effect on the S&P from both of those heavyweight stocks.

Under the agreement, IBM's employees will provide on-site support and service of Apple products inside companies, similar to the AppleCare service that Apple sells to consumers.  IBM said it planned to make more than 100,000 employees available to the Apple initiative. It is a rare partnership for Apple, which historically has avoided such alliances.  

"This is just the beginning," said Ms. Rometty, citing a statistic that most smartphones inside companies are used only for email and calendar. She said the companies hope to create new, serious business applications.

The companies said Apple and IBM engineers are together developing more than 100 new apps for various industries. The first batch of apps is expected to be available in the fall when Apple releases the next version of its mobile software, iOS 8.  "Apple is not an enterprise company, but that's not their DNA. It is IBM's DNA and IBM has had those relationships forever," said Gartner analyst Van Baker. "It's an unlikely combination but a very strong one if they can pull it off."

We're long on AAPL, of course – it was our stock of the year pick for 2014 and, now that they've split, the 2016 $450 puts are now the $64.29s and they are just $1.70.  Of course we have to divide the $41 we collected by $7 and that's net $5.85 per split share and that's already a very nice 70% profit.

The rest of the trade (see video) was the (adjusted) $64.29/85.71 bull call spread at $9.28 and we proposed 10 contracts, now 70 contracts, for net $24,000.  The bull call spread is already at $15.70 so 70 of those is $109,900 (100 unit contracts) less the $11,900 we'd have to pay to close out the short puts is net $98,000 – up 308% already (4 months after that TV appearance)!  

Of course, with AAPL already at $97.50 and on it's way to our $100 target, this spread still has the potential for the full $149,940 pay-offf, so another 50% still to be gained from here.  Actually, it's not a bad, conservative way to play AAPL from scratch – if making 50% in 18 months is enough to satisfy you, that is…

See, you don't need to read Philstockworld every day to make money – you can still make 50% in 18 months just picking up our scraps!  cheeky

Maybe it's a bit early but that makes us 3 for 3 with our Picks of the Year since we started them in 2012 (with BAC).  Last year it was also AAPL and we hit our 600% profit target on that one.  BAC paid 300% so $10,000 invested in our Trade of the Year in 2012 turned into $40,000 in 2013 and reinvesting that turned into $280,000 this year and, if we flipped all that into AAPL again, that would already be $1,120,000, with another $555,000 expected.  Nice work if you can get it!  

As we discussed in May's "How to Turn $25,000 into $500,000 in 15 Years" – you don't need to put it all on one stock to make some fantastic returns.  Even if you had a $250,000 portfolio and put $25,000 into BAC and netted $100,000 back and you took 1/2 of that and put it in AAPL and got $350,000 back and took 1/2 of that and put it into our new AAPL trade, that would now be $1,400,000 with another $700,000 coming (if AAPL holds $85.71).

At no point was more than 10% of the starting cash at risk (though margin is required and there's the downside risk of owning the stock) yet we are able to turn $25,000 into $2.1M in 4 years by compounding the returns (and making good picks, of course).  We don't expect to ALWAYS have a winner but you don't need to go all in to generate some pretty fantastic returns and the rest of your portfolio (90%) can use our more conservative strategies, aimed at getting those consistent 20% returns – as calculated above.  

Please keep that in mind before you chase the current rally.  We don't NEED to play that game.  We can use much more conservative strategies and put up CONSISTENT market-beating returns, year after year.  Not only is it profitable – it's much more relaxing!  

 


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  1. Good morning!

    I have to go get my license renewed this morning – hopefully won't be long.  


  2. Why are they calling Leon Cooperman, Lee?  It's grating on my nerves!

    (maybe I'm brainwashed, but I really like Leon.  Seems like a straight shooter)


  3. Phil – GM?  Excerpt from Barrons.

    Investors who look beyond the headlines, however, will find much to like. Light vehicle sales in the U.S. have returned to levels not seen since the summer of 2006. Europe's car market, which had a much worse slump than the U.S., has begun to recover, with nine consecutive months of growth. GM's market share rose to 18.9% in June from 17.8% in May, aided by strong sales of sport utility vehicles and crossovers.

    GM will struggle to top $3 a share in earnings this year after recall costs and other expenses. But next year it could earn $5, with two-thirds of the increase coming from simply moving past one-time costs, according to Sterne Agee analyst Michael Ward. If he's right, GM trades now at 7.5 times next year's earnings. That's an 18% discount to Ford—and a 50% discount to the market. Prior to its bankruptcy, GM historically traded at a similar valuation to Ford. When it resumed trading in late 2010 with a much stronger balance sheet, it traded at a premium to Ford.

    Investors who buy GM shares today get a 3.3% dividend yield, versus about 2% for the broad market. And payments could ramp up quickly. In addition to recall and victim compensation costs, GM is spending to restructure operations in Europe, which could return to profitability next year. It's also investing to expand production in China to five million vehicles a year by 2020 from three million now.

    GM also is buying back costly preferred shares and shoring up its pension. Free cash flow will be held to an estimated $3.9 billion this year, for a free cash yield of 6.5%. But next year's free cash flow is expected to jump 50%. By 2018, Wall Street predicts it will hit $10.2 billion a year, for a free cash yield of close to 17%. By that point, dividends should reach $2 a share per year, or 5.3% of today's price, up from $1.20 a share now.

    In other words, one of the market's lowest-priced stocks looks capable of delivering some of its fastest financial growth in coming years. That's a buying opportunity.


  4. Wednesday’s economic calendar

    12:00 AM ET


  5. European Indices advance on Chinese and U.K. data

    06:00 AM ET

    • Japan -0.10%.
    • Hong Kong +0.27%.
    • China -0.15%.
    • India +1.34%.
    • London +0.93%.
    • Paris +1.29%.
    • Frankfurt +1.08%.


  6. MBA Mortgage Applications

    07:02 AM ET

    • MBA Mortgage Applications:
    • Composite Index: -3.6% vs. +1.9% last week.
    • Purchase Index: -8% vs. +4% last week.
    • Refinance Index: -0.1% vs. +0.4% last week.
    • Fixed 30-year mortgage rates 4.33% vs. 4.32% last week.


  7. Mortgage servicers cut at Wells Fargo

    07:40 AM ET · NSM

    • An analysis of cash flow combined with continued regulatory issues has Wells Fargo cutting the nonbank mortgage servicers to Underweight from Market Weight, and Nationstar Mortgage (NYSE:NSM) and Walter Investment (NYSE:WAC) cut to Underperform from Market perform.
    • The team, however, keeps its Buy ratings on Home Loan Servicing (NASDAQ:HLSS) and PennyMac Financial (NYSE:PFSI).
    • NSM -1.5% premarket


  8. BlackRock higher by 1% after Q2 beat

    07:49 AM ET · BLK

    • Adjusted net income of $837M or $4.89 per share compares to $722M or $4.15 a year ago. Adjusted operating margin of 42.4% gains 110 basis points.
    • AUM of $4.593T up 19% Y/Y, with $38B of long-term net inflows during Q2. Q2 retail net inflows of $13.1B brings AUM to $534B. iShares inflows of $30.4B brings AUM to just under $1T.
    • CC at 8:30 ET
    • Previously: BlackRock beats by $0.43, beats on revenue
    • BLK +1% premarket


  9. MGIC Investment -3.6% after missing estimates

    07:57 AM ET · MTG

    • Net income of $45.5M of $0.12 per share vs. $12.4M and $0.04 one year ago.
    • Commenting on the proposed new GSE eligibility capital requirements, CEO Curt Culver expects MTG to have plenty to say during the comment period, but says the company can meet the standards even if they were to become effective in their current form.
    • Back to operations, new insurance written of $8.3B rises from $8B a year ago, with persistency rising to 82.4% from 78%.
    • Percentage of loans (excluding bulk) delinquent of 7.3% falls from 10.16% a year ago.
    • Conference call at 10 ET
    • Shares -3.6% premarket
    • Previously: MGIC Investment misses by $0.02, misses on revenue


  10. Rio Tinto iron ore output, shipments surge in first half of year

    07:43 AM ET · RIO

    • Rio Tinto (NYSE:RIO) +1.7% premarket after saying it produced a record 139.5M metric tons of iron ore in H1 of this year, up 10% Y/Y, and shipments rose 20% to 142.4M tons.
    • Rio says it produced 73.1M tons of iron ore in the June quarter, up 10% from the previous quarter when bad weather swept across the Pilbara region of Western Australia and disrupted mining there.
    • In June, Rio hit a target of being able to produce 290M tons in the Pilbara on an annual basis, and plans to spend a further $2B to increase output by more than 20% within three years.
    • Also reported a 23% increase in H1 copper production due to a stronger performance from the Kennecott mine in Utah, in which it holds a 30% stake, and the newly begun Oyu Tolgoi operation in Mongolia.


  11. China moves drilling rig from contested South China Sea waters

    07:50 AM ET · CEO

    • China is moving its drilling rig out of South China Sea waters claimed by both China and Vietnam, easing a standoff that sparked deadly riots in Vietnam and tense encounters between Chinese and Vietnamese vessels.
    • Cnooc (NYSE:CEO) says its deep-water HYSY 981 drilling rig had completed exploration and drilling operations off Triton Island, part of the Paracel Islands chain which is claimed by both China and Vietnam.
    • China’s government says its companies still have the right to explore the contested waters, raising the possibility that tensions could flare again.


  12. Tesla Motors to debut Model III in 2016 or 2017

    07:09 AM ET · TSLA

    • Tesla Motors (NASDAQ:TSLA) says it expects the Model III (originally called the Model E) to go on sale in 2016 or 2017.
    • The EV automaker could give a first look to the public of the next-gen model at the 2015 Detroit Auto Show.


