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Free Money Thursday – More Bad News is Good News for the Bulls

gdpEurope is not growing.

Italy, Romania and Cyprus are in Recession (2 consecutive negative quarters) and Belgium dropped 75%, Czech 100% (to zero), Germany down 130%, Latvia down 85%, Hungary down 30%, Poland down 45%…  These are NOT GOOD numbers!  

Yesterday we got a -1.7% reading on Japan, down over 200% from last quarter's +1.5%.  Our own GDP grew at just 1% from last Q, which itself was down 0.5% from the quarter before it but, fortunately, last year's Q2 was so terrible that, by comparison to that – we improved by 2.4% – and that somehow made people happy.  

The euro zone's three largest economies, which account for two-thirds of the region's €9.6T ($12.8T) GDP, all did not post any growth. German GDP shrank 0.2% from the first quarter and Italy's output fell at a similar pace. The French economy, the bloc's second largest behind Germany, stagnated for a second straight quarter.  How, exactly, does this translate into a bullish signal for the markets?  

The answer is: It doesn't.  The bullishness is nothing more than anticipation of MORE FREE MONEY over longer periods of time and that is, indeed good for our Corporate Citizens and the top 1% Human Citizens lucky enough to own them (we own lots in our Long-Term Portfolios!) as they are able to refinance debt at record lows and buy back their own stock with free money and buy whole other companies with free money – all supplied their friendly Central Banksters as well as the suckers who put their hard-earned cash into banks and bonds at 1% interest.  

That's right, the yeild on the German 10-Year Bund has dropped to 1% today.  Auntie Angela will hold $1M of your money for 10 years and give you back $1,100,000 when she's done – isn't that FANTASTIC!  It sure is for those of us who get to borrow that money – not so much for people trying to save.  

The solution is, of course, to put your money into stocks – which is exactly what is happening now and that is why the global markets are flying – even when the global economy is not.  But, is this a good long-term premise for holding stocks?  

Certainly stimulus has a positive benefit – WHILE IT'S HAPPENING – but, as a long-term INVESTOR (not trader), I am concerned about the possible negative effects that a lack of stimulus will have, not to mention an eventual REVERSAL of stimulus as the Fed EVENTUALLY has to get that junk off their balance sheet and the Government EVENTUALLY has to balance its books (only when a Democrat is in office, of course).  

Japan is now over 250% of their GDP in debt.  If you earn $100,000 a year, that's like being $250,000 in debt.  At the moment, because of all the coordinated easing by Central Banksters, who have agreed to punish anyone who tries to save money with ridiculously low rates for saving – the BOJ/You are paying just $2,500 (1%) in interest – that's easy to manage on a $100K salary.  

BUT, if people decide to stop lending money to you/Japan at 1% because you are, after all, $250,000 in debt and running a rapidly growing deficit and now you have to pay 2% interest – that's another $2,500 a year you need to come up with just to pay interest.  If you weren't balancing your books before – now it's even harder.  You can see how this can spiral out of control (see Greece for example) and suddenly no one will lend you money for less than 6% and now you have to come up with $15,000 a year (15% of your salary) just to make the interest payments on your old debt and, of course – if you default – you are completely F'd!  

As you can see on the chart above, Japan is MUCH WORSE than Greece and we, in the US, are not all that much better than Greece ourselves.  If you think this is all going to end well, you are as delusional as your friend who thinks he's in great shape because he's "only" $100,000 in debt and not $250,000 in debt like you are!  

We had a fantastic Futures Trading Workshop in our Live Member Chat Room this morning.  Since 7:37 I've been giving a blow by blow description of our Russell Futures short (from 1,140.2) as it played out – very good reading if you are interested in following such things.  

Later today, we'll go over all of the Members' Virtual Portfolios!  


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  1. Oil Lines

    R3 – 98.86
    R2 – 98.32
    R1 – 97.83
    PP – 97.29
    S1 – 96.80
    S2 – 96.26
    S3 – 95.77

  2. stjeanluc – Did you notice that the “CVR” signaled a short term top yesterday? 

  3. Europe / Phil – And CPI was at -0.7% (MoM) and 0.4% (YoY) so deflation a serious risk there now!

  4. stjeanluc – CVR being the VIX reversal system (of course).

  5. CVR / Diamond – I don't track it. I'll add that to my charting software though. 

    At the same time, the VIX PPO chart gave a "Buy" signal 2 days ago! A lot of geopolitical tension can mess up these TA systems though…

  6. Phil- As a beginner in futures trading I hope my comments yesterday support your views, as my only real failures hve been when I have ignored your sage advice and gotten ahead of myself trying to take on more risk than I should have. This seems to tip the equation away from being the house, which is what I was trying to tell Ricbah so he could learn from my bad experiences. This is what I love so much about this chat feature which is really unique to your site. The chance to learn from you and hear from other members and learn from them as well. In my case all I really have to offer is sharing some of the mistakes made since I am still early in the game with you. This morning I am on board the /TF trade and as I am writing this I have made $200 in just a few minutes as your premise seems to be playing out. Got in at 1141.20 and just missed opportunity to get out under 1139, so back to work for me.

  7. stjeanluc – The CVR can have a 1-3 day delay, so I use it as a warning system or a early alert to go long/short (short-term).

  8. /TF  Phil-   Probably still room to drop, but I am in charge of entertaining my autistic son this week in the morning, so I am out at 1138.70 for a nice $240 in my pocket this morning. Eggs benedict for me today! Thanks Phil.

  9. $TNX fading so the market may sell after the open.

  10. Good morning! 

    Good job Craigs!  Have you read "The Reason I Jump"?  I thought it was a very insightful book. 

    CPI/StJ – I wonder how much of that is falling oil prices?  Food has also fallen considerably – these are not bad things – I prefer to take these numbers in good context only (after I have had a chance to dig into the breakdowns).  

    Someone just put up this picture of my college housemates (but in our dorm lounge) – Justin (top left), Amy under his chin (and that's how tall she is/isn't), Kim next to here an my best friend Brian below Amy.  The big guy is Mike, who married Kim and made her name Kim Young – so everyone thinks she's Chinese!  The other girl is Lauren, another good friend who's now a lawyer and I don't know who the hostage was:

    Good demographic chart:

    Image Detail

  11. Doing God's work:

    All this tax finagling has been a big boon for Wall Street banks, which collect fees by advising clients on mergers and acquisitions. Perhaps it’s no surprise that one of the biggest M&A advisors, Goldman Sachs, has been the top inversion dealmaker, with some $342 million in fees from tax inversions from 1996 to 2014, according to research compiled by Credit Suisse. (It’s worth noting that tax inversions represent 1% of the nearly $32 billion in fees Goldman has collected for arranging M&A transactions over that period, according to Dealogic.)

  12. I guess it's better to be lucky than good:

    Even Napoleon inquired on how lucky a potential general was! I guess some economists might argue with the conclusions.

  13. Lucky/StJ – That's a hell of a big coincidence!  The "conclusion" is a non-conclusion, claiming there were too many factors to point to any single one so luck must be the answer but do we really believe that Republican and Democratic Presidents don't do anything, don't say anything, don't influence things in different ways?  Was 9/11 "bad luck" for Bush or did he ignore a briefing in August titled "Bin Ladin Determined to Strike in US" because he was on vacation?  

    Maybe the Democrats are "lucky" because they don't elect incompetent boobs to run the country?  

  14. Climate / Phil – Remember, it is our duty to harvest God's bountiful earth's resources!

  15. Phil

    Do you still feel confident to DD  on those QQQ puts (.94)?

  16. Oops, also in the Memo (as I'm sure some Republicans reading the above may think it was vague):

    Duty/StJ – Yep, there it is, in action! 

    QQQ/$25KP, DC – Yes, I still want to Double down but no, I want to see how the morning pop plays out.

    Meanwhile, oil is a nice bull play (/CL) off the $97 line WITH TIGHT STOPS!!!

  17. Luck / Phil – Needless to say, I disagree with that conclusion as well. For example, Clinton's decision to raise taxes and therefore eliminate the deficit probably had something to do with higher confidence and a better economy! And look how the austerity measures that the GOP wanted to impose in the US are working in Europe today…

  18. 8th straight quarter that WMT has cut guidance.  

    • Wal-Mart (NYSE:WMT): Q2 EPS of $1.21 in-line.
    • Revenue of $120.12B (+2.8% Y/Y) beats by $1.12B.
    • Press Release
    • Wal-Mart (NYSE:WMT) reports comparable-store sales were flat in Q2.
    • The traffic in U.S. stores was down 1.1% and the average ticket price was down by the same level.
    • Revenue for Wal-Mart International rose 3.1% to $33.9B during the period.
    • The company lowers full year EPS guidance to $4.90-$5.15 from $5.10-$5.45.
    • E-commerce continues to be a growing part of the story at Wal-Mart (NYSE:WMT).
    • The company saw double-digit growth for the channel in the U.S., U.K., Brazil, and China. Globally, e-commerce sales were up 24% Y/Y.
    • E-commerce sales added 30 bps to the comp in the U.S. during the quarter.
    • Wal-Mart has e-commerce websites in 11 different countries.
    • WMT -0.2% premarket

    1,142.50 looks like a reject line on /TF – lined up with 16,650 on /YM, 1,948.50 on /ES and 3,950 on /NQ – shorting the laggard!  

  19. Oops, so NOW I want to DD on the QQQ next week $97 puts in the $25KP, now 0.96 for an average of $1.13 on 10.   Half out if we hit $1.15.  

  20. On the hour

    10:00 AM ET

    • Dow +0.12%.
    • 10-yr +0.25%.
    • Euro +0.29% vs. dollar.
    • Crude -0.58% to $97.02.
    • Gold +0.11% to $1,315.90.

  21. At the open

    09:32 AM ET

    • Dow +0.11% to 16,669.50. S&P +0.14% to 1,949.40. Nasdaq +0.06% to 4,436.77.
    • Treasurys: 30-year +0.42%. 10-yr +0.22%. 5-yr +0.14%.
    • Commodities: Crude -0.59% to $97.01. Gold -0.07% to $1,313.60.
    • Currencies: Euro +0.23% vs. dollar. Yen -0.06%. Pound +0.02%.

  22. Red Robin Gourmet craters as margins compress and comps declerate

    09:58 AM ET · RRGB

    • Shares of Red Robin Gourmet Burgers (RRGB -20.2%) are getting crushed after the company missed Q2 estimates by a wide margin and sees its comp growth decelerate from Q1.
    • Comparable-restaurant sales +1.2%. Traffic -2.5%. Average check +3.7%.
    • Restaurant-level operating margin -110 bps to 22.2%.
    • Selling expenses as a percentage of revenue +120 bps to 3.9%.

  23. Credit Suisse emerges as GM bear

    09:46 AM ET · GM

    • Credit Suisse assigns General Motors (GM -1.2%) an Underperform rating and $33 price target
    • The investment firm thinks margins for GM in the U.S. could be peaking.
    • The ongoing cost of recalls could also hinder the automaker’s ability to buy back shares.
    • CS is forecasting a GM EPS miss for 2015 and 2016.

  24. Power of presidents: A friend pointed me to a fascinating article on "The Green Lantern Effect". I found it most interesting because of the extent that we are influenced by myths and where those come from:

  25. Tsakos Energy announces period charters for two existing Suezmax tankers

    09:42 AM ET · TNP

    • Tsakos Energy (TNP +1.4%) says it has chartered two of its Suezmax tankers with a European oil major, one for 24 and another for 12 months, with options for another 12 months for each vessel at an accretive base rate with profit sharing; TNP expects minimum gross revenues of $35M for the full period.
    • TNP also says it is entering a new partnership with another oil major for the construction and chartering of two LR1 tankers for five years, which are expected to generate minimum gross revenues of $62M for the period.

  26. Stock futures slip into neutral after rise in jobless claims

    09:25 AM ET

    • Stocks look set for a flat open, as futures gave up earlier gains following data on weekly jobless claims that rose more than expected; S&P and Dow flat, Nasdaq +0.1%.
    • European markets are higher despite disappointing GDP readings from the eurozone and Germany, which were viewed as reasons for the ECB to stick to its current policy stance or even consider additional easing measures; Asian markets are mixed.
    • The retail sector will be in focus, as Wal-Mart -0.2% premarket after lowering its earnings outlook and Kohl’s +2.6% after posting slightly improved Q2 earnings and same-store sales turned positive in July.
    • The claims data gave a boost to Treasurys, sending the 10-year note higher with the yield down 3 bps at 2.40%.
    • Still ahead: EIA natural gas inventory.

  27. Micron slips on negative DRAMeXchange commentary

    09:44 AM ET · MU

    • “The chances of DRAM prices undergoing further reductions have become significantly greater,” writes DRAMeXchange in a new report.
    • DRAMeXchange, whose site tracks DRAM/NAND spot and contract prices, cites growing DRAM supply caused by Samsung investments (previous), a July slowdown in notebook shipments, and soft Chinese smartphone demand.
    • Micron (MU -1.2%) has ticked lower following DRAMeXchange’s note. Shares went into trading today up 44% YTD, thanks in large part to expectations a newly-consolidated DRAM industry will continue seeing a healthy supply/demand balance.

  28. 10-year Treasury yield on track for another low

    09:16 AM ET · TLT

    • Initial jobless claims rising 21K to 311K makes for a good excuse for headline writers, but action elsewhere may be of more import as German 10-year Bund yields slipped below 1% for the first time ever amid stalled EU Q2 GDP growth. The Bund yield has since popped back to 1.01%, off two basis points on the day.
    • The U.S. 10-year yield is currently down three basis points to just under 2.40%, its lowest on a closing basis since June 2013. Up later, Treasury will sell $16B of 30-year bonds.
    • TLT +0.3%, TBT -0.6% premarket

  29. /clu4-/clv4 > 1.20

  30. Phil – What kind of play do you see on LNG?  They are at a huge peak.

  31. LNG meaning Cheniere Energy, not Liquid Natural Gas

  32. Handicapping the race for Time Warner

    09:11 AM ET · TWX

    • Wanda Group tops a list of potential acquirers of Time Warner (NYSE:TWX) put together by The Hollywood Reporter.
    • The Chinese real estate conglomerate is already building a $1.2B compound in California and has promised to make Wanda a global brand through major entertainment property purchases.
    • If a Wanda bid fails to materialize, some other heavy hitters are waiting in the background.
    • Disney (NYSE:DIS): The combination of Marvel and DC Comics is a natural, while the enormous leverage opportunities presented could make the acquisition price easier to digest.
    • Apple: Scrapping up the cash for a TWX offer isn’t a concern for the Cupertino tech giant, while the enormous content library could give the Apple TV product the edge it needs.
    • Google: The company has been coy about making a major media acquisition, but some analysts think the time is right to ensure it holds its position as peers diversify into content.
    • 21st Century Fox (NASDAQ:FOXA): Though Rupert Murdoch seems to have permanently wadded up the offer for Time Warner, some analysts say where there’s an ego there’s a way.

  33. NRG plugs into personal power with deal for solar start-up

    08:31 AM ET · NRG

    • NRG Energy (NYSE:NRG) agrees to acquire Goal Zero, which makes solar-charged battery packs that can fit in a handbag and mobile generators that could run the main components of a home, in a move that puts NRG into the mobile solar business.
    • The purchase, for an undisclosed sum, is one of a flurry of changes at NRG aimed at repositioning itself in a fast-moving utility market, CEO David Crane tells NYT‘s DealBook.
    • “Utilities have to change their business model and become more customer-oriented or actually get into distributed generation or microgrids themselves,” says Lux Research analyst Aditya Ranade. “Competitors like Duke have so far stayed away because it’s too far out of their comfort zone. That has left that field open to smaller, more nimble competitors like NRG.”

