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$1,000 Friday – Yesterday’s Oil Trade Gives Everyone a Great Weekend!

Congratulations!  

If you read yesterday's post and took action on our trade idea to short Oil Futures (/CL) at the $103 line, then you were able to pocket $1,000 PER CONTRACT in just 3 hours.  In the Morning post (delivered to our Members via Email at 8:35 am), the trade idea was:

"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."

That's about on par for our Futures trading as we demonstrated LIVE in Tuesday's Live Trading Webinar $300 of Futures profits in less than an hour (replay available here).  We'll be doing more Futures Webinars for our Members aside from our usual Tuesday Live Trading Webcasts (sign up for your Membership here so you don't miss our trade ideas).  

How to trade the Futures is one of the many things we learn at Philstockworld – another thing is PATIENCE!  Patience has kept us from chasing this rally as we once again top out the market.  On Tuesday we took a nice, speculative bullish trade (but did not officially add it to our Portfolios) - just in case we do have a breakout – but, otherwise, we've been working on our downside protection. 

We are FUNDAMENTAL traders who just so happen to use Options and Futures for leverage and hedging – simply because they are convenient and profitable instruments when used correctly.  What we teach is not all that complicated – but it isn't easy either.  That's why not many people trade Options and Futures – it requires discipline and takes time and practice to master – not really the kind of thing our education system prepares our students for these days….

YOU, however, should not be intimidated away from making money.  Our basic concepts are VERY SIMPLE and the concepts are explained in quick videos like "How To Buy a Stock for a 15-20% Discount" and "The Secret to Consistent 20-40% Annual Returns" – something we are demonstrating this year in the 5 Virtual Portfolios we track for our Members.  

Back on December 7th, for example, we published: "Stock Markets Are Exploding Higher – Here’s How To Participate “Safely" and, with the nice rise in the markets this year, all 5 of our trade ideas from that post are successful but, even if you chose not to play the options and instead just played the stocks, you still would have been pleased with the results:

  • QQQ was $85, now $97 – up 14%
  • DDM was $104, now $123 – up 18%
  • DBA was $24.50, now $26.65 – up 9%
  • AAPL was $79 (split-adjusted), now $97 – up 23%
  • T was $34.50, now $35.50 – up 3%

SPX WEEKLYNot too shabby (average 13.4%) against 8% gained by the S&P over the same 7 months and well on our way to those 20%+ annual gains.  Of course, the option plays we constructed returned an average of 600% on cash but, as I noted above, that takes hard work and dedication to master – certainly not for everyone.

As you can see from Dave Fry's S&P chart, we're on a 150-point run since Jan 1st and it's taken a bit longer than the 150-point run we had since the October before that which, according to our 5% Rule™, means the momentum is slowing and we are NOT very likely to break 2,000 without a pullback of at least 30 points, to 1,970 and, more likely of 60 points to 1,940 – which is why there's really no point in us chasing stocks up here.

Into the weekend, we are pulling our profits on the Oil Futures (/CL) but sticking with bullish trades on SCO ($25.83, ultra-short oil) and shorting XOM ($104.50) – trade ideas we had already added to our Portfolios in previous Member Chat sessions.  

In yesterday's Member Chat, we identified a new hedge using SQQQ ($38.67), the ultra-short on the Nasdaq, to cover a market sell-off through the end of the year.  Our trade idea was buying 20 of the Jan $40/50 bull call spreads for $1.55 and selling 20 TEX 2016 $25 puts for $1.75 for a net .20 credit on the $10 spread, giving us 5,100% of upside if the Nasdaq falls about 10%, which would give us a 30% pop in SQQQ to $50.

See, not complicated.  We tie up no cash (but about $5,200 in margin) on a $20,000 hedge and our worst-case scenario is being assigned 2,000 shares of TEX (now $37.42) at $25 per share – another 33% off the current price.  So our underlying FUNDAMENTAL premise is that TEX is worth more than $25.  If that is true, then for the cost of tying up $5,200 in margin, we have ourselves a free $20,000 hedge on our portfolio for the next 6 months. 

That's how we combine market fundamentals with the flexibility of options contracts to come up with low-cost hedges that leverage our portfolio returns! 

Have a great weekend, 

- Phil

 


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  1. Oil Lines

    R3 – 104.17
    R2 – 103.67
    R1 – 102.81
    PP – 102.31
    S1 – 101.45
    S2 – 100.95
    S3 – 100.09


  2. BIDU – Very strong.

    Following the gurus . . .  .

    albo
    February 26th, 2014 at 11:07 am | Permalink Tweet thisIgnore this user 
    Phil – As we've discussed, following gurus as they enter new positions can frequently, but not always, prove to be profitable.  And the data you get is usually 45 days old.

    But, I was browsing thru GURU FOCUS looking for ideas, and was struck by the number of gurus that I follow who initiated positions in BIDU in the 4th quarter.  Guys such as Daniel Loeb, Paul Tudor Jones, David Tepper, Jim Simons, etc.  All these were new positions.

    I'd appreciate it if you'd structure a BCS for BIDU.  Thanks


  3. Cloud computing price war not helping AMZN:

    http://qz.com/240306/amazons-cloud-price-war-with-google-is-starting-to-hurt/

    Amazon Web Services, Amazon’s cloud-computing business, is now mature enough to affect Amazon’s overall numbers. Amazon made a big price cut in late March to counter aggressive pricing from Google, with service price declines up to 65%. Customers loved it, with usage increasing 90% year-over-year, Amazon said today on its earnings call. But revenue growth took a hit as a result.


  4. stj re: AMZN, look at that, $315 and dropping.  Looks like you're solid to cash in at the open :)


  5. Not a bog surprise:

    http://qz.com/238854/why-narcissistic-ceos-get-paid-more-even-though-they-dont-perform-better/

    New research by Stanford management professor Charles A. O’Reilly shows that it is the persuasive personality and aggressive “me first” attitude embodied by narcissistic CEOs that helps them land bloated pay packages. Specifically, narcissistic CEOs are paid more than their non-narcissistic (and merely self-confident) peers. There is also a larger gap between narcissists’ compensation and that of their top management teams than is found with CEOs who do not display the trait. The longer the narcissists have held the top post, the bigger the differential, according to the study published in The Leadership Quarterly earlier this year.


  6. AMZN / pwright – Looks like a winner now…


  7. Why repetitions help you get better…

    http://jamesclear.com/repetitions

    And it works the same way with almost any goal you could have…

    Art. If you want to be a great photographer, you could go on a quest to take one perfect photo each day. Or you could take 100 photos per day, learn from your mistakes, and hone your craft.

    Strength. If you want to be stronger, you could analyze every movement and phase of your technique until you’re blue in the face. Or, you could get under the bar, learn from your mistakes, and focus on doing more reps.

    Writing. If you want to write a best-selling book, then you could spend 10 years trying to write one perfect book. Or, you could write one book each year, learn from your mistakes, and trust that your books will get better each time.

    Business. If you want to be a successful entrepreneur, you could scheme and think and try to plan out the perfect business idea. Or, you could try to get one customer, learn from your mistakes, and experiment with new ideas until something comes easily.

    It’s not the quest to achieve one perfect goal that makes you better, it’s the skills you develop from doing a volume of work.


  8. STJ – Good stuff on repetitions.  Of course, when it comes to trading, I'd recommend making those first 100 trades on paper. :-)


  9. Indeed Albo, indeed…


  10. Reps/StJ – except when I'm repeating something wrong. I've done that when learning a piece of music or working with my horse.


  11. Good morning!  

    Futures still heading down except the RUT, which bounced off 1,136 (now 1,143) but still down more (0.6%) than the others (0.2-0.4%).  

    Oil $101.50!  Dollar over 81 not helping, but that's what we were talking about happening at the beginning of the week when we thought the Euro would fail $1.3475 on Tuesday (now $1.3428):

    Money is flowing back to the Dollar as well as US Treasuries – so SOMEONE is nervous but it sure isn't US Equity Investors, who are hell-bent on trading stocks near their all-time highs coming into Q2 earnings.  The Dollar shot up to 80.83 this morning and is likely to move a lot higher if the Euro fails to hold $1.3475, a level it hasn't been below since mid 2013, when it was 5% lower than that at the lows. 

    That's popping the Nikkei to 15,550 but that's a good shorting spot (or has been so far) on /NKD.  Rough over the weekend but a fun index to trade.  

    BIDU/Albo – LOL!  I stand by my 2/26 comment as BIDU was $172 that day, on the way to $140 at the end of March!  I also stand by my trade idea at the time, which was:

    BIDU/Albo – I'm sure those guys were buying at $140, not $175.  I liked them last year under $100 for the first time in ages but over $150 is too beaucoup for my tastes.   As you noted, 45 days late can matter a lot.  

    You can play with something like 3 2016 $140/210 bull call spread at $30 ($9,000), sell 3 $130 puts for $16.50 ($4,950) and that nets you in for $4,050 and then you can try to sell 1 $5 call each month (March $180s are $6.20 for $620) to help pay for the spread.  Since you are in for net $13.50 (not counting the short calls), you have 3x $56.50 ($169.50) of upside protection on the short call and, if you can pull off just 7 $6 sales, you essentially have 3 free $7,000 spreads.  

    As a new trade on them, I'd say DON'T CHASE!!!  If you didn't pull the trigger on them when they were 33% cheaper – why are you NOW going to buy them?  Give them time to come back down and they will either come back to a reasonable price or they won't and you can move on to another stock that hasn't popped 50% in 5 months already. 

    What about YHOO?  My premise on them remains that AliBaba will make their 25% stake worth more than the entire company ($36Bn at $36 per share) is valued at.  If anything, BIDU's earnings make that point for AliBaba and you can still buy the YHOO 2016 $35/42 bull call spread for $2.65 and sell the $30 puts for $2.35 for net 0.30 on the $7 spread with pays 2,433% on cash if YHOO goes up 7%.  Why mess around with BIDU when they are giving things like this away?  

    If it makes you feel better, sell a BIDU 2016 $160 put instead for $12 for each 6 of the YHOO spreads and then you net .65 per $7 spread and still have a 1,000% upside and your worst case is getting in on BIDU back where you wish you got in in Feb!  

    AMZN/StJ – They started that cloud war and, as I said at the time (ages ago now), they are turning it into a commodity and now no one will make money on it.  Great job on the puts, by the way!  

    Repetitions/StJ – Very true.  

    LOL, great point Albo!  


  12. AMZN – I see 318 as a S/R line as well as a Fib line. The next one is between 290/300.


  13. /NKD below 15,500 already and that's a great line to short below (tight stops above).


  14. AMZN & V both heavily weighted in the indices responsible for much of this decline.


  15. IRBT losing its bounce now. Looks to settle around $35 with $30 a decent line of backup support


  16. At the open

    09:32 AM ET

    • Dow -0.06% to 17,073.21. S&P -0.26% to 1,982.85. Nasdaq -0.53% to 4,448.89.
    • Treasurys: 30-year +0.42%. 10-yr +0.14%. 5-yr +0.04%.
    • Commodities: Crude -0.81% to $101.24. Gold +0.28% to $1,294.40.
    • Currencies: Euro -0.21% vs. dollar. Yen +0.01%. Pound +0.03%.


  17. Stocks poised for negative open, Amazon -11% premarket

    09:25 AM ET

    • Stock futures are on track for a modestly lower open, pressured by disappointing earnings from companies such as Visa and Amazon, as well as a cautious outlook from Starbucks; S&P and Dow -0.2%, Nasdaq -0.4%.
    • Global conflicts are on the radar, as the EU mulls measures to curb Russian access to capital markets, and 15 people were killed after Israeli forces apparently bombed a shelter at a UN-run school in Gaza.
    • Major European bourses trade mostly lower, while Asian markets ended the week on a higher note.
    • On the U.S. economic front, June orders for durable goods beat estimates, but shipments of goods fell 1%, which will be a negative for Q2 GDP.
    • Treasury prices are at their highs; the benchmark 10-year yield is off 2 bps at 2.49%.