  13. U.S. Bancorp gains after earnings beat

    08:10 AM ET · USB

    • Net income of $1.495B or $0.78 per share vs. $1.484B and $0.76 one year ago. The quarter included the $200M FHA mortgage settlement along with $214M pretax gain from sale of Visa shares – combined, the two had no impact to the headline number.
    • Net interest income of $2.744B up 2.7% Y/Y, with NIM of 3.27% down 16 basis points.
    • Noninterest income of $2.444B up 7.4% Y/Y, boosted by the previously-mentioned sale of Visa shares. Mortgage banking revenue of $278M fell 30%, but modest gains were seen across nearly all the rest of the bank’s other fee categories.
    • Noninterest expense of $2.753B up 7.7% Y/Y thanks to the previously-mentioned FHA settlement, along with a 2.5% rise in compensation expense.
    • ROA of 1.6%, ROE of 15.1%, and efficiency ratio of 51.3% (after excluding notable items) all continue to lead the industry.
    • CC at 8:30 ET
    • Previously: U.S. Bancorp beats by $0.01, beats on revenue
    • USB +1.6% premarket


  14. Another big bank beats; this time BofA

    07:25 AM ET · AIG

    • Net income of $2.3B or $0.19 per share includes pretax litigation expense of $4B, or $0.22 per share after tax.
    • Net interest income of $10.226B falls 5% Y/Y, with NIM off 2 basis points to 2.26%.
    • Noninterest income of $11.734B falls 4%. Consumer and Business banking net income of $1.788B rises 29% from a year ago, with mobile banking customers of 15.5M up 17%. Consumer Real Estate Services net loss of $2.8B compares to net loss of $930M a year ago, with 1st-mortgage originations off 59%. Global Wealth and Investment Management net income of $724M falls from $759M. Global Banking net income of $1.353B vs. $1.3B a year ago. Global Markets net income of $1.1B gains 14%, with FICC revenue of $2.4B up 5% Y/Y.
    • Noninterest expense of $18.5B rises from $16B thanks to litigation expenses. Excluding that, noninterest expense of $14.6B declined 6% as the bank continues to cut staff, particularly in LAS (legacy mortgage servicing).
    • The bank settles with AIG over all MBS issues for $650M, and AIG agrees to pull its objection to BAC‘s $8.5B private-label securities settlement (the Article 77 proceeding).
    • Tangible book value per share of $14.24 up from $13.81 at end of Q1.
    • Shares flat premarket
    • Previously: Bank of America beats by $0.12, beats on revenue


  15. Futures gain behind Apple/IBM deal

    07:32 AM ET · SPY


  16. VW looks to lower annual savings by €5B

    06:38 AM ET · VLKAY

    • Volkswagen’s (OTCQX:VLKAY) chief exec has demanded senior managers generate €5B in annual savings by 2017 as the company faces falling sales, weak growth and high development costs.
    • “This is urgent because today the profitability of our brand is still too low,” warns CEO Martin Winterkorn. “That is why we must now take action that is clear, effective and sometimes painful.”
    • Sales have been declining for the automaker in major markets such as the U.S., Brazil, Russia and India, and have been simultaneously hit by the impact of the strong euro.


  17. Gtech to buy IGT for $4.7B

    05:56 AM ET · GTKYY

    • Gtech (OTCPK:GTKYY) has agreed to buy International Game Technology (NYSE:IGT) in a cash and stock deal worth $4.7B.
    • Gtech will pay an 18% premium on IGT’s yesterdays closing stock price of $15.50 per share. Total transaction value is approximately $6.4B, as Gtech will assume $1.75B in existing IGT debt.
    • At a time when the gambling industry is experiencing slower growth, the new deal will link the world’s main provider of lottery systems with the largest slot-machine maker.
    • IGT +8.7% premarket


  18. Report: Samsung, Under Armour to partner for wearable devices

    04:37 AM ET · SSNLF

    • Samsung (OTC:SSNLF) is looking to partner with Under Armour (NYSE:UA) to increase its wearable devices product line, South Korea’s Yonhap news agency reports.
    • A meeting was stated to have taken place between Lee Jay-yong, the heir of Samsung Group, and Under Armour CEO Kelvin Plank earlier this month discussing ways to combat Apple-Nike’s wearable device market share.
    • Apple and Nike have been connecting sports wear with smart devices since 2006.


  19. CME examining electronic livestock trading hours

    04:15 AM ET · CME

    • The Chicago Mercantile Exchange (NASDAQ:CME) has begun a review of electronic trading hours for its cattle and hog contracts and may decrease trading hours to concentrate volumes and curb market volatility.
    • “We’re in the early stages…we’re beginning the process of conducting a review based on customer feedback,” says CME spokesman Chris Grams.


  20. BRICS launches bank to offset Western-dominated financial system

    03:58 AM ET · EWZ

    • The long-awaited New Development Bank has been launched after BRICS (Brazil, Russia, India, China and South Africa) leaders put their finishing touches on the $100B bank and currency reserve pool aimed at reshaping the Western-dominated international financial system centered around the IMF and World Bank.
    • The launch marks the first big accomplishment by BRICS countries, which account for almost half the world’s population.
    • The bank is scheduled to start lending in 2016. Membership is open to other countries but the capital share of the BRICS cannot fall under 55%.
    • ETFs: EWZ, RSX, EPI, INDY, RUSL, PIN, EZA, INP, INDL, RSXJ, ERUS, RUSS, DSUM, CHIX, INXX, INDA, RBL, BRZU, BZQ, UBR, BRZS, DBBR, CHLC, FBZ, RUDR


  21. Reuters: Microsoft to cut 1,000 jobs in Finland

    03:24 AM ET · MSFT

    • Microsoft (NASDAQ:MSFT) is preparing to cut 1,000 jobs at its Nokia unit in Finland. The plan is line with a Bloomberg report from earlier this week which suggested a large amount of pending lay offs.
    • The reductions will close former Nokia research and development unit in Oulu which employs 500 people, Reuters reports. The other cuts will come from other areas across Finland.
    • Total Microsoft job cuts may exceed the 5,800 record lay offs in 2009.


  22. Tax inversions set off alarm bells

    03:05 AM ET

    • The Obama administration is calling for new legislation that will limit the benefits for U.S. companies to reincorporate overseas for tax benefits.
    • In the last decade, 50 U.S. firms have relocated for tax inversions.
    • As a result, Treasury Secretary Jacob Lew has written to congressional tax-writing committees stating lawmakers “should enact legislation immediately…to shut down this abuse of our tax system.”
    • Authorities are still hopeful that a comprehensive tax rewrite can also limit inversions on a retroactive basis.


  23. S&P willing to negotiate with DOJ over lawsuit

    01:58 AM ET · MHFI

    • Standard & Poor’s (NYSE:MHFI) is willing to reopen talks regarding its pending lawsuit with the Department of Justice over the inflated ratings it gave to shoddy mortgage bonds prior to the financial crisis, WSJ reports.
    • Those securities cost investors billions when they later soured. Previously, S&P tried to ignore the negotiation process, until the DOJ filed a lawsuit in February 2013. The ratings agency is now looking to settle for up to $1B.
    • Ratings agencies have remained largely unscathed by the litigation ensuing after the financial crisis. Most firms have argued that their ratings are independent opinions and statements of fact.


  24. GM under fire at the Senate

    02:40 AM ET · GM

    • All eyes will be on GM (NYSE:GM) testimony at its Senate hearing on Thursday, when Senators will drill the automaker to why senior execs did not recall cars containing the faulty ignition switch over a decade earlier.
    • At center stage is General Counsel Mike Millikin, whose staff signed off on wrongful-death payouts dating back to 2007 involving deaths in accidents which the air bags failed to deploy.
    • Defending his position ahead of the Senate subcommittee, Millikin states, “We had lawyers at GM who didn’t do their jobs, didn’t do what was expected of them…those lawyers are no longer with the company.”
    • “I intend to ask why these settlements are being kept secret and demand GM make them public,” says Senator Richard Blumenthal.


  25. Russian sanctions expected to increase at EU summit

    02:16 AM ET · RSX

    • European leaders are expected to increase sanctions against Russia at an EU summit today, following the latter’s lack of concrete steps to de-escalate the Ukraine crisis. This will mark the first time EU sanctions will be used to cover businesses that are benefiting from the unrest in eastern Ukraine or the annexation of Crimea.
    • Western officials say Russia is funneling weapons, armored vehicles and fighters across the border.
    • Both Ukraine and Russia continue to accuse each other of cross-border attacks, which is sparking an even greater separatist conflict.
    • ETFs: RSX, RUSL, RSXJ, ERUS, RUSS, RBL, RUDR


  26. Court revives BP retirement plan lawsuit filed after oil spill

    Yesterday, 07:11 PM ET · BP

    • The 5th U.S. Circuit Court of Appeals in New Orleans today revived a lawsuit in which participants in BP employee retirement savings plans alleged they were deceived into buying and holding BP stock before and after the 2010 Gulf of Mexico oil spill.
    • The participants say the value of a BP stock fund where their money was invested fell by $1.85B in the months after the Deepwater Horizon rig exploded; they say BP misled them as investors, and as early as 2007 overstated the safety controls the company had in place.
    • The lawsuit had been tossed in 2012, finding that plan fiduciaries enjoyed a legal presumption that they acted prudently, but the U.S. Supreme Court did away with the presumption last month in a different case.


  27. Oracle unveils big data search software

    Yesterday, 07:07 PM ET · ORCL

    • Oracle’s (NYSE:ORCL) new Big Data SQL software allows users to run joint queries across both SQL databases such as Oracle’s flagship 12c, and semi-structured and unstructured data stores such as Hadoop big data framework and NoSQL databases.
    • Hadoop and NoSQL are widely used in big data projects due to their scalability and support for a variety of data formats. The Oracle solution runs on top of the company’s Big Data Appliance – 3rd-party hardware support will be added if demand is strong. The appliance runs a Hadoop distribution from Cloudera, which recently received funding from Intel at a $4.1B valuation.
    • Microsoft has also shown an interest in developing hardware/software bundles that support joint SQL/unstructured data queries. Both Microsoft and Oracle are hoping SQL databases, which still offer advantages in data consistency and complex query support, play a role in a healthy percentage of big data projects as spending on them takes off.


  28. More on Yahoo: Display ads slump again, search healthier

    Yesterday, 06:32 PM ET · YHOO

    • After growing 2% Y/Y in Q1 (its first quarter of positive growth in some time), Yahoo’s display ad revenue (ex-TAC) fell 7% in Q2 to $394M. A 24% drop in ad prices (hurt by mobile?) more than offset a 24% increase in ads sold.
    • The display weakness comes as eMarketer forecasts Yahoo’s share of global digital ad spend will fall to 2.52% in 2014 from 2.86% in 2013 and 3.36% in 2012.
    • Search revenue (ex-TAC) was healthier: It rose 6% to $428M after growing 9% in Q1. Search click revenue (excludes Microsoft payments) rose 19%, with ad clicks growing 3% and ad prices 15%.
    • Americas revenue (75% of total) -2%, EMEA +2%, Asia-Pac -8%. Opex +7% Y/Y to $1.002B, thanks in large part to rising R&D spend.
    • Ahead of the Alibaba windfall, Yahoo ended Q2 with $4.3B in cash/marketable securities.
    • YHOO now -2.1% AH. Prior coverage.


  29. More on Intel: PC/server growth picks up, mobile losses still heavy

    Yesterday, 06:06 PM ET · INTC

    • As expected following its guidance hike, Intel’s PC Client Group sales staged a turnaround in Q2, growing 6% Y/Y to $8.7B (63% of revenue) after falling 1.5% in Q1. Rising margins helped its op. profit grow 41% to $3.7B.
    • Data Center Group (server CPU) sales +19% to $3.5B after growing +11% in Q1. Op. profit +40% to $1.82B.
    • Notebook volumes +9% Y/Y, but ASPs -7%. Desktop volumes +8%, ASPs +2%. Data center platform volumes +9%, ASPs +11%.
    • Internet of Things (embedded product) sales +24% to $539M, op. profit +26% to $155M. Software/services sales +3% to $548M, op. profit was just $8M vs. a $1M loss a year ago.
    • The Mobile & Communications Group (mobile processors, baseband chips, Wi-Fi, and Bluetooth) remains a cash sinkhole: Revenue was officially just $51M due to contra revenue payments, and net loss was $1.12B (up from $761M a year ago). Losses should narrow as contra payments decline, but are expected by the Street to remain sizable for a while.
    • Sales from the “All Other” segment (covers flash memory and foundry, as well as one-time charges) rose 16% to $517M, but the segment also saw a $756M op. loss, up from $590M a year ago.
    • Gross margin is expected to receive a boost in Q3 from lower unit costs and higher volumes, and to be pressured by lower ASPs.
    • With huge buybacks on the way, Intel ended Q2 with $17.3B in cash/investments ($11.2B offshore), and $13.2B in debt.
    • INTC +4.2% AH. Prior coverage.