  34. Credit Suisse sorts through beer and wine stocks

    08:31 AM ET · TAP

    • Credit Suisse initiates Molson Coors (NYSE:TAP) with an Outperform rating.
    • The investment firm is more cautious on Constellation Brands (NYSE:STZ) which it assigns a Neutral rating.
    • Heineken (HINKY) has also been slotted at Neutral by CS.

  35. E*Trade July DARTs up 9.1% from a year ago

    08:28 AM ET · ETFC

    • DARTs of 153,671 were up 4.8% from June and 9.1% Y/Y.
    • Net new accounts of 10,848 not materially different than June or a year ago.
    • Total customer assets of $277.2M down 1.3% from June, up 18.4% Y/Y.
    • Source: Press Release
    • ETFC flat premarket

  36. Harmony Gold Mining Net Income of $12M

    08:23 AM ET · HMY

    • Harmony Gold Mining (NYSE:HMY): Q4 Net Income of $12M
    • Revenue of R3.76B (+8.0% Y/Y)
    • Press Release

  37. Freeport McMoRan downgraded at Stifel, Grasberg export restart is priced in

    08:16 AM ET · FCX

    • Freeport McMoRan (NYSE:FCX) is downgraded to Hold from Buy at Stifel, which says shares already reflect the restart of exports from Indonesia.
    • Stifel views the memorandum of understanding FCX signed last month with the Indonesian government as a step in the right direction since it removes the near-term overhang on shares, although it believes the 18% rally from March lows suggests the market had been expecting a deal; bigger questions regarding mine ownership and permits beyond 2021 remain, the firm says.
    • FCX -1% premarket.

  38. Earnings call doesn’t turn around mood on Noodles

    08:04 AM ET · NDLS

    • Shares of Noodles (NASDAQ:NDLS) fall sharply following the company’s Q2 earnings dud and are now off 30% since the IPO launch last summer.
    • During the firm’s earnings call, execs pointed out the “noticeable increase” in promotional activities in the restaurant sector. The plan is to incrementally increase marketing spending in 2H to combat traffic drops.
    • The focus from management is on hitting the restaurant’s long-term targets as a more somber tone is set for the short term.
    • Earnings call transcript
    • NDLS -23.7% premarket

  39. Keurig Green Mountain raise K-Cup packs prices by 9%

    07:52 AM ET · GMCR

    • Keurig Green Mountain (NASDAQ:GMCR) announces a price increase of up to 9% on portion packs for its brewing system.
    • The price hike will go into effect on November 3.

  40. More on Kohl’s Q2

    07:48 AM ET · KSS

    • Kohl’s (NYSE:KSS) reports comparable-store sales fell 1.3% in Q2.
    • Gross margin rate -10 bps to 39.0%.
    • Inventory +1.1% to $3.8999B.
    • Store count +5 Y/Y to 1,160.
    • KSS +3.3% premarket

  41. More on Plug Power’s Q2 results

    07:33 AM ET · PLUG

    • Net income of $3.8M, or $0.02 per share vs. a net loss of $9.3M, or ($0.14) per share for the second quarter of 2013.
    • Total revenue of $17.3M vs. $7.5M for the same period a year ago.
    • Cash and cash equivalents of $168.6M and net working capital of $190.4M at June 30, 2014. This compares to $5M and $11.1M, respectively, at December 31, 2013.
    • Q2 results
    • PLUG +8.4% premarket

  42. U.S. ground missions in Iraq still not likely

    05:53 AM ET · GULF

    • The U.S will likely not evacuate the Iraqi civilians trapped on a mountain by Islamic State fighters, says the Pentagon, after an assessment team found a tolerable humanitarian situation and that most refugees had escaped.
    • The U.N. estimates that about 400,000 refugees have fled the Dohuk region, including Yazidis, Christians and other minorities.
    • U.S. forces have also been busy arming Kurdish Peshmerga in order to repel Islamist insurgents who threaten Iraqi Kurdistan’s entire border.
    • ETFs: GULF, MES

  43. UPS, Fedex receive licenses to expand Chinese operations

    04:05 AM ET · UPS

    • UPS (NYSE:UPS) and FedEx (NYSE:FDX) have received Chinese licenses to expand their domestic shipping services to Beijing and other cities without needing joint-venture partners. The licenses increase access to a market second in size only to the U.S., says consultancy Deloitte.
    • The companies have been waiting for years to establish independent courier operations over their Chinese operations, but a 2009 postal law largely restricted foreign firms from delivering packages from abroad.

  44. GMCR – pre-announcing a 9% price hike.. sounds like trying to give a caffeine boost to this quarter's sales.

  45. Berkshire hits $200,000 (BRK.A)!    

    Submitted on 2014/07/21 at 9:33 am

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

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

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


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

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

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

    Submitted on 2014/08/04 at 7:42 am

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

    Good article Snow, thanks.

    Oil failed at $97.60 and now back to $96.70, in danger of breaking a major trend-line if they go lower. 

    Indexes popping back up again, which is fine with us as we get another round of short entries.  

    LNG/Ricbah – I was never a huge fan but they keep going up because it SOUNDS so promising.  Like AMZN, they remain wisely pre-income and I would not put a penny into them but they do have $1.5Bn – which is enough to burn cash for two more years – so I wouldn't short them either.  

    GMCR/Scott – They have to as their revenues are getting sucked up by their partners.  It's boosting the stock for now but, if they get blowback on prices (and they will as the cups sell in 40s) so $25 a box goes to $27.50 a box – that's not nothing!  Even the small 10-packs in the stores are $9.99 so $10.99 is sticker shock for people.  

  46. Netflix announces lineup of comedy specials • 10:42 AM

    Netflix (NFLX -0.4%) announces a full slate of exclusive comedy specials by well-known entertainers.

    Dates for shows by Bill Cosby, Chelsea Handler, Jim Jefferies, Bill Burr, and Chelsea Peretti were set by the company.

    Read comments

  47. Interesting (still early), but AAPL printing a hanging man on the daily chart …

  48. FU TSLA!!!!!

  49. Phil 
    August 13th, 2014 at 3:55 pm | Permalink Tweet thisIgnore this user

    VIX back to 13 though, people have certainly calmed down.  TLT 115.4, XLF $22.56 and that was goaaaaaaaaaaalllllllllllllllllll for selling more FAS calls – someone remind me tomorrow, please.

  50. HUGE spread on /CL U V

  51. Wombat = and the spread implies…?

  52. Oil tapped $96!  Now back over $96.25 but VERY BAD!!!   XLE will make a nice short if this continues. 

    FAS/QC – Thanks, I looked at it earlier and decided that, though it looks toppy short-term (and we don't believe it will go much higher) the long-term trend looks like it may test $105 again. 

    XLF looks the same, with $23 in play and, since the Sept $105 calls are only fetching $1.10 – I'm not seeing the risk matching the reward at the moment.  I don't think $105 will hold (or even be tested) but I'm not so sure that I want to bet a $4 loss against a potential $1 gain so – no play!  

    Oil spread/Wombat – That's caused by the sudden drop.  If you wanted to take advantage – now is the right time!  

  53. Interesting take:

    India might make a nice short (good laggard if we begin to fall):

  54. Economy / Phil – Looking at the global macro picture with Europe going nowhere, Japan seemingly hitting a wall, China a potential black hole, Russia in a crisis of their own doing and even Brazil having problems, I find it hard to see where growth will come in besides the American consumer at this point!

    It's quite possible that with jobs coming back somewhat that we can sustain some moderate growth over the next couple of quarters, but clearly we'll need outside help! I heard an interview on French radio this morning and the guy from the opposition was blaming the government for the lack of growth in France and interestingly enough the journalist didn't point out that the rest of Europe is not growing either so how could France be any different. Surely, there are issues in France, but it looks like a case where we are so integrated now, that we can't grow at very different speed! 

  55. Scottmi / its the diiference between the two fron months

    Phil / Love to but I'm already in. I just find it curious this happens the day BEFORE options expire. How do you see a .65 delta being rolled out ?

  56. STP $129,233, LTP $595,344 = $724,577.  I'll be reviewing all portfolios today (expirations tomorrow) and I guess we want to stay neutral into the weekned but I'm leaning a bit more bearish as we struggle along at the strong bounce lines.  Fed minutes next week makes the whole thing a wild card:

    Week of August 18 – August 22

    Date ET Release For Prior
    Aug 18 10:00 NAHB Housing Market Index Aug 53
    Aug 19 08:30 CPI Jul 0.4%
    Aug 19 08:30 Core CPI Jul 0.1%
    Aug 19 08:30 Housing Starts Jul 893K
    Aug 19 08:30 Building Permits Jul 963K
    Aug 20 07:00 MBA Mortgage Index 08/16 -2.7%
    Aug 20 10:30 Crude Inventories 08/16 1.401M
    Aug 20 14:00 FOMC Minutes 7/30  
    Aug 21 08:30 Initial Claims 08/16 NA
    Aug 21 08:30 Continuing Claims 08/09 NA
    Aug 21 10:00 Existing Home Sales Jul 5.04M
    Aug 21 10:00 Philadelphia Fed Aug 23.9
    Aug 21 10:00 Leading Indicators Jul 0.3%
    Aug 21 10:30 Natural Gas Inventories 08/16 NA

    WMT is flat again – was a good addition to our Butterfly Portfolio.  

    Crony Capitalism 101: Want To Avoid The SEC? Bribe Your Friendly, Neighborhood Politician

    4 signs this bull market is on its last legs

    Nearly Every Abrupt Market Downturn Shares This One Characteristic

    Everything Cisco(CSCO) Is Saying About Emerging Markets Is Depressing

    What Do These Numbers Have In Common: 1,039,000,000,000,000 And 2,170,000,000,000. (graphAs the following two charts show, Japan and Italy just broke another record – sovereign debt loads (1.038 quadrillion JPY and 2.17 trillion EUR respectively).


    Stagflation Stalks Abenomics by William Pesek

    Xenophobia Concerns in China Mount as Europeans Cry FoulTensions in China’s foreign business community escalated to new highs after European companies protested that local authorities involved in an antitrust crackdown are abusing their power through intimidation tactics. Chinese investigators are picking on foreign companies, pressuring them into accepting punishments and depriving them of full hearings, the European Union Chamber of Commerce said yesterday in a statement, without naming anyone. Representatives at the chamber, which has about 1,800 members in the country, declined to elaborate on any specifics beyond the statement. 

    As Chinese Credit Plummets US Stocks Soar On Hopes Of More PBOC Easing; But Is Conventional Wisdom Again Wrong

    China Banks More Cautious in LGFV, Property Lending. Loan growth has slowed to the real estate industry, local govt financing vehicles and sectors with overcapacity including steel and cement as Chinese financial institutions have been more cautious in lending to these areas since the beginning of July, citing Sheng Songcheng, head of the statistics dept. of the People's Bank of China.


    China 1H Energy Consumption Fell Most in 6 Years. China's energy consumption per unit of GDP falls 4.2% y/y in 1H, citing National Development and Reform Commission. Consumption fell 3.7% last year and 3.6% in 2012, the report said.

    Russian Aid Convoy Risks 'Triggering A Dangerously Volatile Situation'A fleet of 280 Russian trucks carrying humanitarian supplies to Ukraine is currently at a Russian military base 200 miles east of the border, and the confusion surrounding the convoy risks provoking a conflict. ?

    San Diego Pension Dials Up the Risk to Combat a ShortfallSan Diego County's Pension Manager Is Extreme Example of Those Using Leverage to Boost Performance. A large California pension manager is using complex derivatives to supercharge its bets as it looks to cover a funding shortfall and diversify its holdings. The new strategy employed by the San Diego County Employees Retirement Association is complicated and potentially risky, but officials close to the system say it is designed to balance out… ?

    Massive SWAT Presence In Ferguson Unleash Tear Gas & Rubber Bullets: "Go Home Or Be Subject To Arrest – This Is Not Open For Discussion" – Live Feed

    Job = Just Over Broke

    Integrated/StJ – Yes and my issue is that the US is integrated as well.  This idiotic attitude that the US can carry, or even ignore the rest of the World is from the 1960s and not even remotely true today.  CSCO just proved that but our markets are green again just the same – it's complete idiocy and makes me want to go back to 100% cash (if only there was somewhere to put the cash!).  

  57. Spread/Wombat – Oh, that sucks.  That's why I don't play those – way too annoying.  Just have to roll out to a longer month and hope the madness subsides.  

    1,1949.5 hit on /ES but failing so far so game on for shorts there, /TF 1,142.50, /YM 16,650 and /NQ 3,955 until/unless /ES gets back over (or 2 of the others).  

  58. It's a nickels and dimes kind of day to day – easy to make money in Futures if you are not greedy – very hard if you are!  

  59. DXD tomorrow $25 calls very reasonable at 0.80 with a 0.07 premium.  Could be good for $1.20 if the Dow drops back to 16,550.  

  60. US / Phil – I think that the difference is that the USA has a more resilient consumer base. Obviously, a hit like 2008 does a lot of damage, but there is still a lot more internal consumption here than even in Europe and certainly China. That combined with a modest stimulus package from the government as opposed to austerity has been the difference so far!

  61. Interesting map:

    The news that, say, Saudi Arabia depends heavily on its oil wealth probably won't shock you. What really jumps out here, however, is that most of the people who live in countries that have a low resource contribution to GDP live in rich countries (the USA, Japan, Germany, France) not in countries that lack natural resources. Places like Canada and Australia that have high incomes and resource-dependent economies take up a fair amount of space on the map but they have very little population density. There are more people in Italy than in Australia and Canada combined.


  62. Let's plan a webinar with the pope and talk about inequality:

    NBC News reported that Francis told Thompson about his plans to travel to America's "City of Brotherly Love." He mentioned the city's World Family Day, which is scheduled for September 2015. 

  63. Phil,

    In the looking for candidates for buy-write dept, what are your feelings on the electric/nuclear utility space (my order of preference):

                 PE    Yld     12 mth channel

    ETR      13     4.6        midway

    EXC       15    3.9        low

    SCG        13    4.2        low

    SO          17   4.9      low

    Thanks in advance

  64. Phil – I know that you are not the biggest fan of Relative Rotation Graph (RRG) Charts, but I find them useful to get a better visual of market rotation and sector strength.

    For instance, the Dow 30 Industrials RRG (with a 4 week tail) visually shows what is happening within the DOW over the past month. If you click on the “%chg” in the chart below the RRG, you get a better picture of how weak the DOW has been and what is propping it up (or dragging it down). I think if you play around with these RRG’s a little more, you might like the visualization that they do provide. If nothing else, posting a RRG picture occasionally may help others.

    However, I could be wrong … ;-)

  65. Diamond – I didn't realize that INTC had been such a big Dow driver over the recent past. Up 30% over the last 7 months. That's big for a Dow component!

  66. stjeanluc – Yes, RRG’s really help with visualization. I do find them useful. Of course, they can make MoMo’s look even crazier!

  67. Wombat/CL Spread – What's your plan here?  I'm in too, and down a decent chunk.

  68. 6 more days to contract expiration.  

  69. Ferguson-& yes, this is exactly what America has come to-Thanks NRA. Guns really "save" people when they are in the hands of psycho-law enforcers. I know personally as we live in an area where law enforcement is absent & the worst law-breakers are the "enforcers." They are thugs here & apparently everywhere now; liars all. Being in the "big boys club" gives them that mob mentality=the worst.