  18. More on Stanley Black & Decker’s Q2

    09:13 AM ET · SWK

    • Stanley Black & Decker (NYSE:SWK) reports that Q2 net profit rose 16% in Q2 climbing to $216.5M from $187.1M Y/Y, as the company managed to slightly increase sales while trimming costs.
    • Net sales for the period were $2.9B, up 1% Y/Y. Gross margin expanded 130 basis points widening to 36.5% from 35.2%. Operating margin expanded 200 basis points To 13.5%.
    • Organic growth was negatively impacted by unusually weak emerging markets as well as a delayed and shortened North American outdoor product season. These factors muted organic growth by two points.
    • The company boosted its forecast for adjusted per-share earnings for the year, and now expects $5.50 to $5.60 a share, compared with its prior outlook of $5.35 to $5.50.
    • Q2 earnings
    • SWK +1.7% premarket


  19. Xerox -2.3% following mixed results, in-line guidance

    09:22 AM ET · XRX

    • Xerox (NYSE:XRX) expects Q3 EPS of $0.25-$0.27, in-line with a $0.26 consensus. Full-year EPS guidance has been tweaked to $1.09-$1.13 from a prior $1.07-$1.13; consensus is at $1.10.
    • $204M was spent on buybacks in Q2 vs. $275M in Q1. Op. cash flow was $325M.
    • Document Technology revenue (printers/scanners and software – 40% of total revenue) fell 6% Y/Y (contributed to the revenue miss) after dropping 4% in Q1. Services (57% of revenue) grew 2% after posting flat growth in Q1.
    • Document Technology was hurt by a 9% drop in equipment sales; factors included emerging markets weakness, price cuts, and tough comps due to 2013 product launches. Services saw healthy commercial and document outsourcing growth, but margin improvement was “muted” due to government healthcare issues (previous).
    • Gross margin fell 70 bps Y/Y to 30.8%. SG&A spend fell to 18.4% of revenue from 19.3% a year ago (helped with the EPS beat), and R&D spend to 2.7% from 2.8%.
    • Q2 results, PR


  20. Jabil +2.9% after launching new $100M buyback

    09:27 AM ET · JBL

    • With the company’s current $200M buyback expected to be used up by the end of August, Jabil (NYSE:JBL) is creating a new $100M buyback that’s good until Aug. 31, 2015.
    • At current levels, Jabil’s buyback is good for repurchasing 2.3% of outstanding shares.


  21. Anglo’s H1 operating profit falls 10% after strike, lower commodity prices

    08:59 AM ET · AAUKF

    • Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) says its H1 net profit more than tripled to $1.46B vs. $403M in the impairment-weighed H1 of last year, but underlying operating profit fell 10% to $2.93B due to lower prices across most of its commodities and a 40% drop in platinum output from the five-month-long strike at its South African platinum operations.
    • CEO Mark Cutifani says Anglo expects to raise $3B-$4B from assets disposals over the next two years, while stressing the company is “not in a fire sale mode.”
    • H1 return on capital slipped to 10% from 11% a year earlier, but Cutifani says he is more confident about hitting the company’s 15% target by 2016 than a year ago.
    • Says the long-delayed Brazilian Minas Rio project remains on track to ship its first iron ore by the end of 2014.


  22. Exxon considering expansion of Beaumont refinery

    08:42 AM ET · XOM

    • Exxon Mobil (NYSE:XOM) is weighing a possible multibillion-dollar expansion of its 344K bbl/day Beaumont, Tex., refinery that could make it the largest in the U.S. by 2020, Reuters reports.
    • XOM is said to be considering an expansion to 700K-800K bbl/day in total refinery capacity at Beaumont, which would surpass Motiva’s 600K-plus bbl/day Port Arthur refinery.
    • XOM reportedly is focusing on the possible addition of a third crude distillation unit at the refinery, and its size would determine how much capacity would increase; the plans also would include replacing four coking unit drums and adding two new coker drums.


  23. Freeport signs deal with Indonesia, copper exports could resume in August

    08:33 AM ET · FCX

    • Freeport McMoRan (NYSE:FCX) says it has reached a deal with the Indonesian government that is expected to pave the way for a resumption of copper exports after a six-month halt.
    • After signing the memorandum of understanding, Freeport Indonesia CEO Rozik Soetjipto says he hopes copper concentrate exports could resume as soon as next month.
    • FCX will pay a 7.5% tax on its Indonesia copper exports and provide a $115M assurance bond to support its commitment to smelter development; it will pay royalties of 4% for copper and 3.75% for gold, which previously were 3.5% and 1%, respectively.
    • FCX, which fell sharply yesterday as terms of the deal leaked out, -0.3% premarket.


  24. Durabale Goods orders rise more than expected in June

    08:30 AM ET

    • June Durable Goods: +0.7% to 239.9B vs. +0.5% expected, -1% prior.
    • Ex-transport +0.8% vs. +0.7% expected, -0.1% prior.


  25. Investors disappointed with Starwood buyback plans

    08:21 AM ET · HOT

    • The dive in Starwood Hotels (NYSE:HOT) during yesterday’s earnings call may have been over disappointment with management’s plans for buybacks. Some had hoped for something in the area of $2B-$3B (CC transcript), but management – the financial panic of several years ago still clearly on its mind – yesterday talked about a number likely to be closer to $750M.
    • Speaking on the call, Wells Fargo’s Jeff Donnelly wonders whether management isn’t giving more weight than necessary to what could a hundred-year flood. CEO Frits van Paasschen says one can’t be helped but be swayed by recent events and reminds that Starwood wants to retain the capacity to be able to invest throughout any downturn.
    • Disappointed with the capital allocation plan, Donnelly today pulls his Outperform rating on the stock.
    • Previously: Starwood Hotels tumbles during earnings call


  26. U.K. banks rise in RBS’s wake

    08:03 AM ET · BCS

    • A check of other U.K. lenders amid RBS’s near 13% gain following strong Q2 results finds Barclays (NYSE:BCS) +2.3%, Lloyds (NYSE:LYG) +1.4%, and HSBC +0.4% in London action.


  27. McDonald’s takes Chinese chicken off the menu in Japan

    07:59 AM ET · MCD

    • McDonald’s (NYSE:MCD) says it will stop selling all chicken products produced in China to its Japan outlets and stop selling chicken nuggets and other items in Hong Kong after reports earlier this week that a Chinese food supplier may have shipped expired meat.
    • In Japan, MCD will import all its chicken products from Thailand, which already was supplying 62% of MCD Japan’s chicken product imports, with China supplying the remainder.
    • The food safety scare in China also has ensnared KFC parent Yum Brands (NYSE:YUM), which has required all its KFC and Pizza Hut restaurants to seal up and stop using all meat materials supplied by the Chinese Husi factory.


  28. RBS soars on strong Q2 results

    07:59 AM ET · RBS

    • Out with preliminary Q2 results a week early, Royal Bank of Scotland (NYSE:RBS) is ahead 12.7% premarket after reporting net profit of £230M vs. £142M a year ago. Helping along earnings was a £93M release from loan loss provisions vs. a £1.12B charge last year.
    • The bank recorded litigation and conduct charges of £250M in Q2 and says it expects higher cost for the full year.
    • “Let me sound a note of caution,” says CEO Ross McEwan. “We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will hit our profits in the months and years to come … No one should get ahead of themselves here – there are bumps in the road ahead of us.”
    • Noting the beat is mostly attributable to loan loss charge reversals which is not sustainable, Citi’s team views today’s reaction as “overdone.”
    • The official Q2 report is due on August 1.


  29. Fox-BSkyB deal gains funds for improved Murdoch bid for Time Warner

    07:49 AM ET · FOXA

    • 21st Century Fox (NASDAQ:FOXA) isn’t saying how it plans to use the ~$7.2B in cash after taxes that it expects to receive in the sale of its pay-TV businesses in Germany and Italy to BSkyB (OTCQX:BSYBY), but clearly the deal gives Rupert Murdoch ammunition to increase his $85/share bid for Time Warner (NYSE:TWX) without jeopardizing Fox’s investment-grade credit rating.
    • BSkyB, which is 39% owned by Fox, becomes a European satellite and cable service with 2M subscribers, and gains leverage as it negotiates for right to sports and entertainment.
    • The deal is great for Murdoch since now he can keep on pursuing the TWX deal and fulfill his dream of becoming the single entrepreneur in the global media industry with the largest content breadth and depth.
    • Also: Fox says it will renew a share buyback program using the proceeds from the BSkyB deal, regardless of any acquisitions it undertakes.
    • TWX +0.3% premarket.


  30. Deckers higher on Jefferies upgrade

    07:22 AM ET · DECK

    • Deckers Outdoor (NYSE:DECK) has been upgraded by Jefferies to Buy from Hold after the company’s strong FQ1 performance and greater conviction in margin expansion potential and new product launches.
    • Jefferies raises the price target for the stock to $130 from $78.
    • DECK +7.4% premarket


  31. Lowered price targets and downgrade for Amazon; -9.8% premarket

    07:20 AM ET · AMZN

    • Amazon (NASDAQ:AMZN), says Cowen’s John Blackledge maintaining his Outperform rating but lowering the price target to $390 from $410, “delivered a mixed report with units stabilizing and a topline result and guide that met expectations, but the profitability disappointed. Also, AWS price cuts put an unexpected dent in growth.”
    • Also continuing with a Buy rating, but lowering the price target is BofA’s Justin Post who cuts to $400 from $420, noting the Q3 profit outlook as coming in well below expectations.
    • Baird and Evercore also cut price targets, and B. Riley pulls its Buy rating, downgrading to Neutral.
    • Shares -9.8% premarket
    • Previous Amazon earnings coverage


  32. Russia says U.S. sanctions break WTO rules, may trigger trade conflict

    05:09 AM ET · RNFTF

    • Russia’s ambassador has declared that the July 16 U.S. sanctions imposed on Rosneft (OTC:RNFTF), Novatek (OTC:NOVKY) and Gazprombank (OTCPK:OGZPY) violate World Trade Organization rules and may force Moscow into a destabilizing trade dispute.
    • The accusation comes after the U.S. condemned Russia for firing artillery across the border into Ukraine.
    • A European sanctions proposal against Russia is still being drafted following yesterday’s EU summit.
    • ETFs: RSX, RUSL, RSXJ, ERUS, RUSS, RBL, RUDR


  33. Glaxo bribery claims stretch to Syria

    02:57 AM ET · GSK

    • GlaxoSmithKline (NYSE:GSK) is now facing corruption claims in Syria, where it’s has been accused of bribery to secure business.
    • The drugmaker is investigating the claims which date back to 2010 after a whistleblower’s email was sent to the company.
    • Syria is now the sixth country to be investigated by Glaxo for smaller-scale bribery claims compared to the $480M Chinese allegations which have plagued the company since last July.
    • GSK -0.2% AH


  34. BNP Paribas in hot water again

    02:25 AM ET · BNPZY

    • After agreeing to an $8.9B fine last month for U.S. sanctions violations, BNP Paribas (OTC:BNPZY) has come under the spotlight again – this time with the U.S. Department of Agriculture.
    • A Federal court has entered an $80M judgment against the bank for cheating a program which covers the losses of American commodities exporters in cases where their import partner failed to make a payment.
    • BNP Paribas is accused of guaranteeing credit for companies known to be operating both the export and import side of the business.


