Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Monday Market Movement – Do We Ever Go Down?

breadth

We all go down for a piece of the moment
Watch another burn to the death to the core
And the roadshow thrills pack the freaks and the phonies
Sing: now is now, yeah! – Rob Zombie 

There is just no way to win betting against this market!  

Well, actually, there is one way and that's betting that each pop is nonsense and tends to have a subsequent pullback intra-day but, long-term, the cumulative effect of all that low-volume pumping has been a rousing success, to say the least.  

As you can see from Andy Thrasher's S&P chart, there has been some amazing underlying deterioration since the July 4th weekend with the Advance/Decline line falling back to trend and stocks above their 200-Day Moving Average dropping 15% in 3 weeks.  Stocks above the 200 DMA is a fantastic leading indicator for downside move – ignore it at your own risk. 

TNXPeople are panicking into bonds, dropping the 10-Year Yield 20%, from 3.1% to 2.45% this year but it doesn't matter because Central Banksters are pumping SO MUCH MONEY into the Global Markets that there's enough to buy all asset classes simultaneously – something that is unprecedented in Financial History – what could go wrong?

Well, one thing that could go wrong is you putting your money into Mutual Funds.  As it turns out, in an S&P study of actively managed Mutual Funds, only 2 (two) out of 2,862 actually beat the S&P over ANY of the fund's lifetimes (limited to 12 months or longer).  

That's even worse than the average performace of hedge funds, which only averaged a 0.59% annual loss when compared to just putting your money directly into the S&P.

 This dovetails with a conversation we were having this weekend in our Member Chat Room, where I identified 4 trade ideas for a $50,000 Portfolio that only used 1/4 of the buying power to generate $365,512 in projected profits over the next 15 years using CONSERVATIVE options strategies designed to MATCH the S&P, not beat it.  

Of course, those are nice, BORING, long-term investing strategies and they SHOULD be the core of your investing portfolio.  With shorter-term "fun" money, on the other hand, we use shorter-term leveraged trades like our "10 Trade Ideas that Could Make 500% in a Rising Market" that we went with in November, when we were still gung-ho bullish on the market.

It was a Members Only post at the time (sorry non-subscribers, but you can sign up HERE) and our trade ideas were:

  • ABX 2015 $13/18 bull call spread at $2.80, selling 2015 $15 puts for $2.05 for net .75, now $3.57 – up 376% (and up another 60% from our May 13th update)
  • 8 QQQ Jan 2014 $75/80 bull call spreads for $3 ($2,400), selling 1 ISRG 2015 $300 put for $23.50 ($2,350) for net $50, now net $3,240 - up 6,380% (and up another 24% since May)
  • HOV Jan 2015 $3/5 bull call spread at $1.25, selling $4 puts for .90 for net .35, now net $1.06 - up 202% (and up another 50% since May)
  • EWZ 2015 $44/49 bull call spread at $2.60, selling $35 puts for $1.95 for net .65, now net $2.95 - up 354% (and up another 44% since May)
  • CROX 2015 $12/17 bull call spread at $2, selling $12 puts for $1.90 for net .10, now net $2.25 - up 2,150% (and up another 7% since May)
  • 10 QQQ March $83/88 bull call spreads at $2.18 ($2,180), selling 1 AAPL 2015 $450 put (now 7 $64.29 puts) for $32.50 for a net $1,070 credit, now net $5,937 – up 554% (and up another 28% since May)
  • DDM April $105/115 bull call spread at $5, selling CAT 2016 $60 puts for $4 for net $1, now $7.47- up 647% (and up another 2% since May) 
  • 10 DBA 2016 $22/26 bull call spread at $1.20 ($1,200), selling 10 DBA 2016 $21 puts for .65 ($650) and 1 CAT 2016 $65 put for $515 for net $35, now net $2,500 – up 7,042% (and up another 35% since May) 
  • AAPL 2016 $450(now $64.29)/600(now $85.71) bull call spreads at $60, selling 2016 $400(now $57.14) puts for $35(now $5), now $18.90 - up 278% (and up another 114% since May)
  • T Jan 2015 $30/35 bull call spread at $2.50, selling $33 puts for $2.40 for net .10, now $3.75 –up 3,650% (and up another 9% since May)

So that's pretty easy, isn't it?  10 Trade Ideas that made an AVERAGE return of 2,163% on cash since Thanksgiving (call it 8 months) and 37% since May (2 months).  THAT is why we have been looking for cover plays lately – look what we have to protect!  At this point, those trades should now be cashed out as we have a new Buy Llist (Members Only, of course) and, as you can see, we've milked most of what we can out of them already.  

Don't worry, if you are too cheap to subscribe, we'll probably put out a report in 5 or 6 months of how our next 10 trades are doing (like our May update) and you still might be able to catch 30% picking up on our scraps.  

If we get a good week out of our indexes this week, with 25% of the S&P reporting their 2nd quarter earnings – we will certainly have 10 new trades lined up to take advantage of the continuing bull market so that, hopefully, we can make another 2,163% over the next 8 months.  You don't have to risk a big part of your portfolio when you are getting returns like that – just a little bit gives your overall performance a big boost.  

We're still skeptical and, in a large part, it's BECAUSE we did so ridiculously well on our 2014 picks already.  Money should not be this easy to make – the piper has to be paid eventually, and we've moved to mainly cash in an attempt to avoid getting caught up in a correction (if it ever comes).  

Our 4 new trade ideas from this morning's chat are a great way to get started but they aren't "going for it" trades – just sensible places to put some cash while we look at a few opportunites that are sure to come up after earnings.  

Where do you think we got those other 10 trades in November?  

 


Tags: , , , , , , , , , , , , , , , ,

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!


  1. Phil / 4 ideas for 50K 

    Thanks for that,  will analyse how to do it, my girl is a molecular biologist who barely understand the checkbook… she is simlply not interested, so your recommendations are good for 18 months and i will have to operate the account again, anyway very good recommendations thanks.


  2. Major Earnings for the Upcoming Week:

    Monday:

    A.M. – AGN, BBT, HAL, HAS, MAN, STI

    P.M. - BCC, CMG, NFLX, TXN, ZION

     

    Tuesday:

    A.M. – ACI, AMTD, BTU, KO, CMCSA, CS, DPZ, HOG, IR, KMB, LXK, LMT, MCD, MO, RF, STT, TRV, UTX, VZ

    P.M.-  AAPL, BRCM, DFS, EA, ISRG, JNPR, MSFT, UIS, VMW, XLNX

     

    Wednesday:

    A.M. – BIIB, BA, DALDOW, EMC, FCX, GD, JNS, NSC, NOC, OC, PEP, PX, RAI, SPG, TMO

    P.M. – ANGI, CA, CRUS, CTXS, FFIV, FB, FIO, GILD, MBFI, QCOM, RJF, T, TER, TEX, TSCO, TRIP

     

    Thursday:

    A.M. – BSX, BMY, COG, CAJ, CAT, CELG, CNX, DHI, DAN, DPS, DNKN, LLY, FGM, HSY, JBLU, KKR, NOK, NUE, POT, RTN, LUV, HOT, SVU,UAL, UA, UNP, USG

    P.M. – ALTR, AMZN, BIDU, ELY, CB, CLF, DECK, KLAC, NTGR, OLN, P, PFG, RVBD, SBUX, TSRO, UHS, VRSN

     

    Friday:

    A.M. – AON, COV, MCO, SWK, VTR, WHR, XRX

     

    Economic Releases (7/21-7/25):

    Monday:

    7:30 am CT – Chicago Fed Activity Index

                                                                                                                                                                                    

    Tuesday:

    6:30 am CT – NFIB Small Business Optimism Index

    6:45 am CT – GS Store Sales

    7:30 am CT– Consumer Price Index (CPI)

    8:00 am CT – FHFA House Price Index

    9:00 am CT – Existing Home Sales

    9:00 am CT – Richmond Fed Mfg. Index

                                                                                                                                                                                                                  

    Wednesday:

    6:00 am CT – MBA Purchase Applications

    9:30 am CT – Oil Inventories

     

    Thursday:

    7:30 am CT– Weekly Jobless Claims

    8:45 am CT– PMI Mfg. Index Flash

    9:00 am CT – New Home Sales

    9:30 am CT – Natural Gas Inventories

    10:00 am CT – Kansas City Fed Mfg. Index

                                                                                                                                                                                                            

    Friday:

    7:30 am CT – Durable Goods Orders


  3. Oil Lines

    R3 – 103.65
    R2 – 103.24
    R1 – 102.45
    PP – 102.05
    S1 – 101.26
    S2 – 100.86
    S3 – 100.07


  4. Good morning! 

    18 months/Advill – You'll find, with most of these buy/writes (artificial and otherwise), that more often than not you can just roll the short positions along for the next year or two whenever they expire.  Since they are mostly designed to give 20% downside protection and since the market USUALLY doesn't go up more than 10% a year, 80% of the time you end up in the range where you can comfortably roll and, after 5 rolls (8 years), when you have paid back your initial investment,  then you are collecting all profits each time and that's when the money really begins to compound fast.  

    I can't emphasize this enough for people because it seems dull and tedious to grind out 20% annual gains but the math of it is incredible and, as I've noted before, over long periods of time, NO ONE does better than 20% annual returns.  If they did, there would be Trillionaires all over the place!  

    Unless you are sure you're not going to live 5 more years – how can you not be satisfied with these returns off $100,000 compounded monthly at 20% a year?  Using options strategies, this is a realistic target for steady, consistent investing – but only if you avoid the urge to gamble on crap stocks and stay out of high-risk, high-reward trades that seem to suck people in like a bug zapper.  

    If you are under 50, all you should be worried about is 1) Where do I get that first $100,000? and 2) What's a sensible spread of stocks to put it in?  If you have $100,000 and you are under 60 – put your money in nice, safe(ish) investments that have a nice chance of making 20% returns (of course there is always some risk) and WORK on getting another $100,000 and double your investment that way.  

    Don't make it the responsibility of the first $100,000 to make you another $100,000 quickly – that's where people tend to screw up.  When you try to make 20%, you are risking 20% – there are no two ways about it.  When you try to make 40%, you risk losing 40%.  Getting knocked back to 80% is very easy to recover from but getting knocked back to 60% means it will take you 4 years of sensible investing just to get back to where you were.  When you look at the money you blow in the longer 4-year periods – how can you justify taking that kind of chance?  

    And there's no magic secret to why we can expect 20% annual returns, we're just BEING THE HOUSE!  The S&P averages 8% and all we have to do is sell 12% worth of options on top of the 8% expected returns (and not pick bad stocks, of course) and there's our 20% a year.  