  70. A first: share of Buffett's Berkshire tops $200,000

    Buffett, 83, hasn’t lost his investing acumen, says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

    “Berkshire shares were $100 when I started at S&P in May’77, (which says) I’m old (and) Warren is very good – that is a gain of 22.8% annually compounded,” says Silverblatt.

  71. palotay // UV
    this is quite a spike +50% on no new news, so i'm inclined to give a chance to normalize. however my MO is always to cash out when the options expire ( tomorrow ); this is typically when the two legs become closest. I could kick myself, becasue 3 days ago i could of cashed this out with 110% gain on margin. 
    So, I usually wouldn't hold over the weekend, but in this case, if you're dealing with a reasonable loss, I would hang on – you can always roll into next month if it doesn't calm down.
    There are still 75K contracts to roll out, as well.

  72. Pharm

    Any update on PLX still a hold  ?


  73. Yea, my loss isn't too terrible yet, and I agree it makes sense to hang on.  Rolling hurts real bad, because the spread is a lot tighter on the next month's contract.

  74. amazing that 5 years into a "recovery" central banks are still at global economic crash stimulus levels….economies are fading….and investors are optimistic because they are fading….meaning more of the same that isn't working….twilight zone shit….aaii bulls jumped this week…interesting that all the euphoria over china reinflating bubble….isn't boosting copper or china rebar….or oil…all trade terribly…every other time global investors got bulled up on china debt gorging…those spiked

  75. Ferguson is only a broken blister. The arming up of police is to control a very unhappy America. So far the fear game is working on all in the bubble. The police killings in ID make no news because the victims are white of Hispanic. It has been multiples for years and as in the world, religion is behind it, declaring evil.

  76. Phil…….too early to jump to conclusions but YOY July to July overall cargo drop on west coast.  We will be watching carefully Aug/Sept.  The discouraging point….summer months usually some of the busiest of the year.  For after hours reading micro unintended tanker market consequences….

  77. IBN/ HDB on fire! 

  78. qcmike / PLX – Pharm weighed in on PLX on Monday here.

  79. US/StJ – I'm not talking about our Consumer Base, I'm talking about the fact that we're 5% of the World's population and, though an impressive 20% of the World's GDP, still not enough to move the needle much, even if we add whole point as that only adds 0.2% to the World but most of the growth is internal (we're a service economy and we feed ourselves), so even less help to other countries.  We used to be 60% of the World's GDP, that was impressive!  A lot of Macro Economists still act like we are because — well because they are old – who the hell becomes a Macro Economist these days?  

    Brotherly love/StJ – LOL, won't he be disappointed if he thinks that title describes the city?  

    Oil tagged $96, another good long entry if you don't mind poking the bear.  It's bound to bounce on one of these lines…

    Nukes/8800 – I like CCJ because they don't care who wins but EXC and SO are nice too.  You have to be careful re. age of plants and conditions as well as what kind of long-term capital spending plans they have but those two are generally strong and trustable.  

    RRG/Diamond – Only because I'm old and they confuse me!  I'm sure they're very useful, I just can't relate to them.  It's like those images you can see if you stare at a bunch of dots – always looks like dots to me.  

    Ferguson/Scott – What a mess! 


    They are showing plenty of force, but they are not showing the pieces of Michael Brown’s killing to show they haven’t brought this anger on themselves. 

    They haven’t “shown” the identity of the officer who killed 18-year-old Michael Brown. They haven’t “shown” the autopsy report with the number of bullets pumped into his body by the unnamed officer. They haven’t “shown” why they didn’t bother to interview Dorian Johnson, the 22-year-old with Michael Brown who watched him gunned down in the street. They haven’t “shown” any recognition of what they’ve done here. Or why people just won’t behave the way they want them to.

    There is a brief window of opportunity for the government of Ferguson to seize the story, to show why one of theirs didn’t murder some unarmed kid in cold blood.  They let that window slam shut, choosing to leave a void where they should have had a narrative. 

    Then came the second story of how a police force, without any story to offer, pulled on its combat boots and took to the streets to quell too much sadness, lighting the fire of fury instead.  The images, a collection of which are posted by Mark Draughn, show a people under siege.

    This is the story, that in a poor suburb of St. Louis, a combat force has seized control by violence and fear to overcome the natural reaction of a community to the murder of one of its children.  They showed them. They showed us.  It’s all there to be seen. Look at it. Not even the cops can muster an excuse.

    This is another Macro prediction I have been way too far in front of.  Back in 2010, I was predicting we'd start seeing more riots as wealth inequality becomes a bigger thing.  Turns out it's a slow boil – but still getting warmer…

    INTC/StJ – Yes but price-weighted means $10 "only" added 80 Dow points – still very nice, of course, but 0.5% of the total.  

    Russia/Angel – Yet oil just sits there?  As to stimulus, I guess people don't really SEE that the stimulus is such a big, ongoing part of our economy.  Money is just constantly being pumped in so it seems normal but the economy itself can't survive without it so, the question is, what happens when the stimulus loses effect or runs out?  You can keep saying "more stimulus" but we've already seen diminishing returns – especially in Japan so it seems like 250% of GDP is about the cap.  The good news is, we have 140% to go!  

    Obama getting grayer every day.  

    Cargo/Living – That was to be expected with all the bad news out of Asia.  Thanks for link.

  80. mrmocha , Pharm

    Thanks for the update on PLX

  81. Today so far looks like a mirror of yesterday afternoon.

  82. Strong signal of impending sell off, or was it just Obama effect. America is in big cop trouble, they have armored vehicles and military weapons. Homeland security always was the problem and confiscating property to support this police state?

  83. EPZM…zoom!

    PLX….thx for putting in the link. This market is a riot in itself.  Oye ve!

  84. Michael Brown/Phil

    They did try to interview Dorian Johnson according to his lawyer but they told the police department that he will schedule an appointment with them to talk with counsel present.  The officer who shot him is screwed though.  They will not be able to form a believable excuse for this.

  85. rustle123

    That the officer is screwed is a start but he needs to get the death penalty to fix the wrongs done by police. I am right with private on the cops are the criminals.

  86. nice little surge through resistance takes us to new daily highs as stops get triggered .. 4 of 5 strong bounce lines getting further into the rearview .. low volume grind taking us back to all time highs in the coming days? 

    jnk feeling very good about itself again after a brief bout of anxiety

  87. Phil,

    Wait until Police/paramilitary force finds out that a few of them will be laid off due to fiscal difficulties at Ferguson….Then watch their attitude change, especially when their fat pensions and generous benefits are affected especially in a county bankruptcy…..

  88. shadowfax/death penalty

    At best this is 2nd degree murder which is not a death penalty offense.

  89. $25,000 Portfolio Review ($25KP):  It's hard to make good returns with these restrictions but 18% not so bad for 7 months.  I'd like to get us to $35K by year's end and that should make $50K a slam dunk next year – as we'll be able to add a bit more risk.  

    • GMCR – Just announce a price increase but, to me, they are doing this to stem the revenue downturn I thought was obvious from their last report.  Bottom line is, less machine sales (everyone has one now) and more partners means they are splitting all the cup revenues, where they used to collect the majority of them.  If there's any consumer backlash on prices – their partners will be pissed as this is GMCR's problem, not theirs.  Still, time is ticking on our puts so about 30 days and then we have to bail.
    • QQQ – Just added and just doubled.  
    • YHOO – Waiting for more AliBaba news but making progress.  

    Butterfly Portfolio:  Back on track now that CZR isn't chewing up our monthly profits.  It's not so much that we're up 24.3% that makes this my favorite portfolio but the fact that we haven't had any serious trouble on it at all.  If you are a casual investor – this is definitely the way to go!  

    BTU – Still moving up and, since it's testing the $16 line in a weak market – I still don't want to cover just yet.  Keep in mind we aggressively sold the Jan $18 puts, so we already have a firm bet on BTU going higher, a short call hedges that bet somewhat and caps our gains.  So, the question is – what do we think BTU is worth?  They lost $500M the past two years and have $10Bn in debt and not much cash ($500M) but their cash burn is under $200M so they can wait about 2 years for coal prices to come back.   For me, BTU is like ABX – may as well own the best in the sector and trust them to figure out how to make money down the road…

    • DIS – No pressure as we sold Sept puts and calls which are a bit off, but the market is weak so we'll see if they pull back.  Meanwhile, we collected $5.20 and now $3.40 in the money – not even an issue, is it?   See why I love this portfolio?  
    • JPM – Right on track and Sept 
    • OIH – Brand new
    • TXN – Sold Octobers and they are dead center.
    • WMT – Brand new and earnings were perfectly flat for us.  

    As time goes on with the Butterfly Portfolio, we add more and more trades each Q so, in theory, it becomes more profitable too.  Essentially, at a certain point, we've paid off our long hedges and the short puts and calls become all profit.  As each trade hits that benchmark, it becomes "safe" and then we are free to open up a new slot but, as you can see, it's generally one a month.  

  90. To say that oil is not trading well is an understatement – under S3 right now and not looking like ready to stop there!

  91. Ferguson – I think I'd kind of like to get all the facts in the case before calling for death penalties, etc.   Just a quick I have…

  92. Oil/StJ – Hopefully this answers people's questions who were asking why I didn't want to go long on USO, etc….  Oil is at a point where we may get a nice panic run down to $85ish.  It's too dangerous to bet on but will be interesting, nonetheless.

    XLE can be bet though, Sept $93 puts are just .95 so let's put 5 of those in the $25KP.  

  93. rustle death penalty

    He won't get it, I actually doubt time in jail but execution is about the only penalty that would satisfy people.

  94. marketwatch really giddy about some blogger calling for qe4

  95. Phil

    Facts don't matter after this many police abuses. I am only stating what millions of people want. I want the big guns taken from the cops and a few other unconstitutional over looks. This is not fixing America it is breaking it!

  96. President has ceased to dye his hair

    STIMULUS ANTI RECOVERY CHEERLEADERS//yes..but i seriously doubt the catalyst for the next collapse starts in US.

    check out the video….that isn't humanitarian aid

  97. Non Sequitur by Wiley Miller :-)

  98. Shadowfax

    That's called a lynch mob and I'm glad that is not allowed anymore.  Just to be clear, no one would get the death penalty for this.  It was not premeditated.

  99. I'm with rustle.  In the face of relentless injustice, the greatest challenge is not becoming like them.

  100. PHARMBOY are you out there?  ZS Pharma…ZSPH?  Metabolic disorders….. just beginning early trials for patients with Hyperkelemia.   Interesting.  Curious really about the science.

  101. Phil – Any reason why oil tanker stocks are up today? (ASC,FRO,NAT,TK,TNK,TNP)

  102. Income Portfolio Review:  Back on track, up 6% in 7 months (this is a very conservative portfolio looking to make 10% a year).  Year one is always rough for this portfolio as we have to establish base positions we will later turn into income producers.  Also note we're using no margin (and even less cash) in this portfolio, just $145K out of $1M, ideally, we are waiting for stocks to go on sale so we can buy more – no luck so far!  

    As these are long-term positions that are mostly new, most of them show no profit yet.  Especially with the higher VIX (it was more like 12-13 when we were selling), which penalizes us for the premiums we sold before time has a chance to rebalance things for us.  

    Short Puts – As I mentioned in recent webcast, there are none of these I wouldn't want to own at the net price so it's simply an opportunity if you like HOV, GTAT or TASR.  If GTAT were down 20% or so, I'd buy more and HOV we have plenty of but:

    • TASR – Let's sell 10 more of the 2016 $15 puts for $4.60.  Net $11.40 for TASR???  OK!!!  
    • ARO – Love that one.  Good for a new entry. 
    • TASR – There's the rest of that trade, I need to combine them.  
    • CLF – Still playable.  
    • NLY – Lovely, lovely dividends!  
    • OPTT – Not dead yet.  
    • XCO – Off track a bit, good for new entry. 
    • AAPL – Our problem child (technically).   Currently showing a net of $1,000 but, if AAPL were to expire at $97.50, then the spread would be $11.79 x 7,000 ($82,530) and the short puts would be worthless and the short calls would be $13.21 x 3,500 ($46,235) and that's net $36,295 or +7% to the portfolio and, of course, the short calls are October, so we still have another 15 months to roll them and sell more premium.  See why I don't worry?  
    • ABX – How do I love them, let me count the ways.  We need more of these, not yet though.  
    • CCJ – Almost as nice to own as ABX.  
    • CLF – Good for a new entry (usually is).  
    • CZR – Good for a new entry but risky.  
    • EBAY – On track
    • IRBT – Good for a new entry (we already doubled down on the short puts).
    • LULU – Good for a new entry
    • PFE – Good for a new entry.
    • PNRA – Good for a new entry.  
    • RIG – Good for a new entry
    • TEX – Good for a new entry 
    • TM – Good for a new entry 
    • TWTR – Way in the money
    • UBNT – Good for a new entry
    • WFM – Good for a new entry.  

    So, plenty of opportunities for new Members looking for nice, long-term positions that we'll be tracking closely.  I see 14 trades that can still be gotten into for the same or less than our original positions!  

  103. Oil broke down sharply once it took out yesterday's low and it's about 8 percent below its 50 day moving average which is about as extreme as it gets before bouncing back toward the line also some significant positive divergence on the intraday charts  FWIW

  104. Hey all

    You got me wrong! I am saying what America wants! You have to try to relate to the discouraged and the problem is they are powerless. I want the death penalty ended, as is we are no better than the worst in the world. Friendly looking cops would help. Allowing peaceful protest would do even more.

  105. i think people have forgotten how tied emerging markets' economies are to commodities…their growth will slow with commodity drop

  106. Where I live, the police/sheriffs departments have been involved in quite a few very questionable killings and not one of them to my recollection has even been indicted.  When you have grand juries that are basically hand selected by the prosecutors and judges you are not going to get an impartial panel to rule. This only leads to more frustration in the communities where most of these things seem to occur.  I don't know how to it because the power elite are pretty well entrenched.  I am particularly concerned when I see local police dress up like soldiers.  To me, it just sends the wrong message.  

  107. Wombat/CL – This is getting pretty nuts.

  108. Music – for a distraction, my teenage son introduced me to this very cool musicmap last night:

  109. wombat,

    Last month spread went up to almost $2 the day after expiration.

    Be careful!

  110. Blogger/Toe – Shows how desperate they are getting when they try to prop up new heroes.  I'm surprised the MoMos are holding up so well with Yahoo Finance cutting off the pumpers Fool and Seeking Alpha.  YFinance is once again useful to me!  

    Aid/Invasion/Angel – Whatever it is, the sooner it's over the better at this point.  Let Russia have them and we can wring our hands about it and say "what a shame" but stopping them is just going to lead to disaster.  

    152316 600 humanitarian aid for Donetsk cartoons

    152300 600 Trojan Putin cartoons

    152317 600 next move cartoons

    Tankers/Diamond – Sure, it was in the news, TNP chartered two tankers to energy players, presumably for long-term storage.  With a glut of supply filling all available land storage and low prices making producers less inclined to sell (not to mention low demand), they have to put the oil somewhere, so they begin to charter tankers to hold it until (hopefully) they get a better price.  That's a mechanism that then keeps prices lower longer as the shadow supply is put out to sea and brought back to land any time the price begins to gain traction, flooding the market once again.  Not a good sign for oil prices but a good sign for tankers.  

    Oil/Angel – Now failing the 5-year support, don't be quick to bet on a bounce here.  

    That support line was almost $2 ago!  Now they have to get back over it pronto or – BIG TROUBLE!!!  

