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Friday Futures Fakery – Do you REALLY think a downed airline doesn’t matter?

Can we possibly be this jaded? 

Even on Wall Street, where ruining the lives of the middle class is a sporting event, you would think that the tragic death of 298 people being shot down in an airplane would AT LEAST cause the markets to pause for more than a few hours.  That's not what the Futures would have you believe – they are moving up this morning (7:30) as if shooting planes out of the sky isn't a reason not to trade stocks at their all-time highs

While our long trade ideas from yesterday's morning post worked out fantastically, we were very fortunately NOT GREEDY at 10:03, when I said to our Members:

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!  

SPY 5 MINUTEAs you can see from Dave Fry's SPY chart, our timing was near perfect as things turned sour very quickly.  That then worked out well for our oil shorts, which went from the $103 conviction target I laid out in the morning post (subscribe here to get them pre-market every day) back below $102, where I said to our Members at 11:34:

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

That was a very quick $1,000 PER CONTRACT profit on /CL and, right after that, we got the plane crash news so we increased our hedges in our Short-Term Portfolio and we added BA July $128 puts at $1.25 (because it was a BA plane involved in the incident) and they finished the day at $2.18 (up 74%) as well as DAL Aug $37 puts at $1.50, which were already $1.92 by the day's end (up 28%).  I don't like to take advantage of tragedies like that – but it was the fastest way to add good protection to our portfolios.  

YUM had a bit of a tragedy yesterday and the net 0.30 bearish trade we featured for you in yesterday's morning post (from our live Member Chat at 1:57 on Wednesday) hit $1.75 during the session and we were able to cash in with a 683%, one-day gain!  I'm a lot happier with that one (and our LVS and EBAY plays, which were also winners) than I am about BA and DAL, but it's our JOB to use the news to our advantage – even when it is tragic.  

Those USO Aug $39 puts we picked yesterday morning (and these are just the FREE ideas!) finished the day at $1.44, despite oil jumping up over $103, so we're very happy with those and will be looking forward to things calming down a bit in the near futures.  It's not just airline attacks, we also had Israel moving into the Gaza yesterday and, even though neither one of them have any oil – anything in the middle east is an excuse to pump oil up into the weekend so they can rape you at the pumps. 

We took a long poke at the Russell Futures (/TF) this morning but all nickels and dimes so far, which means the morning "bounce" is weak and we're more likely to go down than up – but it's a very tricky call with today being July Options Expriations.  

Still, I certainly wouldn't go into this weekend without some serious hedges!  We'll discuss some more of those strategies in today's Member Chat.  

Have a great weekend,

- Phil


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  1. Oil Lines (September contract)

    R3 – 106.58
    R2 – 105.24
    R1 – 103.95
    PP – 102.61
    S1 – 101.32
    S2 – 99.98
    S3 – 98.69

  2. FU /CL!! There, that feels a little better after the beat down I got yesterday…

  3. “Even on Wall Street, where ruining the lives of the middle class is a sporting event, you would think that the tragic death of 298 people being shot down in an airplane would AT LEAST cause the markets to pause for more than a few hours.”

    That statement is ridiculous and possibly hypocritical.

  4. That's one of the problems with Chinese stocks.  You can't believe the numbers.

  5. Albo re: NQ, I remember I had been considering to play that one, really glad I didn't.  Yikes!

  6. Pwright72 – Yeah, I remember seeing it recommended when it was in the teens.

  7. Phil,

    Would you consider YUM 2016 65P for an initial entry, say 5 contracts…..or are you waiting for a bigger pull back. Thanks

  8. Good morning Phil, wanted to see if you had an opinion on MXWL, this is a producer of ultracapacitors out of San Diego.  I have been reading that the technology for capacitors may be improving enough to rival lithium-ion batteries for automotive use; Toyota has been using capacitors in some test models to improve power performance, MXWL has been selling capacitors for bus and rail applications in China.  So maybe this can be a rival technology (or a complementary one) for something like TSLA or the new electric BMW? 

    I'll probably sit out at least for the moment in the current environment, but had put it on my watchlist, let me know if you have an opinion about it.  (Also I know there are some engineers out there, let me know if you have an opinion about the potential of capacitors relative to lithium-ion batteries?)

    Thanks in advance..

  9. Good morning!  

    My Russian ancestry (we got out before the revolution):

    Bottom row is my Uncles Henry & Ralph and my Grandma Dinah.  Lady on the left is my great-great Grandmother, who's other boy was Mischa Elman (my great grand-uncle).  

    Hypocritical/Diamond – Hey, that's how I feel about it.  They used to close the markets or at least stop trading when there was a tragedy like this.  They didn't even stop trading BA…

    China/Albo – I say it all the time, you can't trust those guys.   Muddy waters made a nice call on them recently.  

    That company has shed a couple of Billion of BS market cap (80%) this year.  Imagine how many other tens of Billions are yet to be discovered as China unwinds.

    YUM/Jasu – I'm no fan of them.  We played them bullish last year when they spiked down to $63 and got out $10 later at about $75 and that's the last time we bothered with them.  If they get back down to $65, then maybe but, even at $77, the p/e is 30 and they are already all over China and India so what planets will they be expanding to next?  There is a finite amount of growth for companies like this and these p/es are kind of silly when it's going to take 30 years for YUM to pay back your $77 per share (3% rate of return).  Why do people want to give money to stocks like that?  

    MXWL/Pwright – They're very tiny but interesting.  They rely heavily on just a few customers (including CHINA!!!) and that leads to a lot of speculation.  No doubt the potential is there but I don't see any huge barriers to competition – they just happen to be in a small enough niche that they are able to push their capacitors without much blowback on pricing.  As things scale up, I'm not so sure it will be easy for them to keep these margins.  Still, no debt is good, growth is good, so not bad for a flier.  You can buy them for $12.62 and sell the Dec $10 calls for $3.80 and the Dec $12.50 puts for $1.80 for net $7.02/9.76 and that's pretty reasonable for a first entry.  If they are still over $12.50 in Dec, you get $2.98 (+42%) as a consolation prize when you are called away and, if under $12.50 but over $10, you'll end up with 1x at net $9.76.  Only under $10 will you end up with 2x at $9.76.

    AAPL/Diamond – Also possibly because there's a lot of pressure in Silicon Valley to put more women on boards.  

  10. Phil / CZR – As part of the butterfly, I sold the Sept 16 call for 2.01 (before yesterday's jump) but looking to add a Sept put still. Any recommendations?

  11. Phil / Tight Stops on /TF

    So I paper traded the /TF call today using a trailing stop.  I bought /TF at 1131.20 with a hidden trailing stop of 1129.50 which triggered.  It then went down to about 1129.15 (which is good for my stop).  Then I walked away to do other stuff and now I see that it's all the way back up to 1132.  

    I'm still perplexed how to stop out and re-enter these futures trades properly.  I read you're morning commments about the futures trading, and it seems so easy.  But in reality, I can't achieve the profit numbers you pick out, since you might hang in there longer.

    Anyway, how do you determine what a tight stop is?  Should I have done a re-entry over 1130 and ride to 1132-1134?  

  12. Good Morning!

  13. Phil

    good morning


    are we close enough to bottom?

    start with selling $300 puts?

  14. "ridiculous and possibly hypocritical"


    Seriously?  If you do not have a cynical view of the market, then more than likely, you are losing money…..

  15. Phil thanks re: MXWL

  16. Burr – I am sure Phil can answer this better, but it often feels like "they" are looking at what little old you and me are doing and move the prices to have us react emotionally! Sounds paranoid, but I do believe "they" can do it and that they do. So if you enter a stop loss order, it will go to where it needs to in order to trigger your order, causing you to lose, before moving up or down where you would make money. I never enter stop orders, but rather sit with an order ready to enter if we get there. I never chase because I think if they see that behavior they will start to bait you to do just that. This requires us to sit at our computers and be nimble and ready to enter orders quickly. I may be paranoid, but it has been working, except when a plane gets shot down and Israel invades Gaza in the same hour to drive prices where even "they" can't manipulate away. So, even if this is ridiculous, best to play as if it could be true and you won't get stopped unless you decide you are ready.

  17. Phil

    did you roll the FAST july calls  ?


  18. CZR/Pfehl – Well, since you already sold the Sept $16 calls for $2, you may as well sell the $16 puts for $1 as it's not worth the risk of selling the $17.50 puts for .60 more.  If CZR gets over $17.50, you can always roll to Dec $17.50s (now $2.05) for about even.  

    Futures/Burr – I'll concentrate on Futures on Tuesday's Webcast and maybe, now that Greg is setting it up, we can do one after hours, when nothing else is going on.  The big mistake you made is your entry didn't have a good backstop and your stop was too wide.  We knew 1,134 would be resistance (weak bounce) so rejected below that was a bad sign (and I noted as much at 7:42), saying: "Oil breaking down nicely but RUT can't get anything going. "

    A tight stop is a stop right below your support line.  If the support line doesn't hold, then your premise is blown.  Of course you also have to differentiate between a spike and an actual move and, for the sake of simplicity, you look for the 2nd candle forming BELOW the body of the previous candle (usually on the 5 or 10-min chart).  And yes, you should re-enter – that's the whole point, but you have to take smaller losses because $200 is considered a very nice gain – that means you want to keep your losses at $100 or less.  

    And, as Craigs notes, hard stops are death in the Futures – "THEY" are just way too good at hunting them down and triggering them. 

    ISRG/Maya – Sure, next week.  We could wake up Monday down 2.5% in the markets and ISRG would not be likely to go against the grain.  

    You're welcome Pwright.  

    FAS/QC – Needs to be done today for sure.  I'll get to our STP and LTP shortly.  

  19. Rj_jarboe's mention of XCO yesterday caused me to look at it again.  It is now back at the level, ($5), where Wilbur Ross and Prem Watsa backed up the truck to buy every share they could in January.  Together they own ~26% of the stock with cost bases significantly higher than current market price.  Even tho I'm already short a slug of Jan 16 $3 puts, I added to my position:

    Bought the stock, sold the Jan 16 $5 calls & puts.  46% return in 18 mos. if the stock is above $5. The company has improving fundamentals and pays ~4% dividend, at least for now.

    Could be a quicker return if Ross and Watsa decide to take the company private.

  20. That would be TASR

  21. I think the market sells off by EOD.  Too much nervousness going into the weekend.

  22. 1020 – Wow … leap to stupid conclusions much?

  23. Tight Stops/Phil

    TOS has an incredible number of analytical tools available and I am not a TA guy, so for the sake of simplicity in the screenshot above with Burrben, what are you using for your support/resistance lines?  I've noticed that you use these on all of your screens during the webinars but have never asked how to set them up on my own platform.

  24. To think I was beginning to worry about my short ZHNE puts…

  25. July Reuters/UofM Consumer Sentiment

    09:55 AM ET

  26. Phil, re: SWI, do you have an opinion about them ahead of earnings next Thursday?  I have a position there, wondering if I should lighten up or ride it out, given overall weakness..


  27. craigsa

    You are absolutely correct and not paranoid. I have watching the moves for years. One big problem is people believe the HFTs only hit large patterns but it is not true they hit everything that their speed can beat. Tests are not 100 shares, most are a series of one share trades. Just remember when 70 to 90% of volume is HFT, the rest except the brave few here are big institution and the .0001%. They play for pennies! No stops ever.

  28. why is AAPL lagging?

  29. War in Gaza, commercial airliner shot down, tighter restrictions on Russia that could have an effect here and definitely in Europe, now I see why we are rallying.

  30. Rj – Nice move on ZHNE indeed.

  31. Phil or anyone

    My trading/investing account is through optionsxpress.  I know Phil uses TOS and have picked up that many others on the board do to.  Would you recommend I switch, I'm getting the feeling that it would be a good move but just wanted to see if anyone had thoughts/comments about this.


  32. Rustle123 – So true.  As you know, the market doesn't care, until it does.

  33. Phil / Craig

    Well first off, this was on a papertrading system, so my order wasn't live on the market.  It was just triggering on the price of the real market.  But I can't debate whether "THEY" can see hidden stops, I have no idea.

    Anyway, I though my stop was appropriate.  I missed getting in at 1130, so I took a chance on the missed gain and bought in 1131.20.  I figured it was a good R/R if we ran to 1134 or 1145.  1130 was my "backstop" and my stop was only 0.50 below that line.  I thought a pretty good system of points of reference.

      The REALLY hard part about this is letting the trade work and not stopping myself out.  For example, Phil could write tomorrow that he called a buy at 1130 and now we are at 1137 for a $700 gain.  BUT the tricky part is riding out the bumps and the moves below 1130 and holding on until you get 1137 or more.  

    Just trying to learn on a Friday.  

    I did go long at 1134 since Phil thinks it could go to 1145, and I'm up now $300.  I need to learn that it's not a one shot and out.  

  34. jeffdoc

    Absolutely move today. There are only 2 brokers to choose from TOS has a better platform more problems and E-trade has better execution and charts. The rest are HFT sell outs, the lower the costs the more you a sucker.

  35. rustle:

    Don't forget that crappy Consumer Sentiment number!  July option EXP. pump job for now, but I bet it sells off at the EOD and maybe next week.

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

  37. Digging through the Philly Fed numbers:

    As shown, seven of the nine subcomponents increased this month, led higher by Shipments and New Orders.  On the downside, the only two components that saw a decline were Unfilled Orders (9.1) and Prices Paid (-0.3), which should provide a small sense of relief to investors concerned about inflation.  With regards to employment, while they didn't see the largest increases, both the Number of Employees and Average Workweek saw increases this month.  This was in contrast to the Empire Manufacturing report which actually showed a decline in the Number of Employees while the Average Workweek increased.

  38. diamond – Don't confuse observations with conclusions….


    Have a good day.  :) 

  39. 1020 – You are not worthy of my time, so I have just put you on ignore.

  40. whatever…..

  41. FWIW

    Next week at least until the RUT gets a bounce I don't see a sell off. Business in most of the land mass area is close to dead and we need some more negative earnings to trigger selling. Aluminum demand is up to lower vehicle weight and the banks took there expected hits by fines. The devil is in consumer spending and wall street still thinks they are holding back instead of tapped out. Health care is mixed and could effect GDP again. 

  42. Ignore

    An angry response that is never good. Phil says read what you disagree with and everyone adds good information some of the time. Better to skip over some at times or you are sure to miss the jewels that make money.

  43. Ignore – Some folks just need to include a bit of fiber to their diet…… :)

  44. ZHNE

    Can still buy the stock and sell the Jan 15 2.5 call for a 26% return YE…if ZHNE holds 2.5 If not you are in at 1.98.

  45. DIAMOND AND 1020


  46. XCO/Albo – Nice 3.4% dividend makes them worth owning long-term.  $5 is a good entry and you can sell 2016 $5 calls for $1.05 and $5 puts for $1.25 to net in for $2.70/3.35, which makes the .20 dividend 7.4% while you wait to see if you'll get called away with another 85% gain at $5.  That's so good we should pick up $13,500 worth (5,000 shares) for the Income Portfolio.  

    TASR/Cdt –  A hold rating is progress!  

    RUT just topped 1,140 with strong bounce at 1,143 (/YM) so good place to start looking for a short entry on /TF – when it turns back down 

    Support/Kech – Those are TOS-standard Pivot Points.  It's right on the "Studies" menu under Trends.  Happens to be the only thing I find useful for a quick look at likely turns (and 1,140.50 is currently R1 on /TF!)

    SWI/Pwright – IBM's weak report makes me worry about this sector.  They've got a 35 p/e, so no room for error and they're kind of more in the middle of their long-term trading range ($35-45) so, if you are interested, I'd be more inclined to just hope they miss and you get a chance to take a poke at $35, which will save you about 15%, than get in now and cross your fingers. 

    AAPL/Abhish – $94 is A LOT for AAPL ($658 pre-split), it shouldn't be easy for them to pop over $100 ($700), which is almost $600Bn in market cap.  They'll have to show that they are clearly over $6 a share in annual earnings next week for people to get enthusiastic about them at this level.  Don't forget they popped on the IBM deal – that wasn't a good reason to gain 5% ($30Bn in cap).

