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Thursday Thrust – More Free Money on the Road to 2,000

SPY 5 MINUTEUp, up and away!  

Don't worry about the fact that the volume is so low we had to check if the market was actually open.  Don't worry about the fact that net $852M flowed OUT of SPY yesterday - even as the index gained another half a point.  Just keep your eye on the prize at 2,000 on the S&P and all will be well.  

China is giving us a boost this morning with positive PMI data but, as I noted to Members this morning, the PMI is just a survey of the OPINIONS of Purchase Managers for what they expect over the next 6 months and it's mainly just a feedback loop of market sentiment.  As Dave Fry observed:

Overseas China stocks rallied on mere speculation the government will promote stimulus measures to boost growth. The government may engage in “monetary easing and support the housing market,” said Benjamin Tam, a fund manager who helps oversee about $1.5 billion at IG Investment Management (Hong Kong) Ltd. “People are still optimistic that the government policies will support growth in China. All of that is positive and that’s why the market is moving higher.” This is the speculative chatter driving up shares.

Last summer, for example, China's September PMI came in surprisingly positive last year and then had 9 out of 10 negative reports afterwards.  Yet, somehow, this kind of history lesson does not stop traders from rushing back into Chinese stocks as if they've just gotten the "all clear" signal they've been waiting for.  

Of course MORE FREE MONEY is always good for the markets and we're not fighting the Global Fed (in fact, Tuesday's $10,000, 1,000% trade idea is right on track with only 22 days to completion) – just trying to temper the enthusiasm – just a little…  

We're still shorting Oil (/CL) Futures at that $103 line and we hit it again this morning and hopefully we'll get a nice pullback around 10:30 – after the natural gas report shows a nice build.  Natural Gas (/NG) is not playable at $3.78 but it will make for a nice long at $3.50 – if we get there.  

As noted in yesterday's post, we are still EXTREMELY skeptical of this rally – though that does not stop us from going along for the ride.  What it does do is keep us mainly in CASH!!! with one hand firmly on the exit – just in case it all hits the fan.  As of last night, our Long-Term Portfolio was up 19.6% and our more bearish Short-Term Porfolio was up 11.5%.  The S&P meanwhile, even if it hits 2,000, is up just 8% from it's 1,850 start in January.  

So our gains are mostly off the table and we'd LOVE to see a nice, HEALTHY correction back to 1,950 but, so far, the market refuses to oblige.  That's why we went long on the Russell on Tuesday – as the other indexes break up, the Russell has turned into a laggard and could easily pop 5% to catch up.  

Meanwhile, we're watching the Dow and the Nasdaq closely to see if they can make new highs before the clock runs out on the week:

 


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  1. How do these people sleep at night:

    http://talkingpointsmemo.com/cafe/gop-halbig-punitive-damage-soviet-communism

    Congress could make the Halbig ruling completely irrelevant with a paragraph-long bill qualifying that state exchanges run by the federal government are equivalent to state-run exchanges. But that would require House Republicans to acknowledge that ACA is the law and it’s providing people with benefits. That would distract them from the very important task of demanding full, unconditional repeal. They’d rather people pay more.

    Its hard to escape the conclusion that this isn’t just meant to prove an ideological point. It feels downright punitive.

    The punishment impulse in right-wing politics isn’t limited to health care. You see it in the continued refusal to extend unemployment benefits, the constant demands for drug-testing food stamp recipients, and the creepy belief that birth control shouldn’t count as health care because sex needs to have “consequences.”

    It seems as though there’s a deep grudge running through right-wing legislators, judges and legal scholars. They can’t seem to get over their anger that America voted to elect and reelect President Obama, and they’ve never gotten over the fact that the Affordable Care Act is the law.

    So they’re taking it out on middle-class and working-class families who stand to gain the most from Obama’s biggest achievement. The Halbig decision inspires delight on the right because it looks like a win against Obama, but the nauseating undercurrent of their glee is that it’s really a loss for the people who put Obama in office.

    Cheering for bad outcomes that you helped create is a pretty lousy way to behave in a democracy.


  2. Oil Lines

    R3 – 105.09
    R2 – 104.21
    R1 – 103.67
    PP – 102.8
    S1 – 102.25
    S2 – 101.37
    S3 – 100.83


  3. iphone


  4. Oil (/CL) coming back up after testing $102.60, maybe will get to $103 again at the NYMEX open (9am). It's a rough short until the Nat Gas Report at 10:30 but I am hopeful we get a nice sell-off today.  


  5. BRICs would be doing better if it was not for Russia:

    http://blog.yardeni.com/2014/07/brics-outperforming-despite-russia.html

    The BRIC MSCI stock price index is up 17.4% since it bottomed earlier this year on March 14. They must be attracted to the relatively low valuation of the index, which has a forward P/E of 9.0 though with quite a bit of dispersion: India (16.1), Brazil (10.3), China (8.9), and Russia (4.9). On a ytd basis and in US dollars, the India MSCI stock price index is up 22.5% followed by Brazil (15.5) and China (0.9). Russia is back down by 14.5% after the downing of the Malaysian passenger jet. 


  6. As good as FB earnings are, I would never buy a social media company.  Next fad is around the corner all the time and FB is buying companies up left and right because they know that.  In 5 years from now, who knows if they'll be something better or cooler.  Myspace was big for awhile too.  And also when they show how many users they have, such bullshit.  There are so many fake FB accounts created and so many created years ago that people never log onto at all or very rarely anymore.  Very hard to have your FB account totally deleted for that reason.


  7. BTW, wouldn't short FB either


  8. Good morning, by the way.  

    Here's a good chart illustrating how abnormal the current rates are:

    7-23-14 longterm int rates

    On the bright side for the bulls, however, is that when the rates did bottom – they stayed down for years.  Interestingly, the last time was after WWII, when the Government also had a massive debt to pay off.

    In looking over earnings this week, they have been very strong, with way fewer misses than we've been having – that's a good sign.  This morning has been a bit worse, but nothing alarming. 

    I just heard that Algeria plane has officially crashed, they don't know why yet.  Could be just a symptom of all this extra air travel going on – there has to be a strain on traffic control and maintenance if the number of flights is shooting up without more hiring and training of support people.   Also that pilot issue we discussed in detail last week (great commentary by Buster).  

    FB/Rustle – I didn't account for the huge kick they would get off their mobile push – really dramatic numbers there even though the Facebook Phone was an epic fail.  62% of their revenues came from Mobile Ads, up from 41% last year – that was pretty much all of their gains as on-line has flattened out.   Still, in the long run, they earned .42 per share and even if it's $2 for the year next year, that's still a 35 forward p/e.  If we believed they could keep up this growth to get to $3.50 (p/e 20) and give them $2 in 2016, it's still 3 years of 30% growth to get to $3.50 so, as long as they keep growing at 30% and keep their margins up and their costs down and as long as no other App comes along in 5 years to replace them – THEN it will only take them 20 more years to make back the $75 a share they are now commanding.  Meanwhile:

    Yikes! 


