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Testy Tuesday – 50 DMA Spectacular!

You've gotta love those trend lines.

Chart people sure love them and we love chart peopel because they are SOOOOOOOO predictable and predictable behavior is behavior we can bet on and that makes us happy.  Today we'll be seeing the 50-day moving averages on the Dow, the NYSE and the Russell all tested at the same time – what happens next will tell us a lot about this rally.  

As I pointed out to our Members in our Live Chat Room this morning, though we may be past our bounce levels and though we are now challenging the 50 dmas, we still have 3 of 5 of our Must Hold levels red on the Big Chart – that's not too impressive.  Consider what a 50-day moving average is.  It means that, over the last 50 days, half the time the index has been above the line and half the time it's been below – so how impressive should it be to see the index back in the middle?

SPY 5 MINUTENonetheless, Chart People believe it's some mystical symbol that gives them a rally signal and half the time they are right – so the religion of TA continues to prosper!  As you can see from Dave Fry's SPY chart from yesterday, 75% of yesterday's gain came on no volume as we gapped up in the Futures and the rest of the day's trading was one of the lightest of the year.  

The reason I like Dave is because he's one of the only TA people who actually pay attention to volume and this volume is total BS.  Still, it's enough to stampede the retail suckers back in and God bless them because they throw money at us to sell them the things we liked when they were out of favor.

In May and June, for example, we compiled a Buy List for our Members, which had 29 trades we liked for the rest of 2014.  Here's a few that we are done with already:

ABX (5/28) we featured in our June 3rd post - obviously one I like.  If you don't want to buy the stock for $15.90 (and we NEVER pay retail at PSW!), then you can sell the 2016 $15 puts for $2.05, which obligates you buy the stock for net $12.95, which is 19% below the current price.  

If ABX stays over $15 through Jan 2016, the short puts expire worthless and you simply keep the $2.05 ($205 per 100-unit contract) in exchange for the promise you made – if ABX goes below $15, you may be assigned and own the stock at net $13.  Since the net margin on the short puts is just $2.28, the trade returns 90% on margin in 18 months – not a bad inflation hedge, is it?   

If you want to get more aggressive, you can add the 2016 $15/22 bull call spread for $2 and you still have a nickel credit but now you have an upside of every penny over $15 up to $22 with a potential return of $7.05 on your 0.05 cash outlay (+14,100%) if ABX gets back to $22 by Jan 2016.  Still playable and already in our Income Portfolio. 

BRCM (5/20) is one we like to buy whenever they are not expensive.  They had a nice sell-off last year and we grabbed them at $25 but it doesn't look like that will happen again – now $30.23.  They only pay a .48 dividend (1.5%) so forget that and we can sell the 2016 $30 puts for $4.10 for a net $25.90 entry and leave it at that and, if they weren't already in the LTP (we sold the 2016 $25 puts for $3.10 when it was lower) I'd add it now.  (We cashed the LTP since then but those 2016 $25 puts are now 0.85 – up 72% in less than a month)

CIM (new) is a steady play at PSW.  It was one of our top 3 picks for 2013 at $2.86 and now, at $3.30, we still like them – mostly because they pay a juicy 0.36 dividend, which is 11% of the current price but even better after we're done giving ourselves a discount on the entry! 

On the right is my trade idea from last January's TV appearance on BNN and that net $1.96 entry is well on track to get called away next January for $2.50 (up .54) and, so far, we've collected 0.65 in dividends (there was a special bonus dividend in January).  Assuming we collect the June, October and December dividends for .27 before being called away at $2.50, our total return on $1.96 will be $3.42 – a 74.5% return on our investment in just two years.  

Now, perhaps, you can see why we love it so much!  CIM is not cheap at the moment so this one is a real watch and wait item – especially as they have not created 2016 option contracts on them yet.  We can, however, give ourselves a net $2.95 entry while we wait by selling the 2015 $3.30 puts for .35.  Even if we never end up owning the stock (if it stays over $3.30), we're still collecting almost the entire dividend amount against just 0.63 in margin.  That's a 55% return on margin between now and Dec (7 months). 

IGT (5/13) confuses me.  They just had good earnings yet they are being treated like dirt because they are in the midst of restructuring.  We love it when we can take advantage of a situation by simply being more patient than the current investors!  

IGT does pay a .44 dividend and they have expensive options so perfect for a buy/write where we buy the stock for $12.57 and sell the 2016 $10 calls for $3.40 and the $13 puts for $2.80 for net $6.37/9.19 so our WORST case is owning 2x at $9.19, which is 27% off the current price and that makes the .44 dividend 7% while we wait to see if we get called away at $10 for another $3.63 (57%) and, of course, we need to be over $13 to realize the full profit.  

If IGT were put to us with the stock at $11, for example – we'd still be up $3.63 on the first batch (which still would have been called away at $10) and our new 1x position would be $9.37 less the .88 dividend we collected over 2 years.  Not bad for a bad outcome…

As you can see from the chart, ABX is already at $18.69 and the short 2016 $15 puts are down to $1, up over 50% just 3 months later.  The combo with the $15/22 bull call spread was a .05 credit and the 10 in our Income Portfolio paid us $50 to take the position which is already up to net $2,750 – a gain of 5,600% on cash.  Not bad considering gold has been essentially flat over the same period! 

The BRCM short 2016 $30 puts are now just $1.73, up 58% on their 3-month anniversary.  CIM is less exciting as we're playing it for the dividend, not to make money on the stock, per se, but it was one of our trades of the year and you can see from the chart why we love it.  The new spread is right on track for the full 56% gain by December and now the options go to March – so we'll look at new trade ideas for them on our Live Webinar Today at 1pm (EST).

IGT has simple flown out the gates, blowing away our expectations with a 40% pop on the stock alone since our May selection as GTECH also saw the value we saw and bought the whole company.  The offer has squashed the premiums on our options and our net $6.37 combo is already at $9.08 (up 42% in 3 months) and good for another $1 (15%) when the deal closes, giving us our full 56% pay-off well ahead of schedule AND we picked up a .11 dividend (1.7%) in June with another on the way!  

Our of our 29 Trade Ideas for the 2nd half of 2014, only RIG, HOV and PFE have gone the wrong way on us (so far) for an 89% winning percentage.  This morning, in our Live Member Chat Room (you can join us here to get access to these and dozens of other trade ideas every month), I was able to identify 16 that can still be played with only minor adjustments.  After all, these are conservative, long-term trade ideas, they're not supposed to run away in 90 days – but sometimes they do

I wanted to do this quick review to keep things in perspective because we're NOT bearish – we are merely protecting our profits!  Our Long-Term Portfolio has $500,000 virtual dollars in it and it is 100% bullish (though less than 1/3 invested, as CASH!!! is our main hedge) and it is up 21% for the year so far.  Our Short-Term Portflio is just $100,000 and it is tasked with holding the bearish bets that protect our Long-Term Portfolio BUT we also make other short-term, opportunistic bets and that portfolio is up 30.1% for the year to date.  

So, when we talk about being more bearish, we are talking about PROTECTING the massive gains we already have – please keep that in perspective.  If we didn't already have $134,000 worth of profits to protect – we would probably be more aggressive on these moves up.  Meanwhile, our well-hedged model doesn't stop us from making money.  Just two weeks ago, the two portfolios were up "just" $119,000, at $719,000 combined so, even during this market chop, we were able to add $15,000 (2.5%) to our total in two weeks using our "Be the House – Not the Gambler™" strategy.  

While it's tempting to make big bets in a wild market like this – I just want to remind everyone that slow and steady does indeed win the race and we don't need to take big chances to make excellent annual returns.  At the moment, we're being very cautious – but we're making 1.25% a week while being cautious so please – let's continue to be careful out there!  


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  1. Phil

    Did you see this?  SBUX seems to like your idea on food trucks.

  2. Moving averages / Phil – Your definition of the 50 DMA is not entirely accurate. Because of the way the averages are calculated, indices can spend longer than the average period above or below the average. For example, looking at the S&P – it's been above it's 200 DMA since November 2012, that's probably close to 400 trading days above the average. 

    That's of course for a simple moving average – there are dozens of different calculations out there and I won't bore the members with all the descriptions.

  3. Oil Lines

    R3 – 96.27
    R2 – 95.57
    R1 – 94.82
    PP – 94.12
    S1 – 93.37
    S2 – 92.67
    S3 – 91.92

    That's for the October contract. Looks like nickels and dimes this morning!

  4. Good Morning Everyone! Don't miss the LIVE webinar today! 1pm (Eastern)!

  5. Speaking of averages:

    With today's rally, the Russell 2000 is actually trading in the upper half of its range for 2014 (midpoint: 1,151.12).  Eventually, the Russell is going to break out of its range in one direction or the other, and the longer it trades within this range, the bigger the move will likely be.  Until that happens, though, we would characterize trading in the Russell 2000 as nothing more than range bound consolidation.