    It's easy to lose perspective when we talk about so many stocks but $30Bn (5% of AAPL) is 1.5x SNDK or 1x GLW or 15x GTAT or 1x TSLA… Do you really think AAPL should gain or lose the value of TSLA in a week?  "GM" is only $60Bn and has plants all over the world and 200,000 employees – what would it take for them to gain or lose half?  Yet we don't blink an eye when AAPL goes up and down $30Bn?  That is the kind of market silliness we take advantage of by simply being more rational investors.  

    Rallying/Rustle – I'd say getting back to those Option Expiration Day pins is the only reason we're rallying.  

    Options Express/Jeff – I got out of them and the difference between them and TOS is like night and day.  Not just the platform but the execution is way better and the options specialists at TOS actually do know what they are talking about.  

    Oops, there's 1,143 on /TF – that's a good short with a stop over 1,145.  Watch /ES 1,965 not to break to confirm and Dow (/YM) 17,000 – both of which can also be shorted as laggards.  

  47. shadowfax – His statement was an “if … then …” conclusion which he then labeled as making an “observation.” WTF??? 

    His flawed reasoning is even more troubling since he essentially knows nothing about me and somehow erroneously concludes (for the second time in less than two years) that I must be losing money? I am sorry shadowfax, he does not matter to me, and I cannot waste any more of my time with him.

  48. Stops/Burr – In Vegas a couple of years ago, I showed how your stops get chased on futures orders.  For a fact they chase down individual stocks.  Not only that, but when you place an order and you see the price jump away from you – that's all manipulated for your benefit as well as 90% of the bids and asks you see are also fake.  

    Notice I've been waiting PATIENTLY to make a short call on the Futures.  With the Dow testing 17,000 AND the S&P testing 1,165 at the same time as /TF hit our strong bounce line at 1,143, that became a good time to jump in.  It took all morning to get here and maybe we would have fallen short (in which case I was setting up a fallback of going with /TF as they cross back below 1,140) or maybe they would have popped and there would be no play but that's what you have to do to be successful.  It's like fishing – PATIENCE is everything. 

    As to the bumps, if you focus on the chart and have no conviction on the trade, then you are going to get stopped out a lot.  That's another reason I prefer to wait for a move against my macro view to get stretched (like $103 on /CLQ4), because I'm going to be more inclined to ride out a move against me and I'm usually willing to scale in and ride out something like war breaking out if it spikes too fast for me to exit.  Because I have the conviction to hold the long-term short.  

    So at 1,142.50 on /TF, the Dow just crossed 17,000 so the short trade is dead (+$50) and we wait for the next good set-up.   ALL of the stars have to line up to make a Futures play – as soon as you get in, you should be looking for the exit.    Now we'd short the Dow if they fail 17,000 as long as the RUT is still below 1,143 and /ES is below 1,165 and so it goes…

  49. phil, if you have a chance could you please comment on continuing to hold these positions we picked up

    xom 100 puts (protection?)

    uso 39 puts (bet)

    qqq 96 puts (bet)

    the qqq might be protection only if we have conviction that aapl goes > 100.  thanks.

  50. angelcur – LOL!!!

  51. MXML

    Electrical Engineer here (from San Diego!).  I did some analysis on them a few weeks ago on the board here when somebody brought them up.  The energy storage to weight ratio isn't even in the realm of replacing Li for EV purposes.  Eventually, if we can get some miracle dielectric we could consider caps for energy storage but they lose far too much energy to leakage and we just can't put enough voltage on them to cover our needs.

  52. xom puts were looking promising till it bounced off the 50dma.

  53. No fighting/Angel – I'll send my girls up for a weekend, see if that works on them.  blush

    Puts/Lunar – I like them all over the weekend but I certainly hope you have longs you are offsetting and it's not just a big, bearish bet.  I do think oil should be lower so I like those trades but, if you are nervous on USO, why didn't you take the quick profits yesterday?  The Aug $39 puts are still $1.44, even after all the nonsense and XOM Aug $100 puts are $1.03, also about where we bought them.  They weren't day trades and it's the same week we bought them but, if you don't have conviction or are worried about them, why not lighten up while they are still even?

    MXML/Jph – I think it's about trucks and buses, not for passenger cars.  Just a niche. 

  54. phil – general question for you about rolling option position — you wouldn't wait longer than when the value of the long call falls below the initial bull call spread?  am i understanding this correctly?


  56. If the market keeps these gains, this is more than an options pin day.  This is, we'll teach you if you want to short this market, bots are in control day.

  57. It has that feeling Rustle

  58. Well Phil, I'll hand it to you.  That /TF call was brilliant.  I made 750 paper bucks…. wish they were real bucks.  But 7hrs added in education

  59. MXML

    The target system is irrelevant on this case.  If you have a 5000lb car, you require (for argument's sake) 500lb of batteries.  You still wouldn't dream of replacing that 500lb of batteries with 5000lb of capacitors.

    A 30000lb bus is still going to require 3000lb of batteries.  You still can't replace it with 30000lb of capacitors!

    Anyway, I can't remember the math I did, but I recall coming up with over 15000lbs of these ultra capacitors (which have awful leakage) to replace the batteries in a tesla.  



  61. JPH re: MXWL, thanks for your comments.  The reason I had got interested in them was from an article in the Economist this week,

    It's a subscription site so not sure if the link will work, but I guess the upshot is they seem to feel with new materials, can get about 30-40% of the energy density in a Li battery.  So seem to feel that supercapacitors can increase to about 10% of Li battery sales within the next decade.  (Also MXWL makes materials to protect microelectronics from radiation in space, which is pretty cool).  I could copy and paste the whole thing on here, but hate to do that to Phil :)

    Looking back at MMWL over the years, though, they've been around and doing this for a long time, would really have to believe this story in order to bet on rapid growth in the stock.  I might have interest tho at about $8-10..

  62. Phil

    woukd you consider adding any TZA's now that the RUT has bounced nicely? Or would you wait to see how this move follows through next week? 

  63. ~~JPH1121
    July 18th, 2014 at 11:45 am

    Because I spoke about caps and designed for busses the use is not to replace batteries in all electric. Actually without something completely new I don't see a real future more than short distance. Caps could be excellent in a hybrid vehicle where less storage is needed but fast charge and discharge would benefit and long term storage isn't an issue. Lighter weight couldn't hurt in that application.

  64. ~~pwright72

    I tend to agree with your statement, super caps have many uses but battery replacement isn't one of them. I see them in electronics all the time. I had some large regular storage caps used for a temp power supply and found out the hard way they still had a punch 3 months later.

  65. IBN happy at +5%.

  66. diamond

    I understand as I have been insulted many more than 2 times, even today I find a couple people aggravating but I have never ignored anyone even knowing I have been ignored. Sometimes I just think how arrogant and stupid. I skip a gazillion comments on trade ideas because I can't play them and most come from Phil. I could comment on them but extremely rarely do, my comments are mostly warning of how I see the company in a very different light and hope it spurs second thoughts.

  67. /CL/Phil

    With the August contract only tradable until Monday (at least on TOS, which makes you get out one day before expiration), at what point would you start trading the September contract instead?  Also, with a full $1 price difference in August vs. Sept., is it better to play Sept. long at some point until the gap fills before shorting September?  I've seen other members discuss this strategy before but can't recall the timing of when to do it.

  68. kechitodd

    Phil will have more but you can be sure the dollar cheaper indicates oil price weakness, meaning long should be with extreme caution, prices usually drop by Wednesday. 

  69. shadowfax – What have you been trading? Do you see any good trade setups?

  70. pwright/shadowfax re:caps

    The problem is that there are a number of ways to measure density.  You can measure in terms of energy/weight, energy/volume, energy/dollar.  In effect, stating energy density is a very incomplete picture and for purposes of a vehicle, all of those measures are important.  

    Ideally, you would want to have a system where you have multi-stage regulation which isolates the batteries from moderate changes in power consumption.  You will get FAR longer life out of Li battery if you keep power surges low and maintain full charge as your (statistical) mode state.  Capacitors (and ultra/super caps) would be great for use in your city driving when you are doing small charge and discharge cycles but the longevity is seriously compromised in an electric only system when you are required to ALWAYS dip into your batteries.

    Anyway, somebody should import me to LV for the conference later this year and I'll go on for days about electric vehicle transportation.  God knows I can't afford it though.  Stupid student loans :( .

  71. PHIL/XCO

    I am not clear whether you are saying to sell the options now, or to also buy the stock.

  72. shadowfax – I went long IWM when it bounced off of the 200dma this morning, and so far it is working out. I hope you played it for a bounce off of that line.

  73. Short-Term Portfolio Update:  Losing money on an up day is what it's supposed to do!  Still, it's up 10% since last month so good progress.  

    • GMCR – Waiting on earnings (8/14).  My main theory is that the very profitable machine sales slow down and all these partnerships that the stock price keeps celebrating are, in fact, a drain on their profits – since they have to split it with their new partners.  There's nothing wrong with the business model – it's the 39 p/e that's unrealistic because the model won't give them the kind of growth to justify it.  
    • CI – On track
    • NTAP – On track 
    • RIG – On track
    • YHOO – This is an AliBaba play.  We expect a $200Bn value which gives Yahoo, which is now valued at $33Bn, $50Bn worth of AliBaba stock.  Even if you throw Yahoo in the trash, that's still $50 a share.
    • XRT – On track and nice for a new entry as it's not at all reflected in the spread price yet.  
    • CAKE – On track
    • CMG – 100% and $100 in the money yet showing just net $24,400 out of $30,000 on the Sept spread.  That's 6% of our portfolio right there we have coming. 
    • DXD –  July $28 calls will expire worthless, leaving us much more bearish over the weekend.  
    • FAS – Small loss on the short July $95 calls ($1.30) is no pressure.  Our longs, meanwhile, are in great shape so we want to protect those and sell the Aug $100s for $4.40 as a replacement.  
    • FB – I can't imagine why those short puts say .70, that's just silly.  They will expire worthless and we can sell the Sept $62.50 puts for $2.15 so let's do that with 3 and pick up $645 more.  
    • FSLR – This was a credit spread and we won and there's no reason to press our luck so we'll just shut it down
    • NFLX – On track.  Short puts will expire worthless, not sure if I want to sell more at the moment. 
    • SCO – On track
    • SLW – In the money now, on track
    • TSLA – Waiting on earnings
    • TZA – On track
    • WYNN – A bit low but on track. 

  74. XCO/ztennis:

    this is a fairly common strategy around here known as a buy-write; it's buy the stock and sell the Jan16 5 straddle.  Known in other circles as a covered straddle strategy.

    Well descibed in  "How to buy a stock for 20% off" although I can't pull up the link right now.

    Hope this helps 

  75. Phil/GTAT:

    Get a load of this useless article on SA. Incredible the crap they put on SA.


  76. XCO/Phil – Aside from the stock trading close to its 52 week low what makes you choose this E&P company over others?  I note that they are heavily into shale plays which is good and bad, their profit and EPS has been all over the place, probably because their expenses can rise/fall rapidly depending on their completion costs.  They appear to be on the shale production-decline treadmill requiring a steady stream of new targets to keep the revenue flowing.   Its a tough business, that.

  77. JBUR

    Thank you for your comments.

  78. diamond IWM

    Wish I could but I can't day trade. Yesterday afternoon I sold a few QQQ puts but wasn't allowed to buy enough IWM calls to make more than money for the broker. Like JPH drowning in debt but different from him I put every penny into ending it. Trading under pressure is a sure way to ruin and I don't have any means of working it off over years. The numbers would not be believable to anyone else here.

  79. Phil; Don't you need to address the WYNN 210P that expire today?

  80. AAPL – Half out (5 contracts) of the Jan14 C94 (bought yesterday) and letting 2nd half ride …

    Bought 10 at $0.18; sold 5 at $0.50 :-)

  81. ztennis:

    Ah, found the link. Read it carefully and repeatedly to let it settle into the grey matter. Good hunting.

  82. diamond

    That trade sounds like some of mine except I would be out @ $.50. Today I am considering USO $37.50 puts, Jul 25. Waiting for a rise in USO first.$38.20 would be perfect but unlikely.

  83. Will last Tuesdays webcast link be available by tonight.?

  84. shadowfax – Yeah, cashing out 100% might be the more prudent move, but I think AAPL may still move up today with people chasing it into the close, fearing a gap-up open on Monday (because of earnings after the bell Tuesday). To me it is at least worth the risk …

  85. Wow, market flew up while I was reviewing!  Oil still behaving, at least.  VIX right back to 12, TLT 114.33.

    Notice how we're jammed right back to the same levels the Futures jammed us to on Weds am on all 5 indexes.  What a joke!   SPY volume 66M so far – half of yesterday's selling volume.

    Rolling/Toe – As a rule of thumb, unless you think the move is wrong and will reverse, you do want to try to salvage your long position before it falls below the net of the spread.  

    BRILLIANT!/Burr – Thanks.  Glad it's helping.  

    Now we have a chance to short /TF at 1,150 with /YM at 17,025 and /ES at 1,970 and /NQ at 3,920.  Same as before, tight stops, look for confirmation but hopefully we catch a nice rejection.  

    DMZs/Angel – Yep, we have those.  

    TZA/Jeff – We have them in the STP (see above) but, as new ones, I like the Oct $14/18 bull call spread at $1.30, selling the $14 puts at .90 for net .10 on the $4 spread that's $1.35 in the money.  A 10% drop in TZA would be a 3% pop in the RUT to 1,184, so that's the bet.  Of course, if you want to be less bearish – you can go tot he Buy List and sell some puts there instead.  

    IBN/Chech – Flying today, nice call. 

    /CL/Kech – Oh I wouldn't hold any over the weekend and likely by Monday we'll be done talking about the Augs. No to playing Sept long – they don't tend to catch up but $1 spread is huge – I'm betting Aug comes down.  

    XCO/Zten – That's a buy/write – buy the stock, write the options, all now.  

    And what Jbur said.  

    GTAT/DC – That guy must be a very unhappy shorter.  

    I do like GTAT down here.  You can sell the 2016 $12 puts for $3.20 and that's net $8.80, 40% off!   TOS says the margin for selling 10 of them is just $1,200, so the return on margin is +183% if GTAT holds $12.  Let's put 10 of those in the Income Portfolio!  

    XCO/Sibe – The very favorable option pricing is what I like about them.  Check other ones you like and see if you can come up with a similar combo.  Yes it's a tough business, but that's why you can buy them for $1.3Bn, even though they have 1.3Tcf of proven reserves with Nat gas at $3.96 per million so $3.96Bn worth of proven reserves.  The company has been around since 1955 and, for the last 10 years, $5 has been a solid floor.  So, a decent company with great options makes them a buy.  

    WYNN/Options – Oh, silly me, yes thanks.  We need to roll those WYNN July $210 puts ($9) in the STP to the Aug $205 puts ($9) for about even

    AAPL/Diamond – Not bad for a day's work!  

    Webcast/Tommy – The replay link is here

  86. Looking for some wisdom from somebody more experienced.  I think oil is coming down.

    I have long Oct $25 SCO calls at $1.5 worth $1.925 and short Oct $28 SCO calls at $0.65 worth $0.80.

    I'm considering either buying back the short calls to point more bearish on oil expecting to re-cover the longs after oil has dipped under $102 again OR I can buy Aug $39 Puts at $1.49.

    Or I can just leave the position alone and be patient…

  87. shadowfax – Please keep an eye on the 200dma for IWM. I think IWM will revisit it soon and (depending on the action) will then be a tradable short or long.

  88. Carl Icahn bought more AAPL. He knows an apple a day keeps doctor away lol

  89. JPH

    Oil is one of my things and I think it is going down next week. I won't comment on SCO spread. I don't do SCO because it is thinly traded. That means you should plan on holding until expiration when entering, if it really goes your way then out but rolling around may turn anything into a loss.