    Powerless/Shadow – Thank God they are powerless or our heads would be on spikes!  They (we actually) can't allow peaceful protests because it might give people ideas and ideas that upset the status quo in which WE (they) get all the money and promise to trickle on the bottom 99% IS WHAT WE LIKE!!!  It's very easy to fix income inequality in a land where 10% of the people have 66% of the wealth because we can give 10% of what we have (6.6%) to the bottom 90% and they go from 33.3% to 39.9% – a 20% improvement in the lifestyle of 270M people just from 30M people who live fantastic lifestyles cutting back by 10%.  

    The problem is, if we actually did that, the bottom 90% might see how easy it was and then decide another 10% wouldn't kill us anywhere near as much as it would benefit them and our protests would sound insincere and "greedy" and then they'd be forced to put our heads on spikes and take all our money so they could triple their standard of living and make due without 30M of us.  

    Nope, sorry Shadow – that we cannot allow!!!  Am I suppose to let my children grow up in a 5,400 sq foot home instead of 6,000?  Or perhaps you think we can give up a closet in our ski condo – no way man!!!  Do we not need 3 cars for two drivers?  Could my pool be 44 feet long instead of 50?  How would I count my laps???  Asking us to make ridiculous sacrifices like that are why we take our money and buy thugs to oppress you in the first place!  angry

    Oops, sorry, my figures were wrong – we have 74.5% of the wealth:

    Commodities/Angel – What growth?  Demand is not picking up and another slump in housing will kill it completely.  If China pops – we are all very screwed.  

    Data overload Scott.  

  111. jr_mints

    Glad to see you get my point. I have seen the Teton county sheriff department dressed like WWIII for a traffic stop, never has there been 10,000 people in Jackson at the same time, prime tourist season before 2007. They even have a robot, last murder was the 60s I think. East Idaho cops killed 2 people in 2 months, maybe 250,000 in the entire area. All they get is paid leave. 

  112. Palotay
    Sold some $1.60's – waiting waiting waiting

    ( the volume of rollable contracts went from 75K to 114K in the last hour )

    whats your cost basis ?

  113. Phil or anyone,

    Few questions on the 25kp, 

    where did the gain come from?  I've only been following it about a month so I didn't see previous positions in there.  

    Also, would you still DD on the QQQ?  I bought yesterday at 1.19.

  114. shadow, around here it is usually 3 days administrative (desk duty) leave while it's "investigated".

  115. 2 reporters at ukraine border saying russian military invasion of ukraine started 30 minutes ago….market must not believe them

    or maybe market is dirty dancing in a dark corner with a hot chick/guy and is too messed up on monetary crack to notice…

  116. jr mints

    Where are you?

  117. Angel – I'll go with #2.. and DJ Yellen is at the turntable.

  118. Shadow, right here!  Just kidding.  Houston

  119. Russian military invasion – Bullish!

  120. Interesting video on civics and power.  Remember when we used to care about this stuff.  This is why "they" have taken Philosophy off the school curriculus in this country…  Ignorance is bliss – especially for the oppressors!  

    $25KP/Dforster – There were, of course, a year's worth of trades.  If you've only been here a month, you missed 6 months worth.  As to QQQ, we did, in fact, double down earlier (see above, in blue) and we now have 10 at an average of $1.13 and they are now .76 so I wouldn't DD again but I'm comfortable with 10 into the weekend. 

    Speaking of portfolios, still have to do STP and LTP.

  121. Powerless / Phil – I have been watching that Continuum show in SyFy that deals with time travel. Low budget and a bit cheesy but I always found time travel fascinating. In any case, you have these people coming from year 2077 and by then, corporations are in total control and they even have what is called a Corporate Congress and police is cracking down hard on anyone not toeing the corporate line (basically fascism). I am guessing the authors have a good sense of humor since the current Congress could be called that already when Boehner collects $22M. The best part was when one of the guys traveling from the future to change that got frustrated because he found that he could not motivate people of today to make the changes needed to avoid these catastrophes! Very subtle, but pretty accurate – #climatechange!

  122. God @TheTweetOfGod  ·  2h
    In America everybody is innocent until proven guilty and/or repeatedly shot.

  123.  phil,

    thanks.  Yeah the 6 months worth of trades is what I am wondering about.  Just curious what positions those were.  or at least what were some of the more profitable..

  124. Stj – we have some serious and/or-ing to catch up on with cops and legislators.

  125. Your corporate Congress:

    Rep. Steve King (R-IA) said on Wednesday that he saw no reason to be concerned about the possibility of racial profiling in police clashes with protesters in Ferguson, Mo. because the protestors all appeared to be of a single "continental origin."

    "This idea of no racial profiling," King said, "I've seen the video. It looks to me like you don't need to bother with that particular factor because they all appear to be of a single, you know, of a single origin, I should say, a continental origin might be the way to phrase that."




  127. jr mints Houston

    People in blue states are clueless how bad the red states are, you would think the GOP gives a hint, people believe what they want, gun control is different and not having it might save us if the revolts starts now. Lots of used military equipment like interest cheap to free!

  128. any comments on DE?  I've never seen it discussed here, seems like a pretty good value  w/ a pe less than 10.   

  129. Phil/ARO

    I noticed in the Income Portfolio that it does not show that we sold ARO 2016 puts.  Perhaps they never filled, but they still can be had for (.85-.90). 

  130. Phil/ARO

    Wrong portfolio-My bad!

    "ARO/DC – Yes because you have a semi well-known national brand, which makes it valuable to SHLD, WMT, JCP, etc to bring in-house, so call that $500M to build yourself and the company is already just $250M.  Plus they have $25M cash, $170M inventory, $195M Property, Plant, etc against no debt (but $217M a/p) and, of course, $2Bn in sales.  Though down 15% from last year, $2Bn is nothing to sneeze at and, at $250M for the whole company, there has to be someone who thinks they can turn $2Bn in sales into some profit.  It's very speculative and, if not sold, they are likely to dillute but net $2.20 from selling the 2016 $3 puts for .80 is a nice entry position, so yes to that sale and we'll add it to the STP officially. "

  131. $SPX has a lot of overhead resistance at 1960 and the 50dma at 1956.74 as well as more uncertainty over the weekend. I must be looking at the chart wrong because … well … who exactly is buying here?

  132. Best comment on Twitter regarding the Russian convoy crossing into the Ukraine:  "@shaunwalker7 @maxseddon They're probably just cops from Missouri who got lost."

  133. Quote of the day:

    Erik Swarts, “Follow leaders, trends – follow performance. It’s a hardwired survival trait built into all of us, and generally speaking – exposes our achilles heel at times, when it comes to bends in the road and future expectations.”  (Market Anthropology)

  134. Russia/Rdn – As I said above (but snidely) – let's just get it over with and let Russia have them.  Actually, who are we kidding, the minute we (NATO) let that convoy cross the boarder – that's exactly what we were doing.  

    Short-Term Portfolio Update (STP): OK, this has been bothering me all week and now we need to get to the bottom of it.  This morning we were up 29.9% and now we're up 31.7%, even though the market is heading higher.   Are we still not bearish enough or are we just amazingly good at picking offsetting bullish plays?  It might seem funny now, but it won't be funny at all if the market starts to tank and we haven't covered our LTP properly.  

    • DXD – Our Oct hedge.  2 months out and right on the money is "fine".  50 contracts means a 10% drop in the Dow runs DXD up 20% to $31 and that puts our calls $6 in the money for $30,000, which is $24,000 more than they are worth now – so that's our coverage from this insurance policy.  
    • GMCR – Same as $25KP but we have more of them.  
    • CI – Offset something and I'm happy with them.  
    • CMG – Offset something and I'm happy with them. 
    • NTAP – Offset something and I'm happy with them.  
    • RIG –  Offset something and I'm happy with them.
    • ARO – Same as $25KP but bigger.  
    • CAKE – Off track.  If they go lower, I'll want to sell puts and roll the long calls lower (and maybe out to Jan).  Some restaurants have reported poor margins and all are suffering.  
    • SQQQ – December hedge that's not in the money but gives us up to $40,000 (+$31,200 from current) if the market drops 10%.  That means we have $54,000ish of pure protection in this portfolio.  
    • YHOO – Same as $25KP but more of them. 
    • WYNN – On track
    • XRT – On track
    • BIDU – On track
    • FAS – Waiting to make a new sale.  I guess we should tomorrow and not risk the weekend.  How about we (me and the voice in my head) compromise and sell 1/2 (5) of the Sept $100 calls for $3.10.  That puts $1,550 in our pockets and we do still have those big short puts as an offset and 15 months to roll, so why not?  
    • FB – Oops, thought that was a bullish spread or I would have pulled it after earnings.  Oh well.  Obviously we don't think FB will go below $50, the idea was to offset the short puts – just in case we were wrong.  At this point, we need to buy back the short $62.50 puts (0.15) and sell our long Jan $60 puts ($1.58) and just leave the short, naked $60 puts to expire with a stop at $1 (now .45).  
    • SCTY – On track.
    • SLW – On track
    • TSLA – Our underperformer.  As it's just 2 contracts and as I feel strongly about it, how about we sell our 2016 $220 calls for $72 ($14,400) and roll the -$14,000(ish) of both the short 2016 $300s and the short Sept $200s to 7 short Jan $275 calls at $21 ($14,700).  If TOS goes over $265, we can cover with 10 long 2016 $300/360 bull call spreads at $16 ($16,000) but I'd feel better with the naked short calls.  

  135. ZS Pharma/Living….interesting.  There is also Relypsa competing in the area. Astellas is in the game….but the market appears to be under appreciated.  Too bad there are no options…

  136. Not bullish for DE:

    But low prices can be devastating, especially if they sustain themselves over long periods of time. "If you're a farmer facing continual low prices, you might have to take some land out of production." Ibendahl said. "Somewhere along the line you might even reach a point where you have to go out of production."

    The U.S. farming sector is not quite there yet—the point at which those farms that are most affected can no longer afford to stay in business—but that doesn't mean there isn't potential for such a scenario. "I think it [low prices] will continue for a lot longer than most people think it will," Ibendahl said. American farmers certainly hope that doesn't prove to be the case; nor do tractor manufacturers like Deere.

  137. Maybe good news for US manufacturing:

    As the solar industry grows, other factors are pushing the production and consumption of U.S-made panels. Government agencies such as the military are among the most prolific purchasers of solar panels, which means their contractors may have to comply with the Buy American Act and the Buy America provisions of the 2009 stimulus bill. In addition, many of the entities arranging large solar installation are cities, states, nonprofits, or public institutions such as universities that tend to ask about the source of the materials used. “Over the last 24 months we’ve also seen a rise in what I term ‘emotional Buy American buyers,’ ” said Card. “These are private companies or citizens who decide they are going to choose American-made panels.”

    Of course, a few announcements don’t make for a full-fledged renaissance. And the U.S. still accounts for only a tiny sliver of global module manufacturing. But in a rising number of instances—and especially if the tariffs remain in place—the scales may weigh in favor of U.S.-manufactured panels. Suniva’s move to add a 200-megawatt factory will instantly add about 20 percent to the industry’s productive capacity. If SolarCity follows through with its plans, America’s panel manufacturing capacity will essentially double.

    But it’s the direction that counts as much as the volume. “We’ve been losing capacity left and right for years,” Santarris says. “We would like to think that maybe we’re getting the beginning of a turnaround.”

  138. And another interesting tidbit:

    Until recently, that made it a no-brainer to buy panels from China or elsewhere in Asia. But China’s cost advantage is eroding. In addition to seeking relief from the government, U.S.-based manufacturers have responded to competition by ramping up volume (which tends to bring down costs) and investing in efficiency and automation. Companies have to wait several weeks to receive goods ordered from China (which ties up lots of capital), wages are rising in China at a 10-15 percent annual clip, and U.S. manufacturers tend to have a better quality record. “As China continues to mature, manufacturing there just isn’t as cheap,” says Matt Card, vice president of global sales and marketing at Suniva. Industry experts say panels produced in the U.S. can cost only 10 percent more than panels made in China.

  139. Indeed AAPL is printing a hanging man on the daily chart …

  140. Continuum/Shadow – Yeah, I saw that – depressingly accurate portrayal of Geopolitics over the next 50 years but, then again, that's what Science Fiction tries to do – if only we'd listen.  Orwell missed the mark by 30 years but the robot revolution is just around the corner and no, you can't get anyone motivated to do anything about it.  

    Go IRBT!!! 

    $25KP/Dfortst – Remind me on weekend and I'll run analysis. 

    King/StJ, Angel – Holy crap, that guy is a US Congressman?  

    DE/Dforst – We like them when they are cheap.  They are close but not quite "cheap" yet.  \

    And what StJ said.  

    ARO/DC – Thanks, I forgot about those!  ARO 2016 $3 puts should be sold for .85+ in the STP.

    Who/Diamond – Just the bots are buying.  Yesterday was very low volume and today is lower.

    ROFL ZZ!  

    Solar/StJ – Maybe someone will finally go with my rooftop plan.  

  141. Farming in America is all about rainfall and global warming puts more water in some places. California was wiped out from lack of last winter but unheard of mud slides last week show water is rebuilding when least expected and compare size of CA to east of the Rockies where those commodities instead of fruit and vegetables are grown. Idaho potatoes are going under cost. I will not feel sorry for the farmers until they stop living like Wall Street. Can't loose with subsidies.

  142. Long-Term Portfolio Review (LTP):  19.5%!  That's a lot of money.  Makes me want to cash out…  I'd certainly like to cut down on some positions so we're less exposed to the bear side so let's take a nice, critical look at our positions.  

    • ABX – Love them.  
    • BBBY – In twice by mistake, I assume.  Will fix.  
    • CCJ – Love them. 
    • CZR – Just added them, risky but I like them BUT, on the other hand, if we were not up $100,000 I would not gamble on this trade and, since the market may tank on rising rates and since rising rates is BAD for a company with $20Bn in debt – let's kill this trade.  
    • EGLE – Our net is $1.20 and the stock is $1.39 so screw them and their negative balance!  I love this as a new trade. 
    • HOV – Love them.  Great for a new trade.  
    • IBM – Love them. 
    • RIG – Love them. 
    • SGEN – Like them. 
    • TWX – Like them
    • WFM – Like them.  
    • AAPL – Love them, still playable and, if they ever pull back, we'll sell puts.  
    • CIM – Love them, great dividends, still playable. 
    • NLY - Love them, great dividends, still playable. 
    • AAPL - Love them, still playable.  
    • CLF – Love them.  
    • GTAT - Love them, still playable.  
    • LULU - Like them, still playable.
    • SPLS - Like them, still playable. 
    • TASR - Love them, still playable.
    • TM - Like them, still playable.
    • WFM - Like them, still playable.

    Well, that wasn't very helpful, was it.  I guess I could kill the ones I only like but that would be silly since they are all smallish.  We're only 34% invested (out of $1M buying power) so we're happy to DD on anything that goes lower and, as long as the STP is protecting us, there's no reason to get out until we see lower lows than we had last week (and we've already seen that our net balance holds up quite well).  

    So, I guess we're "stuck" with our positions for now.  And there's another dozen positions that are still good for a new entry!  

  143. Can someone explain what is a "hanging man" and what it means? Good or bad? 

  144. QQQ options trading after close..? is this something new? for some or always?
    Just had some QQQ options fill for me 8 minutes after close.  

  145. craig hanging man

    Another version of head and shoulders about as good as spitting cobra or waves, you can always find these things if you go back in history far enough. Meaningless.

