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Thursday Flip-Flop – Rally Gets Manic/Depressive

You never know what you are going to wake up to in this market

This morning, the market is depressed, giving up all of yesterday's gains in the Futures.  So much so that we took a long poke on the Russell (/TF) Futures that we had been shorting from 1,160 – at the 1,135 line.  That's down 3% since we began shorting them at 1,170 on Monday.  

We're also taking a long poke on the Dow (/YM) off the 17,000 line and /NQ off the 3,900 line simply because they are good supports and offer good lines to stop out at with limited losses – certainly not because we think the equity indexes are cheap!

We're simply taking advantage of the wild gyrations in the market to make some short-term money, while we wait for our long-term premises to pay off.  


Even if you missed my call in our Live Member Chat Room (which you can join by subscribing here) and waited until you can read this post for free later in the day, you can still join in the fun by picking up the Russell Futures (/TF) when they cross over 1,140 or 1,145 and you'll only miss $500 or $1,000 of the gains but you still might pick up $300-500 over 1,145 before it turns back around (and we'll likely short it again when it does).  

USO WEEKLYSpeaking of shorting – we haven't been playing oil lately as we lost interest in shorting it below $100 but this morning it's back to $102.50, so we're going to take a poke at shorting /CL again at what should be about $37.75 on USO

Very simply, per our 5% Rule™, we have a drop from $107.50 (which we predicted) to $99 (8%) in the last 3 weeks but $100 was our support line ($37 on USO) so call it a $7.50 drop and we expect a 20% (of the drop) weak bounce of $1.50 to $101.50 and a 40% strong bounce of $3 to $103.

Since oil did, in fact, fall to $99, we'll take a poke at $102.50 but quickly get out if it gets over and then short with more conviction at $103, or if we cross back under $102.50 – because then momentum would be back on our side.  If you don't play the Futures, you can buy some USO puts, like the Aug $39 puts, which should be about $1.40 this morning – we'll likely add those to one or two of our Member Portfolios.  

We were 4 for 4 with our earnings trade ideas yesterday – that's getting us off to a very good strart and encourages us to get a little more aggressive with our picks,  Here's an example of how we played YUM in yesterday's Live Member Chat Room:

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.  

Yum's earnings we in-line but revenues were soft and it certainly wasn't good enough to sustain those lofty valuations so they are down about $2 this morning and we'll see how the spread looks this morning but certainly a nice winner already.  

SPY 5 MINUTEWe remained very skeptical of yesterday's "rally" since the intraday move was the same low-volume BS that we've been seeing since we first hit 1,950 on the S&P.  We had a gap up on NO VOLUME in the Futures, followed by a volume sell-off in the morning, then again on no volume we move up in the afternoon into volume selling into the close.

That last, big volume move right at the close is your IRA, 401K and ETF money that is FORCED to buy at the day's closing price at or just after the bell – in other words, the suckers' money!  

The "smart money," on the other hand, has been reducing their positions in equities at a faster pace than even in the last financial crisis while the MSM herds the retail bag-holders right back in:


I can only show you what is happening and tell you why these things make me nervous and urge you to be cautious – the rest is up to you!  

No one believed me in 2007 (see any of my 250 posts) or early 2008 (another 125 posts) and yes, I was too early to the point where I would post pictures of Chicken Little to illustrate how I felt.  By the summer of 2008, I was sick of being "wrong," even though the S&P was, in fact, down 2,000 points from it's high, and I stopped warning people.  THAT was a mistake!

In fact, here's my "too early"comment from Aug 3rd, 2007:

I could go on and on but I’m sure you get the idea. Both sectors buy properties and develop them. Builders speculate on land, brokers speculate on stocks. Both try to buy low and sell high but both got caught in the same trap of buying more and more at the top until their entire portfolio was filled with the most expensive properties in history at exactly the time that people began losing their taste for them.

This is just a variation of my Roach Motel Theory that is just now (much later than I predicted) starting to affect big oil and, while I hate to go out on an early limb with the brokers, I have to think the same forces are at work in that sector as well. I was too far ahead of the curve last September when I said Amaranth was just the tip of a very large iceberg and that the real speculators in the commodities game were MS, GS, CSR, DB, C and JPM.

I got killed in the fall shorting those guys because I forgot the words of the great John Maynard Keynes who said: “The market can remain irrational longer than you can remain solvent.”

Longer than we can remain solvent perhaps – but not forever!

I was a year too early  - but was I wrong? 

So forgive me if I am a little boring as I keep banging the warning drums.  I simply do not trust this rally and I think it's important that you know that.  Not that it stops us from making money, our main Long-Term Portfolio has 16 bullish positions and is up 19.1% for the year – despite being cashed out in May.  It is protected by our Short-Term Portfolio and even that is up 9% for the year, as we've learned to go with the flow.

Heck, we started this post with our bullish plays from our Live Member Chat Room this morning and, even as I'm writing this, the Russell Futures are popping 1,140 for a $500 per contract gain already and the /YM Futures are 17,030 for $150 per contract and /NQ is 3,905 for $100 per contract – and the Egg McMuffins are paid for!  

Maintaining a bit of skepticism is healthy.  It helps us feel good about taking those quick profits off the table and it keeps us alert to those very frequent sentiment shifts and, most importantly, it keeps us from chasing the peaks too high – and it keeps us from chasing the dips too low.  In short – we have CONTROL of the market because we don't let it control us!  


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  1. Thursday’s economic calendar

    12:00 AM ET

  2. Overseas

    06:00 AM ET

    • Japan -0.06%.
    • Hong Kong -0.01%.
    • China -0.57%.
    • India +0.03%.
    • London -0.38.
    • Paris -0.44%.
    • Frankfurt -0.33%.

  3. Futures slip as Russia tumbles

    06:56 AM ET · RSX

  4. Jobless Claims

    08:30 AM ET

    • Initial Jobless Claims: -3K to 302K vs. 310K consensus, 305K prior (revised from 304K).
    • Continuing claims -79K to 2.57M.

  5. Hasbro on watch after Barbie sales shrink

    08:34 AM ET · HAS

    • Shares of Hasbro (NASDAQ:HAS) are on watch after Mattel’s report on physical toy sales deflates confidence in the sector.
    • There’s some worry that Hasbro’s G.I. Joe and Mr. Potato Head will see the same Y/Y slide in demand that Barbie and Hot Wheels did for Mattel.
    • HAS -2.2% premarket

  6. Mattel sinks after earnings dud

    08:18 AM ET · MAT

    • Shares of Mattel (NASDAQ:MAT) are down sharply in premarket trading after the company missed badly on both lines of its Q2 report.
    • Sales in North America fell 8% Y/Y.
    • Gross margin rate dropped 490 bps to 46.4%.
    • Revenue growth by brand: Mattel Girls & Boys -13% to $689M; Fisher-Price -17% to $328.8M; American Girl +6% to $83.1M.
    • MAT -7.7% premarket

  7. Baker Hughes sees strong drilling activity for the rest of 2014

    08:18 AM ET · BHI

    • Baker Hughes (NYSE:BHI) +0.9% premarket after posting better than expected Q2 earnings and saying it expects increased activity for the remainder of the year.
    • BHI’s North American segment, the company’s largest geographic business by revenue, reported a 6.2% increase in revenue to $2.84B, while revenue rose 18% to $1.15B in the Middle East and Asia Pacific region and 10% in the Europe, Africa and Russia Caspian segment; Latin America revenue fell 2.3%.
    • “We anticipate increased activity for the remainder of the year in the form of higher international rig counts, and increased North American well counts,” CEO Martin Craighead says. “As a result, we project strong earnings growth.”

  8. Daimler to expand Smart line

    08:11 AM ET · DDAIF

    • Daimler (OTCPK:DDAIF) plans to double its lineup of Smart models, including one that can hold a whopping four passengers.
    • Demand for citycars and microcars is forecast to increase significantly in Europe after the category suffered some growing pains recently.

  9. Baxter raises guidance after Q2 results

    08:10 AM ET · BAX

    • Baxter International (NYSE:BAX) Q2 results: Total Revenues: $4,264M (+16.2%); BioScience: $1,751M (+6.9%); Medical Products: $2,513M (+23.7%).
    • Bioscience Revenues: Hemophilia: $904M (+6.5%); BioTherapeutics: $548M (+6.8%); BioSurgery: $189M (+6.2%); Vaccines: $110M (+12.2%).
    • Medical Products Revenues: Fluid Systems: $816M (+8.1%); Renal: $1,044M (+59.6%); Specialty Pharma: $404M (+10.4%); BioPharma Solutions: $249M (-2.7%).
    • COGS: $2,041M (+5.3%); R&D Expense: $325M (+19.0%); SG&A Expense: $998M (+19.1%); Net Income: $520M (-11.9%); EPS: $0.95 (-11.2%); CF Ops: $599M (-21.5%). Gross Profit: $2,041M (+5.3%); COGS: 52.1% (+10.6%); Gross Margin: 47.9% (-9.4%); Operating Profit: $718M (-13.3%); Operating Earnings Yield: 16.8% (-25.4%); Net Earnings Yield: 12.2% (-24.2%).
    • 2014 Guidance: Sales Growth: 10 – 11% up from 9 – 10%; EPS ex items: $5.10 – 5.20 versus $5.05 – 5.25; CF Ops: ~$3.5B (unch).
    • Press release

  10. Cypress Semiconductor beats by $0.04, misses on revenue

    08:01 AM ET · CY

    • Cypress Semiconductor (NASDAQ:CY): Q2 EPS of $0.16 beats by $0.04.
    • Revenue of $183.6M (-5.1% Y/Y) misses by $0.22M.
    • Press Release

  11. Entergy sees Q2 profit below consensus, reaffirms 2014 guidance

    07:59 AM ET · ETR

    • Entergy (NYSE:ETR) issues downside guidance for Q2, seeing operational EPS of ~$1.10 vs. $1.16 analyst consensus estimate, although the figure would be higher than $1.01 in the year-ago quarter.
    • At ETR’s wholesale commodities segment, nuclear sales volume rose because of a lack of refueling outages and reductions in unplanned outages; higher power prices for the nuclear fleet also boosted results.
    • At the utility group, revenue increased primarily because of price factors related to rate actions; lower maintenance expenses also helped, offset by a higher income tax rate.
    • Reaffirms guidance for FY 2014, seeing EPS of $5.55-$6.75 vs. $6.17 consensus.

  12. Philips downgraded to Strong Sell at Zacks

    07:54 AM ET · PHG

    • Zacks has downgraded Philips (NYSE:PHG) to a Strong Sell following concerns of weak results at its healthcare division and lower EBITA.
    • The company reported weak 2014 results and has been searching a way to restructure its healthcare division to boost financial performance.
    • Last quarter Philips’ adjusted EBITA also declined to 7.3% of sales from 8% Y/Y.
    • PHG -0.9% premarket

  13. AutoNation slips after profit miss

    07:47 AM ET · AN

    • AutoNation (NYSE:AN) slips in early trading after missing profit estimates with its Q2 report.
    • The company reports same-store new vehicle unit sales rose 6% in Q2.
    • SG&A expenses were up 6.2% to $524.6M.
    • Q2 sales mix: Domestic 32.5%; Import 49.3%; Premium Luxury 18.2%.
    • AN -7.5% premarket

  14. Weak outlook from Philip Morris on 2H

    07:41 AM ET · PM

    • Philip Morris (NYSE:PM) sees full-year EPS of $4.87-$4.97, a level which stands below the consensus estimate of analysts.
    • The company warns it will face difficult comparisons in 2H and could see heavy price discounting in Australia impact profit.
    • PM +0.9% premarket

  15. More on Novartis Q2 results

    07:37 AM ET · NVS

    • Novartis (NYSE:NVS) Q2 results: Total Revenues: $14,637M (+1.0%); Pharmaceuticals: $8,199M (+1.0%); Alcon: $2,817M (+3.0%); Sandoz: $2,331M (+5.2%); Vaccines: $240M (-41.6%); Consumer Health: $1,050M (+4.6%).
    • COGS: $4,913M (+2.8%); R&D Expense: $2,386 (-2.2%); SG&A Expense: $4,394M (+0.1%); Net Income: $2,585M (+1.5%); EPS: $1.03 (+2.0%); CF Ops: $3,341M (+32.7%); Quick Assets: $7,335M (+39.7%).
    • Gross Profit: $10,278M (+3.6%); COGS: 33.6% (+1.7%); Gross Margin: 70.2% (+2.5%); Operating Profit: $3,095M (+4.2%); Operating Earnings Yield: 21.1% (+3.1%); Net Earnings Yield: 17.7% (+0.4%).
    • 2014 Guidance: Group Net Sales Growth: Low to mid-single digit (unch); Core Group Operating Income: Mid to high-single digit (previously: >sales growth); Pharmaceuticals Growth: in line with 2013 (unch); Alcon Growth: Mid to high-single digit (unch); Sandoz Growth: Mid to high-single digit (unch).
    • Press release

  16. IBM to analyze Pratt & Whitney engine data

    07:35 AM ET · UTX

    • Pratt & Whitney (NYSE:UTX) has hired IBM (NYSE:IBM) to analyze massive amounts of data from approximately 4,000 commercial aircraft engines in an effort to calculate potential engine trouble before problems arise.
    • “Rather than reacting to some sort of an engine event, we are leveraging data from various sources for maintenance, for planning engine diagnostic systems and building predictive models,” says IBM VP Jerry Kurtz.
    • Due to the new proactive maintenance program, Pratt & Whitney expects to extend engine life by over almost 50% and decrease maintenance costs by up to 20%. A typical engine repair can fetch between $3M to 10M.