    You could even apply this strategy to SPY, which is at $197.70, by selling 2016 $185 calls for $20.50 and $180 puts for $10 and that's net $167.20/173.60 so, if SPY drops 20% to $158.16, you are only down $15 (<10%) and if SPY is over $185, you gain $17.80, which is 10.6%.  SPY pays $3.60 in dividends so another $5.40 over 18 months is $23.20 on $167.20 = 13.8% or about 9% annual but you'll outperform the SPY over time by a pretty wide margin.  

    Of course, I'd rather go with BRK.B, since it's a pre-selected best version of SPY plus the private capital generation of the holdings.  BRK.B is $128.28 and you can sell the 2016 $120 calls for $16.50 and the $115 puts for $5.20 for net $106.58/110.79 so a nice 13.5% downside cushion and you make $13.42 if called away at $120 (12.5%).  There's no dividend but it's a rock-solid investment (like PFE this morning) which is where you park a nice chunk while using smaller allocations to chase yield. 

    Keep in mind that SPY or BRK.B take very little margin and that's key as it leaves you free to pick up extra cash over the same period by selling puts on something else you really want to buy.  For instance, if I committed $22,158 to owning 200 shares of BRK.B, I'd be looking forward to collecting $2,684 but the margin on the short $115 puts is just $2,500 and then the $21,316 of cash on the call spread is another $10,658 in ordinary margin so $13,342 margin leaves $9,000 to play with on this allocation and we could sell 5 CLF 2016 $13 puts for $2.90 ($1,450) and risk owning 500 x $13 = $6,500 and sell 10 HOV 2016 $4 puts for .65 for another $650 and risk owning $4,000 worth of HOV.  

    That puts $2,100 more in our pocket and that's another 10% of the same $22,000 allocation block!  


  5. How long with the N. Dakota oil boom continue:

    http://fivethirtyeight.com/features/north-dakotas-oil-bonanza-is-unsustainable/

    casselman-feature-northdakota-1

    There’s a practical limit to how long those gains can continue, however. Drilling efficiency — how many wells a rig can drill in a given period — has been essentially flat over the past year.2 The wells themselves, meanwhile, are getting better at least in part because companies are drilling longer “laterals,” the sections of wells that run horizontally through the shale rock. In 2007, the average well in North Dakota was about 17,000 feet long (including both the vertical and horizontal portions); in 2013, the average well was nearly 20,000 feet long. But that rate of growth, too, is slowing as companies reach the technical and economic limit of how far they can drill.

    Eventually, productivity growth won’t just slow but reverse. Companies prioritize drilling in the best parts of an oil field, then gradually shift their drilling to less productive areas. But because the Bakken is so new, no one really knows how those second-tier areas will perform. If they prove successful, Bakken production could enter a long plateau before a gradual decline. If they aren’t, production could decline precipitously. The boom, in other words, is bound to end eventually. Whether it will be followed by a bust remains uncertain.


  6. Returns / Phil – For my retirement account I am slowly but surely turning from individual stocks to indices to avoid picking bad stocks! There are so many indices now for just about everything that you can diversify a portfolio easily – I have a list of over 30 indices that I am tracking now, looking for entry points. Indices not being as volatile as stocks, options are not as juicy, but my plan is to avoid big drawdowns which take so long to recover from. And 10% a year for the next 17 years (my retirement age) keeping my current contribution the same will see my investments grow by 500% or so… Not too bad.


  7. Thanks QC.  

    NFLX up $10 on earnings excitement.  Tempting to sell calls again but too risky this week with earnings tonight.  Sooooo tempting though…

    BTU getting beat up again ($15.40) in this totally amazing non energy-using Global rally.  

    Shale/StJ – It will flatline for years before running out.  There are Billions of barrels there, not millions, 1M per day will take 3 years per Billion barrels to come down.  Last estimate I remember was 3-4Bn barrels so that's about 10 years at 1Mb/d but, of course, the technology is improving so they will likely be able to grow faster (more barrels/day) AND find more recoverable oil (ie. improve the recovery rate of oil already found) so, either way, more than 10 years at the current pace and that chart can continue to go up to 2Mbd over the next 5 years and we still would likely have a few more years left before the decline begins in earnest.  

    All this "peak oil" nonsense is the same BS they roll out all the time when they want to goose oil prices.  In 2007 they told us the Saudis were out of oil and then it was Mexico and Venezuela and then Brazil and then Canada would be out soon.  It's such a load of crap – but it does fool some of the people all of the time – so they keep doing it.  

    Indices/StJ – I agree, it's much more relaxing – especially if you have a good time-frame to work with like you do.  Still, I prefer to pick stocks since I've never seen an index fund without a few stocks I could do without (not to mention the fees, and even 0.5% matters over 20 years).  Dividend payers are great too, not only do you get the bonus money but they tend to perform better over time than non-dividend stocks (I used to put up a nice chart for that). 


  8. After dipping to $101.55, oil is heading back to $102.50 and will make a nice re-short (tight stops – /CLU4). 


  9. Phil on the BRK.B example above you say "BRK.B is $128.28 and you can sell the 2016 $120 calls for $16.50 and the $115 puts for $5.20 for net $106.58/110.79 so a nice 13.5% downside cushion and you make $13.42 if called away at $120 (12.5%)."

    I understand how you get $106.58 ($128.28-16.50-5.20), but what is 110.79 resulting from?


  10. BRK.B/Craigs – That's the net if you are assigned another round at $115, so ($115 + $106.58)/2 = $110.79 is your average on 2x.  


  11. They r dropping AAPL like it's hot!

    Advill- I am a molecular biologist, go easy on us. I didn't realize about having a savings account for rainy day till i was 27 and was starting medical school. But if i can do it all over again, would be much more prudent with my money when i was in college.


  12. Phil,

    You always talk about selling risk to the market.  Does it ever make sense to write in the money BCS. IE: the 1/16 10/15 CLF bcs is priced at 2.58, the stock is 15.27.  If the price stays above 15 you are almost doubling your money on a stock that is beat up.


  13. Come on Phil, speculate on NFLX

    Have  2015 475/425 bear put spread. How about selling Jul4 400 puts and 500 calls?


  14. Also, VLO  now clearly below daily moving average. Would you sell it?


  15. 200 dma


  16. SNDK/Phil – what do you think of the '16 90/105 BCS + the 75 puts for $.50 credit? Just the puts first?


  17. Phil / buy and forget

     

    Thanks for your exposition I will do 2 things with it. ( if you don´t complain)

    1. Copy it to my sons  one is 30 working in London and she is finishing  her Ph.D  in Barcelona, they both tend to understimate the value of long term investments and now is fot them the moment to do it .

    2. Have many nephews around in the world  will send it to them too…just because of the same reason.

     

    Abhishekseth;  thanks your comment, yep, she is so absorbed that sometimes I ask myself if all that effort is worth….will see.



  18. Stj-would be interested to know which 30 indices you're tracking.  Thanks for the post.


  19. Here you go seer:


  20. Three useful links from Cobra’s site:

    Stock market traders clock

    Worldwide stock markets map

    Chart Patterns
     


  21. BRK.B/Phil – so did you mean to buy the stock and sell the puts/calls? I love that for dividend payers but don't see much point with BRK.B. You could get a better return just selling the puts/calls with portfolio margin right?


  22. links/Diamond:  Very nice!


  23. Phil how about Gild, it's getting alot of upgrades lately.


  24. Jbur

    XRT going the right way for now.


  25. Phil, (or other experienced members)

    General advice for a new subscriber, probably can be answered after hours.

    been following your site (mostly the free stuff) for years, making a few of the small trade ideas and have made a little money.

    Anyway, just now getting more serious about following some of your advice and want to learn how to get those 20% annual returns, but I only have about $12k in my brokerage account.  My retirement 401k account doesn't let me trade options or even individual stocks so I have only my personal brokerage account to work with.  

    Which of your trade ideas would you recommend for the smaller accounts?  I plan to build it up by diverting some of the non matched monthly 401k contributions but in the meantime I'd like to follow at least a few of your trade ideas.  But I never know which ones to do since most involve selling puts and require hefty margins.  

    Should I follow the 25k P and maybe just do half the amounts?  I have also done a few of your futures trades and made a few hundered, since I can do those and not get hit by the daytrade limit..  

    Any comments appreciated.


  26. Dr. John L. Faessel

    ON THE MARKET

    Commentary and Insights

     MARKET

     Right after my last communiqué the S&P 500 (SPX) flirted with that big fat round number of 2000 and as markets wont to do it backed off after a long and sustained momentum driven ascent. Last Thursday’s retreat was the first time since 1995 that the market had gone three months without a 1% pullback. The McClellan Oscillator posted after Thursdays closed at its lowest number since the first of the year at and oversold and minus196. Of course the geopolitical backdrop of the Malaysian air tragedy and the Israeli/ Hamas Gaza conflict added to this market slide and uncertainty.

     Last week’s stall in the markets flight was highlighted by the retreat of the Russell 2000 small-cap index (RUT). Many times, as in the year 2000, a market “correction” began with the SmallCaps. Let’s also remember that the bullish sentiment has been running hot and the question comes up; is everybody in?

     As I’ve been chronicling – valuations are super high. Yes, interest rates are super low. Manipulated low obviously. But who cares? They’re still low. So buy! Right? We’ll see…

     Is it really different this time? Talk about a wall of worry. My God! There’s a crisis that I can point to on every finger and toe of my body. By my reckoning it hasn’t been so bad since the late 30s. And we have an AWOL leader who is at the pool hall drinking beer… Incredible!

     Bits from Stanley Druckenmiller

    “We’ll stay long — for a little longer.”

    [Druckenmiller has made 30% compounded return for years and years and years, betting against central banks.]

     “QE has subsidized all asset prices and when you remove that subsidization all asset prices will go down.”

     

    Items for consideration per Druckenmiller

     

    ·       In 1999, 83% of IPOs went public had never earned a dime. Today that's 80%. It's the only other time in history we've approached that.

          This year, corporate credit is growing as at a record rate, far faster than it grew in 2007. And S&P pointed out that 70% of debt issued is a B rating or worse. To put that in perspective, in the 1990s, that number was 31%.

    ·       In 2007 about covenant light loans? They did a $100 billion in 2007, and 38% of them were B rated. This year we're going to $300 billion. We did $260 billion last year, up from $90 billion a year, and 58% of them are B rated.

    ·       Household balance sheets are at an all-time high. It's higher than it was in 2007. 

    ·       Debt to GDP was 150% when Greenspan took over, and it was 390% at the crisis. Now we're only down to 350%.  

    ·       IBM's sales are where they were six years ago. During the period the company has tripled their debt. (IBM shares were $70.00 in 2008 – now its $195) Instead of increasing investment to combat the threat, (of competition / a new technology starting them right in the face) they've actually borrowed a lot of money to buy back stock.

    ·       Capital spending is the lowest it's been relative to sales in many, many years. That's the reason productivity is down. We've got to get out of this financial engineering stuff and get more into investing in the real economy.