  9. New Members: If your portfolio is not hedged, you should check with Phil as to proper hedges. Alternately, make an exit plan!


  10. SKX up 9.5%… Wow! I bought a paid last month but I didn't think it would affect the stock that much. Love them though.


  11. FB coming back down=think I'll short. they're cheap now


  12. Tasr inching back up; for how long is the ?


  13. scottmi re: UNP, looks like a beat but still selling off this am.  Glad I didn't do anything new ahead of earnings.  I wonder if it's because they're so dependent on coal shipments?

    Are you still thinking to add longs after the dust settles?

    Thanks


  14. Phil

    Pretty impressive bounce by IRBT.


  15. Earning yesterday-met est but down on revenue. Things are slipping again. WOW-new housing down AND big revision down in May.


  16. Woops, there goes 50 points on the Dow in 5 mins.  What insanity.

    As Diamond says, let's make sure we are ready to get off this ride on short notice!  

    SKX/StJ – Wow, it's been ages since I used to bang the table on those guys in the teens.  They have really gotten into a groove now. 

    FB/Pirate – Stay away, I think.  Crazy movement.  

    Meanwhile, our trade idea for FB earnings yesterday was:

    FB/JMD – Ridiculous pricing.  I'd do a backspread, selling 5 Aug $75s for $1.75 ($875) and buying 4 March $75/80 bull call spreads to cover for $2 ($800) and get the $75 credit plus whatever is left on the spread.  

    At $74.90, the Aug $75s are $2.50 ($1,250) and the  March spread is net $2 ($800) still, so -$450 as is less the $75 credit is -$375 – not too terrible for a drastic move against us.  The Aug $75s are all premium, of course, so it could be stuck with or the Sept $77.50s are $2.85 and the Oct $80s are $2.80 so, if we can roll up $2.50 per month between now and March, that gives us 7 x $2.50 of headroom – up to $92.50.  Realistically, though, our premise is blown and I wouldn't be too interested in sticking with the trade, but I also wouldn't be inclined to take a loss just yet as the Augs are 100% premium.  

    The overriding premise on FB was that, even if they did do well, they are already priced to the moon.  It will be interesting to see where they settle out – to see how crazy valuations can really be.

    TASR/Pirate – It's our Stock of the Decade, not the week!  cheeky

    IRBT/DC – That one is our Stock of the Century but not that impressive of a bounce:

    $42 to $36 is 14.2% so close enough to 15% ($35.70) that I'd rather use the even line and that means we want to see $1.20 weak bounce ($37.20) before we'd even consider jumping back in and really it's already too late for a weak bounce to be impressive (day 2), so now we want to see a strong bounce at $38.40 to give us a renewed bullish signal.  Notice how $38.40 is about where they topped out before earnings – that gives us even more reason to wait for that line. 

    Keep in mind that, with option trades, it really doesn't matter if we get in at $36 or $38.40 because the trade we'll set up will use leverage and pay us 300% on cash – AS LONG AS IRBT DOESN'T GO DOWN.  So there's no need to run around trying to find a perfect bottom (or top for shorting), the key is to be sure enough of where the bottom and top should be to make a long-term commitment.  

    For instance, we can sell the IRBT March $29 puts for $2 and use that money to buy the $33/37 bull call spread for $2.60 and that's net .10 on the $4 spread that will profit $3,900% on cash if IRBT is over $37.  But it's not the $37 we're really worried about – it's whether they will hold $29 – that's where our risk is.  Being SURE they are done going down is far more valuable to us than missing a small move up, as we can easily adjust our brackets or we could pick a different strike at $38.40 and maybe we'll only make 500% back on cash instead of 3,900% but NOT LOSING is more valuable than winning a bigger percentage.  

    Woops, big miss on home sales

    • June New Home Sales: -8.1% to 406K vs. 479K expected, 442K prior (revised from 504K).
    • Median sales price $273.500.

  17. HLF – Is interesting now on several fronts.  A short squeeze is certainly possible at this point.   If Ackman is wrong in any of his accusations, wouldn't be surprised to see HLF sue him.  He is obviously trying to destroy the company so that he can make a buck.

    Alternatively, I wouldn't be surprised to see Icahn declare victory and start lightening his position. 

    Phil, as you have pointed out, Ackman may ultimately end up winning the battle.  Wouldn't want to play it either way.


  18. TEX – taking a beating


  19. I didn't do the FB trade-had an inkling they would beat. All my family uses it & it is super on the cells for messaging & pictures. Helps to keep in touch with the family all over the country ( & world.) I don't have a lot of time for it & get 25 requests to play "games" which I constantly say I have better things to do with my time. Stocks & options are enough for me!


  20. Phil/IRBT

    Well said. Thank you.


  21. HLF / Albo – Let's not forget all the other investigations currently ongoing – SEC, state AGs and others. Ackman is only one of many headhunters! I would certainly not touch that stock either…


  22. Phil

    Can you recommend a decent NASDAQ hedge whether its using QID, QQQ, or SQQQ.  All of my NAS positions are covered and at least six months out (mostly 2016). 


  23. TRIP dive 11.4%


  24. HLF/Albo – I sure wouldn't want to be long on them.  We are like ants on a football field with giants battling against each other in a game we can barely grasp from our incredibly small point of view.   The two of them have been friendlier lately and who's to say they haven't both realized they can make Billions by simply running the stock up and down 20% ($1.3Bn in cap) every once in a while – rather than all one way or the other?  By maintaining their base positions, both Karl and Bill can "legitimately" have massive option hedges that will make them a fortune on counter-moves, which they then cash in and wait for the next swing to reload.  If they can get the stock to black swan a couple of times a year – they turn .50 options into $20 options overnight on a $60 stock basis.  Wash, rinse, repeat and there's nothing anyone can do about it.  Lampert does it with SHLD all the time.