  35. Report: Argentina to choose default

    01:54 AM ET · ARGT

    • Argentine representatives have concluded that the best option for the country is to default next week, says a spokesperson from NML Capital – one of the holdout investors involved in the negotiations.
    • Holdouts and Argentina met yesterday for about three hours with a court-appointed mediator in New York to try to reach an understanding before the country’s July 30 default deadline.
    • ETFs: ARGT


  36. Pandora questioned on CC over listener growth, competition

    01:20 AM ET · P

    • Pandora (NYSE:P) ended June with 76.4M active listeners, up 7.5% from 71.1M a year earlier but down 1% from 77M at the end of May. By contrast, the company saw a 300K listener increase from May to June in 2013.
    • Q2 listener hours jumped 29% Y/Y to 5.04B. Favorable comps – Pandora had a 40-hour free mobile listening cap in place from March-August – helped with the growth.
    • The company faced several CC questions (transcript) over listener growth and competition. SunTrust asked if the Apple/Beats deal had an effect, and Canaccord suggested Pandora isn’t investing heavily in customer acquisition for the time being since it still has excess ad inventory to sell.
    • Pandora insists the competitive landscape hasn’t changed, noting it has an estimated 77.6% U.S. Web radio listening share among the top 20 properties (per Triton Digital), and argues seasonality hurt June figures. The company says it’s spending more on marketing than ever, but admits it doesn’t have a large budget.
    • The Q2 slowdown in Y/Y subscription/other revenue growth is attributed to tougher comps – the mobile listening cap led to a surge in subscriptions last year. But growth was also relatively modest on a Q/Q basis (+5%). Pandora’s subscriber base grew by 100K to 3.5M.
    • Mobile ad revenue per thousand hours (RPM) rose 22% Y/Y to $36.00. It remained well below a PC ad RPM of $62.43 (+18%). Sales/marketing spend rose 49% to $66.2M, as Pandora continues spending heavily on sales hiring. Content acquisition costs were 52% of revenue.
    • Shares finished AH trading down 10.5%. Q2 results, guidance/details


  37. Amazon now -10.3% AH; CC touches on losses, AWS, video spend

    Yesterday, 07:35 PM ET · AMZN

    • “We have a long-term view … We’re not trying to optimize for short term profits,” states Amazon (NASDAQ:AMZN) CFO Tom Szkutak on the Q2 CC, repeating a mantra his company has uttered in some form for years. Judging by the reaction to the company’s EPS miss and guidance for a sizable Q3 op. loss, investor patience seems to be wearing thin.
    • Szkutak admitted Amazon Web Services’ near-term growth has been hurt by an ongoing cloud infrastructure price war with Microsoft and Google – while North American “Other” revenue was up 38% Y/Y, it fell 3% Q/Q, and Y/Y growth decelerated from Q1′s 60%.
    • He also suggests Amazon’s Q3 bottom line will be pressured by a “significant” increase in video content spend. The company plans to spend $100M on original programming alone, as it tries to counter Netflix’s big content investments and keep Prime renewal rates high.
    • On the bright side, Szkutak says Prime subscriptions are still growing well following this year’s $20 price hike, and that Q2 subscriber adds topped year-ago levels (no specific numbers, as usual). CIRP survey data appears to back him up.
    • Regarding China, he states Amazon has “a lot of interesting things” planned, and will continue investing in the Middle Kingdom. Alibaba remains the Chinese e-commerce market’s 800-lb. gorilla.
    • Q2 results, guidance/details.


  38. Hershey CEO says price increase necessary to help offset higher costs

    Yesterday, 06:49 PM ET · HSY

    • Hershey (NYSE:HSY) CEO John Bilbrey warns that the chocolate maker’s first price hike in three years likely will hurt sales volumes for the rest of the year and into 2015, but believes the popularity of chocolate will prevail over the long term.
    • “A price increase was necessary to protect our margins,” Bilbrey said in today’s earnings call.
    • HSY announced its average 8% price increase on July 15, saying it was in response to soaring cocoa and dairy prices, and rival Mars said yesterday it was raising prices 7%.
    • HSY already is losing market share, and the loss of customers from price increases “will be higher this go-round relative to the price increases of 2011 and 2012,” Consumer Edge Research analyst Rob Dickerson says.


  39. Caterpillar sees little sign of upturn in mining industry

    Yesterday, 06:25 PM ET · CAT

    • Caterpillar’s (NYSE:CAT) Q2 results sported a 4% Y/Y earnings improvement and the miner raised its 2014 earnings outlook, but sales fell 3% – CAT’s 19th straight months of declining Y/Y sales, dating to Oct. 2008.
    • The global mining slump is CAT’s no. 1 headwind: Q2 sales to mining customers fell 29% Y/Y, as miners continue to cut back capital spending amid a surplus in commodities production and a drop in prices.
    • The industry remains weak and order levels are still low, but CEO Doug Oberhelman offerd a glimmer of hope in today’s earnings call: “The bottom is just behind us. Our numbers are minuscule in terms of ticking up, but they are ticking up.”
    • For CAT to maintain a profit in the face of steadily falling revenue requires constantly finding new ways to boost product prices, cut costs and improve efficiency – all of which CAT has done – but as MarketWatch’s Jim Jelter points out, it’s only fair to ask how long it can go on, and how CAT’s 15% YTD share price is justified.


  40. NYA held 11,000 during this morning's opening sell off, so that may bode well for a bounce back later today.


  41. Competing against NFLX might not be as easy as it sounds for AMZN:

    He also suggests Amazon’s Q3 bottom line will be pressured by a “significant” increase in video content spend. The company plans to spend $100M on original programming alone, as it tries to counter Netflix’s big content investments and keep Prime renewal rates high.

    Content is getting more and more expensive and as they look for exclusive, it makes it that much more!


  42. India blocks WTO trade facilitation deal

    04:02 AM ET · EPI

    • India has opposed the World Trade Organization’s new global customs agreement, infuriating fellow member countries which have tried to seal India’s trade facilitation deal since it was agreed to at talks in Bali last December.
    • Despite demanding global trade reform, India says it will veto the deal until it secures rights linked to its system of subsidizing and stockpiling crops.
    • WTO members state that Delhi’s veto will be costly, economically and politically.
    • The deadline for the deal is July 31 and any suggestion to postpone it is likely to be rejected.
    • ETFs: EPI, SCIF, INDY, PIN, INDL, INP, INXX, INDA, ICN, SCIN, INR, SMIN, INCO


  43. Pandora – listen all the time in our house, but wouldn't pay, and rarely notice whatever ads they may run. Collection keeps getting deeper though. Lately been grooving to Eddie Hazel Radio! ;-)

    http://www.pandora.com/?sc=sh2162524245534650498&shareImp=true


  44. Scottmi – Is $40 for a whole YEAR too much to pay for 100% commercial free music?  Pandora is one of the best deals on the internet.  How cheesy is it to have friends over, throw on pandora, and listen to commercials.  JM2C.


  45. CYNK is now trading again. Hint: it’s down a little. ;-)

    For those of you that have not been following:
    Searching for Cynk: The $6 Billion Penny-Stock Debacle, From Belize to Las Vegas


  46. Sell-side weighs in on GM

    08:56 AM ET · GM

    • Downgrading to Outperform from Buy, CLSA says GM‘s pricing is unpredictable and questions whether the automaker can push new through new truck price gains.
    • Also downgrading is Deutsche, which cuts to Hold from Buy.
    • Buy the dip, says UBS, calling yesterday’s 4.5% decline an overreaction, noting better-than-forecast results in South America and Asia. The team also notes management’s confidence for better North American pricing ahead in H2.
    • Goldman maintains GM as a Conviction Buy.
    • Shares -0.75% premarket
    • Earnings coverage


  47. DRWI – Places units at $1.80 Canadian.  Bought back some of the stock I previously sold for $1.62.


  48. SQQQ options again disappoints as a "hedge."  COMP takes a noticeable dip from yesterday and what does my Jan15 40/45 vertical call spread opened yesterday show? Not even a tick up..no, instead down a few dollars. Pricing on these options is out to lunch, IMHO.  I'm a bit bitter on these because utterly failed me as a protection against an AAPL miss a couple years ago. Now they don't even seem to help against the index itself. If the simple spread doesn't start moving with the underlying PDQ, i'm going to have to leave SQQQ for good.


  49. SQQQ / Scott – The problem with these 3x ETF is decay. They are good hedges against violent moves, but decay smoothes out the small moves. This ETF has been reset twice since 2012. That's telling… 


  50. Phil – The "make $10K" TNA trade from a few days ago.  Is that still "on", or you still reccommend?  My order filled this morning at 1.70 for the bull call from a few days ago, but reading some more comments, I'm not sure if you feel it's still a good bet.  I haven't sold the put yet. 


  51. When you see companies like AMZN, NFLX, TSLA, HLF, and some others that are not transparent with their numbers of where sales come from or how much growth they had in a particular sector, you know something is wrong.  They would release all those numbers if they were proud of them.  AAPL is the perfect example, totally transparent.


  52. scott/ SQQQ

    A tight spread ($40/45 on a 3x ETF) requires you to have the timing right.  If you wanted the hedge to cover you continuously, you need to hold a naked call.  Sounds like you have solid confidence in your positions and just want momentary disaster hedges.

    What's the net delta on your position?


  53. Phil / Jefferson

    You are sounding awfully libertarian with your quotes this morning.  Quick, make some political comments before people get confused as to your leanings!!!


  54. P/Burr – LOL! are you a shareholder?  I stream it through SONOS and it goes for hours and hours without ads most of the time. I don't know if there is some special deal they did for the service.  sometimes I notice they talk for a minute or less instead of play music, but I can't say I've ever really 'noticed' what the ad was. Cheesy? well never been bothered by it and my social occasions don't usually revolve around the background music, even if it's Pandora. ;-) .


  55. AMZN/StJ – I didn't think their earnings were that bad.  They made plenty of money – they just chose to spend it on various projects.  If the phone pays off (I doubt it), then it will be a genius move.  I think they are turning the NFLX biz into a commodity as well, driving up content costs and reducing what viewers are willing to pay but, like their cloud biz – it's ultimately good for consumers, so I'm not unhappy.  

    Anyway, I'm going to look over AMZN on the weekend and try to figure out if they have any kind of path to $3Bn, which would bring their p/e to 50 (at $320) at some point.  More realistically though, I think there is a relatively easy path to $2Bn, which means $240 is certainly a buyable floor on AMZN – and that's the first time I've felt that way about them over $200.  

    Maybe we get lucky and people panic out – then we can call a floor around there. 

    V/Albo – They are maxing out with a 5% drop in a day ($210) and then a 20% retrace of the $11 drop is $2.20 ($212.20) and then $2.20 more makes a strong bounce at $214.40 – that's what we'll look for but I'm betting weak bounce fails to hold and they leg down another 5% next week – back to $200ish, where they start getting interesting again.

    NYSE/Den – I agree, holding 11,000 during this mess makes a strong bullish statement.  1,150 on /TF hugely important too.  

    P/Scott – I refuse to listen to things with commercials, they annoy the crap out of me.  I wouldn't watch TV if not for Tivo skipping the commercials.  It's not so much the louder volumes (which should be banned) or the general stupidity as the repetition that drives me nuts – the same damned commercials over and over and over again.  They know enough not to run the same show every day but the same commercial runs every 10 minutes for months! 

    $40/Burr – That I would do if I didn't have 10,000 songs in my IPod already which I'm quite satisfied with.  

    CYNK/Diamond – Only down 90%?  Better than I thought.  

    DWRI/Albo – So they are a $98M company raising $25M by selling 22% of their stock?  I have no problem with that.  Actually, the $1.80 price includes a 2-year warrant for 1/2x at $2.25, so a bit of a cap on the upside if those kick in.  