  17. Ford to punch the accelerator in Africa and Middle East

    07:35 AM ET · F

    • Ford (NYSE:F) aims to grow quickly in Africa and the Middle East through the introduction of 25 new models in the next two years.
    • The automaker forecasts industrywide sales in Africa will shoot up 40% to 2.1M vehicles in the next six years.
    • Ford earned a profit of $54M for the Africa and Middle East region in Q1, a mark some analysts see doubling by next year.

  18. Morgan Stanley +2.2% after sizable earnings beat

    07:33 AM ET · MS

    • Excluding DVA, income of $1.9B or $0.91 per share vs. $900M and $0.37 one year ago. The quarter also included a discrete tax benefit of $609M – excluding that brings income down to roughly $1.3B and $0.60 per share, so the “beat” is closer to a nickel.
    • Institutional Securities pre-tax income of $927M vs. $806M one year ago on roughly flat revenue of $4.16B (excl. DVA). FICC revenue of $1B slips from $1.2B, partially offset by higher advisory revenue. Equity sales and trading revenue of $1.8B was about flat. Compensation expense slipped by $100M to $1.7B.
    • Wealth Management pre-tax income of $767M rises from $655M a year ago on revenue of $3.715B up from $3.531B. Pre-tax margin rises above 20%, coming in at 21%.
    • Investment Management pre-tax income of $205M up from $160M a year ago on revenue of $692M up from $673M. AUM of $396B up from $347B thanks to market appreciation and positive flows.
    • About $284M or 9.3M shares of stock repurchased during quarter. Morgan has approval from the Fed for $1B in buybacks through the end of 2015 Q1.
    • MS +2.2% premarket
    • Previously: Morgan Stanley beats by $0.35, beats on revenue

  19. More on United Health Group Q2 results. Guidance raised.

    07:06 AM ET · UNH

    • United Health Group (NYSE:UNH) Q2 results: Total Reveues: $32,574M (+7.1%); Employer & Individual: $10,729M (-3.6%); Medicare & Retirement: $11,785M (+6.6%); Community & State: $5,764M (+28.6%); International: $1,793M (+9.6%).
    • Medical Costs: $23,523M (+6.1%); Operating Costs: $5,206M (+7.9%); COGS: $929M (+38.9%); Net Income: $1,408M (-1.9%); EPS: $1.42 (+1.4%); CF Ops: $2,422M (-4.2%); Quick Assets: $8,289 (-17.9%).
    • Gross Profit: $9,051M (+9.9%); Gross Margin: 27.8% (+2.6%); Operating Profit: $2,552M (+6.3%); Operating Earnings Yield: 7.8% (-0.8%); Net Earnings Yield: 4.3% (-8.5%).
    • Optum: $11,714M (+28.4%); OptumHealth: $2,411M (unch); OptumInsight: $1,243M (+5.2%); OptumRx: $8,000M (41.7%).
    • 2014 Guidance: Revenues: ~$130B up from $128B – 129B; EPS: $5.50 – 5.60 up from $5.40 – 5.60
    • Press release

  20. UBS continues lead as world’s largest private bank

    06:41 AM ET · UBS

    • UBS (NYSE:UBS) has taken a far lead ahead of Bank of America as the world’s largest private bank and is close to securing $2T under its wealth management business.
    • UBS took over Bank of America’s top spot last year after the latter sold its private bank outside the U.S. to Switzerland’s Julius Baer.
    • Private banking is on the rise worldwide, with the industry managing $20.3T in total, up from $18.5T last year.

  21. Report: Volkswagen in talks over Fiat takeover

    05:54 AM ET · VLKAY

    • Volkswagen (OTCQX:VLKAY) is looking into buying Italian rival Fiat (OTCPK:FIATY), German Manager Magazin reported on its website this morning.
    • The publication stated that Fiat’s owners want to shift their focus to the Ferrari brand and exit the traditional automotive business.
    • VW is hoping to gain access to Chrysler’s U.S. distribution network by the Fiat-Chrysler purchase, which would be a contributing factor in turning around auto sales.

  22. Gazprombank says new sanctions not disturbing operations

    05:03 AM ET · OGZPY

    • Gazprombank, the financial arm of Russia’s natural gas producer Gazprom (OTCPK:OGZPY), declares that the new U.S. sanctions placed on its operations yesterday are not affecting its day-to-day business.
    • The bank reported stable operations, including its international payment systems.

  23. ECB to disclose large-scale bank data

    04:54 AM ET · SAN

    • Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone’s 128 most important lenders to insure the banks can withstand future crises.
    • The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.
    • Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
    • ETFs: EUFN

  24. Visa, MasterCard not included in Russian sanctions

    04:13 AM ET · V

    • Visa (NYSE:V) and MasterCard (NYSE:MA) state that the new U.S. sanctions on Russia will not affect their payment operations in the country.
    • The new restrictions are only specific to certain banks including Gazprombank and VEB.

  25. Nissan to enter the driverless era

    03:47 AM ET · NSANY

    • Nissan (OTCPK:NSANY) is stepping up its automated driving offerings, and intends to deliver cars that park themselves and autonomously navigate congested highways by 2016. By 2018 the company expects to introduce cars that can change lanes automatically, ending in its 2020 finale of fully automatic vehicles.
    • “You need to be first with very significant features,” says CEO Carlos Ghosn. “There’s always a premium with those who come first.”

  26. IMF comments on new BRICS fund

    03:27 AM ET · EWZ

    • The IMF praised the formation of the New Development Bank and reserves fund launched by BRICS countries (Brazil, Russia, India, China and South Africa) yesterday, and announced that it would like to work together with the monumental project.
    • So far the new fund has pooled together $100B in reserves from the five countries with the intention of reshaping the Western-dominated international financial system.

  27. Coca Cola keeps $1B annual Mexico investment

    03:06 AM ET · KO

    • The Coca Cola Company (NYSE:KO) has announced that it will continue to invest approximately $1B a year into its Mexican operations.
    • “For the last 10 years the Coca Cola System has invested an average of $1B a year and we are reaffirming that promise until 2020,” says President of Coca Cola Mexico Francisco Crespo.
    • Mexico is the company’s largest market outside the U.S.

  28. Putin responds to increased sanctions

    02:17 AM ET · RSX

    • In response to the new U.S. sanctions on Russia, Vladimir Putin now warns that the widening restrictions will harm the political interests of the U.S. and will result in a serious international divide.
    • “Sanctions have a boomerang effect and without any doubt they will push U.S.-Russian relations into a dead end, and cause very serious damage,” says Putin.
    • Heavy sanctions yesterday were placed upon Russia’s Rosneft, Gazprombank and Novatek.

  29. Obama wants action to halt the rush of U.S. companies moving abroad

    Yesterday, 07:30 PM ET · SHPG

    • The Obama administration is proposing a ban on “inversion deals,” retroactive to May 2014, in which U.S. companies buy foreign ones and move corporate headquarters abroad to escape U.S. tax laws.
    • Inversion deals are more common among drug and manufacturing companies that earn much of their income overseas or have assets such as patents that are held offshore; shares of companies with pending deals who fell today on the proposal included Shire (NASDAQ:SHPG), AbbVie (NYSE:ABBV), Auxilium Pharma (NASDAQ:AUXL) and QLT (NASDAQ:QLTI).
    • In an unprecedented move for a U.S. retailer, Walgreen (NYSE:WAG) also is weighing leaving U.S. shores, a move that could help lower its U.S. tax bill and save the company hundreds of millions of dollars per year.
    • With the pace of inversions picking up, many in Washington are critical of the practice but they disagree on what to do about the trend: stop the deals cold via a one-off bill or pass a broad tax overhaul that would lower the 35% corporate tax rate.

  30. Yahoo bears hone in on display weakness; bulls focus on Alibaba

    Yesterday, 06:40 PM ET · YHOO

    • “It’s remarkable how bad” Yahoo’s (YHOO -5.1%) Q2 ad sales figures were, says Pivotal Research’s Brian Wieser. “Such are the problems when there is no head of ad sales.” Marissa Mayer effectively took over the job after COO Henrique de Castro was fired (following a tumultuous stint) in January.
    • The 24% Y/Y drop in Yahoo’s display ad prices (much worse than Q1′s 5%) is getting a lot of attention. Soft demand for banner ads relative to other formats (search, video, native ads) is seen as a culprit, as are delays in rolling out Yahoo’s Ad Manager Plus ad-buying platform.
    • Marissa Mayer mentioned on the CC (transcript) Yahoo “took extra time to ensure [Ad Manager Plus] was delivering for our advertisers,” during which time activity on the older Genome platform slowed. She added Yahoo saw a “lower-than-expected contribution from premium advertising, resulting in an unfavorable mix shift.”
    • On the bright side, Mayer stated both mobile search and display ad sales more than doubled Y/Y. Yahoo’s new Gemini platform (integrated mobile search and native ad purchases) now accounts for half of its U.S. mobile display revenue.
    • Sell-side bulls argue Yahoo’s business challenges are priced in, and that investors should keep their focus on Alibaba. MKM estimates Yahoo’s Alibaba stake is worth $29/share, and expects Alibaba’s IPO roadshow to boost investor enthusiasm.
    • CFO Ken Goldman says Yahoo expects its Alibaba IPO share sale (now just 140M shares) to be “fully taxed,” but is still exploring “tax-efficient structures” for the rest of its stake.

  31. Kinder Morgan companies lower AH as Q2 earnings miss estimates

    Yesterday, 06:27 PM ET · KMP

    • Kinder Morgan Partners (NYSE:KMP) -1.8% AH after Q2 profit fell from a year ago when results were boosted by a large gain related to an acquisition, but distributable cash flow rose 11% to $561M, or $1.23/unit vs. $1.22 a year ago.
    • Earnings at KMP’s natural gas pipeline business rose 13% Y/Y, including increases from Tennessee Gas Pipeline expansion projects and the 2013 Copano acquisition.
    • Kinder Morgan Inc. (NYSE:KMI) -0.3% AH after reporting flat Q2 earnings as shares outstanding declined by 1% and revenue increased 16% to $3.94B; KMI will pay a $0.43/share cash dividend, up from $0.40 in the year-ago period.
    • El Paso Pipeline Partners’ (NYSE:EPB) Q2 earnings fell to $0.32/unit from $0.40 while revenue dropped 1.7% to $353M.
    • KMI CEO Richard Kinder says the company has identified a combined $17B in expansion and JV investments, up from $16.4B reported in April, taking into account ~$700M in projects placed into service in Q2, which means Kinder has added ~$1.3B to its backlog.

  32. Report: Twitter’s user growth was soft in Q2

    Yesterday, 06:07 PM ET · TWTR

    • Twitter’s (NYSE:TWTR) monthly active users would’ve fallen Q/Q in Q2 if not for a World Cup-driven boost, two sources independently tell BI. One source estimates Twitter will report Q2 MAUs in the “very low” 260M range, up only modestly from the 255M Twitter reported having at the end of Q1.
    • A note of caution: The sources are software developers with access to Twitter’s API data, rather than Twitter’s internal data. Also, the data is extrapolated from samples, albeit ones containing hundreds of millions of users.
    • Though far from definitive, the data meshes with the user growth fears that have weighed on Twitter’s shares, and motivated the company to make a string of product (and perhaps also management) changes. Twitter’s MAUs rose 6% Q/Q in Q1, and 4% Q/Q in Q4.
    • TWTR -0.6% AH. Q2 results (along with MAU figures) arrive on July 29.