    ·       If you want to spur growth, I don't think zero interest rates are the answer, because they have unintended consequences. We need to do things like tax reform and cut back on regulation.

    ·       If you need growth, we need overall comprehensive tax reform. By the way, it's easy. It's easy — I guess it's not easy politically. But everybody knows what the answer is.

    ·       “We’ll stay long — for a little longer.”

     

    PIMCO’s Latest

     

    The New Neutral is PIMCO’s one big idea.

    If the real federal funds rate is lower than the historical 2% – and if it facilitates normal asset volatility, then stocks, bonds, and risk assets in general should appear less bubbly than some presume.

    Says William H. Gross PIMCO Managing Director

    Noteable

    Why rates are so low in treasury’s…

     The latest Treasury Department data showed that China had upped its holdings of Treasuries by $107 billion during this year's first five months, to $1.27 trillion, just under 11% of Treasury debt outstanding.

    S&P 500

     The S&P 500 (SPX) closed Friday at 1978.22

    Channel and trend line support off the November 2012 lows is 1874.

    Near term price support is at S&P 500 (SPX) 1955 /1952 / 1944 / 1938.

    The still advancing 50-day moving average support is now at 1936.

    Minor trendline off the April 2014 lows is at 1959.

    The 200-day moving average support is at S&P 500 (SPX) 1883.

    The Fibonacci  support levels (daily chart – see above):

    38.2% retracement support at 1892.

    50% retracement support at 1863.

    61.8% retracement ‘crucial and key’ support at 1834.


  27. XRT/dclark:

    Yes.  Since I got 40% of the expected profit on the spread profit since last Friday,  I went ahead and closed. Will look for next opportunity.


  28. Marc from T3 likes LNKD long here.  Might be a good time to add to those short 100P.

    LinkedIn (LNKD) Long

    Entry Price: $162.75

    Target Range: $175

    Stop-Loss Level: $156.25

    https://sz100.infusionsoft.com/app/hostedEmail/12364009/37b3c91eb0eb6801


  29. Interesting earnings today:

    CMG
    Consensus Estimate – 3.05
    Whisper Number – 3.08
    Average Move – 9.1%
    Priced into Options – 7.3%

    NFLX
    Consensus Estimate – 1.14
    Whisper Number – 1.19
    Average Move – 13.1%
    Priced into Options – 7.8%

    TXN
    Consensus Estimate – 0.59
    Whisper Number – 0.62
    Average Move – 4.6%
    Priced into Options – 3.15%

    EW bullish on NFLX and TXN and neutral on CMG!


  30. Biology/Abhish – Well I'm sure you'll appreciate this then (comment at end).  

    Spreads/Buster – Sure, it's just another strategy with the same concept.  I don't see an immediate upside catalyst for CLF so I'm not as keen in the Bull Call Spread but I do believe net $10.10 is a fantastic entry, even if the economic situation does get worse over the next 18 months.  With a $10/15 bull call spread, you need to be over $12.58 to make money with a cap at $2.42 if CLF hits $15.  Selling the $13 puts for $2.90 means we make money on every penny over $10.10 up to a cap of $2.90 if CLF hits $13.  Don't fixate on "doubling" your money, look for the best risk/reward combination for the capital you are going to deploy.  

    The big difference in that example is how much risk you are selling.  With the short $13 puts, you are collecting net $2.90 for a trade that is $2 out of the money (13%) and all CLF has to do is not fall more than that for you to keep $2.90 ($1.50 in net margin while you wait).  If you pay $2.50 for the $10/15 spread, you only make $2.50 if CLF stays over $15 and begin losing money at $12.50.  It's not terrible but it's $2.40 (23.7%) higher than the $10.10 you break even at on the other trade.    Not only that but the $2.50 you tie up is cash, so it costs you $5 of buying power (at 50% margin account) to buy the bull spread vs $1.50 of buying power on the short puts.

    NFLX/JMD – We got so burned on our last set of puts I have lost my appetite for them.  The premiums are ridiculous anyway.  You want to bet NFLX won't move more than 12% after earnings?  In April they went from $312.10 to $380 in 5 days and then back to $299.50 5 days later.  Either way would whack you for about $25.  Risking $25 to make $4 is not the kind of dice you want to roll too often – unless you have some special reason to believe NFLX is actually a lot less volatile than options would have you assume, DESPITE being 50% more than it was last quarter (meaning the same 20% moves would now be $90 instead of $60).

    VLO/JMD – I think earnings (7/30) will beat low expectations but guidance is key.  I would never sell it because I think they are a strong operator so I look for opportunities to buy, not short.  TSO, on the other hand, is what I said makes a better short than VLO last week and I stand behind that one.  

    TSO – To short them our premise is that there will be a miss this Q as the crack spread narrows.  Earnings are late July so how about the Aug $55/50 bear put spread at $1.10 and you can leave it at that as it's a great $3.90 gain if we get it right (345%) but you can also buy 5 of them ($550) and sell 2 June $55 puts ($1.97) for $394 and then you are into the spread for net $156 with plenty of time to roll the short puts if they dip sooner than we think.  

    So that original spread did leave us in the Aug $55/50 bear put spread for net $156 (5 are now .80 each for $400) as planned and a bit off target at the moment ($57.93) but, of course, if you were in the trade, the thing to have done would have been to buy back the short $50 puts for .10 or less and roll the $55 puts to the $60 puts for $2.40 and sold the $55 puts .90 to some other sucker and then you'd be in 5 $60/55 spreads for net $1.91 (probably better pricing when TSO was at $62, of course) - that's the way you work those things.  

    SNDK/Ivan – I don't know how fast they will rebound (if at all) as they are caught in the vortex of being an AAPL supplier – where margins get squeezed while you become more and more dependent on your largest client.  Supplying AAPL has caused them to have parts shortages for their higher-margin items (you don't tell AAPL you can't make a delivery – all your other clients suffer, but not AAPL!).  I think maybe on selling puts but no to buying a bull call spread and, on the whole, I'd still give them time to settle down.  If there are more chip companies with issues – they'll keep going lower and I don't imagine any great catalyst shooting them back to $100 any time soon.  

    Copies/Advill – Sure, that's why we have a tweet button or you can send it to people, I don't mind.  Just leave me with a credit in case they send it somewhere too.  

    Those patterns are useful, Diamond.  Please add them in our Wiki if you can or in the Education Section.  

    BRK.B/Ivan – True, they don't pay a dividend so you may as well just buy a bull call spread on the long side – it was just an example, not an official play.  

    GILD/Abhish – Yes, I mentioned them on the weekend.  CURE for Hep C has got to be worth something.  Still, a lot of it priced in and they are getting blowback on pricing (and they should – bastards!) but, with GILD at $89.13, you can sell the 2016 $75 puts for $6.50 and buy the $80/100 bull call spread for $8.55 for net $2.05 on the $20 spread that's $9+ in the money to start.  Not a bad way to get a toehold on them. 

    XRT/DC – Waiting for a trend that lasts more than 4 hours in this market.  

    Starting/Dforster – Yes, the $25KP is means for smaller accounts (without margin, etc.) and is currently on track for a nice gain for the year.  We don't do a lot of those trades though and, when you only have a little to invest, my best advice is put it in something you don't have to watch and then GET OUT AND EARN MORE MONEY!!!  As noted earlier – even with $100K, you need to focus more on making money and not trying to make your money cover your expenses.  Leaving your cash alone and letting the gains compound is the real key to success over the long-term.  

    Anyway, you have a 401K and I imagine  you can't move it to a friendlier broker but you can put that money into dividend-payers, and that's something to look into.  

    Let's say you want to break your buys up into 5 blocks of $2,500 each.  That means right away you don't want to mess with expensive stocks but we love ARO at $3.28 and you can sell 5 of those 2016 $3 puts for 0.75 and pocket a quick $375, which is 3% of $12,000 in one transaction.  Worst case is you own 500 ARO for $3 ($1,500) so that's your risk allocation on that block.  If you don't qualify to sell puts, you can also just pick up the $2.50/4 bull call spreads for net 0.65 and 10 of those ($650) pay back $1,500 if they work out.

    So things like that are a good way to get started, be patient and remind me once in a while you are looking for cheap stocks and I'll keep my eye out.  

    Good discipline Jbur!  

    LNKD/Burr – I like that idea, they seem to be growing well to me.  Not sure how well they are monetizing but I think they are due for a nice surprise. 


  31. TOS/Kech – I stop using them myself a few days before for the same reason so I can't tell you what they "usually" do.  Better safe than sorry with expiring contracts – best to just deal with the new ones (/CLU4) and forget the Augs.  There are no ETFs that I know of that play front-month only, the spread is ridiculous because it's untradeable – it's a linked concept. 

    Good work-around Craigs. 

    1,135 still bouncy on /TF.  


  32. Phil – Your plan for getting 20% per year is good stuff !   You're right.  Not many people have the patience or knowledge to invest that way.  Furthermore, not many people realize the added return selling puts against your favorite holding brings in.  If being the house only adds 5-6% per year, over time, that's huge !  Nice work.  Now if I could only convince you that TA works for shorter term plays, we'd be on the same page exactly. :-)


  33. EMC up 4% today and they report  on Wednesday:

    EMC Corp.(EMC): Activist investor Elliott Management Corp. has taken a 2% stake in the data-storage company and plans to push for a breakup, according to a report in The Wall Street Journal.     


  34. Phil any thoughts on APPL earnings? i have 5 oct14 95C, any input will be appreciated. Also, lol on the sheldon's joke on Biologist.


  35. I've been invited to the 4 Seasons in Dubai for the grand opening.  $600 a night – kind of tempting if not so far away!  They have indoor skiing:

    Looks nice overal:

    TA/Albo – I use TA, I just don't like it.  It works because people think it works – like hypnotism or placebos.  

    EMC/StJ – They'd better do it fast, that whole sector is under a lot of margin pressure.  

    AAPL/Abhish – I don't think this Q will be very exciting as they have nothing new to sell.  Should be all about the guidance, which is usually conservative.  My "input" on the Oct $95s is A) you shouldn't buy naked calls as that makes you the sucker we sell options to and B) they were $5.50 on the 7th and $4 on the 9th and $5.50 on the 14th and now $4 again so what are you looking for if you are going to sit there and watch it swing 30% up and down?   Oct is only 88 days to expiration so you are losing .05/day while you decide what to do and that premium will take a hard dive after earnings, regardless of which way the stock goes.  

    While generally neutral on AAPL into earnings, we do have short Oct $85 calls to guard against a miss on a larger, longer-term position in the Income Portfolio.  That's what we'll be holding into earnings – just in case.  


  36. Phil / CLD Trade

    I've been letting a trade go wrong on me.  I sold the CLD Aug 20P for .90, now 4.05.  Down $1500.  CLD is 15.86

    Right now the 20P is trading for 4.05 mid.  There is no more "juice" left in the P (20-15.86=4.12).  Since I don't want to own the shares, and there is no more "theta" left in the option, I'm thinking of just shutting it down and taking the loss.  