  90. Another 2 cents on XCO.  Howard Marks of Oaktree Capital, no dummy himself, owns over 16% of the stock.  Also Steven Cohen and Jim Simons also bought stock this year at prices above where it is now.

    With these holdings, it would be easy to take the company private.

    We may not make money, but we're in there with some pretty smart folks.

  91. These guys are such crooks! They are truly stealing from subscribers who pay a ton of money for broadband and then lie to them by blaming someone else when they are the ones responsible and probably on purpose:

    As you can see in the video, Nederkoorn connected to VyprVPN and got a 3Mbps stream, which is what Netflix recommends for standard definition video. This is "about 10x the speed I was getting connecting directly via Verizon," he wrote. The video also started up faster on the VPN than it did without.

    "It seems absurd to me that adding another hop via a VPN actually improves streaming speed," he wrote. "Clearly it’s not Netflix that doesn’t have the capacity. It seems that Verizon are deliberately dragging their feet and failing to provide service that people have paid for. Verizon, tonight you made an enemy, and doing my own tests have proven (at least to me) that you’re in the wrong here."

  92. And more on Verizon (although Comcast is in the same bag):

    But that brings us to the ISP's next argument: Why have Netflix as a peer when you can have them as a paying customer? Verizon argues that because Netflix is sending such a greater traffic flow into Verizon's pipes than Netflix gets back, a peering partnership would be unfair. (Of course, that "unfairness" is why Netflix offers the cache appliances in the first place—to unload strain from the ISP's network.) Instead, Verizon is choosing to charge twice for the same service. Its customers have already paid for Verizon to bring them the data they request, and now Verizon wants to go ahead and charge the people (in this case, Netflix) answering those requests, too.

  93. diamond yesterday was on support but today is not up to resistance. I have confluence at 113 and 114.35. 116.4 may be early next week and options loose to much on weekends. I am more positive that oil will fall very soon, actually not at the day's high confirms something.

  94. The war on children continues:

    We really do have two Americas.  It's hard to even imagine these people exist in our country.  That's the problem really, us Northeasterners don't take this stuff seriously enough as it seems almost comical, but it's not – people are actually out there, working hard, to do the exact opposite of what this country is supposed to be about.  



    SCO/JPH – Into a weekend, I certainly default to "leave it alone".  

    VZ/StJ – Are you stuck with those guys?  We just had 2 guys from Comcast at our house making sure all of our TVs and Web connects (11 of them) were running at max capacity.  Tina had just called about 1 TV acting flaky but they said it's been several years since they gave us a tune up.  

  95. SUNE – just getting hammered today after doing a successful spin-off, quizzical..

  96. Virtual Short Strangle Portfolio,

    Looks like the July expired OTM.  For August, let's sell conservatively:

    - Sell 20 RUT Aug 1020 puts for $1.825, Buy 20 RUT Aug 990 puts for $1.075

  97. shadowfax – IWM … Keep it simple: If (when?) IWM revisits the 200dma and breaks it, then play it short for a trade. However, if it retests the 200dma and bounces, then play it long. The 200 is very important for IWM and is a very tradable line … IF you also use the 200dma as a stop when IWM crosses it against you!

  98. For SPX, we can do back ratios:

    - Buy 5 SPX Aug 1760 puts for $1.55, sell 10 SPX Aug 1750 puts for $1.45

  99. Long-Term Portfolio Update:  Down 0.5% for the month.  Keep in mind it pairs with the STP and the STP gained $10,000 while the LTP lost just $2,300 in total value so the pair is working just as it should.

    • CCJ – Brand new
    • ABX – Brand new. 
    • BBBY – New
    • EGLE – Still a good entry
    • HOV – Still a good entry
    • IBM – On track
    • SGEN – Still a good entry.
    • CIM – Still a good entry, paid $270 dividend on 6/26 (not reflected yet)
    • NLY – Still a good entry, paid $300 dividend on 6/27 (not reflected yet)
    • AAPL – Still a good entry
    • CLF – Still a good entry. 
    • LULU – Still a good entry. 
    • SPLS – Brand new
    • TASR – Still a good entry.

    Man I love this portfolio!  We made zero adjustments last month two and only added 3 new positions since.  That's the way our long-term investing should be – and we still have more cash than we started with!  

    This should be a busy month as we hunt for earnings bargains post earnings – especially stocks that are on our Buy List as well as ones from the old Long-Term Portfolio.  

  100. Phil

    The MP skit reminds me of a former member that tried to relate to me, slept in a jail in WY by grace of the local sheriff. Your response was you spend more topping tanks on your ocean cruiser. I do believe the nation will wake up to the injustice but most of the country doesn't even see the wealth. Here all I see is jets big enough for a party coming in and out of Driggs airport but never seen their houses. They never land in Jackson, only commercial, here a better longer runway all to them, 6 to 8 every day, sometime more. The fuel use exceeds all the gas stations put together.

  101. By the way guys, keep in mind that when we're on track in the LTP for a 20% annual gain, it means we're on track to close out the decade with $1.6M and, in Jan 2030, that will be $12M from our $500,000 start.  That's our goal – to demonstrate, over a LONG time, how this system actually works.  

  102. Checking in ….almost sorry I did, distressing snark-fest.  "Ignore…" — sounds like elementary school.  Must be the heat.  Pax vobiscum.

  103. Peter / Strangle

    Seems that this month the Short Strangle Portfolio has metamorphosized into the Back Ratio Portfolio :-)   Care to provide us some of your thoughts on the change? Could you explain a little those back ratios, please?

  104. I remember that conversation Shadow!  It's like that Fox newswoman who says "I have a Guatamalen daughter" and then decides that gives her the right to vilify all the Central American refugees who weren't lucky enough to get picked by her when she had baby fever.  I wonder if that's why Fox hired her in the first place or, even worse, why she adopted?  She's the whole package for Fox because her gay brother gives her an excuse to say terrible things about gay people and excuse it with "I can say that because my brother is gay, so I know."  

    Ignore/ZZ – Well, we did put those buttons in for a reason.  I think that reason was Cap back in the day!  cheeky

  105. TASR – Finally perking up.

  106. Phil pushing mindless!

  107. Malaysian flight aftereffects: "The international HIV research community was left reeling this morning after reports that a world-renowned scientist and up to 100 researchers, health workers and activists were among those who perished aboard the Malaysia Airlines MH17 crash in Ukraine.     Joep Lange, the Dutch former president of the International Aids Society, was reportedly among those travelling to an HIV conference in Australia."

  108. Peter / Back ratio

    Just to be sure… Are you talking the August 14’s or August 21st's? On regular options this Augusts’ monthly options expire on the 3rd Friday, the 15th , however the 3rd Thursday, for RUT and SPX options’ expirations, it is the 21st.

  109. Today is another statement, no matter what is happening around the world, you can't fight the Fed.  The bubble ain't bursting yet.

  110. rustle

     Fed fighting is loosing but today is saving the 3 witches. 

  111. VZ / Phil – I have choice between FiOS and Comcast. I had Comcast and I got sick of customer service (apparently, not the only one). Funny thing though, Internet works fine on FiOS (I was downloading files at 5MB/s yesterday) except when you try to stream Netflix or YouTube, suddenly we don't see the same speed and buffering… Coincidence?

  112. Phil/CCJ

    You didn't really Buy puts in that portfolio did you?

  113. JPH and shadow re: capacitors, again forgive my technical ignorance, but are you saying that in an EV, super- or ultra-capacitors could be used in a role similar to what the combustion engine currently does in a hybrid, that is, short term bursts of power for pickup and during city driving, etc., the capacitor would then re-charge itself while running on lower power from the battery?  And that by doing so, you might extend the range of the EV, since capacitor would reduce the need to draw on the battery?

    I think that is what Toyota was experimenting with in the Economist article, but please confirm if I have this right.  If so, might think it would suggest a role for capacitors in the EV market, and also could help to make the whole EV idea more attractive..

    Many thanks

  114. akademia, good questions.  When we say Aug we mean the Monthlys.  When we talk about the weeklys, we do specify the weeklys in our post (e.g. Aug2 weeklys, Aug4 weeklys, etc.). 


    I'm doing back ratios and verticals due to a risk of a large drop in the market.  We'll fare better if we have some protection in place, and those long put options provide the safety net.

  115. rally options ex BUTeurope not opening its mouth on russia helps too….100k could die and europe would ban putin from cannes film festival…


  116. AAPL … Expect some selling once it reaches $100.00 since everyone is watching/waiting/expecting that number.

  117. Phil/LTP

    If the portfolio lost $2300 & the STP made $10k, wouldn't you normally say you were overhedged. You normally say 1/2 your losses should be mitigated.

  118. Cramer was wrong real quickly today:

  119. pwright

    Super caps have changed from ripple conversion in AC to Dc and coupling between amp stages to better storage at usually lower voltages close to those of a battery cell. They can go from no charge to full and back to zero almost instantly without damage so they can remove the instantaneous peaks from the batteries and extend their life. Batteries take millions of times longer to remain reliable. They could easily remove turbo spool up delay as in the BMW I8. Also excellent in hybrids of all types where high density current storage is less needed. Many don't understand the I8, it has a 250 HP turbo gas and 120HP electric motor. It only averages 24MPG but is capable of 0 to 60 mph in 4 seconds. It can also crawl along purely electric with front wheels. Race cars have used this with capacitors to what is sometimes referred to push to pass and a driver is allowed so many pushes. Most just allow more boost and fuel but originally it was caps and electric motors using only regenerative power. Porsche even made a flywheel version but the cap and flywheel have fallen off because of cost. These racing things filter down. BTW flywheels are the best thing for storage!

  120. pwright,

    Energy is measured in joules

    Power is measured in watts (joules/second)

    Energy density volumetric is joules/m^3 (energy per cubic meter)

    Energy density weight is joules/kg (energy per 1000 grams)

    Okay, so here's the deal… a capacitor is an ENERGY storage device similar to a battery that is highly efficient (at storing and releasing energy--they lose extremely little to what is known as leakage) and contains a very high POWER DENSITY ('power' is very big).  What this means is a cap can release energy very, very quickly(high energy/second).  The downside is capacitors have poor volumetric efficiency meaning they hold a small amount of energy in a given space.  They also are very heavy per joule of energy stored.

    A supercap or ultracap floats around somewhere between a capacitor and a battery where it has much less power than a cap but more than a battery while it has much lower energy density than a battery (by volume and weight) but much more than a cap.

    I'm trying to avoid going into the physics here…you can look that up on wikipedia.

    Where the promise lies in an EV regarding caps goes is as follows:

    Say you're in traffic and you drive like a total dumb ass that can't pace traffic which avoids using your brakes so, like the typical American, you hit the gas for 5 seconds just so you can slam on your brakes for 5 seconds.  Let's also argue that during this time, you're going to expend 1000 joules to accelerate and dissipate all 1000 joules you just invested as heat in your brakes.  You have now returned to zero kinetic energy as you have come to a full stop.

    This works out as:

    Chemical energy (gas) > thermal energy (combustion in cylinder) > kinetic energy (moving the piston) > thermal energy (brakes).  Braking is 100% a method by which you eliminate all energy previously generated by the system.

    Now here's where things change in an electric vehicle:

    You are still in traffic, and still drive like a total dumb ass that can't pace traffic.  You spend 1000 joules to accelerate your vehicle and you now need to come to a stop because you're a tailgater like most Americans.  Rather than activate your brakes, your motor/generator unit (the replacement for the IC engine in your car) flips the polarity(positive and negative) connected to your energy storage system and begins converting your kinetic energy into electricity to be stored in your battery. Your battery has a chemical reaction to convert your electricity into chemical energy.  This is NOT a highly efficient reaction (you lose a good chunk of the energy in all these conversions).

    Chemical energy (battery) > Kinetic energy (motor/generator gets you moving) > chemical energy (motor generator stops you)

    Now here's where things change with caps:

    Energy (we'll ignore the source) is stored as an electrical potential (voltage) across the plates of the capacitor.

    Voltage (capacitor) > kinetic energy (motor/generator gets you moving) > voltage (motor/generator stops you)

    The problem with the cap is it just does not hold enough energy for you to travel very far and so its use is in stop and go traffic where power is more important than energy storage.  You just don't use much energy to go from 0-15mph-0 but you do need a lot of power to accelerate the vehicle.  This puts a lot of strain on a battery but relatively very little on a capacitor.  Those chemical reactions generate a lot of heat, degrading the battery, to put energy into the system while the capacitor only cares about the resistance seen in the system (which the battery sees as well).

    There is FAR more to this including what shadow just wrote but the gist of it is literally everything is better about a capacitor for these purposes EXCEPT you can't store much energy, with current tech, to travel very far.

  121. LTP/STP – I know this is probaby a stupid question, but can I go to another area of the website to download these spreadsheets? The print is much to small to see on the screen.  Thx.

  122. Phil

    XRT looks like an easy short AGAIN!

  123. tshroyer

    When you view the portfolio on a PC, via Windows, you can enlarge the view size by hitting "Control and +"

  124. Mindless/Shadow – Perfect for today's kids.  

    VZ/StJ – I thought NFLX proved pretty conclusively they were being targeted.  We had NFLX issues until the day they settles with CMCSA.  Since then, no troubles.  

    CCJ/LTP, RJ – That's a mistake, thanks for noticing – should be short puts.  

    Bacon/Angel – You couldn't tell from the sandwich I had yesterday.  Turkey club with more bacon than turkey. 

    Overhedges/RJ – Or you could say some of our clever offsets in the STP are working well.  In a proper drop, the LTP can lose 5% pretty quickly and that's $25,000 so I want the STP to be a little overclocked up at the top.   There's 2 things going on in the STP.  The main thing is we have  50 Oct DXDs at the money ($25) and 20 Aug TZAs in the money ($14) so figure a 10% drop in the market gives us 30% on DXD to $33 and $35,000 and 30% on TZA to $18 for $8,000 more so about $43,000 on a 10% drop.  The LTP is only about $70,000 invested so probably won't lose anything like that much but it means we can keep adding to the LTP as we see fit.  

    While we're at it with the STP, we're also taking short-term trades, some bearish, some bullish – simply because we think they will pay off.  Those have been very successful for the past month – even as we've lost money on our index hedges.  As long as we are GENERALLY well-balanced, we're free to play a little around the edges.  

    Cramer/Rustle – He'll tell you how he was right tonight.  

    I'm learning a lot about capacitors today!  cheeky

    LTP/Tshroyer – If you right click on the image, it says "Open Image in New Tab" or window if you have a crappy browser.  That will open up the full-sized image. 

  125. I tried to hold the explanation to super simple levels but stop and go especially with the latest automatic cruise controls could make traffic a non-driver action and stop all the idling traffic pollution. Personally charging batteries is a stupid idea if you ever looked up what well to wheel efficiency is. Ethanol would disappear if politicians had brains. Big oil is the roadblock to this and stopping climate change. If you believe in it as I do.

  126. TSLA on this subject of energy.

    All must realize Musk gives distance based on no lights, heat or AC 260 miles goes down under 200 with light heat added, in summer heat I have never hear a number, but at zero with a warm car the you will stop before 150 miles.

    How often do you run without all three? 

  127. Phil/Hedges

    Thanks for the explanation.

  128. NEW YORK—Marking the latest and most ambitious attempt to bring stability to the region, the United Nations announced Wednesday that every single person in the Middle East will receive his or her own sovereign nation as part of a historic 317,000,000-state solution.

    The broad and extensive compromise, which affects more than 3,000,000 square miles formerly occupied by the territories of Israel, the West Bank, Gaza, Syria, Iraq, Iran, Saudi Arabia, Lebanon, Oman, Yemen, Egypt, and Jordan, will reportedly draw over 750,000,000 new borders in what experts claim will help drastically curb sectarian violence.