    SQQQ/Scott – A bull call spread is never going to make a quick buck.  When SQQQ spikes, in fact, the long $40s lose premium and the short $50s gain it.  That's why I try to teach people to look at positions as "on or off track", rather than focusing on the balance.  The premise is the Nasdaq finishes down 10% in Jan and, if it does, the $1.55 spread pays $10.  If it doesn't, you lose $1.55 and, if you don't have longs that will make $3 or more when the Nas is up or down less than 10%, then you aren't properly balanced.  

    For example, if I sold (to be very simple), 10 AAPL 2016 $90 puts for $9.10, I'd have $9,100 and AAPL is at $98 so a 10% drop takes me to $89 and the AAPL 2016 $100 puts are $14.50 so my assumption is I'd be down about $5.50 ($5,500) on a 10% Nasdaq drop.  So, if I want to protect $3,000 of that drop, I buy 4 of the spreads for $620 and now I get back $4,000 (up $3,380) if the Nas is down 10% in Jan.  

    • If the Nas is NOT down 10% in Jan, then even if the 2016 $90 puts are priced like the $90 puts ($14.50 now) they'll still lose 1/3 of their premium or $5 x 10 contract or $5,000 and I'd be about even on the short puts and down $620 on my protection.  Anything over -10% means I'll make some portion of my $9,100 less the $620 I spent on the hedge. 
    • If the Nas is down 15% and AAPL is down 15% at $82, then the short 2016 $90 puts will price about where the $105 puts are now = $17.40 less 1/3 (premium decay) so $11.50 down $2,400 on the AAPL puts but the hedge would return $4,000 of that to mitigate the loss.

    That's how you manage a hedge and that's how you manage your expectations for a hedge!  

     TNA/Burr – It's only meant for playing the RUT over 1,150 but there's nothing wrong with seeing if we hold the 200 dma at 1,142 if you are already in it, rather than bouncing out.  

    Transparency/Rustle – Yes but you do give away a bit of your game plan when you detail like that.  I can see why companies don't want to but, hopefully, they can see why I don't like to invest in them… wink

    SQQQ/Scott – Ah, JPH just pointed out that you don't have our $10 spread but a $5 spread instead.  That has 0% chance of showing you a gain until sometime in November unless SQQQ is over $45.  You have to learn how these relationships work.   If you did, you never would have taken that spread as short-term "protection".  

    Libertarian/JPH – I cannot so easily be pigeon-holed.  


  56. /CL - LETTER FROM EU COUNCIL HEAD VAN ROMPUY TO MEMBER STATES SAYS RESTRICTIONS ON SUPPLYING TECHNOLOGY TO RUSSIA SHOULD INCLUDE OIL, BUT EXCLUDE GAS SECTOR-EU SOURCES  

    Sorry about the caps…Ctrl+C…Ctrl+V…  


  57. phil, i sold the USO 39 puts this morning when USO visited $37.5  Would you suggest reloading ?


  58. SQQQ – JPH. Phil  thanks. Yes I clearly have more to study on these.  also, not taken as "short term" per se, but I did expect the price of the spread to move if even only slightly, WITH the underlying. VIX and decay may be the culprits.


  59. DRWI – Thinking it could pull back some more.  The offering was done at $1.656 US.  Stock trading below that price, but without the warrant kicker.  Willing to average down on the stock on further weakness. Needless to say, it's a very speculative play.


  60. /NKD Phil this just moved down to 15455 for a $225 gain from 15500. What do you look for as goal on this trade.  have gotten much better at /CL and now have a feel for when to move, but haven't a clue for /NKD just yet. So, any thoughts as to how far you look for this to fall?


  61. This is fun – quiz tells you what decade you were born in.  

    Speaking of oil – down to $101!!!   You would think sanctions would boost it but noooooooooooooo.  

    Ouch, my old Jr High School is running a new program to extend the school day by 2 hours to improve education – thank God I got out!!!   http://newyork.cbslocal.com/2014/07/24/pomona-middle-school-extends-school-day-by-two-hours/

    And, for JPH:


  62. SQQQ – Btw, was anyone able to get a fill on the Jan $40/$50 spread for $1.55?  I didn't see that price get under $2.


  63. Phil- BTW, made some nice coin this week on the oil trades, but it required tremendous discipline to wait out some of the spikes due to all the bad news that made it move away from where we expected. I also understand that we are in a cycle where bad news is being brushed aside more quickly than it should, so it is easy to see how if hostilities had gotten more serious, these moves could have lasted a lot longer, so luck was a definite factor this week too. Thanks for educating me on futures trading, because it is really a lot of fun and takes care of my long denied gambling urges. 


  64. Thanks for oil, Phil, very nice gain from yesterday!!  My TZA hedge also paid off nicely, and Tesla, sheesh, who is on the long side of these puts I keep selling  --  up almost 8% in 10 minutes!!  Would it be too cute to flip long?


  65. Long the market, not Tesla.


  66. /NKD still moving in the right direction now 15435!


  67. Hi Phil.  Back from vacation and catching up.  Lots of upgrades of GM at this price.  Your opinion?


  68. Craig /Futures

     

    I couldn´t be agree with the gambling definition for futures, while they can be manipulate in the short ( very short) term is clear that certain logic ( not market logic) moves it.

    What Phil offer to us is " that " logic which is not a popular one, and still, he has  mistakes.

    In futures you have to imagine that there are 2 million traders doing exactly the same that you, in the same quote than you,  many of them in India and China (actually our prey), we still have the valves and buttons for oil, cooper, steel etc in London and N.Y but, time will come that Peking will have reserves of metals big enough to control markets…is a matter of time.

    In the meantime enjoy (as I do ) the ride.


  69. DJI leading the plunge today..


  70. STJ/SQQQ – I wonder if they would be another good candidate for a VXX type strategy.  Maybe buy the 2016 40/25 BCS, for a 1X entry, and plan on doubling down a few times on big dips?  It might not be as dependable as the VXX trade, but it should still work out unless the market crashes pretty badly, and stays down.


  71. Advil-not sure what you meant, but I think you disagree with my calling it a "gamble." What I was saying is that while we are trying to be the house, it definitely has the feel of gambling. I enjoy the rush of seeing my "bet" move one way or another and trying to make it pay off with double downs, or stops. I have to go so I am taking my $400 gain on /NKD at 15420 and hoping I don't miss another big move down.


  72. USO/Lunar – Holy crap, oil just jumped back to $102.50 – what insanity.  I'd say stay out until we see where it settles but good job taking that money off the table.  Yes, I will like them short again at $103, of course – and $103.50 (if they get there).  

    SQQQ/Scott – When an index falls, the VIX goes up and that has more of an effect on the out of the money calls you sold than the in or near the money calls you bought so you will NEVER be happy with the price action of those kinds of spreads on the way down.  

    /NKD/Craigs – I don't have "goals" on Futures trades.  I look for good opportunities to long or short where I feel there's at least a 70% chance of getting it right AND there is a good back-stop (strong support/resistance line) to prevent me from taking a big loss if I'm wrong.  Then, once I'm in the trade, I just let the momentum show me where to get out.  When the momentum slows or when we break over a weak bounce, I'm usually done with with the trade.

    With /NKD, the drop is from 15,550 and figure the 50 lines are significant so 15,450 should be supportive (and wasn't) so, at 15,440, 15,450 becomes the stop, even though a 20-point bounce is expected here (weak).  Next stop would be 15,400 and then we'd expect a 30-point bounce to 15,430 and, if not, then 15,400 would be likely to break and then, at 15,350, our stop bumps up to the 40-point weak bounce at 15,390, etc.  

    Of course, at a 1% drop (150 points @ 15,400) the chance of a weak bounce back to 15,430 is VERY strong so, at 15,430 you almost could take that money off the table (when in doubt, sell half) as that is about as low as you are likely to go in one move and then we can re-load off the bounce (hopefully a strong one back over 15,460) or the break below 15,400.

    And, of course, watch the Dollar – below 81 is bad for /NKD, over offers good support. 

    Oil/Craigs – The key is that the Oil Futures tend to trade in .50 channels regardless of which way it's trending.  All we try to do is identify the tops of those channels and play them short (when we're bearish).  Glad you are enjoying it but don't get carried away!  Moderation is the key.  

    You're welcome ZZ.  I don't like to flip-flop on trades like that because I don't have conviction to the other side and that, then, leads to poor decisions more often than not.  I just wait for it to pop again and then short again.  

    Speaking of shorting, BIDU $221.68 and the Oct $220 puts are just $12 and were $30 in the money yesterday.  Fun play looking for a little pullback next week.  

    GM/Taihu – No thanks.  It will take them a very long time to recover their reputation.  The sales seemed to hold up this Q but that was because they discounted the crap out of their cars and made no money.  Then there's lawsuits pending, etc.  Why mess around with it at $35, which is barely off the high of $41?

    DJI/Scott – That's why DXD is our primary hedge in the STP.  


  73. Speaking of flipping long – /TF at 1,140 is a fun long now that Europe is closing.  They were a big part of our sell-off and we'll see if we can recover a bit on slower trading.  Tight stops below, of course.  


  74. TNA TODAY $70 calls are $1.40 with TNA at $71.26 so just .14 premium is another way to play long here.  Figure stop out at $1.10 risks .30 so if you bought 10 contracts for $1,400, you are risking $300 with a very nice potential upside.  


  75. So glad I was shorting CL with paper money during that spike…. 


  76. I looked at sqqq & it is so thinly traded that I nixed it. I had great profits in rgen & couldn't get rid of the trade-no buyers!! Now I look HARD at any options trade to make sure it has a lot of volume, at least a lot for this market, which is mediocre at best. Phil-you went to school in Rockland County. Lived there, Nyack for a number of years. Great town-lived around the corner from Helen Hayes McArthur who had her place on the Hudson River that Rosie O' owns now. In laws rubbed shoulders with Maxwell Anderson & lived down the road from many famous figures in New City.


  77. Added short Bidu Oct 220C for 11.40


  78. FU TSLA!!!!


  79. Jabo- Still laughing. That was ME when I was trading TSLA, BUT I learned & gave it up!


  80. SQQQ / Palotay – I'll look at the history. All these 3x ETF are technically candidates as they all decay and are reset on a regular basis – TNA, TZA, FAS, TBT, etc. The problem is to look at the underlying instrument and time the decay. For example, on SQQQ, the underlying (NASDAQ) has been shooting up relentlessly for the last couple of years so a 3x short ETF will get killed faster. VXX is different because there is no sustained move in the VIX. It spikes and goes down. There is no risk of the VIX going up for 2 years running for example. If the NASDAQ were to turn bearish for a couple of years, SQQQ would not be reset. Look at TQQQ, it didn't decay at all and kept on climbing so much that they had to split it. Can you make money that way – I guess, but many factors enter in consideration.


  81. imf fears asset bubbles as imf pushes central banks to inflate asset bubbles…ahahaha

     

    http://www.telegraph.co.uk/finance/economics/10989500/IMF-fears-ultra-low-rates-are-fuelling-asset-bubbles.html


  82. Thanks STJ.  


  83. STJ – You have really made an art out of shorting the VXX.  Earlier you talked about the decay of the 3X ETFs over time.  If someone thought the direction of the market would be down for the next several months, wouldn't it make sense to sell short or buy puts on something like the SPXL to hopefully capture the direction and decay ?


  84. happy friday phil — do you have a target in mind for uso — perhaps 36ish?


  85. Oil/Ricbah – The trick is, if you get burned like that, to pick a spot to reload for the move back down.  Already oil back to $101.65.

