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TGIF – Stop the Market, We Want to Get Off!

Wheeeeeeeeeeeeeeeee!  

What fun this is!  Well, it's fun for us because we were playing for this drop and not only did our bearish Short-Term Portfolio pop 10% yesterday but our bullish Long-Term Portfolio crossed over the 20% line for the first time this year.  How is that possible?  Because we are using our "Be the House – Not the Gambler" strategy to SELL premium to suckers who think they know what the market is going to do!

This allows us to make money in any market direction while remaining well-hedged for the downturns. It also allows us to put up these spectacular gains while using less than 50% of our cash – keeping it on the sidelines and ready to deploy when we catch a good bargain on one of our Buy Lists to add to our virtual portfolios.  We had not one but two special Live Trading Webinars yesterday for our Members, where we cashed out the XOM puts I mentioned FOR FREE last Friday for a 300% gain.  

If you want to get our morning posts delivered to you each day, in progress, at 8:30 each day with access to the full posts pre-market – just sign up right here.  

Last Friday I also suggested our SCO (ultra-short oil) longs and that $1,200 position in our Short-Term Portfolio closed yesterday at $3,400 – up a very nice 183% and the SQQQ trade I aslo put up in last Friday's morning post for a net $400 credit (also featured on TV on this Wednesday's Money Show) finished yesterday's session at $1,060 – up $1,400 (350%) in less than a week!   

Another hedge we discussed were the TZA Aug $14 calls which were $1.67 on Wednesday (more FREE picks in the morning post), which was already up 153% from 0.66 when I first mentioned them (outside of our Live Member Chat Room) in our July 8th post.  As of yesterday's close, they were $2.51 – up 50% from Wednesday and up 280% overall.

The 20 calls we picked as a hedge on July 8th for $1,320, jumped to $5,020 yesterday – a very nice $3,700 gain in three weeks.  On Wednesday, we also discussed our larger TZA hedge, which was selling 100 TZA 2016 $12 puts for $3 ($30,000 credit) and buying 100 2016 $13/20 bull call spreads for $1.20 ($12,000) for a net $18,000 credit.  

SPY 5 MINUTEThat one was from our July 3rd Live Member Chat Room when one of our Members, Bshing8 had asked me for a suggestion to replace 9,000 shares of TZA he was holding at a $45,000 loss.  I'm very happy to say (and Bshing is happy too!) that the spread is already up $28,000 and on track for the full $88,000 gain.  

If you read our posts, you know we have been shorting oil since it hit $107.50 back in June and, this morning, it crossed the $97.50 line, which is more than a $10,000 PER CONTRACT gain from our original call.  Of course we've been in and out but on July 18th, again right in the morning post for every level of our subscribers, we reiterated those shorts along with a suggestion for USO Aug $39 puts at $1.44, which finished the day yesterday (better today) at $2.69 – up 87% in two weeks!  

That suggestion had also been made in that Thursday's post at $1.40 with oil at $102.50 (for a $5,000 per contract gain on those Futures shorts (/CL)).  That day's post also carried a winning short trade on YUM that's up 200% now but was closed up 500% before this much bigger sell-off.

8-1-2014 4-24-58 AM nymoSo there are TONS of ways for us to make money in a down market and these are just SOME of the free trade ideas we've given away recently in our morning posts.  In our Live Member Chat Room, we do this sort of thing every day and we keep various virtual portfolios to help teach BALANCE – probably the most important concept any trader should learn.  Balance is what gets us through these little corrections!  wink

As you can see from Dave Fry's McClellan chart, this long-awaited correction has come so hard and fast that we hit oversold conditions already on the short-term indicator.  That's why, yesterday, we began playing for a bounce in the afternoon but, so far, the markets have not been very bouncy.  We have Non-Farm Payrolls at 8:30 and MAYBE they can turn us around into the weekend, but I wouldn't count on it.  

8:30 Update:  Non-Farm Payrolls came in at 209,000 missing estimates of 233,000 and far enough down from last report's 298,000 that unemployment has ticked up (to 6.2%) for the first time in 3 years.  Average hourly earnings are up a penny from last month ($24.25) and up 2% since last year while the average workweek remains flat at 34.5 hours.  That's $836.62 a week for the "average" worker or $43,504 per year but, of course, that includes CEOs who make $10,000 an hour.

There's nothing particularly alarming here but nothing great either.  It's just been so long since we had real job growth (cough, CLINTON!, cough, cough) that we've forgotten what a HEALTHY economy looks like – so we celebrate this mediocrity as if it's some sort of gold-medal performance (which, compared to Bush II, it certainly is).  

So, nothing here to make us give up our shorts into the weekend.  In fact, I think we may ad a hedge or two in Member Chat – just in case!

Have a great weekend, 

- Phil

 


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  1. Good morning! 

    Futures are going to be very dangerous into NFP but, as noted by the oversold short-term conditions, it won't take much to give us a relief pop.  Ahead of NFP, I do like playing /YM bullish over 16,400 as long as /ES stays over 1,912.50 (one point over now) and /TF is 1,113 so also we missed the 1,110 entry so Dow is best bet as laggard but others must hold (1,112.50 for /TF too) – otherwise, back to watching and waiting.  

    Oil barely struggling back to $97.50 now.  I'm starting to feel bad for it….

    Gold hanging on to that 1,285 line by a finger, silver $20.36 indicates gold probably oversold.  Copper $3.21 still beats the old $3.05ish and Nat Gas $3.80 and Gasoline sad at $2.79 is also very sad (but good for consumers).  

    Yen testing $103 but /NKD still 15,480.  Dollar still pinned at 81.50. 







  2. Phil – The Fed called this morning and I spoke with someone who identified herself as Ms. Yellen. She indicated it was my turn to save the market (apparently the selection process is akin to jury duty). 

    It sounds to me like they are now getting desperate …


  3. Real TSLA charts not so good!  

    LOL Diamond – someone has to do it…


  4. Nice little $100 pop in the Dow (/YM) before stopping out.  No play now into NFP.  If you are looking to jump in on the NFP results, /NKD can often be used as a laggard, as it tends to drag behind the Dow.  


  5. Republicans deliver another self-inflicted wound via

    Wall Street tactic to avoid oversight of $700 trillion derivatives market faces new scrutiny:

    PHILLY FED'S PLOSSER: Here's why I dissented

    What to watch for in today's jobs report: Who's hiring? Are wages growing? Who's looking for work?

    consensus is for to hit 230,000, but whisper is 270,000 . RT : Hearing something about a number in 20 mins,

    This is what incompetence looks like: John Boehner keeps reliving the same failure, over and over

    Resistance to malaria drug becoming widespread in Southeast Asia


  6. NFP below expectations at 209,000 vs 230,000 expected.  That's bullish as it's more likely Fed holds off on tightening.  Unemployment ticked up to 6.2%.  

    The Futures popped but not much – certainly not something to chase but, as expected, /NKD 15,500 is the way to go bullish as long as they hold that line and Dow (/YM) over 16,450 and /ES over 1,922.50 and /TF over 1,117.50 – all good at the moment.   Dow can be played over the line too. 


  7. Woops, already failing!  Fortunately, Dow and Nikkei still over but NO PLAY if the others can't give us bullish signals.  What a shame if we can't even bounce today.  


  8. And NOW we are getting good signals again.  Good for a quick ride, in the very least. 


  9. RUT just hit 1,120 and rejected, /YM 16,500 and rejected, /NKD 15,540 – don't be a hero, take the profits and get back in on the next cross.  


    • July Nonfarm Payrolls: +209K vs. consensus +233K, +298K previous (revised from 288K).
    • Unemployment rate: 6.2% vs. 6.1% consensus, 6.1% previous.
    • The uptick in unemployment in July came as the labor force participation rate edged up to 62.9% from 62.8%. It was 63.4% a year ago. The employment-to-population ratio of 59%  was flat from June, and up from 58.7% a year ago.
    • The average workweek remained flat for the fifth straight month at 34.5 hours. Average hourly earnings edged higher by a penny to $24.25 – they're up 2% from a year ago.
    • May's 224K jobs gain was revised higher by 5K jobs and June's 288K was bumped higher by 10K for total upward revisions of 15K.
    • The broader U-6 unemployment rate rose to 12.2% from 12.1% – a year ago it stood at 13.9%.
    • The 10-year Treasury yield slips to 2.53% from 2.59% ahead of the report.
    • Previously: July job gain below estimates
    • Full report

  10. 5 minute chart on spu is almost parabolic should pullback but technicals are very bullish for a bounce today imho


  11. I didn't remember, but it's the first time jobs have been above 200K for 6 months since the late 90's. Not great numbers but historically not that bad I guess.


  12. Russell seems to be bouncing more than the other indices!


  13. Oil Lines

    R3 – 101.63
    R2 – 100.74
    R1 – 99.38
    PP – 98.49
    S1 – 97.13
    S2 – 96.24
    S3 – 94.88


  14. I know this is a bit much but in light of yesterday's discussion with Yodi, I thought it was interesting and worth putting up. I am done after this and will go back to focusing on how to not lose money in this market.

    Today, a friend of mine who I really like and respect, posted a ferocious attack on Israel, accusing it of cold-blooded murder and Nazi-like barbarism. It broke my heart. It was deeply saddening to me that good, thoughtful people are being swayed and convinced by those who are out to demonize and destroy the country that I know to be so different from the way it is being portrayed. How is this happening, I am forced to wonder- and I know many are wondering the same thing – how is it that the truth is being so perverted and inverted; how is it that what seems so clearly and obviously to be a defensive battle for survival against a ruthless and lawless aggressor is being bastardized as a genocidal offensive against a defenseless victim?

    What is clear to me is that my friend and many others like him are not anti-semitic and not to blame. They are reacting to what they are fed by a media that is perpetrating what I would consider to be a "war-crime" by mischaracterizing, misrepresenting, and simply missing the facts of this war. Why? Is this media malicious or just misinformed and gullible? I'm certain there are those on both side of that equation. And I believe that a large part of the issue is a "Might makes Wrong" mentality that reflexively accounts blame to the stronger force and takes up for the underdog, even when this underdog has far less scruples and morality than any canine I have ever encountered.

    At any rate, I felt the need to respond to my friend, to try to engage him in dialogue to hopefully open his mind to the fact that there is a very different version of the story he is being told. My response, in the event that you are experiencing similar interactions with your friends:

     

     

     

    Dear —. I truly admire you for taking a firm stance on what you believe, but I simply ask you to consider whether your beliefs are based on truths or on a very politicized and propagandized version of the truth.