    TEX/Ivan – I don't know what earnings report people are reading.  Margins were off but they made 0.64 per share (deducting one-time gains that gave them .76) vs 0.17 last Q – that's a nice improvement!  Sales were up 10.4% over last year too.  CEO very conservative and doesn't like the economy – doesn't pay to be a realist in this market:

    “Our results for the second quarter and first six months of the year were mixed both from a business and geographical perspective,” commented Ron DeFeo, Terex Chairman and Chief Executive Officer. “Our Aerial Work Platforms (AWP) segment had a strong quarter but margins were slightly lower than a year ago due to product mix and planned investments in new product development and manufacturing footprint. We expect this dynamic to continue through the remainder of the year, although on increasing sales versus the prior year. Our Cranes segment is making progress, as bookings were roughly equal to net sales during the quarter and the order entry run rate was 12% above the prior year level on a year to date basis. Our Construction and Material Handling & Port Solutions (MHPS) segments both delivered quarters roughly in-line with our expectations, while the Materials Processing (MP) segment had a more challenging quarter from a sales perspective than originally anticipated. From a geographical perspective, Western Europe and North America were the growth drivers with increases of 35% and 15% respectively, with the rest of world somewhat offsetting these strengths.”

    Outlook: “The Company’s overall outlook for 2014 remains unchanged,” Mr. DeFeo added. “We expect continued strength from our AWP segment and improvement from our Cranes and MHPS segments to drive improved performance for the second half of 2014 compared with the first six months. While we see a slightly weaker end-market than we originally anticipated, from an EPS perspective, the impact on operating earnings is expected to be somewhat offset by both a lower effective tax rate and a lower anticipated share count. We reiterate our annual outlook for earnings per share of between $2.50 and $2.80, excluding restructuring and other unusual items, although now on net sales of between $7.3 billion and $7.5 billion.”

    $2.60 on a $40 stock (not anymore!) is a 15 p/e – fine by me!  We sold 5 of the 2016 $35 puts for $5.30 and I very much doubt $35 is in danger, no less net $29.50.  We also picked up 5 of the 2016 $30/40 bull call spreads at $5.50 and those are still mostly in the money so I'll be liking this for another 5 once the dust settles – now that we have more FACTS to work with. 

    Games/Pirate – There's a thing you can click to block game requests.  That has made my FB experience much less annoying.  

    You're welcome DC.  

    Oil giving us another $250 at $102.75.   I'd take that and run ahead of the inventory as that's $500 for the day already.  Maybe we get a good pop at 10:30 to short again and, if we miss a drop – that's what SCO and XOM puts are for!  


  25. HLF – Phil,  interesting thought about Icahn and Ackman playing ping pong with the stock.


  26. Thanks for letting me know I can block those FB game requests. Still haven't a clue about these ino puts I sold 2.5, 8x for 600 credit. With the reverse split, I don't know if I get them when Ino is over 10 or not. Or do I just let it expire & keep the $. Tried to look up some info-no help. When I called TD they said the strike was changed to 10.00 but the statement says otherwise. Haven't a clue if I should exit out, hold tight. The option for a buyout was skyhigh b-4 the reverse split, or I would've just got out. I got worked over with a etfc option when it had a split so I am leery of these games.


  27. SQQQ/DC – That's my favorite for a hedge and so beaten down at $38.75 makes for a fun play.  

    To go out to the end of the year, the Jan $40s are $3.80 and you can sell the $50s for $2.25 for net $1.55 on the $10 spread.  So, if you want $20,000 of upside protection, you need 20 of those spreads for $3,100 – that's not an expensive hedge on its own.  You can probably look at the positions you have and find some you may want to sell some more puts against as an offset – especially if they are already covered and you expect to get called away – where's the harm in proactively establishing a re-entry by selling some puts at your desired strike. 

    Take TEX, for example, the 2016 $25 puts just popped to $1.75 and that nets you in at $23.25, which is 37% below the current price and 45% below yesterday's price.  So, if you want $3,500, you can sell 20 of those and commit to owning 2,000 TEX for $25 ($50K) to get a free $20,000 hedge.  

    On the other hand, if you wish you had gotten into AAPL at $70, you still can by selling the 2016 $70 puts for $2.50 so 10 of them gets you 1,000 shares of AAPL for $70,000 (a $26,000 discount off the current price) or, if not, then $2,500 in your pocket to buy a hedge with. 

    HLF/Albo – Sadly, happens with a lot of stocks and the way the SEC allows these ridiculous "activist" moves on stocks, not to mention the tweeting etc.  - it's only going to get worse.  

    Nat gas inventories were in-line.  Oil tested $102.50 and back to $102.60 now but failing that line from the bottom (was support) will be a nice bearish sign on /CL.  


  28. INO/Pirate – Your broker (in theory) knows more than I do on that.  As with many splits, there are now two classes of options and you still hold the old ones and, if they are the short $2.50 puts, then you need the stock over $10 for them to expire worthless.  The real danger is, if the stock does drop, your contracts are very thinly traded and you'd have a very hard time getting out.  If you believe in them, it's fine – all they can do is make you buy 1/4x at $10 so, if I understand, you have 8 short old puts which puts you long 200 shares at $10 if assigned so you risk $2,000 to make $600 by holding but also consider that $2,000 is not really at risk outside of BK, you risk whatever the fall might be below $10 x 200 as your worst case.  Do you really think the stock will fall to $8.50, where you lose $300?  If not, then your risk/reward is 1:2 – a good ratio.  If you really think the stock will fall lower than $8.50 – then why the F are you long on it at $12.66 and your course of action becomes very clear.   See how easy that is?  


  29. RIG/Phil – what's your take on their spin-off thing and are they getting cheap enough yet?


  30. Thanks-I need a moment (or two) to digest this. With the stock at 12.80 I think I'll hold tight. Yeh, EZ for you as your used to all these twists & turns. Experts always make things look so easy, like gymnasts, when in fact it takes a lot of practice to become reasonably adept. Which I am working at. Thanks again for your patience.


  31. Ivan_s – I was about to ask the same thing.  RIG stock now yielding over 7%.


  32. Phil/EDZ

    Thanks for re-reviewing the trade once again.


  33. RIG/albo – yep, love that dividend plus the upside potential.


  34. TSLA has been very quiet this week.  Was hoping it would've been more volatile so the premiums would be better into earnings. 


  35. Looks like part of weakness in RIG is in sympathy with DO, which is getting trashed.
     


  36. UNP/Pwright – interesting conf call. lots of anecdotal info about economy with what products are up/down and going where. earnings were good, volume up, profits up, coal only 17% of mix. re crops, going to be record harvests this year so probably higher export shipments later this year, so yes staying in and adding longs. Have an order in for the Jan/Sept 105 calendar call spread @ 1.96 but not filled yet. I see has popped back up to 2.00…


  37. /CL market seems eerily steady for the past hour


  38. /CL-Phil not sure I understand the terminology about failing from the bottom and if you meant 102.50 or 102.60? Can you please explain ?


  39. albo – I am pretty sure that HLF will not sue Ackman. Discovery (legal term) would allow Ackman to climb through HLF’s proprietary records on a massive fishing expedition.