    “Given the incredibly complex and volatile sociopolitical landscape throughout the Middle East, a 317,000,000-state solution is the only realistic means of achieving lasting peace,” said U.N. Security Council president Eugène-Richard Gasana, noting that the treaty was reached after lengthy negotiations, which brought together each of the more than 300,000,000 independent factions. “We are pleased to finally come to an agreement that will hopefully stabilize the entire region and adequately satisfy the demands of all parties.”

    “We are confident that with every man, woman, and child possessing his or her own autonomous area of sovereignty to run as he or she sees fit, we will avoid many of the conflicts that have plagued this part of the world for centuries and left countless dead,” Gasana added. “This is a bright new future for the Middle East.”

    According to U.N. officials, the newly demarcated Middle East now consists of 8,000,000 independent Jewish states, 4,000,000 independent Palestinian states, 112,000,000 Shi’ite Islamic republics, 156,000,000 Sunni Islamic republics, and 19,000,000 Kurdish nations, as well as approximately 18,000,000 territories that include various Christian, Bahá'í, Druze, Zoroastrian, and secular countries.

    According to reports, the treaty has largely been met with support from locals, with many praising the division of the region into nearly a third of a billion sovereign states as a practical and desperately needed solution after decades of ceaseless sectarian fighting.

    “Frankly, giving every Middle Eastern citizen a country of his or her own is long overdue,” 49-year-old Naseer Khalidi told reporters from his newly formed 400-square-foot independent state along the former West Bank, which is adjacent to nations populated by his wife and two children. “After such a long history of violence and discord, we now have a region that is fairly and evenly divided among all religious factions, ethnic groups, and individual inhabitants. Finally, we can all live without oppression.”

  129. XRT/DC – Always a good short over $85.

    TSLA/Shadow – I agree, they need to force electric cars to have some sort of standardized equipment running, not realistic to compare it to a gas car otherwise.  

    You're welcome, RJ.

    Looking strong into the close – let's see if they can keep it together for another 25 mins. 

  130. CORN/Phil

    Have STO Aug $29 puts for .80. What do you recommend for this position now? Thank You.

  131. CORN/Phil

    Forgot to add also have BTO Aug 35/40 bull call spread for 1.00. Thanks.

  132. BRCM up 2.2% today and they report on Tuesday!

  133. diamond

     Still looking like IWM is in the middle of nowhere. Either way from here.

  134. General Question – If a spread is 100% in the money on expiration, is there any reason to close it out early by buying/selling each side? Or is it best (and easiest) to just let the market close and allow the broker to execute both sides. I'm thinking the biggest issue might be the difference in commission?

  135. JPH and shadow, many thanks, that is excellent !  I am going to guess that many of the technical issues you mention are also highly relevant to other areas of energy storage as relates to the grid, wind and solar / photovoltaic, hydroelectric, etc. I've been trying to better understand that, because it seems like it's the "fundamental nut," so to speak, in terms of making these forms of energy economically competitive. 

    (Yikes, now I know I'm treading on the edge of a "global warming" debate, danger will robinson, believe me that's not my intention here, I'm just trying to understand the science of this stuff a bit better, as a lot of this stuff seems pretty important from an investment perspective).

    Thanks again, and good weekend ! 

  136. It's like yesterday never happened…

  137. Besides the Dow, we are above yesterday's high everywhere now. The Russell is hitting its 50 DMA but seems stuck under. Tons of earnings next week so that could be interesting…

  138. brillion 28 / spreads

    If a spread is 100% in the money, I just let it close and have both sides executed.  If it is close though be careful because you will be assigned if it falls $.01 into the spread.

  139. STJ:  No one seems worried.  My hedges appear parasitic and anachronistic.  Only people over 90 remember a market tanking.  Phil, should I be selling bonds and kicking back?

  140. Good article about labor participation – with some numbers:

    There are three main reasons for the decline. First is the recession and weak recovery. The official unemployment rate only counts people who are actively looking for work, and the sustained period of high, long-term joblessness has led many people to give up their searches. Stagnant wages and limited job opportunities have also meant that people who are on the fence about wanting to work — stay-at-home parents and college students, for example — are less likely to search for jobs. That leaves more people on the sidelines.

    The second trend is the aging of the population. As the CEA report noted, 2008 was not only the first full year of the recession, it was also the year that the oldest members of the baby boom generation began qualifying for Social Security benefits. More than a quarter-million Americans turn 65 every month. More people are working into their 60s and 70s, but they remain in the minority. (The participation rate for Americans ages 55 to 59 is 72 percent. For those 60 to 64, it’s 55 percent, and for those 65 to 69 it drops to 32 percent.)

    The third factor is other long-term trends besides aging. Female labor force participation rose for most of the second half of the 20th century then began to decline. Male participation has been trending down for essentially the entire post-World War II period. Young people are working less (at least partly because they’re spending more time in school), and old people are working more. Not all those trends are fully understood, but they predate both the recession and the boomers’ retirement.

  141. Shadow,

    I guess your recession was yesterday.  Or, recessions are so yesterday…

  142. BMW I8 and TSLA

    For $135,000 the I8 can be bettered in performance and efficiency by a list of alternatives, so BMW is smart only build 500. TSLA at over $100,000 average can be beat by even more including my 2004 supped up Suby. I wish the BS in the media would stop. The under $30K chevy plug in could smoke the I8 in all electric and with heavy mods, not the motor, could smoke a model S to 60 because it weights so much less with about the same power.

  143. Zero – I guess hedges are like life insurance, you hope you'll never need them… But they have been pretty much money down the tube the last 3 years or so. It's been relentless on the up side.

  144. ~~sibe14

    Recession is reality, the stock market is fantasy. My mind say short the market but the rich say dare you!

  145. STJ:  More like death assurance.  Where's that glass of Kool-Aid, now……?

  146. Insurance is for chickens. Balance is the answer.

  147. dclark41:

    Hey Ann Arbor!  Did you end up putting on an XRT trade?  I put on an Aug 88/83 bear put for $2.45.  The risk/reward looks good from here.

  148. Corn/Hex – Prices have been getting cheaper, hard to say where the floor is.  If you want to be in corn LONG-TERM, it will come back one day – just probably not this year.  The Aug spread is just dead, you should just be happy if you get your short put money back!  

    Spreads/Brill –   As long as you can rely on your broker not to stick you (TOS hasn't yet), then let them sort it out.  

    Bonds/ZZ – I wouldn't go near those either.  Cash is king and all we can do is buy those bargains and keep alert for those macros to finally come home to roost.  As I mentioned in yesterday's post, I spent the better part of 2007 and 2008 telling people I didn't trust the market, much as I did in 1998 and 1999 – it sucks to be "wrong" about the timing but, as is our theme for this year, I'd rather make 20% and get out and do that consistently than chase crazy gains until the market explodes.  

    Oil back to $103 into the close (/CLQ4).   Sept contracts went the other way, down to $101.90 – crazy.  

    Oh well, another week bites the dust.  

    Have a great weekend everyone!  

    - Phil

  149. Middle-East stability/Phil,

    That might work, but I like my wife's plan.  Turn the region over to Disney and let them manage it.  Call it Mecca World, and sell reasonably priced tickets.  It would be preserved, neat, clean, orderly.  Everyone would be smiling and friendly and have great benefits and the popcorn would be delicious.  Disclosure: I am holding DIS short puts.

  150. Thanks, Phil, good weekend, all!!!

  151. Mecca World/Sibe – I love it.  They can all have different "lands" that tourists can go between.  

    And let's not forget, even our beloved country wasn't always so respectful of others' boarders:

    Check out this dog rescuing others.  

  152. Phil / GILD   Nomura raised PT to $141 from $132.  Shares up 5% today to 89ish.  

    I have a few spreads that are doing very well, but I'm thinking of finding another that would be a near 0 net cost.  

    I have the 6xJan15 -65P +65/80 bull call for avg cost of 0.87, on track for a full $15.  

    Cost: $522  Max Value: $9000  Potential Profit: $8478

    I have 7xJan16 -75P +80/90 bull call for avg cost of 0.53, now on tract for a full $10

    Cost: $371 Max Value: $7000  Potential Profit: $6629

    Downside:  I own 1300 shares at 70.38 for a 91K commitment.

    How would you add some new spreads?  Continue along the same track?

  153. A major capacitor contribution to all electronics not mentioned affects the cost of a final product. Without storage capacitors the power supply would require sizing for the maximum power requirement. Best example is an audio amplifier where most signals run in a single number watt but a loud base note maybe 100 watts for under a second. A 33 watt power supply with 15,000 micro farads of capacitance can supply 100 watts for 1 second, even this is way more than usual on a budget component. The entire power supply can be reduced to 1/3 the capacity and maybe 1/3 the cost. The biggest saving being the cost of the transformer and 1/3 cost is a maximum number as big transformers are not proportion in cost. This applies to all power supplies and for a vehicle the same applies.

    High quality better sounding amps have a (stiff) more than minimal power supply, usually the power supply is the biggest component cost. Some frilliest cases of mega-buck products can put $1,000 or more into the faceplate material and machining. 

    Super capacitors are super expensive!

  154. Hextra, if we get a bounce, it looks like you might be able to roll your aug $29 CORN puts to the nov $28s.  We may be in for a dead cat bounce soon, but you may be rolling this till after December.

  155. Jbur

    Hey Colorado! I got caught up with work and never had the chance. But with the way this market Behaves I will probably get another chance on Monday. I have had two winning trades in XRT over the last month so why not a third! 

    I think you are right about the risk reward, but I am a little concerned about the volume that bought today's rally in XRT.  The spread you suggested sounds good although I may go out another month.  This perpetually rising market has me a little baffled and wary.

  156. The way this market is going, it might be time for 5 More Trade Ideas That Can Make 500% in a Bull Market. 

  157. Watch this video at

    Obama Puts Onus on Putin to De-escalate Crisis

    July 18: Bloomberg’s Peter Cook reports on the U.S. raising pressure on Russia to end support for pro-Russian rebels in Ukraine in the wake of the crash of Malaysian Airlines MH17.

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  158. Watch this video at

    Can Stocks Continue to Rally Amid Global Tensions?

    July 18: JPMorgan’s Anne Lester, Princeton’s Alan Krueger and Pimco’s Richard Clarida discuss where the best opportunities in stocks are and the state of the European economy.

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

  159. Watch this video at

    HP, IBM, Google: Good News, Bad News in Tech World

    July 18: Bloomberg’s Cory Johnson reports on Hewlett-Packard Chief Executive Officer Meg Whitman taking on the Chairman role at the pc maker, why IBM needs their deal to produce business software with Apple and Google losing its chief business officer to Softbank.

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

  160. Watch this video at

    Head-on Collision: Mercedes vs. Smart Car

    July 18: What happens when the new Smart Car ForFour takes on a Mercedes S-Class in a head to head collision at 50 kmp?

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

  161. From Bloomberg, Jul 19, 2014, 1:59:36 AM

    July 18 (Bloomberg) — Ido Aharoni, consul general of Israel in New York, talks about the country’s military offensive in the Gaza Strip and the threat Hamas poses to Israel’s civilian population.
    Aharoni speaks with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    United Nations chief Ban Ki-moon heads to the Middle East today to prod efforts to end fighting between Israel and Gaza Strip militants that has pushed the Palestinian death toll past 300 and kept millions of Israelis running for cover from rocket fire.

    To read the entire article, go to

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  162. From Bloomberg, Jul 17, 2014, 2:13:00 PM

    An Indian woman carries an empty water pot as she crosses the dry bed of a pond at Mehmadpur village, some 20 kms from Ahmedabad, on July 8, 2014. Photographer: Sam Panthaky/AFP via Getty Images

    The annual State of the Climate is in, and for readers looking forward to cracking a beer and diving into the 275-page report, read no further. Spoiler Alert: The planet is still getting hotter.

    To read the entire article, go to

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  163. From Bloomberg, Jul 18, 2014, 10:19:22 PM

    (Corrects Murdoch company that owns TV stations in second

    To read the entire article, go to

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  164. From Bloomberg, Jul 19, 2014, 12:00:01 AM

    A dollar gauge rallied the most in
    eight weeks as the Federal Reserve acknowledged surprise in the
    improvement in the U.S. labor market and amid heightened
    geopolitical turmoil.

    To read the entire article, go to

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

  165. From Bloomberg, Jul 19, 2014, 12:01:01 AM

    Federal drug offenders may get their
    sentences cut by an average of two years under changes to U.S.
    guidelines in a move praised by Attorney General Eric Holder,
    who has made fair sentencing and prison overcrowding two of his
    signature issues.

    To read the entire article, go to

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

  166. From Bloomberg, Jul 19, 2014, 2:00:01 AM

    The pound gained versus the euro
    this week as reports strengthened speculation that the U.K.
    economy is recovering fast enough to withstand tighter monetary
    policy while other European economies require more stimulus.

    To read the entire article, go to

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

  167. From Bloomberg, Jul 19, 2014, 12:00:01 AM

    The leaders of three Central
    American countries will meet with President Barack Obama next
    week in Washington as part of U.S. efforts to stem a flood of
    children coming across the Mexican border.

    To read the entire article, go to

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

  168. From Bloomberg, Jul 19, 2014, 12:01:01 AM

    Google Inc. (GOOG) is among several
    technology companies considering a plan that uses pay-phone
    locations to give New Yorkers free wireless Internet access.

    To read the entire article, go to

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

  169. From Bloomberg, Jul 18, 2014, 5:04:47 PM

    Higher prices at grocery-store checkout lines are souring attitudes and straining household budgets as they take a bigger bite out of workers’ paychecks. Photographer: Luke Sharrett/Bloomberg

    Consumer confidence unexpectedly
    declined in July to a four-month low as Americans grew
    increasingly frustrated with the slow pace of wage gains.

    To read the entire article, go to

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

  170. From Bloomberg, Jul 18, 2014, 4:27:21 PM

    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

  171. From Bloomberg, Jul 18, 2014, 11:36:25 AM

    Prime Minister Antonis Samaras has repeatedly pledged that Greece won’t need another bailout or new austerity measures. Photographer: Kostas Tsironis/Bloomberg

    Greece’s return to bond markets after a four-year exile hasn’t convinced economists it can avoid a third bailout.

    To read the entire article, go to

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

  172. From Bloomberg, Jul 18, 2014, 5:17:00 AM

    Federal Reserve Bank of Boston
    President Eric Rosengren said new community development
    initiatives to spur cooperation between cities and businesses
    can go beyond monetary easing as a way to support lower-income
    Americans amid an economic recovery that’s still incomplete.

    To read the entire article, go to

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

  173. From Bloomberg, Jul 18, 2014, 4:58:59 PM

    Maybe not the best choice of words?

    On Monday, China’s state-owned CCTV-13 news channel replayed some offensive remarks that Fox News’s Bob Beckel made last Thursday during “The Five,” which he co-hosts. In response to a New York Times report on Chinese hackers intruding into U.S. government databases, Beckel called the Chinese “the single biggest threat to the national security of the United States,” and then added: “Do you know what they just did? As usual, we bring them over here and we teach a bunch of Chinamen — eh, Chinese people — how to do computers, they go back to China, and they hack into us.” He went on, and concluded by saying, “So China” and making an obscene gesture.

    To read the entire article, go to

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  174. From Bloomberg, Jul 18, 2014, 4:02:16 PM

    Here are my favorite tweets from the last week:

    To read the entire article, go to

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  175. From Bloomberg, Jul 18, 2014, 2:07:24 PM

    This is Kazakhstan, not China. I don’t know what it says about the sovereign credit.

    Here is an International Financing Review article about credit default swaps on China. There are a lot of those swaps, is the main point, and they have a pleasing, or irritating, lack of sense:

    To read the entire article, go to

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  176. From Bloomberg, Jul 18, 2014, 12:33:29 PM

    Wage growth for construction workers is historically low.

    To read the entire article, go to

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

  177. From Bloomberg, Jul 18, 2014, 12:03:32 PM

    I feel the need, the need to cut carbon emissions.

    U.S. conservatives make at least two arguments against action on climate change: We don’t have enough conclusive evidence to prove it is happening, and even if we did, the cost of cutting our carbon emissions would be too high. The U.S. military has been quietly rebutting both those arguments.