    I certainly do agree that the loss of civilian life is a tragedy regardless of whose civilians. And I agree that targeting civilians is reprehensible. Where we seem to disagree is on the question of who is actually doing so. It is absolutely certain that Hamas is targeting civilians. Their charter calls for the murder of all Jews and the destruction of the entire state of Israel. It is also clear that the IDF is killing civilians – but it is not the case that the IDF is TARGETING civilians. The fact, which has been admitted by Hamas themselves, is that Palestinian civilians are being utilized against their will as human shields by Hamas. Israel therefore finds itself in a no win scenario where in order to combat Hamas, they are forced to incur significant collateral damage, which is certainly no win for Israel (as you have rightly pointed out), but is a sick and twisted win for Hamas because it enfeebles Israel in the war of public opinion.

    This is precisely what Hamas is trying to accomplish. They have made it clear that they are telling the Palestinian civilians to stay put in spite of Israel's warnings – what they are not admitting is that they are beating Palestinians who attempt to flee, and they are murdering Palestinians who are revolting against this sick betrayal of their own people. Yes, it is horrible to fire at a school, but what choice do you have if you are being fired on from that school, if there are terror tunnels leading from that school to your schools and homes and the only way to protect your people is to eliminate the threat once and for all.

    Thousands of missiles have been fired at Israel over the past several years, and Israel has only engaged in the targeted strikes that you advocate. Meantime, Hamas has continued to build their arsenals and dig hundreds of miles of tunnels that burrow into Israeli civilian land. One can only show restraint for so long before he determines that this growing threat must be dismantled. Unfortunately – no tragically – the only way to do that is to fight and destroy Hamas through the human shields that they cowardly hide behind. As Golda Meir said, we can forgive the Palestinians for killing our children, but we cannot forgive them for making us kill their children.

    As for your question of why Israel is unwilling to share the land with anyone who is not Jewish, this is an example of one of the areas where I believe you are misled. The fact is that roughly 21% of Israel's citizens are Arab. Not only that, I don't know the exact number today, but in 2011, 13 of the 120 members of the Israeli Parliament were Arab. Israeli Arabs enjoy more democratic freedoms than any other Middle East country. So the fact is that Israelis are fully willing to coexist in the land with their Arab neighbors. The issue is not one of religion or birthright, it is one of security. While there are certainly those Palestinians who are willing to live peaceably with Jews, Hamas and others in power refuse to recognize the existence of Israel or the right of Jews to live anywhere on the land, so walls and checkpoints become necessary in order to protect one's citizens, not to keep out those who would be willing to coexist.

    Anyone who tells you that Israel is an imperialistic power that refuses to share the land is ignorant of the facts – if that were the case, why did Israel return the Sinai Peninsula to Egypt, and why did Israel evacuate Gaza in 2005? The answer is because Israel simply wants to live in peace! The "Occupied territories" are land masses that Israel took control of in 1967 in a DEFENSIVE war. With no interest in occupying another people (it certainly does no good for public opinion, nor is it easy to manage such a losing situation), Israel has maintained control of these territories as a strategic imperative in order to keep terrorists away from its population centers. Gaza is the proof for this – as soon as Israel evacuated, Hamas positioned missiles on this precarious border which were suddenly able to reach all of Israel's heaviest population centers.

    There's far more to say here, but the important point is to suggest to you that a) Israel is not the bloodthirsty, genocidal maniac that you have been led to believe, but rather a tiny but powerful country that is desperately trying to protect its citizenry, b) that war is horrible and there is no way to fight it in a pretty way, particularly when your enemy refuses to abide by any internationally recognized conventions, and c) that the outlets that you rely on (like the BBC and The Guardian) are certainly not objective players and have long been accused of an anti-Israel bias (as has the UN for that matter).

    As for why the US is not doing more to "stand up" against Israel, I would suggest to you that it is because the vast majority of those in congress agree that Israel is justified in its actions. As far as I am concerned, it is horrific to have to be "justified" in killing civilians and children. I am praying that there will be no more killing and no more violence. As it has been said for a long time now, if the Palestainians would put down their weapons there would be peace; if the Israelis put down their weapons there would be no Israel.


  15. Still more economic numbers coming – ISM, PMI and U. of Michigan. Could make for an interesting morning.


  16. Keep in mind that anything less than a 0.5% gain today is failing a weak bounce.  


  17. If we dip down today significantly, you might want to make some bullish bets.  McClellan Oscillator was -275 and Dow RSI is 32.  Both would be in extreme oversold territory if we went down pretty big today.


  18. Another war breaks out:

    South-korean-balloons

    In South Korea, about 200 people — South Koreans along with North Korean defectors — packed 770 pounds of Choco Pies into plastic bags, which they attached to 50 giant balloons and released into North Korea from a park in the border city of Paju, according to organizers of the event. It was an act of rebellion against the alleged North Korean ban on the chocolate confections.

    The pies, which are produced in South Korea, are wildly popular in North Korea. Fearful that the treats would encourage an uprising, Kim Jong-un reportedly banned Choco Pies from the country earlier this month. The pies, which have become something of a political statement, are viewed as a symbol of capitalism and represent a taste of the world outside North Korea.


  19. Longer-term Summation Index still a far cry from oversold:

    8-1-2014 4-21-17 AM NYSI


  20. Choco-pies/Phil – Hilarious in a sad sort of way. When the joint manufacturing town of Kaesung was still open, the northern workers would often take their pay in choco-pies, which they would then go home and sell at huge prices. Don't know whether any actually got eaten – sort of like the fiat currency of cigarettes in prisons. For those who don't know, choco-pies are a smaller version of the southern US moon pie.


  21. Snow – Moon pies and RC Cola ! ! !


  22. albo – :-)


  23. Phil / BIDU – Should we be rolling our Sep BIDU 220 puts lower?


  24. Anyone else notice the weird spread on the IMAX march 28 calls? bid 1.20 ask 4.10 seems like a large spread no? 


  25. ah, MXWL in the tank, looks like I'm going to own it :)


  26. HE'S BACK ! ! !

    Equity markets will see a decline at some point after rising for the past several years, former Federal Reserve chairman Alan Greenspan said in an interview on Bloomberg TV.

    "The stock market has recovered so sharply for so long, you have to assume somewhere along the line we will get a significant correction," Greenspan said on Wednesday.


  27. go go SGEN


  28. Choco pies/Snow – It's funny the kind of things that still go on in the "civilized" world.   Little do the North Koreans realize that all they have to do is head to any US college dorm on a Friday or Saturday after midnight and they could get $2 or $3 each for them!  

    As evidenced by Albo's reaction…  

    BIDU/Pfehl – Gosh, it's only been 3 days!  That was:

    BIDU/Abhish – I gave some fantastic reasons – take my word for it, but the trade idea for the STP is going to be 4 March $220/185 bear put spreads at $13.20 ($5,280), selling 3 Sept $220 puts at $8.10 ($2,430) for net $2,850 on $18,000 worth of spreads.  We just have to have faith in the rolling process.  

    BIDU is at $215.63 but DURING a major market pullback – I'd hardly consider that weak.  The Sept $220 puts are now $12 but they can be rolled to the Oct $210s at $10 for net $2 or the Dec $200s at $11 for net $1 and they are still 2/3 premium at $12 and our spread gives us $35 of downside protection PLUS the 1 uncovered spread for a bonus $35 ($11.50 each).  Once again – we just have to have faith in the rolling process but – if you feel nervous – buy one back and you are tilting the trade 33% more bearish.  

    IMAX/Craigs – Very thinly traded, we're the only people who like to go out for strategic option positions.  

    MXWL/Pwright – I bet you wish they made tapes now!  cheeky

    Greenspan/Albo – He said that a couple of days ago on Bloomberg too.  

    Auto sales coming in pretty good for July.  

    What a month for GPRO:

    At the open

    • Dow -0.21% to 16,527.73. S&P -0.25% to 1,925.90. Nasdaq -0.05% to 4,367.48.
    • Treasurys: 30-year +0.14%. 10-yr +0.3%. 5-yr +0.29%.
    • Commodities: Crude -0.72% to $97.46. Gold +1.01% to $1,295.70.
    • Currencies: Euro +0.23% vs. dollar. Yen -0.12%. Pound +0.27%.

    Consumer Sentiment 81.8 vs 81.5 expected.

    ISM 57.1, June was 55.3 so a good uptick.  

    Construction Spending -1.8 – not good.  

    Global PMI at 11 but that's just the average of what we know will be bullish.


  29. Manufacturing PMI at 55.8, lower than expected. Conflicting numbers again. 


  30. Wow look at /TF drop……Falling very sharp knife…or a cautious long…Phil your thoughts


  31. Hedges/Phil:  

    I need to pick up some more hedges.  With VIX down a little figured it's a good time

    What do you think of TZA Oct 16/20 Bull Call at 1.15?

    Or the SQQQ 40/50 Bull Call at 2.55?

    Thanks.


  32. The SQQQ would be in December.


  33. One has to wonder about these wholesale sell-offs which are akin to blood-letting to 'relieve the pressure.'  I posit that it is unnecessary and barbaric. We definitely have room for improvement with our markets.


  34. Jbur – MCO says we're short term oversold..

    http://etfdigest.com/davesdaily


  35. Phil- that was great idea on BIDU i covered my short yesterday at 216 something. Thanks for that, as i have learned from you not to let profits get away. 


  36. /TF/Jasu – 1,110 SHOULD be bouncy but indexes are scary weak at the moment.  I'm for just watching. 

    As a new hedge, I still like SQQQ, which is "only" up to $41.40 and the Dec $43/50 bull call spread is $1.55 and that pays $7 so 350% as a standalone and you can sell against them: 

    • ABX ($18.23) 2016 $17 puts for $2.05
    • CCJ ($20.00) 2016 $17 puts for $1.60
    • CLF ($17.45) 2016 $13 puts for $2.40
    • HOV ($3.95) 2016 $4 puts for .90
    • IRBT ($32.21) March $25 puts for $1.80
    • KBH ($16.33) 2016 $13 puts for $1.20 
    • PFE ($29.01) 2016 $25 puts for $1.45
    • PNW ($54.40) Jan $60 puts for $7.95 
    • TEX ($34.35) 2016 $28 puts for $3.10
    • TASR ($11.60) 2016 $10 puts for $1.20
    • RIG ($40.30) 2016 $33 puts for $3
    • WFM ($38.12) 2016 $33 puts for $2.50
    • WEN ($8.11) 2016 $7 puts for .80

    These are all on the Buy List – so down't act surprised!  Let's put 40 of the SQQQ spreads for $6,200 in the STP and sell 20 WEN 2016 $7 puts for ($1,600) and sell 10 WFM 2016 $33 puts for $2,500 and 10 RIG 2016 $33 puts for $3,000 – those go in the LTP!  


