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Monday Markets are Meaty, Beaty, Big and Bouncy!

 

"Thruppence and sixpence every day
Just to drive to my baby

I don't care how much I pay (Too much, Magic Bus)
I wanna drive my bus to my baby each day (Too much, Magic Bus)

I don't want to cause no fuss (Too much, Magic Bus)
But can I buy your Magic Bus? (Too much, Magic Bus) " – The Who

This is certainly one Magic Bus of a market, flipping on a dime or, more accurately, bouncing off the Dow's 200 day moving average at 16,350 back towards our predicted strong bounce line at 16,650.  The Transports are also bouncing right off the 100 dma at 142, down from 152 and. per our 5% Rule™, we expect 146 to be tested this morning.  This is not "surprising", this is what we said would happen on Friday morning.  

As we discussed all of last week, BALANCE is the key in a choppy market and our Long-Term Portfolio finished Friday at $590K, up exactly 18% for the year, while our Short-Term Portfolio jumped to $136,000, up 36% for the year and together they are $726,000, up over 20% for the year on our two primary virtual portfolios.  

8-9-2014 12-05-11 AM DIAHaving well-balanced portfolios allowed us to ride out the dip and, in fact, buy more longs while the market was pulling back, rather than panicking out of positions that, for the most part, only went down with the market – rather than because there was any actual weakness in the stock.  

Our general strategy of Being the House – Not the Gambler is also a great help in consistently making progress in our portfolios, even when the market has such a choppy week.  

For most traders, it's "thruppence and sixpence every day" just to hold on to their positions as they gyrate up and down.  As sellers of premium, we own the Magic Bus and we collect those daily pennies instead of selling them and that acts as a tremendous buffer to our long-term investing, where simply hanging on to a position allows us to collect another day's rent!  

Meanwhile, we can play with short-term positions, like the SCTY trade I put up in Friday morning's post (and you'll never miss a post or a trade if you subscribe to our newsletter RIGHT HERE), which has already jumped from a $975 credit to net $325 for a nice +$1,300 return (133%) on the day.

That trade is a microcosm of our system, we sold a lot of premium (the Sept $77.50 calls for $6.50) and bough less premium (the Jan $80/95 bull call spread at $4.55) to cover it.  That gave us a huge advantage whether we were right or wrong and, in this case, we turned out to be right and made us some very quick money.  

8-9-2014 12-29-30 AM iwmOur other trade ideas from Thursday's Live Member Chat Room (all noted in Friday's post as well) were 5 for 5:

During Live Member Chat yesterday, we also found a bullish trade on WAG ($60), bearish on GMCR at $120, bearish on TLSA at $255(above), bullish on NLY at $11.40, bearish on SCTY (above) and our last trade of the day was bullish on SSO ($110 - ultra-long S&P). 

Having our portfolios well-balanced gives us the flexibility to make adjustments like these CALMLY and professionally – even when the markets are falling hard, as they were on Thursday.  Our 5% Rule™ allowed us to correctly predict the likely turning point and adjust our trades accordingly.  Having time to think when market conditions change is the most underrated aspect of a balanced portfolio strategy!  

Now we begin a new week and we have the same old bounce lines we were watching last week and we expect our strong bounce levels to all be in play today.  Nothing short of 5 greens is going to satisfy us at the end of the day – otherwise we will likely be tilting back a bit more bearish in our Short-Term Portfolio but our primary goal, with 7 months gone this year, is to lock in those 20% gains.  

 If the market continues to go up or stays flat, those premiums we sold will pay us our daily pennies and our portfolios will continue to grow.  If the market remains weak, we will have to consider getting to more cash as we're not too far away from a serious breakdown if this downtrend doesn't reverse itself this week (over the strong bounce lines to stay).  

Japan's GDP tomorrow night WILL be a disaster, the real question is – how will the markets take it?  Euro-Zone GDP is also not likely to be a big winner on Thursday morning and Chinese Retail Sales will also be a market-mover on Wednesday so it's going to be a wild week – today is more of a "watch and wait" event for us – but we'll still take our pennies, thank you!  

 


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  1. Oil Lines

    R3 – 99.11
    R2 – 98.68
    R1 – 98.01
    PP – 97.58
    S1 – 96.91
    S2 – 96.48
    S3 – 95.81

    Tight lines with 98 being the resistance line so far!


  2. That might make some sense with 1M apps and growing:

    http://qz.com/247370/apple-tim-cook-desperately-needs-to-fix-the-app-store/

    With one million titles and no human guides, the Apple App Store has become incomprehensible for mere mortals. A simple solution exists: curation by humans instead of algorithms. [...]

    But in today’s app stores, the excitement fades—and I’m not just talking about Apple, Android’s Google Play is every bit as frustrating. I see poorly exploited gold mines where quantity obscures quality and the lack of human curation ruins the Joy of Apps. There are caves full of riches but, most of of the time, I can’t find a path to the mother lode.


  3. Charts of the week:

    http://qz.com/247005/italys-triple-dip-and-the-nine-other-key-economic-charts-of-the-week/

    Maybe signs of optimism in the US:

    But caution in Europe:


  4. Hopeful signs…

    http://www.bloomberg.com/news/2014-08-10/job-market-tilts-toward-workers-as-u-s-enters-virtuous-cycle.html

    The balance of power in the job market is shifting slowly toward employees from employers.

    Bob Funk sees it firsthand from his position as chief executive officer of staffing agency Express Employment Professionals.

    “We’re short of people in a number of cities,” he said.

    So he’s changing the focus of his $2.5 billion, Oklahoma City-based business. Instead of concentrating on finding jobs for those who want them, Express Employment is putting more effort into finding workers for companies that need them.

    “We’re back in the recruiting market again,” Funk said.


  5. Interesting story about Kinder Morgan getting away from the MLP structure:

    http://dealbook.nytimes.com/2014/08/10/renouncing-complexity-kinder-morgan-pipeline-group-makes-plans-to-reorganize/

    The deal exposes one of the significant challenges M.L.P.s face: the need to constantly acquire new assets to continue increasing the dividends they pay investors.

    Smaller M.L.P.s continually buy new assets to satiate this need. But Kinder Morgan’s related companies had grown so large that it was difficult to find suitable targets. Furthermore, because the companies were paying out such large dividends, they were hard pressed to comfortably finance big transactions.[...]

    Mr. Kinder said he expected the new company to pay an annual dividend of $2 per share in 2015, a 16 percent increase over the anticipated payout this year. The company also projects it can increase its dividend by about 10 percent a year through 2020, which would make it a rare large cap company with a big and fast-growing dividend.

    Growing dividend 10%/year would warrant a look!


  6. Jen Sorensen


  7. Ah, back in the other good part of the US, Home!  What a trip for the past few weeks….Kansas is a disaster, Iowa has its kooks, but NYC was friendly….that was a change!  Last time I was in NYC, people were as rude as can be.  Seems they have been humbled.

    IF I missed anything, fire away.


  8. GALT – surprise


  9. Wow, KMI is popping almost 20% which I guess is due to the announcement mentioned in an earlier post? Too late or wait for excitement to die down and try legging in? Was PE of 30 before this pop.


  10. Good morning!  

    It doesn't matter where we start, just where we finish – keep that in mind today. 

    Apps/StJ – I agree, I don't even bother looking unless one is specifically recommended to me.  They need free samples that you can use for a day.  Maybe we make an App of the Month Club, where we make arrangements for Members to try 3-5 apps for a week at no charge each month.  The club would get a percentage from Apps sold and we'd have a staff curating and testing apps (and we could maintain a sort of Top App service as well).  

    German order drop looks scary. 

    KMI/StJ – People seem to like the shift.  

    Great cartoon!  

    Welcome back Pharm!  I was in Boston, love that city.  


  11. GLD – Sept 128 calls for 1.34.  Playing the bounce up to 1350 area.


  12. Phil:Good morning


  13. IYT gapped to $146 on the button.  

    Dow topped at 16,600 too.  

    /NQ tapped 3,900 on the button, /TF 1,135, /ES 1,935 – very botty looking action.  

    Dollar 81.50 so no effect, oil $98.11, not impressive, gold $1,310, silver $19.98, copper $3.18, Nat gas rejected at $4, now $3.98 and gasoline $2.76 won't be impressing anyone until it's over $2.80.  Meanwhile, why is it still $3.80 at the pump?  Think what a ridiculous spread that is since gas has, in the past been under $1 a gallon so it certainly doesn't cost $1 to make, does it?  Even allowing for inflation in the past 10 years, no way can a spread of $1 between wholesale and the pump be justified.  


  14. The way TSLA has been popping in the last week, I think a secondary or some kind of cash influx is going to be announced on the company soon.


  15. Good article on Information in the 21st Century.  

    Barry's article on why long-term investors come out ahead of short-term traders "No Matter What."  

     If We Release a Small Fraction of Arctic Carbon, ‘We’re Fucked’ (Vice)

    Wall Street Didn’t Win — Financial Reform Is Working (Time)

    Gladwell: The Gangster’s Guide to Upward Mobility (New Yorker)

    Fighters abandoning al-Qaeda affiliates to join Islamic State, U.S. officials say

    Everything Is Coming Apart In Europe

    Jeff Gundlach Warned Us Rates Could Fall, And They Did — Here's What He's Saying Now


  16. Phil – Winston started a good topic with his LEAPS strangle especially around indices. You mentioned that it might make a good topic for a webinar. Good refresher on our old FAS Money which turned out some very good performances.


  17. Major Earnings for the Upcoming Week:

    Monday:

    A.M–DF, GOGO, PCLN, SYY

    P.M. – AMBC, APP, CZR, NUAN, RAX, VTR

     

    Tuesday:

    A.M. – CTIB, TW, VAL

    P.M.-  CREE, FOSL, FTD, JDSU, KING, SYNC

     

    Wednesday:

    A.M. – CSIQ, DE, KATE, M, PF, SNE

    P.M. – BGG, CSCO, NTAP, RMAX, SLW

     

    Thursday:

    A.M. – MANU, PRGO, PDO, RRGB, WMT

    P.M. – A, ADSK, AMAT, CEP, DDS, JCP, JWN

     

    Friday:

    A.M. – EL

     

    Economic Releases (8/11 – 8/15):

    Monday:

    N/A

                                                                                                                                                                                    

    Tuesday:

    6:30 am CT – NFIB Small Business Optimism Index

    6:45 am CT – GS Store Sales

    8:45 am CT– JOLTS

    12:00 pm CT – 3-Year Note Auction Results

    1:00 pm CT – Treasury Budget

                                                                                                                                                                                                                  

    Wednesday:

    6:00 am CT – MBA Purchase Applications

    7:30 am CT – Retail Sales

    8:05 am CT – Fed’s Dudley Speaks

    8:20 am CT – Fed’s Rosengren Speaks

    9:00 am CT – Business Inventories

    9:30 am CT – Oil Inventories

    12:00 pm CT – 10-Year Note Auction Results

     

    Thursday:

    7:30 am CT– Weekly Jobless Claims

    7:30 am CT– Import & Export Prices

    9:30 am CT – Natural Gas Inventories

    12:00 pm CT – 30-Year Bond Auction Results

                                                                                                                                                                                                            

    Friday:

    7:30 am CT – PPI

    7:30 am CT – Empire State Mfg. Survey

    8:00 am CT – Treasury Intl. Capital

    8:15 am CT– Industrial Production

    8:55 am CT– Consumer Sentiment

    9:45 am CT – Fed’s Kocherlakota Speaks


  18. I wasn't planning on it for a webinar but we can certainly discuss it on a slow day like today if people are interested.  Let's keep in mind the Leap Strangle is simply a way to satisfy margin-hungry accounts that require short calls and puts to be covered, it's certainly not a strategy I prefer since it simply ties up more cash over the same period of time.  If you have a margin account, that's just silly.  