  146. craigsa620Allegedly not good!

  147. Nice spike up into the close.  

    Move along folks, nothing to see here – just China's banking system collapsing and Japan's GDP dropping 7% in a quarter and Europe stuck in the mud and Russia invading Ukraine and ISIS taking over Iraq and business as usual in Syria and Africa.   Why don't we all go on over to Pakistan, we should be just in time to catch the Revolution that's brewing over there….

    Nope, nothing to worry about…  

    Hanging Man/Craigs:

    Definition of 'Hanging Man'


    A bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buyers are able to push this stock back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for the asset is waning. 

    Hanging Man



    QQQ/Scott – 15 mins after close is standard.  

    Hey Shadow, don't diss the Spitting Cobra, man!  

  148. craigsa620Another source.

  149. Actually, AAPL has put up that exact pattern before:

    See, it led to an almost 20% pullback!  Good thing people got out, right?  Well, maybe not. 

    If you are a trader – then worry about timing and silly chart patterns but, if you are an INVESTOR, just worry about buying good companies and making sure they simply remain on track with your buying premise – the chart will take care of itself over time…

    Too soon after Robin Williams, Diamond…  wink

  150. Phil – You forgot to mention that a pullback by AAPL here would then be a lower high (also not good). Actually, I am REALLY hoping for a pullback so that I can add to my position before the iPhone 6 event.

  151. Major move on MNST, just like GMCR when Coke invested in them.  Could be a good short play when hype dies down.

  152. Phil – Do you really expect the short-term (DD) QQQ trade to pay off without an AAPL pullback? 

    I think understanding patterns, S/R lines, MA’s, etc. on charts that bots actually utilize is a hugh advantage to knowing when or how to trade or hedge. For instance, if you believe that AAPL might be getting ready to retrace you may wait before you add to your AAPL position and/or you may want to buy some short-term puts in the QQQ’s so that you then have some money to buy more AAPL. :-)

  153. Apple pullback:  Good luck with that.  It is not just Americans who buy U.S. stocks — very far from it.  Given, per Phil, "China's banking system collapsing and Japan's GDP dropping 7% in a quarter and Europe stuck in the mud and Russia invading Ukraine and ISIS taking over Iraq and business as usual in Syria and Africa,"  I would venture that the irrational exuberance apparent in U.S. equities is nothing of the kind — it is the last refuge for investment advisors and their wealthy clients worldwide.  Sure, any market can get overcooked in the short term, and not having balance at that moment can see you badly burned on a 10% correction [I speak from sad experience here] but overall I would venture that this bull will keep running longer and harder than all the previous stupidly long runs — simply because there has never been such stark disparity among the major economic zones of the U.S., Europe and Japan.  Hence U.S. equities are becoming the only game in town for global money flows.


    I would be very glad to hear coherent views to the contary, of course!!!!

  154. Phil – One last serious thought: When AAPL fell almost 45% from 9/21/2012 to 4/19/2013 a number of people you know/knew got hurt or wiped out. Even large experienced hedge funds acknowledged later that they had played it wrong. Stjeanluc, myself and others posted where support seemed to be, but time and again each support zone failed. If I remember correctly, even fundamentals did not seem to matter. 

    The stock was going down!!! 

    Those that hung on (or bought during the decline) because the fundamentals dictated that AAPL would/could not get that cheap because of P/E, Revenue, Cash, Price/Book, Price/Sales or whatever, should have learned the value of having at least a working understanding of TA. It would have helped immensely in ultimately cutting or preventing their big losses.

    Fundamental Analysis is only a tool or edge in the market. As you acknowledge (sometimes) that so many people and bots trade Technical Analysis that everyone should at least be familiar with it or put another way: it works because so many people (bots) utilize it.

    Of course nothing works 100% of the time. However, pattern recognition and understanding chart set-ups actually helps some people formulate a plan or course of action. I sincerely believe that if you are in the market without a plan … then you will not be in the market for very long.

  155. zeroxzero – Look at a daily chart of AAPL since June 1, 2014 …

    Do you see any pullbacks in AAPL? 

    Luck has nothing to do with pullbacks.

  156. phil:  with 3 out of the 5 indexes showing above the strong bounce is QQQ puts still tradeable or are we just using that to hedge our positions just in case if the market pulls back?  Also I'd like your suggestion on AAPL trade – you think 2016 80/100 still a good trade or just wait for apple to pull back?  Thanks.

  157. Phil spitting cobra

    I did call hanging man looks like head and shoulders, if not just change time frame, I added spitting cobra and waves to put all that crap in it's place, equal to throwing darts. Sorry Pharmboy! And Phil!

  158. AAPL/Diamond – Keep in mind they have run from $60 last year to $100.  At $80 (up 33%) there was a pullback to $70 (about 11%) and so at $100 (another 33%), I'd expect a pullback to at least $90.  A weak retrace off $100 from $60 is $8 to $92 and from $80 to $100 is $4 but then a strong retrace is $92 again so $92 should be a pretty significant line for AAPL.  If you look back at June, you can see how $92 was in play then.  

    MNST/Rustle – I think MNST is a much better fit for KO than GMCR.  KO paid $2Bn for 17% which is $12Bn value but that's pre-money so the 20% bump is kind of fair (assuming GMCR didn't issue new shares).  What's really happening is KO is swiping MNST's "healthier" drinks (Hansen Natural, Peace Tea, Huberts Lemonade and Hansen Juice) and "trading" their failed attempts at energy drinks (NOS and Full-Throttle and, if you are thinking "what" – then you can see KO's problem).  I don't think long-term this is good for MNST but too scary to short.  

    QQQ/Diamond – First of all, as noted above, AAPL will have trouble getting over $100 so 2.5% is 0.5% on the Nas at best (if they run up) but I think more likely they pull back first.  If AAPL stays flat, then it doesn't keep the Nas up, AAPL's moves only push the Nas up or down but AAPL neutral and the Nas does what it wants.  

    Volume today was a total joke and you can't draw any TA conclusions from anything you've seen in the last few days. 


    If you are into trading and day trading and staring at charts all day and you feel that you can get in on this and out of that to enhance your revenues – that's fantastic.  I find I make a lot more money by watching the news, listening to experts on TV, chatting to investors AND traders during the day and looking at lots and lots and lots of data in order to make good investing decisions.  If a little TA voodoo helps with my timing – so much the better – but it's a tool, nothing more. 

    Only game/ZZ – I agree 100% with that.  I've been saying it for ages.  In fact, I'm fairly certain that was my intro for 2014 (and I certainly said it summer 2012) - "Where else are you going to put your money but US Equities?"  As bull premises go – it's a BS one, but it's the one we have to work with for now.  

    PhotobucketThat's right folks, the Global situation is a complete and utter disaster – which is why we went long on the Russell Futures (/TF) at 775 and Oil Futures (/CL) at $92.50 in Member Chat this morning.  Where the Hell else are you going to put your money if not in US Equities?  That was my conclusion at 11:54 in yesterday's Chat, when I said to Members:  

    Nice pop off the EU close – still seems like people are abandoning the sinking ship of state over there and money has nowhere to go but US equities (but TBills and Dollars are getting some love too).  With gold, silver, oil and copper all looking weak – where the hell are people supposed to put money?

    Ah, found it, Jan 6th:    Monday Musings – It's Still the Economy, Stupid 

    Of course, as you can see from the JPM chart above, Japan is a bargain relative to US equities at the moment., with the US Markets a full 2 standard deviations above their average valuation – by far, the most expensive of all developed countries' stock markets.  As I said last quarter, there simply isn't anywhere else for money to go compared to other asset classes but, to deny that US Equities are in a bubble is REALLY putting your head firmly in the sand….

  159. Approaching that target we discussed last week  of 1956 thats 66 points off the low..Technicals could support a move beyond that level..i tend to agree with ZERO AND PHIL we are the cleanest shirt in the laundry…we probably will have a substantial correction at some point maybe this will be a buying opportunity is my bet…

  160. Phil – I agree that 92 is a significant support line for AAPL. I can only hope it gets there! I was actually disappointed on August 8th when it reversed. I also agree that 100 is significant resistance, but one day it will be significant support.

  161. Phil – August $SPX opened at 1,929.80 … your opinion: higher or lower on August 29th at the close?

  162. anglecur

    I agree it could be a correction by fall but watch the news as it could also be considering the world is not OK, a new bear market and all the fake buying opportunities as we have WAVE after reverse head and shoulders, and all that technical crap telling you to buy.

  163. AAPL/Phil- First re:APPL, is it 2011 or 2012? The share price rose significantly following the release of the Iphone 4S in 2011, but as we all know it tanked quite famously after the Iphone 5 release in September 2012. With the 6 release imminent it will be interesting to see which way this one goes, hanging man or whatever. Also, I recall that when AAPL was in decline in 2012/13 people were comparing it to Sony from the walkman era when they had the dominant technology only to see it grow stagnant and eventually become obsolete. AAPL dropped because they lost faith in management to retain margin and growth. We have seen that AAPL is not Sony and is not allowing their product to become stagnant. They have continued to revolutionize and evolve even while maintaining the same basic hardware outside. Also their products have always been and continue to be unmatched in quality and reliability and performance. The key to maintaining share price is maintaining your product line with innovative products that people want, and making people want the new versions every time because the experience is even better than the previous version. Forget about charts and T and A and hanging men, its really about having products that people want over and over and over. The fact that the content puts money in their pockets too certainly doesn't hurt. I will sell my Apple holdings when I stop seeing lines at their stores on a Tuesday afternoon and when my kids stop asking me for a new Iphone every time a new launch comes up. My oldest son is already lobbying for a 6 if I need help deciding on a birthday present for him. Looking back if I had invested in every company that made the stuff my kids asked me for when they first started asking, I would be a .01%er

  164. TA/Diamond – FA is a tool and TA is a tool, we seem to agree on that.  It's just you seem to like using TA more than I do while I like FA more than you do and that's fine too, we can both point things out to each other.  On March 6th, 2009 was your TA telling you to BUYBUYBUY or was it Fundamentals, which kept me banging the table with 13 picks in 3 hours that we were on TV doing a live telecast while the market was crashing and burning?  

    Just because a stock goes down, doesn't mean it's not worth anything – it just means it's out of favor.  This is why we never sell puts in a stock we aren't ready, willing AND ABLE to add to our Portfolio.  This is why we scale into positions AND scale out.  A move in AAPL from $85 (peak at $96) to $55 (low of $53) is a reason to buy more – not sell out and, of course, you don't have to be a TA expert to know that if you bought it for $95, you should be stopping out at $80 anyway (20%) – I don't think people need a line on a chart to dictate common sense.  Still, I think people need to have a strong concept of the FUNDAMENTAL value of the stock and not allow their investing decisions to be made solely by squiggly lines on a piece of paper. 

    I'm more than happy to hear about any TA signals that you see – I've never claimed it to be an area of strength for me.  I have my 5% Rule and I'm pretty happy with that and I look at the 50 dmas and 200 dmas but I could generally care less about any TA pattern based in anything less than 50 days and, even then, I want to see it confirmed over 50 weeks.  

    QQQ/Rookie – It was a bet in the $25KP, not a hedge (that's what the STP does) and I thought we'd get rejected by now.  As noted in the CHART above, the volume is super-low and expirations are tomorrow, so I'm inclined to stick it out but those $97 puts are down to 0.70 and we're down $413, which sucks and, at this point, we're kind of committed to seeing it through the weekend though, with the Fed on Wednesday – I'm not sure we'll get a dip until then and we can't wait that long.  

    As to AAPL, I'd wait for either a pullback or a breakout over $100.  As Diamond says, one day it will be significant support.  

    1,956/Angel – Damn, you did call that one!  I do still like us long-term, that's why I can't bring myself to get out of LTP positions – even though it breaks my heart to leave that much profit in play.  

    SPX/Diamond – That seems low to me but it's only the 14th and we're only at the 50 dma (1,956) on super-low volume and the 200 dma is way down at 1,866 so 1,928 is still in the top end of that range.  Had you made the same comment on July 14th, when the S&P closed at 1,977, I guess it wouldn't have LOOKED too likely that we'd be at 1,930 on July 31st, right? 

    7/14: Meaningless Monday – Waiting for Yellen to Testify Tomorrow

    We're got our strong bounces on Friday – now we'll see if they hold up! .  

    As you can see from our big chart, we still have Spitting Cobra patterns forming on all but the Russell, which has turned into a Vomiting Cobra, spilling all the way down to the 50 dma at 1,150…

    As I mentioned above, today's action will be meaningless and Friday's gains on 54M SPY shares traded (1/2 normal volume) was meaningless so we will watch and wait patiently for Ms. Yellen's Senate Testimony tomorrow morning.  THAT will have some meaning. 


    SDS/DM – Yes, I think while the S&P is up is the time to buy the protection.

    I guess I can wait for chart signals instead…  blush

    There isn't a losing month on this chart, other than last month and that all came in the last days.  We fell from 1,990 to 1,910 and that's 80 points, so 1,950 splits the difference – what do your signs tell you will happen now?    Looks like a technical breakout signal to me if we get over but my global news radar says watch out for the weekend first!  

  165. Good point Craigs but you are an INVESTOR – a very different animal.  

  166. Latest ID scare is potato blight from too much rain, My potatoes look fine, I have had more rain than the potato farms, just yesterday I notice they have NOT turned off the sprinklers because they get  this cheap electricity if the pumps never stop, then there is the crop disaster insurance is worth more that market prices. America is run by criminals! 

  167. Phil- speaking of my kids, thanks for suggesting "The Reason I Jump" it looks great and very interesting. Usually when people suggest I look at something about autism, it suggests that I am a bad parent and have missed the latest book telling me how to cure this uncurable disorder. My family and friends will see the Queen of the Idiots, Jenny McCarthy on TV telling everyone how she discovered the magic treatments to "cure" her son and ask why I haven't done that? I usually have to restrain myself from screaming at them because of course I have tried every single thing she did! Unlike her son, my son really has autism, not some developmental delay that mimics autism and can be treated with dietary changes or intensive behavioral therapy. My wife and I spent hundreds of thousands of dollars, and nearly every waking moment for years treating our child, and he is a remarkable boy who defies many of the stereotypical characteristics of autism, but no amount of that will ever make him "normal" or as we say typical. He is however highly verbal and very high functioning who will hug us and is beloved by the entire community. We have friends who did all the same same things we did, and their son is non verbal and flings feces all over while impulsively lashing out physically at them. That is how autism is, every child is different and their wiring is different and how it all connects is different. So, this book you have suggested may very well be a great way for us to understand our child a little bit more and make some connections that we might have missed with insights from another autistic person who is extremely literate and expressive (another unusual and atypical attribute). A final comment about our government and those wonderful Republicans. They are always trying to balance the budget on the backs of people like my son who require an inordinate amount of resources. What thy are given barely scratches the surface and every time there is a bit of improvement they try to take that away. The argument is if he is improving he no longer needs the service (ignoring the fact he regresses without continuing treatment) but if he doesn't improve right away they want to discontinue service because it isn't working, even if it might take a few more sessions for him to integrate what he is learning. It is a constant and spirit crushing battle with these bastards. Another crazy government   is providing benefits only to disabled people with virtually no assets. This perpetuates their dependence because you need those government benefits to survive, but if we were allowed to accumulate assets for him it would help make him more self sufficient in the long run, but we can't because if he has more than the princely sum of $3000 in assets benefits will be  discontinued. The message is don't do anything to try to improve your situation or we will penalize you and cut you off from the support you need to survive. Talk about a Catch-22. I could go on and on, but this isn't what we are here for. I just wanted to share this with you and tell you why I had to abandon my futures trading success early today. I hope this was somewhat coherent. We had a tough day.