  30. Barron’s: GM stock looks dirt cheap

    Yesterday, 05:57 PM ET · GM

    • GM is seeing strong results on the sales floor, and with a rock-bottom valuation and 3.3% yield, shares could rise 30%, according to a Barron’s profile.
    • Investors who look beyond the recall headlines will find much to like in GM, Jack Hough writes: U.S. light vehicle sales are the strongest since summer 2006, Europe’s besieged car market has begun to recover with nine straight months of growth, and overall market share rose to 18.9% in June from 17.8% in May thanks to strong sales of SUVs and crossovers.
    • GM will struggle to top $3 in EPS this year after recall costs and other expenses, but next year it could earn $5, with two-thirds of the increase coming from simply moving past one-time costs, Sterne Agee says; if that’s right, GM now trades at 7.5x next year’s earnings, an 18% discount to Ford (NYSE:F) and a 50% discount to the market.


  31. Oil Lines

    R3 – 103.29
    R2 – 102.16
    R1 – 101.27
    PP – 100.14
    S1 – 99.25
    S2 – 98.12
    S3 – 97.23


  32. Maybe we can start being more optimistic about health care costs:

    http://www.vox.com/2014/6/15/5807046/orszag-its-time-for-some-optimism-about-health-care-spending

    I like to say, as a former director of the CBO, that I can assure you the agency doesn't like to update its numbers very rapidly in response to new information. Depending on how you do the calculation, we're talking about a markdown of 900 billion to $1.2 trillion in the ten-year deficit numbers, which shows what a disproportionate effect it could have on our long-term fiscal outlook.


  33. People voting against their economic interest:

    http://poq.oxfordjournals.org/content/78/S1/255.abstract

    However, the 77.5 percent of voters under age 65 who believe they are net beneficiaries of federal spending are as likely to vote for Romney as for Obama and as likely to be Republicans as Democrats. Voters who live in states that receive more in federal funds than they pay in federal taxes are less likely to vote for Obama or to be Democrats. For most of the electorate, dependence on federal spending is unrelated to vote choice.


  34. GM- one of the smartest moves I ever made prior to joining PSW was picking up GM warrants for pennies when they first emerged from bankruptcy. I bought them for $.39 then as bondholders dumped them to recover cash I guess. I never asked why they were available, just took the risk that they would recover since the government wasn't going to let them fail again They were convertible to shares at $10 until 2016. When they started paying a dividend again I converted the warrants and effectively own the shares for $10.39. I reinvest the dividends and have built a very nice position in GM for practically nothing. Hopefully this opportunity is once in a lifetime, but unfortunately history has a way of repeating, so I relate this to tell you all to be alert to these types of situations. 


  35. GM- just one other thought on this, it was the last and only time a stock broker ever did me any good.


  36. Buffett's favorite indicator (GDP / Market cap) – Japan and US comparison:

    http://mebfaber.com/2014/07/15/buffets-favorite-indicator-for-japan/

    srv

    get

    Japan looks cheap now!


  37. Surprise, the Chinese GDP shows a 7.5% growth, exactly as planned:

    http://qz.com/235461/china-knows-it-has-a-problem-but-it-just-cant-kick-the-investment-habit/

    The superficially triumphant return to 7.5% growth this quarter actually means China’s leaders are unable to kick their addiction. Just yesterday, a central bank official said Chinese banks will lend 9.5 trillion yuan ($1.5 trillion) this year—the biggest credit surge since the 2009 financial crisis.

    The tricky thing with chronically puffing up your GDP data is that it makes it really hard to tell what’s really happening in the economy. (Goodhart’s law, named for a UK banker, states: “When a measure becomes a target, it ceases to be a good measure.”)  With good reason, the government has been charily watching the housing market, prodding banks to lend more every time new data shows an ugly drop in sales.

    But meanwhile, the “real economy”—meaning companies that don’t enjoy government support—is showing sings of weakness at “perhaps an unprecedented degree, in both capital expenditure and loan demand,” concluded Leland Miller and Craig Charney (paywall), the heads of independent research firm China Beige Book.

    That would be like US banks lending $3T… I guess we could grow faster with that kind of money. I don't see how that ends well.


  38. That wasn't so bad!  

    Futures not too impressive considering IBM, AAPL and INTC and also now TWX up 15% on news that FOXA offered them $80Bn ($85/share) and they turned it down.

    Clearly the money is still sloshing around the market so no point in getting in the way. 

    Lee/Burr – I think that's what people do call him.  

    GM/Burr – I'd still let them have earnings before taking the bull side.  Other than all this recall BS, they are very strong but 21M cars is quite a lot of recall BS to wade through. 

    Health care/StJ – Don't hold your breath.  I was reading something from GOP strategists that are looking at ways to begin to dismantle it if they take the Senate in November and they feel if they get the Presidency in 2016, they can have Obamacare obliterated by the end of that year.  As noted in your other article – people are just idiots (and cutting education spending keeps them that way!).

    Warrants/Crags – Very nice call and good point, these are the opportunities we have to learn to grab.  

    China/StJ – We should sell the over/under bets on their GDP!  


  39. Oops! 

     
    • June Industrial Production: +0.2% vs. 0.4% consensus, +0.5% prior (revised).
    • Capacity utilization 79.1% vs. 79.3% consensus; 79.1% prior.

  40. More oops:

    • Net foreign inflow of long-term U.S. securities were $35.5B, with net inflows by private foreign investors of $13.1B and net inflows by foreign official institutions at $22.4B.
    • Taking into account both foreign and U.S. securities, the net foreign purchases of long-term securities were $19.4B vs. $27.4B expected, -$41.2B (revised) prior.
    • Foreigners decreased their holdings of U.S. T-bills by $4.9B.
    • Report

    That is revised from -24.2Bn – so roughly 100% worse than reported last month!  This market is build on a house of very FAKE cards!  


  41. Good Morning!


  42. Obamacare / Phil – I think that they will find it hard to dismantle now especially with these numbers:

    A poll of Obamacare enrollees published Thursday by the Commonwealth Fund found that 74 percent of newly insured Republicans are happy with the plans they bought. Overall, 77 percent of people who had insurance prior to the rollout of the Affordable Care Act said they are pleased with the new coverage they obtained in the last year.


  43. At least inflation is flying: 

    • June Producer Price Index: +0.4% M/M vs. +0.3% expected  and +0.6% prior. -0.2% Y/Y.
    • Core PPI +0.2% M/M vs. +0.2% expected and -0.1% prior.

    Finally good news for CCJ! 

    We have a CCJ spread in the Income Portfolio and I'm going to want to improve that one by rolling our 10 Jan $19 calls ($1.70) to 10 2016 $13 calls ($6.90) for + $5.20 ($5,200).  It's not in the LTP so I'd like to sell 10 2016 $20 puts for $3.45 ($3,540) to get our toe in the water in that portfolio.  

    Cameco Provides Update on Cigar Lake Mine


  44. Burrben – What did Mr. Cooperman have to say ?   He's one of my favorites.


  45. SPY Jul4 (Weekly) 198 Calls from yesterday….done.  Another 34c. 


  46. Obamacare/StJ – That 74% doesn't contribute as much to the GOP at the 0.01% of insurers and doctors, hospitals and drug makers that want it gone.  For a lot of those guys, it's their only issue for 2014 and 2016.   For example:

    According to the National Journal’s Influence Alley, at the very same time the AmericanHealth Insurance Plans (AHIP)—the health insurance industry super lobby—was cutting a deal with the White House leading to its stated support of the proposed Obamacare legislation, they were secretly funneling huge amounts money to the Chamber of Commerce to be spent on advertising designed to convince the public that the legislation should be defeated.

    How much money?

    A stunning $102.4 million spent over just 15 months.

    I have, for year, unsuccessfully tried to wake people up to the fact that the Chamber of Commerce is nothing more than a front for Big Business interests.  By pretending to look out for small businesses and taking their money for one thing while spending it on another – they do more to de-power small business owners than any other organization in America.

    The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform.

    The behind-the-scenes transfers were particularly hard to track because the law does not require groups to publicly disclose where they are sending the money or who they are receiving it from.

    This is really sick stuff!  

    Any industry group is free to take whatever position it believes to be in the best interests of its members. However, to present itself as being supportive of critically important proposed law while secretly spending over $100 million to defeat the very same legislation is the ultimate in duplicitous behavior and should make very clear just what the health insurance industry is all about.

    Actually, I wonder if the reason "Hobby Lobby" was encouraged by Conservative groups to embroil themselves in the Obamacare issue was to obscure the dirty Lobbying tactics that have been uncovered.  Now, if you try to Google "Health Care Lobbying" – you get tons of Hobby Lobby links instead.  

    Health Care Industry Spent $243 Million in 2013 Lobbying …


  47. RUT (/TF) back to 1,150 really fast!   Doesn't look like it will hold but a bit scary to short here.  /YM is the laggard below the 17,050 line (very tight stop above) but hard to knock down with IBM on fire.  


  48. Good Morning Phil,

    Do u think it's wise to buy some protection and add XOM Aug100 puts.


  49. Phil,

    /TF levels to go long please….thanks


  50. Phil, FCX climbing! what is causing this…..great for my jan 2016 P28 ? Thanks


  51. phil/QQQ, i didn't roll the 94 puts yesterday.  do you suggest rolling up to $96 today?


  52. CLF/Phil – with Rio Tinto's big result, should we look for a CLF earnings play? earnings on 7/24..


  53. One day to go and the Strangle portfolio is staying out of trouble this month!


  54. Phil/IGT – it looks like the deal is going through. I followed your adjustment suggestion to flip my position to the 2016 10/15 bull call spread once we heard a rumor about he buy out. What a great call!  That is on track for a full payout years ahead of time. 


  55. Also on IGT. The $5 spread still looks it costs a net $4.20. Should we be buying more of that, now that the sale is a go?  What am I missing?


  56. pharm, thanks for spy, you were right--they needed it…they wanted it!


  57. Wow, something in my town just blew up.  Felt a big shock wave, probably a gas main somewhere.  

    I see a plume of black smoke out near our firehouse, not even 1/2 mile from my house.  The camp at my lake is being evacuated through my back yard.  No idea what happened, Tina went to investigate…

    Wow, turns out a bus exploded (according to Jackies tweet network).  It was picking up kids for a camp trip and kids were on it and it caught fire – they got off but it blew up.  Happened roughly where that T intersection is at the right of our pond.


  58. XOM/Abhish – I like those from yesterday, now .70, as overall crash protection.  

    /TF/Jasu- Well 1,145 held up well yesterday but there was a dip to 1,140.  I still think it's safer to play over the 1,150 line with very tight stops below but we were very happy to make a quick $250 (1,152.50) and get out.  