    You did tell me you didn't like CLD.  


  37. The Chicago Fed National Activity Index was not that great today:

    The nation's economic growth, held back by weakness in industrial production, slowed slightly in June but remained above the historical average, still above zero at plus 0.12 vs plus a revised 0.16 in May. The three-month average is also above zero, at plus 0.13 but down from a noticeably more solid and upwardly revised plus 0.28 in May.

    The slowing in June was centered entirely in the production-related component which came in at zero vs plus 0.14 in May, directly reflecting a meager 0.2 percent rise in industrial production vs May's 0.5 percent gain.

    The weakness in production outweighed acceleration in the employment component which contributed plus 0.22 in June vs plus 0.14 in May. The sales/orders/inventories component held unchanged at a plus 0.04 contribution while the consumption & housing component continued to drag down growth, at minus 0.14 vs May's minus 0.16.


  38. CLD/Burr – Hmm, I had to look that one up – it was from a while ago:

    CLD/Burr – They have always sounded intriguing but never gain any real traction in a channel from $14-$22.  So, at $21, not too sexy.  Zacks didn't think so at $20 either:

    Although Cloud Peak Energy Inc. (CLDis up over 7.9% in the past four weeks, investors may be concerned. After all, CLD is now in overbought territory, at least when looking at its RSI value of 71.4. If that wasn’t enough, investors should also note that Cloud Peak possesses a Zacks Rank #4 (Sell), so if analyst perception is any guide, we could witness a slump in CLD shares before too long.

    To me, it's a high p/e for a coal company despite the "enterprise value," especially with $1Bn in debt against that cash and the reason they have cash is because they borrowed another $63M last year.  It's easy to have an "impressive" cash balance if you keep borrowing money – even though you are already in debt.  So I guess I've talked myself into a no on this one.

    Looks like my logic was sound at the time and they are still not attractive at $15.85 because, even if things go well, that still leaves their p/e up in the 30s – ridiculous for a coal co.  If you don't want to stick with these guys with conviction – then getting out is the only option.  They don't even have good rolls as options only go out to Feb BUT, you can sell BTU 2016 $15 puts for $2.60 if you want to stay in the coal biz. 

    Ackman says he WILL destroy HLF tomorrow.  Aug $50 puts at $1.35 are a fun way to play, let's get 5 in the $25KP and 20 in the STP.  Going to have to be quick on these, though!   


  39. Oil back to $102.20 already – very nice!  

    Chicago Fed/StJ – I don't know how NY and Philly came up with such good numbers – very strange.  


  40. Phil i don't see Aug 50 puts at 1.35. You are not talking about weekly's right?


  41. HLF/Abhish – They were $1.35 and that was already up from .90 as I was writing it, now over $2.10 – I guess I wasn't the only guy with that idea.  Dead trade unless it comes back down – I don't want to get caught chasing it -tempting though it may be.  


  42. i got in at 1.90. now 2.50, u think i should take profit.


  43. profit/abhishek

    Almost 30% in 5 minutes is nothing to sneeze at. 


  44. Phil – Sometimes I hate being a member here!  

    CLD.  Barron's points something out, I like the idea, I present it to you, you don't like the idea…I try and think for myself…I do it anyway…I lose money

    Everything else….you point out good trades….I don't take them…I try to think for myself….I lose money

    Seems like the winning strategy is; Listen to Phil…Don't think for myself…Make trade…Make Money.

    Grrrrrrrr.  

    I guess every super successful person though surrounds themselves with people who are smarter than themselves.   That's you. Thanks (begrudgingly).

    {end sarcasm}


  45. /ZB AND //ZN are moving off their lows for the day. I wouldn't be too surprised to see a move up.


  46. Phil – When you are watching /CL /TF etc.  What do you have the chart timing set at?  How many bars/minutes?


  47. JBUR- u r right, but i think he is really gonna destroy this company. Also, i have friend while in college she became a resp for this company and she had to recruit more people and they can't return the stuff. So, i really believe HLF is a scam!


  48. I meant, moving off their highs.


  49. HLF/Abhish – Yes, you can't beat a quick 30%!   When in doubt, sell half…

    CLD/Burr – I don't want you to feel bad, just to review the logic so we can do better next time.  The whole reason I began keeping a blog back in 2005 was so I could go back and review my own thought process each time I made a trade.  It was incredibly helpful in improving my performance because I began to see the traps I fell into and, eventually and at great expense, learned to avoid them.  Remember, the difference between Mario Mendoza (Mendoza Line) and Ty Cobb is just 0.167, 1.5 hits out of 10 and Cobb still missed 2 out of 3 times!  

    Futures/Burr – Usually 5 or 15 mins, depending on what I last looked at.  Not important enough to switch as I usually look at both before committing.  Never 1min – ever, sometimes 1hr.

     HLF/Abhish – No question it's a scam but it's a scam that's been running for 44 years and battle-tested in every court in every state.   Wherever the line in the law is, they are at that line!  Still, at this point I would hope Ackman has a new attack that pulls the string out that holds this scam together.  I'm sure there's a weak spot somewhere to exploit (in order to stop them) and, with all this publicity, I imagine Ackman has had no shortage of people giving him ideas.   

    I'm sticking with our plays too as it would be fun if they drop 10% tomorrow and jam those puts over $5.  If not, I don't see why they would zoom up past $60 so I don't think too much is at risk.  


  50. Burr , don´t worry you are not alone…..


  51. More pain for Russian tech/telecom stocks

    01:14 PM ET · YNDX

    • With pressure mounting on Russia over its support for Eastern Ukranian separatists following the downing of Malaysia Airlines flight MH-17, tech and telecom stocks with heavy Russian and/or Ukranian exposure are once more selling off.
    • Notable decliners: YNDX -3.9%. QIWI -5.5%. LXFT -3.9%. MBT -5.6%. VIP -4.3%.
    • Previous: Russian/Ukranian stocks tumble following plane crash


  52. Chevron starts production at $1.4B Mississippi premium base oil plant

    12:51 PM ET · CVX

    • Chevron (CVX +0.3%) says it has started production at a new $1.4B premium base oil facility at its Pascagoula, Miss. refinery, marking the launch of the project after more than six years of development.
    • CVX says the project increases the company’s capacity to produce base oils by more than 70% and will make it the largest base oil producer in the world; the facility will be capable of producing 25K bbl/day of premium base oil.
    • The base oil produced at Pascagoula will supply customers on the U.S. east coast plus Europe and Latin America; CVX’s Korean facility will serve Asia, and its Richmond, Calif., plant will supply the U.S. west coast as well as Asia.


  53. Morgan Stanley downgrades America Movil on breakup skepticism

    12:37 PM ET · AMX

    • “We struggle to see how a break-up can produce a more valuable outcome than what we have been projecting,” says Morgan Stanley. With America Movil (AMX -2.1%) having risen 15% since announcing it will shed Mexican assets to bring its local mobile/wireline share below 50% (and thus appease regulators), MS is downgrading the carrier to Underweight.
    • MS is worried the asset sales, which also involve AMX (gets ~2/3 of its free cash flow from Mexico) putting its towers in the hands of a separate company, will “reduce AMX’s scale advantages and may also alter the market structure in a way that would likely produce lower prices, higher costs and investment.”
    • It also thinks investors are too bullish on the ROI for AMX’s Mexican pay-TV effort, given the performance of its Brazilian project and the investments of Mexican cable providers.


  54. Monster Beverage downgraded at Morgan Stanley amid slowing sales trends

    12:33 PM ET · MNST

    • Monster Beverage (MNST -3.7%) is downgraded to Equal Weight from Overweight with a $75 price target, down from $82, at Morgan Stanley, which cites slowing U.S. trends and balanced valuation.
    • The firm anticipates reduced retail sales domestically in Q2, while brands such as Rehab, Lo-Carb and Absolute Zero have been underperforming in recent quarters.
    • Stanley also says the market has reduced MNST’s value due to a large amount of regulatory concerns, margin expansion potential and operation improvement potential.


  55. Citigroup analysts have high hopes for GM earnings, not so much for Ford

    12:22 PM ET · GM

    • Citigroup expects a big Q2 earnings beat from General Motors (GM -0.2%) but is somewhat less optimistic about Ford’s (F +0.1%) results when the two automakers release their financial results on Thursday.
    • The firm lifts its Q2 EPS estimate for GM to $0.63 vs. $0.57 consensus, led by North America, where it forecasts $1.7B adjusted EBIT (~11% margin excluding recall costs) on higher production/truck mix, exceptional pricing (Q2 ATPs up more than $600 Q/Q) and arguably easier structural cost comparisons; unlike last quarter, 2014 guidance should suggest an accelerating H2 EBIT pace consistent with GM’s June update.
    • Cit’s Q2 EPS for Ford is reduced to $0.36 mostly on taxes vs. $0.36 consensus, with pre-tax auto EBIT at $1.7B; although the firm isn’t expecting an earnings beat, it believes the quarter/outlook could still result in upward 2014-15 Street revisions.


  56. More biotech IPOs on deck for this week

    12:14 PM ET · SAGE


  57. Glu +9.1%; Cowen hikes estimates due to Kardashian game

    12:13 PM ET · GLUU

    • With Kim Kardashian: Hollywood turning into a blockbuster, Cowen has respectively hiked its 2014 Glu Mobile (NASDAQ:GLUU) revenue and EPS forecasts to $212M and $0.26 from $159.5M and $0.03. Consensus is currently at $164.1M and $0.04.
    • Cowen’s target has been raised by $4 to $10. The firm recently argued the Kardashian game could yield $200M in annual revenue.
    • Meanwhile, SA author Mark Gomes (bullish on Glu for some time) is out with another upbeat column: Aside from the Kardashian game, Gomes is a fan of Glu’s “engine-based R&D philosophy” (lowers development costs) and game monetization approach, as well as an M&A strategy he thinks is “on track to yield hundreds of millions in revenue from just two acquisitions.”
    • App Annie respectively has Kim Kardashian: Hollywood at #1 and #4 on its U.S. iPhone free and top-grossing download charts. On Google Play, it’s #25 and #13.
    • Glu’s Q2 results are due on July 30. Shares now +96% since the Kardashian game launched on June 25.


  58. Cliffs’ Q2 earnings estimate cut at J.P. Morgan

    11:58 AM ET · CLF

    • Amid Cliffs Natural Resources’ (CLF -5%) proxy battle with Casablanca Capital – including today’s letter from CLF urging shareholders to vote the white card – J.P. Morgan analysts cut their Q2 EPS estimate to a $0.34 loss from a $0.19 gain ahead of the company’s earnings report this Thursday.
    • JPM cites marking iron ore prices to market during the quarter – 11% lower than its previous forecast – and factoring in expected weather related shipment disruptions and associated higher costs in the Great Lakes; iron ore cargo vessels reportedly could not sail without an ice-breaking escort until mid-May and traffic was down substantially in April.
    • Freeport McMoRan (FCX +0.3%), which is set to release its results on Wednesday, also had its forecasts trimmed, reflecting the Grasberg mine operating at only ~50% of capacity due to its current inability to export concentrate from Indonesia.