    Nyack/Pirate – I lived in Nyack when my parents first got divorced (1971) for maybe one year.  We were in the apartments on the water just north of the bridge.   And, of course, like any Rocklander, we used to go to Nyack for Rocky Horror Nights and fancy dates.  Nyack had one of the first sushi places in the area.   If you were in that crowd you probably know the Mamaroneck Beach and Yacht Club – I was assistant Maitre D' there during the summers of my college years.  

    Hey cool!  I just made a reasonable baked potato in 4 minutes in the microwave with my new Potato Express.  Jackie dragged me into one of those "As Seen on TV" stores over the weekend and this thing was $5 so I figured I'd try it and I just remembered I had it.   It came out way better than I thought it would!  

    TNA $70s at $1.70 already so obviously a no lose stop at $1.50 now.  /TF at 1,142.50 so up $250 per contract there.

    Ultras/StJ, Palotay – The reason VXX works so well is that it's NOT an ultra, but it turns over so much it gets chewed up over time.  3x ETFs are MUCH more risky because a black swan event that moves the underlying 10% in one day can pop the ultra 30% against you and a quick 20% move over a week can leave you with a 60% move against you in the ETF and massive losses before you know what hit you.  Clearly not unprecedented since we've had 9/11, 2008 and two flash crashes that all would have made crushing disasters already this century.  I like playing TZA when it's cheap (selling puts) because it doesn't have that far left to fall as the losses are limited but be VERY careful how you play with those 3x ETFs – they can bury you fast.  

    IMF/Angel – Coordinated madness is still madness.  

    Nice, STP up 16% now and LTP still up 19.4% – we must be doing something right…

    USO/Toe – I would think we'd see $36 again, which is $100 oil.  Certainly after Memorial Day I'd expect it, if not sooner.  


  86. STJ/SQQQ – I wonder if you did a pair trade short on both TZA and TNA, or the QQQ equivalent one, that would help balance the position, and take more advantage of the decay.  You couldn't lose on both, but you could win on both.  


  87. Potato Express – Aah, the little things that make us so happy !

    Or in the words of Dan Quayle, "I love my Potatoe Express."


  88. ETF / Albo, Palotay – That could be the basis of a nice weekend study and look at strategy that could benefit from the decay as well as the 3x move.


  89. PHIL/COORDINATED DON'T YOU HATE EVEN USING A WORD THAT IMPLIES INTELLECTUAL ELASTICITY?

    GOT LOVERS HERE YOU GO

    http://m.youtube.com/watch?v=5Krz-dyD-UQ&persist_app=1&app=m


  90. Phil/USO

    Did you mean Labor Day? (Memorial Day?)


  91. CMG unstoppable on its march to 700.


  92. Phil // Palotay // StJ
    Thats what I'm doing ( TZA, SQQQ, TNA ) and it seems to hold ground.
    However, I am treating SQQQ like TZA ( flipping longs every month and collecting the shorts ) 
    Phil, do you think thats simply too dangerous.
    If I could have one webinar ( albeit boring ) I would love to find a CONSISTENT hedge strategy that I could just pound home very month. I feel like I'm switching horses too much and have different hedges in different accounts.
    Would be unreasonable to simply play TZA period. Gauge the 1% loss/gain and apply it every month ?


  93. AEO – I don't know who would be buying them, but this morning someone sold 400+ Nov $13 calls @ .20


  94. Phil – Re: Tivo skipping the commercials …

    I saw this long ago on TIVO’s site (which is still there):

    NOTE: You cannot fast-forward if you are watching live TV.

    I figure it must be a feature not a flaw. :-)


  95. /NKD Phil- Tried to add to my gains by playing that bounce you mentioned and so far, it doesn't want to drop again, but I am patient. Just wondering if there is anything else to look out for besides the dollar, (which is cooperating thus far by moving up today) ? Also is there any particular time of day to exit this that is better or worse? 

    /TF -that was a nice couple of hundred on that, so thanks again Phil. 

    /CL- took your advice and stayed out today so I don't get too carried away, but what about now with this spike up? Any plays at 102?


  96. Craig / Gamble

     

    Yep,  Futures are a way of speculation against the logic or specifics of the product , gold oil, corn, whatever, when you bet ia a casino you have 3 contenders or a machine or croupier but here you have 2 million doing what you are.

    That is not betting..is something else.


  97. Phil // DXD
    Specific Q appended to the last
    DXD Aug 25/27 Bull Call // if I"m following our logic that the longs are less than the spread, this should be rolled at a loss, correct ?


  98. Little things/Albo – Yes, you would think that wouldn't please me so much, but it does…

    LOL Angel. 

    Labor Day/DC – The September one (I always get those mixed up for some reason).  

    CMG/Rustle – I heard they will introduce a $25 taco plate next Q.

    SQQQ/Wombat – It works until it doesn't.  It's like short strangles – very profitable every month until it isn't and you just have to hope you get 10 good ones before you get a bad one.  I don't know about a "consistent" hedging strategy – it makes best sense to short whatever is most overbought at any given moment.  Of course, making quarterly and semi-annual bets rather than monthly would be a big improvement (but your broker will miss the fees).  In the STP (now up 17%) we've had the same DXD play since 6/5, we bought back the short calls when the Dow popped and left the rest and, as we get closer to October, if they never hit, we'll just roll them to Jan.  Not hard.  

    AEO/Scott – That's shorting them.  

    TIVO/Diamond – That's why I don't watch anything live – neither do the kids.  If we're watching a live show, by the first commercial break they want to watch something else for half an hour and come back to it when we have a reasonable buffer built up.  

    /NKD/Craigs – It went back to 15,500(ish) and now failing again – not sure what didn't work.  Dollar popped to 81.20, which popped /NKD but now back to 81.13.    You can also watch the Yen and, of course, all other things being equal, /NKD will follow the Dow.  Time of day doesn't matter but Tokyo opens up around 9 and closes about 3 so be aware of that time when "real" trading takes over.  

    Oil/Craigs – Our current range is $100.50 to $103.50 so we go short at $103.50 or $103 and long at $100.50 or $101.  That means $102 is the WORST place to make a bet, doesn't it?  

    Also, shorting into the NYMEX close on a Friday is usually a very dumb thing to do. 


  99. Potato Express

    An alternative is seal wrap potato in parchment paper, must fold over edge, the move and inch fold again, until all around, and then tuck last end under. Works great with vegetables also.  


  100. Phil- thank you for the /CL explanation. yes 102 would indeed be a bad place to place a trade if it is in the middle of the day range. Duh! Some day I will see all and figure it out without needing to ask you. that is not today though. Glad you are there for us. 

    I am now back in the green on my /NKD trade as we write and being aware of the 3PM timeframe will help me attain discipline here.. Go 15400! Earlier I managed to catch the exact bottom at 15420, only because I had to run an errand and didn't want to leave it. Hoping my luck holds. 


  101. Portfolios/ Phil.

    If at all possible could you post the STP,LTP , 25K and butterfly portfolios so that I can study them over the weekend.Thanks


  102. Phil // Hedge
    Do you REALLY think I use a broker ?? ; >


  103. bidu making new highs


  104. Wow, that was close… Not something that I expected could happen:

    http://www.engadget.com/2014/07/25/solar-storm/

    If you've spent time on a beach without protection, you probably have a good idea of just how damaging the sun can be. That gigantic star that gives us life from millions of miles away can also do great harm, as Earth nearly discovered during a powerful 2012 solar storm. According to NASA, during the July 23, 2012 event, a plasma cloud left the sun traveling at 3,000 kilometers (1,864 miles) per second, passing through Earth's orbit. Our planet wasn't in its path at the time, but would have been just a week before. Instead, it hit a STEREO (Solar TErrestrial RElations Observatory) spacecraft, which was able to capture tons of relevant data. According to a study, the cloud could have caused more than $2 trillion in damage, knocking out electrical, communication and other global networks. Unfortunately, it may not be possible to prevent such a disaster, and while life would go on, it would be a far departure from what we're used to today.


  105. Phil – I think the absurdity of the necessity to put that on the TIVO site must have been lost on you. 

    I was actually hoping that I could fast-forward real time in order to know the results and bet on sporting events before everyone else had a chance to watch them live! ;-)


  106. A 1859 type solar event is given a 17% chance in the next 10 years. Like the one that missed in 2012 but hit 150 years ago.


  107. CDE – more option observations.. today someone sold 100+ Aug 8/9 strangles for .49. Earnings Aug 6, conf call Aug 7.


  108. Easy way to load a motorcycle on a bus.

    http://www.wimp.com/motorcyclebus/

    Friday afternoon in late July.  Guess it's time for some off-the-wall stuff ?  Wonder if he had a stiff neck the next day.


  109. Shadow- I have never read about the 1859 solar event. What were the effects and where did you read about it? I am really curious about that kind of phenomenon


  110. Phil/CMG

    I love Tacos! Really!? :)


  111. http://finance.yahoo.com/news/wal-mart-u-chief-faces-161902511.html

    New boss expected to fix low sales. They blame unstock shelves, register lines, and Amazon. That won't fix the real problem, Amazon revenue is down also and both especially wal-mart need to step up consumer incomes. $5 more per hour would help and then have everyone up to the top 10% get the same $5 raise. 


  112. Phil, what do you expect from Wynn this quarter?   They release Tuesday before the market opens.


  113. EXC/phil – down to support? good for short puts list here?


  114. EZCH/albo – dropping through supports today, 1, 2, 3…


  115. Good IPO for El Loco Pollo.  26 IPO's slated for next week.  You would think that would be a negative for market since it dilutes capital out there from other positions.


  116. Parchment paper/Shadow – Way too much effort.  

    Seeing it all/Craigs – Practice and practice and it becomes obvious.  Like when you first start playing outfield and have no idea what's going on but, after a while, you're moving as soon as the ball comes off the bat, right?  Oops, on /NKD that's 9pm and 3AM – sorry, thought that went without saying…

     Portfolios/DM – Wasn't going to do them today but I'll post without comments (since there's nothing to change anyway).

    Broker/Wombat – You're paying a fee to someone when you churn your trades.  

    BIDU/Abhish – 10% on the button is $224.75, maybe an overshoot but 20% retrace of that ($20 run) is -$4 to $220.  That's likely where we'll finish.  

    Plasma/StJ – I believe that was (assuming the article is factual) a CME (Coronal Mass Ejection), which is much, much rarer than a solar flare.  The only one we know of that hit the earth was in 1859 and did, in fact screw up electronics (such as they were at the time).  It's kind of like being struck by lightning, both in terms of liklihood as well as damage.  Will be a great time to buy the Nasdaq, after the collapse, as people are going to need A LOT of new gadgets to replace their fried ones!  

    TIVO/Diamond – Not too absurd, people don't understand the concept.  What's absurd is our education system that produces people who don't understand the concept!

    Motorcycle/Albo – I have some yard work that guy can do. 

    Tacos/DC – You don't have to wait.  In Brentwood, there's a place that has $38.50 filet mignon tacos.  

    WMT/Shadow – The problem is their customers are broke.  Their customers are broke because companies like WMT came into town and drove all the small businesses that used to pay people $15/hr out of business and replaced them with 1/2 the number of minimum wage jobs and the 1M store owners who used to make $100-250,000 a year and put it back into their communities have been replaced by one family that made $100Bn and funneled all the money to Bentonville (and, of course, to off-shore tax havens).  

    Since the afflicted towns no longer had any rich store owners to pick up the tax burden (but still the same number of people to care for and now more of them on welfare as WMT doesn't pay them a living wage), they end up raising taxes on the poor (the WMT workers), leaving them even worse off – even as the towns are forced to cut back services.  

    So I really don't see any way WMT will fix the problem – it's like expecting cancer to cure cancer.  

    WYNN/Options – I think middle of the road.  We are still aiming for them to be over $205 at earnings but under $210 (pretty specific) in the STP. 