    FCX/Jasu – Copper has certainly improved and China GDP numbers, fake or not, are a big positive for them.  

    QQQ/Lunar – Yes, I'd still do the roll but don't overhedge as INTC put up nice numbers. 

    CLF/Scott – I still like them long but we have enough losing positions on them that I'm sure not going to risk earnings.  As a new position, I'd just sell the 2016 $13 puts for $2.90 for a net $10.10 entry (35% discount) and see how that goes before getting more aggressive. 

    Strangles/StJ, Peter – Very nice!  

    IGT/Palotay – Very nice, congrats!  Sorry to see them go.  As to the spread, not missing anything, you are being paid 20% on the 20% chance the deal collapses.  Imagine for people who own IGT and expect to be realizing $18.15 (now $16.86), then giving you net .80 to buy $4.20 of downside protection makes perfect sense for them. 

    Yep, officially a bus exploded and caught fire.  Tina has cool video but the Mayor is running around asking people not to post them as it's too traumatic for the kids and she's on too many committees to disobey.  

    Oil got a 7.5Mb draw, gasoline up 171,000 – that's popping oil over $101 but just post-holiday re-stocking.

    • EIA Petroleum Inventories:
    • Crude -7.5M barrels vs. -2.6M expected, -2.4M last week.
    • Gasoline +1.7M barrels vs. +0.6M expected, +0.6M last week.
    • Distillates +0.2M barrels vs. +1.8M expected, +0.2M last week.
    • Futures +1.17% to $101.13.

    Maybe we'll get that re-test of $102.50 but I'm in no mood to go bullish on oil at the moment.  


  59. Phil – About your pond… Is Frank Zaccaria a local hero or does that spot represent where he was last seen?….. ;)


  60. I have squwak box taped, I'll watch it later today so I can FF through all the commercials.


  61. Several videos on Cooperman's visit to CNBC are here:

    http://www.cnbc.com/id/101840806


  62. LOL 1020!   Actually, it turns out he's the kind of guy they should name thigs after:

    Frank was born in Totowa on August 8, 1930, and has been a resident of West Paterson for the past eighteen years. He attended local schools and graduated from Passaic Valley High School in 1947, At the outbreak of the Korean conflict. Frank joined the U.S. Air Force, served four years, and achieved the rank of Staff Sergeant, while serving with the European Occupation Forces in Germany and Italy.

    After his discharge, he returned to civilian life and married Mary Brosnan, resumed his job at Continental Can Co., and enrolled at Seton Hall University earning a Bachelor of Arts Degree in Sociology. Frank continued his education and received a Masters Degree in Education from William Paterson College.

    After 22 years in a business career, which saw him rise from a factory line worker to Production Control Manager, Frank chose to pursue a long desired career in the field of Education for the Handicapped. In 1971, he joined the staff of the Passaic County Technical and Vocational High School as a teacher of the handicapped. It wasn't long after that he was appointed to the position of Coordinator of Cooperative Industrial Education, placing handicapped students in jobs. In 1985, Frank became Supervisor of Career and Vocational Education. The Board of Education appointed Mr. Zaccaria principle of that school in January 1987.

    In addition to his membership in the New Jersey Principal and Supervisors Association, the Epsilon Pi Tau Professional Society of Industrial Arts and Vocational Education the American Vocational Association, and the New Jersey Cooperative Industrial Education Coordinators Association, he was elected to `Who's Who' in American Cooperative Education in 1980.

    Frank's civic activities and interests include serving as Vice President of the Board of Trustees of Tombrook College for five years, Secretary to the West Paterson Planning Board, member of the Passaic County Boy Scouts of America's Executive Board, one of the founders of the Italian American Forum, member of the West Paterson Bi-Centennial Committee, and membership in the West Paterson American Legion Post #238.

    He has been an elected councilman of the West Paterson governing body since 1973, having held the various positions of Council President, Police Commission, Fire Commissioner and Finance Commissioner.

    He and Mary are members of Our Lady of Pompeii Church in Paterson. Their five childern, Frank X., Kathleen and her husband Richard Dellanno, Karyn, Mary, and Pamela, are the delight of their lives and a lovely tribute to their 33 years of married life.


  63. PHIL/CCJ

    How would you set-up as a new trade — What call would you sell? 


  64. CCJ/zten – not speaking for phil, but I bot shares and sold Jan2015 22 calls for a net 18.74 entry in an IRA. can also sell the Jan2015 $17 puts for .65 to make net 18.09 entry, and if put to you, you have a net 17.55 entry and can recover again for another $1+ knocked off.


  65. Phil/XRT – what's your view on XRT.  I'm finally showing a modest profit on my sept 87/82 spread. Close it down, or wait to see more earnings?


  66. So Frank is alive and well – it's nice to have a tribute like that, while still alive!  :)


  67. ….and Frank and I share the same birthday…. :)


  68. FU yhoo!!!


  69. Dclark41 – Thanks for the Cooperman link.  Look forward to his stock picks later today.


  70. Speaking of yhoo, I'm approaching my roll point.  I'm thinking of rolling the $37 long to $34 for $1.10


  71. Druckenmiller is torching the Fed..


  72. UBNT/wombat – I know you like their products.. are you following them as a stock? why so mopey.. questionable earnings coming up? patent lawsuits? can't sell product?


  73. CCJ/Zten – As above for the LTP, I'd just sell the puts and wait on earnings (31st) before making any additional commitments.  

    XRT/Palotay – Clearly retail sales are down.  We set our bar much higher ($103/98) but you have a chance too.  Just bail if you see the tide turning on various retail earnings/guidance (as will we with our longer spread).

    Zaccaria/1020 – No he died, that was just an old bio I found.  

    YHOO/Jabob – That's not good, down 5%?  WSJ is responsible for mathing down Yahoo's stake:

    Yahoo's fortunes have rested on its 24% stake in Alibaba, which is due to launch an initial public offering imminently. Assuming a market value of $150 billion for Alibaba, that stake is worth about $23 billion after tax—equivalent to about two-thirds of Yahoo's market capitalization.

    Suddenly $50Bn (25% of $200Bn) is now $23Bn and people are bailing.  Let them go and then buy more!  

    YHOO/JPH – Yep, I'd keep pressing them but 5% is a big drop – make sure they've found a floor before committing too much. 

    Don't forget the WSJ competes with Yahoo, as do other media outlets.  Of course they are going to paint a dark picture.  It's like when the WSJ tries to scare all investors out of NYT while offering them a buyout.  

    I think ad sales is one of those things where the mix is just wrong once in a while, for the year, they earned $272M vs $335M last year but X 4 = $1Bn + against the $34Bn valuation and even if you ONLY use the WSJs $23Bn AFTER TAX cash from AliB – you've got a net p/e of about 11.  

    $33Bn (down 3% more) is 10 and 10 is ridiculous so I'm all for selling 2016 $32 puts for $4 to net in at an even more ridiculous $28, though I think it's fine to sell the 2016 $35 puts for $5.50 too.  Those can be paired with the 2016 $30/40 bull call spread at $4 and that's a nice, easy way to play AliB being worth more than $150Bn.

    Druckenmiller/Jabob – Holy cow that speech almost put me to sleep!  Meanwhile, the comedy of Congress is going on over at Bloomberg as Yellen tries to explain basic economics to people who were elected by about 250,000 people who thought they sucked less than the other guy…

    UBNT/Scott – As I warned, having good products does not always translate into making money.  

    Submitted on 2014/07/08 at 12:03 pm

    CSCO/Wombat – What do you mean bad?  Just that UBNT has better stuff?  I wouldn't worry, corporations are going to risk network security on new companies in any great numbers.  It takes years to gain the confidence of IT departments.  As with IBM, no one gets fired for going with CSCO.

    We have the UBNT 2016 $45/55 bull call spread in the Income Portfolio from 5/28 and we've been waiting on selling puts for a nice pullback since.  If it does come back down, I'd be happy to add it to the LTP too but I wouldn't get too excited – competition is very stiff in that space.  

    "Build a better mousetrap, and the World will beat a path to your door" – Once you set up an online presence and lock in distribution deals with key national suppliers and build a national sales force to get promotional materials in the hands of purchase managers and have enough meetings with management to insure them that you have a reliable enough product to switch them too and you line up financing for your manufacturing and distribution hubs as well as parts depots – THEN the World will beat a path to your door.   AFTER THAT, investors may follow.  


  74. sccottmi / UBNT
    not worried about them at all. I have two full artificial buy writes ( $30 short puts )
    40-50 BLCS, 45-55 BLCS with money calls Aug calls at $50 and $60 – up about 12%

    In terms of their new product line, all I can relay is my personal experience. I've never seen anything so powerful on a prosumer manufacturer. I think its just a matter of time before institutions lock onto them.
    The only competition thats relevant is CSCO, but only enterprise IT dorks are fooling with CSCO. I'm long.

    Phil / Reminder 
    Fly Rolls
    DIS
    TXN
     

    Thanks >>>


  75. As expected, 1,145 held again on the RUT (/TF) – now we'll see if they can make that bounce back over 1,150.   /ES held 1,970 – that's a good sign.  /YM still below 17,050 but only dropped about 30 below so far.  

    Oil just under $101 (/CL), although that's pathetic with a 7Mb draw (one of the most all year). 

    Butterflies/Wombat – Good call, it's Wednesday, we should do those.


  76. Phil / Tina video: media suppression :) from you ? that hurts !


  77. Leon didn't give any picks, he just talked about the economy in relation to the market value.  Good points, nothing actionable other than that he feels we won't be crashing anytime soon.



  78. "Buying something at the right price is half the game," he said.

    His picks for 2014 include Actavis (ACT), Citigroup (C), Thermo Fisher Scientific (TMO), Atlas Energy (ATLS), Gaming and Leisure Properties (GLPI), KKR & Co. LLP (KKR), Nordic American Offshore Ltd. (NAO), QEP Resources (QEP), Supervalu Inc. (SVU), Louis XIII Holdings (577 HK), Monitise PLC (MONIF), and Sandridge Energy Inc (SD). 

    CNBC's David Faber asked him about Citigroup. Cooperman said he thinks the economy is coming back.

    Cooperman was also asked about Bank of America, which wasn't on his list. 

    "I missed that one. I should’ve stepped into the same bathtub as Buffett," he responded, referring to the time Warren Buffett said he got the idea to invest in BofA after taking a bath. 

    Last year, Cooperman presented 10 of his favorite stocks — Express Scripts (up 2.6%), Qualcomm (up 26%), Thermo Fisher Scientific (up  34%), Qualicorp (up 74%), Sandridge Energy (up 26%), Arbor Realty Trust (down 3%), Atlas Resource Partners(down 10%), Chimera Investment Corp (up 6%), THL Credit (down 12%), and KKR Financial Holdings (up 5%).On an equally weighted basis, his picks last year returned about 27%.


  79. Butterfly Portfolio Update:  Actually down 2% from last month as we were not so lucky with our targets this cycle.  Nothing we can't make up though.  