  6. I guess you will need to adjust your political stance to address the next generation of voters:

    More minorities in public schools USA

  7. Bitcoin now $435.

  8. Maybe an explanation for the oil price movement – a bit counterintuitive but the results of sanctions against Russia:

    One consequence of the liquidation has been to prop up the price of oil futures, Verleger says. But over the coming few weeks, Vitol and Glencore will finish their liquidation, thus removing the price support. Oil prices already have been dropping fast because of a global supply glut, with Brent crude plunging to $101.79 today. Now they will drop further, Verlerger said.

  9. Google's very thorough due diligence process when acquiring companies:

    For major companies, acquisitions are traditionally an exhaustive (and exhausting) process, requiring rigorous examination of data and the employment of a horde of well-compensated bankers and lawyers. At Google, the process comes down to co-founder Larry Page’s “toothbrush test,” according to the New York Times (paywall): Is the product the target company makes something people will use at least once a day, and that makes their lives better?

    This reflects an attitude that values growth over profit, instinct and product over advice from Wall Street, and the long term over the short run. Mind you, it’s easier to take a long-term view when you have billions in revenue and cash on hand, and rapid growth, to boot.

  10. Minorities/StJ – as a white guy, I'm already a minority here in my Altadena neighborhood, in the local groceries, and even in LA as a whole. Fortunately, I was in the Peace Corps, so it doesn't bother me.

  11. Phil/EPI

    EPI is again at 22.70. any trade on that?

    Thanks as always

  12. The McClellan Oscillator is in very overbought levels right now +167 and with a market to the upside would put it in extreme overbought levels, near the highest for the year.

  13. Some more scary charts:

    Based on IMF data, we estimate that, by the end of last year, non-performing loans across euro area banks amounted to a little over 10% of the region’s GDP. But that aggregate figure masks a wide range of outcomes across individual countries. Non-performing loans on the balance sheets of Irish banks are worth more than 50% of that country’s annual economic output. With the euro area economy slowing once more, the non-performing loan problem is only going to get bigger. The need for a comprehensive recapitalisation of banks across the single currency bloc has never been more pressing.

    Euro area 4

  14. Good morning! 

    This picture says it all about the Las Vegas drought:

    Game over for humans, by the way.  

    Can Taxing the Wealthy Strengthen Democracy?  

    SBUX/DC – That's perfect for my model, things you can quickly hand out for $5 is the key to a good food truck. 

    DMAs/StJ – Well, not literally, of course, but that's what an average is.  You can spend 400 days above a 200 day moving average and the average will simply have to constantly rise to catch up but, at some point in the last 800 days, you had to be lower or the "average" wouldn't be that low in the first place, right?  Or do I misunderstand the concept of "average".  

    Thanks Greg.  

    Range-bound/StJ – Now THAT I agree with.  

    1,160 being tested on /TF, that's a fun spot to poke a short but very tight stops on the jumpy RUT.  /YM 16,850, /ES 1,972.75 and /NQ 4,025 all need to be failing to confirm.  

    /CLU4 (Sept) just fell to $98.84 but /CLV4 (Oct) hasn't fallen much ($93.80) and now a $2 spread.  /YG just under $1,300, /SI $19.55 again and we still like them long off $19.50 (TIGHT STOPS!!!) as long as copper is holding $3.10 (now $3.11) and gold is around $1,300.  Nat gas popping to $3.87 and gasoline $2.68 so you would think oil would be doing better – so I'll be looking for a long entry on /CLV4 today, maybe if they re-test $93.50.

  15. Statistics – 'average' is a generic terrm – mean, median, and mode are the common specific calculations, with the mean being more easily distorted by outliers and skewed distributions.

  16. Thanks for the advice on WU (the stock, not the actor) yesterday.  I had to before you were able to answer, but should be able to fill easily this morning.  Not to doubt your thinking but are you sure I should leave the 2.85% dividend on the table?

  17. Adjustments/StJ – Apparently the GOP solution is deportation!  This is why I don't send my kids to private schools – they are in a 50/50ish school and will come out knowing how to deal with the real World.  That's a skill a lot of white kids never acquire.  

    Bitcoin/Burr – I'm tempted to start accepting them at that price.  

    Rosneft/StJ – I question the numbers because that would be 511M barrels for $10Bn, which is just $20 per barrel.  I see a lot of stories trying to chase people out of oil this week and that makes me thing we're finding a floor and "THEY" are looking to clear all the suckers out before taking it back up.  

    GOOG/StJ – Not a terrible rational to use as it fits with GOOG's core competency.  

    EPI/Pat – So far so wrong on that one, but I still like it:

    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.  

    McClellan/Rustle – Dave his this:


    Where do you see 167?  

    OMG – now Ballmer is making idiotic speeches with the Clippers!  

    NPLs/StJ – And that's nothing compared to China.  Big head in the sand item. 

    200 dma – Since there seems to be some question of what it is and does:

    200-Day Moving Average

    What it is:

    The 200-day moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last 200 days.

    How it works/Example:

    You can calculate the 200-day moving average by taking the average of a security's closing price over the last 200 days [(Day 1 + Day 2 + Day 3 + ... + Day 199 + Day 200)/200].

    On the surface, it seems as though the higher the 200-day moving average goes, the more bullish themarket is (and the lower it goes, the more bearish). In practice, however, the reverse is true. Extremely high readings are a warning that the market may soon reverse to the downside. High readings reveal that traders are far too optimistic. When this occurs, fresh new buyers are often few and far between. Meanwhile, very low readings signify the reverse; the bears are in the ascendancy and a bottom is near. The shorter the moving average, the sooner you'll see a change in the market.

    Why it Matters:

    The 200-day moving average is perceived to be the dividing line between a stock that is technically healthy and one that is not. Furthermore, the percentage of stocks above their 200-day moving average helps determine the overall health of the market.

    Many market traders also use moving averages to determine profitable entry and exit points into specific securities.

  18. McClellan/Phil

    This is what you should be looking at:

  19. Phil/ Any thoughts on Sept XLE puts?

  20. /SI bottomed at 19.415 it looks like

  21. Phil do you have any thought on /SI since it failed 19.50?

  22. Moving average/Phil – so it's the mean. Thanks.

  23. phil, any suggestions for rolling the 97 qqq puts.  tia.

  24. McClellan/Rustle – I wonder what the discrepancy is?  Perhaps that the one on StockCharts is ratio adjusted?  

    XLE/Griffin -  Well no shorts are working now but our premise is low oil will be sustained and, so far, we're certainly sustaining the low oil prices.  Now it's just a question of whether or not earnings expectations for the Energy Sector begin to come down.  All it takes is one profit warning from a major and we're in business.  

    WU/Rperi – I'm not enthusiastic about them so looking for a conservative entry at net $15.80, worst case.  If all goes well, they go higher and you make a lot more than the .50 dividend and, more to the point, you are tying up just $800 on 10 contracts vs $13,600 if you bought the stock for $17.60 and sold the 2016 $17 puts and calls for $4 and then, of course, you'd be obligated to own 2,000 shares at $30,600 vs 1,000 shares at $15,800 should the options only play fall apart.  The difference would be $500 in dividends for taking the additional risk – so that's up to you but I can certainly find better things to do with $12,600 to make $500 over 16 months and, again, I'm not so sure I'd WANT to own 2,000 shares of WU if they fail to hold $17 over the next year+.

    /SI/Ricbah – I still like them over $19.50 but wouldn't play them under as they are technically weak.  Dollar 81.90 is to blame, up 0.20 (0.25%) since the open is putting pressure on commodities but my premise on Silver doesn't change.  

    QQQ/$25KP, Lunar – We'll likely call them dead in the 1pm Webinar.  We added the longer spread yesterday, that is technically the "roll" less what we salvage off the dead puts.  

  25. Averages / Phil – I think that the key word is "moving"…

  26. ARO waking up:

    Here's that $93.50 line on oil (/CLV4) if you are feeling brave on the long side.  Going to be crazy coming into the close of contracts tomorrow so VERY dangerous (but fun).  

  27. SBUX – those mobile rigs look mighty pricey.

  28. Phil/ARO

    "Aeropostale also said that its second-quarter operating loss was $36 million to $38 million, narrower than its previously forecast loss of $49 million to $54 million. The loss excludes charges such as asset impairment that weren't reflected in its original guidance, Aeropostale said."

    Earnings on Aug. 21.

  29. Hi Phil,

    I know I am asking a sacrilegious question, but how would you construct a short play on Apple ?

    I just don’t buy the recent hype/run-up based on financial engineering instead of product innovation.

  30. Hoping LOCO can break 30.  Still hoping to write puts if it can get to mid 20's again.

  31. Phil AAPL – I was wondering about AAPL for the butterfly portfolio.  The 2016 options are really liquid, and if it gets into the DOW  it might not move around as much as it used to.

  32. WU – Thanks Phil

  33. Phil/ARO – I believe the news on ARO is about them replacing their ceo.  


  34. phil, thoughts on NFLX? iw this momo poised to retreat a bit.  any play?

  35. Since when did X become a momo?  

  36. Boy did we pick a good time to flip more bearish on TSLA last week!  

    This trade is now jacking up the STP (after killing it for a long time).  