    In the DIS example, rather than buying the $55 calls and the $95 puts for net $47.59 with $7.59 in premium, you can simply back-stop the sale of the short Sept $87.50 puts and calls for $4 with the purchase of the 2016 $95 calls at $6.40 and $75 puts at $5.70 which is net $8.10 with just 40 out of 521 days used so 10 sales of $4 = $40 vs $8.10 laid out has a very strong probability of turning a profit.  

    The margin on each side of the trade is $7.50 and $12.50 so $20 in margin is still less than laying out $47.59 and all it takes is faith in the rolling process to feel as safe with those as you would with the strangle.

    Speaking of the Butterfly Portfolio, before we lose the VIX again, let's go for OIH ($54.35) and we'll take 10 2016 $60 calls at $2.70 and 10 2016 $48 puts at $3.60 for $6,300 and we'll sell 10 Sept $53 puts for $1 and 10 Sept $55 calls for $1.10 ($2,100) which is 33% back in pocket on our first sale.  


  19. Webinar / Phil – It's a good point and highlighting the differences would a good teaching moment.


  20. OIH / Phil – 1 standard deviation for OIH on the September expiration is 50.79/58.45


  21. OIH/StJ – That's why the options still pay well.  With our Butteflies, it's not so much where they will be in Sept but whether we are comfortable that the outside of our range covers the 18-month move because, during those 18 months, we should be able to sell $20 in premium so, even if we get blown out on one side and can't sell it again and only can sell the other side for $10 in premium, we STILL have enough money to cover the spread with a small profit.  

    What I'm trying to do is teach people NOT to focus on short-term moves.  Even a stock like CZR, which blew us out, still ended up with a profits, simply because the odds were so much in our favor to start – like OIH!  

    CZR
    10 CZR 2014 20-SEP 16.00 CALL SC $ 300.00 7/16/2014 $ 1,650.00 8/6/2014 21
    $ 1,350.00 81.8 %
    10 CZR 2014 20-SEP 20.00 PUT SP $ 7,100.00 5/14/2014 $ 2,650.00 8/6/2014 84
    $ -4,450.00 -167.9 %
    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 $ 5,000.00 8/6/2014 128
    $ 1,300.00 35.1 %
    10 CZR 2016 15-JAN 22.50 CALL LC $ 4,700.00 3/31/2014 $ 700.00 8/6/2014 128
    $ -4,000.00 -85.1 %
    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
    $ 5,290.00 16.7 %

    The theory is extremely sound, we even called the bottom as we closed CZR and sold puts in the LTP to take advantage of the dip there – even though it was no longer appealing as a butterfly sale.  Our only other loser in the Butterflies is BTU and that is because we broke the butterfly when we made a bottom call (still should work out):

    BTU
    10 BTU 2014 20-SEP 17.00 CALL SC $ 1,080.00 5/15/2014 $ 2,720.00 6/19/2014 35
    $ 1,640.00 60.3 %
    10 BTU 2014 17-MAY 16.00 CALL SC $ 3,100.00 4/17/2014 $ 1,250.00 5/14/2014 27
    $ -1,850.00 -148.0 %
    10 BTU 2015 17-JAN 18.00 PUT SP $ 2,810.00 3/25/2014 $ 3,400.00   139
    $ 590.00 17.4 %
    10 BTU 2014 19-APR 16.00 CALL SC $ 900.00 3/25/2014 $ 700.00 4/17/2014 23
    $ -200.00 -28.6 %
    10 BTU 2016 15-JAN 13.00 PUT LP $ 2,000.00 3/25/2014 $ 1,300.00   139
    $ -700.00 -35.0 %
    10 BTU 2016 15-JAN 20.00 CALL LC $ 2,000.00 3/25/2014 $ 1,120.00   139
    $ -880.00 -44.0 %
    Total Gain/Loss for BTU
    $ -1,400.00 -11.8 %

    Unlike CZR, we don't think BTU can go BK, so we're more comfortable with the aggressive long at the "bottom" than we would have been sticking with CZR with no short calls and short put sales.  


  22. Wow, PCLN hit $1,240 after hours on Friday and topped out at $1,330 at the open – talk about a crazy MoMo!  

    TZA opened Friday at $17, now $15.50.  


  23. i think pcln was at 1240 pre market..

     

    FU TSLA!!!!

    FU NFLX!!!!


  24. Pharm. Welcome back.

    What’s your take on PLX recently?
    It has been selling off for a while now but I can’t seem to find a reason.

    As far as I can see they’re recent gaucher drug was recently approved in Australia and Canada?

    the only thing I can think of is I know they are based in Israel so perhaps the whole situation over there has been anchoring them lower.

    I own a tiny bit of them as well as some $5 short puts that I don’t mind being assigned. Was actually contemplating selling some $3 puts in case once things calm down (relatively) in Israel it should eventually come back up, and to reduce my cost basis.

    any updated on PLX? Has anything fundamentally changed that I’m missing? What’s your current take.

    thanks in advance.


  25. Phil: Your opinion on the KMP surge…I sold this am to lock in a $13K profit but want to re-enter it for my IRA. At what price point would you be interested?

    Thanks,


  26. Two financial sector downgrades from Morgan Stanley

    10:38 AM ET · RGA

    • Alongside its upgrade of struggling Genworth and CNO Financial, Morgan Stanley downgrades a couple of better-performing names, cutting Reinsurance Group of America (RGA +0.1%) to Underweight from Equal Weight, and Ameriprise FInancial (AMP +1.1%) to Equal Weight from Overweight.
    • Previously: Morgan Stanley upgrades two struggling financial names


  27. Morgan Stanley upgrades two struggling financial names

    10:34 AM ET · GNW


  28. Gogo -9.6% on light EBITDA outlook

    10:31 AM ET · GOGO

    • GOGO is reiterating full-year guidance for revenue of $400M-$422M (consensus is at $409.9M), and cash capex of $105M-$125M. But it now expects full-year adjusted EBITDA to be “toward the low end” of a prior $8M-$18M range due to higher spending to obtain certificates (STCs) for international service.
    • Service revenue +28% Y/Y in Q2 to $79.2M (32% growth was seen in Q1), equipment revenue +17% to $20.4M.
    • North American commercial aviation revenue +25% Y/Y to $62.1M. Average revenue per aircraft (ARPA) +18% to $9,994, thanks to a 14% increase in take rate to 6.7%. Aircraft online only rose 4% to 2,058.
    • Business aviation revenue +26% to $37.1M. ATG systems online +43% to 1,684, satellite systems online +3% to 5,105.
    • 19 international commercial aircraft were online, up from 5 at the end of Q1. International service revenue was only $259K.
    • NA commercial had a $6.4M op. profit, business a $15.5M op. profit, and international commercial an $18.8M op. loss.
    • Q2 results, PR


  29. Barron’s: Terex poised for growth as big construction projects get underway

    10:28 AM ET · TEX

    • Terex (TEX +3.4%) shares could rise up to 30% over the next year, according to a weekend report in Barron’s, which cited four major factors offering strong investment potential.
    • A pickup in big construction jobs – office buildings, hospitals, schools, etc. – which tends to lag behind a home-building recovery by about two years, now seems afoot, which should be good news for TEX and other heavy-metal specialists.
    • TEX is poised to benefit from efficiency moves; years of acquisitions have left it with, for example, more than 70 accounting departments worldwide, a number management says it can reduce to eight.
    • TEX also has amassed a full suite of automated products for stacking and unloading cargo on giant ships – a good business to be in, because the Panama Canal is getting a major capacity increase over the next two years.
    • Finally, TEX shares are cheap, trading at 13.8x this year’s earnings forecast vs. Caterpillar (NYSE:CAT), which trades at 16.4x.


  30. The USPS burns through another $2B

    10:25 AM ET · FDX

    • The USPS reports a loss of $2B in FQ3, up $740M Y/Y and $100M Q/Q.
    • Workers comp claims dragged down losses during the quarter.
    • Though USPS total volume was down slightly, a shift in mix helped bumped up revenue to $16.5B.
    • Legislation on the future of the postal agency is mired down in Congress with lawmakers seemingly unwilling to slash jobs in their districts.
    • Related stocks: FDX, UPS, SMTP


  31. Auto watch: Solid demand in luxury segment

    10:12 AM ET · GM


  32. Freeport McMoRan upgraded to Buy at Argus

    09:58 AM ET · FCX

    • Freeport McMoRan (FCX +1.2%) is upgraded to Buy from Hold with a $42 price target at Argus, based on reduced copper mining capacity, expectations for stronger copper demand in the near term, and the stock’s favorable valuation.
    • The firm expects increased demand for copper to boost pricing in H2; while this likely will drive a new round of capacity increases, it expects the process to take at least a year, allowing FCX to benefit from higher copper prices in the near term.


  33. Yingli strikes 31.6MW Japanese deal

    09:54 AM ET · YGE

    • Yingli (YGE +1.2%) is supplying 31.6MW of solar modules to Spain’s Gestamp Solar for a project in Daigo, Japan. The modules are expected to be shipped from October to February, and the project connected to the grid in Q2 2015.
    • Yingli announced a 32MW Japanese deal on July 23. Its shipments to Japan rose over 50% Q/Q in Q1.


  34. Putin praises Exxon as Arctic drilling starts

    09:45 AM ET · XOM

    • Vladimir Putin lauded Russia’s “old and reliable partner” Exxon Mobil (NYSE:XOM) this weekend in a ceremony launching the start of drilling the country’s northernmost oil well.
    • Putin, XOM Russian chief Glenn Waller and Rosneft (OTC:RNFTF) CEO Igor Sechin, undeterred by the crisis in U.S.-Russian relations, together welcomed the start of the Arctic well in the first step in a quest for new energy resources to help maintain oil production near a post-Soviet high of more than 10M bbl/day.
    • Universitetskaya is the first of as many as 40 offshore wells Rosneft plans by 2018 to test the potential of the unexplored Arctic Ocean.


  35. At the open

    09:31 AM ET

    • Dow +0.26% to 16,597.60. S&P +0.32% to 1,937.80. Nasdaq 0.43% to 4,389.37.
    • Treasurys: 30-year +0.09%. 10-yr +0.04%. 5-yr +0.05%.
    • Commodities: Crude +0.24% to $97.88. Gold -0.11% to $1,309.60.
    • Currencies: Euro -0.17% vs. dollar. Yen +0.07%. Pound -0.05%.


  36. Trouble in Taiwan weighs on Melco Crown

    09:26 AM ET · MPEL

    • The Taipei District Prosecutors Office indictment against Melco Crown (NASDAQ:MPEL) accuses the company of funneling hundreds of millions of dollars between its properties in Macau and Taiwan on behalf of high-rollers against local regulations, according to the Sydney Morning Herald.
    • Four present or former Melco Crown employees have been charged.
    • The big picture: Crackdown on money transfers in China could pressure growth in the VIP segment as junkets become harder to finance.
    • MPEL -1.7% premarket after falling 7.2% late last week.


  37. Stocks set for sharply higher open as geopolitics subsides

    09:25 AM ET

    • Stocks look for a strong open following a ceasefire in Gaza and a request for a ceasefire from pro-Russian separatists in eastern Ukraine; S&P and Dow +0.5%, Nasdaq +0.6%.
    • European and Asian markets are broadly higher as geopolitical concerns subside a bit; Japan’s Nikkei rose 2.4%, climbing off two-month lows.
    • Fed Vice Chairman Stanley Fischer said this morning that rebounds across advanced economies have been disappointing, leading to reduced long-term expectations for growth potential in the U.S.
    • Quarterly earnings are winding down: Priceline -1% after reporting a bottom-line beat but disappointing guidance, while Dean Foods -9% in reaction to below-consensus earnings and cautious guidance.
    • Kinder Morgan +18% and Kinder Morgan Partners +24% premarket on news of the mega-deal to consolidate all Kinder Morgan companies, including Kinder Morgan Management and El Paso Pipeline Partners.
    • Treasurys recover from early losses, and the benchmark 10-year note is now flat with its yield at 2.42%.