    • BTU – We bought back the Sept $17 calls ($1.08) way too early, thinking they finally were getting back on track.  BTU did pop to $17.21 after we did it but then crashed back to $15.70, now $16.23 but, on the whole, I still think over $18 by September so nothing to adjust – just waiting and seeing.
    • CZR – We may as well buy back those Sept $21 calls for .20.  Their big Ferris Wheel isn't doing so well in Vegas and they need that to generate cash – they are not in a position to bleed anywhere new.  That's making me a bit concerned and, since we're losing on the Sept $20 puts (now $3.90), I think we may as well sell the $16 calls for $1.60 to drop another net $1.40 into our pockets and then we'll see how things hold up and roll the losing side.  
    • DIS – The puts will, of course, expire worthless and the short calls are $3.20.  I don't want to roll to Aug because earnings are 8/5 and I have no reason to think DIS would disappoint so let's sell the Sept $85 puts for $2.25 and the Sept $85 calls for $2.95 as $5.20 ($5,200) is a nice amount of money to collect (5.2% of our portfolio) and gives us a good buffer in either direction.
    • JPM – This one is on track for our September target, so no worries here.  Still another $2.50 ($2,500) to collect as premium wears down.
    • TXN – Popped up a bit on us and the puts should expire worthless but the calls are $1.95 in the money, which isn't so great as we sold the set for $1.47, so fail for our second sale on them.  The short July $47 calls aren't worth rolling to Aug (earnings July 21st) but we can sell the October $48 calls for $2.20 and the October $47 puts for $1.50, so that will be our new set and $3,500 may not seem like much for a quarter but we only paid $6,350 for the longs, and we have another 5 sets to sell!  

    $25,000 Portfolio ($25KP) Update:  Up 1.6% since last month, the choppy market hasn't given us too many good opportunities to make trades.   No changes to our positions, we're generally waiting for earnings on our trades.


  80. Phil / TXN Butterfly – for the Oct puts, $47 are priced at 1.13/1.15 and the $48 are priced 1.49/1.54. I don't think the market has moved that much… which one are you rolling too? Thanks, Eric



  81. LOL.


  82. Income Portfolio Update:  We went to cash back in March and began re-establishing positions which, of course, costs money (the bid/ask spreads) on our balance sheets.  We're only using $133,750 in margin (out of $1M), so lots of room to buy and we still have $529,815 in cash.  On the whole, we're up 6.2% since last month, which is pretty good, but this conservative portfolio is only trying to get to 10% for the year, with the primary goal to establish a base of low-cost entries on long-term dividend payers.  This will take a few years to get running smoothly.  

    • Short puts on CHL, DIS, FCX, HOV and SBUX – No worries.  HOV great for a new entry still.  
    • TASR – Our entry is net $12 and they are at $11 so a bit off track but, as we discussed in yesterday's chat, on the whole I'd rather wait for the 2017 contracts to print before making any adjustments.  Ending up owning 2,000 shares of TASR (after doubling down) at net $8.50ish is EXACTLY the kind of long-term positions we want to end up with in this portfolio.  We also have the debit spread and I suppose I already meant to combine them with the short puts but didn't.  Hopefully next time I'll remember.  
    • UBNT – Almost time to add the short puts to this one.  I'd like to be sure they can take $40 back and my target is selling the 2016 $35 puts, now $7.20 for no less than $7, but hopefully $8.50 or better on more of a dip.  
    • CLF – Anything over $13 is a winner so no worries.  Pays a $150 dividend each quarter. 
    • NLY – Our net is $9.71 so also no worries.  Just paid $300 dividend on 6/27 (needs to be added)
    • OPTT – These guys took a bath recently but, fortunately, our net is just 0.79 x 4,000 shares = $3,160, so nothing to wring our hands over – we knew it was going to be speculative and, so far, it's not disappointing.  We're obligated to buy 4,000 more at $2.50 ($10,000) which would average us at $1.645 on 8,000.  At the moment, we have a $5,900 loss showing so it's not going to get much worse (hopefully), so we'll just give them a while to sort out this mess.  If no improvement by September, we need to bail or below $1 will be red flags.  
    • AAPL – I'm so glad we sold those puts – they for half the loss on the short calls.  Our bull call spread is "only" up about $29,000 out of a potential gain of $118,510 at $107.14 and we're on track for that – the rest is just details in between!  
    • ABX – On track and good for a new entry.  
    • CCJ – I sent out a note to roll those earlier.  Adjustments pending. 
    • CLF – Finally signs of life!  Great for a new entry but I'm not in the mood to add to this one as it's been nothing but trouble.  
    • CZR – Fine for our spread but they have too much trouble at the moment to call them good for a new entry. 
    • EBAY – At the low end of our range, good for a new entry. 
    • IRBT – An aggressive play, no payoff so far, good for a new entry. 
    • LULU – Getting away but good for a new entry.  
    • PFE – On track
    • RIG – Almost to the top of our range already.
    • TEX – Near the top of our range.  
    • TM – On tract and surprisingly still good for a new entry.  
    • TWTR – What a crazy stock!  Back to the top of our range.
    • WFM – Good for a new entry. 

    That's cool, we had one adjustment last month (AAPL) and now we have one more adjustment.  Just what we like for a lazy, low-stress retirement account!  


  83. Phil / DIS
    Clarification – we're rolling the $82.50 short calls to Sept $85 for -.17 debit ?


  84. Here we go with earnings tonight and we have some good ones:

    EBAY
    Consensus Estimate – 0.69
    Whisper Number – 0.70
    Average Move – 6.3%
    Priced into Options – 4.15%

    LVS
    Consensus Estimate – 0.89
    Whisper Number – N/A
    Average Move – 6.4%
    Priced into Options – 3.6%

    SNDK
    Consensus Estimate – 1.50
    Whisper Number – 1.40
    Average Move – 11.5%
    Priced into Options – 5.6%

    YUM
    Consensus Estimate – 0.75
    Whisper Number – 0.73
    Average Move – 4.0%
    Priced into Options – 3.6%

    EW pretty bullish on SNDK and YUM but neutral on EBAY and LVS. That low VIX is not really rewarding the potential risks.


  85. StJean/options

    When the VIX is low and these options are cheap before earnings, that's when it pays to take a shot and buy some instead of writing.  If EBAY has some wacky announcement with Icahn or great earnings and goes up 4 points, you made 400% if you bought the 53.50 for .20 and if you only buy 10, your downside is $200.  You can even reduce that by writing the 54.50 by almost 50%


  86. i am long SNDK, they might just blow after beating earnings estimate.


  87. actually if the stock stays where it is, a 50/51.50 buy write is better.


  88. Media suppression/Micro – That's why I mentioned it.  It's interesting how many subtle influences there are between actual news and the time you get to see or hear about it.  Even though my attitude as a reporter is "screw Keith" (the mayor), I can't fight my wife over something so trivial as town politics are really important to her.  With all the layers and layers of corporations sitting between you and reality – imagine how little of it you end up seeing!  The more we rely on 3rd, 4th, 5th and 12th parties to give us the news, the less we'll really know…

    Cooperman/Burr – C we like, KKR we have, SVU we're done with, MONIF we decided was a fun gamble a couple of weeks ago but only if they can prove they can hold $1 (no luck so far).  TMO is a good pick off the 50 dma at $118, ATLS not for me, GLPI came out of PENN and I've never looked to see what's what over there – could be interesting.  NAO is too new and no options, so no clue there, QEP too expensive for E&P – I don't know why he'd like them.   SD is another E&P that's no bargain – I don't know what his fascination is with those stocks.  

    TXN/Eric – Thanks, that's the Oct $48 puts we can sell for $1.50, not the $47 puts in the Butterfly Portfolio

    Buybacks/Pharm – Still a long way from peak madness going by that chart.  

    LOL Pharm!  Where is that from?  Surely SA hasn't sunk so low that they actually let things like that slip through?  

    DIS/Wombat – Yes, effectively.  Then we sell the puts for $2.25.  However, with the market looking toppy, my method is to sell the Sept $85s first and then put a stop on the July $82.50s (now $2.80) at about $3 and, hopefully, they pull back some into expiration and save us .50.  

    Earnings/StJ – YUM should have a tough time hitting numbers.  I don't think that breakfast taco BS did so well after the initial sample weeks.  LVS is interesting because the chance they DON'T move more than 5% seems very low.  EBAY and SNDK very hard to call but EBAY is low in our channel so I like selling puts.  

    EBAY Jan $50 puts are $3 and the 2016 $45 puts are $3.50 so figure, if you have to roll, net $42ish on EBAY entry.  That makes those short puts a nice earnings play. 

    LVS moves 10% every two weeks, how are earnings going to keep them in a tight range?  Aug $77.50 puts can be bought for $1.20 and $72.50 puts can be bought for $1.33 with the stock at $75 so you are paying $2.53 to be $2.50 out of the money and that means any move more than $5 (6.6%) in either direction will make money.   You should also be able to recover some of the losing side!  

    I don't see YUM clearing $85 with a current p/e over 33 and very high expectations built in after an over 10% run since May.  I think selling the Aug $82.50 calls for $2.50 against the Jan $82.50/87.50 bull call spread at $2.20 is fun as it's a .30 credit and you have $5 of cushion and, if YUM does go lower, you keep the .30 plus whatever is left on the long spread.  If the premiums were better I'd like it for the STP but they're not so I don't.  

    SNDK/Abhish – I like their chances after the INTC report but they are up over 100% from last year and they are only going to make about 15% more money.  At what point do we call things over-priced?  


  89. Phil / NLY – do you still like this as an existing holding?  I have held it for about a year since last August when it generated some commentary here. about flat performance yoy.  but up with the dividends.  wondering how safe it is with interest rates set to increase at some point.  I also hold PMT.  Thanks. 


  90. Beige Book out with "moderate" and "modest" used a lot to describe growth.  About the same as last time.

    Shouldn't be much effect, nothing for the bulls or bears to really sink their teeth into.  


  91. Scary chart:

    http://www.bloomberg.com/image/irVRN9gmnieY.jpg

    Look at the contribution levels in other countries – we have it good in the US! Social Security would have a nice surplus if we contributed 40% of wages!


  92. Phil ebay

    They are not doing that well for 3 reasons.

    1 Low end buyers are falling out completely

    2 Retail sales are down middle class tight

    3 Commissions of 9 + % plus 3 % pay pal make it hard to even break even on what didn't sell first line.


  93. /RB / Phil:

    I made a terrible mistake with  buying  2 /RB aug 14.  buying them at 3.0097 avg.  now at 2.89 , because I was out of my place made a mistake not creating a stop  ( problem of using  the system with smartphone), now sustaining a huge loss, question.

    /RB do you think it has any sign of recovery in the rest of the month?, RB is ending soon in this month.

    Do I roll  it to Sep ? what do you suggest.?


  94. Hello Phil,

    Can you post the video from Webinar yesterday? Thanks. BTW I greatly admire your postings.

    Shashi


  95. NLY/Terra – It's all about the dividends so yes, I always like them as long as they keep cranking out 10% dividends.  I like NLY BECAUSE they are good at managing rate moves (same team as CIM) but that doesn't stop them from moving with the sector on rate news.  You just have to ignore the crowd and accumulate/adjust when they sell off with the rest of the REITs.