  37. Phil you mentioned in the morning post that you were leaning towards adding a couple of new hedges into the weekend, any further thoughts on that? I have taken a bit of a beating, mostly because my hedges have been somewhat weak (especially because of my rookie mistake of not noticing that my SQQQ bcs was entered backward. I managed to fix it early on yesterday, but not before I had lost a few hundred. Lesson to all, if you edit your spread price make sure the system you are using hasn't changed the buy/sell info! ) since I'm not really a rookie any more, although it has been less than a year, I am pretty upset about that one. Also have learned that VIX is a pretty weak hedge. 


  38. Never mind since you posted it as I was writing about my stupidity.


  39. MSFT and more:  nice way to further antagonize the world and every person in it against US govt, and shove individuals, companies and wealth -offshore.-  no one, anywhere, is going to voluntarily want to have anything to do with the US, or US companies, if this control-mania keeps up.

    http://www.zdnet.com/microsoft-ordered-to-hand-over-overseas-email-throwing-eu-privacy-rights-in-the-fire-7000032210/?s_cid=e539&ttag=e539&ftag=TRE17cfd61


  40. Hedges/Jbur – Why pick the index that has fallen the most so far?   Look at the YTD Returns chart above – the Nas is still up 8% while the RUT is down 3.6% so, by chasing the Russell, you are handicapping yourself 10%.  For SQQQ, see above.  

    Definitely/Scott – Which 6 Dow components should be 20% higher than they are now?  If you can't quickly pick 6 that are easy to justify (20%), then the Bell Curve suggests the group isn't good for more than 10% more gains.  If you can't justify 10% for 6, then 5% max, etc.   Looking them over – I'd say we're VERY toppy here. 

    Glad to here it Abhish – those are the kind of habits you want to cultivate.  

    VIX/Craigs – It's a terrible hedge, that's why I never play it.  As to other hedges, see above – I'm still liking SQQQ as the "fresh horse" play.  

    MSFT/Scott – We need a sort of Geneva Convention regarding international privacy rights.

    Wow, Dollar diving to 81.27 and it's not helping at all.  That's the only thing holding the markets up (and gold up $12 but oil still under $97.50 indicates people can't bail fast enough – still about the same 770M fake orders they are stuck with for the front months:

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Sep'14 97.70 98.10 97.09 97.47 10:42
    Aug 01


    -

    -0.70 118989 98.17 290523 Call Put
    Oct'14 96.84 97.25 96.17 96.53 10:42
    Aug 01


    -

    -0.79 41420 97.32 184050 Call Put
    Nov'14 96.24 96.67 95.56 95.87 10:42
    Aug 01


    -

    -0.86 19544 96.73 82564 Call Put
    Dec'14 95.70 96.15 95.00 95.33 10:42
    Aug 01


    -

    -0.88 30507 96.21 209670 Call Put

    Keep in mind that most of these guys rolled into Sept from Aug at about $103.50.  Multiply that $5 loss by 290M barrels and someone has a $1.45Bn headache!  


  41. Phil/Hedges

    Along the lines of your response to Jbur, If we have TZA's already on as a hedge (I have Oct 14/18 call spread and sold the 14 puts that you outlined a few weeks ago) would it be appropriate to cash them out and move to SQQQ, or simply add SQQQ as you detailed above?  I'm just thinking, if the RUT has already made a significant move and our "older" hedge has worked, move on to a fresh horse?


  42. GPRO

    It seems to me that there could be a real art to trading these IPO’s. I‘m not sure anyone really knows what they will do. Today’s example; MBLY. Does that rise mean the investment banks did not realize full value for the issuing company?


  43. Scottmi;  thanks for posting MCO link.

    Was it you that posted the link for Au4 music a few weeks back?  If so, thanks, and you would probably like:

    https://www.youtube.com/watch?v=V4Iow4cWvP0


  44. The market is tanking, tanking…


  45. SQQQ/Phil: Got it, thx.


  46. Phil / Hedges
    I like the balancing SQQQ with the short puts. What do you recommend for non-taxable accounts ( iRAs ) 


  47. SQQQ – Any thoughts on using a put spread on TQQQ instead of a call spread on SQQQ?  The implied vol on puts is usually higher and ratchets up faster on a correction.  I used bought puts on SSO has my hedge for this most recent sell off and has worked like a charm.


  48. Jbur – you're welcome. yes Au4 was me and thanks for Ott link.  

    Phil – do I see anyone in the dow that *should* be 20% higher? No, sir, I do not.


  49. Brk. reports tonight…hmmmm.


  50. scottmi re: TSLA, my 1 butterfly is not performing, how could you do such a thing :)

    Here's some more spacey music from Canada, see if you like it:

    http://shop.silentseason.com/album/pacifica-sscd13


  51. HLF is up?


  52. TSLA/pwright – yeah, no CMG burrito for me today. Has Musk lost his mojo?


  53. Wow, AXP just blew the 200 big time!


  54. Aleph considers neglected companies/sectors as defensive opportunity:

    http://alephblog.com/2014/08/01/a-different-look-at-neglect/


  55. It must be time listening to 5%. Don't ever forget the 2.5, 7.5, and 10% variations not to forget 1.25%. The RUT is way out first and furthest but I see not only the rest lagging but lots on those turn points. The money powers are ready to rape you and we may just turn back up. Not saying buy buy buy, just too much noise over one good drop.


  56. TZA/Jeff – Yes, get to a fresh horse.  Oct $14/18 is $1.80 out of $4 so not fully cooked by any means with TZA at $16.95 and the short $14 puts are .50 so it's certainly keepable – especially if it's a hedge and you HOPE your longs will come back.  

    For example, our LTP dropped to 17.7% today, giving up $13,000 since last night but the STP just popped 30%, gaining $14,000 since last night so well-balanced for the moment but already I can see us skewing not bearish enough (as the STP was gaining 2x to LTP losses yesterday), which is why I wanted to add the SQQQ to give us more protection earlier.  

    In this case, I have no desire to take our Oct DXD $25s (50) off the table but we will take off the STP TZA Aug $14 calls (20) at $3 because we don't have time to recover if we bounce next week.  Now that we've added an SQQQ hedge as well, I'm more inclined to stop out DXD if the Dow looks like it may recover.   See – always adjusting our balance!

    As a bet, for sure take quick money.  If we fall further, the Qs are likely to catch up.  

    MBLY/Randers – The banks try to price 20% under so the stock looks hot but they don't leave too much on the table.  Sometimes they don't get the demand right but, generally, they are right about the value so moves of 50% or more are great to short – if you have nerves of steel (and if you can find shares to borrow).  With no options to play with – I just stay way.  

    Tanking/Pirate – Just the normal follow-through off yesterday's selling, nothing too tragic – yet.  

    SQQQ/Wombat – In an IRA, if you want to sell short puts, I think you simply want the ones that give you the best bang for your buck since they'll whack you for margin.  Or, of course, just don't sell the puts and try to be happy with just the 350% upside on the spread.  

    Keep in mind, if you have $1M in an IRA and a 20% market correction will cost you $200,000 then, in order to get back $100,000 of it you need 200 of the spreads for $31,000 and they pay $140,000 at SQQQ $50.  So, you sacrifice $31,000 of your upside on $1M to have a 50% hedge on $1M losing 20%.  

    As long as your $1M in positions is going to MAKE $31,000 between now and Dec in a flat or up market – you are in good shape.  If not – then why not go to cash and get bonds – at least they WILL pay $35,000 on $1M!  

    The BIGGEST advantage you have in an IRA is the ability to go to cash without tax consequences.  So, when you are unsure about the market and worried about a pullback – JUST CASH OUT!!!

    TQQQ/JJ – Those work just as well and I do like TNA puts sometimes or FAS puts but, frankly, in the portfolios I prefer to have linear positions so I can remember what I want everything to do at a quick glance.  I've learned from experience that it's not worth the effort to flip-flop my brain on some positions.  

    Dow/Scott – Well, then there's the answer.  

    HLF/Pirate – Really, this is considered up?  

    I mean, sure, it's up 1.2% for the day but it's not UP.  If that were a pulse, they'd still be dead.  You guys have GOT to stop looking at intraday charts and thinking they in any possible way can form a trend.  I wouldn't tough this stock in either direction though – just too many people willing to blast in and out of it on a single tweet. 

    TSLA/Scott – See real earnings above – not impressive at all.  As to Aleph, there will be a lot more neglect if this market keeps going down next week.  

    Drop/Shadow – I don't know, the retailers are "shocked" that the market can go down.  Everyone is expecting someone to save them next week – what if no one does? 


  57. Immense cash moving into bonds. Look at the /ZB  +0'28 and /ZN  +0'23 on huge volume.

    Look out below!


  58. seems like a decnt short term bottom is shaping up in the indices nq is trading 3854 to sept


  59. ISDA officially labels Argentina a "Credit Event" – that's why we're legging lower.  


  60. Phil what does labeling Argentina a credit event mean to the markets after today?


  61. Phil

    Not predicting. The powers will send the market higher or lower depending on which is in their best interest. I more than most thought we will burst and July 31 is about as strange as it gets and that is the point I can't forget. Was it to burn funds that were selling or are they finally all cash? There is always a reason.


  62. Not surprised but I expected down to 50-just up a little on a down day tells me someone is buying. I have TNA 8x 72.5 call down about 2k-did I miss a roll?



  63. craigsa620

    Just came back from one of my outings and read your comments on Israel indeed do not wish to labor the subject but the media in the US is very much pro Israel and here I feel they presenting a more down to earth picture. Your thousands of rockets what a joke they can not even shoot straight. It is like shooting at an elephant with a BeBe gun. I still see it that the Palestine is emprisoned , while taking their land and building walls around them and building on their land. Looks a bit like the German wall to me.In deed it sounds a bit like Cramer and Fox news to me from the US point of view!!!!