  33. SanDisk offers light Q3 guidance

    Yesterday, 05:37 PM ET · SNDK

    • SanDisk (NASDAQ:SNDK) guides on its Q2 CC for Q3 revenue of $1.675B-$1.725B, below a $1.74B consensus. Gross margin is expected to be in a range of 47%-49% vs. 48% in Q2 and 51% in Q1.
    • Shares now -8.6% AH.
    • Q1 results, details.

  34. Yum’s Chinese rebound continues, but Pizza Hut still soft

    Yesterday, 05:30 PM ET · YUM

    • YUM‘s worldwide system sales rose 6% Y/Y in Q2, better than Q1′s 4% growth. Restaurant margin rose 300 bps to 15.5%.
    • China division sales (clobbered last year by avian flu issues) +21% vs. +15% in Q1. Same-store sales +15%, unit growth +7%.
    • KFC division sales +5%, same-store +2%. Pizza Hut division -1%, same-store -3%. Taco Bell division +3%, same-store +2%. India division +18%, with 25% unit growth more than offsetting a 2% same-store drop.
    • Yum still plans to open at least 700 new restaurants in China, and 1,250 in other foreign markets. The company is “taking significant actions” to improve the performance of its U.S. Pizza Hut ops (previous).
    • China division restaurant margin jumped 620 bps to 16.8%, while the Pizza Hut division’s restaurant margin fell 640 bps to 7.2%. Taco Bell’s restaurant margin fell 270 bps to 17.7%, and KFC’s rose 30 bps to 12.9%.
    • $346M has been spent on buybacks YTD, up from $170M at the time of the Q1 report.
    • YUM -2.5% AH. Q2 results, PR.

  35. Oil Lines

    R3 – 103.14
    R2 – 102.37
    R1 – 101.9
    PP – 101.13
    S1 – 100.66
    S2 – 99.89
    S3 – 99.42

    Testing R3 already!

  36. Wow, the housing numbers from the Commerce Dept. were pretty bad.   A very volatile data set so not a useful indicator but still, if the economy is gaining momentum I wouldn't expect worsening housing numbers.  Phil, would you expect this to put some headwind on HOV price or are they a regional player driven more by local supply/demand?

  37. Hi StJ – would you mind giving me just a brief summary of how to interpret the S3 – R3 oil lines?  Much appreciated!

  38. Getting a little bit of optimism this morning – we need it:

    There are a few more reasons to be skeptical about secular stagnation. For one, productivity growth might not be as bad as we think. That's because the way we measure it is having a harder and harder time capturing the real gains in the economy. Just think, for example, about the way smart phones are replacing books, newspapers, cameras, scanners, bank ATMs, voice recorders, radios, encyclopedias, GPS systems, maps, and dictionaries, among other things. All of these items used to be sold separately and each counted as a part of GDP. Now, many of them are available as free apps, and aren't counted as a part of GDP. This under-measuring of economic activity translates into slower observed productivity growth. And this problem is only going to get worse as more of the economy becomes digitized.

    Actually, a tech slowdown could be the least of our problems. As Erik Brynjfolsson and Andrea McAfee argue in The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, it looks like smarter and smarter machines are going to radically transform the economy. This digitization of everything could mean a big growth is just around the corner. The near future will be an economy where machines like IBM's Watson will be coordinating driverless cars, diagnosing illnesses, and organizing robot work in homes. So productivity growth and returns on capital will both be high. The real challenge, according to Brynjfolsson and McAfee, won't be too little economic growth, but dealing with the disruptive nature of so much of it.

    And finally, if demographics really are destiny, then our destiny isn't secular stagnation. As Bill McBride has pointed out recently, the Census Bureau now reports that Baby Boomers aren't the largest cohort anymore, and that the prime working-age force is expected to start growing again in a few years. In other words, the demographic outlook actually points to stronger economic growth. (Thanks, millennials). And this isn't just an American development: the United Nations projects that working-age populations will increase in many parts of the world through 2050. That should create plenty of demand for new investment.

    In short, it doesn't seem like secular stagnation is the right story for the U.S. economy. A better story is that the economy got hit by a once-in-three-generations crisis that's taken awhile—too long, really—to overcome. But in the long run, the slump will be dead. And it might just be "Morning in America" again.

  39. Oil lines / Spank – Not much to it, these are support and resistance lines based on the previous day's price action and algos are actually programmed using them as well since they are well known trading indicators. 

    They are not exact lines of course but give you an idea of areas of support and resistance (you can round up the numbers to the closest 0.25 point as well). But looking at today for example, you can see that PP acted as support, then we crossed R1 (101.9 close to 102)  and that acted as support. R2 was resistance for a bit and we crossed that. Now R3 (103.14 or 103) seems to be acting as resistance. But this is not an exact science.

  40. Good Morning!

  41. Phil / SCO – great call on oil a few days ago.  I sold my SCO bull call spread from late May for a solid profit.  I should have doubled down in late June.  Like you have said so many times and this morning, you tend to be early but in the end you are usually right.  That has been my most profitable strategy on PSW, to double down when a position goes against me when i (or at least you) have conviction.  I started buying Apple in the low 600s but because i adjusted and doubled and tripled down - buying at $399 at one point when you were banging the table at the Atlantic City conference and buying back the callers to let the long calls run unfettered - it has been a huge winner for me this year.  

  42. YHOO looking more and more like a proxy play for Alibaba:

    So why would Yahoo want to keep billions tied up in an investment in which it has almost no voice? It’s quite simple—Alibaba has been the best part of Yahoo’s earnings for years. Even though cashing out as much as it can after the IPO could land Yahoo with a welcome windfall, holding on may be what props up Yahoo’s growth for many quarters to come.

  43. Great, thanks StJ

  44. Housing start is a volatile number…


  45. Good morning!  

    Nice selfie from Omaha:

    Big hole in Russia:

    Anna Kurchatova from Siberia’s Sub-Arctic Scientific Research Centre believes the crater was a result of an explosion when a mixture of water, salt and natural gas exploded underground. Global warming, she claims, has caused the permafrost in Siberia to melt at an accelerated rate.

  46. Oil hit $103 so game on for those shorts (/CL)!  

    Now that it's Thursday, just watching and waiting to see how the week plays out at this point.  

    I'm out the door at 1pm today for a meeting, not likely to be back before the bell.

  47. 3 Branches/Phil

    Always an encouraging sign to see a bumper sticker from Northern Sun.  They have hundreds more that are similarly amusing/thought-provoking in their catalog.  I used to be their Sales & Marketing Director and knew I was in friendly territory when I saw their bumper stickers on vehicles whenever I traveled around the country.

  48. Phil:


    USO Aug $39 puts here?

  49. NFLX quietly stopped deliveries of DVD's on Saturdays with no announcement to members at all.  Kind of a shady thing to do.

  50. Phil/USO,

    If I have to go with OCT Puts which one would be a good one 40P? That one has less premium. Even Sept ones will do.

    Thanks as always

  51. Permafrost / Phil – Apparently this could be one of the biggest problems of global warming as permafrost is currently holding a lot of methane gas underground. Releasing that in the atmosphere will only make things worse long term and accelerate the damages caused by climate change. And yet:

    The best summation of the state of Republican discourse of climate this week came in Mike Allen and Politico’s friendly promotional luncheon for the Cheney family. Asked what to do about climate change, Liz Cheney quickly replied.


  52. I find lack of Barbie sales very disturbing.  It's a key discretionary item that shows how hard-hit consumers are in the bottom 80%.  

    Housing/Sibe, StJ – Doesn't matter if it's 900,000 or 1M or 1.1M – it's not 2M and it's not 1.5M.  Below 1.5M is unhealthy.  We have about 110M homes in the US and our population grows by 3M per year so those people need 1M new homes or we are just creating homeless people.  That means 1M isn't even replacing the homes we have and, along with our infrastructure, our housing stock is aging rapidly and, unlike Europe, our homes weren't made to last 100 years.   

    HOV/Sibe – They will get pulled down with the sector but, long-term, they are in a better position than most.  

    $102.70 – that was quick.  Stop at $102.75 on /CL, of course.  

    Our earnings plays are doing well:

    • YUM Aug $82.50 calls dropped to .60 and the Jan $82.50/87.50 bull call spread is still $1.75 for a net 683% gain off our original .30 credit!  

    • LVS Aug $75 calls are still $1 but the $72.50 puts are $1.85 for $2.85 off the $2.53 entry – not fantastic (12.6%) but the theory was sound. 

    • EBAY Jan $50 puts dropped to $2.50 for a .50 gain (16.7%), but that one is not a short-term play.  

    Poor SNDK got spanked.  There was no specific play on them.

    Stagnation/StJ – Well I guess if you re-define everything any time you don't like the data, that's going to keep you optimistic no matter what happens.  Take GPS, for example – so the $500 smart-phone has wiped out he $200 mobile GPS business.  GRMN (not really dead, just an example) was an $11Bn company with 10,000 employees and they were replaced by a $10 app.  What are we not counting?  The smartphone sales are AAPL sales and 1/3 of the App revenues are AAPL sales and the app revenues accrue to small businesses who probably pay taxes since AAPL cuts them a check – so it's all included in the GDP.  The only difference is we cut 10,000 GRMN jobs and all the thousands of jobs that went into producing separate GPS units for cars (a short-lived industry).  

    Disruptions like that are normal in any economy – you can't go re-jiggering your measurements every time the numbers dip!  The reality of the situation is the 25,000ish people who were replaced by an efficient app (written by two guys in their basement) and the reality of Waston will be 250M people replaced by one machine and there simply won't be any new jobs for them to fill.  Efficiency has reached a tipping point where we simply don't need all 220M working-age people in this country to work – and that's globally as well.  Right now, we seem to be doing fine with 150M people and, in a Waston World, probably 120M or less.  So only 1/3 of the people NEED to work and we either need to find a new way to distribute money more fairly or start making solyent green fast.

    AAPL/Terra – Very nice.  It's also so satisfying to win that way.  Just keep in mind we sometimes do go down in flames as well and don't get too deep on any single position.  If you are out of SCO, there's today's USO play, the Aug $39 puts opened at $1.40 but still good at $1.50 for a new short.  

    Northern Sun/Kechi – That's cool, I do like their stuff.  

    GMTA DC! 

    • Dow -0.03%.
    • 10-yr +0.18%.
    • Euro +0.03% vs. dollar.
    • Crude +1.41% to $102.63.
    • Gold +0.39% to $1,304.90.

    Philly Fed up huge (like NY), 23.9 vs 10 expected though 17.8 last month means they were just being too pessimistic.  That should give us a nice pop but I'd take those Futures profits off this run!  

  53. 8800 – Re: SFTBY.  It would be better if the stock was traded on NASDAQ, if they are successful in their effort to pick up controlling interest in T-Mobile, it probably will be.  I have about 1/2 long term position and usually don't use hard stops.  I like the fact that they are going to continue holding their shares in Alibaba after the IPO.

    WWE -Catching some bids this morning. Probably related to the bid for TWX.  Proprietary content is much in vogue.

  54. It is not just permafrost that holds gas, ice under the arctic ocean will release plenty as the north pole melts. The combination should even scare the GOP. Want to learn more watch PBS.

  55. Oil almost $102, very nice! 

  56. Got on board the TASR train today, or maybe sinking ship.   Sold some Jan 16 $10 puts for $1.80.

  57. USO/Pat – If you are going way out to Oct, you don't need to go so high.  The $40 puts have a .76 delta at $2.80, so they pay 27% per $1 move but the $38 puts, for example, are only $1.35 and have a .53 delta, so they pay 39% per $1 move.  What's the sense of putting more money at risk for a lower reward?  As you go out in time, you are dividing your premium by 92 days so, even though the $38 puts are 1/2 out of the money, it's only costing you about 0.005 per day in time decay – not worth worrying about.  

    Methane/StJ – You would think we would all be experts on this by now as it's a massive problem that affects the entire planet so, logically, we should be studying the hell out of it.  Only we have these idiots who make it their mission in life to keep us in the dark and stall our policies so we continue to head down this destructive path.  It's not just the US, of course, Russia has a huge oil lobby, as does China and most of the rest of the World – whatever form of Government you have, there's always a Koch-type to write you a check if you have the kind of influence that can make them richer.  