    To read the entire article, go to

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

  178. Mobile messaging giant Line reportedly files for U.S. IPO

    Yesterday, 06:59 PM ET · NHNCF

    • Bloomberg reports Asian mobile messaging Line (#1 in Japan) has confidentially filed for a U.S. IPO. Morgan Stanley is said to be running the offering.
    • Line, controlled by South Korea’s Naver (OTC:NHNCF), has already filed to go public in Tokyo, while reportedly aiming for a ~$10B valuation. Pursuing a simultaneous NYC offering would allow the company to tap into strong U.S. interest in mobile messaging plays – interested heightened by the Facebook/WhatsApp deal.
    • With 470M+ registered users (not the same as active users), Line appears to be the world’s 3rd-most popular mobile messaging platform, behind WhatsApp (500M+ monthly active users) and Tencent’s WeChat (396M MAUs at the end of Q1, with the lion’s share in China).
    • Line had 2013 revenue of $338M, and Q1 revenue of $143M (up over 3x Y/Y).
    • Previous: Line reportedly prepping IPO

  179. Big banks’ reserve releases tick higher in Q2

    Yesterday, 06:48 PM ET · JPM

    • The big banks aren’t quite ready to let go of their reserve releases: The big four – JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) – released a combined $2.25B of their bad-loan reserves in Q2, up nearly 20% from the $1.88B they released in Q1.
    • The banks continue to see improvement in their customers’ credit quality, but their earnings continue to rely in part on freeing up some of their rainy-day cushions, rather than being able to generate strong earnings from their operating businesses.
    • Even with the Q2 uptick, the banks are releasing less in the way of reserves than they have for most of the past four years, and analysts see the practice ending before too much longer.
    • Some regional banks such as Comerica (NYSE:CMA) and Huntington Bancshares (NASDAQ:HBAN) that had been releasing reserves started building their reserves up again by small amounts during Q2.

  180. Baidu enters Brazil, eyes Thailand and Egypt

    Yesterday, 06:10 PM ET · BIDU

    • Baidu (BIDU +2.3%) has officially launched a Brazilian search engine, replete with a Portuguese-language UI and integrated Web/image/video search.
    • The Chinese search giant also says it’s setting up a Brazilian R&D center, and is in talks to partner with local universities. A spokesman adds Baidu will probably launch Thai and Egyptian search engines next month.
    • Baidu has made plenty of attempts over the years to grow its clout in foreign markets, where it’s generally an underdog relative to Google and/or local Web firms. But success has been quite limited.
    • Q2 results arrive on July 24.

  181. Visa, Master Card lose bid to dismiss suit over opt-out swipe fees

    Yesterday, 05:53 PM ET · V

    • A U.S. district judge declines to dismiss antitrust lawsuits filed against Visa (NYSE:V) and MasterCard (NYSE:MC) by retailers who opted out of a ~$5.7B class action settlement in 2012 over transaction fees.
    • The same judge in December approved the card companies’ settlement with a nationwide class of merchants in a lawsuit alleging antitrust claims over the fees, but several merchants including Target (NYSE:TGT) and Macy’s (NYSE:M) pursued cases after dropping out of the settlement.
    • V and MC argued the lawsuits should be barred by legal releases in an earlier settlement in 2003 and because the merchants don’t directly pay fees to banks that issue V and MC branded cards.

  182. Colorado governor, oil companies hope to thwart drilling ballot measures

    Yesterday, 05:38 PM ET · APC

    • Colorado Gov. Hickenlooper and business leaders say they will do “whatever it takes” to defeat initiatives proposed for fall elections that would restrict oil and gas drilling generating $30B/year for the state economy.
    • Hickenlooper is trying to head off a ballot measure that would prohibit drilling within 2,000 feet of structures, a step energy companies say would effectively ban fracking in the state; another proposal would provide communities with more control over where drilling takes place.
    • Anadarko Petroleum (NYSE:APC), Whiting Petroleum (NYSE:WLL) and Encana (NYSE:ECA), which are drilling in the Denver-Julesburg Basin, one of the nation’s richest oil and gas fields, said this week they will spend $50M to fight the measures.

  183. Dell embraces Bitcoin

    Yesterday, 05:38 PM ET · COIN

    • “Now you can buy digital with digital,” reads a blog post in which Dell announces it’s accepting Bitcoin (COIN, OTCQB:BTCS) payments on
    • The IT giant is partnering with popular Bitcoin payment-processor Coinbase, and is launching a promotion through which buyers of Alienware gaming PCs can get a 10% discount (up to $150) by paying via Bitcoin.
    • Dell joins a Bitcoin supporter list that also includes Newegg, Expedia, Dish Network, and Overstock. The virtual currency’s low transaction fees have given merchants an incentive to accept it, even as its volatility leaves others cautious.
    • Coinbase is currently showing bid-ask spread of $627-$630.

  184. IBM’s hardware sales, pricing, earnings quality in focus post-earnings

    Yesterday, 05:24 PM ET · IBM

    • IBM’s (IBM – unchanged) Q2 hardware sales (-11% Y/Y vs. -23% in Q1,) “delivered meaningful upside” to Cantor’s estimates, says analyst Brian White, while reiterating a Buy. Favorable comps and healthy mainframe/storage demand allowed the hardware unit to grow 39% Q/Q, or more than twice historical seasonal growth.
    • White also thinks IBM’s Chinese revenue (-11%, hurt by NSA issues) has bottomed out. On the CC (transcript), IBM said it saw “a pretty good sequential improvement” in China and India, though it added other parts of Asia-Pac remained weak.
    • Citi’s Jim Suva is less enthusiastic than White: He observes a one-time asset gain boosted EPS by $0.10, that Global Business Services outsourcing (-9%) remains weak due to price pressure and contract negotiations, and that services signings are down 33% (partly due to tough comps). He also notes mainframe growth isn’t expected to continue.
    • Credit Suisse’s Kulbinder Garcha, meanwhile, has doubts about “the quality” of IBM’s forecast for $20 in 2015 EPS, given “results continue to be driven less by revenue growth and more by non-operational items.”
    • Some bright spots: 1) With the help of SoftLayer, IBM’s “cloud delivered as a service” revenue is now on a $2.8B run rate. That’s roughly equal to 3% of total revenue. 2) Ahead of the Apple deal, “mobile revenue” (a nebulous term) is up over 100% YTD.
    • Prior IBM earnings coverage.

  185. Plug Power adds to gains as Japan reveals fuel cell vehicle subsidies

    Yesterday, 05:18 PM ET · PLUG

    • Plug Power (NASDAQ:PLUG) finished 10% higher on the session, apparently boosted late by Japan Prime Minister Abe’s plan to provide at least ¥2M (~$19,550) in subsidies for every purchase of a fuel cell vehicle.
    • The environmentally friendly cars are more expensive than conventional autos – Toyota’s (NYSE:TM) model will cost ~¥7M – which led Abe to decide government support was necessary to encourage buyers.
    • Earlier: Plug Power +3% after Roth Capital says outlook has improved.

  186. Stocks rally as global tensions ebb, score weekly gains

    Yesterday, 04:25 PM ET

    • Stocks rebounded with strong gains following the S&P 500′s largest drop in three months, as investors decided the geopolitical tensions that stoked so much worry yesterday now appeared contained.
    • Google’s strong Q2 report served as a bellwether for internet-related stocks, which enjoyed big gains and helped the Nasdaq to a 1.5% jump; the Nasdaq biotech index climbed 3%, and the small-cap Russell 2000 Index rose 1.4%.
    • The Dow was driven by gains in all but one of its 30 components; the notable laggard, which reported Q2 results that failed to wow investors, was GE.
    • Markets are holding up well despite global events, says Columbia Management’s Jeff Knight: “A few years ago, you would have had contagion every time you had a bad news story… now there’s more confidence in the system.”
    • A total of 744M shares traded at the NYSE, which was heavier than average due to options expiration activity.
    • Treasury prices fell, with the yield on the benchmark 10-year note rising one basis point on the day at 2.487%.

  187. Sotheby’s cutting U.S., U.K. jobs

    Yesterday, 04:23 PM ET · BID

    • Sotheby’s (BID +3.8%) is cutting an undisclosed number of positions, mostly in the U.S. and U.K., as part of a restructuring. (8-K)
    • The auction house expects to record a $13M Q3 charge, and to finish its job cuts by year’s end.
    • The announcement arrives 2 months after Sotheby’s made peace with Dan Loeb.

  188. Weekly ETF Gainers / Losers

    Yesterday, 04:19 PM ET · ILF

  189. At the close

    Yesterday, 04:00 PM ET

    • Dow +0.71% to 17,097.61. S&P +1.02% to 1,978.13. Nasdaq +1.57% to 4,432.15.
    • Treasurys: 30-year -0.35%. 10-yr -0.25%. 5-yr -0.19%.
    • Commodities: Crude -0.16% to $103.02. Gold -0.46% to $1,310.80.
    • Currencies: Euro 0.% vs. dollar. Yen +0.19%. Pound +0.05%.

  190. GE flops after strong but “noisy” Q2 results

    Yesterday, 02:58 PM ET · GE

    • GE’s (GE -1%) Q2 results at a glance look just fine: Net profit jumped by more than 13% Y/Y, revenue rose by 3%, orders from international growth markets climbed 6%, and the Synchrony IPO and Alstom acquisition appear on track.
    • So what’s not to like? After popping higher at the open, shares drifted lower and have stayed there amid what Bernstein analysts call a “noisy” quarter.
    • “Unlike last quarter, this quarter is not so clean,” Bernstein says, adding that at the end of all the puts and takes on gains and tax rates and other differences, GE came in about penny below its expectations; the firm says it is concerned about the second quarter of equipment order decline and pressure in pricing for the order book outside of aviation.

  191. Skyworks soars on results/guidance, lifts fellow mobile suppliers

    Yesterday, 02:51 PM ET · SWKS

    • “We believe Skyworks’ (SWKS +13.5%) diverse analog portfolio is enabling content share gains in its handset customer base,” writes Canaccord after taking in the RF component giant’s FQ3 beat and very strong FQ4 guidance.
    • Canaccord thinks the FQ4 outlook is due to a mixture of strong iPhone 6 content share, growing sales of higher dollar-content integrated solutions to Chinese/emerging markets OEMs (gaining Android share), and “growing traction” for the company’s non-phone analog IC business.
    • 802.11ac Wi-Fi, mobile infrastructure, and embedded products (the proverbial “Internet of Things”) are some of the non-mobile RF markets Canaccord sees Skyworks growing its sales to. Needham, for its part, also sees the smart grid, automotive, and medical markets providing a boost.
    • On the CC (transcript), CEO David Aldrich declared broader mobile RF demand is benefiting from the need to support a larger number of spectrum bands – Avago (AVGO +4.3%) also benefits from this – as well as growing system complexity (driving a shift towards integrated solutions) and OEM efforts to improve signal performance.
    • RF component peers Avago, RF Micro (RFMD +6.7%), TriQuint (TQNT +6.8%), and Resonant (RESN +7%) are outperforming amid a tech rally, as are several other mobile suppliers. INVN +3.9%. HIMX +2.9%. OLED +5.3%. CRUS +2.9%.

  192. EPA proposes new limits on Alaska Pebble Mine project

    Yesterday, 02:44 PM ET · NAK

    • The EPA proposes restrictions on mining activity at Northern Dynasty Minerals’ (NAK -5.9%) Pebble Mine site in Alaska’s Bristol Bay to protect one of the world’s largest salmon fisheries.
    • The agency’s draft rule under the Clean Water Act would limit dredging and filling related to the extraction of copper and gold at the proposed mine, which the EPA has said could have “significant and irreversible negative impacts” on the region.
    • Pebble Partnership CEO Tom Collier says the company likely would file for a permit with the Army Corps once it gets another investor on board, but admits the latest EPA proposed restrictions won’t help his pursuit.

  193. Massive number of U.S. auto recalls only dent sales slightly

    Yesterday, 02:43 PM ET · GM

    • Buried inside an economic report from the Richmond Federal Reserve this week is an interesting tidbit on the auto industry.
    • As part of its scan of the economic horizon for the Beige Book, the bank noted the massive wave of automobile industry recalls has only had a “slight adverse” impact on sales. Customer traffic was still up and new car sales strong on solid pricing.
    • The read from Richmond is consistent with recent U.S. sales reports from major automakers, although with a slight disconnect existing between a “sale” and a “delivery” in the industry the confirmation is noteworthy.
    • Chaos theory: Some industry analysts think recalls can actually spur sales as safety is teed up as a consumer issue and older cars replaced.

  194. Third Point sees Argentina exit from malaise, renews bet on debt

    Yesterday, 02:15 PM ET · YPF

    • Dan Loeb’s Third Point hedge fund is renewing a bet on Argentine government debt, expecting the country will reach a deal with creditors to resolve claims from its 2001 default by the end of the year, and is taking a stake in state-controlled oil company YPF (YPF +5.2%).
    • “We are in the midst of a critical inflection period for the country: If the government settles with its hold-out creditors, Argentina will regain access to global capital markets,” according to the hedge fund’s Q2 letter to investors.
    • Third Point says Japan has been the biggest source of losses this year, but the firm is still finding opportunities in the country and expects macro conditions that have been headwinds to become more favorable toward the end of the year.
    • Earlier: YPF pops as Third Point is said to increase stake.

  195. EA, Take-Two, GameStop outperform on NPD data; Activision higher

    Yesterday, 02:07 PM ET · UBSFY

    • After rising 57% Y/Y in May due to new game launches, U.S. retail physical game sales fell 3% in June to $286.8M, per NPD. But with June 2013 having a stronger launch title lineup, that figure was better than expected. Sales were also still up over 4% from a May level of $274M.
    • Ubisoft’s (OTCPK:UBSFY) Watch Dogs was the top-selling title for the second month in a row. Electronic Arts’ (EA +3.1%) UFC (launched on June 3) was #4, and FIFA 14 (receiving a World Cup boost) was #5. Titanfall (#8 in May) fell out of the top-10.
    • Activision’s (ATVI +1.2%) Call of Duty: Ghosts rose 2 spots to #8. But The Amazing Spider-Man 2 (#6 in May) dropped out of the top-10.
    • Take-Two’s (TTWO +4.1%) NBA 2K14 (boosted by playoff interest) rose a spot to #6, and GTA V came in at #10. Nintendo’s (OTCPK:NTDOY) Mario Kart 8 and Tomodachi Life were respectively #2 and #9.
    • With the help of Microsoft’s cheaper Xbox One package, hardware sales rose 106% Y/Y to $292.7M. Together with the software numbers, that’s providing a lift to GameStop (GME +4.4%).
    • EA reports on July 22, while Activision and Take-Two both report on August 5.

  196. Sorry doll: Barbie’s days as a Mattel mainstay could be numbered

    Yesterday, 01:47 PM ET · MAT

    • Though Barbie has racked up 50 years of strong sales with only a few periods of weakness, the toy’s day as a Mattel (MAT -0.6%) mainstay might be over.
    • Girls have focused on electronic devices, collectibles, and arts and crafts in a trend that might be hard to reverse.
    • Barbie sales fell 15% Y/Y in Q2 and the multi-year stacks look even weaker.
    • A refresh from Mattel on Barbie is likely, although a fresh doll brand also looks like a strategic option to analysts.

  197. NQ Mobile now +13.1% following auditor change

    Yesterday, 01:35 PM ET · NQ

    • After opening lower in response to news it has fired auditor PwC and replaced it with Marcum Bernstein & Penchuk, heavily-shorted NQ Mobile (NYSE:NQ) is now surging back towards $5.
    • “It’s good news that NQ Mobile finally took action to get a new auditor in its efforts to file a 20-F because PwC had delayed its audit work for a long time and the company can’t afford to wait too long,” says Rosenblatt Securities’ Jun Zhang. “NQ can move on to focus on its normal business once the uncertainty of 2013 report filing is removed.”
    • SA author Ronin Investment Research is more pessimistic, arguing (citing past auditor opinion statements) PwC’s firing came after the firm voiced concerns misstatements could be happening. “PwC did its job. It expressed concern that a problem could exist.”
    • Shares still -67% YTD.