  59. Ezcorp appoints CFO to be interim CEO

    11:15 AM ET · EZPW

    • Ezcorp (EZPW -8.8%) CFO Mark Kuchenrither has been named the company’s interim CEO by voting shareholder Phillip Ean Cohen (via holding company MS Pawn).
    • The move comes after Cohen removed CEO Paul Rothamel, chairman William Love, and director Joseph Beal. Shares are tumbling in response.
    • Ezcorp also announces director Charles A. Bauer has resigned. The company is evaluating “a number of highly qualified candidates” to add to its board.


  60. Kandi +5.3% following bullish SA article

    11:05 AM ET · KNDI

    • The 4,114 EVs Kandi (NASDAQ:KNDI) sold in Q2 nearly match the 4,694 it sold over the whole of 2013, notes Michael Nguyen in a bullish column. Likewise, total Chinese 1H14 “new energy vehicle” sales of 20,477 exceeds a full-year 2013 total of 17,642.
    • Nguyen is optimistic about the potential of an upcoming 2-door Kandi EV (called Urban Beauty), and notes Kandi has a leading position in the Chinese mini EV market.
    • He expects a slew of government initiatives – multiple subsidies, a sales tax exemption, and a mandate calling for EVs to account for at least 30% of government vehicle purchases by 2016 – to bolster the market’s growth in the coming years.


  61. Horsehead Holding +5.5% as Barron’s touts potential 40% upside

    10:59 AM ET · ZINC

    • Horsehead Holdings (ZINC +5.5%), North America’s top zinc producer with 169K tons in sales last year, has several competitive advantages that could be strengthened with the opening of a major new plant and perhaps propel the company’s shares by 40% or more, Barron’s said in a weekend profile.
    • The Mooresboro, N.C., plant could lower ZINC’s break-even costs by $0.20/lb. of zinc to $0.40-$0.45, vs. production costs of $0.85/lb. for miner Teck Resources (NYSE:TCK); the new plant also will produce a higher-grade of zinc than the now-closed facility in Monaca, Pa., greatly expanding ZINC’s market.
    • Somerset Capital portfolio manager Ross Taylor thinks the new plant will be a game changer that could push ZINC’s EBITDA to $180M-$200M by 2016.
    • Shares had spiked 10 days ago following a Seeking Alpha post by KL Investment Partners which also discussed ZINC’s “transformative new facility.”


  62. FDA clears Beacon transponder

    10:33 AM ET · VAR

    • The FDA issues 510(k) approval to Varian Medical Systems’ (VAR -0.9%) Calypso soft tissue Beacon transponder. The grain of rice-size transponder can be implanted throughout the body except in the lung. It emits a non-ionizing electromagnetic signal that is tracked in real time by the Calypso system in order to guide radiation treatment beams to precise tumor targets.


  63. More on PetMed Express fiscal Q1 results

    10:14 AM ET · PETS

    • PetMed Express (PETS +2.1%) Q2 results: Sales: $72.5M (-2.3%); COGS: $23.8M (-1.0%); Operating Expenses: $15.9M (-3.6%); Operating Income: $7.8M (+4.5%); Net Income: $5.0M (+4.6%); EPS: $0.25 (+4.2%); CF Ops: $14.3M (-28.2%); Quick Assets: $44.7M (+32.1%).
    • Average order size: $78 (+1.3%).
    • No financial guidance given.


  64. Caterpillar confident over positive tax ruling outcome

    10:09 AM ET · CAT

    • Caterpillar (CAT +0.1%) is expecting to convince U.S. tax authorities that its Swiss subsidiary which records most of overseas sales profit complies with American tax rules.
    • The subcommittee reviewing the case estimated that Caterpillar avoided or delayed payments on more than $2.4B since 1999, and has saved $300M annually in the last few years.
    • The main questions brought into focus are Caterpillar’s tax records from 2007-2009, and foreign tax credits that arose from certain company financing’s.


  65. GoPro rallies following underwriter launches

    10:07 AM ET · GPRO

    • GoPro (GPRO +4.4%) has received 6 neutral ratings from IPO underwriters to go with two bullish ones. Nonetheless, shares have rallied above $43.
    • JPMorgan (Overweight, $51 PT) declares GoPro to be “a profitable, fast-growth [consumer electronics] company, addressing a large market as the category-defining brand in professional-quality action cameras at consumer prices.”
    • Citi (Neutral, $42 PT) is less enthusiastic: It thinks revenue/shipment growth will continue decelerating, and expects limited uptake of GoPro’s cameras by mainstream consumers. Others launching coverage with neutral ratings cite GoPro’s valuation.


  66. New highs for Baidu on pre-earnings Morgan Stanley upgrade

    09:49 AM ET · BIDU

    • Ahead of Thursday’s Q2 report, Morgan Stanley has upgraded Baidu (BIDU +1.8%) to Overweight, and set a $239.20 target.
    • MS thinks Baidu (currently expected by the Street to see 52% 2014 sales growth) can post 30%-40% annual sales growth over the next 3 years, and thinks op. margin (pressured lately by heavy spending) will bottom out towards year’s end: It’s expected to rise to 28% in 2016 from 24% in 2014.
    • The firm also notes Baidu’s top-line growth has accelerated since 2H13, thanks to improving mobile monetization. On July 3, Deutsche predicted Baidu would post strong Q2 results with the help of rapid mobile search growth and a narrowing gap between mobile and PC search ad prices.
    • Shares are once more making new highs. They now go for 36x 2014E EPS, and 26x 2015E EPS.


  67. Halliburton eyes rebound in North America drilling, names new president

    09:17 AM ET · HAL

    • Halliburton (NYSE:HAL) +0.4% premarket after reporting a better than expected 10% rise in Q2 revenue and raising its share buyback authorization to $6B from $5B.
    • Revenue from North America rose 11% Q/Q while operating income rose 31%, stronger than the 9% Q/Q rise in revenue and 26% gain in operating income from the Eastern Hemisphere.
    • Expects North America activity levels to improve, with margins approaching 20% in Q3; based on the strength of the outlook, HAL plans to immediately accelerate additions to its hydraulic fracturing fleet and logistics capabilities.
    • In Q2, HAL’s completion and production segment reported a 13% revenue increase to $4.94B, driven by higher stimulation activity in the U.S. land market and strong growth in its international operations.
    • Drilling and evaluation revenue climbed 5.3% to $3.11B, helped by higher wireline and fluid services in the Eastern Hemisphere and the U.S.
    • HAL also says it is promoting COO Jeff Miller to President effective Aug. 1; he also will become a board member.


  68. Six Flags’ revenue, earnings rise as attendance drops

    08:58 AM ET · SIX

    • Six Flags Entertainment (NYSE:SIX) +1.7% premarket after reporting Q2 earnings rose 39%, with admissions revenue increasing while attendance fell, suggesting fewer guests spent more money.
    • SIX says attendance at its 18 theme parks in the U.S., Mexico and Canada fell 8% to 8.2M guests, primarily due to the lingering effects of the long, harsh winter that expanded school calendars and slowed early-season attendance.
    • Q2 total guest spending per capita grew $4.21 (11%) to $43.73, with admissions revenue per capita increasing $2.56 (11%) to $25.15 and in-park revenue per capita adding $1.65 (10%) to $18.58.
    • Theme park admissions revenue improved to $205.4M from $199.7M a year ago, while theme park food, merchandise and other revenue rose 1.4% to $151.8M.


  69. IMAX higher on upgrade

    08:24 AM ET · IMAX

    • Stifel upgrades IMAX (NYSE:IMAX) to Buy from Hold, and places a price target of $32 on the stock.
    • IMAX +1% premarket


  70. Yum, McDonald’s ensnared in another China food safety scandal

    07:49 AM ET · YUM

    • Yum Brands (NYSE:YUM) and McDonald’s (NYSE:MCD) face a new food safety scare in China, having suspended orders from a Shanghai meat supplier while Chinese authorities investigate allegations that the company sold expired chicken and beef products.
    • YUM and MCD apologized to customers following a TV report that showed workers picking up meat from a factory floor, as well as mixing meat beyond its expiration date with fresh meat.
    • YUM has just begun to bounce back from the 2012 scare in its no. 1 market, while MCD says it may now face a product shortfall in its third-biggest market by store numbers.
    • YUM -1.8% premarket; MCD -1%.


  71. More on Hasbro’s Q2

    07:36 AM ET · HAS

    • Hasbro (NASDAQ:HAS) reports revenue for its boys category was up 32% in Q2 due to its strong demand for action figures, but announced lower gains of 10% in its girls category.
    • Revenue rose to $829M from $766M Y/Y. Total sales increase 8.2% Q/Q, with a 17% increase in international sales helping attribute to the rise.
    • Net income fell to $33M, or 26 cents per share, from $36M, or 28 cents per share, a year earlier.
    • The company repurchased 2.5M shares of common stock at a total cost of $136.3M – at an average price of $54.06 per share.
    • Q2 earnings


  72. ABB, Volvo partner for new electric and hybrid bus

    06:01 AM ET · ABB

    • ABB (NYSE:ABB) and Volvo (OTCPK:VOLVY) are teaming up to revolutionize urban e-mobility by co-developing and commercializing electric and hybrid buses with fast charging systems.
    • The first project will combine Volvo’s electric hybrid buses and ABB’s automatic e-bus chargers in the Luxembourg public transport system.
    • Twelve Volvo Electric Hybrid buses are expected to be running on existing lines by 2015.


  73. R.J. Reynolds $23.6B punitive damage award will be challenged

    04:12 AM ET · RAI

    • The R.J. Reynolds (NYSE:RAI) lawsuit awarding $23.6B in punitive damages to the widow of a longtime smoker who died of lung cancer is likely to be rejected on appeal or the award reduced substantially, Reuters reports.
    • The payment likely falls outside the boundaries for punitive damages that the U.S. Supreme Court has laid down in a series of cases.
    • Constitutional guarantees of due process do not usually allow punitive damages to exorbitantly exceed compensatory damages of the same case. The general guideline is a ratio of 10:1.


  74. Verizon to increase upload bandwidth

    02:35 AM ET · VZ

    • Due to slowing growth for its FiOS TV and broadband service, Verizon (NYSE:VZ) is now looking to regain market share with a new offering – faster upload speed.
    • In Q1, Verizon’s broadband customer additions slowed to 98k from 188k the year earlier, after facing strong competition from the cable industry.
    • FiOS says it will make available the same upload speeds as download speeds that its customers already subscribe to, for no additional charge.
    • The full roll-out should be completed by the fall.