    Retirement/StJ – Yep, it's all going to hit the fan pretty soon.  Raising retirement ages and cutting benefits has only bought us a few years.  I hate those charts that say "workers supporting one SS beneficiary" – that's not how the system works.  In theory, those beneficiaries put the money into a trust account that the Government managed for them so they could yield dividends when they retire.  The "problem" is the Government stole the money and left a non-interest bearing IOU in the lock box and now everyone who had 12% of their paychecks put aside for 40 years is screwed but BS statistics like that distract from the real problem.

    The government stole the money, they have to put it back – very simple.  There's no reason current workers should suffer for it, just print money and let THAT be the way you pump up the economy!  

    EBAY/Shadow – Paypal, Paypal and Paypal.  The way they rape you is how they make their money!  They should beat the .68 expectations (.63 last year) and all of last year they traded in the $50s, so why should they be below it now when they are making $3 a year (p/e 16.7)?  Compared to the rest of the market, this thing is a real bargain!  

    /RB/Advill – At $420 per penny per contract, you're talking $8K in losses – that's not good!  There was nothing in the current inventory that indicates gas should be more expensive.  I'd certainly pull the plug if $2.88 fails as there's not too much support back to $2.825.  Gasoline doesn't care that you missed a stop, it doesn't owe you a 10-cent move!  With luck, we'll be back over $2.90 into the weekend but you'll be lucky to get to $2.92 again.

    Replay link/Shash – I just requested it from Darwin.   Will be better when we take control next month. 


  96. God says, " Bullseye".


  97. Thanks Phil. wow those sndk calls are up 50% in half an hour. I don't know what to do take profit or wait for earnings lol.I am playing that with INTC money i made yesterday speculating earnings beat.


  98. Pharm – Another good one today:

    When Jesus said "Love thy neighbor", the "when it's politically convenient and they look like you" was implied.


  99. SNDK/Abhish – We only have two rules at PSW:

    Rule #1 – ALWAYS sell into the initial excitement.

    Rule #2 – When in doubt, sell half.  

    In other words, don't be a greedy bastard and take at least half off the table when  you get a pop like this.  Why risk earnings when you can lock in a nice gain?


  100. Done sold half, thanks phil. Sometimes i need someone to tell me that (many profits have turned losses for me in the past).


  101. Someone bought 9640 July 107c @3.55/ contract. Someone knows something!


  102. Phil – I'm currently long SFTBY instead of YHOO.  Not a full position at this point.  Add some YHOO here ?


  103. Just keep rolling in that debt…..

    2008 – $32T

    2014 – $53T


  104. Why is there a "income" portfolio worth 500k and a "long term" portfolio worth 500k?  I'm having a hell of a time getting some of my portfolio positions to agree 


  105. Market looking weak. Do we expect a hockey stick into close?


  106. Phil – Could you post the LTP?  No need to comment if you don't want.  I'm just looking for the SCO spread and a few others.


  107. SCO/BURR:  Until Phil posts it, maybe this will help;

    Thursday, July 10, 2014

    I know the Futures are very exciting but don't get so wrapped up in them that you forget to take nice, sensible trades like SCO.  We did 20 of the Oct $22/26 bull call spreads, selling the $24 puts for net $1,200 in the STP and SCO is already at $26 so, if oil stays below $102 into Oct, we get $8,000 per set.  That's 566% in 3 months without all the daily heartache!  


  108. Albo,

    Have been curious about a position in Softbank also but am concerned that it is only listed in the pink sheets. How have you found trading pink sheet stocks? How do you control risk without hard stops? Mental stops become market orders when breached?

    Thanks


  109. Jbur – Yep I have that as live position.  My question to Phil a few days ago was do we adjust the spread as /CL broke below 100.  While the underlying is ontrack to be below 102, SCO itself will degrade just like VXX does, therefore I believe that oil will have to be lower than 102 to make SCO profitable.  I wish I knew the ratio of decay but it's not constant due to how a triple levered etf works.  It doesn't track 3x Oil well over a long time frame.


  110. You're welcome Abhish, that's what I'm here for!  wink  Doesn't it feel good to cash in a winner?  Get used to that feeling and you'll be able to make it a habit.  

    YHOO/Albo – If you already have SFTBY, then YHOO would be redundant. 

    Debt/Pharm – So if we figure $70Tn global GDP, that's over $4Tn a year in debt so 6% of our GDP growth (ie. all of it) is debt.  

    Income Portfolio/Burr – The Income Portfolio is far less aggressive, more suited for retirement accounts.  After a few years, it should settle down to about 20-30 steady positions that throw off a nice quarterly income through option sales or dividends.  The LTP, on the other hand, is aggressively long and pairs with the STP.  Usually a person wouldn't play both the LTP and the Income Portfolio but, of course, many trades in one are good for the other since they both look for long-term gains.  

    Stick/Den – I don't see why it would.  Yesterday we were down on big volume, the pattern is holding, up on low volume, down on big and the "smart" money keeps heading for the exits while the MSM calls the sheeple in to hold the bags.  

    SPY 5 MINUTE

    LTP/Burr – Tomorrow we'll go over that.  SCO is in the STP.  Last update is here.

    The good news is all our strong bounces are green EXCEPT the RUT, which is still under the weak bounce at 1,155.  Should we just ignore it?  Do 2,000 small caps not matter?

    Dollar at 80.625 means they can jam it down to give us more lift, too. 


  111. Forgot to mention – today, with 30 mins to go, SPY volume is 58M.  Figure even 30M into the close would still be 20% lighter than yesterday.  


  112. Phil

    EBay may be down for a reason, their business is down a lot

    Internet has been up and down all day. When they just called back to ask if I'm running I asked what happened? Bad router. Was it CSCO? Yes! Not the first either.


  113. Phil – others confirming your thoughts on YUM,   near term 16000 puts traded vs. 9000 calls


  114. IMAX getting low in their channel


  115. @stockbern

    Wrote some IMAX Aug 23 puts before for .45 and .40


  116. Actually I'm the entire volume, 90


  117. < I hate when that happens >


  118. Biotechs…overvalued…????  Not really.


  119. TSLA model III will not compete with BMW model 3?? other than the number if it has the same number of doors BMW is not electric!


  120. EBAY/Shadow – We'll find out tonight.  

    IMAX/Stock – Hmm, we do like them when they are cheap but people are bailing ahead of earnings (24th).  I guess because summer box office is off but I didn't see evidence of that in IMax theaters.  Those were packed whenever we went.  I think people have gotten into going to movies for IMAX and, otherwise, waiting to get things at home.  If they go lower, I won't be able to resist adding them to the LTP, anything below net $20 seems good to me.

    TSLA/Chuck – Yeah in 24-36 months!  I like how the key to getting the cost of the car down to $35,000 is the batteries from the GigaFactory that also doesn't exist yet.  

    BMW/Shadow – Please don't confuse Mr Musk with facts!  


  121. shadow, the BMW you are referring to is the i8.  Its going to "blow the doors off" sort of speak of a Tesla.


  122. Problem with the i8 is cost.  It is 2x as much as the average TSLA and the range still isn't the same.  It'll be a competitor but it is not apples to apples.


  123. Musk is one thing a con man. Bet he has no clue BMW 3 and 4 series is 2 to 4 doors, 4 to 6 cylinder turo, front, and a 12Volt standard lead acid battery mounted in the back. Rear wheel drive like the S, III?


  124. stockburn I8

    is a plug in hybrid, 40 miles max on 25KW battery sport car building 500 per year @ $135,000, The model 3 or 4 is $35,000 up to M @ $70,000 plus. Musk is full of shit!


  125. The new material, called Vantablack, is a coating made using carbon nanotubes, which absorbs all but 0.035 percent of visible light. Grown on a sheet of aluminum foil, the coating grabs hold of light and won't let go: photos ping into the gaps between the nanotubes, bounce around within the structure, and are slowly absorbed without ever bouncing back into the air.

    There's a New Material That's So Black You Can't See It

    In fact it, absorbs so much light that even shapes and contours of an object become invisible when it's coated with the stuff. Ben Jensen, the chief technical officer of Surrey NanoSystemswhich developed the material, explains what you can see when a sheet of material coated in it is crumpled and creased:

    "You expect to see the hills and all you can see … it's like black, like a hole, like there's nothing there. It just looks so strange."

    But what do you do with something so black? Well, think astronomical cameras, telescopes and infrared scanning systems , where it can be used to calibrate devices— this is, afterall, the blackest black thing in existence. It is, however, reported to be "very expensive." Surrey NanoSystems won't say how much, exactly, but goths and French philosophers needn't apply just yet. [Surrey Nanosystems via Independent]


  126. Phil

    Nano tubes are not that expensive to make but I suppose the need billions to make the disappearing black.


  127. What the Hell is AAPL doing today?  Spiked down to $94.74 after the bell, that's down from $98 earlier.

    EBAY small beat.  Changes in GOOG algos being blamed for dragging sales.  Down about 1%.

    • eBay (NASDAQ:EBAY): Q2 EPS of $0.69 beats by $0.01.
    • Revenue of $4.36B (+12.4% Y/Y) misses by $20M.
    • Press Release

    YUM beats but misses revenues, also down 1%, which works fine for us. 

    • YUM! Brands (NYSE:YUM): EPS of $0.73 beats by $0.01.
    • Revenue of $3.2B (+10.3% Y/Y) misses by $50M.
    • Shares -0.86% AH.
    • Press Release

    SNDK beats but not enough to sustain that run (as expected):

    • SanDisk (NASDAQ:SNDK): Q2 EPS of $1.41 beats by $0.02.
    • Revenue of $1.63B (+10.1% Y/Y) beats by $30M.
    • Shares -7.6%.
    • Press Release

    LVS already with a quick 4% move on a 5% miss – looking good for that spread.  

    • Las Vegas Sands (NYSE:LVS): Q2 EPS of $0.85 misses by $0.04.
    • Revenue of $3.62B (+11.7% Y/Y) misses by $220M.
    • Shares -3.8%.
    • Press Release

    Nanotubes/Shadow – That stuff is so cool!  Clearly they need some marketing people – screw defense contractors, girls in NYC would love to wear this stuff…


  128. And money is no object when it comes to clothes in NYC! 


  129. Nailed SNDK Phil


  130. Did this take AAPL down?   Silly if it did, takes them about 15 minutes to make $400M:

    Apple may refund $400M in digital book settlement


  131. The carbon black might be very good for passive solar and other applications where energy absorption is a plus. 


  132. SPY and TNA also down after market close.


  133. Despite the new highs I am not feeling very enthusiastic about this market.  Sure would like a solid pull back.  Something noticeable on a one year chart, or even a one month chart would be useful.


  134. That's one horrible company and we want to let them take over another one. Worse is that in so many places you don't have an alternative:

    http://gizmodo.com/this-is-why-its-so-impossible-to-quite-comcast-1606193199

    And

    http://www.theverge.com/2014/7/16/5909591/here-s-why-your-comcast-rep-is-yelling-at-you

    In other words, the incentive structure is really about punishment. Reps start out the month with a full commission, but every canceled product deducts from that amount. Once reps fall below a certain threshold, they get no commission at all. That means a rep could get all the way to the second-to-last day of the pay period only to have a customer cancel four products. Suddenly the rep is below her goal, losing $800 to $1,000 off her paycheck.