  198. Cable ad spending expected to drop

    Yesterday, 01:33 PM ET · DIS

    • General Motors and Procter & Gamble have reduced their level of ad commitments compared to a year ago, according to estimates from the WSJ.
    • The shift of more ad dollars away from TV to digital channels could bite 2H revenue for major networks (DIS, CMCSA, CBS, FOXA, TWX, AMCX, VIA).
    • The overall cable upfront market is now expected to show a Y/Y decline of as much as 5% after early estimates were for a 4% gain.

  199. Google +3% as Street praises share gains, pricing

    Yesterday, 01:26 PM ET · GOOG

    • 9 firms have hiked their Google (GOOG, GOOGL) targets after the company reported mixed Q2 numbers, a 25% Y/Y increase in paid clicks, and a smaller-than-expected 6% drop in cost per click (NYSE:CPC). BGC has upgraded shares to Buy.
    • “With now four quarters in a row of 20%+ Web sites revenue growth, Google’s search business appears to be benefiting from a virtuous cycle of audience growth and pricing power,” gushes Canaccord ($715 PT). It sees product listing ads, Android share gains, and Google’s efforts to integrate more data within search results boosting future growth.
    • JPMorgan sees improving CPC trends for Google sites pointing to “more material improvements in mobile monetization, or at least that the mobile pricing gap is becoming less of a drag.” The firm’s 2014 revenue estimate has been hiked, but its EPS estimate has been cut following stronger-than-expected spending.
    • SunTrust is a little concerned about a decline in U.S. growth to 12% and soft ad network prices (mobile is viewed as a culprit). But it’s also pleased with paid click growth, and unconcerned about Nikesh Arora’s pending departure. Cantor thinks the top-line numbers suggest Google “continues to gain share both in search and display.”
    • Meanwhile, the Telegraph reports Google is looking to bring Fiber to the U.K. The company suggested on its CC (transcript) more Fiber announcements are on tap.
    • Prior Google earnings coverage.

  200. Report: 21st Century Fox has $25B bridge loan at the ready

    Yesterday, 01:15 PM ET · FOXA

    • 21st Century Fox (FOXA +0.4%) has a $25B bridge loan it can use to purchase Time Warner TWX ready to go with Goldman Sachs and JPMorgan, according to an upcoming story from Financial Times.
    • The amount could be enough to get a Fox offer over the hump with the TWX board based on some early numbers-on-napkins estimates.
    • Time Warner – 21st Century Fox timeline

  201. Canadian Pacific powers to second day of gains after strong Q2 earnings

    Yesterday, 12:58 PM ET · CP

    • Canadian Pacific (CP +3.3%) shares are strong for a second straight day after better than expected Q2 results provide another quarter of vindication for CEO Hunter Harrison in proving naysayers wrong.
    • Q2 revenues rose 12% to $1.56B, beating estimates as economic recovery drove higher shipments; shipments of crude to Canadian and U.S. refineries rose 18% in dollar sales, to $114M.
    • Most eye-popping is the 65.1% operating ratio, a 6.8 percentage point improvement from 71.9% a year ago (lower is better), and not far off Harrison’s goal to hit a full-year ratio of 65% by 2015; when the CEO took over in 2012, the operating ratio was above 80%.
    • BMO Capital, one of several firms raising their stock price targets for CP, says the railway “continues to have significant momentum” from its cost-cutting initiatives, while Desjardins notes that crude-by-rail is “a key growth driver.”

  202. Eni faces one-day strike over proposed closure of Italian refineries

    Yesterday, 12:38 PM ET · E

    • Italy’s three largest unions are calling for a one-day strike on July 29 for all of Eni’s (E +0.4%) 30K workers in Italy to protest the energy company’s decision to shut unprofitable refineries.
    • The strike is scheduled for two days before new Eni CEO Claudio Descalzi is expected to present a new strategy for the company that unions say they have been told will include plans to close as many as five of its six Italian refineries.
    • Eni’s refining and marketing unit has lost €800M in the past two years and has little chance of recovery any time soon because consumption of gasoline and other refined products has plunged in Italy amid an economic stagnation.

  203. AMD still off sharply as downgrades arrive; Nvidia also lower

    Yesterday, 12:31 PM ET · AMD

    • In addition to offering soft Q3 guidance, AMD (AMD -17.5%) stated on its CC (transcript) its expects Q3 to be this year’s “peak quarter” for console APU shipments.
    • FBR, which has cut shares to Market Perform, calls this “most surprising,” given console APU shipments rose sharply in Q4 last year (as the Xbox One/PS4 launched).
    • It thinks AMD might benefit down the line from a design win for Nintendo’s next-gen 3DS, but only sees this boosting EPS by $0.04. The firm is also concerned inventory rose 10% Q/Q to a new all-time high.
    • When pressed in the Q&A about what his console remarks imply for Q4 sales, CEO Rory Read declined to offer a forecast. He did, however, state PC-related sales are expected to rise in Q4 (in-line with normal seasonality).
    • BofA/Merrill, which has cut shares to Underperform, argues AMD’s PC CPU/GPU ops (have seen share losses to Intel/Nvidia) remain “a material headwind.” The firms adds light exposure to enterprise PCs (outperforming in 2014) and certain low-end PC segments seeing strong growth (such as Chromebooks) are also issues.
    • Raymond James is still bullish: Though thinking management should’ve communicated console trends better, it believes AMD continues to execute well, and suspects there’s an “element of prudence” to Microsoft/Sony’s build activity.
    • Nvidia (NVDA -3.9%) is off in sympathy. Read stated on the CC AMD saw a decline in high-end GPU shipments to graphics card channels – Digitimes previously reported something similar – as demand from cryptocurrency miners abated.” Shipments are expected to rise in Q3.

  204. Plug Power +3% after Roth Capital says outlook has improved

    Yesterday, 12:25 PM ET · PLUG

    • Roth Capital says it is more confident that Plug Power (PLUG +3.1%) can meet its 2014 revenue guidance and bookings target after meeting with company management.
    • The firm says PLUG appears to be looking to deploy its products at four locations during the current quarter, leaving it well positioned to ship more units than expected; an increase in shipments also will raise its product gross margins.
    • Roth believes PLUG is reaching a positive turning point with its large customers, but it remains concerned about its valuation and keeps a Neutral rating on the shares.
    • FCEL +1%, BLDP +1.6%, ZBB +1.9%.

  205. Starbucks testing mobile ordering system

    Yesterday, 11:56 AM ET · SBUX

    • Starbucks (SBUX +0.7%) will allow customers to pick up orders set up through its mobile app sometime this year.
    • The company has been testing the concept at a store in Seattle to work out the obvious issues associated with hot drink orders.
    • The Starbucks mobile app has one of the highest engagement rates in the retail sector.

  206. Netflix earnings day just a weekend away

    Yesterday, 11:28 AM ET · NFLX

    • Netflix (NFLX +0.2%) added 900M subscribers in the U.S. and 1.1M abroad during Q2, forecasts BMO Capital.
    • The company reports its quarterly results on Monday afternoon with some of the focus expected to move outside of straight number-crunching to dissect which new global markets Netflix plans to enter in 2H and what the costs of those launches will be.
    • Earnings preview

  207. Cliffs cuts director slate in bid to keep control

    Yesterday, 11:13 AM ET · CLF

    • Cliffs Natural Resources (CLF +1.5%) says it is cutting the size of its slate of directors for election at its July 29 annual meeting, in an attempt to keep hedge fund Casablanca Capital from gaining a majority of the board.
    • The move allows shareholders to vote consistently with recommendations from proxy advisory firms ISS and Glass Lewis, which said shareholders should support four Casablanca nominees but not to give the hedge fund a majority of the board.
    • Casablanca calls the move “a desperate last-minute ploy” that would prevent real change at CLF.

  208. Ericsson jumps on strong Q2; Alcatel-Lucent, Nokia also rally

    Yesterday, 10:55 AM ET · ERIC

    • After declining 13% Y/Y in Q1, Ericsson’s (ERIC +8.3%) Networks (mobile infrastructure) sales rose 3% in Q2 to SEK29B ($4.26B), thereby fueling a revenue beat.
    • That, in turn, is sparking a rally in rivals Alcatel-Lucent (ALU +5.3%) and Nokia (NOK +2.7%). Nokia reports on July 24, and Alcatel on July 31.
    • Ericsson’s remarks suggest mobile data demand drove the turnaround: Much of its sales growth came from radio access (base station) demand; sales of IP edge and IMS products were also strong; and capacity upgrades in “advanced LTE markets” (such as the U.S.) were solid due to “operators’ focus on network performance as a key differentiator.” 11 new contracts were signed for Ericsson’s SSR 8000 routers.
    • “The usage of networks on 4G is high so operators need greater density and improvement in capacity,” says CEO Hans Vestberg. He adds orders are finally being fulfilled for Chinese 4G contracts.
    • Global Services revenue remains soft, declining 7% to SEK23.1B ($3.38B) after falling 5% in Q1. Support Solutions +21% to SEK2.8B ($410M) vs. +13% in Q1.
    • Gross margin was 36.4%, -10 bps Q/Q but +400 bps Y/Y. Op. margin jumped 280 bps Y/Y to 7.3%. “To us, industry fundamentals will strengthen as mobile broadband networks mature, allowing Ericsson and its peers to present higher profitability,” predicts ABG’s Sundal Collier.
    • Q2 results, PR (.pdf)

  209. NPD data could be the story on Michael Kors

    Yesterday, 10:15 AM ET · KORS

    • Michael Kors (KORS +1.4%) moves higher as channel checks this week from key investment firms seem to contradict last week’s negative reading from Sterne Agee and a Jefferies warning from earlier today.
    • NPD data due to be released today could put the analyst bickering to rest.

  210. U.S. Silica target raised to $69 from $54 at Jefferies

    Yesterday, 10:13 AM ET · SLCA

    • U.S. Silica’s (SLCA +1.2%) price target is raised to $69 from $54 at Jefferies, which maintains its Buy recommendation and remains attracted to SLCA’s volume and potentially distribution-based growth avenues.
    • Jefferies likes the recently announced Cadre Services acquisition as it provides a Permian platform with expansion potential, incremental product diversification, and meaningful EPS accretion; the firm lifts its EPS estimates for 2014 to $1.95 from $1.90 and for 2015 to $3.25 from $3.10.

  211. InterCloud +13.1% after claiming $23M+ 2014 backlog

    Yesterday, 10:09 AM ET · ICLD

    • InterCloud (NASDAQ:ICLD) states its 2014 new business backlog now exceeds $23M. Over $5M is tied to the company’s Cloud and Managed Services ops, and over $7M involves its wireless network upgrade services deals.
    • InterCloud announced last week it had landed over $8M in wireless services deals over the prior 90 days.

  212. Leading Indicators shy of estimates in June

    Yesterday, 10:01 AM ET

    • June Leading Indicators: Leading Index +0.3% to 102.2 vs. +0.5% expected, +0.7% in May (revised).
    • Coincident Index +0.2% vs. +0.3% prior.
    • Lagging Index +0.5% vs. +0.3% prior (revised).

  213. Earnings day excitement over SodaStream?

    Yesterday, 09:48 AM ET · SODA

    • SodaStream (SODA +0.4%) will release Q2 results on July 30 in what could mark a critical development in the bull vs. bear debate over the home beverage stock.
    • Though KeyBanc warned yesterday that SodaStream under-performed in the U.S. during the period, an announcement from the company on a grocery retail expansion or new partnership could stir up some buying action.

  214. Amazon launches e-book service; some big titles offered

    Yesterday, 09:37 AM ET · AMZN

    • Following a recent test, Amazon (NASDAQ:AMZN) has officially launched its Kindle Unlimited e-book subscription service. The service provides access to 600K+ e-books and 2K+ audiobooks for $10/month, and also a free 3-month subscription to Audible’s audiobook service.
    • As previously noted, many major titles from top-5 publishers aren’t included. But some popular titles, such as the Lord of the Rings novels and The Hunger Games, are included, as are many classic titles and reference books.
    • For now, the service, which aims to offset slowing sales growth for individual e-book titles, is only available in the U.S.

  215. More on Honeywell’s Q2

    Yesterday, 08:51 AM ET · HON

    • Total Honeywell (NYSE:HON) sales rose 6% Y/Y to 10.3B, bringing up operating income margin 110 bps to 15.4% from 14.3%.
    • Cash flow from operations climbed 7% Y/Y to 1.3B, with a free cash flow of $1.1B rising 5% Y/Y.
    • The company lowered its full-year sales guidance to $40.2B-$40.4B from $40.3-$40.7B, a drop of 3-4%, but increased its EPS expectations 10-12% to a full-year target of $5.45-$5.55.
    • Segment performance: Aerospace sales of $3B were flat Y/Y driven by 1% commercial sales growth and offset by a 1% decline in defense & space.
    • Automation and control solution sales were up 10% reported, 3% organic Y/Y, propelled by the favorable impact of acquisitions net of divestitures and growth in energy, safety, and security.
    • Performance materials and technologies sales rose 6% Y/Y due to UOP catalyst and gas processing growth and higher sales in advanced materials.
    • Transportation systems sales increased 8% reported, 4% organic Y/Y pushed by continued growth from new platform launches, higher global automotive production, and increased commercial vehicle demand in Europe.
    • Q2 results

  216. Sinopec’s Fuling verified as China’s first large shale gas play

    Yesterday, 08:16 AM ET · SNP

    • The Chinese government verifies shale gas reserves in Sinopec’s (NYSE:SNP) Fuling field in the southwest of the country, with production from 29 test wells averaging 3.2M cm/day, signaling the official launch of the commercial development of China’s first large shale gas field.
    • “Fuling proves to be a high quality marine shale gas reserve,” according to the Ministry of Land and Resources, which verifies proven reserves of nearly 107B cm and adds that the gas contains as much as 98% methane, with low levels of carbon dioxide and no hydrogen sulphide.
    • Estimates for China’s reserves easily outweigh those of the U.S., but Chinese reserves are in many cases more difficult to access than shale gas in the U.S., and China lags in the expertise needed to develop them.

  217. BNY Mellon profit slides but beats estimates

    Yesterday, 07:57 AM ET · BK

    • Bank of New York Mellon’s (NYSE:BK) Q2 earnings tumbled 32% Y/Y, weighed by lower fees and $0.14/share in charges related to investment management funds and severance, but adjusted EPS beat expectations.
    • Assets under management jumped 15% Y/Y to $1.64T.
    • Assets under custody and administration rose 9% Y/Y and 2% Q/Q to $28.5T, driven by higher market values, the impact of a weaker U.S. dollar and net new business.
    • Investment services fees totaled $1.7B, down 1% Y/Y and up 1% Q/Q, reflecting lower revenue from corporate trust and depositary receipts.
    • Net interest revenue and the net interest margin were $719M and 0.98% vs. $757M and 1.15% in the year-ago quarter and $728M and 1.05% in Q1 2014.
    • The provision for credit losses was a credit of $12M as improvement in the credit quality of the loan portfolio continues; the provision for credit losses was a credit of $19M in year-ago quarter and a credit of $18M in Q1 2014.

  218. 20th Century Fox passes $3B global box mark

    Yesterday, 07:31 AM ET · FOXA

    • 20th Fox Studio passes the $3B mark in box office receipts for the only second time in its history as the 21st Century Fox (NASDAQ:FOXA) property remains the top Hollywood studio of 2014.
    • The last time Fox toppled the $3B mark it leaned on mega-hit Avatar, but this time around six separate movies are over the $150M level already.