  75. What made /CL jump .40 in an instant at 2:10?


  76. DOnt´t know, again trapped..


  77. craigs
    that was me, sorry.


  78. Wombat-well whatever you did, undo it! I can't seem to ever be on the right side of this trade for more than a day. I get it right one day and think I have it and then I get killed the next like this. I took my eye off it for five minutes and missed my exit at 1:55 when it shot down, then as soon as I got back to it, boom it shot up. All within 15 minutes. Oh well, c'est la vie. It's only money.


  79. ok ok ,ok.
    gimmer 36 hours I'll  make some calls.

    you owe me one.


  80. its possible that junk bubble is so large that it could burst with too many fed members talking about it…not even doing anything….especially given how illiquid many of the instruments are

    JNK etf is near 200-day..put activity high


  81. I guess if I wait a few more minutes it could shoot back down, Reminds me of what they say about weather in Vermont where my kids live, if you don't like it, wait a few minutes and it will change.


  82. i am in VT today its GORGEOUS!


  83. Phil/AAPL Oct 95 calls

    good afternoon.

    just go to your posts.

    where do you get the pricing on options after the fact?

    or did you just kind of know that the oct calls fluctuated between $4 and $5 during that time frame last two weeks?


  84. Phil: Also on that AAPL note, i bought those call for 3.85


  85. Phil:  Any thoughts on SVU?  I've got a fair amount of stock purchased at $7 and have sold $10 Jan 15 and 16 calls against part of my position.  I have been reducing my position into the recent strength.  There has been a lot of bullish option activity of late, but  MS and S&P  are negative on the stock.  Your take?


  86. Phil / BRK.B

    Questions regarding your BRK.B strategy… You are selling naked puts and calls:

    “… BRK.B is $128.28 and you can sell the 2016 $120 calls for $16.50 and the $115 puts for $5.20 for net $106.58/110.79 so a nice 13.5% downside cushion and you make $13.42 if called away at $120 (12.5%)…”

    How do you adjust this strategy when the company goes up relentlessly? Had we tried this two years ago, Jul 23rd 2012, BRK.B was approximately $83.59. We would sell the Jan 2014 $78 calls for $11.00 and the $75 puts for $4.00 (all option prices are approximate since I don’t have access to expired option prices). Berkshire’s price keeps going up each month to $85.41, $89.54, $86.94, $88.08, $89.83 (Dec 2012), $96.48, $101.21, $102.40, $105.02, $111.29, $112.07 (June 2013), $117.34, $113.98, $114.85, $116.41, $115.63, $117.99 and finally on Jan 17, 2014 $115.07 (expiration day).

    If I’m correct, we would have been protected up to $93 ($78+$11+$4), reached sometime in January 2013. But having 12 months to go we would probably wait… At what point do you start thinking on rolling the short calls? Do you also roll the short puts or simply add more short puts at higher strikes (using more margin)?


  87. Phil / BRK.B

    Sorry Phil, just after I posted I saw that you actually bought the stock.

    "…you make $13.42 if called away at $120 (12.5%)…”


  88. Maya – Historical option pricing – You can chart each individual option's pricing within Thinkorswim.  Just right click on the particular option, in the trade screen, and then click on TOS charts.  You can then adjust the time frame.  It won't look very pretty, because it is based on actual transactions, so it won't have very complete info, because most options are thinly traded.


  89. Oil/Craigs – I still don't see any particular thing.  Hit $103 on /CLU4 but still a good short there.  The old contracts jammed up to $104.70 and I think it's just BS going on near the last of trading (and another great reason not to trade the last days of a contract!).  

    Lots of barrels still to roll as of this morning:

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Aug'14 102.97 104.64 102.65 104.46 14:26
    Jul 21


    -

    1.33 64827 103.13 74404 Call Put
    Sep'14 101.86 102.79 101.48 102.66 14:26
    Jul 21


    -

    0.71 239622 101.95 323820 Call Put
    Oct'14 100.85 101.69 100.52 101.58 14:26
    Jul 21


    -

    0.64 59817 100.94 175178 Call Put
    Nov'14 99.69 100.71 99.61 100.60 14:26
    Jul 21


    -

    0.63 33688 99.97 74604 Call Put
    Dec'14 98.90 99.90 98.70 99.72 14:26
    Jul 21


    -

    0.66 44626 99.06 209248 Call Put

    USO back over $38 – there's another way to go short.  Aug $38 puts just .55 with USO at $38.13 so .68 premium for 25 days and USO was $36.58 last week:

    JNK/Angel – Been non-panic falling all month.  Panic could get very ugly as it was $35 last year, $32 in 2012 and $28 in 2011 before all this idiocy began:

    AAPL/Maya – I look at the quick chart on TOS.  If that doesn't go back far enough, I copy the symbol to Active trader and I can look back a year on an option.  

    AAPL/Abhish – Then why were you not happy at $5?  That's up 30%. 

    SVU/John – An old favorite but we lost interest at about this price last year (coming in from the $2s).  I think they are fairly valued now $8.89 but that means could easily be $7.50 or $9.50 at any given moment.  Falling food prices (DBA) are great for them – as I noted over the weekend, our local markets encourage us to buy corn since it's so cheap for them and, in low-margin supermarkets, those sort of spreads can really make them.  As you've sold $10 calls which are now .55 in Jan and $1.15 in 2016, I would suggest cashing the stock at $8.68 and buying the 2016 $7 calls for $2.55 and selling the $7 puts for .95 and that takes $7.08 off the table, which is about your entire investment and then you still get called away with 100% of the profit between $7 and $10 or you have the stock put back to you at $7 and miss out on $1.90 of downside.

    BRK.B/Akad – First of all, it was just an example and second of all, worst case is you get called away at $120 so no worries.  If there's a good roll to be made – you make it but trades like this can't hurt you to the upside.  As to when to roll, it depends what you think will happen long-term.  With AAPL in the Income Portfolio, for example, we deconstructed a very profitable spread and turned it into a riskier spread where our longs now have a time advantage to our shorts.  Still, I think you miss the main point, $106.58 is your net cost on BRK.B in that example so, at $120 to $1,200,000,000, you make $13.42 (12.5%) - nothing in the World can take that away from you at any price.  

    Oh, OK, I guess you see that now.  


  90. HLF down to $54.63 now.  It's going to be crazy as CEO of HLF will be on CNBC in the morning and then Ackman has his conference around 10.  


  91. Historical options pricing/Maya:

    You can also go to "Think Back" sub tab on the analyze tab and get daily CLOSING options pricing, you just choose the date.  Or, if you want to get it down to the minute, you can hit the "On Demand" button on the top right of the platform page, then choose the date you want and set the time you want. On Demand can actually replay the day second by second, including options pricing.

    On Demand, I believe, goes back about 18 months… Think Back goes further back in time.


  92. Love the call on HLF.  I got in late at $2.20, and just sold half at $3.80.  I'm going to let the rest ride for tomorrow's presentation.


  93. I took $3.80 and ran on the HLF Aug $50 puts ($1.90 entry by the time I got it).  Was too good to pass up and now I hope they bounce so we can do it again.  If not, after Ackman has his at bat, we might be able to go long into Icahn.  


  94. If Ackman really has what he says he has, could be bad… He seems pretty sure of himself! They have been digging for a while.

    "We have hundreds of hours of internal video, Ackman told CNBC's Halftime Report. "We have some internal documents that were given to us by some employees."

    "This will be the most important presentation that I have made in my career," he said. "We won't disappoint."


  95. Phil, thanks for the trade


  96. The original HLF story:

    Submitted on 2012/12/20 at 2:23 pm

    Pershing Square's Bill Ackman gives his presentation on Herbalife (HLF -4.2%) this morning, and Barron's Brandon Conway was there to take notes. Ackman kicks it all off by saying he is in fact short the stock, but refutes the accusation that he's pushing the shares down because he owns puts due to expire at the end of the week. He focuses instead on what he sees as HLF's questionable R&D, phony reliance on PhD credentials, and flashy sales promotions as demonstrable proof of the classic pyramid scheme. Take a look: Barron's HLF presentation notes. 

    Submitted on 2012/12/20 at 10:16 am
    Forbes contributor Igor Greenwald castigates Bill Ackman for shorting Herbalife (HLF -1.4%), accusing him (and David Einhorn) of possible "Look at Me!" self-promotion to "induce a desired result simply by attaching their name to it." Greenwald wants Ackman to "explain how a 'pyramid scheme' lasts 32 years without an army of disabused and dispossessed latecomers … clamoring for refunds," not to mention HLF's stellar financial performance. (Ackman is giving his reasoning now at the Ira Sohn conference in NYC.)
     
    December 20th, 2012 at 2:00 pm | (Unlocked) | Permalink
    HLF/Yodi – Well they are a pyramid company.  Only matters when someone pays attention so a well-timed takedown by Ackerman to goose his fund performance this year.  He is still coming at them with guns blazing though and it's certainly working.  Only thing that can kill it is if SEC person says they've already been investigated and it's a non-issue. 
     
    Submitted on 2012/12/19 at 5:15 pm

    Herbalife (HLF -11.9%) CEO Michael Johnson responds to Bill Ackman's accusation that the company is a 'pyramid scheme' countering that Ackman is improperly trying to manipulate Herbalife's stock and the SEC should take action. Johnson says company is a legitimate business with "millions of customers" and real business model. Ackman's short is about his own business model, not about HLF's. (video)

    In the end, HLF dropped from $45 to $23.50 before recovering VERY FAST back to $43.69 (and on to $83 in Jan of this year) - so be super-careful with this one!  

    Ackman/StJ – As I wanted to point out above – he always seems sure….

    There is no doubt HLF is a pyramid, the question is whether they crossed the line to be an illegal one.  If HLF has a leg to stand on, they should come out and sue Ackman for harassment at this point.  Of course, I don't think they do have a leg to stand on and those technicalities can be unwound if the thousands of field people don't know where that line should be drawn when they recruit people.  

    Of course, good luck catching the company in court (Cayman registered).  

    You're welcome Abhish.  


  97. Zero Hedge peddles Russian stories about the plane crash:

    http://www.zerohedge.com/news/2014-07-21/russia-says-has-photos-ukraine-deploying-buk-missiles-east-rader-proof-warplanes-mh1

    Reading comments from the viewer, you can tell that they are just catering to the blind hate of many. Almost worse than Fox News. Just despicable.


  98. abhishekseth2 – AAPL is a very manipulated stock!

    AAPL OCT14 C95 should be good. This stock is going to $100 within the next 45-60 days (probably MUCH sooner). My plan is to add to my AAPL positions if they try to crush AAPL after earnings (i.e., scare people out). Regardless, I am positioned in AAPL for after this earnings, so I am not too concerned about tomorrow. Remember, if you do get out with a profit today, you can ALWAYS get back in AFTER earnings! Alternately, you could always hedge your position with some out of the money short-term calls.