    Metrics-obsessed reps are therefore highly motivated to get every customer to not only continue service, but keep the same number of subscriptions — phone, internet, Xfinity — or add more. Essentially, these reps are trying to reach a predetermined outcome in the call, and they’re trying to do it in under 11 minutes. Comcast has turned its customer service reps into sales reps.

    "Comcast likes to pretend to be "customer first," txmadison writes. "But then they turn around and provide an entire incentive structure that is decidedly NOT customer first."


  135. Black: No way, nothing is blacker than Spinal Tap's "Black Album" cover!

    https://www.youtube.com/watch?v=46kXH6GGtT0


  136. CNBC goes from a pretty fun talk between Ichan and Ackerman to….. obama.  uggh.  change channel.  i dont care about the afhanistan and ukraine.  yes i spelled them wrong..  no i don't care.  


  137. QotD "Ya can't go broke by booking profits". LU Reddog!


  138. Look at the volume increase in the Dow and S&P. Largest volume day since the last expiration day! Volume has been increasing steadily over the last 3 day on these 2 indices as we have been going higher. 


  139. OBV seems to confirm the recent bullishness in the Dow:

    The theory behind OBV is based on the distinction between smart money – namely, institutional investors – and less sophisticated retail investors. As mutual funds and pension funds begin to buy into an issue that retail investors are selling, volume may increase even as the price remains relatively level. Eventually, volume drives the price upward. At that point, larger investors begin to sell, and smaller investors begin buying.

    The following chart depicts OBV. If today’s close is greater than yesterday’s close, then today's volume is added to yesterday’s OBV, and is considered “up volume.” However, if today’s close is less than yesterday’s close, today’s volume is subtracted from yesterday’s OBV and is considered “down volume.”


  140. stjean/OBV:

    So the "smart" money is buying the DOW?


  141. From Bloomberg, Jul 17, 2014, 5:44:17 AM


    July 17 (Bloomberg) — David Bloom, London-based global head of currency strategy at HSBC Holdings Plc, talks about the dollar and Federal Reserve policy.
    Bloom also talks about European Central Bank policy, the euro and Japan’s yen. He speaks in Hong Kong with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    European stocks dropped while gold
    and the yen rallied as sanctions intended to curb violence in
    Ukraine sent Russian markets plunging. Government bonds rose
    with yields in France and Austria reaching record lows.

    To read the entire article, go to http://bloom.bg/1r4YXfT

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


  142. From Bloomberg, Jul 17, 2014, 4:42:47 AM

    Russian President Vladimir Putin denounced the action as a reflection of an “aggressive” U.S. foreign policy. Photographer: Andrey Rudakov/Bloomberg

    The U.S. and the European Union
    imposed the most aggressive sanctions to date on Russian
    business and said more may follow, acting after threats to
    squeeze the $2 trillion economy over the conflict in Ukraine.

    To read the entire article, go to http://bloom.bg/1r5lrO7

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


  143. From Bloomberg, Jul 17, 2014, 4:56:17 AM

    European Central Bank Governing
    Council member Ardo Hansson comments on the latest stimulus
    measures, asset purchases, the risk of bubbles, sanctions
    against Russia, and the Estonian economy.

    To read the entire article, go to http://bloom.bg/1oZDFi7

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


  144. From Bloomberg, Jul 16, 2014, 7:00:00 PM

    In a bid to bolster the 18-nation euro area, European Central Bank President Mario Draghi introduced an unprecedented range of measures last month, including a record low benchmark interest rate, a negative deposit rate and new cheap loans for banks. Photographer: Martin Leissl/Bloomberg

    International investors say the euro area’s economy is in its worst shape in more than a year and in danger of dropping into deflation, with a central bank that many believe is not doing enough to help, according to a Bloomberg Global Poll.

    To read the entire article, go to http://bloom.bg/1r50N0x

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


  145. From Bloomberg, Jul 17, 2014, 12:00:07 AM


    Antony Jenkins, chief executive officer of Barclays Plc. Photographer: Simon Dawson/Bloomberg

    Barclays Plc (BARC) and Deutsche Bank AG (DBK)
    face scrutiny over their sale of products to a hedge-fund firm
    that allowed it to skirt borrowing limits and avoid taxes,
    according to people with knowledge of the matter.

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

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


  146. From Bloomberg, Jul 17, 2014, 4:21:09 AM

    Developing nations from Colombia to
    South Korea have accumulated so many dollars through intervening
    to curb currency gains that their foreign reserves now exceed $3
    trillion for the first time.

    To read the entire article, go to http://bloom.bg/1riZ6y1

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


  147. From Bloomberg, Jul 16, 2014, 10:01:02 PM

    July 17 (Bloomberg) — Wilbur Ross, chairman of WL Ross & Co., Martin Sorrell, founder and chief executive officer of WPP Plc, and Leo Hindery, managing partner at InterMedia Partners LP, offer their views on the bid by Rupert Murdoch’s Twenty-First Century Fox Inc. to buy Time Warner Inc. and prospects for the deal to be completed.
    This report also contains comments from Sarah Ellison, a contributing editor at Vanity Fair; Porter Bibb, managing director at Mediatech Capital Partners; Tuna Amobi, a senior analyst at S&P Capital IQ, and Robert McDowell, a former Republican member of the U.S. Federal Communications Commission. (Source: Bloomberg)

    Rupert Murdoch, already a polarizing media baron, is picking a new fight, this time in Washington.

    To read the entire article, go to http://bloom.bg/1r5brnN

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


  148. From Bloomberg, Jul 17, 2014, 4:10:18 AM


    Workers install Chinese flags on a lamp post on a street in Tianjin, China. Photographer: Tomohiro Ohsumi/Bloomberg

    China faces what would be the second default in the nation’s onshore bond market after a builder said it may fail to make a payment next week, the latest sign of stress in the world’s biggest corporate debtload.

    To read the entire article, go to http://bloom.bg/1p7ZKJT

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


  149. From Bloomberg, Jul 17, 2014, 4:54:02 AM

    Customers look at an electronic stock board at a securities firm in Shanghai, China. Photographer: Tomohiro Ohsumi/Bloomberg

    The more China does to boost economic growth, the more bearish David Cui gets on the nation’s stock market.

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

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


  150. From Bloomberg, Jul 17, 2014, 12:28:00 AM


    Chinese homebuyers look at models of residential apartment buildings during a real estate fair in Yichang city, central Chinas Hubei province. Photographer: Imaginechina via AP Images

    China’s leaders are having trouble breaking their addiction to debt-fueled investment.

    To read the entire article, go to http://bloom.bg/1l5lQKA

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


  151. From Bloomberg, Jul 16, 2014, 4:26:53 PM


    Customers try Apple products, including the iPhone, at the company’s store in Beijing on March 12, 2013. Apple’s Wangfujing store is the largest in Asia. Photographer: Tomohiro Ohsumi/Bloomberg

    In the quest to topple Samsung and Apple in China, local phone makers appear to have a powerful friend in the Chinese government. Several moves over the last year are helping to propel Chinese hardware companies at the expense of foreign giants.

    To read the entire article, go to http://bloom.bg/1l4ReIZ

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


  152. Watch this video at http://bloom.bg/Whib7d

    U.S. PPI, Wholesale Prices Climb on Fuel Prices

    July 16: Bloomberg’s Michael McKee breaks down producer and wholesale prices as fuel caused larger than expected increases for the month of June.

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


  153. Watch this video at http://bloom.bg/WhSnI3

    GE Said in Talks to Sell Iconic Appliances Business

    July 16: General Electric Co. is in talks with potential acquirers about selling its century-old household appliances business, said people familiar with the matter.

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


  154. Watch this video at http://bloom.bg/1pcil7P

    Global Car Sales to Increase Further 4%: Analyst

    July 17 (Bloomberg) — Martyn Briggs, a consultant at Frost & Sullivan Inc., discusses European car sales.
    He talks with Ryan Chilcote, Manus Cranny and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

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


  155. From Bloomberg, Jul 17, 2014, 2:47:38 AM


    VTB Group Chief Executive Officer Andrey Kostin said, “These types of actions — applying sanctions or large penalties — they can lead, unfortunately, in essence to the disintegration of the financial system.” Photographer: Andrey Rudakov/Bloomberg

    Andrey Kostin, chief executive
    officer of VTB Group, criticized the latest round of sanctions
    on Russian businesses imposed by the U.S. and the European
    Union, saying they threaten to destabilize the financial system.

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

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


  156. From Bloomberg, Jul 16, 2014, 8:00:00 PM

    Staff of the ‘Doctors without Borders’ medical aid organisation carry the body of a person killed by viral haemorrhagic fever, at a center for victims of the Ebola virus in Guekedou, on April 1, 2014. Photographer: Seyllou/AFP via Getty Images

    Jamila got a cold reception when she
    returned home after 12 days in an isolation ward battling the
    Ebola virus in her hometown of Conakry, Guinea’s capital.

    To read the entire article, go to http://bloom.bg/1l5B0Q3

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


  157. From Bloomberg, Jul 17, 2014, 3:16:14 AM


    July 17 (Bloomberg) — Martyn Briggs, a consultant at Frost & Sullivan Inc., discusses European car sales.
    He talks with Ryan Chilcote, Manus Cranny and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    European car sales rose 4.3 percent in June as demand at Renault SA (RNO)’s budget Dacia division and Volkswagen AG (VOW)’s Seat nameplate contributed to the longest stretch of monthly delivery gains in four years.

    To read the entire article, go to http://bloom.bg/Ubyu3n

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


  158. From Bloomberg, Jul 17, 2014, 6:06:25 AM


    “The growth we’re seeing in Asia is extraordinary,” Chief Executive Officer Travis Kalanick of Uber Technologies Inc. said in an interview in Hong Kong, where the company is officially starting its service today. Photographer: Brent Lewin/Bloomberg

    Uber Technologies Inc., the popular
    ride-sharing company that’s challenging traditional cab services
    worldwide, expanded into Hong Kong as it takes on the slew of
    similar applications sprouting in Asia.

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

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  159. From Bloomberg, Jul 17, 2014, 5:52:04 AM


    U.S. President Barack Obama. Photographer: Jewel Samad/AFP/Getty Images

    Russian stocks fell and the ruble
    weakened the most since the country intervened in Crimea as the
    U.S. imposed new sanctions on companies to punish President
    Vladimir Putin for failing to end support for rebels in Ukraine.

    To read the entire article, go to http://bloom.bg/1l5Jfvb

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


  160. From Bloomberg, Jul 17, 2014, 5:53:56 AM

    Qatari LNG carrier “Duhail” passes through the Suez Canal near Ismailia, Egypt. Source: AFP/Getty Images

    Faced with slumping demand for
    liquefied natural gas in Asian markets, Qatar is shipping
    cargoes to Britain, deepening the biggest seasonal price drop
    for the fuel there in five years.