  38. Capstone Turbine receives orders for 25 microturbines

    09:18 AM ET · CPST

    • Capstone Turbine (NASDAQ:CPST) has announced new orders for 25 Capstone C65 microturbines, totaling 1.6MW.
    • The microturbines will be used in various commercial industrial combined heat and power and oil and gas applications in the mid-atlantic U.S.
    • CPST +4.2% premarket


  39. Analysis: Narrower focus could boost Procter & Gamble

    09:02 AM ET · PG

    • Procter & Gamble’s (NYSE:PG) plan to shed close to 100 brands is based on its belief that it can grow profits through scale and synergies with a slimmed-down portfolio of businesses, according to analysts.
    • Smaller brands which might be divested or closed by P&G include Ausonia, Discreet, Blend-a-Dent, Braun Oral-B, or Rindex.


  40. Keystone carbon pollution could be more than estimated, study says

    08:58 AM ET · TRP

    • The Keystone XL pipeline (NYSE:TRP) could produce 4x more global warming pollution than estimated earlier this year by the U.S. State Department, according to a new study from scientists at the Stockholm Environment Institute.
    • The researchers estimate the proposed pipeline, which would carry oil from tar sands in western Canada to refineries on the Gulf coast, would increase world greenhouse gas emissions by as much as 121M/year of carbon dioxide; the State Department had figured that Keystone XL would increase world carbon dioxide emissions by no more than 30M tons.
    • The American Petroleum Institute says the study is irrelevant because regardless of the pipeline, the tar sands will be developed and oil will be shipped by railroad if not by pipeline.


  41. Ameritrade client trades up 9% Y/Y in July

    08:54 AM ET · AMTD

    • July AMTD activity included 405K average client trades per day, up 8% from June and 9% from a year ago. $644.4B in total client assets down 1% from June and up 18% from a year ago.
    • Average spread-based balances of $91.7B up 4% Y/Y, and average fee-based balances of $143.5B up 19%.
    • Source: Press Release


  42. Tata Motors reports FQ1 profit

    08:52 AM ET · TTM

    • Tata Motors (NYSE:TTM): FQ1 Net income of ?53.9B.
    • Revenue of ?646.8B (+38.2% Y/Y).
    • Units sold 110.6K (-28.3% Y/Y)
    • Shares +5.3% PM.
    • Press Release


  43. Kinder Morgan +20%, KMP +27% premarket on merger news

    08:37 AM ET · KMI

    • KInder Morgan (NYSE:KMI) +20.1%, Kinder Morgan Partners (NYSE:KMP) +27.1%, Kinder Morgan Management (NYSE:KMR) +34.6%, El Paso Partners (NYSE:EPB) +30.5% premarket on news of the consolidation of the Kinder companies that will create the largest energy infrastructure company in North America, with an 80K-mile network of pipes that together would be long enough to circle the Earth three times.
    • Kinder appears to have solved its biggest problem in one stunning swoop: how to maintain growth; to increase distributions by a projected 5%-6%, Kinder would have to put $3B-$4B to work each year on attractive projects, a daunting task for any firm.
    • “This is a very simple and elegant solution to a problem of complexity,” says Baird analyst Ethan Bellamy; he does not think other MLPs will follow in Kinder’s footsteps because other companies still benefit from the financial structure as a way to attract investment.
    • ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, ENY, MLPN, MLPG, EMLP, MLPS, MLPX, MLPY, MLPJ, AMU, YMLI, ATMP, ZMLP, MLPW, IMLP, ENFR, MLPC


  44. Profit margins crumbling at Dean Foods

    08:22 AM ET · DF

    • Dean Foods (NYSE:DF) reports a slide in profit in Q2 amid what it calls the “most difficult” operating environment in the company’s history.
    • Though Dean Foods picked up 20 bps of market share to 35.9%, overall milk volume was down.
    • Due to the tough outlook on the dairy commodity market, Dean Foods lowers Q3 EPS guidance dramatically to -$0.05 to -$0.15 vs. $0.26 consensus.
    • DF is getting punished in premarket trading, down 9.9%.


  45. Nikkei welcomes report of higher GPIF investment

    08:19 AM ET · DXJ

    • Also helping to boost the Nikkei to a 2.4% bounce overnight following a 3% plunge on Friday was a report on the Government Pension Investment Fund temporarily removing a cap on domestic stock investment.
    • The action enables the massive GPIF to allocate more funds to Japanese stocks ahead of the upcoming official review at which it’s likely to be allowed to raise its goal for equities to 20% of the portfolio from the current 12%. “[It's] a surprise for the market in that they are going to increase their stock holdings sooner,” says a local equities strategist.
    • Previously: Nikkei posts largest daily percentage gain since mid-April
    • ETFs: DXJ, EWJ, NKY, DBJP, EZJ, EWV, JPNL, ITF, JPP, JPNS, HEWJ, FJP


  46. SEC probe lingers over DreamWorks Animation

    08:11 AM ET · DWA

    • A SEC probe into DreamWorks Animation (NASDAQ:DWA) over the slow timing of its write-off on Turbo continues to linger over the company.
    • On top of the government investigation, several class action shareholders lawsuits are off and running.
    • Drawing some notice are the stock sales by CEO Jeffrey Katzenberg last October and November – several months after Turbo‘s release, but before the writedown announcement.


  47. AngloGold Ashanti loss narrows as production rises

    07:56 AM ET · AU

    • AngloGold Ashanti (NYSE:AU) reports a Q2 loss of $14M, narrowing from a $3.08B loss in the year-ago quarter.
    • Normalized adjusted Q2 earnings of US$0.19/share, compared with EPS of US$0.02 in the year-ago quarter, with revenues inching higher to $1.36B from $1.3B a year earlier.
    • Q2 gold output rose 17% Y/Y to 1.1M oz., with higher production at its South African, other African and Australian mines more than offsetting a decline at its operations in Brazil; cash costs were $836/oz. vs. $898/oz. in Q2 2013.
    • South Africa region posted production at 319K oz., up 4% Y/Y, at an all-in sustaining cost of $1,064/oz, down 12%; international operations posted a 24% rise in gold production to 779K oz. at an all-in sustaining cost of $1,033/oz, down 19% Y/Y.
    • AU, which says it plans to grow production this year for the first time in almost a decade, foresees current quarter production of 1.06M-1.09M oz. at a cash cost of $850-$890/oz.


  48. Restaurant chains post supplier data in China

    07:49 AM ET · MCD

    • A number of restaurant chains in China have posted supplier information on their local websites in response to the concerns of consumers.
    • The action from McDonald’s (NYSE:MCD), Burger King (NYSE:BKW), Carl’s Jr., and Yum Brands (NYSE:YUM) is in response to a request from Shanghai’s Municipal Food and Drug Administration.


  49. Tata Motors jumps higher after strong FQ1 earnings report

    07:28 AM ET · TM

    • Tata Motor (NYSE:TM) reports sales rose 36% to 647.57B rupees ($10.57B) in Q1 of FY15.
    • The automaker saw a huge jump in profit to over 53.98B rupees ($900M) off of stronger demand trends.
    • Global sales for Jaguar Land Rover vehicles helped make up for soft sales for the Tata brand in India.
    • Q1 earnings release (.pdf)
    • TTM +9.8% premarket


  50. India to begin $10B divestment plan for state-run companies

    07:25 AM ET · SAUKF

    • The new Indian government led by Narendra Modi is now scheduling the start of its $10B divestment plan of state-run companies for next month. It will begin with a 5% stake in the Steel Authority of India (OTC:SAUKF), the country’s biggest steel group by volume.
    • Divestment of 5% stakes in Oil and Natural Gas Corporation and Coal India will raise a much larger sum around $5B.
    • The Indian government plans to plug the country’s budget deficit with the help of such sales.
    • Investor roadshows will begin in London, New York, Hong Kong and Singapore in September with the aim of raising an estimated $300M-$330M.
    • ETFs: EPI, SCIF, INDY, PIN, INDL, INP, INXX, INDA, SCIN, SMIN, INCO


  51. Priceline reports 34% total bookings increase

    07:19 AM ET · PCLN

    • Priceline (NASDAQ:PCLN) reports Q2 travel bookings rose 34% to $13.5B.
    • The global accommodation business booked 90M rooms, up 29% Y/Y.
    • The company sees Q3 EPS of $19.60-$21.10 vs. consensus $21.26.
    • Press release (.pdf)
    • PCLN -0.1% premarket


  52. Fiat-Chrysler merger in a waiting game

    07:06 AM ET · FIATY

    • The planned merger of Fiat (OTCPK:FIATY) and Chrysler into a new entity called Fiat Chrysler Automotive will push forward only if Fiat has to spend €500M ($696M) or less to buy out shareholders not wanting to participate.
    • ISI Group estimates it would only take 5.18% of Fiat shareholders to take the buyout deal at 7.727 euros per share to reach the €500M level.
    • A tally on the number of shareholders exercising their buyout rights should be known by August 25.


  53. Strangles / Phil – Then for Jan 16, 1 SD on OIH gets you a 42/71 strangle…

    The example of CZR and BTU are great but reinforce my opinion to stick with indices. Premium is better with individual stocks but that's for a reason – they are more susceptible to big moves on news.


  54. Amazon halts some Disney movie preorders

    02:55 AM ET · AMZN

    • Amazon (NASDAQ:AMZN) has halted some preorders of Disney (NYSE:DIS) movies, such as Maleficent and Captain America: The Winter Soldier, in what appears to be yet another contract disagreement.
    • A similar tactic has been in use on the Hachette Book Group (OTCPK:LGDDF) for the past four months. Amazon has blocked customers’ preorders and delayed shipments of the publisher due to a dispute over e-book pricing.


  55. Glaxo to begin clinical trial of Ebola vaccine

    02:23 AM ET · GSK

    • GlaxoSmithKline (NYSE:GSK) is set to begin a clinical trial of an experimental vaccine against Ebola, which is being co-developed with U.S. scientists.
    • The experimental vaccine has already produced promising results in animal studies, and with an approval from the FDA, it will enter initial Phase I testing in humans.
    • Still, the new vaccine will not be ready for widespread deployment before 2015 – even assuming it works as well as hoped.


  56. Kinder Morgan scrapping MLP structure in $44B deal

    Yesterday, 09:37 PM ET · KMI

    • Consolidating its oil-and-gas pipeline empire into a single company, Kinder Morgan (NYSE:KMI) will purchase Kinder Morgan Energy Partners (NYSE:KMP), Kinder Morgan Management (NYSE:KMR), and El Paso Pipeline Partners (NYSE:EPB).
    • The MLP structure is limiting, says Richard Kinder. Combining the four companies into one unit “will allow us to further expand the reach of the kind of projects we can do.”
    • KMP unitholders will receive 2.1931 KMI shares and $10.77 in cash for each KMP unit, or $89.98, a 12% premium to Friday’s close (based on KMI’s Friday close).
    • KMR shareholders will receive 2.4849 KMI share for each share of KMR, or $89.75, a 16.5% premium to Friday’s close (based on KMI’s Friday close).
    • EPB unitholders will receive .9451 KMI shares and $4.65 in cash for each EPB unit, or $38.79, a 15.4% premium to Friday’s close (based on KMI’s Friday close).
    • In conjunction with the deal, KMI expects a $2 annual dividend in 2015, a 16% boost to 2014′s anticipated payout. The dividend is expected to grow about 10% per year through 2020.
    • A conference call is set for Monday morning at 8:30 ET.
    • Press release


  57. Tesla Motors gearing up for all-time high run after DB upgrade • 11:04 AM

    Tesla Motors (TSLA +5.4%) trades higher after Deutsche Bank warms up to the EV automaker's prospects.