    Please note: AAPL most likely will pull back when it reaches $100 because of profit taking, unless they manage to gap it up well over that. Nonetheless, even if they manage to do that, AAPL would then most likely “retest” $100 (albeit from above) before it continued its climb.

    So a trade setup might be to see how AAPL responds to $100. Then short AAPL (short-term put trade only) if it fails $100 (selling pressure) or to go long if AAPL breaks $100 (especially if a retest bounce off of $100 is subsequently successful).

    ALWAYS scale in to any position and keep position sizes manageable!


  99. Thanks Diamond!


  100. Phil,

    thanks for the reply.  So would you rather sell the puts, or do the spread?  My account will allow either. Also, I noticed the last time you mentioned ARO a week ago it was for the 3.50/5 spread for .40, so is the 2.50/4 more appropriate now?  

    And a newbie question here, how do I see the virtual portfolios?  When I click on that link I see the May portfolio reviews, but not a listing of the portfolios and their contents like you show in your conference calls.  Just curious if there is a place to see them on the site.

     

    thanks again.


  101. Don't think we need activists like Ackerman and Icahn.  Maybe they do some good, but it is purely accidental if they do.  I think they do more harm than good.  Their agendas are pure personal greed.


  102. nflx?!?!?!?!


  103. Russia/StJ – Some people just like to have someone to hate, I suppose.  

    ARO/Dforst – The other spread is very aggressive (and officially in our portfolios), I do like it but we were discussing more conservative positions in a small portfolio today and the $2.50/4 spread is less risky.  I like both ways of playing or a combination of both (to lower the net cost of the spread) on ARO, that's why we took a heavy position in the STP and Income Portfolios.  

    Activists/Albo – Muddy Waters does some good.  Like anything, some good, some bad.  More often bad though with these fund manager/meddlers.  

    LOL on NFLX – Spiked $432 to $469 and back in between now. 


  104.  CMG had a big beat.


  105. Yup, CMG up 8%….


  106. almost a 2 billion dollar move on CMG's market cap.  Amazing.  The company is teflon.  People will buy their burritos no matter how much they raise the price.


  107. Phil – NFLX only has Oct14 options between 435 and 455 (5 strikes). What does the market maker know for certain? Should I bet the farm on a 435/445/455 butterfly? ;-)


  108. Yodi, was this you?

    $CMG JUL.25 CALL SPREAD 630/635 with 484 contracts at 15:59:49 EST @OptionsFlux – isnt it funny?? lol


  109. Ok, I did get the puts sold, 5 @ $.70 but the spread order didn't go thru.  I'll try again tomorrow.  

    I think i understand the logic on selling puts, and I think I like it.  Although this is the first time I've done it in my real account. so really, worst case is the stock tanks and I have to pay $1500 for the 500 shares, which may or may not be worth $1500 at that point.  But whatever they are worth if/when assigned I still have the $350 premium I sold so that offsets anything below $3 if assigned.  , so my breakeven is $3-.70 = $2.30 and Best case is they continue to rise and I end up with an easy 3% overall, but really $350/1200= 30% return on margin (roughly).   Is that the basic idea?  


  110. Rustle:

    Teflon is right. Which is why I so perplexed that CMG dropped from from 590.00 to 505.00, and then down to 476.00 on the announcement that they were going to raise prices a little.

    More perplexing is that I didn't buy the 470.00 calls back then when I was looking at them. On 4/28 the Sep 470 calls were mark 39.80, tomorrow if CMG opens in the cash market at 650.00 these calls will be worth more like 175.00-180.00

    Hindsight…live and learn.


  111. CMG / Burrben – Wow, that's not suspicious…. Someone knew something?


  112. guys
    where are you getting consistent forward looking div dates -
    havin a hard time finding a reliable source


  113. Money Flows: Buying on Weakness

    BLOCK TRADES
    PwrShrs QQQ (QQQ) = $271.71 (million)

    Big boys expecting some good news aggressively bought the dip …

    (credit: Cobra)


  114. wombat – Try: Dividend.com



  115. Phil, thanks for the look at AVD. When you say Zacks doesn't like them are you just referring to the zacks rank? What sources of news stories in the Yahoo Finance summary section do you look for instead of seeking alpha/Motley Fool etc to indicate that the stock might not just be a trading vehicle. Thanks! 


  116. Phil/Dubai – My wife's cousin (who we just spent a week with in NC) is executive chef opening that Four Seasons…I am quite sure it would be a worthwhile experience, despite the distance.  It sounds like a Vegas hotel on steroids.  


  117. From Bloomberg, Jul 22, 2014, 3:48:25 AM


    July 22 (Bloomberg) — Robert Subbaraman, Singapore-based chief economist for Asia excluding Japan at Nomura Holdings Inc., talks about Indonesia’s presidential election, and its implications for the nation’s economy and financial markets.
    Indonesia is due to announce the winner of the closest presidential vote in a decade today. Subbaraman speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    European equities advanced with
    Russian stocks while gold and Treasuries slipped as the stand-off surrounding a downed passenger jet in Ukraine eased. Chinese
    shares jumped by the most in three months and Indonesia’s rupiah
    tumbled as a candidate rejected election results.

    To read the entire article, go to http://bloom.bg/1sH5Jux

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


  118. From Bloomberg, Jul 22, 2014, 3:54:42 AM

    Indonesian stocks retreated from a
    13-month high and the rupiah snapped a four-day rally after
    presidential candidate Prabowo Subianto rejected the election.

    To read the entire article, go to http://bloom.bg/WAg1ja

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


  119. From Bloomberg, Jul 22, 2014, 4:21:50 AM


    July 22 (Bloomberg) — Saudi Arabia will open up its stock market to international investors in the first half of 2015, giving foreigners greater access to the Arab world’s biggest bourse as the oil-rich kingdom seeks to diversify its economy.
    Zainab Fattah reports from Dubai on Bloomberg Television’s “The Pulse” with Guy Johnson. (Source: Bloomberg)

    Saudi Arabia will open up its stock
    market to international investors in the first half of 2015,
    giving foreigners greater access to the Arab world’s biggest
    bourse as the oil-rich kingdom seeks to diversify its economy.

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

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


  120. From Bloomberg, Jul 22, 2014, 4:03:48 AM


    William “Bill” Ackman, founder and chief executive officer of Pershing Square Capital Management LP, in New York. Photographer: Scott Eells/Bloomberg

    Herbalife Ltd. (HLF) shares fell the most in three months yesterday after billionaire Bill Ackman vowed to show Enron Corp.-like fraud at the seller of supplements and weight-loss shakes.

    To read the entire article, go to http://bloom.bg/1jRSR1E

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


  121. From Bloomberg, Jul 22, 2014, 1:37:45 AM

    By the end of the first quarter, demand for copper exceeded output by 84,000 metric tons, according to the International Copper Study Group. Photographer: Brent Lewin/Bloomberg

    Investors are buying metals from
    zinc to aluminum at the fastest pace since 2009, betting demand
    gains will tighten supply, just as Citigroup Inc. and Macquarie
    Group Ltd. predict this year’s rallies will end.

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

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


  122. From Bloomberg, Jul 22, 2014, 12:00:00 AM


    July 16 (Bloomberg) — Federal Reserve Chair Janet Yellen comments on financial stability, the central bank’s balance sheet, the U.S. economy, Fed independence and monetary policy.
    She speaks before the House Financial Services
    Committee in Washington. (This report contains excerpts of Yellen’s testimony. Source: Bloomberg)

    Wall Street doesn’t lead to Jackson
    Hole this year.

    To read the entire article, go to http://bloom.bg/Wuci6s

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


  123. From Bloomberg, Jul 21, 2014, 10:50:44 PM

    Nicholas Valtz was born in Paris,
    earned letters as a fencer at Harvard University, loved fast
    cars and worked his way up to managing director at Goldman Sachs
    Group Inc. in New York, one tier below partnership.

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

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


  124. Watch this video at http://bloom.bg/1rwskd5

    Ackman: We Spent Investors’ $50M Probing Herbalife

    July 21 (Bloomberg) — Pershing Square CEO Bill Ackman discusses the fifty million dollar investigation against Herbalife and the goal to catalyze regulatory interest with Stephanie Ruhle and Erik Schatzker on “Bottom Line.” (Source: Bloomberg)

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


  125. Watch this video at http://bloom.bg/WsEPJn

    Ackman: I’ll Expose Herbalife for Enron-Like Fraud

    July 21 (Bloomberg) — Herbalife shares fell the most in three months after Pershing Square Capital founder and CEO Bill Ackman vowed to show Enron-like fraud at the seller of supplements and weight-loss shakes. Mr. Ackman spoke on “Bottom Line.” (Source: Bloomberg)

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


  126. From Bloomberg, Feb 24, 2014, 6:00:29 PM


    Photographer:&nbsp;Hiroshi Watanabe via Getty Images

    Being a currency isn’t always easy. Sometimes they’re asked to be weak. Weak can be good. But not too weak. That can be unneighborly, or cause inflation — and if a currency weakens too fast, that might be a crisis. What’s a currency to do?

    To read the entire article, go to http://bloom.bg/1eqKLE7

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


  127. From Bloomberg, Jul 22, 2014, 12:01:00 AM

    U.S. Border Patrol agents numbered 21,391 in the year that ended Sept. 30, up 22 percent from 2008, before Obama took office, and almost twice as many as a decade earlier, according to the Department of Homeland Security. Photographer: Amanda J. Crawford/Bloomberg

    The 1,000 Texas National Guard
    troops Governor Rick Perry will send to the Mexican border will
    augment almost 10,000 federal agents already there, part of an
    unprecedented buildup guarding a line with more physical
    obstacles than ever.

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

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


  128. From Bloomberg, Feb 24, 2014, 6:08:57 PM

    I can’t really justify this except to say that it references the kitten with a credit card from Friday. But I can’t really justify that one either. Photographer: Dan Brownsword via Getty Images

    On Friday, I wrote about the delightful capital arbitrage of DTA-linked notes, in which banks are looking to “get ‘capital’ by securitizing tax deductions from past losses.”1 As I put it then, one way to get capital is to sell stock, which is expensive, so the banks are looking to rely on magic instead, because magic tends to be cheaper.

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

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


  129. From Bloomberg, Feb 24, 2014, 1:24:43 PM


    The reasons to restrict handgun ownership for people under 21 are as obvious as they are sensible.&nbsp;Photographer:&nbsp;Spencer Platt/Getty Images

    The U.S. Supreme Court today told the National Rifle Association something the NRA has always known: Under the U.S. Constitution, gun possession can be legally regulated.