    EXC/Scott – Looking good but kind of a falling knife at the moment.  Any reason you are unable to wait and see if it actually makes a bottom?  Some family emergency perhaps???  

    They just did a big dilution with 50M new shares issued, which was about 6% of the float and the dividend is $1.24 and I doubt they sold those shares to give back $60M in dividends so expect those to be lower along with earnings, of course, since the money they raised is for long-term projects.  So, down the road – sure it's a nice stock to be in but, short-term, I think the only reason they PAUSED going down is because they hit the 200 dma at $31 (yesterday).  

    From $37 to $29.60 is 20% and 15% would be $31.45 so those are the lines to watch.  They didn't complete the 20% move but blew through 10% and slowed but made 15% and a bit lower so 20% still a good target but, at the moment, held up by the 200 dma.  Figure the $7.40 move would have the 20% bounce and that's $1.50(ish) to $31.10, so that's weak bounce support and another $1.50 is $32.60 and THAT is when they start to look like they are recovering.  

    IPOs/Rustle – Don't worry, the Fed will just print more.  


  117. Scott – I've been watching EZCH myself.  Company reports on Aug 13th.  Don't expect too much in the quarter, but looking for a big ramp for 3rd and 4th quarter.  Hopefully, we get some color on their business prospects at that time.  Meanwhile, I'm keeping the faith.


  118. River of blood in China!  

    PHOTO: The water in a river in Xinmeizhou village in eastern Chinas Zhejiang province turned red overnight, baffling locals, July 25, 2014.

    Speaking of signs of Satan – Koch Brothers hold anti-Obamacare "Carnival" at the Washington Mall:

    this is how it works

    doctor my arm hurts

    the freak show is in town

    I wish this was a joke, but it's not! 


  119. The LNKD trade from Monday by T3 that I posted has done very well.  Up to 178


  120. Phil

    Those IPOs financed by fake and free money is what I was talking about yesterday and someday will backfire on the world. And people didn't get my point almost 30 years ago, computers have gone too far. Now big business has taken over everything including on lines ales that is the final nail in retail shopping. But there is more the banks own the paper for those companies that eventually will put themselves out of business. SUBPRIME BUSINESS LOANS, perfect storm that hasn't happened YET! AGI will insure the bonds because the Fed bailed them out on the first stupid perfect storm.


  121. So if I got the story right some jackass in Europe said we should punish Russia by withholding new oil drilling technology but allow the gas through to heat them next winter. And oil spikes $1.50 to burn every consumer in the world instead of Russia. Nice move idiot.


  122. Zzzzzzzzzzzzzz …

     

    If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring.   — George Soros


  123. PBR/Phil – earnings coming up Agg 8. Been coming back from the $10 lows. Do you like them at all or too many challenges ahead?


  124. Zzzzzzzzz.  Fun way to waste 1min 10sec of you're life.  Especially if you ride motor bikes…

    https://www.youtube.com/watch?v=g0wREXSUnzE


  125. $25,000 Portfolio ($25KP):

     

    Butterfly Portfolio:

    Income Portfolio


  126. Short-Term Portfolio (STP):

     

    Long-Term Portfolio (LTP):

     

    Let me know if I failed to add anything!  


  127. Phil-I knew that you meant 3am. I was looking at my clock as I wrote and just had pm on my brain. Starting to have more and more senior moments.


  128. We're outperforming Einhorn by a mile!  

    • David Einhorn's Greenlight Capital returned 7.9% after fees in Q2, bringing its YTD return to 6.4%. The S&P 500 returned 5.2% in Q2 and 7.1% YTD.
    • Among the fund's biggest gainers was Micron (MU -1.2%), with Einhorn noting last year's spike in DRAM prices turning out to not be a blip, and that consensus estimates remain too low – get ready for more earnings surprises and multiple expansion, he says.
    • "Nothing could be further from the truth," says Einhorn referring to media reports that he believes all tech is in a bubble. Among Greenlight's largest positions are Micron, Apple, Lam Research, and Marvell Technology. Of the Lam  (LRCX -0.6%) position – which was started in Q2 – Einhorn says the fund's average purchase price is $54.07, representing 7x Greenlight's estimate of calendar 2015 earnings, net of cash (the stock's near $70 at the moment).

     

    Subprime Business Loans/Shadow – I like that theory, makes sense.  

    • "We think the likelihood of a rise in government bond yields has increased and see this as a key aspect of the near-term macro outlook," says analyst Anders Nielsen as Goldman Sach's Global Opportunity Asset Locator (GOAL) downgrades equities to Neutral over the next 90-day period.
    • This is a short-term call, says Nielsen, reminding his team's continuing to be Overweight equities over the next 12 months.
    • The outlook for corporate credit is a bit more dour, with that asset class being downgraded to Underweight over both the next 3 and 12 months. Most at risk, says Nielsen, are investment grade credits given that spreads there are the tightest.

    Oil/Shadow – Yep, that's what's keeping oil from going under $100 and punishing Russia.  

    Boring/Diamond – Today kind of qualifies but my theory is, if we're having a "boring" day when the market drops 1% and none of our Members are caught off guard or panicking — then I must be doing my job right!  angel

    PBR/Scott – I liked them at $10, you are a bit late at $17.  I think this is more of a fair price for them but I'd wait for a pullback, maybe they re-test $14 (200 dma) and then you can do something with them.  

    BCS gets behind me on XOM short:

    • Exxon Mobil (XOM -1.2%) is downgraded to Underweight from Equal Weight at Barclays, primarily due to its relative valuation in the belief that potential upside is limited compared to peers.
    • XOM will continue to face relative headwinds concerning the lack of meaningful near-term production growth and the likelihood of a relatively steady high oil price environment, Barclays believes.
    • The firm recommends switching out of XOM to ConocoPhillips (COP -0.3%), Imperial Oil (IMO-1.3%) or Suncor (SU -0.3%).
    • Barclays also cuts Cenovus Energy (CVE -1.7%) to Equal Weight from Overweight, seeing operating issues at Foster Creek and Pelican Lake remaining a drag on shares over the next several quarters (Briefing.com).

    Senior Moments/Craigs – Ah, enjoy those Golden Years!


  129. Just for information IWM looks like it could revisit support @ 108.63 between 10 days and 2 months.

    QQQ should go to support @ 84.16 to make a healthy correction same 2 months.

    The other 2 possibilities are go back to 2012 lows or go to the moon.

    Distance future world banking crash! 


  130. Very weak finish but also meaningless volume – we'll have to see which way things follow through next week.  

    Gold back at $1,307, silver $20.75, copper $3.24, nat gas $3.78, gasoline $2.86 and oil is finishing at $101.89. 

    Have a great weekend, 

    - Phil


  131. phil and everyone else — enjoy your weekend!


  132. Thanks everyone for the amazing week.  I had the best week of my investing life this week.  Let's keep it coming!


  133. Phil

    Goldman reads my posts, Lloyd doesn't dare try his luck again, squeezed out at the last second in 2007-8. He really isn't very smart and kind of smells Musky.


  134. Phil

    A woman named Helen has taken over changing the fund profile with lots of facts. I couldn't digital copy but could print copies of MRI, CT, and X-rays showing the problem clear enough for anyone to see. Sending to her snail mail so she can scan them and pick the best 2??? Jen has a plan to spread the word out, no clue what.


  135. Phil:  "my theory is, if we're having a "boring" day when the market drops 1% and none of our Members are caught off guard or panicking — then I must be doing my job right! "   I would like to second that.  I've been a slow learner, mostly victim of the fallacy that, if you're pretty good at one thing [that took lots of time to learn] you will automatically be good at a second thing — overnight.  So it's been bloody, looking back.  But even "slow" eventually gets there.  Smaller positions, scaling in, selling premium, not believing that you understand things that a million other investors don't — it's been expensive and humiliating at times.  And entirely worthwhile: I made money both up and down this week, made adjustment with zen-like tranquility, had a plan for every eventuality I could imagine, and enjoyed myself thoroughly.  Not all weeks will go as well, but the "shock and awe" [at my own stupidity] are [mostly] gone.  Thanks very much.  


  136. Portfolios/Phil .. Thanks for posting and keep up the fantastic work!


  137. Changing history

    Wikipedia blocks 'disruptive' page edits from US Congress

    http://www.bbc.com/news/technology-28481876


  138. Palotay – Congrats!  My port stayed pretty flat, but no futures trading for me this week.  {sad face}.  Anyway, would you care to share which were you're big winners?  Earnings, futures, etc?



  139. Busy end of the week!


  140. Income inequality chart:

    http://dish.andrewsullivan.com/2014/07/25/taxing-our-way-to-equality/

    inequality-800x656

    Between the tax changes and health reform, Council of Economic Advisers Chairman Jason Furman argues that the administration has undone “more than a decade” of growing inequality. And he has a point. Liberals prefer talking about pre-tax inequality in large part because it’s a raw reading of how egalitarian our economy is—it tells us how bad the income gap would be were it not for Washington’s intervention. But looking at post-tax-and-transfer inequality tells us how much more work needs to be done to even outcomes—and whether the government’s interventions are having an effect. Both sets of numbers tell us important stories. One says the rich are still pulling away from the rest of us. The other says that the administration has managed, ever so slightly, to pull them back.


  141. Glad to hear it Palotay and ZZ!  

    Shadowfund/Shadow – Well, let me know when the updates are ready and we'll promote it some more.  

    Thanks DM. 

    Wikipedia/QC – Well that is both funny and sad.  Which part of the Rumsfeld entry had to be corrected?  Is he just a lizard who eats babies or an alien lizard but without the baby-eating?  

    Good news everyone:  Greg has our new Webex Webinar system ready to test.  We'll do a session on Monday to see how it goes.  

    Big Chart – No additional technical damage done so far but Dow threatening.  A bad start on Monday can turn things pretty ugly if 16,850 fails (50 dma).   The Fed can save us on Wednesday and, between now and then, we do have a bunch of notes to sell.  

    NFP comes early this month on Friday and housing data may show weakness while consumer confidence may have been hit by rising oil and gas prices in July.  GDP is a revised Q2 and they could give it a big upside revision (from down 2.9%) and flip the markets up hard and fast on Weds.  So it will be interesting, to say the least. 

    Inequality/StJ – Well those poor people clearly need to pay more taxes and get less services, right?  After all, you can't expect the top 1% to give up 4% of their income to double the income of the bottom 20%, can you?  


  142. We Visited A Bunch Of AT&T Stores And Found Almost No One Who Cared About Amazon’s New Phone
    http://www.businessinsider.com/first-day-of-amazon-fire-phone-sales-in-att-2014-7


  143. I’ve worked at McDonald’s for 10 years and still make $7.35 an hour
    http://qz.com/240827/ive-worked-at-mcdonalds-for-10-years-and-still-make-7-35-an-hour/


  144. Amazon’s far-reaching ambitions, lack of profits, unnerve investors | Reuters
    http://in.reuters.com/article/2014/07/26/us-amazon-com-ambitions-analysis-idINKBN0FU2DQ20140726


  145. Verizon will soon throttle LTE data: here’s what you need to know
    http://www.theverge.com/2014/7/25/5937217/what-you-need-to-know-about-verizon-lte-throttling


  146. “Evil that is stalking us”: Fear-mongering and the real Middle East scandal
    http://www.salon.com/2014/07/24/evil_that_is_stalking_us_fear_mongering_and_the_real_middle_east_scandal/



  147. Phil

    (Not sure if you answered)

    Have you ever used

    Bet to win?