    Nothing earth-shattering from DB, just optimism that Tesla will reach its higher production levels and stretch out margins with scale.

    Shares are rated a Buy by DB with a price target of $310.

    TSLA is only $3.50 per share away from an all-time high.


  58. Box office: Improved trend as ‘Ninja Turtles’ and ‘Guardians’ run rampant

    Yesterday, 09:37 PM ET · DIS

    • The solid trend continues for the film industry as weekend revenue for the top 12 movies rose 22% compared to the year-ago period to $173.6M. The month is tracking for a +$900M total, and could even topple $1B which would be the first time the level has ever been achieved in August.
    • Guardians of the Galaxy passed the $300M mark as the Marvel (NYSE:DIS) movie opened in dozens of countries over the weekend. The box office cume will go even higher after the film debuts in China and Japan.
    • Paramount Pictures (VIA, VIAB) had a stellar weekend after Teenage Mutant Ninja Turtles hauled in $63.5M during its run at 3,845 U.S. location and $93.7M globally. Twenty-somethings came out in force due to the nostalgia factor, according to exit surveys. The studio has already announced that it will back a sequel for 2016.
    • Related stocks: RGC, AMC, CNK, IMAX, RLD, SNE, LGF,CMCSA, TWX, MCS, RDI, CKEC.


  59. Facebook sees backlash over new Messenger app requirement

    Yesterday, 04:34 PM ET · FB

    • The latest iOS version of Facebook Messenger, released after Facebook (NASDAQ:FB) began requiring users to download a standalone Messenger app to send IMs to Facebook friends, has a rating of just 1/5 stars on the App Store. Over its entire lifetime, the app still has a rating of 4/5 stars.
    • Both Twitter and the reviews sections for the App Store/Google Play have been flooded with complaints about Facebook’s requirement. “I absolutely refuse to download another app just so I can chat on Facebook with my phone,” writes one irate reviewer, echoing a common sentiment. Also: revised privacy terms have sparked some criticism.
    • Mark Zuckerberg has argued using a standalone Messenger app yields a better experience than using Messenger via the core Facebook app. Requiring a separate messaging app is part of a broader Facebook effort to provide a slew of apps optimized for specific services, and in doing so avoid being just one icon on an iOS/Android home screen.
    • Zuck has also suggested Facebook plans to add payments support to Messenger, which now has 200M+ MAUs and is run by ex-PayPal chief David Marcus. Facebook was recently reported to be thinking of adding support for Uber’s car-hailing service to Messenger.
    • Meanwhile, Facebook’s new Slingshot app, a would-be Snapchat rival that requires recipients of an ephemeral photo/video to reply with one of their own, has plummeted on App Store download charts. A few other recent Facebook products have met similar fates.


  60. Kurdistan says oil production remains unchanged despite militant advance

    Yesterday, 07:27 AM ET · USO

    • The Kurdish Ministry of Natural Resources says that oil production in Iraqi Kurdistan remains unaffected despite the advance of Islamic State militants.
    • “The enemy has not been able to target oil operations. Oil production in the region remains unaffected and is being delivered to both the domestic and export markets,” says the ministry. “The Kurdistan Regional Government is expecting that the producing companies will ramp up production in the coming weeks as ongoing export infrastructure improvements come online as planned.”
    • However, many companies have started to evacuate staff and suspend operations at some fields in the region, including Chevron, Afren Oryx Petroleum and Genel Energy.
    • Kurdistan describes the firms’ moves as “precautionary measures,” and warned companies not to take any steps without close coordination with the Ministry of Natural Resources.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DWTI, DNO, SZO, OLO, OLEM, TWTI


  61. Russia considering price limits for domestic food producers

    Yesterday, 06:46 AM ET · RSX

    • After banning half of its agricultural imports from the West this past week, Russia is now considering a price control agreement with domestic food producers to avoid speculative price hikes that could affect inflation.
    • The International Trade Center, a joint venture between the U.N. and WTO, states that Russia imported $17.2B of food from the countries targeted by the ban, of which $9.2B was in the affected categories.
    • Agriculture Minister Nikolai Fyodorov announced that the ban will cause a short-term spike in inflation, but said he saw no danger in the medium or long term due to new future substitutes.
    • ETFs: RSX, RUSL, RSXJ, ERUS, RUSS, RBL, RUDR


  62. Programmatic ads pose challenge for Web publishers

    Sat, Aug 9 · YHOO

    • “Many [online] advertisers now care more about who sees their ads than where they appear,” writes the Columbia Journalism Review‘s Steven Waldman in a column about the threat posed to Web publishers by programmatic (automated) ad buying.
    • Whereas a drug developer might have previously bought ads on popular health sites to reach potential customers, it can now use programmatic campaigns to reach them across the Web, aided by cookies that track when a user has shown an interest in particular drugs (or something related to them).
    • The upshot? Advertisers are less likely to pay a big premium for inventory on high-profile sites. Waldman: “A marketer can now reach ‘New York Times readers’ without ever actually advertising in The New York Times, and for less money.”
    • Publishers are responding in part by embracing native ad formats such as sponsored content. But as Waldman observes, a site’s image can get hurt when users conflate sponsored and organic material. “Publishers have ended up trading the one thing they had left—their credibility with readers—for a few scraps of CPM.”
    • Yahoo (NASDAQ:YHOO), increasingly using native ads to complement traditional display ads, saw a 24% Y/Y drop in display ad prices in Q2 to go with a 24% increase in ads sold. AOL, both a publisher and a programmatic ad tech provider, fared a little better in Q2.
    • eMarketer expects U.S. real-time bidding ad spend (a key part of the programmatic market) to rise to $9B in 2017 from $3.4B in 2013. At the same time, it observes many advertisers are treading cautiously for now.
    • Other Web publishers: IACI, DMD, TTGT, GKNT, WBMD
    • Ad tech firms with programmatic exposure: CRTO, FUEL, RUBI, MRIN, TRMR, YUME, TUBE


  63. Legal battle over SpongeBob SquarePants rights

    Sat, Aug 9 · VIA

    • Viacom (VIA, VIAB) issues a demand in federal court that its contact with Cablevision (NYSE:CVC) be rescinded.
    • The legal filing is in response to an anti-trust lawsuit filed by Cablevision against Viacom.
    • The crux of the dispute between the media companies is over whether Viacom tried to muscle Cablevision into including smaller networks with its well-known properties in bundled packages.
    • Cablevision wants the court to force Viacom into licensing MTV, Comedy Central, and Nickelodeon without non-core networks – while Viacom is looking for relief that would see its content pulled from Cablevision.


  64. Barron’s hangs a “For Sale” sign on Zillow and Trulia

    Sat, Aug 9 · Z

    • The stocks of both Zillow (NASDAQ:Z) and Trulia (NYSE:TRLA) have already fallen about 15% since their merger deal – dubbed Godzulia by the bulls – was announced, writes Bill Alpert, perhaps reflecting worry their “heft might be computer-generated imagery.”
    • Though the market cap of the companies nearly equals the marketing budget for all U.S. realtors, they have yet to monetize much of their hefty Web traffic, and while bulls like to think their combo will make for an advertising “must buy,” the two have both been quietly offering deep discount to chains like Realogy (NYSE:RLGY), suggesting any thesis about pricing power may need to be rethought. “We have the audience,” says Zillow boss Spencer Rascoff in response. “Eventually, the advertising dollars will follow the audience.”
    • There’s no doubting impressive growth in traffic. From a few million monthly visitors in 2008, Zillow’s traffic rose to 25M browsing from desktops and another 28M from mobile devices in June. Revenues have grown nicely as well, but not at as fast a pace as traffic, and earnings have been even harder to come by – at least if you count expenses the way GAAP does. “Clearly, there’s still work to be done because Zillow and Trulia haven’t proved yet that they can grow their Web traffic and ad sales profitably.”


  65. Utility stocks, July’s biggest loser, lose their sizzle

    Sat, Aug 9 · EXC

    • Investors who had flocked to utility stocks now may be wondering what went wrong, after the sector was the S&P’s worst performer in July.
    • Fears of rising interest rates have recently sent dividend-paying stocks and high-yield junk bonds tumbling; utility stocks also have been hurt by the power sector’s growing exposure to volatile natural gas prices, which have dropped ~19% since mid-June.
    • Some analysts think dividend growth among utilities could slow or even stop, with power demand falling and utilities being forced to spend record amounts on replacing and upgrading aging plants and meeting stricter emission standards; Exelon (NYSE:EXC) and FirstEnergy (NYSE:FE) are big utilities that have cut dividends this year.
    • Utilities that auction the power they generate – and are most exposed to moves in gas prices – have fallen the most; NRG and EXC have lost 20% and 13%, respectively, since the end of June.
    • Regulated utilities such as Southern Co. (NYSE:SO) and Duke Energy (NYSE:DUK), whose rate changes are more closely controlled, haven’t been hit as hard.
    • ETFs: XLU, IDU, VPU, NLR, JXI, NUCL, UPW, RYU, DBU, IPU, FUTY, FXU, SDP, UTLT


  66. Street likes Nvidia’s diversification; GPU sales compared with AMD’s

    Fri, Aug 8 · NVDA

    • Nvidia (NVDA +8.8%) is “migrating from [being] a consumer-orientated company towards one that focuses on stickier and more profitable markets, such as autos, enterprise/datacenter, and HPC,” says Needham’s Rajvindra Gill, upgrading shares to Buy following the GPU giant’s FQ2 report.
    • Stifel’s Kevin Cassidy offers a similar thesis, and also predicts PC GPU sales will get a lift from major 2H game launches.
    • Morgan Stanley, Deutsche, and others note Nvidia’s solid FQ3 guidance comes even though AMD reported a Q2 decline in GPU shipments to graphics card channels, and offered light Q3 guidance – Nvidia sold off in response.
    • Of note: AMD blamed the Q2 decline on weaker demand from cryptocurrency miners, a niche it has had more exposure to than Nvidia.
    • Nonetheless, MS and Deutsche remain cautious due to valuation. After backing out net cash, Nvidia currently goes for 14.6x FY15E (ends Jan. ’15) EPS and 13.2x FY16E EPS.
    • Prior Nvidia earnings coverage


  67. GM compensation program gets 65 death claims in first eight days

    Fri, Aug 8 · GM

    • General Motors’ (NYSE:GM) victim compensation program received ~120 claims in its first eight days, more than half reported by families who say the victims were killed in accidents involving cars that were subject to the 2.6M-car recall.
    • The early tally raises questions about whether GM has underestimated the number of deaths linked to the ignition switch defect, which the company knew about for more than a decade but didn’t recall the cars to fix until February.
    • The closing date to file isn’t until the end of the year.
    • Meanwhile, GM’s safety problems persist, as it recalled 189K SUVs requiring fixes to power-window switches that can catch fire, as well as 201K Saturn VUEs to replace faulty ignition cylinders.


  68. S&P cuts outlooks to negative at Canada’s six biggest banks

    Fri, Aug 8 · TD

    • Canada’s six biggest banks – Toronto-Dominion Bank (NYSE:TD), Royal Bank of Canada (NYSE:RY), Bank of Nova Scotia (NYSE:BNS), Canadian Imperial Bank of Commerce (NYSE:CM), Bank of Montreal (NYSE:BMO) and National Bank of Canada (OTCPK:NTIOF) – had their outlooks cut to negative from stable by Standard & Poor’s because of regulatory changes that could affect bondholders.
    • S&P says the outlook revision reflects its “expectation of reduced potential for extraordinary government support arising from implementation of the proposed new elements of the resolution framework for Canadian banks.”