  64. VIX futures Aug / Sept have just flipped from contango to backwardation.


  65. JMHO

    Berlin Wall = To keep people in.

    Israeli walls = To keep terrorists out.


  66. All I have to say on Gaza is I am team Orlando Bloom


  67. yodi

    The US can never condemn Israel after killing so many. The US should stop thinking they know best and make the first move stop spying. People talk bad  and usually do nothing. Stop looking for trouble and fear mongering. Israel might follow, they could with more risk block by block search and find all the bad guys and bad stuff, if someone fires at you he is your enemy not collateral damage.


  68. Please stop the political back and forth during the trading day. It used to be a soft rule here.


  69. ISDA is the International Swaps and Derivatives Association, by labeling it a credit event, they trigger the "default" on default swaps – this could be like opening Pandora's box (because CDS's are hard to quantify and highly leveraged) or it may be a non-event.   Expect a lot of rumors flying around next week as people scramble to clean up their books.  

    Reason/Shadow – We've had very clear evidence that the smart money was cashing out for ages and we wisely joined them.  Now we're getting into the end game, where they can't keep the markets propped up any longer by just buying some Futures contracts or making low-volume up moves.  

    The problem is the same as it usually is – no patience among the players.  Everyone is looking for a bottom or a bounce in day two of a correction.  The rally has gone on (this leg) for 6 weeks, since Mid-May without more than two down days in a row and 80% up days but this is exactly what "THEY" want – traders who are so conditioned to buy the dips that they will jump in on anything at this point for fear of missing a move up.  

     Gaza/Yodi – Well, I so don't want to get into this but it's the Euro Media that classifies the US media as pro-Israel – that's not the case at all.  They are being ripped to shreds over here.  Also, what difference is it if a rocket doesn't shoot straight when it's being shot into your neighborhood?  Do you think Gaza cares WHO they kill when they fire rockets from schools and hospitals into Israel?  The walls were built AFTER it became necessary to check people for bombs because busloads of people in Israel were being blown up on a daily basis by "visitors".  That was going on long before the US and Europe finally decided terrorism was an actual problem. 

    Over 10,000 killed and injured since 9/11 in Israel and you think they are overreacting?  The US lost 4,000 in a single terror attack and went to an all-out war against two countries, spending Trillions and holding public executions of the opposing leaders.  What would Germany do, sit back and let their own children be killed?  How completely ridiculous that attitude is?  Any other country would have marched an army in and turned Gaza into a police state – like the US did with Iraq and like the UK did in Ireland and like half the Middle East does with the other half.  

    It is ONLY because of the incredible RESTRAINT shown by Israel that people have time to cast dispersions on them for doing what little they do to protect themselves.  That's why you have hard-liners in Israel who are sick of this BS and what to just wipe them all out.  That would be wrong too but "turning the other cheek" is apparently not working too well either.  

    They dug f'ing tunnels into Israel Yodi?  Who does that?  I guess the "real" newspapers you read categorize them as "tourist expressways"?

    And what Burrben said! 


  70. Trading/Burr – Not much of a day for trading, actually.  

    Let's see, we have 16,392 on /YM, 1,913 on /ES, 3,857 on /NQ and 1,106 on /YM so we're too low to go short and below levels (16,400, 1,915, 3,860 and 1,110) that we'd want to poke long in the Futures and, even if we do get a rally in the last few hours – it's very unlikely to be a real one.  

    Oil still $97.48 and even over $97.50 that's just a disaster and not much fun as a long (though I think I'd take a poke with very tight stops) and gold is $1,296 with the Dollar at 81.35.  

    So, overall, nothing has happened since the open and nothing is likely to happen into the close – let's talk politics!  


  71. Wheres Harold Stassen when you need him!


  72. YOU failed to mention that we went to war with the two countries on totally fallacious lies of WMD'S in Iraq when the bombers of the trade center were Saudis who GW was kissing within two days of the bombing! What ever happened to believe only 10% of what you hear because the REAL story is in the 90% your NOT hearing.


  73. I'm wondering if it is a good idea to sell some calls against my large $14/21 2015 TZA position. Maybe sell the September $18's for $1.21 each, and start with a quarter of the contracts.  This is still my main hedge, but I also have a decent sized position in the SQQQ.  Bad idea?  Too soon to think about this?  


  74. Are we sitting on the TNA trade?


  75. guys – i'm having a brain fart
    max gain is < spread value > * < spread > * < 100 > * < # contracts > 

    yes?


  76. (Spread – spread value) x 100 x # of contracts


  77. Did a small short on BRK.B. With the rough winter maybe the train runs hurt the bottom line & people laying off the soft drinks & not buying insurance.


  78. Stassen/Angel – LOL, you must be older than you look!  

    Fallacious/Pirate – One battle at a time, please.  People who still think that war was justified are NEVER going to change their minds.  

    TZA/Palotay – I wouldn't because the risk of getting burned is still there.  The $14/21 bull call spread is about $2 with $5 more to gain (250%) so it's still a good hedge and I don't disagree with the logic of selling calls, especially for that kind of premium, but if the RUT drops 10% more, TZA goes up 30% to $22.10 and you owe $4 back to the short callers.  If you want to knock of net .30 per long (on a 1/4 sales) – why not find a nice, short put on a stock you'd like to buy if it drops 20% instead?   Or, you could just cash 1/10th of the $14s for $4 and leave 10% of the short $21s naked – you could put a stop on them at $4 (now $2) so worst case is you end up even on that 10% while the rest makes gains and, otherwise, you have collected 0.40 per long.  

    TNA/Pirate – No because the RUT failed to hold 1,150.  

    Gains/Wombat – Hard to say yes when I can't be sure what your symbols mean but max gain on a spread is the dollar value of the spread less what you paid for it times the number of contracts (times 100, if you need to go to that level).  

    And what Palotay said.  

    BRK.B/Pirate – I hope they sell off so we can BUYBUYBUY! 


  79. Phil other BS

    Consumer Reports headline, "America's Scary Pain Pill Habit" meds skyrocketing and so are over doses. Can the FDA protect us?

    The facts are actually this between1999 and 2011 prescriptions rose 300%, deaths rose 4%.

    The FDA can't do anything but law enforcement could by arresting the doctor drug dealers. They won't do a thing because the drug companies make lots of money, law enforcement expands to arrest the final users, considered some of the only well paying jobs with generous benefits. 300% increase in prescriptions is ridiculous but only 4% more deaths say even more, why not 300% more deaths. No mention of most everyone dying is on large doses and some of those deaths are blamed on dug levels. Any way you put it the death rate has barely moved. If the headlines have to be deaths from prescription drugs could we please go after the scrip writers? In the meantime people in real pain suffer by not knowing who the crocked docs are.

    This is but another example of the ridiculous war on drugs that refuses to actually do the right thing because there is too much money involved on the side of we are doing the right thing.


  80. thanks pal / phil
    we're all saying the same thing – thanks


  81. dax breaking 200 day convincingly on volume


  82. Phil / Yodi /war:

    Hammas people is a bunch of killers erevyone knows that, what is strange is that Israel has not decided to invade Gaza ( as U.S with Iraq) and control the living souls there for a generation.  

    The solution in Gaza in particular is more trying to conquest the hearts of palestinians instead of creating new Hamas members with each new attack….but that is not in the interest of Israel government

    Palestinians are to arab world just what gypsies are to Europeans, they don´t integrate, are ignorant, reproduce in a irresponsible way and are unable to organize in a modern society, but firing bombs on them is not what a democracy does….problem is that  Israel is now a theocracy more than a democracy.

    Be back to futures…..


  83. indexes and many positions all bouncing/sitting on/around my preset alerts. suggests to me that 'they' are really working the inflection points…


  84. Phil question;

    EXXI  is a company that a good friend in the oil exploration is recommending me it seems that a long  or a LEAP  could make sense , do you have perhaps opinion or knowledge of it?.

     

    Thanks.


  85. Thanks Phil.  That makes a lot of sense, I went ahead and sold 10% of the longs.  Any thoughts on BA?  The 2016 $100 puts at $6.20 are looking really juicy.


  86. OMG I NEED AN ALLEVE

    CAN WE ONLY DISCUSS POLITICS IN A RAP MEDIUM…JUST TRYING TO WORK AROUND NETANYAHU AND  Abdel Salam Ahmed Haniyeh IS GOING TO SNAIL CRAWL THE WHOLE MEGGILLAH..


  87. palotay / BA
    Stop looking at my screen !!


  88. SQQQ/Phil

    Dec. $43/$50 spread is now $1.95. Bid in at $1.55. Should I adjust or wait? Thank You.


  89. hex / SQQQ
    I took it at 1.90 this morning – I don't think its comin down >>>



  90. Note to Self: Next time, no Middle East.


  91. Drugs/Shadow – A very complicated issue.  So many special interests, including the patients (and addicts) who want the medication. 

    You're welcome Wombat.  

    EXXI/Advill – I don't know a thing about them but I'd be happy to take a look if you remind me over the weekend.  

    You're welcome Palotay.  BA has to be cheaper than this for me to like them.   They are always just one bad day away from a 20%+ correction. 

    SQQQ/STP, Hex – I tend to offer for each leg, you rarely get a good price on a spread offer – especially when a lot of people plow into a trade who are – what's the polite word? – "impatient".  cool  The Dec $43s are climbing bu have traded from $4.25 to $4.76 since 11 and the $50s went from $2.50 to $2.85 so the spread has grown from $1.75 to $2 in the last 3 hours.  Given the current prices, I'd offer $4.50 for the $43s and ask for $2.90 for the $50s (a $1.60 spread) and see which one fills first.  Once you have a fill on one side at a good price, then you can decide what you are willing to accept on the other.  On the other hand, some of the puts are now paying more money to balance things out.  


  92. Long-Term Portfolio Update (LTP):  Down $10,500 (2.1%) from last week is not too bad and nothing to worry about since most of our losses are more the result of a rising VIX increasing the PRICE (but not the value) of the premium we have sold.   Since we are in for the long haul and since our positions are generally 1/4 or 1/2 allocations, we're in no hurry to make any changes and, of course – we are well-protected by the STP.  

    That's the purpose of the STP, it means we don't have to panic out of perfectly good long-term positions just because the market decides to take a little dip.  There are tax advantages to that as well as the bulk of our positions, if left alone to mature, can end up being long-term capital gains with a lower tax rate.  