  40. anyone else have a position in de? 

    getting spanked again today as cat came out with more bad news .. de now challenging 200dma


  41. Pirate don't know if you saw this :

    Aegis Capital upgrades INO to Buy from Hold and raises their tgt to $19 from $10.


  42. Jabo / TSLA
    So, mark the day. I have taken the quiet to liquidate my huge TSLA play. I need the margin and just need to move on. Sorry Jabo.


  43. LLY     I don't understand this market. LLY reported bad Y  over Y numbers and patent expirations yet is UP almost 1% today. They are "working on controlling costs" and should return to growth in 2015!!!!

     

    I'm not in the drug sector (thinking about PZE though) because of these specific issues. Guess I'm just completely out of sync.


  44. PHIL/TEX

    I entered the trade when you posted it, and also sold Oct 42 calls which are up over $1000. The entire grouping is up $1100. I like to sell short options as insurance, and find they are successful most of the time.


  45. /CL U V fans
    Death Cross !!!!!


  46. ~~SodaStream jumps 14% after Bloomberg says in talks to go private.

    at theflyonthewall.com(Thu 11:41AM EDT)


  47. Wombat

    Death cross??  What are you looking at?


  48. FU Wombat!!!!


  49. ;-)


  50. toe

    Have been watching them since I exited back in April. They are reliant on emerging markets for future growth. CHINA! I still think they are a good long term hold and one to accumulate when the dust settles ($84-$86). Long term it's a great holding. Good luck!

    http://seekingalpha.com/article/2300445-deere-and-company-love-the-company-but-its-not-cheap


  51. jabo / TSLA
    it's OK man – I was actually bracing for that ; >
    We can still be friends, right ?


  52. RIG/Ivan – RIGP is more of a tax/bookeeping move than a real spin-off.  The new company will own 51% of 3 rigs that should pull in about $600M a year in revenues and figure RIG's 20% drop to the bottom line means $120M in profits, but maybe better if they have no debt.  They IPO prices RIGP at $1.4Bn and they are going to sell 20M shares for $20 a share ($400M).  So, RIGP gets $400M and RIG owns the other 80M shares of the stock and gets to move the debt of 3 rigs off their books while still booking 49% of the forward profits while the entity they spun out (RIGP) has $400M in cash and 51% of the profits.  It's very clever and a big plus for RIG.  

    That being said, I'd still like to see them test $41 again and hold that to buy more:

    Practice/Pirate – That's exactly what a preach!  A small position like this is a very good opportunity for you to practice patience.  It's the art of doing nothing – making profits by simply leaving a position alone long enough for the premium to expire.  Once you master that, you'll be able to have dozens of positions you only look at once a month or so.  

    You're welcome Jeff. 

    TSLA/Rustle – Doing the opposite, burning off the premiums on both sides.  

    Oil/Craigs – Sorry, I meant the $102.60 line.  We know it's always bad when they fail a .50 line but $102.60 gave them some support on the way down, then broke so we then look for how easily they take it back from below to see if we think the bottom will hold.  As it stands, it does look weak so I do like the short here, even though $102.63 at the moment.  

    HLF/Diamond – Also, they have to prove damages.  Stock is up since Ackman came in.  

    DE/Toe – More of their revenues are US than CAT so I would think they would be a bit less affected but they have underperformed CAT all year (by about 25%).  Back at the 200 dma ($87) they begin to get interesting again.  

    LLY/Tx – It's a stock and stocks go up.  No other reason needed in this market.  

    TEX/Zten – Very nice.  80% of options sold expire worthless.  Makes you wonder why anyone would rather buy than sell them but thank goodness – because those people are our customers!  

    SODA/Albo – There's always a rumor on them to save them from lows – then they resume their downtrend.  


  53. I will be adding to my long term ABX position when it breaks its 200dma. However, scaling in is the key since the chart says it may also soon be revisiting its 50dma thereafter.


  54. ATVI – anyone familiar with their Skylanders franchise? Do your kids know/have/play it? Any feel for how popular it is?


  55. Phil   ROFLMAO  Forgot that stocks go up on any news. 


  56. Phil any thoughts on AAL? They had good earnings but stock is not moving.


  57. It's amazing how awful these Fast Money traders are on CNBC.  Sometimes they show their performance for the year and it's basically flat.  The way they speak about a stock, you'd think they were doubling their money each month.


  58. RIG/Phil – thanks for that… Learning patience for a good entry is not easy but seems to be a critical factor for ultimate success.


  59. Phil – The LAST thing HLF wants is to give a legal reason for Ackman’s attorneys to be able to put present and past HLF management under oath while taking their depositions and answering interrogatories. He could turn the situation from just an irritant to a full blown nightmare!


  60. diamond – Good point.


  61. This whole Ackman vs. HLF reminds of David Einhorn and Allied Capital.  Einhorn was right, but it took a long time to prove it.

    In May 2002, at the Ira W. Sohn Investment Research Conference, Einhorn delivered a speech about a mid-cap financial company called Allied Capital. He recommended shorting the company's stock and shorted it himself.[19] The day after his speech, Allied's stock opened down 20 percent. Einhorn claimed that Allied was involved in lending practices that defrauded the Small Business Administration. Allied said that Einhorn was engaged in market manipulation, and illegally accessed his phone records using pretexting.

    The U.S. Securities and Exchange Commission (SEC) investigated Einhorn for market manipulation, and Eliot Spitzer also announced that he intended to start an investigation.[20] In June 2007, the SEC found that Allied broke securities laws relating to the accounting and valuation of illiquid securities it held.[21] Einhorn has published a book, Fooling Some of the People All of the Time regarding this six-year fight.[22] In late 2008, the SEC began investigating charges that Einhorn has made about the SEC's mishandling of this matter, including the possibility that "a former SEC attorney may have taken confidential investigative materials with him when he left the Commission and provided those materials to a company he went to work for as a lobbyist." The SEC OIG confirmed in 2010 that the SEC had failed to properly pursue the allegations against Allied Capital made by Einhorn, and that Mark Braswell, the enforcement bureau chief in charge of the investigation, left the agency and landed Allied Capital as a lobbying client.[23]

    Einhorn would come to view Allied as a microcosm of market trends: "What we've seen a year later is that Allied was the tip of an iceberg; that this kind of questionable ethic, philosophy and business practice was far more widespread than I recognized at the time…Our country, our economy, is paying a huge price for that."[24]


  62. Einhorn/Albo

    SEC was riddled with corruption going after Einhorn at that time.  I remember the whole story.


  63. Nice dip in oil to $102.25 – don't bee greedy!  

    Just caught up on the Daily Show – they did a good job explaining the latest Obamacare nonsense, in case you have any confused family members who need to see this:

    ABX/Diamond – Gold just cannot seem to get it going, back at $1,292 now.  Hard for ABX to do well under $1,300. 