  69. Report: China planning online sales tax

    Fri, Aug 8 · BABA

    • China’s Want Daily reports the government’s State Administration of Taxation is studying an online sales tax and plans to impose one before 2015. Alibaba’s (Pending:BABA) Tmall site (focused on sales from larger businesses) and JD.com (NASDAQ:JD) would reportedly be among the first sites affected.
    • A JD.com exec says e-commerce companies are expecting a sales tax to be implemented on a large scale. A seller on Alibaba’s Taobao site notes many smaller merchants (Taobao’s specialty) haven’t registered their businesses, something that could make tax collection difficult.
    • With Chinese online retail sales having totaled an estimated $305.8B in 2013 (per iResearch), e-commerce has grown to account for a sizable chunk of China’s economy. Dangdang (NYSE:DANG) and Vipshop (NYSE:VIPS) are two other names that stand to be affected by an online sales tax.


  70. IRS eases renewable energy project tax credit rule

    Fri, Aug 8 · GE

    • The IRS is relaxing a threshold for renewable energy projects to qualify for federal tax credits, potentially providing a boon to developers of wind power such as GE who had been uncertain how heavily they could rely on the credits for financing.
    • The IRS now says renewable energy projects could qualify for a pair of tax credits if they had incurred at least 3% of the total project cost before the beginning of 2014, down from the previous threshold of 5%; the new guidance also clarifies what sort of construction qualified as work of a “significant nature.”
    • GE told investors on its Q2 earnings call last month that it had delayed booking ~$1B of expected orders for wind equipment because of uncertainty about the credit.


  71. CPST/Phil – what's with these guys? looks like a good oppty, but sales down while 'backlogged' orders keep growing..


  72. KMP/IHS – We're testing the theory that the whole is going to be greater than the sum of the parts.  Of course, not paying a dividend of $5.50 on KMP (as well as proportionally for the merged entities) and applying even a p/e of 15 to the now $8 earnings gets you to $120.  It's  a very good plan but the easy money has been missed (KMP is a very old favorite of ours) but you can still sell 2016 $82.50 puts for $6, which is a net $76.50 entry – about where they were before all the good news – that's a nice way to take a poke at an entry with the stock already at $94 (over 20% above the net entry).  

    CPST/Scott – My comment on them in June was:

    CPST/QC – I liked them back when they crashed under $1 back in '09 but that was from $4 and they never saw that again ($2-$2.40 tops).  Sales have been moving up 20% a year but they always manage to lose money anyway.  They did a 10% dilution in 2012 to raise $35M and they burned $11M last year and they have $38M left but no debt to speak of.  If they had options and I could knock them down to $1, I'd probably like them but they don't, so I don't. 

    Now that they are down at $1.20, you don't really need an option as they are back in penny stock territory, so I like them for a poke here as long as you fully intend to DD at .80 and then get 1/2 back out at $1 or take the loss below .75 (like an option).  They should hit a lot of resistance at $1.50-1.60 so keep in mind that making 20% in short order is great on a stock like this.  


  73. The Sarah Palin Channel's Greatest Hits (so far):

    4. Video of Palin's rebuttal to Elizabeth Warren’s "11 Progressive Commandments 

    Laughable that Palin thinks she can go toe-to-toe intellectually with Warren, but some low-lights in this video, which shows grainy footage of Warren's speech intercut with Palin's commentary, are lower than others. When Warren states, “We believe in science, and that we have a responsibility to protect the earth,” Palin responds: “We believe in science and God’s magnificent creation overflowing with resources.” Never mind that believing both is technically impossible. She goes on to say that God wants us to honor him and develop those resources, and exploit them. And use them to heat up the planet. She’s obviously tight with God.

    Her word of the day:


  74. /TF a good short at 1145 or is it took risky with markets trending upwards?


  75. too*


  76. Palin / Phil – About her rebuttal to higher fast foods wages – so insightful!

    "We believe — wait, I thought fast food joints — don't you guys think that they're like of the devil or something?" Palin said. "Liberals, you want to send those evil employees who would dare work at a fast food joint that you just don't believe in — I don't know, I thought you wanted to send them to purgatory or something. So they all go vegan. And wages and picket lines, I don't know, they're not often discussed in purgatory are they? I don't know, why are you even worried about fast food wages? Well, we believe — an America where minimum wage jobs, they're not lifetime gigs, they're stepping stones to sustainable wages. It teaches work ethic."


  77. /TF/Ricb – Good call, it should be the top but, of course, coming off 1,110, we expected 1,150 for a strong bounce so figure 40-points means weak retrace at 1,142 and strong at 1,134 and you can see this morning that it consolidated at 1,134 before popping over so all bullish signs so far – if they hold 1,142, then it's very likely we get a run to 1,150.

    Meanwhile, on the Dow, we're over 16,650, over 1,940 on S&P but NOT on /ES, and the Nas is over 4,385 by 0.5% while NYSE is 10,753 – right on the strong bounce line. NYSE is hardest to fake, so we'll watch it closely but, overall, this is a good recovery if it holds the day.  Volume is crap so far…

    Palin/StJ – Would be funny if it were a movie but the fact that she actually holds a position of power makes it kind of terrifying.  


  78. "believe" in science? Warren and Palin both are being odd here. Science is not a belief system.  We're having a very strange national conversation.


  79. Science / Snow:

    God @TheTweetOfGod
    Science is true whether or not you believe it, but religion is true whether or not it’s true.


  80. KMP/Phil

    How about a buy write on KMI?


  81. WMT – Phil, do you have a current trade on WMT in the portfolios? I note earnings are due out this coming Thursday though. Thanks


  82. ANYONE WARMING TO A CONTRARY BET GIVEN THE LOW EXPECTATIONS IN THE BEATEN DOWN RETAIL SECTOR?


  83. Science/Snow – I think you can believe in science, not as a God but as a thing which is true.  I believe in physics, for instance and things like gravity, even though I don't see it.  I think it's taken for granted that Warren is addressing people smart enough to understand what she means while Palin doesn't even worry about making completely contradictory statements in the same paragraph for her crowd.  

    And what StJ said God said!  

    As to the national conversation – I got together with 70 people in Boston I've known for 30+ years this weekend and NONE of them have turned Conservative and NONE of them have found God (any more than their usual Sunday's at church for those who do).  When I go to one of Tina's family or friend functions in Texas, I may as well be dining with the Palins (except for her Houston actual rocket-science friends, who are just conservative but maybe not so religious).  

    It's a strange national conversation because we are a strange nation that no more belongs together than Iraq does – only, for some reason, we've only made a serious effort to try to kill each other once in 240 years (so far).   I think that's why we try so hard to keep other nations together – we have this sort of innate sense (from our Civil War teachings) that it's bad for countries to fight with themselves.  

    Only there was no peace in our civil war – we had to kick the crap out of the South and THEN Lincoln was, very wisely, a gracious conqueror and that is what put the country back together.  Would another man have kept the nation together?  Yet we try to force others to do it over and over again because we BELIEVE that's the way nations should act – based on our one, unique experience.  

    KMI/Jet – As the purchasing entity, they may have a rough time swallowing the others, so it might be erratic.  I think short KMP puts are a safer bet at the moment but, if KMI does tumble, I'll be very interested back around $35 with a net $30 entry.  

    WMT/DM – Not in our portfolios but could be a Butterfly play as it's hard for them to fall too far or rise too quickly, so a nice channel play.  At the moment, they are low in the $72-$80 channel they are in so, as a straight play, I'd sell the 2016 $70 puts for $4.20 and consider that free money (happy to own WMT at $70 if it ever happens) and use it to buy the 2016 $70/80 bull call spread at $4.65 for net .45 on the $10 spread that's $4.35 in the money to start (1,000%!).   TOS wants $10.50 in margin so not the most efficient play but I'd say it's a high-percentage one.  

    It also makes a nice butterfly because you can sell Sept $75 puts and calls for $2.75 against the same $70 2016 puts (but buying them) at $4.20 and the long 2016 $80 calls at $2.70 for net $6.90 on the long side with $2.75 collected in the first series for a 40% return.  Actually, that is so good, let's do 5 of those in the Butterfly Portfolio.  

    Retail/Angel – I'd wait to see the China data but none of the earnings reports so far indicate a strong consumer is lurking out there.  XRT popped back to $86, though.


  84. PLX/crs101010….and everyone else that is in them – Israeli company could be one reason for the sell off…biotechs getting wholluped is another, esp. those with no 'high flier' treatments (aka cancer).

    PLX is a boring play, building on a technology that can be expanded to other treatments for lower costs.  It is a long(er) term play.  I sell calls against it, and puts, eventually building my position.  I have 2500shares and will continue to accumulate, eventually selling 1/2 when i get to even.  The stock should rebound, but when?  CRIS is another in this boat….

    So my thoughts are stick it out, ride it up and down, sell calls and puts against it, and do small plays on them until a threshold is reached.

    SGEN remains my very favorite, with so many 'drugs' in the pipeline (internal and external).  The most recent is anti-EGFR mAb drug conjugate.  EGFR is epidermal growth factor receptor….you can read about it on WIKI, or Google, but in essence, it is a very nice target and many many are working in the area…but not using SGEN's warhead, which gives it an extra punch.

    - Pharm


  85. WMT/Phil .. thanks .. might try out that Butterfly play, have not opened any of those yet but I guess that the learning curve shall be a road quickly travelled once real skin is in the game :)


  86. Midday Gainers / Losers

    12:47 PM ET · PIP


  87. Petrobras forecasts signal reduced losses from selling imported fuel

    12:29 PM ET · PBR

    • Petrobras (PBR +1.7%) expects a sharp decline in the amount of gasoline and diesel fuel it imports starting in November, when its new Abreu e Lima refinery begins operation, company officials say in an investor conference call.
    • The refinery is expected to start its first of two refining trains on Nov. 4, which is expected to reach full production of 115K bbl/day in January.
    • Sales to overseas markets likely will surge ~50% in H2 2014 while refinery production should rise 4%, signaling a reduction in losses from selling imported fuel at below global prices.
    • PBR says it expects crude exports to average 250K bbl/day in H2; output at the company’s pre-salt fields reached a record 546K barrels on July 13.


  88. GT Advanced rallies after disclosing Merlin progress

    12:05 PM ET · GTAT

    • GT Advanced (GTAT +3.7%) says its Merlin solar module metallization/interconnect tech has met the requirements of several industry standards, following tests to guarantee its long-term reliability.
    • GT adds it’s in “active discussions with select lead customers” to bring Merlin to market, and is on track for an early 2015 commercial launch. The company roughly estimates Merlin could be a $400M-$1B/year business by 2018, assuming a market penetration of 8%-20%.
    • Merlin reduces the amount of silver needed to connect solar cells within a module (lowers costs and weight), and can improve cell efficiency and reliability along the way.
    • GT claims Merlin can be easily supported by existing cell manufacturing lines, following a simple upgrade. Meyer Burger, JA Solar, and other firms have also been working on solutions that aim to lower silver use.
    • Merlin is separate from GT’s Hyperion tech, which (among other things) could be used to create thin, high-efficiency, solar cells for electronic devices.


  89. Molycorp cut to Sell at Euro Pacific, which cites falling rare earth prices

    11:59 AM ET · MCP

    • Molycorp (MCP -4.2%) is downgraded to Sell from Hold with a $2 price target, cut from $3, at Euro Pacific, which cites continuous price decreases in special earth elements and lagging production efficiency in Mountain Pass.
    • The firm notes how MCP has decreased its current account, burning through cash by nearly $80M/quarter trying to stay afloat with its price decreases and trouble in Mountain Pass.
    • MCP’s Q2 average sales prices decreased to 1,049 tons at $16.8/kg from 974 tons at $10.3/kg in the year-earlier Q2.