  219. More on GE’s Q2; Alstom deal to add to earnings in 2015, 2016

    Yesterday, 07:27 AM ET · GE

    • GE (NYSE:GE) reports increased Q2 operating earnings of $3.9B, translating to an operating EPS of $0.39, up 8% Y/Y. GAAP earnings from continuing operations were $3.6B, with an EPS of $0.35, up 13% Y/Y. Including the effects of discontinued operations, Q2 net earnings were $3.5B vs. $3.1B Y/Y.
    • Revenues rose 3% Y/Y to $36.2B. Growth market revenues grew 6% Q/Q, and growth market orders rose 14% Q/Q – increasing in six of nine growth regions. Services revenues were up 5% Q/Q, and services orders rose 14% Q/Q.
    • Industrial sales of $26.2B climbed 7% Y/Y. GECC revenues decreased 6% to $10.2B Y/Y. Industrial segment profits increased 9% Q/Q to $4.2B.
    • Industrial segment revenues were up 7%, with organic growth of 5%. Cash generated from operating activities year-to-date totaled $3.4B and cash generated from industrial operating activities posted $2B.
    • GE is expecting its deal with Alstom (OTCPK:ALSMY) to close in 2015. The company expects the acquisition be accretive to earnings in 2015 and add $0.06 to $0.09 per share in 2016, helping GE’s portfolio strategy achieve 75% of earnings from its industrial business by 2016.
    • GE +1.1% premarket. Q2 results.

  220. Toyota to sell fuel cell vehicle

    Yesterday, 03:12 AM ET · TM

    • After its great success with hybrid vehicles, Toyota (NYSE:TM) is now moving into the hydrogen fuel cell arena by selling its new car with the technology before April of next year.
    • The model’s list price is about ¥7M ($70k), but with factoring in subsidies and tax breaks the vehicle will sell for about ¥5M ($50k).
    • With a single hydrogen fueling, the planned fuel cells can take the new vehicle almost 430 miles.

  221. GM General Counsel grilled at the Senate

    Yesterday, 02:31 AM ET · GM

    • GM (NYSE:GM) General Counsel Mike Millikin testified at the Senate yesterday stating he did receive the four warnings from lawyers regarding the crashes involving stalled vehicles between October 2010 and April 2013 but did not alert GM’s board or securities regulators to the potential liabilities.
    • “I think the failure of this legal department is stunning,” Senator Claire McCaskill replied. “I don’t get how you and Lucy Clark Dougherty still have your jobs.”
    • CEO Mary Barra defended Millikin stating lower-down members of his department had failed to inform him to the scale of the problems and to the warnings the company had received from external lawyers.

  222. Blackstone, KKR, TPG in talks to settle lawsuit

    Yesterday, 02:00 AM ET · BX

    • The buyout collusion lawsuit continues, as Blackstone (NYSE:BX), KKR (NYSE:KKR) and TPG Capital now enter talks to settle the LBO court case filed against them and eight other PE firms for conspiring not to jump each others bids after buyouts were announced. The trial is scheduled for November 3.
    • Previously, Lake Partners, Bain Capital and Goldman Sachs’ private equity arm all agreed to multi-million dollar settlements after being charged of colluding in deals prior to the financial crisis.

  223. Facebook tests Buy button, gives celebrities their own app

    Yesterday, 01:08 AM ET · FB

    • In a move that could boost the company’s e-commerce monetization in time, Facebook (NASDAQ:FB) is giving merchants the option to embed a “Buy” button within news feed ads and Page posts.
    • Clicking on the button allows users to buy a promoted item without leaving Facebook’s site, and to save the payment info they provide for future purchases. The feature is being tested out with a handful of U.S. SMBs. Facebook isn’t charging a transaction fee for now, but is open to doing so down the line.
    • While Facebook does plenty of business with e-commerce advertisers – Nanigans’ Q2 numbers drive this home – users have until now had to leave Facebook to finish a transaction (virtual goods purchases excepted). If on-site purchasing improves conversion rates, Facebook can benefit either directly (by charging a fee) or indirectly (by charging higher ad prices).
    • Separately, Facebook has rolled out Mentions, a new app meant to help verified public figures interact better with their Facebook fans.
    • Facebook and Twitter have been battling for celebrity support for years. Each platform has its strengths: Twitter has been better at fostering conversations with fans, and Facebook has been better at getting out celebrity messages that require more than 140 characters.
    • Previous: Facebook launches payments auto-fill tool to improve ad data

  224. FedEx hit with criminal charges over pharmacy shipments

    Thu, Jul 17 · FDX

    • A grand jury has indicted FedEx (NYSE:FDX) on several criminal charges related to shipments it made for illegal online pharmacies.
    • The charges stem from a DOJ investigation, and include conspiracy to distribute controlled substances. FedEx says it believes its employees acted in good faith, and did nothing illegal.
    • UPS paid $40M last year to avoid similar charges.

  225. Seagate narrows AH losses after providing guidance

    Thu, Jul 17 · STX

    • At one point down over 4% AH due to its FQ4 revenue miss, Seagate (NASDAQ:STX) is down just 0.7% after guiding on its CC for FQ1 revenue of at least $3.55B. That’s slightly better than a $3.54B consensus.
    • Seagate estimates the total addressable market (TAM) for hard drives was 133M-136M units in FQ4, roughly in-line with guidance. The company estimates its share slipped to ~39% from 40% in FQ3 and a year ago. Average drive capacity +3% Q/Q and +11% Y/Y to 945GB.
    • FQ4 gross margin was 28.5%, flat Q/Q and +50 bps Y/Y. Opex +10% Y/Y to $509M. Just $26M was spent on buybacks.
    • Enterprise drive shipments (higher-margin) -10% Y/Y to 7.4M. Desktop drives -2% to 18.6M, notebooks +4% to 16.8M, consumer electronics -16% to 5.1M, branded drives (also high-margin) flat at 4.8M.
    • Free cash flow was $446M in FQ4, and $2B in FY14.
    • FQ4 results, PR, earnings slides (.pdf)

  226. Google CC touches on ad prices, PLAs, Fiber, offshore cash

    Thu, Jul 17 · GOOG

    • Focus on Google’s (NASDAQ:GOOG) Y/Y cost per click (NYSE:CPC) figures rather than “noisy” Q/Q figures, says departing sales chief Nikesh Arora on the CC. The Y/Y numbers show moderating declines (-6% in Q2, -9% in Q1), as Google takes steps to boost mobile ad prices and grow demand for product listing ads (PLAs).
    • Arora also states Google has initiatives afoot to improve CPCs in international/emerging markets, where they tend to be well below U.S. levels (Facebook can relate). Demographics/income levels are responsible for part of the gap.
    • Other CC remarks: 1) Google is working with 34 cities on Fiber requirements, and has achieved major cost reductions. More Fiber announcements will arrive later in 2014. 2) PLAs are driving 3x as much traffic as a year ago. 3) ~60% of Google’s cash ($61.2B at the end of Q2) is offshore. 4) Google still thinks mobile ad CPCs will eventually exceed PC CPCs, thanks to their ability to use location data and drive local/offline commerce.
    • CC live blogs: I, II
    • GOOG +1.2% AH. Q1 results, details.

  227. Cheniere Energy, Electricite de France sign 20-year LNG deal

    Thu, Jul 17 · LNG

    • Cheniere Energy (NYSEMKT:LNG) signs another liquefied natural gas supply agreement for its export facility being developed in Corpus Christi, Tex.
    • Electricite de France (OTC:ECIFF) agrees to purchase 380K metric tons/year of LNG upon commencement of operations of Train 2 of the export facility and more than doubling to ~770K metric tons/year upon the start of operations of Train 3.
    • The Corpus Christi liquefaction project is being designed and permitted for up to three trains, with aggregate design production capacity of 13.5M metric tons/year of LNG.

  228. 15 Facts About Dubai That Will Blow Your Mind

  229. Visa, MasterCard lose ruling versus retailers over credit card fees

  230. Goldman Slams Abenomics; Questions “Validity Of BoJ’s Target”

  231. Apple now mass-producing iPhone 6 ahead of fall launch

  232. Don’t Sell a Product, Sell a Whole New Way of Thinking

  233. Another Billion-Dollar US Company Just Moved Across The Pond

  234. Higher Commercial Airplane Deliveries Will Likely Lift Boeing’s Results Despite Weak U.S. Defense Spending

  235. Wage Watch: Los Angeles joins the push for $15 minimum wage

  236. Here’s Twitter’s New Plan To Deal With Questions About Its Slowing User Growth

  237. New San Francisco billboard warns workers they’ll be replaced by iPads if they demand a fair wage | PandoDaily

  238. Airbus files patent for plane saddle seats

  239. Airlines pocket $31.5 billion in fees, a 1,200% increase in six years

  240. States with Better ‘Business Climates’ Also Have Higher Inequality

  241. States with Better ‘Business Climates’ Also Have Higher Inequality

  242. How Crumbs was able to lay off all its workers in one fell swoop

  243. BLACKROCK: It’s Too Soon For Investors To Restructure Their Portfolios Around Inflation

  244. 60-Shot Frappuccino Breaks Record for Most Expensive Starbucks Drink

  245. Visa Launches PayPal-Like ‘Checkout’ Widget For Third-Party Websites

  246. CARL ICAHN: ‘We’re Going To Have Morons’ Running American Companies

  247. Researchers: Persistent drought in California had idled huge swaths of rich farmland

  248. Intel made more than half a billion dollars from the “internet of things” last quarter

  249. 5-500%  / Phil


    I´m planning 2 portfolios of 50K each for my sons, a kind of "buy and forget"  15 years operation, I delayed it because we are in the top of the curve, waiting for a better entry level price, in my watchlist is LNG, DE,  but could appreciate  your comments and other forum members.

  250. Not much going on until Thursday!

  251. Chart of the Day

    Today's chart illustrates the price to earnings ratio (PE ratio) from 1900 to present. Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s), surged even higher during the dot-com bust (early 2000s), and spiked to extraordinary levels during the financial crisis (late 2000s). For nearly three years now, the PE ratio has been generally trending higher and is currently very near the 20 threshold.

  252. Phil/Hedging – I'm currently holding 200 12/20 2015 TZA spreads, partially offset by 100 short $12 2015 Puts, currently showing $25k in gains.  This is my main portfolio hedge, on a $1.4M+ portfolio.  I want to lock in gains, but don't want to leave myself uncovered.  I'm contemplating rolling up the long calls to the $16s, and roll the short calls up to the $23s or so.  This will pull about $37k off the table, and will give me $124k in additional protection if the market keeps going down. I will also probably buy back the short puts, and wait for a rally to re-sell them.  Or should I switch horses entirely, because small caps are more depressed than the QQQ or DIA?  I'm concerned with valuations, and what will happen when the fed ends QE later this year.

  253. Advill – That makes so much sense. On a one year horizon, it's hard to predict returns, but on a 5 year horizon, you can generally bet on a return to average:


  254. Pets' amenities rising trend for homebuilders

    “The most lavish suite is a 170-square-foot pet paradise with a step-in wash station, handheld sprayer and leash lead; tile walls and floors; a designated drying area with a commercial sized pet dryer; a water station; automated feeders; a large bunk-style bed; cabinets for toys, treats and food; a stackable washer and dryer; a French door that opens to a puppy run; and a flat-screen television set.”

  255. Phil, what do you think of AVD? They see a better 2015 and I think they might be getting close to sold out here…

  256. From Bloomberg, Jul 20, 2014, 7:13:53 PM

    July 21 (Bloomberg) –- John McGraw Aerospace Consulting Founder & President John McGraw discusses the investigation into the downing of Malaysia Airlines flight MH17 and the problems investigators are facing at the crash site. He speaks to Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Russian President Vladimir Putin is facing intensified international pressure to respond to U.S. and Ukrainian claims that flight MH17 was downed using a missile system supplied by his nation’s military.

    To read the entire article, go to

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

  257. From Bloomberg, Jul 20, 2014, 6:00:01 PM

    An armed pro-Russian separatist stands guard in front of the crash site of Malaysian Airlines Flight 17, near the village of Grabove, Ukarine, on July 20, 2014. Photographer: Bulent Kilic/AFP via Getty Images

    European leaders vented their
    outrage at the shooting down of a passenger jet over territory
    held by Ukraine’s rebels and at Russian President Vladimir Putin
    for frustrating the investigation. Translating that anger into
    action is another matter.

    To read the entire article, go to

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

  258. From Bloomberg, Jul 20, 2014, 4:07:50 PM

    A Paramedic team and few journalists access the Shujaya neighborhood of Gaza during a two-hour humanitarian ceasefire proposal from the International Committee of the Red Cross, on July 20, 2014. Photographer: Ashraf Amra/Anadolu Agency via Getty Images

    Israel’s ground offensive in Gaza entered its bloodiest phase yet as militants killed 13 soldiers and fighting in one neighborhood claimed the lives of at least sixty Palestinians.

    To read the entire article, go to

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

  259. From Bloomberg, Jul 17, 2014, 9:25:18 PM

    People’s Liberation Army navy ship Haikou and two smaller boats are shown in the Pacific Ocean off Hawaii during Rim of the Pacific exercises. Photographer: Audrey McAvoy/AP Photo

    After 43 years of watching the world’s largest multinational naval exercises take place off Hawaii, China has the second-largest fleet at the U.S.-led drills this year, offering it a step toward the great-power parity it seeks in the Pacific.

    To read the entire article, go to

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

  260. From Bloomberg, Jul 20, 2014, 5:00:00 PM

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

    Chinese brokerages, undeterred by the worst performance among the world’s major stock markets, are seeking to raise more than $6.2 billion from initial public offerings as capital constraints squeeze their operations.

    To read the entire article, go to

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

  261. From Bloomberg, Jul 20, 2014, 10:10:54 AM

    Gilead Sciences Inc.’s (GILD) Solvadi,
    controversial because of its price, helps cure hepatitis C in
    people with HIV, according to researchers who say the drug has
    the potential to limit a top cause of death in these patients.

    To read the entire article, go to

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

  262. From Bloomberg, Jul 20, 2014, 7:00:00 PM

    Almost half of all finance
    professionals expect bonuses to be smaller this year, if they
    get one at all, according to a Bloomberg Global Poll.

    To read the entire article, go to

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

  263. From Bloomberg, Jul 20, 2014, 7:01:00 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’s 21st Century Fox
    Inc. (FOXA)
    is considering using proceeds from the sale of its Italian
    and German pay-TV assets to boost its offer for Time Warner
    Inc. (TWX)
    , according to two people familiar with the matter.

    To read the entire article, go to

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

  264. From Bloomberg, Jul 20, 2014, 9:01:43 PM

    Most Asian stocks rose, joining a
    global rebound after the downing of a passenger jet in Ukraine
    and Israel’s invasion of Gaza roiled markets. Oil slipped a
    second day while New Zealand’s dollar rose after its biggest
    weekly drop since January.

    To read the entire article, go to

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

  265. From Bloomberg, Jul 20, 2014, 12:01:00 PM

    Pedestrians walk past a branch of Postal Savings Bank of China in Yichang city, central Chinas Hubei province. Photograph: Imaginechina via AP Images

    China will revive mortgage-backed debt sales this week after a six-year hiatus, as the government extends help to homebuyers in a flagging property market.

    To read the entire article, go to

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

  266. From Bloomberg, Jul 20, 2014, 4:00:00 PM

    Just a month after lifting its call
    on Russia stocks to buy, JPMorgan Chase & Co. reversed course,
    telling investors to sell as the market plunged after the U.S.
    imposed more sanctions and an attack on a civilian jet deepened
    tensions in Ukraine.

    To read the entire article, go to

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

  267. From Bloomberg, Jul 20, 2014, 7:00:00 PM

    U.K. prosecutors are preparing to
    open a criminal investigation into alleged manipulation of
    foreign-exchange benchmarks, a person with knowledge of the
    matter said.