  168. Phil – I hope that you do not think that I am attacking you or your methods. In fact I am a member here because I realized that I could learn FA from you (and I have), it is the weakest part of my trading that I am working on. I am not trying to teach you TA, but I am trying to help others trade with balance. We both can be right, sometimes at the same time and sometimes on different time frames. This is why trading is not a zero sum game. Both TA and FA work … well, at least some of the time.;-)

    I actually think a little bantering keeps things interesting, perhaps you do not feel that way, so I will henceforth curb that aspect.

    As far as what I consider to be: your famous March 6th, 2009 video … well, that is why I became a member of PSW in 2009 (right after I saw it). 

    The one person that I respected and watched on CNBC was Mark Haines who called “The Haines Bottom” on March 9, 2009 right after the $SPX hit 666.09 (I was watching), so when I saw your video, you can imagine that I was impressed. 

    Note to all: In case some do not realize it, I am not calling for an AAPL correction, I have merely pointed out there MAY be a natural pullback here. Which of course I view as necessary, heathy as well as a BUYING opportunity.

  169. ~~craigsa620

    I feel your pain like no one else on PSW. I am disabled but better than I was. All the same I have no chance of working while considered improved, so I guess I am lucky getting social security disability but they are trying to take that away. Meanwhile I spent all my money getting to this point and now penalized for doing it. I can't get a job because I was declared 100% disabled by workers compensation. I feel so sorry for you but mostly your child without change will never get past this. So I need more surgery and I can't afford to get it. Your situation is past my knowledge but I know from the school of hard rocks there is no safety net. God or whoever bless you!

  170. I am with diamond as I use both TA and FA. I feel much stronger with TA than FA but I do read a lot and even wrote some posts about using FA for stock screening. 

    But for me, there is just no way to make any decision with FA alone. I need confirmation! Statistically speaking, a stock that makes 52 week lows has better chances to continue no matter how good FA is simply because momentum investing (or divesting) is so ingrained. So waiting to have confirmation of a bottom seems logical to me and TA helps there. Not perfect, but what is! And when you can structure option setup that make 20 to 50% annually as long as the stock doesn't fall any further why bother trying to catch knives!

  171. Speaking of TA – Russell still unable to climb over its 200 DMA! S&P right against its 50 DMA so going over would be a nice technical signal. NASDAQ, the strongest of all the indices now.

  172. craig

    I got screwed at 49 can't even contemplate as a child.

  173. Autism/Craigs – It just so happens that we have two neighbors who each have autistic children and both the same age(ish) as my kids.  Conner is "mild" and proudly got his diploma with my daughter this summer (to a standing ovation from my small town) but Johnny has a fairly severe case and will always need care (as far as we can tell).  I work with Autism Speaks in NYC and have always been involved with both kids growing up, so I hope you don't take it the wrong way when I say I'm "fascinated" by them.  As you say (and as that book illustrates) it seems like a wiring issue and sometimes we thing we make a little progress and gain a little insight but then it's gone – the frustration is palpable and, despite the fact that 3M people have it in the US (1%), it has been treated like an orphan disease by the Government.  

    I've been very encouraged by dietary research that suggests folic acids can combat autism pre-natally but, unfortunately, not much progress is being made for the actual victims, probably in large part because the spectrum of the disease is so wide.  Anyway, I feel for you and I assumed you were doing all you could – that book just gave me a nice bit of insight I hadn't gotten before, so I thought it would be a good read if you had missed it.  

    On the whole, we had a good month on the Autism Front with Obama signing the Autism CARES Act into law last week that gives us $1.5Bn of much-needed funding.  As you know, I'm a macro guy and these are the kinds of things I like to work towards and thank God for Menendez (our Senator), who made sure this one got through!  When I get angry about the GOP, sometimes it is very personal – and this is one of those issues that gets me very riled up! 

     Anyway, you'll be happy to know (in case you didn't) that there are key provisions in the bill that address the needs of transitioning autistic children into adult lives.  Aside from the critical research, I expect a lot of needs to be addressed over the next few years.  There's also a bill in motion (HR 647) that will allow tax-free savings accounts for people with disabilities to cover basic needs and, hopefully, we'll preserve the language that closes the loophole you get trapped in.  The Republicans love that one as it uses tax breaks to solve a problem!  cheeky

    Attacking/Diamond – Of course not.  Nothing wrong with good-natured sparring and neither one of us can be expected to put smiley faces at the end of every sentence to make sure people know we're only kidding (a little!).  Look at Optrader – I have nothing but respect for his system, of course – it's just not the way I work.  That doesn't invalidate it.  Baseball has fastball pitchers and screwball pitchers and neither is "wrong" – however it's nice when they don't only know how to use one pitch as well.  

    Good point, StJ.  

    Big Chart – At this point (a week later) we have a sort of V on the Nas but no chance of one on the others and RUT is still looking too weak to make it.  That -5% line on the Dow is life or death tomorrow and the 50 dma on the S&P, of course.   Then it's up to the RUT and 1,150 (strong bounce line) and, if 1,140 (-5% line) isn't support there – the rest are likely to fail.  Not that I'm a TA guy, of course!  angel

  174. Oh sorry Craigs, one more point I forgot to make.  In Oregon, a Federal Judge ruled that insurers could not deny claims for applied behavior analysis therapy.  That just happened this week and should lead to some very positive changes.  It was A.F. and A.P. v Providence Health Plan.  It's huge because the judge said "Providence cannot simultaneously purport to cover autism and yet deny coverage for medically necessary ABA therapy through its Developmental Disability Exclusion."  That means ABA is a medical treatment and NOT a service provided by the schools.  Of course, it's based on Oregon law but a huge victory that allows us to go to the next level as it also involves the Federal Wellstone (another great Democrat!) Domenici Mental Health Parity Act

  175. Phil

    40 years ago this country said anyone is disposable, I got f=3u4ed and this shit you mention will not do anything! Sorry but I am sick of all this shit!

  176. For all those who question global warming, a tornado warning in" mountainous' Idaho!!!!!!!!!!

  177. Craigsa620 – I have walked in your shoes, and understand what you go through on a daily basis in ways that most people can't even imagine.   The fits, the out-of-the-blue meltdowns, being trapped in public surrounded by clueless (i'm being generous) bystanders, the endless fighting for services and traipsing from predatory doctor to predatory doctor, etc, etc, etc… And yet I am one of the very, very very lucky ones, as my 13 year old son is in the other room now recording a YouTube Minecraft instructional video.  He attends a small private school without services, gets As, and has some friends.  There are few people who even know of his former diagnosis (he will always be somewhat rigid and quirky, but that describes all of the men in my family, who are, naturally, scientists, engineers, and accountants – as a female, I'm just mildly ADD).  It cost me my career, marriage, life savings and even some good friends, but of course it was worth it.  I still worry about him every second of every minute of every day.  I don't talk about it much, because frankly, no one understands.  I also don't try to give any advice based on what I did because I know how lucky I was to have my son respond so well when others had no benefit.

  178. Samsung buys home automation startup for reported $200M

    07:16 PM ET · SSNLF

    • Samsung (OTC:SSNLF, OTC:SSNGY) has acquired SmartThings, developer of a home automation hardware/software platform. Re/code reports the purchase price is $200M.
    • SmartThings’ platform relies on kits featuring a router and small sensors that attach to various home items. Once installed, users can monitor, control, and customize connected devices using mobile apps.
    • The acquisition follows Google’s purchases of smart thermostat/smoke detector vendor Nest and Wi-Fi monitoring camera maker Dropcam, and the launch of Apple’s HomeKit platform, which aims to let 3rd-party home devices be controlled with iOS hardware.
    • SmartThings is looking to differentiate itself by creating an open platform for 3rd-party apps/services – founder/CEO Alex Hawkinson claims SmartThings supports 1K+ devices and 8K+ apps. Control4 (NASDAQ:CTRL), whose shares took off after the Google/Nest deal was announced, is among SmartThings’ rivals.

  179. Cheniere, Exxon are big winners in overhaul of natural gas export reviews

    07:15 PM ET · LNG

    • The U.S. Energy Department has finalized its plan to revamp the process for approving liquefied natural gas exports, largely codifying a process first proposed in May.
    • Beginning immediately, the DoE will only issue final rulings on whether exports are in the public interest after the FERC has completed an environmental review of the project.
    • The benefits of the change extend unevenly to the dozens of companies now vying to export U.S. natural gas, and some in the industry say the new process will exacerbate permitting delays for most companies.
    • The biggest winner under the new approach is Cheniere Energy (NYSEMKT:LNG), which already had gained FERC approval but faced a nearly two-year wait for the required Energy Department review of its proposed Sabine Pass expansion; it now moves to the front of the line to get a permit from the DoE.
    • Another winner is Exxon’s (NYSE:XOM) Golden Pass project in southeast Texas, which also was far down the Energy Department’s list, even though it was well into the FERC review.
    • The new policy will not affect companies that already have received conditional approvals, such as Dominion’s (NYSE:D) Cove Point project, Sempra’s (NYSE:SRE) Cameron LNG project and Leucadia National’s (NYSE:LUK) Oregon LNG project.

  180. Sodastream +3.1% AH following Coke-Monster deal

    06:53 PM ET · SODA

    • Sodastream (NASDAQ:SODA) is getting a lift from news Coca-Cola is buying a 16.7% stake in energy drink giant Monster Beverage as part of a strategic alliance.
    • The home soda machine maker was reported last month to be discussing a $40/share going-private deal with an investment firm. However, the report was met with a fair amount of skepticism.

  181. U.S. imports more coal even as Appalachian mines shut down

    06:52 PM ET · ANR

    • Coal imports to the U.S. surged 44% Y/Y to 5.4M metric tons during the first six months of 2014, even as coal mines close throughout central Appalachia.
    • The main reason is price: It costs $26/ton to ship coal from central Appalachia to power plants in Florida vs. $15/ton to get coal from a mine in Colombia.
    • Appalachian miners such as Alpha Natural Resources (NYSE:ANR) say imports from Colombia have added to their troubles; Colombia produces a high quality thermal coal, it’s inexpensive to mine it, and relatively inexpensive to ship it to the U.S. east coast.
    • The cheaper imports benefit some utilities such as Southern Co. (NYSE:SO), which has 63 coal-fired power generating units in four states and bought 25% more imported coal than expected.
    • Low prices for international shipping also have helped Colombian coal, as the Baltic Dry Index has fallen to one-tenth of its level five years ago; U.S. rail rates have mostly held firm over the same period.
    • ETFs: KOL

  182. Claure: Sprint to slash prices, cut more jobs

    06:45 PM ET · S

    • With a T-Mobile deal off the table, new Sprint (S -1.9%) CEO Marcelo Claure has told employees the carrier will introduce “very disruptive” prices next week. SoftBank’s Masayoshi Son suggested last week price cuts were on tap.
    • Claure: “We’re going to change our plans to make sure they are simple and attractive and make sure every customer in America thinks twice about signing up to a competitor … When your network is behind, unfortunately you have to compete on value and price.”
    • The ex-Brightstar CEO admitted (among other things) Sprint’s 4G buildout took too long, that social media chatter about the company is mostly negative, and that Sprint didn’t react quickly enough to moves from rivals (read: T-Mobile).
    • He promises to use Sprint’s huge spectrum assets (skewed towards higher frequency bands) to improve network quality, and to have the industry’s lowest cost structure. Claure admits the latter will result in new job cuts, but says he isn’t sure of their scope.

  183. Junk bonds rebound with $680M weekly inflow

    06:28 PM ET · GPOR

    • Junk bonds rebounded after shattering records last week with a $7.1B net outflow, as investors added $680M back into high-yield mutual funds and ETFs in the latest week, according to Lipper data.
    • Observers say sentiment changed in early August as institutional buyers stepped in hunting for bargains.
    • Example: Gulfport Energy (NASDAQ:GPOR) this week increased a $250M junk bond offering to $300M, giving it more cash to pay down its revolving credit line and for other general corporate purposes.
    • Also, a debut bond offering for XPO Logistics (NYSE:XPO) priced at par to yield 7.875%, at the issuer-friendly end of the original suggested 7.875%-8.125% range.
    • Many investors this year have expressed concerns that a pullback in junk bond prices could signal that market participants are rethinking their willingness to take risk, and the latest inflows could ease some of the concerns.

  184. You On Demand +4.4% AH after Q2 report, guidance reiteration

    06:25 PM ET · YOD

    • Though its 1H14 revenue only totaled $320.4K, You On Demand (NASDAQ:YOD) is maintaining guidance for full-year revenue of $3M.
    • Q2 cost of revenue was $857.2K, or over 4x revenue of $182.7K. SG&A spend rose 10% Y/Y to $2.27M.
    • The Chinese VOD service provider ended Q2 with $15.7M in cash, down from $18M at the end of Q1.
    • Q2 results, PR

  185. Sina +5.7% AH, Weibo -4.2% following Q2 results, Q3 guidance

    06:05 PM ET · SINA

    • SINA expects Q3 revenue of $193M-$199M, below a $199.1M consensus. Subsidiary Weibo (NASDAQ:WB) expects Q3 revenue of $79M-$82M, in-line with an $80.2M consensus.
    • Sina’s online ad revenue rose 29% Y/Y in Q2 to $184.4M, while its non-ad revenue fell 11% to $28.6M thanks to a $13.6M drop mobile value-added service revenue. The revenue figures include contributions from Weibo.
    • Sina’s gross margin rose to 61% from 60% in Q1 and 54% a year ago. Opex rose 55% Y/Y (well above rev. growth of 19%) to $116.9M thanks to heavy marketing and R&D investments.
    • Weibo’s ad/marketing revenue rose 99% Y/Y to $59.6M, and its value-added service revenue rose 130% to $17.7M. Costs/expenses rose 18% (less than rev. growth of 105%) to $87.8M.
    • Weibo’s monthly active users rose 9% Q/Q and 30% Y/Y to 156.5M. Daily active users rose 5% Q/Q and 32% Y/Y to 69.7M.
    • Low expectations appear to be helping Sina out.
    • Sina: Q2 results, PR. Weibo: Q2 results, PR.

  186. No federal citations issued for fatal Chevron well fire

    05:58 PM ET · CVX

    • Federal authorities will not issue any citations against Chevron (NYSE:CVX) for an explosion at a well site in Pennsylvania earlier this year that killed a worker, even after a state agency placed at least some of the blame on the company.
    • The Occupational Safety & Health Administration says its investigation concluded that the exact cause of the incident could not be determined.
    • CVX policies require any worker with less than six months’ experience to be approved by the well site manager or upper management, but the step appeared to have been overlooked prior to the incident.

  187. Nordstrom -3.2% AH as same-store sales miss estimates

    05:49 PM ET · JWN

    • Nordstrom (NYSE:JWN) -3.2% AH after reporting generally in-line Q2 results, as sales at stores open at least a year rose 2.7% Y/Y but missed the 3.1% growth analysts had estimated; full-line department store sales fell 1.2% vs. projections for growth of 1.2%.
    • JWN says it expects the planned $350M acquisition of men’s clothing service Trunk Club will dilute EPS for the next several years as the result of share issuance and other impacts; estimates the acquisition will reduce FY 2014 earnings by 3%-5%.
    • At JWN’s discount Rack unit, net sales grew 18%, reflecting increased volume and contributions from new stores, while same-store sales gained 4%.
    • Raises the lower end of FY 2014 guidance and now sees EPS of $3.80-$3.90 on sales growth of 6.5%-7.5% vs. previous guidance of $3.75-$3.90 EPS on sales growth of 5.5%-7.5%.