  90. CREE/stj – earnings play?


  91. High-yield selloff turns up bargains

    11:53 AM ET · JNK

    • The average yield has jumped to 5.77% today from 4.85% on June 24, and Barron’s Michael Aneiro notes the two most popular ETFs – JNK and HYG – briefly traded at up to 2% discounts to NAV last week, though these disappeared pretty quickly.
    • Not disappearing – and in fact growing – are discount to NAVs in some high-yield closed-end funds, with many now trading at double-digit discounts. Among some of the larger funds, writes Aneiro, the BlackRock Corporate High Yield Fund (HYT +1.7%) trades at a 10.2% discount to NAV and the AllianceBernstein Global High Income Fund (AWF +0.8%) sells for a 9.9% discount. The Western Asset High Income Fund II (HIX +1.1%) offers a 2.7% discount.
    • ETFs: HYG, JNK, HYLD, SJB, IHY, ANGL, HYLS, PGHY, HYXU, UJB, XOVR, QLTC, IJNK


  92. IBM buys identity/access software firm Lighthouse

    11:44 AM ET · IBM

    • IBM (IBM +0.7%) has bought Lighthouse Security, a provider of identity/access management software that sets permissions for cloud-based apps, for an undisclosed sum.
    • News of the purchase comes two weeks after Big Blue disclosed it’s buying CrossIdeas, an Italian identity/access software firm. Whereas CrossIdeas (with the help of an analytics platform) is used to control employee access to a company’s internal apps and data, Lighthouse specializes in controlling employee and 3rd-party access to cloud apps, including ones not controlled by the company.
    • “If you are on Facebook and LinkedIn and are a customer in my directory, I need to figure out who you are and interact with you in a seamless way,” says IBM exec Kris Lovejoy, describing a use case for Lighthouse’s software. Lighthouse’s products (like CrossIdeas’) will be integrated with IBM’s existing identity/access management offerings.


  93. Air Jordan still strong at 30

    11:41 AM ET · NKE

    • Demand for Nike’s (NKE) Jordan Brand subsidiary shows no signs of crashing as release dates for premium Air Jordan basketball shoes continue to stoke strong sales and bustling secondary market action.
    • Air Jordans first hit the hardcourt during the Reagan administration.
    • Foot Locker (FL -0.8%) and Finish Line (FINL +0.5%) frequently see around-the-block lines on Jordan release dates.
    • Google Trends chart: Air Jordan


  94. Richard Kinder made $1.5B this morning after consolidating pipeline empire

    11:27 AM ET · KMI

    • Not a bad way to start one’s week: Rich Kinder made $1.5B this morning from the mega-deal that will streamline all the publicly traded Kinder Morgan entities into one company.
    • The stocks – Kinder Morgan (KMI +8.1%), Kinder Morgan Partners (KMP +16.5%), Kinder Morgan Management (KMR +22.9%) and El Paso Pipeline Partners (EPB +20.1%) – are all sharply higher, as the general view is that investors like the streamlined structure and that the company will now have a lower cost of capital.
    • Kinder is the largest KMI shareholder with 243.1M shares, a ~24% stake.


  95. Disney brushes aside Amazon DVD tactic

    11:19 AM ET · DIS

    • Shares of Disney (DIS +1.1%) aren’t showing any ill effect from Amazon’s move to halt DVD pre-orders.
    • Media analysts are quick to note that Amazon’s leverage isn’t that great with all the streaming and retail options consumers have to pick up favorite titles.
    • Disney’s partnership with Hulu and cozy relationship with Apple make its Amazon distribution worries only a minor headache.


  96. Bump for Hyatt Hotels after Stifel Nicolaus upgrade

    11:24 AM ET · H

    • Stifel Nicolaus upgrades Hyatt Hotels (H +2.5%) to a Buy rating from Hold.
    • The investment firm has a $67 price target on shares.


  97. Tesla Motors gearing up for all-time high run after DB upgrade

    11:04 AM ET · TSLA

    • Tesla Motors (TSLA +5.4%) trades higher after Deutsche Bank warms up to the EV automaker’s prospects.
    • Nothing earth-shattering from DB, just optimism that Tesla will reach its higher production levels and stretch out margins with scale.
    • Shares are rated a Buy by DB with a price target of $310.
    • TSLA is only $3.50 per share away from an all-time high.


  98. Two top reasons for Kinder Morgan move: stalled share prices, lower tax bill

    12:48 PM ET · KMI

    • Before today’s pop, all four Kinder Morgan stocks traded roughly flat to slightly down in 2014, and a source familiar with the just-announced Kinder combination tells WSJ the stalling share price of the four stocks was one reason Richard Kinder moved to simplify the structure.
    • Another reason for the deal: the consolidated company will be more tax efficient – even with the restructuring, Kinder Morgan says it actually will cut its tax bill by $20B over 14 years despite relinquishing the MLP tax benefits.
    • The source says KMI now is likely to focus squarely on the midstream space, buying up more energy infrastructure in the U.S. amid the country’s oil and gas boom.
    • KMI +10.7%, KMP +18.7%, KMR +26.2%, EPB +22.5%.


  99. SEC charges Kansas with fraud on pension disclosures

    Securities regulators have filed fraud charges against the state of Kansas, alleging offering documents failed to disclose risks to investors.

    Read more: http://www.cnbc.com/id/101906434

    Sent from the CNBC app. Available for iPhone
    and iPad


  100. Phil— are you saying that you don't BELIEVE in a two state solution? ;-)


  101. Phil ( or anyone ) // WMT
    Can you write out the legs of the WMT butterfly – not sure I have it correct ?


  102. WMT/DM – Hopefully it will be a tediously boring way to make money!  

    CREE/Scott – I like them here.  They don't make much money ($100M/year on $1.5Bn in sales) but they have $1Bn in cash+investments and no debt with positive cash-flow making a $6Bn valuation only a little silly (50x earnings after cash).  You have to buy into the 20% annual growth story and have patience as it will be a couple of years before they safely justify $50/$6Bn but you can sell 2016 $40 puts for $4.40 and buy the 2016 $45/55 bull call spread for $4.75 and net .35 on the $10 spread and you know I love 3,000% upside plays!  TOS only wants $4 margin for the short puts, so it's nice and efficient but make sure you REALLY want to own them as a miss or guide down can knock this stock back to $40 in no time. 

    Two-state/Jabob – I don't even believe in it for this country! 


  103. PSW // DIv
    I'm trying to convert a few IRA's to simple buy/writes. Do you guys any high div favorites that are ripe or on a watch list ?


  104. WMT/Wombat – Here is new position in Butterfly Portfolio:

    WMT
    5 WMT 2014 20-SEP 75.00 PUT SP $ 795.00 8/11/2014 $ 775.00   0
    $ -20.00 -2.6 %
    5 WMT 2014 20-SEP 75.00 CALL SC $ 550.00 8/11/2014 $ 550.00   0
    $ 0.00 0.0 %
    5 WMT 2016 15-JAN 70.00 PUT LP $ 2,100.00 8/11/2014 $ 2,050.00   0
    $ -50.00 -2.4 %
    5 WMT 2016 15-JAN 80.00 CALL LC $ 1,350.00 8/11/2014 $ 1,345.00   0
    $ -5.00 -0.4 %

    Dividends/Wombat – Well, NLY, AGNC and CIM in the REITs.  PNW is an energy play we liked as they fell.  KMP was on our list but gone.  SO is always nice, GE 3.5% is nothing to sneeze at, PFE, FTR, WIN, RAI… those are all good, steady payers.  


  105. awesome. thanks Phil >>


  106. Divs – TAL has good divs and decent option premium.


  107. Oops, don't forget T and VZ!  


  108. PSEC has been very good to me as well. There is a good webinar/overview of PSEC on their homepage here: http://www.prospectstreet.com


  109. Phil
    Any variation of the walmart play for 25kp (or smaller in my case).

    Or other small portfolio plays. Right now I only have an AAPL bcs and have sold puts on aro and NLY and I’m only about 30% invested in this small account.


  110. Phil // Flies
    Would you suggest, or advise against putting butterflies in an IRA ? I ran a few analyzers on the spreads and the margin is the same as a regular account.
    Curious


  111. 2 states / Phil – Here you go again with facts… Fiction brings so many more votes!


  112. Here is the list of the dividend aristocrats – raised dividend every year for the past 25 years:

    http://www.topyields.nl/Top-dividend-yields-of-Dividend-Aristocrats.php


  113. jabobeast – Have you seen the unusual option activity for PCLN Aug14 C1400? That would be $80+ by Friday!


  114. PSEC/Deano – Good one.  

    TAL/CaFords – Nice, boring company, I like that.  

    WMT/Dforst – Well, you can't do spreads like that in a $25KP if you have no margin to use.  I would have gone for a long at $72.50 (last week) but now I'd say watch and wait to see if they come back down there.  

    IRA/Wombat – Sure, as long as they allow them, Butterflies are great.  The only real issue is you probably have trouble legging in and out if you are not allowed to leave a naked short leg – it just limits your flexibility a bit but, otherwise, the same ones we use in the Butterfly Portfolio should work just fine.  

    Facts/StJ – There's seriously a war on facts in this country.   As Palin says, you CAN believe in science – as God created it – just don't go getting any ideas…

    Dividend Aristocrats are a good list – especially for long-term holds because, when you buy a stock for $15 with a 3% dividend and it goes to $30 with a 4% dividend, that's $1.20 back on $15 = 8%, not even including what you make on the stock!  ED, TGT, MCD, PG KO, AFL, WAG – all make good ads to dividend portfolios.  

    Mild pullback off the highs so far, 1,140 failed on /TF, 3,900 still holding on /NQ, 1,933 on /ES and 16,527 on /YM so far.  NYSE stuck at 10,725.  Oil $98.02 after topping at $98.58, not much other action but VIX bottomed at 13.72 from 17 Friday, a 20% drop in 24 hours!  

    PCLN/Diamond – Extrapolation at its finest!  


  115. diamond--1400 by Friday??? I guess it makes more sense than TSLA hitting new highs?

     

    Looks like a lot of activity across the board.

     

    These are two strong Mofos!!! 


  116. Civil wars: slow day, so why not – agreed, the US holding together is odd – but the mideastern states tend to be rube goldbergs assembled by the Brits back in the day following the slow end of the Ottomans. Germany is doing ok after the old kingdoms got together under Bismarck. The Balkans are still the Balkans. China, Korea, and Japan pulled themselves together (and sometimes fell apart again) over many centuries out of collections of smaller fiefdoms and trading towns. The Korean peninsula was first unified by Silla (by the nephew of the first queen), then when Silla fell, Koryo kept it together until they fell, and then Chosun stepped up, holding it together (although losing the northern Koryo territories) until the 1905 occupation.


  117. This is a good view:

    SPX

    So, at 1,938, we're still well below that top line but not catastrophic unless we fall back below 1,930 (for more than a spike). 1,905 was touched on Thurs, when we played for the bounce with SSO and we took off like a rocket since then but so much damage has been done that the S&P will have a hard time getting back over that top line at 1,950 (50% bounceish). 

    Look who's sneaking up"


  118. Phil/LEAP strangles: I don't want to come across as cute, but back in February you thought the purchase of LEAP strangles was not such a bad idea – see here. This was related to a $2 mio. which would not be margin constrained. I certainly like your comment this morning, an interesting way which puts another spin on the strategy. I just wondered whether there was something that led to a different view point from your side. Your allowed to change your mind as much as the next mind – but it's a mind worth probing!