    Koch Industries: Secretly Funding the Climate Denial Machine

    From Funding Climate Deniers to Shadowy Groups, Koch …

    Who Funds Contrariness on Climate Change? – Scientific …

    Secret funding helped build vast network of climate denial …

    'Clean Energy' House Candidate Consulted For Koch-Tied …

    Not Just the Koch Brothers: New Drexel Study Reveals …

    Global Warming Deniers: ExxonMobil, The Koch Brothers …

    Radical publications like Scientific American and the Guardian…

  58. albo

    Are you still in XCO? I got out when $6 failed, but am watching closely again.

  59. Albo,

    Thx for your thts on SFTBY. No options so I assume you are naked in the dark underlying stk. M. Son impresses me as a Steve Jobs, Elon Musk calibre guy. TMUS approval seems dicey to me, but Alibaba appears to be also well led and to be in the early part of its ascendancy. I'm looking for an initial entry in the 36-7 range. Time will tell.

  60. Pharm

    Peregrine Pharmaceuticals, Inc. PPHM

    What do you think of them?


  61. Rj_jarboe – I'm not currently in the stock, but am short a bunch of Jan 16 $3 puts.  They are currently doing a bond offering, which might account for some of the recent weakness.

    8800 – I agree with you, but think that Mr. Son is more of a Warren Buffet type, than Jobs or Musk.  There is one big difference, and it concerns me somewhat.  Mr. Son uses a whole lot of leverage.  SFTBY has a ton of debt.  So far, so good, but worth keeping an eye on.

  62. Phil/USO,

    That's one more tool I will use going forward…Thanks!

    On the same line if you look at the $37 Puts then they pay around 47% for $1 move but they have large premium and the decay is 0.015. At what point you start worrying about the decay. There is also the important point of how much drop is expected and to get the maximum bang for that drop.

    is Oct USO 38 P a good trade at this time?

    Thanks as always.

  63. phil, what's the target on oil/USO? thanks.

  64. Productivity / Phil – I have a conflicted view of the effects of productivity from my professional experience. In my main field (technical translations) we have automated the process so much that we now have translators more than 250% more efficient in some cases. For example, in the pre-automation times, we could count on one translator translating about 10,000 words per week. But now we have a lot of automation – not machine translation like Google Translate (we also use something like that but more sophisticated), but what we call translation memory databases where we store all the sentences we translate and re-use them as we find them again or sub-set of them as what is called fuzzy matches. With technical manuals (for example, machinery or software) there is a lot of re-use, sometimes 90% and for example, I just had a small team of translators complete 500,000 words in 2 weeks! It would have taken 25 people to do that in the past. 

    And yet, despite that, one problem for translation vendors is to find enough translators for all the content being translated. In effect, productivity is not keeping up fast enough with the data that needs to be translated! So much so that machine translation is used more and more to try increasing productivity even more although there is a limit on what can be achieved at the moment. So, is this a very specific case or are there other industries facing the same problem? Meaning that we might be creating more work as productivity increases. An interesting problem for sure.

  65. India/ Phil

    India has had a new Govt since May and the PM is considered a proven reformist.  I have heard comments from various experts on India that this is the beginning of the secular growth story for the country as all the cogs are now in place for the wheel to roll…that being the case, if I want to play the evolving growth story, would IBN and HDB make sense at these levels as banks/ financials should be the engine of any domestic upswing?  How would recommend to play these if I were to make mdeium to high risk bet?

  66. PPHM/qc – it is going to be a while until all of their data comes in on their top clinical candidate.  Last time I looked at them, the stock was MUCH higher, and I think at 1.63, as small bet is worth the risk.  I would not make it big by any means.  I warn, this is a bet, not an investment.  IF it pops for any reason, I would sell 1/2 at least.  I am not real confident on them.

  67. Anyone hear anything about a Malaysian airlines plane (777) shot down near Ukraine border?

  68. (Reuters) – A Malaysian passenger airliner with 295 people on board crashed in Ukraine near the Russian border, Interfax cited an aviation industry source as saying on Thursday.

    It said the Boeing plane was flying from Amsterdam to Kuala Lumpur. Reuters could not immediately confirm the Interfax report.

  69. What a ride on oil this morning. I decided to go short as it approached 102.50 just before 8am only to watch my losses mount after adding to my position two times on the way to a peak of 103.09 at. 9am as my paper losses mounted. Fortunately , I had some luck and a few months experience to give me patience while I waited for the reversal I thought should be coming. I should note that I have gotten burnt once or twice by waiting, but mostly if Phil says there is a shorting opportunity, it usually comes along if you can ride out the occasional head fake such as the one between 8am and 9:30am today. So, in the end a nice $500 gain as /CL dropped all the way to 102.12 by 10:30. I heard Phil telling me not to be greedy, and took my profit before the bottom, which saw it go to 101.88 just a few minutes ago. Now if I can just stop myself from jumping back in and losing this afternoon, the day will be successful despite today's drop in my Apple holdings. 

  70. what just happened to oil?

  71. Damn, I knew I should have jumped back in and gone long at 102! 


  73. PBS/Shadow – You mean that Socialist clap-trap that needs to be defunded?  

    There goes $102 on oil!  Congrats to the players!  That's the new stop line, of course. 

    TASR/Albo – Looks like they discovered gravity.  CMG even more so.  

    Those short calls on TASR and NFLX looking very safe now.  

    Debt/Albo – At the rates Japan charges, I'd have a ton of debt too!  

    Dollar topped out at 80.666.

    TLT 114.19, that's kind of dangery.  VIX only 11.50.  XLF rejected at $23.  

    Not much movement back to gold, just $1,304.  Silver $20.84, copper $3.22, Nat gas $3.97 after a .13 plunge on a build in inventories and gasoline super-lame at $2.86, which is another reason to play oil down (along with Brent under $108 when we usually have a $7 spread).  

    Decay/Pat – Well you pay about .03 just to buy and sell the contract so, if your time-frame is only a week – no big deal, right?  It depends on your target, the way I look at it (and I do prefer to be a bit in the money if possible), the USO Oct $37 puts are .90 with 90 days to go and .50 out of the money so roughly $1.40 in premium and call that 0.015 per day decay.  The $38 puts are $1.40 and .50 in the money so .90 of premium over 90 days is 0.01 per day – 50% better.  

    So, the longer you think you are going to hold the puts, the more it's going to matter.  After 20 days, you are giving up an extra dime (10%).  Also, since the delta on the $37s is .41 and .55 on the .38s – if you do get a $1 move down in USO in your favor, you will make .14 more with the $38s.  So now the $38s make you 30% more on a move down (lose you 30% more too!) AND decay 33% less quickly than the $37s.  Makes for a clear choice to me – UNLESS I'm speculating, in which case the lower delta and cheaper entry may appeal to me.

    Oil/Lunar – I think they retest $99, maybe lower but not into the weekend.  Next week if the inventories can't repeat this week's trick.  Don't forget, contract rollover is next Tuesday so only 3 more days to dump those Aug barrels:

    Click for
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Aug'14 101.49 103.09 101.27 101.95 11:05
    Jul 17


    0.75 137183 101.20 133654 Call Put
    Sep'14 100.80 102.38 100.61 101.20 11:05
    Jul 17


    0.60 105584 100.60 301615 Call Put
    Oct'14 100.03 101.53 99.82 100.32 11:05
    Jul 17


    0.42 46139 99.90 174794 Call Put
    Nov'14 99.26 100.64 99.04 99.41 11:05
    Jul 17


    0.21 32018 99.20 68447 Call Put
    Dec'14 98.55 99.83 98.30 98.60 11:05
    Jul 17


    0.05 61399 98.55 209289 Call Put

     Including today, 133M in 4 days is not too bad.  Assume there will be 23Mb left and that's 110M/4 = 27Mbd to roll.  Including the 110M they have to roll, we'll have 654M in the next 3 months and that's not terrible but it becomes terrible in Sept, when they begin to run into the already swollen fake orders in December.  That's why I targeted October for our shorts – I figured that, by then, the pressure was bound to get very strong to the downside.  

    Translation/StJ – You are benefiting from the exponential growth of the knowledge base (if you can call Kardashian videos "knowledge") and the need to catalog it and translate it into multiple languages.  To some extent, you've also reached a lower price point that probably spurred demand.  That will all be great until all those sentences you are using are gathered up by GOOG or Watson and then used for pennies on the dollar services.  Still, plenty of hay to be made in between.  

    Automation is always a blessing and a curse but you can't argue with the mega-trend:

    There's nothing wrong with this.  There is simply no need for 95% of the men in this country to work.  Obviously, the ones that do produce enough food, clothes, cars, houses, etc. to suit our needs.  We don't have product shortages, we don't have food shortages (just distribution issues) or medicine shortages (similar issues) – we are a land of plenty where over 50% of the population can stay home all day.

    The problem is, the 50% that do work don't divide the money evenly but the average working person still has at least one person they take care of.  That causes poverty in the lower-paying job sector and the people who do have money don't feel that they people who choose not to work (or are unable to get work) should be entitled to money, or food, or clothing, or shelter, or an education.  

    In other words, the working people refuse to support the non-working people and that seems reasonable to our generation, where 95% of all men worked when we were born but what happens in 50 more years, when only 75% of the people are working?  With automation, maybe it will be 50% working in 50 years.  What then?  Do we still only give money to those who work and let others fend for themselves?

    We need to change society in big ways.  We need to rethink our entire relationship with work and money.  That's going to take a long-long time and we're not even trying yet.  

    India/Checho – Like any high-growth emerging market, they are likely to grow in fits and starts.  Neither IBN or HDB are cheap at the moment, why not make a top 10 list and watch them through earnings – you might get a nice sale or two.

    Malaysia/Decade – Report says crash, not shot down.  Still, that's what spiked oil – good for another short.  

  74. CNBC just reported the Malaysian plane crash too!  On previous subject, I too wonder what happened to make oil jump like that?

  75. Oil/Craigs – Way to ride that bronco!  

    Gold jumped to $1,316.  Too funny, you can see what a hair trigger everything is on yet NONE of those risk factors are priced into stocks.  

  76. Actually, given that the flight path stopped dead at the Ukraine boarder – I would want to hear for sure it wasn't shot down before drawing conclusions.  

  77. Phil: ground-to-air missile (reuters/interfax)

  78. BA Friday $128 puts have a .25 permium at $1.25 – goulish but could work well.  

  79. SNDK/Phil – is today's reaction(overreaction) to earnings a good place to take a poke at sndk or do you think more downside to come? I have liked this stock for long time but always seems too pricey when I look to get in.

  80. Good excuse to short DAL with Aug $37 puts at $1.50.

    SNDK/Craigs – Let the downgrade police have their say first.  If you remind me on the weekend, I'll dissect the earnings issues.  

  81. Hey, what if this plane is just missing, like MH370?  Imagine if we lose another one without a clue?

  82. Phil

    I spend most on my viewing time on PBS, without that socialist crap I would have to stop completely.

    You can be assured a spy plane or drone caught it but investigation keeps people in worthless work. I am sure it is clear what happened. Like your town wanting to cover up that a hired driver screwed up.

  83. CBS news says the plane was shot down from 33,000 feet. Pictures of the smoke from a distance.

  84. Officially it was shot down now.  Wow, that sucks.  

    All kinds of ugly things can happen now – be careful.  In the STP, we're going to buy back the DXD Oct $29 calls (.30) 

  85. Shadow,

    Methane – I think you are referring to natural gas hydrates formed in ocean-floor sediment.  There have been claims made for decades that there is a tremendous volume of methane trapped in this form world-wide.  I conducted some of the earliest research for USDOE on hydrates using well log data from the Pt. Borrow field in Alaska.  I found no evidence of hydrates but, to be fair, the logs were not run expressly for that purpose.  Hydrates form within a stability window of pressure and temperature (we used to make and store them in the lab) so even if the entire column of seawater warms (unlikely) including several hundred meters of seafloor sediment (very unlikely) the risk of dissociation is still pretty low since sea level will have risen increasing pressure and maintaining stability.  Even where sea floor drilling has penetrated hydrates, the hydrates have made the trip to the surface intact.  We are at way more risk of a significant bolide impact than serious climate upheaval from sea-floor methane releases, in my opinion.