    ATVI/Scott – I know Warcraft is still a juggernaut.  Have to wait for Maddie to get home to find out about Skylanders – she's my gamer.  

    AAL/Abhish – Aren't they an airline?  End of thought…  Airlines are just too nutty to play.  In theory, it's a great stock at a good price but, in practice, hard for them to get traction.   I, like Buffett, just avoid. 

    Fast Money/Rustle – Those guys really have to dig to find trades that actually worked out.  

    You're welcome Ivan.  

    HLF/Diamond – Especially if he's $50M deep into investigations already, what's another $5M on legal fees? 

    Allied/Albo – Isn't that sickening that Braswell ends up working for Allied.   We have a sick, broken system (as Jon Stewart points out re. Judicial as well).


  64. Meanwhile, failure of our indexes to do much today.  Going to take a long time to get to 2,000 like this.  Once again, 17,050 is too hard for /YM to hold?   As usual, the volume was generally to the downside, followed by low-volume, BS pumping back up.  


  65. Phil – How do you feel about CL at 102.30?


  66. Ruste123 – Yeah, remember for several years Allied Capital kept floating new stock underwritten by all of the major firms.  None of the sell side analysts caught it.  Of course, looking at it in a cynical way, their firms were making big bucks on these underwritings.


  67. scottmi re: UNP, thanks for your comments.  I hadn't had time to go through the details in conf call yet.  I've got an order in for 10 mirroring yours, hoping for fill at 1.96.


  68. ATVI/phil – just checking with my boys about it now. 13 yo hasn't played it, but noticed it was sold out (figures and all) at Target last week when he was in their electronics dept.


  69. wombat re: /cl u v, not sure about the death cross; I hadn't been playing those recently, but had to try some yesterday with spread above $1.50.  Off to a good start baby :)   Last month were you able to ride them all the way down to $.65?

    Thanks


  70. Oil/Ricbah – As noted above, I said take the short money off the table at $102.25, but only because it's likely to be bouncy after a $1 fall from $103.25, not because I like oil long.  Since we had a $1 drop, a weak bounce would be .20 to $102.45, so that makes the next good short entry with a stop over $102.50 and then $102.65 would be a strong bounce and we wouldn't short there as that's already over $102.60, which provided some support earlier so we'd be back (over $102.50) to waiting for a new break below $102.50 or a failure at $103 for our next short entry.  

    Remember, the secret to playing the Futures is NOT PLAYING THE FUTURES – unless ALL of the signs are lining up for you!  


  71. Phil – Any ABX that I add to my long term position can always be rolled to the 2017 (or eventually 2018) options. I still believe in the long term fundamentals of ABX, but I will not be adding any leap options until it breaks its 200dma.

    “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

    -? Warren Buffett


  72. Where did the "?" come from in the Warren Buffett quote?


  73. ABX/Diamond – That's my point though, $18.25 is not when others are fearful.  It's pretty much in the middle of a 2-year range.  I was banging the table on them in November because the stock was $15.50 and we could hedge it to net $13 and THAT is beyond fearful.  $18.25, even if hedged down to $16, is more than 20% over a great entry.  Maybe they fail the 200 dma and head back to $15.50 – I'd at least give them a chance to. 

    As to the ?, just some HTML code you picked up when you pasted the comment.  


  74. Phil- How about GILD, record earnings and stock is just now moving


  75. FTR/Phil – earnings on 8/5. any thoughts for play? been 'consolidating" here for a while, but has been edging back up to top of channel and 2 year high…


  76. Indications, Bubbles, Defaults, and Bailouts.

    What is becoming really scary is the corporate state and in fact the big money players. Buyouts are being financed because they are not consumer home mortgages that regulation has reined in, but what happens to asset prices with declining revenues? Same as what happened to housing when people went under water. Big business is dependent on the broken consumer and that can lead to the same defaults as subprime mortgages. Is this what the TBTF banks are doing right now? So will the Fed or BOJ or BOE or all central banks bail out big business? Can it even be done? America is not just in a buyout and buyback binge but also shipping more money off shore, incorporating in other countries, and avoiding taxes as they go. This also will not end pretty. The big question is how long will the banksters be able to cover it up. It may takes years just like the housing bubble created by liar loans except this time they will be spread worldwide instead of individual countries. Think before all long investments.


  77. Phil – The bottom of ABX’s current price channel is $17.56 just above its 50dma ($17.46), so $15.50 may only be wistful at this juncture. I am not refuting your thesis, but I would hate to miss an opportunity to add … far more than I would be chagrinned at having to roll. :-)


  78. Friend of mine just texted me a pic of a Tesla charging station in Limon, CO.  6 empty slots and not a Tesla in sight


  79. housing, bubbles / shadow - an interesting interview with Harry Dent discusses macro demographic trends. He is not bullish on a housing recovery.

    http://trendfollowingradio.com/ep-206-harry-dent-interview-2-with-michael-covel-on-trend-following-radio


  80. IMAX/Phil – I sold the 24 puts yesterday pre-earnings. Up nicely today. 24/30 BCS or wait?


  81. ORCL – Oracle announced it is opening a cloud development center in Seattle, the first outside California. The new facility will hire 100 people initially..  http://www.bizjournals.com/seattle/blog/techflash/2014/07/oracle-joins-cloud-city-opens-a-seattle-cloud.html


  82. yodi re: ASML, I put a few of those on that you recommended this am.  What were you thinking on a 1/2 call sale, maybe Sept 90s?  wait for a run up before putting on the cover?

    Thanks


  83. YHOO – knocking on the door of a breakout! Pushing over trendline resistance and taking on the weighty 200 MA! Can it hold it for a close!?


  84. cdtbud:

    Of course it's totally empty, it's out in the middle of nowhere. I live in Colorado Springs, and no one from here, or Denver for that matter is likely to even drive through that little burg out east. Even Fort Morgan, on I-70 would have been a better choice.

    Unless they have a plan to sell lots of Teslas in Limon (population 1900)   :)


  85. GILD/Abhish – Yesterday's trade idea still about the same price:

    On GILD, think they beat so I'd go with the 2016 $80/100 bull call spread at $9.50 (same as AAPL) and sell the $70 puts for $5 for net $4.50 on the $20 spread. 

    There's no reason they should grow significantly, so it's a dividend only type of long-term hold.

    You can buy FTR for $5.93 and sell the Feb $6 calls for .25 and the $5 puts for .20, which doesn't sound like much but it knocks your base down to $5.48 so .52 if called away over $6 plus you should collect .10 in Sept and Dec for .72 (13%) in 7 months.  