    To read the entire article, go to http://bloom.bg/1nxWBR5

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  161. From Bloomberg, Jul 15, 2014, 5:39:34 PM


    July 15 (Bloomberg) –- Bloomberg’s Rosalind Chin reports on Microsoft planning its biggest round of job cuts in five years, as the software maker looks to slim down and integrate Nokia Oyj’s handset unit. She speaks to John Dawson on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

    Microsoft Corp. (MSFT) is planning its biggest round of job cuts in five years, as the software maker looks to slim down and integrate Nokia Oyj’s handset unit, people with knowledge of the company’s plans said.

    To read the entire article, go to http://bloom.bg/U5H1Vy

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  162. From Bloomberg, Jul 17, 2014, 5:39:04 AM

    Finance and Defense Minister Arun Jaitley, center, last week said the cap on foreign direct investment in India would rise to 49 percent, up from 26 percent, with Indians maintaining control of management. Photographer: Graham Crouch/Bloomberg

    Indian Prime Minister Narendra Modi’s move to increase the ownership stake for foreign defense
    companies to 49 percent isn’t sufficient to lure high-technology
    investments from Lockheed Martin (LMT) Corp. or Boeing Co.

    To read the entire article, go to http://bloom.bg/1mNBf6G

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  163. From Bloomberg, Jul 17, 2014, 4:55:34 AM


    Governing Council member Ardo Hansson said, “It’s worth preparing, it’s worth having more tools, but I don’t think quantitative easing is a tool that’s needed right now.” Photographer: Jim Watson/AFP via Getty Images

    The European Central Bank won’t be
    ready to buy asset-backed securities any time soon, and there’s
    currently no need for large-scale bond purchases either,
    Governing Council member Ardo Hansson said.

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

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  164. From Bloomberg, Jul 17, 2014, 4:36:10 AM


    July 16 (Bloomberg) — Bill O’Neill, head of the U.K. investment office at UBS AG’s wealth-management unit, talks about British unemployment, Bank of England policy and China’s economy.
    He speaks with Manus Cranny on Bloomberg Television’s The Pulse.” (Source: Bloomberg)

    U.K. wages, which Bank of England policy makers identify as the key barometer in the debate over borrowing costs, are going nowhere.

    To read the entire article, go to http://bloom.bg/1riKSx5

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


  165. From Bloomberg, Jul 16, 2014, 11:14:20 PM


    Employees at the Mazda Motor Corp. plant in Hofu, Yamaguchi Prefecture, Japan. Photographer: Kiyoshi Ota/Bloomberg

    Economic growth of 2 percent this quarter will be enough to allow Prime Minister Shinzo Abe to proceed with an increase in the sales tax to 10 percent next year, a survey by Bloomberg News shows.

    To read the entire article, go to http://bloom.bg/1l5zOMh

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  166. From Bloomberg, Jul 16, 2014, 9:29:42 PM

    Haruhiko Kuroda, governor of the Bank of Japan. Photographer: Kiyoshi Ota/Bloomberg

    The Bank of Japan’s low-interest
    loan program has spurred buying of higher-yielding sovereign
    debt. How much it has fueled economic growth is up for debate.

    To read the entire article, go to http://bloom.bg/1ny0iWP

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


  167. Phil, you missed the 4am /TF short!  Come on man, what are you doing?  Sleeping?  Pshawww.  


  168. From Bloomberg, Jul 16, 2014, 7:27:21 PM

    Brazil kept borrowing costs
    unchanged for the second straight meeting, as slowing growth
    gives the central bank no leeway to raise rates with inflation
    running above the upper limit of its target.

    To read the entire article, go to http://bloom.bg/1r4YQRH

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


  169. From Bloomberg, Jul 17, 2014, 5:24:29 AM


    EBay Chief Executive Officer John Donahoe, already fending off competition from Amazon.com Inc. and other rivals, faced new challenges in attracting customers during the quarter. Photographer: Scott Eells/Bloomberg

    EBay Inc. (EBAY) gave a sales outlook for the third quarter that fell short of estimates as the biggest online marketplace struggles to attract more users after a data breach and changes to Google Inc.’s search engine.

    To read the entire article, go to http://bloom.bg/1l4QBPy

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


  170. From Bloomberg, Jul 16, 2014, 7:15:28 AM


    A Boeing 787-9 Dreamliner aircraft, produced by Boeing Co., performs in an aerial flying display at Farnborough International Airshow in Farnborough. Airbus and Boeing are facing off at the air show south of London, with an early advantage to the European manufacturer after it introduced an updated version of its A330 wide-body with more fuel-efficient engines. Photographer: Simon Dawson/Bloomberg

    Boeing Co. (BA), which lagged behind Airbus Group NV (AIR)’s order haul on the first two days of the Farnborough Air Show, bounced back with a commitment from Qatar Airways Ltd. to double planned purchases of the 777-9X model.

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

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


  171. From Bloomberg, Jul 17, 2014, 5:42:33 AM

    Though they sound more serious, the latest Western sanctions against Russia for failing to stop the war in eastern Ukraine are, again, mostly bark and very little bite. The growing disparity between the sanctions imposed by the U.S. and the European Union also raises the question of whether the two are allies in any real sense of the word.

    To read the entire article, go to http://bv.ms/1jAL7B4

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


  172. From Bloomberg, Jul 16, 2014, 6:03:26 PM


    Can anything rival the television’s economic impact?

    When an economic phenomenon lasts long enough, economists and academics like to develop theories to show that it will last forever. They are often mistaken.

    To read the entire article, go to http://bv.ms/1mNl758

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


  173. From Bloomberg, Jul 16, 2014, 2:41:30 PM

    Only one man can win.

    Baseball, which evolved in the U.S. Northeast around the same time poker was emerging along the lower Mississippi, is now played in dozens of countries, and most of its best players are from Latin America. Basketball, our other 19th-century sport, is even more popular globally.

    To read the entire article, go to http://bv.ms/1sp5bJr

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


  174. From Bloomberg, Jul 16, 2014, 1:54:25 PM

    Today’s chart comes from a research letter by the Federal Reserve Bank of San Francisco. The letter, “Bank Counterparties and Collateral Usage,” examines the relationships between bank-holding companies and their trading partners in the over-the-counter derivatives markets. The chart focuses on concentration, liquidity and net exposure to derivatives.

    To read the entire article, go to http://bv.ms/1nJy93K

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


  175. From Bloomberg, Jul 16, 2014, 1:57:51 PM

    Rush Limbaugh was wrong: Americans did want health insurance.

    The Catch goes to the terrific health-care reporter Sarah Kliff, who looks back at seven predicted Obamacare disasters that didn’t happen.

    To read the entire article, go to http://bv.ms/1nJz9oB

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


  176. From Bloomberg, Jul 17, 2014, 5:03:44 AM

    Gold rose for a second-day in London
    as new sanctions on Russia increased haven demand and on
    speculation prices near a three-week low will spur more buying.
    Palladium advanced to the highest level since 2001.

    To read the entire article, go to http://bloom.bg/1l5Sgoi

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


  177. From Bloomberg, Jul 17, 2014, 2:47:29 AM

    Corn declined to trade near the
    lowest level in four years on expectations for ample global
    supplies, with crops in the U.S., the biggest grower and
    exporter, in the best condition in two decades.

    To read the entire article, go to http://bloom.bg/1l5WDj3

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


  178. From Bloomberg, Jul 17, 2014, 2:33:58 AM

    Rio Tinto Group, the world’s second-biggest mining company, sees iron ore prices trading close to
    current levels, favoring the lowest cost producer as increased
    output improves profitability.

    To read the entire article, go to http://bloom.bg/1r5hxop

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


  179. From Bloomberg, Jul 17, 2014, 5:55:27 AM

    Sugar production in Thailand will
    increase to a record in the year from November as farmers in the
    second-biggest shipper turn to cane from rice, potentially
    boosting exports of the sweetener, the state forecaster said.

    To read the entire article, go to http://bloom.bg/1riNon2

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  180. From Bloomberg, Jul 17, 2014, 4:28:41 AM

    West Texas Intermediate rose to a
    four-day high after U.S. crude stockpiles fell as refiners in
    the world’s biggest oil consumer boosted processing to the
    highest level since 2005. Brent was steady in London as tougher
    sanctions on Russia were seen having limited market impact.

    To read the entire article, go to http://bloom.bg/1r54Mdl

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


  181. Burr / Phil-wakeup:

    Yes he could use his time in a better way than sleeping…jajajaja, by the way, Cramer is winning in that…is sending from 4:00 eastern.


  182. STJ- Is the must hold line on the DOW really 17600?  How can that be?  Do you mean 17000?


  183. Has anyone figured out what moved Apple don at the end of the day yesterday? 


  184. I remember the days of my computer alerting me at 3.30am for a Phil trade.  My wife wasn't happy, although my bank account was!


  185. KKR invests in Energy Hedge fund.  http://www.cnbc.com/id/101833907


  186. Phil / early

     

    Yes,  living in Europe is very convinient to read the early report of Phil.


  187. Good morning!

    Yes, I was sleeping but surely you don't need me to tell you to short the friggin' /TF below 1,150 for the 100th time?  

    I don't use an alarm clock – I'm a big believer in sleeping as much as I need, though usually it's not much.  Some days my body decides to catch up and today I slept until about 6 – I'll probably be up until 2am now! 

    Looks like yesterday's nonsense is being reversed but I do love reading how this time is different – keep those theories coming!  blush

    3:30/Burr – When there are things to trade, I tend to wake up.  At 3 today the indexes were heading up and that was silly, so no trade.  

    Oil, on the other hand, is $102.25 and we do want to short $102.50 (tight stops above on /CL) but we can take a poke here though be careful of the move up into the 9am NYMEX open.  

    Meanwhile, you can't look at daily volume bars to draw your conclusions.  "THEY" know you are looking at on-balance volume and such and "THEY" are faking those charts to suck you in.  The intra-day reality is heavy volume selling, followed by a light-volume move back up and then more volume selling – it's a suckers rally, don't be one!  

    SPY 5 MINUTE

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  188. /CL-Phil any thoughts on this today? Seems like the stories about dipping into the stockpile are manipulative, but why now? Were the big guys worried the price was going to dip to far too fast or is there really something genuine going on here? is $102.25 a shorting line? 


  189. Europe/Advill – I look forward to retiring there and being able to get up at 6, have a nice breakfast, read my papers and still have until 9 before I even start trading the Futures!  

    Oil/Craigs – The stockpile had a draw because we imported just 5.6Mbd, down from 6.9 last year.  That right there takes 9.1Mb/week out of inventory.  Input to refineries was up 300kbd from last week, so there goes 2Mb and products supplied were down, so that oil went into the refineries and nothing came out.  We also exported 100,000 more barrels per day than last week, there's another 700,000 gone and that's up 700,000 per DAY from last year, so 4.9Mb/week stolen from us in exports (and they are lobbying for more!) 

    Speaking of the Futures – /TF can be a fun LONG off 1,135, that's down 35 (3%) from 1,170 on Monday, which is 2.5% with a 20% (of 2.5%) overshoot and should be the bottom and now we look for bounces of 7 (1,142) and 14 (1,150) as weak and strong.


  190. Long /YM at 17,000, long /NQ at 3,900 – easy stop lines if they fail!  


  191. Hey, we poke the tiger!….jajaja.

     

    You will be warmly welcome here!..