  86. Phil, working on adjusting my CZR bfly, with the big jump today would you still sell the Sept 16's ($2) or sell the $17.50($1.05)?

  87. Guy on CNBC says plane was hit with high-tech laser-guided missile, not some shoulder rocket from the ground.  

  88. shot down interfax said am hour ago it was a buk missle system not sure what that is tho

  89. CZR/Butterfly, Doro – Of course we'll adjust.  ALWAYS sell into the excitement.  The $17.50s are just $1.05 at the moment so I'm not sure I want to give up .55 but we can sell 5 of the $16s at $2 (because we can always roll them to 10 of the $17.50s better than even) and look to sell 5 of the $17.50s for $1.50 or better if possible (at which point we would then roll the 5 $16s to 5 more $17.50s for about net .75 and we'd net into 10 of the $17.50s for net $1.15 anyway but, this way, we are more flexible in case things go south. 

  90. Looking at the last 4 months, I think the main lesson learned today is don't fly on any Malaysian airlines.  Between missing planes and shot down planes, I'll go by boat if it was life and death about going to Malaysia.

  91. sibe

    Bolide impact, meteoride isn't anything I fear, an act of god. What the PBS show was saying is there is an ice layer, actually fresh water that stays because the salt water is liquid colder. Methane has collected below, trapped by the ice. Not sediment, they press if the permanent ice disappears the water will warm quickly and melt the bottom ice, releasing the gas to rise up into the atmosphere. The area of concern is only under the permanent ice, an area your research may not have covered.

  92. Phil, thoughts on oil with the plane attack? 

  93. Phil

    What do you think of PXLW Pixel works,? 


  94. Phil,

    Do you think we should hang on to the XOM Aug 100 puts.  Down about 25%, but like others I'm wondering what would happen if this plane attack spikes oil…would it have the inverse effect on XOM?

  95. AAPL – I have been buying AAPL Oct14 C95 for $3.85 (and less) this morning … obviously a few idiots have now joined me! ;-)

  96. When I flew from Paris to Moscow back in April, that was my biggest fear that we would fly over that war zone in Ukraine and some idiot would take a shot at us. Fortunately, that Air France flight seemed to have flown north of Ukraine over Belarus and avoided it altogether.

  97. Phil, to clarify my question…Oil goes up, XOM goes up, right?

  98. Sorry guys, I have to run to my meeting, will catch up this evening. 

    Oil/Options – On the whole, there shouldn't be a lasting effect but, short-term, any turmoil is an excuse for them to jack up prices.  

    PXLW/ QC – remind me to take a closer look later.  

    XOM/Jeff – I think I'm more inclined to press it than kill it at the moment, but need to let things settle a bit.  

    Land yes, XOM likely to follow oil higher.

    Lster all!

  99. Karl Rove, f**king idiot that he is wrote such a bs piece on how to run against obamacare.  Frist, he says the nation clearly doesn't want it according to a FOX news poll.  I'm guessing viewership on FOX news is at least 90% Republican and still 38% of their viewers liked it with 55% against.  If anything that's a case for Obamacare.  And then he goes on to take other facts out of context, so it's basically one big lie.  Of course a couple months ago, he went on news stations saying Hillary Clinton has permanent brain damage.

  100. StJ/translation – Interesting arena. I pick up a few bucks in my retirement by editing translated medical articles pre-submission (mostly) for Korean scientists. Most seem to have been written in English by the authors, I think with no use of software or even a professional translator. It sounds like the European languages are way ahead in this field, or perhaps these poor scientists simply have no access to whatever is available for Korean to English translation.

  101. Pharm?? I have a few shares of ARIA. Do you think this might be a good time to sell some puts? November, maybe?

  102. This is from Briefing Trader :

    IBM Q2 Earnings Preview (194.36 +2.00)

    Top Points:
    •IBM is scheduled to report fiscal second quarter earnings today after the close. There is a conference call scheduled for 16:30 ET (the co typically guides in the press release).
    •Capital IQ Consensus Estimate calls for Q2 non-GAAP EPS of $4.31 on revs of $24.1 bln.
    •The co is expected to update its expectations for FY14 EPS (reiterated at least $18.00 in April) where consensus stands at $17.87.
    •Co reaffirmed its objective to achieve at least $20 of operating EPS in 2015 ($19.79 FY2015 Capital IQ Consensus Estimate) on last quarter's earnings call.
    •IBM has posted rev declines the past eight quarters running, and has missed sales expectations five quarters in a row.
    •On last quarter's earnings call, mgmt reminded investors that co's free cash flow generation is always skewed to the back end of the year. Looking back over the last 10 years, the average free cash flow generated in the first quarter is less than 5% of co's full-year total. Mgmt still expects to grow free cash flow by about $1 bln and to meet the $16 bln goal for the year, even with a tax headwind this year (bulk was taken in Q1).
    •In May, IBM announced that it will stop buying and reselling storage units from NTAP (N-series) and will focus on selling its own Storage solutions.
    •Earlier this week, Apple (AAPL) and IBM announced a partnership to transform enterprise mobility through a new class of business apps, building a new IBM MobileFirst for iOS solutions.
    •Last week, IBM announced that it is investing $3 bln over the next 5 years in two broad research and early stage development programs to push the limits of chip technology needed to meet the emerging demands of cloud computing and Big Data systems.
    •Co increased its quarterly dividend by 16% to $1.10 from $0.95 per share in April.

  103. From Bloomberg, Jul 17, 2014, 1:00:35 PM

    July 17 (Bloomberg) — Ukrainian rebels shot down a Malaysian jet carrying 295 people over eastern Ukraine near its border with Russia, a Ukrainian Interior Ministry official said. Peter Cook reports on “Market Makers.” (Source: Bloomberg)

    A Malaysian Airlines jet was shot down over eastern Ukraine killing all 295 people on board, with the government in Kiev blaming pro-Russian rebels. The separatists deny the accusation.

    To read the entire article, go to

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

  104. Watch this video at

    Ukraine Pres.: Ukraine Army Didn’t Shoot Plane

    July 17 (Bloomberg) — Ukrainian rebels shot down a Malaysian jet carrying 295 people over eastern Ukraine near its border with Russia, a Ukrainian Interior Ministry official said. (Source: Bloomberg)

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

  105. Watch this video at

    Ukraine: Plane Crash Kills 280 Passengers, 15 Crew

    July 17 (Bloomberg) — Pro-Russian rebels shot down a Malaysian jet carrying 295 people over eastern Ukraine near its border with Russia, an Interior Ministry official said. Ryan Chilcote reports on “Market Makers.” (Source: Bloomberg)

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

  106. From Bloomberg, Jul 17, 2014, 12:58:50 PM

    Twenty-three U.S. citizens were aboard Malaysian Airlines Flight MH17 when it crashed in Ukraine, according to a Russian Interior official. The plane was reportedly downed by pro-Russian rebel forces, who have denied responsibility.

    To read the entire article, go to

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

  107. From Bloomberg, Jul 16, 2014, 7:35:38 PM

    A trader works on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg

    Two years of uninterrupted gains in U.S. stocks are sowing anxiety among financial professionals, with three in five saying the market is on the verge of a bubble or already in one, the Bloomberg Global Poll found.

    To read the entire article, go to

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

  108. From Bloomberg, Jul 16, 2014, 7:03:21 AM

    Rupert Murdoch, chairman of News Corp., during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 10, 2014. Photographer: Daniel Acker/Bloomberg

    Poor Australia. It’s responsible for just a tiny fraction of the global warming that’s occurred so far and has already been bearing the punishment in the form of a national carbon tax — repealed today by Parliament.

    To read the entire article, go to

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

  109. From Bloomberg, Jul 16, 2014, 9:17:11 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, seeking to pull off his biggest deal ever, has brought some of the old team together again — and made some substitutions.

    To read the entire article, go to

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

  110. From Bloomberg, Jul 17, 2014, 1:04:31 PM

    Alibaba Group Holding Ltd. will wait until September to conduct its U.S. initial public offering, a person with knowledge of the matter said, as it seeks regulatory approval of its prospectus.

    To read the entire article, go to

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

  111. The media merger guessing game

    01:20 PM ET · FOXA

    • If 21st Century Fox (FOXA +0.1%) strikes a deal to buy Time Warner (TWX +3.7%), media analysts thinks a chain reaction will occur.
    • CNN will almost assuredly be unloaded, most likely to Disney (DIS +0.6%) or CBS (CBS +2.5%).
    • The development could also draw out a tech giant such as Apple or Google to make a bid for content-heavy Lions Gate (LGF +0.1%) or Discovery Communications (DISCA +2.2%).
    • Though premiums in the media sector are expected to get quite frothy, having significant content owned in perpetuity might pay off in the future as some licensing costs go away.
    • Looking for a wildcard scenario? NYT M&A writer David Gelles thinks a spoiler plan would see Time Warner take the defensive measure of trying to buy out CBS.
    • A catch-all for investing in media stocks is the PowerShares Dynamic Media ETF (NYSEARCA:PBS).

  112. Russian/Ukranian stocks tumble following plane crash

    01:13 PM ET · YNDX

    • Tech/telecom names with strong Russian or Ukranian exposure are falling hard after Malaysia Airlines flight MH17 crashed in Eastern Ukraine. A Ukranian government official claims rebels shot down the plane.
    • Yandex (YNDX -5.4%), Luxoft (LXFT -5.6%), Qiwi (QIWI -8.1%), VimpelCom (VIP -3.7%) and MTS (MBT -3.1%) are all off sharply.
    • The Market Vector Russia ETF Trust (NYSEARCA:RSX) is down 5.4%. Other Russian ETFs: RUSL, RSXJ, ERUS, RUSS, RBL, RUDR

  113. Worries build around Sears Holdings

    12:37 PM ET · SHLD

    • A scan of the cost of credit protection at Sears Holdings (SHLD -3.8%) disturbs Strategas Research Partners.
    • The cost to protect Sears debt is now at its highest level since 2012.
    • SHLD CDS chart

  114. SunEdison’s YieldCo spinoff hikes IPO price range

    12:34 PM ET · SUNE

    • SunEdison’s (SUNE +0.9%) TerraForm Power (Pending:TERP) solar project YieldCo has hiked its IPO price range by $4 to $23-$25.
    • IPO Boutique says the offering, which is set to price tonight, and begin trading tomorrow, is “multiple times oversubscribed.”
    • At the midpoint of the range, TerraForm would be worth $2.3B, and raising $547M. The company is selling 20.1M shares through the offering, and 2.7M through private placements.
    • SunEdison is set to own 67.2M shares post-IPO, and maintain 95.2% voting power.
    • Prospectus, IPO analysis
    • Prior TerraForm coverage

  115. Interest builds in World Wrestling Entertainment amid media merger buzz

    12:15 PM ET · WWE

    • Shares of World Wrestling Entertainment (WWE +6.5%) move higher on heavy volume on renewed buyout speculation.
    • The M&A buzz in the media sector kicked into a higher gear yesterday after 21st Century Fox made an offer for Time Warner.
    • Though the streaming sub growth at WWE hasn’t dazzled, analysts think the initiative could still draw interest from a company on the distribution side of the business.

  116. Plan D for Aereo?

    12:03 PM ET

    • Aereo’s bid to be classified as a cable company suffers a major setback after the U.S. Copyright Office tells the upstart media company it won’t even process its paperwork.
    • The government agency’s reading of the SCOTUS ruling varies widely from the creative spin Aereo has tried to put on it.

  117. Aluminum prices jump to 16-month high

    11:39 AM ET · AA

    • Aluminum prices reach their highest levels in 16 months as falling inventories, smelter closures and a strong demand outlook continue to attract buyers.
    • Companies such as Alcoa (NYSE:AA), Rusal and Rio Tinto (NYSE:RIO) have been shutting smelters over the past two years in an effort to tackle aluminum oversupply, while demand has remained strong; Citi sees demand growth of 6%/year through the end of the decade, driven by the increased use of aluminum in car production.
    • Sentiment also has been helped by declining inventories, as LME stocks have dropped below 5M metric tons for the first time since Sept. 2012, but analysts say it will take years to whittle away at the further 5M tons of inventories thought to be held in non-LME warehouses.
    • ETFs: JJU, FOIL

  118. State Medicaids feeling the pinch from Sovaldi

    11:02 AM ET · ESRX

    • An analysis by Express Scripts (ESRX +0.1%) shows the enormous potential costs confronting state Medicaid programs of paying for Gilead’s (GILD +1.1%) HCV treatment Sovaldi. The $84,000 full regimen tab will put substantial budgetary pressure on many states like CA ($6.8B), TX ($5.4B) and FL (3.8B) if every HCV sufferer is treated.
    • Express Scripts estimates that more than 750K Medicaid patients have chronic HCV infections (total cost to treat with Sovaldi + ribavirin or Olysio (JNJ -0.5%) = ~$55B).
    • Despite Gilead’s assertions that Sovaldi actually saves money by curing HCV and avoiding the costs of liver failure, Congress has launched an investigation into its pricing rationale. The company’s previously announced plan to sell Sovaldi to Egypt for $900 potentially complicates its position.