  119. Civility/Snow – Would make for an interesting history book – what does bind people together or tear them apart? 

    Strangles/Winston – Well, for one thing, I was simply liking that play but, after adding DIS and watching it, it didn't seem worth the extra cash it used.   The APPL play was more about buying a $400 spread for $425 – pretty much a no-lose and that allowed you to sell well out of the money puts and calls to easily make up the $25 in margin over 2 years but the key point here is the question was:

    Let's say a friend of mine has a loose $2 mio. to put into safe plays where the objective would be to generate 15-20% returns per year. The strategy of buying LEAP strangles and selling front month strangles seemed a interesting route to go. Phil, is it still a valid strategy in this market and if so, do you have some possible examples? Other alternative ways to make a 15-20% return on such a cash pile would be appreciated (by my friend, of course :)

    So there's a VERY big difference between what is more safe and what I consider a good use of money.  No one asked what had less risk – of course a strangle play on the long side has the huge benefit of guaranteeing you get a certain amount of money back.  Though the overall trade is less efficient, if you have enough money where protection is your main goal – then it's a logical way to play.  It's simply the "cost" of that protection (making less money for each margin dollar in exchange for less chance of losing).  

    Anyway, glad you keep these things as nuances like this are very good to discuss!  And, by the way, nothing wrong with DIS returns since that day, my beef with the position is we could have done two plays like it for the same margin but nothing wrong with 10%, though we would have made the same $6,640 if we had used $20,000 for the longs ($8,100 cash + $12,500 in margin as noted earlier) instead of $46,000!  

    DIS
    10 DIS 2014 20-SEP 85.00 CALL SC $ 3,650.00 7/18/2014 $ 2,910.00   24
    $ -740.00 -25.4 %
    10 DIS 2014 20-SEP 85.00 PUT SP $ 960.00 7/18/2014 $ 2,240.00   24
    $ 1,280.00 57.1 %
    10 DIS 2014 19-JUL 80.00 PUT SP $ 0.00 5/16/2014 $ 2,400.00 7/18/2014 63
    $ 2,400.00 100 %
    10 DIS 2014 19-JUL 82.50 CALL SC $ 3,100.00 5/14/2014 $ 1,950.00 7/18/2014 65
    $ -1,150.00 -59.0 %
    10 DIS 2014 17-MAY 77.50 PUT SP $ 0.00 4/17/2014 $ 1,000.00 5/16/2014 29
    $ 1,000.00 100 %
    10 DIS 2014 17-MAY 80.00 CALL SC $ 0.00 4/17/2014 $ 2,150.00 5/16/2014 29
    $ 2,150.00 100 %
    10 DIS 2014 19-APR 80.00 PUT SP $ 100.00 3/21/2014 $ 1,670.00 4/17/2014 27
    $ 1,570.00 94.0 %
    10 DIS 2014 19-APR 77.50 CALL SC $ 2,500.00 3/21/2014 $ 3,600.00 4/17/2014 27
    $ 1,100.00 30.6 %
    10 DIS 2014 22-MAR 75.00 PUT SP $ 10.00 2/6/2014 $ 2,000.00 3/21/2014 43
    $ 1,990.00 99.5 %
    10 DIS 2014 22-MAR 75.00 CALL SC $ 5,200.00 2/6/2014 $ 2,600.00 3/21/2014 43
    $ -2,600.00 -100.0 %
    10 DIS 2016 15-JAN 95.00 PUT LP $ 23,590.00 2/6/2014 $ 14,400.00   186
    $ -9,190.00 -39.0 %
    10 DIS 2016 15-JAN 55.00 CALL LC $ 23,320.00 2/6/2014 $ 32,150.00   186
    $ 8,830.00 37.9 %
    Total Gain/Loss for DIS
    $ 6,640.00 10.6 %

    Do you think DIS can go to zero?  I certainly don't and, if I had $2M to play with, I'd be happy to risk $200,000 that it wouldn't so I could make 20% instead of 10% – the "safety" of the strangle isn't worth the lower potential gains.  Also, I have plenty of confidence that, if a stock flies up or down, we can add more puts or calls or sell more puts or calls to get the ship back on track.  As long as I feel that I'm more likely to make 200% over 10 years more often than I'll lose 20% in any given period – then why would I settle for 100% just to avoid the occasional CZR (and even that made money for us)?

      


  120. SPY 60.1M shares.  Quite the busy day…

    Anyway, you said you were going to check out some new 25KP plays.  I'm curious!


  121. $25KP/JPH – Not feeling it today but let's discuss tomorrow, maybe we'll find a couple for the Webinar.  


  122. Phil nuance/ Thanks for that considered reply, you are a gentleman, sir. I think it was Tony Robbins who said 'if you want a better answer ask a better question'. It never ceases to surprise me how much I learn by hanging around here. Now, if I could only get rid of the day job …………


  123. Hey, check this out!  

    The Top 6 Stock Market Professionals on Twitter Infographic


  124. Phil/tweets

    That doesn't even look like you! :)

    Congratulations! 


  125. Humph! I think you're engaging. :P


  126. I think that's because I never chat on Twitter, I just post links to articles and the occasional trade.  

    You're welcome Winston.  I agree, jobs are so annoying – thank goodness I don't have one!  wink


  127. It would appear Phil is 3 Icahns.


  128. I wonder if Deutsche is going to participate in TSLA's next $$ raise?


  129. SPY Aug5 (Weekly) 190 Ps for 1.10….good for a ride down.  1/2 entry JIC ….


  130. Better hope for some rain:


  131. Maybe someone could come up with a good screen based on this information:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2472571

    Novy-Marx (2013) shows that profitability, measured by gross profits-to-assets, predicts the cross-section of average returns just as well as book-to-market ratios do. We find that, in our 1994-2013 sample of S&P 1500 stocks, cash flow measures are even better predictors of stock returns than various income statement-based measures. We present a procedure for transforming indirect cash flow method statements into disaggregated and more direct estimates of cash flows from operations and other sources. We then derive ‘direct method’ cash flow measures and form portfolio deciles based on these measures. Stocks in the highest cash flow decile outperform those in the lowest cash flow decile by over 10% annually after controlling for well-known risk factors. Our results are robust to the investment horizon, and controlling for sector differences. We also show that, in addition to operating cash flow information, cash taxes and capital expenditures provide incremental predictive power.


  132. Not looking good for Europe:

    http://www.businessinsider.com/european-depression-2014-8

    For Euroland, the big picture is that the economy is in its seventh year of depression. On our estimate of a 0.7% contraction in the second quarter, GDP was still 3.2% lower than it was in the first quarter of 2008, when the depression began. Euroland’s economy actually contracted in the first quarter of this year when you exclude Germany’s unexpected surge to a 3.3% annualized rate of growth. Only people who were misled by Markit’s untested and unproven PMIs believed that such growth was real and sustainable. Our estimate of second quarter GDP for the Euro Zone includes a contraction of Germany’s economy at a 2% annualized rate, reversing the windfall in the unexplained and inexplicable first quarter spurt. If our forecast proves correct, average GDP growth for Germany in the first half of 2014 will work out to 0.7% at an annualized rate, clearly less than potential but very much in line with the experience over the last few years. Our estimate for France’s economy is a more horrible contraction of 1.1% for the quarter, or 4.3% at an annualized rate.


  133. ITMN – Jan15 45/50 BCS, selling the $35 Ps for net 25c.  Gonna paper this one, but I like the play.


  134. Phil/AAPL, I sold 21 2015 96.43 calls for 5.61, now 6.50 as a hedge on my BCS and 21 82.86 short puts. I am in no hurry to roll now but when should I consider rolling the 96.43 short calls? Thanks


  135. Drought – So scary! 

    Screen/StJ – That is a good idea.  

    Europe – Also scary!  

    Not too much selling into the close but, on the whole, we're off the highs on low volume so nothing for the bulls to dance about.  

    Dow failed strong by 100, S&P failed by 4, Nas 15 over, NYSE failed by 30, RUT failed by 8.  IE – FAIL, FAIL, FAIL, PASS, FAIL - not that good! 

    AAPL/Jomp – I'd relax until they break over $100, then worry.  As long as you don't mind adding more longs, it shouldn't be too big a deal.  


  136. Momo's had a banner day today.


  137. Drought / Phil – But not at all related to climate change… Nothing to see there, move along!


  138. StJ:   1/ Europe:  Not looking good.  I spoke to Spanish friend yesterday who is well-established, and the pessimism was palpable, not a ray of light from him.  I don't want to make grandiose pronouncements here, but the root cause — not of the recession, which was shared by most countries, but of the failure to recover --it being tethered together by a common currency, held up too high [for most EU countries] by the German tendency to save rather than spend.  It doesn't take a genius to figure out that the currency union must break apart.  But it will take a genius to figure out how it can be done when a reversion to the, e.g., peseta will instantly cause the Euro to soar and for Spanish/[all Peripheral countries'] debts to soar to unpayable levels in Euros, or New Deutschemarks, if they all leave.  No good way out — the short of the decade.

     

    StJ / Weather:  It's bad.  This drought is not a passing phenomenon.  It is absolutely a man-made, carbon emission-caused problem, and it ain't going away.  A food problem, in essence.  Reversible?  If there were Extinction Event Options, I'd be buying calls.  Not good.  Maybe a farm in Greenland would be a decent investment.


  139. Europe / Phil – And we complain about our economy! These guys are still below where they were before the crisis started. And keep in mind, they now include drugs and prostitution in their GDP!

    This combined with what we are seeing in Iraq makes me wonder why a guy like Obama just won't give up – look at what he inherited – an economy in a depression, 2 wars that were draining the budgets, a trillion dollar deficit, a global economy in total disarray and to top it off, a Congress blocking everything he is trying to do… Unreal! And to think that McCain's plan in 2008 was to reduce government spending by 5%, stay in Iraq indefinitely, attack Iran (and probably Russia by now) with Palin as a sidekick. Close call…


  140. NUAN – if you believe the rumors that they are an acquisition target, you'll have a nice discounted entry tomorrow, getting slaughtered…


  141. Europe / Zero – So many people have been saying that Germany does play a big role in what is going on right now. A lot of my "informed" friends in France are disgusted that we have abandoned our economic policies to Germany after the crisis. They have been driving wages lower over Europe and interest rates and exchange rates higher than they should have been. All that why not driving consumption internally. Saving is great no doubt but when consumers don't spend, the government should pick up the slack to stimulate the economy and instead we have put in place austerity measures. Crazy.



  142. Wow, Robin Williams dead… Apparent suicide. Always liked him although he got carried away sometimes. I remember him mostly from watching Aladdin 20 times when my kids where young!

    Gooooood Byyyyyyyyyyyyeeeeeeee Robin!


  143. Hey all, if in San Francisco a few friends and I invested in a restaurant and it's finally open and doing pretty well.  Check it out if you are in the Marina area of SF.  It has 4.5 stars on Yelp right now.

    Here are some food pics:

    http://www.yelp.com/biz_photos/causwells-san-francisco-5?select=8MBBi1PZaD-Llpdd9U_eEg#l1Mi9C1fcsoNXKwPJuAEDw



  144. From Bloomberg, Aug 12, 2014, 2:42:27 AM


    Aug. 12 (Bloomberg) — The yield on German 10-year government bonds may fall below 1 percent amid slow growth and persistent unemployment in the euro region, according to Lena Komileva, chief economist at G Plus Economics Ltd. in London.
    She talks with Mark Barton, Caroline Hyde and Manus Cranny on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    European equity-index futures
    retreated while the dollar climbed against the euro, New Zealand
    currency, ruble and yen. A gauge of Asian stocks headed for its
    biggest two-day jump since May as the cost of insuring Asian
    debt declined with wheat.