    No changes this week – we'll see how next week looks.  


  93. Phil complicated, that is why I call for stopping the war on drugs, no side will ever win, but money will be made by the least deserving and that is why it continues.


  94. Security

    Somehow tracking of location was turned on and holding browsing. If you care check especially if you had the other playback issues.


  95. Looks like a bit of a squeeze on TSLA.  Can't imagine it going that much higher with at most 40,000 cars this year. 


  96. rustle

    40,000 cars this year. Build or sell?


  97. Short-Term Portfolio Update (STP):  Zoomed up to 34.8% and that's a 19% improvement from last week for $19,000 so we are pretty perfectly balanced with the LTP so far.  We just added the SQQQ, which is not reflected yet and please let me know if I missed any additions or changes.  

    • DXD – Though DXD is flattish at $1.85, that's a $4,200 improvement from last week and now it's in the money so DXD should offset a 1% drop in the Dow (it's down 3% since last week) with a $2,500 gain on this position.  Since the LTP fell $10K since last week, our primary hedge is a little deficient and that's why we added SQQQ.
    • GMCR – Still an earnings play (8/6)
    • CI – On track
    • CMG – Leftover after we killed the bull call section.  No real reason to keep it but it's almost certain to expire worthless so no reason to buy them back either with $2,800 left to gain. 
    • NTAP – On track
    • RIG – Took a hit but fine. 
    • ARO – We're going to want to sell puts if they head lower.  
    • CAKE – Same, want to sell puts to get cash. 
    • YHOO – Not the same, we are just betting on AliBaba – we don't actually like YHOO that much.  
    • NFLX – Was an earnings play, time to pull the plug as we didn't get the drop we wanted.  
    • XRT – On track for full gain.  Still a good entry.  
    • BIDU – A longer-term play where we sell lots of premium.  
    • FAS – Our usual FAS Money trade, back on track with the short calls.  Stop should be $1.50 on the Aug $100s now
    • FB – Went higher than we wanted and now a loser, needs to be adjusted next week. 
    • SCO – We can get $3.25 for the spread now or wait until October to get $4.  I think take it now.  The short puts were last sold for 0.66 this morning so we'll offer 0.60 for those and leave them naked if we have to as they are 20% out of the money (10% move on oil) 
    • SLW – On track
    • TSLA – Still waiting to see how this plays out.  Still about even.  
    • TZA – Aug $14 calls are off the table at $3 (per earlier call) and short Jan puts can stay for now.  
    • WYNN – Right on track at the moment.

    No wonder this portfolio is doing so well – these trades are great!  Not much to do here and very easy to tilt a little more bullish into the weekend with our SQQQs but not too bullish as we're killing the TZA's.  

    BALANCE is so nice!  


  98. Phil,

    I've been layering into the SQQQ 40/45 bull call with the short LULU 35p's as the offset.  Would you continue to add to this hedge now (since I just got back to my computer), or do the new SQQQ 43/50 hedge with one of your listed offsets?  

    Which is better.  Simple answer is fine.


  99. Phil / Trading  -  I don't know, I think it's perfect.  I have a bunch of short put postions with only a 25% to 50% trade allocation.  So when we get these nice Vol spikes, I like to sell more or sell a strike down, as long as I still continue to believe in the trade and want to own the stock.

    Some spreads I have aren't complete yet, as I tend to buy my longs during low vol and sell my shorts during high vol, which maximizes being the "bank" if you will.  


  100. SQQQ/Burr – There's no special difference between the two.  If you already have the $40/50s, I'd stick with accumulating those.   As to trading, that's just the way to do it but don't get too excited to put more money in, the only time you want to be over 75% invested is when the market is down 50% (pretty much never).  


  101. Phil – wonderful call on the TZA 14Cs, 400% gain in less than a month and helping fund my NAK empire……lol


  102. SQQQ

    I just checked the order I put in this morning and it filled about 30 minutes ago for $1.60


  103. actually 300%, I got a little too excited…..but will still take it!


  104. $25,000 Portfolio Update ($25KP):  Up a nice 7% from last week as we've been bearish here.  Our goal with this portfolio is to get to $50K, then $100K, at which point it becomes the STP and we cycle around again.   We're limited to no-margin plays so it's slow going but good progress so far.  

    Same comments as STP for essentially the same positions.

    • EWJ – This one is new and looks good. 

    Butterfly Catching Portfolio Update: Down 0.6% ($600) since last week.  Since we are selling short-term premium in this portfolio, the rising VIX is not good for the BALANCE but that has nothing to do with whether or not we're happy with the trade.  As hopefully all are learning, we have our usual ups and downs in this portfolio but – more so than any other – it cranks out some very reliable gains over time.  

    • BTU – Unfortunately, we did not sell calls this period because we HOPED that BTU would break out.  This is why hope is not a valid investing strategy.  Next week, whatever the stock does, we'll look into selling more calls. 
    • CZR – What a ride!  If they break $15, I will become concerned but we sold the Sept $16 calls because we thought they'd be around here.  Below our line on a weak market isn't a big concern, but it will become one if the market gets weaker. 
    • DIA – Right on target.  Notice we make $5,000 if those short puts and calls expire worthless. 
    • JPM – Right on target. $2,000 to be gained here if we stay in range.  
    • TXN – Also on target for another $3,000.

    Since the VIX was low on the last rollover and earnings were coming, we mostly sold Sept premium instead of August.  That means, of course, that it will take us a while to realize our profits so this month is almost a pause but going flat through earnings with about $13,000 in short premium sold is a very nice accomplishment!  


  105. NAK/Steve – They've been rockin' it lately.  


  106. I hate days when gold and various short puts (which are still good, just get pulled back) give me a 'down day' … yet there is nothing to do about it but wait and log another mild negative day.

    but I suppose much better than a big negative day…


  107. The SGEN Jan16 35P that I sold for 3.95 are now mid 4.70 or a 30% better price.  I'm going to sell some more especially with these earnings.

    http://seekingalpha.com/news/1889585-seattle-genetics-beats-by-0_09-beats-on-revenue


  108. Sooo, that TNA AUG 72.5/76.5 bull call in the make 10K out of 1K post is down 72%.  

    Phil, how would you adjust it?  I only did 10 on it.  


  109. Burr TNA one of these bade calls join the party and dump it The caller I think will be worthless but the call is the great loser I did only 4 never trust this things  


  110. Phil, STNG keeps getting cheaper, is it time for a new entry?


  111. Burrben you can get more than $7 for 2016 35 puts on SGEN


  112. pwright72.  You're right.  I'm reading poorly today.  IB Lists the contracts as SGEN JAN15'16 for 2016 and JAN16'15 for 2015.  Easy to make mistake.  Regardless, I'm selling the 2015's.


  113. I sold a few of the 2016s, but either way, they're pretty margin efficient


  114. Phil,

    I'd like to thank you for the webinars yesterday. I find a lot of learning through seeing the activity. Thanks


  115. GNC/Phil         Any value here.  I saw this trade 2500x today:   Buy Dec. 35/42.5 bull call spread for $1.80 and sell the 27.50 puts for .90.


  116. Quote of the day:

    Adam Grimes, “Daytrading is probably harder than you think and your chances of success, for any number of reasons, are a lot slimmer than you think”  (Adam Grimes)


  117. Income Portfolio Update:  This one is bullish and also hedged, of course, with the STP so down 3% since last week is $15,000 and we're keeping even.  We swallowed a huge loss adjusting our AAPL position and it's going to be a long time before we realize the potential $150,000 from the AAPL spread (now just $30,000) – even though it's already $75,000 in the money.  

    So we can't expect a portfolio that's hiding $45,000 (not to mention we're still being charged $17,700 for short puts that are way out of the money) to look great on balance and, like the LTP, these are long-term positions that are either on or off track – we're not looking to mess around with them. 

    Short puts all on track except HOV and TASR and I'm not worried about either of them.  Both are good for new entries, as is GTAT.

    • ARO is new and we'll be looking to sell a short put.  
    • TASR should be cleaned up and combined with the short puts.
    • CLF – On track.  Keep in mind these get called away at $13 and the stock is $17 so the apparent loss on the balance is just silly.  Our net entry was $9.55 so called away at $13 is a 25% profit ($3,450) but currently, at $17, the balance shows a net loss of $390.  This is a great example of why you need to understand how these trades work – your broker's report does not.  This is still a fantastic net entry for those looking to make a nice 25% in 18 months as long as CLF doesn't fall more than 25% (and even below $13, you still have another 25% before you are in trouble!).  
    • NLY – On track and paying a lovely dividend.  
    • OPTT – This is OFF track!  We're HOPING they recover and there's no particular reason to cut and run now but no reason to add more either.  
    • XCO – New with a disappointing start but what do we expect with $97.50 oil?
    • AAPL – Discussed above.  
    • ABX – On track 
    • CCJ – On track
    • CLF – On track (a more aggressive play)
    • CZR – Off track, needs watching, small enough to add to. 
    • EBAY – On track
    • IRBT – Off track, definitely needs to be added to next week.  
    • LULU – On track
    • PFE – On track
    • PNRA – New
    • RIG – On track despite being knocked back with oil. 
    • TEX – Off track, small enough to add to next week. 
    • TM – On track
    • TWTR – On track
    • UBNT – Off track now, we need to reanalyze.
    • WFM – A bit slow but on track, despite pullback. 

    We could and should be doing better here.  It's a much more conservative mix than the LTP with all of our real risk concentrated in AAPL (our Trade of the Year).  Next week, we'll look carefully to see what can be improved. 


  118. CDE – if you margin-efficient puts, try the Jan16 $8 puts for $2.00 @ $350 margin


  119. I'm actually trying to sell those STNG Jan15 10P's for 1.50 to offset the 1.70 cost on the TNA spread, which will cut the "loss" a good bit, as I don't mind owning STNG.


  120. Digging through the ISM numbers:

    http://www.bespokeinvest.com/thinkbig/2014/8/1/ism-manufacturing-hits-a-three-year-high.html

    Interestingly enough, inventories are down despite the big increase in inventories in the GDP! Big jump in employment as well.