  119. Airbus outdoes Boeing at Farnborough

    11:01 AM ET · EADSY

    • Airbus (OTCPK:EADSY) crushed Boeing (BA +0.1%) in the orders race at this year’s Farnborough Airshow with almost twice as many orders and commitments.
    • At the expo close: Boeing reported $40.2B in new orders for 201 planes versus Airbus’ 496 aircraft valued at $75B.
    • Much of Airbus’ success is attributed to its lower priced A320neo and newly announced A330neo.

  120. Blackstone gains following Q2 beat; performance fees soar

    10:55 AM ET · BX

    • Blackstone (BX +2.7%) had $279B in assets under management (AUM) at the end of Q2, up from $272B at the end of Q1 and +21% Y/Y. Gross asset inflows totaled $14.1B, and have totaled $62.4B over the last 12 months (LTM).
    • Economic net income (ENI) for the last 12 months amounts to $4.3B, up from $3.7B at the end of Q1. ENI +85% Y/Y in Q2 to $1.15/unit, distributable earnings +128% to $0.65/unit.
    • Q2 fee revenue +7% Y/Y to $663M, performance fees +94% to $1.4B, investment income +81% to $176M. Total expenses +24% to $886M.
    • Blackstone’s P-E fund carrying value rose 8.4% in Q2, and is up 28.3% LTM. The BCP V fund has crossed the preferred return threshold.
    • Real estate fund carrying value rose 6%, hedge fund solutions had a gross composite return of 2%, and credit fee-earning AUM is up 16% LTM to $56.1B.
    • $20.3B in capital has been invested LTM (+31% Y/Y), and $50B returned to investors.
    • Shares are nearing a 52-week high of $35.39.
    • Q1 results, earnings slides (.pdf)

  121. Australia repeals carbon tax, BHP says move will help competitiveness

    10:44 AM ET · BHP

    • Australia repeals pro-environment carbon laws that put a price on greenhouse gas emissions, the first time a developed nation has made such a U-turn.
    • Australia is one of the world’s largest per capita greenhouse gas emitters due to its reliance on coal-burning power stations to power homes and industry, but the country’s voters blame the climate laws for rising energy bills and living costs.
    • The tax was voted out even as it appeared to be working in reducing carbon emissions, according to The Guardian.
    • BHP CEO says repealing the “mis-designed” carbon tax would be important in increasing Australia’s competitiveness; J.P. Morgan analysts have estimated that the removal of the carbon tax, together with repeal of the government’s mining levy, would boost its valuation on companies such as BHP and Rio Tinto (NYSE:RIO) by as much as 6%.
    • Australia’s repeal may reverberate internationally ahead of global climate talks next year, when major economies like China, India and the U.S. will consider global greenhouse targets beyond 2030.

  122. Bed, Bath & Beyond closes on note offering and announces accelerated buyback program

    10:43 AM ET · BBBY

    • Bed Bath & Beyond (BBBY +0.6%) announces it closed on its $1.5B senior note offering. An extra $46M in interest expenses will be added for the fiscal year as a result of the new issuance.
    • The company also disclosed that it entered an accelerated share repurchase agreement with Goldman Sachs to buy back $1.1B in stock.

  123. Albo, Thanks for the summary on IBM.

  124. Heard during Yum Brands’ earnings call

    10:17 AM ET · YUM

    • Executives with Yum Brands (YUM -4.7%) faced rapid-fire questions on the restaurant operator’s mixed results during a conference call this morning.
    • The KFC brand in China is being revamped with a shift in marketing toward higher-priced items. Don’t focus on transaction count, says management. The brand dynamics are on the rise, although some caution on 2H is thrown out.
    • There’s no enthusiasm rendered over a question on the separation of Pizza Hut, although execs are pretty pointed that the performance of the brand in the U.S. has been disappointing. New initiatives in Q4 should help stoke growth at Pizza Hut.
    • The breakfast initiative at Taco Bell is said to already be at a break-even point.
    • The key takeaway from the call is that the company still sees double-digit EPS growth next year and beyond.
    • Earnings call webcast

  125. Sibe14 -I'll be watching from the sideline.

  126. ARIA – I would layer in slowly if one must, but personally, I am waiting until after OPEX to sell any put.  Things might heat up, and Mondays after OPEX are mostly down.  Jan $4s is what I would watch.  Big lot just went through.

  127. lol someone had a sense of humor when they picked that symbol "A catch-all for investing in media stocks is the PowerShares Dynamic Media ETF (NYSEARCA:PBS)."

  128. Translation / Snow – More likely, the translation that you are editing is done in-house by the company that employs these scientist and they don't use any of the translation tools available on the market. Most translation vendors use these tools nowadays. They have been around for over 20 years now. I was a very early adopter but 20 years is usually enough to spread to 99% of users! And these tools work for every language out there, even bi-directional ones like Arabic and Hebrew. The 500K word project I just completed was into Korean…

  129. Thx Pharm. I'll follow your lead.

  130. From Bloomberg, Jul 17, 2014, 1:54:25 PM

    Federal Reserve Bank of St. Louis
    President James Bullard said gains in the U.S. labor market and
    inflation accelerating toward the Fed’s 2 percent target may
    prompt an earlier exit from unprecedented stimulus.

    To read the entire article, go to

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

  131. From Bloomberg, Jul 17, 2014, 1:28:48 PM

    There’s a disconnect between
    builders’ views on the U.S. housing market and how it looks on
    paper. That may bode well for the industry.

    To read the entire article, go to

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

  132. From Bloomberg, Jul 17, 2014, 9:45:04 AM

    Pedestrians carry shopping bags while crossing the street in San Francisco. Photographer: David Paul Morris/Bloomberg

    American consumer sentiment held last week near the highest level of the year as an improving job market made households more inclined to spend.

    To read the entire article, go to

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

  133. Getting caught up.  I guess now that the plane was shot down, the BA put trade is moot right?  

  134. Burrbern/BA

    the DAL trade still looks good

  135. Isn't the premise though that a plane crash and wasn't shot down?  If it was shot down, that shouldn't affect prices of airlines.  

  136. If it was shot down it should not affect BA or the airlines… They don't build these airlines to survive in war zones!

  137. Everyone denies shooting the plane down. We should consider it was blown up, don't forget all the security warnings. Makes sense to pick a hated airline.

  138. The market is doing better than I would have thought given these 3 events :

    Federal Reserve Bank of St. Louis
     President James Bullard said gains in the U.S. labor market and
     inflation accelerating toward the Fed’s 2 percent target may
     prompt an earlier exit from unprecedented stimulus

    Russian sanctions. Escalating tensions with Russia is Ill advised IMHO.  A wounded bear is a dangerous bear.

    Shooting down of Malaysian airliner.

    Seems that professional investors are wary of the market while the public is getting bullish.  Seems like it should end badly.  We'll see.

  139. Pharm,

    ISCO popping a bit

  140. Damn….been busy and missed the 6c entry….we DD at 12….so ave for me is ~16c.  I will hold here. 

  141. checho – Re: IBN

     3K+ Jan16 C70 contracts were BOUGHT against ZERO open interest. Somebody big believes they can move this stock …

  142. pharm, which trade for 6c?

  143. Bought 10 AAPL July14 C94 (tomorrow) for .18 ($180.00) … since it seems like a good risk/reward lottery pick …

  144. ISCO lunar.

    Israel invades Gaza….here we go.

  145. STJ/translation….no, these guys are mostly academic physicians in university medical schools. Having been in academia myself, I'd be surprised if they get any resources at all. I see a lot of Korean structure in their English, so they're clearly thinking in Korean while writing in English.

  146. VIX – Up 30%.  Good news is I have some Aug calls.  Bad news is I had some Jul calls which expired yesterday.  Day late and a dollar short. :-(

  147. VIX calls albo…yep….me 2. 

  148. Phil / disaster puts – I have the SDS sept spread and QQQ august puts.  i seem to recall us having a list of disaster puts on about 10 or 20 companies you would pick at toppy times like this.  any good ideas for now?

  149. VIX up 36%, VXX up 9%.  That is a good damn hedge (not).

  150. You know what's really irritating – CNBC showing people clapping at the close after a crappy day in the markets and everything else happening in the world today!

  151. Pharm – What's great with these VIX spikes is that it does make VXX go down even faster afterward! 

  152. Terra / Picks
    Personally I would wait, bit heres a few rounds of posts




    ISRG ( offset to bull spread ) 


    EWZ  ( Brazil )










  153. CNBC is now saying SODA will bring peace to the middle east.  They are beyond a farce network.

  154. Off the board lately, as changing countries with a family of six is somewhat time consuming.  Ironically, my portfolio has done better as a result,  since I don't have time to play positions for their entertainment value.  But mostly, it's doing well for having internalized enough PSW lessons to be able to hedge properly, so thank you, Phil [whose handle should be changed to "Yoda"] for teaching me to make money on both up and down days, and, above all, not lose money, given the cruel mathematics of doing so.  Today looked shaky, slapped on a short TZA hedge, ended in the green, smiling!!

  155. Hi Phil- General strategy question.  I have an IRA with 800 shrs of SPY and some additional cash for hedging (about $10k).  What can I do to hedge in non-margin accounts?  As far as hedge timing / protection amounts I was going to follow along with the STP recommendations as a general guide.  Make sense or should I take a different approach?  Much appreciated!

  156. So, we have a bunch of analysts looking for a 10% correction.

    IWM High 120, currently 112, -6.7%

    DIA High 171, currently 169.5, -0.8%

    QQQ High 96, currently 95, -1%

    SPY High 198, currently 196, -1.1%

    IWM calling for a bounce up to the -1% range or are the other 3 going to drag down 5%?  Seems like the path of least resistance would be for IWM to climb.

  157. emailmikeonline

    Assuming it is still an options account, you woudl do the same hedges we do here… calls on SQQQ and TZA (right now, SQQQ would probably be the way to go considering how much stronger the QQQ has been than IWM).

    I personally have a $40 Sept Call on SQQQ that I'm trying to cover with a $45 Sept but if it doesn't close soon I'm going to pull the trigger on shorting the $50 instead.  Regardless though, tomorrow is probably going to be an up day with IBM and GOOG both rising so wait until the dust settles before initiating any positions.

    Unless you are totally unhedged…

  158. Got throttled playing /CL today…

  159. Hey, what happened?  

    Everything was all calm when I left and now, BOOM!  

    Was it Bullard?


    Headline says SBU says they intercepted phone conversations from the separatists admitting downing a civilian plane.

  161. Bullard talked about raising rates sooner than planned if macro conditions continue to improve at the present pace, but Bullard doesn't get to vote this year, creating the sensation that they picked the guy with no teeth to bare his fangs.  Just jawboning — a warning shot fired with blanks.  A major stock selloff is about the last thing the U.S. economy needs right now if it is truly starting to improve, I would venture.

  162. BA/Burr – Sorry, the premise was that it was shot down but shooting planes out of the sky is a generally bad thing that could dampen the airline industry and, then, hurt BA.  Had it just been a crash of a BA plane – also bad.  That's why I liked that bet.  DAL was specifically because it was shot down and they had international exposure.  I would have gone with UAL (my first choice) but, when I looked at their options, the prices were too silly.

    Disaster puts/Terra – Been a long time since we've wanted to put a list like that together.  Premise is to find overbought companies that are likely to fall anyway, whether or not in a market correction.   Remind me over the weekend and I'll see if we can find some.  

    CNBC/Tshroy – Completely out of touch with reality.

    List/Wombat – What list is that?  

    Very nice ZZ – you can't overstate the value of being able to get on with your life while your portfolio takes care of itself!  