    Thinking/Shadow – Thinking is good but don't overthink or you might miss a nice rally while you are waiting for everything to collapse.  

    ABX/Diamond – ABX's channel not as meaningful as gold's.  Also, with VIX this low, there's not much to miss.  And, if you are a long-term investor, the 50-day price channel is meaningless.  I'm not sure what you are looking at that calls $17.50 a bottom but, since April, the stock has been over $18 for less than 1/3 of the time and less than $17 for about half the time, so I'd call the channel bottom about $1 lower then the 50 dma which is, by definition, the midpoint of the 2-month channel.  

    TSLA/Cdt – Doesn't that mean the stations are working?  If there were long lines, people would say "see, it takes too long" – as it is now, they can say they are adequately covered to suit demand (without noting that demand is near zero).  

    Demographics/Scott – Good stuff.  

    IMAX/Ivan – I'd say BUYBUYBUY as they weathered a fairly poor summer at the box office with flying colors.  

    Our July 16th trade on them was:

    So we're not irresistibly cheap yet but $24 seems to be a solid floor.  I guess I'd take the March $25/28 bull call spread at $1.50 and sell $22 puts (now .80) for $1.25 or better if they drop.  If not, then the spread is on track, so no worries. 

    That spread is $1.70 and, of course, the puts never filled because we caught the dead bottom but up 100% by March is very nice.  $1.70 not so bad still and now you can sell the $23 puts for $1 to net .70 on the $3 spread that's just getting in the money.  

    Good example of how waiting for earnings only cost .20 on the spread we wanted.  Isn't it worth .20 to be sure? 

    YHOO/Scott – Those Jan $38/45 bull call spreads ($1.60 on 6/30 for STP and $25KP) looking less and less crazy every day!  


  86. TSLA
    Thats not TSLAs MO. They buy the land cheap ( hence the -burg ) and them it becomes a destination station for cross country drivers. Doesn't matter how many TSLAs are local.
    The big push will be IF they can connect West to East. Right now there is huge ( undrivable ) delta over middle America. You have to drive way south and then through Tahoe to connect to the next station.
    TSLA has pretty amazing apps that pre-route the route for you ( not the way I would prefer to drive, but pretty cool )


  87. Phil – Touché … white flag! :-)


  88. Phil // TF
    Can you take peek – plummeted hard down to our favorite 1150


  89. Scott – I'd take Harry Dent's predictions based on demographics with a grain of salt.  He sells a lot of books and subscriptions on his bold predictions, but has proven to be very inaccurate.

    He famously predicted that the Dow would hit 36,000 by 2007-2008.

    Seems that there are a lot more factors in bubbles and bursts than just demographics.

    Interesting to hear what he has to say, tho.


  90. TRLA!!!   ???


  91. diamond – very interesting
    buyout ?
    doesn't look like its done yet …


  92. diamond
    Aug 50/65 Bear Call spread $4

    couldn't resist ; >


  93. For the past few years I have predicted that Jeff Bezos will be the wealthiest man in the world.  Now I think it might be Mark Zuckerberg. :-)

    Zuckerberg currently owns over 500 million shares of Facebook. Zuckerberg owns over 443 million shares, plus an additional 60,000,000 shares through stock options ($0.06 exercise price)


  94. Phil

    I am not overthinking and will miss the next pop or drop because paying down debt is my main goal. I see similarities today to the subprime mortgage bonds bundled to cover up the fact that the resets on the teasers rates would allow the hole tier to default by those unable to refinance in a declining market in the lowest tier. At that time they went to CDOs which were bundles of low credit score bowers added to people with more or less no credit history rated good, some without a green card. Now the Fed buys bonds from banks again with no discourser of content to the tune of $4 trillion on their books with basically no buyers. This is the QE inflating the stock market and even Janet knows it must stop with out a clear reason why if she knows but she is afraid to stop or continue and I wonder the real reason. I smell another bank scam building. Only difference is not housing, at least not single residences, this time but just the same a house of cards held up by fake profits.


  95. wombat – Fearless!



  96. wombat – LOL!!!


  97. LOL Wombat. I will forever picture that when I see your name. I must be the bird or jackal feeding off your scraps!


  98. /CL – woohoo!


  99. pwright72 We hold on to sell the short term caller until the stock shows more signs of recovery patience is the word. I will let you know when I sell my callers. This is a long term play so not much to do.


  100. /TF – $600 – kaching !!!!

    Griffin // oops. 

    Diamond // TRLA
    DD at $6.50


  101. /TF/Wombat – Same bouncy line at 1,150 until it fails to be so.  Good for a quick play up but, if we finish lower today, it will not bode well for any bullish bets.  

    Demographics/Albo – The problem is they take so long to play out and numbers are subject to regressions (as are most things) which make any prediction look wrong for a while.  

    TRLA/Diamond – Seems like Z (illow) is buying them.

    Zuckerberg/Albo – He'll probably be richer than Chris DeWolfe and Tom Anderson combined!  wink

    Thinking/Shadow – All valid points but we are in an unprecedented cycle of money-printing and, as long as all the Central Banks play along, there's no reason for the free money train to stop any time soon. 

    $102 failed on oil!  


  102. yodi re: ASML, thanks, I'll wait for the word from you.  I got burned a few times with short calls, but getting more comfortable waiting it out if I get stuck with short calls that are in the money. A lot of timing to it I guess.  But when comparing your method (BCS and 1/2 call sale) against a straight diagonal, your way has better profit potential.  Maybe I should make the effort to try to figure it out and develop the skill.

    Thanks again


  103. PHIL/SBUX

    I am short Jan '16 65 puts which are doing very well. Would like to buy BCS. What about Jan 15 75/85 for about 5.00? What do you think?


  104. Non Sequitur by Wiley Miller :-)


  105. XOM/Phil – the Aug 100 puts.. expect to come down now that oil is breaking below 102?  or does this just give them a wider spread for their retail product? or good time to roll up/out?


  106. SBUX/Zten – Not that they won't pull back $5 or so between now and 2016 but, long-term, I like them.  I'd go out to 2016 with the $70s, since they are only $14, and sell the $85s for $6 for net $8 on the $15 spread that's $10 in the money, good for 87.5% gain at $85 by themselves. 

    Kind of makes you wonder why anyone would buy an actual stock, right?  

    star-wars-fav



  107. Quote of the day:

    Chris Arnade, “Rules are made to be gamed, and games are played to be won. That is at the core of the culture of Wall Street. If you don’t understand that, you don’t understand Wall Street.”  (Guardian)


  108. stjeanluc: r u playing any earnings today? 


  109. Phil top of the chart!

    It pleases me to know my youngest Luke Skywalker is TOP CAT! Never thought of having him run for president but he doesn't give a shit about money and that would be better. A little wild salmon is all he wants for a bonus.