  188. Gannett +5.9% AH after Icahn discloses stake

    05:24 PM ET · GCI

    • Carl Icahn has disclosed a 15M-share (6.63%) stake in Gannett (NYSE:GCI) in a new 13D.
    • The filing states Icahn and his affiliates “acquired their positions in the Shares in the belief that they were undervalued and that value could be created by splitting the Issuer into separate print and broadcast companies.” Gannett recently announced just that.
    • Going forward, Icahn plans to “have discussions with representatives of [Gannett's] management and board of directors relating to the planned separation, corporate governance, capitalization and capital allocation.”

  189. PetroChina asks Chad to drop $1.2B claim over oil dumping

    05:21 PM ET · PTR

    • China National Petroleum (NYSE:PTR) denies breaking environmental rules in Chad’s oil sector and calls on the government to cancel its $1.2B claim filed before an arbitration court in Paris.
    • The dispute erupted in July last year after Chad said it discovered large quantities of crude oil had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocs since 2009; Chad has since canceled five explorations licenses held by CNPC.

  190. Autodesk +4.5% AH on FQ2 beat, guidance hike, subscription growth

    04:58 PM ET · ADSK

    • Autodesk (NASDAQ:ADSK) expects FQ3 revenue of $590M-$605M and EPS of $0.17-$0.23 vs. a consensus of $588.2M and $0.28. As is the case with Adobe, Nuance, and others, near-term EPS is pressured by a shift from licenses to subscriptions (leads revenue recognition to be deferred).
    • Autodesk’s FY15 (ends Jan. ’15) billings and revenue growth guidance ranges have respectively been hiked to 10%-12% and 7%-9% from 7%-9% and 4%-6%. Subscriber add guidance has been hiked by 50K to 200K-250K.
    • FQ2 results trounced estimates on the back of a 27% Y/Y increase in billings – that’s sharply above FQ1′s 10%. Subscriptions grew by 74K to 2.01M, and the deferred revenue balance rose 2% Q/Q and 22% Y/Y to $981M.
    • Americas revenue +11% Y/Y to $223M; EMEA +21% to $244M; Asia-Pac +8% to $170M.
    • Driving growth: Architecture, engineering, & construction sales rose 23% Y/Y to $218M, and manufacturing sales rose 17% to $168M. Platform solutions/emerging business revenue rose 5% to $208M, and media/entertainment was flat at $44M.
    • GAAP opex +22% to $499.3M, with big growth in both sales/marketing and R&D spend. 1.9M shares were repurchased.
    • FQ2 results, PR

  191. Chimera chief buys $320K of company stock

    04:44 PM ET · CIM

    • Matthew Lambiase purchased 100K shares of Chimera Investment (NYSE:CIM) at $3.20 each yesterday, bringing his holdings up to 582K shares.
    • The stock’s higher by 0.9% AH

  192. Annaly CEO buys $1M worth of company stock

    04:42 PM ET · NLY

    • Wellington Denahan purchased 86,837 shares of Annaly Capital (NYSE:NLY) at $11.52 each yesterday, bringing her holdings up to 1.375M shares.
    • The stock’s higher by 0.5% to $11.66 AH

  193. Chiquita Board: $13 per share offer is inadequate

    04:35 PM ET · CQB

    • Having made the decision that Cutrale and Safra’s Groups’ $13 per share cash offer is not in the best interests of Chiquita (NYSE:CQB) shareholders, the board has decided not to furnish information or engage in talks with the two.
    • The company remains committed to completing its merger with Fyffes.
    • Source: Press Release
    • Previously: Chiquita Brands in play?
    • Shares little-changed at $13.50 AH

  194. Applied guides in-line; margin gains fuel EPS beat

    04:22 PM ET · AMAT

    • Applied Materials (NASDAQ:AMAT) expects FQ4 revenue to be roughly flat Q/Q (+/- 3%), and for EPS to be in a range of $0.25-$0.29. The consensus is for sub-1% revenue growth and EPS of $0.26.
    • FQ3 orders totaled $2.48B, -6% Q/Q and +24% Y/Y, and good for a book-to-bill of 1.09. Chip equipment orders -6% Q/Q to $1.57B; display equipment -13% to $296M; energy/environmental (solar) -25% to $66M; global services +3% to $552M. Backlog rose 9% to $2.97B.
    • Chip equipment orders were pressured by soft DRAM/foundry demand – peers have already reported of a summer lull ahead of an expected Q4/2015 pickup. Though down Q/Q, display orders remain high due to TV manufacturing investments.
    • Gross margin rose 130 bps Q/Q and 260 bps Y/Y to 45.5%, fueling the EPS beat. GAAP opex rose 8% Y/Y to $601M.
    • AMAT +1.8% AH. FQ3 results, PR.

  195. Stocks ease higher as participation remains light

    04:20 PM ET

    • Stocks climbed steadily through the day to finish with moderate gains, led by follow-through buying in biotech and health care after yesterday’s sector gains.
    • Investors brushed off a larger-than-expected increase in jobless claims, seeing the report as soft enough for the Fed not to rush with rate hikes but not too soft to raise worries about the economy.
    • Participation remained puny, with just 506M shares changing hands at the NYSE floor, one of the year’s lowest totals.
    • The lackluster economic data combined with a strong auction of long-dated bonds to boost Treasury prices, sending the benchmark 10-year yield 3 bps lower to 2.4%, the lowest level in 14 months.
    • West Texas crude oil fell 2.1% to $95.58/bbl after a surprise uptick in stockpiles.

  196. Solid numbers for J.C. Penney as it laps easy compares

    04:12 PM ET · JCP

    • J.C. Penney (NYSE:JCP) reports comparable-store sales increased 6% in FQ2.
    • Online sales improved 16.7% to $249M during the period.
    • Gross margin rate +640 bps Y/Y and +290 bps Q/Q to 36.0%.
    • SG&A expenses -$62M to $964M.
    • Inventory -9.7% to $2.848B.
    • Guidance: Full-year comparable-store sales growth is forecast to be in the mid-single digits. Capex spending is lined up at $250M.
    • JCP +10.9% AH.

  197. NetApp rallies; Street focuses on enterprise improvement, margins

    04:00 PM ET · NTAP

    • “Demand from enterprises improved (especially in the U.S.), with a notable increase in [$1M+] million deals. We believe this data point, combined with results from CDW, SNX, IM, STX & WDC suggests a 2H spending cycle in US commercial,” writes Needham’s Richard Kugele, who has upgraded NetApp (NTAP +5.2%) to Buy following its FQ1 beat and in-line FQ2 guidance.
    • Pac Crest’s Brent Bracelin is pleased with NetApp’s gross margin gains, which he thinks highlights the company’s “software-intensive model and technology differentiation.” He also notes attach rates for NetApp’s clustered storage software “is now approaching 50% on mid-range products, more at the high end.” NetApp mentioned on the CC (transcript) shipments of clustered nodes rose 177% Y/Y.
    • Also mentioned: NetApp’s anticipated FlashRay systems (built from the ground up to handle flash storage) will begin shipping next month, thus filling a hole in the company’s lineup as it squares off against purpose-built flash hardware from EMC, IBM, and a slew of startups. Ahead of the launch, shipments of other all-flash products rose 48%.
    • The company still has its skeptics following many quarters of soft growth. Credit Suisse’s Kulbinder Garcha: “NetApp’s LT growth potential remains depressed reflective of changing enterprise focus, commodity infrastructures, and competitive pressure from EMC in mid-range and nimble startups.”
    • NetApp’s branded revenue rose 1% Y/Y in FQ1 to $1.36B. OEM revenue, hurt by the winding down of the IBM deal, fell 23% to $129M.

  198. At the close

    04:00 PM ET

    • Dow +0.37% to 16,712.87. S&P +0.43% to 1,955.14. Nasdaq +0.43% to 4,453.00.
    • Treasurys: 30-year +0.51%. 10-yr +0.15%. 5-yr +0.07%.
    • Commodities: Crude -2.19% to $95.46. Gold -0.04% to $1,314.00.
    • Currencies: Euro +0.04% vs. dollar. Yen +0.01%. Pound +0.02%.

  199. Ackman reportedly leading another suit over GSEs

    03:50 PM ET · FNMA

    • The GSEs have their tails in the air on a report shareholders – led by Bill Ackman’s Pershing Square – plan tomorrow to file the latest in a string of lawsuits against the government for requisitioning the profits of the two, reports The Street’s Dan Freed.
    • Pershing Square is by far the largest non-government owner of common stock of Fannie Mae (OTCQB:FNMA +3.8%) and Freddie Mac (OTCQB:FMCC +4.5%), and numerous individual investors will join the suit. Another large holder – Bruce Berkowitz’s Fairholme Capital – has much of its stake tied up in the preferred shares of the companies.

  200. Silver Wheaton results weak, but analysts see better days ahead

    03:45 PM ET · SLW

    • Silver Wheaton’s (SLW -5.7%) Q2 results were disappointing, but analysts seem to think the silver streamer will enjoy better days ahead.
    • Below consensus earnings was simply due to the timing of sales, BMO analyst Andrew Kaip says, noting SLW had 6.3M oz. of attributable silver production and just 5.2M oz. of sales; production has outpaced sales by ~5.7M oz. over the past six quarters.
    • TD’s Dan Earle foresees a bright future for SLW, expecting the company will generate a “staggering” $692M of free cash flow in 2016 with HudBay’s new Constancia mine, which should reach production late this year, a key contributor; SLW owns a silver stream on the mine.
    • Both analysts have price targets on the stock of $32/share, ~20% above the current level.

  201. Bullard sees first rate hike in March

    03:04 PM ET · SHY

    • “The end of 2015 Q1 is still my preferred liftoff date,” St. Louis Fed chief Jim Bullard tells the WSJ. A March rate hike is well ahead of the H2 timetable being signaled by Janet Yellen and the broader FOMC, but Bullard says the Fed is now closer to its twin goals of 2% inflation and low unemployment than had been previously expected.
    • Investors should fear the Fed falling behind the curve on inflation, he says, as “that’s certainly been the history of the institution.”
    • Fearing no such falling behind the curve at the moment, the 10-year Treasury yield continues at a 15-month low of 2.40%.

  202. GoPro spikes after JPMorgan reports on new content efforts

    02:34 PM ET · GPRO

    • Following a talk with management, JPMorgan reports GoPro (GPRO +3.6%) is now looking at options for licensing and monetizing its content. Shares have spiked in response.
    • Many GoPro bulls have highlighted the company’s content opportunities – GoPro saw its YouTube video views rise 200% Y/Y in Q2. The company is counting on an upcoming cloud-based platform for quickly creating and uploading YouTube-friendly content to boost its momentum.

  203. AOL gains after pricing convertible offering

    02:21 PM ET · AOL

    • AOL (AOL +1.6%) is selling $330M of convertible senior notes due 2019. The notes carry an interest rate of 0.75%, and a conversion price of $57.32 (33% above current levels). Initial purchasers will have a $49.5M overallotment option.
    • Net proceeds are expected to total $319.9M. AOL plans to use $40M to buy back shares from purchasers. Buybacks and M&A are among the potential uses of the remaining funds.
    • AOL had $136.2M in cash at the end of Q2. Obligations under capital leases and a credit facility totaled $233.8M.
    • Previous: AOL issuing debt for first time since 2009

  204. Silver Wheaton, Pan American Silver each -5%, hurt by low silver prices

    02:16 PM ET · SLW

    • Silver Wheaton (SLW -5.3%) and Pan American Silver (PAAS -5.3%) are both sharply lower as low silver prices combined with still-high costs combine to weigh on Q2 results.
    • SLW said its silver equiv. realized price fell from $23.05/oz. a year ago to $19.83 in this year’s Q2; gold sales accounted for ~30% of sales, and SLW’s realized gold price of $1,295/oz. was included in a 14% drop in the silver equiv. price.
    • In Q2 results for PAAS, the average realized price for silver was $19.58/oz., down from $22.68 in the year-ago quarter; gold, which accounts for ~25% of sales, also suffered, fetching $1,289/oz.vs. $1,423 a year ago.

  205. Ebola vaccine trials are a top priority for medical authorities

    01:20 PM ET · NLNK

    • Citing the U.S. Defense Threat Reduction Agency (DTRA) desire to “move quickly” on validating an Ebola vaccine, NewLink Genetics (NLNK +11.8%) says it has enough doses of its vaccine candidate to launch a safety trial in 20 -100 healthy volunteers in a matter of weeks. CEO Dr. Charles Link says he has lined up two (possibly three) contract manufacturers that could produce tens of thousands of doses within a month or two.
    • NewLink subsidiary BioProtection Systems received $1M from DTRA to fund more pre-clinical toxicology studies and stepped-up manufacturing to allow human trials to start quickly.
    • Tekmira Pharmaceuticals (TKMR -9.2%) began a Phase 1 trial of TKM-Ebola in January of this year. It is the only product candidate to be tested on humans to date.
    • GlaxoSmithKline (GSK +0.7%) awaits FDA approval to commence a safety trial for its Ebola vaccine candidate. The trial could start as early as September.
    • Mapp Biopharmaceutical’s ZMapp Ebola vaccine was given to the two American medical workers who contracted the disease. Its supply is now exhausted.

  206. China Mobile rallies following 1H report

    01:18 PM ET · CHL

    • China Mobile’s (CHL +3.4%) operating revenue rose 7.1% Y/Y in H14 to RMB324.7B ($54.1B). But net profit fell 8.5% to RMB57.7B ($$9.37B) thanks to 4G investments, iPhone subsidies, and declining SMS revenue (high-margin).
    • The world’s biggest carrier ended July with 793.6M subs, up from 790.6M at the end of June and 767.2M at the end of 2013. 3G subs have grown to 240.9M from 191.6M at the end of 2013, and 4G subs have grown to 20.4M since the launch of services in February.
    • CHL’s 4G network now covers 300+ cities. The company has an RMB225.2B 2014 capex budget, of which RMB74.9B is devoted to 4G. It hopes to have 50M 4G subs by year’s end.
    • Voice services revenue fell 5.3% Y/Y in 1H14 to RMB165.8B, and SMS/MMS revenue 13.2% to RMB18.2B. But data services revenue rose 34% to RMB121.9B on the back of a 91.4% increase in mobile data traffic.
    • Chairman Xi Gouhua reiterates CHL will look for foreign acquisitions to boost growth.”Our targets are not limited to those in emerging countries. We will also invest in companies that operate in developed markets if they offer good growth opportunities.”
    • Credit Suisse has upgraded shares to Outperform.
    • Earnings slides (.pdf)

  207. Who’s taking Wal-Mart’s U.S. market share?

    01:01 PM ET · DLTR

    • The dollar store group (DLTR, FDO, DG, BIG) and select grocery store chains (KR, SWY, SVU) are slight out-performers on the day after Wal-Mart’s (WMT +0.1%) Q2 report indicates it lost some market share in the U.S.
    • Edward D. Jones analyst Brian Yarborough attributes the limp sales growth for Wal-Mart in the U.S. to the retailer’s inability to nab the quick “milk and bread” runs by consumers due to the massive size of its stores.
    • That line of thought is consistent with the stronger growth numbers put up lately by convenience store operators such as Circle K (OTCPK:ANCUF), 7-11, Pantry (NASDAQ:PTRY), BP Connect (NYSE:BP), On the Run (NYSE:XOM), Speedway America (NYSE:MPC), Kwik Shop (NYSE:KR), and Qwiktrip.