    SPY/EmailMike – Welcome, by the way!  Well, $176,000 worth of SPY is a good amount.  Keep in mind you can hedge in a taxable, margin account, you don't HAVE to hedge in the IRA.  If you have no margin, though, you just want to avoid short puts but SPXU (3x short SPY) is a reasonable Ultra and you can buy the Jan $50s for $4.50 and sell the $60s for $2.50 for net $2 on the $10 spread.  If you bought 25 of those spreads for $5,000, a 10% drop in the S&P would put you $25,000 in the money – so very well protected vs the anticipated $17,600 loss.  

    When the price of the $50s falls below the net of the spread ($2.50), then you can spend another $2.50 to roll yourself to another year of protection (the 2016 $45/65 bull call spread is $3) and that, then, becomes your annual insurance cost.  

    I would point out that, since you own 800 shares of SPY, you could sell 4 2016 $200 calls for $10.75 and collect $4,400 to pay for some of your insurance costs.  If SPY is at $210 (2,100 S&P), you only owe $4,000 back vs your 800 x $15 gain ($12,000) and, of course, you can then roll the short calls to 2x a higher strike. 

    IWM/JPH – Canary in the coal mine.  You are looking at a dead canary and saying "ignore the warning – path of least resistance is for canary to rise from the dead" – what then, is the point of having a canary?  

  163. Oil/Jeff – Yeah, they really flew.  $103.75 now.  Not likely to back off into the weekend but a great short next week. 

    Bullard/ZZ – They HAVE to raise rates.  If not in 6 months, then within the next 6.  They have to start preparing people for it because none of it is priced into the market.  

    • Stocks sold off in a day of dramatic geopolitical turmoil, with the Dow falling back below 17K and the S&P 500 falling the most in more than three months.
    • Sentiment was negative from the beginning following new U.S. and European sanctions against Russia; stocks tumbled after the crash near the Russia-Ukraine border of a passenger jet with 295 people on board, and then took another leg down as Israel launched a ground offensive in Gaza.
    • The events and subsequent declines jolted investors who had grown accustomed to steady gains in mostly quiet trading.
    • Various technical support levels were breached by the S&P 500 as well as the Russell 2000, which fell below its 50-day and 200-day moving averages.
    • Almost unnoticed was data on U.S. home construction, which fell 9.3% in June; housing starts sank last month to 893K, their weakest showing since September.
    • The risk aversion trade gained momentum as the session progressed, manifesting itself in the Treasury market, where the 10-year note jumped 20 ticks lowering its yield to 2.45%, and in the VIX, which soared 39% off a depressed base.
    • Gold futures jumped $16.70 (1.4%) to $1,316.15, and Nymex crude oil rose $1.78 (1.7%) to $102.98; however, natural gas priced tumbled to seven-week lows as U.S. stockpiles rose last week rose at an above-average pace.
    • Airline stocks have fallen off more than broad market averages following the crash of a Malaysian Airlines flight in the eastern edge of Ukraine.
    • Several global carriers have halted flights over Ukraine.
    • Decliners: Delta Air Lines (NYSE:DAL) -3.4%, United Continetnal (NYSE:UAL) -3.9%, China Eastern Air (NYSE:CEA) -2.2%, American Airlines (NASDAQ:AAL) -3.3%, Malaysian Airlines (OTCPK:MLYAF) -5.5%.
    • Shares of Fifth Third Bank (FITB -6.4%) hit their lows for the day after FITB lowered its guidancefor full-year pre-provision net revenue and net interest income, citing pressure in the mortgage business and the discontinuance of a small-dollar loan product that came under regulatory scrutiny.
    • Large lenders have been hit by the slowdown in mortgage lending, and FITB is no different; adjusted for a gain from the sale of Vantiv shares and other items, Q2 earnings fell 7% Y/Y, mostly from a 67% Y/Y in mortgage banking revenue to $78M.
    • Mortgage originations fell to $2B from $7.5B a year earlier, but were up from $1.7B in the previous quarter.
    • Transocean's (RIG -2.4%) latest fleet status report revealed delays with two of its drill ships, prompting Global Hunter to cut its EPS estimates for Q2 to $0.99 from $1.14 vs. the $1.13 analyst consensus estimate and for FY 2014 to $4.42 from $4.62 vs. $4.32 consensus.
    • Contract commencements of two ultra-deepwater newbuild drillships were delayed by a quarter until Q3, pushing out the start of contracts on the Deepwater Asgard at $600K/day and the Deepwater Invictus at $595K/day.
    • Estimated 2014 planned out-of-service time increased by a net 141 days, including 168 days associated with the Transocean Amirante in anticipation of potential future contracts.
    • Herbalife (HLF -1.2%) publishes an updated refutation of Pershing Square's statements questioning its business model and the satisfaction of its many distributors.
    • The company has created a website,, where Herbalife customers and distributors share their positive experiences.
    • The last statement in the main body of the press release concisely sums up its opinion of the affair: "Ultimately, Pershing Square's campaign is based on propaganda, and we look forward to demonstrating that its assumptions will crumble under serious and independent scrutiny."
    • IBM (NYSE:IBM): Q2 EPS of $4.32 beats by $0.03.
    • Revenue of $24.36B (-2.2% Y/Y) beats by $230M.
    • Guidance for full-year EPS of at least $18 is reiterated. Consensus is at $17.87.
    • Shares +2.4% AH. CC at 4:30PM ET.
    • Press Release
    • With the help of easier comps, IBM's hardware/chip sales fell 11% Y/Y in Q2, a notable improvement from Q1's 23% and Q4's 26%. Mainframe sales -1%, Power servers (UNIX-focused) -28%, x86 servers (due to be sold to Lenovo) -3%, storage -12%, chips (reportedly on the block) -18%.
    • Global Technology Services -1% vs. -3% in Q1. Global Business Services -2% vs. flat Q1 growth. The services backlog stood at $136B, -1% Y/Y after backing out the sale of IBM's customer care outsourcing ops to Synnex.
    • Software revenue +1% vs. +2%. OS sales (hurt by server weakness) fell 13%, while middleware rose 1%. Global financing +4% vs. +3%.
    • Big Blue spent $3.7B on buybacks, less than the whopping $8.2B spent in Q1. Gross margin rose 40 bps Y/Y to 49.1%. Q2 free cash flow was $3B, less than net income of $4.3B (continuing a recent trend).
    • Americas revenue -1%, EMEA +1%, Asia-Pac (weak in recent quarters) -9%. "Growth markets" -7%, and BRIC countries -2%.
    • Tax rate was 20%, even with Q1 but down from 22% a year ago. IBM ended Q2 with $9.7B in cash, and $17.1B in non-Global Financing debt.
    • IBM now -1.1% AH. Q2 resultsPR.
    • Seagate Technology (NASDAQ:STX): Q4 EPS of $1.10 in-line.
    • Revenue of $3.3B (-3.5% Y/Y) misses by $20M.
    • Shares -3.19% AH.
    • Press Release
    • AMD expects Q3 revenue to be up 2% Q/Q (+/- 3%). That's unfavorable to a consensus for 9% Q/Q growth.
    • Computing Solutions sales (PC/server CPU) +1% Q/Q and -20% Y/Y in Q2. Division op. income was $9M. CPU ASPs rose Q/Q and Y/Y, but volumes fell (share loss).
    • Graphics & Visual Solutions sales (GPUs, embedded/console) +5% Q/Q and +141% Y/Y. GPU revenue fell Q/Q due to lower channel sales (partly offset by desktop OEM and professional GPU growth). GPU ASPs fell Q/Q and Y/Y.
    • Q2 gross margin was 35%, flat Q/Q and down from 41% a year ago. GM has been pressured in recent quarters by a mix shift towards console processor sales.
    • Q2 resultsPR
    • SanDisk's (NASDAQ:SNDK) soft Q2 gross margin and muted Q3 margin outlook stems from a "strategic decision" to supply Apple with a huge volume of embedded NAND flash and SSDs at lower margins, says Susquehanna. Susquehanna, RBC, and others are defending SanDisk's move, arguing the near-term pain is worth the long-term benefit of a strong relationship with Apple.
    • The company's below-consensus Q3 sales guidance is chalked up to supply constraints for 19nm NAND flash parts amid healthy demand from OEMs (likely including Apple) and enterprise SSD clients.
    • SanDisk stated on its CC (transcript) it now expects its 2014 bit supply growth to be at the low end of a prior 25%-35% guidance range due to the constraints. Industry supply growth is still expected to total 40%.
    • Needham (Buy) thinks SanDisk will ramp 19nm capacity in Q4, and expects a mix shift towards embedded NAND and SSDs to boost margins long-term. Morgan Stanley (Equal-Weight) isn't as enthusiastic. "We expected 14% Q/Q bit growth, 6% ASP declines, and 3% cost declines; instead they did 31% bit growth, 16% ASP declines, and 12% cost declines."
    • Micron (NASDAQ:MU) continues following SanDisk lower. Needham recommends buying on the weakness.
    • As part of the company's huge layoffs, Microsoft (MSFT +1.3%) is shutting down its Xbox Entertainment Studios unit. The unit, which was working on original programming for Xbox Live, was formed in 2012 and headed by ex-CBS Network chief Nancy Tellem.
    • Microsoft also plans to wind down the Nokia unit's long-struggling feature phone ops. In an internal memo picked up by The Verge, Nokia phone chief Jo Harlow says the unit's Asha, Series 40, and Nokia X lines will shift to "maintenance mode," with services supporting existing hardware closing within 18 months.
    • The Verge adds Microsoft is planning to hand off Nokia's MixRadio music service to a third party. Meanwhile, a memo from hardware chief/ex-Nokia CEO Stephen Elop suggests multiple manufacturing/engineering sites will be closed, and says the Nokia unit will "focus on driving Lumia volume in the areas where we are already successful today."
    • Nosediving feature phone sales led Nokia's phone unit to post a 30% Y/Y Q1 revenue drop to €1.93B, and a -16.9% op. margin.
    • ZDNet's Mary-Jo Foley reports Windows engineers (mainly testers) are among the 5K+ non-Nokia employees set to be laid off, and that Windows product managers and development engineers will gain new responsibilities. She adds Microsoft's goal is to "make the OS team work more like lean startups."
    • In tandem with its Q2 report, Google (NASDAQ:GOOG) announces long-time sales chief Nikesh Arora (well-respected in the industry) is leaving to become SoftBank's (OTCPK:SFTBF) vice chairman and Internet/Media chief.
    • Google's paid clicks (boosted by mobile and product listing ads) rose 2% Q/Q and 25% Y/Y in Q2, after growing 25% Y/Y in Q1. Paid clicks on Google sites rose 6% Q/Q and 33% Y/Y, while those on ad networks were down 5% Q/Q and up 9% Y/Y.
    • Cost per click (hurt by low smartphone ad prices) was flat Q/Q and down 6% Y/Y. The Y/Y drop was narrower than Q1's 9%. CPC was down 2% Q/Q and 7% Y/Y on Google sites, and up 3% Q/Q and down 13% Y/Y on ad networks.
    • Google sites revenue (69% of total) +23% Y/Y vs. +21% in Q1. Network revenue (21% of total) +7% Y/Y vs. +4%.  Other revenue (10% of total, includes hardware and Google Play) +53% vs. +48%.
    • Traffic acquisition costs were 23% of revenue, even with Q1 and down from 25% a year ago. Opex was 35% of revenue, even with Q1 and up from 34% a year ago.
    • Free cash flow was $2.98B, below net income of $4.18B. Capex was a hefty $2.65B.
    • Google ended Q2 with $61.2B in cash, up $1.8B Q/Q.
    • GOOG +2% AH. Q2 resultsPR.
    • Google (NASDAQ:GOOG): Q2 EPS of $6.08 misses by $0.15.
    • Revenue of $15.96B (+21.7% Y/Y) beats by $350M.
    • Shares +1.1%.
    • Press Release

  164. StJ, I'll be talking with some of these people in the fall & find out exactly how they write their English papers. If you've got a service they could use, there might be a market there. I'll keep you informed.

  165. Thanks Snow… We have a service and also a software that is cloud based and helps people collaborate on translation projects in real-time. 

    We also have a crowdsourcing solution that allows people to have large volume of text translated by volunteers. See:

    We translated a lot of the Coursera classes into Russian using that software.