    SBUX/Scott – Looks like a normal roach coach design, usually about $50K plus the equipment which, for SBUX, is probably on the high end vs most trucks.   Still, even if $100K – over 3 years that's $3,000 a month or $100/day or 20 cups of coffee and the truck is paid for.  Another 60 cups covers two employees and the cost of the coffee and cups and then it's profit as long as they sell more than 8 cups an hour.  

    ARO/DC, Palotay – At this price ($300M), any news is likely to be taken well.  Testing $4 now!  

    AAPL/Charlie – At $100, not such a crazy idea.  Still, I am an AAPL lover so my "short" play would be selling Sept $90 calls for $10 and buying the 2016 $100/110 bull call spread for $3.70 to cover and I'd also sell the 2016 $75.71 puts for $3.60 so you net 0.10 on the long spread that covers your $10 short position in case you are up to 10% wrong about AAPL.  Since the spread should hold most of it's value and since you are net $9.90 credit on the overall play, any move down in AAPL should give you a very nice profit.  You can do it without the short puts too – if you really don't like them but, as you know – that's not how I feel about them. 

    LOCO/Rustle – I guess it hasn't occurred to anyone that there might be some upward limit of how many of these chains can be supported by the current population?  There must be a dozen companies that are projecting to be as big as MCD one day (and priced like they will be).  I'll just list a few that come to mind:

    • Howard Johnsons
    • Friendly's 
    • Mister Donut
    • Chi Chis
    • Steak and Ale 
    • Ground Round
    • Sambos 
    • Bennigan's 
    • Arby's 
    • Long John Silvers 
    • Gino's 
    • Lum's 
    • Kenny Rogers

    Of course LOCO sells chicken, that's TOTALLY different!  

    AAPL/Rdn – The idea for a butterfly play is to find a stock that DOESN'T move 10% in a month, not OFTEN.  

    You're welcome Rperi. 

    NFLX/Lunar – This was from Friday:

    NFLX/Rustle – I'm sure they are spending $50M on another show.  $460 is just too insane not to short, the next week $460s can be sold for $6.50 – that's my choice but, of course, VERY DANGEROUS!!!  

    Those are now $7.50 but were $11.50 yesterday so, on the whole, you'd better REALLY want to be short NFLX (and long margin) for quite a while if you are going to make plays like this!  I still like the same sale on Friday's $460s and, after that, we can see how they're doing.  

    X/Rdn – Always been a crazy stock – just unusually calm for a while.  From 2003 to 2008 it went from $20 to $200 and ten back down to $20 in 2009 and back to $65 in 2010 and back to $20 in 2012 (where we've liked them since) and now they may be waking up finally.  

    This has always been a no-brainer to me, if the economy comes back in the US, shouldn't we bet on our local steel company?  Same logic for CLF.  

  37. Yes it was along time ago but when I started in computers the first 2 years involved 4 to 6 months in different schooling as everyone's product was different. All full pay and the paid all moving expenses when they wanted me in a different location. Entry level job! Schools can't do the specialized training and job hunters have their limits.

  38. Phil/AAPL – Can you explain your reasoning behind selling the September $90's in that previous play suggestion to Charlie?  They have very little premium, which seems counter intuitive in light of our be the house strategy.  

  39. The police caught themselves another rioter in Ferguson:

    View this content on HuffPost Politics's website

    Embedded image permalink

    Embedded image permalink

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    VIDEO: Redskins players show 'hands up' solidarity with Ferguson protesters:

    Embedded image permalink

    Hedy Epstein, a 90-year-old Holocaust survivor was arrested on Monday during unrest in Ferguson, Missouri KMOV reports. Epstein, who aided Allied forces in the Nuremberg trials, was placed under…

    Looks like I'm still not rich enough:

    Embedded image permalink

    Embedded image permalink

    Interesting Diamond, thanks.  

    True Shadow, it used to be that employers EXPECTED to train their workers – it was part of the cost of acquiring them and that kept the employers motivated to nurture a long-term relationship with the employees.  Now, the employees have been tricked into paying for their own training and have become disposable commodities to the employers.  

    AAPL/Palotay – He wanted to bet them to go lower and that's a safe(ish) way to make that bet.  It's not highlighted and not a trade I'd make but, if you do want to play them bearish off $100, you want a trade that will make $2 if AAPL goes down $2 so no premium works in our favor there.  

  40. Kenny Rogers/Phil

    That chain created one of the best Seinfeld episodes.  I never actually ever saw one of the restaurants in person.

  41. BTW all

    Remember those graphs? How many foreigners moved to states? Phil was surprised.

    Now remember that it was posted that US jobs were given to foreigners locked in visas for lower pay while Americans couldn't get an interview?

    Ownership tells the real opportunities and it isn't you.

  42. Webinar in 40 mins! We may have actually fixed the final bug – that people can't chat to All Participants.   

  43. Icahn talking up AAPL on CNBC – got them right over $100 now.  

  44. On the hour

    12:00 PM ET

    • Dow +0.4%.
    • 10-yr flat.
    • Euro -0.33% vs. dollar.
    • Crude -0.5% to $93.28.
    • Gold -0.28% to $1,295.70.

  45. Duke Energy spill forces shutdown of 15-mile Ohio River stretch

    12:20 PM ET · DUK

    • The U.S. Coast Guard closes a 15-mile stretch of the Ohio River after at least 5,000 gallons of fuel oil spilled from a 60-year-old power plant owned by Duke Energy (DUK +0.9%) near Cincinnati.
    • The spill occurred late Monday during a “routine transfer of fuel oil” at the Beckjord plant, DUK said.
    • Beckjord is being retired as a result of new government emissions standards; four of the plant’s six coal-fired units already have been closed, and the remaining two are expected to shut down by the end of the year.

  46. LinkedIn slips on rumors of major short position

    12:05 PM ET · LNKD

    • Rumors that an institutional investor has taken a major short position in LinkedIn (LNKD -0.8%) are leading shares to slip on an up day for equities. David Einhorn’s name has been thrown around in some of the rumors.
    • Shares remain up 20% from where they traded prior to LinkedIn’s July 31 Q2 beat.

  47. AMD enters SSD market; SanDisk updates its lineup

    11:58 AM ET · AMD

    • AMD (AMD +1.3%) has jumped into the PC SSD market courtesy of its Radeon R7 SSD line, offered in partnership with Toshiba-acquired OCZ.
    • 120GB, 240GB, and 480GB drives are offered, and AMD promises the gamers it’s targeting will get high-end performance: The 480GB model respectively has max random read and write IOPS of 100K and 90K – the use of high-end Toshiba NAND flash parts doesn’t hurt. The 120GB model goes for $100, and the 480GB model for $290.
    • Reviews are positive, though not quite glowing. TweakTown admits the OCZ Barefoot 3 controller used by the drives is “showing its age,” but also praises the R7 line’s performance and pricing. Bit-tech thinks mainstream users “will be best served” by rival and Crucial and Samsung drives, but adds AMD’s drives could be a good deal for some performance-focused buyers.
    • Meanwhile, SanDisk (SNDK +1%) has launched its Ultra II SSD line, which replaces the older Ultra Plus line. The drives are aimed at mainstream buyers – the more costly Extreme Pro line targets enthusiasts – and come packaged with performance monitoring, cloning, and theft recovery software.
    • Pricing is aggressive: SanDisk is charging $80 for the 120GB model, $115 for the 240GB model, $220 for the 480GB model, and $430 for the 960GB model.

  48. PG&E pleads not guilty to criminal charges in San Bruno blast

    11:55 AM ET · PCG

    • Pacific Gas & Electric (PCG +0.62%) pleaded not guilty yesterday to charges in a new indictment that accuses it of lying to federal investigators looking into the fatal 2010 pipeline explosion in San Bruno, Calif.
    • PG&E entered the plea to all 28 counts, including obstruction of justice; the new indictment, announced last month, replaces a 12-count indictment that related to the utility’s safety practices but did not include an obstruction charge.
    • If found guilty, PG&E could have billions in fines added to the expected fines coming within weeks from the California Public Utilities Commission.

  49. Molson Coors inks deal to distribute Heineken brands

    11:41 AM ET · TAP

    • Molson Coors (TAP +0.2%) announces it signed a five-year distribution deal with Heineken (OTCQX:HEINY).
    • The agreement will see Molson distribute Dos Equis, Sol, Tecate, Birra Moretti, and Desperados in Canada.

  50. Enbridge’s Oklahoma-Illinois pipeline can proceed, court rules

    11:37 AM ET · ENB

    • Enbridge’s (ENB +0.4%) pipeline to carry tar sands oil between Oklahoma and Illinois can proceed, a federal judge ruled yesterday after rejecting arguments by the Sierra Club and the National Wildlife Federation that the failure to conduct an environmental impact review of the pipeline violated the National Environmental Protection Act.
    • “Plaintiffs are wrong to insist that any federal agency had an obligation under NEPA or any other statute to conduct an environmental review” of the pipeline’s impact, the judge said.
    • The pipeline will carry crude oil from Pontiac, Ill., to Cushing, Okla.