    To read the entire article, go to http://bloom.bg/1eq7csT

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


  130. From Bloomberg, Jul 22, 2014, 4:58:34 AM


    America’s fragile housing recovery is getting a boost from military buyers like Air Force Staff Sgt. Claude Hunter using VA mortgages as the U.S. draws down troops after more than a decade of combat in Iraq and Afghanistan. Photographer: Andrew Harrer/Bloomberg

    During his third deployment in
    Afghanistan, Air Force Staff Sgt. Claude Hunter was so eager to
    return to the U.S. and buy a house that he signed a contract for
    a property that his agent showed him over Skype.

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

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


  131. From Bloomberg, Jul 21, 2014, 11:20:30 PM

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

    More than a year after securing support at the Bank of Japan for unprecedented monetary stimulus, Governor Haruhiko Kuroda has yet to persuade most board members that they have the power to achieve their inflation target.

    To read the entire article, go to http://bloom.bg/1rkY4A2

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


  132. From Bloomberg, Jul 22, 2014, 12:53:28 AM


    The Chinese owner of Smithfield Foods Inc. is selling shares in Hong Kong after cutting the number of main bookrunners on the deal to two, from a record 28 in its last attempt. Photographer: Daniel Acker/Bloomberg

    WH Group Ltd., the world’s biggest
    pork producer, plans to seek a valuation of about 11.5 times
    estimated 2014 earnings for its $2.36 billion Hong Kong initial
    public offering, said people with knowledge of the matter.

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

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


  133. From Bloomberg, Jul 21, 2014, 11:03:59 PM


    Malaysian Air’s shares tumbled 11 percent the day after Flight 17 was shot down, killing all 298 people on board. The incident came four months after the disappearance of Malaysian Air Flight 370 spurred the longest search for a missing plane in modern aviation history. Photographer: Brent Lewin/Bloomberg

    Malaysian Airline System Bhd. (MAS), reeling from its second disaster in four months, is likely near the end of its days as a publicly traded company.

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

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


  134. From Bloomberg, Jul 21, 2014, 12:23:08 PM


    July 16 (Bloomberg) — Federal Reserve Chair Janet Yellen comments on financial stability, the central bank’s balance sheet, the U.S. economy, Fed independence and monetary policy.
    She speaks before the House Financial Services
    Committee in Washington. (This report contains excerpts of Yellen’s testimony. Source: Bloomberg)

    One of the Federal Reserve’s first post-crisis tests of its ability to quash excessive risk-taking using regulatory tools is so far looking like a failure.

    To read the entire article, go to http://bloom.bg/1p7eY3i

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


  135. From Bloomberg, Jul 21, 2014, 12:00:01 AM


    Non-luxury buyers are leasing at a pace not seen since the late 1990s. Advertising consultant Drew Ament and his wife leased a Kia Sorento for $450 a month for 36 months in February.Photographer: Daniel Acker/Bloomberg

    When Adam Gilgis leased a Volkswagen GTI this month, he had one goal: a low monthly payment.

    To read the entire article, go to http://bloom.bg/1yOk6h1

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


  136. From Bloomberg, Jul 21, 2014, 12:00:20 AM


    Texas Governor Rick Perry and legislators have lured businesses with subsidies from the Texas Enterprise Fund. Photographer: Chip Somodevilla/Getty Images

    Texas Governor Rick Perry, seeking political redemption in Iowa, spent his weekend waiting almost two hours in a school cafeteria to speak to Republican activists, attending local church services and eating barbecue with fellow veterans.

    To read the entire article, go to http://bloom.bg/1p6IQwR

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


  137. From Bloomberg, Jul 21, 2014, 10:00:56 AM


    Americans are delaying retirement, which could prolong wage drag in the short run because older workers earn less. Half of workers will wait until after age 65 to retire, up from 34 percent in 2011, according to a 2013 Towers Watson &amp; Co. survey of more than 4,000 retirement-plan participants working full-time. Photographer: Meg Roussos/Bloomberg

    Federal Reserve Chair Janet Yellen’s focus on wages to help gauge the strength of the job market could need fine tuning as baby boomers approach the twilight of their careers and millennials jump in to fill the void.

    To read the entire article, go to http://bloom.bg/1p74q4u

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


  138. From Bloomberg, Jul 22, 2014, 12:39:58 AM


    Reserve Bank of Australia Governor Glenn Stevens. Photographer: Patrick Hamilton/Bloomberg

    Reserve Bank of Australia Governor
    Glenn Stevens said he’s content with the current monetary policy
    setting and stands ready to do more if needed.

    To read the entire article, go to http://bloom.bg/1sI2djs

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


  139. From Bloomberg, Jul 22, 2014, 4:41:57 AM

    Britain’s budget deficit was little
    changed in June as the economic recovery boosted tax receipts
    and government departments increased spending.

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

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


  140. From Bloomberg, Jul 22, 2014, 2:43:09 AM


    Mario Draghi, president of the European Central Bank. Photographer: Andrew *** Local Caption *** Mario Draghi

    Mario Draghi’s ambitions to weaken the euro are at the mercy of Federal Reserve Chair Janet Yellen.

    To read the entire article, go to http://bloom.bg/WA3tIE

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


  141. From Bloomberg, Jul 21, 2014, 7:53:54 PM


    July 16 (Bloomberg) – Federal Reserve Chairman Janet Yellen speaks about the U.S. economy and Fed policy.
    Yellen testifies before the House Financial Services Committee as part of her semi-annual report to Congress. (This report is part one of the hearing. Source: Bloomberg)

    Federal Reserve researchers said
    they see a “number of reasons to be optimistic” about
    improvement in the U.S. labor market after a “sizable decline”
    this year in long-term joblessness.

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

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


  142. From Bloomberg, Jul 21, 2014, 3:03:47 PM

    U.S. Senator Ted Cruz, Republican of Texas and Tea Party favorite, wants to unload federal land by turning it over to the states or selling it to private buyers. To Cruz, this is one way to scale back the reach of the federal government into the lives of private citizens.

    To read the entire article, go to http://bv.ms/1n5Ofoo

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


  143. From Bloomberg, Jul 21, 2014, 1:30:09 PM

    Last week, I pointed out some statistical errors in a chart suggesting that Rupert Murdoch’s bid for Time Warner was a sign of the market’s top. The chart had enough omissions to render it useless.

    To read the entire article, go to http://bv.ms/1u8mFvt

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


  144. Phil / HLF     Now in   $ 51.00   perhaps is a good chance to sell some puts…. as  Sep´14 50 @5.50..



  145. HLF / Advill – You might want to wait until after Ackman's little show today… He did say that he would destroy HLF and supposedly has tons of evidence! We'll see but I would not touch these guys at this moment, could go either way.


  146. Good morning!  

    HLF/Advil – Well I really hate to chase, if anything, I'd just play for something way out of the money, like the Aug $40s for $1.50 and then quickly take 1/2 off the table if they go to $3.  Those of us who caught it yesterday got a quick 100% profit and what I like about taking it off the table is now I have 100% to play with and I can't lose off the original bet.

    The CEO of HLF will be on CNBC this morning.  Hopefully he will say what Ackman has to say is all BS, etc. and it will pop back up for a better short opportunity.  

    Futures are up 0.3%-0.4%, Oil hit $103 (/CLU4) and a shocking $105 on /CLQ4 – that's the biggest last-day spread I've ever seen!  Still shorting /CLU4 at $103, of course.  


  147. Looks like /CL (sept) has been over 103, high of 103.35, since 1am.  It briefly fell below 103, down to 102.95 and then spiked up.  Almost looks like 103 is forming as support.  

    Wait, wait, wait.  Stop.  Brain thinking for self.  Bad brain, bad brain.

    I. Short. Oil. Below. 103. Cross.  (robot voice)


  148. NFLX/Diamond – I think that just means they haven't gotten around to setting the prices on other strikes yet (tricky with earnings).  

    Puts/Dforster – Yes, that's exactly it.  Essentially, you are promising to buy a $3.25 stock for net $2.30, which is 30% off the current price.  If the stock is not below $3, you will not be able to buy it and, as a consolation prize, will get 0.70, which is still more than a 20% gain if you had actually bought the stock.  So worst case is you get a 30% discount and best case is you make 20% without ever actually owning the stock – and the stock doesn't even have to be higher for you to win – just stay over $3.   Hopefully how you can see where entering the majority of your positions this way will give you a huge advantage in your trading.  

    The best put sales are the ones where you are pissed off that you DIDN'T get the stock put to you at the low price (like our heavy sale of AAPL Jan $85 puts).  

    CMG/Jbur – The customers are simply demand inelastic to the price of the food.  Like NFLX, CMG will be able to exploit that for a while.  That's why we jumped into our bullish STP position when they announced they would raise prices – there was almost zero customer blowback the last time, so we assumed the same this time.

    We were talking above about why I started keeping a blog and it's exactly because it allows us to go back to the last time CMG raised prices and look at the news and commentary from the days around it and look at the price action and get a good idea of how the stock reacted and why.  And it's not enough to just look at CMG – it has to be put in the context of the broader market.  Also, in this case, food costs have come down considerably – especially corn, which they use a lot of, as well as avocados.   

    If you want to know who else will have a big beat – try SBUX with coffee plunging.  

    AVD/Bdon – No, I was referring to the article by Zacks I linked to right in my comment.  As to what news sources, Seeking Alpha, Fly on the Wall and Motley Fool are all jokes that are treated as news by Yahoo.  Now, you have to take into account that people still follow that crap so it's not so much that we discount it entirely but we need to see it for what it is.  It's like TA, enough people follow it so we may as well look at it…

    We know those guys are full of pump and dump scammers so if the only news on a company you see is from services where any idiot can write an article (ie, not Forbes, WSJ, Barron's) and when a supposedly mature stock has to pump out a large amount of its "news" through Business Wire or other PR services – those are red flags that should make you realize the stock you are looking at may be highly manipulated.   Also, any stock under $1Bn is going to be easy to shove around, the lower the better 

    In checking AVD just now in news, I happened to catch STNG, who are buying back $150M of their own stock and just announced buying 6.3M shares at $9.74 average, so they are halfway done.   They are a tanker company and not one of my favorites but that's 10% of their company they are buying back and the fact that they have more to spend puts a nice floor on them:

     They pay a 4% dividend and you can buy the stock for $9.92 and sell the Jan $10 puts and calls for $2 to net $7.92/8.96, which isn't much of a discount if put to you (10%) but that's for just the first 6 months.

    Dubai/Cdel – It's on my list but, like Australia, Macau and New Zealand – I just can't get motivated to make that kind of travel commitment (13 hours non-stop).  Gotta have something to look forward to when I retire, right?  

    Big Chart – Still waiting for those new highs (or for the RUT to break 1,153).  

    $103 not breaking on oil so far.  It's going to be an interesting day! 

    LOL Burr!  Thinking is very dangerous in this market.  


  149. Although I am thinking that /TF will make a nice long if they break over 1,150, with tight stops below that line.