  121. The nest 20 years should be interesting:

    http://www.nakedcapitalism.com/2014/08/humanity-may-face-choice-2040-conventional-energy-drinking-water.html

    The research, which included projections of the availability of water and the growth of the world’s population, found that by 2020, between 30 percent and 40 percent of the planet will no longer have direct access to clean drinking water. The problem could be made even worse if climate change accelerates, creating more heat and causing more water evaporation.

    That means humankind must decide how water is used, Sovacool says. “Do we want to spend it on keeping the power plants going or as drinking water? We don’t have enough water to do both,” he says.

    The researchers, also from the Vermont Law School and CNA Corporation in the US, a non-profit research institute in Arlington, Va., focused their studies on specific utilities and other energy suppliers in four countries: China, France, India and the United States.

    First, they identified each country’s energy needs, then factored in projections of water availability in each country and its population level as far as 2040. In all four cases, they discovered, there will not be enough water by then both to drink and to use at electricity-generating plants.

    So how to prevent this conflict? The studies agreed on starting with the simplest solution: Alternative sources of electricity that don’t require massive amounts of water.


  122. TNA/Burr – It's only down if you didn't read the actual instructions.  

    http://www.philstockworld.com/2014/07/22/10000-tuesday-one-trade-to-make-your-month/

    I'll preface this by saying that our Members are already long on Russell Futures at the 1,150 line, as we made that call in our live Member Chat Room (become a Member here) earlier this morning. 

    Now, if you don't want to be bullish on the Russell when TNA is down 37% (Russell 1,006), then why are you long on it at 1,150?

    July 22nd, 2014 at 9:37 am | (Unlocked) | Permalink

    RUT can't stay over that 1,150 line and I wouldn't go buying those TNA spreads if it can't even get that obstacle out of the way!  

    As to adjusting it, let's see what happens next week.  TNA does make a great long if we recover.  

    STNG/Jophil – Remind me next week.  

    You're welcome, Chas.  We'll do more of those sessions next week on calmer days.  

    GNC/Stock – I think there's a downtrend for them as people move away from vitamins, not to mention their client base hasn't got as much disposable income.  On the other hand, it's a nice sell-off and maybe worth a toss.  Another one to look at next week.

    Well, that was a pretty blah close – have a good weekend everyone.  


  123. BRK.A/BRK.B- Wow, what a quarter Warren had! Warren Buffett's  Berkshire Hathaway Inc . (BRK.B)(BRKA) saw operating profit increase by 10.5% in the second-quarter. Berkshire reported a profit of $6.4 billion, or $3,889 per Class A share, compared to $4.54 billion, or $2,763 a share, a year earlier. Operating profit, which excludes some investment results, was up to $2,634 a share from $2,384 in the year-ago period. Analysts were expecting operating earnings of $2,485.21 per Class A share, and operating earnings of $1.66 per Class B share on revenue of $48.86 million. Revenue rose to $49.76 billion from $44.69 billion. Berkshire's shareholders' equity increased $12.1 billion and the total book value per Class A equivalent share has increased by 5.6% to $142,483 as of July 30. Berkshire, which owns large insurance operations, a railroad, power plants, and apparel makers, also had investment and derivative gains of $1.44 billion. Berkshire shares were up 1% in post-market trading. 

    I own B shares in my retirement account and just wish I had started accumulating when I first was told to buy back in 1985. when shares were $1900. I remember  thinking that it was awfully expensive and everytime I looked it kept going up and I kept thinking I had missed my chance. There's a lesson in there somewhere I think.


  124. Seems I'm not the only one dissatisfied with Judge Preska:

    How one judge single-handedly killed trust in the US technology industry
    http://www.zdnet.com/how-one-judge-single-handedly-killed-trust-in-the-us-technology-industry-7000032257/

    ?


  125. TNA – Yeah, I guess after reading the whole morning article promoting the trade and all the permutations of puts to try, I missed the one sentence, that wasn't even in quotes, about not doing the trade.  Sorry.

    Regardless, I'm not crying, it was a bet to the upside. Bets are bets.  No crying in Vegas.

     I can sell those STNG or CLF and make the cost of the bet net 0ish.  

    I would actually think of rolling down the long calls, doubling down, and then selling a closer short call for a full cover, leaving the higher short calls to expire and burn premium….depending on what the weekend looks like.


  126. Although, if we're copying text.  I filled for 1.70.

    TNA/Craigs – Well now we're over 1,150 so game on until we're not.  It's still a good hedge but $2.15 is a bit chasey – I'd offer $1.95 and see if it fills


  127. Ceasars Entertainment Corp. (NASDAQ: CZR) dropped more than 4.5% today and posted a new 52-week low of $15.25. The 52-week high is $26.74. Fitch Ratings issued a note earlier in the week pointing out that the company is struggling to avoid defaulting on $12.9 billion in high-yield debt.

    Dick’s Sporting Goods Inc. (NYSE: DKS) saw shares fall to a new 52-week low of $41.74 after laying off 400 golf instructors earlier this week as sales of golf gear shrinks. The stock’s 52-week  high is $58.87 and more than 2 million shares change hands on an average trading day. Gun sales are also dropping faster than the firm expected.


  128. What a week….



  129. Apple booster?

      

    Microsoft Says It Is Suing Samsung

    Microsoft said it has sued Samsung Electronics, claiming its rival violated a patent-licensing contract. The dispute involves technology included in Android, Google's operating system for mobile phones and tablets. 6:57 PM


  130. Anyone have a line on a water shortage-driven investment?   I knew in general terms that water was becoming a problem in a number of countries, but Google-ing "water shortage," evokes a long, diverse and alarming list of articles with much broader global reach and a much shorter time frame than I had understood.


  131. Phil / CZR

    outside the fly – long term Bull Call Spread on CZR ?


  132. Water / Zero – If you read the article I posted, you would be scared… I guess in the US it will depend in which state you live, but water will become a problem. My guess would to invest in companies specializing in desalinization as that will most likely be a solution in a lot of places. The drawback is that it requires a lot of electricity which of course aggravates the problem…


  133. TNA/Burr- I think that TNA bet may be a good one for you. Too many very good earnings reports,man accommodative Fed, and CNBC talking about more downside and bigger correction. Could presage a good week coming up. This may have just been the pause that refreshes. Earnings seem to be supporting share prices in the good names. 

    Phil- Nasdaq is currently the laggard, but because so much of it is Apple i am wondering if it means Apple is going to tumble or if Apple keeps this boat afloat? I am hoping for the latter, but wondered what you thought about that observation?


  134. http://finance.yahoo.com/news/despite-sharp-selloff-too-early-211642909.html

    My opinion since yesterday is unchanged. Worst week since 2012 doesn't say much.


  135. Phil, do you have a link to preferred post of how you apply your bounce levels? I'd like to bookmark it for reference. Thanks! 


  136. PhilNXPI (NXP Semiconductors), do you think they have more room to run or is Sam Peters just talking his own book? I like the fact that they are diversified and located in the Netherlands, but their fundamentals do not particularly seem like much of a bargain at this point. What are your thoughts? Thanks!


  137. I am not a fan of Jeff Macke, but for those not properly hedged (or in cash), he does make some notable points:

    “Mass psychology isn't a new science. In 1895 a French social psychologist named Gustav LeBon wrote a book called "The Crowd: a Study of the Popular Mind" in which he basically noted that people tend to do stupid things when operating as a group. His analysis was simple but the conclusion holds. This sell-off is very much a global event. [Thursday] all ten sectors fell between 1.56 and 2%. You're going to hear all kinds of fancy economic theories for catalysts but the most obvious explanation for the selling is that the masses are scared”

    “… This isn't a time for over thinking. It's a time for taking a measure of your emotions. If you're scared now you'll be more frightened later. Control your risk. If you didn't sleep last night you're too long stocks. If you're afraid of your statements it's because a little voice in your head knows you're taking too much risk. Get in front of that emotion before it reduces your intellect to that of the masses. Buckle up and look for opportunities. There are times for bravery and times to simply buckle up. History suggests the selling will end when we're all good and scared. We're not there yet but we will be, most likely sooner than you think.”


  138. Phil / CZR
    Bond Negotiation


  139. GILD –  Playing the good guy.

    http://www.gizmag.com/mpp-gilead-hiv-generic/33130/


  140. Phil— Streth/Japan/Short

    Suppose you wanted to make a big short bet on Japan, what would you do? I assume that, unlike oil,  Japan is not within your normal priority screens? It is a big target. So you may think about it sometimes?

    Thanks

    Strether


  141. Good morning!  

    BRK.A/Craigs – Amazing company.  Give me faith in the economy as they are so diverse and pretty consumer-oriented.  You have to ignore jump in income as there was a stock swap that netted most of those gains but, on the other hand, finding those one-time gems all the time is the Buffett bonus.  From Morningstar:

    Excluding the impact of investments and derivatives, revenue increased 8% year over year. With expenses rising at a slower rate than revenue, and most of the gains from investments and derivatives falling straight to the bottom line, Berkshire reported a 29% increase in pretax earnings (to $8.9 billion) and a 41% increase in net earnings (to $6.4 billion). Stripping out the impact of investments and derivatives, operating earnings increased 11% to $4.3 billion. Net earnings per Class A equivalent share were $3,889 (up from $2,763 during the second quarter of 2013). We do not expect to make any changes to our $225,000 per Class A share ($150 per Class B share) fair value estimate for the firm.

    The lesson I take from Berkshire going from $1,900 to $190,0000 in 30 year is:  Build a business, build your cash flow, acquire other businesses, improve their cash flow – wash, rinse repeat…  Investing is a sideline for Buffett – his real job is building companies. 

    Preska/Scott – Don't worry, MSFT can go to the Supremes, where the Corporation is always right. 

    TNA/Burr – Well, there was also the very subtle tone of us flipping more bearish on the market since then as the Russell and other indexes failed to hold their levels.  There is always context to any trade – they are TOOLS that are meant to be used when the job calls for them – not just because I put an idea down.  The overall premise was that the RUT would hold 1,150 AND the Fed would be dovish the next week (last week) and hand out more money.  

    Even if you missed all the short plays we layered on since that Tuesday and even if you didn't go to the Webinar at 1pm that day, when I said the trade was off because we weren't over 1,150 and even if you didn't sensibly stop out with a reasonable loss – you still have to look over your trades (as we do in our portfolios every week at least) and think about whether each trade continues to make sense within the context of the current market situation.  