  51. Disney preps for Star Wars content blitz

    11:27 AM ET · DIS

    • Disney (DIS) will premiere a one-hour Star Wars movie on its Disney XD app and on September 29. Star Wars Rebels: Spark Of Rebellion will be available for pay-TV subscribers who authenticate their log-information.
    • The online film will be followed on October 13 by the TV launch of Star Wars Rebels on the Disney XD network in 163 different countries.
    • The plot timeline for Star War Rebels is roughly five years before the chronology of the original Star Wars.

  52. Reuters: Tencent, Couche-Tard makes short-list in $16B Sinopec unit sale

    11:25 AM ET · ANCUF

    • Canada’s Alimentation Couche-Tard (OTCPK:ANCUF) and China’s Tencent Holdings (OTCPK:TCEHY, OTCPK:TCTZF) reportedly are among suitors on the short list to buy a $16B minority stake in China’s Sinopec Sales (SNP, SHI), the world’s largest fuel retail network.
    • Sinopec plans to sell up to 30% of Sinopec Sales by year-end 2014 as China restructures government-owned assets; while a deal would give investors little control over the company, a likely exit through an IPO planned within three years appears to have attracted a wide range of suitors.
    • Sinopec Sales booked a net profit of 25.1B yuan ($4.1B) in 2013 from 30K-plus service stations and 23K-plus convenience stores.

  53. Maxwell +4.6% on Spanish ultracapacitor deal

    11:17 AM ET · MXWL

    • Engineering firm Win Inertia is using Maxwell’s (NASDAQ:MXWL) ultracapacitors in “a stationary wayside braking energy recuperation system at an electric rail system in Cerro Negro, Spain.”
    • Maxwell asserts the use of ultracapacitors both allows more braking energy to be recovered than through batteries (as expected), and can extend battery life by 20%-25% by relieving “the stress of repetitive cycling.” The system also allows excess energy to be stored in a battery bank powering an EV charging station.
    • Previous: Maxwell adds to gains following bullish Piper note

  54. CEMEX supplies concrete for Mexico’s largest petrochemical project

    11:13 AM ET · CX

    • CEMEX (CX -0.1%) is supplying 250K cubic meters of several specialized concretes for the the construction of the new BRASKEM IDESA-Etileno XXI Plant in Veracruz, Mexico.
    • “We are very proud to be participating in this massive industrial project in Mexico,” says President Juan Romero. “This clearly exemplifies the way our portfolio of special products offers building solutions capable of prevailing in even the most challenging projects.”
    • The plant is the largest petrochemical investment in Mexico in the past 20 years.

  55. Goldman and Libya SWF headed to trial

    11:08 AM ET · GS

    • Goldman Sachs (GS) withdrew its summary judgement application after looking over the Libya Investment Authority’s reply evidence (according to the LIA), and the two are headed to trial over the fund’s claim Goldman improperly led it into more than $1B in equity trades which expired worthless. Goldman reaped a profit of about $350M on the trades, according to the suit.
    • Next up is a case management hearing scheduled for early October.

  56. Lilly gets tentative approval for diabetes drug

    10:42 AM ET · LLY

    • The FDA grants tentative approval for Eli Lilly (LLY +0.5%) and Boehringer Ingelheim’s Basaglar (insulin glargine injection) as a treatment to improve glycemic control in adults with type 2 diabetes and in combination with prandial insulin in adult and pediatric patients with type 1 diabetes.
    • While the FDA has determined that Basaglar meets all the criteria for market clearance, it is tentative because of the automatic 30-month stay due to Sanofi’s (SNY -0.8%) patent infringement suit. The agency cannot issue final approval until the stay ends (mid-2016) or unless the court finds in Lilly’s favor before then.

  57. Citigroup weighs in on McDonald’s

    10:39 AM ET · MCD

    • Citigroup reiterates its Neutral rating on McDonald’s (MCD +0.3%) after sizing up the restaurant operator’s flattish Q2 report.
    • The investment firm has a price target of $101 on MCD.
    • Shares of McDonald’s have resisted the urge to drop below $92 over the last year with the company’s +3% dividend yield providing support.

  58. Homebuilder investors cheer fast housing starts print

    10:31 AM ET · LEN

    • A far-faster-than-expected 15.7% gain in housing starts in July has the homebuilders sharply higher. Lenner (LEN +2.6%), Comstock (CHCI +5.8%), Ryland (RYL +2.4%), Hovnanian (HOV +3.2%), D.R. Horton (DHI +2.1%), Toll Bros. (TOL +1.4%), PulteGroup (PHM +1.1%), KB Home (KBH +1.9%).
    • Commenting on the number, Bill McBride notes starts in Q1 averaged 925K on a seasonally-adjusted annualized rate, 997K in Q2, and that Q3 appears to be off to a solid start (1.093M in July). By year’s end, McBride expects 2014 housing starts to increase by a double-digit pace over a weak 2013.

  59. Janney: Number-crunching on HBO leads to $95 TWX valuation

    10:24 AM ET · TWX

    • Janney Capital analyst Tony Wible thinks Time Warner (TWX) should create a tracking stock to rep its HBO business.
    • His number-crunching puts the value of HBO at $30B or about $35-per-TWX share. A sum of the parts valuation from Wible gives the combined company a $95 share price.

  60. Chinese solar stocks rally; Roth more optimistic about settlement

    10:20 AM ET · YGE

    • “Based on our checks, we estimate the probability of [trade settlement] success is now ~30-40% vs. prior expectations of 5-10%,” writes Roth. “The narrative for Chinese solar stocks, in our view, has shifted to a more positive tone.”
    • Roth’s remarks follow a letter from a law firm representing the Chinese government to the U.S. Commerce Department proposing talks for a solar tariff suspension agreement. Last week, Beijing retaliated against U.S. solar module tariffs by closing a loophole for U.S. and Korean polysilicon imports.
    • Though admitting many Chinese suspension offers have been rejected over the years, Roth thinks “the Chinese government would not have made an offer without believing it would have a decent probability of success as it does not want to be rejected by the US government publicly.”
    • Notable gainers: YGE +3.9%. TSL +3.9%. JASO +3.3%. SOL +3.9% CSUN +6%. HSOL +4.3%.
    • Solar ETFs: TAN, KWT

  61. Dunkin’ Brands rated a Buy at Cleveland Research

    10:08 AM ET · DNKN

    • Cleveland Research initiates coverage on Dunkin’ Brands (DNKN +0.8%) with a Buy rating.
    • The investment firm typically has a firm read on current-quarter comp trends.

  62. Star Bulk to acquire 34 drybulk vessels from Excel in cash and stock deal

    10:01 AM ET · SBLK

    • Star Bulk Carriers (SBLK +5.2%) agrees to acquire 34 drybulk vessels from Excel Maritime Carriers (NYSE:EXM) for ~29.9M shares and ~$288M in cash for total consideration of $634.9M.
    • The sale consists of six Capesize vessels, 14 sistership Kamsarmax vessels, 12 Panamax vessels and two Handymax vessels mainly built at shipyards in Japan.
    • The vessels will be acquired in a series of closings which SBLK expects to complete by the end of 2014.
    • After the deal, SBLK will have 103 vessels in its fleet, with an aggregate cargo-carrying capacity of ~11.85M deadweight tons.

  63. Mall retailers rally as sentiment improves

    10:01 AM ET · ARO

    • A CEO transition at Aeropostale (ARO +11.1%) along with some robust earnings reports from retail heavyweights is helping to give a lift to some beat-up mall sellers.
    • The general take from analysts is that the group is entering the Back-to-School season with an assortment more aligned to teenage tastes and with a tighter reign on SG&A expenses.
    • Gainers: Zumiez (NASDAQ:ZUMZ) +2.4%, Express (NYSE:EXPR) +1.6%, Tilly’s (NYSE:TLYS) +1.8%, Buckle (NYSE:BKE) +1.7%, Abercrombie & Fitch (NYSE:ANF) +2.3%, American Eagle Outfitters (NYSE:AEO) +2.8%, Gap (NYSE:GPS) +1.2%.

  64. Baird downgrades SolarCity, cites valuation

    09:52 AM ET · SCTY

    • Believing good news is priced in at current levels, Baird has downgraded SolarCity (SCTY -1%) to Neutral. Its target is still at $83.
    • Baird had only upgraded SolarCity on April 17, when shares were at $56.11. At the time, the firm called SolarCity “the stock most levered to the U.S. rooftop market, which will likely undergo a boom over the next several years.”

  65. McDonald’s eyes 2015 launch for McCafe coffee at retail stores

    09:48 AM ET · MCD

    • McDonald’s (MCD +0.1%) announces it will sell McCafe coffee in grocery stores next year through a distribution partnership with Kraft Foods Group (KRFT -0.3%).
    • The market for bagged coffee at retail outlets is estimated at $11B.