    Thanks


  148. Lawsuit Stunner: Half of Futures Trades in Chicago Are Illegal Wash Trades
    http://wallstreetonparade.com/2014/07/lawsuit-stunner-half-of-futures-trades-in-chicago-are-illegal-wash-trades/


  149. Food Inflation Watch: California Farmers’ Water Costs Surge 700% After Government Cuts Supply
    http://www.zerohedge.com/news/2014-07-24/food-inflation-watch-california-farmers-water-costs-surge-700-after-government-cuts-



  150. Argentina Just Played Its Final Card… And It Lost
    http://www.businessinsider.com/judge-will-not-grant-argentina-stay-2014-7



  151. The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986
    http://www.zerohedge.com/news/2014-07-22/baltic-dry-index-collapses-18-month-lows-worst-july-1986


  152. “Is College Worth It?” – Here Is The Fed’s Answer In One Chart
    http://www.zerohedge.com/news/2014-07-22/college-worth-it-here-feds-answer-one-chart



  153. Three Charts Of The Week: Money Printing Is Not Bringing Prosperity To Main Street
    http://www.zerohedge.com/news/2014-07-20/three-charts-week-money-printing-not-bringing-prosperity-main-street


  154. What Recovery? US Macro Suffers Longest Streak Of Weakness Since Lehman
    http://www.zerohedge.com/news/2014-07-19/what-recovery-us-macro-suffers-longest-streak-weakness-lehman


  155. Goldman Slams Abenomics; Questions “Validity Of BoJ’s Target”
    http://www.zerohedge.com/news/2014-07-18/goldman-slams-abenomics-questions-validity-bojs-target


  156. Crises Take Longer Coming Than You Think, and Happen Much Faster Than You Thought | FS Staff
    http://www.financialsense.com/contributors/satyajit-das/crisis-takes-much-longer-than-you-think


  157. El Pollo Loco shares surge more than 30% after IPO
    http://www.latimes.com/business/la-fi-pollo-loco-ipo-20140725-story.html


  158. Wall St. Week Ahead: Even modest GDP bounce may support market
    http://www.reuters.com/article/2014/07/26/us-usa-stocks-weekahead-idUSKBN0FU22L20140726


  159. McDonald’s declared unsanitary and unhealthy by Russian food standards
    http://www.theguardian.com/business/2014/jul/26/mcdonalds-russia-unhealthy-consumer-protection




  160. Thanks Obamacare! Check is in the mail for 6.8 million people
    http://money.cnn.com/2014/07/24/pf/insurance/health-insurance-refund/


  161. Here’s Why Tim Cook Is Upbeat On iPads Despite Its Shrinking Sales
    http://www.businessinsider.com/tim-cook-ipads-2014-7



  162. JetBlue is stealing legroom from coach to give to its new business class
    http://qz.com/240159/jetblue-is-stealing-legroom-from-coach-to-give-to-business-class/


  163. Dunkin’ Sales Disappoint as Same-Store Sales Drag
    http://www.entrepreneur.com/article/235924


  164. Powerful people have a distorted perception of time
    http://qz.com/240056/powerful-people-have-a-distorted-perception-of-time/


  165. Dunkin’s lower-income consumers still feel squeezed
    http://fortune.com/2014/07/24/dunkin-consumers-pinched/


  166. The Restaurant Industry Still Hasn’t Recovered From The Recession
    http://www.businessinsider.com/restaurant-traffic-flat-2014-7



  167. Burrben – I have organized my portfolio into the following sub-portfolios.  

     

    Long/Term Conservative portfolio (the vast majority of my money).  This resembles the income portfolio or long term portfolio, but with a lot more positions, and has been doing really well so far this year.  Up about 20%.  Apple is a big part of this portfolio at about a 10% allocation. I'm short about 30 put contracts, at around the $75 level ($225k put obligation if assigned).  I used that money to buy a bunch of different 2016 call spreads ranging from $80-110.  At my current delta I make/lose $3,000 per point Apple moves. I've made about $80k so far this year in Apple.  In addition to Apple, this portfolio includes names like ABX, CLF, AGNC, AIG, AKAM, BBBY, BBY, BRCM, EPI, EWT, EWZ, F, FCX, FTR, GE, GILD, GM, HK, HOV, IBM, ISRG, MU, NLY, OPTT, PFE, PIR, PLX, RIG, T, SHLD, SLW, SGEN, TASR, TEX, TM, TTWO, TWTR, VXX, WFM, WEN, YHOO (big move this week).  Mostly short puts, buy writes, and artificial buy writes.  Up about $140k total on this portfolio YTD.

     

    The slowly recovering momentum shorting portfolio.  Now filled with strangles designed to recover from big losses on short call positions from earlier this year or last year.  I'm short strangles on NFLX, TSLA, WYNN, and GMCR with very wide strangles that expire in 2015, this was Phil's suggestion for how to recover, btw.  I'm still down about $70k in this portfolio, improving from down $120k earlier this year, and should be even by the end of the year.  NFLX had a big move this week, and made a very big positive impact on my portfolio.  The others are just burning premium, as they do every week that there isn't some outrageous nonsensical move, and I have about 30% of cushion each direction before my strangle is in jeopardy.  My new rule is to never get into these momo short positions in any significant size ever again, as they take forever to recover from, and can easily erase huge gains from the normal conservative positions that Phil recommends all the time.  They aren't worse the stress!  New members should really take heed.  They aren't worth it!  Once I'm even, this portfolio will cease to exist.

     

    The Peter Strangle Portfolio – This has been going really well since I started following.  Thanks Peter!  I'm up about $25k YTD.  I keep tons of excess margin available for this one, for the inevitable gigantic move.  I'm using the same position sizing as Peter. 

     

    My misc short term trading portfolio, where has mainly focused on shorting oil calendar spreads when the spread gets unnaturally high.  This has been running pretty well the last couple months.  With about $5k in gains just this week.  I'm also short oil via SCO in this portfolio.  This is up 30-40k for the year.

     

    Lastly, I have the butterfly portfolio, which has been going well, but essentially flat in July.  I started following this pretty recently, so I don't have much gains.

     

    This is on $1.5M, and I have about 60% of my total buying power currently available.  I use TOS's position grouping feature to keep track of each of the portfolios, which work reasonably well.  It doesn't keep track of closing positions though, which is disappointing.  I hope this helps.


  168. Next week should be fun: potential for Argentina to default on it's bonds, escalating war in the Ukraine and Middle East. Anything else?


  169. http://finance.yahoo.com/news/goldman-mortgage-deal-federal-agency-174254414.html

    diamond

    Lloyd is facing $1.25 billion for ripping off Fanny and Freddie!


  170. shadowfax – Just doing God's work! ;-)


  171. HI Phil Can you give me a comment on PAY trading on the lower ladder at 35.27 TIA


  172. Watch this video at http://bloom.bg/1ryItyu

    Apple Gets Ready to Launch Larger iPhone

    July 22: ISI Senior Managing Director Brian Marshall and IDC Chief of Research Crawford Del Prete discuss Apple’s push into larger smartphones.

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


  173. From Bloomberg, Jul 26, 2014, 6:00:00 PM

    Smoke billows from an area near Tripoli’s international airport as fighting between rival factions continues, on July 24, 2014. Photographer: Mahmud Turkia/AFP via Getty Images

    The U.S. State Department evacuated
    its Libyan embassy yesterday, sending staff elsewhere and
    advising all American citizens to leave the country after
    clashes between militias near the diplomatic offices in Tripoli.

    To read the entire article, go to http://bloom.bg/1po66DO

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


  174. From Bloomberg, Jul 26, 2014, 6:06:19 PM


    July 25 (Bloomberg) — White House Press Secretary Josh Earnest talks about the outlook for imposing further U.S. and European Union sanctions against Russia.
    Earnest, speaking at the daily White House news conference, also discusses efforts to stem the influx of migrant children at the U.S.-Mexico border. (Source: Bloomberg)

    Ukraine’s army advanced on a last main separatist stronghold as the U.S. said Russian President Vladimir Putin is poised to give the rebels heavy weapons and European Union leaders considered their toughest sanctions yet on Russia.

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

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


  175. From Bloomberg, Jul 27, 2014, 2:38:12 AM

    Palestinians try to find their belongings amongst the debris of buildings during a cease-fire in Beit Hanoun, Gaza, on July 26, 2014. Photographer: by Ezz Zanoun/Anadolu Agency via Getty Images

    Israel agreed to a United Nations request to extend a temporary halt to Gaza Strip fighting until midnight even as Hamas rejected it and launched rockets at Israel.

    To read the entire article, go to http://bloom.bg/1nIU9M6

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


  176. From Bloomberg, Jul 26, 2014, 7:14:14 AM

    Police in Norway are on high alert
    after receiving intelligence that nationals returning from Syria
    may be plotting a terrorist attack within days against the
    Scandinavian country.

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

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


  177. From Bloomberg, Jul 26, 2014, 12:01:01 AM

    Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA)
    and Bank of Nova Scotia were accused in a lawsuit of rigging the
    price of billions of dollars in silver, an allegation similar to
    earlier suits involving the London gold fix.

    To read the entire article, go to http://bloom.bg/UsHB04

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  178. From Bloomberg, Jul 26, 2014, 12:00:01 AM

    A gauge of the dollar advanced the
    most in four months as reports showed signs of improvement in
    the U.S. labor market before the Federal Reserve meets debate
    the pace of interest-rate increases.

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

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  179. From Bloomberg, Jul 24, 2014, 5:30:23 PM

    July 25 (Bloomberg) — Mark Zuckerberg is now richer than Google co-founders Sergey Brin and Larry Page. The Facebook chairman added $1.6 billion to his fortune today after the world’s largest social network closed at a record. The surge elevated the 30-year-old’s net worth to $33.3 billion, moving him past Brin and Page as well as Amazon CEO Jeff Bezos on the Bloomberg Billionaires Index. Rosalind Chin reports on “First Up.” (Source: Bloomberg)

    Mark Zuckerberg is now richer than Google Inc. (GOOG) co-founders Sergey Brin and Larry Page.

    To read the entire article, go to http://bloom.bg/1reAQK6

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  180. From Bloomberg, Jul 22, 2014, 5:00:01 AM

    July 22 (Bloomberg) — Bloomberg’s Peggy Collins ranks 401(k) plans on “Bloomberg Surveillance.” (Source: Bloomberg)

    A first-of-its-kind ranking of 401(k) plans at the 250 biggest companies in the U.S. found that ConocoPhillips and Abbott Laboratories are among those that provide the most lucrative retirement benefits. Among the least generous are Facebook Inc., Amazon.com Inc. and Whole Foods Market Inc. The natural-foods grocer offers a maximum contribution of $152 annually.

    To read the entire article, go to http://bloom.bg/1A0paR8

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  181. Watch this video at http://bloom.bg/1x8Qats

    Japan June CPI Rises 3.3% on Year

    July 25: Bloomberg’s Zeb Eckert reports on the latest inflation figures coming out of Japan.

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  182. Watch this video at http://bloom.bg/1pUERlM

    Kiesel Sees Opportunity in Macau Gaming, Likes Wynn

    July 25 (Bloomberg) — Mark Kiesel, deputy chief investment officer at Pacific Investment Management Co., and Kathryn Rooney Vera, emerging market analyst at Bulltick Capital Markets, talk about investment opportunities outside the U.S., the outlook for U.S. stocks and Federal Reserve policy.
    They speak with Trish Regan, Julie Hyman and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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  183. Watch this video at http://bloom.bg/1xaKcrP

    How Is the Bull Market Shaking Off Global Risks?

    July 25: Julian Emanuel, U.S. equity and derivatives strategist at UBS, discusses why markets are seemingly ignoring geopolitical risks from Europe and Russia.

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  184. From Bloomberg, Jul 26, 2014, 12:01:00 AM

    Google Inc. (GOOG) more than tripled
    spending on acquisitions in the first half of the year to $4.2
    billion, as the Internet company ramps up investments to expand
    its services.