    Actually, in that same post, I had also said:

    After falling from $137.50 on FXE, we expect support at $133.50 and that's a $4 fall so 0.80 bounces but let's call it $1 and look for $134.50 to be a weak bounce today.  Anything less than that and we are heading DOWN and that would not bode well for the bulls in the short run.  

    The long play on TNA was a HEDGE against the more and more bearish bets we were piling up IN CASE the market DIDN'T go down.  Our Short-Term Portfolio had gotten very short and, had the conditions kept up, we would have added the trade there but, as noted 7 minutes after the bell that morning – it was a no-trade as the Russell couldn't even keep it up for a day. 

    If you want to blame me for the trade, that's fine, I suggested it - but the quote you throw up at 6:01 to "prove" your point says "Well now we're over 1,150 so game on until we're not ."  You choose to read which words and ignore which words?  

    In fact, that Friday (25th) we even took another pop at TNA but quickly gave up on it:

    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.

    Submitted on 2014/07/25 at 12:19 pm

    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.

    That was after this exchange, which is how we got to talking about TNA in the first place on Friday – the red bold was in the original HIGHLIGHTED quote:

    Submitted on 2014/07/25 at 10:54 am

     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.

    Big Chart – Where are those other 200 dmas?  Will we be seeing them soon?  The Nas's 50 dma looks a little sticky but if they fail, I'd say all of those 200 dmas come into play but not really too far down (you can see the Dow's poking up right at the bottom right.  Keep in mind the real damage comes when those 50 dmas begin bending down, that takes about a week well below the line so it's still anyone's game – technically.  

    Surprisingly no Fed speak next week and not much data either.  If it's all going to be about earnings, I'm not too confident with the companies that are coming up.  Lots of PMIs – that's always fn but I'm more interested in EU Retail Sales, which I don't think will be so hot and the ECB on Thursday, because you know Draghi (and ex-GS guy) is the master of moving the markets with empty promises.  


  142. Twitter/ZZ – That's interesting.  Putin article food for thought as well.  

    Water/ZZ – There's CGW, which is the Global Water Index – it had been performing very well until this month but still up nicely from last year.  

    I don't endorse it because I haven't checked into it but looking at their holdings is a good place to start looking for strength in that sector.  In this country and, I'm sure many others, 50% of our water is lost in the transmission from source to consumer on leaky infrastructure.  Fixing that should be step on to any long-term conservation plan.  Just another way we could create millions of jobs, save the environment and lower the end cost to consumers with a simple Bill.  

    CZR/Wombat – They are in restructuring talks and a lot of people are reading that as going BK but this is what always happens when companies restructure.  If MGM didn't go under when the economy exploded and they had a half-finished, unfunded $10Bn project (City Center), I don't think CZR will go under in a much stronger economy (with much cheaper money available).  Still, our CZR position in the Butterfly Portfolio is up 17% so far:

    CZR
    10 CZR 2014 20-SEP 16.00 CALL SC $ 1,000.00 7/16/2014 $ 1,650.00   18
    $ 650.00 39.4 %
    10 CZR 2014 20-SEP 20.00 PUT SP $ 4,900.00 5/14/2014 $ 2,650.00   81
    $ -2,250.00 -84.9 %
    10 CZR 2014 20-SEP 21.00 CALL SC $ 200.00 5/14/2014 $ 2,100.00 7/16/2014 63
    $ 1,900.00 90.5 %
    10 CZR 2014 17-MAY 20.00 PUT SP $ 0.00 3/31/2014 $ 1,900.00 5/16/2014 46
    $ 1,900.00 100 %
    10 CZR 2014 17-MAY 20.00 CALL SC $ 0.00 3/31/2014 $ 1,300.00 5/16/2014 46
    $ 1,300.00 100 %
    10 CZR 2016 15-JAN 15.00 PUT LP $ 3,700.00 3/31/2014 $ 2,950.00   125
    $ -750.00 -20.3 %
    10 CZR 2016 15-JAN 22.50 CALL LC $ 4,700.00 3/31/2014 $ 1,150.00   125
    $ -3,550.00 -75.5 %
    10 CZR 2014 22-MAR 22.50 PUT SP $ 10.00 2/21/2014 $ 1,000.00 3/21/2014 28
    $ 990.00 99.0 %
    10 CZR 2014 22-MAR 22.50 CALL SC $ 950.00 2/21/2014 $ 1,750.00 3/21/2014 28
    $ 800.00 45.7 %
    10 CZR 2014 22-FEB 22.50 PUT SP $ 0.00 1/17/2014 $ 1,400.00 2/21/2014 35
    $ 1,400.00 100 %
    10 CZR 2014 22-FEB 22.50 CALL SC $ 1,200.00 1/17/2014 $ 1,700.00 2/21/2014 35
    $ 500.00 29.4 %
    10 CZR 2015 17-JAN 15.00 CALL LC $ 6,800.00 9/27/2013 $ 10,500.00 3/21/2014 175
    $ 3,700.00 54.4 %
    10 CZR 2014 18-JAN 20.00 CALL SC $ 2,650.00 9/27/2013 $ 2,000.00 1/17/2014 112
    $ -650.00 -32.5 %
    10 CZR 2014 18-JAN 15.00 PUT SP $ 0.00 9/27/2013 $ 2,000.00 1/17/2014 112
    $ 2,000.00 100 %
    10 CZR 2015 17-JAN 12.50 PUT LP $ 4,000.00 9/27/2013 $ 1,250.00 3/21/2014 175
    $ -2,750.00 -68.8 %
    Total Gain/Loss for CZR
    $ 5,190.00 17.2 %

    The current spread is the 2016 $22.50 calls ($4.70) and $15 puts ($3.70) long and we sold Sept $16 calls for $1.65 and $20 puts for $2.65 so net $4.30 collected means our break-even in Sept is $15.70 – just over where they are now ($15.30).  If $15 doesn't hold, we will have decisions to make but $15 should be support unless, of course, the whole market tanks – then noting is support but I'd still be inclined to roll the Sept $20 puts ($4.70) to the Jan $17.50 puts ($3.50) for net $1.20 and roll the 2016 $22.50 calls ($1.85) to the $15s $4.40 for another $2.55 and that would put us in the 2016 $15 puts and calls for net $12.15 and then we can sell the Jan $15 calls (once Sept expires) for $2.50 plus the net $1.45 we still have on the short $17.50 puts, is still 32% back on our net long in 4 more months, so still a useful trade – and now our coverage is much tighter.  

    Nasdaq/Craigs – The Nasdaq, without AAPL, had been pulling back already.  If we assume AAPL doesn't go over $100 anytime soon, then that means the prop that holds up the Nas has been taken out.  Any downside to AAPL (and we expect a $10 pullback to $90 (40%) off the $25 run from $75 to $100) is a bonus that will drop the Nas further.  I don't think AAPL, or the Nasdaq are too likely to correct more than that – outside of EU/Asia events getting more out of control.  

    Correction/Shadow – Why worry?  It's nice and healthy as long as we stay over -10%.  

    Bounce Levels/Bdon – Is that not in the Wiki?  Does anyone actually use the Wiki?  Maybe we should do a special after-school Webinar on the 5% Rule one day.  That might be a good one to archive.  The short story is that it's just 20% (strong) or 40% (weak) of the move from consolidation to consolidation or spike to spike – depending on the timeframe you want to use.  For our broader lines, we ignore spikes in either direction and we have a bias towards rounding to whole numbers on the charts.  Hmm, maybe we don't need a whole Webinar for that….


  143. Goldman Warns Of 6.5% Japanese GDP Collapse, Worst Since Lehman
    http://www.zerohedge.com/news/2014-08-02/goldman-warns-65-japanese-gdp-collapse-worst-lehman



  144. A Common Virus Is Eating Your Gut Bacteria
    http://www.forbes.com/sites/jvchamary/2014/08/02/crassphage/



  145. Toledo water alert: Don’t drink or even boil
    http://www.cnn.com/2014/08/02/us/toledo-water-warning/


  146. Privacy as a premium: Why it’s time to say goodbye to the free internet
    http://thenextweb.com/socialmedia/2014/08/02/privacy-premium-time-say-goodbye-free-internet/





  147. Lowest August gas prices in four years
    http://money.cnn.com/2014/08/01/news/economy/gas-price/



  148. Close loopholes that let U.S. firms avoid taxes by using inversions
    http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20140803-column.html



  149. Plans to lay off 1,100 West Virginia coal mine workers continue industry’s downward spiral
    http://www.foxbusiness.com/markets/2014/08/01/plans-to-lay-off-1100-west-virginia-coal-mine-workers-continue-industry/





  150. Experts In Charge Of Imaginary $200 Billion VC Climate Fund Say Kill Coal, Spend On Nuclear
    http://www.fastcoexist.com/3033615/experts-in-charge-of-imaginary-200-billion-vc-climate-fund-say-kill-coal-spend-on-nuclear



  151. After daughter’s death, parents plead for forgiveness of her $200K student-loan debt
    http://www.today.com/parents/after-daughters-death-parents-plead-forgiveness-her-200k-student-loan-1D79996678


  152. The WWE is convinced its Netflix-style experiment is going to succeed
    http://qz.com/243055/the-wwe-is-convinced-its-netflix-style-experiment-is-going-to-succeed/


  153. China should set less ambitious 2015 growth target, refrain from stimulus: IMF
    http://www.reuters.com/article/2014/07/31/us-china-economy-imf-idUSKBN0G002P20140731


  154. BRK/B- for those of you keeping score- Berkshire book value increased 5.6% to $142,483 per A share. Converting to B share equivalent is $95. 

    At Friday's closing price of $125.83- it trades at 1.32 times book value- still on the lower end of the historical trading range or price to book (1.2 to 1.6). 

    The putative "floor" under the share price is now $114 per Warren's buyback declaration. 


  155. Phil / CZR
    Thanks Brainiac. Go have a Sunday >>>


  156. I think PEG would make a nice conservative play off the 200D MA. Decent div, held by a lot of gurus. 


  157. From Bloomberg, Aug 3, 2014, 8:26:02 PM

    Asian stocks fell, after the regional
    benchmark index last week capped its biggest daily drop in
    almost three months, as a smaller-than-forecast increase in U.S.
    payrolls overshadowed a bailout for Portugal’s Banco Espirito
    Santo SA.