  66. AmEx boosted by upgrade

    09:18 AM ET · AXP

    • American Express (NYSE:AXP) is up 0.6% ahead of the bell after Macquarie pulls its Sell rating on the stock, upgrading to Neutral with price target remaining at $81.

  67. Trio of retail heavyweights rise above the slog

    09:16 AM ET · XLY

    • Earnings beats and solid guidance from a trio of heavyweight retailers this morning showed that a collapse in store traffic and margins isn’t pervasive across the sector.
    • Retail analysts think the common theme between Dick’s, Home Depot, and TJX Companies is the solid execution by management and a focused selling message.

  68. Redbook Chain Store Sales

    09:07 AM ET · PBJ

  69. U.S. investors shy away from Europe

    08:59 AM ET · EWG

    • Reversing a big YTD trend, U.S. investors pulled nearly $4B out of Europe-focused ETFs over the past week. Among the reasons, suggests Markit’s Simon Colvin: Europe is seen as more exposed to Russian sanctions, anemic European growth, and a strengthening U.S. dollar. “The only certainty is that a growing portion of American investors think that their assets are better invested outside of Europe, something which wasn’t the case six weeks ago.”
    • Interestingly, it’s the “core” Eurozone countries like Germany (NYSEARCA:EWG) and France (NYSEARCA:EWQ) with which U.S. investors are least interested, while Italy (NYSEARCA:EWI) and Spain (NYSEARCA:EWP) have seen net inflows over the past three months.

  70. TJX Companies higher after strong report and guidance

    08:52 AM ET · TJX

    • TJX Companies (NYSE:TJX) reports consolidate comparable-store sales rose 3% in Q2.
    • Consolidated pretax profit margin +30 bps to 12.3%.
    • SG&A expense ratio -50 bps to 16.2%.
    • Inventory +1% to $3.4B.
    • Comp growth by division: Marmaxx +2%; HomeGoods +5%; TJX Canada +3%; TJX Europe +6%.
    • Guidance: Full-year EPS of $3.10-$3.18 expected vs. $3.14 consensus.
    • TJX +4.3% premarket

  71. Treasury yields remain lower after housing starts and CPI

    08:42 AM ET · TLT

  72. Core CPI up 0.1% in July vs. 0.2% estimate

    08:30 AM ET

  73. Housing Starts surge 15.7% to 1.09M

    08:30 AM ET

    • July Housing Starts: +15.7% to 1.09M vs. 0.963M expected and 0.945M prior (revised).
    • Permits +8.1% to 1.05M vs. 0.973M prior (revised).

  74. Medtronic reiterates guidance after fiscal Q1 results

    07:59 AM ET · MDT

    • Medtronic (NYSE:MDT) fiscal Q1 results: Revenues: $4,273M (+4.7%); U.S.: $2,333M (+5.8%); International: $1,940M (+3.4%); COGS: $1,105M (+8.1%); Operating Expenses: $2,085M (+9.3%); Net Income: $871M (-8.6%); EPS: $.87 (-6.5%); Quick Assets: $13.96B; CF Ops: $310M (-68.5%).
    • Cardiac Rhythm & Heart Failure: $1,256M (+5.3%); Coronary & Structural Heart: $766M (+2.4%); Aortic & Peripheral: $232M (+5.9%); Spine: $743M (-2.9%); Neuromodulation: $479M (+11.9%); Surgical Technologies: $381M (+5.5%); Diabetes Group: $416M (+12.7%).
    • Fiscal 2015 Guidance: revenue growth: 3 – 5%; non-GAAP EPS: $4.00 – 4.10.

  75. ICSC Retail Store Sales

    07:49 AM ET · PBJ

  76. Target prices raised for Kinder Morgan, Kinder Morgan Partners at RBC

    07:46 AM ET · KMI

    • Kinder Morgan’s (NYSE:KMI) price target is raised to $45 from $40 at RBC Capital, which remains positive on KMI’s proposed acquisition of its MLP entities; it rates shares at Outperform (
    • In the firm’s view, KMI has effectively created an MLP in a corporate structure, given its cash tax savings, payout ratio and cost of capital, and it believes the transaction better positions KMI for faster dividend growth.
    • RBC also raises its target for Kinder Morgan Partners (NYSE:KMP) to $109 from $83, seeing the deal as the best alternative for the Kinder complex given the cost of capital at KMP, adding that ~46% of the distribution currently accrues to KMI.

  77. Comps impress at Dick’s Sporting Goods

    07:46 AM ET · DKS

    • Dick’s Sporting Goods (NYSE:DKS) reports comparable-store sales increased 3.2% in Q2 vs. guidance for a 1%-3% gain and 2.2% consensus.
    • Same-store sales for the Dick’s brand was up 4.1%, while Golf Galaxy saw a 9.3% decline on slow traffic.
    • E-commerce penetration +70 bps to 6.3%.
    • Inventory +11.2% to $1.418B.
    • SG&A expense ratio +68 bps to 22.0%.
    • Store count +41 to 642.
    • Guidance: Full-year comp store growth of 1% to 3% is forecast. EPS is seen as falling in a range of $2.70-$2.85.
    • DKS +6.2% premarket

  78. Thermal imaging for smartphones continues to take off

    07:37 AM ET · RTN

    • Collaborating with Raytheon (NYSE:RTN) and chip maker Freescale Semiconductor (NYSE:FSL), startup Seek Thermal is planning to sell a thermal imaging add-on camera for smartphones for about ~$250 this fall.
    • The new add-on camera is bringing down the price for the cameras, which may ultimately become a built-in feature on many consumer products.
    • This past July, Flir Systems (NASDAQ:FLIR) introduced a $349 iPhone accessory that allows a smartphone’s display to show glowing heat signatures of people, animals, lights and other objects.
    • Such technology is already used for many commercial purposes, such as detecting leaking hot-water pipes and overheating electrical devices, and the further advances in the field may lead cheaper thermal cameras to hit the mass market.

  79. Pound slides as U.K. inflation slows

    07:29 AM ET · FXB

    • July inflation slowed to 1.6% from June’s 1.9% and against forecasts for 1.8%, according to the Office for National Statistics. Retail-price inflation – the gauge used as a basis for inflation-linked bonds – slowed to 2.5% in July from 2.6%.
    • The pound tumbled about 60 pips on the news and is now off 0.5% on the session at $1.6640.
    • ETFs: FXB, GBB

  80. Strong comp growth and guidance from Home Depot

    06:55 AM ET · HD

    • Home Depot (NYSE:HD) reports comparable-store sales rose 5.8% in Q2. Comp growth in the U.S. was 6.4%.
    • Transactions +4.2% to $409.7M.
    • Average ticket +1.8% to $58.43.
    • Sales per square foot +5.5% to $403.90.
    • Inventory +5.2% to $11.665B.
    • Guidance: Net sales are expected to rise 4.8% for the fiscal year. Full-year EPS of $4.52 is forecast vs. $4.41 consensus.
    • HD +3.5% premarket

  81. U.S. to continue limited airstrikes against Islamic State

    06:40 AM ET · GULF

    • President Barack Obama says that the U.S. will continue “limited” airstrikes against Islamic State militants, which have helped Iraqi and Kurdish forces retake the Mosul dam and halted the advance of IS on the city of Erbil.
    • News of the recaptured dam helped push oil prices down with Brent for October settlement sliding 1.9%, to $101.60 a barrel on the London-based ICE Futures Europe exchange yesterday, resulting in its lowest close since June 26, 2013.
    • ETFs: GULF, MES

  82. @stjeanluc: Oil article, I don't get their logic. They were liquidating short positions in Apr and Dec 2015. This should prop Apr and Dec 2015 prices. However they were dropping much faster then front month. If what they say true, it should be other way.

    It more looks like somebody was unwinding front month short positions. Am I missing something?

  83. Oil / Lol – I guess the point was if they are unwinding short positions, it provides support to the price over all the expirations. Without that support, prices should fall down. It made sense to me, but I am not the expert there.


     Every week for over 2 years my wife and I have gone to Costco. We pass a food truck parked in an Industrial parking lot on the way…always a line at the truck  10:AM, 1:00PM, 3:00PM anytime we passed  -  always a line.  For the first time yesterday we stopped …around 1:00, crowd, maybe 15 in line and eating.

    Fish Tacos $1.25 ea, we had 1 each.   WOW! Fantastic! warm luscious fish, crunchy, crispy breading, crema, fresh cabbage, warm fresh corn tortilla. Never had as good in any restaurant! 

    Two people on the truck one taking and delivering orders, one cooking. There must have been another because the stand up tables and trash area were clean  and the two in the truck were too busy to take care of that.

    Going to survey all the trucks in our area, I know of 4… all Mariscos (fish) trucks.   

  85. I made up my mind to be wise and play carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do….They say you never grow broke taking profits. No, you don't. But neither do you grow rich taking a four point profit in a bull market. ~ Jesse Livermore

  86. Phil:  Sent "The Cantillon Effect", perhaps very timely.

  87. Webinars- is Webex iPad compatible? I tried to attend but was told to use a PC !!

  88. Some great thoughts by Jesse Livermore:

    Several (of many) …

    “It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.”