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

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  185. From Bloomberg, Jul 26, 2014, 12:00:03 AM

    Goldman Sachs Group Inc. (GS) is in talks to settle a U.S. regulator’s claims the investment bank sold faulty mortgage-backed securities to Fannie Mae and Freddie Mac and will probably pay $800 million to $1.25 billion, according to a person briefed on the discussions.

    To read the entire article, go to http://bloom.bg/1uoVv3L

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  186. From Bloomberg, Jul 26, 2014, 12:00:00 AM

    Pedestrians walk past a RadioShack Corp. store in San Francisco. Photographer: David Paul Morris/Bloomberg

    RadioShack Corp. (RSH), the struggling
    electronics retailer, was notified by the New York Stock
    Exchange that it’s out of compliance with requirements because
    its stock has traded below $1 for 30 straight days.

    To read the entire article, go to http://bloom.bg/UsAIM5

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  187. Watch this video at http://bloom.bg/TLLZqE

    Why Ikea, Gap Are Raising Minimum Wages in U.S.

    July 1: Julie Hyman reports on retailers Ikea and Gap raise U.S workers minimum wages.

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  188. Watch this video at http://bloom.bg/1wzUKAK

    Extreme Drought: California Is Running Out of Water

    July 17: A report on the extreme drought affecting 80% of California.

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  189. Watch this video at http://bloom.bg/WxJwlw

    Food Safety Issues Resurface in China

    July 21 (Bloomberg) –- Bloomberg’s David Ingles reports on Yum Brands and McDonald’s halting the purchase of meat products from a Shanghai supplier while authorities investigate allegations that the company sold chicken and beef past their expiration date. He speaks to Rishaad Salamat on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

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  190. From Bloomberg, Jul 25, 2014, 4:20:14 PM


    Jeremy Darroch, 52, will oversee a $9 billion transaction uniting British Sky Broadcasting Group Plc with Sky Italia and Sky Deutschland AG. Photographer: Simon Dawson/Bloomberg

    Rupert Murdoch and his son James
    have spent years cobbling together a pay-TV empire stretching
    from Manchester to Munich to Milan, but the family’s ambition of
    bringing it all under one roof foundered after a 2011 phone-hacking scandal that tarnished the Murdoch name. Today the deal
    was done — with a non-Murdoch at the helm.

    To read the entire article, go to http://bloom.bg/WH5rad

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  191. From Bloomberg, Jul 25, 2014, 4:16:07 PM

    Wind turbines operate beyond a field of rapeseed in Altentreptow, Germany. Germany’s lawmakers last month backed a revision of the country’s clean-energy law to curb green subsidies and slow gains in consumer power prices that are the second-costliest in the European Union. Photographer: Krisztian Bocsi/Bloomberg

    Germany’s push toward renewable
    energy is causing so many drops and surges from wind and solar
    power that the government is paying more utilities than ever to
    help stabilize the country’s electricity grid.

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

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  192. From Bloomberg, Jul 25, 2014, 10:43:58 AM

    Emerging-market exchange-traded funds are officially back in favor.

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

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  193. From Bloomberg, Jul 25, 2014, 12:01:03 AM


    People use desktop computers with high speed Internet connections at the Bronx Library Center. Photographer: Henry Goldman/Bloomberg

    Every evening, when New York’s Bronx Library Center closes at 9 o’clock, a group of young people carrying mobile phones clusters outside its entrance on a busy commercial street. They are there to access the Internet through a wireless signal leaking from inside.

    To read the entire article, go to http://bloom.bg/1rEJMw2

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  194. From Bloomberg, Jul 25, 2014, 12:01:00 AM

    State and local officials in California are struggling to track water use as Governor Jerry Brown calls for a 20 percent drop in consumption to alleviate a record drought.

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

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  195. From Bloomberg, Jul 25, 2014, 12:00:23 AM

    Photographer: Roel Smart/Getty Images

    As the climate warms, the vine that ate the U.S. South is starting to gnaw at parts of the North, too.

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

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  196. From Bloomberg, Jul 25, 2014, 8:55:50 AM


    Bond markets show European Central Bank President Mario Draghi’s July 26, 2012 pledge to do “whatever it takes” to protect the euro was the turning point in the region’s debt crisis. Photographer: Ralph Orlowski/Bloomberg

    Two years since European Central
    Bank President Mario Draghi’s historic promise to defend his
    currency bloc, there are signs bond investors are growing too
    complacent under his protection.

    To read the entire article, go to http://bloom.bg/1zbgJB2

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  197. From Bloomberg, Jul 25, 2014, 8:00:06 AM

    Pedestrians walk past stores on Brandenburger Street in Potsdam, Germany. Photographer: Michele Tantussi/Bloomberg

    With a full-time job, no debt and a big savings account, Claudia Kuekelheim could have afforded a lot more house. Instead, the German office manager and her engineer husband used their credit to get a mortgage with predictable monthly installments they could pay more quickly.

    To read the entire article, go to http://bloom.bg/1reK491

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  198. From Bloomberg, Jul 25, 2014, 12:01:53 PM


    July 25 (Bloomberg) — Rob Wood, an economist at Berenberg Bank, discusses the U.K. economy and Bank of England policy as gross domestic product expanded 0.8 percent between April and June, pushing output 0.2 percent above its previous peak in the first three months of 2008.
    He talks with Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    The U.K. has completely recovered
    the output lost during the financial crisis and is on track to
    be the best-performing Group of Seven economy this year.

    To read the entire article, go to http://bloom.bg/1zbfKB1

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  199. From Bloomberg, Jul 25, 2014, 10:56:28 AM


    Policy makers led by Chairman Elvira Nabiullina are raising the benchmark to restrain inflation and counter market turmoil ignited by tensions with the U.S. and its allies. Photographer: Andrey Rudakov/Bloomberg

    Russia’s central bank unexpectedly increased borrowing costs for a third time this year as the intensifying conflict over Ukraine and the threat of wider sanctions squeeze the economy and undercut the ruble.

    To read the entire article, go to http://bloom.bg/1zbp9Ze

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  200. From Bloomberg, Jul 26, 2014, 5:34:19 AM

    Central banks for Russia to
    Kazakhstan and Mexico increased gold reserves as Germany trimmed
    its holdings, International Monetary Fund data show.

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

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  201. From Bloomberg, Jul 25, 2014, 4:24:40 PM


    As an improving job market will probably prompt consumers to keep replacing older cars, appliances and computers, a sign manufacturers will remain busy and give growth a boost in the second half of the year. Photographer: Daniel Acker/Bloomberg

    Orders for U.S. business equipment rose in June after falling the prior month, forming an inconsistent pattern that indicates corporate investment lacks the momentum needed to propel economic growth to a higher level.

    To read the entire article, go to http://bloom.bg/WH2Vka

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  202. From Bloomberg, Jul 25, 2014, 2:25:14 PM


    President Barack Obama speaks on economy at Los Angeles Trade-Technical College in Los Angeles on July 24, 2014. Photographer: Jewel Samad/AFP via Getty Images

    President Barack Obama is running out of time to fill two empty seats on the Federal Reserve Board of Governors this year, just as U.S. central bankers start to lay plans to exit from record monetary easing.

    To read the entire article, go to http://bloom.bg/UwXF0u

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  203. From Bloomberg, Jul 25, 2014, 11:04:14 AM

    The European Union said it’ll work
    “swiftly” to hit Russian industries with sanctions as support
    grows for the package of trade restrictions outlined this week.

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

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  204. From Bloomberg, Jul 25, 2014, 9:18:27 AM

    While Portugal’s sun, sand and sea have long attracted property investors, the French have now overtaken the British, who used to be the biggest group of foreign home buyers in the country before it sought a bailout in 2011 and real estate prices dropped. Photographer: Mario Proenca/Bloomberg

    (Corrects developer reference in 15th paragraph)

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

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  205. From Bloomberg, Jul 26, 2014, 7:34:35 AM

    Welcome to the weekend. Pour a cup of coffee, settle into your favorite chair, and enjoy our longer-form reads:

    To read the entire article, go to http://bv.ms/1k0BUlT

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  206. From Bloomberg, Jul 25, 2014, 4:24:52 PM


    It’s a tough environment to get these bags off the shelves.

    Wal-Mart Stores Inc. has appointed a new U.S. chief executive officer. It’s an unusual time for a retailer to do a management shake-up, what with back-to-school right around the corner, and Christmas just a few doors further down. But Wal-Mart’s same-store sales growth has been sluggish, and shareholders presumably wanted a change.

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

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  207. From Bloomberg, Jul 26, 2014, 11:03:22 AM

    An unlikely hero? Maybe not.

    The Democrats have little say in the agenda of the Republican-run House, and no dispassionate expert predicts the party will win control in the November elections. More likely is a Republican House majority for at least three or four more elections.

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

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  208. From Bloomberg, Jul 25, 2014, 2:38:32 PM

    This is lava.

    Coincidence or not, ever since “Flash Boys” came out four months ago, alleging that U.S. equity markets are rigged by high-frequency traders and crooked dark-pool operators, there’s been a whole lot of regulatory attention paid to high-frequency traders and crooked dark-pool operators in U.S. equity markets.1 New York Attorney General Eric Schneiderman has been on quite a tear, going especially hard after Barclays’s dark pool. The Securities and Exchange Commission has upped its game, fining Liquidnet $2 million for using dark-pool customer data to pitch issuer business. Even Finra has gotten involved, fining Goldman Sachs $800,000 for messing up the clock on its dark pool.

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

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  209. From Bloomberg, Jul 25, 2014, 12:01:38 PM

    If Apple can do it, why can’t Amazon?

    The $126 million loss Amazon.com Inc. reported for the second quarter of 2014 is no big deal: With more than $80 billion in annual revenue, the company can easily turn that around. What’s irritating is how little it is telling its shareholders about the performance of the investments into which it is putting their money.

    To read the entire article, go to http://bv.ms/1qE75Gt

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  210. America’s Lost Decade: Typical Household Wealth Has Plunged 36% Since 2003
    http://www.zerohedge.com/news/2014-07-26/americas-lost-decade-typical-household-wealth-has-plunged-36-2003



  211. Why A Jury’s Historic $3M Award To A Family Sickened By Fracking May Never Be Paid
    http://thinkprogress.org/climate/2014/07/23/3434385/texas-fracking-verdict/


  212. Palotay – Thanks very much for the writeup, very informational!  I use a product called Trading Diary Pro that helps me keep track of the different types of portfolios and the overall pnl of closed positions too.  After work in the morning I'm going to re-read in even more detail what you wrote.

    I haven't pulled the trigger on the Strangle Port yet from Peter.  I actually requested it, but right now IB uses a margin calculcation on shorting SPX that is very very very conservative, and when I ran risk scenerios using tools they have, if the SPX went down 15% and vol increased a bunch, it would blow out my margin very quickly.

    Ttys. 


  213. Good morning!  

    Just catching up on comments, Monday post is up already so please go there.  

    Bet to win/QC – No, I don't bet on sports except in Vegas for fun with those pick 3 or 5s during football season – just because it's fun when you win.  

    Nice rundown, Palotay, thanks for sharing. 

    PAY/Yodi – It's another company that doesn't actually make any money but carries a hefty ($4Bn) valuation.  IFF they can turn things around and make 10%, THEN there is some basis to the valuation but NCR, for example, has a p/e of 10 with $6Bn in sales and $400M in profits - so it's a rough competitive space.  Also, I'm not sure how you call $35 a "lower ladder" on PAY – their high was $38.26 but their low last year was $15.34 after being at $55 in 2012 and $36 at the start of 2013 – this is a crazy-volatile stock that's very tough to value and leaps up or down 10% regularly – not something I'd want to play unless they were back under $20 (long) or over $50 (short).