  166. Watch this video at

    MH17 Crash: Here Are the Geopolitical Implications

    July 17 (Bloomberg) — Paul Floyd, a military analyst at Stratfor, discusses the crash of Malaysia Airlines flight MH17 with Mark Crumpton and Tom Keene. (Source: Bloomberg)

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

  167. Watch this video at

    Israeli Invasion of Gaza Triggers U.S. Selloff

    July 17: Babson Capital Management President Clifford Noreen, Chertoff Group CEO Chad Sweet, Bloomberg’s Michael McKee and Elliott Gotkine discuss Israeli ground operations in Gaza and the market reaction to major geopolitical events.

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

  168. From Bloomberg, Jul 17, 2014, 4:00:00 PM

    The latest sanctions imposed on
    Russia by the U.S. over Ukraine are threatening to tip the
    nation into a recession as they exacerbate a bond selloff and
    drive credit risk higher.

    To read the entire article, go to

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

  169. Great to be aboard, thanks for the info Phil!

  170. Tough to read a down day like today with so much geo-political background! 

  171. Stj:  My take is that the macro indicators are lukewarm at best and investors have gains to protect, so it wouldn't / didn't take much to convince them that the better part of valor is to take profits and cool out for awhile.  The market has been frontrunning economic growth indicators for some time; purt near anything scary [e.g Russia attacks] provides a reason to scale back and stand on the sidelines.  They'll be back; nothing has changed.  Not yet, anyway, but Phil's "Fed" admonition is worrisome [to me].

  172. Zero – No doubt, the market is way ahead of the "real" economy so any excuse to lighten up is good and today did provide that in spade! Caution is always warranted anyway, but even more so now. As we know, correction can be quick and more importantly, brutal! I have a lot of cash to deploy so I am waiting for cheaper days.

  173. With all the geo-political actions, forgot to post the earnings today and there were some good ones today:

    GOOG – Up over 1% AH. Missed on the top line but revenues beat.
    IBM – Down over 2% AH. Software sales lower than expected.
    SLB – Down over 1% AH. Profits drop 24%.
    STX – Also down over 1.5% AH. Met estimates.
    AMD – Getting killed AH, down 19%. Bad guidance.

    I guess a part of these moves might be a follow up today's action so maybe good for GOOG as it's bucking the trend. But AMD, didn't that coming…

  174. Lessons on market tops from Josh:

    inflection points

    During the prior two tops, stocks got cut in half from both absurd valuation levels (2000) and from reasonable valuation levels (2007) – so valuation levels alone are not ever going to be your tell.

    It's interesting that in the rally, we went from a 16 PE to a 25 PE only to be cut down to a more reasonable 14 PE! By 2007, we were only back to a 15 PE. The 2008 correction drove us down to ridiculously cheap 10 PE. And we stand at over 15 PE now. So we could really go both ways as Josh points out. Irrational exuberance for the next 4 years or major correction. Who can tell for sure! To take into consideration is the difference between the dividend rate (2.0%) and the 10-Year (2.5%). 

  175. From Bloomberg, Jul 18, 2014, 2:18:40 AM

    July 17 (Bloomberg) — Ukrainian rebels shot down a Malaysian jet carrying 295 people over eastern Ukraine near its border with Russia, a Ukrainian Interior Ministry official said. Peter Cook reports on “Market Makers.” (Source: Bloomberg)

    European equity futures (SPA) followed
    stocks lower in Asia (MXAP), where the cost of insuring regional debt
    jumped and government bonds rallied on rising geopolitical
    tension. Malaysian Airline System Bhd. shares dropped after one
    of its planes was shot down in Ukraine and Russian assets fell.

    To read the entire article, go to

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

  176. From Bloomberg, Jul 18, 2014, 1:45:54 AM

    Janet Yellen, chair of the U.S. Federal Reserve. The difference between five- and 30-year yields shrank to the narrowest since 2009 after Yellen told lawmakers this week that monetary stimulus is still needed, while increases in interest rates may occur sooner if the economy accelerates. Photographer: Andrew Harrer/Bloomberg

    Government bonds rallied around the
    world, with a gauge of the debt climbing to a 14-month high, as
    the shooting down of a Malaysia Airlines plane in Ukraine drove
    demand for the safest assets.

    To read the entire article, go to

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

  177. From Bloomberg, Jul 17, 2014, 7:01:00 PM

    Andrey Kostin, chief executive officer of VTB Group. Kostin warned the measures may tip the economy into recession, lead to the “disintegration” of financing and turn Russia into an outcast of global capitalism.Photographer: Andrey Rudakov/Bloomberg

    European banks, contending with
    escalating U.S. fines for sanctions violations, will likely bow
    to fresh bans imposed by the U.S. on financing Russian companies
    as the risks of dealing with the nation mount.

    To read the entire article, go to

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

  178. From Bloomberg, Jul 17, 2014, 7:00:00 PM

    A twenty-five bitcoin is arranged for a photograph in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

    Bitcoins, which lost 45 percent of their value after skyrocketing to more than $1,100 last year, are poised to tumble further, according to the latest Bloomberg Global Poll of financial professionals.

    To read the entire article, go to

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  179. From Bloomberg, Jul 17, 2014, 11:23:47 PM

    Residential apartment buildings stand illuminated at night along the Zhujiang River in Guangzhou. Some Chinese cities started to relax property curbs to stimulate the local market, while developers have cut prices since March to lure buyers. Photographer: Brent Lewin/Bloomberg

    China’s new-home prices fell in a
    record number of cities tracked by the government as developers
    cut prices to boost sales volume, signaling curbs will be
    relaxed in more cities.

    To read the entire article, go to

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

  180. From Bloomberg, Jul 17, 2014, 8:52:52 PM

    The most aggressive U.S. sanctions yet on Russia are intended to inflict pain on President Vladimir Putin’s inner circle for supporting Ukrainian separatists, while giving the Russian leader room to reverse course before the standoff escalates into economic warfare.

    To read the entire article, go to

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

  181. From Bloomberg, Jul 17, 2014, 9:26:30 PM

    March 11 (Bloomberg) — SoftBank Corp. President Masayoshi Son speaks about the quality and cost of mobile broadband service in U.S., and his intention to deliver renewed competition in wireless and landline Internet after SoftBank’s acquisition of Sprint Corp. last year.
    Son, speaking at the U.S. Chamber of Commerce in Washington, reframed his argument for consolidation in the U.S. mobile-phone market to advocate for wireless broadband as an alternative to cable. (Source: Bloomberg)

    SoftBank Corp. (9984)’s bond risk jumped on
    signs billionaire founder Masayoshi Son is readying a long fight
    to win regulatory approval for the takeover of T-Mobile US Inc.

    To read the entire article, go to

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

  182. From Bloomberg, Jul 18, 2014, 1:13:46 AM

    Passengers use self-service kiosks to check in as a sign directs family and friends of passengers onboard Malaysia Airlines Flight 17 to a holding area at Kuala Lumpur International Airport (KLIA) in Sepang, Malaysia, on Friday, July 18, 2014. A Malaysia Airlines jet was shot down over eastern Ukraine, killing all 298 people on board, in an attack that the government in Kiev blamed on pro-Russian rebels. The separatists denied the accusation. Photographer: Goh Seng Chong/Bloomberg

    Malaysian Airline System Bhd. (MAS), whose plane carrying 298 passengers was shot down over eastern Ukraine, took a route avoided by Qantas (QAN) Airways Ltd. and several other carriers as separatist fights in the region intensified.

    To read the entire article, go to

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  183. From Bloomberg, Jul 17, 2014, 11:57:35 PM

    A woman walks past a large screen showing television coverage of India’s prime minister Narendra Modi, during the Indian general election, in the lobby of the Bombay Stock Exchange (BSE) in Mumbai, on Friday, May 16, 2014. India’s S&P BSE Sensex index has surged 21 percent this year on optimism Modi’s pledges to cut red tape and attract investment will boost Asia’s third-largest economy after growth slowed to near a decade low. Photographer: Vivek Prakash/Bloomberg

    Modi mania is taking hold across global markets.

    To read the entire article, go to

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

  184. From Bloomberg, Jul 18, 2014, 1:32:10 AM

    Israeli soldiers near the Israel-Gaza Border on July 17, 2014. Photographer: Ariel Schalit/AP Photo

    Israeli soldiers and tanks moved into the Gaza Strip to stop a 10-day barrage of rockets on Israeli communities, opening a ground offensive after cease-fire efforts collapsed.

    To read the entire article, go to

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

  185. From Bloomberg, Jul 18, 2014, 12:00:35 AM

    As Beach Boys music blared from
    casino speakers and leathery tourists ambled along the
    boardwalk, vendor Mohammad Haroon sized up the prospects of New
    ’s gambling hub as its casinos begin folding.

    To read the entire article, go to

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

  186. From Bloomberg, Jul 18, 2014, 1:27:42 AM

    An employee places a Hermes Arceau watch into a showcase ahead of the opening of a luxury watch fare in London. Watches was an area of weakness with sales of the category declining 15 percent in the quarter, hurt by weaker wholesale demand in China, Hermes said. Photographer: Simon Dawson/Bloomberg

    Hermes International SCA (RMS), the maker
    of Kelly handbags, reported second-quarter sales that trailed
    estimates due to the weakness of the yen and after a Japanese
    sales tax increase weighed on growth.

    To read the entire article, go to

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

  187. From Bloomberg, Jul 18, 2014, 12:00:01 AM

    Schlumberger Ltd. (SLB)’s 11th consecutive
    quarter of beating analysts’ earnings estimates failed to
    impress investors as the largest oilfield servicer said the
    world’s economic situation will be slow to change.

    To read the entire article, go to

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

  188. From Bloomberg, Jul 17, 2014, 8:57:12 PM

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

    Foreign-exchange traders detect a
    softening in Bank of Japan Governor Haruhiko Kuroda’s stance
    toward the stronger yen.

    To read the entire article, go to

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

  189. From Bloomberg, Jul 17, 2014, 12:51:55 PM

    The U.S. housing market has turned around from the worst crisis since the 1930s after extraordinary Federal Reserve measures to revive the financial system, employment gains and purchases of thousands of houses across the country by institutional landlords. Photographer: Craig Warga/Bloomberg

    Foreclosure filings in the U.S. fell in June to levels not seen since before the housing bubble burst eight years ago, causing 5.5 million people to lose their homes.

    To read the entire article, go to

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

  190. From Bloomberg, Jul 17, 2014, 1:03:44 PM

    No end in sight.

    The market reaction to repeated sanctions against Russia has tended to follow a pattern, with investors shrugging off the news after an initial sell-off. Still, the cumulative impact of sanctions is getting harder to ignore, and — particularly given the reports of the downing of a passenger plane in Ukrainian airspace — it could yet get much worse.

    To read the entire article, go to

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

  191. IBN/ Diamond

    grt info – I am liking the story on IBN and have made pokes at the 2016 60 call option levels.   I think their valuation though expensive isn't priced for 2 things

    1  the appreciation of the Rupee

    2 the super growth in profits due to lower provisioning going forward and huge uptick in credit due to stable Govt.

    Than su

  192. Good morning!

    We're actually up this morning a little bit.  One wonders what it does take to spook thins market.

    /TF just crossing over 1,130 and that's the best long with tight stops below that line.  If the markets are going to decide to run back up into expirations – the RUT has a long way to catch up now.  

    From 1,170 to 1,125 is 45 so weak bounce of 9 to 1,134 is the least we'd expect but not much reason to think we can't see 1,143 if they get moving higher. 

    Oil hit $103.94 at the top and back to $103.60 already and I'll like them short (/CLQ4) below $103.50 but watch the Sep contract (/CLU4) to fail $102.50 to confirm (now $102.60).  TOS has already rolled the contracts, the media will probably do so on Monday so it's a bit confusing at the moment. 

  193. SPY 5 MINUTE











  194. Phil / Russia

    Good morning, perhaps is a good moment for a call in OGZPY, what you think?.

  195. OGZPY/Advill – Not this week!  They've been declining for more reasons than just yesterday and those sanctions are like a noose around their necks.  I think you may see a drop all the way back to $6.50 before they begin to turn (not that I'd short them) and, of course, I wouldn't touch them with a 10-foot pole at the best of times since they are a very thinly traded ADR of a company we don't have ready access to news for.  

  196. Oil breaking down nicely but RUT can't get anything going. 

  197. Blackstone reports great earnings.  Even though it's at a high so is M&A.  I might take a poke.  BX

  198. Danaher Corp. reported solid Q2 earnings.