    To read the entire article, go to http://bloom.bg/1o4GD74

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


  158. From Bloomberg, Aug 3, 2014, 8:13:10 PM

    Rescuers carry an injuried child on a stretcher after a 6.5 magnitude earthquake hit the Zhaotong city region in southwest China’s Yunnan province, on August 3, 2014. Source: AFP via Getty Images

    The death toll after a magnitude-6.5
    earthquake that struck southwestern China yesterday increased to
    367 as rescuers searched for survivors through the rubble of
    thousands of collapsed homes.

    To read the entire article, go to http://bloom.bg/1o3qIpD

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


  159. From Bloomberg, Aug 3, 2014, 6:00:00 PM

    There’s no sign of a let up in gold
    industry takeovers as a surge in acquisitions by producers, led
    by Agnico Eagle Mines Ltd. (AEM) and Yamana Gold Inc. (YRI), has pushed
    deals to a three-year high.

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

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


  160. From Bloomberg, Aug 3, 2014, 7:27:46 PM


    Pedestrians pass available automated teller machines (ATM) outside a Banco Espirito Santo SA bank branch in Lisbon. Photographer: Mario Proenca/Bloomberg

    Portugal’s central bank took control of Banco Espirito Santo SA, once the country’s largest lender by market value, in a 4.9 billion-euro ($6.6 billion) bailout that will leave junior bondholders with losses.

    To read the entire article, go to http://bloom.bg/1nivqK9

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


  161. From Bloomberg, Aug 3, 2014, 7:13:20 PM

    WH Group (288), the world’s biggest pork
    supplier, will raise net proceeds of HK$15.3 billion ($1.97
    billion) from a revived Hong Kong IPO.

    To read the entire article, go to http://bloom.bg/1siZnz0

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


  162. From Bloomberg, Aug 3, 2014, 5:28:13 PM

    Residents gather fresh drinking water provided by the Ohio National Guard, on Sunday, August 3, 2014, at Woodward High School in Toledo, Ohio. Photographer: Haraz N. Ghanbari/AP Photo

    About 400,000 residents in and around
    Toledo were told for a second day not to drink water
    contaminated by an algae toxin, as Ohio’s governor declared a
    state of emergency in the state’s fourth-largest city and
    surrounding counties.

    To read the entire article, go to http://bloom.bg/1s28OoU

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


  163. From Bloomberg, Aug 3, 2014, 3:08:53 PM

    Aug. 1 (Bloomberg) –- Radio Times Film Critic Stella Papamichael discusses the film “Guardians of the Galaxy,” why she gave it four out of five stars and the popularity of comic book movies with Mark Barton, Caroline Hyde and Ryan Chilcote on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    “Guardians of the Galaxy,” the latest action film from Walt Disney Co. (DIS)’s Marvel Studios, opened as the top weekend picture in cinemas, smashing forecasts with ticket sales of $94 million for the best August opening ever.

    To read the entire article, go to http://bloom.bg/1tK0UB9

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


  164. Watch this video at http://bloom.bg/1rWcpVB

    How Berkshire Is a Gauge of the U.S. Economy

    Aug. 1 (Bloomberg) — Bloomberg’s Noah Buhayar reports on the performance of Berkshire Hathaway and how that correlates to the performance of the larger U.S. economy. Buhayar speaks on “In The Loop.” (Source: Bloomberg)

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


  165. From Bloomberg, Aug 3, 2014, 12:43:31 AM

    Aug. 1 (Bloomberg) — Miranda Carr, head of research at North Square Blue Oak Ltd., talks about China’s manufacturing, which expanded at the fastest pace in more than two years in July, the country’s anti-corruption campaign, and the housing and energy industries.
    She speaks with Jonathan Ferro on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    The People’s Bank of China warned
    that the country’s credit and money supply have increased
    rapidly and indicated that it will refrain from broader monetary
    easing to support growth.

    To read the entire article, go to http://bloom.bg/1seFQ3I

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


  166. From Bloomberg, Aug 1, 2014, 12:01:00 AM

    The Obama administration’s $150
    million tax on health insurance for 20,000 dockworkers at West
    Coast ports is complicating contract negotiations whose failure
    could shut down 29 ports at a cost of $2 billion a day.

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

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


  167. From Bloomberg, Aug 1, 2014, 3:41:38 PM

    Two years after the worst U.S. drought in a century cut output and sent prices to the highest ever, rain and milder weather of the past two months are creating ideal growing conditions. Photographer: Daniel Acker/Bloomberg

    The second ear of corn emerging on stalks across Pat Solon’s 1,600-acre farm in Illinois is the latest sign that the U.S. crop this year will be a bin-buster.

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

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


  168. From Bloomberg, Aug 1, 2014, 8:52:06 AM

    About 46.25 million people were enrolled in the Supplemental Nutrition Assistance Program in April. Photographer: Michael S. Williamson/The Washington Post via Getty Images

    Participation in the U.S. government food-stamp program is declining modestly as low-income Americans get some economic reprieve.

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

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


  169. From Bloomberg, Aug 3, 2014, 7:00:01 PM

    One of the biggest winners in the
    push to make money-market funds safer for investors is turning
    out to be none other than the U.S. government.

    To read the entire article, go to http://bloom.bg/1tL9tvA

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


  170. From Bloomberg, Aug 2, 2014, 10:51:24 PM

    A Chinese services-industry index
    declined to a six-month low in July, dragged down by a weaker
    property market.

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

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


  171. From Bloomberg, Aug 1, 2014, 7:21:59 PM

    Aug. 1 (Bloomberg) — Argentina’s failure to pay interest on its bonds is a credit event that will trigger settlement of $1 billion of credit-default swaps, according to the International Swaps & Derivatives Association. Sheelah Kolhatkar has more on “Bottom Line.” (Source: Bloomberg)

    Argentine bonds posted the biggest two-day loss since 2012 as a committee ruled that the failure to pay interest will trigger $1 billion of credit-default swaps.

    To read the entire article, go to http://bloom.bg/1AHB42z

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


  172. From Bloomberg, Aug 3, 2014, 6:03:22 PM


    The truth is out there. Just ask Brad Katsuyama.

    In the last few months, I have had a strange and interesting experience. In early April, I found myself the main character in Michael Lewis’s book “Flash Boys.” It told the story of a quest I’ve been on, with my colleagues, to expose and to prevent a lot of outrageous behavior in the U.S. stock market.

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

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  173. From Bloomberg, Aug 3, 2014, 6:03:22 PM

    It would take a lot of rain to refill Lake Mead.

    Seven Western states have just received an overdraft notice from nature’s water bank, written in red ink, all caps. It turns out that three-fourths of the H2O they’ve been using during the American West’s record drought (14 years and counting) has been drawn from their precious savings account: not the Colorado River itself but aquifers below ground.

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

    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, Aug 3, 2014, 11:03:25 AM


    How many members of Congress do you see? 

    Happy summer vacation, Congress. Clearly, you need a break.

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

    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, Aug 1, 2014, 5:22:31 PM

    But think of the franchise owners!

    The most surprising bit of news this week was a ruling out from the National Labor Relations Board, saying that McDonald’s Corp. functions as a joint employer with its franchisees and can therefore be held liable for their employment decisions. The immediate effect is to join McDonald’s to a few dozen labor disputes at individual stores. But the goal is pretty clearly much larger: making it much easier to unionize McDonald’s, by allowing unions to organize the whole company, rather than trying to eke out victories one store at a time. If this ruling stands, it will have seismic effects on the franchise model.

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

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


  176. This ignorant idiot is whipping people into a frenzy:

    http://talkingpointsmemo.com/livewire/donald-trump-ebola-rant

    Trump began his rant Thursday night and quickly ratcheted up the rhetoric, including condemning the two aid workers who contracted the virus while treating Ebola patients in Africa.

    "People that go to far away places to help out are great," Trump wrote in one tweet, "but must suffer the consequences!"

    There are already some people suggesting that the kids from Central America are also bringing ebola. How do these guys sleep at night?


  177. StJ- They don't sleep at night, they sleep in their coffins during the day!


  178. Good morning! 

    Futures up a bit on China PMI (51.7) hitting a 2-year high.  More stimulus, of course, is the story:

    "Policy makers are continuing with targeted easing in recent weeks and we expect the cumulative impact of these measures to filter through in the next few months and help consolidate the recovery," HSBC's chief economist for China, Qu Hongbin, said.

    Beijing has unveiled a series of supportive policies for small businesses, which were hit hard by sluggish economic growth. The central bank cut the amount of cash banks need to hold in reserve, which boosts the amount they can lend to small firms. The government also is offering tax breaks for small businesses.

    Europe is up about half a point, peaking out at lunch so far, our Futures are up about 0.4% and we need at least 0.5% to make a weak bounce off a 2.5% pullback last week. 

    So – Meaningless Monday as we'll need a strong bounce for the week (1%+) to write off last week.  The faster we get it, the more enthusiastic we can be about getting back to the rally.  The longer it takes, the more skeptical we'll be.  

    NXPI/Diamond – They have a lot of debt ($3.6Bn) but they've got their cash flow positive enough to buy back $240M in stock last year (1.5%) and they are on track to make $5/share next year so $62.40 not a terrible price and they do seem to be done pulling back as they fought off the weakness last week and gained over the last two days, so that's impressive. With the higher volatility, you can take advantage by selling Jan $57.50 puts for $3.60 for a net $53.90 entry, another 15% off if put to you. 

    Macke/Diamond – Good advice. 

    GILD/Burr – Very nice.  

    Afghanistan/Albo – Maybe it was a mistake to go in there?  

    Japan/Streth – Too much stimulus (and a Government willing to do things to boost the economy) to make a big short.  We did EWJ puts and I'd stick with something like that that limits the downside risk.

    BRK.B/Pstas – With a floor less than 10% below the stock price – you can sell 2016 $110 puts for $4.65 and get a net $105.35 entry, which is another 16% off the current price.  TOS says $10,700 in margin to sell them, so not very efficient but a lot safer than most put sales with that book value "floor" under the stock at $114.  Of course, if Warren dies over the next 18 months, you will very likely end up owning the stock while it recovers.  

    PEG/Bdon – If they hold the line here ($35) at the 200 dma, then yes, good entry.  At $30 I'd be downright excited about owning them but they don't have long-term options, unfortunately.  They do pay a 3.7% ($1.48) dividend and you can sell March $35 calls for $2.25 so those make a nice net $32.75 entry but you might want to get out if $35 doesn't hold and wait for them to prove a bottom.  

    Trump/StJ – He gets worse every year.