    “It took me five years to learn to play the game intelligently enough to make big money when I was right. There was much more to the game of stock speculation than to play for fluctuations of a few points.”

    “There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!”

    “One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.”

  89. Dmulligan:  I have never been able to access Phil's webinar on my Macbook Pro.  I will send a message to Webex asking for techincal support, but my guess is that Webex is not compatible with Apple products.  I've tried using both the Safari and Chrome browsers.

  90. Profits/Winston – amen to that.  In reply (in part) to your previous question posed, let me rephrase and answer: When do I close a winning short put position?  Generally, I look to close them when they get down to an annualized 20% or less return on margin.  Many short puts positions can be opened with a 20-50% return on margin, in periods ranging from 6 to 18 months. Annualized, those returns may be 40 to 100% or more. Rather than wait another X days (or months) for a short put to expire for the last few dollars, I evaluate to see what the annualized return will be for the remaining holding period. If over 20%, I just leave it. If breaking under 20%, this goes on short list for margin to be redeployed if/when I have a new trade ("fresh horse") to move to that offers something more. I find comparing the annualized return against my opportunity cost (the margin requirement) helps to compare the base metrics of one trade vs. another.

  91. I would guess the net effect of Cantillon's idea would be a rate spike.

  92. XRT over $87.  Time for a few puts?

  93. DMull- I have viewed on an Ipad just in the last two weeks. You need to go to the app store and download the webex app or something like that. I can't remember exactly, but it told me what I needed when I tried to attend initially. Good luck and I hope it helps a little even though not specific.

  94. Scottmi/Profits – I fully agree with that approach. I'm amazed it took me so long to realize that. But I view it more as good housekeeping than any real strategic decision. However, I've lost count of the number of times I have closed short puts, promising myself to make back the opportunity cost' by selling more premium, and then finding myself distracted by the next 'big thing'.

  95. 1.25 for a fish taco?  Whoever is running that truck must be either using that as a "loss" item to entice people to buy higher margin items, or doesn't know his business well enough.  

    I priced out fish taco's for our food truck here in FL, and unless we sold them for $4 (breakeven) it doesn't make sense.  Fish is one of the highest priced proteins on the market, and states like FL require you to purchase frozen to ensure food saftey.  He then has to pay for refrig, grilling or frying fuel, and the time it takes to keep all the inventory on hand.  Fresh soft taco's (hard to keep fresh), cabbage/slaw, cheese, tomato's, lettuce, fresh salsa.  All these items spoil, so they are inventory loss leaders.

    Just my 2c.   

    PS:  After working in this thing 8 hours, and coming away from it with $500-800 profit…. it makes futures trading look like mana from heaven.

  96. 2 questions

    1) Do we like TEX?  Is there a potential trade on that?  I met many ship captains in Nicaragua and they all talked about how much more $$$ will be made when the canal is made bigger.

    2) Thoughts on UPL?  Barrons likes them for 50% upside.

  97. /CLU4-/CLV4 spread

    no guts, no glory

    the spread on this calendar rose to a high of 2.92 and had a low today of 1.50 at 14:30ET, close of Nymex trading.  It will be interesting to see what happens tomorrow, the last day of trading for the U4 contract.

  98. TQQQ – Just bought 5 of the OCT 86/80 bear put spreads instead of the Sept from yesterday for $2.15.  Looks like today's rise allowed us late hedger's to buy a month out for a small savings.

  99. Burr/TEX

    Phil has them in the Income portfolio, you can check the play in last Thursday's post but I believe it was a Jan 16 30/40 bull call spread and selling the 35 puts.

  100. Food Truck

    I have always been interested in one of those. Low cost stuff like peanut butter and grilled cheese sandwiches. Here is a concept from your old stomping grounds Phil..

  101. volume very low again today.

  102. jeffdoc – Thanks!  The search on here is SO bad, I can't find anything.

  103. Phil – TEX.  Is the position correct in the IC?  It looks like the poweroptions spreadsheet has Jan15 options in it:

    But in the inital buy you have Jan2016 options.

    They don't pay a dividend (0.20), so no reason to own them but you can sell the 2016 $35 puts for a very nice $5.30 for a net $29.70 entry and leave it at that or add the $30/40 bull call spread at $5.50 for net .20 on the $10 spread that's almost 100% in the money.  This one is too good – gotta pull the trigger on 5 in the Income Portfolio!  

  104. F. Me.  Please delete that!   I'm a dolt.

  105. Fish whatever

    Around here you cam buy frozen Tilapia for $3.99 per pound any day, shrinks very little thawing or cooking. Tomatoes cost more per pound but cabbage is super cheap, and taco shells are very inexpensive. I believe you could make 8 per pound and cost about $.60 to .$.70 with slaw. Draw in the hungry and sell drinks for the big rip.

  106. An aside: in another incarnation I was an off track bookmaker – the man who takes the bets on the day's horse and greyhound racing events. In the neighbourhood, there were many of us and we got to know the regular punters. Well there was this was one guy who started off with a $20 bet, and I kid you not, after an incredible winning streak he had managed to turn this into $20k. That was a long time ago when $20k could pay for a lot of good times. He attracted a lot of hanger ons, and everyone marvelled at his ability to 'pick winners'. A got to know him a bit, and he came from a disadvantaged background, dressed accordingly and carried his winnings around with him in a brown carrier bag – ostensibly that this made him less vulnerable to draw the attention of the criminal fraternity. To cut a long story short, he ended up hiring helicopters to take to the big race events so he get bet amongst the 'big' boys. Suffice to say, the last time I saw him was when he came into my shop with his last $20 looking to that big winner. After the result, nothing more was heard of him.

  107. Food Truck/Gerry – That's the key, specialize in something.  The ones that try to be all things to all people don't do as well.

    Good quote Winston.

    Cantillon Effect/ZZ – It's what I've been saying for ages: "Debts that can't be repaid, won't be repaid."

    Webex/DM, John – I don't think it works on an IPad.  I know it works on a Macbook though as Greg does use it on his.

    Jesse/Diamond – I hope he has a way to learn that doesn't involve being wiped out.  Generally good advice (as usual from him). 

    Profits/Scott – Good rules of thumb but sometimes something is so safe that there's no point in not letting it expire worthless (like our short AAPL puts).  Depends on margin and if you have anything better to do with it.  

    XRT/Den – They had good news today, I think we should see how it plays out but yes, I do like shorting them here.  

    Fish/Burr – Well, they just call it "fish"…  blush

    TEX/Burr – I do like them, they should bounce with the economy but that means SLOWLY.  I just like the fact that $35 seems like a fair bottom and they give us an entry below there and, as you note, there's a lot of upside potential.  You can sell the 2016 $35 puts for $5 and buy the $32/42 bull call spread for $5 for net $0 on a $10 spread that's $5 in the money to start.  Not a bad way to get in.  

    And what Jeff said I said.  

    UPL/Burr – I don't find them exciting but $25 is a fair price.  The long puts still have good premiums and you can sell the 2016 $20 puts for $1.85 and consider that free money (as it only obligates you to buy 1x of the stock for a 20% discount) and use it to buy the $22/30 bull call spread at $3.40 for net $1.55 on the $8 spread that's $3 in the money and Barron's only has to be half right for you to get $8 back (400%).  

    Oil spreads/Edro – Living on the edge!  

    TQQQ/Burr – Good adjustment. 

    Food truck/Randers – I should have realized, back in college, what a great business a food truck would be.  My brother was in Ithica and I used to make fun of him and his friends for going crazy over the food truck that pulled up to their quad from 10pm to 2am but they always had massive lines – even though the food was crap. 

    Gambling/Winston – As you know, first rule of operating an establishment – just make sure they keep playing and, eventually, they'll lose it all back.  Very sad…

  108. UNP – must be moving all that steel from X!

  109. Hard to believe this market with the dollar up, too.

  110. Scott:  I am very far from being a "seer", in respect of stock markets or anything else.  But the low volumes that Phil has pointed out every day and the less-than-likely possibility that hordes of individual investors are pumping their paltry savings into the U.S. markets leads me to believe that this is either foreign buying, from places [e.g., the Eurozone, Japan and China] where the economies are actually worse — and not much of that, given the volume — or some type of manipulation from sources I can't even guess at.  I've got my TQQQ on, but as long the the music's playing, I guess I'll keep dancing. 

  111. UPL/Burr:   I opened a position on them this morning, buying a Sep 24 calls at 1.60. This is a Stephen Bigalow ( as in candlestick trader) pick, and is coming off a bottom with nice technicals. Not interested in them long term, just a fun little momentum play. If it crosses below the 5 EMA, I'm out.  Best of luck.

  112. Anothe fantabulous day for the record books.  

    Despite thelow volume, we've made serios technical progress today. 

    Stii up to the Fed in the end.  