  110. Time flies by… Earnings today:

    AMZN
    Consensus Estimate – (0.13)
    Whisper Number – (0.16)
    Average Move – 9.9%
    Priced into Options – 10.77%

    BIDU
    Consensus Estimate – 1.33
    Whisper Number – 1.38
    Average Move – 7.7%
    Priced into Options – 6.36%

    SBUX

    Consensus Estimate – 0.66
    Whisper Number – 0.67
    Average Move – 4.4%
    Priced into Options – 3.37%

    EW bearish on AMZN, bullish on SBUX and neutral on BIDU. Once again, not recommendations…


  111. Phil – no puts sold on the SBUX play?


  112. XOM/Scott – I think it's more of an earnings play (31st) but yes, oil coming down should help too (but, so far, nothing has).  

    There are two major drivers at XOM, the sale of oil (of course) from their wells – but that's only 1/3 of their income.  Refining is about 40% and chemicals 20% and then there's a lot of random stuff that can fluctuate a lot.  Since Refining and Chemicals prefer lower gas prices to make profits – the move from $95 average in Q1 to $102 average in Q2 is an 8% increase of cost on 60% of their business vs an 8% increase in profits on 33% of their business.  

    Unfortunately, because 80% of the value of XOM is the oil fields and partnerships they hold and those get bought and sold all the time for profits and losses – it's very hard to say where they will come in except that they usually do try to time those sales to hit their numbers.  The bottom line for XOM is that they are likely to hit $1.86 on the button but that's flat to March's $1.88, when they were trading at $95 – how will they justify $10 more per share at $105, which is up from $85 last year (up 23%).  

    AAPL/Diamond – Not with the current product mix.  It's amazing they are keeping the margins they already have while Samsung is practically losing money on the stuff they sell.  

    Rules/StJ – Nice to know Vlad agrees with you:

    It's not wise to violate rules until you know how to observe them. - T. S. Eliot

    If we speak calmly, in a businesslike fashion, let me draw your attention to the fact that Russia supplies arms to the legitimate government of Syria in full compliance with the norms of international law. We are not breaching any rules and norms. - Vladimir Putin

    Luke/Shadow – I'm more interested with the people who score worse than Papatine.  Of course that negative score for Congress in general is incredible.  

    SBUX/Deano – He already sold puts.  As a fresh play, I'd sell the 2016 $67.50 puts for $3.70.


  113. Any earnings plays today Phil?


  114. HOV getting near Buy Buy Buy time?? 


  115. YHOO looking even better with my roll down to the $34!


  116. Earnings/Paloty – Wow, it's hard when I only see them at 3:40!  

    HOV/DM – $4.50 is pretty much the buy line.   I'd prefer more VIX. 


  117. Vlad / Phil – Of course, that guy is actually putting guns on people's heads! They are a little more subtle on Wall Street.


  118. Earnings:

    • AMZN – Playing with fire.  If they ever actually make money – look out!  
    • BIDU – Unplayable.  
    • SBUX – See above.  

    There, that was easy!  


  119. Me too re VIX :)


  120. well BIDU options expiring tomorrow are ridiculously priced (very damn expensive). I think will stay out of earnings today. 


  121. I making a small bet on AMZN in the downside – put vertical 8% OTM. Lottery ticket and 6/1 odds.


  122. Jobless claims at the lowest since 2006…

    http://www.bespokeinvest.com/thinkbig/2014/7/24/jobless-claims-crater.html

    In this week's release, economists were forecasting claims to rise by 4K from last week's level of 303K.  The actual reading, though, came in 23K below forecasts at 284K.  So, how does 284K stack up against prior readings?  In order to find a lower weekly reading you have to go all the way back to February 2006!


  123. Haha.  You always seem to be able to manage.   FB looking ok so far right at 75.11.  Now it just needs to stay here for 3 weeks.


  124. of tomorrow's expiry?


  125. Abhish – Yes, tomorrow! But a couple of contracts, just for fun…


  126. made good money this week, will just stay away and watch from sidelines today.


  127. And Non-Seasonally Adjusted claims also much better than predicted:

    With regards to the low NSA reading, we heard more than one comment dismissing the low reading as a seasonal distortion.  That's fair enough, but when you compare it to the same week of prior years this week's reading was still impressive.  Ironically enough, though, the same people who dismiss the NSA readings when they are  low are the same people who cite their importance towards the end of the year when seasonal distortions make them high.

    The economic numbers are getting hard to read. GDP was down and yet, the Empire State and Philly Fed are much better than expected. Jobs have been on the high side of expectations and claims are down a lot. Something has to give!


  128. GL STJ


  129. Seems like good news for PLX:

    Protalix BioTherapeutics Names Shlomo Yanai as Chairman of the Board of Directors

    Mr. Yanai served as President and Chief Executive Officer of Teva Pharmaceutical Industries Ltd. from 2007 until 2012. Previously, Mr. Yanai was the President and Chief Executive Officer of Makhteshim Agan Industries (now Adama), a leading global agro-chemicals company.


  130. See, SBUX was such an easy call, why waste time with other plays?  

    Starbucks Revenues Increase 11%; Earnings Per Share Surge 22% to a Q3 Record $0.67


  131. V has issues – not a good overall sign.  


  132. Dunkin Doughnuts worth a look Phil? Back near 52 week low. Thanks


  133. QCOM anyone?  2016 70 Puts are $5.70 


  134. bye bye AMZN, for now


  135. hey stj nice call re: amzn, that'll look good in the am


  136. How long has AMZN been in existence?  16 years and still can't make money.  Amazing how it got this high.


  137. AMZN .. Some eejit on CNBC said it is a long term stock … 16 years must be the short term period for this mo-mo :)


  138. AMZN / pwright – It's only down 5% now so not good enough for my trade but OK if you played it on the downside. But this looks recoverable in a conference call with Bezos now explaining that losing money is actually a good thing… It's truly a teflon company! They have P/E of infinity +1 it seems. 


  139. infinity is the best kind of p/e, can't put a multiple on it, just fantasy projections.  They are better off never making money


  140. Wombat – The /CL spread is coming down nicely now.  30 cents so far today (times 20 contracts).  I'm lightening up right around break even (I doubled down yesterday, and am following Phil's rules), and will close the rest after I get another 50 cent reduction.  Again this is the Sept/Nov spread.  