    To read the entire article, go to http://bloom.bg/1uI1uNr

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


  145. From Bloomberg, Aug 12, 2014, 2:19:08 AM

    Aug. 12 (Bloomberg) — The Red Cross said it’s working on getting aid to rebel-held areas of east Ukraine, where government forces have encircled major cities, as the U.S. warned Russia not to use the mission to send in troops.
    Bloomberg’s Ryan Chilcote discusses prospects for the mission with Mark Barton and Caroline Hyde on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    A Russian humanitarian mission started toward eastern Ukraine after the U.S. warned President Vladimir Putin not to use aid as a cover to send in troops.

    To read the entire article, go to http://bloom.bg/1uhGBv4

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


  146. From Bloomberg, Aug 11, 2014, 5:00:01 PM

    The Mosul dam, 50km north of Mosul, Iraq. Photographer: EPA

    Islamic State militants who last week captured the Mosul Dam, Iraq’s largest, had one demand for workers: Keep it going.

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

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


  147. From Bloomberg, Aug 12, 2014, 12:52:30 AM

    The days of paying different prices
    for the same stock in Hong Kong and Shanghai are numbered,
    according to Morgan Stanley.

    To read the entire article, go to http://bloom.bg/1oFyvo0

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  148. From Bloomberg, Aug 11, 2014, 11:05:29 PM

    People sit along a promenade near commercial building in the central business district of Singapore. The nation is set to benefit from a recovery in global growth. Photographer: Brent Lewin/Bloomberg

    Singapore’s economy unexpectedly expanded last quarter as manufacturing declined less than initially estimated amid recoveries in advanced countries.

    To read the entire article, go to http://bloom.bg/1oEW2dJ

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


  149. From Bloomberg, Aug 11, 2014, 1:18:08 PM

    More than 150 people suspected of
    economic crimes from China remain at large in the U.S., China
    Daily said yesterday, as officials pledge to step up efforts to
    hunt down those who take their ill-gotten gains abroad.

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

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


  150. From Bloomberg, Aug 12, 2014, 2:13:18 AM

    Apple especially needs to boost its iPad business, which is its second-biggest product category after iPhones. Photographer: Brendon Thorne/Bloomberg

    Apple Inc. (AAPL)’s suppliers have started
    manufacturing new iPads, according to people with knowledge of
    the matter, as the company works to reinvigorate sales of the
    tablet computers after two straight quarters of declines.

    To read the entire article, go to http://bloom.bg/1ukrSQ0

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  151. From Bloomberg, Aug 6, 2014, 8:17:18 PM

    A Samsung Electronics Co. Galaxy S4 smartphone, left, and an Apple Inc. iPhone 5 in New York. Photographer: Victor J. Blue/Bloomberg

    The decision by Apple Inc. (AAPL) to scale back its patent battle with Samsung Electronics Co. (005930) may represent more of a reboot than a truce.

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

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


  152. From Bloomberg, Aug 11, 2014, 11:03:20 PM


    Volkswagen AG’s Audi, Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz, Tata Motors Ltd.’s Jaguar Land Rover, Fiat SpA’s Chrysler, Toyota Motor Corp. and Honda Motor Co. have announced price cuts of vehicles or spare parts since July in the wake of an investigation by China’s National Development and Reform Commission into more than a dozen automakers. Photographer: Tomohiro Ohsumi/Bloomberg

    China’s antitrust crackdown signals
    a new era of regulatory scrutiny in the country and threatens to
    end the days when products from Audi sedans to Starbucks lattes
    generate fatter profits in Beijing than in London or New York.

    To read the entire article, go to http://bloom.bg/Xcxy1f

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  153. From Bloomberg, Aug 12, 2014, 12:00:07 AM

    Mercer’s Dairy ships its specialty wine-infused ice cream to 14 nations including China, Indonesia, the Netherlands, Seychelles and Trinidad and Tobago. Photographer: Mike Bradley/Bloomberg

    Used to be, Mercer’s ice cream
    wasn’t found far from the 60-year-old dairy in Boonville, a town
    of about 4,500 in central New York.

    To read the entire article, go to http://bloom.bg/1po5NwR

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


  154. From Bloomberg, Aug 11, 2014, 7:01:00 PM


    Aug. 12 (Bloomberg) — The divergence between U.K. growth and real wages is unsustainable and contributing to the “productivity puzzle” confronting the Bank of England, according to Lena Komileva, chief economist at G Plus Economics in London.
    She speaks with Mark Barton, Caroline Hyde and Manus Cranny on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    U.K. food sales by value dropped the
    most in at least 5 1/2 years in the three months through July
    because of price cuts by supermarkets, the British Retail
    Consortium said.

    To read the entire article, go to http://bloom.bg/1ukAt5n

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  155. Watch this video at http://bloom.bg/1qX8hAq

    IBM-Apple App Deal Hits Snag as China Spurns iPad

    Aug. 6 (Bloomberg) — IBM’s goal to dominate the business application market through a partnership with former rival Apple has hit a snag where IBM has faced challenges before: China. Alex Barinka explains on “Street Smart.” (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


  156. From Bloomberg, Aug 12, 2014, 1:23:11 AM

    Imran Khan, center, chairman of the Pakistan Tehrik e Insaf (PTI) party, addresses supporters during an election campaign rally in this May 02, 2013 file photo in Lahore, Pakistan. Photographer: Daniel Berehulak/Getty Images

    Pakistani Prime Minister Nawaz Sharif faces his biggest test since taking office, with stocks extending losses after falling the most in more than five years yesterday on concern protests may unseat his government.

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

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


  157. From Bloomberg, Aug 8, 2014, 10:39:38 AM


    Basel Committee on Banking Supervision Secretary General William Coen said, “Capital isn’t the answer to everything. Capital is for unexpected losses and it’s not easy to quantify with precision every single risk that a bank faces. That’s why strong, rigorous supervision is important.” Source: Bank for International Settlements via Bloomberg

    The Basel Committee on Banking Supervision’s new head says it’s dangerous to rely on reported capital ratios as a defense against lender insolvency.

    To read the entire article, go to http://bloom.bg/1sDf4kM

    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 8, 2014, 11:06:22 AM


    From steelmakers, such as billionaire Rinat Ahmetev’s Metinvest BV, to food producers such as Ukrlandfarming Plc, the country’s largest agricultural company, industrial companies are taking the brunt of the conflict and EU sanctions against Russia, say analysts including Elena Bilan at Kiev-based Dragon Capital investment company. Photographer: Vincent Mundy/Bloomberg

    In November, Ukrainian Trade Guild Consulting fielded calls from retailers including Abercrombie & Fitch Co. (ANF) and Japan’s Uniqlo Co. about leasing space before this year’s opening of the country’s biggest shopping mall.

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

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


  159. Watch this video at http://bloom.bg/1sjRbkA

    EU, Russia Have Little Appetite for More Sanctions

    Aug. 8: Joseph Dayan, head of markets at BCS Financial Group, discusses the possible implications of Russian President Vladimir Putin’s food import ban from the U.S. and Europe.

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


  160. Watch this video at http://bloom.bg/1r6ymNm

    Debt Drama: How Paul Singer Held Argentina Hostage

    Aug. 8 (Bloomberg) — International banks are looking to put together a group of investors to buy disputed Argentine debt and resolve a U.S. lawsuit that is blocking the country from servicing any of its foreign bonds. Bloomberg’s Katia Porzecanski reports on “Market Makers.” (Source: Bloomberg)

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  161. Watch this video at http://bloom.bg/1yctgSg

    Dollar Below 1.3350 Per Euro `Important’ for Rally

    Aug. 8 (Bloomberg) — Federal Reserve Chair Janet Yellen is tempering dollar strength with “her dovish views,” says Peter Rosenstreich, chief foreign-exchange analyst at Swissquote Bank SA. He talks about the outlook for the dollar versus the euro and pound over the coming months.
    He speaks from Geneva with Bloomberg’s Niki O’Callaghan. (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


  162. Re Healthy Eating : I run a food truck on the beach here in FL.  Very middle class area.  When we bought it, they served all "bad" food.  Fried, Burgers, Hotdogs, and lots of high sugar deserts.   As soon as we added things like a Gluten Free Veggie wrap, taco's with kale and protein, "fresh veggies juices", etc; we did a ton more business with the crowd.  People would walk a mile just to come to our truck, since all the other trucks were unhealthy fair food.

    Even in a state which isn't know for it's health, people do seem to care enough to go the extra mile.

    PS: This isn't to say we don't sell tons of fair food, and there isn't a line around all the McD's here in the morning, just a perspective.


  163. From Bloomberg, Aug 11, 2014, 10:36:31 AM

    My morning train reads:

    To read the entire article, go to http://bv.ms/1oXaux3

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  164. From Bloomberg, Aug 11, 2014, 3:01:05 PM

    Florida gets something right about voting.

    Gerrymandering, like the poor, will always be with us. At least that’s the conventional wisdom, confirmed decennially by state legislators and left unchallenged by the U.S. Supreme Court. But in Florida, the practice has run into a roadblock: voters.

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

    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 11, 2014, 10:28:07 PM

    Lee Ju Yeol, governor of the Bank of Korea. Photographer: SeongJoon Cho/Bloomberg

    The Bank of Korea will probably join
    the government’s efforts to revive economic growth by lowering
    borrowing costs for the first time since May 2013.

    To read the entire article, go to http://bloom.bg/1kY8hCs

    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 11, 2014, 1:29:05 PM

    The law has spoken on John Hinckley Jr.

    The government would have to overcome major legal hurdles to charge John Hinckley Jr. in the murder of James Brady some 30 years after the fact. But if that were the morally right thing to do, it would be worth trying, despite the improbability of success.

    To read the entire article, go to http://bv.ms/1suWde2

    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 11, 2014, 11:40:13 PM

    Aug. 6 (Bloomberg) — Taimur Baig, director of Asia economics in Singapore at Deutsche Bank AG, talks about India’s economy, government and central bank policies.
    India’s central bank left interest rates unchanged for a third straight meeting as retail inflation slowed and Prime Minister Narendra Modi released food stocks to offset the risk of higher prices from a weak monsoon. Baig speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Indian central bank Governor Raghuram Rajan urged the government to directly transfer cash to the poor instead of offering public services, saying the money would liberate millions from corrupt middlemen and politicians.

    To read the entire article, go to http://bloom.bg/1vyHH7h

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  168. Good morning! 

    Asia was mixed led by India up 1.4% which saved China from being red.  

    Europe 50/50 with Germany and France down 0.4% but Italy and Spain up 0.8% and UK flat.

    Our Futures are off the highs and just failing /TF 1,140, /YM 16,550 and /ES 1,937.50 and all are good shorts but watch /NQ (3,912.50) which will likely bounce off 3,910 or, at least 3,900 so quick money here.

    XLE looks like an interesting short as oil fell again below $97.50.  We'll have to check them out later.  

    Europe/StJ – They've got a lot of problems, so much so that UK may drop Euro and that can destabilize everything.  The main reason they don't is the strong pound would be bad for exports and tourism and then they'd have Japan's problem (but with half the debt). 

    Big Chart – Strong bounce lines remain in play.  

    Williams – $50M in the bank, one of the World's biggest celebrities and he can't find happiness – makes you think, right?  

    Looks nice Burr – I love the food truck business too.  Have you tried healthy smoothies?  Great beach snacks, kid friendly.  Vitamix has great recipes for drinks with no sugar that kids like (some with honey) and, if you made up health pamphlets to distribute – $5s could pour in!


  169. TF/Phil – As of when your comment went through, TF has fallen to 1,135… still a good short there?


  170. Yes but VERY tight stops over the line.  If /NQ fails 3,900, it will be easier but expect a bounce there and that might be time to take a quick profit.  


  171. good morning: phil!


  172. Phil – Whenever I see the word Vitamix, I cannot help but think: Vitameatavegamin. :-)


  173. Full version: Vitameatavegamin.