    To read the entire article, go to

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

  268. From Bloomberg, Jul 20, 2014, 4:00:01 PM

    Russia’s President Vladimir Putin, a 61-year-old former KGB colonel, is bolstered by a surge in his popularity since he annexed the Black Sea peninsula of Crimea from Ukraine in March to a near record of 86 percent, according to Moscow’s independent Levada Center. Photographer: Alexei Nikolsky/Ria-Novosti/Pool/AFP via Getty Images

    Russia’s richest businessmen are
    increasingly frantic that President Vladimir Putin’s policies in
    Ukraine will lead to crippling sanctions and are too scared of
    reprisal to say so publicly, billionaires and analysts said.

    To read the entire article, go to

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

  269. From Bloomberg, Jul 20, 2014, 7:01:00 PM

    Credit Suisse Chief Executive Officer Brady Dougan, 54, said he expected “very little impact” on the bank’s business after its main Swiss unit, Credit Suisse AG, became the first global lender in a decade to admit to a crime in the U.S. and agreed to pay $2.6 billion. Photographer: Andrew Harrer/Bloomberg

    Credit Suisse Group AG (CSGN) is poised to
    report its biggest quarterly loss since the collapse of Lehman
    Brothers Holdings Inc. after being fined $2.6 billion for
    helping American clients evade taxes.

    To read the entire article, go to

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

  270. From Bloomberg, Jul 20, 2014, 7:01:00 PM

    Source: Biwa Studio

    Dark pools and high-frequency traders, two elements of the electronic U.S. stock market whose rise has been decried in books and Congress, are finding little support among financial professionals.

    To read the entire article, go to

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

  271. From Bloomberg, Jul 20, 2014, 4:00:00 PM

    Hedge funds cut bets on a gold rally
    for the first time in six weeks as prices snapped the longest
    stretch of gains since August 2011.

    To read the entire article, go to

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

  272. From Bloomberg, Jul 20, 2014, 5:00:01 PM

    July 20 (Bloomberg) — Ukrainian Prime Minister Arseniy Yatsenyuk talks with Bloomberg’s Ryan Chilcote about the country’s trade relationship with Russia and the impact on its economy.
    They spoke on July 18. (Excerpts. Source: Bloomberg)

    Ukraine, already facing recession,
    may see its economy shrinking by as much as 2 percentage points
    more should Russia halt trade as a conflict widens between the
    two ex-Soviet partners, Premier Arseniy Yatsenyuk said.

    To read the entire article, go to

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

  273. From Bloomberg, Jul 20, 2014, 7:01:00 PM

    Britain’s years of famine may be

    To read the entire article, go to

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

  274. From Bloomberg, Jul 20, 2014, 7:01:00 PM

    Asking prices for London property
    fell for a second month in July as an increase in the number of
    homes for sale softened the market for sellers, Rightmove Plc

    To read the entire article, go to

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

  275. From Bloomberg, Jul 20, 2014, 9:00:01 PM

    If you’re concerned that the Federal Reserve will derail the bond market when it finally starts raising interest rates, the last two tightening cycles suggest those worries may be overblown.

    To read the entire article, go to

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

  276. From Bloomberg, Jul 18, 2014, 7:01:00 PM

    The number of first-time U.K. home
    buyers rose to a seven-year high in the first half of 2014,
    according to a Halifax report that showed new homeowners spend
    about a third of their disposable income on mortgage payments.

    To read the entire article, go to

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


    The deficit scolds are still going at it, even though the whole panic turned out to be a false alarm.


    How we treat 57,000 helpless children will reveal what kind of people we are.


    What do fame, wealth and lots of sex bring? Exactly the opposite of what you think.


    Millions of Americans are receiving auto loans they cannot possibly afford, in a lending climate marked by some of the same lack of caution seen in the housing industry before its 2008 implosion.


    A jury in Florida awarded a staggering $23 billion judgment against R. J. Reynolds, the country’s second-largest tobacco company, for causing the death of a smoker who died of lung cancer at the age of 36.


    In a recent five-year study of mutual funds, consistently strong performance was found to be remarkably rare.

  283. Notable earnings before Monday’s open

    05:30 PM ET · AGN

  284. Notable earnings after Monday’s close

    05:35 PM ET · BRO

  285. UBS lists six stocks with positive catalysts coming soon

    Yesterday, 08:25 AM ET · ANF

    • The derivatives research team at UBS lists six companies on which investors should not use an option strategy, as it expects near-term catalysts to drive the stocks higher.
    • Abercrombie & Fitch (NYSE:ANF): UBS cites continuing share repurchases, leaner inventory and improving fashion offerings as possible catalysts.
    • Air Products (NYSE:APD): Don’t overwrite or hedge the stock for 60 days, UBS says, as it sees activist investors becoming more aggressive in the name over the next two months.
    • PetSmart (NASDAQ:PETM): Activist pressure to unlock value has stepped up, and the company is talking with Wall Street banks for possible strategies.
    • Tesla (NASDAQ:TSLA): The UBS team says the possibility of a Gigafactory announcement could boost the stock, which has long been volatile.
    • Teva Pharma (NYSE:TEVA): It is well positioned to take advantage of the high number of branded drugs going off-patent in coming years, and there’s no way UBS is hedging the stock with M&A rampant in the sector.
    • Weyerhaeuser (NYSE:WY): UBS expects volatility after it completes a corporate structural change, and an expected capital allocation announcement could prove to be a catalyst.

  286. Chinese probe into PetroChina’s Canadian operations deepens

    Fri, Jul 18 · PTR

    • A corruption probe in China reaches deeper into PetroChina’s (NYSE:PTR) operations in Canada’s oil industry, as a fourth high-ranking company official involved in oil sands deals is now believed to be under investigation.
    • The first three of the executives had frequent dealings with Athabasca Oil (OTCPK:ATHOF), which partnered with PTR in 2010 in a $5B joint venture to develop the MacKay River and Dover oil sands projects.
    • Athabasca is awaiting a $1.23B payment from PTR after it exercised an option to sell its remaining 40% of the Dover project, and ATHOF investors are nervous that PTR will not honor the payment, which was expected by the end of June.

  287. StJ's chart missed the most important names…  I assume they aren't the "largest".

    CMG NFLX HAL on Monday.

  288. Good morning!  

    Big earnings week with 25% of the S&P reporting.  Tricky because we've had such a short run-up into what is already the meat of the season.  

    Asia closed at the lows but Nikkei down 1%, both Chinas down 2.5%, India up 0.5% and Singapore up 0.1% doesn't look bad.  

    Europe fell sharply from the open and bouncing a bit into lunch but Dax down 0.7%, FTSE down 0.25%, France down 0.4%, Italy down 0.9% and Spain down 0.4% is not too pretty.  Russia leading things down at 1.25% with a UN Security Council meeting today in which more sanctions may be issued.  

    Europe Stocks Fall With Russia, Commodites; Rupiah Gains

    European Stocks Decline as Investors Weigh EarningsSpeculators Cutting Bullish Oil Bets Miss Ukraine Rally

    Tesco Replaces Clarke as CEO as Grocer Warns on Profit Again

    Brent Steady as Supply Seen Safe Amid Russia Standoff; WTI Falls

    Air Force Examines Anomalies as Musk’s SpaceX Seeks Work - In a written statement to Durbin’s panel after a March hearing, SpaceX said previous mission anomalies had been resolved. It didn’t identify the causes, which it said were “proprietary.”

    That last one is just typical of Musk operations, it seems.  Speaking of which, SCTY getting back near $70, where they make a good short.

    Our Futures are barely down so far.  Oil $103.17 on /CLQ4 (Aug) and $102.04 on /CLU4 (Sept) and that's a ridiculous spread so I like the short and we did just get a $103.50 entry on /CLQ4  but you can still play /CLU4 below the $102 line with tight stops above.  

  289. The Dollar is at 80.63, gold $1,314, silver $20.99, copper $3.18, nat gas $3.87 and gasoline $2.87 (no demand for gas but oil is high?).

    If you think I'm getting fed up with the idiotic market moves, listen to Dave Fry's comments:

    If you tried, you couldn’t make the last two days up.

    7-18-2014 5-47-18 PM SHOW

    You could call it "casino-like" and that would be apt but this is my "go-to" image to pull out whenever things go nuts.

    That’s what we saw the past two days.

    First a major decline on Thursday caught and executed many resting stops. Once those were washed-out those that could found whatever excuse was available to buy that dip. And, buy they did completely reversing many previous losses. Hell, even the Israeli ETF (EIS) rallied!

    As we pointed out with Thursday’s trusty McClellan Oscillator, markets were short-term oversold so a rally could well have been expected. But like this? Not a chance. Below is the NYMO reading from yesterday showing markets oversold. When you scroll down towards the end of the article you’ll note how much the NYMO changed for the day.

    Everything reversed course Friday. (And, come to think of it, this would mark the 11th Friday in a row stocks rallied.) Bond prices fell as did crude oil and metals all of which were higher Thursday.

    I’d feel sorry for investors who may have had their stops filled on Thursday only to see markets rally right back on what some bulls believe to be a one day event. However, this type of action is synonymous with markets that are fragile as market tops near. While some may disagree we saw this kind of volatility toward the final few months of the dotcom period. These aren’t normal conditions certainly.

    Economic data Friday wasn’t good frankly. Consumer Sentiment fell to 81.3 vs 83 expected & prior 82.5 and Leading Indicators fell to 0.3% vs 0.5% expected & prior 0.7%. (It must be the Polar Vortex eh?)





















  290. GILD/Burr – With the "cure" for Hep C, I think they have to be a good bet, though the pricing of the drug is a huge issue.  The Jan $65/80 spreads are in the money with about $4 more to gain, not much to change there, the 2016s are more ambitious but, as you note, on track so why not take the money and run on 1,300 shares so you're not overcommitted on the downside.  If it makes you feel better about getting out, you can get more aggressive on the 13 short puts you have, moving to the 2016 $82.50 puts at $9.75, that's still giving you 10% upside from here as if you sold the stock but putting that $91K in your pocket and giving you a 20% downside cushion before you are reassigned.  If GILD pops $90 and looks good, you can always add a few more 2016 spreads or just roll the short $90s up to the $100s for net $4.

    CORN/Rdn, Hex – Corn hit lows again over the weekend, in total free-fall due to less ethanol, less corn-syrup drinks and less cattle and hogs to consume it.  Not likely to turn around quickly.  We have always had corn coming out of our asses in this country and so we stuff our kids full of it for breakfast and make sugar out of it and put it in our cars and cook with corn oil (even though its horrible for you), etc.  We have barbeque corn every weekend because the supermarkets by my house always have piles of it right by the door – they can't give the stuff away.  

    Buy and forget/Advill – LNG is more speculative, not really "buy and forget".  If you are looking long-term, why not go conservative with dividend-payers?  

    PFE is $30.73 and pays a $1.04 dividend and you can sell the 2016 $28 puts and calls for $4.60 for net $26.13/27.07 which means, over 18 months, you collect $1.56 in dividends and, if called away at $28, another $1.87, which doesn't sound like much but it's 13% (8.5% annual) and 13% for 15 years is $37,236 on $10,452 (400 shares).  If you can make an average of 18% per year (of your $10K) by making a conservative investment like this – why screw around?  

    RRD is on our buy list and also pays a $1.04 dividend but the stock is only $16.21.  The 2016 $17 calls are fetching $1.12 and the $13 puts are $1.45 so selling those nets you in for $13.64/13.32 which means the $1.56 you collect there, by itself, is 11.4% and another 25% if called away over $17 is 36.4% in 18 months and call that 24% a year which turns $6,820 invested in 500 shares into $240,888.  Again, WTF are you doing with LNG when you can do this instead?  

    WEN is also on the Buy List and down at $8.28 pays a .20 dividend.  You can sell 2016 $7 calls for $1.90 and the $7 puts for .75 for net $5.63/6.32 and, if called away at $7, you get $1.37 + the .30 dividend is $1.67 is 29.6% so call it 20% annual and $5,630 on 1,000 shares at 20% over 15 years is $110,320

    So there's 3 examples that use just $22,902 to get $388,444 back in 15 years and you still have 3/4 of your buying power on the sidelines to take advantage of dips or other opportunities along the way.  If you are setting up 2 portfolios for 2 kids (I wouldn't as I'd rather have portfolio margin on $100K without the hassle of switching portfolios back and forth) then I'd diversify with different positions in each – so less eggs in one basket.  

    Jackie just bought more ARO for herself after talking to people at the outlet mall who told her more than they probably should have about the relaunch (next week).   They are getting in all new lines and getting kids excited by sending out "event" invitations on social media and Jackie and all her friends seem to like the stuff there.  Our trade idea from 7/14 was:

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

    They haven't moved much but I think they might so I'm reiterating my love for this trade.

    Big Chart – We have to respect those moves but also watch the RUT very closely under that 50 dma.  Once they clear that, it's game on for bulls again – until the next drop.

    P/Es/StJ – As you know, I advocate throwing out the dot com bubble as well as 2008.  Especially 2008 because investors didn't INTENTIONALLY buy stocks with gigantic p/es – it just turned out that all the earnings estimates were total BS and the banks and builders that people thought were making Billions were actually losing Trillions.  I wouldn't really count fraud as "investor enthusiasm".  

    Hedging/Palotay – That's a lot of TZA!  You risk owning $120,000 worth of it at $12, which is down 20% from here or up 7% on the RUT to 1,230 – just make sure that's your intention.  Since you sold the Jan $20s and they are still $1.35, not much to do there but you can take $1 off the table ($20,000) by rolling up the Jan $12s to the $14s and you'd still have a $6 spread that's $1.37 in the money.  Since $6 x 200 spreads is $120,000, I don't see the point of rolling up the $20s.  The 100 short Jan $12 puts are .70 = $7,000 but you can sell 2 ISRG 2016 $340 puts for $37 instead and that's $7,400 with a $68,000 obligation – almost half of the TZA obligation and wouldn't you rather own 200 shares of ISRG than 10,000 shares of TZA?  Obviously, any stock on the buy list would do but selling a put on a stock you don't mind having in your portfolio instead of TZA is another good way to take some of the risk off the table on a pure TZA play.  

    Don't forget, the market is VERY unlikely to drop more than 10% in a day so the cash on the sidelines will allow you to press those bets if something so catastrophic happens that 10% downside protection seems inadequate.  Also, you probably won't leave all $1.4M invested on a 10% correction, so you won't need the same downside protection.  Spreads like this are to protect you from the unexpected – you don't need to hedge as if you will never be able to make an adjustment again.  

    Pets/Diamond – Wow, the rich have WAY too much money!  

    AVD/Bdon – Nice niche player but I don't follow them.  Zacks does not like them but they are pumped up in Seeking Alpha:

    What Makes American Vanguard (AVD) a Strong Sell?

    Given those choices – I'd go with Zacks!  In general, if you go to Yahoo Financial and see that most of the news on a stock comes from Business Wire (a PR service) and most of the "analysts" commentary comes from Seeking Alpha and Motley Fool, then it's a stock to avoid as, more likely than not, it's just a trading vehicle (at best) or possibly a pump and dump scheme.

    That's not saying the company itself is evil, companies can't help what the manipulators do with their stock but AVD is only 16% owned by the insiders these days with 5% of that with the CEO.  It's a low-margin business at the best of times and they have no cash, which is scary and they've doubled debt since last year while A/R jumped 33%, probably on their customers unable to pay due to the drought.  Bottom line is they burned $32M last year and they only have $8M left.  Earnings are today, I certainly would wait and see what they have to say in the CC but not much I see that makes a quick turnaround likely.  

    NFLX/Burr – Finally!  

  291. /CL/Phil

    TOS rejects any attempt to sell the August contract saying "please use Active month".  I know they want you to be out of any August contracts by the end of the day because the contract expires tomorrow, but do they usually prevent any new orders the day before expiration as well?  I have always avoided trading the front month this close to expiration, but the spread is just too ridiculous.  Is anyone else having the same problem?  The September contract is unlikely to be anywhere near as much fun so perhaps there is an ETF/options alternative?

  292. I had some trouble with TOS and the august oil futures last Friday. I was able to get around it by not relying on the drop down. I erased what comes up and typed in /CLQ4 and hit enter. This manual entry worked for me. Good luck.