  208. As ICE adds fees, banks mull dropping Libor

    12:58 PM ET · ICE

    • IntercontinentalExchange (ICE +0.7%) took over administering Libor this year and on July 1 introduced licensing agreements, including a usage license ranging from $8K-$40K per year. Previously, Libor was free except for companies wanting to redistribute the rates.
    • “There’ve been a number of banks saying they may stop using Libor,” says teh ABA’s Denyette DePierro. “Everybody’s kind of waiting to see what ICE is going to do, and, from a cost-benefit perspective, do you continue with Libor or not?”
    • The new fees could affect many of the nearly 7K banks and 800 firms managing registered investment funds in the U.S., but banks which contribute Libor rates to ICE – including JPMorgan, Bank of America, and Barclays – won’t be charged.
    • The Mortgage Bankers Association has let its concerns be heard, and ICE – while calling the fees “modest” says it’s listening to a point. “There has been a lot of criticism by people that they wanted Libor to be better, but then when they’re asked to pay for it, they’re surprised. It shouldn’t be a surprise,” says ICE chief Jeff Sprecher.

  209. Cisco slumps in spite of target hikes; peers also off

    12:40 PM ET · CSCO

    • Six firms have hiked their Cisco (CSCO -2.8%) targets after the company beat FQ4 estimates, issued mixed FQ1 guidance, and announced plans to cut another 6K jobs. But that isn’t stopping shares from selling off due to worries about weak demand from carriers (orders -11% Y/Y) and emerging markets (orders -9%).
    • “Notwithstanding the fact that capex will be fairly weak in [2H14], Cisco’s [carrier] order performance in the first calendar half of 2014 demonstrates meaningful share loss in addition to soft carrier spending,” says MKM (Neutral).
    • Nonetheless, the firm thinks Cisco’s total orders will rise at or near a low double-digit % in FQ1 (favorable comps will help). “We still believe it is profitable to own Cisco when orders and revenue growth are accelerating.”
    • Bulls are focusing on healthy enterprise orders and strong early uptake for the Nexus 9000/ACI SDN and networking virtualization platform. John Chambers mentioned on the CC (transcript) the platform’s customer count more than tripled in FQ4 to 580+, and that there are over 60 customers for the related APIC software controller (just launched).
    • Several peers and suppliers with strong carrier exposure are selling off. Cisco’s numbers follow a soft outlook from JDS Uniphase, and coincide with light guidance from Oclaro. ALU -1.6%. JNPR -1.8%. FN -7.4%. ZHNE -2.1%. EZCH -3.8%.
    • Prior Cisco earnings coverage

  210. As Plug Power’s Q2 sales more than double, alt energy stocks rally

    12:35 PM ET · PLUG

    • Plug Power’s (PLUG +4.1%) Q2 results, which included revenues that more than doubled and beating analyst consensus, are sparking a rally in alternative energy stocks.
    • PLUG reported a 17% gross margin in its product business and says it expects gross margin in the area to reach the mid-20s in Q4.
    • CEO Andy Marsh says in this morning’s earnings conference call that the company and customers seeing far fewer problems with PLUG’s newer units than with older ones.
    • Results impress Cowen analysts, noting PLUG’s installation of the first GenKey site for Wal-Mart’s Pottstown, Pa., distribution center, and anticipating continued sequential growth through the year.
    • FCEL +7.1%, BLDP +2%, ZBB +4.3%, CPST +4%.

  211. Heard during Wal-Mart’s earnings call (pre-recorded)

    12:28 PM ET · WMT

    • Wal-Mart (WMT) doesn’t give analysts a crack at its execs with a live conference calll, but did provide some commentary on a pre-recorded message.
    • Despite a strong performance from the Neighborhood Markets concept during Q2, margins dipped 70 bps for Wal-Mart U.S. and comps were flat. Strength was seen in the health and wellness category, while the entertainment business was a drag.
    • Sam’s Club saw a gross profit rate loss of 50 bps during the quarter, of which 23 bps are attributed to the investment in Cash Rewards. Product mix and promotions were also factors.
    • Wal-Mart International’s strong performances in Brazil and Japan helped to offset margin pressures at Walmex and in Canada.
    • Guidance includes a bump in health care costs to $500M from $330M for Wal-Mart’s fiscal year.
    • Earnings call transcript (.pdf)

  212. Boeing plans further 737 production boost, CFO says

    12:12 PM ET · BA

    • Boeing (BA +1.9%) will announce plans this fall to increase production of its single-aisle 737 jet in response to pressure from customers, CFO Greg Smith tells an investor conference.
    • Smith says Boeing had boosted production rates across all airplane programs 17 times over the past four years, and still had another three to go, including one on its 737.
    • Boeing has raised 737 production to 42/month at its Renton, Wash., factory, a rate that is scheduled to rise to 47/month in 2017 with the potential for a further boost to 52 in 2018 or 2019.
    • Also, Boeing says it received 10 new orders for 777s from an “unidentified customer” in the latest week.

  213. Loeb buys into Rackspace, Finisar, IAC in Q2

    12:06 PM ET · RAX

    • Dan Loeb’s Third Point LLC took a 7.25M-share position in Rackspace (RAX +4.3%) in Q2, along with a 3.5M-share position in Finisar (FNSR -0.2%) and a 2M-share position in InterActiveCorp (IACI +1.7%). (13F)
    • Rackspace has jumped on the disclosure. The Web hosting/IaaS provider remains in the midst of a strategic review, and has been the subject of many M&A rumors.
    • Finisar has ticked higher after selling off earlier in the wake of Cisco and Oclaro’s reports. Shares fell yesterday in response to JDS Uniphase’s guidance.
    • IAC has moved slightly higher. Shares were already up following news the company has bought

  214. Drybulk shipping rates surged higher overnight, drybulk shippers rally

    10:53 AM ET · DRYS

    • Drybulk shipping rates, as measured by the Baltic Dry Index, surged 8.2% overnight, driven by strength across the board but mainly in capesize and panamax rates.
    • Capesize rates jumped 15.7% to $13,677/day, Panamax rates climbed 9.7% to $5,883/day, and Supramax rates rose 1.9% to $9,004/day.
    • Related drybulk stocks include: DRYS +2.6%, PRGN +5.8%, DSX +3.9%, FREE +7.9%, EGLE +2.2%, NM +5.6%, NMM +1%, SBLK +6.2%, SB +5.7%, BALT +3.8%, SHIP +0.7%, DCIX flat.

  215. Qualcomm buys Globalstar shares, denies Chinese media report

    10:11 AM ET · QCOM

    • Qualcomm (QCOM +0.3%) has bought 4.15M Globalstar (GSAT +6.4%) shares, the company discloses in a new 13F. Globalstar shares have popped in response.
    • Globalstar was originally formed as a JV between Qualcomm and Loral in 1991. Qualcomm wrote down most of its investment in the satellite network owner a decade later, shortly before Globalstar filed for Chap. 11. Globalstar finished restructuring in 2004.
    • Separately, Qualcomm has denied a Chinese media report claiming it has financial ties with Zhang Xinzhu, an antitrust expert who was just removed from a government advisory post. Qualcomm says it simply paid a consultancy employing Xinzhu to produce an economic analysis for regulators.
    • Qualcomm is dealing with both a Chinese antitrust probe and an SEC bribery probe. The company stated last month it thinks some Chinese licensees are under-reporting their 3G/4G device sales, and that some might be holding off on getting licenses while the antitrust probe continues.

  216. Uh, oh.

    August 14, 2014 5:04 pm

    Russian shadow unsettles German business confidence



    “Things have changed dramatically,” says the founder of Russia Consulting, which advises more than 100 German companies doing business with Russia. “I have received many calls from clients that they want to freeze certain projects. They feel very uncomfortable.”



    Even though Russia accounts for just 3 per cent of Germany’s exports and Ukraine less than 1 per cent, the shadow cast by the crisis has had an unsettling effect on German business confidence.   Given its huge momentum, the EU’s economic locomotive is not about to run out of steam any time soon. But the combination of the Ukraine crisis, a slowdown in other emerging markets, and domestic concerns, notably about energy costs, have left Europe’s largest economy sputtering."



    Uh, oh -- 



  217. Phil-  What are your thoughts on using the Butterfly portfolio in an IRA?  Since the long opts cover the shorts seems like a good strategy for no margin trading.  Thx

  218. Wow who knew there were so many kindred spirits here! Phil I had no idea you were so active in this cause, but not surprised. In your state of NJ the rate of autism is now a shocking 1 in 55 births! Thank you Phil for letting me know about the recent Senate work which I was not aware of and is long overdue. The things you mentioned would be Godsend and quite a relief. The lack of help and services after age 21 is appalling, so knowing some help may be on the way is great. I recently had to have my son labeled with the new name they have given Mental Retardation ( my oldest brother, who passed in 2011 was down syndrome, so I grew up using that term) in. In PA. our evil Governor has gutted the entire education system, but paid particular attention to the developmentally disabled and really removed all funding for new applicants who want to try to contribute and live outside the family home. the waiting list to get help is a mile long and it is  order to qualify for any help after 21 rdn4evr thank you and ygou

  219. I am sorry , that last post got entered before I was done. I was saying that the waiting list to receive a waiver which is needed to get help required to enable an individual to live in the least restrictive environment is a mile long and you have to have an emergency like a dying caregiver to get anywhere thanks to this heartless Governor and his budget cutting. Of course Pa. is also the only state that doesn't collect fees from big oil and gas to extract nat gas from our land. He is in their pocket as he is many industries. He is a true Republican. He is Christie without a personality or heart, and a supportive legislature that is elected by all the hicks between Pittsburgh and Philadelphia. The point being that in Pa. an autism diagnosis does not qualify you, only a cognitive impairment resulting in an IQ under 65. So, Phil the changes you mentioned in those new laws would be a welcome change and not a moment too soon. I thank you for your involvement and help in getting this kind of change. I also started to say to rdn4evr that you are my new hero! I admire what you have accomplished and I know the kind of effort and work and sacrifice it takes. Here is a sobering stat, over 70% of marriages with an autistic child end in divorce. I am grateful for my wife who is my soulmate and teammate in this. rdn I would also thank you for understanding that not all of us are lucky enough to get the same results. Oh and Phil I too find these  guys fascinating and who wouldn't? They are remarkable in what they are challenged with and how difficult it is to live with what is best described as noise in their brains and how uncomfortable the world is for them. Lastly Shadow I also feel your pain since I am disabled on top of it all! I am not nearly in the kind of shape you are, but I live with chronic pain and can't get it fixed because I can't leave my son for as long as it would take to recover. I also was smart enough to buy a private disability insurance policy when I was 30. By paying the premium myself and not having my company pay it,  my benefit is tax free and in addition to what social security pays. So now I get to tie it all in to financial conversation by telling everyone on PSW buy yourself a disability insurance policy if you have a family. Shadow's story should tell you that your government benefits are not enough! I thank God every day that I took the opportunity to buy that insurance which when I bought it seemed like a waste of money, but when I turned 50 and needed it, wow was I grateful to my 30 year old self and my (other) brother who pushed me to buy it. 

    Ok sorry to have taken all this space and I am done with my autism soapbox.(for now)

  220. Good morning!  

    Though it "never works", I just shorted the RUT again at 1,151.7 with the aim of going 2x at 1,152.3 to average 2 at 1,152 (/TF) and probably giving up over 1,152.50 (previous high).  /ES was rejected at 1,159.5, /YM at 16,750 and /NQ at 3,982.5, so if any of those pop – end of trade.  

    We'll be looking for 1,150 to fail on /TF, 1,155 on /ES, 16,700 on /YM and 3.975 on /NQ to confirm a downturn. 

    To the upside, we can go long on oil at $95.50 – WOW!  Tight stops below – of course! 

  221. I was wrong yesterday, the Japan 10-year is 0.6%, not 1%!  India's 5-year is 8.5% and Indonesia is 8.3% – imagine the money people are making borrowing Yen and buying Rupees…

    I still think India is a short, especially with Pakistan looking unstable next door.  INDA is illiquid but can be played straight short at $30.50 but EPI has good options on it at $22.29 and the Jan $26/23 bear call spread is $2.25 so gains 33% if EPI doesn't go higher by Jan.  The net delta is .27 so figure the risk is less than .25 if EPI crosses over $23 and you stop out vs. potential 0.75 reward if it doesn't.  

    It's funny because yesterday I was pointing out that we had a similar rally and conversation when the S&P was running up on low volume into July expirations and yesterday SPY volume was just 57M – just 3M more than last time I got pissed off and said it was BS.  

    We made a really good trade on SDS then but the S&P was 10 points higher.  Our SSO longs, fortunately, expire today 100% in the money (was the $109/111.50 bull call spread at $1.45) but I'm still liking the QQQ's better to the downside, maybe we'll look at an SQQQ trade into Sept later. 

    We're still dead balanced on our Portfolios but grinding out some profit.  On July 25th (before the drop), the LTP+STP was $115,321+$598,995 = $711K and on Aug 5th we were at $719K for the LTP + STP and yesterday we finished at $728K so, in a 3-week period in which we went down 4% and up 2.5% (so far), we managed to grind out 2.3% of additional gains.  

    This is the strategy I want people to focus on this year.  While it's all well and good to debate the merits of TA vs. FA – BALANCE is what's really important.  The combination of being well balanced and BEING THE HOUSE (Not the Gambler) allows us to grind out gains on a 20%+ annual basis IN EITHER DIRECTION OR FLAT!!!

    While it's nice to be clever and guess which way things are going – it's even nicer to have a great big pile of money because we wisely don't assume we're clever and simply sell premium to other "clever" people who like to bet on market directions.  

    Yes, I do mostly use Fundamentals to make my picks, that's why the STP has surprisingly outperformed in an up market, because we picked the right shorts and the right longs for the most part.  Still, we have our TA fun as well, mostly for our short-term trades and certainly on our Futures trades, though I like to have a Fundamental reason first and THEN I look for technical support/resistance.  

    When we're balanced, we can make nice little trades like the SSO (closing up 72%) or EPI (will be up 33%) to tilt ourselves a little more bullish or a little more bearish WITHOUT risking our overall strategy.  

  222. Stopped out of /TF at 1,151 – don't like the look of the other indexes.  Oil doing well at $95.67 so stop at $95.64 for a no-lose now.  

  223. See, that's all it takes in the Futures and the Egg McMuffins are paid for!  Even with a single contract, that's $210+ on two trades in less than an hour and, if we can do that 200 days a year, it's a nice $42,000 bonus.

    That's the thing about the Futures, you don't NEED to bet big.  Betting big is how you end up getting knocked out of the game and staying in the game is the whole point to trading the Futures as practice is very important and, SOMETIMES, if you take those small wins and small losses, SOMETIMES you accidentally catch a good one and make a lot of money.  

    For me, I almost always have a FUNDAMENTAL reason for making my bet.  I won't bet the RUT up at 1,150, even though it's holding, because I simply don't believe the RUT should be this high.  So, if I go long on the RUT, I have no conviction and that can lead me to making poor decisions when the trade goes against me.  Same with oil – we haven't shorted it since $97.50 as that was our goal but now that we are at $95.50, I'm more comfortable going long than short (and now we're crossing $95.70 with no stop out).  

    That's something you'll only learn with the experience of being wrong 1,000 times – it's really not worth playing unless ALL of the stars are lining up for you.  It's hard enough to win when you are 100% certain – then maybe you can be right 60% of the time.  When you are 90% certain – you'll be 50/50 at best!