  113. zeroxzero

    Low volume with HFT which was 75% of the volume but now I suspect 90%. Here is a way out there idea, maybe the main holders of stock have no intention of selling, the 100% invested long term idea. HFT firms are way down on profits but that won't stop them from trying.

  114. With the dollar up 0.3% today, they have that much ammo to move the markets up another notch if needed. Dollar was that high back in last August last year and sold off all the way to 79 in 2 months! The market moved up accordingly. History to repeat itself?

  115. 50 DMA all behind us now… Maybe that was another dip worth buying – at least for a trade!

  116. Fishy financial disclosure at Darden’s Red Lobster

    Darden Restaurants has told shareholders that Red Lobster smells like week-old fish. But to other investors, the chain was described as a treat.

    Read more:

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  117. ‘Everything is pricey’: Robert Shiller

    Stocks, bonds and housing might all be getting too expensive, economist Robert Shiller says.

    Read more:

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    and iPad

  118. Super Bowl halftime show: You have to pay to play

    The NFL has asked potential halftime show performers to pay to play, receiving less than enthused responses.

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  119. David Rosenberg’s still a bull—but he’s frustrated

    Economist David Rosenberg is famous for turning from a bear to a bull. Now he’s reconsidering.

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  120. The poor get poorer: Low-wage jobs still dominate

    Behind the numbers is a disconcerting brew of unemployment statistics that shows the jobs market is far from full health.

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    Three rockets fired from Gaza struck southern Israel, breaking a cease-fire, drawing Israeli retaliation and prompting Israel to recall its delegation from talks aimed at ending the latest conflict.


    The government said it saw a chance for peace in eastern Ukraine after word that the two leaders and European Union officials would meet next week.


    Given the facts, the indictment appears to be the product of an overzealous prosecution.


    Republicans don’t like that a voter registration table was set up in front of a Mike Brown memorial.


    Software and hardware might be changing how humans work — sometimes for the worse.


    The news last week brought two fresh reminders of the government’s failure to hold Wall Street accountable for the financial crisis.


    An analysis of a decade of web searches shows the different subjects that occupy people’s thoughts in a highly unequal country.


    The Meadowlands Regional Chamber of Commerce is proposing a casino, two hotels, a convention center and a youth sports center nine miles west of Manhattan.


    A deal with Victory Park Capital, a Chicago-based firm known for backing small-business financing ventures, will broaden the start-up’s efforts to provide small capital extensions.

  130. Scottmi – Margin

    Do you use Portfolio Margin?  I do at IB and what I find is that the initial margin they charge me to open a short put position isn't the same margin if the position goes against me, the margin will rise.  Which makes Port Margin a blessing and a curse.  I believe that it can save my butt, but also allow my to over lever my account with the margin in a calm market not reflecting the increases in a high vol market.

    Anyway, if you do have Port Margin, how do you figure out these calculations each night?  Does TOS have a margin report or a way to do that calc?

  131. Margin/Burr – regT margin, but also moves up and down with price and time. TOS gives a running calc for margin requirement on each position. I use Excel to do the math on a regular basis for positions that I know were getting close. No automated solution for me on this. Important to note that the 20% threshold is to put it on my list to close. If I don't have a better opportunity, it is still, relatively safely, earning 10, 11, 15 or 20% as it erodes daily, which is much better than just the cash. 

  132. From Bloomberg, Aug 20, 2014, 2:30:09 AM

    Aug. 20 (Bloomberg) — Roger Montgomery, founder and chief investment officer of Montgomery Investment Management Pty., talks about the outlook for Australian stocks, BHP Billiton Ltd. and his investment strategy.
    He speaks with John Dawson on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    Asian stocks fell after valuations
    reached the highest level this year and as BHP Billiton Ltd. (BHP)
    slumped, dragging materials shares to the largest decline on the
    regional gauge.

    To read the entire article, go to

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  133. From Bloomberg, Aug 20, 2014, 12:39:24 AM

    A man browses engine parts at the NSK Ltd. booth at the Auto Shanghai 2011 car show in Shanghai. Denso Corp., Aisan Industry Co. and NSK Ltd. were among companies found guilty as regulatory scrutiny tightens in China. Photographer: Nelson Ching/Bloomberg

    China found a dozen Japanese auto-parts makers guilty of price fixing and doled out the biggest
    antitrust fines in the country since relevant rules came into
    effect six years ago.

    To read the entire article, go to

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  134. From Bloomberg, Aug 19, 2014, 5:00:01 PM

    German Foreign Minister Frank-Walter Steinmeier yesterday called the discussions, which also included France’s Laurent Fabius, “a difficult conversation.” Photographer: Sean Gallup/Getty Images

    The Ukrainian government said its forces took control of one of four districts in the pro-Russian separatist stronghold of Luhansk and are fighting in the city center as diplomatic efforts to end the conflict intensified.

    To read the entire article, go to

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  135. From Bloomberg, Aug 20, 2014, 1:32:38 AM

    Aug. 20 (Bloomberg) — Japan’s exports rose more than forecast in July, bouncing back from two straight declines to support an economy that contracted last quarter by the most since a record earthquake in 2011. Bloomberg’s David Ingles takes a look at Japan’s trade balance on “First Up.” (Source: Bloomberg)

    Japan’s exports rose more than forecast in July, bouncing back from two straight declines to support an economy that contracted last quarter by the most since a record earthquake in 2011.

    To read the entire article, go to

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  136. From Bloomberg, Aug 20, 2014, 12:01:00 AM

    The construction wall of the new Apple store at Omotesando on June 4, 2014 in Tokyo. Photographer: Chris McGrath/Getty Images

    Apple Inc. (AAPL)’s stock closed at an all-time high, surpassing a 2012 record as investors look ahead to new products such as bigger-screen iPhones and a wristwatch-like device that may jump-start revenue growth.

    To read the entire article, go to

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  137. From Bloomberg, Aug 20, 2014, 1:39:12 AM

    Carlsberg A/S (CARLB), Russia’s biggest
    brewer, cut its full-year earnings outlook amid mounting
    economic difficulties in eastern Europe.

    To read the entire article, go to

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  138. From Bloomberg, Aug 20, 2014, 1:18:46 AM

    Heineken NV (HEIA), the world’s third-biggest brewer, expects growth to moderate in the remainder of
    the year after posting profit in the first half that topped
    analysts’ estimates.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  139. From Bloomberg, Aug 19, 2014, 10:37:51 AM

    There’s a new bull at the top of the
    Wall Street strategist charts.

    To read the entire article, go to

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  140. Watch this video at

    Why Bank of China Is Doubling Bad Loan Provisions

    Aug. 20 (Bloomberg) — Bank of China more than doubled its money set aside for bad loans as profit growth cooled to the slowest pace in five quarters on weakness in the economy. Bloomberg’s Stephen Engle has more on “First Up.” (Source: Bloomberg)

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  141. From Bloomberg, Jul 9, 2014, 10:47:52 AM

    July 9 (Bloomberg) –- Bloomberg’s John Dawson reports on Chinese buyers spending $22B on homes in the U.S. in 2013. He speaks to Rishaad Salamat on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

    Henry Nunez, a real estate agent in Arcadia, California, met with so many homebuyers from China that he bought a Mandarin-English translation app for his phone.

    To read the entire article, go to

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  142. From Bloomberg, Aug 18, 2014, 7:51:01 PM

    A group of Chinese hackers has stolen 4.5 million medical records from a Tennessee-based hospital chain, breaking from the group’s previous attacks, which focused on high-stakes industrial espionage. Photographer: Alessia Pierdomenico/Bloomberg

    A group of sophisticated Chinese hackers known for its high-stakes corporate espionage has a history of stealing medical-device blueprints, prescription-drug formulas and other valuable intellectual property from large health-care companies.

    To read the entire article, go to

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  143. From Bloomberg, Aug 19, 2014, 11:55:05 PM

    A man takes a photograph in the desert in Mandalgovi, Dundgovi province, Mongolia. Photographer: Brent Lewin/Bloomberg

    After two decades courting Western investors and political allies, Mongolia is refocusing on foreign ties closer to home seeking to revive its economy.

    To read the entire article, go to

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  144. From Bloomberg, Aug 20, 2014, 12:10:34 AM

    Aug. 19 (Bloomberg) — Jonathan Larsen, Citigroup Inc.’s global head of retail banking, speaks about the bank’s business strategy in Asia and China’s credit market.
    He speaks in Hong Kong with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Citigroup Inc., the firm that earns the most international revenue of any U.S. lender, is considering selling its consumer-banking business in Japan, two people with knowledge of the matter said.

    To read the entire article, go to

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  145. From Bloomberg, Aug 20, 2014, 12:00:01 AM

    Aug. 15 (Bloomberg) — Former Argentina central bank president Mario Blejer discusses the repercussions from the country’s bond default last month and Bank of England monetary policy.
    He talks with Anna Edwards on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    Argentina plans to pay its foreign-currency bonds locally to sidestep a U.S. court ruling that blocked payments last month and caused the nation to default for a second time in 13 years.