  141. stj re: AMZN, what do you need, about $325 to be profitable?  I didn't play, but glad to see the wind knocked out of it a bit.  If it keeps dropping after cc, then we know we're onto something :)


  142. Anything below 334 is where profit begins. The spread is 335/330. Gathering some speed now it seems. Maybe tomorrow…


  143. And bingo….


  144. Living in a fantasy world:

    http://www.slate.com/blogs/weigel/2014/07/16/gov_sam_brownback_will_keep_floundering_in_kansas_because_reagan.html

    So, to delay a tax cut is to "raise taxes," and to be Reaganesque is to rule out any tax raises. The second part of the answer is actually the weakest—anyone who forgets that Ronald Reagan course-corrected on taxes, 11 times, has mentally substituted a fantasy of Ronald Reagan for the one who governed the country for a bit. But maybe this points to Brownback's salvation. Like Scott Walker, he needs to recast his experiments as a twilight struggle againt liberalism. If he loses, so do tax cuts,for now and ever.


  145. Phil

    I different from you did not predict the 2008 market crash in 2007. What I did was in the early 2000s predict the mortgage banking crisis. I knew people that ran up credit cards, car loans, and then refinanced their houses to get out of trouble and a few buy a new car. I know one family that refinanced 5 times and not a one were they ever able to pay based on their pay. I knew it was a banking scheme to take their houses and a conspiracy to rob investments. Now I believe the banks are maxing out corporations and the worst part is the government is backed in a corner to bail out, they can't get more to pay that off from the little guy, the old, or disabled. Everything without ending military and law enforcement will not help. It likely will continue for a while and your income group may do very well for a while, but going back to my 1990s word, this is (unsustainable). The banksters and the .0001% are controlling the process and none of us are invited. 


  146. Palotay/Wombat; I see that the /CL U/V spread has come down from 1.55 to 1.27.  How low would you expect it to come down to well before contract expiration?


  147. DMulligan / Dunkin' Doughnuts:  "Nobody ever went broke underestimating the intelligence of the American public."

     

     H. L. Mencken
    US editor (1880 – 1956


  148. It is often quoted as "taste", which I think is more accurate.


  149. palotay / alpha
    mail me at jj2010@me.com

    phil // NG
    You never posted my NG video !!!


  150. 4:19 pm DragonWave announces proposed public offering of units totaling CAD21.5 mln (stock is halted)Briefing.com(Thu 4:19PM EDT

    Might present an opportunity to get back into the stock.


  151. Good morning!  

    Nikkei and Shanghai were up 1% this morning, Hang Seng dragging at 0.3%, India down 0.6% and Singapore off 0.1%.  More mainland property stimulus keeping China going and more free money from Abe making bad news (trade balance, manufacturing) good news for Japan.  

    Asian Stocks Rise After S&P 500 Record; Won, Copper Slip. Asian stocks climbed, with the regional index at a six-year high and headed for its 10th advance in 11 weeks. The South Korean won weakened a second day versus the dollar, while copper pared its weekly gain. The MSCI Asia Pacific Index rose 0.1 percent by 9:59 a.m. in Tokyo, set for a weekly climb of 1.2 percent.

    Asian Markets Mixed - Japanese stocks closed at a six-month high, as a weaker yen buoyed the market at the end of a positive week for Asian stocks.

     

    Japan’s Export-Champ Days Are Left Behind, Chart Shows

    Japanese Inflation Holds Near 23 Year Highs As Food, Energy, & TV Costs Soar

    Europe is having a weird day, was down half a point, then even and now down half a point again on DAX and CAC.  FTSE flat at lunch, Italy down 0.1% and Spain, of all things, up 0.3%.

    The Chart That Keeps Mario Draghi Up At Night

    U.S. Says Russia Firing Artillery Into UkraineThe U.S. said Russia is firing artillery across its border into Ukraine, the first time American officials have publicly alleged such direct participation in fighting on behalf of separatists. “Russia is firing artillery from within Russia to attack Ukrainian military positions,” State Department spokeswoman Marie Harf told reporters today in Washington, offering no evidence for what she described only as information “from our intelligence friends.” ?

    • Ukraine’s Prime Minister Arseniy Yatseniuk has resigned, after two parties quit the ruling coalition government to trigger early parliamentary elections.
    • The dissolution of the coalition was expected following President Petro Poroshenko promise to call elections after he won the presidential vote in May.
    • Yatseniuk expressed his concerns of Ukraine's inability to vote on crucial laws, paying soldiers, buying rifles and restocking its much needed gas.

    Proposed EU sanctions threaten to shut Russia out of the world financial system

    Things In The Middle East Are About To Get Much Worse

    Our Futures are down about 0.2%, led by the RUT, down 0.44% at the moment (1,144).  If you missed Tuesday's TNA long entry – your patience is rewarded but, of course, below 1,150 is not where we have any faith in that trade.

    U.S.-based stock funds post $7.6 bln net outflows in week -Lipper


  152. DNKN/DM – I don't think eating trends bode well for them.  Older people eat less donuts and this country is certainly getting older.  They've got 11,000 locations already and have been around forever, it's not like they have some great upside potential and blaming the weather for April, May and June sales is beyond lame so I wouldn't believe a word that comes out of that CEO's mouth!  If they fell back to $22 (post IPO low), I'd say "hey, it's a great American brand and they're not going away" but, at $42, I have zero interest.  

    AMZN – One of the few times I don't short them on earning and they finally drop!   This company is the perfect example of "Sure, we lose money on every sale – but we make it up with VOLUME!"  They benefited for 15 years from a sales tax advantage too – that playing field is getting more level.  

    Banksters/Shadow – But that's the way it's been since the signing of the Magna Carta, which essentially "gave" the serfs the right to buy the land from the lords, who took the cash and then raised taxes and controlled the markets until they crashed and the serfs were forced to sell them the land back for pennies.  Once the lords had re-acquired all their lands, they reinflated the prices and sold them to the next bunch of peasants who thought they were going to be gentleman farmers.  

    In the long run, you just end up with slaves who work harder (because they think they are doing it for themselves) and require less supervision and care.  It's such a successful system that it evolved into modern Capitalism, where the control of money and real estate pricing has been ceded to a banking coalition called the Federal Reserve.  

    Jefferson's plan for monetary reform made the following demands: 

    • All emissions of paper money by private banks be prohibited.
    • States would voluntarily transfer the exclusive right of issuing paper money to Congress
    • That such emissions for general circulation should be limited to wartime financing and gradually redeemed through taxes when the emergency was over.
    • Bank lending be limited to the quantity of funds deposited with them.
    • Large notes could be left in circulation for major commercial transactions (in lieu of specie) without damaging the system, but should usually be made by bills of exchange. 

    It's amazing they let him live.  Lincoln and Kennedy both died soon after messing with the Banksters.  

    Useful chart to keep track of Kustomz.  



  153. NYSE can't get away from that 11,000 line – let's see if it holds for the week.