    To read the entire article, go to

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  146. Watch this video at

    Maersk Boosts Profit Forecast, Plans $1B Share Buyback

    Aug. 19: Bloomberg’s Caroline Hyde examines second-quarter results form Maersk as the company boosted its full-year profit forecast and announced a $1 billion share buyback.

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  147. Watch this video at

    Global Rise in Asian Banks’ Shares `Done’: Antos

    Aug. 20 (Bloomberg) — Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., talks about Asian banks’ shares, the outlook for Chinese lenders and Oversea-Chinese Banking Corp.’s plans to raise $2.7 billion.
    He spoke yesterday with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

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  148. From Bloomberg, Aug 19, 2014, 6:00:00 PM

    Moody’s Investors Service downgraded
    the local-currency ratings of South Africa’s four biggest lenders
    and kept them on review for a further cut following the collapse
    of African Bank Investments Ltd. (ABL)

    To read the entire article, go to

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  149. From Bloomberg, Aug 20, 2014, 12:00:01 AM

    July 16 (Bloomberg) – Federal Reserve Chairman Janet Yellen speaks about the U.S. economy and Fed policy.
    Yellen testifies before the House Financial Services Committee as part of her semi-annual report to Congress. (This report is part one of the hearing. Source: Bloomberg)

    Here’s what to look for from the
    Federal Reserve Bank of Kansas City’s annual economic symposium
    in Jackson Hole, Wyoming, which runs Aug. 21-23.

    To read the entire article, go to

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  150. From Bloomberg, Aug 19, 2014, 6:18:52 AM

    Aug. 18 (Bloomberg) — Michael McKee previews the Fed’s meeting in Jackson Hole, WY. McKee speaks on “In The Loop.” (Source: Bloomberg)

    Andrew Garthwaite has a message for stock investors unnerved by the prospect of the first Federal Reserve interest-rate increase since 2006: Don’t panic.

    To read the entire article, go to

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  151. From Bloomberg, Aug 19, 2014, 12:27:49 PM

    Investors are looking elsewhere in emerging markets for bargains as sanctions hitting Russia, Greece’s biggest trading partner, disrupt businesses. Photographer: Konstantinos Tsakalidis/Bloomberg

    The curtain is coming down on
    Greece’s star turn with international equity investors.

    To read the entire article, go to

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  152. From Bloomberg, Aug 19, 2014, 2:53:51 PM

    Angus cattle grazed by organic farmer Will Meurer of Wholesome Living Farm roam on farmland in Winchester, Kentucky. Photographer: Luke Sharrett/Bloomberg

    Signs of a rebound in U.S. beef supplies are taking shape with the changing color of the pastures on Glen Cope’s 2,000-acre ranch in Aurora, Missouri.

    To read the entire article, go to

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  153. From Bloomberg, Aug 19, 2014, 4:11:43 PM

    Aug. 11 (Bloomberg) — Patterson Advisory Group Chairman and CEO Jim Patterson and Bloomberg Intelligence Telecom Analyst John Butler discuss challenges facing Sprint’s new CEO Marcelo Claure. Patterson and Butler speak on “In The Loop.” (Source: Bloomberg)

    Sprint Corp. (S) Chief Executive Officer Marcelo Claure is doubling the amount of data available for shared plans, joining the U.S. wireless industry’s price competition a week after taking over the company.

    To read the entire article, go to

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  154. From Bloomberg, Aug 19, 2014, 5:17:42 PM

    Shoppers wait in line at a Family Dollar Stores Inc. store in Belleville, New Jersey. Photographer: Michael Nagle/Bloomberg

    Dollar Tree Inc. may find it’s not worth it to keep pursuing one of its rivals.

    To read the entire article, go to

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  155. From Bloomberg, Aug 19, 2014, 4:06:58 PM

    Apple Inc. Chief Executive Officer Tim Cook is looking to make the company’s iPad more of a business tool as sales of the tablet have recently fallen for two consecutive quarters, the first such decline since the product’s 2011 debut. Photographer: Craig Warga/Bloomberg

    Apple Inc. (AAPL), Google Inc. (GOOG) and Inc. (AMZN) rose up by riding consumer demand for their products. Now the companies are trying to keep their growth streaks going by tapping another type of customer: businesses.

    To read the entire article, go to

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  156. From Bloomberg, Aug 20, 2014, 12:33:06 AM

    Reserve Bank of Australia Governor
    Glenn Stevens delivered his semi-annual testimony to a
    parliamentary panel in Brisbane today in which he indicated
    lower interest rates were unlikely to accelerate growth; rather,
    what the economy needed was a release of “animal spirits.”

    To read the entire article, go to

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  157. From Bloomberg, Aug 19, 2014, 11:00:10 AM

    National Defense Academy of Japan (NDA) cadets dismantle and reassemble rifles during a class at the NDA campus in Yokosuka, Kanagawa Prefecture, Japan. Photographer: Yuriko Nakao/Bloomb

    Defense-related shares in Japan beat the national benchmark and U.S. peers since Prime Minister Shinzo Abe came to power and embarked on a policy to strengthen the military and lower barriers to arms exports.

    To read the entire article, go to

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  158. From Bloomberg, Aug 20, 2014, 2:30:01 AM

    Coal is transported along conveyors toward the berth at Qinhuangdao port. Photographer: Sarah Chen/Bloomberg

    Qinhuangdao, home to China’s largest
    coal port that’s been called an indicator of Asia’s biggest
    economy, is set for record commodity deliveries over the next
    three years as urbanization boosts demand for the fuel.

    To read the entire article, go to

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  159. From Bloomberg, Aug 19, 2014, 7:00:00 PM

    Car sales, which grew by monthly leaps of as much as 88 percent in 2007, plunged by an average of 20 percent in June and July. Photographer: Andrey Rudakov/Bloomberg

    Russians are backing Vladimir Putin
    as he confronts the U.S. and Europe over Ukraine, even if their
    wallets tell a different story.

    To read the entire article, go to

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  160. From Bloomberg, Aug 19, 2014, 5:00:01 PM

    Palestinian teens on the beach during the 5-day humanitarian ceasefire in Gaza City, Gaza on Aug. 14, 2014. Photographer: Naaman Omar/Anadolu Agency via Getty Images

    Restaurant owner Salah Abu Hasira used to imagine his Gaza Strip homeland as a tourism destination with suntanned bathers lounging on its beach and visitors retracing the steps of biblical body-builder Samson.

    To read the entire article, go to

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  161. From Bloomberg, Aug 19, 2014, 4:49:31 PM

    Beginning home construction climbed 15.7 percent to a 1.09million annualized rate following June’s 945,000 pace, which wasstronger than previously reported, the Commerce Departmentreported today in Washington. The level exceeded the highestPhotographer: Luke Sharrett/Bloomberg

    Home construction rebounded in July and the cost of living rose at a slower pace, showing a strengthening U.S. economy has yet to generate a sustained pickup in inflation.

    To read the entire article, go to

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  162. The future of MCD?, is really amazing the merge of technologies, is 10 mins but will enjoy it.


  163. Woot! Yen at 103.35! Gotta run out and go change some money tomorrow just in case this turns out to be a double top.

  164. Good morning! 

    What a nice dip on /NKD and the Dow overnight, picked up 100 points on both and oil popped back too – very good to wake up to.  Now the Futures have re-set and the Dow is back to 16,875, where I still like it short, /ES 1,975, /NQ 4,033 and /TF 1,155 so we want to see those break (/NQ 4,025) to be comfortable.   At 1,155, the RUT has erased all of yesterday's gains.

    /CLU4 (Sept) popped $1.40 overnight to $95.87 and /CLV4 is, so far, up to just $93.08, back to a huge gap but it's the last day for /CLU4.  I still like /CLV4 bullish over $93 as I think once /CLU4 expires, it should drift up a bit.  

    The Dollar hit 82.15 and is sitting at the high, that should get /NKD back to 15,500, where I'll probably like it short again.  

    Asia was generally flat, Europe is down about 0.3% and that means we pushed it too far yesterday with a half-point game and no one is buying that BS. 


    Dave had a good note this morning:

    Hobson owned a livery stable and he rotated his horses to different stalls. He offered customers the choice of taking the horse in the first stable or none at all. Henry Ford also offered a variation of Hobson’s Choice since customers could buy a car in any color they liked, as long as it was black. The stock market offers many choices but only stocks are effective as bonds offer no yield while Fed policies have forced investors to stocks or nothing else.

    This is basically the issue for investors in financial markets, buy stocks or nothing else. Farmland is admittedly in a bubble as Iowa farmland now goes for $8,500 per acre. If you can buy it right, some residential real estate offers a decent rental yield. Then there is the weird world of collectibles where you really need to know what you’re doing and have adequate cash.

    So stock markets remain in play at least for most institutions. We’ve seen heavy volume sell-offs meaning most retail investors continue to loathe and leave markets. It remains a market for captive retirement money and institutions including financial and hedge funds.

    We are NOT captive money – keep that in mind.  We're playing this game as long as it lasts but don't let yourself get sucked into positions you can't get out of when things turn sour (they will).